§763 General criteria to ensure a pro-competitive privatization of INTELSAT and Inmarsat

Summary

The President and the FCC must make sure INTELSAT and Inmarsat become private companies in a way that promotes competition and follows the rules below. INTELSAT must be privatized as soon as possible but no later than April 1, 2001. Inmarsat must be privatized as soon as possible but no later than July 1, 2000. The new companies must be independent, commercially run, and have an ownership setup that lowers the control of the original government signatories. They must do an initial public offering (IPO) to dilute signatory ownership, unless they prove to the FCC that they already have “substantial dilution” (which means most financial interests are no longer held or controlled by signatories). No intergovernmental organization may own INTELSAT or have more than a minimal ownership in Inmarsat. The successors cannot keep the old special privileges, such as government immunities, treaty advantages, or preferred access to orbital slots. While privatizing, they cannot expand into new services. Each successor must be a national corporation and meet IPO and governance rules. For INTELSAT, an IPO should occur on or about June 30, 2005, but not later than December 31, 2005; for Inmarsat, not later than June 30, 2005 (with an unusual extension language in the law referring to December 31, 2004). Shares must trade on major stock exchanges under clear securities rules. Boards must mostly be independent of signatories and intergovernmental organizations, have fiduciary duties, and managers must not also serve signatories or intergovernmental bodies. Deals between these companies must be at arm’s length. Entities created after March 17, 2000 must get frequency and orbital approvals from national licensing authorities. Successors must be under countries with strong competition rules, be WTO Basic Telecommunications signatories, and have non‑discriminatory satellite market commitments.