FCC Wireless and International bureaus granted applications of Co...
FCC Wireless and International bureaus granted applications of Comsat and Intelsat to assign common carrier and non-common carrier earth station licenses, private land mobile radio (PLMR) licenses and international Sec. 214 authorizations to Intelsat from Comsat. Bureaus also granted…
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Comsat’s request to modify regulatory status of common carrier earth station licenses to dual-use common carrier and non-common carrier licenses. Bureaus said relevant product markets -- international switched voice, private line, video and earth station services -- were competitive with exception of international switched voice and private line services on “thin” routes. Intelsat’s privatization and transformation into strong commercial entity licensed in U.S. has been national policy goal, Bureaus said, and assignment of Comsat’s licenses and authorizations to Intelsat would accelerate transformation of Intelsat companies into commercial entities equal to competitive providers of international transmission service capacity. They said there were “no significant competitive concerns” because: (1) Several other companies were offering international capacity for provision of switched voice, private line, video and earth station services to customers in U.S. (2) Intelsat companies wouldn’t have market power in those product markets on thick routes. (3) Terms of Comsat Alternative Rate Regulation Order would constrain market power in providing capacity for switched voice and private line services on thin routes. However, FCC Comr. Copps said: “The benefits of a transaction with high foreign government ownership must be significant enough to overcome the potential harm to competition for the transaction to be in the public interest. The Bureau has not made that showing yet.” He said Intelsat was “substantially” owned by foreign govts., which controlled 30% of company, and “foreign-government control represents a serious potential threat to U.S. consumers and to competition.” Copps said Commission should understand “the critical difference between the market-distorting potential of government ownership and the market-enhancing potential of private ownership… This Commission should be promoting free trade and protecting U.S. consumers. It has not done this today.”