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It is true Colonel Paschall, when he handed me the official inquiry for these circuits, mentioned that he was also giving the same inquiry to RCAC, ITTWC. HAWTEL, and Comsat. There is no misunderstanding on my part. I will be very happy to meet with you or anyone in your agency on the question of any misunderstanding. Warm personal regards. Sincerely yours.

HENRY G. CATUCCI, Vice President.

WESTERN UNION INTERNATIONAL, INC.,

May 31, 1966. Maj. Gen. GEORGE E. PICKETT, Deputy Director for Defense Communications Agency, Washington, D.O.

DEAR GENERAL PICKETT: Pursuant to your letter of May 2, 1966, Western Union International (WUI) is pleased to submit this proposal to supply up to 10 leased channels to the Department of Defense (DOD) via satellite from Hawaii to each of the following: Japan, Philippines, and Thailand.

The information contained in this proposal, keyed to the letter designations in your inquiry, is as follows:

(a) WUI is willing to assume responsibility for the technical sufficiency of the circuits on an end-to-end basis, pursuant to arrangements of the type illus trated in attachment 1. WUI is also willing to continue its present practice, as situations require, of sending equipment and trained personnel to assist in installing, conditioning, and equalizing the foreign end of the circuits.

(6) WUI is willing to act as DOD's agent in arranging for all of the circuit segments provided by other entities, foreign and domestic. WUI proposes to arrange with domestic entities for the provision of landline circuit segments in Hawaii and transoceanic circuits from the earth station in Hawaii to the satellite. WUI proposes to arrange with foreign entities for their provision of transoceanic circuit segments from the satellite to their respective earth stations in Japan, Philippines, and Thailand, and for the landline facilities connecting to the specific points abroad, as specified by DOD. As DOD's agent. WUI will order each of the aforementioned circuit segments, will bill DOD monthly, and will take all possible steps to maintain the continuity, quality, and reliability of these circuits, end to end.

(c) Attachment 1 contains an illustrative technical description of the methods proposed to satisfy DOD's requirements. WUI proposes to meet DOD's specified service date and specified circuit quality and reliability, assuming the timely availability in satisfactory operational condition of the Pacific satellites, the satellite earth stations at the required points, and the necessary connecting landline facilities.

(d) Estimated monthly recurring per circuit charges from Hawaii to each of the respective points in Japan, Philippines and Thailand, as specified in your inquiry, are as follows:

(1) Japan-$23,695.40.
(2) Philippines-$23,226.65.

(3) Thailand—$23,695.40. There is also an estimated nonrecurring service connection charge in Hawaii in the amount of $25 per circuit applicable to circuits to each of the above three countries. All of the above monthly per circuit charges include the sun of $195.40 for landline facilities in Hawaii. The charges relating to (1) Japan and (3) Thailand each include the sum of $12,500 as estimated to apply to the foreign transoceanic circuit segment. As the agent of DOD, WUI will pay the estimated $25 nonrecurring charge, the estimated $195.40 and $12,500 monthly recurring charges and will bill these amounts to DOD. With respect to (2) the Philippines, pursuant to existing practices, WUI will file with the Federal (ominunications Commission the estimated through monthly recurring charge in the amount of $23,226.65. With respect to (1) Japan and (3) Thailand, at an appro priate time WUI will file with the Commission the estimated $11,000 monthly recurring charge which covers the transoceanic circuit segment from the satellite station in Hawaii to the satellite. These charges will be filed with the Commis sion pursuant to the law together with explanatory supporting ratemaking crie teria. WUI will rely upon established rate criteria and will forward to you copies of the material when filed with the Commission.

(c) WUI can obtain the necessary terrestrial and satellite facilities in Hawaii from the entities authorized to supply them to authorized common carriers. WUI can supply circuits to the Philippines in conjunction with its foreign correspondent there. WUI is taking steps looking to supplying circuits to Japan and Thailand in conjunction with the communications entities in those countries.

WUI believes that it can supply the required services on or before April 1, 1967, on a 24-hour-per-day basis at 99.5 percent reliability to meet schedule 4B alternate voice/data quality or equivalent CCIR standard. Of course, this belief is predicated upon many factors beyond WUI's control. For example, the following are presumed: (1) the timely launch of one or more satellites over the Pacific in a satisfactory operational condition; (2) the timely establishment of the required satellite earth stations in satisfactory operational condition; (3) the timely establishment of the required terrestrial facilities in satisfactory operational condition; (4) top priority accorded DOD circuits to obviate preemption for satellite television transmission; and (5) the necessary governmental approvals, both domestic and foreign. Aside from the technical conditions (1) through (3), please be assured that WUI will do everything within its power to consummate conditions (4) and (5) in a manner consistent with DOD's requirements.

Rate quotations at this particular time are extremely difficult because satellite costs are not yet firm. Neither Comsat's proposed charges to WUI nor the International Communications Satellite Consortium's charges to Comsat have been fixed. Charges for the foreign segments of the satellite circuits are not yet firm; and as a matter of fact, satellite costs applicable to the foreign segments might increase sixfold if transportable satellite earth stations are utilized initially at the foreign service points specified by DOD. In view of this situation and since the service commencement date is approximately 1 year from now, WUI respectfully requests the opportunity to supplement or amend this proposal from time to time as relevant developments occur.

The continued award to WUI of circuits under the DOD apportioninent policy, via both satellite and cable, will enable WUI to offer such circuits to DOD at the lowest reasonable charges consistent with the requirements of applicable laws. Sincerely yours,

HENRY G. CATUCCI, Vice President.

ATTACHMENT I

TECHNICAL CAPABILITIES

1. ABILITY TO MEET SERVICE DATES

Western Union International is able to install, condition, and turn up for service alternate data voice (ADV)circuits in as short a time as 4 days. A case in point is ADV circuit WU100016/GDA 30169, Sunnyvale-Mahea Point Tracking Station, Hawaii. The order for this circuit arrived at WUI Engineering at 3 p.m. of a Friday afternoon and the fully conditioned 4B circuit turned up for service on the following Monday on time.

Under normal conditions, the ability of a carrier to meet required service dates depends upon the following:

(a) Availability of trained personel at field stations. (0) Availability of equipment at field stations.

(c) Willingness of the carrier to absorb the cost of early turnup of facilities in order to properly engineer the circuit requirements.

WUI has eliminated the need for the presence of special engineering personnel from New York to provide conditioning on this type of circuit. This company has undergone an extensive training program of station personnel which has paid off in the time and costs required for the activation of ADV circuits. In addition, the Honolulu office serves as a source of trained personnel for work in isolated areas of southeast Asia, eliminating half the traveltime previously required for personnel from New York.

Each of the major WUI stations operating in the Pacific maintains sufficient operating spares to allow for any rapid installation as may be required. Certain items of special service equipment may require shipment from headquarters, but conditioning equipment, signaling and echo suppressor units, and ringing converter equipment are all provided at field locations.

It is normal practice, at WUI, to turn up all segments of ADV circuits a minimum of 2 weeks prior to the activation date. Prior to this 2-week period, all circuit engineering is performed, allowing a full 2 weeks for installation.

2. RELIABILITY

Reference is made to monthly NASCOM reports which give objective reliability figures on circuits provided by all carriers.

WUI maintains a lease control desk at its headquarters in New York. This facility serves as a master circuit control for all WUI leases, Government and commercial, and is tied via order wires to all our overseas offices and the central offices of interconnecting carriers. Engineering assistance is available, at a moment's notice, at any time to the overseas stations via the order wire facilities.

8. TECHNICAL METHODS

Transmission planning for international circuits is not as straightforward as the domestic case simply because of the number of carriers involved and the different conditioning standards each has established. In general, one can divide any of these circuits into three portions, two landline portions and the transoceanic section. The limits to which any of these is conditioned is dependent upon the type of channel bank equipment and the ability of currently available conditioning equipment to meet their characteristics. It is the practice at WUI to assign tighter limits to 4KC domestic carrier sections and loosen up on the more difficult 3KC carrier normally found on submarine cable. The use of 4KC equipment on satellite channels will provide even greater margin over the conditioning attainable over coaxial cable.

The conditioning equipment primarily utilized is the WUTELCO 10492C or WUTELCO 11727A active delay equalizer. Figure 2 demonstrates the ability of the 10492C to condition two sections of L carrier.

In some cases, the international carrier must equalize over and above conditioning provided by the domestic carriers. This is due to the fact that the tightest conditioning spec available from the domestic carriers does not always fit the transmission plans for an overall 4B circuit. An example of such a case is shown in figure 1, a four-section circuit from Greenbelt to Sydney, Australia. The 4B switch quality domestic portion required further refinement in order to meet the overall 4B requirement.

A newer version of the 10492C, the 11727A, is able to condition a 3,500 microsecond delay characteristic to better than 1,000 microsecond. This equipment, recently available, is well suited to 3KC carrier segments as well as the domestic 4KC carrier. In addition to this equipment, WUI utilizes, where circuit requirements warrant, specially designed passive delay equalizers.

(Two pages of data omitted.)

WESTERN UNION INTERNATIONAL INC.,

June 3, 1966. Maj. Gen. GEORGE E. PICKETT, Deputy Director for Defense Communications System, Department of Defense, Washington, D.C.

DEAR GENERAL PICKETT: This is in clarification of our letter to you of Mar 31. 1966, regarding your inquiry of May 2, 1966, inviting proposals for leased channels from Hawaii to Japan, the Philippines, and Thailand. This clarification is submitted in response to a telephone inquiry from an officer of DCA on this date and will confirm the telephonic explanation given to him by an official of this company from New York.

Please consider as deleted the last sentence in the penultimate paragraph of our May 31 letter which reads as follows:

In view of this situation and since the service commencement date is approxi. mately 1 year from now, WUI respectfully requests the opportunity to supplement or amend this proposal from time to time as relevant developments occur.

WU'I confirms all of the estimated per circuit charges specified on page 2 of our letter of May 31. These estimated charges are submited subject to certain conditions, as explained below. The estimated charges for circuits from Hawaii to Japan are subject to

(a) Approval by the Federal Communications Commission of the services, charges, divisions of tolls between WUI and the overseas correspondent, and of the collection and settlement rates;

(6) The availability of a fixed satellite earth station, as distinguished from a transportable station on or about April 1, 1967; and

(c) Finalization of an operating agreement between WUI and the communications operating entity in Japan on or about, or prior to, April 1, 1967. The estimated charges for circuits from Hawaii to the Philippines are subject

(a) Approval by the Federal Communications Commission of the services, charges, divisions of tolls between WUI and the overseas correspondent, and of the collection and settlement rates; and

(b) The availability of a fixed satellite earth station, as distinguished from a transportable station on or about April 1, 1967. WUI takes full cognizance that as of this date no entity has been authorized or franchised to construct a satellite earth station in the Philippines. The estimated charges for circuits from Hawaii to Thailand are subject to

(a) Approval by the Federal Communications Commission of the services, charges, divisions of tolls between WUI and the overseas correspondent, and of the collection and settlement rates;

(b) The availability of a fixed satellite earth station, as distinguished from a transportable station on or about April 1, 1967; and

(C) Finalization of an operating agreement between WUI and the communications operating entity in Thailand on or about, or prior to, April 1,

1967. Thank you for contacting us and giving us the opportunity to submit this letter. Sincerely yours,

HENRY G. CATUCCI, Vice President,

COMMUNICATIONS SATELLITE CORP.,

Washington, D.C., June 22, 1966. Mr. ROBERT E. Conn, Vice President, Western Union International, New York, N.Y.

DEAR MR. CONN: Reference is made to our letter of May 13 in which you were advised that Comsat is expecting to propose a rate for service to interested common carriers of $48,000 a year per half circuit for the Hawaii earth stationto-satellite portion of two-way voice circuits between Hawaii and Japan, Hawaii and the Republic of the Philippines, and Hawaii and Thailand. You were advised in that letter that this figure could change as determinations of cost are refined, in which case you would be notified.

This is to inform you that, as a result of its cost refinements, Comsat now plans to propose to authorized carriers a rate of $45,600 per year ($3,800 per month) for each of the above-mentioned two-way voice circuits between Hawaii and the satellite.

In order that you may be in a position to evaluate the significance of this change with respect to the submission you may have made in response to DCA's request for service to the Far East, this is to advise you that, in submitting its response to DCA's request, Comsat based its submissions on the same rate material as was used in arriving at the previous quotation to the carriers of $48,000 per annum, and the rate quoted to DCA was higher than the $48,000 which was quoted to the carriers. Very truly yours,

GEORGE P. SAMPSON,
Vice President, Operations.

WESTERN UNION INTERNATIONAL, INC.,

Washington, D.C., June 24, 1966. Maj. Gen. GEORGE E. PICKETT, Deputy Director for Defense Communications System, Department of Defense, Washington, D.C.

DEAR GENERAL PICKETT: This refers to your recent inquiry regarding 10 leased channels for the Department of Defense via satellite from Hawaii to each of the following: Japan, Philippines, and Thailand.

Since last contacting you regarding this matter, two significant developments have occurred. On June 22, 1966, we were advised by the Communications Satellite Corp. of a downward revision in its estimated charges to us for satellite circuits in the Pacific. On June 23, 1966, the Federal Communications Commission announced that Comsat may furnish satellite services and channels only to authorized common carriers, including Western Union International, except in unique circumstances.

In view of these developments, we respectfully request that you reopen the matter of the 30 Pacific satellite circuits and extend to Western Union International the opportunity to submit revised quotations for these circuits.

Western Union International is now reviewing its rate schedules in line with the directive of the Commission, contained in its June 23 announcement, and in line with the information received from Comsat on June 22, concerning reduced satellite circuit costs to us. We fully expect to develop attractive rates for the Department of Defense. In addition, we wish to take every step available to us in order to qualify for our apportionment of your oversea circuits under the DECCO apportionment policy.

Accordingly, we respectfully request that we be accorded the opportunity to submit revised quotations for the 30 Pacific circuits. Such quotations could be submitted on or before July 6, 1966, if this meets your approval. Sincerely yours,

HENRY G. CATUCCI.

DEFENSE COMMUNICATIONS AGENCY,

Washington, D.C., July 1, 1966. WESTERN UNION INTERNATIONAL INC., Washington, D.C. (Attention Mr. H. G. Catucci, Vice President).

DEAR MR. CATUCCI: Your response to our May 2, 1966, request for a proposal to provide certain communications services in the Pacific ocean area has been evaluated together with those received from the other carriers. No revision to your proposal was submitted in response to our offer of June 13, 1966, to allow a revised price quotation by June 17, under the provisions of ASPR section 3–805.1. However, your request of June 24, to be allowed to submit revised price quotations was carefully considered.

After evaluation of all the above, the Department of Defense has concluded that the carrier whose proposal offers the greatest advantage to the Government and affords the greatest assurance of providing the earliest possible service is the U.S. Communications Satellite Corp. (Comsat). The Department of Defense intends, therefore, to initiate immediately negotiations to definitize a contract with Comsat.

The Defense Commercial Communications Office contracting officer will provide separately the information to unsuccessful offerors required by ASPR 3.508(b).

Your timely response to our request for proposal for these urgently needed services is greatly appreciated. Sincerely,

GEORGE E. PICKETT,

Major General, USA, Deputy Director for Defense Communications System.

WESTERN UNION INTERNATIONAL, INC.,

July 13, 1966. Re Code 350. Maj. Gen. GEORGE E. PICKETT, Deputy Director for Defense Communications System, Department of Defense.

Washington, D.C. DEAR GENERAL PICKETT: This refers to your letter of July 1, 1966, in which you advised as follows:

"(T) he Department of Defense has concluded that the carrier whose proposal offers the greatest advantage to the Government and affords the greatest assurance of providing the earliest possible service is the U.S. Communications Satellite Corp. (Comsat). The Department of Defense intends therefore to initiate immediately negotiations to definitize a contract with Comsat."

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