Summary: H.R.1872 — 105th Congress (1997-1998)All Information (Except Text)

Bill summaries are authored by CRS.

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Passed House amended (05/06/1998)

Communications Satellite Competition and Privatization Act of 1998 - Amends the Communications Satellite Act of 1962 to prohibit the issuance or renewal of any licenses or construction permits to, or the authorization of use of space segments owned, leased, or operated by, any separated entity unless the Federal Communications Commission (FCC) determines that such activities will not harm competition in the U.S. telecommunications market. Defines a "separated entity" as a privatized entity to whom a portion of the International Telecommunications Satellite Organization's (INTELSAT) or the International Mobile Satellite Organization's (Inmarsat) assets are transferred prior to their full privatization.

Requires the FCC to limit or revoke the authority to use space segments owned, leased, or operated by INTELSAT or Inmarsat to provide non-core services to, from, or within the United States unless after January 1, 2002, and January 1, 2001, INTELSAT and Inmarsat, respectively, and their successor entities have been privatized in a manner that will not harm competition in the U.S. telecommunications markets. Requires the FCC, in making its determinations and licensing decisions, to consider: (1) whether users of INTELSAT or Inmarsat non-core services or their successors or separated entities are able to obtain such services from other providers at competitive rates, terms, or conditions; and (2) U.S. obligations and commitments for satellite services under the Fourth Protocol to the General Agreement on Trade in Services.

Limits expansion of INTELSAT and Inmarsat services pending privatization of such entities.

Prohibits the FCC from assisting in the registration of new orbital locations for INTELSAT or Inmarsat after January 1, 2002, and January 1, 2001, respectively, unless such entities have been privatized in a manner that will not harm competition. Provides exceptions for replacement and previously contracted satellites.

Authorizes the FCC to permit any provider of services using INTELSAT or Inmarsat space segments to provide additional services or areas of business as long as the FCC finds, on an annual basis during 1999 through 2002, that substantial progress is being made in achieving pro-competitive privatization and that neither INTELSAT nor Inmarsat are hindering competitors' access to the satellite services marketplace.

Directs the President and the FCC to secure a pro-competitive privatization of INTELSAT and Inmarsat that meets specified criteria, including requirements that: (1) INTELSAT and Inmarsat are privatized by January 1, 2002, and January 1, 2001, respectively; (2) successor and separated entities are national, stock corporations independent of signatories that control access to telecommunications markets and of any intergovernmental organizations; (3) preferential treatment is terminated; (4) expansions are prohibited during transition; (5) successor or separated entities apply through national licensing authorities for international frequency assignments and orbital registrations; (6) such entities are domiciled in countries that have laws and regulations that secure competition in telecommunications services, are signatories of the World Trade Organization (WTO) Basic Telecommunications Services Agreement, and have a schedule of commitments in the Agreement that includes non-discriminatory market access to satellite markets; (7) orbital locations that were unused as of March 25, 1998, are returned to the International Telecommunication Union; and (8) INTELSAT's and Inmarsat's assets are audited before transfer. Prohibits the communications satellite corporation (COMSAT) from investing in a satellite known as K-TV, unless authorized by the Congress.

Lists specific additional licensing criteria for INTELSAT, INTELSAT separated entities, and Inmarsat, with an exception for INTELSAT replacement satellites.

Directs the Secretary of Commerce to transmit to the Congress a list of INTELSAT and Inmarsat member countries that are not WTO members and that impose barriers to market access for private satellite systems, or are not supporting pro-competitive privatization of INTELSAT and Inmarsat. Authorizes the FCC to prohibit U.S. carriers from paying international telephone service charges in excess of a cost-based settlement rate to overseas countries on such list. Requires the United States, in exercising its authority to establish settlements for U.S. international common carriers, to seek to advance the policy of cost-based settlements in all relevant fora on international telecommunications policy.

Requires the FCC to permit providers or users of telecommunications services to obtain direct access to INTELSAT and Inmarsat telecommunications services: (1) through purchase of space segment capacity from INTELSAT or Inmarsat as of January 1, 2000, as long as the FCC has determined that such organizations have adopted a usage charge mechanism that ensures fair competition; or (2) through investment in INTELSAT as of January 1, 2002, and Inmarsat as of January 1, 2001, if the FCC finds that such investment will assure fair compensation to INTELSAT or Inmarsat signatories for the market value of their investment.

Requires the FCC, beginning on January 1, 2000, to afford satellite service users or providers who previously had a contractual relationship or commitment with COMSAT an opportunity to renegotiate such contract or commitment, notwithstanding any early termination charges. Allows the FCC, if it determines that a contractual provision restricts the ability of users or providers to modify existing contracts or enter into new contracts with another provider, to declare such provisions null and void as contrary to public policy.

Authorizes the FCC, after a public interest determination, to restrict foreign ownership of a U.S. signatory if it determines that not doing so would constitute a threat to national security. Revises COMSAT privileges and immunities under Federal or State laws.

Provides that nothing in this Act or the Communications Act of 1934 shall be construed to authorize or require any preference in Government procurement of telecommunications services for the satellite space segment provided by INTELSAT or Inmarsat.

Requires the President and the FCC to report annually to specified congressional committees on progress made in achieving the objectives and purposes of this Act.

Directs the President's designees and the FCC to consult with specified congressional committees 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.

Prohibits the FCC from assigning orbital locations or spectrum used for international or global satellite communications services by competitive bidding.