The studies were prepared by Dr. Bruce M. Owen, president of Economists Inc. and visiting professor of economics at Stanford University and by Dr. Leonard Waverman, head of the European operations of Law and Economics Consulting Group, and visiting professor at London Business School.

"These studies demonstrate that Intelsat and Comsat are shedding crocodile tears over satellite competition," said James W. Cuminale, PanAmSat's senior vice president and general counsel. "Intelsat and its owners from 142 countries have market power in many satellite-based international telecommunications services.

"We are at a crossroads in the global satellite marketplace. Do we want to entrench Intelsat's market control permanently or instead create a level playing field for all satellite service providers? These studies demonstrate that, under present market conditions, Comsat deregulation is premature and that fair competition and open market access should be the goals of Intelsat privatization," Cuminale added.

Intelsat, a Washington-based international treaty organization of 142 member nations, provides global satellite capacity through its members called signatories. Comsat Corp. is the U.S. signatory and is the only company permitted to provide Intelsat satellite capacity in the United States. Comsat has recently requested approval from the Federal Communications Commission to be regulated as a carrier without market power. Last week, Intelsat announced a plan that would spin off six satellites and related resources to a new commercial company that would effectively be controlled by current Intelsat signatories.

Dr. Owen's study, called "Market Power, Market Foreclosure and Intelsat," finds that Intelsat still has significant market power. He concludes that fiber optic cable has not eliminated Intelsat's market power in telephony. Some countries still are not served by fiber optic cable. Other countries have some fiber optic service but still must use satellite for some international telephony. Intelsat also has market power in markets for occasional video services that require transmissions across the Atlantic Ocean, Indian Ocean or Pacific Ocean.

Dr. Owen finds that, given Intelsat's market power, the best way to privatize Intelsat is to create several privatized companies with highly limited affiliations to the current Intelsat owners. "Allowing PTTs that control access to their national telecommunications markets to own a significant share of the successor to Intelsat risks significant competitive harm and offers no offsetting benefits," Owen concludes. "Leaving PTTs as substantial owners of Intelsat would invite them to continue to foreclose markets from competing satellite systems."

Dr. Waverman's study, called "Competition in International Satellite Services," finds that Intelsat has market power that is not significantly constrained by competition. Given their strategic interactions, Intelsat and its signatories have every incentive to restrict entry and competition. Dr. Waverman concludes that Intelsat and its signatories remain a significant barrier to competition in the international satellite market.

Using detailed analysis of almost a decade's worth of relevant statistics regarding investment in Intelsat, Intelsat's operating margins and Comsat's market valuation, Dr. Waverman finds that: Intelsat's margin (revenue minus operating costs) does not change over time, as it would in a competitive market; Intelsat use by its signatories also does not change over time, as it would in a competitive market, where the signatories would be expected to use competitive satellite facilities as they roll out; and Comsat's market value reflects market power, since it is unaffected by the development of competition.

PanAmSat Corporation (NASDAQ: SPOT) is the world's leading commercial provider of satellite-based communications services. The company operates a global network of 17 satellites supported by PanAmSat professionals on five continents. These resources enable PanAmSat to provide broadcast and telecommunications services to hundreds of customers worldwide.