[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1872 Referred in Senate (RFS)]

  2d Session
                                H. R. 1872


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 7, 1998

    Received; read twice and referred to the Committee on Commerce, 
                      Science, and Transportation

_______________________________________________________________________

                                 AN ACT


 
     To amend the Communications Satellite Act of 1962 to promote 
  competition and privatization in satellite communications, and for 
                            other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Communications Satellite Competition 
and Privatization Act of 1998''.

SEC. 2. PURPOSE.

    It is the purpose of this Act to promote a fully competitive global 
market for satellite communication services for the benefit of 
consumers and providers of satellite services and equipment by fully 
privatizing the intergovernmental satellite organizations, INTELSAT and 
Inmarsat.

SEC. 3. REVISION OF COMMUNICATIONS SATELLITE ACT OF 1962.

    The Communications Satellite Act of 1962 (47 U.S.C. 101) is amended 
by adding at the end the following new title:

        ``TITLE VI--COMMUNICATIONS COMPETITION AND PRIVATIZATION

      ``Subtitle A--Actions To Ensure Procompetitive Privatization

``SEC. 601. FEDERAL COMMUNICATIONS COMMISSION LICENSING.

    ``(a) Licensing for Separated Entities.--
            ``(1) Competition test.--The Commission may not issue a 
        license or construction permit to any separated entity, or 
        renew or permit the assignment or use of any such license or 
        permit, or authorize the use by any entity subject to United 
        States jurisdiction of any space segment owned, leased, or 
        operated by any separated entity, unless the Commission 
        determines that such issuance, renewal, assignment, or use will 
        not harm competition in the telecommunications market of the 
        United States. If the Commission does not make such a 
        determination, it shall deny or revoke authority to use space 
        segment owned, leased, or operated by the separated entity to 
        provide services to, from, or within the United States.
            ``(2) Criteria for competition test.--In making the 
        determination required by paragraph (1), the Commission shall 
        use the licensing criteria in sections 621 and 623, and shall 
        not make such a determination unless the Commission determines 
        that the privatization of any separated entity is consistent 
        with such criteria.
    ``(b) Licensing for INTELSAT, Inmarsat, and Successor Entities.--
            ``(1) Competition test.--The Commission shall substantially 
        limit, deny, or revoke the authority for any entity subject to 
        United States jurisdiction to use space segment owned, leased, 
        or operated by INTELSAT or Inmarsat or any successor entities 
        to provide non-core services to, from, or within the United 
        States, unless the Commission determines--
                    ``(A) after January 1, 2002, in the case of 
                INTELSAT and its successor entities, that INTELSAT and 
                any successor entities have been privatized in a manner 
                that will not harm competition in the 
                telecommunications markets of the United States; or
                    ``(B) after January 1, 2001, in the case of 
                Inmarsat and its successor entities, that Inmarsat and 
                any successor entities have been privatized in a manner 
                that will not harm competition in the 
                telecommunications markets of the United States.
            ``(2) Criteria for competition test.--In making the 
        determination required by paragraph (1), the Commission shall 
        use the licensing criteria in sections 621, 622, and 624, and 
        shall not make such a determination unless the Commission 
        determines that such privatization is consistent with such 
        criteria.
            ``(3) Clarification: competitive safeguards.--In making its 
        licensing decisions under this subsection, the Commission shall 
        consider whether users of non-core services provided by 
        INTELSAT or Inmarsat or successor or separated entities are 
        able to obtain non-core services from providers offering 
        services other than through INTELSAT or Inmarsat or successor 
        or separated entities, at competitive rates, terms, or 
        conditions. Such consideration shall also include whether such 
        licensing decisions would require users to replace equipment at 
        substantial costs prior to the termination of its design life. 
        In making its licensing decisions, the Commission shall also 
        consider whether competitive alternatives in individual markets 
        do not exist because they have been foreclosed due to 
        anticompetitive actions undertaken by or resulting from the 
        INTELSAT or Inmarsat systems. Such licensing decisions shall be 
        made in a manner which facilitates achieving the purposes and 
        goals in this title and shall be subject to notice and comment.
    ``(c) Additional Considerations in Determinations.--In making its 
determinations and licensing decisions under subsections (a) and (b), 
the Commission shall take into consideration the United States 
obligations and commitments for satellite services under the Fourth 
Protocol to the General Agreement on Trade in Services.
    ``(d) Independent Facilities Competition.--Nothing in this section 
shall be construed as precluding COMSAT from investing in or owning 
satellites or other facilities independent from INTELSAT and Inmarsat, 
and successor or separated entities, or from providing services through 
reselling capacity over the facilities of satellite systems independent 
from INTELSAT and Inmarsat, and successor or separated entities. This 
subsection shall not be construed as restricting the types of contracts 
which can be executed or services which may be provided by COMSAT over 
the independent satellites or facilities described in this subsection.

``SEC. 602. INTELSAT OR INMARSAT ORBITAL LOCATIONS.

    ``(a) Required Actions.--Unless, in a proceeding under section 
601(b), the Commission determines that INTELSAT or Inmarsat have been 
privatized in a manner that will not harm competition, then--
            ``(1) the President shall oppose, and the Commission shall 
        not assist, any registration for new orbital locations for 
        INTELSAT or Inmarsat--
                    ``(A) with respect to INTELSAT, after January 1, 
                2002; and
                    ``(B) with respect to Inmarsat, after January 1, 
                2001; and
            ``(2) the President and Commission shall, consistent with 
        the deadlines in paragraph (1), take all other necessary 
        measures to preclude procurement, registration, development, or 
        use of new satellites which would provide non-core services.
    ``(b) Exception.--
            ``(1) Replacement and previously contracted satellites.--
        Subsection (a) shall not apply to--
                    ``(A) orbital locations for replacement satellites 
                (as described in section 622(2)(B)); and
                    ``(B) orbital locations for satellites that are 
                contracted for as of March 25, 1998, if such satellites 
                do not provide additional services.
            ``(2) Limitation on exception.--Paragraph (1) is available 
        only with respect to satellites designed to provide services 
        solely in the C and Ku for INTELSAT, and L for Inmarsat bands.

``SEC. 603. ADDITIONAL SERVICES AUTHORIZED.

    ``(a) Services Authorized During Continued Progress.--
            ``(1) Continued authorization.--The Commission may issue an 
        authorization, license, or permit to, or renew the license or 
        permit of, any provider of services using INTELSAT or Inmarsat 
        space segment, or authorize the use of such space segment, for 
        additional services (including additional applications of 
        existing services) or additional areas of business, subject to 
        the requirements of this section.
            ``(2) Additional services permitted under new contracts 
        unless progress fails.--If the Commission makes a finding under 
        subsection (b) that conditions required by such subsection have 
        not been attained, the Commission may not, pursuant to 
        paragraph (1), permit such additional services to be provided 
        directly or indirectly under new contracts for the use of 
        INTELSAT or Inmarsat space segment, unless and until the 
        Commission subsequently makes a finding under such subsection 
        that such conditions have been attained.
            ``(3) Prevention of evasion.--The Commission shall, by 
        rule, prescribe means reasonably designed to prevent evasions 
        of the limitations contained in paragraph (2) by customers who 
        did not use specific additional services as of the date of the 
        Commission's most recent finding under subsection (b) that the 
        conditions of such subsection have not been obtained.
    ``(b) Requirements for Annual Findings.--
            ``(1) General requirements.--The findings required under 
        this subsection shall be made, after notice and comment, on or 
        before January 1 of 1999, 2000, 2001, and 2002. The Commission 
        shall find that the conditions required by this subsection have 
        been attained only if the Commission finds that--
                    ``(A) substantial and material progress has been 
                made during the preceding period at a rate and manner 
                that is probable to result in achieving pro-competitive 
                privatizations in accordance with the requirements of 
                this title; and
                    ``(B) neither INTELSAT nor Inmarsat are hindering 
                competitors' or potential competitors' access to the 
                satellite services marketplace.
            ``(2) First finding.--In making the finding required to be 
        made on or before January 1, 1999, the Commission shall not 
        find that the conditions required by this subsection have been 
        attained unless the Commission finds that--
                    ``(A) COMSAT has submitted to the INTELSAT Board of 
                Governors a resolution calling for the pro-competitive 
                privatization of INTELSAT in accordance with the 
                requirements of this title; and
                    ``(B) the United States has submitted such 
                resolution at the first INTELSAT Assembly of Parties 
                meeting that takes place after such date of enactment.
            ``(3) Second finding.--In making the finding required to be 
        made on or before January 1, 2000, the Commission shall not 
        find that the conditions required by this subsection have been 
        attained unless the INTELSAT Assembly of Parties has created a 
        working party to consider and make recommendations for the pro-
        competitive privatization of INTELSAT consistent with such 
        resolution.
            ``(4) Third finding.--In making the finding required to be 
        made on or before January 1, 2001, the Commission shall not 
        find that the conditions required by this subsection have been 
        attained unless the INTELSAT Assembly of Parties has approved a 
        recommendation for the pro-competitive privatization of 
        INTELSAT in accordance with the requirements of this title.
            ``(5) Fourth finding.--In making the finding required to be 
        made on or before January 1, 2002, the Commission shall not 
        find that the conditions required by this subsection have been 
        attained unless the pro-competitive privatization of INTELSAT 
        in accordance with the requirements of this title has been 
        achieved by such date.
            ``(6) Criteria for evaluation of hindering access.--The 
        Commission shall not make a determination under paragraph 
        (1)(B) unless the Commission determines that INTELSAT and 
        Inmarsat are not in any way impairing, delaying, or denying 
        access to national markets or orbital locations.
    ``(c) Exception for Services Under Existing Contracts If Progress 
Not Made.--This section shall not preclude INTELSAT or Inmarsat or any 
signatory thereof from continuing to provide additional services under 
an agreement with any third party entered into prior to any finding 
under subsection (b) that the conditions of such subsection have not 
been attained.

  ``Subtitle B--Federal Communications Commission Licensing Criteria: 
                         Privatization Criteria

``SEC. 621. GENERAL CRITERIA TO ENSURE A PRO-COMPETITIVE PRIVATIZATION 
              OF INTELSAT AND INMARSAT.

    ``The President and the Commission shall secure a pro-competitive 
privatization of INTELSAT and Inmarsat that meets the criteria set 
forth in this section and sections 622 through 624. In securing such 
privatizations, the following criteria shall be applied as licensing 
criteria for purposes of subtitle A:
            ``(1) Dates for privatization.--Privatization shall be 
        obtained in accordance with the criteria of this title of--
                    ``(A) INTELSAT as soon as practicable, but no later 
                than January 1, 2002; and
                    ``(B) Inmarsat as soon as practicable, but no later 
                than January 1, 2001.
            ``(2) Independence.--The successor entities and separated 
        entities of INTELSAT and Inmarsat resulting from the 
        privatization obtained pursuant to paragraph (1) shall--
                    ``(A) be entities that are national corporations; 
                and
                    ``(B) have ownership and management that is 
                independent of--
                            ``(i) any signatories or former signatories 
                        that control access to national 
                        telecommunications markets; and
                            ``(ii) any intergovernmental organization 
                        remaining after the privatization.
            ``(3) Termination of privileges and immunities.--The 
        preferential treatment of INTELSAT and Inmarsat shall not be 
        extended to any successor entity or separated entity of 
        INTELSAT or Inmarsat. Such preferential treatment includes--
                    ``(A) privileged or immune treatment by national 
                governments;
                    ``(B) privileges or immunities or other competitive 
                advantages of the type accorded INTELSAT and Inmarsat 
                and their signatories through the terms and operation 
                of the INTELSAT Agreement and the associated 
                Headquarters Agreement and the Inmarsat Convention; and
                    ``(C) preferential access to orbital locations, 
                including any access to orbital locations that is not 
                subject to the legal or regulatory processes of a 
                national government that applies due diligence 
                requirements intended to prevent the warehousing of 
                orbital locations.
            ``(4) Prevention of expansion during transition.--During 
        the transition period prior to full privatization, INTELSAT and 
        Inmarsat shall be precluded from expanding into additional 
        services (including additional applications of existing 
        services) or additional areas of business.
            ``(5) Conversion to stock corporations.--Any successor 
        entity or separated entity created out of INTELSAT or Inmarsat 
        shall be a national corporation established through the 
        execution of an initial public offering as follows:
                    ``(A) Any successor entities and separated entities 
                shall be incorporated as private corporations subject 
                to the laws of the nation in which incorporated.
                    ``(B) An initial public offering of securities of 
                any successor entity or separated entity shall be 
                conducted no later than--
                            ``(i) January 1, 2001, for the successor 
                        entities of INTELSAT; and
                            ``(ii) January 1, 2000, for the successor 
                        entities of Inmarsat.
                    ``(C) The shares of any successor entities and 
                separated entities shall be listed for trading on one 
                or more major stock exchanges with transparent and 
                effective securities regulation.
                    ``(D) A majority of the board of directors of any 
                successor entity or separated entity shall not be 
                subject to selection or appointment by, or otherwise 
                serve as representatives of--
                            ``(i) any signatory or former signatory 
                        that controls access to national 
                        telecommunications markets; or
                            ``(ii) any intergovernmental organization 
                        remaining after the privatization.
                    ``(E) Any transactions or other relationships 
                between or among any successor entity, separated 
                entity, INTELSAT, or Inmarsat shall be conducted on an 
                arm's length basis.
            ``(6) Regulatory treatment.--Any successor entity or 
        separated entity shall apply through the appropriate national 
        licensing authorities for international frequency assignments 
        and associated orbital registrations for all satellites.
            ``(7) Competition policies in domiciliary country.--Any 
        successor entity or separated entity shall be incorporated and 
        headquartered in a nation or nations that--
                    ``(A) have effective laws and regulations that 
                secure competition in telecommunications services;
                    ``(B) are signatories of the World Trade 
                Organization Basic Telecommunications Services 
                Agreement; and
                    ``(C) have a schedule of commitments in such 
                Agreement that includes non-discriminatory market 
                access to their satellite markets.
            ``(8) Return of unused orbital locations.--INTELSAT, 
        Inmarsat, and any successor entities and separated entities 
        shall not be permitted to warehouse any orbital location that--
                    ``(A) as of March 25, 1998, did not contain a 
                satellite that was providing commercial services, or, 
                subsequent to such date, ceased to contain a satellite 
                providing commercial services; or
                    ``(B) as of March 25, 1998, was not designated in 
                INTELSAT or Inmarsat operational plans for satellites 
                for which construction contracts had been executed.
        Any such orbital location of INTELSAT or Inmarsat and of any 
        successor entities and separated entities shall be returned to 
        the International Telecommunication Union for reallocation.
            ``(9) Appraisal of assets.--Before any transfer of assets 
        by INTELSAT or Inmarsat to any successor entity or separated 
        entity, such assets shall be independently audited for purposes 
        of appraisal, at both book and fair market value.
            ``(10) Limitation on investment.--Notwithstanding the 
        provisions of this title, COMSAT shall not be authorized by the 
        Commission to invest in a satellite known as K-TV, unless 
        Congress authorizes such investment.

``SEC. 622. SPECIFIC CRITERIA FOR INTELSAT.

    ``In securing the privatizations required by section 621, the 
following additional criteria with respect to INTELSAT privatization 
shall be applied as licensing criteria for purposes of subtitle A:
            ``(1) Number of competitors.--The number of competitors in 
        the markets served by INTELSAT, including the number of 
        competitors created out of INTELSAT, shall be sufficient to 
        create a fully competitive market.
            ``(2) Prevention of expansion during transition.--
                    ``(A) In general.--Pending privatization in 
                accordance with the criteria in this title, INTELSAT 
                shall not expand by receiving additional orbital 
                locations, placing new satellites in existing 
                locations, or procuring new or additional satellites 
                except as permitted by subparagraph (B), and the United 
                States shall oppose such expansion--
                            ``(i) in INTELSAT, including at the 
                        Assembly of Parties;
                            ``(ii) in the International 
                        Telecommunication Union;
                            ``(iii) through United States instructions 
                        to COMSAT;
                            ``(iv) in the Commission, through declining 
                        to facilitate the registration of additional 
                        orbital locations or the provision of 
                        additional services (including additional 
                        applications of existing services) or 
                        additional areas of business; and
                            ``(v) in other appropriate fora.
                    ``(B) Exception for certain replacement 
                satellites.--The limitations in subparagraph (A) shall 
                not apply to any replacement satellites if--
                            ``(i) such replacement satellite is used 
                        solely to provide public-switched network voice 
                        telephony or occasional-use television 
                        services, or both;
                            ``(ii) such replacement satellite is 
                        procured pursuant to a construction contract 
                        that was executed on or before March 25, 1998; 
                        and
                            ``(iii) construction of such replacement 
                        satellite commences on or before the final date 
                        for INTELSAT privatization set forth in section 
                        621(1)(A).
            ``(3) Technical coordination among signatories.--Technical 
        coordination shall not be used to impair competition or 
        competitors, and coordination under Article XIV(d) of the 
        INTELSAT Agreement shall be eliminated.

``SEC. 623. SPECIFIC CRITERIA FOR INTELSAT SEPARATED ENTITIES.

    ``In securing the privatizations required by section 621, the 
following additional criteria with respect to any INTELSAT separated 
entity shall be applied as licensing criteria for purposes of subtitle 
A:
            ``(1) Date for public offering.--Within one year after any 
        decision to create any separated entity, a public offering of 
        the securities of such entity shall be conducted.
            ``(2) Privileges and immunities.--The privileges and 
        immunities of INTELSAT and its signatories shall be waived with 
        respect to any transactions with any separated entity, and any 
        limitations on private causes of action that would otherwise 
        generally be permitted against any separated entity shall be 
        eliminated.
            ``(3) Interlocking directorates or employees.--None of the 
        officers, directors, or employees of any separated entity shall 
        be individuals who are officers, directors, or employees of 
        INTELSAT.
            ``(4) Spectrum assignments.--After the initial transfer 
        which may accompany the creation of a separated entity, the 
        portions of the electromagnetic spectrum assigned as of the 
        date of enactment of this title to INTELSAT shall not be 
        transferred between INTELSAT and any separated entity.
            ``(5) Reaffiliation prohibited.--Any merger or ownership or 
        management ties or exclusive arrangements between a privatized 
        INTELSAT or any successor entity and any separated entity shall 
        be prohibited until 15 years after the completion of INTELSAT 
        privatization under this title.

``SEC. 624. SPECIFIC CRITERIA FOR INMARSAT.

    ``In securing the privatizations required by section 621, the 
following additional criteria with respect to Inmarsat privatization 
shall be applied as licensing criteria for purposes of subtitle A:
            ``(1) Multiple signatories and direct access.--Multiple 
        signatories and direct access to Inmarsat shall be permitted.
            ``(2) Prevention of expansion during transition.--Pending 
        privatization in accordance with the criteria in this title, 
        Inmarsat should not expand by receiving additional orbital 
        locations, placing new satellites in existing locations, or 
        procuring new or additional satellites, except for specified 
        replacement satellites for which construction contracts have 
        been executed as of March 25, 1998, and the United States shall 
        oppose such expansion--
                    ``(A) in Inmarsat, including at the Council and 
                Assembly of Parties;
                    ``(B) in the International Telecommunication Union;
                    ``(C) through United States instructions to COMSAT;
                    ``(D) in the Commission, through declining to 
                facilitate the registration of additional orbital 
                locations or the provision of additional services 
                (including additional applications of existing 
                services) or additional areas of business; and
                    ``(E) in other appropriate fora.
        This paragraph shall not be construed as limiting the 
        maintenance, assistance or improvement of the GMDSS.
            ``(3) Number of competitors.--The number of competitors in 
        the markets served by Inmarsat, including the number of 
        competitors created out of Inmarsat, shall be sufficient to 
        create a fully competitive market.
            ``(4) Reaffiliation prohibited.--Any merger or ownership or 
        management ties or exclusive arrangements between Inmarsat or 
        any successor entity or separated entity and ICO shall be 
        prohibited until 15 years after the completion of Inmarsat 
        privatization under this title.
            ``(5) Interlocking directorates or employees.--None of the 
        officers, directors, or employees of Inmarsat or any successor 
        entity or separated entity shall be individuals who are 
        officers, directors, or employees of ICO.
            ``(6) Spectrum assignments.--The portions of the 
        electromagnetic spectrum assigned as of the date of enactment 
        of this title to Inmarsat--
                    ``(A) shall, after January 1, 2006, or the date on 
                which the life of the current generation of Inmarsat 
                satellites ends, whichever is later, be made available 
                for assignment to all systems (including the privatized 
                Inmarsat) on a nondiscriminatory basis and in a manner 
                in which continued availability of the GMDSS is 
                provided; and
                    ``(B) shall not be transferred between Inmarsat and 
                ICO.
            ``(7) Preservation of the gmdss.--The United States shall 
        seek to preserve space segment capacity of the GMDSS.

``SEC. 625. ENCOURAGING MARKET ACCESS AND PRIVATIZATION.

    ``(a) NTIA Determination.--
            ``(1) Determination required.--Within 180 days after the 
        date of enactment of this section, the Secretary of Commerce 
        shall, through the Assistant Secretary for Communications and 
        Information, transmit to the Commission--
                    ``(A) a list of Member countries of INTELSAT and 
                Inmarsat that are not Members of the World Trade 
                Organization and that impose barriers to market access 
                for private satellite systems; and
                    ``(B) a list of Member countries of INTELSAT and 
                Inmarsat that are not Members of the World Trade 
                Organization and that are not supporting pro-
                competitive privatization of INTELSAT and Inmarsat.
            ``(2) Consultation.--The Secretary's determinations under 
        paragraph (1) shall be made in consultation with the Federal 
        Communications Commission, the Secretary of State, and the 
        United States Trade Representative, and shall take into account 
        the totality of a country's actions in all relevant fora, 
        including the Assemblies of Parties of INTELSAT and Inmarsat.
    ``(b) Imposition of Cost-Based Settlement Rate.--Notwithstanding--
            ``(1) any higher settlement rate that an overseas carrier 
        charges any United States carrier to originate or terminate 
        international message telephone services; and
            ``(2) any transition period that would otherwise apply,
the Commission may by rule prohibit United States carriers from paying 
an amount in excess of a cost-based settlement rate to overseas 
carriers in countries listed by the Commission pursuant to subsection 
(a).
    ``(c) Settlements Policy.--The Commission shall, in exercising its 
authority to establish settlements rates for United States 
international common carriers, seek to advance United States policy in 
favor of cost-based settlements in all relevant fora on international 
telecommunications policy, including in meetings with parties and 
signatories of INTELSAT and Inmarsat.

         ``Subtitle C--Deregulation and Other Statutory Changes

``SEC. 641. DIRECT ACCESS; TREATMENT OF COMSAT AS NONDOMINANT CARRIER.

    ``The Commission shall take such actions as may be necessary--
            ``(1) to permit providers or users of telecommunications 
        services to obtain direct access to INTELSAT telecommunications 
        services--
                    ``(A) through purchases of space segment capacity 
                from INTELSAT as of January 1, 2000, if the Commission 
                determines that--
                            ``(i) INTELSAT has adopted a usage charge 
                        mechanism that ensures fair compensation to 
                        INTELSAT signatories for support costs that 
                        such signatories would not otherwise be able to 
                        avoid under a direct access regime, such as 
                        insurance, administrative, and other operations 
                        and maintenance expenditures;
                            ``(ii) the Commission's regulations ensure 
                        that no foreign signatory, nor any affiliate 
                        thereof, shall be permitted to order space 
                        segment directly from INTELSAT in order to 
                        provide any service subject to the Commission's 
                        jurisdiction; and
                            ``(iii) the Commission has in place a means 
                        to ensure that carriers will be required to 
                        pass through to end-users savings that result 
                        from the exercise of such authority; and
                    ``(B) through investment in INTELSAT as of January 
                1, 2002, if the Commission determines that such 
                investment will be attained under procedures that 
                assure fair compensation to INTELSAT signatories for 
                the market value of their investments;
            ``(2) to permit providers or users of telecommunications 
        services to obtain direct access to Inmarsat telecommunications 
        services--
                    ``(A) through purchases of space segment capacity 
                from Inmarsat as of January 1, 2000, if the Commission 
                determines that--
                            ``(i) Inmarsat has adopted a usage charge 
                        mechanism that ensures fair compensation to 
                        Inmarsat signatories for support costs that 
                        such signatories would not otherwise be able to 
                        avoid under a direct access regime, such as 
                        insurance, administrative, and other operations 
                        and maintenance expenditures;
                            ``(ii) the Commission's regulations ensure 
                        that no foreign signatory, nor any affiliate 
                        thereof, shall be permitted to order space 
                        segment directly from Inmarsat in order to 
                        provide any service subject to the Commission's 
                        jurisdiction; and
                            ``(iii) the Commission has in place a means 
                        to ensure that carriers will be required to 
                        pass through to end-users savings that result 
                        from the exercise of such authority; and
                    ``(B) through investment in Inmarsat as of January 
                1, 2001, if the Commission determines that such 
                investment will be attained under procedures that 
                assure fair compensation to Inmarsat signatories for 
                the market value of their investments;
            ``(3) to act on COMSAT's petition to be treated as a 
        nondominant carrier for the purposes of the Commission's 
        regulations according to the provisions of section 10 of the 
        Communications Act of 1934 (47 U.S.C. 160); and
            ``(4) to eliminate any regulation on the availability of 
        direct access to INTELSAT or Inmarsat or to any successor 
        entities after a pro-competitive privatization is achieved 
        consistent with sections 621, 622, and 624.

``SEC. 642. TERMINATION OF MONOPOLY STATUS.

    ``(a) Renegotiation of Monopoly Contracts Permitted.--The 
Commission shall, beginning January 1, 2000, permit users or providers 
of telecommunications services that previously entered into contracts 
or are under a tariff commitment with COMSAT to have an opportunity, at 
their discretion, for a reasonable period of time, to renegotiate those 
contracts or commitments on rates, terms, and conditions or other 
provisions, notwithstanding any term or volume commitments or early 
termination charges in any such contracts with COMSAT.
    ``(b) Commission Authority To Order Renegotiation.--Nothing in this 
title shall be construed to limit the authority of the Commission to 
permit users or providers of telecommunications services that 
previously entered into contracts or are under a tariff commitment with 
COMSAT to have an opportunity, at their discretion, to renegotiate 
those contracts or commitments on rates, terms, and conditions or other 
provisions, notwithstanding any term or volume commitments or early 
termination charges in any such contracts with COMSAT.
    ``(c) Provisions Contrary to Public Policy Void.--Whenever the 
Commission permits users or providers of telecommunications services to 
renegotiate contracts or commitments as described in this section, the 
Commission may provide that any provision of any contract with COMSAT 
that restricts the ability of such users or providers to modify the 
existing contracts or enter into new contracts with any other space 
segment provider (including but not limited to any term or volume 
commitments or early termination charges) or places such users or 
providers at a disadvantage in comparison to other users or providers 
that entered into contracts with COMSAT or other space segment 
providers shall be null, void, and unenforceable.

``SEC. 643. SIGNATORY ROLE.

    ``(a) Limitations on Signatories.--
            ``(1) National security limitations.--The Federal 
        Communications Commission, after a public interest 
        determination, in consultation with the executive branch, may 
        restrict foreign ownership of a United States signatory if the 
        Commission determines that not to do so would constitute a 
        threat to national security.
            ``(2) No signatories required.--The United States 
        Government shall not require signatories to represent the 
        United States in INTELSAT or Inmarsat or in any successor 
        entities after a pro-competitive privatization is achieved 
        consistent with sections 621, 622, and 624.
    ``(b) Clarification of Privileges and Immunities of COMSAT.--
            ``(1) Generally not immunized.--Notwithstanding any other 
        law or executive agreement, COMSAT shall not be entitled to any 
        privileges or immunities under the laws of the United States or 
        any State on the basis of its status as a signatory of INTELSAT 
        or Inmarsat.
            ``(2) Limited immunity.--COMSAT and any other company 
        functioning as United States signatory to INTELSAT or Inmarsat 
        shall not be liable for action taken by it in carrying out the 
        specific, written instruction of the United States issued in 
        connection with its relationships and activities with foreign 
        governments, international entities, and the intergovernmental 
        satellite organizations.
            ``(3) Provisions prospective.--Paragraph (1) shall not 
        apply with respect to liability for any action taken by COMSAT 
        before the date of enactment of the Communications Satellite 
        Competition and Privatization Act of 1998.
    ``(c) Parity of Treatment.--Notwithstanding any other law or 
executive agreement, the Commission shall have the authority to impose 
similar regulatory fees on the United States signatory which it imposes 
on other entities providing similar services.

``SEC. 644. ELIMINATION OF PROCUREMENT PREFERENCES.

    ``Nothing in this title or the Communications Act of 1934 shall be 
construed to authorize or require any preference, in Federal Government 
procurement of telecommunications services, for the satellite space 
segment provided by INTELSAT, Inmarsat, or any successor entity or 
separated entity.

``SEC. 645. USE OF ITU TECHNICAL COORDINATION.

    ``The Commission and United States satellite companies shall 
utilize the International Telecommunication Union procedures for 
technical coordination with INTELSAT and its successor entities and 
separated entities, rather than INTELSAT procedures.

``SEC. 646. TERMINATION OF COMMUNICATIONS SATELLITE ACT OF 1962 
              PROVISIONS.

    ``Effective on the dates specified, the following provisions of 
this Act shall cease to be effective:
            ``(1) Date of enactment of this title: Sections 101 and 
        102; paragraphs (1), (5) and (6) of section 201(a); section 
        301; section 303; section 502; and paragraphs (2) and (4) of 
        section 504(a).
            ``(2) On the effective date of the Commission's order that 
        establishes direct access to INTELSAT space segment: Paragraphs 
        (1), (3) through (5), and (8) through (10) of section 201(c); 
        and section 304.
            ``(3) On the effective date of the Commission's order that 
        establishes direct access to Inmarsat space segment: 
        Subsections (a) through (d) of section 503.
            ``(4) On the effective date of a Commission order 
        determining under section 601(b)(2) that Inmarsat privatization 
        is consistent with criteria in sections 621 and 624: Section 
        504(b).
            ``(5) On the effective date of a Commission order 
        determining under section 601(b)(2) that INTELSAT privatization 
        is consistent with criteria in sections 621 and 622: Paragraphs 
        (2) and (4) of section 201(a); section 201(c)(2); subsection 
        (a) of section 403; and section 404.

``SEC. 647. REPORTS TO CONGRESS.

    ``(a) Annual Reports.--The President and the Commission shall 
report to the Committees on Commerce and International Relations of the 
House of Representatives and the Committees on Commerce, Science, and 
Transportation and Foreign Relations of the Senate within 90 calendar 
days of the enactment of this title, and not less than annually 
thereafter, on the progress made to achieve the objectives and carry 
out the purposes and provisions of this title. Such reports shall be 
made available immediately to the public.
    ``(b) Contents of Reports.--The reports submitted pursuant to 
subsection (a) shall include the following:
            ``(1) Progress with respect to each objective since the 
        most recent preceding report.
            ``(2) Views of the Parties with respect to privatization.
            ``(3) Views of industry and consumers on privatization.
            ``(4) Impact privatization has had on United States 
        industry, United States jobs, and United States industry's 
        access to the global marketplace.

``SEC. 648. CONSULTATION WITH CONGRESS.

    ``The President's designees and the Commission shall consult with 
the Committees on Commerce and International Relations of the House of 
Representatives and the Committees on Commerce, Science, and 
Transportation and Foreign Relations of the Senate prior to each 
meeting of the INTELSAT or Inmarsat Assembly of Parties, the INTELSAT 
Board of Governors, the Inmarsat Council, or appropriate working group 
meetings.

``SEC. 649. SATELLITE AUCTIONS.

    ``Notwithstanding any other provision of law, the Commission shall 
not have the authority to assign by competitive bidding orbital 
locations or spectrum used for the provision of international or global 
satellite communications services. The President shall oppose in the 
International Telecommunication Union and in other bilateral and 
multilateral fora any assignment by competitive bidding of orbital 
locations or spectrum used for the provision of such services.

           ``Subtitle D--Negotiations To Pursue Privatization

``SEC. 661. METHODS TO PURSUE PRIVATIZATION.

    ``The President shall secure the pro-competitive privatizations 
required by this title in a manner that meets the criteria in subtitle 
B.

                       ``Subtitle E--Definitions

``SEC. 681. DEFINITIONS.

    ``(a) In General.--As used in this title:
            ``(1) INTELSAT.--The term `INTELSAT' means the 
        International Telecommunications Satellite Organization 
        established pursuant to the Agreement Relating to the 
        International Telecommunications Satellite Organization 
        (INTELSAT).
            ``(2) Inmarsat.--The term `Inmarsat' means the 
        International Mobile Satellite Organization established 
        pursuant to the Convention on the International Maritime 
        Organization.
            ``(3) Signatories.--The term `signatories'--
                    ``(A) in the case of INTELSAT, or INTELSAT 
                successors or separated entities, means a Party, or the 
                telecommunications entity designated by a Party, that 
                has signed the Operating Agreement and for which such 
                Agreement has entered into force or to which such 
                Agreement has been provisionally applied; and
                    ``(B) in the case of Inmarsat, or Inmarsat 
                successors or separated entities, means either a Party 
                to, or an entity that has been designated by a Party to 
                sign, the Operating Agreement.
            ``(4) Party.--The term `Party'--
                    ``(A) in the case of INTELSAT, means a nation for 
                which the INTELSAT agreement has entered into force or 
                been provisionally applied; and
                    ``(B) in the case of Inmarsat, means a nation for 
                which the Inmarsat convention has entered into force.
            ``(5) Commission.--The term `Commission' means the Federal 
        Communications Commission.
            ``(6) International telecommunication union.--The term 
        `International Telecommunication Union' means the 
        intergovernmental organization that is a specialized agency of 
        the United Nations in which member countries cooperate for the 
        development of telecommunications, including adoption of 
        international regulations governing terrestrial and space uses 
        of the frequency spectrum as well as use of the geostationary 
        satellite orbit.
            ``(7) Successor entity.--The term `successor entity'--
                    ``(A) means any privatized entity created from the 
                privatization of INTELSAT or Inmarsat or from the 
                assets of INTELSAT or Inmarsat; but
                    ``(B) does not include any entity that is a 
                separated entity.
            ``(8) Separated entity.--The term `separated entity' means 
        a privatized entity to whom a portion of the assets owned by 
        INTELSAT or Inmarsat are transferred prior to full 
        privatization of INTELSAT or Inmarsat, including in particular 
        the entity whose structure was under discussion by INTELSAT as 
        of March 25, 1998, but excluding ICO.
            ``(9) Orbital location.--The term `orbital location' means 
        the location for placement of a satellite on the geostationary 
        orbital arc as defined in the International Telecommunication 
        Union Radio Regulations.
            ``(10) Space segment.--The term `space segment' means the 
        satellites, and the tracking, telemetry, command, control, 
        monitoring and related facilities and equipment used to support 
        the operation of satellites owned or leased by INTELSAT, 
        Inmarsat, or a separated entity or successor entity.
            ``(11) Non-core services.--The term `non-core services' 
        means, with respect to INTELSAT provision, services other than 
        public-switched network voice telephony and occasional-use 
        television, and with respect to Inmarsat provision, services 
        other than global maritime distress and safety services or 
        other existing maritime or aeronautical services for which 
        there are not alternative providers.
            ``(12) Additional services.--The term `additional services' 
        means Internet services, high-speed data, interactive services, 
        non-maritime or non-aeronautical mobile services, Direct to 
        Home (DTH) or Direct Broadcast Satellite (DBS) video services, 
        or Ka-band services.
            ``(13) INTELSAT agreement.--The term `INTELSAT Agreement' 
        means the Agreement Relating to the International 
        Telecommunications Satellite Organization (`INTELSAT'), 
        including all its annexes (TIAS 7532, 23 UST 3813).
            ``(14) Headquarters agreement.--The term `Headquarters 
        Agreement' means the International Telecommunication Satellite 
        Organization Headquarters Agreement (November 24, 1976) (TIAS 
        8542, 28 UST 2248).
            ``(15) Operating agreement.--The term `Operating Agreement' 
        means--
                    ``(A) in the case of INTELSAT, the agreement, 
                including its annex but excluding all titles of 
                articles, opened for signature at Washington on August 
                20, 1971, by Governments or telecommunications entities 
                designated by Governments in accordance with the 
                provisions of the Agreement; and
                    ``(B) in the case of Inmarsat, the Operating 
                Agreement on the International Maritime Satellite 
                Organization, including its annexes.
            ``(16) Inmarsat convention.--The term `Inmarsat Convention' 
        means the Convention on the International Maritime Satellite 
        Organization (Inmarsat) (TIAS 9605, 31 UST 1).
            ``(17) National corporation.--The term `national 
        corporation' means a corporation the ownership of which is held 
        through publicly traded securities, and that is incorporated 
        under, and subject to, the laws of a national, state, or 
        territorial government.
            ``(18) COMSAT.--The term `COMSAT' means the corporation 
        established pursuant to title III of the Communications 
        Satellite Act of 1962 (47 U.S.C. 731 et seq.)
            ``(19) ICO.--The term `ICO' means the company known, as of 
        the date of enactment of this title, as ICO Global 
        Communications, Inc.
            ``(20) Replacement satellite.--The term `replacement 
        satellite' means a satellite that replaces a satellite that 
        fails prior to the end of the duration of contracts for 
        services provided over such satellite and that takes the place 
        of a satellite designated for the provision of public-switched 
        network and occasional-use television services under contracts 
        executed prior to March 25, 1998 (but not including K-TV or 
        similar satellites). A satellite is only considered a 
        replacement satellite to the extent such contracts are equal to 
        or less than the design life of the satellite.
            ``(21) Global maritime distress and safety services or 
        GMDSS.--The term `global maritime distress and safety services' 
        or `GMDSS' means the automated ship-to-shore distress alerting 
        system which uses satellite and advanced terrestrial systems 
        for international distress communications and promoting 
        maritime safety in general. The GMDSS permits the worldwide 
        alerting of vessels, coordinated search and rescue operations, 
        and dissemination of maritime safety information.
    ``(b) Common Terminology.--Except as otherwise provided in 
subsection (a), terms used in this title that are defined in section 3 
of the Communications Act of 1934 have the meanings provided in such 
section.''.

            Passed the House of Representatives May 6, 1998.

            Attest:

                                                ROBIN H. CARLE,

                                                                 Clerk.