The management of MCS hopes your visit to our web site has been both instructive and interesting. Our closed captioning industry is a small but growing component of the video programming/cable/broadcasting industry, and has a growing impact on deaf, hard of hearing and hearing viewers.        

     While closed captioning was developed primarily as an assistive technology to allow persons with hearing disabilities to enjoy television programming, it has come to have widespread application for many hearing viewers, who use it in circumstances where program audio is of poor quality or not available.    

     Over the past nine years, regulatory initiatives have been passed to dramatically expand the availability of closed captioning, and we would like to briefly highlight these initiatives.      

     In 1990, Congress passed the Television Decoder Circuitry

While closed captioning was developed primarily as an assistive technology to allow persons with hearing disabilities to enjoy television programming, it has come to have widespread application for many hearing viewers, who use it in circumstances where program audio is of poor quality or not available.

Act, which required all TV's with picture screens 13 inches or larger sold in the U.S. after July 31, 1993, to have built-in decoder circuitry to display closed captioned television. The Act was designed to make closed captioning decoder capability readily affordable. The relatively high cost of closed caption external boxes - in excess of $200 at the time - was viewed by many to be a deterrent to consumers who may want to acquire this assistive technology.

     In 1997, pursuant to authority granted under the Telecommunications Act of 1996, the FCC adopted rules to phase-in closed captioning of video programming. The rules required an increasing amount of captioned new programming, with benchmark levels of captioning to be achieved over an eight-year transition period. At the end of the eight-year transition period, 100% of all new nonexempt programming will be required to be captioned, effective January 1, 2006.      

     In 1998, in its Order on Reconsideration, the FCC took the position that with respect to certain major program providers, ENR (electronic newsroom) captioning would no longer count toward compliance with the benchmark captioning standards. This prompted the CBS Corporation to file a Request for Clarification regarding this policy, and the obligations of program providers who may not be able to use or count ENR captioning toward the benchmark established beginning January 1, 2000.      

     The forthcoming FCC decision, with respect to the Request for Clarification, will, in the opinion of MCS, have a profound effect on the current and future structure of the closed captioning industry. As a small business which happens to be a major,

The forthcoming FCC decision, with respect to the Request for Clarification, will, in the opinion of MCS, have a profound effect on the current and future structure of the closed captioning industry.

national provider of closed captioning, MCS believes it is in the interest of all consumers, the FCC, and the broadcast/cable industry to recognize the impact of an FCC decision on our industry to de facto require the four major broadcast networks in each of the top 25 television markets to not count ENR-captioned programs as being captioned for purposes of compliance with FCC captioning rules.

     We believe that significant progress has been made over the past nine years through the above-mentioned regulatory initiatives to increase the total number of captioned television hours. However, our major concern has been that, despite great progress in passing regulations which increased the availability of closed captioning hardware (i.e. built-in decoders) and captioned video programming (Telecommunications Act of 1996), little attention has been paid by this regulatory agency to the structure of our industry and its ability to cope with a rapid increase in closed captioning hours.

     We urge Chairman Kennard to review public comments MCS has submitted to the FCC over the past three years in response to their request for Public Notices for comment on closed captioning. The simple, undeniable reality is that the closed captioning industry is comprised of perhaps 200 very small business entities, with less than 10 firms having a centrally located production capability. Price competition, coupled with continued, sustained pressure from broadcast and cable clients to reduce pricing, has severely impacted margins on even the most cost-effective concerns.

     Now, we think it is important to clarify our position. MCS believes in a competitive marketplace for closed captioning

MCS believes in a competitive marketplace for closed captioning services, and we have done our share in the past nine years to substantially increase the amount of closed captioning for major cable industry clients.

services, and we have done our share in the past nine years to substantially increase the amount of closed captioning for major cable industry clients. The reality is that the overwhelming majority of firms in the closed captioning industry are comprised of two to five people, with neither the capital nor breadth of management and/or technical skills to service the scale of closed captioning mandated under the current benchmarks.

     In all of our previous testimony submitted to the FCC, we have urged the Agency to support initiatives that would encourage and support the use of very small businesses by video programmers in providing closed captioning services. Our company, Media Captioning Services, has pointed out the oligopolistic structure of our industry, with three firms over the past nine years having received the preponderant amount of funding from an agency of the U.S. government for closed captioning services.            

     In our industry, capital is the mother's milk of invention and growth, and while we anticipate the scope of federal support for closed captioning will diminish after 2001, continued funding at its current level awarded to these three companies will have a continued negative effect on our company, and a profoundly negative effect on the growth of the industry in general.    

     We would urge Congress to support legislative measures to

We would urge Congress to support legislative measures to provide tax credits to cable and video broadcasters and programmers who use very small businesses to provide closed captioning services.

provide tax credits to cable and video broadcasters and programmers who use very small businesses to provide closed captioning services. This is essential to ensure that the current monopoly structure of the industry will not be reinforced, and the potential for supply and demand pressures to cause prices to escalate will not develop as a result of the FCC benchmarks to be implemented starting January 1, 2000.

     We urge Chairman Kennard to strongly consider the impact of his agency's decision on the CBS request on our industry. The FCC has stated it believes that a transition period of eight years was sufficient to allow the pool of stenocaptioners to grow to service the closed captioning requirements it has imposed. Based on our operating experience in providing over 17,000 hours of realtime captioning per year, we say, Mr. Chairman, you and your agency are not sufficiently informed on this matter. It is essential you understand market realities before issuing a ruling on the CBS Request for Reconsideration.

     We are not suggesting the benchmarks for closed captioning proposed in the original FCC Report and Order be modified. Consumers have a right to realize the intent of the Telecommunications Act, and previous Congressional legislation, to maximize the accessibility of video programming through closed captioning. We believe that regulation alone, however, without sufficient legislative initiatives to encourage the use of small caption providers, or the availability of capital to very small businesses in the closed captioning industry, will result in a rapid rise in price for quality closed captioning services. This may well produce many "undue burden" exemption requests to the FCC, and thwart the intent of legislative and administrative regulations to implement closed captioning.

     We believe that enhancements to closed captioning afforded by the new digital standards, which will effectively empower the viewer of captions by giving more choice, have the potential to significantly enrich a viewer's experience and extend the benefits of closed captioning to a much broader range of viewers.

     We at MCS intend to remain in the forefront in providing

It is essential that the FCC and Congress do a great deal more to assist companies such as ours, which have, in the finest entrepreneurial tradition, made a mark in our industry and dramatically expanded total closed captioning realtime hours in the process.

closed captioning services as we move into the digital television era. It is essential that the FCC and Congress do a great deal more to assist companies such as ours, which have, in the finest entrepreneurial tradition, made a mark in our industry and dramatically expanded total closed captioning realtime hours in the process.

     The FCC, therefore, in responding to the CBS request for clarification, must balance not only the legislative promises to consumers made in the Telecommunications Act of 1996 and the cost considerations to video programmers, but weigh the impact of their decision on our industry and its ability to respond effectively to the Regulations it has implemented.          

     We are hopeful the FCC will strongly recognize the import of its Ruling, and MCS will offer specific recommendations upon request.

     The management of MCS appreciates your interest in closed captioning and Media Captioning Services. The views expressed in this article represent solely the opinions of Media Captioning Services, and do not reflect the opinions of its clients, sponsors, or providers of funding for closed captioning services.

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