Statement in Congressional Record by Sen. Conrad Burns
(R-MT).
Re: introduction of S 376, a satellite privatization bill.
Date: February 4, 1999.
Source: Congressional Record.
Mr. BURNS. Mr. President, I rise today to introduce the `Open-market Reorganization for the Betterment of International Telecommunications (ORBIT)' bill, an important piece of legislation that will modernize our nation's laws and policies regarding the provision of international satellite communications services. I also thank the help and hard work of my colleagues who are original cosponsors of this bill, including the Chairman of the Commerce Committee, Senator McCain, and Senator Brownback, Senator Bryan, Senator Dorgan and Senator Cleland.
Dramatic technological and marketplace changes have reshaped global satellite communications in the thirty-six years since enactment of the Communications Satellite Act of 1962. These changes necessitate that we update our nation's satellite laws to establish a new policy framework for vibrant international satellite communications in the 21st century.
The bill I introduce today reflects a reasoned and balanced approach that will enable more private companies, as opposed to government entities, to bring advanced satellite communications service to every corner of the globe--including poor, remote and lesser developed countries. This bill puts the full weight of the United States squarely behind the privatization of INTELSAT, an intergovernmental organization embracing 142 countries, which, in turn, will transform the international satellite communications marketplace into a more robust and genuinely competitive arena. The beneficiaries of this legislation will be American companies and their workers who will have new opportunities to offer satellite communications services worldwide and consumers who will be able to enjoy a choice among multiple service providers of ever more advanced communications services at lower cost.
When the Soviet Union launched Sputnik in 1957, the United States responded immediately and aggressively to recapture the lead in the advancement of satellite technology. Our nation understood the tremendous potential of satellite technology, but at the same time recognized that because of the cost, risk and uncertainty, no individual company would develop it alone. Therefore, the U.S. enacted the Communications Satellite Act of 1962 which created COMSAT, a private company, to develop by itself, or presumably with the assistance of other foreign entities, a commercial worldwide satellite communications system. Subsequently, the international treaty organization, INTELSAT, was created to provide mainly telephone and data services around the world. COMSAT and INTELSAT have worked together over the last three decades to introduce satellite communications services here and abroad.
The INTELSAT/COMSAT experiment has been a magnificent success. INTELSAT, has grown to include 142 member countries, utilizing a network of 24 satellites that offer voice, data and video services around the world. In the last fifteen years, technological advances, improved large-scale financing options, and enriched market conditions have created a favorable climate for new companies to provide services that only INTELSAT had previously been able to offer. However, while the success of INTELSAT has spurred multiple private commercial companies to penetrate the global satellite market, these private companies have expressed serious concern about the existence of INTELSAT, in its present form, and the unlevel playing field upon which they must compete with INTELSAT. My legislation addresses their concerns.
This legislation prods INTELSAT to transform itself from a multi-governmentally owned and controlled monopoly to a fully privatized company. The legislation articulates the new United States policy that INTELSAT must privatize as soon as possible, but no later than January 1, 2002 and it creates a process to encourage and verify that this privatization effort occurs in a pro-competitive manner.
Press Release of Sen. Conrad Burns (R-MT).
Re: introduction S 376, a satellite privatization bill.
Date: February 4, 1999.
Source: Office of Senator Conrad Burns.
For immediate release:
Thursday, February 4, 1999
Burns Introduces Satellite Bill
Privatization of INTELSAT, COMSAT Priority for Burns in '99
WASHINGTON, D.C. -- Montana Senator Conrad Burns today introduced the Open-market Reorganization for the Betterment of International Telecommunications (ORBIT) bill, which seeks to privatize the quasi-governmental, international body controlling much of the satellite industry, INTELSAT, and its American signatory, COMSAT.
As chairman of the Senate Subcommittee on Communications, Burns has been exploring privatization of the satellite communications industry in recent years. Like the draft legislation Burns unveiled in January, ORBIT would privatize the industry using a combination of market incentives and penalties for the failure to fully comply by Jan. 1, 2002.
A number of specific criteria are included in the bill to define privatization, including conversion of INTELSAT into a stock corporation and elimination of INTELSAT's privileges and immunities. COMSAT will also be stripped of privileges and immunities. If INTELSAT does not privatize, the president is directed to withdraw the U.S. from the organization, effectively terminating COMSAT.
Burns said his bill complies with all of the enumerated principles he and Rep. Tom Bliley (R-Va.) laid down while discussing satellite privatization, which include "privatizing INTELSAT by a date certain; enabling the U.S. to participate in a restructured Inmarsat through legislation; a pro-competitive privatization of these intergovernmental satellite organizations (IGOs); eliminating both the IGOs' and COMSAT's derivative privileges and immunities and warehousing of orbital locations; non-discriminatory competition; use of market access as an incentive for a pro-competitive privatization; elimination of ownership caps on COMSAT and other deregulation and ending the role of government in commercial satellite operations."
Burns added that with the introduction of this legislation, he is calling on the Federal Communications Commission (FCC) to halt its pending rulemaking that would allow direct access to the U.S. market by INTELSAT before its privatization takes place. On Jan. 22, Burns and Bliley sent a joint letter to the Chairman Kennard calling on the FCC to drop its proceeding that would lift the 49 percent ownership cap on COMSAT, as satellite reform issues were best left to Congress rather than an unelected bureaucracy.
After speaking with representatives of PANAMSAT and other satellite users yesterday, Burns did make some adjustments to the draft bill prior to introduction. The changes step up the enforcement clause, requiring the U.S. pull out of the INTELSAT treaty if the organization fails to privatize.
"We need to ensure that satellite technology will continue to provide quality service, and we need to spur innovation. The best way to accomplish both of these goals is privatization," Burns said. "The private sector has always spearheaded technological leaps, and I think our first steps into the next century should be quantum leaps deeper into the Information Age."
Senator John McCain (R-Ariz.), chairman of the Senate Commerce Committee, joined Burns as an original cosponsor of the legislation.
"My sponsorship of this bill underscores my commitment to see that fair and effective satellite reform legislation can be signed into law by the President this year," McCain said. "I commend Senator Burns for his leadership on this issue and his outstanding work on this legislation."
Senators Sam Brownback (R-Kan.), Byron Dorgan (D-N.D.), Max Cleland (D-Ga.) and Richard Bryan (D-Nev.) are also original cosponsors of ORBIT.