Lockheed Martin Stake In Comsat Approved By FCC

Communications Today, Sept 15, 1999

In a mixed bag for Bethesda, Md.-based Comsat Corp. [CQ], the FCC yesterday approved a request by Lockheed Martin Corp. [LMT] to buy 49 percent of Comsat's stock in a friendly transaction but adopted a policy that eliminates the need for U.S. users of Intelsat satellite services to gain access from Comsat, the intergovernmental satellite organization's U.S. signatory.

The FCC commissioners hope to spur competition in international satellite communications and strengthen the global positions of non-Comsat U.S. providers. Comsat is a public company created by the federal government during the 1960s to provide satellite services to the American public. It has a host of odd operating restrictions, privileges and immunities.

The quirky operating requirements of quasi-public Comsat and its heightened federal scrutiny have contributed to a company growth rate well short of that of PanAmSat Corp. [SPOT] and other private-sector providers. One requirement is that the president is authorized to approve board members and various privileges, such as exclusive direct access to Intelsat satellites.

House Commerce Committee Chairman Tom Bliley (R-VA), one of the leading proponents of direct access, said he was pleased the FCC voted to grant U.S. companies direct access to Intelsat, but he called the commission's decision to allow Lockheed Martin to buy Comsat's stock "regrettable." "This will save consumers money, and allow the industry to become more competitive," Bliley said. "This is a step in the right direction."