In a story entitled "Eutelstat's Chinese Aims Hit Static: French Satellite Firm Finds Outcry Complicates Strategy For Bargaining With Beijing" published in the April 13 Wall Street Journal, correspondents Murray Hiebert and Andy Pasztor are reporting that Europe's second largest satellite operator, Eutelsat, has become embroiled in controversy over the Chinese Communist government's treatment of the media and religious dissidents. But in a new twist, the WSJ states that "the company appears to be as much a shrewd opportunist as a victim in the increasingly murky affair."
The report states, "Like many of its brethren in the satellite industry, France's Eutelsat SA for years tried in vain to find ways to beam mainstream television and data services into China. Then last spring, according to critics as well as current and former executives, the company devised a plan that already has produced a breakthrough for it in China.
"The strategy was kicked off when Eutelsat used an intermediary to sign a one-year agreement to broadcast New Tang Dynasty Television, a New York-based news and information channel that includes some programming sympathetic to the banned Falun Gong spiritual movement."
The Chinese government was outraged by the deal, maintaining that NTDTV has connections with Falun Gong, a popular spiritual practice that it has been severely persecuting and trying to silence for over five years.
The authors continue, "But in a striking twist, these people say, Eutelsat
from the outset envisioned using NTDTV as a pawn that could be sacrificed. Last
May, just weeks after Eutelsat began broadcasting NTDTV, a Beijing-owned
satellite company sent it a stern warning about continuing the programming.
"Eutelsat signaled its willingness to cut its ties with NTDTV. The
Paris-based company, controlled by private-equity groups, has since snared
broader, potentially more-lucrative deals from Chinese authorities."
"What was supposed to remain as backroom maneuvering, however, has
become a bitter international dispute over human rights and freedom of the
press. U.S. lawmakers and Bush administration officials have jumped into the
fray, demanding that NTDTV be kept on the air. The International Federation of
Journalists and French-based Reporters Without Borders accuse Eutelsat of
knuckling under to pressure from Beijing.
Eutelsat claimed that its decision to drop NTDTV was based solely on economic
factors, and it did not, as many critics have claimed, bow to pressure from
Beijing. The Chinese Embassy in Washington declined to comment when asked if it
played a role in ending the contract.
The article goes on to report, "Regardless of whether Eutelsat cuts
NTDTV programming Friday as it has said -- or does a last-minute reversal and
extends the service, as many company officials now expect -- the flap highlights
both the opportunities and the political minefields facing Western companies as
they seek to tap China's vast markets."
"The Bush administration, which has Pentagon contracts valued at tens of
millions of dollars with Eutelsat for communications over Iraq and Afghanistan,
is quietly pressing the satellite company to keep NTDTV on the air. Adding to
the pressure, a bipartisan group of more than 90 U.S. lawmakers yesterday sent a
letter telling President Bush that 'we see no reason why U.S. taxpayers should
continue to fund satellite companies
that discriminate in favor of repressive regimes and against free media.'
"Largely unnoticed amid the rhetoric is the fact that Eutelsat already has
gotten some of the commercial advantages it sought. In December, Skylogic, an
Italian Eutelsat affiliate, signed an agreement with ChinaSatcom, one of six
Chinese telecommunications operators, to provide satellite links between the two
countries. Around the same time, Eutelsat also signed a memorandum of
understanding with Beijing paving the way for further ties, including sending
limited European news programs into China, according to
industry officials."
The WSJ reports that the Chinese government is "sensitive about
foreign media companies disseminating Chinese-language programs in China."
"Last May, soon after Eutelsat took over broadcasting NTDTV, a vice
president of Beijing-owned China Satellite Communication Corp., sent the French
company a letter warning that 'broadcast of such [NTDTV] transmission is not
authorized in our country and violates the laws of [China].'"
"When Eutelsat considered responding by terminating its contract with NTDTV,
the Pentagon, which gets more than 40% of its leased satellite bandwidth from
the French company and is one of its largest customers, intervened to help keep
the channel on the air. But this year, Eutelsat has told the U.S. government
that it can retain NTDTV only if Washington buys more capacity on its
satellites, according to internal Pentagon e-mail communications reviewed by The
Wall Street Journal.
"'Eutelsat USA has approached us, basically saying that, absent a business
case involving [the] U.S. [government], Eutelsat is likely to take China's offer
of increased business, and drop NTDTV,' a Pentagon official told Assistant
Secretary of Defense Peter Rodman in a March 7 e-mail. The e-mail from Linton
Wells, deputy assistant secretary of defense for
command, control, communications and intelligence, conceded that Washington has
'leverage' with Eutelsat, but added that 'we also need to be careful that we
don't shoot ourselves in the foot by incurring termination liabilities or
impeding the ability of warfighters to get the bandwidth they need.'
"A Pentagon spokesman confirmed that 'we have met with Eutelsat, and we
have business dealings with them' but added that it would be inappropriate to
comment further on those discussions.
"A Eutelsat spokeswoman said company officials weren't available to comment
on its dealings with the U.S. government, but the company said in a statement
that it wants 'to regain the flexibility' to look for other customers.
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