Page 61 - Communication Commerce and Power The Political Economy of America and the Direct Broadcast Satellite

Telesatellite Policy and DBS, 1962-1984 49

proficient, conversant and knowledgeable in this particular field
that our objective will be realized by a low-altitude [elliptical]
system . . . . It must be done expeditiously in order for us to win
the race and triumph in this particular field before our adversaries
[based in the USSR] do. 36

As mentioned above, DoJ officials, apparently aware of the support
of both the administration and the FCC for the carrier-dominated
Comsat proposal, also accepted the conditions of Comsat's creation.
Rather than its preliminary support of the aerospace companies'
'right' to own part of Comsat, the DoJ eventually came to support
the vague language of the Communications Satellite Act that appar-
ently gave non-carriers the right to participate. 37 However, four years
later, when the ABC television network applied to the FCC to launch
its own domestic telesatellite, Comsat officials argued that the Com-
38
munications Satellite Act gave their corporation a monopoly over
domestic telesatellite systems. 39 Moreover, claims that the capital
required to develop and launch international telesatellites could only
be generated through the predominance of common carrier invest-
ments became increasingly dubious when public demand for Comsat
stock pushed its initial shares up from $20 to a high of $78 in 1967.
But most importantly, common carrier claims that their expertise and
capital investment would compel the progressive development of tele-
satellite systems made little sense when evaluated in relation to the
carriers' other (and much larger) vested interests. For example,
AT &T's original investment of $58 million in Comsat was not only
insignificant in relation to its terrestrial investments (a single transat-
lantic cable would cost just as much), but the profits from its control
over domestic television transmission services alone totalled $65 mil-
lion in 1966. 40
Fortunately for Comsat and the common carriers, in need of over-
seas entities to communicate with, other advanced industrialized
countries soon became interested in participating in US-initiated tele-
satellite developments. In 1964, Comsat became the American signat-
ory to the International Telecommunications Satellite Organization
(Intelsat) cooperative. While the original Intelsat membership was
dominated by mostly European public sector telecommunication
authorities (the PTTs), 41 the American common carrier-dominated
Comsat was guaranteed no less than 50.6 per cent of voting shares
in the new organization. These shares were to be distributed in accord-
ance with the respective capital investments made by its members.