Two Rochester newspapers owned by Gannett Co. Inc. have resigned from the newspaper industry's Audit Bureau of Circulations in a dispute over sales of newspapers to motels, airlines, and other businesses -- a type of sales important to Gannett's largest newspaper, USA Today.

The two newspapers, the Democrat and Chronicle and the Times-Union, have been part of the ABC for 30 years and followed the lead of the Toronto Globe and Mail, which quit the bureau last month.

At issue are so-called "bulk sales" -- where businesses or institutions buy newspapers which are then distributed free to their customers and clients.

Gannett and Allen H. Neuharth, chairman and chief executive officer of Gannett, have "been arguing with ABC for at least a year that they count bulk newspapers," said John Morton, a media analyst. "The reason is because USA Today's bulk sales have become an important part of USA Today's strategy for making its sales go up."

Chicago-based ABC audits circulation reports of newspapers using standardized criteria for determining paid circulation, a figure often cited when newspapers establish advertising rates.

Gannett spokesman Charles L. Overby said he did not know if other Gannett newspapers would follow suit but added that Gannett publishers along with executives from newspapers nationwide have expressed dissatisfaction with ABC.

ABC spokeman Charles Bennett declined to comment specifically on the newspapers' action.

The Globe and Mail said it quit the ABC after learning the agency would count papers sold in prisons and mental institutions, but would not consider "bulk circulation."

Newspaper executives argue that papers distributed in hotels, on airlines or in airports and at rental car agencies reach affluent "With bulk subscriptions the publisher does not have control of the ultimate recipient." -- ABC spokesman Charles Bennett readers who are a desirable target audience for advertisers, officials said.

ABC's Bennett argued, however, that the organization decided many years ago to distinguish between those readers who subscribe to a newspaper or buy it at a newsstand and those who receive free copies in a hotel or on an airplane. "This is not to say that bulk readers aren't just as good," Bennett said. "But we just decided years ago that they were different than the individual subscriber. With bulk subscriptions the publisher does not have control of the ultimate recipient."

ABC said its practice of counting prisons or mental hospital subscriptions involved a limited number of subscriptions, and subscriptions were counted only if the newspapers were distributed to people in those institutions who were enrolled in educational programs as students.

"This practice of counting prisons involves only eight or nine subscriptions sold by one individual newspaper," said Bennett. He would not say which newspaper was affected.