84. Memorandum From the President’s Special Assistant for Telecommunications (O’Connell) to President Johnson1

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.

[Page 156]

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.

J.D. O’Connell

Enclosure 1
Letter From the President’s Special Assistant for Telecommunications (O’Connell) to the Acting Chairman of the Federal Communications Commission (Hyde)

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 [Page 157] 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.


J.D. O’Connell
  1. Source: Johnson Library, National Security File, Subject File, Communications (Nat’l Communications System, COMSAT, etc.), Vol. II [2 of 2], Box 6. No classification marking.
  2. Enclosures 2 and 3 are not printed.