FCC gives fines for digital TV violations

April 10, 2008 12:42:46 PM PDT
Federal regulators on Thursday fined Wal-Mart Stores Inc., Best Buy Co. Inc., and other retailers $3.9 million combined for failing to properly label that analog-only televisions will need to be retrofitted after the switch to digital TV next year. The Federal Communications Commission also handed down $2.7 million in fines to other companies for violating other digital TV rules that involve shipping analog equipment and blocking technologies such as the V-chip.

An FCC rule, adopted last May, requires retailers to display or affix "consumer alert" labels to analog-only TV equipment that says it will not receive signals after the nationwide digital transition - without a special converter box.

The rule is to keep consumers from buying TV equipment that will not work after the digital switch by Feb. 17, 2009. After that, if the TV doesn't get cable or satellite service or isn't hooked up to the converter box that translates over-the-air digital broadcasts, it won't work.

Sears Holding Corp., which operates Sears and Kmart retail stores, was fined nearly $1.1 million for the labeling violation, while Wal-Mart was given a $992,000 fine and Circuit City Stores Inc. was handed a $712,000 fine. Target, Best Buy, CompUSA Inc., which is a division of Systemax Inc., and Fry's Electronics Inc. were assessed fines between $168,000 to $384,000.

Best Buy said it was "extremely disappointed" by the FCC's action to what it called a "relatively small number of instances."

"Best Buy voluntarily pulled all analog-only tuner products from our stores on Oct. 1, 2007, in a proactive effort to prevent confusion and to help jump start consumer awareness," the company said in an e-mailed statement.

The company said it did not believe it violated the FCC rule "in any willful or repeated manner."

Wal-Mart did not immediately comment, while a message to Sears was not returned.

The FCC says it has inspected 2,272 retail stores and issued 349 citations, or warnings, to retailers for failing to comply with the labeling requirement.

The FCC also fined two companies - Syntax-Brillian Corp. and Precor Inc. - a combined $1.6 million for violating another digital TV rule for manufacturing, importing or shipping any device that only contains an analog tuner. The agency mandated that all new TVs must include digital tuners as of March 1, 2007.

Additionally, the agency fined Polaroid Corp. and Proview Technology Inc. nearly $1.1 million combined for failing to ensure their equipment with a V-chip technology can "respond to changes in the content advisory rating system."

All the companies have 30 days to appeal the fines.