FOR IMMEDIATE RELEASE:             NEWS MEDIA CONTACT:
August 3, 2000                     Rosemary Kimball at (202) 418-0511

COMMISSION GRANTS INTELSAT  APPLICATION TO SERVE THE U.S. MARKET
                       UPON PRIVATIZATION
                                
Washington, DC -- The Commission has authorized INTELSAT to operate in the
United States after the 143-member intergovernmental satellite organization
successfully privatizes next year.  The decision grants INTELSAT full access to the U.S.
market to provide satellite services to, from, and within the United States effective upon
privatization.  This action will facilitate the final transition of the last intergovernmental
satellite organization to a private entity, and promote competition in the global satellite
market.

INTELSAT was created in 1971 as a result of initiatives undertaken by the United
States under the Communications Satellite Act of 1962 and by other countries. 
INTELSAT owns and operates a global satellite system that transmits much of the
world's international telephone, video, data, Internet and other communications. The
United States relies on INTELSAT to satisfy much of its commercial and government
satellite communications needs.  The United States accounts for over 30 percent of
INTELSAT's traffic.

INTELSAT is in the final months of a multi-year effort to privatize.  The target
date for privatization is April 1, 2001.  As an intergovernmental organization, INTELSAT
is not subject to any national licensing authority.  It created Intelsat LLC, a wholly
owned Delaware corporation, for the purpose of filing applications with the FCC for
licenses to operate its satellites.  Upon privatization, INTELSAT would transfer its
satellites to Intelsat LLC.  It also would transfer 22 associated orbital locations to the
U.S. registry under the procedures of the International Telecommunications Union
(ITU).

The Commission today authorized Intelsat LLC to: (1) operate 17 existing C-
band and Ku-band satellites presently owned and operated by INTELSAT; (2)
construct, launch and operate 10 satellites planned by INTELSAT for operation in these
bands (nine of which will be under construction by the effective date of the licenses);
and (3) relocate certain currently operating satellites to different orbital locations upon
launch of planned satellites.  The satellites authorized and the associated orbital
locations are identified in Attachment A.

In taking its action, the Commission emphasized that, as a U.S. licensee, Intelsat
LLC would be able to operate in a manner consistent with the principles upon which
INTELSAT has decided to privatize: (1) maintaining global connectivity and coverage;
(2) protecting lifeline users and connectivities; and (3) ensuring non-discriminatory
access to the system.  The Commission pointed out that these principles have been
embodied in U.S. satellite policy since 1962 when the Communications Satellite Act
was enacted by Congress. INTELSAT's continued commitment to these principles is
important to ensure service to countries that rely primarily on INTELSAT for
international services.  These countries are either developing countries or countries that
are served by very few international carriers.

The Commission's action reaffirmed U.S. support for the privatization of
INTELSAT, a longstanding policy goal of the United States.  Privatization as a means of
promoting competition is the stated purpose of the recently enacted "Open-Market
Reorganization for the Betterment of International Telecommunications Act" (the ORBIT
Act).  The ORBIT Act received widespread endorsement in the United States from
telecommunications service providers, satellite manufacturers and suppliers of
telecommunications and information technology products, and competing satellite
operators, as well as satellite operators outside the United States.  In its decision, the
Commission recognized that privatization of INTELSAT will make it a more effective
competitor in the global satellite market and would promote fairer and more robust
competition in the satellite services market.

In September, the INTELSAT Board of Governors is expected to consider a
comprehensive plan for privatization that includes proposals regarding decisions on
licensing jurisdictions.  The INTELSAT Assembly of Parties is expected to review and
pass upon this plan at a meeting in November. 

The Commission noted that the ORBIT Act specifically permits it to act upon
Intelsat LLC's application prior to privatization provided that authorization is conditioned
upon compliance with provisions in the Act.  The FCC decision, therefore, imposes this
condition and provides for review of INTELSAT's privatization prior to the effective date
of the licenses.  

The FCC found that waiver of certain technical rules for INTELSAT's satellites
would be in the public interest.  The Commission said that special circumstances exist
in justifying the waivers and that the underlying objectives of its technical rules would
not be undermined. The FCC noted the historical and policy reasons why the design
and technical parameters of the INTELSAT system are different from other 
U.S-authorized systems.  The system was developed largely with the support and
participation of the United States as the first large-scale global system of its type.  The
design of the INTELSAT system predates most or all of the rules for which other
countries have requested waivers.  The Commission said that it anticipates that Intelsat
LLC would transition over time to a system that complies with the technical rules upon
which other U.S. licensed systems operate.  It found, however, that the retroactive
application to INTELSAT of its current technical policies and rules would be cost
prohibitive and would threaten continuous service to U.S. customers. The INTELSAT
system has provided service to U.S. customers for many years. The rules and satellites
that are the subject of the waiver requests are identified in Attachment B.

The licenses are conditioned on time deadlines for construction, launch and
operation of the 10 new satellites proposed by INTELSAT.  The Commission stated that
such milestone requirements will ensure, on a going-forward basis, that Intelsat LLC will
make expeditious use of all orbital locations transferred to the United States upon
privatization.

The Commission noted that current INTELSAT orbital locations are registered
with the ITU by the United States on behalf of INTELSAT member countries.  It
distinguished these orbital locations from others registered by the United States at the
ITU. The FCC  determined that, should it no longer be able to license Intelsat  LLC for
use of any orbital locations transferred to the United States, it would cancel the
registrations with the ITU so that they could be made available to other operators under
ITU procedures.

The FCC stated that, in the event INTELSAT selects a jurisdiction other than the
United States as its licensing jurisdiction, the Commission would consider, in a separate
proceeding, pursuant to applicable U.S. law, INTELSAT's operation in the U.S. market
as a non-U.S. licensed satellite system.  That proceeding would be initiated upon the
filing of appropriate applications under the FCC's 1997 DISCO II decision.  The DISCO
II decision provides procedures and standards upon which the FCC considers
applications of non-U.S. licensed satellite operators to enter the U.S. market consistent
with U.S. WTO obligations.

Action by the Commission August 2, 2000, by              (FCC 00-287).  Chairman
Kennard, Commissioners Ness, Powell and Tristani with Commissioner Furchtgott-Roth
approving in part and dissenting in part and issuing a statement that will be released
with the 

For further information contact James Ball, International Bureau (202-418-0427),  
Michael McCoin (202-418-0774) or John Martin (202-418-7281), Satellite and
Radiocommunications Division, International Bureau.


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