1. FCC: Closed Captioning over IP (IPCC) 2012/5/141Confidential

2. Summary of Report & Order for IPCC FCC Requirements for content delivered over IP: – Content Providers/Distributors shall provide and distribute Closed Captioning data with quality equal to Television Closed Captions (CEA-608 and 708) – Devices shall render or pass through Closed Captioning data to consumer devices through their video outputs, while maintaining the quality of the captions. “Full-length” video programming shown on television only – Rules do not apply to “clips” or “outtakes” – Rules do not apply to “consumer generated media” – Rules only apply to programming shown on television inside the U.S. Released: January 13, 2012 - Compliance Date (for devices): January 1, 2014 2012 2013 2014 Final Rules released 13 January 2012 Compliance Date (for devices): 1 January 2014 2012/5/142Confidential

3. Influence to BDA licensees BDA Licensee Requirements – BD-Live content providers/distributors: Will be required to provide Closed Caption data in text format (not bitmapped PG format). – BD-Live players: Will be required to render or pass-through Closed Caption (equivalent to CEA 608 and 708 requirements) for BD-Live content, after 1 January, 2014. – HDMI interface may need to be updated to support Closed Captions pass-through delivery (FCC concluded that HDMI is capable of rendering open captions rendered by the source device, and will not require an update to the specification). Liability – If a user files a complaint to the FCC that “Full-length” video programming over BD-Live does not comply with IPCC regulations, the liable parties would be: the video programming owner, for failure to provide the programming with captions the video programming distributor, for failure to deliver the programming with captions, or the device manufacturer, for failure to support IPCC rendering in the device – Penalties: $10,000 Forfeiture for Violations of the IP Captioning Rules: – BDA should not be found liable by the FCC, because it is a technology licensor and not a video programming owner, distributor or device manufacturer. 2012/5/143Confidential

4. Proposal Study if BD-Live has sufficient technical means to deliver Closed Caption data to the Device in the form of Text Subtitles or Closed Caption data embedded in video elementary streams. Notify licensees of the FCC IPCC regulations, and upon conclusion of the above study, provide a guideline of the technical means to deliver Closed Caption data to the Device over BD-Live. 2012/5/14Confidential4