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HQ 086478

April 9, 1990

CLA-2 CO:R:C:G 086478 MBR


TARIFF NO.: 8517.30.50

Mr. Harry Wood
H.A. & J.L. Wood, Inc.
Pembina, North Dakota

RE: "DevelNet" networking data system

Dear Mr. Wood:

This is in reply to your letter October 24, 1989, on behalf of Develcon Electronics, requesting classification of the DevelNet system, under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA).


The DevelNet system has been designed to fulfill local area network requirements by providing data processing functions similar to a centralized data PBX. The system also allows the user to create regional or national "wide area" networks by connecting various local area networks into a fully integrated data communications network. This will permit users of the various terminals, computers, or other devices, in one part of the network to communicate with other equipment (users, data bases, terminals, etc.) throughout the network which may operate with different communications protocols and speeds. In addition, DevelNet is being developed to provide access to public and private data transmission networks such as Telenet, Tymnet, Datapac and Ethernet. DevelNet is also being designed to incorporate data PBX or local area networking devices from other vendors into its wide area network. This will permit customers who have already installed local data communications equipment (i.e., Local Area Networks) to implement a wide area network without having to replace previously installed equipment. DevelNet has been designed to incorporate network management features, redundant power supplies, controller boards, and self diagnostic capabilities.

The DevelNet system consists of the following components:

Chassis, Models 7401 and 7403R - The DevelNet chassis houses the various components that constitute the "DevelNet Node." The chassis performs no electrical or electronic functions other than termination of the internal DevelNet communications bus and battery power for memory. Model 7401 is the chassis for a 32-slot DevelNet Node. Either of these chassis combined with the appropriate cards and power supplies described below form a working system.

Arbiter Cards, Models 7220 and 7221 - The Arbiter cards primarily govern access to the internal DevelNet data bus. The various DevelNet cards require the data bus to transfer data and control characters between themselves. The other functions of the Arbiter cards include: error detection, statistical reporting and system clocks.

Node Controller Card, Model 7202 - The operating system software and configuration database are resident in memory on the Node Controller Card. The Node Controller provides the central processing and control necessary for the proper operation of the DevelNet Node as a whole and configuration for the entities that make up the Node.

Linecards, Models 7108, 7118 and 7124 - These provide the means of connecting external digital equipment to a DevelNet Node. The linecard interfaces conform to the Electronic Industries Association RS-232-C standard which specifies the interface between Data Terminal Equipment (DTE) and Data Communication Equipment (DCE).

Power Supplies, Models 7330, 7331 and 7386 - The power supplies provide 5 volt and 15 volt dc, required to operate the DevelNet Nodes. Models 7330 and 7331 are "redundant" and operate in a load sharing capacity (for a 10 slot DevelNet Node).


What is the classification of the DevelNet networking data system, under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA)?


The General Rules of Interpretation (GRI's) to the HTSUSA govern the classification of goods in the tariff schedule. GRI 1 states, in pertinent part:

...classification shall be determined according to the terms of the headings and any relative section or chapter notes...

Heading 8517, HTSUSA, provides for: "[e]lectrical apparatus for line telephony or line telegraphy, including such apparatus for carrier-current line systems." The Harmonized Commodity Description and Coding System Explanatory Notes (EN) to heading 8517 of the HTSUSA, page 1360, state:

The term "electrical apparatus for line telephony or line telegraphy" means apparatus for the transmission between two points of speech or other sounds (or of symbols representing written messages, images or other data), by variation of an electric current or of an optical wave flowing in a metallic or dielectric (copper, optical fibers, combination cable, etc.) circuit connecting the transmitting station to the receiving station. The heading covers all such electrical apparatus designed for this purpose, including the special apparatus used for carrier-current line systems.

The term "apparatus" has been defined by the courts as a combination of articles and materials which are intended, adapted, and necessary for the accomplishment of some purpose. The Deseret Co., v. United States, ___CIT___, Slip Op. 86-93 (1986). The DevelNet system and its components are clearly a combination of articles and materials intended, adapted and necessary for the accomplishment of a specific purpose, i.e., that of data system communication. Therefore, the DevelNet system and each of its components can be appropriately termed "apparatus."

The issue of what "Carrier Current" line systems are has been raised. "Carrier Current" is used in connection with both power and communications circuits, however, the principle is basically the same for both systems. The term refers to the use of a relatively high-frequency ac superimposed on the ordinary circuit frequencies in order to increase the usefulness of a given transmission line. Thus, in the case of power systems, carrier currents of several kHz frequency are coupled to the 60-Hz transmission lines. These carrier currents may be modulated to provide telephone communication between points on the power system or they may be used to actuate relays on the system. The latter use is known as carrier relaying. Carrier currents have greatly extended the usefulness of existing line facilities of the telephone and telegraph companies. Several carrier frequencies may be coupled to the lines already having regular voice or telegraph signals on them. Each of these carrier frequencies may be modulated with a separate voice or telegraph channel and thus a given line may carry the regular signal plus several new carrier channels, each of which is equivalent to another circuit at regular frequencies. At the receiving end, the various channels are separated by filters and the signals are demodulated and then fed to conventional phone or telegraph circuits. The number of carrier channels which may be applied to a given line depends upon the characteristics of the line, varying from one or two for some lines to several hundred for a coaxial cable. Van Nostrand's Scientific Encyclopedia, Seventh Edition, Vol. 1, page 518 (1989).

The Customs Co-Operation Council Harmonized Commodity Description and Coding System, Summary of Comments and Observations by the Technical Team, Chapter 85, (April 25, 1979) stated:

With regard to packet switching equipment, the Technical Team reproduces below, for information, a text published by the Secretariat for the attention of the Working Party on Customs applications of computers (Doc. 21.926):

The transmission of computer system messages or parts of messages between distant points in the form of discrete packets which are transmitted over an independently operated computer driven network. The routes followed by messages are determined by the network and not by the sending systems. Packet switching is in many ways analogous to the conventional manual postal system in which an independent carrier receives and delivers letter packets for a community of users. Any one transmission line of the network may carry messages from different senders to different addresses. A message to be transmitted across a packet switched network is handled in the following manner: [t]he message is split into a number of packets of fixed maximum size each prefixed by the source and destination addresses, length and sequence number. Each packet is then handled by the network as a discrete message, being passed from one switch or node of the network to the next as soon as possible, depending on the destination address, the traffic density and the routes available. At the destination, the addresses, etc., are stripped off, the packets combined to form the original message and an acknowledgement sent back to the source according to whether or not the message is free from error. By using high speed links for the network, packets, originating from a large number of users transmitting into the network at moderate speeds, may be interleaved within the network, while maintaining full integrity and security. In this manner, network time is shared between users in a similar manner to that of a time sharing computer system.

Although the above text is not binding on us, such information is helpful in that it is demonstative of the Customs Co-Operation Council's consideration for inclusion of this type of apparatus in Chapter 85.

Clearly, the DevelNet networking data system is apparatus designed for the transmission of data between two points, by variation of an electric current connecting the transmitting station to the receiving station. Furthermore, you state that the DevelNet is analogous to a centralized data PBX (Private Branch Exchange). Therefore, it is Customs position that the DevelNet is properly classifiable under subheading 8517.30.50, which provides for: "[e]lectrical apparatus for line telephony or telegraphy...: [t]elegraphic or telephonic switching apparatus: [o]ther." See NY 838270 (March 24, 1989).


The DevelNet is classifiable under subheading 8517.30.50, HTSUSA, (whether imported together or as separate components) which provides for: "[e]lectrical apparatus for line telephony or telegraphy...: [t]elegraphic or telephonic switching apparatus:


John Durant, Director

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