84. Memorandum From the President’s Special Assistant for
Telecommunications (O’Connell) to President Johnson1
Washington, June 3, 1966.
There has been a unanimous expression of conclusion by the Interim
Committee (the operating management instrument of the International
Telecommunications Satellite Consortium—INTELSAT) that the Federal Communications Commission has
been delaying contracting actions decided upon by the Consortium.
It is a further conclusion of the Interim Committee that the Federal
Communications Commission is seeking to exercise jurisdiction on behalf
of the United States which can override or nullify the decisions of the
international body.
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In two meetings which I have held with the Acting Chairman of the
Commission, Mr. Rosel Hyde, and
with a representative of the State Department, it has been made clear by
Mr. Hyde that, in his opinion,
the Commission does not have jurisdiction of this nature.
I concluded that it was important for this office to make a clear
statement available to the Commission as a whole, and for this purpose
transmitted the attached letter (Enclosure 1) to the Acting Chairman of
the Commission.
The State Department also transmitted a letter to the Commission and a
copy is attached at Enclosure 2.2
Enclosure 3 is a copy of the resolution which was passed unanimously by
the international Interim Committee of INTELSAT on May 27, 1966.
Enclosure 1
Letter From the President’s Special Assistant for
Telecommunications (O’Connell) to the Acting Chairman of the
Federal Communications Commission (Hyde)
Washington, June 1, 1966.
Dear Mr. Hyde:
This is in regard to the application of the Communication Satellite
Corporation (COMSAT) which has
been pending at the Federal Communications Commission since February
25, 1966, and which requests authority to construct six satellites
for the INTELSAT global system.
COMSAT filed a notification
with the FCC on April 27, 1966, of a
proposed contract with TRW, Inc. for the satellites.
As you know, the basic decision to award the construction contract
for the satellites to TRW was made by the INTELSAT Interim Communication
Satellite Committee (ICSC) in
January 1966. At that time the ICSC
directed COMSAT, as the manager
of the INTELSAT system, to
proceed with definitive negotiations with TRW. This basic decision
was made after full consideration of competing proposals submitted
by Hughes Aircraft Company and Radio Corporation of America.
On March 15, 1966, during the negotiations between COMSAT and TRW, Hughes filed two
more proposals for satellites. The ICSC was advised of the additional Hughes’ proposals;
but at its meeting
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on
April 13, 1966, nevertheless, authorized the manager to execute the
proposed contract with TRW. On April 27, 1966, therefore, the
proposed contract was filed with the FCC pursuant to its procurement regulations.
Despite these two decisions by this international body to award the
basic construction contract for the satellites to TRW, its manager,
COMSAT, is unable to go
forward with the program because it has not received the requisite
authority from the Commission.
You are aware, I am sure, that this delay is creating serious
diplomatic repercussions and is raising serious questions concerning
the authority of the FCC to review,
qualify, or annul a valid decision of an international organization
constituted by an international agreement to which the United States
is a signatory. In view of the responsibilities for the satellite
program which have been delegated to me by the President I feel
obligated to make my serious concern known to the Commission.
Basically, I am concerned because if the matter is not soon decided
by the FCC, I believe that United
States interests will be irreparably harmed with serious residual
damage to the United States in the international discussions on the
permanent satellite system and organization when these are held.
In commenting, I am fully aware that the Communications Satellite Act
of 1962 establishes FCC jurisdiction
over COMSAT as a United States
entity. However, the Act does not appear to contemplate the role
which COMSAT must play as the
elected manager of an international partnership, with responsibility
for implementing policy decisions of the designated governing
instrument of the partnership.
It would be most helpful if the Commission could expedite review of
the COMSAT filing. In order to
avoid the possibility of further problems of this nature it would
also be most helpful if the Commission could give favorable
consideration to the adoption of rules and procedures which would
clearly delineate the differences between COMSAT as a domestic corporation and as the manager of
an international consortium and which would prevent possible future
claims that the Commission’s procedures have delayed the progress of
INTELSAT in achieving a
global system.
If the Commission feels that it is not possible or advisable to adopt
such procedures, I would recommend that remedial legislation be
enacted without delay.
Sincerely,
