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COMMUNICATIONS SATELLITE ACT OF 1962

FRIDAY, AUGUST 3, 1962

UNITED STATES SENATE,

COMMITTEE ON FOREIGN RELATIONS,

Washington, D.C.

The committee met, pursuant to notice, at 10:30 a.m., in room 4221, New Senate Office Building, Senator John Sparkman presiding. Present: Senators Sparkman, Humphrey, Mansfield, Morse, Long, Lausche, Symington, Wiley, Hickenlooper, Aiken, Capehart, and Carlson.

Also present: Senator Estes Kefauver of Tennessee.

Senator SPARKMAN. Let the committee come to order, please. Quite a number of additional Senators have indicated that they will be here, but I think we had better get started because time is rather of the

essence.

OPENING STATEMENT

The Committee on Foreign Relations is meeting this morning pursuant to unanimous consent agreement to refer to the committee H.R. 11040, the communications satellite bill. The committee has been asked to report its conclusions back to the Senate not later than August 10.

Yesterday afternoon the committee met in executive session and agreed to limit its inquiry to the international relations aspects and the international legal aspects of H.R. 11040. We agreed, however, that members might question witnesses on collateral matters. We are now in the process of making arrangements for certain executive branch witnesses to appear before the committee.

Our first witness this morning is Mr. Newton N. Minow, Chairman of the Federal Communications Commission, and I understand he is accompanied by Commissioner Craven. This afternoon at 2:30 we will hear Mr. Edward R. Murrow. Tentative arrangements have been made for the committee to meet with Secretary of State Rusk and other witnesses from the Department of State next week.

Before we start with Mr. Minow, if there is not objection, I should like to place in the record at this point a staff memorandum that was prepared for this committee on July 12. At that time we discussed in the committee whether or not we should ask that the bill be referred to the committee, and we requested the staff to prepare a memorandum. I think a very good job was done, and I think it would be well to place it in the record; if there is not objection, that will be done. Senator Morse. Mr. Chairman, could we have the bill printed at the beginning of the record?

Senator SPARKMAN. Yes. Without objection the bill in the form in which it stands now will be printed in the record.

(H.R. 11040 and the memorandum referred to are as follows:)

[H.R. 11040 [Rept. No. 1584] 87th Cong., 2d Sess.]

[Strike out all after the enacting clause and insert the part printed in italic]

AN ACT To provide for the establishment, ownership, operation, and regulation of a commercial communications satellite system, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

TITLE I SHORT TITLE, DECLARATION OF POLICY, AND

DEFINITIONS

SHORT TITLE

See. 101. This Act may be eited as the "Communications Satellite Act of 1962”;

DECLARATION OF POLICY AND PURPOSE

See: 102: (a) The Congress hereby declares that it is the policy of the United States to establish, in conjunction and in cooperation with other countries, as expeditiously as practicable a commercial communications satellite system, as part of an improved global communications network, which will be responsive to publie needs and national objectives, which will serve the communication needs of the United States and other countries, and which will contribute to world peace and understanding:

(b) The new and expanded international communications services are to be made available as promptly as possible and are to be extended to provide global coverage at the earliest practicable date. In effectuating this program, eare and attention will be directed toward providing such services to economically less developed countries and areas as well as those more highly developed, toward efficient and economical use of the electromagnetie frequency spectrum, and toward the reflection of the benefits of this new technology in both quality of services and charges for such services.

(e) In order to facilitate this development and to provide for the widest possible participation by private enterprise, United States participation in the global system shall be in the form of a private corporation, subject to appropriate governmental regulation. It is the intent of Congress that all authorized users shall have nondiscriminatory access to the system; that maximum competition be maintained in the provision of equipment and services utilized by the system; and that the corporation created under this Aet be so organized and operated as to maintain and strengthen competition in the provision of communications services to the public.

(d) The Congress reserves to itself the right to provide for additional communieations satellite systems if required to meet unique governmental needs or if otherwise required in the national interest.

DEFINITIONS

SEC. 103. As used in this Aet, and unless the context otherwise requires

(1) the term "communications satellite system" refers to communications satellites in space whose purpose is to relay telecommunication information between satellite terminal stations, together with such associated equipment and facilities for tracking, guidance, control, and command functions as are not a part of the generalized launching, tracking, control, and command facilities for all space purposes;

(2) the term "satellite terminal station" refers to the complex of communieation equipment located on the earth's surface which receives from or transmits to terrestrial communication systems for relay via communications satellites;

(3) the term "communications satellite" means an earth satellite which is intentionally used to relay telecommunication information;

(4) the term "associated equipment and facilities" refers to facilities, other than satellite terminal stations and communications satellites, to be

constructed and operated for the primary purpose of a communications satellite system, whether for administration and management, for research and development, or for direct support of space operations;

(5) the term "research and development" refers to the conception, design, and first creation of experimental or prototype operational devices for the operation of a communications satellite system, including the assembly of separate components into a working whole, as distinguished from the term "production", which relates to the construction of hardware to fixed specifieations compatible with repetitive duplication for operational applications; (6) the term "telecommunication" means any transmission, emission, or reception of signs, signals, writing, images, and sounds or intelligence of any nature by wire, radio, optical, or other electromagnetic system;

(7) the term "communications common carrier" has the same meaning as the term "common carrier" has when used in the Communications Aet of 1934, as amended; and the term "authorized earrier", except as otherwise provided for purposes of section 304 by section 304(b)(1), means a communications common carrier which has been authorized by the Federal Communications Commission under the Communications Act of 1934, as amended, to provide services by means of communications satellites;

(8) the term eorporation" means the corporation authorized by title H of this Act;

(9) the term "Administration" means the National Aeronauties and Space Administration; and

(10) the term "Commission" means the Federal Communications Commission.

TITLE H FEDERAL COORDINATION PLANNING AND REGULATION

IMPLEMENTATION OF POLICY

Sec. 201. In order to achieve the objectives and to carry out the purposes of this Aet

(a) The President shall

(1) aid in the development and foster the execution of a national program for the establishment and operation, as expeditiously as possible, of a commercial communications satellite system;

(2) provide for continuous review of all phases of the development and operation of such a system, including the activities of a communica tions satellite corporation authorized under title III of this Aet;

(3) coordinate the activities of governmental agencies with responsi bilities in the field of international communications, so as to insure that there is full and effective compliance at all times with the policies set forth in this Aet;

(4) exercise such supervision over relationships of the corporation with foreign governments or entities or with international bodies as may be appropriate to assure that such relationships shall be consistent with the national interest and foreign policy of the United States;

(5) insure that timely arrangements are made for foreign participation in the establishment and use of a communications satellite system;

(6) take all necessary steps to insure the availability and appropriate utilization of the communications satellite system for general governmental purposes which do not require a separate communications satellite system to meet unique governmental needs; and

(7) se exercise his authority as to insure effective and efficient use of the electromagnetie spectrum and the technical compatibility of the system with existing communications facilities both in the United States and abroad.

(b) The National Aeronautics and Space Administration shall—

(1) advise the Commission on technical characteristics of the communications satellite system;

(2) coordinate its research and development program in space communications with the research and development program of the corporation;

(3) assist the corporation in the conduct of its research and development program by furnishing to the corporation; on a reimbursable basis, such satellite launching and associated services as the Administration

deems necessary for the most expeditious and economical development of the communications satellite system;

(4) consult with the corporation with respect to the technical charaeteristics of the communications satellite system;

(5) furnish to the corporation, on a reimbursable basis, satellite launching and associated services required for the establishment, operation, and maintenance of the communications satellite system approved by the Commission; and

(6) to the extent feasible, furnish other services, on a reimbursable basis, to the eorporation in connection with the establishment and operation of the system.

(e) The Federal Communications Commission, in its administration of the provisions of the Communications Act of 1934, as amended, and as supplemented by this Act, shall

(1) insure effective competition in the procurement by the corporation of apparatus, equipment, and services, and, to this end, shall preseribe appropriate rules and regulations;

(2) insure that all present and future authorized earriers shall have nondiscriminatory use of, and equitable access to, the communications satellite system on just and reasonable terms and conditions and regulate the manner in which available facilities of the system are allocated among such users thereof;

(3) in any ease where the Secretary of State, after obtaining the advice of the Administration as to technical feasibility, has advised that commercial communication to a particular foreign point by means of the communications satellite system should be established in the national interest, institute forthwith appropriate proceedings under section 214(d) of the Communications Act of 1934, as amended, to require the establishment of such communication by the corporation and the appropriate communications common carrier or carriers;

(4) insure that facilities of the communications satellite system are technically compatible and interconnected operationally with the satellite terminal stations and with existing communications facilities;

(5) prescribe such accounting regulations and systems and engage in such ratemaking procedures as will insure that any economies made possible by a communications satellite system are appropriately reHeeted in rates for publie communications services;

(6) approve technical characteristics of the operational communications satellite system to be employed by the corporation and of the the satellite terminal stations; and

(7) grant a license for the construction and operation of each satellite terminal station, either to the corporation or to one or more authorized earriers or to the corporation and one or more such earriers jointly, as will best serve the publie interest, eonvenience, and necessity: In determining the publie interest, convenience, and necessity the Commission shall encourage the construction and operation of such stations by communications common carriers wherever, in the judgment of the Commission, such construction and operation are not inconsistent with the policies of this Act. The Commission shall insure that each authorized earrier shall have equitable access to, and nondiscriminatory use of, such stations on just and reasonable terms:

TITLE HI CREATION OF COMMUNICATIONS SATELLITE

CORPORATION

CREATION OF CORPORATION

See. 301. There is hereby authorized to be created a communications satellite corporation for profit which will not be an agency or establishment of the United States Government. The corporation shall be subject to the provisions of this Aet and, to the extent consistent with this Aet, to the District of Columbia Business Corporation Act. The right to repeal, alter, or amend this Act at any time is expressly reserved.

PROCESS OF ORGANIZATION

SEC. 302: The President of the United States shall designate incorporators who shall serve as the initial board of directors until the first annual meeting of

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