For more than two decades, the Communications Satellite Corp. has served as the technological cradle for an emerging global communications industry. It was Comsat that established the first global satellite network to send telephone calls across the Atlantic. And it was Comsat that made global maritime communications possible.
Since its creation in the early 1960s, Comsat has been transforming pipedreams into reality using some of the best technical minds available. But now, after giving birth to a whole generation of technical innovations, many of Comsat's most talented "children" have left the company to compete with it.
Many of those who left said recently that they had been frustrated by Comsat's failure to move quickly into new markets.
John Puente, director of technology at Comsat from 1963 to 1973, left to form his own company, M/A-COM Inc. The Massachusetts-based firm has grown into a $750 million telecommunications equipment business.
"It was hard to be entrepreneurial," Puente said. "It was very difficult to get ideas across with government pressures, monitoring by the National Aeronautics and Space Administration, and the Federal Communications Commission." Puente had pushed Comsat to manufacture lower-cost satellite systems and launch satellites for a domestic communications business.
Others had similar experiences and desires. "One of the things I was trying to accomplish was to have Comsat build experimental and perhaps operational satellites," said Wilbur Pritchard, director of Comsat Labs from 1967 to 1973.
"I couldn't get the support of the board of directors on that -- I don't know why." Pritchard, who built up the Comsat labs from nothing to a staff of 350 people, was a founder of Direct Broadcast Satellite Corp., which plans to offer satellite-to-television broadcast services.
Herb Lustig said he left Comsat in the early 1980s because it "wouldn't unleash its competitive businesses." Lustig, a senior advisor in corporate development between 1980 and 1982, became director of business development for General Instrument Corp., a major New York manufacturer of cable TV hardware, video equipment and earth stations.
"There was a divergence of goals -- whether to protect the monopoly or to build new businesses -- and that took people in opposite directions," he said. "The lack of decisiveness frustrated me; people went on a technological instinct there but they would . . . examine it to death. I stopped growing."
Getting management to approve ideas for start-up companies or acquisitions frustrated Bruce Smith. After spending three years as president of Comsat Technology Products Inc., Comsat's manufacturing subsidiary, he left in 1983 to form CEO Network Technologies in Menlo Park, Calif., which builds private communications networks for businesses.
"The biggest problem Comsat had and still has is one of the heavy regulatory involvement of the federal government," Smith said. "I had to pass standards . . . that were far more stringent than I would have had to at any other company."
"I could have closed the door and treaded water," said Edward Kay, who held numerous business development and marketing positions with Comsat between 1979 and 1984. "But there isn't that gratification; I wanted Comsat to look at some things I wanted to do." Kay left to form Vitalink International Communications Corp., an international business service company in Vienna.
Comsat nixed a string of good ideas because of fears the monopoly over Intelsat services would be jeopardized, Kay said. The list includes fiber optic cables and using start-up Satellite Television Corp. for data as well as television service, he said.
Comsat says it is pursuing some of these ideas. "Those that fit into the business strategy, we are pursuing; those that did not fit in were not right for Comsat," a Comsat official said.
"That fails to mention all the businesses we did get into, such as maritime satellite communications, domestic specialized networks, selected equipment manufacturing, international television services and others," he said. "Our decisions are based on what makes strategic sense, not fear of losing our monopoly."
But the system doesn't always make it easy for entrepreneurs working for Comsat to launch new ventures, conceded Comsat Chairman Joseph V. Charyk.
"You set up business with the proper protective walls so you can avoid the accusation you are using your advantages in the regulated area to benefit your competitive position," Charyk said.
"It puts a burden on the company as a whole," said Comsat President Irving Goldstein.
"But there is some small price you have to pay here -- you can't be uninhibited and at the same time solve the problems we are talking about," Charyk added.
Bill Sisolak, with Comsat between 1981 and 1983, saw a series of "failed opportunities" and overspending on acquisitions that were "just not managed" after they were purchased. Sisolak left to form Telecom Associates, a Washington firm that markets satellite data communications equipment and services. "I don't find major fault with Comsat's strategy to diversify out of regulated businesses. There are no good and bad ideas; the whole point is how you execute them," he said.
Mat Nilson, who worked for both Comsat and Intelsat, the global satellite consortium, between 1969 and 1979, sees "a realism injected into Comsat that wasn't there before." Nilson is seeking to launch a domestic satellite system through his McLean company Advanced Business Communications Inc.
"The old guard thought there was nothing to stop Comsat -- they had been so successful in the monopoly business they would be successful in all these other endeavors," Nilson said.
Nilson credits Goldstein and Robert W. Kinzie, president of Comsat General, a competitive services subsidiary of Comsat, "with some very positive recent moves" in divesting themselves of unprofitable businesses and launching some auspicious ones.
Some critics say Comsat is changing, but not fast enough to keep it from losing ground.
"If Comsat were doing the things they are doing now then, I wouldn't have left," said Herbert Bradley, director of U.S. marketing for Comsat General, a Comsat subsidiary, from 1979 to 1982. Bradley has started Venture Communications Inc., a video stores chain based in Alexandria.