[Federal Register: April 12, 1999 (Volume 64, Number 69)]
[Notices]
[Page 17625-17626]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr12ap99-54]

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DEPARTMENT OF COMMERCE

NATIONAL TELECOMMUNICATIONS AND INFORMATION ADMINISTRATION
[Docket No. 990405086-9086-01]
RIN 0660-ZA08


Market for Satellite Communications and the Role of
Intergovernmental Satellite Organizations

AGENCY: National Telecommunications and Information Administration,
Commerce.

ACTION: Notice, request for comments.

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SUMMARY: The Department of Commerce requests comments regarding the
advantages accorded signatories of intergovernmental satellite
organizations (ISOs), in terms of immunities, market access, or
otherwise, in the countries or regions served by the International
Telecommunications Satellite Organization (INTELSAT) and the
International Mobile Satellite Organization (Inmarsat), the reason for
such advantages, and an assessment of progress toward fulfilling a pro-
competitive privatization of those organizations. The International
Anti-Bribery and Fair Competition Act of 1998 implements the
Organization for Economic Cooperation and Development (OECD) Convention
on Combating Bribery of Foreign Public Officials in International
Business Transactions (the OECD Convention). In that legislation, the
U.S. Congress imposed certain reporting requirements for the Department
of Commerce that are due on July 1, 1999 and each of the next five
years. The House report on the legislation expresses an expectation for
extensive fact-findings on the nature of the market for satellite
communications and, in particular, the role of the ISOs, INTELSAT and
Inmarsat. The Department notes that Inmarsat is scheduled for
privatization on April 15, 1999. The reporting requirements monitor the
implementation and enforcement of other nations' commitments under the
OECD Convention and promote the reduction of privileges and immunities
for the ISOs. This Request for Comments (RFC) will assist the Secretary
of Commerce in responding to those reporting requirements regarding the
ISOs' privileges and immunities.

DATES: Comments must be received by May 12, 1999.

ADDRESSES: The Department invites the public to submit written comments
in paper or electronic form. Comments may be mailed to Milton Brown,
National Telecommunications and Information Administration (NTIA), Room
4713, U.S. Department of Commerce, 14th and Constitution Avenue, NW,
Washington, DC 20230. Paper submissions should include a version on
diskette in ASCII, Word Perfect (please specify version), or Microsoft
Word (please specify version) format.
    Comments submitted in electronic form may be sent to
isocomments@ntia.doc.gov. Electronic comments should be submitted in
the formats specified above.

FOR FURTHER INFORMATION CONTACT: Milton Brown, NTIA/OCC, (202) 482-
1816.

SUPPLEMENTARY INFORMATION:

Background

    INTELSAT is a treaty-based global communications satellite
cooperative with 143 member countries. INTELSAT was created to enhance
global communications and to spread the risks of creating a global
satellite system across telephone operating companies from many
countries. <SUP>1</SUP> Inmarsat was created to improve the global
maritime communications satellite system that would provide distress,
safety, and communications services to seafaring nations in a
cooperative, cost-sharing entity. Inmarsat is scheduled for
privatization on April 15, 1999.
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    \1\ See Treaty on Principles Governing the Activities of States
in the Exploration and Use of Outer Space, Including the Moon and
Other Celestial Bodies.
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    As intergovernmental satellite organizations, both INTELSAT and
Inmarsat are governed by ``Parties'' and managed by ``signatories.''
The Parties are the national government members of the INTELSAT and
Inmarsat agreements. Signatories are designated by each party to
participate in the commercial operations of the organization. They hold
ownership interests in varying degrees. They also assist with the
operation and management of the systems and are distributors of ISO
services in their own countries. Signatories may be government-owned or
controlled telecommunications monopolies or other telecommunications
service providers. The publically traded Comsat Corp. is the U.S.
Signatory to INTELSAT. ISOs are subject to oversight by the Assembly of
Parties, and signatories are subject to oversight by their respective
governments.
    To implement public service obligations effectively and as part of
the ISOs' unique treaty status, the ISOs benefit from certain
privileges and immunities. As such, these ISOs are generally immune
from suit, including private or public prosecution on antitrust
charges. Moreover, neither ISO pays taxes on revenues, and exemption
extends to import duties and taxes, communications and property taxes.
Signatories, however, are subject to national taxes, including for
their share of the organizations' distributed returns.
    The International Anti-Bribery and Fair Competition Act of 1998
requires the Secretary of Commerce to submit a report to the House of
Representatives and the Senate which contains information regarding the
OECD Convention which includes the following: (1) A list of countries
that have ratified the Convention; (2) a description of the domestic
laws enacted by each party to the Convention that implements
commitments under the Convention; and (3) an assessment of the measures
taken by each party to the Convention during the previous year to
fulfill its obligations under the Convention. See Pub. L. No 105-366,
sec. 6(a). Accordingly, the Secretary of Commerce is required to
report, inter alia, on the ``terms of market access, government
ownership, government contracts or connections, privileges and
immunities, favorable treatment by national regulatory authorities or
tax treatment . . . in the countries or regions served by the [ISOs],
and the reasons for such advantages.'' H.R. REP. NO. 105-802, at 9
(1998). In preparation for this report, the Secretary of Commerce is
required to seek and incorporate comments from the private sector,
including competing satellite companies and satellite services users.
Id.
    We are now formally soliciting public comment on the advantages, in
terms of immunities, market access, or otherwise, in the countries or
regions served by INTELSAT and Inmarsat, the reasons for such
advantages, and an assessment of progress toward fulfilling a pro-
competitive privatization of those

[[Page 17626]]

organizations. ``Pro-competitive privatization'' is defined as
``privatization that the President determines to be consistent with the
United States policy of obtaining full and open competition to such
organizations (or their successors), and nondiscriminatory market
access, in the provision of satellite services.'' See Pub. L. No 105-
366, sec. 5(a)(2). Respondents should find it useful to review the full
text of the International Anti-Bribery and Fair Competition Act of
1998.
Kathy Smith,
Acting Chief Counsel.
[FR Doc. 99-8952 Filed 4-9-99; 8:45 am]
BILLING CODE 3510-60-P