Federal Register, Volume 81 Issue 232 (Friday, December 2, 2016)

[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

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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]]

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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.

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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.
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\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.
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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.
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\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.
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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.
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\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.''
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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.
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\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.''
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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.
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\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).
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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
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* 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.
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\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 $]
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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 (%)
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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
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* 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\
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\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).
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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\
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\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.
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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\
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\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.
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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).
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\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.
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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.
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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.

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[[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).
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\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).
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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,
Invisivision^TM 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