June 14, 2002

## FCC REPORT TO CONGRESS AS REQUIRED BY THE ORBIT ACT

This report is submitted in accordance with Section 646 of the
Open-market Reorganization for the Betterment of International
Telecommunications Act (ORBIT Act or the Act).[^1]

Section 646 states:

> \(a\) ANNUAL REPORTS - The President and the Commission shall report
> to the Committees on Commerce and International Relations of the House
> of Representatives and the Committees on Commerce, Science, and
> Transportation and Foreign Relations of the Senate within 90 calendar
> days of the enactment of this title, and not less than annually
> thereafter, on the progress made to achieve the objectives and carry
> out the purposes and provisions of this title. Such reports shall be
> made available immediately to the public.
>
> \(b\) CONTENTS OF REPORTS - The reports submitted pursuant to
> subsection (a) shall include the following:
>
> > \(1\) Progress with respect to each objective since the most recent
> > preceding report.
>
> > \(2\) Views of the Parties with respect to privatization.
>
> > \(3\) Views of the industry and consumers on privatization.
>
> > \(4\) Impact privatization has had on United States industry, United
> > States jobs, and United States industry's access to the global
> > marketplace.

##### Progress as to Objectives and Purposes

The purpose of the ORBIT Act is "to promote a fully competitive global
market for satellite communication services for the benefit of consumers
and providers of satellite services and equipment by fully privatizing
the intergovernmental satellite organizations, INTELSAT and
Inmarsat."[^2]

The ORBIT Act: (1) mandates the privatization of INTELSAT and Inmarsat;
(2) establishes criteria to ensure a pro-competitive privatization; (3)
requires the Commission to determine whether INTELSAT, Inmarsat, and the
INTELSAT spin-off, New Skies Satellites N.V. (New Skies), have been
privatized in a manner that will harm competition in the United States;
(4) requires the Commission to use the privatization criteria specified
in the ORBIT Act as a basis for making its competition determination;
and (5) directs the Commission to "limit through conditions or deny"
applications or requests to provide "non-core" services to, from, or
within the United States if it finds that competition will be
harmed.[^3] It provides for certain exceptions to limitations on
non-core services in the event of such a determination. The Act also
prohibits the Commission from authorizing certain "additional" services
pending privatization consistent with the criteria in the Act.[^4] In
addition, the Act directs the Commission to undertake a rulemaking
proceeding to assure U.S. users the opportunity for direct access to the
INTELSAT System.

The Commission made its first report to Congress on its actions to
implement the ORBIT Act on June 15, 2000, following enactment of the Act
on March 17, 2000.[^5] The Commission made its second report on June 15,
2001.[^6] The Commission issued a Public Notice on March 28, 2002
inviting comment appropriate to the development of this third
report.[^7]

### **Commission Actions and Activities**

The Commission has undertaken the following actions required by the
ORBIT Act, or related to its objectives and purposes. The Commission has
taken the actions described below to ensure that INTELSAT, Inmarsat, and
New Skies have been privatized in a procompetitive manner, consistent
with the privatization criteria of the Act.[^8] The Commission has also
taken these actions to implement certain deregulatory measures in the
Act.[^9]

###### INTELSAT

-   INTELSAT privatized at 7:59:59 PM EDT, on July 18, 2001. The
    Commission previously had granted authorizations conditioned on
    compliance with the ORBIT Act to Intelsat LLC, the separate private
    Delaware company created by INTELSAT, prior to privatization, to
    hold the U.S. authorizations and associated space segment assets
    upon privatization.[^10] These authorizations covered the
    satellites, planned satellites, and planned system modifications
    associated with INTELSAT'S frequency assignments in the FSS C- and
    Ku-bands existing as of privatization.

-   As a routine element of the FCC licensing regime, since
    privatization, Intelsat LLC has filed with the Commission a number
    of requests for license modifications and grants of authority. The
    Commission has reviewed these requests and acted on them in a
    transparent manner consistent with the United States licensing
    process.[^11]

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-   Intelsat LLC is required by the ORBIT Act to conduct an Initial
    Public Offering (IPO) by October 1, 2001 to "substantially dilute"
    ownership by former INTELSAT Signatories. The Act gives the
    Commission discretion to extend this deadline to no later than
    December 31, 2002. In August 2001, Intelsat requested an extension
    of the deadline until December 31, 2002. The Commission placed this
    request on public notice August 28, 2001.[^12] On October 5, 2001,
    the Commission granted this request on the basis of Intelsat's
    demonstration that it had insufficient time to take the substantial
    planning, financial, and legal preparations necessary to conduct an
    IPO since its July 18, 2001 privatization.[^13] In its decision, the
    Commission further concluded that the grant of the extension was
    consistent with the ORBIT Act, which gave the Commission discretion
    to extend the deadline in consideration of market conditions and
    relevant business factors relating to the timing of the IPO.[^14]

###### Inmarsat

-   Inmarsat privatized on April 15, 1999, prior to enactment of the
    ORBIT Act. The Act specified a number of criteria for determining
    whether Inmarsat's privatization is pro-competitive. On October 9,
    2001, the Commission released an Order in which it concluded that
    Inmarsat had privatized in a manner consistent with the non-IPO
    requirements of Sections 621 and 624 of the ORBIT Act.[^15]

-   In this decision, having found that Inmarsat had privatized in a
    manner consistent with the non-IPO requirements of the Act, the
    Commission granted Comsat Corporation; Stratos Mobile Networks, LLC;
    SITA Information Computing Canada, Inc.; Honeywell, Inc.; Marisat
    Communications Network, Inc.; and Deere & Company permanent
    authority to use Inmarsat for communications services to, from, or
    within the United States.[^16] These services previously had been
    temporarily authorized, pending the Commission's final decision on
    Inmarsat's ORBIT Act compliance.

-   The ORBIT Act required Inmarsat to conduct an IPO no later than
    October 1, 2000. The Act permitted the Commission to extend this
    deadline to no later than December 31, 2001.[^17] On October 3,
    2000, the Commission granted a request for a six-month extension of
    the IPO deadline to July 1, 2001, on the basis that Inmarsat had
    demonstrated the need to restructure the company and develop
    innovative services in order to make an IPO attractive to investors
    and to achieve the substantial dilution of shareholder ownership as
    required by the Act.[^18] In that decision, the Commission found
    that the ORBIT Act specifically provides for the authorization of
    Inmarsat services prior to Inmarsat's conduct of an IPO, provided
    that other requirements of the ORBIT Act are satisfied.

-   On April 5, 2001, Inmarsat filed for a second extension of its IPO
    deadline to December 31, 2001 based on unfavorable market
    conditions. On June 28, 2001, the Commission granted this request on
    finding that Inmarsat had made a sufficient showing of market
    conditions and relevant business factors relating to the timing of
    an IPO and had demonstrated diligence in preparing for an IPO since
    the First Extension Order, so as to warrant an extension.[^19] In
    that decision the Commission also required Inmarsat to file with the
    Commission, 30 days after the conduct of its IPO, a demonstration
    that the IPO is consistent with Section 621(2) and 621(5)(A)(11) of
    the ORBIT Act. The Commission will then determine whether Inmarsat
    has achieved "substantial dilution" as required by the ORBIT Act. If
    the IPO is not conducted within the timeframe established by the
    ORBIT Act or if "substantial dilution" is not achieved, the
    Commission retains authority under Section 601(b)(1)(B) of the Act
    to take appropriate action.[^20]

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-   On November 13, 2001, Congress amended Clause (ii) of section
    621(5)(A) of ORBIT Act, to further extend Inmarsat's IPO deadline to
    December 31, 2002. Congress also gave the Commission discretion to
    further extend this deadline no later than June 30, 2003.[^21]

###### 

###### New Skies Satellites

-   New Skies is the Netherlands-based INTELSAT spin-off created in 1998
    as INTELSAT's first step toward privatization. On March 29, 2001,
    the Commission granted Permitted List conditions to remove secondary
    status requirements for certain New Skies satellites. This action
    enabled New Skies to provide satellite services to, from, and within
    the United States on a full-term basis.[^22]

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-   In a recent order released on May 28, 2002, the Commission added
    NSS-7, a satellite launched and operated by New Skies, to the
    "Permitted Space Station List" at the 21.5° W.L. (338.5° E.L.)
    orbital location.[^23] This action allows all routinely licensed
    "ALSAT" earth stations to provide fixed-satellite service (except
    direct-to-home service) using the NSS 7 satellite in the
    conventional C- and Ku-bands. This action should also stimulate
    competition in the United States, provide consumers more
    alternatives in choosing communications providers and services,
    reduce prices, and facilitate technological innovation.[^24]

###### Status of Comsat

-   The ORBIT Act terminated the 1962 Act's ownership restrictions on
    Comsat Corporation ("Comsat"). As a result, Lockheed Martin and
    Comsat jointly filed an application with the Commission for transfer
    of control of Comsat's various licenses and authorizations. On July
    31, 2000, the Commission found that Lockheed Martin's purchase of
    Comsat was in the public interest and authorized Comsat to assign
    its FCC licenses and authorizations to a wholly owned subsidiary of
    Lockheed Martin Corporation.[^25]

-   On April 23, 2001, Comsat and Lockheed Martin jointly filed
    applications to assign 4 non-common carrier earth station licenses
    to Intelsat LLC and also filed an application to assign an
    Experimental License. These applications were placed on Public
    Notice on May 16, 2001.[^26]

-   On December 18, 2001, the Commission granted the applications filed
    by Lockheed Martin Global Telecommunications, COMSAT Corporation,
    and COMSAT General Corporation, together with Telenor Satellite
    Services Holdings, Inc., Telenor Satellite, Inc., and Telenor
    Broadband Services AS, to assign certain Title II common carrier
    authorizations and Title III radio licenses held by COMSAT to
    Telenor Satellite, Inc.[^27] This proposed assignment was in
    connection with Telenor\'s proposed acquisition of CMC, a business
    unit of COMSAT Corporation. On January 11, 2002, Telenor completed
    its purchase of substantially all of the assets of CMC, and all of
    CMC\'s licenses and authorizations were transferred to Telenor
    pursuant to Commission authorization.[^28]

-   On April 5, 2002, in connection with Intelsat\'s proposed
    acquisition of COMSAT World Systems and certain associated COMSAT
    business enterprises from Lockheed Martin, Comsat filed applications
    to assign common carrier and non-common carrier earth station
    licenses, private land mobile radio licenses, and international
    section 214 authorizations to Intelsat. Comsat also filed
    applications seeking to modify the common carrier status of certain
    earth station facilities that it proposes to assign to Intelsat,
    requesting that the facilities be used to provide service on both a
    common carrier and non-common carrier basis. These applications were
    placed on Public Notice on April 24, 2002.[^29] The comment period
    was completed on June 7, 2002.

###### Direct Access

-   Section 641(a) of the ORBIT Act requires that users and service
    providers be permitted to obtain Level 3 direct access to INTELSAT
    capacity.[^30] Previously, the Commission decided in a rulemaking
    proceeding that Level 3 direct access is in the public
    interest.[^31] The concept of Direct Access became moot with
    privatization because Intelsat LLC, as a private company, does not
    have signatories.

-   Section 641(b) of the ORBIT Act requires that the Commission
    complete a rulemaking "to determine if users or providers of
    telecommunications services have sufficient opportunity to access
    INTELSAT space segment directly from INTELSAT to meet their service
    or capacity requirements."[^32] In September 2000, the Commission
    released a Report and Order requiring Comsat and direct access
    customers to negotiate commercial solutions if possible to ensure
    that sufficient opportunity is available for parties to negotiate
    commercial solutions.[^33]

-   On March 13, 2001, Comsat submitted a report detailing the results
    of its negotiations and maintaining that direct access opportunities
    are increasing for those who want them. The negotiations resulted in
    a commercial agreement between Comsat and WorldCom. The Commission
    placed Comsat's report on public notice on April 6 and BT North
    America and Sprint commented opposing termination of the
    proceeding.[^34] The parties have pursued negotiations and at this
    time the Commission is reviewing the issues to determine whether
    further steps may be appropriate.

###### Regulatory Fees

-   The ORBIT Act authorizes the Commission "to impose similar
    regulatory fees on the United States signatory which it imposes on
    other entities providing similar services."[^35] On July 10, 2000,
    the Commission released an Order concluding that Comsat should pay a
    proportionate share of the fees applicable to holders of Title III
    authorizations to launch and operate geosynchronous space
    stations.[^36] Consistent with past decisions, the Commission stated
    that the costs attributable to space station oversight include costs
    directly related to INTELSAT signatory activities and are distinct
    from those recovered by other fees that Comsat pays, such as
    application fees, fees applicable to international bearer circuits,
    fees covering Comsat\'s non-Intelsat satellites, and earth station
    fees.[^37] Recently, the Circuit Court of Appeals for the District
    of Columbia reviewed the Commission's decision and held that the
    Commission's actions to impose regulatory fees on Comsat were
    justified on the basis that the underlying policy of Section 9 of
    the Communications Act of 1934, favoring recovery of regulatory
    costs, gave the Commission good reason to require Comsat to bear
    "its proportionate share of \[space station\] fees."[^38]

-   Post-privatization, Intelsat, as a U.S. licensee, has been
    fulfilling its obligations and paying the requisite regulatory fees
    as mandated in Section 9 of the Communications Act 1934.

#### Status of INTELSAT Privatization

In the year since the Commission's 2001 report to Congress, substantial
progress has been made toward achieving a primary purpose of the ORBIT
Act -- fully privatizing INTELSAT.[^39] As anticipated, Intelsat
privatized and became a U.S. licensee, as of July 18, 2001.

As part of its decision to privatize INTELSAT, the Assembly of Parties
retained a small residual intergovernmental organization known as ITSO,
an acronym for the International Telecommunications Satellite
Organization. ITSO, through a "Public Services Agreement" with Intelsat
LLC, monitors the performance of the company's public service
obligations to: maintain global connectivity and global coverage,
provide non-discriminatory access to the system, and honor the lifeline
connectivity obligation (LCO) to certain customers (those customers in
poor or underserved countries that have a high degree of dependence on
Intelsat LLC).[^40] Under these commitments, the privatized Intelsat LLC
keeps capacity available to lifeline users at fixed pre-privatization
costs for approximately 12 years, while the lifeline users are only
committed for its capacity on a year-to-year basis at their option. ITSO
has no operational or commercial role.

*INTELSAT as Privatized*

Upon privatization, substantially all of INTELSAT's operational assets
and liabilities were transferred to several companies within an
affiliated group with a holding company structure. Intelsat, Ltd. is the
holding company for all other companies in the group and is organized
under the laws of Bermuda. It holds the United Kingdom authorizations
for INTELSAT\'s ITU registrations in the Ka-, BSS-, and V-bands.[^41]
Intelsat (Bermuda), Ltd. (\"Intelsat Bermuda\"), a wholly owned
subsidiary of Intelsat, Ltd., is responsible for the oversight of
satellite procurement and operational matters, including matters
involving control of space and ground segment assets, from Bermuda.
Intelsat Global Service Corporation, a wholly owned subsidiary of
Intelsat Bermuda and organized as a Delaware corporation, provides
technical, marketing, and business support services to Intelsat, Ltd.
and its subsidiaries pursuant to intercompany contracts. These services
include the day-to-day operation of the satellite network. Intelsat
Holdings LLC, a Delaware limited liability company and also a wholly
owned subsidiary of Intelsat Bermuda, functions only as a holding
company for Intelsat LLC, a Delaware limited liability company that is
the U.S. licensee for operation of existing and planned satellites in
the C-band and Ku-band. All space segment assets operating in these
bands have been transferred to Intelsat LLC. Intelsat LLC sells all of
its space segment capacity to Intelsat Bermuda.[^42] Intelsat Global
Sales & Marketing Ltd. (\"Intelsat U.K.\"), a wholly owned subsidiary of
Intelsat Bermuda organized under the laws of England and Wales, is the
contracting party for most of Intelsat's customer contracts. Going
forward, Intelsat's U.S. customers will contract with Intelsat USA Sales
Corp., a wholly owned subsidiary of Intelsat U.K. and a Delaware
corporation. Some of Intelsat's U.S. customers have already transferred
their existing customer service commitments to Intelsat USA Sales Corp.
Most of the customer service commitments entered into by INTELSAT prior
to the privatization were transferred to Intelsat U.K. pursuant to
novation agreements. Intelsat U.K. buys space segment capacity from
Intelsat Bermuda to serve existing and future customers. Customers are
able to acquire Intelsat space segment capacity either through
distributors or on a wholesale customer basis. The Intelsat holding
company structure also includes regional support centers and field
offices, which provide marketing and sales support and are located in
various countries.

The companies have created fiduciary boards of directors. The companies
do not maintain an immune or privileged status. The selection procedure
for members of the board of directors of Intelsat, Ltd. has resulted in
a board that is compliant with the ORBIT Act.. The licensing companies
have licenses through notifying administrations in countries (U.S. and
U.K.) that have effective competition laws and have commitments under
the WTO Agreement that include non-discriminatory access to their
satellite markets.[^43] These companies are subject to U.S. or U.K.
licensing authorities and, as mentioned below, conduct satellite
coordinations according to ITU procedures under the auspices of these
authorities.

II. **Views of INTELSAT Parties on Privatization**

The Commission, in response to the Public Notice, has not received any
views from Parties regarding privatization.

**III. Views of Industry and Consumers on Privatization**

PanAmSat Corporation (PanAmSat), Intelsat LLC (Intelsat), Inmarsat
Ventures plc. (Inmarsat), the International Telecommunications Satellite
Organization (ITSO), Stratos Mobile Networks (USA) LLC and MarineSat
Communications Network, Inc. (collectively "Stratos"), and Telenor
Satellite, Inc. (Telenor), responded to the Commission's public notice
inviting comments appropriate to the development of this report. The
Commission received no filings specifically representing views of
consumers or consumer groups.

###### Intelsat Privatization Comments

Intelsat maintains that a key objective of the ORBIT Act---the
pro-competitive privatization of INTELSAT---has been achieved. It states
that since its date of privatization, July 18, 2001, Intelsat's
shareholders have elected a fiduciary board, company officials have
begun preparing for an initial public offering (IPO) and Intelsat has
competed in the marketplace as a U.S.-licensed space station operator on
the same footing as its competitors---*i.e.*, free from any privileges
and immunities derived from its former status as an Intergovernmental
Organization (IGO).

Intelsat provides two examples as evidence of its pursuit of growing
market opportunities in this competitive environment. Recently, Intelsat
announced that, subject to regulatory approval, it will acquire
substantially all of the assets of COMSAT World Systems ("CWS") and
certain associated COMSAT business enterprises from Lockheed Martin
Corporation. Intelsat states that this proposed transaction will
integrate its satellite facilities with CWS' sales, marketing and
customer service expertise to improve Intelsat's operational efficiency
and thereby enable it to offer competitive enhanced, high quality
service to U.S. customers. Intelsat also announced its acquisition of a
teleport facility in Fuschsstadt, Germany from Deutshce Telekom AG, as
well as key traffic exchange points in Los Angeles, New York and London
that will be connected to the newly acquired teleport facility.

PanAmSat argues that although privatized, Intelsat still maintains
market access privileges it had enjoyed as an IGO in contravention of
the ORBIT Act. PanAmSat proposes that the Commission work with other
governmental agencies, the ITU and the satellite industry to break down
the market access barriers that U.S. companies face overseas.
Specifically PanAmSat suggests that the Commission should: (1) promote
transparent and non-discriminatory licensing procedures worldwide for
international satellite networks; (2) support efforts to make non-U.S.
regulators aware that exclusive access for Intelsat is no longer
obligatory; and (3) encourage non-U.S. regulators to provide access to
more than one global satellite operator. PanAmSat further encourages the
relevant government agencies to participate in the ITU's Development
Sector Study Group, to encourage the development of open and competitive
satellite markets around the world.

In response to this proposal, Intelsat argues that its privatization has
in fact promoted access to the global marketplace for all its
competitors. It contends that as a U.S. licensee, Intelsat's market
access opportunities are the same as other U.S. satellite providers.
Moreover, Intelsat argues that U.S. licensing of Intelsat maximizes the
number of markets that other U.S. operators can access because the most
favored nation obligation requires WTO-member countries that grant
market access to Intelsat also to grant market access to other U.S.
satellite operators. Stratos also denies encountering any market entry
issues outside of the United States, with respect to offering its
satellite communication services. Rather, it maintains that
privatization and increased competition for satellite service worldwide
has allowed Stratos to become one of the fastest growing satellite
companies in the world.

In the Intelsat LLC *Licensing Order,* the Commission conditioned the
authorizations granted to Intelsat LLC on compliance with the ORBIT Act
restrictions on exclusive arrangements for the provision of satellite
services between the United States and other countries.[^44] We found in
the INTELSAT *ORBIT Act Compliance Order* that the INTELSAT
privatization would not violate this restriction and said we would
enforce it in the future on a case-by-case basis as facts may
require[^45][^46] While no specific case has been presented for
enforcement action at this time, we agree with PanAmSat, that market
entry is fundamental to achieving and maintaining competition in
satellite communications. The Commission therefore will continue to work
with the U.S. government agencies that have the primary responsibility
for ensuring that U.S. operators secure market access overseas. We
believe that PanAmSat's specific proposals should be considered in an
inter-agency context.

######## Inmarsat Privatization Comments

In its comments Inmarsat provided further details on the status of its
IPO. Inmarsat maintains that it has been preparing diligently for its
IPO, while waiting for sustainable recovery of the financial markets.
Inmarsat states that it has (1) reorganized its corporate structure to
facilitate an IPO; (2) has been working with an investment bank, which
serves as the global coordinator of the IPO, since May 2000; (3) has
decided to list its securities on the New York Stock Exchange and London
Stock Exchange; and (4) commenced seeking requisite IPO approval from
the Securities and Exchange Commission in December 2000, and from the
U.K. Listing Authority in February 2001. Inmarsat further maintains that
it also has heavily invested resources for preparing for its IPO, and
hopes to conduct it as soon as market conditions permit.

Inmarsat, Telenor, and Stratos maintain that Inmarsat's privatization
and the October 9, 2001 Commission decision to open the domestic U.S.
market to Inmarsat services, have resulted in the expansion of service
choices and opportunities for U.S. customers. Specifically, Inmarsat and
Telenor discussed the initiation of "Fleet," Telenor's new commercial
maritime service that is provided via the Inmarsat system through
Telenor's land earth station facility in Santa Paula, California. This
service is intended to serve a wide range of commercial communication
needs to a variety of ocean-going vessels. The Fleet service also
includes a new feature that Telenor and Inmarsat claim will provide a
significant cost effective benefit to U.S. consumers.

Stratos maintains that the increase in competition and services
resulting from Inmarsat's privatization will increase jobs in the United
States and industry access in the marketplace.

Copies of the comments are attached.

**IV. Impact of Privatization**

Section 646 requests that we report on the impact of privatization on
U.S. industry, jobs, and industry access to the global market.

INTELSAT's privatization was designed to allow Intelsat LLC to continue
to operate in a manner and provide services that meet U.S. commercial
and governmental (including national security) needs. Privatization has
enabled Intelsat to compete freely for all satellite business
opportunities, thereby allowing it to explore new and dynamic services
to better serve the public. This positively impacts the global
marketplace for communications services, ensuring increased competition
and more access. The United States retains under its jurisdiction a
company with valuable satellite assets and associated orbital locations.
Furthermore, the location of the service and licensing companies in the
United States contribute to jobs and productivity in the United States.
Intelsat currently employs approximately 900 individuals, many of whom
are highly skilled in the intricacies of high technology business. As
Intelsat continues to grow, it will provide additional business and
career opportunities.

In its capacity as Notifying Administration to the ITU for the FSS C-and
Ku-band frequency assignments transferred at privatization, the FCC has
participated in a number of international coordination negotiations as
Intelsat's licensing administration and, consistent with the U.S.
domestic process, has ceased to participate in coordinations between
Intelsat and U.S. operators. For example, a coordination of significance
was completed between the United States, on behalf of Intelsat at 24.5
W.L., 20 W.L. and 18 W.L. and the Netherlands, on behalf of New Skies at
22 W.L. and 21.5 W.L. On the domestic front, prior to Intelsat's
privatization, the United States had been participating in a
coordination between Intelsat at 66 E.L. and the United States, on
behalf of PanAmSat at 68.5 E.L. Following privatization, consistent with
the domestic United States procedures, PanAmSat and Intelsat, as two
United States licensees, resolved their coordination issues in a
mutually acceptable manner without further involvement of the FCC.

The United States has in place a coordination process whereby operators
may reach operational arrangements with operators of other
administrations, which are then submitted to the operators' respective
jurisdictions for approval. Once approved by both administrations, the
operational arrangements become, or form the basis for, a coordination
agreement between the administrations under the ITU procedures. Since
privatization on July 18, 2001, Intelsat has participated in a number of
meetings with operators from France, India, Spain, and the United
Kingdom as part of this process. In due course, this will lead to
coordination agreements between the United States and these foreign
administrations.

Inmarsat's privatization has also had a positive impact on the domestic
U.S. market. Privatization has provided Inmarsat the opportunity to
develop new, innovative services for the U.S. market that promises to
result in the expansion of options and resources for U.S. customers.
This also promises to lead to increased industry competition. As a
result of privatization and Commission authorization, distributors were
given access rights to distribute Inmarsat services in the United
States. This has led to a growing number of jobs in the United States.
One such example is that of Stratos Global Corp ("Stratos"). Following
Inmarsat's privatization, Stratos moved its corporate headquarters and
numerous jobs to Bethesda, Maryland. The United States is currently
Stratos' largest market for Inmarsat services and the home to more
Stratos employees than any other country. As Inmarsat continues to
develop, it will provide further benefits for U.S. industry and
consumers.

Finally, both Inmarsat's and INTELSAT's privatization have placed a
priority on continued provision of service to all portions of the globe.
Inmarsat committed to support global maritime distress and safety
services (GMDSS) and the INTELSAT Assembly of Parties determined that
Intelsat LLC should be contractually bound under a Public Service
Agreement with the International Telecommunications Satellite
Organization (ITSO) to ensure continued global connectivity \--
particularly to countries dependent on Intelsat LLC's satellite
services.

**V.** **Summary**

The Commission has undertaken a number of proceedings required by or
related to the ORBIT Act. The Commission will continue to implement and
enforce the requirements of the ORBIT Act. On the whole, we believe that
U.S. policy goals regarding the promotion of a fully competitive global
market for satellite communications services are being met in accordance
with the Act. The Commission will continue to inform Congress of the
actions it takes to implement the requirements of the ORBIT Act and the
impact of those actions in its next annual report.

Enclosures: Comments received in response to the Commission's Public
Notice.

[^1]: 47 U.S.C. § 765e (2000).

[^2]: 47 U.S.C. § 761 NOTE.

[^3]: The Act defines "non-core" services as "services other than
    public-switched network voice telephony and occasional-use
    television" with respect to INTELSAT, and as "services other than
    global maritime distress and safety services or other existing
    maritime or aeronautical services for which there are not
    alternative providers" with respect to Inmarsat. 47 U.S.C. § 769
    (a)(11).

[^4]: The Act defines "additional" services as "direct-to-home (DTH) or
    direct broadcast satellite (DBS) video services, or services in the
    Ka or V bands" for INTELSAT and as "those non-maritime or
    non-aeronautical mobile services in the 1.5 and 1.6 GHz band on
    planned satellites or the 2 GHz band" for Inmarsat. 47 U.S.C §
    769(a)(12).

[^5]: *FCC Report to Congress as Required by the ORBIT Act,* 15 FCC Rcd.
    11, 288 (rel. June 15, 2000).

[^6]: *FCC Report to Congress as Required by the ORBIT Act,* 16 FCC Rcd.
    12,810 (rel. June 15, 2001).

[^7]: Public Notice, Report No. SPB-177, March 28, 2002.

[^8]: 47 U.S.C. §§ 761, 763, 763(a), 763(b), 763(c), and 765(g).

[^9]: 47 U.S.C. § 765 and 765(d)(1).

[^10]: *See Application of Intelsat LLC for Authority to Operate, and to
    Further Construct, Launch, and Operate C-band and Ku-band Satellites
    that Form a Global Communications System in Geostationary Orbit,*
    Memorandum Opinion Order and Authorization, 15 FCC Rcd 15460,
    *recon. denied,* 15 FCC Rcd 25234 (2000), *further proceedings,* 16
    FCC Rcd 12280 (2001) (*Licensing Order*).

[^11]: Intelsat has filed a number of requests. By way of example, *See
    In the Matter of Intelsat LLC, Application to Modify Authorizations
    to Operate, and to Further Construct, Launch, and Operate C-band and
    Ku-band Satellites that Form a Global Communications System in
    Geostationary Orbit*, Order and Authorization, DA 01-2069, 16 FCC
    Rcd. 16,208 (Sat. and Radiocomm. Div., rel. September 4, 2001.);
    *see also In the matter of Intelsat LLC Modification of
    Authorization to Launch C-band and Ku-band Satellites that Form a
    Global Communications System in Geostationary Orbit*, Order and
    Authorization, DA 02-333, 17 FCC Rcd. 2391 (Sat. and Radiocomm.
    Div., rel. February 13, 2002).

[^12]: Public Notice, Report No., SAT-00081, August 28, 2001.

[^13]: *In the Matter of Intelsat LLC, Request for Extension of Time
    Under Section 621(5) of the ORBIT Act*, Memorandum Opinion and
    Order, FCC 01-288, 16 FCC Rcd. 18185 (rel. October 5, 2001).

[^14]: 47 U.S.C. § 763 (5)(A)(i).

[^15]: *In the Matter of Comsat Corporation et. al.,* Memorandum
    Opinion, Order and Authorization, FCC 01-27216, FCC Rcd. 21,661
    (rel. October 9, 2001).

[^16]: *See* 47 U.S.C. § 761(a), which precludes Commission
    authorization of additional services by Inmarsat until Inmarsat has
    privatized in accordance with the Act.

[^17]: 47 U.S.C. § 763 (5)(A)(ii).

[^18]: *In the Matter of Inmarsat Ventures Ltd, Request for Extension of
    Time Under Section 621(5) of the ORBIT Act*, Memorandum Opinion and
    Order, FCC 00-356, 15 FCC Rcd. 19,740 (rel. Oct. 3, 2000).

[^19]: *In the Matter of Inmarsat Ventures Ltd., Request for Extension
    of Time Under Section 621(5) of the ORBIT Act*, Memorandum Opinion
    and Order, FCC 01-193, 16 FCC Rcd. 13494 (rel. June 28, 2001).

[^20]: If the IPO does not meet the time or size requirements
    established in the ORBIT Act, Section 601(b)(1)(B) of the Act states
    that the Commission "shall limit through conditions or deny" any
    applications before it at that time and "limit or revoke previous
    authorizations to provide non-core services to, from, or within the
    United States." 47 U.S.C. § 761(b)(1)(B).

[^21]: Department of Commerce, Justice and State, the Judiciary, and
    Related Agencies Appropriations Act, 2002, Pub. L. No. 107-77, §
    628, 115 Stat. 748, 804 (2001).

[^22]: *See In the Matter of New Skies Satellites, N.V., Petition for
    Declaratory Ruling*, Order, DA 01-513, 16 FCC Rcd. 6740 (Sat. and
    Radiocomm. Div., rel. March 29, 2001).

[^23]: *See In the Matter of New Skies Satellites, N.V., Petition for
    Declaratory Ruling*, Order, DA 02-1256, 2002 WL 1050040 (F.C.C.)
    (Sat. and Radiocomm. Div., rel. May 28, 2002).

[^24]: *Id.* at 1.

[^25]: *See In the Matter of Lockheed Martin Corporation, Comsat
    Government Systems, LLC, and Comsat Corporation, Applications for
    Transfer of Control of Comsat Corporation and Its Subsidiaries,
    Licensees of Various Satellite, Earth Station Private Land Mobile
    Radio and Experimental Licenses, and Holders of International
    Section 214,* Order and Authorization, FCC 00-277, 15 FCC Rcd.
    22,910 (rel. July 31, 2000), DA 00-1789, 15 FCC Rcd. 23,506
    (erratum, Sat. and Radiocomm. Div., rel. Sept. 8, 2000). A petition
    for reconsideration of this decision has been filed and is being
    reviewed by the Commission.

[^26]: Public Notice, Report No., SES-00288, May 16, 2001.

[^27]: *In the Matter of Lockheed Martin Global Telecommunications,
    Comsat Corporation, and Comsat General Corporation, Assignor and
    Telenor Satellite Mobile Services, Inc. and Telenor Satellite, Inc.,
    Assignee, Applications for Assignment of Section 214 Authorizations,
    Private Land MobileRadio Licenses, Experimental Licenses, and Earth
    Station Licenses and Petition for Declaratory Ruling Pursuant to
    Section 310(b)(4) of the Communications Act,* Order and
    Authorization, FCC 01-369, 16 FCC Rcd. 22,897 (rel. December 18,
    2001), DA 02-266, 17 FCC Rcd. 2147 (erratum, Int'l Bur. rel. Feb. 5,
    2002).

[^28]: *See* Public Notice, DA 02-357, February 14, 2002 (Public Notice
    inviting comments Telenor Satellite Services Holdings, Inc. petition
    for declaratory ruling on inapplicability of cost accounting
    requirements).

[^29]: Public Notice, DA 02-951, April 24, 2002.

[^30]: 47 USCA § 765(a).

[^31]: *Direct Access to the INTELSAT System*, IB Docket No. 98-192,
    Report and Order, 15 FCC Rcd. 15,703 (rel. September 15, 1999).
    Level 3 direct access permits non-signatory users and service
    providers to enter into contractual agreements with INTELSAT for
    space segment capacity at the same rates that INTELSAT charges its
    Signatories without having to use a Signatory as a middleman.

[^32]: 47 USCA § 765(b)

[^33]: *Availability of INTELSAT Space Segment Capacity to Users and
    Service Providers Seeking to Access INTELSAT Directly,* IB Docket
    No. 00-91, Report and Order, FCC 00-340, 15 FCC Rcd. 19,160 (rel.
    September 19, 2000).

[^34]: Public Notice, Report No. SPB-166, April 6, 2001.

[^35]: 47 U.S.C. § 765(a)\[c\]. A 1999 decision of the United States
    Court of Appeals for the District of Columbia Circuit in *PanAmSat
    Corp. v. FCC,* 198 F.3d 890 (D.C. Cir. 1999), set aside and remanded
    the Commission's 1998 fee order, which did not assess a fee against
    Comsat.

[^36]: *In re Assessment and Collection of Regulatory Fees for Fiscal
    Year 2000*, FCC 00-117, MD Docket No. 00-58 at ¶ 24 (rel. July 10,
    2000).

[^37]: *Id.*

[^38]: *See Comsat Corporation vs. FCC and PanAmSat Corp.*, 283 F.3d 344
    (D.C. Cir. 2002).

[^39]: 47 U.S.C. § 761 NOTE.

[^40]: *INTELSAT Assembly of Parties Record of Decisions of the
    Twenty-Fifth (Extraordinary) Meeting,* AP-25-3E FINAL W/11/00 ¶ 34
    at 6-8 (Nov. 27, 2000) ("2000 Assembly Decision").

[^41]: *In the Matter of Applications of Intelsat LLC for Authority to
    Operate, and to Further Construct, Launch and Operate C-band and
    Ku-band Satellites that form a Global Communications System in
    Geostationary Orbit*, Intelsat LLC Supplemental Information, at 3
    (August 17, 2001).

[^42]: *In the Matter of Applications of Intelsat LLC for Authority to
    Operate, and to Further Construct, Launch and Operate C-band and
    Ku-band Satellites that form a Global Communications System in
    Geostationary Orbit*, Intelsat LLC Information Regarding
    Post-Privatization Distribution Arrangements at 2, note 6 (Mar. 16,
    2001).

[^43]: *In the Matter of Applications of Intelsat LLC for Authority to
    Operate, and to Further Construct, Launch and Operate C-band and
    Ku-band Satellites that form a Global Communications System in
    Geostationary Orbit*, Intelsat LLC Supplemental Information, at 3
    (August 17, 2001).

[^44]: *Licensing Order* at ¶¶ 27-28.

[^45]: ^.^

[^46]: *Intelsat LLC ORBIT Compliance Order* at ¶¶ 57-62.