Mr. ROBACK. Both. Since the country is leasing, you are the one really who is making a termination liability offer based upon your own commitment to Page, is that not so? Mr. HAWKINS. Only in part. Mr. ROBACK. But we had a discussion and we were talking about the foreign liabilities. I am trying to find out why it is that if you are actually leasing to a foreign country, they have to worry about termination liability. It is a commonsense question. I may not just understand the arrangement. Mr. HAWKINS. Well, I think our difficulty, Mr. Roback, is that I do not know what arrangements Comsat made at the foreign end. Mr. ROBACK. Let us suppose Comsat proposed to lease until fixed stations could be built, let us suppose it. Do termination liabilities run to leased stations, and, if they do, they run here, they do not run overseas, is that not so? Mr. HAWKINS. Well, the termination obligations were on the part of DCA, but there also have to be commitments at the foreign end. Mr. ROBACK. DCA is promising that if they do not keep the service for a given period of time, they are going to pay somebody capital costs, the outlays for those stations. Mr. HAWKINS. There are other expenses that would be incurred. Mr. ROBACK. And related expenses, but to the extent that these stations are leased by the foreign entity from you or from Comsat, the liability is something that you are determining for your own item of possession and not asking that the foreign country owns, is that not so? Mr. HAWKINS. We are talking here really about Thailand and the Philippines. In both of those cases it would be expected that the foreign entity would also be doing certain things. Mr. ROBACK. Yes; but they would not worry about being stuck with the station if you are just leasing it to them. They are paying you a monthly lease. Mr. HAWKINS. That is right. But the transportables were only for the first year. Beyond that the foreign countries would be expected to put in their large ground stations. Mr. ROBACK. Then they would want new termination liabilities. Mr. ROBACK. That was not under this CSA, was it? Mr. HAWKINS. Yes. Mr. ROBACK. In other words, those termination liabilities refer to the fixed stations as well as to the transportables? Mr. HAWKINS. Yes. Mr. ROBACK. And it is conceivable that it often would have an overlap and have termination liabilities of both kinds. Mr. HAWKINS. Well, probably you could avoid the overlap but because this was intended to be service for a period of 3 years, there is a period of time in here in which the transportable would be operating and then an additional period of time in which the permanent stations would be in operation. Mr. ROBACK. It is not too clear, but we probably cannot illumine the record more at this stage of the game. Thanks; thank you very much. Mr. HOLIFIELD. Thank you, Mr. Hawkins and your staff, for your testimony. Tomorrow we will have the witnesses of the I.T. & T. and Western Union before the committee and try to illumine the record some more. The meeting is adjourned. (The correspondence referred to in the text follows:) Maj. Gen. GEORGE P. SAMPSON, RCA COMMUNICATIONS, INC., Vice President-Operations, Communications Satellite Corp., 1900 L Street NW., Washington, D.C. DEAR GENERAL SAMPSON: We are in receipt of an inquiry from the Defense Communications Agency for a number of additional circuits between Hawaii on the one hand, and the Philippines, Japan, and Thailand, on the other hand. It is our intention to submit a proposal relative to these requirements, and in this connection we need information from your organization relative to rates and other matters. Accordingly, would you please furnish us with the following: The cost to RCA, on a common-carrier basis, for each 4-kilocycle circuit between the ground station in Hawaii and the Pacific satellite. Would you also give us the charge per 48-kilocycle bandwidth or other bandwidth group in excess of 4 kilocycles which may be available. There is some possibility that RCA will participate in the operation of ground stations at one or more of the foreign points. We, therefore, need information on the charges which the Intelsat consortium, or Comsat as agent for the consortium, would apply for that portion of the satellite utilized in conjunction with the foreign ground stations. In the event that these charges vary depending upon the type of ground station employed at the foreign point, would you please inform us as to the amount of the variances in charges. These charges would, of course, be for the types of circuits described above. The indicated requirement is for 24-hour-per-day service, 7 days per week. It is, therefore, necessary that we be informed whether service will be continuously available or whether there is any intent to interrupt normal operation for television transmission or any other purpose. The Defense Communications Agency has also informed us that they will require a reliability of at least 99.5 percent. I should be grateful for your comments on Comsat's view as to feasibility of meeting this degree of reliability in the proposed satellite system. We should be grateful for your definitive reply not later than May 15, 1966, so that we in turn can meet the time frame in our response as specified by the Defense Communications Agency. The implementation of actual service is scheduled for early 1967, and will you therefore confirm that the ground station in Hawaii and the satellite itself will be available by that time. Your cooperation is much appreciated. Yours sincerely, Hon. ROSEL H. HYDE, With best personal regards, HOWARD R. HAWKINS, RCA COMMUNICATIONS, INC., Acting Chairman, Federal Communications Commission, DEAR CHAIRMAN HYDE: We are enclosing for the information of the Commission a copy of our letter to Communications Satellite Corp. on May 5, 1966, requesting charges and related information with respect to the lease of communications satellite circuits between Hawaii and the Philippines, Japan, and Thailand. The information requested is necessary so that we may respond fully to an inquiry received by RCA to provide service for the Defense Communications Agency. Very truly yours, HOWARD R. HAWKINS, 67-906-66-38 RCA COMMUNICATIONS, INC., GEORGE E. PICKETT, DEAR GENERAL PICKETT: Thank you very much for your letter of May 2, 1966, addressed to our Mr. C. J. Rennie relative to DOD requirements for leased channels in the Pacific Ocean area. RCA Communications is very much interested in submitting a proposal and you may be sure that we will provide as much detail as is possible by May 30, 1966. Our ability to provide complete information by the date in question will depend on the speed with which responses are received from other entities including foreign administrations. In the circumstances, it would be most helpful if DCA could grant us an extension until June 30, 1966, in which to make our proposal. This extension will in no way delay the project itself because construction of the satellite ground stations in the several countries overseas does not depend on the rapidity with which we make our response. May I please have a reply at your earliest convenience. You may rest assured that we shall make our proposal as soon as possible, and in any case within the time frame specified by DCA. Yours very truly, LUDWIG R. ENGLER, COMMUNICATIONS SATELLITE CORP., Washington, D.C., May 13, 1966. Mr. HOWARD HAWKINS, Vice President, RCA Communications, 66 Broad Street, New York, N.Y DEAR MR. HAWKINS: In accordance with your request of May 5, 1966, the following information is furnished concerning the DCA service request in the Pacific. At the present time, Comsat is expecting to propose a rate for service to authorized common carriers of $48,000 per year per half circuit, Hawaii through half of the satellite to Japan, the Philippines, or Thailand. However, this figure could change as the determinations of cost are refined in which case you will be immediately notified. With respect to charges that the ICSC applies for satellite utilization, the following information is furnished. The present charge that would be levied by the ICSC against the foreign entity applying for space segment capacity would be $5,000 per quarter ($20,000 per year) per half channel when used with a standard 85-foot ground station. Charges for satellite utilization for other than standard 85-foot ground stations are determined by the ICSC based upon the technical characteristics of such stations. It will be necessary, therefore, to submit to the ICSC the technical characteristics of the stations in Japan, the Philippines, and Thailand for approval and determination of satellite utilization charges. It is planned that the ground station in Hawaii and the Pacific satellite will be available early in 1967 on a 24-hour per day, 7-day per week basis for the the services you request. We fully expect the Hawaiian earth station and the Pacific satellite(s) to meet the requisite reliability standard. End-to-end reliability will, of course, depend on the reliability of the associated ground stations at the foreign end and landline extensions on both ends. Based on experience to date in the Atlantic and assuming reliability of the Far Eastern communications satellite station facilities comparable to the present European communications satellite earth stations, a 99.5 percent reliability appears reasonable. In order to provide occasional television service via the initial Pacific satellite, the necessity for surrender of some of the projected circuits routed via the satellite would be anticipated. This could be any combination of commercial message circuits and the proposed DCA circuits. The determination of which circuits would be surrendered will depend on procedures and priorities to be established. Present plans contemplate the incorporating into our Tariff F.C.C. No. 1 the Pacific service offerings for authorized common carriers, including the halfcircuits from Hawaii to the satellite referred to in this letter. Therefore, it can be assumed that the terms and conditions of that tariff, as they may be modified from time to time or to meet unique Pacific requirements will be applicable to such channels. This will include those provisions relating to surrender of voice grade channels for television purposes and the combination of voice grade channels to enable authorized carriers to furnish channels of wider bandwidth. Very truly yours, RCA COMMUNICATIONS, INC., 66 Broad Street, New York, N.Y . GEORGE P. SAMPSON, Vice President, Operations. DEFENSE COMMUNICATIONS AGENCY, (Attention Mr. Ludwig R. Engler, Vice President) DEAR MR. ENGLER: Thank you for your letter of May 9, 1966, wherein you indicate your intent to submit a proposal for DOD leased channel requirements in the Pacific. Unfortunately, we are unable to grant the extentsion of time for proposal submission which you request. It is our understanding that a delayed decision could jeopardize service dates in at least one of the countries involved. Such delay, in view of the southeast Asia situation, would be unacceptable. Sincerely, GEORGE E. PICKETT, Major General, USA, Deputy Director. Maj. Gen. GEORGE E. PICKETT, RCA COMMUNICATIONS, INC., New York, N.Y., May 31, 1966. Deputy Director, Defense Communications System, DEAR GENERAL PICKETT: The attached submission is furnished in response to your letter of inquiry, reference 350, dated May 2, 1966, addressed to our Mr. C. J. Rennie. We believe that RCA Communications, Inc. is particularly qualified to provide these circuits for the Defense Communications Agency by virtue of its long experience and diversified operations via all means of communications. This total capability would provide DOD with a degree of flexibility not available elsewhere. We invite your attention to the following in RCA's proposal: RCA would establish a common leased facilities control and test center in Hawaii as described in your letter to me of May 26, 1966. RCA would perform all functions outlined in your letter dated May 2, 1966, including acting as DOD's agent with respect to those circuit segments provided by all domestic, international, or foreign entities which may be involved in providing the requested services. Leased channels provided by RCA in the total complex by one medium could be alternate routed by other media of communications, RCA being the only carrier that can provide a wide range of cable, radio, and satellite facilities in the Pacific area. RCA has filed new tariffs for leased channel service to major areas of the world, the magnitude of which will result in cost savings to DCA that will go a long way toward covering the cost of leasing the additional facilities. RCA has a history of operation and close cooperation with the telecommunications agencies in Japan and Thailand and has itself operated in the Philippines for almost forty years. We have very much desired to submit a proposal and to meet all the requirements specified by the Defense Communications Agency. The top manage ment of our company will certainly give this project continued personal support and supervision. We have sought to be as responsive as possible on all aspects of your inquiry, including cost estimates. The limited time available to us has made it difficult to obtain more information from overseas correspondents and also from the Communications Satellite Corp. Additional information will be provided as soon as it becomes available. Yours very truly, THOMPSON R. MITCHELL, President. WIDEBAND CHANNELS VIA SATELLITE-PACIFIC OCEAN AREA FOR THE DEFENSE COMMUNICATIONS AGENCY Foreword. CONTENTS General. System description. Operating, control, and monitoring plan. Alternate plan (omitted). High frequency radio (omitted). Cost estimates. Basis for cost estimates. Summary. FOREWORD This proposal is submitted by RCA Communications, Inc. in response to a letter dated May 2, 1966 (reply reference 350) from Maj. Gen. George E. Pickett, Deputy Director for Defense Communications System, soliciting information as to RCA's willingness and ability to provide the Department of Defense with a number of high quality leased channels in the Pacific area by means other than present cable facilities. This document will indicate and underscore RCA's willingness to furnish the required facilities and also highlight its unique technical and operational capabilities to provide service at the level of reliability specified by the U.S. military. RCA is better qualified than is any other carrier to make all the necessary arrangements and to act as DOD's agent with respect to those circuit segments provided by all domestic, international or foreign entities which may be involved in providing the requested services. This includes all matters related to ordering, providing and billing the new services. Of all U.S. carriers, RCA alone is franchised and holds traffic operating agreements to provide telecommunications services with all three of the distant Pacific points covered by this proposal-Thailand, Japan, and the Philippines. RCA's history of operation and close cooperation with telecommunications authorities in these countries spans almost 40 years. RCA is the only carrier that can provide the full range of coaxial cable, satellite, and HF radio communications facilities necessary for optimum flexibility and continuity of DOD communications services in the Pacific area. HF radio will be of unique advantage in cordinating the restoration of satellite and coaxial cable circuits. Recently, following several conferences with the FCC, RCA announced a dramatic new rate plan for international leased channel services. In consequence, RCA has filed new tariffs with the FCC substantially reducing leased channel rates to major areas of the world. It is expected that the magnitude of these reductions will result in cost savings to DCA which will go a long way toward covering the cost of leasing the additional facilities. I. GENERAL RCA in cooperation with its oversea telecommunications correspondents will undertake to provide the U.S. Department of Defense with leased communications channels between Hawaii on the one hand and Japan, Thailand, and the Philippines on the other hand. In each case, the circuits will meet schedule 4B alternate voice/data quality or equivalent CCIR standard. The circuits will be |