TESTIMONY OF REED E. HUNDT, CHAIRMAN,
                     FEDERAL COMMUNICATIONS COMMISSION
           BEFORE THE HOUSE SUBCOMMITTEE ON TELECOMMUNICATIONS 
                 ON THE GLOBAL INFORMATION INFRASTRUCTURE
                        AND THE ROLE OF SATELLITES
                               July 28, 1994

                             I.  Introduction

     Mr. Chairman and Members of the Subcommittee.  Good morning.  I would like
to thank the Subcommittee for the opportunity to appear this morning to testify on the
important issue of the Global Information Infrastructure, and the role of communications
satellites in building that infrastructure.  Satellite technology offers opportunities to build
global, seamless communications networks.  In my tenure as Chairman of the FCC, I am
committed to ensuring that satellites continue to be an important component of our
overall policies that are designed to foster the development of both the National
Information Infrastructure (NII) and the Global Information Infrastructure (GII).   Mr.
Chairman, my testimony will focus on the role of satellites in international
telecommunications.

     I particularly welcome the opportunity to speak to you at this time since last week
we celebrated the 25th anniversary of humankind's landing on the moon.  That flight
and remarkable landing not only stretched our imaginations and the very boundaries of
our world, but also helped spur the development of remarkable technologies which are
used today in communication, computing, manufacturing and a variety of other areas. 
President Kennedy's dream of a space program that would take us to the moon also
included a vision of satellites orbiting the earth to enable people all over the world to
communicate.  That dream has flourished in the communications satellite industry in
which the U.S. plays a major role, domestically and internationally. 

     Since their introduction for commercial use in the 1960's, communication
satellites have been crucial in bringing long-distance telephone service to people all over
the world.  That service is particularly critical in areas where the telecommunications
infrastructure is not well developed.  Even today, 70% of the world's telephone lines are
concentrated in 24 countries of the OECD.  While the United States has 54 main
telephone lines for every 100 people, Sub-Saharan African countries average 0.43
telephone lines for every 100 people.  Many countries, particularly in the developing
world, would have a very limited long-distance network and would be virtually cut off
from international telecommunications, were it not for satellites.  

     At the World Telecommunications Development Conference in March in Buenos
Aires, Argentina, Vice-President Gore announced an initiative to foster the development
of a Global Information Infrastructure.  That network of networks would increase our
ability to communicate around the globe.  Guided by the principles of private
investment, competition, open access to the network, appropriate and flexible regulation
and universal service, we hope to foster the growth of a communications infrastructure
that is truly global in its reach and diverse in its service.  The information skyways are an
important part of that vision.  By linking Lagos to Los Angeles through satellite
technology, more trade and cultural exchange is possible.

      Numerous other uses of satellites have been developed.   Business applications
include global positioning services, which, for example, help identify trucks on their way
to market and make transportation and distribution of goods more efficient.  Satellites can
also enable patients in rural areas to be diagnosed by doctors in the finest hospitals in
the world without having either patient or doctor travel.     Through educational
applications, students in classrooms around the world learn together and can access
distant libraries and other repositories of knowledge.  Satellites also play a crucial role in
environmental monitoring and search and rescue operations.  

     Offering a diverse array of services, the communications satellite industry has
become an important engine for the U.S. economy.  For example, cable television could
never have become the $22 billion industry it is today in the United States without
satellites' reliable and low cost delivery of programming.  U.S. manufacturing of these
systems will lead to a substantial investment in the U.S. economy, and create a
significant number of high-paying jobs in the areas of research and development,
production and administration.  As the systems are implemented, additional job and
business opportunities will be created, such as in mobile end user services, equipment,
and the launch industry.  Development of the communications satellite industry will also
assist in the conversion of defense-based businesses into civilian-based ones.       

     In the U.S. alone, communications satellite services generated approximately
$1.85 billion in revenues in 1993, 23 percent higher than in 1992.  The production of
both the space and ground components of satellite systems generated $2.7 billion in
revenues for the U.S. commercial satellite industry in 1992.   Half of the
communications satellites manufactured in the U.S. that were delivered in 1993 were
sold to foreign customers or international satellite organizations. 

     The communications services offered by the satellite industry will also spur
economic growth in other areas.  Immediate access to an advanced global
communications infrastructure can increase the efficiency of existing businesses and
create new ones; provide developing countries with a state-of-the-art communications
system that can be used for governmental, educational, personal and commercial
purposes; and contribute to the quality of life which will, in turn, promote sustainable
economic development.

     Satellites have certain comparative technological and economic advantages that
make them particularly appropriate for many telecommunication applications, positioning
them strategically to play an important role in the Global Information Infrastructure. 
First, unlike other communication technologies, satellites are equipped to provide point-
to-multipoint telecommunications to large portions of the earth's surface.  For example,
one geo-synchronous satellite (a satellite whose rotation is the same as the earth's, so that
it stays above a "fixed" point) can deliver service to as much as one-third of the earth's
surface.  Domestic satellites can be designed to cover large nations such as the United
States or Russia, while regional satellites can serve a large landmass area, such as
Western Europe or Africa.  Second, the cost of satellite communication is the same
regardless of distance, whether 100, 1,000 or 10,000 miles.  The cost of constructing
wire-based facilities, by contrast, increases as the length of the fiber or wire increases. 
Additionally, as satellite technology has improved, the costs of satellite communications
services have declined.  

     Satellite services have traditionally provided voice (telephone service), data
transmission, and video to users operating at fixed points, i.e., from one business office
to another, or from a broadcaster to the home.  Satellites can also serve fixed
communication needs in remote areas or in other areas where a traditional
telecommunications network does not yet exist.  By setting up an earth station wherever
needed, satellites can provide fixed communications through less investment in land-
based infrastructure than would be possible through wireline services.  This feature is
particularly important in environmentally sensitive areas, such as wetlands, where laying
wire may disturb the fragile ecosystem. 

     Satellites also play a pivotal role in mobile communications services, such as
those serving the maritime, aeronautical and land mobile communities.  Mobile satellites
can provide world-wide coverage to and from people in transit, i.e. from a moving ship
or to a business person traveling out of the country.

     Fixed and mobile communications satellite services have traditionally been
provided through International Satellite Organizations (ISOs), principally: the
International Telecommunications Satellite Organization (INTELSAT) and the International
Maritime Satellite Organization (Inmarsat).  INTELSAT, a fixed satellite system that
provides global telecommunications services, has more than twenty operational satellites,
while Inmarsat, a mobile satellite system that provides maritime, land mobile and
aeronautical satellite services, has four satellites operational. 

      The United States was instrumental in developing INTELSAT and Inmarsat.  In
1962, President Kennedy asked for Congress' approval to create Comsat, a U.S.
corporation, to facilitate development of a global communications satellite system and to
provide for private investment by United States entities in such a system.  From these
beginnings grew the international satellite organizations, INTELSAT in 1964, to provide
fixed satellite communications, and Inmarsat in 1978, to provide mobile satellite
communications.   

     Comsat, by virtue of statute, is the privately-owned commercial entity that acts as
the Signatory to the operating agreements of INTELSAT and Inmarsat.  Signatories such as
Comsat are involved in making the commercial decisions of these organizations and
Parties (governments) are charged with making policy decisions.   There are 133 member
nations in INTELSAT and 73 member nations in Inmarsat.  Comsat is the largest single
investor in these organizations holding a 20% share in INTELSAT and a 22% share in
Inmarsat.  

     The success of these organizations in providing global telecommunications for
both fixed and mobile applications surpassed even Kennedy's vision.  For several
nations, particularly some developing countries, the INTELSAT and Inmarsat systems
serve a majority of their telecommunications needs and may continue to do so, along
with other satellite systems, well into the next century.   

              II. Principles Guiding FCC Satellite Regulation

     The FCC has broad authority under the Communications Act in the international
satellite arena.  First, in coordination with the Departments of State and Commerce, we
work internationally to obtain spectrum allocations in which U.S. service providers can
operate.  Second, domestically, the FCC allocates spectrum,  licenses U.S. service
providers, and regulates their domestic operation.  Third, under the Communications
Satellite Act, the FCC has authority (jointly with the Departments of State and Commerce)
to instruct Comsat in the international satellite organizations, INTELSAT and Inmarsat, as
well as to regulate Comsat domestically in its provision of INTELSAT and Inmarsat
services.

     In fashioning regulatory policies governing international communications satellites,
the FCC believes that promoting competition in the satellite telecommunications industry
both domestically and internationally is key to realizing the potential of the Global
Information Infrastructure.  We believe that our policy to provide choice, opportunity
and fairness to consumers and incumbents will help ensure that the U.S. satellite industry
will continue to be the most innovative and competitive in the world, and will offer
consumers an expanding range of services at reasonable rates.

     Choice means giving the public the benefit of competition - allowing consumers
to select among competing service providers who use the same or different technologies. 
Choice will promote lower prices for consumers and growth in the U.S. economy.  To
that end, we are working domestically and internationally to promote competition and
discourage monopolies in the satellite telecommunications service sector.   This includes
encouraging competition to incumbent satellite service providers such as INTELSAT and
Inmarsat.
 
     We also believe that as many telecommunications service providers as possible
should have the opportunity to compete in the telecommunications marketplace.  For the
satellite industry, this means that competing service providers should be able to:  have
access to the spectrum on a timely basis; ensure that coordination among systems is
complete prior to the planned date of service; and be subject to a rational regulatory
framework.

     The FCC also believes that competition to build the NII and GII must be fair, both
within the satellite industry and between satellite service providers and other
telecommunications industry players.  Open access and interconnectivity for all service
providers, such as between satellite service providers and personal communications or
cellular service providers, are essential to fair competition.  This will ensure that the
satellite industry can deliver products and services that compete with terrestrial
telecommunications systems in delivering voice, video and data.  A competitive
telecommunications marketplace will benefit consumers, the satellite industry and other
sectors of the economy.

     The FCC plans to pursue these goals, and the principles guiding the NII and GII,
as we craft our rules governing the satellite industry, whether in regard to fixed satellite
services, mobile satellite services, or the restructuring of INTELSAT and Inmarsat.       
While satellites have the ability to improve communications around the globe, in order
for them to be most effective, a number of regulatory issues must be addressed in
domestic, bilateral and multilateral fora.  Constraints on spectrum availability and entry
barriers other countries have erected to participation in their satellite markets are prime
examples of the type of regulatory issues that require our attention.  Our objective is to
foster a competitive satellite industry and marketplace which will create incentives for
lower prices, as well as fuel U.S. and international economic growth.

         III.  International Spectrum Allocation and Coordination

      In practice, creating a competitive satellite industry requires resolution of very
difficult international and domestic spectrum issues.  Spectrum availability is determined
by regulations that "allocate" specific bands to selected radio services, and by technical
expertise that promotes the sharing and "coordination" of spectrum use between various
systems within and outside of the United States.  Sufficient spectrum needs to be
allocated and coordinated, both domestically and internationally, to meet growing
satellite needs.  

     First, there are technical constraints on spectrum availability.  The radio spectrum
is the critically important resource that is utilized to support satellite and other radio
communications.  The channel capacity (or speed of data transmissions) of operating
systems is directly related to the amount of "bandwidth" available.  The U.S. is not only
a large user of the radio spectrum, it is also a leader in developing and implementing
more efficient uses of the available bandwidth.  Nevertheless, increasing demand for
faster and higher capacity systems has led us to become concerned about the amount of
spectrum available to satisfy these needs.  

     Second, there are difficult issues in spectrum allocation among competing carriers
from many different countries and international satellite organizations.  On the
international level, spectrum allocations are considered at World Radio Conferences
(WRCs), sponsored by the International Telecommunications Union (ITU).  The ITU's
180 member countries and many private sector members meet in biannual WRCs to
discuss international spectrum allocation for telecommunications and associated
concerns.  To be successful at WRCs, the U.S. needs to define its goals early for future
satellite services, and engage in bilateral negotiations on satellite issues prior to the
WRCs.  

     We are preparing for WRC-95 by working in close coordination with the
Department of Commerce (NTIA) and the Department of State to develop consensus U.S.
positions on satellite issues at an early date.  As part of our coordination efforts, the
Principals of the FCC, the Department of State and NTIA have monthly meetings to
discuss international telecommunications issues affecting all three agencies, such as
privatization of the international satellite organizations and spectrum coordination.  I
believe that this process has enabled the three agencies to formulate a unified position
on the important international telecommunications issues of the day, and to develop
coordinated plans for advocating their positions at international conferences.   This
process has been working smoothly.  I have enjoyed participating in these meetings and
have learned much from the exchange with my colleagues in the Departments of State
and Commerce.

     As part of the coordination and advisory process, the FCC has also initiated a
public notice of inquiry proceeding that addresses all issues that will be considered at
WRC-95.  Initial public comments have been received and we expect a second round of
responses in early August.  Finally, we have established a WRC-95 Industry Advisory
Committee and appointed as Chair from private industry, Mr. Gary Epstein, former Chief
of the FCC's Common Carrier Bureau.  This advisory committee will develop private
sector views on WRC-95 issues.  The advisory committee and its informal working
groups have held regular meetings since the committee's inception in May.  In
accordance with the WRC-95 agenda, a large part of its work will relate to mobile
satellite service (MSS) matters.  Specifically, WRC-95 will address constraints on the use
of MSS allocations made at the World Administrative Radio Conference-92 (WARC-92),
review the date on which previously adopted MSS allocations in the 2 GHz range will
enter into force, discuss regulatory and allocation issues regarding feeder link spectrum
to support satellite services, and discuss the possibility of making additional worldwide
MSS allocations.  

     The third major factor in promoting access to usable radio spectrum is to ensure a
competitive opportunity for U.S.-based satellite service providers in international satellite
spectrum coordination.  The international coordination process requires the U.S. to
publish notices of proposed satellite systems with the ITU, and to notify potentially
affected foreign administrations of such proposals.  The U.S. must then negotiate who
will use what part of a given satellite spectrum allocation.  As more foreign
administrations, such as Russia, Mexico and Canada, announce plans to implement
satellite systems, and as system configurations become more complex, the spectrum
allocation and coordination processes become more demanding.  This has required
significant and increasing engineering resources over the last few years, and in the future
our success will depend on having sufficient resources available to engage in effective
satellite coordination.  However, I am optimistic that, with continued inter-agency
cooperation, active involvement of the private sector, and the support of the Congress in
the reauthorization process, we will be able to meet these challenges and win favorable
treatment for U.S. systems.

     To achieve the goal of global communications available to anyone, anywhere,
anytime, the U.S. and the world must use the spectrum more effectively.  This involves
active consideration of international telecommunications standards at the ITU to promote
coexistence and interoperability of increasingly complex systems such as LEO systems
and personal communication services.  U.S. industry has been a key player in WRC
technical standards groups which consider issues such as interoperability.  

     To make important and meaningful U.S. contributions to the ITU technical groups,
the WRCs and the spectrum coordination process, the FCC will require more engineering
resources, as detailed in our recent reauthorization proposal.  We have been working
closely with Congress in the reauthorization process for the FCC, and appreciate this
committee's support.  To serve the public and industry effectively, the FCC must train
and commit additional engineers for the spectrum coordination and allocation processes. 
Developing and implementing complex standards also requires the time and talent of
many of our best people.  As an example of the resources required in this area, for
PanAmSat to launch its satellite this past month, the FCC devoted the energies of several
engineers logging many hours over a two and a half year period to facilitate the
necessary coordination with INTELSAT and numerous foreign governments, including the
Japanese and the Russians, as well as several satellite operators. This is just one of more
than 35 geo-synchronous satellites currently in the coordination process, not to mention
the many LEO satellite systems that will need to be coordinated shortly.

     To facilitate growth in the satellite industry and improve our spectrum
coordination and allocation work, we are considering as part of the FCC's reorganization
proposal consolidation of all satellite activities into one International Bureau.  This will
better enable us to foster a more competitive domestic satellite industry that is responsive
to consumer needs.  It will also help us to deal effectively with the specialized issues
associated with the international nature of satellite technology.  As these proposals are
finalized later this summer, we look forward to discussing them with members of
Congress and, in particular, with this Committee.

         IV. Competition in International Fixed Satellite Systems

     The FCC's regulatory policies governing international fixed satellite systems also
reflect the principles of choice, opportunity and fairness.  Traditionally, international
fixed satellite services in the United States have been provided by INTELSAT through
Comsat.    The INTELSAT system has grown dramatically since its founding, but faces
increasing competition from separate satellite systems that seek a share of the
international market, as well as fiber optic cable and other new technologies. 

     In the 1980s and the 1990s, in order to create direct facilities-based competition
to INTELSAT, the U.S. licensed three separate fixed satellite system providers, PanAmSat,
Orion and Columbia.  PanAmSat, a U.S. company, began offering in 1988 innovative
services to South America, a previously underserved region.  As demand for its services
has increased, PanAmSat has digitized its services, such as satellite news gathering, to
make more efficient use of its satellite capacity.  PanAmSat's success has led it to launch
its second satellite just this month.  It has also planned two more satellites which will be
launched over the next year or two.

     Other separate system providers are also successful.  Columbia has been
operational since 1992 offering a variety services through transponders leased from
NASA.   Additionally, Orion is planning to launch its first satellite this Fall which will be
aimed at the video, satellite news gathering and multimedia distribution markets.   We
expect, as demonstrated by the PanAmSat example, that separate satellite systems will
increase in both size and number in the near future.

         V. Competition in International Mobile Satellite Systems

     Following the World Administrative Radio Conference in 1992 (WARC-92), which
allocated frequencies for MSS, the FCC has taken several actions to make mobile services
more widely available.  Mobile satellite services have been able to expand beyond their
traditional safety and distress role largely due to the decrease in cost of advanced signal
processing technology for mobile terminals.   In fact, mobile satellite communications
has the potential to be a billion dollar plus industry.  The FCC hopes that our regulatory
regime will help the U.S. retain its lead in this area, and foster innovative services to the
American public to meet their mobile satellite communication needs.

     Low earth orbit satellite (LEO) systems are an important new satellite-based
technology for mobile communications.  The FCC currently has pending before it three
applications to operate LEOs on frequencies below 1 GHz.  Those "Little LEOs" would
be capable of providing certain data services within the U.S. and around the world,
including tracking and position determination, data transmission, and emergency
services. 

     There are five applications pending to operate low earth orbiting systems above 1
Ghz.  Those "Big LEOs" would be capable of providing a wide range of voice and data
services, including cellular-like telephone services and data transmission for applications
such as satellite-based news gathering, position location, search and rescue, disaster
management, environmental monitoring, paging, facsimile, cargo tracking, industrial
monitoring and control services.

     The proposed LEO systems offer the potential for significant economic and social
advances and for service to developing countries by providing an instant
telecommunications infrastructure at minimum costs.   We believe that the introduction
of new services, such as those to be provided by the LEOs, will promote competition in
the satellite service marketplace and stimulate economic growth in the U.S. and abroad.   
LEO technology and services will also enhance productivity and economic growth in
other sectors, such as the launch industry and the satellite manufacturing industry.  

     Recently, the FCC has taken the following actions in regard to LEOs:
     a)  we were  instrumental in obtaining spectrum allocations for LEOs at WARC-92,
     working in coordination with the Departments of State, Commerce and private
     industry;
     b) we provided domestic spectrum allocations for both Big and Little LEOs;
     c)  we conducted two negotiated rulemakings, one for Little LEOs and one for Big
     LEOS; and
     d) we adopted regulations for licensing and operation of Little LEO systems, and
     proposed regulations for licensing and operation of Big LEO systems. 
The FCC still has to issue licenses for the Little LEOs, draft rules governing Big LEO
licensing and operation, issue licenses for Big LEOs, and coordinate all the LEO systems
internationally.

     The primary focus of the FCC's proceedings on LEOs is to ensure that the benefits
of LEO technology are available to U.S. consumers as soon as possible and in a
competitive manner.  The three Little LEO applicants should all be able to operate
technically within the planned spectrum, with room for additional entrants.  Our
proposed spectrum sharing plan would permit authorization of up to five Big LEOs.  

     Big LEOs, high frequency (HF) radio and other such services are expected to
compete with Inmarsat's mobile communications services.  Through Comsat, the U.S. has
been a major participant in the Inmarsat organization and a major user of  Inmarsat's
services.  In response to this increasingly competitive environment, Inmarsat is, among
other things, considering restructuring and is planning for a subsidiary to offer a hand-
held mobile satellite service, Inmarsat-P.  

     Mr. Chairman, the MSS arena has been, and continues to be dynamic.  We
believe that the new mobile satellite technologies and services that the FCC is
encouraging will produce a multitude of consumer benefits, such as declining prices and
an expanded telecommunications network.  In addition, we believe that a  more
competitive MSS environment will lead to more choices for consumers.  

     VI.  Restructuring of the International Satellite Organizations, 
                           INTELSAT and Inmarsat

     As mentioned previously, the international satellite organizations (ISOs) INTELSAT
and Inmarsat play an important role in providing efficient and cost-effective
communications to the world community.   However, last year, Comsat expressed its
view that the ISOs' present treaty-based structures may hamper them in responding to
competitive pressures.  Comsat called for privatization of the ISOs in the form of
corporations with publicly traded shares.   Comsat has also stated its belief that, despite
this preference, some form of continued intergovernmental involvement may be
necessary politically in order to achieve long term restructuring of the ISOs.  

     Both INTELSAT and Inmarsat have recently started down the path of change in
order to compete more effectively with, for example, separate satellite systems and
planned Big LEO systems.  For example, Article 14(d) of the INTELSAT Convention,
which governs the determination of whether separate satellite systems will cause
significant economic harm to the INTELSAT system, has been liberalized.  The economic
harm test has been eliminated for all separate satellite systems not interconnected with
the public switched telephone network, and for separate satellite systems interconnected
with the public switched network, for up to 1,250 circuits.  We expect that this Fall
INTELSAT will change its economic harm determination so that only separate satellite
systems providing over 8,000 interconnected public switched network circuits will
require an economic harm determination under Article 14(d).  Additionally, INTELSAT
management and the INTELSAT Board of Governors recently have taken steps to
streamline the INTELSAT decision-making process.  INTELSAT formed a Working Group
to address the issue of whether INTELSAT should be restructured and if so, in what form. 
The U.S., through the FCC and the Department of State and the Department of
Commerce, has participated in this group on a regular basis.

     There has also recently been significant activity with respect to Inmarsat.  Article 8
of the Inmarsat Agreement which governs the determination of economic harm to the
Inmarsat system (and is the Inmarsat equivalent to the INTELSAT Article 14(d)) was
liberalized in 1993 to allow automatic approval of all economic harm consultations by
separate systems for Inmarsat for a period of approximately two years.  Additionally, over
the past several months, Inmarsat management and the Inmarsat Council have taken steps
to streamline their decision-making processes.  To grapple with privatization, Inmarsat
has also established a working group in which the U.S., through the FCC, the
Departments of State and Commerce, and Comsat, actively participates. 

     As required by statute, the FCC, the Department of Commerce and the
Department of State all participate in the instructional process to Comsat in Inmarsat and
INTELSAT.  This process allows these agencies to advise and instruct Comsat on actions
it should or should not take in these international satellite organizations and includes
regular meetings between U.S. government staff and Comsat.

     To formulate a U.S. government position on the privatization and future structure
of INTELSAT and Inmarsat, the Department of State, the Department of Commerce and
the FCC have formed a fourteen agency task force.  As the task force completes its
ongoing work, a recommendation on privatization and restructuring will be issued later
this year.  On July 14, the Department of State hosted a public hearing concerning the
potential restructuring of the ISOs.  While there was no consensus among the
participants on privatization and restructuring, or the timing of such changes, the views
expressed will be an important consideration for the inter-agency task force as it
formulates its own views.

     I believe that any restructuring of INTELSAT and Inmarsat should rely on the GII
principles and promote effective competition; promote operational efficiency to respond
to an emerging competitive market; encourage the ISOs to meet consumer needs with
reasonable rates; promote universal service; ensure open and nondiscriminatory
ownership of the ISOs;  provide maritime safety and distress services; satisfy national
security requirements; and ensure the peaceful use of outer space.  We believe that
reliance on these goals will assist the United States in fostering a competitive domestic
and international satellite services industry, without allowing any unfair advantages to
flow to any particular entity.  These goals will also benefit developing nations by
ensuring that satellite services remain available to them.

     The U.S. government has been considering several models that a privatized
INTELSAT or Inmarsat could take.  These range from divestiture of the organizations,
similar to the approach taken with AT&T in the 1980s, to creating corporate entities with
publicly traded shares, to retaining some form of intergovernmental involvement in the
privatized entities. However, the FCC believes that whatever structure is ultimately
developed for the ISOs, there will be a need for a transitional phase if any major
restructuring occurs.  There are several possible options during the transition period. 
The United States could, for example, permit competitive and/or direct access to the
INTELSAT or Inmarsat space segment by entities other than Comsat.  However, no
decision has been made regarding these transitional or final structure issues.

     If the ISOs are restructured and privatized: a) Comsat's special status as a statutory
monopoly for INTELSAT and Inmarsat service will likely need to be revisited (which
would require amendments to the Communications Act); b) a restructured INTELSAT or
Inmarsat should permit ownership by U.S. companies other than Comsat; c) Comsat
should be entitled to the full value of its investment in the restructured organizations
under any scenario; and d) direct access in the United States to the space segment
should be permitted, allowing U.S. carriers and users to go directly to INTELSAT and
Inmarsat to obtain satellite services.  Taking these steps, I believe, Mr. Chairman, will
help to ensure a competitive satellite marketplace domestically and internationally and
will foster incentives for lower rates to U.S. consumers.  

                             VIII.  Conclusion

      Mr. Chairman, Arthur C. Clarke, the man who first proposed the concept of the
geostationary orbit satellite, said, "I believe that communication satellites can unite
mankind."   Satellites are a critical part of the information highways that, in the words of
Vice-President Gore, "will allow us to share information, to connect, and to
communicate as a global community.  From these connections we will derive robust and
sustainable economic progress, strong democracies, better solutions to global and local
environmental challenges, improved healthcare, and - ultimately - a greater sense of
shared stewardship of our small planet."  I believe that these connections will be fostered
through a competitive and innovative satellite telecommunications industry, with the U.S.
continuing to play a leading role.