Mr. ASHLEY. Well, I think it would have to start as a legislative matter, and then the extent to which it would be delegated to the FCC

Mr. ROBACK. Permissive legislation is obviously for the Congress. But what I mean is, once the permissive legislation were enacted, would it then be a matter for the FCC to review and approve any given structure, reorganization of the industry?

Mr. ASHLEY. I believe the recommendation of the Intragovernmental Committee was that it would be subject to FCC approval, and we would think that that would make for a much more flexible arrangement. They would then be in a position to evaluate any particular proposal that was made.

REQUIREMENT FOR SINGLE SATELLITE RELAY

Mr. DAHLIN. A.T. & T. has conducted the most research, perhaps, and is most concerned about the problem of two-jump satellite communications, relay and echo. Does that enter into your views of the domestic system and satellite proposals for mid-range points, or this kind of problem?

Mr. DUNCAN. It very definitely does. I assume that you are speaking of the synchronous satellite, which is the type that we use now and the type that is generally under consideration, where you have an appreciable delay in a single jump.

Our views on this are that it is not going to be practical to introduce two satellite links using the synchronous satellite in a two-way telephone conversation, that the cumulative delay of two jumps would be so great that it would be objectionable to our telephone customers. Mr. DAHLIN. With military circuits, and circuit discipline, this is not such a large problem?

Mr. DUNCAN. It is difficut for me to judge the requirements of the military in those things. Obviously, if you use the equivalent of the push-to-talk arrangements whereby one person says their piece and then stops and the other persons says it, then there is no particular difficulty.

Mr. ROBACK. What is the consequence for satellite communications service of that position that two-jump service is not acceptable?

Mr. DUNCAN. I think the consequences are that for telephone message service we must make our plans and organize our facilities so that no more than one satellite jump would be on any particular connec

tion.

Now, this satellite jump might be an overseas jump or it might be a domestic one, but not both.

Mr. ROBACK. Does that mean that to make a certain service acceptable, you would have to have more satellites or that you would use cables more?

I am not too clear what the consequences would be.

Mr. DUNCAN. It would mean, in any particular connection, you would have to have-you would limit it to one satellite to jump.

For example, if you were calling overseas via satellite, the domestic facilities on the two ends would have to be on some type of land-line facilities, whether cable, radio, or whatnot, and vice versa.

If you had a domestic satellite to jump, then, on the overseas link, if it was an overseas call, this would be a higher speed facility. Mr. ROBACK. Does that bespeak an integrated switching operation? Mr. DUNCAN. Certainly, it has to be coordinated.

Mr. ROBACK. That is the kind of service that a carrier like yourself would be experienced in providing.

Mr. DUNCAN. Yes. Our plans definitely contemplate that.

Mr. ROBACK. Do you think that Comsat is handicapped in not having that experience?

Mr. DUNCAN. Comsat, of course, is not in the business of providing such overall service. They provide facilities, and this thing I am speaking of

Mr. ROBACK. They provide overall service to the Government, they are proposing to.

Mr. Duncan. They are providing a facility between two ends, and the field I am talking about is the field you get into in providing an overall circuit, and, for example, in this particular item I was speaking of, it would involve switched services, such as ordinary telephone message service.

NATURE OF SERVICES FURNISHED BY A.T. & T,

Mr. DAHLIN. You have a long list of services in exhibit A. Are those, as you understand it, unique, vital and national security-type services?

There is the Joint Chiefs alerting network, BMEWS, Autovon, SAC primary alerting system?

Mr. DUNCAN. This list of services are examples of all the types of services that we furnish to the Federal Government. They are not intended to be a comprehensive list covering everything, but they are some of the special services.

Mr. DAHLIN. And also item 6 is the NASA services.

Are you to be going from the Brewster Flats to Hawaii on that Hawaii link in your application for Pacific satellite circuits? Mr. DUNCAN. That is correct.

Mr. DAHLIN. Was there any question raised with NASA as to whether A.T. & T. was going to offer to provide those services on the Apollo System?

Mr. DUNCAN. I do not know of any question on that.

Mr. DAHLIN. You never raised that question?

Mr. DUNCAN. I have not.

Do you know, George?

Mr. ASHLEY. I do not think there has been.

FUTURE BUSINESS

Mr. DAHLIN. When you talk about "approximate balance" in satellite and cable circuits, are you talking about 50-50 division of backup or alternate links between satellite and cable circuits? That is, when you say you are going to have approximate balance in this kind of service, does that mean you will expect to buy as many satellite circuits as you will have able circuits!

Mr. DUNCAN. You are referring to my exhibit, "C" I believe.
Mr. DAHLIN. Yes.

Mr. DUNCAN. We discussed here in some detail in exhibit C the requirements for satellite circuits, and other types of facilities will vary, the use of them will vary, depending on many factors, and I think you are referring to the transatlantic item there.

Mr. DAHLIN. Yes.

Mr. DUNCAN. Where we use the term, our plan is to diversify transatlantic facilities, to intermix cable and satellite channels, to obtain a reasonable balance.

Mr. DAHLIN. The same in the Pacific?

Mr. DUNCAN. Approximate balance is the term I used in the Pacific. In general, we think that in those areas, particularly in the transatlantic, it will be about 50-50. But these are composites of what we believe will happen country by country, and there are many factors involved in this. We have attempted to outline some of those factors in this exhibit.

Mr. DAHLIN. With respect to the last page of your exhibits, the forecast, you have a large jump in demand predicted between 1975 and 1980. Is that mainly on the basis that you will have availability of both cable and satellite circuits in numbers never heard of before; 1975 is the breakthrough?

Mr. DUNCAN. Actually, the percentage jump is smaller. We anticipate that with increased, better facilities, and increased availability of internal facilities in various countries throughout the world, that we will continue to have a rapid growth in our overall overseas requirements, and, of course, these figures, if you will notice, the increase in satellite circuits between 1970 and 1975 go up at a higher percentage rate than they do between 1975 and 1980, and that merely reflects possibly a little bit of conservativeness on my part in the growth rate that we may get as we reach saturation points at various places in the world.

We think that there is a tremendous field for expansion and that this field will develop as the business in the countries, and the internal communications facilities in the countries improve and as rates come

down.

Mr. DAHLIN. That is all.

Mr. HOLIFIELD. Thank you, Mr. Duncan and Mr. Ashley, for your testimony this morning.

Mr. DUNCAN. Thank you.

Mr. HOLIFIELD. You are excused.

The next witness will be Mr. Howard Hawkins, president of RCA Communications, Inc.

Mr. Hawkins, will you please introduce your associates for the record?

Mr. HAWKINS. Mr. Chairman, on my left is Edwin W. Peterson, who is our vice president and controller, and on my right is Leonard W. Tuft, vice president and general attorney.

Mr. HOLIFIELD. You may proceed with your statement, Mr. Hawkins.

Mr. HAWKINS. Thank you, Mr. Chairman.

STATEMENT OF HOWARD R. HAWKINS, PRESIDENT, RCA COMMUNICATIONS, INC.; ACCOMPANIED BY EDWIN W. PETERSON, VICE PRESIDENT AND CONTROLLER; AND LEONARD W. TUFT, VICE PRESIDENT AND GENERAL ATTORNEY

Mr. HAWKINS. Mr. Chairman and members of the subcommittee, my name is Howard R. Hawkins. I am president of RCA Communications, Inc. I appreciate this opportunity to appear before your committee and to discuss with you the question of providing communications satellite services for the Department of Defense and the national communications system.

I shall endeavor to cover the matters requested in the chairman's letter to me of August 19, 1966.

OPERATING ACTIVITIES

RCA Communications, Inc., is a wholly owned subsidiary of the Radio Corporation of America. It is an international carrier operating a global communications network consisting of a complex of radio, coaxial cable, and satellite channels.

RCA Communications, which, in the interest of brevity, I shall refer to as "RCA," provides international telegram service between the United States and more than 200 overseas points; Telex service to and from 117 points; and leased channel; that is, private line, services with all parts of the world.

RCA also provides facsimile transmission service with 60 overseas points and operates a network of telephone circuits in the Pacific area radiating from Guam and the Philippines. The company provides two-way broadcast program transmission service with most points on the globe. In September 1965, RCA began handling the transmission of live commercial and closed-circuit television programs via satellite between the United States and Europe.

RCA has pioneered many global communications services, including international leased channel service, which was introduced in 1948; overseas Telex service in 1950, and international data Telex transmission service in 1962.

I submit a brochure entitled "RCA Global Communications" containing a network circuit map, so that the committee can visualize the scope of RCA's operating activities.

SERVICES TO THE U.S. GOVERNMENT

RCA radio and cable facilities are used to handle critical military and nonmilitary Government traffic throughout the world, and the services it furnishes to DOD are extensive. We currently provide the U.S. military with a wide range of leased communications circuits in the Atlantic, Caribbean, and Pacific areas. These facilities are used for voice, high-speed data, and conventional teleprinter transmissions. The Pacific cable and radio circuits are vital at this time since they handle traffic critical to military operations in South Viet

nam.

Since the earliest days of Project Mercury, RCA has provided the National Aeronautics and Space Administration with an ever-expanding global network of communications facilities used for U.S. space programs. We also provide long-haul communications facilities for the Weather Bureau, Voice of America, the U.S. Information Agency, and a number of other civil agencies. Included in our current roster of Government services is the radio "Hot Line," which links Washington to Moscow.

We provide leased channels for the U.S. Department of State, which carry diplomatic communications between Washington and U.S. Embassies in other parts of the world. In so doing, RCA is sharing in the responsibility to meet, as Mr. Scott expressed it, the State Department's "basic requirement to communicate rapidly, reliably, and se curely with and between" its diplomatic posts throughout the world. The creation of RCA was itself intimately related to providing! critical service to the U.S. Government. It was the inadequacy of U.S. facilities for international communications during World War I which prompted the U.S. Navy Department, in 1919, to sponsor the organization of RCA. Then, as now, RCA's mission was to provide international communications services for the U.S. Government and the American people in time of both peace and national emergency.

For each of the calendar years 1962 through 1965, the total RCA Communications services to agencies of the Government, including DOD, were, respectively, in dollars and in percentages of its total operating revenue: $4.3 million or 11.6 percent; $4.6 million or 11.1 percent, $5.3 million or 11.9 percent, and $7.8 million or 15.1 percent. For the first 7 months of 1966, comparable amounts were $6.1 million or 18.6 percent. With respect to communications services to DOD for the years 1962 through 1965 and for the first 7 months of 1966, the comparable figures are $2.7, $3, $3, $4.4, and $4 million.

This year, over 98 percent of all services to DOD were in the leased channel service category. The reasons for the increase in RCA's services to the Government in the last 3 years are the growing U.S. space program and expanding U.S. military commitments.

RCA leased channel services are provided on a month-to-mo basis to the U.S. Government. RCA has made substantial investme in communications facilities to provide such services without lo term commitments or other obligations by the U.S. Governmen Since the beginning of 1962, RCA has invested $72.5 million in a tional communications facilities to improve and expand its over communications services, including services for the U.S. Gor ment. RCA has invested in the business substantially more the total profits from communications operations during the same [ RCA's present total assets employed in the communications bi amount to $102 million. It has approximately 3,500 employee ating its global system.

SUMMARY OF RCA POLICY POSITION

RCA has long advocated the establishment of a global co communications satellite system at the earliest practicable d cause of its belief that the role of satellites in our internatio municaions system is growing, RCA acquired 250,000 shar