Federal Register / Vol. 62, No. 179 / Tuesday, September 16, 1997 / Rules and Regulations 48487

Federal Communications Commission.

William F. Caton,

Acting Secretary.

[FR Doc. 97–24213 Filed 9–15–97; 8:45 am]

BILLING CODE 6712–01–P

FEDERAL COMMUNICATIONS

COMMISSION

47 CFR Part 79

[MM Docket No. 95–176; FCC 97–279]

Closed Captioning of Video

Programming

AGENCY: Federal Communications

Commission.

ACTION: Final rule.

SUMMARY: The Commission adopts rules

implementing Section 713 of the

Communications Act of 1934, as

amended. Section 713, Video

Programming Accessibility, was added

to the Communications Act by section

305 of the Telecommunications Act of

1996 and directed the Commission to

adopt rules by August 8, 1998, that

generally require the closed captioning

of video programming. The rules

adopted by the Commission generally

assign responsibility for compliance

with the closed captioning requirements

to the entity which delivers the

programming to the consumer, establish

separate transition schedules for

programming first published or

exhibited on or after the effective date

of these rules and for programming first

published or exhibited prior to the

effective date of the rules, provide for a

number of exemptions authorized by

Congress and establish mechanisms for

enforcement and compliance review.

These rules are intended to increase the

accessibility of video programming for

persons with hearing disabilities.

EFFECTIVE DATE: These requirements and

regulations become effective January 1,

1998.

ADDRESSES: A copy of any comments on

the information collections contained

herein should be submitted to Timothy

Fain, Office of Management and Budget,

Room 10236 NEOB, Washington, DC

20503, (202) 395–3561 or via Internet at

fainlt@al.eop.gov, and to Judy Boley,

Federal Communications Commission,

Room 234, 1919 M St., NW.,

Washington, DC 20554 or via Internet to

jboley@fcc.gov.

FOR FURTHER INFORMATION CONTACT:

Marcia Glauberman, John Adams or

Alexis Johns, Cable Services Bureau,

(202) 418–7200, TTY (202) 418–7172.

For additional information concerning

the information collections contained in

this Report and Order, contact Judy

Boley at (202) 418–0217, or via the

Internet at jboley@fcc.gov.

SUPPLEMENTARY INFORMATION: This is a

synopsis of the Report and Order in MM

Docket No. 95–176, FCC 97–279,

adopted August 7, 1997 and released

August 22, 1997. The complete text of

this Report and Order is available for

inspection and copying during normal

business hours in the FCC Reference

Center (Room 239), 1919 M Street, NW,

Washington, DC, and also may be

purchased from the Commission’s copy

contractor, International Transcription

Services, Inc. (‘‘ITS’’) at (202) 857–3800,

1919 M Street, NW, Suite 246,

Washington, DC 20554. For copies in

alternative formats, such as braille,

audio cassette or large print, please

contact Sheila Ray at ITS.

Paperwork Reduction Act

This rulemaking contains modified

information collections. The

Commission, as part of its continuing

effort to reduce paperwork burden

invites the general public and other

Federal agencies to take this

opportunity to comment on the

following information collection, as

required by the Paperwork Reduction

Act of 1995, Public Law 104–13.

Comments should address: (a) Whether

the proposed collection of information

is necessary for the proper performance

of the functions of the Commission,

including whether the information shall

have practical utility; (b) the accuracy of

the Commission’s burden estimates; (c)

ways to enhance the quality, utility, and

clarity of the information collected; and

(d) ways to minimize the burden of the

collection of information on the

respondents, including the use of

automated collection techniques or

other forms of information technology.

OMB Approval Number: 3060–0761.

Title: Closed Captioning of Video

Programming.

Type of Review: Revision to an

existing collection.

Respondents: Individuals or

households; business and other forprofit entities.

Number of Respondents: 100 petitions

+ 100 petition responses + 1,500 viewer

complaints to program providers +

1,500 complaint responses from

program providers + 500 instructions to

refile complaints + 300 viewer

complaints to the Commission + 300

complaint responses to the Commission

= 4,300.

Estimated Time Per Response: .5–5

hours estimated for both the petition

and complaint processes. Estimated

annual burden to petitioners and

respondents for petition processes: We

estimate that program providers will

annually initiate 100 petitions

requesting exemption from the closed

captioning requirements. We estimate

that the average burden to complete all

aspects of each petition process,

including filing any possible reply

comments and associated certifications,

will be 5 hours. We estimate that 50%

of petitions will be prepared using inhouse assistance to draft petitions and

that 50% of petitions will be prepared

using outside legal assistance. Petitions

prepared using outside legal assistance

will undergo an average burden of 2

hours for each petition to coordinate

information with outside legal

assistance.

50 (50% of petitions prepared in-house

assistance) x 5 hours = 250 hours.

50 (50% of petitions prepared using

outside legal assistance) x 2 hours

= 100 hours.

We estimate that there will be an

average of one response to every

petition filed. The average burden to

complete all aspects of the response

process, including making certification,

is estimated to be 5 hours. We estimate

that 50% of responses will be prepared

using in-house assistance and that 50%

of responses will be prepared using

outside legal assistance.Commenters

using outside legal assistance will

undergo an average burden of 2 hours

for each response to coordinate

information with outside legal

assistance.

50 (50% of responses prepared using inhouse assistance) x 5 hours = 250

hours.

50 (50% of responses prepared using

outside legal assistance) x 2 hours

= 100 hours.

Estimated annual burden to viewers

and program providers for the

complaint process: We estimate there

will be 1,500 annual complaints filed by

viewers at the local level. The average

burden for each complaint and response

is estimated to be 1 hour per viewer and

1 hour per program provider. 1,500

viewer complaints x 1 hour and 1,500

program provider responses x 1 hour =

3,000 hours. In the case of an alleged

violation by a television broadcast

station or other program distributor for

which the programming distributor is

exempt from closed captioning

responsibility pursuant to § 79.1(e)(9),

the complaint shall be sent directly to

the station or owner of the

programming. A video programming

distributor receiving a complaint

regarding such programming must

forward the complaint within seven

days of receipt to the programmer or
48488 Federal Register / Vol. 62, No. 179 / Tuesday, September 16, 1997 / Rules and Regulations

send written instructions to the

complainant on how to refile with the

programmer. We estimate that one-third

of complaints at the local level will have

to be refiled in this manner, and that the

average burden for programmers to

either forward the complaint or send

written instructions to the complainant

on how to refile will have an average

burden of 30 minutes (.5 hours) per

complaint. 500 complaint x .5 hours =

250 hours.

We estimate that the majority of

complaints will be resolved at the local

level between the respective viewer and

program provider. We estimate that

approximately 300 (20% of 1,500) will

go unresolved, resulting in complaints

and responses being filed with the

Commission. A copy of the complaint

and any supporting documentation that

is filed with the Commission must also

be served on the video programming

distributor. Responses to complaints

filed with the Commission must also be

served on the complainant. The average

burden for all aspects of each complaint

and response in this instance is

estimated to be 2 hours per viewer and

4 hours per program provider. 300

viewer complaints x 2 hours and 30000

program provider responses x 4 hours =

1,800 hours.

Total Annual Burden to Respondents:

250 + 100 + 250 + 100 + 1,500 + 1,500

+ 1,800 = 5,750 hours.

Total Annual Cost to Respondents:

$42,100 estimated as follows: Program

providers will use outside legal

assistance paid at $150 per hour to

complete approximately 50 petitions. 50

petitions x 5 hours per petition x $150

per hour = $37,500. Postage and

stationery costs for petitions are

estimated at an average of $5 per waiver.

100 petitions x $5 = $500. Viewers and

program providers will undergo average

postage and stationary costs for the

complaint process estimated as follows:

1,500 viewer complaints filed with

program providers x $1 = $1,500. 1,500

complaint responses x $1 = $1,500. 500

instructions to refile complaints x $1 =

$500. 300 viewer complaints filed at the

Commission x $1 per complaint = $300.

300 program provider responses x $1 =

$300. Total annual cost to respondents:

$37,500 + $500 + $1,500 + $1,500 +

$500 + $300 + $600 = $42,100.

Needs and Uses: This Report and

Order is adopted pursuant to section

713 of the Communications Act of 1934,

as amended. The requirements set forth

in section 713 are intended to ensure

that video programming is accessible to

individuals with hearing disabilities

through closed captioning, regardless of

the delivery mechanism used to reach

consumers.

Synopsis of Report and Order

1. By the Report and Order (‘‘R&O’’),

the Commission adopts rules to

implement section 713 of the

Communications Act, 47 U.S.C. 613,

which generally requires video

programming be closed captioned. In

particular, this provision required the

Commission to prescribe by August 8,

1997, rules and implementation

schedules for the closed captioning of

video programming and to establish

appropriate exemptions. The rules we

adopt are based on comments received

in response to a Notice of Proposed

Rulemaking in this proceeding

summarized at 62 FR 4959 (February 3,

1997).

2. In the R&O, we address: (a) The

responsibility for compliance with the

rules we adopt; (b) obligations as to

programming first published or

exhibited on or after the effective date

of our rules (‘‘new programming’’) and

programming first published or

exhibited prior to the effective date of

our rules (‘‘pre-rule programming’’),

including phase-in schedules; (c) the

measurement of compliance with our

rules; (d) exemptions authorized by

Congress, including those based on the

‘‘economically burdensome standard,

existing contracts, and the undue

burden standard; (e) standards for

quality and accuracy of closed

captioning; (f) mechanisms for

enforcement and compliance review;

and (g) other issues relating to the

implementation of section 713 and

matters for future review. The rules will

become effective January 1, 1998.

3. Video programming distributors,

defined as all entities that provide video

programming directly to customers’

homes, regardless of distribution

technology used (e.g., broadcasters,

cable operators, DBS operators) will,

generally, be responsible for compliance

with the new closed captioning

requirements. Video programming

distributors, however, will not be

responsible for the captioning of

programming that is not subject to their

editorial control. The responsibility for

compliance with respect to such

programming will be placed on the

providers and owners of such

programming.

4. Section 713 requires the

Commission to adopt rules to ensure

that video programming first published

or exhibited after the effective date of

the rules be fully accessible through

closed captioning. For this new

programming that does not meet any of

the criteria for exemption, we adopt an

eight year transition period with

benchmarks specified as a number of

hours of required captioning at two year

intervals. We will define full

accessibility as the captioning of 95% of

all new, nonexempt programming to

provide for unforeseen difficulties that

may arise. Compliance will be measured

on a channel-by-channel basis for

multichannel video programming

distributors (‘‘MVPDs’’) and will be

measured over each calendar quarter.

During the transition period, each

channel of programming will be

required to meet the specified

benchmark unless the amount of new,

nonexempt programming offered on the

channel is less than the benchmark. In

such instances, at least 95% of the

nonexempt, new programming will be

required to be captioned. The first

benchmark becomes effective during the

first calendar quarter of 2000 and

requires that 450 hours of programming

be captioned during each quarter of

2000 and 2001. During each calendar

quarter of 2002 and 2003, 900 hours of

new, nonexempt programming must be

captioned. The benchmark for each

calendar quarter of 2004 and 2005 is

1350 hours of new, nonexempt

programming.

5. Section 713 also requires the

Commission to maximize the

accessibility of video programming first

published or exhibited prior to the

effective date of the rules. For

programming first published or

exhibited before January 1, 1998, that

does not meet any of our criteria for

exemption, we will require that at least

75% of such programming be captioned

after the end of a ten year transition

period. We will not set specific

benchmarks for pre-rule programming.

We will, however, monitor distributors’

efforts to increase the amount of

captioning of pre-rule programming to

ensure that channels are progressing

toward the 75% requirement. After four

years, we will reevaluate our decision

not to establish specific benchmarks and

consider whether the 75% threshold is

appropriate to meet the goals of the

statute.

6. We will also require video

programming providers to continue to

provide closed captioning at a level

substantially the same as the average

level of captioning that they provided

during the first six months of 1997, even

if the amount of captioned programming

exceeds that required under the

benchmarks. In addition, video

programming distributors are required

to pass through to consumers any

programming they receive with closed

captioning, when they do not edit the

programming.

7. Section 713 permits the

Commission to exempt by regulation
Federal Register / Vol. 62, No. 179 / Tuesday, September 16, 1997 / Rules and Regulations 48489

programs, classes of programs or

services for which we determine a

requirement to provide closed

captioning will be economically

burdensome. In creating these

exemptions we intend to preserve the

economic viability of certain classes of

programming or certain entities

associated with discreet classes of

programming. We will, therefore,

exempt non-English language

programming and programming

distributed between 2 a.m. and 6 a.m

local time. We will also exempt

primarily textual programming for

which captioning would be largely

redundant, including programming

guide services or community bulletin

boards, which provide the relevant

information about program schedules or

events in textual form. This exemption

does not apply to programming, such as

sports programming, home shopping or

weather reports, where a significant

amount of the relevant information is

not readily available as text. Similarly,

we will exempt programming which

consists primarily of instrumental music

such as a symphony or ballet. In such

cases, where the majority of the program

simply could not be captioned, we will

also exempt any introductory discussion

because the resources necessary to

caption such minor portions of the

program would outweigh any possible

benefit. We will also exempt interstitial

announcements, promotional

programming and public service

announcements that are ten minutes or

less in duration. In this context,

advertisements that are five minutes or

less in duration are not considered

programming and are not subject to our

closed captioning rules. Similarly, we

will exempt locally-produced and

distributed non-news programming with

limited repeat value such as local

parades, local high school or

nonprofessional sports or community

theater productions. This exemption

does not include programming readily

captioned using ENR or programs with

repeat value. We also adopt several

exemptions designed to protect certain

classes of video programming providers

which might otherwise be harmed if

subject to our rules. Thus programming

produced for the instructional television

fixed service (‘‘ITFS’’) will be exempt

regardless of whether it is distributed by

an ITFS licensee or other video

programming distributor. We further

exempt the programming on a new

network for its first four years of

operation. In addition, we will not

require any video programming

provider from the closed captioning

requirements where the provider had

annual gross revenues for an individual

channel during the proceeding year of

less than three million dollars. Finally,

we will not require any video

programming provider to spend more

than 2% of its annual gross revenues for

the proceeding year on the captioning of

any channel of video programming.

8. Under section 713(d)(2), a video

programming provider is exempt from

captioning programming if such action

would be inconsistent with a contract in

effect on the date of enactment of the

1996 Act. Accordingly, we exempt

programming subject to a contract in

effect on February 8, 1998, for which

compliance with our closed captioning

requirements would constitute a breach

of that contract.

9. Under section 713(d)(3), the

Commission is required to consider

petitions for exemption from the closed

captioning rules if the requirements

would impose an undue burden, which

is defined as a significant burden or

expense. A petition may be submitted

by any party in the programming

distribution chain, including video

programming producers, syndicators

and providers. Petitions must include

information that demonstrates how our

closed captioning requirements would

result in an undue burden. Factors we

will consider include: (a) The nature

and cost of the closed captions for the

programming; (b) the impact on the

operation of the provider or program

owner; (c) the financial resources of the

provider or program owner; and (d) the

type of operations of the provider or

program owner. Petitioners may also

submit any other information they deem

appropriate for our evaluation of their

circumstances. Depending on the

individual circumstance, we may grant

partial exemptions and may consider

proposals that programming be made

more accessible through alternative

means (e.g., additional text or graphics).

10. The rules require video

programming providers to deliver intact

the closed captioning they receive as

part of the programming they distribute

to viewers, if the programming is not

edited. They also must maintain their

equipment to ensure the technical

quality of the closed captioning they

transmit. We will not, however, adopt

standards for the non-technical aspects

of closed captioning. We will monitor

the captions that result from the

implementation of our rules and may

revisit this issue at a later date. We will

not restrict the use of captioning

methodology generally and will permit

the use of electronic news room

(‘‘ENR’’) capability to create captions

from teleprompter scripts.

11. We will enforce our rules through

a complaint process modeled after

existing complaint procedures.

Complaints alleging violation of our

closed captioning rules must first be

directed in writing to the video

programming distributor responsible for

delivery of the programming directly to

the customer’s home. Complaints must

be filed no later than the end of the

calendar quarter following the calendar

quarter in which the alleged violation

occurred. The video programming

distributor must respond to the

complaint no later than 45 days after the

end of the calendar quarter in which the

violation is alleged to have occurred or

45 days after receipt of the written

complaint, whichever is later. If a video

programming distributor fails to

respond to a complaint or a dispute

remains following this initial procedure,

a complaint may be filed with the

Commission within 30 days after the

time allotted for the video programming

distributor to respond has ended. The

video programming distributor will

have 15 days to respond to any

complaint filed with the Commission.

We will not adopt any specific

recordkeeping requirements. In

response to a complaint, a video

programming distributor is obligated to

provide the Commission with sufficient

records and documentation to

demonstrate that it is in compliance

with the rules. We also will permit

video programming distributors to rely

on certifications from program suppliers

to demonstrate compliance.

12. In addition, in the R&O, we

indicated that there are several issues

related to the implementation of closed

captioning requirements that need to be

studied further or reevaluated during

our transition period. We intend to

study further technological changes that

may affect closed captioning in a

subsequent proceeding, including issues

relating to digital television and other

technologies that may change the way

captions are created and delivered. We

also are concerned about providing

viewers with hearing disabilities with

accurate information regarding fast

breaking news of great importance such

as severe weather conditions,

earthquakes and disruptions of the

transportation system. As we did not

receive sufficient information on this

issue in this proceeding, we will initiate

a proceeding to determine whether

additional rules are needed in this area.

Moreover, we will reexamine a number

of our decisions during the transition

period, including the captioning

requirements for pre-rule programming,

the appropriateness of certain
48490 Federal Register / Vol. 62, No. 179 / Tuesday, September 16, 1997 / Rules and Regulations

exemptions, the use of ENR and the

decision not to adopt standards relating

to non-technical quality.

Regulatory Flexibility Act Certification

13. As required by the Regulatory

Flexibility Act (RFA), an Initial

Regulatory Flexibility Analysis

(‘‘IRFA’’) was incorporated into the

Notice of Proposed Rulemaking in this

proceeding. We sought written public

comment on the expected impact of the

proposed policies and rules on small

entities in the NPRM, including

comments on the IRFA. This present

Final Regulatory Flexibility Analysis

(‘‘FRFA’’) conforms to the RFA.

14. Need for Action and Objectives of

the Rule: The 1996 Act added a new

Section 713 to the Communications Act

of 1934 that inter alia requires the

Commission to develop rules to increase

the availability of video programming

with closed captioning. We are

promulgating these rules in order to

implement this provision of section 713.

The statutory objective of the closed

captioning provisions is to promote the

increased accessibility of video

programming for persons with hearing

disabilities.

15. Summary of Significant Issues

Raised by the Public Comments in

Response to the IRFA: The Small Cable

Business Association (‘‘SCBA’’) filed the

only comment specifically responsive to

the IRFA. Several other commenters

addressed the IRFA in their general

comments. Other parties, while not

specifically commenting on the IRFA,

discuss the potential effect of the

proposed rules on small entities.

16. SCBA concurs with our estimates

regarding the number of small cable

operators that may be affected by our

closed captioning requirements. SCBA

offers several specific suggestions to

minimize the effects of the closed

captioning requirements on small cable

operators. These proposals include: (a)

Allocating the burden of compliance to

programming producers and owners; (b)

a class exemption for small cable

operators serving 1,000 or fewer

subscribers; (c) streamlined compliance

and complaint rules for small cable

systems serving 15,000 or fewer

subscribers including; (d) streamlined

waiver procedures to permit qualifying

small systems to access a simplified,

low-cost waiver process; (e) a class

exemption for PEG programming; (f) a

class exemption for local origination

programming.

17. Cassidy asserts that our

conclusions are overly inclusive and, if

all small providers were exempted,

Congress’ intent to increase the

availability of closed captioned

programming would be circumvented.

Commenters representing smaller

captioning agencies suggest ways to

minimize the effect of the new

regulations on small captioners.

Specifically, Para Technologies

proposes that we adopt a phase-in

schedule requiring video program

providers to increase closed captioned

programming 4% every three months

over the eight year transition period.

According to Para Technologies, this

plan would increase competition in the

captioning industry, leading to lower

rates and more widely available

captioned programming. MCS suggests

that we should require that video

producers and program providers use

small captioning companies for a

minimum of 25% of their real time

captioning requirements.

18. Kaleidoscope indicates that its

proposal to define economic burden as

a situation where the cost of captioning

would exceed 10% of the relative

program budget should minimize the

burden on small entities. Kaleidoscope

asserts that this is an objective test that

would exempt small entities from

closed captioning requirements that

they may find economically

burdensome.

19. The Association of America’s

Public Television Stations (‘‘APTS’’)

asserts that the closed captioning

requirements would be especially

onerous to its smaller members. APTS

suggests that a $3 million benchmark is

generally accepted among

noncommercial stations as indicative of

a small station and urges us to adopt an

economic burden exemption for local

programming produced by such

stations.

20. Instructional Television Fixed

Services (‘‘ITFS’’) licensees argue that

their programming should not be subject

to the closed captioning requirements as

they represent a formidable economic

burden. Several commenters argue that

they are already obligated to ensure that

their services are accessible under both

the ADA and the Rehabilitation Act of

1973. These commenters propose

excluding ITFS providers from the

definition of ‘‘video programming

provider’’ and exempting ITFS

programming carried on wireless cable

systems from any closed captioning

requirements.

21. Several low power television

station (‘‘LPTV’’) operators assert that as

small businesses, LPTV operators

warrant an exemption based on the

economic burden that closed captioning

requirements would pose. The

Community Broadcasters Association

(‘‘CBA’’) suggests that specific classes of

programming carried by some LPTV

stations should be exempt in order to

relieve these providers of an economic

burden.

22. Access centers and organizations

providing governmental programming

assert that their operations qualify as

small entities. These commenters assert

that, in many cases, the financial

requirements for closed captioning

would exceed or substantially consume

their entire annual budgets. Several of

these commenters state that mandatory

captioning requirements could

effectively eliminate public, educational

and governmental (‘‘PEG’’)

programming. Accordingly, these

commenters seek an exemption based

on the economic burden posed by

closed captioning requirements unless

an alternative funding mechanism

becomes available. The Greater Metro

Telecommunications Consortium

(‘‘GMTC’’) suggests that PEG

programmers should be allowed to

weigh the costs and the benefits of

providing captioning and consider

alternatives. Several commenters

representing multichannel video

programming distribution systems

(‘‘MVPDs’’) join the access centers in

arguing that PEG channels should be

exempt. These commenters concur that

PEG channels generally operate on very

limited budgets which preclude

captioning.

23. Description and Estimate of the

Number of Small Entities to Which the

Rules Will Apply: 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 proposed rules. The RFA

defines the term ‘‘small entity’’ as

having the same meaning as the terms

‘‘small business,’’ ‘‘small organization,’’

and ‘‘small business concern’’ under

section 3 of the Small Business Act.

Under the Small Business Act, a small

business concern is one which: (1) Is

independently owned and operated; (2)

is not dominant in its field of operation;

and (3) satisfies any additional criteria

established by the SBA.

24. Small MVPDs: The SBA has

developed a definition of small entities

for cable and other pay television

services, which includes all such

companies generating $11 million or

less in annual receipts. 13 CFR 121.201

(SIC 4841). This definition includes

cable system operators, closed circuit

television services, direct broadcast

satellite services (‘‘DBS’’), multichannel

multipoint distribution systems

(‘‘MMDS’’), satellite master antenna

systems (‘‘SMATV’’) and subscription

television services. According to the

Bureau of the Census, there were 1,758

total cable and other pay television
Federal Register / Vol. 62, No. 179 / Tuesday, September 16, 1997 / Rules and Regulations 48491

services and 1,423 had less than $11

million in revenue as of 1992. We

address below each service individually

to provide a more precise estimate of

small entities.

25. Cable Systems: We have

developed, with SBA’s approval, our

own definition of a small cable system

operator for the purposes of rate

regulation. Under our rules, a ‘‘small

cable company’’ is one serving fewer

than 400,000 subscribers nationwide. 47

CFR 76.901(e). Based on our most recent

information, we estimate that there were

1439 cable operators that qualified as

small cable companies at the end of

1995. Since then, some of those

companies may have grown to serve

over 400,000 subscribers, and others

may have been involved in transactions

that caused them to be combined with

other cable operators. Consequently, we

estimate that there are fewer than 1439

small entity cable system operators that

may be affected by the decisions and

rules we are adopting.

26. The Communications Act also

contains a definition of a small cable

system operator, which is ‘‘a cable

operator that, directly or through an

affiliate, serves in the aggregate fewer

than 1% 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.’’ 47 U.S.C. 543(m)(2). We

have determined that there are

61,700,000 subscribers in the United

States. Therefore, an operator serving

fewer than 617,000 subscribers shall be

deemed a small operator, if its annual

revenues, when combined with the total

annual revenues of all of its affiliates, do

not exceed $250 million in the

aggregate. Based on available data, we

find that the number of cable operators

serving 617,000 subscribers or less totals

1450. 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 at this time to estimate

with greater precision the number of

cable system operators that would

qualify as small cable operators under

the definition in the Communications

Act.

27. MMDS: We refined the definition

of ‘‘small entity’’ for the auction of

MMDS spectrum as an entity that

together with its affiliates has average

gross annual revenues that are not more

than $40 million for the preceding three

calendar years. This definition of a

small entity in the context of MMDS

auctions has been approved by the SBA.

47 CFR 21.961(b)(1).

28. We completed the MMDS auction

in March 1996 for authorizations in 493

basic trading areas (‘‘BTAs’’). Of 67

winning bidders, 61 qualified as small

entities. Five bidders indicated that they

were minority-owned and four winners

indicated that they were women-owned

businesses. MMDS is an especially

competitive service, with approximately

1573 previously authorized and

proposed MMDS facilities. Information

available to us indicates that no MMDS

facility generates revenue in excess of

$11 million annually. We conclude that,

for purposes of this FRFA, there are

approximately 1634 small MMDS

providers as defined by the SBA and the

auction rules.

29. ITFS: There are presently 2032

ITFS licensees. All but 100 of these

licenses are held by educational

institutions. Educational institutions are

included in the definition of a small

business. 5 U.S.C. 601(5). However, we

do not collect annual revenue data for

ITFS licensees and are not able to

ascertain how many of the 100 noneducational licensees would be

categorized as small under the SBA

definition.

30. DBS: Because DBS provides

subscription services, DBS falls within

the SBA definition of cable and other

pay television services (SIC 4841). As of

December 1996, there were eight DBS

licensees. We do not collect annual

revenue data for DBS and, therefore, are

unable to ascertain the number of small

DBS licensees that could be affected by

these rules. Estimates of 1996 revenues

for various DBS operators are

significantly greater than $11,000,000

and range from a low of $31,132,000 for

Alphastar to a high of $1,100,000,000

for Primestar. Accordingly, we now

conclude that no DBS operator qualifies

as a small entity.

31. Home Satellite Dish (‘‘HSD’’): The

market for HSD service is difficult to

quantify. HSD owners have access to

more than 265 channels of programming

placed on C-band satellites by

programmers for receipt and

distribution by MVPDs, of which 115

channels are scrambled and

approximately 150 are unscrambled.

HSD owners can watch unscrambled

channels without paying a subscription

fee. To receive scrambled channels,

however, an HSD owner must purchase

an integrated receiver-decoder from an

equipment dealer and pay a

subscription fee to an HSD

programming packager. According to

the most recently available information,

there are approximately 30 program

packagers nationwide offering packages

of scrambled programming to retail

consumers. These program packagers

provide subscriptions to approximately

2,314,900 subscribers nationwide. This

is an average of about 77,163 subscribers

per program packager. This is

substantially smaller than the 400,000

subscribers used in the Commission’s

definition of a small multiple system

operator (‘‘MSO’’). Furthermore,

because this an average, it is likely that

some program packagers may be

substantially smaller.

32. Open Video System (‘‘OVS’’): We

have certified nine OVS operators. Of

these nine, only two are providing

service. They are Bell Atlantic serving

its Dover, New Jersey system and

Metropolitan Fiber Systems operating

OVS systems in Boston and New York.

Bell Atlantic and Metropolitan Fiber

Systems have sufficient revenues to

assure us that they do not qualify as

small business entities. Little financial

information is available for the other

entities authorized to provide OVS that

are not yet operational. Given that other

entities have been authorized to provide

OVS service but have not yet begun to

generate revenues, we conclude that at

least some of the OVS operators qualify

as small entities.

33. SMATVs: Industry sources

estimate that approximately 5200

SMATV operators were providing

service as of December 1995. Other

estimates indicate that SMATV

operators serve approximately 1.05

million residential subscribers as of

September 1996. The ten largest

SMATV operators together pass 815,740

units. If we assume that these SMATV

operators serve 50% of the units passed,

the ten largest SMATV operators serve

approximately 40% of the total number

of SMATV subscribers. Because these

operators are not rate regulated, they are

not required to file financial data with

the Commission. Furthermore, we are

not aware of any privately published

financial information regarding these

operators. Based on the estimated

number of operators and the estimated

number of units served by the largest

ten SMATVs, we conclude that a

substantial number of SMATV operators

qualify as small entities.

34. Local Multipoint Distribution

System (‘‘LMDS’’): Unlike the above pay

television services, LMDS technology

and spectrum allocation will allow

licensees to provide wireless telephony,

data, and/or video services. Therefore,

the definition of a small LMDS entity

may be applicable to both cable and

other pay television (SIC 4841) and/or

radiotelephone communications

companies (SIC 4812). The SBA

definition for cable and other pay

services is defined in paragraph 24

supra. A small radiotelephone entity is

one with 1500 employees or less. 13

CFR 121.1201. However, for the
48492 Federal Register / Vol. 62, No. 179 / Tuesday, September 16, 1997 / Rules and Regulations

purposes of this R&O on closed

captioning, we include only an estimate

of LMDS video service providers.

35. LMDS is a service that is expected

to be auctioned by the FCC in 1997. The

vast majority of LMDS entities

providing video distribution could be

small businesses under the SBA’s

definition of cable and pay television

(SIC 4841). However, in the Third

NPRM, CC Docket No. 92–297, 58 FR

6400 (January 28, 1993), we proposed to

define a small LMDS provider as an

entity that, together with affiliates and

attributable investors, has average gross

revenues for the three preceding

calendar years of less than $40 million.

We have not yet received approval by

the SBA for this definition.

36. There is only one company,

CellularVision, that is currently

providing LMDS video services.

Although the Commission does not

collect data on annual receipts, we

assume that CellularVision is a small

business under both the SBA definition

and our proposed auction rules. We also

conclude that a majority of the potential

LMDS licensees will be small entities,

as that term is defined by the SBA.

37. Small Broadcast Stations: The

SBA defines small television

broadcasting stations as television

broadcasting stations with $10.5 million

or less in annual receipts. 13 CFR

121.201.

38. Estimates Based on Census and

BIA Data: According to the Bureau of

the Census, in 1992, 1155 out of 1478

operating television stations reported

revenues of less than $10 million for

1992. This represents 78% of all

television stations, including

noncommercial stations. The Bureau of

the Census does not separate the

revenue data by commercial and

noncommercial stations in this report.

Neither does it allow us to determine

the number of stations with a maximum

of $10.5 million in annual receipts.

Census data also indicate that 81% of

operating firms (that owned at least one

television station) had revenues of less

than $10 million.

We also have performed a separate

study based on the data contained in the

BIA Publications, Inc. Master Access

Television Analyzer Database, which

lists a total of 1141 full power

commercial television stations. It should

be noted that, using the SBA definition

of small business concern, the

percentage figures derived from the BIA

database may be underinclusive because

the database does not list revenue

estimates for noncommercial

educational stations, and these therefore

are excluded from our calculations

based on the database. The BIA data

indicate that, based on 1995 revenue

estimates, 440 full power commercial

television stations had an estimated

revenue of $10.5 million or less. That

represents 54% of full power

commercial television stations with

revenue estimates listed in the BIA

program. The database does not list

estimated revenues for 331 stations.

Using a worst case scenario, if those 331

stations for which no revenue is listed

are counted as small stations, there

would be a total of 771 stations with an

estimated revenue of $10.5 million or

less, representing approximately 68% of

the 1141 full power commercial

television stations listed in the BIA data

base.

40. Alternatively, if we look at owners

of commercial television stations as

listed in the BIA database, there are a

total of 488 owners. The database lists

estimated revenues for 60% of these

owners, or 295. Of these 295 owners,

156 or 53% had annual revenues of less

than $10.5 million. Using a worst case

scenario, if the 193 owners for which

revenue is not listed are assumed to be

small, then small entities would

constitute 72% of the total number of

owners.

41. In summary, based on the

foregoing worst case analysis using

Bureau of the Census data, we estimate

that our rules will apply to as many as

1150 commercial and noncommercial

television stations (78% of all stations)

that could be classified as small entities.

Using a worst case analysis based on the

data in the BIA data base, we estimate

that as many as 771 commercial

television stations (about 68% of all

commercial television stations) could be

classified as small entities. As we noted

above, these estimates are based on a

definition that we tentatively believe

greatly overstates the number of

television broadcasters that are small

businesses. Further, it should be noted

that under the SBA’s definitions,

revenues of affiliates that are not

television stations should be aggregated

with the television station revenues in

determining whether a concern is small.

The estimates overstate the number of

small entities since the revenue figures

on which they are based do not include

or aggregate such revenues from

nontelevision affiliated companies.

42. Program Producers and

Distributors: The Commission has not

developed a definition of small entities

applicable to producers or distributors

of television programs. Therefore, we

will utilize the SBA classifications of

Motion Picture and Video Tape

Production (SIC 7812), Motion Picture

and Video Tape Distribution (SIC 7822),

and Theatrical Producers (Except

Motion Pictures) and Miscellaneous

Theatrical Services (SIC 7922). These

SBA definitions provide that a small

entity in the television programming

industry is an entity with $21.5 million

or less in annual receipts for SIC 7812

and 7822, and $5 million or less in

annual receipts for SIC 7922. 13 CFR

121.201. The 1992 Bureau of the Census

data indicate the following: (1) There

were 7265 U.S. firms classified as

Motion Picture and Video Production

(SIC 7812), and that 6987 of these firms

had $16,999 million or less in annual

receipts and 7002 of these firms had

$24,999 million or less in annual

receipts; (2) there were 1139 U.S. firms

classified as Motion Picture and Tape

Distribution (SIC 7822), and that 1007 of

these firms had $16,999 million or less

in annual receipts and 1013 of these

firms had $24,999 million or less in

annual receipts; and (3) there were 5671

U.S. firms classified as Theatrical

Producers and Services (SIC 7922), and

that 5627 of these firms had less than $5

million in annual receipts.

43. Each of these SIC categories is

very broad and includes firms that may

be engaged in various industries

including television. Specific figures are

not available as to how many of these

firms exclusively produce and/or

distribute programming for television or

how many are independently owned

and operated. Consequently, we

conclude that there are approximately

6987 small entities that produce and

distribute taped television programs,

1013 small entities primarily engaged in

the distribution of taped television

programs, and 5627 small producers of

live television programs that may be

affected by the rules adopted in this

R&O.

44. Description of Reporting,

Recordkeeping and Other Compliance

Requirements: We do not prescribe any

reporting requirements. While several

parties encouraged adoption of such

requirements, we believe that our

enforcement process alleviates the need

for reporting. Thus, we are not imposing

recordkeeping requirements for video

programming distributors. Rather, we

allow them to exercise their own

discretion and only require that they

retain records sufficient to demonstrate

compliance with our rules (§ 79.1(g)(6)).

In order to further relieve small video

programming distributors of any

unnecessary recordkeeping burden, we

permit video programming distributors

to rely on certifications from the

programming suppliers to demonstrate

compliance with our closed captioning

rules (§ 79.1(g)(6)).

45. Steps Taken to Minimize

Significant Economic Impact On Small
Federal Register / Vol. 62, No. 179 / Tuesday, September 16, 1997 / Rules and Regulations 48493

Entities and Significant Alternatives

Considered: In formulating our closed

captioning rules, we have taken steps to

minimize the effect on small entities

while making video programming more

accessible to persons with hearing

disabilities. These efforts are consistent

with the Congressional goal of

increasing the availability of closed

captioned programming while

preserving the diversity of available

programming.

46. Generally, we do not specifically

exempt any class of video programming

distributor because we have determined

that all video programming distributors

are technically capable of delivering

captioning. We do, however, recognize

that ITFS licensees serve a particular,

well defined niche as distributors of

specialized programming directed at

specified sites and not generally

intended for residential use. We also

recognize that the general public

benefits from the redistribution of this

programming by MMDS operators. We

therefore determine that ITFS operators

warrant a blanket exemption.

Accordingly, we exempt programming

originated by ITFS licensees, regardless

of the facility used to distribute this

programming (§ 79.1(d)(7)).

47. We also recognize the significance

of locally produced and distributed nonnews programming of primarily local

interest and limited repeat value. Much

of this programming is produced on a

low budget as a public service and our

closed captioning requirements might

impose a significant economic burden

that could result in such programming

not being televised. We therefore create

a limited exemption for such

programming (§ 79.1(d)(8)).

48. We recognize that many new

video programming services will often

qualify as small entities. We also

recognize the need to allow new and

innovative services designed to serve

emerging or niche markets greater

flexibility than more established

services serving well defined markets.

Accordingly, our rules provide an

exemption to relieve new services from

our captioning requirements for their

first four years of operation

(§ 79.1(d)(9)).

49. We do not require any video

programming provider to spend more

than 2% of its annual gross revenues

received from a channel on closed

captioning (§ 79.1(d)(11)). This will

require video programming providers to

devote a reasonable portion of their

revenue stream to closed captioning.

This mechanism will help to avoid an

‘‘all or nothing’’ approach thus ensuring

that accessibility to captioned

programming is increased without

creating an economic burden on video

programming providers.

50. Furthermore, we exempt from our

closed captioning requirements any

video programming provider with less

than $3 million in annual gross

revenues except that it will be required

to pass through any captioning it may

receive (§ 79.1(d)(12)). This provision is

intended to address the problems of

small video programming providers that

are not in a position to devote

significant resources towards captioning

and who would, even if they expended

2% of their revenues on captioning,

provide only a minimal amount of

captioned programming. This will

relieve the smallest of entities of any

burdensome obligation to provide

captioning without significantly

reducing the availability of captioning.

51. In order to further minimize the

impact of any unanticipated burdens

that may be created by our closed

captioning requirements, we adopt a

petition process that permits us to

consider requests for individual

exemptions from these rules based on

the statutory undue burden standard

(§ 79.1(f)). This mechanism will allow

us to address the impact of these rules

on individual entities and modify the

rules to accommodate individual

circumstances. We have specifically

designed these procedures to ameliorate

the impact of the closed captioning

rules in a manner consistent with the

objective of increasing the availability of

captioned programming.

Ordering Clauses

52. Accordingly, it is ordered that,

pursuant to authority found in sections

4(i), 303(r), and 713 of the

Communications Act of 1934, as

amended, 47 U.S.C. 154(i), 303(r), and

613, the Commission’s rules are hereby

amended by adding a new part 79 as set

forth below. The amendments set forth

below shall become effective January 1,

1998.

53. It is further ordered that the

Secretary shall send a copy of this

Report and Order, including the Final

Regulatory Flexibility Analysis, to the

Chief Counsel for Advocacy of the Small

Business Administration in accordance

with paragraph 603(a) of the Regulatory

Flexibility Act, Pub. L. 96–354, 94 Stat.

1164, 5 U.S.C. 601 et seq. (1981).

List of Subjects in 47 CFR Part 79

Cable television, Closed captioning,

Television.

Federal Communications Commission.

William F. Caton,

Acting Secretary.

Title 47 of the Code of Federal

Regulations is amended by adding a

new Part 79 consisting of § 79.1 to read

as follows:

PART 79—CLOSED CAPTIONING OF

VIDEO PROGRAMMING

Sec.

79.1 Closed captioning of video

programming.

Authority: 47 U.S.C. 613.

§ 79.1 Closed captioning of video

programming.

(a) Definitions. For purposes of this

section the following definitions shall

apply:

(1) Video programming. Programming

provided by, or generally considered

comparable to programming provided

by, a television broadcast station that is

distributed and exhibited for residential

use. Video programming includes

advertisements of more than five

minutes in duration but does not

include advertisements of five minutes’

duration or less.

(2) Video programming distributor.

Any television broadcast station

licensed by the Commission and any

multichannel video programming

distributor as defined in § 76.1000(e) of

this chapter, and any other distributor of

video programming for residential

reception that delivers such

programming directly to the home and

is subject to the jurisdiction of the

Commission. An entity contracting for

program distribution over a video

programming distributor that is itself

exempt from captioning that

programming pursuant to paragraph

(e)(9) of this section shall itself be

treated as a video programming

distributor for purposes of this section

To the extent such video programming

is not otherwise exempt from

captioning, the entity that contracts for

its distribution shall be required to

comply with the closed captioning

requirements of this section.

(3) Video programming provider. Any

video programming distributor and any

other entity that provides video

programming that is intended for

distribution to residential households

including, but not limited to broadcast

or nonbroadcast television network and

the owners of such programming.

(4) Closed captioning. The visual

display of the audio portion of video

programming contained in line 21 of the

vertical blanking interval (VBI) pursuant

to the technical specifications set forth

in § 15.119 of this chapter or the

equivalent thereof.
48494 Federal Register / Vol. 62, No. 179 / Tuesday, September 16, 1997 / Rules and Regulations

(5) New programming. Video

programming that is first published or

exhibited on or after January 1, 1998.

(6) Pre-rule programming. (i) Video

programming that was first published or

exhibited before January 1, 1998. (ii)

Video programming first published or

exhibited for display on television

receivers equipped for display of digital

transmissions or formatted for such

transmission and exhibition prior to the

date on which such television receivers

must, by Commission rule, be equipped

with built-in decoder circuitry designed

to display closed-captioned digital

television transmissions.

(7) Nonexempt programming. Video

programming that is not exempt under

paragraph (d) of this section and,

accordingly, is subject to closed

captioning requirements set forth in this

section.

(b) Requirements for closed

captioning of video programming—(1)

Requirements for new programming.

Video programming distributors must

provide closed captioning for

nonexempt video programming that is

being distributed and exhibited on each

channel during each calendar quarter in

accordance with the following

requirements:

(i) Between January 1, 2000, and

December 31, 2001, video programming

distributors shall provide at least 450

hours of captioned video programming,

or if the video programming distributor

provides less than 450 hours of new

nonexempt video programming, then

95% of its new nonexempt video

programming must be provided with

captions;

(ii) Between January 1, 2002, and

December 31, 2003, video programming

distributors shall provide at least 900

hours of captioned video programming,

or if the video programming distributor

provides less than 900 hours of new

nonexempt video programming, then

95% of its new nonexempt video

programming must be provided with

captions;

(iii) Between January 1, 2004, and

December 31, 2005, video programming

distributors shall provide at least an

average of 1350 hours of captioned

video programming, or if the video

programming distributor provides less

than 1350 hours of new nonexempt

video programming, then 95% of its

new nonexempt video programming

must be provided with captions; and

(iv) As of January 1, 2006, and

thereafter, 95% of the programming

distributor’s new nonexempt video

programming must be provided with

captions.

(2) Requirements for pre-rule

programming. As of January 1, 2008,

and thereafter, 75% of the programming

distributor’s pre-rule nonexempt video

programming being distributed and

exhibited on each channel during each

calendar quarter must be provided with

closed captioning.

(3) Video programming distributors

shall continue to provide captioned

video programming at substantially the

same level as the average level of

captioning that they provided during

the first 6 months of 1997 even if that

amount of captioning exceeds the

requirements otherwise set forth in this

section.

(c) Obligation to pass through

captions of already captioned

programs.—All video programming

distributors shall deliver all

programming received from the video

programming owner or other origination

source containing closed captioning to

receiving television households with the

original closed captioning data intact in

a format that can be recovered and

displayed by decoders meeting the

standards of § 15.119 of this chapter

unless such programming is recaptioned

or the captions are reformatted by the

programming distributor.

(d) Exempt programs and providers.—

For purposes of determining compliance

with this section, any video

programming or video programming

provider that meets one or more of the

following criteria shall be exempt to the

extent specified in this paragraph.

(1) Programming subject to

contractual captioning restrictions.

Video programming that is subject to a

contract in effect on or before February

8, 1996, but not any extension or

renewal of such contract, for which an

obligation to provide closed captioning

would constitute a breach of contract.

(2) Video programming or video

programming provider for which the

captioning requirement has been

waived. Any video programming or

video programming provider for which

the Commission has determined that a

requirement for closed captioning

imposes an undue burden on the basis

of a petition for exemption filed in

accordance with the procedures

specified in paragraph (f) of this section.

(3) Non-english language

programming. All programming for

which the audio is in a language other

than English, except that scripted

programming that can be captioned

using the ‘‘electronic news room’’

technique is not exempt.

(4) Primarily textual programming.

Video programming or portions of video

programming for which the content of

the soundtrack is displayed visually

through text or graphics (e.g., program

schedule channels or community

bulletin boards).

(5) Programming distributed in the

late night hours. Programming that is

being distributed to residential

households between 2 a.m. and 6 a.m.

local time. Video programming

distributors providing a channel that

consists of a service that is distributed

and exhibited for viewing in more than

a single time zone shall be exempt from

closed captioning that service for any

continuous 4 hour time period they may

select, commencing not earlier than 12

a.m. local time and ending not later than

7 a.m. local time in any location where

that service is intended for viewing.

This exemption is to be determined

based on the primary reception

locations and remains applicable even if

the transmission is accessible and

distributed or exhibited in other time

zones on a secondary basis. Video

programming distributors providing

service outside of the 48 contiguous

states may treat as exempt programming

that is exempt under this paragraph

when distributed in the contiguous

states.

(6) Interstitials, promotional

announcements and public service

announcements. Interstitial material,

promotional announcements, and

public service announcements that are

10 minutes or less in duration.

(7) ITFS programming. Video

programming produced for the

instructional television fixed service

(ITFS).

(8) Locally produced and distributed

non-news programming with limited

repeat value. Programming that is

locally produced by the video

programming distributor, has no repeat

value, is of local public interest, is not

news programming, and for which the

‘‘electronic news room’’ technique of

captioning is unavailable.

(9) Programming on new networks.

Programming on a video programming

network for the first four years after it

begins operation.

(10) Primarily non-vocal musical

programming. Programming that

consists primarily of non-vocal music.

(11) Captioning expense in excess of

2% of gross revenues. No video

programming provider shall be required

to expend any money to caption any

video programming if such expenditure

would exceed 2% of the gross revenues

received from that channel during the

previous calendar year.

(12) Channels producing revenues of

under $3,000,000. No video

programming provider shall be required

to expend any money to caption any

channel of video programming

producing annual gross revenues of less
Federal Register / Vol. 62, No. 179 / Tuesday, September 16, 1997 / Rules and Regulations 48495

than $3,000,000 during the previous

calendar year other than the obligation

to pass through video programming

already captioned when received

pursuant to paragraph (c) of this section.

(e) Responsibility for and

determination of compliance.—(1)

Compliance shall be calculated on a per

channel, calendar quarter basis;

(2) Open captioning or subtitles in the

language of the target audience may be

used in lieu of closed captioning;

(3) Live programming or repeats of

programming originally transmitted live

that are captioned using the so-called

‘‘electronic news room’’ technique will

be considered captioned. The live

portions of noncommercial

broadcasters’ fundraising activities that

use automated software to create a

continuous captioned message will be

considered captioned;

(4) Compliance will be required with

respect to the type of video

programming generally distributed to

residential households. Programming

produced solely for closed circuit or

private distribution is not covered by

these rules;

(5) Video programming that is exempt

pursuant to paragraph (d) of this section

that contains captions, except video

programming exempt pursuant to

paragraph (d)(5) of this section (late

night hours exemption), can count

towards the compliance with the

requirements for new programming

prior to January 1, 2006. Video

programming that is exempt pursuant to

paragraph (d) of this section that

contains captions, except that video

programming exempt pursuant to

paragraph (d)(5) of this section (late

night hours exemption), can count

towards compliance with the

requirements for pre-rule programming.

(6) For purposes of paragraph (d)(11)

of this section, captioning expenses

include direct expenditures for

captioning as well as allowable costs

specifically allocated by a programming

supplier through the price of the video

programming to that video programming

provider. To be an allowable allocated

cost, a programming supplier may not

allocate more than 100% of the costs of

captioning to individual video

programming providers. A programming

supplier may allocate the captioning

costs only once and may use any

commercially reasonable allocation

method;

(7) For purposes of paragraphs (d)(11)

and (d)(12) of this section, annual gross

revenues shall be calculated for each

channel individually based on revenues

received in the preceding calendar year

from all sources related to the

programming on that channel. Revenue

for channels shared between network

and local programming shall be

separately calculated for network and

for non-network programming, with

neither the network nor the local video

programming provider being required to

spend more than 2% of its revenues for

captioning. Thus, for example,

compliance with respect to a network

service distributed by a multichannel

video service distributor, such as a cable

operator, would be calculated based on

the revenues received by the network

itself (as would the related captioning

expenditure). For local service providers

such as broadcasters, advertising

revenues from station-controlled

inventory would be included. For cable

operators providing local origination

programming, the annual gross revenues

received for each channel will be used

to determine compliance. Evidence of

compliance could include certification

from the network supplier that the

requirements of the test had been met.

Multichannel video programming

distributors, in calculating non-network

revenues for a channel offered to

subscribers as part of a multichannel

package or tier, will not include a pro

rata share of subscriber revenues, but

will include all other revenues from the

channel, including advertising and

ancillary revenues. Revenues for

channels supported by direct sales of

products will include only the revenues

from the product sales activity (e.g.,

sales commissions) and not the

revenues from the actual products

offered to subscribers. Evidence of

compliance could include certification

from the network supplier that the

requirements of this test have been met.

(8) If two or more networks (or

sources of programming) share a single

channel, that channel shall be

considered to be in compliance if each

of the sources of video programming are

in compliance where they are carried on

a full time basis;

(9) Video programming distributors

shall not be required to provide closed

captioning for video programming that

is by law not subject to their editorial

control, including but not limited to the

signals of television broadcast stations

distributed pursuant to sections 614 and

615 of the Communications Act or

pursuant to the compulsory copyright

licensing provisions of sections 111 and

119 of the Copyright Act (Title 17 U.S.C.

111 and 119); programming involving

candidates for public office covered by

sections 315 and 312 of the

Communications Act and associated

policies; commercial leased access,

public access, governmental and

educational access programming carried

pursuant to sections 611 and 612 of the

Communications Act; video

programming distributed by direct

broadcast satellite (DBS) services in

compliance with the noncommercial

programming requirement pursuant to

section 335(b)(3) of the Communications

Act to the extent such video

programming is exempt from the

editorial control of the video

programming provider; and video

programming distributed by a common

carrier or that is distributed on an open

video system pursuant to section 653 of

the Communications Act by an entity

other than the open video system

operator. To the extent such video

programming is not otherwise exempt

from captioning, the entity that

contracts for its distribution shall be

required to comply with the closed

captioning requirements of this section.

(f) Procedures for exemptions based

on undue burden.—(1) A video

programming provider, video

programming producer or video

programming owner may petition the

Commission for a full or partial

exemption from the closed captioning

requirements. Exemptions may be

granted, in whole or in part, for a

channel of video programming, a

category or type of video programming,

an individual video service, a specific

video program or a video programming

provider upon a finding that the closed

captioning requirements will result in

an undue burden.

(2) A petition for an exemption must

be supported by sufficient evidence to

demonstrate that compliance with the

requirements to closed caption video

programming would cause an undue

burden. The term ‘‘undue burden’’

means significant difficulty or expense.

Factors to be considered when

determining whether the requirements

for closed captioning impose an undue

burden include:

(i) The nature and cost of the closed

captions for the programming;

(ii) The impact on the operation of the

provider or program owner;

(iii) The financial resources of the

provider or program owner; and

(iv) The type of operations of the

provider or program owner.

(3) In addition to these factors, the

petition shall describe any other factors

the petitioner deems relevant to the

Commission’s final determination and

any available alternatives that might

constitute a reasonable substitute for the

closed captioning requirements

including, but not limited to, text or

graphic display of the content of the

audio portion of the programming.

Undue burden shall be evaluated with

regard to the individual outlet.
48496 Federal Register / Vol. 62, No. 179 / Tuesday, September 16, 1997 / Rules and Regulations

(4) An original and two (2) copies of

a petition requesting an exemption

based on the undue burden standard,

and all subsequent pleadings, shall be

filed in accordance with § 0.401(a) of

this chapter.

(5) The Commission will place the

petition on public notice.

(6) Any interested person may file

comments or oppositions to the petition

within 30 days of the public notice of

the petition. Within 20 days of the close

of the comment period, the petitioner

may reply to any comments or

oppositions filed.

(7) Comments or oppositions to the

petition shall be served on the petitioner

and shall include a certification that the

petitioner was served with a copy.

Replies to comments or oppositions

shall be served on the commenting or

opposing party and shall include a

certification that the commenter was

served with a copy.

(8) Upon a showing of good cause, the

Commission may lengthen or shorten

any comment period and waive or

establish other procedural requirements.

(9) All petitions and responsive

pleadings shall contain a detailed, full

showing, supported by affidavit, of any

facts or considerations relied on.

(10) The Commission may deny or

approve, in whole or in part, a petition

for an undue burden exemption from

the closed captioning requirements.

(11) During the pendency of an undue

burden determination, the video

programming subject to the request for

exemption shall be considered exempt

from the closed captioning

requirements.

(g) Complaint procedures.—(1) No

complaint concerning an alleged

violation of the closed captioning

requirements of this section shall be

filed with the Commission unless such

complaint is first sent to the video

programming distributor responsible for

delivery and exhibition of the video

programming. A complaint must be in

writing, must state with specificity the

alleged Commission rule violated and

must include some evidence of the

alleged rule violation. In the case of an

alleged violation by a television

broadcast station or other programming

for which the video programming

distributor is exempt from closed

captioning responsibility pursuant to

paragraph (e)(9) of this section, the

complaint shall be sent directly to the

station or owner of the programming. A

video programming distributor receiving

a complaint regarding such

programming must forward the

complaint within seven days of receipt

to the programmer or send written

instructions to the complainant on how

to refile with the programmer.

(2) A complaint will not be

considered if it is filed with the video

programming distributor later than the

end of the calendar quarter following

the calendar quarter in which the

alleged violation has occurred.

(3) The video programming

distributor must respond in writing to a

complaint no later than 45 days after the

end of the calendar quarter in which the

violation is alleged to have occurred or

45 days after receipt of a written

complaint, whichever is later.

(4) If a video programming distributor

fails to respond to a complaint or a

dispute remains following the initial

complaint resolution procedures, a

complaint may be filed with the

Commission within 30 days after the

time allotted for the video programming

distributor to respond has ended. An

original and two (2) copies of the

complaint, and all subsequent pleadings

shall be filed in accordance with

§ 0.401(a) of this chapter. The complaint

shall include evidence that

demonstrates the alleged violation of the

closed captioning requirements of this

section and shall certify that a copy of

the complaint and the supporting

evidence was first directed to the video

programming distributor. A copy of the

complaint and any supporting

documentation must be served on the

video programming distributor.

(5) The video programming

distributor shall have 15 days to

respond to the complaint. In response to

a complaint, a video programming

distributor is obligated to provide the

Commission with sufficient records and

documentation to demonstrate that it is

in compliance with the Commission’s

rules. The response to the complaint

shall be served on the complainant.

(6) Certifications from programming

suppliers, including programming

producers, programming owners,

networks, syndicators and other

distributors, may be relied on to

demonstrate compliance. Distributors

will not be held responsible for

situations where a program source

falsely certifies that programming

delivered to the distributor meets our

captioning requirements if the

distributor is unaware that the

certification is false. Video

programming providers may rely on the

accuracy of certifications. Appropriate

action may be taken with respect to

deliberate falsifications.

(7) The Commission will review the

complaint, including all supporting

evidence, and determine whether a

violation has occurred. The Commission

shall, as needed, request additional

information from the video

programming provider.

(8) If the Commission finds that a

violation has occurred, penalties may be

imposed, including a requirement that

the video programming distributor

deliver video programming containing

closed captioning in an amount

exceeding that specified in paragraph

(b) of this section in a future time

period.

(h) Private rights of action

prohibited.—Nothing in this section

shall be construed to authorize any

private right of action to enforce any

requirement of this section. The

Commission shall have exclusive

jurisdiction with respect to any

complaint under this section.

[FR Doc. 97–24504 Filed 9–15–97; 8:45 am]

BILLING CODE 6712–01–P

DEPARTMENT OF TRANSPORTATION

Research and Special Programs

Administration

49 CFR Part 193

[Docket No. PS–151; Amdt. 193–13]

RIN 2137–AC 88

Liquefied Natural Gas Regulations—

Miscellaneous Amendments

AGENCY: Research and Special Programs

Administration (RSPA), DOT.

ACTION: Correcting RIN numbers.

SUMMARY: This document corrects the

RIN number of direct final rule [Docket

No. PS–151; Amdt. 193–13], published

in the Federal Register on February 25,

1997 (62 FR 8402). In the document

heading on page 8402, the RIN number

‘‘RIN 2137–AC91’’ is changed to read

‘‘RIN 2137–AC88.’’ The direct final rule

updates Liquefied Natural Gas (LNG)

regulations by replacing older models

for calculating distances for gas

dispersion and thermal radiations with

the current models. This document also

corrects the RIN number of the Notice

[Docket No. PS–151; Notice 1],

published in the Federal Register on

July 8, 1997 (62 FR 36465). In the

document heading on page 36465, the

RIN number ‘‘RIN 2137–AC91’’ is

changed to read ‘‘RIN 2137–AC88.’’ The

notice confirmed the effective date of

the direct final rule above.

EFFECTIVE DATE: September 16, 1997.

FOR FURTHER INFORMATION CONTACT:

Mike Israni, (202) 366–4571.