We find that the initial presentation said that some 52,000 CATV homes in this market area carried the local station, but duplicated it. We find instead that a greater number, some 77,000, received it but duplicate it.

Now, in terms of conclusion rather than fact, I think this perhaps begins to explain why the statistics are so. ARB credits in southeastern areas six other television stations, all of which are affiliated with the same television network. In terms of receivership, as you know, in the mountainous areas, we are dealing unfortunately with the laws of nature and not with the contours of the engineering prediction or with the question of an ARB market.

The initial presentation referenced one last statistic, and that is that 23,000 CATV homes received it and did not duplicate it. Our figures represent some 13,000 by comparison.

So we have a situation where there are some 5 overlapping top 100 markets ABC contours. We have seven overlapping coverage areas if we include the two that do not place contours but do get some coverage.

I think, then, in summary, to be brief, we ought first to look at the question of those CATV homes that do not receive WNEP. There are some 57,000 of those homes. They are represented by some 34 different CATV systems somewhere within this grade B area. We find, however, in doing some research, all of which will be introduced, if we are permitted, for the record and your examination, that of the 34 CATV systems, some 21 have what appears to be a reasonable rationale-again conclusion, not fact, I must admit-as to why it is not being received. They follow basically three kinds of answers in a pattern. The first instance is that the system is located in this null area, the null area being that portion of the southern part of the grade B contour that is outside what the station apparently considers its receivable area and in the area that ARB does not credit to it itself. The second group of systems say they are in the A contour, the three blue segments here, of another ABC network station, and only within the B of the basic WNEP station.

In the third instance, we find a group that say it is simply not available off the air in our community. So those 3 sets of circumstances appear to pertain to 21 systems of the 34 that can't receive this particular television station in Scranton.

I think we can remove the burden from these fine gentlemen and ask them to put the map down, because there is only one other thing that I would like to reference factually about that presentation. That is that while the initial demonstration to you was a factual presentation--I am referencing here the initial testimony of the FCC chairman-as to what happened to certain CATV systems within the grade B contour, I noticed that there was no reference to what happened to CATV systems and public reception beyond the grade B contour. The facts of the matter are that outside of that egg-shaped contour, there are some 30,000 CATV homes on approximately 22 CATV systems that are receiving the Scranton station.

One final reference of a factual nature is that we would have enjoyed having gone through these facts with reference to what happens in view of the second report and order and its characteristics to the sta

tion's market? Unfortunately, time being what it is, we have not been able to complete it.

I can say this to you, however, for the 30,000 CATV homes beyond the grade B contour of that station not initially referenced, we find that some 22,000 would be lost to WNEP as a result of enforcement in its entirety of the second report and order.

I believe that would conclude the portion of my extemporaneous remarks, Mr. Chairman. It was designed, hopefully, to be constructive, for in Pennsylvania, I think that it is evident that with some 300,000 customers over a 10-year period of time, we have managed rather adequately, and for us, quite thankfully and pleasantly, to reside with the telecasters in our State.

I shall be happy to answer any of your questions, and with your permission, Mr. Chairman, I would like to introduce for the record my initial testimony that I had prepared.

The CHAIRMAN. That will be included in the record.

(The complete statement of Mr. Nowaczek, with references and exhibits, follows:)

STATEMENT OF FRANK H. NOWACZEK, PRESIDENT, PENNSYLVANIA COMMUNITY ANTENNA TELEVISION ASSOCIATION, INC.

INTRODUCTION

My name is Frank H. Nowaczek. I am serving this year as president of the Pennsylvania Community Antenna Television Association, with offices at Meadville, Pa. The association is composed of about 175 operating CATV member systems located in the State of Pennsylvania. Our members represent roughly 10 percent of the CATV industry in the United States.

As you know, Pennsylvania was the birthplace of commercial CATV. Today there are more people getting CATV service in Pennsylvania than in any other State. We serve 1 out of every 11 television homes in the State, or just about 1 million persons. There are some 200 to 250 CATV systems serving more than 500 of the State's communities.

Interestingly enough, with the depth of penetration these facts reveal, the major period of CATV growth in Pennsylvania took place more than 10 years ago. More systems began service in 1951, 1952, and 1953 than have come into existence in all years since that time. That fact is significant in two ways: 1. Our remarks may differ from much of the testimony you will hear about the so-called impact of new CATV systems-because our comments are based upon an established industry with a public service record spanning more than 15 years.

2. The fact that we exist, and the reasons why the Pennsylvania public has accepted us for so long, will provide an insight for you that may be hard to get from other areas of the country.

We hope that insight will, first, be constructive, and, second, bring home ac curately the deep concern we have about some of the propositions in the FCC Rules.

The basic regulatory yardstick employed in the FCC rules is that of the grade B contour. We would like to step away from the forest of the individual rules and regulations, and examine with you this basic grade B concept.

We believe regulations based upon the grade B predicted contour of a television station will cause more problems than they solve. Furthermore, we believe the people of Pennsylvania have already provided the proof of that pudding. In Pennsylvania 300,000 people already use CATV for television reception. The majority live where several grade B contours exist in theory. These 300,000 people are living testimony that:

1. The grade B theoretical contour has nothing to do with whether a station can be received or not.

2. The grade B theoretical contour is no measure of what is local.

3. The grade B theoretical contour is not a certain thing, but a changeable, relative matter.

4. In fact, the grade B contour does not exist, except in theory. If the television service the grade B contour is supposed to represent really existed, there would be no reason for 300,000 Pennsylvanians to ask for our help.

Presentation of the fact situation to support these remarks must start with a people perspective. A people perspective brings to light two essential elements that are only beginning to be understood by persons not familiar with what our service does for people:

1. The first is that CATV represents a problem-but not a television market problem, or a utility problem-we represent a people problem. CATV is the solution to the people's everyday problem of television reception. Think for a moment, and see if you don't agree that this is the best definition you have heard. And all of the why's and wherefore's must come to rest at the point of their impact on the public. And what happens to CATV in regulation, does not really happen to us-it happens to the people who want our service.

2. The second element is, that of all the forces at work in television, CATV is the only one in almost daily contact with the most important man in television today-the television viewer. Examine that for a moment, and ask yourself the question: Who has a more direct, person-to-person contact with the viewer than the CATV operator with, say, 1,000 customers? What person-toperson contact with Joe Smith, television viewer, can any other business force in television boast of-whether it is the television station, network, program supplier, or the FCC?

As a people problem, governmental regulation of CATV appears desirable. When this happens it is also necessary to decide upon a formula to make that regulation workable. We feel we must assess the grade B theoretical contour as the basic regulatory yardstick established by the FCC rules. Only then can we begin to feel that our comments will be constructive.

The proposed rules show the FCC's apparent selection of the station's theoretical grade B contour as the basic regulatory yardstick. With the grade B contour concept the FCC has attempted to develop individual rules and regulations about the issues in CATV. Our concern is not with the development of appropriate rules and regulations, but with the selection of the unworkable grade B concept.

We do not know why the grade B contour was selected as the basic "cookie cutter" of CATV regulation. We prefer to believe it was done inadvertently, because any reference to the facts would reveal that it should be discarded.

We could speculate that it was selected because it was convenient. It already existed although only in the Commission's files-and therefore was readily available to the regulatory administrator. However, I am old fashioned enough to hope that public convenience comes before regulatory convenience.

As you know, the grade B contour is based upon theoretical computations of where a television station's signal should go under certain conditions. The grade B contour is generally used, we are told, as an engineering guide by the Commission staff.

The grade B contour may have some use in Commission administrative deci. sions when the discussion concerns two television stations-it may even have some use to advertisers in figuring out hypothetical markets. But the important point to the public using CATV service is that a grade B contour has absolutely no bearing whatsoever on television reception.

And a very real practical problem arises. We will demonstrate in a moment that the television service supposedly available on the basis of a predicted grade B contour is not available to many people. When they realize, as they do daily sitting in front of home TV sets, that the signal cannot be reasonably received and contrast that with prohibitions on distant signals and the other factors of the rules, we will have an immense public relations problem. The public will jump to the conclusion that "big brother" is now controlling what they can receive. No matter how hard we as CATV operators, or you as Congressmen try, the public will seek the easy conclusion: that reception of television is now under control from Washington.

The public will fail to follow the logic that what should exist, and which does not in fact, should be the controlling factor on what they watch. A simpler solution must be found, one that is not only subject to regulatory administration, but also to public understanding.

To compare reception of television signals with theoretical engineering estimates of its broadcast area is to compare apples and bananas. It is here, in at

tempting to bend one concept (grade B predicted contours) to fit another problem (regulation of CATV reception) that the Commission's concept runs afoul of logic.

Other witnesses have talked about various individual problems raised by the attempt to make the grade B contours the "cookie cutter" within which CATV regulation can take place. I will not repeat those witnesses nor those individual situations.

What I would like to demonstrate is the basic and all-encompassing manner in which the grade B "cookie cutter" violates logic as a regulatory concept when applied broadly across the State of Pennsylvania.

Exhibit 1, attached to this testimony, shows the extent and number of grade B predicted contours that exist now serving Pennsylvania.

Why is this exhibit important? Somewhere along the regulatory road a decision must be made as to what is, and what is not, a “local” television station; or so the present regulatory thinking goes.

The importance of this exhibit is that it shows how an apparently useful premise (the grade B concept) can be employed for an apparently useful purpose (CATV regulation) and in the end cause nothing but confusion; all because the grade B concept is the wrong concept to use in regulating reception.

Examination of the map exhibit will show for example, many points where 5, 6, and even as many as 11 television channels should be getting “local” television service to the people of Pennsylvania.

We believe it follows as logic that the people of Pennsylvania would not use CATV service to the extent they do, unless they had to or felt it was very useful to do so.

I don't believe it is unreasonable to assume that most of the CATV public in Pennsylvania uses CATV to overcome reception problems. I think you would probably agree.

But if the Pennsylvania public uses CATV to overcome reception problems, then we have a very serious problem in rationalizing what good those grade B contours are going to do as the basis for CATV regulation in Pennsylvania. What it amounts to is this: either the signal is available where shown by those grade B contours, or it is not.

The massive extent of public CATV use in Pennsylvania flies in the face of the use of the grade B contour as a reasoned, useful means of developing regulation. The grade B just becomes a "cookie cutter" impressed on the surface of a map. While you can develop all kinds of hypothetical reasons why grade B should be used, you can only make those reasons stick if you avoid the facts. And we do not believe that avoiding the facts will aid the public or for that matter any of the other participants in these issues.

I cannot imagine anything more dramatic as testimony to the folly of eontinuing to discuss a set of regulations based upon a premise as inaccurate of the facts as the predicted grade B contour concept.

Our association's major interest in providing testimony is to provide the committee with constructive information, based realisically on our experience. Suggestions have been made that present a more reasonable approach to the problem. H.R. 14201, for example, suggests a policy of identifying "local" television on a pure mileage basis. We believe this approach can work, and more importantly, we believe it can be explained to, and understood by, the viewing public.

Our association believes the 30-mile rule proposed by H.R. 14201 would be satisfactory for certain specific reasons:

1. It would be a broad enough proposal to apply universally to most situ ations: I believe you will agree that it doesn't make much sense to make a rule that creates more problems than it solves.

2. It would be easy of interpretation without requiring constant recourse to technical and expert witnesses in extensive and frequently contradictory testimony. After all, 30 miles is 30 miles.

3. It would be as fair to all parties as the public interest will permit. With your committee's experience in these matters, you may have other and more suitable tests. Yet, as businessmen serving the public daily, we have found that these same types of criteria are entirely workable, are reasonable, and, most importantly, are within reach in this case.

In closing, and on behalf of the members of the Pennsylvania CATV Associ ation, and the public we serve, I want to thank you for the opportunity for this discussion. We stand ready to provide whatever additional information your committee may desire. Thank you.