WASHINGTON -- Legislation intended to begin privatizing the world's communications satellite network and give U.S. companies direct access was signed into law by President Clinton on Friday.

Clinton said the legislation is compatible with his goal of increasing competition in satellite services, "thus benefitting consumers through greater innovation, lower prices and more service options."The bill will allow telephone companies to bypass the Comsat satellite network and get direct access to the global Intelsat consortium. It also will allow Comsat to merge with Lockheed Martin Corp., a major defense contractor.

Comsat, which had expressed concerns about earlier drafts of the legislation, supported the bill passed by Congress.

The legislation sets clear steps for the two intergovernmental satellite consortiums -- Intelsat and Inmarsat -- to follow on the road to privatization. If they do not abide by these criteria, their access to the U.S. market could be restricted.

"In partnership with the Congress, my administration has worked aggressively over the last six years to promote the pro-competitive privatization of these intergovernmental satellite organizations," the president said in a statement.

He said the administration will continue to consult closely with Congress as it negotiates with other countries on how to privatize Intelsat.

"We will participate aggressively in negotiations to ensure that decisions on privatization promote robust competition and comply with the United States' international treaty organizations," Clinton added.

The legislation was necessary for Lockheed Martin Corp. to complete its proposed deal with Comsat. The defense contractor purchased 49 percent of Comsat early this fall, but could not acquire the rest of the company because of current Comsat ownership limits written into a 1962 law.

Comsat, based in Bethesda, Md., was chartered by Congress in 1962 to keep then-telephone monopoly AT&T from extending its control to international satellite communications. Once the law is rewritten, the companies will have to go back to regulators to get approval for the remainder of the deal.