ing, "Will you have a representative down here tomorrow morning at 9 o'clock to sit in on a draft of the Intelsat agreement," and move down there and have 28 or 30 pages to sit in on and to talk about. We have been pressing for this thing for 2 years.

Mr. ROBACK. Does the FCC aegis which you have proposed give immunity from antitrust?

Mr. GALLAGHER. Whatever immunities that are necessary, I would assume it would give, and I also think that the FCC should be part of this so they can understand and look into the future.

COMSAT ROLE

Mr. HOLIFIELD. It is very apparent from reading Mr. Charyk's letter and other letters here, that Mr. Charyk does not consider Comsat as a servant to the carriers, but as an independent competing entity with its own rights and its own prerogatives and its own advantages. Mr. GALLAGHER. We have not asked or suggested that Mr. Charyk's organization is a servant of the carriers in the word of "servant," but we do say they are a supplier.

Mr. HOLIFIELD. Well, a service giving or a supplier, a carriers' carrier I think is a common term.

Mr. GALLAGHER. That is right.

Mr. HOLIFIELD. But they reject that evaluation of their function completely.

Mr. GALLAGHER. Well, that is why we had an authorized user decision, and now we have a petition for reconsideration of certain aspects of that authorized user decision.

Mr. HOLIFIELD. You found the authorized user decision not as clear as you would like it in meaning, apparently?

Mr. GALLAGHER. Well, the authorized user

Mr. HOLIFIELD. Or do you just object to the contents of the decision?

Mr. GALLAGHER. The authorized user decision did not go all the way in our particular approach.

Mr. ROBACK. It left the door open.

Mr. GALLAGHER. Pardon?

Mr. ROBACK. It left the door open to direct service?

Mr. GALLAGHER. This is correct, sir, but we did offer our earth station proposal in the public interest.

Mr. HOLIFIELD. By the use of unique

Mr. GALLAGHER. As I reported in my testimony, we have, in fact, been meeting over the past 2 or 3 weeks to try to develop a concept of joint ownership of the ground stations.

AVAILABILITY OF GROUND STATIONS

Mr. DAHLIN. Mr. Gallagher, with respect to these ground stations, your statement says that vou have undertaken arrangements to supply transportable stations. Does that mean you have contracts or options or what?

Mr. GALLAGHER. I would rather put it, and if I might rely on that which Mr. Hawkins pleaded with this committee yesterday-that I would rather leave it at the word "arrangements," and that

Mr. DAHLIN. With respect to Page, that is, do you have a guarantee they can supply such a station?

Mr. GALLAGHER. I have a guarantee, yes; I have a guarantee from Page.

Mr. DAHLIN. You were a little indefinite about when those stations were actually to be in an operating condition. That is to say, are they off the production line or are they being checked out? What is the availability date? Is it well before the date of services?

Mr. GALLAGHER. My understanding from Page is that they can meet these April 1 dates if we move now.

Mr. DAHLIN. Are you proposing that the transportables which Comsat has should not be moved from those locations but that instead you, in particular, should be allowed to place the the Page transportables in the other country?

Mr. GALLAGHER. I should like to meet it in particular, but I am just not limiting it to myself. If somebody can do a better job-what I am basically suggesting is those transportables be left where they

are.

Mr. DAHLIN. If there are, let us say for purposes of argument, four transportable stations in question, and any two of them can move to the foreign locations, and any two can fill the gap at the place of the dishes you have mentioned, is there a real problem of availability in this or is there a timing problem or what?

Mr. GALLAGHER. Unless Comsat orders and contracts for the two available ground stations, but they have not chosen to do so. They have chosen to move on an approach of disassembly, shipment and reassembly.

Mr. DAHLIN. Is that because those are available now?

Mr. GALLAGHER. I do not know why they have done it.
Mr. DAHLIN. Or will be available soon?

Mr. GALLAGHER. I would rather think they might feel-I do not know what is in their mind-but I rather feel they figure, "We have got these transportables, we can get this contract out in the Pacific, we can use these transportables, so to speak, of a byproduct of the 85-foot antennas, and then at some particular point in time, future time, we will get up our second 85-foot antenna or put in a different site location as an alternate or alternate route facility," because, bear in mind, the application for authorizations called for two 85-foot antennas by Comsat.

Mr. DAHLIN. There is nothing to prevent the arrangement you suggest being done between Comsat and Page at the present time that you know of?

Mr. GALLAGHER. I think there might be at this particular point in time.

Mr. DAHLIN. Could you explain that?

Mr. GALLAGHER. At this particular point in time the answer is, insofar as the first two ground stations are concerned, the answer is, "Yes," they have difficulties right now. They have got difficulties. Mr. DAHLIN. What kind of difficulties?

Mr. GALLAGHER. Perhaps commitment difficulties to others than Comsat now.

Mr. DAHLIN. In other words, there is a question of how many transportable stations are off the line and how many options Page might have to take them up, it that what you are referring to?

Mr. GALLAGHER. That is right. You do not go down to Sears, Roebuck and buy two of these things now.

Mr. DAHLIN. That we appreciate, and we are trying to get that matter clear by your statement on the record.

Mr. GALLAGHER. That is why I say I think there is a definite handle now on the next two ground stations by Page.

Mr. DAHLIN. And is Page the only supplier of a terminal which would be compatible with this system?

Mr. GALLAGHER. No, sir. I think you will probably hear from Mr. Tower that he-he is with ITT-he can do something along those lines, too.

Mr. DAHLIN. So, just because, for instance

Mr. GALLAGHER. That is why I said to you

Mr. DAHLIN. If there are less than four or only four stations, and Page, perhaps, has these committed, this still does not prevent other suppliers from submitting or supplying transportable ground stations. Mr. GALLAGHER. That is what I am basically getting down to, Mr. Dahlin. I said I should like very much to supply these transportable ground stations in the Pacific, I should like very much to do so. I should like very much to get the contracts for these particular circuits. But if somebody else can supply the ground stations quicker, faster and better than I, then, good luck to them. But what I am saying is that the two stations should not be disassembled, shipped and reassembled.

Mr. DAHLIN. If they happen to be the first available stations, why, the programing officer or the scheduler might have a reason for moving those if they happen to be the first two stations that anybody has available.

Mr. GALLAGHER. If they happen to be the two only stations available, obviously this is the only thing they can do is to disassemble, ship, and reassemble.

Mr. DAHLIN. Your point is they are not.

Mr. GALLAGHER. They are not the only stations available.
Mr. HOLIFIELD. Thank you, sir, for your testimony.
Mr. GALLAGHER. Thank you very much, sir.

(The following material was furnished for the record :)

WESTERN UNION INTERNATIONAL, INC.,
Washington, D.C.

DEFENSE COMMUNICATIONS AGENCY,
Washington, D.C., May 2, 1966.

(Attention: Mr. Henry G. Catucci, Vice President).

DEAR MR. CATUCCI: The Department of Defense (DOD) has a defense requirement for a number of high quality and highly reliable leased channels in the Pacific Ocean area to be provided by a means other than the present cable facilities. The purpose of this letter is to describe the requirement and to determine if your company desires to submit a proposal.

The proopsal, if submitted, must include as a minimum the following:

(a) The company's willingness, and the arrangements proposed, to assume responsibility for the technical sufficiency of the circuits on an end-to-end basis. (b) The company's willingness, and the arrangements proposed, to act as the 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 services.

(c) A technical description of the method proposed to satisfy the requirements described below with particular emphasis on ability to meet the service dates and ability to meet the quality and reliability specified.

(d) Cost estimates to include (as applicable):

(1) Contingent termination liabilities and liability period,

(2) Minimum revenue guarantee, minimum service charges or equivalent, (3) One-time charges such as special construction, installation, conditioning, etc.,

(4) Monthly recurring charges by each individual segment and the basis for these, e.g., tariff, foreign correspondent charges, estimated subject to tariff filing, etc. Where the charges are to be filed with the Federal Communications Commission (FCC), sufficient detail as to the estimated installed costs, operating expenses, rate-of-return, etc. must be provided so as to alow evaluation of the validity of the methods used to arrive at the estimated charges and their amount, and

(5) Any other charges which may be proposed.

(e) To the extent that other entities either foreign or domestic would be involved, a statement indicating their agreement to participate in the manner described above.

The services required are as follows:

(a) Up to ten circuits from Hawaii to each of the following: Japan, Philippines and Thailand. The services are to be provided from a military technical control facility in Hawaii (30 circuits) to a technical control facility at Fuchu Airbase (10 circuits); to a technical control facility at Clark Air Force Base, Philippines (10 circuits); and to a technical control facility in the vicinity of Bankok, Thailand (10 circuits) for extension over military facilities to ultimate destination.

(b) The services are required on a 24-hour per day basis at 99.5+% reliability. The circuits must meet schedule 4B alternate voice/data quality or equivalent CCIR standard. At Enclosure 1 is a description of the 4B specification.

(c) The service date for all circuits is April 1, 1967, or as soon as possible thereafter. An earlier service date may be offered as an option.

Your response must be delivered to Hq DCA, Code 350, on or before May 30, 1966. If, however, your company does not desire to offer the service we would appreciate knowing this fact by May 10, 1966. This letter is an inquiry only and should not be construed as obligating the government in any way.

Sincerely,

GEORGE E. PICKETT,

Major General, U.S. Army, Deputy Director for Defense Communications System.

Enclosure, Schedule 4B channels. (Attachment omitted.)

WESTERN UNION INTERNATIONAL, INC.,

May 12, 1966.

Maj. Gen. GEORGE E. PICKETT,
Deputy Director for Defense Communications System, Department of Defense,
Washington, D.C.

DEAR GENERAL PICKETT: Thank you for your letter of May 2, 1966, describing the requirements of the Department of Defense for leased channels in the Pacific area. Western Union International does desire to offer the required service, and a response will be submitted pursuant to your inquiry.

Western Union International appreciates being offered the opportunity to submit an offer to the Department of Defense for alternate voice/data leased service, pursuant to your request, "By a means other than the present cable facilities." We are one of three carriers presently authorized to provide such service to the Government and the public by means of satellite facilities. Warm personal regards. Sincerely yours,

HENRY G. CATUCCI, Vice President.

WESTERN UNION INTERNATIONAL, INC.,

May 12, 1966.

Mr. GEORGE P. SAMPSON,

Vice President-Operations, Communications Satellite Corp.,
Washington, D.C.

DEAR MR. SAMPSON: We are in receipt of a letter dated May 2, 1966, from the Defense Communications Agency inviting us to submit an offer for alternate

voice/data leased chanels in the Pacific area "by a means other than the present cable facilities." A copy of this letter, together with the attachments describing technical specifications, is enclosed herewith.

You will note that DCA has requirements for up to 10 circuits from Hawaii to Japan, Philippines, and Thailand, respectively. In order to respond to the DCA request we will need information from Comsat relating to satellite circuit costs, technical specifications, and operational commencement dates. In the interests of fairness and impartiality, it would also be appreciated if you would furnish us with: (1) all information available to Comsat bearing upon the data requested in the enclosed DCA letter; and (2) all information furnished by Comsat to each of the other U.S. carriers for the purpose of enabling them to respond to this same DCA letter.

In view of the response date of May 30, 1966, imposed on us by DCA, your prompt cooperation will be appreciated.

Very truly yours,

Enclosure.

(Attachment omitted.)

(S) R. E. CONN.

COMMUNICATIONS SATELLITE CORP.,
Washington, D.C., May 13, 1966.

Mr. ROBERT E. CONN,

Vice President, Western Union International,
New York, N.Y.

DEAR MR. CONN: In accordance with your request of May 12, 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 Interim Communications Satellite Committee 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 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 FCC No. 1 the Pacific service offerings for authorized common carriers, including the half circuits 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