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                                   Before the

                       Federal Communications Commission

                             Washington, D.C. 20554


                                 )                               
                                                                 
     In the Matter of            )                               
                                     File Number EB-07-RC-002    
     Sears Roebuck and Co.       )                               
                                     NAL/Acct. No. 200732200001  
     Kmart Corporation           )                               
                                     FRN # 0007050388            
     Hoffman Estates, Illinois   )                               
                                                                 
                                 )                               


                  NOTICE OF APPARENT LIABILITY FOR FORFEITURE

   Adopted: April 9, 2008 Released: April 10, 2008

   By the Commission:

   I. INTRODUCTION

    1. In this Notice of Apparent Liability for Forfeiture ("NAL"), we find
       that Sears Roebuck and Co. ("Sears Roebuck") and Kmart Corporation
       ("Kmart") (collectively "Sears") apparently willfully and repeatedly 
       violated Section 15.117(k)  of the Commission's Rules ("Rules") by
       failing to place the required Consumer Alert label immediately
       adjacent to and clearly associated with television receiving equipment
       that contains an analog broadcast television tuner but does not
       contain a digital broadcast television tuner (hereinafter "analog-only
       tuner") that it displayed or offered for sale or rent. We conclude,
       pursuant to Section 503(b) of the Communications Act of 1934, as
       amended ("Act"), that Sears is apparently liable for a forfeiture in
       the amount of one million ninety-six thousand dollars ($1,096,000).

   II. BACKGROUND

    2. Congress has established February 17, 2009 as the deadline for the end
       of analog transmissions for full power television stations. The
       Commission is statutorily obligated to promote the orderly transition
       to digital television, "a critical step in the evolution of broadcast
       television." As we stated previously, "[w]e are committed to ensuring
       the rapid completion of that transition in a way that delivers the
       greatest possible benefits to the viewing public." As part of that
       commitment and in light of the upcoming deadline, we recently
       announced that "it is necessary and appropriate to require retailers
       to provide consumers with information regarding this transition date
       at the point of sale." We reached this conclusion after determining
       that consumer electronics industry efforts had not adequately informed
       consumers how analog-only television equipment purchased now will
       function when the transition to digital broadcasting ends.

    3. To ensure that consumers do not inadvertently buy analog-only
       television equipment without understanding that such devices will not
       be capable of receiving off-the-air television reception of digital
       signals after analog broadcasting ends unless connected to a
       digital-to-analog converter or a digital subscription service, we
       adopted rules requiring anyone that sells, offers for sale, or rents
       television receiving equipment that does not contain a digital
       television ("DTV") tuner to display a Consumer Alert at the point of
       sale. This requirement also applies to the sale or rent of analog-only
       television receiving equipment via direct mail, catalog, or electronic
       means (e.g., the Internet). These requirements are contained in
       Section 15.117(k) of the Rules, which became effective on May 25,
       2007.

    4. Section 15.117(k)(3) of the Rules requires that the Consumer Alert
       contain the following language:


                                   CONSUMER ALERT                            
                                                                             
         This television receiver has only an analog broadcast tuner and     
         will require a converter box after February 17, 2009, to receive    
         over-the-air broadcasts with an antenna because of the Nation's     
         transition to digital broadcasting. Analog-only TVs should          
         continue to work as before with cable and satellite TV services,    
         gaming consoles, VCRs, DVD players, and similar products. For more  
         information, call the Federal Communications Commission at          
         1-888-225-5322 (TTY: 1-888-835-5322) or visit the Commission's      
         digital television website at: www.dtv.gov.                         


       The Consumer Alert must be in a size of type large enough to be clear,
       conspicuous and readily legible, consistent with the dimensions of the
       equipment and the label. The alert either must be printed on a
       transparent material and affixed to the screen, in a manner that is
       removable by the consumer and does not obscure the picture when
       displayed for sale, or displayed separately immediately adjacent to
       each television receiver offered for sale and clearly associated with
       the analog-only model to which it pertains. In the case of other
       analog-only video devices that do not include a display (e.g., VCRs,
       DVD players), the Consumer Alert must be in a prominent location on
       the device, such as on the top or front, or displayed separately
       immediately adjacent to and clearly associated with the analog-only
       model to which it pertains. To the extent that any persons display or
       offer for sale or rent via direct mail, catalog, or electronic means
       analog-only television receiving equipment, they must prominently
       display the Consumer Alert as part of all advertisements or
       descriptions of such television receiving equipment, in clear and
       conspicuous print, and in close proximity to any images or
       descriptions of such equipment.

         5. Immediately after the rule became effective, the Commission's
            Enforcement Bureau began inspecting hundreds of stores throughout
            the country, as well as dozens of popular retailer websites, and
            observed many models of analog-only television receiving
            equipment on display without the required Consumer Alert labels.
            On June 1, 2007, the Enforcement Bureau issued a Citation to
            Sears Roebuck for offering for sale television receiving
            equipment having an analog-only tuner without displaying the
            required Consumer Alert in close proximity. Between June 1, 2007
            and June 11, 2007, the Enforcement Bureau conducted inspections
            at numerous stores and, based on those inspections, issued
            additional  Citations to Sears Roebuck for violations at its
            stores. On June 7, 2007, the Enforcement Bureau issued a Citation
            to Sears Roebuck for offering for sale on its online retail
            outlet, www.sears.com, television receiving equipment having an
            analog-only tuner without displaying the required Consumer Alert
            in close proximity. On May 31, 2007, the Enforcement Bureau
            issued a Citation to Kmart for offering for sale television
            receiving equipment having an analog-only tuner without
            displaying the required Consumer Alert in close proximity.
            Between May 31, 2007 and June 11, 2007, the Enforcement Bureau
            conducted inspections at numerous stores and, based on those
            inspections, issued additional  Citations to Kmart for violations
            at its stores. On June 7, 2007, the Enforcement Bureau issued a
            Citation to Kmart for offering for sale on its online retail
            outlet, www.kmart.com, television receiving equipment having an
            analog-only tuner without displaying the required Consumer Alert
            in close proximity.  After affording Sears a reasonable
            opportunity to respond to the first Citations issued to Kmart and
            Sears Roebuck., agents and investigators from the Enforcement
            Bureau began inspecting numerous additional Sears Roebuck and
            Kmart stores on June 12, 2007, in various states and once again
            observed in twenty-seven Kmart stores, the Sears Roebuck website,
            and sixteen Sears Roebuck stores, television receiving equipment
            with analog-only tuners on display without the required Consumer
            Alert labels.

         6. Under Section 503(b)(1) of the Act, any person who is determined
            by the Commission to have willfully or repeatedly failed to
            comply with any provision of the Act or any rule, regulation, or
            order issued by the Commission shall be liable to the United
            States for a forfeiture penalty. Section 312(f)(1) of the Act
            defines willful as "the conscious and deliberate commission or
            omission of [any] act, irrespective of any intent to violate" the
            law. The legislative history to Section 312(f)(1) of the Act
            clarifies that this definition of willful applies to both
            Sections 312 and 503(b) of the Act and the Commission has so
            interpreted the term in imposing forfeitures pursuant to Section
            503(b). The Commission may also assess a forfeiture for
            violations that are merely repeated, and not willful.  "Repeated"
            means that the act was committed or omitted more than once, or
            lasts more than one day. To impose such a forfeiture penalty, the
            Commission must issue a notice of apparent liability and the
            person against whom the notice has been issued must have an
            opportunity to show, in writing, why no such forfeiture penalty
            should be imposed. The Commission will then issue a forfeiture if
            it finds by a preponderance of the evidence that the person has
            violated the Act or a Commission rule. As we set forth below, we
            conclude under this standard that Sears is apparently liable for
            forfeiture for its apparent willful and repeated violations of
            Section 15.117(k) of the Commission's rules.

        III. DISCUSSION

         7. Based on the evidence before us, we find that Sears apparently
            willfully and repeatedly violated Section 15.117(k) of the Rules
            by failing to display conspicuously and in close proximity to
            equipment with an analog-only tuner, in clear and conspicuous
            print, the required Consumer Alert label. Specifically, as
            detailed in Attachment B,  agents and investigators from the
            Enforcement Bureau observed a number of different models of
            television receiving equipment having only an analog-only tuner
            on display in twenty-seven Kmart stores, the Sears Roebuck
            website, and sixteen Sears Roebuck stores, without the required
            Consumer Alert labels. Kmart previously received twenty-three
            Citations and Sears Roebuck previously received twenty Citations
            for this same type of conduct prior to the agents' inspections.

         8. Under Section 503(b)(2)(D) of the Act, we may assess an entity
            that is neither a common carrier, broadcast licensee or cable
            operator a forfeiture of up to $11,000 for each violation or each
            day of a continuing violation, up to a statutory maximum
            forfeiture of $97,500 for any single continuing violation. In
            exercising such authority, we must take into account "the nature,
            circumstances, extent, and gravity of the violation and, with
            respect to the violator, the degree of culpability, any history
            of prior offenses, ability to pay, and such other matters as
            justice may require."

         9. The Commission's Forfeiture Policy Statement and Section 1.80 of
            the Rules do not establish a specific base forfeiture for
            violation of the analog-only tuner labeling requirements. In
            adopting the Consumer Alert labeling requirements, the Commission
            stated that "[a]ccurate communication of this impending change is
            a highly material disclosure for consumers contemplating the
            purchase of a television."  We also noted that it is a matter of
            public safety for consumers who rely on analog-only televisions
            to obtain critical emergency information.

        10. Similar issues arose regarding labeling requirements for wireless
            hearing aid-compatible handsets. In those cases, the Enforcement
            Bureau established a base forfeiture amount of $8,000 per handset
            model that failed to comply with the labeling requirements. The
            labeling requirements for wireless hearing aid-compatible
            handsets and the analog-only tuner labeling requirements both
            serve the important goal of ensuring that consumers have access
            to necessary information. In light of the similarities in these
            labeling requirements, we conclude that a $8,000 base forfeiture
            amount per unlabeled model or device in each store where Bureau
            agents and investigators observed a violation is appropriate for
            apparent violations of Section 15.117(k).

        11. We find that, beginning on June 12, 2007, as detailed in
            Attachment B, even after receiving the Citations warning of
            violations in its stores across the country,  numerous different
            models of equipment with an analog-only tuner were displayed in
            twenty-seven Kmart stores, the Sears Roebuck website, and sixteen
            Sears Roebuck stores without the required Consumer Alert label.
            As a result, Sears continued to market television receiving
            equipment to consumers without adequately warning that the
            equipment contained an analog-only television receiver. Those
            consumers may not learn of their equipment's limitations until
            the analog-only devices cease to receive over-the-air television
            signals, long after any period for returning the equipment has
            expired. This scenario is precisely the outcome that our rule was
            intended to prevent. Applying the analysis set forth above to the
            facts of this case, we conclude that Sears Roebuck is apparently
            liable for a  $320,000 base forfeiture and Kmart is apparently
            liable for a $776,000 base forfeiture.

        IV. ORDERING CLAUSES

        12. Accordingly, IT IS ORDERED that, pursuant to Section 503(b) of
            the Communications Act of 1934, as amended, and Section 1.80 of
            the Commission's Rules, Sears Roebuck and Co. is hereby NOTIFIED
            of this APPARENT LIABILITY FOR A FORFEITURE in the amount of
            three hundred twenty thousand dollars  ($320,000) for violations
            of Section 15.117(k) of the Rules.

        13. IT IS FURTHER ORDERED that, pursuant to Section 503(b) of the
            Communications Act of 1934, as amended, and Section 1.80 of the
            Commission's Rules, Kmart Corporation is hereby NOTIFIED of this
            APPARENT LIABILITY FOR A FORFEITURE in the amount of seven
            hundred seventy six thousand dollars  ($776,000) for violations
            of Section 15.117(k) of the Rules.

        14. IT IS FURTHER ORDERED that, pursuant to Section 1.80 of the
            Commission's Rules within thirty days of the release date of this
            Notice of Apparent Liability for Forfeiture, Sears Roebuck and
            Co. and Kmart Corporation SHALL PAY the full amount of their
            proposed forfeitures or SHALL FILE a written statement seeking
            reduction or cancellation of the proposed forfeiture.

        15. Payment of the forfeiture must be made by check or similar
            instrument, payable to the order of the Federal Communications
            Commission. The payment must include the NAL/Account Number and
            FRN Number referenced above. Payment by check or money order may
            be mailed to Federal Communications Commission, P.O. Box 979088,
            St. Louis, MO 63197-9000. Payment by overnight mail may be sent
            to U.S. Bank - Government Lockbox #979088, SL-MO-C2-GL, 1005
            Convention Plaza, St. Louis, MO 63101. Payment[s] by wire
            transfer may be made to ABA Number 021030004, receiving bank
            TREAS/NYC, and account number 27000001. For payment by credit
            card, an FCC Form 159 (Remittance Advice) must be submitted.
             When completing the FCC Form 159, enter the NAL/Account number
            in block number 23A (call sign/other ID), and enter the letters
            "FORF" in block number 24A (payment type code). Requests for full
            payment under an installment plan should be sent to:  Chief
            Financial Officer -- Financial Operations, 445 12th Street, S.W.,
            Room 1-A625, Washington, D.C.  20554.   Please contact the
            Financial Operations Group Help Desk at 1-877-480-3201 or Email:
            ARINQUIRIES@fcc.gov with any questions regarding payment
            procedures. 

        16. The response, if any, must be mailed to Federal Communications
            Commission, Enforcement Bureau, and must include the NAL/Acct.
            No. referenced in the caption.

        17. The Commission will not consider reducing or canceling a
            forfeiture in response to a claim of inability to pay unless the
            petitioner submits: (1) federal tax returns for the most recent
            three-year period; (2) financial statements prepared according to
            generally accepted accounting practices ("GAAP"); or (3) some
            other reliable and objective documentation that accurately
            reflects the petitioner's current financial status. Any claim of
            inability to pay must specifically identify the basis for the
            claim by reference to the financial documentation submitted.

        18. IT IS FURTHER ORDERED that a copy of this Notice of Apparent
            Liability for Forfeiture shall be sent by Certified Mail, Return
            Receipt Requested, and regular mail, to Mark D. Molay, Senior
            Counsel - Vendor Compliance, Sears Holdings Management
            Corporation, at  his address of record, and to David Hilliard,
            Wily Rein LLP, Counsel for Sears Roebuck and Co. and Kmart
            Corporation, at his address of record.

       FEDERAL COMMUNICATIONS COMMISSION

       Marlene H. Dortch

       Secretary

                                  Attachment A

                                   CITATIONS

       Sears, Roebuck & Co.


                Store #-                                        
                                  Citation No.   Release Date   
                Location                                        

               Tampa, FL          C20073270002   May 31, 2007   

               Miami, FL          C20073260004   May 31, 2007   

             San Diego, CA        C20073294008   June 1, 2007   

            #1685 Duluth, GA      C20073248004   June 1, 2007   

              Houston, TX         C20073254003   June 1, 2007   

          #1019 Pleasanton, CA    C20073296007   June 5, 2007   

               Tacoma, WA         C20073298013   June 5, 2007   

         #1354 Willow Grove, PA   C20073240011   June 6, 2007   

              Tukwila, WA         C20073298017   June 8, 2007   

             Anchorage, AK        C20073278003   June 8, 2007   

            Ellicot City, MD      C20073234007   June 8, 2007   

         #1834 North Wales, PA    C20073240019   June 11, 2007  

              Peabody, MA         C20073226005   June 11, 2007  

             Richardson, TX       C20073250013   June 11, 2007  

           #1248 Hayward, CA      C20073296014   June 12, 2007  

          #1874 Burlington, NJ    C20073240030   June 12, 2007  

          #1615 Chesapeake, VA    C20073264008   June 12, 2007  

           New Hyde Park, NY      C20073238020   June 14, 2007  

           Valley Stream, NY      C20073238024   June 14, 2007  

             www.sears.com        EB-07-SE-188   June 7, 2007   


       Kmart


                 Store #-                                          
                                    Citation No.    Release Date   
                 Location                                          

           #3187 Langhorne, PA      C200732440004   May 31, 2007   

          #12127601 New York, NY    C20073238013    May 31, 2007   

          #3117 Willow Grove, PA    C20073240005    June 1, 2007   

                Tampa, FL           C20073270006    June 1, 2007   

                Miami, FL           C20073260002    June 1, 2007   

           #3742 Chesapeake, VA     C20073264004    June 1, 2007   

            #4988 Norfolk, VA       C20073264003    June 1, 2007   

               Seattle, WA          C20073298010    June 4, 2007   

               Batavia, NY          C20073228001    June 4, 2007   

                Ocala, FL           C20073270008    June 4, 2007   

               LaHabra, CA          C20073290022    June 5, 2007   

           #3207 Farmington, MI     C20073236003    June 5, 2007   

           #3159 Farmington, MI     C20073236004    June 5, 2007   

           #4451 Doraville, GA      C20073248010    June 6, 2007   

                Depew, NY           C20073228004    June 7, 2007   

                Denver, CO          C20073280009    June 8, 2007   

              San Diego, CA         C20073294015    June 11, 2007  

               Kapolei, HI          C20073286005    June 11, 2007  

           #3077 Burlington, NJ     C20073240028    June 12, 2007  

         #3596 Pleasantiville, NJ   C20073240026    June 12, 2007  

             San Leandro, CA        C20073296018    June 15, 2007  

               Hayward, CA          C20073296017    June 15, 2007  

              www.kmart.com         EB-07-SE-181    June 7, 2007   


                                  Attachment B

                          PROPOSED FORFEITURE AMOUNTS

       Sears, Roebuck & Co.

       1. June 12, 2007, Sears Store # 1108, Temecula, CA.


         Manufacturer    Device   Model #        Forfeiture                  
                                                 Amount                      

         Sylvania        TV       6720FDG/F      $8,000                      

         Toshiba         TV       MD 20F51       $8,000                      

         Toshiba         TV       MD13Q42        $8,000                      

         Haier America   TV       HTN20R15       $8,000                      

         Audiovox        TV       VE-720         $8,000                      

         Sony            TV       ICF-DVD57TV    $8,000                      

         Sony            TV       ICF- CD555TV   $8,000                      

         Toshiba         TV       14AF45         $8,000                      

                                                 SUBTOTAL           $64,000  


         2. June 12, 2007, Sears Store, Wasilla, AK


         Manufacturer   Device       Model #     Forfeiture                  
                                                 Amount                      

         Sony           TV           KV20FS120   $8,000                      

         Sylvania       TV           6424TFS     $8,000                      

         Sylvania       TV           6419TG      $8,000                      

         Sylvania       TV           6413TG      $8,000                      

         Toshiba        TV           14AF45      $8,000                      

         Sony           DVD/VCR      RDR-VX530   $8,000                      

         Samsung        DVD/VCR      DVD-R330    $8,000                      

         Toshiba        TV/DVD       MD13Q42     $8,000                      

         Sylvania       TV/VCR       6313CE      $8,000                      

         Sylvania       TV/DVD/VCR   6720FDG     $8,000                      

                                                 SUBTOTAL           $80,000  


         3. June 12, 2007, Sears Store # 1098, Clovis, CA


         Manufacturer   Device   Model #     Forfeiture Amount           

         Sony           TV       KV20FS120   $8,000                      

                                             SUBTOTAL            $8,000  


         4. June 12, 2007, Sears Store, Cheyenne, WY


         Manufacturer   Device         Model #    Forfeiture                 
                                                  Amount                     

         Panasonic      DVD Recorder   DMR-ES15   $8,000                     

                                                  SUBTOTAL           $8,000  


         5. June 13, 2007, Sears Store, Baltimore, MD


         Manufacturer      Device   Model #    Forfeiture Amount           

         Disney Princess   13" TV   DT1350-P   $8,000                      

                                               SUBTOTAL            $8,000  


         6. June 13, 2007, Sears Store #1224, Harrisburg, PA


         Manufacturer   Device       Model #   Forfeiture Amount           

         Sylvania       TV/DVD/VCR   6724FDG   $8,000                      

                                               SUBTOTAL            $8,000  


         7. June 13, 2007, Sears Store #1646, Charlotte, NC


         Manufacturer   Device         Model #     Forfeiture                
                                                   Amount                    

         Samsung        DVD Recorder   DVD-VR330   $8,000                    

                                                   SUBTOTAL          $8,000  


         8. June 14, 2007, Sears Store #1057, Dallas, TX


         Manufacturer   Device           Model #       Forfeiture            
                                                       Amount                

         Sony           DVD/VCR combo    SLV-D360P     $8,000                

         Samsung        DVD/VCR combo    DVD-VR330     $8,000                

                        LCD HDTV                                             
         Philips        monitor with     23PF5320/28   $8,000                
                        NTSC tuner                                           

                                                       SUBTOTAL     $24,000  


         9. June 14, 2007, Sears Store, St. Peters, MO


         Manufacturer   Device     Model #       Forfeiture Amount           

         Philips        LCD HDTV   23PF5320/28   $8,000                      
                        MONITOR                                              

                                                 SUBTOTAL            $8,000  


        10. June 14, 2007, Sears Store #3231, Escanaba, MI


         Manufacturer   Device       Model #       Forfeiture                
                                                   Amount                    

         Philips        23" LCD TV   23PF5320/28   $8,000                    

                                                   SUBTOTAL          $8,000  


        11. June 14, 2007, Sears Store # 6909, San Bruno, CA


         Manufacturer   Device   Model #    Forfeiture Amount            

         Panasonic      DVDR     DMR-ES15   $8,000                       

         Sylvania       TV       6424TFS    $8,000                       

                                            SUBTOTAL            $16,000  


        12. June 14, 2007, Store #1335 Greensboro, NC


         Manufacturer   Device   Model #   Forfeiture Amount            

         Sylvania       TV set   6313CG    $8,000                       

         Sylvania       TV set   6513DG    $8,000                       

                                           SUBTOTAL            $16,000  


        13. June 15, 2007, Sears Store #1728, Tuscon, AZ


         Manufacturer               Device   Model #    Forfeiture           
                                                        Amount               

         Memcorp - Disney           TV       DT1350-C   $8,000               
         Electronics                                                         

                                                        SUBTOTAL     $8,000  


        14. July 2, 2007, Sears Store #2446, Mission, KS


         Manufacturer   Device       Model #   Forfeiture Amount           

         Sylvania       TV/DVD/VCR   6720FDG   $8,000                      

                                               SUBTOTAL            $8,000  


        15. July 2, 2007, Sears Store #2398, Longmont, CO


         Manufacturer   Device    Model #    Forfeiture Amount            

         Toshiba        DVD/VCR   D-VR5SU    $8,000                       

         Panasonic      DVD       DMR-ES15   $8,000                       

                                             SUBTOTAL            $16,000  


        16. July 11, 2007, Sears Store # 1485, Orange Park, FL


         Manufacturer   Device           Model #   Forfeiture                
                                                   Amount                    

         Sylvania       19" TV           6419TG    $8,000                    

         Toshiba        24" TV/DVD/VCR   MW24F52   $8,000                    

                                                   SUBTOTAL         $16,000  


        17. June 14, 2007, Sears website, www.sears.com


         Manufacturer   Device   Model #       Forfeiture Amount            

         Philips        TV       23PF5320/28   $8,000                       

         Spectra        TV       507-BWR       $8,000                       

                                               SUBTOTAL            $16,000  


       Sears, Roebuck, & Co. Total Proposed Forfeiture: $320,000

       Kmart

         1. June 12, 2007, Kmart Store #9394, Fajardo, PR


         Manufacturer   Device    Model #     Forfeiture Amount            

           Memorex      DVD/VCR   MVD 4543    $8,000                       

           Sylvania     DVD/VCR   DVC 841G    $8,000                       

             RCA        DVD/VCR   DCR 6355N   $8,000                       

           Toshiba      DVD/VCR    SD-V394    $8,000                       

             Sony       DVD/VCR   SLV-D370P   $8,000                       

                                              SUBTOTAL            $40,000  


         2. June 12, 2007, Kmart Store, 15909 Manchester Road, Ballwin, MO


         Manufacturer   Device    Model #    Forfeiture Amount            

         Memorex        DVD/VCR   MVD4543    $8,000                       

         Magnavox       TV        20MF605T   $8,000                       

         Sylvania       LCD TV    6620LCT    $8,000                       

         Toshiba        TV/DVD    MD20F52    $8,000                       

                                             SUBTOTAL            $32,000  


         3. June 12, 2007, Kmart Store, 6650 Manchester Street, St. Louis, MO


         Manufacturer   Device    Model #     Forfeiture Amount            

         Sony           DVD/VCR   SLV-D370P   $8,000                       

         RCA            TV        20F512T     $8,000                       

                                              SUBTOTAL            $16,000  


         4. June 12, 2007, Kmart Store #3833, Iron Mountain, MI


         Manufacturer   Device   Model #       Forfeiture Amount            

         DN Princess    13" TV   DT 1350-P     $8,000                       

         Pooh           13" TV   DT 1350-RWP   $8,000                       

                                               SUBTOTAL            $16,000  


         5. June 12, 2007, Kmart Store, Clovis, CA


         Manufacturer   Device   Model #         Forfeiture                  
                                                 Amount                      

         Sylvania       TV       C6419TE         $8,000                      

         Memorex        TV       MT0550 /        $8,000                      
                                 MT0500                                      

         Sharp          TV       LC15SH          $8,000                      

                                                 SUBTOTAL           $24,000  


         6. June 12, 2007, Kmart Store #4244, Knoxville, TN


         Manufacturer   Device   Model #   Forfeiture Amount            

         Sylvania       TV/DVD   6520FDG   $8,000                       

         Sylvania       TV/DVD   6513DG    $8,000                       

         Sylvania       TV       6420FB    $8,000                       

                                           SUBTOTAL            $24,000  


         7. June 12, 2007, Kmart Store, Cheyenne, WY


        Manufacturer Device                        Model # Forfeiture        
                                                           Amount            

                     DVD/CD/VCD/MP3/Photo CD                                 
        Memorex      Player and Video Cassette     MVD4543 $8,000            
                     Recorder                                                

                                                           SUBTOTAL   $8,000 


         8. June 13, 2007, Kmart Store #4137, Charlotte, NC


         Manufacturer   Device   Model #   Forfeiture Amount            

         Sylvania       TV set   6427TF    $8,000                       

         Sylvania       TV set   6432TF    $8,000                       

         Sylvania       TV set   6424TFS   $8,000                       

                                           SUBTOTAL            $24,000  


         9. June 13, 2007, Kmart Store, 5100 Sinclair Lane, Baltimore, MD


         Manufacturer      Device       Model #    Forfeiture                
                                                   Amount                    

         Disney Princess   13" Color    DT1350-P   $8,000                    
                           TV                                                

         RCA               20" Stereo   20V500T    $8,000                    
                           TV                                                

         Sylvania          13" TV/DVD   6513DG     $8,000                    

                                                   SUBTOTAL         $24,000  


        10. June 13, 2007, Kmart Store #3028, Feasterville, PA


         Manufacturer   Device    Model #       Forfeiture Amount            

         Memorex        DVD/VCR   MVD4543       $8,000                       

         Disney         TV        DT1350-P      $8,000                       

         Magnavox       TV        14MS2331/17   $8,000                       

         RCA            TV        13V420T       $8,000                       

         Sylvania       TV        6419TG        $8,000                       

         Olevia         TV        LT23HVX       $8,000                       

                                                SUBTOTAL            $48,000  


        11. June 13, 2007, Kmart Store #4479, Harrisburg, PA


         Manufacturer   Device   Model #      Forfeiture Amount           

         Disney         TV       DT1350-RWP   $8,000                      

                                              SUBTOTAL            $8,000  


        12. June 13, 2007, Kmart Store, Casa Grande, AZ


         Manufacturer              Device   Model #    Forfeiture            
                                                       Amount                

         Magnavox                  TV       MS2331     $8,000                

         RCA                       TV       13V420T    $8,000                

         Memcorp (Disney           TV       DT1350-C   $8,000                
         Electronics)                                                        

                                                       SUBTOTAL     $24,000  


        13. June 13, 2007, Kmart Store (Baseline Road), Phoenix, AZ


         Manufacturer   Device   Model #   Forfeiture Amount           

         Sylvania       TV       6620LCT   $8,000                      

                                           SUBTOTAL            $8,000  


        14. June 14, 2007, Kmart Store #4248, Staten Island, NY


         Manufacturer   Device   Model #       Forfeiture Amount           

         Magnavox       TV       20MF605T/17   $8,000                      

                                               SUBTOTAL            $8,000  


        15. June 14, 2007, Kmart Store # 4308, Birmingham, AL


         Manufacturer   Device   Model #    Forfeiture Amount            

         Sylvania       TV       6413TG     $8,000                       

         Sylvania       TV/VCR   6313CE     $8,000                       

         Sylvania       DVR      DVR90DF    $8,000                       

         Sylvania       TV/DVD   6513DG     $8,000                       

         RCA            TV       13V420T    $8,000                       

         RCA            TV       24V511T    $8,000                       

         Magnavox       TV       14MS2331   $8,000                       

         Memorex        TV       MT0500     $8,000                       

                                            SUBTOTAL            $64,000  


        16. June 14, 2007, Kmart Store, Riverside, CA


         Manufacturer             Device    Model #    Forfeiture            
                                                       Amount                

         Sylvania                 TV        6313CD     $8,000                

         Maganavox                VCR/DVD   20MF605T   $8,000                

         Memcorp - Disney         TV        DT1350-P   $8,000                
         Electronics                                                         

         Memorex                  TV        MVD4543    $8,000                

                                                       SUBTOTAL     $32,000  


        17. June 14, 2007, Kmart Store #9065, Escanaba, MI


         Manufacturer   Device   Model #       Forfeiture Amount            

         DN Princess    13" TV   DT 1350-P     $8,000                       

         Pooh           13" TV   DT 1350-RWP   $8,000                       

                                               SUBTOTAL            $16,000  


        18. June 14, 2007, Kmart Store #3179, Orlando, FL


         Manufacturer     Device       Model #        Forfeiture             
                                                      Amount                 

         Sylvania         TV/DVD       6513DG         $8,000                 

         Memorex          TV/DVD/CD    MVD1402        $8,000                 

         Sylvania         TV           6424TF         $8,000                 

         Toshiba          TV/DVD       MD20F52        $8,000                 

         RCA              TV           13V420T        $8,000                 

         Magnavox         FLT Stereo   14MS2331       $8,000                 
                          TV                                                 

         Sylvania         TV           6419TG         $8,000                 

         Magnavox         TV           20MT133S       $8,000                 

         Sylvania         TV           6424TFS        $8,000                 

         RCA              TV           20V500T        $8,000                 

         Sylvania         TV           6413TG         $8,000                 

         RCA              TV           E13320         $8,000                 

         Disney Classic   TV           Princess       $8,000                 
         TV                            13-DT135OC                            

                                                      SUBTOTAL     $104,000  


        19. June 14, 2007, Kmart Store, San Mateo, CA


         Manufacturer     Device   Model #         Forfeiture                
                                                   Amount                    

         Memorex          TV       MT0550/MT0500   $8,000                    

         Disney/Memorex   TV       D1350 P         $8,000                    

         Magnavox         TV       20MS2331/17     $8,000                    

         Magnavox         TV       15MF605T        $8,000                    

                                                   SUBTOTAL         $32,000  


        20. June 15, 2007, Kmart Store, Sierra Vista, AZ


         Manufacturer              Device   Model #    Forfeiture            
                                                       Amount                

         Sylvania                  TV       6620LDT    $8,000                

         Magnavox                  TV       20MF500T   $8,000                

         Memcorp - Disney          TV       DT1350-C   $8,000                
         Electronics                                                         

                                                       SUBTOTAL     $24,000  


        21. June 15, 2007, Kmart Store #4844, San Juan, PR


         Manufacturer   Device    Model #    Forfeiture Amount            

           Sylvania       TV       6319CE    $8,000                       

          Symphonic       TV      SC724FDF   $8,000                       

           Sylvania     DVD/VCR   DVC 840F   $8,000                       

           Sylvania     DVD/VCR   DVC 841G   $8,000                       

           Memorex      DVD/VCR   MVD4543    $8,000                       

             RCA        DVD/VCR   DRC6355N   $8,000                       

                                             SUBTOTAL            $48,000  


        22. On July 5, 2007, Kmart Store # 4220, Kansas City, MO


         Manufacturer   Device   Model #    Forfeiture Amount            

         RCA            TV       20V500T    $8,000                       

         Magnavox       TV       20MT133S   $8,000                       

                                            SUBTOTAL            $16,000  


        23. July 9, 2007, Kmart Store #4427, Independence, MO


         Manufacturer   Device   Model #    Forfeiture Amount            

         RCA            TV       20F512T    $8,000                       

         RCA            TV       24V511T    $8,000                       

         Disney         TV       DT1350-P   $8,000                       

         Magnavox       TV       20MF500T   $8,000                       

                                            SUBTOTAL            $32,000  


        24. July 10, 2007, Kmart Store #9936, Independence, MO


         Manufacturer   Device    Model #     Forfeiture Amount            

         Sony           DVD/VCR   SLV-D370P   $8,000                       

         Sylvania       TV        6620LCT     $8,000                       

         RCA            TV        13V420T     $8,000                       

                                              SUBTOTAL            $24,000  


        25. July 10, 2007, Kmart Store # 4157, Kansas City, MO


         Manufacturer   Device   Model #    Forfeiture Amount            

         Sylvania       TV       6620LCT    $8,000                       

         Magnavox       TV       14MS2331   $8,000                       

         RCA            TV       20V500T    $8,000                       

         Sylvania       TV       6620LE     $8,000                       

         RCA            TV       E13320     $8,000                       

                                            SUBTOTAL            $40,000  


        26. July 12, 2007, Kmart Store, El Centro CA


         Manufacturer   Device    Model #    Forfeiture Amount            

         Sony           DVD/VCR   SLVD370P   $8,000                       

         RCA            DVD/VCR   DRC6355N   $8,000                       

         Trutech        TV        KLV3170    $8,000                       

                                             SUBTOTAL            $24,000  


        27. July 14, 2007, Kmart Store #3641, Manahawkin, NJ


         Manufacturer   Device   Model #    Forfeiture Amount            

         Disney         TV       DT1350-P   $8,000                       

         RCA            TV       20F512T    $8,000                       

                                            SUBTOTAL            $16,000  


       Kmart Total Proposed Forfeiture: $776,000

       SEARS HOLDING CORPORATION TOTAL PROPOSED FORFEITURE: $1,096,000

       Sears Roebuck and Co. and Kmart Corporation are wholly-owned
       subsidiaries of Sears Holdings Management Corporation.

       47 C.F.R. S: 15.117(k).

       47 U.S.C. S: 503(b).

       This amount represents a proposed based forfeiture amount of $320,000
       for Sears Roebuck and $776,000 for Kmart. See Attachment B for the
       calculation of the proposed forfeiture amounts.

       2002 Biennial Regulatory Review, Report and Order and Notice of
       Proposed Rulemaking, 18 FCC Rcd 13620, 13825 P: 532 (2003).

       Id.

       Second Periodic Review of the Commission's Rules and Policies
       Affecting the Conversion To Digital Television, Second Report and
       Order, 22 FCC Rcd 8776 at P: 1 (2007) ("Second DTV Periodic Report and
       Order").

       Id. at P: 10.

       Second DTV Periodic Report and Order at P: 14. See 47 C.F.R. S:
       15.117(k). In the Second DTV Periodic Report and Order, the Commission
       defined "point of sale" as the "place where televisions are displayed
       for consumers prior to purchase." See Second DTV Periodic Report and
       Order at n.29.

       Second Periodic Review in the Commission's Rules and Policies
       Affecting the Conversion to Digital Television, 72 Fed. Reg. 28894-01
       (May 23, 2007).

       47 C.F.R. S: 15.117(k)(1).

       Id.

       47 C.F.R. S: 15.117(k)(2).

       Sears, Roebuck & Co, Citation No. C20073248004 (Enf. Bur. Atlanta
       Office, rel. June 1, 2007).

       See Attachment A for a list of the citations issued to Sears Holdings
       Corporation (collectively "Citations"). In preparing the Citations, 
       Enforcement Bureau staff relied on  publicly available information,
       including retailer websites, to identify the television receiving
       equipment with analog-only tuners. Subsequently, Enforcement Bureau
       staff determined that the following Citations referred, in whole or in
       part, to erroneously identified equipment models: Sears Citation No.
       C20073294008 (Sylvania Model D155SL8); Kmart Citation No. C20073228004
       (All Models). In light of this evidence, we hereby cancel the relevant
       portions of the above citations with respect to those models. We also
       determined that the following Citation issued to K-Mart should have
       been issued to another retailer, and therefore we cancel this Citation
       as well: Citation No. C20073290022 (rel. June 5, 2007).

       Sears, Roebuck & Co, Citation No. EB-07-SE-188 (Enf. Bur. Spectrum
       Enforcement Division, rel. June 7, 2007).

       Kmart c/o Sears Holding Corporation, Citation No. C20073240004 (Enf.
       Bur. Philadelphia Office, rel. May 31, 2007).

       See Attachment A. All of the violations underlying the Citations
       occurred before June 12, 2007.

       Sears, Roebuck & Co, Citation No. EB-07-SE-181 (Enf. Bur. Spectrum
       Enforcement Division, rel. June 7, 2007).

       On June 8, 14, and 22, 2007, Sears Holdings Corporation submitted
       consolidated responses to the citations issued to Kmart and Sears,
       Roebuck & Co. See Letter from Mark D. Moloy, Senior Counsel - Vendor
       Compliance, Law Department, Sears Holdings Management Corporation, to
       William Davenport, Assistant Bureau Chief, and George Dillon,
       Associate Bureau Chief, Enforcement Bureau, Federal Communications
       Commission, dated June 8, 2007; Letter from Mark D. Moloy, Senior
       Counsel - Vendor Compliance, Law Department, Sears Holdings Management
       Corporation, to William Davenport, Assistant Bureau Chief, and George
       Dillon, Associate Bureau Chief, Enforcement Bureau, Federal
       Communications Commission, dated June 14, 2007; Letter from Mark D.
       Moloy, Senior Counsel - Vendor Compliance, Law Department, Sears
       Holdings Management Corporation, to William Davenport, Assistant
       Bureau Chief, and George Dillon, Associate Bureau Chief, Enforcement
       Bureau, Federal Communications Commission, dated June 22, 2007.

       See Attachment B for a listing of the stores visited and the models
       observed at each store.  Enforcement Bureau staff determined that
       these models had analog-only tuners by consulting the manufacturer's
       product manuals or, if such were unavailable, the models' technical
       specifications from Sears Holding Corporation's website.

       47 U.S.C. S: 503(b)(1)(B); 47 C.F.R. S: 1.80(a)(2).

       47 U.S.C. S: 312(f)(1).

       H.R. Rep. No. 97-765, 97th Cong. 2d Sess. 51 (1982).

       See, e.g., Application for Review of Southern California Broadcasting
       Co., Memorandum Opinion and Order, 6 FCC Rcd 4387, 4388 (1991)
       ("Southern California Broadcasting Co.").

       See, e.g., Callais Cablevision, Inc., Grand Isle, Louisiana, Notice of
       Apparent Liability for Monetary Forfeiture, 16 FCC Rcd 1359, 1362, P:
       10 (2001) ("Callais Cablevision") (issuing a Notice of Apparent
       Liability for, inter alia, a cable television operator's repeated
       signal leakage).

       Southern California Broadcasting Co., 6 FCC Rcd at 4388, P: 5; Callais
       Cablevision, Inc., 16 FCC Rcd at 1362, P: 9.

       47 U.S.C. S: 503(b); 47 C.F.R. S: 1.80(f).

       See, e.g., SBC Communications, Inc.,  Forfeiture Order, 17 FCC Rcd
       7589, 7591, P: 4 (2002) (forfeiture paid).

       Attachment B lists the dates of the Enforcement Bureau inspections,
       the analog-only models identified in violation of Section 15.117(k),
       as well as the Sears Roebuck and Kmart stores involved.

       Section 503(b)(5) states that no forfeiture liability shall be
       determined against any person who does not hold a license, permit,
       certificate, or other authorization issued by the Commission unless,
       prior to issuance of any Notice of Apparent Liability, such person is
       "(A) sent a citation of the violation charged; (B) is given a
       reasonable opportunity for a personal interview with an official of
       the Commission at the field office of the Commission which is nearest
       to such person's place of residence; and (C) subsequently engages in
       conduct of the type described in such citation." 47 U.S.C. S:
       503(b)(5). The apparent violations discussed in this NAL are subject
       to forfeiture because we afforded Sears a reasonable opportunity for a
       personal interview or to submit a written response to its first
       Citation before conducting a second round of inspections that would
       count towards potential forfeiture liability. See supra para. 5 and
       notes 14, 17. To the extent that the television receiving models
       involved in this NAL differ from those listed in the Citations, no
       additional citations are necessary because the more recent apparent
       violations are "conduct of the type described" in the earlier
       Citations - violations of Section 15.117(k). See HighTech CB Shop,
       Forfeiture Order, 20 FCC Rcd 12514, 12516 P: 9 (Enf. Bur. South
       Central Region 2005), recon. denied, 20 FCC Rcd 19269 (Enf. Bur.
       2005). In any event, the requirements of Section 503(b)(5) do not
       apply to Sears Roebuck, Kmart, or Sears Holding Corporation, which are
       Commission licensees and therefore subject to forfeiture under Section
       503(b)(2) of the Act without first receiving notice via a citation.
       See, e.g., Stations KB92013, WPAI989, and WPAW266, licensed to Sears
       Roebuck, Kmart, and Sears Holding Corporation, respectively, in the
       Industrial/Business Pool Private Land Mobile Service.

       47 U.S.C. S: 503(b)(2)(D). The Commission twice amended Section
       1.80(b)(3) of the Rules, 47 C.F.R. S: 1.80(b)(3), to increase the
       maximum forfeiture amounts, in accordance with the inflation
       adjustment requirements contained in the Debt Collection Improvement
       Act of 1996, 28 U.S.C. S: 2461. See Amendment of Section 1.80 of the
       Commission's Rules and Adjustment of Forfeiture Maxima to Reflect
       Inflation, Order, 15 FCC Rcd 18221 (2000) (adjusting the maximum
       statutory amounts from $10,000/$75,000 to $11,000/$87,500); Amendment
       of Section 1.80 of the Commission's Rules and Adjustment of Forfeiture
       Maxima to Reflect Inflation, Order, 19 FCC Rcd 10945 (2004) (adjusting
       the maximum statutory amounts from $11,000/$87,500 to
       $11,000/$97,500).

       47 U.S.C. S: 503(b)(2)(E). See also 47 C.F.R. S: 1.80(b)(4), Note to
       paragraph (b)(4): Section II. Adjustment Criteria for Section 503
       Forfeitures.

       See The Commission's Forfeiture Policy Statement and Amendment of
       Section 1.80 of the Rules to Incorporate the Forfeiture Guidelines,
       Report and Order, 12 FCC Rcd 17087, 17115 (1997), recon. denied, 15
       FCC Rcd 303 (1999) ("Forfeiture Policy Statement").

       Second DTV Periodic Report and Order at P: 12.

       Id. See also 47 C.F.R. S:S: 11.1-11.61, 79.2.

       See Pine Telephone Inc., Notice of Apparent Liability, 22 FCC Rcd
       9205, 9210 (Enf. Bur., Spectrum Enf. Div. 2007) subsequent history
       omitted; IT&E Overseas, Inc., Notice of Apparent Liability, 22 FCC Rcd
       7660, 7665 (Enf. Bur., Spectrum Enf. Div. 2007).

       .

       We caution Sears Roebuck and Kmart and other retailers that future
       cases involving repeat offenders may result in the imposition of
       forfeitures on a continuing violation basis.

       "After the transition, absent a label requirement, even cable and
       satellite subscribers might be surprised to find that they cannot
       receive television broadcasts over-the-air on an analog-only
       television purchased today if they choose to discontinue subscription
       service or their cable or satellite service is terminated by disaster,
       service disruption, or for non-payment of their bills." Second DTV
       Periodic Report and Order at P: 12.

       See Attachment B regarding the calculation of the proposed forfeiture
       amounts.

       47 U.S.C. S: 503(b), 47 C.F.R. S:S: 1.80, 15.117(k).

       47 U.S.C. S: 503(b), 47 C.F.R. S:S: 1.80, 15.117(k).

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       Federal Communications Commission FCC 08-107

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       Federal Communications Commission FCC 08-107