Yesterday, the FCC released an Order that reversed a five-year-old decision by its Consumer and Governmental Affairs Bureau (“CGB” or “Bureau”) that had granted certain video programmers “undue burden” exemptions from the FCC’s closed captioning rules. The reversed Bureau decision had changed the criteria for undue burden exemptions and permanently exempted two video programmers from compliance with the closed captioning rules on the basis of the new criteria. Finding that the Bureau’s new criteria deviated from both the statute and FCC precedent, the Commission overturned the decision, reversed 296 subsequent exemptions that had been granted by the Bureau in reliance thereon, and reinstated the original criteria for captioning exemptions. DWT has just released an advisory that provides more detail about the Commission’s decision, which can be found here. In addition, a copy of the Commission’s Order can be found here.

In overturning the undue burden exemptions CGB approved in 2006, the Commission found numerous faults with both the Bureau’s initial decision and its handling of hundreds of subsequent petitions seeking similar exemptions. Although undue burden exemptions were to be reviewed by the Commission on a case-by-case basis after opportunity for public comment and were to consider four factors: (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, the Bureau deviated from previous Commission decisions by expanding the scope of the factors considered.  In particular, its decision relied primarily on the non-profit status of programming providers and that the programming was not produced for primarily commercial purposes.  Further, the Bureau found captioning programs would constitute a “significant hardship” and that there was a significant risk that mandating captioning would cause the video programming provider to cancel the programming.

As a result of yesterday’s reversal, the existing exemptions granted by the Bureau will expire in 90 days, or by Jan. 18, 2012. Any party that previously received an undue burden exemption (whom the Order identifies in an Appendix) will need to file a new petition in those intervening 90 days, and provide evidence demonstrating its inability to provide closed captioning if it wishes to seek exempt status again.

In addition, the FCC Order clarifies the rules and procedures governing consideration of petitions for undue burden exemptions going forward, providing guidance to video programming providers and distributors who may be interested in seeking such exemptions for both television and online programming going forward. Importantly, the Order offers a provisional interpretation of the term “economically burdensome” as that term is used in the recent Twenty-First Century Communications and Video Accessibility Act of 2010 (“CVAA”). The Commission essentially concluded that although the CVAA uses the term “economically burdensome,” Congress did not intend to fundamentally change the existing standard for assessing individual exemptions based on undue burden. The interpretation is “provisional” because the Commission seeks comment (by an accompanying Notice of Proposed Rule Making) on proposed amendments to its rules to make the interpretation permanent. Comments in response to the NPRM are due 30 days after it appears in the Federal Register, and replies are due 15 days after the initial comment deadline. If any of these issues may affect your operations, you might consider filing comments.