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Before the
Federal Communications Commission
Washington, D.C. 20554
)
In the Matter of ) File No. EB-07-SE-263
LG Electronics Inc. and ) Acct. No. 200832100029
LG Electronics USA, Inc. ) FRN No. 0016896193
)
ORDER
Adopted: April 9, 2008 Released: April 11, 2008
By the Chief, Enforcement Bureau:
1. In this Order, we adopt the attached Consent Decree entered into
between the Enforcement Bureau ("Bureau") and LG Electronics Inc. and
LG Electronics, USA (collectively, "LGE"). The Consent Decree
terminates an investigation by the Bureau against LGE for possible
violations of Section 330(c) of the Communications Act of 1934, as
amended ("Act"), and Section 15.120(d)(2) of the Commission's Rules
("Rules"), regarding the interstate shipment, after March 15, 2006, of
digital television receivers that do not comply with the V-Chip
technology requirements because they lack the ability to adapt to new
rating systems.
2. The Bureau and LGE 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 LGE 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 Act,
and sections 0.111 and 0.311 of the 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 all third-party complaints against LGE
before the Bureau related to the above-captioned-investigation as of
the date of this Consent Decree ARE DISMISSED.
8. IT IS FURTHER ORDERED that LGE shall make its voluntary contribution
to the United States Treasury, as specified in the Consent Decree, by
credit card through the Commission's Revenue and Receivables
Operations Group at (202) 418-1995, or 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
Account number in block number 23A (call sign/other ID), and enter the
letters "FORF" in block number 24A (payment type code).
9. IT IS FURTHER ORDERED that LGE will file reports with the Commission
ninety days after the Effective Date, twelve months after the
Effective Date, and two years after the Effective Date. Each report
shall include a compliance certificate from an officer, as an agent of
LGE, stating that the officer has personal knowledge that LGE 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 the Chief, Spectrum Enforcement
Division, Enforcement Bureau, Federal Communications Commission, 445
12th Street, S.W., Washington, D.C. 20554.
10. 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 LGE's counsel, David Hilliard, Esq. and Robert L.
Pettit, Esq., Wiley Rein LLP, 1776 K Street, NW, Washington, DC 20006.
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-SE-263
LG Electronics Inc. and ) Acct. No. 200832100029
LG Electronics USA, Inc. ) FRN No. 0016896193
)
CONSENT DECREE
The Enforcement Bureau ("Bureau") and LG Electronics Inc. and LG
Electronics USA, Inc. (collectively, "LGE" or the "Company") by their
authorized representatives, hereby enter into this Consent Decree for the
purpose of terminating the Bureau's investigation into whether LGE
violated Section 330(c) of the Communications Act of 1934, as amended
("Act"), and Section 15.120(d)(2) of the Commission's Rules ("Rules"),
regarding the interstate shipment, after March 15, 2006, of digital
television receivers that do not comply with the V-Chip technology
requirements because they lack the ability to adapt to new rating systems.
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 U.S.C. S:S: 151
et seq.
b. "Bureau" means the Enforcement Bureau of the Federal Communications
Commission.
c. "Commission" and "FCC" mean the Federal Communications Commission and
all of its bureaus and offices.
d. "Complaints" means third-party complaints that may have been received
by, or are in the possession of, the Commission or Bureau alleging
violations of the V-Chip technology requirements.
e. "Compliance Plan" means the program described in this Consent Decree
at paragraph 8.
f. "Digital Television Receivers" or "DTV Receivers" means (i) digital
television broadcast receivers with display screens in the 4:3 aspect
ratio measuring 13 inches or larger diagonally, (ii) digital
television broadcast receivers with display screens in the 16:9 aspect
ratio measuring 7.8 inches or larger vertically, and (iii) devices
with digital television broadcast tuners sold without an accompanying
display device, such as DVR recorders.
g. "Effective Date" means the date on which the Commission releases the
Adopting Order.
h. "Investigation" means the investigation commenced by the Bureau's
August 13, 2007 Letter of Inquiry regarding whether LGE violated
section 330(c) of the Act, and section 15.120(d)(2) of the Rules, by
shipping interstate digital television receivers that do not comply
with the V-Chip technology requirements because they lack the ability
to adapt to new rating systems.
i. "Order" or "Adopting Order" means an Order of the Bureau adopting the
terms of this Consent Decree without change, addition, deletion, or
modification.
j. "Parties" means LGE and the Bureau.
k. "LGE" means LG Electronics Inc. and LG Electronics USA, Inc.
l. "Rules" means the Commission's regulations found in Title 47 of the
Code of Federal Regulations.
II. BACKGROUND
2. Section 303(x) of the Act directs the Commission to prescribe rules
that require television receivers with picture screens 13 inches or
greater shipped in interstate commerce or manufactured in the United
States to be equipped with a feature designed to enable viewers to block
the display of all programs with a common rating. Section 330(c) of the
Act provides that no person shall ship in interstate commerce or
manufacture in the United States television receivers that do not comply
with rules prescribed by the Commission pursuant to Section 303(x). The
Commission adopted program blocking capability requirements for both
analog and digital television ("DTV") receivers in 1998. In 2004, the
Commission adopted specific technical standards to implement V-Chip
functionality for DTV receivers ("V-Chip technology requirements"). The
DTV V-Chip technology requirements provide that, effective March 15, 2006,
digital television receivers with picture screens 13 inches or greater
that are shipped in interstate commerce must be equipped with V-Chip
technology to allow blocking of the display of programming based on its
content and be able to respond to changes in the content advisory rating
system.
3. On August13, 2007, the Bureau issued a letter of inquiry (LOI) to LGE.
The August 13, 2007 LOI directed LGE, among other things, to submit a
sworn written response to a series of questions relating to its compliance
with the DTV V-Chip technology requirements. LGE responded to the August
13, 2007 LOI on September 28, 2007. In its response, LGE also voluntarily
disclosed DTV V-Chip compliance issues with respect to certain of its DVD
recorders. LGE submitted a follow-up response to the LOI on December 14,
2007.
III. TERMS OF AGREEMENT
4. 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.
5. Jurisdiction. LGE 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.
6. 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 final 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.
7. 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 and
dismiss the Complaints. In consideration for termination by the Bureau of
the Investigation and dismissal of the Complaints in accordance with the
terms of this Consent Decree, LGE 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 LGE 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 LGE with respect to LGE's basic qualifications, including
its character qualifications, to hold Commission authorizations.
8. Compliance Plan. For purposes of settling the matters set forth herein,
LGE agrees to maintain a Compliance Plan related to future compliance with
the Act, the Commission's Rules, and the Commission's Orders. The
Compliance Plan will include the following components.
a. Engineering Compliance Officer. LGE will hire an engineering
compliance officer ("ECO"), who will be responsible for developing,
implementing and administering the Compliance Plan and ensuring that
the Company's digital television reception devices are FCC-compliant.
The ECO will act as an internal ombudsman for any Company employees to
raise questions or concerns that arise with respect to the Company's
compliance with FCC rules and regulations.
b. FCC Compliance Consultant. LGE will retain the services of a qualified
consultant ("FCC Consultant") knowledgeable of the FCC's rules and
requirements applicable to digital television reception devices. The
FCC Consultant will be responsible for assisting the ECO in the
development and implementation of the Compliance Plan.
c. Compliance Manual. LGE will create, maintain and update an FCC
compliance manual - a copy of which will be available to all personnel
involved in the design and manufacture of digital television reception
devices as well as personnel responsible for overseeing the Company's
digital television products. The compliance manual will, among other
things, describe the Commission's rules and requirements applicable to
the design, manufacture, distribution, marketing and sale of digital
television reception devices. The compliance manual will encourage
personnel to contact the ECO or the FCC Consultant with any questions
or concerns that arise with respect to the Company's FCC compliance.
d. Compliance Training Program. LGE will establish an FCC compliance
training program for any employee who engages in activities related to
the design and manufacture of digital television reception devices.
Training sessions will be conducted at least annually for such
employees to ensure compliance with the Act and the FCC's regulations
and policies and, for new employees who are engaged in such
activities, within the first ninety (90) days of employment.
e. Review and Monitoring. LGE will review the Compliance Plan annually to
ensure that it is maintained in a proper manner and continues to
address the objectives set forth herein.
f. Receiver Upgrades. The Company has placed notices on its website
(us.lge.com) advising consumers of the availability of free software
upgrades to the program blocking functionality of certain models of
the Company's DTV Receivers. The Company will also mail or e-mail
notices to those consumers in the Company's database who have provided
warranty registrations for the upgradeable models to advise them of
the availability of the software upgrade. The Company will continue to
offer the software upgrades via its website for five years from the
Effective Date. For those consumers who cannot download the software
upgrade via the Company's website, the Company will provide a means
for such consumers to request and obtain a free CD containing the
software upgrade.
g. Compliance Reports. LGE will file compliance reports with the
Commission ninety days after the Effective Date, twelve months after
the Effective Date, and twenty-four months after the Effective Date.
Each compliance report shall include a compliance certificate from an
officer, as an agent of LGE, stating that the officer has personal
knowledge that LGE 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 compliance reports shall be submitted to
Chief, Spectrum Enforcement Division, Enforcement Bureau, Federal
Communications Commission, 445 12th Street, S.W., Washington, D.C.
20554.
h. Termination Date. Unless stated otherwise, the requirements of this
Consent Decree will expire twenty-four months after the Effective
Date.
9. Voluntary Contribution. LGE agrees that it will make a voluntary
contribution to the United States Treasury in the amount of $1,700,000.00.
The payment will be made within 30 days after the Effective Date of the
Adopting Order. The payment must be made by check or similar instrument,
payable to the order of the Federal Communications Commission. The payment
must include the 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. 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 Account number in block number 23A
(call sign/other ID), and enter the letters "FORF" in block number 24A
(payment type code).
10. Waivers. LGE 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
Order adopting this Consent Decree, provided the Bureau issues an Order
adopting the Consent Decree without change, addition, modification, or
deletion. LGE 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 LGE
nor the Commission shall contest the validity of the Consent Decree or the
Adopting Order, and LGE shall waive any statutory right to a trial de
novo. LGE 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.
11. 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.
12. Subsequent Rule or Order. The Parties agree that if any provision of
this 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 LGE does not expressly consent) that
provision will be superseded by such Commission rule or Order.
13. 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.
14. Modifications. This Consent Decree cannot be modified without the
advance written consent of both Parties.
15. 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.
16. Authorized Representative. Each party represents and warrants to the
other that it has full power and authority to enter into this Consent
Decree.
17. 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
LG Electronics Inc.
________________________________
By: Michael Ahn
President & CEO
LG Electronics North America
________________________________
Date
LG Electronics USA, Inc.
________________________________
By: Teddy Hwang
President
________________________________
Date
47 U.S.C. S: 303(c).
47 C.F.R. S: 15.120(d)(2).
47 U.S.C. S: 154(i), 503(b).
47 C.F.R. S:S: 0.111 and 0.311.
47 U.S.C. S: 303(c).
47 C.F.R. S: 15.120(d)(2).
See Letter from Kathryn S. Berthot, Chief, Spectrum Enforcement Division,
Enforcement Bureau, to Michael K. Ahn, President and CEO, LG Electronics
USA, Inc. (August 13, 2007) ("August 13, 2007 LOI").
47 U.S.C. S: 303(x).
47 U.S.C. S: 330(c).
In the Matter of Technical Requirements to Enable Blocking of Video
Programming Based on Program Rating, Implementation of Sections 551(c),
(d), and (e) of the Telecommunications Act of 1996, Report and Order, 13
FCC Rcd 11248 (1998).
In the Matter of Second Periodic Review of the Commission's Rules and
Policies Affecting the Conversion to Digital Television, Report and Order,
19 FCC Rcd 18279 (2004). The V-Chip technology requirements also apply to
devices sold without an accompanying display device. Id. at 18348.
47 C.F.R. S: 15.120(d)(2).
See August 13, 2007 LOI.
See Letter from Richard C. Wingate, Secretary and General Counsel, LG
Electronics USA, Inc., to Jacqueline Ellington, Esq., Spectrum Enforcement
Division, Enforcement Bureau (September 28, 2007) ("LOI Response").
Id. at 2.
See Letter from Richard C. Wingate, Secretary and General Counsel, LG
Electronics USA, Inc., to Jacqueline Ellington, Esq. Spectrum Enforcement
Division, Enforcement Bureau (December 14, 2007).
Federal Communications Commission DA 08-844
2
Federal Communications Commission DA 08-844