Ending a High-Flying Monopoly

At the height of the Cold War in the early 1960s, Congress authorized the Communications Satellite Corp., or Comsat, to be the sole middleman for American companies seeking access to international satellite networks. Comsat’s coddled monopoly made sense at the time, for it helped the government monitor a technology seen as a possible security threat in the wrong hands.

Decades later, the world is a whole lot different and Comsat is a relic. Dozens of other nations allow companies to contract directly with competitive satellite operators, driving down costs significantly. Meanwhile, Comsat, according to the Federal Communications Commission, continues to use its monopoly to mark up satellite services by as much as 86%.

That’s why a bill by House Commerce Committee Chairman Thomas J. Bliley (R-Va.)--legislation approved Wednesday by a House subcommittee--is so welcome: Removing Comsat’s monopoly would lower the cost of satellite-based services like international long-distance calls. Bliley’s bill would allow private companies to offer the same international satellite communications access and services now provided exclusively by Comsat. We could look for a burst of competition; Comsat would modernize and innovate or wither.

The Bliley bill is part of a belated larger effort in Congress to commercialize the space industry. A pending Senate bill would lay the groundwork for allowing private companies to launch space payloads and operate satellites without government help.

The Commerce Department projects that commercial expenditures on space ventures like launching satellites will rocket from $7.5 billion in 1995 to $120 billion by 2000. Only companies able to respond to the breathtaking speed of change in this market can catch all those dollars.