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                                   Before the

                       Federal Communications Commission

                             Washington, D.C. 20554


                           )                               
                                                           
                           )                               
                               File No. EB-07-SE-235       
     In the Matter of      )                               
                               NAL/Acct. No. 200832100033  
     Precor Incorporated   )                               
                               FRN # 0012740635            
                           )                               
                                                           
                           )                               


                  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
       Precor Incorporated ("Precor") apparently liable for a forfeiture in
       the amount of $357,900 for its willful and repeated violations of
       Section 15.117(i)(1)(iii) of the Commission's Rules ("Rules"). The
       apparent violations involve Precor's importation and interstate
       shipment after March 1, 2007 of television receivers that do not
       comply with the Commission's rules regarding digital television
       ("DTV") reception capability.

   II. Background

    2. The Commission adopted the DTV reception capability requirement in
       2002. The DTV reception requirement, which also is often termed 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. The DTV tuner requirement was
       intended to facilitate the transition to digital television by
       promoting the availability of DTV reception equipment and to protect
       consumers by ensuring that their television receivers will provide
       off-the-air television reception of digital signals just as they have
       provided off-the-air television reception of analog signals.

    3. In order to minimize the impact of the DTV tuner requirement on both
       manufacturers and consumers, the Commission adopted a phase-in
       schedule that applied the requirement first to receivers with the
       largest screens and then to progressively smaller screen receivers and
       other television receiving devices that do not include a viewing
       screen, i.e., VCRs and DVD players. This phase-in plan was intended to
       allow increasing economies of scale with production volume to be
       realized so that DTV tuner costs would be lower when they are required
       to be included in smaller sets and other television receiving devices.
       As modified by the Commission in 2005, this phase-in schedule is as
       follows:

   Receivers with screen sizes 36" and above -- 50% of units imported or
   shipped interstate by responsible parties were required to include DTV
   tuners effective July 1, 2004; 100% of such units were required to include
   DTV tuners effective July 1, 2005;

   Receivers with screen sizes 25" to 35" -- 50% of units imported or shipped
   interstate by responsible parties were required to include DTV tuners
   effective July 1, 2005; 100% of such units were required to include DTV
   tuners effective March 1, 2006;

   Receivers with screen sizes less than 25" - 100% of units imported or
   shipped interstate by responsible parties were required to include DTV
   tuners effective March 1, 2007; and

   Other video devices (videocassette recorders (VCRs), digital video
   recorders such as hard drive and DVD recorders, etc.) that receive
   television signals - 100% of units imported or shipped interstate by
   responsible parties were required to include DTV tuners effective March 1,
   2007.

    4. In July 2007, the Enforcement Bureau received a complaint alleging
       that Precor, through its Cardio Theater division, was importing and
       shipping in interstate commerce television receivers that do not
       comply with the DTV tuner requirements. The Enforcement Bureau issued
       a letter of inquiry ("LOI") to Precor on September 12, 2007. On
       November 9, 2007, Precor filed a response to the LOI. Precor filed
       supplemental responses on December 10, 2007, December 21, 2007,
       January 15, 2008, and March 31, 2008.

    5. Precor is a manufacturer of commercial and consumer exercise equipment
       and accessories for the domestic and international market. According
       to Precor's LOI Response, the company's commercial fitness equipment
       is sold to fitness facilities directly by Precor or by its dealers,
       with Precor selling roughly 90% of the commercial products directly.
       In addition to health clubs, Precor's commercial customers include
       institutions such as resorts, gyms established by major corporations
       for their employees, colleges and universities, hospitals and health
       spas (collectively, "health clubs"). Precor states that it imports and
       ships interstate television receivers, which it refers to as "personal
       viewing screen" ("PVS") units, in connection with, and as an accessory
       product to, certain of its commercial fitness equipment, including
       ellipticals, treadmills and adaptive movement products. The PVS units
       are sold either on an integrated basis, attachable directly to the
       fitness equipment, or on a standalone basis, with their own
       Precor-provided stands that are positioned in front of the fitness
       equipment. Precor asserts that the PVS units are not sold in
       connection with fitness equipment sold to consumers, nor are the PVS
       units sold separately to consumers. Precor further asserts that the
       retail prices for the PVS units exceed $1,000, well above the prices
       that consumers would pay at retail outlets for televisions providing
       similar quality and resolution and the same size viewing screens.

    6. Precor explains that Precor-certified technicians install the PVS
       units in health clubs as part of the company's integrated closed
       circuit video entertainment systems provided to health clubs. Health
       clubs utilize a central cable box or satellite receiver that
       terminates that cable system feed or satellite feed at the health
       clubs. Either device is then connected to a Precor-supplied server
       located on the health club's premises, which is attached to a coaxial
       cable network extending to the PVS units installed or placed directly
       in front of the commercial fitness equipment throughout the facility.
       The server, Precor states, allows users to select the channels of
       their choice on their PVS units during their workouts. Precor also
       states that it operates its own content distribution network that
       delivers video content via satellite to health clubs. The server
       enables users to select at least eight music video streams provided by
       Precor's satellite network, programming and text messages determined
       by the health club, and generally available satellite or cable
       programming.

    7. Precor acknowledges that, after March 1, 2007, it imported and shipped
       interstate units of one model of a 15" PVS unit that contain an analog
       tuner, but do not contain a digital tuner. Precor further admits that
       the importation of analog-only reception devices is not permitted
       under the Commission's rules. Precor maintains, however, that it may
       legally ship PVS units interstate within the U.S. Precor asserts, in
       this regard, that in adopting the importation and interstate shipping
       restrictions, the Commission stated

   [c]onsistent with the DTV transition plan that Congress established in
   Section 309(j) of the Communications Act of 1934, and pursuant to our
   authority under the ACRA, our objective in establishing a DTV tuner
   requirement is [to ensure that television receiving equipment]
   manufactured or imported after a specified date be able to receive over
   the air signals.

   Thus, according to Precor, the Commission clearly intends to exercise its
   jurisdiction by regulating interstate shipping only by U.S. manufacturers
   of DTV receivers. Precor claims that because it imports the PVS units from
   overseas and does not manufacture the units in the U.S., it is subject
   only to the Commission's import restrictions and not to any restrictions
   on interstate shipments of those imports.

    8. Moreover, Precor submits that strict enforcement of the DTV tuner
       requirement would not support either the purpose or intent of the DTV
       tuner requirement. In support of this argument, it asserts that the
       PVS units are not intended for and are not sold to consumers for
       personal use; that, although technically capable, the units do not, as
       installed, receive over-the-air broadcast signals; that the PVS units
       are sold as elements of integrated closed circuit video entertainment
       systems designed to meet the needs of the health club industry; and
       the PVS units are priced well above the price of similar television
       sets that are ubiquitously available in the marketplace.

    9. Precor requested confidentiality of certain information in its LOI
       response and supplemental responses, including the specific number of
       units imported and shipped interstate, and that request remains
       pending. Accordingly, portions of Precor's LOI response and
       supplemental responses are discussed in an Appendix hereto, and we are
       treating the Appendix as confidential at this time.

   III. DISCUSSION

     A. Failure to Comply with DTV Tuner Requirement

   10. We conclude that Precor apparently willfully and repeatedly imported
       and shipped in interstate commerce television receivers that do not
       comply with the DTV tuner requirement in violation of Section
       15.117(i)(1)(iii) of the Rules. As set forth in detail in the
       confidential Appendix, Precor admits that, after the March 1, 2007
       deadline for small-size screen receivers, it repeatedly imported and
       shipped interstate non-DTV-compliant small-size screen receivers.

     A. Proposed Forfeiture

   11. 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. Based on
       the analysis set forth below, we conclude that Precor is apparently
       liable for a forfeiture in the amount of $357,900 for willfully and
       repeatedly importing and shipping in interstate commerce television
       receivers that do not comply with the DTV tuner requirement in
       violation of Section 15.117(i)(1)(iii) of the Rules.

   12. 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."

   13. 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 tuner requirement. 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.

   14. The DTV tuner requirement promotes the important public policy goal of
       helping to speed the transition to digital television, and we
       therefore have found violations of this requirement to be more
       egregious, in general, than many other types of equipment marketing
       cases that come before us. DTV receivers are a necessary element of
       digital broadcast television service. Consumers must have the
       capability to receive DTV signals for the DTV transition to move
       forward to successful completion. The DTV tuner requirement is
       intended to protect consumers by ensuring that their TV receivers will
       provide off-the-air TV reception of digital signals when analog TV
       operation ceases. Thus, we have concluded 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.

   15. In the Regent NAL and the Syntax-Brillian NAL, we determined that, in
       cases involving the interstate shipping or importation of television
       receivers that did not comply with the DTV tuner requirements, we will
       propose a forfeiture based on each unit shipped or imported within the
       statute of limitations, regardless of the number of models shipped or
       imported. This approach, we noted, "gets to the root of the apparent
       violation - non-compliant televisions in the hands of American
       consumers." Furthermore, to reflect the increasing seriousness of the
       violation as the number of non-compliant units shipped or imported
       rises, we concluded that we will propose forfeitures on a tier-by-tier
       basis, applying an escalating per-unit forfeiture amount separately to
       each successive tier.

   16. In Syntax Brillian and Regent, we applied the following tiers and
       per-unit penalties for violation of our DTV tuner requirements:

   0-1000 units: $50 per unit

   1001-2500 units: $75 per unit

   2501-5000 units: $100 per unit

   5001-10,000 units: $125 per unit

   10,001-20,000 units: $150 per unit

   20,001-30,000 units: $175 per unit

   30,001-40,000 units: $200 per unit

   40,001-50,000 units: $225 per unit

   50,001+ units: $250 per unit

   Consistent with Syntax-Brillian and Regent, we will use the tier-by-tier,
   per-unit methodology articulated in those NALs to assess the forfeiture
   here.

   17. We reject Precor's claim that since it imports the PVS units from
       overseas and does not manufacture the units in the U.S., it is subject
       only to the Commission's import restrictions and not to the interstate
       shipment restrictions. Section 15.117 makes clear that responsible
       parties may not ship in interstate commerce or import television
       receivers that do not comply with the DTV tuner requirement. Under
       Section 2.909 of our rules, the responsible party for purposes of the
       DTV tuner requirement may be a manufacturer or an importer. However,
       neither Section 2.909 nor Section 15.117 contains language limiting
       our authority to enforce the DTV tuner rules such that we may penalize
       only interstate shipments of non-compliant DTV receivers manufactured
       in the United States. The language of the DTV Review Second Report and
       Order cited by Precor that describes our overarching objective in
       enacting the DTV tuner rule cannot be read to impose such a
       restriction. Therefore, Precor's interpretation of the DTV tuner rule
       is excessively narrow and we reject it.

   18. Thus, the rule imposes two distinct prohibitions on responsible
       parties: it prohibits both the importing and interstate shipping of
       television receivers that do not contain digital tuners. We find,
       however, that treating the importation and subsequent interstate
       shipment of the same television receiver as two separate violations is
       not warranted. Given that the DTV tuner rule is meant to ensure that
       all television receiving devices are equipped with a digital tuner, we
       conclude that the purpose of the rule will best be served by treating
       the importation and subsequent interstate shipment of the same
       receiver as a single violation. In future forfeiture actions taken for
       violations of the DTV tuner requirement, we will assess the facts of
       each case in determining how best to enforce the requirements of
       Section 15.117, under the interpretation articulated here. In this
       case, there is insufficient information to determine which receivers
       may have been imported by Precor, but not subsequently shipped
       interstate. Therefore, we will propose a forfeiture only for those
       non-DTV-compliant units that Precor shipped in interstate commerce
       after the March 1, 2007 deadline.

   19. Finally, we disagree with Precor's argument that strict enforcement of
       the DTV tuner requirement to the PVS units would not support either
       the purpose or intent of the DTV tuner requirement. In a closely
       analogous situation, the Commission rejected a request by the
       manufacturer of a specialized video system distributed for use in the
       health care system that we clarify that the DTV tuner requirement does
       not apply to viewing units included in specialized video systems. In
       the PDI Order, the manufacturer (PDI) argued that the Commission
       should not consider its viewing units to be television receivers
       subject to the DTV tuner requirement because the units: (1) received
       power through the same coaxial cable that provided the video signal to
       the units; (2) had no place to attach an over-the-air antenna, instead
       receiving video signals only from a central unit through the
       specialized coaxial cable; and (3) could be used only as part of a
       larger video system that was designed and sold exclusively for the
       health care market. The Commission concluded that the PDI viewing
       units could be used to receive off-the-air broadcast signals and
       therefore were television broadcast receivers as defined in Section
       15.3(w) of the Rules. The Commission also found no merit in PDI's
       argument that requiring its viewing units to include digital tuners
       would not advance the goals of the DTV tuner requirement. Rather, the
       Commission noted that its objective in adopting the DTV tuner
       requirement was to maximize the number of television receivers
       containing a digital tuner in the market, with a final goal that all
       new television receiver products include a digital tuner as quickly as
       possible. While the Commission acknowledged that the PDI viewing units
       differed from most television receivers in that they were designed to
       receive service from a separate antenna connected through a cable,
       rather than an attached antenna, this did not alter the fact that the
       viewing units would not be able to receive off-the-air television
       signals when analog television service ends unless they include a DTV
       tuner. The Commission concluded, moreover, that "it would be
       inconsistent with [the goals underlying the DTV tuner requirement] to
       establish a process that would provide favorable treatment of requests
       for waiver of the DTV tuner requirement for TV receivers used in
       specialized video systems."

   20. Notwithstanding Precor's claims that its customers are commercial
       health clubs that will not use the PVS units to view over-the-air
       broadcasts, we find that those devices, like the viewing units at
       issue in the PDI Order, are capable of receiving over-the-air
       broadcast television signals and therefore are television broadcast
       receivers subject to the DTV tuner requirement. In the Regent NAL,
       Regent claimed that it should not be subject to forfeiture because,
       although its devices were subject to the DTV tuner requirement, most
       of its customers were commercial or educational organizations that
       used the devices as monitors, rather than television receivers, and
       the company did not emphasize the devices' analog tuner capabilities
       in its marketing efforts. In rejecting these arguments, we noted that
       the DTV tuner requirement does not exclude television receivers used
       as monitors and, notwithstanding Regent's claims about its customer
       base and its marketing efforts, it was likely that Regent's devices
       would be used as television receivers at some point. Similarly, no
       exception to the DTV tuner requirement exists for units like those at
       issue here. As we noted in the Regent NAL, we will not assume that
       owners of these devices will never attempt to use them to receive
       over-the-air broadcasts, nor will we accept Precor's marketing
       strategy as a mitigating factor. In any event, our research found a
       thriving consumer market for used commercial-quality exercise
       equipment, including Precor's PVS units. Thus, it is probable that
       some of these products will find their way to consumers, who may be
       unaware that Precor's PVS units will not receive over the air digital
       broadcasts. Therefore, for all the reasons stated above, we reject
       Precor's arguments and find that a significant forfeiture is
       appropriate here.

   21. Due to Precor's confidentiality request, we will not specify in this
       NAL the precise number of non-compliant units that Precor shipped
       interstate in apparent violation of our rules. Based on the record in
       this case, however, Precor's violations merit a large proposed
       forfeiture. The regulatory deadlines at issue have been in place for
       some time - manufacturers and importers have known about the DTV tuner
       requirement since 2002. Precor nevertheless continued to ship
       interstate small-size screen receivers that do not comply with the DTV
       tuner requirement until September 18, 2007, more than six months after
       the March 1, 2007 deadline. These unlawful interstate shipments were
       substantial in terms of the number non-DTV compliant units. For these
       reasons, and based on the tiered, per unit approach described above,
       we propose a forfeiture of $357,900 for Precor's willful and repeated
       interstate shipment of television receivers that do not comply with
       the DTV tuner requirement in violation of Section 15.117(i)(1)(iii) of
       the Rules.

   III. ordering clauses

   22. Accordingly, IT IS ORDERED that, pursuant to Section 503(b) of the
       Act, and Section 1.80 of the Rules, Precor Incorporated is NOTIFIED of
       its APPARENT LIABILITY FOR A FORFEITURE in the amount of three hundred
       fifty-seven thousand, nine hundred dollars ($357,900) for willful and
       repeated violations of Section 15.117(i)(1)(iii).

   23. 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, Precor Incorporated SHALL PAY the full
       amount of the proposed forfeiture or SHALL FILE a written statement
       seeking reduction or cancellation of the proposed forfeiture.

   24. 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.

   25. 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.

   26. 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.

   27. 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 counsel for Precor Incorporated, C.
       Douglas Jarrett, Esq., Keller and Heckman LLP, 1001 G Street, N.W.,
       Suite 500 West, Washington, DC 20001.

   FEDERAL COMMUNICATIONS COMMISSION

   Marlene H. Dortch

   Secretary

   47 C.F.R. S: 15.117(i)(1)(iii).

   Review of the Commission's Rules and Policies Affecting the Conversion to
   Digital Television, Second Report and Order and Second Memorandum Opinion
   and Order, 17 FCC Rcd 15978, 15996 (2002) ("DTV Review Second Report and
   Order").

   DTV reception capability involves more circuitry than just a tuner. To
   provide this capability requires a tuner to receive the digital signal, an
   MPEG decoder/formatter, and associated processing capability and memory.
   See Requirements for Digital Television Receiving Capability, Report and
   Order and Further Notice of Proposed Rulemaking, 20 FCC Rcd 11196 n. 2
   (2005) ("DTV Tuner Report and Order").

   DTV Review Second Report and Order, 17 FCC Rcd at 15996. The DTV tuner
   requirement also applies to other devices such as television interface
   devices that do not include a viewing screen, e.g., devices such as VCRs
   and DVD players that are intended to provide audio-video signals to a
   video monitor with an antenna or antenna terminals that can be used for
   off-the-air television reception. See 47 C.F.R. S: 15.117(i)(1)(i).

   Id. at 15979. In this latter regard, the DTV tuner requirement ensures
   that the intent of the All Channel Receiver Act of 1962 ("ACRA"), P.L. No.
   87-529, 76 Stat. 150, is fulfilled. The ACRA, which is codified at 47
   U.S.C. S: 303(s), states that the Commission shall "[h]ave authority to
   require that apparatus designed to receive television pictures broadcast
   simultaneously with sound be capable of adequately receiving all
   frequencies allocated by the Commission to television broadcasting ...."
   See DTV Review Second Report and Order, 17 FCC Rcd at 15589-91.

   Id. at 15998-99.

   Id.

   In June 2005, the Commission modified the rules to advance the date on
   which 100% of new television receivers with screen sizes 25-36" that are
   imported or shipped interstate must include DTV tuners from July 1, 2006
   to March 1, 2006. DTV Tuner Report and Order, 20 FCC Rcd at 11203.
   Subsequently, in November 2005, the Commission modified the rules to
   advance the date on which 100% of new television receivers with screen
   sizes 13-24" and certain other television receiving devices such as VCRs
   and digital video recorders that are imported or shipped interstate must
   include DTV tuners from July 1, 2007 to March 1, 2007. See Requirements
   for Digital Television Receiving Capability, Second Report and Order, 20
   FCC Rcd 18607, 18614-16 (2005) ("DTV Tuner Second Report and Order"). The
   Commission also amended the rules to apply the DTV tuner requirement to
   new receivers with screen sizes smaller than 13" on this same schedule.
   Id. Although the Commission  adopted this requirement for receivers with
   screen sizes smaller than 13" through the appropriate notice and comment
   procedures, and modified the rules to show March 1, 2007, as the
   accelerated deadline, we inadvertently omitted to delete the exception
   created by Section 15.117(i)(2) for "units with integrated tuners/displays
   that have screen sizes measuring less than 7.8 inches vertically, i.e.,
   the vertical measurement of a screen in the 4:3 aspect ratio that measures
   13' [sic] diagonally across the picture viewing area." The Commission
   recently corrected Section 15.117(i)(2) by striking the inappropriate
   language. See Third Periodic Review of the Commission's Rules and Policies
   Affecting the Conversion to Digital Television, Report and Order, FCC
   07-228 P: 190 (rel. Dec. 31, 2007).

   The DTV tuner requirement applies to "responsible parties," as defined in
   Section 2.909 of the Rules, 47 C.F.R. S: 2.909. Under Section 2.909, the
   party responsible for equipment such as television receivers that are
   subject to our "verification" equipment authorization procedure is the
   manufacturer or, in the case of imported equipment, the importer. If
   subsequent to manufacture and importation, the equipment is modified by
   any party not working under the authority of the responsible party, the
   party performing the modification becomes the new responsible party.

   See Letter from Kathryn S. Berthot, Chief, Spectrum Enforcement Division,
   Enforcement Bureau to Paul J. Byrne, President, Precor, Inc. (September
   12, 2007).

   See Letter from C. Douglas Jarrett, Esq. Counsel for Precor, Inc. to Linda
   Nagel, Spectrum Enforcement Division, Enforcement Bureau (November 9,
   2007) ("LOI Response").

   See Letter from C. Douglas Jarrett, Esq. Counsel for Precor, Inc. to Linda
   Nagel, Spectrum Enforcement Division,Enforcement Bureau (December 10,
   2007); Letter from C. Douglas Jarrett, Esq. Counsel for Precor, Inc. to
   Linda Nagel, Spectrum Enforcement Division, Enforcement Bureau (December
   21, 2007); Letter from C. Douglas Jarrett, Esq. Counsel for Precor, Inc.
   to Linda Nagel, Spectrum Enforcement Division, Enforcement Bureau (January
   15, 2008); Letter from C. Douglas Jarrett, Esq. Counsel for Precor, Inc.
   to Linda Nagel, Spectrum Enforcement Division, Enforcement Bureau (March
   31, 2008).

   LOI Response at 1.

   Id.

   Id.

   Id.

   Id. at 1-2.

   Id. at 1.

   Id.

   Id. at 2.

   Id.

   Id.

   Id.

   Id.

   Id.

   Id. at 2, 4.

   Id. at 4.

   Id.

   Id. (quoting DTV Review Second Report and Order, 17 FCC Rcd at 15994
   (emphasis added)).

   Id.

   Id.

   Id.

   Id.

   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. 47 U.S.C. S: 312(f)(1). The legislative history of
   Section 312(f)(1) of the Act clarifies that this definition of willful
   applies to both Sections 312 and 503(b) of the Act, H.R. Rep. No. 97-765,
   97th Cong. 2d Sess. 51 (1982), and the Commission has so interpreted the
   term in the Section 503(b) context. See Southern California Broadcasting
   Co., Memorandum Opinion and Order, 6 FCC Rcd 4387, 4388 (1991), recon.
   denied, 7 FCC Rcd 3454 (1992) ("Southern California").

   Section 312(f)(2) of the Act, which also applies to forfeitures assessed
   pursuant to Section 503(b) of the Act, provides that "[t]he term
   `repeated,' ... means the commission or omission of such act more than
   once or, if such commission or omission is continuous, for more than one
   day." 47 U.S.C. S: 312(f)(2). See Callais Cablevision, Inc., Notice of
   Apparent Liability for Forfeiture,16 FCC Rcd 1359, 1362 (2001); Southern
   California, 6 FCC Rcd at 4388.

   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 (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 (2007); Globcom, Inc. d/b/a
   Globom Global Commun., Order of Forfeiture, 21 FCC Rcd 4710, 4723-24
   (2006).

   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, 10535 (2007), response pending ("Syntax-Brillian NAL");
   Regent U.S.A., Inc., Notice of Apparent Liability for Forfeiture, 22 FCC
   Rcd 10520, 10525 (2007) (forfeiture paid) ("Regent NAL").

   See DTV Tuner Report and Order, 20 FCC Rcd at 11199; DTV Tuner Second
   Report and Order, 20 FCC Rcd at 18608.

   See id.

   Syntax-Brillian NAL, 22 FCC Rcd at 10535-36 (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 (same).

   Id.

   Syntax-Brillian NAL, 22 FCC Rcd at 10535; Regent NAL, 22 FCC Rcd at 10525.

   Syntax-Brillian NAL, 22 FCC Rcd at 10535-36; Regent NAL, 22 FCC Rcd at
   10525-26.

   Syntax-Brillian NAL, 22 FCC Rcd at 10535; Regent NAL, 22 FCC Rcd at 10525.

   See 47 C.F.R. S: 15.117(a).

   See 47 C.F.R. S: 2.909(b).

   See supra P: 7.

   See Requirements for Digital Television Receiving Capability, Order, 21
   FCC Rcd 9478, 9479-80 (2006) ("PDI Order").

   Id. at 9479.

   Id. at 9479-80. See 47 C.F.R. S: 15.3(w) (defining a television broadcast
   receiver as "a device designed to receive television pictures that are
   broadcast simultaneously with sound on the television channels authorized
   under part 73 of this chapter").

   Id. at 9480.

   Id.

   Id.

   Id. We note that the Commission granted PDI a limited waiver of the DTV
   tuner requirement to allow it additional time to bring its existing models
   into compliance, recognizing that the process for meeting the safety
   requirements for equipment used in medical facilities, coupled with PDI's
   position as a smaller manufacturer, may pose difficulties for PDI in
   meeting the March 1, 2007 deadline. Id. By contrast, Precor never sought
   such a waiver, nor does not argue that it encountered particular
   difficulties in bringing its PVS units into compliance with the DTV tuner
   requirement by the March 1, 2007 deadline. To the contrary, after the
   Bureau initiated its investigation, Precor promptly began distributing PVS
   units with digital tuners.

   Regent NAL, 22 FCC Rcd at 10526. Indeed, we noted that Regent's devices
   were sold to consumers by retailers like Costco and Best Buy. Regent NAL,
   22 FCC Rcd at 10526.

   Although Precor claims that its new PVS units are sold exclusively to
   commercial users rather than consumers, we found several used units and
   related equipment available for sale online to individuals. See, e.g.,
   http://www.globalfitness.com/detail_elliptical_training_machine.asp?id=357
   (offering a "remanufactured" Precor treadmill and 17'' "flat screen tv");
   http://www.usedgymequipment.com/precor/precor_966i.htm (offering a used
   treadmill with PVS unit);
   http://sporting-goods.pricegrabber.com/treadmills/m/44277469/ (showing
   four merchants selling used treadmills with PVS units);
   http://www.treadmillsrus.com/component/page,shop.product_details/flypage,shop.flypage/product_id,21/category_id,14/manufacturer_id,0/option,com_virtuemart/Itemid,1/vmcchk,1/
   (offering a used 12'' PVS unit).

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   Federal Communications Commission FCC 08-112

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   Federal Communications Commission FCC 08-112