February 01, 1997 | Electronic Retailing Magazine

Closed Caption Marketing

6 min

This article can also be found in Electronic Retailing Magazine's March/April 1997 issue.

The Federal Communications Commission ("FCC" or "Commission") recently proposed new rules requiring that new programming be closed captioned for the hearing impaired, and establishing timetables for implementing these closed captioning obligations. The proposed regulations, which are required by the Telecommunications Act of 1996 ("1996 Act"), would also implement the 1996 Act mandate that video programming providers or owners "maximize the accessibility" of programming first exhibited before the new rules take effect, by closed captioning such older programs.

Closed captioning provides a visual display of audio portions of video programming. For example, during a television show, an actor's spoken words can be displayed as printed words on the television screen. Captions can also identify background sounds, such as laughter, music, or sound effects. Closed captioning information is sent to viewers as hidden data encoded in the "vertical blanking image" that is transmitted with the television signal; viewers who want to see the visual image need a set-top decoder or have a television set with a built-in decoder. Captioning can be done live or "real time," or "off line" when a program is pre-recorded. Other methods can be used for programs that are taped just a few hours before they air, feature films, or other programs.

It not yet certain how much added burden the new rules will impose on electronic retailers. If advertising or home shopping must be closed captioned, many electronic retailers will face added costs. As a practical matter, those involved in producing an advertisement typically will bear responsibility for actually captioning a program since it is generally most cost-effective to caption at the production stage. The FCC acknowledged this and, in fact, anticipates that program providers will require closed captioning as necessary in contracts with program owners or producers.

It is also open to question who would face the legal risks of failing to caption programs as required by the new rules. The FCC's proposal would place this obligation on "video programming providers," which it defined as "all entities who provide video programming directly to a customer's home, regardless of the distribution technologies employed by such entities." Television broadcasters and multichannel video programming distributors would be in this category. According to the FCC, video programming providers are in the best position to ensure compliance with the new rules, due to their direct relationship with viewers and their ability to control whether or not programming is captioned by refusing to purchase programming that is not captioned. But, the FCC is also considering whether or not to require program owners to share rule compliance obligations. And, while the Commission did not offer any specific proposal concerning how to determine what entity is a program "owner," it did suggest that the producer, copyright holder, or syndicator or distributor might be considered owners.

On a more positive note for electronic retailers, advertising may well be exempt from the new captioning rules. The 1996 Act authorized the FCC to exempt programs, or classes of programs, for which compliance would be economically burdensome. The Commission has tentatively decided that classes of programs may be exempt if "the economic burden of captioning these programming types would outweigh the benefits to be derived from captioning and, in some cases, the complexity of adding captions." And, the FCC proposal suggests that it may exempt advertising, in part because there may already be market-based incentives for advertisers who can afford it to caption their promotions to appeal to viewers with hearing disabilities.

On the other hand, the Commission proposed not to exempt home shopping programs. The FCC claimed that even though home shopping is similar to other forms of advertising, not all descriptive material and information is currently available in text. Thus, unless it the FCC changes course, home shopping will ultimately need to be closed captioned. In addition, the FCC is also considering whether or not the following categories of programs should be exempt: foreign language programming; programming consisting primarily of text (e.g., stock tickers, on-screen program schedules or guides; cable access programming; instructional programming; "interstitials" (notices of upcoming shows); political advertising; broadcaster fundraising; music programming; weather programming; and sports programming.

To make the transition to full captioning, the proposed rules would require that all non-exempt "new" programming (i.e., that first published or exhibited after the effective date of the rules), be fully captioned over 8 years, phasing in a 25% increase in captioned programming every 2 years. Thus, the proposal would require program providers to caption 25% within 2 years; 50% within 4 years; 75% within 6 years; and 100% within 8 years. The Commission is also considering the alternative of accomplishing to full implementation over 10 years. If existing levels of captioning exceed the established thresholds, providers would still be expected to maintain those levels. Cable operators and other multichannel video programming distributors would be permitted to meet these percentage captioned requirements on a system-wide basis. Thus, for example, within the first 2-3 years, a cable operator would be required to transmit at least 25% of the new, non-exempt programming on its system with captions. The Commission noted that it may, therefore, be possible for a cable operator to transmit one network that is completely captioned, and three others that have no captioning. The Commission also did not specify what types of programming providers must caption to meet their obligations, proposing instead to leave these issues to the discretion of program providers, owners, and producers.

Older programming will also be covered by the new rules, with program providers required to "maximize the accessibility" of programming that was first published or exhibited before the effective date of the rules. The FCC refers to this as "library programming," and has tentatively concluded that not all library programming must be captioned. One possibility, however, is that the FCC will require that a certain percentage, such as 75%, eventually be captioned.

If, in the end, the rules would require that your programming be closed captioned, you may still have another option. Video programming providers or owners will be permitted to request an exemption from the closed captioning rules based on their individual circumstances. Thus, even if your programming winds up being covered by the new rules, you may be able to get exemption on grounds that compliance would impose an undue burden. The 1996 Act defines an "undue burden" as "significant difficulty or expense," and requires the Commission to consider four factors: (1) the nature and cost of captioning for the program(s); (2) the impact on the program provider's or owner's operations; (3) the provider's or owner's financial resources; and (4) the provider's or owner's type of operations. Better still, the FCC is considering what other factors should play a role in its decision to grant individual requests.

Although the new rules will not take effect for some time, most electronic retailers would benefit from starting to estimate the potential impact captioning would have on production costs or negotiating new contracts. In the end, advance planning may be the best way to minimize the economic burdens of the captioning new rules. And, electronic marketers may also stand to gain from captioning. Citing information supplied by consumer advocacy groups, the FCC has reported that an estimated 22.4 million people have hearing disabilities, and that 8.6% of the U.S. population have some degree of hearing loss. As a result, closed captioning may significantly expand a potential audience. So, it is possible that more complete captioning could ultimately benefit electronic marketers, as well as hearing impaired consumers. Of course, it remains to be seen whether the new FCC rules will afford the flexibility necessary to accomplish these goals.