Calendar No. 189

106TH CONGRESS

1ST SESSION S. 376

[Report No. 106–100]

A BILL

To amend the Communications Satellite Act of

satellite communications, and for other purposes.1962 to promote competition and privatization in

JUNE 30, 1999

Reported with an amendment in the nature of a

substitute
II

Calendar No. 189

106TH CONGRESS

1ST SESSION S. 376

[Report No. 106–100]

To amend the Communications Satellite Act of 1962 to promote competition

and privatization in satellite communications, and for other purposes.

IN THE SENATE OF THE UNITED STATES

FEBRUARY 4, 1999

Mr. BURNS (for himself, Mr. MCCAIN, Mr. DORGAN, Mr. BRYAN, Mr.

BROWNBACK, Mr. CLELAND, Mrs. HUTCHISON, Mr. WYDEN, Ms. MIKULSKI, Ms. COLLINS, Mr. ASHCROFT, Mr. FRIST, Mr. ROCKEFELLER, Mr.

ABRAHAM, Ms. SNOWE, Mr. KERRY, and Mr. INOUYE) introduced the following bill; which was read twice and referred to the Committee on Commerce, Science, and Transportation

JUNE 30, 1999

Reported by Mr. MCCAIN, with an amendment in the nature of a substitute

[Strike all after the enacting clause and insert the part printed in italic]

A BILL

To amend the Communications Satellite Act of 1962 to promote competition and privatization in satellite communications, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. SHORT TITLE.

2 This Act may be cited as the ‘‘Open-market Reorga3 nization for the Betterment of International Tele4 communications Act’’.

5 SEC. 2. PURPOSE.

6 It is the purpose of this Act to promote a fully com7 petitive domestic and international market for satellite

8 communications services for the benefit of consumers and

9 providers of satellite services by fully encouraging the pri10 vatization of the intergovernmental satellite organizations,

11 INTELSAT and INMARSAT, and reforming the regu12 latory framework of COMSAT Corporation.

13 SEC. 3. FINDINGS.

14 The Congress finds that:

15 (1) International satellite communications serv16 ices constitute a critical component of global voice,

17 video and data services, play a vital role in the inte18 gration of all nations into the global economy and

19 contribute toward the ability of developing countries

20 to achieve sustainable development.

21 (2) The United States played a pivotal role in

22 stimulating the development of international satellite

23 communications services by enactment of the Com24 munications Satellite Act of 1962 (47 U.S.C. 701–

25 744; hereinafter the ‘‘Satellite Act’’), and by its crit26 ical contributions, through its signatory, COMSAT
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1 Corporation (hereinafter ‘‘COMSAT’’), in the estab2 lishment of INTELSAT, which has successfully es3 tablished global satellite networks to provide member

4 countries with worldwide access to telecommuni5 cations services, including critical lifeline services to

6 the developing world.

7 (3) By statute, COMSAT, a publicly traded cor8 poration, is the sole United States signatory to

9 INTELSAT and, as such, is responsible for carrying

10 out United States commitments under the

11 INTELSAT Agreement and the INTELSAT Oper12 ating Agreement. Pursuant to a binding Head13 quarters Agreement, the United States, as a Party

14 to INTELSAT, has satisfied many of its obligations

15 under the INTELSAT Agreement.

16 (4) In the 37 years since enactment of the Sat17 ellite Act, satellite technology has advanced dramati18 cally, large-scale financing options have improved

19 immensely and international telecommunications

20 policies have shifted from those of natural monopo21 lies to those based on market forces, resulting in

22 multiple private commercial companies around the

23 world providing, or preparing to provide, the domes24 tic, regional, and global satellite telecommunications
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1 services that only INTELSAT had previously had

2 the capabilities to offer.

3 (5) Private commercial satellite communications

4 systems now offer the latest telecommunications

5 services to more and more countries of the world

6 with declining costs, making satellite communica7 tions an attractive complement as well as alternative

8 to terrestrial communications systems, particularly

9 in lesser developed countries.

10 (6) To enable consumers to realize optimum

11 benefits from international satellite communications

12 services, and to enable these systems to be competi13 tive with other international telecommunication sys14 tems, such as fiber optic cable, the global trade and

15 regulatory environment must support vigorous and

16 robust competition.

17 (7) In particular, all satellite systems should

18 have unimpeded access to the markets that they are

19 capable of serving, and the ability to compete in a

20 fair and meaningful way within those markets.

21 (8) Transforming INTELSAT from an inter22 governmental organization into a conventional sat23 ellite services company is a key element in bringing

24 about the emergence of a fully competitive global en25 vironment for satellite services.
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1 (9) Consistent with United States obligations

2 under the WTO Basic Agreement on Telecommuni3 cations Services and to prevent the potential distor4 tion of competition in the United States market, a

5 pro-competitive privatization of INTELSAT is an

6 appropriate prerequisite to granting INTELSAT di7 rect access to users in the United States market.

8 (10) It is in the interest of the United States

9 to remove, by January 1, 2002, the reservation in

10 the Fourth Protocol to the General Agreement on

11 Trade in Services regarding INTELSAT’s access to

12 the United States market through COMSAT, but

13 such reservation cannot be removed without ade14 quate assurance that the U.S. market for satellite

15 services will not be disrupted by such INTELSAT

16 access.

17 (11) The Satellite Act, and other applicable

18 United States laws, need to be updated to encourage

19 the pro- competitive privatization of INTELSAT to

20 update the domestic United States regulatory regime

21 governing COMSAT, and to ensure a competitively

22 neutral United States framework for the provision of

23 domestic and international telecommunications serv24 ices via satellite systems.
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1 SEC. 4. REVISION OF COMMUNICATIONS SATELLITE ACT OF

2 1962.

3 (a) Creation of Corporation.— Section 301 of the

4 Communications Satellite Act of 1962 (47 U.S.C. 731) is

5 amended to read as follows:

6 ‘‘SEC. 301. CREATION OF CORPORATION.

7 ‘‘The corporation shall be subject to the provisions

8 of this Act. The right to repeal, alter, or amend this Act

9 at any time is expressly reserved.’’.

10 (b) SATELLITE SERVICES COMPETITION AND PRI11 VATIZATION.—The Communications Satellite Act of 1962

12 (47 U.S.C. 701) is amended by adding at the end the fol13 lowing:

14 ‘‘TITLE VI—SATELLITE SERVICES

15 COMPETITION AND PRIVATIZATION

16 ‘‘SUBTITLE A—TRANSITION TO A PRIVATIZED

17 INTELSAT

18 ‘‘SEC. 601. POLICY OF THE UNITED STATES.

19 ‘‘It is the policy of the United States to—

20 ‘‘(1) encourage INTELSAT to privatize in a

21 pro-competitive manner as soon as possible, but not

22 later than January 1, 2002, recognizing the need for

23 a reasonable transition and process to achieve a full,

24 pro-competitive restructuring; and

25 ‘‘(2) work constructively with its international

26 partners in INTELSAT, and with INTELSAT
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1 itself, to bring about a prompt restructuring that

2 will ensure fair competition, both in the United

3 States as well as in the global markets served by the

4 INTELSAT system.

5 ‘‘SEC. 602. ROLE OF COMSAT.

6 ‘‘(a) ADVOCACY.— As the sole United States signa7 tory to INTELSAT, COMSAT shall act as an advocate

8 of a pro-competitive privatization of INTELSAT, and

9 shall exercise its voting rights with INTELSAT consistent

10 with that mission and the United States instructional

11 process.

12 ‘‘(b) ANNUAL REPORTS.— COMSAT shall report an13 nually to the Committee on Commerce of the House of

14 Representatives and the Committee on Commerce,

15 Science, and Transportation of the Senate on the progress

16 being made by INTELSAT to privatize in a pro-competi17 tive manner.

18 ‘‘SEC. 603. RESTRICTIONS PENDING PRIVATIZATION.

19 ‘‘(a) INTELSAT ACCESS TO UNITED STATES MAR20 KET.—INTELSAT shall be prohibited from entering the

21 United States market directly to provide any satellite com22 munications services or space segment capacity to carriers

23 (other than the United States signatory, COMSAT) or end

24 users in the United States prior to achieving a pro-com-
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1 petitive privatization certified by the President pursuant

2 to section 612.

3 ‘‘(b) SERVICE RESTRICTIONS.—Until the President

4 makes a certification pursuant to section 612, the fol5 lowing services provided by the INTELSAT system shall

6 not be authorized in the United States by the Federal

7 Communications Commission: direct-to-home satellite

8 services, direct broadcast satellite services, satellite digital

9 audio radio services, and satellite communications services

10 in the Ka Band. The preceding sentence may be waived

11 by the President if the President finds that the provision

12 of such service would enhance national security or serve

13 a vital public interest. This provision is not intended to

14 disrupt or otherwise jeopardize the continuing provision

15 of existing authorized services in the United States via the

16 INTELSAT system.

17 ‘‘SUBTITLE B—PRIVATIZATION OF INTELSAT

18 ‘‘SEC. 611. PRIVATIZATION.

19 ‘‘The President shall secure a pro-competitive privat20 ization of INTELSAT as soon as practicable, but no later

21 than January 1, 2002. Such privatization shall be con22 firmed by a final decision of the INTELSAT Assembly

23 of Parties.
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1 ‘‘SEC. 612. PROVISION OF SERVICES IN THE UNITED STATES

2 BY INTERGOVERNMENTAL SATELLITE ORGA3 NIZATION AFFILIATES.

4 ‘‘(a) IN GENERAL.—In order to achieve the objectives

5 and carry out the purposes of the Open-market Reorga6 nization for the Betterment of International Tele7 communications Act, the Commission—

8 ‘‘(1) shall apply a presumption in favor of entry

9 to an IGO affiliate licensed by a WTO Member for

10 services covered by U.S. commitments under the

11 WTO Basic Telecom Agreement;

12 ‘‘(2) may attach conditions to any grant of au13 thority to an IGO affiliate that raises the potential

14 for competitive harm; or

15 ‘‘(3) shall in the exceptional case in which an

16 application by an IGO affiliate would pose a very

17 high risk to competition in the U.S. satellite market,

18 deny the application.

19 ‘‘(b) DETERMINATION FACTORS.—In determining

20 whether an application to serve the United States market

21 by an IGO affiliate raises the potential for competitive

22 harm under (a)(2), the FCC shall consider any potential

23 anti- competitive or market distorting consequences of

24 continued relationships or connections between an IGO

25 and its affiliates, including:
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1 ‘‘(1) whether the affiliate is structured to pre2 vent practices such as collusive behavior or cross3 subsidization;

4 ‘‘(2) the degree of affiliation between the IGO

5 and its affiliate;

6 ‘‘(3) whether the affiliate can directly or indi7 rectly benefit from IGO privileges and immunities;

8 ‘‘(4) the ownership structure of the affiliate and

9 the effect of IGO and other Signatory ownership;

10 ‘‘(5) the existence of clearly defined arms-length

11 conditions governing the affiliate-IGO relationship

12 including separate officers, directors, employees, and

13 accounting systems;

14 ‘‘(6) the existence of fair market valuing for

15 permissible business transactions between an IGO

16 and its affiliate that is verifiable by an independent

17 audit and consistent with normal commercial prac18 tice;

19 ‘‘(7) the existence of common marketing;

20 ‘‘(8) the availability of recourse to IGO assets

21 for credit or capital; and

22 ‘‘(9) whether an IGO to registers or coordinates

23 spectrum or orbital locations on behalf of its affil24 iate.
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1 (c) SUNSET.—The provisions of this section shall

2 cease to have effect upon the certification by the President

3 pursuant to section 613(b).

4 ‘‘SEC. 613. CERTIFICATION.

5 ‘‘(a) APPLICATION.—Upon a final decision of the

6 INTELSAT Assembly of Parties creating the legal struc7 ture and characteristics of the privatized INTELSAT,

8 INTELSAT shall file a request with the President for cer9 tification that the privatized INTELSAT’s entry into the

10 United States market for satellite services will not distort

11 competition in that market.

12 ‘‘(b) CERTIFICATION.—Upon application by

13 INTELSAT, the President shall make such determination

14 in accordance with the pro-competitive criteria in sub15 section (c), and shall take into consideration all other rel16 evant competitive factors, including factors related to

17 other competitors in the United States and global market

18 for satellite services.

19 ‘‘(c) CRITERIA.—In making a determination pursu20 ant to subsection (b), the President shall determine that

21 a privatized INTELSAT—

22 ‘‘(1) has no privileges or immunities limiting

23 legal accountability, commercial transparency or tax24 ation;
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1 ‘‘(2) has submitted to the jurisdiction of com2 petition and independent regulatory authorities of a

3 nation that is a signatory to the World Trade Orga4 nization Agreement on Basic Telecommunications

5 and that has implemented or accepted the agree6 ment’s reference paper on regulatory principles;

7 ‘‘(3) can offer assurance of an arms-length rela8 tionship in all respects between itself and any affil9 iate, including New Skies, and in particular with re10 spect to technical, financial, and management con11 tracts;

12 ‘‘(4) can demonstrate that the valuation of as13 sets to be transferred post-privatization is in accord14 ance with generally accepted accounting principles;

15 ‘‘(5) has access to orbital locations and associ16 ated spectrum post-privatization in accordance with

17 the same regulatory processes applicable to other

18 commercial satellite systems;

19 ‘‘(6) conducts technical coordinations post-pri20 vatization under normal, established ITU proce21 dures;

22 ‘‘(7) has an ownership structure in the form of

23 a stock corporation or other similar and accepted

24 commercial mechanism, and a commitment to a
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1 timely initial public offering has been established for

2 the sale or purchase of company shares;

3 ‘‘(8) does not enter into agreements or arrange4 ments to secure exclusive access to any national tele5 communications market; and

6 ‘‘(9) will have accomplished a privatization con7 sistent with the criteria listed in this subsection at

8 the earliest possible date, but not later that January

9 1, 2002.

10 ‘‘SEC. 614. FCC REVIEW OF LICENSE APPLICATIONS.

11 ‘‘(a) APPLICATION.—If the President makes such a

12 certification pursuant to section 613, the following appli13 cations and Letters of Intent to provide satellite commu14 nications services by or via the privatized INTELSAT,

15 internationally or within the domestic United States, oth16 erwise permitted by law, may be filed with the Commission

17 provided that no instrument of authorization may be

18 granted prior to the implementation of the certified privat19 ization:

20 ‘‘(1) Applications for a satellite earth station or

21 space station under title III of the Communications

22 Act of 1934 (47 U.S.C. 301 et. seq.).

23 ‘‘(2) Letters of Intent to provide service in the

24 United States via non-U.S.-licensed space segment.
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1 ‘‘(3) Applications under section 214 of the

2 Communications Act of 1934 (47 U.S.C. 214).

3 ‘‘(b) PUBLIC INTEREST DETERMINATION.—Except

4 as provided in subsection (c), nothing in this Act shall re5 strict or expand the Commission’s ability to make a public

6 interest determination concerning any application per7 taining to a privatized INTELSAT’s entry into the United

8 States market.

9 ‘‘(c) EFFECT OF PRESIDENTIAL CERTIFICATION ON

10 COMMISSION DELIBERATIONS.—The Commission shall be

11 bound by the President’s privatization certification made

12 pursuant to section 613 for purposes of any license appli13 cation, including space segment and earth station applica14 tions, pending before the Federal Communications Com15 mission which pertains to a privatized INTELSAT’s entry

16 into the United States market.

17 ‘‘SEC. 614. FAILURE TO PRIVATIZE IN A TIMELY MANNER.

18 ‘‘(a) REPORT.—In the event that INTELSAT fails

19 to fully privatize as provided in sections 611 and 612 by

20 January 1, 2002, the President shall—

21 (1) immediately commence deliberations to de22 termine what additional measures should be imple23 mented to ensure the rapid privatization of

24 INTELSAT;
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1 (2) no later than March 31, 2002, issue a re2 port delineating such measures to the Committee on

3 Commerce of the House of Representatives, and

4 Committee on Commerce, Science, and Transpor5 tation of the Senate; and

6 (3) withdraw as a Party from INTELSAT.

7 ‘‘(b) RESERVATION CLAUSE.—The President may de8 termine that, in consideration of progress made, it is in

9 the national interest of the United States to provide a rea10 sonable extension of time for completion of privatization.

11 ‘‘SUBTITLE C—COMSAT GOVERNANCE AND OPERATION

12 ‘‘SEC. 621. ELIMINATION OF PRIVILEGES AND IMMUNITIES.

13 ‘‘(a) IN GENERAL.—COMSAT shall not have any

14 privilege or immunity on the basis of its status as a signa15 tory or a representative of the Party to INTELSAT, ex16 cept that COMSAT retains its privileges and

17 immunities—

18 ‘‘(1) for those actions taken in its role as the

19 United States signatory to INTELSAT upon in20 struction of the United States Government;

21 ‘‘(2) for actions taken when acting as the

22 United States signatory in fulfilling obligations

23 under the INTELSAT Operating Agreement;

24 ‘‘(3) for INTELSAT signatory activities which

25 COMSAT does not support; and
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1 ‘‘(4) in accordance with any other exceptions as

2 the President shall make in accordance with sub3 section (b).

4 ‘‘(b) EXCEPTIONS.—The President, or the Presi5 dent’s designee, shall ensure that any action authorized

6 by the exception is consistent with the purposes of this

7 Act and COMSAT’s responsibilities as the United States

8 signatory.

9 ‘‘(c) NO JOINT OR SEVERAL LIABILITY.—If COM10 SAT is found liable for any action taken in its status as

11 a signatory or a representative of the Party to

12 INTELSAT, any such liability shall be limited to the por13 tion of the judgment that corresponds to Comsat’s per14 centage of the responsibility, as determined by the trier

15 of fact.

16 ‘‘(d) PROSPECTIVE EFFECT OF ELIMINATION.—The

17 elimination of privileges and immunities contained in this

18 section shall apply only to actions or decisions taken by

19 COMSAT after the date of enactment of this section.

20 ‘‘SEC. 622. ABROGATION OF CONTRACTS PROHIBITED.

21 ‘‘Nothing in this Act or the Communications Act of

22 1934 (47 U.S.C. 151 et. seq.) shall be construed to modify

23 or invalidate any contract or agreement involving COM24 SAT, INTELSAT, or any terms or conditions of such

25 agreement in force on the date of enactment of the Open-
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1 market Reorganization for the Betterment of Inter2 national Telecommunications Act, or to give the Commis3 sion authority, by rule-making or any other means, to in4 validate any such contract or agreement, or any terms and

5 conditions of such contract or agreement.

6 ‘‘SEC. 623. PERMITTED COMSAT INVESTMENT.

7 ‘‘Nothing in this Act shall be construed as precluding

8 COMSAT from investing in or owning satellites or other

9 facilities independent from INTELSAT, or from providing

10 services through reselling capacity over the facilities of

11 satellite systems independent from INTELSAT. This sec12 tion shall not be construed as restricting the types of con13 tracts which can be executed or services which may be pro14 vided by COMSAT over the independent satellites or facili15 ties described in this subsection.

16 ‘‘SUBTITLE D—GENERAL PROVISIONS

17 ‘‘SEC. 631. PROMOTION OF EFFICIENT USE OF ORBITAL

18 SLOTS AND SPECTRUM.

19 ‘‘All satellite system operators authorized to access

20 the United States market shall make efficient and timely

21 use of orbital and spectrum resources in order to ensure

22 that these resources are not warehoused to the detriment

23 of other new or existing satellite system operators. Where

24 these assurances cannot be provided, satellite system oper25 ators shall relinquish their rights to these resources.
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1 ‘‘SEC. 632. PROHIBITION ON PROCUREMENT PREF2 ERENCES.

3 ‘‘Nothing in this title or the Communications Act of

4 1934 (47 U.S.C. 151 et. seq.) shall be construed to au5 thorize or require any preference in Federal Government

6 procurement of telecommunications services, for the sat7 ellite space segment provided by INTELSAT, nor shall

8 anything in this title or the Communications Act of 1934

9 be construed to result in a bias against the use of

10 INTELSAT through existing or future contract awards.

11 ‘‘SEC. 633. SATELLITE AUCTIONS.

12 ‘‘Notwithstanding any other provision of law, the

13 Commission shall not assign by competitive bidding orbital

14 locations or spectrum used for the provision of inter15 national or global satellite communications services. The

16 President shall oppose in the International Telecommuni17 cations Union and in other bilateral and multilateral fora

18 any assignment by competitive bidding of orbital locations

19 or spectrum used for the provision of such services.

20 ‘‘SEC. 634. RELATIONSHIPS TO OTHER LAWS.

21 ‘‘Whenever the application of the provisions of this

22 Act is inconsistent with the provisions of the Communica23 tions Act of 1934, the provisions of this Act shall govern.

24 ‘‘SUBTITLE E—DEFINITIONS

25 ‘‘SEC. 641. DEFINITIONS.

26 ‘‘(a) IN GENERAL.—In this title:
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1 ‘‘(1) INTELSAT.—The term ‘INTELSAT’

2 means the International Telecommunications Sat3 ellite Organization established pursuant to the

4 Agreement Relating to the International Tele5 communications Satellite Organization

6 (INTELSAT).

7 ‘‘(2) COMSAT.—The term ‘COMSAT’ means

8 the corporation established pursuant to title III of

9 this Act.

10 ‘‘(3) SIGNATORY.—The term ‘signatory’ means

11 a Party, or the telecommunications entity designed

12 by a Party, that has signed the Operating Agree13 ment and for which such Agreement has entered

14 into force or to which such Agreement has been pro15 visionally applied.

16 ‘‘(4) PARTY.—The term ‘Party’ means, in the

17 case of INTELSAT, a nation for which the

18 INTELSAT agreement has entered into force or

19 been provisionally applied.

20 ‘‘(5) COMMISSION.—The term ‘Commission’

21 means the Federal Communications Commission.

22 ‘‘(6) INTERNATIONAL TELECOMMUNICATION

23 UNION.—The term ‘International Telecommuni24 cation Union’ (ITU) means the intergovernmental

25 organization that is a specialized agency of the
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1 United Nations in which member countries cooper2 ate for the development of telecommunications, in3 cluding adoption of international regulations gov4 erning terrestrial and space uses of the frequency

5 spectrum as well as use of the geostationary orbital

6 arc.

7 ‘‘(7) PRIVATIZED INTELSAT.—The term

8 ‘privatized INTELSAT’ means any entity created

9 from the privatization of INTELSAT from the as10 sets of INTELSAT.

11 ‘‘(8) ORBITAL LOCATION.—The term ‘orbital lo12 cation’ means the location for placement of a sat13 ellite in geostationary orbits as defined in the Inter14 national Telecommunication Union Radio Regula15 tions.

16 ‘‘(9) SPACE SEGMENT.—The term ‘space seg17 ment’ means the satellites, and the tracking, telem18 etry, command, control, monitoring and related fa19 cilities and equipment used to support the operation

20 of satellites owned or leased by INTELSAT.

21 ‘‘(10) INTELSAT AGREEMENT.—The term

22 ‘INTELSAT agreement’ means the agreement relat23 ing to the International Telecommunications Sat24 ellite Organization (‘INTELSAT’), including all of

25 its annexes (TIAS 7532, 23 UST 3813).
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1 ‘‘(11) OPERATING AGREEMENT.—The term ‘op2 erating agreement’ means, in the case of

3 INTELSAT, the agreement, including its annex but

4 excluding all titles of articles, opened for signature

5 at Washington on August 20, 1971, by Governments

6 or telecommunications entities designated by Gov7 ernments in accordance with the provisions of The

8 Agreement.

9 ‘‘(12) HEADQUARTERS AGREEMENT.—The term

10 ‘headquarters agreement’ means the binding inter11 national agreement, dated November 24, 1976, be12 tween the United States and INTELSAT covering

13 privileges, exemptions, and immunities with respect

14 to the location of INTELSAT’s headquarters in

15 Washington, D.C.

16 ‘‘(13) DIRECT-TO-HOME SATELLITE SERV17 ICES.—The term ‘direct-to-home satellite services’

18 means the distribution or broadcasting of program19 ming or services by satellite directly to the sub20 scriber’s premises without the use of ground receiv21 ing or distribution equipment, except at the sub22 scriber’s premises or in the uplink process to the

23 satellite.

24 ‘‘(14) SATELLITE DIGITAL AUDIO RADIO SERV25 ICE.—The term ‘satellite digital audio radio service’
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1 means a radio communication service in which audio

2 programming is digitally transmitted by one or more

3 space stations directly to fixed, mobile, or portable

4 earth stations, and which may involve complemen5 tary repeating terrestrial transmitters, telemetry,

6 tracking and control facilities.

7 ‘‘(15) DIRECT BROADCAST SATELLITE SERV8 ICE.—The term ‘direct broadcast satellite service’

9 means a radio communication service in which sig10 nals transmitted or retransmitted by space stations

11 are intended for direct reception by the general pub12 lic. In the Direct Broadcast Satellite Service the

13 term ‘direct reception’ shall encompass both indi14 vidual reception and community reception.

15 ‘‘(16) EXISTING AUTHORIZED SERVICES.—All

16 services authorized to be provided by COMSAT via

17 the INTELSAT system as of January 1, 1999.

18 ‘‘(17) IGO.—The term ‘IGO’ means the Inter19 governmental Satellite organizations, INTELSAT,

20 and INMARSAT.

21 ‘‘(18) IGO AFFILIATE.—The term ‘IGO affil22 iate’ means any entity in which an IGO owns an eq23 uity interest of 10 percent or more.

24 ‘‘(b) COMMON TERMS.—Except as otherwise provided

25 in subsection (a), terms used in this title that are defined
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1 in section 3 of the Communications Act of 1934 (47

2 U.S.C. 153) have the meaning provided in such section.’’.

3 SEC. 5. REPEAL OF OWNERSHIP AND STRUCTURAL PROVI4 SIONS.

5 Effective as of the date of the enactment of this Act,

6 the following provisions of the Communications Satellite

7 Act of 1962 (47 U.S.C. 701 et seq.) shall cease to be effec8 tive:

9 (1) Subsections (a) and (b) of section 201.

10 (2) Paragraphs (1) through (10) of section 201

11 (c).

12 (3) Sections 302, 303, and 304.

13 (4) Section 305 (c).

14 (5) Section 402.

15 (6) Section 403 (a).

16 (7) Section 404.

17 SEC. 6. INTERNATIONAL MARITIME SATELLITE TELE18 COMMUNICATIONS ACT AMENDMENTS.

19 (a) CONTINUING PROVISION OF GLOBAL SATELLITE

20 SAFETY SERVICES AFTER PRIVATIZATION OF BUSINESS

21 OPERATIONS OF INTERNATIONAL MOBILE SATELLITE

22 ORGANIZATION.—

23 (1) AUTHORITY.—The International Maritime

24 Satellite Telecommunications Act (47 U.S.C. 751 et

25 seq.) is amended by adding at the end the following:
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1 ‘‘SEC. 506. GLOBAL SATELLITE SAFETY SERVICES AFTER

2 PRIVATIZATION OF BUSINESS OPERATIONS

3 OF INMARSAT.

4 ‘‘In order to ensure the continued provision of global

5 maritime distress and safety satellite telecommunications

6 services after privatization of the business operations of

7 INMARSAT, the President may maintain on behalf of the

8 United States membership in the International Mobile

9 Satellite Organization.’’.

10 (b) REPEAL OF SUPERSEDED AUTHORITY.—

11 (1) REPEAL.—That Act is further amended by

12 striking sections 502, 503, 504, and 505 (47 U.S.C.

13 751, 752, 753, and 757).

14 (2) EFFECTIVE DATE.—The amendments made

15 by paragraph (1) shall take effect on the date on

16 which the International Mobile Satellite Organiza17 tion ceases to operate directly a global mobile sat18 ellite system.

19 SECTION 1. SHORT TITLE.

20 This Act may be cited as the ‘‘Open-market Reorga21 nization for the Betterment of International Telecommuni22 cations Act’’.

23 SEC. 2. PURPOSE.

24 It is the purpose of this Act to promote a fully competi25 tive domestic and international market for satellite commu26 nications services for the benefit of consumers and providers
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1 of satellite services by fully encouraging the privatization

2 of the intergovernmental satellite organizations,

3 INTELSAT and Inmarsat, and reforming the regulatory

4 framework of the COMSAT Corporation.

5 SEC. 3. FINDINGS.

6 The Congress finds that:

7 (1) International satellite communications serv8 ices constitute a critical component of global voice,

9 video and data services, play a vital role in the inte10 gration of all nations into the global economy and

11 contribute toward the ability of developing countries

12 to achieve sustainable development.

13 (2) The United States played a pivotal role in

14 stimulating the development of international satellite

15 communications services by enactment of the Commu16 nications Satellite Act of 1962 (47 U.S.C. 701–744),

17 and by its critical contributions, through its signa18 tory, the COMSAT Corporation, in the establishment

19 of INTELSAT, which has successfully established

20 global satellite networks to provide member countries

21 with worldwide access to telecommunications services,

22 including critical lifeline services to the developing

23 world.

24 (3) The United States played a pivotal role in

25 stimulating the development of international satellite
26

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1 communications services by enactment of the Inter2 national Maritime Satellite Telecommunications Act

3 (47 U.S.C. 751–757), and by its critical contribu4 tions, through its signatory, COMSAT, in the estab5 lishment of Inmarsat, which enabled member coun6 tries to provide mobile satellite services such as inter7 national maritime and global maritime distress and

8 safety services to include other satellite services, such

9 as land mobile and aeronautical communications

10 services.

11 (4) By statute, COMSAT, a publicly traded cor12 poration, is the sole United States signatory to

13 INTELSAT and, as such, is responsible for carrying

14 out United States commitments under the

15 INTELSAT Agreement and the INTELSAT Oper16 ating Agreement. Pursuant to a binding Head17 quarters Agreement, the United States, as a party to

18 INTELSAT, has satisfied many of its obligations

19 under the INTELSAT Agreement.

20 (5) In the 37 years since enactment of the Com21 munications Satellite Act of 1962, satellite technology

22 has advanced dramatically, large-scale financing op23 tions have improved immensely and international

24 telecommunications policies have shifted from those of

25 natural monopolies to those based on market forces,
27

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1 resulting in multiple private commercial companies

2 around the world providing, or preparing to provide,

3 the domestic, regional, and global satellite tele4 communications services that only INTELSAT and

5 Inmarsat had previously had the capabilities to offer.

6 (6) Private commercial satellite communications

7 systems now offer the latest telecommunications serv8 ices to more and more countries of the world with de9 clining costs, making satellite communications an at10 tractive complement as well as alternative to terres11 trial communications systems, particularly in lesser

12 developed countries.

13 (7) To enable consumers to realize optimum ben14 efits from international satellite communications

15 services, and to enable these systems to be competitive

16 with other international telecommunication systems,

17 such as fiber optic cable, the global trade and regu18 latory environment must support vigorous and robust

19 competition.

20 (8) In particular, all satellite systems should

21 have unimpeded access to the markets that they are

22 capable of serving, and the ability to compete in a

23 fair and meaningful way within those markets.

24 (9) Transforming INTELSAT and Inmarsat

25 from intergovernmental organizations into conven-
28

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1 tional satellite services companies is a key element in

2 bringing about the emergence of a fully competitive

3 global environment for satellite services.

4 (10) The issue of privatization of any state5 owned firm is extremely complex and multifaceted.

6 For that reason, the sale of a firm at arm’s length

7 does not automatically, and in all cases, extinguish

8 any prior subsidies or government conferred advan9 tages.

10 (11) It is in the interest of the United States to

11 negotiate the removal of its reservation in the Fourth

12 Protocol to the General Agreement on Trade in Serv13 ices regarding INTELSAT’s and Inmarsat’s access to

14 the United States market through COMSAT as soon

15 as possible, but such reservation cannot be removed

16 without adequate assurance that the United States

17 market for satellite services will not be disrupted by

18 such INTELSAT or Inmarsat access.

19 (12) The Communications Satellite Act of 1962,

20 and other applicable United States laws, need to be

21 updated to encourage and complete the pro-competi22 tive privatization of INTELSAT and Inmarsat, to

23 update the domestic United States regulatory regime

24 governing COMSAT, and to ensure a competitively

25 neutral United States framework for the provision of
29

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1 domestic and international telecommunications serv2 ices via satellite systems.

3 SEC. 4. ESTABLISHMENT OF SATELLITE SERVICES COM4 PETITION; PRIVATIZATION.

5 The Communications Satellite Act of 1962 (47 U.S.C.

6 701) is amended by adding at the end the following:

7 ‘‘TITLE VI—SATELLITE SERVICES

8 COMPETITION AND PRIVAT9 IZATION

10 ‘‘SUBTITLE A—TRANSITION TO A PRIVATIZED INTELSAT

11 ‘‘SEC. 601. POLICY OF THE UNITED STATES.

12 ‘‘It is the policy of the United States to—

13 ‘‘(1) encourage INTELSAT to privatize in a

14 pro-competitive manner as soon as possible, but not

15 later than January 1, 2002, recognizing the need for

16 a reasonable transition and process to achieve a full,

17 pro-competitive restructuring; and

18 ‘‘(2) work constructively with its international

19 partners in INTELSAT, and with INTELSAT itself,

20 to bring about a prompt restructuring that will en21 sure fair competition, both in the United States as

22 well as in the global markets served by the

23 INTELSAT system; and
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1 ‘‘(3) encourage Inmarsat’s full implementation of

2 the terms and conditions of its privatization agree3 ment.

4 ‘‘SEC. 602. ROLE OF COMSAT.

5 ‘‘(a) ADVOCACY.—As the United States signatory to

6 INTELSAT, COMSAT shall act as an aggressive advocate

7 of pro-competitive privatization of INTELSAT. With re8 spect to the consideration within INTELSAT of any matter

9 related to its privatization, COMSAT shall fully consult

10 with the United States government prior to exercising its

11 voting rights and shall exercise its voting rights in a man12 ner fully consistent with any instructions issued. In the

13 event that the U.S. signatory to INTELSAT is acquired

14 after enactment of this section, the President and the Com15 mission shall assure that the instructional process safe16 guards against conflicts of interest.

17 ‘‘(b) ANNUAL REPORTS.—The President and the Com18 mission shall report annually to the Committee on Com19 merce of the House of Representatives and the Committee

20 on Commerce, Science, and Transportation of the Senate,

21 respectively, on the progress being made by INTELSAT and

22 Inmarsat to privatize and complete privatization in a pro23 competitive manner.
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1 ‘‘SEC. 603. RESTRICTIONS PENDING PRIVATIZATION.

2 ‘‘INTELSAT is prohibited from entering the United

3 States market directly to provide any satellite communica4 tions services or space segment capacity to carriers (other

5 than the United States signatory, COMSAT) or end users

6 in the United States prior to achieving a pro-competitive

7 privatization pursuant to section 613(a).

8 ‘‘SUBTITLE B—ACTIONS TO ENSURE PRO-COMPETITIVE

9 SATELLITE SERVICES

10 ‘‘SEC. 611. PRIVATIZATION.

11 ‘‘(a) IN GENERAL.—The President shall seek a pro12 competitive privatization of INTELSAT as soon as prac13 ticable, but no later than January 1, 2002. Such privatiza14 tion shall be confirmed by a final decision of the

15 INTELSAT Assembly of Parties and shall be followed by

16 a timely initial public offering taking into account relative

17 market conditions.

18 ‘‘(b) ENSURE CONTINUATION OF PRIVATIZATION.—The

19 President and the Commission shall seek to ensure that the

20 privatization of Inmarsat continues in a pro-competitive

21 manner.

22 ‘‘SEC. 612. PROVISION OF SERVICES IN THE UNITED STATES

23 BY PRIVATIZED AFFILIATES OF INTERGOV24 ERNMENTAL SATELLITE ORGANIZATIONS.

25 ‘‘(a) IN GENERAL.—With respect to any application

26 for a satellite earth station or space station under title III
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1 of the Communications Act of 1934 (47 U.S.C 301 et seq.)

2 or any application under section 214 of that Act (47 U.S.C.

3 214) , or any letter of intent to provide service in the United

4 States via non-United States licensed space segment, sub5 mitted by a privatized IGO affiliate or successor, the

6 Commission—

7 ‘‘(1) shall apply a presumption in favor of entry

8 to an IGO affiliate or successor licensed by a WTO

9 Member for services covered by United States commit10 ments under the WTO Basic Telecom Agreement;

11 ‘‘(2) may attach conditions to any grant of au12 thority to an IGO affiliate or successor that raises the

13 potential for competitive harm; or

14 ‘‘(3) shall in the exceptional case in which an

15 application by an IGO affiliate or successor would

16 pose a very high risk to competition in the United

17 States satellite market, deny the application.

18 ‘‘(b) DETERMINATION FACTORS.—In determining

19 whether an application to serve the United States market

20 by an IGO affiliate raises the potential for competitive

21 harm or risk under (a)(2), the Commission shall consider

22 any potential anti-competitive or market distorting con23 sequences of continued relationships or connections between

24 an IGO and its affiliates including—
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1 ‘‘(1) whether the IGO affiliate is structured to

2 prevent anti-competitive practices such as collusive

3 behavior or cross-subsidization;

4 ‘‘(2) the degree of affiliation between the IGO

5 and its affiliate;

6 ‘‘(3) whether the IGO affiliate can directly or in7 directly benefit from IGO privileges and immunities;

8 ‘‘(4) the ownership structure of the affiliate and

9 the effect of IGO and other Signatory ownership;

10 ‘‘(5) the existence of clearly defined arm’s-length

11 conditions governing the affiliate-IGO relationship

12 including separate officers, directors, employees, and

13 accounting systems;

14 ‘‘(6) the existence of fair market valuing for per15 missible business transactions between an IGO and

16 its affiliate that is verifiable by an independent audit

17 and consistent with normal commercial practice and

18 generally accepted accounting principles;

19 ‘‘(7) the existence of common marketing;

20 ‘‘(8) the availability of recourse to IGO assets for

21 credit or capital;

22 ‘‘(9) whether an IGO registers or coordinates

23 spectrum or orbital locations on behalf of its affiliate;

24 and
34

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1 ‘‘(10) whether the IGO affiliate has corporate

2 charter provisions prohibiting reaffiliation with the

3 IGO after privatization.

4 ‘‘(c) SUNSET.—The provisions of subsection (b) shall

5 cease to have effect upon approval of the application pursu6 ant to section 613.

7 ‘‘(d) PUBLIC INTEREST DETERMINATION.—Nothing in

8 this Act affects the Commission’s ability to make a public

9 interest determination concerning any application per10 taining to entry into the United States market.

11 ‘‘SEC. 613. PRESIDENTIAL NEGOTIATING OBJECTIVES AND

12 FCC CRITERIA FOR PRIVATIZED IGOs.

13 ‘‘(a) IN GENERAL.—Upon a final decision of the

14 INTELSAT Assembly of Parties creating the legal structure

15 and characteristics of the privatized INTELSAT and recog16 nizing that Inmarsat transitioned into a private company

17 on April 15, 1999, the President shall within 30 days report

18 to the Congress on the extent to which such privatization

19 framework meets each of the criteria in subsection (c), and

20 whether taking into consideration all other relevant com21 petitive factors, entry of a privatized INTELSAT or

22 Inmarsat into the United States market will not be likely

23 to distort competition.

24 ‘‘(b) PURPOSE OF PRIVATIZATION CRITERIA.—The cri25 teria provided in subsection (c) shall be used as—
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•S 376 RS

1 ‘‘(1) the negotiation objectives for achieving the

2 privatization of INTELSAT no later than January 1,

3 2002, and also for Inmarsat;

4 ‘‘(2) the standard for measuring, pursuant to

5 subsection (a), whether negotiations have resulted in

6 an acceptable framework for achieving the pro-com7 petitive privatization of INTELSAT and Inmarsat;

8 and

9 ‘‘(3) licensing criteria by the Commission in

10 making its independent determination of whether the

11 certified framework for achieving the pro-competitive

12 privatization of INTELSAT and Inmarsat has been

13 properly implemented by the privatized INTELSAT

14 and Inmarsat.

15 ‘‘(c) PRIVATIZATION CRITERIA.—A pro-competitively

16 privatized INTELSAT or Inmarsat—

17 ‘‘(1) has no privileges or immunities limiting

18 legal accountability, commercial transparency, or tax19 ation;

20 ‘‘(2) has submitted to the jurisdiction of competi21 tion and independent regulatory authorities of a na22 tion that is a signatory to the World Trade Organiza23 tion Agreement on Basic Telecommunications and

24 that has implemented or accepted the agreement’s ref25 erence paper on regulatory principles;
36

•S 376 RS

1 ‘‘(3) can offer assurance of an arm’s-length rela2 tionship in all respects between itself and any IGO

3 affiliate;

4 ‘‘(4) has given due consideration to the inter5 national connectivity requirements of thin route coun6 tries;

7 ‘‘(5) can demonstrate that the valuation of assets

8 to be transferred post-privatization is in accordance

9 with generally accepted accounting principles;

10 ‘‘(6) has access to orbital locations and associ11 ated spectrum post-privatization in accordance with

12 the same regulatory processes and fees applicable to

13 other commercial satellite systems;

14 ‘‘(7) conducts technical coordinations post-pri15 vatization under normal, established ITU procedures;

16 ‘‘(8) has an ownership structure in the form of

17 a stock corporation or other similar and accepted

18 commercial mechanism, and a commitment to a time19 ly initial public offering has been established for the

20 sale or purchase of company shares;

21 ‘‘(9) shall not acquire, or enjoy any agreements

22 or arrangements which secure, exclusive access to any

23 national telecommunications market; and

24 ‘‘(10) will have accomplished a privatization

25 consistent with the criteria listed in this subsection at
37

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1 the earliest possible date, but not later than January

2 1, 2002, for INTELSAT and Inmarsat.

3 ‘‘(d) FCC INDEPENDENT DETERMINATION ON IMPLE4 MENTATION.—After the President has made a report to Con5 gress pursuant to subsection (a), with respect to any appli6 cation for a satellite earth station or space station under

7 title III of the Communications Act of 1934 (47 U.S.C. 301)

8 or any application under section 214 of the Communica9 tions Act of 1934 (47 U.S.C. 214), or any letter of intent

10 to provide service in the United States via a non-United

11 States licensed space segment, submitted by a privatized af12 filiate prior to the privatized IGO, or by a privatized IGO,

13 the Commission shall consider whether the enumerated ob14 jectives for a pro-competitive privatization of INTELSAT

15 under this section have been implemented with respect to

16 the privatized IGO, but in making that consideration, may

17 neither contract or expand the privatization criteria in sub18 section (c).

19 ‘‘(e) AUTHORITY TO DENY AN APPLICATION.—Nothing

20 in this section affects the Commission’s authority to condi21 tion or deny an application on the basis of the public inter22 est.
38

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1 ‘‘SEC. 614. FAILURE TO PRIVATIZE IN A TIMELY MANNER.

2 ‘‘(a) REPORT.—In the event that INTELSAT fails to

3 fully privatize as provided in section 611 by January 1,

4 2002, the President shall—

5 ‘‘(1) instruct all instrumentalities of the United

6 States Government to grant a preference for procure7 ment of satellite services from commercial private sec8 tor providers of satellite space segment rather than

9 IGO providers;

10 ‘‘(2) immediately commence deliberations to de11 termine what additional measures should be imple12 mented to ensure the rapid privatization of

13 INTELSAT;

14 ‘‘(3) no later than March 31, 2002, issue a re15 port delineating such other measures to the Committee

16 on Commerce of the House of Representatives, and

17 Committee on Commerce, Science, and Transpor18 tation of the Senate; and

19 ‘‘(4) withdraw as a party from INTELSAT.

20 ‘‘(b) RESERVATION CLAUSE.—The President may de21 termine, after consulting with Congress, that in consider22 ation of privatization being imminent, it is in the national

23 interest of the United States to provide a reasonable exten24 sion of time for completion of privatization.
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1 ‘‘SUBTITLE C—COMSAT GOVERNANCE AND OPERATION

2 ‘‘SEC. 621. ELIMINATION OF PRIVILEGES AND IMMUNITIES.

3 ‘‘(a) COMSAT.—COMSAT shall not have any privi4 lege or immunity on the basis of its status as a signatory

5 or a representative of the United States to INTELSAT and

6 Inmarsat, except that COMSAT retains its privileges and

7 immunities—

8 ‘‘(1) for those actions taken in its role as the

9 United States signatory to INTELSAT or Inmarsat

10 upon instruction of the United States Government;

11 and

12 ‘‘(2) for actions taken when acting as the United

13 States signatory in fulfilling signatory obligations

14 under the INTELSAT Operating Agreement.

15 ‘‘(b) NO JOINT OR SEVERAL LIABILITY.—If COMSAT

16 is found liable for any action taken in its status as a signa17 tory or a representative of the party to INTELSAT, any

18 such liability shall be limited to the portion of the judgment

19 that corresponds to COMSAT’s percentage of the responsi20 bility, as determined by the trier of fact.

21 ‘‘(c) PROSPECTIVE EFFECT OF ELIMINATION.—The

22 elimination of privileges and immunities contained in this

23 section shall apply only to actions or decisions taken by

24 COMSAT after the date of enactment of the Open-market
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1 Reorganization for the Betterment of International Tele2 communications Act.

3 ‘‘SEC 622. ABROGATION OF CONTRACTS PROHIBITED.

4 ‘‘Nothing in this Act or the Communications Act of

5 1934 (47 U.S.C. 151 et seq.) shall be construed to modify

6 or invalidate any contract or agreement involving COM7 SAT, INTELSAT, or any terms or conditions of such agree8 ment in force on the date of enactment of the Open-market

9 Reorganization for the Betterment of International Tele10 communications Act, or to give the Commission authority,

11 by rule-making or any other means, to invalidate any such

12 contract or agreement, or any terms and conditions of such

13 contract or agreement.

14 ‘‘SEC. 623. PERMITTED COMSAT INVESTMENT.

15 ‘‘Nothing in this Act shall be construed as precluding

16 COMSAT from investing in or owning satellites or other

17 facilities independent from INTELSAT, or from providing

18 services through reselling capacity over the facilities of sat19 ellite systems independent from INTELSAT. This section

20 shall not be construed as restricting the types of contracts

21 which can be executed or services which may be provided

22 by COMSAT over the independent satellites or facilities de23 scribed in this subsection.
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1 ‘‘SUBTITLE D—GENERAL PROVISIONS

2 ‘‘SEC. 631. PROMOTION OF EFFICIENT USE OF ORBITAL

3 SLOTS AND SPECTRUM.

4 ‘‘All satellite system operators authorized to access the

5 United States market should make efficient and timely use

6 of orbital and spectrum resources in order to ensure that

7 these resources are not warehoused to the detriment of other

8 new or existing satellite system operators. Where these as9 surances cannot be provided, satellite system operators shall

10 arbitrate their rights to these resources according to ITU

11 procedures.

12 ‘‘SEC. 632. PROHIBITION ON PROCUREMENT PREFERENCES.

13 ‘‘Except pursuant to section 615 of this Act, nothing

14 in this title or the Communications Act of 1934 (47 U.S.C.

15 151 et seq.) shall be construed to authorize or require any

16 preference in Federal Government procurement of tele17 communications services, for the satellite space segment pro18 vided by INTELSAT or Inmarsat, nor shall anything in

19 this title or that Act be construed to result in a bias against

20 the use of INTELSAT or Inmarsat through existing or fu21 ture contract awards.

22 ‘‘SEC. 633. SATELLITE AUCTIONS.

23 ‘‘Notwithstanding any other provision of law, the

24 Commission shall not assign by competitive bidding orbital

25 locations or spectrum used for the provision of international
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1 or global satellite communications services. The President

2 shall oppose in the International Telecommunications

3 Union and in other bilateral and multilateral negotiations

4 any assignment by competitive bidding of orbital locations,

5 licenses, or spectrum used for the provision of such services.

6 ‘‘SEC. 634. RELATIONSHIP TO OTHER LAWS.

7 ‘‘Whenever the application of the provisions of this Act

8 is inconsistent with the provisions of the Communications

9 Act of 1934, the provisions of this Act shall govern.

10 ‘‘SEC. 635. EXCLUSIVITY ARRANGEMENTS.

11 ‘‘(a) IN GENERAL.—No satellite operator shall acquire

12 or enjoy the exclusive right of handling traffic to or from

13 the United States, its territories or possessions, and any

14 other country or territory by reason of any concession, con15 tract, understanding, or working arrangement to which the

16 satellite operator or any persons or companies controlling

17 or controlled by the operator are parties.

18 ‘‘(b) EXCEPTION.—In enforcing the provisions of this

19 subsection, the Commission20 ‘‘(1) shall not require the termination of existing

21 satellite telecommunications services under contract

22 with, or tariff commitment to, such satellite operator;

23 but

24 ‘‘(2) may require the termination of new services

25 only to the country that has provided the exclusive
43

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1 right to handle traffic, if the Commission determines

2 the public interest, convenience, and necessity so re3 quires.

4 ‘‘SUBTITLE E—DEFINITIONS

5 ‘‘SEC. 641. DEFINITIONS.

6 ‘‘(a) IN GENERAL.—In this title:

7 ‘‘(1) INTELSAT.—The term ‘INTELSAT’

8 means the International Telecommunications Satellite

9 Organization established pursuant to the Agreement

10 Relating to the International Telecommunications

11 Satellite Organization.

12 ‘‘(2) INMARSAT.—The term ‘Inmarsat’ means

13 the International Mobile Satellite Organization estab14 lished pursuant to the Convention on the Inter15 national Maritime Satellite Organization and may

16 also refer to INMARSAT Limited when appropriate.

17 ‘‘(3) COMSAT.—The term ‘COMSAT’ means the

18 corporation established pursuant to title III of this

19 Act and its successors and assigns.

20 ‘‘(4) SIGNATORY.—The term ‘signatory’ means

21 the telecommunications entity designated by a party

22 that has signed the Operating Agreement and for

23 which such Agreement has entered into force.

24 ‘‘(5) PARTY.—The term ‘party’ means, in the

25 case of INTELSAT, a nation for which the
44

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1 INTELSAT agreement has entered into force or been

2 provisionally applied, and in the case of INMARSAT,

3 a nation for which the Inmarsat convention entered

4 into force.

5 ‘‘(6) COMMISSION.—The term ‘Commission’

6 means the Federal Communications Commission.

7 ‘‘(7) INTERNATIONAL TELECOMMUNICATION

8 UNION; ITU.—The terms ‘International Telecommuni9 cation Union’ and ‘ITU’ mean the intergovernmental

10 organization that is a specialized agency of the

11 United Nations in which member countries cooperate

12 for the development of telecommunications, including

13 adoption of international regulations governing ter14 restrial and space uses of the frequency spectrum as

15 well as use of the geostationary orbital arc.

16 ‘‘(8) PRIVATIZED INTELSAT.—The term

17 ‘privatized INTELSAT’ means any entity created

18 from the privatization of INTELSAT from the assets

19 of INTELSAT.

20 ‘‘(9) PRIVATIZED INMARSAT.—The term

21 ‘privatized Inmarsat’ means any entity created from

22 the privatization of Inmarsat from the assets of

23 Inmarsat, namely INMARSAT, Ltd.

24 ‘‘(10) ORBITAL LOCATION.—The term ‘orbital lo25 cation’ means the location for placement of a satellite
45

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1 in geostationary orbits as defined in the International

2 Telecommunication Union Radio Regulations.

3 ‘‘(11) SPECTRUM.—The term ‘spectrum’ means

4 the range of frequencies used to provide radio commu5 nication services.

6 ‘‘(12) SPACE SEGMENT.—The term ‘space seg7 ment’ means the satellites, and the tracking, telem8 etry, command, control, monitoring and related fa9 cilities and equipment used to support the operation

10 of satellites owned or leased by INTELSAT and

11 Inmarsat or an IGO successor or affiliate.

12 ‘‘(13) INTELSAT AGREEMENT.—The term

13 ‘INTELSAT agreement’ means the agreement relating

14 to the International Telecommunications Satellite Or15 ganization, including all of its annexes (TIAS 7532,

16 23 UST 3813).

17 ‘‘(14) OPERATING AGREEMENT.—The term ‘oper18 ating agreement’ means—

19 ‘‘(A) in the case of INTELSAT, the agree20 ment, including its annex but excluding all titles

21 of articles, opened for signature at Washington

22 on August 20, 1971, by governments or tele23 communications entities designated by govern24 ments in accordance with the provisions of The

25 Agreement; and
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1 ‘‘(B) in the case of Inmarsat, the Operating

2 Agreement on the International Maritime Sat3 ellite Organization, including its annexes.

4 ‘‘(15) HEADQUARTERS AGREEMENT.—The term

5 ‘headquarters agreement’ means the binding inter6 national agreement, dated November 24, 1976, be7 tween the United States and INTELSAT covering

8 privileges, exemptions, and immunities with respect

9 to the location of INTELSAT’s headquarters in Wash10 ington, D.C.

11 ‘‘(16) DIRECT-TO-HOME SATELLITE SERVICES.—

12 The term ‘direct-to-home satellite services’ means the

13 distribution or broadcasting of programming or serv14 ices by satellite directly to the subscriber’s premises

15 without the use of ground receiving or distribution

16 equipment, except at the subscriber’s premises or in

17 the uplink process to the satellite.

18 ‘‘(17) IGO.—The term ‘IGO’ means the Intergov19 ernmental Satellite organizations, INTELSAT and

20 Inmarsat.

21 ‘‘(18) IGO AFFILIATE.—The term ‘IGO affiliate’

22 means any entity in which an IGO owns or has

23 owned an equity interest of 10 percent or more.
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1 ‘‘(19) IGO SUCCESSOR.—The term ‘IGO Suc2 cessor’ means an entity which holds substantially all

3 the assets of a pre-existing IGO.

4 ‘‘(20) GLOBAL MARITIME DISTRESS AND SAFETY

5 SERVICES.—The term ‘global maritime distress and

6 safety services’ means the automated ship-to-shore dis7 tress alerting system which uses satellite and ad8 vanced terrestrial systems for international distress

9 communications and promoting maritime safety in

10 general, permitting the worldwide alerting of vessels,

11 coordinated search and rescue operations, and dis12 semination of maritime safety information.

13 ‘‘(b) COMMON TERMS.—Except as otherwise provided

14 in subsection (a), terms used in this title that are defined

15 in section 3 of the Communications Act of 1934 (47 U.S.C.

16 153) have the meaning provided in that section.’’.

17 SEC. 5. CONFORMING CHANGES.

18 (a) REPEAL OF FEDERAL COORDINATION AND PLAN19 NING PROVISIONS.—Section 201 of the Communications

20 Satellite Act of 1962 (47 U.S.C. 721) is amended to read

21 as follows:

22 ‘‘SEC. 201. IMPLEMENTATION OF POLICY.

23 ‘‘The Federal Communications Commission, in its ad24 ministration of the Communications Act of 1934, shall
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1 make rules and regulations to carry out the provisions of

2 this Act.’’.

3 (b) REPEAL OF GOVERNMENT-ESTABLISHED COR4 PORATION PROVISIONS.—

5 (1) IN GENERAL.—Section 301 of the Commu6 nications Satellite Act of 1962 (47 U.S.C. 731) is

7 amended to read as follows:

8 ‘‘SEC. 301. CORPORATION.

9 ‘‘The corporation organized under the provisions of

10 this title, as this title existed before the enactment of the

11 Open-market Reorganization for the Betterment of Inter12 national Telecommunications Act, known as COMSAT, and

13 its successors and assigns, are subject to the provisions of

14 this Act. The right to repeal, alter, or amend this Act at

15 any time is expressly reserved.’’.

16 (2) CONFORMING CHANGES.—Title III of the

17 Communications Satellite Act of 1962 (47 U.S.C. 731

18 et seq.) is amended—

19 (A) by striking ‘‘CREATION OF A

20 COMMUNICATIONS SATELLITE’’ in

21 the caption of title III;

22 (B) by striking sections 302, 303, and 304;

23 (C) by redesignating section 305 as section

24 302; and
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1 (D) by striking subsection (c) of section 302,

2 as redesignated.

3 (c) REPEAL OF CERTAIN MISCELLANEOUS PROVI4 SIONS.—Title IV of the Communications Satellite Act of

5 1962 (47 U.S.C. 741 et seq.) is amended—

6 (1) by striking section 402;

7 (2) by striking subsection (a) of section 403 and

8 redesignating subsections (b) and (c) as subsections

9 (a) and (b), respectively; and

10 (3) by striking section 404.

11 SEC. 6. INTERNATIONAL MARITIME SATELLITE TELE12 COMMUNICATIONS ACT AMENDMENTS.

13 (a) REPEAL OF SUPERSEDED AUTHORITY.—Title V of

14 the Communications Satellite Act of 1962 (47 U.S.C. 751

15 et seq.) is amended—

16 (1) by striking sections 502, 503, 504, and 505;

17 and

18 (2) by inserting after section 501 the following:

19 ‘‘SEC. 502. GLOBAL SATELLITE SAFETY SERVICES AFTER

20 PRIVATIZATION OF BUSINESS OPERATIONS

21 OF INMARSAT.

22 ‘‘In order to ensure the continued provision of global

23 maritime distress and safety satellite telecommunications

24 services after privatization of the business operations of

25 Inmarsat, the President may maintain membership in the
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1 International Mobile Satellite Organization on behalf of the

2 United States.’’.

3 (b) EFFECTIVE DATE.—The amendments made by sub4 section (a) take effect on the date on which the International

5 Mobile Satellite Organization ceases to operate directly a

6 global mobile satellite system.