Reseaichen in AI often say that certain types of reference are baaed on perception. Their models, however, do not reflect perceptual functioning, but instead represent denotation, an intellectuaUy modeled relation, by using exact feature matching in a serial device as the basic mechanism for reference. I point out four problems in this use of denotation: substitution of an intellectual model for a perceptual one; unclarity about the nature of referential identification; relative neglect of the role of contrast in reference; and inexact matches. I then suggest an alternative theoretical account for perceptually based indexical reference, the figure-ground model, and I e:q>lain how this model handles the four problems.