ORBIT Technical Corrections Act of 2003

Mr. Speaker, I ask unanimous consent that the Committee on Energy and Commerce be discharged from further consideration of the bill (H.R. 2312) to amend the Communications Satellite of 1962 to provide for the orderly dilution of the ownership interest in Inmarsat by former signatories to the Inmarsat Operating Agreement, and ask for its immediate consideration.

Mr. Speaker, I rise today in support of H.R. 2312, which will extend the deadline for Inmarsat to conduct the initial public offering required of it by the ORBIT satellite privatization law. H.R. 2312, introduced by Representatives Shimkus and Markey, is unopposed.

The ORBIT Act was enacted in March of 2000 to promote a competitive market for satellite communications through privatization of inter- governmental organizations, one of which is Inmarsat. The Federal Commications Commission has since found that Inmarsat has indeed satisfied the privatization criteria of the ORBIT Act.

In addition, ORBIT called on Inmarsat to conduct an initial public offering (IPO) by a date certain--December 31, 2001. However, as that December 2001 deadline approached, it became quite apparent that the volatility in the financial markets in general, and the telecommunications sector specifically, necessitated a grant of additional time within which Inmarsat could conduct its statutorily mandated IPO. As a result, Congress took the prudent step of including language in the Commerce-Justice-State FY 2002 Appropriations bill to provide an additional year to conduct the IPO, and also provide the FCC the ability to grant a six-month extension if warranted by market conditions. This action was non-controversial.

Unfortunately, the market conditions have not improved to a point where it would be reasonable to require the IPO and the current deadline (June 30, 2003) is now less than a month away. H.R. 2312, the ORBIT Technical Corrections Act, allows Inmarsat until June 30, 2004, to conduct its IPO.

The purpose of this IPO requirement was to substantilly dilute the ownership of the privatized Inmarsat by its former owners, many of which are foreign governmental entities, so as to further ensure its independence. I fully supported this goal when we enacted ORBIT, and still do today. Indeed, the action we take today, in my view, is consistent with this policy objective.

If forced to move ahead with an IPO at this time, Inmarsat will probably receive a reduced price for its shares offered. Foreign entities that still own significant portions of Inmarsat would likely be discouraged from offering their ownership interests for sale. Instead of resulting in substantial dilution of prior owners as envisioned by the ORBIT Act, a current year IPO might not achieve much dilution whatsoever. In that instance, Inmarsat would have complied with the procedural requirement of ORBIT without the substantive result that we in Congress sought: dilution of previous government owners. Given the state of the markets, the only way to ensure the dilution sought by ORBIT is to allow Inmarsat to further delay its IPO. That result is good public policy that is also good for the long-term health of the satellite communications industry.

The health of the satellite communications industry and ORBIT's implementation are important to the Committee on Energy and Commerce. We are currently exploring the possibility of holdings hearings on the state of the industry in the future. At the appropriate time, we need to examine ORBIT's implementation, and the efficiency of the existing regulatory regime. For instance, New Skies Satellites has fulfilled the requirements of ORBIT and now is a fully independent competitor in the international satellite marketplace. Some have questioned whether it makes sense to hold New Skies to a continuing list of regulatory restrictions and requirements. I look forward to working with my colleagues on the Committee to ensure that current law reflects the current realities of the satellite industry. However, today we need to enact H.R. 2312. I thank my collleagues for their support and I urge the prompt passage of this legislation.

The bill was ordered to be engrossed and read a third time, was read the third time, and passed, and a motion to reconsider was laid on the table.

Mr. Speaker, I rise in support of H.R. 2312, a bill to extend the deadline for Inmarsat to conduct the initial public offering required of it by the ORBIT Act.

The ORBIT Act was adopted in March of 2000 to promote a competitive market for satellite communications through privatization of inter- governmental organizations, one of which is Inmarsat. To further the twin goals of the privatization and independence of satellite carriers, the ORBIT Act called on Inmarsat to conduct an initial public offering (IPO) by December 31, 2001. As that December 2001 deadline approached, however, it became clear, given market conditions at the time, that it would be punitive to effectively force Inmarsat to conduct its IPO by the specified date. As a result, Congress passed legislation to provide an additional year to conduct the IPO, and also provided the FCC the ability to grant a six-month extension if warranted by market conditions.

Unfortunately, the market conditions have not improved to a point where it would be reasonable to require the IPO, and the current deadline--June 30, 2003--is now less than a month away. H.R. 2312, the ORBIT Technical Corrections Act, would not require Inmarsat to conduct its IPO until June 30, 2004, and it permits the FCC to grant an additional six months delay should market conditions continue to warrant such regulatory action. This legislation is clearly necessary at this time, lest the government would unfairly require one company and its investors to risk capital by offering shares to the public at a time when such shares are likely to be undervalued--perhaps grossly undervalued.

The Committee on Energy and Commerce continues to take an interest in the state of competition in the industry and the financial health of those who invest capital to build networks and offer satellite communications services. But as we proceed to grant one carrier additional time with which to conduct its IPO, I would observe that another provider--New Skies Satellites--long ago fulfilled the ORBIT Act's IPO and substantial dilution requirements. Since that time, it has diluted its original shareholder base yet again with a 10 percent share buyback. And New Skies is competing for satellite business independently, with strong independent management, precisely as congress envisioned in ORBIT. As

the Committee considers holding hearings to examine the state of competition in the satellite industry, I believe that Congress, having introduced a new market competitor to the satellite industry, ought to examine whether the many restrictions the ORBIT Act placed on ``separated entities''--in effect New Skies--are still necessary to preserve that company's independence and promote competition.

I look forward to working with my colleagues on the Committee on these issues. Today, I am satisfied simply to enact H.R. 2312. I urge my colleagues to support it as well.

Mr. Speaker, I rise today in support of H.R. 2312.

This bill is very straightforward. H.R. 2312 amends the ORBIT Act and gives the satellite company, Inmarsat, a little more time to complete their Initial Public Offering (IPO). Specifically, this legislation gives Inmarsat a 12-month extension from their pending June 30, 2003, deadline. It also gives the FCC the discretion to grant Inmarsat an additional 6-month extension on top of that if the company can demonstrate a legitimate need.

This legislation is necessary because the ORBIT Act--which was enacted in March 2000--did not anticipate the collapse of the IPO markets, especially in the telecommunications sector. In today's economic climate, Inmarsat cannot complete an IPO.

Without swift action by Congress on this bill, American farmers will face disrupted service of their precision farming technologies that rely on Inmarsat-distributed signals at the end of this month. Currently, many farmers, including many in my home state of Illinois, are utilizing GPS-based guidance systems to improve their productivity and efficiency. These systems enable farmers to more accurately apply seed, fertilizer and other inputs, reduce fuel use, and increase yields while reducing costs.

I want to emphasize that H.R. 2312 does not reopen the battles over the ORBIT law or challenge its underlying public policy. Rather, it simply makes this law workable as we suffer through this continuing down market.

I urge my colleagues to vote for this important and time-sensitive legislation.

Mr. President, I would like to take a few moments to comment on H.R. 2312, which allows for some technical corrections to the ORBIT Act. Although neither Inmarsat nor Intelsat has yet conducted the IPO that the ORBIT Act provided for, there is one satellite provider that has fulfilled the ORBIT Act's original requirements in this regard. That provider is New Skies Satellites, which has separated itself from its one-time parent Intelsat, conducted an IPO under challenging market conditions, substantially diluted its shareholder base through both the IPO and a recent 10 percent share buyback, and become a full-fledged competitor in the satellite marketplace. New Skies has asked that we consider some amendments to the Act that would acknowledge and recognize its fully independent status. While the abbreviated process leading to the Senate's consideration of this bill today did not permit full consideration of those issues, I am open to listening to the arguments for such changes in the context of a broader review of the ORBIT Act and its implementation.

Mr. President, I ask unanimous consent that the Senate proceed to the consideration of H.R. 2312.

Mr. President, I ask unanimous consent that the bill be read the third time and passed, the motion to reconsider be laid upon the table, and that any statements relating to the bill be printed in the Record.