HR 1872 (105th) EH.
Title: Communications Satellite Competition and Privatization Act of 1998.
Date passed by House: May 6, 1998.
Source: Library of Congress.

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.

HR 1872 EH1S

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.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Communications Satellite Competition and Privatization Act of 1998'.

SEC. 2. PURPOSE.

It is the purpose of this Act to promote a fully competitive global market for satellite communication services for the benefit of consumers and providers of satellite services and equipment by fully privatizing the intergovernmental 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 PRIVATIZATION

`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 assignment or use of any such license or permit, or authorize the use by any entity subject to United States jurisdiction of any space segment owned, leased, or operated by any separated entity, unless the Commission determines that such issuance, renewal, assignment, or use will not harm competition in the telecommunications 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 consistent with such criteria.

`(b) LICENSING FOR INTELSAT, INMARSAT, AND SUCCESSOR ENTITIES-

`(1) COMPETITION TEST- The Commission shall substantially limit, deny, or revoke the authority for any entity subject to United States jurisdiction to use space segment owned, leased, 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 competition 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 determines that such privatization is consistent with such criteria.

`(3) CLARIFICATION: COMPETITIVE SAFEGUARDS- In making its licensing decisions under this subsection, the Commission shall consider 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 termination of its design life. In making its licensing decisions, the Commission shall also consider whether competitive alternatives in individual markets do not exist because they have been foreclosed due to anticompetitive 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 DETERMINATIONS- In making its determinations and licensing decisions under subsections (a) and (b), the Commission shall take into consideration the United States obligations and commitments for satellite services under the Fourth Protocol to the General Agreement on Trade in Services.

`(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 subsection 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 Commission shall not assist, any registration for new orbital locations for INTELSAT or Inmarsat--

`(A) with respect to INTELSAT, after January 1, 2002; and

`(B) with respect to Inmarsat, after January 1, 2001; and

`(2) the President and Commission shall, consistent 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 CONTRACTED SATELLITES- Subsection (a) shall not apply to--

`(A) orbital locations for replacement satellites (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 designed 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 Commission may issue an authorization, license, or permit to, or renew the license or permit of, any provider of services using INTELSAT or Inmarsat 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 section.

`(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 segment, unless and until the Commission subsequently makes a finding under such subsection that such conditions have been attained.

`(3) PREVENTION OF EVASION- The Commission shall, by rule, prescribe means reasonably designed to prevent evasions of the limitations contained 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-

`(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 accordance 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 required 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 INTELSAT in accordance with the requirements 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 required by this subsection have been attained unless the INTELSAT Assembly of Parties has created a working party to consider and make recommendations 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 required 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 required 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 HINDERING ACCESS- The Commission shall not make a determination under paragraph (1)(B) unless the Commission 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 conditions of such subsection have not been attained.

`Subtitle B--Federal Communications Commission Licensing Criteria: Privatization Criteria

`SEC. 621. GENERAL CRITERIA TO ENSURE A PRO-COMPETITIVE 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 sections 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- Privatization 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 corporations; and

`(B) have ownership and management that is independent of--

`(i) any signatories or former signatories that control access to national telecommunications markets; and

`(ii) any intergovernmental organization remaining after the privatization.

`(3) TERMINATION OF PRIVILEGES AND IMMUNITIES- 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 locations, 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 (including additional applications of existing services) 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 corporation established through the execution of an initial public offering as follows:

`(A) Any successor entities and separated entities shall be incorporated as private corporations 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 successor entities of INTELSAT; and

`(ii) January 1, 2000, for the successor 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 telecommunications markets; or

`(ii) any intergovernmental organization remaining after the privatization.

`(E) Any transactions or other relationships between or among any successor entity, separated entity, INTELSAT, or Inmarsat shall be conducted on an arm's length basis.

`(6) REGULATORY TREATMENT- Any successor entity or separated entity shall apply through the appropriate national licensing authorities for international frequency assignments and associated orbital 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 Services Agreement; and

`(C) have a schedule of commitments in such Agreement that includes non-discriminatory market access to their satellite markets.

`(8) RETURN OF UNUSED ORBITAL LOCATIONS- 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 contain a satellite that was providing commercial services, or, subsequent to such date, ceased to contain a satellite providing commercial services; or

`(B) as of March 25, 1998, was not designated in INTELSAT or Inmarsat operational plans for satellites for which construction contracts had been executed.

Any such orbital location of INTELSAT or Inmarsat and of any successor entities and separated entities shall be returned to the International Telecommunication Union for reallocation.

`(9) APPRAISAL OF ASSETS- Before any transfer of assets by INTELSAT or Inmarsat to any successor 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- Notwithstanding 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 criteria 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 create 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 additional orbital locations, placing new satellites in existing locations, or procuring new or additional satellites except as permitted by subparagraph (B), and the United States shall oppose such expansion--

`(i) in INTELSAT, including at the Assembly of Parties;

`(ii) in the International Telecommunication Union;

`(iii) through United States instructions to COMSAT;

`(iv) 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

`(v) in other appropriate fora.

`(B) EXCEPTION FOR CERTAIN REPLACEMENT SATELLITES- The limitations in subparagraph (A) shall not apply to any replacement satellites if--

`(i) such replacement satellite is used solely to provide public-switched network voice telephony or occasional-use television services, or both;

`(ii) such replacement satellite is procured 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 SIGNATORIES- Technical coordination shall not be used to impair competition or competitors, and coordination under Article XIV(d) of the INTELSAT Agreement 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 entity shall be conducted.

`(2) PRIVILEGES AND IMMUNITIES- The privileges and immunities of INTELSAT and its signatories shall be waived with respect to any transactions with any separated entity, and any limitations on private causes of action that would otherwise generally be permitted against any separated entity shall be eliminated.

`(3) INTERLOCKING DIRECTORATES OR EMPLOYEES- None of the officers, directors, or employees of any separated entity shall be individuals who are officers, directors, or employees of INTELSAT.

`(4) SPECTRUM ASSIGNMENTS- After the initial 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 between INTELSAT and any separated entity.

`(5) REAFFILIATION PROHIBITED- Any merger or ownership or management ties or exclusive arrangements 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 ACCESS- 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, placing new satellites in existing locations, or procuring new or additional satellites, except for specified replacement 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 Telecommunication 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

`(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 competitive market.

`(4) REAFFILIATION PROHIBITED- Any merger or ownership or management ties or exclusive arrangements between Inmarsat or any successor entity or separated entity and ICO shall be prohibited until 15 years after the completion of Inmarsat privatization under this title.

`(5) INTERLOCKING DIRECTORATES OR EMPLOYEES- None of the officers, directors, or employees of Inmarsat or any successor entity or separated entity shall be individuals who are officers, directors, 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 of Inmarsat satellites ends, whichever is later, be made available for assignment to all systems (including the privatized Inmarsat) on a nondiscriminatory basis and in a manner in which continued availability of the GMDSS is provided; 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 PRIVATIZATION.

`(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 Members of the World Trade Organization and that impose barriers to market access for private satellite systems; and

`(B) a list of Member countries of INTELSAT and Inmarsat that are not Members of the World Trade Organization and that are not supporting pro-competitive privatization of INTELSAT and Inmarsat.

`(2) CONSULTATION- The Secretary's determinations under paragraph (1) shall be made in consultation with the Federal Communications Commission, the Secretary of State, and the United States Trade Representative, and shall take into account the totality of a country's actions in all relevant fora, including the Assemblies of Parties of INTELSAT and Inmarsat.

`(b) IMPOSITION OF COST-BASED SETTLEMENT RATE- Notwithstanding--

`(1) any higher settlement rate that an overseas carrier charges any United States carrier to originate or terminate international message telephone services; and

`(2) any transition period that would otherwise apply,

the Commission may by rule prohibit United States carriers from paying an amount in excess of a cost-based settlement rate to overseas carriers in countries listed by the Commission pursuant to subsection (a).

`(c) SETTLEMENTS POLICY- The Commission shall, in exercising its authority to establish settlements rates for United States international common carriers, seek to advance United States policy in favor of cost-based settlements in all relevant fora on international telecommunications policy, including in meetings with parties and signatories of INTELSAT and Inmarsat.

`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 telecommunications services to obtain direct access to INTELSAT telecommunications services--

`(A) through purchases of space segment capacity from INTELSAT as of January 1, 2000, if the Commission determines that--

`(i) INTELSAT has adopted a usage charge mechanism that ensures fair compensation to INTELSAT signatories for support costs that such signatories would not otherwise be able to avoid under a direct access regime, such as insurance, administrative, and other operations and maintenance expenditures;

`(ii) the Commission's regulations ensure that no foreign signatory, nor any affiliate thereof, shall be permitted to order space segment directly from INTELSAT in order to provide any service subject to the Commission's jurisdiction; and

`(iii) the Commission has in place a means to ensure that carriers will be required to pass through to end-users savings that result from the exercise of such authority; and

`(B) through investment in INTELSAT as of January 1, 2002, if the Commission determines that such investment will be attained under procedures that assure fair compensation to INTELSAT signatories for the market value of their investments;

`(2) to permit providers or users of telecommunications services to obtain direct access to Inmarsat telecommunications services--

`(A) through purchases of space segment capacity from Inmarsat as of January 1, 2000, if the Commission determines that--

`(i) Inmarsat has adopted a usage charge mechanism that ensures fair compensation to Inmarsat signatories for support costs that such signatories would not otherwise be able to avoid under a direct access regime, such as insurance, administrative, and other operations and maintenance expenditures;

`(ii) the Commission's regulations ensure that no foreign signatory, nor any affiliate thereof, shall be permitted to order space segment directly from Inmarsat in order to provide any service subject to the Commission's jurisdiction; and

`(iii) the Commission has in place a means to ensure that carriers will be required to pass through to end-users savings that result from the exercise of such authority; and

`(B) through investment in Inmarsat as of January 1, 2001, if the Commission determines that such investment will be attained under procedures that assure fair compensation to Inmarsat signatories for the market value of their investments;

`(3) to act on COMSAT's petition to be treated as a nondominant carrier for the purposes of the Commission's regulations according to the provisions of section 10 of the Communications Act of 1934 (47 U.S.C. 160); and

`(4) to eliminate any regulation on the availability of direct access to INTELSAT or Inmarsat or to any successor entities after a pro-competitive privatization is achieved consistent with sections 621, 622, and 624.

`SEC. 642. TERMINATION OF MONOPOLY STATUS.

`(a) RENEGOTIATION OF MONOPOLY CONTRACTS PERMITTED- The Commission shall, beginning January 1, 2000, permit users or providers of telecommunications services that previously entered into contracts or are under a tariff commitment with COMSAT to have an opportunity, at their discretion, for a reasonable period of time, to renegotiate those contracts or commitments on rates, terms, and conditions or other provisions, notwithstanding any term or volume commitments or early termination charges in any such contracts with COMSAT.

`(b) COMMISSION AUTHORITY TO ORDER RENEGOTIATION- Nothing in this title shall be construed to limit the authority of the Commission to permit users or providers of telecommunications services that previously entered into contracts or are under a tariff commitment with COMSAT to have an opportunity, at their discretion, to renegotiate those contracts or commitments on rates, terms, and conditions or other provisions, notwithstanding any term or volume commitments or early termination charges in any such contracts with COMSAT.

`(c) PROVISIONS CONTRARY TO PUBLIC POLICY VOID- Whenever the Commission permits users or providers of telecommunications services to renegotiate contracts or commitments as described in this section, the Commission may provide that any provision of any contract with COMSAT that restricts the ability of such users or providers to modify the existing contracts or enter into new contracts with any other space segment provider (including but not limited to any term or volume commitments or early termination charges) or places such users or providers at a disadvantage in comparison to other users or providers that entered into contracts with COMSAT or other space segment providers shall be null, void, and unenforceable.

`SEC. 643. SIGNATORY ROLE.

`(a) LIMITATIONS ON SIGNATORIES-

`(1) NATIONAL SECURITY LIMITATIONS- The Federal Communications Commission, after a public interest determination, in consultation with the executive branch, may restrict foreign ownership of a United States signatory if the Commission determines that not to do so would constitute a threat to national security.

`(2) NO SIGNATORIES REQUIRED- The United States Government shall not require signatories to represent the United States in INTELSAT or Inmarsat or in any successor entities after a pro-competitive privatization is achieved consistent with sections 621, 622, and 624.

`(b) CLARIFICATION OF PRIVILEGES AND IMMUNITIES OF COMSAT-

`(1) GENERALLY NOT IMMUNIZED- Notwithstanding any other law or executive 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 signatory of INTELSAT or Inmarsat.

`(2) LIMITED IMMUNITY- COMSAT and any other company functioning as United States signatory to INTELSAT or Inmarsat shall not be liable for action taken by it in carrying out the specific, written instruction of the United States issued in connection with its relationships and activities with foreign governments, international entities, and the intergovernmental satellite organizations.

`(3) PROVISIONS PROSPECTIVE- Paragraph (1) shall not apply with respect to liability for any action taken by COMSAT before the date of enactment of the Communications Satellite Competition and Privatization Act of 1998.

`(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 entities providing similar services.

`SEC. 644. ELIMINATION OF PROCUREMENT PREFERENCES.

`Nothing in this title or the Communications Act of 1934 shall be construed to authorize or require any preference, in Federal Government procurement of telecommunications services, for the satellite space segment provided by INTELSAT, Inmarsat, or any successor entity or separated entity.

`SEC. 645. USE OF ITU TECHNICAL COORDINATION.

`The Commission and United States satellite companies shall utilize the International Telecommunication Union procedures for technical coordination with INTELSAT and its successor entities and separated entities, rather than INTELSAT procedures.

`SEC. 646. TERMINATION OF COMMUNICATIONS SATELLITE ACT OF 1962 PROVISIONS.

`Effective on the dates specified, the following provisions 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 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); and section 304.

`(3) On the effective date of the Commission's order that establishes direct access to Inmarsat space segment: Subsections (a) through (d) of section 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. 647. REPORTS TO CONGRESS.

`(a) ANNUAL REPORTS- The President and the Commission shall report to the Committees on Commerce and International Relations of the House of Representatives and the Committees on Commerce, Science, and Transportation and Foreign Relations of the Senate within 90 calendar days of the enactment of this title, and not less than annually thereafter, on the progress made to achieve the objectives and carry out the purposes and provisions of this title. Such reports shall be made available immediately to the public.

`(b) CONTENTS OF REPORTS- The reports submitted pursuant to subsection (a) shall include the following:

`(1) Progress with respect to each objective since the most recent preceding report.

`(2) Views of the Parties with respect to privatization.

`(3) Views of industry and consumers on privatization.

`(4) Impact privatization has had on United States industry, United States jobs, and United States industry's access to the global marketplace.

`SEC. 648. CONSULTATION WITH CONGRESS.

`The President's designees and the Commission shall consult with the Committees on Commerce and International Relations of the House of Representatives and the Committees on Commerce, Science, and Transportation and Foreign Relations of the Senate prior to each meeting of the INTELSAT or Inmarsat Assembly of Parties, the INTELSAT Board of Governors, the Inmarsat Council, or appropriate working group meetings.

`SEC. 649. SATELLITE AUCTIONS.

`Notwithstanding any other provision of law, the Commission shall not have the authority to assign by competitive bidding orbital locations or spectrum used for the provision of international or global satellite communications services. The President shall oppose in the International Telecommunication Union and in other bilateral and multilateral fora any assignment by competitive bidding of orbital locations or spectrum used for the provision of such services.

`Subtitle D--Negotiations To Pursue Privatization

`SEC. 661. METHODS TO PURSUE PRIVATIZATION.

`The President shall secure the pro-competitive privatizations required by this title in a manner that meets the criteria in subtitle B.

`Subtitle E--Definitions

`SEC. 681. DEFINITIONS.

`(a) IN GENERAL- As used in this title:

`(1) INTELSAT- The term `INTELSAT' means the International Telecommunications Satellite Organization established pursuant to the Agreement Relating to the International Telecommunications Satellite Organization (INTELSAT).

`(2) INMARSAT- The term `Inmarsat' means the International Mobile Satellite Organization established pursuant to the Convention on the International Maritime Organization.

`(3) SIGNATORIES- The term `signatories'--

`(A) in the case of INTELSAT, or INTELSAT successors or separated entities, means a Party, or the telecommunications entity designated by a Party, that has signed the Operating Agreement and for which such Agreement has entered into force or to which such Agreement has been provisionally applied; and

`(B) in the case of Inmarsat, or Inmarsat successors or separated entities, means either a Party to, or an entity that has been designated by a Party to sign, the Operating Agreement.

`(4) PARTY- The term `Party'--

`(A) in the case of INTELSAT, means a nation for which the INTELSAT agreement has entered into force or been provisionally applied; and

`(B) in the case of Inmarsat, means a nation for which the Inmarsat convention has entered into force.

`(5) COMMISSION- The term `Commission' means the Federal Communications Commission.

`(6) INTERNATIONAL TELECOMMUNICATION UNION- The term `International Telecommunication Union' means the intergovernmental organization that is a specialized agency of the United Nations in which member countries cooperate for the development of telecommunications, including adoption of international regulations governing terrestrial and space uses of the frequency spectrum as well as use of the geostationary satellite orbit.

`(7) 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.

`(8) SEPARATED ENTITY- The term `separated 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 March 25, 1998, but excluding ICO.

`(9) ORBITAL LOCATION- The term `orbital location' means the location for placement of a satellite on the geostationary orbital arc as defined in the International Telecommunication Union Radio Regulations.

`(10) SPACE SEGMENT- The term `space segment' means the satellites, and the tracking, telemetry, command, control, monitoring and related facilities and equipment used to support the operation of satellites owned or leased by INTELSAT, Inmarsat, or a separated entity or successor entity.

`(11) NON-CORE SERVICES- The term `non-core services' means, with respect to INTELSAT provision, services other than public-switched network voice telephony and occasional-use television, and with respect to Inmarsat provision, services other than global maritime distress and safety services or other existing maritime or aeronautical services for which there are not alternative providers.

`(12) ADDITIONAL SERVICES- The term `additional services' means Internet services, high-speed data, interactive services, non-maritime or non-aeronautical mobile services, Direct to Home (DTH) or Direct Broadcast Satellite (DBS) video services, or Ka-band services.

`(13) INTELSAT AGREEMENT- The term `INTELSAT Agreement' means the Agreement Relating to the International Telecommunications Satellite Organization (`INTELSAT'), including all its annexes (TIAS 7532, 23 UST 3813).

`(14) HEADQUARTERS AGREEMENT- The term `Headquarters Agreement' means the International Telecommunication Satellite Organization Headquarters Agreement (November 24, 1976) (TIAS 8542, 28 UST 2248).

`(15) OPERATING AGREEMENT- The term `Operating Agreement' means--

`(A) in the case of INTELSAT, the agreement, including its annex but excluding all titles of articles, opened for signature at Washington on August 20, 1971, by Governments or telecommunications entities designated by Governments in accordance with the provisions of the Agreement; and

`(B) in the case of Inmarsat, the Operating Agreement on the International Maritime Satellite Organization, including its annexes.

`(16) INMARSAT CONVENTION- The term `Inmarsat Convention' means the Convention on the International Maritime Satellite Organization (Inmarsat) (TIAS 9605, 31 UST 1).

`(17) NATIONAL CORPORATION- The term `national corporation' means a corporation the ownership of which is held through publicly traded securities, and that is incorporated under, and subject to, the laws of a national, state, or territorial government.

`(18) 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.)

`(19) ICO- The term `ICO' means the company known, as of the date of enactment of this title, as ICO Global Communications, Inc.

`(20) REPLACEMENT SATELLITE- The term `replacement satellite' means a satellite that replaces a satellite that fails prior to the end of the duration of contracts for services provided over such satellite and that takes the place of a satellite designated for the provision of public-switched network and occasional-use television services under contracts executed prior to March 25, 1998 (but not including K-TV or similar satellites). A satellite is only considered a replacement satellite to the extent such contracts are equal to or less than the design life of the satellite.

`(21) GLOBAL MARITIME DISTRESS AND SAFETY SERVICES OR GMDSS- The term `global maritime distress and safety services' or `GMDSS' means the automated ship-to-shore distress alerting system which uses satellite and advanced terrestrial systems for international distress communications and promoting maritime safety in general. The GMDSS permits the worldwide alerting of vessels, coordinated search and rescue operations, and dissemination of maritime safety information.

`(b) COMMON TERMINOLOGY- Except as otherwise provided in subsection (a), terms used in this title that are defined in section 3 of the Communications Act of 1934 have the meanings provided in such section.'.

Passed the House of Representatives May 6, 1998.

Attest:

Clerk.

END