In the Matter of:                                        )
                                                                 ) Docket No. 000410098-1077-02
Market for Satellite Communications          )
and the Role of Intergovernmental              ) RIN 0660-ZA12
Satellite Organizations                                )

To: Mr. Milton Brown

The International Telecommunications Satellite Organization ("INTELSAT") hereby responds to the National Telecommunications and Information Administration's ("NTIA") request for comments in the above referenced proceeding. The NTIA seeks comments in order to compile its third annual report to Congress pursuant to the International Anti-Bribery and Fair Competition Act of 1998 (the "Anti-Bribery Act") as well as its second report to Congress pursuant to the Open-Market Reorganization for the Betterment of International Telecommunications Act ("ORBIT Act").

As the NTIA correctly notes, "INTELSAT . . . plans to be fully privatized by July 18, 2001." INTELSAT takes this opportunity to briefly update the NTIA on the progress it has made toward that goal.

In its comments filed May 8, 2000 for purposes of the NTIA's second report to Congress pursuant to the Anti-Bribery Act, INTELSAT noted that its subsidiary, Intelsat LLC, had filed an application with the Federal Communications Commission ("FCC" or "Commission") for authority to operate INTELSAT's 17 existing C-band and Ku-band satellites, to further construct, launch and operate 10 additional satellites, and to relocate, among 22 orbital locations, certain currently operating satellites ("Application"). In August 2000, the Commission granted the Application, effective upon asset transfer and conditioned upon a finding that INTELSAT's privatization is pro-competitive as required by the ORBIT Act.

With respect to that Application, Intelsat LLC has made several filings to the FCC concerning its privatization plans and progress. Among the most recent was a December 18, 2000 filing responding to the Commission's request for "supplemental information describing fully all aspects of the decision of the Assembly to privatize INTELSAT." In that filing, Intelsat LLC noted that in November 2000, the 25^th Assembly of Parties had made a final commitment to privatize INTELSAT by July 18, 2001 and described the decisions taken by that Assembly of Parties and by the Board of Governors in December 2000 with respect to INTELSAT's privatization. In addition, Intelsat LLC explained how INTELSAT's privatization satisfies the requirements of the ORBIT Act. INTELSAT will not repeat those comments herein, but instead incorporates them herein by reference.

Since the historic decision taken by the 25^th Assembly of Parties, INTELSAT has been diligently preparing for the July 18, 2001 privatization date. For example, in March 2001, the Board of Governors finalized the documents relating to the distribution of INTELSAT's services post-privatization. Those documents were filed with the Commission on March 16, 2001, together with a description of the intercompany relationships that will exist between the various entities that will comprise the post-privatization corporate structure of the privatized INTELSAT . The March Board also approved the Shareholders Agreement and Bye-Laws for Intelsat, Ltd. Intelsat LLC filed copies of those documents with the Commission on April 26, 2001, together with updated information concerning the privatized INTELSAT's corporate structure.

INTELSAT also has commenced the process of novating existing commitments over to Intelsat U.K., Ltd., which is the post-privatization entity that will sell space segment capacity to customers. In addition, in March 2001, INTELSAT secured a $1 billion credit facility intended in part to provide liquidity support for the final distribution to INTELSAT's current investors.

Last week, the 26^th Assembly of Parties (Extraordinary) met in Washington, D.C. to, among other things, elect the Director General of the residual intergovernmental organization, which will be known as the International Telecommunications Satellite Organization, or "ITSO." This week, the Board of Governors concluded an extraordinary meeting to review the status of INTELSAT's efforts to satisfy the conditions precedent to the asset transfer that were previously established by the Board.

In short, INTELSAT's privatization process continues apace. INTELSAT fully anticipates privatizing on July 18, 2001 in a manner consistent with the ORBIT Act.

Respectfully submitted,

INTELSAT

By: ___/s/__________________

David B. Meltzer

Vice President and General Counsel
 
 
 
 
 
 
 
 
 
 
 
 
 
 

3 May 2001