Peter, a few minutes after you turn on that transmitter you'll have black helicopters as well as speakers in your back yard....Just kidding(I hope), but although the FCC doesn't license FM transmitters under 1 watt, part 15 of FCC Regs does restrict very low power FM transmitters(47 CFR Sec. 15.239)to certain field strength levels which in effect limit these devices to a 100 foot range. It isn't clear from the ad, but it appears that the one in question won't have a sticker on it certifying that it meets the FCC Reg. As sushi suggested, if you can find a "dead" FM frequency in your area at least 0.4 Mhz and preferably 0.6 Mhz from a licensed station, there may be no problem, but the thing probably isn't in compliance.
