Page 59 - Communication Commerce and Power The Political Economy of America and the Direct Broadcast Satellite

Telesatel/ite Policy and DBS, 1962-1984 47

controlled by established US-based international common carriers
only- namely, AT&T.
The US Department of Justice (DoJ), while cautious, did not form-
ally oppose this prospective monopoly. In 1961, Lee Loevinger, the
head of the DoJ, recognized that control of Comsat by the common
carriers would, however, generate a 'natural reluctance ... [among the
carriers] to take speedy action which would make ... [their] facilities
obsolete.' Loevinger compared the formation of Comsat to the history
of US road transportation:

Suppose that in the early days in the development of motor
transportation service we had decreed that all motor
transportation should be owned by railroads. I think it is self-
evident that we would not have quite the same system of motor
transportation we ... have today. 29

In response to this general concern - particularly in light of the
potentially revolutionary impact of satellite technologies on the tele-
communications industry - AT&T Vice President James E. Dingman
claimed that the telesatellite would never challenge the predominance
of cable systems. At best, said Dingman, outer space platforms 'will
merely provide the means by which broadband microwave techniques
employed for continental communications can be extended across the
oceans to supplement existing ... facilities . .Jo Nevertheless, given the
American government's general interest in the development of tele-
satellites, the organizational and technical expertise required, the
experience that Comsat's management would need in its dealings
with foreign entities, and the massive overhead costs involved, Ding-
man argued that the new corporation could only succeed if placed
under the control of AT&T. Moreover, if non-carriers (such as aero-
space companies) were allowed to participate, delays and economic
inefficiencies would be inevitable as a result of the imposition of
competing interests. 31
Members of Congress opposing the Satellite Communications Act
argued that Comsat would become the tool of AT&T, enabling the
domestic monopoly to control international telesatellite developments
'to suit its purposes.' 32 As later established in the Act, however, one
half of the new corporation was to be owned by US common carriers
and the other half by the public - although the carriers could purchase
up to 20 per cent of these shares. Six Comsat board members were to
be representatives of FCC recognized carriers, six were to be elected