28 CFR Part 36 Nondiscrimination on the Basis of Disability; Movie Captioning and Video Description ANPRM

F. Cost and benefits of movie captioning and video description regulations

Because this is an ANPRM, the Department is not required, at this time, to conduct certain economic analyses or written assessments that otherwise may be required for other more formal types of agency regulatory actions (e.g., notices of proposed rulemaking or final rules) that, for example, are deemed to be economically significant regulatory actions with an annual economic impact exceeding $100 million annually or that are expected to have a significant economic effect on a substantial number of small entities or non-federal governmental jurisdictions (such as State, local, or tribal governments). See, e.g., Regulatory Flexibility Act of 1980, 5 U.S.C. 603-04 (2006); E.O. 13272, 67 FR 53461 (Aug. 13, 2002); E.O. 12866, 58 FR 51735 (Sept. 30, 1993), as amended by E.O. 13497, 74 Fed. Reg. 6113 (Jan. 30, 2009); OMB Budget Circular A‑4, http://www.whitehouse.gov/OMB/circulars/a004/a‑4.pdf (last visited June 5, 2010).

Nonetheless, one of the purposes of this ANPRM is to seek public comment on various topics relating to captioning and video description, including perspectives from stakeholders concerning the benefits and costs of revising the Department´s title III regulation to ensure the accessibility of movies (from both a quantitative and qualitative perspective), particularly from members of the disability community, industry, and governmental entities. The Department thus asks for information so that the Department can determine whether such a proposed rule (1) should be deemed an economically "significant regulatory action" as defined in section 3(f) of E.O. 12866; or (2) would have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act and, if so, consider suggested alternative regulatory approaches to minimize any such impact.

Consistent with the Regulatory Flexibility Act of 1980 and Executive Order 13272, the Department must consider the impacts of any proposed rule on small entities, including, in pertinent part, small businesses and small nonprofit organizations. See 5 U.S.C. 603-04 (2006); E.O. 13272, 67 FR 53461 (Aug. 13, 2002). The Department will make an initial determination as to whether any rule it proposes is likely to have a significant economic impact on a substantial number of small entities, and if so, the Department will prepare an initial regulatory flexibility analysis analyzing the economic impacts on small entities and regulatory alternatives that reduce the regulatory burden on small entities while achieving the goals of the regulation. In response to this ANPRM, the Department encourages small entities to provide cost data on the numbers of small entities that may be impacted by this rule, the potential economic impact of adopting a specific requirement for captioning and video description and recommendations on less burdensome alternatives, with cost information.

Question 20. The Small Business Administration size standard for small movie theatres is $7 million dollars in annual gross revenues. Does the public have estimates of the numbers of small entities that may be impacted by future regulation governed by this ANPRM? How many small entities presently provide movie captioning or video description? How many small entities already have, or have plans to convert to, digital cinema? How many small entities presently have, or plan to convert to, digital sound systems? How much would it cost each small entity to provide movie captioning and video description technology using digital sound? How much would it cost each small entity to provide movie captioning or video description if the entity converted to digital cinema?

Question 21. Currently, what are the general costs per movie theater owner or operator to display movies with closed captioning? How many small entities offer this feature? What are the general costs to small entities to display movies with open or closed captioning? For all entities, is that figure per auditorium, per facility, or per company? Do these costs change for showing IMAX or 3D films with captions? Are there any cost-sharing or cost-allocation agreements that help mitigate these costs for movie theater owners or operators? Is most or all of this expense a one-time fee? If not, please explain.

Question 22. Currently, what are the general costs per movie theater owner or operator to display movies with video description? How many small entities offer this feature? What are the general costs to small entities to display movies with video description? For all entities, is that figure per auditorium, per facility, or per company? Are there any cost-sharing or cost-allocation agreements that help mitigate these costs for movie theater owners or operators? Is most or all of this expense a one-time fee? If not, please explain.

Question 23. Currently, what are the general costs to convert to digital cinema? Are the costs different for small entities? If so, why? What are the costs for small entities? Is that figure per auditorium, per facility, or per company? Are there cost-sharing or cost-allocation agreements that help mitigate these costs for movie theater owners or operators?

Question 24. What impact will the measures being contemplated by the Department requiring captioning and video description of movies have on small entities? Please provide information on: (a) capital costs for equipment needed to meet the regulatory requirements; (b) costs of modifying existing processes and procedures; (c) any effects to sales and profits, including increases in business due to tapping markets not previously reached; and (d) changes to market competition as a result of the proposed rule.

Question 25. Should any category or type of movie theater be exempted from any regulation requiring captioning or video description? For example, the Department now considers it likely that drive-in theaters will not be subject to this rule because the Department is not aware of any currently available technology that would enable closed captioning or video description of movies shown in drive-in theaters. Are there other types of movie facilities that should be exempted and why?

Question 26. If an exemption is provided, how should such an exemption be structured? Should it be based on the size of the company? To determine size, should the Department consider (a) using the Small Business Size Standard of $7 million dollars in annual gross revenue so that movie theater owners who fall within those parameters should be exempt?; (b) using factors such as whether the movie theater owner is an independent movie house (not owned, leased, or operated by, a movie theater chain), or small art film house in order to be exempt?; or (c) using some other formula or factors to determine if a movie theater owner should be exempt? Should the Department consider the establishment of different compliance requirements or timetables for compliance for small entities, independent movie houses, or small art film houses to take into account the resources available to small entities? What are other alternatives for small businesses, independent move houses, or small art film houses that would minimize the cost of future regulations?