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Before the
Federal Communications Commission
Washington, D.C. 20554
)
)
In the Matter of File No. EB-07-RK-005
)
Variety Wholesalers, Inc. Acct. No. 0832460004
)
Henderson, NC FRN 0005489679
)
)
ORDER
Adopted: June 10, 2008 Released: June 12, 2008
By the Enforcement Bureau:
1. In this Order, we adopt the attached Consent Decree entered into
between the Enforcement Bureau ("Bureau") and Variety Wholesalers,
Inc. ("Variety"). The Consent Decree terminates an investigation by
the Bureau against Variety for possible violations of Section
15.117(k) of the Commission's Rules regarding the labeling of
television receiving equipment that contains an analog broadcast
television tuner but does not contain a digital broadcast television
tuner.
2. The Bureau and Variety have negotiated the terms of the Consent Decree
that resolve this matter. A copy of the Consent Decree is attached
hereto and incorporated by reference.
3. After reviewing the terms of the Consent Decree and evaluating the
facts before us, we find that the public interest would be served by
adopting the Consent Decree and terminating the investigation.
4. In the absence of material new evidence relating to this matter, we
conclude that our investigation raises no substantial or material
questions of fact as to whether Variety possesses the basic
qualifications, including those related to character, to hold or
obtain any Commission license or authorization.
5. Accordingly, IT IS ORDERED that, pursuant to Section 4(i) of the
Communications Act of 1934, as amended, and Sections 0.111 and 0.311
of the Commission's Rules, the Consent Decree attached to this Order
IS ADOPTED.
6. IT IS FURTHER ORDERED that the above-captioned investigation IS
TERMINATED.
7. IT IS FURTHER ORDERED that Variety Wholesalers, Inc. shall make its
voluntary contribution to the United States Treasury, as specified in
the Consent Decree, by mailing a check or similar instrument payable
to the order of the Federal Communications Commission, 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). Variety shall also send
electronic notification on the date said payment is made to
SCR-Response@fcc.gov.
8. IT IS FURTHER ORDERED that Variety Wholesalers, Inc. will file reports
with the Commission ninety days after the Effective Date and on July
9, 2009. Each report shall include a compliance certificate from an
officer, as an agent of Variety, stating that the officer has personal
knowledge that Variety has established operating procedures intended
to ensure compliance with this Consent Decree, together with an
accompanying statement explaining the basis for the officer's
compliance certification. All reports shall be submitted to Kathryn S.
Berthot, Chief, Spectrum Enforcement Division, Enforcement Bureau,
Federal Communications Commission, 445 12th Street, S.W., Washington,
D.C. 20554 and by e-mail at Kathy.Berthot@fcc.gov.
9. IT IS FURTHER ORDERED that a copy of this Order and Consent Decree
shall be sent by first class mail and certified mail, return receipt
requested, to Variety Wholesalers, Inc., G. Templeton Blackburn, II,
Sr. Vice President and General Counsel, 218 S. Garnett Street, Post
Office Drawer 947, Henderson, NC 27536.
FEDERAL COMMUNICATIONS COMMISSION
Kris Anne Monteith
Chief, Enforcement Bureau
Before the
Federal Communications Commission
Washington, D.C. 20554
)
)
In the Matter of ) File No. EB-07-RK-005
Variety Wholesalers, Inc. ) Acct. No. 0832460004
Henderson, NC ) FRN 0005489679
)
)
CONSENT DECREE
The Enforcement Bureau ("Bureau") and Variety Wholesalers, Inc.
("Variety"), by their authorized representatives, hereby enter into this
Consent Decree for the purpose of terminating the Enforcement Bureau's
investigation into whether Variety violated the labeling requirements of
television receiving equipment containing an analog broadcast television
tuner but without a digital broadcast television tuner, as set forth in
Section 15.117(k) of the Commission's Rules ("Rules").
I. DEFINITIONS
1. For the purposes of this Consent Decree, the following definitions
shall apply:
a. "Act" means the Communications Act of 1934, as amended, 47 U.S.C.
S: 151 et seq.
b. "Adopting Order" means an Order of the Bureau adopting the terms of
this Consent Decree without change, addition, deletion, or
modification.
c. "Analog-only television receiving equipment" means television
receiving equipment that contains an analog broadcast television tuner
but does not contain a digital broadcast television ("DTV") tuner.
d. "Bureau" means the Enforcement Bureau of the Federal Communications
Commission.
e. "Commission" and "FCC" mean the Federal Communications Commission and
all of its bureaus and offices.
f. "Citations" means the citations issued by Bureau or the Commission
between May 29, 2007, and the Effective Date alleging violations by
Variety of Section 15.117(k) of the Commission's Rules.
g. "Effective Date" means the date on which the Commission releases the
Adopting Order.
h. "Investigation" means the investigation initiated by the Bureau
regarding Variety's compliance through the Effective Date with Section
15.117(k) of the Commission's Rules regarding the labeling of
television receiving equipment that contains an analog broadcast
television tuner but does not contain a digital broadcast television
("DTV") tuner.
i. "Parties" means Variety and the Commission.
j. "Rules" means the Commission's regulations found in Title 47 of the
Code of Federal Regulations.
k. "Variety" means Variety Wholesalers, Inc. and its
predecessors-in-interest and successors-in-interest.
II. BACKGROUND
2. To ensure that consumers do not inadvertently buy analog-only
television receiving equipment without understanding that such devices
will not be capable of receiving over-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
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.
3. 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.
4. After the rule became effective, the Bureau began inspecting
stores throughout the country, as well as popular retailer
websites, and observed many models of analog-only television
receiving equipment on display without the required Consumer
Alert labels. Beginning on or about May 29, 2007, the Bureau
conducted inspections at multiple Variety stores. Based on those
inspections, and relying on publicly available information, the
Bureau issued Citations to Variety for alleged violations of
Section 15.117(k) at its stores. After affording Variety a
reasonable opportunity to respond to the first Citation, agents
and investigators from the Enforcement Bureau inspected Variety
stores in various states and observed, in stores, what appeared
to them to be television receiving equipment with analog-only
tuners on display apparently without the required Consumer Alert
labels.
III. TERMS OF AGREEMENT
5. Adopting Order. The Parties agree that the provisions of this
Consent Decree shall be subject to final approval by the Bureau
by incorporation of such provisions by reference in the Adopting
Order without change, addition, modification, or deletion.
6. Jurisdiction. Variety agrees that the Bureau has jurisdiction
over it and the matters contained in this Consent Decree and has
the authority to enter into and adopt this Consent Decree.
7. Effective Date; Violations. The Parties agree that this Consent
Decree shall become effective on the date on which the Bureau
releases the Adopting Order. Upon release, the Adopting Order and
this Consent Decree shall have the same force and effect as any
other Order of the Bureau. Any violation of the Adopting Order or
of the terms of this Consent Decree shall constitute a separate
violation of a Bureau Order, entitling the Bureau to exercise any
rights and remedies attendant to the enforcement of a Commission
Order.
8. Termination of Investigation. In express reliance on the
covenants and representations in this Consent Decree and to avoid
further expenditure of public resources, the Bureau agrees to
terminate the Investigation. In consideration for the termination
of said Investigation, Variety agrees to the terms, conditions,
and procedures contained herein. The Bureau further agrees that
in the absence of new material evidence, the Bureau will not use
the facts developed in this Investigation through the Effective
Date of the Consent Decree, or the existence of this Consent
Decree, to institute, on its own motion, any new proceeding,
formal or informal, or take any action on its own motion against
Variety concerning the matters that were the subject of the
Investigation. The Bureau also agrees that it will not use the
facts developed in this investigation through the Effective Date
of this Consent Decree, or the existence of this Consent Decree,
to institute on its own motion any proceeding, formal or
informal, or take any action on its own motion against Variety
with respect to Variety's basic qualifications, including its
character qualifications, to hold Commission authorizations.
9. Consumer Education Regarding the DTV Transition: Variety agrees
to implement the following measures to educate the public about
the upcoming digital transition:
A. Within sixty (60) days of the Effective Date, Variety will place
an adhesive label on every box containing an analog-only
television containing the FCC approved text of the Consumer Alert
together with a statement that information on the digital
transition is available at www.dtv.gov and www.dtv2009.gov.
B. In fifty (50) percent of all print advertising featuring
televisions between the Effective Date and February 17, 2009,
Variety will include a reference to the February 17, 2009 DTV
transition end date and refer to the FCC's DTV transition website
(www.dtv.gov).
C. For Rose's stores, a tradename of stores operated by Variety,
within sixty (60) days of either the Effective Date or the date
it receives a sample video from the Bureau, whichever is later,
Variety will display a video announcement on the DTV transition
and the National Telecommunications and Infrastructure
Administration's Digital-to-Analog Converter Box Coupon Program
on a continuous loop in stores with such video capabilities. [The
Bureau shall provide 100 copies of the video to Variety for its
stores.]
D. Within sixty (60) days of either the Effective Date or the date
it receives an electronic copy of a sample tipsheet on the DTV
transition from the Bureau, whichever is later, Variety shall
print and stock such tipsheets adjacent to television displays in
stores. In the event that the Commission or its designee notifies
Variety that the tipsheet has been updated, Variety will use the
revised tipsheet within 30 days of receipt
10. Termination of Sales of Analog-Only Televisions. Variety has not
placed any orders for analog only televisions after February 5,
2008. Variety's stock of unsold analog-only televisions as of the
Effective Date is less than 5,000 units and consists solely of
refurbished televisions. Variety shall terminate all domestic
retail sales of analog-only televisions no later than December
31, 2008. Beginning August 29, 2008, and on the last business day
of each successive month, Variety shall notify Diane Law-Hsu,
Regional Counsel, South Central Region, Enforcement Bureau,
Federal Communications Commission, at SCR-Response@fcc.gov
whether Variety continues to sell analog-only televisions.
Beginning September 1, 2008, and continuing on the first business
day of each successive month, Variety shall make a voluntary
contribution to the United States Treasury in the amount of
$1,500 until Variety no longer sells analog-only televisions.
Payment shall be made as described in Paragraph 13. Variety's
audit staff will confirm compliance with this paragraph.
11. Compliance Report. Variety will file a compliance report with the
Commission within 90 days of the Effective Date and on February
17, 2009. The compliance report shall include a compliance
certificate from an officer, as an agent of Variety, stating that
the officer has personal knowledge that Variety has established
operating procedures intended to ensure compliance with this
Consent Decree, together with an accompanying statement
explaining the basis for the officer's compliance certification.
The compliance reports shall be submitted to Kathryn S. Berthot,
Chief, Spectrum Enforcement Division, Enforcement Bureau, Federal
Communications Commission, 445 12th Street, S.W., Washington,
D.C. 20554 and by e-mail at Kathy.Berthot@fcc.gov.
12. Termination Date. Unless stated otherwise, the requirements of
this Consent Decree will expire February 17, 2009.
13. Voluntary Contribution. Variety agrees that it will make a
voluntary contribution to the United States Treasury in the
amount of thirty eight thousand dollars ($38,000). This payment
will be made within thirty (30) days after the Effective Date of
the Adopting Order. Each payment 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 in the caption to the Adopting Order.
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. Payments 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). Variety shall also send electronic notification on
the date said payment is made to Diane Law-Hsu at
SCR-Response@fcc.gov.
14. Waivers. Variety waives any and all rights it may have to seek
administrative or judicial reconsideration, review, appeal or
stay, or to otherwise challenge or contest the validity of this
Consent Decree and the Adopting Order, provided the Bureau issues
the Adopting Order without change, addition, modification, or
deletion. Variety shall retain the right to challenge Commission
interpretation of the Consent Decree or any terms contained
herein. If either Party (or the United States on behalf of the
Commission) brings a judicial action to enforce the terms of the
Adopting Order, neither Variety nor the Commission shall contest
the validity of the Consent Decree or the Adopting Order, and
Variety shall waive any statutory right to a trial de novo.
Variety hereby agrees to waive any claims it may otherwise have
under the Equal Access to Justice Act, 5 U.S.C. S: 504 and 47
C.F.R. S: 1.1501 et seq., relating to the matters addressed in
this Consent Decree.
15. Severability. The Parties agree that if any of the provisions of
the Adopting Order or the Consent Decree shall be invalid or
unenforceable, such invalidity or unenforceability shall not
invalidate or render unenforceable the entire Adopting Order or
Consent Decree, but rather the entire Adopting Order or Consent
Decree shall be construed as if not containing the particular
invalid or unenforceable provision or provisions, and the rights
and obligations of the Parties shall be construed and enforced
accordingly. In the event that this Consent Decree in its
entirety is rendered invalid by any court of competent
jurisdiction, it shall become null and void and may not be used
in any manner in any legal proceeding.
16. Subsequent Rule or Order. The Parties agree that if any provision
of the Consent Decree conflicts with any subsequent rule or Order
adopted by the Commission (except an Order specifically intended
to revise the terms of this Consent Decree to which Variety does
not expressly consent) that provision will be superseded by such
Commission rule or Order.
17. Successors and Assigns. Variety agrees that the provisions of
this Consent Decree shall be binding on its successors, assigns,
and transferees.
18. Final Settlement. The Parties agree and acknowledge that this
Consent Decree shall constitute a final settlement between the
Parties. The Parties further agree that this Consent Decree does
not constitute either an adjudication on the merits or a factual
or legal finding or determination regarding any compliance or
noncompliance with the requirements of the Act or the
Commission's Rules and Orders.
19. Modifications. This Consent Decree cannot be modified without the
advance written consent of both Parties.
20. Paragraph Headings. The headings of the Paragraphs in this
Consent Decree are inserted for convenience only and are not
intended to affect the meaning or interpretation of this Consent
Decree.
21. Authorized Representative. Each party represents and warrants to
the other that it has full power and authority to enter into this
Consent Decree.
22. Counterparts. This Consent Decree may be signed in any number of
counterparts (including by facsimile), each of which, when
executed and delivered, shall be an original, and all of which
counterparts together shall constitute one and the same fully
executed instrument.
________________________________
Kris Anne Monteith
Chief
Enforcement Bureau
________________________________
Date
________________________________
Peter J. Hayes
Chief Operating Officer
Variety Wholesalers, Inc.
________________________________
Date
47 U.S.C. S: 154(i).
47 C.F.R. S:S: 0.111, 0.311.
47 C.F.R. 15.117(k).
Second Periodic Review of the Commission's Rules and Policies
Affecting the Conversion To Digital Television, Second Report and
Order, 22 FCC Rcd 8776 (2007) ("Second DTV Periodic Report and
Order").
Second Periodic Review in the Commission's Rules and Policies
Affecting the Conversion to Digital Television, 72 Fed. Reg. 28894-01
(May 23, 2007).
Federal Communications Commission DA 08-1377
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Federal Communications Commission DA 08-1377
Federal Communications Commission DA 08-1377
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Federal Communications Commission DA 08-1377
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