Rich Fiscus
14 May 2008 10:59
Last month the FCC issued nearly $4 billion dollars in fines to various retailers across the US for failing to label TVs without digital tuners. The labels are required by a rule adopted last May requiring retailers to label TVs with only analog (NTSC) tuners as incompatible with digital television (DTV) broadcasts. Starting in February of next year such TVs will require a converter box to receive over the air broadcasts.
Yesterday Circuit City filed papers with the agency claiming their fines, which total $712,000, should be thrown out because the FCC doesn't have any jurisdiction to enforce the rule. The company also alleges the agency acted improperly by not asking for public comment prior to setting the policy.
According to the filing, "Circuit City made extensive and good faith efforts to comply with this unprecedented regulation despite lack of notice or baseline for compliance." It also goes on to complain that errors were made by regulators in assessing the fines.
Assuming the company's claims are rejected by FCC officials, which seems very likely, the next logical step would be a lawsuit to have the rule invalidated in federal court. This wouldn't be completely unprecedented either. In 2005 a federal appeals court struck down the controversial broadcast flag, saying the FCC overstepped their authority by regulating how a signal could be used after being received by consumers.
Although this case doesn't deal with the signals themselves, it seems legitimate to question whether the FCC has any jurisdiction over retail labelling, an area of law typically associated with the Federal Trade Commision (FTC).