Hearing of House Subcommittee on Telecommunications and the Internet: The Orbit Act: An Examination of Progress Made in Privatizing the Satellite...

HEARING OF THE HOUSE SUBCOMMITTEE ON TELECOMMUNICATIONS AND THE INTERNET: THE ORBIT ACT: AN EXAMINATION OF PROGRESS MADE IN PRIVATIZING THE SATELLITE COMMUNICATIONS MARKETPLACE

April 14, 2005

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Mr. Inslee. Thank you, Mr. Goldberg. I am new on this committee, so some of this discussion may be repetitive.

But I just want to ask you, in your comments that I was reading just about the potential merger that you have discussed, is there anything that critics would argue especial about this space, so to speak, literally and figuratively, that would make this different from other mergers of other privately held or publicly held companies at this point? What arguments would be made, and how would you respond to them?

Mr. Goldberg. You know, it is always hard to speculate as to, you know, what someone would come along and say. I do believe that our industry is going to consolidate. I do believe that will be a healthy development for our industry. I do believe that any proposed combinations will get significant scrutiny over at the FCC and at the Justice Department or at the FTC.

New Skies, I have been at New Skies since its inception. In looking back over the years, it was always difficult for me to
project that we would be where we are today. Equally projecting forward, it is still hard for me to say where we will be next. New Skies is the smallest global operator, but we are larger than a number of regional operators. As a result, if there is consolidation and we participate in it, we ourselves could try to achieve scale to put us in a better competitive position relative to our bigger competitors. Equally, I think New Skies would, from the perspective of some of the larger operators, be a compelling company to combine with.

I don't believe that any arguments that would be presented in connection with a proposed INTELSAT/New Skies combination would really be meaningfully different from the same arguments that would arise if New Skies were proposing to combine with any of the other larger operators. And so, I don't believe that there is anything unique about our competitive position and INTELSAT's competitive position that would bring extraordinary arguments to bear. Candidly, I think if it were proposed that we combine with one of the other two global operators, I think we would be looking at essentially the same set of arguments. To the extent that anybody does come forward and offer any opposition, and I am not persuaded in light of what the industry looks like today, that anybody would come forward and offer those objections.

Mr. Inslee. So is it fair to say that you--and I welcome any other comments from the panel--basically look at this industry, you would suggest to us that at this point, we really should have no different regimen of protocols in how we handle merger than we do the dog food market or trucking industry or anything else. Is that kind of a fair statement, or is there some gradiations there we should think about?

Mr. Goldberg. I think that, you know, if the dog food market consolidates, I am not sure what sort of national security implications that has, but the satellite industry will attract heightened scrutiny because of the national security implications that arise because of the services that we provide.

But do I believe that there should be a fundamentally different approach to how proposed combinations in the satellite sector are reviewed relative to the terrestrial wireless sector, the fixed line telecom network? From my perspective, no, I don't believe that there should be any sort of extraordinary review or anything fundamentally different, particularly in light of the fact that satellites are increasingly competing with these other technologies.

Mr. Spector. Mr. Inslee, if I may, I would also add that a difference from the dog food industry or many other industries is that we do have, as was discussed earlier, FCC reviews. So in addition to the typical Justice Department or FTC review of a merger, you are always going to get a second look at a merger by the Federal Communications Commission under a very broad ranging public interest standard.

Mr. Inslee. Well, thank you very much, and any time you want some help buying some more Boeing products, let me know and I will give you a hand. Thanks a lot.

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