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80. Letter From the President's Special Assistant for Telecommunications (O'Connell) to the President's Special Assistant for National Security Affairs (Bundy)/1/ Washington, February 1, 1966. /1/Source: Johnson Library, National Security File, Charles E. Johnson Files, COMSAT--US Communications Policy, NSAM No. 338, #1 [1 of 2], Box 13. Confidential. Copies were sent to Komer and Charles Johnson. Dear Mr. Bundy: At a recent meeting,/2/ it developed that serious concerns exist in several departments of the Government as to: /2/Not further identified. a. The progress being made in exploiting the new capabilities of satellite communications. b. Restraints imposed or to be imposed on or by common carriers in the development of this new capability. c. The need for additional Executive Branch representations to the FCC on the authorized entity issue. d. Constraints on U.S. leadership in communication satellites as a result of the Communications Satellite Act of 1962 and the International Agreement of 1964. e. The future potential viability of Communications Satellite Corporation. f. The problems to be encountered in the 1969 international conference to determine a suitable permanent form of organization for the consortium. All these matters have been of continuing concern to me during the past year. Memoranda have from time to time been given to the President to acquaint him with the situation. It appears timely to make better known to all agencies the actions of my office on these matters and more importantly to receive proposals of the interested departments and agencies for policies, ways, and means to improve our progress in communications satellites./3/ I will appreciate receiving the views and guidance of all departments toward policy modifications they consider important to improve the position of the United States and in formulating further policy in this field. For this purpose, I propose the establishment of an Ad Hoc Committee to accomplish these objectives. I propose that the initial meeting of this committee be held at 10:00 A.M., Monday, February 7, 1966, in room 749, 1800 G Street, N.W., Washington. /3/In a February 3 note to Komer, Charles Johnson wrote: "O'Connell is trying to head off the establishment of a policy committee under the chairmanship of State by pre-empting the field with his own Ad Hoc committee. I don't think he will succeed because his tactic is too late and too transparent. The solution the Bureau of the Budget is thinking about and discussing with the major agencies is a continuing policy committee under State chairmanship with O'Connell providing secretariat services." In the margin next to the last sentence, Komer wrote "Amen." (Johnson Library, National Security File, Charles E. Johnson Files, COMSAT--Educational Purposes NSAM 342 (Domestic and Foreign), #1, Box 12) Would you be so kind as to let me know of your designated representative. Sincerely,
81. Editorial Note O'Connell was successful in his plan to establish a Communication Satellite Policy Coordination Committee. He saw the committee as the logical successor to the Katzenbach Committee of 1963-1964, which effected coordination of government policy during COMSAT's formative stages. In a letter of February 21, 1966, to Secretary Rusk, O'Connell spelled out some of the concerns which had prompted the formation of the committee, including: "Is research and development in the communication satellite field progressing as rapidly as required," and "Are we progressing with sufficient rapidity in exploiting the new capabilities of satellite communications?" He proposed that the first meeting be held on March 10. (National Archives and Records Administration, RG 59, Records of the Department of State, Central Files, 1964-66, TEL 6) No record was found of Secretary Rusk's concurrence, but a February 24 memorandum from Bundy to O'Connell refers to O'Connell's letter of February 21 to Rusk as establishing the committee. (Johnson Library, National Security File, Subject File, Communications (Nat'l Communications System, COMSAT, etc.), Vol. I, Box 6)
82. National Security Action Memorandum No. 342/1/ Washington, March 4, 1966. /1/Source: National Archives and Records Administration, RG 59, Records of the Department of State, NSAM Files: Lot 70 D 316. Confidential. Also printed in John M. Logsdon, ed., Exploring the Unknown: Selected Documents in the History of the U.S. Civilian Space Program, vol. III: Using Space (Washington, D.C.: National Aeronautics and Space Administration, 1998), pp. 95-96. TO SUBJECT In carrying out his responsibilities under the Communications Satellite Act of 1962, the President has directed that the United States Government take active steps to encourage the construction of earth-station links to the worldwide communications satellite system in selected less-developed countries. Emphasis in this effort is to be on encouraging the selected countries to construct these stations out of their own resources, stressing the many benefits of direct access to the global communications satellites. The Special Assistant to the President for Telecommunications/Director of Telecommunications Management has been designated by the President as the agent for coordinating this project. The State Department and AID are to determine (a) the countries to be included in this program and (b) U.S. Government actions, if any, for encouraging the accelerated construction of earth stations and related facilities in these countries. In cases involving possible U.S. technical or financial assistance, the President has directed that no special funds should be requested. All funding of such projects is to be handled out of current AID FY 1966 appropriations or out of regular FY 1967 funds. The Department of State is to report its findings to the President, through the Special Assistant for Telecommunications/Director of Telecommunications Management, by July 1, 1966./2/ /2/See Document 86. The President has directed that the Executive Agent and Manager of the National Communications System and U.S. Government agencies operating facilities outside the NCS utilize the global communications satellite system in handling traffic whenever possible and where national security requirements will not be compromised, consistent with sound cost-efficiency and other management considerations. A Working Group is to be established, in accordance with the President's instruction, to study the possibilities of using the communications satellite system to advance information exchange and educational purposes, in line with his desire that the United States play a greater role in international educational efforts, particularly in less-developed countries./3/ /3/The White House Working Group on Educational Uses Abroad of Communications Satellites submitted its report through O'Connell to Rostow on June 30. (Memorandum from Read to Rostow, June 30; National Archives and Records Administration, RG 59, Records of the Department of State, Central Files, 1964-66, SP 12-1) Regarding the President's approval of the report, see Document 92. Bromley Smith
83. Editorial Note As the Department of State and the Agency for International Development moved to implement NSAM No. 342, Leonard Marks, Director of the U.S. Information Agency, informed Under Secretary Ball on March 7, 1966, that the international common carriers (AT&T, ITT, World Communications, RCA Communications, and Western Union International) had informally expressed their willingness to provide financing for earth stations without recourse to government financing. Marks suggested that the Attorney General be given clearance to suspend anti-trust considerations to allow the companies to cooperate. (Department of State, NSAM Files: Lot 72 D 316) In an April 27 memorandum to Under Secretary of State for Economic Affairs Mann, Assistant Secretary of State for Economic Affairs Solomon opined that government financing still should be considered because of the history of unsuccessful efforts of the carriers and less-developed countries (LDCs) to come to mutually acceptable terms. Since most LDCs chose to work through government or domestic entities, "There is considerable reason to believe that in many countries there will be no rapid earth station construction if the only help available comes from private United States companies." (Ibid.) On April 22 Mann suggested that the Department of State and the Agency for International Development establish a working group under Deputy Secretary of State for Economic Affairs Frank Loy to finalize site choices and prepare a report for the President. (Letter from Mann to Marks, April 22; ibid.)
84. Memorandum From the President's Special Assistant for Telecommunications (O'Connell) to President Johnson/1/ Washington, June 3, 1966. /1/Source: Johnson Library, National Security File, Subject File, Communications (Nat'l Communications System, COMSAT, etc.), Vol. II [2 of 2], Box 6. No classification marking. There has been a unanimous expression of conclusion by the Interim Committee (the operating management instrument of the International Telecommunications Satellite Consortium--INTELSAT) that the Federal Communications Commission has been delaying contracting actions decided upon by the Consortium. It is a further conclusion of the Interim Committee that the Federal Communications Commission is seeking to exercise jurisdiction on behalf of the United States which can override or nullify the decisions of the international body. In two meetings which I have held with the Acting Chairman of the Commission, Mr. Rosel Hyde, and with a representative of the State Department, it has been made clear by Mr. Hyde that, in his opinion, the Commission does not have jurisdiction of this nature. I concluded that it was important for this office to make a clear statement available to the Commission as a whole, and for this purpose transmitted the attached letter (Enclosure 1) to the Acting Chairman of the Commission. The State Department also transmitted a letter to the Commission and a copy is attached at Enclosure 2./2/ /2/Enclosures 2 and 3 are not printed. Enclosure 3 is a copy of the resolution which was passed unanimously by the international Interim Committee of INTELSAT on May 27, 1966. J.D. O'Connell Enclosure 1 Letter From the President's Special Assistant for Telecommunications (O'Connell) to the Acting Chairman of the Federal Communications Commission (Hyde) Washington, June 1, 1966. Dear Mr. Hyde: This is in regard to the application of the Communication Satellite Corporation (COMSAT) which has been pending at the Federal Communications Commission since February 25, 1966, and which requests authority to construct six satellites for the INTELSAT global system. COMSAT filed a notification with the FCC on April 27, 1966, of a proposed contract with TRW, Inc. for the satellites. As you know, the basic decision to award the construction contract for the satellites to TRW was made by the INTELSAT Interim Communication Satellite Committee (ICSC) in January 1966. At that time the ICSC directed COMSAT, as the manager of the INTELSAT system, to proceed with definitive negotiations with TRW. This basic decision was made after full consideration of competing proposals submitted by Hughes Aircraft Company and Radio Corporation of America. On March 15, 1966, during the negotiations between COMSAT and TRW, Hughes filed two more proposals for satellites. The ICSC was advised of the additional Hughes' proposals; but at its meeting on April 13, 1966, nevertheless, authorized the manager to execute the proposed contract with TRW. On April 27, 1966, therefore, the proposed contract was filed with the FCC pursuant to its procurement regulations. Despite these two decisions by this international body to award the basic construction contract for the satellites to TRW, its manager, COMSAT, is unable to go forward with the program because it has not received the requisite authority from the Commission. You are aware, I am sure, that this delay is creating serious diplomatic repercussions and is raising serious questions concerning the authority of the FCC to review, qualify, or annul a valid decision of an international organization constituted by an international agreement to which the United States is a signatory. In view of the responsibilities for the satellite program which have been delegated to me by the President I feel obligated to make my serious concern known to the Commission. Basically, I am concerned because if the matter is not soon decided by the FCC, I believe that United States interests will be irreparably harmed with serious residual damage to the United States in the international discussions on the permanent satellite system and organization when these are held. In commenting, I am fully aware that the Communications Satellite Act of 1962 establishes FCC jurisdiction over COMSAT as a United States entity. However, the Act does not appear to contemplate the role which COMSAT must play as the elected manager of an international partnership, with responsibility for implementing policy decisions of the designated governing instrument of the partnership. It would be most helpful if the Commission could expedite review of the COMSAT filing. In order to avoid the possibility of further problems of this nature it would also be most helpful if the Commission could give favorable consideration to the adoption of rules and procedures which would clearly delineate the differences between COMSAT as a domestic corporation and as the manager of an international consortium and which would prevent possible future claims that the Commission's procedures have delayed the progress of INTELSAT in achieving a global system. If the Commission feels that it is not possible or advisable to adopt such procedures, I would recommend that remedial legislation be enacted without delay. Sincerely,
85. Letter From the Deputy Assistant Secretary of State for Economic Affairs (Loy) to the Director of the Defense Communications Agency (Starbird)/1/ Washington, June 4, 1966. /1/Source: National Archives and Records Administration, RG 59, Records of the Department of State, Central Files, 1964-66, TEL 6. Confidential. Drafted by Nelson (E) and cleared by Gil Carter (AID) and O'Connell. Dear General Starbird: National Security Action Memorandum 342 requires that this Department and A.I.D. determine what steps should be taken, if any, to encourage the early establishment of earth stations in selected less-developed countries for use in conjunction with the INTELSAT system. Previously it was determined that the following countries should be tentatively considered as the "selected" countries: Brazil This list is subject to change and certain of these countries are accorded a higher priority than others. In general the countries were selected for a combination of reasons including political, economic, technical and national security factors. We are of course aware of your interest for the establishment of earth stations in Thailand and the Philippines. However, we believe it would be helpful if you could inform us which of the above listed countries, or other developing countries not listed above, the Defense Department would like to see placed in a priority position in the establishment of earth stations, with particular regard to the need for such stations in meeting NCS telecommunications requirements. Sincerely yours, /2/Printed from a copy that bears this typed signature.
86. Report Prepared in the Department of State and the Agency for International Development/1/ Washington, June 27, 1966. /1/Source: Johnson Library, National Security File, Charles E. Johnson Files, COMSAT--Educational Purposes, NSAM 342 (Domestic and Foreign), #3, Box 12. Confidential. Transmitted under cover of a memorandum from Read to Rostow through O'Connell. A typed cover note dated July 25 from Charles Johnson to William Bowdler, Edward Hamilton, William Jorden, and Howard Wriggins, reads: "This is an advance copy of a State Department report now being reviewed in the Office of Telecommunications Adviser prior to transmittal to the President through Walt Rostow. I would appreciate very much receiving your views with respect to the findings and conclusions covering the individual countries that you keep your eye on. For your information, those of us who have looked at the report feel that it does not reflect the urgency and importance attached to this project by the President in NSAM 342." SUBJECT Background In June 1965 the Early Bird satellite was placed in commercial operation. Additional satellites will be launched this year and next, as indicated in Annex I./2/ Earth stations required to receive and transmit messages via satellites are now in place in the United States, Canada, United Kingdom, France, Germany, Italy and Japan. Many more are planned in other developed countries. None have been built in less-developed countries. /2/Not printed. The Communications Satellite Act of 1962 contemplates a single global system providing communication by satellite to less-developed as well as developed countries. In NSAM 342, Annex II,/3/ you requested that active steps be taken to encourage construction by selected less-developed countries of earth stations linking these countries to the global system. You asked that State and A.I.D., by July 1, 1966, determine the countries to be included in this program of encouragement and recommend appropriate action, if any, to be taken. You also directed that, to the extent possible, less-developed countries be encouraged to construct earth stations with their own resources, and that in cases involving United States financial or technical assistance, no special funds be requested other than those included in fiscal year 1966 and 1967 appropriations. /3/Printed as Document 82. Conclusions 1. Prospects for early construction of earth stations are quite good in a few less-developed countries. In most LDCs, however, stations will not be built on a timely basis without some active United States governmental encouragement. 2. The absence of earth stations in LDCs to date is not particularly surprising. The basic characteristics of the satellites to be used in the global system (and thus the required earth stations) were not determined until April 1966 after experience with Early Bird had been evaluated. Moreover, earth stations make no sense in many of the poorer LDCs which lack the requisite local communication system. 3. In any program of assistance by the United States to extend the global system to less-developed countries the following countries should be given priority: Central America (one station serving all 6 countries) India* *Member of INTELSAT. The criteria used in the selection of these countries are set out in Annex III./4/ /4/Not printed. 4. There are three principal factors which tend to slow down the establishment of earth stations in developing countries. First, these countries require time to make the decision to build a station. This is not surprising considering how new this development is and the difficulty of allocating scarce resources. Second, the countries frequently have difficulty in determining the national policy as to the ownership of these stations--should they be nationally owned or should foreign interests be encouraged to participate in the ownership. Third, as earth stations involve a foreign exchange cost of $3 to $5 million, many countries will require some financial assistance. 5. The United States can help overcome the first and last of these three obstacles, and has indeed begun to do so. Through discussions with Embassy officials and visits from technical experts from Comsat Corporation and other United States companies, as well as by sponsorship of an international seminar on earth station technology, the United States has helped the LDCs understand how the global system functions and the kind of earth stations that are needed by such systems. In the area of financial assistance, the United States has indicated to Ethiopia, Nigeria and the three East African Common Services nations willingness to consider assistance via the Export-Import Bank or A.I.D. A fuller description of United States activities to date is attached in Annex IV. 6. The United States Government is by no means the only source of financial assistance. The available sources include the following: 1. Private companies and communication carriers (with or without help of the Export-Import Bank) 2. World Bank (I.B.R.D.) 3. Inter-American Development Bank (and similar regional development banks) 4. Export-Import Bank 5. United States Government assistance through A.I.D. Financing plans generally contemplate that the country will finance the local current component. A few countries, such as Brazil and the Philippines, may also be able to finance all or a part of the foreign exchange requirements. A discussion of each of these sources is attached at Annex V./5/ /5/Not found attached. 7. Firm decisions to build and finance earth stations will take some additional time--both for the LDCs involved and the potential sources of financial help. If it were vital that earth stations be constructed in the priority countries not just in the near future but on a crash basis, the United States could achieve this goal best by not waiting for other sources but rather by strong promotional efforts of the Export-Import Bank or, more likely, direct offers of A.I.D. assistance. This does not seem to be a necessary or desirable course of action. The field of satellite communication is so glamorous, the general interest so high, and the various plans for earth stations are being so actively pursued, that in most of the countries on the priority list other forms of financing will probably become available in the relatively near future. The reason A.I.D. has expressed willingness to help the African countries referred to in paragraph 5 is that these seemed to be unlikely to obtain other forms of assistance. For the same reason A.I.D. is prepared to consider possible assistance to Turkey, Pakistan and Korea, in each case with appropriate Export-Import Bank coordination. A country by country resume of prospects for financing of each of the selected countries is attached at Annex VI./6/ /6/Not found attached. Recommendations In view of the above conclusions we recommend: 1. That the United States continue its present program of educating the LDCs as to (i) the value of membership in the global system, and (ii) the desirability, in selected LDCs, of establishing earth stations. 2. That we continue to encourage and stimulate sources of possible financial and technical assistance other than A.I.D. to provide such assistance to the countries on the priority list at an early date. 3. That A.I.D. continue to consider financing for earth stations in those countries on the priority list, assuming other financing is not available on reasonable terms and that the project satisfies development loan criteria. 4. That State and A.I.D. keep abreast of the progress in the construction of earth stations, and plans for such construction, and by January 1, 1967 report to you (a) the status of earth station construction in the priority countries, (b) whether, generally, anticipated assistance from non-United States Government sources has indeed materialized, and (c) what, if any, further United States Government action should be taken. Annex IV United States Government Actions to Date 1. In 1964 the Department of State in cooperation with the Communications Satellite Corporation initiated a program of visiting and contacting many nations, including each of the listed LDCs, to explain the potentials of satellite communications and to urge their membership in INTELSAT. Membership in INTELSAT has grown from the initial eleven signatories in August 1964 to fifty-two at the present. Of the listed LDCs, the following are INTELSAT members: Brazil, Chile, Colombia, Ethiopia, India, Nigeria, Pakistan and Thailand. These countries are committed to invest a total of approximately 7-1/2 million dollars in the space segment of INTELSAT. They are paying their monthly assessments regularly. 2. The United States Government has encouraged the construction of earth stations. The joint State/Comsat contacts promoting membership in INTELSAT also include discussions on technical assistance, and in depth discussions of such subjects as circuit requirements and site selections. With the Department's active encouragement United States industry has been promoting the sale of earth stations throughout the world. 3. On May 16-27, the Department conducted a Seminar on Communications Satellite Earth Station Technology. From May 28-June 3 field trips to earth stations and space installations in this country and Canada were provided the foreign participants by United States industry and NASA. The Seminar provided delegates from thirty-five new or developing countries, as well as eleven more advanced countries, with basic knowledge and practical information on earth station economics, earth station technical requirements, and space segment access requirements. This information is useful to the LDCs in implementing their respective earth station programs. Commercial exhibits, field trips, and receptions provided opportunity for extended discussions between the participants at the Seminar and suppliers of earth station equipment.
87. Memorandum From the President's Special Assistant for Telecommunications (O'Connell) to President Johnson/1/ Washington, July 28, 1966, 4 p.m. /1/Source: Johnson Library, National Security File, Charles E. Johnson Files, COMSAT--Educational Purposes NSAM 342 (Domestic and Foreign), #3, Box 12. Confidential. SUBJECT Progress has been made in recent months towards meeting the President's desire that the U.S. Government take active steps to encourage the construction of earth station links to the worldwide communications satellite system in selected less developed countries. Pursuant to your direction as conveyed in National Security Action Memorandum No. 342, dated March 4, 1966, the State Department has determined: (a) The countries recommended for inclusion in this program and (b) current and potential U.S. Government actions to encourage accelerated construction of earth stations and related facilities. Action has been limited in accordance with your direction in that no special funding has been considered appropriate. The enclosed memorandum has been prepared for the President jointly by the Department of State and the Agency for International Development and is transmitted herewith in accordance with NSAM 342./2/ /2/NSAM No. 342 is Document 82. An advance copy of the enclosed report is printed as Document 86. You will note the positive action taken with respect to Africa. This action was stimulated by the President's remarks to the Organization of African Unity on May 26, 1966/3/ and the constructive assistance of Ambassador Ed Korry. /3/Johnson spoke of three missions on which Africa and the United States could work together: First, to strengthen regional economic activities; second, to increase the number of trained Africans; and third, to develop effective communications. (Public Papers of the Presidents of the United States: Lyndon B. Johnson, 1966, Book I, pp. 556-560) Planning for the construction of earth stations in only three of the thirteen countries selected by the State Department appears to be lagging. These countries are Turkey, Pakistan and Korea. As noted in the enclosed memorandum, AID is prepared to consider possible assistance to these countries. I recommend that you approve the recommendations set forth in the enclosed memorandum and that you approve stepped-up U.S. initiatives with respect to Turkey, Pakistan and Korea. I will continue to serve as the President's agent for coordinating this project with the State Department and AID and will report by January 1, 1967 concerning further progress made. J.D. O'Connell
88. Letter From the Deputy Under Secretary of State for Political Affairs (Johnson) to the President's Special Assistant for Telecommunications (O'Connell)/1/ Washington, September 3, 1966. /1/Source: National Archives and Records Administration, RG 59, Records of the Department of State, Central Files, 1964-66, SP 1-1. Confidential. Drafted by Nesbitt (SCI) and cleared by Loy (E), George (G), and Pattman (L). Dear Mr. O'Connell: At the March 23 meeting of the National Aeronautics and Space Council, the Vice President asked members to examine our objectives and programs for international cooperation in space to see if proposals might be developed for making such cooperation even more effective than it is. On that occasion the Vice President appointed a subcommittee under the Chairmanship of the State Department and requested that each member of the Council submit to it his ideas on this important subject. In pursuance of the directive from the Vice President the Department has in cooperation with other agencies of the Government, including your office, reviewed a number of possibilities for expanded international cooperation in space matters. During the course of this review it has become evident that NSAM 338,/2/ which established policy concerning United States assistance in the development of foreign communications satellite capabilities should be reviewed in light of recent developments. /2/Document 75. NSAM 338, which has served well as an instrument of non-proliferation for both commercial and unique governmental communications satellite systems, by the same token limits the flow of advanced technology from the United States to foreign countries. It has become apparent in recent months that the restrictive aspects of NSAM 338 have become a political irritant to a number of European countries and are serving to limit the effectiveness of international cooperation in space matters to a degree no longer justifiable. Under the circumstances, and as provided in the last paragraph of NSAM 338, the Department requests that a review of the NSAM be undertaken and especially of those provisions which relate to the export of communications satellite technology. Sincerely yours,
89. Editorial Note Herman Pollack wrote Deputy Under Secretary of State U. Alexis Johnson on September 21, 1966, that "a number" of important European members of Intelsat felt unable to participate because of the restrictions on international cooperation imposed by NSAM No. 338 by inhibiting the export of satellite technology. "This feeling has become a significant political irritant affecting our relations with these countries." (National Archives and Records Administration, RG 59, Records of the Department of State, Central Files, 1964-66, SP 1-1) James Webb, Director of the National Aeronautics and Space Administration, voiced similar feelings in an October 3 letter to O'Connell: "There is no doubt in our mind that this has fostered an impression of obstructionism on the part of the United States, exacerbating existing political strains and prejudicing the climate for cooperative space programs." Webb was also concerned about the continued U.S. "domination" of Intelsat by denying the Europeans an opportunity to improve their competitive position and win contracts. "Such an impression serves to support the arguments of particular countries that only the establishment of independent European systems can relieve the situation." (Johnson Library, National Security File, Charles E. Johnson Files, COMSAT--US Communications Policy NSAM No. 338, #1 [1 of 2]) Officials in the U.S. Embassy in London reported on November 9 that the benefits of a change would have a psychological impact rather than cause a real technological advance. "It is believed most countries are basically concerned with industrial aspects and are quite content with single system concept so long as they obtain fair slice of the equipment cake." (Telegram 3872 from London, November 9; National Archives and Records Administration, RG 59, Records of the Department of State, Central Files, 1964-66, TEL 6) The Embassy in Bonn warned on November 14 that German industrial officials believed that the United States was "not sincere in our repeated offers to collaborate in advanced technology" and to work with the Europeans, treating them as "equal and respected partners." While official German support for Intelsat was strong, the Embassy warned: "The potentially damaging effect that our restrictive Comsat policy could have on our relations with the FRG should not be obscured by the relatively minor reaction noted in Germany so far." It seemed like a contradiction, the telegram noted, between "the warm US reception given the Italian Technology Gap initiative" and "what would seem to be an effort to preserve and even broaden the technology gap in the vital communication area." (Telegram 5840 from Bonn, November 14; ibid.) [Continue with the next documents]
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