B-159632, JULY 26, 1966, 46 COMP. GEN. 89

B-159632: Jul 26, 1966

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WHILE SATELLITE TELECOMMUNICATION SERVICES MAY NOT BE PROVIDED BY THE COMMUNICATIONS SATELLITE CORPORATION (COMSAT) TO THE DEFENSE COMMUNICATIONS AGENCY (DCA) UNLESS AND UNTIL AUTHORIZATION IS GRANTED BY THE FEDERAL COMMUNICATIONS COMMISSION (FCC/-A DETERMINATION THAT IS NOT SUBJECT TO REVIEW-THERE IS NO PROHIBITION AGAINST DCA CONTRACTING WITH COMSAT FOR COMMUNICATIONS SERVICES UNDER NEGOTIATION PROCEDURES IN VIEW OF THE URGENCY OF THE MATTER AND THE FACT THAT FCC HAS RECOGNIZED THE SPECIAL STATUS OF THE GOVERNMENT AS AN "AUTHORIZED USER" OF COMSAT FACILITIES. IS FREE TO EXERCISE ITS STATUTORY AUTHORITY WITH RESPECT TO ANY CONTRACT THE GOVERNMENT MAY ENTER INTO WITH COMSAT. A CONTRACT THAT WILL INCLUDE PERMISSION FOR ASSIGNMENT TO ONE OR SEVERAL OF THE RECORD CARRIERS.

B-159632, JULY 26, 1966, 46 COMP. GEN. 89

COMMUNICATION FACILITIES - SATELLITE TELECOMMUNICATION SERVICES - CONTRACTING PRIOR TO AUTHORIZATION. WHILE SATELLITE TELECOMMUNICATION SERVICES MAY NOT BE PROVIDED BY THE COMMUNICATIONS SATELLITE CORPORATION (COMSAT) TO THE DEFENSE COMMUNICATIONS AGENCY (DCA) UNLESS AND UNTIL AUTHORIZATION IS GRANTED BY THE FEDERAL COMMUNICATIONS COMMISSION (FCC/-A DETERMINATION THAT IS NOT SUBJECT TO REVIEW-THERE IS NO PROHIBITION AGAINST DCA CONTRACTING WITH COMSAT FOR COMMUNICATIONS SERVICES UNDER NEGOTIATION PROCEDURES IN VIEW OF THE URGENCY OF THE MATTER AND THE FACT THAT FCC HAS RECOGNIZED THE SPECIAL STATUS OF THE GOVERNMENT AS AN "AUTHORIZED USER" OF COMSAT FACILITIES, HAS HELD THAT IN THE NATIONAL INTEREST COMSAT PROMPTLY WOULD BE AUTHORIZED TO PROVIDE SERVICE DIRECTLY TO THE GOVERNMENT AT JUST AND REASONABLE RATES, AND IS FREE TO EXERCISE ITS STATUTORY AUTHORITY WITH RESPECT TO ANY CONTRACT THE GOVERNMENT MAY ENTER INTO WITH COMSAT, A CONTRACT THAT WILL INCLUDE PERMISSION FOR ASSIGNMENT TO ONE OR SEVERAL OF THE RECORD CARRIERS.

TO SELLERS, CONNER AND CUNEO, JULY 26, 1966:

BY LETTER DATED JULY 15, 1966, AND SUBSEQUENT CORRESPONDENCE, YOU PROTESTED, ON BEHALF OF ITT WORLD COMMUNICATIONS INC. (ITT), AGAINST THE PENDING AWARD OF A CONTRACT TO THE COMMUNICATIONS SATELLITE CORPORATION (COMSAT) BY THE DEFENSE COMMUNICATIONS AGENCY (DCA), FOR COMMUNICATIONS SERVICES IN THE PACIFIC OCEAN AREA VIA A COMBINATION OF SATELLITE AND TERRESTRIAL FACILITIES.

A REQUEST FOR PROPOSALS FOR THIS REQUIREMENT WAS ISSUED ON MAY 2, 1966, TO COMSAT, ITT, RCA COMMUNICATIONS, INC; WESTERN UNION INTERNATIONAL AND THE HAWAIIAN TELEPHONE COMPANY-ALL OF WHOM ARE CARRIERS WITHIN THE MEANING OF 47 U.S.C. 153/H). ALL CARRIERS SUBMITTED PROPOSALS ON MAY 31, 1966, AND, UPON EVALUATION, IT WAS DETERMINED BY DCA THAT THE COMSAT PROPOSAL OFFERED THE GREATEST ADVANTAGE TO THE GOVERNMENT AND AFFORDED THE GREATEST ASSURANCE OF PROVIDING THE EARLIEST POSSIBLE SERVICE. ALL OTHER COMPETING INTERNATIONAL COMMUNICATIONS CARRIERS WERE ADVISED OF THIS DETERMINATION, AND FOR THE REASONS STATED IT IS PROPOSED TO AWARD A PRELIMINARY COMMUNICATIONS SERVICE AUTHORIZATION (CSA) TO COMSAT UNDER THE AUTHORITY OF 10 U.S.C. 2304/A) (10) AND ARMED SERVICES PROCUREMENT REGULATION 3- 210.2/V). ITT'S PROTEST, AS SUPPLEMENTED BY LETTERS DATED JULY 21 AND JULY 22, 1966, WHICH IS PREMISED ON ADVANCE PUBLIC ANNOUNCEMENT OF JUNE 23, 1966, BY THE FEDERAL COMMUNICATIONS COMMISSION (FCC) CONCERNING COMSAT "AUTHORIZED USER" SERVICES AND FORMAL OPINION BY FCC DATED JULY 21, 1966, IS TO THE EFFECT THAT UNTIL SUCH TIME AS COMSAT IS AUTHORIZED BY THE FCC TO PROVIDE THE PARTICULAR SERVICES HERE INVOLVED TO THE GOVERNMENT, DCA IS WITHOUT AUTHORITY TO ENTER INTO A CONTRACT WITH COMSAT.

FCC ISSUED ITS FORMAL OPINION IN THE MATTER OF COMSAT "AUTHORIZED USER" SERVICES ON JULY 21, 1966, AND CONCLUDED THAT "ONLY IN UNIQUE OR EXCEPTIONAL CIRCUMSTANCES SHOULD NON-CARRIER ENTITIES DEAL DIRECTLY WITH COMSAT;, THE COMMISSION FURTHER CONCLUDED AS FOLLOWS:

37. WE HAVE REACHED THE FOLLOWING POLICY CONSLUSIONS:

(A) THE TERRESTRIAL CARRIERS CANNOT UNDER EXISTING LAW THEMSELVES BE LICENSED TO OPERATE THE SPACE SEGMENT OF THE INTERNATIONAL SYSTEM AND THEREFORE CANNOT COMPETE EFFECTIVELY IN FURNISHING SATELLITE SERVICE TO THE PUBLIC.

(B) COMSAT IS NOT AND DOES NOT PROPOSE TO BE A FULL SERVICE CARRIER MEETING DIRECTLY THE NEEDS OF THE VAST MAJORITY OF USERS OF INTERNATIONAL SERVICES FOR ALL CLASSES OF COMMUNICATION SERVICES.

(C) IF COMSAT WERE TO BE PERMITTED TO PROVIDE LEASED CHANNEL SERVICES DIRECTLY TO USERS, OTHER THAN IN UNIQUE OR EXCEPTIONAL CIRCUMSTANCES, THE BASIC PURPOSES OF CONGRESS IN ENACTING THE SATELLITE ACT-REFLECTION OF THE BENEFITS OF THE NEW TECHNOLOGY IN BOTH QUALITY OF SERVICE AND CHARGES THEREFOR-WOULD BE FRUSTRATED.

(D) A REQUIREMENT THAT, EXCEPT IN UNIQUE AND EXTRAORDINARY CIRCUMSTANCES, USERS TAKE SERVICE FROM THE TERRESTRIAL CARRIERS SHOULD NOT HAVE ADVERSE EFFECTS UPON EITHER COMSAT OR THE USERS BUT INSTEAD SHOULD MAKE IT POSSIBLE TO REDUCE RATES FOR ALL CLASSES OF USERS.

38. OUR ULTIMATE CONSLUSIONS ARE:

(A) COMSAT MAY AS A MATTER OF LAW BE AUTHORIZED TO PROVIDE SERVICE DIRECTLY TO NON-CARRIER ENTITIES;

(B) COMSAT IS TO BE PRIMARILY A CARRIER'S CARRIER AND IN ORDINARY CIRCUMSTANCES USERS OF SATELLITE FACILITIES SHOULD BE SERVED BY THE TERRESTRIAL CARRIERS;

(C) IN UNIQUE AND EXCEPTIONAL CIRCUMSTANCES COMSAT MAY BE AUTHORIZED TO PROVIDE SERVICES DIRECTLY TO NON-CARRIER USERS; THEREFORE, THE AUTHORIZATION TO COMSAT TO PROVIDE SERVICES IS DEPENDENT UPON THE NATURE OF THE SERVICE, I.E; UNIQUE OR EXCEPTIONAL, RATHER THAN THE IDENTITY OF THE USER. THE UNITED STATES GOVERNMENT HAS A SPECIAL POSITION BECAUSE OF ITS UNIQUE OR NATIONAL INTEREST REQUIREMENTS; COMSAT MAY BE AUTHORIZED TO PROVIDE SERVICE DIRECTLY TO THE GOVERNMENT, WHENEVER SUCH SERVICE IS REQUIRED TO MEET UNIQUE GOVERNMENTAL NEEDS OR IS OTHERWISE REQUIRED IN THE NATIONAL INTEREST, IN CIRCUMSTANCES WHERE THE GOVERNMENT'S NEEDS CANNOT BE EFFECTIVELY MET UNDER THE CARRIER'S CARRIER APPROACH.

WHILE THE COMMISSION DID NOT PRESCRIBE ANY SPECIFIC PROCEDURES TO IMPLEMENT ITS POLICY DETERMINATIONS QUOTED ABOVE, IT DID REQUIRE THAT ANY REQUEST BY COMSAT FOR AUTHORIZATION TO PROVIDE SERVICE DIRECTLY TO ANY NONCARRIER ENTITY SHOULD INCLUDE SHOWINGS BY COMSAT AS TO:

(I) WHETHER THE PROPOSED SERVICE VIA SATELLITE IS AVAILABLE FROM TERRESTRIAL CARRIERS, INCLUDING EVIDENCE OF REQUEST MADE THEREFOR AND THE RESPONSE OF THE CARRIERS;

(II) WHETHER THE FACILITIES TO PROVIDE THIS SERVICE ARE AVAILABLE, AND, IF NOT, A DESCRIPTION OF THE NEW OR EXPANDED FACILITIES REQUIRED AS WELL AS THE COST THEREOF;

(III) A STATEMENT SHOWING WHY THE CIRCUMSTANCES INVOLVED ARE SO UNIQUE AND EXCEPTIONAL AS TO REQUIRE SERVICE DIRECTLY FROM COMSAT OR WHAT THE NATIONAL INTEREST REQUIREMENTS ARE THAT INDICATE THAT SERVICE CANNOT BE PROVIDED UNDER THE CARRIER'S CARRIER APPROACH.

(IV) ANY OTHER FACTS WHICH WOULD INDICATE THAT THE PUBLIC INTEREST WOULD BE SERVED BY A GRANT.

THE ABOVE REQUIRED INFORMATION SHALL BE SET FORTH IN SUPPORT OF THE APPLICATIONS FOR MODIFICATION OF THE APPLICABLE EARTH STATION AND/OR SATELLITE STATION LICENSES AS WELL AS FOR AUTHORIZATION TO ACQUIRE UNITS OF SATELLITE UTILIZATION WHICH COMSAT SHALL FILE IN EACH CASE IN WHICH IT IS REQUESTED TO PROVIDE A PARTICULAR SERVICE DIRECTLY TO ANY NON-CARRIER USERS. UNLESS AND UNTIL SUCH AUTHORIZATIONS ARE GRANTED, COMSAT SHALL NOT PROVIDE SERVICES TO ANY NON-CARRIER ENTITY. IN ADDITION COMSAT, OF COURSE, MUST ALSO HAVE AN EFFECTIVE TARIFF ON FILE BEFORE IT CAN PROVIDE SERVICE DIRECTLY TO ANY NON-CARRIER ENTITY IT MAY BE AUTHORIZED TO SERVE.

IT IS CONTENDED THAT UNLESS AND UNTIL THE COMMISSION AUTHORIZES COMSAT TO FURNISH THE SERVICES REQUIRED BY DCA AWARD OF A CONTRACT FOR SUCH SERVICES WOULD BE IMPROPER AND THAT, IF AWARDED WITHOUT THE COMMISSION'S AUTHORIZATION, SUCH CONTRACT WOULD NOT CONSTITUTE A PROPER CHARGE AGAINST APPROPRIATED FUNDS.

PRELIMINARY TO OUR CONSIDERATION OF THE ARGUMENTS ADVANCED IN SUPPORT OF THE ABOVE POSITION, WE MUST POINT OUT THAT WE HAVE CONSISTENTLY TAKEN THE POSITION THAT DETERMINATIONS, ORDERS, OR OPINIONS OF THE FEDERAL REGULATORY AGENCIES PROMULGATED IN ACCORD WITH THEIR STATUTORY RESPONSIBILITIES ARE NOT SUBJECT TO REVIEW OR QUESTION BY OUR OFFICE. COMP. GEN. 555, 560. WE THEREFORE ARE OBLIGED TO WEIGH THE MERITS OF THE PROTEST IN THE LIGHT OF THE DETERMINATIONS AND CONCLUSIONS REACHED BY THE COMMISSION IN ITS JULY 21 OPINION. WE THUS ARRIVE AT THE VERY ESSENCE OF THE PROTEST, THAT IS, WHETHER AN AWARD OF A CONTRACT AT THIS TIME TO COMSAT WOULD, IN FACT, CONSTITUTE A VIOLATION OF THE OPINION OR WOULD OTHERWISE BE CONTRARY TO THE GRANT OF PROCUREMENT AUTHORITY VESTED BY STATUTE IN DCA.

THE CONCLUSIONS REACHED BY THE COMMISSION IN ITS JULY 21 OPINION DID NOT IMPOSE ANY DIRECT, SPECIFIC LIMITATIONS UPON THE EXISTING STATUTORY AUTHORITY OF DCA TO CONTRACT FOR COMMUNICATIONS SERVICES FROM CARRIERS, INCLUDING COMSAT. THE SPECIAL STATUS OF THE GOVERNMENT AS AN "AUTHORIZED USER" OF COMSAT FACILITIES WAS FULLY RECOGNIZED BY THE COMMISSION WHEN IT STATED IN PARAGRAPH 25 OF THE OPINION: "WE EMPHASIZE THAT IN ALL CASES WHERE SUCH NATIONAL INTEREST CIRCUMSTANCES EXIST, WE SHALL ACT PROMPTLY TO AUTHORIZE COMSAT TO PROVIDE SERVICE DIRECTLY TO THE GOVERNMENT AT JUST AND REASONABLE RATES;, IT IS SIGNIFICANT ALSO TO NOTE THAT NOWHERE IN THE CONCLUSIONS REACHED BY THE COMMISSION IS CONTRACTING BY COMSAT WITH THE GOVERNMENT LIMITED. AS A CONDITION TO PROVIDING SERVICES DIRECTLY TO ANY NONCARRIER ENTITY, COMSAT IS REQUIRED TO SHOW THE PARTICULAR CIRCUMSTANCES JUSTIFYING THE FURNISHING OF SUCH SERVICES. THE "SERVICES" WITH WHICH WE ARE CONCERNED HERE ARE SATELLITE TELECOMMUNICATION "SERVICES" TO BE FURNISHED TO DCA BEGINNING ON APRIL 1, 1967. WHILE THESE "SERVICES" MAY NOT BE PROVIDED BY COMSAT TO DCA UNLESS AND UNTIL AUTHORIZATION IS GRANTED BY FCC, WE FIND NO PROHIBITION AGAINST CONTRACTING FOR SUCH SERVICES.

WITHOUT ATTEMPTING TO AUTHORITATIVELY INTERPRET THE SCOPE AND INTENT OF THE COMMISSION'S OPINION IT IS OUR VIEW THAT IT DOES NOT PRECLUDE EITHER COMSAT OR DCA FROM ENTERING INTO A CONTRACT TO PROVIDE SERVICES TO THE GOVERNMENT PRIOR TO OBTAINING AUTHORIZATION TO FURNISH SUCH SERVICES.

WE HAVE CONSIDERED THE AUTHORITIES CITED BY YOU IN SUPPORT OF THE PROTEST AND WE FIND NO SUBSTANTIAL LEGAL BASIS FOR THEIR APPLICATION HERE. STATED ABOVE, DCA IS AUTHORIZED TO CONTRACT FOR CARRIER COMMUNICATIONS SERVICES UNDER NEGOTIATION PROCEDURES. WE FIND NOTHING IN THE MILITARY PROCUREMENT STATUTE OR ITS IMPLEMENTING REGULATION WHICH WOULD REQUIRE US TO QUESTION THE PROPOSED AWARD OF A CONTRACT TO COMSAT UNDER THE CIRCUMSTANCES OF THIS CASE, ESPECIALLY IN VIEW OF THE REPORTED URGENCY OF THE MATTER AND SINCE FCC WILL BE FREE TO EXERCISE ITS STATUTORY AUTHORITY WITH RESPECT TO ANY SUCH CONTRACT THE GOVERNMENT MAY ENTER INTO WITH COMSAT. FURTHER, WE HAVE BEEN ADVISED BY THE DEPARTMENT OF DEFENSE (DOD) THAT THE CONTRACT WILL INCLUDE A SUITABLE ASSIGNMENT CLAUSE WHICH WILL PERMIT ASSIGNMENT OF THE CONTRACT AT SOME FUTURE DATE TO ONE, OR SEVERAL OF THE RECORD CARRIERS, IF THEY CAN FULLY MEET DOD REQUIREMENTS.