The administration's recent endorsement of international communications satellite systems separate from Intelsat raises serious questions as to how the United States can introduce competition in international telecommunications consistent with our foreign policy interests and our international obligations. The answer to these questions will affect the full range of our relations with key allies and important developing countries.
In creating Intelsat, 109 nations have pooled their financial and technical resources to establish and operate a single, global satellite communications network. Today, Intelsat carries two-thirds of the world's international telecommunications traffic and virtually all international television transmissions. The organization offers over 30 services, from telephone calls to sophisticated, digital, computer-to-computer exchanges and video conferences across some 400 pathways among over 140 countries. Through Intelsat, it is possible for a person in the United States to instantly, reliably and inexpensively reach almost any point on Earth. And it is this global reach that lies at the heart of Intelsat's importance to us as a nation.
For many nations, many developing and isolated countries in particular, Intelsat offers perhaps the only ability to communicate directly with points around the globe at reasonable rates. Because of Intelsat's Western orientation, the world's main telecommunications system today has an American -- and not a Soviet -- character, although the Soviets have developed their own Intersputnik System. A large proportion of our military and diplomatic telecommunications are carried over Intelsat satellites, as is the hot line between Moscow and Washington. Almost singularly among international organizations, Intelsat has conducted itself in a businesslike, nonpolitical way, devoid of the politicization that has paralyzed many other international organizations. Intelsat serves these and many other U.S. foreign policy interests as only a global system could.
So the administration's decision raises many questions that must be squarely faced:
How will the Soviets, through their own Intersputnik System, respond to any apparent U.S. willingness to fractionate Intelsat's traffic?
How will the developing nations, who rely on Intelsat as their essential telecommunications link with the rest of the world, respond if the United States moves toward bypassing the system, particularly if the Soviets offer these countries alternative service?
How will U.S. multinational banks and companies that depend upon reliable, low-cost telecommunications with developing nations be affected?
Will other developed countries follow suit with their own private, non- Intelsat systems? And, if they do, from whom will they procure their satellites and how will they be regulated?
How will American Armed Forces, which rely heavily on Intelsat's global network for communications, be affected?
These are serious questions with profound implications for our security and prosperity, and they are the types of questions that now face the Federal Communications Commission and Congress.
Clearly, the decision to alter U.S. policy toward international satellite communications has serious foreign policy and economic implications. Recognizing them, the administration -- while approving the principle of separate satellite systems -- strongly endorsed the Intelsat network and pledged to protect its viability by imposing two conditions on any separate system. Specifically, separate systems: 1) could not carry regular, long- distance telephone service; and 2) must go through a formal consultation with Intelsat to ensure technical compatibility and, more important, to demonstrate that the separate systems will not cause economic harm to Intelsat itself.
These conditions represent minimum criteria by which separate systems should be judged. Many are concerned, however, as to how these conditions will be implemented by the FCC as it begins its rule-making procedure.
Another frequently voiced concern is the need to hear the views of our foreign allies and partners before moving ahead. This need has not been met during the year-long internal review of this issue by the executive branch, nearly all of which was conducted in secret. Now that a first public step has been taken, the United States must discuss the options and their implications with the other members of Intelsat. Finally, options open to Intelsat to respond to competition on price and services must be explored, along with the possibility of changes in the Intelsat Agreement.
The handful of applications that have been submitted to the FCC for separate satellite systems are ironic testimonials to Intelsat's and Comsat's success in bringing to fruition, in the space of two decades, an organization and a technology that has served American interests extremely well. Economically, politically, strategically and in many other ways, we take for granted the benefits that this unique example of international cooperation provides. As the FCC now looks at alternative structures, it should not lose sight of how much we as a nation have at stake.