A staff paper to the President's Task Force on Communications Policy examines the feasibility of a domestic communications satellite system. Although, with expected technological advancement, satellites may play a significant role in domestic transmission and are economically feasible right now, a number of remaining questions make the establishment of a full-scale system premature at this time. These questions involve the nature of the optimal system for changing communications needs, whether general purpose or specialized, and the best use of the electromagnetic spectrum. Consequently, a pilot project should be initiated to develop necessary technical data on different system types, spectrum interference, the feasibility of a multiple-beam satellite, and other subjects. Comsat should be given primary responsibility with other domestic carriers allowed to participate. Data generated by the pilot project will allow further commitments on the structure of a mature domestic satellite system. Appendices are included. (BB)