Satellite Business Systems, a McLean-based firm that plans to offer nationwide communications services through a network of satellites, is under investigation by the Justice Department's Antitrust Division.
SBS could be a major competitor to established communications firms for inter-city business starting in the early 1980s.
SBS is owned by Communications Satellite Corp. of Washington, International Business Machines Corp. and Aetna Life and Casualty Co. The company's authority to set up a satellite system, approved recently by the Federal Communications Commission, has been challenged in the U.S. Court of Appeals here by American Telephone and Telegraph Co., Western Union and American Satellite Corp., a subsidiary of Fairchild Industries, which is based in Montgomery County.
The Justice Department investigation was revealed by the SBS itself, which said companies involved in the SBS venture have received civil investigative demands from the government agency.
"The demands state they are made in the course of an investigation to determine whether there may have been, or may be, antitrust violations in connection with the establishment of SBS and the acquisition of the assets of predecessor organizations," SBS said.
Among materials demanded by the Justice Department are documents related to the early days of SBS' predecessor companies, CML Satellite Corp. and MCI Lockheed Satellite Corp.
In the FCC actions leading to SBS approval, Justice did not oppose establishment of a domestic satellite system. However, the department did request the FCC to conduct hearings on the effects of the SBS partnership on competition prior to approving the new system.
The FCC - which said that any anti-competitive effects of SBS are not likely to occur given the present and future market for communications services and that agency's continuing regulatory supervision - rejected the hearing proposed by Justice.
In announcing the investigation, SBS said it does not expect the action to obstruct progress toward establishment of its new system.
In a related matter, the FCC denied a petition for reconsideration of its authorization for SBS. Companies opposing SBS now must file briefs with the Court of Appeals by June 15.