INTELSAT DENIES IT WAS SENDING MESSAGE TO STATE DEPT.

Space analyst called Intelsat’s decision to cancel purchase of Astrium-built APR-3 satellite (CD Aug 29 p8) an “empty bluff,” implying company might have been trying to send message to State Dept. protesting its rigid export policies. Analyst said: “What are [Intelsat’s] realistic options? Who else are they going to buy satellites from? The Indians, or the Russians, or the Chinese?” Intelsat planned to launch APR-3 aboard Chinese Long March rockets, but after months of waiting was unable to obtain necessary presidential waiver that’s provided after State Dept. recommendation.

Intelsat Vp-Corp. Services Tony Trujillo confirmed that deal with Astrium for APR-3 had been terminated, but said decision wasn’t attempt to send message to State Dept.: “This decision in no way is solely the result of our inability to secure the export license from the State Department… We are not unhappy at all with the State Department’s licensing process and in no way does this reflect any dissatisfaction with Astrium-built satellites.”

Issues involving national security have faced greater scrutiny since authority over all satellite exports was switched to State Dept. from Commerce Dept., adding possibility that companies such as Intelsat would consider buying satellites without U.S.-manufactured components. Analyst said most major communications satellites were manufactured with significant amount of U.S. content, and there weren’t many viable options outside U.S.: “A European company that really values Intelsat business will be encouraged to eliminate U.S. components.” Such development would be very harmful to relations between U.S. and Europe, analyst said. Trujillo said most Intelsat satellites were built by U.S. companies, and that reflected company’s high degree of satisfaction with those manufacturers: “It’s in our interest to have a diversity of suppliers… We'll always look at manufacturers in the U.S. and elsewhere.”

Many industry sources have alluded to notion that Intelsat has and would continue to receive favorable treatment from U.S. govt. in all areas of satellite business since its recent privatization, although State’s drawn-out process and unwillingness to provide waiver for APR-3 could contradict theory. Analyst said Intelsat “is a huge agency with a lot of pull in Washington… Certainly State would deny they give anyone favoritism, but there’s no denying that Intelsat has infinitely more clout with government agencies than some new company that just launched its first satellite.” Trujillo said he wasn’t aware of any suggestion that company ever would receive preferential treatment, and in aftermath of APR-3 he said it “clearly is not true.”

Most in satellite industry hope to see export authority handed back to Commerce Dept., sources said. Still, Trujillo insisted Intelsat wouldn’t let U.S. licensing process deter it from procuring non-U.S. satellite launches in future. But analyst said Intelsat’s cancellation of APR-3 purchase served needs of other companies in industry that wanted to speak out against strict policies aimed at protecting national security over facilitating commerce. “It’s still a sensitive issue,” analyst said. “The State Department does not want to wrangle with Congress.” State had no comment on subject.