[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.
____________________