American Telephone & Telegraph Co., five other U.S. international commuications carriers and two dozen European nations were rebuffed by the Federal Communications Commission yesterday in a 6-1 decision blocking construction of a new transatlantic telephone cable.
The FCC said current communications satellites are adequate to handle existing traffic and declined permission for the telephone companies to invest in another cable before 1985.
However, the regulatory agency said it could review its decision in future years if evidence is supplied showing that a new cable - which would be the seventh between America and Europe - is necessary.
Yesterday's tentative decision, which will come before the commission for a final vote Nov. 30, was denounced immediately by AT&T, which said higher rates and reduced service quality would be the results.
AT&T and the international carriers, as well as the communications agencies of European nations, have been seeking approval to construct a new cable in 1981. But their petitions were opposed by Communications Satellite Corp., and the FCC staff, who argued that existing satellites could handle potential traffic.
The sixth Atlantic cable (TAT-6), went into service last year after an initial investment of more than $150 million.
Ironically, the same foreign government agencies that seek the new cable are the same agencies that cooperate with Comsat in an international tele-communications consortium that operates the satellite system.
Representatives of the European nations came to Washington to participate in congressional hearings on the matter, to emphasize their concern that the FCC consider them as well as American communications users in making a decision.
The Europeans argued that a new cable would be less costly in the long run and that it would be a mistake to rely on satellites primarily for overseas service, in terms of providing alternative communications flexibility.
AT&T said adoption for a future telecommunications policy that relies upon satellites could lead to the damise of the U.S. submarine cable industry with an adverse impact on development of new technology.
Currently, about 60 per cent of North Atlantic traffic is handled by satellite - a share that has been growing. AT&T and its associates have favored a 50-50 split.
Comsat has argued that international carriers should be required to make greater use of existing satellite facilities, with resulting economics from large volume use. Transatlantic telephone cals have been increasing at a rate of more than 20 per cent a year.
AT&T Long Lines president Richard R. Hough last nigh said the FCC action "is against the public interest and will lead to higher costs for transatlantic calls and a degradation of service quality."
In addition, Hough said in a strong attack on the agency, the decision will hurt the U.S. balance of payments and jeopardize American jobs.
"By turning down this plan, the FCC seems to be taking the view that there is only once end to a two-way communications circuit.The decision ignores the specific recommendations of the (European nations) and Canada," Hough declared.