[Federal Register Volume 63, Number 202 (Tuesday, October 20, 1998)]
[Rules and Regulations]
[Pages 55959-55963]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-27989]


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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]
BILLING CODE 6712-01-U