Best Purchase challenges FCC on analog TV labeling requirement
Posted by: in Companies Competitive StrategyFiled under: Competitive strategy, Best Buy (BBY)
Consumer electronics retailer Ideal Buy, Inc. (NYSE: BBY) didn’t really like the FCC’s idea that it label all analog Television sets with a warning label — something I posted on a month ago. In fact, the retailer is now challenging the FCC’s authority to require retailers to slap those “Warning: Analog TV” stickers on those retail shelf boxes.
The FCC seems to believe it will be Y2K all over again when the analog television frequencies are vacated next February for all those who receive Television signals via antenna. Standard issue for the federal government, I suppose. Ideal Buy not only doesn’t want to have even more labels and customer communication littering up its stores, but it argues that the fines levied by the FCC for the non-use of these stickers are invalid as well.
Best Purchase was fined $280,000 and Wal-Mart Stores, Inc. (NYSE: WMT) was fined $992,000 for failing to include these analog Television stickers on the appropriate products. Wal-Mart hadn’t decided what its plans were yet, but my guess if that it will unite with Ideal Purchase to present a large challenge to the FCC’s authority. Best Buy’s biggest argument was that retailers are not commission licensees by the FCC — so how can the FCC impose fines? There are quite a few more arguments being made by Best Buy that should hold up in a court of law easily if it gets to that.
One would think that the current FCC auctions of the about-to-be-abandoned analog TV airwaves would give enough cash back to the FCC’s coffers than stupid fines like this. Apparently not.
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