36 CFR Part 1194 - Proposed Information and Communication Technology (ICT) Standards and Guidelines NPRM - Preamble

A. Preliminary Regulatory Impact Analysis (Executive Order 12866)

Executive Orders 13563 and 12866 direct agencies to propose or adopt a regulation only upon a reasoned determination that its benefits justify its costs; tailor the regulation to impose the least burden on society, consistent with obtaining the regulatory objectives; and in choosing among alternative regulatory approaches, select those approaches that maximize net benefits. Important goals of regulatory analysis are to (1) establish whether federal regulation is necessary and justified to achieve a market failure or other social goal and (2) demonstrate that a range of reasonably feasible regulatory alternatives have been considered and that the most efficient and effective alternative has been selected. Executive Order 13563 also recognizes that some benefits are difficult to quantify and provides that, where appropriate and permitted by law, agencies may consider and discuss qualitatively values that are difficult or impossible to quantify, including equity, human dignity, fairness, and distributive impacts.

The Board contracted with an economic consulting firm, Econometrica, Inc. (Econometrica), to assess, among other things, whether the impact of the proposed rule would likely be economically “significant.” Economic significance is defined as any regulatory action that is likely to result in “an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safely, or State, local, or tribal governments or communities.”

Econometrica prepared a preliminary regulatory impact analysis (Preliminary RIA). This Preliminary RIA determined, among other things, that the proposed rule is economically significant within the meaning of Executive Order 12866. Below we provide a summary of the preliminary RIA’s methodology and results. A complete copy of this regulatory assessment is available on the Access Board’s website (www.access-board.gov), as well the federal government’s online rulemaking portal (http://www.regulations.gov/). Interested parties are encouraged to review the full Preliminary RIA, and to provide data and other information responsive to requests for comment posed separately in that document. Moreover, while the Board welcomes comments on any aspect of the Preliminary RIA, several areas on which the Board particularly seeks input are identified at the end of this section.

1. Summary of Results

The focus of the Preliminary RIA is to define and, where possible, quantify and monetize the potential economic benefits and costs of the proposed Section 508 Standards and 255 Guidelines. On the benefits side, the Preliminary RIA monetizes incremental benefits under the proposed 508 Standards attributable to: (a) increased productivity of federal employees with certain disabilities who are expected to benefit from improved ICT accessibility; (b) time saved by members of the public with vision disabilities when using more accessible federal websites; and (c) reduced phone calls to federal agencies as members of the public with certain disabilities shift their inquiries and transactions online due to improved accessibility of federal websites. The Preliminary RIA, for analytical purposes, defines the beneficiary population as persons with vision, hearing, and speech disabilities, as well as those with manipulation, reach, or strength limitations. The Preliminary RIA does not formally quantify or monetize benefits accruing from the proposed 255 Guidelines due to insufficient data and methodological constraints.

From the cost perspective, the Preliminary RIA monetizes likely incremental compliance costs under both the proposed 508 Standards and 255 Guidelines. Monetizable costs under the 508 Standards are expected to be incurred by federal agencies, contractors, and vendors in five broad areas: policy development; employee training; development of accessible ICT; evaluation of ICT; and, development of accessible electronic content. With respect to the 255 Guidelines, the Preliminary RIA monetizes the likely costs to telecommunications equipment manufacturers of ensuring that their respective websites and electronic support documentation conform to accessibility requirements. Insufficient data were available to assess incremental costs related to other new requirements in the proposed 255 Guidelines, including support for real-time text (RTT) functionality.

Table 4 below summarizes the results from the Preliminary RIA with respect to the likely monetized benefits and costs, on an annualized basis, from the proposed 508 Standards and 255 Guidelines. All monetized benefits and costs are incremental to the applicable baseline, and were estimated for a 10-year time horizon using discount rates of 7 and 3 percent.

Table 4-Annualized Value of Monetized Benefits and Costs under the Proposed 508 Standards and 255 Guidelines, 2015-2024 (in 2015 dollars)

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It is also important to note that some potentially significant benefits and costs from the proposed 508 Standards and 255 Guidelines are not evaluated in the Preliminary RIA, either because they could not be quantified or monetized (due to lack of data or for other methodological reasons) or are inherently qualitative. These unquantified benefits and costs are described qualitatively below. 

Evaluation of the economic impact of the proposed Section 508 and 255 requirements is, moreover, complicated by the rapid evolution of ICT devices, platforms, applications, and consensus standards. The benefits and costs of the proposed standards and guidelines ultimately depend not only on technologies that are currently available to achieve compliance, but also on emerging technologies that may provide more cost-effective ways in the future to ensure equal access to ICT for people with disabilities.

2. General Framework of Assessment

Some of the main components of the Preliminary RIA’s methodology are as follows:

Estimating the beneficiary population: To estimate the number of federal employees and members of the public with disabilities who could potentially benefit from updated and improved ICT accessibility standards, the Preliminary RIA primarily draws from two data sources. Public data on federal workers with disabilities was obtained from the Office of Personnel Management. Data on the prevalence of various disabilities within the U.S population were obtained from the U.S. Census Bureau’s Survey of Income and Program Participation (SIPP) data set, which provides statistics on the non-institutionalized U.S. population.

Identifying incremental changes in the proposed rule: To assess the potential incremental impact of the proposed rule, the Preliminary RIA identifies provisions in the proposed standards and guidelines that would likely increase compliance costs for covered entities (e.g., federal agencies, federal contractors, and manufacturers of telecommunications equipment), as well as provisions that could be expected to reduce the amount of time and effort required for compliance relative to existing requirements.

Developing baseline compliance costs: Estimates of “baseline” compliance costs to covered entities under the existing 508 Standards and 255 Guidelines are drawn from current spending levels for relevant ICT-related products, services, and personnel. For federal agencies, baseline compliance costs under Section 508 include both in-house ICT (e.g., policy development, employee training, development and remediation of websites and electronic documents to ensure accessibility under current standards), and procured ICT (e.g., procurement of Section 508-compliant hardware, software, services from federal contractors and vendors). For telecommunications equipment manufacturers, baseline costs under the existing 255 Guidelines are based on the monetized value of the estimated time manufacturers currently spend making support documentation accessible using estimates developed by the Access Board for the Paperwork Reduction Act. See Section VIII.F (Regulatory Process Matters – Paperwork Reduction Act).

Monetizing expected incremental benefits and costs of the proposed 508 Standards: The Preliminary RIA quantifies and monetizes the expected incremental benefits to federal agencies and members of the public with vision disabilities likely to benefit from the proposed standards. For persons with vision disabilities, benefit calculations are based on the value of time saved due to improved accessibility of federal websites. Benefits to federal agencies are assessed based on the monetized value of reduced call volumes and increased productivity of employees with disabilities owing to ICT accessibility improvements. Compliance costs for federal agencies are classified as either one-time or annual, and are assessed based on various fixed percentages of baseline costs depending on the nature of the cost component at issue (e.g., website remediation, employee training, development of accessible electronic content). Incremental costs and benefits are calculated relative to the applicable baseline over a 10-year analysis period from 2015 through 2024.

Monetizing expected incremental costs of the proposed 255 Guidelines: The Preliminary RIA quantifies and monetizes the expected incremental costs to manufacturers of telecommunications equipment and customer premises equipment (CPE) of complying with new requirements in the proposed guidelines related to accessible electronic support documentation. Benefits attributable to new or updated requirements in the proposed 255 Guidelines—such as the value of improved accessibility for persons with disabilities or cost savings to telecommunications equipment manufacturers— were not evaluated due to insufficient data and the methodological complexity of “mapping” proposed new requirements to particular cost elements in a dynamic and evolving telecommunications marketplace. Compliance costs to telecommunications equipment manufacturers and CPE are classified as either one-time or annual, and are assessed based on various fixed percentages of baseline costs for development of accessible support documentation depending on firm size. Incremental costs are calculated relative to the baseline over a 10-year analysis period from 2015 through 2024.

Describing unquantifiable costs and benefits: For benefits and costs that could be neither quantified nor monetized, the Preliminary RIA qualitatively describes, and assesses the significance of, such costs and benefits.

3. Baseline Compliance Costs

The total costs that federal agencies, vendors, and contractors incur to comply with the current 508 Standards are estimated at $2.0 billion annually. This amount represents about 2 percent of annual ICT spending, which is estimated at $80 billion to $120 billion, depending on which products and services are included in the total. Baseline costs for telecommunications equipment manufacturers to conform to the current 255 Guidelines related to product documentation and user support are estimated at $114 million annually. Taken all together, the overall baseline compliance costs are therefore estimated at $2.1 billion annually.

4. Benefits of the Proposed Rule

Overall, results from the Preliminary RIA demonstrate that the proposed 508 Standards will likely have substantial monetizable benefits to federal agencies and persons with disabilities. As shown in Table 4 above, the annualized value of monetized benefits from these proposed standards is estimated to be $69.1 million over the 10-year analysis period (assuming a 7 percent discount rate). In calculating these monetized benefits, the Preliminary RIA makes the following assumptions: (a) one-half of the recurring annual benefits derived from accessible ICT would be realized in the first year of implementation; and (b) the number of individuals with disabilities who visit federal agency websites will increase every year, but a constant proportion of those individuals will visit such websites every year.

It is also important to note that the proposed rule is expected to generate significant benefits that were not evaluated in the Preliminary RIA, either because they could not be quantified or monetized (due to lack of data or for other methodological reasons) or are inherently qualitative. Estimating the economic impact of a civil rights-based regulatory initiative in an area—and marketplace—as dynamic as ICT is a complex and difficult task. Some of these unquantified (or inherently unquantifiable) benefits of the proposed 508 Standards are listed in Table 5 below. The fact that these benefits could not be formally assessed in this Preliminary RIA should not diminish their importance or value.

Table 5 - Unquantified Benefits of the Proposed Rule

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5. Costs of the Proposed Rule

The Preliminary RIA shows that the proposed standards and guidelines will likely increase compliance costs substantially when first implemented, but will thereafter result in only a small percentage increase in recurring annual costs in later years. Overall, the Preliminary RIA estimates that the total incremental cost of the proposed 508 Standards and 255 Guidelines is expected to be $165.6 million on an annualized basis over the 10-year analysis period, based on a 7 percent discount rate (see Table 4 above).

The Preliminary RIA does not, however, quantify and monetize all potential compliance costs arising from the proposed rule—due primarily to insufficient data or for other methodological limitations. The impact of the proposed 255 Guidelines on telecommunications equipment manufacturers is, as the Preliminary RIA notes, particularly difficult to quantify. (Information on the impact of the proposed guidelines was solicited unsuccessfully in both the 2010 and 2011 ANPRMs.) Some of these unquantified costs of the proposed 508 Standards and 255 Guidelines are listed in Table 6 below.

Table 6 - Unquantified Costs of the Proposed Rule

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In addition, incremental cost estimates in the Preliminary RIA do not reflect other potentially influential factors that may occur over time—such as future changes in the fiscal environment and its effect on ICT budgets, the impact of recent government-wide initiatives to manage ICT more strategically, efforts to harmonize standards for a global ICT market, and trends in technological innovation. 

6. Conclusion

While the Preliminary RIA estimates that incremental costs, as assessed and monetized in the assessment, exceed the monetized benefits of the proposed rule, this finding represents only a piece of the regulatory story. Today, though ICT is now woven into the very fabric of everyday life, millions of Americans with disabilities often find themselves unable to use—or use effectively—computers, mobile devices, federal agency websites, or electronic content. The Board’s existing standards and guidelines are greatly in need of a “refresh” to keep up with technological changes over the past fifteen years. The Board expects this proposed rule to be a major step toward ensuring that ICT is more accessible to and usable by individuals with disabilities—both in the federal workplace and society generally. Indeed, much—if not most—of the benefits expected to accrue from the proposed rule are difficult if not impossible to quantify or monetize, including: greater social equality, human dignity, and fairness. These are all values that, under Executive Order 13563,¹³ may properly be considered in the benefit-cost calculus.

Moreover, American companies that manufacture telecommunications equipment and ICT-related products would likely derive significant benefits from the harmonized accessibility standards. Given the relative lack of existing national and globally-recognized standards for accessibility of mobile technologies, telecommunications equipment manufacturers would greatly benefit from harmonization of the 255 Guidelines with consensus standards. Similar benefits would likely accrue more generally to all ICT-related products as a result of harmonization. These manufacturers would earn return on investments in accessibility technology, remain competitive in the global marketplace, and achieve economies of scale created by wider use of nationally and internationally recognized technical standards.

Accordingly, when considering all unquantified benefits and costs, the Access Board, along with its consulting economic firm (Econometrica), jointly conclude that the benefits of the proposed update of the 508 Standards and 255 Guidelines justify its costs.

The Access Board welcomes comments on any aspect of the Preliminary RIA to improve the assumptions, methodology, and estimates of the incremental benefits and costs (baseline and incremental) of the proposed rule. The full Preliminary RIA sets forth numerous regulatory assessment-related questions or areas for public comment. In addition, the Board provides below several additional questions on which it seeks input:

Question 36. The Board requests information from telecommunications equipment manufacturers concerning expected one-time and ongoing costs associated with implementation of the proposed technical requirements related to support for real-time text (RTT) functionality. Please be as specific as possible. The Board is also interested in hearing from other stakeholders —particularly persons with disabilities—about the nature and scope of benefits provided by RTT in emergency and non-emergency settings. How might the Board quantify or monetize such benefits?

Question 37. The Board requests information from telecommunications equipment manufacturers concerning potential benefits that would accrue from harmonization of technical requirements in the proposed rule with national and international consensus standards? Both cost savings data and qualitative information are requested.

Question 38. The proposed rule would, among other things, require federal agency websites and electronic content to conform to WCAG 2.0 or PDF/UA-1. Do federal agencies believe that the Preliminary RIA adequately captures their potential costs to comply with these requirements? If not, how might the analysis be improved? Are there significant cost elements missing from the Preliminary RIA? Please be as specific as possible.

Question 39. The Preliminary RIA does not monetize benefits for persons with non-vision disabilities due to a lack of data on which to base estimated time savings. The Board requests data and other information on the likely time savings for persons with hearing, motor or dexterity, speech, or cognitive disabilities from using accessible websites as compared to websites with low accessibility. Are there empirical research studies from which time savings estimates may be derived?

Question 40. The Board also seeks information from persons with disabilities who would benefit from improved accessibility of federal agency websites. How frequently do they visit federal agency websites, and for what duration and purposes? Are there other suggested methods of quantifying benefits accruing from accessible agency websites other than (or in addition to) monetizing time savings? To the extent that benefits from accessible agency websites cannot be quantified, the Board welcomes examples of personal or anecdotal experience that illustrate the value of improved accessibility of federal websites.

Question 41. In addition to the questions for public comment posed in the Preliminary RIA and elsewhere in this NPRM, the Board is interested in hearing from the public more generally with information that would aid analysis of the costs and benefits of individual requirements in the 508 Standards and 255 Guidelines at the final rule stage. Is there a better way than the methodology used in the Preliminary RIA to “map” the incremental costs and benefits of particular technical and functional requirements to various stakeholders? If so, how might the analysis be improved? Are there other suggested sources for unit cost data other than those cited in the Preliminary RIA?

7. Alternatives

We considered two alternative approaches to updating the existing 508 Standards and 255 Guidelines:

• In the 2010 ANPRM, the Board proposed a set of requirements that were based on, but not identical to, the WCAG 2.0 standards and other voluntary consensus standards. Comments received from the public indicated that this approach was potentially confusing, as federal agencies, contractors, and vendors would have to make specific compliance determinations in cases where the language used in the proposed 508 Standards differed from that in the referenced standard.

• The Board also considered requiring ICT to comply with the full set of functional performance criteria, which state in general terms the features of ICT that ensure its accessibility to people with one or more of different types of disabilities. Comments indicated that this approach would make it difficult for ICT producers to be able to determine whether or not their products and services were compliant with the proposed 508 Standards.

Based on the public feedback on the two policy alternatives, we determined that the clearest and most cost-effective way to set out the proposed accessibility requirements was to identify and reference existing, voluntary consensus standards directly, wherever possible.