[Congressional Record Volume 149, Number 86 (Thursday, June 12, 2003)]
[House]
[Pages H5342-H5343]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                ORBIT TECHNICAL CORRECTIONS ACT OF 2003

  Mr. TAUZIN. Mr. Speaker, I ask unanimous consent that the Committee 
on Energy and Commerce be discharged from further consideration of the 
bill (H.R. 2312) to amend the Communications Satellite of 1962 to 
provide for the orderly dilution of the ownership interest in Inmarsat 
by former signatories to the Inmarsat Operating Agreement, and ask for 
its immediate consideration.
  The Clerk read the title of the bill.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Louisiana?
  There was no objection.
  The Clerk read the bill, as follows:

                               H.R. 2312

       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 ``ORBIT Technical Corrections 
     Act of 2003''.

     SEC. 2. INITIAL PUBLIC OFFERING DEADLINES.

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

  Mr. DINGELL. Mr. Speaker, I rise in support of H.R. 2312, a bill to 
extend the deadline for Inmarsat to conduct the initial public offering 
required of it by the ORBIT Act.
  The ORBIT Act was adopted in March of 2000 to promote a competitive 
market for satellite communications through privatization of inter-
governmental organizations, one of which is Inmarsat. To further the 
twin goals of the privatization and independence of satellite carriers, 
the ORBIT Act called on Inmarsat to conduct an initial public offering 
(IPO) by December 31, 2001. As that December 2001 deadline approached, 
however, it became clear, given market conditions at the time, that it 
would be punitive to effectively force Inmarsat to conduct its IPO by 
the specified date. As a result, Congress passed legislation to provide 
an additional year to conduct the IPO, and also provided the FCC the 
ability to grant a six-month extension if warranted by market 
conditions.
  Unfortunately, the market conditions have not improved to a point 
where it would be reasonable to require the IPO, and the current 
deadline--June 30, 2003--is now less than a month away. H.R. 2312, the 
ORBIT Technical Corrections Act, would not require Inmarsat to conduct 
its IPO until June 30, 2004, and it permits the FCC to grant an 
additional six months delay should market conditions continue to 
warrant such regulatory action. This legislation is clearly necessary 
at this time, lest the government would unfairly require one company 
and its investors to risk capital by offering shares to the public at a 
time when such shares are likely to be undervalued--perhaps grossly 
undervalued.
  The Committee on Energy and Commerce continues to take an interest in 
the state of competition in the industry and the financial health of 
those who invest capital to build networks and offer satellite 
communications services. But as we proceed to grant one carrier 
additional time with which to conduct its IPO, I would observe that 
another provider--New Skies Satellites--long ago fulfilled the ORBIT 
Act's IPO and substantial dilution requirements. Since that time, it 
has diluted its original shareholder base yet again with a 10 percent 
share buyback. And New Skies is competing for satellite business 
independently, with strong independent management, precisely as 
congress envisioned in ORBIT. As

[[Page H5343]]

the Committee considers holding hearings to examine the state of 
competition in the satellite industry, I believe that Congress, having 
introduced a new market competitor to the satellite industry, ought to 
examine whether the many restrictions the ORBIT Act placed on 
``separated entities''--in effect New Skies--are still necessary to 
preserve that company's independence and promote competition.
  I look forward to working with my colleagues on the Committee on 
these issues. Today, I am satisfied simply to enact H.R. 2312. I urge 
my colleagues to support it as well.
  Mr. SHIMKUS. Mr. Speaker, I rise today in support of H.R. 2312.
  This bill is very straightforward. H.R. 2312 amends the ORBIT Act and 
gives the satellite company, Inmarsat, a little more time to complete 
their Initial Public Offering (IPO). Specifically, this legislation 
gives Inmarsat a 12-month extension from their pending June 30, 2003, 
deadline. It also gives the FCC the discretion to grant Inmarsat an 
additional 6-month extension on top of that if the company can 
demonstrate a legitimate need.
  This legislation is necessary because the ORBIT Act--which was 
enacted in March 2000--did not anticipate the collapse of the IPO 
markets, especially in the telecommunications sector. In today's 
economic climate, Inmarsat cannot complete an IPO.
  Without swift action by Congress on this bill, American farmers will 
face disrupted service of their precision farming technologies that 
rely on Inmarsat-distributed signals at the end of this month. 
Currently, many farmers, including many in my home state of Illinois, 
are utilizing GPS-based guidance systems to improve their productivity 
and efficiency. These systems enable farmers to more accurately apply 
seed, fertilizer and other inputs, reduce fuel use, and increase yields 
while reducing costs.
  I want to emphasize that H.R. 2312 does not reopen the battles over 
the ORBIT law or challenge its underlying public policy. Rather, it 
simply makes this law workable as we suffer through this continuing 
down market.
  I urge my colleagues to vote for this important and time-sensitive 
legislation.
  Mr. TAUZIN. Mr. Speaker, I rise today in support of H.R. 2312, which 
will extend the deadline for Inmarsat to conduct the initial public 
offering required of it by the ORBIT satellite privatization law. H.R. 
2312, introduced by Representatives Shimkus and Markey, is unopposed.
  The ORBIT Act was enacted in March of 2000 to promote a competitive 
market for satellite communications through privatization of inter-
governmental organizations, one of which is Inmarsat. The Federal 
Commications Commission has since found that Inmarsat has indeed 
satisfied the privatization criteria of the ORBIT Act.
  In addition, ORBIT called on Inmarsat to conduct an initial public 
offering (IPO) by a date certain--December 31, 2001. However, as that 
December 2001 deadline approached, it became quite apparent that the 
volatility in the financial markets in general, and the 
telecommunications sector specifically, necessitated a grant of 
additional time within which Inmarsat could conduct its statutorily 
mandated IPO. As a result, Congress took the prudent step of including 
language in the Commerce-Justice-State FY 2002 Appropriations bill to 
provide an additional year to conduct the IPO, and also provide the FCC 
the ability to grant a six-month extension if warranted by market 
conditions. This action was non-controversial.
  Unfortunately, the market conditions have not improved to a point 
where it would be reasonable to require the IPO and the current 
deadline (June 30, 2003) is now less than a month away. H.R. 2312, the 
ORBIT Technical Corrections Act, allows Inmarsat until June 30, 2004, 
to conduct its IPO.
  The purpose of this IPO requirement was to substantilly dilute the 
ownership of the privatized Inmarsat by its former owners, many of 
which are foreign governmental entities, so as to further ensure its 
independence. I fully supported this goal when we enacted ORBIT, and 
still do today. Indeed, the action we take today, in my view, is 
consistent with this policy objective.
  If forced to move ahead with an IPO at this time, Inmarsat will 
probably receive a reduced price for its shares offered. Foreign 
entities that still own significant portions of Inmarsat would likely 
be discouraged from offering their ownership interests for sale. 
Instead of resulting in substantial dilution of prior owners as 
envisioned by the ORBIT Act, a current year IPO might not achieve much 
dilution whatsoever. In that instance, Inmarsat would have complied 
with the procedural requirement of ORBIT without the substantive result 
that we in Congress sought: dilution of previous government owners. 
Given the state of the markets, the only way to ensure the dilution 
sought by ORBIT is to allow Inmarsat 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.
  The health of the satellite communications industry and ORBIT's 
implementation are important to the Committee on Energy and Commerce. 
We are currently exploring the possibility of holdings hearings on the 
state of the industry in the future. At the appropriate time, we need 
to examine ORBIT's implementation, and the efficiency of the existing 
regulatory regime. For instance, New Skies Satellites has fulfilled the 
requirements of ORBIT and now is a fully independent competitor in the 
international satellite marketplace. Some have questioned whether it 
makes sense to hold New Skies to a continuing list of regulatory 
restrictions and requirements. I look forward to working with my 
colleagues on the Committee to ensure that current law reflects the 
current realities of the satellite industry. However, today we need to 
enact H.R. 2312. I thank my collleagues for their support and I urge 
the prompt passage of this legislation.
  The bill was ordered to be engrossed and read a third time, was read 
the third time, and passed, and a motion to reconsider was laid on the 
table.

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