******************************************************** NOTICE ******************************************************** This document was converted from Word97 to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, itallic, underlining, etc. from the original document will not show up in this text version. Features of the orginal document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. If you need the complete document, download the Word97 version or Adobe Acrobat version, if available. ***************************************************************** BEFORE THE FEDERAL COMMUNICATIONS COMMISSION WASHINGTON, D.C. In the Matter of ) ) Closed Captioning and Video Description ) of Video Programming ) ) Implementation of Section 305 of the ) Telecommunications Act of 1996 ) ) Video Programming Accessibility ) TO: Chief, Cable Services Bureau REQUEST FOR WAIVER Home Shopping Club L.P. ("HSC"), by its attorneys and pursuant to Section 79.1(f)(1) of the Commission's rules / and section 713(d)(3) of the Communications Act of 1934, as amended (the "Act") / hereby requests a waiver of Section 79.1(b) of the Commission's rules requiring video programming distributors to provide closed captioning of their video programming. Pursuant to Section 79.1(f)(2) of the Commission's rules / and Section 713(e) of the Act, HSC urges the Commission to find that closed captioning of its video programming is unnecessary in light of the visual information already provided as part of HSC's standard on-screen display and would constitute an undue burden. HSC's programming already consistently offers its principal information in textual form and visual images. Because captioning of this live programming would impose substantial costs without realizing significant benefits, the Commission should waive any closed captioning requirements for HSC programming. I. INTRODUCTION HSC distributes electronic retail programming to full power and low power television stations and cable systems. Electronic retail programming affords an opportunity for viewers to purchase products they want or need without leaving their homes. Typically, HSC displays an offered item for a short period of time / while providing viewers with textual information related to the item. Unlike other promoters or advertisers, HSC's electronic retail programming commonly accompanies the display of an item with critical textual and visual information about the item. As part of its presentation of an item for sale, HSC displays the product itself along with visual text that tells a viewer the item's number, product name, price, information on the availability of the product and how to place an order. HSC supplements its display of the product and the text about the product with commentary from various hosts. Having seen and read about the product, a viewer may decide whether to order the product by following the textually-displayed ordering information that generally remains on the screen. HSC's electronic retail programming includes two separate services -- The Home Shopping Network ("HSN") and America's Store ("AS"). Another company in which an affiliate of HSC has an interest is The Home Shopping Network en Espa¤ol L.P. ("HSN en Espa¤ol"). Both HSN and AS offer a broad range of products. HSN en Espa¤ol also offers a wide array of merchandise, but the textual information and commentary accompanying the products are given in Spanish in order to extend electronic retailing services to the Spanish speaking community. HSN and AS both offer live programming 7 days a week. In support of its waiver request, HSC emphasizes the following facts: 1) HSC's programming already presents all basic product and order information through visual text; 2) the display of additional text through closed captioning during HSC programming would not only be redundant, but would obscure the important information about the product that now occupies the entire screen; and 3) captioning of this live programming (HSN and AS programming is live at almost all times while HSN en Espa¤ol rebroadcasts a portion of its programming) would also impose significant costs, without obtaining significant benefits, that would hinder HSC's ability to serve its viewers. II. HSC'S PROGRAMMING SHOULD BE EXEMPT FROM CLOSED CAPTIONING REQUIREMENTS UNDER THE COMMISSION'S RULES Section 79.1(f)(1) of the Commission's rules and Section 713(d)(3) of the Act provide that exemptions from the captioning rules may be granted upon a finding that the closed captioning requirements will result in an "undue burden." Section 79.1(f)(2) of the Rules and Section 713(e) of the Act define undue burden as "significant difficulty or expense." In the case of HSC, it would suffer both significant difficulty and extreme expense under the burdens of the closed captioning rules. Section 79.1(f)(2) of the Commission's Rules and section 713(e) of the Act establish four factors to be considered in an undue burden analysis: (i) the nature and cost of the closed captions for the programming; (ii) the impact on the operation of the provider or program owner; (iii) the financial resources of the provider or program owner; and (iv) the type of operations of the provider or program owner. Because HSC's programming is live (as noted above, though, HSN en Espa¤ol rebroadcasts part of its programming) and already presents all necessary information through visual images and text, application of the enumerated factors to HSC's services confirms that the captioning requirements constitute an undue burden. Each of these factors will be analyzed separately as applied to HSN and AS. Because they are similar, HSN and AS will be referred to collectively as "HSC programming" and presented together for purposes of this request. HSN en Espa¤ol, a start-up Spanish- language programmer, will be addressed separately in Section IV of this request. III. UNDUE BURDEN FACTORS APPLIED TO HSC PROGRAMMING A. THE NATURE AND COST OF THE CLOSED CAPTIONS FOR THE PROGRAMMING. The nature of HSC's electronic retailing is that its programming is live. This exacerbates the significant risk of inaccurate captions. Because HSC airs live programming, which displays many products relatively quickly, captioning would need to be performed in real time. Even the most expensive real time captioning will not always be accurate. Errors in captioning that conflict with price, product name, warranty, or other information already displayed on the screen will, at best, cause confusion to viewers. At worst, inaccurate captions will impair viewers' ability to order the product that they desire at the price they intend to pay. Because of the live nature of HSC programming, the costs of closed captioning would be an extreme burden. The cost of captioning live HSC programming is disproportionately high compared to the cost of its programming. To caption live programming for HSN or AS, HSC would have to pay $149.00 an hour. / It costs HSC an average of $376.56 to execute one hour of programming. / Because the cost of live captioning would be almost forty percent of the entire cost of HSC programming, the captioning requirements would clearly have an acute impact on HSC. The unique nature of live electronic retail services, such as HSC programming, demands the use of accurate real-time captioners. The availability of these real time captioning resources is incredibly limited and this scarcity has resulted in high prices for real time captioners. The high quality captioners that HSC would have to rely on in order to minimize confusion among its viewers would cause the costs of captioning to be exceptionally high. Furthermore, as noted above, even the most accurate real time captioners will make mistakes. No captioning company - regardless of price - will guarantee 100% accuracy. These mistakes would expose HSC to crippling liabilities. For example, if the captioner placed the wrong price, product name, or warranty in the caption, then depending upon the particular mistake, HSC could be subject to suit by either a consumer or the product manufacturer. The excessive cost of captioning live programming in addition to the potential for liability - for a service over which it has zero control - clearly favors grant of a waiver under the "nature and cost of the closed captions" element of the undue burden analysis. Moreover, unlike most other forms of programming, HSC does not rebroadcast its programming. HSC's products are constantly changing. Unlike producers or advertisers who may produce infomercials or commercials with repeat value, HSC has no opportunity to spread the substantial cost of captioning over several viewings. Imposition of this significant cost onto HSC would diminish it's ability to make products accessible to its viewers, both hearing impaired and not. B. THE IMPACT ON THE OPERATION OF THE PROVIDER OR PROGRAM OWNER. The impact that the burden of the closed captioning requirements would place on HSC would be severe. This factor in the undue burden analysis is a natural extension of the "nature and cost" element already mentioned. Precisely because HSC programming is live, rendering closed captioning disproportionately expensive, the impact of imposing closed captioning requirements on HSC is particularly harsh. C. THE FINANCIAL RESOURCES OF THE PROVIDER OR PROGRAM OWNER. Because the other three enumerated factors under the rules and legislation that inform the Commission's determination of undue burden plainly favor the grant of a waiver, HSC's financial resources should not be relevant to the analysis. As noted, the cost of captioning HSC's live programming is substantial and there are no benefits because captioning would distract viewers and obstruct the relevant product images and accompanying text already available on screen. Since closed captioning costs would be extreme and captioning would provide no meaningful benefits to HSC viewers, HSC's financial resources are not relevant. D. THE TYPE OF OPERATIONS OF THE PROVIDER OR PROGRAM OWNER. Because of the unique nature of HSC's electronic retailing, the hearing impaired are provided with all necessary information on their television screens without closed captioning. HSC programming already provides all information integral to its products and ordering in visual images of the product and accompanying text. The audio information that frequently accompanies the visual display embellishes the visual and textual information, but does not generally convey information that is critical for a viewer to evaluate the product or to make an order. The text and visual display typically show: ? the item number of the product; ? the name or a short description of the product; ? the retail value of the product; ? the offered price of the product; ? financial alternatives for payment of the product; ? the phone number to call to order the product. HSC programming thus already conveys all necessary information to a viewer in textual form. Program hosts often provide oral commentary regarding an item that is offered for sale. These oral marketing presentations supplement the textual and visual presentation of an item, but do not add facts critical for a viewer to evaluate or order the item. For instance, in a segment featuring Double Size, Double Strength A-Force skin care product, the hosts repeatedly commented on how this product was double the size and double the strength of the original A-Force product. This information was plainly duplicative of the text on the screen, though, as the product was described in the textual display as the Double Size, Double Strength A-Force. In addition, while the hosts continued to emphasize the double strength nature of this A-Force product, a graphic appeared with the words "Double the Strength" and "Double the Size" moving in slow motion across the screen. This is an example of the hosts' banter obviously duplicating the information that HSC programming already provides abundantly in textual form. Captioning the live HSC commentary would serve no purpose because the banter does not add any information that is critical to viewers. Furthermore, captioning the spoken commentary from the hosts of an electronic retail broadcast would unavoidably hinder a viewer from gleaning important visual information regarding the item. Captions would obscure critical visual information regardless of their position on the screen. HSC has limited control over the position of the closed captioning on screen. HSC therefore cannot tailor its presentation to avoid the obfuscation of the visual presentation by the closed captioning display. Even the portion of the on-screen visual display that is not covered up by captioning may suffer because captioning will distract a viewer from the more critical visual presentation of the product, and the product's relevant information. / A closed captioning requirement on HSC programming would be unfeasible because it would obscure important information currently made available for all viewers. Unlike most other types of programming, HSC commonly uses the entire available screen to display an item along with the textual information describing the item. HSC also frequently displays text "crawling" across both the top and bottom of the screen in order to provide even more information to the viewer. Because no free space exists on the HSC screen, any mandatory captioning would overlap some aspect of an item's presentation. As the displayed textual information is more important to a viewer than spoken commentary during HSC programming, any "captioning overlap" could deny viewers critical textual information or other visual images that would otherwise be readily seen. IV. UNDUE BURDEN FACTORS APPLIED TO HSN EN ESPANOL A. THE NATURE AND COST OF THE CLOSED CAPTIONS FOR THE PROGRAMMING. HSN en Espa¤ol, a venture that is little more than a year old, faces tremendous costs. Although it may not fit the typical definition of a "new network", HSN en Espa¤ol faces the same economic hardships as new networks. The Commission has provided a new network exemption whereby programming networks are exempt from the closed captioning requirements for their first four years. / Like other new programmers who bring diversity to the programming marketplace, HSN en Espa¤ol is the type of endeavor that the Commission desires to encourage according to the language in the history of the new network exemption: We believe that the record supports the conclusion that new programming networks face significant start-up costs and that the additional costs of captioning could pose an economic burden that might deter entry by some networks. We do not intend our closed captioning requirements to inhibit new sources of video programming due to our interest in fostering diversity in video programming. Thus we will adopt an exemption for any new network, whether it is broadcast or nonbroadcast, national or regional. / HSN en Espa¤ol is an advancement of programming diversity. HSN en Espa¤ol will not be a viable option, though, if forced to comply with the closed captioning rules, not only because of the high start-up costs involved with this recently developed programming, but also due to the excessive costs of captioning live Spanish language programming. In the Report and Order on the closed captioning rules, the Commission acknowledged the near impossibility of obtaining live captioning services for foreign languages: ".the personnel and facilities necessary to caption languages other than English are extremely limited and with respect to live captioning almost nonexistent." / In its Order on Reconsideration through which the Commission first subjected Spanish language programming to the captioning requirements, the Commission anticipated that the market for Spanish language captioners would grow: "[w]hile the number of Spanish language captioners appears to be small currently, we believe that their availability will grow to meet the demand created by a captioning requirement that will serve to make Spanish language programming accessible." / This has not proven to be true, though, especially with regard to live Spanish language programming. HSN en Espa¤ol has contacted four of the premier captioning companies, none of which could accommodate its request to caption live Spanish language programming. / In fact, none could even refer HSN en Espa¤ol to a company that could provide live Spanish language captioning service at any price. B. THE IMPACT ON THE OPERATION OF THE PROVIDER OR PROGRAM OWNER. The impact on HSN en Espa¤ol could not be any more substantial as it will not be a viable programming option if it is subject to the closed captioning requirements. HSN en Espa¤ol currently provides 6 hours of live programming a day, 5 days a week. HSN en Espa¤ol expects to increase the amount of its programming, but the burden of closed captioning requirements would severely hinder its ability to do so. As noted, HSN en Espa¤ol already faces many expensive start-up costs as it is only a recent undertaking by an affiliate of HSC. The addition of the imposing cost of captioning live Spanish language programming -- assuming a captioning service could be found -- could force HSN en Espa¤ol to cut back on its programming. C. THE FINANCIAL RESOURCES OF THE PROVIDER OR PROGRAM OWNER. As with HSN and AS, the Company's resources are not relevant where the burden of captioning is so grossly disproportionate to the overall cost of programming. D. THE TYPE OF OPERATIONS OF THE PROVIDER OR PROGRAM OWNER. The facts that constitute this element of the undue burden analysis as applied to HSN en Espa¤ol are the same as those presented above for HSC programming. HSN en Espa¤ol, like HSN and AS, already provides all information integral to its products and ordering in visual images of the product and accompanying text. The live commentary does not convey any vital information for a viewer to evaluate the product or to make an order. Captioning will only serve to confuse, distract, or hinder the viewer from seeing the important information already provided on screen V. CONCLUSION The potential for disaster stemming from captioning errors -- e.g. posting an item for sale at $19.99 instead of $1,999 -- is great. The potential for confusion from the obscuring of critical on-screen information by captions also is great. The cost of captioning this live programming represents almost forty percent of the cost of producing the programming. And the benefit to the hearing impaired is negligible because the existing format of HSC programming and HSN en Espa¤ol already consistently provides the relevant information through visual text or images. For these reasons, HSC programming and HSN en Espa¤ol should be exempt from closed captioning requirements. In view of the foregoing, HSC respectfully requests that the Commission waive the closed captioning requirements for HSC programming and HSN en Espa¤ol. Respectfully submitted, HOME SHOPPING CLUB L.P. By: William S. Reyner, Jr. Jacqueline P. Cleary Sumeet Seam HOGAN & HARTSON L.L.P. 555 13th Street, N.W. Washington, DC 20004 (202) 637-6580 Its Attorneys Dated: December 3, 1999 BEFORE THE FEDERAL COMMUNICATIONS COMMISSION WASHINGTON, D.C. In the Matter of ) ) Closed Captioning and Video Description ) of Video Programming ) ) Implementation of Section 305 of the ) Telecommunications Act of 1996 ) ) Video Programming Accessibility ) TO: Chief, Cable Services Bureau REQUEST FOR WAIVER William S. Reyner, Jr. Jacqueline P. Cleary Sumeet Seam HOGAN & HARTSON L.L.P. 555 13th Street, N.W. Washington, D.C. 20004 (202) 637-6580 Dated: December 3, 1999 TABLE OF CONTENTS I. Introduction 2 II HSC's Programming Should be Exempt from Closed Captioning Requirements Under the Commission's Rules 3 III. Undue Burden Factors Applied to HSC Programming 4 A. The Nature and Cost of the Closed Captions for the Programming 4 B. The Impact on the Operation of the Provider or Program Owner 6 C. The Financial Resources of the Provider or Program Owner 7 D. The Type of Operations of the Provider or Program Owner 7 IV. Undue Burden Factors Applied to HSN En Espanol 10 A. The Nature and Cost of the Closed Captions for the Programming 10 B. The Impact on the Operation of the Provider or Program Owner 12 C. The Financial Resources of the Provider or Program Owner 12 D. The Type of Operations of the Provider or Program Owner 12 V. Conclusion 13 SUMMARY Home Shopping Club L.P. ("HSC") requests a waiver of the Commission's rules requiring video programming distributors to provide closed captioning of their video programming. HSC distributes electronic retail programming to full power and low power television stations and cable systems. Electronic retail programming affords an opportunity for viewers to purchase products they want or need without leaving their homes. Typically, HSC displays an offered item for a short period of time while providing viewers with textual information related to the item. Unlike other promoters or advertisers, HSC's electronic retail programming commonly accompanies the display of an item with critical textual and visual information about the item. As part of its presentation of an item for sale, HSC displays the product itself along with visual text that tells a viewer the item's number, product name, price, information on the availability of the product and how to place an order. HSC supplements its display of the product and the text about the product with commentary from various hosts. Having seen and read about the product, a viewer may decide whether to order the product by following the textually-displayed ordering information that generally remains on the screen. In support of its waiver request, HSC emphasizes the following facts: 1) HSC's programming already presents all basic product and order information through visual text; 2) the display of additional text through closed captioning during HSC programming would not only be redundant, but would obscure the important information about the product that now occupies the entire screen; and 3) captioning of this live programming would also impose significant costs, without obtaining significant benefits, that would hinder HSC's ability to serve its viewers. EXHIBIT 2 / 47 C.F.R.  79.1(f)(1) (1999). / 47 U.S.C.  613(d)(3) (1999). / 47 C.F.R.  79.1(f)(2). / HSC generally offers a product for about 10 minutes. / The annual cost for each service to be in compliance with the Commission's initial captioning requirements as established in Section 79.1(b)(1)(i) of the Commission's rules would be $271,180.00. These prices were quoted by Vitac Corporation. / This figure is derived from the average costs of salaries of individuals involved in the production of one hour of programming. This amount specifically excludes capital costs and distribution costs. / Attached as Exhibits 1 and 2 are screen prints from HSN and AS, respectively. These images, printed directly from random screens for HSC programming, graphically demonstrate that the screen is already fully occupied and that all significant information is portrayed textually and visually. / 47 C.F.R.  79.1(d)(9). / See Report and Order in MM Docket No. 95-176, Implementation of Section 305 of the Telecommunications Act of 1996: Video Programming Accessibility, FCC 97-279 at 154 adopted August 7, 1997. / See id. at 147. / See Order on Reconsideration in MM Docket No. 95-176, Implementation of Section 305 of the Telecommunications Act of 1996: Video Programming Accessibility, FCC 98-236 at 95 adopted September 17, 1998. / The four captioning companies contacted by HSN en Espa¤ol are Vitac Corporation, Realtime Captioning, National Captioning Institute, and Captions, Inc.. - 2 -