FCC Okays Transponder Sales by Hughes, Others—SCG Journal October 1982 transcribed by Faith MacPherson

“Positive Effect” on Industry

In a decision likely to have a significant impact on the communications satellite market, the Federal Communications Commission has authorized the sale of transponders on Hughes Communications’ (HC) Galaxy spacecraft and other domestic birds. Prior to the commission’s action, customers couldn’t buy satellite channels for their exclusive use but had to lease them instead.

“(This decision)” will have a very positive effect on the expansion of new competitive telecommunications services,” remarked Clay Whitehead, president of HC, the company subsidiary which owns and will operate the Galaxy communications satellite system. “It is a sound continuation of the FCC’s long-standing policy of keeping the communications satellite business competitive and open to new entrants.”

According to the FCC, permitting the sale of transponders would stimulate activity within the industry by providing a new way for satellite owners to obtain capital for system facilities. It also said that this action would make it easier for new satellite operators to enter the field.

Besides breaking new ground for the satellite industry, the commission’s action specifically authorized HC to sell transponders on Galaxy I and II. (The FCC deferred action on Galaxy III sales.) Western Union also got the nod to sell transponders on Westars IV and V, with action deferred on Westar VI. Five transponders may likewise be sold on Satcom IV by RCA Americom; the commission deferred action on Southern Pacific Communications’ request.

HC, RCA and Western Union had sold transponders under previous agreements, but the contracts could not be consummated until the FCC placed its imprimatur on the idea. Hughes, Western Union, and Southern Pacific also have asked for blanket authority to sell an unspecified number of transponders; their proposals are being reviewed by the commission.

Pioneering Spirit

The FCC’s decision to allow transponder sales has an additional significance to Whitehead and others at HC who pioneered the concept. When the subsidiary began selling space aboard Galaxy I early last year, it was a first for the industry. Aware of the sizeable investment that the Galaxy system required, Whitehead and his advisors were working the problem of how to generate funds to amortize the outlay. It was noted that TV transmission to feed cable systems was in enormous demand, a situation which has been aggravated by the loss of RCA’s Satcom III spacecraft in 1980 and that firm’s transponder allocation approach. In addition, “Major programmers, like Home Box Office (HBO), needed to be absolutely sure of their transmission capability,” Whitehead explained in an interview last year. “Although they didn’t require an entire 24-channel satellite, customers wanted to be on solid ground concerning channels they would use.”

Whitehead then had a brainstorm: Why not sell individual transponders? The owner would have complete control of those channels for the life of the satellite (in Galaxy’s case, at least nine years), plus the tax advantages of ownership. “By selling transponders,” he explained, “HC would not be bound by common carrier restrictions. This would allow us to selectively aggregate the major cable programmers on Galaxy I. And if all the channels were filled with compatible, quality video programming, CATV operators now tuned into RCA’s Satcom IIIR (the existing major cable bird) might choose to receive Galaxy programming too,” he said.

Birth of a ‘Shopping Center’

Thus was born the “video shopping center” – an amalgam of programming from seven of the largest cable TV distributors in the country. Transponders have been sold to Time Inc.’s HBO, Time Mirror, SIN Television Network, Turner Broadcasting, Group W, Viacom, and C-SPAN. And to further encourage users, HC and another Hughes subsidiary, Microwave Communications, developed an inexpensive dual feed system so TVRO antennas can simultaneously pick up the signals of both Galaxy I at 135 degrees west longitude and Satcom IIIR at 131 degrees west.

 

FCC Reduced Spacing Decree Sets off Competition for Remaining Orbital Slots from the SCG Journal September 1983 transcribed by Faith MacPherson

HC Wants Four – Only Seven Left

In a landmark action which both illustrates that less is indeed more, and changes the orbital slot allocation practices of the past 20 years, the Federal Communications Commission (FCC) decided last month to cut nearly in half the amount of mandatory room between satellites in geostationary orbit, thereby opening the equatorial skies straddling North and South America to 30 new domestic fixed service birds.

At the same time, the FCC release set a clock running. The report and order stated that in order to be considered for the next round of orbital slot assignments, companies must submit their applications for permission to build, launch, and operate satellites within 60 days from the date that the reduced spacing decree appeared in the Federal Register. The decree was published Sept. 6.

In announcing its decision to reduce the minimum distance between geosync satellites from 4 degrees of arc (approximately 2,000 miles at geosync altitude) to 2 degrees for Ku band (14/12 GHz) birds and to an average 2.5 degrees for C banders (6/4 GHz), the commission cited the growth in space technology which has lead to the expanding constellation of satellites and, in turn, to increased demand for orbital transmission services. It added, “This appears to be the only practicable method that both satisfies the request for satellite communications services and continues the commission’s policy of open entry (to space).”

In the same report and order explaining the reduced spacing, the commission also formally reaffirmed its earlier “go-ahead” authorizations, issued in April to 10 firms, to build, launch, and operate 19 new or previously constructed domsats (SCG Journal, May 1983). One of those vehicles is Hughes Communications’ Galaxy III, scheduled for launch July 1984. The FCC also gave approval for the sale of all the satellite’s transponders.

Two of the 10 applications, Rainbow and USSSI have issued requests for proposals. However, the FCC has said that the companies must sign contracts with satellite builders and prove that their projects have adequate funding by Dec. 31, 1983, or the firms will lose their slot allocations.

The commission’s “open door” policy notwithstanding, there are now very few orbital slots left – and, as is usual in such cases, many more applications. With the 2– and average 2.5- degrees spacing in effect, parking spots are available for two more C band vehicles, four Ku band spacecoms, and one hybrid (C and Ku band) satellite – a total of seven slots. In contrast, the seven firms who’ve filed thus far are asking for a total of five C band positions, 10 Ku band satellite spaces, and two for hybrids. Total: 17 slots – more than twice as many orbital locations as are available. And the competition hasn’t closed; the FCC has said it will accept applications until 5 p.m. on Nov. 7, 1983.

How is the commission going to determine who gets slots and who doesn’t? That’s the big question with which the applicants, Hughes Communications among them, are concerned these days. The SCG subsidiary has filed for a C band slot for Galaxy IV, and for three Ku band locations for its planned HS 393, HC3 system. The FCC has indicated that it may toss out applications that don’t supply all the information requested. The reporting requirements are the same as before. But the FCC said that because of the paucity of slots, the commission will adhere to its rules more strictly this time around. HC, and presumably the other contenders, is now reviewing its apps to see if there’s any input missing.

Here are the seven firms who have filed thus far, and their requests:

C band:

• Cablesat General – two slots (new business opportunity).

• Hughes Communications – one slot.

• Western Union – two slots (new business opportunity).

Five requests; two slots available.

Hybrid:

• Ford Aerospace – two slots; one available. Ku band:

• GTE – two slots (new business opportunity).

• National Exchange Inc. – two slots (new business opportunity).

• Hughes Communications – three slots (new business opportunity).

• Western Union – three slots (new business opportunity).

Ten slots requested; four available.

 

 

FCC Opens Door to New Domestic Satellites from the SCG Journal August 1985 transcribed by Faith MacPherson

In a long-awaited action which should have a major impact on quiescent sales of commercial communications spacecraft, the FCC on July 25 authorized construction of 23 new U.S. domestic birds and the launch of 25 more. In addition, the commission for the first time approved the application of two would-be operators of private international satellite systems to compete or business services with INTELSAT, SCG’s largest commercial customer and the 110-nation global satellite consortium that carries most world-wide telephone and television transmissions.

The FCC’s authorizations were the first grantings of fixed-service satellite system licenses by the commission in over two years. Fixed-service means that the satellites receive and transmit signals from and to ground stations that are usually not mobile. Traditionally, such systems relay telephone, television, computer data, telex, and facsimile services.

“We’ve been anticipating this action on the part of the FCC, and we’re pretty pleased, to say the least,” says Dick Brandes, manager of Commercial Systems Division. He explains, “This could be a real shot in the arm for the division.” which has been experiencing, along with RCA, Ford, and other commercial spacecraft builders, a predicted temporary dropoff in sales. SCG sold one HS 376 bird – a replacement – in 1984, but so far this year has received two system contracts from Hughes Communications Inc.: one for a U.S. television direct broadcast system, and the other covering a pair of HS 393 spacecraft and associated ground links to serve a Japanese domestic space system.

How the FCC’s new system grants will affect sales ultimately depends on whether the new licensees decide to issue requests for proposals and then eventually pick contractors to build spacecraft and supporting ground stations. But, says Mike Houterman, assistant manager of Division 43’s Advanced Projects Laboratory, “This opens up the marketplace once again. It’s a major event.”

Receiving new U.S. domestic satellite licenses are: Comsat General Corp. (Ku band), Federal Express Corp. (Ku band), Ford Aerospace Satellite Services Corp. (C and Ku band), Hughes Communications Inc. (Ku band), and Martin Marietta Communications Systems (Ku band). Each firm may build and operate two in-orbit satellites, with a ground spare.

Companies cleared by the commission to operate private international satellite systems are International Satellite Inc. and PanAmerican Satellite.

Hughes Communications Galaxy Inc. was among seven operators which got the FCC’s OK to add an additional satellite to their constellations. The other firms are Alascom Inc., American Satellite Co., GTE Satellite Corp. and GTE Spacenet Corp., RCA American Communications Inc., and Satellite Business Systems.

Western Union, a longtime SCG customer, received the go-ahead to add two spacecraft to its fleet.

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