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COMSAT CEO Speaks on Privatization
Washington - March 20, 1998 - Privatization of intergovernmental
satellite organizations and deregulation of COMSAT are critical to correct two anomalies in the otherwise healthy, thriving and competitive satellite industry, COMSAT President and Chief Executive Officer Betty C. Alewine said last night in a speech to the American Enterprise Institute (AEI).The first anomaly is the structure and governance of the two intergovernmental satellite organizations -- INTELSAT and Inmarsat. Both face intense competition from undersea fiber-optic cables and other satellite systems, and they must privatize if they are to compete in today's dynamic marketplace, Alewine said. ``The writing is on the wall for both of these organizations: change or perish. ``So, change is what they have opted to do ... INTELSAT and Inmarsat are both now in the process of restructuring and moving toward privatization.'' INTELSAT has approved a plan to partially privatize, and Inmarsat has proposed to fully privatize, both within the next twelve months. Second, COMSAT's current classification as a dominant carrier represents, ``the antiquated regulatory regime applied by the Federal Communications Commission to the U.S. international satellite market ... which is slowing the pace of competition and limiting customer choice. ``In the past four years, the satellite industry has been present at the creation of 21 public companies representing at least $14 billion in investments. A similarly impressive growth spurt has taken place in undersea fiber-optic cables. Today, taking satellites and fiber-optic cables together, there are multiple alternatives for 98% of the circuits to and from the United States.'' Alewine called upon the FCC to grant COMSAT's petition for non-dominance in order to, ``bring COMSAT into conformity with the robust competitive landscape of the 1990s. In most regions, COMSAT's competitors -- using both fiber optic cable and satellites -- now hold a much larger market share than we do. Additionally, in a remarkable contrast, COMSAT's satellite competitors today are not subject to any FCC economic regulation. ``If COMSAT were deregulated, we would be able to improve efficiency and be quicker to market with new services and advanced technologies. And American consumers would benefit from the new technology, price competition and a greater array of competitive services,'' Alewine concluded.
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