Economic Problems of Establishing a Communications Satellite System

by Leland Johnson


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Testimony given before the Subcommittee on Monopoly of the Senate Select Committee on Small Business, August 3, 1961, on the economic problems of establishing a communications satellite system. The economic benefits of voice-channel cost reductions from satellite use might reduce overseas toll-telephone rates and lower delay times in completing calls. The government should consider giving the first satellite firm its franchise with the understanding that monopoly rights are not conferred in perpetuity, but rather that additional franchises may later be given to competing firms. A combination of satellite and conventional communication links appears to be superior from a cost standpoint to a system containing a large number of ground stations. If the United States attaches high priority to having a large number of ground stations around the world, it must consider the increased risk of being the second nation to have an operational satellite system.

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