FCC to Circulate DTV Consumer Education Order Soon

Now there’s word that FCC Chairman Kevin Martin wants to circulate a DTV consumer education order. That raises the question of whether the Commission will again want to send Enforcement Bureau inspectors into retail stores to monitor compliance, as it did when it issued 262 citations this summer for violations of the analog-only labeling order (CD July 27 p1). Martin can’t comment on an order that hasn’t yet circulated, he told reporters Friday at a Rainbow/PUSH Coalition media conference in Washington.

Martin is expected to face questions about the rulemaking and possibly the order when he appears before the House Telecommunications Subcommittee at a hearing Wednesday morning. Subcommittee Chairman Edward Markey, D-Mass., and House Commerce Committee Chairman John Dingell, D-Mich., suggested the consumer education and employee training requirements for retailers and most of the other measures raised in the rulemaking, including whether to require broadcasters to air public service announcements about the DTV transition and coupon program. The NAB, hoping to forestall PSA rules from the commission, has scheduled a Monday briefing to announce a “comprehensive” DTV consumer education campaign involving broadcast networks and local TV stations.

The FCC expects that any retailer “requirements and enforcement efforts tied to the converter box coupon program will be developed in consultation” with the NTIA, the Commission said in its rulemaking notice. It asked: (1) What would be an appropriate employee training and consumer information plan? (2) Should NTIA and the FCC set “the elements of a legally sufficient plan"? (3) Would penalties for noncompliance “be appropriate in this area"? (4) If so, should they be based on failure to report a plan, to follow a reported plan, to set a sufficient plan, or none of these?

New York state’s Consumer Protection Board supports Markey’s and Dingell’s call for retail mandates and spot inspections, it told the Commission in its comments. The Board “also recommends that a meaningful civil penalty be imposed against entities that do not comply with any aspect of the transition,” it said. “The penalty may be assessed against the entity for failing to adequately train employees or notify customers.”

But the Commission’s “regulatory jurisdiction over retail practices is limited at best,” the CE Retailers Coalition told the FCC. “Without wavering from its legal position,” the CERC was “circumspect” when the Commission announced its analog-only labeling order and “refrained from challenging this regulation in court” in deference to its support for the FCC’s DTV “leadership role,” it said. The Commission also would be hard-pressed to prove it has regulatory authority over retail practices in the DTV coupon program, the CERC said. Congress “specifically delegated responsibility” for the coupon program to the NTIA, not to the FCC, the group said.

Seven retail chains got notices of apparent liability proposing $3 million in total fines from the commission during the summer, because it said they hadn’t properly labeled analog sets, VCRs and DVD recorders, even after FCC citations reminded them of the mandate (CED July 26 p2). The notices haven’t been made public because the Commission is negotiating consent decrees with the retailers to settle the allegations, Martin told us last month (CED Sept 27 p1). A consent decree would be important to retailers’ contention that the FCC has no authority to regulate merchants’ practices. That’s because a defendant signing a consent decree with the FCC typically must agree that the commission “has jurisdiction over it and the subject matters contained in” the agreement and the authority to adopt it. The defendant also agrees to make “a voluntary contribution” to the U.S. Treasury in the amount of the negotiated fine, “without further protest or recourse to a trial de novo.”

If the commission imposes DTV consumer education requirements on NTIA-certified retailers, it also will bear watching whether the rules dampen retailer participation in the voluntary coupon program. Retailers’ “involvement is crucial,” the IBM team running the coupon program told NTIA in an Aug. 1 contract proposal, according to documents released to Consumer Electronics Daily under the Freedom of Information Act (CED Oct 10 p1). Since participation in the program is “purely voluntary, our goal will be to make the process as painless and simple as possible for this major group of stakeholders, encouraging them to see the advantages of participating,” the proposal said.

IBM and its partners will mobilize a team of “acquisition specialists” who will visit and educate personnel at larger retailers and participate in major CE industry events like the National Retail Federation’s annual conference in January, the proposal said. Oddly, the proposal didn’t mention the CES in January. For CES, CEA is “in the process of putting a panel together on the coupon program, which would feature IBM as the lead panelist,” a spokesman said. “The panel would be geared toward retailers looking to understand the logistics of participating in the program. But the panel is still under development, including participants and timing.”

The IBM team “will develop a comprehensive set of retailer training materials for certified retailers on how to redeem coupons and troubleshoot problems,” the contract proposal said. It will prepare materials for three “broad segments” of retailers, it said. Larger CE retailers will get “train the trainer” materials, since the big chains already have told IBM they want to incorporate coupon program training into “their ongoing internal training processes,” it said.

“Simplified self-training” will be the crux of materials that smaller retailers get, it said. For very small merchants that don’t accept credit cards, “simple, graphically driven training materials” will be available that describe the “alternative coupon redemption process” by interactive phone, it said. The proposal said that the IBM team would be ready by Oct. 1 to begin accepting retailer certification applications, if the contract was awarded by Aug. 16, as it was. Retailers have until March 31 to apply under NTIA rules.