NEWSReport No. CS 97-22 CABLE SERVICES ACTION August 7, 1997 COMMISSION ADOPTS RULES FOR VIDEO CLOSED CAPTIONING (MM DOCKET 95-176) The Commission has adopted an order (FCC 97-279) establishing rules to implement the closed captioning requirements of the Telecommunications Act of 1996. The 1996 Act required the Commission to adopt, by August 8, 1997, rules and implementation schedules for captioning of video programming ensuring access to video programming by persons with hearing disabilities. This order implements Section 305 of the 1996 Act which added a new Section 713, Video Programming Accessibility, to the Communications Act. These rules will increase the amount of closed captioned video programming available to the more than 22 million Americans with hearing disabilities. Congress generally required that video programming be closed captioned, regardless of distribution technology, to ensure access to persons with hearing disabilities. Congress also recognized that in some situations requiring that programming be closed captioned might prove to be an undue burden on video programming providers or owners and authorized the Commission to exempt classes of programs or services for which provision of video programming would be economically burdensome. Some of the key elements in the order adopted today include: Video programming distributors will be responsible for compliance with captioning requirements. This is the most efficient and focused way to ensure compliance. Video programming distributors include all entities who provide video programming directly to customers' homes, regardless of distribution technology used (i.e.,broadcasters, cable operators, MVPDs and other). (over) That new programming (video programming first published or exhibited on or after January 1, 1998) is made "fully accessible," as required by Section 713. The rules establish an 8 year transition period and define full accessibility as the closed captioning of 95% of nonexempt new programming. Compliance will be measured on a channel-by-channel basis for MVPDs and will be measured over each calendar quarter. Three benchmarks are established during the transition period. These benchmarks are based on average amounts of required captioning of approximately 5 hours per day after 2 years, 10 hours per day after 4 years and 15 hours per day after 6 years. During this transition period if these closed captioning requirements exceed the number of hours of nonexempt new programming on a channel during the calendar quarter, 95% of the nonexempt new programming on a channel must contain captions. The Commission will also require video programming providers to continue to provide closed captioning at a level substantially the same as the average level of captioning that they provided during the first six months of 1997, even if the amount of captioned programming exceeds that required under the benchmarks. That the accessibility of pre-rule programming (video programming first published or exhibited before January 1, 1998) is "maximized" through the provision of closed captions, as required by Section 713. With respect to pre-rule programming that does not meet any of our criteria for exemption, at least 75% of such programming must contain closed captions at the end of a ten year transition period. Compliance will be measured on a per-channel, quarterly basis. The Commission expects that the amount of captioning of such programming will increase incrementally over the transition period and does not set specific benchmarks for pre-rule programming. During the transition period the Commission will monitor distributor's efforts to increase the amount of captioning to determine whether channels are progressing toward the 75% requirement. The Commission also will reevaluate its decision to determine whether specific benchmarks are necessary to increase captioning and whether the 75% threshold for maximizing the accessibility of pre-rule programming is the appropriate amount to meet the goals of the statute. Exemptions based on economic burden: The rules exempt from our closed captioning requirements several specific classes of programming for which such requirements would be economically burdensome. These include: non-English language programming, primarily textual programming, programming distributed late at night, interstitial announcements, promotional programming and public service announcements, certain locally-produced and distributed programming, non-vocal musical programming, ITFS programming and programming from new networks. The rules further exempt any video programming provider from closed captioning requirements where the provider has annual gross revenues of less than three million dollars. Advertisements of less than 5 minutes are not included in the definition of covered programming here. The rules also permit some smaller video programming providers to caption less than the specified benchmark amounts of their programming by permitting them to cap their spending on closed captioning based on their gross revenues. Exemptions based on existing contracts: The rules will exempt any programming subject to a contract in effect on February 8, 1996, for which compliance with the closed captioning requirements would constitute a breach of contract. Exemptions based on undue burden: The Commission will consider petitions for exemption from the closed captioning rules if the requirements would impose an undue burden based on statutory criteria. Standards for quality and accuracy: Video programming distributors will be required to deliver intact the closed captioning they receive as part of the programming they distribute to viewers, where the captions do not require reformatting. Video programming distributors must maintain and monitor their equipment to ensure the technical quality of the closed captioning they transmit. The Commission will not adopt standards for the non-technical aspects of quality at this time. Enforcement process: The rules will be enforced through a complaint process. Complaints alleging violation of the closed captioning rules must first be directed in writing to the video programming distributor responsible for distribution of the programming. If a video programming distributor fails to respond to a complaint or a dispute remains following this initial procedure, a complaint may then be filed with the Commission. Action by the Commission August 7, 1997, by Order (FCC 97-279). Chairman Hundt, Commissioners Quello, Ness and Chong, with Chairman Hundt and Commissioner Chong issuing separate statements. - FCC - News Media Contact: Morgan Broman at (202) 418-2358 Cable Services Bureau Contact: Marcia Glauberman at (202) 418-7200; Cable Services Bureau TTY: (202) 418-7172 SEPARATE STATEMENT OF CHAIRMAN REED E. HUNDT Re: MM Docket No. 95-176 In the Matter of Closed Captioning and Video Description of Video Programming; Implementation of Section 305 of the Telecommunications Act of 1996; Video Programming Accessibility The Telecommunications Act of 1996 mandated higher quality telecommunications services and expanded access to the American public. One of the most important dimensionsof this congressional intent is Section 713, that requires closed captioning as a means to expand video programming accessibility for people with hearing disabilities. In fulfillment of the statute's intent, today's decision by the Commission will give people with hearing disabilities greater access -- to the news, entertainment, sports, and the other many benefits provided by television -- whether they receive TV by broadcast, cable, DBS, MMDS, OVS, or other multichannel video programming distributors. Our rules will ensure that when a person with a hearing disability turns on the television set, he or she will have closed captioned programs available from morning to night, across the different channels of programming provided by a multichannel video programming provider. the majority of the Commission has set a pace for transition to an era in which most programs will be captioned that is slower than I would prefer. nevertheless it is good news that we have set a schedule that will ultimately ensure that Americans with hearing disabilities will have access to important video services and programming. The marketplace does not always generate a necessary and appropriate amount of the sort of benefits from the communications revolution that help preserve our unity as a nation, as a society, as a complex group of mutually involved citizens, as a fantastically varied and extended family of Americans. The benefits not necessarily produced by the pro-competitive doctrine this Commission justly has prided itself on during the last four years include, among other things, children's educational television, free time for political debate, communications connections in classrooms, and access to communications for people with disabilities. That these benefits be made available is thought by Congress, the Administration, and this Commission to be important not only for their direct constituencies but for all of us, on the theory stated long ago by John Donne -- never send to know for whom the bell tolls; it tolls for thee. Closed captioning also demonstrates one of the remarkable facts about doing the right thing. The extent of the benefits can surprise. Closed captioning, it turns out, benefits not only people with hearing disabilities, but also children learning to read, people learning English as a second language, and even travellers in airports and exercisers in gyms who can see but not hear the television. Closed captioning also proves that markets do wondrous things when they are jump- started by a modest governmental intervention. Even the existing first-generation governmental action related to closed captioning and decoders have helped encourage new technologies that in time will produce much cheaper and more sophisticated means of providing closed captioning than currently available. These new technologies make me completely confident that the Commission in time can require that all television programs be closed captioned in light of the fact that such a requirement will be an insignificant economic burden relative to the benefits to a huge and varied audience. Our decision today establishes several important principles. First, our rules set dates certain by which material must generally be closed captioned. New programming must be fully captioned within eight years of our rules, and benchmarks along the way ensure that the amount of captioning increases as we move toward the transition's end. At the same time, the "no backsliding" rule ensures that the amount of captioning stays at least at the level that the deaf and hearing-disabled community has come to expect. Our rules also require that older, or "pre-rule" programming be 75% captioned at the end of ten years. Intermediate benchmarks would have been a sound idea. However, even without them, our decision emphasizes that we fully expect to see an increase in the captioning of pre-rule programming as the transition moves forward. Furthermore, we will consider imposing benchmarks if such programming is not being captioned. Second, we have taken steps to simplify the determination of whether an exemption is warranted due to economic burden. Our rule that an entity need not spend more than 2% of annual gross revenues on closed captioning assures that even entities that cannot assume the full captioning responsibility nevertheless do some captioning. And, as the price of captioning falls with the changes in the market and improved technology, that 2% of gross revenues will purchase more captioning. We exempt any provider that has annual gross revenues of less than $3 million, because 2% of such revenues would be so low as to place a burden on the entity that would not be outweighed by the benefit to people with hearing disabilities. Third, we take steps to ensure that programming that has been captioned continues to be shown with its captions. Our rules require that where a captioned program has not been reformatted, its captions must be shown. We refrain at this time from imposing a hard and fast requirement that captioned, reformatted programming must carry captions. (In my view, this is probably a mistake on our part, but it can be revisited). But we make clear that we expect that such previously captioned material will continue to be captioned. Our decision today emphasizes that if this result does not occur, the Commission will consider imposing rules to ensure accessibility. Fourth, our decision provides for future review to ensure that our rules stay current with the changes that will surely occur in the marketplace -- in terms of technological ability, labor capacity, and provision of accessibility. We anticipate that the implementation of the statute will stimulate growth in the captioning field, and a concomitant drop in price. Review will allow our rules to keep pace with developments in the marketplace and in society. Review will allow us to consider a number of issues, such as whether the percentages of captioning requirements are set correctly, whether Electronic News Room is a reasonable alternative to real-time captioning, whether non-English language captioning should be required, whether our specific exemptions uphold the spirit of Congress' intent to maximize the accessibility of video programming, and whether our enforcement process is realistic and efficient. Our decision also commits us to initiating a proceeding to examine the captioning of vital emergency information, to ensure that this critical information is accessible to persons with hearing disabilities. As I indicated above, I would have preferred to have these rules be more aggressive in providing swifter accessibility to much more TV programming for our nation's 20 million persons with hearing disabilities. I have joined the vote today because, for the most part, the item heads in the right direction. But I think it important to note that, in my view, eight years is more than a reasonable amount of time for a transition to captioning of all kinds of programming. I would have imposed the same eight-year transition period on both new and older, "pre-rule" programming. I also would have set the first benchmark in the transition for new programming earlier. Furthermore, although 75% in ten years marks a step forward in increased access to older video programming for people with hearing disabilities, I believe the Commission should have gone further by requiring that programming that pre-dates our rules should, like new programming, be fully captioned in time. It is important to note that while we now set the percentage at 75%, our decision holds that a review during the transition period will permit us to consider whether 75 % is, in fact, the appropriate percentage or whether, as I believe, it should be higher. I also believe that rather than exempting now, in this Report and Order, some specific categories of programming, we should have waited until later in the transition to determine whether such specific relief is necessary. I appreciate the concerns of those who fear that the cost of captioning might cause valued programming to be dropped. Such an unintended consequence must be avoided. However, our transition rules in fact avoid that result by permitting flexibility in setting captioning priorities. Therefore, many of these concerns will not arise ever or at any rate not until much later during the transition. Therefore the Commission simply does not know enough now to decide whether and what specific exemptions may be necessary. I also would have imposed a captioning requirement on advertising -- at least national asking -- in light of the evidence in the record suggesting this requirement is absolutely economically feasible. Closed captioning will allow people with hearing disabilities to benefit fully from information and entertainment that television provides so amply,universally, and without charge. The significance of this rule to at least a tenth of our people cannot be exaggerated. We have to a large degree taken a step today of which we, and everyone in the television business, can be proud. If we should have done more today, then more can be done by future Commissions. August 7, 1997 SEPARATE STATEMENT OF COMMISSIONER RACHELLE B. CHONG Re: Closed Captioning and Video Description of Video Programming, Implementation of Section 305 of the Telecommunications Act of 1996, Report and Order, MM Docket No. 95-176. There is an inherent tension in new Section 713 of the Communications Act, which orders new closed captioning and video description requirements for video programming throughout the nation. While the statute mandates full accessibility for new programming and requires a "maximization" of accessibility of pre-rule programming, the statute also makes clear that undue economic burdens should not be imposed on program providers by these rules, and grants the Commission broad discretion to order exemptions. Balancing these competing directives was a difficult task, and while I generally feel that we ultimately achieved the right balance, I do have some residual concerns about our new rules. Overall, I am pleased to support the decision because it will greatly increase the accessibility of video programming for the deaf community. As a result of today's decision, the amount and variety of closed captioned video programs will dramatically increase over time. This will have tremendous benefits for the members of the deaf community, who will enjoy a fuller television experience and more easily receive crucial news and information. As a result of our decision today, I am hopeful that closed captioning will become an integral part of the video production process. In crafting our rules, we tried strike a reasonable balance between the benefits that will flow from more closed captioning and the statute's mandate that we not place an undue economic burden on program providers. In particular, I had concerns about whether the economic burdens associated with the captioning requirements might have an inadvertent, negative effect on the diversity of programming. Specifically, some types of very worthy new programming that richly contribute to the diversity of our programming have very fragile support systems, due to the fact that the programming only attracts a small audience, has little repeat value, or is filmed on a shoestring production budget. Such programs might include the airing of a local high school football game, a community parade, a foreign language film, a locally produced children's educational program, or a city council debate. I believe that several of the exemptions that we adopt today will help ensure that this programming will not be driven off the air by a well-intentioned captioning requirement. I do not believe that anyone, including the deaf community, would have benefitted if our captioning requirements resulted in the loss of such programming. I was also concerned about the impact that our pre-rule programming requirements might have on program diversity. While encouraging us to "maximize" captioning of this older programming, Congress also appeared concerned that pre-rule programming not be relegated to the dusty archives due to the cost of captioning. As a practical matter, this older pre-rule programming is often relied upon by new cable networks, because such programs are relatively inexpensive and well-received by audiences. I am concerned that an overly stringent pre-rule programming captioning requirement may inadvertently have the effect of discouraging new cable networks whose business plan relied on this older programming. Although the captioning requirements we adopted for pre-rule programming provide more flexibility to programming providers than our rules for new programming, I remain concerned that our requirements may be too onerous. In particular, our requirement that 75% of pre-rule programming be captioned might be excessive. I believe that we ought to monitor the impact of this requirement carefully to ensure we are not overburdening pre-rule programming unduly. When I stepped back from our final product, I became concerned that, in our attempt to address the many legitimate concerns raised by the commenters and to strike the balance mandated by Congress, the rules we adopt today may be complex and difficult to apply. They appear over-regulatory in an era of deregulation. I am pleased, however, that our staff has committed to working with the programming providers and the deaf community to help them understand and work with the rules. While the decision reflects a difficult compromise that may not fully please either the deaf community or programming providers, in the end, I believe it to be a fair compromise.