Paul Gluckman

In a much broader FCC crackdown than previously known, agents from at least 15 field and district offices began fanning out to CE stores throughout the country May 29 to check retailer compliance with the Commission’s new analog labeling order, documents posted on the FCC site show. The spot inspections have produced 150-200 citations since May 30 against stores and chain owners accused of failing to post “consumer alerts” with analog-only products since the Commission’s order took effect May 25.

The FCC was quick to enforce a May 25 order requiring retailers to post “consumer alerts” next to legacy analog- only TV products. The Commission released Thurs. copies of official citations sent this week to Best Buy, Circuit City, CompUSA, Kmart, RadioShack and Target, warning the 6 chains they're violating the order because their e-commerce sites don’t carry the alerts on products that require them.

Syntax-Brillian plans to appeal an FCC notice slapping the company with $2,899,575 in fines for “willful and repeated” violations of the Commission’s DTV tuner mandate, CEO Vincent Sollitto told us. Syntax-Brillian has until June 30 to file an appeal, which the company will base on statute of limitation grounds, Sollitto said. Sollitto wouldn’t be more specific about his company’s appeal, saying Syntax- Brillian’s arguments would become the basis of a federal suit if its appeal at the FCC is denied. In a separate notice, the FCC also cited Regent USA for DTV tuner mandate violations, but levied that company fines of only $63,650. Executives at Regent USA, which markets TVs under the Maxtent brand name, didn’t comment. In citing Syntax-Brillian and Regent USA as the first CE suppliers charged with DTV tuner mandate violations, the FCC put out strong warnings it would hit other violators hard in the pocketbook. “In cases involving the shipping or importation of non-compliant DTV tuners, 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,” the Commission said. Syntax-Brillian isn’t guilty of willful and repeated violations of the DTV tuner mandate, Sollitto said, again declining to spell out why. The company is confident it will win an appeal, he said. But even if it loses, the “final impact” to the company will be “reduced” through “indemnification” agreements it has with its suppliers, who will subsidize the cost of any FCC penalties, he said.

Lack of a DAB “statutory mandate” was among the “several reasons” the FCC decided not to impose a firm deadline for converting terrestrial radio stations to digital HD Radio, the Commission said in its DAB order finally released Thurs. after having been approved March 22 (CD March 23 p5).

June 1 (Fri.) was the first day retailers could begin applying to NTIA for DTV coupon program certification. Retailers have until March 2008 to apply. Most are expected to apply after Aug. 15, when NTIA is to pick a contractor to run the program. NTIA will publish consumer information early in 2008, including lists of certified retailers and coupon-eligible converter boxes (CECBs) by make and model, a spokesman said. The law requires NTIA to begin taking consumer coupon requests Jan. 1, 2008. NTIA won’t publish names of CE makers submitting CECB production samples and test data, the spokesman said.

It’s “disgraceful” that the NAB “is paying people” like former Attorney Gen. John Ashcroft to write letters to regulatory agencies urging that the XM-Sirius merger be rejected, Sirius CEO Mel Karmazin told the Lehman Bros. Worldwide Wireless Conference in N.Y. Thurs. “It’s what goes on and there’s nothing you can do about it,” Karmazin said. If it were up to him, “there shouldn’t be anybody speaking out about the merger because I think the regulatory agencies are the ones who should be dealing with it,” Karmazin said: “That’s what the FCC is for. That’s what the DoJ is for.” Satellite radio’s 14 million subscribers are “the biggest supporters” of the merger, he said. But in the face of the NAB’s aggressive opposition, “you've not heard us” take to the air urging subscribers to write their congressmen to say the merger’s a good idea, Karmazin said: “You could fault us for not doing that, for not marshaling our subscribers, and you should assume that something like that is something that could happen in the future.” NAB couldn’t be reached for comment at our deadline Thurs.

The Commerce Dept. rejected our Freedom of Information Act (FOIA) request for copies of companies’ proposals to NOAA for NTIA’s DTV coupon contract. An FOIA exemption bars agencies from releasing any proposal in a competitive bidding from a vendor unless incorporated by reference in a contract already in effect between that vendor and the agency, Commerce said. The exemption also bars releasing names of unsuccessful contract bidders, the agency said.

Sirius shares’ low price “is saying 2 things” about Wall Street perception of the company: Analysts don’t have “as good a sense of the future of Sirius” as the company does, and they believe a merger with XM “is not going to happen,” Sirius CEO Karmazin told shareholders last week. In his most pessimistic appraisal yet, Karmazin said the merger faces an “uphill battle” gaining govt. approval. That contrasts sharply with Karmazin’s statement when the merger was announced that the odds of approval were better than 50-50 (CD Feb 21 p1). In Sirius’s Q1 earnings call, Karmazin said XM and Sirius had said all along that the merger process would be “extensive,” and it’s moving ahead. Feb. 21, the trading day after the merger announcement, Sirius shares closed at $3.92. They closed at $2.92 Tues. “There are some people that follow this who are more expert about it than I am and say that the market is saying that there’s an 80% likelihood that the merger is not going to happen,” Karmazin said: “I can only tell you that the Justice Department has to say it’s anticompetitive, the FCC, it’s not in the public interest. I still believe this merger should be approved. The market is saying [otherwise]. I don’t know what else we can do. Time will tell.”

Few stores complied the first day with an FCC order to post warnings near analog TVs, VCRs and DVD recorders that they won’t work after the 2009 DTV deadline, according to our spot check in the N.Y. area Fri. The Commission won’t say for the record how it plans to enforce the requirement (CD April 26 Special Report).

CEA won’t push for an FCC rule requiring broadcasters to pass “active format description” data to keep “postage stamp"-format video images off widescreen DTV sets (CD May 22 p5), a spokesman told us. CEA thinks “the voluntary industry activity” promoting AFD’s wider use “should be permitted to continue unfettered by any government mandate at this time,” he said. AFD and bar data “are still in their formative stages and work to complete standardization is still under way,” he said: “It is premature to mandate AFD transmission until the industry has some experience with the technology and determines whether it should be widely adopted. Consumers demand the best possible quality television experience, and broadcasters and manufacturers are motivated to provide the optimum picture, which AFD intends to achieve. Cooperative testing and market forces should rule for now.” NAB declined to comment.