[Congressional Record Volume 144, Number 55 (Wednesday, May 6, 1998)]
[House]
[Pages H2823-H2850]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   COMMUNICATIONS SATELLITE COMPETITION AND PRIVATIZATION ACT OF 1998

  Mr. DREIER. Mr. Speaker, by direction of the Committee on Rules, I 
call up House Resolution 419, and ask for its immediate consideration.
  The Clerk read the resolution, as follows:

                              H. Res. 419

       Resolved, That at any time after the adoption of this 
     resolution the Speaker may, pursuant to clause 1(b) of rule 
     XXIII, declare the House resolved into the Committee of the 
     Whole House on the state of the Union for consideration of 
     the bill (H.R. 1872) to amend the Communications Satellite 
     Act of 1962 to promote competition and privatization in 
     satellite communications, and for other purposes. The first 
     reading of the bill shall be dispensed with. General debate 
     shall be confined to the bill and shall not exceed one hour 
     equally divided and controlled by the chairman and ranking 
     minority member of the Committee on Commerce. After general 
     debate the bill shall be considered for amendment under the 
     five-minute rule. It shall be in order to consider as an 
     original bill for the purpose of amendment under the five-
     minute rule the amendment in the nature of a substitute 
     recommended by the Committee on Commerce now printed in the 
     bill. The committee amendment in the nature of a substitute 
     shall be considered as read. No amendment to the committee 
     amendment in the nature of a substitute shall be in order 
     unless printed in the portion of the Congressional Record 
     designated for that purpose in clause 6 of rule XXIII. 
     Printed amendments shall be considered as read. The chairman 
     of the Committee of the Whole may: (1) postpone until a time 
     during further consideration in the Committee of the Whole a 
     request for a recorded vote on any amendment; and (2) reduce 
     to five minutes the minimum time for electronic voting on any 
     postponed question that follows another electronic vote 
     without intervening business, provided that the minimum time 
     for electronic voting on the first in any series of questions 
     shall be 15 minutes. At the conclusion of consideration of 
     the bill for amendment the Committee shall rise and report 
     the bill to the House with such amendments as may have been 
     adopted. Any Member may demand a separate vote in the House 
     on any amendment adopted in the Committee of the Whole to the 
     bill or to the committee amendment in the nature of a 
     substitute. The previous question shall be considered as 
     ordered on the bill and amendments thereto to final passage 
     without intervening motion except one motion to recommit with 
     or without instructions.

  The SPEAKER pro tempore. The gentleman from California (Mr. Dreier) 
is recognized for 1 hour.
  (Mr. DREIER asked for and was given permission to revise and extend 
his remarks and to include extraneous material).
  Mr. DREIER. Mr. Speaker, for purposes of debate only, I yield the 
customary 30 minutes to my very good friend, the gentleman from South 
Boston, MA (Mr. Moakley), pending which, I yield myself such time as I 
may consume.
  Mr. Speaker, this modified open rule provides for consideration of 
H.R. 1817, the Communications Satellite Competition and Privatization 
Act of 1998. The rule provides for 1 hour of general debate equally 
divided between and controlled by the chairman and ranking minority 
member of the Committee on Commerce.
  The rule makes in order as an original bill for the purpose of 
amendment

[[Page H2824]]

the amendment in the nature of a substitute recommended by the 
Committee on Commerce now printed in the bill, which shall be 
considered as read.
  The rule further provides for consideration of only those amendments 
that have been preprinted in the Congressional Record. The rule also 
allows the Chairman of the Committee of the Whole to postpone votes 
during consideration of the bill and reduce voting time to 5 minutes on 
a postponed question if the vote follows a 15-minute vote. And finally, 
the rule provides for one motion to recommit, with or without 
instructions.
  Mr. Speaker, the United States is the leader of the international 
information-based economy. My home State of California is home to many 
industries that create and exploit the core technologies of the 
information economy, including telecommunications and satellite 
producers.
  The goal of this legislation is to bring satellite communications 
into a new era of competition. We get there by encouraging an 
international cartel of largely government-run national 
telecommunications monopolies to undergo a process of competitive 
privatization. The winners will be the consumers of international 
telecommunications services, who will enjoy lower prices, better 
services, and technological innovation.
  Without question, there are very legitimate areas of debate regarding 
the best means of moving to a private, free market in international 
satellite communications. Because of the complex nature of the 
international satellite cartel, this is a modified open rule that does 
not block any germane amendment from being considered by the full House 
as long as the amendment has been preprinted in the Record.
  Mr. Speaker, this rule is deserving of bipartisan support, as is the 
bill. I look forward to the House working its will on the amendments 
submitted that have been printed in the Record, with the hope that the 
final product is something that can be signed into law so that we more 
fully enjoy the fruits of our information-based economy.
  Mr. Speaker, I reserve the balance of my time.
  Mr. MOAKLEY. Mr. Speaker, I yield myself such time as I may consume.
  I thank my colleague, my dear friend the gentleman from California 
(Mr. Dreier), my chairman in waiting, for yielding me the customary 
half-hour. It might be a longer wait than he anticipates.
  Mr. Speaker, I rise in support of this open rule, although I do not 
understand the need for the preprinting requirement. There were only 
two recorded votes in committee. There is nothing in the bill that 
could not be handled in a totally open rule.
  Today's rule will make in order the Communications Satellite 
Competition and Privatization Act, which will end the COMSAT monopoly.
  In 1962, Mr. Speaker, President Kennedy established an international 
satellite system which gave rise to two huge satellite cooperatives, 
INTELSAT and Inmarsat.
  Since these cooperatives are so big and so powerful, they completely 
had the entire market on satellite programs. Right now, any 
communications committee that wants to use the INTELSAT or the Inmarsat 
to transit into or out of the United States has to buy access through 
the COMSAT Corporation.
  This bill will open competition in the international communications 
satellite system by encouraging INTELSAT and Inmarsat to privatize. It 
would help level the playing field and allow competing satellite 
companies to get into the business. Since the United States is such a 
leader in satellite technology, this privatization should be very good 
news for us.
  COMSAT can continue to provide any service it wishes. It will just 
have to be subject to competition from other private-sector companies. 
So people who depend upon international communications, especially for 
international calls, the Internet, cellular phones, and video, can 
expect to see lower prices and much more choice in services.
  So I urge my colleagues to support this rule.

                              {time}  1045

  Mr. Speaker, I yield 5 minutes to the gentleman from Massachusetts 
(Mr. Markey), the ranking minority member on the Subcommittee on 
Telecommunications, Trade, and Consumer Protection, the person who has 
all the questions and all the answers.
  Mr. MARKEY. Mr. Speaker, I thank the gentleman from Massachusetts 
(Mr. Moakley) for yielding me this time, and I thank everyone who has 
participated in this enormously important debate.
  As has been pointed out by the gentleman from Massachusetts, back in 
1962, largely in response to the challenge from the Soviet Union with 
the launch of Sputnik and the paranoia which overtook the West, the 
United States not only began a process of putting a man on the Moon and 
developing intercontinental ballistic missiles at a pace that had not 
yet been matched in our country, but it also helped to organize 
something which would create an international satellite consortium 
using government-based entities to launch these satellites, because 
there was no private sector capacity within the West in order to 
accomplish these goals.
  This consortium, INTELSAT, later matched by another group called 
Inmarsat for satellite-based maritime communications, became the basis 
for, the foundation for, international satellite competition. It served 
us very well, as did most monopolies, in electricity, in local 
telephone, in long distance telephone, in cable in the initial stages 
of these industries. But over time it became clear that private sector 
competition in each one of these industries was possible. In each case, 
of course, the incumbent monopolist argued that it would be a takings, 
it would be illegal to take away this monopoly which had been granted 
by the government. But the reality was that the government had made a 
decision initially in order to grant to one entity the ability to be 
the first into the field, in order to establish it, but always retain 
the right to be able to break up the monopoly when private sector 
competition arrived.
  Today we are going to debate the last frontier of monopolies, this 
one in outer space, this one where INTELSAT and Inmarsat, with its 
American signatory, COMSAT, seeks to retain its monopoly access to this 
satellite communication internationally. What our legislation does is 
break it up. It says to COMSAT, it says to INTELSAT, it says to 
Inmarsat, ``You must privatize. You must move to the private sector. 
You must give access to every other private sector company to that 
which you have.'' That is the objective of this legislation.
  The gentleman from Virginia (Mr. Bliley), the chairman of the full 
committee, has been the leader on this issue, driving it as an 
important final stage of our efforts to have privatized this 
international telecommunications industry.
  Now, these two entities, INTELSAT and Inmarsat, two international 
orbiting cartels, are not going to simply wake up one day and say, 
``Fine, take back our monopoly,'' because we have been waiting for the 
last 20 years for them to do that. It is not going to happen. They are 
not going to shed themselves of their privileged access to 
international frequency spectrum. They are not going to voluntarily 
give up their immunity from antitrust law. They are not going to 
compete against American-based satellite companies on an even ground, 
simply because we ask them to do so politely.
  This legislation and the rule which accompanies it is a fair set of 
recommendations for the debate, and then for the substantive decision-
making here on the floor. I hope that the Members today understand how 
historic this debate is. It really will help to revolutionize the way 
we communicate on this planet.
  Mr. MOAKLEY. Mr. Speaker, I have no further requests for time, and I 
yield back the balance of my time.
  Mr. DREIER. Mr. Speaker, I rise in strong support of this very fair 
and balanced modified open rule and urge my colleagues to join in 
supporting it and to support the legislation that will follow.
  Mr. Speaker, I yield back the balance of my time, and I move the 
previous question on the resolution.
  The previous question was ordered.
  The resolution was agreed to.
  A motion to reconsider was laid on the table.
  The SPEAKER pro tempore (Mr. Shimkus). Pursuant to House Resolution 
419 and rule XXIII, the Chair declares the House in the Committee of

[[Page H2825]]

the Whole House on the State of the Union for the consideration of the 
bill, H.R. 1872.
  The Chair designates the gentleman from Kansas (Mr. Snowbarger) as 
Chairman of the Committee of the Whole, and requests the gentleman from 
Illinois (Mr. LaHood) to assume the chair temporarily.

                              {time}  1050


                     In the Committee of the Whole

  Accordingly, the House resolved itself into the Committee of the 
Whole House on the State of the Union for the consideration of the bill 
(H.R. 1872) to amend the Communications Satellite Act of 1962 to 
promote competition and privatization of satellite communications, and 
for other purposes, with Mr. LaHood (Chairman pro tempore) in the 
chair.
  The Clerk read the title of the bill.
  The CHAIRMAN pro tempore. Pursuant to the rule, the bill is 
considered as having been read the first time.
  Under the rule, the gentleman from Virginia (Mr. Bliley) and the 
gentleman from Massachusetts (Mr. Markey) each will control 30 minutes.
  The Chair recognizes the gentleman from Virginia (Mr. Bliley).
  Mr. BLILEY. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, I rise in support of H.R. 1872, the Communications 
Satellite Competition and Privatization Act of 1998. Today I ask that 
all Members support this bill and oppose all amendments.
  Let us ask a question, if we had it all to do over again, would we 
want to use the model of the United Nations for supplying international 
communications? Would we trust an important part of the information age 
to intergovernmental organizations? Or instead would we rely on the 
free market? If the last three decades have taught us anything, Mr. 
Chairman, it is the failure of central planning and the inefficiency of 
government-run industry. If we have learned anything, it is that we 
should trust the marketplace.
  The international satellite communications market is dominated by 
INTELSAT for fixed services like voice and video, and Inmarsat for 
mobile services like maritime and aeronautical. These intergovernmental 
organizations want to use their market power to expand into advanced 
services that the private sector is chomping at the bit to provide, 
like Internet access, direct broadcast services and hand-held phones. 
These intergovernmental organizations, or IGOs, are run by a 
combination of the world's governments and owned by a consortium of 
national telecommunications monopolies. By government monopolies, for 
government monopolies, of government monopolies. Their supporters call 
them a cooperative. Where I come from, that is called a cartel. Either 
way, it is high time for them to be privatized.
  On that there is little disagreement. But more than just privatized, 
they must be privatized in a pro-competitive manner, in a manner that 
fosters competition. A privatized monopoly is still a monopoly 
nonetheless, and in a manner that relies on the marketplace, not on 
governments. In the current structure, the owners of the IGOs are the 
foreign telecom monopolists that often control licensing decisions and 
almost always control market access. Thus they have the ability and the 
incentive to keep U.S. satellite competitors from coming into their 
countries and competing against INTELSAT and Inmarsat. If we remove 
these distorting incentives, our communications satellite and aerospace 
industries, the most competitive in the world, will have a fair shot at 
breaking into foreign markets. But if we are to bring technology of 
modern telecommunications to all parts of the globe, if we are to make 
international telecommunications truly affordable, then we have to 
muster the courage to privatize the cartels and force them to compete 
on a level playing field, putting our faith in the private sector and 
the free market.
  The gentleman from Massachusetts (Mr. Markey) and I have introduced 
this legislation to do just that. It encourages privatization of the 
IGOs in a way that fosters competition rather than snuffing it out. It 
provides for privatization of INTELSAT by 2002 and Inmarsat by 2001, 
more than enough time for these organizations to privatize. More 
importantly, it requires privatization in a way that fosters 
competition. If they do not privatize in a pro-competitive manner, the 
bill limits these organizations' access to American markets for non-
core services. Moreover, if they do not make progress towards 
privatization, they cannot provide under new contracts highly advanced 
services better left to the private sector.
  The only effective way to get the IGOs to move is to use access to 
the U.S. market as leverage. The IGOs are immune and privileged treaty-
based organizations. You cannot sue them, you cannot tax them nor can 
you regulate them. We have to use the only lever that we have, market 
access. The bill's mechanisms are akin to telling the Japanese that 
they cannot bring in all the cars they want unless they allow imports 
of American products. COMSAT, the U.S. signatory, and IGO reseller, is 
like the Isuzu dealer in Bethesda. The Isuzu dealer is a U.S. company 
but they are selling a foreign product. Here COMSAT is selling a 
foreign, intergovernmental product. By the way, our bill expressly 
permits COMSAT to sell any service it chooses if it does so over a 
system independent from the IGOs. Only where they choose to use the IGO 
facilities and if the IGOs do not progress toward a pro-competitive 
privatization would market access be threatened. The threatened 
restriction is on IGO services, so it could apply to any distributor of 
IGO services whether that is COMSAT or a new competitor after COMSAT's 
monopoly is eliminated.
  Our legislation will eliminate COMSAT's monopoly by permitting 
competition for access to the IGOs. Such competition is called direct 
access. According to the FCC, COMSAT's average margin in reselling 
INTELSAT service is an amazing 68 percent. Not bad if you can get it, 
but very bad if you happen to be a consumer. Every cent of COMSAT's 
high prices comes from the pockets of American consumers. But COMSAT 
has used its position as the monopoly provider of IGO services to force 
users to sign long-term take-or-pay contracts so they will not be able 
to take advantage of the competition direct access will permit. Thus 
the bill provides what is called ``fresh look,'' which allows consumers 
to have a one-time chance to renegotiate monopoly take-or-pay 
contracts.
  During the committee process, we defeated an amendment that would 
have eliminated using access to the U.S. market as a lever. We defeated 
an amendment to eliminate the potential restrictions on expansion if 
progress is not made toward privatization. We defeated an amendment to 
strike out fresh look. We accepted amendments which went a long way 
toward meeting concerns some Members and COMSAT had raised, and made 
other changes to accommodate their concerns. And the bill passed by 
voice vote.
  The bill has been endorsed by every private satellite services 
company from GE to Motorola, TRW to Boeing, Teledesic to PanAmSat. It 
has also been endorsed by major users of the systems, AT&T, MCI and 
Sprint, maritime users and a variety of ethnic groups because of 
consumer cost savings that will come with the bill. Over 40 
endorsements and counting. The U.S. signatory to the IGOs, COMSAT, of 
course, opposes it and they will oppose any effort at reform. It ends 
their monopoly and would force the IGOs to give up their special 
advantages when they privatize. A level playing field is not welcome 
when you have been the government-backed monopolist. They will use 
every tactic they can to trip up reform. We will have amendments that 
may sound reasonable, but in effect remove any incentives for the IGOs 
to privatize. I urge Members to ignore the rhetoric and oppose all 
amendments.
  H.R. 1872 is, in the words of one industry coalition, a moderate and 
balanced approach. Consumers and taxpayers will benefit from the lower 
prices it will bring, and businesses and their employees will benefit 
from the new markets it will open.
  Mr. Chairman, I reserve the balance of my time.
  Mr. MARKEY. Mr. Chairman, I yield my time to the gentleman from 
Michigan (Mr. Dingell), and I ask unanimous consent that he be 
permitted to control that time.
  The CHAIRMAN pro tempore. Is there objection to the request of the 
gentleman from Massachusetts?

[[Page H2826]]

  There was no objection.
  Mr. DINGELL. Mr. Chairman, I yield myself 6\1/2\ minutes.

                              {time}  1100

  Mr. Chairman, I want to express affection and respect for my good 
friend, the chairman of the committee, the gentleman from Virginia (Mr. 
Bliley) and I also want to express the same good feelings towards my 
friend from Massachusetts (Mr. Markey). They are fine Members, and the 
fact we have a difference here does in no way diminish my respect or 
affection for either of these fine gentleman.
  The simple fact of the matter, however, is this is a bad piece of 
legislation. It is unfair, it subjects the taxpayers of the United 
States to large liability under the Tucker Act, and I am talking about 
billions of dollars. This Congress has learned before that this is a 
risk, but it appears that we have to relearn the unfortunate lessons 
that we learned when we wrote the legislation on Conrail and when we 
did away with the unfortunate New York Central Railroad, and the 
bankruptcy and the reorganization by statute. We subjected the 
taxpayers to about $6\1/2\ billion in liabilities because we interfered 
with the contracts, we interfered with the business, and we interfered 
with the goodwill and the going value of the corporation, and it cost 
the taxpayers dearly. This is not a mistake which we should repeat 
today.
  Mr. Chairman, H.R. 1872 has laudable goals. Unfortunately this 
legislation is going to fail. It is anticompetitive, it is anticonsumer 
and, worse, it is unconstitutional. The bill would impose draconian 
measures which would limit not only INTELSAT or Inmarsat, but it would 
also limit their U.S. customers. The bill unilaterally dictates 
complete privatization by legislative edict. If it were that simple, 
these treaty organizations could have long since been privatized.
  I would point out these are treaty organizations. The United States 
cannot unilaterally impose its will on better than 141 sovereign 
nations who are party to these treaties. The bill disregards the cold 
hard fact that the United States has but one vote in the governance of 
INTELSAT and Inmarsat. Congress cannot change that unfortunate 
international reality.
  It should be clear to anyone that this approach has no chance of 
success. If any foreign country wants to scuttle privatization efforts, 
this train will be immediately derailed and vital American interests 
will suffer.
  The interesting thing is that foreign countries cannot only hurt 
Inmarsat and INTELSAT in this process, but, very frankly, they can hurt 
American corporations and American competitiveness and American 
business going well beyond these two entities.
  I for one cannot support a bill that holds American interests hostage 
to the whims of 141 countries and that makes American carriers, 
innocent of wrongdoing, who have been held to be nondominant carriers 
just recently by the FCC, be at the mercy of foreign competitors.
  When service restrictions contained in this bill kick in, hundreds of 
millions of dollars in American investments in satellite equipment will 
be made obsolete overnight.
  If this were not bad enough, COMSAT, which is a private corporation 
publicly traded on the U.S. stock markets, will be ruined financially. 
Congress made a policy decision to fund these international satellite 
systems by putting private capital at risk instead of taxpayers' money, 
and when those private taxpayers' moneys and those stockholders' moneys 
are lost, the Federal Government will have a liability under the Tucker 
Act.
  It should be noted that the United States Government encouraged and 
in many instances required COMSAT to invest in these systems in 
exchange for the responsibility and the opportunity to earn a 
reasonable return. That would be taken away from COMSAT.
  And the practical result of this is again liability on the part of 
American taxpayers because of an unconstitutional action and an 
unconstitutional taking by this Congress of property belonging to 
private American citizens, which subjects this government immediately 
to redress under the Tucker Act.
  For the government to breach this bargain, obliterating the value of 
this investment, then serious constitutional concerns are raised under 
the takings clause of the fifth amendment. The report can tell my 
colleagues until the committee is blue in the face that this is not 
going to be the fact, but be assured that it will be, and my colleagues 
are playing fast and loose with the taxpayers' money if they vote for 
this legislation. This provision alone will subject American taxpayers 
to claims for damages running to billions of dollars.
  It should also be noted that this claim will fail. There is no reason 
to believe this, given the clear Supreme Court's precedents on these 
matters. And I would note that American users, as well as Inmarsat and 
INTELSAT, will suffer and will face the severe adverse impact that will 
flow from an unwise, unconstitutional, and unnecessary governmental 
action.
  In any event, this Congress should not be willing to throw away 
billions of taxpayers' dollars on a litigation strategy that at best is 
no more than a crap shoot.
  In sum, H.R. 1872 is a bad bill. It is in desperate need of radical 
surgery. It contains more constitutional law problems than a first year 
law school exam.
  I urge my colleagues to join in defeating what is here, an ill-
conceived budget-breaking bill that is going to waste taxpayers' moneys 
without any benefit to the taxpayers or to the country; and it will 
subject, I reiterate, our constituents to claims for billions of 
dollars in damages, with no hope or expectation of gain for the 
country, for competitiveness, or anything else.
  Mr. Chairman, I urge the rejection of the bill, and I urge the 
adoption of the amendment which will shortly be offered by my good 
friend from Louisiana (Mr. Tauzin).
  Mr. Chairman, I reserve the balance of my time.
  Mr. BLILEY. Mr. Chairman, I yield 4 minutes to the gentleman from 
Louisiana (Mr. Tauzin).
  Mr. TAUZIN. Mr. Chairman, let me first tell my colleagues that there 
is good news and bad news today. The good news is that this bill in 
this form will never see the light of day; it will not get through this 
Congress. It will not see the light of day in the Senate and should not 
in its current form. The bad news is the same; that this bill could 
fail, it could not become law because of its current form.
  What I am rising today to ask this House to consider are amendments 
to this bill to put it in the shape so that it can become good law, the 
Senate and the other body can in fact take it up, and we might 
accomplish the goals of this legislation.
  Let me first commend the gentleman from Virginia (Mr. Bliley) and the 
gentleman from Massachusetts (Mr. Markey) for the goals of this 
legislation. It is indeed on target. It is designed to privatize these 
treaty organizations and encourage that process as rapidly as possible.
  Unfortunately, the bill is weighed down with several provisions 
which, as the gentleman from Michigan (Mr. Dingell) pointed out, are 
clearly takings under the fifth amendment of the United States 
Constitution and which clearly will subject the Federal Government to 
the possibility of huge settlements and huge lawsuits against this 
government for taking private property without compensation.
  Later on in this debate, the gentlewoman from Maryland (Mrs. Morella) 
and I will be offering amendments to deal with those sections of the 
bill. If those amendments are adopted, this bill will be put into 
shape, and then it should become law, and maybe it will have a chance 
on the other side. If those amendments fail, then I predict this bill 
will never see the light of day and will never become law in this 
Congress, and that is a shame. I should hope we have the good sense to 
pass those two amendments.
  In the course of this debate, I will point out to my colleagues that 
in this bill is a provision that abrogates private contracts. In this 
bill Congress will be changing private contracts and allowing people to 
get out of contracts they signed. In the course of this debate, I will 
show my colleagues that one of the competitors to COMSAT took this 
issue to court and lost; lost in Federal district court and in their 
request to have these contracts abrogated. And now in this bill we are 
being asked as a Congress to change that

[[Page H2827]]

Federal court decision and to permit the abrogation of those long-term 
contracts.
  Just on April 24, our FCC ruled that those COMSAT contracts were not 
monopolistic contracts, were entitled to the respect of law, and yet 
this bill will permit those contracts to be abrogated. By congressional 
action it will say that customers who signed the contract can get out 
of it when they want to, when the time comes in just a couple of years 
for them to do so.
  In short, we will be presenting to our colleagues in this debate 
today several ways in which this bill can be improved so that it can go 
forward and hopefully become law. Without those changes, this bill will 
amount to congressional authorization of taking of private property 
from an American private corporation, will damage the facility of that 
corporation to provide service to American customers, and will in fact 
deny those American customers the right to use that American 
corporation in the facilitation of services for their customer base.
  In short, this bill as it is currently written is going down, if not 
here, somewhere in this process.
  Today we will have an opportunity to fix it in two very important 
aspects: to remove those private takings of private property without 
compensation, to protect the American taxpayer from these lawsuits and 
to protect the customers of a private American company from abrogation 
of their contract rights.
  Mr. DINGELL. Mr. Chairman, I yield 3 minutes to the distinguished 
gentlewoman from California (Ms. Eshoo).
  Ms. ESHOO. Mr. Chairman, I am pleased to rise in support of H.R. 
1872, legislation which will bring about the privatization of INTELSAT 
and Inmarsat.
  When Neil Armstrong took the first steps on the surface of the Moon 
in 1969, the world was able to watch each step because of a successful 
Cold War collaboration known as INTELSAT. It was a network of three 
satellites at the time, just enough to provide global coverage of the 
Moon landing. It is now a network of 24 satellites offering voice, 
data, and video services around the world. Combined with Inmarsat's 
eight satellites, these ventures should be viewed as two of the most 
important successful international cooperation efforts ever undertaken.
  The United States demonstrated great leadership when it helped create 
INTELSAT. I think we must demonstrate our leadership once again in 
making the changes necessary to fit our times by privatizing INTELSAT 
and Inmarsat. There is agreement on the goal of privatization, but how 
we get there is the key question. During subcommittee and full 
committee consideration of the bill, sponsors sought to address many of 
the concerns raised.
  I commend the gentleman from Virginia (Mr. Bliley) and the gentleman 
from Massachusetts (Mr. Markey) on their efforts to bring us closer to 
a consensus. I realize some still have reservations about the bill, but 
it is important to recognize that compromises and concessions have been 
made.
  Concerns were raised about service restrictions on COMSAT. Those 
provisions were moderated. Concerns were raised about so-called fresh-
look provisions. Those provisions were moderated. At some point, we 
need to ask whether those seeking further compromise are asking for 
changes to improve the bill or to kill it.
  In closing, I want to bring to the attention of my colleagues my 
concerns with INTELSAT's current plan to spin off a private entity. 
Ever since the Subcommittee on Telecommunications, Trade, and Consumer 
Protection of the Committee on Commerce held a hearing on competition 
in the satellite industry over a year and a half ago, I have 
consistently raised concerns that any privatized spinoffs from INTELSAT 
or Inmarsat must be pro-competitive. The process of privatization we 
are supporting today is undermined if the privatized entity is created 
with unfair competitive advantages.
  I look forward to moving this bill today, and I ask my colleagues to 
keep in mind whether those that are opposed are doing it to kill the 
bill or really to improve it.
  With that, Mr. Chairman, I urge my colleagues to support H.R. 1872.

                              {time}  1115

  Mr. BLILEY. Mr. Chairman, I yield 1 minute to the gentleman from Ohio 
(Mr. Gillmor).
  Mr. GILLMOR. Mr. Chairman, I thank the Chairman for yielding, and I 
rise in support of H.R. 1872. This bipartisan bill, of which I am a 
cosponsor, is intended to bring competition to the intergovernmental 
satellite organizations, INTELSAT and Inmarsat. It will also remove 
COMSAT's monopoly over access to these organizations.
  Fundamentally, this bill is a major policy decision that commercial 
satellite services should be provided by the private sector worldwide 
and not by the government. The government consortia may have been 
needed to run an international satellite system in the 1960s, but after 
almost 40 years, things change. We need to update our laws and our 
regulations to reflect the current marketplace.
  In addition, increasing the competitive nature of the international 
satellite marketplace is very important to ensure that private American 
satellite companies can compete on a level playing field. And today, 
the playing field is tilted toward INTELSAT and Inmarsat. These 
organizations are owned by monopoly providers of telecommunications 
services worldwide. Working in cartel fashion, they have tried to keep 
competition from developing.
  There are two other important provisions in this bill providing for 
``direct access'' and ``fresh look,'' and I presume my time has 
expired.
  Mr. DINGELL. Mr. Chairman, I yield 4 minutes to the distinguished 
gentleman from Maryland (Mr. Wynn).
  Mr. WYNN. Mr. Chairman, I thank the gentleman from Michigan (Mr. 
Dingell) for yielding me this time, and for his leadership on this 
issue.
  Mr. Chairman, I rise today in strong opposition to H.R. 1872, and 
also in strong support of the Tauzin and the Morella amendments which 
are to come. This legislation, should it pass without these amendments, 
will set back 3 decades of American leadership in international 
satellite communications and reverse the trend toward increasing 
competition in the satellite industry.
  The legislation before us today establishes unrealistic timetables 
and conditions for the privatization of INTELSAT and Inmarsat, 
prohibits any organization from being used to provide critical noncore 
satellite services to customers in the United States if the bill's 
rigid privatization deadlines are not met, and that is just not right.
  Now, this legislation has laudable goals, and I appreciate its 
intent. Unfortunately, its approach is somewhat bludgeon-like, and the 
sponsors have taken a somewhat misguided and punitive approach, an 
approach that is so unfair that it has been denounced in publications 
as ideologically diverse as the Washington Times and the Boston Globe.
  They would have us believe that COMSAT is a monopoly. They would have 
us believe that COMSAT is in fact the Microsoft of the satellite 
industry.
  COMSAT is a United States company that is going to be punished by 
this bill. It is a publicly traded, U.S. company. It is not true that 
it is a monopoly. In fact, there are currently more than 20 competitors 
for COMSAT with more than $14 billion in investments and $40 billion in 
stock. If this is not competition, I do not know what is.
  If we look a little further, in 1988 COMSAT controlled 70 percent of 
the market. That is not true today; they only control 21 percent. In 
fact, on April 28 of this year, the FCC declared that COMSAT is 
nondominant in most of its market. This effectively eliminates 
arguments that we will hear that we are trying to get rid of some 
terrible monopoly. The monopoly does not exist.
  What we have is a United States company that is going to be severely 
punished as a result of this legislation.
  COMSAT has represented the United States' interests in international 
satellite communications for 30 years. The company has played a leading 
role in moving toward privatization. The plans that are adopted 
currently by INTELSAT reflect the involvement of COMSAT.
  Since its inception, COMSAT has never wavered from its mandate to 
provide satellite communications to some of the most remote parts of 
the world. It has done outstanding work. But now,

[[Page H2828]]

they are faced with an unprecedented legislative attack that will put 
this U.S. company out of business, this company that hires over 1,000 
American citizens.
  What does this bill do? It imposes some very un-American things on an 
American company. It imposes service restrictions on the new satellite 
communications service that COMSAT could offer to its customers. This 
would include high-speed data services, Internet access services, and 
land mobile communication; basically, taking the heart out of COMSAT's 
business. But even worse, it would abrogate contracts; that is, 
existing contracts could be set aside under the terms of this 
legislation to the detriment of COMSAT, all supposedly to promote 
privatization. In fact, this approach would undercut active efforts 
that are going on today to move toward privatization by imposing these 
unrealistic timetables.
  Mr. Chairman, I think we do need to take a stand for privatization, 
but we need to be careful where we stand. We should not punish U.S. 
companies, we should not punish U.S. employees for actions by 
international organizations that they cannot control. We need to take a 
look at amendments that could help this bill, amendments we will hear 
about from the gentleman from Louisiana (Mr. Tauzin) and from my 
colleague, the gentlewoman from Montgomery County, Maryland (Mrs. 
Morella). I think if we add these amendments, we can improve this bill. 
But as it stands, this bill is an unconstitutional taking from a U.S. 
company. It is punitive, it is unfair, and I hope this House will 
reject it.
  Mr. BLILEY. Mr. Chairman, I yield 2 minutes to the gentleman from 
Florida (Mr. Stearns), a member of the committee.
  Mr. STEARNS. Mr. Chairman, I rise in support of H.R. 1872.
  I do not think there is anybody in this House that disagrees that we 
have to deregulate, and I am glad that the former speaker indicated he 
also agrees that we need to deregulate. So the goal of this legislation 
is to privatize INTELSAT and Inmarsat satellite systems, of which 
COMSAT is the U.S. representative; and even COMSAT itself agrees that 
we need to deregulate.
  I am glad to point out that I have worked hard to ensure that the 
results will be INTELSAT and Inmarsat and their spin-offs will be 
healthy, private companies able to compete in the competitive satellite 
marketplace. Working with the chairman of the committee, the gentleman 
from Virginia (Mr. Bliley), we were able to improve the bill in the 
committee process to make it more equitable and measure up to the 
approach of privatizing systems.
  The original text of the bill inserted a retroactive date of May 12, 
1997 in certain sections of the bill and, in effect, would have hurt 
COMSAT from making use of the significant investments in replacement 
satellites and in satellites for new orbital slots which they made 
since May 12, 1997. We were able to compromise and used the date of our 
Committee on Commerce markup of March 25, 1998 as the date of cutoff 
for replacement satellites in orbital slots. This change will allow 
COMSAT, as a U.S. representative to the INTELSAT and Inmarsat system, 
the use of hundreds of millions of dollars in investment. I bring that 
to the attention of my colleagues who are not in favor of this bill, 
because that amendment moved forward to give more equitableness to the 
COMSAT deregulation portion here.
  Mr. Chairman, I am also sympathetic to the comments of the gentleman 
from Louisiana (Mr. Tauzin), and I welcome the debate on this about the 
``fresh look'' provisions in the bill and the debate in which we will 
be talking about what will be raised in the amendments. I think we need 
to look at all of the problems and make this the best bill possible to 
ensure that the potential financial liability to the U.S. taxpayer is 
resolved.
  Mr. DINGELL. Mr. Chairman, I yield 2 minutes to the distinguished 
gentleman from Florida (Mr. Deutsch).
  Mr. DEUTSCH. Mr. Chairman, I rise in support of this legislation. I 
am going to focus on two issues that several of my colleagues have 
raised. The first is whether or not there is an existing monopoly in 
satellite telecommunications internationally. The facts are, contrary 
to what the gentleman from Maryland (Mr. Wynn) has mentioned, I guess 
it is in the eyes of the beholder how we look at it, but let me talk 
specifically about facts.
  If one is in the United States of America and he wants to make a 
phone call or receive video from a location overseas that is serviced 
through a satellite system, the only way to do it, the only way, is 
through COMSAT. That is a statutory monopoly that this Congress had 
granted and has granted and is the existing law. That is a fact; there 
is a statutory monopoly in terms of communications through the INTELSAT 
system.
  There are alternative ways, but in some locations there are not. In 
fact, if one wants to call Africa or Asia, or if one wants to send 
video from Iran back to America, there is just no other alternative. So 
that is the first issue. There is a statutory monopoly.
  Let me also respond, we are going to have several amendments on this, 
but I think it is going to be the heart of a lot of the debate that is 
going to take place this morning, the issue of whether we are 
abrogating contracts and what that means. Since there is an existing 
monopoly, that monopoly had the power to have contracts, essentially 
forced contracts, monopoly contractual terms on a variety of consumers 
throughout the United States of America. And just as has been done 
previously in telecommunications issues, specifically regarding when 
AT&T broke up in terms of long-distance service, in a monopoly 
situation which did exist and does exist today, when we are breaking up 
the monopoly, which is appropriate in terms of service and price for 
our economy and every citizen of the United States, we have to view how 
those contracts were established, and those contracts were established 
in a monopoly situation. So it is clearly appropriate for us to make 
that change which is not precedent-making, which we have done 
previously on several occasions in telecommunications in addressing 
monopoly situations.
  Mr. BLILEY. Mr. Chairman, I yield 1 minute to the gentleman from 
Kentucky (Mr. Whitfield).
  Mr. WHITFIELD. Mr. Chairman, I rise today to commend the gentleman 
from Virginia (Mr. Bliley), the chairman of the committee, and the 
gentleman from Massachusetts (Mr. Markey) for the fine work that they 
have done on this bill, and to urge my colleagues to support H.R. 1872.
  This base bill aims to eliminate the last statutory monopoly in the 
U.S. telecommunications market by subjecting COMSAT to competition and 
taking steps to privatize INTELSAT and Inmarsat. Monopolies and 
organizations like international consortia may have made sense back in 
the 1960s when Congress first passed the Satellite Act, but they do not 
make sense today.
  Having said that, I do think we need to examine thoroughly the Tauzin 
and Morella amendment. But the world has changed dramatically in the 
years since Congress enacted the Satellite Act. Technology and the 
economy have evolved to the point that it is possible for private 
companies to do what once we thought only governments could do.
  So I rise in support of this bill.
  Mr. DINGELL. Mr. Chairman, I yield 2 minutes to the distinguished 
gentleman from Texas (Mr. Green).
  (Mr. GREEN asked and was given permission to revise and extend his 
remarks.)
  Mr. GREEN. Mr. Chairman, I would like to thank my good friend from 
Michigan, our ranking member (Mr. Dingell) for allowing me to speak for 
2 minutes.
  I rise in support of H.R. 1872, the Communications Satellite 
Competition and Privatization Act. In committee several modifications 
were indicated to accommodate the concerns that I had, as well as other 
Members, and we believe that we have addressed the legitimate issues, 
and I urge my colleagues to support the bill.
  I want to thank the gentleman from Virginia, (Mr. Bliley) and the 
gentleman from Massachusetts (Mr. Markey) for addressing the issues of 
the maritime concerns. Mr. Chairman, I would like to ask unanimous 
consent to place into the Record a letter to the Chairman of the 
committee, the gentleman from Virginia (Mr. Bliley) from the Chamber of 
Shipping of America in support of the bill, in support of

[[Page H2829]]

the changes that were made, both in the committee and in the chairman's 
mark.
  H.R. 1872 will start the privatization of both INTELSAT and Inmarsat. 
These global satellite network systems help provide services such as 
telephoning long distance and maritime safety services. The maritime 
industry plays an important role in my district, particularly because 
of the Port of Houston.
  During committee consideration, concerns were expressed about the 
impact of this privatization effort on maritime safety services. I am 
particularly concerned with the Global Maritime Distress and Safety 
Service which is provided by COMSAT using the Inmarsat satellite 
system. Currently, the GMDSS that is connected to a ship's 
communication systems allows a vessel to reach maritime rescue services 
at the push of a button. The modifications made in committee and 
supported by the letter that I will put into the Record will take 
positive steps to maintain and assist and improve the GMDSS.
  These modifications ensure that maritime safety devices and services 
will always be available to our shipping industry. For example, a 
provision was added which clarifies that the United States will not 
oppose the registration of orbital locations for Inmarsat replacement 
satellites.
  H.R. 1872 also requires the FCC to consider equipment cost and design 
change and design life of maritime communications equipment when making 
a licensing decision. This provision, added, makes sure that the 
maritime industry's investments in communications equipment are not 
rendered useless or become too costly because of competition. This bill 
will help increase marketplace choice, and again, I urge passage of 
this bill. Mr. Chairman, at this time I include for the Record the 
letter previously referred to.

                               Chamber of Shipping of America,

                                   Washington, DC, April 29, 1998.
     Hon. Thomas J. Bliley,
     Chairman, House Commerce Committee, U.S. House of 
         Representatives, Washington, DC.
       Dear Chairman Bliley: The purpose of this letter is to 
     express our appreciation for your willingness to respond to 
     our concerns outlined in our letter of February 26, 1998, 
     with regard to the Communications Satellite Competition and 
     Privatization Act, H.R. 1872.
       As we indicated previously, our members are the end users 
     of these systems and, as such, generally support the concept 
     of privatization since, if properly done, will ultimately 
     result in better service at a lower cost to the end user.
       As you recall, our concerns related to continuity of 
     service of the GMDSS and commercial maritime functions, as 
     well as the need to mitigate substantial investments in new 
     equipment by users who have recently made expenditures for 
     equipment which interfaces with existing systems.
       On review of the substitute bill and amendments as reported 
     out of your Committee, we are pleased to find provisions that 
     address our concerns, specifically as follows:
       Section 601(b)(3), Clarification: Competitive Safeguards 
     relating to the existence of non-core services at competitive 
     rates, terms, or conditions.
       Section 624 (2) and (7) relating to preservation, 
     maintenance and improvement of the GMDSS.
       Section 681(a) (11) and (21), Definitions relating to non-
     core services and GMDSS.
       We understand these considerations to be several of many 
     which the FCC will consider in future action. We urge you to 
     include in the record language that reemphasizes these issues 
     which are so critical to the continued safety of mariners 
     worldwide and the continued reliability of the U.S. maritime 
     industry.
       Mr. Chairman, we know this has been a challenging issue for 
     all involved and we truly appreciate your leadership in 
     assuring the concerns of the maritime industry are adequately 
     addressed. We look forward to continued work with you and 
     your Committee in the future.
           Sincerely,
                                                 Kathy J. Metcalf,
                                       Director, Maritime Affairs.

  Mr. OXLEY. Mr. Chairman, I yield 1 minute to the gentleman from New 
Jersey (Mr. Frelinghuysen).
  Mr. FRELINGHUYSEN. Mr. Chairman, I want to commend the gentleman from 
Virginia (Mr. Bliley) and the gentleman from Massachusetts (Mr. Markey) 
for authoring this legislation.
  Two years ago we passed historic legislation that has put us well 
down the road towards bringing telecommunications competition to all 
markets within the United States. With H.R. 1872, we take another major 
step towards reaching the same objective in the provision of 
international satellite services.
  As we take this step, I want to draw attention to one of the bill's 
most important features, a provision called ``fresh look.'' ``Fresh 
look'' is a tool that is intended to accelerate the transition from 
monopoly to competition by giving purchasers of service a window of 
opportunity to renegotiate long-term contracts entered into under the 
assumption that the seller was and would continue to be the sole 
provider of service. It is a tool that has been used by the Federal 
Communications Commission in several proceedings. It has also been used 
by State public utility commissions in California, Colorado, Michigan 
and Ohio.

                              {time}  1130

  While the ``fresh look'' tool should not be abused, it is useful when 
employed, as it would be under this bill, to ensure that consumers are 
ready to realize near-term benefits from the opening of the market to 
competition.
  Mr. Chairman, I support the bill and most particularly the open 
``fresh look'' provisions.
  The CHAIRMAN pro tempore (Mr. LaHood). The Chair would advise both 
sides they each have 13 minutes remaining.
  Mr. DINGELL. Mr. Chairman, I yield 4 minutes to the distinguished 
gentleman from Massachusetts (Mr. Markey).
  Mr. MARKEY. Mr. Chairman, I thank the gentleman from Michigan (Mr. 
Dingell) very much for yielding me this time.
  Mr. Chairman, in 1945, a visionary, Arthur C. Clarke, began this 
international space odyssey in writing an article which pointed out 
that by the positioning of satellites at a point over the Earth's 
equator, it would be possible to create an international 
telecommunications satellite-driven system for all the entire world.
  Now, this vision of Arthur C. Clarke was one that only really began 
to be implemented in 1962 with the creation of INTELSAT, a government-
driven organization, necessarily because of the need for the missiles 
to shoot the satellites up and the government contracts to construct 
the satellites.
  However, as the years have gone by, it has become clear that private 
sector companies as well can compete in this marketplace, and there 
have been dozens of companies, many of them successful, which have 
begun the process of entering these marketplaces. And so now the test 
for American and international policymakers is to match the vision of 
Arthur C. Clarke with the philosophy of Adam Smith. That is roofless, 
Darwinian capitalism. We must ensure that we have made a full injection 
into this international satellite cartel of the reality that they are 
competing for business with other companies.
  Now, America has the lead in this field. We are number one, looking 
over our shoulders at number two and number three. The major obstacle 
to us leaping out into an almost insurmountable lead is this 
international cartel; government-granted, government-sanctioned, and 30 
years old. It is time for us to end this cartel and allow these 
American-based satellite companies to get out and into international 
markets.
  Now, why is this important? It is because as this Congress has voted 
for NAFTA, for GATT, for the WTO, we are essentially saying as a 
country that we are going to allow our low-end jobs to go to Third 
World countries. That is what we are saying. But in turn what we are 
saying, quite self-confidently, is that we believe that we can capture 
the lion's share of the high-end jobs, the technology-based jobs, the 
jobs that relate to the high education in our country.
  We cannot allow an international cartel to continue to wall out 
American companies from the marketplaces of this planet because that is 
where our great high-tech education-based opportunities lie.
  Otherwise, we have the worst of all worlds. Our low-end jobs go as 
Third World countries produce these manual labor products, but we do 
not gain access to the markets in these countries around the world 
where we can market our high-end products.
  This bill telescopes the time frame that it will take for America to 
have its companies gain access to every single country in the world 
with the satellite-based services, and in every one

[[Page H2830]]

of the service areas. That is why we bring this bill to the floor 
today.
  And it is not to put COMSAT out of business. COMSAT will remain in 
business. It will remain competitive. It will remain with the capacity 
to enter into any one of these markets, but only at the point at which 
it is privatized, only at the point at which COMSAT, with INTELSAT, has 
given up its monopoly.
  Mr. Chairman, I again thank the gentleman from Michigan (Mr. Dingell) 
for the time that he has yielded to me, and I hope that this 
legislation passes.
  Mr. OXLEY. Mr. Chairman, I yield 4 minutes to the gentleman from 
Georgia (Mr. Norwood).
  Mr. NORWOOD. Mr. Chairman, I thank the gentleman from Ohio (Mr. 
Oxley) for yielding me this time. I appreciate the time and effort to 
discuss something that I find myself in agreement with.
  And I congratulate the gentleman from Virginia (Chairman Bliley) on 
his good works in this, and it is a pleasure for me to follow the 
gentleman from Massachusetts (Mr. Markey), my friend. It is not often 
that we agree, and it is great to hear the gentleman have discussions 
about Adam Smith.
  Mr. Chairman, it is a pleasure to ask all of my colleagues to support 
H.R. 1872, a long overdue piece of legislation. The law we seek to 
amend here today is about as outdated as rotary dial telephones, and as 
obsolete as rabbit ears on a television set.
  When the Satellite Act was written, a government-run consortium made 
sense. Today it simply does not. Private companies across the globe can 
now offer competitive, high-quality international satellite service, 
but only if we empower them to do so by passing this legislation, H.R. 
1872, and eliminating the competitive advantages enjoyed by INTELSAT 
and Inmarsat.
  A recent study prepared by the Satellite Users Coalition documented 
that passage of H.R. 1872 would produce cost savings reaching as high 
as $2.9 billion for the American consumers over the next 10 years. 
Additionally, this study went on to say and calculated that through the 
expected competition brought about by meaningful reform, consumers 
around the world could expect savings of $6.9 billion over that same 
period.
  The most important consumer benefit, though, Mr. Chairman, however 
may not be the savings but rather the wealth of new innovation that 
competition will invariably bring to the satellite industry. More than 
30 years ago, governments around the world had the best intentions when 
they took a risk and created an international satellite system. Back 
then, the goal was to push technology forward and expand the reach of 
the communication industry. Today it is clear that INTELSAT and 
Inmarsat have served their purpose.
  Therefore, I urge my friends and colleagues to support H.R. 1872 and 
help us bring real competition to the market for satellite 
communications as soon as possible.
  Mr. OXLEY. Mr. Chairman, I yield myself 1\1/2\ minutes.
  Mr. Chairman, I rise in support of H.R. 1872 and commend the 
gentleman from Virginia (Chairman Bliley) and the gentleman from 
Massachusetts (Mr. Markey) for their strong leadership in bringing this 
issue to the floor.
  There can be no doubt that the time has come for privatizing and 
restructuring the intergovernmental satellite organizations. While 
there may be some differences of opinion on the components as we move 
forward, there is certainly unanimity about the fact that privatization 
and increased competition in satellite communications are best for the 
marketplace and best for the consumer.
  To illustrate this point, it is worth noting that a significant 
development has occurred since the Committee on Commerce acted on the 
bill. The international government organization INTELSAT, consisting of 
142 member countries, agreed on March 30 of this year to move toward 
privatization by creating a private company separate from INTELSAT to 
compete in the commercial satellite marketplace. The member countries 
of INTELSAT, after a lengthy negotiation process heavily influenced by 
the United States, came to a unanimous agreement to voluntary spin off 
assets and create a new competitive entity.
  While some may question whether this privatization effort is 
sufficiently procompetitive, it strongly demonstrates the recognition 
around the globe of the need to privatize and enhance competition in 
the international satellite market.
  Mr. Chairman, I also believe that it clearly demonstrates the extent 
to which the leadership of the gentleman from Virginia (Mr. Bliley) has 
garnered the attention of the industry and the markets, and for that 
the courage and leadership shown by the gentleman from Massachusetts 
(Mr. Markey) and the gentleman from Virginia (Mr. Bliley) are to be 
commended.
  Mr. Chairman, I encourage all Members to support this legislation.
  Mr. BLILEY. Mr. Chairman, I yield 1 minute to the gentleman from New 
York (Mr. Forbes).
  Mr. FORBES. Mr. Chairman, I thank the gentleman from Virginia for 
yielding me this time.
  Mr. Chairman, I rise today in support of H.R. 1872, a much-needed 
measure which will provide improved and cost-effective international 
communications by allowing dozens of private sector companies to 
compete in the marketplace.
  As we look to the global marketplace and we can think about the many 
people who have come to contribute to the greatness of this land, we 
know that there is a great need out there for many Americans, American 
consumers, to take advantage of lower cost in international 
communications. This measure provides for that in a different time in a 
different place. This measure is now greatly needed to replace the 
government-sponsored corporation that had a lock on this marketplace.
  This is about real people needing to communicate in a cost-effective 
manner. Not about multinational corporations, real people who believe 
that this measure is long overdue: The Polish American Congress, the 
Hispanic Council on International Relations, the National Association 
of Latino and Appointed Elected Officials, the Armenian National 
Committee of America, the Cuban American Council, the National Council 
of La Raza and the Puerto Rican Legal Defense and Education Fund. These 
are real people who want to take advantage of lower cost communications 
and I urge adoption of the Bliley-Markey bill.
  Mr. BLILEY. Mr. Chairman, I yield 1 minute to the gentleman from 
Connecticut (Mr. Shays).
  (Mr. SHAYS asked and was given permission to revise and extend his 
remarks.)
  Mr. SHAYS. Mr. Chairman, I thank the gentleman from Virginia (Mr. 
Bliley) for this time, and also commend the gentleman from 
Massachusetts (Mr. Markey) for their bill and rise in strong support.
  Mr. Chairman, I believe in real competition and meaningful choice, 
and this bill offers that.
  Today the House will be considering important legislation designed to 
bring satellite communications technology into the modern age. I would 
like to commend the Chairman of the Commerce Committee, Mr. Bliley, and 
his original cosponsor, Mr. Markey, for introducing H.R. 1872, the bill 
to privatize the intergovernmental satellite organizations. It has been 
endorsed by every private satellite services company and the major 
users of satellite services.
  Two intergovernmental organizations dominate international satellite 
communications. They are called INTELSAT and Inmarsat. They are owned 
by a cartel like structure of all the world's state telephone 
companies. The same companies that control access to national markets, 
and thus keep out American companies that want to compete with these 
organizations.
  H.R. 1872 privatizes the intergovernmental satellite organizations, 
and even more, does so in a pro-competitive manner. Now, they will 
never privatize pro-competitively on their own--they like either the 
status quo or a privatized monopoly. That is why the bill uses access 
to the U.S. market for advanced services as a lever to make sure they 
are privatized pro-competitively.
  Comsat has a monopoly over sales of intergovernmental organization 
services in the U.S.--over 90 other countries permit competition for 
access to these organizations, and this bill brings us into line with 
the rest of the world. It also allows customers to renegotiate long-
term ``take or pay'' contracts they were forced to sign by the COMSAT 
monopoly. Of course the monopoly wants to keep them locked in so 
consumers do not get the benefits of competition. But the bill, through 
the

[[Page H2831]]

very important ``fresh look'' provision allows customers to get the 
benefits of competition. I urge members to vote for the bill and oppose 
amendments designed to eliminate fresh look or the bills market access 
leverage.
  Supporters of the status quo will try to divert the issue with 
rhetoric about takings or punishment of the monopoly, but these 
arguments are just a smokescreen for protecting the incumbent. Support 
H.R. 1872 today--reform is long overdue. Customers need lower prices, 
and new, American, competitors need access to foreign markets.
  Mr. BLILEY. Mr. Chairman, I yield 2 minutes to the gentleman from 
Virginia (Mr. Davis).
  (Mr. DAVIS of Virginia asked and was given permission to revise and 
extend his remarks.)
  Mr. DAVIS of Virginia. Mr. Chairman, we are dealing with a structure 
today that is a dinosaur and H.R. 1872 remedies that. Thirty-five years 
is a long time since the original act and in the communications 
industry it is even a longer time. And since the act was passed 
originally, technology, the worldwide industry structure have changed 
dramatically. A monopoly structure might have been required at the time 
to develop a global network, but today it has become a problem, a 
dinosaur keeping rates far above the costs and limiting the service and 
facility innovation that we would otherwise get.
  This legislation solves that problem. It opens up the international 
satellite markets to facilities-based competition, and it properly 
restricts the activities of the international satellite organizations 
until this goal is well on its way.
  It permits providers other than COMSAT to directly access INTELSAT 
and Inmarsat so that rates for end users can go down more immediately. 
It allows customers to take advantage of these lower rates by 
permitting them to renegotiate contracts agreed upon when only a 
monopoly existed before.
  As for COMSAT and the international organizations, it allows them to 
move ahead in this new competitive environment so long as they operate 
in the best interest of a competitive marketplace.
  Mr. Chairman, if we want the 21st century to be America's century, we 
need to continue to restructure our competitive environment so that we 
can compete and maintain our edge globally and this legislation does 
that. This opens up tremendous potential for U.S. consumers and 
industry. I think that it is particularly good for the end users, the 
consumers around the globe.
  And just as we have seen in the domestic telecommunications market, 
competition brings lower rates, better services, and increased 
technological innovations.

                              {time}  1145

  The very same benefits are going to come from this important bill in 
the international satellite marketplace. I think it deserves the 
support of everyone in this Chamber.
  Mr. DINGELL. Mr. Chairman, I yield 1 minute to the distinguished 
gentleman from Tennessee (Mr. Tanner).
  Mr. TANNER. Mr. Chairman, I rise today in support of H.R. 1872, the 
Communications Satellite and Privatization Act of 1998.
  I believe this legislation will speed the transformation of two 
international satellite governmental bodies into competitive commercial 
organizations. The bill will bring competition to the international 
satellite industry and ultimately, in my judgment, lead to lower 
telephone rates on long distance international calls and improved 
services.
  Long distance companies use satellites to complete many of their 
calls so the rates they pay for satellite time directly affects the 
rates consumers pay for international calls. More to the point, our 
constituents who have family members and friends serving in the 
military, the foreign service, or simply doing business overseas, will 
be able to reduce their long distance bills.
  When the satellite technology was in its infancy in the early 1960s, 
it made sense for our government and many partnering governments to get 
together and boost the satellite industry. Today, though, it makes 
sense, with so many potential competitors, to open competition within 
this market in an effort to speed the benefit of lower international 
phone bills.
  Mr. BLILEY. Mr. Chairman, I yield 2 minutes to the gentleman from 
Mississippi (Mr. Pickering).
  Mr. PICKERING. Mr. Chairman, I rise in support of the effort to bring 
competition to this very important effort in communications and 
satellites. In my home State of Mississippi, WorldCom, who would have 
believed the number one provider of Internet services would come from a 
rural State like Mississippi? This is what we have been trying to do 
since the telecommunications bill.
  If we look at our efforts since 1994 to bring competition and 
deregulation in market after market, whether it is agriculture or 
telecommunications, and this is one more important area where we can 
make a difference by supporting this very important piece of 
legislation that will bring more competition, more choice, lower 
prices, and technology and innovation to the marketplace.
  So with great honor, I rise in support of the efforts today of the 
gentleman from Virginia (Mr. Bliley) and the gentleman from 
Massachusetts (Mr. Markey) and look forward to supporting this very 
important legislation.
  Mr. DINGELL. Mr. Chairman, I yield myself 7 minutes.
  Mr. Chairman, this is a most remarkable piece of legislation. It is a 
wonderful solution. It is a wonderful solution seeking most actively 
for a problem. As a matter of fact, it is rushing wildly from point to 
point to find some problem that it can solve.
  In the process, it is knocking over the crockery and going to create 
enormous damage for the people of this country, for American industry, 
and for American telecommunications industries. It also is going to 
create enormous problems for the taxpayers of this Nation by subjecting 
them to enormous liability for an unconstitutional taking under the 
Tucker Act.
  The allegation is made that COMSAT is a monopoly. The simple fact of 
the matter is that within the last week, on April 24, as a matter of 
fact, the FCC declared that the COMSAT Corporation is a nondominant 
telecommunications carrier.
  As reported in the Wall Street Journal, FCC has found that COMSAT 
does not wield market power in 130 countries where it offers telephone 
services, 54 countries where it transfers occasional use of video, and 
in all countries where it offers long-term video needs.
  COMSAT has better than 20 major competitors. It is the major 
competitors of COMSAT who are around here whining for relief. Who are 
these unfortunate, penniless, downtrodden competitors of COMSAT? They 
are PanAmSat, and this bill has been described as a PanAmSat relief 
bill by Wall Street.
  PanAmSat just merged with Hughes and expects, if we pass this 
legislation, that they are going to cut a fat hog which will be paid 
for by the taxpayers, because we are expropriating, by the enactment of 
this legislation, property which belongs to COMSAT, Loral and AT&T 
which just merged, poor downtrodden, barefoot telecommunications 
giants; and Orion and Columbia, plus a wide array of others.
  There is no real problem with monopoly here. Indeed, the market share 
of COMSAT has been declining. Another interesting thought, COMSAT is 
spinning off now its satellite services in which it invested its 
shareholders' money. Those are going into competition.
  Talk about INTELSAT. INTELSAT is not a monopoly. It has a number of 
other competitors who are up there providing telecommunications 
services. This curious piece of legislation, I want to observe, is 
going to have virtually no consequences in terms of real increase in 
competition because, first of all, the competition that we are supposed 
to be trying to enforce is not being imposed on U.S. companies, but 
rather, we are trying to impose it on other companies in other 
countries around the world. A most remarkable set of circumstances, to 
assert the long reach of the arms of the United States Congress, to 
impose on other countries and on their industries' deregulation, a most 
curious practice.
  But the last thing to which I want my colleagues to devote their 
attention is the simple fact that under the Tucker Act, the United 
States Congress is here engaging in an unlawful, unconstitutional, and 
improper and wrongful taking of assets belonging, not to the 
government, and not to a

[[Page H2832]]

wrongdoer, but simply to a U.S. corporation, COMSAT, and also an 
interference in the contract rights of companies which are subscribers 
and purchasers of service from COMSAT.
  This action alone will subject the United States to billions of 
dollars in lawsuits and probably billions of dollars in compensation 
that we will have to pay, because we have interfered with the contract 
rights, not just of COMSAT, but in the contract rights of people who do 
business with COMSAT. We have interfered in a way which diminishes the 
value of the stock of the stockholders and the assets of COMSAT. Apart 
from the fact that this is wrong, it is also something which is 
protected by the Constitution.
  Some of my friends have said, well, the Congress reserved to itself 
the right to amend the statute. We always do that. But we cannot, under 
the Constitution, reserve to ourselves the right to take the property 
of an American corporation.
  The Congress did this a while back. Not many of my colleagues 
remember the time that we passed the Penn Central reorganization. But 
because we took property from Penn Central, the American taxpayers 
wound up having to pay $6.5 billion.
  Penn Central is no longer a railroad. They are a holding company. 
They are listed on the New York Stock Exchange. They are making fine 
earnings on the basis of investments that they made with the money by 
which the Congress mistakenly enriched them because they did an 
unlawful taking; and under the Tucker Act, they are able to sue.
  Let us just look at some of the liabilities that we are absorbing. I 
asked the staff to inquire to find out what it is that we will be 
looking at in terms of additional liability for the taxpayers. I remind 
my colleagues, these are American taxpayers who are going to have to 
pay.
  I would tell my colleagues that over $3 billion is the potential 
liability for INTELSAT's business. That includes revenue from 
restriction on additional services, direct access, and ``fresh look,'' 
$623 million for restriction on replacement satellites carrying noncore 
services and a number of other items.
  In addition to that, there will be over $4 billion in liabilities 
potential to Inmarsat from business losses there, over $157 million 
from restriction on additional services, $327 million from the ``fresh 
look'' provisions of the legislation, and other liabilities that this 
Congress is assuming on behalf of a bunch of fat cats who, I reiterate, 
are seeking to cut a fat hog at the expense not just of COMSAT, but at 
the expense of the American taxpayers.
  When, in a few years, my colleagues observe that a lawsuit has been 
filed, get a hold of our wallet and be prepared to defend what we have 
done today, because we will have dissipated billions of dollars of the 
taxpayers' assets, and we will have imposed upon the United States an 
extortionate, unsatisfactory, and outrageous liability for serious 
constitutional misbehavior and for improper taking of property 
belonging to American citizens.
  We are not playing games. We are not playing with foreigners. We are 
beating American citizens for the benefit of just a few fat cats who 
are doing splendidly and who, in terms of their earnings and their 
market share, are growing at an extraordinary rate.
  Ask yourself, my colleagues, is this the way that this Congress 
should spend the budget surplus? Do we want to dissipate money because 
we have done something egregiously stupid today?
  Mr. Chairman, I reserve the balance of my time.
  Mr. BLILEY. Mr. Chairman, how much time do I have remaining?
  The CHAIRMAN. The gentleman from Virginia (Mr. Bliley) has 4 minutes 
remaining, and the gentleman from Michigan (Mr. Dingell) has 1 minute 
remaining.
  Mr. BLILEY. Mr. Chairman, I yield 1 minute to the gentleman from 
California (Mr. Cox).
  Mr. COX of California. Mr. Chairman, I am pleased to rise in support 
of H.R. 1872, the Communications Satellite Competition and 
Privatization Act, which will bring a notable and lasting achievement 
for the current Congress.
  I would particularly like to commend the work of the gentleman from 
Virginia (Mr. Bliley), the chairman of the Committee on Commerce, whose 
diligent efforts have made it possible for us to bring this important 
privatization initiative to the floor. It has significant bipartisan 
support.
  The law that we are amending today, the Satellite Communications Act, 
was enacted in 1962. That was less than 5 years after the launch of 
Sputnik. We have to remember that, at that time, it was widely assumed 
that no private company could ever assume the financial burden of 
putting a satellite into orbit.
  It should not have come as a surprise, therefore, that the 1962 
Satellite Communications Act gave COMSAT and INTELSAT, the 
intergovernmental treaty organization which COMSAT helped create, a 
virtual monopoly on the world's international satellite business. It 
remains a profitable monopoly.
  We have come a long way since 1962, and the myth that no private 
company could afford to get in the satellite business has long since 
been shattered. This is the right bill. I urge support for H.R. 1872. 
There is no longer any defensible reason for governments to be in the 
business of providing commercial satellite services.

                              {time}  1200

  Mr. DINGELL. Mr. Chairman, could the Chair tell us how much time is 
remaining?
  The CHAIRMAN. The gentleman from Michigan (Mr. Dingell) has 1 minute 
remaining. The gentleman from Virginia (Mr. Bliley) has 3 minutes 
remaining and the right to close.
  Mr. DINGELL. Mr. Chairman, I yield back the balance of my time on the 
understanding the gentleman from Virginia is going to close.
  I have made such good speeches, I am sure they will benefit the 
gentleman in his closing remarks.
  Mr. BLILEY. Mr. Chairman, I yield myself the balance of my time, and 
the first thing I would like to do is read a list here of who is 
supporting this bill:
  AMSC, Boeing, Columbia Communications, Constellation Communications, 
Echostar, Final Analysis, GE Americom, ICG Satellite Services, Iridium 
LLC, Loral, Leo One USA, MCHI, Motorola, Orbital Communications, Orion 
Network Systems, PanAmSat, Sky Station International, Stratus Mobile 
Networks, Teledesic, TRW Space and Electronics Group, World Space 
Management Corporation.
  Satellite users in support of the bill: AT&T, Coalition of Service 
Industries, General Electric Company/NBC, MCI, Sprint, 
Telecommunications Industry Association, World Com.
  Ethnic groups: Americans For Tax Reform, Republican National Hispanic 
Assembly, Armenian National Committee of America, ASPIRA, Cuban 
American National Council, Hispanic Council on International Relations, 
National Association of Latino Elected and Appointed Officials, 
National Council of La Raza, Polish American Congress, Puerto Rican 
Legal Defense Fund.
  I would also like to speak about the so-called ``taking.'' This bill 
does not, does not, result in an unconstitutional taking of COMSAT's 
property. Our bill does not take COMSAT's property in its contracts. We 
merely give customers the right to renegotiate. This type of economic 
regulation is constitutional.
  The FCC has used ``fresh look'' four times in the past and no one 
claimed takings. We are not like the Penn Central Railroad. That was 
track and other equipment. We do not take any of their equipment.
  In 1962, Congress reserved the right to regulate satellites at any 
time and to change the deal. COMSAT has no reasonable expectation 
amounting to a property right that the regulatory regime would not be 
altered. The Supreme Court in 50 years has not ruled on a ``fresh 
look'' case. Not in 50 years.
  The share of the market for international satellite-based public 
switch network service, voice and facsimile, 90 percent of it, is held 
by COMSAT and INTELSAT. AT&T, MCI and Sprint, yes, they have cables, 
but they have to have a contract with COMSAT for redundancy in case the 
cable gets severed so they do not lose their customers.
  I urge all Members to resist amendments and to support the bill as 
reported by voice vote out of the committee.
  Mr. TOWNS. Mr. Chairman, I rise today in support of H.R. 1872, the 
Communications

[[Page H2833]]

Satellite Competition and Privatization Act. This legislation will 
serve to create a competitive, free enterprise environment in both the 
domestic and international satellite marketplace.
  As our global economy moves towards a more competitive marketplace, 
H.R. 1872 would also bring lower prices, increase competition, and spur 
technological innovation. Although I applaud the goals of H.R. 1872, I 
believe that certain provisions within the bill are misguided and 
punitive.
  Specifically, H.R. 1872 contains restrictions that will limit the 
services that Comsat can offer using its satellite services. The 
current language provides that if certain rigid milestones are not met, 
Comsat would be forced to stop marketing certain services offered. If 
adopted, this provision would give rise to a ``takings'' claim under 
the Constitution, and would result in tremendous tax liabilities for 
consumers. As a supporter of fair and open competition, I cannot 
condone such punitive measures, and will support the amendment offered 
by the gentlelady from Maryland, Representative Connie Morella, which 
would permit Comsat to continue to use its property and prohibit the 
FCC from implementing the service restriction in a manner that would 
result in a government ``takings''.
  H.R. 1872 also contains a provision that would severely limit 
Comsat's ability to engage in binding contractual agreements. 
Proponents of the measure argue that ``Comsat has `locked up' the 
market with long-term contracts'' and, therefore, customers of Comsat 
should be afforded the opportunity to unilaterally breach their 
contracts so that they make them a ``fresh look'' at any available 
competitor in the marketplace. While I agree that every business should 
be given an opportunity to compete on a level playing field, I also 
believe that the stability of our global marketplace depends on 
maintaining fairly bargained contractual agreements. To date, there has 
not been any evidence to prove any anti-competitive contractual 
negotiations by any of the satellite companies. The strength of the 
U.S. economy, and even the world economy, depends on contractual 
stability. This overarching principle secures my support for the 
amendment offered by the gentleman from Louisiana, Representative Billy 
Tauzin (R-LA).
  Let me be clear. I believe that H.R. 1872 will promote fair and open 
competition in the global satellite industry. Moreover, I believe H.R. 
1872 will create jobs for all of our communities. At the end of the 
day, the most important question we must ask ourselves is what did we 
do to benefit the citizens of this great country.
  Mr. Chairman, I urge my colleagues to vote Yes on the Morella and 
Tauzin amendments and Yes on the final passage of H.R. 1872.
  Mr. DINGELL. Mr. Chairman, I would like to call my colleagues' 
attention to the extraordinary discrepancies between the black-letter 
law of the statutory text and the contents of the Committee Report. If 
any of my colleagues would like to know why the judiciary pays little 
attention to the legislative history when attempting to interpret the 
statutes we write, the Report to accompany this bill provides a 
magnificent example. The Committee Report on H.R. 1872 is as accurate a 
reflection of intentions of the Committee when it considered H.R. 1872 
as was yesterday's Washington Post, although I think that the Post made 
better reading.
  While this is unfortunate, and will contribute to the decline in the 
importance of committee reports as legislative history, I am 
particularly concerned about the way in which the Report treats the 
Committee's work with respect to proposed Section 641, and in 
particular those dealing with ``Direct Access.''
  During the Telecommunications Subcommittee's consideration of H.R. 
1872, I offered an amendment to proposed Section 641 which made 
significant revisions in the ``Direct Access'' provisions. After I 
offered and explained my amendment, it was accepted by the Chairman of 
the Committee and approved without dissent.
  The provisions in the Committee Report do not reflect the plain text 
of my amendment, nor my intentions as its author.

                   Legislative History of Section 641

       Section 641 is entitled ``Direct Access; Treatment of 
     COMSAT at Nondominant Carrier.'' This Section requires the 
     Commission to take those actions that may be necessary to 
     permit providers and users of telecommunications services to 
     obtain direct access to INTELSAT and Inmarsat 
     telecommunication services. Section 641 also requires the 
     Commission to act on Comsat's petition to be treated as a 
     non-dominant carrier, and to eliminate any of its regulations 
     on the availability of direct access to INTELSAT or Inmarsat, 
     or to any successor entities, after a pro-competitive 
     privatization of this intergovernmental treaty organizations 
     (``IGOs'') is achieved consistent with this statute.
       Subsection 641(1) addresses direct access to INTELSAT 
     telecommunications service through either purchases of space 
     segment capacity in accordance with subsection 641(1)(A) or 
     through investment in INTELSAT in accordance with subsection 
     641(1)(B).
       Specifically, Subsection 641(1)(A) provides that providers 
     or users of telecommunications service may purchase 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 (for 
     example, costs for insurance, administrative, and other 
     operations and maintenance expenditures); (ii) the 
     Commission's regulations ensure that no foreign signatory, 
     nor any affiliate of a foreign signatory, is 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.
       Subsection 641(1)(B) requires that providers or users of 
     telecommunications service may obtain direct access to 
     INTELSAT telecommunications services through investment in 
     INTELSAT as of January 1, 2002, if the Commission finds that 
     such investment will be attained under procedures that assure 
     fair compensation to INTELSAT signatories for the market 
     value of their investments.
       Subsection 641(2) addresses direct access to Inmarsat 
     telecommunications services through either purchases of space 
     segment capacity in accordance with subsection 641(2)(A), or 
     through investment in Inmarsat in accordance with subsection 
     641(2)(B).
       Specifically, subsection 641(2)(A) provides that providers 
     or users of telecommunciations service may purchase 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 
     (for example, costs for insurance, administrative, and 
     other operations and maintenance expenditures); (ii) the 
     Commission's regulations ensure that no foreign signatory, 
     nor its affiliate, is 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.
       Subsection 641(2)(B) requires that providers or users of 
     telecommunications service may obtain direct access to 
     Inmarsat telecommunications services through investment in 
     Inmarsat as of January 1, 2001, if the Commission finds that 
     such investment will be attained under procedures that assure 
     fair compensation to Inmarsat signatories for the market 
     value of their investments.
       Subsection 641(3) requires the Commission to act on 
     Comsat's petition to be treated as a non-dominant 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. Sec. 160).
       Subsection 641(4) requires the Commission to eliminate any 
     regulation on the availability of direct access to INTELSAT 
     or Inmarsat or to any successor entities after a pro-
     competitive privatization of those intergovernmental 
     satellite organizations is achieved.

                    Critique of Legislative History

       The language contained in the Committee Report is replete 
     with instances in which the report is substantially more 
     punitive to Comsat than the text of the legislation adopted 
     by the Committee. As discussed below, the portion of the 
     Report describing Section 641 is filled with inconsistencies 
     and descriptions of provisions that neither appear in the 
     text nor were discussed by the Committee. Not only are there 
     numerous internal inconsistencies, but when the description 
     in the Report is compared with the actual text of H.R. 1872, 
     the factual misrepresentations become apparent.
       The first sentence of this portion of the Report says that: 
     ``New sections 641(1) and 641(2) require the Commission to 
     permit competitors to offer services through direct access to 
     the INTELSAT and Inmarsat systems.'' The legislation requires 
     the Commission to permit providers and users of 
     telecommunications services to obtain telecommunications 
     services directly for INTELSAT and Inmarsat.
       The Report also states that if ``the Inmarsat Operating 
     Agreement is terminated, former signatories, including COMSAT 
     for the provision of services in the United States, should 
     not be the exclusive distributors of Inmarsat services.'' The 
     Report continues: ``the U.S. Administration and the 
     Commission should, in the public interest, ensure that any 
     Inmarsat privatization plan includes direct access until 
     full privatization is fully implemented.'' Neither of 
     these provisions are contained in the text of the bill, 
     nor were they discussed when my amendment was accepted.
       In its description of sections 641(1)(A)(i) through (iii), 
     the Report again misrepresents the requirements of the 
     statute. First, the Report states that these sections 
     ``describe the circumstances which the Commission should 
     determine are present when the Commission implements direct 
     access through

[[Page H2834]]

     purchases of space segment capacity from INTELSAT.'' First, 
     the provisions of the bill do not require the Commission to 
     implement direct access. Rather, the bill requires the 
     Commission to ensure that it is possible for carriers and 
     users to obtain direct access. Additionally, this statement 
     suggests that the Commission's analysis will be conducted 
     simultaneously with the occurrence of direct access, when in 
     fact the plain language of the legislative text requires that 
     the Commission determine if the conditions set forth in 
     sections 641(1)(A)(i) through (iii) are met prior to 
     permitting direct access.
       The Report's description of the conditions for ensuring 
     direct access is possible is also inaccurate. In particular, 
     sections 641(1)(A)(ii) and (2)(A)(ii) require that no foreign 
     signatory or its affiliate are permitted to provide INTELSAT 
     or Inmarsat services from the United States. The text of the 
     Report incorrectly limits this condition to foreign 
     signatories. Moreover, the Report claims that sections 
     641(1)(A)(iii) and (2)(A)(iii) require the Commission to 
     ensure that carriers pass savings through to end-users. The 
     statute, however, requires only that the Commission have ``in 
     place a means to ensure'' that carriers will be required to 
     pass savings through to end-users.
       The description of sections 641(1)(A)(i) and (2)(A)(i) also 
     diverges from the text of the bill. In particular, the text 
     of H.R. 1872 does not contain the limitations on ``unavoided 
     costs'' that the Report suggests. For example, the Report 
     provides that ``the only costs covered by this section are 
     those unavoidable signatory expenses in excess of all 
     payments to signatories from the IGOs.'' This limitation is 
     not present in the legislative text. Rather, the text of H.R. 
     1872 only refers to ``support costs that such signatories 
     would not otherwise be able to avoid . . .'' Moreover, the 
     Report states that: ``If such costs are in excess of or not 
     covered by the IUC or by other payments to INTELSAT or 
     Inmarsat, then this section shall be satisfied if INTELSAT or 
     Inmarsat has in place or create a mechanism or other 
     methodology or legal regime which permits (or does not 
     preclude) parties . . . to adopt means to ensure that such 
     unavoidable, excess signatory costs are covered by payments 
     from other direct access providers or otherwise covered or 
     fairly compensated.'' Again, there is no such provision in 
     the statute.
       The Report contains a requirement that the Commission 
     implement new subsections 641(1)(a)(ii) and 2(a)(ii) in a 
     manner consistent with U.S. obligations in World Trade 
     Organization (``WTO'') and to consult with Executive Branch 
     agencies in this regard. Again, the text of the statute 
     contains no such provision. Moreover, direct access itself 
     appears to be inconsistent with the United States' Schedule 
     of Specific  Commitments agreed to in the WTO Basic Telecom 
     Agreement.
       In particular, the U.S. Schedule of Specific Commitments 
     limits, inter alia, direct access to INTELSAT and Inmarsat to 
     Comsat, the U.S. Signatory to those IGOs, for the provision 
     of basic telecommunications services. As the Commission noted 
     in implementing the WTO, this Schedule makes no distinction 
     with respect to international service and U.S. domestic 
     services. Rather, it maintains access to INTELSAT and 
     Inmarsat satellites through Comsat for the provision of any 
     service, domestic or international. Thus, any action by the 
     U.S. Government permitting carriers to have direct access to 
     space segment from INTELSAT will conflict with this Schedule 
     of Specific Commitments because it will permit carriers to 
     circumvent Comsat.
       In describing subsections 641(1)(A)(iii) and (2)(A)(iii), 
     the Report states that: ``The Committee does not intend for 
     the Commission to implement any form of carrier regulation or 
     reporting requirement that would reinstate or be tantamount 
     to dominant carrier regulation on carriers found to be non-
     dominant before the Committee's consideration of H.R. 1872 . 
     . . [however] [t]he foregoing sentence does not apply to 
     COMSAT . . .'' This provision penalizes Comsat by name even 
     in those markets where the Commission has determined it is 
     non-dominant. Needless to say, there is no basis for the 
     provision contained in the Committee Report, either in the 
     text of the legislation or in the Committee debate when the 
     provision was adopted.
       In its description of subsections 641(1)(A)(iii) and 
     (2)(A)(iii), the Report states that the requirement that 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 direct access authority will be met ``if 
     the Commission finds that competition resulting from direct 
     access will result in savings to consumers over what they 
     might pay in the absence of direct access.'' Thus, if one 
     were to rely on the description in the Report one would 
     assume that the Commission has an affirmative obligation to 
     undertake an analysis of whether competition will result in 
     savings to consumers. By contrast, the text of the 
     legislation requires only that the Commission have a means in 
     place to ensure that cost savings are passed on to end users. 
     Once again, the text of the bill contradicts the description 
     of that provision in the Report.
       Finally, the Report describes subsection 641(4) as 
     requiring ``the Commission to sunset any regulation providing 
     for direct access to INTELSAT or Inmarsat when these 
     organizations fully privatize . . . ``It is unclear how the 
     Commission would ``sunset'' a regulation. Actually, the 
     statute requires the Commission to ``eliminate'' any 
     regulation on the availability of direct access. Moreover, 
     the Report limits the scope of this provision to INTELSAT and 
     Inmarsat and neglects the fact that ``any successor 
     entities'' of INTELSAT and Inmarsat are included in the 
     statute.
       The legislative history contained in this Committee Report 
     constitutes a monument to those who would dismiss committee 
     reports as legitimate expressions of Congressional intent. 
     This legislative history is fraught with factual 
     inconsistencies and would lead even the staunchest defender 
     of statutory construction to cringe. It is a blatant attempt 
     to rewrite a bill through its legislative history. As a 
     member of Congress, I am, quite frankly, offended by this, 
     although I cannot say that I am surprised by it. We should 
     aspire to have as our legacy statutes of major importance 
     that speak to the public in plain and ordinary terms. As an 
     integral part of those statutes, the legislative history 
     should enhance, not attempt to redefine, the fruits of our 
     efforts. As the Supreme Court has held: ``In ascertaining the 
     meaning of a statute, a court cannot, in the manner of 
     Sherlock Holmes, pursue the theory of the dog that did not 
     bark.'' See Harrison v. PPG Industries, Inc., 446 U.S. 578, 
     592, 64 L.Ed. 2d 525, 100 S. Ct. 1889 (1980).
  Ms. DeLAURO. Mr. Chairman, I rise in support of the Communications 
Satellite Competition and Privatization Act.
  This bill will privatize the two Intergovernmental Satellite 
Organizations, Intelsat and Inmarsat--opening the international 
satellite market to the wide range of American firms eager to compete 
in it. American ideas and ingenuity have made this country great. It is 
our responsibility, as members of Congress, to encourage these values, 
not stifle them.
  Passage of this bill also will represent a victory for average 
American consumers. Privatization of this market will save consumers as 
much as $2.9 billion over the next decade. At a time when American men 
and women work hard every day to find new ways to make ends meet for 
their families, it is essential that we help them in their search.
  We need a modern satellite market that provides America and the world 
with high-quality products at affordable prices. We need to continue to 
encourage the hard work and innovation that has made this nation a 
world leader. Support the Communications Satellite Competition and 
Privatization Act.
  Mr. WATTS of Oklahoma. Mr. Chairman, I rise in support of H.R. 1872, 
the Communications Satellite Competition and Privatization Act of 1998. 
In 1962, the U.S. became part of the international satellite 
communications organizations. These monopoly organizations are a relic 
of an earlier time when there were only a few network television 
stations and rotary phones were the norm. The telecommunications 
industry changes rapidly each year and we are over a generation away 
from 1962.
  It was not too long ago that cellular phones were cutting edge 
technology and the Internet was used exclusively by university 
professors. Now millions of Americans are enjoying these 
telecommunications services as markets are deregulated in this country. 
H.R. 1872 continues this trend which will potentially create thousands 
of new jobs, save U.S. consumers billions of dollars, and create new 
markets for U.S. businesses.
  I commend the work of Commerce Committee Chairman Tom Bliley and 
Congressman Markey for their work in crafting this important bi-
partisan bill.
  Mr. ADERHOLT. Mr. Chairman, I rise today in support of H.R. 1872 
which would open the international satellite market to full competition 
and encourage the long-overdue privatization of Intelsat and Inmarsat.
  H.R. 1872 is a good bill, and it has been endorsed by a wide variety 
of concerned citizen groups, including Americans for Tax Reform, which 
notes that ``this bill will lower the costs of satellite communications 
to government--money that would otherwise come out of the pockets of 
hard-working Americans.''
  And if saving the American taxpayer money is not in and of itself 
sufficient reason to vote for H.R. 1872, Americans for Tax Reform also 
correctly notes that we should be trying to expand the reach of the 
free market, not letting United Nations-like organizations and state-
owned foreign telephone companies keep U.S. firms from gaining access 
to foreign markets. H.R. 1872 would solve these problems and get the 
government out of the way so that America's telecommunications and 
aerospace industries can provide new and innovative services to 
consumers around the world.
  I urge my colleagues to join me in supporting H.R. 1872.
  Mr. DAVIS of Florida. Mr. Chairman, as a co-sponsor of this important 
legislation, I rise today in strong support for H.R. 1872, the 
Communications Satellite Competition and Privatization Act. In short, 
this bill will reform our 1960's era satellite telecommunications 
policy and promote competition in satellite services and technology.
  Over thirty-five years ago, when Congress passed the 1962 
Communications Satellite

[[Page H2835]]

Act, it was believed that only governments could finance and manage a 
global satellite system. Today, the rapid advances and growth within 
the telecommunications industry far surpass anything we could have 
imagined in the early 1960's. Today, there is no longer a need for a 
privileged international organization to provide satellite 
communications services in competition with private commercial 
services. Passage of this legislation will break up the last lawful 
telecommunications monopoly in the United States and bring greater 
competition, innovation, and efficiency to the international satellite 
industry.
  This bill embodies the belief that open competitive markets will 
result in greater benefits to the industry, the economy, and most 
importantly, the consumers. While over 85 other nations have allowed 
direct access to INTELSAT and Inmarsat services, the United States 
market remains monopolized by COMSAT. The result is that U.S. satellite 
consumers pay inflated prices. A recent study showed that the 
privatization called for under H.R. 1872 would save consumers $2.9 
billion over the next ten years. Furthermore, this legislation will 
save U.S., taxpayers $700 million by cutting the costs of government 
communications.
  Mr. Chairman, the bill before us today will finally bring satellite 
communications policy into the modern era. It recognizes that the 
current system distorts the marketplace and takes reasonable and modest 
steps to ensure competition bringing lower prices and higher quality 
services for satellite users. This bill is good for consumers, good for 
businesses and workers, and good for the United States taxpayer. I urge 
all of my colleagues to support H.R. 1872.
  Mr. HASTERT. Mr. Chairman, we all know satellite technology is moving 
at light-year speed, and that our manufacturers are the best in the 
world. However, the 30-year-old law under which they operate needs to 
be updated for the twenty-first century.
  Private companies like Motorola, PanAmSat and Teledesic are planning 
ventures that would have been unthinkable three decades ago. Consider 
Motorola for a moment--Its network of more than 60 satellites, known as 
Iridium, will soon begin providing voice and paging services. Further 
down the road is its proposal to complete a network of more than 70 
satellites, known as Celestri, in order to provide high-speed data and 
video services worldwide.
  Mr. Chairman, I believe the effect of this legislation will be a boon 
to consumers as they benefit from the increased efficiency and lower 
costs that competition brings. Although IntelSat and InMarSat have 
served us well, we all know it's time for these organizations to join 
other cold war relics on the scrap heap of history.
  Mr. LUCAS of Oklahoma. Mr. Chairman, I rise today in support of H.R. 
1872, the Communications Satellite Competition and Privatization Act of 
1998.
  When Congress set up a satellite monopoly with the Satellite Act of 
1962, few people could imagine a day when you could warm up dinner in 
60 seconds with a microwave or put a plastic card into an automatic 
teller machine to get money 24 hours a day. And Congress did not think 
that private industry could afford to put satellites up into space. 
With that 1960's logic, Congress created a satellite monopoly to ensure 
the United States would not be left behind.
  Clearly, my friends, times have changed since then, and now we have 
many private businesses that are ready to invest in the satellite 
industry. In short, the private sector is ready for competition in this 
industry. But the major roadblock to competition is an outdated Federal 
law that needs to be brought into the 1990's and bridge us to next 
Millennium. That's why I'm supporting H.R. 1872, a bill that breaks 
down decades old barriers to competition by eliminating the bottleneck 
that has kept satellite rates artificially high. It's time for 
government to get out of the way and let competition brings its 
benefits of lower rates and enhanced technology to the satellite 
industry.
  Mr. BLILEY. Mr. Chairman, I yield back the balance of my time.
  The CHAIRMAN. All time for general debate has expired.
  Pursuant to the rule, the committee amendment in the nature of a 
substitute printed in the bill is considered as an original bill for 
the purpose of amendment under the 5-minute rule and is considered 
read.
  The text of the committee amendment in the nature of a substitute is 
as follows:

                               H.R. 1872

       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

[[Page H2836]]

     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:

[[Page H2837]]

       ``(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;
       ``(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;
       ``(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;
       ``(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

[[Page H2838]]

     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 THE CONGRESS.

       ``(a) Annual Reports.--The President and the Commission 
     shall report to the Congress 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.

     ``SEC. 648. CONSULTATION WITH CONGRESS.

       ``The President's designees and the Commission shall 
     consult with the Committee on Commerce of the House of 
     Representatives and the Committee on Commerce, Science, and 
     Transportation 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.--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.

[[Page H2839]]

       ``(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 satellites.--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) 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.''.

  The CHAIRMAN. No amendment to the committee amendment is in order 
unless printed in the Congressional Record. Those amendments shall be 
considered read.
  During consideration of the bill for amendment, the Chair may accord 
priority in recognition to a Member offering an amendment that he has 
printed in the designated place in the Congressional Record. Those 
amendments will be considered read.
  The Chairman of the Committee of the Whole may postpone a demand for 
a recorded vote on any amendment and may reduce to a minimum of 5 
minutes the time for voting on any postponed question that immediately 
follows another vote, provided that the time for the voting on the 
first question shall be a minimum of 15 minutes.
  Are there any amendments to the bill?
  Mr. DAN SCHAEFER of Colorado. Mr. Chairman, I move to strike the last 
word.
  Mr. Chairman, the purpose, of course, would be to engage the chairman 
of the full committee, my good friend from Richmond, Virginia, in a 
colloquy.
  I would like to personally thank the gentleman from Virginia (Mr. 
Bliley) for his work in moving this very important bill forward and his 
leadership on this issue over the past number of years.
  We can all agree that government should not be providing commercial 
services, especially in advanced telecommunications. We can likewise 
agree that the intergovernmental satellite organizations should be 
privatized in a manner that creates a level field for all competitors.
  Now, given that all these organizations are intergovernmental 
organizations, the United States must inevitably engage with our global 
partners as we move forward to privatization. We operate in a global 
interconnected world today, with a complex web of economic undertakings 
binding us to countries around the world. We all know that.
  For instance, the United States and approximately 100 other countries 
that participate in INTELSAT and Inmarsat are members of the World 
Trade Organization, the WTO. We, therefore, have obligations to these 
countries, as they do to us, pursuant to agreements in the WTO. With 
respect to satellite services, we have an obligation to our WTO 
partners under the Fourth Protocol of the General Agreement on Trade 
and Services, which governs basic telecommunications services.
  Now, I would like to ask the chairman, is the bill intended to be 
consistent with U.S. obligations under WTO on the provisions of the 
basic telecommunications services?
  Mr. BLILEY. Mr. Chairman, will the gentleman yield?
  Mr. DAN SCHAEFER of Colorado. I yield to the gentleman from Virginia.
  Mr. BLILEY. The gentleman is correct. My bill is intended to be 
consistent with the WTO.
  As the gentleman may know, I was a strong supporter of the WTO basic 
telecommunications agreement, which will open the world's markets to 
other telecommunications companies. For the price of improved access to 
the global market for our telecom companies, the U.S. Government has to 
permit foreign investment in this market. Given the competitiveness of 
our telecom companies, that is a good bargain.
  I support playing by the rules and I believe this bill is consistent 
with our obligations. But nothing in the WTO agreement says we cannot 
protect competition in our market. We are permitted to do so under the 
WTO services agreement. If necessary, we will vigorously fight for our 
beliefs and rights within the WTO and protect the integrity of U.S. 
competition policy.
  So my bill uses an entry test of not causing competitive harm. As 
long as the IGO's privatized entities meet the criteria and will not 
cause competitive harm, and their entry is otherwise in the public 
interest, the FCC may authorize their use. A competition entry test in 
the public interest is consistent with our WTO obligations.
  Mr. DAN SCHAEFER of Colorado. Reclaiming my time, Mr. Chairman, I 
appreciate the gentleman's remarks. As the gentleman knows, I am very 
interested in seeing that the commission, when making its determination 
whether to license or authorize the use of privatized entities, act in 
a manner consistent with U.S. obligations under the WTO agreement on 
basic telecommunications.
  Now, I would ask the gentleman one final question. Is this 
legislation intended to ensure that the FCC not only take notice but, 
as much as practicable, act in a manner consistent with the WTO 
agreement on basic telecommunication services?
  Mr. BLILEY. If the gentleman will continue to yield, we intend by 
this legislation that the FCC will implement this satellite reform 
legislation in a manner consistent with our obligations under the WTO 
basic telecommunications agreement.
  However, the bill does not mandate that, because foreign parties may 
differ with the FCC's reading of the public interest or whether the 
future structure of an IGO spin-off or successor entity will harm 
competition in this market. If it did mandate that the FCC act 
consistently with our WTO obligations, then that privatized entity or, 
more precisely its government, could go off to Geneva and petition the 
WTO for a panel against the United States due to the FCC finding.
  While I support the principles of the WTO and believe the U.S. should 
live up to its obligations, I do not wish to invite WTO panels. I do 
not want our bill to become an avenue for a recovering monopolist, to 
use a phrase of my cosponsor, to slow down reform by causing trouble 
for the United States in Geneva. Rather, the bill relies on a perfectly 
acceptable ``measure,'' to use WTO parlance, a competition test, as the 
entry standard that should guide the FCC in making decisions on the 
section 601.
  Mr. Chairman, I thank the gentleman for addressing this important 
issue.
  Mr. DAN SCHAEFER of Colorado. Mr. Chairman, I thank the chairman of 
the full committee.
  Mr. DINGELL. Mr. Chairman, I move to strike the last word.

[[Page H2840]]

  I simply want to commend the gentleman from Colorado for what it is 
he has done. This treaty violates the INTELSAT agreement and the basic 
telecom agreement of the World Trade Organization.
  It also would have the practical effect of insisting on specific 
results and would impose sanctions on INTELSAT in violation of that 
treaty if those results are not achieved. The sanctions would violate 
that treaty further by expelling INTELSAT from the U.S. market in 
violation of that treaty agreement.
  In addition to that, it would violate the Inmarsat agreement by 
preventing COMSAT and Inmarsat from providing certain specifically 
required, economically viable service to U.S. consumers. It also 
punishes COMSAT in the event foreign participants do not meet the 
privatization criteria and time schedule, something which is, again, in 
violation of that treaty.
  Now, in addition to that, COMSAT would be barred from providing many 
services to American and foreign participants under the treaties 
requiring those actions, to which this Nation is a signatory. It also 
imposes requirements for spin-offs which do not, I believe, comply with 
the requirements of the treaty.
  It also violates the WTO basic telecom agreements' open market 
requirements because, in point of fact, it tends to close rather than 
to open markets and reduce rather than increase competition. It would, 
in fact, imperil the entire future of the WTO agreement entered into 
with 68 other countries.
  The comments of the gentleman from Colorado were appropriate and 
should be considered as my colleagues prepare to vote against this 
outrageous bill.


                Amendment No. 6 Offered by Mrs. Morella

  Mrs. MORELLA. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 6 offered by Mrs. Morella:
       Page 6, after line 8, insert the following new subsection:
       ``(e) Takings Prohibited.--In implementing the provisions 
     of this section, and sections 621, 622, and 624 of this Act, 
     the Commission shall not restrict the activities of COMSAT in 
     a manner which would create the liability for the United 
     States under the Fifth Amendment to the Constitution.
       Page 11, after line 11, insert the following new 
     subsection:
       ``(d) Takings Prohibited.--In implementing the provisions 
     of this section, the Commission shall not restrict the 
     activities of COMSAT in a manner which would create a 
     liability for the United States under the Fifth Amendment to 
     the Constitution.

  Mrs. MORELLA. Mr. Chairman, I had submitted two amendments for H.R. 
1872, and so I want to clarify for my colleagues that I am only 
offering one of those amendments, the one that deals only with the 
question of takings under the fifth amendment.
  My amendment addresses a fundamental problem with H.R. 1872. As 
reported by the Committee on Commerce, the bill contains service 
restrictions which, when implemented, will constitute an 
unconstitutional taking of COMSAT's property, and so my amendment just 
very simply cures that problem.
  I know that the gentleman from Virginia, my good friend and chairman 
of the committee, contends these restrictions do not constitute a 
taking, but I must respectfully disagree. Quite frankly, if it does not 
constitute a taking, then this amendment is completely in order. Why 
not put it into the bill?
  Mr. Chairman, the United States induced private investors to fund 
COMSAT by offering the company an opportunity to earn a profit by 
helping to serve the communications needs of the United States and 
other countries. That is a quote.
  The United States also instructed COMSAT to sign the INTELSAT and 
Inmarsat operating agreements, which are binding on the parties. 
COMSAT's investments were made in reliance on existing law.
  The United States cannot take COMSAT's property by deliberately 
destroying its value without paying compensation. This is particularly 
true where, as here, the investments were compelled by Federal law. And 
in accordance with that law and with government approval, COMSAT has 
acquired an investment interest in satellites, orbital positions and 
spectrum, as well as other costs associated with the establishment, 
operation, and maintenance of a global satellite system.

                              {time}  1215

  And yet this Federal law statute would prohibit COMSAT from using or 
earning a return on those investments. Putting a company in such a 
position would be a compensable taking, and the liability for this 
taking is massive.
  COMSAT has invested billions of dollars in its space-based assets and 
millions more on the ground. Unless my amendment is adopted, the U.S. 
Treasury and, ultimately, the taxpayers will have to foot the bill.
  These are not opinions that I cooked up myself. They are shared by 
many, including some of our colleagues on the Committee on Commerce. 
They are also shared by Nancie Marzulla. She is the president of 
Defenders of Property Rights. In a recent column in the Washington 
Times, Ms. Marzulla addressed the takings aspect of H.R. 1872. She 
said, ``Some in Congress and elsewhere seem to have forgotten the 
Constitution's fifth amendment prohibition against uncompensated 
takings.'' She notes correctly that ``The Government would have to 
compensate COMSAT for taking the company's property in violation of the 
fifth amendment's guarantee against uncompensated takings. The U.S. is 
liable for just compensation not just when it physically seizes real or 
personal property, but also, as Justice Holmes said in 1922, `If 
regulation goes too far, it will be recognized as a taking.' ''
  I also want to point out the Washington Legal Foundation that the 
chairman of the committee admires so, and many of us do, agrees that 
these provisions are an unconstitutional taking of COMSAT's property. 
In an analysis prepared at my request, WLF has concluded that H.R. 1872 
would indeed effect a compensable taking of private property belonging 
to COMSAT, as well as a material breach of the terms of the compact 
between the United States and COMSAT.
  Mr. Chairman, I include the following for the Record:
                                      Washington Legal Foundation,


                              2009 Massachusetts Avenue, N.W.,

                                   Washington, DC, April 29, 1998.
     Hon. Constance A. Morella,
     U.S. House of Representatives, 2228 Rayburn House Office 
         Bldg., Washington, DC.
     Re H.R. 1872--The Communications Satellite Competition and 
           Privatization Act of 1998
       Dear Representative Morella: In response to your written 
     request for counsel, the Washington Legal Foundation (WLF) 
     has undertaken a legal analysis of H.R. 1872, ``The 
     Communications Satellite Competition and Privatization Act of 
     1998.'' In particular, we have considered whether H.R. 1872 
     in its present form would constitute a ``taking'' by the 
     federal government (subject to just compensation under the 
     Fifth Amendment to the United States Constitution) or a 
     breach of compact between the United States and COMSAT 
     Corporation.
       After careful consideration of H.R. 1872, WLF has concluded 
     that H.R. 1872 would indeed effect a compensable taking of 
     private property belonging to COMSAT, as well as a material 
     breach of the terms of the compact between the United States 
     and COMSAT. WLF's conclusion should not be construed as 
     endorsement or opposition to H.R. 1872. WLF is a nonprofit 
     group organized under 26 U.S.C. Sec. 501(c)(3) and does not 
     engage in any lobbying activity.
       Background. The current wave of telecommunications reform 
     comes from a shift in how the economics of communications 
     networks are generally understood. Whereas it was once 
     assumed that these networks were natural monopolies, experts 
     in the field now believe that these facilities can be 
     provided (and are best provided) by multiple competitors. 
     Nowhere is this shift more clear than in satellite 
     communications. In the 1960s and 1970s, it was universally 
     believed that the establishing and maintaining a network of 
     satellites was so complicated and expensive that only a 
     global consortium could do it. Thus, the United States 
     spearheaded the formation of two treaty-based international 
     satellite organizations (ISOs), INTELSAT and Inmarsat, to 
     carry out this mission.
       Since that time, private companies such as PanAmSat, Loral, 
     Motorola, and Teledesic have launched (or made plans to 
     launch) their own satellite networks. The success of these 
     companies has demonstrated that government involvement is no 
     longer needed to ensure the provision of satellite services. 
     Accordingly, the United States has begun the delicate process 
     of negotiating with other countries--most of whom do not 
     fully share the U.S.'s faith in the marketplace--to privatize 
     the ISOs. These efforts have already borne fruit; INTELSAT 
     has agreed to spin off

[[Page H2841]]

     six of its satellites to a private company, and Inmarsat 
     has agreed to privatize all but its public-safety 
     services.
       Several members of Congress, believing that privatization 
     cannot be achieved unless mandated by the U.S., have 
     introduced legislation intended to force the ISOs to 
     privatize. H.R. 1872 would close the U.S. market to INTELSAT 
     and Inmarsat, their privatized spin-offs and successors, and 
     all U.S. entities that use their facilities, unless the ISOs 
     meet the bill's rigid criteria, and do so by dates certain. 
     H.R. 1872 has been criticized by some for hamstringing the 
     government's ability to negotiate with other countries, and 
     for adopting--allegedly for the purpose of enhancing 
     competition--a protectionist strategy that benefits certain 
     U.S. satellite companies by excluding their most likely 
     international rivals from the market. What has received less 
     attention is that H.R. 1872 would effect the largest 
     confiscation of private property in recent times, exposing 
     the U.S. to billions of dollars in claims for compensation.
       The problem is this: The United States actually does not 
     hold any investment in the ISOs. Private investors have 
     committed massive amounts of capital to fund the ISOs, and 
     they have done so at the behest of the U.S. government, in 
     furtherance of declared national policy. When Congress passed 
     the Communications Satellite Act of 1962, 47 U.S.C. 
     Sec. Sec. 701 et seq., it determined that ``United States 
     participation in the global system shall be in the form of a 
     private corporation, subject to appropriate regulation.'' 47 
     U.S.C. Sec. 701(c). Congress therefore authorized the 
     creation of a new company, COMSAT, to be the sole operating 
     entity in INTELSAT. In 1978, Congress also made COMSAT the 
     sole U.S. participant in Inmarsat.
       By statute, COMSAT is a ``corporation for profit'' and not 
     ``an agency or establishment of the United States 
     government.'' 47 U.S.C. Sec. 731. It has never been funded or 
     otherwise subsidized by the United States. Rather, Congress 
     authorized and expected COMSAT to raise capital by selling 
     shares of voting capital stock ``in a manner to encourage the 
     widest possible distribution to the American public,'' 47 
     U.S.C. Sec. 634(a), and by selling its securities to private 
     investors. See 47 U.S.C. Sec. Sec. 721(c)(8), 734(c). 
     COMSAT's stock trades on the New York Stock Exchange, and its 
     current market capitalization is over $2 billion.
       The INTELSAT and Inmarsat Operating Agreements (which 
     COMSAT was directed by the U.S. government to sign) obligate 
     COMSAT to meet periodic capital calls. At the end of 1997, 
     COMSAT owned roughly 18% of INTELSAT, with a carrying value 
     of approximately $402 million, and roughly 23% of Inmarsat, 
     with a carrying value of approximately $223 million. COMSAT 
     is pledged to invest another $332 million in INTELSAT. In 
     addition, it has invested hundreds of millions in 
     shareholder capital outside the ISOs in order to provide 
     INTELSAT and Inmarsat services to the U.S. public.
       H.R. 1872 could substantially impair, or perhaps destroy, 
     that investment. The bill sets conditions for privatization 
     that the State Department concedes are too onerous for other 
     countries to accept. The entity that INTELSAT recently agreed 
     to privatize would not qualify, nor would the privatized 
     Inmarsat. Some have argued that the bar has intentionally 
     been set too high, at the request of U.S. companies seeking 
     protection for competition, so that the market-closing 
     sanctions that accompany a failure to meet the criteria will 
     be triggered.
       During the transition to privatization, H.R. 1872 would 
     effectively bar the ISOs from deploying satellites to new 
     orbital locations or replacing obsolete satellites at the end 
     of their lives. Moreover, H.R. 1872 declares that if 
     ``substantial and material progress'' is not made, year by 
     year, toward meeting the bill's conditions, COMSAT will be 
     barred from providing high-speed data, Internet, and land 
     mobile service--even though it relies on such services now 
     for significant portions of its revenue. In addition, COMSAT 
     would be frozen in time while the rest of the marketplace 
     moved forward; it could not provide additional services, or 
     additional applications of existing services.
       If privatization is not achieved in exactly the time and 
     manner specified, the bill would limit COMSAT to the 
     provision of so-called ``core'' services, defined as force 
     telphony and occasional use services for INTELSAT, and 
     emergency services (now provided at no charge) for Inmarsat. 
     But the refuge of these ``core'' services may well be 
     illusory, because changes in technology are causing these 
     markets to disappear. Voice traffic, for example, is 
     migrating rapidly from satellites to fiber-optic cables, and 
     a voice-only provider likely would see its market slip away 
     in a world of converging voice and data services.
       Moreover, H.R. 1872 imposes further sanctions that could 
     cripple COMSAT whether or not the ISOs privatize. Most 
     significantly, the bill would give every one of COMSAT's 
     customers the unilateral right to abrogate its contracts with 
     the company. Such sweeping Congressional abrogation of the 
     private contract rights of a single company--without any 
     judicial determination of wrongdoing--may be unprecedented in 
     U.S. history .
       Constitutional Analysis. WLF has concluded that, if 
     adopted, H.R. 1872 would effect a substantial compensable 
     taking of private property. The bill would impair COMSAT's 
     substantial investments in and for INTELSAT and Inmarsat, 
     thus imposing on COMSAT's shareholders virtually the entire 
     cost of a congressional policy change. The Takings Clause 
     of the Fifth Amendment is ``designed to bar Government 
     from forcing some people alone to bear public burdens 
     which, in all fairness and justice, should be borne by the 
     public as a whole.'' Armstrong v. United States, 364 U.S. 
     40, 49 (1960). Congress may not induce a company to invest 
     its private capital, and then turn around and declare that 
     policy changes have made the investment unnecessary, 
     without compensating that company for the assets dedicated 
     to public use.
       WLF has concluded that if H.R. 1872 passes, COMSAT may have 
     legitimate claims for compensation for its taken investments. 
     Government's regulation of the uses to which private property 
     may be put can ``take'' that property, just as if the 
     government had seized the property. See Lucas v. South 
     Carolina Coastal Council, 505 U.S. 1003, 1017-18 (1992); 
     Webb's Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S. 155, 
     163-64 (1980). The Supreme Court has articulated three 
     factors that determine whether usage regulation goes so far 
     as to constitute a taking: ``the economic impact of the 
     regulation on the claimant,'' the ``extent to which the 
     regulation has interfered with distance investment-backed 
     expectations,'' and ``the character of the governmental 
     action.'' Penn Central Transp. Co. v. City of New York, 438 
     U.S. 104, 124 (1978).
       H.R. 1872 bears all the indicia of a regulation that, in 
     Justice Holmes's words, goes ``too far.'' Pennsylvania Coal 
     v. Mahon, 260 U.S. 393, 415 (1922). Based on WLF's 
     understanding of the situation, the bill would have a 
     devastating economic impact on COMSAT, immediately stranding 
     hundreds of millions of dollars of investments made to 
     provide (and useful solely for providing) banned services, 
     and ultimately relegating the company to providing an ever-
     shrinking core of services with ever-more-obsolete 
     technologies. Moreover, H.R. 1872 appears to interfere with 
     COMSAT's investment-backed expectations. If COMSAT had not 
     legitimately expected that it would be allowed to pursue a 
     profit on its INTELSAT and Inmarsat investments, it would 
     have been irrational for COMSAT to have made them, and for 
     its shareholders to have contributed capital to the company.
       Nor does H.R. 1872 merely ``adjust the benefits and burdens 
     of economic life to promote the common good,'' with only an 
     incidental effect on COMSAT. Connolly v. Pension Benefit 
     Guaranty Corp., 475 U.S. 211, 225 (1986). It is true that 
     COMSAT's actions have always been subject to regulation, cf. 
     id. at 226-227. But H.R. 1872 goes well beyond the ordinary 
     regulatory adjustment that such an actor must expect. It 
     rejects the most basic premise of COMSAT's existence: that a 
     global ``commercial communications satellite system,'' built 
     ``in conjunction and cooperation with other countries,'' will 
     best ``serve the communications needs of the United States 
     and other countries.'' 47 U.S.C. Sec. 701(a). In light of 
     this language, the backers of H.R. 1872 cannot reasonably 
     maintain that COMSAT should have expected that the U.S. would 
     seek to exclude INTELSAT and Inmarsat from the market 
     altogether. See Ruckleshaus v. Monsanto Co., 467 U.S. 986, 
     1010-11 (1984) (where company submits trade secrets to EPA 
     upon statutory assurance that EPA will not disclose them, 
     later amendment of statute to permit disclosure works a 
     taking); United Nuclear Corp. v. United States, 912 F.2d 1432 
     (Fed. Cir. 1990) (where mining company invested $5 million to 
     explore for uranium on tribal lands in reliance on Interior 
     Department approval, company could not be expected to foresee 
     Interior's decision six years later to allow tribe to cancel 
     the land claims, and decision worked a compensable taking).
       Finally, H.R. 1872 does not ``substantially advance'' its 
     stated regulatory goal: securing the privatization of 
     INTELSAT and Inmarsat. See Lucas, 505 U.S. at 1016. To the 
     contrary, by setting the bar as high as it does, the bill 
     guarantees that privatization will fail and that COMSAT will 
     be expelled from the U.S. market. Congress may legitimately 
     decide that it no longer wants COMSAT to serve its historic 
     role. But if it does so, it is required by the Fifth 
     Amendment to compensate COMSAT's shareholders for the capital 
     they have put in public service at the government's request.
       Please let us know if you seek further legal counsel from 
     WLF on this issue.
           Sincerely,


                                              Daniel J. Popeo,

     General Counsel.
                                  ____


               [From the Washington Times, Apr. 27, 1998]

                    Deregulation or Plain Old Theft?

                        (By Nancie G. Marzulla)

       More than 30 years ago, hundreds of Americans invested in 
     an idea: that communications satellites could benefit their 
     nation and the world. The result was COMSAT, a Maryland-based 
     shareholder-owned company that successfully launched the 
     United States to the apex of the satellite industry.
       Today, however, if a bill now being considered in Congress 
     passes, these investments will be in jeopardy. Some in 
     Congress and elsewhere seem to have forgotten the 
     Constitution's Fifth Amendment prohibition against 
     uncompensated ``takings.'' In their quest for deregulation, 
     they've proposed federal legislation that could end up 
     costing the U.S. Treasury hundreds of millions, if not 
     billions, of dollars to cover COMSAT's takings claims.
       In the process, these ``takers'' would be sending a clear 
     message to current and future investors: Risk your money, but 
     don't

[[Page H2842]]

     expect the government to play by the rules if your investment 
     pays off. With that kind of federal attitude, what sane 
     investor would risk their hard-earned capital on today's 
     fledgling companies that take huge financial and 
     technological risks at the request of the government, as 
     COMSAT did in the 1960s.
       In the Communications Satellite Act of 1962, Congress 
     commissioned COMSAT to ``establish in conjunction and in 
     cooperation with other countries, as expeditiously and 
     practicable, a commercial communications satellite system.'' 
     At the time, this task was recognized to be a risky financial 
     and technological undertaking. Congress's mandate led to the 
     creation of the International Telecommunications Satellite 
     Organization (INTELSAT), an international consortium that now 
     includes some 140-member countries. A similar international 
     organization, the International Mobile Satellite 
     Organization, or ``Inmarsat'' was formed in 1978.
       As the U.S. representative to INTELSAT and Inmarsat, COMSAT 
     has been bound by those organizations' operating agreements 
     which (among other things) obligate COMSAT to meet all of 
     INTELSAT and Inmarsat's capital investment calls. Moreover, 
     COMSAT must seek FCC approval for every investment.
       In exchange for living within these constraints, COMSAT was 
     afforded an opportunity to earn a reasonable return on its 
     investments. It also was given exclusive franchise in selling 
     services using INTELSAT AND Inmarsat satellites for 
     communications to and from the United States. Access has 
     never been a problem for customers: these services are 
     energetically offered to all at non-discriminatory rates.
       During the 1960s and 1970s, INTELSAT and Inmarsat 
     satellites were the only ``birds'' in the sky American 
     telephone companies and television networks needing satellite 
     services had to purchase them from COMSAT. But since the 
     early 1980s other companies have been allowed to launch 
     competing communications satellite systems. These systems 
     have been extremely successful.
       In addition to the growth of new, rival service providers, 
     new technologies also have created more competition for 
     satellites. For example, higher capacity fiber-optic undersea 
     cable has become the favored mode of transmitting phone calls 
     internationally. Today, 117 countries are directly connected 
     to the United States by fiber-optic cable.
       As a result of these technological and marketplace 
     development, COMSAT now has only 21 percent of the market for 
     international voice communications and about 42 percent of 
     the market for international video transmission.
       There are still those who inexplicably view COMSAT, a 
     relatively small player in the communications marketplace, as 
     a monopoly despite the fact that numerous suppliers serve the 
     market today. Believers in the ``monopoly power'' of COMSAT 
     have introduced a bill in Congress that would, among other 
     things:
       Authorize customers to abrogate their existing contracts 
     with COMSAT;
       Require the immediate surrender of allocated orbital slots 
     (essentially a parking place for a satellite in outer space) 
     not in actual commercial use, despite the millions of dollars 
     COMSAT, INTELSAT, and Inmarsat have invested in satellites 
     intended for those slots;
       Terminate existing services that COMSAT is providing to 
     customers, as well as restricting the company's participation 
     in new services (such as Internet access, high-speed data and 
     interactive services) thus depriving Americans of advanced 
     computer and video technologies.
       Maybe some in Congress believe that this is the definition 
     of progressive, fair and pro-competition legislation, but 
     COMSAT and its shareholders aren't laughing about a bill that 
     would knock this competitor out of the market in the name of 
     competition.
       This bill would breach COMSAT's implicit but enforceable 
     regulatory compact with the federal government. As the 
     Supreme Court recently said when enforcing promises made by 
     bank regulators to savings and loans institutions, Congress 
     is free to change its policies and, as a result, to break a 
     pledge to a private party. But if Congress does so, it must 
     ``insure the promise against loss arising from the promised 
     condition's nonoccurrence.''
       The government also would have to compensate COMSAT for 
     taking the company's property in violation of the Fifth 
     Amendment's guarantee against uncompensated takings. The U.S. 
     is liable for just compensation not just when it physically 
     seizes real or personal property but also, as Justice Holmes 
     said in 1922, ``if regulation goes too far it will be 
     recognized as taking.''
       Clearly, it is going ``too far'' to require COMSAT and its 
     investors to bear the burden of a congressional decision to 
     reverse course and exclude treaty organizations and their 
     signatories from almost the entire field of satellite 
     communications. If Congress were to order this, it would have 
     to compensate companies for investments they made at the 
     government's behest and approval--investments made 
     specifically to solidify the U.S. as the satellite industry 
     leader.
       The provision that would invalidate existing contracts is 
     even a more obvious and aggressive taking of private 
     property. It is well recognized that contract rights are 
     property rights, protected by the Constitution. Congress can 
     no more abrogate existing contracts than it can take away 
     tangible personal property without just compensation. Yet 
     this bill would void current and future agreements negotiated 
     between COMSAT and other parties.
       Of course, deregulation must be pursued with vigor. At the 
     same time, promises governments made to private companies, 
     and on which investors based their investment, must be kept. 
     Deregulation cannot be an excuse for the uncompensated 
     confiscation of private property.

  Mr. Chairman, the service restrictions of H.R. 1872 are not only 
unconstitutional, they are anticompetitive and they are anticonsumer. 
They will remove a competitor from the marketplace, and therefore, they 
will then deny consumers, including the U.S. Government, an alternative 
service provider. COMSAT's competitors will have succeeded in ejecting 
a major player from the communications marketplace. They are the only 
beneficiaries of these provisions.
  So, Mr. Chairman, we also put satellite reform, but we must proceed 
in a way that is fair to the customers, fair to COMSAT, and above all 
else consistent with the Constitution. We must avoid enacting a law 
that is found to be unconstitutional and that exposes the Treasury to a 
multibillion-dollar liability for damages.
  Mr. Chairman, I ask my colleagues to support this amendment.
  Mr. BLILEY. Mr. Chairman, I rise in opposition to the amendment of my 
good friend, the gentlewoman from Maryland (Mrs. Morella).
  Before I begin, let me share with my colleagues an interesting bit of 
history. The phrase ``red herring" comes from the practice of dragging 
a smoked and, thus, red herring across the path of a track of dogs 
trying to follow a scent. The idea was to use the scent to distract 
them from that prey.
  In this case, the taking issue is being used in an attempt to 
distract Members from the real issue, which is that without incentives 
that could cost the intergovernmental satellite organizations money, 
they will never privatize in a procompetitive manner.
  The amendment is an attempt to tie down the FCC through litigation. 
Currently, if COMSAT has a takings claim, it can sue the FCC. Just like 
anyone else, if there were a taking, they could go to court. Why do 
they want this amendment? To tie the bill in knots through litigation, 
that is why.
  The amendment offered in committee by the gentleman from Maryland 
(Mr. Wynn), the colleague of the gentlewoman, was offered which also 
sought to cause fundamental problems for the bill. The gentleman from 
Maryland (Mr. Wynn) failed by a vote of 37-to-8. This one dresses the 
knife up in takings clothing possibly in the hope that many of my 
conservative colleagues who care about takings will join the 
gentlewoman in attacking our carefully crafted legislation.
  I have to tell my colleagues that I do not think the amendment of the 
gentlewoman from Maryland (Mrs. Morella) is designed to fix the takings 
problem. It is designed to protect her constituent COMSAT. And it does 
that well. It says that the FCC shall not restrict the activities of 
COMSAT in a manner which would create liability for the U.S. under the 
fifth amendment, which would mean COMSAT could go to the courts as soon 
as the FCC issued a decision and tie the bill up for years. COMSAT's 
whole strategy is to delay reform. This would play right into their 
hands.
  What the amendment does not take into account is that we already have 
a Constitution with the fifth amendment that protects against takings. 
There is also a remedy. Under current law, if they think there is a 
taking, they can sue, but under the same laws applicable to any other 
company.
  Once again, the intergovernmental satellite organizations and the 
U.S. affiliate, COMSAT, want to continue the special advantages they 
have always had.
  Now, I thought I would take a moment to address the takings issue 
itself. The committee has thoroughly analyzed that there are no 
takings. CRS has looked at the issue. They found that ``a review of the 
bill's text reviews no provisions likely to cause constitutional 
takings.'' The committee's analysis, which quotes at length from the 
CRS, is available in the committee report.
  I would now like to read a letter dated May 5 from the Washington 
Legal Foundation to me.

       Dear Chairman Bliley, this is in response to your letter 
     requesting a clarification of

[[Page H2843]]

     WLF's views regarding the Communications Satellite 
     Competition and Privatization Act in light of concerns that 
     WLF's views had been mischaracterized.
       I want to make it very clear that the Washington Legal 
     foundation does not in the any way oppose your bill or in any 
     manner support amendments to your bill. WLF does not engage 
     or partner in any lobbying activity whatsoever. In fact, some 
     members of the WLF's own advisory boards disagree with the 
     WLF's legal analysis of the takings clause in connection with 
     this legislation.
       Unfortunately, when we sent our analysis to Members who 
     requested it, we did not anticipate that it would be used as 
     the basis for any legislative tactics or strategy which would 
     oppose your satellite reform bill. We take no legislative 
     position whatsoever. We are grateful for your leadership on 
     free enterprise issues and appreciate the opportunity to 
     clarify this matter for you. Sincerely, Daniel J. Popeo, 
     General Counsel.

  Mrs. MORELLA. Mr. Chairman, will the gentleman yield?
  Mr. BLILEY. I yield to the gentlewoman from Maryland.
  Mrs. MORELLA. Mr. Chairman, if in fact there is no takings problem, 
then what is wrong with the amendment?
  Mr. BLILEY. Reclaiming my time, the gentlewoman must not have been 
listening. They have the right under the Constitution now by the fifth 
amendment. What this does is it puts a chill on the FCC. As soon as 
they do anything, they will can run into court and tie them up for 
years. That is what the strategy of COMSAT is, delay, delay, delay, 
hold their monopoly, get those 68 percent profits as long as they 
possibly can; and if we are forced to privatize, set it up in such a 
way that all we have done is change the name, but we still have the 
monopoly.
  Mr. WYNN. Mr. Chairman, I move to strike the last word.
  Mr. Chairman, I would like to thank my colleague, the gentlewoman 
from Montgomery County, Maryland, (Mrs. Morella) for her leadership on 
this issue. It is a very important issue to one of our own companies, 
COMSAT.
  The question that is posed by this amendment is simply this: 
deregulation or plain old theft? This the question was posed by Nancie 
Marzulla, president of the Defenders of Property Rights, in an op-ed 
piece in the April 27, 1998, edition of the Washington Times.
  In her piece they state clearly that the sponsors in the quest for 
deregulation have proposed Federal legislation that could end up 
costing American citizens hundreds of millions, if not billions, of 
dollars to cover COMSAT's takings claims. That is right, takings 
claims.
  As reported by the Committee on Commerce, this legislation contains 
restrictions that will limit the services that COMSAT can offer using 
its satellite assets. The restrictions take effect if rigid milestones 
are not met for privatization. The critical point, however, is that 
these milestones are not milestones within the control of COMSAT; they 
are milestones beyond their control, in fact, in the control of 
international organizations.
  COMSAT is urging and helping move toward privatization, but they 
cannot control the pace of privatization. Nonetheless, they would be 
subject to unfair restrictions if our imposed milestones are not met. 
And I do not believe that this is fair.
  I know we have constitutional scholars in this body, and I call upon 
them today. This is an unconstitutional taking. COMSAT is a private, 
investor-owned company. COMSAT's contract rights are property; and 
under the fifth amendment of the Constitution, the government simply 
cannot take this property, which is what this legislation does, without 
paying for it; and I fully expect that COMSAT will be filing claims on 
this issue.
  Should this occur, the money the U.S. taxpayers will have to pay as a 
result of litigation will far exceed anything we are contemplating now 
in the context of our tobacco concerns. The amendment being offered by 
my colleague today will significantly reduce our liability and that of 
our constituents by eliminating the takings provisions for the bill's 
restrictions on COMSAT. The amendment does the right thing by allowing 
COMSAT to continue to use its property, and I urge our Members to 
support this amendment.
  Now, I applaud the purpose of the chairman with this legislation, and 
I think the intent is laudable and he has worked very hard. However, 
the underlying theory of this legislation is quite flawed. The sponsors 
of this bill would have us believe that COMSAT is a huge, untenable 
monopoly. This is simply not true.
  In fact, there are more than 20 current competitors to COMSAT, with 
more than $14 billion in investments and $40 billion in stock value. If 
this is not competition, I do not know what is. I do not think we can 
ask for much more. But let us consider further.
  In 1998, COMSAT controlled 70 percent of the international voice 
traffic. Today they have only a 21 percent share. Significantly, 
COMSAT's market share has declined. In 1993, COMSAT controlled 80 
percent of the video market; today it controls 42 percent. Clearly, 
competition is emerging under our present structure. We do not need 
this piece of legislation to promote competition.
  But finally and most telling, on April 28 of this year, the FCC 
declared that COMSAT is nondominant in most of its market, thus 
authoritatively eliminating the argument that we have to get rid of 
COMSAT or punish COMSAT because it is an egregious monopoly.
  Despite these facts, however, the sponsors of the legislation, so 
intent on privatizing this industry, would subject our constituents to 
potentially billions of dollars in liability as a result of litigation.
  I think Ms. Marzulla put it best in her op-ed piece when she said, 
``Deregulation must be pursued with vigor. At the same time, promises 
governments made to private companies and on which investors based 
their investment, must be kept. Deregulation cannot be an excuse for 
the uncompensated confiscation of private property.'' And that is what 
we are debating here today.
  I urge my colleagues to support and adopt the Morella amendment. I 
believe that this is a proper move and an appropriate step to making 
this bill something that we can support.
  Mr. WELDON of Florida. Mr. Chairman, I move to strike the requisite 
number of words.
  Mr. Chairman, I too oppose the amendment offered by the gentlewoman 
from Maryland (Mrs. Morella). The Morella amendment is premised on the 
notion that H.R. 1872, as reported out of the committee, would work a 
taking of COMSAT's property. This proposition seems to me to be 
entirely unfounded.
  To begin with, I am at a loss to see any property that would be 
impacted by the bill. The term ``property'' has a particular legal 
meaning. It is not just a unilateral expectation, as the opponents of 
this bill have suggested, but rather an entitlement based upon a 
mutually explicit understanding.
  The fact that COMSAT or its shareholders may have made investments 
with the expectation that COMSAT would continue to operate as the 
monopoly provider of INTELSAT and Inmarsat's services in the United 
States does not give them a property interest in those investments. 
Half the equation is missing.
  To constitute property protected by the fifth amendment, COMSAT would 
need to show that these expectations were based upon a mutuality of 
understanding sufficiently well-grounded to create an entitlement 
protected at law. Of course, any such claim would collide headlong with 
the reality that when Congress established COMSAT in the 1962 Satellite 
Act, it expressly reserved the right to modify COMSAT's role in the 
market at any time.

                              {time}  1230

  To the extent that COMSAT and its shareholders made investments based 
on the provisions of the Satellite Act, they did so presumably knowing 
of the risk that Congress might some day do so. It is absolutely 
baffling to me that COMSAT could think that Congress created an 
entitlement, a property interest, by the terms of the Satellite Act. In 
any event, even if COMSAT had identified a protected property interest 
that would be impacted by H.R. 1872, the legislation hardly would reach 
the level of a regulatory taking, quote-unquote, under the Supreme 
Court's cases.
  The bill will without a doubt adjust the benefits and burdens of 
economic life, quote-unquote, and end one of the last government 
protected monopolies in the telecommunications field. It would not, 
however, take any tangible property or vitiate any specific right or 
assurance conferred by the government. I therefore urge the Members to 
oppose this amendment.

[[Page H2844]]

  Mr. DINGELL. Mr. Chairman, I move to strike the requisite number of 
words.
  (Mr. DINGELL asked and was given permission to revise and extend his 
remarks.)
  Mr. DINGELL. Mr. Chairman, the amendment gets to the nub of the 
question. It says this, and I can understand why the opponents of the 
amendment are so distressed about it, because it says,

       In implementing the provisions of this section, the 
     Commission shall not restrict the activities of COMSAT in a 
     manner which would create a liability for the United States 
     under the Fifth Amendment to the Constitution.

  What is wrong with that amendment? All it says is that the Commission 
has to respect the Constitution and cannot create a liability on the 
taxpayers because we have engaged in an unconstitutional taking or 
because we have violated the provisions of the Tucker Act.
  I want my colleagues to listen to what the Washington Legal 
Foundation said. By the way, the gentleman from Virginia (Mr. Bliley) 
is a major contributor to that agency and has sent them a wonderful 
letter in which he told them how he wanted to support the good work of 
that foundation. Here it is. This is what they had to say:

       In response to your written request for counsel, the 
     Washington Legal Foundation has undertaken a legal analysis 
     of H.R. 1872. After the consideration of H.R. 1872, WLF has 
     concluded that H.R. 1872 would indeed effect a compensable 
     taking of private property belonging to COMSAT, as well as a 
     material breach of the terms of the compact between the 
     United States and COMSAT. WLF's conclusion should not be 
     construed as endorsement or opposition to H.R. 1872.

  They are giving you a clear warning. The amendment says that the 
Commission cannot subject your constituents and mine to that kind of 
liability. I would want to observe something else. What this bill does 
is to impair contract rights of COMSAT and to impair the value, the 
good will and the corporate assets of that corporation.
  The Supreme Court has been very clear on this point. They have said 
that the most significant factor in determining whether economic 
regulation constitutes a taking is the extent to which, and I quote now 
from the Supreme Court, ``the regulation has interfered with the 
owner's reasonable investment-backed expectations.'' That is from the 
Penn Central case, Penn Central Transportation Company v. The City of 
New York, 438 U.S. 104, 124, dated 1978.
  They went on to say some other things which I think are important. 
They went on to say, ``The simple words,'' and I am now interpolating, 
the Supreme Court said ``that Congress may at any time alter, amend and 
repeal this act * * * cannot be used to take away property already 
acquired * * * or to deprive'' a private ``corporation of the fruits 
already reduced to possession of contracts lawfully made.''
  We are here with considerable diligence in this legislation 
interfering in the contract rights of COMSAT. COMSAT's officers are, at 
the proper responsibility and under the insistence of their 
shareholders, most assuredly going to file suit under the Tucker Act. I 
can offer my colleagues firm assurances that the judgment that will be 
awarded to COMSAT will be most generous and it will be done at the 
expense of your constituents unless this body has the wisdom to adopt 
the amendment offered by the gentlewoman from Maryland.
  It should be observed, this does not do anything, the amendment, 
except to assure that there will be no liability imposed on our 
constituents because of an unconstitutional taking by this body. I urge 
my colleagues to keep that thought in mind. You have a responsibility 
to pass legislation in this body which observes the Constitution, but 
which also does not subject our taxpayers to a liability for wrongful 
acts taken by this Congress.
  I would urge my colleagues to keep carefully in mind that the sums 
here are not piddling. They amount to billions of dollars. My question 
to my colleagues, Mr. Chairman, is, do you want the responsibility on 
your soul and on your conscience of having dissipated this enormous sum 
of money and subjected your taxpayers to that kind of liability?
  Mr. COX of California. Mr. Chairman, I move to strike the requisite 
number of words.
  Mr. Chairman, I think we have just heard from the ranking member on 
the Committee on Commerce that he is prepared to accept as a norm for 
debate and decision in the House in futuro the decisions of the 
Washington Legal Foundation. I think that will actually help us a great 
deal here in our deliberations in the House. I think he is quite right, 
the Washington Legal Foundation is a fine outfit. I will look forward 
to holding the ranking member to his new principle.
  But the Washington Legal Foundation, which he sings the praises of, 
has written us a letter subsequent to the one that he is describing 
that says, ``I want to make it very clear, the Washington Legal 
Foundation does not in any way oppose this bill or in any manner 
support amendments to this bill.'' Specifically, the letter was written 
so that we would all know that they oppose this amendment. That is the 
position of the Washington Legal Foundation.
  Furthermore, the Congressional Research Service has written us on the 
same point telling us that it is their legal analysis that the impacts 
described in the gentleman's presentation are not likely to support 
successful takings claims. That is the view of the Congressional 
Research Service.
  So the question is not whether we are going to expose taxpayers to 
spending huge amounts of money because Congress did something wrong. 
This amendment would expose taxpayers to huge expenditures of their 
hard-earned money because Congress did something right, which is to 
take away the monopoly powers that this bill in fact takes away from 
COMSAT. This is not a Fifth Amendment taking.
  Private actors can be disadvantaged in any number of ways by 
governmental action. A private landowner can discover that the value of 
her real estate is reduced to zero because of the land being declared 
essential habitat. That is an example of governmental action that ought 
to be considered a taking and the landowner in that case ought to be 
fairly compensated. But here our private actor is not some innocent 
landowner trying to recover from government regulation. This is a 
private company seeking to compel continued government protection for 
the unique monopoly powers, the privileges and benefits that flow from 
those monopoly powers that it enjoys. This is an anticompetitive policy 
that is in fact hostile to true property rights. In fact, current law 
unfairly restricts the ability of private companies to compete. Instead 
it guarantees to COMSAT's investors monopoly-sized returns on their 
investments.
  What property does COMSAT have that it alleges is being taken? It 
suggests that takings claims are raised by the ``fresh look'' 
provisions of this bill. That is the language that enables the FCC 
beginning in 2000 to permit users or providers of telecommunications 
services to renegotiate contracts they signed with COMSAT prior to the 
repeal of its statutory monopoly as the only U.S. company authorized to 
sell INTELSAT services. In other words, COMSAT wants to retain its 
monopoly powers and anything less would be considered a taking.
  The United States Supreme Court has repeatedly ruled that persons 
doing business in a regulated marketplace should expect the legislative 
scheme to change from time to time, even in ways that might be 
unfavorable to their interests. This principle was most recently 
reiterated by the Supreme Court in its unanimous 1993 decision in 
Concrete Pipe, which quoted from the Court's 1958 decision in FHA v. 
The Darlington. Here is what the Court said. ``Those who do business in 
the regulated field cannot object if the legislative scheme is 
buttressed by subsequent amendments to achieve the legislative end.''
  Even if COMSAT were to pretend that it is not a participant in a 
heavily regulated marketplace, and, that would be a tough argument for 
COMSAT to make because they testified before Congress just last year 
that their company is hamstrung by a burdensome regulatory regime, 
Congress took special care when it created COMSAT in 1962 to let 
investors know that there would be no guaranteed return on their 
investment. These days COMSAT gets an 18 percent guaranteed rate of 
return. These days INTELSAT gets immunity from antitrust lawsuits. 
There is no doubt that H.R. 1872 will impair

[[Page H2845]]

COMSAT's ability to obtain monopoly rents in the international 
satellite marketplace, and that is the purpose of the bill.
  While the bill does end an obsolete and outdated international 
monopoly, it does not deprive COMSAT of the right to compete in the new 
competitive marketplace. Instead, COMSAT will be forced to compete. Nor 
will H.R. 1872 bar COMSAT from providing service to the same customers 
to whom it presently provides service. But apparently in COMSAT's view, 
the company should be compensated by U.S. taxpayers if it is not 
guaranteed anything less than the absolute right to sell its services 
at inflated monopoly prices. That is a bad idea. Therefore, this 
amendment is a bad idea. I urge my colleagues to reject it.
  Ms. ESHOO. Mr. Chairman, I move to strike the requisite number of 
words. Mr. Chairman, this amendment is searching for a problem that 
does not exist. The argument that takings is an issue seems tenuous at 
best. The gentleman from California (Mr. Cox) I think has done a superb 
job of rolling out the case in detail on this issue because it defines 
contracts as property, which I think is a new twist. I have not heard 
of that one before.
  I would congratulate those that are offering the amendment and 
supporting it for coming up with such a unique take on this. But the 
argument that takings is defined as property I think is faulty. 
Furthermore, removing the FCC's ability to apply service restrictions, 
or a fresh look, actually cuts out the heart of the bill. These 
provisions are incentives to privatization and they are necessary 
incentives and need to be retained. I would like to believe that COMSAT 
and INTELSAT will act in all of our best interests without any 
prodding, but that does not seem to be the case, nor does it seem to be 
realistic.
  As I warned in my opening statement, this amendment is designed to 
kill the bill, not to amend it or to improve it. If Members of the 
House wish to support and protect a monopoly, then they should vote for 
this amendment. If they are in fact pro-competition and pro-
privatization, they should vote to oppose the amendment.
  Mr. KLINK. Mr. Chairman, I move to strike the requisite number of 
words.
  (Mr. Klink asked and was given permission to revise and extend his 
remarks.)
  Mr. KLINK. Mr. Chairman, I rise in support of the Morella amendment. 
The previous speaker, a dear friend of mine, had mentioned, and I, like 
her, am not an attorney but I think it is very clear that contracts are 
property. I think that the Supreme Court made that decision about a 
century ago. Beyond that, this legislation may or may not lead to 
privatization and competition in international communications. I do not 
think that we are all very sure if exactly that is going to happen. I 
have my doubts whether it will or not.
  I think the approach has been backwards. But whether or not this 
legislation succeeds in its goal, one thing is clear, that your 
constituents will end up footing the bill. We could pass this bill, it 
may fail to open up telecommunication markets in foreign lands, and 
still could end up spending billions of dollars of your taxpayers' 
money.

                              {time}  1245

  We could end up with a very extensive status quo in 
telecommunications.
  Many of the investment decisions that COMSAT has made over the years 
have been made at the urging of the United States Government, and if we 
look at comments made by Nancie Marzulla, who is the President of 
Defenders of Property Rights, she said that Congress would have to 
compensate companies for investments they made at the government's 
behest and approval, investments made specifically to solidify the U.S. 
as the satellite industry leader.
  Similarly, if we take a look at comments made by the Washington Legal 
Foundation, if adopted, H.R. 1872 would effect a substantial 
compensable taking of private property, and yet this legislation will 
take away COMSAT's business, will force them to renegotiate contracts 
that do reduce the value of their investments and really open up the 
United States Government to liability for damage for takings of COMSAT 
property. Those contracts are real property.
  Now I am reminded a little bit in this legislation of an old movie. I 
do not know how many of us in here remember the old movie ``Blazing 
Saddles.'' They had a sheriff in there, Clevon Little, who held a gun 
to his own head and said, as my colleagues know, ``If you don't let me 
out of here, I'm going to shoot myself.'' That is really what this bill 
does. If my colleagues view this as a United Nations of satellites, we 
are holding a gun to our dear friend, Billy Richardson's head. And I 
refer to him as ``Billy'' only because I have great affection and 
friendship for the U.N. Secretary. It is like us holding a gun to his 
head and saying to the other countries, if they do not do what we want 
them to do, we are going to shoot our own representative.
  Mr. Chairman, that would be foolish, and I think that that is what 
this amendment tries to correct.
  While the sanctions imposed by this bill may not work, they will cost 
money.
  My colleagues should support the Morella amendment, block the 
sanctions that really do amount to a taking of property, try to save 
our constituents money, try to keep the United States satellite 
industry viable and competitive.
  Mr. DINGELL. Mr. Chairman, will the gentleman yield?
  Mr. KLINK. I yield to the gentleman from Michigan.
  Mr. DINGELL. Mr. Chairman, I just want to ask a question to my 
colleagues on the other side.
  They said there is no taking here, and so we need to have no fear on 
that. The gentlewoman from Maryland offers an amendment which says 
there can be no taking. Well, if they do not intend to do a taking, if 
the amendment says there is no taking, if in fact there is no taking, 
what is wrong with the amendment?
  I would think those who say there is going to be no taking here would 
accept this amendment with vast enthusiasm and would be speaking for 
it, not against it. I am curious. What is it that they are trying to 
tell us; that there is a taking and so they do not want the amendment, 
or that there is not a taking so the amendment is not needed? I do not 
know.
  But I do know one thing. If there is a possibility of the taking, we 
better doggone well see to it that we adopt the amendment so that we do 
not impose upon our constituents $6 or $7 billion of liability because 
of the unwise action in this Chamber today.
  Mr. KLINK. Mr. Chairman, I thank the gentleman from Michigan.
  Mr. TAUZIN. Mr. Chairman, will the gentleman yield?
  Mr. KLINK. I yield to the gentleman from Louisiana.
  Mr. TAUZIN. Let me first commend the gentleman on his statement. I 
cannot think of a better metaphor than the one he gave us that we are 
literally telling a U.S. company, ``We're going to shoot you and your 
customers if these international organizations don't do what we want.''
  Do my colleagues know that in the bill is a provision that says even 
if they do what we want, they still have to shoot themselves? I will 
talk to my colleagues about that one in a minute.
  Mr. KLINK. Mr. Chairman, I thank the gentleman for his insight, and I 
thank the gentleman for his leadership on this issue.
  Mr. TAUZIN. Mr. Chairman, I move to strike the requisite number of 
words.
  Mr. Chairman, first let me say that I am pleased that the Washington 
Legal Foundation sent a letter of clarification to the chairman, the 
gentleman from Virginia (Mr. Bliley). They should have because they are 
503(c), they cannot lobby on a bill, they did not mean their letter to 
the gentlewoman from Maryland (Mrs. Morella) to be a lobbying effort. 
But notice they have not repudiated what they said. They have not said, 
we change our mind, we change our opinion.
  Here is what they said this bill does, and Members who are listening 
in their offices or wherever they may be, I hope they pay close 
attention to this. This is what the Washington Legal Foundation said 
this bill does without the Connie Morella amendment:
  It says that this bill provides that if INTELSAT and Inmarsat do not 
privatize quickly enough, as this bill hopefully gets them to do, this 
bill will punish COMSAT by telling COMSAT, this U.S. private company, 
that they

[[Page H2846]]

no longer can offer new services to their customers. All they can offer 
them is the old services they used to give them.
  Well, as the Washington Legal Foundation points out, those core 
services are illusory because there are changes in technology causing 
those markets to disappear. If they cannot offer the new services, who 
the heck wants to do business with them?
  This bill literally says to COMSAT and its customers, ``Quit doing 
business, shoot yourself in the head because you can't offer the new 
services that all the other companies will be offering its customers.'' 
Why? Because Inmarsat and INTELSAT did not move fast enough to 
privatize, even though they could not control that.
  But it gets even worse. The bill also says that even if INTELSAT and 
Inmarsat privatize at the speed of light, if they are faster than a 
speeding bullet and stronger than a locomotive, and they get to this 
world of privatization faster than the chairman wants; even if they do 
that, this bill says that COMSAT's customers no longer have to keep 
their contracts. They can renegotiate them with whenever they want. 
They can leave doing business with COMSAT anytime they want.
  Now put these two provisions together, and we really get the sense of 
what this is all about. This bill says in effect that COMSAT may not be 
able to offer its customers new services and, by the way, they can get 
out of their current contracts. Now what do my colleagues think is 
going to happen? If this bill passes without the Morella amendment, in 
fact, COMSAT is going to lose those customers.
  Why? One, we just abrogated their contracts; and, number 2, they just 
found out that COMSAT may not be able to offer them any new services. 
Why would someone stay with a company that came out with new services 
when Congress just told them they do not have to keep their word, they 
do not have to live up to the terms of their contract? Why would one 
stay? They would leave.
  And guess what? That is exactly what the people who are behind these 
two provisions want. Why? Because they are competitors of COMSAT. They 
would like to have those customers, and so they are asking us in 
Congress to rearrange the customer base, to send customers away from 
COMSAT and to send them to their competitors. That is exactly what is 
behind these two amendments.
  And if we do that, if we do that, the Washington Legal Foundation 
warns us, warns us very clearly, that such sweeping congressional 
abrogation of the private contract rights of a single company, without 
any judicial determination of wrongdoing, may be unprecedented in U.S. 
history. What an awful taking. We do not even get to go to court. 
Congress says, ``Your property is gone.'' Congress says, ``Your 
contracts are no good.'' Congress says, ``The company can't give you 
any more services.'' Congress destroys a U.S. company. What an 
unprecedented taking in U.S. history.
  And the Washington Legal Foundation concludes by saying,

       Congress may legitimately decide it no longer wants COMSAT 
     to serve its historic role, but if it does so, it is required 
     by the fifth amendment to compensate COMSAT's shareholders 
     for all the immense capital they have put in public service 
     at the government's request.

  In short, we, the taxpayers and the citizens of this country, will 
have an enormous legal bill to pay because we in Congress incurred that 
debt, we in Congress abrogated contracts, we in Congress took away 
private property without providing compensation.
  I suggest to my colleagues if there is going to be no taking under 
this bill, why not pass an amendment? If there is not going to be 
taking under this ``fresh look'' approach under this restricted service 
provision, if these contracts really will not get abrogated, if none of 
this will really happen, then what is wrong with the Morella amendment 
which says do not do it if it takes property under the fifth amendment. 
Do it only if, and only if, we are not taking property without 
compensation as a violation of the fifth amendment.
  This amendment makes this a good bill. I urge my colleagues to adopt 
it for the sake of the taxpayers and the citizens of this country; more 
importantly, for those of us in Congress who have never been asked to 
vote to abrogate private contracts.
  Mr. KLUG. Mr. Chairman, I move to strike the requisite number of 
words.
  Mr. Chairman, I rise in opposition to this amendment and I want to, 
if I can, address issues that have been raised by the last three 
speakers, the gentleman from Pennsylvania (Mr. Klink), the gentleman 
from Michigan (Mr. Dingell), and the gentleman from Louisiana (Mr. 
Tauzin).
  Now for everybody who is sitting back home, in their office, in the 
Chamber, and really do not understand what we are arguing about in 
terms of satellite communication, let us make it very simple. There is 
a monopoly today, and today we are trying to end the monopoly. That is 
what this entire debate is all about.
  Now contracts are not in perpetuity. The United States over the 
course of time makes lots of contracts. We buy everything from 
airplanes to railroad tracks to nuclear weapons and paper clips and 
staplers and cars and everything else in the world. We do not go to 
General Motors, say we are only going to buy cars from General Motors 
for the rest of our lifetime. We make a deal, the deal ends, and we 
move on. And that is essentially the principle we are discussing today: 
Can we end the deal with COMSAT?
  Now everybody has said for the last 5, 6, 7 years that the monopoly 
should be reformed, and guess who leads the opposition today to this 
amendment? It is the monopoly itself because it wants to hold onto 
power, it wants to eliminate competition, and it wants to keep all the 
money for itself. Very simple rule in economics.
  Now the gentleman from Pennsylvania (Mr. Klink) said, the last phrase 
that he used was to say to keep the U.S. satellite industry viable and 
competitive. There is no competition today. There is only one guy who 
calls all of the shots. That is why every private satellite company 
that wants to compete supports this bill, and it is why every major 
user of satellite communications, the folks who buy stuff from COMSAT, 
want the bill; because they want a choice. They understand this, 
anybody who is listening to this debate today.
  There are choices about what television stations to watch, what 
newspapers to buy, where to buy groceries, where to fill up the car 
with gasoline. And today, people who use satellite communication 
services, the purchasers, do not have any competition; it is a 
monopoly.
  Now as to the heart of the amendment that this constitutes a taking, 
keep in mind that the fifth amendment of the United States already 
provides protection against anybody who thinks that their property has 
been unjustifiably seized and who wants compensation from the United 
States Government. There is a takings protection, and obviously 
everything that Congress does has to abide by the Constitution, and 
therefore COMSAT and anybody else we pass legislation affecting today 
has the ability to appeal back to the fifth amendment.
  Now, if the fifth amendment already protects them, then they do not 
need this takings provision. If they need a takings provision, then it 
is not applied to in the fifth amendment. And they are essentially 
asking us to pass something that is already redundant and in fact is 
enshrined in the basic document that this body has to live by.
  So that raises the question who wants the takings provision in here? 
And open up the mystery box, and reach inside, and who is inside there 
with a business card? It is COMSAT; because what they want to say is, 
``You can't pass go, you can't force competition in the industry unless 
the FCC thinks it will do so.'' And so they can delay, by essentially 
saying there cannot be a taking; so the FCC has to go to court to prove 
that it is not a taking, and if it is not a taking, then we can go 
forward.
  It is a delaying tactic. It is legal jargon thrown out there, with no 
sense of seriousness, and we have got one opinion that says there may 
be a remote chance that there is a taking.
  Now the Congressional Research Service that does work for Congress to 
essentially figure out legal issues has said there is no taking, and 
our best legal experts inside Congress itself say that there is 
absolutely no reason for this taking provision because they are

[[Page H2847]]

protected by the fifth amendment; and secondly, because there is no 
takings here whatsoever. We are simply saying, ``You've had an 
exclusive deal for decades, you're the only people who run the 
satellite business in this country, and we're saying in Congress it 
comes to an end. It's over.''
  The only way we are ever going to have competition for satellite 
providers and purchasers of satellite services is by making sure that 
COMSAT's monopoly comes to an end. And when monopolies come to an end 
anyplace, in the railroads, in the steel industry, the kind of debate 
we are now having about the computer industry in this country, the 
basic underlying economic theory is that competition drives prices 
down, it does not raise them.
  And so if we take the argument of the gentleman from Pennsylvania 
(Mr. Klink) to its logical conclusion, the only way we can have 
competition and lower prices in the marketplace is if the government 
gives everybody a monopoly, and then not only do we give them a 
monopoly, we give them a monopoly for eternity. They can never have any 
competition because that is a bad thing.
  So for those of us in this body who are interested in competition, 
who are interested in fundamental economics, the choice that is good 
for the American consumer, then I urge the defeat of this amendment 
because it is only a delaying tactic to make sure that a monopoly can 
preserve its power as long as possible.

                              {time}  1300

  Mr. MARKEY. Mr. Chairman, I move to strike the requisite number of 
words and I rise in opposition to the amendment.
  Mr. Chairman, this is not a debate about takings. This is a debate 
about givings. The givings of the American people for 35 years to a 
single company and a single orbiting cartel. The American people gave 
this company a domestic monopoly over resale of INTELSAT and Inmarsat 
services. The American people gave to COMSAT and Inmarsat and INTELSAT 
immunity from antitrust law. The American people gave them privileged 
access to orbital slots and to spectrum. The American people gave them 
access to all of these privileges because there were no other 
companies, there was no other way of doing it; only by using this 
mechanism could we create this industry.
  Over the years, the American people have granted the same 
opportunities to electric monopolies, to local telephone monopolies, to 
long-distance monopolies, to cable monopolies. But we always reserve 
the right, when technological change makes it possible, to introduce 
competition. In fact, within the legislation that was passed in 1962, 
the Congress expressly reserved the right to repeal, to alter, or to 
amend the provisions of the 1962 COMSAT-INTELSAT Act. We reserved to 
ourselves this right, as we always have.
  Now, we can go back in history, all the way back to 1602 when Queen 
Elizabeth had granted to one individual and one company a monopoly on 
playing cards in England. Now, the Parliament ruled, after a point in 
time, that other companies should be able to get into the business of 
selling playing cards in England. It is the famous monopolies case. 
Now, the courts in England ruled that the Parliament had the right to 
have other companies sell playing cards, notwithstanding the original 
monopoly.
  Standard Oil, 1911 in the United States, says, we have got a 
monopoly; the Congress has no right to break up our monopoly. The 
Supreme Court of the United States in 1911 ruled, the Congress has a 
right to break up monopolies, the Antitrust Division of the Justice 
Department has the right to break up monopolies. And every electric 
company, every telephone company, every cable company, every monopoly 
for time immemorial has argued that it is a takings. It is not. It is a 
givings. We gave it to them, and we have the right to take it back with 
reasonable economic regulation, which does not put them out of 
business.
  We are not putting COMSAT out of business. We are allowing other 
companies to get into business, because the reality is that for at 
least the last 15 years, that taking has been COMSAT, INTELSAT and 
Inmarsat blocking other American company's ability to get into these 
markets.
  The taking goes on every day when dozens of companies across America 
do not create jobs because they are denied the opportunity. They have 
had this right taken from them. The consumers do not have lower prices 
because that opportunity has been taken from them. That is what this 
legislation is all about. It is ending the giving, that we have been 
undertaking for 35 years, to a monopoly. That is the privilege of the 
Congress. We have always had this right and we will always retain that 
right.
  So I say to my colleagues, we have a choice. Support for the Morella 
amendment is for a continuation of monopoly, of a global economic 
cartel with COMSAT as its American subsidiary, its American affiliate 
continuing on this tradition of denying American companies and American 
workers the ability to get into these industries the way we shoot to 
dominate the global marketplace.
  I urge a very strong ``no'' on this amendment. For those of us who 
believe in competition, for those of us who believe in opening up 
markets, for those of us who believe that America is going to be the 
dominant telecommunications leader, a vote ``no'' here guarantees that 
we enter this world as its dominant power.
  Mr. TRAFICANT. Mr. Chairman, I move to strike the requisite number of 
words.
  Mr. Chairman, I have listened to a lot of the debate, and I am 
concerned about the giving as well, and sometimes we just give a little 
bit too much of the rock away.
  With that, I yield to the distinguished subcommittee chair, the 
gentleman from Louisiana (Mr. Tauzin).
  Mr. TAUZIN. Mr. Chairman, I thank the gentleman for yielding.
  Let me point out that this is not about monopoly, it is not about 
monopoly. COMSAT owns a franchise right to deliver services over these 
international satellites, but they do not have a monopoly. That is 
totally wrong. If COMSAT were a monopolist in this world of 
international telephone and other data services, then there would not 
be a Hughes or a PanAmSat Corporation, another private satellite 
corporation. There would not be a Loral, there would not be a 
Teledesic, a Columbia, Meridian, ELLIPSO, all private satellite 
companies just like COMSAT, providing communication services in this 
country and around the world. There would not be an undersea cable 
taking so much business across the oceans and delivering communications 
services across the world.
  In fact, COMSAT's percentage of voice services right now is 22 
percent. Does that sound like a monopoly? And have they signed monopoly 
contracts? Well, here is what the FCC said on April 24, 1998, just a 
couple of weeks ago, on that very point. It said that we conclude the 
contracts that COMSAT has signed, the long-term contracts to AT&T and 
MCI, actually permit AT&T and MCI to choose COMSAT's competitors for 
services. Does that sound like a monopoly, where one signs a contract 
that allows a company to use other competitors for services?
  What I am trying to tell my colleagues is that this is not about a 
monopoly, as much as my colleague may want to make it about a monopoly. 
It is about whether or not one of these companies, COMSAT, which 
happens to be the government franchisee on these international 
satellite systems, which competes with all kinds of other private 
companies: PanAmSat, Loral, Teledesic, Columbia, Meridian, ELLIPSO and 
Cable Undersea, whether this one company and its customers are going to 
be hammered with unconstitutional takings. That is what the issue is 
all about.
  Finally, let me make one other point. If any one of these companies, 
PanAmSat included, thinks that COMSAT has an anticompetitive contract, 
they have a remedy today. They can go to the FCC, they can go to the 
Federal court and they can demand that that contract be abrogated.
  In fact, PanAmSat took a case to the district court just recently. 
Here is what the court said. Nothing in the record suggests that COMSAT 
secured any of the contracts by means of anticompetitive acts against 
PanAmSat. They threw PanAmSat out of court, and yet we in Congress are 
going to overturn that court decision and abrogate those contracts.

[[Page H2848]]

  No. The amendment protects against this taking, and my colleagues 
ought to vote for it.
  Mr. DINGELL. Mr. Chairman, will the gentleman yield?
  Mr. TRAFICANT. I yield to the gentleman from Michigan.
  Mr. DINGELL. Mr. Chairman, listen to the language of the amendment. 
This is what it says: Takings prohibited. In implementing the 
provisions of this section, the commission shall not restrict the 
activities of COMSAT in a manner which would create a liability for the 
United States under the fifth amendment to the Constitution.
  That is all it says. It does not say the commission is supposed to 
allow monopolies. It simply says, we are not going to subject the 
taxpayers of the United States to a $6 billion or $7 billion liability 
by taking property from COMSAT. If there is no taking under this 
amendment, I say to my friends who oppose it, there is nothing for them 
to fear. If there is a taking, by God, my colleagues better pray that 
this is in the bill, because if it is not, my colleagues are going to 
be trying to defend through our Constitution why they dissipated $6 
billion or $7 billion of your constituents' and your taxpayers' money.
  I thank the gentleman.
  Mr. TAUZIN. Mr. Chairman, will the gentleman yield?
  Mr. TRAFICANT. I yield to the gentleman from Louisiana.
  Mr. TAUZIN. Mr. Chairman, let me summarize by pointing out that the 
Morella amendment simply says, do not do anything that is going to take 
private property that the taxpayers of America are going to end up 
having to pay for.
  Now, the opponents say, well, the fifth amendment already protects 
them. It protects the company by making taxpayers liable.
  That is not a good protection for us. If we want to protect the 
American taxpayers, we tell this bill and we tell the FCC, do not do 
anything that takes private property that American taxpayers are going 
to end up having to compensate for. That is why we need to pass this 
good amendment.
  Mr. TRAFICANT. Mr. Chairman, in closing, I think the interpretation 
of the Constitution has been so perverted I think we had better be very 
specific on this takings issue.
  Mrs. MORELLA. Mr. Chairman, will the gentleman yield?
  Mr. TRAFICANT. I yield to the gentlewoman from Maryland.
  Mrs. MORELLA. Mr. Chairman, I know there are some differences of 
opinion in this Chamber and they are well founded, but all of us feel 
that there should not be improper takings.
  We have had a number of opinions on it. Therefore, this amendment 
should be right in order and right in accord with what we have been 
saying. So put this amendment in the bill, it will make a difference, 
and this bill will then become law ultimately. Without it, there will 
be problems.
  Mr. PITTS. Mr. Chairman, I move to strike the requisite number of 
words.
  Mr. Chairman, I yield to the gentleman from Virginia (Mr. Bliley).
  Mr. BLILEY. Mr. Chairman, I thank the gentleman for yielding.
  The fifth amendment already addresses this; that is why we have a 
Constitution, to protect us. Here, once again, COMSAT wants special 
privileges. The Constitution is not good enough for COMSAT. They want 
special protection for a reason to be able to stop the FCC from 
implementing my bill, by tying it up in court. COMSAT's strategy is to 
delay because they make a monopoly of profits under the status quo at 
the expense of our constituents.
  Let me say a couple of words about monopoly. COMSAT claims its share 
of the market for all switch voice and private line services is 21 
percent. The figure is irrelevant. International satellite delivered 
services constitute a separate submarket within the larger market for 
international telecommunication services, because satellites provide 
more cost-effective service for thin traffic paths and because most 
carriers prefer to use a mix of cable and satellite facilities, 
international carrier 102 FCC.
  COMSAT has virtually the entire market for international satellite 
delivered telephone onto itself. Separate satellite systems generally 
have not been able to carry public switch telephoning, which accounts 
for less than 1 percent of PanAmSat's revenues, Economists 
Incorporated, Market Power, Market Foreclosure and INTELSAT, February 
16, 1998. By the time INTELSAT permitted separate systems to offer any 
meaningful quantity PSN service in November of 1994, COMSAT had already 
locked up the largest carriers to long-term contracts.
  This amendment is a red herring; it is just a way for COMSAT to tie 
up the FCC in court for years and to preserve their monopoly. I hope my 
colleagues will vote the amendment down. I thank the gentleman.
  Mr. DEUTSCH. Mr. Chairman, I move to strike the requisite number of 
words.
  Mr. Chairman, hopefully, Members are listening to the debate and 
listening carefully, because there have really been a lot of red 
herrings, as my Chairman has stated previously.
  The facts of the monopoly issue of COMSAT are just a fact. We have 
heard numbers thrown out: 20 percent of the market, 22 percent of the 
market. In the specific area of international satellite communications, 
it is 100 percent of the market. It is a monopoly. There is no way 
around it. It is a monopoly, that is, a statutory monopoly that this 
Congress granted for good reason many years ago.
  But that monopoly that exists is a monopoly. If we are trying to 
communicate with a phone call from here, Washington, D.C., to Africa, 
to Asia, there is only one path to complete that phone call, and it is 
through COMSAT, through INTELSAT, 100 percent.
  There is no option to that whole aspect, and if one does not accept 
that the monopoly exists, I guess if one wants to convince oneself that 
it does not exist, I do not see how one can, but I guess if one wants 
to, one can, then the next logical step I could understand one saying, 
well, there is a taking going on in terms of saying that some of the 
existing contracts need to be modified.

                              {time}  1315

  I guess if we accept that there is not a monopoly, then there is a 
logical step that we could take. But, again, I find it very, very 
difficult even to perceive that argument.
  But let me follow up though really with the fact that the monopoly 
exists in terms of the issue of the taking. What has been spoken about 
before, and I think from a Member perspective to completely understand, 
is that those people who have contracts with COMSAT entered into those 
contracts in an environment of dealing with a monopoly, a monopoly in 
terms of the monopoly power that they had in terms of those contract 
negotiations. This is not the first time this type of situation has 
existed.
  What I have pointed out previously and I think is absolutely 
appropriate as an analogy is when AT&T was broken up for long distance 
service, AT&T was a monopoly. It was broken up. When it was broken up, 
the existing contracts were able to be modified. That is exactly what 
is being done here.
  It is not unprecedented. It has been done in other areas as well. 
That is the policy implication behind what we are doing.
  Mr. Chairman, I urge Members to oppose the amendment and support the 
bill.
  The CHAIRMAN. The question is on the amendment offered by the 
gentlewoman from Maryland (Mrs. Morella).
  The question was taken; and the Chairman announced that the noes 
appeared to have it.


                             Recorded Vote

  Mr. DINGELL. Mr. Chairman, I demand a recorded vote.
  A recorded vote was ordered.
  The vote was taken by electronic device, and there were--ayes 111, 
noes 304, answered ``present'' 2, not voting 15, as follows:

                             [Roll No. 127]

                               AYES--111

     Andrews
     Archer
     Baker
     Barcia
     Barrett (NE)
     Bartlett
     Berry
     Blagojevich
     Boehlert
     Boehner
     Bonior
     Boucher
     Brown (FL)
     Calvert
     Campbell
     Chenoweth
     Clayton
     Clyburn
     Condit
     Conyers
     Cummings
     Davis (IL)
     DeLay
     Dingell
     Dooley
     Doolittle
     Doyle
     Ehrlich
     Ensign
     Farr
     Fazio
     Filner
     Foley
     Fowler
     Frost
     Furse
     Gekas
     Gilchrest
     Goss
     Granger
     Gutknecht
     Hall (OH)
     Hall (TX)
     Hamilton
     Hilliard
     Horn
     Hoyer
     John
     Johnson (CT)
     Johnson, E. B.
     Johnson, Sam

[[Page H2849]]


     Kaptur
     Kilpatrick
     Klink
     Kucinich
     Livingston
     Maloney (NY)
     Martinez
     Mascara
     McCarthy (MO)
     McCarthy (NY)
     McIntosh
     Meek (FL)
     Meeks (NY)
     Menendez
     Minge
     Mink
     Morella
     Nethercutt
     Northup
     Nussle
     Oberstar
     Owens
     Oxley
     Pascrell
     Paul
     Payne
     Peterson (MN)
     Petri
     Pombo
     Pryce (OH)
     Rangel
     Redmond
     Regula
     Riley
     Rivers
     Rohrabacher
     Royce
     Sabo
     Salmon
     Scarborough
     Schaefer, Dan
     Schumer
     Sensenbrenner
     Sessions
     Skelton
     Stark
     Stearns
     Stenholm
     Stokes
     Tauzin
     Taylor (NC)
     Thomas
     Thompson
     Torres
     Towns
     Traficant
     Upton
     Watt (NC)
     Wynn
     Young (AK)

                               NOES--304

     Abercrombie
     Ackerman
     Aderholt
     Allen
     Armey
     Bachus
     Baesler
     Baldacci
     Ballenger
     Barr
     Barrett (WI)
     Barton
     Bass
     Becerra
     Bentsen
     Bereuter
     Berman
     Bilbray
     Bilirakis
     Bishop
     Bliley
     Blumenauer
     Blunt
     Bonilla
     Bono
     Borski
     Boswell
     Boyd
     Brady
     Brown (CA)
     Brown (OH)
     Bryant
     Bunning
     Burr
     Burton
     Buyer
     Callahan
     Camp
     Canady
     Cannon
     Capps
     Castle
     Chabot
     Chambliss
     Clay
     Clement
     Coble
     Coburn
     Collins
     Combest
     Cook
     Cooksey
     Costello
     Cox
     Coyne
     Cramer
     Crane
     Crapo
     Cubin
     Cunningham
     Danner
     Davis (FL)
     Davis (VA)
     Deal
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Diaz-Balart
     Dickey
     Dicks
     Dixon
     Doggett
     Dreier
     Duncan
     Dunn
     Edwards
     Ehlers
     Emerson
     Engel
     English
     Eshoo
     Etheridge
     Evans
     Everett
     Ewing
     Fattah
     Fawell
     Forbes
     Ford
     Fox
     Frank (MA)
     Franks (NJ)
     Frelinghuysen
     Gallegly
     Ganske
     Gejdenson
     Gephardt
     Gibbons
     Gillmor
     Gilman
     Goode
     Goodlatte
     Goodling
     Gordon
     Graham
     Green
     Greenwood
     Gutierrez
     Hansen
     Harman
     Hastert
     Hastings (WA)
     Hayworth
     Hefley
     Hefner
     Herger
     Hill
     Hilleary
     Hinchey
     Hinojosa
     Hobson
     Hoekstra
     Holden
     Hooley
     Hostettler
     Houghton
     Hulshof
     Hunter
     Hyde
     Inglis
     Istook
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Jenkins
     Johnson (WI)
     Jones
     Kanjorski
     Kasich
     Kelly
     Kennedy (MA)
     Kennedy (RI)
     Kennelly
     Kildee
     Kim
     Kind (WI)
     King (NY)
     Kingston
     Kleczka
     Klug
     Knollenberg
     Kolbe
     LaFalce
     LaHood
     Lampson
     Lantos
     Largent
     Latham
     LaTourette
     Lazio
     Leach
     Lee
     Levin
     Lewis (CA)
     Lewis (GA)
     Lewis (KY)
     Linder
     Lipinski
     LoBiondo
     Lofgren
     Lowey
     Lucas
     Luther
     Maloney (CT)
     Manton
     Manzullo
     Markey
     Matsui
     McCrery
     McDade
     McDermott
     McGovern
     McHale
     McHugh
     McInnis
     McIntyre
     McKeon
     McKinney
     Meehan
     Metcalf
     Mica
     Millender-McDonald
     Miller (CA)
     Miller (FL)
     Moakley
     Mollohan
     Moran (KS)
     Moran (VA)
     Murtha
     Myrick
     Nadler
     Neal
     Ney
     Norwood
     Obey
     Olver
     Ortiz
     Packard
     Pallone
     Pappas
     Parker
     Pastor
     Paxon
     Pease
     Peterson (PA)
     Pickering
     Pickett
     Pitts
     Pomeroy
     Porter
     Portman
     Poshard
     Price (NC)
     Quinn
     Rahall
     Ramstad
     Reyes
     Rodriguez
     Roemer
     Rogers
     Ros-Lehtinen
     Rothman
     Roukema
     Roybal-Allard
     Rush
     Ryun
     Sanchez
     Sanders
     Sandlin
     Sanford
     Saxton
     Schaffer, Bob
     Scott
     Serrano
     Shadegg
     Shaw
     Shays
     Sherman
     Shimkus
     Shuster
     Sisisky
     Skeen
     Slaughter
     Smith (MI)
     Smith (NJ)
     Smith (OR)
     Smith (TX)
     Smith, Adam
     Smith, Linda
     Snowbarger
     Snyder
     Solomon
     Souder
     Spence
     Spratt
     Stabenow
     Strickland
     Stump
     Stupak
     Sununu
     Talent
     Tanner
     Tauscher
     Taylor (MS)
     Thornberry
     Thune
     Thurman
     Tiahrt
     Tierney
     Turner
     Velazquez
     Vento
     Visclosky
     Walsh
     Wamp
     Waters
     Watkins
     Watts (OK)
     Waxman
     Weldon (FL)
     Weldon (PA)
     Weller
     Wexler
     Weygand
     White
     Whitfield
     Wicker
     Wise
     Wolf
     Woolsey
     Yates
     Young (FL)

                        ANSWERED ``PRESENT''--2

     Cardin
     Sawyer
       

                             NOT VOTING--15

     Bateman
     Carson
     Christensen
     Fossella
     Gonzalez
     Hastings (FL)
     Hutchinson
     McCollum
     McNulty
     Neumann
     Pelosi
     Radanovich
     Riggs
     Rogan
     Skaggs

                              {time}  1340

  Mrs. KENNELLY of Connecticut, Ms. MILLENDER-McDONALD and Messrs. 
HEFLEY, MILLER of California, SPRATT, CASTLE, LEVIN, and FOX of 
Pennsylvania changed their vote from ``aye'' to ``no.''
  Mrs. JOHNSON of Connecticut, Ms. EDDIE BERNICE JOHNSON of Texas and 
Messrs. DOOLEY of California, CLYBURN, OWENS, and STOKES changed their 
vote from ``no'' to ``aye.''
  So the amendment was rejected.
  The result of the vote was announced as above recorded.


                Amendment No. 8 offered by Mr. Traficant

  Mr. TRAFICANT. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 8 offered by Mr. Traficant:
       At the end of the bill, add the following new sections:

     SEC. 4. COMPLIANCE WITH BUY AMERICAN ACT.

       No funds authorized pursuant to this Act may be expended by 
     an entity unless the entity agrees that in expending the 
     assistance the entity will comply with sections 2 through 4 
     of the Act of March 3, 1933 (41 U.S.C. 10a-30c, popularly 
     known as the ``Buy American Act'').

     SEC. 5. SENSE OF CONGRESS; REQUIREMENT REGARDING NOTICE.

       (a) Purchase of American-Made Equipment and Products.--In 
     the case of any equipment or products that may be authorized 
     to be purchased with financial assistance provided under this 
     act, it is the sense of the Congress that entities receiving 
     such assistance should, in expending the assistance, purchase 
     only American-made equipment and products.
       (b) Notice to Recipients of Assistance.--In providing 
     financial assistance under this Act, the Federal 
     Communications Commission shall provide to each recipient of 
     the assistance a notice describing the statement made in 
     subsection (a) by the Congress.

     SEC. 6. PROHIBITION OF CONTRACTS.

       If it has been finally determined by a court or Federal 
     agency that any person intentionally affixed a label bearing 
     a ``Made in America'' inscription, or any inscription with 
     the same meaning, to any product sold in or shipped to the 
     United States that is not made in the United States, such 
     person shall be ineligible to receive any contract or 
     subcontract made with funds provided pursuant to this Act, 
     pursuant to the debarment, suspensions, and ineligibility 
     procedures described in section 9.400 through 9.409 of title 
     48, Code of Federal Regulations.


        Modification to Amendment No. 8 Offered By Mr. Traficant

  Mr. TRAFICANT. Mr. Chairman, I ask unanimous consent that the 
amendment be modified with the language at the desk.
  The CHAIRMAN. The Clerk will report the modification.
  The Clerk read as follows:

       Modification to amendment No. 8 offered by Mr. Traficant:
       In lieu of the matter proposed to be inserted by the 
     amendment, on page 33 after line 17, add the following:
       (4) Impact privatization has had on U.S. industry, U.S. 
     jobs and U.S. industry's access to the global marketplace.

  The CHAIRMAN. Is there objection to the modification offered by the 
gentleman from Ohio (Mr. Traficant)?
  There was no objection.
  Mr. TRAFICANT. Mr. Chairman, I support this legislation. I want to 
commend the gentleman from Virginia (Mr. Bliley), the gentleman from 
Massachusetts (Mr. Markey), and the gentleman from Michigan (Mr. 
Dingell), the gentleman from Louisiana (Mr. Tauzin) regardless of how 
they feel on the issue.
  The time has come for this legislation. I have some concerns. In this 
legislation is a section that requires annual reports to the Congress 
of the United States. The contents of those reports are listed to 
include the following progress with respect to each objective since the 
most recent preceding report. You see, these reports are to measure 
whether or not this legislation is meeting the objectives and is 
carrying out the provisions of its intent.
  The first thing the bill calls for is the progress it makes to do 
that; the second is the views of the respective parties with respect to 
the privatization issue; finally, the views of the industry and 
consumers on privatization.
  Quite frankly, although I am concerned about the views, my biggest 
concern is not about anybody's views, my big concern is about the 
impact this legislation will have on jobs, the United States industry, 
United States competitiveness, and our access to the global marketplace 
from a competitive spirit.
  The Traficant amendment simply says that there would be another 
section in this report language that will ask for each year from the 
President and the Commission to update us on the impact that 
privatization has had on U.S. industry, United States jobs, and United 
States industry's access to the global marketplace.
  I would hope that the legislation would be accepted. It makes, in my 
opinion, good sense.

[[Page H2850]]

  Mr. Chairman, I yield to the distinguished gentleman from Virginia 
(Mr. Bliley).

                              {time}  1345

  Mr. BLILEY. Mr. Chairman, this gentleman has reviewed the amendment 
and finds it acceptable and urges Members to vote for it.
  Mr. MARKEY. Mr. Chairman, will the gentleman yield?
  Mr. TRAFICANT. I yield to the gentleman from Massachusetts.
  Mr. MARKEY. Mr. Chairman, I thank the gentleman very much and I want 
to congratulate him on his amendment. I think he is adding 
substantially to the nature of this bill, in the change which is taking 
place internationally, its impact upon the United States, and how fully 
we should understand it. I thank the gentleman very much.
  Mr. TRAFICANT. Mr. Chairman, reclaiming my time, I appreciate the 
gentleman's comments, and I am hoping that impact is going to be 
favorable.
  Mr. TAUZIN. Mr. Chairman, will the gentleman yield?
  Mr. TRAFICANT. I yield to the gentleman from Louisiana.
  Mr. TAUZIN. Mr. Chairman, I wanted to thank my friend for offering 
the amendment, congratulate him on it, and suggest that not only do we 
not have any opposition to the amendment, but we gratefully and warmly 
embrace it, and I would urge all Members to support it.
  The CHAIRMAN. The question is on the amendment, as modified, offered 
by the gentleman from Ohio (Mr. Traficant).
  The amendment, as modified, was agreed to.
  The CHAIRMAN. The committee will rise informally.
  The SPEAKER pro tempore (Mr. Duncan) assumed the chair.

                          ____________________