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[Federal Register Volume 79, Number 148 (Friday, August 1, 2014)]
[Proposed Rules]
[Pages 44975-45014]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-17863]

[[Page 44975]]

Vol. 79

Friday,

No. 148

August 1, 2014

Part II

 Department of Justice

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28 CFR Part 36

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

Federal Register / Vol. 79, No. 148 / Friday, August 1, 2014 / 
Proposed Rules

[[Page 44976]]

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DEPARTMENT OF JUSTICE

28 CFR Part 36

[CRT Docket No. 126; AG Order No. 3449-2014]
RIN 1190-AA63

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

AGENCY: Department of Justice, Civil Rights Division.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Department of Justice (Department) is issuing this notice 
of proposed rulemaking (NPRM) in order to propose amendments to its 
regulation for title III of the Americans with Disabilities Act (ADA), 
which covers public accommodations and commercial facilities, including 
movie theaters. The Department is proposing to explicitly require movie 
theaters to exhibit movies with closed captioning and audio description 
at all times and for all showings whenever movies are produced, 
distributed, or otherwise made available with captioning and audio 
description unless to do so would result in an undue burden or 
fundamental alteration. The Department is also proposing to require 
movie theaters to have a certain number of individual closed captioning 
and audio description devices unless to do so would result in an undue 
burden or fundamental alteration. The Department is proposing a six-
month compliance date for movie theaters' digital movie screens and is 
seeking public comment on whether it should adopt a four-year 
compliance date for movie theaters' analog movie screens or should 
defer rulemaking on analog screens until a later date.

DATES: The Department invites written comments from members of the 
public. Written comments must be postmarked and electronic comments 
must be submitted on or before September 30, 2014. Comments received by 
mail will be considered timely if they are postmarked on or before that 
date. The electronic Federal Docket Management System (FDMS) will 
accept comments until midnight Eastern Time at the end of that day.

ADDRESSES: You may submit comments, identified by RIN 1190-AA63, by any 
one of the following methods:
     Federal eRulemaking Web site: http://www.regulations.gov. 
Follow the Web site's instructions for submitting comments. The 
Regulations.gov Docket ID is DOJ-CRT-126.
     Regular U.S. mail: Disability Rights Section, Civil Rights 
Division, U.S. Department of Justice, P.O. Box 2885, Fairfax, VA 22031-
0885.
     Overnight, courier, or hand delivery: Disability Rights 
Section, Civil Rights Division, U.S. Department of Justice, 1425 New 
York Avenue NW., Suite 4039, Washington, DC 20005.

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

SUPPLEMENTARY INFORMATION:

Electronic Submission of Comments and Posting of Public Comments

    You may submit electronic comments to http://www.regulations.gov. 
When submitting comments electronically, you must include DOJ-CRT-126 
in the search field, and you must include your full name and address. 
Electronic files should avoid the use of special characters or any form 
of encryption and should be free of any defects or viruses.
    Please note that all comments received are considered part of the 
public record and made available for public inspection online at http://www.regulations.gov. Submission postings will include any personal 
identifying information (such as your name and address) included in the 
text of your comment. If you include personal identifying information 
(such as your name and address), in the text of your comment but do not 
want it to be posted online, you must include the phrase ``PERSONAL 
IDENTIFYING INFORMATION'' in the first paragraph of your comment. You 
must also identify all the personal identifying information you want 
redacted. Similarly, if you submit confidential business information as 
part of your comment but do not want it to be posted online, you must 
include the phrase ``CONFIDENTIAL BUSINESS INFORMATION'' in the first 
paragraph of your comment. You must also prominently identify 
confidential business information to be redacted within the comment. If 
a comment has so much confidential business information that it cannot 
be effectively redacted, all or part of that comment may not be posted 
on http://www.regulations.gov.

Relationship to Other Laws

    The Department of Justice regulation implementing title III, 28 CFR 
36.103, provides that except as otherwise provided in part 36, that 
part shall not be construed to apply a lesser standard than the 
standards applied under title V of the Rehabilitation Act of 1973 (29 
U.S.C. 791) or the regulations issued by Federal agencies pursuant to 
that title. See Sec.  36.103(a). In addition, the title III regulation 
provides that part 36 does not affect the obligations of a recipient of 
Federal financial assistance to comply with the requirements of section 
504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and any 
implementing regulations issued by Federal agencies. See Sec.  
36.103(b). Finally, part 36 does not invalidate or limit the remedies, 
rights, and procedures of any other Federal, State, or local laws 
(including State common law) that provide greater or equal protection 
for the rights of individuals with disabilities or individuals 
associated with them. See Sec.  36.103(c).
    These provisions remain unchanged. Compliance with the Department's 
title II and title III regulations does not ensure compliance with 
other Federal statutes.

I. Executive Summary

Purpose of Proposed Rule

    The Department of Justice (Department) is issuing this notice of 
proposed rulemaking (NPRM) in order to propose amendments to its 
regulation implementing title III of the Americans with Disabilities 
Act of 1990 (ADA), which covers public accommodations and commercial 
facilities--including movie theaters--to explicitly require movie 
theaters to exhibit movies with closed captioning and audio 
description, as well as to provide individual captioning and audio-
description devices for patrons who are deaf or hard of hearing or 
blind or have low vision. In the movie theater context, ``closed 
captioning'' refers to captions that only the patron requesting the 
closed captions can see because the captions are delivered to the 
patron at or near the patron's seat. Audio description is a technology 
that enables individuals who are blind or have low vision to enjoy 
movies by providing a spoken narration of key visual elements

[[Page 44977]]

of a visually delivered medium, such as actions, settings, facial 
expressions, costumes, and scene changes. Audio description can be 
transmitted to a user's wireless headset through infra-red or FM 
transmission.
    Title III of the ADA contains broad language prohibiting public 
accommodations from discriminating against individuals with 
disabilities, 42 U.S.C. 12182(a), as well as more specific statutory 
provisions intended to counter particular forms of disability-based 
discrimination by owners, operators, or lessees of public 
accommodations. Of particular relevance to this rulemaking, covered 
entities must take ``such steps as may be necessary to ensure that no 
individual with a disability is excluded, denied services, segregated 
or otherwise treated differently * * * because of the absence of 
auxiliary aids and services'' unless they can show that doing so would 
result in a fundamental alteration or undue burden. 42 U.S.C. 
12182(b)(2)(A)(iii). The Department's regulation implementing title 
III's auxiliary aid provision reiterates the obligation of covered 
entities to ensure effective communication with individuals with 
disabilities and identifies, among other things, open captioning, 
closed captioning, and audio recordings, as examples of auxiliary aids 
and services. 28 CFR 36.303(a)-(c).
    Despite movie theaters' title III obligation to provide effective 
communication to patrons who are deaf or hard of hearing or blind or 
have low vision, these individuals are often shut out from the movie-
going experience; this exclusion occurs even though the vast majority 
of motion pictures released by the major domestic movie studios include 
closed captioning and to a lesser extent, audio description. While 
there has been an increase in the number of movie theaters exhibiting 
movies with closed captions and to a much lesser extent, audio 
description, due in large part to successful disability rights 
litigation brought by private plaintiffs during the past few years, the 
availability of movies exhibited with closed captions and audio 
description varies significantly across the United States depending 
upon locality and movie theater ownership. As a result, persons who are 
deaf or hard of hearing or blind or have low vision, who represent an 
ever-increasing proportion of the population, still cannot fully take 
part in movie-going outings with family or friends, join in social 
conversations about recent movie releases, or otherwise participate in 
a meaningful way in this important aspect of American culture.
    The ADA requirements for effective communication apply to all 
public accommodations (including movie theaters) in every jurisdiction 
in the United States and should be consistently applied. The ADA 
protects the rights of persons with disabilities throughout the United 
States; the right to access movies exhibited with closed captioning and 
audio description should not depend on whether the person who is deaf 
or hard of hearing or is blind or has low vision resides in a 
jurisdiction where movie theaters, subject to a consent decree or 
settlement, exhibit movies with closed captioning or audio description. 
And, even in jurisdictions where theaters exhibit movies with 
captioning and audio description, many do not make captioning and audio 
description available at all movie showings. Moreover, recent 
technological changes in the movie theater industry--including wide-
spread conversion from analog (film) projection to digital cinema 
systems--make exhibition of captioned and audio-described movies easier 
and less costly. The Department is thus convinced that regulation is 
warranted at this time in order to achieve the goals and promise of the 
ADA.

Major Provisions

    The major provisions of the proposed rule can be summarized as 
follows.
    First, as of the rule's effective date, which the Department is 
proposing to be 6 months after the publication of a final rule in the 
Federal Register, the NPRM proposes to require movie theaters with 
digital screens (generally, those exhibiting movies captured on data 
files stored in a hard drive or flash drive) to exhibit movies with 
closed captions (although theaters may, at their own discretion, 
exhibit movies with open captions instead) and audio description, for 
all screenings when such movies are produced and distributed with these 
features unless the public accommodation can demonstrate that taking 
those steps would fundamentally alter the nature of the goods, 
services, facilities, privileges, advantages, or accommodations being 
offered or would result in an undue burden, i.e., significant 
difficulty or expense. Such an across-the-board requirement fulfills 
the effective communication objective by permitting individuals who are 
deaf or hard of hearing or blind or have low vision to fully and 
equally participate in one of the most quintessential forms of American 
entertainment--going out to the movies along with the rest of the 
movie-going public.
    In no case would movie theaters be required to create their own 
captioning or audio descriptions for movies. Rather, whenever the 
movies that theaters choose to screen are produced and distributed with 
these accessibility features, movie theaters would be required to 
ensure that they obtain and then screen those versions. This rule would 
not prohibit movie theaters from screening movies that are not produced 
with captions or audio description.
    Second, the NPRM does not propose a specific compliance date for 
analog screens (generally, those exhibiting movies in the traditional 
form of 35 mm film) in movie theaters. Instead, the Department seeks 
public comment on two options. Option 1: Whether the rule should adopt 
a delayed compliance date for analog screens four years from the 
publication of a final rule in the Federal Register. The Department 
believes that a delayed compliance date would allow any small theaters 
that remain analog to obtain the necessary resources to purchase the 
equipment to provide closed captioning and audio description. Option 2: 
Because the state of analog movies is in such flux, whether the 
Department should defer rulemaking with respect to analog movie screens 
until a later date.
    Third, the NPRM proposes to require movie theaters to have a 
certain number of individual captioning devices capable of delivering 
the captions at the seat of the individual and to provide them to 
patrons upon request. The proposed numbers are based upon the number of 
seats in the movie theater itself and can be shared among the screens 
in the theater. Individual captioning devices are a necessary part of 
the process of delivering closed captions, and this requirement is 
designed to ensure that there will be sufficient numbers of devices 
available for use when individuals who are deaf or hard of hearing 
attend the movies.
    Fourth, the NPRM proposes to require movie theaters to have a 
certain number of devices capable of delivering audio description and 
to provide them to patrons upon request. The NPRM recognizes that the 
devices currently required by the ADA for assistive listening often 
contain an extra channel and therefore can also be used to deliver 
audio description. The NPRM proposes minimal scoping for audio 
description listening devices and also permits movie theaters that have 
two-channel devices for assistive listening to use those devices for 
audio description in lieu of purchasing additional devices.
    Fifth, the NPRM proposes to require that movie theaters ensure that 
their staff has the capability to operate the

[[Page 44978]]

equipment to show captions and audio description and to show patrons 
how to use individual devices.
    Finally, the NPRM proposes that movie theaters provide the public 
with notice about the availability of captions and audio description. 
This provision is necessary because currently not all movies are 
produced with captions and audio description, and moviegoers who are 
deaf or hard of hearing or blind or have low vision, should have the 
ability to find out which movies are accessible to them.
    As with other effective communication obligations under the ADA, 
covered entities do not have to comply with these requirements to the 
extent that they constitute an undue burden or fundamental alteration.

Costs and Benefits

    With respect to the costs and benefits of this rule, the Department 
has prepared an Initial Regulatory Assessment (Initial RA). The Initial 
RA assesses the likely costs and benefits of the proposed rule. 
Expected benefits are discussed and likely costs are estimated for all 
theaters over the projected life of the rule (15 years), as well as for 
``small businesses'' in the movie exhibition industry as part of an 
Initial Regulatory Flexibility Analysis (IRFA), included therein.
    The Initial RA provides estimates of the total costs for two 
options. Option 1 assumes a compliance date for digital theaters of six 
months from the publication of the final rule and a compliance date for 
analog theaters of four years from the publication date of the final 
rule. Option 2 assumes that the rule will only apply to digital 
theaters and that application of the rule's requirements to analog 
theaters will be deferred. For Option 1, the total cost for all 
theaters over the 15-year period following publication of this rule in 
final form will likely range from $177.8 million to $225.9 million when 
using a 7 percent discount rate, and from $219.0 million to $275.7 
million when using a 3 percent discount rate, depending on which 
baseline is used regarding the extent to which theaters are or will 
soon be providing movie captioning and audio description as proposed in 
this rule, but independently of this rulemaking.\1\ Under Option 1, the 
annualized costs range from $19.5 million to $24.8 million when using a 
7 percent discount rate, and from $18.3 million to $23.1 million when 
using a 3 percent discount rate. For Option 2, total costs for all 
theaters with digital screens over the 15-year period following 
publication of this rule in final form will likely range from $138.1 
million to $186.2 million when using a 7 percent discount rate, and 
from $169.3 million to $226.0 million when using a 3 percent discount 
rate, depending on which baseline is used regarding the extent to which 
theaters are or will soon be providing movie captioning and audio 
description as proposed in this rule, but independently of this 
rulemaking.\2\ When annualized, these costs range from $15.2 million to 
$20.4 million when using a 7 percent discount rate, and from $14.2 
million to $18.9 million when using a 3 percent discount rate. In 
either case, the Initial RA shows that estimated annual costs for this 
proposed rule would not exceed $100 million in any year (under any of 
the three baseline scenarios).
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    \1\ Baseline 1 (only one screen per-theater already has the 
necessary equipment); Baseline 2 (all theaters of those companies 
affected by recent litigation/settlement agreements already have the 
necessary equipment); Baseline 3 (all digital theaters estimated by 
the National Association of Theater Owners (NATO) in 2013 as having 
captioning capabilities (53 percent) have done so independently of 
the proposed rule's requirements). See Initial RA for further 
details on Baseline estimations.
    \2\ Baseline 1 (only one screen per-theater already has the 
necessary equipment); Baseline 2 (all theaters of those companies 
affected by recent litigation/settlement agreements already have the 
necessary equipment); Baseline 3 (all digital theaters estimated by 
NATO in 2013 as having captioning capabilities (53 percent) have 
done so independently of the proposed rule's requirements). See 
Initial RA for further details on Baseline estimations.

                           Table ES-1--Annualized Costs and Benefits of Proposed Rule
                                      [2015 Dollars, 15-year time horizon]
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                    7% Discount rate                                         3% Discount rate
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    Baseline 1         Baseline 2                            Baseline 1         Baseline 2
 assumptions (one     assumptions         Baseline 3      assumptions (one     assumptions         Baseline 3
   screen per-        (litigation-    assumptions (NATO     screen per-        (litigation-    assumptions (NATO
     theater)            based)         survey based)         theater)            based)         survey based)
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                                                Costs (million $)
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                                Option 1--Four Year Compliance for Analog Screens
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          $24.8              $21.1              $19.5              $23.1              $19.7              $18.3
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                                Option 2--Deferred Rulemaking for Analog Screens
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          $20.4              $16.7              $15.2              $18.9              $15.6              $14.2
----------------------------------------------------------------------------------------------------------------
                                                    Benefits
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                   The proposed rule would address the discriminatory effects of communication barriers at movie
                   theaters encountered by individuals who are deaf or hard of hearing or are blind or have low
                   vision. By ensuring that movie theaters screen those movies that are produced and distributed
                   with the necessary auxiliary aids and services--captioning and audio description--and that
                   theaters provide the individual devices needed to deliver these services to patrons with
                   these particular disabilities, this rule would afford such individuals an equal opportunity
                   to attend movies and follow both the audio and visual aspects of movies exhibited at movie
                   theaters. Although the Department is unable to monetize or quantify the benefits of this
                   proposed rule, it would have important benefits. For example, it would provide people with
                   hearing and vision disabilities better access to the movie viewing experience enjoyed by
                   others; it would allow such persons to attend and enjoy movies with their family members and
                   acquaintances; it would allow people with hearing or vision disabilities to participate in
                   conversations about movies with family members and acquaintances; and it would promote other
                   hard-to-quantify benefits recognized in Executive Order 13563 such as equity, human dignity,
                   and fairness.
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[[Page 44979]]

    Because movie theater complexes vary greatly by number of screens, 
which significantly impacts overall costs per facility, the Initial RA 
breaks the movie exhibition industry into four theater types based on 
size--Megaplexes (16 or more screens), Multiplexes (8-15 screens), 
Miniplexes (2-7 screens), and Single Screen Theaters--and for Option 1, 
by digital or analog system. The average capital cost for digital 
Megaplex theaters in the first year is estimated to total $38,547, 
while the average capital cost for digital single screen theaters in 
the first year is estimated to total $3,198. Should the Department 
proceed under Option 1 and cover analog screens in the final rule, 
though with a four-year delayed compliance date, per theater costs for 
analog theaters would be higher than those for digital theaters for 
each type or size. The first year per-theater capital cost for analog 
single screen theaters is estimated to total $8,172. The first year 
per-theater capital costs for digital single screen theaters would 
average $3,198.
    The individuals who will directly benefit from this rule are those 
persons with hearing or vision disabilities who, as a result of this 
rule, would be able for the first time to attend movies with closed 
captioning or audio description in theaters across the country on a 
consistent basis. Individuals who will indirectly benefit from this 
rule are the family and friends of persons with hearing and vision 
disabilities who would be able to share the movie-going experience more 
fully with their friends or loved ones with hearing and vision 
disabilities.
    The benefits of this rule are difficult to quantify for multiple 
reasons. The Department has not been able to locate robust data on the 
rate at which persons with disabilities currently go to movies shown in 
movie theaters. In addition, as a result of this rule, the following 
number of persons will change by an unknown amount: (1) The number of 
persons with disabilities who will newly go to movies, (2) the number 
of persons with disabilities who will go to movies more often, (3) the 
number of persons who will go to the movies as part of a larger group 
that includes a person with a disability, and (4) the number of persons 
with disabilities who would have gone to the movies anyway but under 
the rule will have a fuller and more pleasant experience. In addition, 
the Department does not know precisely how many movie screens currently 
screen movies with closed captioning and audio description, or how many 
people with hearing or vision disabilities currently have consistent 
access to movie theaters that provide closed captioning and audio 
description. Finally, the Department is not aware of any peer-reviewed 
academic or professional studies that monetize or quantify the societal 
benefit of providing closed captioning and audio description at movie 
theaters.
    Data on movie-going patterns of persons who are deaf or hard of 
hearing or are blind or have low vision is very limited, making 
estimations of demand very difficult. However, numerous public comments 
suggest that many persons who are deaf or hard of hearing or are blind 
or have low vision do not go to the movies at all or attend movies well 
below the national average of 4.1 annual admissions per person because 
of the lack of auxiliary aids and services that would allow them to 
understand and enjoy the movie.
    Though we cannot confidently estimate the likely number of people 
who would directly benefit from this proposed rule, we have reviewed 
data on the number of people with hearing or vision disabilities in the 
United States. The Census Bureau estimates that 3.3 percent of the U.S. 
population has difficulty seeing, which translates into a little more 
than eight million individuals in 2010, and a little more than two 
million of those had ``severe'' difficulty seeing.\3\ At the same time, 
the Census Bureau estimates that 3.1 percent of people had difficulty 
hearing, which was a little more than 7.5 million individuals in 2010, 
and approximately one million of them having ``severe'' difficulty 
hearing. Not all of these people would benefit from this proposed rule. 
For example, some people's hearing or vision disability may not be such 
that they would need closed captioning or audio description. Some 
people with hearing or visions disabilities may not want to use the 
equipment for a variety of reasons. Others would not attend public 
screenings of movies even if theaters provided closed captioning and 
audio description simply because they do not enjoy going out to the 
movies--just as is the case among persons without disabilities.\4\ Some 
people with hearing or vision disabilities may already have consistent 
access to theaters that screen movies with closed captioning and audio 
description. And some theaters may not provide closed captioning and 
audio description for all their movies because it would be an undue 
burden under the ADA to do so.
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    \3\ The Census defines difficulty seeing as ``experiencing 
blindness or having difficulty seeing words or letters in ordinary 
newsprint even when normally wearing glasses or contact lenses.'' It 
defines difficulty hearing as ``experiencing deafness or having 
difficulty hearing a normal conversation, even when wearing a 
hearing aid.'' See U.S. Census Bureau, U.S. Department of Commerce, 
P70-131, Americans with Disabilities: 2010 Household Economic 
Studies at 8 (2012), available at http://www.census.gov/prod/2012pubs/p70-131.pdf (last visited July 14, 2014).
    \4\ In 2012, a little more than two thirds (68 percent) of the 
U.S. and Canadian population over two years old went to a movie at a 
movie theater at least once that year. See Motion Picture 
Association of America, Theatrical Market Statistics (2012), 
available from Movie Picture Association of America, http://www.mpaa.org/wp-content/uploads/2014/03/2012-Theatrical-Market-Statistics-Report.pdf (last visited July 14, 2014).
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    In addition to the direct beneficiaries of the proposed rule 
discussed above, others may be indirect beneficiaries of this rule. 
Family and friends of persons with these disabilities who wish to go to 
the movies as a shared social experience will now have greater 
opportunities to do so. The Department received numerous comments from 
individuals who are deaf or hard of hearing or are blind or have low 
vision in response to its 2010 Advance Notice of Proposed Rulemaking on 
Movie Captioning and Video Description in Movie Theaters describing how 
they were unable to take part in the movie-going experience with their 
friends and family because of the unavailability of captioning or audio 
description. Many individuals felt that this not only affected their 
ability to socialize and fully take part in family and social outings, 
but also deprived them of the opportunity to meaningfully engage in the 
discourse that often surrounds movie attendance. (See the Initial RA, 
Section 5 (Benefits) for more details and description of the potential 
benefits of this proposed rule.) Of perhaps greater significance to the 
discussion of the benefits of this rule, however, are issues relating 
to fairness, equity, and equal access, all of which are extremely 
difficult to monetize, and the Department has not been able to 
effectively quantify and place a dollar value on those benefits. 
Regardless, the Department believes the non-quantifiable benefits 
justify the costs of requiring captioning and audio description at 
movie theaters nationwide.
    In keeping with the Regulatory Flexibility Act (RFA), the Initial 
RA examined the economic impact of the proposed rule on small 
businesses in the movie exhibition industry. The current size standard 
for a small movie theater business is $35.5 million dollars in annual 
revenue. In 2007, the latest year for which detailed breakouts by 
industry and annual revenue are available, approximately 98 percent of 
movie theater firms met the standard for small business, and these 
firms

[[Page 44980]]

managed approximately 53 percent of movie theater establishments.\5\ 
The IRFA estimates the average initial capital costs per-firm for firms 
that display digital or analog movies under Option 1 and for firms that 
display digital movies under Option 2. The average costs for small 
firms (which have a proportionately higher number of Single Screens and 
Miniplexes) were between approximately 0.7 percent to 2.1 percent of 
their average annual receipts for firms with digital theaters, and 
between approximately 2.0 percent to 5.7 percent of average annual 
receipts for firms with analog theaters. The Department has determined 
that this proposed rule will have a significant economic impact on a 
substantial number of small businesses.
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    \5\ The size standard of $35.5 million can be found in U.S. 
Small Business Administration, Table of Small Business Size 
Standards Matched to North American Industry Classification System 
Codes, available at http://www.sba.gov/sites/default/files/files/Size_Standards_Table.pdf (last visited July 14, 2014).
---------------------------------------------------------------------------

    The Department has used the IRFA to examine other ways, if 
possible, to accomplish the Department's goals with fewer burdens on 
small businesses. Based on its assessment, the Department has decided 
to seek public comment on two options: One that would adopt a four-year 
compliance date for theaters' analog screens (Option 1), and the other 
that would defer application of the rule's requirements to movie 
theaters' analog screens and consider additional rulemaking at a later 
date (Option 2).

II. Background

A. Movie Basics, Captioning, and Audio Description Generally

    The very first movies were silent films. Talking pictures, or 
``talkies,'' added sound as a separate component in the mid-to-late 
1920s. Today, there are two formats for exhibiting movies in theaters: 
Analog movies and digital movies. The term analog movie describes what 
is generally understood as a movie exhibited in a traditional film form 
(generally 35 mm film). Currently, while the cinematography portion of 
analog movies is exhibited in a traditional film format, the sound 
portion of analog movies is generally provided in a digital format. 
Five to six reels of film are used for a typical two-hour long analog 
movie. These reels must be physically delivered to each movie theater 
exhibiting the movie. Digital sound accompanying analog movies is 
captured on CD-ROMs or optically or digitally on the film itself. 
Digital sound is synchronized to the visual images on the screen of the 
analog movie by a mechanism called a reader head, which reads a time 
code track printed on the film.
    A digital movie (digital cinema), by contrast, captures images, 
data, and sound on data files as a digital ``package'' that is stored 
on a hard drive or a flash drive. Digital movies are physically 
delivered to movie theaters on high resolution DVDs or removable or 
external hard drives, or can be transmitted to movie theaters' servers 
via Internet, fiber-optic, or satellite networks. Digital production, 
distribution, and exhibition are seen as having many advantages over 
analog film, including better and longer lasting image quality, 
availability of higher resolution images, lower production and 
distribution costs, ease of distribution, availability of enhanced 
effects such as 3D, ease of exhibition of live events or performances, 
and greater flexibility in arranging or increasing show times to 
accommodate unanticipated audience demand.
    The movie picture production industry is in the midst of a large 
and transformative conversion to digital cinema. This conversion is 
viewed by the industry as one of the most profound advances in motion 
picture production and technology of the last 100 years. On May 14, 
2013, an industry representative testified before Congress that the 
industry had nearly completed its transition to digital distribution 
and projection and that approximately 88 percent of all movie theater 
screens (nearly 35,000 screens) had already converted to digital. 
Testimony of John Fithian, President and CEO of the National 
Association of Theater Owners, Before the U.S. Senate Committee on 
Health, Education, Labor and Pension (May 14, 2013), available at 
http://www.help.senate.gov/imo/media/doc/Fithian.pdf (last visited July 
14, 2014).
    Captioning makes movies accessible to individuals who are deaf or 
hard of hearing and who are unable to benefit from the use of the 
assistive listening systems required for movie theaters to amplify 
sound. There are, at present, two types of captions available for 
movies: Open captions and closed captions. The terms ``closed 
captioning'' and ``open captioning'' have had special meaning in the 
movie theater context and differ from the way the terms are used in 
other settings (e.g., television). In the movie theater context, the 
movie industry and the courts have used the term ``closed captioning'' 
to mean that when the closed captions are in use, only the patron 
requesting the closed captions can see the captions because the 
captions are delivered to the patron at or near the patron's seat. The 
term ``open captioning'' has been used in the movie theater context to 
refer to the circumstances when the theater exhibits the captions so 
that all patrons see the captions on or near the screen. By contrast, 
in the television context, the term ``closed captioning'' has been used 
to refer to captions that can be seen on the screen when turned on by 
the viewer. In order to avoid confusion between the specific 
requirements in this proposed rule and the ways the terms open and 
closed captioning have historically been used in other settings, the 
Department proposes using the terms ``closed movie captioning'' and 
``open movie captioning'' in the regulatory text to specifically refer 
to captions that are provided in movie theaters. However, in the 
preamble, when discussing the history of captioning, the state of 
captioning technology, the legislative history of the ADA, and court 
decisions, the Department will continue to use the terms ``closed 
captioning'' and ``open captioning'' because such terms are used in the 
definition of auxiliary aids at 28 CFR 36.303(b).
    Open movie captions are similar to subtitles in that the text of 
the dialogue is visible to everyone in the movie theater. Unlike 
subtitles, open movie captions also describe other sounds and sound 
making (e.g., sound effects, music, and the character who is speaking) 
in an on-screen text format. Open captions in movies were sometimes 
referred to as ``burned-in'' or ``hardcoded'' captions because they 
were burned in or incorporated into the film. However, new open-
captioning technology enables studios to superimpose captions without 
making a burned-in copy or having to deliver a special version of the 
movie. Currently, some movie theaters exhibit open-captioned films at 
certain limited showings.
    Closed movie captioning, as that term is used in the regulatory 
text of this NPRM, refers to the display of the written text of the 
dialogue and other sounds or sound making only to those individuals who 
request it. When requested, the captions are delivered via individual 
captioning devices used by patrons at their seats.
    Audio description \6\ is a technology that enables individuals who 
are blind or have low vision to enjoy movies by providing a spoken 
narration of key visual elements of a visually delivered

[[Page 44981]]

medium, such as actions, settings, facial expressions, costumes, and 
scene changes. Audio description fills in information about the visual 
content of a movie where there are no corresponding audio elements in 
the film. It requires the creation of a separate script that is written 
by specially-trained writers and recorded on an audiotape or CD that is 
synchronized with the film as it is projected. The oral delivery of the 
script is transmitted to the user through infra-red or FM transmission 
to wireless headsets.
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    \6\ In the Department's Advance Notice of Proposed Rulemaking on 
Movie Captioning and Video Description (2010 ANPRM), 75 FR 43467 
(July 26, 2010), the Department used the term ``video description.'' 
In response to comments received from this ANPRM, the Department now 
refers to this process as ``audio description.''
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    Movie studios decide which movies to provide with captioning and 
audio description and then arrange to have the captions and audio 
description produced. Movie studios include these auxiliary aids in 
movies before the movies are distributed to movie theaters and do not 
charge movie theaters for this service. Movie studios are increasing 
the numbers of movies produced with captioning in large part because in 
1997 the Federal Communications Commission published regulations 
requiring programming (including movies) shown on television to be 
captioned. See 47 CFR part 79.
    Movie theaters are defined in the proposed rule to include only 
facilities used primarily for the purpose of showing movies to the 
public for a fee. As of the end of 2011 there were nearly 39,000 indoor 
movie screens in the United States and approximately 600 drive-in movie 
screens. See National Association of Theater Owners, Number of U.S. 
Movie Screens, available at http://natoonline.org/data/us-movie-screens/ (last visited July 14, 2014). Altogether, the four largest 
movie theater chains based on screen count--Regal Entertainment Group, 
AMC Entertainment, Inc., Cinemark USA, Inc., and Carmike Cinemas, 
Inc.--own or operate approximately 18,000 screens. As of 2010, the top 
ten domestic movie theater chains had 55 percent of the movie screens 
in the United States and Canada.\7\ According to comments submitted by 
the National Association of Theater Owners (NATO) in response to the 
Department's Advance Notice of Proposed Rulemaking on Movie Captioning 
and Video Description (2010 ANPRM), 75 FR 43467 (July 26, 2010) 
(discussed below), as of 2010, there were approximately 83 movie 
theater companies in the United States that own or operate 50 or more 
screens and, in the aggregate, these companies operate 30,432 screens 
in the United States. Of the additional 931 movie theater companies 
that own or operate fewer than 50 screens, 450 operate four screens or 
fewer, and 362 owners operate one site with one or two screens.
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    \7\ In addition to the four movie theater chains listed above, 
according to data available from the National Association of Theater 
Owners, the other six movie theater chains rounding out the domestic 
top ten as of July 2010, were Cineplex, Rave Cinemas, Marcus 
Theaters, Hollywood Theaters, National Amusements Inc., and Harkins 
Theaters.
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    Moreover, the number of small movie theater facilities continues to 
decline. Single screen and Miniplex (between two and seven screens) 
theaters steadily declined from 2007 to 2010, while the number of 
Multiplex (8-15 screens) and Megaplex (16 or more screens) theaters 
increased over that same time period. See Motion Picture Association of 
America (MPAA),\8\ Theatrical Market Statistics (2011), available at 
http://www.bumpercarfilms.com/assets/downloads/movies.pdf (last visited 
July 14, 2014). The decline in the number of small independently owned 
theaters is expected to accelerate as a result of the significant 
decrease anticipated in the availability of first-run films in analog 
format, as the majority of these small independently owned theaters are 
analog theaters. In 2011, the head of the MPAA was reported to have 
predicted that analog films would disappear in less than three years. 
See Tim O'Reiley, Theater Official Optimistic Despite Attendance Slump, 
Las Vegas Review Journal (March 19, 2011), available at http://www.reviewjournal.com/business/theater-official-optimistic-despite-attendance-slump (last visited July 14, 2014). Similarly, at the spring 
2013 CinemaCon industry convention, an industry analyst stated that by 
the end of 2015, analog film will no longer exist in cinemas, and it is 
likely that production of analog film in the United States will end by 
the end of 2013. See Lyndsey Hewitt, Local Theaters Face Tough Times as 
35 mm Faces Extinction, Sun Gazette.com (July 11, 2013), available at 
http://www.sungazette.com/page/content.detail/id/594504/Local-Theaters-Face-Tough-Times-as-35-mm-faces-extinction.html?nav=5016 (last visited 
July 14, 2014). Consequently, some, if not most, small independently 
owned theaters will likely have to close if they cannot afford to 
convert their projection systems from analog to digital. See also Colin 
Covert, Final reel plays amid digital conversion, Star Tribune (Aug. 
27, 2012), available at http://www.startribune.com/entertainment/movies/167253335.html?refer=y (last visited July 14, 2014).
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    \8\ The Motion Picture Association of America (MPAA) is a trade 
association representing the six major producers and distributors of 
theatrical motion pictures, home entertainment, and television 
programs, including Paramount Pictures Corporation, Sony Pictures 
Entertainment Inc, Twentieth Century Fox Film Corporation, Universal 
City Studios LLP, Walt Disney Studios Motion Pictures, and Warner 
Bros. Entertainment Inc.
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    Despite the recent economic downturn, movies continue to be a major 
source of entertainment in the United States. In 2012, moviegoers in 
the United States and Canada bought a record $10.8 billion in movie 
tickets, with the largest number of tickets (1.36 billion) sold in 
three years. Motion Picture Association of America, Theatrical Market 
Statistics at 4 (2012), available at http://www.mpaa.org/wp-content/uploads/2014/03/2012-Theatrical-Market-Statistics-Report.pdf (last 
visited July 14, 2014). Movie theaters continue to draw more people 
than all theme parks and major U.S. sporting events combined. Id. at 
10.

B. Legal Authority To Require Captioning and Audio Description

1. The ADA
    On July 26, 1990, President George H.W. Bush signed into law the 
ADA, a comprehensive civil rights law prohibiting discrimination on the 
basis of disability. The ADA broadly protects the rights of individuals 
with disabilities in employment, access to State and local government 
services, places of public accommodation, transportation, and other 
important areas of American life. The ADA also requires, in pertinent 
part, newly designed and constructed or altered public accommodations 
and commercial facilities to be readily accessible to and usable by 
individuals with disabilities. 42 U.S.C. 12101 et seq.
    Title III of the ADA prohibits discrimination on the basis of 
disability in the ``full and equal enjoyment'' of places of public 
accommodation (privately operated entities whose operations affect 
commerce and that fall into one of twelve categories listed in the ADA, 
such as restaurants, movie theaters, schools, day care facilities, 
recreational facilities, and doctors' offices) and requires newly 
constructed or altered places of public accommodation--as well as 
commercial facilities (privately owned, nonresidential facilities such 
as factories, warehouses, or office buildings)--to comply with the ADA 
Standards. 42 U.S.C. 12181-12189. Title III of the ADA includes movie 
theaters within its definition of places of public accommodation. 42 
U.S.C. 12181(7)(C). Movie studios and other entities that

[[Page 44982]]

produce movies to be shown in theaters are not public accommodations by 
virtue of the making of movies, and therefore are not covered by title 
III in their production of movies.
    Title III makes it unlawful to discriminate against an individual 
on the basis of disability in the full and equal enjoyment of the 
goods, services, facilities, privileges, advantages, or accommodations 
of any place of public accommodation. 42 U.S.C. 12182(a). Moreover, 
title III prohibits public accommodations such as movie theaters from 
affording an unequal or lesser service to individuals or classes of 
individuals with disabilities than is offered to other individuals. 42 
U.S.C. 12182(b)(1)(A)(ii). Title III requires public accommodations to 
take ``such steps as may be necessary to ensure that no individual with 
a disability is excluded, denied services, segregated or otherwise 
treated differently . . . because of the absence of auxiliary aids and 
services, unless the entity can demonstrate that taking such steps 
would fundamentally alter the nature of the good, service, facility, 
privilege, advantage, or accommodation being offered or would result in 
an undue burden.'' \9\ 42 U.S.C. 12182(b)(2)(A)(iii). The statute 
defines auxiliary aids and services to include ``qualified interpreters 
or other effective methods of making aurally delivered materials 
available to individuals with hearing impairments'' and ``taped texts, 
or other effective methods of making visually delivered materials 
available to individuals with visual impairments.'' 42 U.S.C. 
12103(1)(A)-(B).
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    \9\ An undue burden is one that results in significant 
difficulty or expense for the public accommodation. See 28 CFR 
36.104.
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2. The ADA Title III Regulation \10\
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    \10\ Congress gave the Attorney General the authority and 
responsibility to issue regulations to carry out the provisions of 
title III of the ADA. 42 U.S.C. 12186(b).
---------------------------------------------------------------------------

    The Department of Justice's regulation implementing title III of 
the ADA provides additional examples of auxiliary aids and services 
that are required by the statute. The regulation lists open and closed 
captioning and audio recordings and other effective methods of making 
visually-delivered materials available to individuals with visual 
impairments as examples of auxiliary aids and services that should be 
provided by public accommodations. 28 CFR 36.303(b)(1)-(2). This list 
was revised in 2010 to reflect changes in technology and the auxiliary 
aids and services commonly used by individuals who are deaf or hard of 
hearing or blind or have low vision. 75 FR 56236, 56253-56254 (Sept. 
15, 2010). The title III regulation reiterates the requirement of the 
statute, stating that a public accommodation shall take those steps 
that may be necessary to ensure that no individual with a disability is 
excluded, denied services, segregated, or otherwise treated differently 
than other individuals because of the absence of auxiliary aids and 
services, unless the public accommodation can demonstrate that 
providing such aids and services would fundamentally alter the nature 
of the goods, services, facilities, privileges, advantages, or 
accommodations being offered or would result in an undue burden. 28 CFR 
36.303(a). The title III regulation reflects that the overarching 
objective and obligation imposed by the auxiliary aids and services 
requirement is that a public accommodation must furnish appropriate 
auxiliary aids and services where necessary to ensure effective 
communication with individuals with disabilities. 28 CFR 36.303(c)(1). 
The type of auxiliary aid or service necessary to ensure effective 
communication varies in accordance with the method of communication 
used by the individual; the nature, length, and complexity of the 
communication involved; and the context in which the communication is 
taking place. 28 CFR 36.303(c)(1)(ii). Moreover, in order to be 
effective, auxiliary aids and services must be provided in accessible 
formats and in a timely manner. Id. For individuals who are deaf or 
hard of hearing and are prevented from being able to effectively use 
the assistive listening receivers currently provided in movie theaters 
to amplify sound, the only auxiliary aids presently available that 
would effectively communicate the dialogue and sounds in a movie are 
captioning or sign language interpreting. Likewise, for individuals who 
are blind or who have very low vision, the only auxiliary aid presently 
available that would effectively communicate the visual components of a 
movie is audio description.
    As stated above, a public accommodation is relieved of its 
obligation to provide a particular auxiliary aid (but not all auxiliary 
aids), if to do so would result in an undue burden or a fundamental 
alteration. To that end, the Department's title III regulation 
specifically defines undue burden as ``significant difficulty or 
expense'' and, emphasizing the flexible and individualized nature of 
any such defense, lists five factors that must be considered when 
determining whether an action would constitute an undue burden. See 28 
CFR 36.104. These factors include: (1) The nature and cost of the 
action; (2) the overall financial resources of the site or sites 
involved in the action; the number of persons employed at the site; the 
effect on expenses and resources; legitimate safety requirements that 
are necessary for safe operation, including crime prevention measures; 
or the impact otherwise of the action upon the operation of the site; 
(3) the geographic separateness, and the administrative or fiscal 
relationship of the site or sites in question, to any parent 
corporation or entity; (4) if applicable, the overall financial 
resources of any parent corporation or entity; the overall size of the 
parent corporation or entity with respect to the number of its 
employees; and the number, type, and location of its facilities; and 
(5) if applicable, the type of operation or operations of any parent 
corporation or entity, including the composition, structure, and 
functions of the workforce of the parent corporation or entity. Id. The 
undue burden defense entails a fact-specific examination of the cost of 
a specific action and the specific circumstances of a particular public 
accommodation. This defense also is designed to ensure that the needs 
of small businesses, as well as large businesses, are addressed and 
protected.
    The Department defines fundamental alteration as a ``modification 
that is so significant that it alters the essential nature of the 
goods, services, facilities, privileges, advantages, or accommodations 
offered.'' U.S. Department of Justice, Americans with Disabilities Act 
ADA Title III Technical Assistance Manual Covering Public 
Accommodations and Commercial Facilities III-4.3600, available at 
http://www.ada.gov/taman3.html (last visited July 14, 2014).
    If a provision of a particular auxiliary aid or service by a public 
accommodation would result in a fundamental alteration or an undue 
burden, the public accommodation is not relieved of its obligations to 
provide auxiliary aids and services. The public accommodation is still 
required to provide an alternative auxiliary aid or service, if one 
exists, that would not result in such an alteration or burden but would 
nevertheless ensure that, to the maximum extent possible, individuals 
with disabilities receive the goods and services offered by the public 
accommodation. 28 CFR 36.303(g). It is the Department's view that it 
would not be a fundamental alteration of the business of showing movies 
in theaters to exhibit movies with closed captions and audio 
descriptions in order to provide effective communication to

[[Page 44983]]

individuals who are deaf or hard of hearing or blind or have low 
vision.
3. The Legislative History of the ADA
    While the ADA itself contains no explicit language regarding 
captioning (or audio description) in movie theaters, the legislative 
history of title III states that ``[o]pen captioning * * * of feature 
films playing in movie theaters, is not required by this legislation. 
Filmmakers are, however, encouraged to produce and distribute open-
captioned versions of films, and theaters are encouraged to have at 
least some pre-announced screenings of a captioned version of feature 
films.'' H.R. Rep. No. 101-485, pt. 2, at 108 (1990); S. Rep. No. 101-
116, at 64 (1989).\11\ Congress was silent on the question of closed 
captions in movie theaters, a technology not yet developed for use in 
movie theaters, but it acknowledged that closed captions might be an 
effective auxiliary aid and service for making aurally delivered 
information available to individuals who are deaf or hard of hearing. 
See H.R. Rep. No. 101-485, pt. 2, at 107. Importantly, the House 
Committee stated that ``technological advances can be expected to 
further enhance options for making meaningful and effective 
opportunities available to individuals with disabilities. Such advances 
may require public accommodations to provide auxiliary aids and 
services in the future which today would not be required because they 
would be held to impose undue burdens on such entities.'' Id. at 
108.\12\ Similarly, in 1991, when issuing its original title III 
regulation, the Department stated in preamble language that ``[m]ovie 
theaters are not required * * * to present open-captioned films,'' but 
the Department was silent as to closed captioning. 56 FR 35544, 35567 
(July 26, 1991). The Department also noted, however, that ``other 
public accommodations that impart verbal information through 
soundtracks on films, video tapes, or slide shows are required to make 
such information accessible to persons with hearing impairments. 
Captioning is one means to make the information accessible to 
individuals with disabilities.'' Id.
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    \11\ In 1990, the only way to include open-captions in a movie 
was to create a separate print of the movie and then laser-etch, or 
``burn,'' the captions onto that separate print. Limited copies of 
the open-captioned print were made and these copies were distributed 
after the uncaptioned versions to some, but by no means all, movie 
theaters.
    \12\ As the district court noted in Ball v. AMC Entertainment, 
Inc., 246 F. Supp. 2d 17, 22 (D.D.C. 2003), ``Congress explicitly 
anticipated the situation presented in this case [the development of 
technology to provide closed captioning of movies]. Therefore, the 
isolated statement that open captioning of films in movie theaters 
was not required in 1990 cannot be interpreted to mean that [movie 
theaters] cannot now be expected and required to provide closed 
captioning of films in their movie theaters.''
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    The legislative history of the ADA and the Department's commentary 
in the preamble to the 1991 regulation make clear that although 
Congress was not requiring open captioning of movies in 1990, it was 
leaving open the door for the Department to require captioning in the 
future as the technology developed. Congress did not specifically 
mention audio description in the legislative history; however, audio 
description clearly falls within the type of auxiliary aid contemplated 
by the ADA. Moreover, given the present state of technology, the 
Department believes that mandatory requirements for captioning and 
audio description in movie theaters fit comfortably within the meaning 
of the statutory text.
4. Federal Appellate Case Law Addressing Captioning and Audio 
Description
    In April 2010, the first and only Federal appellate court to 
squarely address the question of whether captioning and audio 
description are required in movie theaters under the ADA determined 
that the ADA required movie theater owner and operator Harkins 
Amusement Enterprises, Inc., and its affiliates, to screen movies with 
closed captioning and descriptive narration (audio description) unless 
such owners and operators could demonstrate that to do so would amount 
to a fundamental alteration or undue burden. Arizona v. Harkins 
Amusement Enterprises, Inc., 603 F.3d 666, 675 (9th Cir. 2010). The 
Ninth Circuit held that because closed captioning and audio 
descriptions are correctly classified as ``auxiliary aids and 
services,'' a movie theater may be required to provide them under the 
ADA, and thus, the lower court erred in holding that these services 
fell outside the scope of the ADA. Id. (citing 42 U.S.C. 
12182(b)(2)(A); 28 CFR 36.303).\13\
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    \13\ A consent decree was entered into on November 7, 2011, in 
which Harkins agreed to provide closed captioning and audio 
description at all 346 screens in its 25 movie theaters by January 
15, 2013. See Consent Decree in Arizona v. Harkins Amusement 
Enterprises, Inc., 603 F.3d 666 (9th Cir. 2010), ECF 131, CV07-703 
PHX ROS, Approved 11/07/2011. In February 2012, Harkins announced 
that it expected to have all of its theaters equipped with closed 
captioning and audio description by the end of 2012. Press Release, 
Arizona Commission for the Deaf and Hard of Hearing, ``Harkins 
Theatres announces closed captioning and descriptive narration 
devices'' (Feb. 16, 2012), available at http://www.acdhh.org/news/harkins-theatres-announces-closed-captioning-and-descriptive-narration-devices (last visited July 14, 2014).
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    Representatives of the movie industry (movie studios and movie 
theater owners and operators) who commented on the 2010 ANPRM contended 
that exhibiting captioning is a fundamental alteration of its services. 
The Department does not agree with that assertion. As the Department 
asserted in its amicus brief filed in the Harkins case, exhibiting 
movies with captioning and audio description does not fundamentally 
alter the nature of the service provided by movie theaters. The service 
movie theaters provide is screening or exhibiting movies. The use of 
auxiliary aids to make that service available to those who are deaf or 
hard of hearing or blind or have low vision does not change that 
service. Rather, the provision of auxiliary aids such as captioning and 
audio description are the means by which these individuals gain access 
to the movie theaters' services and therefore achieve the ``full and 
equal enjoyment,'' 42 U.S.C. 12182(a), of the screening of movies. See 
Brief for the United States as Amicus Curiae Supporting Appellants and 
Urging Reversal at 15-16, Harkins Amusement, supra, (9th Cir. Feb. 6, 
2009) (No. 08-16075).

C. Need for Department Action

1. Importance of Movies in American Culture
    Going to the movies is a quintessential American experience. In any 
given month, over 56 million adults (roughly 26 percent of the adult 
population) make a trip to a movie theater to take in a movie. See 
Experian Marketing Services, 2010 American Movie-Goer Consumer Report, 
available at http://www.experian.com/blogs/marketing-forward/2010/02/20/2010-american-movie-goer-consumer-report/ (last visited July 14, 
2014). Going to the movies is also an important social experience and 
pastime of teenagers and young adults. And while teenagers and young 
adults are more likely to go to the movies than older adults, adults 
over 50 outnumber young adults when it comes to raw number of 
moviegoers. Id. Moreover, going to the movies is also an important part 
of the American family experience. Long holiday weekends offer the 
movie industry some of the biggest box offices sales as families gather 
for the holidays and head out to the theaters together.
    Movies are a part of our shared cultural experience, ``water 
cooler'' talk, and the subject of lunch-time conversations. The Supreme 
Court observed over 60 years ago that motion pictures ``are a 
significant medium for the communication of ideas'' and ``may

[[Page 44984]]

affect public attitudes and behavior in a variety of ways, ranging from 
direct espousal of a political or social doctrine to subtle shaping of 
thought which characterizes all artistic expression. The importance of 
motion pictures as an organ of public opinion is not lessened by the 
fact that they are designed to entertain as well as to inform.'' Joseph 
Burstyn, Inc. v. Wilson, 343 U.S. 495, 501 (1952). When individuals who 
are deaf or hard of hearing or blind or have low vision have the 
opportunity to attend movies that they can actually understand because 
of the use of captions or audio description, they are exposed to new 
ideas and gain knowledge that contributes to the development of their 
communication and literacy.
    The Department received numerous comments from individuals with 
these disabilities in response to its 2010 ANPRM describing how they 
were unable to take part in the movie-going experience with their 
friends and family because of the unavailability of captioning or audio 
descriptions. Many individuals felt that this not only affected their 
ability to socialize and fully take part in group or family outings, 
but also deprived them of the opportunity to meaningfully engage in the 
discourse that often surrounds movie attendance.
    Commenters who have some functional degree of hearing, like those 
who use hearing aids or cochlear implants, explained that going to the 
movies is frustrating and unenjoyable for them. One commenter who wears 
a hearing aid and cannot benefit from assistive listening receivers 
currently provided in movie theaters said she often misses half the 
plot when she goes to a movie and has to rent the movie when it comes 
out on DVD so she can turn on the captions and learn what she has 
missed. Several other commenters also indicated that the assistive 
listening receivers available at movie theaters were only suitable for 
individuals with mild to moderate hearing loss.
2. Numbers of Individuals With Hearing and Vision Disabilities
    According to 2010 census data, 7.6 million people reported that 
they experienced a hearing difficulty (defined as experiencing deafness 
or having difficulty hearing a normal conversation, even when wearing a 
hearing aid). Of those individuals, 1.1 million reported having a 
severe difficulty hearing. In addition, 8.1 million people reported 
having some degree of difficulty seeing (defined as experiencing 
blindness or having difficulty seeing words or letters in ordinary 
newsprint even when normally wearing glasses or contact lenses). Of 
those individuals, 2.0 million reported they were blind or unable to 
see. See U.S. Census Bureau, U.S. Department of Commerce, P70-131, 
Americans with Disabilities: 2010 Household Economic Studies at 8 
(2012), available at http://www.census.gov/prod/2012pubs/p70-131.pdf 
(last visited July 14, 2014). For people aged 65 or older, Census data 
indicated that 4.2 million had difficulty hearing (as defined by the 
Census), and 3.8 million reported having difficulty seeing (as defined 
by the Census). Id. As stated above, for several reasons it is unlikely 
that all people who reported having a vision or hearing disability to 
the Census would benefit from this rule. However, hearing and vision 
loss are highly correlated with aging, and as the U.S. population 
ages,\14\ the number of individuals with hearing or vision loss is 
projected to increase significantly. Research indicates that the number 
of Americans with a hearing loss has doubled during the past 30 years. 
See American Speech-Language-Hearing Association, The Prevalence and 
Incidence of Hearing Loss in Adults, available at http://www.asha.org/public/hearing/disorders/prevalence_adults.htm (last visited July 14, 
2014). Experts predict that by 2030, severe vision loss will double 
along with the country's aging population. See American Foundation for 
the Blind, Aging and Vision Loss Fact Sheet, available at http://www.afb.org/section.aspx?FolderID=3&SectionID=44&TopicID=252&DocumentID=3374 (last 
visited July 14, 2014). This increase will likely lead to a 
corresponding increase in the number of people who will need captioning 
or audio description. Not all these individuals will necessarily take 
advantage of the movie captioning and audio description that would be 
provided under this proposed rule, but a significant portion of this 
population would be eligible to directly benefit from this proposed 
rule (see, infra, section VI.A.3 for a more detailed discussion of the 
population eligible to receive benefits).
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    \14\ The percentage of Americans approaching middle age or older 
is increasing. The 2010 Census found that during the decade spanning 
2000 to 2010, the percentage of adults aged 45 to 64 years increased 
by 31.5 percent while the population aged 65 and over grew at a rate 
of 15.1 percent. By contrast, the population of adults between 18 
and 44 grew by only 0.6 percent. U.S. Census Bureau, U.S. Department 
of Commerce, C2010BR-03, Age and Sex Composition in the United 
States: 2010 Census Brief 2 (2011), available at www.census.gov/prod/cen2010/briefs/c2010br-03.pdf (last visited July 14, 2014).
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    The Department believes that captioning will be used by some 
persons with moderate hearing loss as well as persons with severe 
hearing loss or who are profoundly deaf. Many individuals with hearing 
loss have difficulty discriminating among competing sounds in the movie 
and understanding what they hear, even if they can hear those sounds. 
Sounds from other patrons can also interfere with the ability of a 
patron with partial hearing loss to catch all the dialogue in a movie. 
Other individuals have difficulty understanding what is being said if 
the actors speak with foreign accents or have poor enunciation, and 
those patrons who rely even partly on lip reading will miss some 
dialogue because they cannot always see the actor's face. Individuals 
with hearing loss who have some level of improved hearing comprehension 
aided by hearing aids, middle ear implants, and cochlear implants, may 
also experience the same difficulty discriminating among competing 
sounds in the movie environment as those individuals with unaided 
partial hearing loss.\15\ It is critical that all of these individuals 
are not shut out of an emblematic part of our culture.
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    \15\ ``While many people tend to think that the only factor in 
hearing loss is loudness, there are actually two factors involved: 
Loudness and clarity. Loss generally occurs first in the high pitch, 
quiet range. A mild loss can cause one to miss 25-40% of speech, 
depending on the noise level of the surroundings and distance from 
the speaker. When there is background noise, it becomes difficult to 
hear well; speech may be audible but may not be understandable.'' 
Hearing Loss Association of Oregon, Facing the Challenge: A 
Survivor's Manual for Hard of Hearing People (revised 4th ed. Spring 
2011), at 8, available at http://www.hearinglossor.org/survivor_manual.pdf (last visited July 14, 2014). The degrees of hearing loss 
include: (1) Mild (25 to 40 dB): Faint or distant speech may be 
difficult; lip reading can be helpful; (2) Moderate (41 to 55 dB): 
Conversational speech can be understood at a distance of three to 
five feet; as much as 50% of discussions may be missed if the voices 
are faint or not in line of vision; (3) Moderately Severe (56 to 70 
dB): Speech must be loud in order to be understood; group 
discussions will be difficult to follow; (4) Severe (71 to 90 dB): 
Voices may be heard from a distance of about 1 foot from the ear; 
and (5) Profound (more than 91dB): Loud sounds may be heard, but 
vibrations will be felt more than tones heard; vision rather than 
hearing, is the primary avenue for communication. Id.
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3. Voluntary Compliance
    Some movie industry commenters asserted that because Congress 
suggested a voluntary approach to accessibility for exhibiting movies 
in the 1989 and 1990 legislative history, when only burned-in open 
captions on separate prints of film were available, the Department 
should refrain from regulating in this area now and should simply 
continue to rely on voluntary

[[Page 44985]]

compliance by the movie theaters. However, since that time, the 
technology to display open captions has evolved significantly and 
closed captioning technologies have been developed. Both of these 
developments are examples of the types of ``technological advances'' 
that have enhanced ``options for making meaningful and effective 
opportunities available to individuals with disabilities.'' H.R. Rep. 
No. 101-485, pt. 2, at 107. Commenters on the 2010 ANPRM advised the 
Department that despite these technological advances, even at that 
time, few movie theaters showed movies with captioning and audio 
description. In addition, these commenters advised the Department that 
in their experience, many theaters that had the capacity to show movies 
with captioning and audio description only did so for selected films 
shown at intermittent times.
    In the three years since the Department last received public 
comment on these issues after the publication of its 2010 ANPRM (see 
discussion below), the number of movie theaters that are showing movies 
with closed captioning and audio description has increased as well as 
the times those captioned and audio described movies are shown each 
week. This described increase is attributable in some ways to 
settlements of Federal or State disability rights lawsuits brought by 
private plaintiffs or State attorneys general against individual movie 
theater companies in particular jurisdictions within the United 
States.\16\ Despite the success of private litigation in some areas of 
the country, closed captions and audio description are still not 
available for movies produced and distributed with these features at 
all theaters across the United States. The Department believes that 
access to movies for persons who are deaf or hard of hearing or are 
blind or have low vision should not depend upon where they live.\17\
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    \16\ See, e.g., Press Release, Illinois Attorney General, 
``Madigan Announces Settlement with AMC Theatres'' (Apr. 4, 2012) 
available at http://illinoisattorneygeneral.gov/pressroom/2012_04/20120404.html (last visited July 14, 2014) (settlement providing for 
provision of captioning and audio technology in all AMC theaters in 
the state of Illinois); Wash. State Commc'n Access Project v. Regal 
Cinemas, Inc., 290 P.3d 331 (Wash. Ct. App. 2012) (upholding trial 
court decision under Washington Law Against Discrimination requiring 
six theater chains to provide captions in the screening of movies in 
order to accommodate persons who are deaf or hard of hearing.); 
Arizona v. Harkins Amusement Enters., Inc., 603 F.3d 666, 675 (9th 
Cir. 2010) (settlement agreement filed 11/07/2011 CV07-703 PHX ROS); 
Complaint, Ass'n of Late-Deafened Adults v. Cinemark Holdings, Inc., 
No. 10548765 (Cal. App. Dep't Super. Ct. filed Nov. 30, 2010) 
(complaint relating to settlement requiring Cinemark to provide 
closed captions in all its California theaters); Press Release, 
Cinemark Holdings, Inc., Cinemark and ALDA Announce Greater Movie 
Theatre Accessibility for Customers who are Deaf or Hard-of-Hearing 
(April 26, 2011), available at http://www.cinemark.com/pressreleasedetail.aspx?node_id=22850 (last visited July 14, 2014).
    \17\ For example, it is the Department's understanding that 
persons who live in communities served only by smaller regional 
movie theater chains are far less likely to have access to captioned 
and audio-described movies than individuals with disabilities who 
live in California, Arizona, or any of the major cities with 
theaters operated by Regal, Cinemark, or AMC. The Department bases 
this belief on its review of the information provided by 
Captionfish, which is a nationwide search engine that monitors which 
theaters offer both closed and open captions and audio description, 
and updates its Web site regularly. See Frequently Asked Questions, 
http://www.captionfish.com/faq (last visited July 14, 2014).
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    Consequently, the Department believes it is in the interest of both 
the movie theater industry and persons with disabilities to have 
consistent ADA requirements for movie captioning and audio description 
throughout the United States and that this is best accomplished through 
revising the ADA title III regulation as proposed in this NPRM. The 
Department is persuaded that it should move forward with a regulation 
requiring captioning and audio descriptions so that the current and 
ever increasing numbers of individuals who are deaf or hard of hearing 
or blind or have low vision and who are unable to enjoy the goods and 
services offered by movie theaters can participate in this facet of 
American life.

D. The Department's Rulemaking History Regarding Captioning and Audio 
Description

1. Rulemaking History Prior to the 2010 ANPRM
    On September 30, 2004, the Department published an Advance Notice 
of Proposed Rulemaking (2004 ANPRM) to begin the process of updating 
the 1991 title II and title III regulations to adopt revised ADA 
Standards based on the relevant parts of the 2004 Americans with 
Disabilities and Architectural Barriers Act Accessibility Guidelines 
(2004 ADA/ABA Guidelines). 69 FR 58768. When the Department issued the 
2004 ANPRM, it did not identify movie captioning or audio description 
as potential areas of regulation, but several commenters requested that 
the Department consider regulating in these areas.
    Keeping in mind that the ADA's legislative history made clear that 
the ADA ought not be interpreted so narrowly or rigidly that new 
technologies are excluded, as the Department became aware of 
innovations in the field of captioning and audio description 
technology, it began to contemplate how these technologies might be 
incorporated into its ADA rules. The need for advancement in the area 
of access to movie theaters was necessary because assistive listening 
systems in movie theaters could not be used to effectively convey the 
audio content of movies for individuals who are deaf or who have severe 
or profound hearing loss. Additionally, there were no auxiliary aids 
being provided to individuals who are deaf to access the sound content 
of the movie or to individuals who are blind or have low vision to 
access the visual content of the movie. Accordingly, the Department 
decided to address the topic of requiring closed captioning and audio 
description (referred to as narrative description) at movie theaters in 
its June 17, 2008, Notice of Proposed Rulemaking (2008 NPRM). 73 FR 
34508, 34530. In the 2008 NPRM, the Department stated that it was 
considering options under which it might require movie theaters to 
exhibit movies that are captioned for patrons who are deaf or hard of 
hearing and provide audio description for patrons who are blind or have 
low vision.
    The 2008 NPRM did not propose any specific regulatory language with 
regard to movie captioning or audio description, but asked whether, 
within a year of the revised regulation's effective date, all new 
movies should be exhibited with captions and audio description at every 
showing or whether it would be more appropriate to require captions and 
audio description less frequently. The preamble made clear that the 
Department did not intend to specify which types of captioning to 
provide and stated that such decisions would be left to the discretion 
of the movie theaters. The Department received many comments in 
response to its 2008 NPRM questions from individuals with disabilities, 
organizations representing individuals with disabilities, nonprofit 
organizations, state-governmental entities, and representatives from 
the movie industry (movie studios and movie theaters).
    Individuals with disabilities, advocacy groups, a representative 
from a nonprofit organization, and representatives of state 
governments, including 11 State attorneys general, overwhelmingly 
supported issuance of a regulation requiring movie theaters to exhibit 
captioned and audio-described movies at all showings unless doing so 
would result in an undue burden or

[[Page 44986]]

fundamental alteration. These groups noted that although the technology 
to exhibit movies with captions and audio description has been in 
existence for about 10 years, most movie theaters still were not 
exhibiting movies with captioning and audio description. As a result, 
these groups indicated that they believed regulatory action should not 
be delayed until the conversion to digital cinema had been completed.
    Representatives from the movie industry strongly urged the 
Department not to issue a regulation requiring captioning, or if it did 
so, to delay the effective date so as to coincide with the completion 
of conversion to digital cinema. They also objected to any requirement 
regarding audio description at movie theaters. Industry commenters also 
said that the cost of obtaining the equipment necessary to display 
closed-captioned and audio-described movies would constitute an undue 
burden.
    For a more detailed discussion of the comments received in response 
to the 2008 NPRM, see 2010 ANPRM, 75 FR 43467 (July 26, 2010).
2. The 2010 Advance Notice of Proposed Rulemaking
    The Department was not persuaded that strides made in making 
captioning and audio description technology available to moviegoers 
with disabilities were sufficient to make regulatory action in this 
area unnecessary. However, rather than issue a final rule, the 
Department issued a supplemental Advance Notice of Proposed Rulemaking 
(2010 ANPRM) on July 26, 2010, 75 FR 43467, for three reasons. First, 
the Department wished to obtain more information regarding several 
issues raised by commenters that were not addressed in the 2008 NPRM. 
Second, the Department sought public comment on several technical 
questions that arose out of comments on the 2008 NPRM. Finally, in the 
years since issuance of the 2008 NPRM, the Department became aware that 
movie theaters, particularly major movie theater chains, either had 
entered into, or had plans to enter into agreements with the movie 
studios to underwrite the conversion to digital cinema. During that 
same time period, however, the United States' economy and the 
profitability of many public accommodations experienced significant 
setbacks. The Department, among other things, wished to gather more 
information about the status of digital conversion, including 
projections about when movie theaters, both large and small, expected 
to exhibit movies using digital cinema, the percentage of movie screens 
expected to be converted to digital cinema by year, and any relevant 
protocols, standards, and equipment that had been developed for 
captioning and audio description for digital cinema. In addition, the 
Department wanted to learn whether other technologies (e.g., 3D) had 
developed or were in the process of development that either would 
replace or augment digital cinema or make any regulatory requirements 
for captioning and audio description more difficult or expensive to 
implement.
    In the 2010 ANPRM, the Department explained that it was considering 
phasing in a requirement that 50 percent of movie screens offer 
captioning and audio description over a five-year period. The 
Department did not propose any regulatory language in the ANPRM.
    In order to gather the necessary information and to determine how 
best to frame the regulation, the Department posed 26 questions in its 
2010 ANPRM. These questions were divided into six general categories: 
Coverage of any proposed rule; transition to digital cinema; equipment 
and technology for both analog and digital cinema movies; notice; 
training; and cost and benefits of captioning and audio description.
    The Department conducted three public hearings to receive testimony 
on the 2010 ANPRM: The first in Chicago, Illinois, on November 18, 
2010; the second in Washington, DC, on December 16, 2010; and the final 
hearing in San Francisco, California, on January 10, 2011. Each hearing 
included a full schedule of presenters, and many individuals came to 
listen to the various presentations.\18\ These public hearings were 
rebroadcast on-demand through the end of the comment period (January 
24, 2011) and were streamed live on the Web to viewers across the 
country.
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    \18\ The Department issued four ANPRMs on July 26, 2010, and 
invited testimony on all four ANPRMs at each public hearing. See 75 
FR 66054 (Oct. 27, 2010).
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    The number of comments submitted by the public in response to this 
ANPRM was extraordinary--the Department received over 1150 comments. 
Commenters included hundreds of individuals, both with and without 
disabilities, advocacy groups representing individuals with 
disabilities, 13 State attorneys general, movie industry 
representatives, and other organizations. Industry commenters asked 
that the Department not regulate at that time or, in the alternative, 
require that only 25 percent of movie screens that have converted to 
digital have equipment to display captioning or audio description. 
However, almost all other commenters supported a regulation requiring 
exhibition of movies with captioning and audio description. 
Significantly, even though the Department did not propose that 
captioning and audio description be provided at all showings, the vast 
majority of commenters who discussed this subject advocated that the 
Department do just that. In addition, most of these commenters stated 
that such a requirement should be implemented immediately rather than 
phased in over a five-year period. Industry commenters pointed out that 
rolling out captioning and audio description at 20 percent per year 
over a five-year period would be difficult to implement and that they 
supported a five-year compliance schedule.

III. General Issues

A. Current State of the Technology for Exhibiting Movies With 
Captioning and Audio Description and Availability of Product

1. Captioning and Audio Description for Analog Movies
    It is the Department's understanding, based upon independent 
research and the comments received in response to the 2010 ANPRM, that 
because of the major movie theater companies' commitment to the 
transition to digital cinema, research and investment into ways to 
deliver closed captioning has shifted away from analog movies to 
digital cinema. As such, there is only one product currently available 
on the market for providing closed captions for analog movies: Rear 
Window[supreg] Captioning (Rear Window[supreg] or RWC). RWC, when 
combined with audio description provided by DVS-Theatrical[supreg] 
(DVS), is called MoPix[supreg] systems.\19\
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    \19\ The Department is not endorsing any product or company 
named in this NPRM. The Department is identifying particular 
companies and products to enable it to provide an understandable and 
comprehensive discussion of the issues, products, and available 
technology for captioning and audio description of movies.
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    Unlike open captions that are burned onto the film itself, Rear 
Window[supreg] captions (and audio description) are generated via a 
technology that is not physically attached to the film and does not 
require that a separate copy of the film be made. The Rear 
Window[supreg] and audio-description systems work through a movie 
theater's digital sound system using Datasat Digital Entertainment's 
media player with captioning subtitling system (formerly DTS Digital 
Cinema).\20\

[[Page 44987]]

The Datasat\TM\ player sends the captions to a light-emitting diode 
(LED) display in the rear of the movie theater. A clear adjustable 
panel mounted on or near an individual viewer's seat reflects the 
captions correctly and superimposes them on that panel so that it 
appears to a Rear Window[supreg] user that the captions are on or near 
the movie image. This technology enables a movie theater that has been 
equipped with a Rear Window[supreg] Captioning system to exhibit any 
movie that is produced with captions at any showing, without displaying 
captions to every moviegoer in the theater. Thus, individuals who are 
deaf or hard of hearing may enjoy movies in a movie theater equipped 
with such a system alongside those who do not require captioning and 
who would not see the captions being displayed. Movie theaters can also 
exhibit movies with open captions for analog movies by using the same 
Datasat\TM\ system, with a second projector to superimpose the 
captioned text directly onto the movie screen.
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    \20\ Digital sound systems operate independently from analog 
projectors, which deliver the visual portion of a movie. To exhibit 
closed captioning and audio description with analog movies, a movie 
theater needs a digital sound system. Many movie theaters that 
exhibit analog movies have these systems. Digital sound systems are 
different from digital cinema, i.e., a movie theater does not need 
digital cinema to use digital sound.
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    Audio description makes movies more accessible to individuals who 
are blind or have low vision by providing narrated information about 
key visual elements of the movie, such as actions, settings, and scene 
changes. The audio description is sent by the Datasat\TM\ media player 
to infra-red or FM listening systems, then on to movie patrons wearing 
headsets.
    According to comments from the WGBH National Center for Accessible 
Media (NCAM), as of mid-2010, MoPix[supreg] systems had been installed 
in more than 400 screens in the United States and Canada.\21\ Once a 
movie theater is equipped with a MoPix[supreg] system, captioning and 
description data are supplied on data disks, which arrive in advance of 
the film's debut. According to NCAM, virtually every major Hollywood 
studio participates in captioning and description of their A-title 
feature analog movies in one form or another, and many of the major 
exhibition chains, as well as many smaller chains, provide captions and 
descriptions regularly in some of their theaters.
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    \21\ The WGBH National Center for Accessible Media is a 
nonprofit that developed MoPix[supreg] systems funded in part by a 
grant from the U.S. Department of Education.
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    The Department understands that while the industry is rapidly 
moving to digital cinema, some theaters, particularly very small 
independent movie theaters, may continue to exhibit analog movies as 
long as such a product remains available. The Department also 
understands that with the transition to digital cinema, a secondary 
market for closed-captioning equipment for analog movies may develop 
because some movie theaters may choose not to retain this equipment, 
thereby making the analog equipment cheaper to acquire.
Question 1a: Availability of Analog Film Prints
    The Department is interested in any recent data available about the 
likelihood that analog film prints will be available after 2015 either 
from the major studios, from smaller independent studios, or from small 
independent filmmakers. What is the likelihood that analog film prints 
will be available in five years? Will analog versions of older movies 
continue to be available for second or third run showings? How many 
movies will continue to be produced in both analog and digital formats?
Question 1b: Availability of Movies With Captions and Audio Description
    What percentage of currently available analog films has been 
produced with captions or audio description? How many movies will be 
produced with captions and audio description in both analog and digital 
formats? What is the likelihood that existing analog movies that 
currently do not have captions or audio description will be converted 
to digital formats and then only the digital format would have those 
accessibility features? Will those older analog movies that are 
currently available with captions continue to be available with 
captions?
Question 1c: Economic Viability of Analog Theaters
    How many analog theatres currently show first-run movies? If first-
run analog movies are no longer produced, will analog theaters be 
economically viable and what types of movies would these theaters rely 
on to generate revenue? How many analog theaters are likely to close as 
the result of these changes in the market? Will this rule affect the 
pace by which analog theaters convert to digital cinema? If so, how? 
Will analog theatres converting to digital cinema convert all screens 
at the same time?
2. Captioning and Description for Digital Cinema
    Since publication of the 2008 NPRM, a significant change has 
occurred in the industry, both in terms of the technology available for 
digital cinema and the speed at which movie theaters are converting to 
digital cinema. With the move to convert to digital cinema systems, the 
technology and equipment available for these systems has expanded 
accordingly. Digital cinema, which began to be developed in 2000, 
consists primarily of a digital server and a digital projector. The 
content of the digital movie can be distributed digitally, often using 
a hard drive, optical disks, or satellite.\22\ See, e.g., Michael 
Karagosian, Accessibility in the Cinema (June 3, 2010), available at 
http://www.mkpe.com/publications/d-cinema/presentations/2010-June_CHHA_Karagosian.pdf (last visited July 14, 2014). Unlike analog 
movies, digital cinema does not need splicing after delivery to the 
movie theater, thereby eliminating the risk of nicks to the film, and 
does not degrade over time or with repeated use. It also is 
``unlocked,'' which means there are no technology-based royalties to be 
paid for distributing the content. Id. According to comments from NCAM, 
captions and audio description are included in the digital cinema 
package (DCP). The DCP contains the entire movie in electronic form 
(images, soundtrack, anti-piracy data, and if provided by the studios, 
captioning and description). When ordering a DCP, movie theaters have 
the option to request either an open-captioned or a closed-captioned 
version of the movie. If an open-captioned version is requested, no 
other equipment (such as an interface or personal user devices) is 
necessary in order to display a movie with the captions exhibited.
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    \22\ Because digital movies can be provided to movie theaters 
easily and inexpensively compared to the costs inherent in mailing 
several large reels of film per analog movie, the cost to distribute 
digital movies is significantly less for movie studios.
---------------------------------------------------------------------------

    As digital cinema technology has advanced, the options and methods 
available for exhibiting movies with captioning and audio description 
have also expanded. Members of the industry, manufacturers, and other 
interested parties worked together to ensure interoperability of 
digital cinema components through standards adopted by the Society of 
Motion Picture and Television Engineers (SMPTE), so that products that 
provide captioning and audio description would be compatible with the 
various digital cinema systems available for purchase and use by movie 
theaters.\23\ For this and other reasons, in

[[Page 44988]]

digital cinema systems it is much easier and far less costly to exhibit 
movies with captioning and audio description. For example, unlike 
analog movies, digital cinema has many sound channels, making it much 
easier to include audio description. See Michael Karagosian, 
Accessibility in the Cinema (June 3, 2010), available at http://www.mkpe.com/publications/d-cinema/presentations/2010-June_CHHA_Karagosian.pdf (last visited July 14, 2014). In addition, digital 
cinema can easily support closed captions, including up to six closed-
captioned languages at a time. Id. And for closed captions, a 
standardized output is available that permits the closed captioned 
product to plug in to any compliant digital system. Id.
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    \23\ ``Closed caption technology for digital cinema has rapidly 
moved forward with the successful standardization of SMPTE 430-10 
and 430-11 for the SMPTE CSP/RPL closed caption protocol, an 
Ethernet-based protocol designed for connecting closed caption 
systems with digital cinema servers. The SMPTE CSP/RPL communication 
protocol is license-free. The wide-spread use of this protocol has 
allowed multiple closed caption systems to proliferate.'' Michael 
Karagosian, Update on Digital Cinema Support for Those With 
Disabilities: April 2013, available at http://www.mkpe.com/publications/d-cinema/misc/disabilities_update.php (last visited 
July 14, 2014).
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    In terms of equipment needed, it is easier to exhibit movies in 
digital cinema using open captions because all that is required is that 
the captions be turned on. No additional equipment (e.g., individual 
captioning devices) is needed to display open captioned movies. Open 
captions, like closed captions, are included in the DCP and the movie 
theater simply requests a DCP with either open or closed captions.
    Based upon the Department's research, conversations with 
manufacturers, and comments received by the Department, several options 
appear to be available for delivering closed captions in digital films 
to the movie patron. For example, two manufacturers produce and sell 
wireless closed-captioned displays that are mounted on a device that 
the movie patron places in the seat's cup holder. See Michael 
Karagosian, Update on Digital Cinema Support for Those With 
Disabilities: April 2013, available at http://www.mkpe.com/publications/d-cinema/misc/disabilities_update.php (last visited July 
14, 2014). One system uses a single infra-red transmitter for delivery 
of both closed captions and audio description. Id. A second system uses 
Wi-Fi technology to transmit closed captions directly from the server 
to a cup holder display unit. This system does not appear at this time 
to support audio description. However, according to its manufacturer, 
audio description can be provided through a third-party vendor system. 
The Department understands that cup holder displays are already in use 
in theaters in Canada as well as some theaters in the United States. 
Eyeglasses that display the text in front of the wearer's eye while 
watching a movie are also on the market. As of September 2012, Regal 
Cinema theaters had captioning glasses in use in 200 theaters and 
announced that it plans to use them in all of its theaters by April 
2013. Other companies are also reported to be developing eyeglasses 
that can display captions. In addition, the Department understands that 
MoPix's[supreg] Rear Window closed-captioned devices work in digital 
cinema as well as analog. Movie theaters that have installed a 
captioning system for their analog product can still use that product 
with digital cinema. MoPix[supreg]'s devices are supported by several 
digital cinema servers directly, although other servers may need to 
obtain a special interface.\24\
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    \24\ As with all closed-captioning systems available with 
today's technology, MoPix[supreg] also requires use of an individual 
captioning device by the patron seated in the theater auditorium.
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    In specialty movie theaters, such as IMAX or other big-screen 
format presentations, closed-captioning systems for digital cinema also 
work well, and the captioned data can be fed to the LED panel by a 
computer that is running special software that synchronizes the caption 
files to the film.
    It is unclear from the comments received by the Department the 
extent to which 3D movies are currently being provided by studios or 
distributors with open or closed captioning. Commenters representing 
both movie theaters and movie studios stated that MPAA member companies 
are hopeful that technological developments will soon allow closed 
captioning for 3D version releases. A commenter involved in the 
development of the Rear Window[supreg] captioning system for analog 
movies stated that it has been tested in feature-length 3D 
presentations with positive viewer response. The Department's research 
indicates that both the captioning eyeglasses as well as the cup holder 
displays can show captions for 3D movies if the movies are provided 
with captioning. By contrast, the Department understands that the same 
technology provides audio description for both 2D and 3D movies. One 
commenter representing the movie theater industry stated that whenever 
audio description is available for digital 3D movies, it should be 
treated the same as audio description for film and video displays in 
other settings.
    As with analog movies, the audio description in digital cinema is 
delivered using a wireless headset or ear phones. Digital cinema audio 
supports up to 16 channels of audio \25\ and the cinema audio formats 
have two channels reserved for both hearing impaired audio and audio 
description. See Michael Karagosian, Accessibility in the Cinema (June 
3, 2010), available at http://www.mkpe.com/publications/d-cinema/presentations/2010-June_CHHA_Karagosian.pdf (last visited July 14, 
2014). Moreover, both the infra-red and FM-audio single-channel systems 
presently used for assisted listening can be replaced by multi-channel 
systems that support both assisted listening and audio description.
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    \25\ Analog movies support between two and eight channels, 
depending upon the audio sound format being used by the movie 
theater. See Michael Karagosian, Accessibility in the Cinema, (June 
3, 2010), available at http://www.mkpe.com/publications/d-cinema/presentations/2010-June_CHHA_Karagosian.pdf (last visited July 14, 
2014).
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3. Conversion to Digital Cinema
    Despite the economic downturn over the last few years, the movie 
theater industry is rapidly increasing the number of screens that have 
converted to digital cinema since publication of the 2008 NPRM. In May 
2013, an industry representative testified to Congress that as of that 
date, 88 percent of indoor movie screens in the United States had 
converted to digital cinema. See Testimony of John Fithian, President 
and CEO of the National Association of Theater Owners, Before the U.S. 
Senate Committee on Health, Education, Labor and Pension (May 14, 
2013), available at http://natoonline.org/wp-content/uploads/2013/08/Harkin-Hearing-Testimony-May-2013.pdf (last visited July 14, 2014).
    Starting in the late 2000's, a number of major movie studios 
entered into agreements to help defray the cost of conversion by paying 
a consortium of movie theater chains a ``virtual print fee'' of $800 to 
$1000 per film, per screen until the digital equipment is paid off. See 
Dawn C. Chmielewski, Major Studios Agree to Back Switch to Digital 
Projection, Los Angeles Times (Oct. 2, 2008), available at http://articles.latimes.com/2008/oct/02/business/fi-studios2 (last visited 
July 14, 2014). The Department understands that nearly all of these 
programs have stopped enrolling new members, although the deals 
continue to be active for those who have already signed up. According 
to an industry commenter, these digital cinema systems are SMPTE-
compliant, which means that all of the captioning and audio-description 
products on the market--and in development--will be compatible with, 
and easily integrated into, whatever

[[Page 44989]]

digital cinema systems are in use by the various movie theaters. In 
addition, it has recently been reported that between the conversion to 
digital and the projected loss of the two major suppliers of film print 
stock, it is unlikely that any first run films will be available in 
analog within the next few years, thus furthering the pressure on 
smaller theaters to convert to digital. See e.g., Gendy Alimurung, 
Movie Studios Are Forcing Hollywood to Abandon 35mm Film. But the 
Consequences of Going Digital Are Vast, and Troubling, LA Weekly (Apr. 
12, 2012), available at http://www.laweekly.com/2012-04-12/film-tv/35-mm-film-digital-Hollywood (last visited July 14, 2014); Dawn McCarty & 
Beth Jinks, Kodak Files for Bankruptcy as Digital Era Spells End to 
Film, Bloomberg (Jan. 19, 2012), available at http://www.bloomberg.com/news/print/2012-01-19/kodak-photography-pioneer-files-for-bankruptcy-protection-1-.html (last visited July 14, 2014); see also Tim O'Reiley, 
Theater Official Optimistic Despite Attendance Slump, Las Vegas Review-
Journal (March 29, 2011) (quoting new MPAA head, former Sen. 
Christopher Dodd, as predicting that ``films on film will disappear in 
less than three years''), available at http://www.reviewjournal.com/business/theater-official-optimistic-despite-attendance-slump (last 
visited July 14, 2014).
4. Availability of Movies With Captioning and Audio Description
    As stated previously, movie theaters do not provide the captioning 
and audio description for the movies they exhibit. Movie studios and 
distributors determine whether to caption and audio describe, what to 
caption and audio describe, the type of captioning to use, and the 
content of the captions and audio-description script. In addition, 
movie studios and distributors assume the costs of captioning and 
describing movies. Movie studios and distributors would not be required 
by this proposed regulation to include captioning or audio description 
in their product, because the mere production and distribution of 
movies does not make them public accommodations under the ADA. That 
said, movie studios appear committed to making their movies accessible 
to individuals who are deaf or hard of hearing or blind or have low 
vision, and the Department commends their efforts. According to the 
MPAA, analog movies produced with captioning by member studios in 2010 
included virtually all wide-releases.\26\ Seventy-six percent of analog 
movies produced by MPAA member studios were produced with audio 
description. According to another industry commenter, MPAA member 
studios distributed 140 films in 2010, captioning 86 percent of their 
film product. The MPAA, in its comments to the 2010 ANPRM, stated that 
by the latter part of 2010, the major studios were making captioning 
and audio description available on some digital movies and had 
announced that in 2011 almost all theatrical releases in digital format 
will include closed captioning.\27\ In addition, the MPAA stated in its 
comments that its members intend to significantly increase the number 
of digital releases with audio description in 2011. No data are 
publicly available on the number of movies released with captioning and 
audio description since 2011, but given the current trend, the 
Department projects that the numbers increased in 2012. One movie 
theater industry commenter pointed out that while MPAA member studios 
distributed 140 movies in 2010, the independent studios released 473 
films, a majority of which were not captioned or audio described. The 
number of independent films released can be somewhat deceptive in this 
context, however, because MPAA member studios distribute 82 percent of 
the film product in the United States. The larger independent studios, 
which include Dreamworks, Lionsgate, Summit, The Weinstein Company, and 
MGM, distribute an additional 14 percent of the domestic product, and 
the other independent studios distribute the remaining 4 percent of the 
product domestically. It is unclear how many movies that are captioned 
and audio described are currently distributed by the independent 
studios.\28\ It is also unclear whether, and what percentage of, movies 
will be made in digital format for digital cinema by these same 
independent studios in the future, and what percentage will be 
captioned and audio described. However, if independent producers 
distribute their product to television, albeit in analog or digital 
format, captions must be included under current FCC rules. See 47 CFR 
79.1.
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    \26\ Wide-releases include all films except for those with 
limited release, documentaries, and similar titles.
    \27\ This commitment was possible because the interested parties 
reached agreement upon, and published standards for, SMPTE digital 
cinema packages.
    \28\ Representatives from the Independent Film & Television 
Alliance and from independent studios did not submit comments in 
response to the 2010 ANPRM.
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    Despite the array of captioned and described product that is 
available, there are still a significant number of movie theaters that 
are not equipped to show movies with closed movie captions and audio 
description or that only show them at selected showings of particular 
movies. According to NATO, as of May 2013, at least 53 percent of 
digital movie screens had the capacity to show movies with closed movie 
captions or audio description. See Testimony of John Fithian, President 
and CEO of the National Association of Theater Owners, Before the U.S. 
Senate Committee on Health, Education, Labor and Pension (May 14, 
2013), available at http://natoonline.org/wp-content/uploads/2013/08/Harkin-Hearing-Testimony-May-2013.pdf (last visited July 14, 2014). 
Three of the four largest movie theater chains have publicly committed 
to installing closed captioning and audio description equipment in all 
of their theaters that have been converted to digital. See Press 
Release, Regal Entertainment Group, Regal Entertainment Group Announces 
New Forms of Digital Cinema Access (May 4, 2011), available at http://investor.regmovies.com/phoenix.zhtml?c=222211&p=irol-newsArticle&ID=1559531&highlight (last visited July 14, 2014); Press 
Release, Cinemark Holdings, Inc., Cinemark and ALDA Announce Greater 
Movie Theatre Accessibility for Customers who are Deaf or Hard-of-
Hearing (April 26, 2011), available at http://www.cinemark.com/pressreleasedetail.aspx?node_id=22850 (last visited July 14, 2014); 
Press Release, Disability Rights Advocates, AMC Theatres and ALDA 
Announce Greater Accessibility for Deaf or Hard-of-Hearing Guests at 
All Digital Movie Theatres in California, (Dec. 20, 2011), available at 
http://www.dralegal.org/pressroom/press-releases/amc-theatres-and-ALDA-announce-greater-accessibility-for-deaf-or-hard-of (last visited July 
14, 2014).

IV. Section-by-Section Analysis

Section 36.303(g) Movie Captioning and Audio Description--Definitions

    Movie Theater. In order to make it clear which facilities are 
subject to the specific captioning and audio-description requirements 
set forth in Sec.  36.303(g), the Department is proposing in Sec.  
36.303(g)(1)(v), to define the term ``movie theater'' as ``a facility 
other than a drive-in theater that is used primarily for the purpose of 
showing movies to the public for a fee.'' Movie theaters

[[Page 44990]]

include all movie theaters that exhibit movies for a fee, except drive-
in movie theaters. The term includes movie theaters that exhibit 
second- and third-run movies as well first-run releases. The term is 
not a synonym for movie screen. A movie theater can have one or more 
screens available to show movies in several auditoriums. The term 
``movie theater'' does not include facilities that screen movies, such 
as museums, hotels and resorts, or cruise ships, even if they charge an 
additional fee, if the facility is not used primarily for the purpose 
of showing movies for a fee.
    Paragraph 36.303(g) is a specific application of the auxiliary aid 
and service requirement for movie theaters. Such a provision is 
necessary because of the technological advances in auxiliary aids and 
services that enable movie theaters to screen movies in a manner that 
provides effective communication to individuals who are deaf or hard of 
hearing or blind or have low vision. The Department's title III 
regulation makes clear that public accommodations that exhibit movies 
but are not movie theaters, such as museums and amusement parks, must 
provide effective communication to the public through the provision of 
auxiliary aids and services, including, where appropriate, captioning 
and audio description. See generally 28 CFR 36.303; 28 CFR part 36, 
app. B. Many such public accommodations have been providing appropriate 
auxiliary aids, either through open captions, closed captions, or a mix 
of the two, and audio description. Even in situations in which the 
Department identified a need for enforcement action, these public 
accommodations were willing to comply with the ADA and provide such 
auxiliary aids and services. See, e.g., Press Release, U.S. Department 
of Justice, Settlement Agreement Will Ensure Accessibility at the 
International Spy Museum in Washington, DC (June 3, 2006), available at 
http://www.justice.gov/opa/pr/2008/June/08-crt-489.html (last visited 
July 14, 2014); Press Release, U.S. Department of Justice, Walt Disney 
World Co. Agrees to Provide Services to Deaf and Hard-of-Hearing Guests 
(Jan. 17, 1997), available at http://www.justice.gov/opa/pr/1997/January97/021cr.htm (last visited July 14, 2014).
    Commenters on the 2010 ANPRM advised the Department that the 
technology does not yet exist to exhibit movies with closed captions or 
audio description at drive-in movie theaters that have an outdoor 
patron field that is typically spread across more than eight acres. In 
addition, these comments indicated that given that there are fewer than 
400 drive-in theaters in the United States, it is unlikely that such 
technology will be developed in the near future. Thus, the Department 
is proposing to exclude drive-in movie theaters from the definition of 
movie theater in this rule and defer rulemaking regarding drive-in 
theaters until such time that the necessary technology for closed 
captions and audio description for drive-in theaters becomes 
commercially available.
    Question 2: Does the proposed definition of ``movie theater'' 
adequately describe the movie theaters that should be covered by this 
regulation? Are there any non-profit movie theaters that would be 
covered by this definition? How many non-profit movie theaters are 
there? Should drive-in movie theaters be excluded from the definition 
of movie theaters at this time? Is there technology under development 
that might make it possible for drive-in movie theaters to provide 
closed captions or audio description in the future?
    Audio description. For the purposes of this subsection, the 
Department is proposing to add a definition for ``audio description.'' 
In proposed Sec.  36.303(g)(1)(i), ``audio description'' is defined as 
the ``provision of a spoken narration of key visual elements of a 
visually delivered medium, including, but not limited to, actions, 
settings, facial expressions, costumes, and scene changes.''
    In the Department's July 26, 2010, ANPRM, the Department used the 
term ``video description'' to define the process and experience whereby 
individuals who are blind or have low vision are provided with a spoken 
narrative of key visual elements of a movie, such as actions, settings, 
facial expressions, costumes, and scene changes. The Department 
received several comments addressing whether it should continue to use 
the term ``video description'' or other terms, including ``audio 
description.'' The majority of commenters addressing this issue 
supported the use of the term ``audio description,'' stating that audio 
description has been used since 1981 as the term of art to describe 
using language to provide access to visual images, and pointing out 
that the National Endowment for the Arts and the Graphic Artists Guild 
both use the logo ``AD'' to indicate the availability of audio 
description. In addition, audio description more appropriately 
describes the type of auxiliary aid involved, because the process 
involves providing information that is experienced aurally. In response 
to these comments, the Department has been persuaded to change the 
nomenclature for this process to ``audio description.''
    Question 3: Should ``audio description'' be the nomenclature 
adopted in the final rule?
    Closed movie captioning. The Department notes that the term 
``closed captioning'' is referenced in the examples of auxiliary aids 
and services in Sec.  36.303(b). That section refers to ``closed 
captioning'' in the much broader context of auxiliary aids and services 
that must be provided by a wide range of public accommodations subject 
to title III. In order to distinguish between the general auxiliary aid 
and service requirement and the ``closed captioning'' that is required 
by Sec.  36.303(g)(2), the Department is proposing to define the term 
``closed movie captioning'' specifically as it applies to movie 
theaters. In Sec.  36.303(g)(1)(ii), the Department proposes to define 
``closed movie captioning'' as ``the written text of the movie dialogue 
and other sounds or sound making (e.g., sound effects, music, and the 
character who is speaking). Closed movie captioning is available only 
to individuals who request it. Generally, it requires the use of an 
individual captioning device to deliver the captions to the patron.''
    The Department received one comment encouraging it to use the term 
``individual captioning'' instead of ``closed captioning'' to refer to 
the circumstances where captions are received through the use of 
individual devices. This commenter distinguished between three types of 
captioning: Open captioning, where the captions are displayed on the 
screen and cannot be turned off; closed captioning as the term is used 
in the context of television and video where the captions can be turned 
on or off, but when they are displayed everyone in the room sees them; 
and individual captioning systems, where only the individual viewer 
sees the captions, but they are not displayed to the entire audience. 
As stated earlier, the Department wishes to avoid confusion between the 
``closed captioning'' provided on television and in other venues, and 
those provided in movie theaters. However, it believes its proposed 
term ``closed movie captioning'' will address that concern without 
introducing a term that is wholly different from that currently used by 
the movie industry and the courts.
    Question 4: Should the Department use the term ``closed movie 
captioning'' to refer to the type of captioning provided by movie 
theaters to individuals who view the captions at

[[Page 44991]]

their seats? Is there a different term that should be used in order to 
distinguish between the closed captioning referred to in Sec.  
36.303(b) and the captioning required for movie theaters in proposed 
Sec.  36.303(g)(2)?
    Individual audio description listening device. In Sec.  
36.303(g)(1)(iii), the Department is proposing to define ``individual 
audio description listening device'' as the individual device that 
patrons may use at their seats to hear audio description.
    Individual captioning device. In Sec.  36.303(g)(1)(iv), the 
Department is proposing to define ``individual captioning device'' as 
``the individual device that patrons may use at their seats to view the 
closed captions.''
    Open movie captioning. The Department notes that the term ``open 
captioning'' is already referenced in the examples of auxiliary aids 
and services provided in Sec.  36.303(b). That section refers to ``open 
movie captioning'' in the much broader context of auxiliary aids and 
services that must be provided by the wide range of public 
accommodations subject to title III. In order to distinguish between 
the general auxiliary aid requirement and the ``open captioning'' that 
is referenced in Sec.  36.303(g)(2)(ii), the Department is proposing to 
define the term ``open movie captioning'' specifically as it applies to 
movie theaters. In Sec.  36.303(g)(1)(vi), the Department proposes to 
define ``open movie captioning'' as ``the provision of the written text 
of the movie dialogue and other sounds or sound making in an on-screen 
text format that is seen by everyone in the theater.''
    Question 5: Should the Department use the term ``open movie 
captioning'' to refer to the type of captioning that is viewed on or 
near the movie screen by everyone in the movie theater audience? Is 
there a different term that should be used?
Movie Captioning Coverage
    The Department asked nine questions in its 2010 ANPRM on the scope 
of coverage and how best to frame any regulation requiring exhibiting 
movies with closed captions and audio description. In that ANPRM, the 
Department stated it was considering proposing a regulation that would 
require that 50 percent of movie screens exhibit movies with captioning 
and audio description and that any such requirement would be phased in 
over a five-year period. However, after review and analysis of the 
statutory structure of the ADA, its regulatory requirements and 
legislative history, and the technological advances since enactment of 
the ADA, the Department is convinced that any regulation regarding 
captioning and audio description should be written broadly, like the 
ADA itself.
    In the NPRM, Sec.  36.303(g)(2)(i), the Department proposes to 
require that ``[a] public accommodation that owns, leases, leases to, 
or operates a movie theater shall ensure that its auditoriums have the 
capability to exhibit movies with closed movie captions. In all cases 
where the movies it intends to exhibit are produced, distributed, or 
otherwise made available with closed movie captions, the public 
accommodation shall ensure that it acquires the captioned version of 
that movie. Movie theaters must then exhibit such movies with closed 
movie captions available at all scheduled screenings of those movies.'' 
As discussed below, the Department is proposing to apply this 
requirement to all digital movie screens in movie theaters and is 
seeking public comment as to the best approach (i.e., delayed 
compliance date or deferral) to take with respect to analog movie 
screens.\29\
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    \29\ Some commenters to the 2010 ANPRM recommended that the 
Department delay proposing any new rule for at least 24 months as 
the digital transition continues to progress and new technologies 
become more widespread. It is already more than 3 years since the 
ANPRM was published, and the Department declines to delay this 
rulemaking any further.
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    The Department is proposing that all movies available with 
captioning be exhibited with captioning at all times unless doing so 
would be an undue burden.\30\ The primary goals of the ADA are to 
assure equality of opportunity and full access and participation in our 
society for individuals with disabilities. 42 U.S.C. 12101. To that 
end, and as stated previously, the ADA prohibits public accommodations 
such as movie theaters from affording individuals with disabilities an 
unequal or lesser service than that offered to other individuals. 42 
U.S.C. 12182(b)(1)(A)(ii). The ADA requires public accommodations ``to 
take such steps as may be necessary to ensure that no individual with a 
disability is excluded, denied services, segregated, or otherwise 
treated differently * * * because of the absence of auxiliary aids and 
services,'' unless the public accommodation can demonstrate that taking 
such steps would result in a fundamental alteration or undue burden. 42 
U.S.C. 12182(b)(2)(A)(iii).
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    \30\ A requirement that all movies available with closed 
captioning be exhibited with closed captioning at all times 
eliminates other problems inherent in any partial requirement (be it 
50 percent of screens in a facility, 50 percent of screens owned by 
a particular movie theater, number of movies being screened in a 
particular theater facility, etc.) because of issues involving 
availability of products with captioning and audio description and 
how movie theaters use auditoriums. Movie theaters negotiate with 
film distributors regarding which auditoriums in a multiplex theater 
will show which films. Generally, if a film is expected to be very 
popular, it will open in the largest auditorium or in several 
auditoriums within the same complex. As the popularity decreases, 
the film will be moved from larger auditoriums to smaller 
auditoriums and from multiple auditoriums to single auditoriums. The 
timing of such moves will vary from theater to theater and from film 
to film. Movies also can be rotated between screens throughout the 
day and evening. The Department's proposal to require 100 percent of 
screens to meet the requirement ensures that if movies are available 
with closed captioning, they will be exhibited with closed 
captioning, thereby maximizing options and choices for patrons with 
disabilities for all movies, at all times, throughout the country, 
and eliminates the confusion and lack of access that a partial 
requirement would create.
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    The ADA envisions that effective communication through the 
provision of appropriate auxiliary aids and services be provided for 
all of a public accommodation's services and that individuals who are 
deaf, hard of hearing, blind, or have low vision have access to all of 
a public accommodation's services, absent a legitimate defense. As 
such, it is not enough to offer captioned movies (or movies with audio 
description) for limited movies at limited times, absent a legitimate 
defense. Rather, such individuals should be able, along with the rest 
of the population, to attend a movie at any date and time. Based on the 
information it currently has, the Department does not believe it would 
be appropriate to propose an across-the-board phase-in of this 
requirement over five years. Information available to the Department 
since the publication of the ANPRM makes it clear that the pace of 
conversion to digital cinema has accelerated rapidly and there are a 
number of different options available for providing closed movie 
captions and audio description. Therefore, at this time, the Department 
does not believe that it is necessary to delay the implementation of 
the final rule for digital movie screens.
    The Department's proposed provision would impose a three-fold 
requirement upon movie theaters. First, as of the compliance date of 
this rule, movie theaters must have the capacity to exhibit movies with 
captions. Second, if a movie is available with captions because it has 
been produced, distributed, or otherwise made available with 
captioning, then movie theaters are required to obtain that particular 
movie in a version with captions, and not in a version without 
captions. Third, those movie theaters are required to display that 
movie with the captions to patrons upon request.

[[Page 44992]]

    The first proposed requirement mandates that movie theaters acquire 
whatever equipment they need to have the capability to exhibit movies 
with closed captions. The second proposed requirement mandates that 
movie theaters select the captioned version of a movie if captions are 
available for that particular movie. It does not limit the selection or 
mix of movies that a movie theater may choose. In other words, if a 
particular movie is not available with captioning (because it has not 
been produced, distributed, or otherwise made available to the movie 
theater with captions), then the movie theater is in no way limited or 
prohibited from acquiring or exhibiting that particular movie. In 
addition, if a movie is available in both analog and digital formats, 
but only available with captions in the digital format, then a theater 
with both digital and analog screens is not required to obtain the 
captioned digital version if it had intended to show that particular 
movie on its analog screens. In addition, this proposed rule does not 
require theaters to add captions to movies that are only available from 
studios/distributors without captions. Finally, the third proposed 
requirement only relates to the exhibition of movies obtained with 
captioning available. The Department understands that decisions about 
which movies to release with captions or audio description and whether 
open or closed captions or audio description are provided for a 
particular movie are decisions made by movie studios and distributors, 
not movie theaters. The Department notes that obtaining a captioned 
version of a movie does not require a theater to search for accessible 
versions of movies because it is the Department's understanding that 
each movie (either with or without captions) is only available through 
a single distributor. We have no information that suggests that, in the 
future, particular movies will be available through multiple 
distributors and that some distributors may have versions with closed 
captioning and audio description features and others may not.
    Even if that particular movie may be the only movie that a movie 
theater chooses to exhibit at that time throughout all its auditoriums, 
there is no obligation under this proposed regulation to exhibit the 
movie with captioning or audio description if it is not made available 
with these features. If a movie is available with captioning but not 
with audio description, than the movie must be exhibited with the 
captions whenever a request for the captions is made, but the 
requirement for audio description would not apply to the showing of 
that movie. This proposed rule would ensure that movie theaters have 
the capability to exhibit movies that are produced or distributed with 
captioning and audio description available and that they exhibit such 
movies with captioning and audio description whenever a request is made 
for these auxiliary aids.
    Comments from NATO on the ANPRM suggested that if the Department 
issues a regulation requiring captioning then it should not phase-in 
compliance over five years, but instead should give large, digital 
theaters five years until they have to comply. NATO also recommended 
that the Department reduce the required number of screens that need to 
be accessible to 25 percent and only apply that requirement to movie 
theaters undergoing digital conversion. NATO also objected to a 
captioning and audio-description requirement for movie theaters that do 
not convert to digital, citing uncertainty as to whether many first-run 
analog movies will be produced in the future, or whether any of them 
will be distributed with captions and audio description.
    As stated earlier, the Department does not believe it appropriate 
to propose that captioning or audio description be available in less 
than 100 percent of the movie theaters that exhibit movies that are 
produced, distributed, or otherwise made available with captioning or 
audio description. Moreover, there are two reasons that Department does 
not believe a phased-in compliance schedule is appropriate. First, as 
discussed in the section on the legal basis for the rule, and as 
recognized by the Ninth Circuit in the Harkins case, movie theaters 
already have an obligation to provide effective communication to 
persons with disabilities 100 percent of the time. Second, as the 
industry acknowledged in its comments on the 2010 ANPRM, a rolling 
compliance period is difficult to implement given the way the market 
works--i.e., it is not easy to purchase and install equipment on a set 
rolling schedule. In addition, as discussed earlier, the Department 
understands that at least 53 percent of movie screens already have the 
necessary equipment to show captions and provide audio description and 
three of the four largest movie theater companies have already 
committed to make captioning and audio description available at 100 
percent of their theaters, as have several smaller movie theater 
companies.
    The Department is proposing that the rule take effect for movie 
screens that have already converted to digital six months from the 
publication date of the final rule in the Federal Register. The 
Department believes six months is sufficient time for theaters that 
have already converted to digital to order and install the necessary 
equipment to provide captions and audio description, train employees on 
how to use the equipment and assist patrons in using it and develop and 
implement processes to ensure that all communications and 
advertisements intended to inform potential patrons of movie showings 
provide information regarding the availability of captioning and audio 
description for each movie.
    The rule does not propose a compliance date for analog movie 
screens. As discussed below, because of the uncertainty about the 
future of analog theaters, and the future availability of analog film, 
the Department is seeking public comment on whether it should adopt a 
four-year delayed compliance date for analog movie screens, or whether 
it should defer coverage of analog screens and consider additional 
rulemaking at a later date.
    The six-month compliance date applies to digital screens in all 
movie theaters, including a theater that has both analog and digital 
screens. For example, if a movie theater has 20 screens and 18 of them 
are digital and two are analog, the 18 digital screens are all subject 
to the six-month compliance date. In addition, the NPRM proposes that 
if an analog screen is converted to digital after the rule's six-month 
compliance date for digital screens, the newly converted digital screen 
will then be subject to the rule's requirements within six months from 
the date the screen is converted to digital.
    In addition, from the law's inception in 1990, the statutory 
language of the ADA has provided flexibility based on cost in specific 
circumstances. All movie theaters, regardless of size, status of 
conversion to digital cinema, or economic viability, have available to 
them the same defense as do all other public accommodations--the 
individualized and fact-specific undue burden defense. The undue burden 
defense tailors the analysis to factor in the needs and resources of 
small businesses and the economic viability of those businesses. 
Throughout the last two decades movie theaters have been able to assert 
this defense when facing litigation alleging a failure to provide 
effective communication to patrons with disabilities. This regulation 
does not change the availability of this defense or the circumstances 
under which it can be asserted. It does, however, provide clarity about 
how movie theaters can

[[Page 44993]]

meet their longstanding effective communication obligations under the 
ADA.
    The Department notes that even if a movie theater cannot install 
the equipment in all of its auditoriums due to an undue financial 
burden, the movie theater is still obligated to take steps to maximize 
the movie choices for customers who are deaf or hard of hearing or 
blind or have low vision. Maximizing the movie choices means that movie 
theaters should, to the extent possible based on the movie theaters' 
resources, be able to exhibit as many movies as possible with 
captioning and audio description in their auditoriums, throughout the 
day and evening, and on both weekdays and weekends. If, for example, a 
six-screen movie theater can only afford to install captioning 
equipment in half of its auditoriums, and it has auditoriums with 
different capacity, it should install captioning equipment in large, 
medium, and small auditoriums. This distribution of equipment would 
permit exhibition of different types of movies, as blockbusters 
generally are shown in larger auditoriums first and smaller budget 
movies or older movies may be shown only in medium or small 
auditoriums.\31\
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    \31\ Existing [ballot] 36.303(g) states that ``[i]f provision of 
a particular auxiliary aid or service by a public accommodation 
would result * * * in an undue burden * * * the public accommodation 
shall provide an alternative auxiliary aid or service, if one 
exists, that would not result in * * * such a burden but would 
nevertheless ensure that, to the maximum extent possible, 
individuals with disabilities receive the goods, services, 
facilities, privileges, advantages, or accommodations offered by the 
public accommodation.''
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    Question 6: Consistent with President Obama's Memorandum issued on 
January 18, 2011, on regulatory flexibility, small business, and job 
creation, the Department invites comment on ways to tailor this 
regulation to reduce unnecessary regulatory burdens on small 
businesses.\32\ For example: Should the Department have a different 
compliance schedule or different requirements for digital or analog 
theaters that have annual receipts below a certain threshold? If so, 
what should the schedule, requirements, or financial threshold be? Or, 
should the final rule have a different compliance schedule or 
requirements for single-screen or miniplex analog or digital theaters? 
Will all mega and multiplex theaters have converted to digital by the 
time the final rule goes into effect? Is a four-year compliance date 
reasonable for those screens that will remain analog? Please provide 
information to support your answer. Should the Department adopt a 
different compliance schedule or different requirements for nonprofit 
movie theaters? The Department invites comment on these alternatives 
and any other ways in which the final rule could be tailored to 
appropriately minimize costs on small theaters.
---------------------------------------------------------------------------

    \32\ Memorandum for the Heads of Executive Departments and 
Agencies, Regulatory Flexibility, Small Business, and Job Creation, 
76 FR 3827 (Jan. 18, 2011).
---------------------------------------------------------------------------

    Question 7: Is the proposed six-month compliance date for digital 
screens a reasonable timeframe to comply with the rule? Is six months 
enough time to order, install, and gain familiarity using the necessary 
equipment; train staff so that they can meaningfully assist patrons; 
and meet the notice requirement of the proposed rule? Will 
manufacturers have the capacity to provide the necessary equipment for 
captioning and audio description as of the six-month proposed 
compliance date of this rule for digital movie screens? If the proposed 
six-month date is not reasonable, what should the compliance date be 
and why? Please provide specific examples, data, or explanation in 
support of your responses.
Analog Movie Screens
    Based on information currently available, it appears likely that 
few, if any, analog movies will continue to be made by the major movie 
studios and possibly by the independent studios as well. See previous 
discussion. It is unclear to the Department, however, whether those 
analog movies that continue to be made will be produced with captions 
and audio description. Thus, it could be that even if analog theaters 
were to have the capability of showing movies with captions and audio 
description, there may not be any movies for them to show with those 
accessibility features. It is also unclear how many, if any, analog 
theaters will continue to be viable within the next few years. The 
Department has asked for public comment on the future of analog 
theaters, analog movie production in general, and analog movies with 
accessible features. Based on the information available to the 
Department at the time it drafts the final rule, the Department will 
decide whether it is appropriate to just delay compliance for analog 
screens in movie theater auditoriums in order to allow sufficient time 
to comply with the specific requirements of the rule or defer applying 
these specific requirements altogether until such time that the 
Department, in light of available information, deems it appropriate to 
engage in further rulemaking on this subject. The Department is 
interested in public comment on whether there is a reasonable basis for 
deferring the application of this rule to movie theater auditoriums 
with analog screens or whether it should include an extended compliance 
date.
    Question 8: Should the Department adopt a four-year compliance date 
for analog movie screens (Option 1) or should it defer application of 
the rule's requirements to analog screens for now and consider 
additional rulemaking with respect to analog screens at a later date 
(Option 2)? Commenters are encouraged to provide information to support 
their recommendation. Open Captioning (or Other Technologies) as an 
Option for Compliance

[[Page 44994]]

    In Question 9 of the 2010 ANPRM, the Department asked whether it 
should give movie theaters the discretion to exhibit movies with open 
captions should they so desire, as an alternate method of achieving 
compliance with a captioning regulation. Many of the commenters who 
addressed this issue, including those from the industry, supported this 
option.\33\ The Department decided to include this option in the 
proposed regulation as an example of an alternative means of meeting 
the movie theaters' obligation to provide effective communication to 
patrons who are deaf or hard of hearing but in keeping with the ADA's 
legislative history, we are making it clear that the ADA does not 
require movie theaters to use open captions as a means of providing 
effective communication.\34\ In the NPRM, Sec.  36.303(g)(2)(ii) states 
that ``[m]ovie theaters may meet their obligation to provide captions 
to persons with disabilities through use of a different technology, 
such as open movie captioning, so long as the communication provided is 
as effective as that provided to movie patrons without disabilities. 
Open movie captioning at some or all showings of a movie is never 
required as a means of compliance with this section, even if it is an 
undue burden for a theater to exhibit movies with closed movie 
captioning in an auditorium.'' \35\
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    \33\ A number of commenters advocated for the Department to 
require open captioning exclusively, arguing that it is much more 
effective and cheaper than closed captioning.
    \34\ ``Open captioning * * * of feature films playing in movie 
theaters, is not required by this legislation. Filmmakers are, 
however, encouraged to produce and distribute open-captioned 
versions of films, and theaters are encouraged to have at least some 
pre-announced screenings of a captioned version of feature films.'' 
H.R. Rep. No. 101-485, pt. 2, at 108 (1990); S. Rep. No. 101-116, at 
64 (1989).
    \35\ With open movie captioning, there is no need for additional 
equipment to display the captions and, therefore, there is no 
additional cost to the theaters. For digital cinema, the movie 
theater simply selects the open caption option from its digital menu 
and the open captions appear on the movie screen for that showing 
only. For analog films, the movie theater would order the version 
with open movie captions, if available, and just display the movie 
without need for any additional equipment.
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    The Department is aware, both from comments received from the 
industry and from some individuals, that open captions may reduce the 
amount of enjoyment experienced by people who do not need captioning. 
For those movie theaters that elect to meet these requirements through 
the exhibition of movies with open captioning, in whole or in part, the 
movie theaters may elect to turn on the open captions only after a 
timely request has been made for captions. For this approach to be 
effective, movie theaters should clearly and conspicuously advertise at 
the ticket offices and at the doors to each auditorium the process, 
procedures, and time periods for making captioning requests.
    Question 9: Do the alternative provisions regarding when and how to 
employ open movie captions strike an appropriate balance? Should the 
Department define what a timely request is in this context? Has the 
Department adequately addressed the possibility that new technology may 
develop that can be used to provide effective communication at movie 
theaters?
Individual Captioning Devices
    A commenter from a disability advocacy organization encouraged the 
Department to specify the number of individual captioning devices that 
must be made available at each movie theater, pointing out that groups 
of persons who are deaf or hard of hearing should be able to attend 
movies at the same time and have sufficient individual captioning 
devices available to enable them to enjoy the movie at the time of 
their choice. A commenter from the movie theater industry recommended 
that the Department require only one individual captioning device per 
movie screen equipped to display digital cinema. The Department already 
has a requirement for a specific number of assistive listening 
receivers that must be made available at each movie theater for persons 
who need amplification of sound during a movie. See table 219.3 in the 
2010 ADA Standards for Accessible Design (2010 Standards).\36\ Adding a 
requirement for a particular number of individual captioning devices 
would be consistent with that approach and is necessary to ensure that 
patrons who are deaf and hard of hearing are provided with effective 
communication.
---------------------------------------------------------------------------

    \36\ 28 CFR 36.104 (title III) (defining the ``2010 Standards'' 
as the requirements set forth in appendices B and D to 36 CFR part 
1191 and the requirements contained in subpart D of 28 CFR part 36). 
The 2010 Standards can be found at http://www.ada.gov/2010ADAstandards_index.htm (last visited July 14, 2014).
---------------------------------------------------------------------------

    In the NPRM, the Department is proposing scoping for the required 
number of individual captioning devices in numbers that approximate 
about half the number of assistive listening receivers already required 
for assembly areas by the 2010 Standards. Proposed Sec.  
36.303(g)(2)(iii)(A) states, ``[a] public accommodation that owns, 
leases, or leases to, or operates a movie theater shall provide 
individual captioning devices in accordance with the following Table. 
This requirement does not apply to movie theaters that elect to exhibit 
all movies at all times at that facility with open movie captioning.''

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

    This table's proposed requirements are based on the total number of 
seats for all screens in the movie theater. If a movie theater has more 
than one screen, the number of seats are combined together to determine 
the required number of individual captioning devices.
    The Department believes that its proposed numbers are sufficient 
because not every individual with hearing loss requires the use of 
captioning in order to enjoy movies. There are many individuals with 
mild to moderate hearing loss who can use the amplification provided by 
assistive listening receivers, although there are some individuals with 
moderate hearing loss for whom the assistive listening receivers are 
not effective. See discussion supra. The Department does not agree with 
the movie theater industry's recommendation that it should require each 
movie theater to have only one individual captioning device available 
for each auditorium

[[Page 44995]]

that has captioning equipment installed because it does not believe 
that this would be a sufficient number given the number of persons with 
moderate and severe hearing loss or who are profoundly deaf who would 
benefit from closed captioning. Moreover, the Department believes that 
it is more appropriate to base the scoping for individual captioning 
devices on the number of seats at the movie theater, rather than the 
number of movie screens, because the number of devices should be 
proportionate to the number of individuals who can attend the movie. 
Under the Department's formula, a movie theater that had five screens 
in auditoriums that could accommodate a total of 3000 people would need 
to have more devices available than a movie theater that also had five 
screens but in auditoriums that could only accommodate a total of 1000 
people. This approach is consistent with the way assistive listening 
receivers are scoped in the current regulation.
    Industry commenters asserted that even in those auditoriums that 
have installed Rear Window[supreg] Captioning systems, industry data 
indicates that there are few requests to use them. Based on the 
comments received in response to its 2010 ANPRM and its independent 
research, the Department has concluded that the availability of 
captioning in the United States is limited, and it is therefore not 
appropriate to base conclusions about potential use of individual 
captioning devices on current usage data at those few auditoriums that 
offer closed captioning on a limited basis.\37\ The Department believes 
that the demand for individual captioning devices will be much greater 
than one device per auditorium once movies are regularly and uniformly 
exhibited with captioning and the availability of captioning becomes 
widely known. This is especially true given the anticipated increase in 
the number of deaf and hard of hearing individuals in the United States 
that will come with the aging of the U.S. population.
---------------------------------------------------------------------------

    \37\ When the Department adopted standards for physical 
accessibility in public accommodations, the Department similarly did 
not base its scoping on how many persons with disabilities accessed 
inaccessible facilities.
---------------------------------------------------------------------------

    The Department received numerous comments from advocacy 
organizations and deaf and hard of hearing individuals indicating that 
they were unable to attend the few movies currently offered with closed 
captioning because they were not publicized, were usually scheduled a 
few times a week at off hours (often in the middle of the weekday), or 
were only scheduled for one movie at a time, despite the variety of 
movies that are shown at any one time at a movie theater. These 
commenters stated that if captioned movies were available to them for 
all movies at all times, they would then become regular moviegoers in 
the same manner as persons who are not deaf or hard of hearing. These 
commenters included deaf and hard of hearing parents of children who 
wished to attend movies, teenagers who wished to attend movies with 
their friends on the weekends at peak times, and people who work during 
the day who wished to attend movies during evening hours and on 
weekends. Many of the deaf and hard of hearing individuals who 
testified at the Department's three public hearings or who submitted 
comments stressed that they have not been to a movie for many years 
either because of the lack of availability of captioning or because 
when they tried to see films advertised as having captioning they 
arrived at the movie theater only to find that the staff did not know 
where the individual captioning devices were or how to turn on the 
captioning, or the individual devices themselves malfunctioned.
    Question 10: The Department seeks public comment on its proposed 
scoping for individual captioning devices. If the scoping is not 
correct, what are the minimum number of individual captioning devices 
that should be available at a movie theater? Please provide the basis 
for alternative suggestions. If the required number of individual 
captioning devices is linked to the number of seats in the movie 
theater facility, should the percentage decrease for very large 
facilities with multiple screens? What should the threshold(s) be for 
this calculation? Should the Department consider different scoping 
approaches for small theaters? How so and why? Are there alternative 
scoping approaches that the Department should consider to address 
variability in demand for the devices across theaters? If so, please 
describe such alternatives in as much detail as possible.
Standards for Individual Captioning Devices
    The Department received a number of comments for specific 
performance standards for individual captioning devices. These 
commenters wanted the Department to ensure that the text that is 
exhibited on these devices is readable with good contrast and good text 
size, that it be available at a reasonable height in relation to the 
movie screen, that the devices be easily used by patrons who are deaf 
or hard of hearing, and that they be properly maintained. The 
Department has considered these comments and is proposing in the NPRM, 
at Sec.  36.303(g)(2)(ii)(B), that ``[i]n order to provide effective 
communication, individual captioning devices must: (1) Be adjustable so 
that the captions can be viewed as if they are on or near the movie 
screen; (2) be available to patrons in a timely manner; (3) provide 
clear, sharp images in order to ensure readability; and (4) be properly 
maintained and be easily usable by the patron.''
    The Department received a number of comments expressing concern 
that seat location can have an impact on the ability to read closed 
captions. Those commenters recommended that the Department require 
movie theaters to reserve seats in the center of the auditorium to 
persons using individual captioning devices. In contrast, an industry 
commenter stated that the ability to read the captions provided by the 
new closed-caption systems for digital cinema has been reported to be 
equally good throughout the movie theater auditorium and that the 
system currently in use for analog has reportedly been improved for use 
with digital cinema.
    The Department has decided not to propose any kind of reserved 
seating provision in the regulation at this point because it believes 
that its proposed performance standards will ensure the usability of 
individual captioning devices. In addition, seating at movie theaters 
generally is on a first-come, first-served basis, and patrons know to 
come early if they want to sit in the ``sweet spot'' or other desirable 
seats in the auditorium.\38\ While movie theaters may select whatever 
captioning equipment they want to deliver closed captions to their 
patrons, they must provide effective communication to individuals with 
disabilities who are deaf, hard of hearing, blind, or have low vision. 
The proposed performance standards should assist movie theaters in 
meeting that requirement.
---------------------------------------------------------------------------

    \38\ If a movie theater adopts an all-reserved seating policy, 
it would be advisable to hold back certain seats for individuals who 
need captioning (or audio description) if the captioning (or audio 
description) does not work well throughout the auditorium or works 
better in specific areas of the auditorium.
---------------------------------------------------------------------------

    Question 11: Has the Department adequately described performance 
standards for individual captioning devices that deliver closed 
captions to patrons? How should the standards address text size that is 
displayed on the devices?

[[Page 44996]]

Audio Description
    Coverage. In Sec.  36.303(g)(3)(ii) of the NPRM, the Department is 
proposing that a public accommodation that owns, leases, leases to, or 
operates a movie theater shall ensure that its auditoriums have the 
capability to exhibit movies with audio description and in all cases 
where the movies it intends to exhibit are produced, distributed, or 
otherwise made available with audio description, the public 
accommodation shall ensure that it exhibits such movies with audio 
description at all scheduled screenings of those movies. This 
requirement is comparable to the requirement for exhibition of movies 
with closed captioning at proposed Sec.  36.303(g)(2). In addition, 
with respect to digital screens, the Department is proposing the same 
six-month compliance date for the provision of audio description at 
Sec.  36.303(g)(3)(i) as it is for movie captioning. With respect to 
analog screens, the Department is seeking public comment on whether to 
adopt a four-year delayed compliance date for the provision of audio 
description or defer new requirements for analog screens to provide 
audio description for now and consider additional rulemaking at a later 
date.
    The Department received virtually no comments objecting to a 
requirement for the exhibition of movies with audio description when 
such movies are available to movie theaters with audio description. The 
overwhelming number of commenters addressing audio description 
indicated that they believed it should be available at all movies at 
all times. However, while industry commenters agreed that audio 
description should be available, they suggested limiting any 
requirement for exhibiting movies with audio description to 25 percent 
of those auditoriums that have converted to digital cinema. A 25 
percent requirement would significantly limit the availability of 
movies with audio description across the country.
    As discussed with respect to proposed Sec.  36.303(g)(2) (movie 
captioning), the Department believes that given the availability of 
audio-description technology, and in light of the purpose and goals of 
the ADA and its statutory and regulatory framework, the ADA requires 
nothing less than full access to audio-described movies at all times 
such movies are exhibited, whenever such movies are produced, 
distributed, or otherwise made available to movie theaters. The primary 
goals of the ADA are to assure equality of opportunity and full access 
and participation in our society for individuals with disabilities. 42 
U.S.C. 12101. The ADA requires public accommodations to take such steps 
as may be necessary to ensure that no individual with a disability is 
excluded, denied services, segregated, or otherwise treated differently 
because of the absence of auxiliary aids and services unless the public 
accommodation can demonstrate that taking such steps would result in a 
fundamental alteration or undue burden. 42 U.S.C. 12182(b)(2)(A)(iii).
    Individual audio-description listening devices. In order to ensure 
that individuals who are blind or have low vision have access to audio-
described movies when such movies are available in a movie theater, the 
theater needs to provide a reasonable number of audio-description 
listening devices for individual use. The comments received and the 
Department's research indicate that many of the assistive listening 
receivers currently in use in the United States have two channels, one 
of which is needed for amplified sound, and the other that could be 
used for audio description. The NPRM proposes at Sec.  
36.303(g)(3)(ii)(B) that a theater may meet its obligation to provide 
individual captioning devices if the receivers it uses to meet its 
obligations to provide assistive listening systems in accordance with 
the requirements in table 219.3 of the 2010 Standards have at least two 
channels, one of which can be available for transmission of audio 
description. For those theaters that do not have two-channel assistive 
listening receivers, the Department is proposing in Sec.  
36.303(g)(3)(ii)(A) to require minimal scoping of one individual audio-
description listening device per auditorium, with a minimum of two 
devices per theater. This proposal is relatively consistent with the 
recommendations of at least one industry commenter on the 2010 ANPRM, 
who asserted that the Department should limit any requirement for 
individual audio-description listening devices to one receiver per 
auditorium. In any event, the Department believes that because many 
movie theaters already have two channel assistive listening receivers 
that they use to meet their existing requirements under the 2010 
Standards, the proposed scoping will not require many movie theaters to 
buy additional equipment.
    The Department received comments and heard testimony from 
individuals and organizations representing individuals who are blind 
and have low vision stating that they do not attend movies because of 
the lack of audio description, but would begin going to movies once 
audio description is readily available.
    Question 12: How many devices capable of transmitting audio 
description to individuals should each movie theater have on hand for 
use by patrons who are blind or have low vision? Should the number of 
individual audio-description listening devices be tied to the number of 
seats in each auditorium or other location with a movie screen? Should 
the number of individual audio-description listening devices be tied to 
the number of seats in the theater facility as a whole? Please provide 
the basis for your comment. How many movie theaters have two-channel 
receivers that can be used to provide audio description? How many movie 
theaters will need to buy additional individual audio description 
listening devices? How much do audio description listening devices that 
meet the requirements of this proposed rule cost?
    For some small movie theaters, it may be an undue burden to 
purchase the equipment needed to exhibit movies with closed captioning 
and audio description and meet the other requirements of the rule. 
Determining whether compliance with the requirements of this rule will 
result in an undue burden, however, requires the individualized, fact-
specific inquiry and analysis discussed previously. In some 
circumstances, movie theaters may incur a cost to determine whether and 
to what extent compliance with the rule would result in an undue 
burden. Such costs may include the time to determine how to comply with 
the rule's requirements; the time to gather, compile, and review 
financial records; and the time to obtain estimates of the cost of 
compliance. The Department lacks information necessary for estimating 
the time and other costs a theater would incur to determine whether 
compliance would result in an undue burden and the extent to which this 
rule would increase movie theaters' legitimate use of the undue burden 
analysis compared to the status quo. This information, however, would 
be important for analyzing at the final rule stage the incremental 
effect of the rule and for analyzing regulatory alternatives, 
particularly for small theaters.
    The Department notes that many small businesses will be able to 
defray the costs of compliance with this rule if they qualify for a 
special IRS tax credit that is intended to defray the costs of 
providing access to persons with disabilities in accordance with the 
requirements of the ADA. Section 44 of the Internal Revenue Code of 
1986

[[Page 44997]]

allows eligible businesses a tax credit of 50 percent of the cost of 
``eligible access expenditures,'' defined as amounts paid or incurred 
``(A) for the purpose of removing architectural, communication, 
physical, or transportation barriers which prevent a business from 
being accessible to, or usable by, individuals with disabilities, * * * 
(D) to acquire or modify equipment or devices for individuals with 
disabilities, or (E) to provide other similar services, modifications, 
materials, or equipment.'' 26 U.S.C. 44(c)(2). This tax credit is 
available to businesses with gross receipts of less than one million 
dollars each year or that have 30 or fewer full-time employees. See 26 
U.S.C. 44(b). The Department believes that providing captioning and 
audio description to meet the longstanding obligation to provide 
effective communication under the ADA falls within this tax code 
provision.
    Question 13: The Department invites comments on the additional time 
it will take and other possible costs movie theaters would incur to 
determine whether compliance with the rule would constitute an undue 
burden. What kinds of costs are involved? How much time would a theater 
spend determining how to comply with the rule; gathering, compiling, 
and reviewing financial records; and estimating the cost of compliance? 
Would small theaters have professionals such as accountants or lawyers 
review their financial records? What information should the Department 
use to estimate the per hour cost of the time movie theaters spend 
undertaking these activities? How might the Department develop an 
estimate of the average time and cost required to determine whether 
full compliance would constitute an undue burden? To what extent would 
this rule increase movie theaters' reliance on the undue burden 
analysis compared to the status quo? What characteristics of small 
theaters would make it more likely that it would be an undue burden to 
comply with the rule? Are there empirical studies or other credible 
information available for estimating the time and cost for a theater to 
make a legitimate determination that compliance would constitute an 
undue burden? The Department is interested in comments in response to 
these questions from the public in general, but particularly from small 
movie theater owners and operators and from other small businesses 
covered by title III of the ADA with experience in determining whether 
it is an undue burden to meet their effective communication obligation.
Notice Requirement
    The Department believes that it is essential that movie theaters 
provide adequate notice to patrons of the availability of captioned and 
audio-described movies. In the 2010 ANPRM, in Question 18, the 
Department requested public comment relating to the necessity of a 
requirement for providing notice about the availability of captioned 
and audio-described movies and the scope of such a requirement. The 
Department received numerous comments in response to this question. The 
vast majority of commenters supported a notice requirement that 
included provisions for notice in the range of communications and media 
utilized by movie theaters to advertise their films. Several commenters 
recommended that the Department require a uniform system of labeling 
movies as having open captioning (OC), closed captioning (CC), or audio 
description (AD). Other commenters stated that they believed the form 
of notice should be left to the discretion of movie theaters. Many 
commenters encouraged the Department to ensure that movie listings 
provided over the phone include this information, so that patrons who 
are blind and have low vision and who do not utilize Web-based or print 
media can find out which movies carry audio description. Industry 
commenters noted that while the industry agrees that providing notice 
of captioning and audio description is important, movie theaters do not 
have control over the information provided on third-party Web sites 
that provide show time information and that sell tickets. These same 
commenters indicated that they have been working with these Web sites 
to voluntarily provide accurate information about current screenings of 
captioned and audio-described movies. Many commenters noted that if the 
Department adopted a requirement that all movies be shown with 
captioning and audio description, the need for notice would disappear, 
since patrons could assume that all movies would be accessible to them.
    After considering these comments, the Department has decided to 
propose a requirement for provision of notice to patrons that covers 
all types of communications and advertisements provided by movie 
theaters, but does not require a specific form of notification. 
Proposed Sec.  36.303(g)(5) states the following: ``movie theaters 
shall ensure that communications and advertisements intended to inform 
potential patrons of movie showings and times, that are provided by the 
theaters through Web sites, posters, marquees, newspapers, telephone, 
and other forms of communication, shall provide information regarding 
the availability of captioning and audio description for each movie.'' 
Even though the Department has proposed a 100 percent requirement, it 
will still be necessary to provide notice regarding which movies have 
captions and audio description because not all movies will be available 
to movie theaters with captions or audio description. The Department 
notes that third parties are not liable under the ADA when they publish 
information about movies if they fail to include information about the 
availability of captioning and audio description at movie theaters.
    Question 14: It is the Department's view that the cost of the 
proposed requirement for theaters to provide notice indicating which 
screenings will be captioned or audio-described is de minimus. The 
Department requests comments on this view. Specifically, how much will 
it cost theaters to provide information regarding the availability of 
captioning and audio description for each movie and to specify whether 
open movie captions or closed movie captions will be provided for each 
particular showing and time? The Department understands that this cost 
may vary depending on the type of communication or advertisement, and 
so we request that commenters specify the type of communication or 
advertisement along with their cost estimate. In addition, how many 
times in a given year do theaters provide communications and 
advertisements that would trigger this proposed requirement? The 
Department understands that this will likely vary depending on how many 
screens a theater has, and so we request theater commenters to specify 
how many screens they operate in their response to this question. 
Because the rule would require 100 percent of movies available with 
captions and audio description to be shown with these accessibility 
features, should the Department permit theaters to indicate those 
movies that do not have these features rather than indicating those 
that have these features? Would this approach have an effect on the 
cost of providing notice? If so, how would it affect the cost?
Capability to Operate Captioning and Audio Description Equipment
    The Department received a significant number of comments from 
individuals with disabilities and groups representing persons who are 
deaf or hard of hearing and who are blind or have low vision strongly 
encouraging

[[Page 44998]]

the Department to include a requirement that staff at movie theaters 
know how to operate captioning and audio description equipment and be 
able to communicate about the use of individual devices with patrons. 
These commenters stated that on numerous occasions when they attempted 
to go to a movie advertised as having captioning or audio description, 
there was no staff available who knew where the individual captioning 
devices were kept or how to turn on the captioning or audio description 
for the movie. Many of these individuals indicated they were unable to 
experience the movie fully because of the lack of trained personnel, 
even if the auditorium was properly equipped and the movie was actually 
available with captioning or audio description. Industry commenters 
agreed that staff should be knowledgeable in the use of equipment but 
asserted that training in the use of all equipment in a movie theater 
was standard practice, and therefore, such a requirement was not 
necessary.
    Having considered these comments, the Department has decided to 
include in the NPRM proposed Sec.  36.303(g)(6), which states, ``movie 
theaters must ensure that there be at least one individual on location 
at each facility available to assist patrons seeking these services at 
all times when a captioned or audio-described movie is shown. Such 
assistance includes the ability to:
    (i) Operate all captioning and audio-description equipment;
    (ii) Locate all necessary equipment that is stored and quickly 
activate the equipment and any other ancillary equipment or systems 
required for the use of the devices; and
    (iii) Communicate effectively with individuals who are deaf or hard 
of hearing and blind or have low vision regarding the uses of, and 
potential problems with, the equipment for such captioning or audio 
description.''
    The Department believes that the requirement in Sec.  
36.303(g)(6)(iii) is necessary to ensure effective communication for 
persons who are deaf or hard of hearing and blind or have low vision so 
that they can have equal access to movie theaters. The Department 
notes, however, that providing effective communication about the 
availability of captioning would not require that the theater hire a 
sign language interpreter. Communication with a person who is deaf or 
hard of hearing about the availability of captioning or how to use the 
equipment involves a short and relatively simple conversation, and 
therefore, can easily be provided through signage, instruction guides, 
and exchange of written notes.
    Question 15: How much additional time beyond the normal time movie 
theaters spend training staff would be needed to incorporate 
instruction in the operation and maintenance of the equipment for 
captioning or audio description? How much additional time do theaters 
anticipate spending on assisting patrons in using the captioning and 
audio description devices? How should the Department estimate the value 
of the additional time theater personnel would spend on assisting 
patrons in using the captioning and audio description devices? Would 
that additional cost be borne by the theaters, and if so, how?

V. Other Issues

    Several commenters asked the Department to include a requirement 
that movie theaters maintain all equipment needed to provide captioning 
and audio description. The Department notes that Sec.  36.211 of the 
title III regulation already requires that public accommodations 
``maintain in operable working condition those features of facilities 
and equipment that are required to be readily accessible to and usable 
by persons with disabilities by the Act or this part.'' The Department 
does not believe a separate requirement is necessary for equipment 
needed to provide captioning and audio description.

VI. Regulatory Process Matters

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

1. Background
    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility.
    In keeping with Executive Order 12866 the Department has evaluated 
this proposed rule to assess whether it would likely ``[h]ave an annual 
effect on the economy of $100 million or more or adversely affect in a 
material way the economy, a sector of the economy, productivity, 
competition, jobs, the environment, public health or safety, or State, 
local, or tribal governments or communities.'' E.O. 12866, Sec.  
3(f)(1). The Department's Initial RA shows that this proposed 
regulation does not represent an economically ``significant'' 
regulatory action within the meaning of Executive Order 12866. See E.O. 
12866, Sec. Sec.  3(f)(1), 6(a)(3)(C). The Department's full Initial RA 
can be found in the docket for this proposed rule at http://
www.Regulations.gov.
2. Costs--Summary of Likely Economic Impact
    The Initial RA provides estimates of the total cost of the rule 
under Option 1 (a six-month compliance date for digital screens and a 
four-year compliance date for analog screens) and Option 2 (a six-month 
compliance date for digital screens and a deferral of new regulatory 
requirements on analog screens) over a 15-year time horizon. For Option 
1, we estimate that the cost of the rule will range from $177.8 million 
to $225.9 million when using a 7 percent discount rate, and from $219.0 
million to $275.7 million when using a 3 percent discount rate. For 
Option 2, we estimate that the cost of the rule will range from $138.1 
million to $186.2 million when using a 7 percent discount rate, and 
from $169.3 million to $226.0 million when using a 3 percent discount 
rate.
    The range of cost estimates for both options depends on the 
assumptions used regarding the extent to which theaters are or soon 
will be providing closed movie captioning and audio description as 
proposed in this rule, but independently of this rulemaking. This 
Initial RA estimates costs using three different baselines due to a 
lack of information regarding the extent to which theaters are already 
providing captioning and audio description as proposed in this rule. 
Under Option 1, each baseline assumes that 2 percent of analog theaters 
currently meet the requirements of this proposed rule. Under Option 2, 
the baselines do not make assumptions about analog screens because the 
rule would defer requirements on such screens to future rulemaking. See 
Initial RA section 4 for details.
     Baseline 1 (One Screen Per-Theater)--This baseline assumes 
that on average, every movie theater with digital screens has one 
screen that is captioning enabled \39\ (based on an assumption of at

[[Page 44999]]

least some compliance with the existing ADA requirements that public 
accommodations provide effective communication to persons with hearing 
and vision disabilities). This assumption leads to an estimate of about 
13 percent of all digital screens having captioning capabilities. For 
Option 1, this baseline also assumes that 2 percent of analog screens 
are captioning enabled.
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    \39\ The three baselines described in this section use the term 
``captioning enabled.'' This term refers to the extent to which 
movie theaters and movie screens currently have the hardware and 
captioning devices needed to comply with this NPRM. Each baseline 
includes assumptions for what this term means, and those assumptions 
can be found in the initial regulatory impact analysis that 
accompanies this NPRM.
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     Baseline 2 (Litigation-Based)--This baseline is derived 
using available data regarding movie theater companies that are now 
providing captioning and that have been involved in recent litigation 
challenging their failure to comply with existing ADA effective 
communication requirements. This baseline assumes that 42 percent of 
digital screens are captioning enabled. For Option 1, this baseline 
also assumes that 2 percent of analog screens are captioning enabled.
     Baseline 3 (2013 NATO Survey-Based)--This baseline uses 
data provided in testimony by officials from the NATO before Congress 
in May 2013, in which 53 percent of digital screens were described as 
already captioning enabled. For Option 1, this baseline also assumes 
that 2 percent of analog screens are captioning enabled.
    Costs are estimated over a 15-year period, beginning with the year 
in which the rule becomes effective (assumed to be 2015). For both 
options, costs are estimated for theaters with digital screens 
beginning in the first year after publication of the final rule (2015). 
For Option 1, costs are estimated for theaters with analog screens 
beginning in the fourth year after publication of the final rule 
(2018).
    The estimated costs primarily consist of the following: (1) The 
purchase of hardware and software to send the captions to users' 
individual devices; (2) the purchase of individual devices as per the 
scoping requirements specified in the rule; (3) periodic costs to 
replace hardware, software, and devices; (4) annual operations and 
maintenance costs to cover storage, management, staff training, and 
other recurring costs; (5) any additional hardware costs to transmit 
audio description to individual devices; and (6) any additional costs 
associated with the purchase of additional of individual audio-
description listening devices. The costs do not include the costs to 
theaters to convert their screens from analog to digital, because this 
rule does not require any movie theater to convert to digital cinema, 
and doing so is not necessary to comply with the proposed requirements.

                                         Estimated Costs Under Option 1
                                      [2015 Dollars, 15-year time horizon]
----------------------------------------------------------------------------------------------------------------
                                           Under baseline 1         Under baseline 2         Under baseline 3
            Discount rate                 assumptions--  one         assumptions--         assumptions--  NATO
                                          screen per-theater        litigation-based           survey based
(%)                                               (millions $)             (millions $)             (millions $)
----------------------------------------------------------------------------------------------------------------
7....................................                   $225.9                   $191.9                   $177.8
3....................................                    275.7                    235.6                    219.0
----------------------------------------------------------------------------------------------------------------

                                         Estimated Costs Under Option 2
                                      [2015 Dollars, 15-year time horizon]
----------------------------------------------------------------------------------------------------------------
                                           Under baseline 1         Under baseline 2         Under baseline 3
            Discount rate                 assumptions--  one         assumptions--         assumptions--  NATO
                                          screen per-theater        litigation-based           survey based
(%)                                               (millions $)             (millions $)             (millions $)
----------------------------------------------------------------------------------------------------------------
7....................................                   $186.2                   $152.2                   $138.1
3....................................                    226.0                    186.0                    169.3
----------------------------------------------------------------------------------------------------------------

    Under Option 1, the estimated annualized costs of the proposed 
regulation under each of the three baseline scenarios range from $19.5 
million to $24.8 million when using a 7 percent discount rate, and from 
$18.3 million to $23.1 million when using a 3 percent discount rate. 
Under Option 2, the estimated annualized costs of the proposed 
regulation under each of the three baseline scenarios range from $15.2 
million to $20.4 million when using a 7 percent discount rate, and from 
$14.2 million to $18.9 million when using a 3 percent discount 
rate.\40\
---------------------------------------------------------------------------

    \40\ Annualized costs were calculated in a Microsoft Excel model 
using the PMT function (-PMT (discount rate, years of analysis, 
present value of total costs)).
---------------------------------------------------------------------------

    The Initial RA shows that estimated annual costs for this proposed 
rule will not exceed $100 million in any year under any of three 
baseline scenarios, irrespective of which option the Department selects 
for analog screens. Annual costs for each year during the 15-year 
expected term of the proposed regulation are depicted in the following 
figures:

[[Page 45000]]

[GRAPHIC] [TIFF OMITTED] TP01AU14.005

[GRAPHIC] [TIFF OMITTED] TP01AU14.006

    Because movie theater complexes vary greatly by number of screens, 
which significantly impacts overall costs per facility, the analysis 
breaks the movie exhibition industry into four theater types based on 
size--Megaplexes (16 or more screens), Multiplexes (8-15 screens), 
Miniplexes (2-7 screens), and Single Screen Theaters--and by digital or 
analog system. Per-facility costs were then calculated for each theater 
type. The largest costs per year for any single movie theater would 
occur in the first year due to the purchase of necessary equipment. The 
first year's costs for digital Megaplex theaters are estimated to total 
$38,547, while comparable costs for digital single screen theaters 
would total $3,198.\41\
---------------------------------------------------------------------------

    \41\ Unless a dollar figure in the text or the tables 
specifically identifies a particular baseline, the default baseline 
for general dollar figures uses Baseline 1.

[[Page 45001]]

            Per Digital Theater Initial Capital Costs for Captioning and Audio Description Equipment
                                [Hardware, software and devices, 2015 dollars *]
----------------------------------------------------------------------------------------------------------------
                                         Per-theater initial      Per-theater initial
                                        capital costs  (using    capital costs  (using   Average initial capital
      Digital theater type/size         Doremi  technology for     USL technology for       costs for digital
                                          movies  in digital       movies in digital       theater  (average of
                                               format)                  format)           different technology)
----------------------------------------------------------------------------------------------------------------
Megaplex.............................                  $40,540                  $36,554                  $38,547
Multiplex............................                   27,880                   25,798                   26,839
Miniplex.............................                   10,920                   10,252                   10,586
Single Screen........................                    3,285                    3,111                    3,198
----------------------------------------------------------------------------------------------------------------
Note: These initial capital costs include the costs to purchase and install: (1) Captioning hardware and
  software (one per screen); (2) individual devices for captioning (ranging from 4 for Single Screens to 34 for
  Megaplexes); (3) additional hardware, if needed, to transmit audio description (from none to one device per
  screen); and (4) additional devices for audio description (ranging from 2 for Single Screens to 18 for
  Megaplexes).
* Because unit costs for captioning and audio description equipment have either remained steady or declined
  between 2010 and 2013, they are assumed to remain constant from 2013 (when last researched) to 2015, when the
  final rule is expected to be published.

    Should the Department proceed under Option 1 and cover analog 
screens, per theater costs for analog theaters would be higher than 
those for digital theaters for each type/size.\42\ The first year per-
theater costs for analog single screen theaters, which are measured in 
year four, would total $8,172. The first year costs for digital single 
screen theaters, which are measured in year one, would average $3,198.
---------------------------------------------------------------------------

    \42\ The Department's analysis assumes that at the time this 
rule takes effect, theaters will either be exclusively digital or 
exclusively analog (that is, all of the screens in a theater will be 
either digital or analog).

    Per Analog Theater Initial Capital Costs of Captioning and Audio
                          Description Equipment
            [Hardware, software and devices, 2015 dollars *]
------------------------------------------------------------------------
                                                   Per theater initial
                                                   capital costs  (rear
            Analog theater type/size              window technology for
                                                      analog films)
------------------------------------------------------------------------
Megaplex **....................................                       NA
Multiplex **...................................                       NA
Miniplex.......................................                  $31,884
Single Screen..................................                    8,172
------------------------------------------------------------------------
Note: These first year costs include (1) the costs to purchase and
  install: Captioning hardware and software (one per screen); (2)
  individual devices for captioning (ranging from 4 for Single Screens
  to 34 for Megaplexes); (3) additional hardware, if needed, to transmit
  audio description (from none to one device per screen); and (4)
  additional individual audio description listening devices (ranging
  from 2 for Single Screens to 18 for Megaplexes).
* Since unit costs for captioning and audio description equipment have
  either remained steady or declined between 2010 and 2013, they are
  assumed to remain constant from 2013 (when last researched) to 2015,
  when the final rule is expected to be published.
** Note that the Initial RA assumes that all Megaplexes and Multiplexes
  have transitioned to digital projection systems by the time this rule
  goes into effect.

    In addition, the Initial RA uses a value equivalent to 3 percent of 
all the captioning and audio-descriptive equipment owned by the theater 
to capture any operations and maintenance costs including the 
incremental increase to staff time, the costs of adding information 
that captioning or audio description is available when preparing 
communications regarding movie offerings, and other potential increases 
in administrative costs. These costs are annual. This 3 percent is a 
factor commonly used in construction and equipment maintenance. See 
Regulatory Impact Analysis for the Final Revised Regulations 
Implementing Titles II and III of the ADA, app. 3.I (Sept. 15, 2010), 
available at http://www.ada.gov/regs2010/RIA_2010regs/ria_appendix03.htm#ai (last visited July 14, 2014).
    In dollar terms, operations, maintenance, and training costs for 
analog theaters are estimated on an annual basis to average from a low 
of $245 for Single Screens to a high of $957 for Miniplexes; for 
digital theaters' operations, maintenance and training costs are 
estimated to average from a low of $96 for Single Screens to a high of 
$1,156 for Megaplexes.
    Question 16: The Department invites comment on the Initial RA's 
methodology, cost assumptions, and cost estimates, including the 
specific costs of purchasing, installing and replacing captioning and 
audio description equipment, and the costs of complying with the 
training and notice requirements of the rule. The Department is 
particularly interested in receiving comments about the frequency with 
which captioning and audio description devices need to be replaced. The 
Department is also interested in estimates of how much time it would 
take for theaters to acquire the equipment needed to comply with this 
rule.
3. Benefits--Qualitative Discussion of Benefits
    The benefits of this rule are difficult to quantify for multiple 
reasons. The Department has not been able to locate robust data on the 
rate at which persons with disabilities currently go to movies shown in 
movie theaters. In addition, as a result of this rule, the following 
number of persons will change by an unknown amount: (1) The number of 
persons with disabilities who will newly go to movies, (2) the number 
of persons with disabilities who will go to movies more often, (3) the 
number of persons who will go to the movies as part of a larger group 
that includes a

[[Page 45002]]

person with a disability, and (4) the number of persons with 
disabilities who would have gone to the movies anyway but under the 
rule will have a fuller and more pleasant experience. In addition, the 
Department does not know precisely how many movie theaters currently 
screen movies with closed captioning and audio description, or how many 
people with hearing or vision disabilities currently have consistent 
access to movie theaters that provide closed captioning and audio 
description. Finally, the Department is not aware of any peer reviewed 
academic or professional studies that monetize or quantify the societal 
benefit of providing closed captioning and audio description at movie 
theaters.
    The individuals who will directly benefit from this rule are those 
persons with hearing or vision disabilities who, as a result of this 
rule, would be able for the first time to attend movies with closed 
captioning or audio description in theaters across the country on a 
consistent basis. Individuals who will indirectly benefit from this 
rule are the family and friends of persons with hearing and vision 
disabilities who would be able to share the movie-going experience more 
fully with their friends or loved ones with hearing and vision 
disabilities.
    Data on movie-going patterns of persons who are deaf or hard of 
hearing or are blind or have low vision is very limited, making 
estimations of demand very difficult. However, numerous public comments 
suggest that many persons who are deaf or hard of hearing or are blind 
or have low vision do not go to the movies at all, or attend movies 
well below the national average of 4.1 annual admissions per person, 
because of the lack of auxiliary aids and services that would allow 
them to understand and enjoy the movie.
    Though we cannot confidently estimate the likely number of people 
who would directly benefit from this proposed rule, we have reviewed 
data on the number of people in the United States with hearing and 
vision disabilities. The Census Bureau estimates that 3.3 percent of 
the U.S. population has difficulty seeing, which translates into a 
little more than eight million individuals in 2010, and a little more 
than two million of those had ``severe'' difficulty seeing.\43\ At the 
same time, the Census Bureau estimates that 3.1 percent of people had 
difficulty hearing, which was a little more than 7.5 million 
individuals in 2010, and approximately one million of them had 
``severe'' difficulty hearing. Not all of these people would benefit 
from this proposed rule. For example, some people's hearing or vision 
disability may not be such that they would need closed captioning or 
audio description. Some people with hearing or vision disabilities may 
not use the equipment for a variety of reasons, including finding the 
equipment uncomfortable to use. Some people with hearing or vision 
disabilities may already have consistent access to theaters that screen 
all their movies with closed captioning and audio description. And some 
theaters may not provide closed captioning and audio description for 
all their movies because it would be an undue burden under the ADA to 
do so. Meanwhile, some people with hearing or vision disabilities would 
not attend public screenings of movies even if theaters provided closed 
captioning and audio description simple because they do not enjoy going 
out to the movies--just as is the case among persons without 
disabilities.\44\
---------------------------------------------------------------------------

    \43\ The Census defines ``[d]ifficulty seeing'' as 
``experiencing blindness or having difficulty seeing words and 
letters in ordinary newsprint, even when wearing glasses or contact 
lenses (if normally worn).'' U.S. Census Bureau, U.S. Department of 
Commerce, P70-131, Americans with Disabilities: 2010 Household 
Economic Studies at 8 (2012), available at http://www.census.gov/prod/2012pubs/p70-131.pdf (last visited July 14, 2014). It defines 
``[d]ifficulty hearing'' as ``experiencing deafness or having 
difficulty hearing a normal conversation, even when wearing a 
hearing aid.'' Id.
    \44\ In 2012, a little more than two thirds (68 percent) of the 
U.S. and Canadian population over two years old went to a movie at a 
movie theater at least once that year. See Motion Picture 
Association of America, Theatrical Market Statistics at 11 (2012), 
available at http://www.mpaa.org/wp-content/uploads/2014/03/2012-Theatrical-Market-Statistics-Report.pdf (last visited July 14, 
2014).
---------------------------------------------------------------------------

    In recent years, a large number of movie theaters have already 
invested in equipment to provide closed captioning and audio 
description. As noted earlier in this NPRM, NATO estimates that 53 
percent of digital screens are already captioning and audio description 
enabled. However, this does not translate into an estimate that about 
half (or 53 percent) of persons who are deaf or hard of hearing or are 
blind or have low vision are now benefiting from captioning or audio 
description. There are multiple reasons why, even if we accept this 
estimate of the current availability of captioning and audio 
description, that it does not translate into direct benefits for all 
those who could benefit. Such reasons include the following: (1) Only 
some screens at some theaters may have closed captioning and audio 
description capabilities and those may not be showing the movie the 
person wants to see, (2) the theater may not be showing the desired 
movie with closed captions and audio description on a convenient day or 
at a convenient time, (3) the theater may be located much farther away 
from where the person with a disability resides than other, less 
accessible theaters, which may result in a decision not to go to a 
movie theater at all, or (4) a person may live in a community that has 
theaters with closed captioning and audio description capability but 
may travel (for vacation, to visit relatives, for work, or other 
reasons) to a community that does not have theaters that are captioning 
and audio description enabled.
    Not only is the estimate of the number of who might directly 
benefit from the proposed rule uncertain, but the individual benefits 
are not uniform because persons who are deaf or hard of hearing or are 
blind or have low vision are likely to benefit from this proposed rule 
in different ways and realize benefits in different amounts. The type 
and amount of benefits can depend on personal circumstances and 
preferences, as well as proximity to movie theaters that otherwise 
would not offer captioning or audio description but for this proposed 
rule. Some persons with vision and hearing disabilities have 
effectively been precluded from going to movies at theaters because the 
only theaters available to them did not offer closed captioning or 
audio description, offered open captioning but only at inconvenient 
times (such as the middle of the day during the week), or offered 
captioning or audio description for only a few films and not for every 
screening of those films. For these persons, the primary benefit will 
be the ability to see movies when released in movie theaters along with 
other movie patrons that they otherwise would not have had the 
opportunity to do. They will have the value of that movie-going 
experience, as well as the opportunity to discuss the film socially at 
the same time as the rest of the movie-viewing public. The amount of 
benefit experienced by a person with a vision or hearing disability who 
previously had no access to a theater that provided closed captioning 
or audio description at all its screenings will be different than the 
amount experienced by a person with a hearing or vision disability who 
previously had access to a theater that did consistently provide closed 
captioning and audio description at its screenings. In addition, the 
amount of benefit from this rule experienced by a person who cannot 
follow a movie at all without the assistance of closed captioning is 
likely to be greater than the amount of benefit experienced by a person 
who can follow parts of a movie

[[Page 45003]]

without the assistance of closed captioning.
    In addition to the direct beneficiaries of the proposed rule 
discussed above, others may be indirect beneficiaries of this rule. 
Family and friends of persons with these disabilities who wish to go to 
the movies all together as a shared social experience will now have 
greater opportunities to do so. More adults who visit elderly parents 
with hearing or sight limitations would presumably be able to take 
their parents on outings and enjoy a movie at a theater together, 
sharing the experience as they may have in the past.
    The Department received numerous comments from individuals who are 
deaf or hard of hearing or blind or have low vision in response to its 
2010 Advance Notice of Proposed Rulemaking on Movie Captioning and 
Video Description in Movie Theaters describing how they were unable to 
take part in the movie-going experience with their friends and family 
because of the unavailability of captioning or audio description. Many 
individuals felt that this not only affected their ability to socialize 
and fully take part in family outings, but also deprived them of the 
opportunity to meaningfully engage in the discourse that often 
surrounds movie attendance. Parents with disabilities also complained 
that they could not answer their children's questions about a movie 
they saw together because the parents did not understand what had 
happened in the movie.
    Of perhaps greater significance to the discussion of the benefits 
of this rule, however, are issues relating to fairness, equity, and 
equal access, all of which are extremely difficult to monetize, and the 
Department has not been able to robustly quantify and place a dollar 
value on those benefits. Regardless, the Department believes the non-
quantifiable benefits justify the costs of requiring captioning and 
audio description at movie theaters nationwide.

                                 Annualized Costs and Benefits of Proposed Rule
                                      [2015 Dollars, 15-year time horizon]
----------------------------------------------------------------------------------------------------------------
                    7% Discount Rate                                         3% Discount Rate
----------------------------------------------------------------------------------------------------------------
    Baseline 1         Baseline 2         Baseline 3         Baseline 1         Baseline 2         Baseline 3
assumptions  (one     assumptions        assumptions     assumptions  (one     assumptions        assumptions
   screen per-        (litigation-       (NATO survey       screen per-        (litigation-       (NATO survey
     theater)            based)             based)            theater)            based)             based)
----------------------------------------------------------------------------------------------------------------
                                                Costs (million $)
----------------------------------------------------------------------------------------------------------------
                                Option 1--Four Year Compliance for Analog Screens
----------------------------------------------------------------------------------------------------------------
          $24.8              $21.1              $19.5              $23.1              $19.7              $18.3
----------------------------------------------------------------------------------------------------------------
                                Option 2--Deferred Rulemaking for Analog Screens
----------------------------------------------------------------------------------------------------------------
          $20.4              $16.7              $15.2              $18.9              $15.6              $14.2
----------------------------------------------------------------------------------------------------------------
                                                    Benefits
----------------------------------------------------------------------------------------------------------------
                   The proposed rule would address the discriminatory effects of communication barriers at movie
                   theaters encountered by individuals who are deaf or hard of hearing or are blind or have low
                   vision. By ensuring that movie theaters screen those movies that are produced and distributed
                   with the necessary auxiliary aids and services--captioning and audio description--and that
                   theaters provide the individual devices needed to deliver these services to patrons with
                   these particular disabilities, this rule would afford such individuals an equal opportunity
                   to attend movies and follow both the audio and visual aspects of movies exhibited at movie
                   theaters. Although the Department is unable to monetize or quantify the benefits of this
                   proposed rule, it would have important benefits. For example, it would provide people with
                   hearing and vision disabilities better access to the movie viewing experience enjoyed by
                   others; it would allow such persons to attend and enjoy movies with their family members and
                   acquaintances; it would allow people with hearing or vision disabilities to participate in
                   conversations about movies with family members and acquaintances; and it would promote other
                   hard-to-quantify benefits recognized in Executive Order 13563 such as equity, human dignity,
                   and fairness.
----------------------------------------------------------------------------------------------------------------

    Question 17: The Department invites comment on methods and data for 
monetizing or quantifying the societal benefits of the proposed 
regulation, including benefits to persons who are deaf or hard of 
hearing or blind or have low vision, as well as to other members of the 
movie-going public or other entities. For example, the Department 
invites comments on methods and data for estimating the number of 
people with vision or hearing disabilities who would benefit from this 
rule, and addressing the challenges noted above in developing such an 
estimate, as well as comments on methods and data that could be used to 
estimate the value of the different types of benefits noted above. The 
Department also invites comments on its qualitative discussion of the 
benefits of this rule, which include equity, human dignity, and 
fairness.

B. Regulatory Flexibility Act--Impact on Small Businesses

1. Small Business Threshold Assessment--Methodology and Summary of 
Results
    Consistent with the provisions of the Regulatory Flexibility Act, 
the Department has also carefully considered the likely impact of the 
proposed regulation on small businesses in the movie exhibition 
industry. See 5 U.S.C. 605(b); Memorandum for the Heads of Executive 
Departments and Agencies, Regulatory Flexibility, Small Business, and 
Job Creation, 76 FR 3827 (Jan. 18, 2011). The Department has determined 
that this proposed rule will have a significant economic impact on a 
substantial number of small businesses.
    For motion picture theaters, small businesses constitute the vast 
majority of firms in the industry. The current size standard for a 
small movie theater business is $35.5 million dollars in annual 
revenue. In 2007, the latest year

[[Page 45004]]

for which detailed breakouts by industry and annual revenue are 
available, approximately 98 percent of movie theater firms met the 
standard for small business, and these firms managed approximately 53 
percent of movie theater establishments.\45\ As noted earlier, the 
Department is considering two options for analog screens. Option 1 
would delay the compliance date for analog screens for four years after 
publication of the final rule. Option 2 would defer rulemaking 
altogether for analog screens until a later date. The IRFA estimates 
for Option 1 the average initial capital costs per firm for firms that 
display digital or analog movies. The average costs for small firms are 
estimated to be between 0.7 percent to 2.1 percent of their average 
annual receipts for firms with digital theaters, and between 2.0 
percent to 5.7 percent of average annual receipts for firms with analog 
theaters. The Department has used the IRFA to examine other ways, if 
possible, to accomplish the Department's goals with fewer burdens on 
small businesses. The vast majority of theaters with analog screens are 
small businesses and the Department believes that both of the options 
for analog screens under consideration in the proposed rule will result 
in fewer burdens on small movie theater businesses with analog screens.
---------------------------------------------------------------------------

    \45\ The size standard of $35.5 million can be found in U.S. 
Small Business Administration, Table of Small Business Size 
Standards Matched to North American Industry Classification System 
Codes at 28, available at http://www.sba.gov/sites/default/files/files/Size_Standards_Table.pdf (last visited July 14, 2014).
---------------------------------------------------------------------------

2. Initial Regulatory Flexibility Analysis
a. Summary of Reasons for Proposed Regulation
    Because the Department's rationale for proposing these requirements 
for movie captioning and audio description have already been discussed 
in full throughout this preamble (see, e.g., section II.C, supra), such 
reasoning is merely summarized here. There are, in sum, four primary 
reasons why the Department is proposing regulatory action at this time. 
First, for persons who are deaf or hard of hearing or blind or have low 
vision, the unavailability of captioned or audio-described movies 
inhibits their ability to socialize and fully take part in social and 
family outings and deprives them of the opportunity to meaningfully 
participate in an important aspect of American culture. Second, a 
significant--and increasing--proportion of Americans have hearing or 
vision limitations that prevent them from fully and effectively 
understanding movies without auxiliary aids such as captioning and 
audio description. Third, technological advancements mean not only that 
an ever-increasing number of movie theaters have been converted to 
digital cinema systems, but also that such theaters can exhibit movies 
with closed captions using commercially-available equipment at 
relatively low cost. And, lastly, despite the availability of these 
auxiliary aids and the general ADA obligation to provide effective 
communication to patrons with disabilities, individuals with 
disabilities in many parts of the United States continue to lack access 
to movies with captioning and audio description. Movie theaters' 
collective compliance efforts to date simply have not resulted in equal 
access to movies exhibited at theaters nationwide for individuals who 
are deaf or hard of hearing or blind or have low vision. The Department 
is thus convinced that regulation is warranted at this time to 
explicitly require movie theaters to exhibit movies with closed 
captioning and audio description at all times and for all showings 
whenever movies are produced, distributed, or otherwise made available 
with captioning and audio description, unless to do so would result in 
an undue burden or fundamental alteration. This proposed regulation is 
necessary in order to achieve the goals and promise of the ADA.
b. Summary of Objectives of, and Legal Basis for, the Proposed 
Regulation
    The proposed rule for captioning and audio description rests on the 
existing obligation of title III-covered facilities--such as movie 
theaters--to ensure that persons with disabilities receive ``full and 
equal enjoyment'' of their respective goods and services, including, as 
needed, the provision of auxiliary aids and services for persons who 
are deaf or hard of hearing or blind or have low vision. The proposed 
rule states that a movie theater owner or operator is required to 
exhibit movies with closed captioning and audio description for all 
screenings so long as the movie has been produced by the movie studio 
or distributor with captioning or audio description (unless doing so 
would result in an undue burden or fundamental alteration). The 
proposed rule imposes no independent obligation on movie theaters to 
provide captions and audio description if the movie is not available 
with these features.
    The Department expects that implementation of the proposed rule 
will lead to consistent levels of accessibility in movie theaters 
across the country, and that patrons who are deaf or hard of hearing or 
blind or have low vision will be able to use captioning or audio 
description equipment to better understand movies being exhibited in 
movies theaters.
    The legal basis for the Department's proposed regulation--discussed 
at length in other parts of this preamble (see section II.B, supra)--
rests on both title III of the ADA and its existing implementing 
regulation. Title III prohibits public accommodations, which, by 
statutory definition, include movie theaters, from discriminating 
against any individual on the basis of disability in the full and equal 
enjoyment of their goods and services. 42 U.S.C. 12182(a). Further, of 
particular import to the proposed regulation, title III also requires 
public accommodations to take whatever affirmative steps may be 
necessary ``to ensure that no individual with a disability is excluded, 
denied services, segregated or otherwise treated differently * * * 
because of the absence of auxiliary aids and services'' absent a 
showing of fundamental alteration or undue burden by such public 
accommodation. 42 U.S.C. 12182(b)(2)(A)(iii).
    The Department's recently-revised title III regulation reiterates 
these statutory requirements--which were first incorporated into the 
implementing regulation in 1991--and emphasizes that the overarching 
obligation of a public accommodation is to ensure effective 
communication with individuals with disabilities through the provision 
of necessary auxiliary aids and services. 28 CFR 36.303(c). While the 
type of auxiliary aid or service necessary to ensure effective 
communication depends on several factors, including the method of 
communication used by the individual and the communication involved, 
closed captioning and audio recordings are specifically referenced as 
aids or services contemplated by the rule. 28 CFR 36.303(b)(1), (2). 
Here, in the context of movie screenings at movie theaters, captioning 
is the only auxiliary aid presently available that effectively 
communicates the dialogue and sounds in a movie to individuals who are 
deaf or whose hearing impairments otherwise preclude effective use of 
assistive listening systems.\46\ Likewise,

[[Page 45005]]

for individuals who are blind or who have low vision, the only 
auxiliary aid presently available that effectively communicates the 
visual components of a movie is audio description.
---------------------------------------------------------------------------

    \46\ Proposed Sec.  36.303(g)(2)(ii) states that ``[m]ovie 
theaters may meet their obligation to provide captions to persons 
with disabilities through use of a different technology, such as 
open movie captioning, so long as the communication provided is as 
effective as that provided to movie patrons without disabilities.'' 
This provision will allow theaters the option to choose newer and 
more cost effective technologies to provide effective communication 
to movie patrons, if such technologies are developed in the future.
---------------------------------------------------------------------------

c. Estimated Number and Type of Small Entities in the Movie Exhibition 
Industry
    The Regulatory Flexibility Act defines a ``small entity'' as a 
small business (as defined by the Small Business Administration Size 
Standards) or a small organization such as a nonprofit that is 
``independently owned and operated'' and is ``not dominant in its 
field.'' 5 U.S.C. 601(6); see id. 601(3) and (4); 15 U.S.C. 632. For 
motion picture theaters (North American Industry Classification System 
Code 512131), small businesses constitute the vast majority of firms in 
the industry. The current size standard for a small movie theater 
business is $35.5 million dollars in annual revenue.\47\ In 2007, the 
latest year for which detailed breakouts by industry and annual revenue 
are available, approximately 98 percent of movie theater firms met the 
standard for small business, and these firms managed approximately 53 
percent of movie theater establishments. Data from the 2007 Economic 
Census, prepared for the Small Business Administration (SBA) and 
downloaded from its Web site, report that 2,004 movie theater firms 
operated 4,801 establishments that year; of those 2,004 movie theater 
firms, approximately 1,965 would meet the current SBA standard for a 
small business.\48\ These 1,965 firms operated 2,566 establishments.
---------------------------------------------------------------------------

    \47\ The size standard of $35.5 million can be found in U.S. 
Small Business Administration, Table of Small Business Size 
Standards Matched to North American Industry Classification System 
Codes at 28, available at http://www.sba.gov/sites/default/files/files/Size_Standards_Table.pdf (last visited July 14, 2014).
    \48\ Data taken from Excel file ``static--us'' downloaded from 
SBA Web site for ``Firm Size Data,'' available at http://www.sba.gov/advocacy/849/12162 (last visited July 14, 2014). 
Calculations were also performed using a dataset from the Census 
Bureau's American FactFinder. See http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml (last visited July 14, 2014). Both 
datasets are derived from the 2007 Economic Census, but differ 
slightly.

                                                  Distribution of Movie Theater Firms, by Revenue, 2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    Number of       Firms as % of   Cumulative total  Establishments %  Cumulative total
                                               Number of firms   establishments         total              (%)            of total             (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total Firms.................................             2,004             4,801               100  ................               100  ................
Firms with sales/receipts/revenue less than                333               333              16.6              16.6               6.9               6.9
 $100,000...................................
Firms with sales/receipts/revenue of                       703               712              35.1              51.7              14.8              21.8
 $100,000 to $499,999.......................
Firms with sales/receipts/revenue of                       318               339              15.9              67.6               7.1              28.8
 $500,000 to $999,999.......................
Firms with sales/receipts/revenue of                       386               472              19.3              86.8               9.8              38.7
 $1,000,000 to $2,499,999...................
Firms with sales/receipts/revenue of                       109               197               5.4              92.3               4.1              42.8
 $2,500,000 to $4,999,999...................
Firms with sales/receipts/revenue of                        40                99               2.0              94.3               2.1              44.8
 $5,000,000 to $7,499,999...................
Firms with sales/receipts/revenue of                        24                60               1.2              95.5               1.2              46.1
 $7,500,000 to $9,999,999...................
Firms with sales/receipts/revenue of                        23               106               1.1              96.6               2.2              48.3
 $10,000,000 to $14,999,999.................
Firms with sales/receipts/revenue of                        13               105               0.6              97.3               2.2              50.5
 $15,000,000 to $19,999,999.................
Firms with sales/receipts/revenue of                         6                50               0.3              97.6               1.0              51.5
 $20,000,000 to $24,999,999.................
Firms with sales/receipts/revenue of                         8                79               0.4              98.0               1.6              53.2
 $25,000,000 to $29,999,999.................
Firms with sales/receipts/revenue of                         2                14               0.1              98.1               0.3              53.4
 $30,000,000 to $34,999,999.................
Firms with sales/receipts/revenue of                        39             2,235               1.9             100.0              46.6             100.0
 $35,000,000+*..............................
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Firms with sale/receipts/revenue of higher than $35,500,000 are not considered small businesses under SBA size standards. The SBA database presents
  data for these firms in six categories, which have been consolidated into one for this table.
Source: Number of firms and number of establishments from Small Business Administration, Statistics of U.S. Businesses, Business Dynamics Statistics,
  Business Employment Dynamics, and Nonemployer Statistics. http://www.sba.gov/advocacy/849/12162 (last visited July 14, 2014). Downloaded from SBA Web
  site December 2013.

[[Page 45006]]

    As part of a larger movement within the film producing industry, 
nearly all (if not all) film production is moving to digital, and the 
vast majority of, if not nearly all, movie theaters likely will convert 
to the digital format. Because of the cost of transitioning to digital, 
large firms are more likely to have already converted to digital, or 
plan to do so soon. For these same reasons, analog theaters are more 
likely to be small businesses. At the same time, per screen costs of 
captioning equipment are significantly higher for analog theaters than 
for digital theaters.
    While the first movie theaters were facilities with a single screen 
and auditorium, in recent years larger facilities are being built, some 
with a dozen or more auditoriums and screens each capable of showing 
movies at the same time. Yet, at this time, many single screen theaters 
remain open. The Initial RA prepared detailed costs estimates, over 
time, using four theater size categories based on data presented by the 
MPAA. To estimate the costs to small businesses, this IRFA examined the 
percentages of small businesses and the distribution of theaters and 
screens by theater size type, and made estimations regarding the likely 
prevalence of small businesses among each size type (see the table 
below). No Megaplexes are expected to be small businesses.

                          Theaters by Type and Estimated Prevalence of Small Businesses
----------------------------------------------------------------------------------------------------------------
                                        Projected
                                        number of     Annual growth
            Theater type               theaters in   rate (percent)         Likelihood of small businesses
                                          2015
----------------------------------------------------------------------------------------------------------------
Megaplex--16+ screens..............             718             2.0  No small businesses.
Multiplex--8-15 screens............           1,893             2.0  Some small businesses.
Miniplex--2-7 screens..............           1,500            -4.2  Many small businesses.
Single Screen--1 screen............             996            -4.2  Nearly all small businesses.
                                    ----------------------------------------------------------------------------
    Total..........................           5,107
----------------------------------------------------------------------------------------------------------------
Source: Estimated using data for 2008-2012 as in MPAA, Theatrical Market Statistics (2012), available at http://www.mpaa.org/wp-content/uploads/2014/03/2012-Theatrical-Market-Statistics-Report.pdf (last visited July 14,
  2014).

                          Estimates of Digital and Analog Theaters and Screens in 2015
----------------------------------------------------------------------------------------------------------------
                                                     Number of       Number of       Number of
                                                      digital         digital         analog         Number of
                                                     theaters         screens        theaters     analog screens
----------------------------------------------------------------------------------------------------------------
Megaplex--16+ screens...........................             718          12,924               0               0
Multiplex--8-15 screens.........................           1,893          20,823               0               0
Miniplex--2-7 screens...........................             452           1,807           1,048           4,192
Single Screen--1 screen.........................             300             300             696             696
                                                 ---------------------------------------------------------------
    Total.......................................           3,363          35,854           1,744           4,888
----------------------------------------------------------------------------------------------------------------

    The proposed rule does not apply different requirements to firms by 
size. It does, however, seek public comment on two options for theaters 
with analog screens. Option 1 would delay the compliance date for 
analog screens for four years after publication of the final rule. 
Option 2 would defer rulemaking altogether for analog screens until a 
later date. As stated previously, the vast majority of theaters with 
analog screens are small businesses, and the Department believes that 
both of the options for analog screens under consideration in the 
proposed rule will result in fewer burdens on small movie theater 
businesses with analog screens. While this small business assessment 
necessarily draws on the Initial RA's ``main'' cost model, it also 
incorporates data specific to small businesses. As required by the 
Regulatory Flexibility Act,\49\ the cost model underlying the Initial 
RA's small business assessment uses SBA-defined small business size 
standards.\50\ A dataset downloaded from SBA's Web site presents data 
for 18 different revenue size categories (12 of those categories for 
firms with estimated annual receipts of less than the $35.5 million 
size standard for a small firm in this industry). These 18 revenue size 
categories were consolidated into four categories, with the following 
three meeting the SBA size standard for a small business: Firms with 
sales/receipts/revenue of (a) $499,999 and under; (b) $500,000-
$4,999,999; and (c) $5,000,000-$35,500,000. One of the 18 revenue 
categories in the SBA dataset (firms with sales/receipts/revenue of 
$30,000,000-$34,999,999) had only two firms included. To prevent the 
release of proprietary financial information, the SBA dataset only 
includes the number of firms and their establishments in this category; 
it does not include any information on sales, receipts or revenues. 
Therefore, while the estimate of the total number of small businesses 
that could be impacted by the proposed rule includes these two firms, 
the calculations for costs of compliance by revenue category do not.
---------------------------------------------------------------------------

    \49\ See 5 U.S.C. 601 et seq.
    \50\ The Small Business Size Regulations can be found at 13 CFR 
part 121.
---------------------------------------------------------------------------

Question 18a: Numbers of Small Businesses
    The Department is interested in receiving comments and data on all 
of the assumptions regarding the numbers of small entities impacted by 
this regulation, particularly on the numbers of small entities that 
have digital or analog screens (or both), the number of screens in each 
theater, the type of movies shown at these theatres (first-run 
commercial films, independent films, etc.), and the type of captioning 
equipment and devices these theatres already have. The Department is 
particularly interested in data regarding small analog theatres, such 
as the availability of analog film prints, the availability of movies 
with captions and audio description (in both analog and digital 
formats), the rate at which small theatres are converting to digital 
cinema, and the economic viability of

[[Page 45007]]

both small analog and small digital theatres. The Department would also 
be interested in data on the number of analog and digital theaters by 
theater type and annual receipts. Finally, the Department is interested 
in whether and to what extent small analog and small digital theaters 
are participating in certain cost-sharing programs to help convert 
theaters to digital technology, such as a virtual print fee (VPF) 
program. If they are not participating in such cost-sharing programs, 
why not? (See Question 1 for additional questions about analog 
theatres).
Question 18b: Numbers of Small Nonprofit Entities
    The Department seeks comment and data on small nonprofits that 
operate theatres that would be covered by this proposed rule, 
particularly on the number of small entities in this category, and the 
potential costs and economic impacts of the proposed rule. Should the 
Department adopt a different compliance schedule for these theaters?
d. Estimated Cost of Compliance for Small Entities \51\
---------------------------------------------------------------------------

    \51\ This estimate of costs for small businesses assumes that 
the Department would proceed under Option 1 (four-year compliance 
date for analog screens). If the Department decides to adopt Option 
2 for the final rule and defer application of the requirements of 
the rule for analog screens, the costs for small businesses will be 
significantly less because the rule will only apply to small 
business digital theaters.
---------------------------------------------------------------------------

    The SBA/U.S. Economic Census data was incorporated into the Initial 
RA's estimation for impacts on small businesses. First, receipt data 
was used to develop assumptions regarding the distribution of ``small 
businesses'' among the four theater size types. The assignment of 
theater size type is critical to the estimation because it determines 
the number of screens and, therefore, total costs per establishment.
    Using the Initial RA cost model estimation of the number of 
theaters by size type in 2015, the IRFA distributed the number of 
establishments of small business movie theater firms beginning with all 
Single Screen establishments and then applied the remaining portion to 
Miniplex and Multiplex establishments.

                      2015 Distribution of Theaters
                           [Model projection]
------------------------------------------------------------------------
                                             Number of
            Theater size type                theaters       Percentage
------------------------------------------------------------------------
Megaplex................................             718            14.1
Multiplex...............................           1,893            37.1
Miniplex................................           1,500            29.4
Single Screen...........................             996            19.5
                                         -------------------------------
    Total...............................           5,107             100
------------------------------------------------------------------------

    For this distribution, Single Screen theaters made up 89.6 percent 
of establishments in the smallest revenue category. The remaining 
establishments in this category were assumed to be Miniplexes. All of 
the establishments with receipts between $500,000 and $4,999,999 were 
assumed to be Miniplex theaters. After allocating those theaters, the 
remaining Miniplex theaters estimated for 2015 were distributed to the 
largest revenue category. Because there were more theaters in the 
largest revenue category than the remaining estimated Miniplex 
theaters, the other theaters in this revenue category were assumed to 
be all Multiplexes (approximately 41 percent). These distributions are 
summarized below. These distributions were then used to estimate the 
average cost per firm in each of the three consolidated small business 
revenue  categories.
---------------------------------------------------------------------------

    \52\ The distribution is slightly different using the dataset 
from American FactFinder: For firms with revenue $499,999 and under, 
100 percent were assumed to be Single Screen; for those with revenue 
$500,000-$4,999,999, 7 percent were Single Screens and 93 percent 
Miniplexes; for those with revenue $25,000,000 to $35,500,000, 79 
percent were Miniplexes and 21 percent Multiplexes.

    Distribution of Theater Size Type for Consolidated Revenue Groups
------------------------------------------------------------------------
      Consolidated revenue group \52\             Theater size type
------------------------------------------------------------------------
$499,999 and under........................  89.6% Single Screen, 10.4%
                                             Miniplexes.
$500,000-$4,999,999.......................  100% Miniplexes.
$5,000,000 to $35,500,000.................  58.8% Miniplexes; 41.2%
                                             Multiplexes.
------------------------------------------------------------------------

                        Theater Equipment Requirements Based on Scoping and Theater Size
----------------------------------------------------------------------------------------------------------------
                                                                Megaplex    Multiplex     Miniplex
                          Equipment                             Avg: 18      Avg: 11       Avg: 4       Single
                                                                screens      screens      screens       screen
----------------------------------------------------------------------------------------------------------------
Captioning Hardware and Devices:
    Captioning Hardware Needed..............................           18           11            4            1
    Captioning Devices Needed...............................           34           28           12            4
Descriptive Listening Hardware and Devices:
    Audio Hardware Needed...................................           18           11            4            1
    Audio Devices Needed....................................           18           11            4            2
----------------------------------------------------------------------------------------------------------------

    Using the average costs per theater developed in the Initial RA, we 
were able to calculate the average costs per theater and per firm for 
the three consolidated revenue groups ($499,999 and under; $500,000-
$4,999,999; and $5,000,000-$35,500,000). Costs were first calculated on 
a per-establishment basis, and then using the average number of 
establishments per firm for each of the three consolidated revenue 
groups, translated into an average per

[[Page 45008]]

firm cost. This cost was then compared to the average receipts per firm 
for that consolidated revenue group.
    The resulting ratio of average costs to average receipts ranges 
from a low of 0.7 percent (for digital firms with revenues of 
$5,000,000 to $35,500,000) to a high of 5.7 percent (for analog firms 
with revenues of $499,999 or less). The impact on firms with digital 
projection is comparatively smaller than the impact on firms 
maintaining analog projection. The ratio of average costs/receipts is 
estimated to range from 0.7 percent to 2.1 percent for all movie 
theater companies using digital systems. In contrast, the same ratio 
ranges from 2.0 percent to 5.7 percent for all firms using analog 
projection.

                           Estimation of Costs for Small Movie Theaters, by Firm Size, Based on 2015 Size/Revenue Distribution
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    Firms $499,999 and                                          Firms $5,000,000 to
                              Cost                                        under            Firms $500,000 to $4,999,999           $35,500,000 **
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                         Digital
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average receipts per firm *....................................     $188,384 to $201,973        $1,471,549 to $1,484,995       $9,705,377 to $12,437,259
Average cost per theater *.....................................         $3,198 to $3,966              $10,063 to $10,586              $13,984 to $17,281
Average cost per firm *........................................         $3,233 to $3,992             $12, 539 to $14,454             $81,176 to $103,309
Ratio of average cost/receipts *...............................             1.6% to 2.1%                    0.8% to 1.0%                    0.7% to 1.1%
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                         Analog
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average receipts per firm *....................................     $188,384 to $201,973        $1,471,549 to $1,484,995       $9,705,377 to $12,437,259
Average cost per theater *.....................................        $8,172 to $10,638              $30,204 to $31,884              $43,449 to $54,673
Average cost per firm *........................................        $8,263 to $10,706              $37,638 to $43,534            $252,224 to $326,844
Ratio of average cost/receipts *...............................             4.1% to 5.7%                    2.5% to 3.0%                    2.0% to 3.4%
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The ranges represent the figures calculated using the two datasets created from data from the 2007 Economic Census, which breaks out data by revenue
  category (downloaded from SBA's Web site (http://www.sba.gov) and the Census Bureau's American FactFinder Web site (http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml), respectively), but which differ slightly. Note that the composition of theater size types also varies per revenue
  group depending on the dataset used, and therefore the average cost per theater varies as well.
** Note that the calculations for this category using the dataset downloaded from the SBA Web site do not include any data for the two firms in the
  revenue category for firms with sales/receipts/revenue of $30,000,000-$34,999,999 because no data on annual receipts for those two firms was included.
  The dataset downloaded from American FactFinder had different revenue categories from those downloaded from SBA's Web site. To estimate those firms
  meeting the SBA size standards using the dataset downloaded from the American FactFinder Web site, all the firms with revenues less than $25 million,
  and half of those with revenues from $25,000,000 to $49,999,999 were counted as a way of estimating the number of entities that fall under $35.5
  million within that revenue category.

    Average capital costs per theater type were estimated by 
multiplying the number of screens by the required analog or digital 
equipment and the scoped number of devices. These average costs are 
presented below.

                                                                Estimated Average Receipts and Costs per Firm, Digital and Analog
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                              Digital                                                         Analog
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                     Ratio of                                                        Ratio of
                                                                      Average      Average cost    Average cost    average cost/      Average      Average cost    Average cost   average  cost/
                        Size of firms ($)                          receipts per     per theater      per firm        receipts      receipts per     per theater      per firm        receipts
                                                                       firm                                          (percent)         firm                                          (percent)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Less than $100,000..............................................         $52,264          $3,198          $3,198             6.1         $52,264          $8,172          $8,172            15.6
$100,000-499,000................................................         252,862           4,326           4,381             1.7         252,862          11,791          11,942             4.7
$500,000-999,000................................................         711,456          10,586          11,285             1.6         711,456          31,884          33,990             4.8
$1,000,000-2,499,000............................................       1,581,824          10,586          12,945             0.8       1,581,824          31,884          38,988             2.5
$2,500,000-4,999,000............................................       3,298,550          10,586          19,132             0.6       3,298,550          31,884          57,625             1.7
$5,000,000-7,499,000............................................       5,888,575          10,586          26,200             0.4       5,888,575          31,884          78,913             1.3
$7,500,000-9,999,000............................................       7,954,042          10,586          26,465             0.3       7,954,042          31,884          79,710             1.0
$10,000,000-14,999,000..........................................       9,927,478          10,586          48,788             0.5       9,927,478          31,884         146,944             1.5
$15,000,000-19,999,000..........................................      14,045,000          22,436         181,213             1.3      14,045,000          72,219         583,306             4.2
$20,000,000-24,999,000..........................................      16,288,167          26,839         223,658             1.4      16,288,167          87,206         726,717             4.5
$25,000,000-29,999,000..........................................      21,415,875          26,839         265,035             1.2      21,415,875          87,206         861,159             4.0
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Based on data from Small Business Administration, Statistics of U.S. Businesses, Business Dynamics Statistics, Business Employment Dynamics, and Nonemployer Statistics, available at http://www.sba.gov/advocacy/849/12162 (data downloaded Dec. 2013). See Table 38 in the Initial Regulatory Assessment and Initial Regulatory Flexibility Analysis (available at http://www.ada.gov)
  for more information on how the figures in this table were calculated.

                                                         Digital Captioning Equipment Unit Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                      Digital audio
                                                         Digital captioning       Digital captioning         Digital audio        description individual
                     Technology                          hardware cost (one    individual device costs    description hardware    device costs (multiple
                                                         needed per screen)     (multiple per screen/     cost (one needed per   per screen/ theater may
                                                                                theater may be needed)          screen)                 be needed)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Doremi's CaptiView..................................                     $690                     $430                     $625                     $125
USL.................................................                    1,057                      479                        0                       69
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 45009]]

                                                         Analog Captioning Equipment Unit Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                            Analog captioning device                            Analog audio description
                                                      Analog captioning        costs (multiple per    Analog audio description   device costs (multiple
                   Technology                      hardware cost (one per    screen/ theater may be    hardware cost (one per    per screen/ theater may
                                                       screen needed)                needed)               screen needed)              be needed)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Rear Window \53\................................                   $7,113                       $95                      $467                      $106
--------------------------------------------------------------------------------------------------------------------------------------------------------

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

    \53\ The hardware required for Rear Window technology includes a 
LED display necessary to show captions in each analog projection 
auditorium, a Datasat/DTS XD20 interface, and individual Reflectors 
that are used by patrons. The cost for the LED display ranges from 
$2,850 to $3,975, depending on whether it is a 2- or 3-line display 
(a 2-line display is recommended); the LED display cost used in 
Regulatory Analysis is an average of the cost of the two sizes of 
display. The Datasat/DTS XD20 interface, which is an interface 
connecting the Rear Window LED display to the theater system, costs 
about $4,200 per auditorium. The only device for individual use is 
the Rear Window Reflector, which fits into cup holders and costs $95 
each. (Note: all these prices are taken from the ``Rear 
Window[supreg] Captioning (RWC) Components Cost Overview'' released 
by Median Access Group at WGBH August 2010, and adjusted for the 
fact that licensing fees are no longer required.) For audio 
description, the Williams Sound Audio System is compatible with 
analog captioning systems and was used to estimate video description 
equipment costs for analog systems. The Williams Sound Audio System 
requires an audio transmitter for each auditorium, which costs $467. 
Patrons may use a receiver and a headset, which cost $88 and $18, 
respectively.

     Average per Establishment Costs of Purchasing Digital Closed Captioning and Audio Description Equipment
----------------------------------------------------------------------------------------------------------------
                                                                                                      Average
                    Cost per digital theater                          Doremi            USL        digital cost
----------------------------------------------------------------------------------------------------------------
Megaplex *......................................................         $40,540         $36,554         $38,547
Multiplex.......................................................          27,880          25,798          26,839
Miniplex........................................................          10,920          10,252          10,586
Single Screen...................................................           3,285           3,111           3,198
----------------------------------------------------------------------------------------------------------------
* Note that the Initial RA assumes that no small business firm has Megaplexes; this data is presented for
  informational purposes only, to help illustrate the differences in average costs per digital theaters by type.

 Average per Establishment Costs of Purchasing Analog Closed Captioning
                     and Audio Description Equipment
------------------------------------------------------------------------
              Cost per analog theater \54\                  Rear window
------------------------------------------------------------------------
Megaplex................................................              **
Multiplex...............................................              **
Miniplex................................................         $31,884
Single Screen...........................................          $8,172
------------------------------------------------------------------------
** Note that the Initial RA assumes that all Megaplexes and Multiplexes
  have transitioned to digital projection systems by the time this rule
  goes into effect.

Question 19: Small Business Compliance Costs
    The Department seeks comment and data on the small business 
compliance cost estimates, including the costs associated with 
procuring and maintaining digital and analog equipment, the 
availability of this equipment, estimates of the average cost of this 
proposed rule by establishment and firm, and the ratio of average costs 
of this proposed rule to firm receipts. The Department is interested in 
comment on whether small theaters will incur higher prices in the 
purchase and installation of this equipment due to the lower volume 
needed. The Department also seeks public comment on its proposed 
scoping for individual captioning devices. Should the Department 
consider approaching scoping differently for small theatres? How so and 
why? (Please see Question 10 for additional questions about scoping for 
captioning devices). How many devices capable of transmitting audio 
description to individuals should each movie theater have on hand for 
use by patrons who are blind or have low vision? (Please see Question 
12 for additional questions about scoping for audio description). Do 
small theaters face any additional costs not already included in these 
cost estimates? The Department seeks comment and data on what, if any, 
particular requirement of this rule would cause a small business to 
claim that it is an undue burden to comply with the requirements of 
this proposed rule.
---------------------------------------------------------------------------

    \54\ Note that in the main Initial RA, all of the Megaplexes and 
Multiplexes are assumed to have converted to digital projection. 
This assumption was made because NATO had estimated at a 
Congressional hearing in May 2013 that 88 percent of screens in the 
nation now have digital projection, making it very unlikely that any 
large theater complex remains analog. If any Megaplexes and/or 
Multiplexes stayed with analog projection, their average costs for 
purchasing analog closed captioning and audio description equipment 
would be $141,578 and $87,206, respectively.
---------------------------------------------------------------------------

e. Projected Reporting, Record-Keeping Requirements and Other 
Compliance Requirements of the Rule
    As noted below in section VI.F, discussing the Paperwork Reduction 
Act, the proposed regulation imposes no reporting or record-keeping 
requirements on any movie theaters regardless of size. The Department 
acknowledges that there may be other compliance-related administrative 
costs incurred by all movie theaters--including small entities--as a 
result of the proposed regulation, including such tasks as having 
theater staff keep track of individual captioning devices or audio 
description headsets. However, such compliance costs are expected to be 
neither disproportionately borne by small entities nor significant. The 
proposed scoping requirements for individual captioning devices are 
directly proportional to total seat count or screen. The proposed 
scoping for individual audio-description devices is minimal and only 
applies to those theaters that do not currently have assistive 
listening receivers with at least two channels. Thus, smaller movie 
theaters (such as Miniplexes and Single Screen Theaters) necessarily 
would have relatively few pieces of required captioning and audio 
description equipment to inventory and maintain. Moreover, any costs 
related to such administrative tasks are expected to be minimal. The 
Department has also asked whether it should take a different approach 
to scoping for individual captioning devices for small theaters.
    The rule will require that at least one person at the theater be 
able to provide

[[Page 45010]]

patrons with captioning and audio description and direct patrons on the 
equipment's use. This requirement can most easily be met by expanding 
the training for those persons who will already be required to be on-
site to manage or oversee overall operations and the start of the 
exhibition of the movies. In addition, theaters already provide staff 
to distribute assistive listening devices when requested by patrons and 
to direct patrons on how to use those devices. It is reasonable to 
assume that the same staff member would provide assistance with 
captioning and audio description devices as well. A separate staff with 
ADA expertise is not required. The costs of this part of the rule will 
include any additional training time and any time spent providing and 
collecting devices and demonstrating their use, if needed.
    The Initial RA uses a value equivalent to 3 percent of all the 
captioning and audio description equipment owned by the theater to 
capture the afore-discussed minimal operations and maintenance cost and 
incremental increase to staff time; costs of adding information that 
captioning or audio description is available when preparing 
communications regarding movie offerings, and other potential increases 
in administrative costs. This 3 percent is a factor commonly used in 
construction and equipment maintenance. See, e.g., Final Regulatory 
Impact Analysis of the Proposed Revised Regulations Implementing Titles 
II and III of the ADA, Including Revised ADA Standards for Accessible 
Design: Supplemental Results (Sept. 15, 2010), available at http://www.ada.gov/regs2010/RIA_2010regs/ria_supp.htm (last visited July 14, 
2014).\55\ The Department expects that annual operations, maintenance, 
and training costs for analog theaters are estimated to average from a 
low of $245 for Single Screens to a high of $957 for Miniplexes; for 
digital theaters' operations, maintenance and training costs are 
estimated to average from a low of $96 for Single Screens to a high of 
$1,156 for Megaplexes.\56\
---------------------------------------------------------------------------

    \55\ See id. app. I: Operations and Maintenance, for more 
information on standard operations and maintenance costs, and the 
sources from which those were derived.
    \56\ See the Initial RA, Section 7 for the Sensitivity Analysis 
with two alternative rates--5 percent and 8 percent--for calculating 
operations and maintenance costs.
---------------------------------------------------------------------------

Question 20: Other Costs for Small Businesses
    The Department invites comment on the estimation of operation and 
maintenance costs for this proposed rule, which include administrative 
costs to keep track of equipment, staff training and availability (see 
Question 15 for additional questions related to staff training), 
maintenance and replacement of captioning and audio description 
hardware and individual devices, and the notice requirement (see 
Questions 14 and 16 for additional questions about the notice 
requirement). The Department is particularly interested in receiving 
comments about the costs and frequency of replacing captioning and 
audio description equipment. Are there other compliance costs, such as 
regulatory familiarization, that should be included in this small 
business analysis?
f. Duplicative or Overlapping Federal Rules
    The Department is not aware of any existing federal regulations 
that impose duplicative, overlapping, or conflicting requirements 
relative to the requirements in the proposed movie captioning and audio 
description regulation.
g. Discussion of Significant Regulatory Alternatives That Minimize 
Impact on Small Entities
    In crafting this proposed regulation for movie captioning and audio 
description, the Department has taken care to propose requirements that 
temper effectiveness with cost considerations. That is, while the 
Department believes this regulatory action is required to support and 
enforce the ADA's effective communication mandate, the proposed 
requirements also are intended to regulate in a manner that is cost-
efficient, easily understood by the movie exhibition industry, and--to 
the greatest extent possible--minimizes the economic impact on small 
entities.
    As detailed earlier in this preamble (see section IV, Section-by-
Section Analysis, ``Movie Captioning--Coverage, supra), the Department 
is proposing that all movie theaters covered by the rule, regardless of 
size, location, or type of movies exhibited, must exhibit captioned or 
audio-described movies (when available) for all screenings absent a 
showing of undue burden. Only such an across-the-board requirement 
fulfills the effective communication objective by permitting 
individuals who are deaf or hard of hearing or blind or have low vision 
disabilities to fully and equally participate in one of the most 
quintessential forms of American entertainment--going out to the 
movies--in the same manner as the rest of the movie going public.
    Yet, while the proposed regulation imposes captioning and audio 
description requirements on all movie theaters irrespective of size, 
there are nonetheless several provisions that serve to ameliorate their 
relative economic impact on small entities. For example, the 
Department's regulatory proposal:
     Proposes two alternatives for theaters with analog 
screens: A four-year delayed compliance date (Option 1), or deferral of 
the requirements of this proposed rule for analog screens (Option 2);
     Establishes performance (rather than design) standards 
that enable small entities (as well as other movie theaters) to meet 
their captioning requirements in a flexible and cost-effective manner 
(Sec.  36.303(g)(2)(i));
     Specifies scoping requirements for individual captioning 
devices that are proportional to a theater's total seat count (i.e., 
fewer seats means fewer devices are required), thereby ensuring that 
small theaters have reduced device costs (Sec.  36.303(g)(2)(iii)(A), 
(g)(3)(ii));
     Specifies a minimal number of individual audio-description 
listening devices that must be provided by a theater and permits 
``overlap'' of scoping for audio-description listening devices and 
assistive listening headsets so long as such headsets are capable of 
receiving both types of audio signals (Sec.  36.303(g)(3)(ii)).
    Moreover, while not expressly referenced in the text of proposed 
Sec.  36.303(g), the Department has reiterated--at several points in 
this preamble--that those movie theaters that find that it is a 
significant difficulty or expense to comply with the requirements of 
this regulation will be able to assert the ``undue burden defense'' 
(see section II.B.2 supra, for an explanation of the factors that 
should be considered in asserting the defense). Throughout the last two 
decades, even without this regulation, movie theaters have been able to 
assert this defense when facing litigation alleging failure to provide 
effective communication to patrons with disabilities. Thus, while a 
large movie theater trade association suggested that many--if not 
most--small theaters would be forced out of business unless exempted 
entirely from any captioning requirements, the Department believes that 
such dire predictions are misplaced.\57\ The

[[Page 45011]]

``undue burden'' defense serves as a limit should there be regulatory 
compliance costs that under particular circumstances would impose 
significant difficulty or expense. Where the costs of screening closed-
captioned or audio-described movies in compliance with the proposed 
regulation are sufficiently burdensome as to place a small theater at 
financial risk, then such costs would--by definition--pose an ``undue 
burden.'' Such a movie theater would then be entitled to provide 
alternate compliance measures for auxiliary aids or services (if any) 
that were affordable in light of its particular circumstances.
---------------------------------------------------------------------------

    \57\ While the number of public comments received in response to 
the 2010 ANPRM was extraordinary, there were relatively few comments 
that specifically addressed the impact of captioning requirements on 
small theaters. No comments were received from representatives of 
independent movie theaters or from individual small (indoor) movie 
theater operators other than representatives of drive-in theaters 
(which are not covered by this rule). The referenced comment from 
the movie theater trade association is the only comment by 
representatives of the theatrical or movie exhibition industry to 
address the potential impact of the captioning regulation on small 
theaters affected by this rule.
---------------------------------------------------------------------------

    Taken together, the foregoing considerations demonstrate the 
Department's sensitivity to the potential economic (cost) impact of the 
proposed regulation on small theaters (such as Miniplexes and Single 
Screen Theaters) and--to the extent consistent with the ADA--mitigate 
potential compliance costs.
    In addition, the Department considered multiple alternatives for 
this rulemaking with a focus on choosing the alternative that best 
balances the requirements of the ADA with the potential costs to small 
business movie theaters. Among those alternatives weighed most heavily 
for the proposed rule are the two discussed below.
    Requiring only 50 percent of screens to have closed captioning and 
audio description. The Department considered a proposal limiting the 
requirement for closed captioning and audio description to only 50 
percent of movie screens. This alternative was discussed in the July 
26, 2010, ANPRM. The ADA requires places of public accommodation ``to 
ensure that no individual with a disability is excluded, denied 
services, segregated or otherwise treated differently than other 
individuals because of the absence of auxiliary aids and services, 
unless the entity can demonstrate that taking such steps would 
fundamentally alter the nature of the good, service, facility, 
privilege, advantage, or accommodation being offered or would result in 
an undue burden.'' 42 U.S.C. 12182(b)(2)(A)(iii). After considering 
public comment and additional research, the Department has determined 
that it is not possible for movie theaters to meet their ADA obligation 
to provide equally effective communication to patrons with hearing and 
vision disabilities unless they have the capacity to show the movies 
that are available with captions and audio description at all showings 
when those same movies are available to patrons without disabilities; 
to only require access to 50 percent of movies being shown would be 
inappropriate. Unless a movie theater showed every movie on two screens 
in comparable auditoriums at all times--one screen showing the 
captioned and audio-described version and the other showing the same 
movie without captions and audio description--the Department is 
concerned that a 50 percent requirement would regularly lead to the 
circumstance where a movie theater would have a captioned or audio 
described movie, but would have no screen available on which to show it 
because all the appropriately equipped auditoriums were otherwise in 
use.
    The Department considered whether it would be possible for movie 
theaters to meet their effective communication obligations by switching 
movies into auditoriums equipped to show movies with closed captions 
and audio description when a patron with a hearing or vision disability 
needed those accessibility features. But, the Department's research 
indicated that the business agreements regarding movie exhibitions 
limit this type of flexibility. Movie theaters regularly negotiate with 
film distributors regarding which auditoriums in a theater with more 
than one screen will show which films. Generally, if a film is expected 
to be very popular, it will open in the largest auditorium or in 
several auditoriums within the same complex. As the popularity 
decreases, the film will be moved from larger auditoriums to smaller 
auditoriums and from multiple auditoriums to a single auditorium. The 
timing of such moves will vary from theater to theater and from film to 
film.
    Those theaters that do have the flexibility to switch auditoriums 
upon request to provide closed captioning or audio description would 
have other added costs associated with changing the auditoriums for 
showings. Costs could include the additional employee time and 
resources needed to physically switch the movie from one auditorium to 
another, as well as potential lost ticket sales if a more popular movie 
is displaced into a much smaller theater that sells out faster. 
Additionally, switching auditoriums to allow use of captioning or audio 
description equipment may result in auditorium changes for other 
patrons after they had purchased tickets and are possibly already 
seated. This would result in an inconvenience to many patrons, 
including the possibility that the switch would result in a different 
viewing experience than expected when purchasing a ticket due to 
differing auditorium sizes and comfort levels.
    The Department also believes that this alternative would carry a 
much higher litigation risk. Patrons with disabilities would not have 
any way of assessing whether the failure to show a particular movie 
with closed captions and audio description was because the theater was 
failing to comply with its obligations under the regulation to provide 
these auxiliary aids and services or because that particular movie was 
not available with closed captions or audio description. Whether a 
theater had the capacity to move a film to accommodate a patron with a 
disability and should have done so upon request, or whether the theater 
did everything to meet its obligations under the regulation, would 
become murky and create confusion that could result in an increased 
risk of litigation.
    Finally, this alternative favors larger movie theaters and 
disadvantages single screen theaters, which are more likely to be small 
businesses. Under a 50 percent requirement, at least one auditorium at 
every theater must have closed captioning and audio description 
capabilities. Thus, single screen theaters would see no reduction in 
costs under this alternative.
    As such, the Department has rejected this alternative due to 
concerns that requiring only 50 percent of screens to have closed 
captioning and audio description capabilities would not comply with the 
ADA itself, that this approach would require substantial changes to the 
movie theater business model, that the initial perceptions that this 
approach would have substantially lower total costs are actually 
misleading, and that this approach would not address in any meaningful 
way the concerns for small business single screen theaters.
    Compliance by analog theaters required in two years. The Department 
considered providing theaters with analog screens two years after the 
rule's publication date to become compliant, as opposed to the six-
month compliance date provided for digital screens. This delay was 
considered for analog movie screens because such a large number of 
theaters are in the midst of transitioning to digital cinema, that 
additional time might be necessary. In addition, the delayed compliance 
date would have allowed small theaters that remain analog more time to 
obtain the necessary resources to purchase the equipment to provide 
closed captioning and audio description. The 15-year,

[[Page 45012]]

discounted costs for this alternative range from $189.4 million to 
$237.5 million under a 7 percent discount rate, which are higher than 
the total costs for the proposed rule.
    Upon review of the higher cost burden for firms still using analog 
projection, and with consultation from the Small Business 
Administration's Office of Advocacy, and as previously discussed, the 
Department is considering two alternative options for theaters with 
analog screens: (1) A four-year compliance date for theaters with 
analog screens (Option 1); or (2) deferring application of the 
requirements to analog screens until a later date (Option 2). In making 
the decision, the Department also took into consideration the fact that 
those movie theaters that have not yet made the transition to digital 
systems are more likely to be small businesses than those movie 
theaters that are already exhibiting in digital format. The Department 
also considered publicly available information that movie studios are 
in the process of phasing out analog film, and it is anticipated that 
by 2015, studios will not be producing analog prints of first run 
films. On the basis of this information, it appears likely that movie 
theaters that rely on first-run films for revenue will either convert 
to digital or go out of business before the four-year compliance date 
(sometime in 2018 or 2019), and thus there will actually be many fewer 
analog theaters that will need to comply with the rule if the 
Department proceeds under Option 1. If the Department proceeds under 
Option 2, there will be fewer small business theaters affected by the 
rule, because it will only apply to small business digital theaters.
Question 21a: Significant Alternatives for Small Analog Theaters Under 
the RFA
    Is the four-year compliance date in Option 1 reasonable for those 
screens that will remain analog? If not, why not? Should the Department 
adopt Option 2 and defer requiring theaters with analog screens to 
comply with the specific requirements of this rule? (See Questions 6 
and 8). 
Question 21b: Significant Alternatives for Small Digital Theaters Under 
the RFA
    Is the proposed six-month compliance date for digital screens a 
reasonable timeframe to comply with the rule? Is six months enough time 
to order, install, and gain familiarity with the necessary equipment; 
train staff so that they can meaningfully assist patrons; and meet the 
notice requirement of the proposed rule? If the proposed six-month date 
is not reasonable, what should the compliance date be and why? (See 
Question 7).
Question 21c: Other Significant Alternatives for Small Theaters Under 
the RFA
    The Department invites comment on ways to tailor this regulation to 
reduce unnecessary regulatory burdens on small businesses.\58\ For 
example: Should the Department have a different compliance schedule for 
digital or analog theaters that have annual receipts below a certain 
threshold? If so, what should the financial threshold be? (See Question 
6). The Department is also interested in receiving comment and data on 
the use of the undue burden defense by small businesses.
---------------------------------------------------------------------------

    \58\ See Memorandum for the Heads of Executive Departments and 
Agencies, Regulatory Flexibility, Small Business, and Job Creation, 
76 FR 3827 (Jan. 18, 2011).
---------------------------------------------------------------------------

C. Executive Order 13132: Federalism
    Executive Order 13132, 64 FR 43255 (Aug. 4, 1999), 3 CFR, 2000 
comp. at 206, requires executive branch agencies to consider whether a 
rule will have federalism implications. That is, the rulemaking agency 
must determine whether the rule is likely to have substantial direct 
effects on State and local governments, a substantial direct effect on 
the relationship between the Federal government and the States and 
localities, or a substantial direct effect on the distribution of power 
and responsibilities among the different levels of government. If an 
agency believes that a rule is likely to have federalism implications, 
it must consult with State and local elected officials about how to 
minimize or eliminate the effects. This proposed rule applies to public 
accommodations that exhibit movies for a fee that are covered by title 
III of the ADA. To the Department's knowledge there are no State or 
local codes that specifically address captioning and audio description. 
As a result, the Department has concluded that this proposed rule does 
not have federalism implications.

D. Plain Language Instructions

    The Department makes every effort to promote clarity and 
transparency in its rulemaking. In any regulation, there is a tension 
between drafting language that is simple and straightforward and 
drafting language that gives full effect to issues of legal 
interpretation. The Department operates a toll-free ADA Information 
Line (800) 514-0301 (voice); (800) 514-0383 (TTY) that the public is 
welcome to call to obtain assistance in understanding anything in this 
proposed rule. If any commenter has suggestions for how the regulation 
could be written more clearly, please submit those suggestions by any 
one of the following methods, making sure to identify this rulemaking 
by RIN 1190-AA63:
     Federal eRulemaking Web site: http://www.regulations.gov. 
Follow the Web site's instructions for submitting comments. The 
Regulations.gov Docket ID is DOJ-CRT-126.
     Regular U.S. mail: Disability Rights Section, Civil Rights 
Division, U.S. Department of Justice, P.O. Box 2885, Fairfax, VA 22031-
0885.
     Overnight, courier, or hand delivery: Disability Rights 
Section, Civil Rights Division, U.S. Department of Justice, 1425 New 
York Avenue NW., Suite 4039, Washington, DC 20005.

E. Paperwork Reduction Act

    Under the Paperwork Reduction Act (PRA), agencies are prohibited 
from conducting or sponsoring a ``collection of information'' as 
defined by the PRA unless in advance the agency has obtained an OMB 
control number. 44 U.S.C. 3507 et seq. This proposed rule does not 
propose any new or revisions to existing collections of information 
covered by the PRA.

F. Unfunded Mandates Reform Act

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

List of Subjects for 28 CFR Part 36

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

    By the authority vested in me as Attorney General by law, including 
28 U.S.C. 509 and 510, 5 U.S.C. 301, and section 306 of the Americans 
with Disabilities Act of 1990, Public Law 101-336 (42 U.S.C. 12186), 
and for the reasons set forth in the preamble, chapter I of title 28 of 
the Code of Federal Regulations is proposed to be amended as follows:

[[Page 45013]]

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

Subpart A--General

0
1. The authority citation for 28 CFR part 36 continues to read as 
follows:

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

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

Sec.  36.303  Auxiliary aids and services.

* * * * *
    (g) Movie Captioning and Audio Description.
    (1) Definitions. For the purposes of this paragraph--
    (i) Audio description means provision of a spoken narration of key 
visual elements of a visually delivered medium, including, but not 
limited to, actions, settings, facial expressions, costumes, and scene 
changes.
    (ii) Closed movie captioning means the written text of the movie 
dialogue and other sounds or sound making (e.g. sound effects, music, 
and the character who is speaking). Closed movie captioning is 
available only to individuals who request it. Generally, it requires 
the use of an individual captioning device to deliver the captions to 
the patron.
    (iii) Individual audio description listening device means the 
individual device that patrons may use at their seats to hear audio 
description.
    (iv) Individual captioning device means the individual device that 
patrons may use at their seats to view the closed captions.
    (v) Movie theater means a facility other than a drive-in theater 
that is used primarily for the purpose of showing movies to the public 
for a fee.
    (vi) Open movie captioning means the provision of the written text 
of the movie dialogue and other sounds or sound making in an on-screen 
text format that is seen by everyone in the movie theater.
    (2) Movie captioning. (i) A public accommodation that owns, leases, 
leases to, or operates a movie theater shall ensure that its 
auditoriums have the capability to exhibit movies with closed movie 
captions. In all cases where the movies it intends to exhibit are 
produced, distributed, or otherwise made available with closed movie 
captions, the public accommodation shall ensure that it acquires the 
captioned version of that movie. Movie theaters must then exhibit such 
movies with closed movie captions available at all scheduled screenings 
of those movies.
    (ii) Other technologies. Movie theaters may meet their obligation 
to provide captions to persons with disabilities through use of a 
different technology, such as open movie captioning, so long as the 
communication provided is as effective as that provided to movie 
patrons without disabilities. Open movie captioning at some or all 
showings of movies is never required as a means of compliance with this 
section, even if it is an undue burden for a theater to exhibit movies 
with closed movie captioning in an auditorium.
    (iii) Provision of individual captioning devices. (A) Subject to 
the compliance dates in paragraph (g)(4) of this section, a public 
accommodation that owns, leases, leases to, or operates a movie theater 
shall provide individual captioning devices in accordance with the 
following Table. This requirement does not apply to movie theaters that 
elect to exhibit all movies at all times at that facility with open 
movie captioning.

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

    (B) In order to provide effective communication, individual 
captioning devices must:
    (1) Be adjustable so that the captions can be viewed as if they are 
on or near the movie screen;
    (2) Be available to patrons in a timely manner;
    (3) Provide clear, sharp images in order to ensure readability; and
    (4) Be properly maintained and be easily usable by the patron.
    (3) Audio description. (i) A public accommodation that owns, 
leases, leases to, or operates a movie theater shall ensure that its 
auditoriums have the capability to exhibit movies with audio 
description. In all cases where the movies it intends to exhibit are 
produced, distributed, or otherwise made available with audio 
description, the public accommodation shall ensure that it acquires the 
version with audio description. Movie theaters must then exhibit such 
movies with audio description available at all scheduled screenings.
    (ii) Provision of individual audio-description listening devices. 
Subject to the compliance dates in paragraph (g)(4) of this section, a 
public accommodation that owns, leases, leases to, or operates a movie 
theater shall provide devices capable of transmitting audio description 
in accordance with one of the following:
    (A) A movie theater shall provide at least one individual audio-
description listening device per screen, except that no theater shall 
provide less than two devices.
    (B) A movie theater may comply with this requirement by using 
receivers it already has available as assistive listening devices in 
accordance with the requirements in Table 219.3 of the 2010 Standards, 
if those receivers have a minimum of two channels available for sound 
transmission to patrons.
    (4) Compliance date. (i) Digital movie screens. If a movie theater 
(as defined in this paragraph) has auditoriums with digital movie 
screens, those auditoriums must comply with the requirements in 
paragraph (g) of this section six months from the publication date of 
this rule in final form in the Federal Register. Once an analog movie 
screen has converted to digital cinema, it must comply with paragraph 
(g) within 6 months.
    Option 1 for paragraph (g)(4)(ii):
    (ii) Analog movie screens. If a movie theater (as defined in this 
paragraph) has auditoriums with analog movie screens, those auditoriums 
must comply with the requirements in paragraph (g) of this section four 
years from the publication date of this rule in final form in the 
Federal Register.
    Option 2 for paragraph (g)(4)(ii):
    (ii) Analog movie screens. Application of the requirements of 
paragraph (g) is deferred for analog movie screens but may be addressed 
in future rulemaking.

[[Page 45014]]

    (5) Notice. Subject to the compliance dates in paragraph (g)(4) of 
this section, movie theaters shall ensure that communications and 
advertisements intended to inform potential patrons of movie showings 
and times, that are provided by the theater through Web sites, posters, 
marquees, newspapers, telephone, and other forms of communications, 
shall provide information regarding the availability of captioning and 
audio description for each movie.
    (6) Subject to the compliance dates in paragraph (g)(4) of this 
section, movie theaters must ensure that there is at least one 
individual on location at each facility available to assist patrons 
seeking these services at all times when a captioned or audio-described 
movie is shown. Such assistance includes the ability to:
    (i) Operate all captioning and audio description equipment;
    (ii) Locate all necessary equipment that is stored and quickly 
activate the equipment and any other ancillary equipment or systems 
required for the use of the devices; and
    (iii) Communicate effectively with individuals who are deaf or hard 
of hearing and blind or have low vision regarding the uses of, and 
potential problems with, the equipment for such captioning or audio 
description.
    * * *

    Dated: July 23, 2014.
Eric H. Holder, Jr.,
Attorney General.
[FR Doc. 2014-17863 Filed 7-31-14; 8:45 am]
BILLING CODE 4410-13-P
```