[Federal Register Volume 79, Number 150 (Tuesday, August 5, 2014)]
[Proposed Rules]
[Pages 45397-45407]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-18201]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 79

[MB Docket No. 11-154; FCC 14-97]


Closed Captioning of Internet Protocol-Delivered Video 
Programming: Implementation of the Twenty-First Century Communications 
and Video Accessibility Act of 2010; Closed Captioning of Internet 
Protocol-Delivered Video Clips

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In this document, the Commission seeks comment on issues 
related to closed captioning of video clips delivered using Internet 
protocol (``IP''). The Commission explores application of the IP closed 
captioning rules for video clips to third party distributors not 
currently subject to the new video clips requirements. The Commission 
also asks whether it should decrease or eliminate the grace periods 
within which IP-delivered video clips of video programming previously 
shown live or near-live on television must be captioned. Further, the 
Commission invites comment on application of the IP closed captioning 
requirements to two additional categories of video clips, which are 
called ``mash-ups'' and ``advance'' video clips.

DATES: Comments are due on or before October 6, 2014; reply comments 
are due on or before November 3, 2014.

ADDRESSES: You may submit comments, identified by MB Docket No. 11-154, 
by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov/. 
Follow the instructions for submitting comments.
     Federal Communications Commission's Web site: 
http://fjallfoss.fcc.gov/ecfs2/">fjallfoss.fcc.gov/ecfs2/. Follow the instructions for submitting 
comments.
     Mail: Filings can be sent by hand or messenger delivery, 
by commercial overnight courier, or by first-class or overnight U.S. 
Postal Service mail. All filings must be addressed to the Commission's 
Secretary, Office of the Secretary, Federal Communications Commission.
     People with Disabilities: Contact the FCC to request 
reasonable accommodations (accessible format documents, sign language 
interpreters, CART, etc.) by email: [email protected] or phone: (202) 418-
0530 or TTY: (202) 418-0432.

For detailed instructions for submitting comments and additional 
information on the rulemaking process, see the SUPPLEMENTARY 
INFORMATION section of this document.

FOR FURTHER INFORMATION CONTACT: Diana Sokolow, [email protected], 
of the Policy Division, Media Bureau, (202) 418-2120.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Second 
Further Notice of Proposed Rulemaking (2nd FNPRM), FCC 14-97, adopted 
on July 11, 2014 and released on July 14, 2014. The full text of this 
document is available for public inspection and copying during regular 
business hours in the FCC Reference Center, Federal Communications 
Commission, 445 12th Street SW., Room CY-A257, Washington, DC 20554. 
This document will also be available via ECFS at http://fjallfoss.fcc.gov/ecfs/. Documents will be available electronically in 
ASCII, Microsoft Word, and/or Adobe Acrobat. The complete text may be 
purchased from the Commission's copy contractor, 445 12th Street SW., 
Room CY-B402, Washington, DC 20554. Alternative formats are available 
for people with disabilities (Braille, large print, electronic files, 
audio format), by sending an email to [email protected] or calling the 
Commission's Consumer and Governmental Affairs Bureau at (202) 418-0530 
(voice), (202) 418-0432 (TTY).
    This 2nd FNPRM seeks comment on a potential new or revised 
information collection requirement. If the Commission adopts a new or 
revised information collection requirement, the Commission will publish 
a separate notice in the Federal Register inviting the public to 
comment on the requirement, as required by the Paperwork Reduction Act 
of 1995, Public Law 104-13 (44 U.S.C. 3501-3520). In addition, pursuant 
to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, 
see 44 U.S.C. 3506(c)(4), the Commission seeks specific comment on how 
it might ``further reduce the information collection burden for small 
business concerns with fewer than 25 employees.''

Synopsis

I. Introduction

    1. In the Second Order on Reconsideration (``Video Clips Order''), 
the Commission concludes that clips of video programming covered by the 
Twenty-First Century Communications and Video Accessibility Act of 2010 
(``CVAA'') must be captioned when delivered using Internet protocol 
(``IP'') and adopts rules in that regard. The attached 2nd FNPRM 
explores the following four issues related to closed captioning of IP-
delivered video clips:
     Application of the IP closed captioning rules to the 
provision of video clips by third party video programming providers and 
distributors;
     Whether in the future we should decrease or eliminate the 
12-hour timeframe within which IP-delivered video clips of video 
programming previously shown live on television must be captioned and 
the eight-hour timeframe within which IP-delivered video clips of video 
programming previously shown near-live on television must be captioned;
     Application of the IP closed captioning requirements to 
files that contain a combination of one or more video clips that have 
been shown on television with captions and online-only content that has 
not (``mash-ups''); and
     Application of the IP closed captioning rules to video 
clips that are added to the video programming distributor's or 
provider's library on or after January 1, 2016 for straight lift clips 
and January 1, 2017 for montages, but before the associated video 
programming is shown on television with captions (``advance'' video 
clips).

[[Page 45398]]

II. Second Further Notice of Proposed Rulemaking

    2. In the following 2nd FNPRM we explore four issues related to 
closed captioning of IP-delivered video clips: (1) Application of the 
IP closed captioning rules to the provision of video clips by third 
party video programming providers and distributors, when the associated 
video programming has been shown on television with captions; (2) 
whether in the future we should decrease or eliminate the 12-hour 
timeframe within which captions may be added to IP-delivered video 
clips of live programming and the eight-hour timeframe within which 
captions may be added to IP-delivered video clips of near-live 
programming; (3) application of the IP closed captioning requirements 
to files that contain a combination of video clips that have been shown 
on television with captions and online-only content (``mash-ups''); and 
(4) application of the IP closed captioning rules to video clips that 
are first added to the video programming distributor's or provider's 
library on or after January 1, 2016 for straight lift clips or January 
1, 2017 for montages, but before the associated video programming is 
shown on television with captions, and which then remain online in the 
distributor's or provider's library after being shown on television.

A. Third Party Video Programming Providers and Distributors

    3. Entities such as news Web sites that do not distribute full-
length video programming may sometimes make video clips available on 
their Web sites. In addition, some entities, such as Hulu, may 
distribute full-length video programming online but do not also 
distribute such programming on television. We do not have an adequate 
record for purposes of applying the IP closed captioning rules to the 
provision of video clips by these and similar entities, which we refer 
to as ``third party'' distributors.\1\ Accordingly, we seek comment on 
the scope of third party IP distribution of video clips that were taken 
from video programming shown on television with captions, the 
relationship between such third parties and the video programming 
owner, and the costs and benefits of imposing the obligation to caption 
video clips on such entities, including small entities.
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    \1\ The Video Clips Order imposes closed captioning requirements 
for IP-delivered video clips, at the present time, to instances in 
which the video programming provider or distributor (as those terms 
are defined in the IP closed captioning rules) posts on its Web site 
or app a video clip of video programming that it published or 
exhibited on television in the United States with captions on or 
after the applicable compliance deadline. References herein to 
``third party'' distributors should be read to include all video 
programming providers and distributors not subject to the Video 
Clips Order as a result of this limitation.
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    4. We seek comment on the third parties that distribute video clips 
of video programming shown on television with captions. What types of 
entities are included in this category, and how many such entities 
exist? We request information on the relationship between these third 
parties and video programming owners. Do the third parties receive 
video clips directly from the video programming owner, or do they 
receive video clips for IP distribution in a different manner? What 
licensing or other agreements exist between video programming owners 
and these third party video programming providers and distributors with 
regard to IP-delivered video clips? Do video programming owners 
sometimes lack knowledge that third parties are distributing their 
video clips via IP, and in what circumstances might that occur? Should 
any rules covering third party distributors be limited to those 
distributors that have a licensing or other formal agreement with the 
video programming owner?
    5. How should we ensure that video clips taken from programming 
shown on television are successfully captioned by third party 
distributors on a timely basis? For example, the general IP closed 
captioning rules that apply to full-length programming require video 
programming owners to send program files to video programming 
distributors and providers with required captions, and they require 
video programming providers and distributors to enable the rendering or 
pass through of all required captions to the end user. Should we impose 
this allocation of responsibility for IP-delivered video clips when the 
video programming provider or distributor did not also publish or 
exhibit the associated video programming on television? Should we 
impose the general IP closed captioning rules in this context, or 
should we impose any differing obligations? For example, the IP closed 
captioning rules require each video programming owner to agree ``[w]ith 
each video programming distributor and provider that such owner 
licenses to distribute video programming directly to the end user 
through a distribution method that uses Internet protocol . . . upon a 
mechanism to inform such distributors and providers on an ongoing basis 
whether video programming is subject to the requirements of this 
section.'' \2\ How would this ``mechanism'' operate in the context of 
video clips covered by these rules when they are provided to third 
party IP distributors? How will third party video programming providers 
and distributors be informed that a video clip already in their library 
has been shown on television with captions? Will the video programming 
owner always know that a video clip previously shown as part of 
television programming has been posted online and by whom? How should 
this impact enforcement, if at all?
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    \2\ 47 CFR 79.4(c)(1)(ii).
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    6. If video clips are initially posted online by a third party 
distributor without captions and later amended to include captions, 
will links to the original posting of the video clip still work? What 
other technical, legal or other issues should we be aware of that may 
impact the ability of third party video programming distributors to 
comply with our IP closed captioning requirements, and how quickly can 
they be addressed? We seek comment on what would be an appropriate 
compliance period. We also seek comment on what obligations, if any, 
should be different when a third party distributor embeds instead of 
hosts the content on its Web site.\3\
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    \3\ When a third party video programming distributor ``embeds'' 
a video clip, it is directing the consumer's browser or video player 
to display a video that is currently hosted on another video 
programming distributor's platform. When a third party video 
programming distributor ``hosts'' a video clip, it is both directing 
the consumer's browser or video player to display the video and 
providing the video file itself.
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    7. We seek comment on our statutory authority over video clips 
provided by third party distributors. As explained in the Video Clips 
Order (published concurrently with this 2nd FNPRM in the Federal 
Register), the CVAA requires that any IP-delivered video programming 
that was shown on television with captions, whether full-length or an 
excerpt, must also be captioned when delivered using IP. What 
requirements do we need to impose in the context of third party 
distributors to ensure that we are fulfilling the requirements and 
goals of the CVAA, which directs the Commission to require ``the 
provision of closed captioning on video programming delivered using 
Internet protocol that was published or exhibited on television with 
captions after the effective date of such regulations''? \4\ Do any 
statutory exemptions apply in this context? For example, should the 
Commission exempt any third party video programming distributors or 
categories of distributors from its video

[[Page 45399]]

clips captioning obligations on the basis that it would be 
``economically burdensome'' for these distributors to comply? \5\ If 
so, parties should provide specific reasons for why the economic burden 
exemption should apply.\6\ If adopted, should such categorical 
exemption expire after a set period of time, subject to renewal if 
warranted?
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    \4\ 47 U.S.C. 613(c)(2)(A).
    \5\ 47 U.S.C. 613(c)(2)(D)(ii) (the regulations ``may exempt any 
service, class of service, program, class of program, equipment, or 
class of equipment for which the Commission has determined that the 
application of such regulations would be economically burdensome for 
the provider of such service, program, or equipment'').
    \6\ Closed Captioning and Video Description of Video 
Programming, Report and Order, 13 FCC Rcd 3272, 3342, paras. 143-145 
(1997) (setting forth the Commission's treatment of class 
exemptions); See Anglers for Christ Ministries, Inc., Memorandum 
Opinion and Order, Order, and Notice of Proposed Rulemaking, 26 FCC 
Rcd 14941, 14958-60, paras. 33-36 (2011) (explaining the different 
application of the term ``economically burdensome'' to case-by-case 
exemptions than to rulemaking decisions to exempt certain categories 
of programming''); Closed Captioning of Internet Protocol-Delivered 
Video Programming: Implementation of the Twenty-First Century 
Communications and Video Accessibility Act of 2010, Report and 
Order, 27 FCC Rcd 787, 828, para. 67 (2012) (``IP Closed Captioning 
Order'') (also noting the distinction between the Commission's 
treatment of these two types of captioning exemptions.
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B. Grace Period for Live and Near-Live Video Clips

    8. As explained in the Video Clips Order, beginning July 1, 2017 we 
require the provision of closed captions on IP-delivered video clips of 
video programming previously shown live or near-live on television with 
captions within 12 hours and eight hours, respectively, after the 
associated video programming is published or exhibited on television in 
the United States with captions. Herein we seek comment on whether in 
the future we should decrease or eliminate this grace period for 
providing captions. We seek comment on the costs of imposing a shorter 
grace period on covered entities, including small entities, in 
comparison to the benefits to consumers of a reduced grace period.
    9. We remain concerned about the impact that delayed access to IP-
delivered video clips of live and near-live programming will have on 
people who are deaf and hard of hearing. For example, breaking news 
aired live on television and initially posted online without closed 
captions effectively excludes these individuals from having timely 
access to this information. We seek comment on the impact that these 
delays will have on people who are deaf and hard of hearing and whether 
continuing to allow these delays is consistent with Congress's intent, 
as expressed in the CVAA, to improve access to video programming 
delivered via the Internet. We also expect that, at some time in the 
future, it will be appropriate to decrease or eliminate this grace 
period because we expect that technology will automate the process such 
that a grace period is no longer needed. We invite comment on the 
timeframe within which we should decrease or eliminate the grace period 
applicable to video clips of live and near-live programming. For 
example, for video clips of live programming, should we provide a grace 
period of six hours beginning July 1, 2018, and three hours beginning 
July 1, 2019? What adjustments should we make to the grace period for 
video clips of near-live programming? We ask commenters to justify any 
differing treatment of video clips of live programming and video clips 
of near-live programming. We also ask industry to submit specific 
comment on the status of technological developments in this regard. 
What steps must industry currently take to prepare captioned video 
clips of live and near-live programming, and how and when might those 
steps be streamlined in the future? To the extent that these delays can 
be reduced, would it be appropriate to adopt a schedule of deadlines 
phasing in shorter grace periods, and if so, what should these 
deadlines be? Would a schedule phasing out these grace periods 
encourage greater technical innovation to automate these captioning 
processes, as well as provide the necessary time to achieve compliance?

C. Combinations of Video Clips and Content Not Televised With Captions 
(``Mash-Ups'')

    10. We seek comment on the application of the IP closed captioning 
requirements to files that contain a combination of one or more video 
clips that have been shown on television with captions, and other 
content (such as online-only content) that has not been shown on 
television with captions. The industry refers to these files as ``mash-
ups.'' We seek comment on the costs to covered entities, including 
small entities, and the benefits of applying the IP closed captioning 
requirements to mash-ups. We seek additional information on issues 
associated with the captioning of the portion of the clip that was 
shown on television with captions. We recognize that any part of the 
video clip that was not shown on television with captions, such as 
online-only content, would not be subject to the IP closed captioning 
requirements.
    11. As explained in the Video Clips Order, the CVAA requires that 
any IP-delivered video programming that was shown on television with 
captions, whether full-length or an excerpt, must also be captioned 
when delivered using IP. Is there any statutory basis on which we could 
exclude from the IP closed captioning requirements video clips embedded 
in mash-ups if the embedded clips were shown on television with 
captions? We seek comment on whether this type of clip is subject to 
any of the exemptions set forth in section 202 of the CVAA. For 
example, if the clips that were shown on television with captions were 
very short or insignificant in comparison to the rest of the mash-up 
that contains online-only content, would the lack of captions be 
considered a ``de minimis'' failure to comply under section 202? If so, 
how would the Commission be able to determine what is a ``de minimis'' 
situation versus one where lack of captions is considered a violation 
of our regulations? That is, what would constitute an insignificant or 
short enough clip sufficient to invoke the ``de minimis'' exemption? 
Alternatively, should the Commission exempt the class of ``mash-ups'' 
from its IP closed captioning rules on the basis that it would be 
``economically burdensome'' for the provider of such clip to comply 
with our rules? \7\ If adopted, should such categorical exemption 
expire after a set period of time, subject to renewal if warranted? 
Parties should provide specific comment on why the Commission's 
economic burden test would apply in this situation and how the 
Commission should apply this test to this class exemption, if adopted. 
Is there any other basis on which the Commission can exclude an 
otherwise covered video clip from the IP closed captioning rules, 
consistent with the CVAA's direction that the Commission ``require the 
provision of closed captioning on video programming delivered using 
Internet protocol that was published or exhibited on television with 
captions after the effective date''? \8\ For example, if an online 
program itself was not shown on television with captions, but rather 
only isolated clips embedded in the program were, does that render the 
program in its entirety (including integrated clips of televised 
captioned programming) outside the scope of the CVAA on the theory that 
the whole program is a new work that does not constitute ``video

[[Page 45400]]

programming . . . that was published or exhibited on television with 
captions''?
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    \7\ 47 U.S.C. 613(c)(2)(D)(ii) (the regulations ``may exempt any 
service, class of service, program, class of program, equipment, or 
class of equipment for which the Commission has determined that the 
application of such regulations would be economically burdensome for 
the provider of such service, program, or equipment'').
    \8\ See 47 U.S.C. 613(c)(2)(A).
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    12. We seek comment on the nature of these types of integrated 
clips. Industry should give us specific examples of such clips and 
describe how prevalent they are. If the Commission applies the IP 
closed captioning requirements to one or more video clips that have 
been shown on television with captions, regardless of whether these 
clips are integrated with other content (such as online-only content) 
that has not been shown on television with captions, how will industry 
comply with such a requirement? That is, we seek comment on the 
technical challenges associated with captioning such clips. Will 
industry need to caption the covered material anew, or will it be able 
to repurpose televised captions? What would be an appropriate 
compliance deadline for captioning of covered clips included in mash-
ups? Would video programming providers and distributors need a grace 
period for captioning the covered clips in mash-ups following the 
airing of the associated video programming on television with captions 
and, if so, what grace period would be appropriate?

D. Advance Video Clips

    13. As stated in the Video Clips Order, we find that further 
information on the technological challenges of captioning advance video 
clips would be useful before we proceed with requiring closed 
captioning for such clips. Accordingly, we invite comment on 
application of the IP closed captioning rules to advance video clips. 
``Advance'' video clips are video clips that are added to the video 
programming distributor's or provider's library on or after January 1, 
2016 for straight lift clips and January 1, 2017 for montages, when the 
associated video programming (including the advance video clips) is 
later shown on television with captions on or after the compliance 
deadline and the advance video clips remain online.\9\ We defer 
application of the IP closed captioning requirements to advance video 
clips pending resolution of this issue. We seek comment on the costs to 
covered entities, including small entities, and the benefits of 
captioning advance video clips.
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    \9\ We clarify that, if a video programming distributor or 
provider posts an advance video clip online, and then re-posts that 
video clip online after the programming is shown on television with 
captions on or after the compliance deadline, the reposted version 
of the clip would not be considered an advance clip since it was not 
posted before the programming was shown on television with captions.
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    14. We understand that video programming distributors and providers 
sometimes add video clips to their libraries shortly before the 
associated video programming is shown on television with captions, and 
we think it is important that IP-delivered advance video clips be made 
accessible to consumers who are deaf or hard of hearing once the 
programming associated with such clips has been shown on television 
with captions. For example, if a broadcast television station places a 
clip filmed on location earlier in the day on its Web site shortly 
before the station's nightly news program, and then the clip is shown 
on television with captions as part of the program, we are concerned 
that consumers who are deaf or hard of hearing would not have access to 
the content of the clip if it remains uncaptioned online.\10\ 
Accordingly, we ask whether we should provide a timeframe within which 
closed captions may be added to IP-delivered advance video clips, once 
the associated video programming is shown on television with captions. 
For example, would 24 hours be an appropriate timeframe for the grace 
period? If not, what timeframe would balance consumers' desire for 
prompt access to IP-delivered advance video clips and industry's need 
for time to identify and provide captions on IP-delivered advance video 
clips? Should we adopt an initial timeframe for the grace period, and 
then decrease or eliminate it over time, in recognition of the 
expectation that technology will automate the process such that a grace 
period will no longer be needed? What compliance deadline should we 
impose for advance clips? We note that in the IP Closed Captioning 
Order (77 FR 19480, Mar. 30, 2012), the Commission gave entities a 
phased-in timeframe for compliance with respect to the captioning of 
full-length programming that is in the video programming provider or 
distributor's online library before it is shown on television with 
captions. Should a similar approach be adopted here? What is the scope 
of the advance clips under consideration? For example, should the scope 
include all advance clips, or should it be limited to clips posted 
online within a certain timeframe, such as seven days, before the 
associated video programming is shown on television? How would any such 
limitation be consistent with the CVAA? For what time period should 
video programming owners, providers, and distributors be required to 
monitor the posting of the advance clip online and the associated video 
programming on television? If a commenter proposes a period of time, we 
seek additional comment on the justification for such proposal, 
including the costs to industry and the benefits to consumers, 
including consumers who are deaf or hard of hearing.
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    \10\ Accordingly, we disagree with NCTA that ``[a]ny rule must 
exclude these `advance' clips from a captioning obligation, and 
should leave to the reasonable judgment of the programmers whether 
the `advance clip' retains value such that replacing it with a 
captioned version makes sense after the program airs on television 
with captions.''
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    15. What is the nature and extent of the difficulties associated 
with captioning advance clips after their associated video programming 
has been shown on television with captions? To what extent and for how 
long does the industry expect that these technological challenges will 
continue to hinder captioning this category of IP-delivered video 
clips? In the IP Closed Captioning Order, the Commission required 
closed captioning of full-length video programming that is in the 
provider's or distributor's library before it is shown on television 
with captions, but it extended the deadlines applicable to such 
programming in recognition of the need to develop processes for finding 
and adding captions to this category of programming.\11\ How should the 
Commission justify any differing treatment of advance IP-delivered 
video clips? Are any differences in treatment justified by Hulu's 
assertion that ``clips have a shorter shelf life for viewership than 
long-form content,'' or are Consumer Groups correct that many video 
clips ``are likely to live on the Internet indefinitely''? For purposes 
of quantifying the burden and difficulty in captioning such clips after 
they appear on television with captions after the applicable deadline, 
we seek comment on the likely volume of advance video clips in 
providers' online libraries. How would the ``mechanism'' referenced 
above apply in the context of such video clips, and how would third 
party video programming distributors and providers comply with a 
requirement to caption them? What is the likelihood that a requirement 
to caption advance video clips will result in the removal of these 
clips and should that factor into our analysis?
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    \11\ Additionally, instead of requiring captions immediately as 
is otherwise the case, the Commission adopted permissible timeframes 
between the posting of the program file and updating it to include 
closed captions.
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    16. Even if advance clips are not excerpts of programs shown on 
television with captions at the time they are initially posted online, 
we invite comment on whether their status changes once the associated 
video programming is shown on television with captions thus triggering 
the captioning requirement. Are there any

[[Page 45401]]

statutory exemptions that would apply to these clips or to a subset of 
these clips? \12\ How would the costs of compliance with such a 
captioning requirement for advance clips compare to the benefits to 
consumers? We ask video programming providers and distributors to 
provide information on their standard practices for removing video 
clips previously posted online. Do video clips tend to remain online 
indefinitely, and if so, why? What aspects of the practices now used to 
post and maintain clips online would need to be changed to comply with 
the imposition of closed captioning requirements for advance video 
clips?
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    \12\ For example, we note that the statute permits exemptions 
due to economic burden. See 47 U.S.C. 613(c)(2)(D)(ii) (permitting 
the Commission's implementing regulations to ``exempt any service, 
class of service, program, class of program, equipment, or class of 
equipment for which the Commission has determined that the 
application of such regulations would be economically burdensome for 
the provider of such service, program, or equipment'').
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III. Procedural Matters

A. Initial Regulatory Flexibility Analysis

    17. As required by the Regulatory Flexibility Act of 1980, as 
amended (``RFA''), the Commission has prepared this present Initial 
Regulatory Flexibility Analysis (``IRFA'') concerning the possible 
significant economic impact on small entities by the policies and rules 
proposed in the 2nd FNPRM. Written public comments are requested on 
this IRFA. Comments must be identified as responses to the IRFA and 
must be filed by the deadlines for comments provided on the first page 
of the item. The Commission will send a copy of the 2nd FNPRM, 
including this IRFA, to the Chief Counsel for Advocacy of the Small 
Business Administration (``SBA''). In addition, the 2nd FNPRM and IRFA 
(or summaries thereof) will be published in the Federal Register.
1. Need for, and Objectives of, the Second Further Notice of Proposed 
Rulemaking
    18. In the Second Order on Reconsideration attached to the 2nd 
FNPRM, as part of the Commission's continued implementation of the 
Twenty-First Century Communications and Video Accessibility Act of 2010 
(``CVAA''), the Commission imposes closed captioning requirements on 
excerpts of video programming, specifically online video clips. In the 
2nd FNPRM attached to that order, the Commission explores the following 
four issues related to closed captioning of video clips delivered via 
Internet protocol (``IP''):
     Application of the IP closed captioning rules to the 
provision of video clips by third party video programming providers and 
distributors;
     Whether in the future we should decrease or eliminate the 
12-hour timeframe within which IP-delivered video clips of video 
programming previously shown live on television must be captioned and 
the eight-hour timeframe within which IP-delivered video clips of video 
programming previously shown near-live on television must be captioned;
     Application of the IP closed captioning requirements to 
files that contain a combination of one or more video clips that have 
been shown on television with captions and online-only content that has 
not (``mash-ups''); and
     Application of the IP closed captioning rules to video 
clips that are added to the video programming distributor's or 
provider's library on or after January 1, 2016 for straight lift clips 
\13\ and January 1, 2017 for montages,\14\ but before the associated 
video programming is shown on television with captions (``advance'' 
video clips).
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    \13\ ``Straight lift'' clips are those that contain a single 
excerpt of a captioned television program with the same video and 
audio that was presented on television.
    \14\ ``Montages'' contain multiple straight lift clips.
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2. Legal Basis
    19. The proposed action is authorized pursuant to sections 4(i), 
4(j), 303, and 713 of the Communications Act of 1934, as amended, 47 
U.S.C. 154(i), 154(j), 303, and 613.
3. Description and Estimate of the Number of Small Entities to Which 
the Proposals Will Apply
    20. 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 rules proposed in the Second Order on 
Reconsideration. The RFA generally defines the term ``small entity'' as 
having the same meaning as the terms ``small business,'' ``small 
organization,'' and ``small governmental jurisdiction.'' In addition, 
the term ``small business'' has the same meaning as the term ``small 
business concern'' 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''). Small entities that may be directly affected by the 
proposals in the 2nd FNPRM are those entities that distribute IP-
delivered clips of video programming and the owners of such 
programming. Such small entities may include television broadcasters, 
multichannel video programming distributors (MVPDs), programmers, and 
other entities that own or distribute video programming. Below are 
descriptions of the small entities that may be affected by the rules 
proposed in the 2nd FNPRM, including, where feasible, an estimate of 
the number of such small entities. In addition, because the 2nd FNPRM 
considers application of the IP closed captioning rules to the 
provision of video clips by third party video programming providers and 
distributors, and because of the difficulty of identifying all such 
third party video programming providers and distributors, we seek 
specific comment on whether such small entities are covered by the 
categories listed below and, if not, on how to identify and estimate 
such small entities.
    21. Small Businesses, Small Organizations, and Small Governmental 
Jurisdictions. Our action may, over time, affect small entities that 
are not easily categorized at present. We therefore describe here, at 
the outset, three comprehensive, statutory small entity size standards. 
First, according to the SBA Office of Advocacy, in 2010, there were 
27.9 million small businesses in the United States. In addition, a 
``small organization'' is generally ``any not-for-profit enterprise 
which is independently owned and operated and is not dominant in its 
field.'' Nationwide, as of 2007, there were approximately 1,621,315 
small organizations. Finally, the term ``small governmental 
jurisdiction'' is defined generally as ``governments of cities, towns, 
townships, villages, school districts, or special districts, with a 
population of less than fifty thousand.'' Census Bureau data for 2011 
indicate that there were 89,476 local governmental jurisdictions in the 
United States. We estimate that, of this total, a substantial majority 
may qualify as ``small governmental jurisdictions.'' Thus, we estimate 
that most governmental jurisdictions are small.
    22. Wired Telecommunications Carriers. The North American Industry 
Classification System (``NAICS'') defines ``Wired Telecommunications 
Carriers'' as follows: ``This industry comprises establishments 
primarily engaged in operating and/or providing access to transmission 
facilities and infrastructure that they own and/or lease for the 
transmission of voice, data, text, sound, and video using wired

[[Page 45402]]

telecommunications networks. Transmission facilities may be based on a 
single technology or a combination of technologies. Establishments in 
this industry use the wired telecommunications network facilities that 
they operate to provide a variety of services, such as wired telephony 
services, including VoIP services; wired (cable) audio and video 
programming distribution; and wired broadband Internet services. By 
exception, establishments providing satellite television distribution 
services using facilities and infrastructure that they operate are 
included in this industry.'' The SBA has developed a small business 
size standard for wireline firms for the broad economic census category 
of ``Wired Telecommunications Carriers.'' Under this category, a 
wireline business is small if it has 1,500 or fewer employees. Census 
data for 2007 shows that there were 31,996 establishments that operated 
for the entire year. Of this total, 30,178 establishments had fewer 
than 100 employees, and 1,818 establishments had 100 or more employees. 
Therefore, under this size standard, we estimate that the majority of 
businesses can be considered small entities.
    23. Cable Television Distribution Services. Since 2007, these 
services have been defined within the broad economic census category of 
Wired Telecommunications Carriers, which category is defined above. The 
SBA has developed a small business size standard for this category, 
which is: All such businesses having 1,500 or fewer employees. Census 
data for 2007 shows that there were 31,996 establishments that operated 
for the entire year. Of this total, 30,178 establishments had fewer 
than 100 employees, and 1,818 establishments had 100 or more employees. 
Therefore, under this size standard, we estimate that the majority of 
businesses can be considered small entities.
    24. Cable Companies and Systems. The Commission has also developed 
its own small business size standards, for the purpose of cable rate 
regulation. Under the Commission's rate regulation rules, a ``small 
cable company'' is one serving 400,000 or fewer subscribers, 
nationwide. According to SNL Kagan, there are 1,258 cable operators. Of 
this total, all but 10 incumbent cable companies are small under this 
size standard. In addition, under the Commission's rules, a ``small 
system'' is a cable system serving 15,000 or fewer subscribers. Current 
Commission records show 4,584 cable systems nationwide. Of this total, 
4,012 cable systems have fewer than 20,000 subscribers, and 572 systems 
have 20,000 subscribers or more, based on the same records. Thus, under 
this standard, we estimate that most cable systems are small.
    25. Cable System Operators (Telecom Act Standard). The 
Communications Act of 1934, as amended, also contains a size standard 
for small cable system operators, which is ``a cable operator that, 
directly or through an affiliate, serves in the aggregate fewer than 1 
percent 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.'' The Commission has determined that an 
operator serving fewer than 677,000 subscribers shall be deemed a small 
operator, if its annual revenues, when combined with the total annual 
revenues of all its affiliates, do not exceed $250 million in the 
aggregate. Based on available data, we find that all but 10 incumbent 
cable operators are small under this size standard. We note that the 
Commission neither requests nor collects information on whether cable 
system operators are affiliated with entities whose gross annual 
revenues exceed $250 million. 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 to estimate with 
greater precision the number of cable system operators that would 
qualify as small cable operators under this definition.
    26. Direct Broadcast Satellite (DBS) Service. DBS service is a 
nationally distributed subscription service that delivers video and 
audio programming via satellite to a small parabolic ``dish'' antenna 
at the subscriber's location. DBS, by exception, is now included in the 
SBA's broad economic census category, Wired Telecommunications 
Carriers, which was developed for small wireline businesses. Under this 
category, the SBA deems a wireline business to be small if it has 1,500 
or fewer employees. Census data for 2007 shows that there were 31,996 
establishments that operated for the entire year. Of this total, 30,178 
establishments had fewer than 100 employees, and 1,818 establishments 
had 100 or more employees. Therefore, under this size standard, the 
majority of such businesses can be considered small. However, the data 
we have available as a basis for estimating the number of such small 
entities were gathered under a superseded SBA small business size 
standard formerly titled ``Cable and Other Program Distribution.'' The 
definition of Cable and Other Program Distribution provided that a 
small entity is one with $12.5 million or less in annual receipts. 
Currently, only two entities provide DBS service, which requires a 
great investment of capital for operation: DIRECTV and DISH Network. 
Each currently offers subscription services. DIRECTV and DISH Network 
each reports annual revenues that are in excess of the threshold for a 
small business. Because DBS service requires significant capital, we 
believe it is unlikely that a small entity as defined by the SBA would 
have the financial wherewithal to become a DBS service provider.
    27. Satellite Master Antenna Television (SMATV) Systems, also known 
as Private Cable Operators (PCOs). SMATV systems or PCOs are video 
distribution facilities that use closed transmission paths without 
using any public right-of-way. They acquire video programming and 
distribute it via terrestrial wiring in urban and suburban multiple 
dwelling units such as apartments and condominiums, and commercial 
multiple tenant units such as hotels and office buildings. SMATV 
systems or PCOs are now included in the SBA's broad economic census 
category, Wired Telecommunications Carriers, which was developed for 
small wireline businesses. Under this category, the SBA deems a 
wireline business to be small if it has 1,500 or fewer employees. 
Census data for 2007 shows that there were 31,996 establishments that 
operated for the entire year. Of this total, 30,178 establishments had 
fewer than 100 employees, and 1,818 establishments had 100 or more 
employees. Therefore, under this size standard, the majority of such 
businesses can be considered small.
    28. Home Satellite Dish (HSD) Service. HSD or the large dish 
segment of the satellite industry is the original satellite-to-home 
service offered to consumers, and involves the home reception of 
signals transmitted by satellites operating generally in the C-band 
frequency. Unlike DBS, which uses small dishes, HSD antennas are 
between four and eight feet in diameter and can receive a wide range of 
unscrambled (free) programming and scrambled programming purchased from 
program packagers that are licensed to facilitate subscribers' receipt 
of video programming. Because HSD provides subscription services, HSD 
falls within the SBA-recognized definition of Wired Telecommunications 
Carriers. The SBA has developed a small business size standard for this 
category, which is: All such businesses having 1,500 or fewer 
employees. Census data for 2007 shows

[[Page 45403]]

that there were 31,996 establishments that operated that year. Of this 
total, 30,178 establishments had fewer than 100 employees, and 1,818 
establishments had 100 or more employees. Therefore, under this size 
standard, we estimate that the majority of businesses can be considered 
small entities.
    29. Open Video Services. The open video system (OVS) framework was 
established in 1996, and is one of four statutorily recognized options 
for the provision of video programming services by local exchange 
carriers. The OVS framework provides opportunities for the distribution 
of video programming other than through cable systems. Because OVS 
operators provide subscription services, OVS falls within the SBA small 
business size standard covering cable services, which is Wired 
Telecommunications Carriers. The SBA has developed a small business 
size standard for this category, which is: All such businesses having 
1,500 or fewer employees. Census data for 2007 shows that there were 
31,996 establishments that operated that year. Of this total, 30,178 
establishments had fewer than 100 employees, and 1,818 establishments 
had 100 or more employees. Therefore, under this size standard, we 
estimate that the majority of businesses can be considered small 
entities. In addition, we note that the Commission has certified some 
OVS operators, with some now providing service. Broadband service 
providers (``BSPs'') are currently the only significant holders of OVS 
certifications or local OVS franchises. The Commission does not have 
financial or employment information regarding the entities authorized 
to provide OVS, some of which may not yet be operational. Thus, again, 
at least some of the OVS operators may qualify as small entities.
    30. Wireless cable systems--Broadband Radio Service and Educational 
Broadband Service. Wireless cable systems use the Broadband Radio 
Service (BRS) and Educational Broadband Service (EBS) to transmit video 
programming to subscribers. In connection with the 1996 BRS auction, 
the Commission established a small business size standard as an entity 
that had annual average gross revenues of no more than $40 million in 
the previous three calendar years. The BRS auctions resulted in 67 
successful bidders obtaining licensing opportunities for 493 Basic 
Trading Areas (BTAs). Of the 67 auction winners, 61 met the definition 
of a small business. BRS also includes licensees of stations authorized 
prior to the auction. At this time, we estimate that of the 61 small 
business BRS auction winners, 48 remain small business licensees. In 
addition to the 48 small businesses that hold BTA authorizations, there 
are approximately 392 incumbent BRS licensees that are considered small 
entities. After adding the number of small business auction licensees 
to the number of incumbent licensees not already counted, we find that 
there are currently approximately 440 BRS licensees that are defined as 
small businesses under either the SBA or the Commission's rules. In 
2009, the Commission conducted Auction 86, the sale of 78 licenses in 
the BRS areas. The Commission offered three levels of bidding credits: 
(i) A bidder with attributed average annual gross revenues that exceed 
$15 million and do not exceed $40 million for the preceding three years 
(small business) received a 15 percent discount on its winning bid; 
(ii) a bidder with attributed average annual gross revenues that exceed 
$3 million and do not exceed $15 million for the preceding three years 
(very small business) received a 25 percent discount on its winning 
bid; and (iii) a bidder with attributed average annual gross revenues 
that do not exceed $3 million for the preceding three years 
(entrepreneur) received a 35 percent discount on its winning bid. 
Auction 86 concluded in 2009 with the sale of 61 licenses. Of the 10 
winning bidders, two bidders that claimed small business status won 
four licenses; one bidder that claimed very small business status won 
three licenses; and two bidders that claimed entrepreneur status won 
six licenses.
    31. In addition, the SBA's placement of Cable Television 
Distribution Services in the category of Wired Telecommunications 
Carriers is applicable to cable-based Educational Broadcasting 
Services. Since 2007, these services have been defined within the broad 
economic census category of Wired Telecommunications Carriers, which 
was developed for small wireline businesses. The SBA has developed a 
small business size standard for this category, which is: All such 
businesses having 1,500 or fewer employees. Census data for 2007 shows 
that there were 31,996 establishments that operated that year. Of this 
total, 30,178 establishments had fewer than 100 employees, and 1,818 
establishments had 100 or more employees. Therefore, under this size 
standard, we estimate that the majority of businesses can be considered 
small entities. In addition to Census data, the Commission's internal 
records indicate that as of September 2012, there are 2,241 active EBS 
licenses. The Commission estimates that of these 2,241 licenses, the 
majority are held by non-profit educational institutions and school 
districts, which are by statute defined as small businesses.
    32. Incumbent Local Exchange Carriers (ILECs). Neither the 
Commission nor the SBA has developed a small business size standard 
specifically for incumbent local exchange services. ILECs are included 
in the SBA's economic census category, Wired Telecommunications 
Carriers. Under this category, the SBA deems a wireline business to be 
small if it has 1,500 or fewer employees. Census data for 2007 shows 
that there were 31,996 establishments that operated that year. Of this 
total, 30,178 establishments had fewer than 100 employees, and 1,818 
establishments had 100 or more employees. Therefore, under this size 
standard, the majority of such businesses can be considered small.
    33. Small Incumbent Local Exchange Carriers. We have included small 
incumbent local exchange carriers in this present RFA analysis. A 
``small business'' under the RFA is one that, inter alia, meets the 
pertinent small business size standard (e.g., a telephone 
communications business having 1,500 or fewer employees), and ``is not 
dominant in its field of operation.'' The SBA's Office of Advocacy 
contends that, for RFA purposes, small incumbent local exchange 
carriers are not dominant in their field of operation because any such 
dominance is not ``national'' in scope. We have therefore included 
small incumbent local exchange carriers in this RFA analysis, although 
we emphasize that this RFA action has no effect on Commission analyses 
and determinations in other, non-RFA contexts.
    34. Competitive Local Exchange Carriers (CLECs), Competitive Access 
Providers (CAPs), Shared-Tenant Service Providers, and Other Local 
Service Providers. Neither the Commission nor the SBA has developed a 
small business size standard specifically for these service providers. 
These entities are included in the SBA's economic census category, 
Wired Telecommunications Carriers. Under this category, the SBA deems a 
wireline business to be small if it has 1,500 or fewer employees. 
Census data for 2007 shows that there were 31,996 establishments that 
operated that year. Of this total, 30,178 establishments had fewer than 
100 employees, and 1,818 establishments had 100 or more employees. 
Therefore, under this size

[[Page 45404]]

standard, the majority of such businesses can be considered small.
    35. Television Broadcasting. This economic census category 
``comprises establishments primarily engaged in broadcasting images 
together with sound.'' The SBA has created the following small business 
size standard for Television Broadcasting businesses: Those having 
$35.5 million or less in annual receipts. Census data for 2007 shows 
that 2,076 establishments in this category operated for the entire 
year. Of this total, 1,515 establishments had annual receipts of 
$10,000,000 or less, and 561 establishments had annual receipts of more 
than $10,000,000. Because the Census has no additional classifications 
on the basis of which to identify the number of stations whose receipts 
exceeded $35.5 million in that year, the majority of such 
establishments can be considered small under this size standard.
    36. Apart from the U.S. Census, the Commission has estimated the 
number of licensed commercial television stations to be 1,388 stations. 
Of this total, 1,221 stations (or about 88 percent) had revenues of 
$35.5 million or less, according to Commission staff review of the BIA 
Kelsey Inc. Media Access Pro Television Database (BIA) on July 2, 2014. 
In addition, the Commission has estimated the number of licensed 
noncommercial educational (NCE) television stations to be 395. NCE 
stations are non-profit, and therefore considered to be small entities. 
Therefore, we estimate that the majority of television broadcast 
stations are small entities.
    37. We note, however, that in assessing whether a business concern 
qualifies as small under the above definition, business (control) 
affiliations must be included. Our estimate, therefore, likely 
overstates the number of small entities that might be affected by our 
action because the revenue figure on which it is based does not include 
or aggregate revenues from affiliated companies. In addition, an 
element of the definition of ``small business'' is that the entity not 
be dominant in its field of operation. We are unable at this time to 
define or quantify the criteria that would establish whether a specific 
television station is dominant in its field of operation. Accordingly, 
the estimate of small businesses to which rules may apply does not 
exclude any television station from the definition of a small business 
on this basis and is therefore possibly over-inclusive to that extent.
    38. Cable and Other Subscription Programming. The Census Bureau 
defines this category as follows: ``This industry comprises 
establishments primarily engaged in operating studios and facilities 
for the broadcasting of programs on a subscription or fee basis. . . . 
These establishments produce programming in their own facilities or 
acquire programming from external sources. The programming material is 
usually delivered to a third party, such as cable systems or direct-to-
home satellite systems, for transmission to viewers.'' The SBA has 
developed a small business size standard for this category, which is: 
All such businesses having $35.5 million or less in annual revenues. 
Census data for 2007 shows that there were 659 establishments that 
operated for the entire year. Of that number, 462 operated with annual 
revenues of fewer than $10 million, and 197 operated with annual 
revenues of $10 million or more. Therefore, under this size standard, 
the majority of such businesses can be considered small.
    39. Motion Picture and Video Production. The Census Bureau defines 
this category as follows: ``This industry comprises establishments 
primarily engaged in producing, or producing and distributing motion 
pictures, videos, television programs, or television commercials.'' We 
note that firms in this category may be engaged in various industries, 
including cable programming. Specific figures are not available 
regarding how many of these firms produce programming for cable 
television. To gauge small business prevalence in the Motion Picture 
and Video Production industries, the Commission relies on data 
currently available from the U.S. Census for the year 2007. The SBA has 
developed a small business size standard for this category, which is: 
Those having $30 million or less in annual receipts. Census data for 
2007 shows that there were 9,095 firms in this category that operated 
for the entire year. Of this total, 8,995 firms had annual receipts of 
fewer than $25 million, and 43 firms had receipts of $25 million to 
$49,999,999. Therefore, under this size standard, the majority of such 
businesses can be considered small.
    40. Motion Picture and Video Distribution. The Census Bureau 
defines this category as follows: ``This industry comprises 
establishments primarily engaged in acquiring distribution rights and 
distributing film and video productions to motion picture theaters, 
television networks and stations, and exhibitors.'' We note that firms 
in this category may be engaged in various industries, including cable 
programming. Specific figures are not available regarding how many of 
these firms distribute programming for cable television. To gauge small 
business prevalence in the Motion Picture and Video Distribution 
industries, the Commission relies on data currently available from the 
U.S. Census for the year 2007. The SBA has developed a small business 
size standard for this category, which is: Those having $29.5 million 
or less in annual receipts. Census data for 2007 shows that there were 
450 firms in this category that operated for the entire year. Of this 
total, 434 firms had annual receipts of fewer than $25 million, and 7 
firms had receipts of $25 million to $49,999,999. Therefore, under this 
size standard, the majority of such businesses can be considered small.
    41. Internet Publishing and Broadcasting and Web Search Portals. 
The Census Bureau defines this category as follows: ``This industry 
comprises establishments primarily engaged in (1) publishing and/or 
broadcasting content on the Internet exclusively or (2) operating Web 
sites that use a search engine to generate and maintain extensive 
databases of Internet addresses and content in an easily searchable 
format (and known as Web search portals). The publishing and 
broadcasting establishments in this industry do not provide traditional 
(non-Internet) versions of the content that they publish or broadcast. 
They provide textual, audio, and/or video content of general or 
specific interest on the Internet exclusively. Establishments known as 
Web search portals often provide additional Internet services, such as 
email, connections to other Web sites, auctions, news, and other 
limited content, and serve as a home base for Internet users.'' The SBA 
has developed a small business size standard for this category, which 
is: All such businesses having 500 or fewer employees. Census data for 
2007 shows that there were 2,705 firms that operated for the entire 
year. Of this total, 2,682 firms had fewer than 500 employees, and 13 
firms had between 500 and 999 employees. Therefore, under this size 
standard, the majority of such businesses can be considered small.
    42. Radio and Television Broadcasting and Wireless Communications 
Equipment Manufacturing. The Census Bureau defines this category as 
follows: ``This industry comprises establishments primarily engaged in 
manufacturing radio and television broadcast and wireless 
communications equipment. Examples of products made by these 
establishments are: Transmitting and receiving antennas, cable 
television equipment, GPS equipment, pagers, cellular phones, mobile

[[Page 45405]]

communications equipment, and radio and television studio and 
broadcasting equipment.'' The SBA has developed a small business size 
standard for this category, which is: All such businesses having 750 or 
fewer employees. Census data for 2007 shows that there were 939 
establishments that operated for part or all of the entire year. Of 
this total, 912 establishments had fewer than 500 employees, and 10 
establishments had between 500 and 999 employees. Therefore, under this 
size standard, the majority of such establishments can be considered 
small.
    43. Audio and Video Equipment Manufacturing. The Census Bureau 
defines this category as follows: ``This industry comprises 
establishments primarily engaged in manufacturing electronic audio and 
video equipment for home entertainment, motor vehicles, and public 
address and musical instrument amplification. Examples of products made 
by these establishments are video cassette recorders, televisions, 
stereo equipment, speaker systems, household-type video cameras, 
jukeboxes, and amplifiers for musical instruments and public address 
systems.'' The SBA has developed a small business size standard for 
this category, which is: All such businesses having 750 or fewer 
employees. Census data for 2007 shows that 492 establishments in this 
category operated for part or all of the entire year. Of this total, 
488 establishments had fewer than 500 employees, and three had between 
500 and 999 employees. Therefore, under this size standard, the 
majority of such establishments can be considered small.
    44. Closed Captioning Services. These entities may be indirectly 
affected by our proposed actions. The SBA has developed two small 
business size standards that may be used for closed captioning 
services. The two size standards track the economic census categories, 
``Teleproduction and Other Postproduction Services'' and ``Court 
Reporting and Stenotype Services.''
    45. The first category of Teleproduction and Other Postproduction 
Services ``comprises establishments primarily engaged in providing 
specialized motion picture or video postproduction services, such as 
editing, film/tape transfers, subtitling, credits, closed captioning, 
and animation and special effects.'' The SBA has developed a small 
business size standard for this category, which is: Those having $29.5 
million or less in annual receipts. Census data for 2007 indicates that 
there were 1,605 firms that operated in this category for the entire 
year. Of this total, 1,587 firms had annual receipts of fewer than $25 
million, and 9 firms had receipts of $25 million to $49,999,999. 
Therefore, we estimate that the majority of firms in this category are 
small entities.
    46. The second category of Court Reporting and Stenotype Services 
``comprises establishments primarily engaged in providing verbatim 
reporting and stenotype recording of live legal proceedings and 
transcribing subsequent recorded materials.'' The SBA has developed a 
small business size standard for this category, which is: Those having 
$14 million or less in annual receipts. Census data for 2007 indicates 
that there were 2,706 firms that operated in this category for the 
entire year. Of this total, 2,687 had annual receipts of fewer than $10 
million, and 11 firms had receipts of $10 million to $24,999,999. 
Therefore, we estimate that the majority of firms in this category are 
small entities.
    47. Newspaper Publishers. The Census Bureau defines this category 
as follows: ``This industry comprises establishments known as newspaper 
publishers. Establishments in this industry carry out operations 
necessary for producing and distributing newspapers, including 
gathering news; writing news columns, feature stories, and editorials; 
and selling and preparing advertisements.'' The SBA has developed a 
small business size standard for this category, which is: Those having 
500 or fewer employees. Census data for 2007 shows that there were 
4,852 firms in this category that operated for the entire year. Of this 
total, 4,771 firms had fewer than 500 employees, and an additional 33 
firms had between 500 and 999 employees. Therefore, we estimate that 
the majority of firms in this category are small entities.
    48. Periodical Publishers. The Census Bureau defines this category 
as follows: ``This industry comprises establishments known either as 
magazine publishers or periodical publishers. These establishments 
carry out the operations necessary for producing and distributing 
magazines and other periodicals, such as gathering, writing, and 
editing articles, and selling and preparing advertisements.'' The SBA 
has developed a small business size standard for this category, which 
is: Those having 500 or fewer employees. Census data for 2007 shows 
that there were 5,479 firms in this category that operated for the 
entire year. Of this total, 5,434 firms had fewer than 500 employees, 
and an additional 25 firms had between 500 and 999 employees. 
Therefore, we estimate that the majority of firms in this category are 
small entities.
4. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements for Small Entities
    49. Certain proposals discussed in the 2nd FNPRM would affect 
reporting, recordkeeping, or other compliance requirements.
    50. The 2nd FNPRM considers four issues related to the extension of 
the IP closed captioning requirements to video clips as discussed in 
the Video Clips Order. First, the 2nd FNPRM seeks comment on 
application of the IP closed captioning requirements to ``third party'' 
video programming providers and distributors, which are those not 
subject to the Video Clips Order.\15\ Third party distributors include 
entities, such as news Web sites, that do not distribute full-length 
video programming but may sometimes make video clips available on their 
Web sites. Third party distributors also include entities, such as 
Hulu, that distribute full-length video programming online but do not 
also distribute such programming on television. The 2nd FNPRM asks 
whether the Commission should impose the general IP closed captioning 
rules to such third parties, or whether any differing obligations 
should apply. For example, the IP closed captioning rules require each 
video programming owner, ``[w]ith each video programming distributor 
and provider that such owner licenses to distribute video programming 
directly to the end user through a distribution method that uses 
Internet protocol, [to] agree upon a mechanism to inform such 
distributors and providers on an ongoing basis whether video 
programming is subject to the requirements of this section.'' \16\ The 
2nd FNPRM asks how this ``mechanism'' would operate in the context of 
video clips covered by these rules when they are provided to third 
party IP distributors. Extension of the IP closed captioning 
requirements for video clips to third party distributors that are small 
entities will subject these entities to the video clips requirements. 
Second, the Commission seeks comment on decreasing or eliminating the 
grace period adopted in the Video Clips Order for providing closed 
captions on IP-delivered video clips of video

[[Page 45406]]

programming previously shown live or near-live on television with 
captions. Decreasing or eliminating this grace period would require all 
entities, including smaller entities, to make captions available more 
quickly for video clips of live and near-live programming. Third, the 
2nd FNPRM asks about application of the Commission's IP closed 
captioning requirements to files that contain a combination of one or 
more video clips that have been shown on television with captions and 
other content (such as online-only content) that has not been shown on 
television with captions (``mash-ups''). Extension of the IP closed 
captioning requirements to mash-ups will require all entities, 
including small entities, to comply with the requirements for an 
additional type of video clip. Fourth, the Commission seeks comment on 
application of the IP closed captioning rules to ``advance'' video 
clips, which are those that are added to the video programming 
distributor's or provider's library on or after January 1, 2016 for 
straight lift clips and January 1, 2017 for montages, but before the 
associated video programming is shown on television with captions on or 
after the compliance deadline. Extension of the IP closed captioning 
requirements to advance video clips also will require all entities, 
including small entities, to comply with the requirements for an 
additional type of video clip.
---------------------------------------------------------------------------

    \15\ The Video Clips Order imposes closed captioning 
requirements for IP-delivered video clips, at the present time, to 
instances in which the video programming provider or distributor (as 
those terms are defined in the IP closed captioning rules) posts on 
its Web site or application a video clip of video programming that 
it published or exhibited on television in the United States with 
captions on or after the applicable compliance deadline.
    \16\ 47 CFR 79.4(c)(1)(ii).
---------------------------------------------------------------------------

5. Steps Taken To Minimize Significant Economic Impact on Small 
Entities and Significant Alternatives Considered
    51. The RFA requires an agency to describe any significant 
alternatives that it has considered in reaching its proposed approach, 
which may include the following four alternatives (among others): (1) 
The establishment of differing compliance or reporting requirements or 
timetables that take into account the resources available to small 
entities; (2) the clarification, consolidation, or simplification of 
compliance or reporting requirements under the rule for small entities; 
(3) the use of performance, rather than design, standards; and (4) an 
exemption from coverage of the rule, or any part thereof, for small 
entities.
    52. Similar to the rules promulgated in the accompanying Second 
Order on Reconsideration (``Video Clips Order''), the proposals 
contained in the 2nd FNPRM, if adopted, could have a significant 
economic impact on a substantial number of small entities. Although the 
Commission has considered (and will continue to consider) alternatives, 
where possible, to minimize economic impact on small entities, we note 
that our proposals in the 2nd FNPRM are governed by the congressional 
mandate contained in the CVAA. We note that in the 2nd FNPRM, the 
Commission seeks comment on the costs and benefits of the proposals on 
affected entities, including small entities.
    53. As explained in the Final Regulatory Flexibility Analysis 
(FRFA) for the accompanying Video Clips Order, as well as the FRFA for 
the IP Closed Captioning Order, we note that the same aspects of the IP 
closed captioning rules applicable to full-length programming that ease 
compliance burdens on small entities also apply to small entities in 
the context of video clips. Specifically, in the IP Closed Captioning 
Order, the Commission adopted procedures enabling it to grant 
exemptions to the rules governing closed captioning of IP-delivered 
video programming pursuant to section 202 of the CVAA, where a 
petitioner has shown that compliance would present an economic burden 
(i.e., a significant difficulty or expense), and pursuant to section 
203 of the CVAA, where a petitioner has shown that compliance is not 
achievable (i.e., cannot be accomplished with reasonable effort or 
expense) or not technically feasible. As was the case with regard to 
full-length programming, this exemption process will allow the 
Commission to address the impact of any rule revisions resulting from 
the 2nd FNPRM on individual entities, including smaller entities, and 
to modify the application of the rules to accommodate individual 
circumstances. Further, as with full-length IP-delivered video 
programming, a de minimis failure to comply with the requirements 
adopted pursuant to section 202 of the CVAA with regard to IP-delivered 
video clips will not be treated as a violation, and parties may 
continue to use alternate means of compliance to the rules adopted 
pursuant to either section 202 or section 203 of the CVAA. Individual 
entities, including smaller entities, may benefit from these 
provisions.
    54. The 2nd FNPRM itself also reflects our consideration of small 
entities and significant alternatives. First, the 2nd FNPRM seeks 
comment on what types of entities are included in the category of third 
parties that distribute video clips of programming shown on television 
with captions. The Commission also asks if it should impose general IP 
closed captioning rules in the context of such third parties, or if it 
should impose different obligations. These concerns will allow the 
Commission to look into the impact of the requirements on smaller 
entities and to explore alternatives. For example, the Commission will 
consider whether the closed captioning requirements for video clips 
should apply to all third party distributors, or whether comments 
demonstrate that the application to certain small third party 
distributors would be economically burdensome.
    55. Second, the 2nd FNPRM seeks comment on decreasing or 
eliminating the grace period applicable to captions of IP-delivered 
video clips of live and near-live programming. Specifically, beginning 
July 1, 2017, the Commission requires the provision of closed captions 
on IP-delivered video clips of video programming previously shown live 
or near-live on television with captions within 12 hours (for live) or 
eight hours (for near-live) after the associated video programming is 
published or exhibited on television in the United States with 
captions. The Commission expects that at some time in the future, 
technology will automate the process such that the grace period for 
captioning is no longer needed. The Commission seeks comment on the 
status of technological developments in this regard and the current 
process through which entities prepare video clips of live and near-
live programming. This information will allow the Commission to 
consider the impact of decreasing or eliminating the grace period on 
all covered entities, including small entities. The Commission thus 
will determine whether it should decrease or eliminate the grace 
period, and it will consider comments submitted about the impact of 
doing so on small entities.
    56. Third, the 2nd FNPRM seeks comment on applying the IP closed 
captioning requirements to files that contain a combination of one or 
more video clips that have been televised with captions and other 
content (such as online-only content) that has not been shown on 
television with captions (``mash-ups''). The Commission asks how the 
industry would comply with such a requirement and whether it will need 
to caption the covered material anew or simply repurpose televised 
captions. Thus, the Commission will continue to consider the impact of 
its rules on covered entities, including small entities, in adopting 
any rule revisions. A captioning requirement for mash-ups will require 
all entities, including smaller entities, to caption an additional 
category of video clips.
    57. Fourth, the 2nd FNPRM seeks comment on applying the IP closed 
captioning rules to ``advance'' video clips, which are those that are 
added to

[[Page 45407]]

the video programming distributor's or provider's library on or after 
January 1, 2016 for straight lift clips and January 1, 2017 for 
montages, but before the associated video programming is shown on 
television with captions on or after the compliance deadline. The 
Commission seeks comment on the difficulties associated with a 
captioning requirement for this category of video clips, including 
whether any statutory exemptions might apply to these clips or to a 
subset of these clips. The information provided in response will 
facilitate the Commission's consideration of the impact of application 
of the IP closed captioning rules to this category of video clips on 
covered entities, including small entities.
6. Federal Rules That May Duplicate, Overlap, or Conflict With the 
Proposed Rules
    58. None.

B. Paperwork Reduction Act

    59. The 2nd FNPRM may result in new or revised information 
collection requirements. If the Commission adopts any new or revised 
information collection requirement, the Commission will publish a 
notice in the Federal Register inviting the public to comment on the 
requirement, as required by the Paperwork Reduction Act of 1995, Public 
Law 104-13 (44 U.S.C. 3501-3520). In addition, pursuant to the Small 
Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 
U.S.C. 3506(c)(4), the Commission seeks specific comment on how it 
might ``further reduce the information collection burden for small 
business concerns with fewer than 25 employees.''

C. Ex Parte Rules

    60. Permit-But-Disclose. This proceeding shall be treated as a 
``permit-but-disclose'' proceeding in accordance with the Commission's 
ex parte rules. Persons making ex parte presentations must file a copy 
of any written presentation or a memorandum summarizing any oral 
presentation within two business days after the presentation (unless a 
different deadline applicable to the Sunshine period applies). Persons 
making oral ex parte presentations are reminded that memoranda 
summarizing the presentation must (1) list all persons attending or 
otherwise participating in the meeting at which the ex parte 
presentation was made, and (2) summarize all data presented and 
arguments made during the presentation. If the presentation consisted 
in whole or in part of the presentation of data or arguments already 
reflected in the presenter's written comments, memoranda or other 
filings in the proceeding, the presenter may provide citations to such 
data or arguments in his or her prior comments, memoranda, or other 
filings (specifying the relevant page and/or paragraph numbers where 
such data or arguments can be found) in lieu of summarizing them in the 
memorandum. Documents shown or given to Commission staff during ex 
parte meetings are deemed to be written ex parte presentations and must 
be filed consistent with Sec.  1.1206(b). In proceedings governed by 
Sec.  e 1.49(f) or for which the Commission has made available a method 
of electronic filing, written ex parte presentations and memoranda 
summarizing oral ex parte presentations, and all attachments thereto, 
must be filed through the electronic comment filing system available 
for that proceeding, and must be filed in their native format (e.g., 
.doc, .xml, .ppt, searchable .pdf). Participants in this proceeding 
should familiarize themselves with the Commission's ex parte rules.

D. Filing Requirements

    61. Comments and Replies. Pursuant to sections 1.415 and 1.419 of 
the Commission's rules, 47 CFR 1.415, 1.419, interested parties may 
file comments and reply comments on or before the dates indicated on 
the first page of this document. Comments may be filed using the 
Commission's Electronic Comment Filing System (ECFS). See Electronic 
Filing of Documents in Rulemaking Proceedings, 63 FR 24121 (1998).
     Electronic Filers: Comments may be filed electronically 
using the Internet by accessing the ECFS: http://fjallfoss.fcc.gov/ecfs2/.
     Paper Filers: Parties who choose to file by paper must 
file an original and one copy of each filing. If more than one docket 
or rulemaking number appears in the caption of this proceeding, filers 
must submit two additional copies for each additional docket or 
rulemaking number. Filings can be sent by hand or messenger delivery, 
by commercial overnight courier, or by first-class or overnight U.S. 
Postal Service mail. All filings must be addressed to the Commission's 
Secretary, Office of the Secretary, Federal Communications Commission.
     All hand-delivered or messenger-delivered paper filings 
for the Commission's Secretary must be delivered to FCC Headquarters at 
445 12th St. SW., Room TW-A325, Washington, DC 20554. The filing hours 
are 8:00 a.m. to 7:00 p.m. All hand deliveries must be held together 
with rubber bands or fasteners. Any envelopes and boxes must be 
disposed of before entering the building.
     Commercial overnight mail (other than U.S. Postal Service 
Express Mail and Priority Mail) must be sent to 9300 East Hampton 
Drive, Capitol Heights, MD 20743.
     U.S. Postal Service first-class, Express, and Priority 
mail must be addressed to 445 12th Street SW., Washington, DC 20554.
    62. Availability of Documents. Comments, reply comments, and ex 
parte submissions will be available for public inspection during 
regular business hours in the FCC Reference Center, Federal 
Communications Commission, 445 12th Street SW., CY-A257, Washington, 
DC, 20554. These documents will also be available via ECFS. Documents 
will be available electronically in ASCII, Microsoft Word, and/or Adobe 
Acrobat.
    63. People with Disabilities. To request materials in accessible 
formats for people with disabilities (Braille, large print, electronic 
files, audio format), send an email to [email protected] or call the FCC's 
Consumer and Governmental Affairs Bureau at (202) 418-0530 (voice), 
(202) 418-0432 (TTY).

E. Additional Information

    64. For additional information on this proceeding, contact Diana 
Sokolow, [email protected], of the Media Bureau, Policy Division, 
(202) 418-2120.

IV. Ordering Clauses

    65. Accordingly, it is ordered that, pursuant to the authority 
found in sections 4(i), 4(j), 303, and 713 of the Communications Act of 
1934, as amended, 47 U.S.C. 154(i), 154(j), 303, and 613, this Second 
Further Notice of Proposed Rulemaking is adopted.
    66. It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this Second Further Notice of Proposed Rulemaking in MB Docket 
No. 11-154, including the Initial Regulatory Flexibility Analysis, to 
the Chief Counsel for Advocacy of the Small Business Administration.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 2014-18201 Filed 8-4-14; 8:45 am]
BILLING CODE 6712-01-P