The Federal Communications Commission, reversing nearly 20 years of policy, moved yesterday to allow more competition in international telecommunications by relaxing a series of rules governing one of the industry's fastest growing sectors.
The biggest beneficiary of the commission's action will be D.C.-based Communications Satellite Corp., which for the first time will be able to sell its international satellite services directly to businesses, government agencies and individuals.
Up to now, the FCC has allowed Comsat to sell its international telecommunications facilities only to other international communications companies, such as American Telephone & Telegraph Co., RCA Global Communications Inc. and Western Union International Inc., which in turn would sell Comsat's services to businesses and individuals.
By a unanimous vote, the commission decided that its restrictions no longer were in the public interest. By allowing Comsat to compete with other international carriers for customers wanting to send messages overseas, the commission said it hoped to increase competition and thereby give customers a wider variety of services at lower prices.
At the same time, the FCC made it clear that it would allow Comsat to enter any business area it wished as long as those activities didn't interfere with the company's congressionally mandated role to act as the U.S.'s sole representative in the two organizations that control international satellite use.
The FCC ruled, however, that any business activity not a part of Comsat's congressionally mandated monopoly role must be handled through a separate subsidiary. The purpose is to keep funds obtained from Comsat's monopoly activities from subsidizing any competitive activities, including any efforts to sell international services directly to customers.
In an effort to make competition fairer for Comsat's rivals, the commission also said it would consider giving companies such as RCA, WUI and ITT World Communications Inc. a greater financial share in the international satellite system by allowing them to own completely and to operate earth stations that could link to the international satellite system. Under current FCC rules, Comsat has 50 percent control of all earth stations that hook to the international system.
Additionally, the commission indicated it would decide later this year whether to allow ITT, RCA, WUI and other international record carriers to offer international voice services. Currently these companies are permitted to send only written messages, such as telegrams, telex messages and data, while AT&T is permitted to send only voice messages, such as telephone, television and radio signals abroad.
The FCC said it did not want to ease its rules for the record carriers now, unless it could also consider at the same time a proposal to permit AT&T to transmit data internationally.
Comsat applauded the commission's decision that will permit the company to deal with customers directly; however, the company said it believed the FCC's plan to allow its competitors to own earth stations may be illegal.
Meanwhile, Comsat's competitors indicated they would probably appeal the FCC's decision to allow Comsat to deal with customers in court, arguing that the 1962 law creating Comsat doesn't permit it to deal with anyone other than other communications carriers.