# Before the

# Federal Communications Commission

# Washington, D.C. 20554

+--------------------------------+-------+-----------------------------+
| In the Matter of               | )     | File No. EB-07-RK-005       |
|                                |       |                             |
| Variety Wholesalers, Inc.      | )     | Acct. No. 0832460004        |
|                                |       |                             |
| Henderson, NC                  | )     | FRN 0005489679              |
|                                |       |                             |
|                                | )     |                             |
|                                |       |                             |
|                                | )     |                             |
|                                |       |                             |
|                                | )     |                             |
+--------------------------------+-------+-----------------------------+

# ORDER

**Adopted:** June 10, 2008 **Released:** June 12, 2008

By the Enforcement Bureau:

1.  In this Order, we adopt the attached Consent Decree entered into
    between the Enforcement Bureau ("Bureau") and Variety Wholesalers,
    Inc. ("Variety"). The Consent Decree terminates an investigation by
    the Bureau against Variety for possible violations of Section
    15.117(k) of the Commission's Rules regarding the labeling of
    television receiving equipment that contains an analog broadcast
    television tuner but does not contain a digital broadcast television
    tuner.

2.  The Bureau and Variety 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 and terminating the investigation.

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 Variety 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 Section 4(i) of the
    Communications Act of 1934, as amended,[^1] and Sections 0.111 and
    0.311 of the Commission's Rules,[^2] the Consent Decree attached to
    this Order **IS ADOPTED**.

6.  **IT IS FURTHER ORDERED** that the above-captioned investigation
    **IS TERMINATED**.

7.  **IT IS FURTHER ORDERED** that Variety Wholesalers, Inc. 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 NAL/Account number in block number 23A (call
    sign/other ID), and enter the letters "FORF" in block number 24A
    (payment type code). Variety shall also send electronic notification
    on the date said payment is made to SCR-Response@fcc.gov.

8.  **IT IS FURTHER ORDERED** that Variety Wholesalers, Inc. will file
    reports with the Commission ninety days after the Effective Date and
    on July 9, 2009. Each report shall include a compliance certificate
    from an officer, as an agent of Variety, stating that the officer
    has personal knowledge that Variety 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 Kathryn S. Berthot, Chief, Spectrum Enforcement Division,
    Enforcement Bureau, Federal Communications Commission, 445 12th
    Street, S.W., Washington, D.C. 20554 and by e-mail at
    Kathy.Berthot@fcc.gov.

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 Variety Wholesalers, Inc., G. Templeton
    Blackburn, II, Sr. Vice President and General Counsel, 218 S.
    Garnett Street, Post Office Drawer 947, Henderson, NC 27536.

FEDERAL COMMUNICATIONS COMMISSION

Kris Anne Monteith

Chief, Enforcement Bureau

# Before the

# Federal Communications Commission

# Washington, D.C. 20554

+--------------------------------+-------+-----------------------------+
| In the Matter of               | )     | File No. EB-07-RK-005       |
|                                |       |                             |
| Variety Wholesalers, Inc.      | )     | Acct. No. 0832460004        |
|                                |       |                             |
| Henderson, NC                  | )     | FRN 0005489679              |
|                                |       |                             |
|                                | )     |                             |
|                                |       |                             |
|                                | )     |                             |
|                                |       |                             |
|                                | )     |                             |
|                                |       |                             |
|                                | )     |                             |
+--------------------------------+-------+-----------------------------+

**CONSENT DECREE**

The Enforcement Bureau ("Bureau") and Variety Wholesalers, Inc.
("Variety"), by their authorized representatives, hereby enter into this
Consent Decree for the purpose of terminating the Enforcement Bureau's
investigation into whether Variety violated the labeling requirements of
television receiving equipment containing an analog broadcast television
tuner but without a digital broadcast television tuner, as set forth in
Section 15.117(k) of the Commission's Rules ("Rules").

**I. DEFINITIONS**

1.  For the purposes of this Consent Decree, the following definitions
    shall apply:

```{=html}
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(a) "Act" means the Communications Act of 1934, as amended, 47 U.S.C.
    § 151 *et seq.*

(b) "Adopting Order" means an Order of the Bureau adopting the terms of
    this Consent Decree without change, addition, deletion, or
    modification.

(c) "Analog-only television receiving equipment" means television
    receiving equipment that contains an analog broadcast television
    tuner but does not contain a digital broadcast television ("DTV")
    tuner.

(d) "Bureau" means the Enforcement Bureau of the Federal Communications
    Commission.

(e) "Commission" and "FCC" mean the Federal Communications Commission
    and all of its bureaus and offices.

(f) "Citations" means the citations issued by Bureau or the Commission
    between May 29, 2007, and the Effective Date alleging violations by
    Variety of Section 15.117(k) of the Commission's Rules.

(g) "Effective Date" means the date on which the Commission releases the
    Adopting Order.

(h) "Investigation" means the investigation initiated by the Bureau
    regarding Variety's compliance through the Effective Date with
    Section 15.117(k) of the Commission's Rules regarding the labeling
    of television receiving equipment that contains an analog broadcast
    television tuner but does not contain a digital broadcast television
    ("DTV") tuner.[^3]

(i) "Parties" means Variety and the Commission.

(j) "Rules" means the Commission's regulations found in Title 47 of the
    Code of Federal Regulations.

(k) "Variety" means Variety Wholesalers, Inc. and its
    predecessors-in-interest and successors-in-interest.

**II. BACKGROUND**

2.  To ensure that consumers do not inadvertently buy analog-only
    television receiving equipment without understanding that such
    devices will not be capable of receiving over-the-air television
    reception of digital signals after analog broadcasting ends unless
    connected to a digital-to-analog converter or a digital subscription
    service, the Commission adopted rules requiring anyone that sells,
    offers for sale, or rents television receiving equipment that does
    not contain a DTV tuner to display a Consumer Alert at the point of
    sale.[^4] 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.[^5]

3.  Section 15.117(k)(3) of the Rules requires that the Consumer Alert
    contain the following language:

+-----------------------------------------------------------------------+
| **[CONSUMER ALERT]{.underline}**                                      |
|                                                                       |
| 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](http://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.

4.  After the rule became effective, the Bureau began inspecting stores
    throughout the country, as well as popular retailer websites, and
    observed many models of analog-only television receiving equipment
    on display without the required Consumer Alert labels. Beginning on
    or about May 29, 2007, the Bureau conducted inspections at multiple
    Variety stores. Based on those inspections, and relying on publicly
    available information, the Bureau issued Citations to Variety for
    alleged violations of Section 15.117(k) at its stores. After
    affording Variety a reasonable opportunity to respond to the first
    Citation, agents and investigators from the Enforcement Bureau
    inspected Variety stores in various states and observed, in stores,
    what appeared to them to be television receiving equipment with
    analog-only tuners on display apparently without the required
    Consumer Alert labels.

**III. TERMS OF AGREEMENT**

5.  **[Adopting Order]{.underline}.** The Parties agree that the
    provisions of this Consent Decree shall be subject to final approval
    by the Bureau by incorporation of such provisions by reference in
    the Adopting Order without change, addition, modification, or
    deletion.

6.  **[Jurisdiction]{.underline}.** Variety agrees that the Bureau has
    jurisdiction over it and the matters contained in this Consent
    Decree and has the authority to enter into and adopt this Consent
    Decree.

7.  **[Effective Date; Violations]{.underline}.** The Parties agree that
    this Consent Decree shall become effective on the date on which the
    Bureau 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 Bureau. Any violation of the Adopting Order or of
    the terms of this Consent Decree shall constitute a separate
    violation of a Bureau Order, entitling the Bureau to exercise any
    rights and remedies attendant to the enforcement of a Commission
    Order.

8.  **[Termination of Investigation]{.underline}.** In express reliance
    on the covenants and representations in this Consent Decree and to
    avoid further expenditure of public resources, the Bureau agrees to
    terminate the Investigation. In consideration for the termination of
    said Investigation, Variety agrees to the terms, conditions, and
    procedures contained herein. The Bureau further agrees that in the
    absence of new material evidence, the Bureau 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 Variety
    concerning the matters that were the subject of the Investigation.
    The Bureau 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 Variety with respect to Variety's basic
    qualifications, including its character qualifications, to hold
    Commission authorizations.

9.  **[Consumer Education Regarding the DTV Transition]{.underline}:**
    Variety agrees to implement the following measures to educate the
    public about the upcoming digital transition:

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A.  Within sixty (60) days of the Effective Date, Variety will place an
    adhesive label on every box containing an analog-only television
    containing the FCC approved text of the Consumer Alert together with
    a statement that information on the digital transition is available
    at [www.dtv.gov](http://www.dtv.gov/) and
    [www.dtv2009.gov](http://www.dtv2009.gov/).

B.  In fifty (50) percent of all print advertising featuring televisions
    between the Effective Date and February 17, 2009, Variety will
    include a reference to the February 17, 2009 DTV transition end date
    and refer to the FCC's DTV transition website
    ([www.dtv.gov](http://www.dtv.gov/)).

C.  For Rose's stores, a tradename of stores operated by Variety, within
    sixty (60) days of either the Effective Date or the date it receives
    a sample video from the Bureau, whichever is later, Variety will
    display a video announcement on the DTV transition and the National
    Telecommunications and Infrastructure Administration's
    Digital-to-Analog Converter Box Coupon Program on a continuous loop
    in stores with such video capabilities. \[The Bureau shall provide
    100 copies of the video to Variety for its stores.\]

D.  Within sixty (60) days of either the Effective Date or the date it
    receives an electronic copy of a sample tipsheet on the DTV
    transition from the Bureau, whichever is later, Variety shall print
    and stock such tipsheets adjacent to television displays in stores.
    In the event that the Commission or its designee notifies Variety
    that the tipsheet has been updated, Variety will use the revised
    tipsheet within 30 days of receipt

```{=html}
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```
10. **[Termination of Sales of Analog-Only Televisions]{.underline}.**
    Variety has not placed any orders for analog only televisions after
    February 5, 2008. Variety's stock of unsold analog-only televisions
    as of the Effective Date is less than 5,000 units and consists
    solely of refurbished televisions. Variety shall terminate all
    domestic retail sales of analog-only televisions no later than
    December 31, 2008. Beginning August 29, 2008, and on the last
    business day of each successive month, Variety shall notify Diane
    Law-Hsu, Regional Counsel, South Central Region, Enforcement Bureau,
    Federal Communications Commission, at SCR-Response@fcc.gov whether
    Variety continues to sell analog-only televisions. Beginning
    September 1, 2008, and continuing on the first business day of each
    successive month, Variety shall make a voluntary contribution to the
    United States Treasury in the amount of \$1,500 until Variety no
    longer sells analog-only televisions. Payment shall be made as
    described in Paragraph 13. Variety's audit staff will confirm
    compliance with this paragraph.

11. **[Compliance Report]{.underline}.** Variety will file a compliance
    report with the Commission within 90 days of the Effective Date and
    on February 17, 2009. The compliance report shall include a
    compliance certificate from an officer, as an agent of Variety,
    stating that the officer has personal knowledge that Variety 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. The
    compliance reports shall be submitted to Kathryn S. Berthot, Chief,
    Spectrum Enforcement Division, Enforcement Bureau, Federal
    Communications Commission, 445 12th Street, S.W., Washington, D.C.
    20554 and by e-mail at Kathy.Berthot@fcc.gov.

12. **[Termination Date]{.underline}.** Unless stated otherwise, the
    requirements of this Consent Decree will expire February 17, 2009.

13. **[Voluntary Contribution]{.underline}.** Variety agrees that it
    will make a voluntary contribution to the United States Treasury in
    the amount of thirty eight thousand dollars (\$38,000). This payment
    will be made within thirty (30) days after the Effective Date of the
    Adopting Order. Each payment 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 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.
    Payments 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). Variety
    shall also send electronic notification on the date said payment is
    made to Diane Law-Hsu at SCR-Response@fcc.gov.

14. **[Waivers]{.underline}.** Variety 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 Adopting Order, provided the Bureau
    issues the Adopting Order without change, addition, modification, or
    deletion. Variety 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 Variety nor the Commission shall contest the validity of the
    Consent Decree or the Adopting Order, and Variety shall waive any
    statutory right to a trial *de novo*. Variety hereby agrees to waive
    any claims it may otherwise have under the Equal Access to Justice
    Act, 5 U.S.C. § 504 and 47 C.F.R. § 1.1501 *et seq*., relating to
    the matters addressed in this Consent Decree.

15. **[Severability]{.underline}.** 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.

16. **[Subsequent Rule or Order]{.underline}.** 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 Variety does not expressly consent) that provision will be
    superseded by such Commission rule or Order.

17. **[Successors and Assigns]{.underline}.** Variety agrees that the
    provisions of this Consent Decree shall be binding on its
    successors, assigns, and transferees.

18. **[Final Settlement]{.underline}.** 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.

19. **[Modifications]{.underline}.** This Consent Decree cannot be
    modified without the advance written consent of both Parties.

20. **[Paragraph Headings]{.underline}.** 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.

21. **[Authorized Representative]{.underline}.** Each party represents
    and warrants to the other that it has full power and authority to
    enter into this Consent Decree.

22. **[Counterparts]{.underline}.** 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.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Kris Anne Monteith

Chief

Enforcement Bureau

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Date

**\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_**

Peter J. Hayes

Chief Operating Officer

Variety Wholesalers, Inc.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Date

# 

[^1]: 47 U.S.C. § 154(i).

[^2]: 47 C.F.R. §§ 0.111, 0.311.

[^3]: 47 C.F.R. 15.117(k).

[^4]: *Second Periodic Review of the Commission's Rules and Policies
    Affecting the Conversion To Digital Television*, Second Report and
    Order, 22 FCC Rcd 8776 (2007) ("*Second DTV Periodic Report and
    Order*").

[^5]: *Second Periodic Review in the Commission's Rules and Policies
    Affecting the Conversion to Digital Television,* 72 Fed. Reg.
    28894-01 (May 23, 2007).