The first commercial activities in space resulted from the efforts of the telecommunications industry to extend operations beyond the atmosphere almost with the beginning of the space age. Indeed, satellite communication was the only truly commercial space technology to be developed in the first decade or so after Sputnik. Perhaps the first person to evaluate the technical and financial aspects of satellite communications was John R. Pierce of AT&T’s Bell Telephone Laboratories, who in the mid-1950s outlined the utility of a communications “mirror” in space, estimating that such a satellite would be worth a billion dollars.
The idea thrilled many space advocates and with the dawning of the space age the U.S. moved to exploit this opportunity. The first attempt was a test program call Echo, which called for the orbiting of a 100-foot inflatable satellite covered with reflective material that NASA could bounce a radio beam off. Difficulties abounded in trying to launch an inflatable, passive satellite, but tests were successful on August 12, 1960.
At the same time active-repeater communications satellites were being developed, the first of which was the Bell Telephone Laboratories Telstar project. In 1962, NASA launched the Bell owned and built Telstar satellite, the first orbital device to relay television and telephone waves. In the years that followed, space-based telecommunications grew into a multi-billion dollar industry. Several generations of Telstars, as well as other types of communications satellites in Earth orbit, helped to make real-time global communications a reality. By 1964, two AT&T Telstars, two Relays, and two Syncoms had been successfully launched, and technological know-how had been transferred to companies other than AT&T. Live television broadcasts from the 1964 Tokyo Olympics provided a glimpse of the dawning age of instantaneous global communications.
Seeing the enormous commercial potential of space-based communications, the U.S. Congress passed the Communications Satellite Act of 1962, creating a Communication Satellite Corporation (COMSAT) with ownership divided fifty/fifty between the general public and the telecommunications corporations to manage global satellite communications for the United States.
Near the same time U.S. leaders recognized the possibility of competition and participated in the establishment of the International Telecommunication Satellite Consortium (INTELSAT), with Comsat as manager, to provide an international communication satellite system. Founded by nineteen nations, with eventual membership of well over a hundred, it was initially very much an American organization, with the United States controlling sixty‑one percent of the voting authority and all the technology. It oversaw the development of INTELSAT 1 in 1965, the first of the global communications satellite network. With this satellite system in orbit the world became a far different place. Within a few years telephone circuits increased from five hundred to thousands and live television coverage of events anywhere in the world became commonplace. On April 6, 1965, COMSAT’s first satellite, Early Bird, was launched from Cape Canaveral.
Although the initial launch vehicles and satellites were American, other countries had been involved from the beginning. By the time Early Bird was launched, the United Kingdom, France, Germany, Italy, Brazil, and Japan had established communications ground stations. From a few hundred telephone circuits and a handful of members in 1965, the INTELSAT system grew to embrace more members than the United Nations and to possess the technical capability to provide millions of telephone circuits. Global satellite communications had begun. Other companies expanded this system thereafter. Cost to carriers per circuit, and to individual customers, declined dramatically as the system matured. By the end of the century, orbiting satellites were generating billions of dollars annually in sales of products and services and had transformed global communication by facilitating commercial broadcasting, business and scientific exchanges, and telephone and Internet communication among individuals worldwide.
But the core question to be considered in the context of space-based global telecommunications is whether or not this is more of a governmental activity than anything else. While AT&T developed the first communications satellite, the U.S. government launched it on a reconditioned military missile. While AT&T sought an open system for business, the government moved to regulate and control it. International space telecommunications followed a similar close relationship between government and industry.
Accordingly, should satellite communications be viewed as a public trust or one that is a free market arena? How should such activities, whatever the specific industry, be administered? This is a large question in American history, economics, and society. Additionally, the manner in which space enterprises are stimulated—investment, business models, returns on investment, and the like—has been a uniquely important topic for some time, but few have looked at how historical case studies might inform future efforts to stimulate space commerce.
The story of the Comsat Corp. is a case study of how government and the private sector cooperatively, and sometimes not so cooperatively, undertook the development of what has become a remarkably lucrative space business. With the rise of a range of private sector entrepreneurial firms interested in pursuing space commerce in the last two decades, the process whereby those might be incubated, fostered, and expanded comes to the fore as important public policy concerns as never before in the history of the space age.