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FCC Slaps Retailers With Millions In DTV Fines

4/10/2008 04:13:00 PM Eastern



Washington, D.C. – Cracking down on those who allegedly have not heeded its mandates related to the DTV transition, the Federal Communications Commission (FCC) Thursday adopted 11 enforcement orders against CE retailers and manufacturers.

Specifically, the orders included seven Notices of Apparent Liability for Forfeiture (NAL) against retail chains for alleged violations of its DTV labeling requirements, two NALs for alleged violations of the DTV tuner mandate and two NALs for alleged violations of the V-Chip mandate.

Those named in the order will have 30 days to respond to the FCC.

For labeling violations, seven retail chains were slapped with NALs totaling $3.9 million. This was for failing to post labels on analog televisions warning consumers that the sets did not include a digital tuner and would not receive over-the-air broadcasts after Feb. 17, 2009, the FCC said.

Those chains included the following:

* Sears, Roebuck, K-Mart, $1,096,000;

* Wal-Mart Stores/Sam's West; $992,000.

* Circuit City Stores, $712,000;

* Fry's Electronics, $384,000;

* Target, $296,000

* Best Buy, $280,000

* CompUSA, $168,000

Retailers reached by TWICE for comment were furious that the FCC would seek such action after several of the chains had taken aggressive steps to work with the FCC and the National Telecommunications and Information Administration on public education programs for the DTV transition and the government TV converter box coupon program.

Commenting on the action, a spokesperson for Circuit City said the chain is “disappointed that the FCC has not fully recognized the constructive efforts being made by retailers and others engaged in the digital TV transition. We have begun a year-long, multifaceted campaign to educate the public about the nation’s upcoming transition from analog to digital TV broadcasting and we are participating fully in the government's coupon program to help consumers purchase DTV converter boxes.”

A Best Buy spokesman said that chain “is extremely disappointed that the FCC has chosen this course of action around an issue that is no longer even relevant to our stores.”

Best Buy said it voluntarily pulled all analog-only tuner products from stores on Oct. 1, 2007 in a proactive effort to prevent confusion and to help jump start consumer awareness around the DTV conversion.

The chain pointed out it has been “a leader in helping educate consumers about the analog to digital transition. We were among the first retailers to put signage and brochures in our stores, including Spanish language versions of this material.  We have had extensive DTV information available on BestBuy.com as well as our Spanish language Web site. In addition, we have a toll free line, 877-BBY-DTV9, that is set up to give information about the DTV transition and also to allow people to redeem their government coupons and purchase a converter box via phone.”

Best Buy said it has been “in ongoing talks with the FCC on how [it] can continue to help consumers with multi-channel education efforts. We believe the FCC's decision to seek fines in lieu of this dialogue represents a step backward from our mutual goal of fully preparing consumers for the DTV transition.

“The FCC's action today is in response to a relatively small number of instances. Best Buy took immediate action to address every FCC finding and ultimately took the landmark step of fully transitioning to DTV-compatible inventory.”

A spokesman for CompUSA pointed out that the FCC’s enforcement order was directed at the former management of CompUSA, and does not pertain to “the all-new CompUSA” that opened up 16 stores, and Web site in January under the ownership of Systemax.

“We have no action. We have no restriction. We have to pay no fines. We are in full compliance and we continue to be,” said CompUSA spokesman Lonny Paul. “But the reason this continues to happen is that the FCC should have put the onus on the manufacturers to put this on their packaging.”

Wal-Mart stated that “all product that we sell today complies with FCC regulations. We will continue our good faith efforts to comply with FCC requests, and we have already voluntarily invested millions of dollars in new technology, training, new product and consumer education for the FCC's DTV transition program. We have made huge strides to do our part."

Target said it “has taken a number of steps to inform our guests about the transition from analog to digital, including in-store marketing, an informational brochure and team member training. We remain committed to assisting our guests as we prepare for the transition and will review the findings from the FCC and take the appropriate action.“

A Sears spokesperson said, "We are surprised at today’s announcement as we have been working closely with the FCC to facilitate the transition from analog to digital TVs and educate the American public. We eliminated analog inventory from our stores last fall and we'll soon be offering customers digital converter boxes.  We are exploring our options."

Meanwhile, Syntax Brillian was slapped with an NAL totaling $1.266 million for failing to include digital tuners in DTV sets. Precor was assessed $357,000 for the same infraction.

The FCC said the digital tuner rule was established to restrict “the importation and interstate shipment of analog-only televisions, and helps protect consumers from purchasing televisions that cannot receive digital signals.”

Representatives for Syntax Brillian could not be reached for comment.

Two NALs were issued for violations of the FCC’s V-Chip rules.

“These rules ensure that consumers' television receivers are capable of adapting to changes in the content advisory rating system,” the FCC said.

Those issued NAL’s for alleged V-Chip violations included:

Polaroid, $775,000

Proview Technology, $300,000

Meanwhile, the FCC Enforcement Bureau said it adopted consent decrees with seven electronics manufacturers resolving investigations of possible violations of the V-Chip rules.

The investigations examined whether the manufacturers had complied with the Commission’s rule requiring that consumers’ television receivers be capable of adapting to changes in the content advisory rating system.

The consent decrees, which reflect the specific factual circumstances of each case, include significant voluntary contributions as well as compliance measures to avoid future violations, the FCC said.

Examples of compliance measures include training of employees in FCC rules, fixing non-compliant television receivers already on the market, reviewing design specifications and testing equipment for compliance with FCC rules, and reporting periodically to the Commission to verify compliance.

Those issued V-Chip consent decrees included the following:

LG Electronics, $1,700,000

Philips Consumer Electronics, $450,000

Sanyo, $375,000

Vizio, 370,000

Panasonic, $320,000

Westinghouse Digital Electronics, $210,000

Audiovox, $20,000

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