Gemstar Privatization Case Study
This paper discusses the privatization of INTELSAT. I argue that the privatization of the global satellite network was crucial for further the development of the company. The United States had benefited the most from the privatization along with many but not all the member countries of the international organization.
In 1961 the U.N. General assembly claimed, “communication by means of satellites should be available to the world as soon as practicable on a global and non-discriminatory basis”. (Doyle, 431) Ten years after in 1971, 85 nations formed a public intergovernmental organization called the International Telecommunications Satellite Organization (INTELSAT). The main purpose of this intergovernmental company was to provide international
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Budgets constraints are softened due to the fact that bankruptcy is not a likely threat to such companies for it is in the governments’ own interest to bail them out in case of bankruptcy. Being an intergovernmental company of such importance, INTELSAT could hope for backup in case of financial distress, which also decreased the incentive to an efficient functioning. In fact, before privatization, INTELSAT’s commercial revenues had failed to cover its costs; INTELSAT was authorized to make capital claims from its member states (Katkin, …show more content…
This helped the United States of America to impose US domestic interests on the international market. One example of political use of INTELSAT ltd. is in sanctions against Iran, who initially was a member of INTELSAT. In 2012, Press TV announced that The International Telecommunications Satellite Organization “has taken a number of Iranian channels off the air in Europe on an order by the US” (TV Press). In response, ITSO “urged US, INTELSAT not to take Iranian channels off air” (TV Press). This demonstrates both the lack of ITSO’s authority to counter the United State’s unilateral actions, and US using the corporation to defend the country’s interests on international level. Thus, Intelsat Ltd.’s capability to serve every country on earth is not totally secure as it can be used in favor of the company’s host
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