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Federal Communications Commission
Washington, D.C. 20554
In the Matter of File Number EB-08-SE-198
LCD Digital Electronics, Inc. NAL/Acct. No. 200832100075
Newport Beach, California FRN: 0018060095
NOTICE OF APPARENT LIABILITY FOR FORFEITURE
Adopted: August 25, 2008 Released: August 27, 2008
By the Chief, Enforcement Bureau:
1. In this Notice of Apparent Liability for Forfeiture ("NAL"), we find
that LCD Digital Electronics, Inc. ("LCD Digital") apparently
willfully and repeatedly violated Section 15.117(k) of the
Commission's Rules ("Rules") by failing to place the required Consumer
Alert label immediately adjacent to and clearly associated with
television receiving equipment that contains an analog broadcast
television tuner but does not contain a digital broadcast television
tuner (hereinafter "analog-only tuner") that it displayed or offered
for sale or rent. We conclude, pursuant to Section 503(b) of the
Communications Act of 1934, as amended ("Act"), that LCD Digital is
apparently liable for a forfeiture in the amount of sixteen thousand
2. Congress has established February 17, 2009 as the deadline for the end
of analog transmissions for full power television stations. The
Commission is statutorily obligated to promote the orderly transition
to digital television, "a critical step in the evolution of broadcast
television." As the Commission stated previously, "[w]e are committed
to ensuring the rapid completion of that transition in a way that
delivers the greatest possible benefits to the viewing public." As
part of that commitment and in light of the upcoming deadline, the
Commission recently announced that "it is necessary and appropriate to
require retailers to provide consumers with information regarding this
transition date at the point of sale." The Commission reached this
conclusion after determining that consumer electronics industry
efforts had not adequately informed consumers how analog-only
television equipment purchased now will function when the transition
to digital broadcasting ends.
3. To ensure that consumers do not inadvertently buy analog-only
television equipment without understanding that such devices will not
be capable of receiving off-the-air television reception of digital
signals after analog broadcasting ends unless connected to a
digital-to-analog converter or a digital subscription service, the
Commission adopted rules requiring anyone that sells, offers for sale,
or rents television receiving equipment that does not contain a
digital television ("DTV") tuner to display a Consumer Alert at the
point of sale. This requirement also applies to the sale or rent of
analog-only television receiving equipment via direct mail, catalog,
or electronic means (e.g., the Internet). These requirements are
contained in Section 15.117(k) of the Rules, which became effective on
May 25, 2007.
4. Section 15.117(k)(3) of the Rules requires that the Consumer Alert
contain the following language:
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.
The Consumer Alert must be in a size of type large enough to be clear,
conspicuous and readily legible, consistent with the dimensions of the
equipment and the label. The alert either must be printed on a
transparent material and affixed to the screen, in a manner that is
removable by the consumer and does not obscure the picture when
displayed for sale, or displayed separately immediately adjacent to
each television receiver offered for sale and clearly associated with
the analog-only model to which it pertains. In the case of other
analog-only video devices that do not include a display (e.g., VCRs,
DVD players), the Consumer Alert must be in a prominent location on
the device, such as on the top or front, or displayed separately
immediately adjacent to and clearly associated with the analog-only
model to which it pertains. To the extent that any persons display or
offer for sale or rent via direct mail, catalog, or electronic means
analog-only television receiving equipment, they must prominently
display the Consumer Alert as part of all advertisements or
descriptions of such television receiving equipment, in clear and
conspicuous print, and in close proximity to any images or
descriptions of such equipment.
5. Immediately after the rule became effective, the Commission's
Enforcement Bureau began inspecting hundreds of stores throughout
the country, as well as dozens of popular retailer websites, and
observed many models of analog-only television receiving
equipment on display without the required Consumer Alert labels.
On April 15, 2008, the Enforcement Bureau issued a Citation to
LCD Digital for offering for sale television receiving equipment
having an analog-only tuner without displaying the required
Consumer Alert in close proximity. After affording LCD Digital a
reasonable opportunity to respond to the Citation, an
investigator from the Enforcement Bureau visited LCD Digital's
online store on June 12, 2008, and once again observed television
receiving equipment with analog-only tuners on display without
the required Consumer Alert labels.
6. Under Section 503(b)(1) of the Act, any person who is determined
by the Commission to have willfully or repeatedly failed to
comply with any provision of the Act or any rule, regulation, or
order issued by the Commission shall be liable to the United
States for a forfeiture penalty. Section 312(f)(1) of the Act
defines willful as "the conscious and deliberate commission or
omission of [any] act, irrespective of any intent to violate" the
law. The legislative history to Section 312(f)(1) of the Act
clarifies that this definition of willful applies to both
Sections 312 and 503(b) of the Act and the Commission has so
interpreted the term in imposing forfeitures pursuant to Section
503(b). The Commission may also assess a forfeiture for
violations that are merely repeated, and not willful. "Repeated"
means that the act was committed or omitted more than once, or
lasts more than one day. To impose such a forfeiture penalty, the
Commission must issue a notice of apparent liability and the
person against whom the notice has been issued must have an
opportunity to show, in writing, why no such forfeiture penalty
should be imposed. The Commission will then issue a forfeiture if
it finds by a preponderance of the evidence that the person has
violated the Act or a Commission rule. As we set forth below, we
conclude under this standard that LCD Digital is apparently
liable for forfeiture for its apparent willful and repeated
violations of Section 15.117(k) of the Commission's rules.
7. Based on the evidence before us, we find that LCD Digital
apparently willfully and repeatedly violated Section 15.117(k) of
the Rules by failing to display conspicuously and in close
proximity to equipment with an analog-only tuner, in clear and
conspicuous print, the required Consumer Alert label.
Specifically, as detailed in Attachment A, an investigator from
the Enforcement Bureau observed two models of television
receiving equipment having only an analog-only tuner on display
in LCD Digital online store without the required Consumer Alert
labels. LCD Digital previously received one Citation for this
same type of conduct prior to the investigator's observation.
8. Under Section 503(b)(2)(D) of the Act, we may assess an entity
that is neither a common carrier, broadcast licensee or cable
operator a forfeiture of up to $11,000 for each violation or each
day of a continuing violation, up to a statutory maximum
forfeiture of $97,500 for any single continuing violation. In
exercising such authority, we must take into account "the nature,
circumstances, extent, and gravity of the violation and, with
respect to the violator, the degree of culpability, any history
of prior offenses, ability to pay, and such other matters as
justice may require."
9. The Commission has established $8,000 as the base forfeiture for
each unlabeled model in each store in violation of the
analog-only tuner labeling requirements. The Commission found
that accurate disclosure of a device's analog-only capabilities
is "a highly material disclosure for consumers contemplating the
purchase of a television." The Commission also noted that it is
"a matter of public safety for consumers who rely on analog-only
televisions to obtain critical emergency information."
10. We find that, on June 12, 2008, as detailed in Attachment A, even
after receiving a Citation warning of violations in its online
store, LCD Digital displayed two models of equipment with an
analog-only tuner without the required Consumer Alert label. As a
result, LCD Digital continued to market television receiving
equipment to consumers without adequately warning that the
equipment contained an analog-only television receiver. Those
consumers may not learn of their equipment's limitations until
the analog-only devices cease to receive over-the-air television
signals, long after any period for returning the equipment has
expired. This scenario is precisely the outcome that our rule was
intended to prevent. In light of recent decisions and applying
the analysis set forth above to the facts of this case, we
conclude that LCD Digital is apparently liable for a base
forfeiture of $16,000 for failing to fully comply with the
Consumer Alert labeling requirements in Section 15.117(k) of the
IV. ORDERING CLAUSES
11. Accordingly, IT IS ORDERED that, pursuant to Section 503(b) of
the Communications Act of 1934, as amended, and Section 1.80 of
the Commission's Rules, LCD Digital Electronics, Inc. is hereby
NOTIFIED of this APPARENT LIABILITY FOR A FORFEITURE in the
amount of sixteen thousand dollars ($16,000) for violations of
Section 15.117(k) of the Rules.
12. IT IS FURTHER ORDERED that, pursuant to Section 1.80 of the
Commission's Rules within thirty days of the release date of this
Notice of Apparent Liability for Forfeiture, LCD Digital
Electronics, Inc. SHALL PAY the full amount of the proposed
forfeiture or SHALL FILE a written statement seeking reduction or
cancellation of the proposed forfeiture.
13. Payment of the forfeiture must be made by check or similar
instrument, payable to the order of the Federal Communications
Commission. The payment must include the NAL/Account Number and
FRN Number referenced above. Payment by check or money order may
be mailed to Federal Communications Commission, P.O. Box 979088,
St. Louis, MO 63197-9000. Payment by overnight mail may be sent
to U.S. Bank - Government Lockbox #979088, SL-MO-C2-GL, 1005
Convention Plaza, St. Louis, MO 63101. Payment by wire transfer
may be made to ABA Number 021030004, receiving bank TREAS/NYC,
and account number 27000001. For payment by credit card, an FCC
Form 159 (Remittance Advice) must be submitted. When completing
the FCC Form 159, enter the NAL/Account number in block number
23A (call sign/other ID), and enter the letters "FORF" in block
number 24A (payment type code). Requests for full payment under
an installment plan should be sent to: Chief Financial Officer --
Financial Operations, 445 12th Street, S.W., Room 1-A625,
Washington, D.C. 20554. Please contact the Financial Operations
Group Help Desk at 1-877-480-3201 or Email: ARINQUIRIES@fcc.gov
with any questions regarding payment procedures. LCD Digital
Electronics, Inc. will also send electronic notification on the
date said payment is made to Celia Lewis at firstname.lastname@example.org
and Ricardo Durham at email@example.com.
14. The response, if any, must be mailed to the Office of the
Secretary, Federal Communications Commission, 445 12th Street,
S.W., Washington, D.C. 20554, ATTN: Enforcement Bureau - Spectrum
Enforcement Division, and must include the NAL/Acct. No.
referenced in the caption.
15. The Commission will not consider reducing or canceling a
forfeiture in response to a claim of inability to pay unless the
petitioner submits: (1) federal tax returns for the most recent
three-year period; (2) financial statements prepared according to
generally accepted accounting practices; or (3) some other
reliable and objective documentation that accurately reflects the
petitioner's current financial status. Any claim of inability to
pay must specifically identify the basis for the claim by
reference to the financial documentation submitted.
16. IT IS FURTHER ORDERED that a copy of this Notice of Apparent
Liability for Forfeiture shall be sent by first class mail and
certified mail return receipt requested to Peter Mamakos,
President, LCD Digital Electronics, Inc., 4540 Campus Drive,
Newport Beach, California 92660.
FEDERAL COMMUNICATIONS COMMISSION
Kris Anne Monteith
Chief, Enforcement Bureau
Proposed Forfeiture Amount
1. June 12, 2008, LCD Digital Electronics, Inc.,
Manufacturer/Brand Device Model # Forfeiture
LCDDIGITAL 7" LCD LCD7G $8,000
LCDDIGITAL Portable TV LCD7L $8,000
Total Proposed Forfeiture: $16,000
47 C.F.R. S: 15.117(k).
47 U.S.C. S: 503(b).
2002 Biennial Regulatory Review, Report and Order and Notice of
Proposed Rulemaking, 18 FCC Rcd 13620, 13825 P: 532 (2003).
Second Periodic Review of the Commission's Rules and Policies
Affecting the Conversion To Digital Television, Second Report and
Order, 22 FCC Rcd 8776 P: 1 (2007) ("Second DTV Periodic Report and
Id. at 8781-2, P: 10.
Id. at 8783, P: 14. See 47 C.F.R. S: 15.117(k). In the Second DTV
Periodic Report and Order, the Commission defined "point of sale" as
the "place where televisions are displayed for consumers prior to
purchase." See Second DTV Periodic Report and Order, 22 FCC Rcd at
Second Periodic Review in the Commission's Rules and Policies
Affecting the Conversion to Digital Television, 72 Fed. Reg. 28894-01
(May 23, 2007).
47 C.F.R. S: 15.117(k)(1).
47 C.F.R. S: 15.117(k)(2).
LCD Digital Electronics, Inc., Citation, 23 FCC Rcd 6445 (Enf. Bur.,
Spectrum Enf. Div. 2008).
On May 5, 2008, LCD Digital responded to the Citation. See Letter from
Peter Mamakos, President, LCD Digital Electronics, Inc. to Kathryn S.
Berthot, Chief, Spectrum Enforcement Division, Enforcement Bureau,
Federal Communications Commission (May 5, 2008).
See Attachment A for a listing of the models observed in the online
store. Enforcement Bureau staff determined that these models had
analog-only tuners by consulting the manufacturer's product manuals
or, if such were unavailable, the models' technical specifications
from LCD Digital's website.
47 U.S.C. S: 503(b)(1)(B); 47 C.F.R. S: 1.80(a)(2).
47 U.S.C. S: 312(f)(1).
H.R. Rep. No. 97-765, 97th Cong. 2d Sess. 51 (1982).
See, e.g., Southern California Broadcasting Co., Memorandum Opinion
and Order, 6 FCC Rcd 4387, 4388 (1991) ("Southern California
See, e.g., Callais Cablevision, Inc., Grand Isle, Louisiana, Notice of
Apparent Liability for Forfeiture, 16 FCC Rcd 1359, 1362, P: 10 (2001)
("Callais Cablevision") (issuing a Notice of Apparent Liability for,
inter alia, a cable television operator's repeated signal leakage).
Southern California Broadcasting Co., 6 FCC Rcd at 4388, P: 5; Callais
Cablevision, Inc., 16 FCC Rcd at 1362, P: 9.
47 U.S.C. S: 503(b); 47 C.F.R. S: 1.80(f).
See, e.g., SBC Communications, Inc., Forfeiture Order, 17 FCC Rcd
7589, 7591, P: 4 (2002) (forfeiture paid).
Attachment A lists the date of the Enforcement Bureau observation and
the analog-only models identified in violation of Section 15.117(k).
These two models are two of the twelve models listed in the Citation
issued to LCD Digital on April 15, 2008.
Section 503(b)(5) states that no forfeiture liability shall be
determined against any person who does not hold a license, permit,
certificate, or other authorization issued by the Commission unless,
prior to issuance of any Notice of Apparent Liability, such person is
"(A) sent a citation of the violation charged; (B) is given a
reasonable opportunity for a personal interview with an official of
the Commission at the field office of the Commission which is nearest
to such person's place of residence; and (C) subsequently engages in
conduct of the type described in such citation." 47 U.S.C. S:
503(b)(5). The apparent violations discussed in this NAL are subject
to forfeiture because we afforded LCD Digital a reasonable opportunity
for a personal interview or to submit a written response to the
Citation before conducting a second round of inspections that would
count towards potential forfeiture liability. See supra para. 5 and
notes 12, 13. To the extent that the television receiving models
involved in this NAL differ from those listed in the Citation, no
additional citations are necessary because the more recent apparent
violations are "conduct of the type described" in the earlier Citation
- violations of Section 15.117(k). See HighTech CB Shop, Forfeiture
Order, 20 FCC Rcd 12514, 12516 P: 9 (Enf. Bur. South Central Region
2005), recon. denied, 20 FCC Rcd 19269 (Enf. Bur. 2005).
47 U.S.C. S: 503(b)(2)(D). The Commission twice amended Section
1.80(b)(3) of the Rules, 47 C.F.R. S: 1.80(b)(3), to increase the
maximum forfeiture amounts, in accordance with the inflation
adjustment requirements contained in the Debt Collection Improvement
Act of 1996, 28 U.S.C. S: 2461. See Amendment of Section 1.80 of the
Commission's Rules and Adjustment of Forfeiture Maxima to Reflect
Inflation, Order, 15 FCC Rcd 18221 (2000) (adjusting the maximum
statutory amounts from $10,000/$75,000 to $11,000/$87,500); Amendment
of Section 1.80 of the Commission's Rules and Adjustment of Forfeiture
Maxima to Reflect Inflation, Order, 19 FCC Rcd 10945 (2004) (adjusting
the maximum statutory amounts from $11,000/$87,500 to
47 U.S.C. S: 503(b)(2)(E). See also 47 C.F.R. S: 1.80(b)(4), Note to
paragraph (b)(4): Section II. Adjustment Criteria for Section 503
See, e.g., Sears Roebuck and Co. Kmart Corporation, Notice of Apparent
Liability for Forfeiture, 23 FCC Rcd. 6293, 6297-6298 P: 10 (2008)
("Sears"). The Commission adopted the base forfeiture used by the
Bureau in earlier Notices of Apparent Liability for Forfeiture. See,
e.g., Boscov's Inc., Notice of Apparent Liability for Forfeiture, 22
FCC Rcd 18449, 18453 P: 10 (Enf. Bur. 2007).
See e.g., Sears, 23 FCC Rcd at 6297-6298 P: 9.
"After the transition, absent a label requirement, even cable and
satellite subscribers might be surprised to find that they cannot
receive television broadcasts over-the-air on an analog-only
television purchased today if they choose to discontinue subscription
service or their cable or satellite service is terminated by disaster,
service disruption, or for non-payment of their bills." Second DTV
Periodic Report and Order, 22 FCC Rcd at 8782, P: 12.
See Value City Department Stores, Inc., Notice of Apparent Liability
for Forfeiture, 23 FCC Rcd 7966 (2008) (proposing a forfeiture of
$216,000--$8,000 for each device--for marketing numerous unlabeled
analog-only television receivers); See also Boscov's Inc., 22 FCC
Rcd at 18453 P: 10; Gregg Appliances, Inc. d/b/a HHGregg, Notice of
Apparent Liability for Forfeiture, 22 FCC Rcd 18467 (Enf. Bur. 2007).
See also Attachment A regarding the calculation of the total proposed
47 U.S.C. S: 503(b), 47 C.F.R. S:S: 1.80, 15.117(k).
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Federal Communications Commission DA 08-1961
Federal Communications Commission DA 08-1961