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                                                          Before the 
              FEDERAL COMMUNICATIONS COMMISSION  
                     Washington, D.C. 20554

In the Matter of                        )
                                   )
Closed Captioning and Video Description      )
of Video Programming                    )
                                   )    MM Docket No. 95-176
Implementation of Section 305 of the         )
Telecommunications Act of 1996               )
                                   )
Video Programming Accessibility              )


                  NOTICE OF PROPOSED RULEMAKING
Adopted:  January 9, 1997               Released:      January 17, 1997 

By the Commission:

Comment Date:            February 28, 1997
Reply Comment Date:      March 24, 1997  

                       Table of Contents
                                
                                                      Paragraph

I.   INTRODUCTION .  . .  . .  . .  . .  . .  . .  . .  . .  .  1
II.  BACKGROUND . .  . .  . .  . .  . .  . .  . .  . .  . .  .  4
     A.   Scope of Section 713 . .  . .  . .  . .  . .  . .  .. .4
     B.   Summary of Proposed Regulations. .  . .  . .  . .  .. .. . .6
     C.   Current Regulation of Closed Captioning  . .  . .  .. .. . .7
     D.   Current Availability of Programming With Closed Captioning .. . .. . .10
     E.   Methods of Closed Captioning.  . .  . .  . .  . .  .. .18
     F.   Available Captioning Resources . .  . .  . .  . .  .. .. . .23
III. CLOSED CAPTIONING REQUIREMENTS . .  . .  . .  . .  . .  . 26
     A.   Responsibility for Captioning  . .  . .  . .  . .  .. .28
     B.   Obligations as to Non-Exempt Programming - Transition Rules
               For New Programming  . .  . .  . .  . .  . .  . 31
     C.   Obligations as to Non-Exempt Programming - Transition Rules
               For Library Programming.  . .  . .  . .  . .  .. .51
     D.   Exemptions of Classes of Programming and Providers
          Based on Economic Burden  . .  . .  . .  . .  . .  .. .63
     E.   Exemptions Based on Existing Contracts.  . .  . .  .. .. . .86
          F.   Exemptions Based on the Undue Burden Standard . .  .. .. . .. . . 89
     G.   Standards for Quality and Accuracy  . .  . .  . .  .. .103
IV.  ENFORCEMENT AND COMPLIANCE REVIEW MECHANISMS  . .  . .   122
V.   ADMINISTRATIVE MATTERS .  . .  . .  . .  . .  . .  . .  .125


  I. INTRODUCTION

     1.   Closed captioning is an assistive technology designed to provide access to television
for persons with hearing disabilities.  Closed captioning is similar to subtitles in that it displays the
audio portion of a television signal as printed words on the television screen.  To assist viewers with
hearing disabilities, captions may also identify speakers, sound effects, music and laughter.  Section
305 of the Telecommunications Act of 1996 ("1996 Act") added a new Section 713, Video
Programming Accessibility, to the Communications Act of 1934, as amended ("Communications
Act").  Section 713 requires the Commission to prescribe, by August 8, 1997, rules and
implementation schedules for captioning of video programming.  In enacting Section 713, Congress
generally required that video programming be closed captioned, regardless of distribution
technology, to ensure access to persons with hearing disabilities.  This Notice of Proposed
Rulemaking ("Notice") seeks comment on proposed rules and implementation schedules to fulfill the
statutory mandate of Section 713.  Our proposals are based on comments and information submitted
in response to a Notice of Inquiry in this proceeding and additional data gathered by the
Commission for our Report to Congress on video accessibility that was issued on July 29, 1996,
pursuant to the requirements of Section 713(a).

     2.   Section 713 is intended to further Congress' goal "to ensure that all Americans
ultimately have access to video services and programs, particularly as video programming becomes
an increasingly important part of the home, school and workplace."  It is "designed to ensure that
video services are accessible to hearing impaired . . . individuals" by promoting the accessibility of
video programming to persons with disabilities, regardless of the delivery mechanism used to reach
consumers.  In this Notice, the Commission discusses proposals intended to maximize the amount
of programming containing closed captioning with appropriate exemptions and reasonable timetables
to take into account the relevant technical and costs issues involved. 

     3.   In Section II of this Notice, we set out the provisions of Section 713, examine the
scope of the statutory requirements, and summarize the proposals in this Notice.  We also provide
background information regarding the current regulation of closed captioning, the current availability
of closed captioning by programming types and by various program providers, the methods and
costs involved in closed captioning and the available resources for captioning.  In Section III, we
discuss:  (1) the obligation to comply with our closed captioning requirements; (2) closed captioning
obligations as to non-exempt new programming, including phase in schedules; (3) closed captioning
obligations as to non-exempt library programming, including phase in schedules; (4) exemptions for
classes of programming and providers; (5) exemptions based on existing contracts; (6) exemptions
under the undue burden standard; and (7) standards for quality and accuracy.  In Section IV, we
propose enforcement and compliance mechanisms.  Throughout this Notice, we seek comment on
our proposed closed captioning requirements.  We also invite commenters to provide alternative
proposals that will fulfill the congressional mandate to ensure video accessibility to individuals with
hearing disabilities. 

II.  BACKGROUND

     A.   Scope of Section 713

     4.   Section 713(b) requires the Commission within 18 months of enactment to adopt
rules to ensure that:

     (1)  video programming first published or exhibited after the effective date of such
     regulations is fully accessible through the provision of closed captions, except as
     provided in subsection (d); and

      (2)  video programming providers or owners maximize the accessibility of video
     programming first published or exhibited prior to the effective date of such
     regulations through the provision of closed captions, except as provided in subsection
     (d).

Section 713(c) further provides that:

     Such regulations shall include an appropriate schedule of deadlines for the provision
     of closed captioning of video programming.

Notwithstanding the provisions of Section 713(b), the statute permits certain exemptions of closed
captioning requirements.  Specifically, under Section 713(d):  
     
     (1)  the Commission may exempt by regulation programs, classes of programs, or
     services for which the Commission has determined that the provision of closed
     captioning would be economically burdensome to the provider or owner of such
     programming;

     (2)  a provider of video programming or the owner of any program carried by the
     provider shall not be obligated to supply closed captions if such action would be
     inconsistent with contracts in effect on the date of enactment of the
     Telecommunications Act of 1996, except that nothing in this section shall be
     construed to relieve a video programming provider of its obligations to provide
     services required by Federal law; and

     (3)  a provider of video programming or program owner may petition the
     Commission for an exemption from the requirements of this section, and the
     Commission may grant such petition upon a showing that the requirements contained
     in this section would result in an undue burden.

For purposes of defining undue burden under Section 713, Section 713(e) states that:

     The term "undue burden" means significant difficulty or expense.  In determining
     whether the closed captions necessary to comply with the requirements of this
     paragraph would result in an undue economic burden, the factors to be considered
     include --

          (1)  the nature and cost of the closed captions for the programming;

          (2)  the impact on the operation of the provider or program owner;

          (3)  the financial resources of the provider or program owner; and

          (4)  the type of operations of the provider or program owner.

     5.   At the outset, we note that the provisions of Section 713 apply to all types of video
programming delivered electronically to consumers, regardless of the entity that provides the
programming or the category of programming.  In this Notice, we propose rules and
implementation schedules for closed captioning requirements for the various distribution
technologies used to deliver this programming to consumers.  We consider over-the-air broadcast
television service (both commercial and noncommercial) and all multichannel video programming
distributors ("MVPDs").  Among these distributors are:  cable television, direct-to-home ("DTH")
satellite services, including direct broadcast satellite ("DBS") services and home satellite dishes
("HSD"); wireless cable systems using the multichannel multipoint distribution service ("MMDS"),
instructional television fixed service ("ITFS") or local multipoint distribution ("LMDS"); satellite
master antenna television ("SMATV"); and open video systems ("OVS").  We further consider the
sources of video programming distributed by these technologies, including programming from
commercial and noncommercial broadcast television networks, basic and premium cable networks,
syndicated programming, and locally or regionally produced broadcast and cable programming.

     B.   Summary of Proposed Regulations

     6.   The following summarizes our proposals to implement the closed captioning
requirements under Section 713:

         Responsibility for compliance with captioning requirements:  Our tentative proposal
is to require those entities that deliver video programming directly to consumers (i.e., television
broadcasters and MVPDs) to be ultimately responsible for the rules we adopt.  Although we propose
to place the compliance obligations on video programming providers, we recognize, from a practical
standpoint, that captioning is most efficient at the production stage.  Thus, we believe that producers
generally will have the responsibility for captioning programming regardless of who has the
obligation to comply with our rules. 

         Transition schedule:  

          	    New Programming - We propose to require that all non-exempt, new
programming be closed captioned within eight years.  We propose to phase in this captioning
requirement by increasing the amount of required captioning by 25% every two years.  Thus, we
would require 25% of such programming to be captioned at the end of the second year, 50% at the
end of the fourth year, 75% at the end of the sixth year, and to have all non-exempt, new
programming captioned at the end of the eighth year.  Alternatively, we seek comment on a ten year
period with 25% captioned after three years, 50% after five years, 75% after seven years, and 100%
after ten years.  

          	    Library programming - The statute requires that programming providers or
owners "maximize the accessibility" of programming first published or exhibited before the effective
date of our rules.  We ask whether we should require that a percentage of library programming (e.g.,
75%) ultimately be captioned.  Some commenters assert that captioning of previously published
programming is increasing and thus it may be unnecessary to require completion of closed captioned
video libraries by a date certain.  We ask that commenters who support this approach indicate how
the Commission would ensure that video programming providers or owners "maximize the
accessibility" of previously published programming, as required by Section 713(b)(2).

         Exemption based on economic burden:  Section 713(d)(1) provides for the exemption
of classes of video programming or video providers where the requirement to close caption
programming would be economically burdensome.  While Section 713 and its legislative history do
not define the term "economic burden," we interpret this provision to permit us to exempt those
classes of programming where the economic burden of captioning these programming types
outweighs the benefits to be derived from captioning and, in some cases, the complexity of adding
the captions.  We seek to establish a general classification or a number of general classifications of
programming for which captioning would be economically burdensome.  We do not propose to
exempt any class of provider since all classes of providers appear to have the technical capability
to deliver closed captioning to their viewers intact.  
     
         Exemptions based on existing contracts:  We tentatively conclude that programming
subject to contracts in effect on the date of enactment of the 1996 Act (i.e., February 8, 1996) that
specifically prohibit closed captioning should be exempt from any captioning requirement. 
Comment is sought on other types of contract provisions that may be inconsistent with captioning.

         Exemptions based on undue burden:  The statute provides for petition for exemptions
based on a showing of undue burden.  Such exemptions would be available based on:

          (1)  the nature and cost of the closed captions for the programming;
          (2)  the impact on the operation of the provider or program owner;
          (3)  the financial resources of the provider or program owner; and
          (4)  the type of operations of the provider or program owner.

We seek comment on how to apply these factors and whether there are any other factors which
should be considered when determining that closed captioning would result in an undue burden for
an individual programming provider.  We also request comment on using standard "special relief"
or waiver type procedures for   these types of requests. 
     
         Standards for quality and accuracy:  We propose to extend to other programming
providers the rule (Section 76.606) that requires cable operators to deliver existing captions intact
to all video providers.  However, we tentatively conclude that we should not adopt standards for the
non-technical aspects of captioning, including accuracy of transcription, spelling, placement and
style, at the start of our phase in period for closed captioning.  We propose to monitor the closed
captioning that results from our requirements and, if necessary, revisit this issue at a later date.  We
also will not propose minimum credentials for captioners nor place any limits on the method used
to create captions. 

         The enforcement process:  We propose to rely on complaints as a primary
enforcement mechanism for the rules we adopt.  Further, all complaints would initially be directed
to the program provider in an attempt to resolve problems privately within a specified time period
in order to minimize administrative resources devoted to matters that are better resolved through
informal processes.  We also seek comment on other methods or information needed to verify
compliance, such as a requirement that each entity responsible for compliance with the rules retain
in its files, or have available upon appropriate request, records sufficient to verify compliance.
     
     C.   Current Regulation of Closed Captioning

     7.    Closed captioning was first used in the 1970s.  Closed captioning is hidden as
encoded data transmitted within the vertical blanking interval ("VBI") of the television signal, which,
"when decoded, provides a visual depiction of information simultaneously being presented in the
aural channel (captions)."  A viewer wishing to see the closed captioning must use a set-top
decoder or a television receiver with built-in decoder circuitry. 

     8.   In 1976, the Commission adopted rules which provide that line 21 of the VBI is to
be primarily used for the transmission of closed captioning.  The Commission's rules specify
technical standards for the reception and display of such captioning.  The Commission also has
adopted technical standards for the cable carriage of closed captioning data that accompanies
programming carried on cable systems.  Cable operators and open video system operators also are
specifically required to carry the closed captioning data contained in line 21 of the VBI as part of
their must-carry obligations.  In 1976, the Commission adopted a rule requiring television licensees
to transmit emergency messages in a visual format.  In 1990, as part of the ADA, a requirement
was established that all federally funded public service announcements must be closed captioned. 


     9.   To implement the Television Decoder Circuitry Act of 1990 ("TDCA"), the
Commission adopted rules that require all television receivers with screen sizes 13 inches or larger
to be capable of receiving and displaying closed captions.  For those whose television receivers that
are not capable of decoding and displaying closed captioning, separate decoders may be purchased. 
Existing technology, however, can only decode Latin-based alphabets and symbols, so captioning
of some non-English language programming (Chinese, Japanese, Russian, Arabic, etc.) is not
possible using this system.  This transmission and display system is generally well established and
functions effectively.  In 1995, 25 million decoder-equipped television sets were sold in the U.S. 
It is estimated that between 50 and 60 million U.S. homes currently can receive closed captioning. 
Digital transmission systems under development are being designed to include closed captioning
capabilities. 

     D.   Current Availability of Programming With Closed Captioning

     10.   Currently, programming accessible to persons with hearing disabilities through
closed captioning is the result of the voluntary efforts of program producers and providers, although
the Commission has encouraged these efforts in several previous actions.  Economic support for
these voluntary efforts comes from four principal sources.  Financial assistance provided by the
Department of Education ("DOE") represents approximately 40% of the cost of all captioned video
programming.  This funding is available only for programming that reaches the largest audiences --
national news, public affairs and children's programming, movies and prime time specials.  The
remaining support comes from a combination of directly credited corporate advertising support,
charitable and foundation support, and producers and distributors of programming. 

     11.  Today, significant amounts of nationally distributed programming is closed captioned
and some programming produced locally or regionally is captioned.  Television programming is
produced initially for broadcast networks, broadcast stations, cable networks and cable systems. 
Other MVPDs, such as wireless and satellite providers, also offer their subscribers programming
originally produced for broadcast and cable distribution and generally transmit intact any closed
captioning provided with programs.  

     12.  Virtually all nationally broadcast programming, both commercial and noncommercial,
contains closed captions, including prime time television programming, children's programming,
news, daytime programming and some sports programming.  The Public Broadcasting Service
("PBS") captions all children's programs, prime time programming and the Newshour with Jim
Lehrer.  The few PBS programs that are not closed captioned are visually oriented (e.g., ballet or
other dance performances), or are non-verbal in nature (e.g., a symphony concert).  Non-English
language operas are not closed captioned since they already contain open English subtitles.  PBS
has voluntarily adopted the practice of requiring producers to provide closed captioning in all
programming funded by PBS' National Program Service.

     13.  The majority of programming on each of the commercial broadcast networks also is
already closed captioned.  The primary exceptions are overnight news programs and regional
sports feeds.  NBC closed captions an average of 83 hours of programming per week, or 88.3% of
the 94 hours each week it distributes to affiliates.  ABC offers on average about 90 hours of
programming each week to its affiliates.  Of that programming, a substantial majority, including
news, sports, children's and entertainment programming, is closed captioned.  CBS averages 13.5
hours of programming with closed captions daily, or between 85 and 95 hours per week, depending
on weekend sports programming schedules.  The Fox Television Network distributes 16 hours of
prime time, late night and early Sunday morning programming, along with 19 hours of children's
programming throughout the week, all of which is closed captioned.  The WB Television Network
("WB") distributes five hours of prime time programming and five hours of children's programming
each week, all of which is closed captioned, with the exception of some older cartoons.  The United
Paramount Network ("UPN") distributes six hours of prime time programming, one hour of
children's weekend programming, and a movie on Saturday afternoons, all of which is closed
captioned.  UPN includes captioning as a delivery requirement in its programming contracts. 

     14.  In the last few years, most syndicated programming has included closed captioning. 
The amount of captioned first-run syndicated programming (e.g., Jeopardy!, Wheel of Fortune,
Oprah) varies depending on who produces and who airs the programming.  Newer off-network
syndicated programming, especially that produced after the mid-1980s, is often closed captioned. 
Most off-network syndicated programming produced before the mid-1980s (e.g., Bewitched, The
Honeymooners) was not captioned when produced and remains uncaptioned.   

     15.  With respect to nationally distributed cable programming networks, according to the
National Cable Television Association ("NCTA"), nearly 24% of the programming on the top 20
basic and six most widely distributed premium cable channels is captioned at present, with certain
services providing as much as 80% of their programming with captions.  In addition, nearly 30%
of prime time programming on the top 20 basic cable networks and over 60% on the top six premium
networks is closed captioned.  Some national news on cable is closed captioned.  Cable news
programming networks, such as CNN, CNN Headline News and CNBC, caption between 25% and
50% of their programming each week.  Kaleidoscope, a 24-hour a day cable programming network
established for the purpose of serving persons with disabilities uses "open captions" that are visible
to all viewers for its programming.  Furthermore, Home Box Office ("HBO") and Cinemax, two
of the most widely available premium cable network services, provide a variety of programming,
much of which is captioned.  For example, in 1995, HBO had captioning on 76% of its theatrical
motion pictures, 83% of its musical programming, 94% of its documentaries, 72% of its family
programming, 82% of its series, 100% of its comedy programs, and 100% of other categories of
programming.  

     16.  Almost all widely-distributed motion pictures currently produced and distributed by
member companies of the Motion Picture Association of America ("MPAA") are closed captioned
for distribution over broadcast television, home video and cable television following their theatrical
release.  While more than 6000 closed captioned titles have been distributed, according to MPAA,
there are approximately 24,000 previously released films that have not been closed captioned. 
Many commercials scheduled during and adjacent to network programs are captioned by the
advertising agencies which produce them.  Network promotions of upcoming network programs
("interstitials") are generally not captioned.  Broadcast and cable networks such as NBC and HBO
state that even for uncaptioned promotional spots, information about the name of the program and
the time of the upcoming broadcast is often displayed visually by graphics contained in the spot. 


     17.  Many local television stations caption their news, at least the portion that is scripted. 
According to a study conducted by the National Association of Broadcasters ("NAB") in February
1996, 70% of the stations responding provide closed captioning for some of their non-network
programming.  According to the NAB, 81.5% of stations caption their local news.  Cable
operators provide their subscribers with regional and local cable programming in addition to
broadcast stations and national cable networks.  The regional programming is primarily news and
sports channels that are generally not captioned.  Much locally originated programming carried by
cable operators is on their public, educational and governmental ("PEG") access channels. 
Programming over PEG access channels is usually produced by individuals, schools, local
governments or small non-profit organizations working with volunteer personnel.  Most of these
program producers usually operate with very limited funding that results in a low level of captioning
of PEG programming.

     E.   Methods of Closed Captioning

     18.  As we reported in our July 29, 1996, Report to Congress, the methods used to caption
video programming vary primarily by programming type, with costs depending on the method used
to add the captions, the quality of the captions and the entity providing the captions.  Organizations
and suppliers that charge the most for their services are reported to provide the highest quality and
most accurate captioning.  For prerecorded programming, captioning is generally "off line."  Under
this method, the captioning service gets an advance copy of the script, tape or film before the
program is aired.  The audio portion of the program, including sound effects as well as dialogue, is
transcribed and added in synchronization with the video content.  After the program is captioned it
is sent to a post-production company or to the program producer on a computer disk or via modem. 
The captioning is encoded by the post-production company or the producer onto line 21 of the VBI
of the master tape to be telecast.  This method of captioning entails a labor intensive process to
ensure that the captions are placed precisely where the corresponding audio appears and then locked
into the proper position on the program tape.  The captioners must ensure that the captions will
appear at precisely the right moment in a precise location on the screen.  This type of captioning
is used for feature films and many prerecorded entertainment programming, including prime time
series and children's programs.  Estimates of the cost of this type of captioning range from $800
to $2500 per hour.

     19.  A variation of this method is used for prerecorded programming such as daytime
dramas and late night entertainment shows, where there are only a few hours between taping and
airing and the final edits for the program are not completed until close to air time.  Although these
captions are prepared in advance of the time that the program is aired, they are not encoded onto the
program tape, but rather are transmitted with the program at the time it is aired.  These captions are
less precisely synchronized than off-line captions, and are rolled from the bottom of the screen rather
than appearing at precise locations on the screen.  

     20.  For live, unscripted programming, such as news, public affairs, sports, or awards
shows, "real time" or "live captioning" is often used.  Under this method, a specially trained
"stenocaptioner" transcribes the audio portion of the live program as it airs.  The captioner's
computer is linked to the telecast operation center and the captioning material is created for telecast
in "real time."  Due to the transcription and computer processing required, real time captioning
appears on the screen about three seconds after the corresponding audio content.  The cost of real
time captioning for live programming is estimated to be between $120 and $1200 an hour.

     21.  Another method of captioning live programming is electronic newsroom ("ENR")
captioning, in which the captions come from the text in the station's news script computers.  Only
text transmitted from the scripting computers onto the teleprompters is captioned.  Therefore,
unscripted material, such as live reports from the field, reports of breaking stories, much sports and
weather reporting, and ad libs and banter among the anchors that does not appear on the
teleprompters, is not captioned.  The electronic newsroom captioning method is commonly used
for local broadcast station newscasts.  ENR captioning is virtually cost free once the equipment and
software are purchased.  The cost of installing ENR capability is generally estimated to be between
$2500 and $5000. 

     22.  Captions often must be reformatted when programming is rebroadcast or distributed
by a subsequent video provider.  For a secondary use, a program may be edited to fit a time period
that is different from the original one and commercials may need to be inserted.  This editing can
change synchronization of the captions and make reformatting necessary.  If parts of the program
are removed or rearranged, the captions must be removed or rearranged accordingly.  The cost of
reformatting is approximately one fourth that of the original captioning, or approximately $400 to
$800 for a full length movie.  Estimates of reformatting costs generally range between $350 and $450 per hour, depending on the amount of editing,
although it is reported that the cost of reformatting can be as high as $750.  
     
     F.   Available Captioning Resources

     23.  As we indicated in our July 29, 1996, Report to Congress, off-line captioning
resources appear to be more available than real-time captioning resources.  There are more than 100
suppliers of closed captioning services.  In its comments, the National Captioning Institute ("NCI")
states that "dozens" of firms currently offer captioning services, which it believes constitute an
adequate number of captioning firms to meet current demand at reasonable prices.  Media
Captioning Service ("MCS"), however, alleges that the supply of captioning services is oligopolistic,
claiming that three dominant firms have captured the majority of the business.    
     24.  Availability of real time captioning resources appears more limited.  Based on
information from the National Court Reporter's Association which listed 83 members who are real-
time captioners in the Spring of 1996, VITAC estimates that there are likely to be only about 100
real time captioners nationwide today.  NCI also notes the limited supply of real time captioners,
contending that significant amounts of on line captioning cannot normally be supplied on short
notice.  Alternatively, MCS estimates that there may be only 500 people in the industry at present,
although it notes that there is a growing pool of talented real time captioners.

     25.  Caption Colorado filed comments that also indicate real time captioning services may
be growing.  This caption house reported that it employs 23 stenocaptioners across the country, with
the capacity to provide 23,000 to 35,000 hours of news per year, and projected potential growth over
18 months to provide 484,000 hours of real time stenocaptioning per year.  Caption Colorado claims
the reduction in litigation and related discovery has reduced the demand for court reporters, thus
increasing the pool of potential stenocaptioners.  

III. CLOSED CAPTIONING REQUIREMENTS

     A.   Responsibility for Captioning 

          1.   Background

     26.  In order to implement any closed captioning requirements that we may adopt, we
must determine where the responsibility lies for ensuring that video programming is closed
captioned, and which parties shall be required to comply with those requirements.  Section 713(b)(1)
focuses on the result that programming be closed captioned, rather than who is responsible for
accomplishing this goal, while Section 713(b)(2) refers to both video programming providers and
program owners as being responsible for captioning of library programming. 

     27.  Broadcast, cable, wireless and DBS commenters all generally agree that the
responsibility for captioning of prerecorded programming should be placed at the production source,
often noting that it would be inefficient and burdensome to require that captions be added at the
distribution level.  This position is consistent with the House Report which states:  "It is clearly
more efficient and economical to caption programming at the time of production and to distribute
it with captions than to have each delivery system or local broadcaster caption the program."  In
contrast, the National Congress of the Jewish Deaf ("NCJD") supports placing the responsibility for
captioning on providers, noting that providers control what actually goes out over the airwaves. 
The National Association of the Deaf ('NAD") and Telecommunications for the Deaf ("TCD") also
assert that providers should be responsible, analogizing responsibility for captioning with our rules
for telecommunications relay service ("TRS"), which place the responsibility for providing service
on the carriers.  Other commenters representing persons with hearing disabilities state that the
responsibility for captioning must be shared by video programming providers and programming
producers.
     
          2.   Request For Comment

     28.  We propose that the responsibility for compliance with our closed captioning
requirements should be placed on video programming providers, which we define as all entities who
provide video programming directly to a customer's home, regardless of the distribution technologies
employed by such entities.  We believe that the programming providers are in the best position to
ensure that the programming they distribute is closed captioned because of their role in the
purchasing of programming from producers.  For example, a provider can refuse to purchase
programming that is not closed captioned.  We also believe that the direct link between consumers
and their video providers is an important consideration for ensuring compliance with our rules.  We
seek comment on this view.  Commenters should address the possible effect such a rule would have
on video programming providers.  Commenters who disagree with our proposal should discuss, in
detail, specific alternatives that would achieve our principal goal of increasing the availability of
closed captioned programming.  Commenters should also address the effect that our proposal might
have on the diversity of available programming as well as the availability of closed captioned
programming.  
  
     29.  We note that the language of Section 713 refers to "program providers and owners"
and may have been intended to provide the Commission with jurisdiction over other parties in the
production and distribution chain.  We believe that a number of parties could be the program
owner, including the producer, copyright holder, syndicator or distributor, and request comment on
determining who is the owner of a program.  We seek comment on the feasibility of having program
owners and providers share responsibility for compliance obligations with our closed captioning
rules.   

     30.  Although we propose placing compliance obligations on video programming
providers, we recognize that, from a practical standpoint, captioning at the production stage is often
the most efficient manner to include closed captioning with video programming.  Thus, we
anticipate that our rules will result in video programming providers incorporating such requirements
into their contracts with video producers and owners, regardless of which party has the obligation
to comply with our rules.  We seek comment on this view and its effect on the implementation of
closed captioning requirements.  Specifically, we seek comment from providers and distributors who
currently include captioning as a contractual delivery requirement for their programming regarding
their experiences in obtaining captioning in this manner.  Has including captioning as a delivery
requirement been met with opposition by program producers, and if so, how have parties resolved
such disputes?  Has this requirement limited the program options available to these providers and
distributors, i.e., is the pool of producers who are able or willing to comply with the requirement
limited?  We also seek comment on whether there are any anomalous situations created by our
proposal to place the responsibility for compliance with our closed captioning rules on video
programming providers.

     B.   Obligations as to Non-Exempt Programming - Transition Rules for New
          Programming 
     
          1.   Background

     31.  Although certain types of programming or program providers may be exempt from
the obligation to include closed captioning, the basic thrust of Section 713 is that programming shall,
in general, be captioned.  The statute does, however, make a distinction between newly published
and previously published material.  Section 713(b) requires the Commission to adopt rules to ensure
that:

     (1)  video programming first published or exhibited after the effective date of such
     regulations is fully accessible through the provision of closed captions, except as
     provided in subsection (d); and

      (2)  video programming providers or owners maximize the accessibility of video
     programming first published or exhibited prior to the effective date of such
     regulations through the provision of closed captions, except as provided in subsection
     (d).

     32.  In response to the Notice of Inquiry, commenters provided recommendations
regarding the regulation of closed captioning.  Commercial broadcast and cable television networks
would clearly prefer to maintain the status quo with regard to captioning of all programming, new
and old.  For example, HBO asserts that "marketplace forces have proved to be a significant
motivator to the provision of closed captioning," and there is thus no need for government
intervention to mandate captioning requirements.  In contrast, NCI points out that the hopes of
greater voluntary commitment to captioning by video providers after passage of the TDCA have not
been fully realized.  

     33.  NAB has suggested that our objective should be "ensuring access by hearing-impaired
persons to a broad range of video programming and information," which NAB claims can be
achieved even if certain older programs or programs with a small audience remain uncaptioned. 
NCTA claims that many cable networks provide programming 24 hours a day, seven days a week,
which amounts to much more programming than the broadcast networks, and states that these and
other "unique" situations of the cable industry should be taken into account in mandating captioning
requirements.  We note, however, that this argument ignores the fact that many cable networks
cycle their programming, rebroadcasting programs several times over the course of a month or
season, which should significantly decrease the actual number of hours of programming to be
captioned on an annual basis.

     34.  At the very least, providers want broad discretion in making captioning decisions,
both in the types of programs which will be captioned and the method of captioning used for
different types of programming. 

     35.  Despite their preference that captioning efforts remain voluntary, most providers
acknowledge that the 1996 Act requires captioning of new programming, and generally support a
phase-in approach, though they do not offer specific transition recommendations.  For example,
NBC asserts that mandatory requirements "must be phased-in over a long enough period to allow
the market to adjust and respond to new and increased demand."  NCTA recommends that full
captioning of new programming, with exceptions for "textual, interstitial and short form
programming," be achieved over a multi-year period, in percentage increments.  The Association
of Local Television Stations ("ALTS") advocates a requirement that programming furnished with
captions be delivered to consumers with captions intact immediately, but maintains that captioning
of locally-produced programming should be achieved on a phased-in basis, taking into account costs
and other burdens. 

     36.  Captioners generally did not comment on the need for a transition period to full
captioning of new programming.  Only MCS refers to the need for a transition to full captioning of
all programming, noting that providers with greater financial resources and who currently have
significant levels of captioned programming will need less of a phase-in period than smaller
providers. 

     37.  Although most of the commenters representing persons with hearing disabilities
indicate a preference for the required captioning of as much programming as possible, as soon as
possible, many recognize that it will be difficult to caption all programming immediately.  Several
commenters suggest that priority be given to certain types of programming first, gradually adding
categories and percentages of captioned programming until the requirements of the 1996 Act are
met.  Typically, emergency broadcasts, news reports, local/regional programs, and educational
programming are cited as being of higher priority for captioning than entertainment and other
programming.

     38.  Many commenters offered general proposals for captioning deadlines for new
programming.  These proposals offer suggestions on how to prioritize closed captioning in order to
require the captioning of programming that appears to be most important and attract the largest
audiences first.  For example, one commenter with a hearing disability suggests a requirement of
"increments of hours over the next few years, with the increase in the number of captioned hours
dependent on the annual gross income of the television companies.  Additional captioned hours
should be distributed from the most popular to least popular viewing times until all programs are
captioned."  Another commenter proposes that the rules first mandate captioning for all news
programs, followed by all national programming.  MCS argues that providers who have an impact
on the public interest or general welfare, education and health of consumers should be subject to a
more rapid transition to full captioning, particularly where such providers serve a larger market. 
MCS also suggests that cable providers that offer their programming nationally should have a phase-
n requirement based on the per subscriber cost they project for captioning and their current levels
of captioning, while providers who have offered captioning for some time and have a substantial
portion of their current programming captioned with federal assistance should have a shorter
timetable than smaller networks. 

     39.  Where specific captioning deadlines after the effective date of our rules were
suggested, they varied widely for different categories of programming.  Among the proposals for
deadlines by which specific programming should be required to include closed captioning are the
following:  (1) all previously captioned programming should be displayed with captions intact,
and all emergency broadcasts and new programming, on the effective date of the rules; (2) all
premium cable programming (new or old), all major networks and premium cable programming,
and real time captioning of all emergency announcements and local news within 90 days of the
effective date; (3) all new programming within six months of the effective date; (4) all news
reports and all currently uncaptioned reruns within one year of the effective date; and complete
captioning of all new programs not subject to the undue burden exemption within two years of the
effective date.

          2.   Request For Comment

     40.  We do not believe that it is practical to mandate immediate captioning of all non-
exempt video programming.  We recognize that certain limitations exist, such as the number of
available captioners and captioning services, the costs of captioning, and the effect that immediate
implementation of mandatory captioning rules might have on the continued availability of certain
types of video programming.  In addition, given the plain language of the statute, appropriate
exemptions, undue burden arguments and pre-existing contract considerations must be taken into
account in crafting any rules that establish a deadline by which new programming must be captioned. 
Thus, we believe it appropriate to establish a reasonable transition period that will result in the
amount of video programming with closed captioning increasing over a period of time until the full
video accessibility for new programming mandated by Section 713(b)(1) is reached.

     41.  We propose a transition schedule of eight years that will phase in captioning of all
non-exempt new programming by requiring an additional 25% every two years.  In other words, at
the end of two years after the effective date of our rules, 25% of non-exempt new programming must
be closed captioned; 50% after the end of four years; 75% after the end of six years; and 100% at
the end of eight years.  Alternatively, we seek comment on whether the phase in schedule be
completed over a ten year period, with 25% after three years, 50% after five years, 75% after seven
years, and 100% after ten years.

     42.  These proposals will provide program providers, owners, and producers significant
discretion regarding what will be captioned to meet the requirements and how to use the funding
available for captioning.  We believe this approach is preferable to one in which the Commission
specifies precisely what types of programming needs to be captioned by when.  Providers have
access to information, such as advertising revenues or captioning sponsorships available for specific
programs or programming day parts, that may influence the choice of what programming gets
captioned first.  Further, program providers are the most direct link to the consumer and are in a
better position than the Commission to determine what should be captioned first.  We request
comment on this proposal.  While we propose to give program providers and owners flexibility in
determining which programs to caption in order to comply with each stage of the implementation
schedule, market forces alone may not be sufficient to ensure that the closed captioning of some
types of public interest programming, which may for various reasons be less cost effective to close
caption, is not delayed until the final stages of the implementation schedule.  Accordingly, we seek
comment on whether there are certain types of programming, (i.e., live local news or public affairs
programming) for which we should specify an earlier implementation schedule.

     43.  With respect to MVPDs, we propose to apply the percentages of programming that
must be captioned on a system-wide basis.  Under this approach, for example, a cable operator would
be required to transmit a total of 25% of all the new, non-exempt programming on its cable system
with closed captions by the end of the first benchmark period.  We believe that this would make
possible a more rational, market driven allocation of captioning resources during the transition
process.  We note, however, that under this approach, a cable operator, for example, could choose
to transmit one particular cable network completely captioned, while transmitting three others with
no captioning.  Also, it might be possible that a cable system could meet its obligation solely by
passing through the captioned programs of the broadcast stations it carries.  We seek comment on
these and other effects of this proposal, and request comment on whether the effects may differ
among the various MVPDs. 

     44.  Alternatively, we seek comment on whether the percentages of programming that
must be captioned should apply to each program service or channel transmitted by an MVPD. 
Further, we seek comment on whether, if a broadcast station is retransmitted by an MVPD,
compliance with our rules should be the responsibility of the MVPD offering the service directly to
the subscriber or the broadcast station programming the channel?  We seek comment on similar
situations where responsibility for compliance with our proposed closed captioning requirements
may rest with more than one video programming provider.  We also ask that commenters address
the manner in which such obligations should be shared by various providers.  
     45.  We seek comment on whether the determination that a percentage requirement has
been met should be based on the amount of programming with captioning that has been shown over
a month, or whether it should be based on a week or some other period of time.  We recognize that
there might be legitimate reasons why certain weeks might have less captioned programming than
others.  We seek comment on what the period of time should be if we apply the percentages on a
system-wide basis, and what it should be if we apply the percentages on a per channel basis. 

     46.  We recognize that, in some instances, the level of captioned programming shown
already may exceed our proposals.  We expect that this level of captioning will continue.  We are
also aware that a significant portion of funding for current levels of closed captioning comes from
the federal government through Department of Education grants.  The availability of such funding
for captioning in the future is unclear and may affect the amount of closed captioning that can be
provided. 

     47.  Further, to the extent that programming delivered to program providers is closed
captioned, and the provider does not edit the programming, we propose to require that the provider
must transmit the programming with captions, regardless of whether the provider has already met
any percentage requirement.  Recognizing that program providers may edit prerecorded captioned
programming, and that, therefore, the captioning would likely need to be reformatted, we seek
comment on the costs of such reformatting and on whether we should also require that such
programming be shown with captions.

     48.  We recognize that as distribution technologies increasingly convert to digital
transmissions, there may be alternative means that become available for captioning programming. 
For example, it is possible that in the future technology may become available that captions
programming through the receiver rather than requiring the transmission of closed captions.  We
seek comment on whether and if so, how, our captioning rules should be designed to take into
account the technological changes that may take place as a result of digital conversion and on what
steps we should take to ensure that our captioning rules do not impede the development of such new
technologies.

     49.  We also note that some programming services use multiplexing to offer several
programs at the same time.  This practice may become more commonplace as there is increasing use
of digital compression technology.  We seek comment on how to determine closed captioning
requirements for programming services offering multiple programs simultaneously.  We also seek
comment on any other situations, be they due to technological advances or otherwise, where
compliance with our closed captioning requirements as proposed would be unworkable.

     50.  We seek comment on all of these proposals.  We ask that commenters explain in
detail why any of the proposals are not feasible and request specific alternatives.  We recognize that
our requirements could incorporate various factors including the type of programming, the time of
day the program is offered, audience size, the type of program provider, or number of households
served by the provider (e.g., homes in the television market or homes passed by the cable system),
or some combinations of these factors.  We ask commenters to consider whether these factors should
be incorporated into our phase in schedules or be the basis of alternative proposals.  Commenters
offering such suggestions should be specific and provide information to support their conclusions. 
Finally, commenters proposing alternative phase in schedules should bear in mind Congress' intent
in enacting Section 713 to provide full accessibility to video programming for persons with hearing
disabilities and consider the importance of such accessibility.  

     C.   Obligations as to Non-Exempt Programming - Transition Rules for 
          Library Programming 
     
          1.   Background

     51.  Section 713(b)(2) requires that: 

      (2)  video programming providers or owners maximize the accessibility of video
     programming first published or exhibited prior to the effective date of such
     regulations through the provision of closed captions, except as provided in subsection
     (d).

We refer to programming first published or exhibited prior to the effective date of our closed
captioning rules as "library programming."

     52.  Networks and program producers request that no mandatory captioning requirements
be placed on programming libraries.  They claim that attempts to caption such a vast amount of
programming immediately would be prohibitively expensive, and that providers are more likely to
archive such materials rather than pay to have them captioned.  CBS states that it would be unfair
to require owners of vintage programming to assume the costs of captioning such programming now,
as such costs were neither calculated into the purchase price nor considered in planning the future
use of video libraries.  NBC recommends that captioning of libraries should only be required if
the program was initially exhibited on a national broadcast or cable network, or if the program was
captioned for its original exhibition.  NAB opposes a captioning requirement for library
programming that is distributed by only a few stations or has a very small audience. 

     53.  HBO asserts that the amount of captioning of previously published programming has
been steadily increasing and that the success of voluntary captioning efforts proves it unnecessary
to require completion of captioning video libraries by a date certain.  Similarly, MPAA claims that
a requirement of wholesale captioning of video libraries is unnecessary and impractical, claiming
that voluntary efforts of the motion picture industry have been successful to date and that the
industry will continue to meet demands for captioning where they exist.  NCTA asks that the
Commission not impose mandatory captioning requirements on programming libraries due to the
enormous financial burden such a requirement would place on cable providers.  NCTA claims that
providers will voluntarily caption popular library programs that are aired on a regular basis, but a
requirement that all library programming be captioned will "relegate older movies and series
permanently to the archives."

     54.  With regard to library programming, commenters representing individuals with
hearing disabilities interpret the requirement that our rules "maximize the accessibility" of such
programming to mean that all library programming should eventually be captioned.  NAD notes
that little or no cost should be involved in ensuring that previously published captioned
programming is transmitted with captions intact, and that therefore such programming should be
required to include captions immediately upon the effective date of the rules.  Many commenters
request that movies and programs that were captioned when first broadcast should be required to be
captioned on rebroadcast as well as on videotape.  Some commenters also complain about the lack
of captions on rental videos and videos of theatrical and broadcast programs which are sold retail.

     55.  NCI notes that very little captioning has been done of programming produced prior
to early the 1980s; that which does exist is primarily home videos and off-network programming. 
NCI further claims that, to the extent older programming is in the public domain, there is usually no
one with sufficient economic interest in the program to fund captioning.  Similarly, Colorado
Assistive Technology Project et al. ("CATP") claim that relatively few previously published or
exhibited programs are captioned when shown as reruns.  CATP recommends that we draft
regulations guaranteeing that once a program has been captioned, all copies of the program must be
equally captioned, with significant fiscal penalties levied on entities who remove or do not copy
captioning from previously-captioned material.

     56.  Individuals with hearing disabilities also acknowledge that captioning of library
programming should be accomplished over a longer period of time than that allowed for captioning
of new programming.  NAD argues that previously published captioned programming should be
required to be transmitted with captions immediately upon the effective date of the rules. 
Captioning of other library programs should be mandated based on a timetable beginning within six
months of the effective date, and staggered to reflect differences in the size and resources of the
provider, nature of the program, and time of day.  NAD further argues that the schedule for library
programming should allow a three to five year period for completion of captioning of all library
programming which is not subject to the undue burden exemption.

          2.   Request For Comment 

     57.  An enormous amount of older programming exists, including classic movies and
television series, as well as current-run, uncaptioned programming.  In considering closed captioning
requirements for library programming, we do not believe that the statute requires that all such
programming be captioned, given the distinction between new programming ("fully accessible") and
library programming ("maximize accessibility") evident in the statutory language of Sections
713(b)(1) and (b)(2).  The legislative history supports our conclusion that Section 713 was not
intended to require the captioning of all library programming:

     [T]he Committee expects that . . . preexisting programming will be captioned to the
     maximum extent possible, with the recognition that economic or logistical
     difficulties make it unrealistic to caption all previously produced programming.

The legislative history of Section 713 also states that, "[i]n general, the Committee does not intend
that the requirement for captioning should result in previously produced programming not being
aired due to the costs of captions."

     58.  We believe it inappropriate to mandate captioning of nearly all library programming. 
First, based on the volume of existing uncaptioned programming, such a requirement could place
a significant burden on the owners and providers of library programs created prior to closed
captioning requirements.  Further, rather than captioning their library programming, providers
might elect to remove older, uncaptioned programming from their scheduled offerings rather than
captioning such programs, thus reducing the amount and variety of programming options available
to all viewers.  We seek comment on whether the rules should require that a percentage of library
programming (e.g., 75%) ultimately be captioned.  We seek comment on what deadline should
apply to captioning of library programming and what the relevant time frames for the transition
period should be.  We seek comment on any criteria that could be considered for establishing phase
in schedules, noting that we do not believe immediate or near term captioning of library
programming is appropriate.

     59.  Some commenters assert that captioning of previously published programming is
increasing and thus it may be unnecessary to require completion of closed captioned video libraries
by a date certain.  Commenters who support this approach should indicate how the Commission
would ensure that video programming providers or owners "maximize the accessibility" of
previously published programming, as required by Section 713(b)(2).

     60.  For some of the older programs included in these libraries, there may not be a single
entity that holds title to or controls the program (e.g., programming for which the copyright has
lapsed or which has otherwise been placed in the public domain).  Each entity that owns a copy of
the program might be responsible for having its copy captioned, which would be economically
inefficient.  We expect that the market will address any such inefficient outcomes; for example,
video providers or owners may elect to wait until another provider or owner has captioned a copy
of the program, which could then be duplicated for others, rather than requiring each owner or
provider to secure captioning of its own copy.  Alternatively, several parties owning copies of the
programming could arrange to caption the programming for their use and that of others.  We seek
comment as to whether our expectations regarding market influences are sound. 
     
     61.  As with the proposal for mandatory captioning of new programming, we ask that
commenters explain in detail why any of the proposals for maximizing captioning of library
programming are infeasible and offer specific alternatives.  We also seek comment on any criteria
that could be considered for establishing phase in schedules and the relevant time frames for the
transition periods.  

     62.  We note that under these requirements it is necessary to know when a program was
first exhibited or published in order to determine whether it may be shown without closed
captioning.  We seek comment on whether sufficient information regarding when a program was first
published or exhibited is readily available.

     D.   Exemptions of Classes of Programming and Providers Based on Economic
          Burden

          1.   Background

     63.   Section 713(d)(1) provides that:  
     
     the Commission may exempt by regulation programs, classes of programs, or
     services for which the Commission has determined that the provision of closed
     captioning would be economically burdensome to the provider or owner of such
     programming.

     64.   Many providers want broad categories of programming to be exempted from any
mandatory captioning requirements, and most also do not want to caption "interstitials" (i.e.,
promotional spots for upcoming programs) or other short-form material.  For example, NAB
recommends that overnight news feeds and other programming that attracts a small audience be
exempted from captioning requirements, and also seeks to exempt local stations from captioning
advertising, infomercials or other programming which they air but do not produce.  The Recording
Industry of America ("RIAA") claims that captioning is not necessarily appropriate or even possible
for some music videos, and asks the Commission to exempt music videos from any mandatory
requirements.  HBO recommends blanket exemptions for live and interstitial programming, as well
as pay-per-view and pay-per-channel premium services.  

     65.  The Wireless Cable Association International ("WCA") requests exemption of
locally-originated programming, citing the limited production budgets and resources available to
such program producers.  Along similar lines, the Association of America's Public Television
Stations ("APTS") requests that the Commission take into account the limited operating budgets of
public television stations in considering standards for exemptions or waivers of mandatory
captioning for locally produced programming.  ALTS notes that the enormous costs involved with
captioning at the station level could exert substantial influence over a station's programming
decisions, forcing local stations to forego locally-produced programming in favor of pre-packaged,
captioned programming which may not be responsive to the needs, tastes and interests of local
viewers.

     66.  Broadcast and cable providers also claim that a variety of technical issues argue
against captioning sports in general, and specifically regional sports.  These include:  technical or
logistical problems with delivering different games to affiliates in various parts of the country at the
same time; lack of stenocaptioning services in regions where particular games will be televised,
making it impossible for the captioner to see the game and caption it in real-time; and lack of
encoding equipment at the site from which the local programming is transmitted by uplink.  In
addition, providers assert that sporting events are essentially visual, with statistics and progress
typically indicated by graphics, thereby eliminating or reducing the need for captioning of such
programming.  Providers further claim that sports and other live programming is perishable,
generally having no residual market, so that production costs may not be spread out over multiple
showings, and contend that there is no financial incentive to caption such programs.  However,
we observe that much national sports programming is captioned despite these issues, and, as reported
in the comments, CBS provided real time captioning of the entire 1995 and 1996 NCAA Men's
Basketball Championships, in a joint effort among several funding and captioning resources.

     67.  While providers and program producers raise concerns associated with captioning
certain programming, commenters representing the hearing disabled are in favor of mandatory
captioning of all programming, stating that "there is no type of programming that should be exempt
from captioning."  Captioners also want a requirement that all programming be captioned.  One
commenter points out that cable subscribers with hearing disabilities pay for full cable service even
though they can access only a small selection of cable's program offerings due to limited existing
captions.  Many commenters representing the hearing disabled specifically request mandatory
captioning for several types of programming which providers argue should be exempt from
captioning requirements, or at least subject only to limited requirements, including weather, sports,
interstitials, commercials, and locally-produced programming.  

     68.  With respect to local, live programming, one commenter with a hearing disability
points to weather and emergency broadcasts as being of great concern, noting that, without captions,
she must guess at the significance of information concerning storm alerts and instructions from
emergency management personnel.  Several commenters request that captions be required or
encouraged for all news and weather programs as well as emergency announcements.  Although
a high percentage of national and international news is captioned, commenters report problems with
local news, weather and emergency messages, which are often poorly captioned or not captioned at
all.  One commenter states that it is particularly important for locally produced programming to be
captioned so that persons with a hearing disability may fully participate in their community affairs. 
A related problem mentioned in the comments is that emergency messages that scroll across the
screen are brief, and usually refer the viewer to an upcoming weather report, which is not
captioned.

     69.  Several commenters involved in creating captions also support captioning for news
programming.  For example, CATP recommends a requirement that local news be captioned. 
Other commenters support real-time captioning as the only acceptable form of captioning for live
reports.  MCS notes that local broadcast news programs typically use teleprompter captioning
methods (i.e., ENR captioning) which, MCS argues, may be justified for smaller markets, but are
wholly inadequate in most major markets, where live coverage of local events is provided.  MCS
claims that ENR captioning provides only partial accessibility of the news, because it captions only
those portions of the news which are scripted.  Caption Colorado also encourages the adoption of
real time captioning as the only acceptable standard for news and local live programming, claiming
that real-time is the overwhelming choice of persons with hearing disabilities when given a choice
between real time or ENR.  This commenter claims that approximately 30% of what is said during
local live news broadcasts is scripted and therefore using ENR leaves substantial portions of the
news uncaptioned and inaccessible to persons with hearing disabilities.  They further assert that
late-breaking and emergency news require real-time reporting, as there is usually no time to prepare
scripts for such reports.  In this regard, they contend that the absence of real time captioning leaves
persons with hearing disabilities with only the most basic, terse warnings in emergency situations.

          2.   Request For Comment

               a.   Exemption of Classes of Video Programming

     70.  Section 713(d)(1) states that the Commission may only exempt classes of
programmers and providers from our rules where the requirement to provide closed captioning
would prove to be economically burdensome for the entire class.  While Section 713 and its
legislative history do not define the term "economic burden," we interpret this provision to permit
us to exempt those classes of programming where the economic burden of captioning these
programming types outweighs the benefits to be derived from captioning and, in some cases, the
complexity of adding the captions.  We believe the number and scope of our proposed class
exemptions must strike a careful balance between the economic burden imposed and Congress' goal
of making video programming "fully accessible." 

     71.  We seek to establish a general classification or a number of general classifications
of programming for which captioning would be economically burdensome.  We note, however, that
there are many variables that affect the costs and benefits relevant to closed captioning, and, thus we
request detailed comments regarding the appropriate class exemptions that would be consistent with
the statutory mandate to make video programming fully accessible to individuals with hearing
disabilities.    In particular we seek comment on whether a definition of economic burden should be
based on factors such as relative market size, degree of distribution, audience ratings or share,
relative programming budgets or revenue base, lack of repeat value, or a combination of factors.  
The following discusses various classes of video programming.

     72.  Foreign language programming:  We ask whether our general exemption should cover
foreign language programming.  To what extent is the captioning of such programming feasible? 
For example, are there captioners that are fluent in all other languages?  Do foreign language
programmers generally tend to have small production budgets and/or provide programming that is
viewed by a limited audience?  We note that, as is explained above, existing technology in television
receivers is only capable of decoding Latin-based alphabets and symbols.  To require non-Latin-
based alphabets (e.g., Arabic, Hebrew, Japanese) to be captioned is likely to require costly technical
upgrades that may be burdensome, if at all possible, to implement.  Accordingly, we believe that,
at a minimum, an exemption is appropriate for programming that is in languages which are not
written using a Latin-based alphabet.  We request comment on this proposed exemption and whether
this exemption should be extended to all foreign language programming, regardless of the type of
characters used to express that language in writing.  In considering this proposal, we seek
information on the benefits of captioning other foreign programming where Latin-based alphabets
may be used and that serves significant population groups, such as the Spanish-speaking population
in the U.S.  

     73.  Programming that is primarily textual in nature.  We further propose to encompass
video programming that is primarily textual within the general exemptions from our requirements
for closed captioning.  Such programming would include channels dedicated to on-screen program
schedules or guides, stock tickers and bulletin boards, and could also include selected programs
offered by other programming services.  We believe that a requirement for captioning this type of
programming is unnecessary because information is already provided visually, with little or no
relevant audio track.  We seek comment on whether the textual information currently provided by
such programming is sufficient to ensure accessibility to persons with hearing disabilities.  We also
ask commenters to consider what, if any, definition of primarily textual video programming is
needed for our rules.  

     74.  Cable access programming.  PEG access channel programming typically operates on
a relatively small production budget.  Therefore, imposing a captioning requirement may place
an economic burden on the producers of such programming.  However, we believe that some PEG
programming is of a high public interest value because it may present important governmental,
educational and community information.  We request comment on whether PEG access
programming should be encompassed by our general exemptions.  We also seek comment on
whether there are certain types of PEG access programming for which we should require captioning. 
If so, how should we distinguish between PEG access programming that should be encompassed by
our general exemptions and that which should not be exempt?  

     75.  We do not believe, however, that leased access channels should be encompassed by
our general exemptions from captioning requirements.  We do not believe that captioning
requirements for leased access channels would be economically burdensome, as it might be for PEG
access channels, since these channels are intended to serve as commercial outlets for programming. 
To some extent, commercial leased access channels are expected to be used by nationally-distributed
programming networks.  We tentatively conclude that closed captioning would not be economically
burdensome on leased access programming as a class, although there may be circumstances where
exemptions under Section 713(d)(3), the undue burden standard, might apply.  We request comment
on this tentative conclusion.  Commenters supporting the inclusion of leased access programming
within the general exemptions should consider whether there should be an exemption for some but
not all leased access programming.  

     76.  Instructional Programming.  Locally produced and distributed instructional
programming typically operates on a relatively small production budget.  Thus, a captioning
requirement may be economically burdensome to the program's providers or owners and might result
in the loss of such programming.  We are concerned, however, that such an exemption might deprive
persons with hearing disabilities of access to important educational programming.  We seek
comment on whether such programming should be encompassed by our general exemptions.  We
also request comment on whether there are alternatives to an exemption for this class of
programming that would allow it to be closed captioned without imposing significant economic
burdens that would result in a loss of certain programs.  With respect to nationally-distributed
instructional programming, we note at least some of this programming may be prerecorded and have
repeated showings.  Should such programming be encompassed by our exemptions from closed
captioning requirements? 

     77.  Advertising.  There are several types of advertising including national and local short
form advertising (i.e., traditional commercials) and local and national long form advertising (e.g.,
infomercials).  We seek comment on whether all advertising or certain types of advertising should
be encompassed by our general exemptions.  We seek comment on whether a requirement to close
caption commercials would impose an economic burden relative to the typical production budgets
for such commercials, and the typical revenues the commercials generate.  Could captioning costs
be offset by the revenues produced by the commercials?  Alternatively, would a captioning
requirement significantly raise the cost of certain advertising, especially local advertising that
reaches small audiences which is currently inexpensive, and prevent some entities from advertising? 
We note that there is likely to be a marketplace incentive for advertisers to caption their commercials
to attract consumers with hearing disabilities and seek comment on this assumption.  We observe
that many national advertisers have already recognized the benefits of captioning their
commercials.  We further believe that there will be a greater incentive for advertisers to caption
their commercials once a significant amount of programming is captioned, as uncaptioned
commercials will seem inconsistent with surrounding captioned programming for the individuals
with hearing disabilities who are attracted to the programming because of its accessibility.  We also
note that in some advertising a portion of the information is provided textually or graphically and
may serve as an alternative closed captioning.  

     78.  Home shopping programming.  We are aware that home shopping channels are
similar in some ways to commercials in that they are intended to sell products and present a portion
of the information provided to consumers in textual form.  However, we do not believe that all of
the descriptive material and information provided by home shopping program hosts is currently
available in textual form on the television screen.  Thus, we do not propose to include home
shopping programming in the classes of programming exempt from our captioning requirements. 
We seek comment on this tentative conclusion.  Commenters who contend that this requirement is
not feasible or would pose an economic burden on the providers or owners of such programming are
requested to provide specific support for their contentions, including relevant cost data.

     79.  Interstitials and promotional advertisements.  From the information we have gathered,
we conclude that most interstitials and promotional advertisements provide their principal
information in textual form.  Thus, given the number of such announcements and the short time
period in which they are produced, we tentatively conclude that the burden of requiring captioning
of interstitials and promotional advertisements outweighs the benefit of a mandatory requirement
for captioning, and thus interstitials and promotional advertisements should be included in our
general exemptions.  We seek comment on this tentative conclusion.  We believe, however, that the
basic information provided by these types of announcements should be displayed in some textual
or graphic form in order to provide accessibility to persons with hearing disabilities.

     80.  Political advertising.  Political advertising is important programming in that it
provides information about candidates for public office, which is beneficial to persons with hearing
disabilities, as it is for all Americans.  Requiring parties to close caption political advertising,
however, could impose an economic burden and, thus, might prevent some of this type of
advertising, especially political advertising for local elections.  Accordingly, should this
programming be included within our general exemptions?  If it is not exempt, to what extent would
a requirement for closed captioning of political advertisements be inconsistent with the anti-
censorship provisions of Section 315 of the Communications Act? 

     81.  Fundraising activities of noncommercial broadcasters.  We tentatively conclude that
live portions of noncommercial broadcasting stations' fundraising activities, e.g., pledge drives and
on-air auctions, should be included within the classes of programming exempt from our closed
captioning requirement.  Noncommercial stations use this type of programming in lieu of
commercials to raise money to support their activities.  We are aware that noncommercial stations
generally have fewer resources than commercial providers to raise money to finance their operations
and the economic burden of captioning live fundraising activities might outweigh the benefits of
captioning such programming.  We seek comment on whether there are less economically
burdensome alternatives to closed captioning for such programming that would ensure accessibility. 
For example, should we require periodic textual graphics or captioning during a fundraising program
that would summarize the highlights of the program as an alternative to full closed captioning?  We
seek comment on this proposal and solicit alternative suggestions.

     82.  Music programming.  There are numerous types of music included in video
programming and musical programming.  We believe that some types of music should be captioned,
while it would be reasonable to include other types of music programming in the classes of exempt
programming.  With respect to music videos, we note that many of these programs are already being
captioned, and that the lyrics of many songs are readily available for use by off line captioners. 
Music videos are not highly perishable, and often have significant production budgets, sometimes
along the lines of a short film.  The cost of captioning music videos can be spread over the many
times they are distributed and thus a requirement to caption them should not be overly burdensome. 
Thus, we tentatively conclude that these programs should be captioned.  We seek comment on this
proposal.  However, we tentatively conclude that several types of music should be encompassed by
the classes of programming we exempt from captioning requirements.  We believe that background
music, and performances where the music is primarily instrumental (e.g., symphony concerts,
ballets) should be encompassed by the classes of programming we exempt.  We seek comment on
whether live performances should be included within our general exemptions.  With respect to
background music, such as theme songs from television shows and feature films, we recognize that
the lyrics may be important to the enjoyment of the programming and seek comment on whether we
should require them to be captioned.  We propose, however, to require that any rebroadcast of a live
musical performance (that is not primarily instrumental) be captioned as it would be a prerecorded
program.  We seek comment on these tentative conclusions.  

     83.  Weather programming.  We propose not to include weather programming in our
general exemption.  Although there is often graphic information included in this programming, we
believe that a significant amount of information is conveyed in the audio portion which is not
captured by the graphics accompanying the report.  Also, we note that satellite pictures, which are
an integral part of most weather programs, are difficult to comprehend without the meteorologist's
oral explanation.  Given that weather conditions can and often do directly affect health and safety
concerns, we tentatively conclude that it would be inappropriate to include weather programming
in our general exemptions from our captioning requirements.  In addition, to the extent that
weather reports are part of local news programming, we do not believe that the captioning is
economically burdensome.  Weather reports can be scripted and included in the teleprompter text
that is converted to captioning at virtually no cost using the ENR method of captioning that is
common at many local stations.  We seek comment on this tentative conclusion.  We also seek
comment as to the feasibility of captioning weather programming, and whether the cost of such
captioning would outweigh its utility.  

     84.  Sports programming.  We do not believe that all sports programming should be
encompassed by our general exemptions.  There is no evidence that the captioning of sports
programming, in general, is economically burdensome.  We note that a significant amount of
nationally distributed sports programming has been captioned voluntarily as has some regional sports
programming.  We also do not believe that all local sports programming should be exempt from
captioning because, to some extent, this type of programming may involve major league sports
teams, large production budgets, and may achieve large audiences comparable to that of some
national services.  There may be, however, types of sports programming for which a closed
captioning requirement would be burdensome, such as locally produced college or high school
sports. Should those types of sports programming for which closed captioning would be
economically burdensome fall under our general exemptions?  In addition, we seek comment on
whether there are alternatives to a closed captioning requirement for this type of programming, e.g,
presentation of the basic information in textual or graphical form, that would be less burdensome
than a closed captioning requirement.  

          b.   Exempt Classes of Video Providers 
 
     85.  While the statute provides that we also may exempt classes of video providers, we
believe that a blanket exemption even for very small providers is unnecessary, because the various
providers distribute the same types of programming to consumers, and all classes of providers appear
to have the technical capability to deliver closed captioning to viewers intact.  We request comment
on whether this conclusion is sound. 

     E.   Exemptions Based on Existing Contracts

          1.   Background

     86.  Section 713(d)(2) exempts video programming providers or owners from our closed
captioning requirements to the extent that such requirements are inconsistent with existing
contracts.  Specifically, Section 713(d)(2) states:

     a provider of video programming or the owner of any program carried by the
     provider shall not be obligated to supply closed captions if such captions would be
     inconsistent with contracts in effect on the date of enactment of the
     Telecommunications Act of 1996 [February 8, 1996], except that nothing in this
     section shall be construed to relieve a video programming provider of its obligations
     to provide services required by Federal law.

          2.   Request For Comment

     87.  The language of Section 713(d)(2) exempts programming from any closed captioning
requirements we may adopt, if applying such requirements would be "inconsistent" with an existing
contract.  We tentatively conclude that contracts which affirmatively prohibit closed captioning
would fall within this exemption and we seek comment on this conclusion.  Such contracts do not
appear to be typical but may have been entered into when the program creator wishes to maintain
total creative control over the product involved.  A provider that entered into such a contract could
find itself unable to use the product at all if this exemption provision did not exist. 

     88.  However, we recognize that it is possible that contracts may contain more general
language, not explicitly mentioning closed captioning, that might nonetheless be inconsistent with
captioning.  We seek comment on the types of provisions that might be contained in programming
contracts that would be inconsistent with a captioning requirement.  We seek such comment in order
to determine whether we need to identify types of contract provisions that may be eligible for
exemption under Section 713(d)(2) in addition to those that specifically prohibit closed captioning. 
We note that a broad interpretation of this provision, which might exempt all existing contracts other
than those that specifically provide for captioning, may be contrary to Congress' intent to increase
the availability of captioning.  Under this latter interpretation, a large volume of programming
covered by long term contracts, but not yet produced, would never be captioned.  

          F.   Exemptions Based on the Undue Burden Standard

          1.   Background

     89.  Section 713(d)(3) states that:

     a provider of video programming or program owner may petition the Commission
     for an exemption from the requirements of this section, and the Commission may
     grant such petition upon a showing that the requirements contained in this section
     would result in an undue burden.

 Section 713(e) defines undue burden:

     Undue Burden.- The term "undue burden" means significant difficulty or expense. 
     In determining whether the closed captions necessary to comply with the
     requirements of this paragraph would result in an undue economic burden, the factors
     to be considered include-
          (1)  the nature and cost of the closed captions for the programming; 
          (2)  the impact on the operation of the provider or program owner;
          (3)  the financial resources of the provider or program owner; and 
          (4)  the type of operations of the provider or program owner. 

     90.  Section 713(d)(3) allows individual video services providers or owners of
programming to seek an exemption from the closed captioning requirements based on their particular
circumstances.  While Section 713(d)(1) permits the Commission to exempt an entire class of
programming or video provider from its closed captioning rules, this provision allows the
Commission to look at specific circumstances faced by an individual video service provider or
program owner.  Section 713(d)(3) provides for the Commission to establish a procedure to consider
exemptions from our closed captioning rules on a case-by-case basis and to tailor a remedy to fit
those circumstances.  Significantly, the language of this provision does not limit the Commission
to considering only these factors, but rather seems to invite the consideration of other relevant
factors.  According to the legislative history, Congress intended to permit the Commission to balance
the need for closed captioned programming against the possibility of inhibiting the production and
distribution of programming and thereby restricting the diversity of programming available to the
public.
     
          2.   Request For Comment

     91.  The Undue Burden Standard/Factors.  We request that commenters address the factors
the Commission should consider when deciding whether particular petitions for exemptions based
on undue burden should be granted.  As already noted, the specific standard for an exemption is
whether the captioning would involve "significant difficulty or expense" and Congress identified
four factors that are to be considered in addressing this question.  Because the statute states that the
factors to be considered "include" the four listed factors, the statute seems to invite the Commission
to consider other relevant factors besides those specifically listed in Section 713(e).  Thus, we ask
commenters to identify additional factors that might demonstrate that a closed captioning
requirement imposes an undue burden on a video programmer or provider and should be exempt
from a captioning requirement.  Commenters supporting wider discretion for parties seeking an
exemption should offer guidelines to assist parties seeking relief and the Commission in its decision
making process. 

     92.  How the Exemption Factors Should be Applied.  Some commenters have proposed
standards for individual exemptions based on the undue burden criteria.  The Massachusetts
Commission for the Deaf and Hard of Hearing urges the Commission to adopt an objective standard
to determine if captioning is an undue burden on a small entity.  Conversely, one commenter
contends that formulas not be used because "creative bookkeeping" might be used to manipulate
such a standard.  NAD suggests that the Commission avoid specific standards and instead require
a relatively high threshold for programmers to demonstrate an undue burden.  Furthermore, NAD
suggests the Commission adopt the undue burden standard provided in the ADA as a model. 

     93.  The League for the Hard of Hearing ("LHH") suggests that the undue burden test
should involve a cost/benefit analysis.  Specifically, the LHH proposes the Commission determine
an acceptable percentage of production costs for captioning.  Productions for which the cost of
captioning would exceed that percentage would not be required to be captioned.  The LHH also
suggests that at times the Commission should consider the percentage of the advertising budget
required to provide closed captioning.  One commenter proposes that programs with production
budgets of less than $25,000 should be eligible.  They also suggest that captioning should be
required if it would represent less than 10% of the production budget.

     94.   NAB suggests that the Commission should employ this provision to allow stations
to experiment with other less expensive means of achieving the end result such as on-screen "bugs"
containing score and other information for sports programming.  A&E Television Networks
("A&E") suggests that in formulating an undue burden standard, the Commission should consider
much the same type of economic factors to be considered in developing exemptions under Section
713(d)(1). 

     95.   To the extent objective criteria can be developed, we believe that would facilitate
action on exemption requests.  Thus, we invite commenters to suggest what objective criteria might
be applicable.  Commenters should address whether or not we should require parties to provide
specific facts or meet objective tests to prove an undue burden or whether petitioners should have
wider discretion in demonstrating that, under their specific circumstances, the closed captioning
requirements would constitute an undue burden.  Commenters supporting objective tests should
provide specific examples of the kinds of financial, demographic or other data they believe we
should consider when making these determinations.  Commenters also should provide specific
parameters for evaluating these data.  Commenters supporting wider discretion for parties seeking
an exemption should offer guidelines to assist both parties seeking relief and the Commission in its
decision making process.  We also seek comment on what specific information petitioners should
provide in order to demonstrate the factors needed to prove an undue burden. 

     96.  As noted, NAD urges that we adopt rules patterned after the ADA's undue burden
standard.  However, we do not believe that the ADA process is directly transferable.  In this
regard, we note that there are significant differences between the ADA undue burden standard and
the four factors adopted by Congress in Section 713.  However, we seek comment on what, if any,
portion of the ADA process may provide useful insight in the context of the captioning exemption. 
 

     97.  Finally, we seek comment on the possibility of allowing undue burden exemptions
subject to conditions in some instances.  This would allow us to require an alternative means of
serving persons with hearing disabilities while waiving our closed captioning requirements.  For
instance, a small local station might seek an exemption from closed captioning its local news.  In
some situations, we might find it appropriate to grant an exemption subject to a condition that the
station provide, for example, greater use of textual graphics.  Such conditional exemptions would
allow us to encourage alternative (though admittedly less desirable) means of providing service to
persons with hearing disabilities in situations where no service would otherwise be available.

     98.  Procedure.  In developing procedures and standards for evaluating individual petitions
for exemption from our closed captioning rules, we must consider the administrative burden on the
parties to such a proceeding.  We particularly note that in many situations, the parties most likely
to seek an exemption will be smaller entities with limited financial resources.  In order to
accommodate the needs of such entities, we seek to establish procedures that minimize
administrative burdens while ensuring that the statutory requirements for such showings are fulfilled. 
We are also concerned that our procedures allow for quick and efficient resolution of these matters.

     99.  We propose to use standard "special relief" or waiver type procedures that are familiar
and readily accessible to many of the parties that might seek such an exemption.  An exemption
requested under Section 713(d)(3) should allow for public notice and opportunity for public
comment on the petition and factual information would have to be supported by affidavits. 
Furthermore, such an individualized process will allow the Commission to determine that the
programming provider or owner meets some criteria that justifies waiving the rule for a given reason
and will further allow the Commission to fashion a remedy designed for those circumstances.  The
exemption process would permit the Commission to grant a party a partial waiver or temporary
waiver if warranted instead of a complete exemption from the rules.  For example, a cable channel
might distribute mostly foreign language programming which might be exempt.  If, however, it also
were to distribute a limited amount of English language programming, it might seek a waiver of the
rule in order to avoid captioning a relatively small portion of its programming if doing so would
constitute an undue burden.

     100. In the alternative, we could allow video services providers or owners to petition for
exemptions as part of more widely applicable rulemakings.  To the extent that rules of general
applicability could be adopted to address exemptions for broader classes of programming or
providers than what fall within our general exemptions, this may be more efficient and less
cumbersome than individual petitions for waiver.  This could conceivably result in fewer
proceedings since the result of one rulemaking could be applied to many different situations and
would be applicable to all similarly situated video providers. 

     101. We also solicit comment on which parties should be permitted to seek an exemption
from our closed captioning requirements.  Specifically, should we limit the process to video service
providers or owners or should we also permit program producers and syndicators to seek an
exemption?  Allowing producers or syndicators to petition for an exemption could be more efficient
since the resulting exemption could allow the programming in question to be more widely
distributed.  Accordingly, commenters should address the advantages and disadvantages of allowing
different parties access to the exemption process.

     102. Finally we seek comment on whether exemptions granted under Section 713(d)(3)
should be for a limited period of time only.  This would allow the Commission to periodically
reevaluate a particular waiver to determine if it is still warranted.

     G.   Standards for Accuracy and Quality

          1.   Background

     103. Section 713 does not require the Commission to adopt rules or standards for the
accuracy or quality of closed captioning.  However, in the Notice of Inquiry, we sought comment
on these issues based on reported problems with existing closed captions.  As the Report indicates,
viewers recount numerous problems with closed captioning.  These include problems associated
with the depiction of the audio portion of a video program, such as the accuracy of the transcription
of the dialogue, appropriateness of display speed in terms of the audience's reading capability,
spelling and grammatical accuracy, and overall completeness of the captioning service in terms of
not omitting critical portions of the dialogue.  There are also technical problems such as the
captions not being delivered intact, captions not synchronized with the video portion of the program,
captions ending before the end of the programming, programming without captions even though the
program indicates captioning, or captions transmitted during one offering of the program but not
another. 

     104. Inherent in a captioning obligation is the possibility of some definition of a minimal
level of quality necessary to demonstrate compliance with the requirement.  Thus, we believe that
it is well within the Commission's discretion to consider whether to adopt rules, standards, or
guidelines that address these matters. 

     105. We observe that commenters disagree on the effect that mandatory captioning will
have on the quality and accuracy of closed captioning.  Some argue that market forces should be
allowed to control this aspect of captioning, thereby both increasing the quality of captioning and
keeping costs down.  These commenters contend that it is in the interest of program producers and
providers to ensure that the captioning included in their programming is of high quality.  Others
believe that mandatory captioning without quality standards will promote a decline in captioning
quality.  NCI, one of the larger caption suppliers, states that the Commission should consider
minimum quality standards, sufficient to ensure consistent, adequate service to the public without
impairing competition among captioning services.  However, MCS, another large supplier of
captioning, disagrees and states that standards are unnecessary.  

     106. Numerous commenters representing the hearing disabled state that there is a need for
the Commission to adopt minimum standards or guidelines to ensure that individuals with hearing
disabilities have equivalent access to video programming as is available to other viewers.  They
also assert that closed captioning should be treated like the soundtrack, inseparable from the
program.  Thus, they contend that guidelines are needed to address the accuracy, content, style,
and readability, including whether captions should be verbatim.  These commenters recommend
the following guidelines for the Commission's consideration:

     Caption data and information contained in the soundtrack must be delivered intact
     throughout the entire program.  

     Captioning must transmit information about the audio portion of the program which is
     functionally equivalent to the information available through the program's soundtrack. 

     Captions must include all elements of the soundtrack necessary for accessibility, including
     verbal information, identification of the speaker (if it is not apparent), sound effects, and
     audience reaction.

     Standards for proper spelling, grammar, timing, accuracy, and placement should be devised.

     Captions should be provided in the style and standards that are appropriate for the particular
     type of programming that is being captioned, e.g., real-time captioning should be required
     for local newscasts and other live programming. 

     Captioning must be reformatted as necessary if the programs on which they are included
     have been compressed or edited. 

     Captioning must remain intact as it moves from its point of origination throughout the
     distribution chain to the local video provider.  Program tapes should be labeled as to whether
     they are captioned to ensure that the closed captioned master tape is used for duplication as
     the program moves throughout the distribution chain. 

     Open character generated announcements must not obscure program captioning, and vice
     versa.  Standards must be developed to ensure the appropriate placement of these scrawls. 

     107. In addition, commenters suggest that the Commission seek input from consumers
with hearing disabilities in establishing these guidelines and to review the guidelines to ensure that
they are having the desired effect.

     108. Commenters also address whether captioning services or individuals providing the
captioning should meet certain credentials, especially for real time captioning.  Several
commenters state that criteria should be established to certify caption writers.  For example, one
commenter proposes that real time caption writers be capable of a minimum rate of 250 words per
minute with almost no errors and that off-line captioning should contain no errors.  In order to
eliminate the problems associated with electronic newsroom captioning, it has been recommended
that the Commission require local news and other live programming to be captioned by real time
stenocaptioners.  Currently, the number of real time captioners is small. 

     109. With respect to the technical quality of existing closed captions, we observe that the
basic technical compatibility among captioning services is assured by virtue of Section 15.119 of
our rules, which sets forth the technical requirements for transmission and display of closed
captioning.  In addition, Section 76.606 requires that cable operators deliver existing captions
intact.  However, it is reported that transmission problems result in missing or incomplete captions. 
Sometimes captions are stripped when the signal from the point of origination passes through a local
provider.  This results from an engineering monitoring error at the provider.  Examples of this
problem are the loss of captions at the end of network programs or the failure of cable companies
to turn on equipment needed to transmit existing captions.  In addition, as programming is
duplicated or prepared for transmission, improperly adjusted signal processing equipment can delete
line 21, introduce errors, or result in captions not being synchronized with the video portion of the
program.  Time compression of programming to fit it into specific time blocks may also destroy
captions.  Finally, interference and poor quality reception may impair caption quality, sometimes
causing individual letters to appear as square white blocks.  Open character generated
announcements, such as emergency warnings, school closing and weather advisories can be obscured
by the captions or vice versa.
     
               2.   Request For Comment

          110. We believe that the technical quality issues should be addressed by the
Commission.  Current technology is sufficient to ensure that every video programming provider is
capable of transmitting the captioning included with the programming to consumers.  The loss of
captioning at the end of the programming and other reported technical problems appear to be the
result of lax maintenance and monitoring of equipment.  We believe that program providers should
be responsible for the transmission of the captioning and must take whatever steps are necessary to
monitor their equipment and signal transmission to ensure that captioning is included with the video
programming that reaches consumers.  Thus, we propose to adopt guidelines relating to the technical
quality of closed captioning.  We note that Section 76.606 of the Commission's rules requires cable
operators to deliver existing captions intact.  We propose to extend the provisions of this rule to all
video program providers, regardless of distribution technology, to ensure that programming with
closed captions is delivered to viewers in a complete manner.   

     111. With respect to the non-technical aspects of quality and accuracy, however, it is our
tentative view that we should not attempt to impose standards at the start of our phase-in of closed
captioning regulation.  The non-technical aspects of the quality of captioning include such matters
as accuracy of transcription, punctuation, placement, identification of nonverbal sounds, pop-on or
roll-up style, verbatim or edited for reading speed, and type font.  We seek comment as to whether
accuracy of spelling in captions should be considered a non-technical issue, or whether our
captioning rules should include requirements for spelling accuracy.  In this context, we note that
spelling accuracy is included in the minimum standards for TRS.  We know that the quality of
captioning is a matter of considerable importance to those viewing captions.  We recognize that
captions must provide information substantially equivalent to that of the audio portion of a video
program in order to be useful and ensure accessibility to individuals with hearing disabilities. 
Captions also should not interfere with the viewability of the video portion of the program. 
However, we believe that there are good reasons to defer action on this issue in order to provide time
for the captioning community to adjust and adapt to the new environment created by our rules.  If,
after a period of experience, it becomes apparent that quality levels are unsatisfactory, we can revisit
this issue.

     112. This tentative judgment is based on several considerations.  We are concerned about
the availability of captioning services and stenocaptioners, the cost of captioning the significant
amounts of video programming we propose to require to be captioned, and the difficulty of
developing and administering quality standards.  

     113. It is evident that there is going to have to be an increase in the resources and
individuals involved in the captioning process.  Until now, much captioned programming has been
prerecorded -- prime time series, movies, first run syndication programming, etc.  Under the rules
we propose, we will require increasing amounts of live programming to be captioned where the
captions must be created simultaneously with the programming.  Live captioning involves different
and more advanced skills than those needed for prerecorded programming.  It is unclear that the
number of stenocaptioners with advanced training to provide such captions at the highest quality
levels is sufficient at this time to meet the expanded demand for stenocaptioning services that our
proposed rules will engender.  Thus, at the beginning, as experience is being gained, quality
captioning service may simply not be available.  However, we believe that to postpone
implementation of closed captioning regulations would disserve those individuals who will benefit
from the availability of captioning.

     114. Moreover, in some contexts it may be virtually impossible to meet very high levels
of accuracy.  As the record indicates, real time captioning is difficult and requires considerable
training and expertise.  In addition, accurate real time captioning of complex, highly technical or
unfamiliar subject matter may be dependent on the availability, quality and breadth of computer
dictionaries that are activated by the steno machine inputting the captions.  To impose a standard of
quality on the captioning of such programming might result in the loss of service, which is not the
intent of Section 713 or our rules.  Thus, adequate but not high quality captions may need to be
acceptable for at least the short term.

     115. The cost of closed captioning can be expensive, especially for high quality captioning
of live programming.  Imposing a higher cost quality requirement would cause captioning to be more
"economically burdensome" and thus necessitate more exemptions from the requirement and a lower
overall availability of captioning.  As discussed above, the cost of captioning can vary from $120
to $2500 per hour, based primarily on the quality demanded.  When considered in the context of the
large amounts of programming to be captioned, the difference between the minimum and maximum
cost of captioning can be substantial.  For example, a broadcast station that produces three hours of
live local programming a day (e.g., local news broadcasts), would need to spend $131,000 a year to
caption that programming at the lowest reported rate for real time captioning of $120 an hour, but
$1,310,400 a year at $1200 per hour, the highest estimated rate for real time closed captioning.  


     116. Administrative oversight of quality issues also would pose difficult problems.  We
believe that it would be difficult to establish criteria that would provide threshold measures of the
usefulness of the captioning, such as a maximum number of typographical errors or misspelled
words per hour of programming.  At this point in the development of closed captioning, it appears
that there is a diversity of opinion even within the community of hearing disabled and among
captioning services regarding what should be considered high quality and accurate closed captions. 
Moreover, there does not appear to be a consensus regarding the best style or manner of
captioning.  Thus, at the outset at least, we believe it preferable for those providing captioning to
get the basic infrastructure in place and for the Commission to use its resources to monitor and
administer the basic obligations.  We would, however, encourage industry groups and individuals
with hearing disabilities to work together to establish voluntary standards similar to the guidelines
proposed in the comments. 

     117.   Furthermore, we are concerned that regulation of "quality" could hinder the
development and expansion of closed captioning unnecessarily, and unintentionally limit the number
of programs and the types of programs that will be captioned.  While it appears, for example, that
a verbatim transcription is generally to be preferred, this is not always the case.  In some
circumstances, for example, spoken words may need to be edited for reading speed.  Children's
programs, for example, may be edited for a slower reading speed.  If quality were defined in terms
of the accuracy of a verbatim transcription, any regulations we adopt could interfere with the
captioners' art.  Additionally, we do not have clear evidence regarding whether it would be better not
to have captions at all for a considerable period of time or for several limited categories of
programming rather than captions with some errors which allow the viewer the opportunity to take
advantage of available programming, albeit not perfect in terms of the closed captioning.

     118. We further believe that the adoption of rules that require closed captioning as an
integral part of video programming will provide a marketplace incentive for program providers and
producers to distribute the best quality captioning possible.  It appears that all of the parties involved
have incentives to increase the quality of captioning within the allowable cost constraints. 
Moreover, as the demand for captioning increases, we expect competition among caption suppliers
also will serve to set an industry standard for acceptable levels of quality and accuracy.  While not
proposing specific standards now, we propose to monitor the closed captioning that results from the
implementation of our rules and to revisit this issue in the future if we believe that standards for
quality and accuracy may be warranted.

     119. We seek comment on these tentative conclusions not to adopt specific standards at
this time.  We ask that parties who disagree with this approach provide specific standards or
guidelines that could be implemented, monitored, and enforced as we phase in our closed captioning
requirements.  Commenters are asked to consider the costs of implementation of any standards they
proposed, the effect on the quantity of captioning that can be produced under the proposed standards,
and the availability of captioners with the required skill levels to fulfill such requirements.

     120. We also do not propose to establish minimum credentials for those employed to
provide closed captioning for video programming.  We believe imposition of such a standard would
unnecessarily delay implementation of any closed captioning requirements, without any evidence
that only those passing a specific test are the best qualified to provide this service.  Moreover, we
expect that the quality of closed captioning will improve as the amount of captioning increases and
that the marketplace will establish standards for those employed to prepare captions.  We seek
comment on this tentative conclusion.  Commenters who disagree with this assessment are asked to
provide specific evidence for the need for such standards and to provide precise standards for caption
providers that the Commission could implement and enforce.

     121. We further conclude that it is not appropriate or necessary to restrict the captioning
methodology used to achieve the goal of maximizing available captioning as long as the criteria for
captioning proposed above are met.  We seek comment on this conclusion.  We are concerned that
any restrictions on the method of captioning would prevent certain types of programming from being
captioned.  For example, we note the drawbacks of the ENR method, especially when not all aural
portions of a program are scripted.  While we would prefer that program providers use other methods
that permit more complete captioning, we are aware that this method has an advantage over other
methods in that once an initial investment is made in equipment and software, it is relatively cost
free.  Using this method of captioning, material that might otherwise not be captioned could be
captioned.  In the alternative, every broadcast station with local programming and cable system with
local origination programming would need to employ staff captioners, which could be prohibitively
expensive and result in the loss of programming.  Thus, we believe that, at least for the short term,
we should not prevent program providers from using this or any other method.  We seek comment
as to whether we should revisit this issue during the implementation period established by our rules. 
Commenters supporting regulation of the methods used for closed captioning should provide
information regarding the rationale for limiting the permissible captioning methodology.  In
addition, comments should set forth specific proposals for such requirements. 

IV.  ENFORCEMENT AND COMPLIANCE REVIEW MECHANISMS

     122. We tentatively conclude that any closed captioning requirements we ultimately adopt
will best be enforced through the existing types of complaint processes.  We propose to permit
private parties and government agencies to file complaints with the Commission regarding the
implementation of our transition requirements for closed captioning.  We also propose to require the
complaining party to notify the video programming provider of the complaint.  We propose to
require that all complaints be accompanied by the best available documentation, such as viewing
logs or video tapes.  If we determine that the complaint appears valid, we would notify the video
programming provider of this determination.  The video programming provider would then be
permitted to respond to the complaint.  We seek comment on this proposal.  Commenters should
address the potential effectiveness of the proposed process.  We also encourage commenters to
suggest modifications to this process which may improve its effectiveness and efficiency.  Finally,
commenters should address what elements we should require for a valid complaint.  For instance,
in the case of subscriber complaints, should we require more than one complaint.  We note that the
legislative history provides that the remedies under Sections 207 and 208 of the Communications
Act are available to enforce compliance with Section 713.  We seek comment on the applicability
of these provisions.

     123. We are also concerned with maximizing administrative efficiency and minimizing
complaints that are better resolved by the video program provider or through informal processes. 
Accordingly, we seek comment on a proposal to require complainants to first notify the video
programming provider before filing with the Commission and allowing the video programming
provider a period of time to resolve the complaint at the local level.  Under this proposal, a party
would be permitted to file with the Commission only after the video provider fails to respond to the
complaint or does not satisfactorily resolve the problem.  We believe that this proposal may serve
to minimize the administrative burden on all parties involved in the process, including the
Commission.  We seek comment on this alternative as well as any others that might minimize the
administrative burden and potential delays in resolution of valid complaints.

     124. We further seek comment on alternative methods or information needed to verify
compliance.  We could require that each entity responsible for compliance with our closed
captioning rules retain in a public file, or have available on request, records sufficient to verify
compliance.  For example, we could require video programming providers to demonstrate their
compliance by placing information regarding the amount of closed captioned programming they
distribute in a public file.  Commenters should address the possible effectiveness of this type of
procedure.  We seek comment on this mechanism and how it might be implemented.  

V.   ADMINISTRATIVE MATTERS

     A.   Initial Regulatory Flexibility Analysis for the Notice of Proposed Rulemaking

     125. Pursuant to Section 603 of the Regulatory Flexibility Act ("RFA"), the Commission
has prepared the following initial regulatory flexibility analysis ("IRFA") of the expected impact of
these proposed policies and rules on small entities.  Written public comments are requested on the
IRFA.  These comments must be filed in accordance with the same filing deadlines as comments on
the rest of the Notice but they must be have a separate and distinct heading designating them as
responses to the IRFA.  The Secretary shall cause a copy of this Notice to be sent to the Chief
Counsel for Advocacy of the Small Business Administration ("SBA") in accordance with Section
603(a) of the RFA.

     126. Reason for Action and Objectives of the Proposed Rule:  The 1996 Act requires the
Commission to promulgate rules designed to maximize the availability of closed captioned
programming.  The Commission is issuing this Notice to seek comment on proposed rules
intended to implement this provision of the 1996 Act.

     127. Legal Basis: This Notice is adopted pursuant to Sections 4(i), 4(j) and 713 of the
Communications Act of 1934, as amended, 47 U.S.C.  154(i), 154(j), 613.

     128. Description and Number of Small Entities Affected:  The Regulatory Flexibility Act
defines the term "small entity" as having the same meaning as the terms "small business," "small
organization," and "small business concern" under Section 3 of the Small Business Act.  A small
business concern is one which:  (1) is independently owned and operated; (2) is not dominant in its
field of operation; and (3) satisfies any additional criteria established by the SBA.
 
     129. Small MVPDs:  SBA has developed a definition of a small entity for cable and other
pay television services, which includes all such companies generating $11 million or less in annual
receipts.  This definition includes cable system operators, closed circuit television services, direct
broadcast satellite services, multipoint distribution systems, satellite master antenna systems and
subscription television services.  According to the Bureau of the Census, there were 1423 such cable
and other pay television services generating less than $11 million in revenue that were in operation
for at least one year at the end of 1992.   We will address each service individually to provide a
more succinct estimate of small entities. We seek comment on the tentative conclusions below.   

     130. Cable Systems:  The Commission has developed its own definition of a small cable
company for the purposes of rate regulation.  Under the Commission's rules, a "small cable
company," is one serving fewer than 400,000 subscribers nationwide.  Based on our most recent
information, we estimate that there were 1439 cable operators that qualified as small cable
companies at the end of 1995.  Since then, some of those companies may have grown to serve over
400,000 subscribers, and others may have been involved in transactions that caused them to be
combined with other cable operators.  Consequently, we estimate that there are fewer than 1439
small entity cable system operators that may be affected by the decisions and rules proposed in this
Notice.

     131. The Communications Act also contains a definition of a small cable system operator,
which is "a cable operator that, directly or through an affiliate, serves in the aggregate fewer than 1%
of all subscribers in the United States and is not affiliated with any entity or entities whose gross
annual revenues in the aggregate exceed $250,000,000."  The Commission has determined that
there are 61,700,000 subscribers in the United States.  Therefore, we found that an operator serving
fewer than 617,000 subscribers shall be deemed a small operator, if its annual revenues, when
combined with the total annual revenues of all of its affiliates, do not exceed $250 million in the
aggregate.  Based on available data, we find that the number of cable operators serving 617,000
subscribers or less totals 1450. Although it seems certain that some of these cable system operators
are affiliated with entities whose gross annual revenues exceed $250,000,000, we are unable at this
time to estimate with greater precision the number of cable system operators that would qualify as
small cable operators under the definition in the Communications Act.

     132. MMDS:  The Commission refined the definition of "small entity" for the auction of
MMDS as an entity that together with its affiliates has average gross annual revenues that are not
more than $40 million for the preceding three calendar years.  This definition of a small entity in
the context of the Commission's Report and Order concerning MMDS auctions that has been
approved by the SBA.  

     133. The Commission completed its MMDS auction in March 1996 for authorizations in
493 basic trading areas ("BTAs").  Of 67 winning bidders, 61 qualified as small entities.  Five
bidders indicated that they were minority-owned and four winners indicated that they were women-
owned businesses.  MMDS is an especially competitive service, with approximately 1573 previously
authorized and proposed MMDS facilities. Information available to us indicates that no MDS facility
generates revenue in excess of $11 million annually.  We tentatively conclude that for purposes of
this IRFA, there are approximately 1634 small MMDS providers as defined by the SBA and the
Commission's auction rules.  

     134. ITFS:  There are presently 2032 ITFS licensees.  All but one hundred of these licenses
are held by educational institutions.  Educational institutions are included in the definition of a small
business.  However, we do not collect annual revenue data for ITFS licensees and are not able to
ascertain how many of the 100 non-educational licensees would be categorized as small under the
SBA definition.  Thus, we tentatively conclude that at least 1932 licensees are small businesses.  

     135. DBS:  As of December 1996, there were eight DBS licensees.  However, the
Commission does not collect annual revenue data for DBS and, therefore, is unable to ascertain the
number of small DBS licensees that could be impacted by these proposed rules. Although DBS
service requires a great investment of capital for operation, we acknowledge that there are several
new entrants in this field that may not yet have generated $11 million in annual receipts, and
therefore may be categorized as a small business, if independently owned and operated.

     136. HSD:  The market for HSD service is difficult to quantify.  Indeed, the service itself
bears little resemblance to other MVPDs.  HSD owners have access to more than 265 channels of
programming placed on C-band satellites by programmers for receipt and distribution by MVPDs,
of which 115 channels are scrambled and approximately 150 are unscrambled.  HSD owners can
watch unscrambled channels without paying a subscription fee.  To receive scrambled channels,
however, an HSD owner must purchase an integrated receiver-decoder from an equipment dealer and
pay a subscription fee to an HSD programming packager.  Thus, HSD users include:  (1) viewers
who subscribe to a packaged programming service, which affords them access to most of the same
programming provided to subscribers of other MVPDs; (2) viewers who receive only non-
subscription programming; and (3) viewers who receive satellite programming services illegally
without subscribing.  Because scrambled packages of programming are most specifically intended
for retail consumers, these are the services most relevant to this discussion.  

     137. According to the most recently available information, there are approximately 30
program packagers nationwide offering packages of scrambled programming to retail consumers. 
These program packagers provide subscriptions to approximately 2,314,900 subscribers
nationwide.  This is an average of about 77,163 subscribers per program packager.  This is
substantially smaller than the 400,000 subscribers used in the Commission's definition of a small
MSO.  Furthermore, because this an average, it is likely that some program packagers may be
substantially smaller.  We seek comment on these tentative conclusions.

     138. OVS:  The Commission has certified three OVS operators.  On October 17, 1996, Bell
Atlantic received approval for its certification to convert its Dover, New Jersey Video Dialtone
("VDT") system to OVS.  Bell Atlantic subsequently purchased the division of Futurevision which
had been the only operating program package provider on the Dover system, and has begun offering
programming on this system using these resources.  Metropolitan Fiber Systems was granted
certifications on December 9, 1996, for the operation of OVS systems in Boston and New York, both
of which are being used to provide programming.  On October 10, 1996, Digital Broadcasting
Open Video Systems received approval to offer OVS service in southern California.  Because
these services have been introduced so recently, little financial information is available.  Bell
Atlantic and Metropolitan Fiber Systems have sufficient revenues to assure us that they do not
qualify as small business entities.  Digital Broadcasting Open Video Systems however is a general
partnership just beginning operations.  Accordingly, we tentatively conclude that one OVS licensee
qualifies as a small business concern.

     139. SMATVs:  Industry sources estimate that approximately 5200 SMATV operators were
providing service as of December 1995.  Other estimates indicate that SMATV operators serve
approximately 1.05 million residential subscribers as of September 1996  The ten largest SMATV
operators together pass 815,740 units.  If we assume that these SMATV operators serve 50% of
the units passed, the ten largest  SMATV operators serve approximately 40% of the total number of
SMATV subscribers.  Because these operators are not rate regulated, they are not required to file
financial data with the Commission.  Furthermore, we are not aware of any privately published
financial information regarding these operators.  Based on the estimated number of operators and
the estimated number of units served by the largest ten SMATVs, we tentatively conclude that a
substantial number of  SMATV operators qualify as small entities.

     140. LMDS:  Unlike the above pay television services, LMDS technology and spectrum
allocation will allow licensees to provide wireless telephony, data, and/or video services.  A LMDS
provider is not limited in the number of potential applications that will be  available for this service. 
Therefore, the definition of a small LMDS entity may be applicable to both cable and other pay
television (SIC 4841) and/or radiotelephone communications companies (SIC 4812). The SBA
definition for cable and other pay services is defined in paragraph 129 supra.  A small
radiotelephone entity is one with 1500 employees or less. However, for the purposes of this Noticeon closed captioning, we include only an estimate of LMDS video service providers.

     141. LMDS is a service that is expected to be auctioned by the FCC in 1997.  The vast
majority of LMDS entities providing video distribution could be small businesses under the SBA's
definition of cable and pay television (SIC 4841).   However, in the Third NPRM, we proposed
to define a small LMDS provider as an entity that, together with affiliates and attributable investors,
has average gross revenues for the three preceding calendar years of less than $40 million.  We
have not yet received approval by the SBA for this definition.   

     142. There is only one company, CellularVision, that is currently providing LMDS video
services.  Although the Commission does not collect data on annual receipts, we assume that
CellularVision is a small business under both the SBA definition and our proposed auction rules. 
We  tentatively conclude that a majority of the potential LMDS licensees will be small entities, as
that term is defined by the SBA. 

     143. Small Broadcast Stations:  The SBA defines small television broadcasting stations
as television broadcasting stations with $10.5 million or less in annual receipts.

     144. Estimates Based on Census and BIA Data:  According to the Bureau of the Census,
in 1992, 1155 out of 1478 operating television stations reported revenues of less than $10 million
for 1992.  This represents 78% of all television stations, including noncommercial stations.  The
Bureau of the Census does not separate the revenue data by commercial and noncommercial stations
in this report.  Neither does it allow us to determine the number of stations with a maximum of 10.5
million dollars in annual receipts.  Census data also indicates that 81% of operating firms (that
owned at least one television station) had revenues of less than $10 million.  

     145. We also have performed a separate study based on the data contained in the BIA
Publications, Inc. Master Access Television Analyzer Database, which lists a total of 1141 full
power commercial television stations.  It should be noted that, using the SBA definition of small
business concern, the percentage figures derived from the BIA database may be underinclusive
because the database does not list revenue estimates for noncommercial educational stations, and
these therefore are excluded from our calculations based on the database.  The BIA data indicate
that, based on 1995 revenue estimates, 440 full power commercial television stations had an
estimated revenue of $10.5 million or less.  That represents 54% of full power commercial television
stations with revenue estimates listed in the BIA program.  The database does not list estimated
revenues for 331 stations.  Using a worst case scenario, if those 331 stations for which no revenue
is listed are counted as small stations, there would be a total of 771 stations with an estimated
revenue of 10.5 million dollars or less, representing approximately 68% of the 1141 full power
commercial television stations listed in the BIA data base.  

     146. Alternatively, if we look at owners of commercial television stations as listed in the
BIA database, there are a total of 488 owners.  The database lists estimated revenues for 60% of
these owners, or 295.  Of these 295 owners, 156 or 53% had annual revenues of less than $10.5
million.  Using a worst case scenario, if the 193 owners for which revenue is not listed are assumed
to be small, of small entities would constitute 72% of the total number of owners.

     147. In summary, based on the foregoing worst case analysis using Bureau of the Census
data, we estimate that our rules will apply to as many as 1150 commercial and noncommercial
television stations (78% of all stations) that could be classified as small entities.  Using a worst case
analysis based on the data in the BIA data base, we estimate that as many as approximately 771
commercial television stations (about 68% of all commercial televisions stations) could be classified
as small entities.  As we noted above, these estimates are based on a definition that we tentatively
believe greatly overstates the number of television broadcasters that are small businesses.  Further,
it should be noted that under the SBA's definitions, revenues of affiliates that are not television
stations should be aggregated with the television station revenues in determining whether a concern
is small.  The estimates overstate the number of small entities since the revenue figures on which
they are based do not include or aggregate such revenues from nontelevision affiliated companies.

       148. Program Producers and Distributors: The Commission has not developed a
definition of small entities applicable to producers or distributors of television programs.
Therefore, we will utilize the SBA classifications of Motion Picture and Video Tape Production (SIC
7812), Motion Picture and Video Tape Distribution (SIC 7822), and Theatrical Producers
(Except Motion Pictures) and Miscellaneous Theatrical Services (SIC 7922).  These SBA
definitions provide that a small entity in the television programming industry is an entity with $21.5
million or less in annual receipts for SIC 7812 and 7822, and $5 million or less in annual receipts
for SIC 7922.  The 1992 Bureau of the Census data indicates the following:  (1) there were 7265
U.S. firms classified as Motion Picture and Video Production (SIC 7812), and that 6987 of these
firms had $16,999 million or less in annual receipts and 7002 of these firms had $24,999 million or
less in annual receipts; (2) there were 1139 U.S. firms classified as Motion Picture and Tape
Distribution (SIC 7822), and that 1007 of these firms had $16,999 million or less in annual receipts
and 1013 of these firms had $24,999 million or less in annual receipts; and (3) there were 5671
U.S. firms classified as Theatrical Producers and Services (SIC 7922), and that 5627 of these firms
had less than $5 million in annual receipts. 

       149. Each of these SIC categories are very broad and includes firms that may be engaged
in various industries including television.  Specific figures are not available as to how many of
these firms exclusively produce and/or distribute programming for television or how many are
independently owned and operated.  Consequently, we tentatively conclude that there are
approximately 6987 small entities that produce and distribute taped television programs, 1013 small
entities primarily engaged in the distribution of taped television programs, and 5627 small producers
of live television programs that may be affected by the proposed rules in this Notice.
. 
       150. Reporting, Recordkeeping and Compliance Requirements:  The Notice tentatively
proposes requiring video programming providers (including broadcast licensees and MVPDs) to
substantially increase the volume of closed captioned video programming carried over a period of
time.  Virtually all future programming and a gradually increasing volume of previously released
programming is expected to be captioned over time.  If this proposal is adopted ideo programming
providers may be choose to maintain records of the volume of closed captioned programming carried
in order to resolve any disputes which may arise regarding compliance.

       151. In addition to seeking comment on a complaint process, the Commission invites
comments regarding alternative enforcement procedures including a requirement that video
programming providers their compliance with by placing information regarding the amount of closed
captioning they distribute in a public file.  The Commission invites commenters to address the
possible effectiveness of this alternative enforcement mechanisms and how it might be
implemented.  

       152. Federal Rules Which Overlap, Duplicate or Conflict With the Commission's
Proposal:  None.

       153. Any Significant Alternatives Minimizing the Impact On Small Entities and Consistent
With the Stated Objectives:  The statutory language provides for exemptions from any closed
captioning requirements the Commission may adopt, when imposing those requirements would
create an economic burden.  Consistent with this directive, the Notice seeks comment on several
mechanisms which would allow small entities to be exempt in whole or in part from the closed
captioning requirements.  These measures are intended, in part, to minimize the regulatory impact
on small entities. 

       154. Section 713(d)(1) provides that the Commission may exempt classes of video
programming or video providers where closed captioning would be economically burdensome. 
Pursuant to this provision, the Commission proposes to establish a general classification or a number
of classifications of programming for which captioning would be economically burdensome. 
Thus, the Commission seeks comment on whether a definition of economic burden should be based
on relative size, degree of distribution, audience ratings or share, relative programming budgets or
revenue base, lack of repeat value, or a combination of factors.  

       155. Section 713(d)(3) permits video programming providers or program owners to
petition the Commission for an exemption where our video captioning requirements would constitute
an undue burden.  Section 713(d)(3) further provides specific factors to be considered when
resolving such petitions.  Accordingly, the Commission seeks comment on how to apply these
factors and whether there are any factors which should be considered when determining if a
requirement for closed captioning results in an undue burden for an individual video programming
provider or program owner.

       B.   Initial Paperwork Reduction Act of 1995 Analysis

       156. This Notice of Proposed Rulemaking (Notice) may contain either proposed or
modified information collections.  As part of its continuing effort to reduce paperwork burdens, we
invite the general public to take this opportunity to comment on the information collections
contained in this Notice, as required by the Paperwork Reduction Act of 1995, Pub. L. No. 
104-13.  Public and agency comments are due at the same time as other comments on the Notice. 
Comments should address: (a) whether the proposed collection of information is necessary for the
proper performance of the functions of the Commission, including whether the information shall
have practical utility; (b) ways to enhance the quality, utility, and clarity of the information
collected; and (c) ways to minimize the burden of the collection of information on the respondents,
including the use of automated collection techniques or other forms of information technology.

       C.   Procedural Provisions

       157. Ex parte Rules - Non-Restricted Proceeding.  This is a non-restricted notice and
comment rulemaking proceeding.  Ex parte presentations are permitted, except during the Sunshine
Agenda period, provided that they are disclosed as provided in the Commission's rules.

       158. Pursuant to applicable procedures set forth in Sections 1.415 and 1.419 of the
Commission's rules, interested parties may file comments on or before February 28, 1997, and reply
comments on or before March 24, 1997.  To file formally in this proceeding, you must file an
original plus six copies of all comments, reply comments, and supporting comments.  If you would
like each Commissioner to receive a personal copy of your comments and reply comments, you must
file an original plus 11 copies.  We also encourage commenters to include a computer disk copy of
their comments with their official filings whenever possible, as this will allow the comments to be
easily transferred to the Commission's Internet site.  You should send comments and reply comments
to the Office of the Secretary, Federal Communications Commission, 1919 M Street, N.W.
Washington, D.C. 20554.  Comments and reply comments will be available for public inspection
during regular business hours in the FCC Reference Center, Room 239, Federal Communications
Commission, 1919 M Street N.W., Washington D.C. 20554. 

       159. Written comments by the public on the proposed and/or modified information
collections are due 60 days after publication of this Notice in the Federal Register.   A copy of any
comments on the information collections contained herein should be submitted to Dorothy Conway,
Federal Communications Commission, Room 234, 1919 M Street, N.W., Washington, D.C. 20554,
or via the Internet to dconway@fcc.gov.
 
       D.   Ordering Clauses

       160. This action is taken pursuant to authority found in Sections 4(i), 303(r), and 713 of
the Communications Act of 1934, as amended, 47 U.S.C.  154(i), 303(r), and 613.  

       161. IT IS FURTHER ORDERED that the Secretary shall send a copy of this Notice of
Proposed Rulemaking, including the Initial Regulatory Flexibility Analysis, to the Chief Counsel
for Advocacy of the Small Business Administration, in accordance with paragraph 603(a) of the
Regulatory Flexibility Act, Pub. L. No. 96-354, 94 Stat. 1164, 5 U.S.C.  601 et seq. (1981).

       162. For further information, contact Marcia Glauberman, John Adams or Alexis Johns,
Policy and Rules Division, Cable Services Bureau, at (202) 418-7200, TTY (202) 418-7172.

       
                      FEDERAL COMMUNICATIONS COMMISSION




       
                      William F. Caton
                      Acting Secretary                                  APPENDIX A
                                
                       List of Commenters

Comments

1.     A&E Television Networks
2.     ALDA/Potomac
3.     Alexander Graham Bell Association for the Deaf, Inc.
4.     Alliance for Community Media
5.     Aloha State Association of the Deaf
6.     American Academy of Audiology
7.     American Foundation for the Blind
8.     American Society for Deaf Children
9.     Joan Andrews
10.    Association of America's Public Television Stations
11.    Association of Late-Deafened Adults
12.    Association of Local Television Stations, Inc.
13.    Atlanta Hears Chapter/Self Help for Hard of Hearing People
14.    Audio Optics, Inc.
15.    AudioVision, Inc.
16.    Bell Atlantic
17.    Boston Chapter of Self Help for Hard of Hearing People
18.    Broward County Library Access Services
19.    Dick Burkhalter
20.    Burlington Chapter of North Carolina Association of the Deaf
21.    Californians for Television Access
22.    Cape Organization for Rights of the Disabled
23.    Capital Cities/ABC, Inc.
24.    Caption Database, Inc.
25.    CaptionMax
26.    Joan Cassidy
27.    CBS Inc.
28.    Barbara Liss Chertok
29.    City of St. Louis Communications Division
30.    Joe Clark
31.    Mary Clepper
32.    Laurence Anne Coe
33.    Colorado Assistive Technology Project, DakotaLink (South Dakota Tech Act Project),
            Georgia Tools for Life, Hawaii Assistive Technology Training and Service, Iowa
            Program for Assistive Technology, Louisiana Assistive Technology Access
            Network, Maine Consumer Information and Technology Training Exchange
            (CITE), Maryland Technology Assistance Program, Massachusetts Assistive
            Technology Partnership, Minnesota System of Technology to Achieve Results
            (STAR) Program, Missouri Assistive Technology Project, New Hampshire
            Technology Partnership Project, Oklahoma ABLE Tech, Oregon Technology
            Access Through Life Needs, Pennsylvania's Initiative on Assistive Technology,
            Rhode Island Assistive Technology Access Project, Texas Assistive Technology
            Partnership, WisTech (Wisconsin Assistive Technology Program)
34.    Consumer Action Network
35.    Frank P. Corsica
36.    Corporation for Public Broadcasting
37.    Jeannette Costa
38.    Council of Organizational Representatives
39.    Deaf Counseling, Advocacy and Referral Agency
40.    Disability Law Center, Inc.
41.    Sally Dodge
42.    Gerald Dominick
43.    Anna Dresner
44.    Kathy Dunn
45.    EEG Enterprises, Inc.
46.    Electronic Industries Association, Consumer Electronics Manufacturing Association
47.    David S. Evans
48.    F&V Channel, L.L.C.
49.    Fairfax Cable Access Corporation
50.    Mary Ann Foohey
51.    Gallaudet University's Technology Assessment Program
52.    Dan Glisson
53.    Stuart and Marilyn Gopen
54.    Great River Valley Chapter of the Coalition of Citizens with Disabilities in Illinois
55.    Mildred D. Helyer
56.    Home Box Office
57.    Lillian and Glenn E. Hoshauer
58.    Inclusive Technologies
59.    Jerald M. Jordan
60.    Lansing School District
61.    League for the Hard of Hearing
62.    Willis J. Mann, Telecommunications Access Program, Maryland Department of       General Services
63.    Massachusetts Commission for the Deaf and Hard of Hearing
64.    MCAHI
65.    Media Captioning Services
66.    Metropolitan Washington Ear, Inc. (Comments and Additional Comments)
67.    Sandra Miller
68.    Motion Picture Association of America, Inc.
69.    JoAnn M. Myers
70.    Narrative Television Network
71.    National Association of Broadcasters
72.    National Association of the Deaf
73.    National Broadcasting Company, Inc.
74.    National Cable Television Association, Inc.
75.    National Captioning Institute
76.    National Congress of Jewish Deaf/Jewish Deaf Congress, Inc.
77.    National Federation of the Blind of Idaho
78.    Lucille E. Nestler
79.    Lee Nettles
80.    Frank L. Neuhauser
81.    North Carolina Association of the Deaf, Inc.
82.    North Carolina Department of Human Resources, Division of Vocational Rehabilitation 
            Services
83.    Northern Virginia Resource Center for Deaf and Hard of Hearing Persons
84.    Ohio Educational Telecommunications
85.    Pennsylvania Society for the Advancement of the Deaf, Inc.
86.    Richard Pokrass
87.    Public Broadcasting Service
88.    Barbara H. Putney
89.    Recording Industry Association of America
90.    Regional Audio Information Services Ent.
91.    Rochester Recreation Club for the Deaf, Inc.
92.    Satellite Broadcasting and Communications Association
93.    Schwartz, Woods & Miller on behalf of Ball State University, Connecticut Public
            Broadcasters, Inc., Detroit Educational Television Foundation, Educational
            Television Association of Metropolitan Cleveland, Fifteen Telecommunications,
            Inc., Long Island Educational Television Council, Inc., Louisiana Educational
            Authority, Maryland Public Broadcasting Commission, Metropolitan Board of
            Public Education, Mississippi Authority for Educational Television, New Jersey
            Public Broadcasting Authority, Oregon Public Broadcasting, University of New
            Hampshire, Window to the World Communications, Inc., University of North
            Carolina Center for Public Television, WJCT, Inc.
94.    Self Help for Hard of Hearing People, Inc.
95.    Celia Conlon Shepard
96.    D.A. She
97.    Louis M. Smith
98.    South Carolina Association of the Deaf
99.    Bernard J. Sussman
100.   Telecommunications for the Deaf, Incorporated
101.   U S West, Inc.
102.   VITAC
103.   Washington County Chapter, Pennsylvania Council of the Blind
104.   Weather Channel
105.   Charles C. Webster
106.   WGBH Educational Foundation
107.   Wireless Cable Association International


Reply Comments

1.     A&E Television Networks
2.     American Council of the Blind
3.     American Foundation for the Blind
4.     Association of Local Television Stations, Inc.
5.     Dick Burkhalter
6.     Caption Colorado, Inc.
7.     Division of Services for the Deaf and Hard of Hearing
8.     Encore Media Corporation
9.     Home Box Office
10.    Independent Cable & Telecommunications Association
11.    International Cable Channel Partnership, Ltd.
12.    Liberty Sports, Inc.
13.    Maryland Association of the Deaf
14.    Metropolitan Washington Ear, Inc.
15.    Mid-Hudson Valley Civic Association of the Deaf
16.    Motion Picture Association of America, Inc.
17.    National Association of the Deaf
18.    National Black Deaf Advocates
19.    National Cable Television Association, Inc.
20.    OpTel, Inc.
21.    Herbert L. Pickell, Jr.
22.    Rhode Island Association of the Deaf, Inc.
23.    Sonny Access Consulting
24.    Sunbelt South Tele-Communications, Ltd.
25.    Gary Tomlinson
26.    Virginia Association of the Deaf, Inc.
27.    VITAC
28.    Washington State Association of the Deaf
29.    Delbert A. Wheeler
30.    Wilson Association of the Deaf
31.    Wireless Cable Association International, Inc.
32.    Wisconsin Association of the Deaf