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Before the
Federal Communications Commission
Washington, D.C. 20554
)
)
In the Matter of ) File Number EB-07-RK-004
RadioShack Corporation ) NAL/Acct. No. 200732460001
Fort Worth, TX ) FRN # 0006632632
)
)
NOTICE OF APPARENT LIABILITY FOR FORFEITURE
Adopted: October 15, 2007 Released: October 15, 2007
By the Chief, Enforcement Bureau:
I. INTRODUCTION
1. In this Notice of Apparent Liability for Forfeiture ("NAL"), we find
that RadioShack Corporation ("RadioShack") 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 RadioShack is apparently liable for a
forfeiture in the amount of sixteen thousand dollars ($16,000).
II. BACKGROUND
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:
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.
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 May 31, 2007, the Enforcement Bureau issued a Citation to
RadioShack for offering for sale television receiving equipment
having an analog-only tuner without displaying the required
Consumer Alert in close proximity. Between June 1 and June 11,
2007, the Enforcement Bureau conducted inspections at numerous
stores and, based on those inspections, issued additional
Citations to RadioShack for violations at its stores and its
website. After affording RadioShack a reasonable opportunity to
respond to the first Citation, agents from the Enforcement Bureau
began inspecting numerous additional RadioShack stores on June
12, 2007 in various states and once again observed television
receiving equipment with analog-only tuners on display without
the required Consumer Alert labels in two RadioShack stores.
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 RadioShack is apparently liable
for forfeiture for its apparent willful and repeated violations
of Section 15.117(k) of the Commission's rules.
III. DISCUSSION
7. Based on the evidence before us, we find that RadioShack
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 B, agents from the
Enforcement Bureau observed one model of television receiving
equipment having only an analog-only tuner on display in two
RadioShack stores without the required Consumer Alert labels.
RadioShack previously received 20 Citations for this same type of
conduct prior to the agents' inspections.
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's Forfeiture Policy Statement and Section 1.80 of
the Rules do not establish a specific base forfeiture for
violation of the analog-only tuner labeling requirements. In
adopting the Consumer Alert labeling requirements, the Commission
stated that "[a]ccurate communication of this impending change 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. Similar issues arose regarding labeling requirements for wireless
hearing aid-compatible handsets. In those cases, the Enforcement
Bureau established a base forfeiture amount of $8,000 per handset
model that failed to comply with the labeling requirements. The
labeling requirements for wireless hearing aid-compatible
handsets and the analog-only tuner labeling requirements both
serve the important goal of ensuring that consumers have access
to necessary information. In light of the similarities in these
labeling requirements, we conclude that a $8,000 base forfeiture
amount per unlabeled model or device in each store where Bureau
agents and investigators observed a violation is appropriate for
apparent violations of Section 15.117(k).
11. We find that, on June 12, 2007, even after receiving the
Citations warning of violations in its stores across the country,
RadioShack displayed one model of equipment with an analog-only
tuner in two different stores without the required Consumer Alert
label. As a result, RadioShack 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 the
Commission's rule was intended to prevent. Applying the analysis
set forth above to the facts of this case, we conclude that
RadioShack is apparently liable for a ($16,000) base
forfeiture.
IV. ORDERING CLAUSES
12. 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, RadioShack Corporation 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.
13. 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, RadioShack
Corporation SHALL PAY the full amount of the proposed forfeiture
or SHALL FILE a written statement seeking reduction or
cancellation of the proposed forfeiture.
14. 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/Acct. No. and FRN
No. referenced above. Payment by check or money order may be
mailed to Federal Communications Commission, P.O.
Box 358340, Pittsburgh, PA 15251-8340. Payment by overnight mail
may be sent to Mellon Bank /LB 358340, 500 Ross Street, Room
1540670, Pittsburgh, PA 15251. Payment by wire transfer may be
made to ABA Number 043000261, receiving bank Mellon Bank, and
account number 911-6106.
15. The response, if any, must be mailed to Federal Communications
Commission, Enforcement Bureau, and must include the NAL/Acct.
No. referenced in the caption.
16. 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 ("GAAP"); 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.
17. Requests for payment of the full amount of this Notice of
Apparent Liability for Forfeiture under an installment plan
should be sent to: Associate Managing Director, Financial
Operations, 445 12th Street, S.W., Room 1A625, Washington, D.C.
20554.
18. IT IS FURTHER ORDERED that a copy of this Notice of Apparent
Liability for Forfeiture shall be sent by Certified Mail, Return
Receipt Requested, and regular mail, to RadioShack Corporation at
its address of record and Joe D. Edge, Drinker, Biddle & Reath
LLP, 1500 K Street NW, Suite 1100, Washington, DC 20005-1209.
FEDERAL COMMUNICATIONS COMMISSION
Kris Anne Monteith
Chief, Enforcement Bureau
Attachment A
Store #-
Citation No. Release Date
Location
Store # 01-3142, San Diego, CA C20073294005 5/31/07
Store # 01-8954, San Juan, PR C200732680001 5/31/07
Store # 01-2942, Chesapeake, VA C20073264001 6/1/07
Store # 01-8787, Lilburn, GA C20073248090 6/1/07
Store # 01-8165, Plano, TX C2007325002 6/1/07
Store # 01-8033, Houston, TX C20073254004 6/1/07
Store # 01-3867, Pleasanton, CA C20073296006 6/1/07
Store # 01-3591, Lakewood, CA C20073290020 6/1/07
Store # 01-6358, Center Line, MI C20073236002 6/1/07
Store # 01-9553, Hatillo, PR C200732680002 6/4/07
Store # 01-2101, Philadelphia, PA C20073240007 6/4/07
Store # 01-8551, Blue Springs, MO C20073256006 6/6/07
Store # 01-2631, New Hyde Park, NY C20073238015 6/6/07
Store # 01-2865, New Hyde Park, NY C20073238016 6/6/07
Store #01-3505, Santa Monica, CA C20073290025 6/7/07
Store # 01-3037, Venice, CA C20073290026 6/7/07
Store # 01-2216, Burlington, NJ C20073240015 6/8/07
Store # 01-3399, Tukwila, WA C20073298016 6/8/07
Store # 01-3562, Kapolei, HI C20073286006 6/11/07
Internet EB-07-SE-177 6/6/07
Attachment B
1. 6/12/07, RadioShack Store #01-9879, Citrus Park Town Center, Tampa,
FL.
Manufacturer Device Model # Forfeiture Amount
Sylvania 5" Portable TV SRT069 $8,000
w/AM/FM Radio
Subtotal $8,000
2. 6/12/07, RadioShack Store #01-8712, Birmingham, AL
Manufacturer Device Model # Forfeiture Amount
Sylvania 5" Portable TV SRT069 $8,000
w/AM/FM Radio
Subtotal $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).
Id.
Second Periodic Review of the Commission's Rules and Policies
Affecting the Conversion To Digital Television, Second Report and
Order, FCC 07-69, 2007 WL 1299109 ") at P: 1 (rel. May 3, 2007)
("Second DTV Periodic Report and Order.
Id. at P: 10.
Second DTV Periodic Report and Order at 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 at n.29.
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).
Id.
47 C.F.R. S: 15.117(k)(2).
RadioShack Corporation, Citation No. C20073294005, (Enf. Bur. San
Diego Office, rel. May 31, 2007).
See Attachment A for a list of the citations issued to RadioShack
(collectively "Citations"). In preparing the Citations, Enforcement
Bureau staff relied on publicly available information, including
retailer websites, to identify the television receiving equipment with
analog-only tuners.
On June 8, 2007, RadioShack responded to the first Citation. See
Letter from Joe D. Edge, counsel for RadioShack, Drinker, Biddle &
Reath to William Zears, District Director, San Diego Office,
Enforcement Bureau, dated June 8, 2007. RadioShack subsequently filed
responses to the other Citations. See Letter from Joe D. Edge, counsel
for RadioShack, Drinker, Biddle & Reath to William Davenport, Legal
Advisor, Enforcement Bureau, dated June 8, 2007; Letter from Joe D.
Edge, counsel for RadioShack, Drinker, Biddle & Reath to Thomas Van
Stavern, District Director, San Francisco Office, Enforcement Bureau,
dated June 8, 2007; Letter from Joe D. Edge, counsel for RadioShack,
Drinker, Biddle & Reath to Joseph Husnay, Resident Agent, Norfolk
Office, Enforcement Bureau, dated June 8, 2007; Letter from Joe D.
Edge, counsel for RadioShack, Drinker, Biddle & Reath to Douglas
Miller, District Director, Atlanta Office, Enforcement Bureau, dated
June 8, 2007; Letter from Joe D. Edge, counsel for RadioShack,
Drinker, Biddle & Reath to James Wells, District Director, Dallas
Office, Enforcement Bureau, dated June 8, 2007; Letter from Joe D.
Edge, counsel for RadioShack, Drinker, Biddle & Reath to Stephen Lee,
Resident Agent, Houston Office, Enforcement Bureau, dated June 8,
2007; Letter from Joe D. Edge, counsel for RadioShack, Drinker, Biddle
& Reath to Catherine Deaton, District Director, Los Angeles Office,
Enforcement Bureau, dated June 8, 2007; Letter from Joe D. Edge,
counsel for RadioShack, Drinker, Biddle & Reath to James Bridgewater,
District Director, Detroit Office, Enforcement Bureau, dated June 8,
2007; Letter from Joe D. Edge, counsel for RadioShack, Drinker, Biddle
& Reath to Reuben Jusino, Resident Agent, San Juan Office, Enforcement
Bureau, dated June 8, 2007; Letter from Joe D. Edge, counsel for
RadioShack, Drinker, Biddle & Reath to Kathryn Berthot, Chief,
Spectrum Enforcement Division, Enforcement Bureau, dated June 8, 2007;
Letter from Joe D. Edge, counsel for RadioShack, Drinker, Biddle &
Reath to Daniel Noel, District Director, New York Office, Enforcement
Bureau, dated June 15, 2007; Letter from Joe D. Edge, counsel for
RadioShack, Drinker, Biddle & Reath to Daniel Noel, District Director,
New York Office, Enforcement Bureau, dated June 15, 2007; Letter from
Joe D. Edge, counsel for RadioShack, Drinker, Biddle & Reath to
Catherine Deaton, District Director, Los Angeles Office, Enforcement
Bureau, dated June 15, 2007; Letter from Joe D. Edge, counsel for
RadioShack, Drinker, Biddle & Reath to Kristine McGowan, District
Director, Seattle Office, Enforcement Bureau, dated June 15, 2007;
Letter from Joe D. Edge, counsel for RadioShack, Drinker, Biddle &
Reath to Catherine Deaton, District Director, Los Angeles Office,
Enforcement Bureau, dated June 15, 2007; Letter from Joe D. Edge,
counsel for RadioShack, Drinker, Biddle & Reath to Robert McKinney,
District Director, Kansas City Office, Enforcement Bureau, dated June
15, 2007; Letter from Joe D. Edge, counsel for RadioShack, Drinker,
Biddle & Reath to Gene Stanbro, District Director, Philadelphia
Office, Enforcement Bureau, dated June 15, 2007; Letter from Joe D.
Edge, counsel for RadioShack, Drinker, Biddle & Reath to John Raymond,
Resident Agent, Honolulu Office, Enforcement Bureau, dated June 20,
2007.
See Attachment B for a listing of the stores visited and the models
observed at each 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 RadioShack'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., Application for Review of Southern California Broadcasting
Co., Memorandum Opinion and Order, 6 FCC Rcd 4387, 4388 (1991)
("Southern California Broadcasting Co.").
See, e.g., Callais Cablevision, Inc., Grand Isle, Louisiana, Notice of
Apparent Liability for Monetary 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 B lists the date(s) of the Enforcement Bureau inspections,
the analog-only models identified in violation of Section 15.117(k),
as well as the RadioShack store(s) involved.
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 violations discussed in this NAL are subject to
forfeiture because we have issued the Citations and afforded
RadioShack an opportunity for a personal interview or to submit a
written response. See Attachment A. To the extent that the television
receiving models involved in this NAL differ from those listed in the
Citations, no additional citations are necessary because the more
recent apparent violations are "conduct of the type described" in the
earlier Citations - 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). In any event, the requirements of Section 503(b)(5) do not
apply to RadioShack, which is a Commission licensee and therefore
subject to forfeiture under Section 503(b)(2) of the Act without first
receiving notice via a citation. See, e.g., Call Sign KVG597, Call
Sign WNRR545, Call Sign WQCH950.
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
$11,000/$97,500).
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
Forfeitures.
See The Commission's Forfeiture Policy Statement and Amendment of
Section 1.80 of the Rules to Incorporate the Forfeiture Guidelines,
Report and Order, 12 FCC Rcd 17087, 17115 (1997), recon. denied, 15
FCC Rcd 303 (1999) ("Forfeiture Policy Statement").
Second DTV Periodic Report and Order at P: 12.
Id. See also 47 C.F.R. S:S: 11.1-11.61, 79.2.
See Pine Telephone Inc., Notice of Apparent Liability, DA 07-2118
(Spectrum Enf. Div. rel. May 22, 2007); IT&E Overseas, Inc., Notice of
Apparent Liability, DA 07-1867 (Spectrum Enf. Div. rel. April 25,
2007).
We caution RadioShack and other retailers that future cases involving
repeat offenders may result in the imposition of forfeitures on a
continuing violation basis.
"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 at P: 12.
See Attachment B regarding the calculation of the total proposed
forfeiture amounts.
47 U.S.C. S: 503(b), 47 C.F.R. S:S: 1.80, 15.117(k).
See 47 C.F.R. S: 1.1914.
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Federal Communications Commission DA 07-4270
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Federal Communications Commission DA 07-4270