STATISTICAL REFERENCE IN SUPPORT OF ORAL TESTIMONY OF FRANK NOWACZEK. PRESIDENT, PENNSYLVANIA COMMUNITY ANTENNA TELEVISION ASSOCIATION

In his testimony before this committee on March 22, 1966, E. William Henry, Chairman of the Federal Communications Commission, introduced a chart exhibi; purporting to show the “extent and impact of CATV operation on a television station," WNEP-TV, Scranton, Pa. (See map exhibit A.)

Mr. Henry said it was a "good example of this potential impact of CATV & a local station," and went on to say:

"It is perhaps an extreme case. I would certainly say that this situation rep resents a potential impact greater than that that might normally be experienced by a station. But it does point up the problem."

The chart data-acknowledged by Mr. Henry to have been supplied by WNEPTV-portrayed the grade A and B contours of WNEP-TV and the locations of a number of CATV systems within the contours representing 140,804 subscribers. Of these subscribers, 66,759 were said by Mr. Henry to be served by CATV systems which did not carry WNEP. He went on to say:

"These are represented by red dots on the chart. So you can see, even within the grade A contour of WNEP, there were a great many CATV systems which did not carry on the system those signals. Now if we assume that CATV reception generally in these areas served by CATV systems was inadequate, it might well be that the CATV subscribers would therefore never see the local station, or if they did see it, they would have to make the effort to go back and switch back and forth from on the air to off the air, and there is also a question as to whether they can receive it at all.

"The yellow dots represent CATV systems which carried the local system, the local station, WNEP-TV, but which gave it no nonduplication protection. In other words, they fully duplicated. Subscribers to these systems numbered 51,680, so that the yellow and red bars representing, I guess, close to 85 or 90 percent of the CATV subscribers in this area, either did not carry the local station, or if they carried it, fully duplicated it, and therefore the local station had no exclusivity with respect to the CATV systems."

We believe that in the interests of accuracy certain factual references not related by Mr. Henry, but which are essential to a full understanding of the WNEP/CATV system relationships, should be called to the attention of this committee. To this end, we submit the following factual data obtained from operators of CATV syrtems located within the WNEP-TV station contours and the 1966 edition of Television Factbook, a nationally recognized source of television CATV industry information:

PART I

Facts pertinent to television station and CATV system relationships to the service contours and coverage area of WNEP-TV, Scranton, Pa., with respect to CATV system carriage or noncarriage/duplication or nonduplication of WNEP-TV

I. There are 93 CATV systems serving 145,734 subscribers within the grade A and B contours of WNEP-TV.

A. Thirty-four systems, representing 56,838 subscribers, do not carry WNEP-TV.

B. Thirty-eight systems, representing 75,600 subscribers carry and duplicate WNEP-TV.

C. Twenty-one systems, representing 12,596 subscribers carry but do not duplicate WNEP-TV.

II. Of the 93 CATV systems, only 8 are known to use microwave facilities; all others (85) carry television signals available off-air at the master antenna site.

III. WNEP-TV, a UHF station (channel 16), is affiliated with the ABC network. It is one of three stations which serve the Scranton-Wilkes-Barre television market, ranked No. 70 by the American Research Bureau (ARB).

Four other "top 100 market" television stations, also affiliated with the ABC network, place grade A or B contours over WNEP's contours (see map exhibit B, wherein data cited here are superimposed over copy of Mr. Henry's chart exhibit):

A. WFIL-TV (channel 6), Philadelphia, Pa., ARB TV market No. 4-places both a grade A and a grade B signal over WNEP's contours.

B. WBJA-TV (channel 34), Binghampton, N.Y., ARB TV market No. 82aces both a grade A and a grade B signal over WNEP's contours.

C. WTPA-TV (channel 27), Harrisburg, Pa., ARB TV market No. 33-places th a grade A and a grade B signal over WNEP's contours.

D. WABC-TV (channel 7), New York City (the ABC Network "flagship" stan), ARB TV market No. 1-places a grade B signal over WNEP's contours. IV. A portion of the land area within WNEP's grade A and grade B contours not credited by ARB as being in WNEP's audience coverage area. (See map hibit C.)

V. All of the four ABC-affiliated stations whose contours overlap WNEP's conirs are credited by the American Research Bureau as having audience covere extending beyond their grade B contours and further within WNEP's con

irs.

I'wo other ABC-affiliated stations from "top 100" television markets are also dited by ARB with providing audience coverage within WNEP's contours: A. WJZ-TV (channel 13), Baltimore, Md., ARB TV market No. 11. 3. WFBG-TV (channel 10), Altoona, Pa., ARB TV market No. 41. (For pictorial representation, see map exhibit D, wherein data cited immedily above and below are superimposed over copy of Mr. Henry's chart exhibit.) As map exhibit D reveals, only four counties within WNEP's contours are lusively served by WNEP's ABS network offerings-Wyoming County and ckawanna County, Montour County and Union County.

Within these counties are 81,200 television homes, or 18.7 percent of the total mber of television homes-432,000 credited by ARB as being in the WNEP ́erage area.

All other counties within WNEP's service area are credited by ARB as being red by WNEP and 1 or more other ABC-affiliated stations from 6 other "top "television markets, with the exception of that portion of the land area within WNEP contours not credited by ARB as being served by WNEP-this area exclusively served by ABC stations other than WNEP.

'hus, WNEP has an exclusivity for off-air ABC network service for only 18.7 cent of television homes in its coverage area; while 81.3 percent of the homes credited as being able to receive duplicating ABC-network service from NEP and one or more other ABC-affiliated stations.

'I. Facts regarding CATV systems within contours but not carrying WNEP

.. Within WNEP's contours are 34 CATV systems representing 56,838 subbers which do not carry WNEP-TV. (See exhibit I.)

. In his consideration of these CATV systems, Mr. Henry said:

Now if we assume that CATV reception generally in these areas served by TV systems was inadequate, it might well be that the CATV subscribers would refore never see the local station * and there is also a question as to ther they can receive it at all." (Emphasis supplied.)

. The facts about these 34 CATV locations are:

1. Thirty-three of the thirty-four systems are in communities credited by ARB with coverage from 1 or more other ABC-affiliated stations from top 100 television markets.

2. Twenty-eight of the thirty-four are within grade A or B contours of other top 100 market ABC-affiliated stations.

3. Sixteen of the thirty-four systems representing 27,346 subscribers are in communities where the WNEP-TV signal is not available for off-air reception, or is available "poor to not at all.”

(a) Twelve of the sixteen systems, representing 25,093 subscribers, are in communities not credited by ARB as being within the WNEP coverage area.

4. Six of the thirty-four systems-not included in the 16 reported directly above are within the grade A contour of another top 100 market ABCaffiliated television station. These 6 systems represent 13,052 subscribers. . Summary:

1. Of the 56,838 subscribers 55,088 are in communities credited by ARB with coverage from 1 or more other top 100 market ABC-affiliated stations. (a) Some 27,346 subscribers are in communities where the WNEP signal is not available or available "poor to not at all."

(b) Another 13,052 subscribers are within the grade A contour of another top 100 market ABC-affiliated station.

VII. Facts regarding CATV systems within contours which carry and duplicate WNEP-TV.

A. Within WNEP's contours there are 38 CATV systems, representing 75,00) subscribers, which carry and duplicate WNEP-TV. (See exhibit II.)

B. The facts about these 38 locations are:

1. All 38 systems are in communities credited by ARB with coverage from 1 or more other ABC-affiliated stations from top 100 television markets. 2. Thirty of the thirty-eight CATV systems are within grade A or B contours of other top 100 market ABC-affiliated stations.

3. Twenty-eight of the thirty-eight systems, representing 66,923 subscribers. are in communities where the WNEP-TV signal is not available for off-air reception, or is available "poor to not at all."

4. Two of the thirty-eight systems-not included among the 28 reported directly above-are within the grade A contour of another ABC-affiliate station and within only the grade B contour of WNEP-TV. These 2 systers represent 6,163 subscribers.

C. Summary:

1. All of the 75,600 subscribers are in communities credited by ARB with coverage from 1 or more other top 100 market ABC-affiliated stations.

(a) Some 66,923 of the subscribers are in communities where the WNEP signal is not available or available "poor to not at all."

(b) Another 6,163 subscribers are in communities which lie within the grade A contour of another top 100 market ABC-affiliated station and are within only the grade R contour of WNEP.

VIII. Summary of other significant data regarding CATV systems within contours which (1) do not carry, and (2) carry and duplicate WNEP-TV.

A. In his summary of these two CATV situations within WNEP's contours, Mr. Henry noted that "*** close to 85 or 90 percent of the CATV subscribers in this area, either did not carry the local station, or if they carried it, fully duplicated it, and therefore the local station had no exclusivity with respect to the CATV systems." [Emphasis supplied.]

B. According to published ARB coverage data for the 7 top 100 market ABCaffiliated stations (including WNEP-TV) which are credited with audience cov erage in the WNEP-TV service area, two or more ABC-affiliated top 100 market television stations are receivable in 71 of the 72 CATV communities which either (1) do not carry, or (2) carry and duplicate WNEP-TV, representing 130,688 of the 132,438 CATV subscribers; or, in other words, communities in which no single ABC-affiliated station has off-air "exclusivity."

PART II

Facts pertinent to (1) CATV systems within WNEP's contours; and (2) systems beyond contours but within coverage area and which now carry WNEP, in relation to carriage and nonduplication requirements of FCC's CATV rules

I. Effect of FCC rules on WNEP-TV and the 34 CATV systems within WNEP'3 contours which now do not carry WNEP-TV, representing 56,838 subscribers. A. Twenty-one of the thirty-four systems would be required to carry WNEPTV and protect the station's exclusivity, representing 38,074 subscribers.

1. At 10 of the 21 system locations, representing 21,634 subscribers, the WNEP-TV signal is not available off-air or available poorly at best.

2. In each of the 10 locations, one or more other signals from top 100 market ABC-affiliated stations are available off the air in the community.

3. The 10 CATV systems referred to in A-1 above are within the grade A contour of WNEP-TV, and within the grade B contour of one or more other top 100 market ABC-affiliated stations.

4. In its reasoning behind the issuance of its nonduplication rules, as set forth in paragraph 99 of its "First Report and Order," issued April 23, 1965, the FCC said:

*** the rules will provide for nonduplication, even though a station's signal contour over the CATV system is overlapped by a lower priority signal contour from another station in a different market. (A station with a 'principal community' contour will be protected even though overlapped by grade A's and a grade A will be protected even though overlapped by grade B's.) In such situations, the CATV system, which can effectively

render the signals of all stations carried equal in technical quality, is in fact altering the existing off-the-air situation as to exclusivity. [Emphasis supplied to last sentence.]

5. (Comment, based on facts above.) In the communities represented by the 10 CATV systems referred to in A-1 above, a grade B signal of another ABC-affiliated top 100 market station is available off the air to home viewers, whereas the grade A WNEP-TV ABC signal is not available or available poorly at best; thus any alteration by the CATV system to the existing offthe-air situation as to "exclusivity" would be the enforced carriage of WNEP-TV, the grade A signal, which, today, does not have that "exclusivity"- -a situation in direct contradiction to the FCC reasoning.

B. Nine of the thirty-four systems, representing 15,245 subscribers would be required to carry WNEP-TV and one or more other top 100 market ABCaffiliated stations, because these system locations are within contours of equal priority. However, being in contours of equal priority, they would not have to provide "protection" to WNEP's ABC programs.

C. Four of the thirty-four systems, representing 3,519 subscribers, would be required to carry WNEP-TV but must carry and protect another ABC-affiliated top 100 market station, because these systems are within a higher priority contour of the other stations.

D. Thus, of the 34 systems, representing 56,838 subscribers, which do not now carry WNEP-TV, WNEP-TV would (a) gain 11 systems, representing 16,440 subscribers; (b) gain 10 others, representing 21,634 subscribers, but who are in communities wherein the WNEP-TV signal is not available or available poor at best and are in areas where another top 100 market ABC signal is available; (c) be carried on 9 or more systems, representing 15,245 subscribers, but which would not be required to give WNEP exclusivity; and (d) lose 4 other systems. representing 3,519 subscribers, which would be required to protect another ABC station's exclusivity.

II. Effect of FCC rules on WNEP-TV and the 38 CATV systems within WNEP's contours which now carry and duplicate WNEP-TV, representing 75,600 subscribers.

A. Twenty-nine of the thirty-eight systems would be required to carry WNEPTV and protect the station's exclusivity, representing 65,675 subscribers.

1. At 26 of the 29 system locations, representing 63,623 subscribers, the WNEP-TV signal is not available or available poor at best.

2. In 18 of the 26 locations, representing 40,463 subscribers, one or more other ABC-affiliated top 100 market stations are available.

3. Each of the 18 locations are within the grade A contour of WNEP-TV and within the grade B contour of one or more other top 100 market ABCaffiliated stations.

4. Summary: At each of the 18 locations (a) the grade A WNEP signal is not available or available poorly; (b) grade B signals from other ABCaffiliated stations are available; (c) WNEP-TV does not have off-air exclusivity; (d) [comments based on facts above]. Thus, any alterations by the CATV systems to the existing off-the-air situation as to "exclusivity" would be the enforced carriage of WNEP-TV, the grade A signal, which, today, does not enjoy that "exclusivity"-a situation in direct contradiction to the FCC's reasoning.

B. Six of the thirty-eight systems, representing 1,962 subscribers, would be required to carry WNEP-TV and one or more other top 100 market ABCaffiliated stations, because these system locations are within contours of equal priority. However, being in contours of equal priority, they would not have to provide "protection" to WNEP's ABC programs.

C. Three of the thirty-eight systems, representing 7,963 subscribers, would be required to carry WNEP-TV and one or more other top 100 market ABC-affiliated stations, because the 3 system locations are within contours of these other stations. However, being in the grade A contour of other stations and only the grade B of WNEP-TV, the systems would have to protect another station's ABC programing against WNEP's offerings.

D. Thus, of the 38 systems, representing 75,600 subscribers which now carry and duplicate WNEP-TV, WNEP-TV would (a) obtain exclusivity for 3 systems, representing 2,052 subscribers; (b) obtain exclusivity for 26 other systems, representing 63,623 subscribers, but who are in communities wherein the WNEPTV signal is not available or available poor at best-18 of which, representing

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40,463 subscribers, are in areas where another top 100 market ABC signal is available; (c) be carried on 6 other systems, representing 1,962 subscribers. but which would not be required to give WNEP exclusivity; and (d) lose 3 systems, representing 7,963 subscribers which would be required to carry WNEP-TV. but would protect another ABC station's exclusivity.

III. Effect of FCC rules on WNEP-TV and the 21 CATV systems within WNEP's contours which now carry and do not duplicate WNEP-TV, representing 12,596 subscribers. (For listing of 21 systems, see exhibit III.)

A. Sixteen of the twenty-one systems, representing 8,661 subscribers, won! be required to carry and protect WNEP's exclusivity.

B. Five of the twenty-one systems, representing 3,935 subscribers, would be required to carry WNEP-TV, but, being a higher priority contour of another top 100 market ABC-affiliated station, would have to protect another station against WNEP-TV. WNEP-TV would, therefore, lose these 3,935 subscribers, IV. Effect of FCC rules on WNEP-TV and the 20 CATV systems beyond WNEP's contours which now carry (and duplicate) WNEP-TV, representing 29,907 subscribers (CATV systems in Pennsylvania only).

A. Thirteen of the twenty systems, rerpesenting 24,227 subscribers, are within contours of other top 100 market ABC-affiliated stations; these subscribers would be lost to WNEP during times when ABC programs of the other stations were duplicated by WNEP-TV.

B. Five of the twenty systems, representing 5,680 subscribers are also beyond contours of other ABC-affiliated stations and could continue to view WNEP-TV programing.

V. Summary:

A. WNEP-TV, under the rules established in the second report and order. wuold obtain ABC program exclusivity for 112,410 subscribers of CATV systems as against the 12,596 subscribers which it now serves exclusively a gain of 99.814.

B. However, 85,257 of the 112,410 subscribers are in areas wherein the WNEPTV signal is not available or available poor at best, and where other top 100 market ABC-affiliated television stations are available.

C. The 62.097 of the 85,257 subscribers in communities wherein WNEP'S signal is poor or not available are in grade B contours of other top 100 market ABC-affiliated stations, and wherein enforced carriage of WNEP-TV would give the grade A WNEP-TV signal an equality of signal with the grade B signals which it does not now have-thus, any alteration by the CATV systems to the existing off-the-air situation as to exclusivity would be the required carriage and "protection" of WNEP-TV-a situation in direct contradiction to the FCC's reasoning behind its "protection rules."

D. The 62,097 subscribers referred to in C directly above, would be lost to the ABC-affiliated stations within whose grade B contours the system locations lie. even though the signals of these stations are available in the communities and the WNEP-TV signal is not available or receivable poor at best.

1. In its reasoning behind the establishment of carriage rules (par. 87 of the FCC's first report and order regulating CATV systems) the FCC said: "In the view we take *** carriage of a station's signal is desirable wher ever the signals brought in by a CATV system compete effectively for the audience upon which the station relies. For, as we have already concluded. failure to carry the station's signal in such circumstances puts an unreasonable restriction upon the station's ability to compete. From the point of vier of national advertisers and program suppliers, it makes little difference where a home in the station's normal audience is located. Signal contours, in this context, are merely useful rules of thumb for determining where a station's basic market area lies. Within that area, the station's right to be carried should not depend upon a showing of specific need in each instance." [Emphasis supplied.]

2. Although the FCC says that it is necessary to carry both the grade A and grade B signals because "failure to carry the station's signal in such circumstances puts an unreasonable restriction upon the station's ability to compete," it then takes away from the grade B stations the opportunity to compete for these 62,097 CATV subscribers through its "nonduplication-protection" rules-even though the signals of these grade B stations are available and the grade A (WNEP-TV) signal is not available or available poor at best.