Effective liaison can best be accomplished in the context of the ordinary day-to-day contacts between Comsat and its potential customers rather than through the formalistic machinery of an industry committee. Accordingly, for the reasons indicated above, we fined no merit in WUI's suggestion. Yours very truly, JOSEPH V. CHARYK. RCA COMMUNICATIONS, INC., April 6, 1966. Mr. BEN F. WAPLE, Secretary, Federal Communications Commission, DEAR SIR: This is in reply to your letter of March 9, 1966 (reply reference 9120) requesting comments on the proposal of Western Union International, Inc., for the establishment of an industry committee under the aegis of the Commission for the purpose of creating effective liaison between Communications Satellite Corporation and the U.S. international carriers. Current and complete information with respect to satellite communications developments and Comsat's plans is, of course, essential to enable the international carriers to plan effectively and to satisfy additional requirements for communications services. Comsat's program and plans must be integrated with those of the international carriers if we are to promote the maximum development and use of satellite communications. We believe that Comsat has a unique responsibility to make such information available to the international carriers because of its special role in the development, establishment, and operation of the communications satellite system. It would also be to Comsat's advantage to provide such information to the international carriers and thereby encourage them to make the maximum use of its services and the new technology. In the past there have been times when liaison was effective between Comsat and the international carriers. During negotiation of the consortium agreements in 1964, Comsat regularly briefed the international carriers on the progress of the negotiations, and opportunity was afforded for the exchange of views. This was helpful and contributed to the total effort. Recently, Comsat briefed the industry generally on certain plans with respect to the establishment of a global system. It has been our experience, however, that others have had more complete and current information at times than we have had with respect to Comsat's program and plans for satellite communications. Presently there are three international carriers which have representatives who are members of the Board of Directors of Comsat. To the extent that they receive knowledge of Comsat's plans and program that is not equally furnished by Comsat to the other international carriers they are of course in a preferred position and have competitive advantages. These advantages are likely to become more severe as Comsat proceeds with its program and implementation of its plans on a global scale. An industry liaison committee could be helpful in neutralizing such advantages, but it would not itself meet this problem. Instead, it will be necessary for Comsat to make available to all international carriers the same information now given to certain international carriers and operating agencies with respect to its program and plans for satellite communications. Cooperation in this manner would avoid a question of discrimination and promote satellite communications in the national interest. Though the establishment of such a committee could result in better liaison between Comsat and the international carriers, the effectiveness of the committee would depend on its nature and functions. Comsat's full cooperation also would be required. While such a committee would not adequately meet the problems as indicated above, we desire the opportunity to participate in any liaison committee under the aegis of the Commission. We assume that establishing a committee of this nature would not inhibit or displace individual liaison between Comsat and the international carriers wherever necessary and desirable. Very truly yours, LEONARD W. TUFT. HAWAIIAN TELEPHONE CO., April 13, 1966. Mr. BEN F. WAPLE, Secretary, Federal Communications Commission, DEAR SIR: This is in reply to your letter of March 9, 1966 (reply reference 9120) requesting comments on the proposal of Western Union International, Inc., for the establishment of an industry committee under the aegis of the Commission for the purpose of creating effective liaison between Communications Satellite Corporation and the U.S. international carriers. We agree that there should be a closer rapport between Comsat and the international carriers but we believe this can be accomplished without the creation of a formal committee. If Comsat will follow a policy of briefing the international carriers on satellite communications developments and plans prior to taking a final position and submitting concrete proposals to the FCC, WUI's objective. with which we concur, should be attained. Very truly yours, Mr. BEN F. WAPLE, nicati D. S. GUILD. WESTERN UNION INTERNATIONAL, INC., June 1, 1966. Secretary, Federal Communications Commission DEAR MR. WAPLE: On March 9, 1966, the Commission addressed letters to interested parties inviting them to comment upon the suggestion by Western Union International, Inc., for the establishment of an industry committee under the aegis of the Commission for the purpose of creating effective liaison between the Communications Satellite Corporation and the U.S. international public service carriers. WUI has obtained copies of responses to the Commission's letter from ITT World Communications, Inc., dated March 22, 1966, from American Telephone & Telegraph Co. dated March 29, 1966, from Comsat dated March 29, 1966, from RCA Communications, Inc., dated April 6, 1966 and from Hawaiian Telephone Co. dated April 13, 1966. All of the foregoing respondents agreed with WUI's objective of obtaining an effective liaison between Comsat and the public service carriers. Both A.T. & T. and Hawaiian desire a "closer rapport" between Comsat and the international carriers. RCA agreed that the suggested industry committee could result in "better liaison;" and ITT stated that such a committee would serve "a most useful purpose." However, only Comsat professed to "find no merit” in WUI's suggestion. Comsat indicated its belief that an industry liaison cómmittee was unnecessary and pointed to a meeting held by Comsat to which the international public service carriers were invited. This meeting, which was held on March 4. 1966, was an outgrowth of WUI's suggestion according to our information. WUI appreciates being invited to this meeting but fails to comprehend how this isolated occasion demonstrates effective liaison. Effective industry discussions in depth are inhibited unless conducted pursuant to regulatory sanction. Creation of an industry liaison committee under the aegis of the Commission would not only facilitate a meaningful exchange of information and a thorough exploration of industry problems, but also would enable the Commission to stay abreast of industry developments in order to discharge its responsibilities under both the Communications Act of 1934 and the Satellite Act of 1962. WUI first proposed the establishment of an industry liaison committee on January 4, 1965 in "Comments" filed with the Commission in its satellite earth station proceeding. WUI has consistently called for the creation of such a committee in nearly every pleading filed with the Commission relating to satellite matters. Such a committee would facilitate greater cooperation in satellite matters by all communications entities, promote optimum utilization of satellite channels and redound to the benefit of the public. Without this committee, the international public service carriers are unable to stay abreast of satellite developments. are not in a position to intelligently negotiate with their overseas correspondents who are much better informed regarding satellite programs, and are unable to plan effectively for future satellite and cable coordination. The Commission has expressed in its satellite earth station decision of May 12, 1965, its "expectation" that there would be "appropriate liaison, consultation, and coordination between Comsat and the carriers" and that the "carriers will be able to contribute their knowledge and experience" toward the successful operation of the satellite system.1 Moreover, the Commission did "recognize that the interest of the communications carriers who will use the system to serve the public requires close coordination with their foreign correspondents." " Such coordination will be ineffectual unless the U.S. public service carriers are well informed regarding satellite matters. There has not been an effective liaison between Comsat and the public service carriers contrary to the Commission's "expectation" of 1 year ago. Experience has corroborated the views of Commissioners Hyde and Lee that "there can be no real and substantive contributions (to satellite communications) by the carriers but only shadowy and relatively minimal expectation of consultation as a matter of grace." The time has now arrived for the Commission to take affirmative steps to fill the existing void in satellite and cable planning and coordination by the establishment of the industry liaison committee as proposed by WUI. The Commission is respectfully requested to establish under its aegis an industry committee for the purpose of: (a) creating effective liaison between Comsat and the U.S. international public service carriers; and (b) enabling the Commission to stay abreast of industry developments in order to discharge its responsibilities under both the Communications Act of 1934 and the Satellite Act of 1962. This letter may be considered as an informal request for action, pursuant to section 1.41 of the Commission's rules or as a formal request for action, whichever suits the convenience of the Commission. Nineteen copies of this letter are filed herewith and copies are being served upon all respondents to the Commission's letter of March 9, 1966, which invited comments upon WUI's suggestion for the establishment of an industry liaison committee. Very truly yours, INDUSTRY LIAISON PROCEDURE ROBERT E. CONN. Mr. ROBACK. Mr. Gallagher, does the Defense Department have an industry committee in making allocations? Mr. GALLAGHER. In making allocations? Mr. ROBACK. Yes. Ordinarily where the matter of distributing Government business among a number of competitors is concerned, the Government would have some kind of an industry committee trying to be sure that the decisions were generally fair and in accord with the industry positions. Mr. GALLAGHER. Golly, Mr. Roback, I do not know of any industry committee. All I know is this, that DCA, under established practice, has sent us out bids and asked us whether or not we can provide the service. We have responded as, I assume, the other carriers contacted respond. We tell them what our rates are and whether we can meet their service dates, and if we are all alike, and most of the time we are all alike, I would say most of the time the DCA, under their fair apportionment policy, does then, in fact, distribute the circuits accordingly. Mr. ROBACK. In other words, you state in your testimony that you are satisfied with the allocation procedure, and it must be an allocation procedure which is well developed as a mechanical proposition. But ordinarily, an agency of the Government dispensing millions of dollars among the industry would have an industry committee to help iron out any problems or to mediate any conflicts that might arise. 1 Proposed global commercial communication satellite system, 38 FCC 1104, 1114 (1965). 2 Id. at 1113. 3 Id. at 1124. Mr. GALLAGHER. Well, I say this, I do not know of any formal committee, but I do know that our vice president in Washington, Mr. Catucci, and the representatives of the other international carriers are meeting constantly with DCA, and if there are any such problems as this, I am sure it is discussed at that level. I have never really heard any particular disputes or problems arising with the apportionment policy of DCA. Mr. ROBACK. The reason I raise the question is that if they had such a committee, possibly it could perform the functions you suggest for a liaison committee for Comsat. Mr. GALLAGHER. Yes. Mr. ROBACK. The burden of your proposal is that relationships with Comsat have been not altogether satisfactory, at least so far as your carrier is concerned; is that right? Mr. GALLAGHER. There is no question about that, Mr. Roback. That is certainly true. Mr. ROBACK. Comsat on its side says your proposal lacks merit because they believe that relationships with the carriers have been satisfactory. Mr. GALLAGHER. Well, all I can say to you, Mr. Roback, is this, that I did not see any industry meetings, I did not see any briefings, until I started to press the point for the last 18 months suggesting an industry liaison committee. BRIEFING BY COMSAT Mr. ROBACK. Mr. McCormack said that he, at an early stage in the proceedings, was constrained to read in the industry. That is to say, because everybody in the industry is not represented on the board of directors of Comsat, Mr. McCormack wanted to be sure that he was not only conveying information to the industry representatives on the board, but to the industry generally. In fact, there were briefings with the industry, in the first instance, I believe, back in March. to convey the results of their exploratory team effort with foreign entities regarding these 30 circuits. Did you participate in that? Mr. GALLAGHER. Oh, yes, indeed. Since Mr. McCormack has come on to the scene there have, in fact, been a few. Mr. ROBACK. There has been some improvement. Mr. GALLAGHER. There has been some improvement, but certainly far from satisfactory, and I have heard conversation, and I have read testimony here, about this so-called briefing on March 1 or 3, whatever the date was, by Mr. McCormack after his team came back from the Pacific, and the implication has been left in the record, that the carriers were informed as to the progress he was making with respect to setting up these particular ground stations there in the Pacific. Insofar as I was personally concerned, this is not so. Mr. HOLIFIELD. Were you there? Mr. GALLAGHER. No, sir; I was not there, but I stayed Mr. HOLIFIELD. Did you have a representative there? Mr. GALLAGHER. Yes, I had two or three representatives there, and I stayed rather close to the subject matter, and I could tell you that the briefing was "Yes, we are moving along, we are trying to get ground stations established," and so forth and so on, but never for one moment did I ever know or did I ever think that Mr. McCormack's group was in the Pacific establishing ground stations or making arrangements or making deals with the various entities abroad for offering a rendering of the service on their own behalf. Mr. ROBACK. What meeting are you referring to? Mr. GALLAGHER. March 1-March 4, is it? Mr. ROBACK. Early March. Mr. GALLAGHER. Early March. Mr. ROBACK. A meeting which reported on their exploration. You thought what, that they were developing candidates for the consortium? Mr. GALLAGHER. That is right, as they had developed in the past, for example, when they go to the United Kingdom and talk to the British Post Office or the French about setting up a ground station, and so forth and so on, and I would say, "Good going, fine. Let us get this global communications system off the ground. But I certainly had no idea Mr. ROBACK. You found they were doing a little selling on the side. NOTICE OF 30-CIRCUIT PROCUREMENT Mr. GALLAGHER. That is right. You know what I found out really, I found out on a trip I was making through the Pacific-this was in April-and I suddenly tried to get on the wire and call our office back in New York and ask what is going on because everywhere I went in the Pacific, everybody was telling me about the 30 circuits. Mr. ROBACK. In other words, you were the only fellow who did not know what was going on. Mr. GALLAGHER. Oh, no. On the contrary, we knew the 30 circuits were going on, but certainly we did not know the extent to which the arrangements had been made because we did not at that particular time have a correspondent, for example, in Japan. Mr. ROBACK. When did it come to your attention that 30 circuits were in the works? Mr. GALLAGHER. Thirty circuits in the works I would say probably some time around, for the first time I began to get a wind of it probably some time around, the beginning of February, the second week of February, somewhere around there. But I did not, nor did we, make any particular approaches either to Comsat or DOD as to this or that should not be done. We were not in it at that particular point, no, sir. Mr. ROBACK. Did you at any time before a solicitation came to you under date of May 2 by the DČA, go to the DCA or anybody else and inquire as to whether you could perform that service? Mr. GALLAGHER. Oh, yes. I believe there were some local contacts on that point. Mr. ROBACK. You mean your office here in Washington made some contact? Mr. GALLAGHER. That is right. Mr. ROBACK. When was that, what month? Mr. GALLAGHER. It is hard for me to place it in point of time. I would guess it probably might be some time in March, sir. Mr. ROBACK. In March. Mr. GALLAGHER. In March, yes. |