105TH CONGRESS
2D SESSION
H. R. 1872
AN ACT
To amend the Communications Satellite Act of
1962 to promote competition and privatization in
satellite communications, and for other purposes.
#
105TH CONGRESS
2D SESSION
H. R. 1872
AN ACT
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,
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SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Communications Sat-
ellite Competition and Privatization Act of 1998’’.
SEC. 2. 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. 3. REVISION OF COMMUNICATIONS SATELLITE ACT OF
1962.
The Communications 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
Procompetitive Privatization
‘‘SEC. 
601. 
FEDERAL 
COMMUNICATIONS 
COMMISSION
LICENSING.
‘‘(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-
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ize the use by any entity subject to United States ju-
risdiction of any space segment owned, leased, or op-
erated by any separated entity, unless the Commis-
sion determines that such issuance, renewal, assign-
ment, or use will not harm competition in the tele-
communications market of the United States. If the
Commission does not make such a determination, it
shall deny or revoke authority to use space segment
owned, leased, 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, leased, or operated
by INTELSAT or Inmarsat or any successor enti-
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ties to provide non-core services to, from, or within
the United States, unless the Commission deter-
mines—
‘‘(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 shall use the licensing criteria
in sections 621, 622, and 624, and shall not make
such a determination unless the Commission deter-
mines that such privatization is consistent with such
criteria.
‘‘(3) 
CLARIFICATION: 
COMPETITIVE
SAFE-
GUARDS.—In making its licensing decisions under
this subsection, the Commission shall consider
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whether users of non-core services provided by
INTELSAT or Inmarsat or successor or separated
entities are able to obtain non-core services from
providers offering services other than through
INTELSAT or Inmarsat or successor or separated
entities, at competitive rates, terms, or conditions.
Such consideration shall also include whether such
licensing decisions would require users to replace
equipment at substantial costs prior to the termi-
nation of its design life. In making its licensing deci-
sions, the Commission shall also consider whether
competitive alternatives in individual markets do not
exist because they have been foreclosed due to anti-
competitive actions undertaken by or resulting from
the INTELSAT or Inmarsat systems. Such licensing
decisions shall be made in a manner which facilitates
achieving the purposes and goals in this title and
shall be subject to notice and comment.
‘‘(c) ADDITIONAL CONSIDERATIONS IN DETERMINA-
TIONS.—In making its determinations and licensing deci-
sions under subsections (a) and (b), the Commission shall
take into consideration the United States obligations and
commitments for satellite services under the Fourth Pro-
tocol to the General Agreement on Trade in Services.
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‘‘(d) INDEPENDENT
FACILITIES
COMPETITION.—
Nothing in this section shall be construed as precluding
COMSAT from investing in or owning satellites or other
facilities independent from INTELSAT and Inmarsat,
and successor or separated entities, or from providing
services through reselling capacity over the facilities of
satellite systems independent from INTELSAT and
Inmarsat, and successor or separated entities. This sub-
section shall not be construed as restricting the types of
contracts which can be executed or services which may be
provided by COMSAT over the independent satellites or
facilities described in this subsection.
‘‘SEC. 602. INTELSAT OR INMARSAT ORBITAL LOCATIONS.
‘‘(a) REQUIRED ACTIONS.—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 competition, then—
‘‘(1) the President shall oppose, and the Com-
mission shall not assist, any registration for new or-
bital locations for INTELSAT or Inmarsat—
‘‘(A) with respect to INTELSAT, after
January 1, 2002; and
‘‘(B) with respect to Inmarsat, after Janu-
ary 1, 2001; and
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‘‘(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.
‘‘(b) EXCEPTION.—
‘‘(1) REPLACEMENT
AND
PREVIOUSLY
CON-
TRACTED
SATELLITES.—Subsection (a) shall not
apply to—
‘‘(A) orbital locations for replacement sat-
ellites (as described in section 622(2)(B)); and
‘‘(B) orbital locations for satellites that are
contracted for as of March 25, 1998, if such
satellites do not provide additional services.
‘‘(2) LIMITATION ON EXCEPTION.—Paragraph
(1) is available only with respect to satellites de-
signed to provide services solely in the C and Ku for
INTELSAT, and L for Inmarsat bands.
‘‘SEC. 603. ADDITIONAL SERVICES AUTHORIZED.
‘‘(a) SERVICES AUTHORIZED DURING CONTINUED
PROGRESS.—
‘‘(1) CONTINUED AUTHORIZATION.—The Com-
mission may issue an authorization, license, or per-
mit to, or renew the license or permit of, any pro-
vider of services using INTELSAT or Inmarsat
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space segment, or authorize the use of such space
segment, for additional services (including additional
applications of existing services) or additional areas
of business, subject to the requirements of this sec-
tion.
‘‘(2) ADDITIONAL SERVICES PERMITTED UNDER
NEW CONTRACTS UNLESS PROGRESS FAILS.—If the
Commission makes a finding under subsection (b)
that conditions required by such subsection have not
been attained, the Commission may not, pursuant to
paragraph (1), permit such additional services to be
provided directly or indirectly under new contracts
for the use of INTELSAT or Inmarsat space seg-
ment, unless and until the Commission subsequently
makes a finding under such subsection that such
conditions have been attained.
‘‘(3) PREVENTION OF EVASION.—The Commis-
sion shall, by rule, prescribe means reasonably de-
signed to prevent evasions of the limitations con-
tained in paragraph (2) by customers who did not
use specific additional services as of the date of the
Commission’s most recent finding under subsection
(b) that the conditions of such subsection have not
been obtained.
‘‘(b) REQUIREMENTS FOR ANNUAL FINDINGS.—
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‘‘(1) GENERAL REQUIREMENTS.—The findings
required under this subsection shall be made, after
notice and comment, on or before January 1 of
1999, 2000, 2001, and 2002. The Commission shall
find that the conditions required by this subsection
have been attained only if the Commission finds
that—
‘‘(A) substantial and material progress has
been made during the preceding period at a
rate and manner that is probable to result in
achieving pro-competitive privatizations in ac-
cordance with the requirements of this title;
and
‘‘(B) neither INTELSAT nor Inmarsat are
hindering competitors’ or potential competitors’
access to the satellite services marketplace.
‘‘(2) FIRST FINDING.—In making the finding
required to be made on or before January 1, 1999,
the Commission shall not find that the conditions re-
quired by this subsection have been attained unless
the Commission finds that—
‘‘(A) COMSAT has submitted to the
INTELSAT Board of Governors a resolution
calling for the pro-competitive privatization of
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INTELSAT in accordance with the require-
ments of this title; and
‘‘(B) the United States has submitted such
resolution at the first INTELSAT Assembly of
Parties meeting that takes place after such date
of enactment.
‘‘(3) SECOND FINDING.—In making the finding
required to be made on or before January 1, 2000,
the Commission shall not find that the conditions re-
quired by this subsection have been attained unless
the INTELSAT Assembly of Parties has created a
working party to consider and make recommenda-
tions 
for 
the 
pro-competitive 
privatization 
of
INTELSAT consistent with such resolution.
‘‘(4) THIRD FINDING.—In making the finding
required to be made on or before January 1, 2001,
the Commission shall not find that the conditions re-
quired by this subsection have been attained unless
the INTELSAT Assembly of Parties has approved a
recommendation for the pro-competitive privatization
of INTELSAT in accordance with the requirements
of this title.
‘‘(5) FOURTH FINDING.—In making the finding
required to be made on or before January 1, 2002,
the Commission shall not find that the conditions re-
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quired by this subsection have been attained unless
the pro-competitive privatization of INTELSAT in
accordance with the requirements of this title has
been achieved by such date.
‘‘(6) CRITERIA FOR EVALUATION OF HINDER-
ING ACCESS.—The Commission shall not make a de-
termination under paragraph (1)(B) unless the Com-
mission determines that INTELSAT and Inmarsat
are not in any way impairing, delaying, or denying
access to national markets or orbital locations.
‘‘(c) EXCEPTION FOR SERVICES UNDER EXISTING
CONTRACTS IF PROGRESS NOT MADE.—This section shall
not preclude INTELSAT or Inmarsat or any signatory
thereof from continuing to provide additional services
under an agreement with any third party entered into
prior to any finding under subsection (b) that the condi-
tions of such subsection have not been attained.
‘‘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
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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.
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‘‘(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
through the terms and operation of the
INTELSAT Agreement and the associated
Headquarters Agreement and the Inmarsat
Convention; and
‘‘(C) preferential access to orbital loca-
tions, including any access to orbital locations
that is not subject to the legal or regulatory
processes of a national government that applies
due diligence requirements intended to prevent
the warehousing of orbital locations.
‘‘(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
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(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
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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;
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‘‘(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
LOCA-
TIONS.—INTELSAT, Inmarsat, and any successor
entities and separated entities shall not be permitted
to warehouse any orbital location that—
‘‘(A) as of March 25, 1998, did not con-
tain a satellite that was providing commercial
services, or, subsequent to such date, ceased to
contain a satellite providing commercial serv-
ices; or
‘‘(B) as of March 25, 1998, was not des-
ignated in INTELSAT or Inmarsat operational
plans for satellites for which construction con-
tracts had been executed.
Any such orbital location of INTELSAT or
Inmarsat and of any successor entities and sepa-
rated entities 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-
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cessor entity or separated entity, such assets shall be
independently audited for purposes of appraisal, at
both book and fair market value.
‘‘(10) LIMITATION ON INVESTMENT.—Notwith-
standing the provisions of this title, COMSAT shall
not be authorized by the Commission to invest in a
satellite known as K–TV, unless Congress authorizes
such investment.
‘‘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.—
‘‘(A) IN GENERAL.—Pending privatization
in accordance with the criteria in this title,
INTELSAT shall not expand by receiving addi-
tional orbital locations, placing new satellites in
existing locations, or procuring new or addi-
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tional satellites except as permitted by subpara-
graph (B), and the United States shall oppose
such expansion—
‘‘(i) in INTELSAT, including at the
Assembly of Parties;
‘‘(ii) 
in 
the 
International 
Tele-
communication Union;
‘‘(iii) through United States instruc-
tions to COMSAT;
‘‘(iv) in the Commission, through de-
clining to facilitate the registration of addi-
tional orbital locations or the provision of
additional services (including additional
applications of existing services) or addi-
tional areas of business; and
‘‘(v) in other appropriate fora.
‘‘(B) EXCEPTION FOR CERTAIN REPLACE-
MENT
SATELLITES.—The limitations in sub-
paragraph (A) shall not apply to any replace-
ment satellites if—
‘‘(i) such replacement satellite is used
solely to provide public-switched network
voice telephony or occasional-use television
services, or both;
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‘‘(ii) such replacement satellite is pro-
cured pursuant to a construction contract
that was executed on or before March 25,
1998; and
‘‘(iii) construction of such replacement
satellite commences on or before the final
date for INTELSAT privatization set forth
in section 621(1)(A).
‘‘(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-
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ries shall be waived with respect to any transactions
with any separated entity, and any limitations on
private causes 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 as of the date of enactment of
this title to INTELSAT shall not be transferred be-
tween 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
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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 locations, plac-
ing new satellites in existing locations, or procuring
new or additional satellites, except for specified re-
placement satellites for which construction contracts
have been executed as of March 25, 1998, 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
locations or the provision of additional services
(including additional applications of existing
services) or additional areas of business; and
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‘‘(E) in other appropriate fora.
This paragraph shall not be construed as limiting
the maintenance, assistance or improvement of the
GMDSS.
‘‘(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 as of the
date of enactment of this title to Inmarsat—
‘‘(A) shall, after January 1, 2006, or the
date on which the life of the current generation
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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 in a manner in which
continued availability of the GMDSS is pro-
vided; and
‘‘(B) shall not be transferred between
Inmarsat and ICO.
‘‘(7) PRESERVATION
OF
THE
GMDSS.—The
United States shall seek to preserve space segment
capacity of the GMDSS.
‘‘SEC. 625. ENCOURAGING MARKET ACCESS AND PRIVAT-
IZATION.
‘‘(a) NTIA DETERMINATION.—
‘‘(1) DETERMINATION REQUIRED.—Within 180
days after the date of enactment of this section, the
Secretary of Commerce shall, through the Assistant
Secretary for Communications and Information,
transmit to the Commission—
‘‘(A) a list of Member countries of
INTELSAT and Inmarsat that are not Mem-
bers of the World Trade Organization and that
impose barriers to market access for private
satellite systems; and