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ISC West group and private meetings /  More on NY Digital Fair Repair Act and potential confusion
February 27, 2023
ISC West group and private meetings
          It’s time to prepare for ISC West at end of March.  I am going to schedule group discussion meetings and private meetings.  To reserve a spot at a group or private meeting please contact Stacy Spector,Esq. 1 516 747 6700 x 304 or, K&K’s Concierge Program coordinator [you don’t have to be a Concierge Client to reserve a spot].  Topics, private meetings and schedule are TBD.
          I will be available for private meetings and consultation.  I will also coordinate and attend, if you like, private meetings with some of those who will be participating in group discussion meetings. 
          Anyone who wants to lead a group discussion or have ideas for a discussion should contact me to be included in the schedule.
          The following are some of the group meetings I am planning [and will coordinate private meetings with these industry experts]
  *  What buyers look for and how they evaluate your business.  Meet one of the most active buyers of central stations, alarm companies and alarm accounts paying the highest multiples.
  *  How lenders view your company and decide on financing your business or your acquisition. Meet one of the most active lenders in the alarm industry
*  How the value of your alarm RMR is calculated and how non-RMR is calculated.  Meet one of the most knowledgeable tax and business consultants in the alarm industry
  *  What you should expect from your central station and what you can expect at the top central station in the business.
  *  Employee Retention Credit:  meet with tax expert to discuss if you’re eligible
  *  Alarm contracts:  which ones you need and which ones you should have.  Group or private meeting with Ken Kirschenbaum
  *  Buy-Sell deals:  Thinking about or ready to sell?  Meet with Ken Kirschenbaum to discuss best ways to increase value and get ready to sell or buy.
  *  AIN buying group.  Meet with Stan Matysiak in group or privately, time well spent
  *  Brokers:  discuss options and what to expect
  *  Thinking of selling:  Discuss multiples and what your company is worth
  *  E&O coverage: What's available; what do you need; where to get it

More on NY Digital Fair Repair Act and potential confusion
          I received a report issued by The Alarm Industry Communications Committee (AICC).  This committee is made up of members of The Monitoring Association [TMA], Electronic Security Association [ESA] and the Security Industry Association [SIA] and major alarm companies and manufacturers.  These are hard-working people committed to the betterment of the alarm industry, but I’m not sure they are lawyers and probably shouldn’t be offering legal advice.
          AICC issued a report on the DFRA [Digital Fair Repair Act] that seemed to contradict or at least go well beyond in a few ways what I reported in my article on the new law on January 6, 2023.  [See prior article here:  Special Report: NY’s Digital Fair Repair Act – how will this affect distributorship and dealer programs january 6 2023]
          This is of some importance to manufacturers and those with Dealer Programs and Distributorships in New York and something that obviously needs to be watched closely by others around the country as similar laws are enacted.
          Here’s what I find troubling and confusing.  AICC and TMA reports to its members that the new NY law will, as written, “ help prevent the compromise of alarm systems in a way that would endanger customers and the public.”  They report that they commented on the original draft of the law and caused certain amendments which they are apparently believe accomplish at least some of that they were concerned about, the compromise of alarm systems.
          I’m not so sure.  AICC and TMA report that the law includes “a specific exemption for “home” security devices and alarm systems and also an “exemption for “medical devices” which should be broad enough to cover many security/medical monitoring pendants (to the extent that these devices are not already protected by the “home” alarm exemption discussed above.”
          Where are those exemptions in the law?  Here are a few relevant excerpts from the law:
          First, here is what the law requires in a broad stroke [note it applies to digital electronic equipment]:
2. Requirements. (a) For digital electronic equipment and parts for such equipment that are sold or used in this state, an original equipment manufacturer shall make available to any independent repair provider and owner of digital electronic equipment manufactured by or on behalf of or sold by such original equipment manufacturer, on fair and reasonable terms, any documentation, parts, and tools required for the  diagnosis, maintenance, or repair of such digital electronic equipment and parts for such equipment. Such documentation, parts, and tools 16 shall be made available either directly by such original equipment manufacturer or via an authorized repair provider.
          Here is what is meant by digital electronic equipment:
(b) "Digital electronic equipment" or "equipment" means any product with a value over ten dollars, adjusted annually by the rate of change in the consumer price index as reported by the bureau of labor statistics of the United States department of labor, that depends for its 7 functioning, in whole or in part, on digital electronics embedded in or attached to the product.
          Here is another relevant provision requiring compliance:
(b) For equipment that contains an electronic security lock or other 19 security-related function, the original equipment manufacturer shall make available to any owner and independent repair provider, on fair and reasonable terms, any special documentation, tools, and parts needed to access and reset the lock or function when disabled in the course of diagnosis, maintenance, or repair of such equipment. Such documentation, tools, and parts may be made available through appropriate secure release systems.
          Here are the exemptions that AICC and TMA apparently rely on in their report:
(g) Nothing in this section shall be construed to require any original equipment manufacturer or authorized repair provider to make available any parts, tools, or documentation required for the diagnosis, maintenance, or repair of any home appliance that has a digital electronic product embedded within it, including, but not limited to, refrigerators, ovens, microwaves, air conditioning and heating units, including any related software and components.
          Another exemption:
(e) Nothing in this section shall be construed to require an original equipment manufacturer or authorized repair provider to make available any parts, tools, or documentation required for the diagnosis, maintenance, or repair of public safety communications equipment, the intended use of which is for emergency response or prevention purposes by an emergency service organization such as a police, fire or emergency medical services agency.
          Another exemption:
(b) a medical device, as defined in this section, or a digital electronic product found in a medical setting including diagnostic, monitoring, or control equipment or any product or service that they offer;
          That’s all of it.  So here are my questions:
  *  are security systems and components in a home deemed a “home appliance”?  While the examples of a home appliance are set forth the list is not limiting.  However, I am not aware of any authority that includes security or fire alarm components an “appliance”. 
  *  are alarm systems within the definition of public safety communication equipment relied upon by “emergency service organizations”?  I don’t think so.  I think this refers to In-Building Wireless Communication Systems [included in the Fire All in One]
  *  even medical device “monitoring”.  Does this mean a medical alert pendant or does this mean a medical electronic piece of equipment in a hospital connected to the patient and monitoring vital health signs?
          My point is that the enacted law is confusing and will need to be refined by amended law or court decisions interpreting confusing issues.  There certainly is no clear exemption for home security systems or medical alert devices.  While these systems and their components may very well be held to be within the exemptions that is not clear by the law presently.
          This impacts the manufacturers who have authorized dealers, those dealers and distributors and those who are unauthorized and want access to these products.

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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301