In practice, the requirements for transponders are interpreted variously by
different responsible agencies. In my TCA, surrounding SEA, the outer edges of
the mode C skirt are largely unregulated in practice. If ATC cannot image you
on radar, they do not want you pinging, nor do they want you talking to them.
The wording in the FARs allows for an exception if prior permission is granted
for operation without mode C ...this is assumed to have been granted for the
entire S. Puget sound, and they don't want you calling them and asking. "Stay
below radar coverage and keep VFR separation, I've got to deal with all of this
heavy traffic, and OLY and McCord AFB will ignore you too in VFR conditions."
In the LA TCA I've lost radio while asking for clearance into Ventura.(
alternator was sparking and RFI overwhelmed the transmitter) In practice, I
just turned toward White field (uncontrolled) and landed. All of this
regulation is designed to allow ATC to provide positive separation where
conflict is present. If they can't hear or see you, they want you to take care
of yourself, whether your TC shows a source of electrical power or not. Peter