Satellite Warfare: Undoing Intelsat's Monopoly

Satellites might orbit in space, but that doesn't spare them from political warfare on earth. Under a 1964 treaty, 11 countries including the U. S. set up the International Telecommunications Satellite Organization (Intelsat) and gave it exclusive rights to carry international telephone and television signals via satellite. Now, it has 119 members--all of which have agreed not to use other satellite systems unless they can prove it doesn't harm Intelsat economically. Intelsat has prospered and, in 1989, had revenues of $619 million. But some members, particularly the U. S., wish to undo its near-monopoly. They say competition will bring down prices.

Under a compromise won last year by the U. S., Intelsat agreed to let member nations use non-Intelsat birds for public network traffic as long as 100 or fewer phone circuits were involved. American Telephone & Telegraph Co., for example, plans to take advantage of the decision by renting circuits on Soviet Intersputnik satellites to add 100 phone lines to the Soviet Union. The U. S. government is pushing to get rid of the limit entirely, but other Intelsat member nations fear that a free-for-all could wreck the organization.