SOME LEGAL FACETS OF SATELLITE
COMMUNICATIONt
Allen E. Throop*
A decade ago Soviet scientists put into space the first man-made
satellite. A little over a year later this country placed in orbit a satellite,
equipped with communications apparatus which functioned for its designed life of about two weeks, and transmitted a rebroadcast of recorded
voice and telegraph messages, including President Eisenhower's Christmas
greeting to the world.
Only seven years later, in June of 1965, there was established commercial communications service between North America and Western
Europe for telegraph messages, voice and television by a satellite positioned about 22,000 miles over the equator. And since that time, this
communications marvel has been joined by companions of more than
double its capacity. One of these, a satellite of the so-called INTELSAT
II series, initiated regular commercial service between the United States
mainland, Hawaii and Japan on January 27th of this year. Another INTELSAT II satellite was launched on March 22nd and has just recently
become available for commercial service over a vast area extending eastward from North America to West Pakistan, including all of Europe, South
America and Africa.1 When appropriate earth stations are established,
communication by satellite with these new continents will become a
reality. A larger group of satellites, the so-called INTELSAT III series,
much more powerful than their predecessors, scheduled for launching in
1968, and of much greater lifetime, will be able to provide multi-point
communication simultaneously between various countries or regions, as
well as continents.' Meanwhile, twelve earth stations are operating in
eight countries, and it is expected that more than forty of them will be
in operation around the world by the end of 1969.
t Seventh Annual Edwin A. Mooers Lecture delivered at the Washington College of Law,
The American University, April 28, 1967.
* Member of the Bars of the District of Columbia and New York. Former Vice President
and General Counsel, Communications Satellite Corporation (June, 1963-December, 1966).
The writer is indebted to Peter M. Andersen, a member of the Bar of the District of
Columbia, and Fredrick W. Huszagh, a member of the Bar of Illinois, present or former
members of the legal staff of Communications Satellite Corporation, for their helpful
participation in the preparation of this lecture.
1. On September 27, 1967, a third INTELSAT II was launched to supplement the capacity
of the satellite now handling commercial traffic in the Pacific area.
2. By October of 1967, earth stations operating with INTELSAT satellites were located
in the following areas: Ascension Island, Australia, Canada, England, France, Germany,
Grand Canary Island, Italy, Japan, Philippines, Spain, Thailand, and the United States
(States of Hawaii, Maine and Washington).
1967]
SATELLITE COMMUNICATION
The ten years since the first Sputnik have been full of legal developments related generally to the use of outer space. I shall mention only
certain of those developments which have been of special significance in
the realm of satellite communication.
INTERNATIoNAL EVENTS
Of initial importance was the resolution of the General Assembly of
the United Nations adopted on December 20, 1961, commending the
view that "outer space and celestial bodies are free for exploration and
use by all States in conformity with international law" and also expressing the belief that communication by means of satellite should be avail3
able to the nations of the world as soon as practicable on a global basis.
In conformity with these initial views and further action of the United
Nations General Assembly in 1963,1 the General Assembly on January 25,
1967 approved by acclamation a proposed treaty on Principles Governing
the Activities of States in the Exploration and Use of Outer Space, Including the Moon and other Celestial Bodies.' This treaty has now been signed
in behalf of 79 nations, including the United States, the Soviet Union and
the United Kingdom, and a few days ago received the approval of the
United States Senate, without a dissenting vote.' Its significance, from the
standpoint of communication, is its formal recognition that there is no invasion of a nation's sovereignty in the emplacement above or the movement over its territorial area of a satellite utilized for communication or
other peaceful purposes.
Another international event of major significance was the Extraordinary Adminstrative Radio Conference on Space Communication, held in
1963 under the auspices of the International Telecommunications Union
(ITU), an organization established in 1865 and now associated with the
United Nations as a "specialized agency." This Conference, among other
things, made substantial allocations of specific bands in the electro-magnetic spectrum which were requisite for subsequent conduct of the operations of a commercial communications satellite system; and it also
adopted various rules which were essential for the implementation of
these allocations.7
3. U.N. Gen. Ass. Res. 1721 (XVI), Dec. 20, 1961.
4. U.N. Gen Ass. Res. 1962 (XVIII), Dec. 13, 1963.
5. U.N. Gen. Ass. Res. 2222 (XXI), Dec. 19, 1966.
6. The treaty was signed in behalf of the United States on January 27, 1967, and pursuant
to advice and consent of the Senate (90th Cong., Ist Sess., 113 Cong. Rec. 5835 (1967)), was
ratified by the President on May 24, 1967. Upon deposit of the requisite ratifications, which
also included those of the United Kingdom and the Soviet Union, the treaty became effective
on Oct. 10, 1967. T.I.A.S. No. 6347; 61 AJ.I.L. 644.
7. Final Acts of the Extraordinary Administrative Radio Conference, November 8, 1963,
15 U.S.T. 887, TIA.S. No. 5603.
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[Vol. 17
THE COMMUNICATIONS SATELLITE ACT
While these developments were occurring on the international scene,
events of moment, having also major international impact, were occurring
at home. One of these was the launching of Telstar on July 10, 1962, with
its demonstration of the ability of a satellite to transmit live television and
provide other types of communication not possible by submarine cable.
The other was the enactment on August 31, 1962, of the Communications
Satellite Act of 1962 (hereinafter referred to as the "Satellite Act").8
The Satellite Act was the result of legislative travail engendered by three
competing political philosophies. First, the view that, since the enormous
scientific developments which had made satellite communication possible
were in large measure the product of Government research at the cost of
the taxpayer, the Government should be the owner of all satellite communication facilities; second, the view that the communications satellite,
as a microwave "tower in the sky," should be merely another communication facility, owned and operated, under appropriate regulation, by the
established international communications carriers; and third, the view
which, after vigorous debate and the ultimate invoking of cloture in the
Senate, finally prevailed.' Under this last view the carriers were to be
8. Communications Satellite Act of 1962, 76 Stat. 419, 47 U.S.C. §§ 701-44 (1964) [hereinafter called the Satellite Act].
9. In March, 1961, the Federal Communications Commission initiated an inquiry (Docket
No. 14024), inviting views as to the best method of insuring participation in a satellite
system by the international common carriers on an equitable and non-discriminatory basis.
This resulted in an initial report in which the Commission concluded that a joint venture of
international common carriers deserved exploration; and in July the Commission designated
a so-called Ad Hoc Carrier Committee, to be presided over by a representative of the Commission, which would participate in discussions and make recommendations to the Commission.
The Committee's Report, submitted in October, 1961, recommended that ownership of
the satellites in the proposed satellite system should be shared, as a rate-base investment,
by the United States carriers authorized to provide satellite-communication service; that the
system should be developed, controlled and operated, under appropriate regulation, by a
non-profit corporation whose directors would include three Presidentially appointed directors,
two directors appointed by each carrier-owner and one director appointed by non-carriers
eligible to lease satellite facilities; and that each United States carrier should be permitted to
own or share in the ownership of earth stations, or xent capacity in such stations, and have
access to the satellite system. See Hearings on Space Satellite Communications Before the
Subcommittee on Monopoly of Senate Select Committee on Small Business, 87th Cong., 1st
Sess. 424-30, 492-501, 667-732 (1961) [hereinafter cited as Hearings]. See also, Federal Communications Commission Annual Report 116-19 (June 30, 1961). On July 24, 1961, President
Kennedy had issued a Statement on Communication Satellite Policy favoring carrier ownership
and operation of the U.S. portion of a global satellite communication system, under appropriate government regulation, on a basis which would assure non-discriminatory use of and
access to the system by all communications carriers. See Hearings at 733, and Report of the
Senate Comm. on Commerce S. Rep. No. 1584, 87th Cong., 2d Sess. 25 (1962).
On January 11, 1962, Senator Kerr introduced a bill to create a communications satellite
corporation, the ownership of which would be limited to United States communications common carriers authorized by the Federal Communications Commission to participate in such
ownership. On February 7, 1962, President Kennedy sent to the Congress a proposed bill, in-
1967]
SATELLITE COMMUNICATION
permitted to purchase up to half of the capital stock of a new corporation,
which would be granted a Congressional franchise to establish, alone or
with foreign governments or entities, a global satellite communications
system. The balance of the corporation's capital would be obtained
through an offering of stock to be carried out in a manner calculated to
encourage its widest distribution among the American public. The corporation's management would be entrusted to a board of fifteen directors,
of whom six would be elected by the carrier stockholders and six by the
public stockholders. The remaining three directors were to be named by
the President, with the advice and consent of the Senate. The President
was also empowered to name 15 incorporators who were to establish the
corporation, serve as its initial Board of Directors, and arrange for its
initial stock offering.' 0
THE ESTABLIS
ENT OF COMSAT
Pursuant to their statutory mandate, the incorporators on February 1,
1963, established as a District of Columbia corporation, soon to be nicknamed Comsat, the Communications Satellite Corporation. Shortly thereafter, following the election of its initial executive officers, Comsat began
troduced in the Senate by Senators Kerr and Magnuson, and in the House by Representatives Harris and Miller, which was the genesis of the Satellite Act, providing for a privately
owned communications satellite corporation, in which stock ownership would be shared
by the carriers and the public. See Letter from President Kennedy transmitting the bill, set
forth in S. Rep. No. 1584, 87th Cong., 2d Sess. 27 (1962). And on February 26, 1962, there
was introduced in the Senate by Senator Kefauver, for himself and certain other Senators,
a bill which would have established a Communications Satellite Authority, as an agency
of the Government, to own and operate the United States ground stations and the United
States portion of a global satellite system. See Report of Senate Comm. on Aeronautical and
Space Services, S. Rep. No. 1319, 87th Cong., 2d Sess. (1962) ; Report of Senate Comm. on
Commerce, S. Rep. No. 1584, 87th Cong., 2d Sess. (1962); and Report of House Comm. on
Interstate and Foreign Commerce, H.R. Rep. No. 1636, 87th Cong., 2d Sess. (1962). See also,
Report of Senate Comm. on Foreign Relations, S. Rep. No. 1873, 87th Cong., 2d Sess. (1962).
For an analysis of the Satellite Act, see Note, The Communications Satellite Act of 1962, 76
Harv. L. Rev. 388 (1962) and Levin, Organizationand Control of Communications Satellites,
113 U. Pa. L. Rev. 315 (1965).
10. Thirteen individuals were named as incorporators of the Corporation under recess appointments, which were made after the adjournment of the 87th Congress because of the fact
that Senate consideration of the earlier appointment of the same individuals on October 4,
1962, did not receive Senate consideration. One of the incorporators, Philip L. Graham, withdrew prior to the President's resubmission on January 30, 1963 of the names of the others.
These individuals were John T. Connor, George J. Feldman, Beardsley Graham, Sam Harris,
Edgar F. Kaiser, David M. Kennedy, George Killidn, Byrne Litschgi, Leonard H. Marks,
Bruce G. Sundlun, Sidney 3. Weinberg and Leonard Woodcock. On February 28th, there
were submitted the names of Joseph V. Charyk and Leo D. Welch, who also became
President and Chairman and Chief Executive Officer of Comsat, respectively. The appointments were confirmed by the Senate after hearings by both the Senate Commerce Committee
and the Senate Committee on Aeronautical and Space Sciences. See Hearing on Communications Satellite IncorporationsBefore Senate Commerce Comm., 88th Cong., 1st Sess. (1963);
Hearing on Nominations of Incorporations Before Senate Comm. on Aeronautical and
Space Sciences, 88th Cong., 1st Sess. (1963).
16
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[Vol. 17
business as lessee of a once well-known mansion in northwest Washington. The country is deeply indebted to those men who, as a matter of
public service and at substantial personal sacrifice, spent many long
hours, first as incorporators and then as members of the initial Board of
Directors, in the establishment of Comsat and in the early administration
of its affairs.
Apart from the need to build rapidly a competent staff and to arrange
for interim bank-loan financing (since, oddly enough, Congress had provided no funds whatsoever for immediate expenses), the three matters
which pressed most urgently upon the management of the new corporation for early action were first, the development of a technical program
for the establishment of a commercial communications satellite system;
second, the provision of the corporation with the financial sinews which
would make it possible to take at least the initial steps to bring this program to fruition; and third, the establishment of an appropriate means of
international collaboration so that the system established would meet the
statutory objectives of the Satellite Act.1 '
The development of a technical program for establishment of global
communication involved preliminary studies of the cost of alternate types
of satellite systems, since it was recognized that the characteristics of the
system to be finally established would depend upon the outcome of design
and development work, which could not be completed for some time and
as to which the concurrence of foreign communications entities would
later undoubtedly be required. These preliminary studies, which took
several months, indicated a need of Comsat for approximately $200,000,000.12 Accordingly, steps were initiated in the spring of 1964 for the raising by Comsat of that amount of capital by the offering, at $20 per share,
of ten million shares of Common Stock. The financing was consummated
on June 11, 1964, and on September 17, 1964, the Presidentially-appointed and stockholder-elected directors succeeded the original incorporators, who until that time had served as Comsat's directors."3
11. Section 102(a) of the Satellite Act declares it to be "the policy of the United States
to establish, in conjunction and in cooperation with other countries, as expeditiously as
practicable a commercial communications satellite system, as part of an improved global
communications network, which will be responsive to public needs and national objectives,
which will serve the communication needs of the United States and other countries, and which
will contribute to world peace and understanding." 47 U.S.C. § 701 (a) (1964).
12. Prospectus of Communications Satellite Corporation covering the offering of 10,000,000
shares of common stock, at 13-14 (June 2, 1964).
13. The individuals elected as directors by the public shareholders were Joseph V. Charyk,
David M. Kennedy, George Killion, Leonard H. Marks, Bruce G. Sundlun and Leo D.
Welch; those elected as directors by the carriers were Eugene R. Black, Harold M. Botkin,
James E. Dingman, Douglas S. Guild, Horace P. Moulton and Ted B. Westfall; and the
initial Presidentially appointed directors were Frederic G. Donner, Clark Kerr and George
1967]
SATELLITE COMMUNICATION
The financing had involved not only the preparation of a prospectus
adequately describing the new venture, but the establishment of procedures for the offering to over two hundred communications carriers of
the privilege of subscribing for up to half of the ten million shares to be
issued, and for the simultaneous offering to the public of a corresponding
number of shares and of any shares not subscribed for by the carriers.
The carrier-offering was over-subscribed.14 The offering of shares to the
public was made through a nationwide group of nearly four hundred
underwriters and about eight hundred other securities firms in such
manner as to meet the statutory requirement of their widest possible
distribution, with the result that more than 92% of the shares were sold
in lots of 50 shares or less. 15
THE ESTABLISHMENT OF INTELSAT
The year 1964 witnessed not only the consummation of Comsat's
permanent financing. It also saw the culmination of international negotiations, initiated in 1963, which laid the basis for the structure of a global
satellite system. These negotiations led to two interrelated agreements,
a so-called "Interim Agreement" and a related "Special Agreement,"
both of which were opened for signature in Washington on August 20,
1964,16 and on that date signed by 11 countries, but to which 56 countries
Meany. Mr. Marks resigned as a director in August, 1965, shortly before assuming his duties
as Director of the United States Information Agency, and the resulting vacancy in the
Board was filled by James McCormack. Mr. Welch resigned in November, 1965 as Chairman
and Chief Executive Officer and was succeeded in that office by Mr. McCormack, but continued to serve as a director. Following the resignation in June, 1965 of Dr. Kerr as a
Presidentially appointed director, Dr. William W. Hagerty was appointed to fill the vacancy.
See Comsat Annual Report at 15 (1965).
14. Only communications common carriers who were authorized by the Federal Communications Commission to do so were permitted to own stock of Comsat. Satellite Act, 47
U.S.C. § 734(b) (1964). In granting authorizations to carriers who sought permission to subscribe for such stock, the Commission reserved authority to allocate stock among the carriers
in the event of over-subscription. An allocation formula proposed by Comsat, as set forth in
the Prospectus at 52-53, was regarded as acceptable by the Commission. Since the subscriptions of 163 authorized carriers aggregated 6,354,250 shares, allocation was necessary. The
application of the formula resulted in a reduction to 2,895,750 shares of the subscription
of American Telephone and Telegraph Company for 4,250,000 shares. The subscriptions of
other carriers for the remaining 750,000 carrier shares were not affected.
15. The terms of the purchase contract with the underwriters were designed to secure the
widest distribution. The relevant provisions were set forth in the Prospectus as follows:
The Underwriters agree that they will use their best efforts to offer the Shares in a
manner to encourage the widest distribution to the American public. In this connection,
each Underwriter agrees that in filling orders for Shares retained by it for direct sale ... ,
it will first make allotments of not in excess of 50 Shares, and in no event will it make
allotments in excess of 100 Shares unless by such limitation of allotments it would be
unable to dispose promptly of all such retained Shares....
The Representatives [of the Underwriters] will obtain from each Selected Dealer
to whom they make sales for the accounts of Underwriters an agreement substantially
to the same effect as this paragraph ....
Prospectus at 51-52.
16. Agreement Establishing Interim Arrangements for a Global Commercial Communica-
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[Vol. 17
are now parties.17 The present members of the consortium established by
the agreements, now known as the International Telecommunications
Satellite Consortium, or INTELSAT, account for over 90% of the
potential world communications traffic that might be served by a global
satellite system in the next few years.
The first of these agreements was among governments. It imposed on
them no financial commitments, but provided for the structural framework of the proposed organization, stated the goal of the establishment
of a single global commercial communications system at the earliest
practicable date, provided that membership should be open to all members of the International Telecommunications Union, and expressed the
desire that all nations should be permitted to use the system on a nondiscriminatory basis. Furthermore, it provided that each government,
or its designated communications entity, as members of a consortium,
would undertake the requisite financial commitments for and share in
the ownership of the "space segment," a term adopted to describe the
satellites themselves and the terrestrial facilities used for their tracking
and control.
These commitments were expressed in the related so-called Special
Agreement, which deals with the operational aspects of the consortium,
such as the sharing of costs and revenues, the establishing of charges
for satellite use, procurement policies and procedures, and rights in
inventions and technical data. The United States Government of course
designated Comsat as its member. Most, if not all, of the other members
were or are government ministries or government-owned corporations.
The percentages of ownership were intended generally to reflect anticipated use of the system. This resulted in an initial United States quota
tions Satellite System, 15 U.S.T. 1705, T.I.A.S. No. 5646 (1964). (There is annexed to this
document the related "Special Agreement," and the Supplementary Agreement on Arbitration
referred to infra note 20.) For a summary of the Interim Agreement and Special Agreement,
see Simsarian, Interim Agreements for a Global Commercial Communications Satellite System)
59 Aj.I.L. 344 (1965).
17. By September 30, 1967, the following fifty-eight countries had signed the Agreements:
Algeria (2/19/65), Argentina (2/20165), Australia (8/20164), Austria (2118/65), Belgium
(9/29/64), Brazil (2/4/65), Canada (8/20164), Ceylon (2/17/65), Chile (2/19/65), China
(2/17/65), Colombia (2/19/65), Denmark (8/20/64), Ethiopia (2/19/65), France (8/20/64),
Germany (9/21/64), Greece (2/19165), India (2119/65), Indonesia (2/19/65), Iraq (2/17/69),
Ireland (1015/64), Israel (10/30/64), Italy (8/20/64), Japan (8/20/64), Jordan (2/12/65),
Korea (2/24/67), Kuwait (2/12165), Lebanon (2/12/65), Libya (2/12/65), Liechtenstein
(7/29/66), Malaysia (5/25166), Mexico (10/25/66), Monaco (6/22/66), Morocco (6/22/66),
Netherlands (8/20/64), New Zealand (2/15/65), Nigeria (12/8/65), Norway (8/31/64), Pakistan (6/30/65), Peru (6/9/67), Philippines (10130/66), Portugal (10/29/64), Saudi Arabia
(2/19165), Singapore (613166), South Africa (2/8/65), Spain (8/20/64), Sudan (2/12/65),
Sweden (9/28164), Switzerland (9/16/64), Syria (2112/65), Tanzania (6/16/67), Thailand
(5/12/64), Tunisia (2/19/65), United Arab Republic (2/19/65), United Kingdom (8/20/64),
United States (8/20/64), Vatican City (8/20/64), Venezuela (12/30/65), Yemen (6/29/65).
1967]
SATELLITE COMMUNICATION
of 61%.11 On the other hand, it was recognized that many of the consortium members, including certain initial members, would have quotas
of less than 1 per cent.
The disparity in ownership and investment interests presented obvious
problems. They were solved in various ways:
First: A governing body, the Interim Communications Satellite Committee, was provided for, which with Comsat as manager would have
overall responsibility for the establishment and operation of the space
segment.
Second: Membership on the Committee would be limited to representatives from any member or group of members having an ownership
interest of 1.5 per cent or more, and the voting power of each member
would be in proportion to such interest.
Third: Since, by virtue of its investment quota, Comsat's representative
on the Committee would have a majority vote, it was provided that
certain specified important matters would require an additional favorable
122 % vote, which in case of deadlock might in some instances be reduced to 8y per cent.19
Understandable concern as to possible United States domination was
also alleviated by the making of provision for an arbitration agreement,
which has now become effective. 20 Furthermore, the arrangements were
18. Article XII(c) of the Interim Agreement, supra note 16, provides that the specified
quotas of the original signatories to the Special Agreement shall be reduced pro rata as
necessary to accommodate additional signatories. However, as the result of the placing by
that Article of a ceiling of 17% on the combined quotas of such additional signatories,
Comsat's quota cannot be reduced to less than 50.6%.
19. Article V of the Interim Agreement, id., provides that decisions on the following matters must have the concurrence of representatives whose total quotas exceed the quota of the
representative with the largest quota by not less than 12.5%:
a) Choice of type or types of space segment to be established.
b) Establishment of general standard for approval of earth stations for access to
the space segment.
c) Approval of budgets by major categories.
d) Adjustment of accounts.
e) Establishment of the rate of charge per unit of satellite utilization.
f) Decisions on additional contributions to be made by signatories in excess of a
total of two hundred million United States dollars.
g) Approval of the placing of contracts exceeding one-half million United States
dollars.
h) Approval of program for launching of satellites and for associated services.
i) Approval of quotas and financial conditions for countries desiring to become
parties to the Agreements.
j) Decisions relating to withdrawal of signatories from or termination of rights
and obligations of signatories under the Agreements.
k) Recommendations to signatories concerning amendments to the Special Agreement.
1) Adoption of the rules of procedure of the Interim Committee and its Advisory
Sub-committees.
m) Approval of appropriate compensation to Comsat for its performance of services
as Manager.
20. Supplementary Agreement on Arbitration (Effective November 21, 1966). Annexed to
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established by interim agreements, with a duty on the part of the Committee by January 1, 1969, to make recommendations as to definitive
arrangements, and a duty on the part of the United States Government
to convene an international conference to consider the Committee's report
within three months after its submission.2 1
So much for the present international structure of satellite communication. There are obviously many problems for the future. Shall the present
rather loose joint-venture structure be continued or shall there be established in 1970 a more formal and complete international organization?
Is a single global system also to provide the vehicle for intra-continental
and regional service within the boundaries of a single country? If, instead,
there are to be regional systems as well as the global system, how can
the requisite coordination of service between all systems best be established? The answers to these and other questions will need to be hammered out as matters of national and international policy in the months
ahead.22
DOMESTIc REGULATION OF INTERNATIONAL COMMUNICATION
To properly consider the domestic aspects of satellite communication,
Comsat must be viewed in its proper regulatory setting. The Satellite
Act itself subjects Comsat to governmental supervision which is probably
more pervasive than that exercised over any other private corporation
in the United States; and such regulation is in addition to that imposed
upon Comsat, as a communications common carrier, by the Communications Act of 1934.23
Interim Agreement and Special Agreement as part of T.A.S. No. 5646. Although this Supplementary Agreement employs the much-used concept of the ad hoe tripartite tribunal to
decide a particular dispute, it does contain unique provisions for the selection of the
third impartial arbiter. For an interesting analysis of the tripartram arbitration mechanism, see
Note, The Use of Tripartite Boards in Labor, Commercial, and International Arbitration,
68 Harv. L. Rev. 293 (1954).
21. Article IX The Interim Agreement provides that the following principles are to goyern
in the development of the terms of the definitive arrangements:
(1) Regardless of the form of the definitive arrangements,
(i) their aims shall be consonant with the principles set forth in the Preamble to
this Agreement;
(ii) they shall, like this Agreement, be open to all States members of the International Telecommunications Union or their designated entities;
(iii) they shall safeguard the investment made by signatories to the Special Agreement; and
(iv) they shall be such that all parties to the definitive arrangements may have an
opportunity of contributing to the determination of general policy.
22. See infra note 64, for a summary of the problems specified by President Johnson to be
considered by the Task Force on Communications Policy appointed by him on August 14,
1967.
23. Section 401 of the Satellite Act provides: "The corporation shall be deemed to be a
common carrier within the meaning of section 3(h) of the Communications Act of 1934, as
1967]
SATELLITE COMMUNICATION
The Satellite Act provides for a close relationship between Comsat and
the National Aeronautics and Space Administration (NASA), the Executive Department and the Federal Communications Commission. One of
NASA's principal functions under the Satellite Act is to.provide Comsat
with launch services on a reimbursable basis.2 4 The regulatory role of the
Executive Department is expressed in broad terms. The President, among
other things, is to aid in the planning, development and review of the
program for the expeditious establishment of a commercial satellite system, including the activities of the corporation; to coordinate the activities of governmental agencies related to this program; to arrange for the
appropriate utilization of the system for general governmental purposes;
and to further the efficient use of the electromagnetic spectrum and the
technical compatibility of the satellite system with existing communications facilities.2 5 These functions have by Executive Order been delegated
to the Director of Telecommunications Management." A further function of the President under the Satellite Act, namely, to exercise supervision over the relationships of the corporation with foreign governments
or entities to assure consistency with United States foreign policy,"T has
by Executive Order been delegated to the Secretary of State.21 Under the
law the Department of State must be notified of any proposed foreign
business negotiations of the corporation and must give advice as to foramended, and as such shall be fully subject to the provisions of title II and title HI of that
Act. The provision of satellite terminal station facilities by one communication common
carrier to one or more other communications common carriers shall be deemed to be a common carrier activity fully subject to the Communications Act. Whenever the application of
the provisions of this chapter shall be inconsistent with the application of the provisions of
the Communications Act, the provisions of this chapter shall govern." 47 U.S.C. § 741 (1964).
24. Section 201(b) of the Satellite Act provides that the National Aeronautics and Space
Administration shall:
(1) advise the Commission to technical characteristics of the communications
satellite system;
(2) cooperate with the corporation in research and development to the extent
deemed appropriate by the Administration in the public interest;
(3) assist the corporation in the conduct of its research and development program
by furnishing to the corporation, when requested, on a reimbursable basis, such satellite
launching and associated services as the Administration deems necessary for the most
expeditious and economical development of the communications satellite system;
(4) consult with the corporation with respect to the technical characteristics of the
communications satellite system;
(5) furnish to the corporation, on request and on a reimbursable basis, satellite
launching and associated services required for the establishment, operation, and maintenance of the communications satellite system approved by the Commission; and
(6) to the extent feasible, furnish other services, on a reimbursable basis, to the
corporation in connection with the establishment and operation of the system.
47 U.S.C. § 721(b) (1964).
25. Satellite Act, 47 U.S.C. § 721(a) (1) (2) (3) (6)&(7) (1964).
26. Exec. Order No. 11191, 3 C.F.R. 1964-65 comp. 273 (1965).
27. Satellite Act, 47 U.S.C. § 721(a) (4) & (5) (1964).
28. Exec. Order No. 11191, supra note 26.
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(Vol. 17
eign policy considerations.2 9 Annual reports required by the Satellite Act
to be furnished by the corporation to the President and the Congress
round out the frequent contacts of Comsat with the Executive Department. 0
As already noted, Comsat is subject to direct regulation by the Federal
Communications Commission, not only under the Satellite Act but also
as a common carrier under the Communications Act. Areas of regulation
covered by the Communications Act include the construction of communications facilities and the use of particular frequencies, as well as rates
and accounting matters.3 ' To these regulatory powers of the Commission
the Satellite Act added others. It provides, among other things, that the
Commission shall insure effective competition in the procurement by the
corporation or other United States carriers of property and services for
the satellite system (including the related earth stations), shall pass upon
the technical characteristics of the system, and shall assure its availability
for use on a non-discriminatory basis.32 The Commission is also empowered to grant authorizations for the construction and operation of earth
stations, to require and restrict the making of additions to the satellite
system, and to require the establishment of facilities to provide commercial satellite communication to particular foreign points when the Secretary of State, after consultation with the National Aeronautics and
Space Administration as to technical feasibility, advises the Commission
that such establishment is in the national interest. 3
A recital of these regulatory powers of the Commission indicates that,
in granting them, the Satellite Act to a large degree ignored the likelihood that Comsat would share with foreign governments and business
entities in the ownership and operation of the space segment of the
global satellite system.3 4
29. Satellite Act, 47 U.S.C. § 742 (1964).
30. Satellite Act, 47 U.S.C. § 744(b) (1964). It may be noted that § 103(c) of the Satellite Act, 47 U.S.C. § 743(c) (1964), makes it the duty of the corporation and all common
carriers to comply with the provisions of the Act and rules and regulations promulgated
thereunder; and.that § 403(a) of the Act, 47 U.S.C. § 743(a) (1964), grants to the Attorney
General broad powers to seek equitable relief in the federal courts in the event that the
corporation takes action which is inconsistent with the policy and purposes of the Act or
in the event of actual or threatened violation of the provisions of the Act by the corporation
or others, actual or threatened obstruction or interference with activities authorized by the
Act, or actual or threatened refusal, failure or neglect to discharge duties thereunder.
31. The Communications Act of 1934, 47 U.S.C. §§ 201-205, 214, 220, 301 and 303. The
Satellite Act also grants authority to the Commission with respect to rates charged by the
corporation and as to accounting matters. 47 U.S.C. § 721(c) (5) (1964).
32. 47 U.S.C. § 721(c) (1) (2) (4) and (6) (1964).
33. Satellite Act. 47 U.S.C. § 721(c) (3) (7) (9) and (10) (1964).
34. The Satellite Act provides that "In order to achieve the objectives and to carry out
the purposes of this Act," the corporation is authorized, among other things, to "plan, initiate,
1967]
SATELLITE COMMUNICATION
So long as the Commission's regulation relates only to earth stations
located within territorial limits of the United States, orifto the charges
and terms of service applicable to service by Comsat to its customers,
obviously foreign entities have no concern. But one can understand the
lack of enthusiasm on the part of Comsat's foreign partners in INTEL*SAT for any exercise by a United States regulatory body of jurisdiction
over the celestial portion of the satellite system, which is almost 50%
owned by them and hangs in orbit over the ocean or some country other
than the United States.
There has been an awareness of this clash of concepts, and efforts have
been made, with some success, to reconcile them. Since it regulates the
rates charged by Comsat to others, the Commission has not sought to
exercise jurisdiction over the charges made by INTELSAT to Comsat or
other entities for the lease to them of satellite capacity. Satellite design
and procurement, however, have presented a more difficult problem.
One approach to this problem would be to consider the intergovernmental "Interim Agreement" as superseding the provisions of the Satellite Act, to the extent that any regulatory action otherwise contemplated
by the Act relates to the space segment. However, since the intergovernmental agreement, although executed pursuant to a Congressional mandate
under Section 305 (a) (1) of the Satellite Act, was in the nature of an executive agreement and not a treaty, the classical basis for this approach is
lacking; 5 and consequently it has not been taken by the United States
governmental authorities. An alternative approach would be to require
that wherever any proposed action is to be taken by Comsat as manager of the Consortium which, if taken by Comsat alone, would require regulatory authorization, specific authorization must be obtained
by Comsat before the action is taken. Such a requirement presents a dilemma. If Commission approval of Comsat's participation in the utilization of a particular space segment facility is not sought until after the
governing committee of INTELSAT has acted, it is obvious that, as a
practical matter, the implementing of a Committee decision as to such
utilization, participated in by Comsat's foreign partners, might, to the
construct, own, manage, and operate itself or in conjunction with foreign governments or
business entities a commercial communications satellite system;" 47 U.S.C. § 735 (a) (1964).
(Emphasis added.)
35. Missouri v. Holland, 252 U.S. 416 (1920). Despite the absence of classic treaty status,
it could be argued that the Interim Agreement has a similar impact on domestic laws by
virtue of its relationship to the Satellite Act. On this point, see Byrd, Treaties and Executive
Agreements in the United States, 148-163 (1960); and McDougal & Lans, Treaties and Congressional-Executive or Presidential Agreements: Interchangeable Instruments of National
Policy, 54 Yale L.J. 181 and 534 (1945).
THE AMERICAN UNIVERSITY LAW REVIEW
[Vol. 17
deep annoyance of these partners, be frustrated by an adverse action by
the Commission.3 6
On the other hand, if, before presenting a matter to the governing Committee, Comsat must first obtain the Commission's approval of a sepcific
satellite design or construction program, the matter comes to the Committee as a fait accompli, so far as Comsat's vote is concerned; and, in
the absence of further regulatory action, Comsat's representative on the
Committee is, to the embarassment of all concerned, precluded from readily modifying his original position in the course of the Committee's deliberations.
Furthermore, action may be initially proposed by the Committee representative of some other member of INTELSAT; and it may be urgent
and important that Comsat's representative be able to vote promptly as
a member of the Committee and with assurance that his vote will not be
repudiated by the Commission.
The problem is obviously a difficult one, involving delicate foreignrelations considerations. In an effort to solve it, a procedure was established in the summer of 1966 under which, following advance consultation by Comsat with the Department of State, the Director of Telecommunications Management and the Commission as to matters to be acted
on by INTELSAT's governing Committee, Comsat will be advised by the
Department of State as to the position to be taken by its representative on
matters of concern to the United States Government, on a basis which
will permit the requisite flexibility in discussion. 37 Although the procedure anticipates that instructions will normally be given expeditiously, it
recognizes that in some situations the Commission may deem it appropriate to first hold public hearings.
The most vigorous domestic controversies affecting international satellite communication have involved two problems: First, earth-station own36. Such a situation was threatened in connection with an application of Comsat to the
Federal Communications Commission for authority to participate with its INTELSAT
partners in the construction of six satellites of advanced design to be deployed in 1968, where
for reasons not here relevant, the application, although filed at a time which appeared to
Comsat to afford adequate opportunity for Commission consideration, was in fact not acted
upon by the Commission until after action by the governing committee of INTELSAT. Application of Communications Satellite Corp., 4 F.C.C.2d 8 (1966).
37. See testimony of Frank E. Loy, Deputy Assistant Secretary for Transportation and
Communications, before Subcommittee of House Committee on Government Operations,
and exchange of letters between the Department of State and Comsat describing the procedure.
Hearings Before Subcomm. of House Comm. on Government Operations, 89th Cong., 2d
Sess. 392-96, 406-07 (1966). See also statement of General James D. O'Connell, Director
of Telecommunications Management, on this matter before the same Subcommittee. Hearings
Before Subcomm. of House Comm. on Government Operations, 90th Cong., 1st Sess. 65
(1967).
1967]
SATELLITE COMMUNICATION
ership and responsibility; and second, the identity of Comsat's customers,
or, in popular phrase, the "authorized user" question.
It is not hard to sense the strategic importance of earth-station ownership and responsibility. The earth station is the gateway to the satellite.
From Comsat's standpoint, it is an important part of the satellite system.
To the international carriers, on the other hand, ownership of some significant link in the communications chain is essential in order to provide a
rate-base upon which their charges may be structured. If the anticipated
expansion in international communication is to be met to a large degree
by satellite means, a failure of the international carriers to share in the
ownership of the requisite earth-station facilities would provide the dim
prospect of a steadily declining rate base.38
Hence, earth-station ownership was a major controversial issue when
the Satellite Act was before the Congress 9 The issue was deferred, but
not resolved, by the happy expedient of granting the Commission the
authority to permit ownership of any particular earth station by Comsat,
or the carriers, or both. 0
Initially, following many months of briefing and counter-briefing the
Commission on May 12, 1965, adopted an "Interim Policy," somewhat
modified early in 1966, which by its terms was to continue in effect for
two years after the granting of the first station operating license.4 Under
38. The Satellite Act prohibits the inclusion in a communication carrier's rate base of
amounts invested by it in voting stock of Comsat. Satellite Act, 47 U.S.C. § 734(c) (1964).
39. The original administration bill would have given both the satellites and the earth
stations to the corporation. For the legislative history with respect to this issue, see Schwartz,
Comsat, the Carriers, and the Earth Stations: Some Problems with Melding Variegated
Interests, 76 Yale LJ.441, 443 n.8 (1967).
40. Section 201(c) (7) of the Satellite Act, 47 U.S.C. § 721(c) (7) (1964), provides the Commission shall:
(7) grant appropriate authorizations for the construction and operation of each
satellite terminal station, either to the corporation or to one or more such carriers
jointly, as will best serve the public interest, convenience, and necessity. In determining
the public interest, convenience, and necessity the Commission shall authorize the construction and operation of such stations by communications common carriers or the
corporation, without preference to either ....
41. Report and Order: Amendment of Part 25 of the Commission's Rules and Regulations
with respect to Ownership and Operation of Initial Earth Stations in the United States, 38
F.C.C. 1104 (1965) ; modified, 2 F.C.C. 2d 658 (1966).
The Commission's "Interim Policy" was adopted in a proceeding initiated by a "Notice of
Proposed Rule Making or Formulation of General Policy," promulgated in December, 1964,
in response to a Petition filed by Comsat in August, 1964, seeking the adoption by the Commission of a rule under which Comsat would own and operate the initial United States earth
stations. The Commission's action was twofold. It adopted the Interim Policy referred to
in the text, over the dissent of Chairman Hyde and Commissioner Lee, who favored an
interim policy which, although empowering Comsat to be -basically responsible for the designing, construction and operation of the stations, would give to it only a 517o interest in
them, the remaining interest to be allocated among the Unitd States international carriers.
It also adopted certain rules under which the earth-station complex which was to be under the
26
THE AMERICAN UNIVERSITY LAW REVIEW
[Vol. 17
this "Interim Policy" Comsat was permitted to go forward with the construction (or acquisition) and operation of earth stations in the northwestern and iiortheastern continental United States and in Hawaii. At
the end of the two-year period, the Commission would come to grips with
the fundamental issue of ownership and operating responsibility.
Although the Commission's "Interim Policy" had assumed that three
U.S. earth-stations would suffice for the initial global system, this assumption soon proved unwarranted. Thus, in December 1966, there were pending before the Commission various competing applications for additional
earth stations, in connection with which some 45 pleadings and comments
had been filed; and the end was not yet in sight. 2 These pleadings included an application of Comsat for a new earth station in West Virginia
and a competing application of the international record carriers to construct a similar station in Georgia; applications of Comsat to construct a
second antenna at Andover, Maine, and also to construct a new earth
station in California; and competing applications of I'IT's Puerto Rico
subsidiary and of Comsat to construct an earth station in Puerto Rico. In
addition, there was pending before the Commission an application of certain international carriers seeking authority for a cable between Florida
and the Virgin Islands.
In the fall of 1966 the Commission had urged the various parties in
interest to seek a basis for compromise, even on an interim basis, so that
earth-station capacity could be provided in time to meet expanding global
demand for which satellites would be available-a result which clearly
could not be accomplished if administrative proceedings on applications
pending before the Commission took their usual tedious and time-consuming course.
Although the compromise discussions were not successful, they were
useful in narrowing the issues and suggesting the outlines of a Commisdirection and control of the interim earth-station licensee, would be defined to include terrestrial facilities between the earth station and the "gateway" centers where international
traffic is normally processed for overseas handling, as well as associated multiplex and
demodulation equipment at those centers. In reversing the latter determination in February,
1966, the Commission held that the "point of interface" between the earth-station licensee
and its customers should be at the earth station itself. In its initial decision as to the location
of the "point of interface" the Commission had regarded the need to assure that all "authorized users" have "equitable access to the system" as a significant public interest consideration
prompting its conclusion. In reversing this decision the Commission stated that it would assure
such access through exercise of its statutory authority. However, it is difficult to believe that
this modified decision, particularly when coupled with the Commission's later determination
with respect to "authorized users", does not in fact considerably curtail Comsat's potential
provision of satellite service directly to non-carriers.
42. See F.C.C. Second Report and Order: Amendment of Part 25 of the Commission's
Rules and Regulations with respect to Ownership and Operation of Initial Earth Stations in
the United States, 5 F.C.C.2d 812 (1966).
19671
SATELLITE COMMUNICATION
sion decision of possible acceptability to the various parties. Such a decision was announced by the Commisson on December 7, 1966. It took two
forms: First, a further revision of the Commission's previous interim
earth-station policy; 43 and second, a grant, under certain conditions, of
the Florida-Virgin Islands cable application 4 Under its revised earthstation policy, subject to further review by the Commission in late 1969,
Comsat was to be a 50% owner of each station, including the three
existing stations as well as those planned for the southeastern and southwestern parts of the United States and for Puerto Rico. The remaining
50% would be distributed among the international carriers in proportion to their expected use of each station. Because of anticipated
differences in the extent of use by the various carriers of the stations located in different areas, one set of ownership quotas was provided for the
United States mainland stations, one for the Hawaiian station, and one
for the Caribbean station. The decision also provided that Comsat should
serve as manager of all stations, subject to over-all control and guidance
on basic policy and investment matters by a committee representing the
joint earth-station owners.
The Commission recognized that, although a new submarine cable to
the Caribbean area, coupled with the satellite capability to be provided
by the proposed Puerto Rican earth station, might well result in some
initial excess capacity, the tremendous increase foreseen in the international communications needs of the Caribbean area would make both
cable and earth-station economically viable. Furthermore, the Commission concluded that the availability of both cable and satellite facilities
would provide reliability of service in the event of abrupt failure or interruption in the several hundred essential circuits which each facility could
provide. In recognition of the validity of the concern which had been expressed by Comsat that, if the cable-owning carriers had complete freedom of choice, they could make greater use of the cable than of the satellite, the Commission's grant of authority to construct the cable was conditioned on an equitable utilization by the carriers of both satellite and
cable facilities. The Commission's decision directed that Comsat and the
carriers implement its decision promptly by mutual agreement, and file
appropriate applications relating to the various stations.
Despite initial significant differences and many difficult problems, an
43. F.C.C. Second Report and Order, supra note 42.
44. Application of ITT Cable & Radio, Inc.-Puerto Rico; Applications of American
Telephone & Telegraph Co., ITT Communications, Inc.-Virgin Islands, Transoceanic Communications, Inc., and Western Union International, Inc.; and Application of Communications
Satellite Corporation, 5 F.C.C.2d 823 (1966).
28
THE AMERICAN UNIVERSITY LAW REVIEW
[Vol. 17
agreement implementing the Commission's decision, signed by all parties
in interest, was submitted to the Commission on March 24, 1967. Thereafter, in conformity with the agreement, joint applications have been filed
with the Commission by Comsat and the appropriate United States international carriers relating to the sharing of interim ownership in the three
existing earth stations, and for authority to construct and own jointly
on an interim basis stations at designated mutually acceptable sites in
West Virginia and in Puerto Rico. 46
As previously indicated, a second major domestic controversy has involved the identity of Comsat's customers, or the "authorized user" issue.
The earth-station issue arose because Congress expressly delegated to
the Commission the resolution, on an ad hoc basis, of a problem which, at
least within the time frame of necessary legislative action, was too difficult
for Congress to deal with. The "authorized user" issue, on the other hand,
was a matter of statutory interpretation, involving two questions, stemming from ambiguous provisions of the Satellite Act: (1) Did Congress
contemplate that Comsat would have any customers other than communications common carriers? (2) If so, 6what criteria were to be used in iden4
tifying such non-carrier customers?
45. The applications relating to the sharing of interim ownership in the three earth stations
were granted on June 19, 1967, 8 F.C.C.2d 491 (1967) ; the application relating to the West
Virginia station was granted on June 2, 1967 (Id. at 406), with a minor modification of the
Commission's order on June 19, 1967 (Id. at 501). The application relating to the Puerto
Rico station was granted on July 20, 1967 (Id. at 1001). The Commission on June 19, 1967,
also granted a joint application of Comsat and the appropriate other United States carriers
for authority to construct an earth station on the central coastal plain of California (Id. at
497). Furthermore, on July 26, 1967, the Chief of the Common Carrier Bureau of the Commission granted a joint application of Comsat and the appropriate other United States carriers
for authotity to construct an additional large antenna system at the Hawaiian earth station.
46. The ambiguous statutory provisions are found in §§ 102(c), 201(c) (2), 305(a) (2) and
305(b) (4) of the Satellite Act. In the Declaration of Policy and Purpose, Section 102(c)
states it to be the intent of Congress that "all authorized users shall have nondiscriminatory
access to the system;" the Federal Communications Commission is directed in Section
201(c) (2) to "insure that all present and future authorized carriers shall have nondiscriminatory use of, and equitable access to, the communications satellite system and satellite terminal
stations under just and reasonable charges . . . and regulate the manner in which available
facilities of the system and stations are allocated among such users thereof;" Section 305 (a) (2)
provides that the corporation is authorized to "furnish, for hire, channels of communication
to United States communications common carriers and to other authorized entities, foreign
and domestic;" and Section 305(b) (4) provides that the authorized activities of the corporation shall include "to contract with authorized users, including the United States Government, for the services of the communications satellite system." (Emphasis supplied.) 47
U.S.C. §§ 701(c); 721(c) (2); 735(a) (2); and 735(b) (4) (1964). "Authorized carriers",
referred to in Section 201(c) (2), are defined in Section 103(7), 47 U.S.C. § 702(7) (1964), as
communications common carriers which have been authorized by the Commission under the
Communications Act to provide services by means of communications satellites. However,
neither the term "authorized user" nor the term "authorized entity" is defined in the Satellite
Act, nor is the use of the different terms, "channels of communication" in Section 305(a) (2)
and "service of the communications satellite system" in Section 305(b)(4), explained in
the Satellite Act or in its legislative history.
SATELLITE COMMUNICATION
Commission consideration of these questions was precipitated by re-
quests made to the Commission by various non-carrier concerns early in
1965 as to the procedures which they should follow in obtaining satellite
tele-communications services directly from Comsat. Accordingly, in June
1965, the Commission initiated a proceeding in which it invited comments
from all interested parties on the issues presented by these requests.47 As
was to be anticipated, the comments of the twenty-eight parties who responded covered the full gamut of contradictory views:
1. The carriers were of one voice that, with the possible exception of
the Government, they alone could deal with Comsat.
2.
The television networks, the press services, and a number of large
industrial users were equally vigorous in their view that they were
included among those to whom Comsat should be authorized to
furnish service.
3. The Administrator of General Services, representing the U.S. Government as the largest single leased-line customer of the interna-
tional carriers, stressed the Government's statutory right of direct
access to Comsat, without any restriction or limitation.
4. Comsat itself concurred squarely with the Administrator of General Services that, as a matter of law, the Satellite Act requires that
it be permitted to serve the Government directly, to the extent that
the Government so desires. As to non-governmental users, Comsat
took an intermediate position. It affirmed the power of the Commission to authorize Comsat to provide direct service to non-carrier
users, but recognized that as a general policy the carriers should
have the first opportunity to provide satellite service to non-governmental users. However, Comsat stated that this policy should be
consistent with its primary mission to develop to the maximum the
potential of global satellite communication. Accordingly, Comsat
47. Notice of Inquiry Regarding Telecommunication Services, 30 F.R. 8018 (1965). Issues
on which comments were requested by the Commission, "in the light of the pertinent provisions of the Communications Satellite Act and its legislative history," were:
(a) The extent to which, as a matter of law, persons and entities in the United States,
other than communications common carriers, can be authorized to obtain telecommunications channels or services directly from the Corporation ...
(b) The extent to which, as a matter of policy, such persons or entities should be
authorized to obtain channels or services directly from the Corporation;
(c) The nature and scope of services that can and should be furnished and the types of
persons or entities who can and should be deemed eligible to obtain such services;
(d) The nature and extent of the authorization required in order for any such person or
entity to obtain channels or services directly from the Corporation;
(e) The policies and procedures which the Commission should establish to govern the
issuance of any such authorizations and the showing to be made in support thereof,
with due regard for the operational, economic and other public interest considerations
involved.
THE AMERICAN UNIVERSITY LAW REVIEW
[Vol. 17
should be permitted to serve non-governmental users directly in
three types of situations:
First, where a carrier fails to provide a requested satellite service, notwithstanding the availability of satellite capacity;
Second, where the provision of satellite service directly would
develop or expand the utilization of satellite technology; and
Third, in other cases where the Commission finds that the "public
interest" would be served by such direct service.
Apart from the niceties of statutory construction, it is quite possible
that for the Commission to have acceded to the view that Comsat could
lease satellite circuits freely to non-carriers on terms comparable to those
on which circuits would be leased to the carriers would have done violence
to significant comments made in the course of Congressional consideration
of the Satellite Act, which indicated that Comsat's role would be "mainly"
that of a "carrier's carrier."48 On the other hand, it is evident that for
the Commission to have concluded that Comsat's sole customers, with the
possible exception of the Government, were to be carriers, would not have
been warranted by the Satellite Act or its legislative history" and could
substantially thwart Comsat's aggressive exploitation of satellite technology. This was because the carriers had substantial investments in
other types of competing communication facilities, whose obsolescence
might well be accelerated by too rapid an expansion of satellite utilization.
In July of 1966, the Commission resolved these conflicting views by
adopting a Statement of Policy, in which it held that the Commission had
legal power to grant Comsat authority to serve non-governmental users
directly, but that it would grant such authority only in "unique and exceptional" circumstances.50 It appears, however, from the Commission's
Statement that situations falling within the two specific areas of direct
48. In a speech made on the floor of the Senate immediately prior to the passage of the
Satellite Act, Senator John 0. Pastore, floor manager of the bill, stated that "the satellite
corporation under H.R. 11040 will serve mainly the carriers." (Emphasis supplied.) 108 Cong.
Rec. 16920 (1962).
49. In submitting to Congress the administration's bill which became the Satellite Act,
President Kennedy's letter of transmittal referred to the fact that the bill stated that tile
powers of the new corporation would "include furnishing for hire channels of communication
to authorized users, including the United States Government." And the Report of the Senate
Commerce Committee on the bill, after referring to the fact that the corporation would
furnish for hire channels of communication to United States common carriers who, in turn,
would use such channels in furnishing common carriers communications services to the public,
stated: "Provision is also made whereby the corporation may furnish such channels for hire
to other authorized entities, foreign and domestic." Report of Senate Comm. on Commerce,
S. Rep. No. 1584, 87th Cong., 2d Sess. 10-11 (1962).
50. Memorandum Opinion and Statement of Policy: Authorized Entities and Authorized
Users under the Communications Satellite Act of 1962, 4 F.C.C.2d 421 (1966).
1967]
SATELLITE COMMUNICATION
service proposed by Comsat would be deemed to meet the Commission's
testr 1
In the case of service to the Government, the Commission flatly rejected the position of Comsat and the Administrator of General Services
that Comsat should be permitted to serve the Government directly to the
extent that the Government desires. Applying a somewhat different criterion, it held that Comsat could provide service directly to the Government when required to meet unique governmental needs or otherwise
required in the national interest, but only where the Government's needs
could not effectively be met by a conventional carrier, and that in each
case such a showng by Comsat was requisite. Furthermore, the Commission, rather than the Executive Department, should make the determination. 2 Accordingly, both Comsat and the Administrator requested reconsideration of this portion of the Commission's decision.
In response to these petitions the Commission on February 1st of this
year modified in part its earlier position. By a tortured interpretation of
the Satellite Act, the Commission continued to regard Comsat's authority
to provide service directly to the Government as dependent on the existence of unique national interest requirements; but it indicated that it
would look to the Director of Telecommunications Management as the
"focal point for the judgment of the Executive agencies as to the national
interest.""
Simultaneously with its February 1st decision, the Commission granted
51. Id. at 435.
52. Id. at 436. In an earlier action, in which it authorized Comsat to meet the needs of
NASA in connection with the Apollo program, the Commission made no reference to any
such doctrine. The Commission's reference in its "authorized user" opinion to this prior action
as constituting a prior adoption of the doctrine set forth in the opinion, must be regarded
as a rationalization of such prior action. See 4 F.C.C.2d at 421, 431.
53. In the Matter of Authorized Entities and Authorized Users under the Communications
Satellite Act of 1962, 6 F.C.C.2d 593 (1967). In its initial "authorized user" opinion of July
20, 1966, the Commission to -a large extent based its restricted view as to authority of Comsat
to provide service directly to the government on section 201 (a) (6) of the Satellite Act. That
section empowers the President to take "all necessary steps to assure the availability of
the communications satellite system for general governmental purposes except where a separate
communications satellite system is required to meet unique governmental needs, or is otherwise required in the national interest", 47 U.S.C. § 721(a) (6) (1964). The Commission points
out that the President, although directed to take steps to insure utilization of the commercial
satellite system for general governmenal purposes, may depart from this policy and utilize a
separate system in order to meet unique governmental needs or otherwise to meet national
interest requirements. From this it concludes that the utilization of the commercial system,
as directed by the Act, otherwise than through the conventional common carriers, can
properly be made only where unique governmental needs or national interest so requires. To
the author this is a complete non sequitur. The criteria specified in section 201(a) (6) were
designed only to indicate the circumstances under which the government should utilize facilities
other than those of the commercial system. They clearly were not designed to restrict the
manner of access of the government to the commercial system.
THE AMERICAN UNIVERSITY LAW REVIEW
[Vol. 17
to Comsat authority to provide the Defense Communications Agency
(DCA) with ten urgently needed satellite circuits between Hawaii and
each of Japan, Thailand and the Philippines, which DCA had awarded to
Comsat in July, 1966.11 However, the Commission's opinion stated that
the Director of Telecommunications Management had advised the Commission that upon the establishment by certain of the conventional carriers
of composite cable and satellite rates in the Pacific which could afford
substantial savings to the Government on a global basis, DCA would, as
permitted by the terms of its contract with Comsat, request the assignment
of that contract to those carriers. Accordingly, the authorization granted
by the Commission to Comsat to provide service directly to DCA was
only temporary, pending the making of such a request by DCA.
To the extent that Comsat is permitted to offer satellite service directly
to the Government at a rate which is substantially below the cable rate
for comparable service, it is clear that the Commission's "authorized
user" decision provides the Government with a powerful lever for bringing about a reduction in its communications costs, through a reduced
composite rate applicable to both cable and satellite service. However,
the full significance of the decision, from Comsat's standpoint, will depend
upon the extent to which the Government, acting through the Director
of Telecommunications Management, finds that the satellite circuits are
needed to meet a "national interest" requirement. 5
DOMESTIC SATELLITE COMMnvUNICATION
In addition to the legal ferment wrought by the satellite in the realm
of international communication, its contemplated use in domestic communication has caused problems that require consideration.
Relevant in this consideration are three elements:
54. Memorandum Opinion, Order and Certificate: Applications of ITT World Communica-
tions, Inc. et al., and Application of Communications Satellite Corporation, 6 F.C.C.2d 511
(1967).
55. Delays have been encountered in implementing the condition imposed by the Commission, since under the terms of the "assignment" clause in its contract with the Defense
Communications Agency (DCA), an assignment by Comsat to another carrier of its rights
under that contract was subject to the concurrence of the foreign communications entity with
which Comsat had made the necessary arrangements for service to a particular country.
When Comsat was requested by DCA to carry forward assignment arrangements which would
result in each of the four interested international carriers furnishing a portion of each country's ten circuits, the Japanese communications entity announced that it would not deal with
one of the carriers (Western Union International, Inc.) and the Post and Telegraph Department of Thailand announced that it would deal with only one of them (RCA Communications,
Inc.). See Report of Comm. on Government Uses of Satellite Communication, H.R. Rep. No.
613, 90th Cong., 1st Sess. (1967). DCA subsequently announced a re-allocation of circuits
among the four carriers, designed to meet these views of the foreign entities involved. See 33
Telecommunications Reports 5 (September 11, 1967).
1967]
SATELLITE COMMUNICATION
1. For technical reasons, the "broadcasting" of national network television programs cannot now be effected directly over long distances,
but must be transmitted from the originating station to local broadcasting stations by means of interconnecting facilities, consisting of
terrestrial micro-wave links or co-axial cables, at an annual transmission cost of about $65 million, paid primarily to the Bell System.
2. There is a tremendous interest in the development of non-commercial television, both for home-viewing, or so-called "public television", and for instructional purposes in schools and universities
(so-called "educational television").
3. The development of non-commercial television, which has had
substantial support from non-profit sources, including the Ford
Foundation, has been hampered by inadequate funds to meet programming costs and the costs of transmission or "interconnection."
Against this background, it is recognized that use of the satellite can
result in substantial savings in cost, over exclusively terrestrial means, in
the provision of domestic long-distance telecommunications services, including both voice and television transmission, and a variety of broadband commercial uses. How can these services best be rendered? Shall
there be a single domestic system, available for many uses? Or shall particular services have their separate systems? And shall savings from
satellite use be spread among all users, or shall there be a diversion of at
least a portion of such savings for the benefit of public and educational
television?
Before we consider some of the issues involved in these questions,
let us put in focus the hearings just concluded before the Communications
Subcommittee of the Senate Commerce Committee, which have been
concerned with the proposed Public Television Act of 1967.56 Similar
57
bills have been introduced in the House of Representatives.
The proposed Act is part of a broad program of measures relating to
health and education laid before the Congress by President Johnson on
February 28th. 8 It would substantially increase the amount of federal
funds authorized to be appropriated for the coming fiscal year, for the
purpose of providing grants to aid in the construction of non-commercial
broadcasting facilities, and, unlike existing legislation, would extend such
aid to radio as well as television. It would also authorize a study by the
56. Hearings on S. 1160 Before the Subcomm. on Communications of Senate Comm. on
Commerce, 90th Cong., 1st Sess. (1967).
57. Hearings on H.R. 6736, HS. 4140, S. 1160 and Similar Bills Before House Comm. on
Interstate and Foreign Commerce, 90th Cong., 1st Sess. (1967).
58. 113 Cong. Rec. 1833 (1967).
THE AMERICAN UNIVERSITY LAW REVIEW
[Vol. 17
Secretary of Health, Education and Welfare of the possibilities and limitations of instructional television, as a basis for determining whether and
to what extent federal aid should be provided for that purpose.
Finally, the Act would establish a non-profit corporation, the Corporation for Public Television, whose directors, subject to Senate confirmation,
would be appointed by the President, to encourage the development of noncommercial broadcasting, and would authorize the appropriation for use
by the corporation of $9,000,000 for the coming fiscal year. The corporation, with these funds, as well as private contributions, would assist, by
grant or otherwise, in developing programs of high quality for national,
regional or local use by non-commercial stations. It would assist noncommercial stations in local programming and would develop a library
of broadcast material, available for the use of non-commercial stations.
It would be prohibited from owning or operating any station or network,
or any interconnection or program production facility, but it would seek
to assist in developing an adequate nation-wide system of interconnection
facilities for non-commercial programs.
The Act was undoubtedly stimulated by the Report, released in
January, 1967, of a group of fifteen distinguished citizens, functioning
under a grant of the Carnegie Foundation and headed by Dr. James R.
Killian, Jr., Chairman of the Massachusetts Institute of Technology,
which had been appointed by the Foundation to study the problems confronting educational television and to make recommendations as to its
future development and sponsorship. 9 The Report recommended the establishment by Congress of a non-profit corporation having functions
quite similar to those of the corporation subsequently envisaged by the
Act. Such a corporation would, however, have differed in certain respects
from the corporation provided for by the Act. Among other things, it
would have been financed on a permanent basis through an excise tax on
television sets, which would pass directly to a trust fund for its exclusive
use; and instead of having all its directors appointed by the President,
half of them would have been appointed by the President and the others
by the directors themselves. Both the Report and the Act look toward
the encouragement of non-commercial television through free communication service or preferential rates.
In the Senate Committee hearings there has developed general endorsement of the legislation.6" What is significant, from Comsat's standpoint,
59. Public Television-A Program for Action: The Report and Recommendations of the
Carnegie Commission on Educational Television (1967).
60. The bill, with its title changed to the "Public Broadcasting Act of 1967," was passed
by the Senate on May 17, 1967, with certain modifications developed by its Committee on
1967]
SATELLITE COMMUNICATION
is that, although both the Carnegie Commission Report and the proposed
legislation recognize the potentially important role of the satellite in
television transmission, neither the Report nor the Act seeks to deal
with the matter of ownership or operation of satellite facilities for
domestic service. These matters are involved in proceedings now pending
before the Federal Communications Commission.
The Commission proceeding is in the nature of a general inquiry,
initiated in March, 1966, for the purpose of determining Commission
policy on a variety of issues relating to the utilization of satellites for
domestic telecommunication service. 61
Commerce as the result of hearings held by the Communications Subcommittee of that Committee, chaired by Senator John 0. Pastore, and with a floor amendment requiring that
three members of the corporation's board of directors be associated with the operation of
noncommercial radio and television stations. 113 Cong. Rec. 7013-7037 (1967). The principal
modifications (a) broadened the scope of the bill to include radio as well as television, (b)
changed the method of selection of the fifteen directors of the new corporation so that,
instead of the appointment of all of them by the President with Senate consent, only nine
would be so appointed and these nine would select the remaining six, (c) broadened the new
corporation's authority in arranging for interconnection facilities, so that it was not limited
to making such arrangements only with "public or non-profit private agencies, organizations,
or institutions," as proposed in the administration's bill, and (d) made it clear that the new
corporation's assistance could be directed to the establishment of more than one system of
interconnection for the distribution of educational television or radio programs. See Hearings
on S. 1160 Before Subcomm. on Communication of Senate Comm. on Commerce, supra note
56; and Report of Senate Comm. on Commerce on the Public Broadcasting Act of 1967, S.
Rep. No. 222, 90th Cong., 1st Sess. (1967).
The bill, as passed by the Senate, encountered some vigorous opposition in hearings before
the House Committee on Interstate and Foreign Commerce and on the floor of the House,
particularly in its proposed establishment of the Corporation for Public Broadcasting. See
Hearings Before House Comm. on Interstate and Foreign Commerce, supra note 57; and
Report of House Comm. on Interstate and Foreign Commerce on Public Broadcasting Act
of 1967, H.R. No. 572, 90th Cong., 1st Sess. (1967). See also 113 Cong. Rec. 12267-12310
(daily ed. Sept. 21, 1967). The House followed the views of its Commerce Committee in
passing a bill which departed from the Senate bill by (a) making it ciear that the method of
financing the new corporation after its first year would be subject to re-consideration by
Congress, (b) providing for the Presidential appointment of all directors, with a prohibition
against more than eight directors being members of the same political party, and (c) restoring
a restriction, contained in the original administration bill, so that arrangements made by
the corporation for interconnection facilities could be made only "with public or non-profit
private agencies, organizations, or institutions," and hence would not include arrangements
with the common carriers. The House also added prohibitions against "editorializing" by any
noncommercial educational broadcasting station and against action by any such station
supporting or opposing any candidate for political office. See Report of House Comm. on
Interstate and Foreign Commerce, supra. Consideration in conference of the differences between the Senate and House resulted in the acceptance of the above-mentioned House modifications, except that there was eliminated the restriction which would have precluded the Corporation from arranging with the common carriers for interconnection facilities. Conference
Report on Public Broadcasting Act of 1967, H. Rep. No. 794, 90th Cong. 1st Sess. (1967).
The bill, in the form recommended by the conferees, was passed by the House on October 19,
1967 and by the Senate on October 26, 1967, and was approved by the President on November
7, 1967. 113 Cong. Rec. H 13684-6 and S 15413; and 3 Weekly Compilation of Presidential
Documents 1530.
61. Notice of Inquiry: Establishment of Domestic Noncommon Carrier Communication
36
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[Vol. 17
In August of 1966 the Ford Foundation, with widespread publicity,
filed with the Commission the outlines of a program of major significance.
The program, to be sponsored but not permanently supported by the
Foundation, had as its stated objective the utilization, for the benefit of
non-commercial television, of a major portion of the projected saving
in transmission cost which would be afforded by a satellite system used
only for domestic television and radio service. Under the Foundation's
proposal, a new non-profit corporation would be the owner of such a
system. The Foundation urged that such a corporation could provide
major reductions to the commercial networks in present terrestrial transmission costs and could at the same time create a substantial surplus to
be contributed, directly or through other entities, to the furtherance of
programs for non-commercial and instructional television. It was recognized that the transmission saving, variously estimated between 20 and
40 million dollars, would meet but a small portion of an anticipated 200
million dollar annual requirement for the programming and transmission
of non-commercial television.
The Ford Foundation's -proposal, as well as certain issues raised
previously in the "domestic-satellite" proceeding, caused the Commission,
in October of 1966, to considerably broaden the scope of its inquiry to
include additional legal, economic and technical questions. 2 Final comSatellite Facilities by Nongovernmental Entities, 2 F.C.C.2d 668 (1966). In its Notice of
Inquiry the Commission referred to the fact that it had before it an application filed by
American Broadcasting Co., Inc. (ABC) for the establishment of a domestic TV program
distribution system using a synchronous satellite, under which programs would be transmitted
from earth stations located in New York City and Los Angeles to ABC owned and affiliated
stations throughout the United States, including Hawaii and Alaska, and Puerto Rico and
the Virgin Islands. It stated that the ABC application was being returned to ABC, without
prejudice, for failure to comply with certain procedural requirements of the Commission.
However, the Commission stated that since proposals for the construction and operation of
communication satellite facilities by entities for the purpose of meeting their private or
specialized domestic communications requirements presented significant questions from the
standpoint of technical and economic feasibility and also from the standpoint of compatibility
with the purposes, policies and objectives of the Satellite Act, it was initiating an inquiry in
which the comments of interested parties were invited on those questions. Specific questions
stated by the Commission as calling for comment included:
(a) Whether, as a matter of law, the Commission may authorize nongovernmental
entities (other than communications common carriers) to construct and operate communications satellite facilities for the purpose of meeting their private or specialized domestic
communications requirements;
(b) The effect or impact of any such authorizations upon the policies and goals
set forth in the Satellite Act and upon the obligations of the United States Government
under the Interim Agreement;
(c) Whether the granting of such authorizations, as a matter of policy, would be
in the public interest, considering various specified technical and economic factors; and
(d) Whether such noncommon carrier space service would be technically feasible.
62. Supplemental Notice of Inquiry: Establishment of Domestic Communication-Satellite
Facilities by Nongovernmental Entities, 5 F.C.C.2d 354 (1966).
1967]
SATELLITE COMMUNICATION
ments were not filed until early April 1967, after there had been an
opportunity to study the Report of the Carnegie Commission.
The most fundamental legal question in the proceeding is whether
the Commission's general authority under the earlier Communications
Act to grant radio licenses, to common carriers or others, for the use of
specific bands in the electro-magnetic spectrum, extended to satellite and
related earth-station use, and, if so, whether the Satellite Act imposes
any restrictions on such previously existing authority. But the Commission's inquiry also extends to many other matters, including the plans of
the carriers or others to meet domestic needs through the use of satellite
facilities.6"
The comments filed with the Commission have been as diverse as the
interests of those who filed them. To Comsat and certain other carriers,
the Satellite Act, in the absence of further action by the Congress, contemplates that only Comsat is qualified to own and operate satellites for
communication purposes, with Comsat and the carriers being equally
eligible for earth-station ownership. In the view of certain other carriers,
including AT&T, the Commission has a broad licensing authority, but
should give preference to the common carriers in the establishment of a
single multi-service domestic satellite system, with Comsat having responsibility for the satellites. The broadcasters are in favor of a domestic satellite system dedicated to television and radio, in which Comsat and the
other carriers would have little or no participation. The Ford Foundation,
as previously indicated, favors a separate satellite system owned by a
unique non-profit corporation, and questions whether Comsat's statutory
mission permits it to function beyond the international field. On the
other hand, various questions have also been raised concerning the legality
of the Ford Foundation proposal, absent Congressional action.
Whatever the answers to the legal aspects of these issues, they of
course represent no more than interpretations of existing law; and it
is quite possible that Congress, although giving due consideration to the
Commission's interpretation of present law will be equally interested in
any policy recommendations of the Commission that might call for
legislative action. Among the policy matters which we may expect the
Commission, and possibly the Congress, to consider are the following:
1. Are there, as urged by Comsat and AT&T, substantial overall
63. Other questions raised by the Supplemental Notice of Inquiry were: Assuming the
requisite legal authority, under what circumstances should the Commission grant authorizations to communications common carriers to provide domestic satellite service; and whether
the type of entity and service contemplated by the Ford Foundation proposal may be licensed
under present statutes, and, if not, the type of legislation that would be required.
THE AMERICAN UNIVERSITY LAW REVIEW
[Vol. 17
economic savings in a single, multi-service approach to the provision
of satellite service for all domestic purposes, including television,
voice, data and other needs, as against separate satellite systems
for special purposes?
2. Apart from economic considerations, do technical considerations,
namely, the need for conservation of the use of the frequency
spectrum as well as the need to prevent interference between satellite electronic signals and the network of terrestrial signals, dictate
a single satellite system providing a variety of services, with fewer
satellites and fewer earth stations?
3. Would the establishment initially of a satellite service dedicated
solely to television and radio delay the use and development of
satellite service for other communications purposes?
4. Will integration of domestic and international service be furthered
by a multi-service operation, in which a single United States entity
is responsible for all satellite operations? Or do considerations of
public policy dictate otherwise?
5. Granted that it is in the public interest to provide a subsidy for
non-commercial television, should that subsidy be provided through
Government grant, through a special tax, through preferential
-rates, or through some combination of these, rather than by fractionating the structure -of. the nation's satellite communication
system and establishing, free from federal tax, a de facto monopoly
of television network transmission?
We can expect extended debate on these and other matters in the
months ahead. 64 Meanwhile, taking its cue from a direction in the Presi64. It is anticipated that these subjects and others of equal importance involving longrange questions of national communications policy will be considered by a Task Force of
distinguished government officials appointed by President Johnson on August 14, 1967, to
make a comprehensive study of communications policy, in connection with the transmission
to the Congress on that date of a "Message on Communications Policy". 113 Cong. Rec.
10435, 10438 (daily ed. Aug. 14, 1967). The members of the Task Force are: Chairman:
Eugene V. Rostow, Under Secretary of State for Political Affairs; Vice Chairman: James D.
O'Connell, Director of Telecommunications Management; James Reynolds, Under Secretary
of Labor; Charles Schultze, Director, Bureau of the Budget; Gardner Ackley, Chairman,
Council of Economic Advisors; Leonard Marks, Director, United States Information Agency;
James E. Webb, Administrator, National Aeronautics and Space Administration; Donald
Hornig, Director, Office of Science and Technology; Anthony M. Solomon, Assistant Secretary
of State for Economic Affairs; Solis Horwitz, Assistant Secretary of Defense; Donald F.
Turner, Assistant Attorney General, Antitrust Division; Donald Agger, Assistant Secretary of
Transportation; J. Herbert Holloman, Under Secretary of Commerce (Acting); Dean W.
Coston, Deputy Under Secretary of Health, Education and Welfare; and Edward C. Welsh,
Executive Secretary, National Aeronautics and Space Council. Mr. Rosel Hyde, as Chairman
of the Federal Communications Commission, was named an ex officio member of the Task
Force.
The "major questions" which the Message directed the Task Force to examine were:
1967]
SATELLITE COMMUNICATION
dent's message that a program of experimentation should be conducted
in non-commercial broadcasting, utilizing satellite capabilities, Comsat
has recently proposed to the Commission a pilot demonstration program.
Under such a program, Comsat would acquire the specific sites and
necessary equipment, as trustee for the party or parties ultimately chosen
to own and operate long-term domestic facilities. The initial objective
of the program would be to make non-commercial television and general
communications service by satellite available throughout the Pacific and
Rocky Mountain time zones, with direct access from New York.
The proposed program, which would be undertaken with Commission
approval and in collaboration with others in interest, would be carried
out on a basis which would not prejudice any ultimate decisions as to
responsibility for satellite service. It would provide experience and an
opportunity for experimentation in the use of satellite communication in
the field of non-commercial broadcasting, and would also provide a demonstration model in other types of domestic communication service. Commercial television and general communications service, when shown to be
feasible, could be accommodated at commercial rates. However, sufficient
satellite capacity would be available so that there would be one channel
'in each of the two time zones for non-commercial television, to be provided
at no charge, as present powers of the Commission or future legislation
may permit. Furthermore, the facilities would be so designed that they
could ultimately be absorbed in a long-term communications complex. 65
"Are we making the best use of the electro-magnetic frequency spectrum?
"How soon will a domestic satellite system be economically feasible?
"Should a domestic satellite system be general purpose or specialized, and should
there be more than one system?
"How will these and other developments affect COMSAT and the international
communication carriers?"
The Message also called on the Task Force, in examining "our entire international communications posture," to investigate "whether the present division of ownership in our international
communications facilities best serves our needs, as well as which technology can meet new
communication requirements in the most effective and efficient manner."
The Message affirmed the concept of a global system of communications satellites, available to all nations on a nondiscriminatory basis, urged continuation of the ownership of
such a system by an INTELSAT-type consortium, and stated that no action should be
taken in the establishment of the space segment of a domestic or regional satellite system
which is incompatible with the economic or technical support of a global system.
65. A letter containing a request of the Commission for elaboration of Comsat's "pilot
program" proposal, particularly as to certain specified technical and financial aspects, was
the subject of a detailed response by Comsat on July 26, 1967. All interested parties were
afforded an opportunity by the Commission to comment on this further Comsat filing. The
comments which were submitted expressed widely differing views. The communications
common carriers generally favored the program. Certain carriers continued to urge carrier
ownership of the earth stations in the "pilot" phase, while others were content with an assurance of a reservation for future determination of the earth-station ownership issue and a
preservation of the principles of the Commission's "authorized-user" decision. The broad-
THE AMERICAN UNIVERSITY LAW REVIEW
CONCLUSION
In conclusion, we see that in five short years the communications
satellite has come of age. We are now assured of the quality and reliability of its technical performance and of its ability to meet a host of
new communications needs. There is no doubt that it can tremendously
reduce the cost of long-distance communication, and permit direct access
between areas of the globe which heretofore had been narrowly restricted
by established land or cable routes.
It can help to unify countries which because of geographic barriers or
great distances have lacked effective internal means of communication.
In our own country it can and will provide tremendous impetus to new
avenues of commercial communication and to the advancement of education, in home and school.
The problems of the satellite are essentially not celestial but terrestrial.
The finding of the answers to these problems is a task that will call for
the best efforts of men of intelligence and good will throughout the world.
If they are effectively resolved, the communications satellite can well be
the most rewarding use of outer space.
casters and other non-carrier users generally favored some sort of "pilot" or "test" program,
but differed in their views as to the legality or feasibility of the Comsat proposal. The
Ford Foundation opposed any pilot program, on the ground that to carry it forward
would prejudice the issues to be studied by the Task Force on Communications Policy recently appointed by the President, would not provide test results in time to be useful to
the Task Force, and would make "no adequate provision for the dramatic possibilities of
satellite communications in the field of public television, both as a provider of free interconnection and as a source of protected program funds." Comsat promptly made vigorous
response, pointing out that the configuration of the system proposed by the pilot program is,
except for a small ground portion, "equally consistent with an ultimate decision favoring
the dedicated system as with a decision favoring a multi-service system," and urging that
since, in the end, a pilot-scale demonstration is essential, nothing would be gained by postponing for over a year-i.e., until the completion of the Task Force's studies-the planning
and building of the demonstration model. It urged that certain tests proposed by the Foundation are not necessary to establish the technical feasibility of the pilot program.