The EDSAT Center Space Science and Engineering Center the University of Wisconsin Madison, Wisconsin
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The EDSAT Center Space Science and Engineering Center The University of Wisconsin Madison, Wisconsin LEGAL ASPECTS OF SATELLITE TELECONFERENCING by Delbert D. Smith* (NASA-CR-133592) LEGAL ASPECTS OF N73-2909 SATELLITE TELECONFERENCING (Stanford Univ.) 219 p HC $13.00 CSCL 17B Unclas G3/07 11392 *Ph.D., Cambridge University, Cambridge, England. J.D., The University of Wisconsin. Diploma, The Hague Academy of International Law, The Hague, The Netherlands. Member of the Bar, The State of Wisconsin. Legal Advisor, The Space Science and Engineering Center, The University of Wisconsin. The research in this document has been sup- ported by the National Aeronautics and Space Administration. October 1971 PREFACE The development of satellites for communications purposes has tended to greatly expand concepts con- cerning integrated communications systems. The traditional distinctions within the communications industry are dis- solving in favor of new and innovative technologically- based systems. In addition to one-way broadcasting, it has become feasible to consider interactive communication which will allow educational and informational activities to take place on a scale never before imagined. The word "teleconferencing" is used to describe a communications system providing bidirectional communication which has a great potential in the educational area for professionals, remote medical diagnosis, business con- ferences and computer techniques. A teleconferencing system utilizing a satellite which virtually eliminates distance as a cost factor can provide specialized services to various segments of our society. It is possible that satellites will be developed which are dedicated solely to teleconferencing purposes. Given the technological possibilities of a satellite teleconferencing system, it becomes necessary to consider the legal framework within which such a system or series of systems could be developed. Thus this work considers ii the legal context for satellite teleconferencing regulation, the options available for such a system, the regulatory alternatives, the special case to be made for an educational system and an ownership and management model. A number of options are presented for coping with the technological possibilities and systems configurations since a number of interrelated decisions will need to be made by various governmental and private'bodies. It is hoped that this work will be further added to by additional in-depth studies in specific areas. I am particularly indebted to Dr. D.W. Bowett of Cambridge University, England for initial encouragement in this general area of research, to Dr. V.E. Suomi and Mr. T.O. Haig of the Space Science and Engineering Center for their constant concern and support, and to a large number of people at the National Aeronautics and Space Administration for insight and counsel over a span of years. I also wish to thank Nikola Kostich for research assistance, Larry Chambers and Linda Stephenson for coordination activities, and Nancy Wulfers, Sandra Noe, and Katherine Shervis for their efforts in the preparation of this material. At Stanford University, I am grateful to Dr. Bruce Lusignan for technological grounding and advice, and I also benefited from exchanges with Jim Potter and Ray Panko. Whenever research is done at the interface iii between law and technology there must be a truely inter- disciplinary research effort and the above people con- tributed greatly to making this a reality. The responsibility, however, for what follows is solely that of the author in both form and substance. Delbert D. Smith The Space Science and Engineering Center The University of Wisconsin 1971 iv TABLE OF CONTENTS Page I. Introduction. ....* * * * * * * * * * * *...... ... 1 Teleconferencing Systems Components . ...... 3 II. The Legal Context for Satellite Teleconferencing Regulation . ........* * . 11 The "Common Carrier" Concept. 13 The Economic Policy Considerations: Natural Monopoly. 21 New Technology and Competition. ......... ... 27 III. Options Available for Satellite Teleconferencing Systems. 42 Regulation of the Equipment Suppliers for a Satellite Teleconferencing System . ..... 44 A Possible Regulatory Regime. ... .... .... ... 45 IV. Alternatives for the Regulation and Control of a Satellite Teleconferencing System . .. ......... .... 54 Program Content Control .. ............. 54 The Desirability of Federal Regulation. 55 The Availability of Circuits .... ..... 55 Economic. Factors . * * * * * * * * .* * 59 Frequency Allocation and Management Without Markets: The FCC. ............... 65 V. An Educational Satellite Teleconferencing System . ...... 73 System Components ..... ........ ........ 73 The Satellite. * . 74 Cable Television . 78 ITFS . 81 I/ A Case Study: The Wisconsin Teleconferencing User Study. ................ .. 87 Systems Enumeration. ..... 87 Demographic Dispersion . 100 The International Implications. .... 119 Educational Access. .......... 125 VI. An Ownership and Management Model . ....... ..... 143 COMSAT: The Communications Satellite Corporation . 143 APPENDICES I. Summary and Excerpts from the FCC Letter of Intent on CATV. .......... ........ .. 154 II. The 1971 WARC Conference . ...... .. 176 III. The Development of the Telecommunications Industry . 186 IV. The Public Broadcasting Act of 1967. .... 196 V. The Communications Satellite Act of 1962 . 205 INTRODUCTION The technological development of a satellite teleconferencing system can be enhanced by a complementary study of the legal aspects of the system development. Following is a study of the legal aspects of satellite teleconferencing which deals with the various management, ownership, and regulatory alternatives. The policy options available for satellite teleconferencing systems are.also considered and special consideration is given to the development of an educational satellite tele- conferencing system and the special problems that this involves. Any regulatory regime for a satellite telecon- ferencing system must take into consideration the existing regulatory modes governing the subsystems employed and also the possibility of creating a new regulatory regime based on the premise that the interconnection of various subsystems results in a new entity requiring an innovative regulatory approach. The last decade of American history has witnessed significant scientific achievements, among which are vital developments in the area of communications tech- nology. The development of new technology is seriously challenging the existing configuration of the communi- cations industry. Communications satellites are a prime example of a new technique which tends to blur the traditional divisions of functions between various seg- ments of the communications industry. Likewise the use of digital computers removes the well-defined borders separating the communications industry from the data processing industry. The new. technologies have made possible the development of new communication and information ser- vices which enable individuals, or machines appropriately programmed by individuals, to communicate with each other, and the individuals to furnish and control the content of the messages which are transmitted. An example of such a service is a satellite teleconferencing system, equipped to provide bidirectional communication and allowing individuals (or machines) situated in diverse locations to reach common solutions to problems. The use of teleconferencing techniques has a great potential in providing services such as continuing education for professionals, remote medical diagnosis and consultation, -2- professional society meetings, business conferences, and various computer techniques. The development of satellite teleconferencing systems will present a challenge to the present structure of the communications industry. What will be the legal, and necessarily politico-economic, framework within which conflicts over the distribution of new business opportunities will be decided? What should be the goals of government regulation with regard to such distribution? In the development of a teleconferencing system there are a number of interests that will need to be balanced as new suppliers of services enter the market. However, "The current market structure (of the communications industry) provides a setting in which the existing common carriers, on the one hand, and the potential entrants on the other, pursue conflicting courses of action, subject to the constraints of highly imperfect markets and regulation."l Teleconferencing Systems Components In order to comprehend the present structure of the communications industry and the problems which will face any proposal for a teleconferencing system, it is essential that the differences between several categories of electronic bi-directional communications be properly understood. The technical explanation of teleconferencing techniques may be somewhat rudimentary, but it may provide a sound basis for a discussion of policy implications of each available method. -3- A satellite teleconferencing system will use trans- mission techniques which have been used to some extent. These are: satellite transmissions, microwave relay systems and coaxial cable. By listing them separately it is not intended to suggest that an exclusive choice of the three must be made. The manner of listing only suggests that distinct issues are presented by each method, and that they must be fully considered in any system which is a mix of two or even all three techniques. Of all the various