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Before the
Federal Communications Commission
Washington, D.C. 20554
)
) File No. EB-07-SE-259
In the Matter of
) Acct. No. 200832100005
Funai Corporation, Inc.
) FRN No. 0017000423
)
ORDER
Adopted: July 3, 2008 Released: July 10, 2008
By the Commission:
1. In this Order, we adopt the attached Consent Decree entered into
between the Federal Communications Commission ("Commission") and
Funai Corporation, Inc. ("Funai"). The Consent Decree terminates an
investigation and Notice of Apparent Liability for Forfeiture ("NAL")
by the Commission against Funai for possible violations of Section
330(c) of the Communications Act of 1934, as amended, ("Act"), Section
15.120(d)(2) of the Commission's Rules ("Rules"), regarding Funai's
apparent interstate shipment, after March 15, 2006, of digital
television receivers that do not comply with the Commission's rules
regarding program blocking technology requirements for televisions
receivers, and Section 1.17 of the Rules regarding Funai's apparent
inaccurate statements to the Commission.
2. The Commission and Funai 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, which terminates the investigation and
cancels the NAL.
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 Funai 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 sections 4(i) and 503(b)
of the Communications Act of 1934, as amended, the Consent Decree
attached to this Order IS ADOPTED.
6. IT IS FURTHER ORDERED that the above-captioned investigation IS
TERMINATED and the Notice of Apparent Liability for Forfeiture IS
CANCELLED.
7. IT IS FURTHER ORDERED that Funai shall make its voluntary contribution
to the United States Treasury, as specified in the Consent Decree, 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). Funai will also send electronic notification on
the date said payment is made to Linda.Nagel@fcc.gov and
Kathy.Berthot@fcc.gov.
8. IT IS FURTHER ORDERED that Funai 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, as set forth
in the attached Consent Decree. Each report shall include a
compliance certificate from an officer, as an agent of Funai, stating
that the officer has personal knowledge that Funai 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 Chief, Spectrum Enforcement Division, Enforcement Bureau,
Federal Communications Commission, 445 12th Street, S.W., Washington,
D.C. 20554.
9. 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 Mr. Yoshikazu Uemura, Executive Vice President, Funai
Corporation Inc., 201 Route 17 North, Suite 903, Rutherford, NJ 07070
and to its counsel, Cheryl A. Tritt, Esq., Morrison & Foerster LLP,
2000 Pennsylvania Ave., NW, Washington, D.C. 20006.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary
Before the
Federal Communications Commission
Washington, D.C. 20554
)
) File No. EB-07-SE-259
In the Matter of
) Acct. No. 200832100005
Funai Corporation, Inc.
) FRN No. 0017000423
)
CONSENT DECREE
The Federal Communications Commission ("Commission" or "FCC") and Funai
Corporation, Inc. ("Funai" or the "Company"), by their authorized
representatives, hereby enter into this Consent Decree for the purpose of
terminating the Commission's investigation into whether Funai 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 program blocking technology requirements
(known as "V-Chip technology requirements"), and whether Funai violated
Section 1.17 of the Rules regarding its apparent incorrect responses to
Commission inquiries.
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, 47 U.S.C. 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. "Compliance Plan" means the program described in this Consent Decree
at paragraph 11.
e. "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) digital
television broadcast receivers sold without an accompanying display
device, such as Digital Video Recorders ("DVR").
f. "Effective Date" means the date on which the Commission releases the
Adopting Order.
g. "Funai Models" means the television models supplied or manufactured by
Funai that formed the basis for the Investigation.
h. "Investigation" means the investigation commenced by the Bureau's
August 7, 2007 Letter of Inquiry ("First LOI") regarding whether Funai
violated Section 330(c) of the Act, and Section 15.120(d)(2) of the
Rules, by shipping interstate, after March 15, 2006, digital
television receivers that do not comply with the DTV V-Chip technology
requirement, and the investigation commenced by the Bureau's December
27, 2007 Letter of Inquiry ("Second LOI") regarding whether Funai
violated Section 1.17 of the Rules by responding incorrectly to the
First LOI.
i. "Funai" means Funai Corporation, Inc. and its predecessors-in-interest
and successors-in-interest.
j. "NAL" or "Notice of Apparent Liability for Forfeiture" means Funai
Corporation, Inc., Notice of Apparent Liability for Forfeiture, 22 FCC
Rcd 19663 (2007).
k. "Order" or "Adopting Order" means an Order of the Commission adopting
the terms of this Consent Decree without change, addition, deletion,
or modification.
l. "Parties" means Funai and the Commission.
m. "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. The Bureau released a Letter of Inquiry on August 7, 2007 ("First
LOI"), regarding Funai's apparent interstate shipment, after March 15,
2006, of certain digital television receivers that did not comply with
the Commission's DTV V-Chip technology requirements . Question 2 of
the First LOI asked: "State whether the receivers listed above are
capable of receiving program rating descriptors transmitted pursuant
to industry standard EIA/CEA-766-A and are capable of blocking
programs from viewing when the program rating meets pre-determined
user requirements." In its response to the First LOI ("First LOI
Response"), Funai's one-word answer to Question 2 was "No." Question 3
of the First LOI asked the separate question of whether the Funai
Models are "able to process newer RRT versions contained in PSIP or
use new RRT codes to permit program blocking based on a new rating
system." Funai also answered "No" to Question 3 in its First LOI
Response.
4. On November 1, 2007, the Commission issued a Notice of Apparent
Liability for Forfeiture ("NAL") proposing that Funai be held liable
for a forfeiture of $7,745,687 under Section 503(b)(1)(B) of the Act,
and ordered the Company either to pay the proposed forfeiture or file
a written response within thirty (30) days of the NAL release date
stating why the proposed forfeiture should be reduced or canceled.
This forfeiture amount was consistent with the Commission's
understanding, based on the answers described in paragraph 3 above,
that the Funai Models did not comply with any part of Section
15.120(d)(2).
5. In its December 3, 2007 Response to the NAL ("NAL Response"), Funai
stated that its First LOI Response was incorrect in certain respects
and that the Funai Models are capable of receiving program rating
descriptors transmitted pursuant to industry standard EIA/CEA-766-A
and blocking programs from viewing when the program rating meets
pre-determined user requirements, as required by Section 15.120(d)(2)
of the Rules. Funai indicated, however, that the Funai Models are not
capable of responding to changes in the content advisory rating
system.
6. On December 27, 2007, the Bureau issued a Second LOI seeking, among
other things, a detailed explanation for Funai's apparently providing
material factual information that was incorrect in its First LOI
Response. In response, Funai explained that its statement in the First
LOI Response that the Funai Models were incapable of receiving and
responding to any program rating descriptors was based on an overly
literal interpretation of the question and its confusion on how to
respond accurately.
III. TERMS OF AGREEMENT
7. Adopting Order. The Parties agree that the provisions of this Consent
Decree shall be subject to final approval by the Commission by
incorporation of such provisions by reference in the Adopting Order
without change, addition, modification, or deletion.
8. Jurisdiction. Funai agrees that the Commission has jurisdiction over
it and the matters contained in this Consent Decree and has the
authority to enter into and adopt this Consent Decree.
9. Effective Date; Violations. The Parties agree that this Consent Decree
shall become effective on the date on which the FCC releases the
Adopting Order. Upon release, the Adopting Order and this Consent
Decree shall have the same force and effect as any other Order of the
Commission. Any violation of the Adopting Order or of the terms of
this Consent Decree shall constitute a separate violation of a
Commission Order, entitling the Commission to exercise any rights and
remedies attendant to the enforcement of a Commission Order.
10. Termination of Investigation. In express reliance on the covenants and
representations in this Consent Decree and to avoid further
expenditure of public resources, the Commission agrees to terminate
its investigation and to cancel its NAL. In consideration for the
termination of said investigation and cancellation of the NAL, Funai
agrees to the terms, conditions, and procedures contained herein. The
Commission further agrees that in the absence of new material
evidence, the Commission 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 Funai concerning the matters that were the subject of
the investigation. The Commission 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 Funai with respect to
Funai's basic qualifications, including its character qualifications,
to be a Commission licensee or to hold Commission authorizations.
11. Compliance Plan. For purposes of settling the matters set forth
herein, Funai agrees to create within 30 days a Compliance Plan
related to future compliance with the Act, the Commission's Rules, and
the Commission's Orders. The Plan will include, at a minimum, the
following components:
a. FCC Compliance Procedures. Funai shall develop, implement, and update
as necessary, with the assistance of outside regulatory counsel,
appropriate FCC Compliance Procedures. Relevant Funai personnel shall
be made aware of the FCC Compliance Procedures and are to follow them.
The FCC Compliance Procedures will, among other things, address
Section 15.120 of the Commission's Rules. The FCC Compliance
Procedures also will set forth a protocol to ensure that knowledgeable
persons at Funai review and verify all information provided in all
communications with the Commission to ensure that those responses are
correct, complete, and not misleading.
b. Compliance Committee. Funai will assemble and staff an FCC Compliance
Committee (the "Committee") chaired by the Officer of Product
Reliability at Funai Electric Company, Ltd. ("Funai Electric"). The
Committee, which may be organized into subcommittees, will include
representatives from Funai and Funai Electric, including staff from
the Product Reliability, TV Engineering, TV Project, DVD Engineering,
DVD Project, Development, TV Business Assistance, Business Strategy,
Marketing, Product Planning and the Legal & Intellectual Property
Departments. The Committee will meet on a monthly basis to discuss
compliance with FCC regulations and will communicate in a timely
fashion among the members any new technical requirements that might be
imposed by the FCC. The Committee will retain an outside technical
consultant that will be responsible for monitoring the FCC's and other
relevant U.S. web sites and routinely updating the Committee.
c. FCC Compliance Chairman. Funai shall designate an FCC Compliance
Chairman ("FCC Compliance Chairman") who will administer the
Compliance Plan, oversee Funai's regulatory compliance and serve as
the Funai point of contact for all Commission-related compliance
matters. The FCC Compliance Chairman, working with the Legal &
Intellectual Property Department and outside regulatory counsel, also
will be responsible for assuring that information provided to the FCC
by Funai is correct and accurate.
d. Employee Training. Funai will train and provide materials concerning
the V-Chip technology requirements set forth at Section 15.120(d)(2)
of the Commission's Rules and the requirements of the Consent Decree
to all of its employees who are involved directly or indirectly in the
design, development, testing, marketing, and distribution of Funai
products equipped with digital television receivers. Specifically,
Funai will, within 120 days of the Effective Date of the Consent
Decree, conduct a training program regarding compliance with the
V-Chip technology requirements and the Consent Decree. New employees
who are involved directly or indirectly in the design, development,
testing, marketing, and distribution of Funai products equipped with
digital television receivers will be trained within 120 days of being
hired. Existing employees who are reassigned to jobs with such
responsibilities will be trained within 120 days of reassignment. All
employees who are involved directly or indirectly in the design,
development, testing, marketing, and distribution of Funai products
equipped with digital television receivers will receive "refresher"
training annually.
e. Remedial Equipment Measures. Funai agrees to prepare a software
upgrade (the "Upgrade") for any Funai Model in inventory as of the
Effective Date of the Consent Decree that is shipped interstate in the
United States. The Upgrade will update Funai digital television
receivers to allow them to respond to changes in the content advisory
rating system.
Funai agrees that for individual units of any of the Funai Models sold to
customers in the United States, Funai will provide remedial measures for a
period of two years after the Effective Date of the Consent Decree. Funai
will post a link to a notice in a prominent position on its main website,
www.funai.us (the "Customer Notice"). The Customer Notice will identify
the Funai Models for which a remedial measure is available, will explain
the preinstalled V-Chip capabilities already available in them, and will
announce the availability of modifications to enhance current V-Chips. The
Customer Notice will provide a toll-free telephone number or numbers for
consumers to call to learn about the options with respect to modifications
to enable the full V-Chip technology functionality. Software for some
televisions will be upgraded at Funai facilities. Consumers may either
bring the set to an authorized Funai service center in person or may ship
the set. The locations of authorized service centers are provided via
Funai's website, www.funai.us. Depending on the television set and other
equipment that a consumer uses, for a period of 90 days from the Effective
Date, on request from a consumer, Funai will provide additional hardware
without charge to the customer to enable the enhanced V-Chip functions.
After 90 days from the Effective Date, on request from a consumer, Funai
will provide such hardware at cost, plus actual shipping and handling
charges, for a period of two years from the Effective Date.
f. Review and Monitoring. Funai will review the Compliance Plan annually,
with assistance from outside regulatory legal counsel, to ensure that
it is maintained in a proper manner and continues to address the
objectives set forth therein.
g. Compliance Reports. Funai will file compliance reports with the
Commission ninety days after the Effective Date, twelve months after
the Effective Date, and two years after the Effective Date. Each
compliance report shall include a compliance certificate from an
officer, as an agent of Funai, stating that the officer has personal
knowledge that Funai 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 two years from the Effective Date of the
Adopting Order.
12. Voluntary Contribution. Funai agrees that it will make a voluntary
contribution to the United States Treasury in the amount of $335,000.
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). Funai will also send electronic notification on the date said
payment is made to Linda.Nagel@fcc.gov and Kathy.Berthot@fcc.gov.
13. Waivers. Funai 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 Commission
issues an Order adopting the Consent Decree without change, addition,
modification, or deletion. Funai 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 Funai nor the Commission shall contest the
validity of the Consent Decree or the Adopting Order, and Funai shall
waive any statutory right to a trial de novo. Funai 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.
14. 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.
15. Subsequent Rule or Order. The Parties agree that if any provision of
the 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 Funai does not expressly
consent) that provision will be superseded by such Commission rule or
order.
16. Successors and Assigns. Funai agrees that the provisions of this
Consent Decree shall be binding on its successors, assigns, and
transferees.
17. 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. The
Parties agree that this Consent Decree is for settlement purposes only
and that by agreeing to this Consent Decree, Funai does not admit or
deny noncompliance, violation or liability for violating the Act or
Rules in connection with the matters that are the subject of this
Consent Decree.
18. Modifications. This Consent Decree cannot be modified without the
advance written consent of both Parties.
19. 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.
20. Authorized Representative. Each party represents and warrants to the
other that it has full power and authority to enter into this Consent
Decree.
21. 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.
________________________________
Marlene H. Dortch
Secretary
Federal Communications Commission
________________________________
Date
________________________________
Yoshikazu Uemura
President
Funai Corporation, Inc.
________________________________
Date
Funai Corporation, Inc., Notice of Apparent Liability for Forfeiture,
22 FCC Rcd 19663 (2007), response received ("NAL").
47 U.S.C. S: 330(c).
47 C.F.R. S: 15.120(d)(2).
47 C.F.R. S: 1.17.
47 U.S.C. S: 154(i), 503(b).
47 U.S.C. S: 330(c).
47 C.F.R. S: 15.120(d)(2).
47 C.F.R. S: 1.17.
See Letter from Kathryn S. Berthot, Chief, Spectrum Enforcement
Division, Enforcement Bureau to Funai Corporation, Inc. (August 7,
2007) ("First LOI").
47 U.S.C. S: 330(c).
47 C.F.R. S: 15.120(d)(2).
47 C.F.R. 15.120(d)(2).
See Letter from Kathryn S. Berthot, Chief, Spectrum Enforcement
Division, Enforcement Bureau to Funai Corporation, Inc. (December 27,
2007) ("Second LOI").
47 C.F.R. S: 1.17.
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 Letter from Kathryn S. Berthot, Chief, Spectrum Enforcement
Division, Enforcement Bureau to Funai Corporation, Inc. (August 7,
2007) ("First LOI"); see also 47 C.R.R. S: 15.120(d)(2).
First LOI at 2.
See Letter from Yoshikazu Uemura, Executive Vice President, Funai
Corporation to Brett Greenwalt, Spectrum Enforcement Division,
Enforcement Bureau (September 7, 2007) ("First LOI Response").
Funai Corporation, Inc., Notice of Apparent Liability for Forfeiture,
22 FCC Rcd 19663 (2007), response pending ("NAL").
See NAL, 22 FCC Rcd at 19665.
See Response of Funai Corporation, Inc. to Notice of Apparent
Liability (December 3, 2007) ("NAL Response").
NAL Response at 8.
Id. at 9-10.
See Letter from Kathryn S. Berthot, Chief, Spectrum Enforcement
Division, Enforcement Bureau to Funai Corporation, Inc. (December 27,
2007) ("Second LOI").
See Letter from Cheryl A. Tritt, Esq. Counsel for Funai Corporation,
Inc. to Linda Nagel, Spectrum Enforcement Division, Enforcement Bureau
at 3 (January 23, 2008) ("Second LOI Response").
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