Senate Unanimously Passes Satellite Reform


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	Senate Unanimously Passes Satellite Reform By Daniel Sorid Staff Writer posted: 02:34 pm ET 01 July 1999

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A bill that would set a deadline for the privatization of Intelsat, the international satellite conglomerate, passed the Senate unanimously today. Under the bill, Intelsat would be banned from doing business with U.S. firms if it does not meet criteria intended to open it to competitive forces.

Nicknamed ORBIT, the bill would amend the Communications Satellite Act of 1962 to allow U.S. firms to negotiate directly for Intelsat's services, instead of through Comsat, the U.S. firm which serves as Intelsat's middleman for U.S. firms. Comsat's tax breaks and antitrust immunity would be struck down, as would an ownership requirement that has thus far kept Lockheed Martin -- who has expressed interest in acquiring Comsat -- at bay.

"Any market that lacks competition is also going to lack innovation, and is also going to lack the desire to produce cheap products," said Ben O'Connell, a spokesman for the bill's sponsor, Senator Conrad Burns, Republican of Montana. "Providing that market is not only going to spur innovation, but is also going to drive prices down."

Intelsat spokesman Tony Trujillo labeled the bill as "the heavy hand of the U.S. Congress." The Congress is violating its jurisdiction to demand the privatization of Intelsat, an international body made up of 143 member nations, he said. Intelsat is already taking measures to privatize two years before the bill requires it to do so, Trujillo added.

A version passed last year by the House of Representatives went a step further than this year's Senate version, giving firms the right to renegotiate their contracts with Comsat once the market is opened to competition. The Senate version specifically upholds those contracts.

"These contracts were earned and gained," Comsat spokesman Tom Surface said.

A House Commerce Committee spokesperson, however, said privatization would not be complete if renegotiations of contracts were not allowed in a more open market environment.