Space Balls

Are the high costs of international phone calls, video conferences, or data transfers putting a dent in your budget? Reps. Tom Bliley (R-Va.) and Edward J. Markey (D-Mass.) want to help. They are pushing H.R. 1872, a bill to increase competition in the satellite sector of the international telecommunications market.

In 1964, a group of 11 nations, led by the United States, created the International Telecommunications Satellite Organization (INTELSAT)--an international corporation chartered by member nations and jointly owned by national signatories, usually agencies affiliated with state-sanctioned telecom monopolies--to provide international telephone and data services. Today, the 141-member INTELSAT operates a network of 24 satellites, providing voice, video, and data connections.

INTELSAT maintains a global network of satellites, selling space on its networks to the signatories. These signatories, in turn, sell access to telecommunications companies operating in national markets. In the United States, companies purchase access through the Communications Satellite Corporation (Comsat), a privately held and tightly regulated national monopoly, which owns 19 percent of INTELSAT.

Companies can't easily deploy private satellite networks to bypass INTELSAT because they need access to customers in local markets. Gaining access to the relatively deregulated U.S. market poses few problems. But in many countries, national telecom monopolies also own stakes in INTELSAT and license companies to operate nationwide. These monopolies aren't eager to allow competition to reduce the prices they charge consumers.

Backed by the Clinton administration and companies eager to compete in the international satellite market, Bliley and Markey's bill seeks to privatize INTELSAT by January 1, 2002, breaking it up into several corporations that can't be owned or operated by monopoly telecom companies. The bill would also end Comsat's exclusive access to the satellite network.

"This bill brings competition to outer space," says Bliley, "and the result will be better and cheaper international satellite communications."