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                                   Before the

                       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:

   I. INTRODUCTION

    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
       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 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.

        III. DISCUSSION

         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
            Rules.

        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 celia.lewis@fcc.gov
            and Ricardo Durham at ricardo.durham@fcc.gov.

        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

                                  ATTACHMENT A

                           Proposed Forfeiture Amount

         1. June 12, 2008, LCD Digital Electronics, Inc.,
            www.lcddigital.tv/televisions.html


         Manufacturer/Brand   Device         Model #   Forfeiture            
                                                       Amount                

         LCDDIGITAL           7" LCD         LCD7G     $8,000                
                              Portable TV                                    

                              7" LCD                                         
         LCDDIGITAL           Portable TV    LCD7L     $8,000                
                              Compact                                        

                                                       SUBTOTAL     $16,000  


                                           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, 22 FCC Rcd 8776 P: 1 (2007) ("Second DTV Periodic Report and
       Order").

       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
       8780, 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).

       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
       Broadcasting Co.").

       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
       $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, 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.

       Id.

       "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
       forfeiture amounts.

       47 U.S.C. S: 503(b), 47 C.F.R. S:S: 1.80, 15.117(k).

       (...continued from previous page)

                                                              (continued....)

       Federal Communications Commission DA 08-1961

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       Federal Communications Commission DA 08-1961