47 U.S.C. § 763 — General criteria to ensure a pro-competi-

Page 357 TITLE 47—TELECOMMUNICATIONS § 763 paragraph (B) in a manner that will, or is reasonably likely to, result in limitation, denial, or revocation of authority for non- core services that are used by and required for a national security agency or law en- forcement department or agency of the United States, or used by and required for, and otherwise in the public interest, any other Department or Agency of the United States to protect the health and safety of the public. Such services may be obtained by the United States directly from INTELSAT, Inmarsat, or a successor entity, or indirectly through COMSAT, or authorized carriers or distributors of the successor entity. (D) Rule of construction Nothing in this subsection is intended to preclude the Commission from acting upon applications of INTELSAT, Inmarsat, or their successor entities prior to the latest date set out in section 763(5)(A) of this title, including such actions as may be necessary for the United States to become the licens- ing jurisdiction for INTELSAT, but the Commission shall condition a grant of au- thority pursuant to this subsection upon compliance with sections 763 and 763a of this title. (2) Criteria for competition test In making the determination required by paragraph (1), the Commission shall use the li- censing criteria in sections 763, 763a, and 763c 1 of this title, and shall determine that competi- tion in the telecommunications markets of the United States will be harmed unless the Commission finds that the privatization re- ferred to in paragraph (1) is consistent with such criteria. (3) Clarification: competitive safeguards In making its licensing decisions under this subsection, the Commission shall consider whether users of non-core services provided by INTELSAT or Inmarsat or successor or sepa- rated entities are able to obtain non-core serv- ices from providers offering services other than through INTELSAT or Inmarsat or suc- cessor or separated entities, at competitive rates, terms, or conditions. Such consider- ation shall also include whether such licensing decisions would require users to replace equip- ment at substantial costs prior to the termi- nation of its design life. In making its licens- ing decisions, the Commission shall also con- sider whether competitive alternatives in indi- vidual markets do not exist because they have been foreclosed due to anticompetitive actions undertaken by or resulting from the INTELSAT or Inmarsat systems. Such licens- ing decisions shall be made in a manner which facilitates achieving the purposes and goals in this subchapter and shall be subject to notice and comment. (c) Additional considerations in determinations In making its determinations and licensing de- cisions under subsections (a) and (b), the Com- mission shall construe such subsections in a manner consistent with the United States obli- gations and commitments for satellite services under the Fourth Protocol to the General Agree- ment on Trade in Services. (d) Independent facilities competition Nothing in this section shall be construed as precluding COMSAT from investing in or owning satellites or other facilities independent from INTELSAT and Inmarsat, and successor or sepa- rated entities, or from providing services through reselling capacity over the facilities of satellite systems independent from INTELSAT and Inmarsat, and successor or separated enti- ties. This subsection shall not be construed as restricting the types of contracts which can be executed or services which may be provided by COMSAT over the independent satellites or fa- cilities described in this subsection. (Pub. L. 87–624, title VI, § 601, as added Pub. L. 106–180, § 3, Mar. 17, 2000, 114 Stat. 48.) Editorial Notes REFERENCES IN TEXT Section 763b of this title, referred to in subsec. (a)(2), was repealed by Pub. L. 109–34, § 2, July 12, 2005, 119 Stat. 377. Section 763c of this title, referred to in subsec. (b)(2), was amended generally by Pub. L. 109–34, § 3, July 12, 2005, 119 Stat. 377, and no longer relates to specific cri- teria for Inmarsat privatization. Statutory Notes and Related Subsidiaries PURPOSE Pub. L. 106–180, § 2, Mar. 17, 2000, 114 Stat. 48, provided that: ‘‘It is the purpose of this Act [see Short Title of 2000 Amendment note set out under section 701 of this title] to promote a fully competitive global market for satellite communication services for the benefit of con- sumers and providers of satellite services and equip- ment by fully privatizing the intergovernmental sat- ellite organizations, INTELSAT and Inmarsat.’’ § 761a. Incentives; limitation on expansion pend- ing privatization (a) Limitation Until INTELSAT, Inmarsat, and their suc- cessor or separate entities are privatized in ac- cordance with the requirements of this sub- chapter, INTELSAT, Inmarsat, and their suc- cessor or separate entities, respectively, shall not be permitted to provide additional services. The Commission shall take all necessary meas- ures to implement this requirement, including denial by the Commission of licensing for such services. (b) Orbital location incentives Until such privatization is achieved, the United States shall oppose and decline to facili- tate applications by such entities for new or- bital locations to provide such services. (Pub. L. 87–624, title VI, § 602, as added Pub. L. 106–180, § 3, Mar. 17, 2000, 114 Stat. 50.) PART B—FEDERAL COMMUNICATIONS COMMISSION LICENSING CRITERIA: PRIVATIZATION CRITERIA § 763. General criteria to ensure a pro-competi- tive privatization of INTELSAT and Inmarsat The President and the Commission shall se- cure a pro-competitive privatization of Page 358 TITLE 47—TELECOMMUNICATIONS § 763 1 See References in Text note below. INTELSAT and Inmarsat that meets the criteria set forth in this section and sections 763a through 763c 1 of this title. In securing such privatizations, the following criteria shall be ap- plied as licensing criteria for purposes of part A: (1) Dates for privatization Privatization shall be obtained in accord- ance with the criteria of this subchapter of— (A) INTELSAT as soon as practicable, but no later than April 1, 2001; and (B) Inmarsat as soon as practicable, but no later than July 1, 2000. (2) Independence The privatized successor entities and sepa- rated entities of INTELSAT and Inmarsat shall operate as independent commercial enti- ties, and have a pro-competitive ownership structure. The successor entities and sepa- rated entities of INTELSAT and Inmarsat shall conduct an initial public offering in ac- cordance with paragraph (5) to achieve such independence. Such offering shall substan- tially dilute the aggregate ownership of such entities by such signatories or former signato- ries. In determining whether a public offering attains such substantial dilution, the Commis- sion shall take into account the purposes and intent, privatization criteria, and other provi- sions of this subchapter, as well as market conditions. No intergovernmental organiza- tion, including INTELSAT or Inmarsat, shall have— (A) an ownership interest in INTELSAT or the successor or separated entities of INTELSAT; or (B) more than minimal ownership interest in Inmarsat or the successor or separated en- tities of Inmarsat. (3) Termination of privileges and immunities The preferential treatment of INTELSAT and Inmarsat shall not be extended to any suc- cessor entity or separated entity of INTELSAT or Inmarsat. Such preferential treatment includes— (A) privileged or immune treatment by na- tional governments; (B) privileges or immunities or other com- petitive advantages of the type accorded INTELSAT and Inmarsat and their signato- ries through the terms and operation of the INTELSAT Agreement and the associated Headquarters Agreement and the Inmarsat Convention; and (C) preferential access to orbital locations. Access to new, or renewal of access to, orbital locations shall be subject to the legal or regu- latory processes of a national government that applies due diligence requirements in- tended to prevent the warehousing of orbital locations. (4) Prevention of expansion during transition During the transition period prior to privat- ization under this subchapter, INTELSAT and Inmarsat shall be precluded from expanding into additional services. (5) Conversion to stock corporations Any successor entity or separated entity created out of INTELSAT or Inmarsat shall be a national corporation or similar accepted commercial structure, subject to the laws of the nation in which incorporated, as follows: (A) An initial public offering of securities of any successor entity or separated entity— (i) shall be conducted, for the successor entities of INTELSAT, on or about June 30, 2005, except that the Commission may extend this deadline in consideration of market conditions and relevant business factors relating to the timing of an initial public offering, but such extensions shall not permit such offering to be conducted later than December 31, 2005; and (ii) shall be conducted, for the successor entities of Inmarsat, not later than June 30, 2005, except that the Commission may extend this deadline to not later than De- cember 31, 2004. (B) The shares of any successor entities and separated entities shall be listed for trading on one or more major stock ex- changes with transparent and effective secu- rities regulation. (C) A majority of the members of the board of directors of any successor entity or separated entity shall not be directors, em- ployees, officers, or managers or otherwise serve as representatives of any signatory or former signatory. No member of the board of directors of any successor or separated enti- ty shall be a director, employee, officer or manager of any intergovernmental organiza- tion remaining after the privatization. (D) Any successor entity or separated enti- ty shall— (i) have a board of directors with a fidu- ciary obligation; (ii) have no officers or managers who are officers or managers of any signatories or former signatories; and (iii) have no directors, officers, or man- agers who hold such positions in any inter- governmental organization. (E) Any transactions or other relation- ships between or among any successor enti- ty, separated entity, INTELSAT, or Inmarsat shall be conducted on an arm’s length basis. (F) Notwithstanding subparagraphs (A) and (B), a successor entity may be deemed a national corporation and may forgo an ini- tial public offering and public securities list- ing and still achieve the purposes of this sec- tion if— (i) the successor entity certifies to the Commission that— (I) the successor entity has achieved substantial dilution of the aggregate amount of signatory or former signatory financial interest in such entity; (II) any signatories and former sig- natories that retain a financial interest in such successor entity do not possess, together or individually, effective con- trol of such successor entity; and (III) no intergovernmental organiza- tion has any ownership interest in a suc- Page 359 TITLE 47—TELECOMMUNICATIONS § 763c 1 So in original. No par. (2) has been enacted. cessor entity of INTELSAT or more than a minimal ownership interest in a suc- cessor entity of Inmarsat; (ii) the successor entity provides such fi- nancial and other information to the Com- mission as the Commission may require to verify such certification; and (iii) the Commission determines, after notice and comment, that the successor entity is in compliance with such certifi- cation. (G) For purposes of subparagraph (F), the term ‘‘substantial dilution’’ means that a majority of the financial interests in the successor entity is no longer held or con- trolled, directly or indirectly, by signatories or former signatories. (6) Regulatory treatment Any successor entity or separated entity created after March 17, 2000, shall apply through the appropriate national licensing au- thorities for international frequency assign- ments and associated orbital registrations for all satellites. (7) Competition policies in domiciliary country Any successor entity or separated entity shall be subject to the jurisdiction of a nation or nations that— (A) have effective laws and regulations that secure competition in telecommuni- cations services; (B) are signatories of the World Trade Or- ganization Basic Telecommunications Serv- ices Agreement; and (C) have a schedule of commitments in such Agreement that includes non-discrimi- natory market access to their satellite mar- kets. (Pub. L. 87–624, title VI, § 621, as added Pub. L. 106–180, § 3, Mar. 17, 2000, 114 Stat. 51; amended Pub. L. 107–77, title VI, § 628, Nov. 28, 2001, 115 Stat. 804; Pub. L. 107–233, § 1, Oct. 1, 2002, 116 Stat. 1480; Pub. L. 108–39, § 2, June 30, 2003, 117 Stat. 835; Pub. L. 108–228, § 1, May 18, 2004, 118 Stat. 644; Pub. L. 108–371, § 1, Oct. 25, 2004, 118 Stat. 1752; Pub. L. 109–34, § 1, July 12, 2005, 119 Stat. 377.) Editorial Notes REFERENCES IN TEXT Section 763b of this title, referred to in text, was re- pealed by Pub. L. 109–34, § 2, July 12, 2005, 119 Stat. 377. Section 763c of this title, referred to in text, was amended generally by Pub. L. 109–34, § 3, July 12, 2005, 119 Stat. 377, and no longer relates to specific criteria for Inmarsat privatization. AMENDMENTS 2005—Par. (5)(D)(ii). Pub. L. 109–34, § 1(1), (2), struck out subcl. (I) designation after ‘‘managers who’’ and substituted ‘‘signatories; and’’ for ‘‘signatories, or (II) have any direct financial interest in or financial rela- tionship to any signatories or former signatories, ex- cept that such interest may be managed through a blind trust or similar mechanism;’’. Par. (5)(D)(iii). Pub. L. 109–34, § 1(3), substituted ‘‘or- ganization.’’ for ‘‘organization; and’’. Par. (5)(D)(iv). Pub. L. 109–34, § 1(4), struck out cl. (iv) which read as follows: ‘‘in the case of a separated enti- ty, have no officers or directors, who (I) are officers or managers of any intergovernmental organization, or (II) have any direct financial interest in or financial re- lationship to any international organization, except that such interest may be managed through a blind trust or similar mechanism.’’ 2004—Par. (5)(A)(i). Pub. L. 108–228 substituted ‘‘June 30, 2005’’ for ‘‘December 31, 2003’’ and ‘‘December 31, 2005’’ for ‘‘June 30, 2004’’. Par. (5)(A)(ii). Pub. L. 108–371, § 1(1), substituted ‘‘June 30, 2005’’ for ‘‘June 30, 2004’’. Par. (5)(F), (G). Pub. L. 108–371, § 1(2), added subpars. (F) and (G). 2003—Par. (5)(A)(ii). Pub. L. 108–39 substituted ‘‘June 30, 2004’’ for ‘‘December 31, 2002’’ and ‘‘December 31, 2004’’ for ‘‘June 30, 2003’’. 2002—Par. (5)(A)(i). Pub. L. 107–233 substituted ‘‘De- cember 31, 2003,’’ for ‘‘October 1, 2001,’’ and ‘‘June 30, 2004;’’ for ‘‘December 31, 2002;’’. 2001—Par. (5)(A)(ii). Pub. L. 107–77 substituted ‘‘not later than December 31, 2002, except that the Commis- sion may extend this deadline to not later than June 30, 2003’’ for ‘‘on or about October 1, 2000, except that the Commission may extend this deadline in consider- ation of market conditions and relevant business fac- tors relating to the timing of an initial public offering, but to no later than December 31, 2001’’. Statutory Notes and Related Subsidiaries IMMIGRATION STATUS OF ALIEN EMPLOYEES OF INTELSAT AFTER PRIVATIZATION Title III of Pub. L. 106–396, Oct. 30, 2000, 114 Stat. 1645, provided for maintenance of nonimmigrant and special immigrant status of alien employees of INTELSAT and their immediate family members after privatization, and for treatment of employment for purposes of ob- taining immigrant status as a multinational executive or manager. § 763a. Specific criteria for INTELSAT In securing the privatizations required by sec- tion 763 of this title, the following additional criteria with respect to INTELSAT privatiza- tion shall be applied as licensing criteria for purposes of part A: (1) 1 TECHNICAL COORDINATION UNDER INTELSAT AGREEMENTS.—Technical coordina- tion shall not be used to impair competition or competitors, and shall be conducted under International Telecommunication Union pro- cedures and not under Article XIV(d) of the INTELSAT Agreement. (Pub. L. 87–624, title VI, § 622, as added Pub. L. 106–180, § 3, Mar. 17, 2000, 114 Stat. 53.) § 763b. Repealed. Pub. L. 109–34, § 2, July 12, 2005, 119 Stat. 377 Section, Pub. L. 87–624, title VI, § 623, as added Pub. L. 106–180, § 3, Mar. 17, 2000, 114 Stat. 53, related to spe- cific criteria for INTELSAT separated entities. § 763c. Space segment capacity of the GMDSS The United States shall preserve the space segment capacity of the GMDSS. This section is not intended to alter the status that the GMDSS would otherwise have under United States laws and regulations of the International Tele- communication Union with respect to spectrum, orbital locations, or other operational param- eters, or to be a barrier to competition for the provision of GMDSS services.