of CATV, which exist today, if allowed to grow, based upon the survey information we have, and based upon client interest which we know exists, that it will have a direct effect, and next year, when I call on this advertiser, it may very well be that he says, "We have decided not to buy San Diego, because we feel we are getting enough coverage of our schedule out of Los Angeles viewership.'

Now we know this to be a real threat, not something we think might happen. We know that if CATV continues to expand, that this will happen.

Mr. VAN DEERLIN. Mr. Fox, Chairman Henry touched on the degradation of signal on local stations when picked up on cable TV. Has this been a serious problem in San Diego, and what steps have been taken to correct it?

Have you really worked at it?

Mr. Fox. Yes. It is a very serious problem. We have been in communication with our city people, as well as with the CATV operators, trying to find an answer to, trying to get them to do whatever they must do technically to prevent the degradation of our signal. Our engineering people have gone out into the field to look at television homes, which are connected to CATV, and a considerable problem exists.

Mr. VAN DEERLIN. What happens to the picture, actually?

Mr. Fox. Well, several things. First, the picture is a ghosted picture. In other words, there are two or three images on the picture, and sometimes even more, at a time. Then there is a herringbone effect on the picture, or a beep pattern. Sometimes, there is a snowy picture, as if the signal was coming from a great distance.

Sometimes there is a bar which runs down the picture.

Basically, I think an experience which happened to a local businessman and his family illustrates the problem. These people live in a community, a fairly new residential area, where CATV exists.

They took the CATV service as opposed to putting up an antenna on the top of their house. They told me that the following has happened: The picture on the local channels is so bad that they watch network programing from the Los Angeles network stations. Now by so doing, they find that they are able, or they find it more convenient to continue to watch the network stations, and watch the network stations news from Los Angeles, not only because they are already on the channel, but because our picture is of less quality, poor quality, and as the wife put it, she said:

We find that we have lost contact with our community, because we have relied upon television news for so many years, now that we are in this new houseBy "new" it is a couple of years that they have lived there—

we find that we are watching out of town news and we find that things are happening in San Diego that we don't know about, because we are not exposed to regular news programing.

They indicated a great fear that if this spread, that a major media and its impact on the community would be lost, and we would not have television to reach our community and to provide information and news and so forth.

Mr. VAN DEERLIN. So to keep them advised of the activity of their Member in Congress, and all the other things. [Laughter.]

Mr. SPRINGER. Would the gentleman yield for one question?
Mr. VAN DEERLIN. Yes, Mr. Springer.

Mr. SPRINGER. In regard to your first question that was asked, Mr. Fox, I just want to read these few lines, and see if I am getting about what you are trying to say.

This is from the Commission's first order, and reinforced in the second.

"The Commission's statutory obligation is to make television receivers available so far as possible to all people"-and it says here, "All" is in italics "of the United States on a fair, efficient and equitable basis, under sections 1 to 307 of the Communications Act. This obligation is not met by primary reliance on a service which we technically cannot be made available to many people, and which will not be made available to many others, nor will it be compatible with our responsibilities to permit persons willing and able to pay for additional services to obtain it at the expense of those dependent on the growth of television broadcast facilities for an adequate choice of services."

Now my question is that the economics of this situation is beginning to be felt. And this is what I am talking about. Anyone can decide what ought to be done today. Will free television still be available from your station as free television, 5, 10, or 15 years from now? This is really the issue which we are talking about.

Isn't that it?

Mr. Fox. Yes, Mr. Springer. That is precisely the issue.

Mr. SPRINGER. And this is what the Commission in this portion of the order has tried to say; isn't it?

Mr. Fox. Yes, sir.

Mr. SPRINGER. Thank you.

The CHAIRMAN. Mr. Pickle.

Mr. PICKLE. Thank you, Mr. Chairman. I was not here to hear the testimony of Mr. Main, but I would like to ask for general information. As I read your report, in San Diego, you have got five commercial stations.

Mr. MAIN. Yes, sir.

Mr. PICKLE. And two UHF, one of which has construction reserved, and one of which has a construction permit pending?

Mr. MAIN. Yes.

Mr. PICKLE. So that you either have or will soon have probably seven commercial stations in the Los Angeles area. It that correct? Mr. MAIN. San Diego.

Mr. PICKLE. In the San Diego area? Now what is the population of San Diego?

Mr. MAIN. Mr. Fox?

Mr. Fox. The metropolitan area, which is the prime area that we are concerned with, a little over a million people. The metropolitan television home figure is around 350,000.

Mr. PICKLE. Did I understand, then, you also say that in the San Diego area you have 13 CATV systems or portions of systems in operation?

Mr. Fox. Yes. That is right. About 13.

Mr. PICKLE. And where did they come from?

Mr. Fox. Do you mean what signals do they carry?
Mr. PICKLE. Yes. From Los Angeles?

Mr. Fox. All out of town viewing on these systems is from Los Angeles; yes. We carry San Diego stations and Los Angeles stations. Mr. PICKLE. Does this 13 mean that they total 13, both microwave and the regular cable system?

Mr. Fox. At the moment, none of the systems in San Diego use microwave. They are all over the air pickups.

Mr. PICKLE. All of the air. Well, this may be sort of a vague question, but how can 13 of them make a go of it?

Mr. Fox. Well, when we say 13 systems, these represent pockets of our community. San Diego is hilly terrain, and many of these systems are under one franchise or one ownership. They are sections of our community, and in some cases, there are actually small incorporated areas, which are right within the hub of our market area, so when we say 13 systems in operations, we mean 13 separate pockets of CATV activity, throughout, in our metropolitan area.

Now most of these are owned by the same company. Most of these pockets systems are operated by the same cable television company. Mr. PICKLE. Yes. Then you really are not being correct except in the technical sense when you say you have got 13 different systems. Mr. Fox. Well, we think it is. There are

Mr. PICKLE. How many main CATV systems?

Mr. Fox. Do you mean for full franchises that are held?
Mr. PICKLE. Yes.

Mr. Fox. Well, there are about five franchises, but they are so broad. We have a river running through San Diego and the franchise to one CATV operator says, "You have everything west of the river". To another CATV operator it says, "You have everything east of the river".

Mr. PICKLE. Does this mean you have about five separate companies who are operating CATV systems in the Los Angeles area?

Mr. Fox. Yes; approximately. Yes, sir.

Mr. PICKLE. I assume, then, one of your points is that if you have got five CATV systems, at any given hour, one CATV is going to be running a program you have franchised, or you have scheduled, or they will ahead of you. Is that correct?

Mr. Fox. Well, that is one of the problems, but I was primarily addressing myself here to the fact that if these pockets continue to expand, and our studies have shown that they have strung cables as fast as they possibly could, in recent months, without fully connecting homes, so that they could cover as large an area as they could. If these systems expand, instead of being small pockets, these can become large areas that are wired for CATV, and have a dramatic effect on our audience levels.

Mr. PICKLE. You are broadcaster, then, who favors the jurisdictional coverage of the FCC?

But you are also a broadcaster who does not like the rules as laid down all together. Is that correct?

Mr. Fox. No; we do favor the regulations. We do not feel, however, that they have gone far enough to protect the broadcaster, and the public.

Mr. PICKLE. That is all, Mr. Chairman.
The CHAIRMAN. Mr. Rooney.

Mr. ROONEY. Mr. Main, you have great provincial pride in the city of San Diego, I see that you have testified it is not a satellite of Los Angeles, and I commend you for your civic pride. Can you tell me about the terrain in San Diego? I have never been there. It is in southern California, is it not?

Mr. MAIN. I would like Mr. Fox to answer that question, if you would, please.

Mr. Fox. Yes; San Diego is in southern California.

Mr. ROONEY. And what is the terrain in San Diego?

Mr. Fox. Well, it is somewhat hilly and mountainous, as I have mentioned.

Mr. ROONEY. So there are pockets in the area that really need CATV. Isn't it true that despite the fact that you can have a UHF station and an A or B contour, that the people because of the hills and the valleys in that area will not get good reception? Isn't that true?

Mr. Fox. Yes.

Mr. ROONEY. So then the CATV industry, then, complements the broadcaster in San Diego? Shall I direct this question to your

counsel?

[Laughter.]

Mr. Fox. Whenever CATV provides service where there is a reception problem to local stations, we believe it is proper, and is serving a traditional function.

Mr. ROONEY. But as long as it is complementing the broadcasters in your area, and as long as it is not encroaching with respect to your market, your advertising market, you are then for it, but when the people in San Diego can see diversification by way of the CATV cable, then it is or you feel as though it is encroaching on your business, and you are opposed to it. In a sense, this is exactly what you are saying.

Mr. Fox. Well, we believe that the local stations, whenever there is a reception problem, should be carried on the CATV system. We are convinced that the importation of distant signals will adversely affect the services of the San Diego broadcaster to the public. And we therefore have requested the Commission to stop any further expansion of CATV until this matter can be heard in a full hearing.

Mr. ROONEY. Well, in other words, you are opposed to competition. Now let's get back to Mr. Main. You operate channel 3 in Champaign, Ill. I believe. Isn't this the only VHF station in Champaign, Ill.?

Mr. MAIN. Yes. The only commercial one. There is an educational one.

Mr. ROONEY. And have you not had in Champaign a running battle, fighting other VHF stations that want to come in and serve the people in the Champaign area?

Mr. MAIN. We have had no battle with other V's.

Mr. ROONEY. But you have opposed any other requests for VHF stations coming in?

Mr. MAIN. No; we have not opposed any, because there are no VHF channels assigned to that, except channel 12, the university educational station.

Mr. ROONEY. And there have been no applications for another channel in Champaign, VHF channel?

62-610-66- -16

Mr. MAIN. No; there have not been, because there are no other VHF channels assigned to that particular city.

Mr. ROONEY. I have no further questions, Mr. Chairman.
The CHAIRMAN. Mr. Murphy.

Mr. MURPHY. No questions.

The CHAIRMAN. Mr. Satterfield.

Mr. SATTERFIELD. No questions, Mr. Chairman.

The CHAIRMAN. Mr. Mackay.

Mr. MACKAY. Thank you, Mr. Chairman.

Mr. Main, I have been interested in this discussion of the specific factual situation, but I would find it helpful if you or your counsel would undertake to set down a memorandum of what you think the principles, the general principles are that we are confronted with here.

Mr. ROONEY. Use the microphone.

Mr. MACKAY. I said I have been interested in the discussion of your problem in this specific factual situation, but in terms of trying to understand what principles should guide us in the shaping of legislation, it would be helpful to me if you could provide a memorandum which would state the specific principles that you think ought to be incorporated in the legislation.

Now I would like to ask you, and I am speaking as a layman, do you consider the CATV a new animal, really without precedent in the communications industry, or can you draw any analogy between any other part that would fit it under the communications law of the land now?

Mr. MAIN. Yes; I believe it is a new animal.

Mr. MACKAY. And in that respect, the FCC is without power, or rather, should be conferred power with Congress to deal with the situation.

Mr. MAIN. No; I don't think I can agree with that.

Mr. MACKAY. Well, if it is a new animal, certainly the Congress did not contemplate CATV when it enacted the Federal communications law, did it? There was not any CATV at the time Congress created the FCC and conferred jurisdiction on it.

Mr. MAIN. Yes, sir. That is right.

Mr. MACKAY. And your position is that you think the FCC should be given jurisdiction over CATV, and you differ with the Rogers bill. Mr. MAIN. Yes, sir. The same I think they should be, because they assumed jurisdiction over television, when that came along, too. Mr. MACKAY. Now the second thing is that the discussion of the public interest here, I would find it helpful if you could have your counsel discuss a litle more fully what we mean by the public interest. It is very clear that the prime thrust of your statement is your concern with the economic problem that your business faces, and that is that CATV conceivably could stifle and possibly destroy your

business.

Mr. MAIN. Well, by destroying our business and the other local stations in the area, it would destroy the service, the free service to the public in our area.

Mr. MACKAY. But it is true that CATV is a new means for maybe a little more localization of television than is possible now in an area system-isn't this true-on the closed circuit basis?