Foreign Relations of the United States, 1964–1968, Volume XXXIV, Energy Diplomacy and Global Issues

91. Report Prepared in the Department of State and the Agency for International Development¹

Washington, December 31, 1966.

SUBJECT

• Communications Satellite Earth Station Construction in Less Developed Countries—NSAM 342

Background

On June 30, 1966, the Department of State and the Agency for International Development submitted a report (Annex IV)² pursuant to NSAM 342 which had directed that active steps be taken to encourage construction of earth station links to the worldwide communications satellite system (INTELSAT) in selected less developed countries. In the June report it was concluded that thirteen countries and/or regions should be given priority in any program of assistance by the United States. The list of countries or areas selected for this priority is as follows:

• Central America (one station serving all 6 countries)
• Colombia
• Chile
• Brazil
• Nigeria
• Ethiopia
• Kenya, Tanzania, Uganda (through their East African Common Services Organization (EACSO))
• Turkey
• Pakistan
• India
• Thailand
• Philippines
• Korea³

The following four recommendations were made:

1. That the United States continue its present program of educating the LDCs as to (i) the value of membership in the global system, and (ii) the desirability, in selected LDCs, of establishing earth stations.

2. That we continue to encourage and stimulate sources of possible financial and technical assistance other than AID to provide such assistance to the countries on the priority list at an early date.

3. That AID continue to consider financing for earth stations in those countries on the priority list, assuming other financing is not available on reasonable terms and that the project satisfies development loan criteria.

4. That State and AID keep abreast of the progress in the construction of earth stations, and plans for such construction, and by January 1, 1967 report to you (a) the status of earth station construction in the priority countries, (b) whether, generally, anticipated assistance from non-United States Government sources has indeed materialized, and (c) what, if any further United States Government action should be taken.

Discussion

While progress in establishing earth stations in the selected LDCs has not been uniform, progress is being made. Annex I provides an up-to-date status report on each priority country and/or area. Annex II shows earth station planning in areas other than the priority group. These Annexes clearly indicate that there has been considerable movement during the past six months and that this movement is widespread.

We conclude that the intentions and plans of many countries with respect to satellite communications jelled during this period. LDC interest is shown not only by earth station developments, but also by the number of countries that joined INTELSAT and those about to become members. Annex III provides the names of these countries.

Financing does not appear to have been the real problem in moving along earth station programs, although it was an element; rather, organizational and technical problems have held up some decision making by the developing countries. The critical element is to develop some national momentum toward establishing an earth station; once this is done, countries seem to move along with their plans without undue delay. This momentum was furthered by the United States in various ways. The Department of State’s Seminar on Earth Station Technology, held in Washington in May 1966 was clearly a help; repeated visits by officials of the Communications Satellite Corporation, and to a lesser degree by other United States international telecommunications carriers and by American manufacturers, also helped; so did the efforts made by our missions abroad. All were designed to educate the developing countries about the benefits of communications via satellites and all constituted significant factors in developing this momentum.

In making the satellite communications system an operable one, the major effort remains, however, the rapid emplacement of earth stations so that the satellites can be put to use as they become available. We do not believe the recent failure to place the INTELSAT II Pacific satellite in a synchronous orbit will materially delay the system. In any case, new launches are now scheduled for early in the new year. Moreover, production of the INTELSAT III satellite series is on schedule and these satellites should be in orbit early in 1968.

In order to insure that earth station construction proceeds in a positive way, we believe it prudent to continue to encourage and stimulate interest, as well as to render financial and technical assistance as is necessary and appropriate on a case-by-case basis. During the past six months, the IBRD, IADB and the Ex-Im Bank have all become involved in financing of earth stations. It appears these financial sources are available for financing stations where the economic viability of the installation is reasonably good. We do not believe that any special persuasion needs be made at this time, although developments will be closely followed.

With regard to two of the selected countries, it appears that Korea will need assistance from the Ex-Im Bank, IBRD or AID. A similar situation prevails in Pakistan. Moreover, as it now appears likely Iran will forge ahead of Turkey in joining the consortium and in establishing an earth station, we believe the previous selection of Turkey should be dropped or changed in favor of Iran. An earth station in Iran (with one scheduled in Greece) should be adequate for this area, taking into account the existing high quality CENTO microwave facilities (financed by AID) linking together Turkey, Iran and Pakistan.

Conclusions

In view of the above, we conclude:

1. That the progress being made in the establishment of earth stations, taking into account the newness of this mode of communications, has been satisfactory during the past six months, and that it is likely that this progress will continue in the future;

2. That the United States should continue its present program of actively promoting membership in INTELSAT, as well as the establishment of earth stations in selected developing countries;

3. That, based on current assessments, financing is available for earth station construction in the selected countries except in Korea and Pakistan where Ex-Im Bank and/or AID assistance may be required.

4. That the United States should continue to encourage management of the various international development banks to look with favor on the financing of earth stations in the developing countries; and

5. That Turkey should be deleted from the list of selected countries and/or areas, and Iran substituted.

Recommendations

Inasmuch as satisfactory progress is being made in planning for and the establishment of earth stations, we have only two specific recommendations:

1. State and AID should pay particular attention to earth station developments in Pakistan and Korea, with the objectives of insuring rapid establishment of earth stations in those two countries and encouraging and helping those governments to obtain financial assistance from international development bank sources; and

2. State and AID continue to report from time to time on the status of the establishment of earth stations in the less developed areas of the world.

1. Source: Department of State, NSAM Files: Lot 72 D 316. Confidential. A covering memorandum from Read to Rostow indicates the report was transmitted to the White House on January 4, 1967.
2. Annex IV was not found attached. Regarding the June 30 report, see Documents 86 and 87.
3. A detailed 4-page breakdown of the countries is in Annex I. None of the annexes is printed.