Section „: Executive Summary Policy objective 9 The Government made clear that the provisions for a code were intended to help implement the GovernmentÕs aim to broaden access to cultural and recreational resources, and also promote greater social inclusion. The decision to extend obligations beyond public service broadcasters was based on the conclusion that many cable and satellite broadcasters are now well established, and are increasing audience share at the expense of the terrestrial channels. The Government said that extending the requirements to cable and satellite would create a level playing field for all broadcasters and ensure access for all viewers, regardless of the delivery platform1. Statutory provisions 10 Ofcom is obliged by section 303 of the Communications Act 2003 (Ōthe ActÕ) to issue a code giving guidance to television channel providers licensed in the UK on the provision of subtitling, signing and audio description (Ōtelevision access servicesÕ) to accompany programmes, and the provision of information to disabled people about those services. 11 The Act provides that the code must require that, by the tenth anniversary of the relevant date for each service, at least 80% of programmes that are not excluded must be subtitled (90% in the case of Channels 3, 4 and 5); at least 10% of such programmes must be accompanied by audio description, and at least 5% must be presented in or translated into signing. The Act also requires that, in the case of subtitling, each service must subtitle at least 60% of non-excluded programmes by the end of year five. 12 The code is to apply to licensed public service channels, digital television programme services, television licensable content services (TLCS), and restricted television services, as well any digital television programme services (DPS) provided by the Welsh Authority (including S4C Digital). Proposed amendments to the BBC Agreement would also require the BBC to observe the code in respect of its public television services (BBC1, 2, 3 and 4, CBBC, CBeebies, News 24, and Parliament), subject to any exclusions agreed between Ofcom and the BBC having regard to the considerations set out in section 303(8). The code is not to apply to electronic programme guides provided under a TLCS or DPS licence2, or to services comprising advertising (teleshopping), which is excluded from the definition of programme for the purpose of section 303. 13 The Ōrelevant dateÕ for the purpose of determining the tenth anniversary of services is 1 January 1997 in the case of BBC1 and 2 (as stated in proposed amendments to the Agreement), 1 January 1998 for Channel 5, 1 January 2000 for Channels 3 and 4 and S4C Digital. In the case of digital television programme services, the relevant date is the date on which the provision of that service began, and in the case of other television services, the date is the entry into force of the legislation, which is 29 December 2003. The relevant date for television services commencing after 29 December 2003 is the date they commence. 14 In accordance with section 303 of the Act, Ofcom may decide to exclude certain categories of programme or service from the provision of some or all of the access services, or to impose different obligations upon those categories. The factors to which Ofcom must have particular (but not exclusive) regard are: (a) the extent of the benefit which would be conferred by the provision of the assistance for disabled people in relation to the programmes (b) the size of the intended audience for the programmes (c) the number of persons who would be likely to benefit from the assistance and the extent of the likely benefit in each case (d) the extent to which members of the intended audience for the programmes are resident in places outside the United Kingdom (e) the technical difficulty of providing the assistance and (f) the cost, in the context of the matters mentioned in paragraphs (a) to (e), of providing the assistance. 5 Consultation on the draft code on providing television access services Section „: Background 1. Paragraphs 57-58, Regulatory impact assessment (TV & Radio Services), DCMS, June 2003. http://www.communicationsbill.gov.uk/pdf/tv_radio_assessment_update.pdf 2. Ofcom will be consulting separately on how it proposes to implement the provisions of section 310 of the Act requiring licensees to enable Electronic Programme Guides (EPGs) to be used for all the same purposes by people with hearing or vision disabilities, so far as practicable. Consultation on the draft code on providing television access services 1 This document seeks the views of interested parties on a draft code on Provision of Television Access Services. Ofcom is required to prepare a code by section 319 of the Communications Act 2003 (Ōthe ActÕ), and invites comments on the draft by Friday 12 March 2004. 2 The draft code would require all UK-licensed television channels meeting certain tests to provide television access services for people with hearing and/or vision impairments. This requirement would apply provided that services pass an audience benefit test, that service providers would not face insuperable technical difficulties, and that they could pay to provide the services without spending more than an estimated 1% of their total (qualifying) revenues. The draft code also sets out the proposed partial or full exemptions that would apply. 3 Ofcom proposes to set progressive interim targets for the end of years one and five respectively, in addition to the statutory 10-year target. The target set at the end of year one would apply to each year up until the end of the fifth year, and the target set at the end of the fifth year would apply until the end of the tenth year. We considered whether different interim targets should be set for each year, but concluded that setting fewer interim targets would provide greater flexibility for broadcasters not currently subject to statutory requirements to plan for the changes, and would reduce the impact of the new regulatory burden they face. 4 We propose that broadcasters which are already under an obligation to provide television access services (the BBC, licensed public service broadcasters and digital programme service licensees) would be required by the code to continue meeting progressively rising annual targets equivalent to those set out in their licences. 5 We estimate that this approach would result in about 50 channels meeting some or all of the subtitling requirements, as well as all of the signing and audio description targets. These channels would cover a wide range of genres, including film, news, lifestyle, childrenÕs programming and documentaries. 6 Ofcom believes that television service providers should use reasonable endeavours to ensure that such television access services can be accessed by the greatest number of viewers in their homes (whether they receive their services by terrestrial signal, or by satellite or cable). 7 You will find pdf and Word copies of this consultation and the summary document on our website in English and Welsh. You can also get a Braille or taped copy by contacting us in any of the ways described below. 8 Views and comments on any of the points discussed in the paper are welcome. Please contact: Peter Bourton Ofcom Riverside House 2a Southwark Bridge Road London SE1 9HA Email: peter.bourton@ofcom.org.uk Telephone: 020 7981 3494 Fax: 020 7981 3333 Textphone: 0845 456 3003 4 22 On that basis, we intend that the following criteria should be applied to channels passing the audience benefit threshold: (a) interim targets should be set for each service at the end of year one and the end of year five, rising progressively to meet the 10-year target set by the Act. This would provide flexibility to channel providers, and would also deliver immediate benefits to the disabled audience (b) channel providers able to afford to meet the next yearÕs targets in full for access services (Level One) by spending no more than 1% of their qualifying revenue reported in the previous year should be required to do so (c) channel providers unable to afford this would be formally exempted from the full requirements, but in accordance with provisions in section 303(10)(c), would be required to meet the full cost of relevant audio description and signing targets, as well as 66% (Level Two) or 33% (Level Three) of the subtitling targets as appropriate, provided they could afford to do so for 1% or less of their qualifying revenue (d) subject to (e) below, only broadcasters unable to afford Level Three would be completely exempt from providing access services and (e) given that groups owning a number of channels might be able to afford access services, even for individual channels that fell below the affordability threshold, Ofcom would assess whether averaging qualifying revenues across all such channels would deliver more channels with access services, or whether it would be more advantageous to disabled audiences to assess such channels on an individual basis. 23 In the case of BBC and S4C public services, Ofcom will take into consideration, as appropriate under the model described above, expenditure on each channel, as well as total revenues for public services. BBC licensed services aimed at overseas audiences would be exempt. Review mechanism 24 Ofcom proposes to conduct a mid-year review of the audience share and qualifying revenue of channels licensed in the United Kingdom, based on figures for the three quarters up to and including the midpoint of the calendar year. Ofcom will notify the licensee if, on the basis of that review, Ofcom considers that a channel is likely, in the following year, to become: (a) subject to a requirement to provide television access services (b) subject to a different level of provision or (c) excluded from the requirement to provide television access services. 25 If a mid-year review indicates that the audience share of a television service providing television access services has fallen below 0.05% but remains at 0.04% or above, and this is confirmed by figures for the subsequent quarter, Ofcom proposes that the licensee should be required to maintain the existing level of provision in the following year, against the targets applying in the current year. In the event that the average audience share remains below 0.05% in the following year, the requirement to provide television access services will cease at the end of that year, or earlier if the licensee demonstrates to OfcomÕs satisfaction that continuation of the obligation would threaten the viability of the service. 26 If a service that ceases to be required to provide television access services subsequently regains the levels of audience share and/or qualifying revenue that would subject to the requirement once more, Ofcom proposes that the licensee should be required to resume provision at the appropriate level. Ofcom would determine what level of annual target should apply in consultation with the licensee. Presentation and technical standards 27 The Government indicated that it expected the same quality of standards of presentation to apply as hitherto, a view which disability groups have endorsed. Accordingly, Ofcom proposes that television service providers should be required to observe current standards on subtitling, sign language and audio description, which were issued by the ITC 7 Consultation on the draft code on providing television access services Consultation on the draft code on providing television access services Proposed provisions of the code 15 In the light of the factors listed in paragraph 14 above, Ofcom proposes that all UK-licensed television services passing an audience benefit test, which would not face technical difficulties which would be impracticable to resolve, and which crossed an affordability threshold should be required to meet interim targets for television access services, rising to meet the ten-year targets set out in the Act. Interim targets 16 Ofcom proposes to set progressive interim targets for the end of years one and five respectively, in addition to the statutory ten-year target. The target set at the end of year one would apply to each year up until the end of the fifth year, and the target set at the end of the fifth year would apply until the end of the tenth year. We considered whether different interim targets should be set for each year, but concluded that setting fewer interim targets would provide greater flexibility for broadcasters not currently subject to statutory requirements to plan for the changes, and would reduce the impact of the new regulatory burden they face. 17 We propose that broadcasters which are already under an obligation to provide television access services (the BBC and S4C, licensed public service broadcasters and digital programme service licensees) would be required by the code to continue meeting progressively rising annual targets equivalent to those set out in their licences. Audience benefit 18 Ofcom does not have reliable data on the number of persons who would be likely to benefit from television access services, and thus on the extent of the likely benefit in each case. It proposes to gather more information on this to inform the first review of the code, which it intends to carry out within 18 months to two years. In the meantime, Ofcom considers that it is important for both disabled people and broadcasters that a code should be published, both because of the benefits that a code could confer on disabled people, and because of the clarity it would provide to broadcasters about how they should meet their obligations. 19 In the absence of reliable data on audience benefit, Ofcom considers that a reasonable proxy would be the audience share for channels, which is measured independently by BARB3. Hitherto, the Independent Television Commission (ITC) has published this data on a quarterly basis, and Ofcom intends to continue that practice. In its regulatory impact assessment of the code, the Government assumed that television channels with an audience share of 0.05% or more would be required to provide television access services, and we propose to adopt the same basic approach. Technical difficulty 20 Ofcom proposes that some services and types of programme would be exempted from the requirement for certain access services on grounds of technical difficulty. Examples include: (a) audio description of music and news programmes and news services, where there is little space within the dialogue to provide audio description, and less need (b) provision of subtitling that is not supported by commercially-available set top boxes (e.g. Chinese or Urdu) and (c) provision of subtitling or signing, where a service is broadcast with several different language feeds, making the choice of language for subtitling or signing problematic. Affordability 21 The cost of providing television access services is an important consideration; given OfcomÕs general duty to secure the availability of a wide range of television and radio services, we do not believe that it would be appropriate to force providers to leave the market if they cannot afford to provide television access services. As profit figures are not prepared on a consistent basis, we believe that the most practicable proxy for affordability would be the amount of qualifying revenue earned by each service4, and that the code should not require broadcasters to spend more than 1% of their qualifying revenue on television access services. 6 3. The BroadcastersÕ Audience Research Bureau publishes audience statistics used throughout the industry. 4. Qualifying revenue comprises all revenue received by television services (including advertising and subscription revenue), and is prepared on the basis of a statement of principles published by the regulator after consultation with broadcasters. Qualifying revenue figures for the year ending September are reported to the regulator each December, and are subject to auditing at the discretion of the regulator. Ofcom would welcome views on the following questions: Question „: Is overall audience share a reasonable proxy for the benefits to people with hearing or visual disabilities, or is there a practicable and better alternative based on objective data? Question „: Is the audience share threshold of 0.05% appropriate as the basis for determining whether channels should, in principle, provide television access services, or should it be set higher or lower? Question „: Is the approach to exempting services on grounds of technical difficulty appropriate? Question „: Is qualifying revenue a reasonable proxy for affordability on the part of television service providers, or is there a practicable and better alternative based on objective data? Question „: Assuming it is appropriate, is the proposed limit on expenditure for access services of 1% of qualifying revenue reasonable, or should the limit be higher or lower? Question „: Does the proposal to set interim targets at the end of years one and five strike the right balance between securing immediate and growing benefits for people with disabilities, and allowing flexibility for broadcasters to shoulder this new regulatory burden? Question „: Is it appropriate to set lower level requirements for those broadcasters deemed unable to meet the full requirements of Level One, or should such broadcasters be exempted completely? Question „: Is it appropriate to assess average qualifying revenues across channels in common ownership, where this would deliver more channels with access services, while retaining the option of assessing channels on an individual basis if this would be more advantageous to disabled audiences? Question „: Is the mechanism proposed for mid-year reviews of changes in audience share and qualifying revenue a reasonable means of identifying the need for consequential changes to obligations, or is there a better alternative? Question „„: Are the provisions of the draft code relating to the provision of information and publicity about television access services appropriate? 32 Ofcom will also consider any other issues that consultees consider may be raised by the guidelines, provided that their comments relate to the statutory purpose of the code, as set out in section 303. 9 Consultation on the draft code on providing television access services Section „: Questions for stakeholders Consultation on the draft code on providing television access services and will be adopted by Ofcom and made available on its website. 28 There are currently no technical standards for the means by which television access services are to be made available to viewers. However, the draft code says that television service providers should use reasonable endeavours to ensure that such television access services can be accessed by the greatest number of viewers in their homes (whether they receive their services by terrestrial signal, or by satellite or cable). Other provisions 29 The Act also requires that broadcasters provide adequate information about programmes with access services. We propose that broadcasters should be required to provide adequate on-screen information aimed at disabled audiences, as well as providing complementary information to the disabled audience in other ways (e.g. through electronic programme guides, websites, listings magazines, audio magazines and other publications aimed at disabled people). 30 To ensure that the disabled audience has access to programmes in the peak viewing period (6-10.30pm for most channels), the draft code emphasises the importance of providing subtitling and audio description for these programmes. If, on review, it is apparent that this is not happening, Ofcom will consider more prescriptive rules. Because sign language is not yet available in closed format (i.e. it is on screen and seen by all viewers), it is generally accepted that signed programmes may need to be shown late at night and recorded by deaf viewers for subsequent viewing. Television service providers would be required to comply with the presentational standards set by the ITC in its codes on subtitling, signing and audio description, pending review. Review 31 Ofcom proposes to review the provisions of the code within 18 months to two years, to consider whether changes are needed in the light of industry practice, or technological and market developments that may make code revisions appropriate. In particular, Ofcom will want to look at whether it would be appropriate to set further interim targets, to facilitate a gradual progression towards the statutory targets. It will also want to review the costs of providing television access services to see if there is scope to revise interim targets. 8 34 Unless consultees request otherwise, Ofcom will publish any responses (or a summary of them, as appropriate) on its website. It will consider the responses carefully, and decide whether to make any changes to the draft code as a result. Ofcom expects to publish the code towards the end of March. 11 Consultation on the draft code on providing television access services Section „: Next steps Consultation on the draft code on providing television access services 33 A regulatory impact assessment is set out in Annex D. In brief, we are proposing that television service providers will not be required to spend more than 1% of their qualifying revenue on providing television access services, assuming average costs of meeting the requirements. We have updated the average costs in the GovernmentÕs regulatory impact assessment (already over a year old) in the light of industry information, and we have factored in the relatively modest costs of satellite or cable capacity that broadcasters might have to pay to transmit the additional services. In addition, we propose to assume a slightly higher level of costs for providing television access services in respect of services comprising mainly live programming. 34 Our assessment is that the requirements in the code will not impose a significant additional burden on public service broadcasters, which are already subject to interim targets. As many other channels already provide some subtitling, the additional cost of meeting their obligations will not be significant, at least initially. 10 Section „: Regulatory impact Summary 1 This code sets outs the requirements on subtitling, sign language and audio description (Ōtelevision access servicesÕ) that apply to television services licensed under the Communications Act 2003, the Broadcasting Act 1996, or the Broadcasting Act 1990. Statutory provisions 2 Under Sections 303 to 305 of the Communications Act 2003 (Ōthe ActÕ), Ofcom is required to draw up, and from time to time review and revise, a code giving guidance as to the extent to which television services should promote the understanding and enjoyment by persons who are deaf or hard of hearing, as well as those who are blind or partially sighted, or who have a dual sensory impairment. 3 The code is to apply to licensed public service channels, digital television programme services, television licensable content services (TLCS), and restricted television services, as well any digital television programme services (DPS) provided by the Welsh Authority (including S4C Digital). The BBC Agreement will also require the BBC to observe the code in respect of its public television services (BBC1, 2, 3 and 4, CBBC, CBeebies, News 24, and Parliament), subject to any exclusions agreed between Ofcom and the BBC having regard to the considerations set out in section 303(8). The code is not to apply to electronic programme guides provided under a TLCS or DPS licence, or to services comprising advertising (teleshopping), which is excluded from the definition of programme for the purpose of section 303. 4 Ofcom is required to set ten year targets for subtitling, signing and audio description (Ōtelevision access servicesÕ), as well as five year targets for subtitling. It is also empowered to set other interim targets, and intends to do so in the way described below. The targets apply on the fifth and tenth anniversary of the relevant date for the service in question. 5 The Ōrelevant dateÕ for the purpose of determining the tenth anniversary of services is 1 January 1997 in the case of BBC1 and 2, 1 January 1998 for Channel 5, 1 January 2000 for Channels 3 and 4 and S4C Digital. In the case of digital television programme services, the relevant date is the date on which the provision of that service began, and in the case of other television services, the date is the entry into force of the legislation, which is 29 December 2003. In the case of television services starting after 29 December 2003, the relevant date is the date on which provision of that service commenced. Ofcom may determine that a television service should be treated as a continuation of a previous service in order to prevent licensees from avoiding the requirements of this code by replacing one service with another. 6 Ofcom is also empowered to exclude certain types of programme or service from the requirement to provide television access services, or apply different targets to excluded programmes. Targets 7 The statutory targets for broadcasters are expressed as percentages of the total number of hours of programming broadcast by the service, excluding advertisements. They rise from a low level to the 10- year targets prescribed by the Act, that is eighty per cent (80%) for subtitling, five per cent (5%) for signing and ten per cent (10%) for audio description. In the case of the BBC, Channel 3 and Channel 4, the relevant target for subtitling is 90%. The targets reflect the statutory requirement for subtitling to be applied at the rate of 60% of non-excluded programmes from the fifth anniversary. 8 Broadcasters which are already under an obligation to provide television access services (licensed public service broadcasters and digital programme service licensees) are required to continue meeting the interim targets set out in their licences. The BBC is required to continue meeting the interim targets to which it has committed itself. Other broadcasters are required to meet the targets set out in Table 1 below. 13 Consultation on the draft code on providing television access services Annex B: Draft code on providing television access services Consultation on the draft code on providing television access services Ofcom has committed to meeting the seven tests for consultations set out below: 1 Hold discussions with stakeholders before issuing a major consultation document Š so that OfcomÕs thinking is subject to an early sense-test. If this is not possible, an open meeting to explain the proposals will be held soon after publication. We discussed our proposals with a wide range of disability groups, broadcasters and television access service providers, and refined our proposals in the light of those discussions and further consideration within Ofcom. 2 Be clear about who is being consulted, why, on what questions and for how long. We are conducting a public consultation, so anyone interested can respond. However, the consultation will be of particular relevance to disability groups, broadcasters and television access service providers. 3 Make the document as simple and concise as possible Š with a summary of no more than two pages Š and make it easy to respond to. This may involve issuing a shorter version aimed at hard-to-reach groups, like SMEs. Given the brevity of this document, we believe that consultees will find it easy to understand and respond to. 4 Allow 10 weeks for responses, other than on dispute resolution. We plan to allow a slightly longer period, given that the consultation period includes the Christmas and New Year holidays. 5 Analyse responses with care and an open mind. This involves giving reasons for subsequent decisions, and an account of the views expressed. Unless consultees specifically request confidentiality, we shall publish all responses, or a summary of them, as appropriate, on our website. Ofcom will also publish its response to the points raised when publishing the final version of the guidelines, and will post both on its website. 6 Monitor and evaluate consultations, and designate a consultation champion Š an evangelist within Ofcom for better consultation and reach out, and a contact point for comments on our process. In the first instance, consultees with any comments on the consultation process are invited to contact Peter Bourton (contact details in paragraph 8 of the Executive Summary). However, if you do not get a satisfactory response, or would like to make points applying generally to the way in which Ofcom carries out consultations, please contact Phil Rutnam, Partner, Competition and Strategic Resources, by email at phillip.rutnam@ofcom.org.uk, or by phone on 020 7306 3585 (Ofcom) or 020 7634 8811. 7 Explain why Ofcom is departing from any of these tests if it has to Š for example, because of urgency or confidentiality. If a shorter period is required, Ofcom will draw this to the attention of stakeholders, as a red flag item. Ofcom is not proposing to depart from any of the tests. 12 Annex A: OfcomÕs consultation principles 13 In the event that the audience share of a television service currently required to provide television access services falls below the threshold in two successive quarters, Ofcom will notify the licensee that the obligation will discontinue at the end of the calendar year in question. 14 Television services aimed primarily at an overseas audience are exempt from television access service requirements. Technical difficulty 15 Television access services need not be provided in the following circumstances, on grounds of technical difficulty: (a) audio description of music and news programmes and services, where there is little space within the dialogue/sound track to provide audio description, and less need. However, licensees are required to ensure that producers, editors and presenters are trained in techniques to describe the significance of film footage for the benefit of the blind and partially-sighted audience. Licensees are required to provide a statement of the training they are providing by 31 December 2004 (b) provision of subtitling that is not supported by commercially-available set top boxes (e.g. Chinese or Urdu) and (c) provision of subtitling or signing, where a service is broadcast with several different language feeds, making the choice of language for subtitling or signing problematic (d) provision of subtitling for music programmes where copyright laws prevent this and (e) provision of subtitling for live discussion programmes, including parliamentary proceedings. Cost 16 Ofcom has determined average costs per hour of providing programming with subtitling, signing and audio description. This will be used to calculate the costs of three levels of provision: (a) Level One equates to the full current annual targets for subtitling, signing and audio description (b) Level Two equates to 66% of the current annual target for subtitling, as well as 100% of the targets for signing and audio description and (c) Level Three equates to 33% of the current annual target for subtitling, as well as 100% of the targets for signing and audio description. 17 Licensees whose services are not otherwise excluded will be required to achieve the highest level of provision they can afford within a budget equating to 1% of their qualifying revenue. ŌQualifying revenueÕ means the amount defined as such in the relevant licence. Only licensees unable to afford Level Three costs will be exempt from provision altogether on grounds of cost. 18 In determining the applicable amount of qualifying revenue, Ofcom will have regard to the figures from the four most recent quarters before the start of the next calendar year. 19 In the case of channels in common ownership, Ofcom will determine which channels that are not otherwise excluded should provide television access services by averaging the total qualifying revenue across all services in common ownership. If this means that each of the channels would have an average qualifying revenue which would enable it to meet one of the three Levels at a cost of 1% or less of that average qualifying revenue, those channels will be required to provide the relevant Level of television access services. If the averaging of qualifying revenues would mean that none of the services would need to provide television access services, Ofcom will assess eligibility on the basis of the individual qualifying revenues attributable to each service. 20 Services which meet the 1% qualifying revenue threshold for the four successive quarters immediately before the start of the next calendar year will be required to provide television access services at the appropriate level for the whole of the next calendar year. 15 Consultation on the draft code on providing television access services Consultation on the draft code on providing television access services Table „: interim annual targets for the provision of television access services with effect from the relevant date Targets applying from First Second Third Fourth Fifth Sixth Seventh Eighth Ninth Tenth the anniversary of the relevant date Subtitling „„%„„%„„%„„%„„%„„%„„%„„%„„%„„% Signing „%„%„%„%„%„%„%„%„%„% Audio description „%„%„%„%„%„%„%„%„% „„% 14 9 The targets and interim targets represent minimum obligations and apply in each year, from each anniversary referred to in the table and on a rolling basis starting each week from one week after the date to which the previous annual average has been calculated. In deciding not to set progressively higher targets between years one to five, and years six to ten, Ofcom is seeking to facilitate the ability of broadcasters to manage a gradual transition themselves, without the regulatory risk associated with meeting small incremental increases in the targets. However, if it appears to Ofcom that broadcasters are simply complying with minimum obligations, it will consider whether to set more interim targets. Excluded programmes 10 Ofcom may exclude programmes and services having regard, in particular, to: (a) the extent of the benefit which would be conferred by the provision of the assistance for disabled people in relation to the programmes (b) the size of the intended audience for the programmes (c) the number of persons who would be likely to benefit from the assistance and the extent of the likely benefit in each case (d) the extent to which members of the intended audience for the programmes are resident in places outside the United Kingdom (e) the technical difficulty of providing the assistance and (f) the cost, in the context of the matters mentioned in paragraphs (a) to (e), of providing the assistance. Audience benefit 11 Ofcom considers that television services achieving an average UK audience share over a 12-month period of 0.05% or more should be required to meet the targets, subject to passing an affordability threshold and not facing technical difficulties that are impracticable to surmount. Ofcom will publish quarterly figures derived from industry-wide data showing which channels meet or exceed this audience share. 12 The obligation will apply to channels that have achieved this share for four successive quarters, starting with the calendar year in which the fourth quarter figures are published. To aid planning for licensees not currently required by reason of audience share to provide television access services, Ofcom will carry out a mid-year review based on the second quarter figures, and will advise licensees who seem likely to meet the annual average threshold. Scheduling 29 Ofcom expects that a majority of programming with subtitling and audio description will be scheduled at peak viewing times for each channel. If, on review, it is apparent that this is not happening, it will consider more prescriptive rules. However, as signing is currently only provided in open format, it is accepted that signed programmes may need to be shown outside peak viewing hours and recorded by viewers with hearing impairments. Review of the Code 30 This code is subject to review. Ofcom expects to carry out a review within about 18-24 months of the date it comes into force and will look in particular at whether it would be appropriate to set further interim targets, to facilitate a gradual progression towards the statutory targets. 17 Consultation on the draft code on providing television access services Consultation on the draft code on providing television access services Other exclusions 21 Other television services excluded from the requirement to provide television access services are: (a) those comprising advertising only, for example a shopping channel (b) electronic programme guides and (c) those licensed outside the United Kingdom. Changes in audience share and qualifying revenue 22 Ofcom will conduct a mid-year review of the audience share and qualifying revenue of channels licensed in the United Kingdom, based on figures for the three quarters up to an including the midpoint of the calendar year. Ofcom will notify the licensee, if on the basis of that review Ofcom considers that a channel is likely, in the following year, to become: (b) subject to a requirement to provide television access services (c) subject to a different level of provision or (d) excluded from the requirement to provide television access services. 23 If a mid-year review indicates that the audience share of a television service providing television access services has fallen below 0.05% but remains at 0.04% or above, and this is confirmed by figures for the subsequent quarter, the licensee will be required to maintain the existing level of provision in the following year, against the targets applying in the current year. In the event that the average audience share remains below 0.05% in the following year, the requirement to provide television access services will cease at the end of that year, or earlier if the licensee demonstrates to OfcomÕs satisfaction that continuation of the obligation would threaten the viability of the service. 24 If a service that ceases to be required to provide television access services subsequently regains the levels of audience share and/or qualifying revenue that would subject to the requirement once more, the licensee will be required to resume provision at the appropriate Level described in paragraph 14 above. Ofcom will determine which what level of annual target should apply in consultation with the licensee. Presentational and technical standards 25 Licensees are required to observe the appropriate standards set out in the following documents, which are available on OfcomÕs website: (a) Guidance on Standards for Subtitling (b) Guidance on Standards for Sign Language on Television and (c) Guidance on Standards for Audio Description. 26 There are currently no technical standards for the means by which television access services are to be made available to viewers. However, Ofcom expects television service providers to use reasonable endeavours to ensure that such television access services can be accessed by the greatest number of viewers in their homes (whether they receive their services by terrestrial signal, or by satellite or cable). Promotion of awareness 27 Ofcom requires television service providers to promote awareness of the availability of their television access services to potential users of the services by making available accurate and timely information to electronic programme guide (EPG) operators listing their services, and by providing similar information on their website. Ofcom will impose corresponding obligations on EPG operators through the code to be made under section 310 of the Act. 28 Ofcom will also expect television service providers to demonstrate that they are taking effective steps to publicise awareness of their television access services through other means, including periodic on-air announcements and information in publications aimed at persons likely to benefit from television access services. 16 Introduction 1 Under section 7(2)(b) of the Communications Act, since the imposition of quotas for subtitling, signing and audio description will have a significant financial impact on cable and satellite channels, Ofcom is required to undertake a regulatory impact assessment of any quotas it might be considering in these areas. This annex looks at the costs and benefits of each option. Aim of the proposal 2 Ofcom aims to fulfil its statutory obligation to draw up a code giving guidance on the extent to which programme services should promote the understanding and enjoyment of programmes in ways that balance the intention of broadening the benefits of such services to persons with disabilities with the need to avoid placing excessive burdens on broadcasters. In particular, given OfcomÕs duty to promote the availability throughout the UK of a wide range of television services, Ofcom seeks to avoid jeopardising the financial viability of existing television services. Regulatory options Option „: no quotas for subtitling, signing and audio description 3 To establish a base case for the purposes of comparison we have looked at the option in which not quotas are set, even though this option is not open to Ofcom, which has a statutory duty to impose the targets in the Communications Act. 4 This option would avoid the imposition of any new obligations upon broadcasters. However, licensed public service broadcasters and digital programme services licensees (those broadcasting as part of the Freeview service) are already subject to licence obligations to provide a growing amount of television access services, and we assume that these would continue. In addition, a number of cable and satellite licensees choose to provide television access services (in particular subtitling) voluntarily, and we assume that this level of provision would also continue. We do not have data on the cost of the existing level of provision, but it is clear that many broadcasters would continue to incur some costs in providing television access services, either on a voluntary basis, or because of licence obligations. In particular, the licensed PSBs would see no diminution in their obligations. 5 A significant proportion of the UK population make regular use of subtitling, signing and audio description. According to the RNID, research has shown that there are one million people in the UK who use subtitles whenever possible, and five million people use subtitles frequently5. The ITC stated that eight million people each week use the subtitling services provided by the UK broadcasters. According to the Digital TV Group, there are 70,000 deaf people in the UK who use sign language. The RNIB have stated6 that the number of people with sight problems is set to increase with the ageing of the general population, and that by 2031 at least 2.5 million people in the UK will be living with a sight problem. 6 Ofcom plans more research into the number of people who would benefit from different access services in the context of a review of the code in due course. However, in the meantime, it is clear that if the level of provision were not to be increased, a significant number of people would be deprived of the opportunity to understand and enjoy programmes available to their fellow citizens. It is difficult to assess the value of this benefit foregone. However, simply as a rough notion of possible benefits, if it is assumed that the benefit to individual users equates to viewing a video each week rented at a cost of £5, and that one million people would benefit, this would amount to a weekly benefit to users of £5 million, and an annual benefit of £260 million. Option „: full quotas for all channels 7 At the other end of the spectrum, an alternative approach would be to subject all television services to a requirement to meet interim targets rising progressively to meet the ten year targets in the Communications Act, in the same way that annual targets have been imposed on public service licensees. 8 However, if similar targets were applied to other television services, regardless of affordability, those licensees might face costs in year two amounting to 19 Consultation on the draft code on providing television access services Annex D: Regulatory Impact Assessment 5. NOP research, discussed on the RNID website. 6. Memorandum submitted by The Royal National Institute of the Blind to the Joint Committee on The Draft Communications Bill, June 2002. Consultation on the draft code on providing television access services 18 Annex C: Provisional list of television channels required to provide television access services A. Level One (full requirements) BBC „* Sky Sports Extra BBC „* Sky One* BBC „* Sky Sports News BBC „* Sky Premier* BBC News „„* Sky Premier „* CBBC Sky Premier „* CBeebies Sky Premier „* BBC Parliament Sky Premier Widescreen* ITV „* Sky Box Office ITV „ Sky Cinema* Channel „* Sky Cinema „* Channel „* Sky Moviemax* S„C Digital Sky Moviemax „* Sky News Sky Moviemax „* Sky Sports „ * Sky Moviemax „* Sky Sports „ * Sky Moviemax „* Sky Sports „* ITV News E„* Film Four* B. Level Two (signing and AD Š „„„% of requirements; subtitling „„%) Zee TV* Discovery Health Animal Planet Discovery Home & Leisure Discovery Channel Europe* C. Level Three (signing and AD Š „„„% of requirements; subtitling „„%) Paramount Comedy* UK Food Bravo* UK Gold* Living* UK Gold „ Boomerang UK History* Cartoon Network* UK Horizons* Turner Classic Movies UK Style* * denotes that some subtitling is already provided on cable. 14 On the basis of these assessed costs, and the total revenues reported to the ITC, we believe that about 50 channels would be liable to meet the television access service requirements in full or part (see Annex C). Of these, about 30 provide already provide some subtitling. We believe that this approach represents an appropriate balance for the time being between the interests of people with disabilities, and the broadcasters who must pay to provide television access services. However, this approach is subject to review in the light of consultation, and will be reviewed in any case within 18-24 months. 21 Consultation on the draft code on providing television access services Consultation on the draft code on providing television access services 4% of their total revenues, and this burden would rise progressively. Reliable data on profitability is not available, but we believe that services with relatively low audience shares and modest revenues are operating on very small margins, and would not be able to sustain the extra costs of television access services. Given OfcomÕs duty to secure the availability of a wide range of television services, we do not consider that it would be appropriate to force some television providers to close down. Thus, we rejected an across-the-board approach to the provision of television access services. Option „: partial or complete exemptions for some channels 9 We therefore looked at an option which would balance benefits to users with costs to providers. Under this option, television services with an audience share of less than 0.05% would not be required to provide television access services, on the grounds that comparatively few people would benefit from them. In addition, we assumed that television services could afford to spend up to 1% of their total revenues on providing television access services, but that any service which could not afford to meet at least 33% of the subtitling obligations (the main cost driver) by paying 1% of their total revenues should be exempt from the requirements. 10 We looked at the cost of applying a 10% target for subtitling, a 2% target for audio description and a 1% target for signing. We have reviewed the costs stated in the GovernmentÕs regulatory impact assessment on the basis of information provided by broadcasters and access service providers. We have assumed that subtitling would cost £440 an hour for recorded programming, and £500 an hour for live programming. Given the modest capacity requirements, and the fact that many broadcasters already provide some level of subtitling on a voluntary basis, we assumed no additional transmission costs. For signing, we assumed production costs of £810 per hour. Given current technology, there are no additional transmission costs, since signing can only be provided as an integral part of the television picture. 11 For audio description, we assumed production costs of £640 per hour. Assuming a pre-mix solution, there would be a one-off cost of several thousand pounds to enable audio description to be pre-mixed with the original soundtrack, as well as the cost of up to 256 kilobits to transmit the pre-mix version. Industry estimates indicate that the hourly cost of leasing such capacity for a mix of peak and off-peak hours averages about £18. Finally, we assumed that channels comprising mainly recorded programming would repeat about 50% of their programming over the course of a year. 12 Taking these costs into account, we estimate that the average annual costs to television services (based on the end-of-year one targets assumed above) would be as set out in Table 2 below: Table „: Average annual costs of providing television access services (end of year one)„ Level Level „ Level „Le vel „ Mainly £„„„,„„„ £„„„,„„„ £„„„,„„„ recorded Mainly live £„„„,„„„ £„„„,„„„ £„„„,„„„ (non-news) Mainly live £„„„,„„„ £„„„,„„„ £„„„,„„„ (news) 13 Given the current mix of channels and broadcasting schedules, this equates to a total cost to the industry of about £15 million a year, which compares with the benefit to users of £260 million assessed in paragraph 6 above. Both costs and benefits would rise as the level of provision rose, although in all cases, the costs to individual channels would be capped at 1% of total revenues. 20 7. The three columns show annual costs assuming 100%, 66% and 33% requirements for subtitling, plus the full requirements for audio description and signing. The figures for a mainly live news channel exclude the cost of audio description, as it is proposed that news channels should be exempt from this requirement. All figures assume broadcasting for 18 hours per day, a repeat rate of 50% for mainly recorded services, and a repeat rate of 25% for mainly live channels.