hour of Laverne and Shirley and find that eight or nine of these other stations are showing the same program that you bought exclusively in your market at more or less the exact same time as you're showing it?

Now, we used to speculate about such effect. Now the ratings actually publish daily what the Philadelphia and other stations did in New York. As of just 2 weeks ago, Nielsen began this new.

So some buyer can now look and say, "Gee whiz, the program that you own in New York that you're getting a five rating for got a two rating on the Philadelphia station being imported. Therefore, maybe I can get a better rate if I buy the Philadelphia station to reach a New York audience."

Look how convoluted this whole environment has become. Although it is certainly a copyright matter as it relates to the MPAA, it becomes a very, very difficult operational matter for any television station who's experiencing this, and I would tell you that our experience in New York is exactly the same as those that you will find in most every other market in the country right now. Syndicated exclusivity is a real necessity.

Mr. KASTENMEIER. Now, that's what I was trying to suggest, with the colloquy between Mr. Synar and Mr. Valenti. The configurations are so complex depending on what sort of analysis you're making that it almost defies any simple understanding, much less a simple solution.

Mr. MAZZOLI. I just had one quick question. I have to leave. I guess this is because I don't always follow these things.

Syndicated exclusivity is no longer in being, which means that you have competition for programs such as Laverne and Shirley, and M*A*S*H-

Mr. POLINGER. Right.

Mr. MAZZOLI [continuing]. At all hours of the time.

I thought that that rule was being held up or something?

Mr. POLINGER. Nope. It was abolished, and in exchange came the CRT rate adjustment

Mr. MAZZOLI. The CRT thing?

Mr. POLINGER [continuing]. Because when the distant signal importation rules and syndicated exclusivity were abolished by the Commission it was then expected that the tribunal would probably revisit this matter and assess some additional rate adjustment to take that into effect.

In having done so, there of course is a unique difference between syndicators and stations. In a sense, we, the station, feel that we have bought exclusivity for our market for say, Laverne and Shirley; but when Laverne and Shirley goes before the tribunal, and money gets apportioned, the MPAA gets the money, because it's their copyright.

So they get paid by the station for the exclusivity we pay for the market, and they get paid again when it comes out of the tribunal; and we try to figure, now how are we going to make money on that show just by selling time because we don't have a any recourse for the exclusivity argument anymore. We don't get either exclusivity or the CRT distribution.

Mr. MAZZOLI. I don't know much about how your rates are set, but I assume that if you don't have a program exclusively then ob

viously it's less valuable to your advertisers. The fees go down and they might go to Phili' and get a price to come back to New York. Mr. POLINGER. The program is sold to us exclusively, but because of the structure as we perceive it-common carriers, and the other imported stations-the purpose of the basic buyer/seller relationship that had existed in the first place when both parties negotiated for programs is now defeated.

Mr. MAZZOLI. Thank you.

Mr. KASTENMEIER. Mr. Polinger, there is certainly a point of difference between us in terms of the analysis of what the CRT did and why this was an understanding. As you know, there was a bill pending which had passed the House and was in the Senate, which addressed these questions far more directly, including 'must carry', exclusivity. It had a formula for it.

Now, how can you say that the CRT took it upon itself to solve this question and, as a consequence, successfully prevent the legislation from being realized when it acted as it did? Why would the CRT take no notice of the fact that we were in the process of passing a bill dealing much more directly with these questions?

Mr. POLINGER. I empathize with that observation because we were a party to that compromise and we were somewhat shocked and surprised at the outcome at that particular time.

Mr. KASTENMEIER. Well, it was predictable once the CRT acted as it did, I must say. One of the problems I have with that decision, is that it presumed to make policy.

Now, the FCC is entitled to make policy, but the CRT is not. The CRT decision also presumed to preempt the Congress, I would say, in solving some of the questions that many of the people in this room were trying to solve at that time, 2 years ago.

Mr. POLINGER. Mr. Chairman, your personal efforts as well as those of the subcommittee in trying to make that compromise work were very much appreciated and we were very pleased to be a part of that. I would also like to say, at this moment-and I did mention it in my prepared statement; I want to repeat it-that we at the NAB stand ready still to confer with any interested parties concerning some possible comprehensive legislation that can address all of these issues and, once again, come back into the umbrella of solving some of these very complicated and highly mechanical type problems.

Mr. KASTENMEIER. The gentleman from California, Mr. Berman. Mr. BERMAN. You describe yourself as this unwilling superstation and tell problems you have, and ask, is the MPAA or one of its member now going to come to say, "We want $100,000 more for the Odd Couple?" The first question I have is: You may be an unwilling superstation, but you're a willing regional station. What is this microwave into all of New England? Is that imported into cable? Mr. POLINGER. That's right.

Mr. BERMAN. All right.

Mr. POLINGER. But it is done under the same aegis that one becomes a superstation, which is that a common carrier has the right to take your signal and sell it to whatever cable system they wish without compensating the station. Whether you're delivered by satellite or whether you're delivered by microwave is unimportant.

Mr. BERMAN. But then isn't some potential advertising client in New Haven saying, "Hey, this WPIX is getting two in the New Haven/Hartford market. I can get a better rate by doing some advertising there maybe than I can on that market and maybe in Boston," and all these little raids into New York that are costing you, are you getting some derivative benefits from your signal being imported into these other places?

Mr. POLINGER. We are getting no benefit nor is any other station; but the answer to your question

Mr. BERMAN. Well, wait. I don't understand. Somebody has to get a benefit. When a person says, "Well, I can get that, too. I can advertise on that Philadelphia station to get into New York," the Philadelphia station is therefore getting some benefit from showing Laverne and Shirley in the New York market.

Mr. POLINGER. I don't think the penetration or the audience is substantial enough to warrant a tremendous amount of support of that nature at this time. These figures just

Mr. BERMAN. So then that isn't a problem.

Mr. POLINGER. These new rating figures were just initiated for the very first time 2 weeks ago. We always used to have another column in our daily rating which used to say "Other Viewing." What we never did know was what was included in "Other Viewing.”

We know that there were 12 to 15 rating points a day going to "Other Viewing."

For the very first time, Nielsen has broken down what stations or cable networks are getting the viewing. So I guess, for the first time, an advertiser is able now to look at this and say, "My, my. Now we know to whom some of this 'Other Viewing' is going."

I could speculate various scenarios as to how that will or will not be used. But still, you know, the station in Hartford or Albany, or wherever perhaps our station is imported dislikes our being imported into his market as much as we dislike these stations being imported, because most of us really look to our local markets and want to preserve the integrity of our individual DMA and ADI as the significant area in which we compete.

Mr. BERMAN. Well, do you have any exclusive rights to any sports shows out of the New York area?

Mr. POLINGER. Oh, we have exclusive rights to the Yankees. Those games are transported, you know, all

Mr. BERMAN. Now, you mean when some beer company is advertising on your station and knows that that station is going to all of New England, that your advertising rates are totally unaffected? Even though you didn't ask to be imported, when you go to the advertisers you don't take that as a factor in consideration in the negotiations over advertising rates?

Mr. POLINGER. Absolutely not, because the sponsor who buys advertising on an independent station is interested in that market. Let's go back, fundamentally, to why advertising is bought.

Advertising is bought on networks for products which are marketed throughout the country and which can be advertised in a uniform and particular manner to support the marketing effort on a national basis. A lot of advertising which is spot advertising is bought on local stations to support marketing in the local market.

Let's take Bloomingdale's. We all know about that account. What do they care where our station goes other than in New York?

Mr. BERMAN. Well, Washington. The store manager here in Washington might, you know.

Mr. POLINGER. Well, yeah. They don't have too many locations outside of New York.

Mr. BERMAN. All right. But let's assume

Mr. POLINGER. A local client is not interested in this other coverage.

Mr. BERMAN. No. I could see why the local client wouldn't be. But

Mr. POLINGER. I think there are buyers who may perceive that there is additional coverage, but that's highly incalculable in other

markets.

Mr. BERMAN. And your advertising department does not take into consideration that if a brewery is deciding to advertise its product it may have an interest in the entire regional audience that's viewing your signal carrying the New York Yankees?

Mr. POLINGER. But our competitor superstations have the same programming we do, Mr. Berman.

Mr. BERMAN. They don't have the Yankees.

Mr. POLINGER. WOR has the Mets and many other sport programs, and is carried all across the country. WOR's rate structure is less than ours.

Mr. BERMAN. Why, because it's not based in New York?

Mr. POLINGER. Well, the evaluation of a station's advertising time is based on the ratings in that particular market.

Mr. BERMAN. That's right.

Mr. POLINGER. I could very easily see why someone not in the business would say, "Well, that doesn't seem very intelligent to me. Why don't you go look at the rest of the country and see what the ratings are in other markets in which you're carried by cable." But cable is not measured in other markets.

It is in New York. There may come a time, 5, 10 years from today, when the measurement that has been just initiated in New York exists in most of the major markets of the country, and then we will experience a different type of advertising buys; but not today.

Mr. BERMAN. But at this particular point you get no commercial benefits from being imported-

Mr. POLINGER. I couldn't say no. Maybe there are clients who buy us who don't tell us they buy us for that purpose, but we don't sell it that way. We don't market our product that way, but there may be others who may perceive some benefit to our external carriage that we don't talk about.

Mr. KASTENMEIER. In this respect, if the gentleman would yield, it's been suggested that after many, many years of being exclusively a passive station, WGN, for example, is starting to upgrade its advertiser costs based on its coverage. Maybe it's doing it reluctantly, but nonetheless it's doing it.

The reason I ask you if you know about that-is, is it inexorable that eventually you're going to have to come to terms with the fact that your coverage is greater than local in terms of advertising or what you pay for programs?

Mr. POLINGER. Mr. Chairman, WGN is a sister station of ours and if there has been any rate increase I would suggest that it's because, this year, their ratings in Chicago have far exceeded their ratings last year. They have made some programming acquisitions that have improved their competitive position in the Chicago market.

I would probably suggest that it would be more related to that if, indeed, they have raised their rates. I don't know that for a fact. Mr. KASTENMEIER. I think you have made an equitable point about the independent stations that are passively carried either on a regional basis, by microwave or other methods, or as a superstation because they do not by and large control the recompense of the copyrighted content of their programming even through the compulsory license.

They get no direct benefit if they can't translate it into advertising revenues. It seems like an unfair trade practice to use a station when the station receives no benefit from it.

That problem really has never been confronted because the sides in the contest have focused on other aspects. It's primarily those who own programming content versus the other people.

Mr. POLINGER. I could not agree more with what you just said. Mr. KASTENMEIER. I take it you're a member of Mr. Hedlund's organization, Independent Telecasters.

Mr. POLINGER. Yes.

Mr. KASTENMEIER. I think the allusion to the new licensee in Florida was a case where the television station wanted to be carried by one or more cable stations not within their own region.

This is not a local "must carry" situation. You must have some members who want to be considered or carried as a distant signal because it does figure in their marketing calculations and in their potential.

Now, I'm sure those members represent the minority of your group, but there are such people.

Mr. HEDLUND. Mr. Chairman, may I address that? I think you are correct. I'm aware of the Florida station and really a lot of our other new stations, virtually all of which are UHF stations, who suffer a disadvantage compared with VHF signals simply in terms of their signal reach.

The signal is subject to more interference. You need special antennas that, in many parts of the country, are not commonplace. People have VHF-only antennas because there were no UHF stations and, therefore, why have the extra grid on your antenna?

What we generally have, however, are situations where the area in which you sell advertising or for which your ratings are measured are whether it's Arbitron or Nielsen-based on a thing called an ADI or DMA which is a service area for which the bulk of the people in that geographic area depend upon the stations in your city for a majority of their television time.

What you have is a lot of independents, especially UHF independents, who are carried only on those cable systems for which they are a "must carry," but there are many other cable stations outside of the "must carry" range but still within their market area. In those cable systems the UHF independents would be considered a distant signal.