Closed Captioning of Video Programming

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 79

[MM Docket No. 95-176; FCC 97-279]

Closed Captioning of Video Programming

AGENCY: Federal Communications Commission.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Commission adopts rules implementing Section 713 of the

Communications Act of 1934, as amended. Section 713, Video Programming

Accessibility, was added to the Communications Act by section 305 of

the Telecommunications Act of 1996 and directed the Commission to adopt

rules by August 8, 1998, that generally require the closed captioning

of video programming. The rules adopted by the Commission generally

assign responsibility for compliance with the closed captioning

requirements to the entity which delivers the programming to the

consumer, establish separate transition schedules for programming first

published or exhibited on or after the effective date of these rules

and for programming first published or exhibited prior to the effective

date of the rules, provide for a number of exemptions authorized by

Congress and establish mechanisms for enforcement and compliance

review. These rules are intended to increase the accessibility of video

programming for persons with hearing disabilities.

EFFECTIVE DATE: These requirements and regulations become effective

January 1, 1998.

ADDRESSES: A copy of any comments on the information collections

contained herein should be submitted to Timothy Fain, Office of

Management and Budget, Room 10236 NEOB, Washington, DC 20503, (202)

395-3561 or via Internet at [email protected], and to Judy Boley,

Federal Communications Commission, Room 234, 1919 M St., NW.,

Washington, DC 20554 or via Internet to [email protected].

FOR FURTHER INFORMATION CONTACT: Marcia Glauberman, John Adams or

Alexis Johns, Cable Services Bureau, (202) 418-7200, TTY (202) 418-

7172. For additional information concerning the information collections

contained in this Report and Order, contact Judy Boley at (202) 418-

0217, or via the Internet at [email protected].

SUPPLEMENTARY INFORMATION: This is a synopsis of the Report and Order

in MM Docket No. 95-176, FCC 97-279, adopted August 7, 1997 and

released August 22, 1997. The complete text of this Report and Order is

available for inspection and copying during normal business hours in

the FCC Reference Center (Room 239), 1919 M Street, NW, Washington, DC,

and also may be purchased from the Commission's copy contractor,

International Transcription Services, Inc. (``ITS'') at (202) 857-3800,

1919 M Street, NW, Suite 246, Washington, DC 20554. For copies in

alternative formats, such as braille, audio cassette or large print,

please contact Sheila Ray at ITS.

Paperwork Reduction Act

This rulemaking contains modified information collections. The

Commission, as part of its continuing effort to reduce paperwork burden

invites the general public and other Federal agencies to take this

opportunity to comment on the following information collection, as

required by the Paperwork Reduction Act of 1995, Public Law 104-13.

Comments should address: (a) Whether the proposed collection of

information is necessary for the proper performance of the functions of

the Commission, including whether the information shall have practical

utility; (b) the accuracy of the Commission's burden estimates; (c)

ways to enhance the quality, utility, and clarity of the information

collected; and (d) ways to minimize the burden of the collection of

information on the respondents, including the use of automated

collection techniques or other forms of information technology.

OMB Approval Number: 3060-0761.

Title: Closed Captioning of Video Programming.

Type of Review: Revision to an existing collection.

Respondents: Individuals or households; business and other for-

profit entities.

Number of Respondents: 100 petitions + 100 petition responses +

1,500 viewer complaints to program providers + 1,500 complaint

responses from program providers + 500 instructions to refile

complaints + 300 viewer complaints to the Commission + 300 complaint

responses to the Commission = 4,300.

Estimated Time Per Response: .5-5 hours estimated for both the

petition and complaint processes. Estimated annual burden to

petitioners and respondents for petition processes: We estimate that

program providers will annually initiate 100 petitions requesting

exemption from the closed captioning requirements. We estimate that the

average burden to complete all aspects of each petition process,

including filing any possible reply comments and associated

certifications, will be 5 hours. We estimate that 50% of petitions will

be prepared using in-house assistance to draft petitions and that 50%

of petitions will be prepared using outside legal assistance. Petitions

prepared using outside legal assistance will undergo an average burden

of 2 hours for each petition to coordinate information with outside

legal assistance.

50 (50% of petitions prepared in-house assistance) x 5 hours = 250

hours.

50 (50% of petitions prepared using outside legal assistance) x 2 hours

= 100 hours.

We estimate that there will be an average of one response to every

petition filed. The average burden to complete all aspects of the

response process, including making certification, is estimated to be 5

hours. We estimate that 50% of responses will be prepared using in-

house assistance and that 50% of responses will be prepared using

outside legal assistance.Commenters using outside legal assistance will

undergo an average burden of 2 hours for each response to coordinate

information with outside legal assistance.

50 (50% of responses prepared using in-house assistance) x 5 hours =

250 hours.

50 (50% of responses prepared using outside legal assistance) x 2 hours

= 100 hours.

Estimated annual burden to viewers and program providers for the

complaint process: We estimate there will be 1,500 annual complaints

filed by viewers at the local level. The average burden for each

complaint and response is estimated to be 1 hour per viewer and 1 hour

per program provider. 1,500 viewer complaints x 1 hour and 1,500

program provider responses x 1 hour = 3,000 hours. In the case of an

alleged violation by a television broadcast station or other program

distributor for which the programming distributor is exempt from closed

captioning responsibility pursuant to Sec. 79.1(e)(9), the complaint

shall be sent directly to the station or owner of the programming. A

video programming distributor receiving a complaint regarding such

programming must forward the complaint within seven days of receipt to

the programmer or

[[Page 48488]]

send written instructions to the complainant on how to refile with the

programmer. We estimate that one-third of complaints at the local level

will have to be refiled in this manner, and that the average burden for

programmers to either forward the complaint or send written

instructions to the complainant on how to refile will have an average

burden of 30 minutes (.5 hours) per complaint. 500 complaint x .5 hours

= 250 hours.

We estimate that the majority of complaints will be resolved at the

local level between the respective viewer and program provider. We

estimate that approximately 300 (20% of 1,500) will go unresolved,

resulting in complaints and responses being filed with the Commission.

A copy of the complaint and any supporting documentation that is filed

with the Commission must also be served on the video programming

distributor. Responses to complaints filed with the Commission must

also be served on the complainant. The average burden for all aspects

of each complaint and response in this instance is estimated to be 2

hours per viewer and 4 hours per program provider. 300 viewer

complaints x 2 hours and 30000 program provider responses x 4 hours =

1,800 hours.

Total Annual Burden to Respondents: 250 + 100 + 250 + 100 + 1,500 +

1,500 + 1,800 = 5,750 hours.

Total Annual Cost to Respondents: $42,100 estimated as follows:

Program providers will use outside legal assistance paid at $150 per

hour to complete approximately 50 petitions. 50 petitions x 5 hours per

petition x $150 per hour = $37,500. Postage and stationery costs for

petitions are estimated at an average of $5 per waiver. 100 petitions x

$5 = $500. Viewers and program providers will undergo average postage

and stationary costs for the complaint process estimated as follows:

1,500 viewer complaints filed with program providers x $1 = $1,500.

1,500 complaint responses x $1 = $1,500. 500 instructions to refile

complaints x $1 = $500. 300 viewer complaints filed at the Commission x

$1 per complaint = $300. 300 program provider responses x $1 = $300.

Total annual cost to respondents: $37,500 + $500 + $1,500 + $1,500 +

$500 + $300 + $600 = $42,100.

Needs and Uses: This Report and Order is adopted pursuant to

section 713 of the Communications Act of 1934, as amended. The

requirements set forth in section 713 are intended to ensure that video

programming is accessible to individuals with hearing disabilities

through closed captioning, regardless of the delivery mechanism used to

reach consumers.

Synopsis of Report and Order

1. By the Report and Order (``R&O''), the Commission adopts rules

to implement section 713 of the Communications Act, 47 U.S.C. 613,

which generally requires video programming be closed captioned. In

particular, this provision required the Commission to prescribe by

August 8, 1997, rules and implementation schedules for the closed

captioning of video programming and to establish appropriate

exemptions. The rules we adopt are based on comments received in

response to a Notice of Proposed Rulemaking in this proceeding

summarized at 62 FR 4959 (February 3, 1997).

2. In the R&O, we address: (a) The responsibility for compliance

with the rules we adopt; (b) obligations as to programming first

published or exhibited on or after the effective date of our rules

(``new programming'') and programming first published or exhibited

prior to the effective date of our rules (``pre-rule programming''),

including phase-in schedules; (c) the measurement of compliance with

our rules; (d) exemptions authorized by Congress, including those based

on the ``economically burdensome standard, existing contracts, and the

undue burden standard; (e) standards for quality and accuracy of closed

captioning; (f) mechanisms for enforcement and compliance review; and

(g) other issues relating to the implementation of section 713 and

matters for future review. The rules will become effective January 1,

1998.

3. Video programming distributors, defined as all entities that

provide video programming directly to customers' homes, regardless of

distribution technology used (e.g., broadcasters, cable operators, DBS

operators) will, generally, be responsible for compliance with the new

closed captioning requirements. Video programming distributors,

however, will not be responsible for the captioning of programming that

is not subject to their editorial control. The responsibility for

compliance with respect to such programming will be placed on the

providers and owners of such programming.

4. Section 713 requires the Commission to adopt rules to ensure

that video programming first published or exhibited after the effective

date of the rules be fully accessible through closed captioning. For

this new programming that does not meet any of the criteria for

exemption, we adopt an eight year transition period with benchmarks

specified as a number of hours of required captioning at two year

intervals. We will define full accessibility as the captioning of 95%

of all new, nonexempt programming to provide for unforeseen

difficulties that may arise. Compliance will be measured on a channel-

by-channel basis for multichannel video programming distributors

(``MVPDs'') and will be measured over each calendar quarter. During the

transition period, each channel of programming will be required to meet

the specified benchmark unless the amount of new, nonexempt programming

offered on the channel is less than the benchmark. In such instances,

at least 95% of the nonexempt, new programming will be required to be

captioned. The first benchmark becomes effective during the first

calendar quarter of 2000 and requires that 450 hours of programming be

captioned during each quarter of 2000 and 2001. During each calendar

quarter of 2002 and 2003, 900 hours of new, nonexempt programming must

be captioned. The benchmark for each calendar quarter of 2004 and 2005

is 1350 hours of new, nonexempt programming.

5. Section 713 also requires the Commission to maximize the

accessibility of video programming first published or exhibited prior

to the effective date of the rules. For programming first published or

exhibited before January 1, 1998, that does not meet any of our

criteria for exemption, we will require that at least 75% of such

programming be captioned after the end of a ten year transition period.

We will not set specific benchmarks for pre-rule programming. We will,

however, monitor distributors' efforts to increase the amount of

captioning of pre-rule programming to ensure that channels are

progressing toward the 75% requirement. After four years, we will

reevaluate our decision not to establish specific benchmarks and

consider whether the 75% threshold is appropriate to meet the goals of

the statute.

6. We will also require video programming providers to continue to

provide closed captioning at a level substantially the same as the

average level of captioning that they provided during the first six

months of 1997, even if the amount of captioned programming exceeds

that required under the benchmarks. In addition, video programming

distributors are required to pass through to consumers any programming

they receive with closed captioning, when they do not edit the

programming.

7. Section 713 permits the Commission to exempt by regulation

[[Page 48489]]

programs, classes of programs or services for which we determine a

requirement to provide closed captioning will be economically

burdensome. In creating these exemptions we intend to preserve the

economic viability of certain classes of programming or certain

entities associated with discreet classes of programming. We will,

therefore, exempt non-English language programming and programming

distributed between 2 a.m. and 6 a.m local time. We will also exempt

primarily textual programming for which captioning would be largely

redundant, including programming guide services or community bulletin

boards, which provide the relevant information about program schedules

or events in textual form. This exemption does not apply to

programming, such as sports programming, home shopping or weather

reports, where a significant amount of the relevant information is not

readily available as text. Similarly, we will exempt programming which

consists primarily of instrumental music such as a symphony or ballet.

In such cases, where the majority of the program simply could not be

captioned, we will also exempt any introductory discussion because the

resources necessary to caption such minor portions of the program would

outweigh any possible benefit. We will also exempt interstitial

announcements, promotional programming and public service announcements

that are ten minutes or less in duration. In this context,

advertisements that are five minutes or less in duration are not

considered programming and are not subject to our closed captioning

rules. Similarly, we will exempt locally-produced and distributed non-

news programming with limited repeat value such as local parades, local

high school or nonprofessional sports or community theater productions.

This exemption does not include programming readily captioned using ENR

or programs with repeat value. We also adopt several exemptions

designed to protect certain classes of video programming providers

which might otherwise be harmed if subject to our rules. Thus

programming produced for the instructional television fixed service

(``ITFS'') will be exempt regardless of whether it is distributed by an

ITFS licensee or other video programming distributor. We further exempt

the programming on a new network for its first four years of operation.

In addition, we will not require any video programming provider from

the closed captioning requirements where the provider had annual gross

revenues for an individual channel during the proceeding year of less

than three million dollars. Finally, we will not require any video

programming provider to spend more than 2% of its annual gross revenues

for the proceeding year on the captioning of any channel of video

programming.

8. Under section 713(d)(2), a video programming provider is exempt

from captioning programming if such action would be inconsistent with a

contract in effect on the date of enactment of the 1996 Act.

Accordingly, we exempt programming subject to a contract in effect on

February 8, 1998, for which compliance with our closed captioning

requirements would constitute a breach of that contract.

9. Under section 713(d)(3), the Commission is required to consider

petitions for exemption from the closed captioning rules if the

requirements would impose an undue burden, which is defined as a

significant burden or expense. A petition may be submitted by any party

in the programming distribution chain, including video programming

producers, syndicators and providers. Petitions must include

information that demonstrates how our closed captioning requirements

would result in an undue burden. Factors we will consider include: (a)

The nature and cost of the closed captions for the programming; (b) the

impact on the operation of the provider or program owner; (c) the

financial resources of the provider or program owner; and (d) the type

of operations of the provider or program owner. Petitioners may also

submit any other information they deem appropriate for our evaluation

of their circumstances. Depending on the individual circumstance, we

may grant partial exemptions and may consider proposals that

programming be made more accessible through alternative means (e.g.,

additional text or graphics).

10. The rules require video programming providers to deliver intact

the closed captioning they receive as part of the programming they

distribute to viewers, if the programming is not edited. They also must

maintain their equipment to ensure the technical quality of the closed

captioning they transmit. We will not, however, adopt standards for the

non-technical aspects of closed captioning. We will monitor the

captions that result from the implementation of our rules and may

revisit this issue at a later date. We will not restrict the use of

captioning methodology generally and will permit the use of electronic

news room (``ENR'') capability to create captions from teleprompter

scripts.

11. We will enforce our rules through a complaint process modeled

after existing complaint procedures. Complaints alleging violation of

our closed captioning rules must first be directed in writing to the

video programming distributor responsible for delivery of the

programming directly to the customer's home. Complaints must be filed

no later than the end of the calendar quarter following the calendar

quarter in which the alleged violation occurred. The video programming

distributor must respond to the complaint no later than 45 days after

the end of the calendar quarter in which the violation is alleged to

have occurred or 45 days after receipt of the written complaint,

whichever is later. If a video programming distributor fails to respond

to a complaint or a dispute remains following this initial procedure, a

complaint may be filed with the Commission within 30 days after the

time allotted for the video programming distributor to respond has

ended. The video programming distributor will have 15 days to respond

to any complaint filed with the Commission. We will not adopt any

specific recordkeeping requirements. In response to a complaint, a

video programming distributor is obligated to provide the Commission

with sufficient records and documentation to demonstrate that it is in

compliance with the rules. We also will permit video programming

distributors to rely on certifications from program suppliers to

demonstrate compliance.

12. In addition, in the R&O, we indicated that there are several

issues related to the implementation of closed captioning requirements

that need to be studied further or reevaluated during our transition

period. We intend to study further technological changes that may

affect closed captioning in a subsequent proceeding, including issues

relating to digital television and other technologies that may change

the way captions are created and delivered. We also are concerned about

providing viewers with hearing disabilities with accurate information

regarding fast breaking news of great importance such as severe weather

conditions, earthquakes and disruptions of the transportation system.

As we did not receive sufficient information on this issue in this

proceeding, we will initiate a proceeding to determine whether

additional rules are needed in this area. Moreover, we will reexamine a

number of our decisions during the transition period, including the

captioning requirements for pre-rule programming, the appropriateness

of certain

[[Page 48490]]

exemptions, the use of ENR and the decision not to adopt standards

relating to non-technical quality.

Regulatory Flexibility Act Certification

13. As required by the Regulatory Flexibility Act (RFA), an Initial

Regulatory Flexibility Analysis (``IRFA'') was incorporated into the

Notice of Proposed Rulemaking in this proceeding. We sought written

public comment on the expected impact of the proposed policies and

rules on small entities in the NPRM, including comments on the IRFA.

This present Final Regulatory Flexibility Analysis (``FRFA'') conforms

to the RFA.

14. Need for Action and Objectives of the Rule: The 1996 Act added

a new Section 713 to the Communications Act of 1934 that inter alia

requires the Commission to develop rules to increase the availability

of video programming with closed captioning. We are promulgating these

rules in order to implement this provision of section 713. The

statutory objective of the closed captioning provisions is to promote

the increased accessibility of video programming for persons with

hearing disabilities.

15. Summary of Significant Issues Raised by the Public Comments in

Response to the IRFA: The Small Cable Business Association (``SCBA'')

filed the only comment specifically responsive to the IRFA. Several

other commenters addressed the IRFA in their general comments. Other

parties, while not specifically commenting on the IRFA, discuss the

potential effect of the proposed rules on small entities.

16. SCBA concurs with our estimates regarding the number of small

cable operators that may be affected by our closed captioning

requirements. SCBA offers several specific suggestions to minimize the

effects of the closed captioning requirements on small cable operators.

These proposals include: (a) Allocating the burden of compliance to

programming producers and owners; (b) a class exemption for small cable

operators serving 1,000 or fewer subscribers; (c) streamlined

compliance and complaint rules for small cable systems serving 15,000

or fewer subscribers including; (d) streamlined waiver procedures to

permit qualifying small systems to access a simplified, low-cost waiver

process; (e) a class exemption for PEG programming; (f) a class

exemption for local origination programming.

17. Cassidy asserts that our conclusions are overly inclusive and,

if all small providers were exempted, Congress' intent to increase the

availability of closed captioned programming would be circumvented.

Commenters representing smaller captioning agencies suggest ways to

minimize the effect of the new regulations on small captioners.

Specifically, Para Technologies proposes that we adopt a phase-in

schedule requiring video program providers to increase closed captioned

programming 4% every three months over the eight year transition

period. According to Para Technologies, this plan would increase

competition in the captioning industry, leading to lower rates and more

widely available captioned programming. MCS suggests that we should

require that video producers and program providers use small captioning

companies for a minimum of 25% of their real time captioning

requirements.

18. Kaleidoscope indicates that its proposal to define economic

burden as a situation where the cost of captioning would exceed 10% of

the relative program budget should minimize the burden on small

entities. Kaleidoscope asserts that this is an objective test that

would exempt small entities from closed captioning requirements that

they may find economically burdensome.

19. The Association of America's Public Television Stations

(``APTS'') asserts that the closed captioning requirements would be

especially onerous to its smaller members. APTS suggests that a $3

million benchmark is generally accepted among noncommercial stations as

indicative of a small station and urges us to adopt an economic burden

exemption for local programming produced by such stations.

20. Instructional Television Fixed Services (``ITFS'') licensees

argue that their programming should not be subject to the closed

captioning requirements as they represent a formidable economic burden.

Several commenters argue that they are already obligated to ensure that

their services are accessible under both the ADA and the Rehabilitation

Act of 1973. These commenters propose excluding ITFS providers from the

definition of ``video programming provider'' and exempting ITFS

programming carried on wireless cable systems from any closed

captioning requirements.

21. Several low power television station (``LPTV'') operators

assert that as small businesses, LPTV operators warrant an exemption

based on the economic burden that closed captioning requirements would

pose. The Community Broadcasters Association (``CBA'') suggests that

specific classes of programming carried by some LPTV stations should be

exempt in order to relieve these providers of an economic burden.

22. Access centers and organizations providing governmental

programming assert that their operations qualify as small entities.

These commenters assert that, in many cases, the financial requirements

for closed captioning would exceed or substantially consume their

entire annual budgets. Several of these commenters state that mandatory

captioning requirements could effectively eliminate public, educational

and governmental (``PEG'') programming. Accordingly, these commenters

seek an exemption based on the economic burden posed by closed

captioning requirements unless an alternative funding mechanism becomes

available. The Greater Metro Telecommunications Consortium (``GMTC'')

suggests that PEG programmers should be allowed to weigh the costs and

the benefits of providing captioning and consider alternatives. Several

commenters representing multichannel video programming distribution

systems (``MVPDs'') join the access centers in arguing that PEG

channels should be exempt. These commenters concur that PEG channels

generally operate on very limited budgets which preclude captioning.

23. Description and Estimate of the Number of Small Entities to

Which the Rules Will Apply: The RFA directs the Commission to provide a

description of and, where feasible, an estimate of the number of small

entities that will be affected by the proposed rules. The RFA defines

the term ``small entity'' as having the same meaning as the terms

``small business,'' ``small organization,'' and ``small business

concern'' under section 3 of the Small Business Act. Under the Small

Business Act, a small business concern is one which: (1) Is

independently owned and operated; (2) is not dominant in its field of

operation; and (3) satisfies any additional criteria established by the

SBA.

24. Small MVPDs: The SBA has developed a definition of small

entities for cable and other pay television services, which includes

all such companies generating $11 million or less in annual receipts.

13 CFR 121.201 (SIC 4841). This definition includes cable system

operators, closed circuit television services, direct broadcast

satellite services (``DBS''), multichannel multipoint distribution

systems (``MMDS''), satellite master antenna systems (``SMATV'') and

subscription television services. According to the Bureau of the

Census, there were 1,758 total cable and other pay television

[[Page 48491]]

services and 1,423 had less than $11 million in revenue as of 1992. We

address below each service individually to provide a more precise

estimate of small entities.

25. Cable Systems: We have developed, with SBA's approval, our own

definition of a small cable system operator for the purposes of rate

regulation. Under our rules, a ``small cable company'' is one serving

fewer than 400,000 subscribers nationwide. 47 CFR 76.901(e). Based on

our most recent information, we estimate that there were 1439 cable

operators that qualified as small cable companies at the end of 1995.

Since then, some of those companies may have grown to serve over

400,000 subscribers, and others may have been involved in transactions

that caused them to be combined with other cable operators.

Consequently, we estimate that there are fewer than 1439 small entity

cable system operators that may be affected by the decisions and rules

we are adopting.

26. The Communications Act also contains a definition of a small

cable system operator, which is ``a cable operator that, directly or

through an affiliate, serves in the aggregate fewer than 1% of all

subscribers in the United States and is not affiliated with any entity

or entities whose gross annual revenues in the aggregate exceed

$250,000,000.'' 47 U.S.C. 543(m)(2). We have determined that there are

61,700,000 subscribers in the United States. Therefore, an operator

serving fewer than 617,000 subscribers shall be deemed a small

operator, if its annual revenues, when combined with the total annual

revenues of all of its affiliates, do not exceed $250 million in the

aggregate. Based on available data, we find that the number of cable

operators serving 617,000 subscribers or less totals 1450. Although it

seems certain that some of these cable system operators are affiliated

with entities whose gross annual revenues exceed $250,000,000, we are

unable at this time to estimate with greater precision the number of

cable system operators that would qualify as small cable operators

under the definition in the Communications Act.

27. MMDS: We refined the definition of ``small entity'' for the

auction of MMDS spectrum as an entity that together with its affiliates

has average gross annual revenues that are not more than $40 million

for the preceding three calendar years. This definition of a small

entity in the context of MMDS auctions has been approved by the SBA. 47

CFR 21.961(b)(1).

28. We completed the MMDS auction in March 1996 for authorizations

in 493 basic trading areas (``BTAs''). Of 67 winning bidders, 61

qualified as small entities. Five bidders indicated that they were

minority-owned and four winners indicated that they were women-owned

businesses. MMDS is an especially competitive service, with

approximately 1573 previously authorized and proposed MMDS facilities.

Information available to us indicates that no MMDS facility generates

revenue in excess of $11 million annually. We conclude that, for

purposes of this FRFA, there are approximately 1634 small MMDS

providers as defined by the SBA and the auction rules.

29. ITFS: There are presently 2032 ITFS licensees. All but 100 of

these licenses are held by educational institutions. Educational

institutions are included in the definition of a small business. 5

U.S.C. 601(5). However, we do not collect annual revenue data for ITFS

licensees and are not able to ascertain how many of the 100 non-

educational licensees would be categorized as small under the SBA

definition.

30. DBS: Because DBS provides subscription services, DBS falls

within the SBA definition of cable and other pay television services

(SIC 4841). As of December 1996, there were eight DBS licensees. We do

not collect annual revenue data for DBS and, therefore, are unable to

ascertain the number of small DBS licensees that could be affected by

these rules. Estimates of 1996 revenues for various DBS operators are

significantly greater than $11,000,000 and range from a low of

$31,132,000 for Alphastar to a high of $1,100,000,000 for Primestar.

Accordingly, we now conclude that no DBS operator qualifies as a small

entity.

31. Home Satellite Dish (``HSD''): The market for HSD service is

difficult to quantify. HSD owners have access to more than 265 channels

of programming placed on C-band satellites by programmers for receipt

and distribution by MVPDs, of which 115 channels are scrambled and

approximately 150 are unscrambled. HSD owners can watch unscrambled

channels without paying a subscription fee. To receive scrambled

channels, however, an HSD owner must purchase an integrated receiver-

decoder from an equipment dealer and pay a subscription fee to an HSD

programming packager. According to the most recently available

information, there are approximately 30 program packagers nationwide

offering packages of scrambled programming to retail consumers. These

program packagers provide subscriptions to approximately 2,314,900

subscribers nationwide. This is an average of about 77,163 subscribers

per program packager. This is substantially smaller than the 400,000

subscribers used in the Commission's definition of a small multiple

system operator (``MSO''). Furthermore, because this an average, it is

likely that some program packagers may be substantially smaller.

32. Open Video System (``OVS''): We have certified nine OVS

operators. Of these nine, only two are providing service. They are Bell

Atlantic serving its Dover, New Jersey system and Metropolitan Fiber

Systems operating OVS systems in Boston and New York. Bell Atlantic and

Metropolitan Fiber Systems have sufficient revenues to assure us that

they do not qualify as small business entities. Little financial

information is available for the other entities authorized to provide

OVS that are not yet operational. Given that other entities have been

authorized to provide OVS service but have not yet begun to generate

revenues, we conclude that at least some of the OVS operators qualify

as small entities.

33. SMATVs: Industry sources estimate that approximately 5200 SMATV

operators were providing service as of December 1995. Other estimates

indicate that SMATV operators serve approximately 1.05 million

residential subscribers as of September 1996. The ten largest SMATV

operators together pass 815,740 units. If we assume that these SMATV

operators serve 50% of the units passed, the ten largest SMATV

operators serve approximately 40% of the total number of SMATV

subscribers. Because these operators are not rate regulated, they are

not required to file financial data with the Commission. Furthermore,

we are not aware of any privately published financial information

regarding these operators. Based on the estimated number of operators

and the estimated number of units served by the largest ten SMATVs, we

conclude that a substantial number of SMATV operators qualify as small

entities.

34. Local Multipoint Distribution System (``LMDS''): Unlike the

above pay television services, LMDS technology and spectrum allocation

will allow licensees to provide wireless telephony, data, and/or video

services. Therefore, the definition of a small LMDS entity may be

applicable to both cable and other pay television (SIC 4841) and/or

radiotelephone communications companies (SIC 4812). The SBA definition

for cable and other pay services is defined in paragraph 24 supra. A

small radiotelephone entity is one with 1500 employees or less. 13 CFR

121.1201. However, for the

[[Page 48492]]

purposes of this R&O on closed captioning, we include only an estimate

of LMDS video service providers.

35. LMDS is a service that is expected to be auctioned by the FCC

in 1997. The vast majority of LMDS entities providing video

distribution could be small businesses under the SBA's definition of

cable and pay television (SIC 4841). However, in the Third NPRM, CC

Docket No. 92-297, 58 FR 6400 (January 28, 1993), we proposed to define

a small LMDS provider as an entity that, together with affiliates and

attributable investors, has average gross revenues for the three

preceding calendar years of less than $40 million. We have not yet

received approval by the SBA for this definition.

36. There is only one company, CellularVision, that is currently

providing LMDS video services. Although the Commission does not collect

data on annual receipts, we assume that CellularVision is a small

business under both the SBA definition and our proposed auction rules.

We also conclude that a majority of the potential LMDS licensees will

be small entities, as that term is defined by the SBA.

37. Small Broadcast Stations: The SBA defines small television

broadcasting stations as television broadcasting stations with $10.5

million or less in annual receipts. 13 CFR 121.201.

38. Estimates Based on Census and BIA Data: According to the Bureau

of the Census, in 1992, 1155 out of 1478 operating television stations

reported revenues of less than $10 million for 1992. This represents

78% of all television stations, including noncommercial stations. The

Bureau of the Census does not separate the revenue data by commercial

and noncommercial stations in this report. Neither does it allow us to

determine the number of stations with a maximum of $10.5 million in

annual receipts. Census data also indicate that 81% of operating firms

(that owned at least one television station) had revenues of less than

$10 million.

We also have performed a separate study based on the data contained

in the BIA Publications, Inc. Master Access Television Analyzer

Database, which lists a total of 1141 full power commercial television

stations. It should be noted that, using the SBA definition of small

business concern, the percentage figures derived from the BIA database

may be underinclusive because the database does not list revenue

estimates for noncommercial educational stations, and these therefore

are excluded from our calculations based on the database. The BIA data

indicate that, based on 1995 revenue estimates, 440 full power

commercial television stations had an estimated revenue of $10.5

million or less. That represents 54% of full power commercial

television stations with revenue estimates listed in the BIA program.

The database does not list estimated revenues for 331 stations. Using a

worst case scenario, if those 331 stations for which no revenue is

listed are counted as small stations, there would be a total of 771

stations with an estimated revenue of $10.5 million or less,

representing approximately 68% of the 1141 full power commercial

television stations listed in the BIA data base.

40. Alternatively, if we look at owners of commercial television

stations as listed in the BIA database, there are a total of 488

owners. The database lists estimated revenues for 60% of these owners,

or 295. Of these 295 owners, 156 or 53% had annual revenues of less

than $10.5 million. Using a worst case scenario, if the 193 owners for

which revenue is not listed are assumed to be small, then small

entities would constitute 72% of the total number of owners.

41. In summary, based on the foregoing worst case analysis using

Bureau of the Census data, we estimate that our rules will apply to as

many as 1150 commercial and noncommercial television stations (78% of

all stations) that could be classified as small entities. Using a worst

case analysis based on the data in the BIA data base, we estimate that

as many as 771 commercial television stations (about 68% of all

commercial television stations) could be classified as small entities.

As we noted above, these estimates are based on a definition that we

tentatively believe greatly overstates the number of television

broadcasters that are small businesses. Further, it should be noted

that under the SBA's definitions, revenues of affiliates that are not

television stations should be aggregated with the television station

revenues in determining whether a concern is small. The estimates

overstate the number of small entities since the revenue figures on

which they are based do not include or aggregate such revenues from

nontelevision affiliated companies.

42. Program Producers and Distributors: The Commission has not

developed a definition of small entities applicable to producers or

distributors of television programs. Therefore, we will utilize the SBA

classifications of Motion Picture and Video Tape Production (SIC 7812),

Motion Picture and Video Tape Distribution (SIC 7822), and Theatrical

Producers (Except Motion Pictures) and Miscellaneous Theatrical

Services (SIC 7922). These SBA definitions provide that a small entity

in the television programming industry is an entity with $21.5 million

or less in annual receipts for SIC 7812 and 7822, and $5 million or

less in annual receipts for SIC 7922. 13 CFR 121.201. The 1992 Bureau

of the Census data indicate the following: (1) There were 7265 U.S.

firms classified as Motion Picture and Video Production (SIC 7812), and

that 6987 of these firms had $16,999 million or less in annual receipts

and 7002 of these firms had $24,999 million or less in annual receipts;

(2) there were 1139 U.S. firms classified as Motion Picture and Tape

Distribution (SIC 7822), and that 1007 of these firms had $16,999

million or less in annual receipts and 1013 of these firms had $24,999

million or less in annual receipts; and (3) there were 5671 U.S. firms

classified as Theatrical Producers and Services (SIC 7922), and that

5627 of these firms had less than $5 million in annual receipts.

43. Each of these SIC categories is very broad and includes firms

that may be engaged in various industries including television.

Specific figures are not available as to how many of these firms

exclusively produce and/or distribute programming for television or how

many are independently owned and operated. Consequently, we conclude

that there are approximately 6987 small entities that produce and

distribute taped television programs, 1013 small entities primarily

engaged in the distribution of taped television programs, and 5627

small producers of live television programs that may be affected by the

rules adopted in this R&O.

44. Description of Reporting, Recordkeeping and Other Compliance

Requirements: We do not prescribe any reporting requirements. While

several parties encouraged adoption of such requirements, we believe

that our enforcement process alleviates the need for reporting. Thus,

we are not imposing recordkeeping requirements for video programming

distributors. Rather, we allow them to exercise their own discretion

and only require that they retain records sufficient to demonstrate

compliance with our rules (Sec. 79.1(g)(6)). In order to further

relieve small video programming distributors of any unnecessary

recordkeeping burden, we permit video programming distributors to rely

on certifications from the programming suppliers to demonstrate

compliance with our closed captioning rules (Sec. 79.1(g)(6)).

45. Steps Taken to Minimize Significant Economic Impact On Small

[[Page 48493]]

Entities and Significant Alternatives Considered: In formulating our

closed captioning rules, we have taken steps to minimize the effect on

small entities while making video programming more accessible to

persons with hearing disabilities. These efforts are consistent with

the Congressional goal of increasing the availability of closed

captioned programming while preserving the diversity of available

programming.

46. Generally, we do not specifically exempt any class of video

programming distributor because we have determined that all video

programming distributors are technically capable of delivering

captioning. We do, however, recognize that ITFS licensees serve a

particular, well defined niche as distributors of specialized

programming directed at specified sites and not generally intended for

residential use. We also recognize that the general public benefits

from the redistribution of this programming by MMDS operators. We

therefore determine that ITFS operators warrant a blanket exemption.

Accordingly, we exempt programming originated by ITFS licensees,

regardless of the facility used to distribute this programming

(Sec. 79.1(d)(7)).

47. We also recognize the significance of locally produced and

distributed non-news programming of primarily local interest and

limited repeat value. Much of this programming is produced on a low

budget as a public service and our closed captioning requirements might

impose a significant economic burden that could result in such

programming not being televised. We therefore create a limited

exemption for such programming (Sec. 79.1(d)(8)).

48. We recognize that many new video programming services will

often qualify as small entities. We also recognize the need to allow

new and innovative services designed to serve emerging or niche markets

greater flexibility than more established services serving well defined

markets. Accordingly, our rules provide an exemption to relieve new

services from our captioning requirements for their first four years of

operation (Sec. 79.1(d)(9)).

49. We do not require any video programming provider to spend more

than 2% of its annual gross revenues received from a channel on closed

captioning (Sec. 79.1(d)(11)). This will require video programming

providers to devote a reasonable portion of their revenue stream to

closed captioning. This mechanism will help to avoid an ``all or

nothing'' approach thus ensuring that accessibility to captioned

programming is increased without creating an economic burden on video

programming providers.

50. Furthermore, we exempt from our closed captioning requirements

any video programming provider with less than $3 million in annual

gross revenues except that it will be required to pass through any

captioning it may receive (Sec. 79.1(d)(12)). This provision is

intended to address the problems of small video programming providers

that are not in a position to devote significant resources towards

captioning and who would, even if they expended 2% of their revenues on

captioning, provide only a minimal amount of captioned programming.

This will relieve the smallest of entities of any burdensome obligation

to provide captioning without significantly reducing the availability

of captioning.

51. In order to further minimize the impact of any unanticipated

burdens that may be created by our closed captioning requirements, we

adopt a petition process that permits us to consider requests for

individual exemptions from these rules based on the statutory undue

burden standard (Sec. 79.1(f)). This mechanism will allow us to address

the impact of these rules on individual entities and modify the rules

to accommodate individual circumstances. We have specifically designed

these procedures to ameliorate the impact of the closed captioning

rules in a manner consistent with the objective of increasing the

availability of captioned programming.

Ordering Clauses

52. Accordingly, it is ordered that, pursuant to authority found

in sections 4(i), 303(r), and 713 of the Communications Act of 1934, as

amended, 47 U.S.C. 154(i), 303(r), and 613, the Commission's rules are

hereby amended by adding a new part 79 as set forth below. The

amendments set forth below shall become effective January 1, 1998.

53. It is further ordered that the Secretary shall send a copy of

this Report and Order, including the Final Regulatory Flexibility

Analysis, to the Chief Counsel for Advocacy of the Small Business

Administration in accordance with paragraph 603(a) of the Regulatory

Flexibility Act, Pub. L. 96-354, 94 Stat. 1164, 5 U.S.C. 601 et seq.

(1981).

List of Subjects in 47 CFR Part 79

Cable television, Closed captioning, Television.

Federal Communications Commission.

William F. Caton,

Acting Secretary.

Title 47 of the Code of Federal Regulations is amended by adding a

new Part 79 consisting of Sec. 79.1 to read as follows:

PART 79--CLOSED CAPTIONING OF VIDEO PROGRAMMING

Sec.

79.1 Closed captioning of video programming.

Authority: 47 U.S.C. 613.

Sec. 79.1 Closed captioning of video programming.

(a) Definitions. For purposes of this section the following

definitions shall apply:

(1) Video programming. Programming provided by, or generally

considered comparable to programming provided by, a television

broadcast station that is distributed and exhibited for residential

use. Video programming includes advertisements of more than five

minutes in duration but does not include advertisements of five

minutes' duration or less.

(2) Video programming distributor. Any television broadcast station

licensed by the Commission and any multichannel video programming

distributor as defined in Sec. 76.1000(e) of this chapter, and any

other distributor of video programming for residential reception that

delivers such programming directly to the home and is subject to the

jurisdiction of the Commission. An entity contracting for program

distribution over a video programming distributor that is itself exempt

from captioning that programming pursuant to paragraph (e)(9) of this

section shall itself be treated as a video programming distributor for

purposes of this section To the extent such video programming is not

otherwise exempt from captioning, the entity that contracts for its

distribution shall be required to comply with the closed captioning

requirements of this section.

(3) Video programming provider. Any video programming distributor

and any other entity that provides video programming that is intended

for distribution to residential households including, but not limited

to broadcast or nonbroadcast television network and the owners of such

programming.

(4) Closed captioning. The visual display of the audio portion of

video programming contained in line 21 of the vertical blanking

interval (VBI) pursuant to the technical specifications set forth in

Sec. 15.119 of this chapter or the equivalent thereof.

[[Page 48494]]

(5) New programming. Video programming that is first published or

exhibited on or after January 1, 1998.

(6) Pre-rule programming. (i) Video programming that was first

published or exhibited before January 1, 1998. (ii) Video programming

first published or exhibited for display on television receivers

equipped for display of digital transmissions or formatted for such

transmission and exhibition prior to the date on which such television

receivers must, by Commission rule, be equipped with built-in decoder

circuitry designed to display closed-captioned digital television

transmissions.

(7) Nonexempt programming. Video programming that is not exempt

under paragraph (d) of this section and, accordingly, is subject to

closed captioning requirements set forth in this section.

(b) Requirements for closed captioning of video programming--(1)

Requirements for new programming. Video programming distributors must

provide closed captioning for nonexempt video programming that is being

distributed and exhibited on each channel during each calendar quarter

in accordance with the following requirements:

(i) Between January 1, 2000, and December 31, 2001, video

programming distributors shall provide at least 450 hours of captioned

video programming, or if the video programming distributor provides

less than 450 hours of new nonexempt video programming, then 95% of its

new nonexempt video programming must be provided with captions;

(ii) Between January 1, 2002, and December 31, 2003, video

programming distributors shall provide at least 900 hours of captioned

video programming, or if the video programming distributor provides

less than 900 hours of new nonexempt video programming, then 95% of its

new nonexempt video programming must be provided with captions;

(iii) Between January 1, 2004, and December 31, 2005, video

programming distributors shall provide at least an average of 1350

hours of captioned video programming, or if the video programming

distributor provides less than 1350 hours of new nonexempt video

programming, then 95% of its new nonexempt video programming must be

provided with captions; and

(iv) As of January 1, 2006, and thereafter, 95% of the programming

distributor's new nonexempt video programming must be provided with

captions.

(2) Requirements for pre-rule programming. As of January 1, 2008,

and thereafter, 75% of the programming distributor's pre-rule nonexempt

video programming being distributed and exhibited on each channel

during each calendar quarter must be provided with closed captioning.

(3) Video programming distributors shall continue to provide

captioned video programming at substantially the same level as the

average level of captioning that they provided during the first 6

months of 1997 even if that amount of captioning exceeds the

requirements otherwise set forth in this section.

(c) Obligation to pass through captions of already captioned

programs.--All video programming distributors shall deliver all

programming received from the video programming owner or other

origination source containing closed captioning to receiving television

households with the original closed captioning data intact in a format

that can be recovered and displayed by decoders meeting the standards

of Sec. 15.119 of this chapter unless such programming is recaptioned

or the captions are reformatted by the programming distributor.

(d) Exempt programs and providers.--For purposes of determining

compliance with this section, any video programming or video

programming provider that meets one or more of the following criteria

shall be exempt to the extent specified in this paragraph.

(1) Programming subject to contractual captioning restrictions.

Video programming that is subject to a contract in effect on or before

February 8, 1996, but not any extension or renewal of such contract,

for which an obligation to provide closed captioning would constitute a

breach of contract.

(2) Video programming or video programming provider for which the

captioning requirement has been waived. Any video programming or video

programming provider for which the Commission has determined that a

requirement for closed captioning imposes an undue burden on the basis

of a petition for exemption filed in accordance with the procedures

specified in paragraph (f) of this section.

(3) Non-english language programming. All programming for which the

audio is in a language other than English, except that scripted

programming that can be captioned using the ``electronic news room''

technique is not exempt.

(4) Primarily textual programming. Video programming or portions of

video programming for which the content of the soundtrack is displayed

visually through text or graphics (e.g., program schedule channels or

community bulletin boards).

(5) Programming distributed in the late night hours. Programming

that is being distributed to residential households between 2 a.m. and

6 a.m. local time. Video programming distributors providing a channel

that consists of a service that is distributed and exhibited for

viewing in more than a single time zone shall be exempt from closed

captioning that service for any continuous 4 hour time period they may

select, commencing not earlier than 12 a.m. local time and ending not

later than 7 a.m. local time in any location where that service is

intended for viewing. This exemption is to be determined based on the

primary reception locations and remains applicable even if the

transmission is accessible and distributed or exhibited in other time

zones on a secondary basis. Video programming distributors providing

service outside of the 48 contiguous states may treat as exempt

programming that is exempt under this paragraph when distributed in the

contiguous states.

(6) Interstitials, promotional announcements and public service

announcements. Interstitial material, promotional announcements, and

public service announcements that are 10 minutes or less in duration.

(7) ITFS programming. Video programming produced for the

instructional television fixed service (ITFS).

(8) Locally produced and distributed non-news programming with

limited repeat value. Programming that is locally produced by the video

programming distributor, has no repeat value, is of local public

interest, is not news programming, and for which the ``electronic news

room'' technique of captioning is unavailable.

(9) Programming on new networks. Programming on a video programming

network for the first four years after it begins operation.

(10) Primarily non-vocal musical programming. Programming that

consists primarily of non-vocal music.

(11) Captioning expense in excess of 2% of gross revenues. No video

programming provider shall be required to expend any money to caption

any video programming if such expenditure would exceed 2% of the gross

revenues received from that channel during the previous calendar year.

(12) Channels producing revenues of under $3,000,000. No video

programming provider shall be required to expend any money to caption

any channel of video programming producing annual gross revenues of

less

[[Page 48495]]

than $3,000,000 during the previous calendar year other than the

obligation to pass through video programming already captioned when

received pursuant to paragraph (c) of this section.

(e) Responsibility for and determination of compliance.--(1)

Compliance shall be calculated on a per channel, calendar quarter

basis;

(2) Open captioning or subtitles in the language of the target

audience may be used in lieu of closed captioning;

(3) Live programming or repeats of programming originally

transmitted live that are captioned using the so-called ``electronic

news room'' technique will be considered captioned. The live portions

of noncommercial broadcasters' fundraising activities that use

automated software to create a continuous captioned message will be

considered captioned;

(4) Compliance will be required with respect to the type of video

programming generally distributed to residential households.

Programming produced solely for closed circuit or private distribution

is not covered by these rules;

(5) Video programming that is exempt pursuant to paragraph (d) of

this section that contains captions, except video programming exempt

pursuant to paragraph (d)(5) of this section (late night hours

exemption), can count towards the compliance with the requirements for

new programming prior to January 1, 2006. Video programming that is

exempt pursuant to paragraph (d) of this section that contains

captions, except that video programming exempt pursuant to paragraph

(d)(5) of this section (late night hours exemption), can count towards

compliance with the requirements for pre-rule programming.

(6) For purposes of paragraph (d)(11) of this section, captioning

expenses include direct expenditures for captioning as well as

allowable costs specifically allocated by a programming supplier

through the price of the video programming to that video programming

provider. To be an allowable allocated cost, a programming supplier may

not allocate more than 100% of the costs of captioning to individual

video programming providers. A programming supplier may allocate the

captioning costs only once and may use any commercially reasonable

allocation method;

(7) For purposes of paragraphs (d)(11) and (d)(12) of this section,

annual gross revenues shall be calculated for each channel individually

based on revenues received in the preceding calendar year from all

sources related to the programming on that channel. Revenue for

channels shared between network and local programming shall be

separately calculated for network and for non-network programming, with

neither the network nor the local video programming provider being

required to spend more than 2% of its revenues for captioning. Thus,

for example, compliance with respect to a network service distributed

by a multichannel video service distributor, such as a cable operator,

would be calculated based on the revenues received by the network

itself (as would the related captioning expenditure). For local service

providers such as broadcasters, advertising revenues from station-

controlled inventory would be included. For cable operators providing

local origination programming, the annual gross revenues received for

each channel will be used to determine compliance. Evidence of

compliance could include certification from the network supplier that

the requirements of the test had been met. Multichannel video

programming distributors, in calculating non-network revenues for a

channel offered to subscribers as part of a multichannel package or

tier, will not include a pro rata share of subscriber revenues, but

will include all other revenues from the channel, including advertising

and ancillary revenues. Revenues for channels supported by direct sales

of products will include only the revenues from the product sales

activity (e.g., sales commissions) and not the revenues from the actual

products offered to subscribers. Evidence of compliance could include

certification from the network supplier that the requirements of this

test have been met.

(8) If two or more networks (or sources of programming) share a

single channel, that channel shall be considered to be in compliance if

each of the sources of video programming are in compliance where they

are carried on a full time basis;

(9) Video programming distributors shall not be required to provide

closed captioning for video programming that is by law not subject to

their editorial control, including but not limited to the signals of

television broadcast stations distributed pursuant to sections 614 and

615 of the Communications Act or pursuant to the compulsory copyright

licensing provisions of sections 111 and 119 of the Copyright Act

(Title 17 U.S.C. 111 and 119); programming involving candidates for

public office covered by sections 315 and 312 of the Communications Act

and associated policies; commercial leased access, public access,

governmental and educational access programming carried pursuant to

sections 611 and 612 of the Communications Act; video programming

distributed by direct broadcast satellite (DBS) services in compliance

with the noncommercial programming requirement pursuant to section

335(b)(3) of the Communications Act to the extent such video

programming is exempt from the editorial control of the video

programming provider; and video programming distributed by a common

carrier or that is distributed on an open video system pursuant to

section 653 of the Communications Act by an entity other than the open

video system operator. To the extent such video programming is not

otherwise exempt from captioning, the entity that contracts for its

distribution shall be required to comply with the closed captioning

requirements of this section.

(f) Procedures for exemptions based on undue burden.--(1) A video

programming provider, video programming producer or video programming

owner may petition the Commission for a full or partial exemption from

the closed captioning requirements. Exemptions may be granted, in whole

or in part, for a channel of video programming, a category or type of

video programming, an individual video service, a specific video

program or a video programming provider upon a finding that the closed

captioning requirements will result in an undue burden.

(2) A petition for an exemption must be supported by sufficient

evidence to demonstrate that compliance with the requirements to closed

caption video programming would cause an undue burden. The term ``undue

burden'' means significant difficulty or expense. Factors to be

considered when determining whether the requirements for closed

captioning impose an undue burden include:

(i) The nature and cost of the closed captions for the programming;

(ii) The impact on the operation of the provider or program owner;

(iii) The financial resources of the provider or program owner; and

(iv) The type of operations of the provider or program owner.

(3) In addition to these factors, the petition shall describe any

other factors the petitioner deems relevant to the Commission's final

determination and any available alternatives that might constitute a

reasonable substitute for the closed captioning requirements including,

but not limited to, text or graphic display of the content of the audio

portion of the programming. Undue burden shall be evaluated with regard

to the individual outlet.

[[Page 48496]]

(4) An original and two (2) copies of a petition requesting an

exemption based on the undue burden standard, and all subsequent

pleadings, shall be filed in accordance with Sec. 0.401(a) of this

chapter.

(5) The Commission will place the petition on public notice.

(6) Any interested person may file comments or oppositions to the

petition within 30 days of the public notice of the petition. Within 20

days of the close of the comment period, the petitioner may reply to

any comments or oppositions filed.

(7) Comments or oppositions to the petition shall be served on the

petitioner and shall include a certification that the petitioner was

served with a copy. Replies to comments or oppositions shall be served

on the commenting or opposing party and shall include a certification

that the commenter was served with a copy.

(8) Upon a showing of good cause, the Commission may lengthen or

shorten any comment period and waive or establish other procedural

requirements.

(9) All petitions and responsive pleadings shall contain a

detailed, full showing, supported by affidavit, of any facts or

considerations relied on.

(10) The Commission may deny or approve, in whole or in part, a

petition for an undue burden exemption from the closed captioning

requirements.

(11) During the pendency of an undue burden determination, the

video programming subject to the request for exemption shall be

considered exempt from the closed captioning requirements.

(g) Complaint procedures.--(1) No complaint concerning an alleged

violation of the closed captioning requirements of this section shall

be filed with the Commission unless such complaint is first sent to the

video programming distributor responsible for delivery and exhibition

of the video programming. A complaint must be in writing, must state

with specificity the alleged Commission rule violated and must include

some evidence of the alleged rule violation. In the case of an alleged

violation by a television broadcast station or other programming for

which the video programming distributor is exempt from closed

captioning responsibility pursuant to paragraph (e)(9) of this section,

the complaint shall be sent directly to the station or owner of the

programming. A video programming distributor receiving a complaint

regarding such programming must forward the complaint within seven days

of receipt to the programmer or send written instructions to the

complainant on how to refile with the programmer.

(2) A complaint will not be considered if it is filed with the

video programming distributor later than the end of the calendar

quarter following the calendar quarter in which the alleged violation

has occurred.

(3) The video programming distributor must respond in writing to a

complaint no later than 45 days after the end of the calendar quarter

in which the violation is alleged to have occurred or 45 days after

receipt of a written complaint, whichever is later.

(4) If a video programming distributor fails to respond to a

complaint or a dispute remains following the initial complaint

resolution procedures, a complaint may be filed with the Commission

within 30 days after the time allotted for the video programming

distributor to respond has ended. An original and two (2) copies of the

complaint, and all subsequent pleadings shall be filed in accordance

with Sec. 0.401(a) of this chapter. The complaint shall include

evidence that demonstrates the alleged violation of the closed

captioning requirements of this section and shall certify that a copy

of the complaint and the supporting evidence was first directed to the

video programming distributor. A copy of the complaint and any

supporting documentation must be served on the video programming

distributor.

(5) The video programming distributor shall have 15 days to respond

to the complaint. In response to a complaint, a video programming

distributor is obligated to provide the Commission with sufficient

records and documentation to demonstrate that it is in compliance with

the Commission's rules. The response to the complaint shall be served

on the complainant.

(6) Certifications from programming suppliers, including

programming producers, programming owners, networks, syndicators and

other distributors, may be relied on to demonstrate compliance.

Distributors will not be held responsible for situations where a

program source falsely certifies that programming delivered to the

distributor meets our captioning requirements if the distributor is

unaware that the certification is false. Video programming providers

may rely on the accuracy of certifications. Appropriate action may be

taken with respect to deliberate falsifications.

(7) The Commission will review the complaint, including all

supporting evidence, and determine whether a violation has occurred.

The Commission shall, as needed, request additional information from

the video programming provider.

(8) If the Commission finds that a violation has occurred,

penalties may be imposed, including a requirement that the video

programming distributor deliver video programming containing closed

captioning in an amount exceeding that specified in paragraph (b) of

this section in a future time period.

(h) Private rights of action prohibited.--Nothing in this section

shall be construed to authorize any private right of action to enforce

any requirement of this section. The Commission shall have exclusive

jurisdiction with respect to any complaint under this section.

[FR Doc. 97-24504 Filed 9-15-97; 8:45 am]

BILLING CODE 6712-01-P