Letter from Rep. Bliley and Sen. Burns to Wm. Kennard.
Re: Satellite Reform Legislation.
Date: January 21, 1999.
Source: Office of Sen. Burns.

Congress of the United States
Washington, DC  20515

January 21, 1999

The Honorable William E. Kennard
Chairman
Federal Communications Commission
Room 8-B201
445 12 St., S.W.
Washington, D.C. 20024

Dear Mr. Chairman:

The Commission has under review the request of Lockheed Martin to acquire 49 percent of COMSAT through classification as an authorized common carrier. This issue will have substantial bearing on the future structure of the international satellite industry. As you know, the Communications Satellite Act of 1962 precludes any one company from owning over ten percent of COMSAT, but for historical reasons has an exception for authorized common carriers.

Our Committees are actively considering satellite reform legislation, including an update of the 1962 Act. The House overwhelmingly passed a satellite reform bill last year introduced by Chairman Bliley and Mr. Markey and the Senate held hearings on legislation introduced by Senator Burns. Both houses will consider legislation this year. This consideration will reflect our shared principles including those of: 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 mid 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.

Legislation the Congress considers will resolve the issues you are addressing in this proceeding, providing you a clear legislative framework within which to proceed. Satellite reform must be comprehensive, and absent overall satellite privatization legislation, no company should be able to own over 10 percent of the U.S. Signatory. Comprehensive reform is the best way to promote a pro-competitive privatization of the intergovernmental satellite organizations, and deregulate COMSAT. Commission action at this time may have the unintended effect of producing uncertainty in the satellite market since Congress is considering legislation on this very issue. Therefore, we strongly urge that the Commission not take any [begin page 2] action to permit any company to purchase more than 10 percent of COMSAT, through the potential authorized common carrier exception, a reverse merger, asset transfer or other similar method.

We greatly appreciate your assistance on this important matter.

Sincerely,