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Before the
Federal Communications Commission
Washington, D.C. 20554
)
)
In the Matter of File Number EB-07-RC-004
)
Value City Department Stores, Inc. NAL/Acct. No. 200832200002
)
Columbus, OH FRN: 0003011038
)
)
NOTICE OF APPARENT LIABILITY FOR FORFEITURE
Adopted: May 6, 2008 Released: May 9, 2008
By the Commission:
I. INTRODUCTION
1. In this Notice of Apparent Liability for Forfeiture ("NAL"), we find
that Value City Department Stores, Inc. ("Value City") 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 Value City is
apparently liable for a forfeiture in the amount of two hundred
sixteen thousand dollars ($216,000).
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 we 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, we 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." We 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, we
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 May 31, 2007, the Enforcement Bureau issued a Citation to
Value City for offering for sale television receiving equipment
having an analog-only tuner without displaying the required
Consumer Alert in close proximity. The Enforcement Bureau
conducted additional inspections at numerous stores and, based on
these inspections, issued one more Citation to Value City on June
5, 2007. After affording Value City a reasonable opportunity to
respond to the citations issued to Value City, agents and
investigators from the Enforcement Bureau began inspecting
numerous additional Value City stores on July 16, 2007, in
various states and once again observed in nine Value City stores
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 Value City 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 Value City
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 the Attachment, agents and
investigators from the Enforcement Bureau observed a number of
different models of television receiving equipment having only an
analog-only tuner on display in nine Value City stores without
the required Consumer Alert labels. Value City previously
received two citations for this same type of conduct prior to the
agents' inspections.
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's Forfeiture Policy Statement and Section 1.80 of
the Rules do not establish a specific base forfeiture for
violation of the analog-only tuner labeling requirements. In
adopting the Consumer Alert labeling requirements, the Commission
stated that "[a]ccurate communication of this impending change is
a highly material disclosure for consumers contemplating the
purchase of a television." We also noted that it is a matter of
public safety for consumers who rely on analog-only televisions
to obtain critical emergency information.
10. Similar issues arose regarding labeling requirements for wireless
hearing aid-compatible handsets. In those cases, the Enforcement
Bureau established a base forfeiture amount of $8,000 per handset
model that failed to comply with the labeling requirements. The
labeling requirements for wireless hearing aid-compatible
handsets and the analog-only tuner labeling requirements both
serve the important goal of ensuring that consumers have access
to necessary information. In light of the similarities in these
labeling requirements, we conclude that a $8,000 base forfeiture
amount per unlabeled model or device in each store where Bureau
agents and investigators observed a violation is appropriate for
apparent violations of Section 15.117(k).
11. We find that, on July 17, 18, 20, and 27, 2007, as detailed in
the Attachment, even after receiving two citations warning of
violations in its stores, Value City displayed numerous
different models of equipment with an analog-only tuner in nine
Value City stores without the required Consumer Alert label. As a
result, Value City 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. Applying the analysis set forth above to the
facts of this case, we conclude that Value City is apparently
liable for a $216,000 base forfeiture.
IV. ORDERING CLAUSES
12. 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, Value City Department Stores, Inc. is
hereby NOTIFIED of this APPARENT LIABILITY FOR A FORFEITURE in
the amount of two hundred sixteen thousand dollars ($216,000)
for violations of Section 15.117(k) of the Rules.
13. 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, Value City
Department Stores, Inc. SHALL PAY the full amount of the proposed
forfeiture or SHALL FILE a written statement seeking reduction or
cancellation of the proposed forfeiture.
14. 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[s] 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.
15. The response, if any, must be mailed to Federal Communications
Commission, Enforcement Bureau, and must include the NAL/Acct.
No. referenced in the caption.
16. 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 ("GAAP"); 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.
17. IT IS FURTHER ORDERED that a copy of this Notice of Apparent
Liability for Forfeiture shall be sent by Certified Mail, Return
Receipt Requested, and regular mail, to Value City Department
Stores, Inc. at its address of record.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary
ATTACHMENT
Proposed Forfeiture Amounts
1. July 17, 2007, Value City, Doraville, GA
Manufacturer Device Model # Forfeiture Amount
Sony VCR/DVD SLV-D370P $8,000
Philips DVD DVP-3050V $8,000
Sanyo DVD DRW-500C $8,000
SUBTOTAL $24,000
2. July 17, 2007, Value City Marietta, GA
Manufacturer Device Model # Forfeiture Amount
Magnavox TV MWC13D6 $8,000
SUBTOTAL $8,000
3. July 18, 2007, Value City Oak Lawn, IL
Manufacturer Device Model # Forfeiture Amount
Samsung DVD/Player DVD-V5650 $8,000
SUBTOTAL $8,000
4. July 20, 2007, Value City, Norfolk, VA
Manufacturer Device Model # Forfeiture Amount
Curtis TV TVD2000 $8,000
Magnavox TV MWC13D6 $8,000
Toshiba TV 26HF85 $8,000
SUBTOTAL $24,000
5. July 20, 2007, Value City, Livonia, MI
Manufacturer Device Model # Forfeiture
Amount
Magnavox DVD Player MWR10D6 $8,000
Samsung DVD Player DVD-V5650B $8,000
Sony DVD/ VCR SLVD-271P $8,000
Sony DVD/ VCR SLVD-370P $8,000
Sony DVD/ VCR SLVD-360P $8,000
SUBTOTAL $40,000
6. July 20, 2007, Gumee, IL
Manufacturer Device Model # Forfeiture Amount
RCA DVD/VCR DRC6350N $8,000
Samsung DVD/VCR DVD-V5500 $8,000
SUBTOTAL $16,000
7. July 27, 2007, Value City, Westland, MI
Manufacturer Device Model # Forfeiture
Amount
Sylvania 24"TV 6424TF $8,000
Sony DVD/ VCR SLVD-370P $8,000
SUBTOTAL $16,000
8. November 7, 2007, Value City, Pittsburgh, PA
Manufacturer Device Model # Forfeiture
Amount
SV2000 DVD-R WV10D6 $8,000
Magnavox DVD-R MWR10D6 $8,000
SUBTOTAL $16,000
9. January 16, 2008, Value City, Johnstown, PA
Manufacturer Device Model # Forfeiture
Amount
Memorex TV/VCR/DVD MVDT2002B $8,000
SV2000 TV/DVD CSV20PFD $8,000
RCA TV/DVD 20F510TD $8,000
RCA TV 20F512T $8,000
Magnavox TV/DVD MWC13D6 $8,000
Magnavox DVD-R MWR10D6 $8,000
SV2000 DVD-R WV10D6 $8,000
RCA DVD-R DRC8052NB $8,000
SUBTOTAL $64,000
Value City Total Proposed Forfeiture: $216,000
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 at P: 1 (2007)
("Second DTV Periodic Report and Order").
.
Id. at P: 10.
Second DTV Periodic Report and Order at 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 at 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).
ValueCity Department Stores, Inc., Citation No. C20073232005
(Enf. Bur. Chicago Office, rel. May 31, 2007).
ValueCity Department Stores, Inc., Citation No. C20073234004
(Enf. Bur. Columbia Office, rel. June 5, 2007). In preparing
this Citation, the Enforcement Bureau staff relied on
publicly available information to identify the television
receiving equipment with analog-only tuners. Subsequently,
Enforcement Bureau staff determined that this Citation
referred in part to the following erroneously identified
equipment models: Magnavox 24" TV/DVD, Model #MWC24T5B;
Sanyo 24" TV, Model #AVM2445. In light of this evidence, we
hereby cancel the relevant portions of this citation with
respect to those models.
Value City did not respond to the citations.
See Attachment for a listing of the stores visited and the
models observed at each 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
Value City'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., Application for Review of 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 Monetary 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).
The Attachment lists the dates of the Enforcement Bureau
inspections, the analog-only models identified in violation
of Section 15.117(k), as well as the Value City stores
involved.
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 Value
City a reasonable opportunity for a personal interview or to
submit a written response to its first Citation before
conducting a second round of inspections that would count
towards potential forfeiture liability. See supra para. 5
and notes 12-14. To the extent that the television receiving
models involved in this NAL differ from those listed in the
two citations issued to Value City, no additional citations
are necessary because the more recent apparent violations
are "conduct of the type described" in the earlier citations
- 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). In any event, the requirements of Section
503(b)(5) do not apply to Value City, which is a Commission
licensee and therefore subject to forfeiture under Section
503(b)(2) of the Act without first receiving notice via a
citation. See, e.g., Stations KNNL994, KNNL995, and KNNV417,
licensed to Value City in the Industrial/Business Pool
Private Land Mobile Service.
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").
Second DTV Periodic Report and Order at P: 12.
Id. See also 47 C.F.R. S:S: 11.1-11.61, 79.2.
See Pine Telephone Inc., Notice of Apparent Liability, 22
FCC Rcd 9205, 9210 (Enf. Bur., Spectrum Enf. Div. 2007)
subsequent history omitted; IT&E Overseas, Inc., Notice of
Apparent Liability, 22 FCC Rcd 7660, 7665 (Enf. Bur.,
Spectrum Enf. Div. 2007)..
We caution Value City and other retailers that future cases
involving repeat offenders may result in the imposition of
forfeitures on a continuing violation basis.
"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 at P: 12.
See Attachment 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).
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Federal Communications Commission FCC 08-123
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Federal Communications Commission FCC 08-123