The Day of the Domsat

When a small, drum-shaped satellite was maneuvered into orbit 22,300 miles above the equator last week, a new era in communications, and communications-industry competition, began. The "bird," called Westar I, is the U.S.'s first commercial domestic satellite,* and the first of two to be launched by Western Union. By late summer, Westar will bounce back to receiving stations on earth such signals as twelve separate color television programs or up to 14, 000 private-line telephone calls--and charge bargain rates for the service.

Western Union's domestic satellite, or "domsat," thus poses a clear threat to the virtual monopoly that American Telephone & Telegraph wields over telecommunications in the U.S.; it offers an alternative to use of A T &T's ground facilities. But the Bell System was ready with a surprising countertmeasure. Last week company officials announced that AT&T would join with General Telephone & Electronics in leasing all the communications systems aboard three other satellites to be sent up in 1975 and 1976. The owner of these satellites is COMSAT General, a wholly-owned domestic subsidiary of COMSAT, the U.S. Government-sponsored (but privately owned) corporation that itself handles only international traffic. The joint venture of A T & T and GTE should end a bitter rivalry in which each company had planned to launch separate satellite systems.

Even so, AT&T will not be fully meeting Western Union's challenge. Under a Federal Communications Commission ruling, both the giant corporation and GTE must wait three years before using satellites for almost any purpose other than conventional long-distance telephone transmission. The FCC's point was to give other companies a chance to establish themselves in the telecommunications field now dominated by A T & T.

Understandably, Western Union is concentrating on areas where it will not get immediate satellite competition from Ma Bell: private business telephone lines, TV and long-distance data transmission. The latter promises to be most important. According to the Electronics Industries Association, beaming business and military data from one facility to another may well become a $5 billion-a-year business by 1980.

RCA also has noticed the opportunity. It has been using Canada's Anik II satellite to provide Alaska with telephone and TV service, and plans to put at least two domsats into orbit to serve the rest of the U.S., starting in 1975. Robert J. Angliss, RCA vice president for services, shrugs off his company's biggest problem: "AT&T hasn't been subjected to a truly competitive environment," he says. "We're used to competition and prepared for it."

Some observers nonetheless believe that there will be too much hardware in the sky (see diagram). Not many more than 22,000 businesses are now in the market for private telephone lines. And the three major commercial television networks have shown little enthusiasm to date for using domestic satellites. Since sports and news events originate in many areas, the networks prefer to rely on existing facilities rather than to build expensive new ones to beam the programs to satellites.

The domsats do promise big savings for business data-transmission and telephone users, though. Messages on terrestrial microwave systems can go only as far as the horizon, where a "repeater" tower jumps them to the next tower. To send a message from coast to coast takes about 100 repeaters, each of which involves heavy capital investment. Similarly costly equipment is needed to transmit messages via long land cables. A domsat replaces repeaters and most other relaying devices. Though each satellite costs about $20 million to launch, operating costs are so low that Western Union and RCA are filing rates from 25% to 50% below prevailing rates.

Ghostly Echo. A private terrestrial link from New York to Los Angeles costs $2,207.25 per month; satellite transmission will do the job for only $1,120. To meet the competition in the heavens, AT&T has already asked the FCC to approve new, mostly lower rates for its service on the ground. The proposed charge for private lines between major metropolitan areas will drop sharply, though costs of private lines to less busy areas would increase.

The rise of domsats will hardly be noticed by the average person. TV reception will not get better or worse, nor will rates for most conventional phone calls change. Even the person talking over a private business line will have only one way of knowing whether his call is going by satellite or a ground facility. Domsat communications sometimes produce a ghostly echo--a real message from outer space.

* Other communications satellites belong to Russia, Canada and an international consortium (INTELSAT) that includes the U.S.'s COMSAT and transmits international signals.

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