The Reagan administration yesterday defended its decision to allow competition for Intelsat.

David J. Markey, assistant secretary for communications and information at the U.S. Department of Commerce, told a congressional hearing that the decision to allow limited competition for Intelsat was designed to stimulate trade and reduce the cost of telecommunications services.

Increasing United States trade revenue, he said, "is very much behind this effort.

"International communications services are critically important when it comes to supporting and expanding U.S. trade in services," Markey told members of House subcommittees on international operations and international economic policy and trade.

Yesterday's hearing was the first of a series of hearings scheduled by the subcommittees.

New options in international communications should allow the U.S. "to develop the business and communications service markets in which American companies traditionally have done well," he said.

Private satellite systems that will compete with Intelsat, the global communications consortium that has a monopoly over telecommunications services, were approved by the White House in November.

The Federal Communications Commission has yet to set rules for the service, which will be allowed to carry only private-line data communications for businesses. The competition will not affect Intelsat's core business of transmitting international phone or television signals, executive branch officials said.

Congressional members voiced concerns, however, that competition could damage Intelsat economically.

"I have several concerns about the President's authorization for separate systems," said Rep. Don Bonker (D-Fla.), chairman of the House Foreign Affairs Subcommittee on International Economic Policy and Trade. "Are we violating the proposition if it ain't broke, don't fix it?"

Bonker continued: "I am concerned about taking unilateral action which may not be acceptable to Intelsat as a whole, the foreign trade deficit in U.S. telecommunications and the effect of competition on the Third World."

William Schneider Jr., undersecretary of State for security assistance, science and technology, said the introduction of competition would benefit the Third World. "New entrants offering new services will further the growth rate of this communications market; it is important in all countries costs be as close as possible to real costs," he said.

In that connection, "we would encourage Intelsat to develop these markets," said Diana Lady Dougan, coordinator for international communications and information policy at the State Department. Intelsat does not yet offer such a service.

Costs for the new service would be lowered through competition, Markey said. At the same time, the Department of Commerce will be petitioning the FCC to allow private companies direct access to Intelsat, bypassing Comsat, the U.S. signatory to Intelsat. This will allow Intelsat to lower rates for its services.

"Our policy is to maintain the economic viability of Intelsat," Markey said. "Intelsat is here to serve people, but if there are services that make sense to provide, we should do that."