In a 1954 speech and 1955 article, Pierce described the usefulness of a communications "mirror" in space, a medium-orbit "repeater" and a 24-hour-orbit "repeater." In comparing the communications capacity of a satellite, which he estimated the capacity at 1,000 simultaneous telephone calls, and the capacity of the first trans-atlantic telephone cable, which could carry 36 simultaneous telephone calls at a cost of 30-50 million dollars, Pierce wondered if a satellite would be worth a billion dollars (Whalen, n.d.).
By the middle of 1961, RCA had a contract with NASA to build, a 4000 mile high, medium-orbit, active communications satellite called RELAY, AT&T was working on its own medium-orbit satellite called TELSTAR, and Hughes Aircraft Company had an exclusive contract to build a 24-hour orbit, 20,000 mile high satellite, called SYNCOM. By 1964, two TELSTARs, two RELAYs, and two SYNCOMs had operated successfully in space. The transponder technology used by AT&T in the TELSTAR I satellite is current technology in use today (Whalen, n.d.). On April 6, 1965, a new company called COMSAT launched its first satellite, EARLY BIRD, from Cape Canaveral beginning Global satellite communications. The EARLY BIRD satellite provided almost 10 times the capacity of submarine telephone cables for almost 1/10th the price. Satellites are still competitive with cable for point-to-point communications, but the future advantage may lie with fiber-optic cable (Whalen, n.d.).
How Satellites Work
Orbit
First, as one would guess, satellites are launched into orbit.
References: Boeing (2002). What is a satellite. Retrieved October 24, 2005 from: http://www.boeing.com/defense-space/space/bss/what_is_a_satellite.pdf Whalen, David, J. (n.d.). Communication satellites: making the global village possible. Retrieved October 24, 2005 from: http://www.hq.nasa.gov/office/pao/History/satcomhistory.html Bergeron, Bryan P. (1990). A laser-communications primer. Retreived October 26, 2005 from: http://www.arrl.org/tis/info/pdf/9009019.pdf F.C.C. (2005). Voice over internet protocol. Retrieved October 26, 2005 from: http://www.fcc.gov/voip/