Author Title

DOCUMENT RESUME

ED 062 799 EM 009 842

AUTHOR Chayes, Abram TITLE The Impact ot Satellites onCable Communications. INSTITUTION Alfred P. Sloan Foundation, NewYork, N.Y. PUB DATE May 71 NOTE 31p.; Report of the SloanCommission on Cable Communications

EDRS PRICE MF-$0.65 HC-$3.29 DESCRIPTORS Cable Television; CommunicationSatellites; Community Antennas; Educational Television;Instructional Television; Programing (Broadcast); Telecommunication IDENTIFIERS CATV; *Sloan Commission onCable Communications

ABSTRACT Two recent developmentsin communications satellite technology may speed the comingof cable TV (CATV) networks.First, increases in satellite power arereducing the cost cf ground stations. Second, a connectionbetween one ground station,the satellite, and any other groundstation is no longer necessarily fixed. Now one station cancommunicate with another, and thenhave the circuit switched orreconnected to some otherstation. Lower-cost ground stations could makepossible a multi-channelnetwork of broadcast receiving stations.Circuit switching could makepossible a switched two-way communicationnetwork that would allow a groupof CATV systems to interconnectfor special interest programsat any time. A proposal to startbuilding such a system hasbeen made by Hughes Aircraft. It callsfor two 12-channel satellites, anumber of receive-only earth stations,and two two-way stations totransmit to any of theothers. Two steps may be taken toimprove program quality and reduce centralized programcontrol: 1) require the operatorto donate some capacity to a freenational instructional TVnetwork; 2) authorization for operation shouldrequire experimentation andbe for a limited timeonly. (MG) FILMED FROMBEST AVAILABLECOPY

U.S. DEPARTMENT OF HEALTH. EDUCATION & WELFARE OFFICE OF EDUCATION THIS DOCUMENT HAS BEEN REPRO- DUCED EXACTLY AS RECEIVED FROM THE PERSON OR ORGANIZATION ORIG- INATING IT. POINTS OF VIEW OR OPIN- IONS STATED DO NOT NECESSARILY REPRESENT OFFICIAL OFFICE OF EDU- CATION POSITION OR POLICY.

THE IMPACT UF SATELLITES OH CABLE COMMUNICATIONS

by

Abram Mayes' Professor of Law Harvard University

May 1971

A Report Prepared forthe SLOAN COMMISSION ON CABLECOMMUNICATIONS

author The opinions expressedherein are the views of the members and do not reflectnecessarily the opinions of the of the Sloan Commission onCable Communications or of the A1fred P. Sloan Foundation. CONMNICATIONS THE IMPACT OFSATELLITES ON CABLE

the most dynamic Cables and satelliteshave been two of expansion elements in a decade ofbreath-taking communications The They began At aboutthe same time. in the United States. 1950's, systems went intooperation in the first rudimentary cable communication by satellitewere con- and the firstexperiments with Telstar, the firstpracticable ducted toward the end ofthe decade. in the sameperiod, communications satellite waslaunched in 1962, and In the ensuing years, cable systems beganmoving into urban areas. involved in thedeployment each mode has solvedthe technical problems Each has embracedits most obvious of reliable operationalsystems. regulatory issues. initial markets and hasgrappled with threshold growth, but in directionsnot Each is facing aperiod of exponential when, for the firsttime, altogether clear. These prospects emerge policy is too important there is a growing sensethat communications

It is altogetherappropriate, there- to be left to thetechnicians. Communications should ex- fore, that the SloanCommission on Cable between these twoincreasingly important amine the interrelations

communications modes.

Some TechnicalBackground

system, the satellitein orbit In a satellite communications from an earth sta- acts as a relay, picking upsignals transmitted

and sending them on to areceiving earth tion, amplifying them -2-

of systems are now in use: random station. Two principal kinds and synchronous orbit, exemplified bythe Russian Molniya system, Telecomolunica- orbit, which is the formadopted by the International tions Satellite Consortium(INTELSAT). revolves in an ellip- In the random orbitsystem, the satellite point on theearth's tical orbit and is visiblefrom any particular In order to havecontinuous surface for only a portionof each day. must include communications.between any twoearth stations the system disappears over the a number of satellitesspaced so that when one already visible to both. horizon of one of thestations another is least two antennas, and Earth stations in such asystem must have at it makes its pas- they must be capableof tracking the satellite as

sage acrosc thesky. satellite travels in an In a synchronousorbit system the At this altitude,the or- orbit 22,500 miles abovethe equator. rotates on its bital speed is equal to the speedat which the earth

appears to hangmotionless in the axis. The satellite therefore A synchronous sky above a single point onthe earth's surface. visible over a third or moreof the satellite is simultaneously through earth's surface - from about750 north to 75° south latitude satellites, as in the 150° of longitude. Three properly positioned

operational systems. The statement is truefot all existing done with passivesatellites (the Echo Early experimental work was perforning any series), which simply reflectthe signals without For the future, directinterconnection be- amplification function. intervening ground tween satellites can beenvisioned, without an is unlikely to be ofmuch practical The passive satellite link. satellite-to- significance in the communicationsfield, but direct interconnecting satellite links may becomeincreasingly important in satellite systems.

3 -3- for the polar the wholeplanet, except INTELSAT system,can cover simpler earthstation satellite permits regions. A synchronous hand, emplacing antenna. Onthe other design, with asingle, fixed orbit at complicated, andthe equatorial the satellitesis more orbital arc) isin some sense a 22,500 miles(the geostationary

limited resource. has beenfurnished by by the satellite To date, thepower used satellite.Nuclear mounted on thesurface of the arrays ofsolar cells &reatly ex- for the futureand will power systemsare in prospect The communica- communicationssatellites. tend the lifeand power of of the is governedby the payload tions capacity ofthe satellite Since there delivery system. efficiency of thepower booster and the has both of thesedimensions, capacity has been rapidgrowth along satel- Early Bird, thefirst INTELSAT been growingexponentially. telephone provided about240 trans-Atlantic lite, launchedin 1965) the capacitythen availa- Even so, itpractically doubled channels. * the most ad- INTELSAT III,until recently ble on submarinecables. circuits, andthe first of 1600 voice vanced vehicle,has a capacity on 9000 voicecircuits, depending INTELSAT IV candeliver 3000 to member of thisseries, of its beams. The first the configuration over theAtlantic and positioned launched in Januaryof this year, or 12 TVchannels or any 5000 voice circuits "(keen, provides about only a year trans-Atlantic cable waslaid in 1956, The first increasing Cable capacityis also before SputnikI went up. trans-Atlantic cable,TAT-5, The mostrecently authorized capacities seem tobe rapidly. Much larger provides 750 voicechannels. will be com- but it is notclear that they technically feasible intercontinentaldistances. petitive withsatellites at

4 -4-

developments contributingheavily combination of these. One of the focus the beam expansion is thegrowing ability to to this capacity small area of the transmitted from thesatellite on a relatively and increasing the effectivepower delivered earth's surface, thus flexibility in otherdimensions as well. providing important

Institutional Framework

1 applications of satellitecommunication The first practical distance internationaltelecommunications, ;ere in thefield of long high. In advantage of the spaceroute seemed where the comparative Congress call for timelypolicy action, response toPresident Kennedy's Satellite Act of 1962, establishing a passed the Communications Corporation (Comsat) as Communications Satellite federally chartered participation in aglobal the chosen instrumentfor United States although a privatecorporation, is system. Under the Act, Comsat, regulation and policyguidance from the subjected to extensive

President, the FCC and NASA. the lead, a groupof With Comsat and theUnited States taking established INTELSAT from the developed areas, countries primarily the summer of1964. This consortium on an interimbasis, beginning in countries.It finances, has now grown to amembership of almost 80 of a global system,consisting owns and operatesthe space segment Atlantic, satellites in synchronousorbit over the of three operating tracking and controlequip- Pacific and IndianOceans and associated owned in about 30countries, locally m*nt. Some 50 earth stations connect the laws of the placewhere they are built, in accordance with

47 U.S.C. 88 701-744(1964).

5 -5-

global net forinternational provide a basic with the spacesegment to is expectedthat the By the endof 1971, it telecommunications. 70 in 40 have increasedto about number of earthstations will consortium vestthe con- establishing the countries. The agreements representing themembers. activities in aCommittee trol over its Comsat, notonly has beendominated by In practice,the Committee of the votesunder the corporation hashad a majority because the it * the agreements, but alsobecause, under weighted votingsystem, position has This dominating consortium. ia the managerof the and in thedefinitive the beginning, been a source offriction from

the membersof theconsortium, recentlyconcluded among arrangements a datecertain will be reduced. In particular, the powersof Comsat managerial roleand the the terminationof Comsat's is set for that willbe to aninternational group transfer ofthese functions responsible tothe consortium. the creatureof and solely

have clarifieda for definitivearrangements The negotiatons concerning the scopeof the con- problem, this one second important satellitecommunica- In the earlydays of sortium'sjurisdictxon. system," some of "a single global tions, there wasmuch talk about that a singleentity, the interpretation which wassusceptible of have a monopolyof character, should international in presumably reflected These viewsin part activities. fill spacecommunications that thecapital which has sinceproved erroneous, the feeling, would beastronomical communications systems requirements of space

prevented Comsatfrom unilaterally Special votingprovisions questions. imposing itswill on major

6 -6-

phrase "singleglobal system" (no pun intended). In any case the and the preamble found its way into the UnitedStates legislation This gave rise to somequestion whether to the INTELSATagreement. could be established domestic or regional orspecial purpose systems of the consortium. For by INTELSAT membersoutside the framework States position onthis issueWSS a long timethe official United systems, but thedecision in the negative, atleast for regional

independent systems, in the negotiations wasin favor of ptrmitting coordination with the consor- after limited technicaland economic tium. recognizes the directionin which events were This decision The'separate Russian systemhas already proceeding in any case.

negotiations are under wayto expand it to an been mentioned, and (INTERSPUTNIK) linking EastEuropean countries international system led by India andBrazil, and perhaps others. Developing countries, systems for ambitious plans fordomestic or regional are formulating Canada is going education and otherdevelopment-related purposes. links with the forward with a domestic System,to forge stronger systems have beenmootea, northern provinces. A number of European practically motivated. but they seem morepolitically than toward domesticsatellite The question ofUnited States policy appli- setting. In 1966, ABC made systems wasprojected against this provide networking ser- cation to the FCC for asatellite system to The Ford Foundationintervened vices for itstelevision programs. the question of whethersubstantial in this proceeding, raising networking services to themajor television savings from providing 7 realized in theform of a"public networks via satellitemight not be There was littleprogress dividend" for the supportof public television. 1970, when the WhiteHouse sent a in this proceedinguntil January proposing a policyof rela memorandum to ChairmanBurch of the FCC, satellites to applicantswith tively free licensingof domestic The sufficient initialfinancing. technically soundproposals and which of these systems,providing market was to bethe arbiter of llouse The ITC did notadopt the White what services, wouldsurvive. pursuant but it issued aNotice of Inquiry, approach completely, applications for domesticsystmns were to which someeight major Most of these listinterconnec; filed by the deadlinethis spring. and of the f,crvices tobe surplied, tion among cablesystems as one Telephone proposesservice the application ofHughes Aircraft/General major functions. The applications to cable systecsas one of two

are pending asthis is written. satellite systems, most The prospect of amultiplication of raised anew thequesticn of of them of thesynchronous type, has abated during theperiod coordination among systems,which had been activity might takeplace under when it appearedthat most of the frequency Debate has focussed onwhether the the aegis of INTELSAT. communications and thegeostationary spectrumavailable for satellite Many support all theclaims upon them. orbit are adequate to areas, oreconcerned that countries, particularlyin,the developing preempt these resources. The United the advanced apacepowers will spectrum and with wise management, States has arguedin general that, conceivable demands.This position orbit will beadequate to all -8-

and in any case, itis not is not universallyaccepted in principle, community has or can createinstitutions clear that the international Telecommunication capable of effective management.The International for designating Union'(ITU) has basicinternational responsibility to be used forsatel- those portions of thefrequency spectrum that are coordination as exists. lite communications.It also prescribes such desirability of addi- The issues ofspectrum/orbit adequacy and the tional regulation of the uceof these resources wereintensively debated without resolution inthe World Administrative Radio agenda at Conference in June, 1971.They will again be on the the ITU PlenipotentiaryConference in 1973. Communications Characteristicsof Satellite Systems

telecommunications Before the advent ofsatellites, long distance

In the words of WalterHinchman: had been essentiallypoint-to-point.

modes] might be characterized All [previous transmission links. as single-route,fixed capacity transmission That is, a particular setof transmission facilities the is capable of linkingtogether only two points on earth's surface (single-route),and the message car- parti- rying capacity nf thislink, determined by its be cular design parameters,is fixed and cannot reallocated to or sharedwith other routes.

technology is to some ex- Hinchman recognizes thatradio broadcast but he notes that "the tent an exception tothis generalization, foreclosed limited coverage and capacityof these early radio systems capabilities for large-scaletwo- any possibilityof utilizing such These limitations havebeen even way telecommunicationsservices." broadcasting with itsextremely more acute inconventional television

short rangepropoiation characteristics.. economic Hinchman identifies someof the technical and modes: characteristics of thepre-satellite communications -9-

characteristics of Some of the principal transmission facili- single-rourf., fixed-capacity of note, for theyhave profoundly ties are worthy and the affected the developmentof institutions dealing with bothdomestic formulation of pol icy First, the telecommunications. and international direct func- cost of suchfacilities is typically a along the earth'ssurface; thus tion of distance length of it is desiralde tominimize the total Second, the cost per transmission linksused. facilities tends todecrease with circuit of such thus it increasing number ofcircuits per link; amalgamate all thetraffic destined is desirable to sizable area fortransmission over to or from a low- high-capacity linksrather than many a feu facilities capacity links. Also high-capacity with random needs can shared by many customers efficiently than canmultiple be used much more low-capacity facilities. lead to an optimum These characterisitics ser- configuration forterrestrial communication transmis- vices which consistsof a hierarchy of ever-increasing capacity,inter- sion links of and routing connected viaintermediate s-.:itching referred to as acommunica- facilities, generally com- tions network orgrid. For international network typicallyculminates munications, this routing in from one to a veryfew international nation, which arethen intercon- centers for each radio (if nected via eitherHF (high-frequency) particular route is very traffic volume over a volume is high low), micro-waveradio relay (if nations), or submarinecable between adjacent regions (if volume is highbetween particular on separatecontinents).

Hinchman asserts,"Satellite By contrast toall earlier systems, stations) are in- (both earth and space communications facilities through a singlefacility, herently capable ofserving multiple routes . ." flexibly among theseroutes . and of reallocatingchannel capacity capability." He calls this a"multiple-route, allocable-capacity the reverse ofthose noted The implicationsof this capability are transmission is no cost of above for terrestrialfacilities:

10 -10-

earth's surface between longer a function of thedistance on the gathering system sender and receiver; and thereis no need for a

links. to support a fewhigh capacity long distance * have not yet Existing satellitecommunications systems multiple-route, exploited very fully theseinherent advantages of operated allocable-capacity capability.The INTELSAT system has long distance communi- very much along thelines of a tonventional

has been telephone,telegraph cations carrier. Its principal traffic been across the and data transmission.The principal routes have United States and North Atlantic and theNorth Pacific, between the

communications. other developed countrieswith high density the Less developed countries havederived some benefits from Once the satellite unique characteristics ofthe satellite system. building was up, anycountry'could hook into the system simply by ctqplaiats that the an earth station. Although there have been standard INTELSAT earth station is 1 83 - $5 million cost of the with long- unnecessarily high, it is withinreach of many countries of distance traffic density far toolow to justify the capital cost 80 terrestrial links with major centers.Of the approximately

of developing members of INTELSAT, perhaps50 are in the category at the end countries and over 20 of theearth stations in operation Thirteen more are scheduled of 1970 are located insuch countries.

'to come into operation during 1971. generations On the other hand, thedesign of the first three

buy capacity in of INTELSAT satellites wassuch that users had to with a units no smaller than a halfcircuit, which was connected

Putting aside military systems,about which little is known. -11-

essentially matching half circuit inanother earth station on an

basis.* These circuits were for mostpractical purposes permanent of terrestriallinks linear in character, andshared the characteristic the traffic volume.This that cost per messagedeclined sharply with and of countries, arrangement met the needsof high traffic routes few others, that generateenough like the United States and perhaps a number of differentcountries. traffic to supportcontinuous links with a requirements, however,had to A country withlighter, more diffused London, Paris or NewYork, select a singleconnection, usually with these centers. Even and route traffic toother destinations through

the time. The result was not so, the circuitmight be empty much of period, when all traf- much different fromthat in the pre-satellite

dependent areas was routedthrough the appropriate fic from colonial or

metropolitan center. transmission via satellite todate retains Similarly, television In the INTELSAT system, a good manyconventional characteristics. growing source of traffic. Trans- television is still a minor, though earth-station in the mission is basicallypoint-to-point, from the stations in receiving originating country throughthe satellite to earth gets the signalthrough con- countries. ihe sending earth station

On the receiving end,distribution is ventional terrestriallinks. facilities.- land lines ormicrowave relay, to also by conventional

broadcast stations andthence to the sets of existing over-the-air

ultimate viewers.

* station to satellite A half circuit is anuplink, from earth the earth station. It requires and a down link fromthe satellite to other end to complete atwo-way a comparablehalf circuit at the communications link. -12-

much more heavily ontelevi- The Soviet systemhas concentrated fundamentally the same. Two *a/on, but theoperational mode is and Vladivostokpresumably principal groundstations near Moscow The 22 other earthstations, account for mostof the originations. for telephone anddata com, although they arecompletely equipped primarily as distributionpoints for munication, have infact served described for INTELSAT. television signals, muchin the manner

Current TechnicalDevelopments

technology account, ii appearsthat the new From the foregoing who said acommunications has yet to confoundthe early detractors "microwave than "a cable inthe sky" or a satellite was nothing more developments, how* Two major current relay tower 25,000miles high." advantages of satel- exploitation of the unique ever, conduce to the techniques and broad- They are random access lite communications. importance for the rela casting from satellites. Both have large communications. tion between cableand satellite it possible for anyearth Random accesstechniques will make directly with anyother earth station to communicateon demand of a fixed halfcircuit, station in the system.Ths requirement together with theconcomitant described above, wouldbe eliminated, country's traffic through onemajor need for routingall a smaller has just gone intoservice, distribution center.INTELSAT IV, which this type, called incorporates the firstoperational system of to satellite's voice circuitswill be allocated SPADE. 800 of the constantly scanningthese this system. A centralcontrol device is

13 -13-

earth station wantsto make a 800 circuits, andwhen a particular control channel,notifies both 'call, the centralstation, using a frequencies they will usefor the calling and calledstations what In switch to thosefrequencies. message. Both stations then performed very rapidlyusing principle, the operationscan be stations The effect for theparticipating earth automated equipment. contained switching is exactly the same asthough the satellite importance of thiscapability for countries facilities. The immediate apparent.At a further remove with low density,diffuse traffic is interconnection among it provides the possibilityfor two-way switched

cable systems. satellites is the secondimportant develop- Broadcasting from

There is a certainamount of terminological ment now on thehorizon. cleared up at the outset. confusion in thefield that should be wiih increasing satel- Interest first focussed onthe prospect.that, could be used torelay tele- lite power, acorsunications satellite of individualviewers, without vision programsdirectly to the sets station on thereceiving side. the interventionof'any other earth political, economicand legal This possibilityraised very important field, and these inturn questions, especiallyin the international Peaceful Uses of OuterSpace to led the UnitedNations Committee on Broadcasting. establish a WorkingGroup on Direct of concluded that there wasno prospect The Working Group until directly intounauemented home receivers satellite broadcasting two other modesof broadcasting after 1985. However, it identified than the deliveryof signals from satellites on ascale mitmh wider

14 -14-

stations fordistribution, to a relatively fewlarge central earth directly The first of theseis broadcasting as described above. front end con- augmented with aspecial antenna and to home sets estimated in the The Cost ofaugmentation was verting equipment. validated the figure hasalready been range of$150 per set, and channel systems indeveloping in detailedplanning for single discussed by theWorking Croup was countries.The other new mode receivers in avillage satellite to community broadcasting from the antennas forfurther square, school ormarket, or to community, to.augmented home sets broadcasting distribution.Both satellite state of the broadcasting are wellwithin the current and community

art. whether satellitebroadcasting Serious doubts havebeen expressed unaugmented sets -will direct to the home -either to augmented or basis, at leastwithin ever be widely realized onan operational In the developing the current generaltechnological framework. population with homereceivers countries, the costof equipping the United States orEurope would be enor- on a scalecomparable to the far down on thescale of economic mous, and the matteris likely to be countries, directbroadcasting appeared prioriAes. In the developed availability af ter- limited channel to offer somerelief from the remaini a possibilitythat this 'restrial systems. In Europe, it States, however, thisparticular route will betaken. For the United what availability is being metby cable systems on problem of channel None of the and economicalbasis. looks to be aneffective, flexible

for.satellite systems nowbefore the FCC proposes a 'applications

15 -15-

That probably broadcast service direct tothe homes of viewers. of such a serviceuntil the end means therecould be no realization earliest, by which timecable will be even of the decade, at the */ more firmlyentrenched.

Imzlications for CableCommunications

important prospects The two developmentsjust sketched hold out elaboration. The for cable communications thatdeserve some further since implications of broadcast satelliteswill be discussed first, random access and they seem to be on theimmediate horizon, while further in the future. - Witchingpossibilities are somewhat Intieccnsection of systems by satellite - Thepredictions

broadcasting suggest that satel- about thedevelopment...Of satellite with'Zahle as a mode of providingcom- lites will not be competing office. munications services directly tothe customer's home or beiWcfm the twomodes: They suggest instead acomplementary relation 'cheap and satellites would provide withinthe very near future, a systems. effective method ofinterconnection among cable domestic satellite As nOted above, a numberof the applications for intercohnecticin systems now pending beforethe FCC expressly contemplate system, for example,comprising of cable systems. The Comsat multipurpose

*/ --An exception may bethe use ofsatellite-to-augmented-home- places receiver to provide a basicbroadcast service for remote and where CATVwould out of range ofover-the-air broadcast stations Canada's Telesat is expectedto be ineffective or tooexpensive. northern provinces, althoughmuch of the perform this function for the earth station for time the t=ansmissions will go to an intermediate Similarly, one of the obk.ctsof the proposed final distribution. and otherwise Japanese domestic system is to bring service to remote States areas falling inaccessible regions. It is thought that United contain as much as 15 -20% of the population. into this category might

16 44. -16-

contemplates satellites with 24transponders each, two operating absorbed by CATV inaddition that two of thesechannels will he Corporation for Public to two that would beallocated to the networks. Broadcasting and eightfor commercial TV

application presentsthe most extensive The Hughes Aircraft service to cable systems. As such, and proposal for satellite for considering someof the because it provides aconcrete setting it is worth Possibilities and problemsof cable interconnection,

application in somedetail, although there reviewing the Hughes likelihood that it willbe granted. is no way ofestimating the operating satellitesof 12 The system proposedwould have two providing full coverageof the 48 contiguous transponders each, There would be twomajor two-way earth states, Alaska andHawaii. in the Los Angelesmetro- stations, one in the NewYork area and one for all pr.gramorigination politan area. These would account The applicationalso seeks ap- in the early yearsof the system. earth proval for the construction of sevenprototype receive-only

8100,000 each.These would be stations, at anestimated eost of of several hundredsuch the forerunners of afull scale network for all United Statescable systems. terminals to provide coverage capacity as well, Eventually some of thesewould have a transmit

origination. .to provide forlocal and regional satellites of Of the 24 transpondersin the two operating long-term non-interruptible the system, eightwould be leased on a

transponder is theequivalent */ following discussion, one - .In the capacity. of one TV channel orcomparable communications -17- for its general Telephone & ElectricService Corp. basis to General stable revenue This is intendedto provide a communications use. for television 16 channelswould be left base for thesystem. channels systems.One of these programming or otheruse by cable the Corporationfor Public would be assignedfree of charge to Hughes proposes tosell and distri- As for the rest, Broadcasting. $0.25 to $1.00 to cable systemsat a rate of bute program packages together with thepayments These charges per month persubscriber. Although Hughes system's income. made by GT&E wouldprovide the advertising, subjectto applicable reserves theright to accept to be a minorsource of revenue. FTC regulations,it expects this station ownership,at Hughes itself isapplying for earth by the initialapplication. least of the earthstations covered (1) equal advantages urged forthis arrangement arc The principal spreading the earth station;(2) equitable access ofcable systems to throughout the system;(3) technical of capital andoperating costs and (4) rapiddeployment efficiency in somesystem operations; capital funds. because of Hughessuperior access to of the system willingness to considerearth station But the applicationexpresses are met, andHughes is ownership by usersif these desiderata large cable discussions alongthese lines with already conducting

operators. that sale of time on content, Hughes argues As to program either on a interconnecting chatinels toindependent producers, would not achievedesirable high bidder or a commoncarrier basis, audience, and would for the largest diversity. "Each would compete content insteadof a balanced produce an overlapof similar program

18 -18- forward in the The alternative put package of diverseprograms." program package. application is for Hughes itselfto assemble the con- recognizes the problemof "concentrating But the application organization." Hughes trol over the programpackage in a single unbiassed diversitywill undertakes "to provideassurance that selection "delegating a portion ofthe program be achieved" by organization'representing thepublie interest." to an independent organization are notanecified. procedures of this The structure and financial aspects ofthe Hughes proposal The technical and The satellites tobe used are, in present no seriousproblems. building replicas of thoseHughes is already essential features, The earth stations appearto be for Canada's Telesatsystem. One'might have somequestions well within the stateof the art.

s,.1.e ownership of allthe earth stations if Hughes insisted on possible to specifywith confidence in the system,but it is not yet ownership, and theHughes an alternativeform of earth station experimental on this aPPlication seemsadequately flexible and early to be veryclear about score. Again, it is perhaps too memorandum opts for pricing systems andlevels. The White House content to rest onthis, the judgment of themarket, and Hughes is to the system isassured. provided equal accessof cable operators experience isaccumulating At least in theearly stages, while basis for pricing, there seems no good reasonto prefer another watching. although this featurewill bear careful the question ofcontrol The principalpolicy issues center on generally Studies of cablecommunications have of program content. of systems is inthe cards, without assumed that interconnection

19 -19- And they how it is to beaccomplished. exploring very carefully attitude toward theprospect, have on the wholeadopted a benevolent definition of thebenefits to be expected. without very precise of these puts forward one answerto the first The Hughes proposal But its effort to answer questions: interconnection by satellite. all the problemsof access the second raises onthe national scale diversity and controlof con- of producers to the system, program intractably in thelocal context. tent that cableitself has raised so greater diversityand The argument thatcable will lead to programming takes as a premisethat if channels improved quality of

slight cost it will bepossible, once the mass are available at of smaller audiences. audience is sated, to caterto the varied needs limited, the smaller Since cable systemshave been geographically geographically defined. audiences to be servedhave also been local oritination ofcommunity Thus to date, thefocus has been on political contests,cul- oriented programs - localsports events, The accounts of thefirst ex- tural performances, andthe like. notable periments along these lines makethem sound, with some scale.Making exceptions, like neighborhoodgossip on an extended efforts, and ;lying allowances for the pioneercharacter of these help forge a genuine full marks to the powersof local programs to difficuleto be very hopefulabout sense of community,it is still this kind that will the quantity or qualityof the material of experience to date, itcannot be forthcoming. On the basis of the in realizing Lhepotentiali- be said to represent agreat leap forward

ties of the televisionmedium.

20 -20-

should make itpossible to Interconnection ofcable systems non-masi audiences and to assemble escape the existinglimito In this than geographicallydefined. that arefunctionally rather flexibility for the firsttime, approach the way,television could, nationally circulated medium with itsprofitable of the print like the magazine.The cable operator, spe( *alizedpapers and distribute these programsto the distributor, would magazine functionally definedregional or local segments:of aseries of be in attracting The advantagefor him would national audiences. as cablesubscribers. the members ofthese local segments be achievedfrom natintal If this le theprincipal benefit to follow, as Hughessuggests, interconnection, itdoes not necessarily realized throughcentralized control that the benefitis to be of the competitionamong Hughes description over programming. for the largestaudi- independent producers -"each would compete content" - overlap of similarprogram ence andwould produce an clear television today. It is not sounds remarkablylike network influences wouldaffect the why thesehomogenizing competitive itself would remainimpervious independent producerwhile Hughes it would seemthat the independent to them. On the contrary, artistic impact orcarry his producer, anxious tomake his own to reach would have,thestrongest motivation 'own social message, If audience discussedabove. and define thekind of specialized of would be taken, asin the world he failed todo so, his place loss of investmentor,resources. print. by another,without major for itself, onthe other The functionItughes defines c)f thebroadcasting hand, is nodifferent than that "balanced" menu of programs network: to serve up a

. 21 -21- cable systems maychoose. the individual from which theoperators of role, to embark incentives forHughes, in that It is hard tosee the innovation, any morethan the networkx on artistic orjournalistic have. the advent ofcable somewhat differently, To put the matter three net- market will haveavailable the means thateach local circumstances independent stations. In such works plus some major would seek tocompete independent producers it seemsunlikely that The only pos- audience as thenetworks. for the scalekind of mass that had the be from an entity sibility of suchcompetition would talent andoutlets as financial resources, same accessto large packager of diet is a central program the networksthemselves -

envisioned in theHughes application. the kind recognizes at leastsome as- As noted above,the application programming and centralized controlover pects of theproblem of independent of this authorityto an offers to delegatea portion in Apart from thelack of detail public interestorganization. selection by it raises thespecter of program this suggestion, well high quality, nomatter how coamittee, hardly anaugury of

meaning the committeemight be. critical of Hughes. Its application One should notbe unduly Moreover, if these issues. -has at least raisedand addressed access to thesatellite seems for freer producer t. e a priori case sides that the argumenton both strong, it iswell to remember experience, and is no relevant Is whollyspeculative. There television can bemisleading. analogies from theworld of broadcast

22 -22-

the FCC require It may be, therefore,that Hughes could adopt or this question as well assome of a more experimental approach to period of satellite inter- the others. Particularly, in the early portion of connection, when channelavailability is great, some independent producers the capacity shouldbe reserved for sale to

carrier in relatively small time segmentson an auction or common addition to the two forms of pro- basis. This method would be in provide a basis for gram selectionproposed by Hughes, and would

comparison. additional If this method were to beadopted, it would raise

Since, by hypothesis he problems of compensating theproducer. probably would not be aiming at Wmassaudience, advertising would

full. An alterna- not provide the necessarysupport, at least in the programs tive would be to permit thecable operator to select

operator he war ed and to share thefees between the sacellite be some form of pay end the producer.Another possibility would producer's share of the TV. Still another would be to relate a

revenue to audience size -.perhaps measuredby monitoring devices

or the limited feedback capabilityenvisioned for cable systems

in the near future.

The Commission's choice amongthese alternatives, and indeed will be affected its consideration of allthe foregoing questions, the con- by its conclusions on theanalogous problems arising in are text of local cable systems.In any case, the uncertainties .

important and pervasive enough sothat no decisions made now

intercon- should be irretrievable.Any authorizations for cable strictly nection that emerge from the presentFCC proceeding should be

23 -23-

be somewhateasier limited in time. This result may , and effectively in terrestrialcommuuications. to achieve inouter space than satellites.At components of thesystem are the The main capital life - development, they have alimited planned useful this stage of this time years.At the end of in the Hughessystem, about seven toto, in any case.The operator the satellites mustbe replaced in within this period. The must plan to recoverhis capital costs adaptable to changesin owner- earth stationsshould be readily Thus, there shouldbe ship or operationof the space segment. to inhibit achange of approach no large overhangof fixed investment make itunmistakeably clear that in the future,and the FCC should

it will feel freeto do so. that is alreadyclearly There is onespecialized audience Interconnection of cablesystems with defined: school children. provide for the firsttime outlets at localschoolhouses would 'pen instructional TV network.This would in turn a national country, thepossibility of up, also for thefirst time in this in public schooleducation. full exploitationof the TV medium could be concentrated. programming resources With national networking, located at eachschool Relatively inexpensivevideotaping equipment would make it possibleto or consolidatedfor a larger grouping convenient times. xecord and store programsfor presentation at instrument of An instructional network ofthis kind would be an Technical virtuosity, nomatter enormous range andflexibility. need for effectivesoftware, how dazzling, does notdo away with the significant plansfor use but it is myimpression that all the

24 -24- which of TV in the schools posit somekind of network like that would be provided by interconnectedcable systems. This points toward two concreterecommendations that the

Commission should make. First, all franchises for cablesystems should require, as many of them nowdo, that outlets be provided free of charge at all schoolbuildings within the franchise area. also Second, any satelliteinterconnecting cable systeMs should be required to dedicate anappropriate portion of this capacity, at least a channel, toeducational and instructionaltelevision. Random access and switching - TheSPADE system, now in oper- ation in INTELSAT IV, permitsvirtually instantaneous interconnec- tion between any two earth stations overany of the 800 circuits esti- allotted for this service. According to Comsat's present mates, the equipment necessaryfor a 12-channel SPADE installation for a standard INTELSAT earthstation would cost about $200,000. each An additional capital investmentof $5,000 is required for terminal additional circuit. Thus a complete 24-channel SPADE capable of processing 24 random accesscalls at the same time

could be had for a little over$300,000. It should be remembered

that the earth station must have atwo-way capabilit7 to begin the Hughes system would rep- with. The two-way earth stations in

resent a capital investmentin the neighborhood of$S million,

and the cost of the standardINTELSAT earth station is of the installa- same order of magnitude. Both are highly sophisticated for simpler tions, and no doubt costscould be considerably reduced

25 -25- they would remain optimistic assumptions terminals. But on the most considerably in excessof the $100,000 cost for the next few years projected by Hughes. The dif- of the receive-onlyearth stations the "severalhundred ference, whatever it is, wouldbe multiplied by for the full systemto earth terminals (that]will be required" switched interconnectionto the determine the costof providing capability would belimited to a few entire system. Even so, the interconnection To provide even onetwo-way video voice circuits. very largefraction of the would require twofull transponders, a in the system ascurrently planned. total capacity ofthe satellites of pro- burdens must beadded to the costs All these additional local cable systemsthemselves. viding switchingcapacity for the of a fullyinterconnected It is apparentfrom this that the.day complete switchingcapability national network ofcable systems with

is still wellin the future. shorter term, for Nevertheless, there is apotential, in the basis. interconnection on alimited, exploratory two*way video illustrative proposed Hughes system asa model for Again, using the of additionaltwo-way purposes, in the nextfew years a number regional centers.During earth stations will comeinto operation in be excess capacityin the satel- the same periodthere is likely to stations could besupplied with two-way lites. Some of the earth This would perhaps with somesubsidy. interconnection equipment, video conversations make possible two-partyand even multi-party cable systems servedby between facilities atthe head ends of

the earth stations.

26 -26- though it might notbe The cost of thislimited capability, would probably notbe very large commercially justifiable, essentially one ofpolicy: are absolutely. The question is for this formattfiat are there types ofinterchange suitable either by way of a re- important enough towarrant force-feeding, for a satellite quirement imposed as .acondition of authorization

system or bysubsidization or otherwise. different way oflooking at the same ques- There is a somewhat among cable systemsis likely to tion: switched interconnection Should accesa to thisfacility appear on a limited basis atfirst. kinds ot commu- be rationed by the market?Or are there certain to this service? nications that shouldhave priority access , limited, relatively The question has bite,for beyond the heady vision of a fullyswitehed near termpossibilities lies the cables and satellites broad band interronnectedsystem, combining If this business places all overthe nation. to link homes and mode of cables would become notso much the vision is realized, but the capillaries bringing television programsto home viewers, for the country. This network of a basiccommunications network grid, analogous tothe power can be thoughtof as a communications communications capability, grid, delivering tothe consumer fungible fungible electric power.Just as the as the power grid delivers to light, heat,refrigera- user can converthis power at his choice the communications userwould be tion, air conditioning etc., so telephone (voice able to convert thedelivered capability into message or datatransmission, or video,two-way.or multi-party), well as retrieval television (including live orcurrent programs as -27-

the whole rangeof data of past programsfrom storage banks), facsimile reproduction .storage and retreivalfunctions, including

of output, etc. adinfinitum. less than common carrieror It is hard to imagine anything ownership - for the public utility status -perhaps even public But by that time the main trunk portionsof such a system. be dwarfed by a hostof other problems, ownership question would would concern the access The central issuesthat would then emerge just producers of"programs" as of producers tothe system - not And these couldbecome now conceived,but all sorts of messages. fundamental issues of ournational life. the most profound and least several decades All this is, if notscience fiction, at being aware of the moredistant in the future. But it is worth primitive and limited prospect whenconsiderIng how to handle the interconnection of cablesystems through possibilities for switched

satellites that are now athand.

Summary and Conclusions

discussion leads to theconclusion that the The foregoing communications will notbe relations between cableand satellite advantage of satel- The comparative competitive butcomplementary. that of cable on a lites lies in longdistance communications; policy issues presentedby local level.Moreover, although the consideration, the relationship are onthe horizon and deserve immediately pressing as aresome otherissues they are not as -28-

There is not now anydomestic with respkt tocable communications. world, let alone asystem designed satellite systemanywhere in the communications.It is unlikely to cater tothe needs of cable the applicationsbefore it that the FCC willreach a decision on Hughes than a year.Again if the for some time,certainly not less system would not gointo application can betaken as a model, a after favorableFCC action. operation for yetanother two years or so operating domesticsatellite At fair guess, wewill not see an until the mid-70'sat the earliest system capableof serving cables half of the decade. and probably notbefore the latter about the role ofsuch Still some verygeneral conclusions

systems can be reached: be relied on tobring First, satellites canand probably will conventional to homes beyondthe reach of basic broadcast aervice -

broadcast or cable systems. likely to be thevehicle for large Second, satellites are regional between cable systems ona national, scale interconnection desirable, as it interconnection proves or otherbasis, if such

probably will. future, it seemslikely that Third, and muchfurther in the

economics point towardswitched interconnection if policy and satellites could ve-ywell become the pre- among cable systems, well. ferred vehicle forthat function as problems center aroundthe Moat of the mon:immediate policy concern controlof access second of thesefunctions and chiefly and others with to the satellite networkby program producers that emerges veryclearly messages to transmit.One recommendati*n

3 29 -29-

instructional TV network of a free national is the establishment in any dedication of somecapacity for this purpose by requiring systems.Outlets authorization for satellitesto serve cable also free of charge, asa should be providedto local schools,

condition of cable systemfranchise. provision of switched The implications of thethird function - and potentially interconnection capability - areboth more remote

so extensiveand so little more far-reaching. The possibilities are experimentation is warrantcdin advance of understood that some scale demand, to get abetter feel of the market or other large

problem. prescription is probablyadvisable on most In fact, a similar Little is now knownand little issues ofsatellite-cable relations. necessity for finaldecisions is thinking is beingdone; but the This dictates aflexible and ex- still some years inthe future. granted in the next ploratory orientationin any authorizations cables. The Hughes application few years forsatellites to service more than oneapproach to several displays a willingness to try This is a healthy its application. of the importantissues raised by The White Housememorandum tendency and shouldbe encouraged. when it asks that avariety reflects somethingof this philosophy submit themselves tothe of satellite systemsbe permitted to it is unlikelythat more test of the market. On the other hand, devoted will be given for asatellite largely than one authorization traffic would justifyit. If that to serving cables,or that the bet on applicant should notbe wholly free to is so, perhaps the

30 -30-

should be provided,but should his own conceptionof how the service phases of the system,to be encouraged or requiredin the early alternatives.Moreover, any try out several ofthe most promising practically limitedin time. authorization should bestrictly and policy issues andpoten- This is not veryfiery, but it will permit the time for making hard tial solutions tobe clarified before

choices arrives.

31