Importer's Cables Designed for Use in Telecom Systems, Not for Telecommunications, US Says

Importer Cyber Power argued in its own motion for judgment March 28 that its cables should be classified under Harmonized Tariff Schedule subheading 8544.42.20 for telecommunications cables -- the classification under which the products were initially liquidated (see 2504010067) -- rather than the government's preferred subheading 8544.42.90 for "other" power cables. The latter carries Section 301 duties. The U.S. initially attempted to file a counterclaim, but the Court of International Trade held that it lacked a statutory basis (see 2207200052).

Cyber Power's cables are used to connect optical network terminal (ONT) devices, which provide users internet or phone services, to backup batteries. Cyber Power argues the products should fall under the subheading for telecommunications systems because they are part of a broader telecommunications system.

But telecommunications cables are "used to transfer, transmit, and receive information," the U.S. said in its June 27 cross-motion. It said Cyber Power is confusing products designed for telecommunications with those designed for use in telecommunications systems.

The word "telecommunications" is defined by "[s]cientific and technical authorities" as "the practice of the transfer of information by any electromagnetic means, such as wire or radiowaves," it said. Merriam-Webster, meanwhile, describes it as "communication at a distance," it said.

To be a telecommunications product, therefore, a product must actually transmit and receive information electronically, it claimed. Cyber Power's cords don't do that, so they aren't the same class or kind as products meant for telecommunications.

It also conducted an analysis of the Carborundum factors. It said Cyber Power's cables' use "strongly indicates" that they are "commercially fungible with similar cables that deliver power, not telecommunications," as the cables are used only to provide a path for power transmission from a power source to an ONT unit. It also said that the physical characteristics of the importer's cables also support this, as they are mostly unable to transmit information -- except for one part, a 7PIN cable, which connects an ONT to a power adapter. But this cable only provides ONTs information on the status of the battery backup, it said.

Next, it said that it wouldn't be economically practical to use Cyber Power's cables as anything other than power cables. And, power cables are what customers expect when they purchase Cyber Power's product, it said.

It did say that the importer's cables don't pass through general channels of trade for power cables, but it claimed that "competing products," like Cyber Power's cables, are generally sold directly to service providers as power cords to connect ONTs to backup power sources.

The cables also were sold by Cyber Power to customers such as Verizon, it said, based on specifications that "described the product as a power cable."

"Cyber Power Nevertheless marketed the subject cables as 'telecom' cables in its online catalog," it said. "But the reference to 'telecom' indicates that it is used in the telecommunications industry because it plugs into an ONT. It does not indicate that the cables are actually used to telecommunicate."

FInally, it said, the industry generally recognizes the products as power cables. It pointed to a Cyber Power competitor, PowerTec Solutions, which also produces wires "recognized as providing power to ONTs."