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 U.S. Department of Justice (Department) is issuing this final Regulatory Assessment (Final RA), prepared by HDR, Inc. (HDR), in support of the Department’s final rule entitled, ”Nondiscrimination on the Basis of Disability by Public Accommodations—Movie Theaters; Movie Captioning and Audio Description.” This final rule amends the Department’s regulation implementing title III of the Americans with Disabilities Act (ADA), which prohibits discrimination against persons with disabilities by public accommodations and commercial facilities, including movie theaters. The rule revises 28 CFR 36.303 to specifically address the obligations of public accommodations that own, operate, or lease movie theaters to provide equally effective communication to patrons who are deaf or hard of hearing, or blind or have low vision. The rule requires that movie theater auditoriums provide closed movie captioning and audio description when showing a digital movie distributed with such features unless doing so results in an undue burden or a fundamental alteration. The rule requires movie theaters to have a specified number of captioning devices and audio description devices based on the number of auditoriums in the movie theater that show digital movies. The rule does not impose any specific requirements for movie theater auditoriums that exhibit analog movies exclusively. 

The requirements of this rule apply only to “movie theaters,” which are defined as facilities other than drive-in theaters that are used primarily for the purpose of showing movies to the public for a fee.  The rule requires that movie theater auditoriums that show digital movies comply with the rule’s requirements within 18 months of the rule’s publication in the Federal Register.  If a movie theater converts an auditorium from an analog projection system to a projection system that allows it to show digital movies after the publication date, that auditorium must comply with the rule’s requirements either within six months of that auditorium’s complete installation of a digital projection system or 24 months of the final rule’s publication, whichever is later.

The final rule, consistent with the ADA’s mandate, explicitly addresses equity and fairness considerations.  Foremost among the expected benefits from the regulation is the opportunity for a greater number of individuals who are deaf or hard of hearing, or blind or have low vision, to better understand what is being said and shown in digital movies exhibited at movie theaters so that they may fully and equally participate in the movie-going experience to the same extent as persons without these disabilities.  While many movie theaters do provide captioning and audio description to their patrons, many still do not or they do not consistently provide these auxiliary aids and services, creating a barrier for persons with disabilities to take part in the social and cultural movie-going experience.

This Final RA estimates the potential costs of the final rule in accordance with Executive Order 12866 and in line with the guidelines set forth by the Office of Management and Budget’s (OMB) Circular A-4.  Executive Order 12866 requires Federal agencies to submit “significant regulatory action[s]” to OMB for interagency review.  For the category of significant regulatory actions that are “economically significant,” Executive Order 12866 further requires agencies to submit to OMB an assessment of the planned regulation’s benefits and costs, as well as the benefits and costs of potentially effective and reasonably feasible alternatives.  “Economically significant” regulations are defined by Executive Order 12866 as those actions that have:

• 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 safety, or State, local, or tribal governments or communities.

The Department’s Final RA projects that the total costs, benefits, or transfer payments of this rule will not reach $100 million in any single year, and thus, the rule is not economically significant under Executive Order 12866.

Summary of the Purpose and Need for this Rule
Title III of the ADA (42 U.S.C. 12182) prohibits public accommodations from discriminating against individuals with disabilities. It expressly requires owners, operators, or lessees of public accommodations to take “such steps as may be necessary to ensure that no individual with a disability is excluded, denied services, segregated or otherwise treated differently * * * because of the absence of auxiliary aids and services” unless doing so would result in an undue burden or a fundamental alteration. 42 U.S.C. 12182(b)(2)(A)(iii). The Department’s existing regulation at 28 CFR 36.303(a)–(c), implementing the obligation of covered entities to ensure equally effective communication with individuals with disabilities, specifies that “open and closed captioning” and “audio recordings” are examples of auxiliary aids and services. 

Thus, public accommodations that own, lease, or operate movie theaters have an existing obligation to provide effective communication to persons with disabilities through the use of auxiliary aids and services.  This rule provides greater specificity as to how these effective communication obligations are met when showing digital movies that are produced, distributed, or otherwise made available with captioning and audio description.  As discussed above, the rule explicitly requires public accommodations that own, lease, or operate movie theaters to provide closed movie captioning  and audio description to patrons with hearing and vision disabilities whenever they exhibit digital movies that are distributed with such features, as well as to have available a specific number of fully operational captioning and audio description devices.  

Despite the longstanding obligation of movie theaters to provide effective communication, neither closed movie captioning nor audio description is universally available at movie theaters across the United States.  Based on data provided by the movie exhibition industry the Department estimates that as of mid 2015, approximately 70 percent of all movie theater auditoriums were already equipped to provide closed movie captioning and audio description, However, commenters have made clear that the extent to which these services are consistently available continues to vary significantly depending on a movie theater’s location and ownership.  It is the Department’s view that the availability of closed movie captioning, and to a lesser extent audio description, is largely due to successful litigation brought by State attorneys general or private plaintiffs representing individuals with disabilities.  In light of these circumstances, individuals with hearing and vision disabilities in many cases continue to be unable to enjoy movies with family or friends, participate in conversations about recent movie releases, or otherwise take part in any meaningful way in this important aspect of American culture.  Because the ADA’s effective communication requirements apply to all public accommodations (including movie theaters) and protect the rights of persons with disabilities in every jurisdiction in the United States, this rule makes it clear that all movie theaters must ensure that they meet those requirements by providing closed movie captioning and audio description to all patrons who are deaf or hard of hearing, or blind or have low vision, when showing digital movies produced or distributed with these features unless doing so results in an undue burden or a fundamental alteration.  

Summary of Analysis and Results

Movie theaters with auditoriums that exhibit digital movies have 18 months to comply with the rule from the date of the final rule’s publication in the Federal Register.  The total costs are estimated over a 15-year period, beginning with the year in which the rule becomes effective, which is assumed to be 2016 (the 15-year period ends in 2030). The costs estimated in the primary analysis are those that can be directly attributed to the final rule.

The estimated costs consist of the following:

• Captioning Hardware Acquisition Costs;

• Audio Description Hardware Acquisition Costs;

• Captioning Device Acquisition Costs;

• Audio Description Device Acquisition Costs;

• Installation Costs;

• Replacement Costs;

• Training Costs; and

• Maintenance and Administrative Costs.

Table ES 1 shows the total costs for each cost category over the 15-year period of analysis, discounted at a 7 percent and 3 percent rate.  The total costs of the final rule over 15 years are $88.5 million when discounted by 7 percent, and $113.4 million when discounted by 3 percent.

Because movie theaters vary greatly by number of auditoriums, which significantly impacts overall costs per facility, the analysis breaks the movie exhibition industry into four venue types based on size—Megaplex movie theaters (16+ auditoriums), Multiplex movie theaters (8–15 auditoriums), Miniplex movie theaters (2–7 auditoriums), and Single-Auditorium movie theaters.  The upfront costs per theater are calculated for each venue type and presented in Table ES 3.  The largest cost per year for any single movie theater would occur in the second year due to the acquisition and installation of the necessary equipment by the majority of movie theaters with auditoriums subject to the rulemaking.  The average upfront costs for a Megaplex movie theater are estimated to total $27,358, while the average upfront costs for a Single-Auditorium movie theater are estimated to total $3,562.

Table ES 4 : Annualized Costs by Venue Type in Primary Analysis ($ millions)

*Totals may differ due to rounding

*Annual revenue data withheld and value set to 0 to avoid disclosing information of individual businesses.