Though this week marks Intelsat's 20th anniversary as one of the most effective international ventures in the world, the mood at the global satellite telecommunications consortium reflects more uncertainty than celebration.
For the past two decades, a special treaty arrangement has given the 109-nation organization based in Washington a virtual monopoly on international satellite communications.
The consortium carries more than two-thirds of the world's international telephone traffic and virtually all of its international television transmissions, including the Olympics from Los Angeles.
But the nonprofit Intelsat is now faced with the specters of technological and political change that, Intelsat Director General Richard Colino asserts, may threaten the organization's economic viability.
The possibility of private satellites competing with Intelsat, as well as transatlantic fiber optic cables that can carry tens of thousands of phone calls simultaneously, directly challenge Intelsat's ability to remain the preeminent global communications network over the next 20 years.
Last March, Orion Satellite Corp., a tiny Washington-based company, petitioned the Federal Communications Commission for permission to launch satellites that would compete with the Intelsat system, saying it could offer similar services at a lower cost. Orion argued that the Reagan administration's policies to deregulate domestic telecommunications markets should be extended to the international arena.
Other companies, including International Satellite Inc. and RCA Corp., soon filed similar requests.
A joint State Department and Commerce Department policy group studying the question reportedly recommended that some form of private-sector competition to Intelsat should be introduced. Those policy recommendations now await White House action.
Intelsat has publicly and privately fought against this move to undermine its monopoly. Colino has gone so far as to say that the U.S. effort to launch competition to Intelsat without seeking the organization's assistance demonstrates "the narcissism of the United States. Everybody in this town forgets that there are 108 other members in this organization. It's ironical that the United States may be the country that politicizes Intelsat, which has been a triumph of both U.S. foreign policy and technology transfer" to underdeveloped nations.
To heighten that side of Intelsat's profile, Gray and Co., one of Washington's most influential lobbying organizations, was hired earlier this year. That set a precedent for the organization, which has traditionally avoided being politically active.
However, Colino, an American who assumed the top post at Intelsat late last year, has played an activist role in positioning the organization to cope with the potential of new competition.
For example, one Intelsat difficulty is that a sluggish world economy and overly optimistic traffic forecasts have left the organization with excess satellite capacity. Because of its overcapacity, Intelsat operated at a $30 million deficit last year.
Colino has moved to improve the forecasting and offer new services that might fill that surplus capacity. Those services range from advanced business communications networks for computer data to low-cost international phone communications.
These new services and an expected rise in Intelsat's traditional traffic should bring it close to an anticipated $420 million in revenue by the end of this year.
However, a new transatlantic fiber optic cable being built by AT&T Co. and several European telephone networks is set to go into operation in 1988 and is expected to siphon off more potential Intelsat traffic. Moreover, a new Washington-based company called Tel-Optik Ltd. has petitioned the FCC for permission to provide a private transatlantic fiber optic cable by 1989.
The possibility that many companies will route more of their telecommunications traffic through undersea cables rather than via satellite, may force Intelsat to lower its prices to compete. Unless traffic volume rises dramatically, that could significantly reduce its revenue.
Whether by satellite or cable competition, Intelsat will have to compete for business in a way it has never had to before. After two decades of growth, market forces that didn't exist five years ago assure that Intelsat will become a very different organization over the next 20 years.