Hoping to tap into the lucrative international telecommunications market, a new Washington-based company yesterday requested Federal Communications Commission permission to launch two transatlantic satellites to serve private customers in the United States and Europe.
The system proposed by Orion Satellite Corp. would enable banks, television broadcasters and multinational corporations to buy satellite capacity to create their own international communications networks. The companies would set up their own earth stations and use Orion's satellites as their pipeline.
The proposal places Orion in direct conflict with Intelsat--the International Telecommunications and Satellite organization--a consortium of 108 countries that operates a global satellite network. Intelsat carries two-thirds of the world's telephone and computer-data traffic and virtually all international TV broadcasts. As a common carrier, it is open to all users.
Thomas K. McKnight, Orion's co-founder and president, said, however, "We will complement the Intelsat service." The satellite service is intended primarily for the transmission of video and computer-data traffic rather than telephone calls, and "we don't see where Intelsat can cope with the increased demand in video traffic," McKnight said.
Pending FCC approval, Orion hopes to have its satellites launched by 1987. They are being pre-sold to potential customers like pieces of prime real estate in outer space. "We're treating the [communications] transponders like condominiums," McKnight said. He claims that Orion already has letters of intent from several Fortune 500 companies. McKnight estimates the system will cost $230 million. The company has filed a launch application with NASA.
"What is being undertaken on the international level is the equivalent of what is being done domestically," said Gustave M. Hauser, formerly head of Warner-Amex Cable and now an Orion director, referring to the spread of private satellite communications systems in this country. Hauser said that the willingness of European countries to begin deregulating their telecommunications systems makes the kind of service Orion hopes to offer both politically and commercially feasible.
According to McKnight, Orion is negotiating for access with several European PTTs (the government telecommunications agencies) and is close to a deal with Mercury Inc., a British version of MCI Inc., a Washington-based long-distance, low-cost telephone service. McKnight also says that several European and American video companies are intrigued by the idea of transatlantic television programming. He is a lawyer who used to work with the White House Office of Telecommunications Policy,
The real obstacle to Orion appears to be regulatory rather than technical. "Orion is presenting an interesting proposal, and we will look at it with the overview of its consistency with the Intelsat agreement," says Willard Demory, assistant chief of the FCC's Common Carrier bureau. Article XIV of the agreement effectively prohibits the creation of independent satellite services that would interfere with the technological or financial health of the existing Intelsat consortium. Sources said that Intelsat members would consider Orion a threat to the status quo.
However, several British companies hope to launch Unisat, a private service similar to Orion's, by 1985. Britain is a major member of Intelsat. Comsat, America's representative on Intelsat, issued a statement saying "it would be premature to take a position" about the Orion proposal.