SATELLITE, INCORPORATED
Wechsler, James A.
SATELLITE, Incorporated by JAMES A. WECHSLER THE Congressional battle over the Administration's communications satellite bill ended in late summer with a crushing defeat for the small band of men...
...This was the thrust of Joseph Rauh's testimony in opposition to the measure...
...The summit of hypocrisy was reached when cloture was finally voted by those who, in the memorable words of Senator Long, would do for AT&T what they would never do for the NAACP—and who thereby told the world that property rights held a large priority over human rights in the U.S...
...Wayne Morse pointed out, at the time Senate Leader Mike Mansfield was piously saying "today we begin the fifteenth day of debate on this bill," that the measure had actually been before the Senate on thirteen days for a total of thirty-three hours and fifteen minutes...
...Was not this single episode, embodying a complete reversal on the part of the Administration, sufficient to cast doubt and discredit on the whole operation...
...It is a matter of fact that Tom Corcoran's law firm, with which Johnson has continuous and intimate relations, displayed an active interest in AT&T's cause...
...RIGHTS IN SATELLITE PLAN, PROBE HEARS As initially drafted, the satellite bill contained this clear clause, based directly on the President's words of July 24, 1961: "The corporation shall not enter into negotiations with any international agency, foreign government or entity without a prior notification to the Department of State, which will conduct or supervise such negotiations...
...There is no precedent for this use of the Presidency for the sponsorship of a business enterprise...
...A company controlled by AT&T could scarcely avoid considering the effect of satellite facilities on existing investments in cable facilities...
...Information Agency...
...The corporation may request the Department of State to assist in the negotiations, and that Department shall render such assistance as may be appropriate...
...It is surely not my contention that all those who voted for the bill were tools of corporate power...
...I think it would not be a matter of lack of patriotism or wisdom at all...
...Enterprising journalists might have found some further headline material if they had pursued the gap between the Administration's ultimate position and the stand taken by Assistant Attorney General Lee Loevinger, chief of the anti-trust division of the Department of Justice, in earlier testimony before the Senate Anti-trust and Monopoly subcommittee...
...RULE OF SATELLITE PLAN...
...Thus the cry of filibuster was in many respects a fraud...
...In the final phase of debate, a letter was extracted from Mr...
...It is said that "public opinion" would have rebelled against any "radical" approach...
...Discussing the duality of interest that might confront the directors of the satellite corporation, he said, in response to a question from Senator Albert Gore, that the aims and goals of a corporation director were quite different from those of a government official...
...This is language that AT&T understands...
...As the hearings progressed, Senator Stuart Symington, a chief advocate of the leave-it-to-AT&T bloc at these seminars, questioned Murrow's figures on prospective cost...
...I would argue, however, on the basis of the printed record, that those who were to be damned as the "filibusterers"— a charge worthy of fuller inquiry— were generally those who paid the closest attention to the argument...
...The case for the bill was won by a compound of confusion and inertia...
...And why did Senator Humphrey, who had earlier counselled against deciding on organization until the system became operational, join those who clamored for haste...
...But those who profess to speak for public opinion usually bear little resemblance to the man in the street...
...President Kennedy has lamented the pervasiveness of "mythology" in our economic thought...
...We would like to see United Nations members not only use this service, but also participate in its ownership and operation . . ." As Ernest Gross, former U.S...
...There were others who no doubt did so absent-mindedly...
...In the end the big story is the mystery story: Whodunit...
...they would have said that he had resigned in protest over the Administration's support of a measure which exposed his agency to the dubious mercy of AT&T...
...Thus, Federal Communications Commission Chairman Newton Mi-now, a bright and able young man who will, I predict, some day read his testimony with some degree of anguish, valiantly voiced his confidence that the directors of the satellite corporation would be Americans first...
...One can try by writing some of the headlines that the testimony might have received, and by suggesting to the reader how different the outcome might have been if these headlines had been widely used...
...As in the case of Mr...
...They may not be entirely wrong...
...The note of urgency dominated many headlines...
...Yet in the end it was essentially the perspective of the Oklahoma tycoon that shaped the legislative outcome...
...Yet, even within those limitations, his testimony might have rocked the country if its significance had been accurately appraised and heralded...
...SATELLITE, Incorporated by JAMES A. WECHSLER THE Congressional battle over the Administration's communications satellite bill ended in late summer with a crushing defeat for the small band of men who had dared to oppose it...
...And rarely have I read as brilliant and diligent an exercise in Congressional cross-examination as that Conducted by Senator Wayne Morse in the hearing held before the Senate Foreign Relations Committee...
...If so, the country may be paying a heavy price to underwrite this form of therapy...
...For when the climactic question came, he announced that, if he were a member of the Senate, he would vote for the bill...
...Why were the voices of dissent within the Administration forced to fall into line, creating such odd and embarrassing spectacles as the conflicts between Mr...
...Murrow testified that, unless the government received preferential rates (nowhere provided for in the bill), it would cost USIA $900 million dollars annually at commercial rates to utilize the satellite network for ninety minutes a day in underdeveloped areas...
...Stevenson and read on the Senate floor by Senator Hubert Humphrey expressing approval of the pending bill...
...indeed, they seemed divided between the pretense that AT&T's role would be limited, and the insistence that the republic was fortunate to have AT&T volunteer to take over...
...There were, of course, many men who voted for the bill who did so out of loyalty to the President...
...And an International Telephone and Telegraph vice president testified that he thought the satellite corporation should get a special subsidy if the government wanted it to conduct initially unprofitable operations in poor territory...
...Thus, many elements contributed to the final dismal result...
...Stevenson's wise words to the United Nations and his desultory letter of capitulation to Senator Humphrey...
...It might be described as one of the great untold stories of the early space age—and, conceivably, the first momentous scandal of this new era...
...The real point was underlined by Benjamin V. Cohen, that wise old New Dealer who came forward to challenge the bill...
...it is said that when the State Department and some forces within the Justice Department resisted the evolving pattern, Mr...
...Murrow: It seems to me that this would be desirable, sir...
...instead he engaged in the difficult exercise of trying to deprecate the bill without betraying "the team...
...Johnson is chairman of the President's Space Council and thus officially the President's "man on space...
...Minow...
...Stevenson's large view of the new day, originally the official AdminJAMES A. WECHSLER, editor of the editorial page of the New York Post, is the author of five books: "Revolt on the Campus," "War Prapaganda and the United States," "Labor Baron," "The Age of Suspicion," and "Challenge to the Beat...
...One hopes that Minow's expression of innocence is not a true reflection of his worldliness in dealing with corporate pressures...
...The State Department, in effect, abdicated any controlling rule over the conduct of negotiations...
...The Department of State shall advise the corporation of relevant foreign policy considerations...
...in return the corporation pledged only to let the Department know what it was doing...
...At first the State Department and other Administration spokesmen argued vehemently for this provision, despite questioning by Senator Kerr which was considered by many to be as acid and blistering as any ever heard on Capitol Hill...
...Who dictated the change...
...Now let us suppose that in many cities in the land citizens picked up their newspapers and saw this headline: MYSTERY MOVE CURBS U.S...
...they were fighting for time...
...Obviously, if one accepted Senator Kerr's view that the whole project involved more of what had already been done, no great debate was at hand...
...It becomes embarrassing, even in the case of companies on whose boards the government has appointed no directors, to say these [business matters] are private negotiations that do not bind the government...
...In the aftermath of the New Deal and the Fair Deal, and in the time of the New Frontier, we may be too prone to dismiss as fantasy evidence of the survival of established corporate power over economic and political institutions...
...But it is perhaps relevant that he succeeded in avoiding a personal appearance before the Foreign Relations Committee despite persistent demands from Senator Wayne Morse that he submit himself to interrogation...
...Also the corporation has the right to deduct this advertising expense but they don't have to place their advertising with any newspaper . . ." To which Minow responded: "I can't believe that the press would be influenced in taking editorial judgment on the basis of that...
...The story is supplemented by conversations with some actors in the drama who could move behind the scenes...
...nowhere have I read or heard any compelling explanation as to why time was so desperately of the essence in this proceeding unless AT&T had whispered the word that it would "strike" unless its terms were met...
...There was a surface "touche" in this portrait...
...There were a few reporters who early sensed the dimensions of the story, but they were only a handful...
...In Murrow's view, the United States might find itself at a severe disadvantage in competition with Communist programs around the world unless "we could secure a reduced rate or increased appropriations...
...There are many aspects of it that still defy explanation and elude inquiry...
...One can only hope that he will some day exhibit comparable ardor in dealing with the Republican-Dixiecrat obstructionists as he did in crushing the liberal dissenters...
...Perhaps most wondrous of all were the testimonials to the glories of the "free enterprise" system recited by the Senators who were in the process of creating a vast new monopoly, paving the way for its dominance by the patriarch of monopolies, AT&T, and resisting an alternative "leasing" setup that would have guaranteed a maximum of free competition...
...He accused the USIA chief of vastly overstating them...
...He conceded that nothing in the past justified this assumption but added wistfully that he hoped the FCC would "start to meet its responsibilities...
...Yet in most of the cryptic newspaper accounts of the whole episode, Morse emerged as a cranky curmudgeon laboring an obscure point...
...What he was saying, of course, was nothing more than that what is good for AT&T is not necessarily good for the country...
...once the bill had been drafted (and spuriously proclaimed as a "compromise" between private domination and public ownership), Senate Leader Mansfield apparently concluded that it was a matter of honor that he finally prevail in some large legislative test...
...On August 3, during Newton Minow's interrogation by the Foreign Relations Committee, Senator Russell B. Long had commented on the extensive volume of tax-deductible advertising published by AT&T to hail its own role in Telstar...
...So it Would seem that the government—meaning the people—loses on both ends...
...In the satellite battle no labor witness took the stand...
...Apparently this assertion of government influence in the business of the emerging monopoly was unsatisfactory to the men who were taking over the show...
...Obviously Mr...
...One begins with the Stevenson contradiction, even though he took almost no direct part in the controversy, because it points up so many of the paradoxes and puzzles of this strange proceeding...
...On numerous occasions they made it plain that they would be ready to vote immediately after the fall elections...
...Now let us dream that many of the stories on August 8 had been headlined this way: WITNESS ASKS SENATE PROBERS: WILL AT&T 'STRIKE' AGAINST GOVT...
...Now consider this testimony: Senator Morse: Would it be desirable, Mr...
...Throughout such negotiations the corporation shall keep the Department of State informed with respect to such consideration...
...Former U.N...
...In a way, what stands out as sharply as the power of the battalions mobilized in behalf of the bill was the frailty of the opposition...
...This arithmetic is hardly consistent with the overwhelming pro-industry vote in a Congress that treated opponents of the bill as if they were village idiots or dangerous subversives...
...Why was there such frantic pressure for quick action...
...11040, an act for the establishment, ownership, operation, and regulation of a commercial communications satellite system, and for other purposes...
...there is little overt evidence that even President Kennedy passionately favored the course finally chosen...
...that the National Aeronautical and Space Administration could proceed, in cooperation with private industry technicians, in promoting the satellite program, just as it had managed the Telstar achievement...
...What was fundamentally at stake in the legislative dispute was whether the government should control the nascent system of satellite communications for primarily public ends, or whether it should cede dominance of the enterprise to AT&T for primarily profitable purposes...
...In the measure as finally enacted there was not a single reference to Mr...
...Yet rarely has a measure been camouflaged in so much myth—most basically the myth that there can be no conflict of interest between corporate profit and national needs...
...The only poll I have seen, conducted by an agency called "What America Thinks," reported in mid-August rather startling answers to the question: "Do you think the future network of American communication satellites—like Telstar—should be owned and developed by the government or by private industry...
...How, then, does one dramatize what really happened...
...The director of a corporation for profit is bound, in the interests of the stockholders, to do the profitable thing...
...Kerr's dedication to the care and feeding of corporate interests is a celebrated and not entirely impersonal fact...
...That the government was divided within itself is beyond dispute...
...There are those who believe his own attitude in the final phases of the battle was influenced by his desire to assure the business community that he harbored no doctrinaire enmity toward it...
...All agreements and arrangements with any such agency, government or entity shall be subject to the approval of the Department of State...
...Meanwhile the country could continue to weigh its ultimate course...
...Morse: Is there anything in this bill that guarantees to the U.S...
...government a reduction in commercial rates for the transmission of U.S...
...Yet I would guess that not one in a million Americans knows that such a remarkable alteration was engineered, and that Secretary of State Dean Rusk eventually found himself defending it...
...There was much byplay over the totality of AT&T's grip under the prospective bill, but even the staunchest supporters of the measure offered weak and contradictory testimony on that point...
...Much of the argument for swift enactment of the bill rested on the popular cry that we could not afford any delay in the great space competition...
...There could be only one plausible reason for haste, Rauh observed: "If we lose any time through not passing this bill, it would be because of a sitdown strike by AT&T...
...In the Senate, Mr...
...The Attorney General based his stand on the assumption that the Federal Communications Commission would keep AT&T in line...
...In a free society such episodes have a way of haunting the participants long after the deals have ostensibly been completed...
...Inevitably one comes to the question of the "filibuster...
...Whodunit...
...Ultimately we must ask: Why...
...How Mr...
...Perhaps the sharpest commentary on the proceedings is that no conclusive effort was made to resolve the gap between them before the vote sealed the choice...
...The United States wishes to see this facility made available to all states on a global and non-discriminatory basis...
...Nowhere have I found any effective answer to this contention...
...The impact of even those gestures was largely outweighed by the support which the Communication Workers Union threw to the bill, presumably in return for some hints of future dispensations at the collective bargaining tables of Satellite, Inc., or of AT&T itself...
...It seems to me," said Gross, "that the perspective has to be different...
...But then, so did he...
...Yet this is basically what has occurred, under the direction of an Administration rhetorically committed to the earlier Stevenson position...
...Discussing the prospect of AT&T control of the satellite program, Loevinger suggested how the present vested interests of the corporation might cast a shadow over its operations in the great new venture: "There would be a natural reluctance on the part of companies with large investments in existing facilities to take speedy action which would make these facilities obsolete...
...have Southern filibusterers against civil rights ever similarly offered a deadline for decision...
...Ambassador Gross, addressing himself to the same question, quietly recited the facts of life that should hardly have eluded Mr...
...But the mystery of why the bill was rewritten on this crucial point was neither aired in any serious form in most public places, nor ever satisfactorily resolved...
...Stevenson's portrait of a fateful turning point in men's lives, the abdication of government was inexplicable...
...Murrow held his ground, conceding only that in the great uncharted areas we are about to enter any estimate is necessarily hazardous...
...programs of freedom to the areas of the world where the Communists are a 24-hour-night-and-day threat to freedom...
...Perhaps this is why they refused to consider any amendments proposed but tabled every single one offered by opponents of the bill without even trying to debate them on their merits...
...government in the role of promoter of a private profit-making monopoly venture, with the President himself designating three directors as his agents...
...And so this language was substituted: "Whenever the corporation shall enter into business negotiations with respect to facilities, corporations or services authorized by this act with any international or foreign entity, it shall notify the Department of State of the negotiations...
...It is much more difficult to escape responsibility for a corporation three directors of which are appointed by the President with the advice and consent of the Senate...
...It could forge new bonds of mutual knowledge and understanding between the nations...
...The result might have been different if the press had covered the story with greater zeal and fidelity, and if the editorial pages had been less unanimous in hailing the handiwork of the legislative drafters...
...There will be little recorded here that was not accessible to the press...
...Imagine what echoes may have been stirred if there had been large headlines saying: STEVENSON REVERSES STAND ON SATELLITE BILL, BUT SPURNS DEMAND THAT HE TESTIFY The biggest headlines might have been won by Edward R. Murrow, Director of the U.S...
...He did not do so...
...This does not purport to be the definitive history of that battle...
...A reader can only assume that the Senate chose to ignore Mr...
...That it had the official blessing of the Kennedy Administration (and the natural sympathy of the Republican leadership) in this endeavor merely underlines the magnitude of the feat...
...Stevenson's vision of the United Nations' role in the expanding satellite universe...
...representative to the United Nations, testified before the Senate group, Mr...
...The issues were intensively explored a few weeks later at hearings before his subcommittee, but almost none of the press bothered to attend, even though these hearings contained some of the few direct confrontations between the proponents and opponents of the bill prior to the floor debate in June...
...Murrow: No, sir...
...then it was largely featured as a parody on the behavior of those liberals who were allegedly employing the device they professed to abhor, and they were generally pictured as cranky men reciting old Populist slogans...
...The replies: 44.1 per cent favored government ownership, 39.3 per cent voted for private industry, 16.6 per cent were uncertain or had no opinion...
...Again no one was listening...
...Stevenson reconciled his earlier words with the legislative deed is one of the unanswered mysteries of this story...
...There were, of course, some government witnesses who engaged in the painfully innocent exercise of suggesting that there could be no serious conflict between corporate profit and national interest...
...It may well be that opponents of the measure should have fought for full-fledged government ownership and operation of the program, despite the counsels of caution from those who asserted that such a course was "politically impossible...
...Why was Mr...
...it should not be stampeded into surrendering to AT&T's demands...
...Despite Mr...
...Murrow, if we set up a satellite communications system, to have the facilities of that system made available to our government for the transmitting of the type of freedom programs that you and I have had in mind as we have been discussing the problem...
...Then he observed that "any daily newspaper in the country which might undertake to attack editorially the bill that we have before us is subject to the complete right of this corporation either to advertise or not advertise in that paper...
...But once again the indolence and indifference of the press—mingled with a certain chronic disdain for the liberal set—sustained a false image...
...There was a telegram from Walter Reuther suggesting that "there is no more reason for turning space development over to AT&T than there is for turning the Pentagon over to General Motors...
...As someone remarked, the whole thing might have been simplified by admitting AT&T to the United Nations...
...There were many days on which testimony offered the committee would have justified such headline language as: PROFITS COME FIRST IN SATELLITE BILL, SENATE PROBERS TOLD Defenders as well as critics of the bill were obliged to acknowledge the point, for the wording of the statute is unmistakable...
...Murrow obliged to say that he would vote for a bill that is implicitly damned by his own testimony...
...Yet even this pious hope did not confront the central problem...
...In 1957, during the debate on the civil rights bill, Strom Thurmond made a speech lasting twenty-four hours and eighteen minutes...
...In December, 1961, Adlai Stevenson, U.S...
...But one cannot escape the sense as one reviews the record that this was also a high-pressure coup staged by a corporate body that recognized the enormous stakes in Satellite, Inc...
...It is denied any real assurance that AT&T will carry the satellite program into those impoverished areas where it may be most urgently needed but where the returns may be least lucrative...
...This was not a minor matter of rhetoric, concerning only the handling of business arrangements...
...Ambassador to the United Nations, speaking before the Political Committee of the United Nations General Assembly, revealed that in his view the communications satellite represents a "fundamental breakthrough in communications [which] could affect the lives of people everywhere...
...For what he said was that the fees required by AT&T might be so high as to bar USIA programs from the satellite system...
...Their lost cause is probably already largely forgotten by most Americans, if, indeed, it was ever seriously noticed by many...
...In large measure what is set forth here is based primarily on a reading—sometimes between the lines—of a 456-page volume called "Hearings Before the Committee on Foreign Relations, United States Senate, on H.R...
...One is compelled to assume that the clamor for immediate action, the manifest distate for debate, the derision heaped on the lonely men who challenged the bill, reflected a fear that the truth would out if the controversy were prolonged...
...Why did a "New Frontier" Administration become the architect of this strange deal...
...But first let us turn to the record, where the heart of the story can be found...
...There were probably some whose faith - in Mr...
...In response to a question concerning the possibility of separating business matters from foreign policy in negotiations involving the satellite communications system, 'Cohen responded, "I think it is utterly impossible at this stage . . . almost all problems are mixed problems, and the State Department should not be embarrassed by having to negotiate through an instrument of this character...
...Nor does it obtain any pledge of preferential rates for direct government programs...
...Minow (which I share in many areas) persuaded them that the present FCC would somehow impose those restraints on AT&T which its predecessors were never able to achieve, even though this Commission has shown no greater interest or ability in this area and has permitted AT&T to earn a higher rate of profit than was permitted by the Eisenhower FCC...
...Some of the stakes at issue were first set forth on March 6, 1962, when Senator Estes Kefauver, leader of the small band, appeared before the Senate Space Committee...
...But the combination of labor listlessness and press hostility, joined with the lobbying legions of AT&T, rendered the struggle of Senators Kefauver, Morse and Company a hopeless one...
...Nevertheless, they have made the record, and it stands, and Americans may have many reasons to turn back to it as the saga of space unfolds...
...But whoever called the legislative tune, the President's responsibility is in no way diminished...
...One of a handful of citizens who testified against the bill, he argued—as did Cohen, and as had the dissident Senate bloc—that there was no desperate need for passage of any such final legislation at this time...
...Stevenson and Senator Kerr were talking about two different worlds...
...It was a bill that for the first time in our history placed the U.S...
...Loevinger's warning, Attorney General Robert F. Kennedy warmly saluted the satellite bill and Loevinger ceased and desisted from any further public statements along these lines...
...Once again we are reminded that, on great issues involving "giveaway" to special interests, there is usually no major public lobby operating to contest the deal...
...It was this point which Senators Kefauver and Long tried to stress, citing instances where AT&T had held back on new developments...
...As far as I know, AT&T never felt obliged to proclaim that its services were at the government's disposal regardless of the outcome of the legislative argument...
...For the act explicitly declares that "there is hereby authorized to be created a communications satellite corporation for profit...
...Yet one ventures the prediction that we have not heard the last of this affair...
...In a way the most unheralded story of all, which got almost no attention except in those subscribing newspapers which chose to print Drew Pearson's column on that day, involved the press itself...
...Murrow's warning...
...Stevenson, the team spirit was apparently irresistible—or compulsory...
...As Benjamin Cohen pointed out, "It will be difficult to convince those who buy the stock that the President has not recommended its purchase...
...For one thing, the "filibusterers" repeatedly explained that they were not attempting to bury the bill...
...How does one translate the devastating impact of the hundreds of pages of hearings that so few Americans have read and that were so inadequately reported in most places...
...It was, in fact, only when the embattled opponents of the bill began their last-ditch fight that the issue became page-one news...
...If they are not prepared to cooperate without this bill, then I think there ought to be an investigation of AT&T, and that fact ought to be known to the American public: that they are putting their dollars ahead of the fight against Communism...
...Many informed men in Washington believe Vice President Lyndon Johnson played a decisive hand in shaping the outcome...
...But if one accepted Mr...
...There are cynical men who say that it does not really matter whether AT&T assumes corporate command of the satellite program or whether the government retains nominal control while "leasing" the venture...
...Senate...
...The AFL-CIO executive council belatedly adopted a resolution reflecting those sentiments...
...While we gaped and blinked in wonderment over the dawn of Tel-star, the American Telephone and Telegraph Company staged the first and perhaps decisive commercial coup of the space epoch...
...but it will also be apparent that much of it was never clearly or dramatically defined in most news organs...
...istration view, was in dramatic contrast with remarks which Senator Robert Kerr, chairman of the Senate Committee on Aeronautical and Space Sciences, had addressed in February to Under Secretary of State George McGhee on the same subject: "It occurs to me," the Senator said, "that you do not understand that the only new thing about this hoped-for satellite communications system is that it is just an improved method of doing what is now being done...
...Kennedy in effect let it be known that he would defer to the Vice President's judgment...
...Traditionally this was the function of the labor movement, but labor's leaders have increasingly abdicated that role in return for the nourishment of their own special interests...
Vol. 26 • October 1962 • No. 10
