28 November 2000

FCC will Regulate Newly Privatized INTELSAT Telecom Provider

The 144 government parties to INTELSAT, the world's first commercial satellite telecommunications provider, have formally approved a plan to privatize its operations, the State Department says.

In a November 27 statement, department deputy spokesman Philip Reeker said the new private company, based in Bermuda, will operate in the United States under regulation of the U.S. Federal Communications Commission (FCC).

A small intergovernmental committee will also continue to operate to assure that the private company will continue to fulfill service obligations to the many poorer countries that depend on INTELSAT.

Following is the text of the statement issued jointly by the State Department and the FCC:

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Statement by Philip T. Reeker, Deputy Spokesman

November 27, 2000

Privatization of Intelsat Commercial Operations

Following is a joint statement by the Department of State and the Federal Communications Commission.

Earlier this month the INTELSAT Assembly of Parties, meeting in Washington D.C., formally approved a plan to privatize INTELSAT's commercial operations. The new company will locate its operations in the United States and be an FCC licensee under the authorizations granted by the Commission on August 8 of this year. The new company will be structured as a holding company based in Bermuda. The company will have a wholly owned subsidiary, based in Delaware, to hold its satellites and operating licenses. The existing and planned fleet of satellites in the C and Ku bands have been licensed by the FCC while future operations in the Ka, V, or BSS [broadcast satellite service] frequency bands will be authorized by the United Kingdom. The company will be headquartered in Washington D.C., as part of a wholly owned U.S.-based subsidiary.

A small intergovernmental organization known as ITSO (the International Telecommunications Satellite Organization) will continue to exist for at least 12 years after privatization. ITSO will have no operational role, but will ensure the implementation of the public service commitments of the privatized company to provide services to lifeline countries (countries primarily dependent on INTELSAT services).

"The Administration has worked hard over the past several years to achieve a privatization of INTELSAT that will eliminate its privileges and immunities, that will enable INTELSAT to enhance competition in the domestic and worldwide satellite services market, and that will efficiently serve the needs of lifeline users," said delegation head Malcolm Lee, U.S. Coordinator for International Communications and Information Policy at the Department of State. "We are pleased that the 144 INTELSAT member-governments have taken this historic step, and have selected the United States to be INTELSAT's headquarters and licensing jurisdiction."

"This step concludes the long process that began 7 years ago and included privatization of Inmarsat, the spin-off of ICO Global from Inmarsat, the spin-off of New Skies from INTELSAT and now the privatization of INTELSAT of itself. Each of these steps will enhance competition in satellite communications and reduce prices to end users," said Gregory L. Rohde, assistant secretary of Commerce for communications and information and Administrator of the National Telecommunications and Information Administration.

"We are privileged by INTELSAT's decision to choose the United States as its licensing jurisdiction for it existing fleet," said Chairman Kennard. "The Commission is aware of the weight of this decision and takes this responsibility seriously. A privatized INTELSAT will enhance competition in satellite communications on a global scale. We look forward to working with ITSO and its member countries to further our common goals of protecting lifeline users, expanding access to developing markets, and ensuring global connectivity."

INTELSAT, a result of initiatives undertaken by the United States in the early 1960s, was created in 1971 by a group of countries as the world's first commercial satellite telecommunications provider. Now with 144 members, INTELSAT has remained a leader in the field. INTELSAT owns and operates a global satellite system that transmits much of the world's international telephone, video, data, Internet and other communications.

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Distributed by the Office of International Information Programs, U.S. Department of State.
Web site: http://usinfo.state.gov