Responding to the threat of pre-emptive competition, the Communications Satellite Corp. announced yesterday that it had acquired the satellite capacity necessary to launch its direct-broadcast, satellite-to-home television service by late next year, two years earlier than originally planned.
The announcement was made by retiring Comsat Chairman John D. Harper at the start of Comsat's annual meeting here. In addition to offering an array of satellite-related communications services, Comsat is America's representative to Intelsat, the global satellite consortium that carries the bulk of the world's international telecommunications traffic.
Satellite Television Corp., a wholly owned subsidiary of Comsat, had intended to provide direct-broadcast satellite television programming in 1986. Using specially engineered high-powered satellites, STC planned to beam its programming into homes equipped with 2-foot diameter satellite dish receivers. The service would have covered the Northeastern portion of the United States.
However, the certainty of interim direct-broadcast satellite competition prior to 1986--most notably, Australian press magnate Rupert Murdoch's plans to launch such a satellite service by the end of this year--has pushed STC into accelerating its entry into the market.
"It's an exciting, competitive environment in which we will have a leadership position," according to STC President Richard S. Bodman.
The earlybird service will use a to-be-launched Satellite Business Systems satellite. SBS, based in McLean, is partly owned by Comsat. An SBS spokesman says the SBS-STC deal was made at "arms-length" and that the details of the arrangement will be filed shortly with the Federal Communications Commission. Murdoch's company leased five SBS satellite links for $75 million.
The proposed STC service would broadcast five channels of pay television programming to the northeastern United States. According to an STC spokesperson, the SBS satellites would allow satellite receiver dishes as small as two feet in diameter. The other proposed satellite services would require dishes at least three feet in diameter. Supposedly, the STC dishes would be able to receive signals from the enhanced national satellite service that STC hopes to launch in 1986.
The move puts additional pressure on STC to acquire television programming. Moreover, it increases STC's announced need for an equity partner both to help defray the costs of offering the service and to help in such areas as marketing and distribution of the dishes, areas where STC has little expertise.
Comsat shareholders also heard outgoing chairman Harper say that "we're not making forecasts" about SBS's future profitability. SBS, which Comsat owns along with IBM Corp. and Aetna Life & Casualty Co., cost the company a loss of $16 million in 1982.
Joseph V. Charyk, who was named to succeed Harper as chairman, responded to a shareholder's question concerning alleged improprieties in Comsat's efforts to hire a Commerce Department official at the same time the company was trying to strike a deal to take over the nation's weather and remote sensing satellite systems.
"The implication by some elements of the press is that there was a connection between commercialization of the satellites and efforts to hire" Guy W. Fiske, the Commerce official, Charyk said. He denied that there was any impropriety and said that Fiske was never offered employment nor were terms of employment discussed in tandem with Comsat's negotiations with Commerce on the remote sensing satellites.
Comsat reported 1982 revenues of $409.5 million with net income of $43.3 million.