Developments - 1999

On November 10, 1999, the U.S. House of Representatives overwhelmingly approved, under suspension of the rules (a procedure under which non-controversial legislation is frequently considered in order to expedite business), H.R. 3261, the "Communications Satellite Competition and Privatization Act of 1999." The bill introduced by the Chairman of the House Commerce Committee, Rep. Tom Bliley (R-VA) to reform the international satellite communications industry and to grant direct access to Intelsat for all communications service providers and users, without having to go through Comsat Corporation, is virtually identical to last year's bill, H.R. 1872, which passed the House by a vote of 403-16.

H.R. 3261 was co-sponsored by the Ranking Democrat on the Committee, Rep. Edward J. Markey (D-MA), Telecommunications Subcommittee Chair, Rep. W. J. (Billy) Tauzin (R-LA), and by the Deputy Chief Majority Whip, Rep. Roy Blunt (R-MO), Rep. Michael Oxley (R-OH), Telecommunications Subcommittee Vice-Chair and seventeen other Members. House floor debate predominantly favored the bill. Reps. Bliley, Frank Pallone, Jr. (D-NJ), and Peter Deutsch (D-FL), W.J. "Billy" Tauzin (R-LA), Ron Klink (D-PA), and Albert Wynn (D-MD) offered extended remarks on the bill.

The bill now goes to a House-Senate Conference Committee, to resolve differences with the Senate-passed bill, S. 376, which was passed by the U.S. Senate on July 1, 1999. Reps. Bliley, Tauzin, Oxley, John Dingell (D-MI) and Markey have been appointed as House conferees. Senators John McCain (R-AZ), Ted Stevens (R-AK), Conrad Burns (R-MT), Ernest Hollings (D-SC), and Daniel Inouye (D-HI) have been appointed as Senate conferees.

Click here for Lockheed Martin's statement on the House bill.
Click here for PanAmSat's statement on the House bill.

S.376, the "Open-Market Reorganization for the Betterment of International Telecommunications Act" ("ORBIT") was introduced in January 1999, by Senator Conrad Burns, (R-MT), Chairman of the Subcommittee on Communications, Senate Committee on Commerce, Science, and Transportation. After numerous discussions with Senate office and industry representatives who felt the bill was not adequate to producing a reform that would be pro-competitive, the bill was amended before the hearing in March, 1999 and again before the mark up in May, 1999.

Click on the following links to view the March 1999 hearing testimony of Betty C. Alewine, President and CEO of Comsat Corporation ("Comsat"); James W. Cuminale, Senior Vice-President and General Counsel of PanAmSat Corporation; Senator John McCain, Chairman, Senate Committee on Commerce, Science, and Transportation; Conny Kullman, Director General and CEO of Intelsat; Roderick K. Porter, Acting Chief, International Bureau of the Federal Communications Commission; John Sponyoe, CEO of Lockheed Martin Global Telecommunications.

S. 376 was passed by the Senate after several Senators, including Senators Trent Lott (R-MS), Ted Stevens (R-AK) and Slade Gorton (R-WA), obtained Senator Burns' consent to amendments that would address some of their concerns about the bill.

Senators Christopher Dodd (D-CT) and Joseph Lieberman (D-CT) expressed their concerns about the serious deficiencies of the bill in their July 1, 1999 Congressional Record statements.

The Satellite Coalition, comprised of satellite service providers and customers, also urged the Senate to consider several amendments before final passage. There is a comparison of the bill as passed with the Satellite Coalition's amendments.

On September 15, 1999, the Federal Communications Commission ("FCC") authorized Lockheed Martin to acquire up to 49 percent of Comsat's stock and in a companion proceeding, adopted a policy allowing United States users a limited form of direct access to the Intelsat system (6.6MB PDF).

Correspondence between Chairman Bliley and FCC Chairman Kennard immediately prior to the FCC's actions underscores the important public policy issues that remain to be addressed in satellite reform legislation.

PanAmSat filed an appeal of the Commission's order authorizing the acquisition by Lockheed Martin of 49 percent of Comsat's stock with the U.S. Court of Appeals for the District of Columbia on September 17, 1999. (PDF File 1, 2) A briefing schedule for the appeal has not been established.

On October 14, 1999, after the FCC rejected Comsat's stay request, Comsat filed for a stay of the FCC's direct access order with the U.S. Court of Appeals for the District of Columbia Circuit. On October 22, 1999, the FCC filed its response to Comsat's motion. Comsat filed its reply to the FCC's response on October 29, 1999. On November 10, the court denied Comsat's emergency motion for stay.