[Congressional Record (Bound Edition), Volume 145 (1999), Part 21]
[Extensions of Remarks]
[Page 30817]
[From the U.S. Government Publishing Office, www.gpo.gov]



   COMMUNICATIONS SATELLITE COMPETITION AND PRIVATIZATION ACT OF 1999

                                 ______
                                 

                               speech of

                        HON. FRANK PALLONE, JR.

                             of new jersey

                    in the house of representatives

                      Wednesday, November 10, 1999

  Mr. PALLONE. Mr. Speaker, I wish to commend the distinguished 
Chairman of the Commerce Committee, Chairman Bliley, and Chairman 
Tauzin, who have worked diligently to bring satellite privatization 
legislation before the House in these last days of this Session. This 
bill is an important step toward legislation that will advance 
increased competition in the global satellite telecommunications 
market.
  When the House passed this bill last year, it was with the firm 
belief that time and technology had passed by the 1962 law that created 
COMSAT. In spite of the overwhelming House support, the bill was 
stalled over concerns raised by colleagues in the other body. Since 
that time, Lockheed Martin has arrived on the scene to buy COMSAT and 
make it a normal, private company without legal immunities or exclusive 
access to the Intelsat system. This is exactly what the proponents of 
the Bliley-Tauzin bill want and is yet another example of the 
marketplace being ahead on Congress.
  To date, Lockheed has followed regular order in its acquisition of 
COMSAT. It has received the approval of both the Federal Communications 
Commission and the Department of Justice to acquire 49% of COMSAT. 
Neither federal agency felt that competition or anti-trust laws were 
threatened by Lockheed Martin's purchase.
  Now it is Congress' turn to weigh on this issue and I believe that 
this bill goes to great lengths to achieve honest and fair competition 
in the satellite competition in the satellite communications market. I 
also believe that we can complete legislative action on this bill 
before Congress leaves this year, which I understand the Chairman has 
said he intends to do. But as we move toward that legislative 
objective, it is important that we realize that certain issues must be 
addressed before we can declare a victory for the private competitive 
marketplace.
  First of all, there is the issue known as ``Level IV direct access''. 
In effect, it would result in the forced divestiture of billions of 
dollars of Comsat shareholder investment in Intelsat infrastructure--
investment undertaken often at the behest of the U.S. Government. Level 
4 direct access simply guts the economic rationale for a private 
company to invest in Comsat. Indeed, that may be the rationale behind 
this provision: to dissuade Lockheed from acquiring Comsat. If that is 
the case, it would be a cynical attempt to manipulate the free market 
in the name of ``competition.'' This provision must be changed in 
conference. Similarly, Congress should simply repeal the ownership cap 
on Comsat upon enactment of final consensus legislation, rather than 
making it contingent upon occurrence of unrelated events as it does 
now.
  Other outstanding differences between the House and Senate have been 
raised by other Members and must similarly be resolved in conference. I 
urge Chairman Bliley to work with Mr. Dingell toward a consensus, 
notably on the privatization criteria, which serve as FCC licensing 
criteria, and must be made more flexible.
  Again, I consider myself as a supporter of this bill. The Congress 
has been very shrewd in letting the telecommunications marketplace work 
its will towards fair competition. We should use this opportunity to 
continue that successful record. I urge the conferees to consider these 
issues when crafting a final package to present to the Congress and 
ultimately the President.

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