[Congressional Record Volume 145, Number 164 (Thursday, November 18, 1999)]
[Extensions of Remarks]
[Pages E2441-E2442]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   COMMUNICATIONS SATELLITE COMPETITION AND PRIVATIZATION ACT OF 1999

                                 ______
                                 

                               speech of

                            HON. TOM BLILEY

                              of virginia

                    in the house of representatives

                      Wednesday, November 10, 1999

  Mr. BLILEY. Mr. Speaker, I rise in support of H.R. 3261. I am pleased 
that today we will pass on suspension in bipartisan fashion our 
satellite reform and privatization legislation, H.R. 3261. The fact 
that we will pass this decisively and that no one has indicated he or 
she will vote against this bill indicates the widespread support in the 
House for this legislation. It is high time to end the current cartel-
like ownership and management structure of INTELSAT and Inmarsat. They 
must not only be privatized, they must be privatized in a pro-
competitive market. We must eliminate their privileges and immunities, 
warehoused orbital locations or frequencies, and limit their ability to 
use their governmental privileges to expand their services and assets 
pending privatization. There is no reason for government to be 
providing commercial communications services. We must also replace 
monopoly control with competition and provide full direct access in the 
United States to INTELSAT and Inmarsat.
  As the author and manager of this legislation, I think it is 
important to specify what will be the legislative history for H.R. 
3261. With the exception of section 641, the deletion of old section 
642, the addition of section 649, and several date related changes, 
H.R. 3261 is identical to the bill the House passed on May 6, 1998, 
H.R. 1872. We have put this legislation on the suspension calendar 
because Members already voted for the same text year by a margin of 403 
to 16. Because most of the bill is identical to last year's bill, it is 
unnecessary to go through the Committee hearing and report process 
again this year. Thus, no report will be filed with H.R. 3261. Instead, 
we intend that the Committee report for H.R. 1872 (See House Rpt. 105-
494), the record for the legislative hearing held on September 30, 
1997, and the floor debate on H.R. 1872, in relevant part, be used as 
legislative history for H.R. 3261.
  What follows is a specific discussion of changes that have been made 
in H.R. 3261 when compared to H.R. 1872, which, when taken together 
with the H.R. 1872 legislative history discussed above, will serve as 
the legislative history for H.R. 3261.
  Section 601(b)(1) advances the dates for the privatization of 
INTELSAT and Inmarsat, respectively, from January 1, 2002 to April 1, 
2001, for INTELSAT, and from January 1, 2001 to April 1, 2000, for 
Inmarsat. The reason for this change is that it has become clear that 
the long transition periods provided in H.R. 1872 are no longer 
necessary. Both organizations have taken some steps toward some form of 
privatization. For example, Inmarsat moved to end its intergovernmental 
status, although it still has not proceeded with an initial public 
offering of its stock. Moreover, the INTELSAT Assembly of Parties 
announced some steps which could move INTELSAT in the direction of 
privatization.
  Section 602(a)(1)(A) and section 621(1) also have been changed to 
reflect the new dates set out in section 601(b)(1). Similarly, the

[[Page E2442]]

dates set out in 603(b) for the Federal Communications Commission to 
make annual findings and report to Congress on INTELSAT's progress 
toward privatization have been advanced to reflect the fact that longer 
transition periods are not needed. Thus, the first Commission finding 
is required on or before January 1, 2000.
  Furthermore, given the fact that over a year has elapsed since 
passage of H.R. 1872, the number of annual findings has been reduced 
from four to three, with the second finding of H.R. 1872 now included 
in the first annual finding, as set out in section 603(b)(2). The last 
finding is due January 1, 2002, which is later than the April 1, 2001 
date established for INTELSAT privatization. It may be appropriate to 
make the FCC finding date the same as the privatization date of April 
1, 2001 at the next stage in the legislative process.
  Finally, there have been changes in the dates by which the privatized 
INTELSAT and Immarsat must conduct initial public offerings of their 
shares; from January 1, 2001 to April 1, 2001 for INTELSAT, and from 
January 1, 2000 to April 1, 2000 for Inmarsat.
  Section 624 deals specifically with Inmarsat. While there already 
have been some changes in the Inmarsat structure and some provisions of 
this section may need to be adjusted, such as the reference to the 
Inmarsat Signatory, this section is still applicable. While Inmarsat 
has conducted what it deems to be a privatization, that privatization 
has not been conducted in a pro-competitive manner.
  Section 641 of H.R. 3261 ends the monopoly of COMSAT over access to 
the U.S. market for INTELSAT services. The Commission is to comply with 
section 641, by adopting orders ensuring the full implementation of all 
forms of direct access as provided in section 641(a).
  Section 641 of H.R. 1872 dealt with various issues raised by ending 
COMSAT's exclusive access to INTELSAT and Inmarsat. We do not believe 
it necessary for the new section 641 to address these issues. First, 
given the changes at Inmarsat, and the provisions of other parts of the 
legislation dealing with Inmarsat, such as section 624(1), there is no 
need to specify direct access to Inmarsat in the new section 641. 
Second, it is appropriate to permit both non-investment, or contract, 
direct access (also known as Level 3) and investment (also known as 
Level 4) direct access to INTELSAT immediately upon the effective date 
of this legislation. All such direct access is in the public interest. 
It will increase competition for access to INTELSAT services and lower 
prices for consumers of INTELSAT services.
  The Commission currently has the authority to pursue contract or 
Level 3 direct access. As was the case with respect to H.R. 1872, by 
including provisions on direct access in H.R. 3261, we do not intend to 
imply that there is a need to amend any provision of the Communications 
Satellite Act of 1962 to provide for direct access.
  There are several other differences between H.R. 3261 and H.R. 1872 
in section 641 regarding direct access. First, H.R. 3261 does not 
provide for or specifically authorize any signatory support costs. This 
is a change from H.R. 1872, which permitted compensation to INTELSAT 
signatories for support costs that the signatories would not otherwise 
be able to avoid under a direct access regime. Second, H.R. 3261 does 
not limit the ability of non-U.S. signatories of INTELSAT to provide 
direct access in the United States. Thus the sections of H.R. 1872 
dealing with signatory fees and foreign signatories, along with section 
641(1)(A)(iii) regarding carrier pass through of savings realized as a 
result of direct access, were deleted.
  H.R. 3261 does not grant the Commission authority to impose a 
signatory fee or limit direct access by foreign signatories nor should 
the statement indicating that the Commission has authority to implement 
direct access be interpreted as meaning that the Commission has the 
authority to impose signatory fee or limit direct access by foreign 
signatories.
  New section 641 also does not direct the Commission to take action on 
COMSAT's petition to be treated as a non-dominant common carrier 
because the FCC already has acted on this petition. Furthermore, 
section 641(4), stating that direct access regulation would be 
eliminated after a pro-competitive privatization of INTELSAT or 
Inmarsat is achieved was unnecessary and thus was deleted.
  H.R. 3261 does not include an equivalent of section 642 of H.R. 1872 
dealing with the renegotiation of monopoly contracts, which is also 
known as ``fresh look.'' The sections of H.R. 3261 following section 
641 were renumbered to reflect the deletion of old section 642.
  New section 649 is intended to prevent U.S.-licensed international 
carriers and satellite operators from using leverage they may have in 
foreign markets to exclude other U.S.-licensed international carriers 
and satellite operators from gaining access to those foreign markets. 
The effect of Section 649 is to apply this policy to all foreign 
satellite operators seeking to do business in the United States. 
Exclusive market access is a critical barrier to the provision of 
competitive satellite services by United States companies.
  Mr. Speaker, I urge my colleagues to support this important 
legislation.

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