Page 69 - Communication Commerce and Power The Political Economy of America and the Direct Broadcast Satellite

Telesatellite Policy and DBS, 1962-1984 57

existing 'cable or over-the-air broadcast techniques,' Rostow did not
provide detailed cost figures for these established systems. 71 In addi-
tion to this assumption, Rostow considered DBS to be a threat to the
ability of local broadcasters to expand 'opportunities for local expres-
sion' due to direct broadcasting's 'highly centralized control over
transmission and program origination.' 72 Whereas this latter point
might well have been taken seriously if the US public sector had
ever displayed a serious concern for localism before or after the
report/ the former point is made even more questionable by Ros-
3
tow's recognition that cable companies already received a monthly fee
for cable services from subscribers to pay-down their overhead costs
while no mention is made of a similar option being possible for
prospective DBS operators. 74 One explanation for representing these
assumptions as if they were facts probably involved the affiliations of
Rostow's private sector participants. While representatives from
AT&T and CBS were invited to work with the task force, the Rostow
Report lacked official input from the early leader in DBS develop-
ments - Hughes Aircraft.
Rostow's general support of the US telesatellite status quo was not
favorably received by the succeeding Nixon administration. One
month before the establishment of its Office of Telecommunications
Policy in January 1970, the Nixon White House issued a memor-
andum to the FCC urging the Commission to adopt a more 'open
market' approach. According to this memo, 'any financially qualified
public or private entity ... should be permitted to establish and oper-
ate domestic satellite facilities for its own needs.' 75 Three months
later, Dean Burch, the Nixon-appointed FCC Chairman, initiated
the Commission's so-called Open Skies policy. 76 This involved
Burch's well-known belief that the FCC, despite the Comsat home-
to-overseas monopoly, always had possessed the exclusive authority
to authorize any entity to own and/or operate a domestic telesatellite
system. 77 By 1972, the FCC was evaluating several applications. 78
However, after reviewing these, the Commission ruled that the terms
of its authorization of a telesatellite license should be restricted in
order to avoid 'fragmenting the market ... to such an extent that most
carrier entrants would fail to come even remotely close to covering
costs.' 79 The OTP responded by threatening to seek Congressional
legislation supporting its Open Skies policy while the Department of
Justice also opposed the FCC's position on the stated grounds that
more competition, it was assumed, would encourage technological
innovation. 80