Final Regulatory Assessment and Final Regulatory Flexibility Analysis Final Rule - Nondiscrimination on the Basis of Disability by Public Accommodations - Movie Theaters; Movie Captioning and Audio Description

The closed movie captioning and audio description systems available on the U.S. commercial market require two separate types of equipment:

(1) “hardware” that transmits the captioning signal/text or descriptive audio to its associated end-use device;⁹ and
(2) “individual devices” that display the closed movie captions or transmit the descriptive audio to individual movie patrons at their seats, either via specially-designed eyewear/glasses/headsets or on cup holder-mounted LED display units. 

The Final RA assesses the costs of acquiring the equipment necessary to provide closed movie captioning and audio description in auditoriums exhibiting digital movies.  The acquisition costs, along with installation costs, are the upfront costs incurred by a movie theater as a result of the rulemaking.  The upfront costs are divided into five components in the Final RA:

• Captioning Hardware Acquisition

• Audio Description Hardware Acquisition

• Captioning Device Acquisition

• Audio Description Device Acquisition

• Installation Costs

The acquisition costs for hardware and devices are determined by the total units required for compliance and the relevant unit costs.  Generally speaking, one unit of captioning hardware is needed for each auditorium exhibiting digital movies.  For some manufacturers, captioning hardware also includes audio description capabilities.  Other manufacturers require an additional programming station to enable audio description.  Typically, one captioning or audio description device is required per patron.  The final rule sets forth captioning and audio description device scoping requirements, or the number of captioning and audio description devices a movie theater is required to maintain.

The scoping requirements for captioning and audio description hardware and devices are outlined in Section 3.3. The unit costs for this equipment are outlined in Section 3.4.

Section 3.2 presents the assumptions regarding the number of auditoriums currently equipped to provide closed movie captioning and audio description.  The assumptions are based on an accessibility survey conducted by NATO in 2015.  Using this information, the number of hardware and device units required as a result the rulemaking is determined.  For example, a movie theater with an auditorium that is not already equipped to provide closed movie captioning or audio description will purchase all hardware and devices outlined by the scoping requirements presented in Section 3.3.

Some movie theaters have already equipped their auditoriums to provide closed movie captioning or audio description.  These auditoriums are assumed to already have the necessary captioning or audio description hardware.  However, some of these movie theaters with auditoriums already equipped to provide such features may need to purchase additional devices or replace devices to comply with the scoping requirements of the rulemaking.

In addition to acquisition, the costs of installation are also included as an upfront cost. Installation costs account for any additional cost a theater may incur to install captioning and audio description hardware in each auditorium, or the costs of synchronizing captioning and audio description devices to the hardware units in each auditorium.  The assumptions used to calculate installation costs are presented in Section 3.5.

This section continues by explaining the assumptions and methodology regarding equipment acquisition and installation costs.  Section 2.3.1 outlines the assumptions and methodology of calculating acquisition costs for captioning and audio description hardware.  Section 2.3.2 details the assumptions for calculating captioning and audio description device acquisition costs.

Captioning and audio description hardware acquisition is calculated and presented separately in the Final RA. However, the methodology for calculating hardware acquisition is identical for both captioning and audio description hardware.  Hardware acquisition costs are a function of:

• The number of auditoriums that are already equipped to provide closed movie captioning or audio description;

• The number of auditoriums that are not already equipped to provide closed movie captioning or audio description;

• The number of new auditoriums opening after the 18-month compliance date;

• The number of captioning or audio description hardware units required per auditorium; and

• The captioning or audio description hardware unit costs.  

The primary analysis uses the Medium Accessibility baseline presented in Section 3.2.2.2 to determine the number of auditoriums already equipped to provide closed movie captioning and audio description.  For the hardware acquisition calculation, the analysis assumes that movie theaters with auditoriums already equipped to provide closed movie captioning or audio description will purchase no additional hardware as a result of this rulemaking; however, all movie theaters with auditoriums not already equipped to provide closed movie captioning or audio description and all new auditoriums opening after the 18-month compliance date will purchase the hardware outlined by the scoping requirements presented in Section 3.3.1 and Section 3.3.2.

The calculation used for hardware acquisition is diagrammed in Figure 2-2.  In the first row, the number of auditoriums that are not already equipped to provide closed movie captioning or audio description (Section 3.2.2) and the new auditoriums opening after the 18-month compliance date are added together to determine the number of auditoriums purchasing hardware units throughout the analysis period.  In the second row, the number of auditoriums requiring hardware and the units required per auditorium (Section 3.3.1 and 3.3.2) determine the total number of hardware units purchased as a result of the rulemaking.  In the third row, hardware units are monetized using the unit costs for captioning and audio description hardware (Section 3.4.1 and 3.4.2).  The hardware acquisition costs calculated in the primary analysis are presented in Section 4.1.2.

Although some manufacturers include installation as part of purchasing the equipment package, some movie theaters may elect to install the equipment using internal staff.  In addition, some movie theaters may need to hire a third party to install captioning and audio description equipment in its auditoriums.  Therefore, this could result in an additional upfront cost after equipment acquisition.  For the purpose of the primary analysis, the cost estimation assumes installation costs are 3 percent of the total equipment acquisition costs for all auditoriums.  The installation costs in the primary analysis are presented in Section 4.1.2.