Does U.S. Policy Promote a Leadership Role in the Remote Sensing Satellite Industry?
By J. Christian Kessler, NorthRaven Consulting, Seattle.
For decades, the United States led the world in building and operating remote sensing satellite systems. On cue with U.S. policy to maintain its leadership position, other nations turned to the United States for remotely sensed Earth imagery and related technologies and capabilities.
In the last few decades, however, other countries have developed their own capabilities, with increasing sophistication. Several now are in position to challenge U.S. leadership in many aspects of satellite remote sensing. Of course, any first entrant in a new technology must expect others to develop similar capabilities. But is current U.S. policy providing the tools and opportunities for U.S. firms to maintain world leadership, or are U.S. firms being unduly constrained?
Maintaining a Leadership Position?
U.S. policy states that the United States should maintain leadership, and U.S. firms should do so on a strictly commercial basis without subsidies or other special government assistance. In doing so, U.S. industry must compete internationally within the context of U.S. security policies to protect key technologies that can also have military applications.
Of course, military uses were the primary basis for early development of high-resolution satellite remote sensing. Thus, a key question is whether the United States is properly balancing national security interests in protecting technologies with national security interests in maintaining international leadership in those technologies.
Many other governments have active programs to develop their own independent space capabilities, including high-resolution remote sensing capabilities. And in many cases those national programs include the objective of leadership, or at least technical parity, in the commercial production and distribution of high-resolution remote sensing imagery and imagery products. As a result, most of the foreign competition in the satellite remote sensing market is from imagery providers operating satellites built in many cases by domestic firms with substantial government funding.
It should be noted that the U.S. government did provide underwriting for U.S commercial satellite operators DigitalGlobe and GeoEye in the form of a $7 billion EnhancedView contract split roughly equally between the two companies. This gave both firms the confidence to secure the additional funding needed to build and launch satellites.
Last summer, however, the National Geospatial-Intelligence Agency (NGA) reversed course when it informed GeoEye that its portion of the contract wouldn’t be renewed, setting the stage for the recent merger in which DigitalGlobe essentially absorbed GeoEye. This underscores how unpredictable the U.S. government can be when faced with scarce funds, even if it involves national security interests.
Industry Voices Concerns
In 2008, I conducted a study for the National Oceanic and Atmospheric Administration (NOAA) to evaluate U.S. competitiveness in high-resolution satellite remote sensing. Interviews with executives of U.S. firms that operate commercial Earth observation (EO) satellites, those that build EO satellites for domestic and foreign clients and those that provide launch services provided evidence that the U.S. government wasn’t effectively supporting or implementing the enunciated policy of striving to maintain U.S. commercial leadership in all aspects of remote sensing. Among the concerns were the following:
• U.S. government agencies remained focused on maintaining traditional roles and missions, even when it involves new programs that run counter to presidential policy. There’s no centralized monitoring or coordination of programs that can impact the U.S. commercial remote sensing industry.
• The United States is overly protective of capabilities and technologies. As a result, foreign governments and firms independently develop the capabilities that they can’t readily acquire from the United States. The United States essentially places remote sensing components and technologies in the same class as munitions items; thus, export controls are applied too stringently.
• U.S. policy requires that a government-to-government agreement first must be negotiated for exporting a remote sensing satellite or certain key technologies before the U.S. firm(s) can be licensed to export the satellite or key system. However, this formal agreement between the U.S. government and the purchasing government doesn’t guarantee that the required export license(s) will be issued. Thus, the purchasing government faces uncertainty even once it has agreed to U.S. legal and policy requirements.
• U.S. regulations concerning imagery or data dissemination appear to be more liberal than those of major foreign competitors, which generally control imagery distribution on some form of case-by-case basis, rather than providing blanket authorization for most distribution once the satellite system has been authorized for operation. However, U.S. imagery providers confronted a sense among clients that the United States is more likely to curtail access at some unforeseen point than are the governments of other imagery providers.
• The U.S. government wasn’t a strong and effective advocate of U.S. firms in international competitions. U.S. advocacy is handled largely by the Commerce Department. The State and Defense departments have the legal authority to permit or stop the proposed U.S. export, and advocacy without assertive roles by the State and Defense departments can be perceived as pro forma by the purchasing government rather than strong, unified U.S. government support.
• U.S. export priorities—imagery if possible, and if not imagery then satellites delivered on a turnkey basis—established in policy make sense to most in industry. However, many industry insiders note that because foreign governments judge that owning and independently operating their own national reconnaissance systems is necessary for their security interests, U.S. policy didn’t address the key needs of even close military allies.
In 2008, many key practices of the U.S. government ran counter to its stated policy objective and impeded, rather than fostered, that policy. Has anything changed?
Domestically, NGA has continued to be a major subscriber for high-resolution EO imagery from U.S. firms, although not only U.S. firms alone; commercial synthetic aperture radar imagery is still available only from foreign competitors, although a 2009 decision permitting 1-meter resolution systems was important. The Obama administration is seeking major reforms in U.S. export controls, including transferring many satellite remote sensing technologies from the U.S. Munitions List to the Commerce Control List, and recent legislation provides new authority for this change.
Despite these positive steps, the situation remains largely the same. Although export control reforms would be important, a disconcerting indicator of how successful those reforms might be is how the congressionally mandated report to advocate changes to U.S. satellite technology controls was delayed for nearly a year by opponents in the bureaucracy. A senior congressional staffer described the final report as late and so muddled that the real intent was unclear and unhelpful to legislative efforts.
The 2008 report for NOAA noted that the ability of U.S. industry to maintain leadership in the remote sensing arena depends in part on the nature of the competition. What are the capabilities of foreign governments and foreign firms? How do other governments support and regulate their roles in high-resolution remote sensing activities and in the related industries and activities necessary for a vigorous and active role?
The main conclusions drawn from a review of other countries that have significant capabilities in high-resolution remote sensing satellites was that many national governments, primarily operating through a national space agency, strive to develop a significant national capability in high-resolution remote sensing satellite technology; do so either through government programs or through partnerships with domestic commercial firms in which government agencies provide substantial funding and support for the commercial effort; look to domestic firms to develop and build the needed satellites; and these national remote sensing efforts lead to some commercial distribution of high-resolution satellite imagery.
These national programs define the competitive environment in which U.S. firms must operate as they strive to maintain U.S. leadership in satellite remote sensing. When the U.S. government is overly protective of its capabilities and technologies, the more difficult it becomes for U.S. firms to compete effectively in the global marketplace.