NASA's requirements. ITT is prepared to assume full responsibility for the successful implementation of this plan by early 1969. Segments between the U.S., Antigua and Ascension Island will be available for service in 1968. NASA's requirements for communications in the area served by the planned cable system are such that they will exceed the capacity of the cable. We propose under this plan that certain of the requirements will be assigned to the new cable system while others will be handled via communications satellites as indicated on the attached layout. We have made a selection of circuits to be assigned to the cable and to the satellite facilities. This selection is, of course, a matter for further discussions. We are transmitting herewith quotations of annual costs to NASA for those services to be provided over the cable. These costs are to be treated as budgetary for planning purposes only. We will furnish firm costs as soon as we resolve the complexities due to the international nature of the end-to-end system. Satellite channel costs are not furnished at this time. The cable system as presently planned will interconnect at Puerto Rico or the U.S. Virgin Islands to a new 720 channel submarine cable which will be jointly implemented by ATT and ITT. At the eastern end, it will connect at Ascension Island with the new 360 channel cable system between Capetown and Lisbon. There may be two landing points between Puerto Rico to Ascension-one definitely at Antigua and another possibly at either Surinam or Fernando de Noronha. The proposed cable system will have a capacity of 160 voice grade channels. The annual rentals quoted below are based on the above cable capacities, i.e. utilizing the 160 channel cable between Puerto Rico (or Virgin Islands) — Antigua-Ascension. If we were to install a cable of 360 channels in these sections, the rentals would be somewhat lower. However, there would be a resultant delay of 20 to 24 months, which we propose to avoid by going ahead with the 160 channel project. The satellite ground stations will be established at Puerto Rico for which we expect to submit an application to the FCC in the near future, and at Ascension Island. We have initiated discussions with the British authorities regarding the establishment of such a ground station at Ascension. It is planned to interface the submarine cable channels and satellite channels through appropriate switching and patching arrangements. This will open up extensive back-up capabilities which, however, have not been considered in this initial plan. The following information should be helpful in establishing an understanding regarding the services offered. These terms apply to the cable system only: A. GENERAL TERMS (a) ITT will make available to NASA frequency bandwidths and channels bewteen the following points: United States-Antigua, 120 KC bandwidth. United Sates-Madrid, 120 KC bandwidth. United States-Ascension, 6 AVD, 2 TTY channels. United States-Canary Islands, 6 AVD, 2 TTY channels. United States-Johannesburg, 4 AVD, 6 TTY channels. (b) NASA shall have unrestricted operational use of such frequency bandwidth employing its own terminal equipment providing such use shall not interfere with, or impair service of any circuits of ITT or other cable users or cause damage to their plant, impair privacy of communications of circuits of ITT or such other users or create hazards to the employees of any of them or the public. NASA shall bear the cost of any additional apparatus reasonably required to be installed because of the use of the frequency bandwidth by NASA. (c) It is intended that, in the event of partial interruption of service between the U.S. and the distant termination, upon demand, NASA would enjoy priority of use in the remaining capacity up to the equivalent of the contracted bandwidth. The level of priority would be subject to agreement between NASA and other government agencies who may have similar bandwidth in this cable system. (d) Bandwidth facilities would be subject to initial 10-year lease contracts, renewable for sucecssive 1-year terms thereafter. Individual voice/data and TTY channels would require no contracts other than the usual ones specifying monthly rates. B. PAYMENT BASIS We propose the following payment plans, which include the cost of operations and maintenance applicable to the submarine cable channels and bandwidths. Land haul charges are not included. Please consider these figures as preliminary for budgetary purposes only. 1 This rate applies only to the U.S.A.-Ascension section of the Madrid circuit. for the Ascension-Madrid section will be quoted as soon as feasible. Rate 2 Not quoted due to proposed routing via satellite; price will depend on satellite rates still to be determined. The production of the cable system has been initiated in order to meet the proposed schedule. We would appreciate a firm indication of intent by NASA by the end of August 1965 to permit us to finalize our planning. Very truly yours, G. S. MAUKSCH, Director of Planning. ITT WORLD COMMUNICATIONS INC., New York, N.Y., September 9, 1965. Mr. JAMES E. WEBB, Administrator, National Aeronautics and Space Administration, DEAR MR. WEBB: I thought you would be interested in our letter to General Starbird in connection with NASA communications requirements. We are desirous of avoiding any delay to the Apollo program. Very truly yours, B. B. TOWER. ITT WORLD COMMUNICATIONS INC., Lieut. Gen. ALFRED D. STARBIRD, Manager, National Communications System, DEAR GENERAL STARBIRD: Recently the National Communications System made a request to the Communications Satellite Corporation for a proposal to supply communications channels via satellites from the United States to Ascension Island, the Canary Islands and Carnarvon, Australia, as well as to three tracking ships to serve communications needs of the National Aeronautics and Space Administration in the course of its Apollo program. It would appear from this action that NCS is proceeding in this procurement on a "sole source" basis. It is urged that the public interest does not require, indeed, would be ill served by "sole source" procurement in this instance. Pursuit of this procurement technique would deny the government the assurance that the procurement is made to its best advantage. To the end of gaining such assurance, it is urged that the procedures for negotiated procurements set forth in the Armed Forces Procurement Regulations (ASPR Sec. 3-101) and the NASA procurement regulations (Part 3.102) be followed. Those procedures contemplate that when a procurement is by negotiation, price quotations, supported by statements and analyses of estimated costs or other evidence of reasonable value, be solicited from the maximum number of qualified sources. ITT World Communications Inc. believes that it is uniquely qualified to provide the communications channels needed by NASA, and hereby proposes to fulfill such needs on an annual lease basis. It is requested that the same information and schedules supplied to Comsat be furnished to ITT World Communications Inc. so as to permit us to develop a firm cost quotation. As you know, ITT World Communications Inc., as an international common carrier, for many years has been and is furnishing to various agencies of the United States Government, including NASA, leased channels for record, data and alternate voice data communications, as well as other common carrier communication services. These facilities and services are being provided over all types of existing communications media, including very high frequency, ultrahigh frequency, high frequency radio and submarine cables. We are confident that as a common carrier, we can provide essential overall systems operating services more reliably, more expeditiously and at lower costs, as a result of our long standing experience as an operating company in establishing conditioned and tested user-to-user configurations over a variety of communications media, and as a consequence of long term relationships with foreign communications entities evolved over the years in the course of day-to-day operation of communications systems. We believe that our extensive experience over half a century in rendering such services can provide valuable benefits to those who wish to use new communications media such as communications satellites for the purpose of establishing a dedicated international communications network. In requesting that ITT World Communications Inc. be given an opportunity similar to that afforded to the Communications Satellite Corporation to submit a proposal covering the aforementioned communications requirements of NASA, we are confident that as a common carrier, we are better qualified to meet overall systems requirements, and that neither shortness of time nor other factors justify a "sole source" procurement from Comsat. Comsat is bound by statute to provide equal access to satellite communication channels to all communications carriers as that term is defined in the act, and hence, its partial ownership and the control over such resources which such ownership would otherwise imply is not a basis which will support sole source procurement from it. It must be noted that the Federal Communications Commission has pending before it a special inquiry entitled "On the Matter of Authorized Entities and Authorized Users under the Communications Satellite Act of 1962" (Dkt. No. 16058). Only the FCC is statutorily empowered to authorize Comsat to provide commercial services. One of the issues to be resolved by the Commission in the course of disposing of this pending matter is whether Comsat should be authorized as a matter of sound regulatory policy to deal directly with governmental agencies such as NASA. It would appear that neither the inquiry nor this particular issue will be resolved within a time frame needed to meet the communications requirements of the Apollo program. On the other hand, as noted above, communications common carriers such as ITT are presently clearly authorized by the Satellite Communications Act to proceure channels from Comsat. Hence, to assure the procurement of these channels on a timely basis and avoid the delays inherent in regulatory proceedings, it is necessary to procure them from a communications common carrier. Even though we are not in possession of the full set of data provided to Comsat, we have developed tentative plans as to the facilities, arrangements and services which ITT World Communications Inc. will supply to fulfill the requirements. These facilities, arrangements and services include, among other important items to be detailed in our full quotation, the following: (1) ITT World Communications Inc. is in a firm position to establish arrangements with foreign entities which are planning to operate ground station facilities on Ascension Island, the Canary Islands and Carnarvon, Australia. ITT World Communications Inc. is further in a position to provide channel terminations at the east and west gateways to the United States and to secure channels from the gateways to the communications satellite from Comsat and from the International Consortium, thus assuming overall systems management, and providing one point of responsibility for NASA in an end-to-end, user-to-user communications network. We are informed that Comsat is prepared to launch the necessary satellites as part of the international global system contemplated by the Communications Satellite Act of 1962, and that it is confident that the Interim Committee of the International Consortium will approve this venture. We have received assurances from the governmental entities which will own and operate the ground station facilities on foreign territory that they will cooperate with us fully in the establishment of a communications network for NASA. As noted above, Comsat is required by statute to afford communications common carriers nondiscriminatory access to such a satellite system, and ITT World Communications Inc. is prepared to seek FCC authorization to acquire such channels on an expedited basis. (2) ITT World Communications Inc. is in a position to establish alternate communication channels through submarine cable facilities for backup use or a primary basis. These channels will link Puerto Rico, Antigua and Ascension Island, and interconnect at Ascension Island with the South Africa-Ascension Island-Cape Verde-Canary Islands-Lisbon cable system recently announced. As you may be aware, the United States Air Force is presently planning to utilize this projected cable system to obtain a large bandwidth between Antigua and Ascension Island to satisfy missile range requirements for both the United States Air Force and NASA. (3) ITT World Communications Inc. plans to establish an earth station at Puerto Rico, subject to FCC authorization. Puerto Rico at present is linked with the United States mainland by means of two submarine cable systems and a projected third system is planned for operation late in 1967. Puerto Rico, of course, will be a terminal on the aforementioned submarine cable linking Antigua and Ascension Island. In addition to the commercial submarine cable systems between the United States mainland and Puerto Rico, the existing government owned cable from Cape Kennedy to Antigua also transits Puerto Rico. This coordination of satellite and cable channels places Puerto Rico in a preferred position as the eastern gateway to the United States for land and space program communications. To expedite the availability of communications channels to NASA, ITT World Communications Inc. is prepared to establish the Puerto Rican earth terminal on an accelerated basis. As soon as we receive the requested detailed information regarding the specific communications needs anticipated by NASA, we will undertake to prepare a formal quotation. Very truly yours, WALTER D. SOHIER, Esq., B. B. TOWER INTERNATIONAL TELEPHONE & TELEGRAPH CORP., National Aeronautics and Space Administration, DEAR MR. SOHIER: Thanks once again for giving me the opportunity two weeks ago today to review with you the background of Mr. Tower's letter to General Starbird and the interests, both the public interest and that of ITT World Communications, Inc., which we feel are at risk in the proposed direct procurement by NCS of satellite channels from Comsat for use by NASA in the Apollo program. Your courtesy and patience are very much appreciated; the efforts which you and your associates made to explain how the matter appears from your side of the table were particularly helpful to me. I have been mulling over one of the points which was made, the point that you at NASA are uniquely qualified to make sure that the system which is put together by Comsat is of the optimum configuration so that channels can be procured by NASA at the least possible cost consistent with desired performance and reliability levels. As I said during our conversation, it is clear that there is no group which has more experience or is better qualified in the satellite communications field. ITT Worldcom recognizes these qualifications and believes that they should be used to assist Comsat in designing the proposed system. Indeed, these qualifications are recognized in the Communications Satellite Act itself. Thus, in section 201(b), NASA not only is directed to consult with Comsat with respect to the technical characteristics of the communications satellite system, but also to assist the corporation in the conduct of its research and development program by providing not only satellite launching, but also associated services which, in the judgment of NASA, appear to be necessary for the most expeditious and economic development of the satellite system. NASA is also directed to advise the FCC on these matters prior to licensing of the system. In light of this statutory mandate, it would appear that NASA could and should have the same major role in the determination of the characteristics of the satellite system and the costs of such a system, regardless of whether the telecommunication channels are procured by NCS or NASA directly from Comsat or through a common carrier such as ITT Worldcom. We believe that the national interest would be promoted if the government continued to procure its telecommunications services from the established common carriers. My recollection of our talk leads me to attempt again to explain one point which I made, that regarding the overall policy implications of direct government procurement from Comsat. It has long been recognized that the government's telecommunications business is vital to the good health of the nation's telecommunications industry. The importance of the Federal Government's international record telecommunications traffic, which now includes alternate voice data, to the international record carriers was concisely put in the 1951 report, "Telecommunications-A Program for Progress," issued by the President's Communications Policy Board, in the following terms: "Federal Government agencies now decide, at something less than top level, the amount and type of record telecommunications matter that is to be transmitted to overseas or foreign points by means of facilities controlled by the Federal Government and established primarily for purposes of national defense. Too great a diversion is not conducive to the best health of the Nation's telecommunications networks. "If our national policy recognizes the desirability of strong private American companies operating in the international telecommunications field, there must be some form of control to insure that a substantial amount of Government message business is handled by commercial agencies, so that the Federal Government does not, perhaps unwittingly and by unilateral action of independent agencies, bring about a total or partial collapse of commercial facilities by eliminating their largest customer-the Government * That government policy regarding the obtaining of communications services from common carriers rather than directly has remained the policy of the United States government should be clear from the following testimony of Mr. Webb before the Senate Committee on Commerce in 1962: "Now let me add, Mr. Chairman, there is one other need that this Nation has. We have heavy commitments and heavy responsibilities all around the world. Some of these involve the deployment of our military forces, some involve the deployment of other agencies of the Government engaged in activities, such as foreign aid and many other types of relationships with other governments. The ability to have secure communications capable of doing the work needed by the agencies of the U.S. Government is very important. It is the policy of the Government to use the common carriers for this type of traffic wherever possible, so the total government, including our military services, does have a direct interest in the large expansion of communications capability which the satellite will make possible and also in the wide geographic coverage that can be achieved in this way more rapidly, more economically, than by any other means available to us-provided, Mr. Chairman, that it is proved possible to operate and use these satellites in the space environment over long periods of time, because each one is very expensive in itself, the launching, tracking, and all the other operations associated with it ***. "If the Government should need, let us say, 15 to 25 percent of the additional service provided here, then there would be a choice, I believe, among the common carriers as to how they routed that service. If they routed all of the Government service over the satellite system and all of the other serv. ices over the older system, this would produce one kind of situation. I think, Senator, that in some of the less traveled areas of the world, undoubtedly, the traffic generated by the interests of the Government will be very large proportionally to other traffic." That the Federal Government is an extremely important user of all of the international record carriers is clear from the fact that the Federal Government is far and away the largest single customer which ITT Worldcom has had in the last several years. In 1965 it is anticipated that the revenues received for services rendered to the government will be approximately 10% of total revenues. As it is a common carrier with a public service obligation to provide service to all users, regardless of the relative unprofitability of serving some of them, ITT Worldcom is concerned that direct procurement from Comsat will "skim the cream," that is, withdraw the support of the large 67-906-66- 45 |