COMSAT Applauds Congressional Passage of Satellite Reform Legislation.

Business Editors/Hi-Tech Writers

BETHESDA, Md.--(BUSINESS WIRE)--March 10, 2000

The U.S. Congress has approved a bill to amend the Communications Satellite Act of 1962.

The Senate passed the measure on March 2nd and the House cleared the bill on Thursday, March 9. The legislation will now be sent to the President for signature.

Upon enactment, the legislation, known as the ORBIT Act (Open-market Reorganization for the Betterment of International Telecommunications Act), repeals the Satellite Act's restrictions on the ownership of COMSAT stock, thereby satisfying an essential condition to COMSAT's merger with Lockheed Martin Corporation.

"COMSAT is pleased that the House and Senate leadership and the conferees worked together to achieve passage of legislation to amend the Communications Satellite Act," said Betty C. Alewine, COMSAT President and CEO. "This balanced and pro-competitive legislation clears the way toward closing the COMSAT-Lockheed Martin merger following satisfaction of the remaining regulatory conditions."

The Act also establishes an April 1, 2001 deadline for the privatization of INTELSAT, as well as criteria for determining whether the privatization of INTELSAT, Inmarsat and New Skies Satellites, N.V. are "pro-competitive." These criteria include the requirement that each entity conduct an initial public offering within certain time frames and prescribes other specific conditions by which privatization will be measured.

The Act provides that, if the actual privatization of INTELSAT, Inmarsat or New Skies are not consistent with these criteria, the Federal Communications Commission (FCC) must, subject to various exceptions, limit or deny use of these systems until the conditions are satisfied.

"Although the ORBIT Act undeniably creates future risks for these satellite systems and their owners, COMSAT believes that the privatization criteria are workable," said Mrs. Alewine.

The ORBIT Act further provides that, during the transition to privatization, INTELSAT, Inmarsat, and New Skies may not expand into "additional services." However, unlike the bill that previously passed the House, the definition of additional services does not include any services (such as Internet or high-speed data services) that are currently being provided. Thus, the new legislation will not disrupt the provision of existing services.

The ORBIT Act also permits "Level 3" (contractual) direct access to INTELSAT upon enactment, but -- unlike the bill previously passed by the House -- does not allow "Level 4" (investment) direct access. Thus, COMSAT (or, after the merger, its successor, Lockheed Martin) will remain the sole U.S. investor in INTELSAT until privatization. The bill also includes specific language protecting the integrity of COMSAT's contracts.

Finally, the Act limits prospectively COMSAT's immunity from suit in its capacity as the U.S. Signatory to those actions taken pursuant to instructions of the U.S. government, and includes appropriate liability safeguards in those instances.

Some of the statements in this news release are forward-looking and relate to anticipated future operating results.

Forward-looking statements are based on COMSAT management's current expectations and assumptions, which may be affected by the timing and outcome of pending or prospective regulatory and legislative actions, by the proposed merger of the corporation with Lockheed Martin Corporation, by developments concerning the privatization of INTELSAT, Inmarsat and New Skies, by international business conditions (e.g., foreign currency devaluation and economic instability in foreign markets), by business conditions affecting the IPO market, by international reaction to the ORBIT Act, and by other subsequent developments and business conditions, and necessarily involve risks and uncertainties.

Therefore, there can be no assurance that actual future results will not differ materially from anticipated results. COMSAT expressly disclaims any obligation to update forward looking statements.

COMSAT Corporation (NYSE: CQ) is a leading provider of global satellite services and digital networking services, products, and technology.