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FCC Requires Closed Captioning Of IP-Delivered Video Clips

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Released: July 14, 2014
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Federal Communications Commission

FCC 14-97

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of

)

)

Closed Captioning of Internet Protocol-Delivered

)

MB Docket No. 11-154

Video Programming: Implementation of the

)

Twenty-First Century Communications and Video

)

Accessibility Act of 2010

)

)

Closed Captioning of Internet Protocol-Delivered

)

Video Clips

)

SECOND ORDER ON RECONSIDERATION AND

SECOND FURTHER NOTICE OF PROPOSED RULEMAKING

Adopted: July 11, 2014

Released: July 14, 2014

Comment Date: (60 days after publication in the Federal Register)

Reply Comment Date: (90 days after publication in the Federal Register)

By the Commission: Chairman Wheeler and Commissioners Clyburn and Rosenworcel issuing separate

statements; Commissioner Pai concurring and issuing a separate statement; and Commissioner O’Rielly

approving in part, concurring in part and issuing a separate statement.

TABLE OF CONTENTS

Heading

Paragraph #

I. INTRODUCTION.................................................................................................................................. 1

II. BACKGROUND.................................................................................................................................... 4

III. DISCUSSION ........................................................................................................................................ 9

A. Threshold Issues Regarding Legal Authority and Procedure ........................................................ 10

B. Impact of Requiring Closed Captioning of Internet Protocol-Delivered Video Clips................... 16

C. Closed Captioning Requirements for Internet Protocol-Delivered Video Clips............................ 20

1. Covered Video Clips ............................................................................................................... 20

2. Compliance Deadline .............................................................................................................. 23

3. Video Clips of Live and Near-Live Programming.................................................................. 28

4. Video Clips in the Online Library before the Compliance Deadline ...................................... 31

5. Application of General IP Closed Captioning Rules to Video Clips....................................... 34

IV. SECOND FURTHER NOTICE OF PROPOSED RULEMAKING.................................................... 36

A. Third Party Video Programming Providers and Distributors ........................................................ 37

B. Grace Period for Live and Near-Live Video Clips ........................................................................ 42

C. Combinations of Video Clips and Content Not Televised with Captions (“Mash-Ups”).............. 44

D. Advance Video Clips..................................................................................................................... 47

V. PROCEDURAL MATTERS................................................................................................................ 51

A. Regulatory Flexibility Act ............................................................................................................. 51

B. Paperwork Reduction Act.............................................................................................................. 53

C. Congressional Review Act............................................................................................................. 55

D. Ex Parte Rules................................................................................................................................ 56

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E. Filing Requirements....................................................................................................................... 57

F. Additional Information .................................................................................................................. 60

VI. ORDERING CLAUSES....................................................................................................................... 61

APPENDIX A – Final Rules

APPENDIX B – Final Regulatory Flexibility Analysis

APPENDIX C – Initial Regulatory Flexibility Analysis

I.

INTRODUCTION

1.

One of the Commission’s priorities is to ensure that all individuals, especially individuals

with disabilities, are able to enjoy the full benefits of broadband technology, including the services that

broadband enables such as online video programming. Online viewing of video programming is

becoming increasingly significant, and one aspect of this development is that more and more consumers

are receiving news, sports, and entertainment programming in the form of online video clips.1

In this

Second Order on Reconsideration (“Video Clips Order”), as part of our continued implementation of the

Twenty-First Century Communications and Video Accessibility Act of 2010 (“CVAA”),2 we conclude

that clips of video programming covered by the statute must be captioned when delivered using Internet

protocol (“IP”) and set out a schedule of deadlines.

2.

When the Commission initially adopted IP closed captioning requirements pursuant to its

responsibilities under the CVAA it applied the requirements to full-length video programming and not to

video clips.3 The Commission said that it might in the future extend the IP closed captioning

requirements to video clips if it found that consumers who are deaf or hard of hearing are denied access to

critical areas of programming, such as news, because the programming is posted online as video clips.4 In

response to a petition for reconsideration filed by consumer groups, and at the Commission’s direction,

the Media Bureau issued a Public Notice seeking updated information on the closed captioning of IP-

delivered video clips, including the extent to which the industry has voluntarily captioned these clips.5

After reviewing the record compiled in this proceeding, we find that a significant percentage of video

clips continue to remain inaccessible to consumers who are deaf or hard of hearing. In addition, we have

reconsidered the Commission’s earlier interpretation of the statute and conclude that Congress intended

1 See, e.g., CEA News Release, Change is in the Air: U.S. Households Viewing TV Programming only via the

Internet are Poised to Surpass those Viewing only via Antenna, Finds New CEA Study, June 5, 2014, available at

https://www.ce.org/News/News-Releases/Press-Releases/2014/OTA-Study_060514.aspx (last visited June 11, 2014)

(citing the study’s finding that “viewership of video programming on connected devices continues to grow”); Global

Web Index, Chart of the Day from March 14, 2014, available at

https://www.globalwebindex.net/products/chart_of_the_day/14th-march-2014-77-percent-of-internet-users-

watching-video-clips (last visited June 11, 2014) (“We track the rising popularity of watching video clips. By the

end of 2013, 77% of [I]nternet users said they had done this in the last month – a figure which corresponds to more

than 1.152 billion people (up from 711 million back in early 2011).”); Consumer Groups, Report on the State of

Closed Captioning of Internet Protocol-Delivered Video Programming, MB Docket No. 11-154 and CG Docket No.

05-231 (May 16, 2013) (evaluating a variety of online video clips, including news clips and clips of entertainment

programming, to determine the volume of captioned online video clips).

2 Pub. L. No. 111-260, 124 Stat. 2751 (2010). See also Amendment of the Twenty-First Century Communications

and Video Accessibility Act of 2010, Pub. L. No. 111-265, 124 Stat. 2795 (2010) (making technical corrections to

the CVAA).

3 Closed Captioning of Internet Protocol-Delivered Video Programming: Implementation of the Twenty-First

Century Communications and Video Accessibility Act of 2010, Report and Order, 27 FCC Rcd 787, 816-18, ¶¶ 44-

48 (2012) (“IP Closed Captioning Order”).

4 Id. at 818, ¶ 48.

5 Media Bureau Seeks Comment on Application of the IP Closed Captioning Rules to Video Clips, Public Notice, 28

FCC Rcd 16699 (MB, 2013) (“Video Clips PN”).

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the IP closed captioning requirements to extend to all covered video programming including clips, but left

to our discretion the timeline for compliance with this requirement. Accordingly, to implement the statute

fully, and in furtherance of Congress’s intent to ensure that individuals who are deaf or hard of hearing

have better access to online video programming,6 we reconsider the Commission’s earlier decision and

revise our regulations to require the provision of closed captioning on video clips delivered using IP when

the programming was published or exhibited on television with captions. As discussed in Section III

below, this Video Clips Order imposes closed captioning requirements on IP-delivered video clips by

adopting rules that will:

Extend the IP closed captioning requirements to IP-delivered video clips if the video

programming distributor or provider7 posts on its website or application (“app”) a video clip of

video programming that it published or exhibited on television in the United States with captions,

regardless of the content or length of the video clip.

Pursuant to our authority to establish an appropriate schedule of deadlines for purposes of the IP

closed captioning requirements,8 adopt a compliance deadline of January 1, 2016 for “straight

lift” clips, which contain a single excerpt of a captioned television program with the same video

and audio that was presented on television, and January 1, 2017 for “montages,” which contain

multiple straight lift clips.

After the applicable deadlines, require IP-delivered video clips to be provided with closed

captions at the time the clips are posted online, except as otherwise provided.

For clips of video programming previously shown live or near-live on television with captions,9

require captions beginning July 1, 2017 and for the present time allow a grace period of 12 hours

after the live programming is shown on television and eight hours after the near-live

programming is shown on television before the clip must be captioned online.

Find that compliance with the new requirements would be economically burdensome for video

clips that are in the video programming distributor’s or provider’s online library before January 1,

2016 for straight lift clips, and January 1, 2017 for montages, and thus exempt this class of video

clips from coverage; and

Generally apply the IP closed captioning requirements to video clips in the same manner that they

apply to full-length video programming, which among other things means that the quality

requirements applicable to full-length IP-delivered video programming will apply to video clips.

6 See S. Rep. No. 111-386, 111th Cong., 2d Sess. at 1 (2010) (“Senate Committee Report”) (indicating that Congress

sought to “update the communications laws to help ensure that individuals with disabilities are able to fully utilize

communications services and equipment and better access video programming”); H.R. Rep. No. 111-563, 111th

Cong., 2d Sess. at 19 (2010) (“House Committee Report”) (same); 156 Cong. Rec. H6004 (daily ed. Jul. 26, 2010)

(statement of then-Rep. Markey) (noting the “whole series of legislative initiatives aimed at broadening the disabled

community’s access to technologies that can help them do things that most Americans take for granted”); id. at

H6005 (statement of Rep. Stearns) (“[I]t’s important that people with disabilities are not left behind, have access and

are afforded the opportunity to enjoy this wide variety of technology.”).

7 When we use the term “video programming distributor or provider” herein, we invoke the definition of that term in

the Commission’s IP closed captioning rules, which is “[a]ny person or entity that makes available directly to the

end user video programming through a distribution method that uses Internet protocol.” 47 C.F.R. § 79.4(a)(3).

8 47 U.S.C. § 613(c)(2)(B).

9 Industry refers to these video clips as “time-sensitive.” See infra n. 116 (defining “live programming” and “near-

live programming).

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3.

Additionally, in Section IV below, the attached Second Further Notice of Proposed

Rulemaking (“Further Notice”) explores the following four issues related to closed captioning of IP-

delivered video clips:

Application of the IP closed captioning rules to the provision of video clips by third party video

programming providers and distributors;

Whether in the future we should decrease or eliminate the 12-hour timeframe within which IP-

delivered video clips of video programming previously shown live on television must be

captioned and the eight-hour timeframe within which IP-delivered video clips of video

programming previously shown near-live on television must be captioned;

Application of the IP closed captioning requirements to files that contain a combination of one or

more video clips that have been shown on television with captions and online-only content that

has not (“mash-ups”); and

Application of the IP closed captioning rules to video clips that are added to the video

programming distributor’s or provider’s library on or after January 1, 2016 for straight lift clips

and January 1, 2017 for montages, but before the associated video programming is shown on

television with captions (“advance” video clips).

II.

BACKGROUND

4.

In the IP Closed Captioning Order, the Commission implemented Section 202 of the

CVAA by imposing closed captioning requirements on the owners, providers, and distributors of IP-

delivered video programming with respect to full-length video programming.10 The Commission defined

“full-length video programming” covered by the rules as video programming that appears on television

and is distributed to end users, substantially in its entirety, via IP.11 By “substantially in its entirety,” the

Commission “mean[t] to reference video programming that is distributed via IP as a complete video

programming presentation, such as an episode of a television show or movie.”12 Accordingly, “full-

length video programming” includes, for example, a full-length half-hour program that is missing a few

minutes when it is distributed via IP, as well as a full-length program that is posted online in its entirety in

multiple segments for easy viewing.13 The definition of “full-length video programming” excludes “video

clips,” which the Commission defined as excerpts of full-length video programming.14

5.

Although the Commission excluded video clips in the IP Closed Captioning Order, it

interpreted the legislative history of the CVAA as signaling Congress’s intent to leave open the extent to

10 IP Closed Captioning Order, 27 FCC Rcd at 816-18, ¶¶ 44-48; 47 C.F.R. § 79.4(b). When we use the term

“video programming owner” herein, we invoke the definition of that term in the Commission’s IP closed captioning

rules, which is the person or entity that either (i) licenses the video programming to a video programming distributor

or provider that makes the video programming available directly to the end user through a distribution method that

uses Internet protocol; or (ii) acts as the video programming distributor or provider, and also possesses the right to

license the video programming to a video programming distributor or provider that makes the video programming

available directly to the end user through a distribution method that uses Internet protocol. 47 C.F.R. § 79.4(a)(4).

11 IP Closed Captioning Order, 27 FCC Rcd at 816, ¶ 44; 47 C.F.R. § 79.4(a)(2). The CVAA defines “video

programming” as “programming by, or generally considered comparable to programming provided by a television

broadcast station, but not including consumer-generated media.” 47 U.S.C. § 613(h)(2). See also 47 C.F.R. §

79.4(a)(1).

12 IP Closed Captioning Order, 27 FCC Rcd at 816, ¶ 44.

13 Id. at 816-17, ¶ 45.

14 Id. at 816, ¶ 45; 47 C.F.R. § 79.4(a)(12).

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which the IP closed captioning rules should cover video clips at some point in the future.15 Hence, the

Commission indicated that it might in the future determine that the IP closed captioning requirements

should apply to video clips if necessary to provide access to this programming.16 Specifically, the

Commission stated, “If we find that consumers who are deaf or hard of hearing are not getting access to

critical areas of programming, such as news, because of the way the programming is posted (e.g., through

selected segments rather than full-length programs), we may reconsider this issue to ensure that our rules

meet Congress’s intent to bring captioning access to individuals viewing IP-delivered video

programming.”17

6.

In addition, although the Commission did not require closed captioning of IP-delivered

video clips, it encouraged video programming owners, providers, and distributors to provide closed

captions on such content where they are able to do so.18 In particular, the Commission “encourage[d] the

industry to make captions available on all TV news programming that is made available online, even if it

is made available through the use of video clips.”19 The Commission also said that it might find a

violation of the IP closed captioning rules if an entity exhibited a pattern of using video clips as a means

of avoiding its closed captioning obligations.20

7.

A coalition of consumer groups filed a Petition for Reconsideration of the IP Closed

Captioning Order, arguing, among other things, that the Commission should require captioning of IP-

delivered video clips.21 In an order responding to the Consumer Groups Petition, the Commission noted

that consumers were particularly concerned about the availability of captioned news clips, which tend to

be live or near-live.22 Nevertheless, because full-length live and near-live programming became subject

to the IP closed captioning requirements only about a month before Consumer Groups filed their petition,

the Commission expressed its expectation that entities subject to the IP closed captioning rules would

caption an increasing volume of video clips, particularly news clips, given that they would be developing

more efficient processes for the captioning of live and near-live programming.23 The Commission further

15 IP Closed Captioning Order, 27 FCC Rcd at 817, ¶ 48. Specifically, the language of both the Senate Committee

Report and the House Committee Report states that Congress “intends, at this time, for the regulations to apply to

full-length programming and not to video clips or outtakes.” Senate Committee Report at 13-14 (emphasis added);

House Committee Report at 30 (emphasis added). As discussed below, we now reconsider that interpretation of the

statute and legislative history, concluding instead that Congress intended to cover all video programming, as

defined, including clips, but allowed the Commission to give the industry more time to caption IP-delivered video

clips.

16 IP Closed Captioning Order, 27 FCC Rcd at 818, ¶ 48.

17 Id.

18 Id. at 817, ¶ 46.

19 Id. at 818, ¶ 48.

20 Id. at 817, ¶ 46.

21 Consumer Groups, Petition for Reconsideration of the Commission’s Report and Order, at iii, 1-17 (filed Apr. 27,

2012) (“Consumer Groups Petition”). We use the term “Consumer Groups” to reference the signatories of the

Consumer Groups Petition or a subset thereof: Telecommunications for the Deaf and Hard of Hearing, Inc.; National

Association of the Deaf; Deaf and Hard of Hearing Consumer Advocacy Network; Association of Late-Deafened

Adults; Hearing Loss Association of America; Cerebral Palsy and Deaf Organization; and Technology Access

Program at Gallaudet University. The Consumer Groups’ petition for reconsideration was published in the Proposed

Rules section of the Federal Register. See Petitions for Reconsideration of Action in Rulemaking Proceeding, MB

Docket No. 11-154; Rpt No. 2951, 77 Fed. Reg. 30,485 (2012).

22 Closed Captioning of Internet Protocol-Delivered Video Programming: Implementation of the Twenty-First

Century Communications and Video Accessibility Act of 2010, Order on Reconsideration and Further Notice of

Proposed Rulemaking, 28 FCC Rcd 8785, 8804, ¶ 30 (2013) (“IP Closed Captioning Order on Recon”).

23 Id.

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indicated that it would monitor industry actions on the captioning of IP-delivered video clips, and it

directed the Media Bureau to issue a Public Notice to seek updated information on the topic within six

months.24 If the record developed from the Public Notice “demonstrates that consumers are denied access

to critical areas of video programming due to lack of captioning of IP-delivered video clips,” the

Commission indicated that it might reconsider its decision not to subject video clips to the IP closed

captioning rules.25

8.

At the Commission’s direction, the Media Bureau issued a Public Notice seeking updated

information on the closed captioning of IP-delivered video clips, including the extent to which industry

has voluntarily captioned these clips.26 In the Public Notice, the Media Bureau asked whether the

Commission should require captioning of IP-delivered video clips, and it invited comment on any issues

relevant to this determination.27

Commenters representing both the industry and consumer groups

submitted detailed filings on these issues.

The record demonstrates the large volume of IP-delivered

video clips currently available to consumers, culled from a multitude of full-length video programs.28

III.

DISCUSSION

9.

As discussed fully below, we hereby reconsider our prior decision and conclude that the

CVAA covers video clips as well as full-length video programming shown online. Accordingly, at this

time we apply the IP closed captioning requirements to video clips if the video programming distributor

or provider posts on its website or app a video clip of video programming that it published or exhibited on

television in the United States with captions. Specifically, for “straight-lift” clips, which contain a single

excerpt of a captioned television program with the same video and audio that was presented on television,

the IP closed captioning requirements will apply beginning January 1, 2016. For “montage” clips, a

single file containing multiple straight lift clips, we adopt an extended compliance deadline of January 1,

2017.29 We find that it would be economically burdensome to apply the new requirements to video clips

that are in the video programming distributor’s or provider’s library before the relevant compliance

deadline, and accordingly we exempt such video clips from coverage.30 Further, we will require

24 Id.

25 Id.

26 Video Clips PN.

27 Id. at 16700-01. Comments were due on February 3, 2014, and replies were due on March 5, 2014. See Deadline

Extended for Comment on Media Bureau Public Notice on Application of the IP Closed Captioning Rules to Video

Clips, Public Notice, 29 FCC Rcd 440 (MB, 2014).

28 See, e.g., Comments of the Digital Media Association at 7 (“DiMA Comments”) (“One full-length program can be

chopped up into any number of clips, and [video programming distributors] routinely place online many clips from a

single full-length program. A [video programming distributor] could literally have hundreds of thousands or even

millions of video clips in its video catalogue.”); Reply Comments of the National Cable and Telecommunications

Association at 6 (“NCTA Reply”) (noting the “sheer volume of online video clips”); Letter from Diane B. Burstein,

Vice President and Deputy General Counsel, NCTA, to Marlene H. Dortch, Secretary, FCC, at 1 (Apr. 25, 2014)

(“NCTA Apr. 25 Ex Parte Letter”) (“We further explained that thousands of clips of varying lengths are created and

posted weekly.”).

29 We distinguish here between a single file containing multiple straight lift clips and situations where one or more

single files are played sequentially, such as through a playlist. For example, a video programming distributor might

automatically begin playing a related video file immediately after the initial video retrieved by the consumer

concludes, such as another news clip about the same topic or another highlight from the same sporting event. That

would not be an example of a montage, but rather, would be straight lift clips that are played in sequence.

30 As in the IP Closed Captioning Order, herein we use the term “library” to describe the collection of content a

video programming provider or distributor makes available to consumers online. In the Further Notice below, we

seek comment on application of the IP closed captioning requirements to video clips that are added to the video

programming distributor’s or provider’s library after the relevant compliance deadline but before the programming

is shown on television with captions (“advance” video clips).

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captioning for video clips of live and near-live programming beginning July 1, 2017, and we will permit

such clips to be posted online initially without captions, but require that captions be added to clips of live

programming within 12 hours and to clips of near-live programming within eight hours after the

conclusion of the television display of the associated video programming31 that contained the clip.32

Finally, we generally apply the Commission’s IP closed captioning rules for full-length programming,

including the quality requirements, to video clips.33

Below, before addressing the substance of our video

clips requirements, we first discuss threshold issues regarding legal authority and procedure, as well as

the benefits of requiring closed captioning for IP-delivered video clips.

A.

Threshold Issues Regarding Legal Authority and Procedure

10.

We find that the CVAA mandates that all “video programming delivered using Internet

protocol that was published or exhibited on television with captions after the effective date of such

regulations,” including clips of that programming, be provided with closed captioning. 34 The statutory

text, quoted above, does not distinguish between full-length video programming and video clips;

therefore, as explained below, we believe the statute is most reasonably interpreted as covering excerpts

of full-length programming as well as complete and substantially complete programs. To the extent the

IP Closed Captioning Order stated that the CVAA’s captioning provisions did not cover clips of video

programming or did not cover them until some future date, we reconsider and reject that statutory

interpretation. Rather, we find that video clips are included within the definition of video programming,

and thus the statute mandates that clips of video programming covered by the statutory definition be

captioned when delivered by IP.

11.

Clips of programming shown on television meet the statute’s definition of “video

programming,” which is “programming by, or generally considered comparable to programming provided

by a television broadcast station, but not including consumer-generated media (as defined in section 153

of this title).”35 As we stated in the IP Closed Captioning Order, “programming ‘that was published or

exhibited on television’ by definition constitutes ‘video programming,’ since anything that was published

or exhibited on television must be provided by, or be comparable to programming provided by, a

television broadcast station.”36 There is nothing in the definition of “video programming” that expressly

excludes video clips or excerpts of programming. Indeed, only one category of programming is expressly

excluded from the definition and that is “consumer-generated media,” a category not relevant for

purposes here. The CVAA does not further explain what is meant by programming that is “generally

considered comparable to programming provided by a television broadcast station.” However, nothing in

the statutory text suggests an excerpt of programming may not be considered “comparable” to broadcast

31 When we use the term “associated video programming” or “associated video program,” we mean the televised

programming from which the video clip was excerpted.

32 Throughout this item, when we discuss grace periods of a certain number of hours after the programming is

shown on television with captions within which video clips must be captioned online, we will consider the grace

period to begin upon the conclusion of the television display of the associated video program. Given the current

state of captioning technology, waiting until the conclusion of the program is the most reasonable approach at this

juncture since, at that time, the caption file is complete.

33 We also adopt a Further Notice considering the four specific issues listed above. See supra Section I. Among the

issues considered in the Further Notice is application of the IP closed captioning requirements to “mash-ups,” which

occur when a single file contains a compilation of one or more video clips that have been shown on television with

captions along with additional content that has not been shown on television with captions. We thus defer, at this

time, application of our rules with respect to mash-ups.

34 47 U.S.C. § 613(c)(2)(A).

35 Id. § 613(h)(2).

36 IP Closed Captioning Order, 27 FCC Rcd at 814-15, ¶ 41; see also id. at n.186 (“The Act and our rules establish

that programming aired by MVPDs is ‘video programming.’”).

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programming under Section 202.37 To the contrary, Section 202 instructs us to take into account, in

establishing compliance deadlines, whether the programming is “edited for Internet distribution,”

indicating that Congress contemplated that the version of a television program provided online may

differ, and in fact, be provided in truncated form, from the original airing shown on television.38 We

therefore reject the argument that the term “video programming” does not encompass video clips on the

theory that “television broadcasters and multi-channel video programming distributors do not transmit

free-standing clips.”39 For the reasons stated herein, we believe the better reading of the statute is that

clips of video programming are covered by Section 202.

12.

We also reject the contention that the legislative history of the CVAA compels us to

interpret Section 202 to exclude video clips from the IP closed captioning requirements. The Senate and

House Committee Reports state that Congress “intends, at this time, for the regulations to apply to full-

length programming and not to video clips or outtakes.”40 On reconsideration, we reject the

Commission’s statements in the IP Closed Captioning Order suggesting that this legislative history

indicated Congress’s intent to authorize the Commission to adopt rules requiring closed captioning of IP-

delivered video clips at some future time.41 After examining this issue in more detail, we believe the

better reading of this language is that Congress intended that the statutory captioning requirements cover

video clips, but gave the Commission discretion to defer the compliance deadline for video clips when the

37 A similar definition of “video programming” appears in other provisions of the Communications Act of 1934, as

amended (the “Act”). See, e.g., 47 U.S.C. § 522(20) (“‘video programming’ means programming provided by, or

generally considered comparable to programming provided by, a television broadcast station”). We note the

Commission has not construed that term in other contexts to exclude excerpts or clips from the definition. See, e.g.,

Closed Captioning and Video Description of Video Programming, Report and Order, 13 FCC Rcd 3272 (1997)

(“1997 Closed Captioning Order“) (implementing the requirement of Section 713 of the Act that video

programming be closed captioned on television); Closed Captioning of Video Programming, Report and Order,

Declaratory Ruling, and Further Notice of Proposed Rulemaking, 29 FCC Rcd 2221 (2014) (“Caption Quality

Order”) (adopting captioning quality standards and technical compliance rules for video programming).

38 See 47 U.S.C. § 613(c)(2)(B). Of course, to the extent programming was provided by a television broadcast

station, it falls into the category of programming “by . . . a television broadcast station.” See 47 U.S.C. § 613(h)(2)

(defining video programming as “programming by, or generally considered comparable to programming provided

by a television broadcast station, but not including consumer-generated media”).

39 See DiMA Comments at 3; see also NCTA Reply at 3. DiMA asserts that “a 2-minute clip from ‘The Late Show

with David Letterman’ is not ‘comparable to’ a full-length television show any more than 2-pages from a

compilation of the Communications Act is ‘comparable to’ the full text of the statute.” Letter from Gregory Alan

Barnes, General Counsel, DiMA, to Marlene H. Dortch, Secretary, FCC, at 1 (Mar. 20, 2014) (“DiMA Mar. 20 Ex

Parte Letter”). We disagree, and conclude instead that a portion of a program that was shown on television with

captions is no less “comparable to programming provided by a television broadcast station” than the complete

program itself. Contrary to DiMA’s interpretation, the CVAA is not limited to programming comparable to full-

length programming provided by a television broadcast station. See also Reply Comments of the Association of

Public Television Stations and the Public Broadcasting Service at 3 (“PTV Reply”) (arguing that the dictionary

meaning of “programming” and “program” implies that “programs” subject to the CVAA’s IP closed captioning

requirements are full-length shows and not video clips). We disagree with PTV’s approach because, as explained

above, we find it consistent with the statutory text to conclude that “video programming” encompasses video clips.

40 Senate Committee Report at 13-14; House Committee Report at 30.

41 IP Closed Captioning Order, 27 FCC Rcd at 817-18, ¶ 48. We are unpersuaded by Consumer Groups’ argument

that the legislative history’s reference to “video clips” meant to refer to material that is exempt from the television

closed captioning rules. Letter from Blake E. Reid, Counsel to Telecommunications for the Deaf and Hard of

Hearing, Inc. (TDI), to Marlene H. Dortch, Secretary, FCC, at 2 (Mar. 28, 2014) (“Consumer Groups Mar. 28 Ex

Parte Letter”). The television closed captioning rules exempt “[i]nterstitial material, promotional announcements,

and public service announcements that are 10 minutes or less in duration.” 47 C.F.R. § 79.1(d)(6). Had Congress

merely meant to carry over this exemption to IP-delivered programming, it would have cited that rule or used similar

language. This exemption does not use the term “video clips.”

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Commission set the schedule of compliance deadlines under Section 202.42

This interpretation is

consistent with the statute, which gives the Commission considerable discretion in establishing “an

appropriate schedule of deadlines for the provision of closed captioning” and directs the Commission to

consider factors that may affect compliance.43 If Congress had intended to exclude excerpts from the

scope of Section 202, we would expect it to have expressly done so in the statute, as it did with respect to

“consumer-generated media.”44 Similarly, if Congress had intended to delay to some future date

Commission authority to adopt rules for video clips, we would expect it to have included such a limitation

in the statute.45 For these reasons, we believe our reading of the legislative history on reconsideration is

most consistent with the statutory language. As discussed below, we now set phased-in compliance

deadlines for captioning of IP-delivered video clips that fall within the definition of video programming

(“programming by, or generally considered comparable to programming provided by a television

broadcast station, but not including consumer-generated media (as defined in section 153 of this title)”).46

13.

Commenters who argue that Congress did not intend the Commission to apply the IP

closed captioning regulations to video clips ignore the statutory language.47 For example, the Digital

Media Association (“DiMA”) disagrees with the Commission’s interpretation of “at this time” in the

legislative history, and asserts instead that the phrase actually means that video clips are not covered

“under this statute.”48 To the contrary, had Congress intended to carve out video clips from coverage of

video programming, it could have said so clearly, rather than using the phrase “at this time,” which

suggests merely a temporal meaning. If the reports had said that Congress “intends for the regulations to

apply to full-length programming and not to video clips,” that would suggest that Congress understood

video clips not to be covered by the statutory language. But the use of the phrase “at this time” suggests

that the Commission’s regulations could require captioning in the future. That could only happen if video

clips fall within the ambit of “video programming.” Further, applying the IP closed captioning

requirements to video clips is consistent with both the text and stated purpose of the CVAA, which was

“to help ensure that individuals with disabilities are able to fully utilize communications services and

better access video programming.”49 Requiring closed captioning of IP-delivered video clips will help

ensure that individuals who are deaf or hard of hearing will have access to all covered video

programming. And, as discussed above, the temporal reference in the legislative history is consistent with

42 See 47 U.S.C. § 613(c)(2)(B).

43 Id.

44 See id. § 613(h)(2).

45 See, e.g., 47 U.S.C. § 613(f)(4)(C)(iv) (“Ten years after October 8, 2010, the Commission shall have the authority

. . . to phase in the video description regulations for up to an additional 10 designated market areas each year”).

46 47 U.S.C. § 613(h)(2).

47 See DiMA Comments at 2; Comments of DIRECTV, LLC at 1-2 (“DIRECTV Comments”); Comments of the

National Association of Broadcasters at 13 (“NAB Comments”); Comments of the National Cable and

Telecommunications Association at 7, n. 26 (“NCTA Comments”); NCTA Reply at 2-3; PTV Reply at 2-5.

48 DiMA Comments at 4. According to DiMA, the reference to outtakes in the legislative history supports its

interpretation because it argues outtakes are never shown on television, and thus it cannot be that Congress intended

the Commission to reconsider covering outtakes at some point in the future. Id. at 5. Neither the statute nor the

legislative history indicates what the Congressional reports mean by use of the term “outtakes.”

For purposes of the

IP captioning rules the Commission defined “outtakes” not covered by the rules as “[c]ontent that is not used in an

edited version of video programming shown on television.” 47 C.F.R. § 79.4(a)(2), (13).

Thus, outtakes that have

never been shown on television need not be captioned when provided online. To the extent content that could be

described in common parlance as “outtakes” does appear on television with captions, however, it must be captioned

when provided online.

49 Senate Committee Report at 1; House Committee Report at 19.

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the text of the statute, which gives the Commission discretion to adopt an appropriate schedule of

compliance deadlines taking into consideration factors that may warrant a longer compliance period.

14.

Further, we conclude that it is procedurally appropriate for us to act on this issue now.

We disagree with those commenters who suggest that the Consumer Groups Petition was procedurally

defective under Section 1.429(b) of the Commission’s rules.50 Consumer Groups argued earlier in the

proceeding that video clips (as the Commission has defined the term)51 should be subject to the IP closed

captioning rules, and Consumer Groups requested reconsideration, arguing that the Commission wrongly

decided the issue. We find that the Consumer Groups Petition does not rely entirely on arguments that

the Commission already considered and rejected because it explicitly describes how the video clips

exemption is denying consumers who are deaf or hard of hearing access to critical areas of programming,

and it presents more up-to-date information than that available at the time the Commission released the IP

Closed Captioning Order.52 In any event, even if the petition does rely on facts or arguments not

previously presented to the Commission, grant of the petition still would be proper under our rules

because of the clear public interest benefits of requiring closed captioning of IP-delivered video clips, as

discussed below.53 The Commission’s rules provide that grant of a petition for reconsideration that

“relies on facts or arguments which have not previously been presented to the Commission” is

permissible if “[t]he Commission determines that consideration of the facts or arguments relied on is

required in the public interest.”54 For these reasons, it is procedurally appropriate to consider the

Consumer Groups Petition.

15.

We do not believe that seeking further comment is necessary or appropriate before we

can impose any closed captioning requirements on IP-delivered video clips. DiMA claims that the

Commission should issue a notice of proposed rulemaking before imposing any closed captioning

requirement on IP-delivered video clips, to provide interested parties with an opportunity to comment and

50 The National Association of Broadcasters (“NAB”) asserts that Consumer Groups’ failure to raise the claim that

the CVAA requires the Commission to cover video clips in the course of the proceeding violates Section 1.429(b)’s

preclusion of granting “[a] petition for reconsideration which relies on facts or arguments which have not previously

been presented to the Commission” except under certain circumstances. NAB Comments at 11, 14; 47 C.F.R. §

1.429(b). The Association of Public Television Stations and the Public Broadcasting Service (“PTV”) asserts that

the Consumer Groups Petition cites statistics that could have been offered earlier in the proceeding, and that the

Commission already considered and rejected Consumer Groups’ arguments that the IP closed captioning rules

should apply to video clips. Opposition of the Association of Public Television Stations and the Public

Broadcasting Service to the Consumer Groups Petition at 2, 6. Consumer Groups disagree with these procedural

arguments. See, e.g., Consumer Groups, Reply Comments to the Oppositions of the Association of Public

Television Stations and Public Broadcasting Service, the National Association of Broadcasters, and the National

Cable & Telecommunications Association to the Petition for Reconsideration Regarding “Video Clips,” at 2, 8 (filed

June 18, 2012).

51 Consumer Groups did, however, previously support a narrow exclusion for video clips under 30 seconds in length

that contain only promotional materials or advertising for full-length programming. See Comments of the Consumer

Groups on the NPRM at 18-20.

52 Consumer Groups Petition at 12-17.

53 See 47 C.F.R. § 1.429(b)(3); Comments of Consumer Groups at v (“Consumer Groups Comments”) (“Our

observations led us to three conclusions. First, the high rates of captioning we observed among some [video

programming providers and distributors] suggest that it is technically feasible for [video programming providers and

distributors] to caption all or nearly all of their news content. Second, the near-total lack of clip captioning from

other [video programming providers and distributors] nevertheless indicates that a substantial proportion of IP-

delivered content will not be captioned in the absence of rules requiring clips to be captioned. Third, the alarmingly

high percentage of uncaptioned non-news clips that we observed demonstrates the need for the Commission’s rules

to apply to all content types.”).

54 See 47 C.F.R. § 1.429(b)(3).

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to obtain feedback on specific proposed rules.55 We find that a further notice of proposed rulemaking is

neither procedurally necessary nor useful prior to imposing the requirements we adopt in this Video Clips

Order.

This proceeding has included a petition for reconsideration filed by Consumer Groups urging the

Commission to require IP-delivered video clips to be captioned.56 Following the filing of that petition, the

Commission released an order on reconsideration deferring a final ruling on the video clips issue raised in

the Consumer Groups Petition and directing the Media Bureau to seek updated information on this issue.57

A public notice was published in the Federal Register seeking comment to further inform the

Commission’s consideration of the video clips issue and asking “whether, as a legal and/or policy matter,

the Commission should require captioning of IP-delivered video clips.” 58 Thus, adequate notice of the

proposed rules has been provided and issuing a further notice of proposed rulemaking before imposing

the closed captioning requirements for IP-delivered video clips adopted herein would be redundant.59

Instead, we proceed to this Video Clips Order based on the ample record already compiled, including the

additional comments filed recently in response to the public notice. In contrast, for those issues on which

we do not have an adequate record for a decision, we seek further comment in the attached Further Notice

of Proposed Rulemaking.

B.

Impact of Requiring Closed Captioning of Internet Protocol-Delivered Video Clips

16.

While we commend the industry for its voluntary efforts to caption IP-delivered video

clips, we also recognize that many such video clips remain uncaptioned.60 The record demonstrates that

over the past few years, industry has been exhibiting an increasing volume of online video programming

in the form of video clips, and these clips are increasingly captioned.61 Specifically, while Consumer

Groups found in May 2013 that 23 percent of news clips and 10 percent of non-news clips were

captioned,62 the more recent data that Consumer Groups submitted in February 2014 indicates that 57

percent of news clips and 18 percent of non-news clips are captioned.63 Nonetheless, despite this increase

55 DiMA Comments at 2, 8-9.

56 See Petitions for Reconsideration of Action in Rulemaking Proceeding, MB Docket No. 11-154; Rpt No. 2951, 77

Fed. Reg. 30,485 (2012).

57 IP Closed Captioning Order on Recon, 28 FCC Rcd at 8803-04, ¶ 30.

58 Video Clips PN, 28 FCC Rcd 16699. The Video Clips PN was published in the proposed rules section of the

Federal Register. In seeking comment on the video clips proposal, the Video Clips PN also referenced the Initial

Regulatory Flexibility Analysis included in the NPRM in this proceeding, which identified small entities that might

be affected. See Media Bureau Seeks Comment on Application of the IP Closed Captioning Rules to Video Clips,

MB Docket No. 11-154; 78 Fed. Reg. 78,319 (2013). We received comments from both the industry and consumer

groups in response to the Video Clips PN.

59 See Reply Comments of Consumer Groups at 5-6 (“Consumer Groups Reply”) (explaining that further delay is

unjustified and the necessary record already exists).

60 See Consumer Groups Comments at 9; Comments of Public Citizen at 2 (“Public Citizen Comments”); Comments

of Ron Bibler (“Bibler Comments”); Comments of Sherri Kramp (“Kramp Comments”); Consumer Groups Reply at

9.

61 See NAB Comments at 8-9; NCTA Comments at 2, 4-5, 8; NCTA Reply at 3-4; Letter from Justin L. Faulb,

Assistant General Counsel, Legal and Regulatory Affairs, NAB, to Marlene H. Dortch, Secretary, FCC, at 1 (Mar.

24, 2014) (“NAB Mar. 24 Ex Parte Letter”); Letter from Diane B. Burstein, Vice President and Deputy General

Counsel, NCTA, to Marlene H. Dortch, Secretary, FCC, at 1 (Mar. 24, 2014); NCTA Apr. 25 Ex Parte Letter at 1.

62 Consumer Groups Comments at 2.

63 Id. at v. We acknowledge that some errors in the Consumer Groups study detract from Consumer Groups’ claims,

such as the study’s inclusion of some clips of programming that were not shown on television in this country with

captions, its failure to consider that some closed captioning problems experienced may have resulted from the use of

apparatus that were not yet required to comply with the Commission’s rules governing the accessibility of video

apparatus (see 47 C.F.R. § 79.103), and its failure to properly categorize certain material as “clips” that were not

(continued….)

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in captioning of IP-delivered video clips, many consumers are denied access to the large volume of clips

that remain uncaptioned. A Commission requirement for captioning IP-delivered video clips will ensure

that the content, including critical news programming, will be accessible to individuals who are deaf or

hard of hearing, thus significantly benefiting consumers and serving the stated public interest goal of the

CVAA.64 Such a requirement is particularly important because, as stated above, more and more

consumers are receiving news, sports, and entertainment programming in the form of online video clips.65

Consumer Groups explain that a Commission requirement is necessary because, although some video

programming providers and distributors “have greatly increased their use of captions for video clips,

many others captioned few or none of their clips.”66 The record demonstrates that because of the large

volume of IP-delivered video programming that is posted online as video clips, much of which is not

captioned, consumers who are deaf or hard of hearing are being denied access to critical areas of

programming, such as news, contrary to the intent of the CVAA.67

17.

Contrary to the suggestions of some commenters,68 accessing captioned full-length

programming online or reading an article about the topic covered in an uncaptioned video clip is not a full

substitute for viewing a captioned video clip.69 If such suggestions were true, the Internet would not

contain the large volume of video clips that it does because access to such alternatives would adequately

serve viewers who are not deaf or hard of hearing. Public Citizen states that the lack of closed captioning

on IP-delivered video clips “disadvantages and marginalizes deaf and hard of hearing people.”70 We

agree that the very fact that programmers make video clips available when the full-length program is also

(Continued from previous page)

required to be captioned as opposed to “segments” for which captioning was required. See Reply Comments of the

National Association of Broadcasters at 6-8 (“NAB Reply”); NCTA Reply at 5. See also NAB Comments at 15-16.

Notwithstanding these shortcomings, the remaining data provided by the Consumer Groups confirms that a

significant number of IP-delivered video clips today are not captioned. See also Consumer Groups Mar. 28 Ex

Parte Letter at 3-4 (“Unfortunately, several of our industry colleagues made the disappointing decision to prioritize

attacking our credibility and nitpicking our findings over providing their own data . . . . [P]rogrammers are in a far

better position than consumers to identify the extent to which they have engaged in systematic efforts to voluntarily

caption clips.”) (footnotes omitted).

64 See supra ¶ 13; see also Bibler Comments; Kramp Comments; Public Citizen Comments at 2; Comments of the

Regional Center for Independent Living (“RCIL Comments”).

65 See supra ¶ 1.

66 Consumer Groups Comments at 17.

67 See Consumer Groups Mar. 28 Ex Parte Letter at 2. An additional benefit of requiring closed captioning of IP-

delivered video clips relates to the Commission’s current distinction between video clips and segments.

Specifically, while the IP Closed Captioning Order exempted video clips from the IP closed captioning

requirements, it required that IP-delivered video programming be captioned when the full-length video program is

posted online in multiple segments. See IP Closed Captioning Order, 28 FCC Rcd at 817, ¶ 45. Today’s decision

to require closed captioning of IP-delivered video clips and not just segments will eliminate confusion for

consumers looking for captioning and for industry seeking to comply with our requirements, since there will be no

need to determine whether a particular piece of short-form content is a video clip or a segment.

68 See NAB Comments at 5; NCTA Comments at 3 and n. 8; NAB Reply at 4-5; NCTA Reply at 8; PTV Reply at 3,

6-7; Letter from Lonna Thompson, Executive Vice President, Chief Operating Officer, and General Counsel,

Association of Public Television Stations, and Thomas Rosen, Senior Counsel, Public Broadcasting Service, to

Marlene H. Dortch, Secretary, FCC, at 2 (June 26, 2014) (“APTS/PBS June 26 Ex Parte Letter”).

69 See, e.g., Letter from Blake E. Reid, Counsel to TDI, to Marlene H. Dortch, Secretary, FCC, at 1-2 (June 27,

2014) (“Consumer Groups June 27 Ex Parte Letter”) (“It should not be incumbent on viewers who are deaf or hard

of hearing seeking to view a clip to scour the Internet for the corresponding full-length program – which may only

be available via a paid service to which the viewer does not subscribe – and scrub through the program to find the

content from the clip.”).

70 Public Citizen Comments at 2.

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available online demonstrates the intrinsic value of these clips. For these reasons, we believe that

interpreting Section 202 to cover video clips is necessary to fully effectuate the statutory purpose and that

it is appropriate to require compliance with the statute under the schedule we adopt in this order.

18.

As explained above, we interpret the statute as requiring closed captioning of IP-

delivered video clips and we find that there are obvious public interest benefits of imposing such a

requirement.

Industry commenters assert, however, that they will face some financial and technical

challenges in complying with such a requirement. One of the biggest challenges, they claim, is ensuring

that the captions are properly synchronized.71 Synchronization is of particular concern because if captions

lag behind the audio, which often occurs during live programming, part of the applicable captions may be

missing when a clip is excerpted from the programming.72 As a result, some industry commenters

indicate that they must re-author the caption file for video clips.73 Some industry commenters assert that

captioning online clips is time-consuming, labor-intensive, and costly,74 particularly given the enormous

volume of IP-delivered video clips.75 While future technological developments will likely automate the

process, they report that the development of this technology remains ongoing.76 Industry commenters

also caution that a requirement to caption video clips might cause some entities to cease posting video

clips online.77 Contrary to the industry’s claims about the time-consuming nature of captioning video

clips, however, one captioning company, VITAC, indicates that it captions over 50 short-form videos (30-

71 See DiMA Comments at 6-7; NAB Comments at 6 (explaining that an individual would need to review the video

file and add metadata, such as time stamps and markings showing the beginning and end of each clip). See also

infra Section III.C.5.

72 See DiMA Mar. 20 Ex Parte Letter at 2; DIRECTV Comments at 2.

73 See DIRECTV Comments at 2; NCTA Comments at 5-6; Reply Comments of U.S. Captioning Company at 2

(“U.S. Captioning Company Reply”); NCTA Apr. 25 Ex Parte Letter at 1.

74 See DiMA Comments at 5-6; DIRECTV Comments at 2; NAB Comments at 3 and 4-5, n. 7; NCTA Reply at 6.

According to NAB, for every two minutes of short-form IP content, it takes more than 15 minutes of manual labor to

reformat and encode the closed captions. NAB Comments at 4-5, n. 7. Similarly, DiMA states that “[t]he time and

cost of enabling captions is not substantially less for a 2-minute clip than for a 2-hour full-length movie.” DiMA

Mar. 20 Ex Parte Letter at 2.

75 See DiMA Comments at 7; Letter from Gerald J. Waldron and Daniel Kahn, Counsel for Hulu, LLC, to Marlene

Dortch, Secretary, FCC, at 1 (Apr. 1, 2014) (“Hulu Apr. 1 Ex Parte Letter”); NCTA Apr. 25 Ex Parte Letter at 1.

76 See NAB Comments at 10; NCTA Comments at 8; RCIL Comments; NCTA Apr. 25 Ex Parte Letter at 1-2;

Letter from Diane B. Burstein, Vice President and Deputy General Counsel, NCTA, to Marlene H. Dortch,

Secretary, FCC, at 1 (May 28, 2014). See also U.S. Captioning Company Reply at 2. But see Letter from Giovanni

Galvez, Technical Developer, to Marlene H. Dortch, Secretary, FCC, at 1-2 (Apr. 2, 2014) (“Galvez Apr. 2 Ex Parte

Letter”) (detailing existing software solutions); Letter from Heather York, Vice President, Marketing, VITAC, to

Marlene Dortch, Secretary, FCC, at 3 (Apr. 3, 2014) (“Captioning Companies Apr. 3 Ex Parte Letter”) (explaining

that there are existing, albeit often expensive, software solutions); Letter from Blake E. Reid, Counsel to TDI, to

Marlene H. Dortch, Secretary, FCC, at 2 (June 5, 2014) (“Consumer Groups June 5 Ex Parte Letter”) (“the record in

this proceeding . . . is replete with evidence that repurposing captions, including for clips of all types, is possible

using existing technology”).

77 See NAB Comments at 10; NCTA Comments at 8; NCTA Reply at 7. See also Hulu Apr. 1 Ex Parte Letter at 1-2

(“Although clips greatly outnumber full-length episodes, clips account for only a small fraction of total views . . . .

Hulu expressed the concern that many content owners may decide that the costs of compliance outweigh their

revenues from clips and consequently would pull or hold back some or all of their clips from Hulu.”). Similarly, one

commenter asserts that small broadcasters that currently voluntarily caption certain televised programming might

cease doing so, to avoid triggering a requirement for captioning of online clips of that programming. See PTV

Reply at 2, 5-6.

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60 seconds each) per day for one client, and that captioners create the captions for each of these videos

within 15-20 minutes of receiving them.78

19.

Based on the record before us, we find that compliance with a captioning requirement for

IP-delivered video clips will not be overly burdensome.79 This is particularly true given the reasonable

timeframes we are providing for entities to come into compliance,80 as well as the grace period within

which captions may be added to video clips of live and near-live programming.81 Further, consistent with

the text of the CVAA, the scope of the IP closed captioning requirements is limited to video programming

“that was published or exhibited on television with captions,”82 such that online captions only will be

required for content that already has been televised with captions. The fact that some video programming

distributors already caption a portion of their video clips demonstrates that the necessary technology

exists and that captioning video clips is economically feasible.83 We expect that the lengthy compliance

deadlines of January 1, 2016 for straight lift clips and January 1, 2017 for montages will alleviate the

asserted difficulties with captioning IP-delivered video clips, particularly given information provided on

the record by captioners and others indicating that solutions already exist to facilitate captioning of IP-

delivered video clips.84

C.

Closed Captioning Requirements for Internet Protocol-Delivered Video Clips

1.

Covered Video Clips

20.

The CVAA directs the Commission to require closed captioning of IP-delivered video

programming when the programming “was published or exhibited on television with captions after the

effective date of [the] regulations.”85 Accordingly, while the closed captioning requirements for IP-

delivered video clips will apply to clips of video programming that was shown on television with

captions, they will not apply to clips of video programming that was not shown on television with

captions.86

To the extent that a video clip posted online contains an audio track that is substantially

different from that aired on television, we will not consider the video clip to have been shown on

television with captions and thus captions will not be required online.87 For example, we understand that

sometimes a video clip from a sporting event is later posted online with different audio than the audio that

accompanied the same video on television.88 The online version of the video clip with different audio

would not be covered by the CVAA because the video programming at issue was not shown on television

78 See Captioning Companies Apr. 3 Ex Parte Letter at 2.

79 See supra ¶¶ 16, 18 (detailing industry effort to increase volume of captioned clips despite cost and technical

adjustments).

80 See infra Section III.C.2.

81 See infra Section III.C.3.

82 47 U.S.C. § 613(c)(2)(A).

83 See Consumer Groups Comments at v.

84 See Captioning Companies Apr. 3 Ex Parte Letter at 1- 2; Galvez Apr. 2 Ex Parte Letter at 1-2.

85 47 U.S.C. § 613(c)(2)(A).

86 See NCTA Comments at 7, n. 26; DiMA Mar. 20 Ex Parte Letter at 2. We clarify, however, that the addition of a

brief introduction or advertisement to an otherwise covered video clip will not exempt the clip from the IP closed

captioning rules.

87 See NCTA Apr. 25 Ex Parte Letter at 2 (stating that the IP closed captioning rules would not apply to “clips

including video that may have been shown on TV with captions, but with a new or different audio track online”).

88 See, e.g., Letter from Susan L. Fox. Vice President, Government Relations, The Walt Disney Company, to

Marlene H. Dortch, Secretary, FCC, at 2 (June 18, 2014) (“Disney June 18 Ex Parte Letter”).

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with captions; rather, where the audio is substantially different, the televised captions would not

correspond to the audio that accompanies the online clip.

21.

We interpret the CVAA to require closed captioning of IP-delivered video clips

regardless of the content or length of the clip.89 Some commenters have argued that we should apply the

closed captioning requirements only to clips with certain content90 or only to clips above a certain

length.91 We disagree. Rather, we find that it was Congress’s intent in enacting the CVAA to ensure that

consumers who are deaf or hard of hearing have access to video programming that is shown on television

with captions, including video programming posted online as video clips, regardless of whether the video

clips contain news, sports, entertainment, or any other type of content. A finding to the contrary is not

supported by the CVAA’s overarching goal to provide full programming access to individuals who are

deaf or hard of hearing.92 Similarly, we do not limit the applicability of the closed captioning

requirements only to clips of a certain length. We find no basis on which to distinguish between clips that

last 10 seconds and those that last 10 minutes. By deciding to make a clip available via the Internet, a

video programming distributor or provider has made a decision that it has value for the general public,

and the CVAA requires that when the same programming was shown on television with captions, the clip

must also be made accessible online to consumers who are deaf or hard of hearing. This comprehensive

approach will be more administratively efficient for industry because companies will not need to

determine whether clips contain certain content or are of a certain minimum length.

22.

At the present time, the closed captioning requirements for IP-delivered video clips will

apply if the video programming provider or distributor (as those terms are defined in the IP closed

captioning rules)93 posts on its website or app a video clip of video programming that it published or

exhibited on television in the United States with captions on or after the applicable compliance deadline.

NAB and the National Cable and Telecommunications Association (“NCTA”) propose that the

requirements for closed captioning IP-delivered video clips only apply to a person or entity that (a)

exhibits the television program with captions on its linear channel or network; (b) has the rights to exhibit

a clip of that program with captions via IP; and (c) makes the clip available via a website or app operated

89 Except as otherwise provided herein, as with IP closed captioning of full-length video programming, once the

captioning requirement is triggered we will expect captions to be available immediately for IP-delivered video clips.

See infra ¶ 28.

90 See, e.g., DiMA Comments at 2, 11-12 (arguing that the captioning requirement should only apply to news

programs because the public interest in captioning non-news video clips is not as strong as the public interest in

captioning news video clips); DIRECTV Comments at 2, 4 (arguing that we should not require captioning for IP-

delivered video clips of live sporting events, since fans are more interested in viewing the plays than the

commentary and since live sporting event coverage currently “includes an increasingly rich set of on-screen graphics

that already provide the most salient information to viewers in a non-audio format”).

91 See, e.g., DiMA Comments at 2, 9-10 (arguing that the Commission should only apply the captioning

requirements to IP-delivered video clips that are more than five minutes long); Hulu Apr. 1 Ex Parte Letter at 3

(agreeing with DiMA’s proposal); Letter from Diane B. Burstein, Vice President and Deputy General Counsel,

NCTA, to Marlene H. Dortch, Secretary, FCC, at 3-4 (June 3, 2014) (“NCTA June 3 Ex Parte Letter”) (arguing that

the Commission should only apply the captioning requirements to IP-delivered video clips that are longer than 15

seconds); Letter from Ann West Bobeck, Senior VP and Deputy General Counsel, NAB, to Marlene H. Dortch,

Secretary, FCC, at 2 (June 9, 2014) (“NAB June 9 Ex Parte Letter”) (same). But see Consumer Groups Reply at 10

(explaining that the Commission should reject DiMA’s proposal); RCIL Comments (asserting that all video clips

should be captioned, regardless of length).

92 See Senate Committee Report at 1; House Committee Report at 19. Consumer Groups have stated that “it would

be absurd and arbitrary to conclude that the civil rights of viewers who are deaf or hard of hearing are confined to

the newsroom and do not extend to the critical cultural, informational, and economic opportunities that stem from

non-news programming.” Consumer Groups Reply at 10 (footnote omitted).

93 See supra n. 7 (defining video programming distributor or provider).

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solely by the person or entity.94 NAB and NCTA are concerned that a broader application of the IP closed

captioning rules to video clips may hold entities responsible for issues that they do not control.95 In

recognition of these concerns, we will limit the current application of the rules as described above. For

example, if XYZ Network posts a video clip on a website or app that it operates, and the video clip is

from programming that appeared on XYZ Network with captions after the compliance date, then the IP

closed captioning requirements would apply. If, however, XYZ Network posts the video clip on a third

party website, then the IP closed captioning requirements would not apply. We defer application of the IP

closed captioning rules with respect to the provision of video clips by third party video programming

providers and distributors, such as Hulu, or other services that may embed or host video programming,

such as news websites, pending action on the Further Notice.

2.

Compliance Deadline

23.

At the outset, we clarify that there are several types of video clips at issue. First, the

industry uses the term “straight lift” clips to reference a single excerpt of a captioned television program

with the same video and audio that was presented on television.96 Such video clips will be subject to the

January 1, 2016 deadline discussed below. Second, the industry uses the term “montage” to reference a

single file97 that contains multiple straight lift clips, and as explained below, the industry has persuasively

argued that compliance may be more difficult with regard to such clips. Accordingly, montages will be

subject to an extended deadline of January 1, 2017. Third, the industry uses the term “mash-up” to

reference a single file that contains a compilation of one or more video clips that have been shown on

television with captions and additional content that has not been shown on television with captions. For

the reasons discussed below, we seek further comment on the proper treatment of this category of video

clips in the attached Further Notice. With respect to closed captioning of IP-delivered video clips of

video programming shown live or near-live on television, we require captions beginning July 1, 2017. At

the same time, due to the time-sensitive nature of the posting of a live or near-live video clip we grant a

grace period that requires that captions be added to clips of live programming within 12 hours and to clips

of near-live programing within eight hours after the associated video programming is published or

exhibited on television in the United States with captions. As discussed below, the later deadlines for

montages and video clips taken from associated live and near-live television programming provide

additional time because of the challenges associated with captioning these types of clips, and to allow for

the development of technological advances that will facilitate a streamlined process for posting these clips

94 Letter from Diane B. Burstein and Ann West Bobeck to Marlene H. Dortch, Secretary, FCC, at 1-2 (June 13,

2014) (“NCTA/NAB June 13 Ex Parte Letter”). See also Letter from Gerald J. Waldron and Daniel Kahn, Counsel

for Microsoft Corp., to Marlene Dortch, Secretary, FCC, at 2 (June 25, 2014) (“Microsoft June 25 Ex Parte Letter”)

(supporting NCTA and NAB’s proposal that the Commission not regulate video clips on third party websites and

applications). NAB and NCTA have not explained the meaning or relevance of some terms in their proposal.

Specifically, we are unclear what they mean by “linear” channel or network and by “rights to exhibit.” Accordingly,

we believe our formulation stated above better captures the universe of covered entities.

95 See, e.g., NCTA June 3 Ex Parte Letter at 3 (requesting that any IP closed captioning rules for video clips only

apply to video clips that a video programming owner shows on television and then posts online, and “that are

available on the [video programming owner’s] website or made available through the [video programming owner’s]

applications”); NAB June 9 Ex Parte Letter at 2 (supporting NCTA’s proposal); NCTA/NAB June 13 Ex Parte

Letter at 2 (“broadcast [and] nonbroadcast program networks and television licensees should only be responsible in

situations where they have control over both the airing of the captioned television program and the posting of the

clip online”); Letter from Ann West Bobeck, Senior VP and Deputy General Counsel, NAB, to Marlene H. Dortch,

Secretary, FCC, at 2 (June 13, 2014) (“NAB June 13 Ex Parte Letter”) (“licensees or programmers cannot be held

responsible for compliance for online captioning obligations (including captioning quality) for clips that are not

within their immediate control”).

96 See, e.g., NCTA June 3 Ex Parte Letter at 2.

97 See supra n. 29 (distinguishing between montages and straight lift clips).

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with captions online.98 If we receive a petition seeking to extend these deadlines and find that technology

has not progressed as expected with respect to posting these clips online, we will act promptly on the

petition and extend the compliance deadlines if the petition demonstrates that technology is not available

to achieve compliance.

24.

As stated above, we will require compliance with the new requirements for closed

captioning of IP-delivered video clips by January 1, 2016 for “straight lift” video clips. We define

“straight lift” video clips as those that contain a single excerpt of a captioned television program with the

same video and audio that was presented on television.

As of that date, IP-delivered video clips must be

provided with closed captions if the associated video programming is published or exhibited on television

in the United States with captions on or after January 1, 2016. Consumer Groups and captioning

companies support a one-year deadline.99 In contrast, some members of the industry have requested a

two-year phase-in because of the volume of video clips and the difficulty in captioning them,100 while

others have supported a deadline of 18 months after adoption of the rules.101 Members of the industry

have cautioned that they may have compliance difficulties if faced with a requirement for captioning IP-

delivered video clips at this juncture, when they are still working to implement the IP closed captioning

requirements for full-length video programming.102

Balancing consumers’ desire for prompt access to this

content and the industry’s claims about the difficulty with compliance, we adopt a deadline of January 1,

2016 for closed captioning of IP-delivered “straight lift” video clips. The first compliance deadline for

closed captioning of full-length IP-delivered video programming was six months after the date the IP

Closed Captioning Order was published in the Federal Register, as supported by the Video Programming

Accessibility Advisory Committee (“VPAAC”), which consisted of representatives from both the

industry and from consumer groups.103 Given that in general the same requirements that apply to

captioning a full-length IP-delivered video program will apply to captioning an IP-delivered video clip,104

and that the industry has now had nearly two years of experience with captioning programming online,

we find that the January 1, 2016 deadline will be sufficient for the industry to achieve compliance.

During this time, we encourage the industry to work toward automating closed captioning of IP-delivered

98 See infra ¶ 25 and Section III.C.3.

99 Consumer Groups Reply at 11; Captioning Companies Apr. 3 Ex Parte Letter at 4.

100 See, e.g., DiMA Comments at 2, 13; NCTA June 3 Ex Parte Letter at 4 (requesting a two-year deadline for the

easier situation in which a single video clip is at issue and includes embedded or time-coded captions, and a three-

year deadline for the harder situation in which a single video clip is at issue and does not include time-coded

captions); NAB June 9 Ex Parte Letter at 3 (supporting NCTA’s proposal). See also Hulu Apr. 1 Ex Parte Letter at

2 (recommending a two year period, but “[i]f a faster pace is deemed necessary,” suggesting “a percentage-based

phase-in, in which 50% of covered clips must be captioned after one year and all covered clips must be captioned

after two years”). In the absence of record information on the NCTA proposal, including for example the volume of

clips that do not include time-coded captions (that is, captions which directly reference the pieces of video they

describe), the difficulties with captioning clips that do not include time-coded captions, and why solutions to such

difficulties cannot be implemented prior to the compliance deadline, we decline to adopt a distinction between video

clips that include embedded or time-coded captions and those that do not.

101 See APTS/PBS June 26 Ex Parte Letter at 1-2.

102 See DiMA Comments at 2, 5-7; NCTA Comments at 8. The IP closed captioning requirements for full-length

programming that is in the video programming distributor’s or provider’s library before it is shown on television

with captions were not triggered until after the release of the Video Clips PN. See 47 C.F.R. § 79.4(b)(4). The

Commission’s rules contain decreasing timeframes within which captions must be added to such content, with the

final timeframe applicable to content that is shown on television with captions on or after March 30, 2016. See id.

103 IP Closed Captioning Order, 27 FCC Rcd at 819, ¶ 51. See also Captioning Companies Apr. 3 Ex Parte Letter at

2 (“captioning clips is very much like any other caption job”).

104 See infra Section III.C.5.

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video clips and to eliminate problems associated with distorting closed caption files that may occur when

video clips are created, thus reducing the labor and costs involved.105

25.

We find that an extended compliance deadline of January 1, 2017 is justified for

“montages.” We define a montage as programming contained in a single file that includes multiple

straight lift clips.106 That is, a montage is a single online file containing multiple video clips “taken from

different parts of a captioned full-length TV program or from different captioned TV programs.”107 The

record demonstrates that an extended compliance deadline is needed for such programming because

industry is concerned that technology does not currently exist to use the same caption files that were used

on television.108 The record supports our expectation that by January 1, 2017, technology will be better

able to automate this process, enabling the industry to modify the televised captions associated with each

video clip, rather than re-authoring captions where a single file contains multiple straight lift clips.109

Accordingly, closed captions will be required where a single IP-delivered file contains multiple straight

lift clips beginning January 1, 2017, if the associated video programming is published or exhibited on

television in the United States with captions on or after January 1, 2017. We expect that the industry will

not use this extended compliance deadline to delay compliance with the closed captioning requirements,

for example, by creating a single file that contains two video clips that otherwise would have been posted

separately with captions and then claiming that it is subject to the later January 1, 2017 compliance

deadline.

26.

We find the addition of a brief introduction or advertisement to an otherwise covered

video clip will not exempt the clip from the IP closed captioning rules, regardless of whether the video

clip is a straight clip or a montage.110

At the same time, we understand that often, a single file may

contain a compilation of one or more video clips that have been shown on television with captions,

interspersed with additional content that has not been shown on television with captions. The industry

refers to such program files as “mash-ups.”111 We seek comment on the application of the CVAA to

mash-ups in the Further Notice.

27.

Commenters have expressed concerns about captioning IP-delivered video clips that

serve a promotional purpose, but these concerns are largely focused on promotional clips that are posted

online before the programming is shown on television, an issue that will be explored in the Further

105 See NAB Mar. 24 Ex Parte Letter at 2 (“[T]he majority of local stations would need regulatory relief until an

automated captioning video clip solution comes to market . . . . If the Commission acts . . . it should refrain from

requiring compliance until a technical solution exists that creates captions at an acceptable quality.”). But see

Consumer Groups Mar. 28 Ex Parte Letter at 7 (noting the continued availability of an economic burden exemption

under the CVAA and the Commission’s rules).

106 These multiple straight lift clips may be sequential (i.e., in the same order in which they appeared on television)

or non-sequential (i.e., in a different order than the order in which they appeared on television).

107 NCTA Apr. 25 Ex Parte Letter at 2.

108 Id.; NCTA June 3 Ex Parte Letter at 2-3; Consumer Groups June 5 Ex Parte Letter at 3 (“[I]f programmers are

able to demonstrate that captioning montages requires additional workflow modifications above and beyond

‘straight clips,’ we would not oppose a slightly longer phase-in period to accommodate.”).

109 See, e.g., NAB Comments at i, 10; NCTA Comments at 8. If industry finds that sufficient automation does not

exist by the deadline, it may file a request to extend the deadline.

110 Of course, a brief introduction that was not captioned on television would not be required to be captioned when

accompanying an IP-delivered video clip. Only the portion of the video clip that was televised with captions would

need to be captioned online.

111 See, e.g., NCTA June 3 Ex Parte Letter at 3 (“ensuring that ‘mash-ups’ containing original content are captioned

online would require [video programming owners] to recaption content from scratch – a costly and time-consuming

process”); NCTA Apr. 25 Ex Parte Letter at 2 (discussing “short-form video content produced for online that may

combine TV content and original content never aired on TV”).

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Notice.112 A non-advance promotional video clip may be a single “straight-lift” excerpt of captioned

televised content, in which case we see no reason that the January 1, 2016 deadline discussed above

should not apply. Once the IP closed captioning requirements are triggered by the content being shown

on television with captions, the CVAA does not differentiate between clips of promotional material and

other types of clips, but rather, broadly requires video programming that has been shown on television

with captions to be made accessible to those consumers who are deaf or hard of hearing. We see nothing

in the CVAA or its legislative history that suggests Congress intended to exclude from coverage video

clips that are promotional in nature. For the same reasons, a non-advance promotional video clip that

contains multiple straight lift clips of video programming that has been shown on television with

captions, and thus is a montage, will be subject to the January 1, 2017 deadline discussed above.

3.

Video Clips of Live and Near-Live Programming

28.

In general, as with IP closed captioning of full-length video programming, once the

captioning requirement is triggered we will expect captions to be available immediately for IP-delivered

video clips.113 In other words, at the time of being posted online, covered video clips must be closed

captioned. While Hulu has indicated that a “grace period” may be necessary in some instances if

technical, editorial, or administrative issues arise,114 we expect industry to work prior to the compliance

deadline to develop processes that will enable them to make captions available for IP-delivered video

clips without any delay once the video programming has been shown on television with captions. The

record does not support a contrary approach, with an exception for video clips of live or near-live

programming.

29.

We find that there are unique concerns with IP-delivered video clips of live and near-live

programming given its time sensitivity.115 If distributors were prohibited from posting video clips of live

112 See, e.g., Letter from Anne Lucey, Senior Vice President for Regulatory Policy, CBS Corporation, to Marlene

Dortch, Secretary, FCC, at 2-3 (May 22, 2014) (“CBS May 22 Ex Parte Letter”) (discussing the “severe burden that

would be created if the numerous preview or promotional clips that are posted online to create consumer interest in

upcoming broadcast programs were required to be captioned once the programming was broadcast with captions,”

and explaining that “[t]o track down and caption such ‘advance clips’ would be a costly and inefficient use of

resources . . . . [I]t would also create an anomalous situation in which the very same promotion drawn from material

contained in the program that is to be broadcast would not have to be captioned on television, but would have to be

captioned online, and only after the greatest part of its promotional value had ended.”); Letter from Diane B.

Burstein, Vice President and Deputy General Counsel, NCTA, to Marlene H. Dortch, Secretary, FCC, at 2, n. 3

(June 18, 2014) (“NCTA June 18 Ex Parte Letter”) (“Programmers should not be required to caption the same

promotional material from scratch if it remains online after the full program aired on television with captions.”);

Microsoft June 25 Ex Parte Letter at 1 (“promotional ‘trailers’ have a short shelf life and limited economic value

and are of less utility to consumers”). We note that at this time, any difficulty with tracking down video clips will

be minimized by the fact that application of the requirement to caption advance clips is under consideration in the

Further Notice, and because the requirement currently only applies where the video programming provider or

distributor posts on its website or app a video clip of video programming that it published or exhibited on television.

See supra Section III.C.1, infra Section III.C.4.

113 See Consumer Groups Mar. 28 Ex Parte Letter at 6.

114 See Hulu Apr. 1 Ex Parte Letter at 2-3.

115 See, e.g., Letter from Diane B. Burstein, Vice President and Deputy General Counsel, NCTA, and Ann West

Bobeck. Senior Vice President and Deputy General Counsel, NAB, to Marlene H. Dortch. Secretary, FCC, at 1

(June 23, 2014) (“NCTA/NAB June 23 Ex Parte Letter”) (“Currently, uncaptioned clips of live programing may be

posted at or around the same time the program airs on television with captions. If the FCC were to require the

captioning of such clips, a video programmer would have to take several time-consuming steps, including either

recaptioning the clip from scratch or repurposing existing captions where possible and reposting another version of

the clip with captions (or removing the clip from the web altogether). Few programmers have the resources to

create captioned time-sensitive clips in-house, and vendors have not had experience handling the volume of time-

sensitive clips that would have to be recaptioned if a mandate were to be adopted.”); id. (cautioning that the

Commission must adopt a reasonable grace period and a sufficiently long compliance deadline to ensure that the

(continued….)

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and near-live programming116 online until captions are available, then all consumers would be denied

access to potentially time-sensitive information during that time. A grace period would provide

distributors with flexibility to post time-sensitive clips online without delay. CBS requests a “grace

period of several hours” before we require video clips of live or near-live programming to be captioned

online, explaining that otherwise entities other than the authorized video programming providers and

distributors may be the first to distribute the content online.117 CBS explains that “[t]his is not important

simply to help build a programmer’s solid ‘first-to-the-news’ reputation, but it is also important from an

accessibility perspective. If a clip goes viral and generates a large number of views over time, it is

important that it be a version controlled by the station, which can augment the clip with online captions

once they are generated.”118 In contrast, NAB and NCTA acknowledge the feasibility of a 12-hour grace

period,119 while DIRECTV requests a 24-hour grace period.120 Further, DiMA indicates that it is more

difficult to caption video clips of live programming than to caption video clips of prerecorded

programming.121

30.

Given the above difficulties associated with captioning video clips of live and near-live

programming, we will not require compliance for this category of video clips until July 1, 2017.122

Additionally, for the present time, we will permit closed captions to be provided on IP-delivered video

clips of live programming up to 12 hours after the associated video programming is published or

exhibited on television in the United States with captions, and we will permit closed captions to be

provided on IP-delivered video clips of near-live programming up to eight hours after the associated

(Continued from previous page)

“rules do not act as a deterrent to programmers posting time-sensitive material online”). But see Letter from Blake

E. Reid, Counsel to TDI, to Marlene H. Dortch, Secretary, FCC, at 2 (July 1, 2014) (“Consumer Groups July 1 Ex

Parte Letter”) (“[I]t is possible, using existing software, to extract captions from any type of full-length

programming, including live programming, for inclusion with video clips.”) (footnote omitted).

116 “Live programming” is “[v]ideo programming that is shown on television substantially simultaneously with its

performance.” 47 C.F.R. § 79.4(a)(7). “Near-live programming” is “[v]ideo programming that is performed and

recorded less than 24 hours prior to the time it was first aired on television.” 47 C.F.R. § 79.4(a)(8).

117 CBS May 22 Ex Parte Letter at 2.

118 CBS May 22 Ex Parte Letter at 2.

119 See NCTA/NAB June 23 Ex Parte Letter at 2 (“if the Commission were to adopt an aggressive turn-around time

– 12 hours – for posting captioned clips, many programmers that post time-sensitive clips would likely be able to

post a captioned version if sufficient implementation lead time were provided (by year end 2017).”); Letter from

Justin Faulb, Assistant General Counsel, NAB, to Marlene H. Dortch, Secretary, FCC, at 2 (June 27, 2014) (“NAB

June 27 Ex Parte Letter”) (“If the Commission decides to adopt a shorter timeframe 12 business hours would be an

aggressive, but potentially reasonable timeframe if the FCC provides sufficient lead time for the effective date of

any requirement (i.e., mid 2017).”).

120 See Letter from William M. Wiltshire, Counsel for DIRECTV, to Marlene H. Dortch, Secretary, FCC, at 1 (Apr.

14, 2014) (“DIRECTV Apr. 14 Ex Parte Letter”).

121 See DiMA Mar. 20 Ex Parte Letter at 2 (indicating that to caption video clips of live programming, video

programming owners, providers, and distributors “would need to expend significant effort that is not necessary for

full-length programs to provide an acceptable user experience”).

122 Consumer Groups argue that we should consider a more limited category of video clips than clips of live and

“near live” programming, and “that the industry should bear the onus of articulating a workable definition that

encompasses only truly time-sensitive’ clips . . . .” Letter from Blake E. Reid, Counsel to TDI, to Marlene H.

Dortch, Secretary, FCC, at 1 (June 24, 2014) (“Consumer Groups June 24 Ex Parte Letter”) (emphasis in original);

see also Consumer Groups June 27 Ex Parte Letter at 2. We disagree, and find instead that industry’s concerns

about captioning this category of video clips apply broadly to video clips of live and near-live programming.

Additionally, attempting to define this category based on video clips with content that has the potential to “go viral,”

as Consumer Groups suggest, would be inherently subjective and inevitably reflect the perspective and values of the

person evaluating the content.

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video programming is published or exhibited on television in the United States with captions.123 This

means that unlike other IP-delivered video clips, video clips of live and near-live programming may be

posted online without captions initially, with captions added within 12 hours (for live) or eight hours (for

near-live) of the video programming being shown on television.124 We find that the 12- and eight-hour

grace periods appropriately balance industry’s concern with captioning time-sensitive IP-delivered video

clips, with the fact that it is just as important for individuals who are deaf or hard of hearing to have

access to these clips as it is for other members of the general public.125 One company has indicated that a

123 We reiterate that we will consider the grace period to begin upon the conclusion of the television display of the

associated video program. In addition, while NAB and NCTA have requested that we limit the 12-hour grace period

to business hours, we decline to do so because many programs are captioned around the clock, and a 12-hour grace

period will allow daytime staff to assist with captioning of video clips posted online overnight. See NCTA/NAB

June 23 Ex Parte Letter at 2; NAB June 27 Ex Parte Letter at 2; Captioning Companies Apr. 3 Ex Parte Letter at 2

(describing one captioning company, VITAC, as “a 24-hour operation”). The 12-hour grace period for video clips

of live programming will address DIRECTV’s concerns with what we refer to as “NFL Highlight Clips” and “Short

Cuts.” When a viewer is watching one National Football League (“NFL”) game on a mobile device, he or she may

opt to view NFL Highlight Clips from another game. Letter from William M. Wiltshire, Counsel for DIRECTV, to

Marlene H. Dortch, Secretary, FCC, at 1 (May 9, 2014) (“DIRECTV May 9 Ex Parte Letter”). Short Cuts are

commercial-free replay compilations of highlights from every NFL regular season game, allowing subscribers to

view a game in 30 minutes or less by removing all broadcast “down time,” such as huddles, time-outs, and instant

replay review. See DIRECTV Comments at 3-4. DIRECTV expresses concerns about captioning IP-delivered NFL

Highlight Clips and Short Cuts. Specifically, DIRECTV explains that the volume of NFL Highlight Clips and the

speed at which they are created and distributed makes DIRECTV unable to provide them with “intelligible

captioning.” See id. at 3. For both Short Cuts and NFL Highlight Clips, DIRECTV states that “[t]he process of

breaking the game feed into such video clip highlights can cause the captioning to become garbled and

unrecognizable” and that the process of recreating or restoring the captions “would introduce delays that would

substantially undermine the business rationale for these time-sensitive products.” DIRECTV Apr. 14 Ex Parte

Letter at 1. The rules for video clips of live programming will apply to NFL Highlight Clips and thus will address

DIRECTV’s concerns. The rules for video clips of live programming also will apply to Short Cuts to the extent

Short Cuts are not televised with captions. We understand that a version of Short Cuts is made available on

television without captions, and DIRECTV states that “[t]he television version of Short Cuts is exempt from the

captioning requirement due to the very limited gross revenues associated with this service.” DIRECTV May 9 Ex

Parte Letter at 1. We take no position in this Video Clips Order as to whether a television closed captioning

exemption in fact applies to Short Cuts. We clarify, however, that if the televised version of Short Cuts is captioned

when shown on television in the future, then the online version will be subject to the IP closed captioning rules

already applicable to full-length programming to the extent that they are in essence the same program. See 47

C.F.R. § 79.4(b). In other words, once Short Cuts become subject to the IP closed captioning requirements for full-

length programming (i.e., they are televised with captions), the extended compliance deadline and grace period

applicable to video clips of live programming will no longer apply.

124 To the extent that a straight lift clip contains video clips of live or near-live programming, it will be subject to the

later July 1, 2017 compliance deadline and may utilize the 12-hour or eight-hour grace period. To the extent that a

montage contains video clips of live or near-live programming, the portions of the montage that contain such

programming will be subject to the later July 1, 2017 compliance deadline, and those portions may utilize the

applicable grace period.

125 See Consumer Groups June 5 Ex Parte Letter at 3-4 (“[W]e believe that viewers who are deaf or hard of hearing

have a right to access critical programming on equal terms as everyone else . . . . [W]e would urge the Commission

to require such programming to be captioned as soon as technically possible, and in no case longer than one hour.”)

(footnote omitted); Letter from Blake E. Reid, Counsel to TDI, to Marlene H. Dortch, Secretary, FCC, at 3 (June 13,

2014) (“Consumer Groups June 13 Ex Parte Letter”) (“Should the Commission conclude that a grace period is

appropriate, it should be on the order of minutes and in no event longer than one hour.”). But see Consumer Groups

June 27 Ex Parte Letter at 2 (“denying viewers who are deaf or hard of hearing access to time-sensitive clips for a

period of 12 business hours would plainly contravene Congressional intent to ensure equal access to critical areas of

programming.”); Consumer Groups July 1 Ex Parte Letter at 5. Both CBS and DIRECTV emphasize the

importance of providing certain video clips nearly immediately, as explained above.

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grace period of “several hours” is workable.126 We find that 12 and eight hours are reasonable timeframes

for all companies subject to the requirement to follow beginning July 1, 2017. To the extent that a video

programming provider or distributor is unable to post video clips of live programming within these grace

periods by July 1, 2017 because, for example, it lacks the resources to do so, it may petition for an

exemption of this requirement.127 We find that a shorter grace period is appropriate for video clips of

near-live programming than for video clips of live programming, because we find that there is more time

to add captions to an IP-delivered video clip of programming that is produced and recorded even a short

time before it is shown on television with captions.128 In addition, we encourage the industry to make

video clips of live and near-live programming available with captions at the time the clips are posted

online, or as soon as possible thereafter, whenever possible, especially if such captioning already is being

done.129 In the future, we intend to decrease or eliminate this grace period for video clips of live and near-

live programming, because we expect that technology will automate the process such that a grace period

for captioning is no longer needed.130 Accordingly, in the Further Notice we seek comment on the

timeframe within which we should decrease or eliminate the grace period applicable to video clips of live

and near-live programming.

4.

Video Clips in the Online Library before the Compliance Deadline

31.

We recognize that some video programming providers and distributors will have a large

number of video clips in their online library131 before the compliance deadline of January 1, 2016 for

straight lift clips and January 1, 2017 for montages. As explained fully below, we find that compliance

with the closed captioning requirements for IP-delivered video clips would be economically burdensome

for this class of video clips, and accordingly we exempt this class from coverage of our rules.132

126 See CBS May 22 Ex Parte Letter at 2.

127 See 47 C.F.R. § 79.4(d) (setting forth procedures for individual exemptions based on economic burden). See also

NCTA/NAB June 23 Ex Parte Letter at 2 (noting that some programmers, especially smaller programmers, may be

unable to comply with a 12-hour grace period by year end 2017); NAB June 27 Ex Parte Letter at 2; Letter from

Diane B. Burstein, Vice President and Deputy General Counsel, NCTA, to Marlene H. Dortch, Secretary, FCC, at 1

(June 27, 2014) (stating that local cable news channels and other programmers may need a grace period of longer

than 12 hours to provide a captioned version of a video clip of live programming).

128 One captioning company, VITAC, indicates that it captions over 50 short-form videos (30-60 seconds each) per

day for one client, and that captioners create the captions for each of these videos within 15-20 minutes of receiving

them. See Captioning Companies Apr. 3 Ex Parte Letter at 2. While this 15-20 minute timeframe does not include

time necessary to post video clips online, it does indicate the speed with which captions can be created for video

clips.

129 See, e.g., NCTA June 3 Ex Parte Letter at 4 (“[D]ue to the need to quickly convey certain information to

consumers, programmers may post certain time sensitive clips without captions even as a program airs with captions

on television. The Commission should avoid any rules that would interfere with a [video programming owner’s]

ability to continue to serve the public in this manner.”) (footnote omitted).

130 See, e.g., DIRECTV May 9 Ex Parte Letter at 2 (“In the future, it may be possible for DIRECTV to include the

same closed captioning data with these highlight clips that accompanied the video feed when it was originally

transmitted over broadcast television.”); NCTA/NAB June 23 Ex Parte Letter at 1-2; Consumer Groups June 24 Ex

Parte Letter at 1; Consumer Groups July 1 Ex Parte Letter at 3.

131 As in the IP Closed Captioning Order, herein we use the term “library” to describe the collection of content a

video programming provider or distributor makes available to consumers online.

132 Separately, in the Further Notice below, we seek comment on application of the IP closed captioning rules to

video clips that are added to the video programming distributor’s or provider’s library on or after January 1, 2016

for straight lift clips and January 1, 2017 for montages, but before the associated video programming is shown on

television with captions. We refer to such video clips as “advance” video clips, and we find that further information

on the technological challenges of captioning advance video clips would be useful before we resolve this issue.

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32.

The CVAA permits the Commission to exempt from coverage of its IP closed captioning

rules “any service, class of service, program, class of program, equipment, or class of equipment for

which the Commission has determined that the application of such regulations would be economically

burdensome for the provider of such service, program, or equipment.”133 The Commission has interpreted

the comparable statutory provision applicable to television closed captioning.134

33.

On balance, we find that the costs of captioning video clips that are in the video

programming distributor’s or provider’s online library before the compliance deadline (January 1, 2016

for straight lift clips and January 1, 2017 for montages) outweigh the benefits to be derived from

captioning such programming at this time. Some video programming distributors may have hundreds of

thousands or even millions of video clips currently in the libraries on their websites or apps.135 Some

commenters have suggested that the industry would face significant difficulty complying with closed

captioning requirements for this category of IP-delivered video clips. Stated challenges with captioning

this category of IP-delivered video clips include the enormous volume of existing video clips in some

video programming provider and distributor’s online libraries, which have been posted over a period of

years,136 and difficulty determining potentially years after the clips were first posted online whether such

clips originated as part of a program that later appeared on television with captions after the effective date

of the video clip captioning rules.137 We are concerned about the impact that requiring closed captioning

for this class of video clips may have on entities subject to the rules, including smaller entities that may

lack the financial resources to comply.138 In contrast, we find that the benefits of requiring captioning of

these clips may be minimal since video clips may “have a shorter shelf life for viewership than long-form

content.”139 We believe that the resources of the entities subject to the rules thus would be better spent

captioning clips added to their libraries on a prospective basis. Accordingly, we find that it would be an

economic burden to require closed captioning of video clips that are in the video programming

133 47 U.S.C. § 613(c)(2)(D)(ii).

134 1997 Closed Captioning Order, 13 FCC Rcd at 3342, ¶¶ 143-145. The Commission assesses economic burden

more broadly in the context of an entire class than it does in the context of an individual exemption petition. See

Anglers for Christ Ministries, Inc., Memorandum Opinion and Order, Order, and Notice of Proposed Rulemaking,

26 FCC Rcd 14941, 14958-60, ¶¶ 33-36 (2011) (“Anglers Reversal Order”).

135 See, e.g., DiMA Comments at 6; NAB Reply at 9.

136 See, e.g., DiMA Comments at 14 (discussing the “challenges of identifying and adding captions to archival

programming” and stating that “[t]his process would be far more complex for video clips than for full-length video.

First, there simply are far more video clips than full-length programs online. Second, it is necessary to identify the

program from which a particular clip derives in order to determine whether such clip needs to be captioned, adding a

significant layer of complexity that is not present for full-length programs.”).

137 See id. at 2, 6, 13-14; NAB Reply at 9; NAB June 9 Ex Parte Letter at 2; NCTA June 18 Ex Parte Letter at 1.

138 See, e.g., APTS/PBS June 26 Ex Parte Letter at 2 (explaining that a requirement to caption IP-delivered video

clips already on a distributor’s website prior to the compliance deadline “would impose an enormous financial cost

on local public television stations and would require significant personnel resources, which would risk impeding

many ongoing initiatives to serve local communities”).

139 See Hulu Apr. 1 Ex Parte Letter at 3; NAB June 9 Ex Parte Letter at 2. We recognize Consumer Groups’

argument that many video clips “are likely to live on the Internet indefinitely,” and while that may be true for some

video clips, we expect that many of the video clips that will be online prior to the compliance deadlines will be of

lesser interest to consumers than more recent clips that are posted online after the applicable compliance deadline.

See Consumer Groups Mar. 28 Ex Parte Letter at 6. Accordingly, we decline to adopt the Consumer Groups’

request to adopt rules requiring captioning for this category of video clips. See Consumer Groups Reply at 10-11.

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distributor’s or provider’s online library before the compliance deadline with minimal benefits,140 and we

thus exempt this class from coverage of our IP closed captioning rules.

5.

Application of General IP Closed Captioning Rules to Video Clips

34.

Except as otherwise discussed above, the IP closed captioning requirements will apply to

video clips in the same manner that they apply to full-length video programming shown online. For

example, entities may file a petition for exemption from the IP closed captioning rules based on economic

burden.141 Additionally, this means that video programming owners must provide captions of at least the

same quality as the televised captions for the same programming, and video programming distributors and

providers must maintain the quality of the captions provided by the video programming owner. 142

Consumer Groups support the application of existing quality requirements for full-length IP-delivered

video programming to IP-delivered video clips.143 The Commission previously stated that an evaluation

of whether IP-delivered captions are of at least the same quality as the televised captions may involve the

consideration of “such factors as completeness, placement, accuracy, and timing.”144 Along these lines,

the Commission recently adopted new requirements governing the quality of television closed captioning

that incorporate these factors.145 Thus, while some commenters have asserted that there are problems with

the quality of the captioning of IP-delivered video clips,146 it is likely that the Commission’s new rules

governing captioning quality on television will improve the quality of closed captioning on programming

delivered via IP as well.147 For example, when a televised program is in compliance with the new

requirement that captions be accurate and complete, then all of the audio accompanying a particular clip

of the television program also must be captioned.148

In recognition of the fact that video clips may in

some instances have to be recaptioned, however,149 we will permit de minimis differences between the

closed captions accompanying an IP-delivered video clip and the closed captions that appeared on

television.150 We recognize that providing captions for video clips may present technical challenges

140 See 1997 Closed Captioning Order, 13 FCC Rcd at 3342, ¶ 143 (“In order to make sure that the exemption

process does not undermine the broad goals of Section 713, we believe exemptions should be limited to only those

situations where captioning truly is an economic burden.”).

141 See 47 C.F.R. § 79.4(d) (setting forth the procedures for exemptions based on economic burden, and stating that

the Commission will consider the following factors: “(i) The nature and cost of the closed captions for the

programming; (ii) The impact on the operation of the video programming provider or owner; (iii) The financial

resources of the video programming provider or owner; and (iv) The type of operations of the video programming

provider or owner.”). Entities also may avail themselves of the statutory requirement that a de minimis failure to

comply with the IP closed captioning regulations will not be treated as a violation. See 47 U.S.C. §

613(c)(2)(D)(vii).

142 See IP Closed Captioning Order, 27 FCC Rcd at 812, ¶ 37; 47 C.F.R. § 79.4(c)(1)(i) and (2)(i).

143 See Consumer Groups June 24 Ex Parte Letter at 2.

144 See IP Closed Captioning Order, 27 FCC Rcd at 812, ¶ 37.

145 See Caption Quality Order, 29 FCC Rcd at 2239-40, ¶ 25.

146 See Consumer Groups Comments at 12-14; Kramp Comments.

147 See NAB Reply at 8. See also NCTA Reply at 6, n. 29 (acknowledging that there are currently problems with the

quality of captions of online video clips, but stating that the industry is seeing improvements and is confident that

the problems will be resolved).

148 See 47 C.F.R. §§ 79.1(j), 79.4(c)(1)(i), 79.4(c)(2)(i).

149 See NCTA June 18 Ex Parte Letter at 2 (“[P]rogrammers may not be able to repurpose television captions for use

in online clips and therefore it would be unreasonable to compare the captioning for online clips to that used for full-

length television programming.”) (footnote omitted); NCTA/NAB June 23 Ex Parte Letter at 2.

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beyond those associated with captioning full-length programs.151

We will take this difficulty into account

in the event of complaints.152 It is our hope, however, that advancements in technology by the time the

compliance deadlines arrive may substantially ameliorate these challenges. The Commission, through its

Consumer and Governmental Affairs Bureau, will work to resolve any informal complaints of

noncompliance with the new requirements to caption video clips, but would typically consider

enforcement action by its Enforcement Bureau when there is a pattern or trend of possible noncompliance

by a covered entity. Importantly, we note that the IP Closed Captioning Order makes clear that entities

are not responsible for quality issues outside of their control.153 Thus, it is not necessary for us to adopt

specific rules to address NAB’s concern that problems with captions of IP-delivered video clips may

result from technical problems beyond a station’s control.154

35.

When a video programming provider or distributor provides applications or plug-ins for

viewing video programming, it must comply with Section 79.103(c) of our rules, which requires the

inclusion of certain consumer tools such as the ability to change caption font, size, and color.155 The

Commission’s rules refer to these consumer tools as “technical capabilities.”156 We understand that some

applications include video players that display only video clips, and these players were not designed with

closed captioning capability. DiMA has explained that extension of the IP closed captioning rules to

video clips will require upgrades to these video players,157 and in some instances a single video

(Continued from previous page)

150 See 47 U.S.C. § 613(c)(2)(D)(vii) (a de minimis failure to comply with the IP closed captioning regulations will

not be treated as a violation). See also DIRECTV Apr. 14 Ex Parte Letter at 1 (“The process of breaking the game

feed into such video clip highlights can cause the captioning to become garbled and unrecognizable. Recreating or

restoring that captioning to a level acceptable to a hearing-impaired audience would require a new, separate

captioning session for each clip.”). Accordingly, voice recognition technology can be used to recaption video clips,

but only to the extent that the quality requirements are met, with permissible de minimis differences between the

closed captions accompanying an IP-delivered video clip and the closed captions that appeared on television. We

thus decline Disney’s request that we permit entities to use “the best available voice recognition technology,”

because the record contains no evidence to suggest that “the best available voice recognition technology” today

would produce captions that meet the captioning quality requirements. See Disney June 18 Ex Parte Letter at 3;

Letter from Blake E. Reid, Counsel to TDI, to Marlene H. Dortch, Secretary, FCC, at 1-2 (July 7, 2014) (“Even the

‘best available’ currently-existing voice recognition technology . . . provides captions often riddled with errors and

pales in comparison to high-quality offline captioning.”).

151 See NCTA June 18 Ex Parte Letter at 2 (“[C]lips taken from live programming may well include delays and

other features of live captioning. The Commission should take these circumstances into account in considering

quality issues in this developing area.”); Letter from Justin Faulb, Assistant General Counsel, NAB, to Marlene H.

Dortch, Secretary, FCC, at 1-2 (July 2, 2014) (noting the necessity of “substantial reformatting”).

152 We understand that the captions for live programming may appear on-screen with a delay. In such instances, to

ensure that the captions available with an IP-delivered video clip are complete, the caption file may be synchronized

to the clip’s audio, or the captions may continue on-screen after the clip has concluded until all of the associated

captions have appeared.

153 See IP Closed Captioning Order, 27 FCC Rcd at 812, ¶ 37. See also id. at 805, n. 128; NAB June 9 Ex Parte

Letter at 2 (“NAB urged the FCC to make clear that licensees or programmers cannot be held responsible for

compliance with online captioning obligations (including captioning quality) for clips that are not within their

immediate control.”).

154 See NAB Comments at 9.

155 See 47 C.F.R. §§ 79.4(c)(2)(i) (“A video programming distributor or provider that provides applications, plug-

ins, or devices in order to deliver video programming must comply with the requirements of § 79.103(c) and (d).”),

79.103(c) (setting forth the required technical capabilities, such as the ability to change caption text font, size, and

color).

156 See id. § 79.103(c).

157 See DiMA Comments at 6.

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programming distributor may need to upgrade multiple video players.158 DiMA asserts that it would be

difficult for video programming provider- or distributor-provided applications or plug-ins that play video

clips but not full-length programming to comply with Section 79.103(c) of our rules and that, in any

event, the technical capabilities set forth in our rules are less useful when consumers view video clips as

opposed to full-length programming.159 We are not persuaded by these assertions. Rather, we expect that

video programming providers and distributors will be able to comply with the requirements for their

applications and plug-ins that play video clips, and we agree with Consumer Groups that the Commission

should not enshrine in our rules an exception based on a video programming provider or distributor’s

decision not to include closed captioning capability in the earlier versions of its video players.160 To the

extent that a video programming provider or distributor determines that compliance with the IP closed

captioning requirements for its application or plug-in that only plays video clips would be economically

burdensome, it may file an exemption request.161 The CVAA provides that during the pendency of a

petition for exemption from the IP closed captioning rules due to economic burden, the “provider or

owner shall be exempt from the requirements . . . . The Commission shall act to grant or deny any such

petition, in whole or in part, within 6 months after the Commission receives such petition, unless the

Commission finds that an extension of the 6-month period is necessary to determine whether such

requirements are economically burdensome.”162

IV.

SECOND FURTHER NOTICE OF PROPOSED RULEMAKING

36.

In the following Second Further Notice of Proposed Rulemaking (“Further Notice”) we

explore four issues related to closed captioning of IP-delivered video clips: (1) application of the IP

closed captioning rules to the provision of video clips by third party video programming providers and

distributors, when the associated video programming has been shown on television with captions; (2)

whether in the future we should decrease or eliminate the 12-hour timeframe within which captions may

be added to IP-delivered video clips of live programming and the eight-hour timeframe within which

captions may be added to IP-delivered video clips of near-live programming; (3) application of the IP

closed captioning requirements to files that contain a combination of video clips that have been shown on

television with captions and online-only content (“mash-ups”); and (4) application of the IP closed

captioning rules to video clips that are first added to the video programming distributor’s or provider’s

library on or after January 1, 2016 for straight lift clips or January 1, 2017 for montages, but before the

associated video programming is shown on television with captions, and which then remain online in the

distributor’s or provider’s library after being shown on television.

A.

Third Party Video Programming Providers and Distributors

37.

Entities such as news websites that do not distribute full-length video programming may

sometimes make video clips available on their websites. In addition, some entities, such as Hulu, may

distribute full-length video programming online but do not also distribute such programming on

television. We do not have an adequate record for purposes of applying the IP closed captioning rules to

the provision of video clips by these and similar entities, which we refer to as “third party” distributors.163

158 See DiMA Mar. 20 Ex Parte Letter at 2.

159 See DiMA Comments at 2, 12.

160 See Consumer Groups Reply at 11 (“The Commission should not reward the inaction of player designers and

programmers at the expense of the CVAA’s promise of equal access . . . .”).

161 47 U.S.C. § 613(d)(3); 47 C.F.R. § 79.4(d).

162 47 U.S.C. § 613(d)(3).

163 The attached order imposes closed captioning requirements for IP-delivered video clips, at the present time, to

instances in which the video programming provider or distributor (as those terms are defined in the IP closed

captioning rules) posts on its website or app a video clip of video programming that it published or exhibited on

television in the United States with captions on or after the applicable compliance deadline. See supra Section

(continued….)

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Accordingly, we seek comment on the scope of third party IP distribution of video clips that were taken

from video programming shown on television with captions, the relationship between such third parties

and the video programming owner, and the costs and benefits of imposing the obligation to caption video

clips on such entities, including small entities.

38.

We seek comment on the third parties that distribute video clips of video programming

shown on television with captions. What types of entities are included in this category, and how many

such entities exist? We request information on the relationship between these third parties and video

programming owners. Do the third parties receive video clips directly from the video programming

owner, or do they receive video clips for IP distribution in a different manner? What licensing or other

agreements exist between video programming owners and these third party video programming providers

and distributors with regard to IP-delivered video clips? Do video programming owners sometimes lack

knowledge that third parties are distributing their video clips via IP, and in what circumstances might that

occur? Should any rules covering third party distributors be limited to those distributors that have a

licensing or other formal agreement with the video programming owner?

39.

How should we ensure that video clips taken from programming shown on television are

successfully captioned by third party distributors on a timely basis? For example, the general IP closed

captioning rules that apply to full-length programming require video programming owners to send

program files to video programming distributors and providers with required captions, and they require

video programming providers and distributors to enable the rendering or pass through of all required

captions to the end user.164 Should we impose this allocation of responsibility for IP-delivered video clips

when the video programming provider or distributor did not also publish or exhibit the associated video

programming on television? Should we impose the general IP closed captioning rules in this context, or

should we impose any differing obligations? For example, the IP closed captioning rules require each

video programming owner to agree “[w]ith each video programming distributor and provider that such

owner licenses to distribute video programming directly to the end user through a distribution method that

uses Internet protocol . . . upon a mechanism to inform such distributors and providers on an ongoing

basis whether video programming is subject to the requirements of this section.”165 How would this

“mechanism” operate in the context of video clips covered by these rules when they are provided to third

party IP distributors? How will third party video programming providers and distributors be informed

that a video clip already in their library has been shown on television with captions?166 Will the video

programming owner always know that a video clip previously shown as part of television programming

has been posted online and by whom? How should this impact enforcement, if at all?

40.

If video clips are initially posted online by a third party distributor without captions and

later amended to include captions, will links to the original posting of the video clip still work?

What

other technical, legal or other issues should we be aware of that may impact the ability of third party

video programming distributors to comply with our IP closed captioning requirements, and how quickly

can they be addressed? We seek comment on what would be an appropriate compliance period. We also

(Continued from previous page)

III.C.1. References herein to “third party” distributors should be read to include all video programming providers

and distributors not subject to the attached order as a result of this limitation.

164 47 C.F.R. § 79.4(c).

165 47 C.F.R. § 79.4(c)(1)(ii).

166 See IP Closed Captioning Order, 27 FCC Rcd at 797, ¶ 14 (Section 202(b) of the CVAA “requires the

Commission to ‘establish a mechanism to make available to video programming providers and distributors

information on video programming subject to the Act on an ongoing basis.’ The purpose of the required

‘mechanism’ is to enable [video programming providers and distributors] to determine whether the video

programming that they intend to make available via IP has been shown on television with captions after the effective

date of the new rules.”) (citing 47 U.S.C. § 613(c)(2)(D)(v)).

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seek comment on what obligations, if any, should be different when a third party distributor embeds

instead of hosts the content on its website.167

41.

We seek comment on our statutory authority over video clips provided by third party

distributors. As explained above, the CVAA requires that any IP-delivered video programming that was

shown on television with captions, whether full-length or an excerpt, must also be captioned when

delivered using IP.168 What requirements do we need to impose in the context of third party distributors

to ensure that we are fulfilling the requirements and goals of the CVAA, which directs the Commission to

require “the provision of closed captioning on video programming delivered using Internet protocol that

was published or exhibited on television with captions after the effective date of such regulations”?169

Do

any statutory exemptions apply in this context? For example, should the Commission exempt any third

party video programming distributors or categories of distributors from its video clips captioning

obligations on the basis that it would be “economically burdensome” for these distributors to comply? 170

If so, parties should provide specific reasons for why the economic burden exemption should apply.171 If

adopted, should such categorical exemption expire after a set period of time, subject to renewal if

warranted?

B.

Grace Period for Live and Near-Live Video Clips

42.

As explained above, beginning July 1, 2017 we require the provision of closed captions

on IP-delivered video clips of video programming previously shown live or near-live on television with

captions within 12 hours and eight hours, respectively, after the associated video programming is

published or exhibited on television in the United States with captions.172

Herein we seek comment on

whether in the future we should decrease or eliminate this grace period for providing captions. We seek

comment on the costs of imposing a shorter grace period on covered entities, including small entities, in

comparison to the benefits to consumers of a reduced grace period.

43.

We remain concerned about the impact that delayed access to IP-delivered video clips of

live and near-live programming will have on people who are deaf and hard of hearing. For example,

breaking news aired live on television and initially posted online without closed captions effectively

excludes these individuals from having timely access to this information. We seek comment on the

impact that these delays will have on people who are deaf and hard of hearing and whether continuing to

allow these delays is consistent with Congress’s intent, as expressed in the CVAA, to improve access to

video programming delivered via the Internet. We also expect that, at some time in the future, it will be

appropriate to decrease or eliminate this grace period because we expect that technology will automate

167 When a third party video programming distributor “embeds” a video clip, it is directing the consumer’s browser

or video player to display a video that is currently hosted on another video programming distributor’s platform.

When a third party video programming distributor “hosts” a video clip, it is both directing the consumer’s browser

or video player to display the video and providing the video file itself.

168 See supra Section III.A.

169 47 U.S.C. § 613(c)(2)(A).

170 47 U.S.C. § 613(c)(2)(D)(ii) (the regulations “may exempt any service, class of service, program, class of

program, equipment, or class of equipment for which the Commission has determined that the application of such

regulations would be economically burdensome for the provider of such service, program, or equipment”).

171 See supra n. 134; 1997 Closed Captioning Order, 13 FCC Rcd at 3342, ¶¶ 143-145 (setting forth the

Commission’s treatment of class exemptions); Anglers Reversal Order, 26 FCC Rcd at 14958-60, ¶¶ 33-36

(explaining the different application of the term “economically burdensome” to case-by-case exemptions than to

rulemaking decisions to exempt certain categories of programming”); IP Closed Captioning Order, 27 FCC Rcd at

828, ¶ 67 (also noting the distinction between the Commission’s treatment of these two types of captioning

exemptions.

172 See supra Section III.C.3.

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the process such that a grace period is no longer needed.173 We invite comment on the timeframe within

which we should decrease or eliminate the grace period applicable to video clips of live and near-live

programming. For example, for video clips of live programming, should we provide a grace period of six

hours beginning July 1, 2018, and three hours beginning July 1, 2019? What adjustments should we

make to the grace period for video clips of near-live programming? We ask commenters to justify any

differing treatment of video clips of live programming and video clips of near-live programming. We

also ask industry to submit specific comment on the status of technological developments in this regard.

What steps must industry currently take to prepare captioned video clips of live and near-live

programming, and how and when might those steps be streamlined in the future? To the extent that these

delays can be reduced, would it be appropriate to adopt a schedule of deadlines phasing in shorter grace

periods, and if so, what should these deadlines be? Would a schedule phasing out these grace periods

encourage greater technical innovation to automate these captioning processes, as well as provide the

necessary time to achieve compliance?

C.

Combinations of Video Clips and Content Not Televised with Captions (“Mash-

Ups”)

44.

We seek comment on the application of the IP closed captioning requirements to files that

contain a combination of one or more video clips that have been shown on television with captions, and

other content (such as online-only content) that has not been shown on television with captions. The

industry refers to these files as “mash-ups.” We seek comment on the costs to covered entities, including

small entities, and the benefits of applying the IP closed captioning requirements to mash-ups. We seek

additional information on issues associated with the captioning of the portion of the clip that was shown

on television with captions. We recognize that any part of the video clip that was not shown on television

with captions, such as online-only content, would not be subject to the IP closed captioning requirements.

45.

As explained above, the CVAA requires that any IP-delivered video programming that

was shown on television with captions, whether full-length or an excerpt, must also be captioned when

delivered using IP.174 Is there any statutory basis on which we could exclude from the IP closed

captioning requirements video clips embedded in mash-ups if the embedded clips were shown on

television with captions?

We seek comment on whether this type of clip is subject to any of the

exemptions set forth in Section 202 of the CVAA. For example, if the clips that were shown on television

with captions were very short or insignificant in comparison to the rest of the mash-up that contains

online-only content,175 would the lack of captions be considered a “de minimis” failure to comply under

Section 202?176 If so, how would the Commission be able to determine what is a “de minimis” situation

versus one where lack of captions is considered a violation of our regulations? That is, what would

constitute an insignificant or short enough clip sufficient to invoke the “de minimis” exemption?

Alternatively, should the Commission exempt the class of “mash-ups” from its IP closed captioning rules

173 See, e.g., Consumer Groups June 5 Ex Parte Letter at 4 (“We would also urge the Commission to solicit on an

ongoing basis rigorous technical evidence of how long a grace period is actually necessary to facilitate the posting of

captions – a period that is sure to decline and likely to disappear as technology improves over the coming months.

To that end, we would encourage the Commission to build-in an automatic sunset for any grace period that could not

be extended without rigorous evidence of its ongoing necessity.”).

174 See supra Section III.A.

175 For example, a documentary made for the Internet about the history of television might include snippets of

material that previously aired on television with captions, although the documentary itself was not shown on

television with captions. In this regard, we note that in the Caption Quality Order, the Commission addressed

“programs that are in neither English nor Spanish but contain small amounts or ‘snippets’ of English or Spanish

words that account for only a small percentage of these programs,” and clarified that such programs need not be

captioned.

Caption Quality Order, 29 FCC Rcd at 2289, ¶ 116.

176 47 U.S.C. § 613(c)(2)(D)(vii) (“de minimis failure to comply with such regulations by a video programming

provider or owner shall not be treated as a violation of the regulations”).

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on the basis that it would be “economically burdensome” for the provider of such clip to comply with our

rules?177 If adopted, should such categorical exemption expire after a set period of time, subject to

renewal if warranted? Parties should provide specific comment on why the Commission’s economic

burden test would apply in this situation and how the Commission should apply this test to this class

exemption, if adopted.178 Is there any other basis on which the Commission can exclude an otherwise

covered video clip from the IP closed captioning rules, consistent with the CVAA’s direction that the

Commission “require the provision of closed captioning on video programming delivered using Internet

protocol that was published or exhibited on television with captions after the effective date”?179 For

example, if an online program itself was not shown on television with captions, but rather only isolated

clips embedded in the program were, does that render the program in its entirety (including integrated

clips of televised captioned programming) outside the scope of the CVAA on the theory that the whole

program is a new work that does not constitute “video programming . . . that was published or exhibited

on television with captions”?180

46.

We seek comment on the nature of these types of integrated clips. Industry should give

us specific examples of such clips and describe how prevalent they are. If the Commission applies the IP

closed captioning requirements to one or more video clips that have been shown on television with

captions, regardless of whether these clips are integrated with other content (such as online-only content)

that has not been shown on television with captions, how will industry comply with such a requirement?

That is, we seek comment on the technical challenges associated with captioning such clips. Will

industry need to caption the covered material anew, or will it be able to repurpose televised captions?181

What would be an appropriate compliance deadline for captioning of covered clips included in mash-ups?

Would video programming providers and distributors need a grace period for captioning the covered clips

in mash-ups following the airing of the associated video programming on television with captions and, if

so, what grace period would be appropriate?

D.

Advance Video Clips

47.

As stated above, we find that further information on the technological challenges of

captioning advance video clips would be useful before we proceed with requiring closed captioning for

such clips.182 Accordingly, we invite comment on application of the IP closed captioning rules to advance

video clips. “Advance” video clips are video clips that are added to the video programming distributor’s

or provider’s library on or after January 1, 2016 for straight lift clips and January 1, 2017 for montages,

when the associated video programming (including the advance video clips) is later shown on television

with captions on or after the compliance deadline and the advance video clips remain online.183 We defer

177 47 U.S.C. § 613(c)(2)(D)(ii) (the regulations “may exempt any service, class of service, program, class of

program, equipment, or class of equipment for which the Commission has determined that the application of such

regulations would be economically burdensome for the provider of such service, program, or equipment”).

178 See supra n. 134.

179 See 47 U.S.C. § 613(c)(2)(A).

180 See id.; Caption Quality Order, 29 FCC Rcd at 2289, ¶ 116.

181 See, e.g., NCTA June 3 Ex Parte Letter at 3 (“Other types of short form video content, such as ‘mash-ups’ that

integrate portions of television content with new content that has never been aired on television (and thus never been

captioned) would need to be captioned from scratch.”); Consumer Groups June 5 Ex Parte Letter at 3 (“We believe

that the portions of mashups that have been shown on television with captions are unequivocally covered by the

CVAA and should be captioned – a process that should be made easier by the possibility of repurposing such

captions.”).

182 See supra Section III.C.4.

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application of the IP closed captioning requirements to advance video clips pending resolution of this

issue. We seek comment on the costs to covered entities, including small entities, and the benefits of

captioning advance video clips.

48.

We understand that video programming distributors and providers sometimes add video

clips to their libraries shortly before the associated video programming is shown on television with

captions, and we think it is important that IP-delivered advance video clips be made accessible to

consumers who are deaf or hard of hearing once the programming associated with such clips has been

shown on television with captions. For example, if a broadcast television station places a clip filmed on

location earlier in the day on its website shortly before the station’s nightly news program, and then the

clip is shown on television with captions as part of the program, we are concerned that consumers who

are deaf or hard of hearing would not have access to the content of the clip if it remains uncaptioned

online.184 Accordingly, we ask whether we should provide a timeframe within which closed captions may

be added to IP-delivered advance video clips, once the associated video programming is shown on

television with captions. For example, would 24 hours be an appropriate timeframe for the grace period?

If not, what timeframe would balance consumers’ desire for prompt access to IP-delivered advance video

clips and industry’s need for time to identify and provide captions on IP-delivered advance video clips?185

Should we adopt an initial timeframe for the grace period, and then decrease or eliminate it over time, in

recognition of the expectation that technology will automate the process such that a grace period will no

longer be needed?186 What compliance deadline should we impose for advance clips? We note that in the

IP Closed Captioning Order, the Commission gave entities a phased-in timeframe for compliance with

respect to the captioning of full-length programming that is in the video programming provider or

distributor’s online library before it is shown on television with captions.187 Should a similar approach be

adopted here? What is the scope of the advance clips under consideration? For example, should the

scope include all advance clips, or should it be limited to clips posted online within a certain timeframe,

such as seven days, before the associated video programming is shown on television? How would any

such limitation be consistent with the CVAA? For what time period should video programming owners,

providers, and distributors be required to monitor the posting of the advance clip online and the associated

(Continued from previous page)

183 We clarify that, if a video programming distributor or provider posts an advance video clip online, and then re-

posts that video clip online after the programming is shown on television with captions on or after the compliance

deadline, the reposted version of the clip would not be considered an advance clip since it was not posted before the

programming was shown on television with captions.

184 Accordingly, we disagree with NCTA that “[a]ny rule must exclude these ‘advance’ clips from a captioning

obligation, and should leave to the reasonable judgment of the programmers whether the ‘advance clip’ retains value

such that replacing it with a captioned version makes sense after the program airs on television with captions.”

NCTA June 3 Ex Parte Letter at 4; see also NAB June 9 Ex Parte Letter at 2.

185 See, e.g., Consumer Groups June 5 Ex Parte Letter at 4 (“We believe that a period on the order of hours and not

days should suffice in all cases, and we would oppose any period longer than 24 hours.”); NAB June 13 Ex Parte

Letter at 1 (“A deadline of 24 hours will provide a reasonable amount of time to ensure that a large variety of clips

are monitored, uploaded, and replaced, without forcing the licensee to limit which content it can publish online

because it is unable to comply with an arbitrarily short timeframe.”). See also Consumer Groups June 13 Ex Parte

Letter at 4 (“If IP distributors instead determined in advance of posting a clip that it was likely to be shown on

television with captions, they could simply ensure that the IP version was captioned from the outset, providing equal

access to viewers who are deaf or hard of hearing and avoiding unnecessary transaction costs.”); NCTA June 18 Ex

Parte Letter at 1 (noting that advance clips “often must be captioned from scratch” and resources “would be

required to track and delete (or replace) such clips”).

186 See NAB June 9 Ex Parte Letter at 2 (“In our discussion with Commission staff on the possibility of a waiver

process, we noted the majority of local stations would need regulatory relief until an automated captioning video

clip solution comes to market. Thus, the burden on both station and FCC resources makes a case-by-case waiver

process impractical.”).

187 IP Closed Captioning Order, 27 FCC Rcd at 809-810, ¶ 34; 47 C.F.R. § 79.4(b)(4).

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video programming on television? If a commenter proposes a period of time, we seek additional

comment on the justification for such proposal, including the costs to industry and the benefits to

consumers, including consumers who are deaf or hard of hearing.

49.

What is the nature and extent of the difficulties associated with captioning advance clips

after their associated video programming has been shown on television with captions? To what extent

and for how long does the industry expect that these technological challenges will continue to hinder

captioning this category of IP-delivered video clips? In the IP Closed Captioning Order, the Commission

required closed captioning of full-length video programming that is in the provider’s or distributor’s

library before it is shown on television with captions, but it extended the deadlines applicable to such

programming in recognition of the need to develop processes for finding and adding captions to this

category of programming.188 How should the Commission justify any differing treatment of advance IP-

delivered video clips?189 Are any differences in treatment justified by Hulu’s assertion that “clips have a

shorter shelf life for viewership than long-form content,”190 or are Consumer Groups correct that many

video clips “are likely to live on the Internet indefinitely”?191 For purposes of quantifying the burden and

difficulty in captioning such clips after they appear on television with captions after the applicable

deadline, we seek comment on the likely volume of advance video clips in providers’ online libraries.

How would the “mechanism” referenced above apply in the context of such video clips, and how would

third party video programming distributors and providers comply with a requirement to caption them?192

What is the likelihood that a requirement to caption advance video clips will result in the removal of these

clips and should that factor into our analysis?193

50.

Even if advance clips are not excerpts of programs shown on television with captions at

the time they are initially posted online, we invite comment on whether their status changes once the

associated video programming is shown on television with captions thus triggering the captioning

requirement.194 Are there any statutory exemptions that would apply to these clips or to a subset of these

clips?195 How would the costs of compliance with such a captioning requirement for advance clips

compare to the benefits to consumers? We ask video programming providers and distributors to provide

information on their standard practices for removing video clips previously posted online. Do video clips

tend to remain online indefinitely, and if so, why? What aspects of the practices now used to post and

188 See IP Closed Captioning Order, 27 FCC Rcd at 809-10, ¶ 34. Additionally, instead of requiring captions

immediately as is otherwise the case, the Commission adopted permissible timeframes between the posting of the

program file and updating it to include closed captions. See id. at 810, ¶ 34.

189 See Consumer Groups Reply at 11 (arguing that the Commission should cover advance video clips just as it

covered full-length IP-delivered programming that is in the video programming provider or distributor’s online

library before it is shown on television with captions).

190 See Hulu Apr. 1 Ex Parte Letter at 3.

191 See Consumer Groups Mar. 28 Ex Parte Letter at 6 (“Many clips are likely to live on the Internet

indefinitely . . . .”).

192 See supra Section IV.A.

193 See NAB Reply at 9.

194 See supra ¶¶ 10-11; NCTA Apr. 25 Ex Parte Letter at 2 (claiming that “clips created and posted online before

being televised” are “not excerpted from full-length TV programs aired with captions and therefore would not fall

within the scope of the CVAA”).

195 For example, we note that the statute permits exemptions due to economic burden. See 47 U.S.C. §

613(c)(2)(D)(ii) (permitting the Commission’s implementing regulations to “exempt any service, class of service,

program, class of program, equipment, or class of equipment for which the Commission has determined that the

application of such regulations would be economically burdensome for the provider of such service, program, or

equipment”).

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maintain clips online would need to be changed to comply with the imposition of closed captioning

requirements for advance video clips?

V.

PROCEDURAL MATTERS

A.

Regulatory Flexibility Act

51.

Final Regulatory Flexibility Analysis. As required by the Regulatory Flexibility Act of

1980, as amended (“RFA”),196 the Commission has prepared a Final Regulatory Flexibility Analysis

(“FRFA”) relating to the Video Clips Order in MB Docket No. 11-154. The FRFA is set forth in

Appendix B.

52.

Initial Regulatory Flexibility Analysis. As required by the RFA, the Commission has

prepared an Initial Regulatory Flexibility Analysis (“IRFA”) relating to the Further Notice. The IRFA is

attached to this Second Further Notice of Proposed Rulemaking as Appendix C.

B.

Paperwork Reduction Act

53.

The Video Clips Order does not contain proposed information collection(s) subject to the

Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. In addition, therefore, it does not contain

any new or modified information collection burden for small business concerns with fewer than 25

employees, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44

U.S.C. 3506(c)(4).

54.

The Further Notice may result in new or revised information collection requirements. If

the Commission adopts any new or revised information collection requirement, the Commission will

publish a notice in the Federal Register inviting the public to comment on the requirement, as required by

the Paperwork Reduction Act of 1995, Public Law 104-13 (44 U.S.C. §§ 3501-3520). In addition,

pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. §

3506(c)(4), the Commission seeks specific comment on how it might “further reduce the information

collection burden for small business concerns with fewer than 25 employees.”

C.

Congressional Review Act

55.

The Commission will send a copy of the Video Clips Order in MB Docket No. 11-154 in

a report to be sent to Congress and the Government Accountability Office pursuant to the Congressional

Review Act, see 5 U.S.C. § 801(a)(1)(A).

D.

Ex Parte Rules

56.

Permit-But-Disclose. This proceeding shall be treated as a “permit-but-disclose”

proceeding in accordance with the Commission’s ex parte rules.197 Persons making ex parte presentations

must file a copy of any written presentation or a memorandum summarizing any oral presentation within

two business days after the presentation (unless a different deadline applicable to the Sunshine period

applies). Persons making oral ex parte presentations are reminded that memoranda summarizing the

presentation must (1) list all persons attending or otherwise participating in the meeting at which the ex

parte presentation was made, and (2) summarize all data presented and arguments made during the

presentation. If the presentation consisted in whole or in part of the presentation of data or arguments

already reflected in the presenter’s written comments, memoranda or other filings in the proceeding, the

presenter may provide citations to such data or arguments in his or her prior comments, memoranda, or

other filings (specifying the relevant page and/or paragraph numbers where such data or arguments can be

found) in lieu of summarizing them in the memorandum. Documents shown or given to Commission

196 See 5 U.S.C. § 603. The RFA, see 5 U.S.C. § 601 et seq., has been amended by the Small Business Regulatory

Enforcement Fairness Act of 1996 (“SBREFA”), Pub. L. No. 104-121, Title II, 110 Stat. 857 (1996). The SBREFA

was enacted as Title II of the Contract with America Advancement Act of 1996 (“CWAAA”).

197 47 C.F.R. §§ 1.1200 et seq.

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staff during ex parte meetings are deemed to be written ex parte presentations and must be filed

consistent with rule 1.1206(b). In proceedings governed by rule 1.49(f) or for which the Commission has

made available a method of electronic filing, written ex parte presentations and memoranda summarizing

oral ex parte presentations, and all attachments thereto, must be filed through the electronic comment

filing system available for that proceeding, and must be filed in their native format (e.g., .doc, .xml, .ppt,

searchable .pdf). Participants in this proceeding should familiarize themselves with the Commission’s ex

parte rules.

E.

Filing Requirements

57.

Comments and Replies. Pursuant to Sections 1.415 and 1.419 of the Commission’s rules,

47 C.F.R. §§ 1.415, 1.419, interested parties may file comments and reply comments on or before the

dates indicated on the first page of this document. Comments may be filed using the Commission’s

Electronic Comment Filing System (ECFS). See Electronic Filing of Documents in Rulemaking

Proceedings, 63 FR 24121 (1998).

Electronic Filers: Comments may be filed electronically using the Internet by accessing the

ECFS: http://fjallfoss.fcc.gov/ecfs2/.

Paper Filers: Parties who choose to file by paper must file an original and one copy of each

filing. If more than one docket or rulemaking number appears in the caption of this

proceeding, filers must submit two additional copies for each additional docket or rulemaking

number.

Filings can be sent by hand or messenger delivery, by commercial overnight courier, or by

first-class or overnight U.S. Postal Service mail. All filings must be addressed to the

Commission’s Secretary, Office of the Secretary, Federal Communications Commission.

All hand-delivered or messenger-delivered paper filings for the Commission’s Secretary must

be delivered to FCC Headquarters at 445 12th St., SW, Room TW-A325, Washington, DC

20554. The filing hours are 8:00 a.m. to 7:00 p.m. All hand deliveries must be held together

with rubber bands or fasteners. Any envelopes and boxes must be disposed of before

entering the building.

Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail)

must be sent to 9300 East Hampton Drive, Capitol Heights, MD 20743.

U.S. Postal Service first-class, Express, and Priority mail must be addressed to 445 12th

Street, SW, Washington, DC 20554.

58.

Availability of Documents. Comments, reply comments, and ex parte submissions will

be available for public inspection during regular business hours in the FCC Reference Center, Federal

Communications Commission, 445 12th Street, S.W., CY-A257, Washington, D.C., 20554. These

documents will also be available via ECFS. Documents will be available electronically in ASCII,

Microsoft Word, and/or Adobe Acrobat.

59.

People with Disabilities. To request materials in accessible formats for people with

disabilities (Braille, large print, electronic files, audio format), send an e-mail to fcc504@fcc.gov or call

the FCC’s Consumer and Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432

(TTY).

F.

Additional Information

60.

For additional information on this proceeding, contact Diana Sokolow,

Diana.Sokolow@fcc.gov, of the Policy Division, Media Bureau, (202) 418-2120.

VI.

ORDERING CLAUSES

61.

Accordingly, IT IS ORDERED that, pursuant to the authority found in Sections 4(i),

4(j), 303, and 713 of the Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i), 154(j), 303, and

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613, this Second Order on Reconsideration and Second Further Notice of Proposed Rulemaking IS

ADOPTED, effective thirty (30) days after the date of publication in the Federal Register.

62.

IT IS ORDERED that, pursuant to the authority found in Sections 4(i), 4(j), 303, and

713 of the Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i), 154(j), 303, and 613, the

Commission’s rules ARE HEREBY AMENDED as set forth in Appendix A.

63.

IT IS FURTHER ORDERED that the Commission’s Consumer and Governmental

Affairs Bureau, Reference Information Center, SHALL SEND a copy of this Second Order on

Reconsideration and Second Further Notice of Proposed Rulemaking in MB Docket No. 11-154,

including the Final Regulatory Flexibility Analysis and the Initial Regulatory Flexibility Analysis, to the

Chief Counsel for Advocacy of the Small Business Administration.

64.

IT IS FURTHER ORDERED that the Commission SHALL SEND a copy of this

Second Order on Reconsideration and Second Further Notice of Proposed Rulemaking in MB Docket

No. 11-154 in a report to be sent to Congress and the Government Accountability Office pursuant to the

Congressional Review Act, see 5 U.S.C. § 801(a)(1)(A).

65.

IT IS FURTHER ORDERED that Consumer Groups’ Petition for Reconsideration,

filed April 27, 2012, is GRANTED IN PART, to the extent provided herein.

FEDERAL COMMUNICATIONS COMMISSION

Marlene H. Dortch

Secretary

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APPENDIX A

Final Rules

The Federal Communications Commission amends 47 CFR part 79 as follows:

PART 79 – Accessibility of Video Programming

1.

The authority citation for part 79 continues to read as follows:

Authority: 47 U.S.C. 151, 152(a), 154(i), 303, 307, 309, 310, 330, 544a, 613, 617.

2.

Amend § 79.4 by renumbering paragraph (b) as paragraph (b)(1) and adding a new (b)(2) to read

as follows:

§ 79.4 Closed captioning of video programming delivered using Internet protocol.

* * * * *

(b) Requirements for closed captioning of Internet protocol-delivered video programming.

(1) All nonexempt full-length video programming delivered using Internet protocol must be provided

with closed captions if the programming is published or exhibited on television in the United States with

captions on or after the following dates:

(i) September 30, 2012, for all prerecorded programming that is not edited for Internet distribution, unless

it is subject to paragraph (b)(1)(iv) of this section.

(ii) March 30, 2013, for all live and near-live programming, unless it is subject to paragraph (b)(1)(iv) of

this section.

(iii) September 30, 2013, for all prerecorded programming that is edited for Internet distribution, unless it

is subject to paragraph (b)(1)(iv) of this section.

(iv) All programming that is already in the video programming distributor’s or provider’s library before it

is shown on television with captions must be captioned within 45 days after the date it is shown on

television with captions on or after March 30, 2014 and before March 30, 2015. Such programming must

be captioned within 30 days after the date it is shown on television with captions on or after March 30,

2015 and before March 30, 2016. Such programming must be captioned within 15 days after the date it is

shown on television with captions on or after March 30, 2016.

(2) All nonexempt video clips delivered using Internet protocol must be provided with closed captions if

the video programming distributor or provider posts on its website or application a video clip of video

programming that it published or exhibited on television in the United States with captions on or after the

applicable compliance deadline. The requirements contained in this paragraph shall not apply to video

clips added to the video programming distributor’s or provider’s library before the video programming

distributor or provider published or exhibited the associated video programming on television in the

United States with captions on or after the applicable compliance deadline.

(i) The requirements contained in paragraph (2) shall apply with the following compliance deadlines:

(A) January 1, 2016, where the video clip contains a single excerpt of a captioned television program with

the same video and audio that was presented on television.

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(B) January 1, 2017, where a single file contains multiple video clips that each contain a single excerpt of

a captioned television program with the same video and audio that was presented on television.

(C) July 1, 2017, for video clips of live and near-live programming.

(ii) Closed captions must be provided for video clips of live programming within 12 hours after the

conclusion of the associated video programming’s publication or exhibition on television in the United

States with captions. Closed captions must be provided for video clips of near-live programming within

eight hours after the conclusion of the associated video programming’s publication or exhibition on

television in the United States with captions.

* * * * *

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APPENDIX B

Final Regulatory Flexibility Analysis

1.

As required by the Regulatory Flexibility Act of 1980, as amended (“RFA”),1 an Initial

Regulatory Flexibility Analysis (“IRFA”) was incorporated into the Notice of Proposed Rulemaking in

this proceeding.2 The Federal Communications Commission (“Commission”) sought written public

comment on the proposals in the NPRM, including comment on the IRFA. The Media Bureau issued a

public notice seeking comment on the closed captioning of Internet protocol-delivered video clips, and

that public notice also referenced the Initial Regulatory Flexibility Analysis included in the NPRM in this

proceeding, which identified small entities that might be affected.3 The Commission received no

comments on the IRFA. This present Final Regulatory Flexibility Analysis (“FRFA”) conforms to the

RFA.4

A.

Need for, and Objectives of, the Second Report and Order

2.

One of the Commission’s priorities is to ensure that all individuals, especially individuals

with disabilities, are able to enjoy the full benefits of broadband technology, including the services that

broadband enables such as online video programming. Online viewing of video programming is

becoming increasingly significant, and one aspect of this development is that more and more consumers

are receiving news, sports, and entertainment programming in the form of online video clips.5 In the

Second Order on Reconsideration (“Video Clips Order”), as part of our continued implementation of the

Twenty-First Century Communications and Video Accessibility Act of 2010 (“CVAA”),6 we conclude

that clips of video programming covered by the statute must be captioned when delivered using Internet

protocol (“IP”) and set out a schedule of deadlines.

3.

When the Commission initially adopted IP closed captioning requirements pursuant to its

responsibilities under the CVAA it applied the requirements to full-length video programming and not to

1 See 5 U.S.C. § 603. The RFA, see 5 U.S.C. § 601 et seq., has been amended by the Small Business Regulatory

Enforcement Fairness Act of 1996 (“SBREFA”), Pub. L. No. 104-121, Title II, 110 Stat. 857 (1996). The SBREFA

was enacted as Title II of the Contract with America Advancement Act of 1996 (“CWAAA”).

2 See Closed Captioning of Internet Protocol-Delivered Video Programming: Implementation of the Twenty-First

Century Communications and Video Accessibility Act of 2010, Notice of Proposed Rulemaking, 26 FCC Rcd 13734

(2011) (“NPRM”).

3 Media Bureau Seeks Comment on Application of the IP Closed Captioning Rules to Video Clips, Public Notice, 28

FCC Rcd 16699 (MB, 2013) (“Video Clips PN”).

4 See 5 U.S.C. § 604.

5 See, e.g., CEA News Release, Change is in the Air: U.S. Households Viewing TV Programming only via the

Internet are Poised to Surpass those Viewing only via Antenna, Finds New CEA Study, June 5, 2014, available at

https://www.ce.org/News/News-Releases/Press-Releases/2014/OTA-Study_060514.aspx (last visited June 11, 2014)

(citing the study’s finding that “viewership of video programming on connected devices continues to grow”); Global

Web Index, Chart of the Day from March 14, 2014, available at

https://www.globalwebindex.net/products/chart_of_the_day/14th-march-2014-77-percent-of-internet-users-

watching-video-clips (last visited June 11, 2014) (“We track the rising popularity of watching video clips. By the

end of 2013, 77% of [I]nternet users said they had done this in the last month – a figure which corresponds to more

than 1.152 billion people (up from 711 million back in early 2011).”); Consumer Groups, Report on the State of

Closed Captioning of Internet Protocol-Delivered Video Programming, MB Docket No. 11-154 and CG Docket No.

05-231 (May 16, 2013) (evaluating a variety of online video clips, including news clips and clips of entertainment

programming, to determine the volume of captioned online video clips).

6 Pub. L. No. 111-260, 124 Stat. 2751 (2010). See also Amendment of the Twenty-First Century Communications

and Video Accessibility Act of 2010, Pub. L. No. 111-265, 124 Stat. 2795 (2010) (making technical corrections to

the CVAA).

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video clips.7 The Commission said that it might in the future extend the IP closed captioning

requirements to video clips if it found that consumers who are deaf or hard of hearing are denied access to

critical areas of programming, such as a news, because the programming is posted online as video clips.8

In response to a petition for reconsideration filed by consumer groups, and at the Commission’s direction,

the Media Bureau issued a Public Notice seeking updated information on the closed captioning of IP-

delivered video clips, including the extent to which the industry has voluntarily captioned these clips.9

After reviewing the record compiled in this proceeding, we find that a significant percentage of video

clips continue to remain inaccessible to consumers who are deaf or hard of hearing. In addition, we have

reconsidered the Commission’s earlier interpretation of the statute and conclude that Congress intended

the IP closed captioning requirements to extend to all covered video programming including clips, but left

to our discretion the timeline for compliance with this requirement. Accordingly, to implement the statute

fully, and in furtherance of Congress’s intent to ensure that individuals who are deaf or hard of hearing

have better access to online video programming,10 the Video Clips Order reconsiders the Commission’s

earlier decision and revises the Commission’s regulations to require the provision of closed captioning on

video clips delivered using IP when the programming was published or exhibited on television with

captions. As discussed in Section III of the Video Clips Order, it imposes closed captioning requirements

on IP-delivered video clips by adopting rules that will:

Extend the IP closed captioning requirements to IP-delivered video clips if the video

programming distributor or provider11 posts on its website or application (“app”) a video clip of

video programming that it published or exhibited on television in the United States with captions,

regardless of the content or length of the video clip.

Pursuant to our authority to establish an appropriate schedule of deadlines for purposes of the IP

closed captioning requirements,12 adopt a compliance deadline of January 1, 2016 for “straight

lift” clips, which contain a single excerpt of a captioned television program with the same video

and audio that was presented on television, and January 1, 2017 for “montages,” which contain

multiple straight lift clips.

After the applicable deadlines, require IP-delivered video clips to be provided with closed

captions at the time the clips are posted online, except as otherwise provided.

For clips of video programming previously shown live or near-live on television with captions,13

7 Closed Captioning of Internet Protocol-Delivered Video Programming: Implementation of the Twenty-First

Century Communications and Video Accessibility Act of 2010, Report and Order, 27 FCC Rcd 787, 816-18, ¶¶ 44-

48 (2012) (“IP Closed Captioning Order”).

8 Id. at 818, ¶ 48.

9 Video Clips PN.

10 See S. Rep. No. 111-386, 111th Cong., 2d Sess. at 1 (2010) (“Senate Committee Report”) (indicating that Congress

sought to “update the communications laws to help ensure that individuals with disabilities are able to fully utilize

communications services and equipment and better access video programming”); H.R. Rep. No. 111-563, 111th

Cong., 2d Sess. at 19 (2010) (“House Committee Report”) (same); 156 Cong. Rec. H6004 (daily ed. Jul. 26, 2010)

(statement of then-Rep. Markey) (noting the “whole series of legislative initiatives aimed at broadening the disabled

community’s access to technologies that can help them do things that most Americans take for granted”); id. at

H6005 (statement of Rep. Stearns) (“[I]t’s important that people with disabilities are not left behind, have access and

are afforded the opportunity to enjoy this wide variety of technology.”).

11 When we use the term video programming distributor or provider herein, we invoke the definition of that term in

the Commission’s IP closed captioning rules, which is “[a]ny person or entity that makes available directly to the

end user video programming through a distribution method that uses Internet protocol.” 47 C.F.R. § 79.4(a)(3).

12 47 U.S.C. § 613(c)(2)(B).

13 Industry refers to these video clips as “time-sensitive.”

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require captions beginning July 1, 2017 and for the present time allow a grace period of 12 hours

after the live programming is shown on television and eight hours after the near-live

programming is shown on television before the clip must be captioned online.

Find that compliance with the new requirements would be economically burdensome for video

clips that are in the video programming distributor’s or provider’s online library before January 1,

2016 for straight lift clips, and January 1, 2017 for montages, and thus exempt this class of video

clips from coverage; and

Generally apply the IP closed captioning requirements to video clips in the same manner that they

apply to full-length video programming, which among other things means that the quality

requirements applicable to full-length IP-delivered video programming will apply to video clips.

In short, while we expect that some small entities will be impacted by these rules, we find that any

economic impact of these rules on small entities will be mitigated by the availability of exemptions due to

economic burden, and by the provision of the CVAA providing that a de minimis failure to comply with

these rules will not be treated as a violation.

B.

Summary of Significant Issues Raised By Public Comments in Response to the

IRFA

4.

No comments were filed in response to the IRFA. Some parties have made filings on the

record that address the potential impact on small entities of rules requiring closed captioning of IP-

delivered video clips. Specifically, one commenter asserted that small broadcasters that currently

voluntarily caption certain televised programming might cease doing so, to avoid triggering a requirement

for captioning of online clips of that programming.14 Another commenter argued that the technology is

still developing and stated, “If broadcasters, perhaps particularly smaller ones, were immediately to face

FCC complaint procedures and potential enforcement actions for failing to caption online video clips with

the requisite quality, this would act as a disincentive to place video clips online, at least until clip

captioning technology improves in both quality and reliability.”15

C.

Description and Estimate of the Number of Small Entities to Which the Rules Will

Apply

5.

The RFA directs agencies to provide a description of and an estimate of the number of

small entities to which the rules will apply.16 The RFA generally defines the term “small entity” as

having the same meaning as the terms “small business,” “small organization,” and “small governmental

jurisdiction.”17 In addition, the term “small business” has the same meaning as the term “small business

concern” under the Small Business Act.18 A “small business concern” is one which: (1) is independently

14 Reply Comments of the Association of Public Television Stations and the Public Broadcasting Service at 2, 5-6.

But see Consumer Groups Reply to Opposition of APTS/PBS, NAB, and NCTA at 5 (arguing that reductions in

captioning costs no longer justify the television closed captioning exemption cited by APTS/PBS, in any event, and

that the availability of exemptions due to economic burden should alleviate the concerns of APTS/PBS).

15 Reply Comments of the National Association of Broadcasters at 10. See also id. at 5, n. 8 (“Some small market

stations report that they can only afford to caption clips online if owned and subsidized by a larger market station,

given the cost of clip captioning and the lack of revenue from online video clips.”); Letter from Susan L, Fox, Vice

President, Government Relations, The Walt Disney Company, to Marlene H. Dortch, Secretary, FCC, at 2 (June 18,

2014) (“[T]he key aspect in crafting a realistic regime would be a long implementation period so that stations and

programmers (both big and small) could budget for and undertake such a reconfiguration.”) (emphasis in original).

16 5 U.S.C. § 604(a)(4).

17 Id. § 601(6).

18 Id. § 601(3) (incorporating by reference the definition of “small-business concern” in the Small Business Act, 15

U.S.C. § 632). Pursuant to 5 U.S.C. § 601(3), the statutory definition of a small business applies “unless an agency,

(continued….)

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owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria

established by the Small Business Administration (“SBA”).19 Below are descriptions of the small entities

that may be affected by the rules adopted in the Video Clips Order, including, where feasible, an estimate

of the number of such small entities.

6.

Small Businesses, Small Organizations, and Small Governmental Jurisdictions. Our

action may, over time, affect small entities that are not easily categorized at present. We therefore

describe here, at the outset, three comprehensive, statutory small entity size standards.20 First, according

to the SBA Office of Advocacy, in 2010, there were 27.9 million small businesses in the United States.21

In addition, a “small organization” is generally “any not-for-profit enterprise which is independently

owned and operated and is not dominant in its field.”22 Nationwide, as of 2007, there were approximately

1,621,315 small organizations.23 Finally, the term “small governmental jurisdiction” is defined generally

as “governments of cities, towns, townships, villages, school districts, or special districts, with a

population of less than fifty thousand.”24 Census Bureau data for 2011 indicate that there were 89,476

local governmental jurisdictions in the United States.25 We estimate that, of this total, a substantial

majority may qualify as “small governmental jurisdictions.”26 Thus, we estimate that most governmental

jurisdictions are small.

7.

Wired Telecommunications Carriers. The North American Industry Classification

System (“NAICS”) defines “Wired Telecommunications Carriers” as follows: “This industry comprises

establishments primarily engaged in operating and/or providing access to transmission facilities and

infrastructure that they own and/or lease for the transmission of voice, data, text, sound, and video using

wired telecommunications networks. Transmission facilities may be based on a single technology or a

(Continued from previous page)

after consultation with the Office of Advocacy of the Small Business Administration and after opportunity for public

comment, establishes one or more definitions of such term which are appropriate to the activities of the agency and

publishes such definition(s) in the Federal Register.”

19 15 U.S.C. § 632.

20 See 5 U.S.C. §§ 601(3)-(6).

21 See SBA, Office of Advocacy, “Frequently Asked Questions,” (dated September 2012); available at

http://www.sba.gov/sites/default/files/FAQ_Sept_2012.pdf. The SBA Office of Advocacy defines a small business

as an independent business having fewer than 500 employees. In 2010 there were 18,500 firms with 500 employees

or more. Id.

22 5 U.S.C. § 601(4).

23 INDEPENDENT SECTOR, THE NEW NONPROFIT ALMANAC & DESK REFERENCE (2010).

24 5 U.S.C. § 601(5).

25 U.S. CENSUS BUREAU, STATISTICAL ABSTRACT OF THE UNITED STATES: 2011, Table 427 (2007).

26 The 2007 U.S Census data for small governmental organizations indicate that there were 89,476 local

governments in 2007. U.S. CENSUS BUREAU, STATISTICAL ABSTRACT OF THE UNITED STATES 2011,

Table 428. The criterion by which the size of such local governments is determined to be small is a population of

fewer than 50,000. 5 U.S.C. § 601(5). However, since the Census Bureau, in compiling the cited data, does not

state that it applies that criterion, it cannot be determined with precision how many such local governmental

organizations are small. Nonetheless, the inference seems reasonable that a substantial number of these

governmental organizations have a population of fewer than 50,000. To look at Table 428 in conjunction with a

related set of data in Table 429 in the Census’s Statistical Abstract of the U.S., that inference is further supported by

the fact that in both Tables, many sub-entities that may well be small are included in the 89,476 local governmental

organizations, e.g. county, municipal, township and town, school district and special district entities. Measured by a

criterion of a population of fewer than 50,000, many of the cited sub-entities in this category seem more likely than

larger county-level governmental organizations to have small populations. Accordingly, of the 89,746 small

governmental organizations identified in the 2007 Census, the Commission estimates that a substantial majority are

small.

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combination of technologies. Establishments in this industry use the wired telecommunications network

facilities that they operate to provide a variety of services, such as wired telephony services, including

VoIP services; wired (cable) audio and video programming distribution; and wired broadband Internet

services. By exception, establishments providing satellite television distribution services using facilities

and infrastructure that they operate are included in this industry.”27 The SBA has developed a small

business size standard for wireline firms for the broad economic census category of “Wired

Telecommunications Carriers.” Under this category, a wireline business is small if it has 1,500 or fewer

employees.28 Census data for 2007 shows that there were 31,996 establishments that operated for the

entire year.29 Of this total, 30,178 establishments had fewer than 100 employees, and 1,818

establishments had 100 or more employees.30 Therefore, under this size standard, we estimate that the

majority of businesses can be considered small entities.

8.

Cable Television Distribution Services. Since 2007, these services have been defined

within the broad economic census category of Wired Telecommunications Carriers, which category is

defined above.31 The SBA has developed a small business size standard for this category, which is: All

such businesses having 1,500 or fewer employees.32 Census data for 2007 shows that there were 31,996

establishments that operated for the entire year.33 Of this total, 30,178 establishments had fewer than 100

employees, and 1,818 establishments had 100 or more employees.34 Therefore, under this size standard,

we estimate that the majority of businesses can be considered small entities.

9.

Cable Companies and Systems. The Commission has also developed its own small

business size standards, for the purpose of cable rate regulation. Under the Commission’s rate regulation

rules, a “small cable company” is one serving 400,000 or fewer subscribers, nationwide.35 According to

27 U.S. Census Bureau, 2012 NAICS Definitions, “517110 Wired Telecommunications Carriers” at

http://www.census.gov/cgi-bin/sssd/naics/naicsrch. Examples of this category are: broadband Internet service

providers (e.g., cable, DSL); local telephone carriers (wired); cable television distribution services; long-distance

telephone carriers (wired); closed circuit television (“CCTV”) services; VoIP service providers, using own operated

wired telecommunications infrastructure; direct-to-home satellite system (“DTH”) services; telecommunications

carriers (wired); satellite television distribution systems; and multichannel multipoint distribution services

(“MMDS”).

28 13 C.F.R. § 121.201; NAICS code 517110.

29 U.S. Census Bureau, 2007 Economic Census. See U.S. Census Bureau, American FactFinder, “Information:

Subject Series – Estab and Firm Size: Employment Size of Establishments for the United States: 2007 – 2007

Economic Census,” NAICS code 517110, Table EC0751SSSZ2; available at

http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml.

30 Id.

31 See also U.S. Census Bureau, 2012 NAICS Definitions, “517110 Wired Telecommunications Carriers” at

http://www.census.gov/cgi-bin/sssd/naics/naicsrch.

32 13 C.F.R. § 121.201; NAICS code 517110.

33 U.S. Census Bureau, 2007 Economic Census. See U.S. Census Bureau, American FactFinder, “Information:

Subject Series – Estab and Firm Size: Employment Size of Establishments for the United States: 2007 – 2007

Economic Census,” NAICS code 517110, Table EC0751SSSZ2; available at

http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml.

34 Id.

35 47 C.F.R. § 76.901(e). The Commission determined that this size standard equates approximately to a size

standard of $100 million or less in annual revenues. Implementation of Sections of the Cable Television Consumer

Protection and Competition Act of 1992: Rate Regulation, MM Docket No. 92-266, MM Docket No. 93-215, Sixth

Report and Order and Eleventh Order on Reconsideration, 10 FCC Rcd 7393, 7408 (1995).

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SNL Kagan, there are 1,258 cable operators.36 Of this total, all but 10 incumbent cable companies are

small under this size standard.37 In addition, under the Commission’s rules, a “small system” is a cable

system serving 15,000 or fewer subscribers.38

Current Commission records show 4,584 cable systems

nationwide.39 Of this total, 4,012 cable systems have fewer than 20,000 subscribers, and 572 systems

have 20,000 subscribers or more, based on the same records. Thus, under this standard, we estimate that

most cable systems are small.

10.

Cable System Operators (Telecom Act Standard). The Communications Act of 1934, as

amended, also contains a size standard for small cable system operators, which is “a cable operator that,

directly or through an affiliate, serves in the aggregate fewer than 1 percent of all subscribers in the

United States and is not affiliated with any entity or entities whose gross annual revenues in the aggregate

exceed $250,000,000.”40 The Commission has determined that an operator serving fewer than 677,000

subscribers shall be deemed a small operator, if its annual revenues, when combined with the total annual

revenues of all its affiliates, do not exceed $250 million in the aggregate.41 Based on available data, we

find that all but 10 incumbent cable operators are small under this size standard.42 We note that the

Commission neither requests nor collects information on whether cable system operators are affiliated

with entities whose gross annual revenues exceed $250 million.43 Although it seems certain that some of

these cable system operators are affiliated with entities whose gross annual revenues exceed

$250,000,000, we are unable to estimate with greater precision the number of cable system operators that

would qualify as small cable operators under this definition.

36 Data provided by SNL Kagan to Commission Staff upon request on March 25, 2014. Depending upon the number

of homes and the size of the geographic area served, cable operators use one or more cable systems to provide video

service. See Annual Assessment of the Status of Competition in the Market for Delivery of Video Programming, MB

Docket No. 12-203, Fifteenth Report, 28 FCC Rcd 10496, 10505-06, ¶ 24 (2013) (“15th Annual Competition

Report”).

37 SNL Kagan, U.S. Multichannel Top Cable MSOs, http://www.snl.com/interactivex/TopCableMSOs.aspx (visited

June 26, 2014). We note that when this size standard (i.e., 400,000 or fewer subscribers) is applied to all MVPD

operators, all but 14 MVPD operators would be considered small. 15th Annual Competition Report, 28 FCC Rcd at

10507-08, ¶¶ 27-28 (subscriber data for DBS and Telephone MVPDs). The Commission applied this size standard

to MVPD operators in its implementation of the CALM Act. See Implementation of the Commercial Advertisement

Loudness Mitigation (CALM) Act, MB Docket No. 11-93, Report and Order, 26 FCC Rcd 17222, 17245-46, ¶ 37

(2011) (“CALM Act Report and Order”) (defining a smaller MVPD operator as one serving 400,000 or fewer

subscribers nationwide, as of December 31, 2011).

38 47 C.F.R. § 76.901(c).

39 The number of active, registered cable systems comes from the Commission’s Cable Operations and Licensing

System (COALS) database on July 1, 2014. A cable system is a physical system integrated to a principal headend.

40 47 U.S.C. § 543(m)(2); see 47 C.F.R. § 76.901(f) & nn. 1-3.

41 47 C.F.R. § 76.901(f); see Public Notice, FCC Announces New Subscriber Count for the Definition of Small

Cable Operator, 16 FCC Rcd 2225 (Cable Services Bureau, 2001) (establishing the threshold for determining

whether a cable operator meets the definition of small cable operator at 677,000 subscribers and stating that this

threshold will remain in effect for purposes of Section 76.901(f) until the Commission issues a superseding public

notice). We note that current industry data indicates that there are approximately 54 million incumbent cable video

subscribers in the United States today and that this updated number may be considered in developing size standards

in a context different than Section 76.901(f). NCTA, Industry Data, Cable’s Customer Base (June 2014),

https://www.ncta.com/industry-data (visited June 25, 2014).

42 See SNL Kagan, U.S. Multichannel Top Cable MSOs, http://www.snl.com/interactivex/TopCableMSOs.aspx

(visited June 26, 2014).

43 The Commission does receive such information on a case-by-case basis if a cable operator appeals a local

franchise authority’s finding that the operator does not qualify as a small cable operator pursuant to § 76.901(f) of

the Commission’s rules. See 47 C.F.R. § 76.901(f).

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11.

Direct Broadcast Satellite (DBS) Service. DBS service is a nationally distributed

subscription service that delivers video and audio programming via satellite to a small parabolic “dish”

antenna at the subscriber’s location. DBS, by exception, is now included in the SBA’s broad economic

census category, Wired Telecommunications Carriers,44 which was developed for small wireline

businesses. Under this category, the SBA deems a wireline business to be small if it has 1,500 or fewer

employees.45 Census data for 2007 shows that there were 31,996 establishments that operated for the

entire year.46 Of this total, 30,178 establishments had fewer than 100 employees, and 1,818

establishments had 100 or more employees.47 Therefore, under this size standard, the majority of such

businesses can be considered small. However, the data we have available as a basis for estimating the

number of such small entities were gathered under a superseded SBA small business size standard

formerly titled “Cable and Other Program Distribution.” The definition of Cable and Other Program

Distribution provided that a small entity is one with $12.5 million or less in annual receipts.48 Currently,

only two entities provide DBS service, which requires a great investment of capital for operation:

DIRECTV and DISH Network.49 Each currently offers subscription services. DIRECTV and DISH

Network each reports annual revenues that are in excess of the threshold for a small business. Because

DBS service requires significant capital, we believe it is unlikely that a small entity as defined by the

SBA would have the financial wherewithal to become a DBS service provider.

12.

Satellite Master Antenna Television (SMATV) Systems, also known as Private Cable

Operators (PCOs). SMATV systems or PCOs are video distribution facilities that use closed

transmission paths without using any public right-of-way. They acquire video programming and

distribute it via terrestrial wiring in urban and suburban multiple dwelling units such as apartments and

condominiums, and commercial multiple tenant units such as hotels and office buildings. SMATV

systems or PCOs are now included in the SBA’s broad economic census category, Wired

Telecommunications Carriers,50 which was developed for small wireline businesses. Under this category,

the SBA deems a wireline business to be small if it has 1,500 or fewer employees.51 Census data for 2007

shows that there were 31,996 establishments that operated for the entire year.52 Of this total, 30,178

44 This category of Wired Telecommunications Carriers is defined above (“By exception, establishments providing

satellite television distribution services using facilities and infrastructure that they operate are included in this

industry.”). U.S. Census Bureau, 2012 NAICS Definitions, “517110 Wired Telecommunications Carriers” at

http://www.census.gov/cgi-bin/sssd/naics/naicsrch.

45 13 C.F.R. § 121.201; NAICS code 517110.

46 U.S. Census Bureau, 2007 Economic Census. See U.S. Census Bureau, American FactFinder, “Information:

Subject Series – Estab and Firm Size: Employment Size of Establishments for the United States: 2007 – 2007

Economic Census,” NAICS code 517110, Table EC0751SSSZ2; available at

http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml.

47 Id.

48 13 C.F.R. § 121.201; NAICS code 517510 (2002).

49 See 15th Annual Competition Report, at ¶ 27. As of June 2012, DIRECTV is the largest DBS operator and the

second largest MVPD in the United States, serving approximately 19.9 million subscribers. DISH Network is the

second largest DBS operator and the third largest MVPD, serving approximately 14.1 million subscribers. Id. at ¶¶

27, 110-11.

50 This category of Wired Telecommunications Carriers is defined above (“By exception, establishments providing

satellite television distribution services using facilities and infrastructure that they operate are included in this

industry.”). U.S. Census Bureau, 2012 NAICS Definitions, “517110 Wired Telecommunications Carriers” at

http://www.census.gov/cgi-bin/sssd/naics/naicsrch.

51 13 C.F.R. § 121.201; NAICS code 517110.

52 U.S. Census Bureau, 2007 Economic Census. See U.S. Census Bureau, American FactFinder, “Information:

Subject Series – Estab and Firm Size: Employment Size of Establishments for the United States: 2007 – 2007

(continued….)

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establishments had fewer than 100 employees, and 1,818 establishments had 100 or more employees.53

Therefore, under this size standard, the majority of such businesses can be considered small.

13.

Home Satellite Dish (HSD) Service. HSD or the large dish segment of the satellite

industry is the original satellite-to-home service offered to consumers, and involves the home reception of

signals transmitted by satellites operating generally in the C-band frequency. Unlike DBS, which uses

small dishes, HSD antennas are between four and eight feet in diameter and can receive a wide range of

unscrambled (free) programming and scrambled programming purchased from program packagers that

are licensed to facilitate subscribers’ receipt of video programming. Because HSD provides subscription

services, HSD falls within the SBA-recognized definition of Wired Telecommunications Carriers.54 The

SBA has developed a small business size standard for this category, which is: all such businesses having

1,500 or fewer employees.55 Census data for 2007 shows that there were 31,996 establishments that

operated that year.56 Of this total, 30,178 establishments had fewer than 100 employees, and 1,818

establishments had 100 or more employees.57 Therefore, under this size standard, we estimate that the

majority of businesses can be considered small entities.

14.

Open Video Services. The open video system (OVS) framework was established in 1996,

and is one of four statutorily recognized options for the provision of video programming services by local

exchange carriers.58 The OVS framework provides opportunities for the distribution of video

programming other than through cable systems. Because OVS operators provide subscription services,59

OVS falls within the SBA small business size standard covering cable services, which is Wired

Telecommunications Carriers.60 The SBA has developed a small business size standard for this category,

which is: all such businesses having 1,500 or fewer employees.61 Census data for 2007 shows that there

were 31,996 establishments that operated that year.62 Of this total, 30,178 establishments had fewer than

(Continued from previous page)

Economic Census,” NAICS code 517110, Table EC0751SSSZ2; available at

http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml.

53 Id.

54 This category of Wired Telecommunications Carriers is defined above (“By exception, establishments providing

satellite television distribution services using facilities and infrastructure that they operate are included in this

industry.”). U.S. Census Bureau, 2012 NAICS Definitions, “517110 Wired Telecommunications Carriers” at

http://www.census.gov/cgi-bin/sssd/naics/naicsrch.

55 13 C.F.R. § 121.201; NAICS code 517110.

56 U.S. Census Bureau, 2007 Economic Census. See U.S. Census Bureau, American FactFinder, “Information:

Subject Series – Estab and Firm Size: Employment Size of Establishments for the United States: 2007 – 2007

Economic Census,” NAICS code 517110, Table EC0751SSSZ2; available at

http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml.

57 Id.

58 47 U.S.C. § 571(a)(3)-(4). See Annual Assessment of the Status of Competition in the Market for the Delivery of

Video Programming, MB Docket No. 06-189, Thirteenth Annual Report, 24 FCC Rcd 542, 606, ¶ 135 (2009)

(“Thirteenth Annual Cable Competition Report”).

59 See 47 U.S.C. § 573.

60 This category of Wired Telecommunications Carriers is defined above. See also U.S. Census Bureau, 2012

NAICS Definitions, “517110 Wired Telecommunications Carriers” at http://www.census.gov/cgi-

bin/sssd/naics/naicsrch.

61 13 C.F.R. § 121.201; NAICS code 517110.

62 U.S. Census Bureau, 2007 Economic Census. See U.S. Census Bureau, American FactFinder, “Information:

Subject Series – Estab and Firm Size: Employment Size of Establishments for the United States: 2007 – 2007

Economic Census,” NAICS code 517110, Table EC0751SSSZ2; available at

http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml.

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100 employees, and 1,818 establishments had 100 or more employees.63 Therefore, under this size

standard, we estimate that the majority of businesses can be considered small entities. In addition, we

note that the Commission has certified some OVS operators, with some now providing service.64

Broadband service providers (“BSPs”) are currently the only significant holders of OVS certifications or

local OVS franchises.65 The Commission does not have financial or employment information regarding

the entities authorized to provide OVS, some of which may not yet be operational. Thus, again, at least

some of the OVS operators may qualify as small entities.

15.

Wireless cable systems – Broadband Radio Service and Educational Broadband Service.

Wireless cable systems use the Broadband Radio Service (BRS)66 and Educational Broadband Service

(EBS)67 to transmit video programming to subscribers. In connection with the 1996 BRS auction, the

Commission established a small business size standard as an entity that had annual average gross

revenues of no more than $40 million in the previous three calendar years.68 The BRS auctions resulted

in 67 successful bidders obtaining licensing opportunities for 493 Basic Trading Areas (BTAs). Of the 67

auction winners, 61 met the definition of a small business. BRS also includes licensees of stations

authorized prior to the auction. At this time, we estimate that of the 61 small business BRS auction

winners, 48 remain small business licensees. In addition to the 48 small businesses that hold BTA

authorizations, there are approximately 392 incumbent BRS licensees that are considered small entities.69

After adding the number of small business auction licensees to the number of incumbent licensees not

already counted, we find that there are currently approximately 440 BRS licensees that are defined as

small businesses under either the SBA or the Commission’s rules. In 2009, the Commission conducted

Auction 86, the sale of 78 licenses in the BRS areas.70 The Commission offered three levels of bidding

credits: (i) a bidder with attributed average annual gross revenues that exceed $15 million and do not

exceed $40 million for the preceding three years (small business) received a 15 percent discount on its

winning bid; (ii) a bidder with attributed average annual gross revenues that exceed $3 million and do not

exceed $15 million for the preceding three years (very small business) received a 25 percent discount on

its winning bid; and (iii) a bidder with attributed average annual gross revenues that do not exceed $3

million for the preceding three years (entrepreneur) received a 35 percent discount on its winning bid.71

63 Id.

64 A list of OVS certifications may be found at http://www.fcc.gov/mb/ovs/csovscer.html.

65 See Thirteenth Annual Cable Competition Report, 24 FCC Rcd at 606-07, ¶ 135. BSPs are newer businesses that

are building state-of-the-art, facilities-based networks to provide video, voice, and data services over a single

network.

66 BRS was previously referred to as Multipoint Distribution Service (MDS) and Multichannel Multipoint

Distribution Service (MMDS). See Amendment of Parts 21 and 74 of the Commission’s Rules with Regard to Filing

Procedures in the Multipoint Distribution Service and in the Instructional Television Fixed Service and

Implementation of Section 309(j) of the Communications Act—Competitive Bidding, MM Docket No. 94-131, PP

Docket No. 93-253, Report and Order, 10 FCC Rcd 9589, 9593, ¶ 7 (1995).

67 EBS was previously referred to as the Instructional Television Fixed Service (ITFS). See id.

68 47 C.F.R. § 21.961(b)(1).

69 47 U.S.C. § 309(j). Hundreds of stations were licensed to incumbent MDS licensees prior to implementation of

Section 309(j) of the Communications Act of 1934, 47 U.S.C. § 309(j). For these pre-auction licenses, the

applicable standard is SBA’s small business size standard of 1,500 or fewer employees.

70 Auction of Broadband Radio Service (BRS) Licenses, Scheduled for October 27, 2009, Notice and Filing

Requirements, Minimum Opening Bids, Upfront Payments, and Other Procedures for Auction 86, Public Notice, 24

FCC Rcd 8277 (2009).

71 Id. at 8296.

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Auction 86 concluded in 2009 with the sale of 61 licenses.72 Of the 10 winning bidders, two bidders that

claimed small business status won four licenses; one bidder that claimed very small business status won

three licenses; and two bidders that claimed entrepreneur status won six licenses.

16.

In addition, the SBA’s placement of Cable Television Distribution Services in the

category of Wired Telecommunications Carriers is applicable to cable-based Educational Broadcasting

Services. Since 2007, these services have been defined within the broad economic census category of

Wired Telecommunications Carriers,73 which was developed for small wireline businesses. The SBA has

developed a small business size standard for this category, which is: all such businesses having 1,500 or

fewer employees.74 Census data for 2007 shows that there were 31,996 establishments that operated that

year.75 Of this total, 30,178 establishments had fewer than 100 employees, and 1,818 establishments had

100 or more employees.76 Therefore, under this size standard, we estimate that the majority of businesses

can be considered small entities. In addition to Census data, the Commission’s internal records indicate

that as of September 2012, there are 2,241 active EBS licenses.77

The Commission estimates that of these

2,241 licenses, the majority are held by non-profit educational institutions and school districts, which are

by statute defined as small businesses.78

72 Auction of Broadband Radio Service Licenses Closes, Winning Bidders Announced for Auction 86, Down

Payments Due November 23, 2009, Final Payments Due December 8, 2009, Ten-Day Petition to Deny Period,

Public Notice, 24 FCC Rcd 13572 (2009).

73 This category of Wired Telecommunications Carriers is defined above. See also U.S. Census Bureau, 2012

NAICS Definitions, “517110 Wired Telecommunications Carriers” at http://www.census.gov/cgi-

bin/sssd/naics/naicsrch.

74 13 C.F.R. § 121.201; NAICS code 517110.

75 U.S. Census Bureau, 2007 Economic Census. See U.S. Census Bureau, American FactFinder, “Information:

Subject Series – Estab and Firm Size: Employment Size of Establishments for the United States: 2007 – 2007

Economic Census,” NAICS code 517110, Table EC0751SSSZ2; available at

http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml.

76 Id.

77 http://wireless2.fcc.gov/UlsApp/UlsSearch/results.jsp.

78 The term “small entity” within SBREFA applies to small organizations (non-profits) and to small governmental

jurisdictions (cities, counties, towns, townships, villages, school districts, and special districts with populations of

fewer than 50,000). 5 U.S.C. §§ 601(4)-(6).

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17.

Incumbent Local Exchange Carriers (ILECs). Neither the Commission nor the SBA has

developed a small business size standard specifically for incumbent local exchange services. ILECs are

included in the SBA’s economic census category, Wired Telecommunications Carriers.79 Under this

category, the SBA deems a wireline business to be small if it has 1,500 or fewer employees.80 Census

data for 2007 shows that there were 31,996 establishments that operated that year.81 Of this total, 30,178

establishments had fewer than 100 employees, and 1,818 establishments had 100 or more employees.82

Therefore, under this size standard, the majority of such businesses can be considered small.

18.

Small Incumbent Local Exchange Carriers. We have included small incumbent local

exchange carriers in this present RFA analysis. A “small business” under the RFA is one that, inter alia,

meets the pertinent small business size standard (e.g., a telephone communications business having 1,500

or fewer employees), and “is not dominant in its field of operation.”83 The SBA’s Office of Advocacy

contends that, for RFA purposes, small incumbent local exchange carriers are not dominant in their field

of operation because any such dominance is not “national” in scope.84 We have therefore included small

incumbent local exchange carriers in this RFA analysis, although we emphasize that this RFA action has

no effect on Commission analyses and determinations in other, non-RFA contexts.

19.

Competitive Local Exchange Carriers (CLECs), Competitive Access Providers (CAPs),

Shared-Tenant Service Providers, and Other Local Service Providers. Neither the Commission nor the

SBA has developed a small business size standard specifically for these service providers. These entities

are included in the SBA’s economic census category, Wired Telecommunications Carriers.85 Under this

category, the SBA deems a wireline business to be small if it has 1,500 or fewer employees.86 Census

data for 2007 shows that there were 31,996 establishments that operated that year.87 Of this total, 30,178

establishments had fewer than 100 employees, and 1,818 establishments had 100 or more employees.88

Therefore, under this size standard, the majority of such businesses can be considered small.

79 This category of Wired Telecommunications Carriers is defined above. See also U.S. Census Bureau, 2012

NAICS Definitions, “517110 Wired Telecommunications Carriers” at http://www.census.gov/cgi-

bin/sssd/naics/naicsrch.

80 13 C.F.R. § 121.201; NAICS code 517110.

81 U.S. Census Bureau, 2007 Economic Census. See U.S. Census Bureau, American FactFinder, “Information:

Subject Series – Estab and Firm Size: Employment Size of Establishments for the United States: 2007 – 2007

Economic Census,” NAICS code 517110, Table EC0751SSSZ2; available at

http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml.

82 Id.

83 15 U.S.C. § 632.

84 Letter from Jere W. Glover, Chief Counsel for Advocacy, SBA, to William E. Kennard, Chairman, FCC (May 27,

1999). The Small Business Act contains a definition of “small-business concern,” which the RFA incorporates into

its own definition of “small business.” See 15 U.S.C. § 632(a) (Small Business Act); 5 U.S.C. § 601(3) (RFA).

SBA regulations interpret “small business concern” to include the concept of dominance on a national basis. See 13

C.F.R. § 121.102(b).

85 This category of Wired Telecommunications Carriers is defined above. See also U.S. Census Bureau, 2012

NAICS Definitions, “517110 Wired Telecommunications Carriers” at http://www.census.gov/cgi-

bin/sssd/naics/naicsrch.

86 13 C.F.R. § 121.201; NAICS code 517110.

87 U.S. Census Bureau, 2007 Economic Census. See U.S. Census Bureau, American FactFinder, “Information:

Subject Series – Estab and Firm Size: Employment Size of Establishments for the United States: 2007 – 2007

Economic Census,” NAICS code 517110, Table EC0751SSSZ2; available at

http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml.

88 Id.

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20.

Television Broadcasting. This economic census category “comprises establishments

primarily engaged in broadcasting images together with sound.”89 The SBA has created the following

small business size standard for Television Broadcasting businesses: those having $35.5 million or less in

annual receipts.90 Census data for 2007 shows that 2,076 establishments in this category operated for the

entire year.91 Of this total, 1,515 establishments had annual receipts of $10,000,000 or less, and 561

establishments had annual receipts of more than $10,000,000.92 Because the Census has no additional

classifications on the basis of which to identify the number of stations whose receipts exceeded $35.5

million in that year, the majority of such establishments can be considered small under this size standard.

21.

Apart from the U.S. Census, the Commission has estimated the number of licensed

commercial television stations to be 1,388 stations.93 Of this total, 1,221 stations (or about 88 percent)

had revenues of $35.5 million or less, according to Commission staff review of the BIA Kelsey Inc.

Media Access Pro Television Database (BIA) on July 2, 2014. In addition, the Commission has estimated

the number of licensed noncommercial educational (NCE) television stations to be 395.94 NCE stations

are non-profit, and therefore considered to be small entities.95 Therefore, we estimate that the majority of

television broadcast stations are small entities.

22.

We note, however, that in assessing whether a business concern qualifies as small under

the above definition, business (control) affiliations96 must be included. Our estimate, therefore, likely

overstates the number of small entities that might be affected by our action because the revenue figure on

which it is based does not include or aggregate revenues from affiliated companies. In addition, an

element of the definition of “small business” is that the entity not be dominant in its field of operation.

We are unable at this time to define or quantify the criteria that would establish whether a specific

television station is dominant in its field of operation. Accordingly, the estimate of small businesses to

which rules may apply does not exclude any television station from the definition of a small business on

this basis and is therefore possibly over-inclusive to that extent.

23.

Cable and Other Subscription Programming. The Census Bureau defines this category

as follows: “This industry comprises establishments primarily engaged in operating studios and facilities

for the broadcasting of programs on a subscription or fee basis…. These establishments produce

89 U.S. Census Bureau, 2012 NAICS Definitions, “515120 Television Broadcasting,” at http://www.census.gov/cgi-

bin/sssd/naics/naicsrch. This category description continues, “These establishments operate television broadcasting

studios and facilities for the programming and transmission of programs to the public. These establishments also

produce or transmit visual programming to affiliated broadcast television stations, which in turn broadcast the

programs to the public on a predetermined schedule. Programming may originate in their own studios, from an

affiliated network, or from external sources.” Separate census categories pertain to businesses primarily engaged in

producing programming. See Motion Picture and Video Production, NAICS code 512110; Motion Picture and

Video Distribution, NAICS Code 512120; Teleproduction and Other Post-Production Services, NAICS Code

512191; and Other Motion Picture and Video Industries, NAICS Code 512199.

90 13 C.F.R. § 121.201; NAICS code 515120.

91 U.S. Census Bureau, 2007 Economic Census. See U.S. Census Bureau, American FactFinder, “Information:

Subject Series - Estab and Firm Size: Receipts Size of Establishments for the United States: 2007,” NAICS code

515120, Table EC0751SSSZ1; available at http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml.

92 Id.

93 See Broadcast Station Totals as of March 31, 2014, Press Release (MB rel. April 9, 2014) (Broadcast Station

Totals) at http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-326518A1.pdf.

94 See Broadcast Station Totals, supra.

95 See generally 5 U.S.C. §§ 601(4), (6).

96 “[Business concerns] are affiliates of each other when one concern controls or has the power to control the other

or a third party or parties controls or has to power to control both.” 13 C.F.R. § 21.103(a)(1).

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programming in their own facilities or acquire programming from external sources. The programming

material is usually delivered to a third party, such as cable systems or direct-to-home satellite systems, for

transmission to viewers.”97 The SBA has developed a small business size standard for this category,

which is: all such businesses having $35.5 million or less in annual revenues.98 Census data for 2007

shows that there were 659 establishments that operated for the entire year.99 Of that number, 462

operated with annual revenues of fewer than $10 million, and 197 operated with annual revenues of $10

million or more.100 Therefore, under this size standard, the majority of such businesses can be considered

small.

24.

Motion Picture and Video Production. The Census Bureau defines this category as

follows: “This industry comprises establishments primarily engaged in producing, or producing and

distributing motion pictures, videos, television programs, or television commercials.”101 We note that

firms in this category may be engaged in various industries, including cable programming. Specific

figures are not available regarding how many of these firms produce programming for cable television.

To gauge small business prevalence in the Motion Picture and Video Production industries, the

Commission relies on data currently available from the U.S. Census for the year 2007. The SBA has

developed a small business size standard for this category, which is: those having $30 million or less in

annual receipts.102 Census data for 2007 shows that there were 9,095 firms in this category that operated

for the entire year.103 Of this total, 8,995 firms had annual receipts of fewer than $25 million, and 43

firms had receipts of $25 million to $49,999,999.104 Therefore, under this size standard, the majority of

such businesses can be considered small.

25.

Motion Picture and Video Distribution. The Census Bureau defines this category as

follows: “This industry comprises establishments primarily engaged in acquiring distribution rights and

distributing film and video productions to motion picture theaters, television networks and stations, and

exhibitors.”105 We note that firms in this category may be engaged in various industries, including cable

programming. Specific figures are not available regarding how many of these firms distribute

programming for cable television. To gauge small business prevalence in the Motion Picture and Video

Distribution industries, the Commission relies on data currently available from the U.S. Census for the

year 2007. The SBA has developed a small business size standard for this category, which is: those

97 U.S. Census Bureau, 2012 NAICS Definitions, “515210 Cable and Other Subscription Programming” at

http://www.census.gov/cgi-bin/sssd/naics/naicsrch.

98 13 C.F.R. § 121.210; NAICS code 515210.

99 U.S. Census Bureau, 2007 Economic Census. See U.S. Census Bureau, American FactFinder, “Information:

Subject Series – Estab and Firm Size: Receipts Size of Establishments for the United States: 2007 – 2007 Economic

Census;” NAICS code 515210, Table EC0751SSSZ1; available at

http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml.

100 Id.

101 U.S. Census Bureau, 2012 NAICS Definitions, “512110 Motion Picture and Video Production” at

http://www.census.gov/cgi-bin/sssd/naics/naicsrch.

102 13 C.F.R § 121.201, NAICS Code 512110.

103 U.S. Census Bureau, 2007 Economic Census. See U.S. Census Bureau, American FactFinder, “Information:

Subject Series – Estab and Firm Size: Receipts Size of Firms for the United States: 2007 – 2007 Economic Census;”

NAICS code 512110, Table EC0751SSSZ4; available at

http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml.

104 Id.

105 U.S. Census Bureau, 2012 NAICS Definitions, “512120 Motion Picture and Video Distribution” at

http://www.census.gov/cgi-bin/sssd/naics/naicsrch.

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having $29.5 million or less in annual receipts.106 Census data for 2007 shows that there were 450 firms

in this category that operated for the entire year.107 Of this total, 434 firms had annual receipts of fewer

than $25 million, and 7 firms had receipts of $25 million to $49,999,999.108 Therefore, under this size

standard, the majority of such businesses can be considered small.

26.

Internet Publishing and Broadcasting and Web Search Portals. The Census Bureau

defines this category as follows: “This industry comprises establishments primarily engaged in (1)

publishing and/or broadcasting content on the Internet exclusively or (2) operating Web sites that use a

search engine to generate and maintain extensive databases of Internet addresses and content in an easily

searchable format (and known as Web search portals). The publishing and broadcasting establishments in

this industry do not provide traditional (non-Internet) versions of the content that they publish or

broadcast. They provide textual, audio, and/or video content of general or specific interest on the Internet

exclusively. Establishments known as Web search portals often provide additional Internet services, such

as e-mail, connections to other web sites, auctions, news, and other limited content, and serve as a home

base for Internet users.”109 The SBA has developed a small business size standard for this category,

which is: all such businesses having 500 or fewer employees.110 Census data for 2007 shows that there

were 2,705 firms that operated for the entire year.111 Of this total, 2,682 firms had fewer than 500

employees, and 13 firms had between 500 and 999 employees.112 Therefore, under this size standard, the

majority of such businesses can be considered small.

27.

Radio and Television Broadcasting and Wireless Communications Equipment

Manufacturing. The Census Bureau defines this category as follows: “This industry comprises

establishments primarily engaged in manufacturing radio and television broadcast and wireless

communications equipment. Examples of products made by these establishments are: transmitting and

receiving antennas, cable television equipment, GPS equipment, pagers, cellular phones, mobile

communications equipment, and radio and television studio and broadcasting equipment.”113 The SBA

has developed a small business size standard for this category, which is: all such businesses having 750

or fewer employees.114 Census data for 2007 shows that there were 939 establishments that operated for

106 13 C.F.R § 121.201, NAICS Code 512120.

107 U.S. Census Bureau, 2007 Economic Census. See U.S. Census Bureau, American FactFinder, “Information:

Subject Series – Estab and Firm Size: Receipts Size of Firms for the United States: 2007 – 2007 Economic Census;”

NAICS code 512120, Table EC0751SSSZ4; available at

http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml.

108 Id.

109 U.S. Census Bureau, 2012 NAICS Definitions, “519130 Internet Publishing and Broadcasting and Web Search

Portals” at http://www.census.gov/cgi-bin/sssd/naics/naicsrch. Examples of this category are: Internet book

publishers, Internet sports sites, Internet entertainment sites, Internet video broadcast sites, Internet game sites,

Internet news publishers, Internet periodical publishers, Internet radio stations, Internet search portals, Web search

portals, and Internet search web sites.

110 13 C.F.R. § 121.201; NAICS code 519130.

111 U.S. Census Bureau, 2007 Economic Census. See U.S. Census Bureau, American FactFinder, “Information:

Subject Series – Estab and Firm Size: Employment Size of Firms for the United States: 2007 – 2007 Economic

Census,” NAICS code 519130, Table EC0751SSSZ5; available at

http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml.

112 Id.

113 U.S. Census Bureau, 2012 NAICS Definitions, “334220 Radio and Television Broadcasting and Wireless

Communications Equipment Manufacturing” at http://www.census.gov/cgi-bin/sssd/naics/naicsrch.

114 13 C.F.R. § 121.201; 2012 NAICS code 334220.

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part or all of the entire year.115 Of this total, 912 establishments had fewer than 500 employees, and 10

establishments had between 500 and 999 employees.116 Therefore, under this size standard, the majority

of such establishments can be considered small.

28.

Audio and Video Equipment Manufacturing. The Census Bureau defines this category as

follows: “This industry comprises establishments primarily engaged in manufacturing electronic audio

and video equipment for home entertainment, motor vehicles, and public address and musical instrument

amplification. Examples of products made by these establishments are video cassette recorders,

televisions, stereo equipment, speaker systems, household-type video cameras, jukeboxes, and amplifiers

for musical instruments and public address systems.”117 The SBA has developed a small business size

standard for this category, which is: all such businesses having 750 or fewer employees.118 Census data

for 2007 shows that 492 establishments in this category operated for part or all of the entire year.119 Of

this total, 488 establishments had fewer than 500 employees, and three had between 500 and 999

employees.120 Therefore, under this size standard, the majority of such establishments can be considered

small.

29.

Closed Captioning Services. These entities may be indirectly affected by our action. The

SBA has developed two small business size standards that may be used for closed captioning services.

The two size standards track the economic census categories, “Teleproduction and Other Postproduction

Services” and “Court Reporting and Stenotype Services.”

30.

The first category of Teleproduction and Other Postproduction Services “comprises

establishments primarily engaged in providing specialized motion picture or video postproduction

services, such as editing, film/tape transfers, subtitling, credits, closed captioning, and animation and

special effects.”121 The SBA has developed a small business size standard for this category, which is:

those having $29.5 million or less in annual receipts.122

Census data for 2007 indicates that there were

1,605 firms that operated in this category for the entire year.123 Of this total, 1,587 firms had annual

receipts of fewer than $25 million, and 9 firms had receipts of $25 million to $49,999,999.124 Therefore,

we estimate that the majority of firms in this category are small entities.

115 U.S. Census Bureau, 2007 Economic Census. See U.S. Census Bureau, American FactFinder, “Manufacturing:

Summary Series: General Summary: Industry Statistics for Subsectors and Industries by Employment Size: 2007 –

2007 Economic Census,” NAICS code 334220, Table EC0731SG3; available at

http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml.

116 Id.

117 U.S. Census Bureau, 2012 NAICS Definitions, “334310 Audio and Video Equipment Manufacturing” at

http://www.census.gov/cgi-bin/sssd/naics/naicsrch.

118 13 C.F.R. § 121.201; 2012 NAICS code 334310.

119 U.S. Census Bureau, 2007 Economic Census. See U.S. Census Bureau, American FactFinder, “Manufacturing:

Summary Series: General Summary: Industry Statistics for Subsectors and Industries by Employment Size: 2007 –

2007 Economic Census,” NAICS code 334310, Table EC0731SG3; available at

http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml.

120 Id.

121 U.S. Census Bureau, 2012 NAICS Definitions, “512191 Teleproduction and Other Postproduction Services” at

http://www.census.gov/cgi-bin/sssd/naics/naicsrch.

122 13 C.F.R. § 121.201, NAICS Code 512191.

123 U.S. Census Bureau, American FactFinder, “Information: Subject Series - Estab and Firm Size: Receipts Size of

Firms for the United States: 2007 U.S. Census Bureau, 2007 Economic Census,” NAICS code 512191, Table

EC0751SSSZ4; available at http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml.

124 Id.

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31.

The second category of Court Reporting and Stenotype Services “comprises

establishments primarily engaged in providing verbatim reporting and stenotype recording of live legal

proceedings and transcribing subsequent recorded materials.”125 The SBA has developed a small business

size standard for this category, which is: those having $14 million or less in annual receipts.126 Census

data for 2007 indicates that there were 2,706 firms that operated in this category for the entire year.127 Of

this total, 2,687 had annual receipts of fewer than $10 million, and 11 firms had receipts of $10 million to

$24,999,999.128 Therefore, we estimate that the majority of firms in this category are small entities.

D.

Description of Projected Reporting, Recordkeeping, and Other Compliance

Requirements for Small Entities

32.

The rules adopted in the Video Clips Order generally extend the IP closed captioning

requirements, which previously applied only to full-length video programming, to video clips. The Video

Clips Order does not adopt a new regulatory regime, but rather, applies the existing regime for full-length

IP-delivered video programming to IP-delivered video clips, with certain modifications in recognition of

the differences between video clips and full-length video programming. Accordingly, there are no new

reporting or recordkeeping requirements. There will, however, be new compliance requirements for small

entities. Specifically, the IP closed captioning requirements will extend to IP-delivered video clips if the

video programming distributor or provider posts on its website or app a video clip of video programming

that it published or exhibited on television in the United States with captions. The Commission adopts a

compliance deadline of January 1, 2016 for “straight lift” clips, which contain a single excerpt of a

captioned television program with the same video and audio that was presented on television, and January

1, 2017 for “montages,” which contain multiple straight lift clips. After the applicable deadlines, the new

rules will require IP-delivered video clips to be provided with closed captions at the time the clips are

posted online, except as otherwise provided. For clips of video programming previously shown live or

near-live on television with captions, the rules will require captions beginning July 1, 2017, and for the

present time will allow a grace period of 12 hours after the live programming is shown on television and

eight hours after the near-live programming is shown on television before the clip must be captioned

online. The Commission finds that compliance with the new requirements would be economically

burdensome for video clips that are in the video programming distributor’s or provider’s online library

before January 1, 2016 for straight lift clips and January 1, 2017 for montages, and thus the Commission

exempts this class of video clips from coverage. In general, the Commission applies the IP closed

captioning requirements to video clips in the same manner that they apply to full-length video

programming, which among other things means that the quality requirements applicable to full-length IP-

delivered video programming will apply to video clips.

E.

Steps Taken to Minimize the Significant Economic Impact on Small Entities and

Significant Alternatives Considered

33.

The RFA requires an agency to describe the steps the agency has taken to minimize the

significant economic impact on small entities consistent with the stated objectives of applicable statutes,

including a statement of the factual, policy, and legal reasons for selecting the alternative adopted in the

125 U.S. Census Bureau, 2012 NAICS Definitions, “561492 Court Reporting and Stenotype Services” at

http://www.census.gov/cgi-bin/sssd/naics/naicsrch. Examples of this category are: Court reporting or stenotype

recording services; Real-time (i.e., simultaneous) closed captioning of live television performances, meetings,

conferences; and Public stenography services.

126 13 C.F.R. § 121.201, NAICS Code 561492.

127 U.S. Census Bureau, American FactFinder, “Administrative and Support and Waste Management and

Remediation Services: Subject Series - Establishment and Firm Size: Receipts Size of Firms for the United States:

2007,” NAICS code 561492, Table EC0756SSSZ4; available at

http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml.

128 Id.

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final rule and why each one of the other significant alternatives to the rule considered by the agency

which affect the impact on small entities was rejected.129

34.

As explained above, the Video Clips Order does not adopt a new regulatory regime, but

rather, applies the existing regime for full-length IP-delivered video programming to IP-delivered video

clips, with certain modifications in recognition of the differences between video clips and full-length

video programming. Accordingly, similar to the rules promulgated in the IP Closed Captioning Order,

the rules adopted in the Video Clips Order may have a significant economic impact in some cases and that

impact may affect a substantial number of small entities.130 Although the Commission has considered

alternatives, where possible, to minimize economic impact on small entities, we note that our action is

governed by the congressional mandate contained in the CVAA.131

35.

Notably, the same aspects of the IP closed captioning rules applicable to full-length

programming that ease compliance burdens on small entities also apply to small entities in the context of

video clips. Specifically, in the IP Closed Captioning Order, the Commission adopted procedures

enabling it to grant exemptions to the rules governing closed captioning of IP-delivered video

programming pursuant to Section 202 of the CVAA, where a petitioner has shown that compliance would

present an economic burden (i.e., a significant difficulty or expense), and pursuant to Section 203 of the

CVAA, where a petitioner has shown that compliance is not achievable (i.e., cannot be accomplished with

reasonable effort or expense) or not technically feasible.132 As was the case with regard to full-length

programming, this exemption process will allow the Commission to address the impact of the extension

of the rules to video clips on individual entities, including smaller entities, and to modify the application

of the rules to accommodate individual circumstances.133 Further, as with full-length IP-delivered video

programming, a de minimis failure to comply with the requirements adopted pursuant to Section 202 of

the CVAA with regard to IP-delivered video clips will not be treated as a violation, and parties may

continue to use alternate means of compliance to the rules adopted pursuant to either Section 202 or

Section 203 of the CVAA.134 Individual entities, including smaller entities, may benefit from these

provisions.

36.

Overall, in crafting its new requirements, the Commission addressed the issues described

in Section B above by providing reasonable timeframes within which entities may come into compliance,

and by providing a grace period within which captions may be added to video clips of live or near-live

programming.135 All of these provisions should ease the burdens that small entities otherwise would face

in complying with these requirements. Further, in recognition of the burdens that would be imposed on

regulated entities, in particular smaller entities, if faced with a requirement to caption video clips that are

in the video programming distributor’s or provider’s online library before January 1, 2016 for straight lift

clips and January 1, 2017 for montages, the Commission finds that such a requirement would be

economically burdensome and thus exempts this category of video clips from coverage.136 We note,

129 5 U.S.C. § 604(a)(6).

130 See IP Closed Captioning Order, 27 FCC Rcd at 891, ¶ 38.

131 See id.

132 See id.

133 See id.

134 See id. See also 47 U.S.C. § 613(c)(3) (“An entity may meet the requirements of this section through alternate

means than those prescribed by regulations . . . if the requirements of this section are met, as determined by the

Commission”); Section 203(e) of the CVAA (“An entity may meet the requirements of sections 303(u), 303(z), and

330(b) of the Communications Act of 1934 through alternate means than those prescribed by regulations . . . if the

requirements of those sections are met, as determined by the Commission”).

135 See Video Clips Order Sections III.C.2-3.

136 See Video Clips Order Section III.C.4.

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additionally, that a Commission requirement for captioning IP-delivered video clips will ensure that the

content, including critical news programming, will be accessible to individuals who are deaf or hard of

hearing, thus significantly benefiting consumers and serving the stated public interest goal of the

CVAA.137

F.

Report to Congress

37.

The Commission will send a copy of the Video Clips Order, including this FRFA, in a

report to be sent to Congress pursuant to the Congressional Review Act.138 In addition, the Commission

will send a copy of the Video Clips Order, including this FRFA, to the Chief Counsel for Advocacy of the

SBA. A copy of the Video Clips Order and FRFA (or summaries thereof) will also be published in the

Federal Register.139

137 See Video Clips Order Section III.B

138 See 5 U.S.C. § 801(a)(1)(A).

139 See id. § 604(b).

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APPENDIX C

Initial Regulatory Flexibility Analysis

1.

As required by the Regulatory Flexibility Act of 1980, as amended (“RFA”),1 the

Commission has prepared this present Initial Regulatory Flexibility Analysis (“IRFA”) concerning the

possible significant economic impact on small entities by the policies and rules proposed in the Second

Further Notice of Proposed Rulemaking (“Further Notice”). Written public comments are requested on

this IRFA. Comments must be identified as responses to the IRFA and must be filed by the deadlines for

comments provided on the first page of the item. The Commission will send a copy of the Further

Notice, including this IRFA, to the Chief Counsel for Advocacy of the Small Business Administration

(“SBA”).2 In addition, the Further Notice and IRFA (or summaries thereof) will be published in the

Federal Register.3

A.

Need for, and Objectives of, the Second Further Notice of Proposed Rulemaking

2.

In the Second Order on Reconsideration attached to the Further Notice, as part of the

Commission’s continued implementation of the Twenty-First Century Communications and Video

Accessibility Act of 2010 (“CVAA”), the Commission imposes closed captioning requirements on

excerpts of video programming, specifically online video clips. In the Further Notice attached to that

order, the Commission explores the following four issues related to closed captioning of video clips

delivered via Internet protocol (“IP”):

Application of the IP closed captioning rules to the provision of video clips by third party video

programming providers and distributors;

Whether in the future we should decrease or eliminate the 12-hour timeframe within which IP-

delivered video clips of video programming previously shown live on television must be

captioned and the eight-hour timeframe within which IP-delivered video clips of video

programming previously shown near-live on television must be captioned;

Application of the IP closed captioning requirements to files that contain a combination of one or

more video clips that have been shown on television with captions and online-only content that

has not (“mash-ups”); and

Application of the IP closed captioning rules to video clips that are added to the video

programming distributor’s or provider’s library on or after January 1, 2016 for straight lift clips4

and January 1, 2017 for montages,5 but before the associated video programming is shown on

television with captions (“advance” video clips).

B.

Legal Basis

3.

The proposed action is authorized pursuant to Sections 4(i), 4(j), 303, and 713 of the

Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i), 154(j), 303, and 613.

1 See 5 U.S.C. § 603. The RFA, see 5 U.S.C. §§ 601-612, has been amended by the Small Business Regulatory

Enforcement Fairness Act of 1996 (“SBREFA”), Pub. L. No. 104-121, Title II, 110 Stat. 857 (1996). The SBREFA

was enacted as Title II of the Contract With America Advancement Act of 1996 (“CWAAA”).

2 See 5 U.S.C. § 603(a).

3 See id.

4 “Straight lift” clips are those that contain a single excerpt of a captioned television program with the same video

and audio that was presented on television.

5 “Montages” contain multiple straight lift clips.

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C.

Description and Estimate of the Number of Small Entities to Which the Proposals

Will Apply

4.

The RFA directs the Commission to provide a description of and, where feasible, an

estimate of the number of small entities that will be affected by the rules adopted in the Video Clips

Order.6 The RFA generally defines the term “small entity” as having the same meaning as the terms

“small business,” “small organization,” and “small governmental jurisdiction.”7 In addition, the term

“small business” has the same meaning as the term “small business concern” under the Small Business

Act.8 A “small business concern” is one which: (1) is independently owned and operated; (2) is not

dominant in its field of operation; and (3) satisfies any additional criteria established by the Small

Business Administration (“SBA”).9 Small entities that may be directly affected by the proposals in the

Further Notice are those entities that distribute IP-delivered clips of video programming and the owners

of such programming. Such small entities may include television broadcasters, multichannel video

programming distributors (MVPDs), programmers, and other entities that own or distribute video

programming. Below are descriptions of the small entities that may be affected by the rules proposed in

the Further Notice, including, where feasible, an estimate of the number of such small entities. In

addition, because the Further Notice considers application of the IP closed captioning rules to the

provision of video clips by third party video programming providers and distributors, and because of the

difficulty of identifying all such third party video programming providers and distributors, we seek

specific comment on whether such small entities are covered by the categories listed below and, if not, on

how to identify and estimate such small entities.

5.

Small Businesses, Small Organizations, and Small Governmental Jurisdictions. Our

action may, over time, affect small entities that are not easily categorized at present. We therefore

describe here, at the outset, three comprehensive, statutory small entity size standards.10 First, according

to the SBA Office of Advocacy, in 2010, there were 27.9 million small businesses in the United States.11

In addition, a “small organization” is generally “any not-for-profit enterprise which is independently

owned and operated and is not dominant in its field.”12 Nationwide, as of 2007, there were approximately

1,621,315 small organizations.13 Finally, the term “small governmental jurisdiction” is defined generally

as “governments of cities, towns, townships, villages, school districts, or special districts, with a

population of less than fifty thousand.”14 Census Bureau data for 2011 indicate that there were 89,476

local governmental jurisdictions in the United States.15 We estimate that, of this total, a substantial

6 5 U.S.C. § 603(b)(3).

7 Id. § 601(6).

8 Id. § 601(3) (incorporating by reference the definition of “small-business concern” in the Small Business Act, 15

U.S.C. § 632). Pursuant to 5 U.S.C. § 601(3), the statutory definition of a small business applies “unless an agency,

after consultation with the Office of Advocacy of the Small Business Administration and after opportunity for public

comment, establishes one or more definitions of such term which are appropriate to the activities of the agency and

publishes such definition(s) in the Federal Register.”

9 15 U.S.C. § 632.

10 See 5 U.S.C. §§ 601(3)-(6).

11 See SBA, Office of Advocacy, “Frequently Asked Questions,” (dated September 2012); available at

http://www.sba.gov/sites/default/files/FAQ_Sept_2012.pdf. The SBA Office of Advocacy defines a small business

as an independent business having fewer than 500 employees. In 2010 there were 18,500 firms with 500 employees

or more. Id.

12 5 U.S.C. § 601(4).

13 INDEPENDENT SECTOR, THE NEW NONPROFIT ALMANAC & DESK REFERENCE (2010).

14 5 U.S.C. § 601(5).

15 U.S. CENSUS BUREAU, STATISTICAL ABSTRACT OF THE UNITED STATES: 2011, Table 427 (2007).

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