I
105TH CONGRESS
1ST SESSION
H. R. 1872
To amend the Communications Satellite Act of 1962 to promote competition
and privatization in satellite communications, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JUNE 12, 1997
Mr. BLILEY (for himself and Mr. MARKEY) introduced the following bill;
which was referred to the Committee on Commerce
A BILL
To amend the Communications Satellite Act of 1962 to pro-
mote competition and privatization in satellite commu-
nications, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Communications Sat-
ellite Competition and Privatization Act of 1997’’.
TITLE I—USE OF FEDERAL COM-
MUNICATIONS 
COMMISSION
LICENSING 
REQUIREMENTS
TO 
SECURE 
COMPETITION
AND PRIVATIZATION
SEC. 101. PURPOSE
It is the purpose of this Act to promote a fully com-
petitive global market for satellite communication services
for the benefit of consumers and providers of satellite serv-
ices and equipment by fully privatizing the intergovern-
mental satellite organizations, INTELSAT and Inmarsat.
SEC. 102. REVISION OF COMMUNICATIONS SATELLITE ACT
OF 1962
(a) ADDITION OF NEW TITLE.—The Communica-
tions Satellite Act of 1962 (47 U.S.C. 101) is amended
by adding at the end the following new title:
‘‘TITLE 
VI—COMMUNICATIONS
COMPETITION AND PRIVAT-
IZATION
‘‘Subtitle A—Actions to Ensure Pro-
Competitive Privatization
‘‘SEC. 601. FEDERAL COMMUNICATIONS COMMISSION LI-
CENSING.
‘‘(a) LICENSING FOR SEPARATED ENTITIES.—
‘‘(1) COMPETITION
TEST.—The Commission
may not issue a license or construction permit to
any separated entity, or renew or permit the assign-
ment or use of any such license or permit, or author-
ize the use by any entity subject to United States ju-
risdiction of any space segment owned or operated
by any separated entity, unless the Commission de-
termines that such issuance, renewal, assignment, or
use will not harm competition in the telecommuni-
cations market of the United States. If the Commis-
sion does not make such a determination, it shall
deny or revoke authority to use space segment
owned or operated by the separated entity to provide
services to, from, or within the United States.
‘‘(2) CRITERIA
FOR
COMPETITION
TEST.—In
making the determination required by paragraph
(1), the Commission shall use the licensing criteria
in sections 621 and 623, and shall not make such
a determination unless the Commission determines
that the privatization of any separated entity is con-
sistent with such criteria.
‘‘(b) LICENSING FOR INTELSAT, INMARSAT, AND
SUCCESSOR ENTITIES.—
‘‘(1) COMPETITION
TEST.—The Commission
shall substantially limit, deny, or revoke the author-
ity for any entity subject to United States jurisdic-
tion to use space segment owned or operated by
INTELSAT or Inmarsat or any successor entities to
provide non-core services to, from, or within the
United States, unless the Commission determines—
‘‘(A) after January 1, 2002, in the case of
INTELSAT and its successor entities, that
INTELSAT and any successor entities have
been privatized in a manner that will not harm
competition in the telecommunications markets
of the United States; or
‘‘(B) after January 1, 2001, in the case of
Inmarsat and its successor entities, that
Inmarsat and any successor entities have been
privatized in a manner that will not harm com-
petition in the telecommunications markets of
the United States.
‘‘(2) CRITERIA
FOR
COMPETITION
TEST.—In
making the determination required by paragraph
(1), the Commission use the licensing criteria in sec-
tions 621, 622, and 624, and shall not make such
a determination unless the Commission determines
that such privatization is consistent with such cri-
teria.
‘‘(c) PREVENTION OF EXPANSION.—Pending privat-
ization in accordance with the licensing criteria in subtitle
B, the Commission shall not—
‘‘(1) issue an authorization, license, or permit
to, or renew the license or permit of, any provider
of services using INTELSAT or Inmarsat space seg-
ment, or authorize the use of such space segment,
for additional services (including additional applica-
tions of existing services) or additional areas of busi-
ness; or
‘‘(2) 
otherwise 
assist 
the 
expansion 
of
INTELSAT or Inmarsat services, including through
authorizing 
COMSAT’s 
investment 
in 
new
INTELSAT or Inmarsat satellites or registering for
orbital slots intended for INTELSAT or Inmarsat
provision of additional services (including additional
applications of existing services) or additional areas
of business.
‘‘SEC. 602. INTELSAT OR INMARSAT ORBITAL SLOTS
‘‘Unless, in a proceeding under section 601(b), the
Commission determines that INTELSAT or Inmarsat
have been privatized in a manner that will not harm com-
petition, then—
‘‘(1) the President shall oppose, and the Com-
mission shall not assist, any registration for new or-
bital slots for INTELSAT or Inmarsat orbital
slots—
‘‘(A) with respect to INTELSAT, after
January 1, 2002, and
‘‘(B) with respect to Inmarsat, after Janu-
ary 1, 2001, and
‘‘(2) the President and Commission shall, con-
sistent with the deadlines in paragraph (1), take all
other necessary measures to preclude procurement,
registration, development, or use of new satellites
which would provide non-core services.
‘‘Subtitle B—Federal Communica-
tions Commission Licensing Cri-
teria: Privatization Criteria
‘‘SEC. 621. GENERAL CRITERIA TO ENSURE A PRO-COM-
PETITIVE PRIVATIZATION OF INTELSAT AND
INMARSAT.
‘‘The President and the Commission shall secure a
pro-competitive privatization of INTELSAT and Inmarsat
that meets the criteria set forth in this section and sec-
tions 622 through 624. In securing such privatizations,
the following criteria shall be applied as licensing criteria
for purposes of subtitle A:
‘‘(1) DATES
FOR
PRIVATIZATION.—Privatiza-
tion shall be obtained in accordance with the criteria
of this title of—
‘‘(A) INTELSAT as soon as practicable,
but no later than January 1, 2002, and
‘‘(B) Inmarsat as soon as practicable, but
no later than January 1, 2001.
‘‘(2) INDEPENDENCE.—The successor entities
and separated entities of INTELSAT and Inmarsat
resulting from the privatization obtained pursuant to
paragraph (1) shall—
‘‘(A) be entities that are national corpora-
tions; and
‘‘(B) have ownership and management that
is independent of—
‘‘(i) any signatories or former signato-
ries that control access to national tele-
communications markets; and
‘‘(ii) any intergovernmental organiza-
tion remaining after the privatization.
‘‘(3) TERMINATION OF PRIVILEGES AND IMMU-
NITIES.—The preferential treatment of INTELSAT
and Inmarsat shall not be extended to any successor
entity or separated entity of INTELSAT or
Inmarsat. Such preferential treatment includes—
‘‘(A) privileged or immune treatment by
national governments;
‘‘(B) privileges or immunities or other
competitive advantages of the type accorded
INTELSAT and Inmarsat and their signatories
though the terms and operation of the
INTELSAT Agreement and the associated
Headquarters Agreement and the Inmarsat
Convention; and
‘‘(C) preferential access to orbital slots.
‘‘(4) PREVENTION
OF
EXPANSION
DURING
TRANSITION.—During the transition period prior to
full privatization, INTELSAT and Inmarsat shall be
precluded from expanding into additional services
(including additional applications of existing serv-
ices) or additional areas of business.
‘‘(5) CONVERSION TO STOCK CORPORATIONS.—
Any successor entity or separated entity created out
of INTELSAT or Inmarsat shall be a national cor-
poration established through the execution of an ini-
tial public offering as follows:
‘‘(A) Any successor entities and separated
entities shall be incorporated as private cor-
porations subject to the laws of the nation in
which incorporated.
‘‘(B) An initial public offering of securities
of any successor entity or separated entity shall
be conducted no later than—
‘‘(i) January 1, 2001, for the succes-
sor entities of INTELSAT; and
‘‘(ii) January 1, 2000, for the succes-
sor entities of Inmarsat.
‘‘(C) The shares of any successor entities
and separated entities shall be listed for trading
on one or more major stock exchanges with
transparent and effective securities regulation.
‘‘(D) A majority of the board of directors
of any successor entity or separated entity shall
not be subject to selection or appointment by,
or otherwise serve as representatives of—
‘‘(i) any signatory or former signatory
that controls access to national tele-
communications markets; or
‘‘(ii) any intergovernmental organiza-
tion remaining after the privatization.
‘‘(E) Any transactions or other relation-
ships between or among any successor entity,
separated entity, INTELSAT, or Inmarsat
shall be conducted on an arm’s length basis.
‘‘(6) REGULATORY TREATMENT.—Any succes-
sor entity or separated entity shall apply through the
appropriate national licensing authorities for inter-
national frequency assignments and associated or-
bital registrations for all satellites.
‘‘(7) COMPETITION POLICIES IN DOMICILIARY
COUNTRY.—Any successor entity or separated entity
shall be incorporated and headquartered in a nation
or nations that—
‘‘(A) have effective laws and regulations
that secure competition in telecommunications
services;
‘‘(B) are signatories of the World Trade
Organization Basic Telecommunications Serv-
ices Agreement; and
‘‘(C) have a schedule of commitments in
such Agreement that includes non-discrimina-
tory market access to their satellite markets.
‘‘(8) RETURN OF UNUSED ORBITAL SLOTS.—
INTELSAT, Inmarsat, and any successor entities
and separated entities shall not be permitted to
warehouse orbital slots that do not have satellites
that are providing commercial services, and any or-
bital slots of INTELSAT or Inmarsat which are not
in use or brought into use providing commercial
services as of May 12, 1997, or thereafter, shall be
returned to the International Telecommunication
Union for reallocation.
‘‘(9) APPRAISAL OF ASSETS.—Before any trans-
fer of assets by INTELSAT or Inmarsat to any suc-
cessor entity or separated entity, such assets shall be
independently audited for purposes of appraisal, at
both book and fair market value.
‘‘SEC. 622. SPECIFIC CRITERIA FOR INTELSAT.
‘‘In securing the privatizations required by section
621, the following additional criteria with respect to
INTELSAT privatization shall be applied as licensing cri-
teria for purposes of subtitle A:
‘‘(1) NUMBER OF COMPETITORS.—The number
of 
competitors 
in 
the 
markets 
served 
by
INTELSAT, including the number of competitors
created out of INTELSAT, shall be sufficient to cre-
ate a fully competitive market.
‘‘(2) PREVENTION
OF
EXPANSION
DURING
TRANSITION.—Pending privatization in accordance
with the criteria in this title, INTELSAT shall not
expand by receiving additional orbital slots, placing
new satellites in existing slots, or procuring new or
additional satellites, except for specified replacement
satellites for which construction contracts have been
executed as of May 12, 1997, and the United States
shall oppose such expansion—
‘‘(A) in INTELSAT, including at the As-
sembly of Parties,
‘‘(B) in the International Telecommuni-
cation Union,
‘‘(C) through United States instructions to
COMSAT,
‘‘(D) in the Commission, through declining
to facilitate the registration of additional orbital
slots or the provision of additional services (in-
cluding additional applications of existing serv-
ices) or additional areas of business; and
‘‘(E) in other appropriate fora.
‘‘(3) TECHNICAL
COORDINATION
AMONG
SIG-
NATORIES.—Technical coordination shall not be used
to impair competition or competitors, and coordina-
tion under Article XIV(d) of the INTELSAT Agree-
ment shall be eliminated.
‘‘SEC. 623. SPECIFIC CRITERIA FOR INTELSAT SEPARATED
ENTITIES.
‘‘In securing the privatizations required by section
621, the following additional criteria with respect to any
INTELSAT separated entity shall be applied as licensing
criteria for purposes of subtitle A:
‘‘(1) DATE
FOR
PUBLIC
OFFERING.—Within
one year after any decision to create any separated
entity, a public offering of the securities of such en-
tity shall be conducted.
‘‘(2) PRIVILEGES AND IMMUNITIES.—The privi-
leges and immunities of INTELSAT and its signato-
ries shall be waived with respect to any transactions
with any separated entity, and any limitations on
private cause of action that would otherwise gen-
erally be permitted against any separated entity
shall be eliminated.
‘‘(3) INTERLOCKING
DIRECTORATES
OR
EM-
PLOYEES.—None of the officers, directors, or em-
ployees of any separated entity shall be individuals
who are officers, directors, or employees of
INTELSAT.
‘‘(4) SPECTRUM ASSIGNMENTS.—After the ini-
tial transfer which may accompany the creation of a
separated entity, the portions of the electromagnetic
spectrum assigned on the date of enactment of this
Act to INTELSAT shall not be transferred between
INTELSAT and any separated entity.
‘‘(5) REAFFILIATION PROHIBITED.—Any merg-
er or ownership or management ties or exclusive ar-
rangements between a privatized INTELSAT or any
successor entity and any separated entity shall be
prohibited until 15 years after the completion of
INTELSAT privatization under this title.
‘‘SEC. 624. SPECIFIC CRITERIA FOR INMARSAT.
‘‘In securing the privatizations required by section
621, the following additional criteria with respect to
Inmarsat privatization shall be applied as licensing criteria
for purposes of subtitle A:
‘‘(1) MULTIPLE SIGNATORIES AND DIRECT AC-
CESS.—Multiple signatories and direct access to
Inmarsat shall be permitted.
‘‘(2) PREVENTION
OF
EXPANSION
DURING
TRANSITION.—Pending privatization in accordance
with the criteria in this title, Inmarsat should not
expand by receiving additional orbital slots, placing
new satellites in existing slots, or procuring new or
additional satellites, except for specified replacement
satellites for which construction contracts have been
executed as of May 12, 1997, and the United States
shall oppose such expansion—
‘‘(A) in Inmarsat, including at the Council
and Assembly of Parties,
‘‘(B) in the International Telecommuni-
cation Union,
‘‘(C) through United States instructions to
COMSAT,
‘‘(D) in the Commission, through declining
to facilitate the registration of additional orbital
slots or providing new services or uses for exist-
ing slots, and
‘‘(E) in other appropriate fora.
‘‘(3) NUMBER OF COMPETITORS.—The number
of competitors in the markets served by Inmarsat,
including the number of competitors created out of
Inmarsat, shall be sufficient to create a fully com-
petitive market.
‘‘(4) REAFFILIATION PROHIBITED.—Any merg-
er or ownership or management ties or exclusive ar-
rangements between Inmarsat or any successor en-
tity or separated entity and ICO shall be prohibited
until 15 years after the completion of Inmarsat pri-
vatization under this title.
‘‘(5) INTERLOCKING
DIRECTORATES
OR
EM-
PLOYEES.—None of the officers, directors, or em-
ployees of Inmarsat or any successor entity or sepa-
rated entity shall be individuals who are officers, di-
rectors, or employees of ICO.
‘‘(6) SPECTRUM ASSIGNMENTS.—The portions
of the electromagnetic spectrum assigned on the
date of enactment of this Act to Inmarsat—
‘‘(A) shall, after January 1, 2006, or the
date on which the life of the current generation
of Inmarsat satellites ends, whichever is later,
be made available for assignment to all systems
(including the privatized Inmarsat) on a non-
discriminatory basis; and
‘‘(B) shall not be transferred between
Inmarsat and ICO.
‘‘Subtitle C—Deregulation and
Other Statutory Changes
‘‘SEC. 641. DIRECT ACCESS; TREATMENT OF COMSAT AS
NONDOMINANT CARRIER.
‘‘The Commission shall take such actions as may be
necessary—
‘‘(1) to permit providers or users of tele-
communications services to obtain direct access to
INTELSAT telecommunications services as soon as
practicable, but no later than January 1, 2001;
‘‘(2) to permit providers or users of tele-
communications services to obtain direct access to
Inmarsat telecommunications services as soon as
practicable, but no later than January 1, 2000; and
‘‘(3) to treat COMSAT as a nondominant car-
rier for the purposes of the Commission’s regula-
tions on the effective date of the actions taken pur-
suant to paragraphs (1) and (2), respectively.
‘‘SEC. 642. SIGNATORY ROLE.
‘‘(a) MULTIPLE SIGNATORIES PERMITTED.—
‘‘(1) INTELSAT.—As soon as practicable, but
no later than January 1, 2001, multiple signatories
shall be permitted to represent the United States in
INTELSAT.
‘‘(2) INMARSAT.—As soon as practicable, but
no later than January 1, 2000, multiple signatories
shall be permitted to represent the United States in
Inmarsat.
‘‘(b) ELIMINATION OF COMSAT PRIVILEGES AND
IMMUNITIES.—Notwithstanding any other law or execu-
tive agreement, COMSAT shall not be entitled to any
privileges or immunities under the laws of the United
States or any State on the basis of its status as a signa-
tory of INTELSAT or Inmarsat.
‘‘(c) PARITY OF TREATMENT.—Notwithstanding any
other law or executive agreement, the Commission shall
have the authority to impose similar regulatory fees on
the United States signatory which it imposes on other en-
tities providing similar services.
‘‘SEC. 643. ELIMINATION OF PROCUREMENT PREFERENCES.
‘‘Nothing in this Act or the Communications Act of
1934 shall be construed to authorize or require any pref-
erence, in Federal Government procurement of tele-
communications services, for the satellite space segment
provided by INTELSAT, Inmarsat, or any successor en-
tity or separated entity.
‘‘SEC. 644. USE OF ITU TECHNICAL COORDINATION.
‘‘The Commission and United States satellite compa-
nies shall utilize the International Telecommunication
Union 
procedures 
for 
technical 
coordination 
with
INTELSAT and its successor entities and separated enti-
ties, rather than INTELSAT procedures.
‘‘SEC. 645. TERMINATION OF COMMUNICATIONS SATELLITE
ACT OF 1962 PROVISIONS.
‘‘Effective on the dates specified, the following provi-
sions of this Act shall cease to be effective:
‘‘(1) Date of enactment of this title: Sections
101 and 102; paragraphs (1), (5) and (6) of section
201(a); section 301; section 303; section 304; sec-
tion 502; and paragraphs (2) and (4) of section
504(a).
‘‘(2) On the effective date of the Commission’s
order that establishes direct access to INTELSAT
space segment: Paragraphs (1), (3) through (5), and
(8) through (10) of section 201(c).
‘‘(3) On the effective date of the Commission’s
order that establishes direct access to Inmarsat
space segment: Subsections (a) through (d) of sec-
tion 503.
‘‘(4) On the effective date of a Commission
order determining under section 601(b)(2) that
Inmarsat privatization is consistent with criteria in
sections 621 and 624: Section 504(b).
‘‘(5) On the effective date of a Commission
order determining under section 601(b)(2) that
INTELSAT privatization is consistent with criteria
in sections 621 and 622: Paragraphs (2) and (4) of
section 201(a); section 201(c)(2); subsection (a) of
section 403; and section 404 .
‘‘SEC. 646. REPORTS TO THE CONGRESS.–
‘‘(a) ANNUAL REPORTS.—The President and the
Commission shall report to the Congress within 90 cal-
endar days of the enactment of this Act, and not less than
annually thereafter, on the progress made to achieve the
objectives and carry out the purposes and provisions of
this Act. Such reports shall be made available immediately
to the public.
‘‘(b) CONTENTS OF REPORTS.—The reports submit-
ted pursuant to subsection (a) shall include the following:
‘‘(7) DIRECT ACCESS.—The term ‘direct access’
means arrangements for purchase of space segment
capacity 
from, 
or 
investment 
in 
(or 
both),
INTELSAT or Inmarsat by means other than
through a signatory.
‘‘(8) SUCCESSOR ENTITY.—The term ‘successor
entity’—
‘‘(A) means any privatized entity created
from the privatization of INTELSAT or
Inmarsat or from the assets of INTELSAT or
Inmarsat, but
‘‘(B) does not include any entity that is a
separated entity.
‘‘(9) SEPARATED
ENTITY.—The term ‘sepa-
rated entity’ means a privatized entity to whom a
portion of the assets owned by INTELSAT or
Inmarsat are transferred prior to full privatization
of INTELSAT or Inmarsat, including in particular
the entity whose structure was under discussion by
INTELSAT as of May 12, 1997, but excluding ICO.
‘‘(10) ORBITAL SLOT.—The term ‘orbital slot’
means the location for placement of a satellite on
the geostationary orbital arc as defined in the Inter-
national Telecommunication Union Radio Regula-
tions.
‘‘(11) SPACE SEGMENT.—The term ‘space seg-
ment’ means the satellites, and the tracking, telem-
etry, command, control, monitoring and related fa-
cilities and equipment used to support the operation
of satellites owned or leased by INTELSAT,
Inmarsat, or a separated entity or successor entity.
‘‘(12) NON-CORE.—The term ‘non-core services’
means, with respect to INTELSAT provision, serv-
ices other than public-switched network voice teleph-
ony and occasional-use television, and with respect
to Inmarsat provision, services other than global
maritime distress and safety services or other exist-
ing maritime or aeronautical services for which there
are not alternative providers.
‘‘(13) ADDITIONAL SERVICES.—The term ‘addi-
tional services’ means Internet services, high-speed
data, non-maritime or non-aeronautical mobile serv-
ices, Direct to Home (DTH) or Direct Broadcast
Satellite (DBS) video services, or Ka-band services.
‘‘(14) INTELSAT 
AGREEMENT.—The term
‘INTELSAT Agreement’ means the Agreement Re-
lating to the International Telecommunications Sat-
ellite Organization (‘INTELSAT’), including all its
annexes (TIAS 7532, 23 UST 3813).
‘‘(15) HEADQUARTERS AGREEMENT.—The term
‘Headquarters Agreement’ means the International
Telecommunication Satellite Organization Head-
quarters 
Agreement 
(November 
24, 
1976)
(TIAS8542, 28 UST 2248).
‘‘(16) OPERATING
AGREEMENT.—The term
‘Operating Agreement’ means—
‘‘(A) in the case of INTELSAT, the agree-
ment, including its annex but excluding all ti-
tles of articles, opened for signature at Wash-
ington on August 20, 1971, by Governments or
telecommunications entities designated by Gov-
ernments in accordance with the provisions of
the Agreement, and
‘‘(B) in the case of Inmarsat, the Operat-
ing Agreement on the International Maritime
Satellite Organization, including its annexes.
‘‘(17) 
INMARSAT
CONVENTION.—The 
term
‘Inmarsat Convention’ means the Convention on the
International 
Maritime 
Satellite 
Organization
(Inmarsat) (TIAS 9605, 31 UST 1).
‘‘(18) NATIONAL
CORPORATION.—The term
‘national corporation’ means a corporation the own-
ership of which is held through publicly traded secu-
rities, and that is incorporated under, and subject
to, the laws of a national, state, or territorial gov-
ernment.
‘‘(19) COMSAT.—The term ‘COMSAT’ means
the corporation established pursuant to title III of
the Communications Satellite Act of 1962 (47
U.S.C. 731 et seq.)
‘‘(20) ICO.—The term ‘ICO’ means the com-
pany known, as of the date of enactment of this Act,
as ICO Global Communications, Inc.
‘‘(b) COMMON TERMINOLOGY.—Except as otherwise
provided in subsection (a), terms used in this Act that are
defined in section 3 of the Communications Act of 1934
have the meanings provided in such section.’’.
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