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FCC Overturns 298 Prior Closed Captioning Waivers

In a decision that may cause a fair amount of chaos for program producers, television stations, and cable systems, the FCC yesterday released an Order overturning 298 previously granted closed captioning waivers. According to the Order, the FCC granted only three temporary waivers in the period between 1996, when the captioning requirement was created by Congress, and 2005. However, in 2006, the FCC suddenly granted 303 permanent waivers of the captioning requirement. While the Order indicates that the FCC has received an additional 500 waiver requests since that time, it does not indicate whether any of these later requests have been acted on. It therefore appears that the 298 captioning waivers that were overturned represent the great majority of all outstanding waivers.

Of the 303 waivers granted in 2006, 298 were challenged by a consortium of organizations representing the deaf and hard of hearing. Those appeals had been pending at the FCC for just over five years. During that time, Congress modified the captioning requirements in the Communications Act when it adopted the 21st Century Communications and Video Accessibility Act of 2010 (the “CVAA”). The three significant captioning changes made by the CVAA are (1) the change of the term “undue burden” as the standard for captioning waivers to the term “economically burdensome”, (2) the imposition of a six month time limit (with exceptions) for the FCC to process captioning waiver requests, and (3) the codification in the statute of the FCC’s current practice of considering programming exempt from captioning while a waiver request is pending.

It appears that the need to modify its rules to incorporate these changes refocused the FCC’s attention on the outstanding waiver appeals, leading to the sudden action on the appeals after five years. Ultimately, the FCC concluded that the waivers should not have been granted, as they improperly relied on (1) the noncommercial nature/lack of remunerative value of the programming, (2) the program producers’ nonprofit status, (3) the presumption that waivers would be granted where “the provision of closed captions would curtail other activities important to [the producers’] mission”, (4) the grant of permanent waivers where temporary waivers would be more appropriate, and (5) the failure of the waiver grants “to consider whether petitioners solicited captioning assistance from their video programming distributors.”

This last factor is particular important for TV stations and cable systems. The FCC formally announced in the Order that because these program distributors are the parties actually responsible for ensuring that programming is captioned, “soliciting funds from these responsible entities is necessary to meeting one’s captioning obligations, and … evidence of such solicitation is required before a petitioner may qualify for a captioning exemption.” As a result, these local programming outlets can expect to be solicited by program producers in a very formal way for the funds necessary to caption their programming.

The Order lists the waiver recipients whose waivers have been revoked, and requires that they either file a new request for a waiver by January 18, 2012, or be in compliance with the FCC’s closed captioning rules by January 19, 2012. Those filing a new waiver request will be required to submit current documentation demonstrating that providing closed captions would be economically burdensome given (1) the nature and cost of the closed captioning difficulty/expense, (2) the impact on the operation of the program provider/owner, (3) the financial resources of the program provider/owner, and (4) the type of operations of the program provider/owner, as well as any other factors the petitioner thinks relevant to the request (including alternatives proposed by the petitioner as a reasonable substitute for closed captioning).

It doesn’t take much reading between the lines of the Order to conclude that closed captioning waivers are going to be much more difficult to obtain in the future. Given that 100% of English and Spanish broadcast TV programming must now be captioned (unless it falls into one of the FCC’s categorical exemptions), the FCC’s decision may impose significant hardship on many program producers and the TV stations that carry their programming. At a minimum, the producers whose waivers have been revoked will need to go through the waiver request process again. If their request is not granted, then they, along with program producers who cannot make the necessary waiver showing, will need to begin captioning their programming or cease production and/or distribution of that programming to media outlets governed by the FCC’s captioning rules.

Finally, because of the captioning changes made by the CVAA referenced above, yesterday’s Order also includes a Notice of Proposed Rulemaking in which the FCC seeks comments on how to interpret Congress’s change of the waiver standard language from “undue burden” to “economically burdensome.” The FCC indicates that its tentative conclusion is that Congress did not intend the language change to have a substantive effect upon waiver requests, particularly given that other language in the Communications Act relating to captioning waivers was not changed by the CVAA. The FCC’s request for comments focuses on whether this tentative conclusion is accurate. Those program producers whose waivers were revoked will want to consider submitting comments in this rulemaking, as it will likely end up determining the standard by which any new waiver requests will be judged.