Mother Bell in Orbit

The U.S. Government often uses its vast powers to restrain big companies and give the smaller fellows a lift. But last week, as the federally sponsored Communications Satellite Corp. sold its first 5,000,000 shares (at $20 apiece) to U.S. communications companies, executives of American Telephone & Telegraph Co. were pleasantly surprised by the size of their allotment: 2,895,750 shares. That will give A.T. & T. by far the largest stake--a dominant 29% ownership--in the space company, which will transmit television programs, telephone calls and telegraph messages.

Though A.T. & T.'s $58 million, holding is only two-thirds of what it bid for, the block is big enough to entitle Mother Bell to share a signal honor with the President of the U.S.: each will appoint three members to Comsat's 15-man board. International Telephone & Telegraph, which bought a 10.5% holding, will name one member, while General Telephone (3.5%) and RCA (2.5%), will join, with 159 other smaller communications companies--all of which got all the shares that they asked for--to elect two members.

This week Comsat will offer another 5,000,000 shares, also at $20, to the public. Because of brisk demand, brokers will limit purchases by individual customers to 50 shares or less, and then the shares will be traded on the New York Stock Exchange. The public will elect six directors. But small shareholders seldom take the initiative to put up a slate; the public directors of Comsat Corp. will probably be nominated by the Government-appointed organizers of Comsat. It thus looks as if the commanding voices in the new space communications company will belong to President Johnson and A.T. & T. Chairman Frederick Kappel.

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