[Congressional Record Volume 145, Number 159 (Thursday, November 11, 1999)]
[Extensions of Remarks]
[Page E2372]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  SUPPORT SATELLITE REFORM LEGISLATION

                                 ______
                                 

                           HON. PETER DEUTSCH

                               of florida

                    in the house of representatives

                      Wednesday, November 10, 1999

  Mr. DEUTSCH. Mr. Speaker, I rise in support of H.R. 3261, the 
``Communications Satellite Competition and Privatization Act of 1999.'' 
I want to commend Chairman Bliley for his commitment to this important 
legislation and for his efforts in working with Congressman Tauzin and 
Congressman Markey. Together, they have produced an excellent, 
bipartisan bill that is designed to bring the benefits of competition 
to consumers of satellite communications. This bill will reform the 
1962 Act--a law that is woefully outdated and in need of a complete 
overhaul.
  Today, we still rely on a foreign government-controlled treaty 
organization--INTELSAT--to provide the bulk of international satellite 
services to and from the United States. This structure was designed in 
the 1960's when it was believed that only governments and monopolies 
could finance and operate satellites. So much has changed since those 
early days. Today, the United States leads the world in satellite 
manufacturing and technology. Yet, we still cling to the 1960's 
governmental model that stifles competition, trade, and ingenuity--all 
to the detriment of consumers.
  H.R. 3261 will end the last remaining telecom monopoly in the United 
States and provide incentives to encourage INTELSAT, and its sister 
organization, INMARSAT, to privatize in a procompetitive manner. The 
bill uses access to the U.S. market to encourage INTELSAT and INMARSAT 
to so privatize. If they refuse, they will still have access to the 
U.S. market for the services they were originally created to provide--
such as public telephone and maritime services--but they will not be 
permitted to compete with private commercial providers of new services 
such as direct-to-home TV and high-speed Internet. To gain admission to 
the U.S. market for these new competitive services, they will first 
have to shed their governmental privileges and immunities and become 
truly competitive and private.
  COMSAT will also be normalized by this legislation. When Congress 
created COMSAT 37 years ago, it granted COMSAT a monopoly over access 
to the INTELSAT, and later, the INMARSAT satellites. COMSAT has been 
the only U.S. company permitted by law to directly use these valuable 
satellites. Any other U.S. company that wanted or needed access to 
these satellites, like AT&T, MCI, the networks, had first to go to 
COMSAT. It has enjoyed the exclusive U.S. franchise.
  COMSAT is not only the monopoly reseller of INTELSAT services in the 
U.S., but under the law no other company or individual is permitted to 
invest in INTELSAT. This has been a very lucrative benefit as INTELSAT 
pays a guaranteed rate of return to its investors of about 18 percent 
annually. We should all be so lucky with our investments. The time is 
long overdue for Congress to end this--we must end COMSAT's monopoly 
over access to and investment in INTELSAT. Congress shouldn't be 
dictating who can invest in INTELSAT. The U.S. would not be alone if we 
finally end this as over 90 other countries permit direct access of 
some kind, and 29 of those permit multiple investors.
  COMSAT also has much to gain from this legislation. In exchange for 
the monopoly benefits granted to COMSAT under the 1962 act, Congress 
imposed some restrictions as well. For example, no one could own more 
than 49 percent of COMSAT. This legislation will free COMSAT of these 
restrictions.
  This bill will permit users of satellite services to go directly to 
INTELSAT to purchase satellite capacity. The FCC has determined that 
this will result in cost savings of up to 71 percent. A 1998 study 
documented that reform legislation would save U.S. consumers $29 
billion over 10 years. Worldwide savings would reach $6.9 billion.
  I urge my colleagues to support H.R. 3261. It brings the full 
benefits of competition to consumers and it will permit COMSAT to move 
ahead in this rapidly changing world of telecommunications.

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