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FCC issues $6 million in DTV fines to Wal-Mart, others

By Tim Conneally, BetaNews

April 11, 2008, 1:23 PM

The Federal Communications Commission has exacted fines on retailers found to not be fully advising customers about the DTV transition, including Best Buy, Wal-Mart, Circuit City, and Target; as well as a number of CE manufacturers.

Wal-Mart/Sam's West, Circuit City, Fry's, Target, Sears, K-Mart, and CompUSA were all found to have violated a federal rule on labeling analog TV-related merchandise sold either in-store or on their Web sites, resulting in a total of $3,928,000 in forfeitures.

The rule regards the transitional period from the analog to digital broadcast standard and states that retailers must clearly and conspicuously label when a piece of television merchandise does not contain a digital tuner. That label should read as follows:

CONSUMER ALERT: This television receiver has only an analog broadcast tuner and will require a converter box after February 17, 2009, to receive over-the-air broadcasts with an antenna because of the Nation's transition to digital broadcasting. Analog-only TVs should continue to work as before with cable and satellite TV services, gaming consoles, VCRs, DVD players, and similar products. For more information, call the Federal Communications Commission at 1-888-225-5322 (TTY: 1-888-835-5322) or visit the Commission's digital television website at: www.dtv.gov.

This label is intended to prevent consumers from buying any merchandise that will not receive digital signals without additional hardware, as only 60% of U.S. residents were recently shown to be aware of the DTV transition.

Sears Roebuck and its K-Mart subsidiary were cited for the most violations, with 16 Sears stores, its associated Web site, and 27 K-Mart stores all displaying different television receiving equipment without proper labels. This is an addition to a total of 43 prior citations of the same type. The company has to pay $1,096,000 to cover these infractions.

Syntax-Brillian, manufacturers of the Olevia and Vivitar brands, and Precor Inc, a fitness equipment manufacturer, were fined a total of $1.6 million for violating an FCC rule that disallows analog tuner-only equipped goods to be imported and sold. Syntax-Brillian responded to the Notice of Apparent Liability for Forfeiture with a statement claiming, among other things, that the FCC's fines are excessive, violate the Eighth Amendment to the constitution, and are inconsistent with the Commission precedent. Precor responded to its fines by claiming the devices allegedly in violation -- TV screens that integrate with workout equipment -- are not even available for consumer purchase and are sold only to commercial customers.

All companies fined have 30 days to file an appeal.

The third class of violation regards V-Chip functionality in digital receivers. Proview Technology Inc. and Polaroid Corporation were fined a collective $1,075,000 for breaking the following FCC rule:

Digital television receivers shall react in a similar manner as analog televisions when programmed to block specific rating categories. Effective March 15, 2006, digital television receivers will receive program rating descriptors transmitted pursuant to industry standard EIA/CEA-766-A "U.S. and Canadian Region Rating Tables (RRT) and Content Advisory Descriptors for Transport of Content Advisory Information using ATSC A/65-A Program and System Information Protocol (PSIP)," 2001 (incorporated by reference, see ยง 15.38). Blocking of programs shall occur when a program rating is received that meets the pre-determined user requirements. Digital television receivers shall be able to respond to changes in the content advisory rating system.

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By tkid124

edited Apr 11, 2008 - 2:55 PM

FCC now can regulate who buys and sells what?
I thought they were to make sure I didn't have to listen to some radio signal hijacker?
Yes people should be alerted to the fact that Digital TV is coming, yes a company is being shady for not advertising it.
But lets get real, and look at just what FCC is:
F: Federal
C: Communication
C: Commission
So why do they have any right what soever to say I can't import or sell analog only equipment. If they are harping on the warning, then why should it matter who makes or imports what?
If a product like oh say a built in screen for a work out machine, is analog and it doesn't hook up the the TV, then why would it matter to them? Kind of taking a leap outside there bounds, they deal with communication, not screens.
Sorry FCC, but you are just being the big bully now you were created to stop.

Score: 0

By CT2001

posted Apr 12, 2008 - 1:59 PM

"Sorry FCC, but you are just being the big bully now you were created to stop."

EXACTLY!!!

Score: 0

By gregmlr

posted Apr 11, 2008 - 4:47 PM

It's not like fining them will do much good, they'll just raise their prices.

Score: 0

By DatabaseBen

posted Apr 11, 2008 - 6:45 PM

!good point!

they simply pass on the savings or their costs to the customer.

Score: 0

By extremely well

posted Apr 12, 2008 - 12:48 AM

They can try to pass on the cost of the fine by raising the price for any items they sell, even non-electronics... However, they don't live in a void. If they COULD just arbitrarily raise prices to gain more PROFITS, obviously they would. But they live in a world where anything they sell has competition.

Hence, they did get hit hard, and if violations continue, obviously it means the fine was not high enough, so next fine should be DOUBLE, and the following one should be DOUBLE of the DOUBLE.

This is why any type of fine (even a speeding ticket) should be proportional to your income/"personal net worth". If Bill Gates is caught speeding, his fine should be a few million dollars, or a few hours of his work time, just as it would cost any other person. Otherwise, he may continue to speed (or hire people to speed for him).

Likewise for cops who speed when there's no emergency - some 3rd party group should have full authority to CLOCK THEM and then PERSONALLY FINE the individual cop at a much higher rate as that cop fines ordinary citizens, just for the obvious reason that he's going against the golden rule of obeying the law...

All the ideas above are pure logic and obviously will be implemented into laws in the next few decades/centuries. These are simple extensions of the absolutely necessary rule of "checks and balances" and "personal accountability by every single citizen". Right now too many people get away with too much...

Score: 0

By mcross

edited Apr 11, 2008 - 2:58 PM

I think that the FCC is doing a good service for us. Unfortunately, companies have to be continually reminded of their obligations. What is most important is that the companies be publicly named for their disregard. Consumers may end up paying collectively for the fines but it is important that the FCC enforce these rules. Otherwise, the companies would completely disregard all laws if they had the chance. Large companies are fully aware and informed regarding these manners, especially since they fought to postpone the initial digital transfer requirements that were set in the first place. Personally I think it is rediculous that these companies wouldn't place a cheap sticker on the merchandise. They have no shame. :)

Score: 0

By wingnut

edited Apr 11, 2008 - 2:51 PM

They should be required to buy back all those sets. Boy am I a dreamer!

Score: 0

By iLLz

posted Apr 11, 2008 - 1:57 PM

Good fine them. If they are not complying give it to em. My only gripe is I bet the consumer will pay in the long run. I wonder how many devices they flogged off with faulty or no disclaimers. In addition they probably made way more money with these shoddy practices then they were fined collectively.

Score: 0

By andrey

posted Apr 11, 2008 - 2:28 PM

I do hope Comission realizes that by doing "good" they're actually doing more harm. At the end, those fines will paid by the consumer since in order to stay profitable companies will increase the price on its "digital" TVs in order to recover the costs of the fine. And, as it always has been the case, the "updated" price becomes the standard and most ofthen than not consumers pay even more in the long run.

Score: 0

By jdotmusiconline

edited Apr 11, 2008 - 3:12 PM

right...so these companies should just just do whatever they want with no oversight, just so that they can make 'enough' money...whatever that magic figure may be...and if unknowing consumers get screwed, oh well, it's just capitalism, it's just the 'american way,' god help you sheep

Score: 0

By andrey

posted Apr 11, 2008 - 4:16 PM

by the way, a much wiser way to fine retailers would be to force them to offer an instant rebate to consumers who buy non-DTV televesions. This way consumer benefits, and retailers pay the fine which is directly proportional to the violation.

But as mentioned in article, fining a company a few millions is excessive and not beneficial to the consumer who purchase at all.

Score: 0

By andrey

posted Apr 11, 2008 - 4:03 PM

I dont' think I ever mentioned that fines should not be valid =)

The fact of the reality is that fines are there, but they should have conditions attached to them. For example, not to raise the price of goods for a certain period, etc.. Blank fines are simply a way for a comission to make money.

Further, if you understand anything about DTV, only a very small percentage of people will be affected. Specifically, only those who watch TV over-the-air (read >> can't afford cable, and most likely can't afford new TV).

So yes, it is a "capitalism", but a legal 'american way'.

Score: 0

By jdotmusiconline

posted Apr 11, 2008 - 4:53 PM

i think there are broader issues at stake, you can not set a precedent that it is ok for retailers to do whatever predatory things they wish because it is somehow 'for there own good,' be reasonable...it is a very slippery slope...but it's cool, you and john mccain can go play golf at your whites only country club or something while the rest of us suffer...i appreciate your spirited response bud, have a good one ;o)

Score: 0

By jdotmusiconline

posted Apr 11, 2008 - 5:00 PM

oh and one more thing, people who don't have cable (another poorly regulated, price-controlled industry) definitely don't deserve to know about the tvs they are buying because they can't afford a new tv anyway...infallible logic on that one champ

Score: 0

By morriscox

posted Apr 11, 2008 - 7:00 PM

You replied to yourself and you used the race card. You're not looking too good so far. (substituted for a rant about certain kinds of people)

Score: 0

By iLLz

edited Apr 11, 2008 - 6:00 PM

Mr. Jdot, I think Andrey was agreeing with my original post in that fining them was ok, but it does have the drawback of increasing costs to us consumers. That is a given. He even suggested fining them with "conditions" that they cannot raise prices for at least a few months or even allow those consumers who got one of these sets misleadingly, to return them or allow them to trade up for a comparable set that is DTV capable. TV's are usually an investment and even if the consumer can afford cable now and have it their ok, but if they need to cancel the service due to loss of a job or financial struggles, they will out of luck to use the set without some other hardware which will cost them more money.

I don't appreciate bringing race into it. The whole comment about whites only clubs was uncalled for.

Furthermore, he or anyone else that has posted no this topic at this time has never said anything anti-consumer. I think we are all on the same page with this topic so please be more mindful. :)

Lastly, and I am not sure if this is implement or not, but why can't a regulation be implemented that states any TV produced after a certain date be DTV capable. As to stop all of this nonsense. This should have been implemented last year to be honest. For instance, any TV produced after Jan. 1 2007 MUST BE DTV COMPLIANT. That would have been the way to go if you ask me, especially since we all knew this deadline was coming for some time.

iLLz over and out!

Score: 0

By andrey

edited Apr 11, 2008 - 6:07 PM

jdotmusiconline,

Basically, what you're saying is that consumer should be completely ignorant and shouldn't do a research before buying TV? In other words, by the same logic, do you expect government also review music equipment for you, for example? And in a case when you don't know anything about what you're buying, place a big red sticker on tape and record players saying those are outdated and "you won't be able to listen to new music on this thing?" Those players are still being sold at BestBuy and CircuitCity, by the way...

So, the point being, the excessive fine mentioned in the article is mostly for the commision (they have to justify being in business, don't they?) rather than for the benefit of the consumer who will be paying the fine, rather than the retailer. Unless, of course, the fine would have been administered differently.

Lastly, you need to keep comments on the topic rather than bringing politics, whites, etc.. That's not a way to conduct constructive discussion.

Score: 0

By partypop

edited Apr 12, 2008 - 1:45 PM

If the FCC really cared about the consumer, they would take part of the fined money and put it into a Free DTV Convertor fund for consumers. The FCC is another corrupt organization out to get money for itself. I won't even discuss the $9 billion they just got from Verizon for OUR airwaves. Where is my cut? I have to put up with the radiation from Verizon's new towers, not the FCC. I thought government was created by the people for the people, not to rip us off. Sorry got to go now, I'm going to miss my bus. I cannot afford gas anymore at $4.10 a gallon.

Score: 0

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