Newspaper article The Christian Science Monitor

International Satellite Business Opens Up with New Challengers to Intelsat's Monopoly, Liberalization of the Industry Looks Inevitable

Newspaper article The Christian Science Monitor

International Satellite Business Opens Up with New Challengers to Intelsat's Monopoly, Liberalization of the Industry Looks Inevitable

Article excerpt

DEBATE over high-technology policy is stuck on the first stage of development. Government officials in the United States and around the world want to know how to get the government in to new technological industries. But equally important is how governments will get out of those industries once they succeed.

The international satellite business is a case 2in point. Thirty years ago, the US and its noncommunist allies helped create the satellite industry by setting up a successful consortium called Intelsat. Intelsat carried telephone traffic to new places. It awed TV viewers with live newscasts from Europe. It brought the world the first pictures of man walking on the moon.

Today, Intelsat is no longer at the forefront of technology. Challengers are springing up with new and innovative services. These upstarts say that Intelsat now stands in the way of progress.

"The Intelsat monopoly is still very much a monopoly," says Phillip Spector, a Washington, D.C., lawyer who has tangled with Intelsat in the past.

"Intelsat is caught in a bind between responding competitively and serving all their members," adds Thomas Watts, managing director of Ascent Communications, a New York-based management consulting firm for the communications industries.

Although liberalization is coming later to the international satellite business than to other sectors of telecommunications, everyone agrees it is inevitable. Three years ago, the European Commission proposed "free and unrestricted access" to satellite capacity. The US has agreed that by January 1997 it will not bar competing systems from carrying its bread-and-butter traffic - overseas telephone calls. Removing regulations

Other countries are coming to the same conclusion. "The Japanese government is of the same opinion to remove the current regulations," says Takeo Miura, deputy director of the KDD Washington liaison office. KDD, which handles most of Japan's international telephone calls, now has two competitors who are allowed to use non-Intelsat services.

But competitors are not waiting for 1997. In 1988, a US company, PanAmSat, launched the first private international satellite. Although the company is barred from carrying telephone calls, PanAmSat has found exploding demand in carrying TV programming to and from Latin America. It plans to launch three more satellites in the next 18 months to create a worldwide telecommunications system.

Other US competitors - Orion Network Systems and Columbia Communications - hope to launch satellites in the near future that would handle international traffic within specific regions. They would join certain European and Asian companies that already serve several countries in their regions.

"We have to stay on our toes," says Mike Newsom, an Intelsat spokesman. "That's why we have an aggressive satellite procurement program. …

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