Exploring the Unknown - NASA's History Office

EXPLORING THE UNKNOWN 69
opment of this new system is not [2] impeded by a premature decision as to ownership, we
are of the opinion that prudence requires a further investigation of the broadest aspects of
the ownership question. Specifically, we believe that the debate over ownership should be
separated from the developmental question until the entire system becomes fully operational.
During this period development should proceed with all possible speed while careful
study is given to the decision as to the control of these unripened fruits of science.
While we believe that the final question of ownership should not be decided at a time
when we have insufficient knowledge, we wish to make it clear that should private concerns
be authorized to own and operate the system, the government agencies entrusted
with responsibility must, consistent with the antitrust laws, prevent any concern from
attaining a monopolistic, dominant, or preferential advantage. Otherwise the national
interest would be frustrated for generations to come in a historic achievement which,
according to a responsible prediction, may well constitute a multi-billion dollar a year
business in ten to fifteen years.
On July 24 you issued a policy statement that essential conditions to private ownership
of a space satellite communications system are a “structure of ownership and control
which will assure maximum possible competition” and “full compliance with antitrust legislation.”
We are in complete agreement with these conditions and it is for this reason that
we are deeply concerned about orders issued by the Federal Communications
Commission on May 24 and July 25, 1961 which clearly contemplate limiting ownership to
a specified group of so-called “international carriers” which does not even include all
these carriers. These orders are contrary to the policy established by you; they are contrary
to the principles of the antitrust laws.
The FCC orders appear for all practical purposes to determine that the satellite communications
system is to be owned and operated by this group of ten “international carriers.”
This would mean that only four concerns would participate in the system’s
ownership since the other six companies in this group have professed no interest whatsoever
in space communications. More important, it would mean that one of these four
companies, AT&T, would have a dominant and very probably a monopoly position in ownership
of the space communications system. In effect, AT&T would be the chosen instrument
of the United States Government to own and control civilian space communications.
This would be intolerable from the standpoint of the public interest. As the
Department of Justice has stated, “the continuing opportunity (for AT&T) to favor its own
facilities would always be present and would inevitably result in discrimination or suspicion
of discrimination no matter how strict might be the policy of (AT&T) to provide [3]
equal service to its competitors.” Furthermore, “the opportunity to favor the purchase of
equipment produced by (AT&T’s subsidiary, Western Electric Co.) would be irresistible.”
The head of the Justice Department’s Antitrust Division has testified that “the degree of
concentration in this field may very well be one of the reasons why America is not further
advanced in the field today than it is . . . . Our system has not produced as it should, and the
public interest has suffered because there has been undue concentration in this field.”
We believe that to safeguard the public interest it is essential that any plan permitting
private ownership if, indeed, such is preferred to public, of the space satellite system must:
(1) afford all interested United States communications common carriers, domestic
as well as international, opportunity to participate in ownership of the system;
and
(2) afford all interested communications and aerospace manufacturers opportunity
to participate in ownership of the system.
We have seen from past experience how the American Telephone & Telegraph
Company has been able to expand its monopoly position and strengthen its hold on the
American economy by combining, under the aegis of one holding company, its equipment
manufacturing concern, the Western Electric Company, and the operating divisions