Now, you say one carrier, only one carrier, submitted a different bid, and then you said subsequently the other carriers indicated they would like to submit a new bid.

General STARBIRD. Yes.

Mr. ST GERMAIN. But not during the 4-day period.

Did any of them say to you, "Well, we can't submit a bid within 4 days"?

General STARBIRD. I can't answer that.

Mr. ST GERMAIN. That is not enough time.
General STARBIRD. Colonel Paschall again.

Colonel PASCHALL. They declined to resubmit.

Mr. ST GERMAIN. Without stating any reason for their declination? Colonel PASCHALL. I am sorry, sir, I cannot recall any stated reason, but there was to the best of my recollection no refusal to bid on the basis that there was insufficient time provided to rebid.

Mr. ST GERMAIN. And yet the same carriers then, within 4 or 5 days after that initial 4 days, asked if they might resubmit?

Colonel PASCHALL. Yes, sir; their request for resubmittal was subsequent to the 23d of June public notice by the FCC. They interpreted that public notice as being a bar to our direct contracting with Comsat, and at that point in time the request itself was

We will file new rates based upon the public notice which states that new rates are expected by the FCC and we would like to quote those new rates.

Mr. ST GERMAIN. I understand, RCAC is the firm which did submit. within the 4-day period.

General STARBIRD. Yes.

Mr. ST GERMAIN. Was there a substantial change in their bid, without stating the change?

General STARBIRD. Yes, there was a very substantial change in the bid.

Mr. ST GERMAIN. Do you have cause or reason to believe that had the other carriers resubmitted there might have been a substantial change in their bids, also?

General STARBIRD. I can't answer.

PROVISION OF COMMUNICATIONS FOR SOUTHEAST ASIA

Mr. ROBACK. I would like to ask your commentary on this. You made a statement, General Starbird, that in the late fall of 1965 a second significant requirement for early satellite communications service arose.

Mr. O'Connell in the statement before the Pastore committee said. the same thing this way:

Late in calendar 1965, it became apparent to the Secretary of Defense that additional communication service would be needed to support the overall war effort in Vietnam.

Of course he is not going to speak for the Secretary. But do you think that it became apparent to the Secretary only at the end of 1965 there was going to be a Vietnam requirement?

General STARBIRD. No, and I didn't think that is intended by either language. The way it has developed was, I went out for periodic visits out to Vietnam and CINCPAC and we began to try to figure out how we might back up the cable.

Mr. ROBACK. We were worried about that 3 years ago in the hearings, we worried about it together. Did it take a visit in 1966?

General STARBIRD. No, but there wasn't an apparent way of doing much about it beyond the high frequency. Now we were backing it up by high frequency and we had plans to move IDCSP terminals out there, at least plans were under consideration. But at that time we began to consider what we could do as another factor and that is the cable traffic kept going up and particularly on the Governmentowned cable from the Philippines to Vietnam, the cable began to fill completely.

So then we came to considering what do you do, do you try another cable or do you try an alternate means and we developed the plan for backing it up with the Apollo satellite.

Mr. ROBACK. Late in 1965 the troop buildup was well along, well along, close to a year, wasn't it?

General STARBIRD. No. It wasn't that far along.

Mr. ROBACK. It was a half year, it was certainly a half year that the buildup was in the works.

General STARBIRD. I would like to recheck.

Mr. ROBACK. All right, you can recheck that, but

General STARBIRD. I know the date it began but I want to check it classificationwise.

Mr. ROBACK. Isn't the sense of this statement that in late 1965 NASA developed a requirement for services which it decided should be bought from Comsat, and you were what we might call the happy recipient of a bonus here, you had another service becoming available, Vietnam was coming along, why not hook into it? Isn't that the sense of it?

General STARBIRD. I would not fight with it.

Mr. ROBACK. That is a different version than saying late in calendar year 1965, or even your statement in the late fall of 1965, a second significant requirement for early satellite communication services

arose.

I don't want to invest you with such lack of foresight, so therefore I would rather you would tell us, "We had the foresight, there wasn't a devil of a lot to do about it given all the constraints put upon us, but since NASA was buying in we thought we could do the same at some profit," isn't that so?

General STARBIRD. That is about right.

Mr. ROBACK. All right.

General STARBIRD. But the requirements

Mr. ROBACK. You can excuse the vernacular, but let's get to the sense of it.

General STARBIRD. Excuse me a second, at the same time, incidentally, we developed a plan for increasing greatly communications within Vietnam. Now I don't want to deal with numbers and times

of discussion. I will come back to that tomorrow after I can make a security check. But the realization that we ought to back up that cable by an alternate means, whether it be another cable or Comsa: was one of the factors that led me to that trip in the Pacific.

Mr. ROBACK. I am sure the decision was a wise one. Whether it was belated or not may not necessarily be your responsibility. General STARBIRD. No, it is my responsibility.

REASONS FOR RATES IN COMSAT CONTRACT

Mr. ROBACK. The rates that are quoted in your CSA, that is your purchase order, include a rate, for example, from Hawaii to Japan. Just for information, I saw some public guideline rates that were published, released by Comsat, and they had a rate which was quite different, two to four times less than the one you are paying. What are the added charges due to?

Do you follow the question?

General STARBIRD. No, and I think I follow the question. You are asking me why is the rate being quoted to the DOD less than the rate that is generally quoted. Is that correct?

Mr. ROBACK. On July 7, Comsat made some announcements of guideline rates subject of course to FCC approval, but these guideline rates, for example, they quoted a half circuit from Hawaii to the Far East, Far East not otherwise defined, of $3,800. Now, that is for a month. A half circuit, if you double that for a full circuit, that is $7,600 a month.

Now, you are paying anywhere from $16,000 to $30,000 a month, and I just want to get an idea of why that is so.

General STARBIRD. Go ahead, Colonel Paschall.

Colonel PASCHALL. The rate filed by Comsat in their revenue requirements study submitted to the FCC in July called for $3,800 for a half link for service from Hawaii to the Far East. This is a base channel charge. The quotation to us for that same service a half link from Hawaii on the satellite, is $4,000. The $200 differential is to provide for the administrative costs associated with serving as DOD's agent for single billing, for technical control services, and for equalization.

Mr. ROBACK. I am not arguing

Colonel PASCHALL. Now, then, the down-link from the satellite to the foreign terminal is not a matter under Comsat's control. This charge is provided by and set by the foreign entity.

In the case of Japan, the KDD Co., sets a rate of $12,500 for the down-link, and this is a standard both in cable and in satellite services. In the case of the Thailand and the Philippine down-link rate it is relatively high the first year but declines in the second and the third year.

Mr. ROBACK. But it is true, is it not, and I am only asking for information, that on the half circuit that is under the control of the foreign entity, and charges compared to Comsat's charges for the same,

using the same satellite for the traffic, is two to four times, in the first year, as much as for Comsat?

Colonel PASCHALL. Yes, sir, the foreign entity charges are not expected-well, in this case, are not identical to the U.S. carrier charges. Mr. ROBACK. So that the economies in using satellites as compared with cables, which you can still demonstrate, nevertheless would be greatly more if you had control of both ends of the circuit, as you would in the case of a military system? Is that true?

Colonel PASCHALL. Well, in the case of a military system you would have to assess the overall investment costs. You can't put a military terminal in a foreign nation and operate with a civil provided satellite particularly when that foreign nation is a member of the consortium.

Mr. ROBACK. In other words, once you deal with Comsat you have to deal with a foreign entity and get it to manage the receiving end because of the civil frequency involved?

Colonel PASCHALL. The same would be true of dealing with a carrier, the answer is yes.

Mr. ROBACK. If you were dealing on your own, and I am not arguing but just being clear for the record, if you were dealing on your own on a military regulated frequency, so to speak, or a military accepted frequency, you put in your own station and you deal with yourself. Colonel PASCHALL. Yes, sir.

DIFFERENCES IN DEALING WITH FOREIGN ENTITIES

Mr. ROBACK. Now, why did NASA have to go out and deal with the foreign entities on its own while the Defense Department was relying on Comsat?

General STARBIRD. The reason was that Comsat found that two of the foreign entities, the Australians and the United Kingdom, would not deal through Comsat but desired to deal directly with NASA. Mr. ROBACK. Here

General STARBIRD. Based on this, NASA agreed, to get the service, to deal with the foreign entities directly rather than deal through Comsat. Now, in our case, Comsat expressed a willingness and the foreign entities the apparent willingness to have Comsat manage the system for the DOD.

Mr. ROBACK. Here was Comsat coming in and, you might say without any invidious reference, bragging up to you they know how to deal with these foreign entities, they have a mission to do it and now have experience to do it. Why would that apply in the case of foreign entities who were not then even members of the international consortium, where as in NASA's case there was refusal to deal through Comsat by parties who were members of the consortium. Perhaps this isn't a question for you to answer, but do you have any observations on it? General STARBIRD. No, I have none on it.

Mr. ROBACK. Does it strike you as peculiar?

General STARBIRD. It was a fact of life reported by Mr. Webb to the Executive Agent.

Mr. ROBACK. When Mr. McNamara approved the request of Mr. Webb, he had to approve it with some kind of a concern that NASA

was being held up on pricing, and he hoped there would be some reduction, but he didn't really know what the final price was going to be.

General STARBIRD. His main expression of, not concern, but his expression of there being some chance that some of the qualifications wouldn't be met concerned his estimate that there was an optimistic schedule for the launch and positioning of the satellites. However, he did express the desire or hope that Mr. Webb would negotiate as low a price as was possible in connection with the service.

DIFFERENCES IN DOD AND NASA CONTRACTS WITH COMSAT

Mr. ROBACK. NASA is buying something like eight circuits, and paying something like $40 million for 3 years. DOD is buying more than three times as many circuits and paying something like $19 or $20 million for 3 years.

Why does NASA pay twice as much for a third of the circuits! General STARBIRD. It is generally, and it is a very complex formula that has to be gone through, but generally you pay according to the investment required to put in the service, amortized over some period, and the percentage of the satellites' power that is used.

Now, in connection with the DOD use the percentage of power that we use is somewhere between 17 percent and 39 percent depending on the size of the ground terminal.

With regard to the NASA requirement, though, because of the size of the ground stations involved, and the circuitry that is required between particular points, they will be using about 44 percent in one ocean and about 56 percent in another ocean of the capacity that is concerned.

Mr. ROBACK. In other words, you are saying that they are going to use more of the satellite power and, therefore, in a sense more of its capacity, and will have to build bigger or more expensive ground o ship stations, is that right?

General STARBIRD. Yes. Yes, sir.

Mr. ROBACK. Your rates are not incremental rates. estimated potential tariff rates?

General STARBIRD. Yes.

Mr. ROBACK. Is that right?

Your rates ar

General STARBIRD. Yes, that is true, and in the case of NASA and o the DOD contract, both of them carry provision, of course, that th rates that are charged are subject to FCC approval.

Mr. ROBACK. Mr. Chairman, I would like to ask General Starbir when he comes back tomorrow to update a listing of the contractor on IDCSP.

I think you submitted one to the Senate Space Committee.
General STARBIRD. Sure.

Mr. ROBACK. And if you can supply us at least the best estimate available of the total contract costs on the right-hand column, we ca get a picture of the IDCSP costs.

General STARBIRD. Total contract costs.

(The following information was supplied for the record :)