[Congressional Record Volume 148, Number 104 (Friday, July 26, 2002)]
[Senate]
[Page S7439]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




           TO AMEND THE COMMUNICATIONS SATELLITE ACT OF 1962

  Mr. REID. I ask unanimous consent the Senate proceed to the 
consideration of S. 2810 submitted earlier by Senators Hollings, 
McCain, Burns, and Ensign.
  The PRESIDING OFFICER. The clerk will report the bill.
  The legislative clerk read as follows:

       A bill (S. 2810) to amend the Communications Satellite Act 
     of 1962 to extend the deadline for INTELSAT initial public 
     offering.

  There being no objection, the Senate proceeded to consider the bill.
  Mr. HOLLINGS. Mr. President, I rise today, along with my Commerce 
Committee colleagues to speak to legislation that would extend the 
deadline for Intelsat to conduct the initial public offering required 
of it by the ORBIT satellite privatization law.
  Under ORBIT, Intelsat must conduct an IPO by December 31, 2002. 
Intelsat has made substantial preparations to do just that. Recent 
disastrous events in the telecommunications market, however, now make 
this statutory deadline unrealistic and potentially contrary to the 
policy objectives of ORBIT. This bill would therefore give Intelsat 
another year in which to conduct its IPO and also provides the FCC 
authority to allow an additional extension of time if warranted by 
market conditions.
  The goal of ORBIT's IPO requirement was to substantially dilute the 
ownership of the privatized Intelsat by its former owners, many of 
which are foreign government entities. I continue to support this goal. 
The Commerce Committee has been provided with significant evidence that 
this goal is already in the process of being achieved. For example:
  July 18, 2001: Intelsat privatized in a transaction that resulted in 
14 percent of the new entity being held by non-signatory investing 
entities;
  April 26, 2002; Intelsat filed its IPO registration statement with 
the SEC;
  May 2002: Natural dilution of Intelsat signatories continued as 
foreign governments privatized their telecom operations: Intelsat non-
signatory ownership increased to 22 percent;
  June 14, 2002: The FCC issued its ORBIT Act report, finding that, 
``On the whole, we believe that U.S. policy goals regarding the 
promotion of a fully competitive global market for satellite 
communications services are being met in accordance with the Act.''
  June 21, 2002: Intelsat received clearance from the New York Stock 
Exchange to file a listing application to trade its ordinary shares on 
that exchange.
  This is a good start. More remains to be done, but it appears that 
Intelsat has been proceeding in a manner consistent with launching its 
IPO prior to the December 31, 2002 ORBIT deadline. Recently, however, 
uncontrollable external events overtook all of us. WorldCom's 
bankruptcy is but the latest financial debate in the telecommunications 
industry, which has been unstable. Capital markets are extremely 
unsupportive of additional investment at this time. There arguably 
could not be a worse time for a satellite communications company to 
consider an IPO.
  If forced to move ahead with an IPO before the end of 2002, Intelsat 
will probably receive a reduced price for its shares offered. Foreign 
entities that still own significant portions of Intelsat are aware of 
this likelihood and would therefore be discouraged from offering their 
ownership interests for sale. Instead of the substantial dilution of 
prior owners contemplated by the ORBIT Act, a year--2002 IPO might not 
achieve much dilution whatsoever. In that instance, Intelsat would have 
complied with the procedural requirement of ORBIT without the 
substantive result that we in Congress sought: dilution of previous 
owners. Given the current adverse conditions in the stock market in 
general and the telecommunications sector in particular, the only way 
to ensure the dilution results sought by ORBIT may be to allow Intelsat 
to further delay its IPO. That result is good public policy that is 
also good for the long-term health of the satellite communications 
industry.
  Mr. President, this bill needs to be enacted this year. I thank my 
colleagues for their support and I urge the prompt passage of this 
legislation.
  Mr. REID. Mr. President, I ask unanimous consent the bill be read 
three times and passed, the motion to reconsider be laid upon the 
table, and any statements be printed in the Record at the appropriate 
place with no intervening action or debate.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The bill (S. 2810) was read the third time and passed, as follows:

                                S. 2810

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

     SECTION 1. EXTENSION OF IPO DEADLINE.

       Section 621(5)(A)(i) of the Communications Satellite Act of 
     1962 (47 U.S.C. 763(5)(A)(i)) is amended--
       (1) by striking ``October 1, 2001,'' and inserting 
     ``December 31, 2003,''; and
       (2) by striking ``December 31, 2002;'' and inserting ``June 
     30, 2004;''.

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