**Remarks by**

#### FCC Chairman William Kennard

### AT

###  

**THE SATELLITE SEMINAR DINNER**

**INTELSAT Headquarters**

#### Wednesday, November 1, 2000

**(As prepared for delivery)**

Thank you, Walda, for that kind and generous introduction.

Good evening to all. It is a pleasure to speak before you again.

I am delighted to be here in the Intelsat headquarters building this
evening, and to get a chance to be a part of this important satellite
seminar. From what I understand, the seminar has already been extremely
productive after its second day, despite the last-minute change in
venue.

As you know, in little less than a week, our nation will be choosing its
next President. And, I must confess, I have been a little disappointed
in the quality of the discourse in this year's election. To my mind,
neither Vice-President Gore nor Governor Bush has spoken to my concerns.
In three debates, I did not hear either candidate say a word about
two-degree spacing or coordinating positions. Oh, sure they went on and
on about Social Security, education, and foreign policy, but what about
the crucial satellite issues facing America today. Aren't either of
these men concerned about swaying the satellite undecideds, or losing
the critical satellite swing vote?

Seriously, though, I want to congratulate the U.S. satellite industry
for its leadership in the global telecommunications market.

It all started almost a half-century ago with Sputnik. It was the height
of the Cold War when that first satellite traced across the sky, and in
its steady beep the world heard the first reverberations of the
Information Age.

I was all of one year old at the time Sputnik traced across the sky, but
I do remember what it was like to grow up in the Cold War, and I have
heard much of the fears of Russian espionage -- and supremacy \-- that
Sputnik once stoked in the American mind. It is a testament to the
domestic satellite industry -- and to the vision and leadership of
President John F. Kennedy -- that the United States was able to match
the considerable technological feats of the Russian people in the
following years.

We have come a long way since the days of Sputnik. Nowadays, satellites
have become an integral foundation of life in the Information Age.

An important event can take place on the other side of the world -- such
as the 2000 Olympic Games in Sydney or the recent Serb revolution in
Yugoslavia -- and within seconds it is broadcast by satellites into
homes around the globe.

Thanks to satellite images of weather patterns, people can now make much
more informed decisions on their travel and daily wardrobes \-- and can
more readily prepare for or possibly evacute from damaging and possibly
fatal storm systems.

In a boon to developed and developing nations alike, farmers can now
utilize enhanced satellite imaging to monitor -- and increase -- their
crop production.

Rabid sports fans can use satellite feeds to receive every game of their
particular favorite sport or team regardless of where they reside. I
wish they could use the same technology to receive every important
political debate \-- but I won't get into that debate tonight.

Fixed satellite services have advanced to the point where they can
simultaneously carry thousands of public network conversations around
the world.

And mobile satellite service technologies now have the ability to bring
switched public networks to every point on earth, particularly to rural
and underserved areas which need more attention.

Using satellite technology, the Central Intelligence Agency can now
watch each and every one of you as...oops, never mind. I wasn't supposed
to mention that.

Seriously though, satellites have countless applications in our current
age. And as far as using the technology to improve lives, I believe
we've only hit the tip of the iceberg.

Indeed, satellite technology holds particular promise for the nations of
the developing world. As a cornerstone of our Development Initiative,
which partners FCC regulatory expertise with emerging nations around the
globe -- in Africa, South America, and Asia -- we encourage our
colleagues overseas to think of their communications networks in
technology neutral terms. For the advantages of satellites to developing
countries deserve a full airing -- for example, satellites can service
areas where towers cannot feasibly be built.

We all know the ups and downs that are currently occurring in your
industry. But I feel this is only a reflection of the competitiveness of
the business. Visionaries and investors are willing to plan and develop
new paths for the satellite industry, and we at the FCC encourage this.

I am very encouraged by recent news reports that Motorola, under the
leadership of Chris Galvin, is taking important steps to sell the
Iridium constellation to a group of private investors. We applaud any
efforts that would keep these valuable assets in use for critical voice
communications around the globe.

We see satellite systems as excellent complements to terrestrial wired
and wireless networks \-- especially for broadband services \-- systems
that are good for the U.S. and good for the delivery of those services
to global markets.

In the broadband arena, satellites have a very important role to play.
Satellites will be needed to bridge the gap to rural areas, where it is
too costly and time-consuming to provide terrestrial broadband services.
Serving rural and remote areas is a particular strength of satellite
technology, and satellite systems really need to step up to the plate in
doing so.

We know that the ability of satellite systems to serve rural and
underserved markets is unsurpassed by terrestrial means. We want to
ensure those opportunities, and then to get out of your way so you can
get on with your business.

I also want to promote delivery of the Internet to consumers via
satellite networks so that there are more alternatives and competition
to terrestrial delivery.

The Internet is as integral to the contours of the Information Age as
satellite technology. And, in order to facilitate the satellite
industry's moving into the ISP market, the FCC is prepared to defend
U.S. satellite systems' spectrum needs at international conferences and
to continue to streamline and expedite satellite network authorizations.

Intelsat is a large part of the movement. Intelsat has been the focus of
much attention lately at the FCC. You all know now that Intelsat will
privatize as early as April next year - - a decision taken to change
from a treaty-based organization to a private company with its main
service headquarters here where we are tonight.

The creation of Intelsat was another initiative of John F. Kennedy in
the early 60s. The United States and Comsat were among its founding
members in 1964. We are enormously proud of the history and role this
organization has played. And, I am personally very pleased to see its
full privatization and transformation into a public company now just
around the corner.

One might ask, "Why privatize Intelsat?" I believe there are two
compelling reasons - -

(1) There are fast-paced requirements for more specialized and
    value-added services, as well as greater bandwidth, and

> \(2\) There is a need to maintain increasing competition with highly
> capitalized, agile, global satellite competitors and expanding global
> fiber optic and wire cable systems.

The FCC wants to see Intelsat as a strong, competitive company on a
level playing field with maximum flexibility. There must be continuity
of service and continuing global connectivity for all Intelsat customers
on a non-discriminatory basis. We want to see the transition to Intelsat
Ltd., occur smoothly. I am encouraged by the progress being made toward
this goal, and I am particularly pleased with the prospect of the
privatized company becoming an FCC licensee.

Let me return for a moment to the larger event surrounding this evening
\-- the satellite seminar. This seminar is compelled largely by
international events. Changes made to satellite regulatory requirements
and spectrum availability at the last several world radio conferences,
\--which occur at a back-breaking biannual pace -- create new and
enhanced opportunities for innovation.

Unfortunately, there is a negative side effect -- namely, the diminished
ability of the International Telecommunication Union (ITU) in Geneva to
keep up with processing of satellite network notifications and related
paper processing.

Backlog at the ITU is more than two-years and growing. This is becoming
a great problem for the satellite community. U.S. Ambassador George
Moose in Geneva told the ITU Secretary-General earlier this year that
"the most critical near-term ... issue for the radio sector is related
to the backlog ... in processing satellite notification and registration
notices."

Indeed, this backlog situation reminds me of the story about a man who
goes to his doctor and tells him, "Doctor, I think my wife is trying to
poison me." The doctor tells him that must be ridiculous, but the man
insists it's true. So, on the request of this fellow, the doctor decides
to pay a visit to the man's wife. He comes back and tells the guy,
"Well, sir, I just spent the afternoon talking with your wife and
hearing about all the varied details of your lives together." The man
says, "And?" To which the doctor replies, "And...I'd take the poison."

Seriously though, this backlog is more than just paperwork and
headaches. It has the propensity to hamstring satellite interests in
seeking global markets. Measures taken at the last radio conference in
Istanbul \-- such as the requirement for electronic filings \-- will
help with the backlog, but it will be some time before we see all the
necessary relief. It is our hope that measures identified and discussed
at this seminar will be helpful in getting the backlog reduced and
eventually eliminated.

With that in mind, I would like to offer a suggestion for addressing the
inability to complete satellite coordination because of the backlog.
Maybe it is time \-- perhaps in the ITU reformation discussions leading
up to the ITU plenipotentiary conference in Marrakech \-- to consider a
variety of commercial marketplace solutions. These commercial solutions
would give more authority directly to the satellite community while
putting the responsibility for coordination in the hands of those who
value it the most.

When I say "commercial solutions," I can think of a number of options
for solving both the ITU satellite coordination problem and the WTO
market access problem. These include, using the current ITU, as well as
short circuiting the ITU process, and allowing administrative certainty.
For example, we could consider privatizing the part of the ITU that
currently administers the satellite coordination process. We could also
consider formalizing secondary markets for orbital locations. Under this
scenario, entities could form alliances to implement satellite networks
at orbital locations or use private commercial arrangements to buy
access to, or resolve potential interference conflicts at, individual
orbital locations. Whatever we consider, the satellite industry's
interest must be safeguarded.

At the FCC, we look to the satellite industry to provide strategic
thinking and solutions for the future. I know my staff has challenged
you to consider ways to not only improve the ITU process, but to also
streamline our domestic satellite licensing process. It is your business
and we want to help you succeed.

The backlog isn't the only stumbling block we currently face. As in
several other information industries, there are growing satellite
spectrum scarcity issues, not only among satellite network systems but
also between these networks and terrestrial networks.

We tend to move higher and higher in frequencies for using satellites,
but each higher band brings another set of challenges to go along with
the benefits. Greater transmission bandwidth is available in higher
bands, but we are pushing the technology envelope.

Now, we want to push that envelope. This is where the satellite
community excels. We encourage development of new systems and innovative
ways of providing satellite services of all kinds. But until then, more
frequency sharing is required while we all become more efficient in
finding new ways of delivering satellite services in the future.

The FCC is not exempt from this need for innovation and efficiency. I
have been frustrated by the slow pace of satellite network application
processing at the Commission. We too have a backlog, and the national
regulatory process is causing delays in entering the market.

It is important that satellite services get to the market more quickly.
We are trying to streamline this licensing process, and you will hear
Friday at the seminar what steps we are taking. For example, you can
soon expect an FCC earth station notice of proposed rulemaking designed
to speed licensing.

You will also have an opportunity at the FCC seminar panel on Friday to
tell us your thoughts on how to streamline and quicken our application
process. In many cases, we know that you are in competition with
terrestrial services that can roll out much faster. And we want to do
what we can to minimize or erase this competitive disadvantage. I would
mention the recent 2 gigahertz notice, which offers equal opportunity
for all of the applicants. As a step forward we have introduced more
market-based mechanisms into the licensing process in this band.

In closing, I want to address directly the recent turbulence in the
industry. People ask me all the time -- in the satellite world as in the
Internet world -- if these economic corrections or downturns in the
market signify the end of the boom. Is this all over?, they ask. To
which I can only respond, "Of course not. This is only the beginning."

Satellite technology is the most efficient way of processing and
transmitting information in the Information Age. We need you to ensure
that all corners of the globe -- urban, rural, and remote -- are not
left behind in the communications revolution. In short, forty-three
years after Sputnik, satellites are just beginning to change the world.

Thank you for your attention tonight.