Closed Captioning of Video Programming

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 79

[MM Docket No. 95-176; FCC 98-236]

Closed Captioning of Video Programming

AGENCY: Federal Communications Commission.

ACTION: Final rule; petition on reconsideration.

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SUMMARY: The Commission amends its closed captioning rules in response

to nine petitions for reconsideration of the rules adopted in August

1997. Generally the rules require the closed captioning of video

programming and is intended to ensure the accessibility of video

programming to persons with hearing disabilities. On reconsideration,

the Commission amends its closed captioning rules in order to better

comply with the statutory mandate to provide accessibility to persons

with hearing disabilities.

EFFECTIVE DATE: November 19, 1998.

FOR FURTHER INFORMATION, CONTACT: John Adams or Marcia Glauberman,

Cable Services Bureau, (202) 418-7200, TTY (202) 418-7172.

SUPPLEMENTARY INFORMATION: This is a synopsis of the Order on

Reconsideration in MM Docket No. 95-176, FCC 98-236, adopted September

17, 1998 and released October 2, 1998. The complete text of this Order

on Reconsideration 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, TTY (202) 293-8810, 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 Order on Reconsideration has been analyzed with respect to the

Paperwork Reduction Act of 1995 and has been found to contain no new or

modified information collection requirements on the public.

Synopsis of Order on Reconsideration

1. On August 7, 1997, the Commission adopted a Report and Order

(``R&O''), summarized at 62 FR 48487 (September 16, 1997), implementing

section 713 of the Communications Act of 1934, as amended, 47 U.S.C.

613. Section 713 required the Commission to prescribe rules and

implementation schedules for the closed captioning of video programming

and to establish appropriate exemptions. The Order on Reconsideration

(``Order'') addresses nine petitions for reconsideration of the Report

and Order. By this Order, the Commission amends its closed captioning

rules, in part, in response to the petitions for reconsideration in

order to better ensure the accessibility of video programming to

persons with hearing disabilities.

2. Section 713 generally required the Commission to ensure that

``video programming first published or exhibited after the effective

date of such rules is fully accessible through the provision of closed

caption * * * '' In the R&O, the Commission adopted an eight year

transition period for the captioning of new nonexempt programming

(i.e., that first published or exhibited on or after January 1, 1998,

the effective date of the rules). The Commission established interim

benchmarks for required amounts of closed captioning during the

transition period. Effective January 1, 2006, the end of the transition

period, 95% of all new nonexempt video programming provided on each

channel during each calendar quarter was required to be captioned.

3. On reconsideration, we conclude that our decision to consider

the captioning of 95% of each channel's new nonexempt video programming

to be fully accessible is not consistent with Congress' objective when

it enacted Section 713. Therefore, we define full accessibility to be

the captioning of 100% of all new nonexempt video programming and will

require all such programming to be captioned at the end of the eight

year transition period. Accordingly, after January 1, 2006, 100% of the

programming of each channel's new nonexempt video

[[Page 55960]]

programming must be provided with captions.

4. Section 713 required the Commission to maximize the

accessibility of video programming first published or exhibited prior

to the effective date of our rules the provision of closed captioning.

Programming published or exhibited prior to January 1, 1998, is defined

as pre-rule. In the R&O, the Commission adopted a ten year transition

period with no interim benchmarks. Under the rules, effective January

1, 2008, the end of the transition period, 75% of all pre-rule

nonexempt programming on each channel during each calendar must include

closed captioning.

5. On reconsideration, the Commission clarifies that for purposes

of defining pre-rule programming, the relevant date of first exhibition

or publication is its first exhibition or publication by any

distribution method, including theatrical and home video release as

well as television distribution.

6. The Commission also clarifies the application of the rules to

digital television (``DTV'') programming. In the R&O, we defined

certain types of digital programming as ``pre-rule programming'' until

standards relating to the preparation of digital programming for

display on digital receivers are complete. We clarify that this

determination is narrow in scope and does not apply to programming that

is transmitted in a digital format for display on conventional analog

television receivers. This narrow exemption means only that the version

of the program prepared or formatted ``for display on television

receivers equipped for display of digital transmission'' prior to the

applicable date will fall within the pre-rule category and be subject

to captioning in accordance with the pre-rule schedule. With this

clarification, we believe the existing rule properly accounts for the

brief period of time during which the standards process can be

completed.

7. In the R&O, the Commission did not establish interim benchmarks

for the captioning of pre-rule programming. However, we stated that we

would monitor the implementation of closed captioning for pre-rule

programming and conduct a review of the industry's progress in four

years. On reconsideration, we reiterate our intent to conduct such a

review. We also conclude that, in order to comply with the statutory

mandate to ensure that video programming providers or owners maximize

the accessibility of pre-rule programming it is necessary to establish

at least one benchmark for pre-rule programming. Thus, we amend the

rules to require at least 30% of a channel's pre-rule programming be

provided with captions beginning on January 1, 2003. To the extent that

the amount of pre-rule programming captioned to comply with the

requirement that a video programming distributor provide captions at

substantially the same level as the average level of captioning that it

provided during the first six months of 1997 exceeds this 30%

benchmark, a distributor must continue to caption such programming at

the existing level consistent with our prior decision.

8. In the R&O, we determined that we would allow video programmers

to count, as part of compliance with the closed captioning rules, any

captions using the electronic newsroom (``ENR'') methodology. ENR

captioning can only be used to convert the dialogue included on a

teleprompter script into captions and does not caption live interviews,

field reports or late-breaking weather and sports that are not

scripted. As a result, persons with hearing disabilities do not have

full access when ENR is used. After review of the record, on

reconsideration, we are persuaded that we should limit the

circumstances where we will count ENR captioning as a substitute for

real-time captioning. We recognize that, without findings on an

individual basis, it is difficult to determine precisely which video

programming providers have sufficient resources such that real-time

captioning would not be an economic burden. Nonetheless, in order to

ensure full accessibility, we have made our best effort to identify a

class of video programmers for whom a real-time captioning requirement

would not be economically burdensome. Accordingly, beginning January 1,

2000, at the first benchmark, the four major national broadcast

networks (i.e., ABC, CBS, Fox and NBC), broadcast stations affiliated

with these networks in the top 25 television markets as defined by

Nielsen's Designated Market Areas (``DMAs''), and nonbroadcast networks

serving 50% or more of the total number of multichannel video

programming distributor (``MVPD'') households will not be allowed to

count ENR captioned programming toward compliance with captioning

requirements. Whenever a broadcast television station, a broadcast

television network or a nonbroadcast network satisfies one of these

criteria, it becomes subject to the limitations we are placing on the

use of ENR for compliance with the rules.

9. Section 713 authorized the Commission to adopt exemptions for

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

the provision of closed captioning would be economically burdensome. In

the Order, we adopt several amendments to the exemptions established in

the R&O.

10. In the R&O, we exempted new networks from our captioning

obligations during their first four years of operations. On

reconsideration, we will allow new networks launched prior to the

effective date of the rules that have not yet reached their fourth

anniversary by that date to be exempt for a four year period beginning

on January 1, 1998. This limited expansion of the new network exemption

will assist numerous nascent networks that continue to experience

growing difficulties.

11. In the R&O, we exempted programming produced and distributed by

ITFS licensees. We conclude that the current rules unintentionally

limit the scope of the ITFS exemption. Therefore, we amend

Sec. 79.1(d)(7) to exempt video programming transmitted by ITFS

licensee pursuant to its permitted educational operations.

12. We amend the rules to exempt instructional programming that is

locally produced by public television stations for use in grades K-12

and post secondary schools. In adopting this exemption we remain

confident that other Federal requirements will ensure that adequate

efforts will be taken to make this programming accessible on a case by

case basis.

13. In the R&O, we exempted non-English language programming other

than that which can be captioned using ENR. We generally reaffirm this

decision. However, on reconsideration, we find it appropriate to narrow

this exemption and distinguish Spanish language programming from other

non-English language programming. Accordingly, we will adopt a 12 year

transition for new nonexempt Spanish language programming and a 14 year

transition period for pre-rule nonexempt Spanish language programming.

We will establish three benchmarks for new programming and one

benchmark for pre-rule programming similar to those adopted for

nonexempt English programming.

14. We reassert our previous conclusion that short-form advertising

is not covered by Section 713. As we stated in the R&O, while

programming and advertising may be treated the same in some contexts,

here we conclude that it is reasonable to define short-form advertising

as separate from programming and thus not subject it to the captioning

obligations.

15. In the R&O, we decided to adopt an enforcement mechanism based

on consumer complaints initially directed

[[Page 55961]]

to the video programming distributors (e.g., the broadcast station,

cable operator). We generally retain the enforcement procedures adopted

in the R&O and will continue to rely primarily on the complaint process

to enforce our captioning requirements. We will not adopt recordkeeping

or reporting requirements as they would impose unnecessary

administrative burdens on video programming distributors and the

Commission. On reconsideration, however, we believe it is important to

establish a means to further ensure compliance with our rules and we

plan to conduct random audits of captioning. In conducting such audits,

we may request the records of broadcasters or MVPDs or monitor the

captioning provided by individual networks. We believe that the

information gathered through these audits will be an important factor

in monitoring the implementation of the captioning requirements, assist

consumers should they find it necessary to file a complaint, and assist

video programming providers to comply with our rules.

16. We also clarify several rules in the Order in response to

issues raised in the petitions for reconsideration. We reiterated the

requirement that, during the transition period, video programming

providers must, at least, maintain substantially the same level of

captioning that they provided during the first six months of 1997. We

noted that this requirement was tempered by the word ``substantially''

to ensure flexibility in its enforcement. We explain that locally

produced non-news programming is exempt only if it has no repeat value.

We also clarify that network compensation and value of barter

transactions should be included in revenue calculations for exemptions

based on revenue.

Regulatory Flexibility Act Certification

17. As required by the Regulatory Flexibility Act (``RFA''), an

Initial Regulatory Flexibility Analysis (``IRFA'') was incorporated

into the Notice of Proposed Rulemaking (``NPRM'') in this proceeding.

The Commission 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. Based on the comments in response to

the NPRM, the Commission included a Final Regulatory Flexibility

Analysis (``FRFA'') into the R&O. While no petitioners seeking

reconsideration of the R&O raised issues directly related to the FRFA,

the Commission is amending the rules in a manner that may affect small

entities. Accordingly, this Supplemental Final Regulatory Flexibility

Analysis (``Supplemental FRFA'') addresses those amendments and

conforms to the RFA.

18. 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. The statutory objective of

the closed captioning provisions is to promote the increased

accessibility of video programming for persons with hearing

disabilities. The Commission adopted the R&O in this proceeding on

August 7, 1997, promulgating rules to implement this mandate. The Order

clarifies and refines these rules in conformance with Section 713.

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

Response to the FRFA: No parties address the FRFA in their petitions

for reconsideration, or any subsequent filings. We have, however,

addressed, on our own motion, steps taken to further minimize the

effect of these requirements on small entities.

20. 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 may 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

Small Business Administration (``SBA'').

21. As noted, an FRFA was incorporated into the R&O. In that

analysis, the Commission described in detail the various kinds of small

business entities that may be affected by these rules. Those entities

consist of program producers and distributors, broadcast stations and

small multichannel video programming distributors including cable

system operators, multipoint distribution systems, direct broadcast

satellite services and home satellite dishes, open video systems and

satellite master antenna systems. In the Order, we address petitions

for reconsideration filed in response to the R&O. In this Supplemental

FRFA, we incorporate by reference the description and estimate of the

number of small entities from the previous FRFA in this proceeding,

subject to the following amendments.

22. Open Video Systems (``OVS''): As noted in the R&O the

definition of a small entity in the context of cable or other pay

television service includes all such companies generating $ 11million

or less in annual receipts. As of this date, the Commission has

approved five additional applications for OVS operators, bringing the

total number of certified operators to 14. Two more applications are

pending. Of the entities authorized to provide OVS service, several are

only recently approved and are not actually providing service and

generating revenue. Little financial information is available for the

many of entities authorized to provide OVS that are not yet

operational. Given that some of these entities have not yet begun to

generate revenues, we believe that our original conclusion that at

least some OVS operators qualify as small entities remains sound.

23. Local Multipoint Distribution Service (``LMDS''): As noted in

the R&O, the SBA has developed a definition of small entity for cable

and other pay television services which includes all such companies

generating $11 million or less in annual receipts. The Commission

concluded its LMDS spectrum auction on March 25, 1998. Of the 139

successful bidders, 93 qualified as small businesses. We are unable to

determine how many of these small businesses will use the available

spectrum to provide video programming services. We believe, however,

that our original determination that at least some of these licensees

will provide video programming services and will thus qualify as small

entities affected by our closed captioning requirements is correct.

24. Description of Reporting, Recordkeeping and Other Compliance

Requirements: We did not prescribe reporting requirements in the R&O

and have declined to do so in the Order. While parties representing

persons with hearing disabilities petitioned for the adoption of such

requirements on reconsideration, we believe that our enforcement

process alleviates the need for reporting and its associated burdens.

Thus, we will not impose recordkeeping requirements for video

programming distributors. Rather, we shall allow video programming

distributors to exercise their own discretion and only require that

they retain records sufficient to demonstrate compliance with our

rules. In order to further relieve small video programming distributors

of any unnecessary recordkeeping burden, we also permit

[[Page 55962]]

video programming distributors to rely on certifications from the

producers or owners of the programming to demonstrate compliance with

our closed captioning rules. At the same time we recognize the concerns

that the hearing disabled community has raised regarding the need to

monitor and ensure compliance with our closed captioning requirements.

Accordingly, on reconsideration we stated that the Commission intends

to conduct random audits of video programming as needed to ensure

compliance with the captioning requirements.

25. Steps Taken to Minimize Significant Economic Impact On Small

Entities and Significant Alternatives Considered: In R&O, we sought 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. The actions we are taking on reconsideration

further refine the closed captioning rules so as to advance the

Congressional goal and further minimize unnecessary burdens on small

entities. For example, we clarify the rules to exempt all programming

distributed by ITFS licensees pursuant to its permitted educational

operations regardless of whether the programming is produced by the

ITFS licensee or a third party. We establish an exemption for

instructional programming that is locally produced by public television

stations for use in grades K-12 and post secondary schools. We also

expand the existing new network exemption to provide the full four year

exemption to networks that commenced operations within four years of

the effective date of the closed captioning rules. This expansion of

the new network exemption provides relief to recently launched emerging

networks without profoundly affecting the overall availability of

captioned programming.

Ordering Clauses

26. Accordingly, it is ordered that the Petitions for

Reconsideration in MM Docket No. 95-176 which pertain to the closed

captioning of video programming are granted in part and denied in part,

as provided herein.

27. It is further 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, Part 79 of the Commission's

rules is hereby amended. The amendments to 47 CFR 79.1 shall be

effective November 19, 1998.

28. It is further ordered that the Commission's Office of Public

Affairs, Reference Operations Division, shall send a copy of this Order

on Reconsideration, including the Supplemental 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, Public Law 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.

Magalie Roman Salas,

Secretary.

Rule Changes

Part 79 of Title 47 of the Code of Federal Regulations is amended

as follows:

PART 79--CLOSED CAPTIONING OF VIDEO PROGRAMMING

1. The authority citation for part 79 continues to read as follows:

Authority: 47 U.S.C. 613.

2. Section 79.1 is amended by revising paragraphs (b), (d)(3),

(d)(7), (d)(8) and (d)(9), adding a new paragraph (d)(13), revising

(e)(3) and adding a new paragraph (e)(10) to read as follows:

Sec. 79.1 Closed captioning of video programming.

* * * * *

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

Requirements for new English language 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, a video

programming distributor shall provide at least 450 hours of captioned

video programming or all of its new nonexempt video programming must be

provided with captions, whichever is less;

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

programming distributor shall provide at least 900 hours of captioned

video programming or all of its new nonexempt video programming must be

provided with captions, whichever is less;

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

programming distributor shall provide at least an average of 1350 hours

of captioned video programming or all of its new nonexempt video

programming must be provided with captions, whichever is less; and

(iv) As of January 1, 2006, and thereafter, 100% of the programming

distributor's new nonexempt video programming must be provided with

captions.

(2) Requirements for pre-rule English language programming. (i)

After January 1, 2003, 30% 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.

(ii) 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) Requirements for new Spanish language programming. Video

programming distributors must provide closed captioning for nonexempt

Spanish language 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, 2001, and December 31, 2003, a video

programming distributor shall provide at least 450 hours of captioned

Spanish language video programming or all of its new nonexempt Spanish

language video programming must be provided with captions, whichever is

less;

(ii) Between January 1, 2004, and December 31, 2006, a video

programming distributor shall provide at least 900 hours of captioned

Spanish language video programming or all of its new nonexempt Spanish

language video programming must be provided with captions, whichever is

less;

(iii) Between January 1, 2007, and December 31, 2009, a video

programming distributor shall provide at least an average of 1350 hours

of captioned Spanish language video programming or all of its new

nonexempt Spanish language video programming must be provided with

captions, whichever is less; and

(iv) As of January 1, 2010, and thereafter, 100% of the programming

distributor's new nonexempt Spanish language video programming must be

provided with captions.

(4) Requirements for Spanish language pre-rule programming. (i)

After January 1, 2005, 30% of the programming distributor's pre-rule

nonexempt Spanish language video

[[Page 55963]]

programming being distributed and exhibited on each channel during each

calendar quarter must be provided with closed captioning.

(ii) As of January 1, 2012, and thereafter, 75% of the programming

distributor's pre-rule nonexempt Spanish language video programming

being distributed and exhibited on each channel during each calendar

quarter must be provided with closed captioning.

(5) 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 six (6)

months of 1997 even if that amount of captioning exceeds the

requirements otherwise set forth in this section.

* * * * *

(d) * * *

(3) Programming other than English or Spanish language. All

programming for which the audio is in a language other than English or

Spanish, except that scripted programming that can be captioned using

the ``electronic news room'' technique is not exempt.

* * * * *

(7) ITFS programming. Video programming transmitted by an

Instructional Television Fixed Service licensee pursuant to

Secs. 74.931 (a), (b) or (c) of the rules.

(8) Locally produced and distributed non-news programming with no

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, except that

programming on a video programming network that was in operation less

than four (4) years on January 1,1998 is exempt until January 1, 2002.

* * * * *

(13) Locally produced educational programming. Instructional

programming that is locally produced by public television stations for

use in grades K-12 and post secondary schools.

(e) * * *

(3) Live programming or repeats of programming originally

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

news room'' or ENR technique will be considered captioned, except that

effective January 1, 2000, and thereafter, the major national broadcast

television networks (i.e., ABC, CBS, Fox and NBC), affiliates of these

networks in the top 25 television markets as defined by Nielsen's

Designated Market Areas (DMAs) and national nonbroadcast networks

serving at least 50% of all homes subscribing to multichannel video

programming services shall not count ENR captioned programming towards

compliance with these rules. The live portions of noncommercial

broadcasters' fundraising activities that use automated software to

create a continuous captioned message will be considered captioned;

* * * * *

(10) In evaluating whether a video programming provider has

complied with the requirement that all new nonexempt video programming

must include closed captioning, the Commission will consider showings

that any lack of captioning was de minimis and reasonable under the

circumstances.

* * * * *

[FR Doc. 98-27989 Filed 10-19-98; 8:45 am]

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