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Before the
Federal Communications Commission
Washington, D.C. 20554
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)
)
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In the Matter of File No. EB-07-SE-334
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Proview Technology, Inc. NAL/Acct. No. 200832100034
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Proview Technology (Shenzhen), Ltd. FRN No. 0017347881
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Subsidiaries of Proview International NAL/Acct. No. 200832100035
Holdings, Ltd. )
FRN No. 0017347881
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)
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notice of apparent liability for forfeiture
Adopted: April 9, 2008 Released: April 10, 2008
By the Commission:
I. introduction
1. In this Notice of Apparent Liability for Forfeiture ("NAL"), we find
Proview Technology, Inc. ("PTI") and Proview Technology (Shenzhen),
Ltd. ("PTS") (collectively, "Proview") apparently liable for a
forfeiture in the amount of three hundred thousand dollars ($300,000)
for their willful and repeated 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"). The apparent
violations involve Proview's interstate shipment, after March 15,
2006, of digital television receivers that do not comply with the
Commission's rules requiring that such receivers have the capability
to respond to changes in the content advisory rating system.
II. background
2. Sections 303(x) and 330(c) of the Act were added by the
Telecommunications Act of 1996. Section 303(x) 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) 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.
Specifically, Section 15.120(d)(2) provides that:
Digital television receivers shall react in a similar manner as analog
televisions when programmed to block specific rating categories. Effective
March 15, 2006, digital television receivers will receive program rating
descriptors transmitted pursuant to industry standard EIA/CEA-766-A "U.S.
and Canadian Region Rating Tables (RRT) and Content Advisory Descriptors
for Transport of Content Advisory Information using ATSC A/65-A Program
and System Information Protocol (PSIP)," 2001 (incorporated by reference,
see S: 15.38). Blocking of programs shall occur when a program rating is
received that meets the pre-determined user requirements. Digital
television receivers shall be able to respond to changes in the content
advisory rating system.
To account for manufacturers' product development cycles, the Commission
allowed an 18-month transition period for implementation of the DTV V-Chip
technology requirements.
3. The V-Chip technology requirements implement Congress's determination,
in the Telecommunications Act of 1996, that parents should be provided
with "timely information about the nature of upcoming video
programming and with the technological tools that allow them easily to
block violent, sexual, or other programming that they consider harmful
to their children." This determination was based on Congress's finding
that television broadcast and cable programming have established a
"uniquely pervasive presence in the lives of American children."
Further, Congress found that empowering parents to control the
presence and influence of television in their children's lives was a
compelling government interest. Finally, Congress concluded that
requiring television receiver manufacturers to include V-Chip
technology in their products is a nonintrusive and narrowly tailored
means of achieving that compelling government interest.
4. In July 2007, the Enforcement Bureau ("Bureau") received a complaint
alleging that Proview was shipping in interstate commerce digital
television receivers that did not include the required V-Chip
technology. On September 17, 2007, the Bureau issued a letter of
inquiry ("LOI") to Proview. Proview filed a response to the LOI on
October 17, 2007. Proview updated its LOI Response on November 7,
2007. Proview requested confidentiality for both its October 17, 2007
Response and its November 7, 2007 Response and those requests remain
pending. Accordingly, Proview's October 17, 2007 Response and November
7, 2007 Response are discussed in an Appendix hereto, and we are
treating the Appendix as confidential at this time.
III. discussion
A. Proview Apparently Shipped Interstate Digital Television
Receivers In Violation of Section 330(c) of the Act and Section
15.120(d)(2) of the Rules
5. As noted above, pursuant to Section 330(c) of the Act and Section
15.120(d)(2) of our rules, manufacturers must ensure that their
digital television receivers shipped in interstate commerce are "able
to respond to changes in the content advisory rating system." Based on
our review of Proview's LOI responses, we find PTI and PTS each
apparently willfully and repeatedly shipped in interstate commerce
digital television receivers that did not comply with this
requirement. Proview does not dispute this finding.
A. Proposed Forfeiture
6. Based on the analysis set forth below, we conclude that Proview is
apparently liable for a forfeiture in the amount of $300,000 for
willfully and repeatedly shipping in interstate commerce digital
television receivers that do not comply with the DTV V-Chip technology
requirements because they lack the ability to adapt to new rating
systems in violation of Section 330(c) of the Act and Section
15.120(d)(2) of the Rules.
7. Under Section 503(b)(1)(B) 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. To impose such a forfeiture penalty, the Commission must
issue a notice of apparent liability and the person against whom such
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. We conclude
under this standard that, as explained more fully in the Appendix,
Proview is apparently liable for a forfeiture for its apparent willful
and repeated violations of Section 330(c) of the Act and Section
15.120(d)(2) of the Rules.
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
are required to 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
DTV V-Chip technology requirements. The Commission has substantial
discretion, however, in proposing forfeitures. We may apply the base
forfeiture amounts described in the Forfeiture Policy Statement and
our rules, or we may depart from them altogether as the circumstances
demand.
10. We recently issued Notices of Apparent Liability for Forfeiture
proposing forfeitures against two manufacturers for importing and
shipping interstate television receivers that did not comply with the
Commission's DTV tuner requirement, reasoning that such a failure is
more egregious, in general, than many other types of equipment
marketing cases that come before us. In those cases, we found that
applying a proposed forfeiture on a per model basis, as we have in
other more routine equipment marketing cases, would result in
forfeiture amounts that are not commensurate with the seriousness of
the violation, and thus, we proposed a forfeiture based on each
noncompliant unit shipped or imported. We proposed a similar approach
for violations of our DTV V-Chip technology requirements involving the
interstate shipment of receivers that are incapable of receiving
program rating descriptors and blocking programs from viewing when the
program rating meets pre-determined user requirements. We imposed a
lower per unit forfeiture in the Funai NAL, however, because we
recognized that television receiving devices without digital tuners,
which were at issue in the Syntax-Brillain and Regent NALs, lack the
ability to receive digital television broadcast signals altogether,
whereas devices without V-Chip functionality deprive consumers of the
important capability to block unwanted programming but may still
receive digital television signals.
11. Considering these precedents, we conclude that violations of the
requirement to ensure that digital television receivers have the
capability to respond to changes in the content advisory rating
system, while very serious, are not as egregious as violations of the
DTV tuner requirement or violations involving the failure to provide
any V-Chip blocking capability. Significantly, television receivers
that do not include digital tuners or do not include any V-Chip
technology both deprive consumers of a key functionality altogether.
By contrast, digital television receivers which lack the ability to
adapt to a new rating system are still able to receive the existing
program rating descriptors and block unwanted programming. Therefore,
although each time a digital television receiver that lacks the
ability to adapt to a new rating system is shipped interstate
constitutes a separate violation subject to forfeiture, we find that
such an approach would be excessively punitive, given the nature of
these violations. Therefore, we will follow a per-model approach to
the forfeiture calculation for cases involving the interstate shipment
of receivers that do not have the capability to respond to changes in
the rating system.
12. Section 503(b)(6) of the Act bars the Commission from proposing a
forfeiture for violations that occurred more than a year prior to the
issuance of a NAL. Section 503(b)(6) does not, however, bar the
Commission from assessing whether Proview's conduct prior to that time
period apparently violated the rules and from considering such conduct
in determining the appropriate forfeiture amount for violations that
occurred within the one-year statutory period. Thus, while we may
consider that Proview's prior conduct violated the rules, the
forfeiture amount we propose herein relates to Proview's apparent
violations that have occurred within the past year.
13. As noted above, in this case we may propose 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 view of the important public policy considerations
underlying this requirement, we conclude that, generally, the
appropriate per model forfeiture amount in such cases will be $25,000.
We find that calculating forfeitures for the failure to include the
capability to respond to changes in the rating system using this per
model approach will result in forfeiture amounts that reflect the
seriousness of the violations and will deter future misconduct. In
cases presenting exacerbating factors, or if this enforcement approach
proves to be an inadequate deterrent to Proview or other
manufacturers, however, we will not hesitate to revisit this
forfeiture calculation approach.
14. Pursuant to Proview's confidentiality request, we will not specify in
the NAL the precise number of non-compliant models that Proview
shipped interstate in apparent violation of our rules. We will say,
however, that based on the record in this case, Proview's violations
merit a large proposed forfeiture. The regulatory deadlines at issue
have been in place in some form since 1998. The Commission announced
specific technical standards to implement V-Chip functionality in
digital television receivers in 2004 and gave manufacturers 18 months,
consistent with the industry's design cycle for a television receiver
model, to comply. For approximately 18 months after the March 15, 2006
deadline, however, Proview continued to ship in interstate commerce
digital television receivers that do not have the ability to respond
to changes in the content advisory rating system. These unlawful
shipments were substantial both in terms of the number of
non-compliant models and the total number of non-compliant units. For
these reasons, and based on the per model approach described above, we
propose a forfeiture of $300,000 for Proview's willful and repeated
interstate shipment of television receivers that do not comply with
the DTV V-Chip technology requirements in violation of Section 330(c)
of the Act and Section 15.120(d)(2) of the Rules. Based on Proview's
LOI Responses, and as discussed in the Appendix hereto, we propose a
forfeiture of $125,000 for PTI and a forfeiture of $175,000 for PTS.
The interstate shipments on which we are basing this proposed
forfeiture all occurred within the past year, i.e., within the
applicable one-year statute of limitations period.
IV. conclusion
15. We conclude that PTI and PTS each apparently willfully and repeatedly
violated Section 330(c) of the Act and Section 15.120(d)(2) of the
Rules by shipping interstate television receivers that do not comply
with the DTV V-Chip technology requirements. For these violations, we
propose forfeitures totaling $300,000.
V. ordering clauses
16. Accordingly, IT IS ORDERED that, pursuant to Section 503(b) of the
Act, and Section 1.80 of the Rules, Proview Technology, Inc. and
Proview Technology (Shenzhen), Ltd. are each NOTIFIED of its APPARENT
LIABILITY FOR A FORFEITURE for willful and repeated violations of
Section 330(c) of the Act and Section 15.120(d)(2) of the Rules as
follows:
(a) Proview Technology, Inc. in the amount of one hundred twenty five
thousand dollars ($125,000); and
(b) Proview Technology (Shenzhen), Ltd. in the amount of one hundred
seventy five thousand dollars ($175,000).
17. IT IS FURTHER ORDERED that, pursuant to Section 1.80 of the Rules,
within thirty days of the release date of this Notice of Apparent
Liability for Forfeiture, Proview SHALL PAY the full amount of the
proposed forfeiture or SHALL FILE a written statement seeking
reduction or cancellation of the proposed forfeiture.
18. Payment of the forfeiture must be made by credit card through the
Commission's Revenue and Receivables Operations Group at (202)
418-1995, or by check or similar instrument, payable to the order of
the Federal Communications Commission. 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.
The payments must include the NAL/Acct. No. and FRN No. as follows:
(a) Proview Technology, Inc. -- NAL/Account No. 200832100034 and FRN No.
0017347881; and
(b) Proview Technology (Shenzhen), Ltd. -- NAL/Account No. 200832100035
and FRN No. 0017347881.
19. 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.
20. 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.
21. 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 Gordon Harris, President, Proview
Technology, Inc., 7373 Hunt Avenue, Garden Grove, CA 92841, and to its
counsel, Kathleen Q. Abernathy, Esq., Akin Gump Strauss Hauer & Feld
LLP, 1333 New Hampshire Avenue, NW Washington, DC 20036.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary
Proview Technology, Inc. ("PTI") and Proview Technology (Shenzhen), Ltd.
("PTS") are both subsidiaries of Proview International Holdings, Ltd.
("PIH").
47 U.S.C. S: 330(c).
47 C.F.R. S: 15.120(d)(2).
See Pub. L. No. 104-104, 110 Stat. 56 (1996).
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) ("V-Chip Report and Order"). The rule adopted in 1998
provided that digital television receivers shall react in a similar manner
as analog televisions when programmed to block specific rating categories,
but did not specify technical standards to achieve this objective. Id. at
11258-59 P:P: 28-29.
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) ("Second DTV Periodic Review Report and Order").
The V-Chip technology requirements also apply to devices sold without an
accompanying display device. Id. at 18348 ("Similar to our requirements
for closed caption capabilities in digital television receivers, the rules
will also be applicable to DTV tuners which are sold without an associated
display device."). See also In the Matter of Third Periodic Review of the
Commission's Rules and Policies Affecting the Conversion to Digital
Television, Report and Order, FCC 07-228, at P: 191-94 (released Dec. 31,
2007) ("Third DTV Periodic Review Report and Order") (conforming the
codified rule to the rule amendment adopted by the Commission in the
Second DTV Periodic Review Report and Order after notice and comment).
Second DTV Periodic Review Report and Order at 18347-49 P: 155-59.
Id. at 18348-49 P: 159.
V-Chip Report and Order, 13 FCC Rcd at 11248 P: 2.
Pub. L. No. 104-104, 110 Stat. 56 (1996).
Id.
Id.
See Letter from Kathryn S. Berthot, Chief, Spectrum Enforcement Division,
Enforcement Bureau to Gordon Harris, President, Proview Technology, Inc.
(September 17, 2007) ("LOI").
See Letter from Kathleen Q. Abernathy, Esq. Counsel for Proview
Technology, Inc., to Kathryn S. Berthot, Chief, Spectrum Enforcement
Division, Enforcement Bureau (October 17, 2007) ("October 17, 2007
Response"). In both the October 17, 2007 Response and the November 7, 2007
Response (see infra n. 15), PTI responded for both itself and PTS. We
will, therefore, refer to the October 17, 2007 Response and the November
7, 2007 Response as "Proview's" responses.
See Letter from Kathleen Q. Abernathy, Esq. Counsel for Proview
Technology, Inc., to Kathryn S. Berthot, Chief, Spectrum Enforcement
Division, Enforcement Bureau (November 7, 2007) ("November 7, 2007
Response").
See Letter from Kathleen Q. Abernathy, Esq. Counsel for Proview
Technology, Inc., to Kathryn S. Berthot, Chief, Spectrum Enforcement
Division, Enforcement Bureau (October 17, 2007).
47 C.F.R. S: 15.120(d)(2).
47 U.S.C. S: 503(b)(1)(B); 47 C.F.R. S: 1.80(a)(1).
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).
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").
See, e.g., InPhonic, Inc., Order of Forfeiture and Further Notice of
Apparent Liability, 22 FCC Rcd 8689, 8699 P: 24 (2007); Globcom, 21 FCC
Rcd at 4723-24 P: 34.
See 47 C.F.R. S:1.80(b)(4) ("The Commission and its staff may use these
guidelines in particular cases [, and] retain the discretion to issue a
higher or lower forfeiture than provided in the guidelines, to issue no
forfeiture at all, or to apply alternative or additional sanctions as
permitted by the statute.") (emphasis added).
Syntax-Brillian Corporation, Notice of Apparent Liability for Forfeiture,
22 FCC Rcd 10530 (2007), response pending ("Syntax-Brillian NAL"); Regent
U.S.A., Inc., Notice of Apparent Liability for Forfeiture, 22 FCC Rcd
10520 (2007) (forfeiture paid) ("Regent NAL"). The DTV tuner requirement
requires that all new television broadcast receivers that are imported
into the United States or shipped in interstate commerce be capable of
receiving the signals of DTV broadcast stations over-the-air. See 47
C.F.R. S: 15.117(i)(1)(i).
Syntax-Brillian NAL, 22 FCC Rcd at 10535-36 P:P: 13-15 (concluding that
applying a proposed forfeiture on a per-model basis for shipment of
television receivers that were not compliant with the DTV tuner mandate
would result in forfeiture amounts incommensurate with the seriousness of
the violations); Regent NAL, 22 FCC Rcd at 10525-26 P:P: 13-15 (same). To
reflect the increasing seriousness of the violation as the number of
non-compliant units shipped or imported rises, we assessed forfeiture
amounts on a tier-by-tier basis, increasing the forfeiture amount as the
number of units shipped or imported increased. See e.g., Syntax-Brillian
NAL, 22 FCC Rcd 10535-36 P: 15 (Tiers and per-unit forfeiture amounts
were: 0-1000 units: $50 per unit, 1001-2500 units: $75 per unit, 2501-5000
units: $100 per unit, 5001-10000 units: $125 per unit, 10001-20000 units:
$150 per unit, 20001-30000 units: $175 per unit, 30001-40000 units: $200
per unit, 40001-50000: $225 per unit, and 50001+ units: $250 per unit.).
Funai Corporation, Inc., Notice of Apparent Liability for Forfeiture, 22
FCC Rcd 19663, 19667-8 P: 14 (2007), response pending ("Funai NAL").
Id. (Tiers and per-unit forfeiture amounts were: 0-1000 units: $12.50 per
unit, 1001-2500 units: $18.75 per unit, 2501-5000 units: $25 per unit,
5001-10000 units: $31.25 per unit, 10001-20000 units: $37.50 per unit,
20001-30000 units: $43.75 per unit, 30001-40000 units: $50 per unit,
40001-50000: $56.25 per unit, and 50001+ units: $62.50 per unit.).
47 U.S.C. S: 503(b)(6).
See 47 U.S.C. S: 503(b)(2)(E), 47 C.F.R. S: 1.80(b)(4); see also Behringer
USA, Inc., Notice of Apparent Liability for Forfeiture and Order, 21 FCC
Rcd 1820, 1827-28 P: 22 (2006), forfeiture ordered, 22 FCC Rcd 10451
(2007); Globcom, Inc. d/b/a Globcom Global Communications, Notice of
Apparent Liability for Forfeiture, 18 FCC Rcd 19893, 19903 P: 23 (2003),
forfeiture ordered, 21 FCC Rcd 4710 (2006) ("Globcom"); Roadrunner
Transportation, Inc., Forfeiture Order, 15 FCC Rcd 9669, 9671-72 P: 8
(2000); Cate Communications Corp., Memorandum Opinion and Order, 60 RR 2d
1386, 1388 (1986); Eastern Broadcasting Corp., Memorandum Opinion and
Order, 10 FCC 2d 37, 37-38 P: 3 (1967) recon. denied, 11 FCC 2d 193, 195
P: 6 (1967).
Cf. AboCom Systems, Inc., Notice of Apparent Liability for Forfeiture, 21
FCC Rcd 7875, 7878-79 P: 11 (Enf. Bur. Spectrum Enf. Div. 2006),
forfeiture ordered, 21 FCC Rcd 13140 (Enf. Bur. Spectrum Enf. Div. 2006),
recon. denied, 22 FCC Rcd 7448 (Enf. Bur. 2007) (proposing a $25,000
forfeiture against an equipment manufacturer for marketing one model of
radio frequency equipment that did not comply with the terms of its
equipment authorization and technical requirements specified in the
rules).
Second DTV Periodic Review Report and Order, 19 FCC Rcd at 18348-49 P:
159.
See supra paragraph 12.
(Continued from previous page)
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Federal Communications Commission FCC 08-111
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Federal Communications Commission FCC 08-111