[Senate Report 106-100]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 189
106th Congress                                                   Report
                                 SENATE
 1st Session                                                    106-100
_______________________________________________________________________



 
    OPEN-MARKET REORGANIZATION FOR THE BETTERMENT OF INTERNATIONAL 
                        TELECOMMUNICATIONS ACT

                               __________

                              R E P O R T

                                 of the

           COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                                   on

                                 S. 376




                 June 30, 1999.--Ordered to be printed

                               __________

                    U.S. GOVERNMENT PRINTING OFFICE
69-010                     WASHINGTON : 1999

       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
                       one hundred sixth congress
                             first session

                     JOHN McCAIN, Arizona, Chairman
TED STEVENS, Alaska                  ERNEST F. HOLLINGS, South Carolina
CONRAD BURNS, Montana                DANIEL K. INOUYE, Hawaii
SLADE GORTON, Washington             JOHN D. ROCKEFELLER IV, West 
TRENT LOTT, Mississippi                  Virginia
KAY BAILEY HUTCHISON, Texas          JOHN F. KERRY, Massachusetts
OLYMPIA SNOWE, Maine                 JOHN B. BREAUX, Louisiana
JOHN ASHCROFT, Missouri              RICHARD H. BRYAN, Nevada
BILL FRIST, Tennessee                BYRON L. DORGAN, North Dakota
SPENCER ABRAHAM, Michigan            RON WYDEN, Oregon
SAM BROWNBACK, Kansas                MAX CLELAND, Georgia
                       Mark Buse, Staff Director
                  Martha P. Allbright, General Counsel
     Ivan A. Schlager, Democratic Chief Counsel and Staff Director
               Kevin D. Kayes, Democratic General Counsel

                                  (ii)
                                                       Calendar No. 189
106th Congress                                                   Report
                                 SENATE
 1st Session                                                    106-100

======================================================================




    OPEN-MARKET REORGANIZATION FOR THE BETTERMENT OF INTERNATIONAL 
                         TELECOMMUNICATIONS ACT

                                _______
                                

                 June 30, 1999.--Ordered to be printed

                                _______
                                

       Mr. McCain, from the Committee on Commerce, Science, and 
                Transportation, submitted the following

                              R E P O R T

                         [To accompany S. 376]

    The Committee on Commerce, Science, and Transportation, to 
which was referred the bill (S. 376) ``A Bill to amend the 
Communications Satellite Act of 1962 to promote competition and 
privatization in satellite communications, and for other 
purposes'', having considered the same, reports favorably 
thereon with an amendment (in the nature of a substitute) and 
recommends that the bill (as amended) do pass.

                          Purpose of the Bill

    Extraordinary technological and market changes have 
reshaped the global satellite communications marketplace in the 
thirty-seven years since enactment of the Communications 
Satellite Act of 1962 and the creation of COMSAT and INTELSAT. 
Where once only a treaty-based intergovernmental satellite 
system would be willing to undertake the enormous financial 
risks associated with developing, launching, and maintaining a 
global satellite system, there are now multiple commercial 
satellite systems providing an array of international 
telecommunications services in this increasingly competitive 
marketplace. However, in this mature, competitive satellite 
services environment, it is no longer appropriate for any 
single competitor to be advantaged by an intergovernmental 
structure accompanied by certain privileges and immunities; 
rather it must be transformed into a commercial structure 
comparable to that of any of the existing commercial satellite 
entities.
    Separately, COMSAT, the private company created statutorily 
both to assume the private financial investment risks of the 
United States Government's vision of INTELSAT and to serve as 
this nation's Signatory to INTELSAT, must also be transformed 
into a normalized commercial entity, which includes shedding 
outdated statutory encumbrances. Such dramatic structural 
shifts necessitate adaptation of our nation's satellite laws to 
a new policy framework that more accurately reflects the 
burgeoning international satellite communications marketplace 
of the 21st century. S. 376 reflects this need for a new 
regulatory structure cognizant of the wholesale changes that 
have taken place, and continue to take place, in this dynamic 
market.
    S. 376 is the fundamental realization of this new policy 
framework. While recognizing the imperative that INTELSAT be 
privatized as rapidly as possible, the Committee is mindful of 
the fact that INTELSAT is an intergovernmental organization 
which the United States can influence, but not control. 
Importantly, S. 376 provides a sound statutory framework for 
the timely, pro-competitive privatization of INTELSAT by no 
later than January 1, 2002, creating a process to both 
encourage and verify such bona fide privatization. This process 
includes requirements for regular reports to Congress to 
facilitate our continued monitoring of INTELSAT's progress 
toward privatization. S. 376 also sets forth the necessary 
guidance to, and requirements for, the President and the 
Federal Communications Commission with respect to their 
respective roles and responsibilities in the process. S. 376 
leverages access by INTELSAT to the most lucrative 
telecommunications market in the world--the United States 
market--as an incentive to achieve a rapid pro-competitive 
privatization. In so doing, the legislation withholds direct 
market access from INTELSAT until it is privatized, denying 
them the ability to expand their market presence and solidify a 
broader customer base. S. 376 embraces the view that any 
satellite privatization legislation must include incentives for 
INTELSAT to privatize in a pro-competitive manner.
    With respect to COMSAT, S. 376 repeals the old, 
unnecessarily intrusive statutory ownership and governance 
provisions that have the effect of hindering competition by 
saddling one company with unique restrictions, such as access 
to capital. Absent repeal of such provisions, COMSAT may by 
dint of regulation, not marketplace behavior, be deprived of 
financial opportunities available to its competitors.
    Enactment of S. 376 facilitates enhanced competition, 
rather than elimination of a single competitor from the 
marketplace, thus furthering our goal of bringing advanced 
satellite-based telecommunication services to every corner of 
this nation and the globe, including poor, remote and lesser 
developed countries.

                          Background and Needs

    In 1962, Congress passed the Communications Satellite Act 
(1962 Act), creating a new publicly-traded stock corporation, 
the Communications Satellite Corporation (COMSAT), with the 
specific charter of forming an international consortium to 
realize the United States vision of a global satellite 
communications system able to reach every corner of the globe. 
As a result, the International Telecommunications Satellite 
Organization (INTELSAT) was established through an 
unprecedented partnership of nations in Africa, Europe, the 
Americas, and Asia. Given the infancy ofsatellite technology in 
1963, this multinational partnership was really borne from the 
recognition that individual companies were not willing to undertake the 
financial and other risks associated with development of such a global 
satellite communications system. In 1973, INTELSAT was transformed into 
an international treaty-based organization in which governments 
(``Parties'') and telecommunications entities (``Signatories'') each 
play a particular role. The Parties are the national governments that 
entered into the treaty agreement on INTELSAT, and that designate the 
Signatory to INTELSAT. The Signatories are themselves the actual owners 
and operators of the INTELSAT system, responsible for the distribution 
of INTELSAT services in their respective countries.
    While initially the foreign Signatories were government-
owned Post, Telegraph and Telecommunications (PTT) entities, 
this too has evolved in keeping with the overall global trend 
toward privatization and liberalization epitomized in the WTO 
Agreement on Basic Telecommunications. The majority ownership 
stake of INTELSAT is held by Signatories that are fully or 
partially privatized, or committed to privatization on a 
general timeframe. Unlike foreign Signatories, the United 
States Signatory, COMSAT, is a publicly traded private 
corporation with no government ownership and with no former or 
current participation in the domestic United States 
telecommunications marketplace. In keeping with its role as the 
sole United States owner and investor in INTELSAT since its 
inception, COMSAT currently has the exclusive franchise on the 
distribution of INTELSAT capacity in the United States market.
    Today, INTELSAT has realized the vision set forth by the 
United States Government by its development and operation of a 
global satellite system that serves every corner of the world. 
As a byproduct of its success, its financing of the development 
of accessible satellite technology enabled greater commercial 
confidence and reliance on the use of satellite-based 
telecommunications infrastructure. It and its 143 member 
countries provide space segment capacity for international 
telecommunications services. As a result of a previous 
commercial spin-off (New Skies Satellite NV), INTELSAT is 
currently operating 19 satellites, supporting basic telephony, 
INTERNET, video, and other services to users around the world. 
Competition to INTELSAT is characterized by the Federal 
Communications Commission as comprising both satellite systems 
and high-capacity fiber optic submarine cables spanning the 
globe. For example, PanAmSat Corporation, owned 82% by Hughes, 
currently operates a global network of 19 satellites with 
announced plans to further expand to 20 satellites by end of 
year and 24 in 2000. U.S. submarine cable carriers, which are 
dominated by MCI/WorldCom, ATT, Sprint, and other smaller 
carriers are capable of collectively carrying capacity and are 
also significant sources of competition.

                          Legislative History

    Senator Burns, Chairman of the Subcommittee on 
Communications, introduced S. 376 on February 24, 1999 to 
foster increased competition in the increasingly dynamic 
international satellite communications marketplace. In addition 
to two hearings held during the 105th Congress, the 
Communications Subcommittee held a two-panel hearing on S. 376, 
on March 25, 1999. Government testimony was received from 
Ambassador Vonya McCann, Office of Communications and 
Information Policy, United States Department of State; Mr. 
Roderick Porter, Acting Chief, International Bureau, Federal 
Communications Committee; private sector testimony was received 
from Ms. Betty Alewine, Chief Executive Officer, Comsat 
Corporation; Conny Kullman, Director-General, Intelsat; James 
Cuminale, General Counsel and Senior Vice President, Panamsat 
Corporation; and John V. Sponyoe, Chief Executive Officer, 
Lockheed Martin Global Telecommunications. Subsequent to the 
hearing, testimony was received from MCI/WorldCom, ATT, British 
Telecom, Iridium, and Hughes. On May 5, 1999, the Senate 
Commerce Committee, Chaired by Senator McCain, met in an open 
markup session to consider S. 376. At that time, Senators 
McCain, Burns, Hollings and Breaux introduced an amendment in 
the nature of a substitute which was voted out of the full 
committee by unanimous consent.

                            Estimated Costs

    In accordance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate and section 403 of the 
Congressional Budget Act of 1974, the Committee provides the 
following cost estimate, prepared by the Congressional Budget 
Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, June 24, 1999.
Hon. John McCain,
Chairman, Committee on Commerce, Science, and Transportation, U.S. 
        Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 376, the Open-Market 
Reorganization for the Betterment of International 
Telecommunications Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Kathleen 
Gramp (for federal cost) and Jean Wooster (for the private-
sector impact).
            Sincerely,
                                          Paul Van de Water
                                    (For Dan L. Crippen, Director).
    Enclosure.

               congressional budget office cost estimate

S. 376--Open-Market Reorganization for the Betterment of International 
        Telecommunications Act

    Summary: S. 376 would amend existing law regarding the 
federal regulation of international satellite communications 
systems and their relationship to the U.S. market. A treaty-
based entity--the International Telecommunications Satellite 
Organization (INTELSAT)--currently provides satellite-based 
communications services worldwide. A private company, COMSAT, 
serves as the U.S. signatory to the organization and, under 
current law, has the right to market its services. This bill 
would establish U.S. policy regarding the privatization of 
INTELSAT and would direct the President, the Federal 
Communications Commission (FCC), and COMSAT to implement those 
policies. If the privatization fails to occur in a manner 
consistent with the criteria and deadlines in the bill, the 
President would be required to pursue various remedies, 
including having the U.S. withdraw from INTELSAT. Other 
provisions in the bill would revise the statutory guidelines 
for U.S. participation in the International Mobile Satellite 
Organization following its privatization in April 1999, and 
would repeal most of the statutory conditions on COMSAT's 
financing and operations.
    Assuming appropriation of the necessary amounts, CBO 
estimates that implementing S. 376 would cost about $1 million 
over the 2000-2004 period if INTELSAT meets the privatization 
standards in the bill. If triggered, the sanctions for failing 
to meet the privatization criteria would affect discretionary 
spending for procuring and regulating telecommunications 
services, but CBO has no basis for estimating any such costs. 
The bill would not affect direct spending or receipts; 
therefore, pay-as-you-go procedures would not apply.
    S. 376 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on state, local, or 
tribalgovernments. Provisions in this bill may affect COMSAT and end 
users of INTELSAT services if INTELSAT does not meet the privatization 
criteria outlined in the bill.
    Estimated cost to the Federal Government: CBO estimates 
that federal agencies would spend about $1 million over the 
2000-2004 period to complete the various reports and 
negotiations required by S. 376. CBO expects that most of these 
costs would be incurred by the Department of State, which along 
with the Department of Commerce implements U.S. policy with 
regard to such international organizations. According to the 
FCC, the commission's workload would not change significantly 
if the privatization of INTELSAT meets the conditions specified 
in the bill.
    Most observers expect that INTELSATE will be privatized by 
2002, but there is a chance that the new entity may not satisfy 
some of the criteria in S. 376. Should that occur, S. 376 would 
require that the U.S. withdraw as a party to INTELSAT. In 
addition, INTELSAT would not be allowed to market its services 
or capacity directly to end users (other than to the U.S. 
signatory, COMSAT) unless the privatization criteria are met.
    If triggered, the bill's sanctions would affect the 
government's spending for certain international 
telecommunications services. But CBO has no basis for 
estimating the magnitude of the potential costs because we 
cannot predict how the FCC would reconcile the need to maintain 
access to INTELSAT satellites while complying with the bill's 
restrictions on the marketing of its services if the 
privatization is deemed deficient. Agencies that purchase 
certain services directly from COMSAT, such as the Department 
of Defense, might need to renegotiate contracts or modify 
equipment if the sanctions were to require a change in 
suppliers. On the other hand, their costs could be negligible 
if the FCC determined that COMSAT could continue to provide 
INTELSAT services. Agencies that use INTELSAT services through 
government contracts with Sprint and MCI WorldCom would be 
affected only if those companies changed their prices as a 
result of the sanctions.
    According to agency officials, the FCC would play a key 
role in implementing these sanctions, including determining the 
terms and conditions under which U.S. market could continue to 
have access to INTELSAT services. CBO estimates that FCC's role 
in the implementation of such sanctions would have no net 
budgetary impact, because the commission is authorized under 
current law to collect fees from the telecommunications 
industry sufficient to offset the cost of its regulatory and 
applications activities.
    Pay-as-you-go considerations: None.
    Estimated impact on State, local, and tribal governments: 
S. 376 contains no intergovernmental mandates as defined in 
UMRA and would impose no costs on state, local, or tribal 
governments.
    Estimated impact on the private sector: S. 376 would impose 
no new private-sector mandates as defined in the UMRA. 
Provisions in this bill may affect COMSAT and end users of 
INTELSAT services if INTELSAT does not meet the privatization 
criteria outlined in the bill.
    Based on information from the FCC, COMSAT, and INTELSATE, 
CBO expects that INTELSAT would be privatized by the January 1, 
2002, deadline. If INTELSAT does not privatize in a manner 
consistent with the criteria set forth in the bill, the bill 
would direct the United States to withdraw as a party from 
INTELSAT. Upon withdrawal, COMSAT would no longer be the U.S. 
signatory and therefore could not be an investor in INTELSAT, 
which would reimburse COMSAT for its investment. That 
reimbursement would be made at the book value of the stock 
rather than its market value, causing a loss for COMSAT. COMSAT 
would probably still be permitted to sell INTELSAT services to 
U.S. customers in a non-signatory capacity.
    Estimate prepared by: Federal costs: Kathleen Gramp; impact 
on the private sector: Jean Wooster.
    Estimate approved by: Robert A. Sunshine, Deputy Assistant 
Director for Budget Analysis.

                      Regulatory Impact Statement

    In accordance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee provides the 
following evaluation of the regulatory impact of the 
legislation, as reported:

                       number of persons covered

    The Committee believes that the bill will not subject any 
individuals or businesses affected by the bill to any 
additional regulation.

                            economic impact

    After full implementation of the bill, individuals and 
businesses will benefit from increased opportunities for 
competition in the provision of international satellite 
services. Increased competition, and the resulting choices in 
the marketplace will provide consumers with better and more 
product for their dollar, as well as potentially freeing up 
their resources for other pursuits.

                                privacy

    There will be no impact on personal privacy as a result of 
this legislation.

                               paperwork

    The paperwork resulting from this legislation will be 
primarily due to the FCC licensing process.

                      Section-by-Section Analysis

Section 4. Revision of Communications Satellite Act of 1962
    This section adds a new title VI to the 1962 Act regarding 
Satellite Services Competition and Privatization, as follows:

       TITLE VI--SATELLITE SERVICES COMPETITION AND PRIVATIZATION

            Subtitle A--Transition to a Privatized INTELSAT

Section 601. Policy of the United States
    This section states that it is the policy of the United 
States that INTELSAT be privatized in a pro-competitive manner 
as quickly as possible, but not later than January 1, 2002, 
recognizing that a reasonable transition period is required to 
achieve the comprehensive restructuring of the organization 
that the United States envisions. This section also encourages 
Inmarsat to fully implement its privatization framework.
Section 602. Role of COMSAT
    This section requires COMSAT, as United States Signatory, 
to act as an aggressive advocate of United States policy in 
favor of a pro-competitive privatization of INTELSAT. In so 
doing, COMSAT is required to consult fully with the United 
States government prior to exercising its voting rights with 
respect to any matter related to INTELSAT's privatization, and 
to comply fully with any instructions issued by the United 
States. Further, this section also provides for the case where 
the United States Signatory, COMSAT, is acquired after the date 
of enactment of this section, by requiring the President and 
the Federal Communications Commission (the Commission) to 
ensure that the instructional process between the United States 
Government and COMSAT safeguards against conflicts of interest.
    The Committee does not intend that the consultative 
requirements of this section should in any way inhibit the 
timely exercise of COMSAT's voting rights in support of United 
States Government efforts to accomplish a rapid and complete 
pro-competitive privatization of INTELSAT that complies with 
the requirements set forth in sections 612(b) and 613(c). For 
example, the Committee does not intend to require that in order 
for communications to be deemed valid instructions from the 
United States Government to COMSAT (or any acquiring entity) 
that they be set forth in writing as such a requirement ignores 
the realities of timing in international negotiations.
    Subsection (b) requires the President and the Commission to 
report to Congress annually on the progress of privatization 
efforts.
Section 603. Restrictions pending privatization
    This section prohibits INTELSAT from directly entering the 
United States communications market to provide space segment or 
satellite communications services to carriers or end-users 
until after there has been a pro-competitive privatization in 
accordance with the criteria set forth in section 613(c).
    This section embraces the view that any satellite 
privatization legislation must include incentives for INTELSAT 
to privatize in a pro-competitive manner. The prospect of 
expanded market accessin the most lucrative telecommunications 
market in the world--the United States market--serves as a significant 
incentive for INTELSAT to achieve a rapid pro-competitive 
privatization. Therefore, the Committee has decided to withhold direct 
market access from INTELSAT until it is privatized.

    Subtitle B--Actions to Ensure Pro-competitive Satellite Services

Section 611. Privatization

    This section directs the President to seek to conclude a 
pro-competitive privatization of INTELSAT no later than January 
1, 2002. The President shall seek to confirm the outcome of the 
privatization negotiations through a final decision of the 
INTELSAT Assembly of Parties prior to that date, and to ensure 
that a subsequent initial public offering of stock of the 
privatized INTELSAT entity occurs in a timely fashion, taking 
into account the relative market conditions. The Committee 
intends to encourage INTELSAT to proceed to a public offering 
as quickly as possible, but does not intend to establish an 
exact timeline which would completely prohibit taking into 
consideration the realities of the marketplace, particularly 
the marketplace for stock offering by satellite companies. In 
the transformation of INTELSAT into a normal commercial entity, 
the Committee intends to allow INTELSAT to proceed with a 
public stock offering in a manner consistent with normal 
business considerations.
    The President and the Commission are also directed to 
ensure the privatization of Inmarsat continues in a pro-
competitive manner.

Section 612. Provision of services in the United States by privatized 
        affiliates of IGOs

    Subsection (a) requires the Commission to apply to extend 
its DISCO II rules to a privatized affiliate or successor of an 
IGO. There will be a presumption in favor of any application or 
letter of intent submitted by a privatized affiliate or 
successor of an IGO if such affiliate or successor is licensed 
by a country that is a member of the World Trade Organization 
(WTO) and the services to be offered are included in the 
commitments of the United States under the WTO Basic Agreement 
on Telecommunications Services (WTO Basic Telecom Agreement). 
The Commission may attach conditions to the approval if the IGO 
affiliate or successor raises the potential for competitive 
harm; in exceptional cases, it may also deny the application 
where the IGO affiliate or successor would pose a very high 
risk to competition in the United States satellite market. If 
the IGO affiliate or successor is not licensed by a WTO member 
country, then the Commission should apply the existing Eco-Sat 
test for market entry by entities from non-WTO member countries 
set out in the Commission's DISCO II decision.
    Subsection (b) is applicable only to IGO affiliates. It 
sets forth factors related to an IGO affiliate and its 
structure, degree of independence and ability to benefit from 
any continued relationship with the IGO that the Commission 
should use in determining under subsection (a)(2) whether the 
IGO affiliate raises the potential for competitive harm.
    Subsection (c) recognizes that there is no further need for 
such a determination under subsection (b) once the IGO is pro-
competitively privatized consistent with section 613. Thus, 
upon approval of an application pursuant to section 613(d) this 
provision ceases to have effect.
    In subsection (d), the Committee clarifies that once the 
determination under section 613 has been made, the Commission 
may then proceed to make a public interest determination based 
on traditional factors applied to any FCC application. While it 
is not intended by this provision that the Commission may 
deviate from the statutory criteria provided in section 613 
pertaining to its evaluation of the implementation of 
privatization and, further, it is expected that the Commission 
would give due deference to the public interest benefits of 
market access for a pro-competitively privatized INTELSAT, this 
section is not intended to confine the Commission's public 
interest determination to factors related to privatization.

Section 613. Presidential negotiating objectives and FCC criteria for 
        privatized IGOs

    Subsection (a) requires that, within 30 days after a final 
decision on the legal structure and characteristics of a 
privatized INTELSAT by the INTELSAT Assembly of Parties, the 
President shall transmit to Congress a report on (1) the extent 
to which this decision meets the criteria set forth in section 
613(d) and (2) whether entry into the United States 
communications markets by the privatized INTELSAT or Inmarsat 
will not likely distort competition. In determining whether 
entry by a privatized INTELSAT or Inmarsat will not likely 
distort competition, the President needs to take into 
consideration all other relevant competitive factors, including 
the structure of other satellite operators.
    Subsection (b) sets forth the 3 purposes that the criteria 
contained in section 613(c) serves: (1) the negotiating 
objectives to be used by the President and COMSAT to achieve 
the privatization of INTELSAT by January 1, 2002, as well as 
the continued privatization of Inmarsat; (2) the standard for 
measuring under section 613(a) whether negotiations on 
privatization of INTELSAT and Inmarsat have resulted in an 
acceptable framework for privatization; and (3) the licensing 
criteria to be used by the Commission in determining whether 
the accepted pro-competitive framework has been properly 
implemented.
    Subsection (c) contains the criteria for the 3 purposes set 
forth in (b). The Committee does not intend that any one 
criterion will be given greater scrutiny or importance by the 
Commission over another in identifying a pro-competitively 
privatized INTELSAT or Inmarsat. The Committee notes the need 
for due consideration of the international connectivity 
requirements of ``thin route'' countries, and encourages all 
competitive international facilities-based service providers, 
both fiber optic submarine cable and satellite operators, to 
seek to provide service to those ``thin route'' countries.
    Subsection (d) provides for the Commission, after the 
Presidential report to Congress under (a), to determine whether 
the privatization objectives of subsection (c) have been 
implemented by the privatized IGO. The Committee intends that 
the Commission shall neither expand nor contract the specific 
list of criteria for purposes of determining whether a pro-
competitive privatization hasbeen implemented. Once it has 
determined, the Commission may based on public interest reasons 
unrelated to privatization implementation decide to condition or deny 
an application.
    The Committee notes that INTELSAT has constructed its 
headquarters building in the International Center managed by 
the Department of State under the International Center Act 
(Public Law 90-553). INTELSAT has made substantial investments 
in its telecommunications infrastructure at this headquarters 
site, and INTELSAT's continued presence would be an asset both 
to the International Center and to the District of Columbia. 
The Committee would therefore encourage the Department of State 
to negotiate an appropriate modification or novation of the 
underlying land lease for the International Center property 
that would permit INTELSAT to remain in its present 
headquarters after privatization.

Section 614. Failure to privatize in a timely manner

    This section sets forth the actions to be taken by the 
President in the event that INTELSAT fails to fully privatize 
as provided in section 611 by January 1, 2002. Should INTELSAT 
fail to privatize by January 1, 2002, the President is directed 
to (1) instruct all government agencies to grant a preference 
for the procurement of satellite services from commercial 
providers of such services rather than IGOs; (2) immediately 
commence deliberations on additional measures that can be 
implemented to ensure rapid privatization; (3) report those 
measures to the Congress no later than March 31, 2002; and (4) 
withdraw the United States Government as a Party from INTELSAT.
    Subsection (b) reserves to the President, after 
consultation with Congress, the ability to determine that it is 
in the national interest to provide a reasonable extension of 
time for INTELSAT to complete its privatization. The Committee 
recognizes that there may, for reasons outside the control of 
INTELSAT, be unintended delays or other hindrances to the 
achievement of the pro-competitive privatization.

              Subtitle C--COMSAT Governance and Operation

Section 621. Elimination of privileges and immunities

    Subsection (a) eliminates any privileges and immunities 
that COMSAT has as a result if being the United States 
Signatory to INTELSAT, with narrow exceptions provided for 
during the transition period to privatization and elimination 
of the role of Signatories and Parties. The narrow exceptions 
for which COMSAT retains its privileges and immunities are for 
action taken as Signatory to INTELSAT or Inmarsat upon the 
instructions of the United States Government or when fulfilling 
its Signatory obligations under the INTELSAT Operating 
Agreement.
    Subsection (b) limits COMSAT's liability for actions taken 
as a signatory or a representative of the United States to 
COMSAT's percentage of responsibility as determined by the 
court. In any event, the Committee does not intend that the 
percentage of responsibility would correspond to any percentage 
greater than COMSAT's ownership share in INTELSAT.
    Subsection (c) provides, as a matter of equity, that the 
elimination of privileges and immunities contained in this 
section shall apply only to actions or decisions taken by 
COMSAT after the date of enactment of this section.

Section 622. Abrogation of contracts prohibited

    This section prohibits the abrogation of contracts, 
including tariffs in the nature of contracts, or agreements 
involving COMSAT or INTELSAT, or of any specific terms or 
conditions in such contracts or agreements in force on the date 
of enactment. In addition, this section prohibits the 
Commission from permitting, by rulemaking or any other means, 
the invalidation of any such contracts or agreements. The 
Committee believes that there is no justification for allowing 
the abrogation of any such contracts, and that with respect to 
the contracts between COMSAT and its customers, they were bid 
and won in a competitive environment, including both 
international satellite and fiber optic submarine cables.
    Government abrogation of private contracts is an 
extraordinary remedy that it has only been applied four times 
since enactment of the Communications Act of 1934, and only 
then under the extreme circumstances when long-term contracts 
had been used to freeze an entire market. And both the FCC and 
a U.S. district court have rejected arguments that the 
circumstances exist to for the government to abrogate COMSAT's 
long-term contracts. Moreover, such an action seems 
particularly unwarranted where COMSAT's customers are both its 
competitors and much larger corporations, and the FCC has 
determined that these Contracts do not impede Comsat's 
customers from switching service providers.
    Congress is also concerned that because COMSAT is a 
private, investor-owned entity, and contracts are property 
rights, such a government-mandated taking of this property 
could be deemed unlawful. Moreover, any attempted congressional 
adjudication that COMSAT has an unlawful monopoly, and 
therefore its contracts should be taken away, could be 
determined to usurp the judiciaries function and be an 
unconstitutional Bill of Attainder.

Section 623. Permitted COMSAT investment

    This section states that nothing in the Act shall be 
construed to preclude COMSAT from investing in or owning 
satellites or other facilities independent of INTELSAT or from 
providing any type of service through the capacity of satellite 
systems other than INTEL SAT. Nor should this section be 
construed to restrict COMSAT in the type of contracts it can 
enter into or services it can provide via these independent 
facilities or satellites.

                     Subtitle D--General Provisions

Section 631. Promotion of efficient use of orbital slots and spectrum

    This section mandates that all satellite system operators 
authorized to access the United States market make efficient 
and timely use of orbital and spectrum resources for which they 
are licensed or otherwise authorized to hold. The Committee is 
concerned about the warehousing of scarce resources that 
inhibits competition. Where assurance of such efficient and 
timely use cannot be provided, satellite system operators shall 
be required to arbitrate their rights to these procedures in 
compliance with International Telecommunications Union (ITU) 
procedures applicable to the use of such resources.

Section 632. Prohibition on procurement preferences

    This section states that, except as provided in section 61 
4, nothing in this title or the Communications Act shall be 
construed as authorizing or requiring a procurement preference 
for or bias against the use of INTELSAT or Inmarsat space 
segment capacity for the provision of communications services 
to the United States government. The Committee intends this 
section to clarify that it is the policy of the United States 
that, except as specifically provided in this title, IGO or IGO 
affiliated satellite systems are to be accorded the exact same 
treatment in Federal government procurement processes as any 
commercial satellite system.

Section 633. Satellite auctions

    This section prohibits the Commission from assigning by 
competitive bidding either orbital locations or spectrum used 
for the provision of international or global satellite 
communications services.

Section 634. Relationships to other law

    This section states that the provisions of this Act shall 
govern in the event of any inconsistency with provisions of the 
Communications Act.

Section 635. Exclusivity arrangements

    Subsection (a) prohibits any satellite system operator from 
acquiring or enjoying an exclusive right to handle 
communications traffic to or from the United States and any 
other country by reason of any concession, contract, 
understanding or working arrangement to which the satellite 
system operator is a party. The Committee intent here is simply 
to ensure that satellite system operators do not negotiate or 
seek to negotiate exclusive market access rights with the 
national licensing authorities, not to prohibit satellite 
systems from being the sole system operator or service provider 
for service to between a national market and the United States. 
To do otherwise would result in Congress holding a single 
commercial entity responsible for the domestic 
telecommunications policy of every nation in which it seeks to 
conduct business. Moreover, it would undermine the 
congressional goal of fostering incentives for commercial 
entities to provide service to unserved and underserved areas 
here and around the world.
    Subsection (b) states that, in enforcing the prohibition in 
subsection (a), the Commission shall not require the 
termination of existing satellite telecommunications services 
under contract with, or a tariff commitment to, a satellite 
system operator already providing service in the United States 
as of the date of enactment of this section. This subsection 
further provides that the Commission may, if it finds it in the 
public interest, require the termination of new services to the 
country that the satellite operator has successfully negotiated 
the exclusive right to handle traffic.

                        Subtitle E--Definitions

Section 641. Definitions

    Subsection (a) provides definitions for 20 terms used in 
the new title VI of the 1962 Act. Subsection (b) provides that, 
except where defined otherwise in subsection (a), terms used in 
new title VI that are defined in the Communications Act of 1934 
(47 U.S.C. 151 et seq.) have the same meaning as provided in 
that Act.

Section 5. Repeal of ownership and structural provisions

    This section makes necessary conforming and technical 
changes in the 1962 Act to reflect the substantive changes in 
that Act made by the bill, including the repeal of ownership 
limitations and certain governance provisions of the Act. For 
example, the current 10 percent and 50 percent ownership caps 
would be removed so as to enable COMSAT to have the same access 
to capital as any other commercial corporation. The other 
enumerated sections that are repealed address specific 
organization and structural restraints on COMSAT that constrain 
its ability to act as any other private corporation, actions by 
the President, the National Aeronautics and Space 
Administration, and the Commission that have been completed or 
are no longer necessary, and reports to Congress that are no 
longer necessary.

Section 6. International maritime satellite Telecommunications Act 
        amendments

    This section amends the International Maritime Satellite 
Telecommunications Act to authorize the President, in order to 
ensure the continued provision of global maritime distress and 
safety satellite telecommunications services after the 
privatization of INMARSAT, to maintain U.S. membership in the 
International Mobile Satellite Organization on behalf of the 
United States in order to ensure the continued provision of 
global maritime distress and safety satellite services after 
the privatization of INMARSAT. Subsection (b) repeals Sections 
502, 503, 504, and 505 (47 U.S.C. 751, 752, 753, and 757) 
effective on the date on which the IMSO ceases to operate 
directly a global mobile satellite system.

                      Rollcall Votes in Committee

    In accordance with paragraph 7(c) of rule XXVI of the 
Standing Rules of the Senate, the Committee provides the 
following description of the record votes during its 
consideration of S.376:
    Senator Burns, for himself, Mr. Burns, Mr. Hollings, and 
Mr. Breaux, offered an amendment in the nature of a substitute. 
By a rollcall vote of 20 yeas and 0 nays, the amendment was 
agreed to unanimously.

                        Changes in Existing Law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
material is printed in italic, existing law in which no change 
is proposed is shown in roman):

                  COMMUNICATIONS SATELLITE ACT OF 1962

      TITLE I--SHORT TITLE, DECLARATION OF POLICY AND DEFINITIONS

SEC. 101. SHORT TITLE.

    This Act may be cited as the ``Communications Satellite Act 
of 1962''.

SEC. 102. DECLARATION OF POLICY AND PURPOSE.

                            [47 U.S.C. 701]

    (a) The Congress hereby declares that it is the policy of 
the United States to establish, in conjunction and in 
cooperation with other countries, as expeditiously as 
practicable a commercial communications satellite system, as 
part of an improved global communications network, which will 
be responsive to public needs and national objectives, which 
will serve the communication needs of the United States and 
other countries, and which will contribute to world peace and 
understanding.
    (b) The new and expanded telecommunication services are to 
be made available as promptly as possible and are to be 
extended to provide global coverage at the earliest practicable 
date. In effectuating this program, care and attention will be 
directed toward providing such services to economically less 
developed countries and areas as well as those more highly 
developed, toward efficient and economical use of the 
electromagnetic frequency spectrum, and toward the reflection 
of the benefits of this new technology in both quality of 
services and charges for such services.
    (c) In order to facilitate this development and to provide 
for the widest possible participation by private enterprise, 
United States participation in the global system shall be in 
the form of a private corporation, subject to appropriate 
governmental regulation. It is the intent of Congress that all 
authorized users have nondiscriminatory access to the system; 
that maximum competition be maintained in the provision of 
equipment and services utilized by the system; that the 
corporation created under this Act be so organized and operated 
as to maintain and strengthen competition in the provision of 
communications services to the public; and that the activities 
of the corporation created under this Act and of the persons or 
companies participating in the ownership of the corporation 
shall be consistent with the Federal antitrust laws.
    (d) It is not the intent of Congress by this Act to 
preclude the use of the communications satellite system for 
domestic communication services where consistent with the 
provision of this Act nor to preclude the creation of 
additional communications satellite systems, if required to 
meet unique governmental needs or if otherwise required in the 
national interest.

SEC. 103. DEFINITIONS.

                            [47 U.S.C. 702]

    As used in this Act, and unless the context otherwise 
requires--
          (1) the term ``communications satellite system'' 
        refers to a system of communications satellites in 
        space whose purpose is to relay telecommunication 
        information between satellite terminal stations, 
        together with such associated equipment and facilities 
        for tracking, guidance, control, and command functions 
        as are not part of the generalized launching, tracking, 
        control, and command facilities for all space purposes;
          (2) the term ``satellite terminal station'' refers to 
        a complex of communication equipment located on the 
        earth's surface, operationally connected with one or 
        more terrestrial communication systems, and capable of 
        transmitting telecommunications to or receiving 
        telecommunications from a communications satellite 
        system;
          (3) the term ``communications satellite'' means an 
        earth satellite which is intentionally used to relay 
        telecommunications information;
          (4) the term ``associated equipment and facilities'' 
        refers to facilities other than satellite terminal 
        stations and communications satellites, to be 
        constructed and operated for the primary purpose of a 
        communications satellite system, whether for 
        administration and management, for research and 
        development, or for direct support of space operations;
          (5) the term ``research and development'' refers to 
        the conception, design, and first creation of 
        experimental or prototype operational devices for the 
        operation of a communications satellite system, 
        including the assembly of separate components into a 
        working whole, as distinguished from the term 
        ``production,'' which relates to the construction of 
        such devices to fixed specifications compatible with 
        repetitive duplication for operational applications;
          (6) the term ``telecommunication'' means any 
        transmission, emission or reception of signs, signals, 
        writings, images, and sounds or intelligence of any 
        nature by wire, radio, optical, or other 
        electromagnetic systems;
          (7) the term ``communications common carrier'' has 
        the same meaning as the term ``common carrier'' has 
        when used in the Communications Act of 1934, as 
        amended, and in addition includes, but only for 
        purposes of sections 303 and 304, any individual, 
        partnership, association, joint-stock company, trust, 
        corporation, or other entity which owns or controls, 
        directly or indirectly, or is under direct or indirect 
        common control with, any such carrier; and the term 
        ``authorized carrier'', except as otherwise provided 
        for purposes of section 304 by section 304(b)(1), means 
        a communications common carrier which has been 
        authorized by the Federal Communications Commission 
        under the Communications Act of 1934, as amended, to 
        provide services by means of communications satellites;
          (8) the term ``corporation'' means the corporation 
        authorized by title III of this Act;
          (9) the term ``Administration'' means the National 
        Aeronautics and Space Administration; and
          (10) the term ``Commission'' means the Federal 
        Communications Commission.

        TITLE II--FEDERAL COORDINATION, PLANNING, AND REGULATION


[SEC. 201. IMPLEMENTATION OF POLICY.

                            [47 U.S.C. 721]

    [In order to achieve the objectives and to carry out the 
purposes of this Act--
          [(a) the President shall--
                  [(1) aid in the planning and development and 
                foster the execution of a national program for 
                the establishment and operation, of a 
                commercial communications satellite system;
                  [(2) provide for continuous review of all 
                phases of the development and operation of such 
                a system, including the activities of a 
                communications satellite corporation authorized 
                under title III of this Act;
                  [(3) coordinate the activities of 
                governmental agencies with responsibilities in 
                the field of telecommunication, so as to insure 
                that there is full and effective compliance at 
                all times with the policies set forth in this 
                Act;
                  [(4) exercise such supervision over 
                relationships of the corporation with foreign 
                governments or entities or with international 
                bodies as may be appropriate to assure that 
                such relationships shall be consistent with the 
                national interest and foreign policy of the 
                United States;
                  [(5) insure that timely arrangements are made 
                under which there can be foreign participation 
                in the establishment and use of a 
                communications satellite system;
                  [(6) take all necessary steps to insure the 
                availability and appropriate utilization of the 
                communications satellite system for general 
                governmental purposes except where a separate 
                communications satellite system is required to 
                meet unique governmental needs, or is otherwise 
                required in the national interest; and
                  [(7) to exercise his authority as to help 
                attain coordinated and efficient use of the 
                electromagnetic spectrum and the technical 
                compatibility of the system with existing 
                communications facilities both in the United 
                States and abroad.
          [(b) the National Aeronautics and Space 
        Administration shall--
                  [(1) advise the Commission on technical 
                characteristics of the communications satellite 
                system;
                  [(2) cooperate with the corporation in 
                research and development to the extent deemed 
                appropriate by the Administration in the public 
                interest;
                  [(3) assist the corporation in the conduct of 
                its research and development program by 
                furnishing to the corporation, when requested, 
                on a reimbursable basis, such satellite 
                launching and associated services as the 
                Administration deems necessary for the most 
                expeditious and economical development of the 
                communications satellite system;
                  [(4) consult with the corporation with 
                respect to the technical characteristics of the 
                communications satellite system;
                  [(5) furnish to the corporation, on request 
                and on a reimbursable basis, satellite 
                launching and associated services required for 
                the establishment, operation, and maintenance 
                of the communications satellite system approved 
                by the Commission; and
                  [(6) to the extent feasible, furnish other 
                services, on a reimbursable basis, to the 
                corporation in connection with the 
                establishment and operation of the system.
          [(c) the Federal Communications Commission, in its 
        administration of the provisions of the Communications 
        Act of 1934, as amended, and as supplemented by this 
        Act, shall--
                  [(1) insure effective competition, including 
                the use of competitive bidding where 
                appropriate, in the procurement by the 
                corporation and communications common carriers 
                of apparatus, equipment, and services required 
                for the establishment and operation of the 
                communications satellite system and satellite 
                terminal stations; and the Commission shall 
                consult with the Small Business Administration 
                and solicit its recommendations on measures and 
                procedures which will insure that small 
                business concerns are given an equitable 
                opportunity to share in the procurement program 
                of the corporation for property and services, 
                including but not limited to research, 
                development, construction, maintenance, and 
                repair.
                  [(2) insure that all present and future 
                authorized carriers shall have 
                nondiscriminatory use of, and equitable access 
                to, the communications satellite system and 
                satellite terminal stations under just and 
                reasonable charges, classifications, practices, 
                regulations, and other terms and conditions and 
                regulate the manner in which available 
                facilities of the system and stations are 
                allocated among such users thereof;
                  [(3) in any case where the Secretary of 
                State, after obtaining the advice of the 
                Administration as to technical feasibility, has 
                advised that commercial communication to a 
                particular foreign point by means of the 
                communications satellite system and satellite 
                terminal stations should be established in the 
                national interest, institute forthwith 
                appropriate proceedings under section 214(d) of 
                the Communications Act of 1934, as amended, to 
                require the establishment of such communication 
                by the corporation and the appropriate common 
                carrier or carriers;
                  [(4) insure that facilities of the 
                communications satellite system and satellite 
                terminal stations are technically compatible 
                and interconnected operationally with each 
                other and with existing communications 
                facilities;
                  [(5) prescribe such accounting regulations 
                and systems and engage in such ratemaking 
                procedures as will insure that any economies 
                made possible by a communications satellite 
                system are appropriately reflected in rates for 
                public communication services;
                  [(6) approve technical characteristics of the 
                operational communications satellite system to 
                be employed by the corporation and of the 
                satellite terminal stations; and
                  [(7) grant appropriate authorization for the 
                construction and operation of each satellite 
                terminal station, either to the corporation or 
                to one or more authorized carriers or to the 
                corporation and one or more such carriers 
                jointly, as will best serve the public 
                interest, convenience, and necessity. In 
                determining the public interest, convenience, 
                and necessity the Commission shall authorize 
                the construction and operation of such stations 
                by communications common carriers or the 
                corporation, without preference to either;
                  [(8) authorize the corporation to issue any 
                shares of capital stock, except the initial 
                issue of capital stock referred to in section 
                304(a), or to borrow any moneys, or to assume any 
                obligation in respect of the securities of any 
                other person, upon finding that such issuance, 
                borrowing, or assumption is compatible with the 
                public interest, convenience, and necessity and 
                is necessary or appropriate for or consistent with 
                carrying out the purposes and objectives of this 
                Act by the corporation;
                  [(9) insure that no substantial additions are 
                made by the corporation or carriers with 
                respect to facilities of the system or 
                satellite terminal stations unless such 
                additions are required by the public interest, 
                convenience, and necessity;
                  [(10) require, in accordance with the 
                procedural requirements of section 214 of the 
                Communications Act of 1934, as amended, that 
                additions be made by the corporation or 
                carriers with respect to facilities of the 
                system or satellite terminal stations where 
                such additions would serve the public interest, 
                convenience, and necessity; and
                  [(11) make rules and regulations to carry out 
                the provisions of this Act.]

SEC. 201. IMPLEMENTATION OF POLICY.

    The Federal Communications Commission, in its 
administration of the Communications Act of 1934, shall make 
rules and regulations to carry out the provisions of this Act.

    TITLE III--[CREATION OF A COMMUNICATIONS SATELLITE] CORPORATION

[SEC. 301. CREATION OF CORPORATION.

                            [47 U.S.C. 731]

    [There is authorized to be created a communications 
satellite corporation for profit which will not be an agency or 
establishment of the United States Government.]

SEC. 301. CORPORATION.

    The corporation organized under the provisions of this 
title, as this title existed before the enactment of the Open-
market Reorganization for the Betterment of International 
Telecommunications Act, known as COMSAT, and its successors and 
assigns, are subject to the provisions of this Act. The right 
to repeal, alter, or amend this Act at any time is expressly 
reserved.

[SEC. 302. APPLICABLE LAWS.

                            [47 U.S.C. 732]

    [The corporation shall be subject to the provisions of this 
Act and, to the extent consistent with this Act, to the 
District of Columbia Business Corporation Act. The right to 
repeal, alter, or amend this Act at any time is expressly 
reserved.

[SEC. 303. DIRECTORS AND OFFICERS.

                            [47 U.S.C. 733]

    [(a) The corporation shall have a board of directors 
consisting of fifteen individuals who are citizens of the 
United States, of whom one shall be elected annually by the 
board to serve as chairman. Three members of the board shall be 
appointed by the President of the United States, by and with 
the advice and consent of the Senate, effective the date on 
which the other members are elected, and for terms of three 
years or until their successors have been appointed and 
qualified, and any member so appointed to fill a vacancy shall 
be appointed only for the unexpired term of the director whom 
he succeeds. The remaining twelve members of the board shall be 
elected annually by the stockholders. Six of such members shall 
be elected by those stockholders who are not communications 
common carriers, and the remaining six such members shall be 
elected by the stockholders who are communications common 
carriers, except that if the number of shares of the voting 
capital stock of the corporation issued and outstanding and 
owned either directly or indirectly by communications common 
carriers as of the record date for the annual meeting of 
stockholders is less than 45 per centum of the total number of 
shares of the voting capital stock of the corporation issued 
and outstanding, the numbers of members to be elected at such 
meeting by each group of stockholders shall be determined in 
accordance with the following table:

----------------------------------------------------------------------------------------------------------------
                                                                                   The number of
                                                                                   members which
                                                                                   stockholders   And the number
 When the number of shares of the voting                                              who are       of members
 capital stock of the corporation issued                                          communications    which other
    and outstanding and owned either                But not less than--               common       stockholders
directly or indirectly by communications                                           carriers are    are entitled
     common carriers is less than--                                                 entitled to   to elect shall
                                                                                    elect shall        be--
                                                                                       be--
----------------------------------------------------------------------------------------------------------------
45 per centum...........................  40 per centum.........................         5               7
40 per centum...........................  35 per centum.........................         4               8
35 per centum...........................  25 per centum.........................         3               9
25 per centum...........................  15 per centum.........................         2              10
15 per centum...........................   8 per centum.........................         1              11
 8 per centum...........................  ......................................         0              12
----------------------------------------------------------------------------------------------------------------

No stockholder who is a communications common carrier and no 
trustee for such a stockholder shall vote, either directly or 
indirectly, through the votes of subsidiaries or affiliated 
companies, nominees, or any persons subject to his direction or 
control, for more than three candidates for membership on the 
board, except that in the event the number of shares of the 
voting capital stock of the corporation issued and outstanding 
and owned either directly or indirectly by communications 
common carriers as of the record date for the annual meeting is 
less than 8 per centum of the total number of shares of the 
voting capital stock of the corporation issued and outstanding, 
any stockholder who is a communications common carrier shall be 
entitled to vote at such meeting for candidates for membership 
on the board in the same manner as all other stockholders. 
Subject to the foregoing limitations, the articles of 
incorporation of the corporation shall provide for cumulative 
voting under section 327(d) of the District of Columbia 
Business Corporation Act (D.C. Code, sec. 29-327(d)). The 
articles of incorporation of the corporation may be amended, 
altered, changed, or repealed by a vote of not less than 66\2/
3\ per centum of the outstanding shares of the voting capital 
stock of the corporation owned by stockholders who are 
communications common carriers and by stockholders who are not 
communications common carriers, voting together if such vote 
complies with all other requirements of this Act and of the 
articles of incorporation of the corporation withrespect to the 
amendment, alteration, change, or repeal of such articles. The 
corporation may adopt such bylaws as shall, notwithstanding the 
provisions of section 336 of the District of Columbia Business 
Corporation Act (D.C. Code, sec. 29-336(d)), provide for the continued 
ability of the board to transact business under such circumstances of 
national emergency as the President of the United States, or the 
officer designated by him, may determine, after February 18, 1969, 
would not permit a prompt meeting of a majority of the board to 
transact business.
    [(b) The corporation shall have a president, and such other 
officers as may be named and appointed by the board, at rates 
of compensation fixed by the board, and serving at the pleasure 
of the board. No individual other than a citizen of the United 
States may be an officer of the corporation. No officer of the 
corporation shall receive any salary from any source other than 
the corporation during the period of his employment by the 
corporation.

[SEC. 304. FINANCING OF THE CORPORATION.

                            [47 U.S.C. 734]

    [(a) The corporation is authorized to issue and have 
outstanding, in such amounts as it shall determine, shares of 
capital stock, without par value, which shall carry voting 
rights and be eligible for dividends. The shares of such stock 
initially offered shall be sold in a manner to encourage the 
widest distribution to the American public. Subject to the 
provisions of subsections (b) and (d) of this section, shares 
of stock offered under this subsection may be issued to and 
held by any person.
    [(b)(1) For the purposes of this section the term 
``authorized carrier'' shall mean a communications common 
carrier which is specifically authorized or which is a member 
of a class of carriers authorized by the Commission to own 
shares of stock in the corporation upon a finding that such 
ownership will be consistent with the public interest, 
convenience, and necessity.
    [(2) Only those communications common carriers which are 
authorized carriers shall own shares of stock in the 
corporation at any time, and no other communications common 
carrier shall own shares either directly or indirectly through 
subsidiaries or affiliated companies, nominees, or any persons 
subject to its direction or control. At no time after the 
initial issue is completed shall the aggregate of the shares of 
voting stock of the corporation owned by authorized carriers 
directly or indirectly through subsidiaries or affiliated 
companies, nominees, or any persons subject to their direction 
or control exceed 50 per centum of such shares issued and 
outstanding.
    [(3) At no time shall any stockholder who is not an 
authorized carrier, or any syndicate or affiliated group of 
such stockholders, own more than 10 per centum of the shares of 
voting stock of the corporation issued and outstanding.
    [(c) The corporation is authorized to issue, in addition to 
the stock authorized by subsection (a) of this section, 
nonvoting securities, bonds, debentures, and other certificates 
of indebtedness as it may determine. Such nonvoting securities, 
bonds, debentures, or other certificates of indebtedness of the 
corporation as a communications common carrier may own shall be 
eligible for inclusion in the rate base of the carrier to the 
extent allowed by the Commission. The voting stock of the 
corporation shall not be eligible for inclusion in the rate 
base of the carrier.
    [(d) Not more than an aggregate of 20 per centum of the 
shares of stock of the corporation authorized by subsection (a) 
of this section which are held by holders other than authorized 
carriers may be held by persons of the classes described in 
subsection (a) and paragraphs (1) through (4) of subsection (b) 
of section 310 of the Communications Act of 1934, as amended 
(47 U.S.C. 310).
    [(e) The requirement of section 345(b) of the District of 
Columbia Business Corporation Act (D.C. Code, sec. 29-345(b)) 
as to the percentage of stock which a stockholder must hold in 
order to have the rights of inspection and copying set forth in 
that subsection shall not be applicable in the case of holders 
of the stock of the corporation, and they may exercise such 
rights without regard to the percentage of stock they hold.
    [(f) Upon application to the Commission by any authorized 
carrier and after notice and hearing, the Commission may compel 
any other authorized carrier which owns shares of stock in the 
corporation to transfer to the applicant, for a fair and 
reasonable consideration, a number of such shares as the 
Commission determines will advance the public interest and the 
purposes of this Act. In its determination with respect to 
ownership of shares of stock in the corporation, the 
Commission, whenever consistent with the public interest, shall 
promote the widest possible distribution of stock among the 
authorized carriers.

SEC. [305.] 302. PURPOSES AND POWERS OF THE CORPORATION.

                             [47 U.S. 735]

    (a) In order to achieve the objectives and to carry out the 
purposes of this Act, the corporation is authorized to--
          (1) plan, initiate, construct, own, manage, and 
        operate itself or in conjunction with foreign 
        governments or business entities a commercial 
        communications satellite system;
          (2) furnish, for hire, channels of communication to 
        United States communications common carriers and to 
        other authorized entities, foreign and domestic; and
          (3) own and operate satellite terminal stations when 
        licensed by the Commission under section 201(c)(7).
    (b) Included in the activities authorized to the 
corporation for accomplishment of the purposes indicated in 
subsection (a) of this section, are, among others not 
specifically named--
          (1) to conduct or contract for research and 
        development related to its mission;
          (2) to acquire the physical facilities, equipment and 
        devices necessary to its operations, including 
        communications satellites and associated equipment and 
        facilities, whether by construction, purchase, or gift;
          (3) to purchase satellite launching and related 
        services from the United States Government;
          (4) to contract with authorized users, including the 
        United States Government, for the services of the 
        communications satellite system; and
          (5) to develop plans for the technical specifications 
        of all elements of the communications satellite system.
    [(c) To carry out the foregoing purposes, the corporation 
shall have the usual powers conferred upon a stock corporation 
by the District of Columbia Business Corporation Act.]

                        TITLE IV--MISCELLANEOUS


SEC. 401. APPLICABILITY OF COMMUNICATIONS ACT OF 1934.

                            [47 U.S.C. 741]

    The corporation shall be deemed to be a common carrier 
within the meaning of section 3(h) of the Communications Act of 
1934, as amended, and as such shall be fully subject to the 
provisions of title II and title III of that Act. The provision 
of satellite terminal station facilities by one communication 
common carrier to one or more other communications common 
carriers shall be deemed to be a common carrier activity fully 
subject to the Communications Act. Whenever the application of 
the provisions of this Act shall be inconsistent with the 
application of the provisions of the Communications Act, the 
provisions of this Act shall govern.

[SEC. 402. NOTICE OF FOREIGN BUSINESS NEGOTIATIONS.

                            [47 U.S.C. 742]

    [Whenever the corporation shall enter into business 
negotiations with respect to facilities, operations, or 
services authorized by this Act with any international or 
foreign entity, it shall notify the Department of State of the 
negotiations, and the Department of State shall advise the 
corporation of relevant foreign policy considerations. 
Throughout such negotiations the corporation shall keep the 
Department of State informed with respect to such 
considerations. The corporation may request the Department of 
State to assist in the negotiations, and that Department shall 
render such assistance as may be appropriate.

SEC. 403. SANCTIONS.

                            [47 U.S.C. 743]

    [(a) If the corporation created pursuant to this Act shall 
engage in or adhere to any action, practices, or policies 
inconsistent with the policy and purposes declared in section 
102 of this Act, or if the corporation or any other person 
shall violate any provision of this Act, or shall obstruct or 
interfere with any activities authorized by this Act, or shall 
refuse, fail, or neglect to discharge his duties and 
responsibilities under this Act, or shall threaten any such 
violation, obstruction, interference, refusal, failure, or 
neglect, the district court of the United States for any 
district in which such corporation or other person resides or 
may be found shall have jurisdiction, except as otherwise 
prohibited by law, upon petition of the Attorney General of the 
United States, to grant such equitable relief as may be 
necessary or appropriate to prevent or terminate such conduct 
or threat.]
    [(b)] (a) Nothing contained in this section shall be 
construed as relieving any person of any punishment, liability, 
or sanction which may be imposed otherwise than under this Act.
    [(c)] (b) It shall be the duty of the corporation and all 
communications common carriers to comply, insofar as 
applicable, with all provisions of this Act and all rules and 
regulations promulgated thereunder.

[SEC. 404. REPORTS TO THE CONGRESS.

                            [47 U.S.C. 744]

    [The corporation shall transmit to the President and the 
Congress, annually and at such other times as it deems 
desirable, a comprehensive and detailed report of its 
operations, activities, and accomplishments under this Act.]

      TITLE V--INTERNATIONAL MARITIME SATELLITE TELECOMMUNICATIONS


SEC. 501. SHORT TITLE.

    This title may be cited as the ``International Maritime 
Satellite Telecommunications Act''.

[SEC. 502. DECLARATION OF POLICY AND PURPOSE.

                            [47 U.S.C. 751]

    [(a) The Congress hereby declares that it is the policy of 
the United States to provide for the participation of the 
United States in the International Maritime Satellite 
Organization (hereinafter in this title referred to as 
``INMARSAT'') in order to develop and operate a global maritime 
satellite telecommunications system. Such system shall have 
facilities and services which will serve maritime commercial 
and safety needs of the United States and foreign countries.
    [(b) It is the purpose of this title to provide that the 
participation of the United States in INMARSAT shall be through 
the communications satellite corporation established pursuant 
to title III of this Act, which constitutes a private entity 
operating for profit, and which is not an agency or 
establishment of the Federal Government.

[SEC. 503. DESIGNATED OPERATING ENTITY.

                            [47 U.S.C. 752]

    [(a)(1) The the communications satellite corporation 
established pursuant to title III of this Act is hereby 
designated as the sole operating entity of the United States 
for participation in INMARSAT, for the purpose of providing 
international maritime satellite telecommunications services.
    [(2) The corporation may participate in and is hereby 
authorized to sign the operating agreement or other pertinent 
instruments of INMARSAT as the sole designated operating entity 
of the United States.
    [(b) The corporation--
          [(1) may own and operate satellite earth terminal 
        stations in the United States;
          [(2) shall interconnect such stations, and the 
        maritime satellite telecommunications provided by such 
        stations, with the facilities and services of United 
        States domestic common carriers and international 
        common carriers, other than any common carrier or other 
        entity in which the corporation has any ownership 
        interest, as authorized by the Commission;
          [(3) shall interconnect such stations and the 
        maritime satellite telecommunications provided by such 
        stations, with the facilities and services of private 
        communications systems, unless the Commission finds 
        that such interconnection will not serve the public 
        interest; and
          [(4) may establish, own, and operate the United 
        States share of the jointly owned international space 
        segment and associated ancillary facilities.
    [(c) The corporation shall be responsible for fulfilling 
any financial obligation placed upon the corporation as a 
signatory to the operating agreement or other pertinent 
instruments, and any other financial obligation which may be 
placed upon the corporation as the result of a convention or 
other instrument establishing INMARSAT. The corporation shall 
be the sole United States representative in the managing body 
of INMARSAT.
    [(d)(1) Any person, including the Federal Government or any 
agency thereof, may be authorized, in accordance with paragraph 
(2) or paragraph (3), to be the sole owner or operator, or 
both, of any satellite earth terminal station if such station 
is used for the exclusive purposes of training personnel in the 
use of equipment associated with the operation and maintenance 
of such station, or in carrying out experimentation relating to 
maritime satellite telecommunications services.
    [(2) If the person referred to in paragraph (1) is the 
Federal Government or any agency thereof, such satellite earth 
terminal station shall have been authorized to operate by the 
executive department charged with such responsibility.
    [(3) In any other case, such satellite earth terminal 
station shall have been authorized by the Commission.
    [(e) The Commission may authorize ownership of satellite 
earth terminal stations by persons other than the corporation 
at any time the Commission determines that such additional 
ownership will enhance the provision of maritime satellite 
services in the public interest.
    [(f) The Commission shall determine the operational 
arrangements under which the corporation shall interconnect its 
satellite earth terminal station facilities and services with 
United States domestic common carriers and international common 
carriers, other than any common carrier, system, or other 
entity in which the corporation has any ownership interest, and 
private communications systems when authorized pursuant to 
subsection (b)(3) for the purpose of extending maritime 
satellite telecommunications services within the United States 
and in other areas.
    [(g) Notwithstanding any provision of State law, the 
articles of incorporation of the corporation shall provide for 
the continued ability of the board of directors of the 
corporation to transact business under such circumstances of 
national emergency as the President or his delegate may 
determine would not permit a prompt meeting of the number of 
directors otherwise required to transact business.

[SEC. 504. IMPLEMENTATION OF POLICY.

                            [47 U.S.C. 753]

    [(a) The Secretary of Commerce shall--
          [(1) coordinate the activities of Federal agencies 
        with responsibilities in the field of 
        telecommunications (other than the Commission), so as 
        to ensure that there is full and effective compliance 
        with the provisions of this title;
          [(2) take all necessary steps to ensure the 
        availability and appropriate utilization of the 
        maritime satellite telecommunications services provided 
        by INMARSAT for general governmental purposes, except 
        in any case in which a separate telecommunications 
        system is required to meet unique governmental needs or 
        is otherwise required in the national interest;
          [(3) exercise his authority in a manner which seeks 
        to obtain coordinated and efficient use of the 
        electromagnetic spectrum and orbital space, and to 
        ensure the technical compatibility of the space segment 
        with existing communications facilities in the United 
        States and in foreign countries; and
          [(4) take all necessary steps to determine the 
        interests and needs of the ultimate users of the 
        maritime satellite telecommunications system and to 
        communicate the views of the Federal Government on 
        utilization and user needs to INMARSAT.
    [(b) The President shall exercise such supervision over, 
and issue such instructions to, the corporation in connection 
with its relationships and activities with foreign governments, 
international entities, and INMARSAT as may be necessary to 
ensure that such relationships and activities are consistent 
with the national interest and foreign policy of the United 
States.
    [(c) The Commission shall--
          [(1) institute such proceedings as may be necessary 
        to carry out the provisions of section 503 of this 
        title;
          [(2) make recommendations to the President for the 
        purpose of assisting him in his issuance of 
        instructions to the corporation;
          [(3) grant such authorizations as may be necessary 
        under title II and title III of the Communications Act 
        of 1934 to enable the corporation--
                  [(A) to provide to the public, in accordance 
                with section 503(c)(2) of this title, space 
                segment channels of communication obtained from 
                INMARSAT; and
                  [(B) to construct and operate such satellite 
                earth terminal stations in the United States as 
                may be necessary to provide sufficient access 
                to the space segment;
          [(4) grant such other authorizations as may be 
        necessary under title II and title III of this 
        Communications Act of 1934 to carry out the provisions 
        of this title;
          [(5) establish procedures to provide for the 
        continuing review of the telecommunications activities 
        of the corporation as the United States signatory to 
        the operating agreement or other pertinent instruments; 
        and
          [(6) prescribe such rules as may be necessary to 
        carry out the provisions of this title.
    [(d) The Commission is authorized to issue instructions to 
the corporation with respect to regulatory matters within the 
jurisdiction of the Commission. In the event an instruction of 
the Commission conflicts with an instruction of the President 
pursuant to subsection (b), the instructions issued by the 
President shall prevail.

[SEC. 505. DEFINITIONS.

                            [47 U.S.C. 757]

    [For purposes of this title--
          [(1) the term ``person'' includes an individual, 
        partnership, association, joint stock company, trust, 
        or corporation;
          [(2) the term ``satellite earth terminal station'' 
        means a complex of communications equipment located on 
        land, operationally interconnected with one or more 
        terrestrial communications systems, and capable of 
        transmitting telecommunications to, or receiving 
        telecommunications from, the space segment;
          [(3) the term ``space segment'' means any satellite 
        (or capacity  on  a  satellite)  maintained  under  the 
         authority of INMARSAT, for the purpose of providing 
        international maritime telecommunications services, and 
        the tracking, telemetry, command, control, monitoring, 
        and related facilities and equipment required to 
        support the operations of such satellite; and
          [(4) the term ``State'' means the several States, the 
        District of Columbia, the Commonwealth of Puerto Rico, 
        Guam, the Virgin Islands, the Trust Territory of the 
        Pacific Islands, and any other territory or possession 
        of the United States.]

SEC. 502. GLOBAL SATELLITE SAFETY SERVICES AFTER PRIVATIZATION OF 
                    BUSINESS OPERATIONS OF INMARSAT.

    In order to ensure the continued provision of global 
maritime distress and safety satellite telecommunications 
services after privatization of the business operations of 
Inmarsat, the President may maintain membership in the 
International Mobile Satellite Organization on behalf of the 
United States.

       TITLE VI--SATELLITE SERVICES COMPETITION AND PRIVATIZATION

            Subtitle A--Transition to a Privatized INTELSAT

SEC. 601. POLICY OF THE UNITED STATES.

    It is the policy of the United States to--
          (1) encourage INTELSAT to privatize in a pro-
        competitive manner as soon as possible, but not later 
        than January 1, 2002, recognizing the need for a 
        reasonable transition and process to achieve a full, 
        pro-competitive restructuring; and
          (2) work constructively with its international 
        partners in INTELSAT, and with INTELSAT itself, to 
        bring about a prompt restructuring that will ensure 
        fair competition, both in the United States as well as 
        in the global markets served by the INTELSAT system; 
        and
          (3) encourage Inmarsat's full implementation of the 
        terms and conditions of its privatization agreement.

SEC. 602. ROLE OF COMSAT.

    (a) Advocacy.--As the United States signatory to INTELSAT, 
COMSAT shall act as an aggressive advocate of pro-competitive 
privatization of INTELSAT. With respect to the consideration 
within INTELSAT of any matter related to its privatization, 
COMSAT shall fully consult with the United States government 
prior to exercising its voting rights and shall exercise its 
voting rights in a manner fully consistent with any 
instructions issued. In the event that the United States 
signatory to INTELSAT is acquired after enactment of this 
section, the President and the Commission shall assure that the 
instructional process safeguards against conflicts of interest.
    (b) Annual Reports.--The President and the Commission shall 
report annually to the Committee on Commerce of the House of 
Representatives and the Committee on Commerce, Science, and 
Transportation of the Senate, respectively, on the progress 
being made by INTELSAT and Inmarsat to privatize and complete 
privatization in a pro-competitive manner.

SEC. 603. RESTRICTIONS PENDING PRIVATIZATION.

    INTELSAT shall be prohibited from entering the United 
States market directly to provide any satellite communications 
services or space segment capacity to carriers (other than the 
United States signatory, COMSAT) or end users in the United 
States prior to achieving a pro-competitive privatization 
pursuant to section 613(a).

    Subtitle B--Actions to Ensure Pro-competitive Satellite Services

SEC. 611. PRIVATIZATION.

    (a) In General.--The President shall seek a pro-competitive 
privatization of INTELSAT as soon as practicable, but no later 
than January 1, 2002. Such privatization shall be confirmed by 
a final decision of the INTELSAT Assembly of Parties and shall 
be followed by a timely initial public offering taking into 
account relative market conditions.
    (b) Ensure Continuation of Privatization.--The President 
and the Commission shall seek to ensure that the privatization 
of Inmarsat continues in a pro-competitive manner.

SEC. 612. PROVISION OF SERVICES IN THE UNITED STATES BY PRIVATIZED 
                    AFFILIATES OF INTERGOVERNMENTAL SATELLITE 
                    ORGANIZATIONS.

    (a) In General.--With respect to any application for a 
satellite earth station or space station under title III, or 
any application under section 214, of the Communications Act of 
1934 (47 U.S.C. 301 et seq.), or any letter of intent to 
provide service in the United States via non-United States 
licensed space segment, submitted by a privatized IGO affiliate 
or successor, the Commission--
          (1) shall apply a presumption in favor of entry to an 
        IGO affiliate or successor licensed by a WTO Member for 
        services covered by United States commitments under the 
        WTO Basic Telecom Agreement;
          (2) may attach conditions to any grant of authority 
        to an IGO affiliate or successor that raises the 
        potential for competitive harm; or
          (3) shall in the exceptional case in which an 
        application by an IGO affiliate or successor would pose 
        a very high risk to competition in the United States 
        satellite market, deny the application.
    (b) Determination Factors.--In determining whether an 
application to serve the United States market by an IGO 
affiliate raises the potential for competitive harm or risk 
under (a)(2), the Commission shall consider any potential anti-
competitive or market distorting consequences of continued 
relationships or connections between an IGO and its affiliates 
including--
          (1) whether the IGO affiliate is structured to 
        prevent anti-competitive practices such as collusive 
        behavior or cross-subsidization;
          (2) the degree of affiliation between the IGO and its 
        affiliate;
          (3) whether the IGO affiliate can directly or 
        indirectly benefit from IGO privileges and immunities;
          (4) the ownership structure of the affiliate and the 
        effect of IGO and other Signatory ownership;
          (5) the existence of clearly defined arm's-length 
        conditions governing the affiliate-IGO relationship 
        including separate officers, directors, employees, and 
        accounting systems;
          (6) the existence of fair market valuing for 
        permissible business transactions between an IGO and 
        its affiliate that is verifiable by an independent 
        audit and consistent with normal commercial practice 
        and generally accepted accounting principles;
          (7) the existence of common marketing;
          (8) the availability of recourse to IGO assets for 
        credit or capital;
          (9) whether an IGO registers or coordinates spectrum 
        or orbital locations on behalf of its affiliate; and
          (10) whether the IGO affiliate has corporate charter 
        provisions prohibiting reaffiliation with the IGO after 
        privatization.
    (c) Sunset.--The provisions of subsection (b) shall cease 
to have effect upon approval of the application pursuant to 
section 613.
    (d) Public Interest Determination.--Nothing in this Act 
shall affect the Commission's ability to make a public interest 
determination concerning any application pertaining to entry 
into the United States market.

SEC. 613. PRESIDENTIAL NEGOTIATING OBJECTIVES AND FCC CRITERIA FOR 
                    PRIVATIZED IGOS.

    (a) In General.--Upon a final decision of the INTELSAT 
Assembly of Parties creating the legal structure and 
characteristics of the privatized INTELSAT and recognizing that 
Inmarsat transitioned into a private company on April 15, 1999, 
the President shall within 30 days report to the Congress on 
the extent to which such privatization framework meets each of 
the criteria in subsection (c), and whether taking into 
consideration all other relevant competitive factors, entry of 
a privatized INTELSAT or Inmarsat into the United States market 
will not be likely to distort competition.
    (b) Purpose of Privatization Criteria.--The criteria 
provided in subsection (c) shall be used as--
          (1) the negotiation objectives for achieving the 
        privatization of INTELSAT no later than January 1, 
        2002, and also for Inmarsat;
          (2) the standard for measuring, pursuant to 
        subsection (a), whether negotiations have resulted in 
        an acceptable framework for achieving the pro-
        competitive privatization of INTELSAT and Inmarsat; and
          (3) licensing criteria by the Commission in making 
        its independent determination of whether the certified 
        framework for achieving the pro-competitive 
        privatization of INTELSAT and Inmarsat has been 
        properly implemented by the privatized INTELSAT and 
        Inmarsat.
    (c) Privatization Criteria.--A pro-competitively privatized 
INTELSAT or Inmarsat--
          (1) has no privileges or immunities limiting legal 
        accountability, commercial transparency, or taxation;
          (2) has submitted to the jurisdiction of competition 
        and independent regulatory authorities of a nation that 
        is a signatory to the World Trade Organization 
        Agreement on Basic Telecommunications and that has 
        implemented or accepted the agreement's reference paper 
        on regulatory principles;
          (3) can offer assurance of an arm's-length 
        relationship in all respects between itself and any IGO 
        affiliate;
          (4) has given due consideration to the international 
        connectivity requirements of thin route countries;
          (5) can demonstrate that the valuation of assets to 
        be transferred post-privatization is in accordance with 
        generally accepted accounting principles;
          (6) has access to orbital locations and associated 
        spectrum post-privatization in accordance with the same 
        regulatory processes and fees applicable to other 
        commercial satellite systems;
          (7) conducts technical coordinations post-
        privatization under normal, established ITU procedures;
          (8) has an ownership structure in the form of a stock 
        corporation or other similar and accepted commercial 
        mechanism, and a commitment to a timely initial public 
        offering has been established for the sale or purchase 
        of company shares;
          (9) shall not acquire, or enjoy any agreements or 
        arrangements which secure, exclusive access to any 
        national telecommunications market; and
          (10) will have accomplished a privatization 
        consistent with the criteria listed in this subsection 
        at the earliest possible date, but not later than 
        January 1, 2002, for INTELSAT and Inmarsat.
    (d) FCC Independent Determination on Implementation.--After 
the President has made a report to Congress pursuant to 
subsection (a), with respect to any application for a satellite 
earth station or space station under title III or any 
application under section 214 of the Communications Act of 1934 
(47 U.S.C. 214), or any letter of intent to provide service in 
the United States via a non-United States licensed space 
segment, submitted by a privatized affiliate prior to the 
privatized IGO, or by a privatized IGO, the Commission shall 
consider whether the enumerated objectives for a pro-
competitive privatization of INTELSAT under this section have 
beenimplemented with respect to the privatized IGO, but in 
making that consideration, may neither contract or expand the 
privatization criteria in subsection (c).
    (e) Authority to Deny an Application.--Nothing in this 
section affects the Commission's authority to condition or deny 
an application on the basis of the public interest.

SEC. 614. FAILURE TO PRIVATIZE IN A TIMELY MANNER.

    (a) Report.--In the event that INTELSAT fails to fully 
privatize as provided in sections 611 by January 1, 2002, the 
President shall--
          (1) instruct all instrumentalities of the United 
        States Government to grant a preference for procurement 
        of satellite services from commercial private sector 
        providers of satellite space segment rather than IGO 
        providers;
          (2) immediately commence deliberations to determine 
        what additional measures should be implemented to 
        ensure the rapid privatization of INTELSAT;
          (3) no later than March 31, 2002, issue a report 
        delineating such other measures to the Committee on 
        Commerce of the House of Representatives, and Committee 
        on Commerce, Science, and Transportation of the Senate; 
        and
          (4) withdraw as a party from INTELSAT.
    (b) Reservation Clause.--The President may determine, after 
consulting with Congress, that in consideration of 
privatization being imminent, it is in the national interest of 
the United States to provide a reasonable extension of time for 
completion of privatization.

              Subtitle C--COMSAT Governance and Operation

SEC. 621. ELIMINATION OF PRIVILEGES AND IMMUNITIES.

    (a) Comsat.--COMSAT shall not have any privilege or 
immunity on the basis of its status as a signatory or a 
representative of the United States to INTELSAT and Inmarsat, 
except that COMSAT retains its privileges and immunities--
          (1) for those actions taken in its role as the United 
        States signatory to INTELSAT or Inmarsat upon 
        instruction of the United States Government; and
          (2) for actions taken when acting as the United 
        States signatory in fulfilling signatory obligations 
        under the INTELSAT Operating Agreement.
    (b) No Joint or Several Liability.--If COMSAT is found 
liable for any action taken in its status as a signatory or a 
representative of the party to INTELSAT, any such liability 
shall be limited to the portion of the judgment that 
corresponds to COMSAT's percentage of the responsibility, as 
determined by the trier of fact.
    (c) Prospective Effect of Elimination.--The elimination of 
privileges and immunities contained in this section shall apply 
only to actions or decisions taken by COMSAT after the date of 
enactment of the Open-market Reorganization for the Betterment 
of International Telecommunications Act.

SEC 622. ABROGATION OF CONTRACTS PROHIBITED.

    Nothing in this Act or the Communications Act of 1934 (47 
U.S.C. 151 et seq.) shall be construed to modify or invalidate 
any contract or agreement involving COMSAT, INTELSAT, or any 
terms or conditions of such agreement in force on the date of 
enactment of the Open-market Reorganization for the Betterment 
of International Telecommunications Act, or to give the 
Commission authority, by rule-making or any other means, to 
invalidate any such contract or agreement, or any terms and 
conditions of such contract or agreement.

SEC. 623. PERMITTED COMSAT INVESTMENT.

    Nothing in this Act shall be construed as precluding COMSAT 
from investing in or owning satellites or other facilities 
independent from INTELSAT, or from providing services through 
reselling capacity over the facilities of satellite systems 
independent from INTELSAT. This section shall not be construed 
as restricting the types of contracts which can be executed or 
services which may be provided by COMSAT over the independent 
satellites or facilities described in this subsection.

                     Subtitle D--General Provisions

SEC. 631. PROMOTION OF EFFICIENT USE OF ORBITAL SLOTS AND SPECTRUM.

    All satellite system operators authorized to access the 
United States market should make efficient and timely use of 
orbital and spectrum resources in order to ensure that these 
resources are not warehoused to the detriment of other new or 
existing satellite system operators.Where these assurances 
cannot be provided, satellite system operators shall arbitrate 
their rights to these resources according to ITU procedures.

SEC. 632. PROHIBITION ON PROCUREMENT PREFERENCES.

    Except pursuant to section 615 of this Act, nothing in this 
title or the Communications Act of 1934 (47 U.S.C. 151 et seq.) 
shall be construed to authorize or require any preference in 
Federal Government procurement of telecommunications services, 
for the satellite space segment provided by INTELSAT or 
Inmarsat, nor shall anything in this title or that Act be 
construed to result in a bias against the use of INTELSAT or 
Inmarsat through existing or future contract awards.

SEC. 633. SATELLITE AUCTIONS.

    Notwithstanding any other provision of law, the Commission 
shall not assign by competitive bidding orbital locations or 
spectrum used for the provision of international or global 
satellite communications services. The President shall oppose 
in the International Telecommunications Union and in other 
bilateral and multilateral negotiations any assignment by 
competitive bidding of orbital locations, licenses, or spectrum 
used for the provision of such services.

SEC. 634. RELATIONSHIP TO OTHER LAWS.

    Whenever the application of the provisions of this Act is 
inconsistent with the provisions of the Communications Act of 
1934, the provisions of this Act shall govern.

SEC. 635. EXCLUSIVITY ARRANGEMENTS.

    (a) In General.--No satellite operator shall acquire or 
enjoy the exclusive right of handling traffic to or from the 
United States, itsterritories or possessions, and any other 
country or territory by reason of any concession, contract, 
understanding, or working arrangement to which the satellite operator 
or any persons or companies controlling or controlled by the operator 
are parties.
    (b) Exception.--In enforcing the provisions of this 
subsection, the Commission--
          (1) shall not require the termination of existing 
        satellite telecommunications services under contract 
        with, or tariff commitment to, such satellite operator; 
        but
          (2) may require the termination of new services only 
        to the country that has provided the exclusive right to 
        handle traffic, if the Commission determines the public 
        interest, convenience, and necessity so requires.

                        Subtitle E--Definitions

SEC. 641. DEFINITIONS.

    (a) In General.--In this title:
          (1) INTELSAT.--The term ``INTELSAT'' means the 
        International Telecommunications Satellite Organization 
        established pursuant to the Agreement Relating to the 
        International Telecommunications Satellite 
        Organization.
          (2) Inmarsat.--The term ``Inmarsat'' means the 
        International Mobile Satellite Organization established 
        pursuant to the Convention on the International 
        Maritime Satellite Organization and may also refer to 
        INMARSAT Limited when appropriate.
          (3) COMSAT.--The term ``COMSAT'' means the 
        corporation established pursuant to title III of this 
        Act and its successors and assigns.
          (4) Signatory.--The term ``signatory'' means the 
        telecommunications entity designated by a party that 
        has signed the Operating Agreement and for which such 
        Agreement has entered into force.
          (5) Party.--The term ``party'' means, in the case of 
        INTELSAT, a nation for which the INTELSAT agreement has 
        entered into force or been provisionally applied, and 
        in the case of INMARSAT, a nation for which the 
        Inmarsat convention entered into force.
          (6) Commission.--The term ``Commission'' means the 
        Federal Communications Commission.
          (7) International telecommunication union; itu.--The 
        terms ``International Telecommunication Union'' and 
        ``ITU'' mean the intergovernmental organization that is 
        a specialized agency of the United Nations in which 
        member countries cooperate for the development of 
        telecommunications, including adoption of international 
        regulations governing terrestrial and space uses of the 
        frequency spectrum as well as use of the geostationary 
        orbital arc.
          (8) Privatized intelsat.--The term ``privatized 
        INTELSAT'' means any entity created from the 
        privatization of INTELSAT from the assets of INTELSAT.
          (9) Privatized inmarsat.--The term ``privatized 
        Inmarsat'' means any entity created from the 
        privatization of Inmarsat from the assets of Inmarsat, 
        namely INMARSAT, Ltd.
          (10) Orbital location.--The term ``orbital location'' 
        means the location for placement of a satellite in 
        geostationary orbits as defined in the International 
        Telecommunication Union Radio Regulations.
          (11) Spectrum.--The term ``spectrum'' means the range 
        of frequencies used to provide radio communication 
        services.
          (12) Space segment.--The term ``space segment'' means 
        the satellites, and the tracking, telemetry, command, 
        control, monitoring and related facilities and 
        equipment used to support the operation of satellites 
        owned or leased by INTELSAT and Inmarsat or an IGO 
        successor or affiliate.
          (13) INTELSAT agreement.--The term ``INTELSAT 
        agreement'' means the agreement relating to the 
        International Telecommunications Satellite 
        Organization, including all of its annexes (TIAS 7532, 
        23 UST 3813).
          (14) Operating agreement.--The term ``operating 
        agreement'' means--
                  (A) in the case of INTELSAT, the agreement, 
                including its annex but excluding all titles of 
                articles, opened for signature at Washington on 
                August 20, 1971, by governments or 
                telecommunications entities designated by 
                governments in accordance with the provisions 
                of The Agreement; and
                  (B) in the case of Inmarsat, the Operating 
                Agreement on the International Maritime 
                Satellite Organization, including its annexes.
          (15) Headquarters agreement.--The term ``headquarters 
        agreement'' means the binding international agreement, 
        dated November 24, 1976, between the United States and 
        INTELSAT covering privileges, exemptions, and 
        immunities with respect to the location of INTELSAT's 
        headquarters in Washington, D.C.
          (16) Direct-to-home satellite services.--The term 
        ``direct-to-home satellite services'' means the 
        distribution or broadcasting of programming or services 
        by satellite directly to the subscriber's premises 
        without the use of ground receiving or distribution 
        equipment, except at the subscriber's premises or in 
        the uplink process to the satellite.
          (17) IGO.--The term ``IGO'' means the 
        Intergovernmental Satellite organizations, INTELSAT and 
        Inmarsat.
          (18) IGO affiliate.--The term ``IGO affiliate'' means 
        any entity in which an IGO owns or has owned an equity 
        interest of 10 percent or more.
          (19) IGO successor.--The term ``IGO Successor'' means 
        an entity which holds substantially all the assets of a 
        pre-existing IGO.
          (20) Global maritime distress and safety services.--
        The term ``global maritime distress and safety 
        services'' means the automated ship-to-shore distress 
        alerting system which uses satellite and advanced 
        terrestrial systems for international distress 
        communications and promoting maritime safety in 
        general, permitting the worldwide alerting of vessels, 
        coordinated search and rescue operations, and 
        dissemination of maritime safety information.
    (b) Common Terms.--Except as otherwise provided in 
subsection (a), terms used in this title that are defined in 
section 3 of the Communications Act of 1934 (47 U.S.C. 153) 
have the meaning provided in that section.

                                  
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