COMSAT IS LEADING IN BID TO BUY U.S. WEATHER SATELLITES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85M00363R001102400007-1
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 2
• Document Creation Date: December 20, 2016
• Document Release Date: February 19, 2008
• Sequence Number: 7
• Publication Date: March 10, 1983
• Content Type: OPEN SOURCE

Approved For Release 2008/02/19: CIA-RDP85M00363RO01102400007-1
THE WASHINGTON POST -- 10 March 1983
Comsat Is Leading
In Bid to Buy U.S..
Weather Satellites
By Michael Schrage
and Philip J. Hilts
Washington Post Staff Writers
Communications Satellite Corp.
appears to be the leading candidate
'to take control of the government's
weather and remote-sensing satellite
system if the Reagan administration
succeeds in its proposal to sell the
service to private industry.
Comsat's plan, called EarthStar,
would have the company ' purchase
the government satellite system for
roughly $300 million. The govern-
ment, which is the major user of the
satellite data, would guarantee to
purchase it from Comsat for at least
10 years for an undetermined price.
The plan, which Comsat initially
proposed in late 1981, contends that
they could run the satellite. business
more efficiently, saving the govern-
ment as much as $600 million in the
first five years of operation and $80
million each year thereafter.
The Washington-based company,
which also hopes to broadcast tele-
vision programming directly to cus-
tomers via satellite, argues that
EarthStar would be the first step in
creating a competitive marketplace
for weather and remote-sensing sat-
ellite services. The company points
to European and Japanese efforts to
establish satellite data systems con-
sortia to market such data interna-
tionally.
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COMSAT, From El
at odds with a study by the Com-
merce Department's National Envi-
ronmental Satellite, Data and Infor-
mation Service, which asserted that
private ownership would result in a
cost increase of over $190 million an-
nually to the government. The re-
port, presented late last year, was re-
jected by the Commerce Depart-
ment.
Another issue, raised by some con-
gressional staff members, is that the
proposal could give Comsat a de
facto monopoly if it receives a
guaranteed long-term contract from
the government-the largest con-
sumer of satellite data. One aide
questioned whether other satellite
companies would have an incentive
to enter the market tinder these cir-
cumstances.
It is not clear, however, whether
there could be a private commercial
market for satellite information,
some experts said.
Comsat is awaiting a response
from the Commerce Department.
The plan, however, has sparked
charges that Comsat wants the gov-
ernment to subsidize its entry into a
new business. "On the left hand,"
says Jonathan Miller, editor of Sat-
ellite Week, "Comsat says, `we'll take
it from you' and on the right hand,
`we want you to guarantee a profit.'
Comsat wants privatization-but it
also wants subsidies."
Warren Washington, a govern-
ment scientist who serves on the Na-
tional Advisory Committee on
Oceans and Atmosphere, called the
plan a "guaranteed subsidy" for
Comsat. Experts have estimated that
the satellite system Comsat would
acquire is worth $1 billion more than
Comsat would be pay* for it. -
C meat cost estimates are directly
See COMSAT, $S, CM. 4
Currently, says John McElroy,
head of satellite services for NES-
DIS, 95 percent of the information
from the weather" satellites is sold to
government agencies. In the remote-
sensing area, where satellites are
used for monitoring agriculture, ex-
tractive , industries and resource
management, the government con-
sumes roughly half the data.
McElroy argues that there would
be significant growth in private sat-
ellite services if the government got
out of the business because "the gov-
ernment is simply not a good mar-
keter" of data. He dismisses the idea
that turning weather satellites over
to private business could lead to the
public being charged for forecasts.
"The National Weather Service,"
says McElroy, "would continue to re-
ceive the data."
But Leo R. Harrison, president of
the National Weather Services Em-
ployees Organization, says that plan
"makes as much sense as selling the
Washington Monument then renting
it back so the public can go in free."
Several potential competitors,
such as American Science and Tech-
nology of Bethesda and Space Ser-
vices of Texas, had no direct com-
ment on the Comsat proposal but
both believe that a growing market-
place for satellite data services would
be possible if the government phased
out its involvement. NESDIS
sources indicate that it costs $150
million annually ' to support a' re-
mote-sensing satellite and about half
that to maintain a weather satellite.
But Satellite Week's Miller says it
is still far from certain that a signif-
icant marketplace for satellite data
actually exists outside of the govern-
ment. "So far, the numbers don't
add up-there are few known num-
bers at all. And the American tax-
payer, having capitalized the devel-
opment of these systems through
their taxes, should know what
they're going to get," Miller said.
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