At a time when the country's space program is not making much news, the nations's communications industry is quietly merging computer and satellite technologies in a fashion that could ultimately revolutionize the way the nation does business.
Satellite Business Systems, a McLean-based company, may be at the forefront of that new era.
Utilizing, through a partnership, the vast resources of International Business Machines Corp., Comsat General Corp. and Aetna Life & Casualty Corp., SBS is on the verge of launching what may be the nation's most ambitious telecommunications venture.
The scenario is this: A company, with an SBS hook-up will be able to channel all its communications needs though a single, totally digital satellite network. The SBS system will carry everything from voice and video communication to speedy data transfer -- as many as 3,600 pages an hour -- to more sophisticated links between computers around the country and perhaps throughout the world. These messages will move from SBS satellites to earth stations often located on a customer's premises.
SBS insists it will bring into practice the often discussed, little utilized "teleconferecing" which would link via television a firm's offices around the country within the coming decade, a program which seems extremely timely in light of the increasing cost of business travel.
Potentially, according to an SBS study of seven large firms, the savings to a customer could run to as much as $20 million a year.
"There is little doubt that advanced applications such as computer-to-computer communications, electronic mail systems, and video teleconferencing are going to become business realities in the 1980s," Robert Hall, SBS president, said in a recent speech. "The only question is when."
SBS, a 5-year-old partnership that pulled together a $400 million investment from its three sponsors, says it will be operational during the first part of next year, after an October launch from Cape Canaveral of its first satellite. A second satellite will be sent up in April. Potentially just as significant, SBS has become the first U.S. firm to sign up with the government's space shuttle.
But despite its resources, the road into business has not been simple for SBS, a company run by a nine-member board of directors, made up of three representatives of each partner.
Hall is the company's second chief executive, since the partnership was established in December 1975. Hall succeeded Philip Whittaker last year. "We needed to reorient the thinking of management into the operational and out of the planning mode," said Hall, who had been executive vice president of the New York Stock Exchange.
Second, the SBS start-up date, originally set for 1977, has been delayed both for technical and legal reasons. SBS has changed its focus from a company set up to act as an intermediary to one offering complete end-to-end communications service.
Further complicating matters for SBS were protracted and heated legal proceedings. The Federal Communications Commission gave SBS its operations order in February 1977, but the Department of Justice, and such communications industry powers as American Telephone & Telegraph and Western Union Telegraph Co. challenged the decision that spring, saying that the commission failed to hold adequate hearings on Satellite Business System's proposal.
Fairchild Industries, whose American Satellite Corp. is an SBS competitor, warned the FCC about the possible anticompetive effects of the joining of giant satellite and computer firms in SBS.
The complex appeals process was not resolved until this Feb. 8, when the U.S. Court of Appeals here affirmed the FCC's 3-year-old order. The parties have not appealed that decision to the U.S. Supreme Court, and Hall thinks the firm's biggest legal hurdles are out of the way. "We didn't think it would take so long," Hall said in a recent interview.
But now on the regulatory front, SBS has a new and particularly complex problem. A heated controversy is now before the FCC over the allocation of orbital slots in the increasingly cluttered marketplace in the sky.
By 1987, if the FCC approved all the pending applicatons, the country would have more than two dozen fixed domestic satellites in operation, three times the current total. Many experts doubt whether there is actually room in the preferred positions.
At this point, SBS fiercest compettion for the orbital slots it says it must have is General Telephone & Electronics Co., whose applications SBS called "puzzling, unless they are a blatant attempt to delay the SBS system."
SBS's fate is further complicated by the potential impact a rewriting of the nation's communications laws could hold for the company. SBS has been lobbying the issue, with its own set of interests that could diverge from those of its sponsors.
"I've never subscribed to the belief that we need legislation at all costs," Hall said of the communications bills now mired in fierce debate on Capitol Hill. "Some versions of the bills could literally put us and people like us out of business."
Like other competitors in the industry, Hall is concerned with the proposed structrual changes in AT&T, which would over a period of years allow the Bell System to compete in markets, like those currently being sought by SBS. "There ought to be a transition phase or there won't be a computer industry," Hall said.
Yet despite the legal hassles, SBS seems ready to get off the ground. Although all of the original funding will run out at the end of the year, Hall says more money will be needed for the period before the company first turns a profit within a couple of years, but that those funds will not come from a public offering.
Because SBS is a private company, with limited disclosure requirements, and because of the complexities of the SBS service, much of the public still knows little of the company and its operation.
Nevertheless, Hall says the SBS sales staff has been aggressively marketing the SBS services, a fact that is doubly difficult because the company offers the service, but not the customer's equipment on the premises. Six customers, firms as diverse as Boeing Computer and Crocker Bank, have signed up.
So SBS has contracted with large technical firms like California-based AM International and Bunker Ramo Corp. to produce equipment that SBS can use and show to potential customers. AM and SBS have announced completion of the work on a product the two firms bill as the "world's first communicating copier."
Hall also has become more of a public figure, speaking earlier this year to a New York stock analysts' group in just such an effort to raise the company's public visibility level. "I'd like the marketplace to know what we're all about," he said. "We're real and we're a factor."
But of all the SBS plans, perhaps nothing may touch the public imagination like the company's plans for "teleconferencing." Unlike AT&T's heralded but so far little utilized picturephone service, SBS proposes that reasonably priced studios can be built on a company's premises in order to make video business hookups a practical opportunity.
"We think we can put a teleconferencing system into a business for the costs of a room," Hall said, pointing out that the "human engineering" problems of siting the cameras and microphones in proper positioning are still major difficulties. The price of cameras will decline, as will the cost of constructing the rooms themselves, Hall maintains.
"By the mid-1980s, most companies will be addressing teleconferencing to a serious degree," Hall said. Travel costs are going up, and that won't reverse itself. The cost trade-offs will be good, and you'll be able to put together a two-hour meeting in two hours."