Federal Communications Commission FCC 07-191
Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of
Funai Corporation, Inc.
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File No. EB-07-SE-259
NAL/Acct. No. 200832100005
FRN No. 0017000423
NOTICE OF APPARENT LIABILITY FOR FORFEITURE
Adopted:   October 31, 2007  Released: November 1, 2007
By the Commission:
I. INTRODUCTION
1. In this Notice of Apparent Liability for Forfeiture (NAL), we find Funai Corporation,
Inc. (Funai) apparently liable for a forfeiture in the amount of seven million, seven hundred forty-five 
thousand, six hundred eight-seven dollars ($7,745,687) for its willful and repeated violations of Section 
330(c) of the Communications Act of 1934, as amended, (Act),1 and Section 15.120(d)(2) of the 
Commissions Rules (Rules).2 The apparent violations involve Funais interstate shipment, after March 
15, 2006, of digital television receivers that do not comply with the Commissions rules requiring that 
such receivers have the capability to receive program rating descriptors and block programs from viewing 
when the program rating meets pre-determined user requirements and to respond to changes in the 
program rating system.
II. BACKGROUND
2. Sections 303(x) and 330(c) of the Act were added by the Telecommunications Act of 
1996.3 Section 303(x) directs the Commission to prescribe rules requiring that television receivers 
shipped in interstate commerce or manufactured in the United States be equipped with a feature designed 
to enable viewers to block the display of all programs with a common rating.  Section 330(c) 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 1998.4  In 2004, the Commission adopted specific technical standards to implement 
  
1 47 U.S.C.  330(c).
2 47 C.F.R.  15.120(d)(2). 
3 See Pub. L. No. 104-104, 110 Stat. 56 (1996).  
4 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) (V-Chip Report and Order).  The rule adopted in 1998 provided that digital television receivers 
shall react in a similar manner as analog televisions when programmed to block specific rating categories, but did 
not specify technical standards to achieve this objective.  Id. at 11258-59  28-29.
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V-Chip functionality for DTV receivers (V-Chip technology requirements).5  The DTV V-Chip 
technology requirements provide that, effective March 15, 2006, digital television receivers with picture 
screens 13 inches or greater (covered television receivers) 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.6 Specifically, Section 15.120(d)(2) provides that:
Digital television receivers shall react in a similar manner as analog televisions when 
programmed to block specific rating categories.  Effective March 15, 2006, digital 
television receivers will receive program rating descriptors transmitted pursuant to 
industry standard EIA/CEA-766-A U.S. and Canadian Region Rating Tables (RRT) and 
Content Advisory Descriptors for Transport of Content Advisory Information using 
ATSC A/65-A Program and System Information Protocol (PSIP), 2001 (incorporated by 
reference, see  15.38).  Blocking of programs shall occur when a program rating is 
received that meets the pre-determined user requirements.  Digital television receivers 
shall be able to respond to changes in the content advisory rating system.  
To account for manufacturers product development cycles, the Commission allowed an 18-month 
transition period for implementation of the DTV V-Chip technology requirements.7
3. The V-Chip technology requirements implement Congresss determination, in the 
Telecommunications Act of 1996, that parents should be provided with timely information about the 
nature of upcoming video programming and with the technological tools that allow them easily to block 
violent, sexual, or other programming that they consider harmful to their children.8 This determination 
was based on Congresss finding that television broadcast and cable programming have established a 
uniquely pervasive presence in the lives of American children.9  Further, Congress found that 
empowering parents to control the presence and influence of television in their childrens lives was a 
compelling government interest.10  Finally, Congress concluded that requiring television receiver 
manufacturers to include V-Chip technology in their products is a nonintrusive and narrowly tailored 
means of achieving that compelling government interest.11   
4. In July 2007, the Enforcement Bureau (Bureau) received a complaint alleging that
Funai was shipping in interstate commerce covered television receivers that did not include the required 
V-Chip technology.  On August 7, 2007, the Bureau issued a letter of inquiry (LOI) to Funai.12 Funai 
  
5 In the Matter of Second Periodic Review of the Commissions Rules and Policies Affecting the Conversion to 
Digital Television, Report and Order, 19 FCC Rcd 18279 (2004) (Second DTV Periodic Review Report and 
Order).  The V-Chip technology requirements also apply to devices sold without an accompanying display device.  
Id. at 18348 (Similar to our requirements for closed caption capabilities in digital television receivers, the rules will 
also be applicable to DTV tuners which are sold without an associated display device.).
6 Id. at 18347-49  155-59.  
7 Id. at 18348-49  159.
8 V-Chip Report and Order, 13 FCC Rcd at 11248  2.
9 Pub. L. No. 104-104, 110 Stat. 56 (1996).  
10 Id.
11 Id.
12 See Letter from Kathryn S. Berthot, Chief, Spectrum Enforcement Division, Enforcement Bureau to Funai 
Corporation (August 7, 2007) (LOI).
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filed a response to the LOI on September 7, 2007.13 Funai requested confidentiality of portions of its LOI 
response and that request remains pending.  Accordingly, portions of Funais LOI response are discussed 
in an Appendix hereto, and we are treating the Appendix as confidential at this time.  
III. DISCUSSION
A. Funai Apparently Shipped Interstate Digital Television Receivers In Violation of 
Section 330(c) of the Act and Section 15.120(d)(2) of the Rules
5. Based on our review of Funais LOI response, we find that the company apparently 
willfully and repeatedly shipped in interstate commerce covered television receivers that did not comply 
with the DTV V-Chip technology requirements in apparent violation of Section 330(c) of the Act and 
Section 15.120(d)(2) of the Rules.  Specifically, we find that, after the March 15, 2006 deadline, Funai 
shipped in interstate commerce digital television receivers that are not capable of receiving any program 
rating descriptors and blocking programs from viewing when the program rating meets pre-determined 
user requirements.  Additionally, we find that these same digital television receivers were not capable of 
responding to changes in the content advisory rating system as further required by Section 
15.120(d)(2).14 Funai admits to these facts.
B. Proposed Forfeiture
6. Based on the analysis set forth below, we conclude that Funai is apparently liable for a 
forfeiture in the amount of $7,745,687 for willfully and repeatedly shipping in interstate commerce
television receivers that do not comply with the DTV V-Chip technology requirements in violation of 
Section 330(c) of the Act and Section 15.120(d)(2) of the Rules.
7. Under Section 503(b)(1)(B) of the Act, any person who is determined by the Commission 
to have willfully or repeatedly failed to comply with any provision of the Act or any rule, regulation, or 
order issued by the Commission shall be liable to the United States for a forfeiture penalty.15 To impose 
such a forfeiture penalty, the Commission must issue a notice of apparent liability and the person against 
whom such notice has been issued must have an opportunity to show, in writing, why no such forfeiture 
penalty should be imposed.16 The Commission will then issue a forfeiture if it finds by a preponderance 
of the evidence that the person has violated the Act or a Commission rule.17  We conclude under this 
standard that Funai is apparently liable for forfeiture for its apparent willful and repeated violations of 
Section 330(c) of the Act and Section 15.120(d)(2) of the Rules.
8. Section 503(b)(6) of the Act bars the Commission from proposing a forfeiture for 
violations that occurred more than a year prior to the issuance of a NAL.18 Section 503(b)(6) does not, 
however, bar the Commission from assessing whether Funais conduct prior to that time period 
apparently violated the rules and from considering such conduct in determining the appropriate forfeiture 
  
13 See Letter from Yoshikazu Uemura, Executive Vice President, Funai Corporation to Brett Greenwalt, Spectrum 
Enforcement Division, Enforcement Bureau (September 7, 2007) (LOI Response).
14 47 C.F.R.  15.120(d)(2).
15 47 U.S.C.  503(b)(1)(B); 47 C.F.R.  1.80(a)(1).  
16 47 U.S.C.  503(b); 47 C.F.R.  1.80(f). 
17 See, e.g., SBC Communications, Inc., Forfeiture Order, 17 FCC Rcd 7589, 7591  4 (2002).  
18 47 U.S.C.  503(b)(6).  
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amount for violations that occurred within the one-year statutory period.19 Thus, while we may consider 
that Funais prior conduct violated the rules, the forfeiture amount we propose herein relates to Funais 
apparent violations that have occurred within the past year.  Funai shipped in interstate commerce a 
number of digital television receivers that do not comply with the V-Chip technology requirements more 
than one year prior to the date of this NAL. The non-compliant receivers represented by these interstate 
shipments are beyond the applicable one-year statute of limitations and not subject to forfeiture.20  
Accordingly, the forfeiture we propose relates only to the non-compliant digital television receivers 
shipped in interstate commerce within the statute of limitations.
9. Under Section 503(b)(2)(D) of the Act,21 we may assess an entity that is neither a 
common carrier, broadcast licensee or cable operator a forfeiture of up to $11,000 for each violation or 
each day of a continuing violation, up to a statutory maximum forfeiture of $97,500 for any single 
continuing violation.  In exercising such authority, we are required to take into account the nature, 
circumstances, extent, and gravity of the violation and, with respect to the violator, the degree of 
culpability, any history of prior offenses, ability to pay, and such other matters as justice may require.22
10. The Commissions Forfeiture Policy Statement23 and Section 1.80 of the Rules do not 
establish a specific base forfeiture for violation of the DTV V-Chip technology requirements.  The 
Commission has substantial discretion, however, in proposing forfeitures.24 We may apply the base 
forfeiture amounts described in the Forfeiture Policy Statement and our rules, or we may depart from 
them altogether as the circumstances demand.  
  
19 See 47 U.S.C.  503(b)(2)(E), 47 C.F.R.  1.80(b)(4); see also Behringer USA, Inc., Notice of Apparent Liability 
for Forfeiture and Order, 21 FCC Rcd 1820, 1827-28  22 (2006), forfeiture ordered, 22 FCC Rcd 10451 (2007); 
Globcom, Inc. d/b/a Globcom Global Communications, Notice of Apparent Liability for Forfeiture, 18 FCC Rcd 
19893, 19903  23 (2003), forfeiture ordered, 21 FCC Rcd 4710 (2006) (Globcom); Roadrunner Transportation, 
Inc., Forfeiture Order, 15 FCC Rcd 9669, 9671-72  8 (2000); Cate Communications Corp., Memorandum Opinion 
and Order, 60 RR 2d 1386, 1388  6 (1986); Eastern Broadcasting Corp., Memorandum Opinion and Order, 10 
FCC 2d 37, 37-38  3 (1967) recon. denied, 11 FCC 2d 193, 195  6 (1967).
20 47 U.S.C.  503(b)(6)(B).
21 47 U.S.C.  503(b)(2)(D).  The Commission twice amended Section 1.80(b)(3) of the Rules, 47 C.F.R.  
1.80(b)(3), to increase the maximum forfeiture amounts, in accordance with the inflation adjustment requirements 
contained in the Debt Collection Improvement Act of 1996, 28 U.S.C.  2461.  See Amendment of Section 1.80 of 
the Commissions Rules and Adjustment of Forfeiture Maxima to Reflect Inflation, Order, 15 FCC Rcd 18221 (2000) 
(adjusting the maximum statutory amounts from $10,000/$75,000 to $11,000/$87,500); Amendment of Section 1.80 
of the Commissions Rules and Adjustment of Forfeiture Maxima to Reflect Inflation, Order, 19 FCC Rcd 10945 
(2004) (adjusting the maximum statutory amounts from $11,000/$87,500 to $11,000/$97,500).
22 47 U.S.C.  503(b)(2)(E).  See also 47 C.F.R.  1.80(b)(4), Note to paragraph (b)(4): Section II. Adjustment 
Criteria for Section 503 Forfeitures.
23 See The Commissions Forfeiture Policy Statement and Amendment of Section 1.80 of the Rules to Incorporate 
the Forfeiture Guidelines, Report and Order, 12 FCC Rcd 17087, 17115 (1997), recon. denied, 15 FCC Rcd 303 
(1999) (Forfeiture Policy Statement).
24 See, e.g., InPhonic, Inc., Order of Forfeiture and Further Notice of Apparent Liability, 22 FCC Rcd 8689, 8699  
24 (2007); Globcom, 21 FCC Rcd at 4723-24  34.  We may use the base forfeiture amounts described in the 
Forfeiture Policy Statement and our rules, or we may depart from them altogether if the circumstances demand it.  
See 47 C.F.R. 1.80(b)(4) (The Commission and its staff may use these guidelines in particular cases [, and] retain 
the discretion to issue a higher or lower forfeiture than provided in the guidelines, to issue no forfeiture at all, or to 
apply alternative or additional sanctions as permitted by the statute.) (emphasis added).   
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11. The DTV V-Chip technology requirements promote the compelling government interest
of providing parents with the capability of blocking the display of violent, sexual, or other programming 
they believe is harmful to their children.25  We conclude that cases involving the failure to include any 
sort of V-Chip blocking technology are more egregious, in general, than many other types of equipment 
marketing cases that come before us.26  In such cases, therefore, we conclude that applying a proposed 
forfeiture on a per model basis, as we have in other more routine equipment marketing cases, would result 
in forfeiture amounts that are not commensurate with the seriousness of the violation.27
12. In the Regent NAL and the Syntax-Brillian NAL, we determined that, in cases involving 
the interstate shipping or importation of television receivers that did not comply with the DTV tuner 
requirements, we will propose a forfeiture based on each unit shipped or imported within the statute of 
limitations, regardless of the number of models shipped or imported.28 This approach, we noted, gets to 
the root of the apparent violation  non-compliant televisions in the hands of American consumers.29  
Furthermore, to reflect the increasing seriousness of the violation as the number of non-compliant units 
shipped or imported rises, we concluded that we will propose forfeitures on a tier-by-tier basis, applying 
an escalating per-unit forfeiture amount separately to each successive tier.30  
13. In Syntax Brillian and Regent, we applied the following tiers and per-unit penalties for 
violation of our DTV tuner requirements: 
0-1000 units:  $50 per unit
1001-2500 units:  $75 per unit
2501-5000 units:  $100 per unit
5001-10,000 units:  $125 per unit
10,001-20,000 units:  $150 per unit
20,001-30,000 units:  $175 per unit
30,001-40,000 units:  $200 per unit
40,001-50,000 units:  $225 per unit
50,001+ units:  $250 per unit31
14. We propose a similar approach for violations of our DTV V-Chip technology 
requirements involving the interstate shipment of receivers that are incapable of receiving program rating 
  
25 Pub. L. No. 104-104, 110 Stat. 56 (1996).  See also Fox Television Stations, Inc. v. Federal Communications 
Commission, 489 F.3d 444, 466 (2d Cir. 2007) ([B]locking technologies such as the V-chip have empowered viewers 
to make their own choices about what they do, and do not, want to see on television.).
26 Syntax-Brillian Corporation, Notice of Apparent Liability for Forfeiture, 22 FCC Rcd 10530 (2007), response 
pending (Syntax-Brillian NAL); Regent U.S.A., Inc., Notice of Apparent Liability for Forfeiture, 22 FCC Rcd 
10520 (2007) (forfeiture paid) (Regent NAL).  
27 Syntax-Brillian NAL, 22 FCC Rcd 10530,at 10535-36  13-15 (concluding that applying a proposed forfeiture on 
a per-model basis for shipment of television receivers that were not compliant with the DTV tuner mandate would 
result in forfeiture amounts incommensurate with the seriousness of the violations); Regent NAL, 22 FCC Rcd 
10520,at 10525-26  13-15 (same).
28 Id.
29 Syntax-Brillian NAL, 22 FCC Rcd at 10535  14; Regent NAL , 22 FCC Rcd at 10525  14.
30 Syntax-Brillian NAL , 22 FCC Rcd at 10535-36  15; Regent NAL , 22 FCC Rcd at 10525-26  15.  
31 Syntax-Brillian NAL, 22 FCC Rcd at 10535  15; Regent NAL , 22 FCC Rcd at 10525  15.
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descriptors and blocking programs from viewing when the program rating meets pre-determined user 
requirements.  We recognize, however, that television receiving devices without digital tuners lack the 
ability to receive digital television broadcast signals altogether, whereas devices without V-Chip 
functionality deprive consumers of the important capability to block unwanted programming but may still 
receive digital television signals.  Accordingly, in this and similar cases we will impose a lower per unit 
forfeiture for each tier than in our DTV tuner cases.  Therefore, we establish the following tiers and per-
unit penalties for violations of the requirement that digital television receivers be capable of receiving
program rating descriptors transmitted pursuant to industry standard EIA/CEA-766-A:
1-1000 units:  $12.50 per unit
1001-2500 units:  $18.75 per unit
2501-5000 units:  $25 per unit
5001-10,000 units:  $31.25 per unit
10,001-20,000 units:  $37.50 per unit
20,001-30,000 units:  $43.75 per unit
30,001-40,000 units:  $50 per unit
40,001-50,000 units:  $56.25 per unit
50,001+ units:  $62.50 per unit.
We find that calculating forfeitures for the failure to include basic DTV V-Chip functionality using this 
per-unit, tiered approach is reasonable because it results in forfeiture amounts that reflect the 
egregiousness of the violations and will deter future misconduct.  
15. Due to Funais confidentiality request, we will not specify in the NAL the precise number 
of non-compliant units that Funai shipped interstate in apparent violation of our rules.  Based on the 
record in this case, however, Funais violations merit a large proposed forfeiture.  The regulatory 
requirements at issue have been in place in some form since 1998.  The Commission announced specific
technical standards to implement V-Chip functionality in digital television receivers in 2004 and gave 
manufacturers 18 months, consistent with the industrys design cycle for a television receiver model, to 
comply.32  For more than 16 months after the March 1, 2006 deadline, however, Funai continued to ship 
in interstate commerce large numbers of digital television receivers that did not comply with the V-Chip 
technology requirements.  These unlawful shipments were substantial both in terms of the number of non-
compliant models and the total number of non-compliant units.  For these reasons, and based on the 
tiered, per unit approach described above, we propose a forfeiture of $7,745,68733 for Funais willful and 
repeated interstate shipment of television receivers that do not comply with the DTV V-Chip technology
requirements in violation of Section 330(c) of the Act and Section 15.120(d)(2) of the Rules.
IV. ORDERING CLAUSES
16. Accordingly, IT IS ORDERED that, pursuant to Section 503(b) of the Act, and Section 
1.80 of the Rules, Funai Corporation Inc. is NOTIFIED of its APPARENT LIABILITY FOR A 
FORFEITURE in the amount of seven million, seven hundred forty-five thousand, six hundred eighty-
seven dollars ($7,745,687) for willful and repeated violations of Section 330(c) of the Act and Section 
15.120(d)(2) of the Rules.
  
32 Second DTV Periodic Review Report and Order, 19 FCC Rcd at 18348-49 159.  
33 For simplicitys sake, we have rounded the proposed forfeiture amount to the nearest dollar.
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17. IT IS FURTHER ORDERED that, pursuant to Section 1.80 of the Rules, within thirty 
days of the release date of this Notice of Apparent Liability for Forfeiture, Funai Corporation Inc. 
SHALL PAY the full amount of the proposed forfeiture or SHALL FILE a written statement seeking 
reduction or cancellation of the proposed forfeiture.
18. Payment of the forfeiture must be made by check or similar instrument, payable to the 
order of the Federal Communications Commission. The payment must include the NAL/Acct. No. and 
FRN No. referenced above.  Payment by check or money order may be mailed to Federal 
Communications Commission, P.O. Box 358340, Pittsburgh, PA 15251-8340. Payment by overnight 
mail may be sent to Mellon Bank/LB 358340, 500 Ross Street, Room 1540670, Pittsburgh, PA 15251.  
Payment by wire transfer may be made to ABA Number 043000261, receiving bank Mellon Bank, and 
account number 911-6106.
19. The response, if any, must be mailed to the Office of the Secretary, Federal 
Communications Commission, 445 12th Street, S.W., Washington, D.C. 20554, ATTN: Enforcement 
Bureau  Spectrum Enforcement Division, and must include the NAL/Acct. No. referenced in the caption.
20. The Commission will not consider reducing or canceling a forfeiture in response to a 
claim of inability to pay unless the petitioner submits:  (1) federal tax returns for the most recent three-
year period; (2) financial statements prepared according to generally accepted accounting practices; or (3) 
some other reliable and objective documentation that accurately reflects the petitioners current financial 
status.  Any claim of inability to pay must specifically identify the basis for the claim by reference to the 
financial documentation submitted.
21. Requests for payment of the full amount of the NAL under an installment plan should be 
sent to:  Associate Managing Director  Financial Operations, 445 12th Street, S.W., Room 1-A625, 
Washington, D.C. 20554.34
22. IT IS FURTHER ORDERED that a copy of this Notice of Apparent Liability for 
Forfeiture 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.  
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary
  
34 See 47 C.F.R.  1.1914.