A dispute over rates for satellite communications services that has been orbiting the Federal Communications Commission since soon after the first communications satellite was launched, was finally settled yesterday.
After 13 years and 20,000 pages of evidence, the FCC ordered Communications Satellite Corp. to rebate $92.5 million, plus $3.5 million interest, to its customers.
Rates for international satellite services will be cut by 48.5 percent under the settlement, worked out with the FCC staff in February and approved by the commission yesterday, hours before Comsat's annual shareholder meeting.
Comsat Chairman Joseph McConnell told stockholders the "settlement is in the best interest of the company" because it allows higher rates than FCC's original order, which Comsat had appealed.
Comsat established an escrow fund to repay its customers, which are large communications companies. The FCC indicated it would expect those firms to pass the rebates on to their customers. McConnell told a questioner that how that is done is not Comsat's problem.
The dispute dates to 1965, only two years after Comsat was formed as a government chartered satellite company. In 1975 the FCC ruled Comsat was not allowed to charge its customers for about half of its investment base. Comsat appealed and won a compromise settlement.
Assuring stockholders that the settlement means Comsat "now will be able to move forward in the development of our business with less uncertainty and distraction," McConnell said the movement likely will include acquisitions.
"We are in an excellent position to take advantage of new business opportunities. And increasingly we are directing our attention in this direction," he said.
"Expansion could come from internal growth or through business acquisitions," he said, noting that Comsat "generates substantial amounts of cash" and has no long-term debt.