The voice of AT&T Chairman Fred Kappel traveled more than 3,500 miles towards space before it was retransmitted to a telephone in Washington only 600 miles from Kappel.

"How do you hear me?" Kappel asked the then-vice president of the United States, Lyndon Baines Johnson.

"You are coming through nicely, Mr. Kappel," Johnson replied.

That two-minute call, made 20 years ago this weekend, launched a new era for the telecommunications industry.

It was the first time a spoken voice was picked up, amplified and sent back to Earth by satellite. That same day, the satellite would record another milestone: European television screens would receive their first live broadcast from the United States, via relay stations in England and France.

Today, the use of satellites for communications is routine. The bulk of international and coast-to-coast long-distance calls are transmitted through satellites. And almost every newscast contains film, sent via satellite, of events from faraway places.

But 20 years ago, American Telephone and Telegraph Co.'s launch of Telstar 1--the first active commercial satellite fired into Earth orbit--made big headlines, representing the beginning of what may be one of man's most important nonmilitary uses of space.

Its repercussions are still being felt today in the telecommunications industry, which hasn't been the same since July 10, 1962.

For one thing, the advent of satellites for commercial use has spawned many new segments of the industry, creating new areas of business and a spate of new companies that rely on satellites for their operations, including three local companies: Communications Satellite Corp. (Comsat), Satellite Business Systems and American Satellite Co.

The lure of the satellite has made these companies so attractive to investors that one communications expert remembers that when Comsat went public in the mid-1960s, there was so much excitement that there were quotas on how many shares each brokerage house could sell.

Since then, the satellite industry has grown into a multibillion-dollar business, says Jonathan Miller, the managing editor of Satellite Week and Communications Daily. "More than $100 billion will be spent between now and the year 2000 just for the space systems themselves. Billions and billions of more dollars will be poured in for ground equipment" to accompany the satellites, Miller predicts.

In terms of impact, the portion of the telecommunications business that has been the most affected by the development of satellites has been the broadcasting industry, because satellites have greatly facilitated the transmission of programs from a central point to outlets across the country.

As a result, Miller notes, satellites have helped create dozens of new television networks that are carried primarily on cable television systems. These networks range from Ted Turner's Cable News Network and his Atlanta SuperStation, WTBS--whose signal is broadcast nationwide--to Home Box Office and the Christian Broadcasting Network.

"Overnight, the satellite turned the cable industry from something marginal to an enormous boon," says Miller.

But equally significant is the greater flexibility that satellites have given existing television and radio stations, observes Larry Patrick, a senior vice president for research for the National Association of Broadcasters.

"Local stations no longer need to rely on the three major networks for material," Patrick says, because they easily can install large receiving dishes in their parking lots to pick up the satellite signals of shows produced by other companies.

At the same time, satellite technology has helped spur the dramatic restructuring of the telephone industry, making it possible for a number of companies to compete with AT&T's long-distance network. It has also brought a host of innovations, including AT&T's new two-way color Picturephone Meeting Service, which the company began offering just last week.

Predictions of how Telstar would change the world when it was launched "have been more than met," says Joe Pelton, executive assistant to the director general of Intelsat, the international organization responsible for all non-Soviet satellite communications for nonmilitary purposes.

"The predictions have been exceeded because at that time we didn't know how rapidly satellite technology would develop nor did we anticipate the tremendous explosion of communications requirements that are being demanded today."

What's more, the impact of satellite technology is still being felt and will continue to be for years to come. Just last month, the Federal Communications Commission approved a new television service that will allow consumers to receive signals directly from a satellite instead of through a local television station. For as little as $100 for a 2 1/2-foot-diameter dish and a small monthly fee, homeowners can receive several more television channels.

Satellites also will be a key element in the development of nationwide videotext services that will provide consumers with newspapers and other printed information electronically on their television screen. Satellite technology also will be needed to develop high-definition television, which will more than double the number of lines now transmitted in a single television picture to make the image sharper.

Satellites are a cheap way of distributing programs to many receivers. But even more significant, reception of satellite signals transmitted long-distance is significantly clearer than signals transmitted via ground-based microwave towers. Microwave transmissions have to be repeated every 25 miles. But by satellite, the signal is repeated only once, introducing less distortion.

By all standards, Telstar 1 was very primitive. It lasted less than two years, compared to the seven-to-10-year life of current satellites. Weighing only 170 pounds, Telstar 1 was placed in an elliptical orbit with a high point of 3,531 miles and a low of 592. As a result, earth stations had to constantly move their antennas to track it. It could handle only one television signal or no more than a dozen phone calls at one time and could transmit 875,000 bits--the numbers that make up the computer alphabet--per second.

Today's satellites are placed in stationary orbits 22,300 miles high where they remain in fixed position relative to a spot on Earth so tracking stations can pick up the signal without moving their antennas. AT&T's current satellites can handle about 24 television signals at one time or 18,000 telephone conversations and can transmit as many as 60 million bits a second.

Intelsat's latest satellite transmits even more data--a billion bits a second. "In the past it would have taken years to transfer that much information across the ocean," says Pelton.

About 100 active commercial satellites are now in orbit, with Intelsat operating 10 and U.S. companies operating 15 for domestic use. In addition, the FCC has already given companies permission to launch 12 new satellites and there are pending applications for permission to launch nearly 40 more--so many that the commission is considering narrowing the orbital spacing of satellites to accomodate more in the skies.

Among the firms ready to launch new satellites is, of course, AT&T, with its third generation of Telstar satellites. The new Telstars will have even greater capacity--as many as 21,600 telephone conversations and up to 1.4 billion bits a second.

Even so, the costs for each of these satellites will be less than the original Telstar. The cost for each of the three planned Telstar 3s will be around $70 million, which given inflation since 1962 is far less than Telstar 1's $78 million.

The first Telstar 3 is expected to be launched a year from now. Meanwhile, Telstar 1 and many of the other satellites spawned by its example will still be in space.

Although silenced by the effects of radiation since 1963, Telstar 1--which has already circled the globe nearly 70,000 times--is expected to remain in orbit for another 200 years.