Best Buy ‘Extremely Disappointed’ in FCC DTV Fines

The FCC Enforcement Bureau has reached consent decrees (agreements) or issued notices of liability (proposed fines) totaling more than $9 million for violations of DTV labeling, V-chip and tuner rules.

Best Buy, issued an NAL for $280,000, said it was “extremely disappointed that the FCC has chosen this course of action around an issue that is no longer even relevant to our stores.”

The FCC charges the retailers with “willfully and repeatedly” violating the rule governing the labeling of analog-only sets. According to the NAL against Best Buy, FCC staff issued multiple citations to Best Buy stores (and its Web site) from May 31 to June 11, 2007. After giving Best Buy a chance to comply, staff found violations in 18 stores on June 12, 2007.

Best Buy said the FCC action was in response to a relatively small number of instances, and the company took “immediate action to address every FCC finding and ultimately took the landmark step of fully transitioning to DTV-compatible inventory.”

“We have been in ongoing talks with the FCC on how Best Buy can continue to help consumers with multichannel education efforts,” Best Buy said. “We believe the FCC’s decision to seek fines in lieu of this dialogue represents a step backward from our mutual goal of fully preparing consumers for the DTV transition. ... Best Buy does not believe that it violated the FCC’s labeling rule in any willful or repeated manner or that the FCC’s attempt to seek fines in this case is warranted or justified.”

The company said it voluntarily pulled all its analog-only tuner products from its stores on Oct. 1, 2007, in a proactive effort to prevent confusion and to help jumpstart consumer awareness around the DTV conversion, it said in a statement.

“Best Buy has been a leader in helping educate consumers about the analog to digital transition,” the company said. “We were among the first retailers to put signage and brochures in our stores, including Spanish language versions of this material. We have had extensive DTV information available on as well as our Spanish language website.”

Best Buy said it has had converter boxes available in all its stores since Feb. 17, the day the government started mailing the coupons to consumers. “We have conducted extensive training of our home theater specialists to be sure we are getting customers the best and most up-to-date information about the transition,” the company said. “We are even conducting our own secret shopping tests to be sure the information we are providing to customers is accurate.”

In addition to the NALs to Best Buy and six other retailers totaling nearly $4 million, the FCC announced it had reached consent decrees with seven electronics manufacturers to pay more than $3.4 million in “voluntary contributions” for possible violations of rules mandating working V-Chips in new TVs. It also issued another two NALs totaling more than $1 million for V-Chip violations, and two forfeiture orders totaling more than $1.6 million for tuner requirements.

The V-Chip consent decrees say the companies may have violated rules by selling TVs with V-Chips that do not adapt to new rating systems. The consent decrees, in which the companies admit no wrongdoing, include compliance measures,

The two forfeiture orders concerned the importation or interstate shipment of analog-only televisions.

LG spokesman John I. Taylor said the V-Chip charge was related to a possible future application involving downloadable ratings, and that all LG televisions—even the supposed violators—perform all functions currently enabled by the data broadcasters provide.

“There was confusion in the industry about how it should be implemented,” Taylor said. “As soon as we learned about how we had misread the rules, we worked closely with the commission for a solution.”

Part of that solution included a way for customers to upgrade to the new functionality, should broadcasters ever implement it, Taylor said.

The actions are as below:DTV V-CHIP CONSENT DECREESLG Electronics$1,700,000PhilipsConsumer Electronics$450,000Sanyo Corporation$375,000Vizio, Inc.$370,000Panasonic Corporation$320,000Westinghouse Digital Electronics$210,000Audiovox Corporation$20,000$3,445,000DTV Labeling NALsSears, Roebuck, K-Mart$1,096,000Wal-Mart Stores/Sam’s West$992,000Circuit City Stores$712,000Fry’s Electronics$384,000Target Corporation$296,000Best Buy Co. Inc.$280,000CompUSA, Inc.$168,000
$3,928,000DTV Tuner ActionsSyntax-Brillian$1,266.100Precor Inc.$357,900
$1,624,000DTV V-Chip NALsPolaroid Corporation$775,000Proview Technology, Inc.$300,000$1,075,000