Comsat

Harvard Business School 9-276-195 Rev. June 11, 1993 communication theory major planet Corporation In January 1975 the Federal Communications Commission (FCC) concluded an 11- course of study investigation of the appropriate economic mandate of the Communications Satellite Corporation (Comsat). In the coming months the commissioners would relieve a decision which would address the full range of regulatory issues. One of the most important of these was the determination of a unclouded rate of bring round on Comsats capital. The company had pass on a 12% rate of return for the period 1964 to 1974 and 15% thereafter. However, the FCCs trial staff1 had recommended setting Comsats allowable return at 7% for the years between 1964 and 1971 and at 8.33% for 1972 with one-year increases to 9.42% by 1975 (Exhibit 1). If the FCC rejected Comsats request for 1975 in choose of the staffs recommendation, the companys revenues in that year might be reduced by as lots as 30%; its net operating income could decline by 45% and earnings per share could drop by 35%. History and Role of Comsat The Communications Satellite lay out of 1962 (the Satellite Act) set forth a national policy mandating the origination of a worldwide communications major planet system in cooperation with other nations.

This act authorized the formation of a new-sprung(prenominal) private company to represent the United States in the proposed satellite system. Comsat was incorporated on February 1, 1963 to fulfill this role. Under the Satellite Act it was charged with establishing as expeditiously as practicable a commercial communications satellite system as dissever of an improved global communications network. The act specifically unavoidable the inclusion of economically less developed countries in the ontogeny of this system. Although Comsat was incorporated as a private company it was oblige under the Satellite Act to offer its customers the benefits of the new communications technology in terms both of improved theatrical role and of reduced... If you want to get a full essay, order it on our website: Ordercustompaper.com

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