[Federal Register Volume 81, Number 232 (Friday, December 2, 2016)]
[Rules and Regulations]
[Pages 87348-87387]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-28644]



[[Page 87347]]

Vol. 81

Friday,

No. 232

December 2, 2016

Part V





Department of Justice





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





28 CFR Part 36





Nondiscrimination on the Basis of Disability by Public Accommodations--
Movie Theaters; Movie Captioning and Audio Description; Final Rule

  Federal Register / Vol. 81 , No. 232 / Friday, December 2, 2016 / 
Rules and Regulations  

[[Page 87348]]


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

DEPARTMENT OF JUSTICE

28 CFR Part 36

[CRT Docket No. 126; AG Order No. 3779-2016]
RIN 1190-AA63


Nondiscrimination on the Basis of Disability by Public 
Accommodations--Movie Theaters; Movie Captioning and Audio Description

AGENCY: Department of Justice, Civil Rights Division.

ACTION: Final rule.

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

SUMMARY: This final rule amends the Department of Justice (Department) 
regulation implementing title III of the Americans with Disabilities 
Act of 1990 (ADA), which prohibits discrimination against persons with 
disabilities by public accommodations and commercial facilities, 
including movie theaters. The rule adds specific requirements 
addressing the obligations of public accommodations that own, lease, or 
operate movie theaters to provide effective communication to patrons 
who are deaf or hard of hearing, or blind or have low vision. The rule 
requires that movie theater auditoriums provide closed movie captioning 
and audio description when showing a digital movie distributed with 
such features unless doing so would result in an undue burden or a 
fundamental alteration. The rule requires movie theaters to have a 
specified number of captioning devices and audio description devices 
based on the number of auditoriums in the movie theater that show 
digital movies. The rule does not impose any specific requirements for 
movie theater auditoriums that exhibit analog movies exclusively.

DATES: This rule is effective January 17, 2017. Public accommodations 
with movie theater auditoriums showing digital movies on December 2, 
2016 must comply with the rule's requirement to provide closed movie 
captioning and audio description in such auditoriums by June 2, 2018. 
If a public accommodation converts a movie theater auditorium from an 
analog projection system to a system that it allows it show digital 
movies after December 2, 2016, the public accommodation must comply 
with the rule's requirement to provide closed movie captioning and 
audio description in such auditoriums by December 2, 2018, or within 6 
months of that auditorium's complete installation of a digital 
projection system, whichever is later.

FOR FURTHER INFORMATION CONTACT: Rebecca Bond, Section Chief, 
Disability Rights Section, Civil Rights Division, U.S. Department of 
Justice, at (202) 307-0663 (voice or TTY). This is not a toll-free 
number. Information may also be obtained from the Department's toll-
free ADA Information Line at (800) 514-0301 (voice) or (800) 514-0383 
(TTY).
    You may obtain copies of the rule in alternative formats by calling 
the ADA Information Line at (800) 514-0301 (voice) and (800) 514-0383 
(TTY). This rule is also available on the Department's Web site at 
http://www.ada.gov.

SUPPLEMENTARY INFORMATION: 

Relationship to Other Laws

    Section 36.103 of the Department's regulation implementing title 
III of the ADA states that except as otherwise provided in part 36, 
that part shall not be construed to allow a lesser standard than the 
standards applied under title V of the Rehabilitation Act of 1973 (29 
U.S.C. 791) or the regulations issued by Federal agencies under that 
title. In addition, the title III regulation specifies that part 36 
does not affect the obligations of a recipient of Federal financial 
assistance to comply with the requirements of section 504 of the 
Rehabilitation Act of 1973 (29 U.S.C. 794) and any implementing 
regulations issued by Federal agencies. Finally, part 36 does not 
invalidate or limit the remedies, rights, and procedures provided under 
any Federal, State, or local law (including State common law) that 
affords greater or equal protection to individuals with disabilities or 
individuals associated with them. These provisions remain unchanged. 
Compliance with the Department's ADA regulations does not ensure 
compliance with other Federal statutes.

I. Executive Summary

A. Purpose of the Rule

    The Department of Justice is issuing this final rule in order to 
amend its regulation implementing title III of the ADA (42 U.S.C. 12181 
et seq.), which covers public accommodations and commercial 
facilities--including movie theaters. Public accommodations that own, 
lease, or operate movie theaters have an existing obligation to provide 
effective communication to persons with disabilities through the use of 
auxiliary aids and services, and this rule provides greater specificity 
as to what those obligations are when showing digital movies. The rule 
explicitly requires public accommodations that own, lease, or operate 
movie theaters to provide closed movie captioning \1\ and audio 
description to patrons with hearing and vision disabilities whenever 
such entities exhibit digital movies that are distributed with such 
features, as well as to have available a specific number of fully 
operational captioning and audio description devices.
---------------------------------------------------------------------------

    \1\ In this rule, the Department uses the term ``closed movie 
captioning'' to refer to the provision of captions to movie theater 
patrons at their seats through the use of individual captioning 
devices.
---------------------------------------------------------------------------

    Title III of the ADA prohibits public accommodations from 
discriminating against individuals with disabilities. 42 U.S.C. 
12182(a). It expressly requires owners, operators, or lessees of public 
accommodations to take ``such steps as may be necessary to ensure that 
no individual with a disability is excluded, denied services, 
segregated or otherwise treated differently * * * because of the 
absence of auxiliary aids and services'' unless doing so would result 
in an undue burden or a fundamental alteration. 42 U.S.C. 
12182(b)(2)(A)(iii). The Department's existing regulation implementing 
the obligation of covered entities to ensure effective communication 
with individuals with disabilities (28 CFR 36.303(a)-(c)) specifies 
that ``open and closed captioning,'' and ``audio recordings'' are 
examples of auxiliary aids and services. 28 CFR 36.303(b).
    Despite the longstanding obligation to provide effective 
communication, neither closed movie captioning nor audio description is 
universally available at movie theaters across the United States. Data 
provided to the Department by the movie theater industry in mid-2015 
indicates that at that time, approximately 70 percent of all movie 
theater auditoriums were already equipped to provide closed movie 
captioning and audio description; however, advocates and individuals 
with hearing and vision disabilities have reported that the 
availability of these services continues to vary significantly 
depending on a movie theater's location and ownership. In addition, it 
is the Department's view that the availability of closed movie 
captioning, and to a lesser extent audio description, is largely due to 
successful litigation brought by State attorneys general or private 
plaintiffs representing individuals with disabilities. As a result, 
although individuals with hearing and vision disabilities are an ever-
increasing segment of the aging population, in many cases they continue 
to be unable to enjoy movies with family or friends, participate in 
conversations about recent movie

[[Page 87349]]

releases, or otherwise take part in any meaningful way in this 
important aspect of American culture. Because the ADA's effective 
communication requirements apply to all public accommodations 
(including movie theaters) and protect the rights of persons with 
disabilities in every jurisdiction in the United States, all movie 
theaters must ensure that they meet those requirements by providing 
closed movie captioning and audio description upon request to all 
patrons who are deaf or hard of hearing, or blind or have low vision, 
unless doing so results in an undue burden or a fundamental alteration.
    The requirements of this rule are in addition to a movie theater's 
current obligation to provide assistive listening systems and receivers 
pursuant to sections 219 and 706 of the 2010 ADA Standards for 
Accessible Design (2010 Standards).\2\ Assistive listening receivers 
are effective for persons who are hard of hearing and who only require 
sound amplification. They do not, however, provide effective 
communication for individuals who are deaf or for individuals who are 
hard of hearing and for whom sound amplification is insufficient. 
Consequently, in order to achieve the goals and guarantees of the ADA 
and provide effective communication for such individuals, the 
Department is convinced that this rule is essential.
---------------------------------------------------------------------------

    \2\ 28 CFR 36.104 (title III) (defining the ``2010 Standards'' 
as the requirements set forth in appendices B and D to 36 CFR part 
1191 and in subpart D of 28 CFR part 36). The 2010 Standards are 
available at http://www.ada.gov/2010ADAstandards_index.htm.
---------------------------------------------------------------------------

B. Major Provisions

    The major provisions of this rule can be summarized as follows.
    First, the requirements of this rule apply only to public 
accommodations that own, lease, or operate movie theaters with 
auditoriums that show movies produced in digital cinema format (digital 
movies). The Department is deferring to a later date the decision 
whether to engage in rulemaking addressing the application of the 
specific requirements of this rule for closed movie captioning and 
audio description to movie theater auditoriums that show movies 
exclusively in analog film format (analog movies).
    Second, the rule requires that within 18 months of the date of 
publication of the final rule in the Federal Register, public 
accommodations that own, lease, or operate movie theaters must ensure 
that their movie theater auditoriums that exhibit digital movies 
produced or distributed with closed movie captions and audio 
description provide such features to patrons with hearing and vision 
disabilities at all showings. The rule does not require movie theaters 
to add captions or audio description for movies that are not produced 
or distributed with these features. Nor does the rule prohibit movie 
theaters from showing digital movies that are not produced with 
captioning or audio description or from choosing to show the analog 
version of a particular movie, even if that movie is also produced in 
digital format with captioning and audio description. The rule also 
specifies that movie theaters that convert from analog projection 
systems to digital cinema projection systems after the publication date 
of the rule in the Federal Register must comply with the requirements 
of the rule either 6 months from the date of conversion or 24 months 
from the publication date, whichever is later.
    Third, the rule requires movie theaters to have a minimum number of 
fully operational captioning devices \3\ and to provide them to patrons 
upon request. This requirement is based on the number of auditoriums at 
each movie theater that exhibit digital movies and is designed to 
ensure the availability of a sufficient number of devices for use at 
peak attendance times by individuals who are deaf or hard of hearing.
---------------------------------------------------------------------------

    \3\ Section 36.303(g)(1)(iv) of this rule defines ``captioning 
device'' as ``the individual device that a patron may use at any 
seat to view closed movie captioning.''
---------------------------------------------------------------------------

    Fourth, the rule requires movie theaters to have a minimum number 
of fully operational audio description devices \4\ and to provide them 
to patrons upon request. The rule permits movie theaters to use the 
assistive listening receivers that they are already required to provide 
to patrons pursuant to sections 219 and 706 of the 2010 Standards in 
lieu of dedicated audio description devices if those assistive 
listening receivers have a second channel available to deliver audio 
description.
---------------------------------------------------------------------------

    \4\ Section 36.303(g)(1)(iii) of this rule defines ``audio 
description device'' as ``the individual device that a patron may 
use at any seat to hear audio description.''
---------------------------------------------------------------------------

    Fifth, the rule permits public accommodations to meet their 
obligation to provide captioning and audio description in their movie 
theaters to persons with hearing and vision disabilities through the 
use of alternative technologies, including open movie captioning, so 
long as that technology provides communication as effective as that 
provided to movie patrons without disabilities.
    Sixth, the rule requires movie theaters that exhibit digital movies 
to provide the public with notice as to the availability of captioning 
and audio description. This provision is necessary so that movie 
patrons who are deaf or hard of hearing, or blind or have low vision, 
can find out which movies are accessible to them.
    Finally, the rule requires movie theaters that exhibit digital 
movies to have staff available who are able to operate and respond to 
problems with all equipment necessary to deliver captioning and audio 
description and to show patrons how to use the individual devices 
whenever digital movies with such features are shown.
    As with other effective communication obligations under the ADA, 
public accommodations do not have to comply with these requirements to 
the extent that they constitute an undue burden or a fundamental 
alteration.

C. Costs and Benefits

    In accordance with OMB Circular A-4, the Department has prepared a 
Final Regulatory Assessment (Final RA), which assesses the likely costs 
and benefits of the rule for all movie theaters subject to the 
rulemaking over the projected life of the rule (15 years). The Final RA 
captures the total costs of this rulemaking using a baseline, which 
represents the Department's best assessment of the current state of the 
movie exhibition industry, including the availability of closed movie 
captioning and audio description, if the rule were not implemented. The 
Department's Final RA projects that the total costs, benefits, or 
transfer payments \5\ of this rule will not reach $100 million in any 
single year, and thus, the rule is not economically significant under 
Executive Order 12866.
---------------------------------------------------------------------------

    \5\ Transfer payments are the distributional effects of a 
regulatory action that may arise through the transfer of resources 
from one group to another but do not impact the total value of 
resources available to society. See Office of Management and Budget, 
Circular No. A-4, Regulatory Analysis (Sept. 17, 2003), available at 
http://www.whitehouse.gov/omb/circulars_a004_a-4/ (last visited 
Sept. 12, 2016).
---------------------------------------------------------------------------

    For movie theaters with auditoriums exhibiting digital movies, 
total costs are composed of the following components:
     Acquisition costs for captioning hardware;
     Acquisition costs for audio description hardware;
     Acquisition costs for captioning devices;
     Acquisition costs for audio description devices;

[[Page 87350]]

     Installation costs for captioning and audio description 
equipment;
     Replacement costs for captioning and audio description 
equipment;
     Staff training costs for the provision of captioning and 
audio description equipment; and
     Maintenance and administrative costs.
    Based on the Department's calculations, total costs to the movie 
exhibition industry to provide closed movie captioning and audio 
description in accordance with this final rule are estimated to be 
$88.5 million over 15 years when discounted by 7 percent, and $113.4 
million over 15 years when discounted by 3 percent. This total costs 
estimate was calculated in the primary analysis of the Department's 
Final RA. The primary analysis analyzes the cost impact of the final 
rule by making assumptions about the available data, such as the 
current availability of closed movie captioning and audio description 
in movie theaters. The primary analysis represents the Department's 
best estimate of the total costs that movie theaters will incur as a 
result of this rulemaking given the available data. Unless otherwise 
stated, the Department refers to cost estimates developed in the 
primary analysis of the Final RA throughout this rule. See chapters 2 
and 3 of the Final RA for a more detailed explanation of the primary 
analysis and the data and assumptions relied upon to develop the total 
costs estimate.

     Total Costs by Cost Category in Primary Analysis Over 15 Years
                              [$ millions]
------------------------------------------------------------------------
                                     Primary analysis   Primary analysis
           Cost category              7% discounted      3% discounted
------------------------------------------------------------------------
Captioning Hardware Acquisition                 $14.6              $17.2
 Costs............................
Audio Hardware Acquisition Costs..                0.5                0.5
Captioning Device Acquisition                    15.7               17.6
 Costs............................
Audio Device Acquisition Costs....                2.4                2.8
Installation Costs................                1.0                1.1
Replacement Costs.................               36.1               49.9
Training Costs....................                9.9               13.1
Maintenance and Administrative                    8.2               11.1
 Costs............................
                                   -------------------------------------
    Total Costs...................               88.5              113.4
------------------------------------------------------------------------
* Totals may differ due to rounding.

    The highest costs occur in the first 2 years of the analysis when 
movie theaters incur upfront costs for acquiring and installing the 
captioning and audio description equipment in accordance with the 18-
month compliance date. The table below presents the annual costs to the 
movie exhibition industry over the 15-year analysis, and it should be 
noted that these annual costs are well below the $100 million mark that 
signifies an economically significant regulation under Executive Order 
12866.
[GRAPHIC] [TIFF OMITTED] TR02DE16.023


[[Page 87351]]


    Movie theaters vary greatly by number of auditoriums, which 
significantly impacts overall costs per facility. Thus, the analysis 
breaks the movie exhibition industry into four venue types based on 
size: Megaplex movie theaters (16+ auditoriums), multiplex movie 
theaters (8-15 auditoriums), miniplex movie theaters (2-7 auditoriums), 
and single-auditorium movie theaters. The upfront costs per theater are 
calculated for the average movie theater within each venue type and 
presented in the table below. The largest cost per year for any single 
movie theater with auditoriums subject to the rulemaking would occur in 
the second year due to the upfront costs to acquire and install the 
necessary equipment by the 18-month compliance date. The average 
upfront costs for a megaplex movie theater are estimated to total 
$27,358, while the average upfront costs for a single-auditorium movie 
theater are estimated to total $3,562.

                                 Average per Movie Theater Upfront Costs by Venue Type in Primary Analysis, Undiscounted
                                                                           [$]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Audio                           Audio
                                                            Captioning      description     Captioning      description    Installation    Total upfront
                       Venue type                            hardware        hardware         device          device           costs           costs
                                                            acquisition     acquisition     acquisition     acquisition
--------------------------------------------------------------------------------------------------------------------------------------------------------
Megaplex................................................         $16,158            $205          $8,728          $1,470            $797         $27,358
Multiplex...............................................          10,772             205           5,819             980             533          18,309
Miniplex................................................           4,488             205           4,364             490             286           9,834
Single-Auditorium.......................................           1,097             308           1,864             190             104           3,562
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Totals may differ due to rounding.

    The Final RA also estimates the annualized costs of the rule by 
venue type, as presented in the table below. With a 7-percent discount 
rate, the annualized costs of the $88.5 million in total costs over the 
15-year period of analysis are $9.7 million. With a 3-percent discount 
rate, the annualized costs of the $113.4 million in total costs are 
$9.5 million.

           Annualized Costs by Venue Type in Primary Analysis
                              [$ millions]
------------------------------------------------------------------------
                                      Annualized costs  Annualized costs
             Venue type                 7% discounted     3% discounted
------------------------------------------------------------------------
Megaplex (16+ auditoriums)..........              $3.2              $3.1
Multiplex (8-15 auditoriums)........               5.0               5.0
Miniplex (2-7 auditoriums)..........               1.0               0.9
Single-Auditorium...................               0.6               0.5
                                     -----------------------------------
    Total...........................               9.7               9.5
------------------------------------------------------------------------
* Totals may differ due rounding.

    As part of this regulatory analysis and in accordance with the 
Regulatory Flexibility Act (5 U.S.C. 604), the Department has conducted 
a Final Regulatory Flexibility Analysis (FRFA) on the economic impact 
of this rule on small entities. The FRFA has been used by the 
Department to help determine whether small entities would be 
disproportionately burdened. In addition, the Department has used the 
FRFA to examine other ways, if possible, to accomplish the Department's 
goals while imposing fewer burdens on small entities. Based on its 
analysis, the Department has determined that this rule will have a 
significant economic impact on a substantial number of small entities 
in the movie exhibition industry. However, as described in further 
detail in section VI, infra, the Department has taken appropriate steps 
to reduce the economic impact of this rule while still meeting the 
Department's rulemaking objectives under the ADA.
    The table below presents the average upfront costs as a percentage 
of annual revenue for firms categorized as small businesses according 
to the Small Business Association (SBA) size standard for the movie 
exhibition industry, which is $38.5 million in annual revenue. For all 
firms with revenue greater than $100,000,\6\ the average upfront costs 
are less than 1.5 percent of average annual revenue. For all firms with 
revenues of $2,500,000 or greater, the average upfront costs are less 
than 1 percent of annual revenues.
---------------------------------------------------------------------------

    \6\ Although the FRFA calculates the upfront costs as a percent 
of annual revenue for the category of firms with less than $100,000 
in annual revenue for transparency, most of these firms likely 
operate single-auditorium movie theaters that exhibit analog movies 
exclusively and are therefore not subject to the requirements of 
this rule. See infra section VI.D for further detail.

[[Page 87352]]



       Average Upfront Costs as a Percentage of Annual Revenue per Firm, by Revenue Category, Undiscounted
                                                    [2015 $]
----------------------------------------------------------------------------------------------------------------
                                                                                                   Upfront costs
                               Establishments    Average upfront      Average         Average          as a
      Revenue category            per firm          costs per      upfront costs    revenue per    percentage of
                                                  establishment      per firm          firm         revenue (%)
----------------------------------------------------------------------------------------------------------------
Less than $100,000..........              1.01            $3,562          $3,591         $54,508             6.6
$100,000 to $499,999........              1.02             3,562           3,631         256,537             1.4
$500,000 to $999,999........              1.06             9,834          10,456         714,762             1.5
$1,000,000 to $2,499,999....              1.15            14,071          16,223       1,542,318             1.1
$2,500,000 to $4,999,999....              1.51            20,987          31,732       3,394,864             0.9
$5,000,000 to $7,499,999....              1.89            20,987          39,575       5,497,029             0.7
$7,500,000 to $9,999,999....              2.58            20,987          54,124       7,697,211             0.7
$10,000,000 to $14,999,999..              4.12            20,987          86,368      12,013,115             0.7
$15,000,000 to $19,999,999..              4.56            20,987          95,606      14,200,444             0.7
$20,000,000 to $24,999,999..              6.00            20,987         125,920      14,314,600             0.9
$25,000,000 to $29,999,999..             11.00            20,987         230,853      22,734,000             1.0
$30,000,000 to $34,999,999..             16.50            20,987         346,280           * n/a           * n/a
$35,000,000 to $39,999,999..              8.00            20,987         167,893      27,514,000             0.6
----------------------------------------------------------------------------------------------------------------
* Annual revenue data withheld and value set to 0 to avoid disclosing information of individual businesses.

    The final rule, consistent with the ADA's mandate, explicitly 
addresses equity and fairness considerations. The Department believes 
that this regulation will benefit millions of Americans, including 
those with and without disabilities. Although these benefits are 
difficult to quantify, they are nonetheless significant. Foremost among 
the expected benefits from the regulation is the opportunity for a 
greater number of individuals who are deaf or hard of hearing, or blind 
or have low vision, to better understand what is being said and shown 
in digital movies exhibited at movie theaters so that they may fully 
and equally participate in the movie-going experience to the same 
extent as persons without these disabilities. In addition to the 
benefits to individuals with disabilities, individuals without 
disabilities--who will now be able to attend, enjoy, and discuss movies 
with their family and friends that have disabilities--will also benefit 
from this rule. For example, because of this rule, a parent without a 
disability can now attend the movies with a child who has a hearing or 
vision disability. The parent will now be able to share the movie-going 
experience with her child and discuss the film and experience with the 
child. Similarly, individuals without disabilities who are learning 
English as an additional language or may be working to improve their 
literacy skills may also benefit from the availability of closed movie 
captioning.
    While many movie theaters do provide captioning and audio 
description to their patrons, many still do not provide these auxiliary 
aids and services at all or they do not provide them regularly, 
creating barriers for persons with disabilities to take part in the 
social and cultural movie-going experience. As a result, the Department 
is confident that the qualitative benefits of this rulemaking justify 
the associated costs.

II. The Movie Industry: Digital Movies and the Availability of 
Captioning and Audio Description

A. Transformation From Analog Films to Digital Movies

    Digital technology has revolutionized the way movies are produced, 
delivered, and exhibited. For nearly 100 years, movie studios produced 
films exclusively in analog film format (analog movies), meaning that 
they were typically shot with 35 mm film, cut and spliced for editing, 
shipped to individual movie theaters on several large, heavy reels, and 
exhibited with a conventional reel-to-reel movie projector. All that 
changed at the beginning of the twenty-first century with the 
development of digital cinema technology and the commercial production 
of movies in digital cinema format (digital movies).\7\
---------------------------------------------------------------------------

    \7\ Star Wars: Episode II--Attack of the Clones, released in 
2002, was the first major motion picture to be shot entirely on 
digital video. See Helen Alexander & Rhys Blakely, The Triumph of 
Digital Will Be the Death of Many Movies, New Republic (Sept. 12, 
2014), available at http://newrepublic.com/article/119431/how-digital-cinema-took-over-35mm-film (last visited Sept. 12, 2016).
---------------------------------------------------------------------------

    Digital cinema captures images, data, and sound as a digital cinema 
``package'' (DCP) that is stored on a hard drive or a flash drive. 
Digital movies are physically delivered on high resolution DVDs or 
removable or external hard drives, or can be transmitted to movie 
theaters' servers via Internet, fiber-optic, or satellite networks. 
Digital production, distribution, and exhibition have many advantages 
over analog film, including better and longer lasting image quality, 
availability of higher resolution images, significantly lower 
production and distribution costs, ease of distribution, availability 
of enhanced effects such as 3D, ease of exhibition of live events or 
performances, greater flexibility in arranging or increasing show times 
to accommodate unanticipated audience demand, and remote monitoring of 
projection. See Rajesh K, Digital Cinema--Advantages and Limitations, 
excITingIP.com (Oct. 2, 2009), available at http://www.excitingip.com/611/advantages-limitations-digital-cinema/ (last visited Sept. 12, 
2016).
    The shift to digital cinema has led to a precipitous decline in the 
filming, distribution, and exhibition of analog movies, resulting in 
enormous uncertainty about the future of the analog film market. See 
Helen Alexander & Rhys Blakely, The Triumph of Digital Will Be the 
Death of Many Movies, New Republic (Sep. 12, 2014), available at http://www.newrepublic.com/article/119431/how-digital-cinema-took-over-35mm-film (last visited Sept. 12, 2016); see also John Belton, If Film is 
Dead, What is Cinema?, 55 Screen 460, 461-63 (2014), available at 
http://english.rutgers.edu/docman/documents/104-screen-2014-belton-460-70-2/file.html (last visited Sept. 12, 2016). In 2013, Fujifilm, one of 
the two major producers of movie film stock, announced it was ceasing 
production of movie film stock. In 2014, Kodak, the other major 
producer of movie film stock, after first announcing it would cease 
production of film stock,

[[Page 87353]]

committed to produce only 449 million linear feet (as compared to the 
12.4 billion linear feet it produced in 2006). See Michael Idato, 
Quentin Tarantino, JJ Abrams Help Save Old-Fashioned Film Stock, Sydney 
Morning Herald (July 31, 2014), available at http://www.smh.com.au/entertainment/movies/quentin-tarantino-jj-abrams-help-save-oldfashioned-film-stock-20140731-zytlw.html (last visited Sept. 12, 
2016).
    Some movie studios have also begun to release first-run movies 
exclusively in digital cinema format. For example, both Paramount 
Pictures and Twentieth Century Fox have completely stopped releasing 
movies in analog format. See Richard Verrier, End of Film: Paramount 
First Studio to Stop Distributing Film Prints, L.A. Times (Jan. 17, 
2014), available at http://articles.latimes.com/2014/jan/17/entertainment/la-et-ct-paramount-digital-20140117 (last visited Sept. 
12, 2016); Matt Alderton, Films Without Film, Profile Magazine (2014), 
available at http://profilemagazine.com/2014/twentieth-century-fox 
(last visited Sept. 12, 2016). In its comment on the Department's 2014 
Notice of Proposed Rulemaking, the National Association of Theater 
Owners (NATO) reported that several other movie studios plan to stop 
producing analog movies, and NATO expects independent production 
companies to follow suit.\8\
---------------------------------------------------------------------------

    \8\ See National Association of Theater Owners, Statement of 
Position on RIN 1190-AA63, CRT Docket No. 126, Nondiscrimination on 
the Basis of Disability by Public Accommodations--Movie Theaters; 
Movie Captioning and Audio Description 4, available at http://www.regulations.gov/contentStreamer?documentId=DOJ-CRT-2014-0004-0401&attachmentNumber=4&disposition=attachment&contentType=pdf (last 
visited Sept. 12, 2016). NATO is the largest association of motion 
picture theater owners in the world, and its members include the 
nation's ten largest movie theater companies as well as hundreds of 
smaller entities. Together, its member movie theaters operate 32,000 
of the 40,000 movie theater auditoriums in the United States.
---------------------------------------------------------------------------

B. Digital Conversion of Movie Theater Auditoriums

    To accommodate the motion picture industry's shift to the 
distribution of movies in digital format, movie theaters across the 
nation have rapidly transformed and have now nearly completed 
conversion of their auditoriums to digital projection systems. These 
systems consist primarily of a digital server and a digital projector 
and typically cost around $60,000 to $150,000 per auditorium. See Helen 
Alexander & Rhys Blakely, The Triumph of Digital Will Be the Death of 
Many Movies, New Republic (Sep. 12, 2014), available at http://www.newrepublic.com/article/119431/how-digital-cinema-took-over-35mm-film (last visited Sept. 12, 2016). This transition to digital 
projection systems has accelerated exponentially since 2008 when the 
Department first sought public comment about whether it should engage 
in rulemaking. At that time, the information provided to the Department 
through public comment indicated that only 5,000 of the 38,794 
auditoriums \9\ (13 percent) had been converted to digital. See Advance 
Notice of Proposed Rulemaking, Nondiscrimination of the Basis of 
Disability; Movie Captioning and Video Description, 75 FR 43467, 43473 
(July 26, 2010). Based on data from July 2015 that NATO provided to the 
Department, the Department estimates that more than 98 percent of 
indoor movie auditoriums (or 38,688 auditoriums) in the United States 
have been converted to digital, leaving only approximately 650 indoor 
analog projection systems.\10\
---------------------------------------------------------------------------

    \9\ Although the movie industry refers to ``auditoriums'' as 
``screens'' throughout its commentary, the Department believes that 
``auditoriums'' is more accurate. Therefore, the Department refers 
to ``auditoriums'' throughout this rule.
    \10\ The remaining venues showing movies using analog projection 
systems are found at drive-in movie theaters, which are not subject 
to the requirements of the final rule.
---------------------------------------------------------------------------

    As digital technology has advanced, the number of small movie 
theaters and those showing analog movies has also declined. From 2010 
to 2014, single-auditorium movie theaters and those with up to seven 
auditoriums declined by approximately 25 percent while the number of 
movie theaters with eight or more auditoriums increased. See Motion 
Picture Association of America (MPAA), Theatrical Market Statistics 
2014, at 25 (2014), available at http://www.mpaa.org/wp-content/uploads/2015/03/MPAA-Theatrical-Market-Statistics-2014.pdf (last 
visited Sept. 12, 2016). Moreover, the number of analog auditoriums 
declined by more than 92% during that same time period. See id. While 
small, independent movie theaters have been the slowest to convert to 
digital technology, the Department, consistent with industry 
projections, anticipates that the vast majority of the remaining analog 
movie theaters will either convert to digital projection systems, or be 
forced to close because of antiquated equipment and the decline in the 
availability of first-run movies in analog format. See Lyndsey Hewitt, 
Local Theaters Face Tough Times as 35 mm Faces Extinction, Williamsport 
Sun Gazette (July 11, 2013), available at http://www.sungazette.com/page/content.detail/id/594504/Local-Theaters-Face-Tough-Times-as-35-mm-faces-extinction.html?nav=5016 (last visited Sept. 12, 2016); see also 
Colin Covert, Final Reel Plays Amid Digital Conversion, Star Tribune 
(Aug. 27, 2012), available at http://www.startribune.com/final-reel-plays-amid-digital-conversion/167253335/ (last visited Sept. 12, 2016); 
Krista Langlois, As Analog Film Grows Obsolete, Western Towns Struggle 
to Keep Theaters Afloat, High Country News (Jan. 10, 2014), available 
at http://www.hcn.org/blogs/goat/as-film-grows-obsolete-western-towns-struggle-to-keep-their-theaters-open (last visited Sept. 12, 2016).

C. Availability of Captioning and Audio Description

    Captioning makes movies accessible to individuals who are deaf or 
hard of hearing and who are unable to benefit from the sound 
amplification provided by movie theaters' assistive listening 
receivers. Currently, captioning is delivered to patrons in one of two 
formats: ``open'' and ``closed.'' ``Open'' movie captioning shows the 
movie dialogue and non-speech information in written form on or near 
the screen with the information visible to all patrons regardless of 
whether they need to view the captions. ``Closed'' movie captioning 
displays the movie's dialogue and non-speech information in written 
form on a captioning device, which is requested by the individual 
patron who wishes to view the captions.
    The motion picture industry and the courts have consistently used 
the term ``closed captioning'' to refer to the provision of captions 
displayed on captioning devices at the patron's seat. In the television 
context, however, the term ``closed captioning'' has typically referred 
to captions that, when activated, are visible on the TV screen to all 
viewers. In this rule, in order to avoid confusion with the term used 
for captions provided in the television context (as well as in other 
contexts), the Department has chosen to use the terms ``closed movie 
captioning'' and ``open movie captioning'' to specifically refer to the 
captioning provided by movie theaters, except where quoting the 
legislative history of the ADA or specific court decisions.
    Closed movie captioning first became available for analog movies in 
1997 but was never available at many movie theaters.\11\ The advent of 
digital cinema

[[Page 87354]]

spurred the development of voluntary standards to ensure that products 
that provide captioning would be compatible with the various digital 
cinema systems available for purchase and used by movie theaters. As a 
result, closed movie captioning became more widely available. See 
Michael Karagosian, Update on Digital Cinema Support for Those with 
Disabilities: April 2013, available at http://www.mkpe.com/publications/d-cinema/misc/disabilities_update.php (last visited Sept. 
12, 2016).
---------------------------------------------------------------------------

    \11\ There still is only one technology that provides closed 
movie captioning for analog movies. That technology, known as Rear 
Window Captioning, does not require a separate copy of the film, and 
works using a movie theater's digital sound system. Captions are 
sent to a light-emitting display at the rear of an auditorium that 
then reflects and superimposes the captions onto a panel mounted at 
or near a patron's seat so that the captions appear close to the 
movie image.
---------------------------------------------------------------------------

    There are currently two types of individual devices that are 
produced to deliver closed movie captioning for digital movies to 
patrons. These devices receive a transmission from a server via an 
infrared transmitter or Wi-Fi technology. One type of device utilizes a 
small, wireless screen attached to a flexible goose neck that can be 
placed in the cup holder at any movie theater seat and adjusted to 
display captions near or in a patron's line of vision when looking at 
the movie screen. Alternatively, special eyeglasses are available that 
a patron can wear that will exhibit the captions directly in front of 
the wearer's eyes while watching a movie.
    Open movie captioning has sometimes been referred to as ``burned-
in'' or ``hardcoded'' captions because in the early days of captioning 
they were burned in or incorporated into the analog film. Later 
advancements, however, enabled studios to superimpose the captions on 
the screen without making a burned-in copy or having to deliver a 
special version of the movie. Today, open movie captioning is available 
as a digital file that comes with the DCP. No additional equipment is 
required in order for a movie theater to display the open movie 
captions for a digital movie. The Department is aware that some movie 
theaters currently provide open movie captioning at certain limited 
showings but knows of no movie theater that routinely utilizes open 
movie captioning for all screenings.
    Audio description, which also became available in 1997, enables 
individuals who are blind or have low vision to hear a spoken narration 
of a movie's key visual elements, including, but not limited to, the 
action, settings, facial expressions, costumes, and scene changes. It 
requires specially trained writers to create a separate script that is 
then recorded and synchronized with the movie, included on the audio 
channels in the DCP, and delivered from a server via infrared, FM, or 
Wi-Fi systems to wireless headsets that patrons wear at their seats.
    Movie studios and distributors determine whether a motion picture 
is produced and distributed with captioning and audio description. In 
1997, movie studios began to substantially increase the number of 
movies produced with captioning in response to the Federal 
Communications Commission's publication of regulations requiring 
programming shown on television (including movies) to be captioned. See 
47 CFR 79.1. Additionally, the motion picture industry's transformation 
to digital cinema has made the delivery of captioning and audio 
description to movie theater patrons easier and less costly to provide. 
As early as 2010, the movie industry indicated its commitment to 
provide closed movie captioning and audio description for almost all 
movies released in digital format.\12\ Although the Department does not 
have data on the exact percentage of digital movies currently produced 
with captioning and audio description, the Department's research 
indicates that movie studios and distributors regularly include these 
accessibility features in the DCP at no extra charge to movie theaters. 
Despite this availability, however, captioning and audio description 
are still not consistently made available at all movie theaters, or at 
all showings, to patrons who are deaf or hard of hearing, or blind or 
have low vision.
---------------------------------------------------------------------------

    \12\ The MPAA announced in its comment on the 2010 Advance 
Notice of Proposed Rulemaking that almost all new movies released in 
digital format will include closed movie captioning and audio 
description. See 2014 NPRM, 79 FR 44976, 44989 (Aug. 1, 2014), for a 
more detailed discussion of the MPAA's comments on the 2010 ANPRM.
---------------------------------------------------------------------------

III. Movie Theaters' Legal Obligation To Provide Captioning and Audio 
Description

A. The ADA and Its Legislative History

    The ADA, enacted in July 1990, is a comprehensive civil rights law 
that broadly prohibits discrimination on the basis of disability and 
seeks to guarantee that individuals with disabilities are provided the 
same rights, privileges, and opportunities as other members of the 
public. The ADA's mandate covers three broad, distinct areas: 
Employment (title I), public services (title II), and places of public 
accommodation (title III).
    Title III prohibits discrimination on the basis of disability in 
the full and equal enjoyment of the goods, services, facilities, 
privileges, advantages, or accommodations of any place of public 
accommodation. 42 U.S.C. 12182(a). It specifically categorizes a movie 
theater (``motion picture house'') as a place of public accommodation. 
42 U.S.C. 12181(7)(C). Under title III, public accommodations such as 
movie theaters are barred from affording an unequal or lesser service 
to individuals or classes of persons with disabilities than is offered 
to other persons. 42 U.S.C. 12182(b)(1)(A)(ii). Public accommodations 
must also ``take such steps as may be necessary to ensure that no 
individual with a disability is excluded, denied services, segregated 
or otherwise treated differently * * * because of the absence of 
auxiliary aids and services'' unless doing so ``would fundamentally 
alter the nature'' of the service, or ``result in an undue burden.'' 42 
U.S.C. 12182(b)(2)(A)(iii). The statute specifies that auxiliary aids 
and services include effective methods of making aurally or visually 
delivered materials available to individuals with hearing disabilities 
or vision disabilities, respectively, and expressly covers ``taped 
texts.'' 42 U.S.C. 12103(1)(A)-(B).
    While the ADA's text does not refer to movie captioning, the 
legislative history does. The congressional House and Senate committee 
reports accompanying the legislation noted that ``[o]pen captioning * * 
* of feature films playing in movie theaters * * * is not required'' by 
the ADA. H.R. Rep. No. 101-485, pt. 2, at 108 (1990); S. Rep. No. 101-
116, at 64 (1989). At that time, the only way to create open movie 
captioning was to make a separate print of the movie and then laser-
etch, or ``burn,'' the captions onto that separate print.\13\ The House 
and Senate committees nonetheless endorsed open captioning as a means 
to provide individuals who are deaf or hard of hearing equal access to 
the movies, stating that ``[f]ilmmakers are, however, encouraged to 
produce and distribute open-captioned versions of films and theaters 
are encouraged to have at least some preannounced screenings of a 
captioned version of feature films.'' S. Rep. No. 101-116, at 64; see 
also H.R. Rep. No. 101-485, pt. 2, at 108.
---------------------------------------------------------------------------

    \13\ Limited copies of the open-captioned version were made and 
given to only some movie theaters and then only after the 
uncaptioned version had already been distributed.
---------------------------------------------------------------------------

    The House committee report also emphasized that the types of 
accommodations and services provided to individuals with disabilities 
``should keep pace with the rapidly changing

[[Page 87355]]

technology of the times.'' H.R. Rep. No. 101-485, pt. 2, at 108. It 
explained that ``technological advances can be expected to further 
enhance options for making meaningful and effective opportunities 
available to individuals with disabilities'' and ``[s]uch advances may 
require public accommodations to provide auxiliary aids and services in 
the future which today would not be required.'' Id.
    Neither closed movie captioning nor audio description existed when 
the ADA was enacted. Both, however, fall within the type of auxiliary 
aid contemplated by the statute. Given the current availability of 
digital movies with closed movie captioning and audio description, as 
well as the individual devices to provide those accessibility features 
to movie patrons who are deaf or hard of hearing, or blind or have low 
vision, the Department believes that a rule requiring movie theaters to 
offer closed movie captioning and audio description for digital movies 
fits comfortably within the meaning of the ADA's mandate.

B. Title III's Implementing Regulation

    Title III's implementing regulation reiterates the statute's 
requirements and spells out in detail a public accommodation's 
obligation to furnish auxiliary aids and services to individuals with 
disabilities. 28 CFR 36.303(c)(1). The regulation's list of examples of 
``auxiliary aids and services'' that public accommodations should 
provide includes ``open and closed captioning'' as examples of 
effective methods of making aurally delivered information available to 
individuals with hearing disabilities and ``audio recordings'' as an 
example of an effective method of making visually delivered materials 
available to individuals with vision disabilities. 28 CFR 36.303(b)(1)-
(2). The Department updated this list in 2010 to reflect changes in 
technology and the auxiliary aids and services commonly used by 
individuals who are deaf or hard of hearing, or blind or have low 
vision. 75 FR 56236, 56253-54 (Sept. 15, 2010).
    The title III regulation states that a public accommodation shall 
take those steps that may be necessary to ensure that no individual 
with a disability is excluded, denied services, segregated, or 
otherwise treated differently than other individuals because of the 
absence of auxiliary aids and services, unless the public accommodation 
can demonstrate that providing such aids and services would 
fundamentally alter the nature of the goods, services, facilities, 
privileges, advantages, or accommodations being offered or would result 
in an undue burden. 28 CFR 36.303(a). The overarching obligation 
imposed by the auxiliary aids and services requirement is that a public 
accommodation must furnish appropriate auxiliary aids and services 
where necessary to ensure effective communication with individuals with 
disabilities. 28 CFR 36.303(c)(1). The type of auxiliary aid or service 
necessary to ensure effective communication varies in accordance with 
the method of communication used by the individual; the nature, length, 
and complexity of the communication involved; and the context in which 
the communication is taking place. 28 CFR 36.303(c)(1)(ii). Moreover, 
in order to be effective, auxiliary aids and services must be provided 
in accessible formats and in a timely manner. Id. For individuals who 
are deaf or hard of hearing and who are unable to effectively use the 
assistive listening receivers currently provided in movie theaters to 
amplify sound, the only auxiliary aid presently available that would 
effectively communicate the dialogue and sounds in a movie is 
captioning. Likewise, for individuals who are blind or who have low 
vision, the only auxiliary aid presently available that would 
effectively communicate the visual components of a movie is audio 
description.
    As stated above, a public accommodation is relieved of its 
obligation to provide a particular auxiliary aid if to do so would 
result in an undue burden or a fundamental alteration. To that end, the 
Department's title III regulation specifically defines undue burden as 
``significant difficulty or expense'' and, emphasizing the flexible and 
individualized nature of any such determination, lists five factors 
that must be considered when determining whether an action would result 
in an undue burden. 28 CFR 36.104.\14\ The undue burden determination 
entails a fact-specific examination of the cost of a specific action 
and the specific circumstances of a particular public accommodation. 
This compliance limitation is intended to ensure that the needs of 
small businesses, as well as large businesses, are addressed and 
protected. The Department defines a fundamental alteration as a 
``modification that is so significant that it alters the essential 
nature of the goods, services, facilities, privileges, advantages, or 
accommodations offered.'' U.S. Department of Justice, Americans with 
Disabilities Act ADA Title III Technical Assistance Manual Covering 
Public Accommodations and Commercial Facilities III-4.3600 (1993), 
available at http://www.ada.gov/taman3.html.
---------------------------------------------------------------------------

    \14\ These factors include: (1) The nature and cost of the 
action; (2) the overall financial resources of the site or sites 
involved in the action; the number of persons employed at the site; 
the effect on expenses and resources; legitimate safety requirements 
that are necessary for safe operation, including crime prevention 
measures; or the impact otherwise of the action upon the operation 
of the site; (3) the geographic separateness, and the administrative 
or fiscal relationship of the site or sites in question, to any 
parent corporation or entity; (4) if applicable, the overall 
financial resources of any parent corporation or entity; the overall 
size of the parent corporation or entity with respect to the number 
of its employees; and the number, type, and location of its 
facilities; and (5) if applicable, the type of operation or 
operations of any parent corporation or entity, including the 
composition, structure, and functions of the workforce of the parent 
corporation or entity.
---------------------------------------------------------------------------

    The current section 36.303(g) (renumbered as 36.303(h) in this 
final rule) provides that if the provision of a particular auxiliary 
aid or service by a public accommodation would result in an undue 
burden or a fundamental alteration, the public accommodation is not 
relieved of its obligation to provide auxiliary aids and services. The 
public accommodation is still required to provide an alternative 
auxiliary aid or service, if one exists, that would not result in such 
a burden or alteration but would nevertheless ensure that, to the 
maximum extent possible, individuals with disabilities receive the 
goods and services offered by the public accommodation.
    It has been, and continues to be, the Department's position that it 
would not be a fundamental alteration of the business of showing movies 
in theaters to exhibit movies already distributed with closed movie 
captioning and audio description in order to ensure effective 
communication for individuals who are deaf or hard of hearing, or blind 
or have low vision. The service that movie theaters provide is the 
screening or exhibiting of movies. The use of captioning and audio 
description to make that service available to those who are deaf or 
hard of hearing, or blind or have low vision, does not change that 
service. Rather, the provision of such auxiliary aids is the means by 
which these individuals gain access to movie theaters' services and 
thereby achieve the ``full and equal enjoyment,'' 42 U.S.C. 12182(a), 
of the screening of movies. See, e.g., Brief for the United States as 
Amicus Curiae Supporting Appellants and Urging Reversal at 15-17, 
Arizona ex rel. Goddard v. Harkins Amusement Enters., Inc., 603 F.3d 
666 (9th Cir. 2010) (No. 08-16075); see also 2014 NPRM, 79 FR 44976, 
44982-83 (Aug. 1, 2014).\15\
---------------------------------------------------------------------------

    \15\ The Department received no public comments challenging that 
position.

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

[[Page 87356]]

C. Federal Appellate Case Law

    The Ninth Circuit is the only Federal court of appeals to address 
the question whether the ADA requires movie theaters to provide 
captioning and audio description to patrons who are deaf or hard of 
hearing, or blind or have low vision. See Arizona ex rel. Goddard v. 
Harkins Amusement Enters., Inc., 603 F.3d 666 (9th Cir. 2010). In 
Harkins, the Ninth Circuit reversed a district court decision 
dismissing a complaint for failure to state a claim and held that 
``closed captioning'' and audio description are ``auxiliary aids and 
services'' that the ADA may require movie theaters to provide. Id. at 
668, 675. Evaluating the statute's language, implementing regulation, 
and case law, the Harkins court reasoned that because a public 
accommodation has a duty to provide auxiliary aids and services, 
including ``closed captioning'' and audio description, a movie theater 
unlawfully discriminates when it fails to offer ``closed captioning'' 
and audio description to persons who have difficulty hearing or seeing, 
absent proof that those features would fundamentally alter the nature 
of the theater's services or constitute an undue burden. Id. at 675.

IV. Rulemaking History Regarding Captioning and Audio Description

A. Prior to 2010

    On September 30, 2004, the Department published an Advance Notice 
of Proposed Rulemaking announcing its intention to update the 1991 
title II and title III ADA regulations and to adopt revised ADA 
Accessibility Standards. 69 FR 58768 (Sept. 30, 2004) (2004 ANPRM). 
While the 2004 ANPRM did not mention movie captioning or audio 
description, several commenters suggested that the Department issue a 
rule regulating these features. Subsequently, when the Department 
issued a Notice of Proposed Rulemaking in June 2008, 73 FR 34508 (June 
17, 2008) (2008 NPRM), proposing comprehensive updates to the title III 
regulation relating to nondiscrimination on the basis of disability by 
public accommodations and commercial facilities, the Department 
announced that it was considering rulemaking that would require movie 
theaters to provide captioning and audio description for patrons who 
are deaf or hard of hearing, or who are blind or have low vision. 73 FR 
at 34530-31.
    The 2008 NPRM did not propose any specific regulatory language 
addressing captioning and audio description. Rather, the Department 
emphasized that movie theaters should be left with the discretion to 
select the appropriate technology should captioning and audio 
description be required for patrons with hearing and vision 
disabilities. Nonetheless, the Department inquired whether it should 
require movie theaters to exhibit all new movies with captioning and 
audio description at every showing or offer those features on a limited 
basis.
    Most of the commenters on the 2008 NPRM who addressed the issue of 
captioning and audio description recommended that the Department issue 
regulations requiring movie theaters to provide both features at all 
showings unless doing so would result in an undue burden or a 
fundamental alteration. These commenters urged the Department to act 
promptly and not await completion of movie theaters' ongoing conversion 
to digital cinema because the technology for captioning and audio 
description had been available for approximately ten years and few 
movie theaters provided either feature to their patrons. Commenters 
affiliated with the movie industry opposed the Department requiring 
movie theaters to offer captioning or audio description and claimed 
that the cost of the necessary equipment would constitute an undue 
burden. They also maintained that if the Department decided to issue a 
rule, the effective date should be delayed until movie theaters 
completed their conversion to digital cinema. See Advance Notice of 
Proposed Rulemaking, Nondiscrimination on the Basis of Disability; 
Movie Captioning and Video Description, 75 FR 43467 (July 26, 2010), 
for a more detailed discussion of comments on the 2008 NPRM.

B. The 2010 Advance Notice of Proposed Rulemaking on Captioning and 
Video Description

    In 2010, uncertain about the status of digital conversion, the 
availability of captioning and audio description technology, and 
financial setbacks to many public accommodations due to the downturn in 
the economy over the ensuing 2 years, the Department published the 
Advance Notice of Proposed Rulemaking, Nondiscrimination on the Basis 
of Disability; Movie Captioning and Video Description, 75 FR 43467 
(July 26, 2010) (2010 ANPRM), specifically addressing ``closed [movie] 
captioning'' and ``video description.'' \16\ The Department sought 
comments in response to 26 questions falling into six categories: 
Coverage of any proposed rule; transition to digital cinema; equipment 
and technology for both analog and digital movies; notice; training; 
and cost and benefits of captioning and audio description. While the 
Department did not propose specific regulatory language, it noted that 
it was considering a rule that would require 50 percent of movie 
theater screens (auditoriums) \17\ to offer captioning and audio 
description over a 5-year period and specifically sought comment on 
that approach. 75 FR at 43474.
---------------------------------------------------------------------------

    \16\ The 2010 ANPRM used the term ``video description'' to refer 
to the provision of descriptive information about a movie to persons 
who are blind or have low vision. As discussed in this rule, the 
Department is now using the term ``audio description.''
    \17\ In the 2010 ANPRM, the Department used the term ``screens'' 
to describe the movie theater facilities that needed to be capable 
of providing captioning and audio description, but the Department 
has replaced the term ``screens'' with the term ``auditoriums'' in 
the final rule. Although the terms are synonymous in the movie 
theater context, the Department believes that ``auditoriums'' is 
more accurate.
---------------------------------------------------------------------------

    The Department received over 1150 comments on the 2010 ANPRM. 
Almost all commenters favored a rule that required movie theaters to 
provide captioning and audio description, and the vast majority 
recommended that these features be required at all movie showings. 
Although industry commenters recommended that compliance be phased in 
over a 5-year schedule with 20 percent compliance each year, most 
commenters recommended that the requirement be implemented immediately.

C. The 2014 Notice of Proposed Rulemaking on Movie Captioning and Audio 
Description

    After considering all of the comments on the 2010 ANPRM and the 
rapid rate at which movie theaters were converting from analog to 
digital projection systems, the Department published a Notice of 
Proposed Rulemaking on August 1, 2014, entitled Nondiscrimination on 
the Basis of Disability by Public Accommodations--Movie Theaters; Movie 
Captioning and Audio Description, 79 FR 44976 (Aug. 1, 2014) (2014 
NPRM). In the 2014 NPRM, the Department proposed that movie theaters be 
required to provide captioning and audio description at all scheduled 
showings of any movie that is produced or otherwise distributed with 
such features. 79 FR at 44977. The Department also proposed that each 
movie theater have available a certain number of captioning devices 
based on the number of seats in the movie theater and have available a 
certain number of audio description devices based on the number of 
screens (auditoriums) in the theater. 79 FR 44976. The Department 
further proposed that movie theaters

[[Page 87357]]

provide notice of the availability of captioning and audio description 
as well as ensure that knowledgeable staff are available to operate the 
equipment and assist patrons in the use of the captioning and audio 
description devices. 79 FR 44976-77. The Department sought public 
comment in response to 21 multi-part questions addressing a variety of 
areas, including the state of the movie industry; the proposed 
definitions and the nomenclature to be adopted; the compliance date; 
the basis for determining the number of devices required at each 
theater; the alternatives for analog as well as small theaters; and the 
Department's methodology for estimating the costs and benefits of the 
rule.
    The Department received 436 comments from a range of stakeholders, 
including individuals, both with and without disabilities, advocacy 
groups representing individuals with disabilities, State and Federal 
entities, movie industry representatives, private companies, and other 
organizations. The Department received a joint comment submitted by the 
National Association of Theater Owners in conjunction with the 
Alexander Graham Bell Association for the Deaf and Hard of Hearing, the 
Association of Late Deafened Adults, the Hearing Loss Association of 
America, and the National Association of the Deaf (Joint Comment), 
which included a variety of specific recommendations.\18\ In addition, 
the Department participated in a roundtable sponsored by the Office of 
Advocacy of the Small Business Administration at which organizations 
representing small movie theaters as well as individual owners 
expressed their views.
---------------------------------------------------------------------------

    \18\ The specific recommendations proposed in the Joint Comment 
and all other comments are addressed in the Section-by-Section 
Analysis.
---------------------------------------------------------------------------

    Overall, the commenters supported the Department's stated purpose 
for proposing the rule. Individuals and industry representatives alike 
recognized that captioning and audio description in movie theaters is 
necessary in order to provide equal access to individuals with hearing 
and vision disabilities. Nearly all commenters disagreed, however, with 
the Department's basis for determining the number of devices required 
at each movie theater, including the number of captioning devices 
required. Most commenters also objected to the Department's proposed 6-
month compliance date.

D. Need for Regulatory Action

1. Movies in American Culture
    Going to the movies is a quintessential American experience. 
``Movie theaters continue to draw more people than all theme parks and 
major U.S. sports combined.'' MPAA, Theatrical Market Statistics 2014, 
at 10 (Mar. 2015), available at http://www.mpaa.org/wp-content/uploads/2015/03/MPAA-Theatrical-Market-Statistics-2014.pdf (last visited Sept. 
12, 2016). In addition, going to the movies is an important part of the 
American family experience. Long holiday weekends offer the movie 
industry some of its biggest box office sales as families gather for 
the holidays and attend the movies together.
    It has long been recognized that movies are undoubtedly a part of 
our shared cultural experience and the subject of ``water cooler'' talk 
and lunch-time conversations. More than half a century ago, the Supreme 
Court observed that motion pictures ``are a significant medium for the 
communication of ideas,'' and their ``importance * * * as an organ of 
public opinion is not lessened by the fact that they are designed to 
entertain as well as to inform.'' Joseph Burstyn, Inc. v. Wilson, 343 
U.S. 495, 501 (1952). The Court emphasized that motion pictures ``may 
affect public attitudes and behavior in a variety of ways, ranging from 
direct espousal of a political or social doctrine to the subtle shaping 
of thought which characterizes all artistic expression.'' Id. When 
individuals who are deaf or hard of hearing, or blind or have low 
vision, have the opportunity to attend and actually understand movies 
with the aid of captioning or audio description, they are exposed to 
new ideas and gain knowledge that not only contributes to their 
development, communication, and literacy, but more fundamentally, 
integrates them into society.
    In response to the 2014 NPRM, commenters with hearing and vision 
disabilities consistently reported that they were unable to take part 
in the movie-going experience because of the unavailability of 
captioning or audio description at their local movie theaters. Many 
individuals stated that the lack of these accessibility features not 
only affected their ability to socialize and fully take part in group 
or family outings, but also deprived them of the opportunity to 
meaningfully engage in the discourse relating to current movie 
releases.
2. Movie Patrons With Hearing and Vision Disabilities
    Individuals with hearing and vision disabilities represent a 
significant portion of the American population. According to the 2010 
Census, 7.6 million Americans ages 15 and older reported that they 
experience a hearing difficulty (defined as experiencing deafness or 
having difficulty hearing a normal conversation, even when wearing a 
hearing aid). Of those individuals, 1.1 million reported having a 
severe difficulty hearing. Census data also reflects that 8.1 million 
Americans ages 15 and older reported having some difficulty seeing 
(defined as experiencing blindness or having difficulty seeing words or 
letters in ordinary newsprint even when normally wearing glasses or 
contact lenses). Of those individuals, 2.0 million reported that they 
were blind or unable to see. See U.S. Census Bureau, U.S. Department of 
Commerce, P70-131, Americans with Disabilities: 2010 Household Economic 
Studies at 8 (2012), available at http://www.census.gov/prod/2012pubs/p70-131.pdf (last visited Sept. 12, 2016).
    Hearing and vision loss are highly correlated with aging. Census 
data indicates that for people aged 65 or older, 4.2 million have 
difficulty hearing and 3.8 million reported having difficulty seeing. 
Id. As the nation's population ages, the number of individuals with 
hearing or vision loss will increase significantly.\19\ Research 
indicates that the number of Americans with hearing loss has doubled 
during the past 30 years. See American Speech-Language-Hearing 
Association, The Prevalence and Incidence of Hearing Loss in Adults, 
available at http://www.asha.org/public/hearing/disorders/prevalence_adults.htm (last visited Sept. 12, 2016). Similarly, experts 
predict that by 2030 rates of severe vision loss will double in 
correspondence with the country's aging population. See American 
Foundation for the Blind, Aging and Vision Loss Fact Sheet, available 
at http://www.afb.org/section.aspx?FolderID=3&SectionID=44&TopicID=252&DocumentID=3374 (last 
visited Sept. 12, 2016). These increases

[[Page 87358]]

will likely lead to corresponding increases in the number of people who 
will need captioning or audio description. While not all of these 
individuals will necessarily take advantage of the captioning and audio 
description that will be provided under this rule, a significant 
portion of the population could directly benefit from their 
availability (see infra section V.A.4 for a more detailed discussion of 
the population eligible to receive benefits).
---------------------------------------------------------------------------

    \19\ The percentage of Americans approaching middle age or older 
is increasing. The 2010 Census reported that from 2000 to 2010, the 
percentage of adults aged 45 to 64 years increased by 31.5 percent 
while the population aged 65 and over grew at a rate of 15.1 
percent. By contrast, the population of adults between 18 and 44 
grew by only 0.6 percent. U.S. Census Bureau, U.S. Department of 
Commerce, C2010BR-03, Age and Sex Composition: 2010, at 2 (2011), 
available at www.census.gov/prod/cen2010/briefs/c2010br-03.pdf (last 
visited Sept. 12, 2016).
---------------------------------------------------------------------------

    Several commenters on the 2014 NPRM objected to the Department's 
reliance on Census data and argued that such reliance caused the 
Department to overstate the number of persons with hearing and vision 
disabilities who will actually use the captioning and audio description 
devices required by this rule. Others from the deaf, hard of hearing, 
blind, and low vision communities asserted that the number of 
individuals who experience hearing and vision disabilities is actually 
much higher than reported in the most current Census.\20\ According to 
these comments, individuals who have recently developed hearing or 
vision disabilities fail to define themselves as such for purposes of 
the formal U.S. Census process. However, none of these commenters 
provided data sources concerning the number of persons who are deaf, 
hard of hearing, blind, or have low vision, that are as comprehensive 
as the Census data. Thus, the Department continues to rely on Census 
data and believes it to be the most accurate available information 
regarding the number of persons in the population with these 
disabilities.
---------------------------------------------------------------------------

    \20\ For example, a Johns Hopkins University epidemiological 
study conducted by Frank Lin, M.D., Ph.D., which is believed to 
articulate the first nationally representative estimate of hearing 
loss, estimates that approximately 48 million Americans have hearing 
loss in at least one ear, and approximately 30 million Americans 
have hearing loss in both ears. ``Hearing loss'' was defined as not 
being able to hear sounds of 25 decibels or less in speech 
frequencies. See News Release, Johns Hopkins Medicine, One in Five 
Americans Has Hearing Loss (Nov. 14, 2011), available at http://www.hopkinsmedicine.org/news/media/releases/one_in_five_americans_has_hearing_loss (last visited Sept. 12, 
2016).
---------------------------------------------------------------------------

    While the Department recognizes that it is unlikely that persons 
with hearing and vision disabilities attend the movies with greater 
regularity than do persons without disabilities, some individuals with 
hearing and vision disabilities undoubtedly do not go to movies because 
the absence of captioning and audio description makes it impossible for 
them to understand what is happening. The Department also notes that 
many people with hearing loss are unable to use the assistive listening 
receivers that the ADA currently requires movie theaters to provide 
because these devices only provide sound amplification, and, for such 
individuals, amplification is insufficient to effectively communicate 
the dialogue and sounds taking place in the movie.\21\
---------------------------------------------------------------------------

    \21\ ``While we tend to think that the only factor in hearing 
loss is loudness, there are actually two factors involved: loudness 
and clarity. Loss generally occurs first in the high pitch, quiet 
range. A mild loss can cause one to miss 25-40% of speech, depending 
on the noise level of the surroundings and distance from the 
speaker. When there is background noise it becomes difficult to hear 
well, the speech may be audible but may not be understandable.'' 
Self Help for Hard of Hearing People of Oregon, Facing the 
Challenge: A Survivor's Manual for Hard of Hearing People (revised 
4th ed. Spring 2011), available at http://www.hearinglossky.org/hlasurvival1.html (last visited Sept. 12, 2016).
---------------------------------------------------------------------------

3. Voluntary Compliance
    Some movie industry commenters asserted that because many movie 
theater companies already provide captioning and audio description, the 
Department should refrain from regulating in this area and continue to 
rely on ``voluntary compliance'' by the movie theaters. However, 
individuals with hearing and vision disabilities and other commenters 
noted that despite the fact that captioning and audio description have 
been available for more than a decade and those features are widely 
available to movie theaters at no additional charge, many movie 
theaters still only show movies with captioning and audio description 
at intermittent times, and some movie theaters do not offer these 
services at all.
    The Department recognizes that since the publication of its 2010 
ANPRM (see supra section IV.B) the number of movie theaters that are 
showing movies with closed movie captioning and audio description, as 
well as their regularity in offering those features, has increased 
significantly. This described increase is attributable in large part to 
settlements of Federal or State disability rights lawsuits brought by 
private plaintiffs or State attorneys general against individual movie 
theater companies in particular jurisdictions within the United 
States.\22\ Commenters advised the Department that despite the increase 
in the availability of captioning and audio description in many parts 
of the country, these features are still not consistently available at 
all movie theaters.
---------------------------------------------------------------------------

    \22\ See, e.g., Press Release, Illinois Attorney General, 
Madigan Announces Settlement with AMC Theatres (Apr. 4, 2012), 
available at http://illinoisattorneygeneral.gov/pressroom/2012_04/20120404.html (last visited Sept. 12, 2016) (settlement providing 
for captioning and audio description technology in all AMC theaters 
in the State of Illinois); Wash. State Commc'n Access Project v. 
Regal Cinemas, Inc., 293 P.3d 413 (Wash. Ct. App. 2013) (upholding 
trial court decision under Washington Law Against Discrimination 
requiring six movie theater chains to provide captioning in the 
screening of movies in order to accommodate persons who are deaf or 
hard of hearing); Consent Decree, Arizona ex rel. v. Harkins 
Amusement Enters., Inc., No. CV07-703 PHX ROS (D. Ariz. Nov. 7, 
2011); Complaint, Ass'n of Late-Deafened Adults, Inc. v. Cinemark 
Holdings, Inc., No. 10548765 (Cal. Super. Ct. Nov. 30, 2010) 
(complaint relating to later settlement requiring Cinemark to 
provide closed movie captioning in all of its California theaters); 
Press Release, Cinemark Holdings, Inc., Cinemark and ALDA Announce 
Greater Movie Theatre Accessibility for Customers Who Are Deaf or 
Hard-of-Hearing (Apr. 26, 2011), available at http://www.cinemark.com/pressreleasedetail.aspx?node_id=22850 (last visited 
Sept. 12, 2016).
---------------------------------------------------------------------------

    The Department believes that access to movie theaters for persons 
who are deaf or hard of hearing, or blind or have low vision, should 
not depend upon where they live.\23\ The Department believes it is in 
the interest of both the movie theater industry and persons with 
disabilities to have consistent requirements for captioning and audio 
description throughout the United States and that this is best 
accomplished through revising the ADA's title III regulation. As 
commenters noted, a consistent, nationally applicable regulation 
ensures that individuals with hearing and vision disabilities can go to 
the movies with confidence knowing that their movie theater offers 
these services. The Department is persuaded that it should move forward 
with this regulation so that the current and ever-increasing number of 
individuals with hearing and vision disabilities who are unable to 
enjoy the services offered by movie theaters are afforded equal access 
to this facet of American life.
---------------------------------------------------------------------------

    \23\ It is the Department's understanding that persons who live 
in communities served only by smaller regional movie theater chains 
are less likely to have access to captioned and audio-described 
movies than individuals with disabilities who live in California, 
Arizona, or any of the major cities with movie theaters operated by 
Regal, Cinemark, or AMC. The Department bases this belief on its 
review of the information provided by Captionfish, which is a 
nationwide search engine that monitors which movie theaters offer 
both closed and open movie captioning and audio description and 
updates its Web site regularly. See Captionfish, Frequently Asked 
Questions, http://www.captionfish.com/faq (last visited Sept. 12, 
2016). The Department also bases this belief on information from 
comments that accessibility is scarce outside of major metropolitan 
areas. Advocacy groups commented that they consistently receive 
complaints from individuals with hearing and vision disabilities who 
are denied equal access at movie theaters operated by companies not 
subject to the various settlement agreements.
---------------------------------------------------------------------------

V. Regulatory Process Matters

A. Executive Orders 12866 and 13563--Summary of Regulatory Assessment

    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is

[[Page 87359]]

necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety 
effects, distributive impacts, and equity). Executive Order 13563 
emphasizes the importance of quantifying both costs and benefits, of 
reducing costs, of harmonizing rules, and of promoting flexibility. The 
Department has assessed the costs and benefits of this final rule and 
believes that the rule's benefits justify its costs, and that the 
regulatory approach selected maximizes net benefits.
    In keeping with Executive Order 12866, the Department has evaluated 
this rule to assess whether it would likely ``[h]ave an annual effect 
on the economy of $100 million or more or adversely affect in a 
material way the economy, a sector of the economy, productivity, 
competition, jobs, the environment, public health or safety, or State, 
local, or tribal governments or communities.'' E.O. 12866, Sec.  
3(f)(1). The Department's Final RA shows that this regulation does not 
represent an economically ``significant'' regulatory action within the 
meaning of Executive Order 12866.
    The Department's full Final RA can be found on the Department's Web 
site at http://www.ada.gov. The Department refers to sections of the 
Final RA throughout.
1. Purpose and Need for Rule and Scope of Regulatory Assessment
    As described in greater detail in section III, supra, and section 
1.1 of the Final RA, public accommodations that own, lease, or operate 
movie theaters have an existing obligation to provide effective 
communication to persons with disabilities through the use of auxiliary 
aids and services. This rule provides greater specificity as to how 
these effective communication obligations are met when showing digital 
movies that are produced, distributed, or otherwise made available with 
captioning and audio description.
    While there has been an increase in the number of movie theaters 
exhibiting movies with closed movie captioning (and, to a lesser 
extent, audio description) due in large part to successful disability 
rights litigation brought by private plaintiffs and State attorneys 
general during the past few years, the availability of movies exhibited 
with closed movie captioning and audio description varies significantly 
across the U.S. depending upon locality and movie theater ownership. 
The ADA requirements for effective communication apply to all public 
accommodations (including movie theaters) in every jurisdiction in the 
U.S. and should be consistently applied using a uniform ADA standard. 
The right to access movies exhibited with closed movie captioning and 
audio description should not depend on whether the person with a 
disability resides in a jurisdiction where movie theaters subject to a 
consent decree or settlement exhibit movies with closed movie 
captioning or audio description. And, even in jurisdictions where 
theaters exhibit movies with captioning and audio description, many do 
not make captioning and audio description available at all movie 
showings. Thus, some persons who are deaf or hard of hearing, or blind 
or have low vision, still cannot fully take part in movie-going outings 
with family or friends, join in social conversations about recent movie 
releases, or otherwise participate in a meaningful way in an important 
aspect of American culture.
    The Department is convinced that regulation is warranted at this 
time in order to achieve the goals and promise of the ADA. Through this 
rule, the Department is explicitly requiring movie theaters to exhibit 
digital movies with closed movie captioning and audio description at 
all times and for all showings whenever movies are produced, 
distributed, or otherwise made available with such features unless to 
do so would result in an undue burden or a fundamental alteration.
    The purpose of the Final RA is to capture the incremental costs of 
the rulemaking. As a result, the Final RA only includes the costs that 
movie theaters will incur as a direct result of this rulemaking. It is 
the Department's position that movie theaters that have already 
acquired the necessary equipment prior to the rulemaking have done so 
consistent with their longstanding obligation to provide effective 
communication as public accommodations, and as a result, the costs 
associated with providing closed movie captioning and audio description 
in such auditoriums cannot be directly attributed to this rulemaking. 
The analysis also assumes that movie theaters with auditoriums 
currently equipped to provide closed movie captioning and audio 
description would also operate and maintain this equipment in the 
absence of this rule. Therefore, these costs are not included in the 
Final RA's total costs estimation unless specifically noted.
2. Public Comments on the Initial Regulatory Assessment and Department 
Responses
    This section discusses comments on the Initial Regulatory 
Assessment dated July 11, 2014 (Initial RA), provided in support of the 
2014 NPRM. The Department received 436 comments during the 2014 NPRM 
comment period from a variety of stakeholders, including movie industry 
representatives, individuals with disabilities, advocacy groups 
representing individuals with disabilities, State and Federal entities, 
academic organizations, private companies, and other private 
individuals. Many of these comments directly addressed the assumptions, 
data, or methodology used in the Initial RA.
    The Guidance and Section-by-Section Analysis, Appendix F, infra, is 
the primary forum for substantive responses to the comments addressing 
the proposed regulation generally. A summary and discussion of comments 
as they relate to small entities can be found below in section VI.B.
General Comments Regarding the Initial RA's Cost Estimation
    The Department reviewed a number of comments suggesting that the 
Department underestimated the costs of complying with this rule. 
Commenters disagreed with a variety of cost estimates provided in the 
Initial RA. As a threshold matter, the Department agrees that in some 
instances, the estimates provided did not accurately capture a 
particular cost of compliance. For example, after reviewing the public 
comments, the Department determined that the staff training costs 
estimated in the Initial RA did not adequately capture the costs to 
comply with the operational requirements of the rule, and the equipment 
unit costs used in the Initial RA did not represent the most current 
market price of the available equipment. As a result, the Department 
has updated these estimates in response to the public comments 
received. However, the Department is confident that other estimates 
were reasonable and remain supported by the Department's independent 
research. In consideration of all comments, the Department has made 
adjustments where appropriate. The comments at issue and related 
comments are specifically addressed below.
Comments Regarding the Cost of Captioning and Audio Description 
Equipment
    In the Initial RA, the Department estimated the costs of compliance 
with

[[Page 87360]]

the proposed rule by estimating the number of hardware units and device 
units the average movie theater within each venue type \24\ would need 
in order to comply with the scoping requirements, which determine the 
number of captioning devices and audio description devices a movie 
theater is required to have and maintain. Because the proposed scoping 
for captioning devices was based on the number of seats within a movie 
theater, the Department estimated the average seat count across each 
venue type. The Department also estimated the average number of 
auditoriums across each venue type to estimate the number of audio 
description devices and hardware units needed. One commenter noted that 
the Department's estimates regarding the number of seats and 
auditoriums were too low, especially for single-auditorium and miniplex 
movie theaters. Because of this underestimation, the commenter believed 
that small movie theater establishments would be required to purchase 
many more captioning devices than the Department assumed in its cost 
analysis. Based on industry survey information provided by the National 
Association of Theater Owners (NATO) in its individual comment, the 
Department has updated the Final RA cost estimation to reflect new data 
regarding average auditorium counts across venue types. Data concerning 
average seat count is no longer relevant because the final rule's 
scoping for captioning devices is based on the number of auditoriums, 
rather than the number of seats, within a movie theater. See section 
3.3 of the Final RA for a more detailed discussion of the scoping 
requirements of this rulemaking and their impact on the Final RA.
---------------------------------------------------------------------------

    \24\ In the Initial RA, the Department used the term ``theater 
type'' to describe the movie industry's classification of movie 
theaters based on the number of auditoriums within a movie theater 
complex. In the Final RA, the Department has replaced ``theater 
type'' with ``venue type'' in order to avoid potential confusion 
with the classification of movie theaters based on projection system 
(i.e., digital vs. analog) and the distinction between indoor movie 
theaters and drive-in movie theaters. The Final RA divides movie 
theaters into four venue types: megaplex, multiplex, miniplex, and 
single-auditorium. See section 2.1.4 of the Final RA.
---------------------------------------------------------------------------

    The Department also received multiple comments concerning the unit 
costs for the hardware and individual devices as well as the 
Department's methodology regarding these estimates. NATO provided the 
most recent unit cost data for all captioning and audio description 
equipment currently available on the market, and the Department has 
updated its cost estimates in the Final RA to reflect this updated 
information. See section 3.4 of the Final RA for a more detailed 
discussion of the captioning and audio description unit costs and their 
impact on the Final RA.
    In the Initial RA, the Department estimated the upfront costs for 
the captioning and audio description equipment by averaging the 
hardware and device unit costs of some equipment available on the 
market. One commenter stated that the Department's methodology 
concerning the average hardware and device unit costs for captioning 
and audio description equipment was insufficient because it only 
averaged the costs of the less expensive equipment. According to the 
commenter, many movie theaters purchase the more expensive captioning 
glasses offered by Sony to satisfy audience demand, and as a result, 
the Initial RA substantially underestimated the cost of compliance by 
excluding the cost of Sony's equipment from the average cost estimates. 
A second commenter pointed out that the intent of the RA is to estimate 
the minimum cost of compliance, indicating that the Department's 
methodology and estimate regarding the upfront costs were reasonable.
    Executive Order 12866 requires the Department to estimate the costs 
that movie theaters will incur as a result of this rulemaking. 
Currently, there is more than one manufacturer of the equipment 
necessary to provide captioning and audio description, and the cost for 
the equipment varies among the manufacturers. The Department has not 
specified the manufacturer from which movie theaters must purchase the 
equipment, and movie theaters retain the discretion to purchase the 
equipment of their choice. As a result, the Department has included the 
cost for all available equipment, including the Sony equipment, in its 
estimate of the captioning and audio description equipment unit costs 
for miniplex, multiplex, and megaplex movie theaters. The Department 
has not added the cost of the Sony equipment to its estimate of 
hardware and device unit costs for single-auditorium movie theaters 
because the Department remains convinced that small movie theater 
establishments are highly unlikely to purchase the more expensive 
equipment. As the Department's independent research indicates, the less 
expensive cup holder captioning devices account for the largest 
percentage of the captioning device market share, and NATO advised the 
Department that few movie theaters outside of the top movie theater 
chains actually use Sony's captioning glasses. Therefore, while other 
large movie theater establishments may choose to use Sony's technology, 
the Department has excluded this equipment from its estimate of the 
upfront costs for single-auditorium movie theaters. See section 3.4 of 
the Final RA for a more detailed discussion of Sony equipment unit 
costs and their impact on the Final RA.
Comments Regarding Other Cost Estimates: Staff Training, Notice, 
Installation, Replacement, and Operation and Maintenance
    In addition to the comments addressing the captioning and audio 
description equipment cost estimates, the Department received a number 
of comments addressing other cost estimates provided in the Initial RA. 
These comments addressed the Department's estimate of staff training 
costs, notice costs, acquisition and installation costs, replacement 
costs, and operation and maintenance costs. Overall, commenters 
indicated that the Department either failed to include these costs in 
its estimates or that the Department's estimate for these costs was too 
low.
    The Department originally included staff training costs associated 
with the rule in its estimate of the annual operations and maintenance 
costs, but the Department sought public comment on the amount of 
additional time movie theaters would spend training their employees to 
operate the captioning and audio description devices and to assist 
patrons in their use. The Department received a single comment in 
response to this question. One movie theater anticipated that movie 
theaters would spend an additional 15 minutes on employee training to 
ensure that their staff was knowledgeable about the equipment and in 
compliance with the rule's operational requirements. In consideration 
of this comment, the Department has included a separate estimate for 
the staff training costs associated with the operational requirements 
of the final rule. The information provided by the movie theater 
commenter serves as the basis for the staff training costs estimate. 
See section 3.7 of the Final RA for a more detailed discussion of the 
data, research, and assumptions used to estimate staff training costs.
    The Department received only a few comments regarding its position 
that any cost associated with the notice requirement would be de 
minimis. One commenter argued that requiring notice in all places where 
movie times are listed would cost the industry millions of dollars 
annually because theaters would be required to invest in software

[[Page 87361]]

upgrades, the purchase of new signage on an ongoing basis, the purchase 
of digital display sets, and increased advertising space to accommodate 
more text. However, this commenter did not provide any information or 
data to support this position, and the only other commenter on this 
issue, a movie theater, agreed with the Department's conclusion that 
notice costs would be de minimis. According to this movie theater, the 
notice costs associated with the rule would be minimal for most 
exhibitors considering that the industry has largely separated itself 
from print advertising in favor of online advertising and adding icons 
for captioning and audio description would not be very difficult.
    Based on the Department's independent research and the comments 
received, the Department maintains its position that the costs 
associated with the notice requirement are de minimis. The notice 
requirement does not require a movie theater to implement a specific 
form of notice. Movie theaters routinely use ``CC'' and ``AD'' or 
``DV'' to indicate the availability of closed movie captioning and 
audio description in their communications currently, including on their 
Web sites and mobile apps, and the Department's research indicates that 
the inclusion of such symbols does not increase the cost of 
advertisements already placed or require software upgrades as one 
commenter indicated. For a more detailed discussion of those costs 
associated with this rulemaking that the Department has determined to 
be de minimis, see section 2.4.4.2 of the Final RA.
    The Department also disagrees with commenters who criticized the 
Department's failure to include accurate equipment unit costs and 
installation costs in the Initial RA. As the Department indicated in 
the Initial RA, the unit cost estimates for the available equipment 
included the cost to install the equipment, and these unit cost 
estimates were based on the most up-to-date data available to the 
Department during the development of the Initial RA. See section 4.6 of 
the Initial RA. The Department has updated the equipment unit cost 
estimates, now referred to as ``acquisition costs'' in the Final RA, to 
reflect the most recent data concerning the unit costs for all 
available hardware and devices. The Final RA also now calculates 
installation costs as a separate cost based on a movie theater's 
upfront costs. For a more detailed discussion of the data, research, 
and assumptions used to estimate the installation costs, see section 
3.5 of the Final RA.
    A couple of comments addressed the replacement costs estimated in 
the Initial RA, specifically the replacement costs of the individual 
devices. One commenter estimated that the useful life of the captioning 
devices is about 5 years. According to NATO, industry data indicates 
that between 2.5 percent and 15 percent of individual devices must be 
replaced annually. The Department has updated the estimate of 
individual device replacement costs to reflect the industry data 
provided by NATO. To incorporate the individual devices' estimated 4-
to-7-year useful life, the Department estimates that 20 percent of all 
captioning and audio description devices purchased as a result of this 
rulemaking will be replaced annually. For a more detailed discussion of 
the data, research, and assumptions used to estimate the replacement 
costs, see section 3.6 of the Final RA.
    Several commenters also argued that the Department's estimate 
regarding operation and maintenance costs was too low. According to 
these commenters, the maintenance costs include costs associated with 
replacement batteries, periodic system testing, and upgrading software, 
and because these costs are relative to the cost of the equipment, the 
Department should consider the high cost of the devices when estimating 
this cost. A few comments seemed to express confusion that the 
operations and maintenance cost estimate in the Initial RA encompassed 
the costs associated with installation, replacement, and staff 
training. The Department has considered these comments and has included 
separate cost estimates for the costs associated with installation, 
replacement, and staff training. However, the Department's independent 
research confirms that 3 percent of total equipment acquisition costs 
represents an accurate estimate of the annual operation and maintenance 
costs associated with this rule, especially now that installation, 
replacement, and staff training costs are estimated separately. The 
relevant cost category has been renamed ``maintenance and 
administrative costs'' in the Final RA. For a more detailed discussion 
of the data, research, and assumptions used to calculate the 
maintenance and administrative costs of this rule, see section 3.8 of 
the Final RA.
Comments Regarding the Benefits Estimate
    The Department discussed the qualitative benefits associated with 
this rule in the Initial RA. Without reliable information about the 
number of individuals who would go to the movies as a result of this 
rule or the number of captioned and audio-described screenings already 
shown, the Department determined that the benefits of the rule were 
difficult to quantify. Nonetheless, the Department determined that many 
individuals, both those with and without disabilities, would benefit as 
a result of the rule, and that such benefits justified any associated 
costs. Furthermore, the Department fully expected that the guarantee of 
access to movies screened at movie theaters for individuals with 
hearing or vision impairments would spur some level of new demand for 
movie attendance and therefore lead to increased box office receipts.
    A majority of commenters addressing the Department's benefit 
analysis recognized the difficulty in quantifying the benefits of the 
rule but agreed with the Department's conclusions concerning the direct 
and indirect beneficiaries that this rule would serve. Many comments 
focused on the number of individuals with hearing and vision 
disabilities, arguing that the U.S. Census vastly underestimates the 
number of individuals who are deaf or hard of hearing, or blind or have 
low vision. Commenters also stated that in addition to helping 
individuals who are deaf or hard of hearing, movie captioning has the 
potential to increase the access and enjoyment of movies for a wide 
variety of people, including individuals with cognitive-communication 
disorders, language-based learning disabilities, aphasia, central 
auditory processing disorders, or individuals who are learning English 
or may be working to improve their literacy skills. Organizations 
representing individuals with hearing and vision disabilities commented 
generally that captioning and audio description provide the keys to 
American culture to the extent that these services help individuals 
with hearing and vision disabilities to be more familiar with 
``everyday events,'' thus allowing them to be more socially integrated 
into society.
    One commenter, however, criticized the Department's benefit 
analysis. This commenter asserted that the Department failed to justify 
the rule with relevant, evidence-based research to demonstrate that the 
proposed rule would advance the intended benefits. The commenter 
further recommended that the Department conduct an industry-wide survey 
of movie theaters and individuals with hearing and vision disabilities 
to determine the number of individuals currently seeking captioning and 
audio description and their willingness to pay for such services.

[[Page 87362]]

    The Department maintains its position that the non-quantifiable 
benefits of this rule justify the costs of requiring captioning and 
audio description at movie theaters nationwide. The Department received 
a number of comments from individuals with hearing and vision 
disabilities, as well as advocacy groups, indicating that individuals 
with disabilities are currently seeking these accessibility services, 
but that these services are either consistently unavailable or 
insufficient to meet their needs. With the information received from 
such comments and the Department's independent research, the Department 
does not believe that conducting a nationwide survey is necessary to 
confirm that this rulemaking will advance the intended benefits. As 
section 1(c) of Executive Order 13563 highlights, agencies would be 
remiss to overlook the benefits ``that are difficult or impossible to 
quantify, including equity, human dignity, [and] fairness.'' With 
respect to such benefits, this rulemaking will not only ensure that 
individuals who are deaf or hard of hearing, or blind or have low 
vision, are afforded equal access to movie theaters across the country, 
but will also ensure that such individuals are afforded the opportunity 
to participate in the social experiences that accompany a new movie's 
release. As a result, the Department remains convinced that this 
rulemaking will significantly advance the achievement of the intended 
benefits, and that such benefits justify the costs associated with this 
rulemaking. See section V.A.4, infra, and chapter 5 of the Final RA for 
a more detailed discussion of the benefits of this rulemaking.
3. Costs--Summary of Likely Economic Impact
    This section presents the calculations used to estimate the total 
costs resulting from the amendments to the title III regulation, which 
require movie theaters to provide closed movie captioning and audio 
description when exhibiting digital movies equipped with such features. 
As previously mentioned, total costs to movie theaters subject to the 
rulemaking include the following components:
     Acquisition costs for captioning hardware;
     Acquisition costs for audio description hardware;
     Acquisition costs for captioning devices;
     Acquisition costs for audio description devices;
     Installation costs for captioning and audio description 
equipment;
     Replacement costs for captioning and audio description 
equipment;
     Staff training costs for the provision of captioning and 
audio description equipment; and
     Maintenance and administrative costs.
Key Assumptions
    Because movie theater complexes vary greatly by the number of 
auditoriums, and the overall cost of this rule varies in direct 
relation to the number of auditoriums exhibiting digital movies within 
a movie theater, the Final RA breaks the movie exhibition industry into 
four venue types based on size:
     Megaplex (16+ auditoriums);
     Multiplex (8-15 auditoriums);
     Miniplex (2-7 auditoriums); and
     Single-Auditorium movie theaters.
    Additionally, uncertainty exists regarding the extent to which 
movie theaters would offer closed movie captioning and audio 
description if the Department had not undertaken this rulemaking. 
Therefore, the Final RA estimates costs against three different 
baseline scenarios, which are described in greater detail in section 
3.2 of the Final RA. The primary analysis incorporates the Medium 
Accessibility baseline, which is based on data available in NATO's 2015 
Accessibility Survey. As shown in Table 1, under this baseline around 
72 percent of auditoriums operated in megaplex, multiplex, and miniplex 
theaters are assumed to be equipped to provide closed movie captioning. 
Similarly, approximately 71 percent of auditoriums in these movie 
theaters are assumed to be equipped to provide audio description. The 
analysis assumes that no single-auditorium movie theater is already 
equipped to provide closed movie captioning or audio description.

   Table 1--Medium Accessibility Baseline by Venue Type-Captioning and
                            Audio Description
------------------------------------------------------------------------
                                                               Audio
                                            Captioning      Description
               Venue type                     Medium          Medium
                                           Accessibility   Accessibility
                                            Baseline %      Baseline %
------------------------------------------------------------------------
Megaplex................................              72              71
Multiplex...............................              72              71
Miniplex................................              72              71
Single-Auditorium.......................               0               0
------------------------------------------------------------------------

    Section 2.1.3 and section 3.2 of the Final RA explain in detail the 
methodology and data that provide the basis for the Department's 
assumptions regarding the number of movie theater auditoriums currently 
equipped to provide closed movie captioning and audio description.
    The assumptions regarding the total number of auditoriums and the 
distribution of these auditoriums by venue type (megaplex, multiplex, 
miniplex, or single-auditorium) are further detailed in section 3.1 of 
the Final RA. Finally, section 3.1.3 of the Final RA describes the 
assumptions made in the analysis regarding the growth of auditoriums 
and venue types, and section 3.3 of the Final RA provides detailed 
assumptions and information regarding the scoping requirements by venue 
type.
Costs Determined To Be De Minimis
    The Department has determined that there are a few cost components 
associated with this rulemaking that are de minimis and therefore have 
not been estimated in the Final RA's total costs estimation. These 
include repair costs and costs to comply with the final rule's notice 
requirement. Repair costs are expected to be de minimis because 
manufacturers, movie theaters, and the Department's independent 
research indicate that repair of the captioning and audio description 
equipment is rare. If equipment breaks down, the answer is replacement 
rather than repair, and such costs are captured by the hardware and 
device replacement costs. Additionally, costs associated

[[Page 87363]]

with the cleaning or occasional maintenance of the devices are captured 
by the ongoing maintenance and administrative costs. Any additional 
repair costs for captioning and audio description equipment are thus 
expected to be de minimis.
    The Department has further determined that the costs associated 
with the notice requirement will be de minimis. Based on comments 
received and the Department's independent research, the movie 
exhibition industry has largely moved away from print advertising in 
favor of digital advertising, and as one commenter indicated, digital 
advertising allows movie theaters to add information concerning the 
availability of captioning and audio description without much 
difficulty. Currently, movie theaters routinely use ``CC'' and ``AD'' 
or ``DV'' to indicate the availability of closed movie captioning and 
audio description in their communications, and the Department's 
research indicates that the inclusion of such abbreviations does not 
increase the cost of advertisements. Therefore, the additional time and 
cost it will take a movie theater to add such information is 
negligible.
Upfront Costs
    The upfront costs of this rulemaking include the costs to acquire 
and install the necessary captioning and audio description equipment. 
Movie theaters incur the majority of the upfront costs during the first 
2 years of the analysis, as movie theaters with auditoriums currently 
exhibiting digital movies will purchase and install the necessary 
equipment throughout 2016 and 2017 in accordance with the 18-month 
compliance date. However, the cost estimation also includes the costs 
incurred by new auditoriums opening after the 18-month compliance date. 
As a result, equipment acquisition and installation costs are incurred 
over the entire 15-year analysis period in the primary analysis. Table 
2 shows the total equipment acquisition and installation costs incurred 
over the 15-year period of analysis by venue type. Overall, the upfront 
costs to movie theaters are expected to total $34.2 million when 
discounted at 7 percent.

                                 Table 2--Total Upfront Costs by Venue Type in Primary Analysis, Discounted at 7 Percent
                                                                      [$ Millions]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Captioning         Audio        Captioning
                                                             hardware        hardware         device       Audio device    Installation   Total  upfront
                       Venue type                           acquisition     acquisition     acquisition     acquisition        costs           costs
                                                               costs           costs           costs           costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Megaplex................................................            $5.0            $0.1            $4.8            $0.8            $0.3           $11.0
Multiplex...............................................             7.9             0.2             7.6             1.3             0.5            17.5
Miniplex................................................             0.9             0.0             2.0             0.2             0.1             3.3
Single-Auditorium.......................................             0.8             0.2             1.3             0.1             0.1             2.5
                                                         -----------------------------------------------------------------------------------------------
    Total...............................................            14.6             0.5            15.7             2.4             1.0            34.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Totals may differ due to rounding.

    Section 2.3 of the Final RA provides greater detail as to the 
Department's methodology and assumptions for estimating the upfront 
costs of this rulemaking. The data and research providing the basis for 
these estimates are presented in section 3.3 through section 3.5 of the 
Final RA.
Ongoing Costs
    In addition to the upfront costs, movie theaters will incur ongoing 
costs as a direct result of this rulemaking. The ongoing costs 
quantified in the cost estimation include captioning and audio 
description equipment replacement costs, staff training costs, and 
maintenance and administrative costs. Table 3 shows the total ongoing 
costs by venue type. Overall, the ongoing annual costs amount to $54.3 
million over the 15-year period of analysis when discounted at 7 
percent.

             Table 3--Total Ongoing Costs by Venue Type in Primary Analysis, Discounted at 7 Percent
                                                  [$ millions]
----------------------------------------------------------------------------------------------------------------
                                                                                    Maintenance
                                                    Replacement      Training           and       Total  ongoing
                   Venue type                          costs           costs      administrative       costs
                                                                                       costs
----------------------------------------------------------------------------------------------------------------
Megaplex........................................           $11.6            $3.5            $2.7           $17.8
Multiplex.......................................            18.4             5.6             4.3            28.2
Miniplex........................................             4.0             0.7             0.8             5.5
Single-Auditorium...............................             2.2             0.1             0.5             2.8
                                                 ---------------------------------------------------------------
    Total.......................................            36.1             9.9             8.2            54.3
----------------------------------------------------------------------------------------------------------------
* Totals may differ due to rounding.

    Replacement costs are expected to be $36.1 million over the 15-year 
period of analysis when discounted at 7 percent. Replacement costs 
include the costs to replace all equipment necessary to provide closed 
movie captioning and audio description, including the captioning and 
audio description devices as well as the captioning and audio 
description hardware. Table 4-6 of the Final RA shows the estimated 
replacement costs associated with each type of equipment. The data and 
assumptions used to estimate the replacement costs are discussed in 
greater detail in section 2.4.1 and section 3.6 of the Final RA.
    Staff training is expected to cost approximately $9.9 million over 
the 15-year period of analysis when discounted at 7 percent. The rule 
requires staff to

[[Page 87364]]

be available to provide patrons with captioning and audio description 
devices and to direct patrons on the devices' use. This requirement can 
most easily be met by expanding the already existing training for those 
employees who will be on-site to manage or oversee overall operations 
or the exhibition of the movies. Because the operational requirements 
of this rulemaking apply to all movie theaters subject to the 
rulemaking, including those with auditoriums that currently provide 
closed movie captioning and audio description, the Department has 
estimated the staff training costs for all movie theaters exhibiting 
digital movies. Section 2.4.2 and section 3.7 of the Final RA explain 
the data and assumptions used to estimate the staff training costs.
    Finally, maintenance and administrative costs are expected to be 
$8.2 million over the 15-year period of analysis when discounted at 7 
percent. These costs include, but are not limited to, the periodic 
ongoing maintenance, system testing, and cleaning of devices and other 
additional administrative costs. The data and assumptions used to 
estimate the maintenance and administrative costs are discussed in 
greater detail in section 2.4.3 and section 3.8 of the Final RA.
Total Costs
    The total costs in the primary analysis are calculated based on the 
data and assumptions presented in chapters 2 and 3 of the Final RA. As 
described in section 3.2.2 of the Final RA, the primary analysis 
incorporates the Medium Accessibility baseline, which is based on data 
available in NATO's 2015 Accessibility Survey. Table 4 below shows the 
total costs in the primary analysis by cost category. The total cost 
impact of the rulemaking over the 15-year period of analysis is $88.5 
million when discounted at 7 percent, and $113.4 million when 
discounted at 3 percent.

 Table 4--Total Costs by Cost Category in Primary Analysis Over 15 Years
                              [$ millions]
------------------------------------------------------------------------
                                           Primary           Primary
            Cost category               analysis  7%      analysis  3%
                                         discounted        discounted
------------------------------------------------------------------------
Captioning Hardware Acquisition                  $14.6             $17.2
 Costs..............................
Audio Hardware Acquisition Costs....               0.5               0.5
Captioning Device Acquisition Costs.              15.7              17.6
Audio Device Acquisition Costs......               2.4               2.8
Installation Costs..................               1.0               1.1
Replacement Costs...................              36.1              49.9
Training Costs......................               9.9              13.1
Maintenance and Administrative Costs               8.2              11.1
                                     -----------------------------------
    Total Costs.....................              88.5             113.4
------------------------------------------------------------------------
* Totals may differ due to rounding.

    The total costs are broken down by venue type in table 5. 
Auditoriums in multiplex movie theaters account for more than half of 
the total costs ($45.7 million) over the 15-year period of analysis, 
which is consistent with the fact that multiplex movie theaters operate 
approximately 52 percent of all auditoriums. The costs to single-
auditorium movie theaters over the 15-year period of analysis are 
approximately $5.3 million when discounted at 7 percent, and $6.3 
million when discounted at 3 percent. As detailed in section 3.2.3 of 
the Final RA, the primary analysis assumes that no single-auditorium 
movie theater is already equipped to provide closed movie captioning or 
audio description. As a result, it is assumed that all single-
auditorium movie theaters subject to this rulemaking would need to 
purchase the necessary captioning and audio description equipment.

  Table 5--Total Costs by Venue Type in Primary Analysis Over 15 Years
                              [$ millions]
------------------------------------------------------------------------
                                           Primary           Primary
             Venue type                 analysis  7%      analysis  3%
                                         discounted        discounted
------------------------------------------------------------------------
Megaplex (16+ auditoriums)..........             $28.7             $37.2
Multiplex (8-15 auditoriums)........              45.7              59.1
Miniplex (2-7 auditoriums)..........               8.8              10.8
Single-Auditorium...................               5.3               6.3
                                     -----------------------------------
    Total Costs.....................              88.5             113.4
------------------------------------------------------------------------
* Totals may differ due to rounding.

    In table 6 below, the annualized costs are presented by venue type 
using 7-percent and 3-percent discount rates. Overall, the annualized 
cost to the entire movie exhibition industry is $9.7 million when using 
a 7-percent discount rate, and $9.5 million when using a 3-percent 
discount rate.

[[Page 87365]]



       Table 6--Annualized Costs by Venue Type in Primary Analysis
                              [$ millions]
------------------------------------------------------------------------
                                            Annualized      Annualized
               Venue type                    costs 7%        costs 3%
                                            discounted      discounted
------------------------------------------------------------------------
Megaplex (16+ auditoriums)..............            $3.2            $3.1
Multiplex (8-15 auditoriums)............             5.0             5.0
Miniplex (2-7 auditoriums)..............             1.0             0.9
Single-Auditorium.......................             0.6             0.5
                                         -------------------------------
    Total...............................             9.7             9.5
------------------------------------------------------------------------
* Totals may differ due to rounding.

Sensitivity Analyses
    Sensitivity analysis is an essential consideration for policy 
makers in evaluating the rule due to the uncertainty associated with 
certain key variables used in the cost estimation. The Department was 
able to find robust data regarding the costs of purchasing captioning 
and audio description equipment, the number of auditoriums in the 
country, and several other critical variables. However, there are some 
input variables that carry uncertainty. No substantive comments with 
data on these inputs were received in the public comments on the 2014 
NPRM.
    The sensitivity analyses estimate the costs of this rulemaking when 
using the following inputs:
     Low Accessibility and High Accessibility baselines;
     Alternate Medium Accessibility baseline;
     Alternate captioning and audio description device 
replacement rates;
     Increased staff training frequency;
     Single-auditorium unit cost estimates including Sony's 
technology;
     Increased maintenance and administrative costs; and
     Zero growth after five years.
    Detailed information and data regarding these sensitivity analyses 
can be found in section 4.2 of the Final RA.
4. Benefits--Qualitative Discussion of Benefits
    The individuals who will directly benefit from this rule are those 
persons with hearing or vision disabilities who, as a result of this 
rule, would be able to attend movies with closed movie captioning or 
audio description in movie theaters across the country for the first 
time or on a more consistent basis. Individuals who will indirectly 
benefit from this rule are the family and friends of persons with 
hearing and vision disabilities that would be able to share the movie-
going experience more fully with their friends or loved ones with 
hearing and vision disabilities. Although the anticipated benefits of 
this rulemaking are difficult to quantify, the Department remains 
convinced that there are significant qualitative benefits of this 
rulemaking that justify this regulation at this time.
    The benefits of this rule are difficult to quantify because the 
Department has not been able to locate robust data on the rate at which 
persons with disabilities currently attend movies shown in movie 
theaters. Moreover, as a result of the increased accommodations 
required by this rule, it is reasonable to predict that some number of 
persons with disabilities will likely attend movies for the first time, 
some number of persons with disabilities will likely attend movies at a 
rate that is different than they had previously, the number of persons 
who attend movies as part of a larger group that includes a person with 
a disability will likely change, and the number of persons with 
disabilities who would have attended movies anyway but under the rule 
will have a fuller and more pleasant experience will likely also 
change. The Department has no feasible way of projecting those figures. 
In addition, the Department does not know how many people with hearing 
or vision disabilities currently have consistent access to movie 
theaters that provide closed movie captioning and audio description. 
Finally, the Department is not aware of any peer-reviewed academic or 
professional studies that monetize or quantify the societal benefit of 
providing closed movie captioning and audio description at movie 
theaters.
    Though the Department cannot confidently estimate the likely number 
of people who would directly benefit from this rule, it has reviewed 
data on the number of people with hearing or vision disabilities in the 
United States. The Census Bureau estimates that 3.3 percent of the U.S. 
population ages 15 and older has difficulty seeing, which translates 
into a little more than 8 million individuals in 2010, and a little 
more than 2 million of those had ``severe'' difficulty seeing. At the 
same time, the Census Bureau estimates that 3.1 percent of the U.S. 
population ages 15 and older have difficulty hearing, which was a 
little more than 7.5 million individuals in 2010, and approximately 1 
million of them had ``severe'' difficulty hearing. See U.S. Census 
Bureau, U.S. Department of Commerce, P70-131, Americans with 
Disabilities: 2010 Household Economic Studies at 8 (2012), available at 
http://www.census.gov/prod/2012pubs/p70-131.pdf (last visited Sept. 12, 
2016). While not all of these individuals would benefit from this rule, 
many of them will be direct beneficiaries, although they are likely to 
benefit from this rule in different ways and to varying extents. The 
type and extent of benefits can depend on personal circumstances and 
preferences, as well as proximity to movie theaters that otherwise 
would not offer captioning or audio description but for this rule. Some 
persons with vision and hearing disabilities have effectively been 
precluded from going to movies at movie theaters because the only 
theaters available to them do not offer closed movie captioning or 
audio description, offer open captioning but only at inconvenient times 
(such as the middle of the day during the week), or offer captioning or 
audio description for only a few films and not for every screening of 
those films. For these persons, the primary benefit will be the ability 
to see movies when released in movie theaters along with other movie 
patrons, which they otherwise would not have had the opportunity to do. 
They will have the value of that movie-going experience, as well as the 
opportunity to discuss the film socially at the same time as the rest 
of the movie-viewing public. A person with a hearing or vision 
disability who previously did not have access to a movie theater that 
provided closed movie captioning or audio description will experience 
this benefit to an extent that is different than the extent of the 
benefit experienced by a person with a hearing or vision disability who 
previously did have access to a movie

[[Page 87366]]

theater that consistently provided closed movie captioning and audio 
description. In addition, a person who cannot follow a movie at all 
without the assistance of closed movie captioning is likely to 
experience this benefit to an extent that is different than the extent 
of the benefit experienced by a person who can follow parts of a movie 
without the assistance of closed movie captioning.
    There is a social value in movie viewing for many people, not just 
an entertainment value. As noted previously, movies are a part of our 
shared cultural experience, and the subject of ``water cooler'' talk 
and lunchtime conversations. The Supreme Court observed over 60 years 
ago that motion pictures ``are a significant medium for the 
communication of ideas'' and ``may affect public attitudes and behavior 
in a variety of ways, ranging from direct espousal of a political or 
social doctrine to the subtle shaping of thought which characterizes 
all artistic expression. The importance of motion pictures as an organ 
of public opinion is not lessened by the fact that they are designed to 
entertain as well as to inform.'' Joseph Burstyn, Inc. v. Wilson, 343 
U.S. 495, 501 (1952) (footnote omitted). When individuals who are deaf 
or hard of hearing, or blind or have low vision, have the opportunity 
to attend movies that they can actually understand because of 
captioning or audio description, they are exposed to new ideas and gain 
knowledge that contributes to the development of their communication 
and literacy as well as their integration into society.
    As previously mentioned, some persons with vision or hearing 
disabilities may already have access to some movie theaters with 
captioning or audio description capabilities, but that access may be 
limited to only some locations and times. Some of these people may be 
patronizing movie theaters now but less often than they otherwise 
would, or less often than they would like, if captioning or audio 
description were available consistently across all theaters. These 
people may see more movies or save time that they currently must spend 
monitoring those few accessible movie theaters or showings and perhaps 
additional time coordinating trips to the movies with family and 
friends. If all movie theaters are accessible to those who are deaf or 
hard of hearing, or blind or have low vision, then some persons will 
now have greater choice among multiple locations and can make choices 
based on other criteria such as location, times, and other amenities, 
just as Americans without these disabilities already do.
    In addition to the direct beneficiaries of the rule discussed 
above, others may be indirect beneficiaries of this rule. Family and 
friends of persons with these disabilities who wish to go to the movies 
together as a shared social experience will now have greater 
opportunities to do so. More adults who visit elderly parents with 
hearing or sight limitations would presumably be able to take their 
parents on outings and enjoy a movie at a movie theater together, 
sharing the experience as they may have in the past. The Department 
received numerous comments from individuals who are deaf, hard of 
hearing, blind, or have low vision in response to its 2014 NPRM 
describing how they were unable to take part in the movie-going 
experience with their friends and family because of the unavailability 
of captioning or audio description. Parents with disabilities also 
complained that they could not answer their children's questions about 
a movie that they saw together because the parents did not understand 
what had happened in the movie.
    There is also a distributional benefit of this rule as some areas 
of the United States are more likely to have movie theaters with 
auditoriums that are already equipped to provide closed movie 
captioning and audio description than others. As noted previously, the 
Department understands that persons who live in communities served only 
by smaller, regional movie theater chains are far less likely to have 
access to captioned and audio-described movies than individuals with 
disabilities who live in California, Arizona, or any of the major 
cities with movie theaters operated by Regal, Cinemark, or AMC. Thus, 
it is possible that more urban areas, or certain cities or States, may 
have greater access than other areas, cities, or States, creating or 
exacerbating geographical differences in opportunities that will be 
equalized by this rulemaking.
    Moreover, while not formally quantified, the Department expects 
that this guarantee of access for individuals with hearing or vision 
impairments to movies screened at movie theaters will spur some level 
of new demand for movie attendance and, therefore, lead to increased 
box office receipts. Unfortunately, there is little data on the demand 
for movie-viewing in places of public accommodation by persons who are 
deaf or hard of hearing, or blind or have low vision, and as such, 
preparing estimates of the increase in movie theater attendance is 
difficult.
    Because the rule sets specific standards for equally effective 
communication at movie theaters, it should also lead to a decrease or 
near elimination of confusion regarding what accommodations movie 
theaters must provide. The current ADA title III regulation does not 
contain explicit requirements specifying how movie theaters should meet 
their effective communication obligations, and this is one of the 
reasons behind the multiple private lawsuits filed throughout the 
country. Setting explicit requirements at the national level will lead 
to harmonization across the country.
    And finally, there are additional benefits of the rule that relate 
to equity and fairness considerations generally. See E.O. 13563 Sec.  
1(c) (underscoring the importance of agency consideration of benefits 
``that are difficult or impossible to quantify, including equity, human 
dignity, [and] fairness''). The Department expects that the regulation 
will allow for better integration of persons with disabilities into the 
American social mainstream. Without captioning and audio description at 
movie theaters, individuals with hearing and vision disabilities 
commented that they were unable to participate in the social experience 
that attending the movies affords. Other commenters noted that movie 
theaters' common practice of ``relegating'' movie patrons with hearing 
and vision disabilities to ``special showings'' of captioned or audio-
described movies at off-peak days and times did not constitute the 
``full and equal access'' guaranteed by the ADA. By requiring all movie 
theaters to provide closed movie captioning and audio description when 
exhibiting a digital movie distributed with such features, the 
Department believes that the ADA's guarantees will be more fully met.
    The Department views the most significant benefits of the rule to 
be those relating to issues of fairness, equity, and equal access, all 
of which are extremely difficult to monetize, and the Department has 
not been able to robustly quantify and place a dollar value on those. 
Regardless, the Department believes that the non-quantifiable benefits 
justify the costs of requiring captioning and audio description at 
movie theaters nationwide.
5. Alternatives
    As required by Executive Order 12866, the Department considered 
various alternatives to this rule. Chapter 6 of the Final RA provides 
detailed information regarding these alternatives. Table 7 below 
summarizes the cost estimates for the primary analysis and other 
evaluated alternatives to the regulation.

[[Page 87367]]



      Table 7--Summary of Primary Analysis and Alternative Analyses Over 15 Years, Discounted at 7 Percent
                                                  [$ millions]
----------------------------------------------------------------------------------------------------------------
                                                      2-year          6-month                         Analog
          Cost category               Primary       compliance      compliance     NPRM scoping      theaters
                                     analysis          date            date         requirement      included
----------------------------------------------------------------------------------------------------------------
Captioning Hardware Acquisition            $14.6           $14.0           $15.5           $14.6           $17.3
 Costs..........................
Audio Hardware Acquisition Costs             0.5             0.4             0.5             0.5             0.6
Captioning Device Acquisition               15.7            15.1            16.6            36.1            15.7
 Costs..........................
Audio Device Acquisition Costs..             2.4             2.4             2.6             4.4             2.5
Installation Costs..............             1.0             1.0             1.1             1.7             1.1
Replacement Costs...............            36.1            34.5            39.0            73.8            37.0
Training Costs..................             9.9             9.9             9.9             9.9            10.0
Maintenance and Administrative               8.2             7.8             8.9            13.9             8.8
 Costs..........................
                                 -------------------------------------------------------------------------------
    Total Costs.................            88.5            85.2            94.1           154.8            93.1
----------------------------------------------------------------------------------------------------------------
* Totals may differ due to rounding.

B. Executive Order 13132: Federalism

    Executive Order 13132, 64 FR 43255 (Aug. 4, 1999), requires 
executive branch agencies to consider whether a rule will have 
federalism implications. That is, the rulemaking agency must determine 
whether the rule is likely to have substantial direct effects on State 
and local governments, a substantial direct effect on the relationship 
between the Federal government and the States and localities, or a 
substantial direct effect on the distribution of power and 
responsibilities among the different levels of government. If an agency 
believes that a rule is likely to have federalism implications, the 
agency must consult with State and local elected officials about how to 
minimize or eliminate the effects. This rule applies to public 
accommodations that exhibit movies for a fee that are covered by title 
III of the ADA. To the Department's knowledge there are no State or 
local laws that specifically address captioning and audio description. 
As a result, the Department has concluded that this rule does not have 
federalism implications.

C. Plain Language Instructions

    The Department makes every effort to promote clarity and 
transparency in its rulemaking. In any regulation, there is a tension 
between drafting language that is simple and straightforward and 
drafting language that adequately addresses legal issues to minimize 
uncertainty. The Department operates a toll-free ADA Information Line--
(800) 514-0301 (voice); (800) 514-0383 (TTY)--that the public is 
welcome to call to obtain assistance in understanding this rule.

D. Paperwork Reduction Act

    Under the Paperwork Reduction Act (PRA), agencies are prohibited 
from conducting or sponsoring a ``collection of information'' as 
defined by the PRA unless in advance the agency has obtained an OMB 
control number. 44 U.S.C. 3507. Additionally, an agency may not impose 
a penalty on persons for violating information collection requirements 
when an information collection required to have a current OMB control 
number does not have one. See id.
    This rule includes a requirement that movie theaters provide 
information to the public about which movies are available with closed 
movie captioning and audio description when publishing the exhibition 
times for those movies. See Sec.  36.303(g)(8). The Department has 
determined that this requirement qualifies as a collection of 
information subject to the PRA. Consistent with the PRA's requirements, 
the Department published a notice in the Federal Register on June 10, 
2016, requesting public comment on the potential costs and burdens of 
this requirement. See 81 FR 37643. The comment period for this notice 
closed on August 9, 2016, and the Department published a second notice 
in the Federal Register on August 30, 2016. See 81 FR 59657. The 30-day 
comment period for the second notice closed on September 29, 2016.
    The information collection requirement contained in this regulation 
was approved by OMB on November 3, 2016, and has been assigned OMB 
control number 1190-0019.

E. Unfunded Mandates Reform Act

    Section 4(2) of the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 
1503(2), excludes from coverage under that Act any proposed or final 
Federal regulation that ``establishes or enforces any statutory rights 
that prohibit discrimination on the basis of race, color, religion, 
sex, national origin, age, handicap, or disability.'' Accordingly, this 
rulemaking is not subject to the provisions of the Unfunded Mandates 
Reform Act.

F. Duplicative or Overlapping Federal Rules

    The Department is not aware of any existing Federal regulations 
that impose duplicative, overlapping, or conflicting requirements 
relative to the requirements in the final rule for movie captioning and 
audio description.

VI. Final Regulatory Flexibility Analysis

    As directed by the Regulatory Flexibility Act of 1980, as amended 
by the Small Business Regulatory Enforcement Fairness Act of 1996 
(SBREFA), and by Executive Order 13272, the Department is required to 
consider the potential impact of the proposed rule on small entities, 
including small businesses, small nonprofit organizations, and small 
governmental jurisdictions. This process helps agencies to determine 
whether a rule is likely to impose a significant economic impact on a 
substantial number of small entities and, in turn, to consider 
regulatory alternatives to reduce that regulatory burden on those small 
entities.
    This final rule applies to and affects almost all small entities 
categorized as ``Motion Picture Theaters.'' Small businesses constitute 
the vast majority of firms in the movie exhibition industry. The 
current size standard for a small movie theater business is $38.5 
million dollars in annual revenue. See U.S. Small Business 
Administration, Table of Small Business Size Standards Matched to North 
American Industry Classification System Codes at 28 (July 14, 2014), 
available at https://www.sba.gov/sites/default/files/files/Size_Standards_Table.pdf (last visited Sept. 12, 2016). In 2012, the 
latest year for which detailed breakouts by industry and annual revenue 
are

[[Page 87368]]

available, approximately 98 percent of movie theater firms met the 
standard for small business, and these firms managed approximately 52 
percent of movie theater establishments. See U.S. Census Bureau, 
Statistics of U.S. Businesses, available at https://www.census.gov/data/tables/2012/econ/susb/2012-susb-annual.html (see Data by 
Enterprise Receipt Size, U.S., 6-digit NAICS) (last visited Sept. 12, 
2016). The Department's analysis leads it to conclude that a 
substantial number of small movie theater firms will experience a 
significant economic impact as a result of this rule. The Department 
therefore presents this Final Regulatory Flexibility Analysis (FRFA). 
The Department has used this analysis to examine other ways, if 
possible, to accomplish the Department's goals with fewer burdens on 
small businesses, and the Department has made a number of revisions to 
the final rule to reduce the cost impact on small firms in the movie 
exhibition industry.

A. Purpose and Objective of the Final Rule Relative to Movie Theaters 
Categorized as Small

    As previously discussed throughout this rule, the Department's 
existing regulation implementing the ADA's title III auxiliary aids 
provision reiterates the obligation of covered entities to ensure 
equally effective communication with individuals with disabilities and 
identifies, among other things, ``open and closed captioning,'' and 
``audio recordings'' as examples of auxiliary aids and services. 28 CFR 
36.303(a)-(c). Recent technological changes in the movie exhibition 
industry--including widespread conversion from analog film projection 
to digital cinema systems--make exhibition of captioned and audio-
described movies easier and less costly than before. In addition, it is 
the Department's understanding that, at this time, nearly all first-run 
motion pictures released by the major domestic movie studios include 
closed movie captioning (and to a lesser extent, audio description).
    Despite these technological advances, movie theaters do not 
consistently show movies with captioning or audio description, and the 
availability of these features varies greatly across the country, with 
small movie theaters in rural areas being less likely to provide them. 
Thus, patrons who are deaf or hard of hearing, or blind or have low 
vision, are often shut out from the movie-going experience and cannot 
fully take part in movie-going outings with family and friends, join in 
social conversations about recent movie releases, or otherwise 
participate in a meaningful way in an important aspect of American 
culture.
    The Department believes that regulation is warranted at this time 
to explicitly require all movie theaters, including those qualifying as 
small entities, to exhibit movies with closed movie captioning and 
audio description whenever these theaters exhibit digital movies 
produced, distributed, or otherwise made available with such features 
unless to do so would result in an undue burden or a fundamental 
alteration. As discussed above, the Department is deferring rulemaking 
on application of these requirements to movie theater auditoriums that 
exhibit analog movies exclusively. The final rule for movie captioning 
and audio description rests on the existing obligation of all title 
III-covered facilities, such as movie theaters--regardless of size--to 
ensure that persons with disabilities receive ``full and equal 
enjoyment'' of their respective goods and services, including, as 
needed, the provision of auxiliary aids and services for persons who 
are deaf or hard of hearing, or blind or have low vision. The final 
rule imposes no independent obligation on movie theaters to provide 
captioning and audio description if the movie is not already available 
with these features.
    The Department expects that implementation of the final rule will 
lead to consistent levels of accessibility in movie theaters across the 
country, and that patrons who are deaf or hard of hearing, or blind or 
have low vision, will be able to use captioning or audio description 
equipment to better understand movies being exhibited in all movie 
theaters.

B. Public Comments Regarding the Effects of the Rule on Small Movie 
Theaters

    The Department received 436 comments during the 2014 NPRM comment 
period from movie industry representatives, individuals with 
disabilities, advocacy groups representing individuals with 
disabilities, State and Federal entities, academic organizations, 
private companies, and other private individuals. Comments that 
directly addressed the assumptions, data, or methodology used in the 
Initial RA have been previously discussed above in section V.A.2 and in 
section 1.3 of the Final RA. This section summarizes the discussion of 
comments regarding the effects of the rule on small movie theaters.
Proportion of Movie Theaters Qualifying as Small Entities
    The Department received comments indicating that the vast majority 
of movie theaters qualify as small entities, which is supported by the 
2012 Statistics of U.S. Businesses (SUSB) data and detailed below. See 
infra section VI.C.
Small Movie Theater Revenues and Available Resources To Comply
    One commenter reported that at least one segment of the movie 
exhibition industry, art house cinemas, generally receive less than 50 
percent of their revenue from ticket sales. Another commenter asked the 
Department to consider that almost half of movie theater gross receipts 
are paid directly to movie studios. Given these percentages and the 
fact that the movie exhibition industry as a whole averages a 2 percent 
profit margin, with small and independent theater owners often 
operating at an even smaller or negative profit margin, commenters 
asked the Department to reconsider its interpretation of cost values 
relative to annual revenue because these figures do not directly 
represent funds that are available to comply with this rule.
    The Department does not have access to publicly available data that 
provides a consistent, independent source of movie theater profit by 
revenue category. As discussed in section VI.C below, available data 
includes firm receipt size from the 2012 SUSB.\25\ The Department 
believes that this dataset is the most relevant publicly available data 
on annual revenue figures for the movie exhibition industry and is the 
best source to assess the resources available to movie theaters to 
comply with the rule.
---------------------------------------------------------------------------

    \25\ U.S. Census Bureau, Statistics of U.S. Businesses, 
available at https://www.census.gov/data/tables/2012/econ/susb/2012-susb-annual.html (see Data by Enterprise Receipt Size, U.S., 6-digit 
NAICS) (last visited Sept. 12, 2016). The information is available 
in an Excel file which lists all information by NAICS Code. The 
relevant NAICS Code for Motion Picture Theaters (except Drive-Ins) 
is 512131.
---------------------------------------------------------------------------

Alternatives To Reduce Burdens on Small Movie Theaters
    Commenters made various suggestions concerning alternatives to 
reduce the regulatory burden for small movie theaters. These 
suggestions pertained to the following areas: (1) The scoping for 
devices; (2) the compliance date; (3) the deferral of rulemaking for 
movie theaters exhibiting movies in analog format; and (4) the deferral 
of rulemaking for a subset of small movie theaters. The Department is 
aware of

[[Page 87369]]

potential limitations to compliance for small movie theaters and has 
taken measures to lessen the impact on those firms. As explained in 
sections 1.4 and 6.1 of the Final RA and in section VI.F below, the 
Department has decided to defer the decision whether to engage in 
rulemaking with respect to movie theater auditoriums that exhibit 
analog movies exclusively, to reduce the scoping requirements for both 
captioning and audio description devices, and to increase the time 
movie theaters have to comply with the rule's captioning and audio 
description scoping requirements (now 18 months). These revisions are 
expected to reduce the cost impact to small firms in the movie 
exhibition industry.
Response to Comments From the Small Business Administration Office of 
Advocacy (SBA)
    This section specifically addresses comments of the SBA Office of 
Advocacy in response to the proposed rule. Most of the concerns 
expressed by SBA were also expressed by other commenters.
    SBA's comments on the 2014 NPRM focused on the following five 
issues: Lowering the scoping for captioning and audio description 
devices; deferral of coverage of analog theaters; providing a longer 
compliance date for the requirements of the rule; the breadth of the 
definition of ``movie theater''; and the application of the undue 
burden defense for small business movie theaters. After consideration 
of these comments and related comments from other commenters, the 
Department has made a number of changes in the final rule.
    First, the Department has significantly lowered the scoping 
requirements for captioning and audio description devices in response 
to comments from SBA and other commenters that the Department should 
not have used seat count as a means of determining the number of 
devices that would actually be needed to meet demand from people with 
hearing and vision disabilities. The revised scoping bases the required 
number of devices on the number of auditoriums in a theater showing 
digital movies rather than the number of seats.
    Second, the Department has decided to defer the decision whether to 
apply the specific requirements of this rule to movie theater 
auditoriums that show analog movies exclusively. As discussed in the 
section-by-section analysis, the number of movie theaters that only 
show analog movies is rapidly declining, and it is unclear whether 
these theaters will be economically viable in the future, or whether 
analog movies will even be available for commercial showings.
    Third, the Department has extended the compliance date for all 
movie theaters subject to this rulemaking. Movie theaters now have 18 
months to comply with the rule's scoping requirements, and additional 
time is afforded to movie theaters that convert auditoriums from an 
analog projection system to a digital projection system after the 
compliance date of the rule. After considering the comments on the 2014 
NPRM, the Department has concluded that 18 months allows movie theaters 
sufficient time to order and install the necessary equipment while 
accounting for potential manufacturer backlogs or the need to raise the 
necessary funds to purchase the equipment.
    Fourth, SBA specifically asked whether the definition of ``movie 
theater'' was intended to encompass small movie theaters that 
occasionally show digital movies using a Blu-ray projector, pop-ups and 
film festivals, or limited arrangement showings held at alternative 
venues. The Department believes that in most instances, the 
requirements of the rule will not apply in these circumstances. As the 
definition indicates, a ``movie theater,'' for purposes of this 
rulemaking, means ``a facility * * * that contains one or more 
auditoriums that are used primarily for the purpose of showing movies 
to the public for a fee.'' Sec.  36.303(g)(1)(vii). Thus, an auditorium 
generally used for other purposes that temporarily shows movies during 
a film festival, even if a fee is charged, would not fall within this 
definition. By contrast, a movie theater that primarily shows digital 
movies to the public for a fee remains covered by the requirements of 
paragraph (g) even if it allows its auditoriums to be used for an 
annual film festival. Theaters with analog auditoriums that are not 
otherwise covered by the specific requirements of Sec.  36.303(g) and 
temporarily bring in portable Blu-ray or other types of digital 
projectors to show digital movies are also not likely to fall within 
the requirements of paragraph (g) because the compliance date provision 
assumes conversion of the theater to a digital projection system. In 
addition, it is the Department's understanding that Blu-ray projection 
systems are not capable of delivering closed movie captions to patrons 
at their seat; these systems only have the capacity to show captions on 
the screen, something not required by this rule.
    The Department notes that film festivals, pop-up movie theaters, 
and other alternative venues for showing movies still qualify as places 
of entertainment and are considered public accommodations under the 
ADA. Thus, they continue to be subject to the longstanding general ADA 
requirement to provide effective communication under Sec.  36.303, 
unless doing so would be a fundamental alteration of the program or 
service or would constitute an undue burden. In addition, if a festival 
or limited showing programmer schedules the screening of a movie that 
is already distributed with closed movie captions and audio description 
using a movie theater auditorium that is subject to the requirements in 
paragraph (g) as discussed above, then the effective communication 
obligation would require the festival to ensure that the accessible 
features are available at all scheduled screenings of a movie 
distributed with such features.
    Finally, SBA asked that the Department provide additional guidance 
for small businesses regarding the availability of the undue burden 
limitation. Under the ADA, a public accommodation is relieved of its 
obligation to provide a particular auxiliary aid (but not all auxiliary 
aids) if to do so would result in an undue burden or a fundamental 
alteration. As stated earlier in the preamble and in existing technical 
assistance materials, the Department's title III regulation 
specifically defines undue burden as ``significant difficulty or 
expense'' and, emphasizing the flexible and individualized nature of 
any such determination, lists five factors that must be considered when 
determining whether an action would constitute an undue burden. 28 CFR 
36.104; see also U.S. Department of Justice, ADA Title III Technical 
Assistance Manual Covering Public Accommodations and Commercial 
Facilities III-4.3600 (1993), available at http://www.ada.gov/taman3.html. These factors include: (1) The nature and cost of the 
action; (2) the overall financial resources of the site or sites 
involved in the action; the number of persons employed at the site; the 
effect on expenses and resources; legitimate safety requirements that 
are necessary for safe operation, including crime prevention measures; 
or the impact otherwise of the action upon the operation of the site; 
(3) the geographic separateness, and the administrative or fiscal 
relationship of the site or sites in question, to any parent 
corporation or entity; (4) if applicable, the overall financial 
resources of any parent corporation or entity; the overall size of the 
parent corporation or entity with respect to the number of its 
employees; and the number, type, and location of its

[[Page 87370]]

facilities; and (5) if applicable, the type of operation or operations 
of any parent corporation or entity, including the composition, 
structure, and functions of the workforce of the parent corporation or 
entity. 28 CFR 36.104. This limitation entails a fact-specific 
examination of the cost of a specific action and the specific 
circumstances of a particular public accommodation. This limitation is 
also designed to ensure that the needs of small businesses, as well as 
large businesses, are addressed and protected.
    The Department intends to publish technical assistance that will 
address the requirements of the final rule and the limitations on the 
obligations under paragraph (g) prior to the time the rule takes 
effect. In addition, the Department's wide-ranging outreach, education, 
and technical assistance program continue to be available to assist 
businesses to understand their obligations under the ADA. Additional 
information about the ADA's requirements, including the requirement to 
provide effective communication and the limitations on that obligation, 
is also available on the Department's ADA Web site at www.ada.gov.

C. Characteristics of Impacted Small Entities

    The Regulatory Flexibility Act defines a ``small entity'' as a 
small business (as defined by the SBA Size Standards) or a small 
organization such as a nonprofit that is ``independently owned and 
operated'' and is ``not dominant in its field.'' See 5 U.S.C. 601(3), 
(4). For Motion Picture Theaters (except Drive-Ins) (NAICS Code 
512131), the SBA Size Standards categorize any firm with less than 
$38.5 million in annual revenue as a small business.\26\ As a result, 
small entities constitute the vast majority of firms in the movie 
exhibition industry. The latest data providing detailed breakouts of 
annual revenue by industry comes from the 2012 Statistics of U.S. 
Businesses (SUSB).\27\ This dataset provides information regarding the 
number of firms,\28\ establishments,\29\ and estimated annual receipts 
\30\ (annual revenue) for each of the 17 revenue size categories in the 
movie exhibition industry. According to this data, 12 of the 17 revenue 
size categories contain firms with estimated annual receipts of less 
than the $38.5 million SBA size standard for a small business in this 
industry. Because these firms are considered small businesses by the 
SBA size standards, they are also considered small entities for 
purposes of this FRFA. An additional category of firms with annual 
receipts between $35 million and $40 million contains firms that may or 
may not have annual revenue below the $38.5 million threshold. For the 
purposes of this analysis, however, all firms in this category are 
assumed to have revenues lower than the $38.5 million size standard and 
are therefore considered to be small entities.
---------------------------------------------------------------------------

    \26\ U.S. Small Business Administration, Table of Small Business 
Size Standards Matched to North American Industry Classification 
System Codes at 28 (July 14, 2014), available at https://www.sba.gov/sites/default/files/files/Size_Standards_Table.pdf (last 
visited Sept. 12, 2016).
    \27\ The SBA's Office of Advocacy partially funds the Census 
Bureau to produce data on employer firm size including the number of 
firms, number of establishments, employment, and annual payroll and 
annual sales/receipts/revenue for employment size of firm categories 
by location and industry as part of the SUSB program. See U.S. 
Census Bureau, Statistics of U.S. Businesses, available at https://www.census.gov/data/tables/2012/econ/susb/2012-susb-annual.html (see 
Data by Enterprise Receipt Size, U.S., 6-digit NAICS) (last visited 
Sept. 12, 2016). The information is available in an Excel file which 
lists all information by NAICS Code.
    \28\ The U.S. Census Bureau defines a ``firm'' as a ``business 
organization consisting of one or more domestic establishments in 
the same state and industry that were specified under common 
ownership or control. The firm and the establishment are the same 
for single-establishment firms. For each multi-establishment firm, 
establishments in the same industry within a state will be counted 
as one firm--the firm employment and annual payroll are summed from 
the associated establishments.'' U.S. Census Bureau, Statistics of 
U.S. Businesses: Glossary, available at https://www.census.gov/programs-surveys/susb/about/glossary.html (last visited Sept. 12, 
2016).
    \29\ The U.S. Census Bureau defines an ``establishment'' as ``a 
single physical location where business is conducted or where 
services or industrial operations are performed.'' U.S. Census 
Bureau, North American Industry Classification System: Frequently 
Asked Questions (FAQs), available at http://www.census.gov/eos/www/naics/faqs/faqs.html#q2 (last visited Sept. 12, 2016).
    \30\ ``Receipts (net of taxes collected from customers or 
clients) are defined as operating revenue for goods produced or 
distributed, or for services provided. Receipts excludes local, 
state, and federal sales and other taxes collected from customers or 
clients and paid directly to a tax agency. Receipts are acquired 
from economic census data for establishments in industries that are 
in-scope to the economic census; receipts are acquired from IRS tax 
data for single-establishment businesses in industries that are out-
of-scope to the economic census; and payroll-to-receipts ratios are 
used to estimate receipts for multi-establishment businesses in 
industries that are out-of-scope to the economic census. Statistics 
of U.S. Businesses tabulations provide summed establishment receipts 
which creates some duplication of receipts for large multi-
establishment enterprises. Receipts data are available for years 
ending in 2 and 7 only.'' U.S. Census Bureau, Statistics of U.S. 
Businesses: Glossary, available at https://www.census.gov/programs-surveys/susb/about/glossary.html (last visited Sept. 12, 2016).
---------------------------------------------------------------------------

    The 2012 SUSB data on the movie exhibition industry includes both 
digital and analog movie theaters but excludes drive-in movie theaters. 
The number and percentage of firms and establishments by revenue 
category is presented in table 8. According to the 2012 SUSB, 1,876 
movie theater firms operated 4,540 movie theater establishments. 
Approximately 1,833 of those firms (98 percent) are categorized as a 
small business according to the SBA size standard ($38.5 million) and 
therefore are small entities for purposes of this FRFA. The 1,833 firms 
categorized as small entities operated approximately 2,381 movie 
theater establishments (52 percent of the total).

          Table 8--Motion Picture Theaters (Except Drive-Ins) Firms and Establishments by Revenue Category, 2012 Statistics of U.S. Businesses
                                                                     [NAICS 512131]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                           Percentage of    Cumulative
                                                             Number of     Percentage of    Cumulative       Number of         total         total of
                Firms with annual revenue                      firms        total firms   total of firms  establishments  establishments  establishments
                                                                                (%)             (%)                             (%)             (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Less than $100,000......................................             244            13.0            13.0             246             5.4             5.4
$100,000 to $499,999....................................             618            32.9            45.9             630            13.9            19.3
$500,000 to $999,999....................................             332            17.7            63.6             353             7.8            27.1
$1,000,000 to $2,499,999................................             399            21.3            84.9             460            10.1            37.2
$2,500,000 to $4,999,999................................             125             6.7            91.6             189             4.2            41.4
$5,000,000 to $7,499,999................................              35             1.9            93.4              66             1.5            42.8
$7,500,000 to $9,999,999................................              19             1.0            94.5              49             1.1            43.9
$10,000,000 to $14,999,999..............................              26             1.4            95.8             107             2.4            46.3
$15,000,000 to $19,999,999..............................               9             0.5            96.3              41             0.9            47.2
$20,000,000 to $24,999,999..............................              10             0.5            96.9              60             1.3            48.5

[[Page 87371]]

 
$25,000,000 to $29,999,999..............................               6             0.3            97.2              66             1.5            49.9
$30,000,000 to $34,999,999..............................               4             0.2            97.4              66             1.5            51.4
$35,000,000 to $39,999,999..............................               6             0.3            97.7              48             1.1            52.4
$40,000,000 and greater *...............................              43             2.3           100.0           2,159            47.6           100.0
                                                         -----------------------------------------------------------------------------------------------
    Total Firms (Less than $40,000,000).................           1,833              98  ..............           2,381              52  ..............
                                                         -----------------------------------------------------------------------------------------------
    Total Firms.........................................           1,876  ..............  ..............           4,540  ..............  ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------
* This category sums the firms and establishments included in the following categories: $40,000,000 to $49,999,999; $50,000,000 to $74,999,999;
  $75,000,000 to $99,999,999; $100,000,000 and greater.

    Table 9 presents the number of firms, the number of establishments, 
and the annual revenue of firms by revenue size category. The 
calculated average annual revenue per firm and the average annual 
revenue per establishment are also provided.

     Table 9--Motion Picture Theaters (Except Drive-Ins) Firms and Establishments, Annual Revenue by Revenue
                                  Category, 2012 Statistics of U.S. Businesses
                                                 [NAICS 512131]
----------------------------------------------------------------------------------------------------------------
                                                                                                  Annual revenue
                                     Number of       Number of    Annual revenue  Annual revenue        per
    Firms with annual revenue          firms      establishments   for all firms    per firm *     establishment
                                                                   ($ millions)                          *
----------------------------------------------------------------------------------------------------------------
Less than $100,000..............             244             246           $13.3         $54,508         $54,065
$100,000 to $499,999............             618             630           158.5         256,537         251,651
$500,000 to $999,999............             332             353           237.3         714,762         672,241
$1,000,000 to $2,499,999........             399             460           615.4       1,542,318       1,337,793
$2,500,000 to $4,999,999........             125             189           424.4       3,394,864       2,245,280
$5,000,000 to $7,499,999........              35              66           192.4       5,497,029       2,915,091
$7,500,000 to $9,999,999........              19              49           146.2       7,697,211       2,984,633
$10,000,000 to $14,999,999......              26             107           312.3      12,013,115       2,919,075
$15,000,000 to $19,999,999......               9              41           127.8      14,200,444       3,117,171
$20,000,000 to $24,999,999......              10              60           143.1      14,314,600       2,385,767
$25,000,000 to $29,999,999......               6              66           136.4      22,734,000       2,066,727
$30,000,000 to $34,999,999......               4              66          ** n/a          ** n/a          ** n/a
$35,000,000 to $39,999,999......               6              48           165.1      27,514,000       3,439,250
$40,000,000 and greater.........              43           2,159          10,520     244,639,651       4,872,397
----------------------------------------------------------------------------------------------------------------
* Calculated.
** Annual revenue data withheld and value set to 0 to avoid disclosing information of individual businesses.

D. Costs to Impacted Small Entities

    Annual revenue data from the SUSB program is used, together with 
information regarding likely per-theater upfront and ongoing annual 
costs (section 4.1.4 of the Final RA), to estimate the impact of this 
rulemaking on small entities relative to their resources. As described 
in section 2.1.4 of the Final RA, movie theater complexes vary greatly 
by the number of auditoriums that they contain, and the per-theater 
cost varies according to the number of auditoriums within a theater 
exhibiting digital movies. Therefore, the Final RA breaks the movie 
exhibition industry into four venue types based on size:
     Megaplex (16+ auditoriums);
     Multiplex (8-15 auditoriums);
     Miniplex (2-7 auditoriums); and
     Single-Auditorium movie theaters.
    The FRFA uses the estimated number of movie theaters by venue type 
to determine the cost impact per firm. Table 10 presents estimates of 
the percentage of movie theaters by venue type, calculated from the 
2015 distribution of auditoriums by venue type (table 3-3 of the Final 
RA) and the average number of auditoriums per venue type.\31\ The table 
indicates that approximately 40 percent of movie theater establishments 
are multiplex theaters, and 43 percent are either miniplex (22 percent) 
or single-auditorium theaters (21 percent), with the remaining 17 
percent being megaplex theaters.
---------------------------------------------------------------------------

    \31\ See NATO, Statement of Position on RIN 1190-AA63, CRT 
Docket No. 126, Nondiscrimination on the Basis of Disability by 
Public Accommodations--Movie Theaters; Movie Captioning and Audio 
Description 22, available at http://www.regulations.gov/contentStreamer?documentId=DOJ-CRT-2014-0004-0401&attachmentNumber=4&disposition=attachment&contentType=pdf (last 
visited Sept. 12, 2016).

[[Page 87372]]



                           Table 10--Estimated Number of Movie Theaters by Venue Type
                                                     [2015]
----------------------------------------------------------------------------------------------------------------
                                           Number of                                 Estimated
                                          auditoriums        Average number          number of     Percentage of
              Venue type                  exhibiting     /   of auditoriums   =   movie theaters  movie theaters
                                        digital movies        by venue type        by venue type   by venue type
                                            (2015)                                    (2015)          (2015)
----------------------------------------------------------------------------------------------------------------
Megaplex..............................          12,812   /               18   =              712              17
Multiplex.............................          20,322   /               12   =            1,693              40
Miniplex..............................           4,666   /                5   =              933              22
Single-Auditorium.....................             889   /                1   =              889              21
                                       -------------------------------------------------------------------------
    Total.............................          38,688   /   ..............   =            4,227             100
----------------------------------------------------------------------------------------------------------------

    As previously discussed, movie theaters, including small movie 
theaters, will incur upfront costs as well as ongoing costs to comply 
with the requirements of this rulemaking. Table 11 below presents the 
undiscounted upfront costs incurred by the average movie theater within 
each venue type.

                            Table 11--Average per Movie Theater Upfront Costs by Venue Type in Primary Analysis, Undiscounted
                                                                           [$]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Audio                           Audio
                                                            Captioning      description     Captioning      description    Installation    Total upfront
                       Venue type                            hardware        hardware         device          device           costs           costs
                                                            acquisition     acquisition     acquisition     acquisition
--------------------------------------------------------------------------------------------------------------------------------------------------------
Megaplex................................................         $16,158            $205          $8,728          $1,470            $797         $27,358
Multiplex...............................................          10,772             205           5,819             980             533          18,309
Miniplex................................................           4,488             205           4,364             490             286           9,834
Single-Auditorium.......................................           1,097             308           1,864             190             104           3,562
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Totals may differ due to rounding.

    Because movie theaters will incur the highest costs to acquire the 
necessary equipment, tables 12 through 19 provide the data used to 
estimate these costs. Table 12 presents the average number of 
auditoriums by venue type and estimates the relevant number of 
captioning hardware units required by the scoping requirements using 
the one-unit-per-auditorium assumption discussed in section 3.3.1 of 
the Final RA. The average number of auditoriums across each venue type 
was provided by NATO in its public comment on the 2014 NPRM.

    Table 12--Captioning Hardware Scoping Requirement per Venue Type
------------------------------------------------------------------------
                                                            Captioning
                                              Average     hardware units
               Venue type                    number of     required per
                                            auditoriums     venue type
------------------------------------------------------------------------
Megaplex (16+ auditoriums)..............              18              18
Multiplex (8-15 auditoriums)............              12              12
Miniplex (2-7 auditoriums)..............               5               5
Single-Auditorium.......................               1               1
------------------------------------------------------------------------

    Similarly, table 13 presents the average number of auditoriums by 
venue type and estimates the relevant number of audio description 
hardware units required by the scoping requirements using the one-unit-
per-movie-theater assumption discussed in section 3.3.2 of the Final 
RA. The average number of auditoriums across each venue type was 
provided by NATO in its public comment on the 2014 NPRM.

Table 13--Audio Description Hardware Scoping Requirements per Venue Type
------------------------------------------------------------------------
                                                               Audio
                                                            description
               Venue type                 Average number  hardware units
                                          of auditoriums   required per
                                                            venue type
------------------------------------------------------------------------
Megaplex (16+ auditoriums)..............              18               1
Multiplex (8-15 auditoriums)............              12               1
Miniplex (2-7 auditoriums)..............               5               1

[[Page 87373]]

 
Single-Auditorium.......................               1               1
------------------------------------------------------------------------

    Tables 14 and 15 below estimate the minimum number of captioning 
devices required per venue type. The Department emphasizes that these 
figures are merely estimates based on the average number of auditoriums 
across each venue type. The exact number of captioning and audio 
description devices required at a particular movie theater 
establishment depends on the number of auditoriums showing digital 
movies.

     Table 14--Captioning Device Scoping Requirements per Venue Type
                               [Estimated]
------------------------------------------------------------------------
                                                          Minimum number
                                                           of captioning
                       Venue type                             devices
                                                           required per
                                                            venue type
------------------------------------------------------------------------
Megaplex (16+ auditoriums)..............................              12
Multiplex (8-15 auditoriums)............................               8
Miniplex (2-7 auditoriums)..............................               6
Single-Auditorium.......................................               4
------------------------------------------------------------------------


 Table 15--Audio Description Device Scoping Requirements per Venue Type
                               [Estimated]
------------------------------------------------------------------------
                                                              Minimum
                                                             number of
                                                               audio
               Venue type                 Average number    description
                                          of auditoriums      devices
                                                           required per
                                                            venue type
------------------------------------------------------------------------
Megaplex (16+ auditoriums)..............              18               9
Multiplex (8-15 auditoriums)............              12               6
Miniplex (2-7 auditoriums)..............               5               3
Single-Auditorium.......................               1               2
------------------------------------------------------------------------

    Finally, the unit costs for the necessary equipment are presented 
in table 16, Table 17, Table 18, and Table 19 below. This information 
was provided in NATO's public comment on the 2014 NPRM. For further 
detail regarding the unit costs used to develop the total equipment 
acquisition costs estimate, please see section 3.4 of the Final RA.

                Table 16--Captioning Hardware Unit Costs
------------------------------------------------------------------------
                                                             Cost per
                       Technology                           captioning
                                                           hardware unit
------------------------------------------------------------------------
Doremi Captiview........................................            $864
USL.....................................................           1,371
Sony....................................................             500
Average (Excluding Sony)................................           1,118
Average (All Technologies)..............................             912
------------------------------------------------------------------------


[[Page 87374]]


        Table 17--Additional Cost for Audio Description Hardware
------------------------------------------------------------------------
                                                             Cost per
                                                            theater for
                       Technology                              audio
                                                            description
                                                             hardware
------------------------------------------------------------------------
Doremi Captiview........................................            $615
USL.....................................................               0
Sony....................................................               0
Average (Excluding Sony)................................             308
Average (All Technologies)..............................             205
------------------------------------------------------------------------


                 Table 18--Captioning Device Unit Costs
------------------------------------------------------------------------
                                                             Cost per
                       Technology                           captioning
                                                              device
------------------------------------------------------------------------
Doremi Captiview........................................            $453
USL.....................................................             479
Sony....................................................           1,250
Average (Excluding Sony)................................             466
Average (All Technologies)..............................             727
------------------------------------------------------------------------


              Table 19--Audio Description Device Unit Costs
------------------------------------------------------------------------
                                                          Cost per audio
                       Technology                           description
                                                              device
------------------------------------------------------------------------
Doremi Captiview........................................            $121
USL.....................................................              69
Sony....................................................             300
Average (Excluding Sony)................................              95
Average (All Technologies)..............................             163
------------------------------------------------------------------------

    In addition to incurring upfront costs, movie theaters will also 
incur ongoing costs to comply with the final rule. Table 20 below 
presents the estimated total ongoing costs and the annual ongoing costs 
that the average movie theater within each venue type will incur over 
the 15-year period of analysis. More detailed information about how 
these costs were calculated can be found in section 3.6 (replacement 
costs), section 3.7 (training costs), and section 3.8 (maintenance and 
administrative costs) of the Final RA.

        Table 20--Average per Movie Theater Ongoing Costs by Venue Type in Primary Analysis, Undiscounted
                                                       [$]
----------------------------------------------------------------------------------------------------------------
                                                                       Total
                                       Total                        maintenance
           Venue type               replacement     Total staff         and        Total ongoing   Ongoing costs
                                       costs      training costs  administrative       costs         per year
                                                                       costs
----------------------------------------------------------------------------------------------------------------
Megaplex........................         $46,957          $7,058         $11,952         $65,968          $4,398
Multiplex.......................          31,373           4,705           7,999          44,077           2,938
Miniplex........................          19,255           1,961           4,296          25,512           1,701
Single-Auditorium...............           7,566             392           1,556           9,514             634
----------------------------------------------------------------------------------------------------------------
* Totals may differ due to rounding.

    Table 21 summarizes the estimated per movie theater costs by venue 
type, as explained above and in further detail in section 4.1.4 of the 
Final RA. The first column in table 21 presents the average upfront 
costs (acquisition, installation) by venue type while the second column 
shows the average ongoing annual costs (replacement, training, and 
maintenance and administrative costs) by venue type. The rightmost 
column shows the total undiscounted cost to an average theater by venue 
type over the 15-year period of analysis.

[[Page 87375]]



                             Table 21--Average per Movie Theater Costs, Undiscounted
                                                       [$]
----------------------------------------------------------------------------------------------------------------
                                                                          Average annual per
                                                          Average per       theater ongoing
                                                       theater  upfront          costs         Total per theater
                     Venue type                              costs           (replacement,     costs over period
                                                         (acquisition,         training,          of analysis
                                                         installation)      maintenance and
                                                                            administrative)
----------------------------------------------------------------------------------------------------------------
Megaplex............................................             $27,358              $4,398             $93,325
Multiplex...........................................              18,309               2,938              62,386
Miniplex............................................               9,834               1,701              35,346
Single-Auditorium...................................               3,562                 634              13,076
----------------------------------------------------------------------------------------------------------------

    The FRFA quantifies the impact on small entities by calculating the 
average upfront costs and the ongoing costs as a percentage of average 
annual revenue. As presented in the table above, the per movie theater 
costs are calculated by venue type. However, the SUSB program provides 
no information regarding the venue types operated by firms in each 
revenue category. As a result, the analysis uses the following 
information to estimate the venue types operated by firms in each 
revenue category:
     The average annual revenue per auditorium is approximately 
$200,000 to $250,000.\32\
---------------------------------------------------------------------------

    \32\ NATO, Attachment A, Spring 2014 Accessibility Survey 
Results, submitted in RIN 1190-AA63, CRT Docket No. 126, 
Nondiscrimination on the Basis of Disability by Public 
Accommodations--Movie Theaters; Movie Captioning and Audio 
Description, available at https://www.regulations.gov/contentStreamer?documentId=DOJ-CRT-2014-0004-0401&attachmentNumber=3&disposition=attachment&contentType=pdf (last 
visited Sept. 12, 2016).
---------------------------------------------------------------------------

     Industry research indicates that the firms with the 
largest annual revenue operate most megaplex and multiplex movie 
theaters, whereas the firms with smaller annual revenues operate most 
miniplex and single-auditorium movie theaters.
    Based on this information, the FRFA makes the following assumptions 
regarding the venue types operated by firms in each revenue category:
     Firms with less than $499,999 in annual revenue operate 
single-auditorium movie theaters.\33\ As presented in table 9, firms 
with less than $100,000 in annual revenue have an average annual 
revenue of $54,065 per theater; firms with $100,000 to $499,999 in 
annual revenue have an average annual revenue of $251,651 per theater. 
These average revenue figures are close to or below NATO's estimated 
annual revenue per auditorium.
---------------------------------------------------------------------------

    \33\ According to the 2012 SUSB, firms with less than $499,999 
in annual revenue operated 19.3 percent of all establishments in 
2012. See U.S. Census Bureau, Statistics of U.S. Businesses, 
available at http://www.census.gov/econ/susb/ (see Data by 
Enterprise Receipt Size, U.S., 6-digit NAICS) (last visited Sept. 
12, 2016). The information is available in an Excel file which lists 
all information by NAICS Code. The relevant NAICS Code for Motion 
Picture Theaters (except Drive-Ins) is 512131. This figure is 
slightly less than the estimate in table 10, which finds that 21 
percent of all movie theaters are single-auditorium.
---------------------------------------------------------------------------

     Firms with annual revenues from $500,000 to $999,999 
operate miniplex movie theaters (2-7 auditoriums). The average annual 
revenue in this category is $714,762, which is equivalent to the 
revenue generated by approximately three auditoriums according to 
NATO's estimated annual revenue per auditorium.
     Firms with annual revenues between $1 million and $2.5 
million operate miniplex and multiplex movie theaters. Costs to firms 
with annual revenues between $1 million and $2.5 million are an average 
of the costs to miniplex and multiplex movie theaters.
     Firms with annual revenues between $2.5 million and $40 
million operate multiplex and megaplex movie theaters. Costs to firms 
with revenues between $2.5 million and $40 million are estimated using 
a weighted average \34\ of the costs to multiplex and megaplex movie 
theaters based on the number of movie theaters presented in table 10.
---------------------------------------------------------------------------

    \34\ According to table 10, there are approximately 2,405 
megaplex and multiplex theaters, of which 712 are megaplexes and 
1,693 are multiplexes. The weighted average assumes that 30 percent 
of the movie theaters in this revenue category are megaplex movie 
theaters (712/2,405) and 70 percent are multiplex movie theaters 
(1,693/2,405).
---------------------------------------------------------------------------

    Using the above assumptions, table 22 presents the estimated 
upfront and ongoing annual costs for small entity movie theater firms, 
grouped into four revenue categories.

               Table 22--Venue Type, Upfront Costs, and Ongoing Costs by Revenue Category in FRFA
----------------------------------------------------------------------------------------------------------------
                                                                                                     Estimated
                                                                                     Estimated        annual
                                                   Venue type used to estimate     upfront costs  ongoing  costs
         Firms with annual revenue of                    costs to firms             to average      to  average
                                                                                   movie theater   movie theater
                                                                                   establishment   establishment
----------------------------------------------------------------------------------------------------------------
Less than $499,999............................  Single-Screen...................          $3,562            $634
$500,000 to $999,999..........................  Miniplex........................           9,834           1,701
$1,000,000 to $2,499,999......................  Miniplex/Multiplex..............        * 14,071         * 2,320
$2,500,000 to $39,999,999.....................  Multiplex/Megaplex..............       ** 20,987        ** 3,370
----------------------------------------------------------------------------------------------------------------
* Average of Miniplex/Multiplex costs.
** Weighted Average of Multiplex and Megaplex costs based on number of theaters (table 10).

    Table 23 below shows the upfront costs as a percentage of annual 
revenue for firms by revenue category. The average costs per firm are 
derived from the average number of establishments per firm (first 
column) and the average upfront costs per theater for each revenue 
category (second column). As the table shows, the upfront costs make

[[Page 87376]]

up less than 1.5 percent of annual revenue for all firms except those 
with revenues of less than $100,000. For all firms with revenues of 
$2,500,000 or greater, the upfront cost was less than 1 percent of 
annual revenues.
    As discussed previously, the data from the 2012 SUSB that is 
provided in this section also includes data from movie theaters 
operating auditoriums that exhibit analog movies exclusively, which are 
not subject to the requirements of this rulemaking. Based on its own 
independent research and analysis, the Department believes that most 
firms with annual revenue less than $100,000 are not subject to the 
requirements of this rule. Although the FRFA calculates the costs as a 
percent of annual revenue for this category of firms, the information 
available to the Department supports its view that most of these firms 
are likely operating single auditoriums that exhibit analog movies 
exclusively and are therefore not subject to the requirements of this 
rule. First, according to industry experts, the average annual revenue 
per auditorium is approximately $200,000 to $250,000, thus making it 
reasonable to assume that firms with annual revenue less than $100,000 
operate single-auditorium movie theaters. Second, the Department 
received information from industry experts that the majority of single-
auditorium movie theaters still use analog projection systems. Third, 
commenters indicated that the remaining movie theaters with analog 
projection systems have not converted to digital projection systems 
because they cannot afford the high cost to do so ($60,000 to $150,000 
per auditorium \35\). Therefore, it is reasonable to assume that most 
of the movie theater firms with less than $100,000 in annual revenue 
operate movie theaters with analog auditoriums that are not subject to 
this rulemaking. In addition, all movie theaters with auditoriums 
exhibiting digital movies--including any firms with less than $100,000 
in annual revenue--continue to have available to them the 
individualized and fact-specific undue burden limitation specified in 
Sec.  36.303(a).
---------------------------------------------------------------------------

    \35\ See Helen Alexander & Rhys Blakely, The Triumph of Digital 
Will Be the Death of Many Movies, New Republic (Sep. 12, 2014), 
available at http://www.newrepublic.com/article/119431/how-digital-cinema-took-over-35mm-film (last visited Sept. 12, 2016).

  Table 23--Average Upfront Costs as a Percentage of Annual Revenue per Firm, by Revenue Category, Undiscounted
                                                    [2015 $]
----------------------------------------------------------------------------------------------------------------
                                                                                                   Upfront costs
                               Establishments    Average upfront      Average         Average          as a
      Revenue category            per firm          costs per      upfront costs   revenue  per   percentage  of
                                                  establishment      per firm          firm           revenue
----------------------------------------------------------------------------------------------------------------
Less than $100,000 *........              1.01            $3,562          $3,591         $54,508             6.6
$100,000 to $499,999........              1.02             3,562           3,631         256,537             1.4
$500,000 to $999,999........              1.06             9,834          10,456         714,762             1.5
$1,000,000 to $2,499,999....              1.15            14,071          16,223       1,542,318             1.1
$2,500,000 to $4,999,999....              1.51            20,987          31,732       3,394,864             0.9
$5,000,000 to $7,499,999....              1.89            20,987          39,575       5,497,029             0.7
$7,500,000 to $9,999,999....              2.58            20,987          54,124       7,697,211             0.7
$10,000,000 to $14,999,999..              4.12            20,987          86,368      12,013,115             0.7
$15,000,000 to $19,999,999..              4.56            20,987          95,606      14,200,444             0.7
$20,000,000 to $24,999,999..              6.00            20,987         125,920      14,314,600             0.9
$25,000,000 to $29,999,999..             11.00            20,987         230,853      22,734,000             1.0
$30,000,000 to $34,999,999..             16.50            20,987         346,280          ** n/a          ** n/a
$35,000,000 to $39,999,999..              8.00            20,987         167,893      27,514,000             0.6
----------------------------------------------------------------------------------------------------------------
* Likely firms operating single-auditorium movie theaters that exhibit analog movies exclusively, and therefore
  not subject to this rulemaking.
** Annual revenue data withheld and value set to 0 to avoid disclosing information of individual businesses.

    Table 24 presents the average annual ongoing cost as a percentage 
of average annual revenue for firms in each revenue category. For all 
firms, except those with annual revenues of $100,000 or less, annual 
ongoing costs make up less than 0.3 percent of annual revenue.

     Table 24--Average Annual Ongoing Costs as a Percentage of Annual Revenue per Firm, by Revenue Category,
                                                  Undiscounted
                                                    [2015 $]
----------------------------------------------------------------------------------------------------------------
                                                      Average                                     Annual ongoing
                                  Establishment/   ongoing costs  Average annual      Average        cost as a
        Revenue category               firm             per         ongoing cost    revenue per    percentage of
                                                   establishment     per firm          firm           revenue
----------------------------------------------------------------------------------------------------------------
Less than $100,000 *............            1.01            $634            $639         $54,508             1.2
$100,000 to $499,999............            1.02             634             647         256,537             0.3
$500,000 to $999,999............            1.06           1,701           1,808         714,762             0.3
$1,000,000 to $2,499,999........            1.15           2,320           2,674       1,542,318             0.2
$2,500,000 to $4,999,999........            1.51           3,370           5,096       3,394,864             0.2
$5,000,000 to $7,499,999........            1.89           3,370           6,356       5,497,029             0.1
$7,500,000 to $9,999,999........            2.58           3,370           8,692       7,697,211             0.1
$10,000,000 to $14,999,999......            4.12           3,370          13,870      12,013,115             0.1
$15,000,000 to $19,999,999......            4.56           3,370          15,354      14,200,444             0.1

[[Page 87377]]

 
$20,000,000 to $24,999,999......            6.00           3,370          20,222      14,314,600             0.1
$25,000,000 to $29,999,999......           11.00           3,370          37,074      22,734,000             0.2
$30,000,000 to $34,999,999......           16.50           3,370          55,611          ** n/a          ** n/a
$35,000,000 to $39,999,999......            8.00           3,370          26,963      27,514,000             0.1
----------------------------------------------------------------------------------------------------------------
* Likely firms operating single-auditorium movie theaters that exhibit analog movies exclusively, and therefore
  not subject to this rulemaking.
** Annual revenue data withheld and value set to 0 to avoid disclosing information of individual businesses.

E. Reporting, Recordkeeping, and Other Compliance Requirements

    The final rule imposes no new recordkeeping or reporting 
requirements. However, the final rule does require that movie theaters 
disclose to the public information concerning the availability of 
captioning and audio description for movies shown in their auditoriums. 
Specifically, Sec.  36.303(g)(8) of the final rule requires movie 
theaters to inform the public of the availability of captioning and 
audio description on all notices of movie showings and times at the box 
office and other ticketing locations, on Web sites and mobile apps, in 
newspapers, and over the telephone. This requirement applies to any 
movie theater showing digital movies with captioning and audio 
description on or after January 17, 2017. Notices of movie showings and 
times posted by third parties not subject to or under the control of a 
covered movie theater are not subject to this requirement.
    As discussed throughout the Final RA, movie theaters, including 
small entities, may incur costs as a result of complying with the final 
rule. These costs are detailed in section 7.4 of the Final RA and 
section VI.D above but do not include the costs associated with the 
notice requirement. As discussed in section V.A.3 above, the Department 
expects that the additional cost and burden of noting which screenings 
will be captioned or audio-described is de minimis when a movie theater 
is already preparing a communication listing movie titles and screening 
times. Therefore, the Department anticipates that the costs and burdens 
associated with this requirement will also be de minimis for small 
entities.
    Additionally, the Department does not expect that movie theater 
personnel will need to acquire additional professional skills to comply 
with this requirement. A specific form of notice is not required. Movie 
theaters routinely use ``CC'' and ``AD'' or ``DV'' to indicate the 
availability of closed movie captioning and audio description in their 
communications, and the Department's research indicates that the 
inclusion of such abbreviations does not require additional technical 
knowledge. Moreover, the movie exhibition industry has largely moved 
away from print advertising in favor of digital advertising. As one 
commenter indicated, digital advertising allows movie theaters to add 
information concerning the availability of captioning and audio 
description without much difficulty or cost.
    More detailed information on the estimated burden and costs 
associated with the final rule's notice requirement is provided in the 
Department's 60-day Paperwork Reduction Act Notice published in the 
Federal Register on June 10, 2016. 81 FR 37643. The Department 
published a second notice in the Federal Register on August 30, 2016. 
81 FR 59657. The 30-day comment period for the second notice closed on 
September 29, 2016.

F. Measures Taken To Limit Impact on Small Entities

    The Department is aware of potential limitations to compliance for 
small entities--specifically, small movie theater firms with less than 
$38.5 million in annual revenue--and has taken measures to lessen the 
impact on those entities. In addition to soliciting comments regarding 
methods to reduce the regulatory impact on small movie theaters, the 
Department also participated in a roundtable sponsored by the Office of 
Advocacy of the SBA at which organizations representing small movie 
theaters as well as individual owners expressed their views. As a 
result of the information provided, the Department considered a variety 
of alternatives in the final rule. The different alternatives 
considered and their relevance to small movie theaters are summarized 
below. See chapter 6 of the Final RA for further information and detail 
regarding the alternatives that the Department considered.
Changes to the Compliance Date
    In the final rule, movie theaters have 18 months to acquire and 
install the necessary equipment to provide closed movie captioning and 
audio description in their auditoriums exhibiting digital movies. The 
Department also considered other compliance windows, including a 6-
month and a 2-year compliance window. Some commenters suggested that 
the Department defer the requirements of this rule for small movie 
theaters with annual revenue less than $500,000 because these movie 
theaters might have financial difficulty complying with the 
requirements.
    The Department ultimately decided that an 18-month compliance date 
was the most appropriate choice for all movie theaters exhibiting 
digital movies and is only deferring application of the rule's 
requirements for movie theater auditoriums that exhibit analog movies 
exclusively. The Department's decision regarding the 18-month 
compliance date in the final rule is based on the Department's 
independent research and the information provided in comments during 
the 2014 NPRM comment period. Based on this information, the Department 
determined that 6 months may be an insufficient amount of time for 
movie theaters to comply with the requirements of this rulemaking, 
especially small movie theaters. However, the Department believes that 
an 18-month compliance date gives small movie theaters, especially 
those struggling financially as a result of the unrelated costs of 
digital conversion, a sufficient amount of time to plan and budget 
accordingly. Although some commenters suggested a deferral for a 
category of smaller movie theaters, the Department found that to be 
unnecessary because movie theaters do not have to comply with 
requirements of the final rule to the extent that

[[Page 87378]]

complying would constitute an undue burden or a fundamental alteration.
Changes to the Scoping Requirements
    In the 2014 NPRM, the Department proposed scoping requirements for 
captioning devices based on the number of seats in a movie theater, 
which were equivalent to approximately 2 percent of seats. The 
Department further proposed that movie theaters maintain one audio 
description device per auditorium, with a minimum of two devices per 
movie theater. However, in light of the public comments received and 
proposals made by the movie exhibition industry and multiple disability 
advocacy groups, those scoping requirements have been reduced in the 
final rule. Because movie theaters are rarely at 100 percent occupancy, 
the Department determined that the number of seats within a movie 
theater is an inappropriate proxy for determining the number of 
captioning devices required. One commenter noted that the scoping 
requirements based on seat count could disproportionately impact small 
movie theaters because many single-auditorium movie theaters are 
historic establishments with many seats but low occupancy rates. 
Additionally, usage data indicates that audio description devices are 
used less frequently than the proposed scoping required. As a result, 
the Department adopted lower scoping requirements for both captioning 
and audio description devices based on the number of auditoriums 
showing digital movies within a movie theater. The reduced scoping in 
the final rule substantially lowers costs per movie theater and thus 
reduces burdens on small movie theaters.
Auditoriums Exhibiting Analog Movies Exclusively
    The Department considered giving movie theaters with auditoriums 
equipped to exhibit analog movies exclusively 4 years to comply with 
the rule's requirements, as opposed to deferring the decision whether 
to engage in rulemaking with respect to such auditoriums (see section 
1.4.1 and section 6.3 of the Final RA). Based on public comments and 
analysis of the most current data, the Department ultimately decided to 
defer analog auditoriums from coverage of this rule. As previously 
discussed, the movie industry continues to undergo significant changes 
in the production and distribution of movies, resulting in the near 
elimination of first-run movies in analog film format. Most movie 
theaters have converted to digital projection systems to the extent 
that they are financially able to do so, and as a result, small 
theaters that still have analog projection systems tend to have fewer 
financial resources than other movie theaters. The Department rejected 
the alternative 4-year compliance date for analog movie theaters and is 
deferring until a later date the decision whether to apply the rule's 
requirements to movie theater auditoriums exhibiting analog movies 
exclusively. Because the remaining analog movie theaters likely qualify 
as small entities, the deferral of rulemaking with respect to analog 
auditoriums will reduce the burdens on small movie theaters.

List of Subjects for 28 CFR Part 36

    Administrative practice and procedure, Buildings and facilities, 
Business and industry, Civil rights, Individuals with disabilities, 
Penalties, Reporting and recordkeeping requirements.

    By the authority vested in me as Attorney General by law, including 
28 U.S.C. 509 and 510, 5 U.S.C. 301, and 42 U.S.C. 12186 and 12205a, 
and for the reasons set forth in Appendix A to 28 CFR part 36, chapter 
I of title 28 of the Code of Federal Regulations is amended as follows:

PART 36--NONDISCRIMINATION ON THE BASIS OF DISABILITY BY PUBLIC 
ACCOMMODATIONS AND IN COMMERCIAL FACILITIES

0
1. The authority citation for part 36 is revised to read as follows:

    Authority: 5 U.S.C. 301; 28 U.S.C. 509, 510; 42 U.S.C. 12186(b), 
12205a.

Subpart A--General

0
2. In Sec.  36.303:
0
a. Redesignate paragraph (g) as paragraph (h); and
0
b. Add new paragraph (g) to read as follows:


Sec.  36.303  Auxiliary aids and services.

* * * * *
    (g) Movie theater captioning and audio description--(1) 
Definitions. For the purposes of this paragraph (g)--
    (i) Analog movie means a movie exhibited in analog film format.
    (ii) Audio description means the spoken narration of a movie's key 
visual elements, such as the action, settings, facial expressions, 
costumes, and scene changes. Audio description generally requires the 
use of an audio description device for delivery to a patron.
    (iii) Audio description device means the individual device that a 
patron may use at any seat to hear audio description.
    (iv) Captioning device means the individual device that a patron 
may use at any seat to view closed movie captioning.
    (v) Closed movie captioning means the written display of a movie's 
dialogue and non-speech information, such as music, the identity of the 
character who is speaking, and other sounds or sound effects. Closed 
movie captioning generally requires the use of a captioning device for 
delivery of the captions to the patron.
    (vi) Digital movie means a movie exhibited in digital cinema 
format.
    (vii) Movie theater means a facility, other than a drive-in 
theater, that is owned, leased by, leased to, or operated by a public 
accommodation and that contains one or more auditoriums that are used 
primarily for the purpose of showing movies to the public for a fee.
    (viii) Open movie captioning means the written on-screen display of 
a movie's dialogue and non-speech information, such as music, the 
identity of the character who is speaking, and other sounds and sound 
effects.
    (2) General. A public accommodation shall ensure that its movie 
theater auditoriums provide closed movie captioning and audio 
description whenever they exhibit a digital movie that is distributed 
with such features. Application of the requirements of paragraph (g) of 
this section is deferred for any movie theater auditorium that exhibits 
analog movies exclusively, but may be addressed in a future rulemaking.
    (3) Minimum requirements for captioning devices. A public 
accommodation shall provide a minimum number of fully operational 
captioning devices at its movie theaters in accordance with the 
following Table:

------------------------------------------------------------------------
                                                              Minimum
                                                             required
 Number of movie theater auditoriums exhibiting digital      number of
                         movies                             captioning
                                                              devices
------------------------------------------------------------------------
1.......................................................               4
2-7.....................................................               6
8-15....................................................               8
16 +....................................................              12
------------------------------------------------------------------------

    (4) Minimum requirements for audio description devices. (i) A 
public accommodation shall provide at its movie theaters a minimum of 
one fully operational audio description device for every two movie 
theater auditoriums exhibiting digital movies and no less than two 
devices per movie theater. When calculation of the required number of 
devices results in a fraction, the next greater whole number of devices 
shall be provided.

[[Page 87379]]

    (ii) A public accommodation may comply with the requirements in 
paragraph (g)(4)(i) of this section by using the existing assistive 
listening receivers that the public accommodation is already required 
to provide at its movie theaters in accordance with Table 219.3 of the 
2010 Standards, if those receivers have a minimum of two channels 
available for sound transmission to patrons.
    (5) Performance requirements for captioning devices and audio 
description devices. Each captioning device and each audio description 
device must be properly maintained by the movie theater to ensure that 
each device is fully operational, available to patrons in a timely 
manner, and easily usable by patrons. Captioning devices must be 
adjustable so that the captions can be viewed as if they are on or near 
the movie screen, and must provide clear, sharp images in order to 
ensure readability of captions.
    (6) Alternative technologies. (i) A public accommodation may meet 
its obligation to provide captioning and audio description in its movie 
theaters to persons with disabilities through any technology so long as 
that technology provides communication as effective as that provided to 
movie patrons without disabilities.
    (ii) A public accommodation may use open movie captioning as an 
alternative to complying with the requirements specified in paragraph 
(g)(3) of this section, either by providing open movie captioning at 
all showings of all movies available with captioning, or whenever 
requested by or for an individual who is deaf or hard of hearing prior 
to the start of the movie.
    (7) Compliance date for providing captioning and audio description. 
(i) A public accommodation must comply with the requirements in 
paragraphs (g)(2)-(6) of this section in its movie theaters that 
exhibit digital movies by June 2, 2018.
    (ii) If a public accommodation converts a movie theater auditorium 
from an analog projection system to a system that allows it to exhibit 
digital movies after December 2, 2016, then that auditorium must comply 
with the requirements in paragraph (g) of this section by December 2, 
2018, or within 6 months of that auditorium's complete installation of 
a digital projection system, whichever is later.
    (8) Notice. On or after January 17, 2017, whenever a public 
accommodation provides captioning and audio description in a movie 
theater auditorium exhibiting digital movies, it shall ensure that all 
notices of movie showings and times at the box office and other 
ticketing locations, on Web sites and mobile apps, in newspapers, and 
over the telephone, inform potential patrons of the movies or showings 
that are available with captioning and audio description. This 
paragraph does not impose any obligation on third parties that provide 
information about movie theater showings and times, so long as the 
third party is not part of or subject to the control of the public 
accommodation.
    (9) Operational requirements. On or after January 17, 2017, 
whenever a public accommodation provides captioning and audio 
description in a movie theater auditorium exhibiting digital movies, it 
shall ensure that at least one employee is available at the movie 
theater to assist patrons seeking or using captioning or audio 
description whenever a digital movie is exhibited with these features. 
Such assistance includes the ability to--
    (i) Locate all necessary equipment that is stored and quickly 
activate the equipment and any other ancillary systems required for the 
use of the captioning devices and audio description devices;
    (ii) Operate and address problems with all captioning and audio 
description equipment prior to and during the movie;
    (iii) Turn on open movie captions if the movie theater is relying 
on open movie captioning to meet the requirements of paragraph (g)(3) 
of this section; and
    (iv) Communicate effectively with individuals with disabilities, 
including those who are deaf or hard of hearing or who are blind or 
have low vision, about how to use, operate, and resolve problems with 
captioning devices and audio description devices.
    (10) This section does not require the use of open movie captioning 
as a means of compliance with paragraph (g) of this section, even if 
providing closed movie captioning for digital movies would be an undue 
burden.

0
3. Appendix F to part 36 is added to read as follows:

Appendix F to Part 36--Guidance and Section-by-Section Analysis

Section 36.303(g)(1) Definitions

    In the Notice of Proposed Rulemaking, 79 FR 44976 (Aug. 1, 2014) 
(NPRM), the Department proposed Sec.  36.303(g)(1), which set forth 
definitions for certain terms specifically referenced in paragraph 
(g). The Department sought public comment on these proposed 
definitions.

``Analog Movie''

    Although the Department did not specifically propose a 
definition of ``analog movie'' in the NPRM, the Department defined 
the term in the preamble and solicited comment on the state of 
analog movies and their availability. In the final rule, the 
Department has added a definition of ``analog movie'' in order to 
distinguish between movies shown in digital cinema format and movies 
shown in analog format. ``Analog movie'' is defined to mean ``a 
movie exhibited in analog film format.''

``Audio Description''

    In the NPRM, the Department used the term ``audio description'' 
to refer to the spoken description of information describing the 
visual elements of a movie to an individual who is blind or has low 
vision and who is unable to see the images and action on the screen. 
Proposed Sec.  36.303(g)(1)(i) defined ``audio description'' as the 
``provision of a spoken narration of key visual elements of a 
visually delivered medium, including, but not limited to, actions, 
settings, facial expressions, costumes, and scene changes.'' 
Although the Department believes that the term ``audio description'' 
is most commonly used to describe this service, it sought public 
comment on whether to use this or some other nomenclature.
    All commenters addressing this issue agreed with the 
Department's proposal and supported the use of the term and the 
Department's definition. In the final rule, the Department has 
retained the term ``audio description,'' and has slightly modified 
the definition for clarity to read as follows: ``Audio description 
means the spoken narration of a movie's key visual elements, such as 
the action, settings, facial expressions, costumes, and scene 
changes. Audio description generally requires the use of an audio 
description device for delivery to a patron.''

``Audio Description Device''

    In the NPRM, at proposed Sec.  36.303(g)(1)(iii), the Department 
used the term ``individual audio description listening device'' to 
refer to the ``individual device that patrons may use at their seats 
to hear audio description.'' The sole commenter on this definition 
expressed concern that the term ``individual audio description 
listening device'' was unnecessarily long. The Department agrees 
with the commenter and has revised the name of the device 
accordingly in the final rule. The final rule retains the text of 
the proposed definition with minor edits.

``Captioning Device''

    In the NPRM, at proposed Sec.  36.303(g)(1)(iv), the Department 
used the term ``individual captioning device'' to refer to the 
``individual device that patrons may use at their seats to view the 
closed captions.'' The sole commenter on this definition recommended 
that the Department shorten the nomenclature for this device to 
``captioning device.'' The Department agrees with the commenter and 
has revised the name of the device accordingly in the final rule. 
The final rule retains the text of the proposed definition with 
minor edits.

[[Page 87380]]

``Closed Movie Captioning''

    The NPRM defined ``closed movie captioning'' as ``the written 
text of the movie dialogue and other sounds or sound making (e.g. 
sound effects, music, and the character who is speaking).'' The NPRM 
further provided that closed movie captioning be available only to 
individuals who request it, and that, generally, it requires the use 
of an individual captioning device to deliver the captions to the 
patron.
    Commenters were equally split as to whether the Department 
should use ``closed movie captioning'' or some other language to 
refer to the technology. Some commenters urged the Department to use 
the term ``closed captioning.'' Other commenters disagreed, however, 
and stated that the Department should avoid using the term ``closed 
captioning'' to distinguish it from the ``closed captioning'' that 
is turned on at home by a person viewing the television. In the 
final rule, the Department is retaining the term ``closed movie 
captioning,'' but the definition is modified for clarity to read: 
``Closed movie captioning means the written display of a movie's 
dialogue and non-speech information, such as music, the identity of 
the character who is speaking, and other sounds or sound effects. 
Closed movie captioning generally requires the use of a captioning 
device for delivery of the captions to the patron.''

``Digital Movie''

    The Department has added a definition of ``digital movie,'' 
meaning ``a movie exhibited in digital cinema format.''

``Movie Theater''

    The NPRM proposed defining ``movie theater'' as ``a facility 
other than a drive-in theater that is used primarily for the purpose 
of showing movies to the public for a fee'' in order to make clear 
which facilities are subject to the specific captioning and audio 
description requirements set forth in Sec.  36.303(g). The 
Department intended this definition to exclude drive-in movie 
theaters as well as facilities that screen movies if the facility is 
not used primarily for the purpose of showing movies for a fee, such 
as museums, hotels, resorts, or cruise ships, even if they charge an 
additional fee. The Department asked for public comment on the 
proposed definition and whether it adequately described the movie 
theaters that should be covered by this regulation.
    Commenters generally supported the Department's proposed 
definition for ``movie theater,'' but there were some concerns about 
the proposed definition's scope. Some commenters asserted that the 
definition of ``movie theater'' should be expanded to include the 
institutions that the Department expressly excluded, such as 
museums, hotels, resorts, cruise ships, amusement parks, and other 
similar public accommodations that show movies as a secondary 
function, whether or not they charge a fee. One commenter expressed 
concern that such entities might believe that they are otherwise 
exempt from any requirement to furnish auxiliary aids and services 
to ensure effective communication, and another commenter urged the 
Department to consider developing additional regulations that would 
specifically address public accommodations that are not covered by 
the proposed definition but otherwise exhibit movies or other video 
content.
    The Department declines to make any changes at this time to 
address public accommodations that do not meet the definition of 
``movie theater'' and are, therefore, not subject to the 
requirements of paragraph (g). The Department's title III regulation 
has always made clear that all public accommodations must provide 
effective communication to the public through the provision of 
auxiliary aids and services, including, where appropriate, 
captioning and audio description. See generally 28 CFR 36.303; 28 
CFR part 36, app. A. The requirements of this rule were not intended 
to supplant the general obligation to provide effective 
communication through the provision of auxiliary aids and services. 
They are only intended to provide clarity about how ``movie 
theaters'' must meet this obligation. The Department notes that many 
public accommodations that screen movies as a secondary function 
already provide appropriate auxiliary aids and services, and where 
the Department has identified the need for enforcement action, these 
types of public accommodations have been willing to comply with the 
ADA and the effective communication requirement. See, e.g., Press 
Release, U.S. Department of Justice, Justice Department Reaches 
Settlement with National Museum of Crime and Punishment to Improve 
Access for People with Disabilities (Jan. 13, 2015), available at 
http://www.justice.gov/opa/pr/justice-department-reaches-settlement-national-museum-crime-and-punishment-improve-access (last visited 
Sept. 12, 2016).
    Two commenters asked the Department to revise the definition of 
``movie theater'' to clarify that public accommodations used as 
temporary screening locations during film festivals, such as pop-up 
tents, convention centers, and museums with theaters, are not 
subject to the requirements of paragraph (g). According to such 
commenters, most movies screened at festivals are not ready for 
distribution, and typically have not yet been distributed with 
captioning and audio description. To the extent a film is already 
distributed with these features, the commenters argued that the 
myriad of logistics entailed in coordinating a festival may preclude 
a film festival from making such features available.
    The Department does not believe that its definition of ``movie 
theater'' encompasses the temporary facilities described by the 
commenters that host film festivals. However, operators of film 
festivals, just like any other public accommodation that operates a 
place of entertainment, are still subject to the longstanding 
general requirement under Sec.  36.303 to provide effective 
communication unless doing so would be a fundamental alteration of 
the program or service or would constitute an undue burden. 
Moreover, if a festival programmer schedules the screening of a 
movie that is already distributed with captioning and audio 
description at a movie theater that is subject to the requirements 
in paragraph (g), then the effective communication obligation would 
require the festival to ensure that the accessible features are 
available at all scheduled screenings of a movie distributed with 
such features.
    The Department also received several comments regarding the 
exclusion of drive-in movie theaters in the proposed definition. 
Many commenters agreed that drive-in movie theaters should not be 
subject to the requirements of paragraph (g) because the technology 
still does not exist to exhibit movies with closed movie captioning 
and audio description in this setting. A few commenters pointed out 
innovative ways for drive-in movie theaters to provide captioning 
and audio description and argued that such options are feasible. For 
example, one commenter suggested that drive-in movie theaters 
provide audio description through a second low-power FM broadcast 
transmitter or on a second FM channel. However, these commenters did 
not clearly identify technology that is currently available or under 
development to provide closed movie captioning in this setting. 
Finally, one commenter expressed concern that if audio description 
was broadcast at a drive-in theater, it would likely be heard by 
patrons who do not require audio description and would result in a 
fundamental alteration of the movie-going experience for such 
patrons.
    The Department declines to change its position that drive-in 
movie theaters should be excluded from the requirements of paragraph 
(g). Given the diminishing number of drive-in movie theaters, the 
current lack of accessible technology to provide closed movie 
captioning and audio description in this setting, and the fact that 
it is unlikely that such technology will be developed in the future, 
the Department remains convinced that rulemaking regarding drive-in 
movie theaters should be deferred until the necessary technology 
becomes commercially available.
    For the reasons discussed above, the Department has retained the 
text of the proposed definition of ``movie theater'' with minor 
edits. The final rule defines ``movie theater'' as ``a facility, 
other than a drive-in theater, that is owned, leased by, leased to, 
or operated by a public accommodation and that contains one or more 
auditoriums that are used primarily for the purpose of showing 
movies to the public for a fee.''

``Open Movie Captioning''

    The NPRM proposed defining ``open movie captioning'' as ``the 
provision of the written text of the movie dialogue and other sounds 
or sound making in an on-screen text format that is seen by everyone 
in the movie theater.''
    While commenters were evenly split on whether the new regulation 
should use the term ``open movie captioning'' or ``open 
captioning,'' the Department chose the former to avoid confusion and 
emphasize that the term refers only to captioning provided at movie 
theaters. The final rule defines ``open movie captioning'' as ``the 
written on-screen display of a movie's dialogue and non-speech 
information, such

[[Page 87381]]

as music, the identity of the character who is speaking, and other 
sounds and sound effects.''

Section 36.303(g)(2) General

    In the NPRM, the Department proposed at Sec.  36.303(g)(2)(i) 
that ``[a] public accommodation that owns, leases, leases to, or 
operates a movie theater shall ensure that its auditoriums have the 
capability to exhibit movies with closed movie captions.'' That 
paragraph further provided that in all cases where the movies the 
theater intends to exhibit are produced, distributed, or otherwise 
made available with closed movie captions, the public accommodation 
must ensure that it acquires the captioned version of those movies 
and makes closed movie captions available at all scheduled 
screenings of those movies. An identical provision requiring movie 
theaters to exhibit movies with audio description was proposed at 
Sec.  36.303(g)(3)(i). The Department proposed applying the 
requirements for closed movie captioning and audio description to 
all movie screens (auditoriums) in movie theaters that show digital 
movies and sought public comment as to the best approach to take 
with respect to movie theaters that show analog movies. The 
Department sought public comment on whether it should adopt one of 
two options regarding the specific obligation to provide captioning 
and audio description at movie theater auditoriums that display 
analog movies. Option 1 proposed covering movie theater screens 
(auditoriums) that display analog movies but giving them 4 years to 
come into compliance with the requirements of Sec.  36.303(g). 
Option 2 proposed deferring the decision whether to apply the rule's 
requirements to movie theater screens (auditoriums) showing analog 
movies and considering additional rulemaking at a later date.
    Many commenters generally agreed with the provisions as they 
related to movie theaters displaying digital movies. These 
commenters stressed, however, that movie theaters should in no way 
be prohibited or limited from exhibiting a movie that is not 
available with captioning or audio description, or be required to 
add captioning and audio description when these features are not 
available.
    Commenters were split in response to the Department's question 
concerning the best approach to take with respect to analog movie 
theaters. A slight majority of commenters supported deferral for 
movie theater auditoriums that exhibit analog movies exclusively. In 
support of Option 2, these commenters pointed to the state of the 
movie industry, the financial condition of many small movie 
theaters, and the unintended consequences of a 4-year compliance 
date. According to the comments, there are very few remaining movie 
theaters that display analog movies exclusively, and despite the 
industry's urging that such movie theaters must convert to digital 
to remain viable, many of these movie theaters have not converted 
because they cannot afford the high cost to do so. Therefore, these 
commenters argued that a regulation covering analog movie theaters 
will have minimal overall impact in addition to being an unnecessary 
strain on small businesses, considering the high cost of compliance 
for such movie theaters.
    The remaining commenters responding to this question stated that 
the Department should adopt Option 1's 4-year compliance date for 
movie theaters displaying analog movies. These commenters reasoned 
that fairness and equality concerns justified adoption of Option 1 
because, in their view, Option 2 could incentivize more movie 
theaters to delay their digital conversion, resulting in fewer movie 
theaters being subject to the regulation, and individuals with 
hearing and vision disabilities continuing to face unequal access to 
movie theaters. A few disability groups argued that because a movie 
theater is subject to title III of the ADA regardless of whether it 
displays analog movies or digital movies, adoption of Option 2 could 
be seen as carving out an exception within the ADA where none exists 
otherwise.
    In consideration of these comments and the Department's 
independent research, the Department has decided to defer until a 
later date the decision whether to engage in rulemaking with respect 
to movie theater auditoriums that exhibit analog movies exclusively. 
Thus, the final rule makes clear that the requirements of paragraph 
(g) apply only to movie theaters with auditoriums that show digital 
movies. The Department agrees with commenters that very few analog 
movie theaters remain, and that the number of such movie theaters 
has declined rapidly in recent years. The Department believes that 
it is prudent to wait until it is clear whether there will be any 
movie theaters that continue to show analog movies and whether 
analog movies will continue to be produced at all, or distributed 
with captioning and audio description. Although movie theater 
auditoriums that exhibit analog movies exclusively are not subject 
to the specific requirements of paragraph (g) at this time, such 
movie theaters are nonetheless public accommodations and subject to 
the effective communication requirements of title III.
    The final rule provides that ``[a] public accommodation shall 
ensure that its movie theater auditoriums provide closed movie 
captioning and audio description whenever they exhibit a digital 
movie that is distributed with such features. Application of the 
requirements of paragraph (g) is deferred for any movie theater 
auditorium that exhibits analog movies exclusively, but may be 
addressed in a future rulemaking.''
    The requirements of paragraph (g) do not in any way prohibit a 
movie theater from displaying a movie that has not been made 
available with captioning and audio description features nor do the 
requirements require a movie theater to independently add such 
features to a movie that is not distributed with such features. In 
addition, all movie theaters, regardless of size, status of 
conversion to digital cinema, or economic viability, continue to 
have available to them the individualized and fact-specific undue 
burden limitation specified in Sec.  36.303(a). This regulation does 
not change the availability of this compliance limitation nor the 
circumstances under which it can be asserted. See 28 CFR 36.104 
(defining undue burden and listing factors to be considered in 
determining whether an action would result in an undue burden). It 
does, however, provide clarity about how movie theaters can meet 
their longstanding effective communication obligations under the 
ADA.
    The Department notes that even if a movie theater cannot 
initially install captioning and audio description equipment in all 
of its auditoriums because it is an undue burden, the movie theater 
is still obligated to comply with renumbered Sec.  36.303(h) and 
provide alternatives to full compliance by providing captioning and 
audio description in some of its auditoriums up to the point where 
the cost becomes an undue burden. In such a situation, the movie 
theater should take steps to maximize the range of movie options for 
customers who are deaf or hard of hearing, or blind or have low 
vision, by dispersing the available equipment throughout their 
auditoriums so that the theater is able to exhibit as many movies as 
possible with captioning and audio description throughout the day 
and evening on weekdays and weekends. If, for example, a six-
auditorium movie theater can only afford to install captioning 
equipment in half of its auditoriums, and it has auditoriums with 
different capacities, it should install captioning equipment in a 
large, a medium, and a small auditorium. This distribution of 
equipment would permit exhibition of different types of movies, as 
blockbusters generally are shown in larger auditoriums first and 
lower budget or older movies may only be shown in medium or small 
auditoriums.
    It has been, and continues to be, the Department's position that 
it would not be a fundamental alteration of the business of showing 
movies in theaters to exhibit movies already distributed with closed 
movie captioning and audio description in order to ensure effective 
communication for individuals who are deaf or hard of hearing, or 
blind or have low vision. The service that movie theaters provide is 
the screening or exhibiting of movies. The use of captioning and 
audio description to make that service available to those who are 
deaf or hard of hearing, or blind or have low vision, does not 
change that service. Rather, the provision of such auxiliary aids is 
the means by which these individuals gain access to movie theaters' 
services and thereby achieve the ``full and equal enjoyment,'' 42 
U.S.C. 12182(a), of the screening of movies. See, e.g., Brief for 
the United States as Amicus Curiae Supporting Appellants and Urging 
Reversal at 15-17, Arizona ex rel. Goddard v. Harkins Amusement 
Enters., Inc., 603 F.3d 666 (9th Cir. 2010) (No. 08-16075); see also 
NPRM, 79 FR 44976, 44982-83 (Aug. 1, 2014). The Department received 
no public comments challenging that position.

Section 36.303(g)(3) Minimum Requirements for Captioning Devices

    In the NPRM, the Department proposed that movie theaters be 
required to have available a minimum number of captioning devices 
equal to approximately half the number of assistive listening 
receivers already mandated for assembly areas by sections 219 and 
706 of the 2010 Standards.

[[Page 87382]]

The calculation was based on a movie theater's total seating 
capacity and 2010 Census data estimating that 3.1 percent of the 
U.S. population ages 15 and older (7.6 million) has difficulty 
hearing. See U.S. Census Bureau, U.S. Department of Commerce, P70-
131, Americans with Disabilities: 2010 Household Economic Studies at 
8 (2012), available at http://www.census.gov/prod/2012pubs/p70-131.pdf (last visited Sept. 12, 2016). Thus, the proposed Sec.  
36.303(g)(2)(iii)(A) required that a movie theater maintain 
captioning devices for approximately 2-4 percent of all available 
seats and stated that: ``a public accommodation that owns, leases, 
leases to, or operates a movie theater shall provide individual 
captioning devices in accordance with the following Table [below]. 
This requirement does not apply to movie theaters that elect to 
exhibit all movies at all times at that facility with open movie 
captioning.''

------------------------------------------------------------------------
                                            Minimum required number of
  Capacity of seating in movie theater    individual captioning devices
------------------------------------------------------------------------
100 or less............................  2.
101 to 200.............................  2 plus 1 per 50 seats over 100
                                          seats or a fraction thereof.
201 to 500.............................  4 plus 1 per 50 seats over 200
                                          seats or a fraction thereof.
501 to 1000............................  10 plus 1 per 75 seats over 500
                                          seats or a fraction thereof.
1001 to 2000...........................  18 plus 1 per 100 seats over
                                          1000 seats or a fraction
                                          thereof.
2001 and over..........................  28 plus 1 per 200 seats over
                                          2000 seats or a fraction
                                          thereof.
------------------------------------------------------------------------

    The Department received more than 70 comments on its proposed 
scoping requirements for captioning devices. All commenters 
disagreed with the formula in the NPRM, and with the exception of a 
very few individuals and a law school clinic, commenters uniformly 
maintained that the Department's proposed requirements substantially 
overestimated the number of captioning devices necessary for a 
variety of reasons.
    Many commenters asserted that seating capacity does not equate 
with the need for captioning devices because movie theaters are 
rarely at 100 percent seat occupancy, and not all Americans attend 
the movies simultaneously. They stressed that even at peak 
attendance times (weekends), average seat occupancy rates are 
substantially less than half of capacity while small movie theaters 
in rural areas with one or two auditoriums report even lower 
attendance rates. Other commenters noted that old historic theaters 
often have large seating capacities, despite low attendance rates. 
And some noted that at large, multi-auditorium complexes, not all 
auditoriums are simultaneously in use at all times. Thus, these 
commenters asserted that average movie attendance during weekend 
hours, not the number of theater seats, most accurately predicts 
anticipated demand for captioning devices.
    Some commenters maintained that the Department's proposed 
scoping requirements significantly overestimated the need for 
captioning devices because the percentage of persons in the 
population who have difficulty hearing does not reflect those who 
will actually benefit from or use the devices. In their view, 
captioning devices will not be used by the vast majority of 
individuals who are deaf or hard of hearing because such devices are 
only needed by persons who have ``severe'' difficulty hearing, and 
assistive listening receivers, which amplify the volume of sound, 
are already required and available at movie theaters. These 
commenters also cited statistics showing that a significant 
percentage of Americans do not attend the movies at least once a 
year, and while hearing loss disproportionately affects seniors, 
they represent a smaller proportion of persons who actually attend 
the movies.
    Commenters also stressed that in their experience, the 
Department's proposed scoping requirements for captioning devices 
far exceed demand in those movie theaters that currently stock and 
advertise the availability of such devices. To support this 
conclusion, NATO offered device usage data from five movie theater 
companies (which included a small business with a total screen 
(auditorium) count in the 1-75 range, three regional companies with 
a total screen (auditorium) count in the 300-700 range, and a 
national company with a 2000+ screen (auditorium) count) that stock 
and advertise the availability of captioning devices on their Web 
sites, at ticket counters, and on third-party Web sites. According 
to NATO, that data showed that even though four of these five 
companies stocked far fewer captioning devices than the NPRM 
proposed, actual demand rarely, if ever, exceeded supply even at 
peak attendance times. Other movie theaters and a trade association 
also submitted tracking records to confirm the same.
    Several commenters objected to the Department's proposed scoping 
requirements because they provided a fixed, nonadjustable number 
that was not tied to actual consumer demand and failed to account 
for variations in attendance based on theater location and patron 
demographics. These commenters noted that while movie theaters near 
areas with a high concentration of residents or students who are 
deaf or hard of hearing may experience greatest demand for devices, 
a movie theater in a small rural area may have only a few requests. 
Many commenters also expressed concern that because the Department's 
proposed scoping requirements would result in the vast majority of 
movie theaters having to purchase expensive technology far in excess 
of what is needed or would be used, those movie theaters would 
likely avoid investing in new, superior technology as it becomes 
available.
    Although commenters overwhelmingly disagreed with the 
Department's proposed approach to scoping, most did not suggest a 
formula for determining the number of captioning devices that should 
be required. Instead, they recommended that the number of required 
devices be based on one or more factors, including actual or average 
weekend movie attendance, percentage of individuals who have severe 
hearing difficulty and will likely use the devices, demand for 
devices, number of movie theater seats, screen count, and patron 
demographics. For example, a Federal agency recommended that the 
Department set scoping requirements in accordance with the optimal 
number of devices sufficient to provide accessibility to the 
disability community (based on relevant factors such as device 
usage, demand, and weekend theater attendance) while minimizing the 
burden on small businesses. A few movie theaters maintained that any 
minimum device requirement would be a waste of resources and 
unnecessary because movie theaters seek to satisfy their patrons' 
needs, and as a result, many already advertise and provide 
captioning devices upon request.
    NATO and four advocacy groups representing persons who are deaf 
or hard of hearing \1\ submitted a Joint Comment offering a three-
tiered approach to scoping that was referenced and supported by many 
commenters. First, the Joint Comment recommended that movie theaters 
obtain a minimum number of captioning devices based on the number of 
screens (auditoriums) displaying digital movies, in accordance with 
the following:

    \1\ Those advocacy groups are the National Association of the 
Deaf, the Hearing Loss Association of America, the Association of 
Late Deafened Adults, and the Alexander Graham Bell Association for 
the Deaf and Hard of Hearing.
---------------------------------------------------------------------------

Single Screen: 4 devices
Miniplex (2-7 screens): 6 devices
Multiplex (8-15 screens): 8 devices
Megaplex (16+ screens): 12 devices

    Second, in order to address the limited circumstances when 
demand for captioning devices exceeds minimum requirements, the 
Joint Comment proposed that movie theaters record weekend demand for 
captioning devices and adjust the number of devices biannually to be 
equal to 150 percent of the average weekend demand during a 6-month 
tracking period. For example, under this formula, a movie theater 
that is initially required to have 6 devices and calculates an 
average actual weekend demand of 8 devices during a tracking period 
must increase the number of available devices to 12 (150 percent of 
8). Finally, the Joint Comment recommended that the Department 
require every movie theater company to submit an annual report of 
its tracking records to the Department.
    After considering all comments, census data, statistics 
regarding movie theater attendance, actual usage data, and its

[[Page 87383]]

independent research, the Department has modified its approach to 
captioning device scoping and has adopted a final rule that requires 
movie theaters to have on hand the minimum number of captioning 
devices proposed in the Joint Comment. Thus, the final rule at 
renumbered Sec.  36.303(g)(3)(i) states that ``[a] public 
accommodation shall provide a minimum number of fully operational 
captioning devices at its movie theaters in accordance with the 
following Table:''

------------------------------------------------------------------------
                                                              Minimum
                                                             required
 Number of movie theater auditoriums exhibiting digital      number of
                         movies                             captioning
                                                              devices
------------------------------------------------------------------------
1.......................................................               4
2-7.....................................................               6
8-15....................................................               8
16+.....................................................              12
------------------------------------------------------------------------

    The Department imposes these requirements because its own 
research and analysis confirms that they will easily satisfy maximum 
weekend demand for captioning devices at movie theaters across the 
nation in almost every location. Thus, the Department believes that 
the final rule obligates movie theaters to provide the optimum 
number of captioning devices sufficient to provide accessibility to 
individuals with disabilities who will need and use them, without 
requiring movie theaters to purchase equipment that may likely never 
be used.
    Despite NATO's and a number of other comments to the contrary, 
the Department has also decided not to impose specific requirements 
at this time for providing additional captioning devices when actual 
demand for them exceeds the rule's minimum requirements. While the 
Department acknowledges that there are a few movie theaters located 
in areas where there is an unusually high concentration of 
individuals who are deaf or hard of hearing, comments, usage data, 
and independent research all indicate that only in those rare 
circumstances is there a reasonable possibility that regular demand 
for devices may exceed the rule's minimum requirements. That same 
information also reflects that many movie theaters located in 
markets that consistently have an unusually large number of patrons 
with hearing difficulties are already making voluntary efforts to 
satisfy consumer demand. For example, because open movie captioning 
is popular with many movie patrons who are deaf or hard of hearing, 
some movie theaters near schools that educate persons who are deaf 
provide open-captioned screenings on-demand, or in accordance with a 
convenient, regular, and frequent schedule. In any event, the 
Department currently lacks adequate information and data to craft an 
appropriate standard to address these situations.
    In addition, the Department decided not to impose a 
recordkeeping requirement on movie theaters at this time, even 
though some commenters suggested that the Department do so in order 
to require movie theaters to keep records of actual demand for 
devices. The NPRM did not solicit information about existing movie 
theater recordkeeping practices with respect to the provision of 
assistive listening receivers or captioning and audio description 
devices, and the Department lacks adequate data as to the costs and 
the burdens of imposing such a requirement on all movie theaters. 
Moreover, the Department has not previously imposed this type of 
recordkeeping requirement on public accommodations, and it declines 
to do so without more information about the need and the costs. The 
Department intends, however, to reach out to stakeholders in the 
future and obtain additional information about whether it should 
consider engaging in supplemental rulemaking regarding a 
recordkeeping requirement and imposing a standard that addresses 
situations when actual demand exceeds the rule's minimum 
requirements.
    In the interim, for those movie theaters that are located in the 
few places where there is an unusually high concentration of 
individuals who are deaf or hard of hearing, the Department strongly 
encourages these public accommodations to voluntarily work with the 
local disability community to identify and maintain an appropriate 
number of captioning devices, or to utilize other approaches, 
including open movie captioning, to satisfy their patrons' regular 
and actual demand.

Section 36.303(g)(4) Minimum Requirements for Audio Description Devices

    In order to ensure that individuals who are blind or have low 
vision have access to audio-described movies when such movies are 
available, movie theaters must provide a reasonable number of audio 
description devices. In the NPRM, the Department proposed at Sec.  
36.303(g)(3)(ii)(A) that movie theaters maintain one audio 
description device per auditorium, with a minimum of two devices per 
movie theater. However, the Department noted at proposed Sec.  
36.303(g)(3)(ii)(B) that ``[a] movie theater may comply with this 
requirement by using receivers it already has available as assistive 
listening devices in accordance with the requirements in Table 219.3 
of the 2010 Standards, if those receivers have a minimum of two 
channels available for sound transmission to patrons.'' The 
Department theorized that many movie theaters utilized the newer, 
multi-channel assistive listening receivers, and as a result, most 
movie theaters would not be required to purchase additional devices 
in order to comply with this requirement.
    The Department received extensive comments regarding the 
proposed scoping for audio description devices. Although commenters 
overwhelmingly supported the proposed rule's goal of ensuring access 
to audio description in movie theaters, only three commenters agreed 
with the proposed scoping.
    Several commenters recommended a greater number of audio 
description devices than the Department proposed in the NPRM to 
accommodate an increase in the number of individuals who are blind 
or have low vision who will likely attend the movies if accessible 
technologies are available. A few commenters recommended two audio 
description devices per auditorium, citing a movie theater's usage 
data to support the suggestion. One commenter, concerned that a 
movie theater should be able to accommodate a larger group of blind 
or visually impaired movie patrons, recommended at least eight audio 
description devices per movie theater, or two devices per 
auditorium, whichever is greater. Finally, one commenter proposed 
requiring three audio description devices per auditorium to 
accommodate a larger user pool, and to counteract a reduction in 
available devices that may arise in the event of equipment failure, 
or when devices are being recharged.
    The majority of commenters, however, stated that the recommended 
scoping was excessive and too inflexible. These commenters reasoned 
that the proposed scoping failed to consider attendance variability 
or demographics, and inhibited movie theaters from moving devices 
between locations to effectively meet demographic needs. Commenters 
recommended basing the number of required audio description devices 
on factors such as weekend attendance, annual attendance, tracked 
usage rates, and market demand. The Department received a large 
number of comments from movie theaters stating that current requests 
by patrons for audio description devices are extremely low. 
Additionally, a trade association submitted comments stating that 
member companies reported signing out a maximum of 1-4 audio 
description devices at any time, and that these companies never had 
more requests for devices than the number of devices available. 
Based on this information, the trade association recommended that 
the Department require one audio description device for every two 
auditoriums, with a minimum of two devices per movie theater.
    In addition to comments criticizing the proposed scoping, 
commenters also addressed the Department's belief that most movie 
theaters utilize multi-channel headsets to meet their assistive 
listening device obligations. A couple of movie theaters indicated 
that they have the dual-channel receivers. However, a trade 
association commented that many movie theaters still rely on single-
channel headsets to meet their assistive listening device 
obligations and that the Department erred in assuming that most 
movie theaters would not need to buy additional devices in order to 
comply with these scoping requirements.
    In consideration of the comments received and the Department's 
independent research, the Department has adjusted the required 
number of audio description devices to one device for every two 
auditoriums. The Department believes that the available data 
supports its view that the revised scoping ensures that movie 
theaters will have available an adequate number of devices without 
requiring movie theaters to purchase more equipment than is likely 
necessary. The final rule at renumbered Sec.  36.303(g)(4)(i) reads 
as follows: ``A public accommodation shall provide at its movie 
theaters a minimum of one fully operational audio description device 
for every two movie theater auditoriums exhibiting digital movies 
and no less than two devices per movie theater. When calculation of 
the required

[[Page 87384]]

number of devices results in a fraction, the next greater whole 
number of devices shall be provided.'' The Department has retained 
the provision in proposed Sec.  36.303(g)(3)(ii)(B) regarding the 
use of multi-channel assistive listening receivers to meet this 
requirement. The Department notes that if movie theaters are 
purchasing new receivers to replace existing single-channel 
receivers, they may choose to purchase two-channel receivers and 
then use them to meet both their requirements to provide assistive 
listening receivers and audio description devices if use of the two-
channel receivers is compatible with their audio description and 
assistive listening systems. The Department does not, however, 
intend this provision to discourage movie theaters from using 
induction loop systems for sound amplification while using a 
different system for transmission of audio description. Renumbered 
Sec.  36.303(g)(4)(ii) states that ``[a] public accommodation may 
comply with the requirements in paragraph (g)(4)(i) by using the 
existing assistive listening receivers that the public accommodation 
is already required to provide at its movie theaters in accordance 
with Table 219.3 of the 2010 Standards, if those receivers have a 
minimum of two channels available for sound transmission to 
patrons.''

Section 36.303(g)(5) Performance Requirements for Captioning Devices 
and Audio Description Devices

    In the NPRM, the Department proposed performance requirements 
for the individual devices used by movie patrons at their individual 
seats. Proposed Sec.  36.303(g)(2)(iii)(B) stated that the 
individual devices needed to be adjustable; be available to patrons 
in a timely manner; provide clear, sharp images; be properly 
maintained; and be easily usable by the patron in order to ensure 
effective communication.
    While the comments were generally supportive of the existence of 
performance requirements, there were differences of opinion 
expressed about the specifics of this provision. Some commenters 
supported the Department's language, but others expressed concern 
that the requirements as written were vague and subjective. For 
example, a few commenters proposed that the Department define 
specific quantifiable and technical standards, and several 
commenters suggested that the Department develop a program to 
encourage the development of better accessibility technology due to 
their concerns associated with the design and quality of current 
technology.
    The Department also received conflicting comments with respect 
to adding requirements beyond those proposed in the NPRM. Several 
commenters suggested that the Department require captioning devices 
to have an adjustable font size while many disagreed, stating that 
an adjustable font size requirement would be problematic. Other 
commenters believed that the Department should require that all 
devices be clean, in addition to being available and functional. 
Commenters also suggested requiring quality assurance procedures, 
frequent testing, and regular maintenance schedules to ensure that 
the devices are functional and deliver complete and accurate 
captions and audio description. One commenter encouraged the 
Department to require that movie theaters maintain the most recent 
technology in a range of device styles and consult with customers 
and consumer groups to decide which devices to purchase. Although 
the NPRM language focused on captioning devices, many of the 
comments urged the Department to ensure that both captioning and 
audio description devices are maintained and readily available.
    After considering all comments, the Department has decided to 
retain the performance requirements as proposed in the NPRM with 
minor structural edits and to make clear that the requirements for 
maintenance and timely availability apply to both types of devices. 
The Department declines to impose any additional requirements 
related to ensuring the functionality of the captioning and audio 
description devices provided by movie theaters. The rule imposes the 
responsibility on movie theaters to ensure that the equipment is 
fully operational (meets all of the performance requirements in the 
regulation) and available. The Department believes that movie 
theaters are able to determine the best approach for ensuring 
compliance with the regulatory requirements and notes that Sec.  
36.211(b) (Maintenance of accessible features) ``does not prohibit 
isolated or temporary interruptions in service or access due to 
maintenance or repairs.''
    The Department also declines to include specific technical 
specifications regarding the captioning and audio description 
devices. The Department notes that its approach to performance 
requirements for captioning and audio description devices is similar 
to the approach the Department took with respect to performance 
standards for video remote interpreting services. See Sec.  
36.303(f).
    The Department also declines to impose an obligation that movie 
theaters must upgrade to the most recent technology. While the 
Department is in favor of technological development, such a 
requirement is beyond the scope of this regulation. Additionally, 
the Department believes that many of the concerns about current 
devices raised by commenters (e.g., poor power connection or poor 
signal) are adequately addressed by the requirements in paragraphs 
(g)(3) through (5)--that devices be fully operational and 
maintained.
    Renumbered Sec.  36.303(g)(5) of the final rule retains the 
performance requirements proposed in the NPRM, but it has been 
restructured for clarity.

Section 36.303(g)(6) Alternative Technologies

    Although commenters on the 2010 Advance Notice of Proposed 
Rulemaking, 75 FR 43467 (July 26, 2010) (ANPRM), encouraged the 
Department to require open movie captioning at movie theaters, the 
Department declined to make such a proposal in the NPRM, noting that 
in the debate leading up to passage of the ADA, the House Committee 
on Education and Labor explicitly stated that ``[o]pen-captioning, 
for example, of feature films playing in movie theaters, is not 
required by this legislation.'' H.R. Rep. No. 101-485, pt. 2, at 108 
(1990). The Senate Committee on Labor and Human Resources included a 
statement in its report on the ADA to the same effect. S. Rep. No. 
101-116, at 64 (1989). As the House Committee also recognized, 
however, ``technological advances * * * may require public 
accommodations to provide auxiliary aids and services in the future 
which today would not be required because they would be held to 
impose undue burdens on such entities.'' H.R. Rep. No. 101-485, pt. 
2, at 108.
    The Department included a provision in the NPRM giving movie 
theater owners and operators the choice to use other technologies to 
comply with the captioning and audio description requirements of 
this rule. Proposed Sec.  36.303(g)(2)(ii) provided that ``[m]ovie 
theaters may meet their obligation to provide captions to persons 
with disabilities through use of a different technology, such as 
open movie captioning, so long as the communication provided is as 
effective as that provided to movie patrons without disabilities. 
Open movie captioning at some or all showings of movies is never 
required as a means of compliance with this section, even if it is 
an undue burden for a theater to exhibit movies with closed movie 
captioning in an auditorium.''
    Commenters disagreed on whether this provision struck an 
appropriate balance between the cost to movie theaters, the benefit 
to individuals with hearing and vision disabilities, and the impact 
on the movie-going experience for individuals without disabilities. 
The majority of comments on this provision concerned open movie 
captioning. Although some commenters expressed concern that an open-
movie-captioning requirement would have an impact on the cinematic 
experience of hearing patrons, most commenters argued that the 
Department should require open movie captioning. Several open-movie-
captioning requirements were proposed by commenters, including: 
Requiring open movie captioning at 100 percent of showings; 
requiring one open-captioned movie per day; requiring dedicated 
open-captioned auditoriums; or requiring open movie captioning if 
closed movie captioning is unavailable for any reason. One commenter 
who supported an open-movie-captioning requirement asserted that 95 
percent of the deaf and hard of hearing community prefers open movie 
captioning to the use of captioning devices.
    The commenters proposing an open-movie-captioning requirement 
ultimately disagreed with the Department's interpretation of the 
legislative history as indicating congressional intent that the ADA 
did not require the provision of open movie captions at movie 
theaters. One commenter reasoned that because modern open movie 
captioning is significantly different from the open movie captioning 
available in 1990, the legislative history on this point represents 
a latent ambiguity. Therefore, in this commenter's view, the 
Department is not bound by the legislative history concerning open 
movie captioning and is free to require it. Other commenters, 
however, agreed with the

[[Page 87385]]

Department's statement in the NPRM and argued that because the 
legislative history states that open movie captioning is not 
required as a means of compliance with the ADA, the rule should not 
mandate any conditions concerning open-captioned showings.
    In response to the Department's questions concerning the 
parameters of the option to provide open movie captioning rather 
than closed movie captioning, several commenters suggested that the 
Department define what constitutes a ``timely request'' when a movie 
patron requests open movie captioning. These commenters provided a 
variety of suggestions, which ranged from the specific (e.g., 1 hour 
or 1 day before the showing) to the ambiguous (e.g., it should be 
reasonably easy).
    Other comments also addressed whether the Department adequately 
addressed new technology. One commenter agreed that the ``different 
technology'' language encompassed any future technology, but further 
suggested that the effectiveness of new technologies should be 
judged from the baseline of ``as effective as captioning and/or 
audio description devices.'' Other commenters disagreed and 
criticized the rule for not addressing other currently available 
technologies, such as hearing loop systems, 
InvisivisionTM glasses, or smart phone applications.
    After considering all of the comments, the Department has 
decided to retain the option to comply with the captioning and audio 
description requirements of this rule through the use of any other 
technology that is or becomes available to provide effective 
communication to patrons with hearing and vision disabilities, 
including open movie captioning. The Department has clarified, 
however, that in those circumstances where a public accommodation 
chooses to use open movie captioning at all showings of all movies 
available with captioning or at all times it receives a request to 
turn on open movie captions prior to the start of the movie, it is 
not also required to comply with the specific requirement to obtain 
captioning devices. However, if a public accommodation only makes 
open movie captioning available to patrons who are deaf or hard of 
hearing at some showings of movies available with captioning, it 
will still have to comply with the requirements to provide 
captioning devices because it must provide effective communication 
at all showings of all movies available with captioning.
    The Department has made other changes to the structure and 
language of this provision in response to comments and to better 
preserve the intent and longevity of this paragraph. The final rule 
now reads ``through any technology,'' instead of ``through use of 
different technology.'' Although the Department declines to endorse 
specific technologies, the Department believes that the revised 
language better articulates the purpose of this paragraph to 
encompass current and future technologies that may serve individuals 
with hearing and vision disabilities. The requirement that public 
accommodations provide auxiliary aids and services to ensure 
communication as effective as that provided to movie patrons without 
disabilities remains unchanged as that is the standard for effective 
communication required by Sec.  36.303(c). See 28 CFR part 36, app. 
C (explaining that public accommodations must provide appropriate 
auxiliary aids and services ``to ensure that communication with 
persons with disabilities is as effective as communication with 
others'').
    The Department maintains its view that Congress did not intend 
the ADA to require movie theaters to provide open movie captioning. 
Although the technology to provide open movie captioning has changed 
and enables movie theaters to provide the service more easily, open 
movie captioning as it exists today remains visible to all movie 
patrons and has not changed in this respect. As a result, the 
Department's position remains consistent with the legislative 
history on this point, and the final rule retains the language (with 
some minor edits) in proposed Sec.  36.303(g)(2)(ii), which provided 
that ``[o]pen movie captioning at some or all showings of movies is 
never required as a means of compliance with this section, even if 
it is an undue burden for a theater to exhibit movies with closed 
movie captioning in an auditorium.'' In the final rule, however, the 
Department has moved this language to new Sec.  36.303(g)(10).
    The revised provision addressing other technologies, renumbered 
in the final rule as Sec.  36.303(g)(6), enables a public 
accommodation to meet its obligation to provide captioning and audio 
description through alternative technologies that provide effective 
communication for movie patrons with hearing and vision 
disabilities. Section 36.303(g)(6) further provides that a public 
accommodation may use open movie captioning as an alternative to 
complying with the captioning device scoping requirements of this 
rule by providing open movie captioning at all showings, or whenever 
requested by or for an individual who is deaf or hard of hearing.

Section 36.303(g)(7) Compliance Date for Providing Captioning and Audio 
Description

    In the NPRM, the Department proposed at Sec.  36.303(g)(4)(i) 
that all movie theaters with auditoriums displaying digital movies 
must comply with the requirements of the rule within 6 months of the 
publication date of the final rule. The Department also proposed to 
give movie theaters that converted their auditoriums with analog 
projection systems to digital projection systems after the 
publication date of the rule an additional 6 months from the date of 
conversion to comply with the rule's requirements. Although the 
Department expressed the belief that 6 months was sufficient time 
for movie theaters to order and install the necessary equipment, 
train employees on how to use the equipment and assist patrons in 
using it, and notify patrons of the availability of these services, 
the Department requested public comment on the reasonableness of a 
6-month compliance date.
    The Department received many comments both against and in favor 
of the proposed 6-month compliance date. A minority of comments from 
a few disability advocacy groups and a few private citizens 
supported the proposed 6-month compliance date. These commenters 
asserted that because most movie theaters had already committed to 
providing captioning and audio description to their patrons by the 
end of 2014, the 6-month compliance date was, in their view, 
reasonable.
    The vast majority of commenters, however, asserted that 6 months 
was not enough time for the remaining movie theaters to comply with 
the requirements of this rule. These comments raised concerns about 
manufacturers' ability to sustain the sudden, increased demand that 
the scoping requirements would likely create for captioning and 
audio description devices. Industry commenters stated that movie 
theaters already experience considerable delays between order date 
and delivery date and that, with increased demand and a limited 
supply, the prices of these devices would likely increase, 
especially for lower volume purchasers. Industry commenters further 
advised the Department that a trained technician must install the 
captioning and audio description equipment and that their experience 
indicates that there is a waiting period for such services. 
Commenters also expressed concern that the compliance date proposed 
in the NPRM was drastically different from the phased compliance 
date proposed in the ANPRM and that the Department's rationale for 
the change was insufficient.
    Finally, some commenters expressed concern that small movie 
theaters in particular would have difficulty complying with the 
requirements of the rule within the proposed 6-month compliance 
date. Commenters advised that small movie theaters would need 
additional time to raise the necessary funds or adjust their budgets 
in order to purchase the equipment.
    Based on these concerns, commenters offered a variety of 
alternative compliance dates. The Joint Comment suggested that the 
Department require movie theaters to issue purchase orders for the 
equipment within 6 months of the final rule's publication, but 
require fully functional and operational devices and trained staff 
either within 2 years of the final rule's publication or 6 months of 
system delivery, whichever came first. Other commenters suggested 
compliance dates ranging from 1 year to 4 years. One major movie 
theater chain in particular recommended an 18-month compliance date, 
stating that this is the amount of time that it currently takes to 
order and install the necessary equipment. Some commenters suggested 
a sliding compliance schedule based on a movie theater's gross 
revenue or a movie theater's size, and others suggested a phased 
compliance date similar to the schedule articulated in the ANPRM.
    In consideration of these comments and the Department's 
independent research, the Department agrees that 6 months may be an 
insufficient amount of time for movie theaters to comply with the 
requirements of paragraph (g) of this section, and the Department 
instead will require compliance beginning 18 months from the date of 
publication of the final rule. The Department believes that an 18-
month compliance period

[[Page 87386]]

sufficiently accounts for potential delays that may result from 
manufacturer backlogs, installation waitlists, and other 
circumstances outside a movie theater's control. This date also 
gives small movie theaters that are financially impacted as a result 
of the unrelated costs of digital conversion a sufficient amount of 
time to plan and budget accordingly. The Department declines to 
include a requirement that movie theaters issue purchase orders for 
the equipment within 6 months of the final rule's publication 
because such a requirement is unenforceable without imposing 
recordkeeping and reporting requirements.
    The final rule continues to provide additional time for movie 
theaters converting their auditoriums from analog projection systems 
to digital projection systems after the publication date of the 
final rule. Once the installation of a digital projection system is 
complete, meaning that the auditorium has installed the equipment 
needed to exhibit a digital movie, the movie theater has at least an 
additional 6 months to ensure compliance with the requirements of 
the rule and provide closed movie captioning and audio description 
when showing digital movies in that auditorium. Renumbered Sec.  
36.303(g)(7)(ii) states that ``[i]f a public accommodation converts 
a movie theater auditorium from an analog projection system to a 
system that allows it to exhibit digital movies after December 2, 
2016, then that auditorium must comply with the requirements in 
paragraph (g) of this section by December 2, 2018, or within 6 
months of that auditorium's complete installation of a digital 
projection system, whichever is later.'' The Department believes 
that this approach will provide movie theaters in the process of 
converting to digital projection after the publication date of the 
rule a sufficient amount of time to acquire the necessary equipment 
to provide captioning and audio description.

Section 36.303(g)(8) Notice

    The Department believes that it is essential that movie theaters 
provide adequate notice to patrons of the availability of captioned 
and audio-described movies. In the NPRM, the Department proposed at 
Sec.  36.303(g)(5) that movie theaters provide information regarding 
the availability of captioning and audio description for each movie 
in communications and advertisements intended to inform potential 
patrons of movie showings and times and provided by the theaters 
through Web sites, posters, marquees, newspapers, telephone, and 
other forms of communication.
    Commenters on the NPRM unanimously supported the inclusion of 
some form of a notice requirement in the final rule but differed on 
the scope of that requirement. Some commenters supported requiring 
notice in all places where a captioned or audio-described movie is 
advertised, and another commenter asked the Department to include as 
many forms of communication as possible in the language of the final 
rule, including mobile phone applications. These commenters reasoned 
that individuals who are deaf or hard of hearing, or blind or have 
low vision, should be able to find this information easily. Several 
other commenters, however, asked the Department to limit the notice 
requirement to the box office, ticketing locations, and the movie 
theater's Web site. Although such commenters raised concerns about 
the high cost associated with a requirement that covers all 
communications and advertisements, they offered no other rationale 
for why they were proposing a limited requirement.
    In addition to the scope of the requirement, commenters also 
addressed the form of the notice required. One commenter requested 
that the Department require a uniform notice by all movie theaters, 
and another commenter suggested that the Department require movie 
theaters to include within the notice the universal symbols for 
captioning and audio description as well as the type of device 
available.
    Other commenters pointed to industry realities in order to 
highlight their concerns with the proposed provision. Some 
commenters expressed concern that movie theaters would be liable for 
a third party's failure to include information about captioning and 
audio description availability in their communications although 
movie theaters lack control over these communications. Commenters 
also advised the Department that there may be circumstances where 
compliance with the notice requirement would be difficult for some 
types of media. These commenters contend, for example, that movie 
theaters often book a film without knowing whether it is captioned 
or audio-described and that print deadlines may materialize before 
that information is available.
    After considering these comments and the information available 
to the Department, the Department has revised its proposed notice 
language. The Department agrees that notice may not be necessary on 
all forms of communications and advertisements but disagrees that 
the notice obligation should be limited only to the box office, 
ticketing locations, and the movie theater's Web site. For example, 
telephone recordings serve an especially important medium of 
communication for individuals who are blind or have low vision and 
who may not utilize Web-based or print media to access information 
concerning movie showings. Similarly, newspapers serve an especially 
important medium of communication for individuals who may not use 
Web-based media generally. Moreover, according to the Department's 
research, movie theaters utilize proprietary mobile phone 
applications to inform potential patrons of movie showings and 
times, and some already advertise the availability of captioning and 
audio description devices on these applications.\2\ Therefore, the 
Department has decided to require movie theaters to provide notice 
on communications and advertisements provided at or on any of the 
following: The box office and other ticketing locations, Web sites, 
mobile apps, newspapers, and the telephone.
---------------------------------------------------------------------------

    \2\ The Department's research indicates that the following movie 
theater companies operate mobile phone applications and advertise 
the availability of captioning and audio description on these 
platforms: Regal Entertainment Group, AMC Theatres, Cineplex 
Entertainment, and Harkins Theatres. See, e.g., American Multi-
Cinema, Inc., AMC Theatres (Version 5.2.2, 2016) (mobile application 
software), available at https://itunes.apple.com/us/app/amc-theatres/id509199715?ls=1&mt=8 (last visited Sept. 12, 2016); Regal 
Cinemas, Inc., Regal--Movie Tickets and Showtimes for Regal Cinemas, 
United Artists and Edwards Theatres (Version 3.4.2, 2016) (mobile 
application software), available at https://itunes.apple.com/us/app/regal-cinemas/id502912815?mt=8 (last visited Sept. 12, 2016).
---------------------------------------------------------------------------

    The Department declines to require a specific form of notice to 
describe the availability of captioning or audio description. The 
Department notes that movie theaters already appear to be using a 
relatively uniform method of advising the public about the 
availability of captioning and audio description. A review of Web 
sites and newspaper advertising indicates that movie theaters 
routinely use ``CC'' and ``OC'' to indicate the availability of 
closed and open movie captioning and ``AD'' or ``DV'' to indicate 
the availability of audio description.
    As the Department specifically noted in the NPRM and makes clear 
in the final rule, the rule does not impose obligations on 
independent third parties that publish information about movies, and 
these third parties will not face liability under the ADA if they 
fail to include information about the availability of captioning and 
audio description at movie theaters.
    Renumbered Sec.  36.303(g)(8) of the final rule requires that 
whenever a public accommodation provides captioning and audio 
description in a movie theater auditorium exhibiting digital movies 
on or after January 17, 2017, its notices of movie showings and 
times, provided at the box office and other ticketing locations, on 
Web sites and mobile apps, in newspapers, and over the telephone, 
must inform potential patrons of the movies that are being shown 
with captioning and audio description. The final rule further 
provides that this obligation does not extend to third parties that 
provide information about movie theater showings and times, as long 
as the third party is not under the control of the public 
accommodation.
    This provision applies to movie theaters once they provide 
captioning and audio description for digital movies on or after the 
effective date of the rule, January 17, 2017. Thus, movie theaters 
that already show digital movies with closed movie captions and 
audio description must comply with this provision as soon as the 
rule takes effect.

Section 36.303(g)(9) Operational Requirements

    In response to the ANPRM, the Department received a significant 
number of comments from individuals with disabilities and groups 
representing persons who are deaf or hard of hearing and who are 
blind or have low vision strongly encouraging the Department to 
include a requirement that movie theater staff know how to operate 
captioning and audio description equipment and be able to 
communicate with patrons about the use of individual devices. Having 
considered those

[[Page 87387]]

comments, the Department included in the NPRM proposed Sec.  
36.303(g)(6), which required movie theaters to ensure that at least 
one individual was on location at each facility and available to 
assist patrons whenever showing a captioned or audio-described 
movie. The proposed Sec.  36.303(g)(6) further required that such 
individual be able to operate and locate all of the necessary 
equipment and be able to communicate effectively with individuals 
with hearing and vision disabilities about the uses of, and 
potential problems with, the equipment.
    All of the comments on the NPRM that addressed this proposed 
language acknowledged that staff training regarding the operation of 
equipment is vital to the proper functioning of the rule. A number 
of commenters stated that on numerous occasions when they attempted 
to go to a movie advertised as having captioning or audio 
description, there was no staff available who knew where the 
captioning devices were kept or how to turn on the captioning or 
audio description for the movie. Many of these commenters indicated 
that they were unable to experience the movie fully because of the 
lack of trained personnel, even if the auditorium was properly 
equipped and the movie was actually available with captioning or 
audio description.
    A handful of commenters requested that the Department expand its 
proposed operational requirement, emphasizing concerns about movie 
theater staff's current knowledge concerning the operation of 
available equipment. One commenter encouraged the Department to 
specifically require all movie theater personnel to be properly and 
uniformly trained in providing such services, and other commenters 
suggested that all movie theater personnel be trained as to the 
availability of these services. Other comments encouraged the 
Department to enumerate specific requirements to ensure that movie 
theater staff is capable of operating the captioning and audio 
description equipment, including a requirement that management 
document employee training and a requirement that employees receive 
periodic refresher courses.
    A few commenters questioned the need for the proposed language 
in Sec.  36.303(g)(6)(iii), which required movie theaters to 
``[c]ommunicate effectively with individuals who are deaf or hard of 
hearing and blind or have low vision regarding the uses of, and 
potential problems with, the equipment for such captioning or audio 
description.'' One commenter asserted that an ``effective 
communication'' requirement in the proposed paragraph (g)(6)(iii) 
was superfluous given the overarching requirements in Sec.  
36.303(c). Other commenters supported the proposed language, stating 
that movie theater staff, including managers, often are not 
knowledgeable on how to properly communicate with individuals who 
are deaf, hard of hearing, blind, or have low vision. A State 
government also pointed out that in Camarillo v. Carrols Corp., 518 
F.3d 153, 157 (2d Cir. 2008) (per curiam), the Second Circuit held 
that a public accommodation's failure to provide employee training 
on effective communication with individuals with disabilities can 
constitute a violation of title III, specifically 42 U.S.C. 
12182(b)(2)(A)(iii).
    The final rule retains the operational requirements proposed in 
the NPRM in renumbered Sec.  36.303(g)(9) and adds the requirement 
that if a movie theater is relying on open movie captioning to meet 
the requirements of paragraph (g)(3), it must also ensure that there 
is an employee available at the theater who knows how to turn on the 
captions. The Department declines to add a specific requirement that 
all personnel be trained, as it believes that it is sufficient if a 
movie theater has at least one knowledgeable employee on location at 
all times to ensure that the service is available and provided 
without interruption. While the Department agrees that it would be a 
good idea for movie theaters to implement reasonable staff training 
programs and periodic refresher courses, the Department declines to 
take these recommendations and has not included in the final rule 
specific logistical requirements concerning movie theater staff 
training.
    The Department has decided to retain in the final rule the 
language in proposed Sec.  36.303(g)(6)(iii) requiring movie theater 
staff to effectively communicate with individuals who are deaf or 
hard of hearing, or blind or have low vision, regarding the uses of, 
and potential problems with, the captioning and audio description 
devices. The Department notes, however, that communicating 
effectively with patrons about the availability of captioning at a 
movie theater would not require a movie theater to hire a sign 
language interpreter. Communication with a person who is deaf or 
hard of hearing about the availability of these services or how to 
use the equipment involves a short and relatively simple exchange 
and therefore can easily be provided through signage, instructional 
guides, or written notes.
    Final Sec.  36.303(g)(9) requires that whenever a public 
accommodation provides captioning and audio description in a movie 
theater auditorium exhibiting digital movies on or after January 17, 
2017, at least one theater employee must be available to assist 
patrons seeking or using the captioning or audio description 
equipment. The employee must be able to quickly locate and activate 
the necessary equipment; operate and address problems with the 
equipment prior to and during the movie; turn on the open movie 
captions if the movie theater is relying on open movie captions to 
meet its effective communication requirements; and communicate 
effectively with individuals with disabilities about how to use, 
operate, and resolve problems with the equipment.
    This provision applies to movie theaters once they provide 
captioning and audio description for digital movies on or after the 
effective date of the rule, January 17, 2017. Thus, movie theaters 
that already show digital movies with closed movie captions and 
audio description must comply with this provision as soon as the 
rule takes effect.

Section 36.303(g)(10)

    Section 36.303(g)(10) in the final rule provides that ``[t]his 
section does not require the use of open movie captioning as a means 
of compliance with paragraph (g), even if providing closed movie 
captioning for digital movies would be an undue burden.'' The NPRM 
proposed similar language at Sec.  36.303(g)(2)(ii). See discussion 
of comments on final Sec.  36.303(g)(6), supra.

    Dated: November 21, 2016.
Loretta E. Lynch,
Attorney General.
[FR Doc. 2016-28644 Filed 12-1-16; 8:45 am]
BILLING CODE 4410-13-P