of the agreement worked out with Comsat before we started the negotiations with the foreign carriers.

Mr. ROBACK. That would give you clearer terms of reference in dealing with a foreign company?

Mr. SOHIER. Yes. It just was not the rate problem.

Mr. ROBACK. You wanted to be sure your domestic house was in order.

Mr. SOHIER. We can't compare, of course, what the services are, using conventional communications. For example, from the United States to Carnarvon, using conventional means, is roughly $60,000 per month. The Australian portion of that is $25,000 per month.

Using satellites, from the United States to Carnarvon, the amount is $23,000 per month, and I guess there is no difficulty in giving this figure, the Australian portion of that is $19,000 per month. So we have that kind of comparison, and there were some very discernible cost savings.

Mr. ROBACK. What is the relationship between the up-link and the down-link service charge? Have you got a ratio on that, Mr. Buckley! Mr. BUCKLEY. Will you repeat the question, please?

Mr. ROBACK. What is the ratio between the up-link and the downlink service charge for an equivalent unit of service?

Mr. BUCKLEY. I haven't got that broken up. We can furnish some information on that. But to answer a previous question you asked. about how this was broken-your question dealt with where the costs came from, you realize that the foreign entities supply a ground station plus short links to the Apollo ground station. The Comsat Corp., of course, supplies ground stations on this end and links to the, back to one of our, centers, plus the satellite portion of the system. In other words, they are supplying a ground part that is equivalent to what the common carrier is, plus the airborne part, and to use the cost fig ures previously given you by Mr. Sohier, the ratio of the Comsat par of the cost to the foreign entity part of the cost is 2 to 1.

(The following additional statement was submitted for the record:) Service charges for the link from Brewster Flat, Washington, to the satellite will be paid to the Comsat Corporation; service charges for the link from Carna”. von, Australia, to the satellite will be paid to the Overseas Telecommunications Commission (Australia) (OTC(A)).

In order to make a true comparison of the charges proposed by the Comsat Corporation and by OTC (A) for an equivalent unit of service, it should be determined what the charges would be if the antennas used at Brewster Flat and at Carnarvon were of the same size and characteristics. The units of satellite power which will be required by the 42-foot antenna at Carnarvon can be converted to units of satellite power required by an 85-foot antenna, as used at Brewster Flat. through the use of the antenna size ratio.

The proposed charge by the Comsat Corporation for one voice circuit from Brewster Flat, via the satellite, for reception in Carnarvon, Australia, using an 85-foot antenna at Brewster Flat, is $2.940 per month. If the proposed OTC(A) charge ($19.600 per voice circuit per month, based on use of a 42-foot antenna is adjusted by the conversion factor referred to above (0.154), the cost of ore voice circuit from Carnarvon, via the satellite, for reception in Brewster Flat would be $3,018 per month.

Mr. ROBACK. You mean Comsat pays the total satellite user charge Mr. BUCKLEY. The cost to us of the foreign entity is one-third of the total cost or equivalent figure of one-half of what we are paying Comsat, whereas it is furnishing two parts of the service.

Mr. ROBACK. Comsat is furnishing the satellite services, you say? Mr. BUCKLEY. I say they are furnishing the airborne link.

Mr. ROBACK. The airborne link.

Mr. BUCKLEY. And the ground system, too.

Mr. ROBACK. And your understanding is that Comsat pays the satellite user charge. It is owned by an international group. Somebody has got to pay for it, so you are saying Comsat is paying for the total space segment; is that your understanding?

Mr. SOHIER. They pay for a portion of it.

Mr. ROBACK. Well, I just got the testimony that they are providing the space segment.

Mr. SOHIER. That is right. But the total consortium investment in Intelsat II is not passed on 100 percent to NASA. For example, 44.8 percent of the consortium portion is considered to be there to fulfill NASA's requirements so it is whittled down by that much, and Comsat's share of the consortium investment is 55.6 percent, so you have the two factors against segment costs.

I must admit it gets very complex figuring out what goes into the tariff, but these are percentages applied against the total consortium investment in the space segment.

Mr. ROBACK. What is the relationship between the up-link and the down-link charge in terms of per unit of service?

Mr. SOHIER. I can give you what I think you were, perhaps, looking for on this. From Brewster Flat, Wash., to the satellite, using an 85-foot dish, the space segment cost per circuit per month is $2,940. Now, I think you are interested in the comparison with the foreign segment.

Mr. ROBACK. Yes.

Mr. SOHIER. The Carnarvon to satellite segment using a 42-foot dish is $19,600. That is per circuit per month.

Now, it may be of some interest to compare this. We have compared the figures with the DOD circuits that they purchased from Comsat using foreign stations.

Mr. ROBACK. Are you paying more than DOD for the same service? Mr. SOHIER. Quite comparable. For example, from Hawaii to the satellite, using Comsat and an 85-foot dish-and this is DOD now-the segment cost per circuit per month is $3,800, and from the Philippines to the satellite, using a 42-foot dish per circuit per month is $24.266.

Mr. ROBACK. As a commonsense position, DOD is ordering 30 circuits and you are ordering only about a third of that, a little bit more. Mr. SOHIER. I am giving you a per circuit per month figure.

Mr. ROBACK. Well, is DOD ordering more circuits than you are per month? They are ordering 30 circuits. You are not ordering 30 circuits, but you are paying a lot more than they are. How do you explain that?

Mr. SOHIER. Well, if you are to look at-looking at just the circuits, I do not think it gives you the picture. We are using, as I indicated in my statement, 33 percent of the capacity in the Pacific satellite, and 54 percent of the one in the Atlantic. Now, this gets to be a rather technical question of comparing the amount of power used against the circuits we are using.

Mr. ROBACK. You are paying on the basis of a ratio or fraction of the satellite power consumed, not on the number of circuits furnished. So even though you have less circuits than DOD, you are using more of the power, is that what you are saying?

Mr. SOHIER. I think that is correct. This gets to be a technical question. Mr. Jaffe, do you want to deal with that?

Mr. JAFFE. Only in a very general sense. I think delving into the details of the numbers requires very specific technical discussion. Mr. ROBACK. Can you explain why it is that NASA is paying more for less circuits than DOD?

Mr. JAFFE. Yes.

The primary power consumers, if you will, are the instrumentation ships, with the smaller antennas which are aboard these ships and, therefore, in order to communicate with these small antennas aboard these ships we need a greater percentage of the power from the satellite to provide for this circuit to the ships. This is the governing factor, and the satellite is capable of delivering only a fixed amount of power.

Therefore, if you are using a greater percentage of it per circuit, the percircuit cost has to go up, so the costs for using the satellite are essentially shared on the basis of the amount of power or the percentage of power that you are using for the particular service.

We are governed essentially by the requirement to communicate with these ships; the ships having a smaller antenna requiring more power. Mr. ROBACK. Are you paying the same rate? Do you understand that you will pay the same rate as other users of the satellites, Mr. Sohier?

Mr. SOHIER. The question of what we pay Comsat is a matter that is in the tariff pending before the FCC, and there will be-there are other users of the additional capacity, there will be other tariffs filed, and I would pressume the rates will be comparable; but the FCC will make that judgment, of course.

Mr. ROBACK. According to a release that Comsat issued on July 7. the rates to be charged to NASA for the Apollo service will be equivalent to the level of charges which Comsat proposes to apply to other commercial satellite channels. What do you understand that do mean? Mr. SOHIER. I take that to mean an affirmative answer to the question you asked me, that is what they plan to include in their tariff. Mr. ROBACK. Well, will this be a standardized rate which, on a per circuit basis others will be charged, or are you paying more because you have to use it with ships?

Mr. SOHIER. We are paying a rate based on the amount of the capacity of the satellite we are using, and the rate that others would pay would be comparable on that same basis.

Mr. ROBACK. In other words, the rates will be standardized on a tariff basis and somebody else will be paying a little bit of the cost of your communicating with the ships through the standardized rate. Is that what you mean?

Mr. SOHIER. I do not think so.

Mr. ROBACK. Then this will not be a standardized rate?

Mr. SOHIER. I think it will be a standardized rate based on the use of the capacity of the satellite. I do not know how else it can be computed.

Mr. ROBACK. Do you know at this time whether you will be paying the same as DOD?

Mr. SOHIER. Again, on that

Mr. ROBACK. That is, the same in the sense that a rate that will finally be filed will not make any distinction between the two? I understand what you have negotiated here.

Mr. SOHIER. I believe that is the case. Again based on the extent to which our service uses the capacity of the satellite, so I think that the rates will be the same.

USE OF APOLLO CIRCUITS

Mr. ROBACK. You are hiring these channels on a 24-hour basis, right?

Mr. SOHIER. They are for continuous use: yes.

Mr. ROBACK. Do you anticipate they will be useful for any other communications, purchased either by yourself or any other agency, or will they be standby when not in use?

Mr. SOHIER. Well, the first answer to that is, of course, they go to specific places, ships in three oceans and several foreign locations, and whether they are actually going to be useful to anyone else is a question of whether anyone else wants to communicate with any of those three places, and the likelihood of any requirement developing is pretty small.

I should say, however, on the second point that we have had difficulty with the foreign entities in getting them to agree that the contract with NASA should also include other Government requirements. This is, this runs against the practice among international carriers when they deal even with their own governments. If the Australian communications entity is dealing with their Ministry of External Affairs, the contract is for their requirements, and if some other element of government wants to use some of the channels that have been purchased they have to pay a surcharge of some 33 percent. This has been the tradition in the industry.

Mr. ROBACK. These are dedicated circuits as far as the foreign entity is concerned, dedicated to NASA?

Mr. SOHIER. That is right.

Mr. ROBACK. And dedicated to Apollo.

Mr. SOHIER. But we have not reached agreement on this point. We have been very forceful in holding out for the inclusion of the U.S. Government, not just NASA.

Mr. ROBACK. If these are idle for 6 months, for example, you would want some other Government user to use them?

Mr. SOHIER. Yes; very much so. We think the U.S. Government is the contracting party and not just NASA, but we recognize that the U.S. Government has dealt with these entities in the past on the basis of just the agency requirements. We think that this is not desirable. This is really what has been the major negotiating point.

Mr. ROBACK. Is your contract with Comsat a contract that gives you that privilege?

Mr. SOHIER. We would have had no difficulty with Comsat if we had not started having difficulties with the foreign entities on the point. We had a provision agreed to, which is not in the contract now.

We have left it out; it is really unresolved. We have no doubt that given the very small requirements that we expect to develop, that Comsat itself would have no objection to accommodating other Government requirements over what we purchased. But, of course, it has no practical bearing except to the ships if the foreign entities do not accord a similar right to NASA.

Mr. ROBACK. Do these restraints being imposed in the foreign negotiation also apply to NASA using these satellites for other than Apollo purposes; for example, if you want to pass administrative traffic?

Mr. SOHIER. I do not believe that has been imposed or discussed or presented as a problem. It is really NASA as a

Mr. ROBACK. When do you anticipate this issue will be resolved? Mr. SOHIER. I think very shortly.

Mr. ROBACK. Will you submit to us a statement in writing as to what the problem is and how it has been resolved?

Mr. SOHIER. Yes, indeed.

(The following statement was furnished for the record:)

The problem referred to may be described as follows:

In negotiating with the Australian communications company (Overseas Telecommunications Commission (Australia) —OTC (A)) for circuits between the satellite and the earth station at Carnarvon, Australia, and, separately, with the British company (Cable & Wireless, Ltd.-C&W) for circuits between the satellite and the earth station at Ascension Island, NASA sought to obtain agreement that the circuits would be available for use for the transmission of official messages of any U.S. Government agency, and not solely for NASA traffic. Both companies argued that their agreement to permit such "multipleuse" of the circuits would be contrary to long-standing business practice of their companies, and of all British Commonwealth telecommunications companies. Where multiple use is permitted, normal Commonwealth-company practice is to require the customer to pay a surcharge of about 38% for the lease of the circuit. NASA consistently rejected any proposal that a surcharge be paid.

In negotiating on this point, NASA conceded that its position was taken mainly because it considered that a point of basic principle was involved―i.e.. that the U.S. Government should be treated as being a single customer for the circuits. As a practical matter, it will not in fact be feasible for the circuits involved to be used for transmission of traffic for other U.S. agencies, except possibly under unusual or emergency conditions, because of the requirement for the full time availability of the circuits to meet NASA's operational needs. Both companies have agreed to permit use of the circuits for all traffic, under unusual or emergency conditions, as a reasonable exception to their normal rule against multiple use.

Since the issue involved was recognized on both sides to be more theoretical than real, agreement was reached that it would be unnecessary to resolve it definitively in connection with signing the contracts for the communications services to be furnished by the two companies. It is therefore planned that both contracts will omit any definition of the use which may be made of the circuits for transmission of traffic of U.S. agencies other than NASA. If in the future use of the circuits for such non-NASA traffic (on other than an unusual or emergency basis, which will be permitted) were to become feasible. negotiations will be reopened for the purpose of defining the conditions of use explicitly.

NASA has agreed to this solution of the problem as the best means of resolving the impasse which had developed, and because it is essential that the contracts be signed promptly. NASA has made it clear to both companies that in deferring final resolution of the issue at this time, it has not in any way receded from its position on the point of principle involved. Similarly, it is mutually understood that OCT(A)'s and C&W's agreement to sign contracts without specifically defining the permissible use is without prejudice to their position on the multiple user issue.