As part of the nation's conversion to digital television, the FCC has mandated that receivers sold in the U.S. be capable of receiving DTV signals. The requirement is phased in, starting with imports and interstate shipments of screen sizes over 36 inches, followed by 25-36 inch sets a year later, and sub-25 inch screens a year after that. The FCC may have reasoned that the extra cost of the DTV circuitry would be less obvious in the big-screen products. It did express the hope that costs would come down as the smaller, more popular, smaller sizes came within the rule.

The importer in this case admitted to having imported or shipped a total of 72,487 noncompliant products. Of these, 22,069 came within the one-year statute of limitations. The FCC calculated the fine at $50 per unit for the first 1,000 units, $75 each for next 1,500, and so on, upward in steps of uneven size, to a maximum of $250 per unit above 50,000 (although this offender did not get that high). There is no explanation of where the numbers come from. The total works out to $2,899,575.

On the same day, another company was charged with importing or shipping 1,288 noncompliant TVs for a total of $63,650, using the same formula. The company argued the products were not consumer TVs, but monitors for commercial and educational customers. The FCC rejected the argument, in part because some of the products were sold to retailers.

The two orders are at the links below: