Born in the Cold War, powered by rivalry and unhindered by free-market restrictions, Intelsat linked the planet with its satellites – but hardly anyone knew about it. Now, it struggles to stay afloat.
Anyone who remembers television in the late 20th century will remember the thrill of watching international broadcasts. The grainy pictures of faraway and foreign places, with their strange road signs, adverts and people. The sound delayed and crackled like a long-distance phone call.
Now we live in an age where a crystal-clear conversation with multiple people on multiple continents using a device lighter than a deck of cards is as commonplace as sliced bread, it’s easy to forget how powerful that early magic felt.
It’s even easier to forget the organization that launched the world’s first commercial communications satellite (Intelsat 1) in 1965, bringing many of us those miraculous early broadcasts that changed history and propelled us to the connected world, because we probably never knew its name. Now its prospects are less certain.
Intelsat filed for Chapter 11 bankruptcy on Wednesday. The move is a part of restructuring process to help the company cut millions of dollars in debt and free resources for fresh projects.
This vast entity was born from the Cold War, having been instigated by John F Kennedy in 1961 as part of the space and technology races with the USSR. It was a satellite network that aimed to be a more expensive but also more reliable rival to the Soviet Molniya (Lightning) satellites.
It wasn’t a purely American venture, either. This was a different US to the current one. It was capitalist, no doubt, but a less voracious strain that didn’t view public spending as ‘socialism’ –especially when it came to besting the Russians, who had their own network with other Eastern Bloc countries.
So, the US government pumped money into satellites that weren’t available to the highest bidders, but rather to its strategic allies. Intelsat was an intergovernmental consortium, beginning with seven partners in 1964. Founding members included the UK, Canada and Spain. Within ten years it had had over 8o signatories.
Although he didn’t live to see the formal creation of Intelsat, what Kennedy started thrived for decades, bringing live pictures of major news and sport events from around the world to the world. It made the planet smaller, and made us all more a little more cosmopolitan.
In filing for bankruptcy, the company cited the Covid-19 pandemic, but that’s not what did the damage. Intelsat was hit by a ‘triple threat.’ First, the ruthless neoliberal economics that came to the fore in the 1980s and abhorred the unprofitable.
This was followed by the end of the Cold War (or that version, at least). Not that the US didn’t still have enemies, but the Big One had gone, which made it hard to justify the public money that went into it. So, in 2001, it was privatized, with shares being distributed among partners according to their use of the service. Four years later, it was sold to four private equity firms.
After that, like many businesses, it was sold, floated and almost merged. But the third and final nail in its coffin seems, in a bitter irony, to have been the insatiable desire for ever-better global communications it helped create.
Those once-quaint ‘satellite delays’ became less and less palatable to both broadcasters and internet users. Fiber-optic cables were laid on ocean floors, allowing your San Diego to Seoul lockdown Zoom chat to travel at the speed of light. Those cables still don’t reach everyone, but they reach enough people to make something the size of Intelsat less necessary.
So, what will happen to our barely known friend in the sky? The company says it’s hoping to reshape and launch new satellites. It has already received $1 billion of debtor-in-possession financing, money that Intelsat badly needs to stay afloat while reorganizing.
If it can’t rebuild, that may lead to its break up, with its 50-plus satellites going to new homes.
Either way, just like television, it will never be the same again.
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