II. Introduction Policy Statement
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4.
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As the Commission recognized in the 1970
Report (22 FCC 2d at 88, 95–96), and as confirmed by the applications and
responses filed pursuant to that Report, the satellite technology has the
potential of making significant contributions to the nation's domestic
communications structure by providing a better means of serving certain of
the existing markets and developing new markets not now being served. There
are concrete proposals before us for the use of communications satellites to
augment the long-haul terrestrial facilities of existing carriers for
point-to-point switched transmissions services, and to connect off-shore
distant domestic points (i.e., Alaska, Hawaii, Puerto Rico) to the contiguous
states. There are also proposals for the use of satellites as a means of
providing point-to-multipoint services, such as program transmission,
although plans for such use are now most tentative and uncertain. Other
proposals reflect the view that the most important value of domestic
satellites at the present time lies in their potential for developing new
markets and for expanding existing markets for specialized communications
services.
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5.
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Notwithstanding the specific proposals that
have been submitted, the true extent and nature of the public benefit that
satellites may produce in the domestic field remains to be demonstrated. The
United States has a well-developed and rapidly expanding complex of
terrestrial facilities, and advances in terrestrial technology and operations
can be expected to continue the present trend toward reduced transmission
costs and more efficient services. Although pointing to some increased
operational flexibility in the routing of its traffic, the predominant
terrestrial carrier. AT&T, disclaims that the satellite technology
presently offers any cost savings or other marked advantages over terrestrial
facilities in the provision of the switched services that constitute the bulk
of its traffic, message toll telephone (MTT) and wide area telephone service
(WATS). At the same time, there is an uncertainty, that can only be resolved
by actual operating experience, as to whether the time delay inherent in
voice communications via synchronous satellites will provide an acceptable
quality of service to the general public when domestic telephone traffic is
routed indiscriminately and on a large scale basis via satellite and
terrestrial facilities.
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6.
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Although the satellite technology appears to
have great promise of immediate public benefit in the specialized
communications market, here too there are uncertainties as to how effectively
and readily satellite services can develop or penetrate that market. Thus, in
the area of point-to-multipoint transmission, the commercial broadcast
networks are as yet undecided as to whether to use this technology in whole
or in part. We do have a concrete proposal for a CATV network from Hughes,
expressions of interest by public broadcasting and other educational
entities, and the possibility of interest by independent suppliers of program
material to CATV and broadcast outlets. Moreover, several system applicants,
in addition to seeking to attract program transmission business, have
premised their proposals on the sale of other specialized services—in part as
a complement to existing or proposed terrestrial offerings, but in the main
with the expectation of expanding existing special service markets and
developing new markets. To be sure, the applications generally do not
identify specific services that are new or innovative. However, in our
judgment, the uncertainties as to the nature and scope of the special markets
and innovative services that might be stimulated will only be resolved by the
experience with operational facilities.
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7.
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Under the circumstances, we will be guided
by the following objectives in formulating the policies to govern our
licensing and regulation of the construction and use of satellite systems for
domestic communications purposes, namely:
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(a)
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to maximize the opportunities for the early
acquisition of technical, operational, and marketing data and experience in
the use of this technology as a new communications resource for all types of
services;
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(b)
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to afford a reasonable opportunity for multiple
entities to demonstrate how any operational and economic characteristics
peculiar to the satellite technology can be used to provide existing and new
specialized services more economically and efficiently than can be done by
terrestrial facilities;
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(c)
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to facilitate the efficient development of
this new resource by removing or neutralizing existing institutional
restraints or inhibitions; and
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(d)
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to retain leeway and flexibility in our
policy making with respect to the use of satellite technology for domestic
communications so as to make such adjustments therein as future experience
and circumstances may dictate.
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8.
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We are further of the view that multiple
entry is most likely to produce a fruitful demonstration of the extent to
which the satellite technology may be used to provide existing and new
specialized services more economically and efficiently than can be done by
terrestrial facilities. Though specialized services constitute a relatively
small percentage of AT&T's total traffic, it is presently the predominant
terrestrial supplier of specialized services. There is some existing and
potential competition from Western Union and any new specialized carriers
authorized pursuant to the Commission's decision in Specialized Common Carrier Services (29 FCC 2d 870). But the
capacity of their terrestrial facilities is small compared to those of
AT&T or the high capacity facilities proposed by the satellite system
applicants.2 The presence of competitive sources of supply of
specialized services, both among satellite system licensees and between
satellite and terrestrial systems, should encourage service and technical
innovation and provide an impetus for efforts to minimize costs and charges
to the public.
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2 The
Commission has also authorized terrestrial facilities to various miscellaneous
carriers providing program transmission service to CATV systems and
broadcasters.
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