All connections double checked and secure.  The function light is solid and the assigned address is selected.  There is no engine movement at all until the knob is turned past the halfway point.  Upon further experimentation, I have discovered there are actually 2 speeds.  If I turn the knob ever so slightly when I'm near the point that gets the engine to run, the engine will run at a medium speed when I finally hit the sweet spot.  It will stay at the medium speed unless I turn it just a hair further, then it will run at full speed.  When it is running, there is no difference in speed even when cranked all the way to max.  Only when the knob is turned back to the point where the engine first started will the engine come to a full stop.  Turning the knob anywhere below the sweet spot does nothing.

I only have the one engine and the one controller so I can't isolate the culprit.  I assume either the controller or the engine is defective and my money is on the controller.

Is there a procedure to calibrate the throttle, or is it just a matter of replacing the unit?

Just put my new train set together for the first time and have a problem. 

The engine wont run until the knob for the controller is turned past the halfway point.  Once it starts, it runs at one speed (full) no matter where the knob is above the halfway point.  Below the halfway point it shuts down.  The halfway point is acting like an on-off switch.

All of the function buttons work the features of the engine no matter where the speed control is set.  I have already tried reassigning the engine to another address with the same results.

Before I call customer service, I was wondering if there is a reset or calibration procedure.