Despite vitrolic complaints from competitors in the home video industry and other communications concerns, Communications Satellite Corp.'s ambitious $600 million plan to start the nation's first satellite-to-home broadcasting service continues to take key steps toward its development.
Although there is considerable uncertainty about the philosophical bent of the revamped Federal Communications Commission, Comsat officials, congressional experts and industry observers seem convinces that the Comsat direct broadcast satellite (DBS) project will live or die in the marketplace, rather than in either the corridors of the Capitol or the FCC.
"It's pretty clear that the American people have a desire for a greater variety of choices than what they see now in their homes," said John A. Johnson, chairman of Satellite Television Corp., the Comsat subsidiary set up to operate the service."There is no reason to think the FCC will be anything but impartial judges of these issues."
The fact, the efforts to get the operation off the ground -- a campaign that so far has focused largely on the private communications industry and on Congress -- have won support from some surprising quarters.
Faced with an agenda of communications deregulation issues as well as the complex and confusing legal and legislative fight over the future regulatory structure of American Telephone & Telegraph Co. and its competitors, it seems unlikely that Congress soon will address the regulatory issues surrounding the Comsat plan.
"There is a general feeling up here among many members that if it truly doesn't hurt anybody, let it fly," said one well-placed congressional source. "I don't foresee any hearings specifically directed at that issue. I just don't see any heat."
Futhermore, some segments of the television industry -- even ones that ultimately may be direct competitors of the DBS venture -- are not about to launch a lobbying barrage.
For example, the National Cable Television Association, whose members also are seeking to add programming diversity to the U.S. broadcasting menu, has said very little about the Comsat plans. In fact, NCTA President Thomas Wheeler said the association generally is supportive of new technological ventures. Speaking to a communications seminar last week, Wheeler said the association recognizes that technologies like DBS and lower-power television, represent "competitive challenges to both broadcasters and cable operators."
"We have not opposed their introduction," Wheeler said. "No one is frankly overjoyed by the new challenges to our market, but we firmly believe that those challenges should be met in the marketplace. Government should not preclude new services from giving cable a full and a fair run for its money."
Wheeler and Johnson, in interviews this week, said the two industries could have a beneficial relationship, with programming-starved cable operators becoming ultimate distributors of the fare the Comsat unit hopes to market. "It would be appropriate for cable to be a local distribution loop for some of Comsat's programming," Wheeler said.
Johnson agreed. "Our primary market is the significant portion of the 30 million television homes that will not have access to cable in the latter part of the decade," Johnson said. "But the secondary market for out programming is cable operators themselves. They are hungry and will continue to be hungry for good programming. We foresee that the cable people themselves will be interested in one or more of our channels."
What the Comsat operation in proposing is nothing less than a dramatic change in both world television technology and the history thrust of a District-based company that generally is well-known only by satellite buffs.
For Comsat is proposing to move from the world of communications satellites effectively into the world of network television. Although Japanese and European scientists are working on similar plans, Comsat officials say that if they can have their system operational in 1986 -- the current target date -- that will give the nation and its communications firms a significant technological advantage over foreign competitors. "We could have the first operating system in the world," Johnson said.
The plan involves selling the public -- for as little as $100 -- a satellite dish to be mounted atop the home, for example, that will receive directly from satellites three new channels of television programming, some of it new and some of it the standard pay television fare of feature films.
And unlike cable or conventional broadcast systems, Comsat officials say their system will permit a great deal of experimentation with unconventional programming. As soon as the service is available, says Comsat, viewers will have access to the programming and the company will be able to get quick, nationwide information regarding audience interest.
"We will have the kind of national audience and the incentive to do specialized programming," Johnson said. "It's one thing for a cable television operator to take a channel and send it to subscribers, but it's another to lock the whole country into it. That's the real opportunity."
STC apparently also has the resources to take on the venture. Initially funded with a $225 million transfer from Comsat, the company has a $400 million line of credit from a syndicate of banks headed by Chase Manhattan Bank. Although Johnson acknowledges that it would be nice to have a partner with deep pockets and technological, marketing or service expertise, he said the company it prepared to go it alone.
Negotiations to bring Sears, Roebuck & Co. in as a partner fell through last year, but Johnson said preliminary talks are continuing with other major corporations. Industry observers say it is unlikely any possible partner links an agreement with Comsat until the coveted FCC authorization is obtained. Even after that uncertain step is accomplished, it will take about 39 months to construct a satellite for the service.
Nevertheless, if history is any guide, it is difficult to dismiss the political influence of Comsat's opponents. The National Association of Broadcasters, the primary lobbyist arm of the radio and television industries, has warned that granting Comsat interim authorization for its service would "reflect imprudent, capricious rulemaking" and called any quick action on a Comsat request for operating authority a "rush to judgement with potentially irreparable consequences."
On another front, however, Rockwell International Corp., which is a major supplier of radio equipment, is arguing vigorously that providing Comsat with a vital slice of the broadcast spectrum could jeopardize private microwave services provided to businesses such as railroads and newspapers across the country.
"In the case of DBS for the United States, however, the commission and/or the commission's staff are proceeding as though DBS was a national goal approaching national security in priority," Rockwell said in comments filed with the FCC.
"The facts are, however, that hasty implementation of an interim DBS system without proper consideration of the existing services in the 12.2 to 12.7 GHz (gigahertz) band could lead to the subversion of a clear national goal to become more self-sufficient in energy," the company said, citing the use of that piece of the spectrum by railroads and power companies.
The issues surrounding the frequency flap are very complex and revolve around national and international policy questions that U.S. representatives will address at a 1983 spectrum allocation conference. In fact, the problems apparently were given minimal attention by Comsat engineers in preparing a massive filing with the FCC last December.
Nevertheless, Johnson said this week that the firm's engineers had come up with several solutions to the problem. "We expect to make a presentation on the subject to the FCC," Johnson said. "There might have to be a small adjustment in the terrestrial systems. It is a technical question of some complexity, but we're prepared to address it. We're accustomed to overcoming problems that look very difficult."
These issues are expected to get a thorough airing, so to speak, next month, when the FCC holds what has come to be known as "DBS Day," a day of commission discussions and presentations on these and other questions. So far, the FCC has only begun the preliminary stages of addressing the matter. For there are essentially no rules that govern the service since no one has ever offered it.
The initial comments from opponents are only an indication of the types of arguments the commission will be presented when a formal proceeding on an interim request for authorization is opened. Comsat officials hope that will come with "CBS Day."
"We certainly have leared about the attitudes and tactics of those who opposed us," Johnson said with a grin. "Clearly, those who have their own product have something at stake. I really don't like to speculate on their motives, but it does appear to me that they are fearful and jittery since they are about to see developments that will present them with an uncertain future." a
And, Johnson notes that generally, in government proceedings like the DBS matter, if is only the opponents, with well-heeled Washington representation, that appear before bodies such as the FCC. "I don't expect people to hire lawyers and talk to the FCC if they want our system established," he said.