The Federal Communications Commission has proposed almost $4 million in fines to seven major retailers for "willfully and repeatedly" selling analog-only TV sets without labels that warn consumers that the devices may not work after February 17, 2009—the last day of analog broadcasting. The scofflaws include the Sears-Roebuck/K-Mart group, which received a fine of $1.096 million; Wal-Mart, hit with a $992,000 forfeit; and CompUSA, which took the lowest penalty at $168,000.

Ironically, some of these retail giants have repeatedly filed statements with the FCC assuring the agency that they take their digital transition (DTV) obligations with the utmost seriousness. Fry's, Circuit City, Best Buy, and Target also received fines, bringing the total up to $3,928,000. All seven retailers can appeal the decision.

It's the label, stupid

After February 17, 2009, all United States television stations must broadcast using digital signals, potentially turning millions of U.S. analog sets into useless pieces of furniture. Those currently with cable can continue using analog sets after the transition, but an estimated 19 million to 22 million U.S. households rely entirely on analog signals, and they'll need to purchase converters for their televisions to receive DTV broadcasts.

The FCC requires all TV retailers that still sell these analog only sets explain this situation by putting a "conspicuous" label on the device that says the following:

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.

Last summer, the FCC's Enforcement Bureau began inspecting appliance retailers across the United States, among them the Sears and K-Mart stores (the two retailers merged in late 2004), to make sure they complied with this rule. The agency issued repeated citations to both Sears and K-Mart for selling unlabeled analog-only TV sets, gave the companies a chance to respond to the charges, then inspected them again. The second inspection "once again observed in twenty-seven Kmart stores, the Sears Roebuck website, and sixteen Sears Roebuck stores, television receiving equipment with analog-only tuners on display without the required Consumer Alert labels," the FCC's Notice of Apparent Liability to Sears/K-Mart, issued on Thursday, concluded.

Promises, promises

As noted earlier, these fines come despite repeated assurances by retailers that the companies will make good on educating the public about the digital transition. In October of last year, Best Buy, Target, and Circuit City—all fined by the FCC on Thursday—filed similar statements with the FCC, assuring the agency that they would take a leadership role in DTV education.

"Best Buy will include educational items about the DTV Transition and the end of analog broadcasting in its in-store 'video loops' that are shown on the TVs displayed for sale," the big appliance retailer wrote to the FCC on October 16th. "Circuit City will include items on the DTV Transition and the end of analog broadcasting in its in-store 'video loops' that are shown on the TVs displayed for sale," the electronics seller wrote to the FCC on the same day.

But, as Ars has reported, US Pirg did its own survey of retailer DTV readiness earlier this year and found it dramatically wanting. The national consumer watchdog group's "secret shoppers," deployed across retail stores around the country, found that 81 percent of sales staff they spoke to provided inaccurate information about crucial DTV issues, like the converter boxes that make analog sets digital ready. Over a third of the sales reps that US Pirg shoppers spoke to also gave inaccurate information about the transition deadline (February 17th, 2009).

On the same day that the FCC announced the fines, Circuit City filed yet another statement with the agency outlining its improved DTV policies. The statement assures the Commission that Circuit City has begun an "expedited phase-out" of analog-only TV sets both in the retailers' stores and on its retail Web site.

The FCC issued also proposed penalties to several manufacturing firms for shipping analog-only television sets to retailers. Television maker Syntax-Brillian received a $1,266,100 fine for this, and another $11,000 for providing "material factual information that is incorrect without a reasonable basis for believing the material factual information was correct" during the agency's investigation of the problem. The manufacturer Precor received a $357,900 fine.