International Cooperation and Competition in Civilian Space Activities

DOCUMENT RESUME

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TITLE International Cooperation and Competition in Civilian Space Activities. INSTITUTION Congress of the U.S., Washington, D.C. Office of Technology Assessment. REPORT NO OTA-ISC-239 PUB DATE Jul 85 NOTE 475p. AVAILABLE FROMSuperintendent of Documents, U.S. Government Printing Office, Washington, DC 20402. PUB TYPE Reports - Research /Technical (143)

EDRS PRICE MF01/PC19 Plus Postage. DESCRIPTORS Communications Satellites; *Competition; Federal Legisla'.on; *Foreign Policy; *International Cooperation; *Policy; *Space Exploration; *Space Sciences; Technology; Transportation IDENTIFIERS *Remote Sensing ABSTRACT This report assesses the state of international competition in civilian space activitiln, explores UnitedStates civilian objectives in space, andsuggests alternative options for enhancing the overall U.S. position inspace technologies. It also investigated past, present, and projected internationalcooperative arrangements for space activities and examines their relationshipto competition in space. In keeping with the internationalfocus of this assessment, the report discusses the relationship betweenspace policy and foreign policy. It analyzes domesticpolicy issues only as they affect the U.S. ability to sell goods and servicesabroad or to cooperate effectively with other nations. It does notassess policies related to the military and intelligencespace programs except to the extent that they affect international civilian activitiesin space. The report consists of 10 chapters. Chapter1 is an executive summary; chapter 2 is an introduction. Topic areas in chapters3 to i0 are, respectively: internationalspace cooperation; competition; space transportation; satellite communications;remote sensing from space; materials processing in space; space science; and policy alternatives. Each of these chapters includesa table of contents. Five appendices are provided, which includethe text of Public Law 98-365 the "Land Remote-Sensing CommercializationAct of 1984" and Public Law 98-575 the "Commercial Space LaunchAct." (JN)

*********************************************************************** Reproductions supplied by SCRSare the best that can be made from the original document. *********************************************************************** SE 6 351 r p? 9 153 ,

II Office of Technology Assessment

Congressional Board of the 99th Congress

TED STEVENS, Alaska, Chairman

MORRIS K UDAl L, Arizona, Vice Chairman

Senate House ORRIN C HATCH GEORGE E BROWN, JR Lah California CHARLES McC MATHIAS, JR JOHN D DINGELL Maryland Michigan EDWARD M KENNEDY CLARENCE E MILLER Massachusetts Ohio ERNEST F HOLLINGS COOPER EVANS South Carolina Iowa CLAIBORNE PELL DON SUNDQUIST Rhode Island Tennessee JOHN H GIBBONS (Nonvoting)

Advisory Council

WILLIAM JPERRY, Chairman CLAIRE T. DEDRICK CARL N. HODGES H&Q Technology Partners California Land Commission University of Arizona DAVID S POTTER, Vice Chairman JAMES C. FLETCHER CHARLES N. KIMBALL University of Pittsburgh Midwest Research Institute EARL BEISTLINE S DAVID FREEMAN RACHEL McCULLOUCH Univer:ity of Alaska Consultant University of Wisconsin CHARLES A BOWSHER GILBERT GUDE LEWIS THOMAS General Accounting Office Library of Congress Memorial Sloan-Kettering Cancer Center

Director

JOHN H GIBBONS

The Technology Assessment Board approves the release of this report The views expressed in this report are not necessarily those of the Board, OTA Advisory Council, or of individual members thereof. SE

International Cooperation and Competition in Civilian Space Activities

OTA Reports are tne principal documentation 0"3 rmal assessment projects. These projects are approved in advance by the Technology Assessment Board. At the conclusion of a project, the Board has the opportunity to review the report, but its release does not necessarily imply endorsement of the results by the Board or it_ individual members.

ligkCONO. I'M OT THE UNITED STATES Once el Technology Assessment was p , t,, X,,,, . ..l Recommended Citation: International Cooperation and Competition in Civilian Space Activities (Washington, DC. U.S Congress, Office of Technology Assessment, OTA-ISC-239, Jul,,, 1985)

Library of Congress Catalog Card Number 84-601087

For sale by the Superintendent of Documents U.S. Government Printing Office, Washington, DC 20402

C.; Foreword

The nature of global space activities has changed radically over the last decade. No longer are the United States and the Soviet Union the only countries capable of placing satellites into Earth orbit or sending interplanetary probes into deepspace. Europe and Japan now have substantial space programs and have developed commercially competitive space systems. Several newly industrialized countries are well along in building their own space programs. In addition, the U.S. private sector has recently expanded its interest and investment in space technology. As this report makes clear, these changes have strong policy implications for the U.S. Governmentspace program and for the U.S. private sector. This report presents the major findings of an assessment requested by the House Comm'ttee on Science and Technology and the Joint Economic Committee, on international cooperation and competition in civilian space activities. The United States still enjoys a strong competitive position in most space technologies and in space science. There continues to be broad support for a long-term public commitment to civilian space activities. But precisely because of our achievementsand those of other space-faring nationsthe number of opportunities (and associated costs) that lie before us require a thoughtful articulation of space goals and objectives.* Such goals shouldre- flect a broad public consensus, including, but not limited to, those with obvious stake holdings in the space program. Defining these goals may be essential if the United States hopes to maintain its position of leadership at a reasonable cost. The newly appointed National Commission on Space, which OTA proposed as one option inan earlier report (Civilian Space Policy and Applications), could help to focus the national debate. Maintaining a space program well integrated with other national objectives will also require attention to the quantity and quality of cooperative internationalspace projects. This report makes clear that the United States must cooperate in space in order to stay competitive. In the course of this assessment OTA completed two technical memoranda, prepared at the request of congressional committees. UNISPACE '82: A Context for Co- operation and Competition, was requested by the House Committee on Science and Technology and the Joint Economic Committee. Remote Sensing and the Private Sec- tor: Issues for Discussion was requested by the House Committee on Science and Tech- nology and the House Committee on Government Operations. Some material in this report is discussed in more detail in these technical memoranda. A list of these and other related OTA reports appears on the next page. In undertaking this assessment, OTA sought the contributions of a wide spectrum of knowledgeable and interested individuals. Some provided information, othersre- viewed drafts of the report. OTA gratefully acknowledges their contributions of time and intellectual effort.

For an initial suggested list of such goals and objectives, see Civilian Space Stations and the U S Futurein Space (Washington, DC U S Congress, Office of Technology Assessment, OTASTI-241, November 1984)

JOHN H. GIBBONS Director

III

6 Related OTA Reports

Civilian Space Civilian Space Stations and the U.S. Future in Space. OTA-STI-241, November 1984. GPO stock #052-003-00969-2. Civilian Space Policy and Applications. OTA-STI-177, June 1982. GPO stock #052-003-00878-5. Radiofrequency Use and Management: Impacts From the World Administrative Radio Conference of 1979. OTA-CIT-163, January 1982. GPO stock #052-003-00863-7. Solar Power Satellite Systems and Issues. OTA-E-144, August 1981. NTIS order #Pb 82-108 846.

Technical Memoranda U.S.-Soviet Cooperation in Space. OTA-TM-STI-27 (in press). Remote Sensing and the Private Sector: Issues for Discussion. OTA-TM-ISC-20, March 1984. GPO stock #052-003-00945-5. Salyut: Soviet Steps Toward Permanent Human Presence in Space. OT A-TM-STI-14, December 1983. GPO stock #052-003-00937-4. UNISPACE '82: A Context for International Cooperation and Competition. OTA-TM-ISC-26, March 1983. GPO stock #052-003-00962-5. Space Science Research in the United States. OTA-TM-STI-19, September 1982. NTIS order #PB 83-166 512.

Military Space "Anti-Satellite Weapons, Countermeasures, and Arms Control" (scheduled for publication summer 1985) "B ".stic Missile Defense Technologies" (scheduled for publication summer 1985). Arms Control in Space-Workshop Proceedings. OTA-BP-ISC-28, May 1984. GPO stock #052-003-00952-8. Directed Energy Missile Defense in Space-Background Paper. OTA-BP-ISC-26, April 1984. GPO stock #052-003-00948-0.

International Competitiveness Commercial Biotechnology: An International Analysis. OTA-BA-218. January 1984. GPO stock #052-003-00939-1. An Assessment of Maritime Trade and Technology. OTA 0-220, October 1983. GPO stock #052-003-00931-5. U.S. Industrial Competitiveness-A Comparison of Steel, Electronics, and Automobiles. OTA-ISC-135, July 1981. NTIS order #PB 81-235 749. Technology and Steel Industry Competitiveness. OTA-M-122, June 1980. NTIS order #PB 80-208 200. International Competitiveness in Electronics. OTA-ISC-200. November 1983. GPO stock #052-003-00933-1.

NOTE Reports are available through the US Government Printing Office, Superintendent of Documents, W. shington, DC 2040 783 3238 and the National Technical Information Service, 5285 Port Royal Road, Springfield, VA 22161, 17031487-4650

7 OTA Project Staff on International Cooperation and Competition in Civilian Space Activities

Lionel S. Johns, Assistant Director, OTA Energy, Materials, and International Security Division

Peter Sharfman, International Security and Commerce Program Manager

Ray A. Williamson, Project Director

Douglas L. Adkins Richard DalBello Jane N. Hurd* Thomas H. Karas Gordon Law

Staff Contributors

Eric Basques Philip P. Chandler Scott Finer Darrell McElhaney** Richard Parkinson Adam Wasserman

Contractors

Bert Cowlan Willard Demory Edward Downing Russell Drew Eilene Galloway Jerry Grey Roger Hoffer Roland Inlow Court Lewis Lee Love Paul Maughan Earl Merritt Resource Development Associates Edward Risley Donald Wiesnet William Wigton

Administrative Staff

Jannie Coles Dorothy Richroath Jackie Robinson

'In hour «mtrat ,r "(intat( tram National ()( cam( and Atmo,,phenc Admmn.tration

8 Advisory Panel on International Cooperation and Competition in Civilian Space Activities

Paul Doty, Chairman Center forScience and International Affairs Harvard University

Benjamin Bova Martin Menter President Attorney-at-Law National Space Institute Washington, DC Robert Evans Arthur Morrissey Principal of Venture Capital Director, Future Systems Hambrecht & Quist, Inc Martin Marietta Aerospace Robert Frosch Fred Raynes Vice President Vice President General Motors Research Laboratories Grumman International Inc. Eilene Galloway Gary Saxonhouse Honorary Director Professor of Economics International Institute of Space Law of the University of Michigan International Astronautical Federation Jerome Simonoff Ivan Getting Vice President President-Emeritus Citicorp Industrial Credit, Inc. The Aerospace Corp Leonard Sussman Mireille Gerard Executive Director Administrator Corporate and International Freedom House Programs John Townsend American Institute of Aeronautics and Astronautics President Fairchild Space & Electronics Co. Benjamin Huberman Vice President Laurel Wilkening Vice Provost Consultants International Group, Inc. University of Arizona Walter McDougall Elizabeth Young Associate Professor of History University of California, Berkeley Vice President, Marketing and Sales COMSAT General Corp. John Mayo Vice President Bell Laboratories John L. Mc Lucas Executive Vice President and Chief Strategic Officer Communications Satellite Corp.

NOTE ()TA appreciates and is grateful for the valuable assistance and thoughtful critiques provided by these advisory panel membersThe views express td In this OTA report however are the sole responsibility of the Office.4 Technology Assessment

9 Workshop on UNISPACE '82 (Nov. 30, 1982)

Bert Cow lan Martin Menter International Communications Consultants Attorney at Law Russell C. Drew Kenneth Pederson (observer) Science and Technology Consultants National Aeronautics and Space Administration Wolfram Drewes World Bank Irwin Pikus (Chairman) National Science Foundation Eilene Galloway Vice President Charles Schmidt International Institute of Space Law RCA Astro Electronics Jerry Grey Ambassador Jean Wilkowski Publisher Volunteer International Technical Assistance Aeronautics and Astronautics

Workshop on Remote Sensing and thePrivate Sector (July 26, 1983)

Kenneth Craib Arthur Morrissey Resource Development Associates Martin Marietta Aerospace Russell C. Drew Charles Paul (observer) Science and Technology Consultants U.S. Agency for International Development Robert A. Frosch Bruce Rado General Motors Research Laboratories ERDAS Inc. Roger Hofer Jerome Simonoff Purdue University Citicorp Industrial Credit, Inc. Marvin R. Hoke, Harry Stewart ERIM Strategic Geo Science Applications SUN, E&T Terry Lehman ARCO Oil & Gas Co Dennis Zimmerman Congressional Research Service Earl S Merritt Earth Sat,- Hite Corp.

vii 1(I Executive Branch Meeting on Remote Sensing (August18, 1983)

William M. Feldman Irwin Pikus U.S. Agency for International Development National Science Foundation Raymond G. Kammer, Jr. Victor H. Reis U.S. Department of Commerce Office of Science arid Technology Poky John H. McElroy Lisle Rose National Earth Satellite Service U.S. Department of State Kenneth Pederson John Townsend National Aeronaut,cs and Space Administration Fairchild Space & Electronics Co.

Workshop on the International Trading Regime for Space-Related Equipment and Services (June 1, 1983)

Edwin Barber Sanford Rederer Treasury Department Kirth & Co. Willard Demory Richard Self Federal Communications Commission Office of the United States Trade Ava Feiner Representative Chamber of Commerce of the United States John Suomela International Trade Commis_,on

VIII 11 Acknowledgments

The following individuals contributed to this study in a variety of ways OTA is grateful for their assistance:

James Ball Peter Hambling Geoffrey Pardoe James Baker Larry Heacock Udo Pollvogt Nadine Binger Douglas Heydon William Raney William Bishop Ken Hodgkins Cad Rappaport Denise Bletsos Glen Horning Guy Rindone Kate Bonner Pat Humphlett Marvin Robinson Jane Bortnick Peter Johnson Thomas Rogers Daniel Brandel Diana Josephson Rudy Romero Darrell Branscome Daniel Kevin Richard Rowberg Tom Bruce Mark Kieffer Fred Ruth Radford Byer ly Martin Kress Glenn Sacra Charles Chafer Chester Lee Morgan Sanborn Barbara Cherry Kenneth W. Leeson Antonio Savoca Stuart Chiron George '_i Fred Sarriner Lynne Cline John Logdson Carl Schmitt John Coles William Lovell Dan Semick John Corut hers Mark McCarthy Lisa Shaffer Anthony Cox James Mahoney Mike S.rnon Raymond Crowell T. Allen McArtor Marcia Smith Terry Dawson Wally McClure Marcellus Snow James Dougherty Mark McCarthy Courtney Stadd Fred Doyle John McElroy Louis Testardi Robert Duffy Thomas McNight Shelby Tilford Otho Eskin Ahmed Meet Hans Traumann Steven Flasher Charles Miller Christopher Vizas Donna Fossum Walter Morgan Howard Warriner Sybil Francis James Morrison Fred Weingarten Roy Gamse George Ojalehto Hayden Wetzel Marc Giget Richard O' Rorke Charles Wilk Isaac Gillam Jack Os land Charles Williams Robert Gosse Scott Pace Bud Youngren Richard Halpem Robert Palmer Dennis Zimmerman

OTA wishes to acknowledge the contributions of the following organizations and Government agencies for their generous assistance Agency for International Development National Aeronautics and Space Administration American Telephone and Telegraph National Oceanic and Atmospheric Ananespace, Inc Administration Communications Center National Space Development Agency of Japan COMSAT Corp. National Telecommunications and Information Congressional Research Service Administration Embassy of the Federal Republic of Germany Orbital Sciences Corp. Embassy of France Orion Satellite Corp. Embassy of Great Britain Rockwell International Export-Import Bank SPOT Image Corp. Federal Communications Commission Department of State General Accounting Office Texas Instruments General Dynamics Trans Space Carriers Inc. GTE International SI,stems Corp United Nations Committee on the Peaceful INMARSAT Uses of Outer Space INTELSAT Walter Hinchman Associates, Inc. International Trade Administration World Bank MCI Communications Corp. Ix Contents

Chapter Page

1. Executive Summary 3

2. Introduction ...... 25

3. International Space Cooperation. 33 4. Competition 65

5. Space Transportation...... 103

b. Satellite Communications...... 147 7. Remote Sensing From Space.... 253 8. Materials Processing in Space...... 337 9. Space Science 371 10. Policy Alternatives 397 Appendix A: Search and Rescue Satellites 423 Appendix B: Alternative Forms of Industry Organization in the United States 425 Appendix C: "uolic Llw 98-365July 17, 1984 429 Appendix D: Pubic Law 98-575Oct. 30, 1984 446

Appendix E: Glossary of Acronyms . ... 456

Index ...... 463

x Chapter 1 EXECUTIVE SUMMARY

14 Contents

Page

Overview 3 Context 3 Emergency of International Competition 3 U.S. Private Sector Activities in Space 6 International Cooperative Activity 6 Space Applications 8 Space Transportation 8 Satellite Communications 10 Remote Sensing From Space 14 Materials Processing in Space 16 Space Science 18 Cooperation 18 Competition 19 U.S. Civilian Space Policy 19 Future Goals and Objectives 19 Organizing for Space Activities 20 Cooperation and Competition as Part of Policy 21

15 Chapter 1 EXECU IIVE SUMMARY

OVERVIEW

The United States has lost its monopoly in U.S. civilian objectives in space, and suggests al- Western space technology and operations; over ternative options for enhancing the overall U.S. the past decade, Europe and Japan have devel- position in space technologies and space science. oped the means to compete as providers of It also investigates past, present, and projected space-related goads and services. At the same international cooperative arrangements for space time, major U S. firms have expanded their in- activities and examines their relationship to com- terest and investment in the commercial appli- petition in space. In keeping with the internation- cations of the technologies of outer space. Both al focus of this assessment, the report discusses developments affect the ways that nations now the relationship between space policy and for- cooperate in space. Unfortunately, U.S. policies eign policy. It analyzes domestic policy issues have not adapted fully to the effects of increased only insofar as they affect our ability to sell goods foreign competition, nor, outside of satellite tele- and services abroad or to cooperate effectively communications, has the United States developed with other nations. It does not assess policies re- ways to involve its private sector effectively in ap- lated to the military and intelligence space pro- plications of space technology. Moreover, it is less grams except to the extent that they affect inter- and less appropriate to make "space policy" in national civilian activities in space. isolation from the broader agenda of domestic and international commerce and foreign affairs. 1,2.-,..7016.111M. Alterations in the political, economic, and technical context of space activities raise four major international concerns for Congress: the state of U.S. competitiveness in space technologies, the role of the U.S. private sector in space, the access of U.S. firms to international markets, and the ef- ficacy of U.S. participation in international cooperative space projects and organizations. Because of these concerns, and because of their interest in developing policies to enhance the overall scientific, technological, and economic strength of the United States, the House Committee on Science and Technology and the Joint Economic Committee requested this assessment. The report assesses the state of international competition in civilian space activities, ex Mores

CONTEXT Emergence of International space programs, japan and the Western European Competition space powers (especially France) are now able to compete with the United States in supplying some Although the U.S. civilian space program re- space-related goods and services. Other countries, mains the benchmark by which other non-Com- notably the Soviet Union, Canada, India, Peoples munist nations judge the progress, of their own Republic of China, and Brazil, produce space

16 4 International Cooperation and Competition in Civilian Space Activities

Photo credits. European Space Agency, complemonts of National Aronagics and Space Administration Launch of Arlene (left), developed by the European Space Agency and marketed by the French corporation Arianeapace, S. A. Launch of Space Shuttle Columbia (right), Nov. 28, 1983, carrying the European-developed Spacelab 17 Ch. I.Executive Summary 5 items but do not participate [extensively]' in the international export market. Most space-capable nations have sought to use their space assets as political instruments for cementing ties with friends and allies and for winning new friends and influence in the developing world. Space-related international commerce is likely to increase in the next decade, but, except for satellite communications, will continue to be shaped more by the political, military, and economic interests of national governments than by market developments. In the satellite communications sector, which has become part of the larger telecommunications industry,technology-driven market developments are forcing governments to change their regulatory structures. The emergence of foreign competition presents both a challenge and an opportunity to the United States. The European Space Agency (ESA), which pools the space interests and the financial and industrial resources of several European Photo credit: National Aeronautic. slal Some Administration countries, is an important vehicle for develop- The European-built Spacelab-1 module and attached ing European competitive ability in space-related pallet being prepared for installation in the commerce. Its largest single project, the Ariane cargo bay of the space shuttle orbiter Columbia, Aug. 16, 1983 expendable launch vehicle (ELV), built under French leadership, now competes directly with space-related equipment industries. European U.S. launch services. ES,Vs second largest proj- governments are developing their space-related ect, the Spacelab, built under West German lead- industry behind protectionist barriers where buy- ership, has increased European cooperation with national governmnt procurement is the rule. A the United States in activities involving humans number of European firms are now able to par- in space. It has also assisted West Germany to ticipate in international space markets. gain important expertise in building space habi- tats, thereby helping to set the stage for possible Like the other space powers, Japan has as- later competition with the United States. sumed that a government space program will ultimately contribute to national economic well- Outside of the ESA framework, the i tench Gov- being. It has not specifically identified space in- ernment has established and promoted particu- dustries as "targeted" for special emphasis in ex- lar space businesses (launch services and remote port competition; instead it seems to be aiming sensing) that compete in the world market. West to create a sizable space-related industry increas- Germany, as well at-, France, and to a lesser ex- ingly independent of U.S. technology and equip- tent, the United Kingdom and Italy, invest in space ment. Although they now compete internation- activities for more general purposes: to conduct ally only in electronics components and ground basic scientific research; to enhance the technological capabilities of national industries; to stations, Japanese firms will be well positioned to realize some of the technological and economic become major competitors in international mar- benefits of space applications; and to develop kets for space-related equipment and services by the early 1990s. Under internal and U.S. pressures, Japan has recently opened its market to '(This is beginning to change Canada, for example, had more than $300 million in export contracts in 1984 The Soviet Union a limited degree to U.S. suppliers of satellites and and China have offered to sell space transportation services ] telecommunications equipment.

1h 6 International Cooperation and Competition in Civilian Space Activities

Although the Soviet Union has the technologi- nificant revenues from producing specialized cal potential to compete with other countries for space-related equipment. commercial services, space competition between However, except for satellite communications, the United States and the Soviet Union will con- significant barriers of high cost and high techno- tinue to be more political and military than eco- logical and economic risk continue to deter invest- nomic. Both nations today spend more on mili- ment. In space transportation and remote sens- tary than on civilian activities in space and make ing, competition from U.S. Government-operated heavy use of space for purposes of geodesy, nav- systems is a significant impediment. Nevertheless, igation, weather forecasting, reconnaissance, mis- fueled by technological advances and Govern- sile-launch warning, and communications. They ment policy, the trend is toward more U.S. pri- are beginning to compete in developing weap- vate investment in space systems. If current trends ons for use in space. continue, there will be a wide array of privately In space-related equipment and some service financed space activities by the mid-1990s. markets, international commercial competition One continuing difficult task facing the U.S. outside of the European and Japanese markets Government will be to foster, in concert with the occurs in countries like Brazil, India, and Aus- private sector, an efficient transition from the cur- tralia, which desire to develop domestic satellite rent preponderance of Government investment in communications, and in INTELSAT and INMARSAT,2 civilian space activities to greater private sector but the largest market where substantial open investment in the 1990s. Such a transition competition in sales of enuipment takes place is occurred easily in satellite communications, be- the U.S. domestic market. U.S. firms continue to cause the demand for tAecommunication serv- dominate both markets, although Japanese ground- ices was already established and satellite circuits equipment sales have been substantial in devel- were an immediate cost-effective way to accom- oping countries. plish what was already being done on Earth. In Insatellite communications services, inter- new technology sectors, with small and uncertain national competition is currently almost non- demand, and little institutional infrastructure, the existent, except to a limited extent in North Amer- process of transition is likely to be difficult and ica. Carriers typically must hand off communi- highly specific to the sector. The process will re- cations at foreign borders or at the geostationary quire periodic attention from Congress. In these orbit, and are not allowed to sell full international sectors, Government may be able to foster effec- services to consumers. In addition, INTELSAT has tive transitions by orienting its research and de- monopoly ownership of intercontinental satellite velopment (R&D) activities toward realistically communications facilities, but major U.S. carriers evaluated market demand and by involving in- and other firms are challenging this international dustry early in the process. One such strategy is regulatory management. the National Aeronautics and Space Administra- tion's (NASA) Joil lt Endeavor Agreement (JEA), U.S. Private Sector Activities in Space through which the private sector is encouraged to share costs with NASA on projects having sig- Some of the largest U.S. corporations are now nificant research objectives and potential com- heavily involved in space-related activities, espe- mercial application. cially satellite communications. Other firms are beginning to invest in developing their own space International Cooperative Activity transportation, remote sensing, and materials processing systems. Many corporations derive sig- Space is by nature and treaty an international realm. The United States has played the leading INTELSAT is a 108 (now 1091-country organization carrying two- role in international cooperative activities by shar- thirds of the world's international communications INMARSAT is ing the fruits of its research with developing coun- a 37 (now 42I-country organization which was established in 1979 tries, assisting other industrialized nations develop to fa( ilitate maritime communications across the world's shipping lanes COMSAT Corp has been designated by the U.S Govern- their own space capabilities, and by helping to ment to serve as the U S representative to both organizations establish the international legal regime in sr. ice.

19 Ch. 1Executive Summary 7

U.S. cooperative space projects continue to to use and develop space technology. If the serve important political goals of supporting global United States wishes to reap the full economic and economic growth and open access to information, political benefits of its space program, its coop- and increasing U.S. prestige by expanding the vis- erative applications program must continue to in- ibility of U.S. technological accomplishments. U.S. volve the developing countries, especially because noncommercial international space projects have they are beginning to represent a significant mar- been managed principally by NASA, and aided ket for space-related goods and services. by the National Oceanic and Atmospheric Ad- The United States participates in various inter- ministration (NOAA) and the Agency for Inter- national organizations and meetings on space. national Development (AID). These projects also Improved U.S. preparation for these international support U.S. economic, scientific, and techno- forums could result in more favorable treatment logical goals of obtaining access to countries for of U.S. interests and concerns. U.S. experience tracking stations and ground-receiving stations, at UNISPACE '823 and the International Telecom- influencing the space programs of other coun- munication Union (ITU) Plenipotentiary's demon- tries, and expanding research opportunities for strated that such improvements will require long- U.S.scientists by sharing costs with other term domestic policy goals for outer space; more countries. effective coordination among U.S. agencies and The examples of INTELSAT and INMARSAT, the private sector; greater continuity of person- two commercially successful international coop- nel; and recognition that our critics may also rep- erative organizations, illustrate that countries with resent important future markets. The series of ITU political differences can cooperate to pursue meetings in the 1980s and 1990s, including common social, political, and Economic goals in ORB'85 on the geostationary orbit, will present space. INTELSAT, in particular, by establishing occasions where U.S. policy will be tested. new communications links and using advanced technology, has served an expanding international market for telecommunications and services. It has been a large buyer of U.S. satellites Until recently, the United States had a virtual monopoly on the conduct of cooperative international programs in space (at least in the West). Now, in part because of the very success of U.S. efforts to involve the international community, other nationsespecially Japan and some Euro- pean nationshave developed their own bilateral cooperative programs. The Soviet Union continues to expand its international cooperative rela- tionshilm in science and space applications. As a result of these circumstances, the United States is now one of several potential partners in coop- 'See UNISPACE '82 A Context for Cooperation and Competi- erative space projects. tionA Technical Memorandum, OTA-TM-I5C-26 (Washington, DC. U.S Congress, Office of Technology Assessment, March 1983). Developing countries will continue to depend 'The ITU Plenipotentiary Conference was held in Nairobi in Sep- tember 1982 See hearings before the Subcommittee on Interna- on the Liiiited States and other industrialized national Operations of the U 5 House Committee on Foreign Affairs, tions for help in expanding their own capacity E ?b 22, 1983

2 8 International Cooperation and Competition in Civilian space Activities

SPACE APPLICATIONS

OTA examii led a range of space technologies. The Shuttle, although technically more sophisti- Each is at a different stage of commercial devel- cated than the Ariane, has no special advantage opment or Government operational status. Each in this market. In addition, several U.S. private therefore presents a different set of potentialop- firms are competing in offering launch services. portunities. A large percentage of potential launch business Space Transportation will undoubtedly be removed from international competition. For instance, with few exceptions, The emergence of competition from foreign and neither the U.S. Government nor the Japanese U.S private sellers of launch services requiresa or European governments are expected to make reassessment of the U.S. Government's traditional launch procurement decisions under competitive role as a provider of launch services tocommer- international bidding. Such restrictive trade prac- cial interests. The Government must examine tices could be altered by international agreement whether and how it should continue touse the in the distant future; in the near future, however, Shuttle in competing for foreign and domestic it is unlikely that there will be effective coverage commercial launches. of launch services under either government-procurement or trade-in-services agreements. The entry of ESA's Ariane booster into the international launch vehicle market broughtan end Much of the competitive part of the market will to NASA's monopoly in providing space trans- consist of private U.S. communications carriers portation services to commercial entities and for- putting up U.S. domestic satellites. INTELSAT, eign governments. Eventually Japan will also be INMARSAT, and a few countries will also pur- able to offer competitive commercial launchserv- chase satellite launching services competitively. ices; still other nations are developing theirown Customers will base their choice on price (includ- means to launch payloads. In some respects, na- ing the cost of financing), the reliability of launch tional launch vehicle programs can be compared and schedule, the relative ease of planning and to national airlines: some are conducted primarily processing payloads, the cost of insurance, and for profit, while others play a role which is clearly the availability of coproduction and other offsets. linked to perceptions of "prestige" and "national As with all large international contracts, political self-image." For these reasons, U.S. competitive considerations will undoubtedly play a role. strategies based on price or superior technology The Administration policy on launch vehicle Acne will not prevent foreign entry into the launch commercialization is ambiguous. On May 16, cervices business. Nations that possess thecom- 1983, President Reagan announced that the U.S. mitment and the minimum economic and tech- Government fully endorsed and would facilitate nical resources necessary to develop launchsys- the commercial operation of ELVs by the private tems will take some share of the total world sector.6 However, the President also stated that market. the Shuttle is the 'primary launch vehicle of the Although there are a number of potentialen- U.S. Government" and that it would continue trants, launch service competition for the next to be available for domestic and foreign commer- decade is likely to be primarily between NASA, cial users. The President's policy encourages "free operating the Shuttle, and Arianespace, S.A., the market competition among the various systems French corporation' which markets the Ariane. and concepts within the U.S. private sector," yet Both systems use technology developed bygov- leaves the Government-subsidized Shuttle as the ernments and compete primarily for the launch main competitor to the private sector's efforts to of large geosynchronous communication satellites. market ELV services.

sIThe Frem h Government owns (through CNES) i4 percent of "The Titan, the Atlas-Centaur and the Delta launch vehicles have Aria.,espar e The balance is owned by European banks andaero- all been the target of efforts to commercialize existing ELVs Other space firms I smaller, private expendable launch vehicles are in development

21 Ch 1 Executive Summary 9

14111111111 N 4

Pi "4, Delta 3920 Atlas- Arlene 2 Titan 34D Space Shuttle USA Centaur ESA/France USA USA USA Photo credit National Aeronautics and Space AdmirhstratIon Current competition in space launching services from Earth to orbit is between these five launchers

Current Shuttle prices were developed to en- when carrying a Government payload. Current courage users to transfer their business from the and projected pricing policies for commercial pay- trusted ELVs, then operated by the Government, loads allow the Shuttle to compete with Ariane's to the Shuttle. According to NASA, launch prices prices while earning some revenue and support- for the 1986-88 period will be based on the "out- ing other important national space goals; however, of-pocket" costs, that is, those costs which a com- these policies decrease the probability that U.S. mercial payload adds to a mission on the assump- private firms will be economically successful in tion that it would otherwise fly partially empty providing competitive launch services.

2 10 International Cooperation and Competition in Civilian Space Activities

The United States can meet the challenge of competitive foreign launch services by favoring either the Shuttle or private ELVs for commercial payloads. If the demand for launch services were to increase dramatically, both kinds of vehicles might successfully offer commercial launch services; but since a dramatic increase seems unlikely in the 1980s, the United States must choose which course it intends to follow. Continuing to favor the Shuttle, by pricing policy or by other means, would reinforce its status as the centerpiece of the U.S. space program and support the pursuit of other lc ng-term ;pace goals such as building space stations, encouraging the development of manufactui ng in space, and investigating new military space technologies. Such a decision would likely increase the cost to the taxpayer of the U.S. space program if it leads to additional subsidized Shuttle flights. In order to spur the growth of an internationally competitive, private ELV industry, it would probably be necessary to limit the Shuttle primarily to Government launches or to increase the price of commercial Shuttle flights substantially. Additional support might be given to fledgling launch companies in the way of low-price access to Government launch facilities, assured launches (e.g., the Air Force's recent desire to purchase 10 ELVs), and a regulatory environment conducive to private investment. Allowing commercial ELV firms to compete profitably might result in the emergence of a thriv- Satellite Communications ing, mature private space transportation industry in the United States by the 1990s. Because Unlike other technologies discussed in this the Ariane and U.S. ELVs have comparableca- report, satellite communications technology has pabilities, such a decision might also allow the passed from Government-dominated investment Government-subsidized Ariane to capture a larg- to commercial status. Civilian satellite commu- er portion of the international launch market than nications is now fully established within the over- it would if it were competing against the subsi- all telecommunications industry. dized Shuttle.' Competition in International Satellite Communication Services 'Relatively powerful trade remedies for unfair foreign competition against U S goods and services are available to the Govern In the United States, increasing numbers of ment Recently, for example, Transpace Carriers, Inc , the com- satellite communications service providers, and pany seeking to commercialize the Delta launcher, applied to the types of services, have forced exam inatior of the President to prohibit Arianespace from marketing its services in the United States and to penalize U S imports from the countries sub- structure of the international satellite communi- sidizing Ananespace, S A , under Section 301 of the Trade Act of cations industry. In particular, several U.S. com- 1974 munications corporations have recently applied

23 Ch. 1Executive Summary 11 for authority from the Federal Communications communications monopolies and accept traffic Commission (FCC) to launch satellites to provide only from designated U.S. carriers in each mar- transatlantic satellite communications services. ket segment. Among the alternatives are: 1) bi- The United States must soon decide whether it lateral negotiations with individual countries with wishes to continue its past support of INTELSAT the short-term objective of access for additional as the only provider of intercontinental satellite U.S. carriers; and 2) longer term multilateral ne- communications facilities" or whether it will per- gotiations on a general GATT9 code on trade-in mit U.S. finns to launch independent and/or com- services. petitive satellites. Preventing U.S. firms from own- All of the foregoing has resulted in a situation ing independent international satellite facilities where U.S. consumers have fewer price-service would close off certain potentially profitable op- options in international than in domestic telecom- portunities to them. But INTELSAT's monopoly munications markets. Moves toward freer inter- status is strongly supported by many other gov- national competition would be consistent with ernments. The United States must therefore weigh domestic steps toward deregulation and with re- the interests of the U.S. private sector against cent U.S. efforts to secure fairer international other foreign policy objectives and existing in- trade. ternational agreements. Demand for Satellite Communications Services Demand for all international telecommunications services is now probably increasing at 10 percent or more per year. Within this, demand for satellite communications services is also increasing rapidly, but whether its growth will continue through the 1990s is highly uncertain. Sat- ellite services will continue to dominate long- distance international communications at least until 1988, when the first transatlantic fiber-optic cable is scheduled for operation. In the 1990s, annual growth in the demand for international satellite communications services could range from zero to a rate equal to the growth of international communications as a whole, depending on the relative shares of satellites and fiber-optic cables. The shares of satellites and cables will depend in turn on consumer preferences, business incen- The Government must also decide how vigor- tives, industry structure, and above all, on regu- ously to negotiate with other countries to advance latory decisions. It is unlikely that the total de- the interests of its consumers and producers in mand for international satellite communications other areas of international trade in satellite will decline during the 1990s. telecommunications services. Regulatory regimes in other countries prevent private carriers from Competition in Satellite Communications competing freely in international communica- Equipment Market tions service markets. Other nations typically re- U.S. satellite communications equipment firms quire that communications reaching their terri- continue to dominate the relatively open inter- tories be handled by their governmental tele- national markets, including the U.S. domestic °Althoug'i [almost] all commercial intercontinental satellite traf- market. However, access by U.S. producers of fic must pass through INTELSAT, regional systrms provide limited international services in the regions they serve 9General Agreement on Tariffs and Trade

21 12 International Cooperation and Competition in Civilian Space Activities

European Earth stations

orth American Earth stations

Central American and Caribbean Earth stations

Middle East Earth South American stations Earth stations

African Earth stations

This is one of three INTELSAT communications satellites stationedover the Atlantic Ocean INTELSAT's two other Atlantic Ocean satellites, Major Path I (325 5' E)and Major Path 2 (341 5' E), have similar configurations

SOURCE National Aeronautics and Space Administration satellites and other satellite communication; ment, and thus multilateral trade remedies are equipment to most industrial country markets is not available. restricted by "buy national- policies on the part of post, telephone, and telegraph agencies (PTTs) Some bilateral progress has recently been made or consortiums of PTTs, who are the primary pur- on opening up the Japanese communications sat- chasers of such equipment. Most governments ellite equipment market to U.S. suppliers, but purposely excluded their PTTs from coverage European markets remain tightly protected. under the GATT code on government procure- Meanwhile, deregulatory and antitrust actionsin 25 Ch. 1 Executive Summary 13 the U.S. domestic long-distance telecommunica- Participation in the International tions market have opened up the U.S. equipment Telecommunication Union market to international competitors. Consequent- Because most of the communications satellites ly, foreign communications equipment manufac- over the Western Hemisphere belong to U.S. pri- turers have greater access to the U.S. market than vate firms or the Government, the United States U.S. sellers have to theirs. has an interest in protecting the current method of allocating slots in this hemisphere's portion of Advanced R&D the geosynchronous orbit. Slots are now regis- Although some level of Government R&D fund- tered by the International Telecommunication ing may be necessary to maintain the competi- Union (ITU) according to a policy of "first-come, tiveness of the U.S. s.,tellite communications first served."* However, many countries of Cen- equipment industry, Congress must determine tral and South America, along with other devel- how much is appropriate. increasing congestion oping countries, espouse the principle of a priori in the geostationary orbit over t:,e Western Hemi- allotments, whereby countries would be assigned sphere for satellites using frequencies in the C- slots in advance of actual need. band (6/4 GHz) and Ku-band (14/12 GHz) may The ITU has called the 1985-88 World Admin- create a market opportunity for Ka-band (30/20 istrative Radio Conference ("Space WARC") to GHz) satellites in the 1990s. This opportunity, consider international arrangements for planning along with potential competition from foreign sat- and implementing the use of communications satellite system manufacturers, has led to the NASA ellites in the geosynchronous orbit. (The particu- Advanced Communications Technology Satellite lar meeting which will do so in 1985 is known (ACTS) program, which would develop a Ka-band as ORB'85.) If the United States faced a limited system. ACTS components would be more ad- allotment of geosynchronous slots, it would be vanced than Ka-band technology under devel- obliged to deploy substitute capacity in the Ka- opment in Europe or Japan;1° some aspects of band or in fiber-optic cables, presumably incur- ACTS technology would also be applicable in sat- ring additional costs." One such cost might be ellites operating in the C- and Ku-bands. the premature obsolescence of certain C- and Ku- Some satellites operating in the Ka-band may band ground equipmeni. If C- and Ku-band slots well be launched in the late 1980s. Hughes Air- had to be rented from countries to which they craft Co. has already applied for permission to had been assigned a priori, such rents would also launch two. As planned, they would also be less be an extra cost to U.S. consumers of satellite advanced than the proposed ACTS system, but communications. Participation in ORB'85 will re- Hughes questions whether an ACTS-type system quire careful planning and coordination among would be commercially viable. Depending on its several U.S. Government agencies and the pri- perception of the threat of subsidized foreign vate sector. An isolated, combative stance in competition and the capabilities of the U.S. pri- ORB'85 on the part of the United States against vate sector to meet it, Congress could: 1) con- a priori planning could lead to difficulties insolv- tinue to fund the full ACTS program through the ing other international telecommunications is- flight testing stage, 2) fund only minimal commu- sues. In particular, ill-considered U.S. actions that nications satellite research, or 3) fund only that disrupted the ITU's decisionmaking processes part of the ACTS research that can be carried out could lead to changes in international arrange- on the ground or in small-scale Shuttle experiments for allocating and assigning frequencies to ments (on the assumption that the private sec- civilian and military communications in general. tor will finance spacecraft tests of commercially viable innovations or that spacecraft tests could [This does not, however, entitle the col 'try or the private firm be postponed until foreign plans were clearer). to retain the geostationary slot indefinitely. See ch. 6.] "[This supposes that the C and Ku bands would be saturated, under given orbital spacing If not, substitute capacity would not '°[Two Ka-band satellites were launched by Japan in 1983 This be required. Large amounts of domestic fiber optic cable capacity year it expects to launch a third ] will be installed in the 1990s, in any case ]

26 14 internatio Jai Cooperation and Competition in Civilian Space Activities

Remote Sensing From Space Land Remote Sensing" The U.S. Landsat system is currently the only civilian land remote sensing system from which worldwide data are available. By 1990, several other countries, including Canada, France, Japan, and perhaps the Soviet Union, expect to deploy competing systems to sense the oceans and the Photo tweet OPOT Moog.CO land. France is treating its Systeme Probetoire Artist's conception of the French SPOT /mote sensing d'Observation de la Terre (SPOT) as a commer- satellite. Property of CNES, France cial enterprise and has organized to market Earth resources data when the system becomes --er- ational in 1985. cialization, several private firms have expressed interest in providing land remote sensing data NASA developed the Landsat system and man- commercially. Phased transfer to private hands, aged it as an R&D project until January 1983; in which a designated private firm uses its com- Landset is now managed by NOAA as a Govern- mercial skills to develop a market for Landsat data, ment op,-rational system. Landsat 5, launched in may result in an overall market for data and serv- March 19bA, is expected to be the last in the Gov- ices adequate to support both a self-sufficient land ernme t's Landsat series. Although NASA and remote sensing business and the entrance of more NOAA will continue advanced research on new than one data seller." sensors and data processing techniques, using the Shuttle to test new methods, the Administration Without sufficient oversight, transfer of land and Congress are now moving to transfer the remote sensing to the private sector would nega- operation of lard remote sensing to the private tively affect our relationships with other nations. sector. In view of the continued importance of the "open skies" principle to the United States, recent leg- Although the small size of the present market islationis continues the policy of nondiscrimina- for Landsat data and consequent high economic tory sales of land remote sensing data. Not to do risk' 3 stand as major impediments to full commer- so would be harmful to many U.S. foreign poli- "See also Remote Sensing and the Private Sector. Issues for Dis- cy interec',.., not just those involving outer space. cussionA Technical Memorandum, OTA-TM-ISC-20 (Washington, DC U S Congress, Office of Technology Assessment, March 1984). t3The current annual market for Landsat data is about $10 mil- "H R. 5155, passed by Congress June 28, 1984, provides for e lion satellite capital costs (for a 5-year lifetime) are likely to be great- phased transfer [Public Law 98-3651. er than $100 million "H.R. 5155 [Public Law 98-3651. 27 Ch. 1Executive Summary 15

Because the first commercial U.S. land remote sensing data supplier will have a near monopoly position, it may also be appropriate to restrict it from entering into the value-added business", until a competitive international remote sensirg industry develops. Developing country buyers may otherwise realistically fear that there may be discriminatory access to data. Lack of dependability of data delivery continues to be the single most important concern of current and potential domestic and international customers of remotely sensed data from space. The lengthy debate over the Landsat program has caused both domestic and foreign customers to limit their investment in land remote sensing hardware and services. Such limitation of investment, in turn, has impeded the development of international markets for Landsat-derived products. Building a substantial market for remote- sensing data will likely require sizable subsidy for a period of years. It will also require system improvements that lead to low-cost data products, and a strong value-added industry. It will be especially important for the Government to avoid competing with value-added firms. Remote sensing data services are part of the information industry; interpretation and integration of these data with other data require extensive use of information technology. Successful commercialization of Earth resources space-related systems is therefore directly dependent on advances in information technology that will make data manipulation, storage, and retrieval simpler and less expensive. In particular, as microcom- Meteorological Satellites (Metsatb) puters become more powerful, and as appropri- Public Law 98-166 prevents the sale or trans- ate computer software is developed, even rela- fer of U.S. metsat systems to private industry and tively unsophisticated users may eventually requires that they be operated in the public in- become purchasers of Earth resources data prod- terest. At present, the commercial value-added uctsif their prices become sufficiently low. market for weather data from satellites is extreme- The pressure for international agreements rely small. However, innovative applications of met- quiring "prior consent" to acquire remotely sat data to agriculture and hydrology demonstrate sensed data from another country will continue that, when properly processed and integrated with to mount as spatial and spectral resolution im- other data, they can sometimes substitute effec- prove. However, if a strong, open, competitive tively for moderate rLsolvtion land remote sens- market for data products and data services de- ing data. Because metsat data have the advan- velops, such pressure is likely to ciminish. tage that they are sensed and delivered twice daily, their use for these purposes may reduce ',Value-added remote sensing corporations process and manipu- the market for higher resolution, Earth resources late remote sensing data to increase their value to the end user data

2s 16 International Cooperation and Competition in Civilian Space Activities

As meteorological satellite systems have grown None of the systems by themselves will produce sophisticated and consequently more compli- the full range of useful ocean data. If all parties cated, costs of building and operating the systems were v:illing to coordinate satellite orbits and to have also grown. In contributing to the continu- supply their data in usable form, NOAA could play ity of international collection and analysis of envi- a crucial role in collecting, organizing, and dis- ronmental data, the United States could follow tributing data from the U.S. Navy and the foreign one of the following policy options: ocean remote sensing systems. Alternatively, at 1. It could continue to operate two civilian some time in the future, it may be desirable to develop an international ocean remote sensing polar orbiters and two geostationary satellites and share data internationally. system. 2. It could operate only one polar orbiter. Re- ducing polar-orbiter service would likely Remote Sbising in Developing Countries save roughly $25 million per year, but would Most developing countries lack the basic infra- lead to reduced service to Hawaii and Alas- structure to use Earth remote sensing data effi- ka as well as to the U.S. military. It would ciently. Because the meteorological terminals are also reduce our ability to share metsat data relatively inexpensive to install and operate, gain- with other nations. ing experience with receiving and processing 3. Alternatively, the United States could join weather data may be the best way for developing with other industrialized nations in a joint countries to build the infrastructure necessary to international system, as the Administration utilize remotely sensed land or ocean data. At the has proposed. The United States could save same time, advances in information technology money on building and operating meteoro- that will make it easier and cheaper to process logical satellites and demonstrate its leader- remotely sensed data will vastly improve the abil- ship in developing space for peaceful purity of the developing countries to use them. By poses by joining with other nations to build continuing to support remote sensing programs and operate such a system. in developing countries, the United States could help these countries develop their own resources and stimulate the international market for land remote sensing data products.

Materials Processing in Space There is no international commercial competition in materials processing in space (Mi S) because commercially significant MPS products have yet to be developed; governments are now responsible for most MPS research activities. Given the Ocean Remote Sensing cost and complexity of research in space, and the NASA's experimental Seasat ocean remote limited understanding of space processing and its sensing satellite demonstrated in 1978 the utility supporting technology, international cooperation of collecting data on properties of the ocean from in MPS research could contribute substantially to space. Although no U.S. civilian system is now long-term U.S. objectives in space. A few firms, foreseen, the U.S. Navy is planning an operation- working with NASA, are studying specific proc- al ocean remote sensing satellite (Navy Remote esses which could result in commercial products. Ocean Sensing SatelliteNROSS) for launch in The primary motivation for studying the prop- 1988 or 1989. NOAA will collect and distribute erties of materials in space is to use a microgravity data from NROSS. Canada, ESA, and Japan all environment for extended periods for scientific expect to have operational civilian ocean remote and, perhaps, commercial applications. Operat- sensing systems in the late 1980s or early 1990s. ing in a near zero-gravity environment may lead

29 Ch. 1Executive Summary 17 to improveme-'ts in controlling process variables understanding of MPS and the high cost of inves- such as temperature, composition, and fluid flow, tigating this technology, international coopera- and afford opportunities for understanding and tive activities would offer the benefit of expand- improving ground-based production methods. ing the base of knowledge while sharing costs. Where economical, it might eventually lead to The United States should encourage internation- manufacturing selected products in space. al cooperation in basic scientific investigations or in areas in which the United States can benefit Should MPS products prove to be commercially from foreign research (e.g., basic biomedical re- viable, the United States would eventually face search and research in solidification). It should market competition from other nations that are proceed cautiously in areas that might have near- also gathering experience in microgravity re- term commercial applications or in which the search." Most foreign MPS activities have been United States holds a clear technological lead conducted by ESA under the primi.lry sponsor- (e.g., continuous flow electrophoresis and con- ship of West Germany. European MPS activities tainerless processing). include an active sounding rocket program, the development and use of Spacelab and related Any decision to increase Government support hardware, and the development of tree reusable for MPS research should probably include in- free-flying platforms, SPAS and EURECA. As a re- creases in funding for international cooperative sult of these activities, Europe will likely become activities such as formal and informal exchanges an important source of information on the be- of scientific personnel and information, and shar- havior of materials in microgravity. Japan has a ing of facilities such as the Shuttle, Spacelab, and small but active sounding rocket program di- European- and Japanese-built hardware Joint re- rected toward MPS research; it has also used the search projects such as the International Micro- Shuttle and Spacelab to carry out experiments. gravity Lab proposed by NASA, which would allow The Soviet Union has done a considerable amount the cooperative use of the Shuttle and foreign MPS of MPS research in its Salyut space station, but hardware, seem to offer significant benefits and this research is unlikely to result in commercial savings to NASA and the U.S. taxpayer. competition for the United States. It is impossible to predict the future size or vi- At present, U.S. commitment to the Shuttle and tality of the markets for MPS products, services, to the development of an MPS science commu- and equipment. Although in the near-term, a few nity, as well as NASA's encouragement of cer- commercial MPS products will be developed, the tain commercial space activities, have given U.S. long-term potential of microgravity research will industry a technological advantage. This advan- not be known until substantially more research tage could diminish over the next decade as for- has been accomplished. The potential for devel- eign access to space becomes more routine and oping a U.S. MPS industry depends on: continued the advantages and limitations of microgravity Government-funded basic research; the availabil- technology become more widely known. ity of reliable, low-cost space transportation; and access to medium- or long-term MPS facilities MPS research and hardware development in Eu- such as free - flyers or a space station. It depends rope and Japan, in addition to wising the poten- most on the discovery of commercially viable tial for future commercial competition, have made MPS products)8 these countries valuable partners for international cooperation. Considering the current limited

"McDonnell Douglas and Johnson & Johnson have been work- "Foreign ability to compete in space mar.Jfacturing will depend ing since 1977 on processes to develop marketable pharmaceuti- strongly on availability of the shuttle to forcign users or on the de- cals They hope to market their first product manufactured in space velopment Jf suitable foreign launch vehicles and carriers. by 1987

A 18 International Cooperation and Competition in Civilian Space Activities

SPACE SCIENCE

Cooperation should be designed so as to keep the management as simple as possible. Cooperation between countries in space science continues to be a major Fe)urce of cultural, politi- Now that ESA and Japan are able to mount ma- cal, and social benefits. Cooperation occurs in a jor interplanetary missions, the terms of interna- variety of modesamong individuals, institutions, tionai cooperation have changed. In the Inter- and governments. The Infrared Astronomical Sat- national Halley Watch, for example, the United ellite (IRAS), by which several major astronomical States has assumed a supportive, rather than a discoveries were made recently, is an excellent leading role. This change from its accustomed role example of the high k el of science that coop- reflects a recognition that the United States need erative ventures can achieve. no longer rely solely on unilateral efforts to maintain momentum in space science generally. The Exploratory missions in astronomy and plane- United States can now anticipate some return on tary science are increasingly complex and expen- our earlier investments in the space science pro- sive. Although political considerations are impor- grams of our cooperative partners. tant, the major driving force behind large cooperative space science projects will continue to be Whatever part the United States assumes in co- the prospect of sharing costs. Yet the complexity operative space science activities, it is extreme- of such missions makes joint management by dif- ly important for the United States to adhere to ferent governments, space agencies, and research its cooperative agreements. As a case in point, institutions difficult. For this reason, international the U.S. decision in 1981 to reduce substantially cooperative missions in which costs are shared its participation in the International Solar Polar

Photo twat:&Woo Ow* Al7800 The European Space Agency's Giotto comet probe Is expected to pass within 100 to 500 kilometers of Halley's Comet. Data from the Soviet Vega probes to Venus, gathered and processed by NASA, will help to guide Giotto to a rendezvous with the comet

31 Ch. 1Executive Summary 19

Mission continues to be named as an example sive in proposing experiments for foreign space- of the difficulties involved in cooperating with the craft. United States. Another competitive aspect of space science, and one which is fairly new, is the competition Competition for cooperative partners on scientific missions. It is difficult to speak of direct competition in The Soviet Union has used such cooperation as a way to branch out from its Intercosmos base space science, at least among Western nations, of Soviet bloc countries, to extend its influence, as every nation's plans are known well in advance and there is little to be gained from duplicated and to acquire needed scientific/technological expertise. The recent flight of an Indian cosmonaut research. (This was part of the reasoning behind aboard the Salyut 7 space station is one exam- the U.S. decision not to send a spacecraft to Hal- ple. The Soviets are continuing an elaborate pro- ley's Comet.) Relative prestige is primarily a function of previous accomplishments and available gram of joint scientific pr- ejects with France. The United States must not overlook this competitive resources. factor with regard to Third World interest in space Space science is also one way in which the science as a means of building the infrastructure United States demonstrates its leadership in space necessary for space applications. In the long run, technology. Although the United States maintains the United States must remain cooperative in a leadership position in space science, as other na- space science in order to remain competitive. tions gain greater experience, the United States (he international market for space science faces increased competition in certain subfields equipment and services is relatively small. Be- of space science from ESA, japan, and the Soviet Union. One way in which the United States can cause the United States has a well-developed infrastructure for supplying this market, it will con- maintain its broad base of knowledge and technology, while minimizing costs, is to continue to tinue to dominate the market for the foreseeable cooperate with other countries, and to be aggres- future.

li.S. CIVILIAN SPACE POLICY Analysis of the issues raised by this assessment The current Administration's space policy com- reveals that two major problems dominate the mittee, the Senior Interagency Group for Space organization and implementation of U.S. civilian (SIG space) reflects this emphasis." Neither the policies toward space: 1) there is no national con- private sector nor several agencies" with long- sensus about long-term goals and objectives in standing responsibilities in the U.S. civilian space space, and 2) the political and economic dimen- program are represented. sion of space activities now exceed the purview of any one Government agency. Observers generally agree that the United States needs to establish new specific civilian space goals. One possible mechanism for encouraging Future Goais and Objectives a national debate over the U.S. future in space 10 maintain focus on the Nation's goals in is the National Commission on Space, as author- space, periodic high-level review and discussion are required. In recent years, the Administration's '9The Senior Interagency Group is composed of representative; examination of space policy has centered in spe- from the Departments of Commerce, Defense, and State, and the cial committees organized within the White House, Central Intelligence Agency, the Joint Chiefs of Staff, the Arms Con- trol and Disarmament Agency, and NASA and has been dominated by military and national "For example, the Departments of Agriculture aild Interior, the security, as well as yearly budgetary, concerns. National Science Foundation, FCC, and AID.

r.. 20 International Cooperation and Competition in Civilian Space Activities

I ized in H.R. 5154.21 A National Commission on ments of international satellite telecommunica- Space could, among other things, provide a pub- tions in isolation from the FCC, or to plan inter- lic forum for analyzing the needs of the Nation national programs in isolation from the Depart- with respect to space. It could also help to de- ment of State. Nor should space policy per se be velop a national consensus on new long-term used to guide the overall planning of operational goals and objectives.22 Government systems. For example, as the long debate over the Landsat program has demonstrated, systems that are expected eventually to provide continuing services should be planned primarily by those who will be expected to provide the technology, and use and pay for services.

Organizing for Sp9.f:e Activities In the past, what this Nation sought to accomplish in space was achieved primarily by NASA Given the widespread and expanding uses of within the broad principles and goals of the 1958 space, the diversity of governmental and private National Aeronautics and Space Act (NAS Act). users, and the increase in international commer- Today, the increase in foreign and commercial cial competition, a commission designed to rec- activities means that other Government agencies ommend future policy should be as diverse and now play a greater role in space. Already, the De- as broadly based as possible, and include mem- partments of Agriculture, Commerce, Interior, bers from the private sector. The Commission and State, and the FCC, in conjunction with the should seek input from all the Government agen- private sector, manage most of the civilian ap- cies with responsibilities in space, but remain in- plications of space technology. Recently the De- dependent of them. In addition to recommend- partment of Transportation (DOT) has been charged ing goals and objectives, the Commission should with promoting and regulating private sector provide guidance for implementing its recom- space transportation systems.23 Strengthening U.S. mendations in the context of other national goals. competition with other space-capable nations, or improving our ability to coop"ate effectively, will It will be important for the Commission to spe- require careful attention to the means of coordi- cify the relationship of new goals and objectives nating the activities of all of the i'ederal agencies to other national goals, and to take account of with an interest in space with each other and with the limitations, as well as the strengths, of space those of the private sector.* policy. Just as satellite communications have become integrated into the telecommunications in- For example, the 1984 fiscal year authorization dustry, so will other space technologies, as they legislation for NASA, H.R. 5154,24 amended the mature, become integral parts of larger, nonspace NAS Act to include a provision directly related industries. They will then gradually become less to private sector activity in space: appropriate objects of space policy, and more ap- The Congress declares that the general wel- propriate objects of policies related to those in- fare of the United States requires that the Na- dustrial sectors they serve. tional Aeronautics and Space Administration It is inappropriate to use space policy (which seek and encourage, to the maximum extent possible, the fullest commercial use of space. provides direction about the future exploration and exploitation of space), for example, to make decisions on international trade in space-related 2)This assignment was made by President Reagan Congress is goods and services in isolation from the U.S. i 3w considering DOT's role in space transportation. [Public Law Trade Representative, decide on the require- 98-575, signed Oct. 30, 1984, now gives DOT regulatory authority over private sector launch activities.] 21Passed by Congress, June 28, 1984 [Public Law 98-361 ] '(The Government must also authorize and supervise private sec- 22For an initial suggested list of such goals and objectives, see tor activities in accordance with international treaties and agree- Cillban Space Stations (Washington, DC U 5 Congress, Office rf ments on space ] Technology Af,,ssment) IOTA-ST.1-241, November 1984 1. 24[Public Law 98-361 ]

33 Ch. 1Executive Summary 21

This provision directs NASA to involve itself in security, political, and economic objectives. Na- the commercial exploitation of space. Yet NASA, tions have cooperated for himanitarian reasons, by itself, is not well-equipped either to choose spe- for example, in the U.S. Advanced Telecommu- cific technologies for commercial exploitation or nications Satellite experiments of the 1970s or the to foster the creation of new space industries. current U.S., Canadian, French, and Soviet SARSAT project. They have also cooperated to obtain Seeking the fullest commercial use of space will technology or resources which would later allow require the direct involvement of those agencies them to compete economically or politically. Ex- versed in domestic commerce and regulation, in- amples of this include ESA's work with the United ternational trade, and foreign affairs. Government States on Spacelab and NASA's cooperative pro- decisions regarding commercial space activities grams involving remote sensing. European com- must above all be responsive to how the actual petition with the United States in launch services markets and industries involved work, and how and remote sensing has helped to establish Europe international competition in space industries re- as an important partner for cooperation with lates to international competition generally. other nations. In order to foster effective coordination, it will If the United States wishes to retain an inter- be important for Congress to designate clearly a national leadership role in the continued explora- lead agency for regulating a particular private section, development, and use of space it must be tor activity. As new specific commercial space technologies mature, agencies other than NASA effective at both cooperation and cc mpetition. A clear understanding of long-term national goals should be given primary responsibility for their and objectives and a workable division of respon- oversight. The recent designation of DOT as the sibilities and coordination among the various Fed- lead agency for private space transportation serv- eral agencies as well as between Government and ices indicates how the responsibilities for oversee- the private sector will therefore be essential. ing commercial space activitie, could be organized in the future. The ability to pursue foreign policy objectives through cooperative space activities is hampered by the fact that no single agency has control over U.S. cooperative activities. Currently, the responsibility for cooperative international civilian space activities is divided among the Department of State, Department of Commerce, Department of Transportation, FCC, and NASA. The conduct of foreign policy is the responsibility of the Depart- ment of State, which has little expertise in space. If the United States wishes to use its civilian space activities to pursue U.S. foreign policy interests more aggressively, it will be important to expand the Department of State's space expertise.

Cooperation and Competition

as Part of Policy Motooffidltammo Owe Agency Cooperation and competition with other na- Artist's view of the European-developed EURECA space carrier being deployed from the U.S. Space tions are not ends in themselves; they are merely Shuttle with the Canadianbuilt remote tools with which to carry out long-term national manipulator arm

34 22 International Cfloneration and Competition in Civilian Space Activities

Moto credit: European Ow* Agency The ESA EXOSAT satellite undergoing tests. EXOSAT has observed a number of Xray emitting sources in the Milky Way galaxy and beyond

3b Chapter 2

ISIBODUCTION

- 4 Contents

Page Foreign Competition 26 Private Sector Space Activities 27 International Cooperation 28 Organization of the Report 29

37 Chapter 2 INTRODUCTION

International cooperation and competition in Because of their interest in maintaining U.S. space science and technology have played im- leadership in space technology, in capturing the portant roles in the U.S. civilian space program economic benefits of commercial space activi- since its inception in 1958. Although the program ties, and in using space technology as an instru- was primarily established to meet a competitive ment of foreign policy, the House Committee on challenge from the Soviet Union, the National Science and Technology and the Joint Economic Aeronautics and Space Act identifies international Committee asked the Office of Technology As- cooperation as a fundamental U.S. goal and sessment (OTA) to prepare this report) The com- declares that "activitiesin space should be mittees requested an assessment of "international devoted to peaceful purposes for the benefit of cooperation and competition in space," that all mankind" (sec. 102a). would "compare the technical status of foreign space systems .. .and investigate ways that U.S. For many years only the United States and space applications and space science programs the Soviet Union had the capacity to build and could be used more effectively to further U.S. launch complex space systems. In the last dec- commercial and toreign policy interests." They ade, the Western European countries and Japan asked OTA to examine U.S. relationships with de- have also succeeded in developing advanced veloping as well as industrialized countries and space systems; in large part they have done this to offer suggestions about how "this country can by assimilating U.S. technology and expertise work together with other nations for mutual ben- through cooperative scientific and commercial efit." ventures with the United States. This study builds upon the OTA report Civil- In the 1980s, advanced foreign capabilities ian Space Policy and Applications.2 That assess- have or will become comparable to those of the ment identified international competition in space United States in virtually every area of civilian technology as a critical issue, described the cur- space technology except manned flight. Foreign rent and projected space programs of other coun- accomplishments now provide new opportuni- tries, and discussed domestic initiatives to make ties for bilateral and multilateral cooperation; they better use of our own space assets. During the also present the challenge of greatly increased course of the current study, OTA also published commercial, political, and military competition. two technical memoranda each of which highlighted important issues of cooperation and com- Significant changes have also occurred in the petition.3 UNISPACE '82: A Context for Interna- U.S. relationship with the developing world. A tional Cooperation and Competition focused on few developing countries, resolved upon using U.S. participation in the second United Nations space technology to promote their economic 'Letter from Congressmen Don Fuqua, Ronnie G. Flippo, Larry growth, have begun to press for the establishment Winn, Jr., and Harold C Hollenbeck of the U S. House of Repre- of international organizations and legal regimes sentatives Committee on Science and Technology to the Honorable with the power to ensure equitable access to Ted Stevens, Chairman, Technology Assessment Board, Mar. 8, 1982, Letter from the Honorable Roger W. Jepsen, vice Chairman, space systems and resources. Such developments joint Economic Committee to the Honorable Ted Stevens, Chair- are often inconsistent with U.S. policies and ob- man, Technology Assessment Board, Mar. 24, 1982. jectives, particularly those designed to encour- 'Civilian Space Policy and Applications (Washington, DC: U.S. Congress, Office of Technology Assessment, OTA-STI-177, June age private competition and investment in space 1982). activities. This has occasioned a reassessment of 3Technical memoranda are issued on specific subjects analyzed the traditional U.S. support for certain coopera- in recent or ongoing OTA projects They are issued at the request of Members of Congress who are engaged in committee legislative tive activities, particularly those sponsored by the actions that are expected to be resolved before OTA completes United Nations or its specialized agencies. its assessment

25 38 26 International Cooperation and Competition in Civilian Space Activities conference on the Exploration and Peaceful Uses of this process on public and private U.S. inter- of Outer Space.4 The conference offered a win- ests. After OTA completed the first draft of the dow through which to view the needs of the de- UNISPACE '82 Technical Memorandum, it held veloping world, the formation of international a workshop to discuss the draft and the issues space policy, the roles that the United States and raised by U.S. participation in international con- its agencies play in this process, and the poten- ferences. tial effect of the process on U.S. public and private interests. Remote Sensing and the Private Commercialization of Remote Sensing: OTA or- Sector: Issues for Discussion investigated the re- ganized two different workshops on this subject. cent proposal to transfer the meteorological and In the first, participants drawn primarily from the land remote sensing satellite systems to the pri- private sector discussed those broad issues im- vate sector.5 Among other things, it discussed the plicit in the transfer of remote sensing systems size of the market, public good aspects of remote related to international trade, use of remotely sensing, U.S. Government (including military and sensed data in foreign policy, public good aspects intelligence) needs for data, and the use of re- of land and meteorological remote sensing, and motely sensed data to further foreign policy ob- finally, national security issues. The second work- jectives. shop, composed solely of participants from the executive agencies, discussed most of the same In order to identify and refine the issues pre- issues from the standpoint of Government poli- sented in this report, as well as the two previously cy and plans. published technical memoranda, OTA convened several workshops that assembled experts from International Trade in Space Equipment: This different subject areas: workshop discussed the applications and effects of current rules on trade in space-related serv- Space Technology and Foreign Policy: UNI- ices, equipment, and products. Additional issues SPACE '82 offered an opportunity to review the discussed included potential Government re- development of international space policy, the sponses to "unfair" practices in space markets, role that the United States and its various agen- the likely evolution of the industrial organization cies play in this process, and the potential effect of the space transportation industry, and the potential effect of deregulation on the international communications industry. 4UNISPACE '82 A Context for International Cooperation and CompetitionA Technical Memorandum (Washington, DC U S OTA is grateful to the workshop participants Congress, Offic? of Technology Assessment, OTA-TM-ISC-26, March 1983), reqi ested by the House Science and Technology Commit- and to the many others who provided informa- tee and the Joint Economic Committee tion or reviewed portions of this draft or of the Remote Sensing and the Private Sector Issues for Discussion drafts of the two technical memoranda. Their A Technical Memorandum (Washington, DC U S Congress, Of- fice of Technology Assessment, (OTA-TM-15C-20, March 1984), re- helpful and timely comments and suggestions quested by the House Science and Technology Committee and the helped to make itpossible to complete this House Government Operations Committee report.

FOREIGN COMPETITION

Having begun in many cases by building com- hicles to launch them. Although no single coun- ponents and subsystems for U.S. and INTELSAT try can yet match the U.S. range of technical satellites, European and Japanese capacities nJW abilities, nor its experience in systems operation, extend to the design and operation of complete foreign technologies are now fully comparable systems for communications, land remote sensin specific areas, such as expendable launch ing, and weather observation, as well as theye- vehicles and satellite ground stations.

39 Ch. 2 Introduction 27

Until recently, the United States benefited from economic growth, political status, and national the space programs of other nations because they security in a world dominated by the two super- provided markets for U.S. goods and services. powers. To obtain the necessary technology and Now, even though the overall market is increas- skills they have targeted specific industries for spe- ing, foreign competition could threaten U.S. firms cial attention, particularly industries where inter- with the loss of significant sales and the country national competition was the ught to be important. as a whole with potential loss of prestige and po- Space technology is a prim, exemplar of this phe- litical influence. Already, technology developed nomenon; it has not only been promoted domes- by the European Space Agency (ESA) supplies a tically through research and engineering pro- large portion of the satellite communications and grams, but also imported from the United States space transportation needs of the European com- via educational and scientific exchanges and munity. In 1985, the French SPOT system is ex- through the activities of U.S. aerospace and com- pected to begin supplying commercial remotely munications firms. sensed data internationally. The Third World mar- In part because of its long-standing position as kets for space technology, once completely dom- the unchallenged leader in space applications inated by U.S. producers, are gradually opening technology, the United States has been slow to to European and Japanese sellers. recognize and respond to foreign challenges. This These advances are part of an overall evolu- report offers a range of policy options which at- tion of European and Japanese expertise in ad- tempt to define appropriate roles for Government vanced technology. Influential opinion sectors in in its task of maintaining technological leadership Europe and Japan believe that they must com- in an increasingly competitive international envi- pete fully in advanced technology, and associ- ronment. ated management skills as a prerequisite for

PRIVATE SECTOR SPACE ACTIVITIES The Carter and Reagan Administrations and hind the evolution and growth of space technol- Congress have encouraged private sector invest- ogy. This preeminent government role, combined ment in space technology. Consequently, in ad- with the political sensitivity of the use of tech- dition to ?xpanding its major role in satellite nologies that by nature transcend national bound- communications, the U.S. private sector would aries, has inhibited the transfer of space technol- like to offer space transportation services. It may ogy to private sector hands. soon be obtaining and selling satellite remote In remote sensing and space transportation, al- sensing data, and has also offered limited expres- though the U.S. Government creates a large part sions of interest in materials processing in space. of the total demand for these services, it is also The U.S. Government attempts to avoid com- a potential competitor to private sector efforts. peting with private commercial activities. How- This report offers policy options which attempt ever, since the development and use of space to resolve the conflict between the Government's technology is a long-term, expensive undertaking responsibilities for encouraging private sector in- and certain specialized government needs can- vestment in space and its responsibilities for main- not always be supplied by the private sector, gov- taining the technological vitality of the Nation. ernments have traditionally been the driver be-

110 28 International Cooperation and Competition in Civilian Space Activities

INTERNATIONAL COOPERATION

International cooperation for peaceful purposes capabilities they become potentially valuable has been a central element of the U.S. civilian partners for cost-constrained U.S. projects. Yet, space program since its inception. Cooperative cooperation in any high-technology venture can activities have taken primarily three forms: 1) result in some transfer of valuable technical bilateral agreements with other industrialized "know-how." As private sector commercial activ- countries, usually with a technological goal; 2) ities increase there will be less Gfwernment in- multilateral agreements in United Nations and centive to cooperate because successful coop- other international forums to develop the legal, eration may lead to a decrease in market share regulatory, or organizational norms for using or create new competitors. space; and 3) assistance projects undertaken by the U.S. Agency foi International Development, The U.S. cooperative relationship with devel- with the help of the National Aeronautics and oping countries is also undergoing a period of significant change. In the past, thUnited States Space Administration (NASA) and the National used the Landsat or the Advanced Telecommuni- Oceanic and Atmospheric Administration (NOAA), cations Satellite (ATS) programs to demonstrate which use space technology to benefit developing nations. how space technology could benefit the developing In recent times, however, the To make up for lack of individual size, turo- Unite-.', States has come under strong criticism pean countries have also developed methods of fr ":;1 developing countries for failing to support cooperating multilaterally in order to pool finan- an agenda dedicated to equal and guaranteed ac- cial and technical resources. The multinational cess to space technology and resources. ESA is coordinating projects in advanced satellite :ommunications, ocean and land remote The dominant dispute over the use and acqui- sensing, and expendable launch vehicles. It is also sition of space technology is between the indus- the lead agency for extensive bilateral agreements trialized and the developing countries. In gen- with the United States in space science and in eral, the developing countries seek to gain greater the des' nd construction of Spacelab, the access to, and control over, the resources of outer mann-c, Ale laboratory. In Japan, the national space and the advanced space technologies of space agency, NASDA, is developing its own fam- the industrialized nations. They do this primarily of launch vehicles (based on technology leased ily by advocating legal and regulatory regimes for from U.S. corporations), as well as advanced space activities in international organizations, communication satellites and ocean remote sens- where they outnumber and can outvote indus- ing systems. Japan also has an active space trialized countries. The developing countries also science program. Much of this work is being pur- promote the establishment of multilaterally funded sued in cooperation with U.S. aerospace and and controlled bodies to transfer know-how and electronics firms as well as with NASA. The So- technology to the Third World. Industrialized viet Union cooperates most actively with allied countries, on the other hand, fear turning over socialist states. More recently, it has developed control to multilateral organizations.In the programs with India and also with France. United States, the ideological emphasis has shifted from a policy of using space for "all man- In the past 25 years, the United States has en- kind," to a desire to encourage the private ex- gaged in hundreds of bilateral and multilateral ploitation of space. Yet private exploitation of cooperative ventures in every area of space tech- space resources assumes acquiescence by other nology. U.S. launchers have orbited complete sat- countries in U.S. goals. Increased private sector ellites and instrument payloads for dozens of activities will require political as well as market countries. As others develop indigenous space accommodation by all countries.

41 Ch 2Introduction 29

ORGANIZATION OF THE REPORT The main body of this report begins with dis- gram, international trade in telecommunications cussions of cooperation and competition in chap- equipment and services, and international facil- ter 3 and chapter 4. These chapters provide the ities regulation. conceptual and institutional context essential to Chapter 7 focuses on remote sensing and the understanding the technology-oriented policy op- technical, political, and economic issues involved tions that appear in the report. The interaction in the operation of this technology. It pays par- between cooperation and competition is dem- ticular attention to the worldwide market for onstrated concretely in each of the following meteorological, land, and ocean remote sensing technology chapters. services and summarizes civilian needs of the Chapter 5 describes the technology and the U.S. Government. The United States is attempt- current issues involved in space transportation. ing to transfer land remote sensing functions (the It discusses commerce in space transportation Landsat system) to the private sector. This chap- equipment and services and the relative merits ter examines the transfer process and explores of their individual needs and products. Shuttle po!icy issues related to it. Because several foreign and Ariane price competition, launch vehicle de- governments are planning to launch remote sens- mand, the role of the private sector and the long- ing systems, this chapter summarizes the attri- term effects of government owned or sponsored butes of these systems and examines the competi- technology are all examined. It also considers the tive challenge the systems pose for the United history and future of cooperation in space trans- States. portation. Chapter 8 examines foreign and U.S. materials Chapter 6 examines international cooperation processing research and assesses the potential for and competition i:1 satellite communications, the the development of marketable products. It also only fully commercialized sector of space tech- discusses competitive foreign services and equip- nology, in the context of the international tele- rnent. The value of pursuing cooperative MPS communications industry as a whole. Internation- programs is discussed in detail, particularly with al satellite communications, which has been reference to basic scientific research. highly structured by regulation in the past, is now Chapter 9 describes current cooperative and an arena in which a deregulated U.S. domestic competitive aspects of space science. It details telecommunications industry is poised to imple- the role of cooperation in reducing costs and ex- ment new technologies in international markets panding possible activities, and discusses the if it can gain access to them. This chapter ana- emergence of competition as a new factor in lyzes how the outcome of technological competi- space science. tion between fiber optic cables and communi- cationsatellites couldaffect the long-term Finally, chapter 10 offers a broad examination demand for satellite communications services and of the cooperative and competitive policy options equipment and how economic, political, and reg- presented in the technology chapters and dis- ulatory factors could affect this competition. It cusses the wider issues posed by U.S. involve- analyzes U.S. policy toward international insti- ment in international civilian space activities. The tutions like INTELSAT and the ITU, NASA's ad- chapter suggests several options for addressing vanced communication satellite research pro- these issues.

4 1 Chapter 3 INTERNATIONAL SPACE COOPERATION

43 Contents

Page Introduction 33 International Cooperative Programs Worldwide 35 United States 35 The Soviet Union 41 European Space Agency (ESA) 43 The United Nations 45 Internatonal Telecommunications Satellite Organization (INTELSAT) 49 International Maritime Satellite Organization (INMARSAT) 50 World Meteorological Organization 51 Issues in Cooperation 52 List of Tables Table No. Page 3-1. NASA Cumulative Statistical Summary Through Jan. 1, 1984 37 3-2. Current Membership of COPUOS 46 List of Figures Figure No Page 3-1. Patterns of Global Governmental Outer Space Activities 34 3-2. U.N. Bodies 54 Chapter 3 INTERNATIONAL SPACE COOPERATION

INTRODUCTION International cooperation in civilian space Political: activities has been a major component of U.S. Promoting international peace and reduc- space policy ever since specific provisions for co- ing tensions through mutual under- operation were included in the 1958 National standing. Aeronautics and Space Act (NAS Act). Later Promoting greater openness and access amendments strengthened the role of interna- to information. tional cooperative agreements in pursuit of scien- Increasing U.S. prestige by giving high in- tific and technical research. Because each suc- ternational visibility to U.S. technical and cessiveadministration and Congress have scientific accomplishments. perceived international cooperation in civilian Affording political access to countries space activities to be beneficial to U.S. interests, where U.S. influence is otherwise weak. U.S. involvement in international cooperation has Economic: stood the test of time and the annual appropria- Promoting economic development in de- tions process. veloped as well as developing nations. In the early days of the Space Age, the United Developing global markets for U.S. space- States played a leading role in establishing the related goods and services. international legal regime for outer space. It was Sharing costs of expensive, long-term also a major force in establishing the multilateral programs. communications organizations, INTELSAT and (to The very success of U.S. international cooper- a lesser extent) INMARSAT, and in making the ative programs has helped intensify international results of remote sensing from space available challenges to U.S. leadership in space science worldwide; in addition, it offered participation and space applications. The pressure comes not in scientific space projects to other countries (see only from other nations competing in space. fig. 3-1). Developing countries, voting in blocs, now chal- Recently, the National Aeronautics and Space lenge U.S. leadership in international organiza- Administration (NAS') opened its manned space tions that deal with space matters. These chal- flight program to other rations by flying foreign lenges raise critical questions about the future of mission specialists on the Shuttle. U.S. cooperative space projects: Cooperative programs in space, managed prin- 1. How can the United States use its participa- cipally by NASA, but also by the National Oceanic tion in international multilateral organiza- and Atmospheric Administration (NOAA) and the tions and meetings on space to promote U.S. Agency for International Development (AID), interests? have supported the following U.S. technological, 2. How can the United States cooperate most political, and economic goals: effectively with the developing countries? 3. On what terms might the United States most Technological: profitably cooperate with the industrialized Affording access to foreign countries for nations? tracking stations, launch sites, and ground receiving stations. This chapter summarizes the history of U.S. in- Expanding research opportunities for U.S. ternational cooperation in civilian space activi- scientists by sharing costs and acquiring/ ties and describes its major accomplishments. It using knowledge from other countries. describes foreign cooperati/e programs and dis- Allocating scarce resources such as the cusses issues arising from an altered international geostationary orbit. outlook with respect to space are discussed.

:23 LINIIII 45 Figure 3.1. Patterns of Global Governmental Outer Space Activities Ch. 3International Space Cooperation 35

INTERNATIONAL COOPERATIVE PROGRAMS WORLDWIDE United States the concern of our Nation that outer space be devoted to peaceful and scientific purposes." Early Legislation Although the Eisenhower Administration and The history of cooperation in the use of outer Congress agreed on dividing space activities be- space for peaceful purposes bears the indelible tween military and civilian agencies and expand- imprint of the U S. Congress. Influential Mem- ing NACA into the National Aeronautics and bers of both houses, including Speaker of the Space Administration, the special congressional House John W. McCormack and Senate Majority space committees made several changes in the Leader Lyndon B. Johnson, recognized as early administration's bill, particularly with regard to as 1957 that a strong national space program of- the need for international cooperation. These ac- fered a basis for international cooperation in tions reflected the testimony of scientists and activities which could extend peaceful pursuits engineers who had been engaged in global proj- on a worldwide frontie- ects of the International Geophysical Year. Ac- On January 15, 1958, Senator Johnson called cording to Senate Resolution 327, Report No. for U.S. leadership in developing the capacity to 1925, 85th Congress, 2nd session, July 24, 1958: explore the space environment. He suggested Particular attention should be paid to preserv- that we invite the scientists of other nations t,, ing and extending the patterns of cooperation work with U.S. scientists on projects to extend which were formed during the International the frontiers of mankind and to find solutions to Geophysical Year. The IGY programs have been the problems facing the world:1 an inspiring example of cooperation between the scientists of 66 nations working through their Our President...has a rare opportunity to own professional organization, the International lead in this labor boldly and forcefully and in the Council of Scientific Unions (ICSU) and its vigorous pursuit of peace; he will find the Na- Special Committee, the CSAGI (Comite Spe- tion undivided in its support . ..it would be ap- cial de l'Annee Geophysique Internationale). propriate and fitting for our Nation to demon- Another pattern of cooperation developed be- strate its initiative before the United Nations by tween scientists and their governments when inviting all member nations to join in this adven- public iunds and facilities were provided for IGY ture into outer space together. The dimensions research projects. Cosmic research and devel- of space dwarf our national differences on Earth. opment can become an important force for Later, on March 5, 1958, President Eisenhower world peace. We must not lose what has thus approved a proposal for dividing control of space far been gained both on the international and activities between the Department of Defense, national levels by scientists working with each which was to retain projects primarily associated other and with their governments. with military requirements, and the National Ad- The Senate also took account of certain techni- visory Committee for Aeronautics (NACA), which cal facts: was to be the nucleus of a new civilian agency. . . .that the orbits of satellites are global in The President's Science Advisory Committee pub- nature and pass over national boundary lines; lished "Introduction to Space" on March 26, tracking stations were needed throughout the 1958, and on April 2, the President sent a special world; and international space cooperation message on "Space Science and Exploration" to could promote peaceful relations among states Congress with a draft proposal for legislation. The and form the bass for avoiding harmful and de- message stated that "a civilian setting for the structive actions in space. (Emphasis OTA.'s.) administration of space functions will emphasize The NAS Act begins with a Declaration of Pol- icy and Purpose: 'Address by Senator Lyndor B Iohnson before a meeting of the Columbia Broadcasting System Affiliates, Shoreham Hotel, Wash- The Congress hereby declares that it is the pol- ington, DC, Ian14, 1958 icy of the United States that activities in space

4 V 36 International Cooperation and Competition in Civilian Space Activities

should be devoted to peaceful purposes for the developing cost-sharing and complementary benefit of all mankind. (Sec. 102 (a).) space programs, The policy declaration provides that: extending international ties among scientific and national communities, and The Administration, under the foreign policy supporting U.S. foreign relations and foreign guidance of the President, may engage in a pro- policy. gram of international cooperation in work done pursuant to this Act, and in the peaceful applica- Cooperative activities have ranged from launch- tion of the results thereof, pursuant to agreeing foreign-built spacecraft on U.S. launchers to ments made by the President with the advice ground-based studies, anal!sis of data, and infor- and consent of the Senate (sec. 205). mation exchanges. They include, for example, Recognizing that not all of NASA's international contributions of experiments or payloads to be arrangements could be in the form of treaties sub- flown in space by NASA, joint projects to develop ject to the advice and consent of the Senate, flight hardware, use of data or lunar samples pro- President Eisenhower, in signing the bill on July vided by NASA missions, training, visits, and joint 29, 1958, stated that while treaties may be made publication of scientific results. In addition, NASA in this field, the section does not preclude "less provides certain services on a reimbursable basis, formal arrangements for cooperation" since including launching satellites and data and track- otherwise the section would "raise substantial ing services (table 3-1). constitutional questions." A later (1975) amend- Cooperative programs and activities involving ment incorporating provisions on Upper Atmos- nations and groups of nations are established by: pheric Research further specified that NASA, 1) agency-to-agency memoranda of understand- under the President's direction and after con- ing (MOUs), 2) agency-to-agency letter agree- sulting the Secretary of State "shall make every ments, or 3) more formal intergovernmental effort to enlist the support and cooperation of agreements. The relative complexity, total shared appropriate scientists and engineers of other cost, and duration of the program or project dic- countries and international organizations."' tate in part the type of arrangement used to establish the cooperative effort. NASA International Program Bilateral arrangements between the United In keeping with the spirit of the 1958 NAS Act, States and one other country are by fa. the most NASA has developed an extensive program of in- common. NASA prefers bilateral activi ies over ternational cooperation which has opened the multilateral ones because they are c..li,Lantially entire range of its space activities to foreign par- less complex and easier to manage.' Because of ticipation. Cooperation by the United States with the complexities inherent in international coop- other nations (who pay their share of the cost of eration by government agencies, the fewer in- a project on a fully proportional basis) contrib- volved the better. Technical and cost difficulties utes to the U.S. space research program and to also arise in the joint development of hardware. broader national objectives by: For this reason, NASA ha_ found that the most stimulating scientific and technical contribu- desirable arrangements involve the development tions from abroad, of separate spacecraft or separate major compo- enlarging the potential for developing the nents. In such missions the management and state of the art, technical interactions can be kept simple. Joint providing access to foreign areas useful for ventures with the European Space Agency (ESA) data collection during space, flights, tend to have some of the complexity of multina- enhancing satellite experiments through foreign ground-support programs, JUNISPACE '82. A Context for Cooperation and Competition A Technical Memorandum (Washington, DC: U.S. Congress, Of- fice of Technology Assessment, OTA-TM-ISC-26, March 1983), app. B (prepared by NASA) /International Aspects of the National Aeronautics and Space Act 'See, for example: Working Group Report on Space Science, in of 1958, as amended (72 Stat 426) Global Space Activates. An AIM Assessment, 1981, pp. 52-53.

48 Ch 3International Space Cooperation 37

Table 3.1.NASA Cumulative Statistical Summary Through Jan. 1, 1984

Number projects/ Number of countries/investigations/actions international completed or in Cooperative arrangements organizations progress as of 1/1/84 Cooperative spacecraft projects 8 38 Experiments on NASA Missions: Experiments with foreign principal investigators 14 73 U.S. experiments with foreign co-investigators

or team members ...... 11 56 U.S. experiments on foreign spacecraft 3 14 Cooperative sounding rocket projects. 22 1,774a Joint development projects 5 9 Cooperative ground-based projects Remote sensing 53 163 Communication satellite 51 (27)b 19 Meteorological satellite 44 (122)c 11 Geodynamics 43 20 Space plasma 38 10 Atmospheric study ...... 14 11 Support of manned space flights .... 21 2 Solar system exploration ...... 8 10 Solar terrestrial and astrophysics .. . .. 25 11 Cooperative balloon and airbrone projects Balloon flights 9 14 Airborne observations 12 17 International solar energy projects .. .. 24 9 Cooperative aeronautical projects ... . 5 40

U S./U.S.S.R. coordinated space projects . . 1 9 U S./China space projects ...... 1 5 Scientific and technical information exchanges 70 3 'Number of actual launches bAIDSAT Demonstrations CART stations SOURCE National Aeronautics and Space Administration tional ventures (although they are considered by 1976. Canada built the satellite at its Com- NASA to be bilateral), since ESA represents a munications Research Center (CRC), using multinational consortium and is subject to more special hardware supplied by the United complex internal political pressures than a na- States, which enabled the CTS to transmit at tional agency would be. high power levels to small terminals. NASA launched the satellite and shared operations Some examples of major cooperative programs with Canada. illustrate the breadth of the U.S. international space program:5 Foreign experiments on NASA missions include, for example, an investigation of com- Cooperative space projects involve cooper- posite materials processing in space con- ation between the United States and other ducted by the Japanese National Research nations to develop, launch, and operate Institute for Metals in 1973 aboard the U.S. communications satellites, scientific satel- Skylab. The University of Bern, Switzerland, lites, and Earth sensing satellites. A typical mounted a series of experiments on U.S. example is the Communications Technology manned missions between 1969 and 1973 Satellite (CTS), a joint effort with Canada in to measure the composition of solar wind. SA complete list of NASA's cooperative programs can be found The Netherlands' Delft Technical Institute in 25 Years of NASA International Programs, NASA, January 1983 built a telescope to measure cosmic ray elec-

4J 38 International Cooperation and Competition in Civilian Space Activities

Photocredit National Aeronautics and Space Administration Launched from Shuttle Challenger during flight 41-C (April 1984), the Long-Duration Exposure Facility (LDEF) is above Flonda. The device holds some 50 scientific experiments representing 194 investigators from around the world.

trons, which it mounted on NASA's fifth Or- biting Geophysical Observatory. U.S. experiments on foreign spacecraft are also supported, such as a NASA experiment to study aspects of spacecraft behavior on a European Space Agency flight. Cooperation on sounding rocket projects Photo credit: National Agonistic* and Spar* Administration has involved scientific research with many The Active Magnetospheric Particle Tracer Explorer (AMPTE) spacecraft is being encapsulated atop the nations in all regions of the world. The pur- Delta launch vehicle in preparation for launch (1984). pose of these flights is usually upper-atmos- AMPTE involves the United States, the UMW! phere research, since sounding rockets follow Kingdom, and the Federal Republic of Germany a suborbital trajectory. An example is a series of flights in 1980 on NASA rockets carrying Cooperative ground-based projects cover a German and Norwegian experiments to stuay wide spectrum of cooperative research and energetic process in the upper atmosphere. data analysis in such fields as remote sens- Foreign groun .dtions are evidence of the ing, communications, meteorology, and widespread use of land and meteorological geodynamics. These often involve a com- remote sensing. Ten foreign Landsat receiv- bination of ground measurements with asso- ing, processing, and data distribution facil- ciated satellite data received at foreign ities now exist around the world. Some 125 stations. countries own meteorological satellite re- Cooperative educational projects.' The Sat- ceiving stations. Remote sensing projects ellite Instructional Television Experiment have resulted in research on the oceans, (SITE) was a cooperative effort (1975-76) be- winds, waves, snow cover, and snow melt- tween NASA, which furnished the ATS-6 ing. When nations report their national space communications satellite, and the Indian activities to the United Nations, the most fre- Space Research Organization, which devel- quent (and often the only) entry is a remote sensing agreement on the use of Landsat data and derived information products to solve 6"United States Civilian Space Programs 1954-1978," report prepared by Congressional Research Service for House Subcommit- resource problems. tee on Space

50 Ch. 3International Space Cooperation 39

oped programs on agriculture and family a low level of information exchange in space planning to broadcast to approximately medicine and biology. 2,400 Indian villages. In 1976 the Agency for Recently, the climate in Congress and the International Development (AID) and NASA Administration for renewed cooperation in sent films and discussions on remote sens- space has improved. In the spring of 1984, ing via the ATS-6 experimental communica- members of the Senate Committee on For- tions satellite to 27 participating developing eign Relations expressed interest in renew- countries. (Later the ATS-6 was moved to lo- ing and expanding U.S. cooperation with the cations above the Western Hemisphere for Soviets. In July, the President proposed a further cooperative demonstrations.) joint U.S./Soviet mission to demonstrate the U.S./U.S.S.R. cooperation.* These projects feasibility of space rescue. Such a mission date from 1962, when NASA and the U.S.S.R. could serve as the cornerstone to increased Academy of Sciences cooperated on mete- cooperation in space with the Soviets. These orological studies. Between 1962 and 1964 interests culminated in a bill signed by Presi- there were experiments on telecommunica- dent Reagan on October 30, 1984 (Public tions, and from 1962 to 1973 on geomag- Law 98-562). Testimony presented at hear- netic mapping. ings on September 13, 1984 concerning the These early joint activities were based on Senate bill indicated cooperation with the agreements between NASA and the Soviet Soviets in several scientific disciplines related Academy of Sciences. In 1972, however, an to space would be fruitful.8 intergovernmental agreement' was reached The United States and the Soviet Union are between the Nixon Administration and the both cooperating with France and Canada Soviet Government. One outcome of this in the COSPAS/SARSAT search and rescue agreement was the Apollo-Soyuz Test Proj- program. (See app. A.) The United States is ect (ASTP), which culminated in 1975 in the also cooperating with the Soviet Union, only joint manned space flight between the through ESA, on the International Halley two countries. Other areas of cooperation Watch (see ch. 9). established under the agreement included The United States and China are cooperat- meteorology, the natural environment, nearing on a communications broadcast satellite Earth space, the Moon and planets, and system, a Landsat ground receiving station, space biology and medicine. After the highly and aeronautical technology. The Shanghai successful ASTP mission, the agreement was Observatory of the Chinese Academy of Sci- renewed by President Carter in 1977. ence is interested in cooperating with NASA The centerpiece of the renewed agree- on measuring Earth's crustal movements. ment was the commitment to plan for a joint NASA's international program also e 'com- Salyut/Shuttle program. However, in 1978 passes resident research associateships for sen- and 1979 a series of events on the interna- ior foreign scientists, international felllowships, tional political scene led to a progressive technical training for foreign scientific and tech- hardening in East-West relations. This trend nical personnel, and hosting foreign officials and culminated with the Soviet invasion of Af- scientists who visit NASA's facilities. ghanistan in late 1979 and the imposition of martial law in Poland. As part o' the U.S. °President Reagan discussed the subject in a meeting with Sovi- sanctions against the Soviet Union, the May et representatives in June 1984, and in a speech on June 27. House 1977 agreement was allowed to expire with- Resolution 536 and the companion Senate Resolution 236 proposed out renewal in 1982. The only remnant was the renewal of cooperation See Issues in U S /Soviet Cooperation in Space (U 5 Congress, Office of Technology Assessment, Tech- nical Memorandum, in press); statement of Dr Bernard Burke, be- *See Issues in U S -Soviet Cooperation in Space (Washington, fore the Senate Committee on Foreign Relations, Sept 13, 1984; DC U 5 Congress, Office of Technology Assessment, in press), for "President Signs Bill Aimed at Restoring Cooperation in Space," a comprehensive discussion of U 5 /Soviet cooperation. Aviation Week and Space Technology, Nov 5, 1984, p. 16, "U 5. 'The "1972 Intergovernmental Agreement on Cooperation in the Plans Soviet Talks on Joint Manned Mission," Aviation Week and Exploration and Use of Outer Space for Peaceful Purposes Space Technology, Jan7, 1985, pp 16-18

51 40 International Cooperation and Competition in Civilian Space Activities

The U.S. capacity for international cooperative the absence of such sharing and cooperation, programs is dependent or a strong U.S. national might not be initiated.", (Alsosee the more program; if civilian space budgets become over- detailed discussion of IHW in ch. 9.) constrained, it becomes difficult to budget for the Cooperation in building space infrastructure is U.S. (NASA) share of planned joint international perhaps the most important cooperative activity projects. In one case the United States hadto that the United States will embark back out of a major planned project because of upon this decade. It is keeping interested governments well in- budgetary constraints: formed of U.S. developments." Japan and ESA have also funded their own studies ofpermanent .. NASA's success in international participa- stations in space.12 Recently, Canada and Japan tion became a political liability in 1980-81 when, in order to absorb its share of the Administra- have signed agreements with the United States entering upon phase B (the preliminary design tion's budget reductions, NASA found itneces- sary to reduce funding in one of its major science phase) of the space station planning.* ESA isex- missions. The problem was that all three of its pected to sign a similar agreement in June 1985. major science projects had significant interna- Most future NASA international cooperation tional participation: Space Telescope (with ESA), will raise a question as to whether bilateral Galileo/Jupiter orbiter probe (West Germany) ar- and the International Solar Polar Mission (ESA). rangements can be emphasized as they have in the past. As shown by examples of multilateral Because of the high cost of this internationalpar- ticipation in space science, NASA, for the first cooperation in science such as the International time in its history, had to step back from an in- Halley Watch, and on aneven greater scale by ternational commitment. NASA terminated de- international organizations governing satellite velopment of the U.S. satellite for the Interna- communications (i.e., INTELSAT and INMARSAT), tional Solar Polar Mission. The project has been multilateral cooperative efforts are manageable subsequently restructured andnow includes and may still be appropriate for certain technol- only a single satellite built by Europe, butto be ogies (e.g., navigation and search and rescue) in launched by NASA on thespace Shuttle.9 this era of emerging commercial competition. Pri- Budget stringency has limited some of NASA's marily because of the network of intergovern- projects, but at the same time it has ledto a dif- mental cooperation required, such technologies ferent form of cooperation, relyingon the newly might not be implemented without multilateral developed capacities of other nations. cooperation.

A prime example is the upcoming return of Other U.S. Cooperative Halley's Comet. After reviewing its options, the Programs in Space United States decided not to mounta mission to Halley's Comet, while ESA, the Soviet Union, U.S. AGENCY FOR INTERNATIONAL and Japan all decided to develop encountermis- DEVELOPMENT (AID) sions. However, in order to provide important data and assure that U.S. scientists and the world AID has over the years utilizednew technol- scientific community would be able to fullypar- ogy to support rural health, agriculture, and edu- ticipate in this historic event, NASA organized cation programs in the Third World. In the early an International Halley Watch (IHW) program. 1970s, immediately following itsuse of educa- IHW is an international network of ground- tional television in El Salvador and the Ivory based observatories which will provide signifi- Coast, AID examined the potential of satellites cant scientific and ephemeris [positional) data important for assisting the three Halleyen- '0UNISPACE '82, op cit, app B. counter missions.. . By sharing leadership in "Aviation Week and Space Technology, Feb. 13, 1984 exploring the heavens with other qualified )2For a thorough discussion of possible internationalcooperation in space stations, see Civilian Space Stations and the U.S, Future space-faring nations, NASA stretches itsown rein Space (Washington, DC. U.S Congress, Office of Technology sources and is free to pursue projects which, in Assessment, OTA-5TI-241, November 1984). `See Harry R Marshall, Jr , "U.S. Space Programs Cooperation and Competition From Europe," Current Policy, No 695, U S. State "ITNISPACE '81,op cit, app B Department, May 1985.

52 Ch. 3 International Space Cooperation 41 for delivery of services to remote, isolated, and tutions; and financial support for education in rural populations. It gave particular attention to U.S. universities, on-the-job training, and crea- the public service projects funded by NASA tion of national and regional remote sensing Goddard using the ATS/1 and the ATS/3 space- centers. Centers have been established in Nairobi, craft. Providing very high frequency (VHF) voice Kenya; Ouagadougou, Upper Volta; and channels, the spacecraft were used in the State Bangkok, Thailand. (See table 7A-1 in app. 7A.) of Alaska Medical Network project and in the Other U.S. Government agencies have also as- Peace-Sat Network in the Central Pacific oper- sisted AID in providing foreign nations with Earth ated by the University of Hawaii. resources remote sensing information. The U.S. Preliminary project prototype work by AID was Geological Survey (of the Department of the In- started in the mid-1970s using ATS/6 in the Bra- terior) has sponsored numerous international zilian SACI13 project. AID also sponsored sym- remote sensing training programs at the EROS posia for key Third World administrators to help data center in Sioux Falls, SD, and in many for- them ascertain through "hands on" experience eign countries, all in support of the Landsat pro- what indigenous needs might be met by apply- gram. NASA provided technical support in the ing lessons learned from the ATS/-1-3-6 demon- form of hardware, personnel, and computer strations. They studied the use of various tech- software. nology mixes(i.e.,voice, slow-scan video, two-way audio interactions), and examined the The Soviet Union variety of educational materials produced for parents, students, teachers, and administrators. Like the United States, the Soviet Union has long recognized the value of international coop- The results of these symposia prompted AID eration in space activities. Since the early 1960s to fund a multinational 27-country demonstration the Soviet Union has stated its commitment in project in 1976 called AID/SAT, an immediate principle to such cooperation, but it was not until follow-on to the highly successful ATS/6 India Sat- the 1970s that it began to practice what it pro- ellite Television Instruction Experiment (SITE) fessedat least with a few partners.t5 The most project. The AID/SAT project, simple in format dramatic Soviet-U.S. cooperative activity was the but effective in its impact on the leadership of Apollo-Soyuz Test Program, but the two coun- the participating nations," led eventually to AID's tries engaged in a variety of other space science current University of West Indies project and its and remote sensing projects in the 1970s. More Rural Satellite Program. AID is now funding sat- recently, the Soviet Union is cooperating with ellite programs in Peru, The Philippines, and In- France, the United States, and Canada in the SARSAT/COSPAS project for locating lost ships The Department of State is responsible for co- and planes by satellite-relayed radio beacon (see ordinating the diplomacy and poiicies of coop- app. A). erative land remote sensing programs to assure The Soviets have carried out several space sci- consistent development of the international ence missions with France and have given con- aspects of the Landsat program. AID has sup- siderable assistance to the Indian space program. ported and encourages remote sensing activities They are active participants in multilateral orga- in developing countries by providing U.S. ex- nizations: governmental, such as the U.N. Com- perts,training, and demonstrations;project mittee on the Peaceful Uses of Outer Space grants; financial and technical support for coop- (COPUOS); and nongovernmental, such as the erative programs with U.S. industries and insti-

' '"SACI USAID, Satellite Technology Demonstration, 1974-75," '5For a detailed description of overall Soviet international coop- Towards International Tele-education (Boulder, CO Westview eration in space, see Joseph Whelan, "Soviet Attitude Toward In- Press, 1984), p 115 ternational Cooperation Space" in U.S Congress, Senate Committee "See Civilian Space Policy and Applications (Washington, DC on Commerce, Science, and Transportation Soviet Space Programs: U S Congress, Office of Technology Assessment, OTA-STI.177, June 1976-80, Part 1 Committee Print (Washington, DC. U.S, Govern- 1982), p 208 ment Printing Office, December 1982), pp 205-305

53 42 International Cooperation and Competition in Civilian Space Activities

INTELSAT Earth stations, which are designed to work with fixed geosynchronous satellites, to make use of the moving Molniyas. In recent years, however, the Soviet Union has begun to orbit geosynchronous Statsionar satellites which are more accessible to global users. As their international communications needs 40 have grown, the Soviet Union, Cuba, and Ro- mania (to be followed soon by Poland) have also begun to use INTELSAT through Earth stations on Photo credit' National Aeronautics and Space Administration their own territories. Increasing de facto integra- Photu of the Soviet Soyuz spacecraft taken from the tion of global satellite communications appears Apollo spacecraft during the joint U.S.-U.S.S.R. Apollo Soyuz Test Project in 1975. to be occurring even in the absence of formal agreements., 8

International Astronautical Federation. However Intercosmos their greatest cooperative activity has taken place within the confines of the Soviet-led Intersput- Most Soviet joint and cooperative projects have nik and Intercosmos programs. been conducted with allied socialist states. In 1967, the Intercosmos program was founded to Intersputnik coordinate activities among the Soviet Union, its East European allies, and other Communist states The Soviet Union and its allies were reluctant such as Mongolia, Cuba, and more recently Viet- to join INTELSAT when it was founded in 1964. nam. Several scientific satellites have been flown, The Soviet objected to U.S./COMSAT manage- using instruments designed by member-states ment, to the use of U.S. technology, and to the under the overall direction of the Soviet Union. system of weighted voting whereby influence was Instruments and experiments, such as an East determined by a country's percentage ofuse of German multispectral camera built by Carl Zeiss the system. (Soviet need was for only 2 to 3 per- Jena, have also flown on the Salyut series; many cent of global international traffic, compared v ith of these were associated with the flights of guest the United States' 50 to 60 percent.) In 1968, the cosmonauts from participating states. To date, Soviet Union and eight other socialist states (Po- cosmonauts from Czechoslovakia, Poland, East land, Czechoslovakia, East Germany, Hungary, Germany, Bulgaria, Hungary, Romania, Mongol- Romania, Bulgaria, Mongolia, and Cuba) pro- ia, Vietnam, Cuba and, most recently, France and posed an alternative system, which in 1971 was India, have been trained in the Soviet Union and formally agreed to and called Intersputnik. Al- spent time on board Salyut stations. The purpose though its services are open for any state to use, of Intercosmos seems to be largely political; the few other countries have joined.16 There is rela- Soviets thoroughly orchestrate these activities, tively little commercial or private traffic between and emphasize propaganda. most Intersputnik members and the rest of the world. Since the Intersputnik network was initially Intercosmos projects are designed and man- based on use of the nongeosynchronous Molniya aged very differently from U.S. cooperative proj- satellites," it was difficult and expensive for ects. The experiments and guest cosmonauts of member countries are invited, free of charge, "Syna, Vietnam, and Laos joined for both political and technical reasons onto Soviet spacecraft on a nearly rotating basis. "The Molniya communications spacecraft follow a highly ellip- However, it should be noted that this approach tical orbit (40,000 km by 500 km) that allows them to linger for differs from that of the United States toward its several hours over the northern latitude of the Soviet Union and spend very little time at southern latitudes To provide continuous communications coverage, a total of 12 satellites have been em- "See Nicholas Matte, Aerospace Law. TelecommunicaPons Sat- ployed Although the Soviet Union is now beginning to deploy ellites, prepared by the Centre for Research of Air and Space Law, geostationary satellites as well, the Molniya satellites continue to McGill University, for the Social Sciences and Humanities Research provide most Soviet domestic and international services Council of Canada, 1980, pp. 118-123. Ch. 3International Space Cooperation 43 allies only in degree and tone. Both nations are space industries in a better position to compete well aware of the manifold benefits of coopera- with U.S. industries. At the same time, ESA has tion. A lengthy retrospective article on the sub- proven to be a valuable partner for the United ject by a former cosmonaut expressed it in the States in a variety of cooperative progra..,s, not following way: the least of which has been the development of Spacelab for the space Shuttle. .. . spaceexploration requires considerable allocations. Quite often many costly space projects ESA was established on May 31, 1975, by com- are t "yond the means of individual states and bining two institutions: the European Space Re- derr. ,nd the cooperation of a number of coun- search Organization (ERSO) (which had been in tries ... Nowit is becoming important to create operation since March 20, 1964) and the Euro- space vehicles through the joint efforts of vari- pean Launcher Development Organization (ELDO) ous states and use them for peaceful scientific (dating from March 29, 1962). The establishment and practical purposes.19 of ESRO for space research and ELDO for launch- Remote Sensing ing satellites resulted f.om a desire on the part of Western Europe to a :hieve space capabilities The Soviet Union has also developed remote independently of the United States and the sensing systems for civilian as well as military pur- U.S.S.R. The institution al separation of space re- r. -,ses, Perhaps the most ambitious civilian-ori- search from the launch.ng of satellites proved in- ented remote sensing work has been done on efficient, however, and after 15 years of inter- manned missions, particularly aboard Salyut 6. cooperative effort these space functions were Some 50,000 photographs were taken using the merged into ESA.2° large East German MKF-6m multispectral camera, and some of the data obtained has been shared Eleven. European states are members: Belgium, with allied and developing countries, such as Denmark, the Federal Republic of Germany, Cuba, Vietr ...-n, Morocco, and Angola. France, Ireland, Italy, The Netherlands, Spain, Sweden, Switzerland, and the United Kingdom. As a member of the World Meteorological Or- In addition, Austria is an assoCate member; Nor- ganization, the Soviet Union has distributed way has observer status; and Canada has signed weather photos from its Meteor-series meteoro- 1 memorandum of association with ESA. The logical satellites since 1966. Meteor satellites have 1984 budget is about $850 million (compared carried a variety of experimental sensors includ- with NASA's $7.3 billion) and the staff numbers ing, rec,ntly, advanced Earth resources instru- about ,400 persons, many of whom are highly mentation. In July 1980, the Soviet Union launched accomplished experts in space science and tech- a prototype remote sensing satelliteith three nology. 21 experime-Jal multispectral sensors providing grot:nd re._ :ution up to 30 m. They have offered ESA coordinates the national programs of its members, developing missions in remote sens- to share data from this satellite with other countries. "ELDO and ESRO are described and analyzed in "International European Space Agency (ESA) Cooperation and Organization for Outer Space," staff report edited by Eilene Galloway for the Senate Committee on Aeronautical and One of the most successful examples of inter- Space Sciences, senate Document No 56, 89th Cong., 1st sess., Aug 12, 1965 See Index, p 564, "International Cooperation in national cooperation in space is the European Outer Space A Symposium," edited by Eilene Galloway for the Space Agency, whose members devote anywhere Senate Committee on Aeronautical and `.,pace Sciences, Senate from a third (Fiance) to nearly all(United Document No 92-57 92d Cong., 1st sess., Dec 9, 1971; M. G. Bourely, "The Legal Status of the European Space Agency," Pro- Kingdom) of their national space budgets to joint ceedings of the International Institute et Space Law published by projects. In part, this organization was created the American Institute of Aeronautics and Astronautics, 1633 Broad. to pool European expertise and place European way, New York, NY 10019, 23d Colloquium, Tokyo, Japan; M. G. Bourely (Legal A:visor to ESA). "Institutioni I Arrangements for Space Cooperatir,-1 in Europe," in the 24th colloquium volume for '9V Sevastyanov and A Ursul, "Cosmonautics and Social De- Rome, Italy, September 1981 velopment," International Affairs, No 11, November 1977, pp "European Space Agency in U N. dociment A/COBNF.101/BP/ 76-77 10, Ian 30, 1981, pp. 34-40.

53 44 International Cooperation and Competition in Civilian Space Activities

4.'17 '1744, ESA has also developed major cooperative programs with the United States on the basis of memoranda of understanding with NASA (i.e., agency-to-agency agreements). The U.S. Space Shuttle has orbited the ESA-built Spacelab,a iu,able laboratory for manned or unmannedex- periments in life sciences, materials processing, etc. NASA and ESA are also cooperating on building t'le Space Telescope which will oe launched in 185 by the Shuttle. ESA has not cooperated formally with Japan. It is cooperating with them on the missions to Comet Halley. 'Ithough only an observer at meetings of the united Nations Committee on the Peaceful Uses of Outer Space (COPUOS), ESA has developed stronger ways of participating with the United Na- tions through representation by its member states. As an international intergovernmental organization, ESA has rights and "bligations under three space treaties (assistance to astronauts and return of space objects, liability for damage, and registration of space objects). The 1967 Treaty on Outer Space applies only to sovereign states, but the other agreements have provisions which have been extended to ESA by legal actions taken by its member states. (See the discussion of these treaties in the following section.) ESA has an International Relations Advisory Committee which reports directly to the ESA council and coordinates national positions on issues before COPUOS. The Committee plays a considerable role in the preparation of ESA members for International Telecom: ,unication Union (ITU) conferences. ESA experts can advise its members concerning positions to take on space issues before COPUOS. The association of Can- Ada with ESA can result in even stronger repre- ing, telecommunications, and space science, in sentation of any position ESA may decide to addition to the Ariane launcher, whichcan place e ;pouse." satellites in geostationary orbit. Because of the relatively limited budget, cooperative ventures are quite important to ESA as a means of broadening the basic agenda of missions. Joint ventures "See Roy Gibson, "Internalional Regional Role. Focus on the European Space Agency" presented at the University of Mississippi with individual memt' .r countries havingan in- Law Center at a conference on Law and Security in Outer Space terest in specific areas (e.g., Germany in materials held by the Standing Committee on Law and National Security and plc essing, or the U.K. in astronomy) are the the International Law Section of the American Bar Association, Uni- versity of Mississippi, May 21-22, 1982. See also Annual Reports most prominent mechanism. of ESA, 8-10, rue Mano-Nikis, 75738 Paris, Cedex 15, France

56 Ch. 3International Space Cooperation 45

INTERNATIONAL ORGANIZATIONS The United Nations outer space would be used exclusively for peaceful and scientific purposes. The Committee on the Peaceful Uses of Outer Space With the launch of Sputnik 1 on October 4, 1957, came a proliferation of statements and The first meeting of the United Nations Com- resolutions, including the following phrase, which mittee on the Peaceful Uses of Outer Space the Soviet representative proposed be included (COPUOS) was held on November 27, 1961, sev- in the provisional agenda of the 13th session of eral years after the initial efforts had been made the U.N. General Assembly: to establish a means for dealing with space issues. The Committee itself was a direct outgrowth of The banning of the use of cosmic space for controversy over the militarization of space. The military purposes, the elimination of foreign mil- question of disarmament had prompted the U.S. itary bases on the territory c4 other countries, and international co-operation in the study of delegation to the U.N., in January 1957, to make cosmic space. the following statement to the First Committee of the General Assembly (Political and Security The reaction of the United States to this Soviet Affairs): p.oposal was to cay that the elimination of de- Cense bases, originally established and subse- Scientists in many nations are now proceeding quently maintained by the mutua; consent of the with efforts to propel objects through outer nations concerned, could not be characterized space and to travel in the distant areas beyond the earth's atmospheric envelope. The scope of as "foreign" nor extracted as a price for interna- these programs is variously indicated in the tional cooperation in the peaceful uses of the new terms "Earth satellite," "intercontinental mis- environment of outer space. siles," "long -range unmanned weapo-is" and Henry Cabot Lodge, Permanent Representative "space platforms." No one can now predict with of the United States to the U.N., attached to his certainty what will develop from man's excur- sion into this new field. But it is clear that if this letter to the Secretary General a resolution spon- advance into the unknown is to be a blessing sored by 20 nations which set out the need for rather than a curse the efforts of all nations in what ultimately became the Committee on the this field need to be brought within the purview Peaceful Uses of Outer Space (table 3-2).24 of a reliable armaments control system. The The General Assembly resolution 1348 (XIII) United States proposes that the first step toward the objective of assuring that future develop- December 13, 1958, authorized an "Ad Hoc ments in outer space would be devoted exclu- Committee" on the Peaceful Uses of Outer sively to peace' ul and scientific purposes would Space. The Soviets, Czechoslovakia, Poland, In- be to bring the testing of such objects under india, and the United Arab Republicall of which ternational inspection and participation. In this had been named to the Committeedid not par- matter, as in other matters, the',1ted States is ticipate, although they were careful to attend ready to participate in firm, balanced, reliable each subsequent meeting. systems of control." The ad hoc committee finished its work on June This was probably the first mention of "Earth 25, 1959, and submitted its report to the Gen- satellites" in U.N. debate. In the same year, Can- eral Assembly on July 14, 19:Q Almost 21/2 years ada, France, and the United Kingdom had also suggested that a subcommittee of the Commit- 'During the following months, Sept 2Nov. 18, 1958, the debate tee on Disarmament establish a technical com- on the proposed U N management unearthed a number of issues mittee to study the possibilities for an inspection of concern, not the least being questions of the sovereign rights system which ensire that objects sent through of airspace, common heritage (then called res communis ommum rr of all mankind), international training and an international space centerAll of the foregoing were major issues at the "U S statement to First Cerrin..tt.e, Political and Security Affairs, UNISPACE '82 conference in Vienna and must are far from being U.N. General Assembly, la 'wary 1957 resolved.

5 46 International Cooperation and Competition in Civilian Spare Activities

Table 3.2.Current Membership of COPUOSt Other Celestial Bodies (1967).26 This is the Albania Kenya principal agreement on outer space. It holds Argentina Lebanon that outer space, the Moon, and other celes- Australia Mexico tial bodies are not subject to national appro- Austria Mongolia Belgium Morocco priation. In addition, among other things, the Benin Netherlands treaty defines the principles for the explora- Brazil Niger tion and use of outer space and holds States Bulgeria Nigeria Canada Pakistan responsible for their own space activities and Chad Philippines those of their citizens. The other agreements Chile Poland elaborate on elements of the 1967 Treaty. China* Romania Columbia Sierra Leone Agreement on the Rescue of Astronauts, the Czechosk,akta Spain Return of Astronauts, and the Return of Ecuador Sudan Objects Launched Into Outer Space (1%8).27 Egypt Sweden Federal Republic of Germany Syria This agreement provides for the rescue and France United Kingdom return of downed or stranded astronauts as German Democratic United Republic of well as the return of a space object and "its Republic Cameroon Greece United States' component parts." It specifies that "the State Hungary Upper Volta responsible for launching" shall pay the ex- India' Uraguay penses for recovering and returning the Indonesia U.S.S.R. Iran Venezuela space object or its parts. Iraq Vietnam Convention on International Liability for Italy Yugoslavia Damage Caused by Space Objects (1972).28 Japan This convention is an extension of articles NOTE Italics indicate COPUOS membership 1981 73 Asterisk indicates independent launch capability ESA members also have launch capability VI and VII of the 1967 treaty.It defines 'Greece and Turkey, Spain and Portugal, alternate membership every 3 years "damage" as loss of life, personal injury, im- SOURCE Office o' Technology Assessment pairment of health, loss or damage to property or persons or property of international later, at the first meeting of the Committee on the organizations. "Launching" is held to in- Peace -ill Uses of Outer Space. U Thant, Acting clude attempted launching, and a "launch- Secretary General of the U.N., was appointed ing State" is one that either launches or pro- temporary Chairman pending the election of of- cures the launch of a space object. It is also ficers. At the same time, the U.S.S.R. became an one "from whose territory or facility a space active participating member of the Committee. object is launched." In the interim between ad hoc status and perma- Convention on Registration of Objects nent committee approval, the members agreed Launched Into Outer Space (1974).29 The to settle differences by consensus agreement. information registered includes the name of That the consensus process worked is borne out by the formation of five major space treaties and 26UST 2410; TIAS 6347, Senate Report No 8, 90th Cong, 1st sess., agreements which are now in force to guide in- Apr 17, 1967, Senate Committee on Aeronautical and Space Sci- ternational behavior in space.25 ences, 90th Cong , 1st sess., staff report on "Treaty on Principles Governing the Activities of States in the Exploration and Use of Out- er Space," committee print, 1967. Treaties and Agreements "UST 7570: TIAS 6599, "Agreement on the Rescue of Astronauts, the Return of Astronauts, and the Return of Objects Launched Into The United States is a party to four major in- Space Analysis and Background Data;" Senate Committee on Aero- ternational agreements formulated by COPUOS. nautics and Space Science, 90th Cong , 2d sess, committee print. July 16, 1968 Treaty on Principles Governing the Activi- 28UST 2389, TIAS 7762; Senate Committee on Aeronautics and Space Sciences, 92d Cong, 2d sess., staff report on "Convention ties of States in the Exploration and Use of on International Liability for Damage Caused by Space Objects," Outer Space, Including the Moon and committee print, 1972 19TIAS 8480, Senate Committee on Aeronautical and Space Sci- " "See 'International Cooperation in Outer Space A Symposium,' ences, 94th Cong ,1st sess , staff report on "Convention on Registra- op ( it tion of Objects Launched Into Outer Space," committee print, 1975. 58 Ch. 3International Space Cooperation 47

the launching State or States, an appropri- of licensing and adherence to government-im- ate designator or a registration number, the posed regulations. date and territory of the launching, the initial basic orbital parameters including the Similarly, Article II of the 1972 Liability Con- nodal period, inclination, apogee, perigee, vention makes the launching State responsible and the general function of the space object. for personal and property damage caused by any satellites or launchers even if they are no longer In addition to the four international agreements under the operation or direct control of the gov- which the United States has signed and ratified, ernment. At a minimum, the government would the General Assembly has recommended to States require assurance that the owner of the satellite the adoption of the Agreement Governing the system had purchased adequate insurance to Activities of States on the Moon and Other Ce- cover possible damages. lestial Bodies (1979).3° Among other things this Agreement provides for the use of the Moon "ex- The U.S. Government has not yet decided on clusively for peaceful purposes." It also provides the precise mechanisms of ensuring that private thatthe exploration and use of the Moon shall corporations comply with international treaty be the province of all mankind and shall be car- obligations. Given the importance of this tech- ried out for the benefit and in the interests of all nology to U.S. foreign affairs, it is clear that the countries, irrespective of their degree of econom- Department of State must play a major role. ic or scientific development." It further states that "the moon and its natural resources are the com- International Telecommunication

mon heritage of mankind ..." Austria became Union (ITU) the fifth nation to ratify the Moon Agreement on June 11, 1984; it is now in force, the other par- The United States is one of 155 nations hound ties being the Philippines, Chile, Uruguay, and by treaty to cooperate within the structure of the The Netherlands. The United States played a ma- ITU for the use of technical facilities for telecom- jor leadership role in obtaining consensus in 1979 munications of all kinds. The ITU, which became on the Moon Agreement in the COPUOS session. a specialized agency of the United Nations in However, while the United States and U.S.S.R. 1947, has performed this regulatory function are parties to 'II othe; space treaties, neither has since 1932. Twentieth-century communications signed this one. technology imposed the requirement for international cooperation to ensure technical efficien- Of particular importance to potential private cy and prevent harmful interference between na- operators of space systems is Article VI of the tions and stations in the use of the radiofrequency 1967 Outer Space Treaty which states: spectrum. During the early development of space States Parties to the Treaty shall bear interna- communications, the ITU began to study its im- tional responsibility for national activities in plications, since all space objects communicat- outer space, including the Moon and other ce- ing to Earth require radio services which are lestial bodies, whether such activities are carried under ITU jurisdiction.3' on by governmental agencies or by nongovern-

mental entities...The activities of nongovern-

mental entities in space...shall require authorization and continuing supervision by the ap- trrhe ITU was formed from the International Telegraph Union propriate State party to the treaty. (begun in 1865) and signatories to he International Radiotelegraph Convention. For further information on the ITU, see "International Although the terms "authcrization" and "con- Cooperation in Outer Space: A Symposium." This symposium cov- tinuing supervision" have been interpreted in va- ered 41 organization- in 1965, divided into four categoriec 11.S. and International Space Cooperation, United Nation- and Oute, rious ways, article VI clearly requires some form Space, Intergovernmental International Organizations, and Inter- national Scientific Community and Professional Associations. For 101) N General Assembly Resolution A/34/68, Dec 14, 1979, Sen- up-to-date information on these and other organizations, see the ate Committee on Commerce, Science, and Technology, 96th annual leport of each and also testimony their officials have given Cong , 2d sess , "Agreement Governing the Act.vities of States on before House and Senate Committees on Commerce, Space, 11- "oon and Other Celestial Bodies," comnittee print, 1980 Science and Technology, Foreign Relations, Foreign Affairs, etc.

5 :I 48 Internonnnal Cooperation and Competition in Civilian Space Activities

The ITU is organized into four permat -2nt bod- Members shall endeavor to limit the number ies: 1) the General Secretariat; 2) the Internitional of frequencies and the spectrum space used to Radio Consultative Committee (CCIR); 3) t.e In- the minimum essential to provide in a satisfac- ternational Telegraph z,nd Telephone Con' ulta- tory manner the necessary services. To that end tive Committee (CCITT; and 4) the Internat onal they shall endeavor to apply the latest techni- Frequency Registration Board (IFRB). The 2CIR cal advances as soon as possible. In using fre- and CCITT are technical study groups; the IFRB quency bands for space radio Services Members shall bear in mind that radio frequencies and the is concerned with order'y and effective use of the geostatimary satellite orbit are limited natural radio spectrum and orbital slot allocations, in or- resources, that they must be used efficiently and der to reduce communications interference. All economically so that countries or groups of member States are represented in the Plenipoten- countries may have equitable access to both in tiary Conference, which meets every 5 to 8 years conformity with the provisions of the Radio Reg- and elects an Administrative Council of 36 mem- ulations according to their needs and the tech- bers to coordinate ITU work between sessions. nicalfacilitiesattheir disposal (emphasis OTA's).33 A Fienipotentiary Conference was held Sep- tember-October 1982 in Nairobi, Kenya, to re- The ITU divides the world into three regions view the ITU Convention (adopted in Madrid in for regulatory purposes; in 1979 spectrum alloca- 1932 and amended in Malaga-Torremolinos, tions were made for Region 1 (Europe, U.S.S.R., Spain, in 1973).32 There were a few important ac- Mongolia, and Africa) and Region 3 (Asia except tions that are worthy of note: plans for a major U.S.S.R. and Mongolia) and Australia. The United world administrative conference on telegraph States is in Region 2, which is comprised of North and telephone in 1988; greater status for the Con- and South America and Greenland. The ITU sultative Committee on Telegraph and Telephone made spectrum allocations for Region 2 in 1983. (CCITT); increased ITU involvement in develop- it is at these regional conferences where decisions ment assistance for Third World members; clearer are made by majority vote that issues which sig- recognition of Third World needs with respect nificantly affect the future of this nation's com- to the geostationary orbit; a newly elected leader- munications are decided. The issues are techni- ship; and a relatively modest budgetary increase cal but have become increasingly susceptible to of 26 percent over the next 7 years. political influences in a forum where each nation `,as one vote.34 ITU decisions are made by the regional or worldwide administrative conferences estab- The ITU has scheduled a World Administrative lished to revise ITU regulations. The ITU con- Radio Conference c n the Use of tl ? Geostation- cluded international agreements concerning ary Orbit for 1985 and 1988. Its fiat session will space communications in 1959, 1963, 1965, be held in 1985 in Geneva (ORB '85), and the 1971, 1973, 1977, -.nd 1979. When the `final acts second in 1988 (ORB '88). Policy is now being of a conference z.re concluded they are referred formulated for the U.S. delegation for this politi- to each ITU member for ratification. In the case cally sensitive area. Some equatorial countries of the United States, these final acts must be sub- continue to claim sovereign rights to segments mitted to the Senate for its advice and consent. of the c.rbit above their territories; other Third The jurisdiction of the ITU includes oversight of "International Telecommunication Convention, ch. III, Art 33, the geostationary orbit; it registers orbital posi- Rational Use of the Radio Frequency Spectrum and of the Geosta- tions and assigns satellite frequencies. The 1973 tionary Satellite Orbit, paragraphs 130 and 131 Treaty and Inter- national Agreements Series (TIAS), also in Space Law, op. cit. Telecommunication Convention and Final Proto- (reference 15), pp. 86-87. col, Article 33, provides a basic agreement on "Proceedings of the International Institute of Space Law, 23d Col- space communications: loquium, Tokyo, Japan, September 1980 M. A Rothblatt, Inter- national Cooperation in Regulating 12 GHz Band Geostationary - Satellite Communications Technology, Geopolitics and the Com- ""Final Acts of the Plenipotentiary Conference," Nairobi, Kenya, mon Heritage of Mankind, pp. 189-195. Also, Ronald F. Stowe, 1982 ITU Doc ument See also hearing before the Subcommittee Implications of the 1979 WARC for 12 GHz Satellite Services in or International Operations of the U S House Committee on For. Region 2, pp 93-95 American Institute of Aeronautics and Astro- eign Affairs, Feb 22, 1983 nautics, 1633 Broadway, New York, NY 10019.

Go Ch. 3International Space Cooperation 49

World countries are demanding orbit allocations The United States played a major part in estab- even though they have no present plans for using lishing this intergovernmental organization. For the geostationary orbit (see ch. 6). Actions taken the first 6 years of its operati3n, the Communi- at this conference will affect INTELSAT, I NMARSAT, cations Satellite Corporation (COMSAT) managed U.S. domestic communications, and international INTELSAT under a contract from INTELSAT's space activities in general. Board of Governors. Since 1977, INTELSAT has been operated administratively and technically The U.S. national paper for UNISPACE '82, by an international secretariat. March 23, 1982,35 points out that the ITU's WARC 1979 proved that international consensus INTELSAT is not an agency of the United Na- on regulating and managing the frequency spec- tions, but it has some cooperative agreements trum and geostationary orbit is possible: the ca- with the ITU. The organization has successfully pacity for channels of the fixed, broadcast, and combined both governmental and nongovern- mobile satellite services was increased; remote mental entities into a global commercial service. sensing satellites were given new allocations; and INTELSAT's management structure provides a sys- small Earth terminals and two-way communica- tem within which to solve problems of national tions links were facilitated. However, the United representation, investment shares, and equitable States has stated that the WARC 1985-88 confer- access to technology; these issues are resolved ence "may be crucial in determining whether a through technological solutions, seldom subject comprehensive international regulatory system to current political rhetoric; furthermore, these can be maintained which will continue to facili- practical solutions respond to the global demand tate the flow of the benefits of communications for communications services, which has been satellite technology to developing countries." The constantly increasing and providing mounting United States has submitted to the ITU some op- profits. tions and criteria for technological adjustments INTELSAT's Operating Agreement provides in to communication needs. In addition, the United Article 6 that "...each signatory shall have an States is directing research and development ef- investment share equal to its percentage of all uti- forts toward improving the use of the limited re- lization of the INTELSAT space segment by all sources of orbit and frequencies (see ch. 6 for signatories." The U.S. investment share (1984), discussion of issues the United States will face at which comes through COMSAT (as signatory for WARC '85-'88). the United States), is 23.1 percent. The United Kingdom owns the next highest investment share, International Telecommunications of 12.9 percent.37 Satellite Organization (INTELSAT)3° U.S. participation takes place within each of INTELSAT is a global commercial telecommuni- INTELSAT's four organizational units:1) the cations satellite system owned by 109 member Assembly of Parties is made up of governmental countries. It has a capital ceiling of $1.2 billion. reprLsentatives who meet every 2 years to determine policies and long-term objectives; each "United States National Paper, Second United Nations Confer- ence on the Exploration and Peaceful Uses of Outer Space For member has one vote; 2) the Meeting of Signa- further details on WARC '79, see Radiofrequency Use and Man- tories is comprised of either governmental or agement Impacts From the World Administrative Radio Confer- ence of 1979 (Washington, DC U 5 Congress, Office of Technol- government-designated telecommunications en- ogy Assessment, OTA-CIT-163, January 1982) tities that meet annually on such matters as cap- "For further information on INTELSAT, see INTELSAT: 1984 An- ital investment and shares, approval of Earth sta- nual Report, 490 L'Enfant Plaza, SW, Washington, DC 20024, IN- tions for access to INTELSAT services, allotment TELSAT report describing the organization, Multilateral Intergovern- mental Cooperation in Space Activities, Background Paper, Second of satellite capacity, and adjustment of charges; United Nations Conference on the Exploration and Peaceful Uses each signatory has one vote; COMSAT casts the of Outer Space, United Nations document A/CONF/101/8P/10, Jan 30, 1981, pp 1-27, and Current and Future State of Space Tech- nology, Background Paper, Second United Nations Conference on "See ch. 6 for a complete list of INTELSAT members, signatories, the Exploration and Peaceful Uses of Outer Space, United Nations and investment shares, and the INTELSAT Annual Report for in- document A/CONF 1010/BP/2, Mar 16, 1981, pp 6-7 vestment shares of any given year

61 50 International Cooperation and Competition in Civilian Space Activities

U.S. vote; 3) the Board of Governors is composed International Maritime Satellite of signatory members who have an investment Organization (INMARSAT)" share (either individually or in groups) of not less than a specific amount which is determined each The impetus to create INMARSAT1 came from year by the signatories. INTELSAT seeks to have the commercialization of this technology by about 20 members on the Board and, in addi- COMSAT during the 1970s and from a resolution tion, "up to five groups composed of at least five of the Intergovernmental Maritime Consultative signatories from within the same ITU region... Organization (IMCO), a specialized agency of the regardless of the size of their investment shares"; United Nations, which in 1974 called for a con- and 4) the Executive Organ is headquartered in ference to establish an international maritime sat- Washington, DC, and has a staff of about 400 per- ellite system. The conference was held in Lon- sons from about 40 different nations. don in 1975-76, and concluded with two agree- The purposes of INTELSAT's definitive multi- ments patterned after those which established lateral agreement, which recognizes the 1967 INTELSAT: a Convention on the International Treaty on Outer Space, are to provide advanced Maritime Satellite Organization and an Operat- ing Agreement on INMARSAT. Both agreements technology, efficient and economic facilities for the benefit of all mankind "with the best and entered into force on July 16, 1979. INMARSAT, most equitable use of the radiofrequency spec- as established, is not a U.N. organization but is trum and of orbital space." The preamble pro- comparable to INTELSAT. vides that "satellite telecommunications should INMARSAT developed technologically from the be organized in such a way as to permit all U.S. Marisat satellite system, which was started peoples to hive access to the global satellite sys- by COMSAT General Corp. in 1976. The inter- tem"; and ITU members that invest in the system national system, which is fully compatible with will participate in "the design, development, con- the Marisat system, has 43 member states; head- struction, including the provision of equipment, quartered in London, it began operations in 1982. establishment,operation,maintenance and ownership of the system."3° INMARSAT's purposes are to improve maritime communications to handle situations involving Nonmembers may use the INTELSAT system distress and/or safety, through communication and are charged on the same basis as the 109 between ships and shore and among ships at sea. members; 145 nations use INTELSAT services, in- INMARSAT's high-speed satellite ..ommunica- cluding the U.S.S.R. INTELSAT has a program for tions have improved search and rescue missions, assistance and development which can be espe- medical assistance, warnings of weather con- cially helpful to developing countries. The pro- ditions, and information to assist navigation. gram includes feasibility studies for Earth segment INMARSAT is exploring the feasibility of estab- stations, reports on financing and technical pro- lishing a Future Global Maritime Distress and posals, modernization and training, operation Safety System by the end of this decade, which and maintenance, and coordinating frequencies would improve maritime distress and safety pro- in accordance with ITU regulations. In some cedures. areas "INTELSAT has enabled developing countries to leapfrog over generations of communications technology without having to invest a great deal of time and money in a telecommuni- 4c'For more information on INMARSAT, see International Maritime Satellite Organization, INMARSAT, 40 Melton St , Euston Sq., Lon- cations satellite system of their own.. ."39 don NW1 2EQ, England; Satellite Communications for Shipping INMARSAT, London, England. Investment shares as of August 1981, "International Telecommunications Satellite Organization (IN- p. 15. TELSAT) Agreement with Annexes and also Operating Agreement "INMARSAT, established to facilitate maritime communication Relating to the international Telecommunications Satellite Orga across the world's shipping lanes, is important because it repre- nization (INTEL SAT) In Space Law, op cit (see reference 15), pp sents an arca of European rather than American leadership in space 173-304 activities and because it marks, for the first time, the participation "Multilateral Intergovernmental Cooperation in Space Activities, of the Soviet Union in an international commercial space orga- op cit(see reference 36), p 21 nization

6; Ch 3International Space Cooperation 51

INMARSAT is structured as follows: World Meteorological Organization 1. An Assembly of member states meets at 2- (WMO) year intervals to consider policy, activities, and long-range objectives for recommenda- The origins of the WMO can be traced back tion to the Council. to 1853, when the first International Meteorolog- 2. The Council has 18 signatories (or groups of ical Conference was held in Belgium. Participants recognized the importance of sharing meteoro- signatories) which have the largest shares of investment and, in addition, four represent- logical research and data. In 1873, the Interna- atives to ensure fair geographical represen- tional Meteorological Organization (IMO) was tation and concern for developing countries; organized. IMO became a specialized agency of it is responsible for the space segment and the United Nations in 1947 and began function- its economic and efficient management; ing as the WMO in 1951. All sovereign states and members vote according to the percentage territories with weather services may become of their investment shares. members. WMO is not an international opera- 3 The Directorate has a Director General and tional organization, but rather a planning and co- staff responsible for the actual operation of ordinating body with basic programs to assist all worldwide maritime communications. nations. It is a specialized agency with specific weather-related tasks that are planned with due The United States has the largest investment regard for operating efficiency to produce needed share (31 percent), followed by the United King- information from global sources and for world- dom (15 percent), Norway (12 percent), Japan wide distribution. The WMO has been highly suc- (7 percent), and the U.S.S.R. (7 percent).42 Voting cessful in eliciting cooperation among nations. shares are limited to a maximum of 25 percent. The United States launched the first meteoro- The United States designated COMSAT as the signatory fc,r its representation." logical satellite on April 1, 1960. When the U.N. General Assembly passed resolution 1721 (XVI) The space segment of the INMARSAT system on December 20, 1961, on the peaceful uses of is composed of satellites and tracking, telemetry, outer space, it recommended that the WMO command, monitoring, etc. Capacity to perform make an early and comprehensive study: maritime communications has been leased from COMSAT General (a wholly owned operating (a) to advance the state of atmospheric science and technology so as to provide greater knowl- subsidiary of COMSAT). INMARSAT leases some edge of basic physical forces affecting climate transponders from the European Space Agency and the possibility of large-scale weather modi- the Maritime European Communications Sat- fication; and ellites and some from INTELSAT (V-MCS). Future INMARSAT satellites will have greater capacity (b) to develop existing weather forecasting ca- and higher in-orbit power than the transponders pabilities and to help member states make effective use of such capabilities through regional it now leases. INMARSAT has recently signed a meteorological centers. .. contract for purchase of second generation satellites from a consortium headed by British Aer- WMO was requested to consult with others and ospace. Hughes Aircraft Corp. ;s the prime sub- submit a report to its members and the Economic contractor. and Social Council (ECOSOC) "regarding appropriate organizational and financial arrangements ---- to achieve those ends, with a view to their fur- "See app 6C for a complete table of INMARSAT members and ther consideration by the General Assembly." investment shares In addition, the General Assembly requested "International Cooperation in Outer Space A Symposium, edited COPUOS to review the WMO report and sub- by Eilene Galloway for the Senate Committee on Aeronautical and mit comments to ECOSOC and the General As- Space Sciences Senate document No 92-57, 92d Cong,1st sess , Dec 9, 1971 (see pp 331-363: sembly. These U.N.-initiated WMO studies led

6,1 52 International Cooperation and Competition in Civilian Space Activities to plans for the World Weather Watch (WWW), WMO projections for the future emphasize that which was organized to use the new satellite more international cooperation will be required, technology to improve meteorological services: especially for the planned World Climate Program. In 1978, WMO requested a U.S. and a Soviet ex- Such improvements will have a profound impact on the agriculture, commerce, and indus- pert to evaluate the future need for environ- try of all nations and will permit more actuate mental satellites, including those for meteor- and timely warnings of severe storms and other ology.45 weather hazards for the protection of life and In discussions of the Legal Subcommittee of property. It will further the safety and efficiency COPUOS, the United States has, for many years, of international air traffic and transportation and provide essential support to nations in the man- been extremely careful not to commingle meteor- agement of weather resources and food produc- ological satellites of the NOAA/WMO type with tion .44 land remote sensing. However, some delegates from other nations have discussed rules and reg- An additional U.N. resolution in 1967 led to the ulations for all remote sensing satellitescivilian organization of the Global Atmospheric Research and military, meteorological, and general use as Program (GARP), a joint project of the WMO and represented by the Landsat system. the International Council of Scientific Unions (ICSU). For more than a decade, COPUOS, within its two operating subcommittees, the Legal Subcom- WMO organizes symposia, workshops, semi- mittee and the Science and Technology Subcom- nars, and provides training courses and fellow mitte,e, has discussed the formulation of principles ships in atmospheric science and meteorology. which are subject to political differences such as WMO's Voluntary Assistance Program assists de- the issue of prior consent to distribute data sensed veloping countries purchase satellite data receiv- from space. Prior consent has not been made ing stations. The weather services of all countries an impediment to WMO/NOAA weather agree- now depend on information from satellites. ments or those of any other nation. However, the Through W'MO, global, regional, and national situation is now further complicated by U.S. na- environmental data are collected from the satel- tional actions to turn the Landsat system over to lites of Europe, japan, the United States, and the the private sector (see ch. 7). '.S.S.R., and distributed among all nations.

4 5"The Role of Satellites in WMO Programmes in the 1980s," "U N General Assembly Resolution 1721 (XVI) Dec 20, 1961 World Weather Watch Report No 36, Annex III

ISSUES IN COOPERATION

The changing role of industrialized countries U.S. attempts over the last few years to limit in space, and the aspirations of the developing potential damage to its positions, while at the countries, coupled with a relatively static U.S. ap- same time posturing itself to reduce its activ- proach to cooperation in space, have raised sev- ities within the various organs of the United eral important issues for the United States: Nations that deal with communications, treaty, and regulatory matters. How can the United States use its partici- How can the United States cooperate most pation in international multilateral organi- effectively with the developing countries? zations and meetings on space to promote Developing and newly industrialized nations U.S. interests? The conduct and outcome of are demanding a greater voice in the use of recent international meetings on space has the assets of outer space (e.g., apportion- not always been favorable to U.S. interests. ment of the geosynchronous orbit--see ch. In part, this has come about as a result of 6), and a larger share of the perceived social

64 Ch 3International Space Cooperation 53

1 and economic benefits. Their demands have ence to promote and explain U.S. positions on taken the form of intense political pressure outer space. at the United Nations and elsewhere. On what terms might the United States U.S. actions at recent conferences indicate that the United States has adopted a "damage limita- most profitably cooperate with other indus- tion" approach to participating in multinational trialized nations? Greater competi..veness, organizations. It has also threatened to withdraw both among governments and the private on several occasions. Such a stance, if main- sectors of different countries, alters the contained, will leavz the United States in the posi- text for cooperation and may make it more tion of having to "go it alone," while others, both difficult to establish cooperative programs. friends and potential adversaries, continue to Cooperating in International operate in coalitions. Organizations Space is by nature and treaty an international The United Nations realm about which cooperation between nations The United States played a ieading role in the on some level is essential, if only to avoid poten- formation and development of the U.N. Commit- tial conflict over its resources. The United Na- tee on the Peaceful Uses of Outer Space. It en- tions and other multilateral org.!nizations serve couraged cooperative programs with NASA and as the forums for countries to discuss their needs transfer of some space technology to industrial- and resolve their differences. The various treaties ized and developing countries. U.S. programs that provide the framework for the international have consequently helped them realize some of use of space were forged in the U.N. COPUOS. a.- benefits of space technology. Because of When arrangin,, the terms of cooperative tech- these efforts by the United States, and the rapid nical agreements, tne United States has preferred evolution of space industry, applications of space to cooperate bilaterally rather than multilaterally. technology have become an integral part of the Nonetheless it has actively participated in COPUOS operations of several U.N. committees and U.N. and the International Telecommunication Union specialized agencies such as the ITU, the Food (ITU), and during the 1960s and 1970s it provided and Agricultural Organization (FAO), the World leadership in forging the five ratified space treaties Meteorological Organization (WMO), and the In- and agreements. Today, however, the U.S. ap- ternational Maritime Commission (IMCO). proach to international organizations in general, Developing countries see the U.N. as their pre- and to the United Nations in particular, is exem- ferred agent for deliberation and guidance for plified by its behavior at the United Nations Con- space affairs as well as a forum in which to ex- ference on the Peaceful Uses of Outer Space press their political views. Specifically, the U.N. (UNISPACE '82) and the ITU Plenipotentiary in Special Political Committee, under whose admin- Nairobi ii October 1982. "The United States has istrative management the Committee on the been generally reluctant to concede that its in- Peaceful Uses of Outer Space (COPUOS) func- terests can be promoted or seriously jeopardized tions (fig. 3-2), is the focus of their hopes and as- at such conferences (i.e., UNISPACE '82). It ap- pirations, fears and concerns with respect to proached UNISPACE '82 warily and attended pri- space. It provides the major forum for space-re- marily to "limit the damage" that UNISPACE '82 lated issuesnew regulations, proposed restric- could cause to U.S. interests."46 Although the tive regimes, and challenges to Western world United States was effective at UNISPACE '82 in policies,politics, and business practices.If preventing wording inimical to U.S. interests from COPUOS, which operates by means of consen- appearing in the final UNISPACE '82 conference sus, fails to reach agreement on a given course report, it was less effective in using the confer- of action, the Special Political Committee, which "UNISPACE '82 A Content for Cooperation and Competition, is dominated by the developing countries, may op f. It , p 4 refer matters to the General Assembly for action.

65 54 International Cooperation and Competition in Civilian Space Activities

Figure 3.2. U.N. Bodies (A)

(B)

6f6 Ch 3International Space Cooperation 55

For example, one issue which COPUOS has de- support for the organization in question. The liberated for 10 years is that of direct broadcast United States has withdrawn from UNESCO and satellites (DBS). The United States wants no re- raised this possibility in the ITU, COPUOS, and strictions imposed on the right to broadcast or the United Nations Conference on Trade and De- otherwise to transfer information across national velopment (UNCTAD). Each of the above orga- borders. Until 1982 it had been successful in pre- nizations serve different purposes and the use- venting a restrictive set of principles on DBS from fulness of U.S. participation in them may differ. being adopted. However, in November of that The question of U.S. participation in one should year the developing countries, led by the G-77, be analyzed independently of participation in demonstrated their willingness to take this unre- others. Although threat of withdrawal may ap- solved issue directly to the General Assembly. pear to be an effective short-term tactic in some The Special Political Committee, despite the ob- circumstances, its potential long-term cost in po- jections of the United States and a few Western litical, social, diplomatic, and economic terms allies, removed the DBS issue from COPUOS and may be too large a price to pay. Stressing, as the referred it to the General Assembly. The latter Administration does, that the U.N. has changed passed the resolution by a large majority and dramatically since the emergence of space tech- adopted a set of nonbinding principles govern- nology, but refusing to change with it, is to cir- ing the use of direct broadcast satellites.'" These cumvent the critical question of our political ef- principles endorse the right to "prior consent" fectiveness within the U.N. Withdrawing from a to the nations receiving such broadcasts. Al- given committee or specialized agency simply though nonbinding, the principles foster a dis- further reduces or- effectiveness in working with- turbing trend of bringing political pressure on the in multilateral forums on substantial issues that United States and other industrialized countries affect our interests in space.48 at the expense of the consensus process. In the U.N. Secretariat, the office within which Championed by the G-77, the use of majority space issues are administered is the Outer Space voting rather than consensus may also be used Affairs Division (OSAD). Currently the United to influence the outcome of other long-term States has no high-level representation in OSAD,* issues of international debate, such as remote although the Soviet bloc is well represented. Be- sensing and equitable sharing of the geostationary cause all U.N. employees are international civil orbit. Members of the G-77 see the control of servants, countries cannot intervene directly in new technologies as necessary in order to change the personnel actions of the Secretariat. How- their societies in the directions in which they wish ever, they can further their own interests by rec- to move. ommending the selection of citizens for the OSAD staff. The United States has not been as Currently, the U.S. response to the well-orga- active as it could be in promoting U.S. interests nized political pressure from the developing in OSAD.** If the United States desires to in- countries is to threaten to withdraw or curtail its crease its effectiveness in the United Nations, it 4'A/SPC/37/L 5/Rev 1, Nov 19, 1982 Preparation of an Interna- should be alert to potential openings and plan tional Convention on Principles Governing the Use by States of Arti- ficial Earth Satellites for Direct Television Broadcasting !Argentina, in advance to recommend the appointment of Bolivia, Brazil, Chile, Colombia, Ecuador, Egypt, India, Indonesia, qualified personnel. To such end, advance dis- Iraq, Kenya, Mexico, Niger, Nigeria, Peru, Philippines, Romania, cussion with incumbents, U.S. departments and Uruguary, and Venezuela, revised draft resolution) The relevant section reads agencies, and foreign government and U.N. offi- Consultations and agreements between States cials as appropriate, should be undertaken in A State which intends to establish or authorize the establi,kment timely fashion. of an international direct television broadcasting satellite. lice shall without delay notify the proposed receiving State or States of such "UNISPACE '82. A Context for Cooperation and Competition, intention and shall promptly enter into consultation with am, of those op cit , p 8, 9 States which so requests *See Unispace '82: A Context for International Cooperation and An international direct television satellite service shall only be established after the conditions set forth in paragraph 1 above have Competition, op cit., pp 32-33, for an account of the selection of been met and on the basis of agreements and/or arrangements in the Chief of OSAD prior to UNISPACE '82, and how countries may conformity with the relevant instruments of the International Tele- become involved in the selection of U N. personnel communication Union shall be exclusively applicable "Ibid 6 / 38-797 0 - 85 - 3. QL 3 56 International Cooperation and Competition it Civilian Space Activities

In 1984, the United States drastically reduced veloping countries that the United States lacked its participation in the deliberations of COPUOS, interest in working with them in the peaceful ap- which is the chief forum for international rules plication of space technology. of outer space. The tull Committee of COPUOS (composed of 53 member nations) is essentially The importance of COPUOS to the world space a plenary session of its member nations to con- community should not be underestimated. It is sider items on the agenda it adopts at the open- the one place where all countries, developing ing meeting of each session. Subjects assigned and industrialized alike, can discuss legal, scien- to its two subcommittees are routinely included tific and technical issues related to space on a and form a major part of its agenda. It is within continuing basis. Attendees at both COPUOS these subcommittees that the United States over subcommittees (the Legal Subcommittee and the the years has been able to gain support of other Scientific and Technical Subcommittee) tend to nations for its positions in the full Committee and have strong technical or legal backgrounds, and U.N. General Assembly sessiors. The reports of their discussions focus on legal and technical the COPUOS subcommittees are also routinely issues. To a iarge extent the discussions of these included in the annual report COPUOS submits subcommittees are protected from overt politi- to the General Assembly. The General Assembly, cal rhetoric. after consideration of the COPUOS report, by res- Legal proble,ns currently being discussed with- olution assigns the items for deliberation of the in the Legal Subcommittee include: subcommittees at its next session. Although in the past the United States has maintained a leading the definition and/or delimitation of outer presence in COPUOS and its subcommittees, and space; generally sends several delegates with a variety matters relating to the character and utiliza- of expertise in space-related matters, it sent only tion of the geostationary orbit; one delegate to the February 1984 meeting of the legal implications of remote sensing of the Scientific and Technical Subcommittee of COPUOS.49 Earth from space, with the aim of formulating In 1985, the United States, by sending several ex- draft principles; and perts to the COPUOS subcommittees, partici- the possibility of supplementing the norms pated more fully in the ongoing work of the Com- of international law relevant to the use of nu- mittee. clear r'wer sources in outer space.

The uncertain stance of the United States The Scientific and Technical Subcommittee has toward COPUOS, arising from controversy within over the years discussed such issues as: the Administration concerning the usefulness of COPUOS, has already had an adverse effect on Exchange of Information: how other countries perceive U.S. participation. National, regional and international pro- A long-term drastic reduction in U.S. participa- grams. tion in COPUOS could send a message to the de- Governmental and nongovernmental space organizations. "His statement to that group reflects one point of view about Manuals on technical requirements. the usefulness of 1 I S participation in COPUOS World Data Centers. Finally, Mr Chairman, my delegation wishes to underscore that our doubts about the future usefulness of the committee have not SPACEWARN communications networks. in any way dissuaded the United States of the importance of inter Encouragement of International Programs: national cooperation in the use of outer space Delegations can be sure that our many existing cooperative programs with other na- International Year of the Quiet Sun. tions in space science and applications will continue to grow in the World Magnetic Survey. future Nonel-eless, we find it quite regrettable that the Committee on the Peaceful Uses of Outer Space now threatens to loin the grow- Synoptic rocket experiments. ing number of U N bodies that have grown increasingly impotent Polar cap experiments. and irrelevant as a result of confrontation, politicization and rhetorical excesses Space communications. Statement by Ambassador lose S Sorzano, U S Deputy Permanent Satellite meteorology. Representative to the United Nations, to the Scientific and Tech nical Subcommittee of the Committee on the Peaceful Uses of Outer Scientific and technological assistance, ed- Space, Feb15, 1984 ucation and training.

68 Ch 3 International Space Cooperation 57

International Equatorial Sounding Rocket to support its Armed Forces, the Inte:Iigence Launching Facilities: Community, its diplomatic missions, the Voice Scientific value. of AmerVa, and Radio Free Europe and indeed Usefulness. for everyone who wishes to use the electromag- Basic facilities. netic spectrum. Similar cooperation will be necessary in the future if U.S. industry is to expand Given the importance of the subcommittees to its sales of telecommunications equipment and the work of COPUOS, it may not be possible to services. Inherent in any multilateral undertak- pruiect U.S. interests fully by cutting back drastically on U.S. participation either there or in the ing is cooperation and compromise on the sometimes conflicting interests of parties to the plenary sessions of COPUOS. Often, points of process. This is generally attainable when tech- view at variance with the democratic principles nical managers apply their knowledge and under- of a free and open society could be debated, tem- standing of the limitations of the usable spectrum peren, and sometimes chz.itged within these sub- to maximize its use for the maximum public good. committees. However, the technical experts must also work Although in the short run, the threat of cutting in the context of the political and economic in- back drastically on U.S. participation at COPUOS terests of the countries they represent. This is why may serve a useful political purpose in counter- in the iTU the West faces strong political pres- ing the perceived trend toward politicization of sures from the group of nonaligned nations which COPUOS, in the long term, reduced J.S. partici- function as the Group of 77 (G-77). The G-77 is pation will lessen U.S. influence in international decisions on space activities. When the United committed to using international multilateral organizations to gain economic and political States and the Soviet Union wire the only two power. For example, at the ITU Plenipotentiary players in space, such a stance would have been more plausible than today, when all the major in Nairobi in 1982, the G-77 garnered strong support for a resolution condemning Israel for its in- industrialized nations and several newly indus- vasion of Lebanon. After lot. and heated discus- trialized nations have increasingly strong space sion, the United States, citing dangers to the orograms. In particular, as the U.S. private sec- international management of the electromagnetic tor increases its investment in space technologies, it will need the support and encourageme't of spectrum if such strictly political issues were allowed to disrupt the workings of a technical its Government in international forums such group, threatened to pull out of the ITU if the COPUOS, where the private sector point of view vote carried. is often misunderstood. By sending only one delegate to the Scientific and Technical Subcommit- The resolution condemning Israel failed by a tee in 1984, and one with relatively little techni- scant four votes, demonstrating the power of the cal or scientnic exp'rtise, the United States ran G-77. However, the United States cannot use the the risk of being perceived to be uninterested in threat of a pullout in every instance of political te matters being discussed therein, and of itself concern. It is certain that the United St?tes and contributing to the politicization of COPUOS. As its allies will face similar situations more often at noted, the United States sent more delegates to the series of ITU meetings to be held over the the Subcommittee meetings in 1985. next 5 yearsall of which will address issues of great imoortance to the United States. The International Telecommunication Uni4n (ITU). Cooperation with other countries within How the United State- presents itself, or is the ITU has been crucial to maintaining access perceived by others to present itself, to the rest to frequencies the United States needs in order of the world at multilateral conferences is a

6;/ 58 International Cooperation and Competition in Civilian Space Activities source of some concern to Congress.5° Yet, the both industrialized and developing countries to question is not whether multinational organiza- achieve better control over their agricultural and tions present the optimum means for the United forestry planning. These data have 'Iso served as States to pursue its cooperative programs, but, a powerful tool for locating needed nonrenew- rather, whether the United States can use its parable resources. ticipation in the ITU and other international orga- As the SITE experiment in India demonstrated, nizations as opportunities for exerting leadership that would benefit the United States, including satellite communication can help countries i.0 its space-related private sector industries. "leapfrog" certain older technological developments and allow countries with inadequate ter- Two critical issues, requiring global cooper,. restrial communic2tions to build a strong educa- tive support, must be kept in the diplomatic tional and telecommunications network. forefront during this period of criticism of the U.N.: first, the White House commitment to the Space technology can be a powerful tool to accelerate national development: it provides a Space Station program and, second, the expan- way of leap-frogging o er obsolete technologies sion of the J.S. private sector into U.N. mem- and getting away from percolation and trickle- ber nations' markets for telecommunication down models of development for which devel- goods and services. Those nations under criticism oping countries do not have the tih.e. It could are now and will be in the future, in part, the effectively deal with the problems of illiteracy, same countries that NASA will eventually turn to isolation and lack of information afflicting the de- for support and that the private sector will be velopment process. Depending on each coun- asked to do business within an effort to reduce try's unique s cial, economic, cultural and re- U.S. trade imbalances. source context, and taking account of other alternative technologies, space could play an im- Attitudes established and policies created in portant role in specific areas of development." one U.N. organization do carry over to others. Developing countries face four major difficul- As UNISPACE '82 and the 1982 ITU Plenipoten- ties in joining the "space club" in any significant tiary in Nairobi clearly demonstrated, wherever way: 1) lack of capital; 2) few technically skilled possible the G-77 pursues its strategy of using U.N. and global conferences to demand c' inges in global resource allocation and technology ',Report of the Second United Nations Conference on the Ex- ploration and Peaceful Uses of Outer Space, Vienna, Aug. 9-21, transfers' 1982, U N A/CONF 101/10, paragraph 11 Space Technology as a Tool for Development Space technology has become increasingly important to some developing and newly industrialized nations aecause they have come to see it rall,1811,11 as a way to bypass interm"diate stages of development and to become more independent of the industrialized countries. Cooperative space ven- --1-4 tures can assist developing countries in this development process. For example, as chapter 7 points out, land remote sensing data have aided i

60See lwaring before the Subcommittee on Space Science and _Alm Applic ations of U S House Committee on Science and Technolo- Photo csedit National Aeronautics and Space Administration gy, 97th Cong , July 14, 1982, hearing before the Subcommittee on international Operations of U S House CommitteP on Foreign A Satellite Instructional Television Experiment (SITE) Affairs. 98th ( igress, Feb 22, 1983 Direct Reeeive Antenna installed in the village of "UNISPACI f12 A Context oor Cooperation and Competition, Kerelli, about 100 kilometers .st of Hyderabad, op (it, o 49 in 1975.

70 Ch. 3International Space Cooperation 59

personnel; 3) small scientific support base (com- erative bilateral agreements with less capable puter, facilities, etc.); and) the need for stable nations, as its tightly defined program is highly government and policymaking apparatus com- national in character and Japan engages in coop- mitted to the long-term political and financial sup- erative programs only for clear, pragmatic returns. port of space. In addition, because of these im- However, it has engaged in a limited number of pediments to using space technology, developing multinational projects. It is most likely to coop- countries also have difficulties in forming and par- erate with other nations in the Western Pacific ticipating in stable multinational associations for Rim. using space. India, with its highly successful, if small, indige- One of the trickiest political issues for devel- nous space program, and its influence in the G- oping countries relates to the difficulty of rely- 77, is an obvious potential partner for coopera- ing on foreign assistance without becoming over- tive activities with smaller countries. However, ly dependent on, or influenced by, the donor lack of available capital limits what it can do. country. India, for example, has judiciously em- China, which has offered to cooperate in launch- ployed the assistance of both East and West over ing other Third World satellites and in develop- the past 15 years, while working toward an in- ing joint space systems when its own abilities dependent space capability. The People's Repub- have matured, could be a major force in coop- lic of China has attempted to do the same, though erative activities in a decade or two. its unstable internal politics has prevented China Developing countries need general education from taking full advantage of all the external aid in mathematics, science, and technology; direct it might have received in developing indigenous training with space technology; and funding for space capabilities. equipment in order to overcome their deficien- cies in being able to put space technology to Developing countries have shared in the bene- work in their economies. Though they have used fits of space technology by using satellite com- a variety of multilateral platforms within and witn- munications for international telecommunica- out the United Nations to press their case for tions (primarily via INTELSAT-see ch. 6) and greater assistance from the industrialized nations, tracking weather patterns using meteorological they have made little headway in obtaining sup- satellite data (see ch. 7). Some have also begun port for broad multilateral help from the United to make limited use of Landsat data. Most devel- States. From the U.S. standpoint, bilateral and oping countries depend heavily on foreign aid limited multilateral cooperation are preferable to to support applications of both the Metsat and blanket extensions of technology sharing to a Landsat data. wide variety of parties because the former two modes allow for greater specificity in meeting the Major cooperative options available for devel- needs of both the donor and recipient. oping nations are "izely to continue to fall between those offered by the United States and the The United States has less to gain from broad Ll...S.R. ESA, as a multinational coordinating multilateral cooperation because the direct po- body, has no mechanism for funding foreign aid litical and economic benefits to the United States to developing countries, nor does it solicit foreign are less clear. Nevertheless, the developing coun- proposals (other than from the United States or tries are pressing for greater multilateral cooper- the Soviet Union and Japan) for cooperative mis- ation. The United States might gain political and sions. Individual European nations do carry on economic benefits by offering to fund more mul- cooperative activities in space on a bilateral basis tilateral educational programs, supported in part with developing countries, especially with former by private industry. The U.S. Telecommunica- colonies, and though these are often of signifi- tions Training Institute (USTTI) is one example of cant value to the recipient country, the overall the sort of training that might be offered. In the amount of assistance is small compared to that USTTI, expenses are shared by the U.S. Govern- offered by the United States or the Soviet Union ment and the telecommunications companies Japan is not likely to seek a wide variety of coop- that participate in the program. 71 60 International Coop6ration and Competition in Civilian Space Activities

This issue is tied directly to the question of how The competitive risks of technology transfer are the United States should participate in the United high in some and lower in others. In general, Nations. U.N. assistance in technology develop- however, the potential for technology transfer to ment is necessarily multilateral. Yet, in contrib- the United States, or cost sharing, requires a re- uting to development programs, the United States examination of the terms of cooperation with the loses much of the control over the funding and industrialized nations. nearly all of the credit for having provided the funding. Thus, it is loath to contribute to devel- In some respects, the United States must co- opment programs within the U.N. structure, pat- operate with the western industrialized nations ticularly if the funding is used on projects the in order to demonstrate leadership in space. As United States would not otherwise agree to or chapter 4 emphasizes, the terms of such competi- to support the U.N. bureaucracy. If the United tion in the political realm extend not only to the States were to contribute more heavily to multi- western industrialized nations, but also to the So- lateral assistance, it would certainly wish to do viet Union. For example, the Soviet Union has so in circumstances in which it could exercise cooperated with France in space science and in more control over funded projects. the manned space program by bringing a French cosmonaut aboard the Salyut space station. The Cooperation in the Face of Competition United States has flown a German payload specialist aboard the Shuttle and will, in the future, Cooperative agreements.... i other industrial- fly French and Arab payload specialists as well ized countries have always been undertaken for as other foreign nationals. a different set of reasons and under a different set of guidelines than those with developing C000eration among competitors is well illus- countries; in addition to the considerable politi- trated in the commercial satellite communica- cal benefits accruing from cooperating with our tions industry, where competitors sometimes allies, considerations of saving U.S. costs and of team up for commercial reasons. For example, exchanging engineering know-how have been in the competition for supplying Arabsat, for po- important. However, in recent years those in- litical reasons U.S. companies were at a strong dustrialized countries with whom we cooperate disadvantage. However, by teaming with the have also become commercial and scientific French firm Aerospatiale, the U.S. firm Ford competitors. Thus, as noted elsewhere in this re- Aerospace was able to capture the majority share port, the terms on which we might wish to co- of the contract to build Arabsat.53 operate with the industrialized, space-capable na- If the United States is able to establish the pri- tions have altered. Because of their increased vate sector in the land remote sensing business capability in space our new competitors have (see ch. 7), the French -built SPOT remote sens- something to teach us. The possibility for cost- ing satellite will in one sense be in direct com- saving and sharing engineering and scientific petition with a U.S. firm for high resolution data. know-how have become more important than Yet, data from the U.S. system will not have spa- they once were. tial resolution comparable to the SPOT data for Although by cooperating with other space- several years. On the other hand, the U.S. sys- capable nations the United States can accomplish tem will have greater spectral capabilities. Con- important technological goals, it also runs the risk sequently, because the competing systems serve of transferring certain technology to potential somewhat different aspects of the overall mar- economic competitors. Yet the United States can- ket, it is in the interest of both to cooperate, at not hope to lead in all space technologies with- least, in setting data format, satellite passage, and out enormous expenditures Cooperation contin- perhaps in using the same receiving stations. The ues to be in the long-term economic interest of United States could promote the interests of the the United States. As the technology chapters discuss, precisely what policy to follow will depend "See ch 6 Aerospatiale became the prime contractor and Ford Aerospace the chief subcontractor Ford Aerospace has actually on the particular technology under consideration. built the satellite

7I.9 Ch 3International Space Cooperation 61

U.S. data sellers and data users by encouraging In activities such as meteorological or ocean cooperation between the two countries. Mech- remote sensing where the public interest is para- anisms already exist for such cooperation, and mount, interdependence and cooperative ar- these could be continued and perhaps extended rangements are and will remain highly produc- in some form if transfer of U.S. land remote sens- tive. For example, the United States is now ing to the private sector is accomplished. As of- attempting to develop a cooperative meteorolog- fered as an option in chapter 7, it may be appro- ical polar orbiter system with the Western in- priate to consider establishing an international dustrialized countries (see ch. 7). This is a form remote sensing corporation. of cooperation that would not have been possible before the Europeans and the Japanese de- Because cooperation for scientific purposes can veloped the ability to compete with us in design- benefit all participants, it may be appropriate for ing and building space systems. the United States to seek cooperative ventures in studying materials processing in space. It might As noted in chapter 9, space science has also be possible to provide facilities, etc., on a coop- become an arena for competition among nations. erative basis. However, in this area, technology However, space science remains the most active transfer at the production stage is a serious con- area for government-to-government cooperation, cern, because the potential for using U.S. tech- for the purpose of saving costs as well as for in- nology in competition with U.S. private sector creasing understanding among nations and fur- is higher. In some areas of materials processing, thering scientific knowledge. Chapter 9 details the because of European experience, the United many cooperative ventures in space science that States could be in a position to gain technology the United States has carried out or has planned from the Europeans. with other nations. Chapter 4 COMPETITION

74 Contents

Page The Space Powers 65 Dominant Role of Governments 65 Comparison of National Space Efforts 65 Intersecting Lines of Competition 66 Political Competition 66 Military Competition 68 Economic Competition 68 Intersections of the Lines of Competition 69 National Programs and Strategies 70 Economic Motives for National Space Programs 70 The Programs 70 The Workability of Competition in Space-Related Markets 83 International Commercial Competition in Space-Related Markets 83 Competitive Analysis of International Space-Related Service and Equipment Industries 86 The Transition From Political to Economic Competition 95 Appendix 4A: The Main International Trading Rules of Relevanceto International Competition in Civilian Space Activities 96 List of Tables Table No. Page 4-1. Space Expenditure 66 4-2. National Shares of European Space Agency Projects,1983 71 4-3. French Space Programs 74 4-4. Turnover of Major French Space Firms 76 4-5. Turnover in the Largest German Space Firms, 1981 76 List of Figures Figure No. Page 4-1. National Space Budgets Compared-1984 65 4-2. U.S. Civilian and Military Space Budgets, 1977-84 68 4-3. CNES and NASA Budgets Compared 75 4-4. Funding Organization of German Space Activities 76 4-5. Schematic Chart of Organization for Space Activities 79 4-6. Japanese Space Budget 82

.75 Chapter 4 COMPETITION

THE SPACEPOWERS Dominant Role of Governments partially unified space program under the Euro- pean Space Agency (ESA)' and Japan. Space activities today are primarily governmental: governments finance the research and devel- When national space budgets are compared opment of space technology. They launch and (fig. 4-1), the space programs of the United States operate satellites. Even though private sector in- lust as the Western European Community is not fully integrated, terest in space has increased, governments still neither are the space programs of the European Space Agency members. About half of the West German space budget goes into E5A constitute the major markets for space-related projects Less than half the French space budget goes to ESA. Most goods and services. (Civilian satellite telecommu- of the winner British, Italian, Dutch, and Spanish space budgets nications services in the United States are an ex- go to E5A ception to this rule, but in most countries outside the United States the telecommunications Figure 4.1. National Space Budgets service industry is owned and managed by the Compared-1984 (billion U.S. dollars) government.) 25 Given this governmental domination of space activities, competition in space-related goods and services is often not conducted in a free-market environment. For instance, private firms supplying space-related goods and services have often 20 acted as contractors to government agencies, rather than suppliers in a market of many buyers. The role of the private sector in some space-related industries has grown more substantially. In the case of ground equipment for satellite cora- 15 munications, for example, domestic and international firms compete internationally for the business of many buyers. Should materials processing in space prove profitable, private commercial activity may be expected. In the areas of remote 10 sensing and space transportation, though, government involvement is likely to remain large, even though the role of the private sector is expected to expand. Space commerce occursand will cont;aue to occurin a context shaped pri- 5 marily by the political, military, and economic interests and actions of national governments.

Comparison of National Space Efforts 0 Soviet United France Japan West European Globally, the constellation of space powers Union.States Germany RAC. closely resembles the constellation of political- Agency military powers. The superpowers of space are .include military space budget, but xcludoS classified military and Intent pence programs the United States and the Soviet Union, followed bEstimated cos' tne United States would Incur to duplicate Soviet effort somewhat distantly by Western Europe (with a SOURCE Office of Technology Assessment

65 76 66 International Cooperation and Competition in Civilian Space Activities

and the Soviet Union are by far the largest both fort devoted to space, the level of U.S. space ef- absolutely and relatively. Recent estimates mark fort is approximately 6 times that of France, 11 the overall Soviet space effort as substantially times that of West Germany, and 11 times that greater than its U.S. counterpart.' 3 Some 600,000 of Japan. Although the governments of France, people are thought to be employed in the Soviet West Germany, and several other European coun- space programs, civilian and military (as much tries (plus Canada) aggregate parts of their space as four times the total in the United States). So- budgets in the European Space Agency, the U.S. viet expenditures on space in 1985 are estimated space budget is stili eight times that of ESA. In to be some $23 billion, representing from 1.5 to short, in terms of spending the United States is 2.0 percent of Soviet gross national product by far the leading space power of the non-Com- (GNP); total U.S. space expenditures are esti- munist world, whether the measure of effort is mated to represent only about 0.5 percent of U.S. absolute or relative. GNP. In contrast, the French, the West German, and Table 4-1.Space Expenditure the Japanese space budgets are each only about 3 percent that of the United States (civilian plus As a percent military). When percentages of GNP devoted to Country of GNP space budgets are taken as indices of national ef- United States 0.47 France. 0.08 Federal Republic of Germany.... 0.04 'Alain Dupas, "Un Programme Spatial En Nein Remouveau," La Japan 0.04 Recherche, November 1984, vol15, pp 1420-1427 Italy 0.03 'Nicholas Johnson, "The Soviet SpaceCurrent Pians and Pro- United Kingdom 0.03 gramsFuture Direction," Space The Next Ten Years, TMSA Pro- ceedings, 1984, p 94 SoiincE sEsTiEutocontlui, 1964-85

INTERSECTING LINES OF COMPETITION

Political Competition long-distance race in 1969.4 Both sides proclaimed their interest in exploring space for the benefit International competition in space began as a of mankind, but political motives clearly ranked highly political duel benneen the United States high in the decisions to race for and the Soviet Union. The Soviet Union scored space. a propaganda coup against the United States The Soviet Union, generally inferior to the when it launched the first artificial Earth satellite, United States in economic and technologicalper- Sputnik 1, in 1957. When the U.S. Navy team, formance, was able to prove superiority in at least having started essentially from scratch, failed to some areas. The United States, particularly in the get a Vanguard satellite into orbit, the Army's early years, felt a strong need to "catch up" with rocket team under Wernher von Braun, relying the Soviet Union. Both sides found in spacesuc- on a great deal of accumulated experience dating cesses a source of national pride and self-respect. from the German V2 program in World War II, At the same time, they demonstrated to the rest managed to launch Explorer 1. An informalrace of the world that their respective (and competing) then began to get the first man into orbit. The political and social systems were powerful and United States started work on Project Mercury late in 1958, but in 1961 the Soviet Unionwon 'For discussions of the e,idence as to whether the Soviets were seriously committed to the moon race, see Marcia Smith, "Program that sprint with Yuri Gagarin i,i Vostok 1. Six Details of Man-Related Flights" in U.S Congress, Senate, Soviet weeks later President Kennedy announced his Space Programs, 1971-75, Vol. I, Staff Report Prepared for the Use goal of placing Americans on the Moon by the of the Committee on Aeronautical and Space Sciences, U.S. Sen- ate, 1976, pp 21 &221, see also Charles S Sheldon, II, "Projec- end of the decade. The United Stateswon that tions of Soviet Space Plans," 'bid, pp 502-515.

77 Ch. 4Competition 67 effective. Moreover, each hoped that recognition economic independence from the United States. as an advanced technical power would enhance It has also encouraged its European partners to its attractiveness as a political and trading partner. do likewisepreferably asserting European independence under French leadership. After the United States reached the Moon, the contest became less direct (at least in civilian The transformation of the French Diamant space activities) between the two great space launch vehicle program into the ESA Ariane pro- powers, but the element of political competition gram was consistent with this broader French Eu- remained. By then, several new entrants had en- ropean policy. The French argued in the 1960s tered the field. The European Space Research Or- and early 1970s that Europe needed its own ganization (a precursor of ESA) seems to have launch capabilities, independent of the United originated in a December 1960 discussion among States, so that a European satellite industry could a group of European scientists about the impact develop. They expressed fear that although the of space technology on science and: United States had said it v.ouid always make launch services available to the Europeans, it ...the then-hot issue of the "brain drain" might not actually do so if the Europeans chose [owing] to the explosive development of science and technology in the United States.' to build satellites in competition with American products. Although in its first yearsbetween 1966 and 1970the European Space Research Organiza- Offering to lead the development of a European tion concentrated on scientific research: launcher within ESA, the French used a cooperative space project for competitive purposes. The The stated objectives of space collaboration French launch vehicle program was brought to in Europe ... wereconstantly presented in a bear in the French effort to compete with the way that obscured the most fundamental reason United States for leadership in Europe. In addi- for cooperation, which was to help European in- tion, European pooling of resources on the Ariane dustry develop its know-how and potential.6 has permitted ESA to raise a challenge to U.S. Here is how the Director of Programs of the domination of the market for launch services. French national space agency has described Other ESA projectsweather observation satel- French space policy: lites and communications satellitesappear designed to reduce European dependence on Amer- For twenty years France has had the constant will to develop a European capacity in the do- ican suppliers. main of space and to prove that our country and Most of the space powers, major and minor, Europe are in a position, as much in the domain have sought to use their space assets as political of launchers as in that of satellites and associ- instruments for cementing ties with friends and ated ground equipment, to play a role on the world level. This will, which is affirmed equally allies and for winning friends and influence in the in the national program and in the European less developed countries. (See ch. 3 for more de- cases, has permitted us to acquire, step by step, tails.) The Soviet Union has encouraged the French the autonomy indispensable for satisfying nation- in their assertions of independence from '.he al and European needs and for developingdy- United States by offering themselves as an alter- namic and exporting space industry.' native partner in space cooperation.8 The Soviets There is not much doubt that the "autonomy" have used their Intercosmos and Intersputnik co- mentioned here means autonomy from the "As a Congressional Research Service Analyst has put rt, "Expand- United States. During that same 20 years France ing space relations with France opened up potential opportunities has consistently striven for military, political, and for the Sosiets to influence the French politically, particularly in seeking the much cherished Soviet foreign policy goal of dividing SA Dattner, "Reflections on Europe in SpaceThe First Two Dec. the West " Jostph Whelan, "Soviet Attitude Toward International ades and Beyond," ESA BR-10 (Paris European Space Agency, Cooperation in Space," ch 3 of Soviet Space Programs: 1976-80," March 1982), p 5 op cit., p. 2./0 61bici, p 7 The French, for their part, have found it useful to counterbalance lean-Marie Luton, "La politique spatiale francalse," Les Cahiers U S power by forming a closer relationship with the Soviets than Francais, No 206-207, May-September 1982, p 89 the United States would like to see.

) 68 International Cooperation and Competition in Civilian Space Activities

operative space programs to strengthen ties with Figure 4.2.U.S. Civilian and Military Space Budgets, East European and other Communist countries. 0177.84 (millions of 1982 dollars)

They have also given extensive assistance to the 9,500 Indian space program.9 9,000 As emphasized in chapter 3, the United States 8,500 has a long record of international cooperative 8,000 projects in space technology with both industrial- 7,500 ,-- ized and nonindustrialized natious, with both al- 7,000 lies and nonallies. Besides seeking the benefits 6,500 of the international pooling of resources, the 6,000 United States has also tried to use these cooper- 5,500 ative projects to demonstrate: 1) the relative 5,000 openness of American society, and, particularly, 4,500 American science, in zomparison with the closed 4,000 nature of Soviet society; and 2) the advantages 3,500 of association with the United States and its ad- 3,000 vanced technology. 2,500 In the arena of international organization pol- 2,000. itics, the competitive aspect of space coopera- 1,500 tion comes to the fore.1° The United States and 1,000 the Soviet Union have each tried to show in in- 500 11 ternational forums that it was the more peaceable 19771978 1979 1960I1981 19621963 1984 user of space technology and the nation whose Years activities were most in the interests of "mankind" Civilian NI Military or the international community. The Soviet Union (excluding classified programs) has in recent years made much of its willingness SOURCE Office of Technology Assessment to resume negotiations on space weapons, an offer made especially effective by the unwillingness the United States had done so. Somewhat more of the United States to discuss the question of quietly, the United States and the Soviet Union arms control measures for space." set about applying space technology to the en- hancement of terrestrial military power. A discus- Military Competition sion of the military space programs of the two The space competition between the United nations is beyond the scope of this report. How- ever, both sides now make extensive military use States and the Soviet Union has long been mili- of space for purposes of geodesy, navigation, tary as well as political (fig. 4-2). Many Americans weather forecasting, reconnaissance, missile- took the launch of Sputnik 1 to signify that the launch warning, and communications. Soviets were about to deploy large numbers of Intercontinental Ballistic Missilesa feat the So- viet Union did not achieve until several years after Economic Competition The one line of space competition in which the '"In the case of India, space cooperation was to play [the role ) of an instrument for expanding Soviet political influence U.S.-Soviet antagonistic relationship has not been in this leading country of the Third World, and thus furthering its central has been the economic. Indeed, for most larger purpose of linking the Third World to the Soviet Union's ex- of the Space Age there has been very little inter- pected global destiny " Whelan, op cit,p 290 '°See the technical memorandum which is part of this OTA study, national economic competition at all. The Soviet UNISPACE '82 A Context for International Cooperation and Com- Union has been the main supplier of space-re- petition, OTA-TMISC-26 (Washington, DC U S Congress, Office of Technology Assessment, March 1983) lated goods and services to the Communist world. "See 'bid , "Appendix B The Milildrization Issue at UNISPACE But, except in France and India, it did not try to '82," pp 61.67 compete with the United States as the chief st:p-

M Ch. 4Competition 69

Wier to the rest of the world. Most non-Commu- 2. Political-military: The U.S. military space pro- nist national space programs have been highly gram may have important effects on the polit- dependent on U.S. satellites, U.S. launch serv- ical competition. For example, if the Soviets ices, and U.S.-licensed space technology. succeed in fostering the impression that the U.S. program is the main cause of the current The U.S. space program remains the bench- "militarization" of space, '',e United States mark by which other non-Communist nations may lose good will otherwise earned by its co- judge the progress of their own. At the same time, operative programs and its visible successes in Japan and the Western European space powers space technology.12 If the Space Shuttle or a (especially France) have been seeking greater in- future space station are seen as dominated by dependence from the United States as the ma- the military, that perception may reduce the jor supplier of space technology and of spare- willingness of the European Space Agency to related goods and services. These new space cooperate in using the U.S. vehicle or plat- powers are beginning to offer some competition form." L.S. cooperative programs may also where before the United States held a virtual be hampered by attempts to limit the export monopoly. Instead of relying substantially on U.S. of technology for "national security" reasons. suppliers, they are beginning to produce space- related goods and services domestically. Some 3. Military-economic: The same problem may af- are beginning to offer export competition as well. fect the competitiveness of U.S. firms in the international space marketplace. Efforts to Competition is greatest in the areas of launch keep American technology out of Soviet hands services, satellite remote sensing services, and may also keep it out of the hands of potential communications satellite equipment and services. Western customers." If the process of control- Competition in the processing of materials in or- ling exports appears capricious, it could give bit is currently embryonic but may become sig- the United States a reputation of being an un- nificant in the future. reliable supplier. Technology kept out of hands of the U.S. civilian space program (say, high- Intersections of the resolution remote sensors) may weaken its Lines of Competition ability to compete with foreign providers of remotely sensed images. In part because space activities are so heavily The impact of the U.S. military space pro- governmental, the political, military, and eco- gram on U.S. competitiveness in space indus- nomic lines of competition are not so divergent tries is complex and ambiguous. For example, as the above analysis might indicate. In fact, they billions of military dollars spent over many are sometimes difficult to separate. years have certainly helped to build the scien-

1 Political-economic: For example, when a gov- tific and technological base, the manpower, ernment undertakes to build a domestic launch and the plants which have made U.S. firms the vehicle industry (as have France and Japan), competitors they are in international space does it do so to conserve or earn additional markets.15 Potential competitors with the U.S. foreign exchange, or does it do so to remove point to this subsidization as ample reason for U.S. influence over the national space program? Economic dependence may seem insep- arable from political dependence, and economic independence may be sought even when it is economically inefficient. Govern- '1UNISFACE '82, op cat "ESA's bylaws prevent cooperation in military-related activities. ment efforts to subsidize exports of space "Technology and East-West Trade An Update, OTA-ISC-209 goods or services in order to gain political in- (Washington, DC. U.S. Congress, Office of Technology Assessment, fluence over potential buyers may have "mer- May 1983) "For a report on how government work has benefited one sup- cantilist" economic motives that reinforce the plier of space equipment, see James Cook, "A Paragon Called political competition. TRW," Forbes, July 18, 1983, pp 102-114 70 International Cooperation and Competition in Civilian Space Activities

their own government subsidies. On the other absorbs engineers, technicians, and special- hand. it is also true that the increasing govern- ized plants that might otherwise have partici- ment expenditure on military space programs pated more directly in the civilian competition.

NATIONAL PROGRAMS AND STRATEGIES Economic Motives for National The Programs Space Programs European Space Agency The economic motives for national space pro- The European Space Agency (ESA) is something grams are more complex than the straightforward more than an alliance of national space programs, desire to compete for international markets in but something less than a third space superpow- space goods and services.1 he space-faring coun- er. It is a mechanism for pooling the financial and tries commit national resources to space activities in part out of hopes or beliefs that: industrial resources (table 4-1) of several Euro- pean countries in cooperative space projects (see space research will contribute to the general also ch. 3). advancement of national scientific devel- The French threatened in 1970 to quit the Euro- opment; pean Space Research Organization (ESRO) unless efforts in space technology will contribute it reduced its purely scientific programs in favor to building and maintaining a strong national of developing applications satellites. In 1971, the technology base; European Launch Development Organization applications of space technology such as (ELDO) abandoned its planned Europa series of remote 51 ising or satellite communications launchers. Late in 1972, the French indicated a will contribute to national economic growth; willingness to provide the majority of funding for useful products will pin off from space tech- a European launcher. In July 1973, the ESRO nology; states accepted the Frenci; proposal. In the same leadership in space technology will benefit year, the European Space Council (with members other industries in international competition from both ESRO and ELDO states) arrived ata by promoting perceptions of the nation as "package deal" in which they agreed to form the being at the forefront of modern technology European Space Agency, combining the previ- in general; ous functions of ESRO and ELDO (the actual the space program will foster the develop- merger took place in 1975). ment of space-related industries with competitively exportable products; and During the late 1960s, West Germany sup- the export of space-related goods or services ported the French position on the importance of will help open up new markets for other a European launch vehicle independent of the high-technology exports. United States. In 1969, the United States offered the Eurorins the opportunity to participate in The mix of economic motives varies from coun- the Space Shuttle program. The Germans were try to country. Degrees and kinds of governmen- interested. More eager than the French to tal support for space activities therefore vary in strengthen cooperative ties with the United turn with national conceptions of how those ac- States, they were more willing to rely on U.S. tivit;Ds might contribute to economic growth and guarantees that the Shuttle would be fully avail- competitiveness. able for European satellite launches.

61 Ch. 4Competition 71

Table 4-2.National Shares of European Space Agency Projects, 1983

General budget Meteosat ERS-1 L-Sat phase Member state ESA Kourou Science exploitation Phase B ECS 1 & 2 ECS 3,4,5 C/D Spacelab ELA-2 Arlane 4 Belgium 4 61 4 49 4 50 3 72 3 27 3 19 3 70 5 07 11 00 2 80 Denmark 2 30 2 51 2 92 1 99 0 33 0 74 1 30 1 81 2 75 0 15 France 27 47 21 40 25 90 18 31 25 93 76 52 12 07 59 55 52 90 Germany 24 88 25 57 25 66 24 00 30 68 30 42 64 78 21 00 20 79 Ireland 0 49 0 54 004 Italy 7 36 12 46 12 46 10 61 14 78 13 85 3230 100 200 775 Netherlands 5 50 6 00 5 00 0 94 1 77 11 80 2 53 2 00 Spain 476 504 200 017 053 260 338 250 250 Sweden 3 92 4 25 3 90 1 62 3 97 139 Switzerland 3 84 3 99 4 10 1 70 2 13 0 55 100 100 160 United Kingdom 12 50 13 75 14 05 13 34 20 15 18 46 34 30 7 60 3 55 Other participants: Austria 0 38 0 75 0 76 Norway 0 54 1 50 Canada 1 45 9 10 900 Other income 11 31 A 83 3 75 4 53

Key ESA Kourou Launch facility in French Guana for the Arlane launcher EL: 1,2,3,4, & 5 Series of European Communication Satellites to operate 1984-1994 Science includes ExosatX-ray observatory satellite L Sat Development of large, muhl-purpose satellite for direct broadcasting. business communica- International Solar Polar Mission tions, experimentation with 30/20 GH1 technology HipparcosSpace astronomy satellite Spacelib Modular laboratory designed for U f Space Shuttle cargo bay Giottoprobe of Comet Halley Anane Development of vehicle to provide independent European launch services and to compete Participation in NASA Space Telescope in ti ..u.rn2i.r.a launch services Market Meteosat Exploitation Use of data from the ESA geostationary weather observation satellites ELA 2Construction of a second Arlane launch site at Kourou. French Guyana ERS IA remote sensing satellitewith sensors for physical oceanographyglaciologyand climatatology To be launched in 1987

SOURCE European Space Agency

When the ELDO and ESRO members combined charges the Agency with elaborating an "indus- those organizations in the new ESA, they agreed trial policy" designed not only to "coordinate na- on a division of labor among the three major par- tional space programmes in a cost-effective man- ticipants. France would pay for 62.5 percent of ner," but also to: the development of the ESA launch vehicle (Ariane). . ..improve the worldwide competitiveness of The United Kingdom would pay for most (56 per- European industry by maintaining and develop- cent) of the Marots maritime communications sat- ing space technology and by encouraging the ellite (later "Marecs A" and "Marecs B"). Ger- rationalization and development of an industrial many would take the lead in the Spacelab, a structure appropriate to market requirements, Space Shuttle project, paying for 52.5 percent of making use in the first place of the existing in- its development.16 Thus ESA's largest single proj- dustrial potential of all Member States." ect, the Ariane launcher development under Citing ESA accomplishments in space science, French leadership, was designed to deal compet- it satellite telecommunications, and in launch itively with the U.S. space program. The second vehicles (the Ariane), an ESA official boasted in largest project, the Spacelab under German icid- 1982: ership, was designed to increase cooperation wiZh the United States. [these are]... caseswhere Europe can be described as a winning participant in the global The explicit rationale for ESA was to allow the world competition for space products, compet- member states to combine their resources for ac- ing successfully with the superpowers, whose tivities in a fieldspace technologytoo costly space potential is well known to everybody and for any single European nation to engage in alone. whose monopoly one thought could not be The Convention chartering ESA spe,:ifically menaced.' 8 " "Convention for the Establishment of a European Spats! Agen- leMichiel Schwarz, "European Policies on Space Science and cy," Article VI Technology, 1960-1978 Research Policy 8, 1979, pp 204-243 "Danner, op cit , p 37 72 International Cooperation and Competition in Ch an Space Activities

The members of ESA expect an econu.nicre- For example, the European Space Agency Con- turn from *heir participation in its activities, and vention nu-A/ides that the industries of the mem- the Agency has tried to show that thoseexpec- be, states should share "equitably" in the work tations are being met. It commissioneda series of ESAthat the contracts granted should be in of studies with the Theoretical and Applied Eco- rough proportion to the contribution of each nomics Bureau (BETA) of the Louis Pasteor Uni- state's government to ESA. This has become versity of Strasbourg aimed at showing theeco- known as the principle of "fair retui n" or juste nomic benefits of being in ESA. BETA askeda retour. The principle of fair return means that ESA sample of 77 firms to identify the economic value is not able to choose those firms thatmay offer of the benefits they derived from having received the best combination of quality and cost, but in- ESA contracts. The benefits were describedas: stead must distribute its contracts geographically. "technological"- -development ofnew products, Then, too, the necessary intermeshing of various diversification into new fields; "commercial" national elements into a single project must im- increased market penetration; "organization and pose additional costs on the manufacturers. methods "-- knowledge and management techniques learned which improved internalopera- Other circumstances also deprive the European tions; "work factor"value of building skilled de- space-related industries from the benefits of com- sign E nd production teams. petitive bidding. One problem is that expensive space projects become objects of political pres- The study concluded that the $1 billion which sure. Most ESA contracts are currently negotiated ESA and its predectsir.As had granted in contracts directly rather than competitively. Another prob- from the early 196C Lnrough 1975 had yielded lem is that although three internationalconsor- another $2.7 billion in ben-fits tosome 550 con- t a formerly competed for ESA contracts, those tractors. In particular, additional exports of $6L2 consortia are breaking down because of indus- million were attributed to the "technological" trial mergers, the juste retour principle, and the and "commercial" categories of benef',: lack of sufficient business to keep all of the con- This indicates the successes achieved by ESA's sortia working at once." contractors in penetrating difficult export rra, Differences in national nriorities have led tc sig- kets such as the United States, where they Fave nificant departures from another important prin- taken part in space programmes funded by ciple. that of a single European "industrial struc- NASA and INTELSAT." ture. ' The communications satelli. industry is As one judges the validity of ESA claims about especially fragmented. Although the*area mari- the economic value of itsprograms, one should time communicaSons satellite is an ESA project, of course realize that ooth ESA and itscontrac- with the se :ond, Marecs B, sat- Ilite, British par- tors have a vested interest in showing that nation- ticipation went to 69 percent, while the next big- al returns from the ESA subsides are greater than gest share was only 13 percent, held by Ger- the face value of the contracts. Mores:).er, despite many.* .. .Eurupean Communications Satellit-s the apparent successes of some Europeanaero- (ECS), for telephone and some televisiufi trans- space firms, ESA programs have not necessarily mission, have more even participation: Germany maximized European competitivtness in interna- 31 percent France 26 percent, United Kingdom tional markets. The European Space Agencyto 20 percent, Italy 14 percent. :: ame extent reflects the continuing resistance of Western European nation-states to genuine integration into a larger political and economic unit.

"See W. Thoma, "The Sophia Antipolis Workshop on the Rela- ""Economic Benefits of ESA Contracts: Summary of a Stu ly Con- tionship Between ESA and Industry," ESA Bulletin, May 1983, pp ducted by the Theoretical & Applied Economics Bureau of the Louts 13-15. Pasteur University of Strasbourg for the European Spice Agency," Moms B failed to orbit because of a Iaurch failure. Marecs 62 ESA BR-02 (Paris: European Space agency, October 1979). was successfully launched and depinyz-d in November 1984.

83 Ch. 4Competition 73

But in direct b. )adcast satellites, the i ntra-Euro- d'Etudes Spatiales (CNES) manages riost of the pean competition seems to be growing. Within French space program (table 4-2). CNES is an in- ESA, the British (34 percent) and the Italians (33 dependent agency under the "tutelage" of the percent) are leading the development of the L Ministry of Research and Industry. It disposes of Sat entirely without French and German partici- an annual budget of around 3 billion francs pation. Germany aid France are sharing in the (abcut $325 million) (fig. 4-3). Much of that development of direct broadcast satellites (the TV- money is spent with the four largest aerospace Sat/TDF 1) entirely outside the ESA framework. firms of France: Aerospatiale, Matra, SEP, and Meanwhile, the United Kingdom, despite the lack Thomson-CSFfirms that are themselves owned of an agreed European standard for satellite di- by the French Government (table 4-3).23 rect broadca.ting, is proceeding with its own na- CNES, like NASA, opera:es government research tional direct broadcasting satellite. laboratories and oversees contractor work on satellites and launch vehicles. Unlike NASA, CNES France itself is a key shareholder in important commer- In the 1960s, France identified certain indus- cial ventures. Not only has CNES managed the trial projects as 'national champions 'projects development of ESA s Ariane launcher, but it is intended to bring France prestige and autonomy the largest single shareholder (34 percent) in as well as economic benefit. One such project Arianespace, the company created to manage the was the Concorde supersonic transport, a tech- marketing, production, and operation of the nical success but an economic failure. Another rocket. Similarly, CNES holds 34 percent of SPOT was the Plan Calcul, intended to France a Image, S.A., the company which will sell the serv- highly competitive computer industry (marginally ices of the French SPOT remote sensing satellite. successful at best). The French Government con- CNES formulated the French space policy tinues to try to guic1,1 the deve!opment of French adopted by the French Government in October industry through formal plans (the eighth such 1981. According to the Director of Programs of plan is now in effect). There is less emphasis on CNES, the objectives of French space policy specific projects like the Concorde, but some include: spice projects seem to have taken on the ro:e of "national champion ," pursued as much for To consolidate our position in the principal prestige and independence as for economic re- domains of appl;cation (telecommunications, sults.2' television, Earth observation). to construct a solid space industry and enlarge our penetration of French President Mitterand and his first Minis- (he international market for launchers, satellites, te- )f. Research and Industry called for increased and associated services and ground equipment." research aimed at restructuring French industry In addition, the French space p-ogram is to to reduce imports and increase exports of high- carry out basic engineering and sr!:.ntific research technology products.22 The Centre National to prepare for chahges in .,,ace systems of the

"For a summary description of recent French industrial policy, see "Appendix D. Foreign Industrial Policies" in U S Industrial Ministry of Research and Technology), September 1982. See also Competitiveness: A Comparison of Steel, Electronics, and Automo- Joel Stratte-McCk re, "French lechnology: Preparing for the 21st biles, OTA-ISC-135 (Washington, DC U S Congress, Office of Tech- Century," Special Advertising Supplement to Scientific American, nology Assessment, July 1981), pp. 190-200. November 1982, pp. F1-F30. 22 'Mercantilism for the 21st Century," Business Week, Jan 10, 230ne firm, the Societe Etik:peene de Propulsion (S.E.P.) nicely 1983, p. 54, For a fuller report on French industrial policy, see the illustrates the French competitive attitude. The French Government special report on "France," the same issue, pp 45-74 created the firm in 1969 to develop solid rocket motors for the See also Jean-Pierre Chevenement, Minister of Research and lo- French nuclear missile force. In 1971, the Ba!iistics and Aeronautics dustry, "La Politique Inaustrielle," in Industrie & Energie Francaise Laboratory (1.R.8.A.) was folded into S.E.P. to ". .. create a unit Lettre d'information No 101 ;;'aris: Ministry of Research and In- competitive with the American companies in the domain of large dustry, Sept. 7, 1982). In this speech, the Minister outlned his views liquid-fueled motors for satellite launchers." Pierre Soufflet, presi- on industrial policy to the heads of the French national research dent ; Ad director general of S.E.P.,"La S.E.P.," in "Les quatres organizations and of the nationaliz.d industrial enterprises. grands de I'industrie spatiale francaise" in Lei Cahiers Francais, No. For a description of French industria' esearch objectives, see Re- 206-207, May-September 1982, p. 11. cherche et Technologic., No. 2 (moottAy information letter of the "Luton, " op. cit., p. 94.

84 74 International Coopera'on and Competition in Civilian Space Activities

Table 4.3.French Space Programs

Project Mission Year Comment National programs Telecom I Business telecommunications, TV; 1983 Telecom s,tellites 1A and 1B; Ariane telephone; overseas connections launchs. SPOT .Inventory of terrestrial resources by 1985 SPOT 1 satellite; Arlene launcher satellite remote sensing Bilateral programs ARGOS ...... Operational service of iocaticn ant 1978-1989 French system aboard 10 U.S. NOAA collection of meteorological and satellites oceanographic data ARCAD 3 Study of the magnetosphere 1981 Soviet Arcad satellite; French computer and experiments SARGOS .Search End rescue of ships and planes inFrom 1982 French system aboard 6 U.S. NOAA distress satellites First manned flight...Studies of materials, astron-iy, 1982 French experiments conducted with medicine, biology aboar Soviet space French-Soviet equipment station Venera-Halley ...Study of Venus in 1985 and Halley's Comet in 1986 1984 French experiments on two Soviet probes TDF 1 ... ..Direct Broadcast Television satellite with 1985 Cooperative program with West Germany; two France networks 1 French TDF 1 satellite, 1 German TV-sat Projects with European Space Agency (degree of French participation varlet) Ariane 1,2,3,4 .European heavy launcher developed under1979-1986Arlene 1 qualified 1981; Arlene 2-3 two sL ,erviaion of CNES flights In 1984; Arl.,n,1 4 avallnble 1986; Financing mostly Fret ch Meteosat .Imaging, broadcast and collection of 1(112 1 European Meteosat satellite: Arians meteorological data launcher MARECS .. Maritime communications 1982 Marecs A lost in Arlene lawch failure; Financing mostly British EXOSAT . X-ray astronomy 1982 Satellite planned for Arians launch but switched to U.S. Delta launch, r ECX European Communications Satellite; intra-1982-19905 satellites; Arlene launcher European telephone and telegraph Spacelab ..Orbiting laboratory integrated with U.S. 1983.1988 Financing predominantly German space shuttle Giotto . . Study of Halley's Comet 1'45 Planetary probe to be launched In July 1985; Overflight of Mars in 1986; Arlene launcher Hipparcos Study position and movement of stars 1986 Satellite to be launches by Arians intornationd programs Intelsat V International telecommunications Since 1980 12 satellites plus 3 options on Intelsat network; Launchers: Arlene and Atlas Centaur SOURCE Plapted from Cahers erancals, "Les enjeux de l'esnare," No 208-207, May-Sepatember 1983,p 91

1990s, to participate in international research, particularly in international markets, from the com- and to maintain European solidarity andcoop- petence and methods acquired over 15 years."25 eration. Although the French space program is gener- CNES is to work closely with other French Gov- ally justified in terms of its contribution to indus- ernment agencies to respond to their special trial competitiveness, two projects in particular needs in such areas as meteorology, telecommu- have the flavor of the "national champion" ap- nications, broadcasting, and national defense. At proach: they may be pursued as much for their the c?:f.1 time its mission also includes "the encouragement of French industry to get full value, 19ean-Matte Luton, "Le C N.E.S.," , p 96. Ch. 4Competition 75

Figure 4.3.CNES and NASA Budgets Compared' Grman industry, to be a cooperative trading Franca. CNES partrer and ally (e.g., Ariane and Spacelab), and, R&D Program in the case of communications satellites, to realize support some of the benefits of space applications. The German space budget of about $350 million a year is administered by the Ministry of Re- Applicaticns search and Technology (BMFT) (fig. 4-4). An official BMFT document describes the purposes of the space program this way: R&D United States NASA Launchers 1. Advancement of basic research as a cultural contribution and basis of a longer run security and productivity of c -Jr economy. Ger- many belongs to the small circle of countries which have traditionally advanced fundamental research. These countries are the same that today possess the strongest economic power in the world and have reached the highest standard of living. Thanks to the advancement so far, the employment of space technology has become a firm corn - ponert of the methods of basic research in the Federal Republic of Germany (FRG). This component should be secured and further developed. 2. Innovation through the application of space technology above all for public services, where satellite communication and Earth observation stand in the foreground. Further, aArea of circle -apresents relative size of space budgets with its extreme demands on scientific and SOURCE Office of Technology Assessment technical creativity, the space program should stimulate motivation and productive contributions to visibility and prestige as for their readinessinallareas of science and promise of economic return. One project is the economy. Ariane rocket, formally an ESA program, but pre- 3. Strengthening of the competitiveness of in- dominantly a French one. The other is the SrOT dustry through direct commercial utilization land remote sensing satellite, which.dr iC° proof space technology. The industry should ceeded with independently when it was not ac- reach a level of accomplishment that allows cepted as an ESA project (see chs. 5 and 7). it to aciiieve a share of the world market for space-technological products (table 4-4). West Germar., Our own use of these products for public services will advance competitiveness in the Unlike France, which seems determined to es- world market.26 tablish and promote particular space businesses (launch services and remote sensing) in the world market, West Germany seems more inclined to support space activities for more general pur- 26Der Bundesminister fur Forschung and Technologie, Viertes Weltraumprogramm, Bundesrepublik Deutschland (Federal Repub- poses: to invest in basic scientific research, to I c of Germany. Ministry of Research and Technology, 1982) (OTA enhance the overall technological capabilities of t 'ansiaLon of quotation).

8 6 76 International Cooperation and Competition in Civilian Space Activities

Table 4.4. Turnover of Major French Space Firms (millions of French francs)

1978 1979 1980 1981 Asrospatlels Subtotal space and missiles 1,781 2,543 2,542 2.845 Total 9,500 11,400 13,200 16,500 Percent space and missiles... 19 22 20 17 Metre Satellites 172 169 285 4:3 Launchers .... 67 85 55 152 Other 51 Total space .. 239 254 340 702 Total 2,249 2,939 2,903 4,501 Percent space . 11 9 12 16 SEP Satellites 7 6 33 62 Launchers 344 291 244 342 Subtotal space 351 297 277 404 Total 834 773 908 1,055 Percent space . 41 38 31 38 Thomson-CSF Satellites 53 53 13 250 Ground Equipment 219 275 421 NA Space 272 328 560 NA Total 6,955 9,440 12,794 NA Percent space 4 3 4 SOURCE SEST, "L'Industire Spatiale Dane Le Monde," vol 1, Paris

Figure 4.4. Funding OrganizatPon of Table 4.5. Turnover In the Largest German Space Activities German Space Firms, 1981

Personnel Turnover (space (million Company activities) dollars) Messerschmitt-Boelkow- Blohm/ERNO.... 1,200 177.60 Dornier NA 88.80 AEG-Telefunken ...... Other German Foreign 600 39.96 authorities authorities NANot available SOURCE SEST, "L'industire Spatial, Dans Le Monde," vol 1, Paris

Given tEe ability of the Spacelab to support maf.ned experiments in orbit, materials processing in space is a logical field of interest for Ger- man research.27 (See ch. 8, "Materials Process- ing in Space.) The FRG contributes well over 25 percent of the ESA microgravity research program, its snare for 1984 being some $12 million.

"The German reason for building the Spacelab had more to do with wanting to accept the partnership in advanced technology of- Projects and programs fered by the United States than it did with any a priori belief in the usefulness of the Spacelab in developing a materials process- German aerospace research establishment ing industry SOURCE DFVLR

6 I Ch. 4Competition 77

Recently, ESA approved Phase II of this program; tu red goods and more dependent on the export it will run from 1985 to 1989 with a total budget information and technology produced in Japan. envelope of some $170 million. Of this, the FRG Consistent with this approach is an emphasis on has agreed to contribute 40 percent. Total FRG strengthening Japanese science and technology. spending for MPS research totaled $28 million in 1984, a sum rivaled only by NASA's 1984 expend- JAPANESE SCIENCE AND iture of about $25.6 million. TECHNOLOGY POLICY The Japanese are fully aware of their national Japan weaknesses in science and technology (compared with, for example, the United States). Their Over the past several decades, Japan has evolved government 'las outlined policies to build on Jap- a variety of mechanisms by which the govern- anese strengths and remedy their weaknesses. mentparticularly through the Ministry of Inter- Japanese research expenditures account for national Trade and Industry (MITI)influences about 10 percent of the world's total, as does the private businesses so as to try to shape the na- Japanese GNP. Japan also possesses about 12 per- tional economy along planned lines. These mech- cent of the world's researchers." It exports about anisms have included: 12 percent of the world's technology-intensive

.. .selective access to governmental or govern- products. Using a mix of indexes of technologi- ment-guaranteed financing, targeted tax breaks, cal "power," the Japanese Science and Technol- government-supervised investment coordination ogy Agency found Japan to be relatively high in in order to keep all participants profitable, the current technological capability, but lower than equitable allocation by the state of burdens dur- desirable in the potential for developing new ing times of adversity ...,governmental assist- technology. In terms of royalties paid for the ance in the commercialization and sale of prod- licensed use of foreign technology, Japan is still ucts, and governmental assistance when an a net importer of technology. Even so, when new industry as a whole begins to decline.28 annual licensing only is me,- -ured, Japan has al- There is considerable debate about whether ready begun to export more technology than it MITI has enforced a strategic "industrial policy" imports. which successfully picks and promotes "winners" in international economic competition." What- The Japanese Government wants to reinforce ever the actual effectiveness of MITI, its economic this trend. It has concluded that in order to do planners did design a new strategy they hoped so it will have to increase government support would adapt the Japanese economy to the new of the basic research that can lead to new tech- conditions encountered in the 1970s and ex- nology in the longer run. As other observers have pected in the 1980s. noted: The current Japanese declaratory strategy ...there is a distinct bias in Japan's t-verall re- stresses growth of "knowledge-based" industries search expenditures toward applicd research and prototype developmenta bias reflected development of Japan as a "high-tech- and ti both in government-supported R&D and private nology" society, one less dependent on the im- sector re,:earch expenditure.31 port of raw materials for re-export as manufac- In the latter months of 1980, the ministers "Chalmers Johnson, MITI and the Japanese Miracle. the Growth whose tasks related to science and technology of Industrial Policy, 1925.1975 (Stanford rA. Stanford University met and agreed on a set of policies intended to Press, 1982), p. 311. "Cf. Roberts, op cit., Philip Trezise, "Industriai ^v Not the "make Japan into a so-called science and tech- Major Reason for Japan's Success," The Brookings Revic w, spring nology oriented country." The first measure in 1983, pp. 13.18; Gary Saxonhouse, "Japan ese High Technology, Government Policy, and Evolving rimparative Advantage In Goods this new set of policies was to increase govern- and Services" (University of Michigan, Department of Economics: photocopy, Apr 1, 1982.); Jimmy Wheeler, Merit E. Janow, and "Much of the following taken from ' ;^ience & Technology White Thomas Pepper, Japanese Industna' Development Policies in the Paper '81 Released," Science & Technology i.; Japan, January 1982, 1980s Impitcations for U.S. Trade and Investment (Croton-on-Hud- pp 6-14. son, NY. The Hudson Institute, 1982), p 138. 3,Wheeler, Janow, and Pepper, op. cit

88 78 International Cooperation and Competition in Civilian Space Activities

ment investment in research and development vides the Commission staff. In October 1969, the (R&D),32 and thereby increase the proportion of SAC put together the first "Space Development national income devoted to R&D to 2.5 percent Program," a plan it reviews annually. 35 and eventually to 3 percent.33 The government undertook to improve the coordilation of nation- In 1978 the SAC issued an "Outline of Japar's al R&D policy among several ministries andagen- Space Development Policy," enunciating "prin- cies. In fiscal year 1981 it appropriated a special ciples" and "priorities" for the long term. Al- "Science and Technology Promotion Coordina- though the policy statement holds as a priority tion Fund" to be managed by the national Coun- goal "keeping Japan's level of science abreast cil for Science and Technology. (This fund went with international standards," the key words are from about $14 million in fiscal year 1981 to probably "...promoting the development o: about $25 million in fiscal year 1982.) science and its application in ways suitable to Ja- pan." Although the Japanese Government has recognized the neee. increase basic research, it has Space science: Japan has launched several sci- also selecter.Jule specific areas of applied re- entific satellites for observing astronomical, search th& it thinks will help advance the goal near-Earth space, ionospheric, and atmospher- of becoming a "technology-oriented country." ic phenomena. They will send their first inter- One such area, a highly visible one, has been that planetary satellite, PLANET A, to study Halley's of industrial robotics. Japan has already assumed Comet this year. They built hardware for the world leadership both in the use and the export joint U.S.-Japan Space Experiments with Par- of computer-controlled machines in man ufactur- ticle Accelerators aboard the Space Shuttle's ing.34 Anothc: well-known project is the "Fifth first Spacelab mission in 1983. Pursuing space Generation Computer Project," a research effort science is consistent with the Japanese goals on which Japanese Government and industry will of promoting basic research in Japan and par- spend about $500 million over 10 years. taking of the benefits of international scientific cooperation. THE JAPANESE SPACE PROGRAM Meteorological satellites:In1984, Japan launched its third geostationary meteorological The Japanese space program, although notex- satellite. (It should be noted that Japanese me- plicitly a part of this "high-tech" emphasis, seems teorological satellites have relied heavily on to be consistent with it. About 16 percent of all American suppliers of key technology.) the Japanese Government research and development weather information provided to Japan is ob- expenditures is space-related. In 1968 Japan viously of benefit to the Japanese economy, formed a Space Activities Commission (SAC) to particularly because Japan is so fully a maritime formulate space policy (fig. 4-5). The chairman nation. But by beaming its images to 13 other of this five-man Commission is the Minister of the Asian and Pacific nations, the satellite also rein- Science and Technology Agency; the STA pro- forces Japan's efforts in international cooperation. ""Science & Technology White Paper '81 Released," op cit, p 11 The progral.i contributes to Japanese inter- The other elements of the policy for promoting science and technolo- national policy in other ways as well. The first gy were as follows Expansion and in-,rovement of evaluation systems, Japanese weather satellite, launched in 1977, EstablishmentOfan organic system for coordinate g activities among was a part of the World Weather Watch pro- academic, industrial and government circles, Promotion of original scientific and technological development, gram of the First GARP (Global Atmospheric Recruitment and training of scienc. id techn3logy personnel, Research Program) Global Experiment.In Promotion of international cooperatit,in science and technology "The United 3 ates tlready was spending abort 2.5 percent, but 1978, Japan held a Joint U.N./WMO Training about a quarter of th.. went to military research, while much less Seminar on the Interpretation and Analysis and Japanese research is m .1:ary Use of Meteorological Satellite Data for Asia "See, for example, Computerized Manufacturing Automation Employment, Education, and the Workplace, OTA-CIT-235 (Wash- ington, DC. U 5 Congress, Office of Technology Assessment, April "Masao Yoshiki, "Japan's space Programs," International Aero- 1984) space Symposium, Paris, June 2-3, 1981, p. 1

8 J Ch. 4Compe:!:lon 79

Figure 4-5.Schematic Chart of Organization for Spas.. Activities

1--mmil immtimmil.=immu---- .,1e... _

i ___ a a -j --1 1 L_ ____-----4111111111111

-111111111111-M1=111

NOTES Government funded special organization. 'Momper companies and trade associations Include. C. hoh & Co., Ltd./Deichil Chemical industries, Ltd./Daido Oxygen Co, Ltd/The 014ch1 limey° Bank, Ltd/The Fe. p Bank, Ltd/Fujitsu LinetedhClacN, LtdAshlkawalinia44arims Heavy Industries Co.. Ltd.ftwatsu Electric Co . Ltd/Japan Aircraft Mfg. Co.. Ltd/Japan Aviation Elec. tronics Industry, Ltd/ lapin Broadcasting Corr/ration/Japan Propellent industry Co., Ltd/Japan Radio Company Ltd./Kawasaki Heavy Industries, LIO/Kokusal Den- shin Denvra Co . Ltd/Kokusal Electric Co.. Ltd./Kyokuto Bald Melts. Ltd./The Kyowa Bank. LTD/Kyushu Electrical Construction, Ltd/The Long-Tenn Credit Bank of Japan Ltd/Men/bent CorporstIon/Malsushila Communication industrial Co., Ltd/Melsal Elactric Co , Ltd./Mitsublehl Corporation/Mitsubishi Electric Corporitlonl Mitsubishi Heavy industries, Ltd Mitsubishi Ptecision Company, Ltd/Mitsubishi Space Sofhvars Co, ltd./MItsul & Co., Ltd./Mitsul Engineering & Shipbuildi ng Co. LIuJNAC Incorporated/NEC-Honeywell Spate Systems, Ltd/Nippon Electronics Development Co.. Ltd/Nippon Dace* Company, Limited INECyNippon 011 & Fats Co , Ltd/Nippon Sanest K.Kftlippon Steel Corporationftlippon Telegraph and Telephone Public CorporatIoNNImen Motor Co.. Ltd.ftliesho Iwal Corporation/Old Elea trio industry Company, Ltd/Oltura and Company, Ltd./Remote Sensing Technology Center of Japan/The Sanwa Bank Ltd/Sharp Corporation/TM Society of Japanese hwoParn ComPailell. Inc/Biliftltorno CorporatIoNSumitomo Precision Products Co. Ltd./System Development Corrorstion of Japan, Ltd./TEISAN K.K /Tokyo Ali craft instrument Co, Ltd./Toray Industries Inc/Toshibs Corporation/Tokyo Communication Equipment Co. Ltd/The Yokohama Rubber Co. Ltd. SOURCE National Sr we Devalopmant Agency of Japan

',JO 80 International Cooperation and Competition in Civilian Space Activities

and the West Pacific, bringing together 32 rep- the international competition in launch vehi- resentatives of 19 countries.36 cle services. But that day is not on the imme- Launch vehicles: Building on American tech- diate horizon: the modest payloads deliverable nology (licenses to make the McDonnell Doug- by the H-I will not match the capabilities of las Delta), Japan is developing its own stable the Ariane series, iet alone that of the Space of launch vehicles, to culminate in the H-I and Shuttle. Indeed, a major communications sat- H-II. The former will be capable of delivering ellite planned for the late 1980s by Nippon 550 kilograms of payload to geosynchronous Telegraph & Telephone (NTT) will be far too orbit. (See ch. 5 for more details.) The Japa- heavy for the Japanese launcher. nese launch vehicle program is consistent with Satellite communications: Satellite communi- the principle of "autonomy." It also opens up cations has offered one promising avenue the possibility that someday Japan will enter along which Japan can pursue its goal of da- veloping a high-technology, information-based 4"National Paper Japan," op cit, p. 25 economy. NECwith technical assistance from

91 Ch. 4Competition 81

Hughe, Aircraft Corp.has become the lead- The Japanese National Aeronautics and Space ing manufacturer of INTELSAT satellite trans- Development Agency (NASDA) plans to launch ponders and ground terminals.37 the first of a series of ocean and land remote In February 1983, Japan launched the world's sensing satellites in 1986 (see ch. 7). Mean- first operational Ka-band (30/20 GHz) commu- while, remote sensing is one of a handful of nications satellite. Japan plans a series of di- fields selected by the Council for Science and rect broadcast satellites and is conducting re- Technology as a "new vital research theme" search on mobile satellite communications. to receive support from the Science and Tech- They reportedly intend to begin launching mul- nology Promotion Coordination Fund.4° One ti-beam communications satellites in 1988, as reason for Japanese Government support of a part of NTT's "Information Network Sys- supercomputer technology is the large-scale tem."34 computing capacity useful for remotely sensed Satellite communications will allow Japan to image processing.4' improve its domestic communications net- The Japanese Government has not stated an works and no doubt contribute in that way to intention to make Japan an active competitor the advancement of Japanese technology. But in the international remote sensing market. presumably the industry will also more directly Even so, the Japanese program could put Ja- draw on and stimulate Japanese strengths in pan in a position to: electronics technology. As the first, or close to satisfy future Japanese remote sensing needs the first, operators of a Ka-band satellite com- without dependence on foreign satellites or munications system, Japanese firms may be in image processing facilities; a position to compete more fully in any inter- enter the market for image-processing equip- national satellite market that develops for ad- ment and software; vanced satellites of this type. enter the market for remotely sensed data, Remote sensing: In 1975, the Science and image processing, and image analysis; and Technology Agency formed the Japan Remote offer remote sensing services to less devel- Sensing Technology Center (R1.STEC). Since oped countries in exchange for special con- 1979, Japan has had an operational Landsat re- sideration in supplying nonrenewable receiving station. In 1981, the Machinery and In- sources. formation Industry Bureau of MITI created a public nonprofit corporation (v i^,h funds from As an especially knowledge-intensive, high- 27 firms), the Earth Resources Satellite Data technology industry, remote sensing seems to Analysis Center. One objective Of the ERS-DAC be a natural choice as a small element in the is to help locate mineral resoi rtes (the Presi- stated Japanese industrial strategy for the 1980s dent of ERS -DAC is Director of the Japan Pe- and 1990s. troleum Exploration Co.). Another seems to be In sum, the Japanese have been making steady to lay the groundwork for marketing remote progress in -pace, but their program has, for the sensing services.'9 past several years, maintained a level budget (fig "See U.S Congress, House Committee on Science and Tech- 4-6), which means that their real effort has de nology, Science, Technology, and Energy P.'port of a Congressional dined after inflation.42 Like the other spac Study Mission, 97th Cong., 1st sess., Serial Q, May 1981, p. 19 See also Neil Davis, "First Japanese Mass Production Satellite Plant Completed," Space World, January 19f3, p. 33. 'Japan to Launch a Multi-Beam Comm anications Satellite," Aero- space Daily, Aug. 24, 1982, p. 301. remote sensing analysis techniques. Source: 1982 ERS-DAC ' ERS-DAC activities include the follc.wing. contracting for re- brochure search and development in computer Image processing and anal- ""New Fund for Coordination and Promotion of Science and ysis software; contracting for research and development on the geo- Technology Policies, "Science & Technology in Japan, January 1982, logic applications of remote sensing for finding nonrenewable p 21. resources; engaging in foreign marke. research on user needs and "See buzbee, et al, op. cit.. p. 1189. the technical state of the, art; exploring foreign technology transfer "Takashi Yamada, "Japan's National space Program Current and liaison with foreig.i remote sensing organizations, sponsoring Programs and New Directions," Space: The Next Ten Years, T SA symposia and publishing documents for internal dissemination of Symposium Proceedings, 1984, p. 324. 82 International Cooperation and Competition in Civilian Space Activities

Figure 4-6.Japanese Space Budget Budget for Japan's space activities 150 ElNon-governmental user's contributions 140 (NTT, NHK, KDD, etc) to NASDA, since 1979 132 4 133 3 129 6 600 130 NASDA (1969 -1 Non Gov 117 6 120 National Space Development Center, STA ( - 1968) conic' 107 1 110 ISAS (1981 -1 111101 500 ISAS of University of Tokyo ( -1980) 100.3 100 944_96.0 88.0 90 Others 400 77 0 SS. 80

E 70 Gov 300 60 57 5 r budget

50 200 40 36.6

30 24 0

15 4 100 20 14 8 9.2 10 72

Years NOTE Since 1961, the proportion of GNP and the national budget devoted to space developments Ms remained constant at 0 2% and 004% respectively

Growth of NASDA's budget

1,1085 1,101 8 1'114 9 .=,...-601.111111 1,100

,1,1451 eo% 1,000 990 8 euoc:,..\oe

912 4 4101 900 (388%) 400 860 0

800 797 5 799 3 738 1 9\o 700 0/ 0 623 6 st"° = 600 368 2 E (330%) et' 8500 479 5

400 ::::::"C: 0:fir::::::::!::: 94)/21*/*3:$0::\\C .:::::\ e 303 4 300 04 )00 187 4 7 '6 f (4) AN% 100 200 (66%) ----- '190136e.46011 ecto (4,1'1:1 %h"'008 102 8 106 3 196 )1 7%, 100 '',00- Or° %\CP 31 3 sek Pete. (128%) Pe1\- 6°

kl 1970 1971 19721973 1974 1975 1976 1977 1978 1979 1930 19811962 1963 1984 Years

NOTE TM figures In parenthesis are tM percentages of tM total budget Dollar figures calculated, for information only, at rate of 240 yen to tM dollar (U.S.) SOURCE National Space Development Agency of Japan

93 Ch 4Competition 83 powers, Japan has accepted the assumption that and doing so with increasing independence from a government space program will ultimately con- U.S. technology and equipment. Whether they tribute to national economic well-oeing. japan are to become major competitors in the interna- has not specifically identified space industries as tional markets for space-related equipment (be- "targeted" for special emphasis in export com- yond the electronic components and ground sta- petition. The Japanese space program instead tions they now sell) and for services will probably seems aimed at developing space technology not be apparent until the 1990s.

THE WORKABILITY OF COMPETITION IN SPACE-RELATED MARKETS

As space applications become more commer- In international satellite communications, which cial, questions of industrial organizationcom- has traditionally been organized noncompetitive- petition, monopoly, regulationand of interna- ly, technological changes, the newly competitive tional trade assume a greater role in discussions long-distance telephone industry in the United of space policy. At the same time, debates over States, and the Government's drive for a broad competition and protection are staples of public agreement on international trade in services are policy in many other areas of the general econ- among the elements forcing the focus of the omy; much of this wider debate is relevant to the space policy debate to change. emerging space industries. Moreover, some policies in the space aren-. may be determined by International Commerical Competition broad existing U.S. policies governing competi- in Space-Related Markets tion and international tradein the general economy. As the earlier part of this chapter has demonstrated, the space arena has been and continues Space transportation and satellite communica- to be the scene of political competition among tions are two technology sectors that provide ex- space powers. It is also the scene of growing com- amples of this shift of focus of the space policy mercial competition in most space-related sec- discussion onto questions of industrial organiza- tors. The competing enterprises may be private tion and international trade. As private sector and firms or governmental organizations. They are foreign space transportation firms challenge the subject to greater or lesser coverage of general position of NASA as the U.S. Government space international trading rules that govern commerce transportation "firm," the question of whether among nations in today's world." In certain in- or not the industry can be organized competi- tivelyor should berevolves around the questions of Shuttle pricing, government procurement, "App. 4A surveys the international trading rules applicable to and U.S. and foreign government subsidization. space commerce.

94 84 International Cooperation and Competition in Civilian Space Activities

9;, Ch. 4Competition 85 stances they are also governed by domestic and and the European countries and Japan have spe- international regulation. cifically excluded their PTTs from coverage. Be- cause the PTTs largely follow "buy-national" pro- The International Trading Regime in curement policies, American aerospace and tele- Space-Related Equipment communications equipment firms are systematically excluded from a significant share of the The current structure of international trading international trade in satellites and ground-seg- rules is primarily designed to regulate trade in ment equipment. commodities rather than services. Although the multilateral rules and understandings that have Under considerable pressure from the United been negotiated through GAIT" and OECD45 do States, Japan agreed in a 1981 bilateral agreement have a significant effect on international trade in to open up government procurement for the NTT equipment in general, especially when the stakes to American equipment suppliers.46 This agree- are relatively small, the many exceptions, exclu- ment was also extended to the suppliers of all sions, escape possibilities, etc., that have been other countries and in 1984 was extended to De- built into the rules can be used by sovereign gov- cember 31, 1986. U.S. observers currently dis- ernments to avoid effective trade discipline when agree about whether enough progress in open- the stakes are large or when political considera- ing up NTT procurement occurred to justify tions dominate. renewing the agreement or not. No important progress has taken place in opening up European Since France and Japan, and to a lesser extent telecommunications equipment markets. other industrial countries, have made the decision to join the United States as space powers, In third-country markets, the GATT Subsidies it would be wishful thinking to believe that they Code, a second major multilateral trade agree- will fully abide by the trade rules in competition ment, in theory, limits all kinds of subsidized ex- for sales of space-related equipment. In most port competition. In practice, however, it has not areas they would probably lose out to U.S. sup- been used to cover the important types of r J bsi- pliers in open competition, as a result of the price- dies in space-related equipment exports, such as quality dominance of the latter. R&D subsidies and the subsidized operation of government space organizations. Although these From the point of view of U.S. space-related types of subsidies affect export competition, they equipment suppliers, perhaps the most damag- also have justifications unrelated to international ing exclusion in the trade rules is the exclusion trade that are within the sovereign powers of in- of the major non-American buyers of satellite dividual nations. Separating the effects of these communications equipment from the list of gov- subsidies on trade from other effects has not yet ernment organizations covered by the GATT been attempted to any extent in the case of R&D Government Procurement Code. These organi- subsidies. zations are the European and Japanese PTTs (post, telephone, and telegraph organizations) The OECD Arrangement on Officially Supported that have communications monopolies (or near Export Credit, a third major multilateral trade monopolies) in their respective countries. The agreement among the industrial countries, is de- code document, which has been signed by most signed to eliminate one particular type of export of the industrial countries, specifies which gov- subsidysubsidized credit. It applies to sales by ernment agencies in each country are covered, both private and governmental organizations and is effective to a degree in preventing competition "General Agreement on Tariffs and Trade The name refers both for third-country markets using subsidized export to a treaty adhered to de lure and de facto by 117 countries and finance. Perhaps the heart of the arrangement lies to an organization, which has a permanent staff, the GATT Secre- in the elimination of credit subsidies that are rela- tariat. "Organization for Economic Cooperation and Development tively small. In instances where exporter govern- Membership includes the United States, Canada, Japan, Australia, ""NTT Pact Extended for Three Years, Abe Holds Trade Talks New Zealand, and the governments of all Western European in- 0 dustrial market economies With U.S. Official," U.S. Export Weekly, Jan. 31, 1984, pp. 580-581.

9 6 d6 International Cooperation and Competition in Civilian Space Activities

ments do not choose to make large credit subsi- ing, materials processing, and satellite commu- dies, the arrangement now keeps them and their nicationsonly the latter has a well-defined in- competitors from offering interest rates substan- ternational trading and regulatory regime. Space tially helow commercial interest rates and in this transportation and remote sensing have only be- way lessens "unfair" competition.'" A special gun to glimpse real commercial competition and OECD arrangement exists for satellite ground sta- international trading regimes have not been de- tions; among other things, it limits the duration veloped for these industries. The materials proc- of export credit for ground stationsto 8 years." essing industry (as well as its international trading There are limits, in practice, to this discipline regime) does not yet exist. in the use of export credit. Despite thearrange- The questions of industrial organization and in- ment, governments find ways to subsidize larie- ternational trading regime are discussed in the ticket, high-technology sales to less developed following section in the context of each of the countries, both for political reasons and topro- service industries, but we note here that the in- mote exports. No existing multilateral agreement ternational trading regime in international satel- disallows credit subsidies witha larg- grant ele- lite communications has largely eliminated inter- ment in sales to less developed couoti ies; they national competition in both the sale of services are simply given the label of "official develop- and the ownership of facilities. International trad- ment assistance" when the credit subsidy ex- ing regimes in finance and other auxilliary serv- ceeds a 25 percent grant element. ices important for international trade in large, risky, and long-lived space-related ventures,are Space-related transactionse.g., the sale ofa satellite communications systemare often large also highly anticompetitive in many countries be- and politically significant to exporter countries. cause of restrictive national regulation and con- Hence, large credit subsidies appear to be the stitute an important non-tariff barrier to the sale norm rather than the exception in sales of space- of U.S. space-related services and equipment in related equipment to less developed countries. these countries." The other industrial countries have justified the trade restrictions they have erected forspace-re- Competitive Analysis of International lated equipment and services and for subsidiz- Space-Related Service and ing competition in third-world markets byargu- Equipment Industries ing that they are simply countervailing against the strong subsidy and industrial-policy support the Space Transportation Services United States gives to itsaerospace industry The space transportation services industry has through the defense budget. recently passed from infant industry status, where to all intents and purposes there was only one International Tradirg Regimes in Space- Related Services "By "anticompetitive" trading regimes, we mean that in the markets involved, firms (particularly foreign firms) are significantly re- General international trading rules do notas stricted in entering the market, in offering products or services at yet exist for trade in services of any kind (with their discretion, in pricing these products and services, and in in- the one important exception that export credit vesting in facilities The Intenational Banking Act of 1973 estab- for services is covered by the OECD lished a U.S Federal regulatory framework giving "national treat- arrange- ment" to foreign banks (i e., nondiscriminatory treatment of foreign ment). Thus, different international tradingre- banks vis-a-vis U.S banks). U.S. banks and other financial institu- gimes exist for each different service industry. In tions, however, are not accorded national treatment in many other the four space-related service industries discussed countries. In a recent survey for the Senate Committee on Bank- ing, Housing, and Urban Affairs, the Controller of the Currency in this reportspace transportation, remotesens- found that significant progress had been made since an earlier 1979 survey in securing national treatment for U.S. banks in six of the seven OECD Lountries surveyed (Canada, Finland, Norway, Por- "ror an extensive treatment of the subsidy issuesee Gary Clyde tugal, Spain, and Sweden, but not Australia); Department of the Hufbauer and Joanna Shelton Erb, Subcidirs in International Trade Treasury, "Report to Congress on Foreign Government Treatment (Cambridge, MA MIT Press, 1984) of U.S. Commercial Banking Organizations, 1984 Update," sub- "Unpubl.shed document, supplied by the U S Treasury mitted July 5, 1984. 9/ r

Ch. 4Competition 87

producer carrying commerical payloads, to a ume long-distance communications inthe 1990s. more complex competitive status.NASA is still With the greater integration of space-related the dominant producer and still receives annual commerce into the economy, economic events congressional appropriations for space transpor- far from space will strongly influence the market tation, but there are now four additional actual for space transportation. or potential major competitivecdrriers, Ariane- Other civilian demand for space transporta- space [Ariane], Transpace Carriers,Inc. [Delta], tionfor materials processing, remote sensing, General Dynamics [Atlas-Centaur], and Martin space station activities, space scienceand space Marietta [Titan]. R&Dis even more uncertain. Complicating In addition to these major carriers or potential everything will be military demand for both NASA carriers, several specialty carriers now offer or Shuttle bay capacity and, perhaps, for expend- may soon offer minor orspecialized services, able launch vehicles (ELVs).53 such as low-earth-orbit and sub-orbital space Under continuing high demand, the space transportation. Identified in this report are Space transportation industry could mature rapidly in Services, Inc., Starstruck, Inc., Orbital Sciences the late 1980s and early 1990s. NASA, or private Corp., OTRAG (Germany), and Bristol Aerospace, sector descendants, would be providing Shuttle Ltd. (Canada), but other firms are likely to enter services to space stations and to firms parking this specialty market in the future. free- flyers in space or sending communications Two classes of potential competitors are gov- satellites on "upper stage" rockets to geostation- ernment launch agencies (in the U.S.S.R.,50In- ary orbit. ELV operators, Arianespaceand a num- dia, China,5' Brazil, and Japan), which so far have ber of U.S. firms, would probably be providing not indicated a commercially importantdesire to an array of tailored services primarily tothe com- compete in the general international space trans- munications industry. Firms providing specialty portation market, and the large U.S. aerospace services might be competing for a variety of low- firms that do not currently maintain launch ca- mass communications and materialsprocessing pability but are well entrenched in one or another payloads. The space transportatiion industry could a.-,pect of space (e.g., Hughes Aircraft Co. orBrit- develop vigorously in the normal competitive ish Aerospace). mode. Wilether or not the fringe of the space trans- Under low demand, however, the industry portation services industry develops or aerospace structure would be far different. There might be firms enter the market will depend primarily on an excess supply of Shuttle services.Arianespace future demand for space transportation and the might be the only ELV operator, with most or ali pricing of services by established subsidized pro- U S. aerospace firms either definitively discarding viders like NASA and Arianespace. plans to offer ELV services on current-generation vehicles or simply continuing to hold back. Some By far the largest current demand for commer- specialty firms might die out. NASA and Ariane- cial space transportation comes from the com- space might continue to provide commercial munications industry. This demand for placing launches in protected home markets and engage communications satellites in orbit is relatively well in subsidized export competition in international known for the next 5 years, but becomes highly markets. uncertain thereafter.52 This uncertainty arises because satellite and fiber-opticcable technologies Of several key decisions that will affect com- will be active technological alternatives in vol- petition in space transportation, the first concerns whether competition can be the preferred industrial organization in this industry, as it is in Amer- "The USSR has offered its Proton launcher to INMARSAT in ican industry in general, or whether there are spe- what may be called ic.ternational competitive behavior S'China has recently offered to sell launch services to other na- cial characteristics in the industry that make an tions See "China Offering Launch Services to International Users," Aviation Week and Space Technology, Apr, 8, 1985, pp 25-26, "See chs 5 and 6 "See ch 5 for a more extensive discussion of space transportation.

38-797 0 - 85 - 4: QL 3 9 d 88 International Cooperation and Competition in Civilian Space Activities

organization based on regulation necessary. Re- A second important decision affecting competi- cently, the theory that transportation industries, tion in space transportation concerns the amount absent special circumstances, operate more effi- of subsidy that will be provided to NASA in the ciently under competitive conditions has been future to provide commercial space transporta- widely put into practice. In the face of thisgen- tion services. If it is not Congress' intention to sub- eral practice, proponents of regulatingspace sidize these services, NASA would have to earn transportation would have to argue that special a market return on its investment in facilities to circumstances do indeed obtain.54 Their argu- provide them. Measurement of NASA's rate of ment might emphasize the political and military return on investment in these facilities is not a aspects of space, the large investments often nec- trivial exercise, and key accounting determina- essary and the need for special institutions to actions would need to be made (beyond those now complish national objectiv 5. provided by NASA) as to what facilities should The essence of competitive organization in any be counted and how much of their services industry is freedom of pricing and entry.55 In should be ascribed to civilian launches. space transportation, pricing freedom would ap- Large new investments (e.g., the purchase of ply to both private and government entities. In additional orbiters) in a program to carry com- the United States, space transportation is far from mercial cargoes would make the subsidy ques- being a perfectly competitive industry. Firmsare tion salient. Under these circumstances, Shuttle free to enter, but may face subsidized pricecom- prices that did not take account of capital costs petition from Government-owned systems (e.g., related directly to commercial cargoes and did the Shuttle). But attempting to make it morecom- not reasonably allocate costs of all kinds between petitive by establishing price controls, allowing commercial and government business, would price fixing, or maintaining entry restrictions constitute the subsidization of one competitor would be contradictory. Workable competition (NASA) in a mixed public-private international in- depends on firms having sufficient freedom of dustry.57 both entry and pricing that customers will have full freedom of choice. In this, as inmany other A third important decision affecting competi- industries, regulating imperfect competition inor tion will be what stance the United States should der to improve it may prove to be counterproduc- take toward international competition. It should tive.56 be dear that, in addition to developing other space-reiated industries, France, Japan, and other "The Department Jf Transportation (DOT), with the demise of countries are convinced that they must have a the Civil Aeronautics Board at the end of 1984, now has full respon- space transportation capability. This commitment sibility for both economic and safety regulation of the airlinein- dustry, it also has recently been given the lead responsibility for has been based on various theories about leading- regulating the space transportation industry The recent history of sector industries, butitis undoubtedly also regulation of the airline industry may ofter some guidance to what grounded in straightforward considerations of form regulation of space transportation may take, in recent years, na- economic re)5, lawn of entry, price, and capacity for both passen- tional pride. ger and cargo has largely been removed for domestic but not for international air transportation Given their commitment to developing launch "It also needs to be specified that in space transportation or any capability, it appears inevitable that they will also oilier market where the buyers may be government enhties, "free practice entry" has to mean more than just the freedom for sellers to offer restrictive procurement when their price-service combination, at their discretion. There must also be space-related industries might not otherwise de- buyers willing to purchase the best price-service offering, rather velop the minimum level of sales to justify oper- than be constrained to purchase only from certain sellers because ations. Open access of U.S. producers to these of political uirections "Mixed public/private industries are a particular case in point Aside from advantages in government procurement, public firms ditions may often be a cure worse than the disease, if imperfect are likely to have an advantage in their cost of capital and in their competition is replaced by a government-managed cartel. de facto insurance against bankruptcy due to losses Conversely, "Similar questions concern Ananespace, but since an important they are likely to suffer from the disaavantage of being used asan current subsidy of international launches comes from discriminatory employment utility and, generally, from political interference. Thus, pricing in favor of non-European cargoes, a more conventional in- there is usually no shortage of imperfections in competition involv- ternational trade approach against "dumping" is possible if serving such firms Nevertheless, the use of regulation to cure such con- ices should come to be covered by U S antidumping statutes.

9 J Ch 4Competition 89 markets and full coverage of their space indus- Satellite Communications Services tries by liberal international trade principles do The satellite communications industry is the not, therefore, appear to be possible in the near most mature of all the space-relatedindustries future. Rather than attempting to prevent trade and has been big business since the late 1950s. restrictions in the international market for launch If we define the international satellite communi- services, the United States could try to minimize cations industry to be the firms that sell interna- their impact and scope. tional communications services using communi- Continued efforts to get a multilateral code on cationssatellites,the major U.S.industry trade in services," to make general progress on participants are AT&T, Western Union, RCA, IBM government procurement and subsidies, to achieve (through SBS), ITT, GTE, MCI, McDonnell Doug- an agreement on mixed credits in tradewith de- las, United Brands,6° and COMSAT. These are the veloping countries, and to make sure that space large, basic U.S. long-distance telecommunica- industries are not systematically removed from tions firms.61 coverage would probably help toachieve this ob- After a decade of deregulatory action in long- jective. In addition to multilateral trading rules, distance domestic communications, culminating bilateral negotiations and reciprocity legislation with the AT&T divestiture, these firms are now have also been advocated as mechanisms for se- vigorously competing in the various domestic curing access of U.S. firms to foreign markets. communications/basic communications submar- How open the U.S. market should be to space kets. In addition, other U.S. firms specialize in transportation firms from countries that exclude various types of enhanced communications and U.S. firms and how to counteract subsidized distribute them over circuits leased from the basic competition in the U.S. market and in third- communications carriers. A number of such firms country markets are related questions.The use are those whose business has primarilybeen in of U.S. trade law and administrative procedures the information industry but which, because of to impose countervailing penalties has beenthe the merging of the data processing and telecom- traditional U.S. method of ensuring that competi- munications industries, are now offering satellite tion is fair in the U.S. market. Transpace Carriers, communications services of various sorts in com- the U.S. space transportation company offering petition with traditional communications firms. the Delta launcher, has attempted to use them Private corporate networks are also a significant and has asked the Administration to penalize element in the domestic market, since they pro- Arianespace and the European governments sub- vide excess communications capacity from their sidizing it, if negotiations fail to ameliorate any private communications networks for resale. unfair competitive practices in space transporta- Hence the U.S. domestic market is now vigor- tion." ously competitive.62

581n the case of services (space transportation included), the only 60The involvement of these firms in International telecommunica- multilateral agreement of any substance that currently applies is tions is not well known. McDonnell Douglas participates through the OECD Arrangement on Officially Supported Export Credit, but its FTC Communications, Inc., Tymshare, Inc , and Tymnet, Inc. the United States is leading a campaign to start multilateral negoti- subsidiaries United Brands participates through its TRT Telecom- ations for a GATT code on services. munications Corp subsidiary, and its ownership interest in Inter- 581n its June 1984 petition, filed with the U S Trade Representa- national Satellite, Inc tive's Office, Trar.spac. Carriers, Inc , charged European Space 6' For a mere complete list of firms that sell or intend to sell basic Agency member states (paiw-ularly France) with subsidizing Anane- international communications services, see ch. 6. spal.e in .ts provision of expenOnble launch services.The Transpace 621n recent years both the information and communications in- cc mplaint objeled to Arianesp..ce's two-tiered pricingstructu,e dustries have seen substantial technological changes that make it (I3wer for non curopean buyers), the subsidized provision of launch impossible to draw a clear boundary between them. Digital and and range 4:Aci lines, services, and personnel, the subsidized provi- other communications transmissions in communications networks (e.g., packet S1011 of Centre National d'hudes Spatiale personnel,and the sub- can be made more efficient with computer processing sidization of mission insurance rites for Ananespace customers switching), end computer networks also require special commu- The complaint asks the Prside.it to negotiate for an end to such nications facilities and software to optimize their use.Particular practices, in the meantime to bar Arianespace fron-i marketing its users, such as banks, may benefit when their computer and com- services in the United States, and to impose economicpenalties munications hardware and software are designed as an integrated against ESA-country imports under Sec 301 of the Trade Actof 1974 system. The manufacture of specialty components for such com- (U S Export Weekly, June 12, 1984 ) munications/computation systems is now a major economic activ- 90 International Cooperation and Competition in Civilian Space Activities

Overseas, most countries have governmental communication is almost never able to deliver communications monopolies, for instance the it internationally over its own facilitiesor more post, telephone, and telegraph organizations generally to optimize an international network (PTTs) of Germany and France, and theseare for the use of its customers. Instead, because of often very large firms. As regulated monopolies, U.S., foreign, and international organizationreg- they typically handle all the telecommunications ulatory restrictions, it must hand off thecommu- of their countriessatellite and terrestrial, domes- nications to other entities at some point in its tic and international. Although this is the domi- journey with the result that linkage througha nant pattern, there is some institutional variation. whole chain of entities is typical of international In Britain, the government monopoly, British communications transmissions. Telecom, has recently given way to an industry with two major firms, and both havenow been Little competition takes place between theen- privatized. In Japan and Canada, the international tities in this chain. In all major countries, entry, satellite communications firms are regulated pri- prices, service offerings, and facilities in the in- vate rather than public monopolies. ternational satellite communications industryare highly controlled. International competition be- In all industrialized countries, regulatoryau- tween service sellers from different countries does thorities have been and will increasingly be fac- not yet exist to any exient. Even connection rights ing the need to decide: 1) where the regulated to other countries' networks currently are severe- domestic "network" (carrier-owned equipment) ly limited for all but a handful of traditional U.S. ends and what customer-owned equipmentcan carriers. be connected to it; and 2) where the precise dividing line between regulated communications Despite the complexity of international inter- and unregulated data processing is. The needto connection, a number of large multinational make and revise these determinations has already firms, such as Citicorp (connecting 1,400 offices brought large regulatory changes in I J.S. domestic in 93 countries), Merrill Lynch, Texas Instruments, communications and will almost certainly do so General Electric, Shell Oil, etc., have developed in other countries. At a minimum, competition their own private international communications will develop in the equipment and enhanced networks.63 At the present time, these networks services industries at the fringes of thegovern- are the closest that international communications mental telecommunications monopoly. Thenew come to being handled by a single entity. Facili- fringe competitors, along with firms from other ties outside their premises are typically not owned countries, will, in turn, seek entry into interna- by the communicating firm, but the network is tiur.11 communications and createpressure for functionally controlled by it from initiation to regulatory changes there as well. The countries completion of communication. These corporate that are experimenting with or about to experi- networks are beginning to constitutea challenge ment with competition in long-distance domes- to the international regulatory regime as it is now tic communications will also be adding poten- constituted, because excess capacity on these tial competitors and stimuli to change to the networks (including that on U.S. domestic satel- international communications industry. lites) is potentially resalEable to those whonow use international commcn carrier facilities.If This is a process that is only beginning. Com- large-scale competition among resellerswere per- petition among carriers in international commu- mitted internationally as it is within the United nications is still highly constrained by regulation. States, the competitive situation in international The carrier selected by a consumer to initiatea communications services would be very different. Hence, the issue of resale of capacity reaches to ay The communications service and equipment firms are enter. ing various information lines, and computer firms are entering various communications service and equipment lines The recent "U S Department of Commerce, I/ .5 Industrial Outlook 1984, AT&T divestiture decision was predicated, among other things, on pp 46-48, "Multilevel Network Connects Worldwide Worksta- the idea that it is no longer possible to draw a definitive line be- tions," Telecommunications, North American Edition, August 1984, tween the two industries pp 41-45 Ch 4 Competition 91 the heart of the current international regulatory to land a high capacity U.S.-U.K.undersea fiber- regime. optic cable.66 If some or all of the alternative satellite and To date, INTELSAT, an international satellite cable systems come into being, as now seems consortium owned by the PTTs (or o. telecom- likely, ooth the operations of INTELSAT and the munications organizations designate by its 109 international communications regime will be al- member governments), provides r,3t of the tered significantly. At present, it is not clear how transponders used in intercontinental civilian the foreign satellite link will be arranged. The communications." However, competitive pres- alternative satellite proposals are not definitive sures may change this situation inthe next few on the terms of interconnectionwith the very years. same foreign telecommunicationsentities that are Technological developments and market the part owners of INTELSAT with whose facili- growth have created competitive pressures that ties theirs would be competing. are likely to reduce thedominance of INTELSAT As it attempts to allow greater competition gen- in coming years. First, a number of regional in- erally in international telecommunications, the ternational systems have come into existence in re- FCC should analyze whether the incentives U.S. cent years. Second, since the AT&Tdivestiture and foreign carriers will operate under will re- and the privatization of the British telecommuni- salt in overcapacity in U.S. international telecom- cations industry, a number of private U.S. and munications. One element in this determination British firms are poised to construct satellite or involves the amount of capacity to be provided fiber-optic undersea cable facilities in competi- by the potential new satellite firms. Another in- tion with INTELSAT and the traditional cable con- volves the planned capacity of INTELSAT's VI and sortia, which have been dominated by AT&T and VII series satellites. A third involves the capacity the European PTTs. to be provided by the proposedtransatlantic Under stringentlimitationsto safeguard fiber-optic cables and the similar cables that have INTELSAT's revenue base, the Reagan Adminis- been proposed for transpacific communications. tration at the end of 1984 urged the Federal Com- If open facilities competition should lead to over- munications Commission to orocess favorably the capacity in international communications that re- applications of five U.S. corporations wishing to sulted in higher rather than lower rates through launch satellites for transatlantic communica- service regulation, continued facilities regulation tions.65 The FCC, for its part, in early 1985 rec- to avoid the overcapacity might bejustified even ommended that the State Department approve in a partially deregulated market. (See ch. 6 f.., the application of a British carrier's U.S. partner a discussion of competitionbetween satellites and fiber-optic cables.)

64COMSAT, a private firm, which functions as an intermediary The FCC has regulatory authority over both the in virtually all U S intercontinental civilian satellite communica- construction and use of U.S. international tele- tions, is the U 5 represertative communications facilities. The prevailing pattern 6,Intersputnik, an international satellite organization with mostly East bloc countries as members, INMARSAT, an international sat- of FCC facilities approvals in international (but ellite organization of which the United States is a member handling not in domestic) communications hasbeen to ap- marine communications, and the "domestic"satellites of coun- prove the investment of U.S. carriersin interna- tries that send communications to territories onother continents (e g , France's Telecom I or U S COMSAT satellites transmitting tional facilities owr.ed by consortiums of car- to Pacific territories), are the other elements inintercontinental com- riersCOMSAT in INTELSAT for satellites and munications at the present time See ch 6 for further information AT&T and the other international service carriers 6sOther systems from the United States and other countries would seem to be in the wings, as well, if theapplications of the first five in cable consortiums with European PTTs.The are affirmatively acted on For instance,France's Telecom I, designed for satellite communications with its overseas territories in the Americas, has a reception "footprint" that covers large parts 66FCC News, "Preliminary fiction on Tel-Optic and SLC (Subma- Applications, Report No. of the United States and could be used for transatlantic communi- rine Lightwave Cable Co ) Cable Landing cations to the United States 30992, Mar 4, 1985 92 International Cooperation and Competition in Civilian SpaceActivities

current exceptions to this involve North Ameri- This portrait of a fully competitive telecommu- can regional use of U.S. domestic satellites owned nications industry is probably unrealizablein the by single carriers in communications with certain next decade, because the currentstructures of Western Hemisphere destinations. The Commis- international telecommunications regulationare sion has also in the past regulated the relativeuse firmly entrenched inmany countries, and the of existing satellite and cable facilities for trans United States cannot unilaterally alterthem even atlantic service and is investigating what its pol- if it would like to. The policy questionsthat arise, icy toward facilities competition should be in the therefore, will most usefully becast in terms not North Atlantic during the 1986-91 period. of the general wisdom of competitionvs. regu- The market for international satellitecommu- lation, but rather whether the particularpartial nications services is part of the total market for moves toward deregulation under consideration international telecommunications, which has will produce economically and/orpolitically ef- been growing rapidly since 1970 and will prob- fective outcomes within the time-frameenvis- ably continue to do so. The fraction of thisgrow- aged. This stance is particularly tisefulsince many ing total that will be carried by satellite (andcon- of the proposed future actionsin U.S. interna- sequently the demand for satellites fortrrs tional communicationsare likely to be reactions purpose) is difficult to predict. Among other fac- to developments in technologyor in domestic tors, it v ill depend on the relative cost of satel- telecommunications markets, and the issuewill lite and fiber-optic cable capacity, whichremains be how most effectively tosecure their benefits uncertain because technological developments in international communications in thecontext are extremely difficult to predict. The decisive fac- of continuing restrictions. tor, however, is likely to be the facilities regulation policies of the FCC and othergovernments. Remote Sensing Services In formulating U.S. policy regarding competi- Remote sensing from space provides datare- tion in international communications, policymak- lating to the Earth's atmosp'.-,ere, landmasses, and ers should realize how much the market would oceans. In all three cases, these data have "pub- have to be liberalized before it could be regarded lic-good" characteristics.67 Differentgovernmen- as compoitive. A not very likely competitivesce- tal responses to their public goodaspects, de- naric ca.Je specified as a standard for compar- pending on whether they originatefrom meteor- ison to make this point. In a fully competitive in- ological, land, oroceans remote sensing systems, dustry, hundreds or thousands of communica- have resdlted in different industrystructures and tions firms from many countries would offerva- different competitive patterns from thosechar- rious kinds of internationalvoice, data, and TV acterizing the other space applications technol- services to individual consumers and businesses ogy sectors. around the globe. Unrestricted leased circuitsand lines would be freely available froma variety of large and small satellite and cableowners. In 67"Public good" is used here in the technicalsense used in formost places local telephone service would still mal economic theory to refer to those goodor services like na- be provided by regulated common-carriermonop- tional defense, city parks, and public healthservices, where the cost of servicing an additional consumer (marginal cost) olies, but access by long-distancecommunica- is negligible and where it is often impossible or undesirableto charge con- tions firms would be on a nondiscriminatory ba- sumers for the service they consume The general principle that sis,regardless of their nationality and the economic efficiency is served when consumers pay just the extra destination of the communication. Regulatory cost of servicing them is only approximately honoredin most industries, but in the case of industries producing public goods,it problems would be transmuted into problemsof is either impossible, infeasible, or undesirable even toapproximate trade-in-services, with governments negotiating it Hence, alternative arrangements arecommon in the provision of "public goods," often involving government subsidy about subsidies, nontariff barriers, anddiscrimina- and production Although consumers who do notpay for the data may tion in government's procurement of communi- be excludable from consumption (eg , by coded signals), the trans- cations services, rather than regulating theprices, actions costs of excluding them may be largo compared withmar- ginal cost of servicing them Seeapp 4A, for a fuller treatment of entry, and investment of carriers. public good'

1f),3 Ch. 4Competition 93

In the United States and other countries,the Moreover, the few users there are can sometimes public benefits of having a meteorological remote use alternativeaerial-photogrammetric and ground- sensing capability have been considered large observation data sources. Hence, U.S. policy- enough to justify subsidized Government produc- makers have chosen to attempt to transfer the tion. Accordingly, industry participants in the Government's Landsat system to the private sec- United States and elsewhere have been govern- tor (Public Law 98-365). mental organizations producing meteorological The difficulties in implementing this policy stem data and distributing them free or at the cost of primarily from the fact that the market for land reproduction.68 Currently, both the geostationary remote-sensed data is not currently large enough and the polar-orbiting meteorological satellite sys- to sustain a single, unsubsidized,self-sustaining tems are operated by the NationalOceanic and private enterprise, let alone a competitiveindus- Atmospheric Administration. NOAA provides free try. Only small amounts of landremote-sensed direct data transmission to Earth receivers around data have actually been sold to private sector the globe and a variety of data products which buyers in either raw or analyzed form. At pres- can be purchased for the costof reproduction. ent most of the consumers of landremote-sensed Commercial operation of the meteorological data are governmental agencies. remote sensing system might be bothpossible Private sector users are either firms that proc- and profitable for private firms, but because of ess the data for their own use,principally petro- the public good aspects of the industry, thelevel leum or other minerals firms, or "value-added of operation and the pattern of distribution of firms," such as Earthsat Corp. and ERIM, Inc., benefits that would result would not be economi- which purchase raw data from the U.S. Govern- cally efficient. Congress, in fact, acted in 1983 to ment, analyze them and convert them toinfor- prevent transfer of the U.S.-ownedmeteorolog- mation suitable for clients. These companies are ical satellites to the private sector (Public Law 98- essentially in the information business. Such 166) for this and other reasons. firms, for example, otter enhanced data for sale Land remote sensing shares some of the pb- to agribusiness forestry, andmineral-exploration lic good characteristics of meteorological remote companies. sensing69 but there are two important differences Much of the potential demand for satellite rein how the governmentand the public at large mote sensing that has been identifiedis price sen- regard it. First, the public interest in assuring that sitive and will not materialize at high prices." the land remote sensing industry operates effi- Data consumers will continue to usephotogram- ciently (in the sense that additional users pay only metric data when they are inexpensive enough, the extra cost of servicing them) is not as great or do without. as in weather remote sensingwhere universal ac- Despite the current meager prospects for com- cess to the data is an importantpublic goal. Sec ond, fewer citiz ns benefit directly from land re- mercialization, international competition has nev- mote sensing data than frommeteorological data. ertheless emerged. SPOT IMAGE, S.A., a French Government -owned remote sensing company, will soon begin offering remotely sensed data to "A 'though it would be possible to charge for weather-related sat- customers in the United States andelsewhere in ellite data, the costs of doing so are disproport.onatelylarge First of all, the cost to NOAA of supplying data transmission to one more the world. receiving station is zero Society would alsosuffer an extra cost if data leading to weather forecasts were subject to user charges Because of the characteristics of the two sys- If the general public were not informed about weatherdangers, tems, data from SPOT and from theLandsat sys- society as a whole would suffer avoidable costsfrom weather tem are not perfect substitutes.The SPOT system, disasters 690cean remote sensing also shares public good characteristics data after the price planning an '0The steep decli-e in sales of multispectral but will not be discussed here The United States is The by the Navy, the Navy increased in October 1982 is evidence of such price sensitivity ocean remote sensing system to be operated observation are for deploy- availability of aerial photogrammetry and ground Remote Ocean Satellite System (NROSS) is scheduled Remote Sensing and the ment in 1987 NOAA is planning to distributedata from NROSS one reason for this price sensitivity See Private Sector Issues for Discussion, op ca ,ch 5 to civilian users 94 International Cooperation and Competitionin Civilian Space Activities

for instance, provides relatively highresolution entry to existing firms or entrepreneurial data (20 meters) in three color bands groups (or 10 me- that can marshall substantialresources. Joint ven- ter resolution in biack and white). It also provides tures, like the one already in existence between quasi-stereo, an important feature for mineral ex- McDonnell Douglas, Ortho Pharmaceutical,and ploration and mapmaking. The U.S. Landsat sys- NASA might be commonas the industry gets tem has two instruments providing data: relatively underway. Although the cost of low resolution data (80 meters) in entry may be four wave- high, there appear to bea large number of firms length bands; and higher resolutiondata (30 in materials-using industries and meters) in six wavelength bands. aerospace firms Given these fac- able to deploy sufficientresources, particularly tors, and the current uncertainstate of private if NASA offers subsidized shuttle sector entry into land remote sensing in the services to them. United States, exactly how thecompetition will It is uncertain whether the relatively highex- develop is a matter of conjecture. SPOTIMAGE, pense of processing materials in space will sub- nevertheless, has already embarkedon an aggres- stantially deter their marketability.Even if a ma- sive data marketing effort in the UnitedStates. terial were produced inspace, and marketed in sufficient volume, there would alwaysremain the The present inadequate size ofthe market leads possibility that the space-based to the question of how much subsidy, if operation could any, is be undercut by terrestrial production ofan ade- desirable for this infant industry and howlong quate and less costly substitute. it should be maintained. Both theUnited States and France will have toanswer this question on The industry, it should neverthelessbe empha- a continuing basis; both currentlyare providing sized, is poised for rapid developmentif the risks significant subsidies to establish the firms.The in- are reduced and if a high value material is found adequate size of the market and otherconsidera- that can be produced most efficientlyin space. tions also lead to the question of howmuch reg- For example, if the McDonnell Douglaselectro- ulation should be imposedon the U.S. private phoresis process should efficiently produce high- satellite operator or operators.71(See ch. 7 for a purity interferon in space and if interferonshould fuller discussion of these issues.) prove to be the wonder drug of the decade,a number of pharmaceutical firms andaerospace Materials Processing Services firms catering to the pharmaceuticalindustry would be able to enter rather quickly. Whether or not an industry processing Such a de- mate- velopment would also produce increasedde- rials in space willcome to exist for any substan- mand for space transportation andmaterials proc- tial volume or value of materials prccessedis still essing capacity. highly uncertain. The industry analyzedin this section, therefore, should be thought ofas a po- Among U.S. pharmaceutical, metallurgical, and tential industry rather thanan actual one. other manufacturing firms which mightmanufac- ture materials in space for theirown use, com- The set of firms likely to beprocessing materials petition is now the organizing principle in space is potentially in most a diverse one. Two main cases and would undoubtedly continue to be, groups of firms will probably be, first, large as long as firms were allowedI, )ndiscriminatory ac- pharmaceutical, metallurgical, electronics,or cess to space processing facilities. Competition ceramics firms processing materials for them- will probably also be the organizingprinciple of selves; and, secondly, specializedfirms selling the processing services industry.However, if as materials processing services, suchas unmanned seems likely, the market for processing is both orbital processing units ("free-flyers"),special small and broken up into specialized metallurgical furnace services, segments, or microgravity society will have to relyon potential rather than processing facilities. The largecost of establish- actual new entrants to ing a credible space processing facility contest the several little will limit monopoly markets and keepprices down.

"The Department of Commerce currently has regulatoryrespon- There would probably be few barriersto inter- sibility national competition in the materialsprocessing

1 o 6 Ch. 4Competition 95 industry. Materials processed by a French firm, satellite communications or launch services, pre- for example, and brought down from space in viously seen as an essential part of bringing the France could be imported into the United States, benefits of space technology to all mankind, now subject, presumably, to whatever tariffs were ap- becomes the subject of international negotiations plicable. The principal, and probably the only im- on export credit subsidies. And trade negotiators portant, barrier to free international competition have to deal with whether or not space-related in materials processing, will be the question of services should be included among those to be foreign access to the NASA Shuttle, as it is cur- covered by potential future agreements on inter- rently the most practical way to retrieve proc- national trade in services. essed materials from orbit. This process is actually the natural outgrowth of successful commercialization and the begin- The Transition From Political to nings of healthy international trade, rather than Economic Competition a threat to them. In space-relatedequipment the process has been clearly underway for sometime. In this chapter we have iuoked at the various Trade restrictions and subsidies in space-related political and economic aspects of international equipment manufacturing industries are increas- competition in civilian space activities. With the ingly seen as part of industrial policy in these in- increasing commercialization of space, a num- dustries and referred to as "targeting." As in other ber of space-related activities are caught between industrial contexts, government-supported R&D the political competition of "national space pro- in early phases of an industry are difficult to deal grams" and the economic competition of inter- with under the international trading rules, but in- national commerce. sofar as the targeting takes the form of large cur- Prior to the development of vigorous commer- rent subsidies or trade restrictions, it becomesthe cial civilian snace activities, the arguments in fa- subject of trade negotiations, like those, for in- vor of continued support of space activities are stance, that have taken place with Japan on space- usually scientific and political, although they segment satellite communications equipment. usually also include subsidiary industrial-policy reasoning. Congress supports the national space In space-related services, the process is less program both for national pride and also for tech- dear, mainly because general international trad- nological development that may lead to later eco- ing rules on services have not yet been agreed nomic growth and exports. on even within the industrialized countries, and each trade sector currently has its own rules. In- As commercial activities develop, however, the ternational satellite communications services, for arguments used to justify government space activ- instance, are subject to the unique regulatory re- ities begin to be measured against genera: con- gime that governs international telecommunica- cepts of international trade. Previously unfettered tions services gelierally. national space policyin its competitive as- pectsbecomes challenged as to its fairness and What this implies for an understanding of com- consistency with general international trading petition in internationa: civilian space activities rules. Appropriations for the national space pro- is that as each space sector matures commercial- gram in areas of commercial activity are now ly, it becomes subject not only to the international characterized by some as subsidies against which politics of space but also to the broader and more countervailing duties can in principle be assessed complex politics of international trade and reg- or against which otherretaliatory measures can ulation. A national political commitment to be taken. The government space agency now be- spaceand to competition for leadership in space comes a government entity covered orpotentially activitiesmay come into conflict with another covered by the GATT government-procurement national commitment to fair competition within agreement. Assistance to developing countries in an open world trading system. 96 International Cooperation and Competitionin Civilian Space Activities

APPENDIX 4A.-THEMAIN INTERNATIONALTRADING RULES OF RELEVANCE TOINTERNATIONAL COMPETITIONIN CIVILIAN SPACEACTIVITIES

The general international trading ruleshave been forced." Although the term the subject of extensive negotiation is used, enforcement is in recent years. clearly the wrong concept. The conciliation andne- Trade specialists generally agree that the rulesare hav- gotiation activity referred to as "enforcement" does ing a significant effect on the sales of equipment, but not even approximately resemble an adjudicatorypro- that this effect is somewhat hard to quantify. With re- ceeding. It is primarily carried outon a bilateral basis spect to services, general international trading rules but also takes place, on occasion, in the GATT multi- do not yet exist to any extent, although informal ne- lateral framework. Bilateral negotiation(or negotiation gotiations are currently underway to explore thepos- among small groups of countries) may concern ques- sibility of a services code. tions of compliance with the general trade rules, but Three major trading rules affect "unfair" competi- often these negotiations will be sector-specific,e.g., tive practices in international trade in equipment,in for aircraft or satellite ground stations. Frequently, the addition to the general GATT principles of equal ac- participants in such negotiations hammer out sector- cess and equal treatment: specific arrangements that may conflict significantly 1. the OECD Arrangement on officially supported with the principles embodied in the general rules. export credits, GATT dispute settlement panels complement bilat- 2. the GATT code on subsidies, and eral negotiations in "enforcing" the trade rules in 3. the GATT code on government sev- procurement. eral ways. First, a GATT panelmay award the right These three codes fill gaps in the GATTtreaty but do to take retaliatory action as "compensation" for a not have universal coverage. they are largelyre- trade rule violation after conciliation has failed. Le- stricted to the industrial countries, but a few devel- gitimizing retaliatory action in thisway reduces the oping countries are signatories. possibility that a genealized trade feud will result from In their present form they are quitenew. Although retaliation against retaliation. Secondly, the possibil- the OECD Arrangement has existed since the early ity that a retaliatory action takenon the basis of a 1970s, the minimum interest rate levels allowedfor country's domestic law might subsequently be found official export finance had until recently beenso much by a GATT panel to be itself a trade rule violation tends lower than commercial interest rates thata large sub- to lessen the incompatibility of these actions with the sidy element remained. However, startingin 1982, the rules. The major limitation on the usefulness of the minimum rates have been close to commercial rates. GATT panels is that panels in the past have typically When they are adhered to, thcse minimumrates now decided cases on the narrowest of grounds. serve effectively to discipline export finance subsidies The actual workings of the trade codes have not al- in equipment sales. The new GATT codeson subsidies ways been transparent. Only narrow specialists, in and government procurement are also quite recent; government z.gencies and in specialized private law they entered into effect only in 1980 and 1981, re- firms, are fully aware of all the relevant provisions of spectively, and experience with them is still limited. the various agreements and statutes bearingon a par- In addition, because of incomplete country cover- tv:u lar problem area and how they work together. In age, specific exclusions, ease of escape, differences a given case, these complexities may recult in a deter- in interpretation, and ineffective enforcement, the mination quite different from whata nonspecialist trading rules are observed, when theyare observed, might expect from a straightforward reading of the through a combination of deterrence and negotiation. documents. Essentially they set a standard thatcan be followed One topical example of the complexity of trade voluntarily or against which deviationscan be codes and laws is the question of how measured. to classify a launched satellite wider U.S. trade lay,. Supposea The deterrence effect probably constitutes the ma- French company offered to sellr satellite with subsi- jor effect of the rules Governments comply voluntarily dized financing to an American buyer delivered CIF with the rules because they want to avoid beingcon- space. Would imposition of a countervailing duty fronted by other governments asserting that they have under section 301 of the Trade Law of 1974 be avail- violated agreed trade rules and threatening retaliation. able as retaliation against such an unfair tradeprac- The trade rules also set the standard for negotiation, tice as it would be in the cases of other subsidized which is the predominant way that they are "en- sales of equipment imported into the U.S. market? 10 Ch. 4Competition 97

Under U.S. trade laws, the satellite would be classified follow "buy-national" procurement policies, Ameri- as an export from France but it could notbe classified can firms are systematically excludedfrom a share of as an import into the United States, since ithad not the international trade in satellites and communi- physically entered through customs. Because it was cations equipment. not an import, countervailing duties or charges there- In practice, the subsidies code does not effectively fore could not be levied under section 301. However, cover the types of subsidies that areimportant in under section 1912 of the Export-Import Bank statute, international sales of space-related equipment. Al- the Secretary of the Treasury may direct the Ern-1m though the code contains broad language prohibiting Bank to subsidize the sale of an American product in unfair subsidies that affect international trade, it illus- the U.S. market in retaliation, if that product is com- trates what a subsidy is only by a short list of examples, peting with a subsidized foreign product. This action all of which relate directly to international trade ex- is available even when the equipment has not passed cept for a general "any other subsidy" category. Not through customs. by accident, none of the examples relates to research It appeals to be the consensus of the trade experts and development expenditures or generally to the that the trading rules should be seen as "working" subtle types of assistance included under the rubric in the general international trade in equipment, pri- of "industrial policy." manly by their deterrence effect but also through ne- Whether or not the subsidies code will be of any gotiation. This is particularly true when the stakes are use in disciplining international trade inspace-related relatively small. When the stakes are large, however, equipment is problematic, because R&D and indus- the many exceptions, exclusions, and escape possi- trial-policy subsidies frequently occur in the space sec- bilities that have been built into the rules, can be used tor, and they will be the hardest to bringeffectively by sovereign governments to avoid effective trade dis- under the subsidies code. To be sure, the category in- cipline. Roughly speaking, where international trade cluding "any other subsidy," defined as "any subsidy per annum in a sector on the order of$1 billion or . .which operates directly or indirectly to increase of more is involved, the trade rules arelikely to be seri- exports of any product from, or to reduce imports ously breached by governments. any product into, [the] territory" of a contractingparty, is a very broad one which could easily be interpreted general. It has Exclusions and Exceptions Keep to cover R&D and industrial policy in not been effectively tested, however. Thegeneral im- Space-Related Equipment From Being pression among trade specialists is that it will be diffi- Effectively Covered by the cult to apply the subsidies code to those subsidies, International Trading Rules whose focus is primarily domestic, even if their impact on international trade is substantial. None of the three major code referred to above The United States has plainly been the country that eff,...ctively constrain "unfair" competition in space- has most heavily used R&D and other industrial-policy related equipment because of exclusions and excep- subsidies in the aerospace industry. This has not es- tions. Perhaps the most damaging exclusicn involv- caped the attention of other industrial countries and ing space-related equipment is theexclusion of the has been a point of contention in recent trade nego- major non-American buyers of satellitepackages (sat- tiations. It should also be noted that the process of ellites transported into space and insured) from the countervailing against industrial policy measures is not list of government organizations covered by the GATT a trivial technical problem; such things as"reasonable government procurement code. These organizations price," subsidy margin, and injury would be difficult are the PTTs (post, telephone, and telegraph organi- to determine in a satisfactory way in orderthat an zations) that have communications monopolies in appropriate countervailing duty or other measured their respective countries.' The code document spe- retaliation could be imposed. cifies which government agencies in each country are The OECD Arrangement on export credits applies covere i, and the Furopean countries and Japan spe- universally to the official export finance of 22 OECD cifically excluded their PTTs. (Because of this refusal signatories (excluding Turkey and Iceland), whether to include the PTTs, the United States, 1,1 retaliation, or not the exports are undertaken by a government excluded the Corps of Engineers from its list. NASA, entity or a private firm. Nevertheless, it has abig ex- however, is included.) Because the PTTs do largely ception in it where sales to developing countries are concerned. Soft terms can still be offered on big-ticket items to developing countries with relative impunity, 'See ch 6 for discussion of recent eveilts concerning transfer of some PTT assist- ownership to the private sector and the Introduction of limited competition as long as they are called "official development telewmmunications in the United Kingdom and Japan ance" (ODA) rather than "officially supported export 98 International Cooperation and Competition in Civilian SpaceAci;vities

credits." There has to be a "grant element" ofgreater accomplished for telecommunications services in mul- than 25 percent in order to escape into the ODAcat- tilateral negotiations. egory and be free of the strictures of the export credit What can be accomplished in the relativelynear fu- agreement.2 ture, however, would nonetheless be useful. Removal A separate OECD Arrangementon Mixed Credits of the nontariff barriers to the movement of commod- has recently been discussed withina working group ities, such as insurance and banking industry restric- of the Development Assistance Committee ofthe tions, might be one accomplishment. Another would OECD (as opposed to the Export Credit Committee), be to develop rules regarding competition withstate- and it would supposedly further discipline theuse of owned monopolies. A third would be to develop mixed credits (i.e., development assistance mixed with guidelines on the cost of capital that state-ownedor export credits). Disentangling true development assist- regulated service enterrr ies must be charged. ance from commerc;11Iy motivated sales would be desirable and is probably manageable in practice.How much success any ODA arrangement would have, Sovereignty Considerations Largely though, is in doubt in the light of the demonstrated Dominate the General Trading Rules desires of come of the negotiating governmentsto sub- When They Are Applied to sidize exports to developing countries by granting aid. Space-Related Equipment Subsidized credit to developing countries will therefore probably continue to be substantially undisci- The international trading rules are not strong enough plined in high-cost items suchas the sales of satellite to restrain sovereign governments from taking action packages and other space-related equipment. On the they deemed to be of substantial importanceto sov- other hand, smaller sales of ;11:truments and other ereignty and defense, including certain actions in equipment may well generally +dice placein confor- space with respect to goods and services. The escape n lance with the OECD guidelines and not be theoc- clauses, exclusions and fuzzy areas built into the trade casion for heavy-handed official competitive jockeying. rules provide governments with plenty of opportunity, To summarize this sectionon exclusions and excep- in cases of particular importan :-.? to them, to elude tions, each of the three major trading piles hasan im- the bite of the trade rules. Because France and Japan, portant exclusion or exception that removesa large and to a lesser extent other industrial countries, have part of international trade in space-related equipment ri ade the decision to develop wide-ranging space pro- from its coverage. grams, it would be wishful thinking to believe that they would fully abide by the trade rules in competition International Trading Rules for Se-vices for sales of space-related equipmentor space transportation services, because for some time at least, they In the area of services, there have been indications, would probably lose out in open competition with starting at the GATT ministerial talksin 1973 and ex- inerican suppliers such as Hughes Aircraft. tending to Economic Summit meetings sincethat time, However, the debate is not all one-sided. One jus- that the major industrial countries might be willingto tification other industrial countries have offered for the conside a code on services. trade restrictions they have erected in thespace area There are a number of barriers toan agreement on is that they are simply countervailing against the strong international trade in services, however. Europeans subsidy and industrial-policy support the United States do not regard services as tradein the classic sense, gives to its aerospace industry. are worried about cultural imperialism from the United States, and have service industries thatare How International Trading Rules heavily regulated and not very entrepreneurial. In the area of telecommunications services, for instance, a Actually Affect Competition for U.S. complicating factor is the fact thatrevenues from the Exporters of Space-Related PTTs often subsidize unrelated activities, including bus Goods and Services service. In this context it is unlikely that much will be

'Grant element is defined as one minus the ratio of thepresent value of The question of whether or not the international the stream of payments that a,e proposed div dedby the present value of trading rules affect competition at the level of theac- the stream that would occur if the Arrangement terms governed, both dis- tual ma-ketplace, of course, goes beyond theques- counted at the appropriate Arrangement rate Deals,with financing still la beled as officially supported export credits, withgrant element between 20 tion of whether or not the general trading rules door and 25 percent are permitted, but there must be advancenotification to the do not have effect. For one thing the recent exchange member governments adhering to the Arrangement rate divergence of the dollar and other foreign cur- Ch 4Competition 99

rencies, has had a more damaging effect on the over- general or special agreements exist. Others may, in all position of U.S. equipment exporters than all ex- fact, be penetrable despite supposedly 1.7.midable isting tariffs and quotas combined. barriers. From the business point of view, the government One tactic that has been used by American equip- decision to take complaints to bilateral negotiation or ment manufacturers, in the defense area andalso in to GATT panels rests on a prior businessdecision "to other equipment areas, is to develop non-U.S. com- fight this thing out through government channels." ponent suppliers with the conscious purposeof ob- Considering thet victories "through government chan- taining political support for entering the market in the nels" may be pyrrhic or much delayed or not valua- component supplier's country. In pursuit of thisgoal, ble, the reality of engaging in competition in interna- the seller may acquiesce in or seek out offset arrange- Lanai markets is that competition takes place on many ments that it would not otherwise consider.Formal fronts, including price, quality, service, political con- international trading rules would have difficulty under nections, and regulatory action. Some markets will the best of circumstances in countering such subtle simply be off bounds to U.S. exporters no matter what trade restrictions.

1 i U Chapter 5 SPACE TRANSPORTATION Contents

Page Introduction 103 The Space Transports tion Industry 103 The Providers of Space Transportation Services 103 Buyers of Space Transportation Services 122 Competition in Space Transportation 125 Development of Competition 125 Assessment of Demand 126 Nature of Competition 128 Effects of Competition 134 Cooperatio:1 in Space Transportation 137 Curren', Policies 138 Future Policy Options 140 List of Tables Table No. Page 5-1. Ariane Flights 115 5-2. Transportation Costs to Geosynchronous Orbit 132 5-3. NASA vs. Arianespace Financing 133 5-4. Companies That Contribute to ManufacturingJapanese Launch Vehicles 139 List of Figures Figure No. Page 5-1. U.S. Launch Vehicles 104 5-2. The Hermes Spaceplane 116 5-3. Foreign National Comparative Launch Vehicle Development 118 5-4. Projection of Future Space Shuttle Demand RockwellInternational 127 5-5. Outside Users Payload Model Battelle's Columbus Laboratories 128 5-6. Low Model Market Share by Launch Vehicle 129 5-7. High Model Market Share by Liunch Vehicle 130 5-8. Arianespace Financing 133 5-9. Rockwell International Estimates That the Shuttleis Most Economical Over ELVs at High-Volume Operations 135 Chapter 5 SPACE TRANSPORTATION

INTRODUCTION

Space transportation is an industry in which the filling current flight manifests. However, the en- U.S. Government has acted both as the primary try of additional launch service providers over the seller and the primary buyer. But over the last next 5 years could lead to a situation where 10 years the European Space Agency (ESA) has launch service capacity exceeds demand. In the developed the Anane launcher, and in 1980 the past, space transportation policy in the United corporation Arianespace was formed to market States has focused on development of new tech- Ariane launch services. Taken together, these nology. The emergence of foreign competition events have ended the U.S. monopoly in com- and the interest of the U.S. private sector in pro- mercial launches. Now that the Space Shuttle has viding launch services require a reassessment of been certified "operational" and the U.S. Gov- the Government's role as space transportation ernment has, for the most part, terminated its use service provider. of the present fleet of expendable launch vehicles This chapter assesses the challenges of inter- (at least for civilian launches), private U.S. firms national competition and the opportunities for may take over their operation. In addition, recent future cooperatio.in the international space activities of some small U.S. firms suggest that a transportation industry. It gives additional con- new generation of low-cost, low-capacity ELVs sideration to the role the private sector may play could soon be competing in the launch vehicle in developing a space transportation industry market. Thus, the National Aeronautics and based on the principles of competition and open Space Administration (NASA) monopoly in U.S. entry. commercial launches may be ending as well. Although NASA and Ananespace compete for launch customers, neither has had much difficulty

THE SPACE TRANSPORTATION INDUSTRY The Providers of Space of commercial launch services. The U.S. manu- Transportation Services facturers of expendable launch vehicles (ELVs) although they are "commercial companies" National Aeronautics and have not sold vehicles except through NASA. Space Administration In a typical pre-Shuttle commercial transaction, When NASA was established in 1958 it was the buyer would contract with NASA to launch a charged with responsibility for the "...devel- payloadgenerally a communications satellite. opment and operation of vehicles capable of car- NASA would then contract with one of the launch rying instruments, equipment, supplies, and liv- vehicle manufacturers for delivery of a launch vehi- ing organisms through space."' The launch vehicles cle; when it was complete, NASA would integrate that NASA developed (through contracts with pri- the payload into the launch vehicle and supervise vate manufacturers) created the opportunity for both launch and insertion of the payload into or- commercial space endeavors. Until the establish- bit. With a fully operational Shuttle, NASA no longer ment of Arianespace, NASA was the only seller needs to order individual vehicles for each of its launches; its responsibilities for launch services have 'National Aeronautics and Space Act of 1958, sec 102(c)(3), 42 U S C 2451 otherwise remained the same.

103 104 International Cooperation and Competition in Civilian Space Activities

NASA entered into its first launch services agree- rent pricing policy for the Shuttlealthough similar ment in July 1961, with American Telephone & Tel- to the policy for ELVsraises a number of specific egraph (AT&T) for the experimental Telstar com- problems which are discussed in detail below. munication satellites.' Under this agreement AT&T financed, designed, and built the satellites and re- Provision of a reliable vehicle is only one element imbursed NASA for the costs it incurred for the of a launch service. Launch pads must be built and launch. NASA's policy then was to recover incre- specid facilities must be provided for integrating mental, "out-of-pocket" costs associated with the the payload and the launch vehicle. Equipment and launch and not the "sunk" costs associated with personnel must be available for tracking and con- the development of the vehicle or of the terrestrial trol of the vehicle after launch, and pre- and post- support facilities. Since that time, NASA has con- launch safety procedures must be developed and tinued to provide launch services on expendable implemented. The complex technical nature of vehicles for its own missions and, on a "reimburs- launch services, the need for elaborate terrestrial able basis," for other U.S. Government users, for- facilities, and the high cost of operations have, un- eign governments, and private entities.3 The cur- til 1982, prevented any challenge to NASA's monopoly in free world space transportation services.

'The Space Industrialization Act of 1979 hearings on H R 2337 NASA has used the following vehicles to launch before the Subcommittee on Space Science and Applications of commercial payloads (fig. 5-1): the House Committee on Scier,:e and Technology, 96th Cong, 1st sess p 85 (1979) (Statement of Dr Robert A Frosch) Delta: When NASA modified the Thor IRBM 'Although it was NASA's policy to recover incremental, "out-of- pt-cket" costs in 1961, this later was changed to recovering "all in 1959 to produce the Delta it was thought to reasonable costs Launch services provided on a "reimbursable be only an interim launch vehicle. However, with basis" implies, then, a recovery of "all reasonable costs 177 launches to date-94 percent of which have

Figure 5-1.U.S. Launch Vehicles

United States

Class Scout-D Delta 3928 Atlas-Centaur Titan 340 Space Shuttle

LEO e40 lb 7.800 lb 12,000 lb 33,000 lb 85,000 lb k- r.! GEOtransfer 2,800 lb (PAM) o. 5,200 lb 10,000 lb (IUS) 27,000 lb (Centaur) GEest O-circular 1,300 lb (PAM) 2,800 lb 5,000 lb (IUS) 13,000 lb (Centaur)

IOC Operational Operational Operational Operational Operational

114 Ch. 5Space Transportation 105 been successfulthe IX Ita has become the most- used U.S. launch vehicle The Delta has been constantly upgraded by its manufacturer, McDon- nell Douglas, during its 25-year history and presently performs at nearly 30 times its original payload capacity. The Delta 3920/PAM-D, which began service in 1982, is capable of launching payloads of 2,800 pounds to geostationary transfer orbit.4 The Delta can be used with a two- or three - stage configuration. The first stage, or booster, is an elongated Thor missile with Castor IV solid strap-on motors. The second stage (the Delta stage) is a liquid stage with restart capability. First- and second-stage guidance is accomplished by an inertial guidance system mounted in the second stage. The Delta third stage can be a solid rocket motor with spin stabilization, or the Shut- tle-compatible payload assist module (PAM) (discussed below). This interchangeability made the Delta the obvious choice as backup vehicle during the early Shuttle program. NASA no longer books satellites on the Delta, either as primary or backup vehicles. As of January 1985, there were four Delta launches left on NASA's books. Atlas-Centaur: The Atlas-Centaur is a 21/2-stage vehicle which uses liquid oxygen and kerosene as propellants in the Atlas booster and liquid oxygen and liquid hydrogen in the Centaur upper stage.' Based on the Atlas ballistic missile, the Atlas rocket was first used as a space booster in 1958. NASA first used the present Atlas-Centaur configuration in 1966, to launch the Surveyor lunar-landing spacecraft. Since this time, the Atlas-Centaur has been used for low-Earth-orbit Photo croctit McDonnoll Douglas (LEO), lunar, planetary, and synchronous trans- Delta Launch Vehicle

'The Delta and Titan ELV5 and the shuffle-PAM and shuttle-TOS combinations all require apogee kick motors, therefore in this refer orbit missions. This vehicle can launch 2,600 port their capabilities are given as pounds to geostationary trans- pounds to geostatiorary orbit (about 5,000 fer orbit These upper stages place about twice as much weight into geostattonary transfer orbit as eventually reaches geostationary pounds to geostationary transfer orbit; see foot- orbit For example, the PAM-D can place about 2,800 pounds into note 4) and has a 91 percent success rate with geostationary transfer orbit, but only 1,350 pounds into geostation- 53 launches. ary orbit. The Centaur stage of the Atlas-Centaur ELV, the Shuttle- Centaur, or Shuttle/TOS-AMS, and the Shuttle-IUS do not require Atlas-Centaur performance was improved in separate apogee kick motors, the capabilities of these vehicles are given as pounds to geostationary orbit 1982 to enable it to launch the INTELSAT V sat- 5The Atlas is referred to as a one-stage booster because it shuts ellites. General Dynamics' Convair Division, the down and jettisons two of its three engines during its flight See manufacturer of the Atlas-Centaur, had planned R Teeter, "U S Capability for Commercial Launches," AIAA Space Systems Conference, Oct 18-20, 1982, Washington, DC, AIAA -82- to add strap-on boosters like those used on the

1789, p 1 Delta to increase performance. In order to corn-

nt3 106 International Cooperation and Competition in Civilian Space Activities

pete for smaller payloads, General Dynamics also pable of launching about 4,000 pounds into geo- considered developing a tandem adapter and a stationary orbit. stretched payload shroud to allow the Atlas-Cen- taur to carry two Delta-class satellites or one ELV Derivations: The Air Force has announced PAM-Dli or Ariane-4 class satellite. As a result of plans to purchase a fleet of 10 ELVs as a backup NASA discontinuation of Atlas-Centaur bookings, and/or complement to the Shuttle fleet.' General such modifications may depend on General Dy- Dynamics and Martin Marietta each received namics' success at marketing this vehicle com- contracts to study a larger launcher based, re- mercially. As of January 1985, there were six Gov- spectively, on the Atlas and the Titan. The Air ernment-contracted Atlas-Centaur launches left.6 Force declared the Titan-derivative the victor in this initial competition; in a second round, undertaken Titan: Designed by the Air Force to meet its at the insistence of NASA, the Air Force recom- own needs, the Titan has not, to date, been used mended the Titan-derivative over the proposed SRB- as a commercial launch vehicle, although sev- X, an ELV based on Shuttle hardware.8 These pos- eral firms have expressed interest io offering a sible derivations are mentioned because, when de- "commercial" Titan launch service. The Titan has veloped, a commercial version could very well been configured in several different ways since emerge. the vehicle was first manufactured under contract by Martin Marietta in 1955. One of its current Shuttle:' The Shuttle is the world's first partially configurations, the Titan IIIC,is a three-stage reusable, manned, launch vehicle. The prime solid-and-liquid-propellant launch vehicle.Its contractor is Rockwell International. The Shut- central core is composed of two liquid stages. tle system consists of an orbiter with 3 liquid-fuel Two 120-inch-diameter, solid-propellant motors engines, two solid rocket boosters and a large ex- are added as an "0 stage." The final or third ternal fuel tank (ET). The orbiter is about the size stage, called the transtage, contains an inertial of a DC-9 jet and carries both the crew and pay- guidance system and altitude control system. The load. When fully developed it will be able to transtage has a multistart capability and provides place 65,000 pounds into l'Jw-Earth orbit (LEO) the propulsive maneuvers for achieving a vari- and return payloads up to 32,000 pounds. ety of circular and elliptical orbits. Titan IIIC can The Shuttle is launched by the combined fir- launch multiple payloads to the same or differing of the liquid fuel engines on the orbiter (which ent orbits on the same launch and can place are fed by the ET) and the solid rocket engines. about 6,000 pounds into geosynchronous trans- The solid rocket casings are parachuted back to fer orbit. Earth and land in the ocean to be recovered and The Titan IIID is a two-stage solid-and-liquid- reused. On all Shuttle flights to date or planned, propellant launch vehicle. It is essentially a Titan the ET, when near!y empty, is released just before 111C with the transtage removed. This vehicle was orbital insertion so as to be destroyed on its re- designed to launch heavy, low-altitude payloads entry trajectory by atmospheric friction. How- for the military. It can place about 30,000 pounds ever, one or more ETs may eventually be orbited into LEO. as components of (or raw materials for) permanent LEO infrastructure.1° The Titan 34D, (considered for possible commercial use) is similar to the Titan IliC and can use the transtage, the Boeing inertial upper stage (IUS, discussed below), the Centaur, or the "Commercial ELV Competition Planned by Air Force," Aero- space Daily, Feb 22, 1934, p 289 TOS/AMS upper stages (discussed below). As a °Spece Business News, Jan14, 1985, p 1, see also "Presiden- result, the Titan 34D can be used as a backup tial Directive Expands U S Space Laurches Spectrum," Aviation vehicle for Shuttle upper stage payloads. It is ca- Week and Space Technology, Mar 4, 1985, pp 18-20 °See generally H Allaway, "The Space Shuttle At Work," NASA, Washington, DC, 1979, NASA 5P-432 hlbiti Of the six satellites manifested on Atlas-Centaur, three are 100vilian Space Stations and the U S. Future in Space (Washing- U S Navy Fltsatcoms and three are INTELSAT VA communication ton, DC U.S Congress, Office of Technology Assescment, OTA- satellites STI-242, November 1984), pp 77-82

1.16° Ch. 5Space Transportation 107

Multiple payloadse.g., communication satellites, the ESA developed Spacelab, or various experimental palletscan be carried in the Shut- tle's 15 x 60-foot cargo bay." When in orbit, payloads can be lifted out of or hauled into the cargo bay by the remote manipulator. This 50- foot robot arm was designed and built by Spar Aerospace under contract to the National Re- search Council of Canada. Shuttle Upper Stages: The Shuttle carries its payloads only io low-Earth-orbit; to reach the higher orbits in which most communicatic a satellites are placed an additional upper stage must be used. McDonnell Douglas manufactures one upper stage family called the payload assist module (PAM).12 There are currently two versions of this stage designed to place payloads into geostationary transfer orbit; PAM-D, which has a capacity of 2,800 lbs, and PAM-DU, which has a capacity of 4,000 lbs. The PAM-DU is used only with the Shuttle, while the PAM-D can be employed either with the Shuttle or as the final stage of a Delta.' For , Shuttle use, each system has an expendable stage Photo credit: National Aeronautics and Space Administration consisting of a spin-stabilized solid rocket motor, Shuttle launching Satellite Business Systems spacecraft fittings, and the necessary timing, se- communication satellite. PAM upper stage is quencing, power, and control assemblies. Also attached below satellite. required is a spin system to provide stabilizing rotation, a separation system to release and de- d customer, because initial launches require ad- ploy the stage and spacecraft, and the necessary ditional preparation such as structural analysis. avionics to control, monitor, and power the sys- As of January 1985, a total of 26 PAM upper stages tem. A cradle structure is also necessary to hold have been launched. With the exception of the the PAM and its spacecraft in the Shuttle bay. 17th and 18th launches, all were successful." The cost of a PAM-D upper stage system is ap- Another upper stage, the inertial upper stage proximately $7 million to $8 million (1984 dollars) (IUS), was developed by Boeing, primarily for the for a launch in 1987.14 Costs may vary depend- Air Force.16 The IUS, when used with the Shut- :rig on whether it is a first or a repeat launch for tle, should be able to place about 5,000 pounds into geostationary orbit. It is a two-stage solid-pro- "The Shuttle is large and powerful enough to hold live Delta- pellant, three-axis-controlled, inertially navigated class satellites However, due to center-of-gravity problems, and upper stage. The IUS was designed originally as limitations imposed by tracking facilities and the insurance mar- an interim vehicle that would bridge the gap be- ket, it is unlikely that the Shuttle will carry more than three or four satellites at one time tween existing expendable upper stages and the ',Also referred to as the spinning solid upper stage or SSUS. See reusable space tug desired by NASA. When it be- generally, "U.,ing the Space Shuttle," Rockwell International, 1982, came apparent that the space tug would not be p 12 "E H Peterson and R. I Thiele, "PAM Commercial Upper Stages developed in the foreseeable future, the "interim for Space Ac ess," (Huntington Beach, CA McDonnell Douglas Astronautics Co , August 1982), MDAC Paper G8920, p 1-2 "Ibid. ''"McDonnell Douglas Sees 50 PAM-Ds Sold by 1990," Aviatior '6E. L Bangsund, "IUS Status and Growth Potential," Boeing Aer- Week and Space Technology, June 25, 1984, pp 169.171 ospace, Headquarters Space Division, 1982, IAF-82 05. 1013 International Cooperation and Competition in Civilian Space Activities

SPACECRAFT ,.-(USER PROVIDED) (

PAF WITH EQUIPMENT INSTALLED

STS PAM-D

SPIN TABLE & SEPARATION SYSTEM

ORBITER LONGERON

AIRBORNE SUPPORT EQUIPMENT AVIONICS ,?' ORBITER KEEL

DELTA 3910/PAM

Photo credit National Aeronautics and Space Administration The PAMD was designed to be compatible with both the Shuttle and the Delta in order to provide a backup capability for early Shuttle missions.

118 Ch. 5Space Transportation 109

upper stage" gradually evolved into the present "inertial upper stage." The IUS can be used on the Shuttle or the final stage of the Titan 34D. NASA plans to use the IUS only tc, launch the Tracking and Data Reldy Satellite System (TDRSS) satellites, after which it will rely on the Centaur upper stage. The Air Force will continue to use the IUS for its launches at an estimated cost of $60 million per flight. The Centaur G and G-prime upper stages are

wide-body derivatives of the upper stage of the -4- expendable launch vehicle, the Atlas-Centaur." These upper stages are uder development by General Dynamics for NASA and the Air Force. The Centaur G will be capable of placing about - -1 10,000 pounds into geostationary orbit from the Shuttle. The Centaur G-prime is to be used on Photo credit' National Aeronautics end Space Administration the International Solar Polar Mission, and for the Artist's conception of the proposed Shuttle launched Galileo Jupiter probe, both planned for 1986. This Centaur Inertial Upper Stage stage will be capable of placing about 14,000 pounds into geostationary orbit. Aerojet Tech Systems is also undertaking de- Believing that the IUS would be too expensive velopment, with in-house funds, of a high-per- for commercial users and that the PAM-D and formance, all-liquid upper stage, called the Liq- DII are too small for the large communication sat- uid Propulsion Module (LPM). The basic model ellites of the late 1980s, a private corporation, Or- is tailored for launching up to 3,500 pounds to bital Sciences Corp., is working on an upper stage geostationary orbit; by using tandem stages it called the Transfer Orbit Stage (TOS).' 8 The TOS would be capable of launching up to 8,500 would be able to place about 13,000 pounds into pounds to geostationary orbit. Aerojet's goal is geostationary transfer orbit and is less expensive to offer this stage commercially by 1987 for $10 than the IUS. The prime contractor for the TOS million. Its engine is derived from the Shuttle Or- is Martin Marietta.12 bit Maneuvering System Engine. Orbital Sciences Corp. also plans to offer an Astrotech Space Operations is another firm in- Apogee and Maneuvering Stage (AMS); a bipro- terested in entering the IUS-class upper stage pellant propulsion module which, depending on market for commercial and military payloads. the weight of the payload and the desired orbit, Astrotech and its prime contractor, McDonnell will operate independently of, or with, the TOS. Douglas, hope to develop a liquid-propellant OSC intends to charge about $30 million to upper stage (Delta Transfer Stage) capable of plac- launch IUS-class payloads.20 ing as much as 7,500 pounds into geosynchronous orbit or 20,000 pounds into geosynchronous transfer orbit. The Delta stage, as currently envisioned, would be Shuttle- and Titan-compat------ible and would cost in excess of $30 million.2' 17E H Kolcum, "NASA Weighs Greater Role fo, Centaur," Avia- tion Week and Space Technology, July 25, 1983, p 60 '8D Dooling, "Business Graduates Plan New Shuttle Stage," Space World, March 1983, p 29 "'The TOS was fully financed by a $50-million R&D limited partnership, the largest private financing of any commercial space endeavor to date 20 "Orbital Sciences Offers Upper Stages," Aviation Week and ,'"Astrotech Sees Military Uses for Stage,' Aviation Week and Space Technology, June 25, 1984, pp 108-113 Space Technology, June 25, 1984, p 158 1 1 J 110 Internationdl Cooperation and Competition in Civilian Space Activities

tific, and political benefits of space activities and to compete with the United States and the Sovi- et Union. The latest and most successful organization is the European Space Agency (ESA), which was founded in 1975.22 ESA inherited the programs and facilities of its predecessor organizations, the European Space Research Organi- zation (ESRO), the European Launcher Develop- ment Organization (ELDO), and the European Space Conference (ESC)." ESA's most important launch program to date has been development of the Ariane vehicle. Ariane 1 is a three-stage ELV with an advanced liquid-oxygen/liquid-hydrogen third stage. This vehicle was only the first in a series of as many as five models; successive designs will improve payload capacity and performance through the Photo credit Boeing Co 1980s. With Ariane 2 and 3 already operational, IUS and attached tracking and data relay communications satellite being launched the ESA member states have approved a program from the Shuttle. to develop Ariane 4 as well as the HM-60 engine, an essential component of the Ariane 5.24 Ariane 1is capable of placing about 3,800 pounds into geostationary transfer orbit, Ariane 2, about 4,400 pounds, Ariane 3, about 5,200 pounds, and Ariane 4, about 9,200 pounds. With the successful launch of an Ariane 1 on May 23, 1984, the Ariane vehicle entered into commercial service (see table 5-1). Previous flights had been developmental (L01-L04) and promotional (L5-V8). The first Ariane 3 was successfully launched on August 4, 1984. The first flight of Ariane 4 is ex petted in 1986. A variety of designs for Ariane 5 are being debated, including a manned Shuttle- type system called "Hermes" (fig. 5-2). Using a dual launch system, the Ariane is capable of carrying two payloads on each flight. Launches are made from the French-owned, ESA- funded Kourou spaceport in French Guiana, South America. Currently, the one pad at Kourou Photo credit Orbital Sciences Corp will allow only five or six flights a year; a new Artist's conception of Apogee and Maneuvering Stage (AMSTM) with Tracking and Data Relay Satellite Payload Following Separation from the 22E5A has 11 full membersBelgium, Denmark, France, West Transfer Orbit Stage (TOSTM) Germany, Ireland, Italy, the Netherlands, Spain, Sweden, Switzer- land, and the United Kingdomand three associate members-Aus- tria, Canada, and Norway (See ch 3 for a discussion of E!: A ) Arianespace 23For a description of European space activities prior to and following the formation of ESA, see Civilian Space Policy and Appli- Since the early 1960s, Europe has attempted cations (Washington, DC U S Congress, Office of Technc'ogy As- to mount a coordinated space program to ensure sessment, OTA-STI-177, June 1982) "Gibson, Roy, "EuropeTowards a New long-Term Pro- European participation in the economic, scien- gramme," Space Policy fl1), February 1985, p 5

12 u Ch 5Space Transportation 111

REACTION CONTROL AVIONICS BAY SYSTEM (REDUNDANT COMPONENTS) INTERSTAGE

SOLID ROCKET MOTOR

AFT SKIRT

NOZZLE

SPACECRAFT SEPARATION PLANE -EXTENDABLE EXIT CONE SOLID ROCKET MOTOR THRUST VECTOR CONTROL ACTUATOR Photo credit Boeing Co Inertial Upper Stage

pad in 1985 will allow about 10 annual launches. As of January 1985, there have been 11 Ariane launches, of which two have been failures (table 5-1). Realizing that commercial operations would be difficult if the 11 ESA nations had to agree unan- imously to every business decision, ESA and CNES (the French national space program) established a quasi-private corporation called Ariane- space to produce, finance, market, and launch Ariane vehiclei. ESA and CNES remain responsible for development of future Ariane vehicles and for operation of the Guiana spaceport. Arianespace S.A.isincorporated inFrance (March 1980) and owned by firms from the states that funded Ariane's development, by CNES, and by European banks. French investors (including CNES, which is the largest single shareholder with Photo milt McDonnell Douglas 34 percent) own 60 percent; West German in- Artist's conception of Delta Transfer Stage vestors own 20 percent; and the remainder is split 112 International Cooperation and Competition in Civilian Space Activities

Front closure Center segments c °sure segment segment Nozzle L assembl

Central port where burning occurs

122 Ch. 5Space Transportation 113

123 114 lnternat,onal Cooperation and Competition in Civilian Space Activities

-14. Liquid injector (TVC) 14. igniterOxidizer transfer system

Liquid Pressurizing oxidizer tank -=111iler

Soiid propellant Valve fuel grain

124 Ch. 5 apace Transportation 115

Photo credit Europeen Spew Agency Ariane L1 on ELA1

Table 5-1.Ariane Flights

Flight reference Date Launcher Payload Comments Development flights: L01...... Dec. 24, 1979 AR 1 Technological Capsule (CAT) Success L02.. ... May 23, 1980 AR 1 AMSAT-FIREWHEEL Failure (Viking engine instability) L03. .. . . June 19, 1981 AR 1 CAT + APPLE + METEOSAT Success L04. . . . Dec. 20, 1981 AR 1 CAT + MARECS A Success Promotion flights: Sept 10, 1982AR 1 (SYLDA)MARECS BISIRIO Failure (third-stage Turbo pump) L6...... June 16, 1983AR 1 (SYLDA) ECS -1 /OSCAR Success L7...... Oct. 19, 1983 AR 1 INTELSAT V-F7 Success V8 ...... Mar. 5, 1984 AR 1 INTELSAT V-F8 Success Arlanespace commercial flights: V9 ...... May 23, 1984 AR 1 SPACENET 1 Success V10 .. . Aug 4, 1984 AR 3 (SYLDA) ECS-2/TELECOM 1A Success V11 . .. .. Nov. 10, 1984 AR 3 SPACENE1 F2/MARECS B2 Success V12 .. . 1985 AR 3 (SYLDA)ARABSAT/SBTS-1 SOURCE Arlanespace. Inc

125 116 International Cooperation and Competition in Civilian Space Activities

Figure 5.2.The Hermes Spaceplane (conceptual design)

climannimm....

SOURCE CNES among the other ESA nations. A U.S. subsidiary As presently modified, the Sapwood-A can (Arianespace, Inc.) wac, chartered in November launch Soyuz manned vehicles of about 15,000 1982. pounds to low-Earth-orbit. The larger Proton-D launcher can carry about 44,000 pounds to low- Potential Government Sellers Earth-orbit and has been used to launch the Sal- yut space stations. Recent reports indicate that A number of countries have, or are develop- the Soviets are developing both a Saturn-class ing, launch vehicles which would enable them vehicle capable of placing 300,000 pounds ito to enter the launch vehicles market (figs. 5-3a and low-Earth-orbit and a reusable space vehicle simi- 5-3b): lar to the Shuttle.26 SOVIET VEHICLEF25 Although the Soviets have long had a reliable The Soviets have developed i number of ex- fleet of launch vehicles they have only recently

pendable launch vehicles; the most commonly tem of using capital letters for the first stage, numbers i,r the up- used is the Sapwood-A launcher, a derivative of per stages and small letters for the final stage. Roth the leer and an ICBM design dating back to the mid-1950s. code designators are used here. For a detailed discussion ci Soviet launch activities, see. Soviet Space Programs, 1971-1975, Staff Re- "The Soviet Union does not name or idi.itify its launch vehicles port for Senate Committee on Aeronautics and Space Sciences, Con- Soviet surface-to-surface missiles are assigned numbers with the pre- gressional Research Service, August 1976. fix SS by the U 5 military When such missiles are seen often enough 26"Soviets Said to Remove Camouflage Nets From New Launch to be identified by military branches of th" NATO powers, code Vehicles," Aerospace Daily, Dec. 14, 1983, p 227; See also. D. names such as Sandal, Skean, or Sapwood are assigned (The Pro- Doder, "Soviets Say They Plan to Build Space Shuttle," The Wash- ton, not having been developed as a missile, does not have an SS ington Post, Dec 13, 1983, p A 10, c1, See also, "Soviets Ready or code-S designator ) In order to convey more information about New Boosters at Tyuratam," Aviation Week and &pace Technol- the Soviet vehicle and its various stages, TRW developed the sys- ogy, Aug. 27, 1984, pp. 18-21 126 Ch. 5Space Transportation 117

The Soviets have quoted a launch price of approximately $24 million (current year dollars) for the Proton; this is less than the price of either the Space Shuttle or the Ariane. Soviet willingness to specify the launch site (Ty- uratam) and to provide technical data concerning the Proton suggests that they are serious about the INMARSAT offer.It seems unlikely that a more general entry into international launch velii- cle competition will be forthcoming. Although the Soviets possess the technology to compete with NASA and Arianespace or with U.S. commercial firms, they will probably never become an important provider of commercial launch services: first, the Soviets would have to allow West- ern scientists and businessmen to supervise the assembly, testing, integration, and launch of their satellites; second, it is unlikely that the United States, or any Western government, would allow sophisticated communication satellites to be exported to the Soviet Union; and third, it is unclear whether financing and insurance could be obtained for a Soviet launch.

JAPANESE LAUNCH VEHICLES Beginning in the late 1950s and through the

Photo credit Arlene 1960s, the Institute of Space and Aeronautical Sciences (ISAS), developed the Kappa and Lamb- Koti-ou, French Guiana V10 launch, August 4, 1984. Ananespace/ECS-2 Telecom 1-A da series of solid-fuel sounding rockets, which were used for Japanese scientific and applications experiment.. The difficulties of rocket develop- made an attempt to enter the international launch ment were exacerbated by inadequate guidance services market. In June 1983, the Soviets re- and stabilization technology, the result in part of quested that their Proton launcher be considered a self-imposed reluctance to fund technologies as a candidate to orbit INMARSAT's second-gen- that might be perceived as having military ap- eration communication satellites.27 At the time plications. ISAS went on to develop orbital of the Soviet announcement, the other candidate rockets; the first successful 50-pound test satel- launch vehicles were the Shuttle, Ariane, Atlas- lite was launched by an advanced Lambda in Feb- Centaur, Delta, and Titan. The INMARSAT coun- ruary1970. The Mu-class orbitallauncher cil accepted the Soviet request and informed its achieved its first success in 1971 and continues satellite contract bidders that they must design to be operated by ISAS from its Kagoshima test their spacecraft for compatibility with at least two range. Nissan Motors is currently designing an of the six launchers and that one of their selec- advanced version of the Mu, the M-3-kai-1, which tions had to be the Proton, Shuttle, or Ariane.28 will be used for Japan's first planetary explora- 27J M. Lenorovitz, "INMARSAT Adds Proton to Booster List," tion missions in the mid-1980s, including a Aviation Week and Space Technology, Aug 1, 1983, p16, see planned Halley/Venus mission in 1985. also, "Soviets Provide Data to Guide INMARSAT in Launcher Deci- sion," Aviation Week and Space Technology, Aug 8, 1983 p 22 In 1969, the National Space Development It should be noted that the Soviet Union is a member of INMARSAT (see chs 3 and 6) Agency (NASDA), assumed primary responsibility nAviation Week and Space Technology, Aug 1, 1983, p 17 for launcher development for applications satel-

121 118 International Cooperation and Competition in Civilian Space Activities

Figure 5.3.Foreign National Comparative Launch Vehicle Development

Japan India I BrazilI 60-

50-

40-

P. 2 30-

20-

10- III H-I1 (Reference) NI N 112 (Arians PSLV SOND IV Class Arcane 2/3 H-I SLV-3 ASLV Class)

440-660 lb LEO 660 lb 80-100 lb 300 lb 1,300 lb (9) 450 nu o GEO 250-500 lb 1,200 lb (9)

ICC OperationalOperational 1985 1990's Operational 1982 1988 1990's

IEurope (ESA)I China I

60-

,_ ,40 -

ID_ 3

20_ . ,

10 -

Class Arcane 1 Arians 2/3 Arians 4 Arians 5 CSL1 OSL2 CSL-3

2,800lb (?) 370 lb LEO 4,000 lb 5,000 lb 30,000 lb 95 ml

o GEO 3,800 lb 4,400-5,200 lb 9,200 lb (?) 880 lb

IOC Operational Operational 1985 1990-1994 Operational Operational 1985

_128 Ch. 5Space Transportation 119

lites. Instead of attempting to develop further ver- LET sions of the Mu launcher, NASDA decided to purchase U.S. Delta launcher technology. The U.S. - Japanese Agreement on Space Activities, signed on July 31, 1969, gave Japan access to thistech- HEAVY SOYU nology (subject to certain imitations, which are discussed below). As a result, Japan developed the N-I launcher, which is capable of lifting over O 500 pounds into geostationary transfer orbit. The NI consists of a Thor first stage, built in Japan MSM by Mitsubishi Industries under license to McDon- 4 15m 0 nell Douglas, a Japanese-developed liquid-fuel second stage, al id a U.S. Thiokol third stage. Ap- 3rd. proximately 67 percent of the N-I is supplied by Japanese firms. A more powerful version, the N-II, had its first successful test flight in February 1981, and is ca- 4.0m121. pable of lifting about 1,500 pounds into geostationary transfer orbit. The major differences from STORABLE the N-I are use of additional solid-fuel strap-on boosters and replacement of the Japanese-designed second stage by an improved version of the Aerojet-General (U.S.) second stage used on the Delta. As a result the Japanese contribution to D 2nd. the N-I1 is only 56 percent. For the late 1980s and the 1990s, the Japanese have a new booster, the H-I, under development. The major innovation is a planned liquid oxygen-liquid hydrogen second stage to be built by Mitsubishi. The initial version of the H-I will be able to place about 2,400 pounds into geostationary transfer orbit; a recently funded follow-on version, the H-II, will 1st. have even greater capacity (in the early 1990s).29 The H-I will use an inertial guidance system instead of the radio guidance of the N -! series. The Japanese have not announced plans to offer commercial launch services. At present, Jap- anese launch capabilities are restricted notonly by technology, but also by agreements with the D-I Japanese fishing industry which allow missiles to PROTON be fired only at two times of the year, January- HEAVYSOYUZ February and August-September. In addition, the U.S.-Japanese agreements which cover the trans- CONCEPT fer of Delta technology prevent its transfer to third

Photo credit C P VickCe 21"Japan Funds Launcher, Satellite Development," Aviation W..-ek Soviet launcher and Space Technology, Feb. 13, 1984, p 125.

12u 38-797 0 - 85 - 5: QL 3 120 International Covperation and Competition in Civilian Space Activities

countries or its use for launching third-country planned for 1985 or 1986. The ASLV will contin- payloads. The H-I! launch vehicle, which will be ue to use solid propellant for the main motors, designed and built entirely with Japanese tech- as does the SLV, but will have two solid-propel- nology, will not be similarly restricted. lant strap-on boosters. The PSLV, a vehicle planned for development in the late 1980s or CHIN ESE VEHICLES early 1990s, will be similar to the ASLV butmay The Peoples Republic of China's (PRC) launch use the Viking engine (currently used on the technology has been derived from the Soviet Ariane) as its second stage and will be able to Union, primarily the SS-4 (Sandal) medium-range launch 1,300 pounds into low-Earth-orbit. Long- liquid-fueled missile. The design for these mis- term plans call for development of a SPSLV ca- siles was given to the Chinese in the late 1950s pable of low-Earth-orbit launches of 7,500 before relations between the two countries de- pounds. It is unlikely that India will be able to teriorated. compete with NASA or Arianespace in the next two decades. The Chinese launched their first satellite, the 380-pound China I, in April 1970, witha CSL-I BRAZILIAN VEHICLES (Long March 1) launcher. Starting with China 3 in 1975, launches were made with the FB-I Brazil has developed a family of solid-propel- (Storm) vehicles, a version of the CSS-X-4 ICBM, lant sounding rockets called the Sonda; the latest which is equivalent in size to the U.S. Atlas. The of thesethe Sonda Ill is a two-stale rocket FB-1 can launch about 2,600 pounds into low- which can carry payloads of about 130 pounds Earth-orbit. to altitudes of 380 miles. Several variants of the Sonda are now operational and regularly used The Chinese are known to be workingon a for meteorological observation and atmospheric new launcher, the Long March 3, that would use testing. Although these rockets lack the power the two stages of the FB-1 plusa liquid oxygen- to place a satellite into orbit, current plans call liquid hydrogen upper stage. If successful, this for development of more powerful boosters. would make them third in the world, after the United States and ESA, to use high-energycryo- Potential Non-Government Sellers genic fuels. The Long March 3 would becapa- ble of launching about 3,080 pounds intogeo- U.S. PRIVATE SECTOR ACTIVITIES stationary transfer orbit. Three types of private sector launch activities China is planning to accelerate its international are currently under way in the United States: firms which want to market one of the existing cooperative efforts in space, and it has announced ELVs (Delta, Atlas-Centaur, or Titan), firms which that it is ready to discuss Long March launchserv- ices with interested customers.3° want to develop new, low-cost expendable launch vehicles, and those marketingupper stages for use with the Shuttle. INDIAN LAUNCH VEHICLES India began to work on its first launch vehicle, When NASA announced in 1983 that itwas the SLV-3, in 1973. It is isa four-stage, inertially seeking private sector operators for the Delta and guided, solid-propellant rocket designed to lift80 the Atlas-Centaur, five firms expressed interest in to 100 pounds to low-Earth-orbit. The SLV-3suc- marketing these vehicles.3' However, when NASA cessfully launched a 75-pound RS-1 technology published its official solicitation for proposals, demonstration satellite in July 1980. only two companies responded with firm offers General Dynamics' Convair Division, the current The Indians are developing the ASLV, which manufacturer of the Atlas-Centaur, was the only will be able to lift about 300 pounds into low- company to express interest in that vehicle. Trans- Earth-orbit. The first launch of the ASLV is pace Carriers, Inc., was the only company to re-

""China Offering Space Launch Services to International Users," "Five Firms Seek NASA ELVs," Space Business News, July 18, Aviation Week and Space Technology, Apr. 8, 1985, p 25 1983

1 3 0 Ch. 5Space Transportation 121 quest the right to operate the Delta line. McDon- nell Douglas Astronautics, the manufacturer of the Delta, did not bid on this vehicle. The Titan was riot included in the NASA solicitation because it is an Air Force vehicle. Prime contractor Martin Marietta has expressed interest in r 'arketing the Titan as a military backup for the Shuttle. Several private U.S. companies are developing small expendable launch vehicles. Most notable are Space Services Inc. (SSI) of Houston, TX, and Starstruck, Inc. (formerly Arc Technologies) of Redwood City, CA. In September 1982, SSI flew a successful suborbital flight of its Conestoga I vehicle, demonstrating payload spin-up and separation capabilities. This vehicle was an adaptation of the Minuteman 1 second-stage motor and did not have the ability to achieve orbit. The Conestoga II being developed by SS! will be able to place small payloads into low-Earth-orbit. The Conestoga II will be a multistage vehicle based on the Thiokol solid- rocket motors presently used as strap-ons for the Delta.32 33 Starstruck is presently developing a hybrid solid/liquid-fueled rocket engine for its Dolphin launch vehicle, which may be launched from the open seas.34 In June 1983, Starstruck successfully tested key propulsion and electronic systems, and in August 1984 conducted a successful test launch. Eventually, Starstruck 'ropes to I Photo crodlt. Svcs Simla's Inc. in the market for geosynchronous payioaas or Artist's depiction of SSI's Conestoga II 1,300 to 1,500 pounds.35 However, the company has had major financial, technical, and organizational problems recently and it is not clear that velopment in the United StatesPAM, IUS, Cen- it will remain in business.36 taur (under development), TOS (under development), and the Delta Transfer Stage. Although it As discussed above, there are five families of is possible that any of these might be sold com- Shuttle upper stages either existing or under de- mercially, only the PAM (McDonnell Douglas), "Space Services Inc , press release, Sept 8, 1983 See also, "551 the TOS (Orbital Sciences Corp. /Martin Marietta), Selling Conestoga 1-6," Space Business News, Aug 13, 1984 "551 has a contract to launch the cremated remains of humans and the Delta Transfer Stage (Astrotech, McDon- into orbit in an orbiting mausoleum The firm awaits DOT approval nell Douglas) were developed as private initia- to do so See "SSI Awaits DOT Mission Approval," Space Busine,s tives. The IUS was developed for the Air Force News, Jan 28, 1985, p 1 I Levine, "Shooting for Outer Space," Venture, October 1983, by Boeing, and the Centaur is being developed pp 116 117 under a joint NASA-Air Force contract by Gen- ""Arc/Starstruck Plans Three Tests in '83," Space Business News, eral Dynamics. There might be little competition July 18, 1981, p 6 ',See,forexample,"Reorganization Gives New Lifeto between these upper stages because they are de- Starstruck," Space Bustnecs News, Oct 22, 1984, pp 2-3 signed to serve different weight classes of satel-

1 31 122 International Cooperation and Competition in Cilian Space Activities

lites. Their approximate capacities to geostation- Bristol Aerospace, Ltd., of Canada, has alsoan- ary orbit are: PAM-D-1,400 pounds, IUS-5,000 nounced plans to offer a low-cost commercial pounds, TOS-5,000 pounds, Delta Transfer launch vehicle.4° Bristol currently manufactures Stage-7,500 pounds, Centaur-10,000 to 14,000 the Black Brant sounding rocket, which has been pounds. Although the IUS and TOS/AMSare in used for research by several space agencies in- the same weight class, the currently planned TOS cluding NASA and ESA. Bristol plans to develop should cost substantially less than the IUS." a solid-propellant vehicle capable of placing 500- The only potential foreign participation in the to 1,700-pound payloads into low-Earth-orbit and Shuttle upper stage market is the Italian Research payloads of up to 800 pounds into geosynchro- Interim Stage (IRIS).38 The IRIS is being developed nous orbit. The company hopes to conduct flight by the Italian Government and aerospace indus- tests in 1988 and to begin commercial launch ac- tries and should be able to launch 1,900 pounds tivities by 1990. to geostationary transfer orbit or about 900 pounds to geostationary orbit. The limitedcapac- Buyers of Space Transportation ity of the IRIS will prevent it from launching even Services small Delta-class communication satellites; however, it may be ideal for scientific satellites and At present, the three primary purchasers of small commercial satellites should a market de- space transportation services are the military, na- velop for these. The first flight of the IRIS is tional and cooperative space programs, andcom- planned for November 1986. munication satellite service providers. Activities of the military and of the various national and FOREIGN PRIVATE SECTOR cooperative space programs will account for over In the late 1970s, a private West German firm, 75 percent of the total demand for launch services over the next decade. Although these activ- OTRAG (Orbital Transport-und-Raketen Aktien- ities are numerically the largest, they raise few gesellschaft), announced its plans to offer private launch services. However, political complications international competitive issues. In the United with the West German Government, combined States, most NASA and Department of Defense with the company's inability to find (DOD) payloads will fly on the Shuttle. Anum- a permanent ber of DOD payloads will fly on location for its launch pad, have so far prevented an ELV designated as a Shuttle backup. The payloads of ESA OTRAG's success. OTRAG plans to create a family of vehicles using clusters of identical liquid and the ESA member states will most likely fly pro- on Ariane unlessas in the case of Spacelab pulsion units; such units would be addedor sub- tracted to match the payload weight. The'r the unique capabilities of the Shuttle areneces- smallest model would be capable of launching sary. International commercial competition in a 440-pound payload to an altitude of 31 miles space transportation will take place primarily with regard to large communication satellites launched and their largest vehicles would be able to carry to geostationary orbit. a 1,100-pound payload to 174 miles. OTRAG successfully tested a two-unit rocket in 1977 anda Outside the Soviet bloc, the buyers of civilian four-unit rocket in 1978. Eventually, OTRAG communication satellites can be divided into hopes to create a vehicle in the At iane class; how- three submarkets: U.S. communications carriers, ever, its present activities are limited to launch- global international satellite organizations, and ing sounding rocket-class vehicles from Sweden's considered together, foreign national and region- Kiruna launch site." al satellite systems.

3713AM and TOS upper stages only go to geostationary transfer U.S. Communications Firms orbitFigures given here assume an appropriate apogee motor 1E Vallerani, F. Veresio, and LBussolino, "IRISA New Ital- Of these submarkets, that of U.S. communica- ian Upper Stage System," 34th Congress of the International As- tronautical Federation, Oct. 10-15, 1983 tions carriers is by far the largest. U.S. commu- 11. Lenorovitz, "Otrag Prepares for Full Launch Service," Avia- tion Week and Space Technology, Sept. 12, 1983, pp. 77-78 4 "Expendable Launch Vehicle," Bristol Aerospace Ltd., 1983.

132 Ch. 5Space Transportation 123 nications and satellite manufacturing firms such therefore, should be treated with considerable as AT&T, RCA, Western Union,ITT, Satellite Busi- skepticism. ness Systems, American Satellite,Ford Aerospace, Included in the forecasts is launch demand gen- and Hughes now own 21 geosynchronous com- erated by satellite replacement. Because commu- munication satellites, used primarily for domes- nications satellites typically have design lives of tic U.S. communications. In limited but growing less than 10 years, most of the satellites that are numbers, they are also used for transborder com- expected to be in orbit or launched before the munications between the United Statesand end of 1985 will therefore cease operation before North and South America and the Caribbean. 1995 and, if replaced, will generate demand for Up to the present, forecasters have been opti- launch services. mistic regarding the continuing need for launch The Shuttle, Ariane, Delta, Atlas-Centaur, and services to put U.S. communications satellites in Titan launch vehicles could all meet the needs orbit. One indication supporting this prospect are of U.S. communication satellite system operators. the 81 pending and approved applications filed The Shuttle, although more sophisticated than its with the Federal Communications Commission competitors, has no special advantage in launch- (FCC) to construct and launch satellites, and to ing satellites to geostationary orbit. If all these receive orbital locations. Two studies done for vehicles are equally reliable, the choice of NASA have also concluded that the demand for launcher will be based primarily on: 1) the price launch services for communications satellites of the vehicle, 2) the reliability of the launch would remain strong.'" One estimated that 61 schedules, 3) the relative simplicity of planning, U.S. communications satellites would be laun, -I documenting, and processing their payloads.42 during the 1986-89 period, with 68 n 2 launched before 2000; the other that between INTELSAT and INMARSAT 97 and 163 U.S. domestic communications payloads would be launched between 1984 and The International Telecommunications Satel- 1999. lite Organization (INTELSAT) and the Internation- al Maritime Satellite Organization (INMARSAT) Recent events, however, put these optimistic maintainglobal communications systems. projections in doubt. First, the expected surge in INTELSAT, which also provides space segment demand for direct broadcasting satellites has capacity for many countries that do not have na- failed to materialize. Second, current substantial tional systems, currently has 15 satellites in or- excess satellite capacity (see ch. 6) maydelay or bit, 8 of them large INTLLSAT V satellites, which deter firms from proceeding with announced were launched by Atlas-Ceriaur and Ariane from plans. Third, in the late 1980s and 1990s, com- 1980 through 1984. Current plans arefor munications carriers are expected to have large INTELSAT to launch 13 satellites in the 1985-87 fiber optic networks in place that will compete period. If all are launched as planned, six of them with satellite communications in virtually all ap- will be INTELSAT V satellites, and seven will be plications except point-to-mu Itipoint, sparse area, INTELSAT VIs. The latter series of satellites are and some mobile communications. While the very large and will be able to carry approximately outcome of this technological competition can- 40,000 separate simultaneous telephone conver- not now be clearly foreseen, fiber opticcables sations. Still on the drawing board is an INTELSAT and other terrestrial modes linked to fiber optic VII series. local area networks will almost certainly carry some traffic that satellites heretoforehad been Whether all the INTELSAT Vls will be launched expected to carry. Optimistic projections of the as panned is in some doubt. INTELSAT transat- number of communications satellite launches, lantic and transpacific satellites will compete with undersea libel optic cables, several of which are

41Outside Users Payload Model, Battelle's Columbus Laboratories, 42NASA Advisory Council Study of Effective Shuttle Utilization, NASA contract NASw-338, lune 1983 For a more complete dis- NAC Task Force for the Study of Effective Shuttle Utilization, Nov. cussion of the demand for communication satellites see ch 6. 17, 1983

133 124 International Cooperation and Competition in Civilian Space Activities

planned for the late 1980s and early 1990s. In munications.43 Countries that have the ability to addition, some competition from private U.S. place large payloads into geostationary orbit will satellite systems is likely to emerge. Although presumably use their own launch vehicles. For INMARSAT is purchasing its own system of sat- example, the Europeans will favor the Ariane ellites, it currently leases capacity from INTELSAT rocket. Countries such as Japan and China, which and other systems. have at present only a limited launch capability, will within 10 years probably be able to launch Satellites of the INTELSAT I,II, and III series were launched on the Delta; satellites of the large communication satellites to geostationary orbit. INTELSAT IV and V series were launchedon the Atlas-Centaur. To satisfy political pressures that Countries which do not possess an independ- have arisen since the development of Ariane, ent launch capability will, like the U.S. domes- INTELSAT now intends to distribute its b.'siness tic communications suppliers, be concerned with between U.S. and European vehicles. The Ariane the price, schedule, reliability, and processing has been used to launch an INTELSAT V, and the simplicity of individual launchers. The availabil- Shuttle will be used for the initial INTELSAT VI ity of favorable financing and/or trade offsets (par- launch. ticularly for developing countries) may also be an important consideration." As a result of the projected size of the nextgen- eration of INTELSAT satellites (INTELSAT VI will In addition to communication satellites, other weigh 4,800 pounds in orbit) the only vehicles space activities such as remote sensing (ch. 7), that could launch them are the Shuttle, Ariane- materials processing (ch. 8), and navigational sat- 4 (under development), Atlas (improved version ellites (app. C) may require commercial launch not developed), and Titan. services. Many activities conducted in low-Earth- orbit might be launched not only with the Shut- Foreign Satellite Systems tle, Ariane, Delta, Titan, and Atlas, but also with This category includes both the satellites of in- the new generation of low-cost privately developed launch vehicles and with the vehicles of Ja- dividual foreign countries (privateor government owned) and organizations established to provide pan, China, and perhaps Brazil and India. Cur- services to regional groups of countries. In addi- rent demand for such activitiesislimited; however, together they constitute a significant un- tion to voice communication, such systemspro- vide TV distribution, maritime communication, certainty in future launcher demand estimates. data transfer, and direct broadcast TV. The Shuttle, because it allows human interac- At present, Canada, France, Great Britain, In- tion with and retrieval of payloads, has a decided donesia, japan, the Middle East countries (Arab- advantage over other launch systems for manu- sat), and NATO all have operational systems. facturing in space. Unless the Ariane is substan- Other planned but not yet operational systems tially modifieda subject which has been dis- include: ITALSAT (Italy), MORELES (Mexico), cussed within ESAit cannot compete with i.rie SBTS (Brazil), AUSSAT (Australia), ECS (Eutelsat), Shuttle for MPS and other payloads that require LUXSAT (Luxembourg), and STW (China). Cur- human interaction. Other ELVs are equally disadvantaged in comparison to the Shuttle. rent users of the INTELSAT systemmay convert to national or regional satellite systems if they experience a dramatic increase in traffic volumeor it becomes politically or economically desirable "Battelle, up. cit , note 41 "Rainbow Satellite Inc 's decision to launch two communication to exercise greater control over their communi- satellites on the General Dynamics Atlas-Centaur is a good exam- cations network (see ch. 6). ple of the value of creative financing. In order to insure that Rain- bow's launch business did not go to either NASA or Arianespace, Battelle has estimated that between 1983 and General Dynamics agreed to provide $200 million in financing for 1998 anywhere from 110 to 176 satellites will be Rainbow and to give "a hack-up commitment for all of the capac- launched for foreign national ity" of one of the satellites See Space Business News, July 16, 1984, or regional com- P1.

134 Ch. 5Space Transportation 125

COMPETITION IN SPACE TRANSPORTATION The entrance of ESA's Ariane rocket into the vehicle was a declaration of political and techno- international marketplace brought an end to logical independence from the United States. NASA's monopoly in commercial space transpor- In Japan, space technology has bun identified tation services. This fact, combined with the de- as an area of future economic significance. A velopment of the Shuttle and the potential entry 1981 report by the Ministry of International Trade of other new launch vehicles, has created a situ- and Investment (MITI), emphasized the export ation where, for the first time, supply could sig- potential of space technology and concluded that nificantly exceed demand in the space transpor- an indigenous space industry is vital because: tation service market. Prior to these two occur- rences, vehicles were manufactured and con- As unilateral introduction of technologies from sumed as they were needed; therefore, the sup- foreign countries is getting more difficult, it is ply of launch services was always roughly equiv- necessary to strengthen Japan's own bargaining alent to the demand for that service. Depending power through accumulation of necessary technological know -how.4' on the size of demand for satellites, NASA and the other launch service suppliers may find them- With a smaller economic and technical base to selves in a situation where they must compete draw from than either the United States or Eur- for a limited number of payloads. ope, and lacking the major military program to ensure political and financial support, the Japa- Development of Competition nese launcher program has relied on close cooperation with the United States. Access to space via a capable and reliable launch vehicle is important to the technological Brazil, India, and China are also developing and commercial goals of all nations that may wish their own launch capabilitiesfor many of the to orbit satellites. The desire of some nations to reasons mentioned above. All three countries develop an indigenous launch cepability derives possess a strong desire to be technologically infrom three considerations: first, a lack of confi- dependent from the developed world, to gain any dence that launch services would be available economic benefits that derive from the applica- when needed and without restriction from the tion of space techno!ogy, and to be regarded as United States or the Soviet Union; second, an in- belonging to the prestigious club of "space pow- terest in enhancing national prestige by demon- ers." Although the launch vehicles being devr_al- strating the technical virtuosity required to main- oped in these countries are at present somewhat tain an independent launch service; and third, limited, their political importance will probably an intention to participate in any economic gain assure their continued existence. In some re- to be derived from a wide range of commercial spects, national launch vehicle programs can be space services. Some newly industrialized coun- compared to national airlinessome are con- tries, may also desire to acquire launch vehicle ducted primarily for profit, others play the role and precision guidance and control technologies of enhancing "prestige" and "national self-image." for use in military ballistic missile systems. To date, competition in launch vehicles has Some European countriesparticularly France been limited to those developed by governments. have always been reluctant to concede to the The fact that private or semi-private launch serv- United States a monopoly in launch vehicles. ices will soon be available introduces a different Consequently, U.S. hesitation before launching kind of competition into this market. On May 16, the French-Gorman Symphonie communications 1983, the President announced that the U.S. Gov- satellite in 1971 strengthened European determi- ernment fully endorsed and would facilitate the nation to develop an autonomous launch capa- commercial operation of expendable launch ve- bility.45 The decision to build the Ariane launch "Report of the Deliberation Council on Basic Problems in the "Civilian Space Policy and Applications, op. cit., p 363. Space Industry, MITI, Apr. 20, 1981.

133 126 International Cooperation and Competition in Civilian Space Activities

hides (ELVs) by the private sector.47 He assigned the Department of Transportation the task ofas- sisting commercial ELV operations andrecom- mending necessary regulatory, policy, and treaty changes. Subsequent legislation (Public Law 98- 575), signed into law on October 30, 1984,con- firmed and strengthened the previous Executive Order. Whether such private sector participants can compete with Government-supported launch vehicles and services has yet to be demonstrated.

Assessment of Demand Because U.S. space transportation policy will significantly affect the supply of launch vehicles, it is important to give some consideration to the worldwide demand for launch services. NASA hopes that the four-orbiter Shuttle fleet will be Photo credit: National Aeronautics and Space Administration able to provide 24 launches peryear by 1988, and Arianespace hopes to be able to launch 10 Artist's depiction of a Shuttle paying a visit to a Space Operations Center (SOC) in Earth orbit. Arianes per year by that time. Experts disagree about whether the demand for launch vehicles The results of the Rockwell International (fig. will exceed the supply. They further disagree 5-4) and the Battelle (fig. 5-5) assessments of fu- about what, if any, public policies topursue to ture launcher demand are presented below to il- affect supply and demand.° Estimates of demand lustrate the connection between the demand for must be viewed with caution since they are, at launch vehicles and U.S. space policy.° OTA has bottom, only "best guesses." Such estimates will be affected by changes in: not conducted an independent appraisal of either of these studies; and therefore offers no opin- U.S. and foreign government space activi- ion as to their validity. They are included here tiesBuilding a space station,pursuing to provide a rough quantitative dimension to this planetary exploration, or pursuing additional discussion.5° military activities in space will increase the demand tor launch services. Result 1: If the Shuttle fleet can provide 24 flights per year and the Ariane 10 flights Space policyEncouraging or subsidizing per year, and the Rockwell projection of total de- commercial activities such as remote sens- mand is correct or low, then by 1988 addi- ing or materials processing in space could increase demand. tional launch capacity will be needed. This could be supplied by U.S. commercial or for- Space technologySatellitr3 with longer lives eign ELVs or additional orbiters. could reduce the neLd for new satellite launches; new technologies suchas DBS "See also: Projection of Non-Federal Demand for Space Trans- may increase the demand for new launches. portation Services Through 2000: An AIAA Assessment for the Of- Terrestrial technologiesUse of fiber optics (ice of Spence and Technology Polley of the White House, Amen- can Institute of Aeronautics and Astronautics, !an. 19, 1981; Systems may reduce the demand for communication Analysis of National Space Launch Possibilities, The Aerospace satellites; technologies such as genetic engi- Corp., March 1983, "United States Commercial Expendable Launch neering might reduce the desirability ofcon- Vehicles," General Dynamics, 1982; Assessment of Constraintson Space Shuttle Launch Rates, National Research Council, Commit- ducting biological and materials research in tee on NASA Scientific and Technological Program Reviews, April space. 1983 %These analyses are based on the Shuttle reaching 24 flightsper "White House press release, May 16, 1983 year and Anane reaching 10 flights per year, assumptions that re- "The question of whether or not NASA should be competing main to be proven by experience. Some analysts doubt that NASA for commercial launches is discussed in the policy options. will be able to reach that level of flights before 1990.

136 Ch. 5Space Transportation 127

Figure 5.4. Projection of Future Space Shuttle Demand Rockwell International 50 48 a 44 (Total demand) 42 k + estimated 8 of 40 reflights 38 1 36 34 32 . 30 1 28 26 24 22 20 18 (DOD demand) 16 14 °' (NASA demand) 12 10 (Aerospace Corp DOD estimates) 8 ei . ..--:."--""4..------N(Non-NASA demand) 6 NonDOD 4 ....aft, ow....

0 1983 19841985 1986198719881989 19901991 1992 19931994 `f ears

Rockwell intemrtional's Prorection of Future Space Shuttle Traffic Demand, (July 1963) Time period 1963-1964 (shown here 1904-1964). Scope All NASA, 000, commercial and foreign (non-Soviet) space transportatIon demand Key assumptions Pa/loads booked on U S. ELY* would fly on them Payloads for Japan end China would fly on their own national vehicles unless specifically booked elsewhirre The Alien* will fly full (5 launch 1964-6. 10 launches 1906-1994) Model Includes funded, extensions or follow-on* and potential now missions Equivalent Shuttle Fights "All payloads characterized In tens of equivalent Shuttle payloads

Result 2: Starting with the assumptions listed mercial nor other foreign ELVs would be nec- in Result 1, if the Rockwell projection for essary to satisfy total launch demand. DOD demand is overstated (as has been sug- If the demand for launch services were unlim- gested by an Aerospace Corp. study)," ited the United States would be well-advised to and/or, some DOD payloads continue to fly pursue a policy of encouraging both Shuttle use on ELVs, then the Shuttle and Ariane could and the commercialization of ELVs. With the de- probably meet the total launch demand mand for launch services uncertain, the questions through 1994. become more complex. Should the Shuttle be al- Result 3: If the Rockwell and Battelle esti- lowed to compete with private firms for a limited mates of non-NASA, non-DOD demand are number of commercial la inches? If the der land accurate, but Rockwell's NASA and DOD es- for launch services exceeds the Shuttle's capac- timates are both overstated, then the Shut- ity, should additional orbiters be purchased, or tle and Ariane will create a surplus of launch should ELVs be used to fill the gap? If the Shuttle capacity through 1994. Neither U.S. com- fleet is diminished by a catastrophic accident or "Systems Analysis of National Space Launch Possibilities, op cit unforeseen technical problems, how is the de-

13.7 128 International Cooperation and Competition in Civilian Space Activities

Figure 5.5. Outside Users Payload Model Battelle's Columbus Laboratories (nominal non-NASA, non-DOD demand) 25

1985 1988 1987 1908 1989 1990 1991 1992 1993 1994 Years

Battelle's Outside Users Payload Model (June 1964 Time period 1963-1996 (shown Mrs 1964-1994) Scope All known non-NASA, non-000 reimbursable offloads scheduled to be flown by non-Soviet-bloc countries Kay assumptions Shuttle and Arians successful and price competitive U S commercial ELVs not considered Space station not considered No revolutionary technical, economh. or social developments "Equivalent Shuttle Flights "MI payloads characterized In terns of equivalent Shuttle payloads mand for launch services to be met? In the long Nature of Competition run, will private ELVs or the Shuttle prove to be the more cost-effective way to meet the additional Although there are a number of potentialen- demand? Unless additional orbitersor ELVs are trants, current competition in space transpor- ordered, will the production lines for eitherre- tation is predominantly between the U.S. Gov- main open? Given the U.S. Government'scom- ernment-supported Shuttle and the European mitment to the space station and otherspace government-supported Ariane.52 The Shuttle and goals, is cost effectivenessan important short- Ariane are competing primarily for the launch of term consideration? large geosynchronous communication satellites. A recent study conducted for NASA estimated The primary focus of this study is international that from 1983 to 1998 there will be between 103 competition and cooperation; therefore, many and 163 non-NASA, non-DOD payloads for which of these questions are beyond the scope of this NASA and Arianespace are in direct competi- report. Those that pertain directly to international competition are discussed in greater detail in the "Competition between U.S. upper stage manufacturers is to a great extent dependent on, and subsidiary to, the Shuttle success- policy options that follow. fully competing with other launch vehicles 136 Ch. 5Space Transportation 129 tion." (See figs. 5-6 and 5-7.) Of this number, the These particular ,disadvantages are quite impor- study estimated that between 29 and 72 payloads tant to commercial launch customers. As a re- would go to Arianespace.54 That is a loss of be- sult, the Ariane launch vehicle, which is less so- tween one and two dedicated Shuttle flights per phisticated than the Shuttle,iscapable of year over a period of 15 years. competing with the Shuttle for payloads. (In addition, Ariane competes well with the Shuttle on The primary advantages of the Shuttle are that the basis of price.) For the same reasons, private it is manned, reusable, and able to retrieve and U.S. ELVs, which are technically comparable to deploy large objects in low-Earth-orbit. Normally, Ariane, can also compete with the Shuttle. none of these advantages is important when communication satellites are launched to geosynchro- The technical comparability of the Shuttle and nous orbit.* Its primary disadvantages are that Ariane with respect to launching communication schedules have slipped about 15 percent each satellites has focused competition primarily on year, raising questions of reliability and planning, launch price and financing." and that documentation and integration are more Current pricing policies have occasioned com- complex and expensive than those of Ariane. plaints of unfair competition on both sides of the Atlantic and generated considerable unrest 53Outside Users Payload Model, op cut among private U.S. ELV manufacturers. In a state- "In 1984, Ariane and the Shuttle each took about half of the commercial space transportation market However, when certain types of malfunctions occur, in either the satellite or its upper stage, astronauts or payload specialists may be able to repair the malfunction or retrieve a satellite that has gone "Should a U S commitment to a space station or an increase into an anomalous orbit An example was the recent retrieval of in military space activities reduce the number of commercial Shuttle the Westar and Palapa spacecraft after their PAM-D stages failed flights, or should a catastrophic failure reduce or ground the Shut- See "Astronauts Deploy, Retrieve Satellites," Aviation Week and tle fleet, availability would become a more important factor than Space Technology, Nov 26, 1984, pp 20-23 price cr financing

Figure 5-6.Low Model Market Share by Launch Vehicle

Nomi.ial Nominal Split Split. STS202 5 STS54.3 Ariane121 5 Ariane-34 8 Japanese ELV Misc. ELV 8.0 3.8

435 payloads 104 equivalent Shuttle flights

Assumes 75% average Shuttle load factor SOURCE Outside Users Payload Model Battelle Columbus Laboratories (NASA contract NASW-338), June 1983

13J 130 Internationcl Cooperation and Competition in Civilian Space Activities

Figure 5.7.High Model Market Share by Launch Vehicle

Nominal Nominal Split Split: STS357 STS-112.4 Ariane171 Ariane-48 8 Japanese ELV 79

705 payloads 187 equiva'ent Shuttle flights

Assumes 75% average Shuttle load factor SOURCE Outside Users Payload Model Battelle Columbus Laboratories (NASA contract NASW-338), June 1983

ment before the Senate Commerce Committee, When establishing Arianespace, we suc- NASA Administrator Jamen Beggs cautioned:56 ceeded in convincing ESA and its member States that the STS (Space Transportation System) pric- The French are pricinE their service very. very ing policy during the first 3 years of its opera- competitively. As a matter of fact, they have set tions involved a huge subsidy, thus creating an the price very close to Shuffle-type pricing. They unfair competition. In response, it was agreed are, without any question, subsidizing that, be- that for the European payloads launched before cause their costs are not dow .1. With respect to mid-1986, the standard price negotiated with the cost per launch and the financial terms ESA...would include a 25-percent extra ... they are more than competitive with us charge to support the company. .. .(T)hey are formidable competition, and we We consider, and hope you will consider, that are not taking them lightly. these practices are not very sound, as they The Europeans take exception to sugg.2sVons that charge the research and development programs the Ariane is unfairly being subsidized. Frederic on both sides of the Atlantic, instead of charg- D'Allest, President of Arianespace, testified before ing the use; s who reportedly look to gain great a Senate subcommittee:" financial profit from their commercial applications. There is no transfer of money between Ariane- As long as the STS production and operation space and ESA and the other European organi- costs do not reflect realistically the STS pricing zations other than the payments due to Ariane- policy, we shall claiisi some support through the space within the framework of the ...lunch European payloads launch prices, to ESA and its 2rvices contracts... member States. The principal complaint of the Europeans has "NASA Authorization for Fiscal Year 1983 Hearings before the been that the Shuttle priceunlike the price iubcommittee on Science, Technology, and Space of the Senate charged for U.S. expendable vehicles, which was :ommittee on Commerce, Science, and Transportation, 97th Cong, 2d sess , February 1982, Statement of Hon James A Beggs, p 41 lased on the recovery of"allreasonable "Ibidp 170. statement of Frederic D'Allest costs"bears little relationship to the cost of

1 4 a Ch. 5Space Transportation 131 operating the Shuttle. The price currently charged As described above in Frederic D'Allest's state- by NASA for a Shuttle launch was developed in ment, the ESA nations also felt that the early suc- 1975 and was designed, in part, "to effect early cess of Ariane could not be assured if the price transition from expendable launch vehicles."" were based entirely on launch costs. An Organi- At the time, NASA felt that Shuttle costs would zation for Economic Cooperation and Develop- fall as they gained more experience with the sys- ment (OECD) study has estimated that the Ariane tem and the flight rate increased. It was assumed is priced at about two-thirds of its cost.65 The com- that there would be a tendency among users to mercial Ariane price is approximately $54 million, delay Shuttle use in order to take advantage of or $25 million to $30 million per customer for the lower prices in later years." dual launch. This is purportedly a temporary pro- -notional price to be followed by a "more nor- In order to overcome this tendency, NASA mal cost coverage basis." ESA States pay a 25 per- based the Shuttle price on the estimated 12-year cent additional charge to support the Ariane average cost of the program. As a result, cost of program. launching a Delta-class payload to geosynchronous orbit on the Shuttle was about one-half of Price competition between Shuttle and Ariane what it would have cost to use an expendable has made it difficult for private sector ELVs to en- Delta.60 The initial price for a dedicated Shuttle ter the market. In an attempt to alter the current bay was $18 million in 1975 dollars or about $40 situation, Transpace Carriers, Inc., seller of the million in 1984 dollars.61 Although exact, per commercial Delta launch vehicle, filed a com- flight, Shuttle costs (recurring costs per flight, plaint with the Office of the U.S. Trade Repre- refurbishment, support facilities, and personnel) sentative charging that Arianespace was engaged are difficult to calculate, it has been estimated in predatory pricing. The complaint, filed under that each of the five Shuttle flights in 1983 cost Section 301 of the U.S. Trade Act of 1974, stated $375 million.6? that Arianespace charged prices to U.S. firms that were 25 to 33 percent lower than those charged In 1981-82, when NASA began to reassess its to ESA members, and that as a result of this prac- pricing policy, several U.S. customers had already tice TCI had lost sales to Arianespace." switched from the Shuttle to Ariane. NASA felt that a pricing policy based on current Shuttle In its petition, TCI asked that the President seek costs would lead to "an unack.eptable commer- the immediate discontinuance of the two-tiered cial and foreign users price. "63 NASA does plan pricing policy; the elimination of the cost-free or to raise the price for a dedicated Shuttle launch below-cost support in facilities, services, and per- in 1985 to $38 million 1975 dollars (about $80 sonnel; and the subsidization of mission insur- million in 1984 dollars). President Reagan's pol- ance rates. Pending the cessation of these prac- icy statement of May 16, 1983, declared that after tices, the complaint requested the President to 1988 NASA should charge a "full cost recovery" retaliate by prohibiting Arianespace from adver- price;64 if prices continue to fall as experience is tising and marketing its services in the United gained with Shuttle operations, the 1988 price States and by imposing economic sanctions against could still be as high as $100 million to $150 mil- the goods and services of the Member States of lion in 1984 dollars. ESA.

"C M Lee and B. Stone, "STS Pricing Policy," AIM Space Sys- "OECD, Trade m High-Technology Products, The Space Prod- tems Conference, Oct 18-20, 1982; Washington, DC, p. 1. ucts Industry, Paris, 1985. "Ibid., p. 2 "See "U.S. Space Launch Services Company Brings Unprece- "Ibid. dented Complaint Against Europeans," U.S. Import Weekly, vol. "'Based on an escalation rate of 2.192 from 1975 to 19b4. Note 9, June 6, 1984, p. 1088. The complaint stated: that this is the price for a "dedicated payload bay", a Delta-class As a beneficiary of such subsidy practices Arianespace has been satellite would only take up about 25 percent of the bay, and there- able to offer launch services to U.S companies and third country fore the price to launch this payload would be about 25 percent customers at rates which are substantially less than those charged to Member States of ESA and substantially below those prices that of the "dedicated payload bay" price Arianespace would be able to charge in the absence of subsidiza- "James Abrahamson, testimony before the Subcommittee on tion This unfair competitive advantage has resulted in lost sales to Space Science and Technology, February/March 1984, p. 584. petitioner and price suppression, if not depression, of bid prices Fur- "Lee and Stone, op. cit. thermore, it poses a serious threat to the establishment of a United "White House Press Release, May 16, 1981 States commercial launch services industry.

141 132 International Cooperation and Competition in Civilian Space Activities

Responding to the TCI complaint, Erik Quist- barriers to the commercial success of any private gaa rd, ESA Director General, announced that his ELVs. Assuming a 65,000-pound capacity andan agency was willing to talk to the U.S. Govern- $80 million (1984 dollars) price per launch, the ment in an attempt to "create conditions for Shuttle can place a Delta-class payload into healthy competition" in launch services.67 low-Earth-orbit for about $1,200 per pound. To summarize, the price for an Ariane launch However, because the full payload capacity is has been set so as to compete effectively with the rarely used and in order to reach geosynchronous Shuttle. The ESA nations, in order to assist in this orbit communication satellites require the addi- goal, pay more for a flight than would thepur- tional weight of upper stages and cradle struc- chaser of a commercial launch. tures, the Shuttle cost of placing a payload into orbit is about $10,000 to $20,000 per pound de- The Shuttle price rests heavily on the follow- pending on the upper stage (see table 5-2). This ing reasoning. First, in the absence ofcommer- is compared to the approximate per pound cost cial payloads the Shuttle would fly anyway. As of a Delta ($24,000), an Atlas-Centaur ($25,000), a consequence, NASA charges customers only or the Ariane 3 ($20,000). for the amount that their payload adds to thecost of flying all Government payloads for a given pe- At current prices, the Shuttle is less expensive riod and not for a portion of the total cost ofan than any of the ELV alternatives; however, this individual flight. Second, the cost of flying the advantage will be lost as Shuttle prices increase. Shuttle will decrease substantiallyas experience At $125 million per dedicated launch, the Shut- is gained. By spreading the average costover a tle is competitive though not preferable to the number of years and projecting a rapid decline ELVs; at $150 million per launch the Shuttle in Shuttle launch prices, the near-term average ceases to be financially attractive for payloads not cost can be kept low. As a result of current NASA/ requiring human interaction.68 ESA price competition, launch service purchasers NASA has expressed concern that it cannot ef- (largely satellite communication service provid- fectively compete with the Ariane because of the ers) are benefiting-at least in the early years of favorable financing that Ari2nespace has been Shuttle operations-from substantial government subsidies for each launch. "Prices given here are approximations, supplied to illustrate the Shuttle's competitive position vis-a-vis ELVs. Such estimates do not Given the commitment of the United States and reflect the dynamic nature of the launch vehicle industry. NASA the European nations to the success of theirre- maintains that Shuttle prices will fall substantially as experience is spective vehicles, these pricing structuresare gained It is also possible that less expensive upper stages or orbital transfer vehicles will be developed, tnereby reducing the cost defensible; they do, however, raise substantial to geostationary orbit. Both General Dynamics (Atlas-Centaur) and Transpace Carriers Inc. (Delta) have stated that commercial com- e7"ESA Replies to Charges on Arianespace Pricing," Aviation petition and private sector efficiencies will reduce the cost of ELV Week and Space Technology, July 2, 1984, pp 22-23 launches.

Table 5-2.-Transportation Costs to Geosynchronous Orbit(approximate)

EL vs Shuttle Maximum Maximum payload Cost/lb payload Cost/lb to GEO Vehicle (lb to GEO)to GEO vehicle (lb to GEO)$83M price$125M price$150M price Delta 1,350 24,000 PAMD 1,350 17,000 24,000 28,000 Atlas-Centaur .. 2,600 25,000aPAM-Dll 2,000 17,000 23,000 Arlene 3 .... 27,000 ... . 2,700 20,000a PAM-A 2,200 17,000 24,000 28,000 T '-.n 34DIIUS. .. .. 5,000 31,000 Shuttle/IUS 5,000 30,000 38,000 43,000 Titan 34D/TOSb .. . . 6,400 17,000 Shuttle/TOS 6,800 14,000 19,000 22,000 Ariane 4 4,500 19,000 Shuttle/Centaur. 14,000 9,000 12,000 14,000 OTA figures bTransfor Orbit Stage SOURCE M C Simon and 0Steinbroun, The Economics of Space Development," General Dynamics, Convair Division, October 1983,p 3

1 4A.9 Ch. 5Space Transportation 133 able to offer its customers. The Ariane payment Figure 5- 8. Arianespace Financing schedule requires that a company pay 20 percent Customer of the cost 30 months prior to launch; the bal- purchase payback ance is spread over 5 years at low interest rates II while the satellites are in orbit earning revenue (table 5-3 and fig. 5-8). Typically, Arianespace will finance 80 percent of the cost, of which 80 percent of the debt will be at a subsidized rate.69 The remaining 20 percent of the 80 percent financ- -2 -1 0 1 2 3 ing would be at market rates. 14-3 years 5 years Although NASA cannot provide financing and Launch Arianespace gets paid up front requires that the entire cost be paid prior to Financing by French/German banks launch, it can, with the help of the U.S. Export- Rates negotiable (typically 9-10%) Import Bank (Ex-Im), offer financing similar to that Payback out of revenuesstarts 6 months after launch of Arianespace in foreign, non-EEC (European Economic Community) countries.70 Recently, the transaction.71 Similar NASA/Ex-!m packages have Ex-Im Bank agreed to guarantee 85 percent of been proposed for Australian and Colombian costs to be incurred by Mexico for a Shuttle payloads. A recent report by the NASA Advisory launch; this allowed the Private Export Funding Council stated:72 Corp. (PEFCO) to provide the funding for this In virtually all cases the difference between Shuttle and Arianespace rates and terms were "In one example, 64 percent of the subsidized debt was at 9 5 not significant. Except for the loss of a Brazilian percent (from Compagnie Francaise d'Assurance Pour Le Com- launch due to a development loan -nd offsets, merce Exterieur) and the remaining 16 percent was at 10 5 percent, this resulted in a blended subsidized rate of 9 75 percent NASA has not lost any launch business due to See NASA Advisory Council Study of Effective Shuttle Utilization, more competitive financing. Based on recent dis- Nov 17, 1983, p. 30 cussions with senior officers of the Ex-Im Bank, p 30 there is every indication that the Ex-Im will be responsive to export financing for non-EEC countries, particularly when there is competitive Euro- Table 5-3.NASA vs. Arianespace Financing (1982 SW pean export financing involved (emphasis added). (FY 1982415 pricing) When dealing with EEC countries, neither NASA NASA's STS Anane nor Arianespace can employ subsidized financ- Total launch price: ing. EEC export agencies will not provide subsi- SBS ...... $12.65 $22.0 INTELSAT . $28.34 $39.6 dized financing to other EEC members, and, in Prelaunch payments required (SBS example): the absence of such subsidized financing, the Ex- 36 months . . $ 0.1 Im bank will not become involved. In any case, 33 months . . 1 25(10%) since European nations will almost certainly 27 months.... 1 25(10%) $4 4 (20%) due 30 months prior to choose to support the Ariane progi am, there will launch probably be no significant number of Shuttle sales 21 months . 2 13(17%) to EEC countries." 15 months . 2.13(17%) 9 months 2 9(23%) 3 months . 2 9(23%) $12 65(100%) Postlaunch paymentsnone 80% balance payments begin "PEFCO is owned by 52 U.S banks and manufacturers. Its func- 6 months after tion is to provide funding against Ex-Im-guaranteed paper. Its rates launch, spread are essentially the prevailing market rate for U S Government-guar- over 5 years at anteed obligations plus a commitment fee and arrangement fee. 5.10% Interest 71Ibd "Special circumstances may make possible a limited number of SOURCE D A Bletsos. The Current Status and Future Outlook of Foreign Space Transportation Programs, Rockwall International Shuttle Orbiter sales of Shuttle services to EEC members. For example, British Skynet Division military satellite will fly on the Shuttle in 1986 143 134 International Cooperation and Competition in Civilian Space Activities

Arianespace has its strongest potential advan- There is substantial difference of opinionre- tage in U.S. domestic markets. Here, it can pro- garding the effect that the marketing of foreign vide 80 percent financing ata subsidized rate launch systems may have on U.S.space trans- (currently 12.4 percent), and the Ex-Im Bank will portation services. Under these circumstances, not step in because the customers are U.S.na- perhaps the most useful approach is to lay out tionals. In examining this issue, the NAC report possible effects that international competition in acknowledged that it was a potential problem, space transportation may have, with a view to but noted that: setting boundary conditions for an appropriate ... Arianespace financing up to this point did policy response. Possible effects are: not present a big enough discount off the adver- Reduced demand for the Shuttle: A substan- tised Arianespace price to affect significantly and tial reduction in demand would occur only adversely NASA's marketing of the shuttle. if an international provider were to offer However, this could become a se:iouscom- petitive disadvantage in the futureif prices equivalent services to users at significantly equalized.74 lower prices. Now it is already the case that the prices charged to users do not recover In summation, current international launch the Shuttle's operating and maintenance vehicle competition has been betweengovern- (O&M) costs, and Rockwell International, the ment-supported vehicles and has focused almost manufacturer of the Shuttle, has argued that, exclusively on price. To date, sales have been with only four orbiters anda low annual sought to ensure maximum use of the Ariane and flight rate, these costs probably cannot be the Shuttle and there has been little opportunity significantly reduced (fig. 5-9).76 With Shut- for profit taking." In this environment, thesuc tle prices set to rise over the next few years cessful entry of commercial, nongovernment- in order to more closely approximate aver- supported launch vehicles seems unlikely. age operating costs, there is every likelihood that international providers may capture an Effects of Competition increasing share of the market for users whose spacecraft do not require hum..1 in- Foreign launch vehicles can reduce the de- tervention in orbit. However, this result, in mand for U.S. Government and private sector itself, is not a simple economic negative, for launch vehicles in two important ways: 1) by fly- the prices charged for an all- commercial ing their own and regional payloads, and 2) by flight do not recoup the costs of ma'ing the marketing their services internationally. Reduc- flight. tions in demand caused by the former will be difficult, if not impossible, to offset by alteringpres- With these new facts in view, the Office ent U.S. practices or policies. Other govern- of Management and Budget (OMB) has ments willing to expend the human and econom- stated that the Shuttle's primary goal is to ic resources to develop their own launchcapa- meet U.S. Government needs, not those of bilities can, of course, work toward satisfying all foreign governments or the private sector. of their indigenous launch needs andmay cap- Therefore, the price charged to non-U.S. ture some portion of the overall world demand Government users should reflect the true for space transportation services. However, the "additive costs" of flying themon the Shut- resulting losses to the United States are likelyto tle and should serve to "minimize theover- be small, because the vast majority of nations will all cost to the Federal Government of meet- continue to be launch service consumers rather ing its own needs."77 In a letter to NASA than producers. n"Economic Comparison: Shuttle-Only Fleet vs. Shuttle/Com- mercial ELV Mixed Fleet," Rockwell International Space Transpor cation & Systems Group, May 17, 1983 '41bid "Letter from David A. Stockman, Director, OMB, to James M. isArianespace claims that in 1985 it made a profit on its com- Beggs, NASA Administrator, June 14, 1982; See also C Covault, mercial launch activities See 5 ;,ace Commerce Bulletin, vol II, No "Shuttle Fund Policy Stirs Concern at NASA," Aviation Week and 1, Jan18, 1985, p 3 Space Technology, Oct. 18, 1982. Ch. 5Space Transportation 135

Figure 5-9.Rockwell international Estimates services resulting from foreign competition That the Shuttle Is Most Economical Over ELY: would require no policy change. Indeed, the at High-Volume Operations Stockman letter implies that if Shuttle launch 280 costs were to rise as a result of a reduction

240 in demand, then the price charged to non- U.S. Government users should also be in- 220 creased. 200 On the other hand, it should be pointed out that such a price increase might lead to 180 a further reduction in demand, thus setting 180 up a vicious cycle. In economic terms, this

140 result might make sense, but there is a political price to be paid, namely that the com- 120 mercial market may come to see the Shut- 100 tle as vehicle of last resort, rather than vehicle of choice. In that case, the Shuttle 80 might be perceived as increasingly irrelevant eo to the commercial development of space. 4o Loss of revenue: A 1982 NASA report stated that: "The present projection of capital lost 20 to Ariane is estimated to be approximately 0 $3 billion total through 1984, if every compatible U.S. customer used Ariane."" There is considerable question as to the signifi- 1983 1984 1965 1986 196719881960188(11991196219931994 cance of this finding. It should big ^^..fd that 'Fiscal Year this is a potential loss of income, not a real (Shuttle cost data from NASA Independent assessment, April 1982) loss to NASA, since none of the "out-of- SOURCE "Economic Comparison. Shuttle-Only Fleet vs Shuttle/Commercial ELV Mixed Fleet," Rockwell International Space Transportation and pocket" costs associated with each addition- Systems Group, May 17, 1983 al commercial flight would be incurred. Therefore, the actual "loss" to NASA would Administrator James M. Beggs, OMB Direc- be limited to the amount of "revenue" which tor David Stockman stated:78 would have been derived from each Shut- tle launch and the potential costs of a less- . (T)he appropriate price for excess Shut- tle launch capacity after 1985 would appear than-optimal use of the Shuttle fleet. Since to be one that: the cost of an additional Shuttle flight still ex- Is the highest price at which sufficient ceeds the revenue produced by that flight, users will be available to utilize the excess the marginal value of additional flights is capacity of the Shuttle system after USG debatable. In addition, there is no reason to [U.S. Government] user needs are met. believe that Ariane will capture "every com- At least covers the additive costs of the patible customer." Current Shuttle manifests USG to operate the Shuttle system for non- do not reflect an exodus to Ariane; it will U.S. Government users. probably be the early 1990s before Ariane- Does not in itself lead to the demand for funding of additional capacity by the USG space can handle more than 10 flights per (e.g., additional orbiters, ground support year. Therefore loss of revenue does not systems). seem to be a major problem requiring immediate policy attention. According to OMB's view, a reduction in non-U.S. Government demand for Shuttle

'"(bid "Analysis of Policy Issues, NASA, August 1982, p. 78

14 5 136 International Cooperation and Competition in Civilian Space Activities

Loss of technological leadership: A recent Na- ner consistent with long-term U.S. trade ob- tional Academy of Public Administrationre- jectives. port warned that the loss of U.S. leadership Hindrance of private sector entry: Thecur- in space technology "would be felt acutely rent Shuttle pricing policy, not foreign com- on the economic front."8° The report competition, is the most important barrier to U.S. pared space to the electronics andcommu- private sector entry. Though the private nications fields where the United Statesonce firmsusing current ELVsshould be able held a dominant position and cautioned that to compete on technical grounds with Gov- foreign competitors have "increased their ernment-backed launch services, theyare public expenditures for spaceprograms in not now financially competitive. Although recognition of the benefits of such endeavors the price for a Shuttle launch will be raised to the strengthening of their national econ- by NASA in 1985 and probably again in omies." Broadly taken, this is sound advice. 1988, private operators may not be able to How sNer, with specific reference to space keep current ELV production linesopen. transportation it loses some of its urgency. Should the Air Force decide to purchase pri- The Shuttle is, and will be for some time, the vate launch vehicles to complement the most sophisticated and capable space vehi- Shuttle, the chosen company would be in cle flying. Ariane, Shuttle's main competitor, a good position for successful "commercial" challenges the Shuttle in only one important operation. Firms such as Starstruck and SSI, areathe placement of satellites into geosta- wh;ch do not compete for thesame class of tionary orbit. payloads as Ariane and the Shuttle,may not Loss of prestige: The perception that the be affected by Government pricing policies.'" United States is first among space powers is Secondary effects (e.g., loss of satellite sales, an important advantage, albeit difficult to de- etc.): Although foreign competitionmay not fine. The United States has hadenormous cause serious disruption of the Shuttle pro- influence on the international application of gram, it may have indirect effects on other space technology. This is particularly true U.S. industries. A 1982 NASA policy report with regard to satellite communications and cautioned:82 remote sensing, where the United States not The loss of launch operationsto foreign only developed most of the technology but competition can have important secondary also played a major role in establishing the effects. Foreign candidates for launch services institutions by which it was shared. are candidates for U.S. development of their Some diminution of the world's regard for satellite and of any related ground stations. U.S. technological prowess is certain tooc- When the direct effects are totaled, the esti- cur as alternative, '1 U.S. launch vehicles mate of the direct losses to the U.S. econo- begin to appear. my is very close to $4 billion over (a 12-year wever, the United States period). may offset such changes by taking a leadership role in defining the organizational struc- Although it is possible that Arianespace, ture of the future space transportation indus- or some other foreign organization, might try. Major questions regarding the roles that eventually offer an attractive "package deal" governments and the private sector will play including both satellite and launch vehicle, in this industry, the need for international current buying practices do not indicatea regulation, and the usefulness of competi- cause for concern. Recent examples of sat- tion have yet to be answered. Space trans- ellite double-bookingon both the Shuttle portation is an infant industry; the United and Ariane and the successful entry of Japan States, as its most important actor, stillex- into the ground station market indicate that erts considerable influence. It is appropriate price and product quality remain the primary that the United States exercise its leadership concern of the buyer. to ensure that this industry matures in a man- 611t should be noted, however, that Ariane and Shuttle can both carry small payloads along with larger ones. Their prices for such services could be substantially lower than the private operators oqncouraging Business Ventures in Space Technologies, National could afford to charge. Academy of Public Administration, May 1983,p 6. "Analysis of Policy Issues, op cit. 146 Ch. 5Space Transportation 137

COOPERATION IN SPACE TRANSPORTATION

In the heyday of the Apollo program, President ment in space, DOD had not been an enthusi- Nixon in 1968 impaneled a Space Task Group astic supporter. It was only with the aid of pol- to develop future goals for the U.S. space pro- icy guidance from the President (i.e., that the gram. One of the recommendationsof the Space Shuttle was a "national" system that would serve Task Group (STG) was that the United States:83 both DOD and civilian payloads) that DOD requirements were brought into the design proc- (U)se (its) space capability not only to extend ess. Although NASA had primaryresponsibility the benefits of space to the rest of the world, but for Shuttle development, the President decided also to increase direct participation by the world that for political and economic reasons visible community in both manned and unmanned exploration and use of space. DOD interest and contribution to the Shuttle would be desirable. More specliically, the SIG advocated a national commitment to what would eventually become DOD involvement in Shuttle design resulted in the Space Shuttle." As conceived by the STG, a further reduction of the Europeanrole. Some the Shuttle program would be an international DOD missions would require the addition of an cooperative effort with possible European design upper stage to place payloads into their desired and construction of major subsystems. In 1970 orbits. The European space tug was originally in- and 1971, NASA discussed the possibility of a tended to serve this function. But, because of the European contribution to a variety of coopera- sensitive nature of certain of these payloads, tive ventures including the space transportation DOD decided to take responsibility for the up- system. While Shuttle design options were proper stage development. As a result, theUnited liferating and tradeoffs were being made inter- States discouraged European development of a nally among NASA, OMB, and Congress, NASA tug and urged them to redirect their efforts tried to include the Europeans in the program. toward what was to become the Spacelab. However, in view of the difficulty of resolving Thus, in 2 years, the United States went from emerging conflicts within U.S. agencies, simul- its initial encouragement of substantial interna- taneous negotiations with a multinational Euro- tional cooperation in space transportation system pean group seemed out of the question. development to a position in which only payloads To prevent the total exclusion cf the Europeans were being discussed. This change inposition left from Shuttle activities, NASA suggested that they segments of the European space community sus- might develop the "space tug." This potential picious of U.S. intentions and disturbed by its role was the subject of extensive discussions last- peremptory behavior. ing almost 2 years. As the final design approach Against this background, future cooperati..e ac- to the Shuttle became fixed in the springand tivities in space transportation must ovesome summer of 1972, the role of DOD in supporting major economic and political hurdles. First, the Shuttle development became more important. military security sensitivities which prevented the When the Space Task Group had identified the Europeans from building the space tug still exist Shuttle as the next major technological develop- and would presumably inhibit other types of cooperation. Second, both Europe and Japan foresee possible constraints on their full devel- °'"The Post-Apollo Space Program Directions for the Future," opment of competitive commercial spacecraft Space Task Group Report to the President, September 1969, p 10 "The "space shuttle" endorsed by the STG was a concept rather and services (e.g., communication and remote- than a specific designIt was merely one part of a set of space activ- sensing satellites) if they do not also have con- ities which included a space station, an integrated transportation trol of an independent launch capability for such system and a vigorous progrdm of advanced technology development The integrated transportation system included the basic shut- spacecraft. Both Europe and Japan have active tle, an orbital transfer vehicle and a reusable nuclear stage for larger, aerospace industries increasingly capable of com- manned systems and for follnw-on tuna- or planetary missions All peting in the world markets. Finally, the Euro- of these systems were to satiny three tasic characteristics"wm- monality, reusability, and ec000my - peans are particularly sensitive to the prospect 14'/ 138 International Cooperation and Competition in Civilian SpaceActivities

that any cooperative launching enterprise with The U.S./Japanese agreements of 1969, 1975, the United States would dependon budget sup- and 1980 provide a different example of inter- port that cannot be guaranteed. national cooperation." Under these agreements The ability to reduce costs significantly isone the United States allowed U.S. firms to provide reason why nations might wish to cooperate on the Japanese Government--or firms workingun- der contract to the Japanese Governmentwith the development and/or operation of launchve- hicles. It is expensive to develop and maintain launch vehicle equipment and technology. Al- an efficient, low-failure-rate launching service to though the individual agreements differ slightly, geostationary orbit. Subsidized and inefficient taken as a whole, Japan agreed: 1) touse the tech- launch vehicles may keepaerospace employ- nology for peaceful purposes, 2) not to transfer ment high and help to support production costs, the technology to third countries, 3) touse the but are a drain on theeconomy. technology exclusively for the launch of satellites for the Japanese National Space Development Despite the pull of potential cost savings, the Agency, and 4) not to launch projects for third future of cooperative space transportationre- countries. As a result of these agreements, U.S. search will be further limited if the privatesec- firms have played and will continue to playan tor can successfully offer launch services. Inter- important role in Japanese launch vehicle tech- national cooperation would most certainly nology (see table 5-4). This type of cooperation involve government activiiies that would provide might be used successfully as other nations begin competition to private firms. It is unlikely that the to develop indigenous launch vehicles. United States will find reason toengage in international development programs inspace transportation. 855ee generally, "Space Cooperation Agreement Betweenthe United States of America and Japan," July 31, 1969, T I.A.S.6735.

CURRENT POLICIES

As a corollary to the development of the Shut- White House to developa policy in support of tle, NASA had planned to phase down andeven- their efforts. On May 16, 1983, the Reagan Ad- tually terminate ELVprograms; this plan was en- ministration announced that "the U.S. Govern- dorsed in the President's July 4, 1982, policy ment fully endorses and will facilitatecommer- statement.66 As a result of early Shuttlesuccesses, cial operations of Expendable Launch Vehicles NASA declined to ordernew Delta or Atlas-Cen- (ELVs) by the U.S. private sector." One of the taur vehicles after 1982. Early in 1983, the De- basic goals of the President's ELV policywas to partment of Defense also announced that itwas "ensure a flexible and robust U.S. launchpos- stopping production of the Titan vehicle.87 ture to maintain space transportation leadership." When it appeared that NASA and DODwould Although not cited as one of its major goals, the no longer fund ELV procurement, several private President's statement did observe that: "Each firms expressed interest in providing thisservice commercial launch conducted in the United on a commercial basis. They encouraged the States, rather than by foreign competitors, would strengthen our economy and improveour international balance of payments." 88White House Fact Sheet National Space Policy, July4, 1982 67The DOD decision to launch all payloadson the Shuttle is be- The ELV policy further emphasized that the ing reconsidered The Air Force recently asked Congress to approve procurement of 10 upgraded Titan or Atlas-Centaur vehicles to be Shuttle is the "primary launch vehicle for the U.S. launched two each year for 5 years. Although claiming strongly Government" and that it would also continue to to support the Shuttle, the Air Force has stated that ELVsare neces- be available for domestic and foreign sary to provide "assured access to space." See: Aviation Week and commer- Space Technology Mar 5, 1984, p 19; Apr. 16, 1984,p. 17; Apr cial users. NASA has interpreted this tomean that 30, 1984, p 25; Aerospace Daily, Mar. 23, 1984, p. 129, Defense the Government will not only takecare of its own Daily, Feb 28, 1984, p. 317 needs, but also participate activelyas a compet-

148 Ch. 5-- Space Transportation 139

Table 5-4.Companies That Contribute to Manufacturing Japanese Launch Vehicles (U.S. corporations are givcnI .1parentheses)

Vehicle Covered work N.I N-I1 HI Vehicle integration MHI (MDC) MHI (MDC) MHI First stage: Airframe MHI (MDC) MHI (MDC) MHI (MDC) Main engine ...... MHI/IHI (RIC) MHI/IHI (RIC) MHI/IHI (RIC) Vernier engine ...... IHI (RIC) IHI (RIC) NI (RIC) Strap-on booster NM (TC) NM (TC) NM (TC) Second stage: Airframe MHI (MDC) MHI (MDC) MHI Engine MHI (RIC) IHI (ATC) MHI, IHI Reaction control system ... . IHI (TRW) IHI (ATC) IHI (TRW) Third stage: Airframe MHI (MDC) MHI (MDC) MHI, NM Motor . NM (TC) NM (TC) NM Satellite fairing MHI (MDC) MHI (MDC) MHI (MDC) Onboard equipment: Guidance and control equipment . ... NEC(HONEYWELL), JAE, MHIMHI (MDC) JAE, NEC, MHI, MPC, MSS (MDC) First/third-stage telemeter .... . MELCO MELCO MELCO Command destruct receiver NEC (MMAE) NEC (MMAE) NEC (MMAE) Second-stage telemeter and pulse transponder NEC (MMAE) NEC (MMAE) NEC Abbreviations ATC: Aeroject Techflystems Co MPC: Mitsubishi Precision Co Ltd HONEYWELL: Honeywell Inc MSS: Mitsubishi Space Software Co Ltd IHI: Ishikawalime+ladma Heavy Industries Co Ltd NEC: NEC Corp JAE: Japan Aviation Electronics Industries Co Ltd NM: Nissan Motor Co Ltd MDC: McDonnell Douglas Corp RIC: Rockwell international Corp MELCO: Mitsubishi Electric Corp TRW: TRW Inc MHI: Mitsubishi Heavy Industries, Ltd TC: Thiokol Corp MMAE Motorola Military and Aerospace Electronics Inc

NOTE Names of overseas companies given in parentheses are firms from which NASDA's contractors get cooperation In the manufacture by met ,s of technical assistance, production licenses, or hardware supply SOURCE National Space Development Agency itor in the overall launch market. The President's aging to Shuttle-related commercial activities such policy encourages "free market competition as privately developed upper stages and various among the various systems and conceptswithin MPS-related activities. the U.S. private sector," yet the policy fails to recognize that the Government-owned Shuttle is one It is unclear what effect such an increase would of the main competitors for private sector ELV ac- have on the demand for Ariane launches. It is tivities. Therefore, "free market competition" be- possible that an increase in Shuttle prices would tween private ELV suppliers may be meaningless drive some customers to U.S. ELVs or to Ariane. if ELVs are noncompetitive vis-a-vis the Shuttle. Notwithstanding its support for ELVs, the poli- If, as has been suggested by some analysts, the cy stated that the price forShuttle flights "will Ariane price was chosen to be competitive with be maintained in accordance with the currently the Shuttle, an increase in Shuttle price might reestablished NASA pricing policies" through 1988. sult in a like increase in the price of an Ariane.

After this time, " ...it is the U.S. Government's In any case, since "full cost recovery" will not intent to establish a full cost recovery policy for be the Shuttle pricing policy until 1988, it is un- commercial and foreign STS flight operations." certain whether the Titan, Atlas-Centaur, and Del- If the price of a Shuttle launch were increased ta launch vehicles will be able to sustain launch before 1988 to reflect actual costs, including de- activity to see them through to this time. There- preciation, current ELVs might have a better fore, commercial U.S. ELVs may not be an im- chance of competing for a share of the commer- portant participant in the global competition for cial market. Such a price increase might be dam- launch services. 14 140 International Cooperation and Competition in Civilian Space Activities

FUTURE POLICY OPTIONS

The United States does not lack the "means" excess capacity existed, it would be sold "so as by which to engage in successful private orgov- to minimize the overall cost to the federal government-supported international competition in ernment of meeting its own needs in the long space transportation; what it lacks is a national run." The existence of foreign and private U.S. consensus concerning the "ends" of such com- vehicles would be important only insofar as they petition. The development of foreign space trans- affected the price at which this excess capacity portation systems has caused considerableand could be sold. OMB suggested that an appropri- often unwarrantedconcern in the United States. ate price would be "the highest price at which It is true that foreign competition will reduce the sufficient users will be available to utilize the ex- demand for Shuttle launches and for private ELVs; cess capacity." Limited competition from foreign whether this requires an immediate policy re- and private U.S. suppliers would allow NASA to sponse depends entirely on the constraints that charge a high price for launch services; aggressive the Government imposes on NASA and the in- competition would limit the price that NASA centives it offers the private sector. The follow- could charge and still sell all of its excess capacity. ing discussion analyzes several different policy options that have been proposed for the U.S. Under a policy of noncompetition, an increase space transportation system. in Government launch activities could significantly reduce commercial Shuttle operations. Forex- Option 1: ample, the decision to build a space station or Use the Shuttle primarily for launching to increase military activities in space might limit Government payloads the space available on the Shuttle for commercial launches. OMB suggested that the Shuttle Should the U.S. Government compete in the price should not "in itself lead to the demand for international launch service market? The United funding of additional capacity by the U.S. Gov- States could adopt the policy that the primary role ernment." This would indicate that, with a very of the Shuttle is to launch U.S. Governmentpay- limited capacity, NASA would discourage com- loads. Such a position might rest on the ideolog- mercial Shuttle use by charging higher prices. The ical conviction that, except in rare instances, the OMB position does not consider the possibility Government should not undertake activities that that an increased Shuttle flight rate might increase compete with the private sector. Alternatively, efficiency and reduce costs for all users. since commercial payloads launched on the Shut- tle involve some degree of Government subsidy, To summarize, a policy that restricted the Shut. such a policy might flow from a desire to reduce tle primarily to Government payloads would like- the cost to the taxpayer of operating the space ly have the following results: program. OMB has indicated its support for such eliminate NASA as a major supplier of com- a policy:88 mercial launch services; Generally speaking, when circumstances jus- reduce the likelihood that additional orbiters tify the funding and management of an opera- will be needed in this decade; tional system by the U.S. Government that is also increase the likelihood that the U.S. private sought by nongovernment entities, the 'J.S. Gov- sector could make an early and successful ernment should limit its role to making available entry into the launch service market; system capacities which exceed its own needs. potentially reduce the cost of operating the Under the OMB approach, NASA would not overall Shuttle program by requiring fewer regard itself as being in competition with foreign flights; and or domestic launch services. To the extent that increase the demand for, and potential commercial success of,the Ariane launch "Stockman Letter, op cit vehicle.

15u Ch. 5Space Transportation 141

Option 2: To summarize, current policy encouraging the Capture a high percentage of commercial Si 'Little to capture a high percentage of commer- launches with the Shuttle cial launches, willlikely have the 'ollowing results: This would appear to be the current U.S. pui- icy. Two reasons are often stated for a strong U.S. increase the demand for Shuttle services; competitive posture: to maintain its leadership create a need for additional orbiters in this role in the development and application of space decade; tec: .ology, and to ensure foreign technical and potentially increase the cost of operating the financial support for future U.S. space activities. overall Shuttle program," In addition, being regarded as first among the decrease the likelihood that the U.S. private Free World space powers carries important inter- sector could make an early and successful national political and psychological advantages. entry into the launch services market; and reduce the demand for, and the potential for A recent NASA Advisory Counci! report on t; commercial success of, the Ariane launch Shuttle found that:" vehicle. The overwhelming positive appeal of the Shut- tle lies in current NASA pitting policy, designed Option 3: to make the Shuttle competitive to currently Encourage private launch activities available expendable boosters. Commercial success of STS hinges on continuation of this When the National Aeronautics and Space Act margin. was written in 1958, it was assumed that the Gov- ernment would be the prime launch authority. !n accordance with the Council's report, a pol- The NAS Act stated:9' icy decision has been made to pursue international opportunities aggressively. This The Congress further declares that such (aer- decision entails a commitment to continue the onautical and space) activities shall be the re- current practice of subsidizing the Shuttle's com- sponsibility of, and shall be iirected by, a civil- mercial p,:yloads, as well as a requirement that ian agency (NASA) exercising control over aer- greater attention be paid to Shuttle marketing. onautical and space activities sponsored by the The NASA Advisory Council report stated: United States." The NAS Act refers to the private sector as po- Ti are was general agreement in the Task tential NASA contractors but does not mention Force that an intensive high level marketing effort on behalf of Shuttle utilization isarranted. their independent participation in space activi- In this context, marketing means to dt 'elop and ties.92 It may be assumed from the historic U.S. imp( ^ .nt a broad scale and long range plan dependence on a private sector economy that tc nvolve increasing numbers of users in the ex- expectations of private launch services were im- pith atior. of the STS capabilities. It thus involves plicit in U.S. space policy, subject only to satis- market analysis, planning, advertising, customer fying the applicable health and safety regulations. service, financing, and insurance, to name a few More recently, statements of national space pol- areas. It must be a high level, strongly led effort, icy by both the Carter and Reagan Administra- with the active participation of NASA top man- tions have highlighted the Importance of private agement to the Administrator level. sector space activities. For example, President The NASA Advisory Council report identified Reagan's Statement on Space Policy of July 4, "the emergence of increased competition" as 1982, declared: one of the primary reasons for pursuing a bold marketing strategy. 'OSome analusts believe that an increase in Shuttle flhts will, through a corTe-4nation of learning curve _fficiencies and economies o; scale, actually reduce the cost of operating the Shuttle "National Aeronautics and Space Act of 1958, sec 102(b), 42 "'"Study of Effective Shuttle Utilization," report of the NASA Advi- U S C 2451 sory Council Task Force, Nov 17, 1983 "Ibid , sec 203(5) 151 142 International Cooperation and Competition In Civilian Space Activities

The U.S. Government will provide a climate At present, the United States is attempting to conducive to expand private sector investment pursue policies that simultaneously seek to en- and involvement in space activities. .. courage the entry of the private sector into the Can the U.S. private sector, encouraged by the launch services market and to maximize the use U.S. Government, be competitive with foreign, of the Shuttle for commercial launches. If the de- government-supported launch systems? This is a mand for launch services were to increase dramat- point on which there is significant disagreement ically, it might be possible to maintain both posi- both in the U.S. Congress and in the private sections; since this is unlikely in this decade, the tor. In the U.S. air transportation industry, how- United States must choose which of these two ever, private U.S. firms have successfully com- courses it intends to follow. peted with foreign government-owned, often To summarize, a policy that encouraged the subsidized, firms. Private U.S. firms, using cur- participation of the private sector with expenda- rent ELV technology, could probably compete suc- ble launch vehicles would likely have the follow- cessfully against foreign launch vehicles suchas ing results: the Ariane. encourage the formation of an internation- It is uncertain whether U.S. firms will be able ally competitive U.S. space transportation in- to compete against both foreign ELVs and the dustry; U.S. Government's Shuttle. A decision to support reduce NASA's role in space transportation private launch activities aggressively would most and the demand for Shuttle launches; certainly require either limiting the number of reduce the likelihood that additional orbiters commercial payloads carried on the Shuttle or rais- will be needed in this decade; ing the Shuttle Input price. On this subject, the potentially reduce the cost of operating the NASA Advisory Council report stated:93 Shuttle program; and The potential for the successful privatization increase the demand for, and the potential of ELVs was considered fairly low by the Task commercial success of, the Ariane launch Force. It seems probable that following divesti- vehicle. ture by NASA of an ELV to an entrepreneurial company, that company would exert every ef- Option 4: fort to cause the Shuttle pricing to be revised up- Use the Shuttle to meet all current and ward in order to make the ELV more competi- future U.S. space objectives tive. This would run counter to the Shuttle pricing policy and its objectives. The Shuttle is not "just another launch vehi- It is possible to argue by analogy to the postal cle." It is a unique tool for conducting manned see vice that the Government and the private sec- activities in space that until r ,w were not possi- tor might coexist as launch service providers. The ble. It is also a technology in which this Nation m ijority of the mail in the United States, by law, has invested over $15 billion. The NASA Advi- can be handled only by the U.S. Postal Service; sory Council recently expressed their concern however, private firms are allowed to providenu- that the U.S. commitment to the Shuttle might be wavering:94 merous specialty services. If NASA continues to pursue commercial payloads aggressively, itis We sensed a great pressure within the govern- conceivable that some private sector firms might ment to find some way to make the STS "pay be able to market expendable launch vehicles to its way"... We are concerned that preoccupa- customers who needed unique services such as tion with this thrust may distort our national rapid launches or pa,load delivery to non-Shuttle priorities in space. In our view the Shuttle is a orbits. It is doubtful, ; iowever, that the near-term great national asset in its own right, and is essen- demand for such "specialty services" will be suf- tial to pursuit of civil and military objectives in space. fit. ,2nt to sustain even a single private firm.

""Study of Effective Shuttle Utilization," op cit. 94Ibld

152 Ch. 5Space Transportation 143

It is possible to conceive of a space transpor- A policy that sought to maximize Shuttle use tation policy built around the expansion of space would have to overcome a number of important activities through the Shuttle. Having recently domestic and international barriers. Domestically, made the decision to encourage Shuttle-related there is considerable support for a policy to en- commercial activities, to build a space station, courage a private ELV industry. There are some and to use the Shuttle for military space activi- compelling arguments in support of this position. ties, this Nation has already made a substantial There is also substantial national interest in re- commitment to Shuttle operations. It is reason- ducing the Federal deficit and, therefore, Gov- able to argue, as NASA has often done, that com- ernment expenditure; this includes expenditures mercial space operation should be coordinated for the space program. Though NASA argues that so as to contribute to overall national space goals, revenue from commerical flights will eventually including in this case the success of the Shuttle reduce the cost of operating the Shuttle, critics program. If current Shuttle-use policies were charge that, for the foreseeable future, such activ- combined with a more vigorous attempt to enlist ities only add to the cost of the space program. commercial communication satellites (perhaps at Even though the Shuttle is technologically su- the expense of developing a reusable orbital perior to the Ariane and Other potential foreign transfer vehicle for payload delivery to geosta- competitors, as long as these competitors can tionaN orbit) and an increased level of effort (and launch payloads at a price that bears a reason- of expenditure) for scientific and new commer- able relationship to the cost, they will continue cial payloads such as materials processing, Shuttle to do so. For this reason, it is unlikely that for- utilization might remain the most important single eign equipment manufacturers will "Shuttle-op- element in future space policy decisions. timize" future satellites and other space cargo; Under such a policy NASA would not be lim- likewise, U.S. equipment manufacturers are united to flying Government payloads, since it likely to build "Shuttle-only" equipment as long would be desirable to direct the energies of the as the space transportation market includes both private sector into Si,tittle-related activities. How- the Shuttle and ELVs. ever, capturing a large number of communica- To summarize, a policy that encouraged the tion satellite launches with the Shuttle would not maximum use of the Shuttle for all types of mis- be the only purpose of such a policy; it would sions would likely have the following results: also require a commitment to NASA programs and research activities that would create new increase the likelihood that the Shuttle will sources of demand for Shuttle services. Such a play a major role in the successful exploita- policy would rest on the belief that, if the bene- tion of outer space; fits of "space inrlustrialization" are to be realized, create a need for additional orbiters in this the Shuttle, is indispensable. decade; decrease the likelihood that the U.S. private Competing with foreign launch vehicles would sector could make a successful entry into the not be the primary reason for str.ii a policy. Cap- launch service market; turing a large number of commercial payloads greatly increase the cost of operating the might be useful if it created pressure to "Shuttle- Shuttle program (as well as other NASA pro- optimize" satellites and other cargo. Conceiv- grams); and ably, a strong movement in this direction could, reduce the demand for, and the potential as NASA had hoped in the past, render ELVs ob- commercial success of, the Ariane launch solete. vehicle.

1" i Chapter 6 SATELLITE COMMUNICATIONS

Contents

Page

Introduction 147 Space Policy and International Telecommunications Policy 147 The International Satellite Communications Industry 147 International Cooperation in Satellite Communications 148 Policy Issues 149 The Demand for International Satellite Communications 150 The International Satellite Communications Service Industry 153 The Satellite Communications Equipment Industry 161 Cooperation and Competition Issues in Internationl Satellite Communications 168 International Context of Satellite Communications 168 U.S. Participation in International Organizations Concerned With Telecommunications 169 Space WARC and the Issue of the Allotment of the Geostationary Orbit 173 Assistance to Developing Countries 177 International Trade in Telecommunications Services 180 International Trade in Satellite Communications Equipment 188 The Advanced Communications Technologies Satellite Program 193 Policy Options 198 The Future of INTELSAT 198 The Future of COMSAT 200 Satellites v. Fiber Optic Cables 201 Access of U.S. Carnets to Foreign Markets 203 International Trade in Satellite Communications Equipment 205 Research and Development Subsidies 206 Participation in the International Telecommunication Union 207 Assistance to Less Developed Countries 208 Synthesis 210 Appendix 6A.Additional Analysis of the Satellite Communications Service Industry 210 Demand for International Satellite Communications: Factors Influencing Its Growth and Scenarios for the 1990s 210 The Regulatory Regime In International Saienite Contitianications 220 Appendix 6B: The Communications Satellite Equipment Market 226 Introduction 126 Satellite Markets 226 Satellite Suppliers 237 International Competitive Factors in the World Satellite Market 238 Earth Station Equipment Suppliers 238 Appendix 6C: INTELSAT and INMARSAT Members: Signatories and Investment Shares 244 Appendix 6D: Article XIV and Other Excerpts From the INTELSATAgreement Relating to Space Segment "Facilities Separate From INTELSAT" 247 List of Tables Table No. Pale 6-1. U.S. International Telephone and Telegraph Service Revenues,1972-85 151 6-2. U.S. International Common Carrier Telecommunications Traffic by World Region, 1982 151 6-3. Scenarios for Satellite Communications Demand In the 1990s 153 6-4. U.S. Telecommunications Firms'Providing Inl.emational Satellite ,. Communications Services. ._,-- , 156 6-5. Members of INTELSAT: The'Maj0104on-U.S. Telecommunications Providersof International Satellite Comm Services , 159 6-6. U.S. Marker. Share of Com_ _Fr lite Prime C.ontracts ,. 162 6-7. Prime Contractors for COmmeacialtommunkatiOris'Salellftes 164 6-8. Earth Station Market Shares, by t_, SuPPbot, r,the Period 1965-82... 165 6-9. U.S. International Telephone Equipment Trade, 197805 , t89 6A-1. U.S.-Europe Telecommunications-1 , 1985-95 .211 6A-2. Representative Transatlantic Facales Plans for It:S.-Europe Teke:001roOlcadOok 1985-95 _ , _-2,, ,_. ,.f ; .212 - 6A- 3. Satellite Share or International, -commit:Ikeda* Capacity CE.Pi 044*.ilan Projections , ,,- . -.-- , .213 613-1. International Comrnunicatioef .-. . .i '.. 't 228 613-2. Estimated New and Scheduled for Launch 2,36 613-3. iNTELSAT VI: Subconttacti ,,,;.-.;.- 237 ' 68-4. . , , . dellite Earth StatiOn= ...... ,,...,.....;....,....,..-.,,,,,,2513.. 68-5. INTELSAT Earth 9444 6B-6. Major Worldwide 6B-7. Major Satellite Earth -,.:, . = .' ,:.241 613-8. NEC Satellite Earth Stettin ,.

List of Figures Figure No. 6-1. Texas Instruments' WorldWit 6-2. Texas Instruments', 6-3. Radio Signal Atlanta** 6A-1. Cost of Satellite vs. 68-1. Estimated Worldwide, 1965-85...... 68-2. Estimated Worldwide 1985.89 68-3. Locations of Commaydai as of June 25, 198*,. 68-4. Locations of Planned for as of junk- 68-5. Typical Ground Statitirt 68-6. INTELSAT Satellite Earth Chapter 6 SATELLITE COMMUNICATIONS

I ' 4TRODUCTION Space Policy and International The International Satellite Telecommunications Policy Communications Industry Satellite communications is the only substan- These shifts in policy emphasis are taking place tial commercial exploitation of space. As com- at a time when satellites provide the dominant munication satellites came into commercial use, transmission technology in international telecom - many people concerned with international sat- mu nications. Approximately two-thirds of trans- ellite communications policy assumed that most oceanic international telecommunications now of the important issues in the satellite arena could pass through satellites; the remainder is carried be analyzed apart from the regulatory issues of via undersea cables.' The information transmitted the wider telecommunications industry. The pol- includes not only telephone conversations, telex icy they made, embodied initially in the Commu- messages, and television programs, but increas- nications Satellite Act of 1962 and the INTELSAT ing amounts of computer-processed data. In the Agreement of 1973, evolved with its own mo- future, videoconferencing may become a large mentum. its own objectives, and its own "space" service. Multinational corporations now send constituencies. The Federal Communications large quantities of data around the world within Commission (FCC) then molded the regulatory private line networks. In the general international framework to accommodate the policy frame- economy, the exchange of goods and services work. among nations is paralleled by streams of related Recently, the regulatory framework that the information and electronic financial transfers. FCC put in place to reconcile U.S. international More and more, the same firms that carry data satellite communications policy with commercial from one point to another also process the data. reality has come under new challenge in a rum- This merger of two formerly separate activities ber of different contexts and must adapt in fun- telecommunications and data processingal- damental ways. Technological, economical, and ready has led to substantial regulatory changes regulatory changes have resulted in a situation in both the domestic and international telecom- where almost no aspect of international satellite munications of the United States, a process that communications can any longer be analyzed is beginning to occur in several other countries apart from the international telecommunication.; as well. The 1984 breakup of AT&T in an antitrust industryterrestrial and satelliteas a whole. At consent decree is the most spectacular, but only the same time, most of the major issues in inter- one, result of the pressure that technical changes national satellite communications have also be- are placing on regulatory structures.2 come issues of telecommunications regulation rather than space policy. Within the United States, several of the largest U.S. corporations now offer both domestic and International competition in satellite commu- international satellite communications services. nications equipment has also taken on a new di- AT&T, Western Union, IBM, RCA, ITT, and GTE mension now that the U.S. market has opened up because of domestic deregulation. Foreign suppliers, who had hitherto largely sold in pro- 'Departments of State and Commerce, "A White Paper on New tected markets or according to the allocation for- International Satellite Systems," February 1985, p 7 mulas of international agencies, are free to sell 'U.S. Congress, Office of Technology Assessment, Effects of In- in the United States, but U.S. suppliers are seri- formation Technology on Financial Services Systems, OTA-CIT-202 (Washington, DC U S Government Printing Office, September ously restricted in Europe and Japan. 1984), ch 6

156 147 148 International Cooperation and Competition in Civilian Space Activities

are important examples.* Each of the three largest the continued growth of demand for telecommu- communications satellite makersHughes, Ford, nications services, from the new information and and RCAalso offers, or is about to offer, satel- telecommunications technolog;.c,s, and from the lite communications services. In addition to these new competitors in the U.S. market.5 They fear firms, which offer services for sale, a number of that unilateral moves by the United States will large U.S. firms,e.g., Citicorp and General cause changes in the current international regu- Electric, have sizable private communications latory regime that will make them change valued networks. modes of operation and, in the case of INTELSAT, Abroad, the picture is much different: except threaten its economic viability.6 At the same time, in a few countnes, telecommunicatioi-o is a gov- some developing countries are demanding changes ernment monopoly (the so-called "PTT" or post, in the ways in which the international commu- telegraph, and telephone entity).' Internationally, nity assigns the radio frequencies and geosyn- the International Telecommunications Satellite chronous orbital positions. Organization (INTELSAT), a consortium with more than 100 member countries, is the monop- International Cooperation in oly provider of intercontinental satellite facilities.4 Satellite Communications INTELSAT was established under U.S. leadership pursuant to the Communications Satellite Act of The United States cooperates extensively in in- 1962, which also authorized the charter of the ternational satellite communications and, in ad- Communications Satellite Corp. (COMSAT) as a dition to its membership in INTELSAT, partici- private company. COMSAT is a carriers' carrier pates in several other international organizations (all U.S. carriers sending international satellite concerned with it. U.S. concerns in these coop- communications via the INTELSAT system must erative processes are not only related to the wel- pay COMSAT's tariff) and represents the United fare of U.S. producers and consumers of telecom- States in the INTELSAT Board of Governors. It munications services and equipment. They also currently has an investment share in INTELSAT are concerned with linkages to wider foreign pol- of 23 percent. Other countries are typicallyrep- icy concernse.g., relations with other industri- resented on the INTELSAT Board of Governors al countries and with the developing world, glo- by their PTTs. bal national security communications capabilities, the effectiveness of international institutions, and Both INTELSAT and the PTTs in the industrial the general international trading system. countries are beginning to feel pressures for increased openness to competitionpressures from

Several of these firms use their own satellite systems for domestic satellite services, the others lease transponders from satellite providers For reasons discussed below, virtually all international satellite communications are sent via leased transponders 'Eli M Noam, "Telecommunications Policy on the Two Sides of 'The divestiture decisions contained iii the AT&T consent decree the Atlantic Divergence and Outlook," Columbia University, Re- are, of course, lust one of the possible ways in which industry struc- search Program in Telecommunications and Information Policy, tures could be reformed to take account of the new technological New York, Aug 15, 1984 See also testimony and statements in realities Other countnes, notably the United Kingdom, Japan, and "International Satellite Issues" U S. Congress, House Committee France, responding to these same technological realities by alter- on Energy and Commerce, Subcommittee on Telecommunications, ing industry structures in other ways Consumer Protection, and Finance, Hearings, June 13, July 25 and 'Some traffic is now or will shortly be carried on regional sys- 26, 1984, Washington, DC, 1985. tems in the Western Hemisphere, Southeast Asia, Europe, and the 6We use the term "international regulatory regime" (or "inter- Middle East, on INTERSPUTNIK, a Communist bloc satellite sys- national communications regime") broadly to include all govern- tem, and on INMARSAT, an international system for marine com- mental and intergovernmental actions affecting the operations of munications The Western Hemisphere regional system is often the international communications carriers. These include treaties omitted from the list of egional systems, perhaps because it is made and other formal and informal intergovernmental agreements in up of unrelated private carriers rather than operated by an inter - the area of telecommunications, other elements of international gc organization, and is usually referred was "transbord- law affecting telecommunications, the actions of international orga- er services Currently, U 5 domestic satellite operators are au- nizations such as the ITU or INTELSAT, and the actions of national thorized to carry international traffic to Canada, Mexico, Bermuda, governments that affect the international telecommunications in- and many locations in the Caribbean dustry Ch. 6Satellite Communications 149

Policy Issues latedU.S. domestic telecommunications industry? These pressures for change pose issues for U.S. international communications policy that involve Access of U.S. Carriers to Foreign both international competition and international Telecommunications Service Markets cooperation. Important current policy issues of relevance to international satellite communica- Now that several dozen large U.S. corporations tions are mentioned below. are active in U.S. domestic satellite communications, as basic, enhanced, or private communi- Competition for INTELSAT cations providers, how can the United States endeavor to assist them in gaining access to foreign Should the United States attempt to foster great- telecommunications service markets (principally er competition in the provision of international in the industrial countries)? Should the United satellite communications facilities? If so, would States adopt a demanding posture at the risk of the United States serve this objective, and wider straining relationships with our principal trading U.S. foreign policy concerns, by allowing private partners? U.S. firms to construct satellite facilities for use in whichever country markets they can gain en- International Trade in Satellite try, in possible competition with INTELSAT? Communications Equipment Competition for COMSAT What additional action should the Government take to try to assure fair international competi- Should other U.S. telecommunications carriers tion in both space- and ground-segment equip- be allowed access to INTELSAT on the s,..- basis ment? Can foreign governments be persuaded to as COMSAT? If COMSAT continues as the sole end their PTTs' discriminatory procurement pol- U.S. investor in INTELSAT and as the sole U.S. icies by agreeing to apply the GATT agreement "wholesaler" of international satellite commu- on government procurement (or a similar prin- nications, should COMSAT be required to divest ciple) to PTT procurement of telecommunications itself of its other activities or could they be car- equipment? Would reciprocity Iegillation help? ried out in separate subsidiaries, as at present, How disadvantaged are U.S. satellite communi- with accounting controls to guard against its mo- cations equipment makers likely to be in the nopoly activities cross-subsidizing its competitive availability of and interest rates charged for offi- ones? cial export finance for sales to !ess developed countries? Would a new international agreement Satellites v. Cables: Facilities Regulation help?

How will the international facilities regulation NASA Satellite R&D of the FCC affect the future of satellite communications? The future distribution of traffic in in How much should the Government spend on ternational communications between satellites research and development to help keep the U.S. and undersea cables is partly dependent on the satellite manufacturing industry technologically cost and performance characteristics of the two vital and ahead of potential foreign competitors? technologies, but it also depends on whether the In particular, is the NASA Advanced Communi- Government regulates investment in new satel- cations Technologies Satellite (ACTS) program a lite and cable facilities and whether it mandates desirable program that the private sector is not the shares of the traffic that U.S. service carriers financially capable of mounting? Or should the must send over the two media. Should the cur- private sector be relied on to do its own R&D? rent regulatory regime be maintained or can com- Should the U.S. Government match foreign ci- petition be relied on to determine invcstn tent in vilian R&D programs in satellite communications long-distance international facilities in the same or would the ACTS program actually engender manner that l does in the substantially deregu- greater foreign efforts to surmount U.S. domi-

15 6 150 International Cooperation and Competition In Civilian Space Activities nance in communications satellites? Finally, how 1990s, will be one of the fundamental variables much success is a government-conducted R&D affecting issues of importance to the United States program likely to have in developing marketable in international space and telecommunications technology? policy.° The prospect of high demand for satellite communications over the North Atlantic Space WARC would make it easier for the United States and What should be the U.S. approach to cooper- other governments to allow the entry of private ation with other countries in international tele- satellite communications firms in competition communications organizations? In particular, with INTELSAT. High demand for satellite com- how should the United States approach the In- munications services would also result in higher ternational Telecommunication Union's (ITU)up- derived demand for space transportation services coming World Administrative Radio Conferences and for satellite equipment and would affect in- on space services ("Space WARC"), so as to pro- ternational competition in both areas. One effect tect U.S. access to the geosynchronous orbit and of high demand would not be favorable, how- the radio frequency spectrum? Should temporary ever. High demand would tend to exacerbate any or permanent withdrawal from ITU (and other situation of crowding in the geostationary orbit.9 international organizations concerned with satellite communications, such as the U.N. Com- Growth of International mittee on the Peaceful Uses of Outer Space Telecommunications as a Whole (COPUOS) be considered as active contingencies U.S. international communications has been in the wake of U.S. withdrawal from the U.N. Ed- growing rapidly since high-quality voice service ucational, Scientific, and Cultural Organization was inaugurated in transatlantic service via under- (UNESCO)? sea cable in 1956. U.S. carriers' international real revenues grew at an annual average rate of ap- Aid to Deveioping Countries proximately 13 percent during the 1972-84 period Should Congress attempt to direct more U.S. (tabl 6-1). For 1985, the Department of Com- development-assistance resources into telecom- merce projects a growth rate of 14 percent. munications? Should the United States encourage multilateral assistance to developing countries through the World Bank or specialized interna- 'Care should be taken with the concept of "demand for international satellite communications," since satellite communications tional telecommunications institutions, such as and terrestnal communications are extremely close substitutes in INTELSAT (cross subsidies') and the ITU (devel- telephony and most other international volume applications. It opment assistance), or are bilateral programs, should probably be thought of as a demand derived from total international telecommunications demand that is determined by the such as those that might be carried out by the institutional and regulatory structures of both cables and satellites U.S. Agency forInternational Development and also by the relatively small differences in the characteristics (AID), more effective in achieving U.S. objectives? of the services provided. The general conclusion that satellite and cable transmission modes are close substitutes is not changed by Can mixed credit programs for buyers in devel- the existence of certain uses, such as point-to-point televisionor oping countries assist U.S. telecommunications certain high-speed interactive data communications, where the two exports? modes are not close substitutes. At present these usesare relatively low-volume uses in nternational satellite communications. 'Crowding (or congestion) in the geostationary orbit is said to The Demand for International occur when preferred or substitutable orbital slots in a desired frequency band are not available to an applicant. This may be be- Satellite Communications cause they are occupied by another satellite or reserved for future use by another user. Thus, the applicant experiences the economic The Importance of the Demand Factor costs of changing desired services. Crowding can be local or can occur in an entire region of the geostationary orbit, such as the The demand for satellite communications, its Western Hemisphere. Certain observers escnew the termas misleading, since no physical crowding occurs, and the spacing size and rate of growth in this decade and in the is fixed by regulatory decision. At 2 deg. orbital spacing, for instance, satellites would be approximately 500 miles apart. The volume of 'Whether significant cross subsidies are created by INTELSAT pnc- two-way communications that can be handled in a given slot also ing is in dispute (see below) depends on the technology in use by the satellite.

153 Ch. 6-Satellite Communications 151

Table 6.1. -U.S. International Telephone and the period 1985-95. They foresee demand for ca- Telegraph Service Revenues, 1972-85 pacity of 82,000 voice-equivalent circuits in 1995." International Growth revenues rate' Table 6-2 shows the distribution of two-way Year (1972$ millions)(percent) telephone and telex services between the United 1972 663 States and various world regions in 1982. In that 1977 1,339 15.1 (1972-77) year, 86 percent of telephone and 80 percent of 1978..... 1,607 5.7 telex minutes were transmitted along high-vol- 1979 1,906 18.6 1980 2,082 9.2 ume corridors to Europe, North Asia, and the 1981 2,250 8.1 Americas.12 Transatlantic traffic to Europe alone 1982 2,325 3.3 accounted for about 50 percent of total minutes. 1983 2,500 7.5 1984e 2,800 12.0 Average twelve-year period 12.8 (1972-84) Demand Forecasts Subject 1985p 3,200 14.3 to Substantial Uncertainty KEY e - estimated, p - projected 'Average compoundgrowth ratecalculated on the end points for Indicated pen- Forecasts of demand a decade ahead are, of ods of over 1 year course, subject to wide forecast error, because SOURCE U S Department of Commerce, U S Industrial Out.vok 1985, pp 31.7, 31.9 the assumptions regarding price, economic growth, technology, market development, and consumer U.S. carriers expect rapid growth of interna- response on which they are implicitly or expli- tional communications to continue. In fcracasts citly based are themselves subject to great un- prepared for a working group meeting in connec- certainty. tion with the FCC's facilities planning process, the One assumption behind the U.S. carriers' fore- U.S. international service carriers"' projected the cast stands out as particularly uncertain-their demand for U.S.-Europe common carrier communications (including new services) to increase "Tins growth rate refers to the forecast of November 1984. Table at an average annual rate of 16.3 percent during 6A-1 in app. 6A presents these November 1984 overall forecasts. It also presents 1983 forecasts (which were significantly higher) by '01n 1983, the major U S. companies involved in the planning carrier and by major destination country. process were AT&T, RCA, Western Union, GTE, MCI, and ITT and "Not including Canada and Mexico. These percentages are taken COMSAT from table 6-2.

Table 6.2. -U.S. International Common Carrier Telecommunications Traffic by World Region (Voice and Telex), 1982'

Voice Telex (million (million minutes) (percent) minutes) (percent)

Europe ...... 1,003 49.7 152 45.2 North Asiab 209 10.3 59 17.6 Americasc 525 26.0 58 17.2

Subtotal ...... 1,737 86.0 269 80.0 Near East 148 7.4 19 5.7 Other Asia/Pacificd ...... 87 4.3 33 9.9 Africa 48 2.3 14 4.3 Total 2,019 100.0 336 100.0 lInciudes only telephone and telex traffic in additlors to telex, ,vhIch was reported by region and by minutes and which accounted for 70 percent of.thelr revenues, the (former) intematiovai record carders derived 30 percent of their revenues from telegres.h rnessojes and private lines Napan, Republic of Korea, China,Hong Kong,Taiwan, Philippines. cExciudIng canoe, Mexico, and U S territories Canada and Mexico ',snot Included In the source FCC data on International telephone carriers Mexico is included in the data on telex, but for consistency, we have excluded It from this analysis dExcluding Hawaii and Guam SOURCE Derived from Federal Communications Commission, Statistics of Common carriers, year ended Dec 31, 1962, published In 1961

1bo 38-797 0 - 85 - 6i QL 3 152 International Cooperation and Competition in Civilian Space Activities

assumption that new services, especially video- the strength of industry-structure and other conferencing, gill not grow to be a large fraction incentives for carriers to invest in fiber op- of total demand." A study prepared for NASA tic undersea cables and use them in prefer- in 1980 comes to a different conclusion as do re- ence to satellites; and cent statements by other observers. (See app. 6A the actual growth of undersea cable capac- of this chapter for further discussion.) If a I- rge ity and the presence or absence of regula- demand for videconferencing should materialize, tory restrictions on its use. perhaps stimulated by new satellite and cable competitors, demand for international commu- Because all of the.:a factors are uncertain, we nications could grow even more rapidly than the organize the discussion of the demand for satel- carriers' forecast. lite communications in the 1990s in terms of three plausible scenarios: The Satellite Communications I: Rapid growth throughout the 1990s. Component II: Slow growth throughout the 1990s. Will international satellite communications III: A no-growth plateau in the 1990s. share in this rapid growth? Will it grow as rap- Essentially the three scenarios represent dif- idly as international telecommunicationsas a ferent outcomes of the modal competition between whole? The growth prospects for sa ellite com- fiber optic undersea cables and communication munications are even more uncertain than those satellites for international communications in high of the total industry. It is even possible that the volume uses. If users and carriers have significant growth of international satellite communications preferences in favor of fiber optic transmission, could level out in the 1990s at the same timeas and if 'hese preferences are not blunted by reg- total international telecommunications was con- ulatory decisions to limit the construction or use tinuing to expand rapidly. This could occur if of undersea cables, the employment of satellites undersea cables, using advanced fiber optic tech- on major trunk routes could decline significantly nology, are used relatively more in the future than in the 1990s, and total satellite communications satellites. use could level off. This would be more likely to Although international satellite communica- occur if international telecommunications as a tions can be expected to continue to grow rap- whole did not grow as rapidly as the videocon- idly in the 1980s," the prospects for the 1990s ferencing optimists expect. This is the no-growth are much less certain. The share of satellites in scenario for satellite communications in the the 1990s will depend on: 1990s. the growth in the total demand for interna- On the other hand, less preference for cables tional telecommunications services; or more stringent regulation requiring carriers to the price advantage/market preference, if use satellites could keep satellite communications any, of fiber optic over satellite transmission carrying roughly the same 50 percent share of the for high-volume applications;15 growing transatlantic market as it does now. This would be the rapid growth scenario. ' Wideoconferencing and audioconferencing (no video element) together comprise teleconferencing. Full-motion videoconferenc- A slow growth scenario represents a trend mid- ing requires broadband telecommunications capability, but slow- way between the other two scenarios. scan videoconferencing (as well as audioconferencing) can be sent over standard telephone circuits. Table 6-3 lists the key variables that are uncer- "At least through 1988, when the transatlantic TAT-8 and trans- tain and the assumptions about them that would pacific Transpac 3 fiber optic cables are scheduled to be operational. ' sHigh-volume applications refers to addressable communications, affect demand according to the three scenarios. mostly telephone conversations, that are transmitted point-to-point, with international transit along major cable or satellite trunk routes The growth of demand for services for which satellites are particu- a relatively unimportant one in international satellite communica- larly suitedpoint-to-multpoint receive-only television transmis- tions than the growth of high-volume point-to-point applications sion and low-density communicationswill also be a factor, but beta. Se of the low total communications volume of the former.

161 Ch. 6Satellite Communications 153

Table 6-3.Scenarios for Satellite Communications Demand in the 1990s

Scenario I Scenario II Scenario III Key uncertain variables Rapid Slow No growth growth growth plateau Cost/price advantage/consumer preference for fiber optic SMALL MODERATE LARGE transmission for high volume uses OR OR OR Industrystructure Incentives to adoption of fiber-optic cable LOW MODERATE HIGH transmission OR OR AND Growth in actual cable capacity or in capacity available SLOW-TOMODERATE MODERATE RAPID under loading restrictions Note These scenarios and assumptions are discussed In app M of this chapter This chart emphasizes the factors affecting the share of satellite communications Slow growth in total international telecommunications demand would reduce the growth of satellite communications in all scenarios and make the growth plateau more likely

The scenarios and the assumptions behind them Since the pace of change is greatest in U.S. tele- are discussed in greater detail in appendix6A of communications markets, conflicts with other this chapter. countries in international satellite communications policy have been growing out of the con- The International Satellite flicting desires and actions of U.S. and foreign Communications Service Industry telecommunications producers and consumers both in the United States and other countries A number of important issues in U.S. interna- as they respond to technology-driven changes in tional space and satellite communications poli- telecommunications markets. These market de- cy are embedded in the structure of the world velopments, rather than the initiatives of the U.S. telecommunications service industry. (Structure or foreign governments, are the primary impetus here refers to the prevailing modes of operation, behind current policy discussions in satellite com- ownership, and regulation in the industry.) The munications.1 8 world industry and its structure are increasingly affected by the same technological develop- The Emerging Industry Structure in mentsthe merging of the data processing and U.S. International Communications telecommunications industries based on inexpen- Even though the United States has deregulated sive computing power, digital communications, much of its domestic telecommunications, the satellite networks, and other technical innova- old regulatory structures affecting U.S. interna- tionsthat contributed to the break-up of the reg- tional communications remain largely in place.'9 ulated-monopoly structure in U.S. long-distance While the FCC has relaxed the distinctions be- communications.16 These developments are now tween international and domestic and voice and affecting the telecommunications economies of record carriers," this as yet has had little impact a number of other industrial countries and are beginning to force structural change to occur presented at the Research Workshop on Economics of Telecor-- munications, Information and Media Activities in Industrial Coun- there as well.' 7 tries, National Science Foundation, Apr. 30-May 2, 1984, Wash- ington, DC (forthcoming, North-Holland Publishing Co., 1985). Also "'See Richard I. Kirkland, "Ma Blue. IBM's Move Into Commu- see "America calling," Economist, Nov. 24, 1984, pp. 97.98. nications," Fortune, vol 110, Oct 15, 1984, pp 52-54,58,62 Also '°For a general treatment of the problem of in emotional con see Dante B Fascell and Virginia M. Schlundt, "United States In- flicts of jurisdiction, see George Shultz, "Trade, In erdependence, ternational Communications and Information Policy A Crisis in the and Conflicts of jurisdiction," Current Policy No. 573, May 5, 1984. Making?" Northwestern Journal of International Law and Business, 19See app. 6A for further discussion of how the international reg- vol. 5, fall 1983, pp 486.509. ulatory regime has changed in recent years. "For a discussion of technological change as the leading edge ""Record" communicationstelegraph, telex, and dataare of change in telecommunications regulation in the United States conventionally distinguished from "voice"telephoneand from and other countries, see unpublished paper by Alan Baughcum, television transmissions.

I. 64.,.j 154 International Cooperation and Competition in Civilian Space Activities

on which firms carry what traffic and on how they The success of Western Union Telegraph do business internationally. AT&T Communica- Co.23 in penetrating the international record tions still carries almost all U.S. international market and the moderate success of MCI and telephone communications; the international rec- GTE in penetrating the international tele- ord carriers, formerly restricted to record com- phone market. munications, still handle most of the record traf- The emergence of a Western Hemisphere re- fic; INTELSAT and COMSAT still have a virtual gional system based on the satellites owned monopoly on U.S. intercontinental space-seg- individually by U.S. private domestic satel- ment communications; and the FCC still oversees lite providers and by Telesat Canada. a process in which approved carrier consortia Finally, the plans announced in 1984 by: 1) Dlan facilities years ahead. Cable & Wireless, Ltd., a British firm, and its Nevertheless, pressed by regulatory and tech- U.S. partners;24 and 2) Submarine Lightwave Cable Co. (SLC),25 a U.S. entrepreneurial nological changes, the large firms, such as AT&T, IBM, GTE, ITT, RCA, Western Union, and COMSAT, group, to install new very high-capacity, transatlantic fiber optic cables.26 have all started tc penetrate each other's former preserves (or are contemplating it). New entrants Because data processing and telecommunica- have also been able to enter the international mar- tions firms can no longer easily be separated into kets for both basic and enhanced telecommuni- different industries, and telecommunications pro- cations services.21 viders themselves are no longer segmented into Several notable events have recently set the the traditional rigid regulatory categories, the in- stage for the large telecommunications firms to start moving toward an undifferentiated interna- with INTELSAT satellites (FCC, "Second Report and Order in the tional industry on the U.S. side: Matte of Proposed Modification of the Commission's Authorized User Policy Concerning Access to the International Satellite Serv- The Orion Satellite Corp., RCA, and other ices of the Communications Satellite Corporation," released Jan. 11, 1985). applications to the FCC in 1983, 1984, and "Western Union Telegraph Co., formerly the de facto monop- 1985 to construct private transatlantic satel- o:y domestic record carrier, should not be confused with Western lite facilities to be owned by individual firms. Union International, a separate firm, one of the traditional record carriers and now a wholll owned subsidiary of MCI Corp. The FCC decisions to allow COMSAT to pro- "Application of Tel-Opt k ltd. (Cable & Wireless' U.S. partner) vide retail service and other carriers to infor a license to land and operate in the United States a submarine dependently own Earth stations transmitting cable extending between the United States and the United King- dom, FCC File No. 5-C-L-84-002, Sept. 28, 1984. to and receiving from INTELSAT satellites.22 "Application of Submarine Lightwave Cable Co., FCC File No. SCL-85-001, Oct. 16, 1984. Submarine Lightwave's FCC filing says "In early 1985, the FCC was moving toward making entry even that the cable would provide 250,000 voice circuits for telephony easier by relaxing the procedural requirements for all but "domi- or 72 broadcast-quality video channels, if used entirely for those nant" carriers (those having significant market power) In the course purposes; it would cost 5450 million, and would be installed in 1989. of this process, it has tentatively concluded that, except for the local The application also gates that the cable may in its final design re- telephone carners in Alaska, Hawaii, and Puerto Rico, only AT&T sult in even more usable capacity, since "current technology is de- (in message telephone service) and COMSAT are dominant car- veloping extremely rapidly" (p. 2). riers and therefore have to be closely regulated. (FCC, "In the Matter 2In March 1985, the FCC informed the Secretary of State of its of International Competitive Carrier Policies," File No 85-177, re- conclusions that the Tel-Optik application "meets the threshold leased Apr 19, 1985.) reciprocity showing of the Cable Landing License Act and other- 22The FCC authorized COMSAT to compete directly with other wise appears to be consistent with U S interests under thr. Act." carriers for customers' business in 1982, but the U S. Court of Ap- The SLC application was not acted on pending the receipt of addi- peals for the District of Columbia suspended action until the FCC tional information. (FCC News, Report No. 3092, Mar. 4, 1985). resolved other matters, including the issue of Earth stations and di- In May 1985 (based on an April refiling by SIC), the FCC recom- red ownership-type access to the INTELSAT system by carriers other mended to the State Department that it also approve the SLC cable than COMSAT (U.S General Accounting Office, FCC Need- :o landing license (letter from Mark S. Fowler to William Schneider, Monitor a Changing International Telecommunications Market, Jr , May 16, 1985). The Tel-Optik cable landing license was approved RCED-83.92, Mar. 14, 1983 ) In a series of decisions culminating by the FCC on May 16, 1985, subject to conditions that itis in an order released in January 1985, the FCC reaffirmed its policy revocable after due notice of hearing and that it is subject to future to allow COMSAT to provide retail service (through a subsidiary modification by the Secretary of State "to protect U.S. interests as separate from the monopoly World Systems Division), denied car- a result of the sale or lease of capacity to particular foreign or do- riers ownership-type access to INTELSAT, but allowed them and mestic entities" ("In the Matter of Tel-Optik Ltd. Cable Landing other users to ow their own Earth stations communicating directly License," FCC Mimeo 4618).

16' 3 Ch. 6Satellite Communication 155 ternational telecommunications industry is described broadly in this report and the formerly important distinctions between telephone and telegraph, terrestrial and satellite, enhanced and basic, international and domestic, and international and transborder are not emphasized.

Participants in the U.S. International Satellite Communications Market Of all the U.S. firms participating in international communications, AT&T is still the largest with $38.7 billion in (postdivestitu re) total assets i.t- in 1984. IBM, GTE, ITT, MCI, RCA, McDonnell Douglas, Western Union, Continental Telephone, United Brands, and COMSAT are also among the largest U.S. firms. Not all of them (e.g., McDon- nell Doug!as, Continential Telephone, and United Brands) currently have a large participation in in- Plato credit: National Aeronautics and Spam Administration ternational telecommunications, but each is in Wester VI, communications satellite built by Hughes Aircraft Co., being retrieved by Shuttle astronauts on a competitive position to expand their already sig- mission 51-A after it failed to achieve geostatlonary nificant activities should they so choose. (See orbit. The astronauts are to the left and right of the table 6-4 for a listing of U.S. international com- satellite. An astronaut on board controls the remote manipulator arm to bring the satellite munications firms.) into the Shuttle bay. In addition to these firms, the list of potential new entrants into international satellite commu- providers in the U.S. domestic market, and if per- nications is large and growing. It includes both mitted, could participate in the international mar- other owners of satellites used in U.S. domestic ket as well. communications (e.g., Hughes Aircraft Co.27 and Ford Motor Co.28) and those that lease or buy As the international regulatory regime" for tele- transponders from them. Several potential en- commt nications is currently structured, U.S. in- trants are new corporations organized to provide ternational service carriers must hand off com- international satellite capacity. munications traffic to foreign telecommunications carriers for entry into other countries. Table 6-5 In addition to firms that sell or plan to sell tele- presents a list of the major carriers of satellite communications services, a growing number of communications outside the East European bloc; other large U.S. multinational firms have put to- these are the officially designated representatives gether very large private international commu- of their countries ("signatories") to INTELSAT. nications networks, notably Citicorp (connecting The PTTs of Germany and France are both large 1,400 offices in 93 countries), General Electric, entities, as are the PTTs of a number of other Merrill Lynch, Shell Oil, and Texas Instruments, countries. They own most of the telecommu- that use the private-line and public services of authorized telecommunications carriers (see figs. 6- 1 and 6-2).29 Through resale of excess capacity, "We use the term "international regulatory regime" (or "international communications regime") broadly to include all govern- many of them have become telecommunications mental and intergovernmental actions affecting the operations of the international communications carriers. These include treaties 27Through its Hughes Communications, Inc , and Hughes Com- and other formal and informal intergovernmental agreements in munications Galaxy, Inc , subsidiaries. the area of telecommunications, other elements of international "Through its Ford Aerospace & Communications Corp and Ford law affecting telecommunications, the actions of international orga- Aerospace Satellite Services Corp subsidiaries nizations such as the ITU or INTELSAT, and the actions of national 29Department of Commerce, U S Industrial Outlook 1984, pp. governments that affect the international telecommunications in- 46-48 dustry 16i 156 International Cooperation and Competition in Civilian Space Activities

Table 64.U.S. Telecnmmunications Firms Providing international Satellite Communications Services

Selected major U.S. corporations cunently authorized to Asset, provide international service to consumers, Dec. 31, 1084 directly or through ens or more subsidiaries' ($ million) International Business Machines Corp. (Satellite Business Systems)b '''. d . 42,808 American Telephone and Telegraph Co. (post-divestiture)c d i 38,826 GTE Corp. (GTE Sprint Communicatons, GTE Spacenet Corp., Hawaiian f Telephone Co., GTE Telenet Corpc d 28,364 ITT Corp. (ITT Woridcom, U.S. Transmissions Systems, Inc.) di 13,277 RCA Corp. (RCA Giobcom, RCA Americom) 8,221 McDonnell Douglas, Inc. (FTC Communications, Inc., FTC Satellite Systems, inc , Tymshare, Inc., Tymnet, Inc.)d f h 8,191 Continental Telecom, Inc. (American Satellite and Space Communications Co., joint venture with Fairchild Industriesc d 4,557 MCI Communication., Corp. (Western Union international, Inc.)' 3,394 Hughes Aircraft Co. (Hughes Communications, Inc., Hughes Communications Galaxy, lnc.)c d 9 3,500i Western Union Corp .c if 2,259 Federal express Corp. (Fedex International Transmission Corp.)1 1,526 Communications Satellite Corp. (COMSAT international Communicaticns, CGMSAT Gwe,a1 Telematics, Inc.)d k 1,166 United Brands Co. (TRT Telecommunications, Inc., International Satellite, Inc., Pacific Satellite, Inc.)df 1,024 Fairchild Industries, Inc. (American Satellite and Space Communications Co., joint venture with Continental Telecom)c d 948 aPartial list of other U S telecommunications corporations participating in or intending to participate In internationalsatellite communications service mints: Ad snood Business Comrnunicntions, Inc., Atlantic Transport Co.. BonneAIN Satellite Corp, Compact Video Services, Inc., CYgr, a Satellite Corp., Eastern Microwave, Inc, Equatorial Communications Services, Inc., Financial Satellite Corp, Graphnet, Inc., International Relay, Inc., Intelmet, Inc., Molts lommunicatIons, Inc., Metromedia, Inc , Midwest Cable and Satellite, Inc., NEP Communications, Inc, Netcom Intonation' , Orlon Satellite Corp , Pan American Satellite Corp., Rainbow Satellite, Inc, Reuters Ltd., Satellite Gateway CommunIcati -no, Inc., Sunbeam reWrision Corp., Taft Televinion ano Radio Co , Inc , Tumor Teleport, Inc., United Video, Inc., Vitiorisar Connections, Inc., Visions, Ltd., Vitalink Communications Corp., World Telecommunications Corp., 220 Televisk, kSatellite Business Systems (SW is a joint venture with Aetna Life and Casualty Co.as of December 1964. IBM own.. 80 percent of 58S and with Aetna owning the remainder COMSAT, an original partner In the joint venture sold its holdings to the other two partners Currently authorized to provide satellite communications service to specific North American countries 9Authorized to receive INTELSAT Business Service using Itsown earth station facilities and satellite circuits leased from COMSAT eApplication to provide capacity for specific transatlantic transpacific or Western Hemisphere satellite services pendingat the FCC lEstablished U S International So NiC Carrier 0Application to provide specific North and South American international services conditionally epprored by the FCCpending INTELSAT coordination procedure kFTC Communications, Inc, la 20 percent owned by the French Government, 60 percent owned by McDonnell Do iglas IThls figure is the mid -point of the range of estimated market value by "Wail Street sources"of this privately held corporation for the New York Times (Jan 11. 1986, p D3) Authorized to provide transatlantic document transmission service kU S INTELSAT signatory SOURCE Fortune ,1pr 19, June 10, 1985 Financial Statements, Moody's Manuals and News Reports, FCCdocuments

nicat.ons assets of their countries.31British IN TELSAT is the final element in the interna- Telecom, slightly more than half of whichwas tional industry. At the end of 1983, it had assets sold to private stockholders in November 1984, of $1.6 billion.32 Like most of the participants in remains the preponderant British domestic and the international telecommunications service in- international carrier and is the U.K. INTELSAT dustry, INTELSAT provides communications serv- siglatory. Kokusai Denshin Denwa (KDD), Ja- ices (in this case, space-segme!.capacity) in both pan's officially designated international monop- international and domestic markets.3 INTELSAT oly carrier. is both a regulated private firm and "INTELSAT Financial Statements, Contribution of the Director the INTELSAT signatory for Japan. General to the Board of Governors Meeting, BG-58-70E w/3/84, Feb. 10, 1984 ' F /r instance, the PTT of France, Direction General des Telecom "INTELSAT participates in the domestic markets of a number of munications, had year-end 1983 assets of FF 164 billion, about $20 countries by leasing transponders for domestic service to telecom. billion '-o, ice telephone conversation with France Telecom, Inc. munications entities, usually its signatory-owners. It also provides (New Yolk), October 1984) a small fraction of its space-segment capacity to non-owner gov 16) Ch. 6Satellite Communications 157

Figure 131.Texas :nstruments' Worldwide Data Communications Network Information systems and services

TI worldwide plant locations

Central Lake-1965 Richmond Hill-1964 Plymouth-19M Almelo-1955 Freising-196v Johnson City-1973Versailles-1954Attleboro-1959 Bedford-1957 ice-1961 Sherman-1986 Plano 972 let1-1970 McKinney-114 Abilene-1978 Averse-1957 lho-1980 Colorado Springs-1979 Lubbock-1973 411'okyoa-1988 -1971978 Ridgecrest-1964 HIJI-1973 Dallas-1930 Lewisville-1978 Temple-1978 Baguio-1979 College Station-1978 Kuala Lumpur-1973 Austin-1968 Midland-Odessa-1977 Singapore-1969 Houston-1953 Elizabeth-1980

Aguascalientes-1984 I Buenos Aires-1957 Campinas-1963

San Salvador-1973 Oporto-1973

Location and date connected Texts- Instruments' worldwide data communications and electronic mall network is an Illustration of the current possibilities for multinationni communications networks. it grew to Its present configuration over three-decades, as domestic and overseas locations were linked by telecommunications. This shows TI's overseas plant locations and the dates they were linked to the TI corporate network. Exchange of detailed production, engineering and financial data is routine and allows the corporation to effectively coordinate worldwide manufacturing operations. Computer-assisted design capabilities In the system also allow engineers and managers at any location to use the firm's extensive computer capabilities in the United States

SOURCE Texas Instruments serves as both a communications enterprise with Competition in the United States Among commercial goals and an international organiza- International Communications Firms tion with important noncomme. cial goals. The major U.S. participants in international satellite communications are the same firms that dominate the massive U.S. domestic telecommunications industry. As we have noted, other large corporations would also be able to compete in all segments of a deregulated international mar- ernments, such as the Soviet Union How to charactei,Z2 INTELSAT ket, should they choose to or be allowed to has become an element in the policy debates involving INTELSAT enter.34 did COMSAT INTELSAT and COMSAT and those supporting their positions often denote INTELSAT as a "cooperative" of owner-mem- "Entry is likely to take place in those areas with the highest profit bers ethers, in opposition to these positions, who wish to empha- rates This applies to both domestic and international markets. Al- size te priceand capacity-setting aspects of the organization, though most domestic mark.,igments are now contestable, in often characterize it as a "monopoly" or a "cartel" composed of the sense that firms are free to enter, firms will pick and choose COMSAT and the PTTs To attempt neutral terminology in this re- carefully fo, actual entry among the richly differentiated opportu- port, we refer to it as a "consortium" or an "international organi- nities in the communications and information industries that are zation" as appropriate available., 158 International Cooperation and Competition in Civiilan Space Activities

Figure 6-2.Texas Instruments' Information Network Concept

Level I Host CenterDallas Level I Host CenterLewisville Seismic Level I CenterAustin

Terminals Terminals Terminals Local area network I isor It World wide data communications network Personal workstations

Transoceanic cable Microwave Satellite Leased lines Terminals i Local area network Terminals Terminals Terminals Terminal erminals Terminals 'Try Ten single

Terminals

Local area network Color MN Terminals terminal DWI up 1 1 1 1 1 1 1 1 1 1 terminal Personal workstations

DPSTI distributed processing system (T1990110, 11990112) iniLevel I IBM host III Level III, IV TI DPS (IBM 3033, 3081) DCPDistributed communications processor CA IBM communications controller 0 Level II IBM processor DNCS (IBM 4300) Distributed network communication system BDTBulk date transfer TDTTransaction data transfer This figure schematically displays some of the characteristics of Texas Instrument's systemand shows how it Is controlled and linked.

SOURCE 1, as Instruments

An important point to make is thatcompeti- into opportunities that become available than tion among U.S. firms takes placenot only in the firms that attempt to deter entry into their tradi- services and facilities markets but alsoin the fi- tional preserves througha strategy of keeping nancial markets. Firms thatare successful in at- their prices and profits low. This second dynamic tracting funds are able to expandmore rapidly (competition in financial markets) will affect the

167 Ch. 6Satellite Communications 159

Table 6.5. Members of INTELSAT: The Major Non-U.S. Telecommunications Providers of international Satellite Communications Services

Investment share' Country Signatory (percent) Total nine countries with 3 percent or more: 60.7 United States of America Communications Satellite Corp. 23.1 United Kingdom British Telecommunications 12.9 France Government of France 5.6 Japan Kokimai Denshin Denwa Co. Ltd. 3.3 Germany, Federal Republic of Minisay for Post and Telecommunication 3.3 Australia Overseas Telecommunications Commission 3.2 Saudi Arabia Government of Saudi Arabia 3.1 Brazil Empresa Brasileira de Teleconiunicacoes S.A. 3.0 Canada Teleglobe Canada 3.0 The Other 99 INTELSAT Members: 39.3 aAs of Mar 1, 1964 SOURCE INTELSAT See app 6C, for a complete listing of the members of INTELSAT and their Investment shares speed with which the old specia!ist structures re- & Wireless subsidiary has already established maining from the era of tight regulation break service between the United States and Canada.37 down and new speci,- ttions based on competitive advantage emerge. It may be somewhat difficult for European government-owned PTTs to compete directly in the Foreign competition in U.S. long-distance tele- U.S. market (selling domestic and international communications (in both domestic and interna- communications services directly to U.S. con- tional market segments) is also a possibility now sumers) without undercutting the diplomati;IS- that the U.S. market is substantially deregulated. tifications they make for preserving their mollup- At least one foreign firm is currently seeking to olies at home." Nevertheless, the French PTT has enter in a substantial way. Cable & Wireless, a designed its transatlantic satellites Telecom I and British firm with some U.K. Government owner- Videosat III with footprints (transmission area) that ship, is reputed tc., be planning to enter the U.S. include the Eastern United States. (Any intent to domestic long-distance telecommunications mar- use them for transatlantic international commu- ket by constructing an extensive fiber optic cable nications other than to reach French territories network laid on railroad rights of way." It is quite is denied by French telecommunications offi- possible that telecommunications firms from cials.") Self-imposed restraints may not be as other countries will also enter in the future. Cable binding far certain foreign private telecommuni- & Wireless, in joint venture with U.S. investors, has also applied for and received a cable landing license for a high-capacity transatlantic fiber 37FCC, "In the Matter of TDX Systems, Inc.. .," File No. ITC 85- 077, Mimeo No 3604, released Apr. 3, 1985. TDX Systems, Inc. optic cable facility (six fiber pairs) between the is a wholly owned subsidiary of Cable & Wireless. United States and the United Kingdom." A Cable "This reticence may not be as strong in enhanced (computer- processed) communications services, and entry via INTELSAT Busi- ness Services will be easy (Eli M. Noam, "Telecommunications Pol- icy on the Two Sides of the Atlantic Divergence and Outlook," 35Cable & Wireless has discussed the possibility with a number op cit., p. 16). of U 5 railways. (Department of Commerce, U 5. Industrial Out- "The stated Justification for the Telecom I satellite is to commu- look 1984, pp. 46-51). Rights of way along highways, gas or oil pipe- nicate with a French island territory in the Atlantic off of Canada lines, and electric utility transmission lines may also be usable and French territories in the Caribbean, but there would be no tech- ("Golden Opportunity, Can Utilities Move Fast Enough to Cash in nical reason why it or the successor satellite Telecom IB, scheduled On the Telecommunications Boom?" The Energy Daily, Nov. 16, to be launched in March 1985, could not be repositioned to offer 1984.) Mercury Communications, the new entrant in U.K domes- competition to INTELSAT or entry into the U.S. market (source: tic telecommunications, is a wholly owned subsidiary of Cable & telephone conversation with Francelelecnm, Inc October 1984). Wireless, Ltd. See also "French PTT Chief, COMSAT Deny Telecom 1 Will Com- 36Application of Tel-Optik Lto. (Cable & Wireless' U.S partner) pete With INTELSAT," Satellite News, Nov. 5, 1984. There has also for a license to land and operate in the United States a submarine been a January 1985 French filing with the IFRB for the Videosat cable extending between the United States and the United King- satellite, whose footprint will include most of the Eastern United dom, op cit States.

168 160 International Cooperation and Competition in Civilian Space Activities

cations firms like KDD,4° Japan's international car- Competition in Foreign rier, however, since they are not government cor- Telecommunications Service Markets porations. Cable & Wireless has led the way, but now that British Telecom has been taken private, In "basic" telecommunications services," in- it may also become more aggressive. Similarly, ternational competition in foreign markets is practically nonexistent. Most countries outside the Britain's Unisat satellite (launch date 1986), which like the French satellites has a footprint cover- United States do not allow competition even in ing parts of North America,41 may not be con- domestic long-distance telecommunications; a stra;ned from competing for U.S. business by its telecommunications monopoly, owned by the minority government ownership. government (or, alternatively, in some cases a private monopoly regulated by the government) is In sum, in the highly competitive, new U.S. tele- the prevailing mode of industry organization communications industry, very large U.S. domes- around the world. While a few countries, notably tic telecommunications and data processing firms, the United Kingdom, Japan, and Canada, are as well as a full range of large, small, and foreign moving toward privatization and limited domestic new entrants, are in actual or potential compe- competition, they do not as yet envisage com- tition with each other for both domestic and in- petition from foreign (including U.S.) firms. For- ternational communications opportunities. AT&T eign carriers must transfer control of communi- may be able to keep its present dominance in do- cations passi ig into (or through) the country to mestic long-distance telephony in the new do- the PTT at the international border or to an in- mestic market, but it will do so only by competi- termediate cable or satellite consortium that tive success. In the long run, technological and subsequently passes control to the PTT. economic forces, which are affecting regulatory structures in the national markets of other coun- In contrast, at the information services end of tries, as well as in the United States, appear likely the information/communications continuum, also significantly to expand opportunities for firms U.S. and foreign firms, which provide interactive other than AT&T in international communications data processing services, compete in manyna- service markets." For the present, however, pow- tional markets. For regulation to have practical erful barriers to change in foreign countries are effect, a boundary has to be drawn somewhere still limiting these opportunities. between the regulated basic communications industry and the unregulated data processing in- 40Kr/D is formally a private stock company traded on the Tokyo dustry, since they merge into each other. Unlike Stock Exchange. The private status of KDD can be overemphasized, the present situation in the United States, in most however Very strong Japanese Government influence enters not countries, the telecommunications entities at- only through regulatory channels, but also because large blocks of stock are owned by government employee pension funds and tempt to monopolize enhanced communications other government employee organizations and value-added network (VAN) services, which "Departments of State and Commerce, "A White Paper r -1 New International Satellite Systems," op. cit , p 25 increase the efficiency of communications in pri- 42British Telecom, which had previously been separated from the vate networks. (This latter technique uses com- postal administration, underwent majority privatization Nov 28, puter processing to group communications into 1984, and is facing limited domestic competition from Cable & Wire- less' domestic subsidiary (Mercury Communications) and from packets going to common destinations.) In a few enhanced service providers. The expxtation that the European PTTs countries, private firms, including U.S. ones, are will not enter the domestic U 5 telecommunications market is also allowed to compete freely in providing theseserv- subject to some question Several European state-owned enterprises have entered the U 5 market in other industnes. For instance, Ren- ault, a French state-owned auto company has a relationship with American Motors, vanous European state-owned airlines have ef- ---- fectively competed for U 5 -origin airline passengers, and ',Pvera I Private purchase and interconnection of telecommunications equip. state-owned banks have established active branches in the United inent to the public network have been permitted in the United States States since the 1970s and are now allowed in a variety of other coun- "One such technological force impelling change concerns tele- tries(See Del Meyers, Janice Drummond, and Czatdana Irian, communications equipment Developments in customer-premises "World Telecom Spending to Reach $78.5 Billion This Year," communications equipment and in computers have undercut reg- Telephony, Feb. 28, 1983, p. 43.) ulatory rules that require customers to acquire such equipment only 441.e., ordinary voice, record, data, and television transmission, by leasing or purchasing it from their telecommunications carrier where computers are not used to process the communications flow.

1 6:i Ch. 6Satellite Communications 161 ices. (See app. 6A for a discussion o: the inter- Recently, these arrangements have been chal- national regulatory regime.) lenged by tie would-be private transatlantic and Western Hemisphere satellite and cable opera- International Facilities Competition tors referred to above. These potential entrants have received qualified official encouragement Control of international communications sent from eithe; the FCC, the executive branch, or between adjacent countries by land cable, under- both. As we discuss below and in appendix 6A, sea cable, or terrestrial microwave passes bilat- the capacity additions specified in these applica- erally at the border from one country's carrier tions, together with INTELSAT's planned addi- to the other country's. In certain cases, however, tions and the cable facilities discussed within the governments and carriers have devised multila- official planning process, are far in excess of the teral mechanisms of joint ownership for interna- 1995 communications demand projected by the tional satellites and transoceanic cables (described U.S. international service carriers and their Euro- further in app. 6A). INTELSAT and INMARSAT are pean counterparts.° This would appear to call two such consortiums of international carriers, into serious question the FCC planning process and there are transatlantic and transpacific cable and/or the demand projections of the carriers. consortiums that are jointly owned by U.S. and Canadian carriers, on the one hand, and Euro- pean or Asian carriers, on the other.45 The Satellite Communications As in the provision of basic international tele- Equipment Industry communications services, competition among firms in the provision of international transmis- The large-scale development of the world sat- sion facilitiesis also almost universally not ellite communications service industry has been allowed. The closest thing to competition in inter- made possible by the development of a large sat- national facilities in the current regulatory regime ellite communications equipment industry, paris the competition between INTELSAT and the ticularly in the United States. Despite severe trade various transatlantic cable consortia. Even this restrictions and growing industrial policy chal- competition is largely managed by overlapping PTT representation in INTELSAT and the consortia, by U.S. regulatory policies encouraging the "balanced" use of both kinds of facilitrs, and facilities with unused capacity in a manner which, to the extent by facilities planning processes overseen by the possible, seeks to place equal numbers of circuits on all transmis- FCC and other regulatory authorities.46 sion systems" [emphasis added] (Federal Communications Com- mission, "Second Notice of Proposed Rulemaking in the Matter

of .. Authorization of Common Carrier Facilities to Meet North 45U 5 carrier plrlicipation in INTEI SAT and INMARSAT is through Atlantic Telecommunications Needs During the 1985-1995 Period," COMSAT alone, in its role as a carriers' carrier, in contrast to the FCC 85-176, released Apr. 22, 1985, p. 3). See below and app. 6A cable consortiums to which most U S. service carriers belong. for further discussion of facilities regulation. 46"Balanced use," as used in this report, means the substantial "For transatlantic communications the FCC has received applica- use of both satellites and cables, without specifying exactly how tions to install satellite capacity of about 120,000 circuits and fiber this is to come about At various times in the past, the FCC has optic cable capacity of about 330,000 circuits in addition to the used several formulas to balance the use of satellites and cables proposed capacity additions of the traditional consortia listed in through regulation, including "proportional fill," "50-50," and "bal- table 6-A2 in app. 6A. See also discussion of alternative satellite anced loading " The loading methodology currently in use was ne- providers below and in app 6A. The additional 30,000 circuits gotiated among AT&T, COMSAT, and the European PTTs on a of cable capacity, for which cable landing licenses have been ap- country-by-country basis and approved by the FCC. It is generally plied, are in the cable projects of Cable & Wireless and its U.S. in accordance with what is known as the 'balanced loading' meth- partners (Tel-Optik) and Submarine Lightwave Cable Co , which odology," defined by the FCC as the "distributlion of] circuits among are for 80,000 and 250,000 circuits, respectively. 162 International Cooperation and Competition in Civilian Space Activities

lenges from Japan and Europe, U.S. manufac- nese contractors produced only the eight satel- turers continue to dominate world sales of com- lites launched for European and Japanese buyers munication satellites. U.S. ground equipment during the same period and sold none outside manufacturers, however, no longer dominate the of these reserved markets. In thecase of the Jap- world market for large standardized Earth sta- anese satellites placed in orbit, a U.S. company tions, and though they still lead in the market for provided many of the components and provided small Earth stations designed for customer prem- technical assistance. ises, they are beginning to receive strong foreign competition there as well.48 In the 1984-89 period, for satellites whose primr :contractors have alreaaj been announced, World Satellite Markets the pattern is similar, with the one importantex- ception that the United States is expected to be For the satellite manufacturing industry, the by far the largest single market, with 53 percent non-Communist world market can be conven- of the scheduled satellites during this period (see iently divided into five parts: the United States, table 6-6). U.S. satellite buyersare of several INTELSAT, Canada, Europe and Japan considered types: private communications firms such as together, and the rest of the world. During the AT&T, Western Union, COMSAT, GTE, Federal 1965-83 period, INTELSAT was the largest of Express, and IBM's Satellite Business Systems these markets, with 35 satellites launched, fol- (SBS) subsidiary, direct broadcasters (e.g., Domin- lowed by the United States with 26 (as shown in ion Video Satellite Corp.), and several smaller and table 6-6). U.S. prime contractors manufactured newer firms that provide specialized satellite fa- all 72 of the commercial communication satel- cilities to business and media customers (e.g., lites sold outside of Europe and Japan during the American Satellite). The three major U.S. satel- 1965-83 period. In contrast, European and Japa- lite manufacturers Ford, RCA, and Hughes have also launched, or plan to launch, theirown 'Customer premises Earth stations can be defined as stations satellites for lease or self-use. RCA platys touse which are located at the point of use its satellites in its own common carrier operations,

Table 6-6.U.S. Market Share of Commercial SatellitePrime Contracts

Number of satellites Seller No prime Buyer United States CanadaWestern EuropeJapan selected Total 196543: Urdted States 26 26 INTELSAT. ... 35 35 Can'da ...... 6 1(1) 7 Western Europe 5 5 Japan Other' 3(3) 3 .. 5 5 Total .. 72 1(1) 5 3(3) 81 198449: United States . .... 40 40 80 INTELSAT ...... 20 20 Canada 1 4(1) 5 Western Europe... 19 19 Japer, 8(4) Other° 8 ...... 9 2(2) 2(2) 5 18 Total 70 6(3) 21(2) 8(4) 45 150 NOTE Numbers in parenthesesrefer to thenumber of satellites manufactured by foreign prime contractors but with mayor US participation Indonesia, Italy, India. ',Indonesia, Arab States, Mexico Australia, Brazil, India,Korea, Argentina, Cuba. SOURCE Derived from R Filet), A Schnspf, and S Fordyce, "World communicationsSatinets Market Characteristics and Forecast," prepared lot the NASA UIV/11 Research Cantor. NASA CR160270,November 1963 NonCommunIst countries only am included In the list given here

1 7 1 Ch. 6Satellite Communications 163

Japanese design." In the rest of the world in the 1985-89 period, U.S. manufacturers are the prime contractors for, or have major involvement in, all but three of the satellites with announced contractors. These three satellites are being built by a Canadian prime contractor (Spar) for Canadian buyers. Although the United States continues to dominate markets where competition is allowed, it should be noted that Canadian, European, and Japanese manufacturers are now able to build significant numbers of satellites without major U.S. involvement, albeit within the confines of protected markets. European and Japanese capabilities have grown even more at the component level. U.S. manufacturers were awarded the Photo mat: National Aeronautics and Space Administration prime contracts for the current (INTELSAT V and Scene of the open cargo bay of Shuttle Challenger on V-A) and the next (INTELSAT VI) generation of flight 4-8. The Pa lapa 8 and Wester VI satellites INTELSAT satellites, but non-U.S. subcontractors are stowed in the aft section of the cargo bay (under Sun shields). received contracts for 23 and 21 percent, respectively, of the contract value of the two satellite both domestically and internationally, and all series.52 three either lease facilities to other firms now, or Satellite R&D plan to. Even though NASA funded relatively little com- In the rest of the world, the buyers are almost munication satellite research and development always governmental entities such as the Indone- during the 1973-83 period, U.S. market domi- sian and other ASEAN49 PTTs, for the Palapa se- nance persisted. U.S. industry was relied upon ries, or the Arab League consortium of PTTs for to finance its own R&D efforts. During the same Arabsat. period, however, foreign government-funded sat- For the period 1964-89, all sales of communi- ellite communications R&D increased substantial- cations satellites to U.S. buyers and to INTELSAT ly. At present, the governments of Japan, Cana- (where prime contractors are known) have gone da, United Kingdom, France, Germany, and Italy; to U.S. prime contractors.5° All 19 of the Euro- the European Space Agency; and INTELSAT are pean contracts went to European contractors, all funding significant satellite communications and all 8 of the Japanese contracts went to Japa- research programs." This imbalance in govern- nese contractors (see table 6-7). U.S. satellite ment R&D support led to concern in the United manufacturers will still participate in major ways in four 3f the eight Japanese satellites to be launched during this period, but the other four SIR Filep, A Schnapf, and S Fordyce, "World Communications will be manufactured by Japanese firms without Satellite Market Characteristics and Forecast," prepared by Ccm- munications 21 Corp , Redondo Beach, CA, for the NASA-Lewis the formal association of an American satellite Research Center, Cleveland, OH, NASA CR-10270, November manufacturer and will use key components of 1983 52Filep, et al , op cit , p 101 "See R Filep, A Schnapf, and 5 Fordyce, "Japanese and West- "Association of Southeast Asian Nations ern European Space Research and Development," unpublished pa- s"Contractors had been selected, however, for only 40 of the 80 per prepared for NASA Lewis Research Center, Feb 1, 1984 See announced U S satellites Whether they will all he built will de- also U S Congress, Office of Technology Assessment, Information pend on whether sufficient demand for U S domestic satellite com- Technology R&D Critical Trends and Issues, OTA-CIT-268 (Wash- mum( ations servo es develops ington, DC U S Government Printing Office, February 1985), ch.7.

17A. 164 laternational Cooperation and Competition in Civilian Space Activities

Table ST.Prime Contractors for Commercial Communications Satellites (by launch period)

Actual Planned Company Country 1965-83 1984-89 Primo contractors: [First launch 1983 or before] Hughes Aircraft United States 45 33 Ford Aerospace United States 10 10 RCA AstroElectronics United States 9 27 TRW Defense and Space Systems United States 8 0 British Aerospace Dynamics United Kingdom 4 9 Melco/Ford Aerospace Japan/United States 3 1 C.N S Italy 1 1 Spar AemspezeiHughes Aircraft.. . Canada/United States 1 3 Total 81 84 Additional prima contractors: [First launch 1984 or later! Eurosatellite West European Consortium 5 Melco (Mitsubishi Electric Co.) Japan 4 Toshiba/GE ...... JapanlUnited States 3 Spar Aerospace Canada 3 Matra Space France 2 Aerospatiale (with Ford Aerospace) France/United States 2 Siemens/NIBB/ERNOIAEGIAUT West European Consortium 2 Total 21 Primo contractor not yet solectod: 45 Grand total 81 150 For the period -Beginning of 1990" Through "The End of 1999," 16 prim ^ontractors havebeen selected (of which 11 are U S) for specific satellites During this time period, 149 satellite pro*, ; yet have no prime contractor selected SOURCE Derived from R Form, A Schnapf, and S Fordyce, "World Communications savanna market Characteristics and Forecast," prepared for the NASA Lewis Research Center, NASA CR-168270,November 194I Non-Communiat coon. tries only are included in the list given here

States that the United States could be behind in Protection and discriminatory government pro- the technology of the next generation of com- curement are major factors segmenting wore -; sat- munications satellites and was a prime motiva- ellite markets and are the major factors deter- tion for Congress funding NASA's Advanced mining sales of satellites in Europe and Japan. Eu- Communication Technology Satellite (ACTS) pro- ropean and Japanese space development policies gram at higher levels in fiscal year 1985 than pre- have included restrictions on procurement of viously." (See below for further discussion of the complete satellites in order to favor national de- ACTS program.) velopment of space technology." Recent policy changes, however, may makc possible the sale Competitive Factors in International of U.S. communications satellites in Japan." Satellite Markets The price/quality dominance of U.S. manufac- World Earth Station Markets turers has been the most important competitive In contrast to the relatively small number of sat- factor in both the U.S. domestic market and in ellite manufacturers, more than 25 sizable firms INTELSAT contracts. Even the strong dollar oas "-Japan's Satellite Development Program," Japan Economic In- not hampered their recent successes. Other ,:orn- stitute Report, Washington, DC, No. 11A, Mar. 16, 1984 and petitive factors helping U.S. firms are their well "Aerospace in Japan: Competcon Through Partnership," Aerospace known experience and the operational reliability America, March 1985, pp. 68-in. See also Neil Davis, "Japan Broad- en Domestic Role in Satellite Development," Aerospace Ameri- of their satellites. ca, February 1985, p. 27. soSee -New Trade Policy May Boost Japanese Imports of Satel- "Chns Bulloch, "Advancing the Art of Satellite Commu.ucations- lites," Aviation Week and Space Technology, May 7, 1984, p. 16; Foreign Competition Spurs NASA Satcom Research." Interavia, Ian. and William Chapman, "Japanese Trade Plan Seems to Open Door uary 1985, pp 25.28 for U 5 Satellite Sales," The Washington Post, Apr 28, 1984, p. A20.

17,E Ch. 6Satellite Communications 165 in 7 countries manufacture Earth station equip- try, for major suppliers from various countries for ment (see app. 6B). The equipment for an Earth INTELSAT standard A and B stations are shown station is diverse and includes antennas, track- in table 6-8. Over the whole period, U.S. major ing systems, amplifiers, ground communication firms had the largest share-39 v. 37 percent for equipment, multiplex equipment, and, for larger Japanese firmsbut this larger share of U.S. firms installations, support buildings and equipment reflects their early dominance. Japanese firms (for air-conditioning, controls, power, etc.).57 now dominate new orders. Earth stations vary considerably in size, from large In addition to leading in sales of standard stations, such as the INTELSAT Standard A sta- INTELSAT Earth stations, NEC also leads in large tions that send and receive most international and medium-sized domestic-system Earth sta- trunk communications, which have 30-meter an- tions. It sold in excess of 500 Earth stations in 15 tennas, to receive-only equipment whose anten- countries prior to 1984 and is particularly strong nas are less than 1 meter in diameter. INTELSAT in total equipment technology.62 Standard A stations cost $5 mil':on to $9 million each (higher-density INTELSAT C stations can cost Despite its worldwide preeminence, up to the up to $15 million), compared to 5-meter and present, NEC has rarely been seen as a major smaller transmit and receive stations that might cost competitor in U.S. Earth station sales. Neverthe- $200,000 to $300,000.58 Small receive-only sta- less, it recently penetrated the U.S. market in a tions, such as those used for CATV or home re- significant way, with the sale of 130 RF terminals ception, can cost ,J little as $2,000.59 (antennas and radio-frequency electronics) to IBM's Satellite Business Systems network. (IBM The larger stations are purchased mainly by 'provided its own digital baseband equipment.) common carrier communications firms, which carry domestic and international switched voice In Europe, Alcatel-Thompsontrelspace is the and message traffic and television. Common car- largest manufacturer o' Earth stations, with ap- riers also use medium-sized stations in locations proximately 580 systems of all types operating, with smaller traffic volumes. Specialized data and under installation, or on order. It has supplied television carriers and firms operating private 30 INTELSAT Standard A terminals plus another communications networks use medium-sized 30 Standard B and C stations for international traf- Earth stations located on "customer premises."6° fic and 21 for domestic leased-capacity traffic. It Receive-only stations on customer premises are is also supplying 467 stations for France's Tele- typically small and are used only for television com 1 network. Of these, 350 will be the 2.0 to and data reception. They may be purchased by 2 3 meter video receive-only type and 116 will businesses for point-to-multi-point teleconferenc- be 3.5 meter business data transmit/receive tering networks or data transmission (when it can minals. be carried out at slow speeds) and by home con- 421bKi , p 1234, Richard Shaffer, "Japanese Now Target Com- sumers for television reception. munications Gear as a Growth Industry," The Wall Street Journal, Nippon Electric Co. (NEC), a Japanese firm, is Jan13, 1983, p. 1. the largest manufacturer of large nonmilitary Earth stations, having manufactured approxin sate- Table 6-11.Earth Station Market Shares, By Country ly one-third of all such stations around the of Supplier, For the Period 1965412 world.61 The cumulative market shares, by coun- United States (Harris, GTE, ITT, RCA, Page) 39% "Eloise Jensen, Tacey Harbaugh, Kenneth Telesca, and James Japan (NEC, Mitsubishi) 37% Mahoney, "Sector StudySatellite Earth Stations," The Export- France (Thompson CSF, Alcatel- Import Bank, Washington, DC, June 1984 ThompsonfTelespace) 13% "Industry sources Italy (STS) 5% "Unpublished memorandum, Ford Aerospace & Communica- United Kingdom (Marconi) 4% tions, 1931 Wast Germany (Siemens) 2% 6°Chris Bulloch and Paul Rubin, "Satellite Telecommunications Canada (Spar', nla The Ground Segment Grows," Interiona, November 1984, pp SOURCE Derived from Eloise Jensen, Tracey Harbaugh, Kenneth Telesca and 1231.1235 James Mahoney, "Sector StudySatellite Earth Stations," The Export.

61Ibld, p 1233 Import Bank, Washington, DC, June 1964

1 74 166 International Cooperation and Competition in Civilian Space Activities

Although U.S. manufacturers are no longer the grow will depend on the ultimate popularity of dominant suppliers of large Earth stations as they high-power direct broadcasting systems (DBS) de- were in the beginning phase of satellite commu- signed to feed very small home TVROs. Scientif- nications, they continue to win contracts for ic Atlanta has supplied over 10,000 Ku-band INTELSAT A and B stations and are particularly TVRO Earth stations to individual cable systems. competitive in specialized, medium-sized Earth The company has also supplied video uplink sta- stations for domestic satellite systems, which are tions to over 350 U.S. television stations. Harris a growing part of world demand, and in digital Corp., another major U.S. supplier of cable TVRO subsystems associated with large station net- stations, is the contractor for 180 ground stations works.63 This has resulted in U.S. companies such for NBC television affiliates. DBS receiving dishes, as Scientific Atlanta, Harris, GTE, and M/A Com if a mass residential market develops, will un- increasing their relative share of U.S. exports of doubtedly be sold through consumer electronics Earth stations or associated equipment. I TT, RCA, channels. Somewhat larger and more expensive and Page have seen their exports decline. Cali- TVRO dishes, capable of tapping directly into ex- fornia Microwave is an important additional par- isting cable distribution systems, are already be- ticipant in the U.S. domestic Earth station market. ing marketed in this way (see app. 6B of this chapter).66 Customer-premises Earth stations include small to medium-sized transmit/receive Earth stations A significant and growing number of medium- as well as television and data receive-only equip- size and small Earth stations, ranging from one- ment. Although reliable sales data is not avail- way data to full two-way voice and data, are be- able for sales of customer-premises Earth station ing used in corporate networks and in shared ten- equipment, because satellite ground equipment ant systems operated by office building manage- is not broken out of the more inclusive data cat- ment firms. These networks, using small send/ egory for telecommunications equipment as a receive Earth stations, are now very competitive whole, it appears that, worldwide, most such sta- in cost with established local and long-distance tions are manufactured by U.S. firms and sold in telephone companies for two-way voice commu- the United States." The direction of technologi- nication. This has been called the "bypass prob- cal change is toward higher-power, more sophis- lem"; the equipment itself is said to embody "by- ticated satellites making possible smaller, less ex- pass technology." pensive, but technically advanced Earth stations A U.S. firm, Equatorial Communications Co., that can be used for corporate data transmission has been very successful in marketing very small, and videoconferencing. U.S. firms, represented receive-only dishes, only 2 feet in diameter, that by Scientific Atlanta, M/A Com, and numerous permit reception of computer data at relatively smaller firms, are still dominant at this end of the slow speed but at a cost only about 60 percent market, and appear to have the technical edge, of AT&T's charges for functionally equivalent pri- particularly in equipment for digital transmis- vate-line service. Major corporations, such as the sion.65 Associated Press, Reuters, Dow Jones, and E.F. Television receive-only Earth stations ( TVROs), Hutton, concentrated in the media and financial which are primarily used to feed large or small sectors, have collectively purchased 20,000 of television cable networks, are already a large part these $2,500 one-way dishes in the last 3 years. of the total demand for Earth stations in the In 1984, Equatorial began to sell a new line of United States and are becoming so in Europe, 4-ft send/receive digital Earth stations for low- where a major proportion of Eutelsat's ECS sys- speed data transmission.67 tem capacity is devoted to TV distribution. The most rapid growth in demand for satellite Whether the market for TVROs will continue to services (primarily domestic), and in ground "Jensen, et al , op cit , p 10 equipment, will probably occur in the data, tele- "Private communication, International Association of Satelltte "Bullock and Rubin, op. 01, November 1984, p. 1232 Users and Suppliers, March 1985 67'Ttny Satellite Dishes Are Serving Up a Hot New Market," Busi- "Jensen, et al , op cit , June 1984 ness Week, Mar 11, 1985, pp 102, 106

17J Ch. 6Satellite Communications 167 vision distribution, and videoconferencing areas. In the rest of the worldthe United States, the Business data services are projected to be the smaller industrial countries outside the EEC, and largest growing segment of the satellite commu- the developing worldprice appears to be the nications market. Internationally, INTELSAT has principal competitive factor in the sale of large deveioped new E- and F-Standard stations for its Earth stations. Subsidized financing through the INTELSAT Business Service. California Micro- use of mixed credits flab been a d-termining fac- wave, Fairchild, and GTE are the primary com- tor in a some sales to developing countries." petitors in this field, and Scientific Atlanta has de- Other competitive elements in sales to develop- veloped an Integrated Business Terminal that is ing countries have been political factors (French- roof-mounted, fully remote controlled, and re- speaking West Africa) and the willingness of sup- quires no air-conditioning. Rural thin-route te- pliers to meet local content thresholds (Brazil)." lephony and mobile services, while not a large For large Earth stations, superior technical fea- element in total sales, may require a large num- tures appear as a competitive factor only in the ber of Earth receiving units. digital subsystems. NEC (particularly outside the United States) and U.S. manufacturers like M/A Competitive Factors in International Com, COMSAT, Comtech, and Fairchild appear Earth Station Markets to have a competitive advantage in these subsystems. The competitive factors influencing sales of Earth station equipment are different in the three Technical features are a more important com- market segments: 1) INTELSAT and other large petitive element for medium-size customer prem- standardized Earth stations, 2) medium-sized, ises Earth stations than in large ones, because "domestic" Earth stations, and 3) television and technical change is faster and customer needs are data receive-only equipment. more differentiated. For this reason, restrictive telecommunications standards join restrictive In the world market for latie Earth stations, procurement practices as trade barriers to U.S. where typical contracts are in the $5 million to exports to Europe and Japan.70 Industry sources $15 million range, procurement restrictions and in the United States believe that both the Japa- price (including the cost of financing) appear to nese and EEC markets are effectively closed to be the principal competitive factors affecting in- U.S. manufacturers of customer premises and do- ternational market shares. The Japanese, French, mestic-system Earth stations at the present time!' German, and Italian markets are essentially Exporting to these markets, however, is likely to closed to U.S. manufacturers of INTELSAT and be more possible in the future, as businesses in domestic-satellite Earth stations because of gov- foreign countries increasingly come to use cus- ernment procurement restrictions. The markets tomer premises equipment in corporate informa- of other European countries, though, are not fully tion/communications networks and seek to con- closed. In recent years there have been sales by trol it through ownership, rather than lease it from Japanese companies in the United Kingdom, Sweden, and Turkey. But these markets are not fully open either. The problem is that the buyers 69ensen, et al., op. cit , app. II. Also Robin Day Glenn, "Financ- of large Earth stations are usually PTTs, which are ing of United States Exports of Telecommunications Equipment," International Law Institute, Georgetown University, Washington, not covered by the GATT Government Procure- DC, 1982, pp. 34-39. ment Code, and they typically discriminate in fa- "Jensen, et al., op at ,p. 9 vor of local manufacturers or make other discrim- '"As a Control Data executive put it, "If you're trying to bring in a competing product, a written request may gather dust for four inatory purchases. In the case of Japan, even if years before it's certified by the PTT," quoted in Gary Stix, "PTTs the telecommunications sector should be opened Make Life Rough Overseas," Computer Decisions, Apr. 9, 1985. generally to foreign telecommunications equip- ""Europe's Technology Gap," The Economist, Nov. 24, 1984, pp. 93-98. Shaffer, op. cit ; U.S. Department of Commerce Inter- ment, NEC would probably still dominate the national Trade Administration, Country Market SurveyTele- market for large Earth stations for the same rea- communications Equipment: Japan, CMS/TCE/558/83, April 1983; sons of low price and high quality that have led John Burgess, "Japan's Phone Shake-Up May Profit U.S. Firms," The Washington Post, Nov 18, 1984, p. 51, and "Phone Market: to its current dominance in other world markets Japan Keeps Hanging Up on the U S ," Business Week, Mar. 11, outside of Europe. 1985, p 67 176 168 International Cooperation and Competition in Civilian Space Activities

the PTT. In the case of Japan while domestic tele- uct is sold as part of a data-transmission service communications privatization and competition package, however, the price of the equipment and trade understandings with the United States has not been the major factor. The large num- may succeed in opening up some sectors of Ja- bers of small receive-only dishes sold (or leased) pan's telecommunications market to foreign com- by Equatorial Communications, for instance, are petition, industry sources are skeptical that it will not in competition with other small Earth stations. have measurable impact in the Earth station Rather as a required component of Equatorial's market. spread-spectrum service, they compete with terrestrial alternatives such as packet-switching serv- In any case, by far the largest portion of the ices. Price competition may become more in- world market for customer premises Earth stations tense as new firms enter the market for small-dish is currently in the United States. In this market, satellite data transmission services, however. dozens of established and new firms compete for the business of corporate networks and shared- One indication that this may happen in the near tenant systems in office buildings. Because tech- future is that a significant number of firms are now nical change has been rapid in the customer in bidding competition to provide approximately premises segment, the ability to assist customers 50,000 small transmit/receive Earth stations for with technical sales support activities is an im- Federal Express's Zap Mail service. Besides Equa- portant competitive factor in addition to price. torial, the main contenders are NEC, Mitsubishi/ COMSAT, Fujitsu, and Matsushita (in collabora- At the low end of the market, the receive-only tion with Harris and Scientific Atlanta). The bid- segment, the world market is again principally ders on this huge contract ($500 million to $750 concentrated in the United States. When the million) may be in a position to challenge Equa- product sold is simply the equipment, the prin- torial's dominance in other sectors of the mar- cipal competitiv, factor is price. When the prod- ket for small data-oriented Earth stations.

COOPERATION AND COMPETITION ISSUES IN INTERNATIONAL SATELLITE COMMUNICATIONS

International Context o. In recent years the reverse process also appears Satellite Communications to be occurring. Conflicts originating in the satellite communications area now affect broader By its nature, the world satellite communica- U.S. foreign policy interests. These conflicts, in tions network is an important arena for interna- turn, have grown out of two fundamental trends tional cooperation. The United States participates in satellite communications: with other nations in a number of specialized international institutions producing satellitecom- 1. The exp,nsion of the world's satellite communications services And dealing with theregu- munications industry is producing potential lation of international telecommunicationserv- crowding in the geostationary orbit." This ices. Because of the politics of these organiza- has resulted in conflict with developing tions, U.S. telecommunications interestsare fre- countries in international organizations." quent!, !inked to wider foreign policyconcerns, 2. Technology-driven change in satellite net- and conflict originating in diverse contextscan works, data processing, and telecommunica- spill over into telecommunications matters.* "See box, p 174 for a description of the use of the geostationary orbit for communication satellites 'See ch 3 for an in-depth discussion of issues relating to the U S "Certain industrialized countries, notably Canada, may also have role in international organizations See also Unispace '82 A Con- interests that potentially conflict with those of the United States with text for Cooperation and Competition, op cit regard to the geostationary orbit 17 Ch. 6Satellite Communications 169

tions generally is upsetting the current inter- nization (INTELSAT). As described below, an ini- national regulatory regime and the existing tial move was made in this direction in Novem- cooperative arrangements in satellite com- ber 1984, when the Reagan Administration found munications.74 It has resulted in conflict be- that private satellite systems were "required in tween the United States and other industrial the national interest."77 The decision to allow countries. U.S. firms to launch private satellite communications facilities in competition with INTELSAT The expansion of the world's satellite commu- has the potential for causing difficulties with other nications industry has made access to the geosta- governments that actively seek to limit competi- tionary orbit an issue. It is basically a "North- tion in telecommunications. Beyond the INTELSAT South" issue between the industrial countries of issue, the United States must also face the broader the "North" and the developing countries of the question of how much conflict to allow into the "South." The crowding that is currently devel- necessarily cooperative regulation of international oping in that portion of the geostationary orbit communications. that serves the Western Hemisphere, mostly for satellites broadcasting in the C band, is the re- A second highly contentious competition issue sult of the continuing expansion of U.S. domes- the issue of access for U.S. telecommunications tic satellite systems. A World Administrative Radio equipment manutacturers into other industrial Conference of the International Telecommunica- country marketsalso arises because the United tion Union scheduled to convene in August 1985 States wishes to derive the benefits of free mar- will attempt to develop new international mech- kets in te!ecommunications equipment, both anisms to deal with the issue. within the United States and in international trade. The open market for telecommunications Prospective moves by the United States to alter equipment within the United States has brought the international regulatory regime in satellite into sharp relief the restrictionist policies other communications (discussed above and in app. 6A) industrial countries toward trade in satellite and constitute a second major satellite communica- other communications equipment. tions issue.75 It is primarily a "North-North" issue between the United States and other industrial These conflicts with other countries in interna- countries but has an important "North-South" tional satellite communications can best be un- dimension as wel1.76 The general issue is whether derstood in the organizational context in which the United States should attempt to derive the the Unites. States participates with other coun- benefits of the free market in international tele tries in operating and regulating the international communications, as it does in most other indus- satellite communications system. tries, even if other countries are opposed to competition. U.S. Participation in International The most contentious specific issue at present Organizations Concerned With is whether the United States should allow the en- Telecommunications try of U.S. firms into transatlantic satellite r:om- mun ications in full or partial competition with kke In international satellite communications, the International Telecommunications Satellite Orga United States interacts with other nations both t,rough bilateral diplomacy and within international institutions. Outside of North America, for- '4"International regulatory regime" is defined in note 6 abc,ve mal bilateral telecommunications service agree- in this chapter ments of any substance between the United '5For a treatment of how certain aspects of the international reg- States and other governments are rare, but bi- ulatory regime affecting frequency allocations evolved, see 9avid M Leive, International Telecommunications and Internation II Law The Regulation of the Radio Soectrum, Oceana Publicatie is, 1970 '6A currently controversial issue within INTELSAT is the concern that less developed countries have about the impact of competi- "Presidential Determination No. 85.2, Nov 28, 1984 This has tion in the North Atlantic on the present global averaging of the been elaborated in Departments of State and Commerce, "A white INTELSAT unit charge Paper on New International Satellite Systems," op. cit. 178 170 International Cooperation and Competition ,Civilian Space Activities

lateral activity takes place short of fog nalagree- The ITU and Other Specialized ments. In addition to according representation United Nations Agencies to U.S. commercial interests, the Government is diplomatically active in connection with its par- The first four organizations in the above listare ticipation in the activities and meetings of inter- within the United Nationsgroup of organizations national organizations. and, if voting takes place, operate within the rules Such organizations include: of one-nation-one-vote typical of such organizations. They perform the international regulatory 1. International Telecommunication Union functions of setting the legal framework for the (ITU): use of space, setting telecommunications stand- Consultative Committee on Radio 'CC! R) ards, allocating radio frequencies, and allotting Consultative Committee on Telephone positions in the geostationary orbit. The domi- and Telegraph (CCITT) nant po!itics of such organizations is the general World Administrative Radio Conferences politics of "North-South" relations between the (WARC) industrialized and the developing nations. Regional Administrative Radio Confer- ence- (RARC) Superimposed on the North-South politicsare international FrequencyRegistration the East-We3t politics of Soviet-U.S. confronta- Board (IFRB) tion and the "North-North" alliance-cum-compe- 2. United N.,Vons Committee on the Peaceful tition politics of the industrial countries." When Uses of Outer Space (COPUOS)/United Na- substantive regulatory decisionsare taken in regular or special meetings of the ITU tions General Assembly or other specialized U.N. bodies, the general practice of the 3. United Nations Educational, Scientific and Cultural Organization (UNESCO) [United pa3t has been to develop as much consensusas States withdrew at the end cf 11)14]: possible on conventions to be submitted togov- International Program for the D.:velop- ernments for ratification." ment of Communication (IPDC) At ITU meetir.:s, many votes are taken, butto 4. Universal Postal Union preseme the consensus on bask issues, &legates 5. International Telecommunication' Satellite usually agree to reschedule unresolved ajor is- Organization (INTELSAT) sues for later reso!ution. Certain significant issues 6. International Maritime Satellite Organization dealing with the allotment of tr. geostationary (I NMARSAT) orbit, for instance, were not dealt pith at the 1979 7. Organization for Economic Cooperation and World Admin. trative Radio Conference (WARC) Development (OECD): of the ITU be zause of their controversiality. In- Committee on Information, Computer, stead, the issues were put off for future consid- and Communicaticis Policy (ICCP) eration!" After limited discussion at WARC '79, 8. North Atlantic Consultat.ve Process (NACP):78 European Conference for Post and Tele- communications (CEPT) "Within the industrialized country groi.p, the CEPT countries often cone itute a European regional bloc in telecommunications 9. Organization of American States (OAS): matters La Conferencia Interamericana de Tele- "In COPUOS, consensus operation is taken to the evIterne in comunicaciones (CITEL) that voting, even unanimous voting, is,not z rraotirc. Unre' *fed issues either stay unresolved or al,. passed on to the Special Politi- cal Committee and the General Assembly. This does not always guarantee a lack of contentiousness; the United States in 1984, for instance, walked out of a COPUOS debate on the militarization '"While not a formal organization, the North Atlantic Consultative of space on the grounds that it was the wrong forum and the U.S. Prx ss is an organized effort involving the Eurooeao PTTs, U S. delegate indicated that it waii considering quitting the committee International Service Carriers, the Federal Communi. icons Com- over the issue (Washington Post, June 15, 1984, p. A28). mission and other U 5 and foreign governmental entities in ongo- "'The issue of planning the geostationary orbit was also aired at ing facilities planning activities There is an even more informal Pa- Cie UN1SPACE '82 conference, without being resolved. (Unispare cific Planning Process '82: A Context for Cooperation and Competition, op. cit.)

179 Ch. 6Satellite Communications 171 where the cont. ntiousness of the issues became achievable consensus. But there may also be the apparent, the delegates decided to schedule a economic benefits of continued orderly commu- special WARC to consider them (see below). nications that could not otherwise be ensured. In recent years, a trend toward the politiciza- Looked at from another angle, the United States tion of the specialized United Nations agencies, might have to shoulder significant political costs including those that deal with international sat- in order to persuade reluctant delegates to adhere ellite communications, has emerged to threaten to a consensus that benefits the United States. the consensus mode of operation. For instance, Thus, there could be significant costs to a policy at the ITU plenipotentiary in Nairobi in 1982, after of building and adhering to consensus within the a maximum worldwide diplomatic effort by the ITU and other international organizations. On the United States and its allies and an explicit U.S. other hand, confrontation in these fora, or with- threat to withdraw from the ITU, a key proce- drawal from them, could also have large econom- dural question bearing on the attempted expul- ic and political costs. sion of Israel nevertheless almost attracted a Effectively balancing these costs has been a dif- majority and failed by a scant four votes.82 In ficult assignment for the diffuse and frequently UNESCO, another forum in which telecommu- ad hoc U.S. policymaking apparatus in interna- nications issues are discdssed, politicization was tional telecommunications. On the one hand, one issue cited by the United States when it with- policymakers must have effective knowledge drew at the end of 1984.83 about the telecommunications and space sectors Both the politicization of internat. al fora and and the importance of substantive matters. On the countervailirg threats of the L., ...c1 States to the other, they must also have knowledge of the withdraw threaten the cooperative operation of full international economic context of the United international organizations, including the ITU and States, the connections of telecommunications other organizations dealing with satellite commu- negotiations to this context, and the diplomatic nications. In addition to this general politiciza- costs of accommodation or confrontation. U.S. tion and tPU.S. reaction to it, certain factions diplomacy, however, has often not been in- composed of developing countries may be it,- formed by all these requisite skills." ci easingly willing to violate he consensus-building mode of operation strictly on telecommunica- Regional Organizations or tions issues. For both these reasons, the United Suborganizations in the Americas States may, therefore, face difficult decisions in Dealing With Satellite Communications the coming de-ade if it should find itseil on the Two entities deal solely with Western Hemi- k 'nog side in votes taken on contentious telecom- sphere communications matters: CITEL (affiliated munications issues. with the Organization of Americ, n States) and The basic calculation implicit in U S. partici- the ITU Region 2 Regional Adm.,: listrative Radio pation is whether the net benefits are positive Conferences, which are ht.:,.1 periodically. Given (when all the linkages with other issues and nk.- their framework of one-nation-one-vote, they ex- gotiations are considered). Economic costshigh- hibit similar characteristics to those of the full ITU er than necessary communications costs for U.S. and other international fora that are similarly residents and less of an a -ray of servicesmay organized. result from the regulatory arrangements of an

2As of December 1984, the ITU had 158 members (source. U.S "See U.S. Congress, Office of Technology Assessment, RaOsofre- State Department, Office of International Communications Policy). quency Use and Management: Impacts From the World Adminis- 'For a discussion of varic..., U.S. and foreign points of view on trative Radio Conference of 1979 (Washington, DC: U.S. Govern- the withdrawal see "World Forum: the U.S. decision to withd.aw ment Printing Office, January 1982); and UNISPACE '82: A Context from UNESCO," Journal of Communication, vol. 34, autumn 1984, for I ,ternational Cooperation and Competition, op. cit. See also pp. 81-179; and Lois McHugh, U 5 Withdrawal From the Interna- Simon Jenkins, "A Diplomat Now Needs E'pertise Rather Than Ex- tional Labor Organization. Successf-. Precedent for UNESCO?" perience," Listener, vol. 111, Mar. 22, 1984, pp. 2-4 for a discus- Congressional Research Service Repc,1 No. 84-202, Nov. 8, 1984. sion of the diplomacy needed in modern foreign relations. 1 o 172 International Cooridol, and Competition in Civilian Space Activities

Weighted Voting Institutions however, are ,nfluenced by its juridical voting Two international institutions in the satellite power and not just by its diplomatic efforts. communications areaINTELSAT and INMARSAT8, It would therefore be expected that North- are controlled through a process of weighted South issues would he muted in INTELSAT, and voting and hence exhibit different institutional this is usually the case. For this reason and be- characteristics from the U.N. or regional organi- cause they must manage INTELSAT as a function- zations.85 ing commercial entity, developing-country mem- While INTELSAT is an operating organization bers have incentives to keep politicization to a that provides almost all of the world's interna- minimum. Nevertheless, because INTELSAT is in- tional sateliite communications capacity, it can creasingly likely to be a locus of "North-North" also be viewed as an intergovernmental organiza- deregulatory and trade controversies among the industrial countries, and because developing tion whose board of governors establishe'x)Ii- cies affecting the two-thirds of intercont' ental countries may be receiving benefits from cross communications that pass through its transpond- subsidization (through a process called "global averaging"),87 the future of INTELSAT is likely to ers. In this limited sense, INTELSAT isne of the key elements in the regulation of international become a North-North and North-South question at the same time. communications. In INTELSAT's board of governors, a country's voting power is determined by INMARSAT, a second international sateiliteor- its volume of communications on the INTELSAT 3anization, which was established in 1976 and system. Because they re the big users, a small commenced service in 1982, arms to increase the coalition of the United States and a few industri- efficiency and safety of marine transportation by al countries can muster a majority of votes (see p .. 4ing effective communications.88 Unlike table 6-5, above, and app. 6C of this chapter). IN ELSAT, INMARSAT does not currently own Nevertheless, non-unanimous votes are rare. its own satellites; instead, it leases c.r is commit- Consensus is still the norm in INTELSAT. The con- ted to lease capacity from MARISAT (e jointven- sensuses the United States adheres to in INTELSAT, ture of U.S. communications carriers), ESA and JsIn the Communications Satellite Act of 1962, Congress set basic INTELSAT." To date, it has not been an impor- goals for int

'°Conversations with industry sources in 1983. See below, p. 192. provide an opportunity to fine-tune decisions "U.S.S.I: May Join INTELSAT Consortium Within 2 ',ears," reached at ORB-85.94 Washington Post, Mar. 13, 1985, p 1; "Fingerprints on the Self- Destruct Button," Chronicle of International Communication, "international Regulatory Regime" is defined in note 30 above

March 1985, p. 1 in this chapter. ' =Membership includes the United States, Canada, Japan, Aus- "See A. M. Rutkowski, "1 he Space WARC," Telecommunica- tralia, New Zealand, and the governments of all European Indus. tons, January 1984 and "Space WARC Momentum Builds," Chroni- trial market economies. cle of International Communication, October 1984, vol. 5, No 8.

1 8 2 174 international Cooperation and Competition in Civilian Space Activities

The conference is being taken seriously by the U.S. Government.95 The United States not only has important specific satellite communications interests relating to the geostationary orbit, but, since ITU decisions on how frequenciesare allocated affect the full range of U.S. civilian and military communications, the United States also has an important general interest in the successful operation of the conference and of the ITUgen- erally. Alternatives to even a poorly functioning ITU all 'nave serious disadvantages from the U.S. point of view.96

Potential Western Hemisphere Crowding Important to U.S. Satel;ite Communications Operators In the geostationary arc above the Western Hemisphere, the problem of actual scarcitymay arise at the end of this decade, depending principally on the demand for U.S. domestic satellite communications. In the preferred C and Ku bands, many of the most desirable slots for U.S. communications satellites are already taken. As of January 1984, there were 44 satel'iles in orbit or assigned orbital locations by the Federal Com- munications Commission for laud.ch prior to 1988.97 There may come a time in the not too distant future, depending on how rapidly U.S. domestic satellite communications expands, when close substitutes for desired C (6/4 GHz) and Ku (14/12 GHz) band slots will not be obtainable unlessa satellite currently in orbit is deactivated. A study crowding would be less or, with low demand, done recently for NASA by Western Union Tele- might not occur at all. graph Co. concluded that crowding in the C and Ku bands will be such that slots in the higher fre- The issue for the United States at Space WARC quency Ka band (30/20 GHz) will be needed for is that crowding in the C and Ku bands woule U.S. domestic communications starting in the occur sooner under an institutional arrangement early 19905.98 The conclusions were basedon favored by many less developed countries in and rapidly expanding demand for domestic satellite out of tl-c. Americas. In various versions this communications. If it does not materialize, the would essentially assign future rights to thegeo- stationary orbit to individual countries, utilizing ,sSee, e.g., FCC, First Reoort and Order in the matter of ORB- 851, FCC 85-94, released Mar. 1, 1985. an a priori planning process to do so. The availa- For additional discussion of policy options regarding U.S. par- bility of geostationary arc locations for the United ticipation in the ITU, see ibid. and Leslie Milk and Allen Weinstein, "United States Participation in the International Telecommunica- States for C and Ku band transmission could be tion Union. A Study of Policy Alternatives," paper prepared for the reduced, under such a scheme, because particu- Department of State as part of its external researchprogram, lar slots would be reserved prior to use and might undated. "FCC, "United States Domestic Satellite Summary," unpublished po. Executive Summary, NASA Contractor Report 168145, August table, Jan 11, 1984 1981, p. 4-1. Ka band (30/20 GHz) commercial satellites are not 90Western Union Telegraph Co., Government Systems Division, yet in service in the United States, although several are proposed "Satellite Provided Fixed Communications Services: A Forecast of for launch in the late 1980s. Because of its size and current nonuti- Potential Domestic Demand Through the Year 2000," Final Re- lization, the possibility of crowding in the Ka band is distant. 18J Ch. 6Satellite Communications 175

be unused for lengthy periods of time.99 Under bit for C and Ku band transmissions, such as fre- the current system of registration and coordina- quency reuse, better station keeping, shaped tion, slots are not reserved but are made avail- beams, scanning spot beams, superior ground able on a first-come-first-served basis. equipment, and closer spacing are likely to put off the day of scarcity in these bands for the fore- It is, of course, possible that under an a priori seeable future.10° (This is contradicted by the scheme slots could be made available to U.S. sat- Western Union study, which states that such ellite operators by the countries to which they scarcity may arrive in the early 1990s.) Further- were allotted, on a rental basis or under an ar- more, the United States has argued, the availabil- rangement whereby capacity on U.S. satellites ity of the very high capacity Ka band (30/20 GHz) was exchanged for the right to use the slots. These for satellite tnsmission reduces the importance arrangements, even if they could be made, would of potential crowding in the lower frequency undoubtedly have direct financial costs and also bands. When scarcity does arrive for the C and indirect costs whenever the arrangements re Ku bands, satellite communications can begin to suited in decreased flexibility. be transmitted in the higher frequencies of the Thus, whether reserved slots would be made Ka band. available to U.S. satellite operators under rental Representatives from developing countries or other arrangements or not, the economic issue have pointed out, however, that satellite systems for the United States in Space WARC is still the transmitting in the lower frequency C and Ku possibility of both an increase in the cost and a bands are less costly at given satellite power levels reduction in the effectiveness of its use of the and less technically demanding than satellite sys- geostationary orbit ir, the C and Ku bands. tems transmitting and receiving at higher frequen- A somewhat different consideration is that if cies. The space segment technology for transmis- some a priori arrangement did come into force sion in these bands 'particularly the C band in the 1990s for the C and Ku bands, the United technology) is now widely known and ground sta- States would have a stake in trying to assure that tions to receive this transm,Jsion are less costly the ground equipment associated with retired sat- than those designed for receiving transmissions Jlites would not be made artificially obsolete. at higher frequencies. As such they are more suit- This could happen if no appropriate slot; would able for the rural and remote area communica- be assigned for replacement satellites tc utilize tions that are thought to be an important satellite it. Under current ITU [International Frequency communications contribution to rural develop- Registration Board] rules, the problem would not ment in developing countries. arise in most circumstances, since a replacement Developing country representatives 'nave also satellite with the same technical characteristics stated that the nresent first-come-first-',erved sys- as a defunct one can be placed in the same slot tem allows the industrial countries to exploit a without a need to go through the complete IFRB scarce global resource that is the "common her- registration process. itage of mankind" and, this being the case, deve:oping countries should also benefit from the Access to the Lower Frequency common heritage by using it or profiting from its Satellite Transmission Bands Important to Developing Countries use.'"' They fear that if first-come-first-served assignment of orbital slots continues in the C and The United States argued at "e UNISPACE '82 Ku bands, the industrial countries will have made conference that technological aov., -es that allow more intensive use of the geostatio:..ry or- '°°See Unispace '82: A Cc ,text h. !nternationai Cooperation and Competition, op. cit. 101Taking a different approach, certain equatoria: countries have "Such an a priori allatmen! scheme was actually incorporated claimed (without much international support) that the geostationary in the 1977 Broadcasting -Sari llrte Plan for ITU Regions 1 and 3. orbit above their territories is within their national jurisdictions. In It arbitrarily allotted a minimum of four or five transmission links 1976, seven equatorial states, including Colimbia, Ecuador, and to every country irrespective of any requirements (FCC, op. cit. Indonesia signed the Bogota Declaration claiming sovereignty over Mar. 1, 1985, p. 43, note 127). portions of the geostationary arc. 1s 176 International Cooperation and Competition in Civilian Space Activities substantial further investments in ground equip- Close Substitutes to C and Ku Band ment appropriate to those bands. The existence Satellite Transmission Set Limits on of this investment will then constitute an argu- the Economic Cost of Crowding ment for renewing the supposedly temporary assignments, and the developing countries will Fortuitously, at the same time that potential have lost out permanently.'02 The developing- crowding in the geostationary orbit has appeared, country proposals for a system of a priori allot- it has also become apparent that that the United ment of orbital slots are based on these ideas of States can expect to have two important close common heritage and equitable access. substitutes for satellite capacity in the C and Vu bands in the 1990s: A Priori Planning Would Tend to Increase 1. satellites transmitting in the large Ka band Crowding in the Geostationary Orbit (30/20 GHz), which, howeier, requires more The United States has an important stake in sophisticated satellites ana srotind-segment Space WARE Any a priori planning system to as- equipment;'03 and sign the r _ming orbital slots in these bands 2. the developing domestic and international (plus pr' ..ously occupied slots that become va- fiber optic cable network.1°" cant) would tend to increase the crowding al- The existence of these two substitutes clearly ready experienced by U.S. communications car- limits the potential economic damage to the riers in the C and Ku bands, if it should place a United States of losing C and Ku band capacity. significant number of slots out of their reach. (It Ka band capacity, which has yet to be fully de- should be noted that any allotment scheme developed, will probably be somewhat more costly cided on by ORB-85 and implemented in detail than that in the C and Ku bands, since, for many in ORB-86 would not take affect until 1989 at the applications, more sophisticated satellites and earliest.) By then almost all of the slots above the Earth stations will be required to avoid significant Western Hemisphere that are desirable for U.S. effects from the rain attenuation of satellite sig- dr iestic communications may well have already nals. For certain high-volume uses, there is a pos- been occupied (mainly by U.S. domestic sat- sibility that Ka band technology, when it has been ellites). developed sufficiently, may be more cost effec- If both U.S. launch schedules and the Space tive than C or Ku band technology, or that the WARC schedule are maintained, the question of penalty will be very slight, but there seems to be greatest economic importance to the United general agreement that there will be some cost States would seem to be whether slots then oc- penalty in most cases for U.S. carriers to substi- cupied by U.S. satellites would be reassigned to tute Ka band transmission for that in the C and other countries when U.S. satellites are decom- Ku bands. missioned. Other countries will, of course, be There also is general agreement that the emerg- aware of the possibility that U.S. satellites may ing fiber optic domestic and international cable occupy most of the desirable slots before a plan- networks will be fully competitive with satellites ning scheme could go into effect under the pres- using C and I( 'band technology and may in fact ent conference timetable. Their ORB-85 positions be technologically preferred (see discussion may, therefore, include proposals for early im- above and in app. 6A). A relative shift toward fi- plementat:on of any planning scheme adopted loSee the discussion below in this chapter of the NASA ACTS and rigid safeguads to stop first-come-first-served program. occupation of geostat' lnary slots by U.S. satel- '04While terrestrial networks are a dose substitute for satellites lites in the late 1980s. for ooint-to-point communications, and technically could distribute point-to-multipoint communications, tney would generally not be used for the latter, unless there were excess network capacity, wiThis argumem in fact, is made explicitly in an KC ORB-85 because of the long-run cost advantage satellites have for point- prepara'Jry docum sr t (FCC, op cit , Mar 1, 1985, pp 8, p 8) to-multi-point applications.

1S5 Ch. 6Satellite Communications 177 ber optic cable transmission for new domestic ternational arrangement on frequency assign- and international telecommunications capacity ments or orbital slots might bring into question is expected to take place in any case. Less avail- the availability of frequencies for military com- ability of C and Ku band capacity might simply munications. Consequently, there is understand- make this shift take place sooner or take place able concern in the U.S. military establishment to a greater extent than otherwise. Furthermore, about anything that might upset the international because of fiber optic efficiencies, there may not consensus on arrangements for frequency use. be a cost or service penalty for the shift. Again, The problem facing the U.S. deleg ition and the this is uncertain, because fiber optic technology is still evolving too rapidly to allow reliable cost Administration behind it will be to weigh the va- projections for the period beyond 1990, when rious aspects of this issue against each other. The Congress, in its oversight capacity and also be- any arrangements determined in Space WARC cause (in the Senate) it will have to decide wheth- would come into force. er or not to ratify any WARC agreement the It should be emphasized that the need for sub- United States has signed, will also have to weigh stitutes for C and Ku band capacity and any cost the consequences of various courses of action in to the United States of using them would only Space WARC. occur if serious crowding, in fact, did materialize in the two bands. Crowding might not materialize Assistance to Developing Countries if there were a major shift toward fiber optic and other terrestrial transmission modes for the types The issues involved in assistance to develop- of U.S. domestic communications now carried ing countries in the area of satellite communica- by satellite and if earlier projections of direct tions are complex and intertwined with general broadcasting demand prove high.10 development assistance issues. Should the United States use internationalinstitutions, such as Foreign Policy Linkage INTELSAT, the ITU, and the World Bank, as mechanisms for development assistance or would On the other side of the ledger, the foreign pol- bilateral U.S. Agency for Intemafonal Develop- icy cost that the United States would have to pay ment (AID) programs be more effective in achiev- for an isolated, combative stance at Space WARC ing U.S. objectives? Should Congress direct more against a priori Warming of he geostationary or- U.S. development-assistance resources into tele- bit must also be considered. Just as the U.S. in- communications or leave such decisions to AID fluence in any Space WARC consensus will de- and other agencies? pend on the wider influence that it exercises in North-South politics, so will a break in consen- Assistance Through INTELSAT's sus politics of Space WARC affect the ability of Operations the United States to furth?r its general foreign policy objectives.106 The Communications Satellite Act cf 1962 directed: The U.S. stance at Space WARC also involves a link with U.S. national defense communications ... care and attention ...toward providing requirements. Any breakdown in the current in- [satellite communications] services to economically less developed countries and areas as well losoirect broadcasting ventures have been holding back because as those more highly developed ...107 of competition from cable television and video cassettes, and the part of the spectrum reserved for this use may be available for other The INTELSAT Agreement speaks of extending uses. See "FCC Asked to Delay Radio Spectrum Shift," Washing- services to all peoples and to all areas of the ton Post, Apr. 9, 1985, p. 03. 10'One close-by linkage that may play a role in the outcome of world, and INTELSAT has brought many cities in the Space WARC sessions is the linkage with INTELSAT politics. the developing nations into the global satellite One study suggests a U.S. negotiating strategy that would utilize network.1°3 Developing countries with INTELSAT that linkage. See Wilson P. Dizard, "Space WARC and the Role of International Satellke Networks," Georgetown University Cen- ter for Strategic and International Studies, Washington, DC, August '"Communications Satellite Act of 1962, Sec. 102(b). 1984. 'ftSee Preamble to the Agreement, app. 6D of this chapter.

18 6 178 international Cooperation and Cnmpetition in Civilian Space Activities

Earth stations now no longer need to pay extra tion with other organizations, has proposed a 16- tariffs to route their international communications month satellite test and demonstration program to other developing countries through cable sys- to experiment with health and education pro- tems that pass through the industrialized coun- grams for populations in remote areas. INTELSAT tries. They also have the opportunity to lease would provide technical advice and free satel- spare INTELSAT capacity for domestic commu- lite transmission time using spare capacity.'" nications when terrestrial communications or satellite ownership are impractLa1.109 Assistance Through the ITU While the INTELSAT network has brought mod- The International TelecommunicatiGn Union ern communications to major cities in the devel- (ITU) is considering forming a Center for Tele- oping world, it has not met the needs of dispersed communications Development to assist develop- populations in rural areas or island territories, for ing countries. Such a center has been proposed example, in the Pacific, where small populations in the report of the Independent Commission for live in widely dispersed settlements in a dozen Worldwide Telecommunications Development sovereign nations and territories. INTELSAT Earth (informally known as the Maitland Commission), stations of current design are too expensive for which has been financially supported by the use in these contexts. Such expensive Earth sta- United States, other governments, and U.S. pri- tions are required because transponders of higher vate firms."3 The cente. would offer both gen- power than INTELSAT has deployed on its satel- eral advice and analysis on telecommunications lites are necessary to make possible small, inex- development and assistance in detailed project pensive ground terminals to handle one or two planning with the aim of "bringing all mankind telephone channe:s. within easy reach of a telephone by the early part The current smallest Earth terminals for of next century. "11 INTELSAT connection are expensive: the type While not opposing multilateral communica- (Std B) installed in Micronesia in 1982 cost $1.6 tions programs in general (e.g. World Commu- million. In an effort to make satellite communi- nications Year '83 and the Maitland Commission cations more widely available, the INTELSAT itself), the Reagan Administration has opposed Board of Governors approved in 1983 a new (Std channelling U.S. Government development as- D) class of small terminal for isolated areas. In sistance funds to any significant extent through one estimate, this terminal alone will still cost such programs."S Thus, itis not expected to about $60,000 initir lly."0 Even with significant budget more than minimal funding for the Cen- cost reductions whe. mass-produced, Earth stater and certainly does not favor funding it through tion costs of this magnitude, together with the a tax on international telecommunications traffic. cost of site preparation and other associated terrestrial facilities, would continue to put satellite communications via INTELSAT satellites out of the reach of most developing-country villages and towns."' Because of this, INTELSAT, in collabora-

,09INTELSAT also provides capacity for a number of developing countries' domestic satellite systems. As of 1983, some 30 developing or newly industrialized countries were leasing (or planning to lease by 1986) space segment capacity from INTELSAT. (J. N. Pelton, "INTELSAT: Making the Future Happen," Space Commu- "2Satelke News, Aug. 20, 1984. nications and Broadcasting, vol. 1, No. 1, April 1983 ) ""Independent Commission for World Wide Telecommunica- " °Aviation Week and Space Technology, Jan. 16, 1984,p. 203. tions Development, "The Missing Link," International Telecom- "1ln any case, INTELSAT's new low-density services will be useful munication Union, December 1984. See also Chronicle of Inter- in certain commercial applications. For instance, a low-density national Communications, August 1984, pp. 1.2, September 1984, INTELSAT Vista system, also using Std D-1 5-meter antennas, will pp. 1-3, and December 1984, p. 5. be used by a L1 S multinational oil company for communication "Independent Commission for World Wide Telecommunica- with its drill sites starting ;n 1985 (Thomas A. McIntyrr and Robert tions Development, op. cit., p. 5. H. Ember ley, "The Vista Link From Madagascar to Houston," Tele- "s"Cancelled Ticket to Arusha," Chronicle of Internatioisal Com- communications, April 1985, pp 64,-66q). munication, March 1985, p 1.

lily Ch. 6Satellite Communications 179

Assistance Through Multilateral Experiments) and in India (the Joint U.S.-India Ex- Lending Institutions periment in Educational Broadcasting), the ATS- 6 was used in a 3-month project (AIDSAT) by Developing countries spend approximately $8 billion per year on public telecommunications NASA and AID to show a number of other countries (27, in all) what was possible. The United plant (1983 figure cited in the Maitland Report 116). States and Canada later cooperated in the Ku- Most of the external finance for this expenditure band Communications Technology Satellite pro- comes from commercial sources, augmented by gram to demonstrate applications in education, officially supported export credit from exporter health, and specialized community services. countries. Only about $200 million per annum These programs were phased out beginning in comes from the World Bank; other regional lend- 1973 after the Nixon Administration decided that ing institutions, such as the Inter-American De- the Federal Government would no longer under- velopment Bank or the Asian Development Bank, take advanced technology development for com- are also not active ininancing telecommunications projects."' munications satellites or satellite demonstration programs. Some funding for Earth station dem- Using U.S. influence to encourage international onstration projects continues.'" lending institutions to give more emphasis to tele- In 1982, the United States established the U.S. communications lending is a multilateral alterna- Telecommunications Training Institute (USTTI) to tive to the proposed ITU center. Particularly in train developing country nationals in basic and the case of the World Bank, it would have the advanced telecommunications technologies and advantage of keeping telecommunications lend- management. USTTI is a nonprofit independent ing in the context of the Bank's ongoing country corporation administered by a board of directors development assistance programs."' It would representing both industry and government.12' also make use of its project analysis capabilities, Expenses of the training program. including travel its influential status with both developing coun- and living expenses, are shared among the Gov- try governments and industrial country lenders, ernment and the telecommunications companies and its relative freedom from politicization. on whose premises the training takes place.* The program is supported by such corporations as Bilateral Assistance AT&T, IBM, GTE, Western Union, MCI, and How to help bring the benefits of satellite com- COMSAT. Some 400 people from 65 developing munications technology to more people in de- countries were trained in 1983 and 1984, the first veloping nations is al5n a policy issue for U.S. 2 years of operation. As a result of the program, bilateral assistance programs."* graduates will be better informed about U.S. telecommunications products, and some may be in In the 1970s, the United States used its Applica- a position to influence procurement decisions.122 tions Technology Satellite series (particularly the highly capable ATS-6) and other programs to '"U.S. development assistance efforts in telecommunications in demonstrate some of the applications of commu- fiscal years 1983 and 1984 were estimated by the Academy of Educa- tional Development to exceed $422 million in loans and grants. nications satellites in health, education, and agri- These efforts, in addition to financing the purchase of U.S.-produced culture. After year-long experiments in the United equipment, trained 1,153 LDC participants, arranged at least 63 States (Health, Education, Telecommunications distinct techr ical assistance and traning programs, and served over 100 countriei. Twenty-five U.S. agencies had such activities, but only the Excort-Import Bank. Overseas Private Investment Corp., "'Independent Commission for World Wide Telecommunica Agency for International Development, and U.S. Information Agen- tions Development, op cit , p 57 cy made monetary estimates and these are included in the total. "'Ibid., app VII, p. 121. (Chronicle of Infemational Communication, September 1984, p. 7). "See Robert J. Saunders, Jeremy J. Watford, and Bjorn Wellenius, "'U.S. Telecommunications Training Institute, Course Catalog, Telecommunications and Economic Development, Worin Bank 1983 84. Publication, Johns Hopkins Press, Baltimore, 1983 for an exam- 'Travel and living expenses of participants are financed by a va- natior, of the issue3 Involved in World Bank lending for telecom. riety of source including AID, international institutions, and pri- munications. vat. firms. Participants from some high - income oil exporting court- "9frt discussion of these benefits can be found in ibid and in "De- tries receive support from sources in their own countries. velopment Communications," Policy Determination PD 10, U.S. "rThe President's Task Force on International Private Enterprise, Agency for Internatioral Development, Feb 17, 1984. Report to the President, December 1984, p. 114.

188 180 International Cooperation and Competition in Civilian Space Activities

The program is, in part, a response to telecom- International Trade in munications training programs conducted by Telecommunications Services training centers in France and Japan, which also combine development assistance with export The principal issues in the regulation of inter- promotion.'" national satellite communications services involve how much competition the United States should While AID anticipates substantial increase in seek and how aggressively it is prepared to seek support for communications activities, aside from it. Despite important deregulatory moves affect- the USTTI program and limited investment in ing the international arena, which have mostly communications infrastructure., it "does not ex- been offshoots of deregulatory actions in the pect to support communications as a distinct pro- newly competitive domestic market, the FCC and gram sector."124 It plans to focus its spending on the Reagan Administration have been rather cau- specific cost-effective communications applica- tious in extending (ieregulation directly into in- tions on a bilateral basis within projects in its prin- ternational communications. For the most part, cipal development sectors, agriculture, educa- ti.e foundations of the international communication, health, nutrition, and population. tions regime described above and in app. 6A, in With respect to developing country investment which competition is severely limited, have hard- in communications infrastructure, AID plans pri- ly been touched. As this discussion and that in marily to concentrate on providing technical app. 6A indicate, however, harbingers of change assistance and training that will help countries: are appearing in virtually every aspect of inter- 1) assess their technology needs both for specif- national satellite communications, as technologi- ic sectors or functions and for entire communi- cal and market forces begin to chip away at aging cations systems; 2) plan for infrastructure expan- regulatory structures. sion; and 3) develop operational and maintenance skills for existing as well as new infrastruc- Competition for INTELSAT ture, rather than to provide support for the ac- Competition for INTELSAT is a partial excep- quisition of such equipment as telephone switch- tion to this generalization. Currently INTELSAT ing systems, radio or television broadcasting has a near monopoly on intercontinental satel- facilities, or communications satellites and ground lite communications facilities, and the recent ex- stations. It takes this position because "other fi- ecutive branch decision to sponsor the entry of nancing mechanisms (both conventional and private U.S. satellite systems in competition with concessional) exist for communications infra- it is a purely international regulatory decision that structure." The door is not closed to "add-ons" did not grow out of domestic deregulation. of specialized equipment, such as satellite ground stations, though, which would extend the coun- In the Preamble of the INTELSAT Agreement try's communications systems in ways that would the contracting parties state that in establishing accomplish development objectives. INTELSAT their intention was: AID also does not intend to finance substan- ... to continuethe development of this tele- tial multilateral development activities in commu- communicatio ,s satellite system with the aim of nications and will avoid financing host country achieving a single global commercial telecom- participation fees or membership contributions munications satellite system as part of an im- in international organizations or regional/inter- proved global telecommunications network which will provide expanded telecommunica- national communications infrastructure. tions services to all areas of the world and which will contribute to world peace and understanding .125

"'Eli M Noam, "Telecommur.zations Policy on *.he Two Sides '24That goal was achieved- the original 1965 satell.te with one of the Atlantic Divergence and Outlook," op cit., pp 4-5 Earth station in the United States, another in Canada and a few "4"Development Communicatiors," Policy Determination PD in Europe had led to a system of 15 satellites in 1984, covering three 10, op cotp 5 ocean regions with 981 operating o: °proved Earth stations in 172

18d Ch 6Satellite Communications 181

The term "single global commercial" system process in Article XIV(d) of the agreement with implies to some that INTELSAT is to have a per- respect to proposed systems offering separate manent monopoly over virtually all international public international services, but are not obli- communications carried by satellite, while others gated by the agreement to do more than that (see see INTELSAT as only one element, a major one app. 60 of this chapter for the text of Article XIV to be sure, but only one, in the developing in- and related parts of the INTELSAT Agreement).127 ternational telecommunications industry, where The INTELSAT Assembly of Parties, a one-na- competition will also be an increasingly impor- tion-one-vote body, which ordinarily meets bien- tant principle. nially,is charged by Article XIV with making INTELSAT argues that it receives sufficient com- INTELSAT's recommendations to the parties (gov- petition from transoceanic cables and that this ernments) proposing to establish satellite systems competition between transmission media will in- separate from INTELSAT as to whether, in its tensify in the future as the TAT-8 and other fiber opinion, they will or will not cause significant eco- optic cables come into operation in the period nomic harm to INTELSAT.'" To date INTELSAT just before and after 1990.126 Any more competi- has approved at least some of the services to be tion from private satellite companies, in the offered by the four regional systems, usually on INTELSAT view, would further reduce the scale the grounds that the communications services to of INTELSAT's operations and raise the price of be carried would not to any significant extent INTELSAT's services, since its costs would be re- have been carried on INTELSAT, because they covered over a smaller volume of traffic. This would have been carried on terrestrial media in- judgment of higher prices, of course, would not stead, or not sent at all. The Palapa, Eutelsat; and hold true if a competiti. .?. market developed in Arabsat systems have been approved for this rea- which competition forced all sateliite prices son, even though they carry international mes- down, including INTELSAT's. sage telephone service and other communications of the type INTELSAT typically carries. INTELSAT officials fear that growing numbers of competitors to INTELSAT might result in the The development of a Western Hemisphere re- decline of the system and its eventual replace- gional system composed of satellites and Earth ment by poorly connected regional systems. Sev- stations owned by a diverse set of mostly private eral regional international satellite systems, de- entities rather than by a regional organization of scribed earlier in this chapter and in app. A, have governments, however, has been delayed for sev- recently emerged. All have been through or are eral years because of INTELSAT coordination dif- going through a process called the "INTELSAT ficulties. By March 1984, the FCC had condition- coordination process," in which proposed new ally approved a total of 114 applications for international satellite services are presented to regional international service in the Americas in- INTELSAT for a finding of whether they are tech- volving U.S. and Canadian domestic satellites, but nically compatible or in the case of "international public telecommunications services" whether they will cause it "significant economic harm." '27A recent Administration policy paper, however, asserts that the "United States is committed to ensuring that nonINTELSAT Parties to the INTELSAT Agreement, including the satellite systems are technically compatible with existing and United States, have bound themselves to go planned INTELSAT satellites and to avoiding significant economic through the somewhat cumbersome consultation harm to the global INTELSAT system (Departments of State and Commerce, "A White Paper on New International Satellite Sys- tems," op. cit., p. 17. countries or territories The number of telephone channels went '25The INTFLSAT coordination procedures and criteria of eco- from 150 to 60,000, while the annual tariff per voice halfcircuit nomic harm have not been fully developed, and guidelines are now went from $93,000 to $4,680 [in 1983 dollars] (INTELSAT Annual under consideration within INTELSAT. If the proposed services are Report, 1983, converted to 1983 dollars using the U.S. GNP international but not public, they fall under Article XIV(e); if they deft are public but domestic they are coordinated under Article XIV(c). 1. ,timony of Richard R. Co lino, Hearings Before the Subcom- The Assembly of Parties has as yet not adopted an official defini- mittee on Arms Control, Oceans, International Operations, and En- tion of "significant economic harm," the number of cases decided vironment, Senate Foreign Relations, 98th Cong., Oct. 19 and 31, have been few, and the findings to date have in almost all cases 1983, p 25 been in favor of the proposed systems.

L 0 1

INV 182 International Cooperation and Competition in Civilian Space Activities

Western Hemisphere system is unclear at present. All the current applications that the FCC has conditionally approved have been approved on the grounds that they will not divert traffic from INTELSAT or that using INTELSAT would be economically wasteful. At the present time, the U.S. Government (FCC and State Department) is taking the lead in overseeing the development of the Western Hemi- sphere regional system in response to market pressures, by: 1) approving applications of U.S. providers domestic satellite communications to provide "transborder" services; 2) establishing that the governments in the countries involved approve; and 3) carrying the bilaterally approved Photo credit: National Aeronauts and Spam Administration applications through the INTELSAT coordination Artist's conception of INTELSAT V, for which the U.S. process. company Ford Aerospace was the prime contractor. The key U.S. decisions about its policy toward INTELSAT will probably not be initially made on many of these were on hold awaiting State De- issues involving the Western Hemisphere, but partment, foreign government, or INTELSAT ac- rather on issues that concern what could poten- tion. As of March 31, 1985, the FCC had given tial!y develop into a North Atlantic regional sys- final approval to 46 applications for services to tem, if any of its components come into exist- Canada, Mexico, Central America, and the Carib- ence. As described above, six private U.S. bean. Although final approval has been given for companies have applied for permission to con- extended data and television services between struct and operate transatlantic communications the United States and Canada, the only services satellites. Two of these are large corporations with that have been approved for most of the other communications interestsRCA (through its RCA destinations are television receive-only transmis- Americom subsidiary) and United Brands (through sions."9 Thus, only part of the potentially large its Intel national Satellite, Inc. [ISI] subsidiary); four Western Hemisphere system is currently in place. smaller firmsOrion, Cygnus, Pan American Sat- In the future, this system could compete with ellite, and Financial Satellitehave also ap- I NTELSAT. plied.130 In response to this potential entry, INTELSAT has argued that open competition in Whether the INTELSAT coordination process transatlantic satellite communications facilities for the other conditionally .approved television could mean the breakup of the INTELSAT system, and data services will go smoothly and whether telephony will ever be a service carried on the

130Orton, PanAmSat, and Finansat do not plan to offer any com- m2'Coordination of even this limited competition represented a mon carrier services, but the other three applicants (RCA, United significant departure from the previous situation. Until the meeting Brands' 151, and Cygnus) have stated their desire to use some ca- of the INTELSAT Assembly of Parties in January 1985, only 13 serv- pacity for common carrier service, in addition to business and media ices had been given final approval by the FCC on the basis of services, which they state to be their primary offering. The satel- INTELSAT coordination and only to Canada, Bermuda, and the Cay- lites of other countries, including those owned by noncitizens (anal- man Islands. At the January meeting, 19 U.S. and 6 Canadian sat- ogous to flags of convenience in ocean shipping), are also poten- ellite systems were coordinated, involving data transmission to and tial entrants in transatlantic satellite communications. France and from Canada and television receive-only transmission to Mexico, the United Kingdom are constructing satellite systems that will be Bermuda, Bahamas and 17 Caribbean and Central American coun- capable of serving both sides of the Atlantic (the first French satel- tries and territories. Television services coordinated between Can- lite has already been placed in orbit) to connect them to their North ada and the U S., U.S. and Canada, and Mexico and the U.S.were American and Caribbean terntories. They have stated that they do point-to-point and point-to-multi-point in some cases. not intend to compete with INTELSAT

1 9 i Ch. 6Satellite Communications 183 which U.S. diplomacy worked long and hard to If the United States should take the applications put together in the first place."' or private transatlantic satellite systems through the INTELSAT coordination process in collabora- After many months delay, President Reagan in tion with one or more other governments, as the November 1984 determined that separate inter- executive branch now plans (providing the FCC are required in the national satellite systems conditionally approves the applications), and if national interest."' 32 However, in an attempt to they were rejected by INTELSAT for coordination, reduce the challenge to INTELSAT, the Admin- the stage would be set for one of the following istration set two criteria for the FCC to use in act- five processes: ing on the existing transatlantic satellite applications. U.S. denial of operating authority to all of

... to assure thatthe United States meets its the proposed systems. obligations as a Party to the Agreement Estab- Unilateral U.S. conditional approval of oper- lishing the International Telecommunications ating authority to some or all of them. (They Satellite Organization (INTELSAT): would then need to secure foreign connec- 1. each system is to be restricted to providing tion rights from foreign regulatory authori- services through the sale or long-term lease ties, with or without the good offices of the of transponders or space segment capacity U.S. Government.) for communications not interconnected with public-switched message networks (except Bilateral governmental negotiations with one for emergency restoration service); and, or more communications partners with the 2. one or more foreign authorities are to au- object of establishing bilateral regulatory thorize use of each system and enter into regimes that would allow the operation of consultation procedures with the U.S. party some or all of the systems, as well as systems under Article XIV(d) of the INTELSAT Agree- proposed by these partners. ment to ensure technical compatibility and Multilateral governmental negotiations out- to avoid significant economic harm.133 side of INTELSAT with the object of estab- As of this writing, neither the Administration's lishing a regional international regulatory nor the FCC's policy is clear concerning how regime for North Atlantic satellite commu- many transatlantic systems will be authorized, nications that would also allow the opera- how much capacity will be allowed, and, despite tion of some or all of the systems as well as the interconnection prohibition, what the con- systems proposed by parties to the negoti- ditions on resale will be. Even if stringent con- ations. nection and resale conditions were enforced, Multilateral negotiations within INTELSAT to users of these systems would undoubtedly with- amend Article XIV(d) so as to permit certain draw a nontrivial amount of transatlantic traffic alternative satellite systems even though the from INTELSAT and send it via their own trans- permitted services might cause some degree ponders (what they carry would not all be new of "economic harm." demand). Hence, it is not clear that any of the Because the applications to provide interna- systems would satisfy the as yet ill-defined cri- tional satellite communications involve facilities terion of avoiding significant harm to INTELSAT. "4 competition and, in the case of transborder and transatlantic business services, the possibility of '3'See written testimony (dated Nov. 14, 1983) of Richard D. Col- single-vendor, dish-to-dish service, they provide ino, Director-General of INTELSAT, before the Subcommittee on a strong challenge to the current international reg- Arms Control, Oceans, Intel national Operations, and Environment, Senate Foreign Relations mmittee, Oct. 19, 1983. ulatory order."' Free markets in telecommunica- 132Presidential Determination No. 85-2, Nov. 28, 1984. '33Letter of the Secretaries of Commerce and State to the Chair- man of the Federal Communications Commission, Nov. 28, 1984 13,The uniqueness of international communications arrangements 134The FCC inquiry will evaluate what economic effects the new is not always appreciated. "Single-vendor service" is now the norm systems would have on INTELSAT. (Mark S. Fowler, Statement on in U.S domestic long-distance communications and always has New International Communications Satellite Systems at Hearings been in virtually all other markets in the U.S. economy, and even Before, U.S. Congress, House, Hearings on International Satellite in most other international service markets. Single-vendor service, Issues before the Subcommittee on Telecommunications, Consumer however, is not the norm in international telecommunications serv- Protection, and Finance, Apr 3, 1985.) ice markets. U S. basic telecommunications providers (and those

38-797 0 - 85 - 7: 0. 3 elrl 1 184 International Cooperation and Competition in Civilian Space Activities

tions are not considered desirable bymost tele- INTELSAT officials also maintain that INTELSAT communications partners of the United States. now significantly subsidizes satellite communi- Consequently, U.S. moves that attempt to in- cations for developing countries bymeans of crease competition in the provision of interna- averaged rates, but this is contradicted by anal- tionai facilities are likely to engender conflict with yses sponsored by the Orion Satellite Corp.138 If some of our telecommunications partners in Eur- there is a substantial cross-subsidy, then INTELSAT's ope, Japan, and elsewhere.136 loss of revenues to competitors could lead itto In transatlantic telecommunications, U.S.ap- raise rates for developing countries. Developing proval of the six satellite applications, without countries' displeasure over this, in turn, might prior agreement by all its major Europeancom- then affect U.S. foreign policy interests. munications partners, would amount to a maior A representative of one of the would-benew modification in the multilateral me,-.:hanism, entrants suggested in testimony to Congress that the North Atlantic Consultative Process and consumers, in fact, would gain a number of ben- INTELSATthat have been used in recentyears efits from competition to INTELSAT: advancing to coordinate facilities decisions in that geographi- the general U.S. policy of favoring competitive cal sector. (The Administration's recr_ 'L. / adopted markets, creating new markets, introducingnew policy requires only that "one or more" foreign and more flexible services, loweringprices, and authorities authorize new systems and bein- stimulating new technolegy.139 Theargument volved in the INTELSAT coordinationproce- about the stimulative effects of competition (from dures.137) Approval of the private cable applica- alternative satellite or cable providers) is plausibly tions would have a similar effect. If any U.S. supported (at least prima facie) by INTELSAT'san- moves to increase facilities competition should nouncement in October 1983 that it would accel- successfully obtain the collaboration ofone or erate the introduction of its "INTELSAT Business more U.S. communications partners, major changes Service," offering firms facilities for dedicated in- in INTELSAT operations, as the consortiumat- ternationalsatellite telecommunications net- tempted to adapt to thenew competitive envi- works-14° ronment, might be required. The principles that are employed in taking action in the case of the Facilities Planning transatlantic applications will also seta precedent for similar Western Hemisphere and transpacific Beyond the issue of satellite competitionto facilities. INTELSAT from private U.S. satellite systems, If INTELSAT were in fact significantly damaged, then the United States would be blamed, justifi- ably or not, for helping to ruin the ""The existence and importance ofa cross subsidy to develop- cooperative ing countries through the INTELSAT system is a complex issue that mechanism it had been instrumental in creating. has been addressed in testimony before Congress bywitnesses pre- U.S. telecommunications users might also lose senting material developed for INTELSAT and Orion SatelliteCorp. from higher rates andpoorer service, if the suc- See, e.g , Kenneth R. Dunmore, HatfieldAssociates, "An Analysis of the INTELSAT Subsidy Issue," August 1983 and"Issues in Inter- cessor system performed poorly. national Telecommunications Pricing and Demand,"Nov. 27, 1984, both prepared for Orion Satellite Corp; Walter Henchman Associ- ates, Inc , "The Economics of International Satellite Communica- tions," May 18, 1984, prepared for INTELSAT. 1 he principalana lytical questions revolve around what satellite capitalcost should be assigned to different world regions, of other countries) are not free to offer single-vendor service in most considering that satellites are movable, and the efficiency of transponder use when international markets ft e a single , to offer end-to-end communications serv- transponder is used by more than ice over their own owned or leased networks) one country. "'Testimony of William L. Fishman (International Satellite, 'I'See National Telecommunications and Information Adminis- Inc.), International Communication and Information Policy,op. cit., p. tration, Telecommunications Policies in Seventeen Countries Pros- 280 pects for Future Competitive Access, May 1983 for a survey ofcoun- try policies Also Eli M Noam, "Telecommunications Policy 14°See Connections World Communications Report, published on the by The Economist and Television Digest, Oct. Two Sides of the Atlantic Divergence and Outlook," op cit 27, 1983, p. 2 and Broadcasting, July 4, 1983, p. 67 This conclusionwas also reached "'Letter of the Secretaries of Commerce and State to the Chair- in the Departments of State and Commerce "A White man of the Federal Communications Commission, Nov 28, 1984 Paper on New International Satellite Systems,"op at , p. 51.

1 93 Ch. 6Satellite Communications 185 there are two broader issues in facilities regu- costs of using cables. Once the distortion of in- lation: centives became apparent, the FCC decided to ameliorate the situation through additional reg- 1. Does the United States need to develop new ulation to limit the cable capacity of carriers and international regulatory mechanisms to bal- to secure the balanced use of the satellite and ance the use and/or construction of satellite cable facilities in existence. and cable facilities? 2. Should U.S. regulatory authorities be con- The FCC is currently considering what circuit cerned with the possibility of overcapacity distribution and facilities planning policies to im- in transatlantic telecommunications facilities? plement in the 1985-95 period and has tentatively concluded that only AT&T's message telephone Restrictions on facilities construction, owner- traffic should be forced to conform to a circuit ship, and use are key elements in the present in- distribution scheme during the period (all other ternational communications regulatory structure carriers and AT&T's record traffic would be e> - and are the elements currently most under chal- empt)."' It also tentatively concluded that AT&T lenge. Carriers or other firms wishing to construct, should be gradually allowed to raise the propor- purchase, or operate international communication of its message telephone traffic transmitted tions facilities are not free simply to do so. They by cable to 60 percent by 1991 (up from 48 per- must apply to the FCC for authority, and the Com- cent in 1984). Based on AT&T projections, the mission has often used its power to delay or deny FCC analysis is that this would allow AT&T to send such applications on a variety of grounds. For in- 72 percent of its 1991 traffic growth by cable and stance, in 1984 the Commission decided not to wolild reduce INTELSAT's revenues by $33 mil- allow firms to gain direct ownership access to lion in the same year.142 INTELSAT, and private U.S. firms have not yet been allowed to own satellites for use in inter- The FCC has also recently altered the regula- national communications, except within the lim- tory structure to change COMSAT's special role ited Western Hemisphere regional system. (See in the ownership of INTELSAT Earth stations. Pre- app. 6A for further discussion of the issues in this viously, the U.S. international service carriers had section.) been locked in a mandated Earth Station Owner- ship Committee Consortium with COMSAT. The FCC also restricts the U.S. international COMSAT owned 50 percent of the Earth stations service carriers in their use of communications and the carriers owned the rest. Now there is a facilities. In practice, this has meant that AT&T COMSAT tariff purely for space segment services, and otner carriers have been required or induced and the carriers (and other users) are free, as they to divide their transatlantic traffic between cables see fit, to own their own Earth station facilities and satellites in approximately equal parts. Al- and incorporate them in their rate bases or, alter- though the Communications Satellite Act of 1962 natively, to lease Earth station capacity from and the INTELSAT Agreement of 1973 endeav- COMSAT or other owners. One effect of the new ored to promote the use of satellites, incentives FCC Earth station policy is to reduce (in only a set up by the Act and the Agreement and by reg- moderate way, however) the bias of U.S. carriers ulations based on them have had just the oppo- toward cables. site effect. Because the would-be satellite entrants arrived This paradoxical outcome occured because, on the scene first, and because an intergovern- under U.S. regulation, carriers have an incentive to invest in and use their own cables in preference to satellite circuits leased from COMSAT, "'FCC, "Second Notice of Proposed Rulemaking In the Matter of Authorization of Common Carrier Facilities to Meet North particularly at times of day and during seasons Atlantic Telecommunications Needs During the 1985-1995 Period," and periods when there is surplus cable capac- op. cit., pp. 20-32. ity. These reasonE involve the impacts of return - '42Derived from ibid., table following p. 34. The reduction in INTELSAT's revenues is in comparison with the "balanced load- on- rate -base regulation, the tax code, and the fact ing" circuit Atribution scheme used by the FCC at times in the that COMSAT's tariff is greater than the variable past (see note 46, p 161, for a definition of balanced loading).

194 186 International Cooperation and Competition in Civilian Space Activities mental organizatic.n (and its financial health) are imperfectly competitive transatlantic telecommu- involved, much of the public discussion has cen- nications market for unrestricted freedom to in- tered around satellite entry in competition with vest to result in chronic overcapacity. A case INTELSAT. In late 1984, however, the FCC re- could be made for facilities regulation, if consum- ceived two transatlantic cable landing applica- ers, rather than investors, would suffer the con- tions that may pose an even greater threat to the sequences of over-investment by having to pay current regu!atory regime and, consequently, to higher prices. This could occur if investing car- INTELSAT. -They propose to add an estimated riers would be able to recoup losses from any total of 330,000 voice-equivalent circuits in pri- "white elephants" by persuading regulators to vate fiber optic cables by 1990, four times the esti- allow high prices and restrict the capacity in use. mated 80,000 combined capacity of the TAT-8 Regulation of price and of the use of capacity and TAT-9 cables that he consortium of the creates an effective cartel, and facilities owners North Atlantic carriers has discussed in the North might be able to avoid the competitive conse- Atlantic Consultative Process. By itself, the capac quences of over capacity investment and still earn ity proposed by the two new cable applicants is high returns (supposing that demand responsive- approximately four times the carrier demand fore- ness would not prevent it). The primary justifica- casts for 1995.143 tion for facilities regulation, thus, is that price and Such major capacity additions obviously raise capacity-use regulation can be even worse. U.S. the possibility of substantial overcapacity (dis- use of facilities regulation can also be justified if cussed below), and they also threaten both the price and capacity-use regulation is imposed by foreign authorities. cable-consortium mechanism, which has heretofore built all transatlantic cables, and an interna- Considering the announced plans and the national "institution," the North Atlantic Consul- ture of the actual participants in the transatlan- tative Process. Once again, the challenge comes tic service market, there is some realistic possi- ostensibly in business communications, although bility that the supply of transatlantic capacity, in the organizers of Submarine Lightwave Cable Co. the absence of controls on construction, could do not exclude sales of capacity to common car- far exceed the demand for it in the 1990s. If all riers like MCI. One of the two cable facilities is the proposed capacity additions were actually proposed by a major foreign carrier, Cable & constructed, capacity in 1992 would amount to Wireless Ltd. (with U.S. venture capital partners) about 650,000 voice-equivalent circuits,144 com- and therefore also raises questions of internation- pared to current expected demand (about 20,000 al service competition in the United States. circuits in 1985) and the transatlantic demand These large proposed capacity additionsfar forecasts of the U.S. international service carriers in excess of demand projectionspose the ques- (USISCs) and the European CEPT carriers for tion of whether there is a built-in tendency in the 1995. Both of these 1995 forecasts are for approximately 82,000 voice-equivalent circuits (tables 141The TAT-8 cable (owned Jointly by AT&T, other U S interna- 6A-1 and 6A-3, app. 6A). Taking all estimates at tional service carriers, and European PTTs) was approved by the FCC in 1984 A similar TAT9 cable is proposed by the consortium face value, the construction of the proposed fa- for 1992 The new cable applicants are 1) Tel-Optik Ltd (the U S cilities would result in a very large excess supply. venture capital partner of Cable & Wireless, Ltd , a British telecommunications carrier), which has applied to build two fiber optic undersea cables with capacity of 80,000 voice-equivalent circuits (FCC, File No S-C-L-84-002, Sept. 28, 1984); and 2) Submarine Light- wave Cable Co , a U 5 venture capital group, which has applied "This should be regarded as only a rough estimate of the cir- to build a second cable facility with capacity of 250,000 voice- cuit capacity of proposed facilities, since both the magnitude of equivalent circuits (FCC File No SCL-85-001, Oct 16, 1984)In circuit multiplication that will be possible for voice conversations March 1985, the FCC informed the Secretary of State of its conclu- (this estimate is based on a multiplication factor of 5), and the pro- sions that the Tel-Optik application "meets the threshold reciprocity portion of voice to other uses that do not use multiplication tech- showing of the Cable Landing License Act and otherwise appears niques, are uncertain It is arrived at by adding the follow.ng rough to be consistent with U S interests under the Act " The SLC appli- estimates Currently existing cables in servre at that time (10,000), cation was not acted on pending the receipt of additional intor- TAT-8 and TAT-9 (80,000), Tel-Optik cable (Cable & Wireless) mation but no prejudicial finding was made (FCC News, Report (80,000), Submarine Lightwave Cable (250,000), separate satellite No 3092, Mar 4, 19C5) systems (RCA, Orion, et al.) (120,000), and INTELSAT (100,000+)

193 Ch. 6Satellite Communications 187

If the USISC or CEPT forecasts are even remote- would have symmetrical disadvantages compared ly realistic, much of the excess supply can be ex- to the competitive model; there wouldlikely be pected not to materialize as plans are reevalu- some level of regulation-inducedinefficiency in ated. Nevertheless, even if all the venture-capital the facilities mix, in the service mix, and in the groups drop out, just the announced plansof mix between public and private networks. A sec - INTELSAT, the cable consortia (principally AT&T ond disadvantage is that facilities regulation might and the European PTTs), Cable & Wireless, and be used to maintain an uncompetitive, high- RCA would together still equal more than 300,000 priced services market, if facilities regulation were voice-equivalent circuits. It is not at all clear that used to make entry difficult for new service pro- any of these large firms or consortiawould drop viders. Despite these potential defects. facilities out or scale their plans far enough back toreach regulation might still be justified if the possible the neighborhood of the demand projections, excess supply of facilities suggestedby the cur- even if they could forecast demand (atthe level rent facilities plans were considered to reflect a of the USISC projection) with certainty. They tendency towards either chronic overcapacity (... might fear that scaling back, without the certainty chronic instability. that the other major players would also scale This brief discussion suggests that a clear prima back, would expose them to an unacceptable loss facie case cannot be made either for unrestricted of market share. Such behavior might occur transatlantic facilities competition (in the current under the existing conditions of imperfect com- institutional context) or for facilities regulation. petition if firms had full freedom to invest in fa- Much depends on the particular technical, mar- cilities, especially if they could expect to recover ket, and institutional characteristics of the trans- the costs of the capacity from consumers via high- atlantic communications market involved: the er prices enforced by regulation. size of the demand, the seriousness of any tend- The competitive solution would be to liberalize ency by the institutions involved to overinvest, the entire market, allowing free entry in both the the actual magnitude of fiber optic economies to service and facilities markets. Oyerinvestment scale, and the cost effectiveness of alternative that resulted in lower rates of return would deter methods of communication security. additional investment. In the long run, society's resources would be allocated optimally.145 One advantage of the competitive solution, if it could Entry for U.S. Service Providers in actually be implemented, is that consumers would International Markets determine the types of facilities that would be uti- The United States must also choose how ag- lized and the types of services that would be pro- gressively to pursue liberalization in the general vided. They would also determine the mix of pri- area of entry into internationaltelecommunica- vate and public (common carrier) networks. tions service markets. The issue is: how can the Facilities regulation would be an alternative United States assist the several dozen large and solution, using the methodology that the FCC cur- small U.S. corporations active in U.S. interna- rently uses or another that involves INTELSAT tional satellite communications, plus those cur- more formally in the process. Facilities regulation rently only in domestic satellite communications, to gain access to foreign telecommunications '-"This might not be true of imperfect competition Regulated firms service markets? Should the United States adopt would have a tendency to overinvest, if they did not have to pay an aggressive posture at the risk ofstraining rela- for their investment mistakes A number of the participants in in- tionships with our principal trading partners? ternational communications are likely to act differently from competitive firms AT&T, whatever its regulatory status, is likely to re- Because basic telecommunications providers tain significant market power and might invest for strategic reasons, in most particularly if there are important fiber optic economies to scale are not free to offer single-vendor service Foreign PTTs, being for the most part government owned, might international markets (i.e., to offer end-to-end also have a tendency to overinvest in facilities for dgensive rea- communications service over their own owned sons, if they had reason to expect a financial bailout in the case of loss and had monopoly power over rates INTELSAT might have or leased networks), they can only gain entry to an incentive to overinvest for the same reasons as its PTT owners the U.S.-Country X market, if the PTT of Coun-

19 b 188 International Cooperation and Competition in Civilian Space Activities try X will allow them to connect. Even if they were Another possible outcome is that the data proc- able to enter, they would have to tailor theserv- essing revolution, and the business communica- ice they offer to the facilities and practices of the tions involved in it, will simply overwhelm regu- PTT. latory defenses and bring not only international Full liberalization in international telecommu- liberalization but also substantial domestic dereg- nications service would require single-vendor ulation in most industrial countries within the service, pricing freedom, and open entry for com- next 15 years. mon carriers and private firrns alike in both U.S. A third possible outcome could be that great and foreign markets.146 While full liberalization resistance will develop to change, in Europe in is very unlikely in the short Pin, the United States particular, and that deregulatory pressures from could pursue certain short- it, medium-term lib- the U.S. sidefrom consumers, excluded car- eralization objectives in order to increase effi- riers, and the U.S. Governmentwill mount. For ciency in U.S. international telecommunications instance, large consumers abroad might attempt markets and also increase the access of U.S.car- (with U.S. Government toleration) to circumvent riers. It could attempt to: national regulation and high prices in certain establish a right of connection for all U.S. countries, by routing a greater flow of commu- common carriers to connect to foreign pub- nications to the United States via cheaper neigh- lic networks on a nondiscriminatory basis; boring countries than they do now. This could retain country-of-origin pricing; force unwilling PTTs to lower their international prevent deterioration in the ability of U.S. rates to meet the competitive threat.149 The con- firms to lease international private lines over- flict that could result from such a situation might seas under flexible conditions and with prices so sour communications relationships that the related to facilities cost; United Stites could find itself with few allies develop beachhead rights for the two-way within international organizations on matters of handling of international communications to telecommunications. and from foreign satellite ground stations by both U.S. common carriers and private International lrade in Satellite firms;147 and Communications Equipment secure the right of entry for U.S. value-added and data processing firms into foreign do- The issue in this area is what action the Gov- mestic markets. ernment should take to try to assure fair international competition in trade in both space- and One possible outcome of the current attempts ground-segment equipment. by U.S. corporations to enter transatlant1c satellite markets could be that even if private com- The United States is both a leading importer petition were permitted, it could be narrowly and a leading exporter of telecommunications restricted to business communications that don A equipment. It used to have a arge overall posi- enter public-switched networks and effectivel), tive balance of trade in telecommunications circumscribed on the ground in Europe. In this equipment, but the balance suddenly shiftM to case the current international system would prob- negative in 1983. Table 6-9 shows this deterio- ably largely remain in place.'" ration for the whole category "telephone and telegraph equipment," data being unavailable for satellite communications equipment separately. A surplus of over $200 million as recently as 1982 "6Single-vendor service can coexist with monopoly provision of has turned into an estimated deficit of $945 mil- local service under an access-charge arrangement lion in 1984 and a projected deficit of $1.7 bil- "'The import of this would be that a U S carrier or firm could use its own equipment or lease whole, not half circuits from INTELSAT or other satellite facilities providers "Data Communications, "Users May Reap Benefits of Transatlan- '"Eli M Noam, "Telecommunications Policy on the Two Sides tic Competition," March 1985, Gary Stix, "PTTs Make Life Rough of the Atlantic Divergence and Outlook," op cit, pp 13-14 Overseas," Computer Decisions, Apr 9, 1985

1J/ Ch. 6Satellite Communications 189

Table 8.9.U.S. International Telephone and United States, first to Japan, and now to Hong Telegraph Equipment Trade, 1978.85 (S millions) Kong, Taiwan, and South Korea. The latter advanced developing countries all had large tele- Surplus (+) Year ExportsImports Deficit ( -) communications equipment deficits in 1978, but in 1983 had substantial telecommunications trade 1978 ... 388 233 155 1982 ... 829 626 203 surp:use 152 1983. . 790 1,209 -419 1984e . 795 1,740 -945 While fundamentals may govern the movement 1985p.. . 800 2,505 -1,705 of certain components of the telecommunications Key e - estimated. p - projected equipment industry into less developed countries, SOURCE Derived from Department of Commerce, U S ',Austria, °taloa. 1985, pp 30-1, 30-5 particular factors have contributed to the decline of both the U.S. export share in telecommunica- lion for 1985. The international Trade Commis- tions exports and to the vastly greater imports of sion has forecast that the deficit will continue to telecommunications equipment into the United increase and will reach $3 billion by 1993.150 States from the other industrial countries. Large exports to developing countries used to more than make up for a trade deficit in telecom- Strength of the Dollar munications equipment with other OECD coun- The high value of the dollar (typically described tries. Recently, however, a number of changes as over-valuation) tends to make all U.S. exports, in international trade patternsthe deregulation including telecommunications exports, less com- of the U.S. long-distance communications mar- petitive in price. The dollar rose by 58 percent ket and the elevated value of the dollar among between 1980 and 1984 relative to other curren- them, together with continuing barriers to U.S. cies153 and a shift of this magnitude, seemingly telecommunications exports in the other indus- unrelated to changes in U.S. comparative advan- trial countrieshave resulted in both a disappear- tage, is large enough to overwhelm it in many ing surplus in trade with less developed countries sectors. and a much greater deficit with other industrial countries.151 Unequal Access to Industrial Turning to satellite communications equipment, Country Markets in particular, it seems clear that, absent trade bar- Following the AT&T breakup at the beginning riers, the United States still enjoys strong com- of 1984, which separated Western Electric (now parative advantage in communication satellites. AT&T Technologies) from its special corporate This also appears to be true in customer-premises relationship with the Bell Operating Compar .as, Earth stations, except that the advantage of U.S. foreign telecommunications equipment sellers firms over Japanese ones in this area may be are now able to compete in the U.S. civilian mar- ephemeral. In standard INTELSAT Earth station ket on substantially equal terms with U.S. pro- components, DBS equipment and standard tel- ducers. This market has supported explosive ecommunications equipment, comparative ad- growth of imports for several reasonsbecause vantage in high-volume manufacturing operations of strong U.S. economic growth, because of the appears to have been shifting away from the elevation of the dollar, and because of some shift in comparative advantage. Imports grew 93 per- 15°Statement of Paula Stern, Chairwoman of the ITC, in U S Sen- ate, 98th Cong , Committee on Finance, Subcommittee on Inter- national Trade, Hearing, Telecommunications Trade, lune 26, 1984, P 9 '52Depanment of Commerce, V S Industrial Outloox 1985, P. 15'See Robert Eckelman, "A Study of the International Competi- 30-5 See Raymond F Mikesell and Mark G Farah, U.S. Export Com- tive Position of the U S Telecommunications Equipment Industry" petitiveness in Manufactures in Third World Markets (Washington, in U S Department of Commerce, International Trade Adminis- DC Center for Strategic and International Studies, Georgetown tration, The Telecommunications Industry (High Technology Indus- University, 1980), p. 106ff for an analysis of comparative advan- tries Profiles and Outlooks). April 1983 and International Trade tage patterns, which concludes that the United States continues Commission, "Changes in the U S Telecommunications Industry to have comparative advantage in technology-intensive products and the Impact on U S Telecommunications Trade," Investigation '53U S President, Economic Report of the President, February No 332-172, 1984 1985, table B -104, p. 351.

198 190 International Cooperation and Competition in Civilian Space Activities

cent in 1983, are estimated to have grown 44 per- or technical services, foreign programs will con- cent in 1984, and are projected to grow a..'_-sther tinue to try to do more on their own. 44 percent in 1985. There are signs that some PTTs may in the fu- The same is not true for U.S. manufacturersi I ture permit some competition in equipment pur- most other industrial countries. The PTTs of most chases, but these signs are far from suggesting a such countries usually purchase telecommunica- wave of the future.'56 In 1980 the U.S. and Japa- tions equipment from national firms. Sometimes nese Governments signed an agreement to open they engage in extensive R&D, which is provided the Japanese equipment market to U.S. firms. to national supplier firms without cost. The GATT This agreement has not so far resulted in substan- Government Procurement Code covers only those tial U.S. telecommunications equipment sales in government entities that individual countries Japan, and it does not cover imports of satellites specify as being under its coverage. As discussed themselves.157 in chapter 4, most governments have elected not to place their PTTs under its coverage and the Just prior to when the partial privatization of European Space Agency is not a party to it, so the Nippon Telephone & T-.:legraph Co. (NTT) there is no question of, for example, accusing the and removal of its monopoly status took effect Bundespost monopoly, of breaking international in April 1985, the Ministry of Posts and Telecom- trading agreements by proposing to launcha Ger- munications proposed regulations that, in effect, man-made communications satellite without al- would give Japanese manufacturers almost veto lowing U.S. manufacturers to bid on the project. power over which foreign telecommunications In another example, the French Telecom 1 sat- products could be introduced into the Japanese ellite system has been developed directly by the market. Furthermore, the restructured NTT D.G.T (Direction General des Telecommunica- would be given special competitive advantages. tions), the French telecommunicationsmonop- Major changes in these regulations, which U.S. oly. The radio and television broadcastingcom- diplomacy (and certain Japanese industry groups) panies of most foreign countries are also gov- have been seeking frot.i the Japanese Govern- ernment organizations, and, where possible, buy ment and have obtained in principle, are: direct broadcasting satellites from theirown national or regional manufacturers. 1. that U.S. manufacturers be allowed to certify that their products meet Japan's stand- De ,e the desire by foreign governments to ards, instead of having to submit individual buy locally, U.S. firms have nevertheless had im- products for inspection by a Japanese Gov- portant participation in foreign satellite projects. ernment agency; The current Japanese communications satellites, 2. that trade secrets should not have to be sub- CS-2A and CS-2B, for example, were built by Mit- mitted to a group containing representatives subishi Electric with the active participation of of their Japanese competitors; and Ford Aerospace & Communications.'" Although 3. that a single agency would be set up to ap- the French firm Aerospatiale is the prime contrac- prove telecommunications products for sale tor for the Arabsat regional system, Ford is do- in Japan, rather than the four specified in the ing 59 percent of the work.1S5 Brazil has con- draft regu lationS.158 tracted with SPAR Aerospace of Canada to supply the Brasilsat satellite, but Hughes will actually In this instance, as in previous trade disputes build it. A primary objective of foreign national between the United States and Japan, political space programs has been to reduce dependence maneuvering within the Japanese Government on U.S. suppliers, and although U.S. satellite sup- and bureaucracy has made implementation far pliers may continue to supply major components from certain, despite the strong support the U.S.

'54/Aviation Week and Space Technology, Feb 4, 1985 '56See Dan Schiller,The Storming of the PTTs," Datamation, '"U S Congress, Office of Technology Assessment, Technology May 1983, pp 155-158 Transfer to the Middle Last, OTA-ISG173 (Washington, DC U S '"U S. Export Weekly, Jan31, 1984, pp 580-58: Government Printing Office, September 1984), p 210 ' " Washington Post, op cit, Mar 19, 1985, p D1

1 9J Ch. 6Satellite Communications 191 position has received from the Prime Minister. the developing world and in smaller industrial In Japan, as in other industrial countries, the old countries that do not produce satellites or ground PTT structure does not easily accommodate in- equipment. U.S. satellite manufacturers are in a ternational competition, even when it is altered. particularly good competitive position to sell in those markets due to their technological domi- In satellite communications equipment, the nance. In Earth station sales, U.S. firms are more if it opening of the telecommunications market, on a par with firms from other industrial coun- should materialize, would primarily affect Earth tries, particularly Japan. In the developing world, station equipment and some satellite compo- it should be noted, there are a variety of nontariff nents. Even an open market would not guaran- barriers to trade that U.S. manufacturers must tee success in the Earth station market, however; cope with. These include adherence to equip- in this market U.S. firms face a formidable comment standards set by former colonial powers and petitor in NEC, the leading ground station sup- the fact that the PTT buyers of satellites and sat- plier internationally as well as in Japan. Japan's ellite equipment, by dint of their governmental response to U.S. pressure to open its satellite pro- status, may make purchasing decisions not en- curement market was to give NTT the option to tirely on economic grounds.163 buy foreign communications satellites if it should wish to do so, but U.S. "officials would not ven- Foreign Government Export Support ture to guess the extent to which it would result in foreign purchases."'" Under the terms of the Some U.S. firms also believe that other OECD restructuring of the telecommunications service governments offer better export financing for their industry, new entrants will also be allowed to pur- firms than does the U.S. Export-Import Bank does chase foreign satellites, and U.S. satellite makers for U.S. firms, despite the fact that the OECD Ar- appear to be actively seeking sales.160 rangement on officially supported export credit has reduced credit subsidies in regular export fi- Questions of the openness of the Japanese mar- nancing.'" For some kinds of exports to devel- ket are likely to persist, given the history of the oping countries, industrial countries combine for- bilateral negotiations over the 1980-85 period, but eign assistance credits with commercial export there is at least some movement there.161 Else- credits, i.e., "mixed credits," an allowable prac- where in the industrial world, the European mar- tice under the current OECD arrangement on offi- kets remain tightly closed to imports of satellites cial export financing as long as the assistance and much telecommunications equipment. In meets certain criteria (see ch. 4), but one that the these circumstances, some U.S. firms have found U.S. Government believes is being abused by joint ventures with European fnms to be a par- France and Japan.165 To counter an earlier use tial su bstitute.162 of subsidized credit by Japan in sales of Earth stations to less developed countries (in this case, an Trade Barriers in Developing Countries over-generous repayment period), the United Given the barriers to equipment market entry States negotiated a special OECD Understanding in the industrialized countries, the major new on Export Credits for Ground Satellite Commu- markets outside the United States seem to be in nication Stations. It provides for a maximum repayment term of 8 years in this case.166 '"Washington Post, Apr 28, 1984, p A20 160 "Hughes Pushes Japanese Ku-Band Allocation," Aviation Week and Space Technology, Feb 4, 1985, p 72 163See discussion above and also Technology Transfer to the Mid- '6' Lee Smith, "What the U S Can Sell to Japan," Fortune, May dle East, op cit 13, 1985 164John N Lemasters, op. cit , pp 66-69 For a general discus- 161For example, Fairchild Industries has entered into a complicated sion of the OECD Arrangement and the reprint of an unofficial ver- joint venture agreement with Tnompson Alcatel of France that in- sion of its text, see Gary Hufbauer and Joanna Shelton Erb, Subs,- volves each partner as a minority shareholder in subsidiaries of the dies in International Trade, Institute for International Economics, other The four jointly owned subsidiaries, two in the United States Washington DC, 1984, ch 3 and app G, respectively. and two in France, will market pooled lines of satellite and terrestrial 165"L.I.S Warns France on Trade Issue," Washington Post, Nov. communications products and services (Washington Post, Wash- 28, 1984. ington Business Section, Mar 11, 1985, p 3). 166Hufbaue, and Shelton Erh, op cit , app G, p. 224 o 4., . 1 () 192 International C000eration and Competition in Civilian Space Activities

Currently, the United States is attempting to observe, affect the competitiveness of U.S. telecom- tain a significant tightening of the criteria for munications equipment suppliers in international mixed credits and is threatening to retaliate with markets. higher funding for U.S. mixed credits, if negotiations fai! to produce the sought-after tightening.167 One case of note in satellite communications An earlier example, where the United States illustrates the problem. In late 1981 and early matched foreign subsidized credit in satellite 1982, INMARSAT signed four contracts with U.S. communications, occurred when ITT, a U.S. companies (three with COMSAT and one with company, was attempting to sell an INTELSAT Digital Communications Corp.) in connection Earth station package to Cyprus in competition with the INMARSAT research program on the with a French company. Eximbank offered 85 next generation of maritime communications sat- percent financing at 6 percent, and the sale went ellites. Because the Soviet Union is a member to ITT.168 state of INMARSAT and contract studies are available to all members, the U.S. Government de- Other potential governmental means of sup- layed delivery of these studies to INMARSAT. porting satellite communications equipment sales Three of the studies were eventually delivered, include: offering specially discounted combina- but well beyond the contractual due dates, and tion packages of satellite and government-subsi- one was completely canceled by INMARSAT. dized launch services (see ch. 4) or making coun- tertrade arrangements in which satellite or ground INMARSAT officials expressed surprise at the equipment sales at ostensibly unsubsidized prices export blockages, particularly since critical tech- are tied to the purchase of commodities from the nical details did not have to be disclosed. buyer at higher-than-market prices.169 INMARSAT required only enough information on the workings of the satellites to be sure they met U.S. Government Policy performance specifications. With respect to the on Export Controls prospective delivery of actual U.S. satellites, no actual satellite equipment would ever actually be In recent years there has been increased Gov- in the possession of INMARSAT, because the sat- ernment concern over the risk that exported high- ellites would be launched directly from the technology equipment may fall into Communist, United States or from French Guiana by the U.S. particularly Soviet, hands where it might be used contractor. Responding to the U.S. action in this for military purposes. One result has been in- case, INMARSAT has decided not to accept bids creased vigilance over items which might be on on future contracts unless a firm can show that the Department of Defense list of militarily criti- it has its government's permission to deliver the cal technologies. At the same time, ihe United goods or services offered."' States has used export controls for political pur- posesthe most dramatic use being the withhold- Some U.S. firms see the application of export ing of technology and equipment that might be controls as putting them at a potential competi- used to build the Soviet natural gas pipeline to tive disadvantage. As the vice-president of a firm bring gas to Western Europe.170 These restraints manufacturing satellite Earth stations and other on exports, whatever other purposes they may products put it: Too much time and effort is wasted in the U.S. '67News conference of the vice chairman of the U 5 Export- on the so-called control of mature products Import Bank, Paris, Nov 27, 1984 '68Robm Day Glenn, Financing of United States Exports of Tele- which are already commercially available communications Equipment, International Lay, Institute, George- throughout the world. Control of technology town University, Washington DC, 1982, p 39 must take place prior to the commercial intro- 169Douglas L Adkins, "Countrtrade, Clea7 ng Arrangements, Re- duction of a new product)" ciprocity and Other Instruments of the New Bilateralism in Inter- national Trade," unpublished paper presented at the Allied Social Sciences Association meetings, San Francisco, Dec 29, 1983 171See "INMARSAT Adds Contract Stipulations," Aviation Week 170U 5 Congress, Office of Technology Assessment, Technology and Space Technology, Nov 15, 1982, p 25 and East-West Trade An Update, OT 4-ISC-209 (Washington, DC 172)ohn N. Lemasters, op cit., p 68 Mr Lemasters is Senior Vice U 5 Government Printing Office, May 1983) President, Communications Sector, Harris Corp. 2 .1 Ch. 6Satellite Communications 193

The same official argued that export restrictions flight test program has resulted in Congress fund- for foreign policy, rather than military, reasons ing the $354 million program with a $45 million was "the single most damaging U.S. action affect- budget in fiscal year 1985."5 RCA is the prime ing U.S. exports, particularly to lesser-developed contractor for the $260 million outside contract, countries." He called the practice particularly and TRW and COMSAT are co-contractors;1" harmful to the U.S. telecommunications indus- Motorola, Electromagnetic Services, and Hughes try, saying that customers would not buy from are the major subcontractors.'" NASA estimates a cow 'try whose government might arbitrarily that the contractors and other experimenters will step in to restrict the flow of spare parts and main- spend an additional $100 million of their own tenance services. funds on R&D that uses the test satellite facility or is otherwise closely related to the program. As OTA has previously suggested, the national security and foreign policy benefits of export con- ACTS will develop technology for Ka band trols need to be weighed against the loss in ex- (30/20 GHz) satellite systems and will also explore port competitiveness to which they may some- techniques for increasing satellite capacity that times lead.'" may have application in the C and Ku bands as well as the Ka band.'" Opeiational satellites in The Advanced Communications the Ka band could be used to relieve crowding Technologies Satellite Program in the C and Ku bands. There is 2,500 MHz of frequency spectrum allocated for communication The key issues for Congress concerning the satellite use in the Ka band, compared to a total NASA Advanced Communications Technologies of 500 MHz in both the C and Ku bands.'" Be- Satellite (ACTS) program are: cause of greater rain attenuation of signal inthe Ka band (see fig. 6-3), however, special tech- 1. how much should the Government spend niques, such as variable power level control to on research and development to help keep amplify the signal in compensation for the rain the U.S. satellite manufacturing industry effects, forward error correction, involving signal technologically vital and ahead of potential redundancy, or alternative Earth station routings foreign competitors? and are necessary to use the band effectively. 2. will the ACTS program do this? in 1973 the Office of Management and Budget directed NASA to cut back research on civilian u5Aviation Week and Space Technology, Aug 6, 1984, pp. 24- communicationsatellite technology on the 25 The fiscal year 1985 program will continue ACTS technology grounds that the industry had matured to the development and activities leading to the flight program Much of point where it could provide its own research and the $9 million appropriation for Communications Program research and analysis will be used for in-house research related to the ACTS development funds. In 1978 the NASA commu- program U S House of Representatives, 98th Cong., 2d sess., Re- nication satellite program picked up again and port 98-629, Commitrec) on Science and Technology, "Authorizing conducted a proof of concept program on ad- Appropriations to the National Aeronautic and Space Administra- tion for Fiscal Year 1985, Mar. 21, 1984, pp. 97-102. vanced satellite communications technology. Au- "The NASA program cost estimate was based on a 1988 launch, thority for elements of a demonstration satellite but this has now been moved into 1989 (Aviation Week and Space program (including a flight testing program) were Technology, Aug 6, 1984, pp 24.25) "'Smith, CRS Report LTR84-158, op cit., p 11 included in 1984 appropriations.'" The Admin- "8This discussion draws on a number of sources, especially Smith, istration proposed cutting back the program con- CRS Report LTR84-158, op. cit. NASA, Office of Space Science and siderably for the 1985 budget, eliminating funds Applications, "ACTS: Advanced Communications Technology Sat- ellite Program" [undated pamphlet], Chris Bulloch, "Advancing the for the flight testing program, but interest in both Art of Satellite Communications," lnteravia, January 1985, pp. 25- the House and Senate in retaining the full ACTS 28, and C. Richard Whelan, "Communications Satellites Move to Higher Freguencies," High Technology, November 1984, pp. 49-53. "'Technology and East-West Trade An Update, op cit ' '9An advantage of the Ka band, minimal orbital spacing (poten- "'Marcia Smith, "NASA's Advanced Communications Technol- tially 1 rather than the 2 or 3 degree spacing in the lower bands), ogy Satellite (ACTS) Program in Light of the Hughes Filing," Con- is of little economic value unless there were also crowding in the gressional Research Service report LTR84-158, Mar 2, 1984 (Wash- Ka band, a possibility that is unlikely in any but the distant future ington, DC Library of Congress) (Whelan, op at , p 49)

21)2 194 International Cooperation and Competition in Civilian Space Activities

Figure 6.3. Radio Signal Attenuation beam-to-beam digital switching within the satel- Lox lite, which, though potentially useful with fixed Additional effects spot beams, would be essential for scanning spot 100 from rain beams. An onboard computer, called a "base-

Ionospheric band processor," would co itrol scanning, switch- 10 reflection ing, and other functions within the spacecraft. effects Clear weather During the period of low NASA effort in satel- 1 absorption lite communications research, individual Euro- / effects pean countries and Japan were all providing 01 government funds for research in satellite com-

C Ku Ka munications technology and for the development i 1 of operational satellites in an effort to catch up 0 010 0 100 0 1 i 10il 100 with U.S. technology. One NASA study showed Frequency (GHz) that, at $55 million in 1982, European expendi- SOURCE National AvonauticS and Space Administration tures were 21/2 times those of NASA, while, at $190 million, Japan's were 11 times NASA's.182 Another estimate placed combined Japanece Among the techniques that increase satellit ca- Government and private communications satel- pacity are those designed to increase the com- lite R&D expenditures in 1983 at nearly $400 mil- munications capability of individual satellites in lion.'" Japan's current and planned satellites in- g. ,en geosynchronous slots, called "frequency clude fixed spot beams in the Ka band, as does reuse" techniques. One such technique that the Italy's Italsat, planned for launch in 1987. Satel- program would investigate is the use of spot lites proposed by the European Space Agency, beams, allowing the satellite to use the same fre- and by France and Germany separately, would quencies simultaneously to transmit and receive also use the Ka band. None of the current for- different signals to and from geographically sep- eign programs appear to contemplate movable arate ground stations. On the ACTS test satellite, or scanning spot beams, but Japan is consider- some of these beams would be scanning, sweep- ing a next-generation operational satellite system ing back and forth from ground station to ground (CS-4) using scanning spot beams and onboard station. The scanning spot beams would further signal processing.164 increase the total message capacity of the satellite by permitting fewer separate beams with high- U.S. firms have also carried out large corporate er power in each transmission. This scanning R&D efforts in satellite communications.185 Never- technique also would allow the satellite to redis- theless, industry and NASA officials have repeat- tribute its capacity continuously, following varia- edly told Congress that no private firm would be tions in service demand, to different areas of the willing to bear the risk, expense, and delayed pay- country. Higher satellite power in beams would off of launching its own Ka band satellite incor- by itself allow the use of less expensive Earth station equipment, but a firm opposing the program receive at the same frequencies by taking turns or time sharing contended that Earth stations required for the The time slot allocated to a given Earth station can be lengthened ACTS scanning-spot-beam technology would be or shortened to accommodate a varying amount of communications needs " NASA, op. cit , p 9 more expensive than Earth stations required by tuAviation Week and Space Technology, Sept. 6, 1982, p. 241 satellites employing fixed spot beams.'" 183R. Film A Schnapf, and S. Fordyce, "Japanese and Western European Space Research and Development With a Focus on Com- The program would also study increasing sat- munications Satellites," paper prepared for NASA Lewis Research ellite capacity by a message processing procedure Center, Feb1, 1984 18413ulloch, op. cit , p. 462-63. called "satellite switched time division multiple I8 These efforts may have been stimulated by research for,or in access" (SSTDMA).181 SSTDMA is a technique of anticipation of, military and INTELSAT contracts. Hughes, in particular, has developed advanced technology for the Department '80Smith CRS Report LTR84-158, op. cit of Defense's MILSTAR series of military communication satellites 1 °' "By dividing the satellite communications signals into short, and for the INTELSAT VI series Smith, CRS Report LTR84158, op compressed bursts of information, several users may transmit and cit, p. 13.

2 )3 Ch. 6Satellite Communications 195

Photo ~It: National Aeronautics bid Sows Admhdstration Artist's conception of the NASA Advanced Communication Technology Satellite (ACTS). The solar panel3that provide the power are deployed on the left and right of the drawing. The reflectors for the 30 MHz and 20 MHzfrequency antennas are shown above and below the satellite. porating advanced technolc v. Were NASA not satellite.186 Onboard switching circuitry would in- to test such a satellite first, their arcument has terconnect all 16 spot beams. The system in or- been, the United Sta,s would lose its "pre- bit was expected to cost about $450 million, to eminence" in satellite communications tech- be financed with private capital. nology. Hughes officials argued scanning spot beam technology would probably never be economi- In 1984, however, Hughes Communications cal fcr commercial satellites; there was thus no Galaxy, Inc., fileu with the FCC for permission commercial reason for NASA to invest in that to construct, launch, and operate two Ka band technology."' As for the advanced signal proc- satellites with its own funds in 1988 and 1989. The proposed Hughes satellites would have 16 'nit appears that Hughes also has the ability to install movable spot beams in commercial satellites, at least at lower frequencies spot beams, thus allowing multiple re-use of the The recent application by Pan American Satellite Corp. to provide same frequencies. The onboard signal process- international communications satellite service proposes to launch ing techniques would not include the SSTDMA a hybrid system based on the Hughes H5-393 satellite with one "movable spot beam" and several fixed beams in 198/ The planned for the ACTS satellite. The spot beams movable spot beam is designed to transmit in C band. ("Applica- would all be fixed rather than scanning. Accord- tion of Pan American Satellite Corp. for a Subregional Western Hem- ing to Hughes, the simpler onboard system would isphere Satellite System," May 31, 1984, before the FCC, pp. 15-18) "'See lay C Lowndes, "Hughes Plan May Spark Round of Ka allow the use of less Expensive ground stations band Filings," Aviation Week and Space Technology, Dec 19, 1983, than those that would be required for the ACTS pp 28-29 2 196 International Cooperation and Competition in Civilian Space AL:ivities

essing (called "baseband processing" to be ex- will be needed and effective in keeping U.S. firms plored in the ACTS), Hughes argued that NASA competitive with foreign firms will have to deal could do that research on the ground."8 with the following question: The decision on whether the U.S. Government Will there be enough of a world market for should fund the space testing of advanced satel- Ka band satellites to justify a sizable research lite communications technologies depends on program of any kind on Ka band satellites? two classic arguments for government R&D as an element in the commercialization of advanced A large market for Ka band satellites would exist technology and on one argument unique to sat- only if there were substantial crowding in the geo- ellite communications: stationary orbit in the C ind Ku bands, which in tarn would occur in the 19905 only if the demand 1. The Government needs to protect U.S. infor U.S. domestic satellite communications ex- dustry's market share (jobs, exports, etc.) pands very rapidly.189 The current glut in U.S. do- from the R&D subsidies of other countries mestic satellites, the failure, as yet, of direct by funding R&D of its own. broadcasting satellites (DBS) to prove a market,'" 2. The Government should fund and possibly and the almost certain existence of an extensive conduct advanced R&D in many advanced U.S. fiber optic cable network in the 1990s, all technology industries, such as aircraft, com- make the existence of a Ka band market highly puters, telecommunications, etc., because uncertain. the private sector systernat'cally underfunds research that has two types of risks: the risk Assuming that there will be a sizable Ka band that the technology will not work or be sale- satellite market, is the U.S. satellite manu- able and the risk that competitors will be facturing industry already competitive in Ka able to gain access to their expensivere- band satellites? At least one U.S. satellite search as free riders. Industry therefore stays manufacturer (Hughes Aircraft) asserts that with proven, if older, technology. it has the capability to build and market fair- 3. In satellite communications in particulai, ly sophisticated Ka band satellites, with tech- only Government has the incentive to cl,)re- nology as advanced or more advanced than search to guard against the misuse of a re- the satellites in many of the foreign experi- source that is in the public domain, the geo- mental programs. stationary orbit. Wilt there be enough of a world market for satellites with scanning spot beams to justify In satellite communications, as in other R&D a sizable research program on the necessary contexts, evaluating the strength of these argu- advanced techniques? ments is difficult because the chains of reasoning involved are complex and key facts and Depending on their cost, satellites with scan- cause-effect relationships are highly uncertain. In ning spot beams might be purchased by satellite satellite communications, there is no issue of the buyers so that they could increase the capacity narrowness of the groups that would benefit from of satellites in given orbital locations by more effi- Government funding, assuming that the benefits ciently handling the communications of smaller were real. Every member of the public is a com- cities outside of metropolitan areas and of rural munications user. areas. The actual cost and characteristics would be important, since other techniques of increas- How strong is the argument that unless the U.S. ing the capacity of given orbital locations will be Government funds satellite research, the U.S. available, including the use of less sophisticated communication satellite manufacturers will fall and less costly versions of Ka band technology. behind their government-subsidized international rivals? In particular, determining whether the costly flight testing aspect of the ACTS program '"See the discussion of the satellite equipment market above in this chapter. '""FCC Asked to Delay Radio Sped. um Shift," Washington Post, 'USmith, CRS Report LTR84-158,op. cut , p 4 Apr 9, 1985, op. at , p D3 Ch. 6--Satellite Communications 197

Assuming that there are significant markets research from their competitors and, th,J, earn for satellites with Ka band and scanning spot sufficient revenues from them to fi-toce the re- beam features in th?. 1990s, will U.S. firms search and earn profits. They can keep their re- gain an advantage over foreign firms from search results secret as proprietary information, the ACTS program or at least not lose the ad- protect it with patents, incorporate it in engineer- vantage they now have in commercial sat- ing drawings and prototypes, and, finally, embed ellites? In part this depends on the usefulness it in organizational practices. Much applied re- of the results; can NASA's ACTS program, search and development is so intimately involved with the advice and significant financial par- with the operations of firms and the characteris- ticipation of the private sector, "pick win- tics of markets that only firms have the proper ners"? Whether U.S. firms would gain a incentives to perform it well. Government orga- competitive advantage also depends on nizations that try to perform highly applied re- whether foreign governments match NASA's search may end up with commercially irrelevant research program with programs of their results. own intended to accomplish the same commercial objectives. Such induced programs To determine how much of the ACTS-type re- might cancel or partly cancel the effects of search private industry would do and what part the ACTS program on U.S. competitiveness. the Government should fund, answers to the following questions should be sought: There is also the problem of NASA transferring the technology to U.S. firms and simul- What kind of R&D have U.S. satellite man- taneously preventing foreign firms from gain- ufacturers been doing by themselves? In con- ing access to it. nection with the ACTS program, what kinds Turning from foreign competition to the basic of coordinated research have the private par- role of government in advanced technology R&D, ticipants been willing to finance from their how strong is the argument that the private sec- own funds or in joint venture with other large tor would not perform the socially optimum level aerospace, communications and information of R&D in satellite communications, if there were corporations? Using this evidence, what no ACTS program? There is general agreement kinds of research would the industry be likely that the Government has a role in funding basic to do on its own? Considering that each of research, since the private sector has insufficient the three largest satellite prime contractors incentive to invest in it. Because an investing firm (Hughes, Ford, and RCA) own or expect to would not be able to keep its competitors from Own satellite capacity for sale or lease to cus- gaining substantial access to the research results, tomers, should they be expected to flight- such an investment would usually not be profit- test innovative components on their own able. If the basic research results are available to spacecraft? (The Hughes application prom- other firms th.ough scientific publicatione ises to do just that.) son nel transter, they need not recover', How important, within the overall U.S. Gov- of the basic research to stay in Lusiness dot , ernment program of R&D in advanced tech- a competitive market, will tend to set their prices nology, are those comp ments of tne ACTS too low for the investing firm to recover its costs. program that only the government appears The best way for a firm to avoid this situation is likely to perform? Which particular markets not to do the basic resez 'ch. Private firms may are they relevant tc? The market for less so- also be too risk averse or too Small to perform phisticated Ka band satellites or the market the basic research function. Consequently, gov- for satellites equipped with scanning spot ernment (and certain other research institutions) beams and other sophisticated technology? typically must do socially useful basic research, Are either of these markets likely to be large if it is to be done at all. enough to justify the cost of the ACTS program? At the other end of the basic/applied research spectrum, firms are much more able to keep the Finally, the unique argument in -,upport of sat- results of applied process, product, and market ellite communications R&D, which does not have 2 6 08 International Cooperation and Competition in Civilian Space Activities a counterpart in the debates over other types of would use existing frequency reuse tech- government-supported advanced R&D, is its rele- niques or less sophisticated Ka band satel- vance to potential crowding in the geostationary lites of the Hughes type, rather than sophis- orbit. Certain questions need to be answered in ticated techniques, such as the ACTS scanning order to evaluate the strength of the argument spot beams? that Ka band satellites will be needed due to the How would crowding and technological re- crowding in the geostationary orbit: sponses to it be affected by any planning How likely is crowding in the geostationary mechanisms decided on in the upcoming orbit in C and Ku bands in the 1990s, con- ITU Space 'ARC conferences? sidering the current satellite glut and the Is there a role for an auction technique to emerging domestic and international fiber allocate the geostationary arc available to the optic networks? How damaging tthe pub- United States in providing incentives to sat- lic interest would any crowding be that de- ellite manufacturers to develop arc-conserv- veloped in the C and Ku bands, considering technologies? ing the existence of transmission alternatives. How much of the private sector's response to any crowding in the two lower bands

POLICY OPTIONS

This chapter has discussed and analyzed a these areas would not jeopardize INTELSAT's number of elements in the U.S. international sat- financial performance. This objective could ellite communications sector. Implicit were va- be pursued with the following short-run pol- rious policy options. This section draws them out icy options: explicitly a. attempt to negotiate a regulatory regime with one or more major U.S. communi- The Future of INTELSAT cations partners that would permit these services before licensing U.S. satellite The United States has three principal long- firms to provide them, or range options for dealing with the future of the b. license U.S. firms first, then negotiate the international satellite communications system regulatory framework with communica- (INTELSAT augmented, as it currently is, by a tions partners later (or let the firms do it). number of coordinated regional systems): 3. It could opt to abandon special support of 1. It could attempt to preserve the current sys- INTELSAT, allowing U.S. firms to offer com- tem, with INTELSAT continuing to carry the petitively as much and as many different preponderant amount of intercontinental kinds of international satellite and cable serv- traffic and carefully controlled regional sys- ice as tney wish (and can find interconnec- tems handling some intra-regional commu- tions for), and expect INTELSAT to adjust, nications. Denial of the applications of pri- with its survival a matter of its competitive vate U.S. satellite firms to undertake large- success.191 (INTELSAT would, of course, con- volume transmit/receive operations across tinue to benefit from its monopoly position the Atlantic or within the Western Hemi- in non-competitive world regions.) sphere would be consistent with this goal. The question of competition to INTELSAT in- 2. It might assert the freedom of U.S. satellite volves two conflicting objectives: 1) preservation firms to offer substantial but not unlimited of the "single global system" for foreign policy intercontinental transatlantic and Western Hemisphere satellite services, particularly in "'This option is not under active consideration by any of the pol- business and television communications, if icymaking bodies in the U 5 Government, but is :ncluded for corm it is satisfied that moderate competition in pleteness

2 J1 Ch. 6Satellite Communications 199 reasons and for its economic benefits, and 2) lem. Reciprocal access of communications car- maximum competitive access for U.S. telecom- ried via foreign-owned satellites into the United munications carriers on grounds of fairness and States could be a condition for the entry of U.S. - the economic benefits that flow from competi- owned satellite operations into foreign countries tion. There is general agreement that U.S. pol- in many cases; foreign countries might alterna- icy toward INTELSAT in its formative stages en- tively insist on joint ownership as a condition for gendered international goodwill and therefore operation. furthered general U.S. foreign policy objectives. The three options listed above should be seen In the United States, at least, there is support as different tradeoffs between the U.S. foreign for the general ir.:eas of increased competitive ac- policy objective of friendly relations with other cess for U.S. ms and fair international competi- countries and the economic interests of U.S. tele- tion."' As discussed in chapter 4, competitive communications producers. Where the interests organization is the recognized normal Corm of in- of consumers lie is subject to debate and depends dustrial organization relied on by the United on how much competition wouldactually be es- States in most domestic and internatioral mar- tablished.'" kets. In the specific case of international tele- Option 1 would attempt to prevent private communications, however, the U.S. consensus competition to INTELSAT in any but minor ways. that competition promotes economic efficiency Option 2 would move toward increased competi- has been tempered by the fact that the United tion, while keeping INTELSAT viable. Option 3 States simply does not have the power tc create would disregard any special consideration for fully competitive conditions either by unilateral INTELSAT and would move toward a competi- action or by entering into good-faith negotiations tive system if at least a small number of U.S. com- with communications partners. Competition in munications partners would let it. international telecommunications is not something that the United States can impose or that In option 2, there is a significant range of tac- will happen if negotiations fail. Other nations tical options between the extremes of "license have the unilateral power to disallow competi- first then negotiate" and "negotiate first for as tive arrangements when their territories are di- good a deal as possible and then license in con- rectly involved. formity with it." Because the United States does not have the power to remake the international In the case of transatlantic entry, any U.S. sat- regulatory regime unilaterally, if it decides to pro- ellite firms wishing to compete with INTELSAT mote greater competition in international tele- will need the permission of one or more foreign communications, it should choose tactics that will governments to legally transmit into their terri- help gain the agreement of the relevant foreign tory. In cases where the public network is in- countries (and not harm general U.S. interests). volved, it will also mean that the PTT will have Cases can be made for both of the tactical op- to be willing to interconnect.'" Even when the tions listed or for something in between.'" PTT is wholly government c ,vned, formal permission by the regulatory authorities may not easily For instance, would-be satellite providers could translate into actual connection by the PTT; when be given permission to construct (but not launch) the PTT is partly or wholly private, resist snce by their satellites, prior to the completion of the an unwilling PTT may be even more of a prob- '940ne argument in favor of option 2 's that it would allow some measurement of the performance of competitive satellite opera- DuThis consensus does not generally extend beyond U S borders, tions and thereby allow a better estimate of the costs or benefits however, where the idea of competitive provision of "basic pub- to U.S consumers, and to those in developing countries, of main- lic services" by lightly regulated private companies is often severely taming INTELSAT as a viable entity. criticized '9sSee Bert W. Rein, et al., "Implementation of a U.S. 'Free En- ""Intercon nectior, however, does not mean nondiscriminatory try' Initiative for Transatlantic Satellite Facilities: Problems, Pitfalls treatment. For this to occur, the PTT would have to agree to send and Possibilities" (Washington, DC: Wiley, Johnson & Rein, July communications it originates via each of the U.S carriers' satellite 3, 1984); and Daniel P. Kaplan, "Buying and Selling International facilities (according to some formula) in compet..:.m with the Airline Deregulation," paper presented at the Allied Social Science INTELSAT facilities of which it is part owner Associations Meetings, Dallas, TX, Dec. 28, 1984. 2 8 200 International Cooperation and Competition in Civilian Space Activities

INTELSAT coordination process. Construction COMSAT would continue its monopoly sta- took place in the Eutelsat and Arabsat cases prior tus as the sole U.S. owner of INTELSAT in- to coordination. Alternatively, permission both vestment shares and thereby as an interme- to construct and launch satellites could be given diary in both traditional services and the new but made contingent on completing the coordi- INTELSAT Business Service (IBS). nation process. In any case, there will be a mix 2. Mandate a rapid evolution of COMSAT into of the unilateral exercise of sovereign power and a fully competitive, general communications of negotiations with communications partners carrier, ending its special status at some spe- over bilateral or multilateral communications ar- cified future date by allowing other carriers rangements. direct ownership of or "direct access" to The President has decided on option 2, in find- INTELSAT space segment facilities."' ing that alternative satellite systems (not con- 3. Retain COMSAT's monopoly as the sole connected to public networks) are "required" in the duit to INTELSAT, but restrict this role to the national interest, but has not indicated his tacti- minimum and force divestiture of all other cal decisions.196 To date the United States has activities. conditionally approved applications by U.S. do- The fact that COMSAT is an ongoing, regulated mestic satellite providers in the Western Hemi- enterprise that has managed the international sat- sphere and may proceed to do the same for the ellite communications of the United States with prospective transatlantic satellite providers. What technical effectivenesf. A declining prices to the action the United States should take if INTELSAT carriers it serves and, as the U.S. signatory, has refuses to coordinate some or all of the condi- maintained good relations with U.S. communi- tionally approved services is another important cations partners is an argument in favor of op- tactical issue yet to be joined. tion 1, to continue the status quo. In option 3 the tactical issues would not be so As the FCC sees it, this is an evolving status quo. variedor instance, because this option, to aban- For instance, several other communications firms don special support of INTELSAT, would be the are now allowed direct technical access to most disruptive of the current system, the United INTELSAT space segment facilities for INTELSAT States' ability to negotiate it with most of its ma- Business Service (IBS), although they still must pay jor communications partners in advance would COMSAT's tariff for their use)" Its Earth station be in great doubt. Hence, the license-first tactic decision also now allows carriers to own Earth is probably implicit in it. This, of course, would INTELSAT stations)" The FCC also allows COMSAT not rule out :he ordinary type of diplomatic in- to participate in other regulated and unregulated teraction by which the Government keeps its allies and trading partners informed of what itis '97-Direct access" is the term used by the FCC to refer to vari- about to do. ous mechanisms whereby the other carriers could bypass COM- SAT without actual ownership of an investment share in INTELSAT. Among the proposals the Commission considered (and denied) in The Future of COMSAT its direct access decision were 1) a capitalized lease option whereby the carriers would include in their rate bases the amounts they now A separate set of policy options apply to pay COMSAT for circuit leases, and 2) an IRU (indefeasible right COMSAT. Congress could: of user) mechanism similar to that used for cable facilites whereby the carriers would invest in INTELSAT circuits directly by paying COMSAT a prorata share of its investment in INTELSAT. The Com- 1. Continue current legislative policy toward mission also did not foreclose the possibility that it mignt revisit COMSAT, except with greater legislative over- the direct access question in the future (FCC, "Second Report and sight of the FCC's surveillance of COMSAT's Order .," op. at., )an. 11, 1985, pp. 8-9) rate-of-return and its separation of regulated '90The executive branch has recommended that "cost-based carrier and user access to INTELSAT with respect of customized serv- from unregulated activities. In this option, ices" be ordered by the FCC but has not yet specified whether this is compatible with current IBS arrangements (Departments of State and Commerce, "A White Paper on New International Satellite Sys- `"See previous discussion in this chapter of the Reagan Admin- tems," op. cit. p 33. istration's 1984 decision to support limited operations by new sat- "FCC, "Second Report and Order . ," op cit., Jan. 11, 1985, ellite entrants p 10

2 1 _. Ch. 6Satsilite Communications 201 communications markets, with strict separation tial financial stake (perhaps because the other of accounts and of elements of the corporate carriers did not choose to or were not allowed structure. In accord with FCC policy, COMSAT to acquire assets proportional to their use of will now also be allowed to offer INTELSAT serv- INTELSAT) the situation would be little different ices to customers other than the international from the current arrangement." service carriers. Option 3, which would restrict COMSAT (or Options 2 and 3 would both make major changes a successor, perhaps governmental, entity) to its in COMSAT's position. They might be attractive special, highly regulated role as the owner of and to those who have argued that, no matter how intermediary to INTELSAT, would also remove carefully COMSAT and its regulators attempt to the possibility that COMSAT's special position in insulate COMSAT's special role as the sole U.S. INTELSAT could be used to give it a competitive intermediary to INTELSAT from its other roles as advantage in other activities, since it would not a basic and enhanced communications carrier then have any other activities. This option could and equipment manuf?cturer, it cannot be effec- take diverse forms with diverse effects on mar- tively done. Thus, in this view, COMSAT would ket structure, however, depending on ownership always be able to gain unfair competitive advan- and other restrictions that might be placed on the tage from its special position." The solution of restructured COMSAT and on other changes in option 2 is to end COMSAT's special role, and the regulatory regime in international communi- that of option 3 is to restrict .t only to that special cations. For instance, if U.S. international carriers role. could gain ownership rights in the stripped-down COMSAT, such an arrangement could constitute Option 2, to end COMSAT's special rote by al- a capacity cartel" and could make the current lowing other U.S. businesses direct ownership of regime even less competitive than it is now. INTELSAT space segment facilities on the same basis as COMSAT could be difficult to implement, Full assessment of the regulatory requirements it it would require the agreement of the Board under options 2 and 3 would require further anal- of Governors oi INTELSAT or other INTELSAT ysis, but this brief treatment indicates that solu- bodies. Such agreement might not be forthcom- tions designed to mitigate the competition problems ing or might not be forthcoming on terms the U.S. caused at the domestic interface with INTELSAT are would find acceptable." Various direct access themselves likely to engender other, knotty prob- plans, which have been proposed to the FCC lems of competition and regulation. would allow the carriers to acquire ownership of assets from COMSAT, but depending on the ar- Satellites v. Fiber Optic Cables rangement, COMSAT might end up with a "ministerial role" in which it had large responsibility The demand for international satellite commu- but little financial stake. If it did ren substan- nications services will undoubtedly continue to grow rapidly at least until the early 1990s, but be- 200The year that COMSAT would be able to subsidize its competitive activities with revenues as monopoly provider of INTELSAT tween then and the end of the century, it may space segment services is one aspect, but information access is also or may not continue to grow. The pace of that cited For instance, International Relay, Inc , stated in congressional hearings that the fact that COMSAT receives information prior to INTELSAT meetings that IRI receives only after decisions have been 202It should be noted that even if the carriers were allowed to taker at those meetings is "critical to the future course of IRI's busi- gain ownership rights in INTELSAT, this would reduce but not elim- ness plans, and those of others who are dependent on the INTELSAT inate their extra incentive to use cables rather than satellite trans- system." (Statement of Steven A Levy, U.S Congress House, Hear- ponders Their traffic-sensitive satellite costs, which, depending on ings on International Satellite Issues before the SubcGmmittee on the exact arrangements, might be reduced from the COMSAT tar- Telecommunications, Consumer Protection, and Finanre, June 13, iff to something closer to the INTELSAT unit charge, would still be July 25.26, 1984, pp 156-185) greater tnan the minimal traffic-sensitive costs of using the cables 20"The substitution of a new entity, perhaps governmental, to rep- they own. resent the United State, so as to avoid the need to involve INTELSAT "01The term cartel is used here and elsewhere in this assessment in the decision can best be seen as a version of option 3 to restrict descriptively to mean a group of firms that openly communicate COMSAT (or the new entity) to the role of owner of and interme- with each other and reach joint decisions on such things as price, diary to INTELSAT or as a separate option See the following dis- capacity, product offerings, market participation, etc. We do not cussion of option 3 use it to judge whether firms are in violation of the antitrust laws.

2i.0 202 international Cooperation and Competition in Civilian Space Activities

growth will be conditioned not just by technol- this option, the United States would un- ogy developments but also by choices that douotedly seek bilateral telecommunications government will make with respect to facilities collaboration with countries like the United regulation. Options for the U.S. Government Kingdom or Japan that are favorably dis- include: posed toward deregulation. In such a strat- 1. Continue to control the amounts of trans- egy there could also be room for multilateral atlantic cable and satellite capacity available communications agreements and for more by approving or disapproving the facilities general multilateral agreements on trade in plans of cartels of U.S. and foreign carriers services. This strategy would require more or of individual firms, and to oversee the negotiation than the current regulatory regime and would be similar to the U.S. cy- - loading of traffic on satellites and cablesso that some form of balanced use of cables proach to international airline regulation. and satellites is maintained. Primary U.S. re- The executive branch (National Telecommu- sponsibility for international facilities regu- nications and Information Administration, lation would remain with the FCC. the Statc. Department and/or the U.S. Trade 2. Same as above, except that no systematic Representative) would be likely to take over policy of facilities balance would be fol- the leadership in international facilities reg- lowed. Technological competition between ulation from the FCC. cables and satellites would be allowed. Ac- Option 1, to continue the present policy of con- tion might be taken to reduce carrier bias trollir.g transatlantic communications capacity toward cables, but other than this, the and its division between satellites and cables, has market, the carriers, and foreign regulation the attractive feature that it is a well-established would be the primary determinants of the policy in which flexibility can be obtained through relative use of satellites and cables. ad hoc actions of the FCC. In support of current 3. Leave U S. telecommunications firms com- policy, INTELSAT and others have expressed the petitivey free to invest in international cable concern that unrestricted facilities competition or Satellite facilities as they see fit and secure between cables and satellites, in a still restricted international connection rights as they are international market, might result in: able. Reciprocal access for carriers using foreign-owned facilities is likely to be a condi- 1. excess capacity that consumers might have tion for such connection. When entry to for- to pay for through higher-than-necessary eign service markets is limited, regulate the prices, and country-pair cartels that may arise to prevent 2. serious difficulty for INTELSAT with attendant political problems. high rates and the whipsawing of U.S.carriers.204 Primary responsibility for oversee- Nevertheless, a policy of balancebalanced ing the process would probably remain with construction and/or balanced usecould entail the FCC. a large economic cost to U.S. consumers if the 4. Change to a more activist international-facil- cost advantage of cables (or satellites) should ities policy involving a greater emphasis on prove to be substantial and if it required carriers bilateral government-to-government agree- and consumers to use facilities they would other- ments on telecommunications facilities. Under wise not choose to use.2°5 A second question 20'Whipsawing refers to a feared practice on the part of foreign monopoly PTTs in the negotiation of settlement rates with U.S competitive carriers whereby the privilege of connection is awarded to the single U 5 carrier offering the highest accounting rate (or 2osUnder a balance policy, a desired distribution of traffic between is awarded to each of a number of carriers based on what their cables and satellites could result from either controls on construc- offers are) Competition among the U.S carriers could reduce their tion or on use If a warner, carrier pair, or carrier consortium were revenues, but the price of the ena-to-end message could still be convinced that the FCC would enforce a balanced use policy (e.g, kept high if the favored U 5 carnor or carriers had to pay out 50-50 or "balanced loading"see note 46, p 161 for the FCC's monopoly profits to the PTT See Evan Kwerel, "Promoting Com- definition of "balanced loading" between cable and satellite facil- petition Piecemeal in International Telecommunications," work- ities), they would be unlikely to invest disproportionately in facil- ing paper, Office of Plans and Policy, FCC, December 1984. ities they would not be allowed to use. 211 Ch. 6Satellite Communications 203 relating to balance is whether the existence of Option 4, the activist strategy of bilateral ne- satellites should be guaranteed by government gotiation, however, would almost certainly move regulation so as to provide security against com- the international communications industry away munications interruption or whether this function from ts present facilities structure, which on the can be provided by redundant cable capacity. U.S. side has till now meant the dominance of AT&T and COMSAT in the cable and satellite con- Any large shift to cables would have important sortiums, respectively, along with the PTTs. effects on INTELSAT and make it more likely that Again, outcomes are difficult to forecast, but, for INTELSAT could become seriously unprofitable, instance, the fortunes of the U.S. transatlantic sat- so the issues of facilities planning and competi- ellite applicants and the U.K.-led fiber optic cable tion for INTELSAT are closely linked. The recent group could very well be the subject of a bilateral FCC recommendations of approval for approxi- U.S.-U.K. communications agreement that would mately 330,000 voice-equivalent, transatlantic cir- regulate the conditions of facilities competition. cuits in new private fiber optic cables, without Such a bilateral agreement would be likely to in- much attention to its planning process, indicate clude restrictive features; nevertheless, the United that the Commission is acting without much re- States might be able to secure enough facilities gard for this link. decontrol that there would be a large increase Option 2, to avoid any policy of balance but in competition in U.S.-U.K. telecommunications. to continue to attempt control of total capacity, Competitive effects, such as pressure on prices, would leave the present regulatory regime in in- might also extend to the wider market in other ternational communications largely intact, with countries whose communications can reach the the important exception that, if carriers were free United States by transiting the United Kingdom. to construct cables and did so, INTELSAT's share of transatlantic communications (and that of other satellite providers) would probably decline. This would represent a substantial change in policy Access of U.S. Carriers to toward both INTELSAT and COMSAT (see discus- Foreign Markets sion of policy options on competition to INTELSAT , above.) It would have the advantage of partially The essence of the current regime in interna- meeting the long-standing objections of European tional communications is that U.S. carriers are PTTs to unilateral U.S. Government intervention barred from competing freely for the international in facilities decisions. (The favorable actions by communications business of either U.S. or for- the FCC and the State Department on cable land- eign residents. With deregulation firmly en- ing licenses for large capacity private fiber optic trenched as its domestic communications policy, cables, however, may have removed option 2 as the United States is now led to a number of spe- a possibility.) cific objectives in international communications policy. In light of the fact that pursuit of these ob- Options 3 and 4 would represent the abandon- jectives might engender conflict with important ment by the United States of the North Atlantic countries, they can be analyzed according to the Consultative Process as it is now structured and of following options: INTELSAT's position as the monopoly transcon- tinental satellite provider. They would also gibe 1. Give regulatory support and diplomatic rep- freer rein to technological experimentation as in- resentation to: a) carriers desiring to make dividual cable and satellite operators (including voice and other connections with foreign INTELSAT) attempted to provide specialized fa- carriers, b) data processing and enhanced cilities to meet differentiated market demands. telecommunications service providers wish- Option 3, where the FCC would oversee the ing to service the needs of U.S. and foreign process of facilities decontrol, might have a num- businesses, and c) U.S. multinational firms ber of outcomes depending on the reactions of desiring to establish private communications foreign governments and the ability of consumers networks. I n this option the FCC and the De- to circumvent restrictive regimes. partments of State and Commerce would do

212 204 International Cooperation and Competition in Civilian Space Activities

little more than facilitate carriers' efforts to with our principal communications partners, gain market access. who, after all, are also our principal allies. The 2. Formulate an activist policy of bilateral ne- advantage of this option is that both the source gotiations to secure interconnection (particu- of the conflict and effective negotiating strategies larly, message-telephone) rights in foreign could be determined on a country-by-country ba- countries for U.S. carriers Where possible, sis. This option of bilateral negotiation would also attempt to stimulate competition in all as- allow the agreements reached with one commu- pects of international communications by nications partner to put liberalizing pressure on negotiating direct access for U.S. firms to for- negotiations with another, since consumers might eign consumers. The United States would be able to circumvent the high prices of the latter likely be called on to extend equivalent ac- country by routing their U.S.-bound communica- cess to foreign firms in the United States. tions via the former. This aspect of bilateralism 3. Seek to accomplish the same objectives on might engender the greatest amount of conflict a multilateral basis through an effective but also the greatest deregulation. GATT agreement on international trade in services. Option 3 (the multilateral option) would not appear to be any more likely to succeed than op- Option 1 is essentially to continue present pol- tion 1 (the status quo) for telecommunications icy, with increased diplomatic representation for services as a whole, because any GATT agree- U.S. telecommunications service firms seeking ment on trade in services would have to take ac- access to foreign markets. Such a policy is feasi- count of the desires of the most restrictive coun- ble and desirable, as far as it goes, but it is doubt- tries. If and when domestic telecommunications ful that it would, in fact, result in market access is liberalized in all major OECD countries, sig- in many countries in the face of continued for- nificant gains in access for service firms could eign opposition. Only if domestic dereguiation probably be made through multilateral under- in our communications partners' home markets standings, but not before then. Nevertheless, a should proceed very rapidly, would effective ac- near-term multilateral agreement on trade-in serv- cess for U.S. firms be secured in this way with- ices should be pursued in any case in the tele- out conflict. Even then, while domestic deregu- communications area for the benefit of data proc- lation may be a necessary condition for access, essing and information firms. it is not a sufficient one, since U.S. firms could still be excluded.206 The differences between options 1 and 2 are matters essentially of degree. They are distin- Option 2, the activist policy of bilateral nego- guished by judgments about how much diplo- tiations is probably the option that would achieve matic capital to spend on attempting to gain ac- the greatest gains in market access for U.S. tele- cess for U.S. telecommunications service firms communications service firms. In this option, sub- in individual countries, particularly when the at- stantial bilateral and multilateral conflict, engen- tempt engenders conflict. If a significant effort dered by U.S. efforts to export its deregulation (option 2) is chosen, the fact that there are many policies into the international market, might en- U.S. actors on the international telecommunica- tail substantial foreign policy costs in our relations tions scene who officially or unofficially negotiate with foreign government entitiesnotably the "'That this will happen is the conclusion of one knowledgeable FCC, the State Department, NTIA, COMSAT, European observer (Guy de Jonquieres of the Financial Times). He notes that, while the PTT ministers of the EEC have agreed to open AT&T, the other international service carriers, a small percent of PTT procurement to competitive bidding, it is and, now, the would-be satellite and cable pro- only for the benefit of bidders from European countries. He spe- vidersraises the question of whether effective cifically expects most European governments to continue to restrict the opportunity for U S. firms, in particular IBM, to enter telecom- negotiations to serve the national interest can take munications markets unrestrictedly (Text of speech to the USTSA, place outside the framework of formal bilateral Washington 1)C, Apr 17, 1985, pp 41, 45 1 communications agreements.

213 Ch. 6Satellite Communications 205

International Trade in Satellite components of satellites and Earth stations, are Communications Equipment not completely closed.'" Despite the U.S. success in negotiating the bilateral agreements to Freer trade in telecommunications equipment open the wider Japanese telecommunications would help two important sectors in the United market to U.S. suppliers, the Japanese satellite Statesconsumers of telecommunications serv- market was specifically placed off bounds to for- ices, who benefit from using whatever cheaper eign suppliers in 1984, even though Japan is in or better imported equipment might be available, the special position of having an embarrassingly and the satellite communications equipment large trade surplus with the United States. The industries, which would like to export more to United States later succeeded in having this re- currently restricted markets. U.S. options for restriction partially removed, but how much actual ducing barriers to international trade in telecom- effect on sales this will have is uncertain. munications equipment include: Were the United States to single out satellite 1. Continue to follow a quasi-multilateral ap- communications equipment as a special target proach through the GATT process of open- for reducing trade barriers in European producer ing access to government procurement and countries, it would be an especially difficult task. the OECD process of controlling the terms On the one hand, many European countries, of export finance. This involves bilateral ne- rightly or wrongly, see U.S. satellite equipment gotiations to persuade other governments to makers as heavily subsidizedearlier in their de- put their PTTs under the government pro- velopment by NASA, more recently by DOD. curement code (or an equivalent agreement) Those countries which potentially offer competi- and to regularize their use of mixed credits. tion to U.S. satellite manufacturers have devoted Major departures from most-favored-nation large government resources to try/et reduce their treatment of U.S. trading partners would be national dependence on U.S. suppliers. While avoided in this option. they have been willing to purchase U.S. technol- 2. Aggressively enforce more trading reciproc- ogy where necessary, including satellite subsys- ity by political persuasion, threats of retalia- tems, they are not eager to see their fledgling in- tion, and bilateral negotiations. Take more dustries outcompeted by technologically more positive government action to promote U.S. capable U.S. competitors. exports through subsidized export credits and industrial policy. If reciprocal market ac- Option 2 would take more aggressive govern- cess can not be brought about, take steps ment action to promote exports and secure re- selectively to close the U.S. market to coun- ciprocal market access. Itis an alternative to tries that restrict U.S. exports. striving fora more open international trading environment in satellite communications equip- Opinion appears to be divided over whether ment. Exports might be supported by making the current policy, option 1, will actually be ef- Government-subsidized export credits available, fective in opening the Japanese market to U.S. by attempting to use political influence to pro- satellite equipment exports. (It is not expected mote foreign sales, or by using foreign aid pro- to do so in the immediate future.207) It clearly has grams to subsidize sales to d'veloping countries not opened up European markets, although these through mixed credits. Government subsidy of markets, particularly for specialized telecommu- export activities involves distortions in the oper- nication; and data processing equipment and ation of the market system. insofar as other coun- "In telecommunications equipment as a whole in 1983 the De- tries seem to be engaging in these practices, the partment of Commerce forecasted that Japan would import only United States may decide that in defense of its $210 million in 1986 from all countries, compared to a total Japan own firms it can do no less. market of $6.5 billion and Japanese exports of $2.6 billion (Inter- national Trade Administration, "Country Market Survey Telecom munications Equipment, japan," April 1983. Nevertheless, Japan "'Several U.S telecommunications equipment firms have also appears to be making an unprecedented effort to encourage im formed Joint ventures with European firms with the object of thereby ports (Susan Chira, "Japan Urges Companies to Buy Foreign gaining some access to their markets, among other reasons (e.g., Goods," New York Times, Apr. 23, 1985) AT&T with Olivetti and Fairchild with Alcatel-Thompson).

214 206 International Cooperation at.. Competition in Civilian Space Activities

Imposing retaliatory trade barriers in he U.S. is being done in the NASA Advanced Commu- market in order to secure the opening of foreign nications Technologies Satellite (ACTS) program. markets might succeed, or it might engender further retaliatory measures by the countries tar- Since Congress provided funding for the ACTS geted.209 Because they involve breaching the program in the current budget, the following options relate to the scale of the program in future most-favored-nation principle, engaging in such years: practices in many sectors runs the risk of induc- ing escalatory responses from other governments, 1. Fund the full ACTS program, in one of its ex- ultimately restricting interna.ional trade as a isting versions, including the flight test of the whole and leaving everyone worse off.210 Judi- experimental satellite. cious use in individual sectors, such as telecom- 2. Continue to fund the research programs on munications equipment, could serve the purpose the ground but postpone from year to year of indicating the seriousness with which the U.S. a decision on construction and flight testing regards the barriers in those sectors and could of the spacecraft until clearer support for one serve as a bargaining chip.211 Even if the Govern- or more of the three supporting arguments ment should decide to use public resources to discussed earlier occurs. For example, the support particular industries, whether satellite United States might want to postpone com- communications should be singled out in the mitment to a space test until a sizable mar- competition for such government resources ket for satellites with scanning spot beams would remain to be determined. There are, of emerges and potentially competitive govern- course, many other national demands for gov- ment programs abroad have committed ernment budgetary resources in addition to ex- funds to space testing of similar technology. port subsidies, a fact that has led the Reagan 3. Continue funding only for those research Administration to propose the curtailment of programs that can be developed on the Export-Import Bank funding in the 1986 budget. ground (e.g., the baseband processor for onboard message switching), but make a de- Research and Development Subsidies cision to leave flight testing and its funding to the private sector, at its option. Another way of attempting to improve the in- 4. Return NASA satellite communications re- ternational competitive position of the U.S. sat- search to the very low levels of previous ellite equipment industry would be for the Gov- years, leaving responsibility for maintaining ernment to carry out research and development U.S. competitiveness in communications sat- in advanced communications technology that pri- ellites to the private sector. vate manufacturers seem unwilling or unable to finance with their own resources. This is just what Budgetary and foreign response considerations will clearly continue to weigh heavily in future 2°90ccasiuned by the $37 billion 1983 bilateral trade deficit with decisions on the ACTS program as they have in Japan, a number of legislative proposals have been directed at the the past. There are significant arguments in fa- overall trade deficit and at the telecommunications equipment trade deficit in particular, among them a 20 percent surcharge on all im- vor of the programpromoting the international ports from Japan for 3 years and a boycott of Japanese tele- competitiveness of U.S. satellite manufacturers, communications ecwipment until the Japanese telecommunications the economic efficiency of the U.S. economy, market is fully open (Washington Post, Jan 2', 1985, p DI) See also U S Congress, Senate, Committee on Finance, Hearings on and the danger of orbital crowding (see discus- the Telecommunications Trade Act of 1984 (S 2618) Before the Sub- sion of these arguments above). If none of these committee on International Trade, Sept12, 1984 arguments in favor of the program are deemed 210U S Congress, Joint Economic Committee, "1985 Joint Eco- nomic Report," Washington DC, Apr. 18, ;985. ch 6. to be strong enough, the U.S. Government would "'Congressional tatements also have an impact. Such statements certainly be able to apply the signif -ant resources at a March congressional hearing were reputed to have "shocked of option 1 to other NASA projects, to other Gov- the Japanese and may have contributed to their willingness" to alter complex proposed telecommunications products regulations that ernment purposes, or to deficit reduction. A lot would disadvantage U S suppliers (Washington Post, "Japan Softens depends on whether sizable markets for either Stance in Trade Talks," Mar 19, 1985, p Dl) Ka band satellites of any kind or for ones incor-

2 1 5 Ch. 6Satellite Communications 207 porating ACTS-type ,ophisticated scanning spot ellites will be priced out of the market for vol- beams can be realistically forecasted. ume communications. In that event the eventual market for the ACTS innovations could be too Options 2 and 3 are ways of hedging the Gov- small to justify a large program. ernment's position by limiting it to the relatively less expensive, but arguably critical research that Option 4, essentially the abandonment of an can be done on the ground. Option 2 would give ongoing program funded by Congress, would be the U.S. Government a way of waiting to see if an extreme measure (perhaps justified by the gen- foreign governments are first attempting trade- eral budgetary situation), because much of the impacting R&D before it does the same. At the potential future benefit from the current research present time foreign governments have not yet effort would undoubtedly be lost. committed significant funds to flight test programs for satellites with such advanced features as scan- Participation in the International ning spot beams. Congress could take the wait- Telecommunication Union and-see attitude implied by option 2, with the risk that the time lags involved could give foreign In the face of growing "politicization" of ITU manufacturers a significant, avoidable advantage. conferences and technical committees, the It would open the possibility that the executive United States seems to have three broad options. branch could reach an understanding with spe- It could: cific foreign governments about the level and type 1. stay in the ITU but take an increasingly con- of their export-relevant R&D subsidies for communication satellites. The funding level and na- frontational posture, using the threat of withdrawal from the organization to attempt to ture of the ACTS program could be the U.S. bar- prevent votes against the maintenance of gaining chip in such discussions. principles important to the United States; The case can be made here (as in other R&D 2. reduce or end U.S. participation in the ITU contexts) that the Government's best contribu- and establish U.S.-led, ad hoc international tion is at the research rather than at the devel- arrangements for sharing the radio frequency opment stage. The more general the research, the spectrum;2'2 less danger that the Government, in attempting 3. attempt a more flexible approach in which to pick the specific configurations of ideas that a broad range of telecommunications and the rapidly changing satellite market will adopt, other issues, negotiated in the ITU and else- will pick commercially nonviable ideas. Option where, are treated as "linlyz-d." The empha- 3 would take the Government out of the expen- sis here would be on a centralized bargaining sive and risky development end of the business. strategy with developing countries intended It would also preclude the research planned by to maximize U.S. interests across the board. the private sector from its own funds using the In this option, U.S. delegations to confer- experimental ACTS satellite. Of course, the ab- ences and committees would need to have sence of a government development program very high levels of both telecommunications might in the longer run stimulate private sector industry and foreign policy knowledge. development efforts. The United States faces a dilemma here. On The Government could also use either option the one hand, the international regulation of 2 or 3 to wait until the outcome of technological telecommunications seems to some observers to competition between fiber optic networks and be in danger of further politicization and of bloc satellites in U.S. domestic communicationsand voting to the detriment of U.S. telecommunica- thus the demand for communication satellites tions and other interests. Option 1, a confronta- becomes clearer. There is a clear possibility that both domestic and international fiber optic net- 212For a fuller discussion of these options and the middle course works will have sufficient capacity and coverage of participating fully in the ITU but adhering only selectively to its agreements, see National Telecommunications and Information Ad- by the mid-1990s that new communication sat- ministration, op. cit., pp 35-55

216 208 International Cooperation and Competition in Civilian Space Activities

tiona I approach within the organization to meet might have to make under option 3, could be tnis, has been been discussed within the Admin- more attractive budgetarily. istration as a means to minimize th ! damage to U.S. telecommunications interests (e.g., in the allocation of the geostationary orbit) without induc- ing the breakdown of the international telecom- Assistance to Less Developed munications system. Countries In option 2, withdrawal from the ITU, the Assistance in satellite communications is one United States faces a significant risk of a break- among many potential elements in U.S. aid pro- down in the international system of assigning grams. Because of the large number and com- radio frequencies and developing international plexity of individual country programs, because standards for telecommunications equipment. program elements are interrelated, and because The United States also runs the risk that if the in- host-country government officials are actively international system continued to operate without volved, Congress necessarily leaves detailed plan- U.S. participation, it might act with increasing ning of such programs to program officials. For disregard for U.S. interests. Either a proliferation example, the role of receive-only rural satelli'e of inconsistent national regulations or a coherent transmission, through which educational televi- international regime that was injurious to the sion programs can be made available to villagers, United States could develop and damage both is viewed by AID in the context of the actual agri- U.S. economic and national security interests. It cultural and social development activities to is not clear that U.S. technical leadership and which the information is related and in compar- economic power would suffice to induce the in- ison to alternative means of accomplishing the ternational community to follow U.S. telecom- educational objectives. The role of satellite communications preferences in the absence of our munications in national systems of addressable participation in the ITU. telecommunicationstelephone, telegraph, and Option 3 is the diplomatic option, where the telexcan also only be assessed effectively in the avoidance of conflict continues to be an impor- context of the country involved, its existing and tant value in U.S. foreign policy. It might lead to planned national telecommunications system, its the United States being induced to accept a spec- existing and planned domestic regional telecom- trum-and-orbit regulatory regime that we would munications systems anditsdevelopment otherwise oppose. The attractiveness of this op- program. tion depends on how important the linkages to Satellite communications options, like those other foreign policy objectives are and on how concerning other aid program elements, are typ- deleterious the ITU actions opposed by the ically formulated at the program level, even if United States might be. Because important U.S. higher levels in the U.S. Government may ulti- economic and military interests are dealt with by mately become involved in program and fund- international bodies that regulate the spectrum ing decisions. This country-specific nature of as- and orbit, as is rarely the case in other individ- sistance programs makes it difficult to formulate ual international fora where the United States can general options for satellite communications as- be outvoted by developing countries the United sistance, ones that would have worldwide appli- St .tes is likely to prevail in the ITU in the face cability, and thz, more detailed country-program of significant opposition only if it is willing to options that might Le formulated for given coun- make a large investment of political and econom- tries' use of satellite communications are outside ic resources in a variety of bilateral and multila- the scope of this assessment. Consequently, we teral contexts. For this reason, options 1 and 2, do not set out options for development assistance where the United States would attempt to live in satellite communications here. Rather we high- with significant defeats in the ITU and would light a number of issues in which satellite com- thereby save the investment of resources that it munications figures prominently, which Congress

217 Ch. 6Satellite Communications 2C9 may find it useful tc explore with relevant offi- tions components embedded in particular cials in its oversight of country development assis- agricultural, health, education, industrial, tance programs and the export credit program. and regional development projects.2' 3 Cur- Country-specific considerations for satellite rent AID policy prefers the embedded component approach.2 communications include: 2. Are there development assistance programs the goals of U.S. assistance in the country for specific countries that Congress can iden- (i.e., the relative emphasis given to rural de- tify as underinvesting in satellite communi- velopment, region?I development, industrial cations technologies for rural and remote development, social and institutional devel- area residents? New technologies allowing opment, general support of the regime, the much smaller and less expensive receiving support of parr. !ar power centers and in- dishes and other advances are important rea- stitutions within the country, etc.); sons to make this examination. the extent of U.S. and other industrial-coun- 3. Should Congress finance more satellite com- try use of mixed credits c)r financing equip- munications R&D directed specifically at the ment exports to the country; needs of developing countries? the volume of assistance the United States 4. Given the differing goals of U.S. programs gives to the country through bilateral v. mul- in various countries, can countries be iden- tilateral channels; tified in which U.S. mixed credit financing the philosophies toward development poli- of satellite communications systems is indi- cy of the country's government and the cated on important development assistance various donor agencies and organizations or political grounds (in addition to its use- through which the United States gives assis- fulness in financing exports of U.S. satellites tance (e.g., AID and the World Bank); and ground equipment or protecting against the presence or absence of special country the mixed credit programs of other coun- characteristics enhancing the usefulness of tries)? satellite communications, such as large geo- 5. What are the relative political advantages for graphical size or insularity and other factors the United States of multilateral v. bilateral that limit the feasibility of terrestrial transmis- telecommunications assistance programs sion modes; and compared to the general thrust of the U.S. the difficulties that the country has had or aid program? Considering U.S. need to deal is likely to have with technology transfer in with developing nations within international advanced technology systemsparticularly telecommunications organizations, does in training and maintenance. telecommunications constitute a special case This variety of country-specific considerations for directing relatively more (or relatively less) assistance through multilateral channels demonstrates the difficulty of formulating general policy options toward satellite communications (e.g., the Center for Telecommunications proposed by the Maitland Commission or assistance. Often the issues that are relevant to the World Bank)? satellite communications are either country- or program-specific or they are embedded in issues whose scope reaches far beyond the relevant satellite communications aspects. Nevertheless, several issues in which satellite communications figures prominently can be highlighted: 213In early 1985 the Senior Inter gency Group on International Communications and Information Policy recommended to the Na- 1. How much emphasis, financial and other- tional Security Council that the telecommunications development be given strategic priority on the U.S. foreign policy agenda be- wise, should U.S. development assistance cause of the desirability of promoting the free flow of information, programs give to the development of a coun- U 5 exports, ar4 c.conornic development ("U.5 Development try's general telephone/telegraph/telex infra- Communications Assistance Programs," Feb. 1, 1985). "'See Policy Determination PD-10, U 5 Agency for International structure, as opposed to the communica- Development, op. cit, Feb. 17, 1984

218 210 International Cooperation and Competition in Civilian Space Activities

Synthesis and producers. These objectives may often require the furtherance of competition, which, in A theme that runs through this discussion of turn, may engender conflict. A broad judgment specific policy areas is that there is frequently a about how the United States should most effec- tension between international competition and vely make its way in the general world of co- cooperation as means to further the U.S. national operation and competition, then, is one of the interest. Avoiding excessive conflict with other key factors in choosing among the various op- countries through international mechanisms (cl- tions presentec for specific satellite communica- operation) is an imoortant value in itself. But so tions policies and is an important link with the is the furtherance of the legitimate objectives that Government's broader international economic the United States has in support of its consumers policies.

APPENDIX 6A.-ADDITIONALANALYSIS OF THE SATELLITE COMMUNICATIONSSERVICE INDUSTRY Demand for International Satellite Demand for International Communications: Factors Influencing Telecommunications as a Whole Its Growth and Scenarios for the 1990s Historically, U.S. international telecommunications has grown at an impressive rate. During the 1972-84 Policy Issues and Demand period, U.S. carriers' international real revenues grew As the discussion in chapter 6 has demonstrated, at an annual average rate of approximately 13 percent the future growth of satellite communicationsa key (see table 6-1). Growth between 1980 and 1983 was pzrameter that will affect virtually all important 'J.S. temporarily slowed by recessionary conditions, but international space and telecommunications policy is- even during this period, when other sectors of world sues during the remainder of this century. While the trade experienced declines, real U.S. international impacts of high or low demand for satellite commu- telecommunications revenues grew at rates of about nications services are reasonably clear, our ability to 8 percent per annum (except in 1982, when large cuts forecast what demand will be is limited. This is bein AT&T's international telephone rates reduced rev- cause satellite communications demand is no;my enues more than they stimulated demand). the result of overall economic activity and the price Estimates of the future growth of international tele- of the satellite services, difficult in themselves to pre- communications are available from severl sources. dict, but is also strongly affected by the availability and For 1985, the Department of Commerce projects a the pi ice of closely substitutable terrestrial communi- growth rate of 14 percent. U.S. telecommunications cations modes. Most important of all, the demand for carriers also expect rapid growth of international com- satellite ct, mmunications is tremendously affected by munications to continue In November 1984 forecasts the in Itutional and regulatory structures governing prepared for a working group meeting in connection both _ables and satellites. with the North Atlantic Consultative Process, the U.S. This section discusses in detail the factors influenc- international service carriers (USISC)2 projected the ing the demand for international satellite communi- demand for U.S.-Europe common carrier communications and shows how different scenarios for its cations (including new services) to increase at an aver- growth can be the result of different outcomes foi age annual rate of 16.3 percent during the period these factors) 1985-95. They foresee demand for telecommunications capacity of 82,000 voice-equivalent circuits in 1995 (table 6A-1, last line).'

21n 1983, the mayor U.S. companies involved in the planning process were AT&T, RCA, Western Union, GTE, MCI, ant' ITT and COMSAT. 'This growth rate refers to the forecast of November 1984 Table 6A1 also 'A similar treatment of the demand for U S domestic communications is presents 19rrecasts (which forecasted a significantly higher growth rate beyond the scope of this assessment, but it is treated in less detail in i of 17 5 pert .. 0 by carrier and by mayor destination country The U.S. carri- 6 and app 68, in connection with the NASA ACTS program and v. th satel- ers' European counterparts did not expect as rapid growth in overall transat- lite communications equipment issues lantic telecommunications demand in 1983 as did the U.S carriers. Both

219 Ch. 6-Satellite Communications 211

Table 6A-1.-U.S.-Europe Telecommunications This rapid growth is expected in all sectors except Forecasts, 1985.95' (equivalent voice quality circuits) TV transmission by satellite. COMSAT's 1983 forecast projects total half-channel hours of occasional-use tele- 1985 1990 1995 vision to incre:.se from 2,180 in 1985 to 2,240 in 1995, Major traditional carriers: and the number of 40-MHz transponders for full- United Kingdom: period television to increase from three in 1985 'o four AT&T 5,68912,15824,782 ITT Worldcom 289 501 775 in 1995. In both cases, this is less than a 3 percent MCIIWUI 299b 484 743 annual growth rate. Western Union 15 143 631 The U.S. international service carriers forecast that RCA Globcom 229 354 479 "new services," including videoconferencing, facsi- Total above 6,521 13,64027,410 mile, electronic mail, and computer traffic, while Germany: growing rapidly from a small base, will account for AT&T . 2,358 5,458 11,400 ITT Worldcom ...... 82 129 179 only 5 percent of total demand by 1995 (table 6A-1).5 MCl/WUI 61b 76 94 That new services will be a small fraction of total de-

Western Union ...... 5 49 206 mand is in considerable dispute. A 1980 NASA study, RCA Globcorr, 67 92 117 for instance, projects very large worldwide videocon- Total above.... 2,573 5,804 11,996 ferencing demand in the 1990s. Videoconferencing France: alone is forecasted to constitute approximately one- AT&T .... 1,780 4,774 10,922 ITT Worldcom 48 80 130 third of total world telecommLnications demand in MCl/WUI 49b 66 85 the year 2000.6 Several of the recent applicants for per- Western Union ... 4 34 154 mission to construct transatlantic satellite and cable RCA Glob...om 35 53 73 facilities have also stated ;n their applications to the Total above 1,916 5,007 11,3(34 Federal Communications Commission (FCC) that they Other CEPT countries. 6,157b13,481 30,670 expect videoconferencing demand to be stil- ltial 834b New services n.e.c.... . 1,766 4,326 but have not given quantitative estimat' the Total traditional major carriers . 18,00139,69885,766 growth; RCA in its application, for instance, that Other U.S. carriers: "teleconferencing should increase dramatically." GTE Sprint 356 2,777 7,673 Minor carriers ...... 1,143 2,625 4,761 The Supply of Capacity In International Total CEPT countries° 10,500645,10098,200 AT&T share 83.5%81.9%82.4% Communications [Revised forecast Nov. 1984) 18,09237,161 81,888 Despite rapidly expanding demand, the discussion a"Europe" here is the European Conference for Post and Telecommunications (CEPT) member countries' Austria, Belgium, Cyprus, Denmark, Finland, France, of facilities planning at the FCC has been concerned Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Norway Portugal, with excess capacity, rather than shortage.' Some ex- Spain, Sweden, Switzerland, Turkey, United Kingdom, and Yugoslavia. aMCI estimates for 19613 are included in the 1005 totals 'These numbers do not refer to videoconferencing, which is included in aUnited Brands (TRT Telecommunications subsidiary), McDonnell Lfouglas (FTC Communications subsidiary) and GTE (Hawaiian Telephone Co. subsidiary) Es- new services timates for total circuit demand, including estimates for these carriers, were sAT&T, the principa: ...znnributor to the USISC forecast, nevertheless, in- provided to the FCC by AT&T and were constructed by adding up dm, estimates tends to participate fully in any expanding market for yukoconferencing that of the major carriers (including GTE Sprint) and adding to them an estimate for materializes. It recently introduced a U S -U.K. videoconferencing tariffIt these carriers The intimate given In this table for these carriers was calculated has also signed an agreement with the French PTT to provide transatlantic by subtracting the Individual corns's' estimates from the AT&T overall industry videoconferencing for multinational firms, using a system of INTELSAT sat- estimate ellites for transatlantic transmission and Telecom 1 for European transmis- dThe total estimate includes an unknown error due to differing assumptions on market shares the carriers used in constructing the forecasts. For instance, FCC sion (Satellite News, Oct 15, 1984, p. 4). And it has now introduced a new analysts believe that AT&T's forecast for itself of 77 7 thousand circuits in 1996 domestic C-band satellite videoconferencing service named Skynet Digital is not based on an assumption that GTE Sprint would have anywhere near the Service (Ilaid , Oct. 22, 1984, p. 8). 7,700 circuits that GTE Sprint forecasts for itself and that therefore the total 'Future Systems, Inc , "Cross-Impact of Foreign Satellite Communications forecast is somewhat too high due to double counting on NASA's 30/20 GHz Program," NASA Lewis Research Center, August 1980, SOURCE Communications to the Federal Communications Commission in FSI Report No. 251It contains a detailed world satellite communications August and September 1983 by the listed carriers, except the revised demand forecast, by type of service, pp 24-85, including extensive quanti- forecast, which is from the Report of the North Atlantic Consultative tative demand estimates for videoconferencing. Since the authors give a de- Working Group to the CEPTIUSA/Teleglobe Canada Senior Level tailed analysis only for satellite transmission, it required minor calculation Meeting, Jan 8-11, 1985, p 24 J relate their videoconferencing projection to total telecommunications demand (To make these calculations, we used their assumption that 5 to 8 percent of nonvideoconferencing long-distance demand will be ccrried on satellites in North America, Europe, and Japan (higher in other world regions.) Future Systems, Inc., ibid., table 3-25, p 80. (footnote continued) 'For instance, see Federal Communications Commission, "Notice of Pro- groups revised their forecasts in November 1984, and the revised forecasts posed Rule Making," released Nov 7, 1980, in CC Docket No. 79-184, "In- are relatively close See table 6A-3 for the European carriers' forecasts Car- quiry into the ?oboes To Be Followed in the Authorization of Common Car- rier forecasts are also incorporated in the INTELSAT Traffic Data Base, see rier Faolities To Meet North Atlantic Telecommunications Needs During the below note 11 1985-1995 Period 220 212 International Cooperation and Competition in Civilian space Activities

cess capacity is, of course, required to maintain serv- They cover a range from 106,000 to 145,000 U.S. - ice quality in the event of a facilities outage' and to Europe circuits in 1995. guard against greater-than-expected demand on the They do not include satellite or fiber optic cable system. When capacity is added in large increments capacity supplied by private U.S. or foreign com- every few years, such as in the TAT-8 and TRANSPAC- munications firms. 3 transoceanic cables or in INTELSAT VI facilities, ex- A single cable or large satellite, such as the TAT- cess capacity in the early years is inevitable if short- 9 cable (included in the USISC plan but not in ages are to be avoided before the next capacity addi- the COMSAT or FCC plans), can by itself produce tion. But other reasons relating to the industry a large excess supply of capacity. structure of regulated industries, which we discuss be- The amount of transatlantic cable capacity is poten- low, may also be involved. tially even more uncertain than indicated in the plans. As part of the FCC's formal facilities planning proc- Fiber optic technology is evolving rapidly and becom- ess, various facilities plans have been proposed' by ing more efficient in the sense that improved digital communications carriers or groups of carriers to meet multiplication techniques are increasing the number projected transatlantic telecommunications demand. of telephone circuits that can be carried on a given Table 6A-2 lists the plans proposed in 1980 by the U.S. cable. Furthermore, large additional cable capacity international service carriers as a group (USISC), plus can be provided in cables by straightforward design COMSAT, as well as a reference plan the FCC con- changes (e.g., three working fiber pairs rather than structed for analytical purposes to determine when ca- two). What is holding down the size of cables (partic- pacity would equal demand. Some of the features of ularly the USISC planned facilities) is not the limita- these three plans are: tions of the technology but the size of the demand They differ principally in when they schedule the and the regulatory policy requiring a balance between transatlantic cables. satellite and cable facilities.9

allestoraton of service of different given qualities after a facilities outage 9A case in point is that TAT-8 was originally designed by AT&T to have requires different types of backup facilities The new compeotimi develop- 12,000 basic circuits. With an assumed 30-1 multiplication factor, the cable ing on the North Atlantic among carriers who may desire different qualities was then rated as capable of carrying 36,000 simultaneous telephone con- of restoration, the large size of the individual TAT-8 and INTELSAT VI facili versations (or some lesser number of telephone, record, data, and video cir- ties, and the new netsvork management techniques that allow carriers to cuits, since the 3-to-1 multiplication factor does not apply to the latter types make optimal use of facilities, has made the discussion more complex in of service). It is now expected to have a 5-to-1 multiplication factor. (U.S. recent years IU 5 International Service Carriers submission to the North At- Carriers' submission to the North Atlantic Consultative Working Group lantic Consultative Working Group meeting, Ian 31-Feb 2, 1984, Paris, meeting, Jan 31-Feb. 2, 1984, Pans, France, pp. 15-16.) To compensate for France, p 29 the improved performance of the cable-a 54o-1 multiplication would re-

Table 6A-2.-Representative Transatlantic Facilities Plans for U.S.-Europe Telecommunications, 1985-95

USISC' 1983 demand USISC Plan 1 COMSAT Plan 1 FCC reference plan Year Forecast Type Capacityb Type Capacity° Type Capacityb

1985 ... . 19.5 34.0 34.0 34.0 1986 . 23.0 1 -VI PP 45.9 I-VI PP 45.9 I-VI PP43.6 1987 .. 27.1 !-VI 45.9 1 -VI Spare 45.9 1VI Spare 43.6 1988 . 33.0 TAT-8 81.2 TAT-8 81.2 I-VI MP1 49.4 IV1 MP1 I-VI MP1

1989 ...... 38.6 IV1 MP2 88.4 I-VI MP2 88.4 1VI MP2 54.3 1990 45.1 88.4 88.4 54.3 1991 .. 52.6 88.4 88.4 TAT-8 81.1 1992 .. 62.5 TAT-9 115.6 88.4 81.1 1993 72.7 I-VI PP 129.8 I-VI PP 102.6 I-VI PP93.0 I-VI Spare I-VI Spare 1-VI Spare 1994 84.5 129.8 102.6 93.0 1995 98.2 I-VII MP1 145.1 1-VII MP1 117.9 1-VII MP1 106.0c KEYFiber optic cables-TAT-8 and TAT) Satellites-INTELSAT VI Primary Path WI PP INTELSAT VI Primary Path SpareIV1 Spare INTELSAT VI Major Path 1 1 -VI MP1 INTELSAT VI Major Path 2 I-VI MP2 INTELSAT VIIMajor Path 1 IVil MP1 Satellite designs identical except for FCC satellites, which are lower capacity L designs 'USISC U S International Service Carders TM principal ones are listed In table 8A1 ',Thousands of voice grade circuits cThe FCC reference plan elimlniCad access capacity In 1905 when compared with the then-current 104,f 16-circuit USISC 1905 forecast SOURCE Demand forecast 1963 forecast from table 6-Al Facilities Federal Communications Commissir,n, "Notice of Proposed Rulc Making,' released Nov 7, 1980, In CC Docket No 79-184, "Inquiry into the Policies to be Followed in the Authorization of ( corlmon Carder Facilities to Meet North Atlantic Totecommunica- lions Needs During the 1996.1995 Period," pp 20-36

221 Ch. 6Satellite Communications 213

By early : _85, the FCC had received applications years, and for AT&T and other U.S. carriers independ- to install satellite capacity of about 120,000 circuits ently the CEPT forecast has the satellite share remain- and fiber optic cable capacity of about 330,000 r- ing at over 50 percent. cuits for transatlantic communications, in addition to the capacity additions listed in table 6A-2.1° These DEMAND FOR INTERNATIONAL SATELLITE large proposed capacity additions call into question COMMUNICATIONS IN THE 1980s the FCC planning process, the demand projections of The demand for international satellite communica- the USISC carriers and their European counterparts tions can be expected to continue to grow rapidly in or both. the 1980s, because major capacity on the expected competing transmission mode, fiber optic undersea Satellite Communications' Share cables, will not be in place until 1988, when the TAT-8 cable is scheduled to be operational. Other cable European communications carriers (CEPT) expect landing applications, which have been filed with the that satellites will maintain their share of transatlanu_ FCC, are for cables to be constructed in the 1988-92 telecommunications at least through 1995, according period, as well. to projections submitted in connection with the North Atlantic Consultative Process (table 6-A3).11 In all DEMAND FOR INTERNATIONAL SATELLITE COMMUNICATIONS IN THE 1990s suit in a capacity of 60,000 circuitsthe originally contemplated three-fiber- pair cable was replaced by a two-fiber-pair cable fibid , p 12) with only 8,000 Whether international satellite communications will basic circuits, which would have a capacity of approximately 40,000 circuits continue to grow as rapidly in the 1990s as interna- These data indicate that capacity estimates for the transatlantic cables may be alterable by design changes, by improved multiplication techniques, and tional communications as a whole is highly uncertain, by investment in multiplication equipment emoodying these techniques however, and will depend on the following factors: 'oSee also the discussion of alternative satellite providers in ch 6 The additional 330,000 circuits of cable capacity are in the cable projects of Catle The price advantage/market preference, if any, & Wireless and its U 5 partners (felOptic) (license granted) and Submarine of fiber optic over satellite transmission for high - Lightwave Cable Co (license recommended by the FCC), of 80,000 and volume applications. 250,000 circuits, respectively "The USISC forecasts for circuit demand presented to the North Atlantic The strength of industry-structure and other in- Consultative Process (table 6A-1 above) are not broken down by the shares centives to the adoption of fiber optic technology. for satellites and cables Data submitted to the INTELSAT Traffic Data Base, The growth of undersea cable capacity and the which includes a U 5 submission based on data from U 5 carriers, however, is roughly consistent with the CEPT forecast. For instance, satellites are presence or absence of regulatory restrictions on projected to have 1995 demand for 11,312 4khz-equivalent satellite circuits its use. between the United States and the UniteJ Kingdom (INTELSAT, Contrib.r Lion of the Director General BG-56-10E W19(83, Aug 2, 1983 ) Althougl- not strictly comparable this may be compared to the major USISC carrier. U 5 - Discussion of Uncertainties in Factors U K projection in table 6-3 of '7,410 circuits to get a rough idea of the satellite share Affecting the Demand for Satellite Communications Table 8A-3.Satellite Share of International Communications Capacity CEPT EXTENT OF PRICE ADVANTAGE OF OR Master Plan Projections' CONSUMER PREFERENCE FOR FIBER OPTIC UNDERSEA CABLES 1986 1990 1995 Any basic advantage that fiber optic cable technol- (circuits) ogy will have over satellite technology for use in U.S. AT&TCEPT 18,02333,08667,533 % satellite 52.2%56.0%54.7% long-distance international communications in the 1990s will rrobab!v depend more on technical fea- Other USISC carriers-CEPT 2,338 3,465 5,241 % satellite ...... 57.7%57.7%59.0% tures than on cost,14 because the difference in cost Total USA -CE PT '1.0,362 36,54372,766 % satellite 52.8%56.1%55.0% AT&T share of total demand . 88.5%90.5%92.8% (Revised forecast Nov. 1984i 20,82938,32983,640 "Europe" is defined Mrs as the European Cmfernce for Post and Telecom. munications (CEPT) beircult protections include "new sob/ices" and are broken down by individual '2By "cost," we refer to the investment cost of the communications and years, facilities and European countries In the source document. maintenance facilities and the cost of operating them, per unit of communi cations Since the investment cost is the most important cost component, SOURCE' Conference Eurepien des Administrations des Poste it des Telecom. municatlons (CEPT), "CEPT Master Nan, Transatlantic Facilities Re- cost estimates are sensitive to the depreciation periods assumed for cables quirements, 1906-1905," January 1904, except the revised forecast, and satellites and to the discount factor used in calculating present values. which is from the Report of the North Atlantic Consultative Working An economic evaluation of cost will usually be different from an accounting Group to the CEPT/USA/Teleglobe Canada Senior Level Meeting, Jan evaluation and both cost concepts should be distinguished from price Both 611. 1906, p 24 average and marginal cost concepts are used in the discussion. 9 9 0 214 International Cooperation and Competition in Civilian Space Activities

Is not likely to be large for long-distance communica- Figure 6A1.Cost of Satellite vs. Cable Transmission tions, such as transatlantic or transpacific communi- (Addressabla Communications): Conceptual Diagram cations. In any case, the prices charged users of the alternative satellite and cable facilities may not bear a dose relation to cost Cost.Not long ago it seemed that advanced satellites would have a large cost advantage over fiber optic cables." Rapid advances in fiber optic technology have now convinced many experts that fiber optic cables will eventually be less costly than satellites over substantial distances." At very long distance; however, satellites are expected to retain some cost advantage because transmission cost by satellite is nearly invariant with distance, while transmission cost by cable is not." Figure 6A-1 is a conceptual diagram that illustrates how these characteristics result in a breakeven point that may affect the choice of mode in international communications investment. Techno- logical forecasting, difficult enough for all technologies, is especially difficult in telecommunications due to the rapidity of fundamental change and the flow Current 1990s Distance of innovations. Nevertheless, in OTA's judgment, fi- breakeven breakeven ber optic technology will probably experience greater distance distance cost reduction than satellite technology. This judgment The horizontal lines for satellites indicate that average satellite is based on the premise that satellite technology is now transmission cost per circuit -year does not vary by distance for CUP more mature than fiber optic technology and that con- rent and future generation models and that futum cost is lower than siderable "learning economies" are still available for current cost. The rising curved lines for fiber optic cables indicate that average cost for both current and futum generation technology the latter." Both technologies have further room for does vary with distance, but that the cost Increase per mile declines fundamental innovation, and substantial R&D is beas distance increases. ing done in both. However, because light wave-guide NOTE Diagram is constructed to illustrate the situation when breakeven technology is farther below its theoretical information distance increases markedly for 1900's technology capacib: limit than microwave transmission from satellites, and because the latter is constrained by practical interference problems, fiber optics appear to have the better chance of experiencing innovations that would significantly reduce costs. Thus, while the breakeven distance in the 1990s should be regarded as highly uncertain, it is likely to increase. One further important aspect of the technological SFor Instance, see Future Systems, Inc , "Transmission Cost Comparison for Satellite, Fiber Optics, and Microwave Radio Communications," FSI Re- competition between cables and satellites in long- port No 107, Gaithersburg, MD, May 1980 Since facilities cost is most of distance international communications is also illus- the cast of transmission, the cost concept referred to is lung-run average cost trated in the diagram. For the long distances typical 'Industry sources surveyed by telephone in 1984 estimated that the breakeven distance will be in the 800 to 1,000-mile range in the late 19805 It is of transatlantic and transpacific communications and expected to increase in the 1990s of communications to and from South America, sat- ',All current commercial satellite transmissions travel roughly 44,600 miles roundtrip to the geostationary orbit and back, regardless of the terrestrial ellites and cables may not differ very much in trans- distance between the sending and receiving points The transmission cost mission cost, even if satellites are less costly than ca- is thus the same regardless of distance (for one-hop transmissions) Converse- bles." This is because, while the transmission cost for ly, since longer cables cost more to lay than shorter ones, cable transmission cost varies with distance Two-hop satellite transmission is approximately cables will increase with distance, it will not increase twice as costly as one-hop transmission, it should be i,oted, however 1See, e g ,J Shubert, "Progress in Optical Communication Technology," "Below the breakeven distance, fiber optic cables are expected to have Telecommunications, July 1983, Global Edition, vol 17, No 7, p 35-1In a substantial cost advantage Within the United States, therefore, it is likely a 1984 press report, AT&T Bell Laboratories announced the development that carriers will use fiber optic cables for dense trunk routes. At a 1984 con- of an improved fiber over which signals can bt transmitted with 10 times ference on satellites v. fiber optic cables, the president of IBM's subsidiary, as much strength after 125 miles, without boosting, as any previous fiber, Satellite Business Systems, stated that even SBS plans to develop a fiber optic a feature important for undersea cables (New York Times, 1984) NASA be- network for high-traffic trunk routes to complement its current primarily sat- lieves that zero-gravity, containerless manufacturing of very pure glass in ellite network, because (within the United States)It is highly efficient for space may increase fiber optic efficiency (Space Enterprise Today, Septem- point-to-point trunking" ("fiber Optics, Satellite Technologies Confront Each ber 1984, p 5 I Other Merging Expected," Satellite News, Nov 19, 1984, p 8).

223 Ch. 6Satellite Communications 215

proportionally for longer cables.I9 Thus, even at dis- power, etc. ar. .all relative to total cost. Because tances far above the bree.keven point, satellites may of this, revenues nem the sale of services are usually not have much of an advantage in transmission cost used mainly to cover payments of principal and in- Considering that nontransmission costs do not differ terest on debt incurred in acquiring the facilities, rather by mode, this advantage would be even less as a pro- than for meeting payrolls and paying suppliers. portion of total message cost. If the market becomes highly price-competitive because of excess capacity, carriers may have to reduce Price.The implicit implication of many discussions their prices markedly to sell anything at all. The para- of the relative cost of cables and satellites is that doxical aspect of this is that even if overcapacity telecommunications service markets will react to cost should cause prices to drop to very low levels, indi- differentials in much the same way they would react vidual carriers would not have an incentive to reduce to price differentials. This is clearly not the case in in- the capacity offered for sale and thereby counteract ternational telecommunications. In some industries, the overcapacity. In fact, the prime motivation for cost can be used as a proxy for price, because price dropping prices would be to keep capacity in opera- and cost are of similar magnitude in these industries. tion and earn as much c..sh flow as possible, for even In international telecommunications, however, there at very lo.prices, carriers would still generate cash can be very wide divergence between cost and price. flow as long as they covered the low variable cash This is not to say that cost competititon between sat- costs of running the operation. If they tried to charge ellites and cables is not an important long-run factor higher prices to cover full costs, there would be few in determining the supply of various kinds of interna- or no sales, little or no revenue and thus little if any tional telecommunications facilities, since if cost dif- cash flow from operations. For these twin reasons, the ferentials are large, they would affect carrier incen- existence of net revenue possibilities even at low tives to it vest in various types of capacity. But in the prices and the inability to sell much except at the com- telecommunications service markets themselves, it is petitive price, individual firms have a strong incentive prices that buyers pay, and to which they react, not to keep the facilities in operation. the costs of suppliers. Even bankruptcy would not serve to inspire them The significance of this is twofold: 1) even if costs to remove the facilities from service. If a court gives differ for satellites and cables, the prices could and protection from creditors, the firm could continue to would probably be closely similar and 2) under con- use the net cash flow from operating the facilities to ditions of overcapacity, international telecommunica- make partial payments to creditors and for other uses. tions prices could drop far below calculated full costs, If the assets had to be sold at realistic prices consist- as carriers responded to market pressures. ent with the reduced earning potential of the facilities, Prices would be similar for telecommunications the new owners would also have incentives to oper- services using the two transmis,ion media (if markets ate them. These would be the usual investment incen- were unrestricted) because they deliver similar serv- tives of cash flow and profits. Thus, while very low ices. This would occur regardless of what the facilities prices might constitute a severe financial problem for cost to install when they were new or what new facil- carriers with high fixed obligations, their financial ities would cost. If prices started to diverge, consumers problems would be unlikely to induce them to take would move toward the cheaper medium, and sellers their capacity off the market. of the expensive one would have to lower their prices Overcapacity does not last forever, however. It is to stay competitive. a so-called "short-run" phenomenon, in the sense that International telecommunications prices (similar for in normal competitive markets, it would ultimately be both media) could also drop far below the full costs worked away as plans for new investment are reduced of both satellites and cables. Telecommunications and existing equipment depreciates. Yet in telecom- service markets conaast with many other markets in munications, overcapacity, with low prices could per- this regard because of one key factor; the telecom- sist for many years. The low prices that have persisted munications service industry (using either satellites or for years in the markets for certain long-lived capital cables) is highly capital intensive. Capital intensity items (and for the services rendered by them)e.g., means that most costs are incurred when the facilities supertankers and widebody jetsare instructive on are installed and that variable costs for labor, materials, this point.'9

"Although this discussion concentrates on overcapacity, shortages of in nhese economies to scale are illustrated in fig 6A1 by the curvature of ternational telecommunications capacity could also occur and result in prices the cable cost curve considerably higher than costs 224

38-797 0 85 8: QL 3 216 International Cooperation and Competition in Civilian Space Activities

In a situation of overcapacity, the gradual working Technical Features.Fiber optic cables appear to off of surplus capacity and the restoration of prices have three technical advantages over satellite trans- that cover fdll costs, of course, assumes a relatively ponders that are moderately to highly important in normal investment market. Such a market exists in certain applications in international communications U.S. domestic satellite communications. In a situation freedom from external and environmental sources of of overcapacity, sources of financial capital become interference, greater communication security, and rel- less willing to invest in more capacity. An adjustment atively short signal delay. None of these advantages process then takes place. Rapidly expanding demand is decisive in volume uses of international telecom- or rapid physical deterioration of the capacity speeds munications, however. this adjustment process. In the case of international For instance, despite the greater vulnerability to insatellite communications, however, the investment terference, error rates for satellite communications can market is far from normal. Governmental, intergovern- be designed to the same minimum teciinscal speci- mental and regulated institutionsINTELSAT and its fications in most cases as fiber optic cable systems, mostly PTT owners are currently the principal in- but the extra desig i features can be costly. vestors in international satellite facilitiesmay not re- The greater signal delay in satellite transmission adds spond to market signals as quickly as private firms to the total of all the delays in terrestrial switching and might. in the facilities through which it must pass and, thus, Much of this analysis applies to carriers making deci- typically consumes between one-fourth 2:.d one-third sions singly. If carriers should make coordinated deci- of a second. Innovations in satellite transmission of sions on prices (in many circumstances illegal under ordinary voice and videoconferencing are likely to the antitrust laws) or if governments should impose continue to improve the techniques that now reduce capacity-use regulation on the industry, capacity could the disadvantages of satellites that arise from signal be withdrawn from the market, and prices could be delay in those uses and in interactive data transmis- higher. Even in this circumstance, however, if con- sion as well. sumers responded to low prices by substantially in- In communication security, the absence of an elec- creasing their purchases, prices designed to maximize tromagnetic field around a fiber optic cable means carrier net revenues would still probably be way be- that, to intercept the information, the cable itself has low full cost. to be tapped, an act that can be detected by sensitive One further aspect of capacity in international com- monitoring devices. In contrast, microwave radiation munications should be considered. Since all satellites that satellites use to transmit information is usually have on-board propulsion capabilities that allow them easily accessible by the public and certainly by those to be moved occasionally from one world region to who would intercept it. Encryption possibilities, how- another, the locations of particular satellites and, ever, can give satellite microwave transmission sub- therefore, of excess satellite capacity, will also respond stantial protection against all but the most sophisti- to market forces." At present, there is a regulation- cated interception attempts. Once again, there may enforced separation between domestic and interna- be an extra cost penalty for various levels of security tional facilities, but if private satellite firms from the for satellite v. fiber optic transmission. United States and other countries are allowed to en- Taken together, the disadvantages of satellite transter international facilities markets, domestic and inter- mission result in a product that is currently perceived national capacity may ultimately become inter- by users to be somewhat technically inferior to the changeable, and world overcapacity for shortage) product of cable in certain point-to-point applications, would affect both international and domestic prices. particularly voice, certain computer applications, and secure communications. If there should be carriers "It should not be concluded, however, that governmental entities operat- who specialize in a single mode of transmission, as ing in substantially competitive international markets will not make rational several of the new firms applying for permission to commercial decisions Evidence from the international airline industry in the construct satellite or cable facilities are planning to do, period 1976.80 indicates that European state-owned carriers had approximately the same rates of return as U S private carriers and that, in response or if carriers using both modes should offer consumers to changes in demand, they adjusted rapacity similarly in individual North the opportunity to choose mode, the preferences of Atlantic city-pair routes (Douglas I. Adkins, Martha J Langelan, and Joseph M Trojanowski, "Is Competition Workable in North Atlantic Airline Mar- the marketplace would govern. What seems a trivial kets?" Civil Aeronautics Board, March 19821 disadvantage to satellite proponents might loom large "Because of limited on-board propulsion fuel, changing orbital position in consumer choices." can only be done infrequently as a practical matter If permitted by regulation, satellites would be sufficiently mobile, however, to allow transponder sale and lease prices to be determined by world rather than national condi- "Speakers at the Fourth Annual Satellite Communications Conference, tions of supply and demand, just as the prices of super tankers or wide-body Washington DC, Apr 1G-11, 1984, who were involved in satellite commu- jets now are nications as producers or consultants uniformly stated that when the echo

225 Ch. 6Satellite Communications 217

When there are domestic communications legs on satellites can be employed to bypass the difficulties either side of the international leg, undersea cables and transmit directly from one Earth station to another. may sometimes have an advantage over satellites in These special networking capabilities of satellites international transmission. Because of the total delay, will ensure a market for communication satellites. CCITT recommendations and consumer preference, Only if nationwide and worldwide fiber optic net- discourage the use of more than one satellite hop in works should have large excess capacity in the future end-to-end service. Mixed satellite/cable transmission would they be used for the point-to-multipoint (or is the means employed to keep the satellite segment multipoint-to-multi point) communications that satel- to one-hop, of course. In international communica- lites have a cost natural advantage in. Nevertheless, tions, this may result in a preference for cable trans- this advantage is important in only a small proportion mission in certain situations. If domestic transmission of the international communications volume sent by by satellite has been decided on for the U.S. leg, for satellites at present. It is likely to grow rapidly if inter- instance, because a business user wouid like to by- national v;deoconferencing does, but will become a pass the local phone company, keeping the satellite large fraction of international satellite communications link to one-hop would induce such a user (or his car- only if satellites lose out to fiber optic cables in the rier) to arrange cable transmission for the international telephone, record, and data uses that now constitute link. If the domestic link was cable, however, there the maior uses of international satellite transmission. would be no parallel incentive to use a satellite for the international link. Industry-Structure Incentives to International satellite transmission currently has two Adoption of Fiber Optic Technology important advantages over cable transmissionbroad- The second important uncertainty . ffecting the de- band capability and certain networking advantages. Broadband capability refers to the ability to send large mand for international satellite communications in the amounts of related information simultaneously and is 1990s is whether the structure of the communications important in television and certain data applications. industry will continue to provide incentives to invest Large capacity coaxial copper cables, terrestrial micro- in and use cable technology that are independent of wave, and fiber optic cables al' have this capability, the cost and technical features of fiber optic cables. as do satellite transponders, but for the broadband Three such incentives have been suggested in analy- communication to take place, the capability must be ses of telecommunications industry structure.23 in place end to end. This is straightforward for most First, U.S. regulated international telecommunica- all-satellite systems, but for terrestrial networks, all legs tions carriers are said to have a bias in favor of invest- and switching facilities must have broadband capa- ment in undersea cables that they ow!, and which bility. Currently, it is often necessary to have a satel- therefore constitute part of their rate base, in prefer- INTELSAT/COMSAT lite link in order to have broadband communication ence to the alternative of leasing at all. As international and domestic fiber optic net- satellite transponders, which are not in their rate works become widespread in the 1990s, this advan- bases. This incentive (to buy cable capacity rather than tage of satellites will diminish and will probably not lease capacity on satellites) allegedly operated in the continue to be quantitatively very important. past even when transatlantic transmission by satellite Satellites have a more enduring advantage in cer- had a substantial underlying cost advantage over coax- tain networking applications. For instance, point-to- ial copper cable. It and other reasons have been cited multipoint transmissions are trivially simple losing a sat- to explain why the FCC ordered the balanced use of ellite. The single transmission can simply be picked satellite and cable capacity in transatlantic service. up by even thousands of individual satellite Earth sta- The putative industry bias toward investment in tions. To do the same thing in cable networks would cables, which has existed during the period when require vast amounts of switching, something which cable technology had a cost disadvantage, would undoubtedly reinforce any desire of the carriers to use would not usually be done terrestrially if the number of destinations were at all large. In general, whenever cable technology for other reasons. It might be miti- the alternative terrestrial network becomes cumber- gated if the carriers should come to own satellite fa- some or expensive or lacking in certain capabilities, cilities. RCA, for instance, has proposed to use a satellite for transatlantic communications that it had

"See, e g , Bruce M Owen and Ronald Braeutigam, The Regulation Game equipment was tuned properly, the delay problem for one-hop satellite trans- (Can bridge, MA Ballinger, 1978), ch 2 "Regulation of Oligopoly Interna mission was trivial On the other hand, representatives of a large bank and tional Communication," and Michael E Kmsley, Outer Space and Inner Sane. a large developer stated that there is currently a prejudice among consumers tums Government, Business and Satellite Communication (New York Wiley, against satellite transmission on the basis of quality 1976) 226 218 International Cooperation and Competition in Civilian Space Activities

originally proposed solely for domestic use. It would, receive returns on that investment that vary with their of course, be able to include this satellite in its rate usage of the INTELSAT system. Nevertheless, the base.24 variable cost to most PTTs of increased INTELSAT use It should be noted that the preference for facilities is probably greater than the variable cost of cable that can be put in the rate base is a long-run decision use.27 They would not have the same incentive to factor in the purchase of facilities, with the comparison create excess cable capacity as U.S. carriers, however, being between installing new cable capacity in pref- unless they were also subject to regulation similar to erence to an alternate program of leasing satellite ca- U.S. return-on-rate-base regulation .26 pacity during the life of the cable. Besides this long- run factor, there is also a powerful short-run incen- CABLE CAPACITY GROWTH tive for U.S. international service carriers to use cables. The third key uncertainty that will affect the demand Once a cable and associated maintenance capability for satellite communications in the 1990s is the growth is owned but not fully utilized, the variable cost of of usable undersea cable capacity vis-a-vis the demand using it approaches zero and is, of course, much small- for telecommunications service. er than COMSAT's circuit lease price.25 This power- Transoceanic cables often require lengthy periods ful incentive to use owned cable facilities up to their between conception and installation for planning, reg- capacitybefore leasingmoreexpensive ulatory action, and construction. The official planning INTELSAT /COMSAT satellitecapacity operates process for a transpacific fiber optic cable, for in- strongly during the early life of a new cable facility stance, was only just beginning in 1984 (following ex- before it approaches capacity use. If carriers owned tensive planning work by individual carriers), and it under-utilized satellites as well as cable facilities, this is possible that the TRANSPAC-3 cable will be delayed incentive would also cease to operate. beyond its prorosed year-end 1988 service date.29 Finally, some carriers, such as AT&T, KDD, and Considering the TAT-8 transatlantic cable and the Cable & Wireless, are also producers and servicers of other proposed transatlantic cables, 5 years or more cables; they may favor using what they themselves could be regarded as the norm. manufacture and maintain. Carriers manufacturing sat- If telecommunications demand should outstrip the ellites, such as RCA, might find a similar reason to fa- cable capacity available in a geographical sector for vor satellites. any reason, satellites, if available, could and would Some of the major European PTTs are also said to be repositioned to serve it. More rapid growth in de- favor using cable facilities over satellites for much the mand than expected, or regulatory restrictions on same reasons as U.S. carriers.'6 The incentive to use cable installation, could be important reasons why unused cable capacity before INTELSAT probably also total telecommunications demand might outstrip applies to them as well as to the U.S. private carriers, cable capacity. but because of the different regulatory structure, the If, on the other hand, there should be excess cable impact is less powerful. In the first place, they pay the capacity (the more likely case in the Atlantic region), lower INTELSAT utilization charge rather the higher the question remains as to whether it would be used tariff of an intermediary such as COMSAT. Secondly, in preference to satellite capacity. It would appear, as signatories, they make irvestment payments and according to the discussion above, that U.S. international carriers have a significant incentive to invest in and use their own transatlantic facilities (which happen to be cables because of the industry structure im- "In fact the incentive could shift in favor of owning satellites if satellite posed by regulation) rather than facilities owned by capacity were relatively inexpensive due to glut conditions, sirth as now may be occurring in U S domestic communications A 1984 survey by the FCC other entities (which happen to be satellites). By 1985 found that there only 143 out of 312 transponders were in use on 14 satel lutes on a weekday afternoon ("Satellites Outpace Customers," New York "For PTTs subject to significant transit charges, however, cable variable Times, Ap 10, 1984, First Business Page costs may be significant, and their incentive to use cables would be less or 211 he variable transmission cost of using the cables they own is primavly nonexistent the cost of the electrical current and of the cable repairs, and this is relative. "It should be noted that a PTT's bias in favor of using fiber optic cables ly small compared to the fixed cost of building the cable, providing it with for communication trunks does not necessarily mean that they can handle auxiliary communications equipment, and providing maintenance vessels large volume and/or broadband communications in their local cable net- and facilities In the case of underutilized INTELSAT satellite facilities, how- works Until appropriate switching and broadband transmission facilities have ever, the variable cost to AT&T, for instance, is still the COMSAT tariff This been installed at the local exchange level, premises-to-premises satellite trans- tariff includes a capital recovery factor and is thus considerably higher than mission may be the only practical way to handle business communications the small variable satellite transmission cost COMSAT's prices for satellite that that require these facilities circuits may also have been higher than they need be, due to a higher than "Accoiding to a AT&T press release, Jan 23, 1985, Hawaii 4/TRANSPAC- normal rate of return and the existence of substanital INTELSAT excPssca. 3 will have iwo working fiber pairs, will run 7,200 nautical miles across the Nuts, which the FCC allows COMSAT to earn a rate of return on Pacific, will ham approximately 250 undersea generators, and would be able "Bruce M Owen and Ronald Braeutigam, op cit, p 61 to transmit 37,400 simultaneous telephone conversations

227 Ch. 6Satellite Communications 2'9

the FCC had granted or recommended cable landing SCENARIOS II AND III: MODERATE OR ZERO licenses for fiber optic capacity of approximately GROWTH OF INTERNATIONAL SATELLITE 370,000 voice circuits to be installed in 1988 or 1989, COMMUNICATIONS IN THE 19908 compared to the 1990 USISC forecast (above, table Four elements, none of them improbable, could 6A-1 of 45,000 equivalent voice circuits." cause a slowdown in satellite communicationsgrowth Hence, unless regulation or other nonmarket forces as a result of the substitution of fiber opticcable for impell carriers to use satellites in a situation of plen- satellite transmission. First, various decisionmakers tiful carrier-owned cable facilities or unless carriers could perceive fiber optic technology to be superior come to own satellites, they would be likely to use for reasons of its technical features or costiprice advan- available cable facilities in preference to satellites, tage. Second, the price (or other advanta3e) would even if, to a certain extent, satellites were less ex- be available to them in such a way that they would pensive. actually have the incentive to use cable transmission. Thirdly, actual cable capacity would be great enough Scenarios for Growth of Satellite to service most of the growth in total telecommuni- Communications Demand in ttie 1990s cations demand. And last, but not least, there would be a noninhibiting U.S. and international regulatory Depending on what assumptions are used for the framework that would allow greater relative cable use. uncertain factors that we have just discussed, projections of the demand for international satellite commu- Scenario II: Slow Growth.Even if consumers or nications would vary. Since all of the factors are highly carriers came to prefer fiber optic cables for transatlan- uncertain, the discussion is organized into three credi- tic and other long-distance international communica- ble scenarios that use different assumptions that re- tions in the late 1980s, their preference might not be sult in rapidly growing demand, slow growing demand particularly intense. They therefore might not make and plateauing demand, respectively the switch ve.y rapidly. Whether or not their preference is intense, regulatory barriers in any casecould SCENARIO I: RAPID GROWTH OF SATELLITE COMMUNICATIONS IN THE 1990s delay the adoption of cable transmission. For all of these reasons, satellite usage in high-volume trunking The North Atlantic communications carriers, both applications might continue to grow, if only moderate- the U.S. international service carriers and the Euro- ly, through the end of the century. pean CEPT carriers, expect Scenario Icontinued rapid growth of satellite communicationsat least through Scenario III: No-Growth Plateau . In this scenario, 1995, as indicated by the projections provided for the cable transmission would be adopted relatively quick- North Atlantic Consultative Process. These projections ly because of strong carrier or consumer preference, were discussed above in this appendix and are pre- or for other reasons, and would beused for most high- sented in tables 6A-1 and 6A-3.31 volume point-to-point international communications. Implicit in the carriers' facilities demand forecast for Cable capacity for this expansion would be in place the North Atlantic are assumptions about a Humber by the early 1990s in the form of the TAT-8, TAT-9, of factors that would lead to rapid growth in satellite and TRANSPAC-3 cables to be constructed andowned communications in the 1990s. This could result from by cable consortia and/or those proposed by individ- fiber optic cables having little or no cost/price advan- ual firms. Satellites would still perform an essential role tage or consumer preference, from the absence of in long-haul international communications, however, special carrier incentives to use cable transmission, particularly on low-volume routes to smaller or less or from limited actual cable capacity in place or in use. developed countries and to remote areas. Satellites --- could also fill in where cables had not been con- "'This estimate includes 40,000 for the approved TAT-8 cable, and 80,000 structed or could not handle broadband communi- and 250,0(X), respectively, for the proposed Cable & Wireless (TelOptic) and Submarine lightwave Cable Co cables, making a total of 370,000 voice- cations because of networking problems. Essentially, equivalent circuits These estimates must be regarded as order of magnitude satellite transmission in this scenario would serve as only, since estimates of multiplication factors for voice conversations are likely the backup technology for cable transmission. to change considerably "Data submitted to the INTELSAT Traffic Data Base reflecting the projec- Satellites would also continue to be used where they tions of the U S international service carriers tends to reinforce this expec- have a competitive edge over cables in technical fea- tation of rapidly growing transatlantic satellite communications demand tures or cost: to service the growingexpected through 1997 (INTELSAT Contribution of the Director General, BG-56-10E W/9/83, Aug 2, 1983 I See note 11 demands for poi nt-to-multipoint or mu ltipoi nt-to-mul-

228 220 International Cooperation and Competition In Civilian Space Activities

tipoint communications, for certain mobile commu- ern Union, the de facto monopoly domestic nications, and for broadband communications where telex/telegraph company." On the foreign side, the local broadband fiber optic or microwave distribution operator of both voice and record facilities was usu- capacity was not in place. This scenario posits a lev- ally a single government post, telephone, and tele- eling off of satellite communications it the 1990s, graph firm or ministry (PTT). Usually, the PTTcon- rather than a decrease. The latter would r..sult if these trolled virtually all civilian telecommunicationsvoice specialized uses did not grow sufficiently to offset the and record, satellite and terrestrial, international and relinquishment of high-volume, long-haul traffic to domestic. cable)? In cable transmission, the cartel arrangements were cemented further by joint ownership of oceanic ca- The Regulatory Regime in bles. For private, regulated U.S. carriers, ownership International Satellite in cables is counted among the assets of their rate bases. The size of a carrier's rate base, in turn, along Cornmunications33 with the allowed rate of return, determines themax- The Traditional Regulatory Regime imum allowable profit in regulated activities. in U.S. International Telecommunications The situation has been somewhat different in satellite communications, principally because thereare in- Ten years ago, both the domestic and international termediaries (INTELSAT and COMSAT) whose tariffs segments of the U.S. telecommunications industry must De paid. All U.S. intercontinental satellite com- were tightly controlled by government regulation. munications are currently routed through COMSAT Consumers of international telecommunicationsserv- and INTELSAT. U.S. international service carriers pay ices were not allowed to choose among carriers on COMSAT's tariff, and COMSAT, in turn, pays INTELSAT the basis of price and service offerings." The carriers ciruit charges.37 This differs from the cable situation of the countries between which the communicate, in that once the cable is in place, only minor payments moved were almost always organized into amom_ are made by the owner-users for cable use and main- oly or close-to-a-monopoly structure and thus didnot tenance, and usage sensitive costs are practically nil.38 have to respond closely to consumer needs. In the satellite situation, carriers have to pay the On the U.S. side, as a rule, each country-pair mar- COMSAT or INTELSAT charges in proportion to their ket was segmented into a number of nearly air-tight use of INTELSAT capacity.39 In the case of U.S. inter- compartments. There was a telephone ("voice") mo- national carriers, the charges for leasing COMSAT cir- nopolist (usually AT&T). Terrestrial and satelliterec- cuits are current costs and can, of course, be recov- ord (telegraph/telex) communications for the most part ered from their customers, but the satellite charges are had to pass through a small, regulated cartel of U.S. not capitalizable and therefore do not enter the car- "international record carriers," principally ITT, RCA, riers' rate bases.40 and WUI," prior to being interconnected with West- "If a customer was sited at one of the five "gateway cities" or at several other domestic "points of operation," he or she was able to deal directly with one of the international record carriers sv.lhout having to go through "If the component of international telecommunications where satellites Western Union (General Accounting Office, FCC Needs to Monitor a Chang- have a technical or cost advantage is one-fourth of the total andis growing ing international Telecommunications Market, GAO/RCED-83-92, Mar 14, at the same rate as transatlantic telecommunications as a whole (16 2per. 1983, p 22) Western Union's monopoly status was never formally conferred cent per annum in the 1.:51SC forecast for the North Atlantic), it alone would by the KC How it used the regulatory process to preserve this status is a equal the total current international telecommunications volume in 9 years complex question (see Bruce M Owen and Ronald Braeutigam, The Regu- "We use the term "international regulatory regime" (or "internationalcom- lation Game (Cambridge, MA Ballinger, 1978), ch. 1 munications repot.") broadly to include all governmental and intergovern- "COMSAT is part owner of INTELSAT, and receives offsetting return on mental actions affecting the operations of the international communications its investment Foreign international carriers from countries that do not belong carriers These include treaties and other formal and informal intergovern- to INTELSAT are able to use the system by paying the circuit charge mental agreements in the area or telecommunications, other elements ofin- "These should be distinguished from payments at the "accounting rate" ternational law affecting telecommunications, the actions of internationalor- which are calculated on the volume of telecommunications regardless of the ganizations such as the ITU or INTELSAT, and the actions of national transmission medium used The country-pair partner that originates the great- governments that affect the international telecommunications industry er volume of traffic compensates the other partner for its greater use, at the "The uniquzfiess of international communications airangementsis not al- agreed-on accounting rate. ways appreciated "Single- vendor service" is now the norm in U 5 domes- "The foreign PTTs and COMSAT, of course, collectively determine the tic long-distance communications and always has been in virtu.11y all other INTELSAT unit charge through their weighted votes on the Board of Gover- markets in the U 5 economy, and even in most other international service nors of INTELSAT Table 6-5 and app C give the voting weights of INTELSAT markets U S basic telecommunications providers (and those of othercoun- signatories tries), however, are not free to offer single-vendor service in most interna- 40A number of U 5 international service carriers do have part ownership tional markets 0 e , to offer endto-end communications service over their in the INTELSAT Earth static is (prior to recent changes COMSAT owned the own owned or leased networks) other half) and can add the 'alue of these facilities into their rate base 1984 "Western Union International, Inc , was separated from Western Union ownership shares were as follows. contiguous United States. COMSAT 50 Telegraph Co , the former domestic record monopoly, 1,1 a divestiture that percent, AT&T 35 5 percent, RCA 10.5 percent, MCI (WUI subsidiary) 4.0 took place In 1963 (General Accounting Office, FCC Needs to Monitora percent, Hawaii Comsat 50 percent, GTE (Hawaiian subsidiary) 30 percent, Changing International Telecommunications Market, RCED-83-92,Mar 14, RCA 11 percent, ITT 6 percent, MCI(WUI) 3 percent, Guam: COMSAT 50 1983, p 22 ) In 1982 WUI was acquired by MCI Corpas a wholly owned percent, RCA 48 9 percent, MCI(WUI) 1 subsidiary 1 percent (Satellite News, Dec 1C and 24, 1984) 229 Ch 6Satellite Communications 221

Under the traditional regulatory regime, U.S. inter- large and growing (see table 6-4 for a partial listing national carriers and satellite intermediaries were usu- of U.S. international communications firms). ally not allowed to penetrate very far into each other's Even though considerable domestic telecom- markets. With only minor exceptions, the entry of new munications deregulation has occurred in the United firms was also not allowed. Even when new firms were States, the old regulatory structures affecting U.S. inter- allowed in the United States, most foreign countries national communications remain largely in place. continued as they had in the past to allow only the While the FCC has relaxed the distinctions between traditional U.S. international service carriers (in voice international and domestic, satellite and cable, and only AT&T) to connect to their networks. For the in- voice and record carriers, this as yet has had little im- ternational record carriers and COMSAT, U.S. inter- pact on which firms carry the bulk of each type oftraf- national communications prices were regulated by the fic and on how they do business internationally. AT&T Federal C-mmunications Commission under loose Communications still carries almost all U.S. interna- "rate of return on rate base" procedures.'" For AT&T, tional telephone communications; the former inter- no international rate base was separated; the firm re- national record carriers still handle most of the rec- tained greater discretion over international rates and ord traffic; INTELSAT and COMSAT still have a virtual could engage in price discrimination to the disadvan- monopoly on U.S. intercontinental space-segment tage of consumers of international communications. communications; and the FCC still oversees a proc- Investment by the carriers in new facilities was also ess in which approved carrier consortiaplan facilities restrictedonly cable or satellite facilities approved years ahead. by the FCC and foreign governments were allowed. Investment by consumers was also restricted; only cer- Competition in Foreign tain types of equipment. usually owned, manufac- Telecommunications Service Markets tured, or supplied by carriers could be connected to their networks. Both of these restrictions constituted In "basic" telecommunications services,42 interna- a severe barrier to international (and domestic) trade tional competition in foreign markets is practically in telecommunications equipment and services and nonexistent. While a few countries, notably the United may have inhibited the full development of commu- Kingdom, Japan, and Canada, are moving toward pri- nications technology. vatization and limited domestic competition, most countries outside of the United States do not allow The Deregulated U.S. Industry: competition even in domestic long-distance telecom- A New Element munications. A telecommunications monopoly, owned by the government (or, alternatively, in some cases Since the breakup of AT&T at the beginning of 1984, a private monopoly regulated by the government) is a new more competitive U.S. telecommunications the prevailing mode of industry organization around service industry has clearly emerged, with some of the the world. Competition from foreign (including U.S. largest U.S. corporation entering into what had been firms) is not yet envisaged even in countries allowing regulation-protected preserves. The formerly distinct limited domestic competition.'" Foreign carriers must industry compartmentsvoice and record, satellite transfer control of communications passing into (or and terrestrial, basic and enhanced, and domestic and through the country) to the PTT at the international internationalhave all been breached by large firms border or to an intermediate cable or satellite consor- and smaller entrants, and each is now a competitive tium that subsequently passes control to the PTT. arena. For regulation to have practical effect, a boundary This vigorous new U.S. industry is also placing im- has to be drawn somewhere between the regulated mense pressure on the international regulatory regime. basic communications industry and the unregulated Institutional and regulatory barriers to competition data processing industry, since they now merge into have allowed firms to earn high profits in international each other. In contrast to the present situation in the communications. Lured by these profits, many large United States, in most countries, the telecommunica- firms in U.S. domestic telecommunications are seek- tions administrations still attempt to draw this bound- ing to expand their international activities (e.g., MCI, ary so as to keep computer-enhanced communica- Western Union, and GTE). The list of potential new tions services, such as "packet switching," which entrants into international satellite communications is 41 e , ordinary voice, record, data, and television transmissions, as opposed to -enhanced" or "value-added" communications, to produce which the provider uses computers to process or package them ',General Accounting Office, FCC Needs to Monitor a Changing Interna- "Except that Japan's new domestic telecommunications law seems to per. tional Telecommunications Market, RCED-83-92, Mar 14, 1983 mit U S firms to operate some types of value-added networks within Japan.

230 222 International Cooperation and Competition in Civilian Space Activities

increase the efficiency of communicationsin private Although in recent years the Commission has tried networks, on the PTT monopoly side of the bound- to back away from explicit satellite/cable use rules on ary." In only a few countries are private firms, in- the grounds that competition between the transmis- cluding U.S. corporations, allowed to compete freely sion modes should be allowed so that consumers in providing computer-enhanced communications would benefit, its 1982 "Authorized User" decision service. stated that the FCC would "continue t' nionitor the Further in the direction of information servicesare carriers' use of facilities to insure [that] both cable and the value added networks (VANs). These are networks satellite facilities are reasonably used."47 Using month- of computers that interact with each other in "real ly circuit status reports, the FCC notes that "the exist- time," that is, with little delay. For instance, users at ing policy has produced a satellite-cable facility usage keyboards in New York and other cities may wishsi- ratio in the North Atlantic region of approximately 50- multaneously to query an industry data base in Phila- 50 (specifically 48 percent cable, 52 percent satel- delphia and use some of its software. The VAN oper- lite)."48 ator buys communications capacity in bulk and uses The FCC is currently considering what transatlantic its computers to make this communications network circuit distribution policy to follow in the 1985-95 most efficient. In the United States these services have period, since the current negotiated plan expires in been fully deregulated since 1980.45 The situation 1985.49 It is considering as alternatives: 1) continurxi abroad is variable; in many countries, the PTTs still use of "balanced loading, "50 2) other distribution do not allow private firms to construct VANs, and the schemes, and 3) no FCC prescription of circuit distri- only VAN services available are those provided by the bution. The Commission recently tentativelycon- PTTs. In countries, such as Canada, United Kingdom, cluded that transatlantic balanced use restrictions will and Japan, that are experiencing a measure of domes- still be necessary in the 1986-91 period.s' Although tic liberalization, competition is now allowed in the no hint to the effect is given in the relevant FCC doc- provision of VANs. uments,52 these distribution alternatives must be con- Control of international communications sent be- sidered in the context of the large transatlantic capac- tween adjacent countriesusually by land cable, ity in the proposed new private satellite and fiber optic undersea cable or terrestrial microwavepasses cable systems that may come to exist alongside the bilaterally at the border from one country's carrier to facilities of the cable consortia and INTELSAT. It must the carrier of the other country. In certain cases, how- also take into account the growing private transborder ever, governments and carriers have devised regional system in the Americas. multilateral mechanisms of joint ownership for inter- The option of having no FCC circuit distribution pre- national satellites and transoceanic caNes." scription would not necessarily mean a significant As in the provision of basic international telecom- change in the regulatory regime, however. The FCC munications services, competition between firms in could continue to approve the coordinated planning the provision of international transmission facilities of new facilities within the North Atlantic Consultative (with or without joint-venture affiliation) is also almost Process by groups of U.S. and foreign carriers, who, universally not allowed. The closest thing to competi- as part of the process, would be likely to negotiate tion in international facilities in the current regulatory circuit loading rules. As long as facilities construction regime is the competition between INTELSAT and the is regulated and individually owned facilities are not various transatlantic cable consortia. Even this com- allowed, some formal or informal circuit loading rules petition is largely managed by overlapping PTT rep- are likely to be followed in any case. What is not clear, resentation in INTELSAT and the cable consortia, by however, is how any but the most stringent circuit dis- U.S. regulatory policies encouraging the "balanced" tribution requirements can protect the revenues of use of both kinds of facilities, and by facilities plan- COMSAT/INTELSAT, if large alternative satellite and ning processes overseen by the FCC and other regu- cable capacity comes into existence. latory authorities. "General Accounting Office, op cut, p 43. "NOI, op citp 9 "The U 5 international carriers have also stated that they would like to see a reevaluation of the circuit loading policy ("Contribution of the U 5 Delegation to the North Atlantic Consultative Working Group, Paris, France, "Packet switching uses 'omputer processing to group communications Jan 31.Feb 2, 1984, unpublished, p 41) into packets going to comn. in destinations ,°Balanced loading is defined in note 46, p. 161 4,FCC, "In the Matter of Amendment of Section 64 702 of the Commis- "FCC, "Second Notice of Proposed Rulemaking In the Matter of . Au- sion's Rules and Regulations [Second Computer Inquiry]," FCC80-189, final thorization of Common Carrier Facilities to Meet North Atlantic Telecom- decisions, released May log0 munications Needs During the 1985-1595 Period," FCC 85.176, released Apr "See ch 6 for descriptions of the INTELSAT, INMARSAT, and the transat 22, 1985 lantic cable consortium "Ibid , and NOI, op cit

231 Ch. 6Satellite Communications 223

Pricing The deregulatory moves the United States has taken in international telecommunications can beexplained The pricing of international telecommunications to mostly as the straightforward result of domestic de- consumers is in most cases determined solelyby the regulatory actions that have, insofar as possible, carrier and/or regulatory authority of the originating removed the regulatory distinctions between firms. For country. Rates for calls originating in (or collect to) instance, the dropping of the distinction among voice a country can therefore differ tremendouslyfrom rates and record carriers could not easily be maintained by of calls going the other way, frequently by a factor of the FCC in international ct mmunications after ithad more than 2. In most cases, U.S. rates aresignificantly abandoned it in domestic communications. As a prac- lower than the rates of other countries (even with the tical matter, it would also be difficult for the FCC to strong dollar), but nevertheless, as a recent executive discriminate in international communications among branch white paper states, "International service, in the major U.S. corporations that are now the vigor- short, costs between two and three times compara- ous new competitiors in domesticmarkets. in theory ble U.S. domestic service!'" at least, discrimination is now left to foreign govern- In virtually all countries, international telecommu- ments heyond the control of the FCC and tothe mar- nications profits cross-subsidize various unrelated ket.'7 activities. The surplus from international operations COMSAT's special status as the monopoly whole- is transferred by administrative or regulatory action saler of INTELSAT services is an exception to this. By to such other activities as local or domesticlong-dis- law and regulatory action, COMSAT has the special tance phone service (e.g., the United States), the status of a carrier's carrier with monopoly accessto postal service (Germany), or even bus service (Swit- INTELSAT space segment facilities. The FCC would zerland). At stake in current telecommunications reg- like to control and dilute this special status, however, ulation, therefore, are the interests of the subsidy re- and see COMSAT evolve primarily into a general com- cipients as well as the carriers and buyers of munications carrier." The FCC's 1982 decision to international telecommunications services. allow COMSAT to sell to consumers directly was tc be a step in this direction, but it was suspendeduntil Deregulatory Moves in 1985 by court decision and may continue to accrue International Telecommunications court challenges." In 1984, the FCC firstallowed communications firms to own limited-use INTELSAT Earth To date most of the actions taken to liberalize in- stations. Traditional INTELSAT Earth stationshave ternational telecommunications have been in the been owned 50 percent by COMSAT and 50 percent United States, although some moves in this direction by the international carriers using them. The FCC have taken place in Canada" and the United King- altered this policy by approving the applicationsof dom." Even though domestic deregulatory actions several carriers to construct and operate special Earth have not been taken to any great extent in most other stations in Chicago, New York, Washington,and other industrial countries, all are wrestling with the need to cities for INTELSAT Business Service (IBS) (primarily erect a practical perimeter around the regulated or data and videoconferencing) and expects to approve state-owned sector that can effectively differentiate it other similar applications in the future.° It then fol- from the growing array of computer-enhanced com- "The FCC ,rovisionally still regulates AT&T as the dominant carrier both munications applications outside the perimeter with- domestically and internationally and also the other international carriers in out stunting their development.se most international markets, since competition at present isinsufficient to eliminate market power Legislation, such as the Record CarrierCompetition Act of 1981, guides the FCC in making the transition and in residualregulation "Departments of State and Commerce, "A White Paper on New Interna- of nondominant carriers tional Satellite Systems," op cit , p 42 "See main ch 6 for a discussion of other alternative means of dealing with "See Joseph 5 Schmidt and Ruth M Corbin, 'Telecommunications in Can. COMSAT's future status "It has already come under fire A number of US carrierspetitioned the ada The Regulatory Crisis," Telecommunications Policy, vol 7,September FCC to be allowed to acquire capacity in the INTELSAT systemparallel to 1983, pp 215.227 "See Andrew C Brown, "For Sale Pieces of the Public Sector," Fortune, COMSAT, in much the same way that they now own capacity in transatlan- the issue for the vol 108, Oct 31, 1983, pp 78-84, for a discussion of the privatizationof tic cables The FCC recently turned them down and closed the future, British Telecom Also "Evaluating Telecom's Outlook," New York Times, time being, but it will undoubtedly be raised again at some time in p DI Actual sale of 50 8 percent of the stock tothe public took place on perhaps as an alternative to private satellite ownership (Satellite News, Apr Nov 28, 1984 A second domestic interexchange carrier has alsoemerged 2, 1984, p. 2) Cable & Wireless' wholly owned subsidiary, Mercury Communications See "'As of January 1985, besides that of COMSAT, the FCC had approved ap- also Eli M. Noam, 'Telecommunications Policy on the Two Sides of the Atlan- plications of the following firms or their subsidiaries to distribute INTELSAT tic Divergence and Outlook," op cit Business Service Imernat.onal Relay, Inc , ITT Corp., United Brands Co (sub- the Fed- sidiary TRT Telecommunications, Inc ), IBM Corp (joint venture subsidiary: "See Marcellus 5 Snow, "Telecommunications Deregulation in Vitalink eral Republic of Germany," Columbia Journal of World Business, vol18, Satellite Business Systems), Satellite Gateway Communications, Inc., International Communications, Inc , McDonnell Douglas Isubsodiary- FTC No 1, spring 1983, and Dan Schiller, "The Storming ofthe PTTs," Datama- bon, May 1983, pp 155-158 Satellite Systems, Inc I, and United Video, Inc 232 224 International Cooperation and Competition in Civilian Space Activities

lowed this by removing the requirement that COMSAT The changes that have already taken place in the must own a half share of the general-purpose INTELSAT international regulatory regimemean that the inter- Earth ..tations.64 national communications game .villnow be played In the view of same, this evolution is too slow. In by a greater number of potential U.S. players. Thisin- their view, it may allow COMSAT to take advantage troduces one new element, the increased ability of the of its special position in international communications PTTs to use their monopoly power at theexpense of to unfairly cross subsidize its competitive domestic competitive U.S. carriers (and consumers) by favor- activities, despite the special acccunting rules devised ing those U.S. carriers which offer the most advanta- by the FCC to minimize the possibility. geous terms.0 In the extreme, t'-'s would mean sell- The FCC's abandonment of the distinctions between ing the right to interconnect to the single highest international voice and record carriers and interna- bidder. In this way, PTT could get most of theexcess tional and domestic carriers, together with its moves profit obtainable from the monopolystructure. to end the special position of COMSAT, already make Care needs to be taken in interpreting the prices a significant difference in the way the U.S. industry ("accounting rates") paid by international carriersto fac,s the world. What the changesmean collectively is that all their country-pair partners ("correspondents") in other U.S. communications carriers (except countries. With certain exce' Ions, notably private COMSAT, for the present) will be allowed to operate lines, carriers derive revenues only fromcustomers in international communications markets in the nJarly sending outbound communications and donot charge same way as far as the U.S. Government is concerned. for inbound ones. Since country-pair traffic flowsare What this will mean in terms of actual competition usually unbalanced, sometimes with heavynet flow in the intermediate-range future is in doubt however. in -J, de direction, there is a need for the carrier with First, AT&T currently has a dominant position in in- toe heavier flow (and heavier collection of tariffreve- ternational service markets: at the end of 1983,AT&T nue from customers) to compensate the carrier that alone was usirg approximately 88 percent of all oble is the net communications recipient for theuneven and satellite circuits in service between the United use of jointly provided facilities. States and Europe just for message telephone service.62 It is a two-step procedure. First, there isa barter Despite its important domestic deregulatorymoves, mechanism, whereby minutes inone direction are he FCC has been rather cautiousin extending deregu- traded one-for-one for minutes in the other direction, lation directly into international communications. For up to the level of the smalbr directional flow. The the most part, the foundations of the international country-pair partners then complete the settlement by communications regime, in which competition is negotiating a price for the excess minutes, the sev' limited, have not been touched. "accounting rate." This is than multiplied by thenum- . ,,,,,ctions on facilities construction, ownership, ber of excess minutes to determine theamount to be and use, for instance, are one of the key elementsin paid to the net recipient. Thesepayments are made the current international communications regulatory regardless of which transmission mode is used and, structure. Up to 1985 the FCC continued to approve therefore, cover communications sent both by cable carrier facilities agreements and implicitor explicit bal- and satellite.64 ance criteria. The proposed transatlantic TAT-8 cable, For voice service, there is a net communications for instance, which received FCC approval in1984, outflow from the United States, and U.S. carriers will be jointly owned by the traditional U.S.interna- therefore typically make payments to the PITs. Any tional service carriers, together with foreign PTIsand increase in the accounting rate that a foreign PTT governments. Likewise, INTELSAT, among other things, could negotiate with U.S. voice carriers would there- is a satellite cartel, and the FCC has been a strong sun fore typically increase the operatingexpenses and de- porter of INTELSAT. The pending applications for pri- crease the net revenues of the U.S. carriers. For rec- vate "international" and "transborder" facilities, how- ord service, the reverse movement in the accounting ever, are forcing the FCC to reevaluate its position on rate would disadvantage U.S. carriers. While there is facilities. The reevaluation also appears to be under- some variation in directional flow among individual way in the current inquiry on facilities loading. Wheth- U.S. record carriers, the record carriersas a group er this reevaluation will result in important U.S. de- have more traffic flowing into the United States than regulatory moves in international communicationsis not clear. "According to GAO, op cit, p 18, the PTTs or groupings of PTTs representing Belgium, Luxembourg, the Netherlands, Denmark, Finland, Iceland, Norway, and swede, invited potential suppliers of data communication services to make accounting rate bids on existing and new services "FCC, 'Second Report ," op cit,Ian11, 1985 1N01, op p 12 1The partners also negotiate an exchange rate, the "settlement rate,"so the paptent can be made in the appropriate currency

233 Ch. 6Satellite Communications 225 out. Here PTTs typically gain by pressuring U.S. rec- ship of oceanic cables. For instance, the planned TAT- ord carriers to decrease the accounting rate, which, 8 and TAT-9 fiber optic cables are to be owned jointly decreases the revenues of U.S. carriers. by a consortium of AT&T, seven other U.S. interna- ..ncam bat the use of PTT monopoly power to dis- tional carriers, British Telecom, French Telecom, and advantage competitive U.S. carriers, the FCC has man- virtually every PTT in Europe. The Hawaii 4/TRANSPAC-3 dated that all potential U.S. connectors agree on a cable that is to link the U.S. mainland to Japan and single accounting rate. Ironically, this discourages several other Asian countries in 1988 or 1989 will be competition among the U.S. carriers, and, in particu- also jointly owned by numerous telecommunications lar, does not allow new entrants to compete on the entities (22 in all from North America, the Pacific re- basis of price. It thereby lessens the benefits that con- gion, and Europe). sumers derive from increasing international competi- In both the North Atlantic and Western Hemisphere tion." It also illustrates the broader principle that half- satellite arenas, deregulatory pressures from the U.S. way liberalization of markets may have unintended private sector have recently become intense. They are consequences. currently manifesting themselves mainly in attempts to enter communications markets with private facili- Entry Into U.S. International ties. The traditional U.S. international sevice carriers, Satellite Communications Markets augmented by Western Union Telegraph Co., MCI In- ternational, and GTE Sprint, require correspondent In most foreign countries, when there is more than relationships with the PTTs of the destination coun- one potentially connecting U.S. firm, each country de- tries, and while some entry is taking place in the* termines which carrier or carriers it will interconnect markets, they are not the scene of the most active en- with and which it will exclude in each market seg- try. Western Union's ability to enter many internation- ment." The arrangement is facilitated by joint owner- al record markets, since being allowed to by the FCC, and MCI International's entry into the United King- dom, Belgium, Brazil, and other voice markets in late "This point is made in an unpublished paper by Eli Noam presented at 1984/early 1985 are the most notable events. The most the Research Workshop on Economics of Telecommunications, Information active entry is currently being attempted in transatlan- and Media Activities in Industrial Countries, National Science Foundation, Apr 30-May 2, 1984, Washington DC tic and Western Hemisphere satellite faccilities mar- win the United States, the Federal Communications Commission has re- kets (as described above, in ch. 6) and in markets for quired interconnection Nevertheless, since usually there was °my one for- business communications facilities, such as INTELSAT eign carrier to connect with in each market, the market structure in country- pair markets remained noncompetitive Business service.

234 226 International Cooperation and Competition in CivilianSpace Activities

APPENDIX 6B.-THE COMMUNICATIONSSATELLITE EQUIPMENT MARKET

Introduction ly, considerable skepticism of both U.S. and worldwide projections of satellite communications equip- The large-scale development of the satellitecom- ment demand is warranted. munications service industry has been paralleled by the requisite development of a large satellite equipment industry. Estimated worldwide investment in Satellite Markets commercial communications satellites from 1965to The bulk of satellite communications services (out- 1985 (not including the Soviet Union) will have been side the Soviet bloc) in the 1980s and 1990s will be $4.8 billion with 132 launches.' This is shown in fig- provided by INTELSAT and other global systems,4 ure 6B-1, which breaks out this investment for vari- re- gional systems such as ARABSAT, PALAPA, EUTELSAT, ous countries, organizations, and regions. and the potential private Western Hemisphere and Some analysts foresee continued exparbion in com- transatlantic systems; and national systems, particu- munication satellite systems. In one recent optimistic larly those of the United States, Canada, Mexico, Bra- forecast, for instance, the world market for satellite zil, Japan, India, China, and Australia. The latterare communications equipment in the 1980-2000 period starting to provide increasing amounts of transborder is projected to be $30 billion to $50 billion.' Expan- service to neighboring nations; consequently, the dis- sion and periodic replacement of the world's satellite tinction between national and regional will become communications systems, which will require continu- less clear. Information on major international ing future investment in satellites and ground commu- segment nications and direct broadcast satellites (OBS) which equipment, is included in this projection. are in use already or reasonably certain to be orbited While this is consistent with one of the possible fu- soon are listed in table 6B-1. ; 'es for satellite communications, previous analysis The United States is the world's largest single mar- 1;1 chapter 6 concluded that the demand for interna- ket for satellite communications equipment. One esti- tional satellite communications services on which the mate places U.S. investment in commercial commu- demand for satellite equipment depends, is highly nications satellites it $1.63 billion between 1965 and certain, particularly in the 1990s. Although the domt..,- 1985 as shown in figure 6B-1 and $3.19 billion be- tic markets for satellite communications in the United tween 1986 and 1989 as shown in figure 6B-2. In April States and other countries are not ana!yzed in this as- 1983, the Federal Communications Commission (FCC) sessment, it is clear that demand for domestic, as well authorized 19 new communications satellites for as international, satellite services and for equipment launch by 1987more than are to be launched by the to provide them is also highly uncertain.' Consequent- rest of the non-Communist world combined.s Pend- ing before the FCC are applications forover 50 more 'R Film A Sciinapf. and S Fordyce, "World Communications Satellite communications satellites6 (represented by 22 differ- Market Characteristics and Forecast," prepared by Communca ions 21 Corp , Reoondo Beach, CA, for the NASA-Lewis Research Center, Cleveland, OH, ity for these services 0 11 (1980), 0 5611990) and 0 87 (2000) This, there- NASA CR-168270, November 1983 fore, presents one view of the outcome of technological competition between 'See Ted Lanpher, "ACTS The Case for U 5 Investment 30/20 GHz," satellites and fiber optic cables In addition, commercialization of space ven- Satellite Communications, May 1983 A second projecticit for the world tures such as launch vehicles and materials processing may divert invest. equipment market between 1983 and 1990 in just the 1,9,12 GHz Ku band is $25 billion, peaking in 1988-89 Interview with Dennis Fraser, Corporate ment capital from communications satellites See lay C Lowndes, "Increased Space Commercialization May Tighten Investment Capital," Aviation Week Vice President and General Manager, NEC America Broadcasting Equipment and Space Technology, Apr 29, 1985, pp 123-128. Division and Executive Vice President Alcoa-NEC Communications Corp g, INMARSAT as quoted in Satellite Week, Mar 28, 1983, p 7 ~Personal communication, FCC, May 1985 No more have been author- 'For a recent forecast of the demand for U S satellite and terrestrial tele- ized since April 1983 In addition, the authorizations granted in April 1983 communications rapacity, se. ; Stevenson, W Poley, J Lekan, and JSalz- to Advanced Business Communications, Inc man, "Demand for Sdtellite.Provided Domestic Communications Services , Rainbow Satellite, Inc , and United States Satellite Systems, Inc, all in Kuband, have since been declared to the Year 2000," Technical Memorandum 86894, NASA, Lewis Research null and void The FCC hopes to have the pending applications settled by Center, Cleveland, OH, November 1984 For the decades of the 1980s and August 1985, prior to ORB-85 1990s, the authors forecast the average annual demand for long-haul com- 'Including spares, but not including previously built replacement satellites. munications capacity in the United States to grow at 1 6 and 3 8 percent Much of this capacity is for private business networks which bypass the lo- respectively, but that the demand for satellite capacity will grow at 10 4 and cal terrestrial telephone networks Reasons why businesses have invested 7 5 percent, respectively In trier projection, the ratio of total satellite de- in such private bypass facilities are that they can avoid cross subsidizing res. mand to total long-haul demand increased rapidly from 0 15in 1980, to 0 35 in 1990 and 0 51 in 2000 The authors project an even more dramatic in- idential phone service, they may be able to gain types of service not available over the public network, and large users might find their crease in the ratio of business services demand for satellite capacity (data own networks to be economic since they can design them without provision for redun- and video (mostly videoconferencing1) to demand for total long-haul capac- dancy (For a discussion of these issues, see House of Representatives, 98th 2 1; I Ch. 6Satellite Communidations 227

Figure 8111-1.Estimated Worldwide Investment In CommercialCommunications Sate Illtes,a 1985-85 (1983 dollars)

INMARSAT $36 million (1)

Arab States $46 million (1) Australia $116 million (2)

Total expenditures $4,795 million Total laum,hes (132) aDoea not include the Soviet 'Union SOURCE Data from R Filep, A Schnspf, and S Fordyce, "World Communications Satellite Market-CharactAristiceand Forecast," prepared for NASA by CommunICa- lions 21 Corp , NASA CR.188270, November 1983, p 12

ent companies) and about 18direct-broadcast satel- Congress, Committee on Energy and Commerce, Report on HR 4102, Univer- lites.' Not all of these satellites will be built, partly be- sal Telephone Service Preservation Act of 1983, Report No 98.479, Nov 3, 1983, "FCC Needs to Monitor a Changing International Telecommunica- cause a number of the firms arerequesting the same tions Market," General Accounting Office Washington, DC, Report RCED- 83-92, Mar 14, 1983, "Efficiency vs Comity in U 5 International Telecom- and Space munications Regulation," by Douglas L Adkins, paper presented at the So- 'See "FCC Approves 4 Firms for Satellite TV, Aviation Week ciety of Government Economists' Session on International Regulation, ASSA Technology, Oct 15, 1984, p, 22, and "Four Firms Win Approval of FCC 1984, Meetings, Dallas, TX, Dec 28, 1984, and "Breaking Up AT&T" by Mary H for TV Satellites," Aviation Week and Space Technology, Dec 17, Cooper, Editorial Research Reports, vol 11, No 23, Dec 16, 1983 p 18

236 228 International Cooperation and Competitionin Civilian Space Activities

Table 8-I.international Communications and Direct-Broth:cast Satellite Series Name Date Owner Manufacturer Technical characteristics AMERSAT 1985, 86 American Satellite (jointly RCA Astro-Electronics Six Ku-band (14112 GHz) owned by Fairchild transponders plus 12 C- Industries and band (614 GHz) Continental Telephone) transponders ARABSAT 1985, 86 Arab Satellite Organization Aerospatiale/Ford 25 C-band .ransponders plus Aerospace 1 S-band transponder Anik 1978, 82, 84 Telesat Canada Anik B-RCA Astro- Anik B, 18 transponders; Anik Electronics, Anik C- C, 16 transponders; Anik 0, Hughes Aircraft, Anik D- 24 transponders. All Ku or Spar Aerospace/Hughes C-band or combination BS 2 1984, 85 NASDA Toshibc. Amoral Electric 2 Ku transponders covering all Japanese territory BSE 1978 NASDA Comstar 1976, 78, 81 COMSAT Corp Hughes Aircraft 24 transponders at 6/4 GHz CS 2 1983 NASDA Mitsubishi Electric/Ford Six Ka-band (30/20 GHz) plus Aerospace 2 C-band transponders ECS 1984, 85 EUTELSAT British Aerospace Dynam. 12 Ku transponders leading Mesh consort. Galaxy 1983 Hughes Communications Hughes Aircraft 24 transponders at 6/4 Wiz Gstar 1984, 85 GTE Satellite RCA Astro-Electronics 16 transponders at 14/12 GHz Morelos 1985, 86 Mexican Government Hughes Aircraft 22 transponders (mix of Ku and C-band) INTELSAT IV 1974, 75, INTELSAT Hughes Aircraft including 12 C-band transponders 76, 77 participation by British Aerospace Dynamics, Thomson-CSF, AEG- Telefunken, Selenia, NEC INTELSAT V 1978.84 INTELSAT Ford Aerospace leads a 21 transponders at 6/4 GHz team that includes plus 6 at 14111 GHz Aerospatiale, MSDS, MBB, Mitsubishi, Selenia, and Thomson-CSF INTELSAT VI 1986. INTELSAT Hughes Aircraft, including 36 transponders in C-band shares by British plus 10 transponders in Aerospace Dynamics, Ku-band Spar Aerospace, Thomson-CSF, Selenia, NEC, MBB, Comdev, and AEG-Telefunken ITALSAT 1987 Italy (Teiespazio) Aeritalia and Selenia 6 transponders in Ka-band L-Sat 1986, 90 ESA British Aerospace Dynam. 2 transponders for direct (Olympus) leads; team includes broadcast TV; transponders Selenia, Marconi, BTM, for business services plus and Telespazio nao GHz Ka Marecs 1981, 82, 84 INMARSAT leases craft British Aerospace Two transponders can relay from ESA Dynamics (payload 30 to 50 voice channels made by Marconi Space simultaneously & Defense Systems) Marisat 1976 COMSAT Corp. Hughes Aircraft Transponders in VHF, L-band, and C-band

This includes all major satellites currently in service In the Western world as well as new ventures with a firm go-ahead Derived from "International Satellite Directory-Flight Data," Flight International, May 14, 1983,pp 1311.1330 and Satellite Communications Notebook, 1984 "%Moved November 1964 after a previous failedmission NOTE Ali satellites are geosynchronous

237 Ch 6 Satellite Communications 229

Table B-1.International Communications and Direct-Broadcast Satellite SeriesContinued

General information Design lite (years) Launch Two satellites ordered so far by American Satellite AMERSAT A, 8.5 yrs. Shuttle AMERSAT B, 10 yrs.

Will provide television, voice, and data 'mks among Arab League countries 7 Ariane, Shuttle

Used for Canada's domestic network of communications satellites Anik B, 7 yrs. Anik Delta, Shuttle C, 8 yrs. Anik D, 9 yrs.

There will be two craft in orbit. Will bring television to Japanese islands 5 N-I1 and mountainous regions Medium-scale broadcasting satellite for experimental purposes N/A Delta A series of four U.S. domestic communications craft, leased by AT&T 7 Atlas-Centaur Japan's first operational domestic communications satellites. The network 3 N-II comprises two craft in orbit European Communications Satellite. Five ECS are being built, procured for 7 Arlene Eutelsat by ESA A series of three craft which Hughes Comm. will own and operate 9 Delta The first domestic communications craft bought by GTE; they previously leased 10 Ariane Mexico's first domestic communications satellite; will relay television, 9 Shuttle telephone calls, and data Older generation INTELSAT. Presently three IVs are in service as well as 7 Atlas-Centaur four INTELSAT IV As

Th' largest series of commu lications satellites in the world, providing two- 7 Atlas-Centaur, thirds of all international links Ariane

INTELSAT's future generation of satellites. The initial contract was for 5 10 Ariane 4 or craft, with options for up to 11 more Shuttle

Italy's first domestic communications craft-intended as semi-operational 10 Ariane or Shuttle Large Satellite (L-Sat) is Europes' entry into direct broadcast satellites and Olympus-1, 5 yrs. Arlene business communications Olympus-2, 10 yrs.

Europe's first maritime communications satellite. Marecs A INMARSAT 7 Ariane debut was May 1, 1982

Worlds first maritime communications satellite. Used by U.S. Navy and 8 Delta INMARSAT to provide ship-shore link

This includes all major satellites currently in service in the Western world ss well ss new ventures with a firm go ahead Derived from "internationalSatellite Directory. Flight Data." Flight International, May 14, 1983, pp 1311.1330 and Satellite Communications Notebook. 1984 "Retrieved November 1964 after a previous failed mission NOTE All satel'ites are geosynchronous 238 230 International Cooperation and Competitionin Civilian Space Activities

Table B-1.International Communications and Direct-BroadcastSatellite SeriesContinued Name Date Owner Manufacturer Technical characteristics PALAPA 1976, 77, Permute! (Indonesian Hughes Aircraft 12 transponders In C-band; 1, 2 84, 95 telecommunications 24 transpond. In C-band; B1, B2 administration) Postsat 1996 or 87 German Ministry for 1)ost MBB/ERNO (as 7 transponders at 14/12 GHz and Telecommu- subcontractor to plus 3 at 14/11 GHz plus 1 nications Siemens) experimental 30/20 GHz Satcom 1975, 76, Satcom I and II: RCA RCA Astro-Electronics 24 transponders at 614 GHz 81, 82, American Comm., Satcom 83, 85 III onward: Americom SBS 1980, 81, 82 SBS was consortium of Hughes Aircraft 10 active transponders at Aetna Life & Casualty, 14/12 GHz (Ku-band) COMSAT Corp. and IBM. COMSAT recently opted out Spacenet 1984, 85 ',..:thern Pacific RCA Astro-Electronics 12 transponders in C-band Communications plus 6 in Ku-band

TDRS 1983, 85 Spacecom (consortium of TRW Defense and Space 2 S-band transponders, duplex Continental Telephone, Systems single access; 2 Ku-band, Fairchild Industries, and duplex single access; 1S- Western Union) band 20-user mutt. access (P.0), 1 timeshare multiple access (TO); 12 C-band Telecom 1 1985 French Ministry of Matra Space with 6 transponders at 14/12 GHz Telecommunications/ participation by covering Franc', plus 4 at CNES European industry 6/4 GHz covering Africa and French Guiana plus 2 at 8/7 GHz for French govt. Telstar 3 1983, 84, 85 American Telephone & Hughes Aircraft 24 transponders at 6/4 GHz, in- Telegraph (AT&T) creasing to 30 In later series Unmet 1986 United Satellites, a British Aerospace 2 direct-broadcast television consortium of British Dynamics (payload by channels plus 4 trans- Telecom, British Marconi) ponders for mixed Aerospace Dynamics, business use and Marconi Space & Defense Systems Westar 1974, 79, 80% Western Union and Hughes Aircraft I,II, III: 12 transponders at 6/4 82, 84** 20% American Satellite GHz IV, V: 24 at 614 GHz DirectBroadcast: AUSSAT 1985 Aussat Hughes Aircraft 4 transponders with 30W power plus 11 with 12W power. All are 14/12 GHz STC 1986 STC, a Subsidiary of RCA Astro-Electronics 3 transponders at 14/12 GHz COMSAT Cori,

Tele-X 1986 Swedish Space Corp. Aerospatiale as prime, plus 3 direct-broadcast Saab-Scania, LM transponders (12 GHz) plus Ericsson, and transponders for video and Eurosatellite consort. data relay TDF 1 1986 TDF Eurosatellite 3 active direct-broadcast Ku band plus 2 spares TV-Sat 1985 German Ministry for Post Eurosatellite 3 active direct-broadcast and Telecom. transponders plus 2 spares 'This includes ill major satellites currently in service In the Western worldu well as new ventures with a firm go -ahead Derived from "Interned Onal Satellite Directory Flight Data," Flight internatIoncl, May 14, 1903, pp 1311-1330 and Satellite CommunicationsNotebook, 1984 "Retrieved November 1984 after a previous failed mission NOTE All satellites are geosynchronous

239 Ch. 6Satellite Communications 231

Table B-1.International Communications and Direct-Broadcast Satellite Series Continued

General information Design life (years) Launch Indonesia's first generation of communications satellites, PALAPA I and 2 PALAPA I and 2, 7 Delta, Shuttle are being replaced with PALAPA B1 and B2 yrs., PALAPA B1 and B2, 8 yrs. West Germany's first domestic communications satellite, also known as 7 Ariane 3 or 4 On; three craft built, two to be orbited

Series of U.S. domestic communications satellites relaying cable television 7, 10 Delta and other services Currently comprises six satellites

Satellite Business Systems (SBS) was first to provide a satellite network 7 Delta, Shuttle aimed at business users. Provides links among companies within the U S.

Southern Pacific has orderea four craft for its first network 8 5 Ariane 3, Ariane or Shuttle for #3 and #4 NASA's tracking and data-relay satellite system (TORSS) is designed to 10 Shuttle provide a more comprehensive communications link between spacecraft and the ground

France's first domestic communications satellite will relay telephone calls, 7 Ariane 2 or 3 television, and data within France and provide link with French overseas departments

The first domestic communications satellites owned by AT&T, which 10 Delta, Shuttle previously leased capacity on Comstars owned by COMSAT Britain's first direct-broadcast television satellite, whose two channels have 7 to 10 Ariane or Shuttle been allocated to the BBC. Unisat is a private venture

The bulk of Western Union's traffic is now carried by Westars III, IV, and V I,II, III. 7 yrs IV, V. I i.or-Delta, 10 yrs. Shuttle

Australia's first domestic communications satellite. AUSSAT has two main 7 Shuttle functionsdirect broadcast TV and radio, and the relay of TV, telephone calls, data, etc. Satellite Television Corp. was the first company to win approval for a direct 7 Shuttle, Ariane broadcast television network in the U.S. STC will eventually have a option network of four operational craft serving all 50 States First export application of the French-German TV-Sat/TOF 1 direct- 5 Ariane broadcast television satellite

France's version of the direct-broadcast television satellite, being 7.5 Ariane developed with West Germany West German version of a direct-broadcast satellite being developed jointly 7.5 Ariane with France, outside the framework of ESA -This Includes all major satellites currently in service in the Western world u well as new ventures with a firm poaheed Derived from "International SatelliteDirectory- Flight Data," Flight International, May 14, 1953, pp 1311 1330 and Satellite Communications Notebook, 1984 Retrieved November 1954 after a previous failed mission NOTE All satellites are peosynchronous

2 .1 0 232 International Cooperation and Competition in Civilian Space Activities

geosynchronous orbital slots in the C (6 GHz uplink/4 tions located in 146 countries, dependencies, and GHz downlink) and Ku (14/12 GHz) bands.8 Several areas of other special sovereignty." In most cases, the of the proposed satellites will either haveto be placed Earth stations themselves are owned and operated by in less desirable slots, not launched, or redesignedto the international telecommunications organizations of transmit in the higher frequency Ka (30/20 GHz) the member countries in which they are located. band.9 The present transponder oversupplyor inroads INTELSAT has contracted for nine INTELSAT V and made by fiber optic systems could also reduce the V-A satellites to be launched between 1983 and 1986 number launched.10 Geostationary commercialcom- and five of the new INTELSAT VI models for 1986-87 munications satellite locations, present and planned launches.'2 Optionsexistfor an additional 11 a,- of June 1984, are shown in figures 6B-3 and 6B-4. INTELSAT VIs, which, if built, are projected for launch The next largest civilian communications satellite in 1988 and onward. Anticipated INTELSAT investment market is INTELSAT, now operating 16 satellites with in commercial communications satellites between a network of 173 receiving and transmitting Earth sta- 1986 and 1989 at $1.2 billion would be second only to that of the United States ($3.19 billion) as shown 'The geostationary orbit is becoming increasingly congested, as shownin in figure 6B-2. figs 6B-3 and 6B-4 and allocation of these slots will bea major issue in the upcoming Space WARC '85 Some technical solutions will help alleviate but Several other satellite systems, for which the satel- not solve the seriousness of the congestion See, for example, L Pollack and lites have already been contracted, may later require H Weiss, "Communications Satellites Countdown for INTELSAT VI," replacement or follow-on satellites. These systems in- Science, Feb 10, 1984, pp 553-559, and Walter L Morgan, "Satellite Loca- tions-1984," Proceedings of the IEEE, vol 72, No 11, November 1984,pp clude that of the International Maritime Satellite Orga- 1434.1444 nization (INMARSAT) and others listed in table 6B-1 'See for example Chris Bulloch, "Space Communications Move Into the such as ARABSAT, ANIK,13 PALAPA, and AUSSAT. Ja- MillimetreWave Bands," Interavia, May 1984, pp 461-463, "Advanced Technology Satellites in the Commercial Environment," vol 2, final report, pan apparently plans a larger satellite series to follow prepared by Future Systems Inc, Rockville, MD, for NASA-Lewis Research its current series." France has not announced plans Center Cleveland, OH, March 1984, and C Richard Whelan, "Communi- cations Satellites Move to Higher Frequencies," High Technology, Novem. ,'INTELSAT, Annual Report, Washington, DC, 1983, p 9 ber 1984, pp 48.53 "Personal communication, INTELSAT, November 1984, Pollack and Weiss, '°See for exampleSatellites Outpace CustomersGap Viewed as Cycli op cit cal, The New York Time Apr 10, 1984, or Stephen Shaw, "Business Out- "See however, "Mature Market to Affect Next ANIK Ger.smation," Avia- lookSatellite Operators Bet on Demand Surge,High Technology Novem ber 1984 p 54 tion Week and Space Technology, Dec 10, 1984 pp 87-88 "Filep Schnapf, and Fordyce, op cit, p 89

2 4 i Ch. 6Satellite Communications 233

Figure 682.Estimated Worldwide investment In Commercial Communications Satellites,. 1985.89 (1983 dollars)

Canada $78 million (2) Arab States $45 million (1) INMARSAT $110 million (2) EUTELSAT $50 million (1) ESA Asia $59 million $183 million (1) (4) Japan $212 million Australia (4) $114 million (2) Latin America $166 million (4)

Total expenditures $5,892 million Total launches (107) Does not include the Soviet Union SOURCE Data from R Filep, A Schnapf, and S Fordyce, "World Communications Satellite Market-Characteristics and Forecast," prepared forNASA by Communica- tions 21 Corp , NASA CR-168270, November 1963, p 36

242 234 International Cooperation and Competition in Civilian Space Activities

Figure GBS.Locations of Commercial Communications Satellites In Geosynchronous Orbit as of June 25, 1984 v u : P C' 0 rn Z ;: k, . .. 10 8 ti O ' ';',;' & ; ;a e/47,-,,,,- 9,A. - ,4.- k- ,° 0444,- $4. 41° /

%C.'' 211 OS' CCOSta' '2 oi.sor 2 A.6005 /2 "410. 1 A 1 Sitcom IV Raduga 14

Gorizonitl GOmstar 0411 Ekren 7 90.E 90'W West., III Goozont6 Wank SOS 3 )2 NIstar 30 $5043 lb. Sas MANI&iv I' 4nr

Kay Broaricasts in C. band and ober frequencies below 10 7 GM! 4,4, Broadcasts so.. 10 7 GHz Including Kdand a, 114,4 05 .Broadcasts in multiple bands Mel cross over the 101 GMs demarcation Included are combination G and K band 4.1 satellites 4,24:4CJ 64.9:%., 0c, . .4, 4-, % `4, '4,

NOTE 1 IS refers to INTELSAT satellites 2 The following are USSR satellite series CSDRN, Ekran, ESDRN, Gorizont, Loutch, Potok,Prognoz, Raduga, Statsiona', Volna, WSDRN

SOURCE COMSAT, Communications Satellite Corporation Magazine, Washington, DC, 1984

243 Ch. 6Satellite Communications 235

Figure 813-4.Locations of Commercial Communications Sateilltes in Geosynchronous Orbit Planned for as of June 25, 1984

A i / ii fa 4 , b '''' 4i*e.:. Cl"::,..'' C'4e..,... , 1;4.t 44;%°' .#4)'''' SL e- , 00 eisc," of ,:71 ° S* 4.). vsf',,,,,

1410," Srk, j W,S 'fitfr. $:010 0 mrp--7,0,3Vsons' Fadsqs,tr4a,Sys" Gds PIS 09144".se170 11 yr*, Sat 11/ 10 ow 4 sisc i W040400 Wristar Bolcom Toilets, 30 Welter 71, Westar-0 Wester 0 Tema, 303 p 58S-4 90 to lac K 1 304..--.771,10WOW t at= Illy 111 10,I4 1.1113-7 Wellehg Galaxy III Galaxy Ka csoim 111I'"s4 sov Galaxy Ka 2 oeJd COMet, 2 Sporryr Cr rO U4301164i7 ta

4,, rt'84414ti Broadcasts in C band and offset tisouenc in below 10 7 OH, 4%4, E' 4.**, c Broadcasts above 10 7 GM, including K band 4%,Os* .0£464% Broadcasts in multiple bands that Cross osie the 10 7 OH, demarcation Included are combination C and KS/and satellites Ep wry nag 4444 >>>> 4:4, (07,9:;4 Ofr, 04*, %r 3 Sti".;,,, 4 , -% '014 ;2' 00 e

NOTE 1 IS refers to INTELSAT satellites 2 The following are USSR satellite series CSDRN, Ekren, ESDRN, Gorizont, Loutch, Potok, Prognoz, Raduga, Stetsiona, Volna, WSDRN 3 Multiple orbits are for legibility only All geosynchronous satellites orbit at approximately 22,300 miles above the earth

SOURCE COMSAT, Communications Satellite Corporation Magazine, Washington, DC , 1964

BEST COPY AVAILABLE 244 236 International Cooperation and Competition in Civilian Space Activities

to follow its current Telecom series, but there are likely has been only about 34 percent in recent years.21 In- to be follow-on launches. The planned German, dustry executives assert that this situation is cyclical French, and British DBS launches have been de- and expect the excess capacity to disappear as they layed." claim that a drop in service prices will eventually re- A 1983 market analysi318 also estimated that world- sult in a dramatic rise in demand." For several rea- wide (excluding the Soviet Union), 107 commercial sons, developing countries may also find it more fea- communications satellites, worth $5.9 billion, might sible in the 1990s to rent INTELSAT or other satellite be launched between 1986 and 1989, as shown in fig- capacity than to install large complex terrestrial ca- ure 6B-2. U.S. firms are likely prime contractors for ble networks." at least three-quarters of these 1986-1989 launches (as The replacement market will continue to be a shown previously in table 6-7). Also projected are 171 source of demand for satellites, even in the event of launches worth $8.6 billion for the period 1990-2000. a slowdown in the demand for satellite communica- In another separate study for NASA, it is estimated that tions, since satellite performance diminishes with age between 1983 and 1998, anywhere from 240 to 330 and satellites have typically been designed with life- civilian communication satellites will be launched by times of 5 to 10 years" (see table 6B-1, Design Life the non-Communist world.17 Again, as mentioned pre- column). Table 6B-2 lists estimated new and replace- viously, launch projections in the 1990 s are highly ment commercial communications satellites sched- uncertain. uled for launch in the interval 1984 to the year 2000. In the more predictable decade of the 1980s, it is The table demonstrates the significance of the replace- observed when comparing figure 6B-1 and figure 6B- 2 that investment in U.S. commercial communications "Chris Bulloch, "INTELSAT Builds Its Defenses Against Competition," In- teravia, October 1984 satellites between 1986 and 1989 ($3.19 billion) is pro- "Some industry groups contend that by the end of the 1980s, the supply jected nearly to double the investment (in constant of transponders may not keep pace with demand ITT forecasts 1,370 trans- 1983 dollars) during the previous cumulative 20 years ponders will be needed in 1990 and 3,594 in 2000 Western Union independently arrived at the numbers 1,140 transponders required in 1990 and ($1.63 billion). In addition, the U.S. share of this 2,779 by 2000 worldwide investment would actually increase from "This contrasts with the situation in developed countries which already have terrestrial networks of copper cable and microwave in place and also 34 percent in the 1965-85 period to 54 percent in the have many other available routes such as rail rights-of-way in which to lay 1986-89 period. The number of U.S. satellite trans- fiber optic cable ponders is expected to increase from 449 in Decem- 2Improvements in solar cell, battery, stationkeeping, and microwave am- plification technology have increased satellite lifetimes from 1 5 to 10 years ber 1984 to as many as 883 by 1987.18 in several cases (Pollack and Weiss, op cit After several years of relatively tight capacity, there is now surplus capacity, known as "transponder glut" in the industry." This oversupply is likely to continue for the next 2 or 3 years at least because demand is Table 813-2.Estimated New and Replacement expected to continue to lag supply as more satellites Communications Satellites Scheduled for are launched in the near future. This may result in less Launch During 19842000 launches actually taking place. According to a study by the FCC, carried out on a weekday afternoon in Year New Replacement December 1983, only 54 percent of capacity on U.S. 1984 11 10 communication satellites was in use. Of the 14 satel- 1985 21 9 lites studied, 143 of 312 transponders were idle.20 1986 21 7 1987 INTELSAT also has stated that its overall "load factor" 26 6 1988 20 9 1989 15 ""TVVT (Transmission Wave Tube] Problems Delay Fre ,ch, West German, 2 DBS Programs," Satellite News, vol 7, No 43, Oct 29, 1984, p 5, "France 1990 8 4 Delays Launch of Direct Broadcast TDF-1 Until 1986," Aviatirn Week and 1991 10 17 Space Technology, Ian 28, 1985, p 93, Chris Bulloch, "New Satellites at 1992 8 13 Telecom 83Spacecraft Builders Chase a Growing Market," Interavia, Jan- 1993 16 6 uary 1984, p 77 1994 10 10 ',Filep, Schnapf, and Fordyce, op cit 1995 15 9 "Outside Users Payload Model, prepared by Battelle Columbus Labora- 1996 13 4 tories for NASA, NASw-3381, June 1983 1997 "Shaw. op cit , p 54 Filep, Schnapf, and Fordyce, op cit 6 11 "The New York Times, op cit 1998 8 8 "Ibid See also "Quarterly Transponder Report of C-band and Ku-band 1C99 3 2 Communication-Satellite Space Stations" by Charles C Magin, Federal Com- Total 211 127 munications Commission Field Operations Bureau, Sept 28, 1984 and "FCC's SOURCE R Filer, A Schnapf, and IS Fordyce, "World Communications Eatel Transponder Loading Report Continues to Show Wide Disparities in Usage," lite MarketCharacteristics and Forecast," prepared for NASA by Corn. Satellite News, Washington, DC, vol7, No 45, Nov 12, 1984, p 1 municallona 21 Corp, NASA CR-106270, November 1963, ID 09

245 Ch. 6Satellite Communications 237 ment market, which represents over one-third of to- Table 613-3.INTELSAT VI: Subcontracts Let tal estimated launches during this period. by the Prime Contractor Hughes Aircraft Satellite life and therefore replacement interval is, Millions Percent of total however, subject to substantial uncertainty. Current Participant (U.S. $) contract value generation satellites typically have estimated lifetimes United Kingdom: of about 7 years, but experience with satellites to date British Aerospace . 32.4 4.8 and recent advances have led to estimates of increased France: life for satellites. RCA American Communications, for Thomson-CSF 24.8 3.7 instance, recently asked the FCC to approve design Germany: MBB 18.5 2.8 modifications on its Satcom VI satellite that would in- Selenia 24.4 3.6 crease its design life from 10 to 12 years.25 Japan: NEC 22.6 3.4 Canada: Satellite Suppliers Spar 18.0 2.7 U.S. Firms Total $140.7 21.0% SOURCE R Rep, A. Schnapt, and S Fordyce. -World Communications Satel lite MarketCharacteristics and Forecast." prepared for NASA by Com- U.S. firms have dominated the international satel- munications 21 Corp, NASA CR188270, November 1983, p. 101. lite market. All U.S. communications satellites thus far have been U.S.-built, and few, if any, of those now planned are likely to be foreign-built.26 Table 6-7 pre- space, and RCA Astro-Electronicsas seen in table 6- viously listed the prime contractors for commercial sat- 7.27 The largest supplier is Hughes Aircraft, which in ellites for the periods 1965-83 and 1984-89; U.S. dom- addition to providing satellites for several U.S. systems, inance is evident, but foreign activity is increasing. The has also sold satellites to Canada, Indonesia, Austra- large U.S. market share in commercial satellite prime lia, and Mexico. Hughes won the INTELSAT contract contracts was shown previously in table 6-6 with the to build at least the first five INTELSAT VI-class satel- United States capturing over 90 percent of the prime lites. That contract is worth $750 million and could contracts from 1965 to 1983. It should be noted that rise to $1.3 billion. Estimated satellite sales (civilian in the future (1984 through 1989) prime contracts will and military) for 1983 were $1 billion, up from $715 increasingly reside with the purchaser. It was also seen million in 1982. The backlog of orders in 1983 was in table 6-6 that U.S. firms have been the prime con- approximately $2 billion, half of which was for civil- tractors on all INTELSAT satellites, though models IV, ian satellites.26 Approximately 8,000 Hughes employ- V, and VI have had certain subsystems subcontracted ees work on space programs. to European and Japanese firms. For example, the RCA Astrc-Electronics estimated its satellite sales to INTELSAT VI contract, while going to Hughes Aircraft, be $240 million in 1983, but this figure includes Gov- involved subcontracts to non-U.S. firms totaling 21 ernment-purchased, noncommunications satellites. percent of the contract value, as shown in table 6B-3. The firm projects annual sales of $400 million by 1988 The Indonesian, Australian, Indian, and Mexican na- and has a current backlog of approximately $992 mil- tional satellites have been or will be mostly or com- lion.29 RCA employs 800 people on space programs. pletely U.S.-built. Even where the U.S. firm is not the Ford Aerospace & Communications has had con- prime contractor, U.S. suppliers often play a key tracts worth about $600 million to build 15 INTELSAT partthis is the case with the Braziliar, Arab League, V and V-A satellites. The company's recent annual and Japanese satellites. sales of civilian communications satellites has been Three U.S. firms dominate the civilian communica- in the range of $150 million. Ford has joined its com- tion satellite marketHughes Aircraft, Ford Aero- petitors, Hughes and RCA, in forming its own satel- "The improvement has come primarily from the substitution of a new up- lite communications service subsidiary to buy and per stage, which will allow a larger amount of 5taiionkeeping fuel (hydra. operate some of its equipment. The Ford Aerospace vile) to be transported (Satellite News, Apr 23, 1984, p 1) Responsible ad- Satellite Services Corp. has applied with the FCC to ministrations are moving their retired geosynchronous satellites into higher orbits to avoid the possibility of an orbit collision with an operating satellite launch three large "Fordsat" satellites each with 24 The orbital decay of these supergeosynchronous orbits is estimated at only C-band and 24 Ku-band transponders." 1 meter per year (Personal communication, Walter Morgan, Communica tions Center, December 1984 1 "A possible exception could be in the DBS market, where in at least one z7They are also large military satellite communications contractors case, a European consortium, Eurosatellite (led by Aerospatiale of France "Chris Bulloch, "Communications Satellite Prospects Competition Sharp- and MBB of West Germany) has teamed with General Electric of the United ens Between the 'Big Three' U S Builders," Interayia, vol. 38, October 1983, States to offer a satellite to that of one of the U S DBS firms (See Chris Bul p 1111-1113 loch, "Aerospatiale aid MBB Found a New Satellite Dynasty," Interayia, May "Ibid 1984, p 465 ) °Bulloch, "New Satellites at Telecom '83," op cit

246 238 International Cooperation and Gimpetition in Civilian Space Activities

Fore;gn Firms ment and neither the U.S. Government nor U.S. private r'rms develop technology desired by those who The major foreign firms building commun'cation sat- buy and operate satellites in the 1990s. ellites and subsystems were indicated in tables 6-7 and 6B-3. One possible competitor to the big three U.S. firms appears to be the Eurosatellite consortium, made Earth Station Equipment Suppliers up of Aerospatiale (France), Compagnie Generale d'Electricite (France), MBB/ERNO (West Germany), The major equipment components whichcom- ANT-Nactitrichten (successor in the space flight field prise Larth stations can be summarized by the following: to West iermany's AEG), and ETCA (Belgium). This consortium is not only offering a DBS satellite to U.S. 1. antenna and tracking system; firms, but may attempt to sell a low-capacity C-band 2. high power and low noise amplifiers; 3. ground communications equipment; satellite to INTELSAT for "thin-route" use over the In- dian and Pacific Oceans. Two satellite consortia, 4. multiplex equipment (analog or digital); and which include West European firms, have been ac- 5. ancillary and support equipment (air-condition- tive in bidding on the second-generation INMARSAT ing, power supplies, controls, etc.)" system- -namely, British Aerospace Dynamics Group/ Because U.S. Department of Commerce statistics do Hughes Aircraft Co.; and Marconi Space Systems not permit easy identification of space-related tele- Ltd./Ford Aerospace & Communications Corp./Aero- communications equipment, even the current size of sp, 'a1e.31 this market is difficult to estimate. In 1981 itwas esti- Tie major communication satellite firms of Japan mated that between 1981 and 1985 the worldmar- ket for Earth station equipment would total approxi- have been MELCO (Mitsubishi Electric Co.) and Tosh- iba. With assistance from Ford Aerospace, MELCO mately $2.2 billion (in 1984 dollars).34 The estimate built the current CS-2A and CS-2B satellites. With help for the period 1986-2000 was over $19 billion (in 1984 from Ceneral Electric, Toshiba is building the BS-2A dollars) ai shown in table 6B-4 which disaggregates and BS-2B direct broadcast satellites. Although the CS- ')Eloise Jensen, Tracey Harbaugh, Kenneth Telesca, and James Mahoney, "Senor StudySatellite Earth Stations," The Export-Import Bank, Washing- 2A is the wore-. first ope-ational civilian communi- ton, DC, June 1984 c 'ion satellite using the Ka band, it is a relatively small 34 'Task 11 Report Planning Assistance for the 30/20 GHz Program World- satellite with limited capacity: it wide Satellite Market Demand forecast," Western Union, NASA Report No is not likely to be 1-4-W-1-TH, June 19, 1981 offered for export. At some point in time, however, future generations of heavier Japanese satellites will probably be able to enter the export market. I Able 61:-4.Satellite Earth Station Market Forecast (millions of 1964 U.S. dollars)

Interiltional Competitive Factors 1986.901991.2000 Total in the World Satellite Market North America: INTELSAT...... 11 46 57 In general, it seems likely that those countries or Domestic 1,414 5,696 7,110 groups of cr les that have invested substantial pub- South America: INTELSAT lic resou -25 in building industries capable of produc- 124 469 592 Domestic 14 121 135 ing rommunication satellites will buy their satellites Europe: at home if they can.32 This has been the ease prey,- INTELSAT 78 276 354 ou5ly as shown in table 6-6. In the general export mar- Domestic 681 2,511 3,192 Africa: ket and in the U.S. domestic market (the world's larg- INTELSAT.. 416 est), U.S. firms will probably continue to dominate, 976 1,393 Domestic 5 36 40 based on their performance to date, although there Asia: are no trade barriers to the import of civilian commu- INTELSAT 184 897 874 nications satellites. Domestic 608 4,34 4,918 Oceania: Inroads into this U.S. dominance might occur if for- INTELSAT 35 129 164 eign governments continue their heavy subsidization Domestic 48 134 181 of satellite communications research and develop- Totals: INTELSAT 848 2,b86 3,433 "Spat' Business News, Apr 23, 1984 p 2, and Bulloch, "New satellites Domestic at Telecom '83op (it 2,768 12,808 15,578 "This commitment to their own prime contractors may nevertls. less in- SOURCE Derived from "Task 11 Report Planning Assistance for the 30/20 Wiz volve continued reliance on ter hnic al assistance or components from U S Program Worldwide Satellite Market Dv mend Forecast," Western Union, NASA Report No. 14-le..1711, as 19, 1901, pp 3-91 Dollen satellite manufacturers converted to 1984 values 24' Ch. 6Satellite Communications 239

by world region and INTELSAT versus domestic Table 6136.Major Worldwide Suppliers of systems. Satellite Earth Stations Several standards for Earth stations operating in con- Station typed junction with INTELSAT have been established with Small Medium Large Standard A and Standard B being the most common. United States: The features and differences of these INTELSAT sta- GTE International System Corp. X X X tion types are listed in table 68-5.35 Figure B-5 shows 111 Space b x x x how typical ground stations costs vary for hardware TIWc X X and technical expertise for differing sizes of antenna. Harris Corp. X X X Unlike the satellite manufacturing industry, which Scientific Atlanta X X X GEd X is dominated by three U.S. firms, the ground staticn MIA Communications Corp. X industry has many firms in the United States and sev- Andrew Corp X eral prominent foreign firms as well. The Earth station Satellite Transmission System, Inc X market is large and growing, there are many suppliers Aydin X X in the international arena, and competition among Microdyne Corp. X Amplica X them is intense. Price, rather than ony specific tech- Satellite America X nological advantage, 13 often the deciding factor in NETCOM-TES contract awards. The principal worldwide suppliers Japan: of satellite Earth stations and the station types they spe- NE', (Nippon Electric Co.) X X X cialize in are listed in table 6B-6.36 Mitsubishi X X X Company profiles of some of the major satellite France: Earth station suppliers are given in table 6B-7. No one Alcatel Thomson/Telspace X X X Thomson-CSF.... . X X X U.S. company produces all of the subsystems required for a significantly sized ground station; hence, numer- United Kingdom: Marconi X X X ous individual ver.c.ic,s may in fact be involved in a West Germany: typical station project. Often the prime contractor will Siemens X X X be a company with extensive background in micro- ANT Telecommunications X X X wave or antenna technology or in the actual commu- M BB X X X nications technology.3' For example, TIW specializes Heir STS X X X is See also Jensen, et al , op cit, and Committee PrintUnited States Ci- vilian Space Programs, volII Applications Satellites, Subcommittee on Space The smil, medium, rnd large station types are roughly similar to INTELSAT standard type Z, B, and A size stations respectively Science and Applications of the Committee ,,r1 Science and Technology. U 5 bITT, an early competitor In the large Earth station market, Is now withdrawing House of Representatives. May 1983, p 33 from this market ' "Note th2t 'small" station in this table refers to a Standard Z station which cTIW, previously &major supplier of Earth station antennas, is now penetrating carries S to 11 -meter antenna The small commercial and "backyard" sta the main contractor market bon iin he 1to 2-meter size range) could thus be considered a very small, dGE supplies LANDSAT type earth stations only mini, or mir ro station The number of suppliers of these very small stations SOURCES E Jensen, et al , "Sector Study-Satellite Earth Stations," The Export- is substantial and increasing rapidb and are thus not specifically listed in Import Bank, Wuhington, DC, June 1904, and Chris Bulloch a 4 Paul the table W Rubin, "Satellite TelecommunicationsThe Ground Segment ''lessenet alop cit Grows," Intravia, November 1904, ip 1231.1235

Table 6135.INTELSAT Earth Station Standards

Earth statiun Antenna size Frequency band (GHz) standard in meters Types of service uplink/downlink A 26-32 5 International voice, data, TV, IBS 6/4 B 10.13 International vcice, data, TV, IBS 614 C 17.4-38 International voice, data, TV, IBS 14111 D1 5 VISTA (International or Domestic) 6/4 D2 11 VISTA (International or Domestic) 8/4 El 3.5-4.5 BS (K band) 14111& 14112 E2 5.5 BS (K band) 14111& 14112 E3 ...8-10 BS (K band) 14111& '4112 Fl ....4.5-5 BS (C band) 614 F2 ...... 7.5-8 BS (C band) 614 F3 ...... 9-10 BS (C band) 614 G ...... 0.8-12 NTELNET, international TV, etc. 614 &14/11 Z ...... 4.5-18.3 Domestic voice, TV, data 614 &14111 SOURCE INTELSAT Report 198t 1986, Washington DC, Mar 31, 1965, p 17

249 240 International Cooperation and Competition in Civilian Space Activities

Figure 6B-5.Typical Ground Station Costs for Differing Antenna Sizes 32-meter heavy route 10-meter medium route FoundationShelter 2% 4%

Spares, tvsting equipment Spares, testing 5% Power equipment 4% 6%

4.5-meter thin route

FoundationShelter 2 %

Engineering n.antgement, documents, training 8% i' Spares, testing equipment 4%

POWS' 3%

SOURCE Ford Aerospace and Communications, 19131 in microwave and rad,antenna systems, whereas r--rlfed the emergence of non-U.S. competitors who GTE specializes in communications technology. Earth have successfully penetrated the market. station technology was pioneered by several U.S. Early dominance by U.S. supplier, of large Earth sta- firms. The maturing of the technology, however, has tions has shifted to dominance by Japanese suppliers. 249 Table 613-7.Major Satellite Earth Statki... SuppliersCompany Profiles

Company, country Origin Ownership Major business (products) Performance Comments 1. General Telephone &Created as partnership in Private GTE is the parent company of more than 60 communications, 1982 Well-positioned In ground station Electronics Corp , 1918 Incorporated in 1920 as products, research, and service subsidiaries operating in 39 Revenue & sales, 12,066 M S market as they are one of the few U S A (GTE) Associated Telephone Utilities States & 19 foreign countries Provides many types of com- Communications products, 1,614 M $full-line telecommunications com- (Reorganized in 1936 es Gen- munications services & the GTE products group produce prod-Net income, 550 M $ panies al Telephone Corp ) ucts ranging from complete communications systems & telephone instruments to TV sets 8 NOUN products

2 Harris. U S A Incorporated in 1926 Private Information systems, communications equipment including two-1983 Satellite-related revenues In 1983 way radios, microwave & lightwlie transmission equipment, Total sales, 1.424 M $ were about $350 M It has a wide Earth stations & antennas for satellite communication, auxiliaryinformation systems, 319 M $ breadth of products in its Earth sta- telephone products. & turn-key telecommunications networks Communications products, 425 M $ tion Tine Net Income, 27 M $

3 ITT, U S A Private Diversified, principally in telecommunications-transmission 1982 Also Involved In Insurance/financial switching & subscriber systems Has 45 major FILO & Total sales. 15,958 M $ services and natural resources. engineering Lenlers In 24 countriesIn 19:12 ITT operated Telecommunications sales. 6,375 M $ plants & performed business In about 100 countries Net Income, 703 M $

4. Scientific Atlanta, Organized in 1951 Private Designs manatactiiies, & markets commercial electronic 1983 1..3 formation of a European U S A signal-gensrating and receiving equipment Sales made directlyTotal sales, 327 PA $ marketing joint venture with to foreign purchasers constituted from 13 to 17% of the com- Communications products, 205 M $ PLESSY should have given pany's total sales in recent years Net income, 0 37 M $ Scientific -Atlanta better access to the U K & Common Market communications marketshowever. It was ended In Nov. 1984.

5 TIW, U S A Until July 1983. TON Systems Private Desigi,tabrication, & installation of large-diameter antennas 1983 A world leader In design and con- Inc wzs a wholly owned sub- Contract revenue, 9 8 M $ struction of large stwable antenna sidiary oi TIW Systems LtdIn Net income. 0 38 M $ sstems TIW Is now attempting to July 1983. Visionics Corp ac- penetrate the prime sontractor mar- quired the siiara: at TIW Sys- ket for Earth stations tems Lid and effected a reorganization resulting in two subsidiaries wholly owned by Visionics Corp

0 i 1 4 ,) Table SS-T.Major Satellite Earth Station SuppliersCompany ProfilesContinued

Company, country Origin Ownership Major business (products) Performance Ccmments

6 NEC. Japan Began as a partnership in Private Leading Japanese maker of telecommunications, electronic, & 1982 Sales distribution by product line 1848 Incorporated in Japan in related equipmentIn 1982 Government-owned NTT & Govern- Total sales, 4,872 M S 1982 1899 ment agencies accounted for 18% of sales, commercial 49%, Telecommunications sales, 1,461M S Elec Computers & industrial Elec. and overseas 33% Company has 42 major plants in Japan & Employees, 69,000 Equipment (23%), Communications 18 overseas plants R&D labs are located near Tokyo Sales/employee, $70,546 equipment (37%), Electron Devices (24%), Home Electronics (12%). Other (4%)

7 Mitsubishi, Japan Founded in 1870 as a small Private DiversifiedFuels, metals, m xibilery, foods, chemicals, & tex- 1983 Many of the company's overseas shipping company Later incor- tiles Its communications products exist in its machineries Total sales, 65,346 M S projects are undertaken in partner- porated group Has a worldwide network of offices & oilers a variety ofNet imome, 109 M S ship with local interests products & services Machinery, 13,893 M S Exports, 12,062 M S

8 Siemens A G Founded in 1847 by Werner Private D.versified telecommunications Data Systems, Electronic Com- 1982 Siemens & its subsidiaries are Me West Germany Siemens Reorganized as a ponents, Safety & Security Systems, Electrical Installations Total sales, 16,527 M S largest electrical company in West stock corporat on in 1897 Sales outside of Germany accounted for 55% of total sales in Telecommunications sales, 4,627 MS Germany 1982 Almost one-hall of its international business is in Export sales, (all categories), Western Europe 4,938 M S Net income, 272 6 M S Employees, 324,000 Sales/employee $51,009

9 The Thomson Group Group founded in 1893 as CSF-Diversified Telecommunications products transmitters, France (Thomson-CSFCompagnie Francaise French receivers, microwave, fiber optics, etcBrandt-wire & cables CSF 1981 Thomson-CSF Is a world leader In and Thomson-Brandt)Thomson- Houston Thomson- Govern- CSF is active in over 100 countries with manufacturing and/or Total sales, 4,363 M S electronic systems 8, equipment. Is Brandt & CSF merged in ment commercial subsidiaries & representative offices Thomson Telecommunications sales.2,574 M S a major subcontractor to Hughes 1968 Nationalized in early Corp of America & sew, outer major subsidiaries are located Net income, 12 M 5 aircraft for supplying electronics 1982 in the ll S Employees, 82,500 equipment for live INTELSAT VI Sales/employee, $52,885 satellites TELSPACE, CSF's joint venture with the CGE group, his many large Earth station contracts. SOURCES E Jensen et al Sack' StudySatellite Earth Stations The Export Import Bank Washington DC June 1984 annual reports of the respective companies, and private communications with I'companies involved October November 1144

2'",,1 Ch. 6SoerrIte CorpnwnIcatIons 243

For example, NEC of Jap...tne singit iirgest source Table 13-8.NEC Satellite Earth Station Orders of large (Standard A) INTELSAT Earth stab ins. Figure as of June 1984 6B-6 illustrates relative market shares of suppliers of INTELSAT Standard A and Standard B station s. Japa- INTELSAT Standard A Stations 59 nese companies supplifA 41.4 percent of th A sta- INTELSAT Standard B Stations 39 tions while U.S. companies supplied 29.0 I ercent. Domesticservice stations using U.S. companies performed better with B static ns, hav- leased INTELSAT canacity 181 ing a 46.7 percent sha e of the INTELSAT B stations Domesticservice stations using other dedicated satellites 590 while Japanese companies captured 37.1 percent. Domestic service stations In Japan 83 When considering all types of full-scale, nonmilitary INMARSAT coastal and other stations 88 Earth stations in the non-Communist world, NEC alone Total 1,018 has 1,013 of the approximately 3,000 stations, or SOURCE CMS Bulloch and Paul W Rub n, "Sahli/Ito Telecommunications about a 34-percent share of the world market, as The Ground Segment Grows,- Interavia, Noverntir 1964, p 1234. shown in table 6B-8. Japanese Earth station suppliers are successful in a broad spectrum of entearises. Satellite Business Sys- tems (SBS) ordered Time Division Multiple Access (TDMA) modems from Fujitsu, Ltd., for its Earth sta- spite Japan's limited experience in manufacturing so- tions. Japanese manufacturers have sold 130 RF ter- phisticated communications satellites,its ground minals to SBS.38 Satellite Television Corp., a subsidi- equipment firms compete very well in international ary of COMSAT, selected Alcoa-NEC Communications markets.4° Market trends indicate an increasing de- Corp. and Toshiba Corp. as suppliers of home receiv- mand for smaller Earth stations and a smaller market ers for its planned direct broadcast service.39 Thus, de- for the larger Earth stations. As the demand for small, direct-broadcast receivers and antennas grows, Japa- "Chris Bulloch and Paul W Rubin, "Satellite Telecommunications -The nese firms may increase their penetration of the U.S. Ground Segment Grows," Interavia, November 1984, pp 1231-1235 " FCC .valuating 15 Proposals for Saiulite TV Broadcasting," AV,ai1011 market. Whether Japanese companies will achieve in Week and Space Technology, Mar 12, 1984, p 116 this sector of consumer electronics what it did with television sets and video recorders remains to be Figure 8134.INTELSAT Satellite Earth Station seen.'" Suppliers' Developing countries are increasingly important markets for Earth station suppliers, since country authorities are placing a high priority on building and el"A" stations modernizing communications systems. However, in certain countries, as the number of sales within a "B" stations country increases and the country develops techn'- logically, ground station suppliers will be required to use an increasing percentage of local content.42

"Bulloch, "Satellite TelecommunicationsThe Ground Segment Grows," op cit "Sales of U S ground station equipment in Japan, however, has so far been minimal Telecommunications policy in Japan is now undergoing changes that may permit private companies to supply telecommunications services and own telecommunications facilities which theoretically could make possible the sale of U 5 communications satellites and ground station equipment in Japan in the future See for example New Trade Policy May Boost Japanese Imports of Satellites," Aviation Week and Space Technology, May

a. 1984 "Hughes to Announce Extensive Joint Venture for Japanese DOMSAT Cl) to Cl) a System," Satellite News, Washington, DC, vol 7, No 37, Sept 17, 1984, A a p 1, "Hughes to Study Japanese Telecommunications," Aviation Week and 0 cc O Space Technology, Sept 24, 1984, p 25, "Japan's Itoh Plans Hughes Sat. io Q com Buy," Aviation Week and Space Technology, Oct 22, 1984, p 30: "RCA z Astro to Announce Japanese Satellite Venture With Sony, Ford Works With Mitsubishi," Satellite News, Washington, DC, vol 7, No 49, Dec 10, 1984; John Burgess, "Japan's Phone Shake-Up May Profit U 5 Firms," The Wash- ington Post, Nov 18, 1984, p F1, Susan Chira, "Nippon Telegraph Sale to Public is Backed," The New York Times, Dec 14, 1984, p DI 'As of June 1962 From "Sector StudyWilms Earth Stations," by E Jensen, "Jensen, et al , op cit , and personal communications with Hams Corp et al , The Export-import Bank, Washington, DC, June 1964 and private com- and Scientific Atlanta, December 1984 These requirements for technology munications with INTELSAT, Washington, DC, November 1984 transfer are becoming increasingly prevalent

252 244 International Cooperation and Competition in Civilian Space Activities

APPENDIX 6C.-INTELSAT AND INMARSAT MEMBERS: SIGNATORIES AND INVESTMENT SHARES

Investment share* Country Signatory percent INTELSAT United States .. Communications Satellite Corp. 23.09 United Kingdom... British Telecommunications...... 12.93 France ...... Government of France 5.65 Japan ...... Kokusai Denshin Denwa Co. Ltd. 3.33 Germany, Federal Republic of.. Ministry for Post and Telecommunication 3.30 Australia...... Overseas Telecommunications Commission 3.24 Saudi Arabia . . Government of Saudi Arabia 3.14 Brazil Empresa Brasileira de TelecomunicaOes S.A. 3.04 Canada. Teleglobe Canada 2.98 Italy . SocietA Telespazio 2.15 Spain . Compaga Telel6nica Nacional de Espaiia...... 2.00 Mexico . . Government of Mexico 1.82 United Arab Emirates Ministry of Communications 1.74 Venezuela Comparlia Anorlima Nacional Telelonos de Venezuela . 1.42 Nigeria .. Nigerian External Telecommunications Ltd. 1.33 Singapore Telecommunication Authority of Singapore...... 1.30 Switzerland Direction Generale de l'Entreprise des Postes, Telephones et Telegraphes Suisses 1.25 South Africa Department of Posts and Telecommunications 1.17 Argentina Empresa Nacional de Telecomunicaciones 1.15 N- therlands Government of the Kingdom of the Netherlands 1.06 India..... Ministry of Communications 1.03 Iran, Islamic Republic of . Telecommunication Co. of Iran 1.02 Kuwait . The Ministry of Communications...... 1.01 Colombia Empress Nacional de Telecomunicaciones 1.00 Greece. Hellenic Telecommunications Organization S.A 0.84 Korea, Republic of Korea Telecommunication Authority 0.72 Belgium Regie des Telgraphes et des Telephones...... 0.72 Philippines Philippine Communications Satellite Corp...... 0.65 Sweden Swedish Telecommunications Administration...... 0.64 Portugal Companhia Portuguesa Ridio Marconi...... 0.63 Egypt. Government of the Arab Republic of Egypt 0.62 Peru . Empresa Nacional de Telecomunicaciones del Peru 0.06 Chile Empresa Nacional de Telccomunicaciones S.A 0.58 Israel Government of the State of Israel 0.56 Oman Sultanate of Oman 0.51 Thailand Government of Thailand 0.49 Indonesia Government of the Republic of Indonesia 0.48 Denmark . Generaldirektoratet for Post-og Telegrafvaesenet ...... 0.42 New Zealand Postmaster-General of New Zealand 0.40 Jamaica , Jamaica International Telecommunications Ltd. 0.04 Iraq Government of the Republic of Iraq 0.04

253 Ch. 6-Satellite Communications 245

Investment share* Country Signatory percent China, People's Republic of Ministry of Posts and Telecommunications.... 0.39 Norway Norwegian Telecommunications Administration .. 0.39 Algeria Government of Algeria 0.39 Kenya Kenya Posts & Telecommunications Corp. 0.38 Pakistan Government of Islamic Republic of Pakistan...... 0.37 Qatar Government of the State of Qatar 0.35 Ecuador Institute Ecuatoriano de Telecomunicaciones ... 0.35 Sudan Government of Democratic Republic of Sudan 0.33 Yugoslavia Yugoslav Posts, Telegraphs & Telephones 0.32

Morocco Government of Morocco ...... 0.31 Austria Government of Austria 0.30 Jordan Government of the Hashemite Kingdom of Jordan 0.30 Zaire.. Office National des Postes et Telecommunications du Zaire. 0.29 Ivory Coast Government of the Republic of Ivory Coast C.29 Malaysia Telecommunications Department, Malaysia 0.25 Cameroon Societe-des Telecommunications Internationales du Cameroun 0.24 Turkey Government of Turkey 0.23

Yemen Arab Republic . Government of Yemen Arab Republic ...... 0.22 Haiti Telecommunications d'Haiti S.A ...... 0.18 Iceland . Government of Iceland 0.18 Libya Government of the Libyan Arab Republic 0.15 Ireland Department of Posts and Telegraphs 0.13 Cyprus Cyprus Telecommunications Authority 0.13 Syria Government of the Syrian Arab Republic 0.13 Paraguay Administration Nacional de Telecomunicaciones 0.12

Angola . Empriesa Palica de TelecomunicacOes 0.11 Zambia . Government of the Republic of Zambia ...... 0.11 Bangladesh Telegraph and Telephone Board of Bangladesh.. 0.10 Lebanon Government of Lebanon 0.10 Ethiopia Telecommunications Service Mali Telecommunications Internationales du Mali 0.09

Finland General Directorate of Posts and Telecommunications . 0.08 Bolivia Empresa Nacional de Telecomunicaciones . ... . 0.08 Atbilanistan Ministry of Communications 0.05 Barbados Cable and Wireless (West Indies) Ltd 0.05 Burkina Faso Office des Postes et Telecommunications de Burkina Faso 0.05 Central African Republic Government of the Central African Republic 0.05 Chad Societe des Telecommunications Internationales du Tchad 0.05

Congo Government of People's Republic of the Congo ...... 0.05 Costa Rica Institute Costarricense de Electricidad ...... 0.05 Dominican Republic Compailia Dominicana de Telefonos 0.05 El Salvador Administration Nacional de Telecomunicaciones 0.05 Fiji Fiji International Telecommunications Ltd...... 0.05 Gabon Societe des Telecommunications Internationales ...... 0.05 Ghana Ministry of Transport and Communications 0.05 Guatemala Empresa Guatemalteca de Teleromunicaciones 0.05 Guinea.. Government of People's Revolut, -snary Republic of Guinea . 0.05

Honduras Empresa Hondureria de Telecomunicaciones...... 0.05 Liechtenstein Government of the Principality of Liechtenstein 0.05

254 246 International Cooperation and Competition in Civilian Space Activities

Investment share* Country Signatory percent

Luxembourg Government of Luxembourg 0.05 Madagascar Societe des Telecommunications Internationales 0.05 Mauritania Government of Islamic Republic of Mauritania . 0.05 Monaco . Government of the Principality of Monaco 0.05 Nicaragua . Compailia Nicaraguense de Telecomunicacionespor Sate lite. 0.05 Niger.... Government of the Republic of Niger 0.05 Panama . . . Intercontinental de Comunicaciones por Sate lite, S.A. . 0.05 Papua New Guinea Post and Telecommunication Corp. of Papua New Guinea 0.05 Senegal . . Government of the Republic of Senegal 0.05 Somalia... Ministry of Posts and Telecommunications 0.05 Sri Lanka Government of Sri Lanka 0.05 Tanzania .. Tanzania Posts and Telecommunications Corp. 0.05 Trinidad and Tobago Trinidad and Tobago External Telecommunications Co. Ltd. 0.05 Tunisia ...... Administration for Post, Telegraph and Telephone 0.05 Uganda . Ministry of Power, Posts, and Telecommunications 0.05 Uruguay ... Administration Nacional de Telecomunicaciones...... 0.05 Vatican City State Government of the Vatican City State 0.05 Viet Nam Direction Generale des Postes et Telecommunications 0.05

As of Mar 1 1984

S( ),A(1 1NIE LSAT ( ontributton of the Director General MS-14-6E 1A14184, Mar 19 1984 'See Footnotes on Original) Certainname abbreviations and changes hale been made by ()TA

INMARSAT United States Communications Satellite Corp. 30.73 United Kingdom British Telecommunications . 14.55 Norway Norwegian Telecommunications Administration. 11.59 Japan Kokusai Denshin Denwa Co., Ltd. 6.96 USSR Morsviazsputnik . 6.91 Canada Teleglobe Canada . 3.85 Denmark Post and Telegraph Administration 2.47 Singapore Telecommunication Authority of Singapore 2.39 Netherlands Netherlands PTT Administration . 2.28 Italy Telespazio 1.94 Germany, Federal Republic of Ministry for Port & Telecommunication 1.69 France Direction Generale des Telecommunications 1.67 Greece Hellenic Telecommunications Organization 1.67 Kuwait Ministry of Communications... 1.17 Spain Compatira Telekinica Nacional de Espaiia 1.17 Sweden Swedish Telecommunications Administration 1.10 Australia Overseas Telecommunications Commission 1.08 Brazil Emprgsa Brasileira de Telecomunicaciies S.A. 0.97 India Overseas Communications Service ...... 0.97 Poland Office of Maritime Economy 0.97 Saudi Arabia Ministry of Posts, Telegraphs and Telephones.. 0.97 China Beijing Marine Communications and Navigation Company 0.72 Belgium Regie des Telegraphes et des Telephones ..... 0.34 Argentina Empresa Nacional de Telecomunicaciones 0.30 Finland General Directorate of Posts and Telecommunications of

Finland ...... 0.30

255 Ch. 6Satellite Communications 247

Investment share* Country Signatory percent

New Zealand . . r 05t Office Headquarters .. .. . 0.21

Bulgaria . Shipping Corp. 0.16

.. 0 11 Portugal . . Companhia Portuguesa Radio Marconi

Egypt . . National TeIecommunications Organization 0.07 0.07 Liberia ... . . Republic of Liberia

Philippines. . . Philippine Communications Satellite Corp...... 0.07 United Arab Emirates Ministry of Communications 0.07 Sri Lanka Overseas Telecommunication Service 0.06 0.05 Algeria . Ministere des Postes et Tel6communications

Chile . Empresa Nacional de Telecomunicaciones S.A. 0.05 Gabon Telecommunications I nternationales Gabonaises 0.05

Iran . . Telecommunication Co. of Iran ...... 0.05 Iraq Republic of Iraq 0.05 0.05 Oman. Sultanate of Oman Pakistan Pakistan Telegraph and Telephone Department 0.05 Tunisia Republic of Tunisia 0.05

" As of Feb 6 1985

APPENDIX 6D.-ARTICLE XIV AND OTHER EXCERPTS FROM THE INTELSAT AGREEMENT RELATING TO SPACE SEGMENT "FACILITIES SEPARATE FROM INTELSAT" Agreement Relating to the Agreement, a global commercial telecommunications satellite system has been established, International Telecommunications Desiring to continue the development of this tele- Satellite Organization "INTELSAT" communications satellite system with the aim of May 19, 1971 achieving a single global commercial telecommunications satellite system as part of an improved global Preamble telecommunications network which will provide expanded telecommunications services to all areas of The States Parties to this Agreement, the world and which will contribute to world peace Considering the principle set forth in Resolution and c. nderstand i rig, 1721 (XVI) of the General Assembly of the United Na- Determined, to this end, to provide, for the benefit tions that communication by means of satellites should of all mankind, through the most advanced technol- be available to the nations of the world as soon as ogy available, the most efficient and economic facili- practicable on a global and nondiscriminatory basis, ties possible consistent with the best and most equi- Considering the relevant provisions of the Treaty on table of the radio frequency spectrum and of orbital Principles Governing the Activities of States in the Ex- space, ploration and Use of Outer Space, Including the Moon Believing that satellite telecommunications should and Other Celestial Bodies, and in particular Article be organized in such a way as to permit all peoples I, which states that outer space shall be used for the to have access to the global satellite system and those benefit and in the interests of all countries, States members of the International Telecommunica- Noting that pursuant to the Agreement Establishing tion Union so wishing to invest in the system with con- Interim Arrangements for a Global Commercial Com- sequent participation in the design, development, con- munications Satellite System and the related Special struction, including the provision of equipment,

38-797 0 - 85 - 9: QL 3 248 International Cooperation and Competition in Civilian Space Activities

establishment, operation, maintenance, and owner- ence or meeting shall include a provision for the ad- ship of the system, mission to the host country and sojourn for the dura- Pursuant to the Agreement Establishing Interim Ar- tion of such conference or meeting, of representatives rangements for a Global Commercial Communica- of all Signatories entitled to attend. tions Satellite System, (c) To the extent that any Party or Signatory or per- Agree as follows: son within the jurisdiction of a Party intends to establish, acquire or utilize space segment facilities sepa- Article I: Definitions rate from the INTELSAT space segment facilities to meet its domestic oublic telecommunications services * requirements, such Party or Signatory, prior to the (k) "Public telecommunications services" means establishment, acquisition or utilization of such facil- fixed or mobile telecommunications services which ities, shall consult the Board of Governors, which shall can be provided by satellite and which are available express, in the form of recommendations, its findings for use by the public, such as telephony, telegraphy, regarding the technical compatibility of such facilities telex, facsimile, data transmission, transmission of and their operation with the use of the radio frequen:v radio and television programs between approved spectrum and orbital space by the existing or planned earth stations having access to the INTELSAT space INTELSAT space segment. segment for further transmission to the public, and (d) To the extent that any Party or Signatory or per- leased circuits for any of these purposes; but excluding son within the jurisdiction of a Party intends individ- those mobile services of a type not irovided under ually or jointly to establish, acquire or utilizespace the Interim Agreement and the Special Agreement segment facilities separate from the INTELSAT space prior to the opening for signature of this Agreement, segment facilities to meet its international public which are provided through mobile stations operat- telecommunications services requirements, such Party ing directly to a satellite which is designed, in whole or Signatory, prior to the establishment, acquisition or in part, to provide services relating to the safety or or ,.tilization of such facilities, shall furnish all rele- flight control of aircraft or to aviation or maritime radio vant information to and shall consult with the Assem- navigation; bly of Parties, through the Board of Governors, to en- (I) "Specialized telecommunications services" means sure technical compatibility of such facilities and their telecommunications services which can be provided operation with the use of the radio frequency spec- by satellite other than those defined in paragraph (k) trum and orbital space by the existing or planned of this Article, including, but not limited to, radio INTELSAT space segment and to avoid significant eco- navigation services, broadcasting satellite services for nomic harm to the global system of INTELSAT. Upon reception by the general public, space research serv- such consultation, the assembly of Parties, taking into ices, meteorological services, and earth resources account the advice of the Board of Governors, shall services; express, in the form of recommendations, its findings * regarding the considerations set out in this paragraph, and further regarding the assurance that the provision Article XIV: Rights and or utilization of such facilities shall not prejudice the Obligations of Members establishment of direct telecommunication links through the INTELSAT space segment among all the partic- (a) The Parties and Signatories sha'l exercise their ipants. rights and meet their obligations under this Agreement (e) To the extent that any Party or Signatory or per- in a manner fully consistent with and in furtherance son within the jurisdiction of a Party intends to estab- of the principles stated in the Preamble and otherpro- lish, acquire or utilize space segment facilities sepa- visions of this Agreement. rate from the INTELSAT space segment facilities to (b) All Parties and all Signatories shall be allowed meet its specialized telecommunications services re- to attend and participate in all conferences and meet- quirements, domestic or international, such Party or ings, in which they are entitled to be represented in Signatory, prior to the establishment, acquisition or accordance with any provisions of this Agreementor utilization of such facilities, shall furnish all relevant the Operating Agreement, as well as in any other information to the Assembly of Parties, through the meeting called by or held under the auspices of Board of Governors. The Assembly of Parties, taking INTELSAT, regardless of where they may take place. into account the advice of the Board of Governors, The executive organ shall ensure that arrangements shall express, in the form of recommendations, its find- with the host Party or Signatory for each such confer- i, gs regarding the technical compatibility of such fa-

257 Ch. 6Satellite Communications 249 cilities and their operation with the use of the radio (g) This Agreement shall not apply to the establish- frequency spectrum and orbital space by the existing ment, acquisition or utilization of space segment fa- or planned INTELSAT space segment. cilities separate from the INTELSAT space segment fa- (f) Recommendations by the Assembly of Parties or cilities solely for national security purposes. the Board of Governors pursuant to this Article shall be made within a period of six months from the date of commencing the procedures provided for in the St )1.ittI l' s senate ( ortunittee on Aeronautical and Spat e SciencesInternational ( oriel ration in Outer Spar e A Symposium Dec ument 92 S7 92d Cons , foregoing paragraphs. An extraordinary meeting of the 1st sr ss 1971 pp h09 b37 Also at,ailahle in recent undated INTELSAT print, Assembly of Parties may be convened for this purpose 1\1 f (.01 The Agreement and the ()penning Agreement Washington DC

258 Chapter 7 REMOTE SENSING FROM SPACE

Contents

Page Introduction 253 Remote Sensing Policy 314 The Systems 253 Meteorological Remote Sensing Policy 315 -. Remote Sensing Policy 254 Land Remote Sensing Policy 319 Applications of Remotely Sensed Data 257 Options for Continued Financial Support ...319 Meteorological Remote Sensing Systems 258 Additional F olicy Options 321 U.S. Systems 258 Cooperation 322 Possible Future Directions 258 Ocean Remote Sensing Policy 323 Foreign Systems 260 Appendix 7A.Satellite Remote Sensing in International Cooperation in Meteorological Developing Countries 325 Satellite Systems 264 The Experience of Developing Countries ...325 Data Products and Service 266 Institutional Factors Influencing the Use of Market for Metsat Equipment and Services 270 Satellite Remote Sensing 328 Meteorological Satellite Issues 273 Political Constraints 329 Land Remote Sensing Systems 278 Appendix 7B. U.S. Environmental Satellites, The U.S. Landsat System 278 1960-85 332 System Development 280 Foreign Landsat Receiving Stations 280 Data Products and Uses 285 List of Tables Policy History of Land Remote Sensing 286 Table No. Pads International Relevance of Landsat 291 7-1. Countries With APT/HRPT Reception Equipment Market 292 Capabilities 267 Issues 293 7-2. Domestic Users of Meteorological Ocean Remote Sensing 302 Satellite Data 269 U.S. Oceanographic Systems 303 7-3. Derived Meteorological Satellite Foreign Systems 305 Products 269 Major Ocean Parameters of Inte7fist for 7-4. National Weather Service Hurricane, Scientific and Applied Uses 307 International Aviation, and Marine Applications of Ocean Remote Sensing 310 Forecast Programs 269 Issues in Ocean Remote Sensing 312 7.5. Costs for Some Landsat Data Products..282 7-6. Major Imaging Sensors Under 7-2. Image of Earth, Received Aug. 8, 1980, Development by NASA 282 by GOES Satellite 255 7-7. Foreign Landsat Ground Stations 284 7-3. Image of Northeast United States Taken 7-8. Categories of Foreign and Domestic in February 1979 by the NOAA-N Series Users 285 Polar-Orbiting Satellite 256 7-9. Domestic Distribution of Landsat 7-4. Image of New York City and Environs Products 286 Taken by the Thematic Mapper 257 7-10. Customer Profile of Landsat Total Data.297 7-5. Advanced TIROS-N 262 7-11. Agribusiness Industry Structure Analysis300 7-6. GOES Satellite 263 7-12. Geophysical Oceanographic 7-7. GOES Geographic Coverage 264 Measurement Design Capabilities 7-8. Path of Geosynchronous Satellite in for Seasat-A 302 Inclined Orbit 265 7-13. Measurement Needs for Oceanographic 7-9. Operational Earth Observation Satellites268 Satellites 305 7-10. One- and Two-Polar Soundings 276 7-14. N-ROSS Sensor Capabilities 306 7-11. Landsat-5 Spacecraft 279 7-15. Oceanographic Data Tactical 7-12. Cutaway View of the Mukispectral Operations 307 Scanning System 280 7-16. Ice Parameters of Importance in 7-13. Landsat Bands and Electromagnetic Different Operations and Research Spectrum Comparison 281 Areas 309 7-14. Thematic Mapper Sensor 281 7-17. Possible Oceanographic Satellite 7-15. Distribution by Foreign Ground Stations283 Applications 311 7-16. Customer Profile of Landsat Digital and 7-18. Impacts of Observed Parameterson Imagery Products, Fiscal Year 1984....287 Commercial Benefits 311 7-17. Sale of Landsat Imagery Frames 7A-1. Agency for International Development and Digital Products 296 Remote Sensing Grants and Projects, 7-18. The Seasat-A 303 1971-85 326 7-19. Navy Remote Ocean Sensing Satellite..306 7- 20. Radar Image of Kuskokwim Bay in Alaska 309 List of Figures Figure No. Page 7-1. Polar-Orbiting and Geostationary Satellites 254 Chapter 7 REMOTE SENSING FROM SPACE

INTRODUCTION The value of viewing Earth from space to pro- The Systems vide crucial resource and environmental information on the atmosphere, oceans, and land The National Oceanic and Atmospheric Ad- masses was recognized early in this Nation's de- ministration (NOAA) operates two civilian sys- velopment of space technology. It was an obvious tems (fig. 7-1) for making global meteorological extension of remote sensing by aircraft and bal- observations: a geostationary system (Geosta- loons, technologies that were already well-estab- tionary Orbiting Environmental SatelliteGOES) lished. Two years after the I lational Aeronautics using two satellites that continuously monitor and Space Act was signed, the United States re- weather systems within their field of view (fig. 7- ceived its first images from space taken by the 2),and a polar-orbiting meteorological system polar-orbiting2 weather satellite called the Televi- (Advanced Television and Infrared Observation sion and Infrared Observation Satellite (TIROS). SatelliteTIRCS) that observes meteorological phenomena in more detail over the entire globe This chapter describes the principal remote from ..wo satellites (fig. 7-3). sensing systems that have been developed by the United States and other countries and those that NOAA also operates the polar-orbiting U.S. are now under development. It draws heavily on Landsat system, which was developed by the a technical memorandum published in 1984 in National Aeronautics and Space Administration connection with this assessment.' The chapter ex- (NASA), to provide valuable data of high spatial plores the primary issues connected with the gen- and spectral resolution (rig. 7-41 of Earth's land eration, distribution, and application of remotely resources. Data from the sys' support a vari- ensed data, and assesses various policy options ety of applications, including assessing and man- k., Congress to consider as it debates the need aging renewable and nonrenewable resources, for remote-sensing technology for the atmos- mapping, and land -u,e p!anning. The Landsat sys- phere, land, and oceans. tem was transferred to NOAA in 1983 and is now managed as an operational system. The Depart- ment of Commerce is currently attempting to transfer the Landsat system *o private ownersh;p. In general terms, remote sensing is the art of obtaining informa- Ocean remote sensing systems are the least de- tion about objects, areas Jr phenomena through analyzing data gathered by devic_ placed at a distance from tlie subjects of study veloped of remote sensing efforts. Although the Remote sensing may refer to sensing over short distances, as in med- results from such experimental ocean satellites ical or Iaboraiory research applications using lasers, or over long as Seasat, Nimbus, and the Geodynamic Experi- dis?nces as in environmental monitoring from satellite platforms using advanced electro-optical instruments Once the initial data are sensed, they must be analyzed and interpreted either visually 'The development of the weather satellite began in the DOD, or through sophistwated computer analysis but was transferred to NASA in 1959. In 1961 the Weather Bureau 'In a polar orbit the satellite is inclined nearly 90 degrees to the was placed in charge of providing an operational weather satellite Equator As the satellite orbits, the Earth turns beneath, making pos- system. Operational satellite service° were moved to the Environ- sible direct overhead obsevations of the entire Earth over a giv . mental Scienc -Services Administration in 1965 and finally to NOAA period The geostationary satellites, by contrast, provide continu- in 1970. They now reside in the Natio,11 Environmental Satellite ous viewing but are limited to providing perpendicular viewing at Data and Information Service (NEEL which is part of NOAA. only one longitude at the equator All other points on Earth are 'On July 30, 1984, GOES-5 failed in orbit. This left the United sensed at some angle They therefore "see" the polar regions at Suites with only a single geostationary satellite (the western satel- a highly oblique angle The orbital elements of the meteorological lite, GOES-6) to provide data during the critical severe storm seasons TIROS satellites are so chosen to allow them to pass ove' y of the summer and early fall. To make up (in part) for the loss of portion of Earth's surface twice every 24 hours, onze passim irom information that lasing the eastern satellite entailed, NOAA moved Borth to south, and once passing from south to north GOES-6 to a central location This meant reduced weather service 'Remote Sensing and the Private Sertur Issues for Discussion for Alaska, Hawaii, and the Pacific Trust Territories. GOES-7, the (Vs Angton, DC U S Congress, Office of Technology Assessment, replacement for the failed GOES-5, will not be available for launch OTA-TM-I5C-20, March 1984) until late in 1985 or early 1986.

253 261 254 International Cooperation and Competition in Civilian Spare Activities

Figure 7-1.PolarOrbiting and Geostationary Satellites

Polar orbiting satellites Geostationary satellites

Gilmore Creek, Alaska Wallops Island, Virginia i I I Subsatellite Equator 530 ml point 22,300 mi ----414

28.8' earth rotation Orbit path per orbit

S Orbit plane rotates eastward 1* per day

SOURCE National Oceanic and Atmospheric Administration

mental Ocean Satellite have created inter:st in Remote Sensing Policy developing remote sensing systems that will provide resource information from the oceans, no Although the United States has led the world civilian operational U.S. system is planned.' in the development and operation of civilianre- Remote sensing from space at present consti- mote sensing systems, this year it will facecom- tutes a small part of a larger array of mapping petition from France for the sale of landremote services provided by terrestrial and airborne de- sensing data products. There is little commercial vices.' The data acquired from space are now market for data sales from meteorologicalsys- routinely integrated with other remotely sensed tems, but opportunities do exist for broad multi- data (aircraft and balloons) and terrestrial, air, and national cooperation in providing meteorological water mew irements, thus enhancing the value, data from space. The United States is exploring and expanding the application of both data sets. the prospect of joining with other Free World As discussed in detail below, ether countries ei- space-capable nations in buildinga cooperative ther operate, or have under development, vari- polar-orbiting global meteorological satellitesys- ous remote sensing systems; a few complement tem. Such a venture could strongly enhance the U.S. efforts, others will compete with U.S. level of service delivered by such systems. systems. In 1983, the Administration accelerateda process begun in the late 1970s intended to lead to 6The U 5 Navy i! planning a system called Navy Remote Ocean the transfer of the Landsat system from the Fed- sensing System (N-ROSS) which may be launched in 1988 or 1989 eral Government to the privatesector. The prin- Most data from this system will be available to civilian users through cipal motivation for transferring the NOAA (see section on Ocean Remote Sensir.) system to pri- 'In fiscal ytsr 1984, sales of Landsat data made up 34 percent vate hands is that the private sector excels both of the total sa' ss of remotely seised data from the EROS Data Center at innovation and at deb,:oping markets for in Sint. a Falls, SD Private services also sense and sell aircraft data goods and services. The 98th Congress passed the 262 Ch. 7Remote Sensing From Space 255

Figure 7-2.Image of Earth, Received Aug. 8, 1980, by GOES Satellite

Two hurricanes are clearly visible: Allen in the Gulf of Mexico and leis just west of Mexico.

SOURCE National Oceanic and Atmospheric Administration

263 256 International C.operation and Competition in Civilian SpaceActivities

Figure 7.3. Image of Northeast UnitedStates Taken in February 1979 by the NOAAN Series PolarOrbiting Satellite

ta_ St,

e 4

Snow and ice cover are visible both on the land andon the Great Lakes.

264 Ch 7Remote Sensing From Space 257

Figure 7.4. image of New York City and Environs A significant international effort has begun in Taken by the Thematic Mapper (30meter resolution) remote sensing of the oceans. Both research and operational satellites are planned by the United iw States and other nations, making possible joint I research and data distribution efforts. The United . States is exploring ways in which to coordinate a, international efforts in ocean remote sensing. Applications of Remotely Sensed Data Data from satellite systems have been used for a variety of applications beyond thespecific scientific objectives that guided their development. Specifications for meteorological satellites and sensors initially were set to address current and future needs of the National Weather Serv- ice for weather forecasting and warning. How- ever, as the technology has evolved, the United States has used these systems to enhance its relations N. pith other countries by integrating instruments provided by other nations into U.S. spacecraft, and by freely sharing data with member 'ik 1 - The George Wasoington and Verrazano bridges are chiarly nations of the World Meteorological Organiza- visible. tion (WMO), a specialized agency of the United Nations formed to coordinate weather services on a global basis. Though the Landsat system has Landsat Commercia:ization Act of 1984 (Public a shorter history, the United States has also used Law 98-365) that provides for a phased transfer it as an ambassador for U.S. space technology of the Landsat system (see later section, Policy by selling data on a public, nondiscriminatory History of Land Remote Sensing) and authorizes basis, and through arrangements for direct trans- a subsidy to fund part of the capital costsof build- mission of Landsat data (on a fee basis) to foreign- ing and launching a commercial system. As the owned and foreign-operated ground stations. Department of Commerce implements the pro- Satellite remote sensing systems are also impor- visions of Public Law 98-365, Congress is over- tant to national security. 1 hough the United States seeing the transfer process. The q,restion Con- has consistently maintained separate civilian and gress now faces is whetheradditional legislation military systems, the programs have been mutu- or other measures will be necessary tlaid the ally supportive. In defense and civilian meteor- commercialization process. ologica! programs, mutual backup in case of sys- Transfer to the private sector raises se 'eral tem failures and free data exchange exewolify this questions: 1) whether this course of action will support. enhance or impede U.S. competitiveness with Government and civilian market potential vary other nations in this field, 2) whether private firms considerably for the different remote sensing sys- will eventually develop a self-sustaining business tems. Although the metsats have a long history of providing land remote sensing from satellites, of operation, these systems are just beginning to 3) how the Government might enhance that proc- develop a commercial value-added data indus- ess, and 4) what transfermodel best serves the try. The Federal Government is by far the largest needs of the United States? If the current trans- user of meteorological data.8 U.S. State and local fer process fails to establish a viable commercial °"Transftr of the Civil Operational tarth Observation Satellites operation, Congress will be faced with deciding to the Private Sector," U 5 Department of Commerce, February what to do about it. 1983 p 8-24

265 258 International Cooperation and Competition in Civilian Space Activities

governments, foreign governments, universities, Although the potential for applyingocean re- and commercial firms also use these data. Though mote sensing data to problems faced by ocean new applications for meteorological data are be- users is high, only short-term scientific satellite ing found for assessing crop conditions, scanning missions have been flown. Muchmore experi- the ocean, and for mapping waterresources, their mentation with actual data from operational sat- potential for expanded use is limited by the need ellite systems will be needed toassess the poten- for more complete computer models and by the tial commercial market for data and data products. availability of confirmatory data from higher resolution ocean and land satellite systems. The market for data from the Landsat system, which have always been sold to users, hasre- mained undeveloped. The Government purchases rent market has historically been small (see table 7-14 and fig. 7- 16 for the total Landsat data sales since 1972), these data have never nearly 50 percent of the Landsat data, but the been marketed commercially. Several analysts have predicted that commercial market for these data remains diffuse, given proper commercial marketing and a favorable Governmental unaggregated, and small.9 attitude, the future market could be large. Their analysis isin part the basis for believing that land remote sensing could be effectively commercialized See G William Spann, statement before the Senate 9For example, total shipped sales (not counting special charges) Subcommittee on Science, Technology, and Space of the Commit- for fiscal year 1984 amounted to only $3,812,128, 45 percent of tee on Commerce, Science, and Transportation, S. Hrg. 98-747, which was purchased by Government agencies Although thecur- Mar 22, 1984

METEOROLOGICAL REMOTE SENSINGSYSTEMS U.S. Systems'° Possible Future Directions NOAA manages two civilian environmental sat- Continued R&D on new sensors will enhance ellite (metsat) systems (see pp. 259, 260, and 261). the abilities of U.S. satellites to gather useful envi- The TIROS-N series of polar-orbiting satellites (fig. ronmental data. Because much meteorological 7-5) provide systematic high resolution global sensor technology is common to all national sys- weather observations, both day and night,to tems, new developments are applicable to both meet both U.S. and international data require- foreign and U.S. systems. Experience with micro- ments for a global, immediate, and long-range wave sou ndersl ' on Nimbus satellites, as well as weather forecasting system. The GOES series of on the NOAA-N series, indicates that a new geostationary satellites (fig. 7-6) provides contin- sounder capable of infrared sensing has prom- uous viewing of weather systems at visible and ise for better soundings in cloudy areas, and bet- infrared wavelengths between 70°N latitude and ter information on atmospheric water vapor and 70°S latitude (fig. 7-7), and complements the data precipitation rates. The proposed 15-channel received by the TIROS-N series. The GOESsat- microwave instrument would give better vertical ellites provide the weather imagesseen on televi- resolution, particularly in the stratosphere, and sion and in the newspapers. Both systems have would be supplemented with additional channels the ability to collect and transmit data from Earth- for sounding water vapor. The United Kingdom, based platforms. Both systemsare necessary for which now provides the microwave instrument providing adequate information about weather on the TIROS-N spacecraft, has expressed inter- conditions directly related to U.S. needs. est in providing an advanced sounder with these improved characteristics.

'°See NOM Satellite Programs Briefing, U 5 Department of Com "A device for measuring atmospheric parameters at different merce, August 1983 altitudes

266 Ch. 7Remote Sensing From Space 259

267 260 International Cooperation and Competition in Civilian Space Activities

A second area for development involves in- change system involved in the absorption andre- creased use of the Visible Atmospheric Sounder radiation of solar influx by Earth's surface isa ma- (VAS) on geostationary satellites. Tests with the jor component of weather analysis. A Solar experimental system aboard the GOES satellites Backscatter Ultraviolet Radiometer (SBUR) will suggests the possibility of generating an index for provide global sensings of the vertical distribu- severe weather. tion of ozone to assist determination of the ef- An advanced Ocean Color Imager (OCI), simi- fect of human activities on this essentialprotec- lar to the Coastal Zone Color Scanner (CZCS) in- tive shield and to further understanding of the strument flown on the NASA satellite, Nimbus- relationship of ozone to weather changes. 7, if placed on the polar-orbiters, would provide Internationally, the principal technological multispec;ral scanning of the ocean in the visi- thrust is toward devisingmore sensitive and stable ble, and near-infrared spectral regions, for detec- sensors for polar-orbiting spacecraft, increasing tion of such ocean phenomena as pigmentation the operational use of the microwavespectrum chlorophyll content, and turbidity. for atmospheric temperature and humiditymeas- Instruments on the TIROS-N satellites collect urements, and increasing the use of the Data Col- global data on the radiation processes of the lection System for the international hydrological Earth's surface and atmosphere for the Earth community. Radiation Budget Experiment (ERBE).12 Theex- ',The ERBE experiment will consist of measurements of the total radiation received by Earth and radiation reemitted by Earth Meas- Foreign Systems urements are being made by a dedicated satellite, the Efirth Radia- tion Budget Satellite (ERBS) which was launched Oct 5, 1984, and Other nations maintain operational satellitesys- by an instrument on the NOAA-N series of satellites. tems for both national purposes and as part of

2 68 Ch. 7Remote Sensing From Space 261

service (WEFAX). An improved Meteosat is planned for launch in 1985. IndiaInsat-1. This geostationary satellite provides both telecommunications and limited meteorological data. Visible and infrared images are available every 30 minutes from Insat l's Very High Resolution Radiometer (VHRR). The spacecraft also has a data collection system. The satellite 1B, which replaced Insat-1A, was launched successfully by space shuttle Mission 8 in August 1983. The complete operational system will consist of two spacecraft, one at 74°E longitude and a second at 94°E longitude. JapanGeostationary Meteorological Sat- ellite, GMS-3 (Himawari or Sunflower 3). This was launched by Japan on a Japanese NI1 launcher in August 1984, and is the third in a series of geostationary meteorological satellites. Located at 140°E longitude, the satellite carries a visible and infrared radiometer, a space environment monitor, DCS, and WEFAX. The Japanese geostationary satellite is a crucial element in forecasting and warning of typhoon development and subsequent flooding. Peoples Republic of China. The Chinese are working on a polar-orbiting and a geostationary meteorological satellite; thir launch dates are uncertain. The U.S.S.R. polar-orbiting meteorological program consists of two or three METEOR- 2 series spacecraft that fly a near-polar orbit at a 900 km height with an orbital inclination of 81°. The METEOR-2 carries five sensors: a scanning telephotometer that acquires imagery at visible wavelengths with a 2.0 km resolution; television-type scanner at the same wavelengths but with 1.0 km res- the international environmental data gathering olution; an infrared scanning radiometer; an community: 8-channel infrared scanning radiometer that European Space Agency (ESA)Meteosat- senses the vertical temperature distribution 2. The geostatior ary satellite, located at 0° in the atmosphere; and a radiometer that longitude, provides raw imagery of European monitors high energy radiation influx from weather conditions to Europe as well as re- space. laying processed imagery from U.S. geosta- Data available from these instruments pro- tionary weather satellites. It carries a visible vide analysis of the global distribution of and infrared scanning radiometer, a Data clouds and snow and ice cover, global radi- Collection System, and a w Itather facsimile ation temperature of the surface, cloud-top

269 262 International Cooperation and Competition in Civilian Space Activities

Figure 7.5. Advanced TIROSN AVHRR

IMU THERMAL CONTROL PINWHEEL LOUVERS(16) SAR SOLAR ANTENNAS IMP ARRAY SOA BATTERY MODULESI6) SAD

HINS

SSU ESA

MSU

UDA

SBA(3)

ERSE BOA (SCANNER) SOA seuv

ERBE VR A (NON SCANNER) REA(4) SOURCE National Oceanic and Atmospheric Administration

MISSION Collect global data on cloud cover surface conditions such as ice and snow (2) Stratospheric Sounding Unit (I- 31.1) 147 3-km ntscrution surface and atmoS0henc temperatures and atmospheric humidity measure solar particle flux collect and relay information from fixed and moving ChannelsWavelengths (um) Primary Use. data platforms provide continuous data broadcast* 1-3 15 Temperature profiles ORBIT 833- and 870-km circular 913 89- inclination 14-1 4 revsday (3) Microwave Sounding Unit (ISSU 105-km resolution Channels Frequencies Printery Wee 1 50 31 (1Hz SENSOF',S ANO FUNCTIONS 2 53 73 GHz Temperature soundings avough clouds Advanced Very Nigh Resolution Radiometer (AVHRIIIr2) 3 54 98 GPM 1 1-km resObaion 2600-km swath width 4 57 95 GHz Channels Wavelengths (um) Primary Uses Space Environment Monitor (SEM) Measures soiar particle flux at space- 1 058 068 Daytime ckmasurface mapping craft 2 0 7251 10 Surface water delineationice and now melt (1) Total Energy Detector ITEM. Sotsr particle intensity from° 3- to 20-koV 3 3 553 93 Sea surface temperature nighttime cloud (2) Medium Energy Proton and Electron Detector (MIPED) Protons. mapping eloctrOna and tons in 30- to 60-keV range 10 3011 30 Sea surface lemprzrature day and night cloud mapping ARC,OS Deb Collection System (OCS) (French) Collection end Misr Of data 5 11 50 - 12 50 Sea surface temperature day and night from hxecl or moving aulOmabc 941111E( plitfOrrn5 dlINNMOINI 10060C of moving cloud mapping platforms DIRECT SROSOCAST. Continuous data broadcasts atonable to any ramming stater TIROS Operational Vertical Saundra (TONS)' vithin range A 3-sensor atmospheric sounding system AutOrnatic Picture Transmission (AFT). visibte and infrared imagery at 4-km (1) H1gh Resolution Infrared Radiation &aureate (HIRS/2) 17 4-km resolution resolution VHF brOadCalItS at 137 50 or 137 62 MHZ Basic grCund Wantiment Channe% Wawriengths (01) Printery Uses costs about S25 000 (U S) m 1901 1-5 14 95.13 97 Temperature profiles Muds 6-7 13 6413 35 Carbon dioxide Li *Mar vapor bands High Resolution Player Transmission (HRPT) Visible and infrared data at 8 11 11 Surface temperature. clouds km rasolution S-band broadcasts at 1696 0 and 1707 0 MHz Basle 9 971 Tc MI 0, concentration ground equipment costs about 6250 000 (U S1 in int 10.12 6 16b 72 Humidity profilesdeleCtion of thin cm* CIOcf Sounder SromIcast (DSO)* TOVS da ta transmitted for um, in quanti- clouds tative programs Broadcast at 136 77 or 137 77 MHZ (Beacon Fro/Quincy) 13 17 4 574 24 Temperature prON4SS and in the HART data stream Conventional ground receiving station re- 18.20 400 0 69 Clouds surface temperatures under partly puffed but specialized data processing is necessary to produce environ- cloudy skies monist information

2 io Ch. 7Remote Sensing From Space 263

Figure 74.GOES Satellite

SOURCE National Oceanic and Atmospheric Administration

MISSION Repentive observations of the earth disk and overlaying atmosphere in the Protons 0 6 to 500 MeV 7 log range' Irak, of view measurements of War x-rays and the proximate sewe Alphas 3 2 to 400 MeV 6 log ranges environment collection and relay of data from platforms at Of near the Electronsr2 MeV, 1 range earths surface broadcast of data and environmental information (3) HI, Efefly Balton Ind aural Deteiciof tHEPADI Pinions in the 379-keV ORBIT 35 800-km geosynchronous GOES East over equator at 75' W GOES range alpha pinch's in the 650keV range West at 1357W (4) Magnetometer Monitors magnitude and direction of ambient magnetic held parallel held (120071 and transverse lied in 4 selectable ranges SENSORS AND FUNCTIONS t 50,r 100v. 200-y or 4007)

Visible and infrared Spin Scan Radiometer (VISSR) Atmospheric Sounder Data Collection System (DCS). Relays UHF interrogations to, and data from, (VAS) The VAS is a visible and infrared radiometer capable of providing both sensor platforms reporting environmental data multi-aPactral imaging and dwell sounding data It possesses eight visible and six infrared detectors Positioning a filter wheel allows selections from among 12 DIRECT BROADCAST Broadcasts available to any ground station within range spectral bands with central wavelengths between 3 9 and 15 urn VAS scans west to east in coniunction with spacecraft rotation at 100 rpm a stepping moor WEFAX. Retransmission of processed data at 1691 0 MHz Along with me- provides pnle to pole scanning Resolutions are 1-km n the visible and 7- or teorological charts GOES imagery at 8-km fesolubon and KM imagery at I- I4-km in the infrared depending upon the selection of IR detectors Visible to I2-km reSOlutiOn are transmitted A daily operational message is transmitted imaging data are provided routinely every 30 minutes by each spacecraft during that provides schedules and corgents A baste ground capability coats about daylight and infrared (7-km) imaging data, on the same schedule are provided stow (US )rn i981 day and night Stretched Sensor Beta A retransmission at a reduced rate of the data burst Space Environment Monitor (SEM). Composed of 4 subsystems that occurs during the 20° angular sweep of VAS detectors across the earth ( I ) X-Ray Sensor Provides data on solar x-ray activity in two wavelength The transmission is on S-band at 1887 1 MHz A basic ground eaten that bands 05.3 0A and 1-5A includes a limited product capability was about 5150 000 (U S i in 1981 121 Energy Particle Sensor Determines ,niansity of charged particle flux in the following ranges

271 264 International Cooperation and Competition in Civilian Space Activities

Figure 7-7. GOES Geographic Coverage

One satellite Two satellites

140E 180 20W 20E

/ I

Useful camera coverage Useful camera coverage

i) Communication range Communication range . . . . .

SOURCE National Oceanic and Atmospheric Administration

heights; and vertical distribution of temper- International Cooperation in ature. Only the United States ind the Soviet Meteorological Satellite Systems Union operate polar-orbiting meteorological spacecraft. The United States has encouraged directrecep- The Soviet Union plans to launch a Geo- tion of data (at no cost) from its civilian meteor- stationary Operational Meteorological Sat- ological satellites on an international basis for ellite (GOMS) this year, which will carry vis- over 20 years. There are about 1,000 direct read- ible and infrared sensors. It will be stationed out stations in over 125 countries (table 7-1). In at 70°E longitude and will have a scanning addition, NOAA sells metsat data products world- radiometer operating at visible and infrared wide. Foreign sales of U.S. meteorological value- wavelengths, DCS, and WEFAX. Soviet de- added data products were about 13 percent of signers are investigating the feasibility of product sales (provided at cost of reproduction) operating a geosynchronous satellite inclined in fiscal year 1984.14 by 65° to the Equator.13 The ground track of such a satellite would describe a figure- The United States cooperates with otherna- eight pattern (fig. 7-8) and have the dual ad- tions through the World Meteorological Organi- vantage of spending some time over the So- zation (WMO), a specializedagency of the viet Union, the northern reaches of which United Nations whose purpose is to coordinate, standardize, and improve meteorological services are inaccessible to a satellite positioned over the Equator, and also over the Indian Ocean throughout the world (see box, p. 268). where observations critical to certain Soviet The United States has also reached bilateral and military operations would be possible. multilateral agreements in the form of Memoran- da of Understanding with foreign governments

',Nicholas L Johnson, "The Soviet Year in Spac,? 1983," Tele- "Figure provided by National Environmental Satellite, Data, and dyne Brown Engineering, 1984, p 24 Information Service of NOM

2794.0 Ch. 7--Remote Sensing From Space 265

Figure 7-8. Path of Geosynchronous Satellite in Inclined Orbit

120 150 180 210 240 270 300 330 360

NOTE A geosynchronodr satellite in an orbit inclined 65' to the Equator would trace out a daily figure eight pattern like the oneIllustrated above A geosynchronous satellite in an orbit inclined 65° to the Equator would trace out a daily figure-eight pattern like the one hiustrated above. SOURCE N Johnson, The Soviet Year in Space, 1983," Teledyne Brown Engineering, January 1964, p 24 concerning use of the U.S. Data Communications and rescue of downed aircraft in remote areas System. In order to be included in the system, (COSPAS/SARSATsee app. A). foreign projects must be of inter 'st to a U.S. Gov- ernment agency and must meet certain techni- Data Products and Service cal criteria for system use. In some cases, data included in this system may be treated co-.iden- This section summarizes the data products and tially by the United States. However, all data in services derived from meteorological satellite data the system are available to NOAA. that are routinely available through NOAA. All of these data products are available to users As mentioned earlier, the United Kingdom has arm" the world either for free (through radio, provided the Stratospheric Sounding Unit for the TV, or telephone) or for purchase on a nondis- U.S. TIROS-N polar orbiter. The French provide criminatory, cost-reimbursable basis from NOM. and operate the ARGOS data collection system Table 7-2 lists the categories of U.S. domestic for the NOAA polar orbiter. These arrangements users of such data. The categories of international make the polar - orbiting satellites much more ca- users are similar. pable than they would be otherwise. Weather Finally, under an agreement among the United States, Canada, France, and the Soviet Union, the Table 7-3 summarizes the major weather-re- polar orbiting satellites are being used for search lated products provided by NOAA. In addition,

273 266 International Cooperation and Competition in Civilian Space Activities

Photo credit: European Space Agency Visible wavelength image of weather patterns on Earth, as taRen by Meteosat, the Europeangeostationary meteorological satellite. Meteosat was developed and built b! the European Space Agency.

2 7 4 Ch 7Remote Sensing From Space 267

Tai:e 7.1. Co. tries WM; APTIHRFT Reception Capabilities

Countries with APT facilities: Ivory Coast Turkey Afghanistan Japan Union of Soviet Socialist Republics Algeria Jordan United Arab Emirates Angola (status unknown) Kenya Uniter! Kingdom Antarctica (USN res ) Korea (South) United States Argentina V,:walt Upper Volta Australia Madagascar Uruguay Austria Malaysia Venezuela Azores Mali Viet-Nam, Republic of (status unknown) Bahamas Malta Yugoslavia Petrain Martinique Zaire Bangladesh Mauritania Zambia Barbados Ma oitius Zimbabwe Belgium Mexico Gountrins with HRPT facilities: Bermuda Mongolia Bangladesh Bolivia Morocco Belgium Brazil Mozambique Brazil Bulgaria Nepal Canada Burma Netherlands Czechoslovakia Cambodia (status unknown) Netherlands Antilles Denmark Gammon New Guinea France Canada New Zealand Germany, Federal Republic of C;anary Islands Nicaragua Greenland chile Nigeria India Colombia Norway Indonesia Costa Rica Oman Iran Curacao Pakistan Italy Czechoslovakia Papua New C 'Jinea Japan Denmark ParE,uay Korea (South) Dominican Republic People's Republic of China Malaysia Ecuaoor Peru Mongolia Egyp: Phinppines Netherlands El Salvador P,:land New Zea.and Ethiopia 001 ugal Norway Fiji F mania People's Republi.- - ' China Finland Si u,4i Arabia Saud' Arabia France Scotland Singapore French Guiana Senegal South Africa 3ambia Seychelles Sweden German Democratic Republic Sierra Leone Switerland Germany, Federal Republic of Singapore Taiwan Ghana Somalia Thailand Greece South Africa Tunisia Greenland South Yemen Union of So% at Socialist Republics Guadeloupe Spain United Kingdom Guatemala Sri Lanka United States Guyana Sudan Yemen (South) Honduras Surinam Hong Kong Sweden Hungary Switzerland celand Syria ndia Tahiti ndonesia Taiwan ran Tanzania raq Thailand srael Trinidad and Tobago taly Tunisia

SOURCE National Oceanic and Atmospheric Administration

275 268 International Cooperation and Competition in Civilian Space Activities

Meteosat (ESA) .ongitude

O Meteor (USSR)

Insat (India) 74* E Landsat 5 GOES-E 75' AI'

NOAA 7 1430 L

NOAA 9 0730 L

GOESWs 135 W GMS (Japan) 140' E

276 Ch. 7Remote Sensing From Space 269

the National Weather Service (NWS) (table 7-4) Table 7.3. Derived fieleorological combines satellite data with other weather data Satellite ProdLcts to develop weather forecasts designed to be use- JundingsTemperature profiles om the surface ful to a variety of commercial interests, including through the stratosphere aviators, farmers, fishermen, fruit growers, and Sea Surface TemperatureGlobal anregional sea surface temperature and water mass analyses IceIce analyses of the polar regions ELTI Great Lakes Table 7.2.Domestic Users of Meteorological Vegetation IndexMeasure of how "green" a target Satellite Data area appears. Rainfall Estimates NOA" Hurricane Classification National Weather Service Centers and Forecast Cud Motion Winds Offices Satellite Interpretation Messages ational Ocean Service Tropical Storm Bulletins Office of Research Cloud Top Height Data Devilment of the interior 'These products are mailable in a variety of forms e p , charts, broadcast mes- Bureau of Land Management and Reclamation sages, and imagery Water Resources Division SOURCE National Oceanic and Atmospherir Administration Department of Agriculture Soil Conservation Service Forestry Service Foreign Agriculture Service NASA Department of Defense Agency for International Development Table 74.National Weather Service Hurricane, Department of Transportation International Aviation, and Marine Forecast Programs National Science Foundation, National Academy of Science 3Hurricane forecasts and warnings News media International aviation weather services Commercial users Area forecasts Offshore drilling operations Inf light advisories (hazardous weather) Ship routing Computer flight planning forecasts Auricultural producers High seas weather services L;ommercial and general aviation Weather, waves, currents, and sea Ice forecasts Vessels at sea Navigation and operations support --Fishing industry Forecasts and warnings for U.S. coastal and offshore Universities waters Private individuals Tsunami warnings and advisories Source National Oceanic and Atmospheric Administration SOURCE National Oceanic and Atmospheric Adminlatrallon 277 270 International Cooperation and Competition it Civilian Space Activities

commercial shippers. The broadest category of Accuracies of ± 1.5 ° C are achieved over 70 per- weather data users are the millicits of ordinary cent of the oceans. Regional SST charts, distrib- citizens who tune in to or -ead the daily forecast uted through NOAA Satellite Field Service Sta- for guidance in preparing for work and recrea- tions in Miami, Washington, DC, San Francisco, tion. NOAA and NWS also provide special warn- and Anchorage, are particularly useful to coming of hurricane, tprnado, and other ses.'Pre mercial fish rmen for locating certain species of weather conditions. fish. Ocean current analyses include thermal front analysis of the waters off the west coast of the Land and Ocean United States, which also benefits fishermen by Meteorological remote sensing is not limited ide.nifying nutrient-rich ocean upwellings attrac- solely to weather application, as the sensors can tive to fish. Observations in the infrared using also measure important land and ocean phenom- AVHRR can give an accuracy of ±5 km for lo- ena throughout the world. Using data derived cating frontal zones. Ocean current navigation from channels 1 and 2 of the polar-orbiters' is assisted by analyses of polar-orbiter AVHRR AVHRR to sense visible and near-infrared radia- infrared and GOES-VISSR imagery of the Gulf tions, the U.S. Department of Agriculture, as well stream and "loop currents" in the Gulf of Mex- as the United Nations' Food and Agriculture Or- ico. The thermal boundaries of these currents and ganization and private value-added zorporations, their eddies can be determined with an accuracy are able to monitor and analyze global crop con- of ±5 km, which allows fuel savings and reduces ditions ;see later section on market for land re- hazards for fishing and shipping interests. All of mote sensing data). Identification of urban "heat these data products are available for purchase or. islands"-3nsed by the High Resolution Infrared a nondiscrimilatory cost-reimbursable basis from Sounucr assists planners in rr--initoring metropoli- NOAA to users around the world. tan industrial and population growth. NOAA provides analyses of meteorological satellite obser- Market for Metsat Equipment vations of snow and ice as both hydrological and and Services oceanographic products. The market for civilian metsat equipment and Hydrological products using the AVHRR and services can be divided into three categories: the GOES-VISSR instruments include the following space component, ground station equipment, at 1 km resolution: snow coverage observations and various services related to reception a.1c1 data of selected river basins; regional snow coverage distribution. analysis for selected regions of the world; and a northern hemisphere snow and ice chart. These Satellite Manufacturers products are valuable for assessing water runoff potential. The primary U.S. manufacturers are Hughes Aircraft Corp., which has built the U.S. (GOES) Products for oceanographic use irclude l:e and most of the Japanese (CMS) geostationary sat- charts produced from AVHRR, readings for the ellites," and RCA Astro-Electronics, which has polar regions and a combination of AVHRR and built the NOAA-N series of polar orbiters.16 The geostationary VISSR imagery for the Great Lakes General Electric Corp. built the Nimbus series of region, both to acc,racies of ±5 km. These aral- research satellites for NASA. yses are particularly useful in forecasting the limits of the shipping season in particular regions and The GOES satellites (4-6) cost approximately commercial ship routing, as well as for U.S. Navy $15 million apiece and are designed to last about and U.S Coast Guard missions. 5 years." Replacement satellites (GOES-G and

Global sea surface temperature (SST) observa- The GMS-2 and GMS-3 sateilites were built by Hughes and Nip- tions are received daily from AVHRR infrared data pc., Electric Corp and the High-ResolutionInfraredRadiation ' "RCA also builds the DMSP satellites for DOD "However, GOES-5 lasted only 3 years. GOES-4 failed even Sounder (H IRS-2) data aboard the polar orbiters. sooner.

27d Ch 7Remote Sensing From Space 271

we.

Photo crald WWI& Oceanic and Atmoapnanc Administration Six-day normalized vegetative index composite made with data from instruments aboard the NOAA-N series polar orbiter.

279 272 International Cooperation and Competition in Civilian Space Activities

GOES-H), built by Hughes, are expected to cost Japan. It plans to launch three additional GMS about $50 million and will be designed for a simi- satellites before the end of the century." As lar lifetime. Future satellites in the series, which noted, it purchased major portions of its pre- will be much more capable, will likely cost about vious geostationary satellites from Hughes Air- $100 million apiece. Two GOES satellites are nec- craft Corp. In the future it may attempt to build essary for complete coverage of the United States. its own. or consider purchasing its next satel- The NOAA-N polar orbiters (H, I, J) cost approx- lite from Europe.2° imately $45 million but future models will cost Europe. The third Meteosat satellite is sched- about $100 million. Each polar orbiter is designed uled for launch in an Ariane 4 test flight in July to last 3 years and two are normally orbiting at any one time. 1986. Three more satellites and parts for building a backup satellite are now on order, and The European (Meteosat) geostationary satel- are scheduled for launch in August/September lites, which constitute the satellite portion of 1987, August 1988, and 1990. The market for Eumetsat, were built by a consortium headed by Meteosat satellites, which are comparable to the French firm Aerospatiale.' 8 Two Meteosat sat- the GOES series, is essentially closed to U.S. ellites have been launched since 1977. Although suppliers. Europe has no polar-orbiting system, the United Kingdom and trance contribute sensors to the International systems. The Europeans and the U.S. polar orblte'3. Japanese may contribute to an international polar-orbiting system, in which case, individ- Satellites ual countries will contribute instruments or other subsystems to the system (see section For several reasons, the overall market for below on iisues). meteorological satellites or for individual sensors is likely to remain small and competition highly Ground Stations limited. First, because the complete international The primary characteristic o the metsat ground geostationary system gives rather good coverage equipment market is its relatively small size. Year- of the world as it is, no sales to countries that do not presently own a system are likely.* Second, ly international sales are extremely difficult to quantify, but representatives of several U.S. firms because satellites are owned by national governments, countries will tend to purchase satellites interviewed by OTA agreed that total yearly sales from their own vendors. amount to less than $20 million, more than half from U.S. firms. Total worldwide investment in The United States. GOES G and H are planned metsat ground receiving stations now equals at for delivery in late 1985 and mid-1986 respec- least $200 million. tively. The GOES-Next series of advanced geo- Ground stations consist of the relatively inex- stationary satellites (five are planned) will be pensive APT station (approximately '040,000 to needed in 1989 and beyond, but have not yet $55,000), the more expensive HRPT station (ap- beerdered. NOAA-G is planned for launch proximately $0.5 million to $1 million) and any in 1985. The Advanced NOAA series of polar- auxiliary data processing equipment. U.S. ground orbiting satellites are also planned but have not yet been ordered. '9According to current Space Council and NASDA plans, Japan will launch GMS-4 m fiscal year 1989, GMS-5 in fiscal year 1994, and GMS-6 in fiscal year 1999. However, production of none of these has been funded. See "Earth Sensors Further Japan's Efforts," lThe other members of the consortium are Matra (Frari,, IGG Aviation Week and Space Technolou June 25, 1984, pp. 151-57. (United Kingdom), Marconi Space and Defeme Systems (United "Last year European corporations offered to build a replacement Kingdom), Messerschmitt-Boelkow-Blohm (Fed iral Republic of Ger- satellite for the Japanese patterned after their own meteosat series. many), ANT (Federal Republic of 3ermany), FICA (Belgium), and The pri,e for the satellite, not including possible modifications to Selenia (Italy) suit it for operation over Japan, is about $30 million. The offer in- if China proceeds with its present plans to launch a geostationary cluded an additional $30 million to $32 mi!lior to laurch it on an and a polar-orbiting satellite, it will him ly provide its own satellites Anane laut,cher. See "Europe Offers Weather Satellite to Japan," is part o; its effort to develop a capacity in space techno'lgy. Aviation Week and Space Technology, July 2, 1984, pp. 21-22.

260 Ch. 7Remote Sensing From Space 273 equipment manufacturers also supply receivers U.S. firms that are successful bidders on another for a variety of applications, including civilian and part of the project (e.g., the satellite builder). military communications, military meteorological applications, intelligence, and command and Meteorological Satellite Issues control; supplying metsat stat:,..-ms and associated data processing equipment is a small part of their What Role Might the Private Sector total business. Play in Enhancing the Utility of U.S. Meteorological Satellite Systems? Foreign suppliers of ground station equipment include MacDonald Dettwiler Association, Inc., Suggestions a few years ago that the U.S. me- of Canada, SEP of France, MBB of West Germany, teorological satellites might be transferred to pri- and NEC of Japan. They compete directly with vate ownership raised a number of concerns U.S. firms abroad. U.S. firms compete well in the about the domestic and inter national effects of international market because of superior technol- such a policy. In March 1983, the Reagan Admin- ogy. In the ;t they have been supported in sell- istration announced that it would seek to trans- ing to th .,'eloping countries by the involve- fer both the meteorological and land remote sens- ment c' ..4ASA, NOAA, and the U.S. Agency for ing satellite systems to the private sector. This International Development (AID) in extending the proposal was the result of an offer from COMSAT use of metsat technology. Corp. to purchase the Landsat system from the Government if the meteorological system was There is little market in the United States for also included.21 Although most aspects of this additional ground receivers because of easy ac- issue have been resolved in favor of continued cess to processed data from the National Weather Government operation of the metsat systems, the Service. Except for replacement items, most fu- related principle of encouraging private sector in- ture market expansion will be in the developing volvement in space makes continued discussion world. However, developing countries already of the issue appropriate. The following key con- ov'n a large number of installations and their cerns relate directly to the transfer proposal: ft.,_;re purchasing power is highly dependent on foreign aid programs, especially for the more ex- 0 Data distribution policy. In order to prepare pensive HRPTs. Technology transfer restrictions for the eventuality that metsat data would are not a problem, even for the high resolution be sold through a private corporation, the equipment, because these receivers are not ca- Administration began to explore the feasibil- pable of conversion for use with military systems. ity of charging for metsat data. Tentative and unofficial suggestions by U.S. officials in the The foreign commercial market is dominated spring and summer of 1983 that the United by foreign suppliers. Many of the purchases by States might begin to charge other nations Third World countries are sponsored by WMO for these data were met with warnings from through the World Weather Watch. In these in- those countries22 that the United 5* tes was stances, supplier selection is based on the usual tampering with well - established, long-term purchase considerations, including lowest cost, practice , and that other countries might re- best technology, and local and international pol- ciprocate in kind. These nations felt that such itics. Where foreign aid is used, supplier selec- a change of policy would introduce an un- tion will be heavily influenced by the donor country. The donor's influence can be felt either "See stateent of Joseph V. Charyk, of COMSAT before the Sub- informally, through recommendations, or more commee on Space Science and Applic..zions of the House Com- formally, through spe fications set to favor the ittee on Science and Technology and the Subcommittee on Science Technology, and Space of the Senate Committee on Com- donor country's technology. Selling to some for merce, Science, and Transportation July 23, 1985. COMSAT argued eign govermen:s can be difficult hecaus hey that if both systems were operated by a single entity, certain econ- often do not r.,:ease enough informatin to allow omies inherent in system operation, and sales of metsat data, would allow it to build the market for Landsat data while charging roughly a U.S. company to bid responsily. Sometimes what the Government was charging for Landsat data. it is possible to obtain information through other " "satellite Storm Ahead," Nature, vol. 304, p. 202, 1983.

281 274 International Cooperation and Competition in Civilian Space Activities

necessary and potentially destructive com- systems' components. In the future, NOM petitive element into a smooth functioning might be encouraged to make space availa- cooperative arrangement. Because the United ble on its satellites on a fee basis) for instru- States receives more data through member- ments that serve particular needs of the pri- ship in WMO than it supplies to the rest of vate sector and that would be provided by the world, charging for metsat data would private firms for profit-making data services. also result in a net cost to the United States. In addition to serving domestic needs, such In part because of the outcry from U.S. users instruments would also be of it terest to for- of foreign data (especially the Department eign customers. of Defense (DOD)) as well as from Con- Development of market for metsat data gress/23 the Administration drew back and products. In addition to their use in daily subsequently reaffirmed earlier commit- weather forecasts from the National Weather ments to supply meteorological data freely Service, data from meteorological satellites and free of charge to users throughout the support a small, but growing industry de- world (except for certain special products voted to converting data supplied by NOAA that are priced at cost). to information for a wide variety of public Contributions to and from the globalsys- and private interests. These specialized val- tem. As noted earlier, the United States has ue-added firms provide services as variedas been a member and strong supporter of the predicting severe impending weather for the World Meteorological Organization since it benefit of specialized groups, or predicting was founded in 1947. Transfer of metsats to the best wean routes for international ship- private ownership would have complicated ping. Value-added firms have learned how U.S. arangements with WMO and, in the to process metsat data conjointly with land absence of a formal organization suchas remote sewing data to predict crop yields, INTELSAT or INMARSAT for managinga glo- both domestically and abroad." Such infor- bal meteorological satellite system,a U.S. mation products are expected to be used by private firm might have found it extremely the value-added industry to expand themar- difficult to work with the meteorological ket for data sales from land remote sensing agencies from other governments. satellites. As the value of these services for Reduction of service. In testimony before metsat data becomes more widely known, the Senate Subcommittee on Science, Tech- this industry is likely to grow. nology, and Space in August 1983, representatives from several industries that de- As a result of these and other considerations, pend heavily on weather data, including Congress amended appropriations bill H.R. 3222, agriculture, aviation, forestry, and marine in- to prohibit the sale or transfer of the meteoro- dustries, expressed their reservations about logical satellite systems to the private sector. On November 28, 1983, President Reagan signed this the proposed transfer. They felt that the qual- bill into law (Public Law 98-166), thereby reaffirm- ity and quantity of service would suffer. Simi- lar concerns were expressed to members of ing that the U.S. meteorological satellite systems the House Subcommittee on Natural Re- would remain in the public sector.25 sources, Agriculture Research, and Envi- In order to provide appropriate service to data ronment. users, NOAA funds limited internal and univer- System hardware. Although the specifica- sity research to find new ways to utilize metsat tions of the meteorological satellite systems 24see, for example, Remote Sensing and the Private Sector,op. are set by NOM in response to Government cit., app. D. The results of much of this work were reported at a and private sector needs, private firms have NOM-sponored conference, "NOAA's Environmental Satellites Come of Age," Mar. 26-28, 1984, Washington, DC. a major role in designing and building the "In addition, the Landsat Commercialization Act of 1984 (Pub- lic Law 98-365) contains a provision that specifically prohibits sale "Both House Concurrent Resolution 168, Sept19, 1983, and of the meteorological systems. These acticis reflect the strength Senate Concurrent Resolution 67, Sept 19, 1983; 98th Con;,1st of congressional opposition to the sale of any part of the meteoro- sess , expressed Congrr,c' opposition to sale of metsat data. logical satellite system.

282 Ch. 7Remote Sensing From Space 275 data." In addition, NOAA provides some special- with failures aboard Landsat 4 and metsats has ized value-added services and products (e.g., fruit demonstrated that even relatively simple satel- frost warnings or ocean surface temperatures lite subsystems may fail in the harsh conditions charts) that might in time be provided profitably imposed by launch or the environment of outer by private firms, using the initial satellite weather space. If only one polar orbiter were in service, data as the input. As users gain more experience and it failed, there would be no service for a pe- with using metsat data and linking them to other riod from the civilian satellite." When NOAA's information sources, it will be important for the GOES-West failed in November 1982, well before Government to avoid competing with the private it was scheduled to be replaced, NOM was sector in providing value-added data products, unable to replace it until June 1983. Only one and to find ways to motivate the private sector GOES satellite is now in operation, the GOES- to provide such services. East satellite having failed in July 1984; its replacement cannot be launched before late 1985 or What Level of Service From the Polar- early 1986. Orbiting Satellites Is Appropriate? Operating only one polar orbiter would also In its effort to reduce the costs of operating the reduce the data available to the military. Though meteorological satellites, the Administration has it has its own system of meteorological satellites, attempted to move to what is essentially a single the military makes extensive use of the NOAA polar-orbiting system, thereby saving some of the system, both to provide data at different times cost of the second satellite, and a percentage of of the day, and to act as an emergency backup the operating costs of the entire system. Elimi- to the military system. In the past, the military nating one of the polar orbiters would reduce the has had to depend from time to time on the ci- coverage of the system from once every 6 hours vilian systems for critical weather information. to once every 12 hours for a particular spot on Although dropping one of the polar-orbiting the Earth. For most of the continental United satellites would not change the form of our co- States, a reduction in service would not cruse a operation with other nations, such a course of serious decline in the ability to predict future action would significantly reduce, the amount and severe weather. In those areas, conventional data quality of data the United States can supply to collection systems and the geostationary satellites other nations for predicting weather conditions. provide sufficient information. For the Pacific Other nations that depend on these data and coast, Hawaii, Alaska, and the Pacific Trust Ter- have purchased receiving stations have expressed ir repeat coverage that two po- ritories, the 6-hs dismay that the United States might operate only lar-orbiting metsats supply is extremely important a single polar orbiter. Furthermore, the United for timely warning of rapidly changing weather States would not save much money because the conditions (fig. 7-10). None of these areas has ac- cost of operating two polar satellites is very little cess to surface dasa for the predominately west- more than the cost of operating one. NOAA esti- to-east weather patterns.27 mates it would save between 10 and 20 percent As one observer noted,28 having a second sat- of its yearly satellite operational costs by drop- ellite for backup is also important. Experience ping one. In round numbers, each copy of the next series of NOAA polar-orbiting satellites, 26NOAA spends about $1 25 million, primarily internally, to de- which are designed to last 5 years, is expected velop new products that will use both Landsat and metsat data for to cost about $100 million." agricultural and other renewable resource applications In addition, it funds R&D (approximately $1 million) at about 6 universi- Presumably, some data could be provided by the DOD DMSP ties to find new applications for metsat data in a variety of disciplines Satellites until a new civilian satellite was iaunched However, the including severe storms, climate studies, and mesoscale data from the two systems are not quite compatible The quality meteorology. of results from NOAA's forecasting models are reduced accordingly. "Because the primary weather flow in the northern hemisphere Information from the GOES satellites cannot replace Information is ;mom west to east, information gathered to the west of a geographic from the polar orbiting satellites (see boxes A and 8). area is especially important for weather predictions. 36The precise unit cost will depend on the total number of satel- 26Richard I. Reed, statement before the Subcommittee on Science, lites purchased at one time, the delivery schedule, and their capa- Technology and Space of the Senate Committee on Commerce, bilityIf service is reduced to one satellite, each one will cost more Science, and Transportation, August 1983 than if two satellites were orbiting at all times

283 276 International Cooperation and Competition in Civilian Space Activities

Figure 7-10.One and TwoPolar Soundings TwoPolar Soundings Map for 0 Hour Greenwich Mean Time =1.11=4,

OnePolar Soundings Map for 0 Hour Greenwich Moen Time

The charts show satellite observational coverage for 36-hour period centered at the synoptic observation time of 0 hour Greenwich mean time. SOURCE National Oceanic and Atmospheric Administration 234 Ch 7Remote Sensing From Space 277

Reducing to one polar orbiter would also have has received favorable responses (see policy dis- had the effect of reducing our commitment to co- cussion below). In addition to meeting daily operation with Canada, France, and the Soviet needs for meteorological data and for sharing the Union in the COSPAS/SARSAT Search and Res- operating costs of the system among its major cue Program (see app. A). The SARSAT receivers, users, a formal arrangement that would guaran- built by France, are carried on the polar orbiters. tee an internationally based two polar-orbiter sys- The optimum system calls for a total of four in- tem would increase each country's long-term struments, one on each of two Soviet polar-or- ability to gather operational satellite data. It could biting metsats and one on each of two U.S. polar also go far toward assuring continuity in spatial orbiters. Until recently this important interna- and temporal coverage and stimulating techno- tional cooperative program was in jeopardy. In logical growth in member countries.33 In short, October 1984, after considerable debate over the the benefits of establishing a more formal coop- implications of the decision, the United States erative arrangement seem to be high. Such co- signed an agreement with the three other primary operation could be a major step in improving the partiLipants to enter into operational phase of the quantity and quality of weather-related informa- project, which would extend through 1990.31 The tion throughout the world. In addition, as the ap- Administration was at first reluctant to sign the pendix on remote sensing in developing countries agreement because it means maintaining a two suggests, the greater use a country makes of polar-orbiter system, or building another satel- meteorological satellite data, the more likely it lite to carry the emergency beacon. However, is to develop uses for land remote sensing data the system seems to have proved its worth, hav- as well. ing contributed to saving nearly 400 lives since Several drawbacks to a formal cooperative sys- it began experimental operation in September tem exist: 1982. Hence the Administration yielded to congressional and other pressure to maintain the The United States would lose its unilateral program. Although the decision improves the control (through NOAA) over the manage- chances for maintaining a two polar-orbiter sys- ment of the system. Thus, the U.S. military tem, it still does not mean its automatic continua- would lose its unilateral power to preempt tion, because it would be possible (for a cost) to civilian satellite operations in time of national build and operate a dedicated satellite for the sec- emergency. Further, NOM would also lose ond beacon. This issue will require continual at- the power it now has to alter routine opera- tention by Congress. tions to follow particularly severe or danger- ous weather developments in the United What Level of Cooperation With States. On the other hand, if the alternative Other Nations Is Desirable? is a single polar orbiter, U.S. access to crucial meteorological data (particularly for the mil- In part because of the decrease in the quality itary) would be lessened anyway. of weather monitoring that would result from a Some technology might be transferred from reduction from two to one polar orbiters, and in the Ur :ted States to industrialized countries part to share the costs of maintaining satellite which could then use it in economic com- weather service, the Administration is exploring petition with the United States. the feasibility of establishing a formal coopera- An international organization might inadver- tive arrangement with other nations. It has for- tently become somewhat more cumbersome mally raised the question at two meetings of the and require more personnel to operate the Econo;nic Summit of Industrialized Nations32 and system than the current arrangement through ''.." "OMB jeopardizes U 5 -Soviet Satellite Accord," Science, WMO now requires. Vol z.., pp 999-10OG, 1984 "Sarsat/Cospas to Operate Through 1990," Aviation Week and Space Technology, Nov 12, 1984, p. 25. "For a discussion of various cooperative mechanisms, see "In- ternational Meteorological Satellite System- Issues and Options," National Environmental Satellite, Data and Information Service, Na- "Department of Commerce sews release, NIC 84-132, Dec. 12, tional Oceanic and Atmospheric Administration, Nov. 18, 1983 1984

285 278 International Cooperation and Conipatition in Civilian Space Activities

The existence of INTELSAT and INMARSAT, countries. As these countries extend their capa- both truly international organizations (see chs. bilities, any technological gap is likely to shrink 3 and 6), and the existence of Eumetsat, the Euro- over time, making the problem moot. Neverthe- pean regional organization, suggest that the or- less, all of these concerns would have to be ganizational problems can be solved within rea- weighed in deciding whether formal cooperation sonable cost goals. Technology transfer also need is of overall benefit to the United States and, if not necessarily be a major threat. Most of the nec- so, which form of cooperation would be most essary technology is well understood and already appropriate (see policy section). well within the capacity of the industrialized

LAND REMOTE SENSING SYSTEMS

Land remote sensing in the form of aerial pho- area, data standardized from area to area tography is nearly as old as the photographic and from day to day; camera. Cameras have been flown on both bal- signals suitable for digital storage and subse- loons and aircraft. During World War II, aerial quent computer manipulation; and photography developed into a powerful and vital accessibility over remote and difficult terrain aid to tactical warfare. Well before the war, pho- and across political divisions. tographs taken from the special vantage point af- Although all of these characteristics contribute forded by aircraft and balloons found use among to the potential utility of remote sensing from such customers as agr'cultural and land-use planners, archaeologists, foresters, geologists, and space, the fact that data about Earth's surface arrive in digital form suitable for routine computer geographers. By the early 1960s the interpreta- manipulation is perhaps of greatest importance. tion of aerial photography had developed into Data from space can be routinely cornbined with a small, but highly useful, discipline. With the development of special-purpose photographic other data to generate information products of great utility. emulsions (e.g., infrared), advanced lenses, shut- ters, and other sensing devices (e.g., sidelooking radar) remote sensing analysts now provide a The U.S. Landsat System wider range of products for these customers. Land remote sensing from space for civilian Sensing from aircraft has limitations of cover- uses had its origins in a NASA program, begun age, high cost per unit area, as well as the diffi- in 1964.34 After considerable theoretical study, culty of controlling lighting conditions. It is not and research and testing of multispectral scan- suitable for developing a global data base. In con- ners and other instruments in aircraft, NASA trast, remote sensing from space possesses sev- launched the first of five Landsat satellites in eral properties that permit the development of 1972.35 These satellites follow a polar orbit that a unique global data base for resource inventory takes them over the same spot on Earth at the and monitoring over time: same time of day every 16 days. The latest in the seriesis Landsat 5, which was successfully perspective over a range of selected spatial launched on March 1, 1984, after Landsat 4 be- scales; gan to fail (fig. 7-11). In addition to other experi- selected combinations of spectral bands for categorizing and identifying surface features; 34For an early policy and institutional history of the Landsat sys- repetitive coverage over comparable view- tem, see Pamela E. Mack, "Space Science for Applications: the His- ing conditions; tory of Landsat," in Space Saence Comes of Age (Washington, DC.: Smithsonian Institution Press, 1981). direct measurement based on one set of so- "Landsat 1 was originally named Earth Resources Technology lar illumination conditions for a wide surface Satellite (ERTS-1).

2s6 Ch. 7Remote Sensing From Space 279

Figure 7-11.Landsat5 Spacecraft

SOURCE. National Oceanic and Atmospheric Administration

Thematic Mapper MB: The TM is a NASA nfienrnemal sensor It will come IIISSION: Collect remotely sensed inultispectral land data broadcast data for recta on-Itne operationally after It has boon proven by NASA and en aPProProllie at ground stations operating under formal agreements ground system has been constructed It a designed to provide 30-m resolution ORBIT. 705im sun synchronous is day repeat cycle except tor 120m resolution in the thermal infrared band Sensor mesons ANO FUNCTIONS Vilevelsnethi (um) Primary Uses Multi-spectral Scanner ;Map The MSS is the specified operational sensor Coastal water mapping earl vegetation afferenbation Swath width is 165km %swoon is 00m 045 - 052 deciduous conilerous differentiation Sensor 052060 Green reflectance by healthy vegetation Valve lengths 083.069 Chlorophyll absorption for plant species differentiation 10111 Primary Uses 0 78 - 090 Biomass surveys. water body delineation 0 5 - 0 6 Movement of sediment laden water 6:lineation of snaildw 155 175 Vegetanon moisture measurement water areas 10 40 1250 Plant heat snits mansgement other thermal mapping 0 8 - 0 7 Curturn features 2 08.235 Hydrothermal mapping 0 7 0 8 VegetaXon boundary between land and water lam:Forms 0 8i 1 Penetration of atmospheric haze vegetation boundary DIRECT BROADCAST: Bror icialts are provided for ground Nations which have between land and water 1.^'Irrn, entered into formal agreements covering If ann and ONntruaon of Rego data

2 6 7 BEST COPY AVAILABLE 38-797 0 - 85 - 10: QL 3 280 International Cooperation and Competition in Civilian Space Activities

mental instruments, each Landsat spacecraft has tuted a program in the mid-1970s toencourage carried a multispectral scanner (MSS), which has wider experimentation with the data, and issued a spatial resolution of 80 meters and senses in grants to a variety of State and local governments, four spectral bands (figs. 7-12 and 7-13). The to universities and private nonprofit institutions. Landsat 5 spacecraft carries an MSS and a the- As well as providing data free or at extremely low matic mapper (TM) sensor 'Jig. 7-13, which has cost to these users and to other Federal agencies, a spatial resolution of 30 meters36 and seven spec- the NASA program also developed computer soft- tral bands (fig. 7-14). ware for processing the data. The Landsat system is composed of the spacecraft and associated command and control telem- System Development etry, ground receiving stations, and processing, NASA has a small continuing program of sensor copying, storage, and distribution facilities. Land- development for both optical and microwave (ra- sat data are transmitted from the spacecraft in dar) sensors. Developmental models for these digital form to ground stations, collected on tape, sensors are to be flown on the Shuttle. There are corrected to remove radiometric and geometric no plans for the Government to develop free-fly- distortions, and sold through the EROS Data Cen- ing orbital systems in the near term. Both NASA ter (Department of the Interior) at Sioux Falls, SD. and NOM are exploring the possibility of a polar- Data products are available in either image (pho- orbiting platform as part of the U.S. effort in de- tographic) form or on computer compatible tapes veloping a permanently manned space station. (CCTs) suitable for additional processing by large Such a platform is a good candidate for interna- computers. Table 7-5 lists current and projected tional development.37 prices for Landsat data products. Table 7-6 lists the major sensors now under de- In addition to providing data from the Landsat velopment by NASA. Until August 1984, NASA system to users around the world, NASA insti- had a program to develop a multispectral linear m'Except for the It) 4 to 12 5 micron wavelength band which has array (MLA), similar to, but more capable than, a spatial resolution of 120 meters the French SPOT sensor. However, underpres- sure from the Office of Management and Budget (OMB) to reduce overall spending, NASA decided Figure 7.12. Cutaway View of the Multispectral Scanning System to cut this program, on grounds that it was leading to an operational sensor rather than a research PINOTOIMULTIPLIMI PNOTOPODI DITICTOINPREANS TUNS NM tool. Although NASA is attempting to reinstate CALINIATI part of this research, the United States now has WV OWEN \dr.. only 3 small near-term remotesensor develop- nOTAVNO StAirflUI ment program (see issues discussion below). NOM has no program to develop sensors for land remote sensing, though it hasa small effort in studying applications of metsat and Landsat data.

Foreign Landsat Receiving Stations

LAWS As NASA developed the Landsat system, it encouraged other countries to use the system. Ten countries now own operational receiving stations (fig. 7-15). In return for a fee, these foreign sta-

MOM "John H. McElroy and Stanley R Schneider, "Utilization of the SUN MASS Polar Platform of NASA's Space Station Program for Operational 11110111011 Earth Observations," NOAA Technical Report, NESDIS 12, Sep- SOUKS National Aeronautics and Space Administration. tember 1984.

288 Ch. 7Remote Sensing From Space 281

Figure 7 13.Landsat Bands and Electromagnetic Spectrum Comparison

Thematic mapper SOURCE U S Geological Survey

Figure 7-14.Thematic Mapper Sensor SLAN MIRROR SECONDARY MIRROR ASSEMbLY ASSEMBLY ELECTRONICS BOARDS

SCAN MIRROR MULTIPLEXER AND POWER SUPPLIES ....0°-

FOCAL PLANE ARRAY

RADIATIVE COOLER SECONDARY' MIRROR

PRIMARY MIRROR 7

ALIGNMENT AND FOCUS ASSEMBLY 282 International Cooperation and Competition in Civilian Space Activities

Table 7E,.Costs for Some Landsat Data Products

Cost Until October 1981 October 1983 February 1985 Product October 1981 October 1983 February 1985 ??? Multispectral scanner (MSS) computer- compatible tape (CCT) $200 $ 650 $ 650 $ 730 Thematic mapper (TM) CTT. Not available $2,800 $3,400 $4,400 TM CCT (quarterly)...... Not available $ 750 $ 925 $1,350 Color composite image (1:250,000 scale) $ 50 $ 175 $ 175 $ 195 TM Not available $ 235 $ 275 $ 290 SOURCE National Oceanic and Atmospheric Administration

Table 7.6. Major Imaging Sensors Under Development by NASA

Sen 30r Sensor type Status Notes Large Format Camera 30 5 cm focal length Flown on Shuttle flight 41-G, Used for high-reolution mapping camera; stereo capability October 1984 Shuttle Imaging RadarSynthetic Aperture Radar (SIR) SIR-A Flown on Shuttle, November L-Band microwave 1981 SIR-B Flown on Shuttle flight 41-G, L-Band microwave October 1984 SIR-C Under development LBind and C-Band microwave; NASA is negotiating with Germany to provide X-Band capability in a cooperative venture Multispectral Linear Pointing six-band focal Under development Program terminated in August Array Experiment plane sensor 1984; portions now reinstated Shuttle Imaging High spectral and spatial Under development for Planned eventually for Spectrometer resolution spectrometer Shuttle flight in 1989/90 incorporation into space station polar-orbiting platform tions receive Landsat data sensed over their re- Satellite System (TDRSS) is in place and working," gion and sell or distribute them to local and for- foreign ground stations will be the predominant eign customers. Until fiscal year 1983, the yearly source of Landsat data for regions beyond the ground-station fee to NOAA was $200,000, but U.S. receivers. bes-rning On October 1, 1982, NOAA began to assess a $600,000 fee. In addition to the fee, each Foreign Systems station pays a small distribution fee to NOAA for the data it sells or otherwise distributes. By sign- As noted earlier, except for limited distribution ing the Memorandum of Understanding with of remotely sensed land data by the Soviet Union, NOAA, each station owner agrees to abide by the United States has been the sole supplier to the same nondiscriminatory data policy that the rest of the world. Other countries are now NASA and NOAA have always followed and that developing lend remote sensing systems. These is now mandated by the Landsat Commercializa- "Unlike Landsats 2 and 3, Landsats 4 and 5 carry no tape tion Act of 1984. recorders They therefore depend on transmissions to ground stations as the satellites pass over, or to transmissions through the All Landsat receiving stations are capable of re- TDR55 satellites Only one TDR55 satellite is currently in place and ceiving MSS data. Some are also able to receive the demands on its time for other uses are great The second TDR55 the more sophisticated TM data as well (table 7- satellite is scheduled for launch on the Shuttle in late 1985 or early 1986 and will increase the capability of the Landsat 3 satellite to 7). Until the complete Tracking Data and Relay deliver TM data to users

2; t 0 .I. Ch 7Remote Sensing From Space 283

Figure 7.15. Distribution by Foreign Ground Stations (asof Jan. 1, 1985)

"-Prince Albert Canada KirunaTx. Sweden (ESA) CZ>

eye

SOURCE National Oceanic and Atmospheric Administration.

foreign systems rely directly on experience and This instrument was flown on the Shuttle Pallet technology their designers have gained from U.S. Satellite (SPAS) developed by Messerschmitt- R&D efforts as well as on indigenouscapabilities. Boelkow-Blohm GmbH (MBB) aboard Shuttle They are designed primarily to be operational, flight 7. MBB and the Stenbeck Reassurance rather than R&D, systems. Some will be techni- Co., Inc., together with the U.S. corporation, cally directly competitive with, but differentfrom, SPARX, wanted to market selected 20-meter the current Landsat system; some willexceed resolution 2-color land remote sensing data Landsat's capacity to return useful data.39 Thefol- collected on Shuttle flights beginning in 1985. lowing summarizes briefly the characteristicsof However, they dropped such plans after NASA the foreign systems. In order of planneddeploy- informed them that, according to Public Law ment, they are: 98-365, the data must be sold on a nondiscriminatory basis. NASA and MBB are holding con- West GermanyModular Optoelectronic tinuing discussions over a separate venture that Multispectral Scanner (MOMS)-1984/85). would use the MOMS. The West Germans are developing a stereoscopic sensor and have al- For example, the Frerch SPO1 system will have higher resolu- ready tested a limited synthetic aperture radar tion than is posAble from the current Landsat systemIt will also on Shuttle flight 9. have the capacly to return quasi-stereo data to the user. It will, FranceSysteme Probatoire d'Observation however, have fewer spectral bands, an important consideration in comparing the competitive cap3b,11 % of different systems. de la Terre (SPOT)-1985. Since 1978, 291 284 International Cooperation and Competition in Civilian Space Activities

Table 7.7.Foreign Landsat Ground Stations

MSS data TM data Ground station reception and reception and Country location Operating agency Status of MOU processing processing AFgentina Mar Chiquita Comision Nacional de signed yes no Investigaciones Espaciales (CNIE) Australia Alice Springs Division of National Mapping, signed yes no Department of Resources and Energf (DRE) Brazil.. Cuiaba Institute de Pesquisas Espaciais signed yes yes (INPE) Canada .. Prince Albert Canada Centre for Remote signed yes yes Sensing (CCRS) European Space Agency . Fucino, Italy European Space Agency (ESA) signed yes yes Kiruna, Sweden India Hyderabad National Remote Sensing Agency fined yes yes (N RSA) Indonesiaa Jakarta Indonesian National Institute of under negotiation no no Aeronautics and Space (LAPAN) (expected in 1985) Japan . Tokyo National Space Development signed yes yes Agency (NASDA) Pakistan [under development] signed yes Peoples Republic yes of China°.. Beijing Chinese Academy of Science signed yes yes Saudia Arabia . [under development] signed South Africa ... yes yes Johannesburg National Institute for signed yea no Telecommunications, Council for Scientific and Industrial Research (CSIR) Thailand Bangkok National Research Council of under negotiation yes no Thailand (W CT) alloi currently operational bExpected to start operations fall 1985

France (through the French space agency to receive SPOT data from North America CNES) has been planning the world's first at two stations (Prince Albert and Ottawa). commercial remote-sensing satellite service. The SPOT satellite will carry pointable mul- It expects to fly a series of four satellites. Al- tispectra I linear-array sensors capable of re- though the first satellite will not be launched plying images at least as small as 20 meters until late 1985, it :s currently preparing the in three wavelength bands. In addition, the sales market through a French company (gov- satellite will be capable of 10-meter resolu- ernment-owned in part), SPOT IMAGE, S.A. tion operating in a panchromatic mode. A Washington-based American subsidiary These are higher resolutions than are possi- called SPOT Image Corp. is now developing ble on Landsat 5. Because the sensorsare the U.S. market for SPOT data. The U.S.cor- pointable, they are capaLle of producing poration has flown a successful series of tests quasi-stereo images, Although the system is from high - altitude aircraft over the United a commercial effort, the French Government States using sensors designed to simulate the is spending a minimum of $400 million to data that will eventually flow from the SPOT $500 million to develop the system. CNES system. Customers from U.S. private firms, will pay for and build the second satellite in State governments, and the Federal Govern- the series; SPOT Image will reimburse CNES ment have purchased data sets from these from sales of SPOT data. flights. SPOT Image Corp. has an agreement India-IRS-1985. This low-resolution "semi- with the Canada Centre for Remote Sensing operational" land remote sensing satellite

2Q' Ch. 7Remote Sensing From Space 285

Photo calla:. OW SPOT Imago Corp.

Panchromatic simulated SPOT image of Washington, DC (10 metersresolution), taken July 7, 1983 from an airplane. The SPOT satellite is expected to be launched in late1985.

Table 7-8.Categories o I Foreignand will be built in India but launched by a So- Domestic Users viet launcher. It will carry solid-state sensors. Japan Earth Resources Satellite (ERS-0 Agriculture (Federal, State, and private): specific 1991. Its primary mission will be to collect sampling areas chosen acric:iing to the crop; time- dependent data related to crop calenders and the information on renewable and nonrenew- weather patterns able natural resources, including minerals, Forestry (Federal, State, ant private): specific forests, and crops. ERS-1 will carry a synthe- sampling areas: twice per year at preselected dates Geology and nonrenu..able resources (Federal, State, tic aperature radar and an optical (visible and and private): wide vari6ty of areas; seasonal dataIn infrared) radiometer. It will be launched by addition to one-time trampling an H-I vehicle. Japan is alsobuilding a ma- Civil engineering and land use (State and private): populated areas; repeat data required over scale of rine obsE rvation satellite (MOS-1) to be months or years to detormine trends of land use launched in 1986 by an N-II vehicle. Cartography (Federal, State, and private): all areas, Brazil. Working on a moderate-resolution repeat data as needed to update maps Coastal zone management (Federal and State): land-sensing satellite to be launched in the monitoring of all coastlands at selected dates late 1980s. depending on local seasons Pollution monitoring (Federal and State): broad, selected areas; highly time-dependent needs both for Data Products and Uses routine monitoring and in response to emergencies SOURCE Office of Technolow, Assessment Land remote sensing data are put to a variety of uses for resource mapping, assessment, and management's° Table 7-8 lists the major categories of data users, table 7-9 lists the major cus- several sizes. For a special additional fee, custom- tomers for data. Figure 7-16 illustratesthe broad ers may specify cloud-free scenes orother special categories of major users and their relative share attributes. As the section on issues points out, the of the data market. The EROS Data Center sells largest potential market for land remote sensing data either in digital format (computer compati- data products is for information products gener- ble tapes, or CCTs) or photographic imagery in ated by processing and adding information tothe satellite data from other sources (so-calledvalue- "Tor an extended discussion of potential customers andtheir data needs see Remote Sensing and the Private Sector, chs 4, 5, 6 added products).

29;3 286 International Cooperation and Competition in Civilian Space Activities

Table 7.9.Domestic Distribution of tional status, let alone to commercial status. The Landsat Products current policy debate over land remote sensing Department of Agriculture had its genesis in an interagency controversyover Department of Defense who should develop and operate the Govern- Department of the Interior National Aeronautics and Space Administration ment system and what sensors it should contain. Intelligence community In 1966, while NASA dnd other agencieswere Coast Guard experiment!ng with data derived from a variety State planning and resource management agencies Regional planning agencies of sensors carried in aircraft, the Department of Academic community Interior announced a program to fly its ownoper- Commercial users (e.g.. foresters, mineral explora- ational satellite. NASA was convinced thatcon- tion geologists, engineering and consulting companies) siderable flight experimentation was needed with Private individuals sensors that would be carried on Apollo and Sky- SOURCE Officio of Tiochnolor Assessment lab missions. The Interior Department, howeve.... wanted to proceed more directly to operational use of data from a satellite and to shorten the Policy History of Land Remote lengthy process of research and development that Sensing NASA was contemplating. Yet its specifications for the appropriate sensor differed from those of Although the potential utility of images gath- the Department of Agriculture, which wanted ered by satellite of atmospheric conditions and greater spectral discrimination in order to detect of the surface 3f the land and oceanwere rec- crop stress and other agricultural characteristics. ognized by those conceiving the systems, until Both departments recognized the need to have recently few considered operating the systemsas NASA design and build the satellite, but as they commercial entities. However, as Federal, State, would eventually derive the greatest use from the and local governments, universities, and indus- data generated by the Landsat system, they trial firms began to work with the data from the wanted control over the design of the system be- Landsat system, they realized that, at the prices cause they were aware that "the experimental charged,'" these data were often a cost-effective program would inevitably shape any operational substitute for older (aircraft) methods of gather- program."42 ing Earth resources data. The digital format, wide The Bureau of the Budget (BoB) spatial coverage, and repeatability of the data was not convinced of the utility of the Landsat systemcom- made possible new applications that couldeven- tually increase the value of the information these pared to other data sources, and specified that NASA do only research and development. It also data provide. By the late 1970s, some observers postulated that the data might eventually have opposed purchase of equipment that would lead to operational use of the system. As the system sufficient commercial value to attract private in- was flight tested, NASA encouraged Federal, vestmeht in a remote sensing system. However, it was also clear that the known barr;ers of high State, and local agencies and private groups to apply the data to their needs, in part to demon- system cost, and technological and economic strate to BoB that the data were beneficial. In spite risk, would have to be drastically reduced if pri- of continued opposition from BoB and its vate investors were to be interested in providing successor, the Office of Management and Budget a system comparable to Landsat, especially be- (OMB), NASA continued to involve data cause the initial market for the data was thought users, to be quite small (see section on issues). both domestic and foreign, in planning for follow- on satellites and sensors and to encourage the The history of the Landsat system illustrates the widespread use of the data. The result wasa qua- difficulties that may attend bringinga Govern- si-operational43 system, which only partially met ment-developed applications system toopera-

42Pamela E Mack, "Space Science for Applications. . ," op. cit. 4,Landsai data' races have never reflected the cost of operating 430wItan Space Policy and Applications, OTA,p. 13 Article I the system, much less the costs of developing the sensorsin the also states. 'The exploration and use of outerspace ... shall be first place carried out for the benefit and in the interest of all countries"

234 Ch. 7Remote Sensing From Space 287

Figure 7-16.Customer Profile of Landsat Digital and Imagery Products (shipped sales), Fiscal Year 1984

3,042 items $1,590,875

Individuals 1% Individuals 1%

State and Local Government 2% Academia 5%

State and Local Government 3%

34,964 frames $2,221,253

Individuals 5% Individuals 3%

Academia 5%

State and Local Government 3% State and Local Government 3%

SOURCE National Oceanic and Atmospheric Administration

295 288 International Cooperation and Competition in Civilian Space Activities

the needs of users. Even though the system has (in Title II) the Department of Commerce tocom- now been transferred to INJOAA, and is fully oper- mission studies and internal analyses to explore ational, it does not generate sufficient revenue and examine the issues raised by transfer ofre- from customers (i.e., a market) to enable the mote sensing from space to the private sector." Landsat system to be transferred to the private None of these reports concluded that rapid trans- sector or be commercialized without sizable fer was in the best interest of the United States! subsidy. In late 1983, however, the Administration be- Transfer of the Government's civilian land re- gan to draft a request for proposals designed to mote sensing system to private hands was first solicit proposals from private industry to own and considered seriously by policymakers in the draft- operate the current Landsat system and any fol- ing of President Carter's 1979 policy statement low-or.. Concurrently, the House Committeeon on space, PD/NSC-54, which amplified the earlier Science and Technology drafted a bill authoriz- policy directives, PD/NSC-37 and PD/NSC-42. It ing a phased transfer of the system to the private stated: sector, with the aim of eventually establishing a Our goal is the eventual operation by the pri- profit-making satellite land remote sensing indus- vate sector of our civil land remote-sensing activ- try. On January 3, 1984, the Department of Com- ities Commerce will budget for further work in merce released its request for proposal (RFP). Sev- fiscal year 1981 to seek ways to enhance private en proposals were received on March 19, 1984.49 sector opportunities." It is significant that several of the proposers were This statement left open the speed and the means partnerships or consortia. Few single firms have of the transfer but, because it also committed the the breadth of experience and personnel to de- United States to provide continuity of the data sign, build, and operate a system as complex as flow from the Landsat system through the 1980s, the Landsat system. After evaluating all the pro- most observers assumed that transfer to the pri- posals in an initial round, in June the Department of Commerce Source Evaluation Board (SEB) vate sector would take place about 1990. The first found three proposers, EOSAT, Kodak/Fairchild, stage of that process was to transfer responsibility and Space America, to be within the competi- for operational management of the Landsatpro- gram to NOAA. Transfer of the meteorological tive range required by the RFP. After a second round of evaluation, the Secretary of Commerce satellite systems to private ownership was noten- visioned by PDNSC-54. selected Eastman Kodak and EOSAT for negotiations with the Department. The Reagan Administration decided early in its gress passed, and the President signed, appropriations bill H.R. 3222 tenure to hasten the process of transfer, and an- (Public Law 98.166), which contained a provision preventing sale nounced "the intent of transferring therespon- of the Nation's meteorological satellite systems to private hands. sibility [for Landsat] to the private sector as soon The meteorological satellites will continue to be operated as a public service as possible."45 That statement, too, made no 47"Space Remote Sensing and the Private Sector. An Essay," Na- mention of the meteorological systems. Later, in tional Academy of Public Administration, March 1983, Department March 1983, the Administration proposed to of Commerce contract No NA-83-SAC-066; "Commercialization of the Land Remote Sensing System An Examination of Mecha- transfer both the Landsat and the metsat systems nisms and Issues," ECON, Inc ,April 1983, Department of to private hands." Public Law 97-324 mandated Commerce contract No. NA-83-SAC-00658, "A Study to Examine the Mechanisms to Carry Out the Transfer of Civil Land Remote Sensing Systems to the Private Sector," Earth Satellite Corp and ""Presidential Directive NSC-54," Nov 16, 1979 Abt Associates, Inc, Department of Commerce contract No. "Statement of Joseph Wright, Deputy Secretary, Department of NA83-SAC-00679. Commerce, to the Subcommittee on Space Science and Applica- "The assumptions upon which these analyses were based in- tions of the House Committee on Science and Technology, and cluded 1) maintenance of data continuity, 2) maintenance of U.S. the Subcommittee on Science, Technology, and Space of the Sen- leadership, 3) Landsat -type technology, and 4) maintenance of in ate Committee on Commerce, Science, and Transportation, July ternational obligations 22 and 13, 1981 "These were: Earth Observing Satellite Co (EOSATa new com- 465tatement of Malcolm Baldrige, Secretary of Commerce, to the pany to be formed by RCA and Hughes Aircraft), Eastman Kodak; Subcommittee on Natural Resources, Agricultural Research, and Geo-Spectra Corp , Miltope Corp of Melville, NY., Milton A Schultz Environment of the House Committee on Science and Technol- of Williston, ND, Space Access Corp of Marina Del Rey, Space ogy, Apr 14, 1983 As discussed earlier, in November 1983, Con- America Inc See Space Business News, Ma 26, 1984, p. 1. 99 Ch. 7Remote Sensing From Space 289

297 290 International Cooperation and Competition in Civilian Space Activities

The initial proposals from EOSAT and Kodak/ During this process, H.R. 5155 was reported Fairchild included estimates of nearly $1 billion out of the House Committee on Science and in Government subsidies over a 10-year period Technology on April 3, 1984, and passed by the in order to take over marketing data from thecur- entire House April 10." A similar bill (S. 5155) rent Landsat system and to build an advanced was under consideration by the Senate Commit- new satellite system. EOSAT was prepared to fly tee on Commerce, Science, and Transportation a refurbished Thematic Mapper on Landsat 6 and and passed the Senate Mat/ 8, 1984. Aftera con- 7 and to develop and launch amore advanced ference and subsequent passage by both Houses, multispectral linear array (MLA) sensoron Land- the Land Remote Sensing Commercialization Act sat 8 and 9. Kodak's proposal called for an en- of 1984 was signed into law (Public Law 98-365) tirely new design as a follow-on to Landsat 5 that by President Reagan on July 17, 1984. would move directly to MLA technology. The De- partment of Commerce found both proposals ac- In addition to authorizing the commercializa- ceptable technically, but unacceptable froma fi- tion of the U.S. land remote sensing program, and nancial point of view. !t invited drastically revised providing for continuation of certain Government financial plans. Among other matters, theamount of financial risk the two companieswere willing 5°Committee Report 98-647 on the Land Remote-Sensing Com- mercialization Act of 1984, House Committee on Science and Tech- to accept was unacceptable. nology

29 Ch. 7Remote Sensing From Space 291 functions, the Act is noteworthy for being the first erable debate within the Administration, the two piece of major legislation that attempts to set out agencies agreed on: the legal and regulatory framework for commer- 1) The run-out of Government cost for oper- cial space activity as required by the 1967 Outer ating Landsats 4 and 5; plus 2) a maximum of Space Treaty (Articles VI and IX). The box summa- $250 million of new budget authority for the rizes the major provisions of Public Law 98-365. commercial follow -on system.51 The complete Act is reproduced in appendix C. In August 1984, EOSAT submitted a revised The ultimate goal of the transfer of the results proposal that included only two satellites, both of Government R&D to the private sector is to using a Landsat-type sensor (TM), andwhich, create a self-sustaining business from all or part among other things, assumed that the Govern- of the technology so transferred, with the private ment would continue its research program in ad- sector in full control (except for appropriate reg- vanced sensors, to support the transition to a ulation) of further development and shaping of more advanced system in the 1990s. In addition, the system and products. Realization of this goal EOSAT included an escape clause that allowed would constitute full commercialization of the it to withdraw from the contract if sufficient mar- Government-developed technology. Intermedi- ket for data had not developed to support a com- ate steps along the way to this end could result mercial enterprise. Kodak Corp. declined to sub- in: 1) shared control of the technology by Gov- mit a revised proposal. ernment and the private sector; and/or 2) joint continued development of the technology and In mid-May 1985, the Department of Com- itproducts, through either subsidies, shared in- merce announced that it had reached agreement vestment, or guaranteed Government purchase. with EOSAT to provide $250 million plus launch Such intermediate steps, in which the system costs (a total subsidy of about $290 million). would receive significant Government subsidy, EOSAT agreed to build and launch two satellites have often been referred to as "privatization." whether or not market has developed to support a profit-making business. An Administration In passing Public Law 98-365, Congress de- request for $125 million ($75 million for fiscal year cided to privatize the Landsat system by first au- 1985 and $50 million for fiscal year 1986) to allow thorizing the Secretary of Commerce to contract EGSAT to begin the process of building Landsat with a private firm to market Landsat data as the 6 has recently been sent to Congress for action.52 Government continues to operate the current system (Title II). The Government will also provide a subsidy to enable a private operator to build International Relevance of Landsat a system that would provide data continuity for Because the Landsat satellite travels in a polar a total of 6 years after the demise of Landsat 5. orbit, which enables it to sense the entire surface Such legislation implicitly expects sufficient mar- of Earth, data from the system necessarily have ket for data to develop within 8 to 10 years to international implications. Data from both the enable a private operation to be self-sufficient. Landsat and metsat systems have served as con- Among other provisions, Public Law 98-365 au- structive instruments of U.S. foreign relations. For thorized up to $75 million for fiscal year 1985 as example, these data have aided other countries the first installment of a subsidy to aid the even- to map, manage, and exploit their own resources; tual commercialization of land remote sensing. they have also raised the general level of aware- The law does not specify the total amount of sub- ness about growing environmental problems sidy necessary, as this was left to the Department throughout the world. of Commerce to work out with a potential contractor. As these corporations were preparing to 5' "Report to the Congress (Public Law-98-365)," Department of revise their proposals to respond to the SEB's con- Commerce, September 1984 5,E0SAT proposed an escape clause in the contract to allow for cerns, OMB informed the Department of Com- the possibility that, even with a vigorous marketing effort on its part, merce a subsidy was inappropriate. After consid- insufficient demand for data would develop.

29j 292 International Cooperation and Competition in Civilian Space Activities

Aircraft or balloons are dearly limited in over- equipment, and services related to reception and flight by national restrictions on sovereignair- data preprocessing (excluding the i,alue-added space, but spacecraft have no overflight restric- industry discussed above). tions. According to international treaty, "Outer space ...shall be free for exploration and use Satellite Manufacturers by all states."53 This principle is understood by the United States and most other nations to mean General Electric Corp. was the prime contrac- that nations are free to place in orbit any satel- tor for the Landsat 4 and 5 satellites, with Fair- lite that does not violate other provisions of the child and Hughes Aircraft supplying significant 1967 Outer Space Treaty or other principles of components. If the transfer of the Landsat system international law. This understanding has been to EOSAT is completed by appropriating the nec- called the "open skies" principle; it is a funda- essary subsidy, RCA and Hughes Aircraft Corp. mental principle of the U.S. space program. The (the two participants in EOSAT) will likely build United States supports this principlein part by most of the hardware (two satellites and associ- making civilian remote sensing data available on ated system hardware), with other firms orovid- a nondiscriminatory basis to anyone who wishes ing portions of it under contract. to receive them. Through AID, NASA, and NOAA, The French firm Matra is the prime contractor the United States has been the principal force in for the SPOT satellite. Major subsystems and soft- setting up foreign regional and national centers ware are provided by Aerospatiale and SEP. The capable of processing and interpreting Landsat tape recorders are built by the U.S. corporation, data. By integrating these data with meteorolog- Odetics, Inc. ical and/or ground data of all kinds, these centers aid developing countries coping with theenor- Ground SZations and Receivers mous problems of environmental protection and resource management. Many of the same firms that manufacture components of ground stations and receivers for Although the private sector is technicallyca- meteorological data reception also sell similar pable (given adequate financial incentives) of equipment for land remote sensing. The major providing the data promptly to meet the require- differences are in the frequencies used for trans- ments of the Federal Government and other po- mission and in the scale of investment for land tential customers, commercial objectives may remote sensing stations. There are now 12 oper- conflict with certain U.S. foreign po"ey objec- ational Landsat receiving stations and 2 under tives. Constraints on a private firm ti. are suf- construction. In addition, there are several SPOT ficient to protect U.S. foreign policy objectives receiving stations under construction. In the next could well make such an enterprise unprofitable 3 to 4 years, because of the advent of the SPOT or require a large and continuing Government system and the European ERS system (see sec- subsidy to make the enterprise viable. tion on ocean remote sensing) there could beas many as eight new receiving stations begun Equipment Market around id the world. Several African countries, Iraq, Pakistan, and Saudia Arabia have expressed in- In a manner similar to that for meteorological terest in building receiving stations. Each new satellites, the market for land remote sensing station will cost between $10 million and $15 mil- equipment and services can be divided into three lion. The balance of the market for ground sta- categories: the space component, ground station tions, receivers, tape recorders, and the like will be in replacements and in upgradingsome sta- 551967 Outer Space Treaty Because of the U 5 example, the non- tions to receive X-Band transmissions from TM discriminatory data distribution policy is now of importance to other and from SPOT. For example, the Canadian Land- countries as well sat receiving station in Prince Albert is being "lohn H Gibbons, "international Implications of Transferring the Landsat System to the Private Sector," hearing before the Sub- equipped to receive SPOT data. The Canadian committee on Legislation and National Security of the Committee firm MacDonald Dettwiler Association, Inc. is on Government Operations, Sept28, 1983 providing the equipment for this station and the Ch 7Remote Sensing From Space 293

SPOT receiving station in Ottawa. MBB of Ger- Data sales policies. Landsat data have always many and NEC of Japan also supply ground sta- beer sold to all purchasers on a noiidiscrim- tion equipment. Yearly international sales in inatory basis. In large part this policy was ground receiving equipment may be as high as originally chosen to support the U.S. "open $30 million. skies" policy and the use of space for peace- Issues ful purposes. In practice, selling data on a nondiscriminatory basis has helped to blunt What International Issues Are Raised by criticism of other activities, such as the oper- Transfer to the Private Sector? ation of classified surveillance satellites. It has also demonstrate,' U.S. adherence to the Congress and tO Administration, in passing principle of the fv_e flow of information. A'- and signing into law Public Law 98-365, have though some private sector analysts* have agreed on the broad terms of transfer of the U.S. argued that owners Gf remote sensing sys- Ind remote sensing system to the private sec- tems should be allowed to set their own data tor. Although the current attempts to effect such policies, Public Law 98-365 mandates the a transfer arose both from concern for reducing pol;cy of nondiscriminatory sales, on the the Federal budget deficit and from the philo- that the open skies policy continues sophical conviction that the private sector CO'ild to be of importance to the United States. provide those services more efficiently, the leg- Value-added services. Most of the revenue islation also took into acaA Ir.` the broader agen- earned from space remote sensing will be da of U.S. international relat:ons. In genral, the earned by the companies that add value to successful transfer of Government-developed the data by processing, analyzing, adding technology to the private sector is a process that other information, and interpreting the pri- must take place over time, and with strong sup- mary data from space. The value-added port from the potential foreign anG domestic CJS- companies constitute a :mall, but growing, tomers as well as from the policymakers. specialized industry. The strength of commercial space remote sensing will depend As the process of transferring the Landsat system proceeds, it will be important to monitor the on a strong value-added industry." Most re- reactions of other countries to it, and to c)ntinue mote sensing system operators would want to approach each of the following issues with im- to participate in the value-added business. agination and a sensitivity to the real or perceived The availability of high resolution land re- concerns of other nations. Not only are the po- mote sensing data and the ability to analyze litical sensitivities of other countries important to them are potentially powerful tools for the United States, foreign customers are neces- resource development. Many developing sz.,ry to the financial viability of a private Landsat countries have expressed the concern that system." In addition, the French SPOT system allowing the system operator to offer value- will soon offer customers an alternative choice addej services might give the seller too of data sources. much power over the acquisition and distribution process. They are concerned that The following discussion of international issues the company or favored customers could, is summarized from the OTA Technical Memo- b., processing and interpreting these data randum, Remote Sensing and the Private Sector: before delivering them to others, obtain eco- Issues for Discussion:56 nomic leverage over countries that lack their "When projected foreign ground station feesare included in the estimates of future income from a land remote sensing system, foreign sales could constitute as much ab 39 percent of the revenue *Cf Klaus Heiss, statement at hearing before the Subcommittee from a U 5 system See "Commercialization of the Land Remote on Science, Technology, and Space of the SenateCommittee on Sensing System An Examination of Mechanisms and Issues," ECON, Commerce, Science, and Transportation, Mar 22, 1984, pp 83-88. Inc , Prepared for the U S Department of Commerce, contract No "Fredrick B Henderson, III, -The Significance of a Strong Value - NA-83-SAC-00658 Added Industry to the Successful Commercialization of Landsat," Remote Sensing and he Private Sector Issues for Discussion, presented at the 21st Goddard Memorial Symposioum, Mar. 24- op cit , ch 3 25, 1983 3J1 294 International Cooperation and Competition in Civilian Space Activities

own facilities and personnel to interpret the to enable interests outside a sensed coun data. Therefore, in order to maintain good try to gain a competitive advantage in k..owl- relations with developing countries, it may edge of minerals or other nonrenewable be appropriate for the United States to re- resources, or that information on crop con- strict the private data distributor from en- ditions or military activities of states might tering into the value-added business, or to be sold preferentially to political adversaries. regulate it closely to prevent such a com- Developing countries are particularly con- pany from exerting unfair economic lever- ccrned about this possibility, because most age over others. Here, foreign perception of lack the indigenous ability to analyze the economic harm may be as important as ac- data (see app. 7A). Some countries have tual harm. As competition from foreign or maintained that they should have priority ac- other domestic systems grows, it would be cess to data derived from sensing their ter- possible to relax such restrictions. ritory, while others have argued that their Public Law 98-365 deals with this issue by consent should be obtained before these requiring the firm to "notify the Secretary of data are transferred to third parties. any 'value-added' activities (as defined by The United States has consistently opposed the Secretary by regulation) that will be con- efforts to limit the distribution of Landsat ducted by the licensee or by a subsidiary or data, arguing that remote sensing is a peace- affiliate" (Sec. 402(b)(6)). The terms of the ful and beneficial use of space in which the Act assume that antitrust legislation is suffi- restraints of national sovereignty have no val- cient in most cases to deter the corporation id application. Further, it has held that the from engaging in practices that would either free collection and dissemination of primary inhibit competition from other U.S. firms or data and analyzed information is supported harm U.S. relationships with other nations. legally and encouraged by the 1967 Outer If additional legislation is required, as more Space Treaty and article 19 of the U.N. Dec- experience is gained with private operation laration of Human Rights. The U.S. policies of land remote sensing, Congress could take of nondiscriminatory data sales and free flow remedial action. of information have so far successfully de- U.S. cooperation with other countries. The flected attempts to restrict the right to sense Landsat ground stations in 10 foreign coun- other countries and sell those data to third tries constitute an eloquent statement of U.S. parties. A!though attempts to restrict the flow leadership in successfully applying high tech- of remotely sensed data and information are nology for the benefit of all mankind. The likely to continue in the U.N. and other in- United States has also participated with international fora, the proliferation of civilian dustrialized and developing countries in re- remote sensing systems will make it more search on applying Landsat data to critical difficult for such restrictions to gain as- resource and e iironrnental needs. It if cendancy. essential for the continuing resear -h aru development of remote sensing technology, Wnat Factors Are Most Importa-t to and the growth of the data market, for the Market Growth of Land Remote United States to maintain its cooperatiye Sensing Data Products? basic and applied research programs with other countries. If the transier is made, it During its development, land remote sensing will be particularly impe.tant to assure that was treated as a technology that eventually appropriate Government funding is contin- " would create billions of dollars annually in ben- ued for cooperative projects with develop- efits" to the public." Actually, benefits of this ing countries. magnitude have yet to materialize. To many, this International legal issues. Private ownership departure from stated expectations suggests that of the land remote sensing system could lead s8' Commercialization of the Land Remote Sensing System An to suspicions that such data would be used Examination of Mechanics and Issues," op. cit, p 80 Ch. 7Remote Sensing From Space 295 the potential direct economic benefits of the Data prices. Even if it is possible to reduce Landsat program were oversold by some in its dramatically the cost of the system's space early days. In part, large public economic bene- segment, the costs of handling and correct- fits have not followed from Landsat development ing the raw data are likely to remain high in because agencies have been slow to incorpor- the near term because, with current data ate these data into their routine operations." processing technology, labor costs are a sig- Government agencies have bought even less data nificant proportion of the overall expense of in recent years than they did at first. producing corrected Landsat data. Techno- logical advances in large-scale data process- Clearly, although overall data sales have been ing, storage, and retrieval could reduce such low, the Landsat system still generates both public costs. Customers for primary data complain and private goods.° Data from the Landsat sys- that dramatic increases in data prices would tem have demonstrated to many domestic and reduce their ability to purchase data in the foreign users, both inside and outside Govern- quaiitities that would be most effective.62 Fig- ment, that these data can be highly effective in ul :'5' on data purchases from the EROS Data meeting large-scale resource information needs. Center bear out their concerns. In October As the policy section notes, transferring the 1982, the beginning of fiscal year 1983, Landsat system to the private sector may enhance NOAA increased the price of data dramati- this Nation's competitiveness in land remote sens- cally (table 7-5). For example, the price f )r ing by employing industry's skills in marketing an MSS computer compatible tape(CCT) in- and innovation to increase the overall market for creased 325 percent, from $200 to $650. data and services. However, without substan- Knowing the price increase was coming, cus- tial Government subsidy for a land remote sens- tomers purchased more data in the last half ing enterprise, transfer in itself is not likely to of 1982 than they would have otherwise (fig. result in a viable commercial business.61 7-17). Although income from data sales increased in fiscal year 1983, the number of If the initial phase of the transfer process in MSS scenes purchased fell to 33 percent of which a private operator markets the data from fiscal year 1982 sales (table 7-10). Sales Landsat 5 proves successful, it will ',till be neces- figures for fiscal year 1984 confirm the overall sary to evaluate progress toward a self-sustaining downturn in data sales. Overall income from business. If Congress were to decide that suffi- sales has increased dramatically, however, cient progress had not been made, but the pub- because OMB has required each agency to lic good aspects were still high, it could still de- account for its data receipts,63 and because cide to operate a civilian system within the NOAA has instituted special acquisition Government. The most important single factor charges for cloud-free images or other non- that will determine the viability of a commer- standard requests. In fiscal year 1983, special cial remote sensing enterprise is market growth. acquisition charges amounted to about $4 The development of the market for remote million, or 58 percent of the total income sensing data and services will depend on four ma- from data sales. In fiscal year 1984, special jor factors: the price, availability, utility of the acquisition charges were $6,130,275 or 62 data, and the ability of the information industry percent of total Landsat data income. to develop cost-effective ways of processing and Availability of data. Customers cite two con- applying such data to the needs of users. cerns over the availability of data: 1)data are

"See for example, Remote Sensing and the Private Sector, ch 5 "Remote Sensing and the Private Sector, ch. 4 °See testimony in "Civil Land Remote Sensing Systems," Joint 61Although OTA has not done a detailed analysis of costs associ- Hearings before the House Subcommittee on Space Science and ated with developing a land remote sensing system, it appears that Applications of the Committee on Science and Technology, and a subsidy (including launch costs) between $350 million and $500 the Senate Subcommittee on Science, Technology, and Space Com- million (depending on the financial rithe private firm is willing mittee on Commerce, Science, and Transportation, July 22, 23, to assume) might be needed to reduce the risk of commercial fail- 1981. ure to an acceptable level See also Remote Senting and the ,'ri- 63The Foreign Agricultural Service, for example, was receiving vate Sector, op cat , ch 1 data directly from NASA through a receiver in Houston. 303 296 International Cooperation and Competition in Civilian Space Activities

Figure 7-17.Sale of Lanasat Imagery Frames and Digital Products(shipped sales) Imagery frames

350 Z < 0 a) Z 300 0 co a) Cl) co 0 a) 250 0 a) C 0 a) 200 o_ U I fr. 150

100

1972 '73 '74 '75 '76 '77 '78 '79 '80 '81 '82 '83 '84 '85 Calendar yeer quarters

Digital products

1972 '73 '74 '75 '76 '77 '78 '79 '80 '81 '82 '83 '84 '85 Calendar year quarters SOURCE National Oceanic and Atmospheric Administration

304 Table 7.10.- Customer Profile of Landsat Total Data

FY 19731 FY 19741 FY 1975 Customer category Items Item (%)Dollars Dollar (%) Items Item (%)Dollars Dollar (%) Items Item (%)DollarsDollar (%) Federal Government (less N.I.'s) 21,780 27% 62,756 27% 28,493 18% 87,156 16% 34,346 17% 169,283 19% NASA investigators . ------5,456 3% 15,992 2% State/local government 2,995 4% 10,639 5% 2,534 2% 10,920 2% 1,969 1% 16,988 2% Academic 13,071 16% 28,679 13% 18,611 12% 63,964 12% 27,727 14% 142,054 16% Industnal ... 24,430 30% 67,360 30% 35,890 23% 114,140 22% 45,671 23% 219,704 24% Individuals .. 5,109 6% 17,143 7% 17,266 11% 67,127 13% 18,643 9% 100,953 11% NonU.S.... 8,497 11% 28,154 12% 37,038 23% 120,499 23% 47,174 24% 174,659 19% Non-identified 5,189 6% 13,311 6% 17,346 11% 64,708 12% 17,397 9% 69,376 7% Total data .. 81,071 100% 228,042 100% 157,178 100% 528,514 100% 198,383 450% 909,C09 100%

FY 1976 TO 1976 FY 1977 Customer category Items Item (%)Dollars Dollar (%) Items Item (%)Dollars Dollar (%) ,tamsItem (%)Dollars Dollar (%) Federal Government (less N.I.'s) 31,645 13% 253,166 15% 7,771 15% 73,436 16% 21,074 16% 269,825 19% NASA investigators 63,329 25% 341,056 21% 5,730 11% 48,111 11% 9,827 7% 96,032 7% State/local government . 1,214 1% 8,191 0% 149 0% 1,168 0% 1,360 1% 20,168 1% Academic . .. . 26,077 11% 178,160 11% 8,489 16% 40,129 9% 14,063 11% 141,077 10% Industrial ...... 42,833 17% 322,699 20% 12,122 24% 121,025 27% 36,979 28% 412,183 28% Individuals . . 18,052 7% 141,556 9% 3,755 7% 28,683 6% 8,003 6% 72,129 5% NonU ...... 65,100 26% 391,673 24% 13,702 27% 138,632 31% 40,632 31% 442,079 30% Noniaentified .. 488 0% 4,892 0% 96 0% 1,087 0% 49 0% 344 0% Total data 2,18,738 100%1,641,393 100% 51,814 100% 452,271 100% 131,271 100%1,453,837 100%

3 4) Table 7-10.-Customer Profile of Landsat Total Data-Continued

FY 1978 FY 1979 FY 1980 Customer category Items Item (%)DollarsDollar ( %) Items Item (%)DollarsDollar (%) Items Item (%)Dollars Dollar (%) Federal Government (less N.I.'s) 28,020 25% 597,269 30% 31,692 24% 501,214 23% 25,919 19% 392,591 16% NASA investigators .. 522 0% 13,431 1% 0 0% 0 0% 0 0% 0 0% State/local government .... . 1,515 1% 31,557 1% 968 0% 19,281 1% 4,225 3% 78,327 3% Academic . , 10,222 9% 159,379 8% 14,742 11% 235,231 11% 12,977 10% 202,401 9% Industrial 21,321 19% 469,924 24% 25,903 19% 508,792 24% 24,723 19% 614,400 26% Individuals 5,537 5% 73,808 4% 9,247 7% 102,854 5% 8,147 6% 96,982 4% NonU.S...... 46,409 41% 630,700 32% 53,912 39% 764,441 36% 56,581 43%1,003,866 42% Total data .... 113,576 100%1,976,068 100% 137,464 100%2,131,813 100% 132,572 100%2,388,567 100%

FY 1981 FY 1982 FY 1983 Customer category Items Item (%) Dollars Dollar (%) Items Item (%)DollP.sDollar ( %) Items Item (%)Dollars Dollar (%) Federal Government (less N.I.'s) 29,177 22% 481,067 19% 24,000 20% 571,807 20% 29,804" 47%5,269,741" 75% State/local government 3,470 3% 107,667 4% 5,251 4% 146,897 5% 1,268 2% 70,263 1% Academic .... 11,401 9% 198,611 8% 7,753 7% 201,577 7% 2,536 4% 210,790 3% Industrial ...... 29,821 22% 758,245 31% 23,078 19% 924,540 31% 6,341 10% 632,369 9% Individuals 9,292 7% 117,642 5% 5,953 5% 126,565 4% 1,902 3% 70,263 1% Non U.S.... 49,965 37% 832,036 33% 53,964 45% 969,893 33% 21,560 34% 772,895 11% Total data... . 133,126 100% 2,4E:5,268 100% 119,999 100%2,941,279 100% 63,413 100%7,026,895 100% FY 1984 Customer category ItemsItem (%) DollarsDollar (%) Federal Government (less N.I.'s) . ..16,017 42% 1,696,710 45% State/local government.... 1,222 3% 122,163 3% cademic ... 2,578 7% 181,433 5% Industry ..... 8,213 22% 985,362 26% Individual . . 1,848 5% 84,498 2% NonU.S... . . 8,128 21% 741,962 19%

Total data. . 38,006 100%3,812,128 100% aLandsat Imagery Only-no CCT customer profiles available for 1973 and 1974 (minimal data) "Includes special acquisitions fict acquisition charges SOURCE National Oceanic and Atmospheric Administration

, 3t) Ch. 7Remote Sensing From Space 299

not delivered promptly, (the shortest period a variety of nonprofit data users also proc- between acquisition and delivery from the ess data for information content. These in- EROS Data Center is about 2 weeks); and 2) clude universities, State and local govern- the likelihood of a gap in delivery of data be- ments, and several Federal agencies. tween the demise of Landsat 5 and the de- In order for the market for data to increase ployment of a follow-on satellite." In part to the point that it will sustain a self-sup- because the Landsat system was treated as porting business, potential customers will an R&D system and declared operational have to become convinced of the utility only in 1983, insufficient funding and plan- (based on price, availability, and conven- ning effort was devoted to assuring that cus- ience) of data for their needs. Although users tomers received data in a timely, continu- in many different fields have experimented ous manner. This has inhibitedfull (with NASA's help) with the data and writ- development of those segments of the mar- ten much about their utility, the message has ket (primarily agriculture and other nonre- not yet reached the sort of customers needed newable resource management areas) that to sustain a self-supporting business. Unlike rely on rapid receipt of the data. Potential most current users, who are conversant with users have also been discouraged by the pos- manipulating data on mainframe computers sibility that data from Landsat or a similar and who have experimented with satellite U.S. system may not be available in the data, potential customers are more inter- future. ested in information and "services which di- Until recently, the cost of manipulating rectly address their information needs."" data and adding value to them has been high They are not customers for Landsat data per because they have required large, emensive se, but for the information derived from link- computers and peripheral equipment. Po- ing Landsat data with other resource data. tential customers from all segments of the As such they are r.ot unlike the majority of user community are reluctant to invest in the customers for personal computersindivid- necessary sophisticated hardware and soft- uals who are uninterested in writing their ware as long as the data supply is uncertair. own programs and will only purchase a com- Utility of data. The value-added industry puter if they can also purchase simple, "user- consists of a diverse set of service companies friendly" software that will meet their needs or departments of larger (discipline-oriented) without modification and with little addition- industries (e.g., petroleum, mineral, or for- al instruction. estry firms) that take the corrected spacecraft For example, as one study has noted, the data, manipulate them, and integrate them need to manage and exploit the world's re- with other data to create useful sets of in- newable resources more effectively will re- formation, in the form of maps, tables, or quire "more complete and timely informa- graphs. They are properly considered part tion about soil conditions, crop acreage and of the overall information industry.65 Infor- yields, water availability, meteorology, and mation derived from this process may, for other factors that could benefit or deter re- example, indicate to the exploration geolo- source production ...the farmer, and the gist where ground tests for particular forms government official, and everyone in be- of minerals should be made, or to the agri- tween is a potential customer for resource cultural planner what the extent of weather- information."67 At present, the primary cus- related stress to a particular crop is likely to tomer for Landsat data related to agriculture be. In addition to the profit-making enter- is the Federal Government, which has a prises that process land remote sensing data, stake in U.S. agricultural productivity. How-

66 'Markets for Remote Sensing Data 1980-2000," TerraMar, "Remote Sensing and the Private Sector, ch 4 Study for TRW Defense and Space Systems Group, contract No. 65Donn C Walk let, -Remote Sensing Commercialization Views M&24770C2M, November 1982 of the Investment Community," ERIM Conference, May 9-13, 1983 "Markets for Remote Sensing Data 1980.2000," op at

397 300 International Cooperation and Competition in Civilian Space Activities

ever, the agricultural industry also includes process these data will decrease. Already, it producers, processors, and merchandisers, is possible to purchase a minicomputer sys- banks, and brokers; only a few of thesecom- tem for processing Landsat data for about panies are now customers of land remote $50,000. In the near future, it will be possi- sensing data (table 7-11). As one report ob- ble for data users to make more effective use served, the agricultural industry is highly of microcomputers and thereby to decrease competitive. Inexpensive and timely infor- the cost of an in-house value-added system mation about the status of crops would be to the order of $20,000 to $25,000.70 Al- well received68 by all elements of that com- though not as efficient as the mainframe munity. Unprocessed data will find little use computers, such systems put the price of by these potential customers. using Landsat data for specific applications Processing improvements. Inexpensive data within the range of relatively small com- processing is only one component in the list panies. of factors that affect market growth, yet it One of the reasons the market for Land- could be more important than the price of sat data has not developed more quickly is data. The cost of adding value to a CCT*can that potential customers need primary data today far exceed the price of a CCT. Typi- with a wide variety of different basic char- cally, value-added services applied toa sin- acteristics (spatial and spectral resolution, gle CCT may range from 100 to 300 percent number of spectral bands, coverage area) de- of the price of unprocessed data depending livered over widely different timeframes. Un- on the complexity of the service desired. If til the thematic mapper (TM)was developed, it is eventually possible to purchase particular the data's spatial resolution and number of portions of a CCT, rather than z.n entire spectra! bands were limited to the capabil- scene,69 the need for large computers to "Ibid 69Many date users find that they need only part of a given scene As the data become more widely used by customers interested pri- 7°Such a system would include at least a microcomputer with marily in small geographical areas, the demand for smaller parts hard disk storage of 10 megabytes ($5,000 or Icss), an image proc- of a scene will likely increase it is now possible to purchase quarter- essr,r ond associated computer software ($15,000). Additional items, scenes of TM data from EDC such as the software to work with a geographic information sys- 'Computer - compatible tape tem, could raise the total to $25,000

Table 7.11. Agribusiness Industry Structure Analysis

Producers: Individual farmers Farm cooperatives: International Agribusiness Banks?' Farmland Industries, Inc. Rank of Americab Citibank Processors: Combined Function Companies. Agribusiness Brokers:' Pillsbury Merrill Lynch Quaker Conticommodity Servicesc Ralston-Purina Merchanoisers: International Grain Companies-d Cargill Bunge Drvius Continental Grain aBanks and broker* Interact with all three Industry segments bBank of America consistently maintains the largest share of agrIbu3iness lendingin the world cConticommodity is a subsidiary of Continental Grain dIntemational grain trading is dominated by thews four companies withCargill representing by far the greatest influence wi thin the Industry SOURCE Terra-Mar This table illustrates the variety of possible consumers of informationfrom a single buGi ness area. Similar tables could be drawn for other business that depend on Information about natural resources, whether renewable or nonrenewable.

3 u s Ch 7Remote Sensing From Space 301

ity of the MSS sensor. The speed of correct- term with repeat coverage. It will rely pri- ing and delivering the data has also been lim- marily on the private sector to develop and ited. If the market for primary data is to grow maintain a land remote sensing system. Thus, substantially, the system's owner will have to obtain certain important civilian data, the to deliver data useful for a broad range of Government may have to rely on foreign sys- applications, and the value-added industry tems In the absence of strong Government will have to develop a wide variety of inex- support for a private system, the private sec- pensive data products. At present, although tor would be left to compete directly with some users can utilize the higher capabilities foreign government-funded enterprises to of the TM data, most cannot!' In other sell data. words, as ,rgued above, the data will have Remote sensing research. An important to interest a broader category of , sers than aspect of maintaining leadership in land re- they now do. mote sensing is the continuation of research on applying remotely sensed data to resource discovery, analysis, and management. Uni- Issues for the Future versity land remote sensing research is at a low ebb in this country,72 ;n large part be- It is evident from the earlier summary of for- cause Federal research funds have dried up eign systems that other countries, building on the prematurely. If the market for land remote experience gained from U.S. applications tech- sensing data were strong, research funding nology as well as on their own capabilities, see for applications would likely be forthcom- the development of the full range of remote-sensing from the private sector in support of its ing satellites as an integral part of their entry into needs. However, the lack of high demand space. In addition to constructing systems that for data, caused in part by the uncertainty will be competitive with the U.S. Landsat system, over whether land remote sensing activities they are also engaged in extensive research on will continue, has led to reduced private how to apply the data. funding for applications research. Neither Private sector efforts. The success of the pri- NASA nor NOAA now have strong land re- vate sector in developing a competitive remote sensing research programs, although mote sensing system may well depend on the Land Remote Sensing Commercialization the strength and longevity of Government Act of 1984 authorizes both agencies to con- support. Such support could consist of one tinue such research. It is clear, however, that or more of the following: a direct subsidy, successful commercialization will depend on such as has been authorized in Public Law developing a large variety of methods to turn 98-365, support in the form of a guaranteed remotely sensed data, especially the high- annual Government purchase of data (spe- resolution TM data, into useful information. cifically prohibited in Public Law 98-365), tax The decline in U.S. research has taken place benefits, and/or in continued Government at the same time that other nations are de- research. Although NASA has a program to veloping new remote sensing systems and develop a variety of advanced sensors that increasing their research funding on remote- would be tested on the relatively short Shut- sensing applications. These nations are build- tle missions, the Government has announced ing on the substantial investment that the no plans to develop civilian operational sys- United States has already made in remote tems that would provide data over the long sensing applications.

"For a discusstor, of using TM data effectively, see Remote Seising "See, for example, Remote Sensing and the Private Sector, op. and the Private Sector, op cit , pp 62-65 cit , pp 60-61, app C

3 99 302 International Cooperation and Competition in Civilian Space Activities

OCEAN REMOTE SENSING

Observations from space devoted specifically border on the oceans, and especially to those that to understanding ocean phenomena were first maintain large commercial or military fleets. made visually and photographically by the Mer- Whether they are primarily concerned about ac- cury program astronauts in the 1960s. Later, infra- tivities within the 200-mile economic zones or red radiometers incorporated on the meteorolog- have a wider interest in the oceans, all of these ical satellites provided considerable ocean data countries would benefit from data derived from that were later supplemented by data from a space-based ocean observations delivered prompt- microwave instrument aboard Skylab in 1973. In ly and continuously. 1978, NASA launched Seasat, the first dedicated ocean remote sensing satellite, which demon- A few countries, notably Canada, Japan, and the European nations (under the auspices of the strated the feasibility of using microwavesensors aboard a spacecraft. Although it failed premature- European Space Agency) are now planning civil- ly, the experimental Seasat returned massive ian satellite systems specifically dedicated to amounts of highly useful data to scientists (table ocean observations. The Soviet Union has flown 7-12) and demonstrated that a dedicated ocean- several dedicated civilian-military oceanographic ographic satellite would serve the needs ofcom- satellites. In the United States a joint civilian- mercial and scientific interests and Government military National Oceanic Satellite System (NOSS) agencies. was proposed for launch in 198673 but was canceled when projected program costs rose to more Because the ocean environment is constantly changing and potentially dargerous, its behavior "Technology and Oceanography, U S Congress, Office of Tech- is of considerable importance to all countries that nology Assessment (Washington, DC OTA-O-141, June 1981).

Table 7.12.Geophysical Oceanographic Measurement Design Capabilities for SeasatA

Precision Measurement Sensor Range /accuracy Resolution, km Geoid 5cm-200m Altimeter Topography Currents, surges, etc 10cm-10m t 20cm 1 6-12 Surface winds Amplitude Microwave radiometer 7-50mIs t 2m/s OR t 10% 50 3.25m/s t 2mis OR 10% Scatterometer Direction 0-360 ° t 20° 50 Height Altimeter 0.5-25m t 0.5 TO 1 Om 1 6-12 OR t 10% Gravity waves Len Oh Imaging 50-100m t 10% Direction radar 0-360° t 15% 50m Relative V & IR -2.35° C 1 5° Surface Absolute radiometer Clear weather 2' - 5 temperature Relative Microwave -2.35° C 1' Absolute radiometer All weather 1.5° 100 V & IR radiometer 5km - 5 Extent Microwave radiometer 10-15km 10-15 Sea ice t 25m 25m Leads Imaging radar 50m t 25m 25m Icebergs 25m t 25m 25m Shores, clouds' V & IR radiometer Ocean islands - 5km -5 features Shoals, currents Imaging radar t 25m 25m

Atmospheric Water vapor Microwave I ±25m 50 corrections & liquid radiometer

SOURCE National Ocednl. and Atmospheric Administ at ion

3 10 Ch 7Remote Sensing From Space 303 illan three-quarters of a billion dollars. No civil- Figure 7-18.The SeasatA Spacecraft ian operational ocean satellite is now planned, but the U.S. Navy is developing the Navy Remote Ocean Sensing Satellite (N-ROSS) for launch in 1989. NASA is planning a research satellite (TOPEX/ POSEIDON), with French participation, to measure ocean topography. This section briefly summarizes the status of ocean observations from space and explores the international issues related to ocean remote sensing.

U.S. Oceanographic Systems The technologies necessary for the complement of instruments required for an operational ocean remote sensing system are available and have been tested on a variety of U.S. satellites. Seasat-1978. Built by NASA to explore the utility of a satellite devoted to measuring ocean dynamics and topography, Seasat (fig. 7-18) lasted only 3 months. However, it returned data of considerable scientific and operational use. SOURCE: National Aeronautics and Space Administration Nimbus-1964-85. The Nimbus series of research satellites were designed by NASA to of ocean topography from latitudes 63° test new sensors for generating ocean and north to 63° south. Accurate altitude meas- meteorological data and to collect data of urements could lead to better understand- scientific inti2rest. Nimbus-7, the latest in the series, which was launched in 1978, is still ing of ocean topography and dynamics, tides, sea ice position, climate and seafloor operating. It carries a Scanning Multichan- topography, among other ocean-related nel Microwave Radiometer (SMMR) that pro- qualities.74 TOPEX is planned as a new start vides measurements of sea surface temper- for fiscal year 1987 and would be in orbit atures, and a Coastal Zone Color Scanner (CZCS) that provides a measure of biologi- from 1990 to 1993 or later. This schedule cal productivity of the ocean. would allow altitude data to be gathered at the same time N-ROSS (U.S. Navy) and ERS- TOPEX/POSEIDON-1990. NASA has pro- 1 (ESA), which would fly similar orbits, would posed to operate, in a joint U.S./French proj- be sensing data on other ocean parameters. ect, a research satellite devoted primarily to ERS-1 would generate topography data of highly accurate measurements (to an accuracy of about 2.0 centimeters) of the height lower accuracy but it would reach higher latitudes than TOPEX. Together, data from of the oceans. The satellite would also carry the two satellites would provide considerably a microwave radiometer in order to correct more information on ocean topography than for the effects of water vapor in the atmos- either satellite could alone. phere. France would supply a solid-state altimeter and a radiometric tracking system. The altitude of the ocean is crucial to under- 74"Satellite Altimetric Measurements of the Ocean," Report of the TOPEX Science Working Group, NASA, JPL 1981; Richard standing patterns of ocean circulation. The Afield, "The Shape of Earth from Space," New Scientist, Nov. 15, satellite's orbit would allow determination 1984, pp. 46-50 311 304 International Cooperation and Competition in Civilian Space Activities

:3 144..) Ch. 7Remote Sensing From Space 305

Metsats. The operational meteorological sat- visible and one infrared (IR) wavelength ellites, including the DOD DMSP satellites, bands. It will also carry a microwave scan- have carried instruments that measure ocean ning radiometer and a variable-resolution parameters of interest to those who study, radiometer (900 to 2,700 meters) with one use, explore, and exploit the oceans' re- visible and three thermal IR bands. Although sources. Table 7-13 lists the measurements this satellite is being developed primarily for from satellites that are of particular utility to ocean sensing of wave heights, ocean color, oceanic concerns. and temperature, these data will also be use- Navy Remote Ocean Sensing System (N- ful for land remote sensing. Japan is also ROSS). N-ROSS is under development by the planning a land remote-sensing satellite (ERS- Navy; as currently configured, the system 1), which it expects to launch by 1990. It will would employ one satellite (fig. 7-19) de- carry a synthetic aperture radar. It has not ployed in polar orbit, having a design life of yet announced plans for distributing or sell- 3 to 4 years. Although it is designed to sense ing data from MOS-1 or ERS-1. parameters of direct interest to the operation- European Space Agency (ESA) Remote Sens- al needs of the Navy (tables 7-14 and 7-15), ing Satellite (E RS-1)-1987/88.75 This satel- the data it returns will also benefit civilian lite is planned primarily for passive microwave users of the ocean. NOAA plans to collect sensing of the coastal oceans and weather over and distribute these data (except for certain the oceans. In add :ion, it will carry a syn- classified information) to the civilian com- thetic aperture radar for active microwave munity. sensing of ice topography or land masses through any cloud cover. However, because Foreign Systems of inherent limits of available power aboard the spacecraft, its use over the Arctic regions Japan Marine Observation Satellite-1 (MOS- 1)-1986. MOS-1 will carry sensors capable 7,A Haskell, "The ERS-1 Programme of the European Space of resolving objects 50 meters across in three Agency," ESA Journal, vol. 7, 1983, pp 1-14.

Table 7.13.Measurement Needs for Oceanographic Satellites

Precision Measurement Range accuracy Resolution Spacial grid Temporal grid Geoid 5cm200m t 10 cm 10km ,Weekly to monthly_ Topography Currents, 10cm-10m t 10cm 10-1000m 10km Twice a day to surgesretc 5-500c m/s t 5cm/s weekly Open ocean 10-50km 50-100km Surface winds AmplitudeClosed sea 3-50m/s ± 1 TO 2m/s 5-25km 25km 2-8/d Coastal OR I 10% 1-5km 5km Hourly Direction 0-360° t 10-20' Height 0.5-20m t 0.5m 20km 2.8/d OR t 10-25% Grafity .naves Length 6-1,000m t 10-25% 3.50m 50km 2.4/d Direction 0-360° t 10-30 Open sea 25-100km 100km Daily to weekly Surface Closed sea 2-35°C 0 1-2'relative 5.25km 25km with spectrum of temperature Coastal D 5.2° absolute 0.1-5km 5km times of day and times of year Extent and age 6 mo yrs 1.5km 1.5km 1.5km weekiy Sea ice Leads 50cm 25m 2r.n 25m 2-4/d Icebergs 10cm 1.50m 1.50m 25m

SOURCE National Oceanic and Atmospheric Administration 313 306 International Cooperation and Competition in Civilian Space Activities

Figure 7.19. Navy Remote Ocean Sensing Satellite (NFloss)

*.illor AWVILV 11,1NVII.N4W ',INNIL\- SOURCE U S Navy

Table 7.14 N-ROSS Sensor Capabilities

Sensor Parameter measured Capability Heritage Scatterometera Wind speed 1.3 M/S (range 4.26 M/S) Modified from Seasat; Wind direction 16° improved wind direction Altimetera Altitude 8 cm (when H 113 s5M) Same as GEOSAT Significant waveheight (H 1/3)0.5 m altimeter Wind speed 2 M/S Microwave Imager (SSM/I)b . Surface wind speed ±2 M/S (25 km resolution) DMSP instrument; high frequency for ice Ice edge ±12.5 km (25 km Edge better than Seasat resolution) Precipitation ±5 mm/hr (25 km SMMR resolution) Low Frequency Microwave Radiometer (LFMR)cd Sea surface 1.0° New device with higher temperature 2.5 km resolution resolution than SMMR aSeasat type sensor bAF/Navy DMSP sensor CNew sensor dDual Frequency Sensor (5 and 10 GHZ) to be flown as a companion sensor to the SSM/I SOURCE RCA Astro-Electronicb

may be limited. It is the first of a planned se- ada's natural resources, the satellite will pro- ries of three satellites to be launched by ESA. vide C-band radar images of Earth's surface. It is not yet clear how data from this satel- Its primary sensor will be capable of being lite are to be distributed to other countries pointed and will have a spatial resolution of (see issues section below). about 30 meters. Because it will operate at Canada Radarsat-1990. Under develop- microwave rrequencies, it will be able to ment by Canada for routine observations of gather information on the surface of Earth polar sea ice, as well as assessments of Can- through cloud cover. Data from this satei-

3 1 4 Ch 7Remote Sensing From Space 307

Table 7.15.Oceanographic Data Tactical Operations

Data /Instrument Oceanographic Product Fleet Tactical Applications Sea Surface Windsl(Scatterometer, Altimeter. Microwave Imager) Sea Surface 1.1 Field Flight Forecasting Analysis Ship Routing Wave and Surf Forecasting mphibious Operations Swimmer OPS Underway Replenishment Cruise Missile Support Surface Ambient Noise (ASW) Radar and ECM Range Predictions Sea Surface Temp./(Low frequency microwave radiometer) Ocdan Thermal Location of Potential Hiding Places Structure Analysis For Submarines (Friendly and Unfriendly) Map cf Fronts and Eddies ASW Support: Sonar Range Predictions Weapons Settings Sonobuoy Spacing Sonar Tow Depths Artoustic Routing of Surface Ships and Submarine Ice/(Microwave Imager) Polar Ice Field Analysis Submarine Surfacing Information Navigation Information SOURCE RCA Astro-Elctronics

lite will be available for direct sale or by ar- Major Ocean Parameters of Interest rangement through offset programs. In or- for Scientific and Applied Uses der to reduce its costs, Canada is seeking partners in this venture. The spacecraft will A satellite specifically designed for ocean ap- also carry a NASA scatterometer and an op- plications should produce timely, synoptic data tical sensor built either in the United States of extreme usefulness to researchers, to private or Europe. enterprise, and to governments. U.S.S.R. OceanogrIphic Satellites K... los The following selection of major ocean attri- 1500 (1983) and Kosinos 1602 (1984).'6 In butes indicates some parameters that satellites addition to a low-resolution scanner and a could measure successfully. microwave radiometer, Kosmos 1500 carried o side-looking radar that was used to assist Sea SurfaceTemperature So ,iet merchant ships trapped in the ice in the Chukchi and East Siberian Seas." Kos- Data on sea surface temperatures, gathered by r as 1602 presumably carries a similar com- the infrared radiometers aboard the meteoro- plement of instruments. Analysis of data re- logical spacecraft, have been available for two ceived from these satellites indicates quality decades. The maps of sea surface temperatures comparable to that of the U.S. Seasat. produced from these data demonstrate complex surface temperature patterns that have led to considerable speculation about the physical proc- "Nicholas L Johnson,The Soviet Year in Space 1984," Tele- dyne Brown Engineenng, 1985, p 28 esses that might cause such patterns. Because "V Shmyganoviskiy, "A space Pilot for the Nuclear-Powered they reflect only surface effects (1 millimeter or Icebreakers," lzyeshya, Mo.,cow, Nov 6, 1983, p 6. TASS, Moscow, less) these data alone are of limited use in un- 23 Jan 19R4. "Soviet Cosmos Spacecraft Providing Lane, Sea Im- derstanding the physical processes of the deeper agery,' Av.ation Week and Sp-ce Technology, Nov 12, 1984, pp 212-213 layers of the ocean. Yet, higher resolution meas-

:315 308 International Cooperation and Competition In Civilian Space Activities

urements of water temperatures at the surface, coupled with observations of surface winds ano estimates of evapGration and rainfall, would provide better information on heat transport of the oceans.78 In addition to their scientific interest for climatological studies, many of these physical processes are of interest to the users of the ocean.

Ocean Color The polar-orbiting satellite Nimbus-7, launched in 1978, carries a Coastal Zone Color Scanner (CZCS), which measures spectral radiance from ocean waters in thermal, near-infrared, and four visible wavelength bands. Among other considerations, the optical bands were selected according to the optical properties of chlorophyll. The infrared bands provide data on coastal and ocean current temperature. Although no operational sensor is now funded, experiments with the CZCS aboard Nimbus-7 have demonstrated79 that the data from such a sensor are potentially of cc siderable utility in locating areas of fish a. dance. A recent report88 urged the development of an Ocean Color Imager to start in fiscal year 1987. Such a satellite would yield important scientific information on understanding biological productivity in the oceans.

Sea Ice Whether from concern for locating and tracking icebergs as they cross shipping lanes, or from desire to understand the direction of ice type, extent, and drift in polar regions, interest in the distribution and condition of sea ice has increased in recent years (table 7-16).8' Visual observations of sea ice are now collected by the Multispec- tral Scanner (MSS) and Thematic Mapper (TM) sensors aboard Landsat 5 and by the Very High

"Brethaton Francis P., "Climate, the Oceans and Remote Sens- Photo criKM: U.S.S.R. Hydromet Off km ing," Oceans 24, No. 3, pp 48-55, 1981. "'The Marine Resources Experiment Program, (MAREX)," Re- Images of hurricane Diane off the coast of North port of the Ocean Color Science Working Group, NASA-Goddard Carolina received from the Soviet Cosmos-1500 Space Flight Center, December 1982. satellite (Sept. 11, 1984). The Iefthand image is from ""Oceanography From Space. A Research Strategy for the Dec- a multichannel scanner. The rlghthand one Is from a ade 1985-1995," Report of the Joint Oceanographic Institutions, side-looking radar operating at 3 cm wavelength. They Washington, DC 1984 were given to NESDIS by engineers at Hydomet "'W F Weeks, "Sea !ce. The Putential of Remote Sensing," in Moscow. Oceanus 24, No. 3, pp. 39-47, 1981

31 6 Ch. 7Remote Sensing From Space 309

Table 7.16.Ice Parameters of Importance In Different Operations and Research Areas

Area of interest Pertinent ice parameters' Offshore operations Extent, type, thickness, drift woocity, internal stress, properties (air temperature, atmospheric pressure, wind velocity, current velocity) Climate Extent, thickness Albedo Extent, type, snow cover Insulation Type, thickness, snow cover (air temperature, wind velocity) Latent heat export Thickness, drift velocity Surface stress Drift velocity, top and bottom ice roughness (wind velocity, current velocity) Ocean mixed layer Ice growth and ablation rates, drift velocity (current velocity, water-column stability) 'TM parameters In parentheses are also Important, although they are not directly . ,lasted to ice. SOURCE W F Weeks, "Sea ice TM Potential of Remote Sensing," Oceanus 24, No 3, 1961, p. 41.

Resolution Radiometer (VH RR) on the NOAA-N a synthetic image of Earth's surface. Such systems series satellites. Although highly useful for deter- are an outgrowth of aircraft side-looking aperture mining the extent of ice cover and ice flow, these radar systems; an L-band SAR was demonstrated data are limited by cloud cover and by darkness on Seasat (fig. 7-20). However, before such an (at those times of year when the Sun is not visi- instrument could become operational, methods ble at high latitudes). Further, the Landsat data are limited by lack of daily coverage, and the Figure 7-20.RadarImage of Kuskokwim Bay NOAA-N data are limited in spatial resolution. in Alaska Thermal infrared measurements made by the A II E F OH VH RR infrared sensor on the NOM-N satellites have some usefulness for determining sea-ice thickness. Although the instrument is limited by cloud cover, it is not limited by lack of sunlight; it is highly useful for low resolution, large-scale measurements of ice movement and extent. Microwave systems have the advantage that the frequencies at which they operate are limited by neither clouds nor darkness. Both passive and active (radar) systems can be used for mapping and monitoring sea ice, but the passive system suf- fers from the highly limited resolution available from the relatively small antennas that can be carried aboard a satellite. Nimbus-5 and Nimbus-7 carried passive microwave radiometers. No microwave measurements of sea ice are now being taken by the United States. An active system based on the synthetic aperture radar principle could overcome the prob- aokm N\ illukaNATiON lem of low resolution at the price of having to --temecnoe handle high volumes of data. A Synthetic Aper- As the Kuskokwim River flows Into the Bering Sea, It forms large sediment deposits In Kuskokwlm Bay, which are visi- ture Radar (SAR) would achieve relatively high ble as small dart area separated by channels (bright areas). resolution along the line of sight at an angle to SOURCE: Lae-Luang Fu and Bertiamln Holt, "Smut Views Otatens and Sea los the nadir by using the satellite motion coupled with Synthetic-4mM, Rader," NASA Jet PrObutercic Lalielltcri Pub. with digital signal processing techniques to create °canon 81.120, Feb. 15, 1952, p. 98.

3317 310 International Cooperation and Competition in Civilian Space Activities

would have to be developed to process the data Marine Transportation rapidly and turn them into useful products. As In ship routing, the most critical parameter to noted, Canada and ESA will include an SAR in- measure is sea state (wave heights). However, strument on their satellites, Radarsat, and ERS-1. winds, currents, fog, rain, etc., are also impor- A satellite altimeter and a scatterometer are two tant. One report suggested that reliable data and other examples of active radar systems that could analysis of sta state "can reduce ship transit time be used to measure ice parameters. An altimeter and therefore save a significant amount of fuel."82 (e.g., that planned for TOPEX/POSEI DON) could The experimental Seasat was used by a U.S. measure the height of the ice with a precision of a few centimeters. Data from a scatterometer ship routing company in studies that indicated:

would be used to determine ice roughness and .. .that the use of satellite-derived wind obser- the position of sea-ice boundaries. vations can be useful in more accurately locating low-pressure storm centers.his knowledge Wave Heights could reduce vessel transit distances and times.83 Knowledge of wave height and general wave Offshore Mining: Oil and Gas conditions at a variety of ocean locations is crucial Exploration and Extraction for the safety of ships at sea, and for ocean platforms. Data on waves are also important for Offshore mining firms could make considerable understanding and modeling ocean dynamics. use of ocean satellites because many of the areas Because winds create waves, measurements of with the richest resource potential are not located wind speed and direction over wide areas can in the major shipping lanes and thus are the most lead to estimates of wave height and condition. poorly observed by conventional means. The deep-ocean-mining industry now is using wind Applications of Ocean Remote and wave measurements from ship reports in designing equipment and formulating operating Sensing plans and schedules." Various experimenters Data from satellite remote sensing of the oceans have suggested that a better climatological infor- have the potential for providing information for mation base, which could be provided by satel- several important applications (table 7-17; table lite, would be put to good use in planning for and 7-18). The following examples illustrate the po- operating deep ocean mining projects. tential importance of these data. Oil and gas Dxploration and extraction companies could also use an improved ocean clima- Weather and Climate tological data base for selecting equipment, such The world's climate system is dominated by the as drilling rigs and supply vessels, and in plan- behavior of the oceans. Understanding and pre- ning offshore operations.* Perhaps the most im- dicting climate depends directly on understand- portant use of the satellite data is for improved ing ocean temperatures, currents, wave heights, weather warnings and status of ice information." sea level, and sea surface winds, ag well as other characteristics. Obtaining comprehensive, periodic, synoptic measurements requires a space- borne system. Although daily measurements from ships crossing the oceans or from ocean buoys 82Donald Montgomery, "Commercial Applicat.ons of Satellite are available to climatologists, sich measure- Oceanography," Oceanus 24, No 3, p. 58, 1981 "Ibid ,p. 59. ments are primarily limited to the -najor shipping "Ibid., p. 59. routes or to the coastal areas. The climate-related 'Oil and Gas Technologies for the Arctic and Deepwater (Wash- parameters of vast areas of the ocean remain un- ington DC U.S. Congress, Office of Technology Assessment, OTA- 0.270, May 1985). observed except on a sporadic basis. "Ibid., p. 60.

316 Ch. 7Remote Sensing From Space 311

Table 7.17.Possible Oceanographic Satellite Applications

Activity Application Offshore oil and gas Increased ocean forecast accuracy Exploration operations Seismic surveys Drill ships Towout operations Production operations Crew pcheduling Platform and crew safety Ice observations Ice dynamics for platform design criteria Ice movement for platform and crew safety Environmental data Replace platform instrumentation Subsurface and seabed dynamics Gas pipeline and applications Environmental forecasting:Increased observations (particularly in Southern Hemisphere) Consistent observations Wave-height measurements Wind averages Marine transportation Increased ocean forecast accuracy Optimum routing Port scheduling Ice observations Arctic resupply Vessel/personal safety Deep-ocean mining Increased ocean forecast accuracy Mining operations Improved tropical storm, storm-track prediction Mining operations and safety Historical data base Unbiased climatology Mining equipment design Operational criteria Marine fisheries Increased ocean forecast accuracy Efficient search efforts Efficient gear operations Reduced gear losses Crew and vessel safety Ice observations/forecasts Gear losses Crew and vessel safety SOURCE D R Montgomery, "Commercial Applications of Satellite Oceanography," Oceanus 24, 1961, pp 5745

Table 7-18.impacts of Observed Parameters on Commercial Benefits

Measurement Parameter Sea Surface Application WindWavesTemperature Ice Ocean Fishing High High High Low Marine Transportation High High Lows Low° Oil and Gas Exploration and Development High High Low Highc Arctic Operations High High Low High ',High in regions where sharp temperature gradients indicate currents bDepentioncy low for present trade routes, will increase with the movementsof arctic resources using ice breaker* CHigh only in ice prevalent regions SOURCE RCA Astro-Electronics

319

38 -797 0 - 85 - 11: QL 3 372 International Cooperation and Competition in Civilian Space Activities

Surveillance and Enforcement distribution and abundance of certain kinds With the recent extension of coastal economic of marine organisms, especially those that zones to 200 miles, all coastal countries, and spend some portion of their life cycle in the especially developing ones, would benefit from estuarine areas. better surveillance and enforcement programs. Sea state (wave heights). Sea state becomes Surveillance of cooperative targetsthe monitor- an important indicator for current systems ing of boats legally within a country's 200-mile when temperature, salinity, and other prop- economic zonecould be done using the ARGOS erty gradients are negligible. Because current system on TIROS-N. This system could monitor systems delineate areas of more or less fish cooperative vessels (i.e., those with an appropri- productivity and may also possess different ate transmitter aboard) -nd enable a host gov- sea states, the measurement of sea state may ernment to supervise their fishing activities. An correlate with fish catch. uncooperative or illegal foreign fishing vessel, Water color and chlorophyll concentrations. however, must still be apprehended by aircraft Water color variations indicate the bound- of ocean patro1.86 aries of niajor current systems. More important, water color has long been used in- Fisheries directlyas an indicator of biological productivity. Detection of water color is pri- Indirect measurements of environmental fac- marily used to detect shifts of marine orga- tors which affect the distribution and abundance nisms, especially those that spend some por- of the resource, both temporally and spatially, tion of their life cycle in the estuarine areas. can be used to indicate areas of high yield. How- Pollution. Pollution may be considered as ever, using satellite data for commercial fisheries an indicator of areas in which fish are not requires that two links be made: 1) fish availabil- present. It may also indicate where fish and ity must first be correlated with environmental their environment might be endangered. and/or ocean attributes, teen, 2) environmental Slicks, foam, and debris lines may also in- and/or attributes detected from the satellite must dicate current convergence zones, which lead to information about the potential available may be areas of high productivity. food supply. Surface objects. Surface objects of interest The following environmental pt rameters relate that may be detected include vessels, buoys, to the distribution and abundance of ocean fish: offshore oil platforms, weed-debris lines, marine mammals (whales, porpoises), bio- Sea surface temperature. Sea surface tem- luminescence, and fish schools on or near perature may be directly related to the dis- the surface. tribution and abundance of marine orga- Other factors. Other environmental data are nisms. For instance, studies of Pacific tuna important, including water clarity and cur- have demonstrated strong correlations be- rent patterns, but these are usually inferred tween tuna catch and water temperature. from the parameters listed above. Also, strong temperature gradients may indicate the edges of warm and cold watersys- Issues in Ocean Remote Sensing tems. These edges or boundaries usually define currents and mark areas of increased What Are the Research Needs for pelagic fish productivity. Ocean Remote Sensing? Sea surface salinity. Although sea surface There is a strong continuing need for research salinity cannot be measured by satellite, into ocean phenomena, both to support ocean measurements of salinity help indicate the users (e.g., the maritime industries), and to in-

86Resources Development Associates, Feasibility of Surveillance crease our basic understanding of fundamental and Monitoring of Fishing Vessels in Papua New Guinea (Los Altos, ocean processes. Although humans have traveled CA RDA, January 1980) and studied the oceans since before recorded his-

3 Ch. 7Remote Sensing From Space 313 tory, our ability to predict future ocean behavior tinuous access to the data from these systems. is severely limited by lack of knowledge of how Most important, sublantial cooperation could as- the ocean works and how to model its behavior. sure that the data the systems provide areuseful Understanding the oceans more thoroughly will to the worldwide community of users. The result also require the collection and processing of vast of cooperation and coordination could be a sys- amounts of data, both from surface observations tem that is of far greater utility than any one na- and from satellites. tion could provide on its own. NOAA is expend- ing considerable energy to increase cooperation, The problems of understanding the dynamics not least because cooperation may enable the of the ocean are similar to those of understand- United States to spend less on its own data col- ing the dynamics of the atmosphere. The oceans lection systems. and the atmosphere are both fluids that are heated and cooled by complicated processes and Opportunities for cooperation occur in the fol- strongly affected by thermal flows from the land lowing areas: masses. Major changes may occur over scalesof Coordination of Equator crossing times and hours, days, weeks, or even years. The ability to repeat cycles. N-ROSS is designed to have predict future behavior of the oceans requires a 2-day repeat cycle for measurements. ERS- knowledge of the ocean as it is at any given mo- 1 will also pass over the same locations every ment, and how it changes over time. Predictions 2 days. If the orbital parameters of both sat- also require the ability to model ocean behavior ellites could be properly coordinated, bein large computers and compare those results cause the sensor complement of the satel- with observations. Satellites are particularly useful lites overlaps to a considerable extent, it for gathering much of the necessary data because would be possible to achieve daily global they provide a synoptic view of the oceans at pre- ocean coverage. Such coordinationwould dictable repeat intervals. Observations from ?hips, affect neither the cost nor the national ob- although extremely important in verifying satel- jectives of either satellite system, but could lite records, are scattered both in time and space, nearly double their value to the participants, and provide poor data sets for modeling ocean if all the data are shared freely." behavior. Ocean buoys, though useful for col- As future systems are designed, coordina- lecting important data, are necessarily few in tion of the Equator crossing times for satel- number and widely scattered throughout the lites could also lead to similar benefits. For oceans. example, measurements of ocean color, solar radiation, and ozone content require high How Can We Make the Best Use of the Sun angles, and are therefore best taken near Space Assets of the United States and noon. of Other Countries to Increase Our Cooperation on future satellite missions. As Knowledge of the Oceans? experience is gained with the planned oper- As noted earlier in this section, Canada, Japan, ational and research satellites, potential co- and the European Space Agency are designing operative missions will begin to suggest or building ocean-related satellite systems that are themselves. It appears to be in the best in- expected to be operational within the next 5 terest of the United States to continue a va- years. The Navy N-ROSS system, the data from riety of cooperative programs in order to: 1) which will be distributed to the civilian commu- save money on building research andappli- nity through NOAA, is likely to be operational cations systems, and 2) increase the available in the same time period. This is one area in which scientific and operational knowledge base the increased ability of other countries to com- about ocean processes. pete with the United States technologically by building space systems can lead to closer cooperation. Close cooperation and coordination ""Utilization of the Polar Platform of NASA's Space Station Pro- among countries could provide timely and con- gram for Operational Earth Observations," op. cit.(fn 37).

321 314 International Cooperation acd Competition in Civilian Space Activities

Building an international polar-orbiting Others, relating for example to sea ice position, platform. The Europeans have shown con- may change more slowly and allow a time lag siderable interest ;n providing instruments or of several hours or even days for distribution. funding for an international system of meteorological satellites (see metsat issues above). The need for timely delivery of data is as impor- They and the Japanese have also indicated tant for research scientists as it is for commercial interest in supplying some part of a space sta- or Government applications. Sensor character- tion. Polar-orbiting platforms that could pro- istics change with time and require recalibration vide a variety of atmospheric, land, and if the data collected are to be of use to the re- ocean measurements would seem to provide searcher. Data stored for long periods before their fertile ground for future international coop- intended use may well be unusable because the eration in remote sensing.88 user was unaware soon enough of small changes in sensor characteristics. What Needs Are There for Collecting, Large-scale experimental programs such as the Processing, and Distributing the World Climate Research Program, components Primary Data From Satellites? of which include the Tropical Ocean Global At- The ground receiving station, and the data mosphere Program and the World Ocean-Circu- ordering, processing, and distribution facilities are lation Experiment," or the International Geo- as important to the user of satellite data as are sphere-Biosphere Program (IGBP)," will generate the satellites that gather the data. Therefore, when large amounts of data from space that rr ust be the funding for ocean remote sensing systems is sifted, analyzed, and integrated with related data considered, it is extremely important to include gathered at the surface, before being used in ex- sufficient funds for these ground-based functions, perimental models of the oceans and the atmos- because NOAA must be capable of supplying phere. This process will require sufficient archiv- unenhanced data reliably and effic 2ntly to the ing of corrected historical data, and the ability user. Some data, such as the position and strength to access them efficiently. of a large ocean storm, are highly time-dependent ""Oceanography From Space: A Research strategy for the Dec- and are of no use to the operational user unless ade 1984-1995," op cit. supplied immediately after being gathered. ""Toward an Irternational Geosohere-Biosphere Program: A Study of Global Change," Report of a National Research Council Workshop, Woods Hole (Washington, De National Academy "OA Press, July 25-29, 1983).

REMOTE SENSING POLICY

The treatment of current U.S. systems for re- analysis of such an integrated approach is beyond mote sensing from space presents a particular the scope of this report. coallenge to policymakers. Although land,ocean, and meteorological remote sensing use related Policy options for guiding the direction of U.S. technologies to produce data, for the most part meteorological satellite systems exist primarily in they still serve different constituencies. Conse- the context of cooperative ventures in space, be- quently each requires a different policy treatment. cause these spacecraft sense large-scale condi- Further, the three systems have different econom- tions that generally transcend political bound- ic, political, and social characteristics. As the data aries. Small-scale surface features and most signs from these systems find greater use, and their ap- of human activity do not appear in images pro- plications increasingly overlap it may be possi- duced by metsat sensors. Economic value lies pri- ble to integrate the systems, perhaps onan astro- marily in the data's use in predicting severe naut-tended polar-orbiting platform.91 However, weather and climate trends." Earth resources re-

"See, for example, the discussion in "Utilization of the Polar Plat- "See, for example, the discussion of "El Nino in the Southern form of NASA's Space Station Program for Operational Earth Obser- Hemisphere and Its Effects on the Northern Hemisphere," Remote vations," op cit(fn 37). Sensing and the Private Sector, op. at, App. I.

32... r.,,9 Ch. 7Remote Sensing From Space 315 mote sensing systems, whether for land, coastal to U.S. citizens and other nations at no cost (or regions, or the oceans, are specifically designed at cost of reproduction), while continuing to fly to be used for assessing, managing, and exploiting sensors of other countries. The two systems cost renewable and nonrenewable resources. The about $7.4 million in fiscal year 1984 to operate. data collected therefore have direct economic Each new polar-orbiting satellite will cost about consequences for the sensed country. Conse- $100 million to build and $30 million to $50 mil- quently, the following policy treatment discusses lion to iaunch.95 each system independently. As argued in the next option, this course of action would have the advantage that it would Meteorological Remote Sensing maintain the same data flow that the United Policy States and other countries have experienced in the past, with the consequent benefits that flow Because weather data collected in one region from access to such data. It would have the dis- of the globe are of interest to other regions, the advantage of not contributing to a reduction of nations of the world, even in time of war, have the budget deficit. at least since 1853 treated the gathering and distribution of weather data as a cooperative ven- Operate Only One Polar Orbiter ture. The primary means of cooperation among nations with respect to meteorological satellite In its effort to reduce the Government's budget systems has been the sharing of data. deficit, the Administration has repeatedly tried to reduce the number of polar orbiters from two Cooperation to one. Eliminating one of the polar orbiters would reduce the coverage of the system from Four primary policy options are possible: 1) once every 6 hours to once every 12 hours for maintain the status quo in polar - orbiting systems a particular spot on the Earth. For most of the and continue to cooperate in providing data to United States, a reduction in service would not the global meteorological data exchange; 2) cause a serious decline in the ability to predict maintain the form of our cooperation, but reduce severe weather. Conventional data collection sys- the quantity and quality of data supplied to other tems and the geostationary satellites provide suf- countries by operating only one polar orbiter;" ficient information. For Hawaii, Alaska, Ameri- 3) increase our cooperation with other countries can Samoa, Guam, and the Pacific Trust Territo- by engaging in additional cooperative projects; ries, however, the 6-hour repeat coverage that and 4) increase the sharing of data from the geo- two polar-orbiting metsats supply is extremely im- stationary satellites with our Western Hemisphere portant for timely warning of rapidly changing partners. weather conditions. None of these areas has access to surface data for the predominantly west- Maintain Status Quo to-east weathcr patterns." The United States normally operates two civil- Operating only one civilian polar orbiter would ian polar orbiters and two geostationary satel- reduce the data available to DCD. Though it has lites." It could continue to operate both systems its own system of meteorological satellites (De- and cooperate as in the past by supplying data fense Meteorological Satellite Program or DMSP), DOD makes extensive use of the civilian system, "A fifth potential option of reducing our cooperative efforts in both to provide data at different times of the day, meteorology by reducing our participation in the WMO is infeasi. ble because the United States would therefore likely lose access to some data it now receives from foreign surface stations "These figures are approximate and depend highly on the num- "Note that only one geostationary satellite is now operating ber of satellites contracted for in a single purchase agreement, the NOAA plans to launch a replacement for the failed GOES-5 in late number and type of new sensors that are flown, inflation, and future 1985 or early 1986 See W. Mitchell Waldrop, "A Silver Lining for launch prices. the Weather Satellitesr " Science, vol. 226, pp. 1289-1291, for a "Because the primary weather flow in the Northern Hemispher,* summary of the state of technological and political affairs of the is from west to east, information gathered to the west of a geographic U S. meteorological satellite systems. area is especially important for weather predictions

34)34, 316 International Cooperation and Competition in avillan Space Activities

and to act as an emergency backup to the mili- the world because of its frequent coverage. A sin- tary system. The DMSP can provide a backup of gle polar orbiter would result in markedlyre- sorts for the civilian satellite. However, because duced weather coverage (fig. 7-10). the characteristics of the data from the DMSPare somewhat different from those supplied from the The United States has suggested to the other civilian system, its data cannot be used directly OECD nations that: in forecasting models. ...unlike the situation that existed when the Nations that depend on metsat data and have United States initiated the meteorological satellite system, it is now possible for subsystems, sy:, purchased receiving stations have expressed their tems, and entire satellites to be built, launched, dismay that the United States might operate only and operated by numerous organizations in a single polar orbiter. Such a course of action many countries. The satellites and instruments would save less money than it mightappear be- are well understood. The data standards that are cause the cost of purchasing and operating two necessary for worldwide distribution and use of polar satellites is much less than twice thecost satellite data are in place and thoroughly devel- of operating one. NOAA estimates it wouldsave oped. Interoperability of space systems or sub- less than $25 million yearly. systems can be readily achieved through procedures that many countries have applied." The U.S. polar orbiters carry theemergency beacons used in the COSPAS/SARSATcoopera- NOM representatives have briefed represent- tive program with Canada, France, and the atives of other nations about U.S. views on the U.S.S.R. Until October 1984, the system had desirability of jointly providing the second polar been operated as a demonstrationprogram. orbiter. A joint program would reduce U.S.oper- However, in October 1984, the Administration ating costs and increase U.S. cooperation with signed an agreement with the participatingcoun- other countries. tries to continue the program on an operational At the June 1984 Versailles Economic Summit, basis, therefore committing the United States for delegates agreed to discuss cooperating in satel- the immediate future to maintain two polar-or- lite remote sensing and established the Interna- biting metsats for the COSPAS/SARSATprogram. tionalPolar-Orbiting Meteorological Satellite The SARSAT receiver could be flownon a sepa- group (IPOMS), the members of which unani- rate small satellite (at an unknown cost), so this mously agreed on the need for two polar orbit- agreement does not guarantee continuation of ers.99 Foreign participants were willing to accept two polar-orbiting metsats. more of the financial burden of an advanced polar-orbiting system and to fund new instru- Joint International System ments for it. for Polar Orbiters An agreement to cooperate in building and The only other nation to operatea polar-orbit- maintaining a multinational polar-orbiting system ing meteorological satellite is the Soviet Union. would constitute a marked change in the form The two U.S. polar-orbiting satellites provide to- of international cooperation in meteorological tal global coverage and are the principal source systems. Heretofore, with the exception of two of meteorological data from 80 percent of the foreign sensors flown on U.S. polar orbiters, data, globe. They also provide coverage for the high not sensors, have been shared. latitude regions, which are not covered by the geostationary satellites,9' and for which conventional measurements are particularly sparse. The ""Internatiot al Cooperation in Polar-Orbiting Meteorological Sat- ellites," NOM, Apr. 19, 1983. two-orbiter system benefits all the countries of ""Dual Polar Satellites Draw International Support," AviatiGn Week and Spare Technology, Dec. 10, 1984, p. 27. Members of this group inck:de representatives from Austrialia, CanaJt France, 47Although the geostationary satellites can image the full disk of Federal Republic of Germany, Italy, Japan, Norway, the Commis- the Earth, their ability to make quantitative measurements ofex- sion of the European Communities, the European Space Agency, treme north and south latitudes is limited by the oblique angle at the United Kingdom, as well as the United States (NASA, NOM, which they sense Earth's surface at these latitudes and the Department of State)

32 ,1 Ch. 7Remote Sensing From Space 317

U.S. spacecraft manufacturing firms might lose from the polar orbiters, are already shared with some business as a result of such cooperation. the countries of the world. However, unlikethe On the other hand, if the choice were between data from the polar orbiters, their data benefit pri- international cooperation on a two polar-orbiting mai ily the countries of the WesternHemisphere. system and a domestic system of only one polar- Thus, in order to provide development assistance orbiting satellite, they could well do more busi- to many of these countries, and furtherWestern ness with an international system. Hemisphere relations, it may be in the long-term interest of the United States to supportbilateral Although the nations that might participate are or multilateral programs tomake better use of the able to contribute to this effort, the United States data from these satellites. Such programs could could face a question of undesirable technology take the form of joint research projects to inves- transfer. For certain advanced new sensors and tigate the effects of El Nino and other large-scale data processing technology, it would be impor- weather patterns that affect the Western Hemi- tant to structure the agreement so that no tech- sphere. nology vital to national security interests be transferred to other countries. Part of this concern Competition could be met by structuring the system in such a way that each countryprovided its own inde- There is no market for sales of primary metsat pendently developed sensors in accordance with data because, except for reproduction changes, mutually agreed-upon specifications. they are shared freely among nations."° What competition exists for meteorological satellite Sharing the Data From technology is for ground equipment, but that Geostationary Satellites market is extremely small and is likely to remain so in the future. The U.S. geostationary satellites are in a different category from the polar orbiters becausethey Competition for value-added services also ex- remain stationary over regions centered on the ists, but here again the total market is now ex- Equator. The data from these satellites, like those tremely small. The United States leads in processing metsat data. The value-added marketwill remain relatively small in the near future, but is likely to cont!nue to develop as techniques for using land and meteorological data for agricultural and hydrological purposes improve."'" In time, meteorological sensors will provide more wavelength bands, and have higher resolution; the value-added companies will become more sophisticated in their applications of the data. As a result, processed meteorologicaldata may begin to compete with the use of certain landand ocean remote sensing databoth in the United States and abroad.Ka This could be an important step toward an integrated U.S. remotesensing

loCountry satellite services organizations generally charge (at cost) for data that requires special processing, or for derived products. "'See, for example, discussion at the NOM-sponsoredconfer- ence, NOAA's Environmental Satellites Come of Age, Mar.26-28, 1984. Participants there shared techniques used to utilizeenviron- mental satellite data for a variety of tasks once reservedfor high Photo meet: Nation., Otoselo en 0 Atrnagewiria Admittleenslon resolution data. See also "Metsats Seen Competing with Landsats," Image of Hurricane Mien conferee, over the Gulf of Space Business News, May 21, 1984, p. 3. Business Mexico received from the GOES mitellite stationed 102"Metsats Seen Competing With Landsats," Space at 75° W longitude, Aug. 8, 1900. News, May 21, 1984, p. 3.

j ;2 5 318 international Cooperation and Competition in Civilian Space Activities

Landsat 4, artist's conception.

Geostationary Operational Environmental Satellite (GOES series), artist's conception.

Mato craft: Naomi Co..* and Moo Owl* Adminierstion NOAA series polar-orbiting environmental satellite, artist'sconception.

3 2 6 Ch. 7Remote Sensing From Space 319 system that would enhance the U.S. competitive will be met, and 3) whether sufficient demand position in remote sensing. for data will develop to build a viable market. Opponents of transfer generally believe the sys- Land Remote Sensing Policy tem should continue to be operated in the pub- The feature that most distinguishes Earth re- lic interest. They argue that the costs cf continu- sources remote sensing from meteorological re- ing to provide data are relatively small compared mote sensing is its potential for immediate use to the cost of putting the system in place. A few in assessing, managing, and exploiting Earth's re- observers believe that it is possible to operate a sources. The potential economic value of the data complete land remote sensing system without these systems supply has recently made them a Government subsidy.m4 However, they also point primary subject of competition between nations. out that this could not be done in competition Cooperative efforts, though potentially serving an with a Government-subsidized operation. important role, have lessened in importance with The following discussion views each policy op- the development of competitive foreign systems. tion from the point of view of how it would serve the overall public interest. The disposition of the Competition Landsat system is likely to affect overall U.S. com- The previous analysis in this chapter has shown petitiveness in space, international relations, and that the greatest current demand (in volume) for the development of the international market for land remote sensing data is for low-cost moder- land remote sensing data. ate-resolution (80-meter) MSS data delivered prorr.ptly and continuously. The current demand Options for Continued for expensive data is smaller.103 Most customers Financial Support today have neither the experience with high resolution (30-meter) thematic mapper (TM) data nor The Administration and Congress have decided the processing equipment. In addition, it is not that the public interest will be served by a phased clear that TM data or their equivalent will be cost transfer of the Landsat system to private owner- effective for many tasks. Except for the mineral ship. Although the Department of Commerce has exploration companies, which can make cost- chosen the EOSAT Corp. to operate the current Landsat system and to build two follow-on satel- effective use now of the more expensive TM data, relatively few users are willing or able to purchase them. This situation is likely to continue 1094Aost notable among these is Space America, Inc., which was one of the bidders to take over operation of the Landsat program. until: 1) customers gain confidence that TM or Space America's approach to land remote sensing is radically dif- comparable data would be cost effective; and 2) ferent from either EOSAT or Kodak. It has proposed building a sys- they also gain confidence that the data will be tem that would be less technically sophisticated than the current Landsat 5, but would be considerably cheaper and directly respon- available on a continuous, long-term basis. sive to customers' data needs. Operating at 40 meters resolution in 4 wavelength bands and providing stereoscopic data, its pro- Land remote sensing policy is at an important posed MLA-based satellite would be comparatively light and re crossroad. As discussed earlier, by creating Pub- quire little advanced technology development. It would also re- lic Law 98-365, the Administration and Congress quire relatively little or no Government subsidy. Space America is also developing a data processing system that would integrate committed the United States to transferring this satellite aircraft and ground-based data to produce new informa- technology to the private sector. Proponents of tion products. In proposing such a satellite system, Space America transfer hope that the private sector will even- is relying on the premise that the largest market for data will be for inexpensive, moderate resolution data targeted to customers' tually develop the technology into a self-support- seeds and combined with ground-based data. Its proposed system ing, commercial operation. However, it is unclear: has been criticized on the grounds that it does not maintain the 1) how much subsidy might eventually be needed, U.S. technological leadership in remote sensing. However, Space America is convinced that the greatest immediate need is to build 2) how future research and development needs a market for the data before moving to more advanced sensors that will generate expensive data. See Diane Josephson, statement at 103In the first half of fiscal year 1985, Thematic Mapper data gen- hearing before the Subcommittee on Science and Technology, of erated about 49 percent of the total Income of Landsat data sales the Senate Committee on Commerce, Science, and Transportation, from the EROS Data Center Mar 22, 1984, S Hrg. 98-747, pp. 78-82. 327 320 International Cooperation and Competition in Civilian Space Activities

lites, and has reached agreement on the contract self fail. (On Landsat 4, when the antenna for the terms (including amount of subsidy), it will still TM failed, it was still possible to receive MSS data be necessary for Congress to monitor the proc- through an entirPly separate system.) Finally, the ess of transfer over the long term. rate of data processing planned for the facility at If EOSAT is able to operate the current system Goddard Space Flight Center has never been reached for the extended periods of time for a period long enough to inspire customercon- neces- fidence, to provide data promptly at reasonable sary for developing a high-vo'dme market. costs, and to establish a strong market for data, Additional funding could allow redundantsys- then the transfer has a reasonable chance of suc- tems to be built that would reduce the amount ceeding.'°' However, the subsidy cap of $250 of risk posed by these system vulnerabilities. Pro- million plus launch costs OMB has imposedmay ponents of additional subsidy argue that the ben- limit the ability of EOSAT to establisha self-sus- efits derived from land remote sensingare such taining corporation within the 10 years of the that the system should be maintainedeven if contract. there is a relatively low demand for data. They This attempt to commercialize land remote further offer that Government needs for datato sensing is an experiment that has no exact prece- use in monitoring the Nation's renewable and dent. It may be necessary or desirable to insti- nonrenewable resources and the environment, tute additional legislative measures, or to appro- in the public interest, are great and thatmore time priate additional funds for the transfer in later and funds are needed to learn how to integrate years (beyond that committed in the current con- these data into existing programs.'" tract). Therefore, Congress may wish topursue one of the following options: Moderate Additional Subsidy The difference between this and the previous Maintain a High Level of Direct Support option is the level of extra support that is deemed for Commercial Land Remote Sensing necessary to assure near-term privatization and Although the Administration has set acap on eventual commercialization of land remotesens- the total subsidy to be paid, Congress might later ing. Proponents of this alternative policy would decide to appropriate an additional subsidy (per- argue that some additional subsidy is appropri- haps $100 million to $150 million), on the basis ate to provide an additional margin of safety for that a $250 million subsidy allows little margin the transfer, but that it should not exceed,say, for maintaining U.S. technological and market- $50 million over the life of the current contract ing leadership. The contract with EOSAT hassev- between the private firm and the Government. eral vulnerabilities that could adversely affect the They further support the need for the privatecor- company's ability to compete effectively. EOSAT poration to assume a higher level of financial risk will attempt to use high-capacity tape recorders than might be implied in the first option. on Landsat 6 and 7 to gather and store data from areas that are not covered b" 0;ound receiving No Extra Subsidy stations. However, tape recorders haveproven Such a policy would follow from OMB'scon- particularly vulnerable to malfunctions in the past viction that $250 million (plus launch costs) is (e.g., on Landsats 2 and 3). In addition, MSS-type about the right amount to extend toa private cor- data will be generated by summing appropriate poration for the first steps of the commercializa- elements of the TM instrument onboard the tion process and that holding out the possibility spacecraft. Not only is this an untried technique, of any greater future subsidy would undermine but because there will be no separate MSS instru- the creative energies of a corporation thatwas ment, there will be no backup should the TM it- risking its own capital to build sufficient market for remotely sensed data. Further, it could be iosAs noted in the discussion of issues, a strong market for data would imply sufficient revenues to build follow -on satellites beyond '06For a detailed discussion of Government requirements, Landsat 6 and 7 see Re- mote Sensing and the Private Sector, op. at., ch 5, app G, H, I.

32& Ch 7Remote Sensing From Space 321

argued that if sufficient demand for remote sens- remote sensing. NASA officials arguethat NASA's ing products fails to ieve lop, the field should be role is to continue research on advanced sensors, left to other nations and the United States should not to develop sensors that woc:J beused for devote its energies to maintaining leadership in commercial operations. NASA is now attempt- other technologies. ing to reinstate part of this research. However, the question of what level of effort is appropri- Additional Policy Options ate remains. In spite of the mandate of Puklic Law 98-365 Several other options for promoting U.S. com- for continuing research in land remote sensing, petition in satellite land remote sensing are pos- the fiscal year 1985 NOAA budget contains no sible. 1 hey are primarily designed to promote the support for research on operational sensors or development of a market for the data. As the ear- on utilization of the data. If theUnited States is lier analysis has shown, the most important fac- to support the development of amarket for the tors contributing to the development of demand data, maintain its technologic tl lead in civilian for remotely sensed data are: 1) continuity and applications of remote sensing technology, and timeliness of data delivery; 2) a strong value- promote national prestige in the face of competi- added industry; and 3) continued research and tion from France and other countries, continued development, both on sensors and other system research on advanced civilian sensors will be nec- elements, and on effective application of the data. essa y. Some technology developedfor recon- The last factor is also the major element in con- n-issance satellites might eventuallybe trans- tributing to U.S. technological leadership. ferred to civilian use, but as discussed in a previous OTA report,'" the steps from military Reinstate a Strong Remote Sensing or intelligence use of part or all of a space sys- Research F'rogram tem to civilian use are long and difficult. The Remote Sensing Conimercielization Act of 1984 calls for both NASA and NOAI to continue Encourage the Growth of the research in advanced sensors and in the use of Value-Added Business remot-!- tensed data.10; Until about 1982, pri- There is no straightforward process for trans- mar'' J ,hin NASA, the United States maintained ferring complex new technologies from Govern- a strong remote sensing research programboth ment laboratories to private industry.Indeed, the for applications of the data, and in sensor devel- experience with Landsat has demonstrated that opment. As the Landsat system began the transi- it can be highly complex and difficult. The big- tion to operational status, NASA began to cut gest impediment to private ownershipof land back on its research effort in the expectation that remote sensing is the small market for datafrom NOAr, would be the lead agency in operational land remote sensing. However, NOAA has only the system. a small research program. NASA continued to Gathering land data from space is a major in- work on a multispectral linear arrat. to be tested novation in the remote sensing buiness; it will on a future satellite. As discussed earlier (see take yet more time, money, and considerable at- issues section), NASA terminated fiscal year 1985 tention to building sufficient demand for data to research in order to concentrate on developing support a self-sufficient private sector operation. a much more advanced sensor system. Some One key to developing a sufficient market is Members of Congress and representatives of the the small value-added industry.'" One reason it industry are concerned that NASA's decision, remains small is that the Government, in certain which was driven by the desire to cut some programs in order to reduce its operating budget, 10Ciyihan Space Policy and Applications, op. cit., ch. 6. left NASA providing very little research effort for '091t is difficult to estimate how much income the value-added supporting the U.S. competitive stance in land industry generates because many larger firms, such as the oil and gas firms, maintain their own computer processingfacilities for con. '°'See Public Law 9-365, Title VResearch and Development. vening he data to useful information.

329 322 International Cooperation and Competition ',1 Civilian SpaceActivities

areas, in effect competz5 with it by maintaining for cooperative effortsas well. These range from its own data processing and value-addedcapac- coordination of individual country effortsto the ity. This may be appropriate in the research and possibility of establishinga multilateral consor- development phase, but inappropriate when the tium to build and operate a system from which system is to be transferred to private hands and remotely sensed dataare sold. operated as a profitmaking entity. ifa strong land remote sensing industry is desired,it will be Future International Coordination essential for the Government to reduce its involvement in value-added services andcontract The United States participates (through NOAA) for those services thatcan be supplied by private in the deliberations of the Landsat GroundSta- companies. tion Operators Working Group and the Commit- tee on Earth Observation Satellites,"3 organiza- Repair Landsat 4 tions that coordinate standards for landremote sensing systems and serve as fora for exchang- The virtual certainty of a gap in data delivery ing technical and other remote sensing informa- between the demise of Landsat 5 and the launch tion. Such coordination will still be important of a private follow-on satellite deeplyconcerns after the Landsat system is transferred to thepri- data users. Some have suggested that it might be vate sector. If the transfer process continuesas possible to eliminate or shorten sucha data gap planned, it will be important to spellout how pri- by repairing Landsat 4, which is still operating, vate firms would have to interact with theagen- though at sharply reduced capacity. NASA has cies that represent the United States in theseorga- investigated the feasibility of repairing the Land- nizations. At present, NOAA's plan isto continue sat 4 satellite in orbit, as was done with the Solar to take the lead, with major input from the cor- Maximum Mission repair in April 1984,110or poration, and from representatives of the value- bringing it back to Earth, aswas done with two added industry. communications satellites. However, unlike the Solar Maximum Mission, which operates at alti- Multilateral Consortium tudes that are accessible to the Shuttle, Landsat 4 would require special effort to retrieve it and Although the idea has received relatively little bring it back for repair."' In addition, it doesnot attention since it was recommended ina 1977 seem cost effective to repair the satellite.' '2 National Academy of Sciences study,"one feasible option is to establish a land (and ocean)sat- Because the Landsat satellites follow anear-po- ellite remote sensing system owned and operated lar orbit, a Landsat repair mission would haveto by a multinational consortium. One possible form wait until the Western Test Range at Vandenburg of this option is discussed in detail inan earlier Air Force Base in California is able to accommo- OTA report.'" Under such an arrangement,a sin- date the Shuttle (i.e., in 1986). NASA has no six., gle management authority with multinationalpar- plans.

"'This group met for the first time in September 1984. It was Cooperation formed from the Coordination on Land Observing Satellites and the Coordination on Ocean Remote Sensing Satellites, as a result Although competition playsa major role in land of a recommendation from the Economic Summit panel of experts on remote sensing. It includes entities from the free world that have remote sensing policy, there is ample opportunity land or ocean remote sensing systemsor plans for building them. "'Resources Sensing From Space: Prospects for Developing Coun- 110* "Orbiter Crew Restores Solar Max," Aviation Week and Space tries (Washington, DC: National Academy of Sciences 1977); see Technology, Apr 16, 1984, pp. 18-20 See "Astronauts Deploy, also Ray A. Williamson, "Commentry on Land, Sea, and Air: Global Retrieve Satellite," Aviation Week and Space Technology,Nov Implications of the View from Space," Global Implications of Space 26, 1984, pp. 20-22 Activities, AIAA Aerospace Assessment Se 'es, vol. 9, 1982; and John "'The satellite is designed to operate at ar orbit of 380 nautical L McLucas, "Whither Landsat," Aerospace America, January 1985, miles The shuttle can only reach to about 285 nautical miles above p. 6. Earth ",Civilian Space Policy and Applications, pp. 298-300; A similar 12According to NASA, estimates for the cost of retrieval andre- opt.on has aLo been discussed at recent meetings of the U.N. Com- pair, range up to $250 million, depending on how extensive refur- mittee on the Peaceful Uses of Outer Space, though the United bishment of Landsat 4 might be. States took little part in these deliberations.

3,S0 Ch. 7Remote Sensing From Space 323 ticipation would assume responsibility for global shared could be of o eral I benefit to the United operation of the system, including establishing States. technical specifications, procuring and operating satellites, and receiving and preprocessing satel- Development Assistance lite data. This approach would spread the invest- The United States could continue to provide ment risk, as well as encourage other nations to technical assistance to developing countries in be more aggressive in developing their own in- the applications of remotely sensed data, even ternal markets for satellite data. It would also aid after the Landsat system has been transferred to the developing countries in establishing their own private hands. ability to use remotely sensed data for resource As explained in appendix 7A of this chapter, development and help allay their fears of domina- developing countries face two major barriers to tion of this technology by industrialized countries. expanding their applications of remotely sensed A multinational remote sensing corporation could also guarantee that data would continue to be data: lack of supportive institutions, and lack of training. The United States has attempted to re- accessible to all countries on a nondiscriminatory duce some of these barriers by offering develop- basis. ing countries substantial assistance in applying Given the current climate in the U.N. toward remotely sensed data to their resource problems. remote sensing, and the more important fact that It has set up training programs, regional centers, the U.N. is not organized for operational func- and has assisted in purchasing data processing tions, a U.N. consortium seems inappropriate. equipment. It would in principle be more feasible to establish a limited consortium among those nations The U.S. technical assistance programs are largely responsible for the emergence of the in- ,ith substantial expertise in remote sensing, simi- ternational user community. To the extent that ,r in form, perhaps, to the INMARSAT structure. Overtures for other countries to cooperate in an international market exists for satellite remote remote sensing have been made in the past. sensing data, it developed as a result of U.S. aid. Now, because France, japan, and Canada 'e Discontinuing such aid would slow the growth of an international market for the data and im- well along in their planning process for either land pede the spread of land remote sensing tech- or ocean remote sensing satellite systems, their commitment to national systems might make it nology. difficult to interest them in such a multinational system, particularly if it were dominated by the Ocean Remote Sensing Policy United S'Ltes. Nevertheless, a multinational sys- International interest in ocean remote sensing tem might eventually emerge from the current from space in this decade is high and reflects a cooperative arrangements for coordinating and sense that such systems can serve as useful re- setting system standards. search tools and provide important operational One major disadvantage of a multinational sys- data for ocean users. Ocean remote sensing, be- tem is that the United States would no longer be cause it is about to pass from research to opera- in complete control of its own civilian system. tional status, presents a substantial opportunity In addition, U.S. suppliers of space system equip- for all nations to gain from cooperative arrangement would face certain competition from indus- ments. The following presents possible policy op- tries in other countries. Yet, U.S. industry cur- tions for Congress to consider vis-a-vis ocean re- rently possesses a competitive advantage in these mote sensing. areas, which transfer of the Landsat system to the Take the lead in organizing and coordinating private sector will support. In addition, because an international program for collecting and dis- the value-added component of the remote sens- tributing ocean data from space. ing industry is projected to be the major revenue source, and the United States is in arelative- International prospects for ocean remote sens- ly strong competitive position in that market too, ing from space present the United States with an a cooperative satellite system inwhich costs were excellent opportunity to lead !-ie coordination of 331 324 International Cooperation and Competition In CivilianSpace Activities

global efforts. Although the U.S.system is a Navy sors for obtaining certain specialized ocean data one (N-ROSS), under arrangement; now planned, that would be flown on a Government satellite. NOAA will distribute most of the 'ata tc the civil- Finally, as the planning for thespace station pro- ian community in the United States anc; abroad. ceeds, it will be especially important for NASA NOM has embarked on an effort to coordi- and NOAA to consider operationalsensors ap- nate not only the distribution of data gathered propriate for a polar-orbiting platform,one of the from N-ROSS and otherocean satellites, but also planned elements of the internationalspace station program. the orbital parameters of the satellites. Forexam- ple, coordination of the satellite crossingtimes As work on the sensors proceeds, it is justas of N-ROSS with ESA's ERS-1, if successful, could important to continue research on howto apply result in a data set muchmore useful to the the data from research and operationalsensors United States and other nations than either ESA for ocean-related problems. World maritime in- or NOM could accomplish alone."6 This ap- dustries generate billions of dollars ofrevenue pears to be a least-cost approach to obtaining each year. Information aboutocean parameters data important to research scientists andto ocean can increase industry productivity and reduce the industries. Congress may wish toencourage this danger to lives at sea.," One component of this effort by specifically directing NOAAto take the research should be the development of tech- lead in organizing and coordinatingan interna- niques to utilize meteorological datamore effec- tional program for collecting and distributing tively in understanding and predictingocean ocean data from space. If it decides to do so, Con- dynamics. Developing U.S. capabilityto use gress must also authorize and appropriate ade- ocean data from satellites effectively would help quate funds to support acquisition, processing, maintain U.S. technological leadership andcon- archiving, and distribution of the data from the tribute to the efforts of U.S. value-added firmsto various sytems. generate useful information products for the in- Support continued rese.rch for advanced ternational maritime market. oczan sensors and applications. Develop a dedicatee civilianocean satellite. In the next decade, NASA plans severalmajor Through its flights of Leasat in 1978 and the ocean sensing experiments and contemplates Nimbus series of siitellites the United States has many more."' These will contribute vital infor- demonstrated the utility of ocean remotesens- mation to our general knowleuge of theoceans. ing. In the future it may be appropriate for the As these experiments proceed, it will be impor- United States to operatea dedicated civilian tant to examine them for opportunities to develop wean remote sensing satellite. If current attempts operational sensors that wouldserve users of to coordinate ocean remote sensing with other 3cean data. Such sensors could be flown on a nations prove successful, it may be possibleto variety of platforms. For example,i't may be develop an international polar-orbiting platform appropriate for the Government to fund partor carrying some sensors dedicated toocean sens- all of the ocean sensors that -ould be flownon ing, or to build a U.S. platform that containsa a private land remote sensing satellite. Alte set of instruments complementary to those ofa natively, the private sector may wish to build sen platform built by other nations. In the lattercase, it would be essential t' select the orbitalparam- 16"thilization of the Polar Plaform of NASA's Space PlatformPro- eters of each to allow the satellite to sense Earth gram for Operational Earth Observation," op cit. at complementary times as well. "'Oceanography From Space A Research Strategy for the Dec- ade 1985-1995," Report of the joint OceanographicInstitutions, 1984 ''°"Oceanography From Space A Research Strategy forthe Dec- ade 1985-1995," op cit

332 Ch 7Remote Sensing From Space 395

APPENDIX 7A.-SATELLITE REMOTE SENSING IN DEVELOPING COUNTRIES

Developing countries have made limited use of re- larly stressful conditions, such as severe storms or rad- mote sensing from aircraft for mapmaking or for re- ical short-term climatic changes, they can alsobe source development and management since the 1930s employed predictively in crop yield models to signal and 1940s. When meteorological data from satellites potential crop failure.' Most satellite weather data are became available in the mid-1960s, developing coun- readily and routinely available via direct readout to tries began to take advantage of the opportunity these any government agency, nongovernment agency,in- systems afforded to gather information on current and stitution, or individual anywhere in the world within impending weather conditions. rang,- of the satellites. One need onlyacquire the By contrast, satellite remote sensing for the purposes proper grouna receiving equipment.Neither permis- of resource development, on land or in the ocean, has sion, consent, nor payment is required.Because seen relatively little application in developing coun- ground receiving equipment is relatively inexpensive, tries, primarily because the level of technical sophis- the meteorological system is highly accessible to most tication needed to process the data is very high and countries of the world. Nearly 100 developing or the hardware and special training costly. newly industrialized countries now own APT receiv- This section decribes the current use of remote sensing stations. A few own High Resolution Picture Trans- ing data in selected developing countries and investi- mission Stations (HRPT). Many of these countries ac- gatec the potential these data provide for locating and quired the stations through the voluntary assistance managing renewable and nonrenewable resources. It program initiated by the WMO as part of itstraditional identifies the factors that might contribute to the effort to aid developing countries in learning togather growth of a market for remotely sensed data and data and analyze weather data. products and suggests ways in which U.S. policies could be improved to the mutual benefit of ooth the Earth Resources developing countries and the United States.' Few developing countries have made much useof Earth resources data from satellites, in spite of the fact The Experience of Developing Countries that these data could directly serve their development. The objectives of collecting Earth resourcesinforma- As the UNISPACE '82 report notes, "The synoptic view tion are to:4 and the possibility of frequent repetitive coverage of 1. locate resources; large and even inaccessible areas make, for the first 2. aid in evaluating resource investment; time, regional and global monitoring of renewable nat- 3. provide information to be used for improving cur- ural resources and changing environmental phenom- rent management of natural resources; and ena technically feasible and economically attractive."' 4, aid in the performance of certain governmental This statement is as true for the deve;,,ping countries activities (particularly administering land taxes, as it is for those industrialized countries thatalready etc.). possess a well-developed industrial and information Although the resource information needs of devel- infrastructure. The problems lie in the abiliti of de- oping countries are similar to those of thein- veloping countries to take advantage of remotely dustrialized countries, their experience in attempting sensed data from space. to develop an adequate information baseis different. Whereas in most industrialized countries detailed Weather and Climate maps of all kinds (e.g., political, geologic,hydrologic, Developing countries have made significant use of agricultural) already exist to provide baseline data for developing countries have the availability of weather data supplied by satellite. a resource surveys many Synoptic, timely, weather data are of general use to not even been mapped on the coarsest scalefor any all countries, and are particularly useful in develop- 'See disscussion in section on meteorological remote sensing also, Remote ment projects. Beyond their use in warning of particu- Sensing and the Private Sector, op cit , app D 'Orris Herfindel, Natural Resource Information for Economic Development. --- Resources for the Future, Washington, DC, John Hopkins Press, Baltimore, 'For a related discussion of the potential effects of transfer of the Landsat MD, 1969, pp 20-21. system to private hands, see Remote Sensing and the Private Sector, op cit , 9n the United States, for example, even the average citizen may purchase app A topographic maps from the U 5 Geological Survey at scales as detailed as '"Report of the Second United Nations Conference on the Exploration and 1 50,000 In addition, State, county, and local maps are readily available, Peaceful Uses of Outer Space, A/CONF 101/10, 1982, pars 168 as well as direct aerial survey photographs

333 326 International Cooperation and Competition in CivilianSpace Activities

reason. Because they lack useful maps, many devel- Table 1A1.Agency for International Development oping countries can often use the coarse-scale map- Remote Sensing Grants and Projects, 197145 ping available from Landsat MSS imagery effectively Bangladesh for initial survey of a resource problem. Map scales Kenya Thailand Bolivia Lesotho Tunisia of 1:200,000 are possible with the 80-meter resolu- Costa Rica Mali Upper Volta tion of the MSS sensors aboard Landsat. Application Cameroon Morocco Yemen of this minimal record could help define the bound- Cape verde Niger Zaire Chile Pakistan aries of particular resource problems, and identifyspe- Ecuador Regional Aid: Peru Asia cific needs for more detailed information. Atthat Egypt Philippines East Africa stage, aerial photography and ground survey become The Gambia Senegal important. Haiti West Africa Somalia Sahel Regional Program Data needs are generally divided into two catego- Indonesia Sri Lanka Jamaica Switzerland ries of renewable and nonrenewableresources: Renewable resources. Some 25 developingcoun- tries have used Landsat data together with aerial Gathering Information for Development photographs to gather informationon crop or forest statistics.6 Because the agricultural production Although developing countries face thesame gen- and distribution system reacts slowlyto emer- eral needs for resource information to aid theirde- gency conditions, advance warning of drastic velopment process, the stated needs of individual changes in predicted crop production isneces- countries can vary widely. The followingprograms il- sary to prevent either famine or oversupply. For lustrate the variety of information needs thatcan be this purpose, the synoptic view of satellites is met by using information derived from satellites. They especially advantageous. These same countries were chosen to be illustrative and are not com- have also used Landsat imagery to monitorwater prehensive. availability and to create maps delineating the uses to which the land is now put, and to assess TANZANIA the renewable natural resources thatare avail- Mucll of Tanzania's economic development effort able. Most of them feel that as landuse intensifies, is directed toward agriculture and animal husbandry. they will need to put more effort into both short- Its strongest aata requirements include: and long-term planning basedon satellite remote current land use and land suitability (distribution sensing. of vegetation and soil types); Nonrenewable resources. In sharpcontrast to the geologic and groundwater informationto help case for renewable resources, large national and locate additional water sources, increase the effi- multinational firms have led the effortsto in- ciency of schemes for well-digging and water im- tegrate Landsat data with aircraft and ground data poundment, and to help in siting new villages; in the search for valuable minerals in the devel- vegetative cover information for monitoring land oping countries! Efforts to date have resulted pri- and range stress (drought and overgrazingare primarily in locating oil. Although these firmsare mary concerns).8 willing to search for minerals in various developing countries, they are uninterested in sharingthe VENEZUELA use of data processing technology because many Venezuela plans to tap its natural hydroelectric of their techniques are proprietary. potential in order to develop nonpetroleum Most developing countries have received their energy sources. The planning effort requires extensive surveys knowledge and training in the application of remotely to locate potential dam sites. Data required include: sensed data through programs instituted by AID, reconnaissance level maps over an entire region NASA, and NOAA. Table 7A-1 lists the developing to delineate drainage, watersheds, soils,vegeta- countries that have received aid directly from the tion and geologic structure; United States for satellite land remote sensing and detailed maps of target areas to determine meteorological projects. Other industrialized countries appropriate dam heights, flow rates, the commercial and several multiiateral organizations have also been active in supplying similar aid. potential of resources, and detrimental environmental effects.9

'National Academy of Sciences, Remote Sensing From Space. Projectsfor Developing Countries, (Washington, DC. NAS, 1977), p, 29 'C K Paul, "Land Remote Sensing," Science,1981 71bid 'Robert W. Campbell, Jule A. Caylor, and Matthew R Willard, "Rio Caura Resource Inventory" (Diamond Springs, CA.RDA, 1982) 334 Ch. 7Remote Sensing From Space 327

COSTA RICA BANGLADESH Costa Rica's growing industrial and economic base Among other things, Bangladesh's development places increasing pressures on agricultural and range goals include disaster warning to prevent damage and land, and in turn, upon the nation's forests. The re- loss of life from severe storms, as well as increased sult is that prime agricultural areas are threatened by agricultural production and monitoring of crop pro- urban expansion at the same time that areas predom- duction. These two areas generate a need for the fol- inantly suited to forestry are being converted to mar- lowing types of resource information: ginally productive ranse and agricultural uses. Costa cloud patterns and storm warning on a real-time Rica has expressed a need to monitor and control basis; these changes.10 data on rainfall, soil moisture, hours of sunshine, and crop stress, in order to monitor crop growth SRI LANKA and crop conditions; In the mid-1970s Sri Lankan development planners data on land use and land use change to plan bet- began a program to develop new agricultural land in ter agricultural development and irrigation; order to become self-sufficien' 'n agricultural produc- flood patterns and water levels to plan better tion. Program goals include: cropping patterns." crop breeding; multiple cropping; DOMINICAN REPUBLIC soil conservation; Forests represent one of the Dominican Republic's improved management of agricultural lands. primary natural resources. Before an aerial photo- Sri Lanka began an agricultural base mapping pro- graphic survey in 1965 and 1966, the Government of gram to provide information on soils, present vegeta- the Dominican Republic believed that 40 percent of tion, land use for siting new agricultural areas, and its total land area was forested, 750,000 hectares in topography for assisting irrigation planning and wa- high-quality pine. The survey showed that less than tershed management. Although earlier maps existed 11.5 percent of the land was actually in forest, and they had not been updated since the early 1960s and only 215,000 hectares in pine. This information pro- they were incomplete." foundly affected its previous planning estimates." Continued observation using satellite data could help PERU the country survey their forest resources on a regular In Peru, the Officina Nacional de Evaluation de basis. Recoursos Naturales (ONERN) is to provide the Peru- vian Government with inventory and evaluation of Potential Fishery Applications Peru's natural resources as well as an assessment of To date, very little work has been done in develop- the state of the environment and recommendations ing countries with respect to fisheries development. for its protection. ONERN's objectives require exten- However, "new developments in marine-related sive resource information: remote sensing, such as synthetic aperture radar for natural resources inventories oriented to Peru's wave studies, microwave radiometers for salinity development and resource management needs; measurements, and mu ltispectralscanners for natural resources inventories for conservation chlorophyll mapping" present new opportunities for policy planning; the use of satellites in fisheries development through- studies of the interactions of human and other out the world. natural resources, with an emphasis on use and Although U.S. research on using satellite remote preservation.' 2 sensing for fisheries is in its infant stages, it has not begun in developing countries. Generally, Landsat's

"Harvey Newton, et al. Early Warning Crop Yield Modelling in Bangladesh I°T. K Cannon, et al , "Application of Remote Sensing Techniques to For- (Diamond Springs, CA RDA, April 1982) est Vegetation Surveys in TropiLal Areas and Urban Fringe Land Use Prob- "Organization of American States, "An Exploratory Survey of the lems in Coasta Rica/' in Proceedings of the Twelfth International Symposium Dominican Republic," in Physical Resources Investigations for Economic De- of Remote Sensing of Environment, (Ann Arbor, MI Environmental Research velopment, A Casebook of OAS Field Experience in Latin America, General Institute of Michigan, 1978), p 2081 Secretariat, Washington, DC, 1969, pp. 212-214. "Resources Development Associates, "Agncuhural Resource Inventory and ',Vic Klemas, "Technology Transfer to Developing Countries. Future Use Base Mapping in 5n Lanka, A Program Evaluation and Assessment," Los Altos, of Remote Sensing in Biological Marine Resource Development," Back- CA Nov ,1976 ground paper for Ocean Policy Committee, National Academy of Sciences "Robed Campbell, et al , Land Use Inventory and Environmental Plan- Workshop on Future of International Cooperation in Marine Technology, ning Project Peru (Los Altos, CA RDA, April 1980). Science, and Fisheries, La Jolla, CA, Jan 18-22, 1981.

335 328 International Cooperation and Competition in Civilian Space Activities

sensors have very limited application to marine countries, an institutional framework to support the studies; thermal infrared and microwave sensors have use of that data and a capacity for internal probiem shown good poter,tial. While some developing coun- solving are essential. In the absence of this homework, tries receive low-resclution thermal infrared imagery transferring or selling technology to end-users does from the GOES satellites, they would not be able to little to help them achieve any of their objectives with receive and analyze thermal infrared or microwave remote sensing data. Unfortunately, many internation- data of high resolution from ocean satellites if they al technology transfer projects have overemphasized were flying because they do not possess the high ca- the immediate use of equipment and technologies and pacity computers needed to process such data. How- have failed to aid in building an infrastructure or in- ever, these kinds of data are necessary to pursue useful ternal organization to support continued use of the analyses of the coasts and oceans. In addition, as the data. The Wal lender study'9 concluded that efforts to previous section on ocean remote sensing em- build the technical capabilities associated with later phasized, those applications require more research stages of development will fail unless the objectives and efforts to demonstrate whether they will work or of earlier stages have been realized. be cost effective. Because satellite data is likely to be used by many The importance of accurate inforniation about nat- interested parties, including hydrologists, geologists, ural resources is clear, particularly as developing soils scientists, agricultural specialists, physical plan- countries strive for self-sufficiency. Economic devel- ners, or geographers, economies of scale can be opment requires discovering what resources are avail- realized by promoting multiple uses of satellite data. able and then organizing the information so that in- In other words, "the more numerous and diversified formed decisions can be made about the development the users of remote sensing are, the more economi- and exploitation of natural resources. The key is the cally feasible it is for a country to sustain a national information base. Most developing countries lack a analysis capability. "20 In addition, given limited man- consistent, homogeneous, and complete data base power and budgetary resources, a focused resource from which to work. They also lack the means to ac- and environmental information effort is also needed. quire, sift, and analyze the new data they need. The Many ways of coordinating such activity are possible, preliminary surveys and maps they have made, largely depending on the country involved, its needs, re- with the help of the United States and the European sources, and political situation. The transfer agent, countries, represent only the beginning of the long and whether USAID or some private consulting firm, will difficult process of information management." not succeed until the developing country has developed an internal organization that can decide on its Institutional Factors Influencing the own to use satellite products and satellite technology. Fortign aid spent on transferring technoloiy (hard- Use of Satellite Remote Sensing ware) might be better spent in developing an nstitu- A variety of nontechnical factors, including institutional and organizational infrastructure cor-!_ _Ave to tional and political ones, affect the use of satellites in using remote sensing data. developing countries. The Training Constraint Domestic Institutional Factors Closely related to the development of an effective It is. in the routine use of data, not its initial collec- organizational context is the need to familiarize tion, that the operational use of remote sensing data thoroughly the users of the technology with the tech- meets its toughest test.1 7 Therefore, in order to deter- nology itself and its value for helping them perform mine what type of interpretation and analysis proce- their work. This primarily means training people and dures will best serve a developing country's needs, coordinating manpower and equipment. it is necessary to understand what internal institutional As a review of AID projects in the Sahel pointed out: and technological capabilities already exist in a given . (the) factorswhich impeded the maximum trans- country. fer of technical expertise to the counterparts and the application of results to development programs were: As one report" suggests, prior to the development the scant availability of appropriately trained counter- of self-supporting satellite data uses in developing part resource analysts; and the lack of an extended "See, for example, "Satellite Remote Sensing for Developing Countries,' period of practical training and technical assistance after Proceedings of an EARSel.ESA Symposium, Igls, Austria, Apr 20-21, 1982 inventory completion, during which expatriate analysts (ESA SP175) "NAS Study, op tit , p 117 ' "Harvey Wallender, et al , Technology Transfer and Management in De- "Ibid veloping Countries (Cambridge, MA Ballinger Publishing Co , 1979), ch 3 "Remote Sensing From Space, op cit , p 125 336 Ch. 7Rsmote Sensing From Space 329

could gradually withdraw as the host country person- period immediately following the inventory, during nel gained self-sufficiency in the implementation proc- which resource development programs are initiated. ess These are issues which can and should be ac- The inclusion and funding of this extended implemen- counted for in future resource inventories in Africa. tation period is a critical element of any natural resource They must be considered in the preliminary stages of inventory. It is also one which has often been over- project design by the funding agency and the host coun- looked by sponsor agencies in project design. The re- try, so that adequate tune and resources for them are sult is that priorities are shifted, counterparts resume, allocated.21 or are reassigned to other duties, and inventory prod- In developing countries where trained personnel do ucts are shelved. Development projects may then con- not exist, training is critical, not only in resource sur- tinue on an ad hoc basis, without the benefit of the management resource.23 vey and map interpretation and mapmaking techniques, but also in equipment operation and upkeep. To develop self-supporting users who can generally Where a country does not have the personnel or tools solve their own problems, it will be essential to con- to provide upkeep on electronic equipment, it quickly struct long-term, intensive training programs. If train- becomes useless. ing is treated haphazardly, the potential for satellite Training in both general topics and specific subjects applications in developing countries will be severely is need-xl. General training includes educating scien- hampered. tists and policymakers about the technology and its In sum, the development of satellite remote sens- !imitations and advantages. Such exposure is essen- ing users in developing countries will rely on effec- tial to starting a country on a road toward the adop- tive technology transfer that encourages these coun- tion of the technology. tries permanently to adopt satellite technology. Such Specific training involves coupling the training of technology transfer will be successful only if it assists specialists in the fields to be explored (e.g., weather, in the development of an effective organizational con- climate, water resources, geology) with training in the text. However, the adoption of satellite technology in interpretation of remotely sensed data. This process developing countries also depends on political factors. may be extensive and take several years. Such training may well consist of courses in the United States, Political Constraints on-the-job training either in the United States or in the host country, and day-to-day interactions between for- During the last decade, the control of information eign and host country participants. has emerged as a critical component of the North- Training programs of even the best quality may not South debate over a New International Order. In par- be successful, however, unless developing countries ticular, information that is carried across national are able to commit professional personnel on a long- boundaries without the consent of all parties has been term basis: seen by some countries as a threat to their national In most West African countries, the supply of edu- sovereignty and their "sovereign right" to control in- cated scientists and planners is extremely limited. The formation about themselves and their resources (in- few specialists who do exist are often quickly cycled cluding resources within a 200-mile Extended Eco- through government hierarchies and do not remain in nomic Zone). Earth resource sensing satellites pose a positions where their project experience can be tech- unique problem because they collect information nically or managerially utilized. The shortage of scien- about one country and disseminate it to many other tists sometimes necessitates that government adminis- countries." trators be given assignments that would be more Sovereignty issues have been discussed and debated appropriately filled by people trained in the earth throughout the legal and political debate in the U.N., sciences. This wzs the case in the Volta Basin project where three of the seven counterparts were govern- focusing on the development of an international ment administrators or department heads who already regime for Earth resource sensing satellites. The sov- had full-time administrative positions and correspond- ereignty debate has centered on the desire of some ing responsibilities 22 countries to control the dissemination of data obtained These administrators usually return to their old abou. their country from space. This issue is the heart duties and are unable to continue supporting the use of the algt.ment in the U.S. debate; a prohibition of remote sensing: against open dissemination without consent is con- Program success also requires the full commitment tained iii an early Argentine-Brazilian draft treaty, and of scientifically trained counterparts for an extended

"Lynda Hall, "Factors in the Effective Utilization of a Landsat Related In- ventory in West Africa" (Baltimore, MO National Conference on Energy Re- ,ffbid., p 6 source Management, 1982), p 4 "See discussion on this and similar issues in 1JNISPACE '82 A Context "Ibid , p 5 for International Cooperation and Competition, op at , pp 24-28 337 330 International Cooperation and Competition in Civilian Space Activities

also in an early French-Russian set of draft principles very limited access to the rapidly expanding pool of regarding control of remote sensing from space." machine-readable data.27 The issue stems from a basic disagreement over con- The avoidance of this tradeoff will be extremely dif- trol of information. Whereas the United States admits ficult. It is important, though, that information asym- to a nation's sovereignty over its natural resources, it metries (either real or imagined) be dealt with, be- does not agree to a nation's sovereignty over infor- cause it is likely that an increase in the knowledge and mation about those resources. Developing countries capabilities of developing countries would lead to fear being exploited by other countries and especially smoother international negotiations. At present, inter- by multinational corporations. The importance of in- national negotiations over access to data and infor- formation is dramatically evident in the search for new matics may be clouded with political rhetoric from forms of mutually agreeable relationsnew con- countries that feel they are at an information disadvan- tractsbetween multinational corporations and devel- tage; perceiving asymmetries in access to information, oping countries. Differential access to informak-n and they tend to block agreement. the ability to apply it are crucial elements in bargain- Cruise O'Brien and Helleiner suggest that "the con- ing power bc..ween multinational corporations and the sequences of imperfect information are nowhere more developing countries. dramatic than in the resource sector."28 Private users, The United States questions developing countries' with greater information in early stages of resource ex- concerns over economic exploitation on three ploitation, usually strike what appears to be a good grounds: bargain. As exploration proceeds and the host gov- First, developing countries are entering into mature, ernment learns more, it may find that it gave away too mutually beneficial resource exploitation relationships much early on. This leads to what is known as the "ob- with foreign interests, without forswearing their rights solescing bargain." When this occurs, host countries to such ultimate sanctions as nationalization and/or ex- propriation. Second, the physical control of resources push for renegotiation and, in fact, a great deal of re- and of access to resource sites are the trump cards, not negotiation has occurred in recent years.29 As a re- possession of tentative and unverified data. Third, as sult, an impasse "has developed between host gov- developing countries acquire their own remote sens- ernments in developing countries and the resource ing expertise, wheti.:r indigenous or procured from transnationals (multinationals) which has produced a outside consultants, the margin of information dis- marked decline in resource explorat: in and develop- advantage can lose a good measure of its significance.26 ment in the Third World in recent years which is in The United States further suggests that imposi- the interests of neither."30 tion of some form of restrictive data dissemina- The elimination of information asymmetries might tion regime would create two "classes" of coun- provide a common knowledge base and common tries; those with data acquisition capabilities and ground for negotiation. Increased knowledge in de- those without. It has argued that this would create veloping countries would enable them to bargain more inequality than a regime of open dissemi- more effectively and efficiently. nation. The issue of dependence cannot be easily dismissed. Developing countries do not want, for political and Such a point of view c3ests that developing practical reasons, to become dependent on one countries should emph._e efforts to develop ca- source of iesource information vital to their national pabilities to use technology and data relevant to planningparticularly a source over which they have their capacities while working to maintain equal no control. As dependence increases, the demand for access to worldwide data and information net- a voice in the planning of the system will grow. works. There is, however, a serious tradeoff in- It should be noted that U.S. policies to make data volved here. If developing countries make: and technology available have to a great extent miti- vigorous attempts to be integrated into the inter- gated the most serious concerns of developed and de- national data market, many of them may face the prospects of increased dependence on imported technol- 71'Transnational Corporations and Transborder Data Flows. A Technical ogy and equipment, on the other hand, if they stand Paper," U N. Centre of Transnational Corporations, 5T/CTC/23, New York, aloof, they may have the problems associated with a 1982. "Rita Cruise O'Brien and Gerald Helleiner, "The Political Economy of In- formation in a Changing International Economic Order," in International Organization 34.4, Autumn 1980, p. 457 "U N Commission on Transnational Corporations, "Transnational Cor- "See U N Document A/AC 1/1047 (Oct15, 1974), Article IX of Latin porations in World Development. A Re-Examination," U N Economic and America Draft Treaty Although positions on this issue have shifted, it is still Social Council E/C10/28, Mar 20, 1978. a major point for debate "I Favre and H. Lalauch, "Natural Resources Forum," vol 5, No. 4 (Bos- "Remote Sensing from Space, op cit, pp 147.148 ton, MA D. Ridel Pub Co , October 1981), pp. 327-347 338 Ch. 7Remote Sensing From Space 331

veloping countries who, despite their U.N. posturing, generate expectations of data continuity. Developing have taken to building satellite remote sensing pro- countries are now extremely worried about a cut-off grams based on Landsat technology. One can see this in available data should the Landsat program be ter- not only in the French and Japanese remote sensing minated.31 programs, which will fly Landsat compatible sensors, but also in the developie3 countries which focus their space activities around remote sensing. The effect of "second UNISPACE Conference, Draft Report of the Conference, the Landsat system and Landsat policy has been to A/CONF '01/3, Mar 20, 1982 , p 77

3 3 9 332 International Cooperation and Competition in Civilian Space Activities

APPENDIX 7B.-U.S. ENVIRONMENTAL SATELLITES, 1960-85

Average(2) Ceased Satellite Purposem Launch Altitude (km)Operation Remarks(3) TIROS I R 04/01/60 720 06/19/60First weather satellite providing cloud cover photography. TIROS 2 R 11/23/60 672 02/01/61 TIROS 3 R 07/12/61 760 10/30/61 TIROS 4 R 02/08/62 773 06/12/62 TIROS 5 R 06/19/62 694 10/11/63 TIROS 6 R 09/18/62 6.94 10/11/63 TIROS 7 R 06/19/63 645 02/03/66 TIROS 8 R 12/21/63 749 01/22/66First APT satellite. Nimbus 1 R 08/28/64 S/677 09/23/64Carried AVCS, APT, and High Resolution Infrared Radiometer for night pictures. TIROS 9 R 01/22/65 S/1630 02/15/67First TIROS satellite in Sun-synchronous orbit. TIROS 10 0 07/01/65 S/792 07/03/66 ESSA 1 0 02/03/66 S/765 05/08/67First satellite in the operational system; carried 2 wide-angle TV cameras. ESSA 2 0 02/28/66 S/1376 10/16/70Carried APT cameras. APT carried on all even-numbered ESSA satellites Nimbus 2 R 05/15/66 S/1136 01/18/69 ESSA 3 0 10/02/66 S/1427 10/09/68Carried first AVCS cameras. ABCS carried on all odd-numbered ESSA satellites. ATS 1 R 12/06/66 G/35,765 10/16/72WEFAX discontinued (pictures)December 31, 1978. ESSA 4 0 01/26/67 S/1373 10/06/67 ATS 2 R 04/05/67 Unstable attitude-data not useful. ESSA 5 0 04/20/67 S/1379 02/20/70 ATS 3 R 11/05/67 G/35,815 10/30/75WEFAX discontinued (pictures)December 31, 1978. ESSA 6 0 11/10/67 S/1437 11/04/69

3 AO Ch. 7Remote Sensing From Space 333

Average) Ceased Satellite Purpose) Launch Altitude (km)Operation Remarks°

ESSA 7 0 08/16/68 S/1440 07/19/69 ESSSA 8 0 12/15/68 S/1429 03/12/76 ESSA 9 0 02/26/69 S/1456 11/15/73 Nimbus 3 R 04/14/69 S/1100 01/22/72Provided first vertical temperature profile data of the atmosphere on a global basis. ITOS 1 RIO 01/23/70 S/1456 06/17/71Second generation prototype. Nimbus 4 R 04/08/70 S/1108 09/30/80 NOAA 1 0 12/11/70 5/1438 08/19/71First NOAA funded second generation satellite. ITOS B 0 10/21/71 Failed to orbit. Landsat 1 R 07/23/72 S/918 01/16/78 NOAA 2 0 10/15/72 S/1460 01/30/75First operational satellite to carry all scanning radiometer. Nimbus 5 R 12/12/72 S/1110 03/29/83 ITOS E 0 07/16/73 Failed orbit. NOAA 3 0 11/06/73 S/1510 08/31/76First operational satellite to permit direct broadcast of VTPR data. SMS 1 R/O 05/17/74 G/35,788 01/29/81Deactivated. Boosted out of geosynchronous orbit. NOAA 4 0 11/15/74 S/1460 11/18/78Deactivated. Landsat 2 R 01/22/75 S/918 03/31/83On Standby. SMS 2 R/O 02/06/75 G/35,800 08/05/82Deactivated. Boosted out of geosynchronous orbit. Nimbus 6 R 06/12/75 S/1110 03/29/83 GOES 1 0 10/16/75 G/35,796 First NOAA operational geostationary satellite; 130°W on standby. NOAA 5 0 07/29/76 S/1511 07/16/79Deactivated. GOES 2 0 06/16/77 G/35,787 Second NOAA operational geostationary satellite; 113°W supporting Centtal WEFAX.

341 334 International Cooperation and Competition in Civilian Space Activities

Average (2) Ceased Satellite Purpose) Launch Altitude (km)Operation Remarks(3)

Landsat 3 R 03/05/78 S/918 03/31/83First Landsat with infrared capability. Now on standby. GOES 3 0 06/16/78 G/35,784 On standby. Moving to 135°W. Seasat 1 R 06/26/78 850 10/10/78Electrical failure. TIROS-N R/O 10/13/78 S/850 02/27/81 Deactivated. Nimbus 7 R 10/24/78 S/954 Carrying Coastal Zone Color Scanner. NOAA 6 0 06/27/79 S/807 First NOAA funded TIROS-N system satellite. NOAA B 0 05/30/80 Failed to achieve an operational orbit. GOES 4 0 09/09/80 G/35,782 First geostationary satellite to carry the VISSR Atmospheric Sounder (VAS) which has now failed. At 139°W. Provides west, WEFAX, and DCS. GOES 5 0 05/22/81 G/35,785 At 75°W; also carried VAS. Now failed. Provides east DCS, WEFAX, and relay of GOES 6 imagery. NOAA 7 0 06/23/81 S/847 Second NOAA funded TIROS-N system satellite. Landsat 4 0 07/16/82 S/700 Carries MSS and TM. NOAA 8* 0 03/28/83 S/815 06/12/84Had search and rescue capability. GOES 6 0 04/28/83 G/35,791 Alternates between 98°W and 108°W. Only spacecraft with operating VAS. NOAA 9 0 12/12/84 S/815 Has search and rescue capability and sensors for ozone and earth radiation budget. MR-Research; 0-Operations; R/O-Operational Prototype. MS-Sun-Synchronous; G-Geosynchronous.

MAPT-Automatic Picture Transmission; AVCS-Advanced Vidicon CameraSystem, WEFAY- Weather Facsimile; VTPR- Verticat Temperature Profie Radiometer; VISSR-Visible Infrared Spin-Scan Radiometer; VAS-VISSR Atmospheric Sounder; MSS-Multi Spectral Scanner; TM-Thematic Mapper; DCS-Data Collection System *NOAA 8 is once again in operation. Chapter 8 MATERIALS PROCESSING IN SPACE

343

'er -444 Contents

Pabe Introduction 337 MPS Activities in the United States 338 NASA Research 338 The Private Sector 344 The Scientific Community 347 Foreign MPS Activities 348 European Space Agency (ESA) 348 Federal Republic of Germany 349 France 352 japan 352 Soviet Union 353 MPS Products, Services, and Equipment 354 Potential MPS products 354 Potential MPS Services and Equipment 356 Cooperation in MPS 361 Advancement of Science 361 Foreign Policy 361 Foreign Sale of U.S. Technology 361 Cost Savings 362 Policy Options 362 Competition .a MPS 363 Cooperation 365

Table Table No. PAP 8-1. Characteristics of Shuttle Payload Carrier!. 339

List of Figures Figure No. Page 8-1. Shuttle Get-Away Special Canister 340 8-2. NASA-Goddard Space Flight Center Hitchhiker Payload Mounted on the Mission-Peculiar Support Structure 342 8-3. Spacelab Drawing of the Overall Conception of VFW-Fokker/ERNO Spacelab 342 8-4. ESA Budget for Microgravity Research Program 349 8-5. Budget for Microgravity Research Program 350 8-6. Sketch of the Proposed Solaris Orbital Station With One Payload Recovery Capsule Being Ejected for Reentry 353 8-7. Continuous Flow Electrophoresis 355 8-8. Annual Market Potential for Electrophoresis 355 8-9. Demand for Space-Produced GaAs 356 8-10. Leasecraft Baseline Concept 359 8-11. NASA MPS Funding Trends 363

344 Chapter 8 MATERIALS PROCESSING IN SPACE

INTRODUCTION The primary motivation for pursuing materials with potential commercial value. To date, this science and engineering in space is to use this program has met with limited success both in at- low-gravity environment for scientific and com- tracting private sector participants and in identi- mercial applications.' Removing the effects of fying commercially valuable products and serv- gravity offers a new dimension in controlling ices. Nonetheless, there is a strong belief in both process variables such as convection, composi- the scientific and industrial communities that MPS tion, and fluid flow. This may create opportunities research will eventually lead to dramatic break- for understanding and improving ground-based t',roughs in terrestrial and space-based products production methods and, where economical, and processes. To assist this process, NASA estab- manufacturing select materials in space. lished an Office of Commercial Programs in Sep- NASA research on materials processing in tember 1984 to provide a focus for NASA research with potential application and to expand space (MrS) research started in the late 1960s U.S. private sector investment in technologies with relatively simple demonstration experiments with commercial potential. in soliriification, fluid dynamics, and electrophoresis conducted during the Apollo missions. Fur- MPS research and hardware development are ther MPS experiments were carried out during being pursued with interest in Europe and Japan. the three Skylab missions and during the Apollo- In Europe, West Germany has long maintained Soyuz Test Project (ASTP). During the hiatus of the most vigorous national MPS program; the Eu- manned space flight, between Apollo and the ropean Space Agency (ESA) has recently begun Shuttle, NASA continued its MPS research by to conduct a wide range of MPS activities. Euro- using the SPAR (Space Processing Applications pean enthusiasm for MPS research stems from Rocket) sounding rocketv.ogram, drop tubes and ESA's commitment to the development of Space- towers, and research aircraft flying parabolic tra- lab and, as in the United States, from a belief that jectories. The majority of future MPS research will basic MPS research may eventually lead to im- be conducted on the Shuttle, free-flying plat- portant scientific and economic rewards. As a re- forms, and eventually on a space station. sult of ESA Spacelab and other MPS activities, it is likely that Europe will become an important Neither the scientific nor the commercial value source of published information on the behavior of materials research in microgravity is fully un- of materials in microgravity. The Europeans have derstood. Although there may he near-term commercial MPS applications (e.g., certain phar- positioned themselves well to exploit future MPS products and services if they prove commercially maceutical products), the true value of the micro- valuable.2 gravity sciences will not be known until years of basic research and significant imp- :dvements in MPS is not yet an area of international com- space-based hardware have been accomplished. mercial competition: there are no MPS products The National Aeronautics and Space Administra- and the demand for equipment and services is tion's (NASA) MPS program, operating with a mod- generated primarily by the various government est annual budget ($27 million in 1985), has iden- space agencies. The most impodant international tified several scientifically interesting phenomena issue in MPS is how to make the most effective use . f cooperation to share the costs of research 'The gravitational attraction of Earth on a spacecraft in a 400-km and to realize he benefits of this new technology orbit is only about 12 percent less 'han it would be if it were on more quickly. the Earth's surface However, the phenomena of weightlessness occur because the spacecraft and its contents are in a state of free 7Fore,1,iIrty to compete in space manufacturing will depend kill A spacecraft which has achieved orbital velocity has a gravity strongly on availability of the Shuttle to foreign users or on the de- environment of about 10-' g (1 tin- millionth of Earth's gravity) velopment of suitable foreign launch vehicles and carriers.

337 345 338 International Cooperation and Competition in Civilian Space Activities

Some of the MN potential applications for the essing could eliminate the oroblems caused microgravity environment are:3 by nucleation and reduce trace impurities that limit the applications of high-purity Processing of biological materials: Such di- glasses. Such space-based techniques could verse tasks as the isolation of beta pancreatic extend the glass-forming range of many ma- cells to determine how the production of in- terials and result in new and unique glasses sulin is regulated, the isolation of cells from with exotic properties. MPS research may organs that produce various hormones and also help to insprovp ::.,!:..ss processing on enzymes such as urokinase and erythropoi- Earth by providing information on how to etin, and the purification of proteins for re- eliminate gases in glass, and improving search and as pharmaceutical products may homogeneity through chemical interaction. be accomplished in microgravity. On Earth, Ceramics must be prepared by sintering at corgi ection, sedimentation, and buoyancy such high temperatures that they are almost inhibit tha separation of certain lighter-den- invariably contaminated by the container in sity materials. In microgravity, separation which they are made. Container less process- techniques such as electrophoresis, isoelec- ing may offer valuable research opportunities tric focusing, and suspension cell culturing for the preparation of high-purity ceramics. may be accomplished with greater efficiency Studies of fluid and chemical processes: Such and higher purity. studies would be designed to understand the Productinn of large perfect crystals: It may effects of convection. This research would be possible to produce certain types of crys- be applicable to the study of continJous-flow tals in space for use in semiconductors, solar electrophoresis; dendritic growth processes; cells, infrared detectors, and other electronic the growth of very delicate organic crystals; devices. On Earth, the chemical homoge- and the nucleation, growth, and coalescence neity and size of crystals are limited by con- of oubbles, flocculants, colloids and hydro- vection- and gravity-induced growth defects. sols. Apart from the basic scientific interests, It may be possible to control these parame- such studies have important applications in ters and minimize defects in the microgra,ity many industrial processes. environment of space. Investigation of metals, alloys, and compos- i .oduction of glass and ceramics: The micro- ite materials: Microgravity allows research gravity environment may allow the produc- into the basic properties of pure metals, tion of special glasses that are useful in opti- n lac rosegregation and microsegregation dur- cal fibers, high-energy laser applications, and ing solidification of alloys, the role of gravity- cusion research. Use of containerless proc- driven convection in the microstructure of castings, and the preparation of alloys or composites having components with large 'See Materials Processing in Space, Committee on Scientific and Technological Aspects of Materials Processing in Space, National density differences. Space-based metallurgi- Research Council, 1978, Materials Processing in Space Early Ex- cal research may result in the development periments (Washington, DC NASA SP-443, 1980), Materials Proc- of terrestrially useful products such as high- essing in the Reduced Gravity Environment of Space, G IRin- done (ed ), Proceedings of the Materials Research Society, vol 9, temperature turbine blades and new battery 1982 technologies.

MPS ACTIVITIES IN THE UNITED STATES NASA Research istrator for the Office of Space Science and Ap- plications (OSSA) and is directed and adminis- The NASA MPS program (recently renamed the tered by the Director, MSA Division, at NASA Microgravity Science and Applications [MSA) Di- Headquarters. The Director, assisted by a Scien- vision) is a responsibility of the Associate Admin- tific Advisory Committee, determines policy, ob- 346 Ch. 8 Materials Processing In Space 339

jectives, and priorities, and allocates program re- the composition, structure, and morphology of sources. NASA materials processing research is materials processed in space. The MPS program being conducted at Marshall Space Flight Cen- currently supports research in metals and alloys, ter, Jet Propulsion Laboratory, Johnson Space electronic materials, biotechnology, glasses and Center, Lewis Research Center, and Langley Re- ceramics, combustion, and fluid dynamics and search Center. There are also approximately 100 transport phenomena.s university and industrial investigators currently working with NASA on MPS-related projects.4 NASA still uses sounding rockets, drop-tubes NASA solicits proposals for research tasks from and towers, and research aircraft in its MPS work; the scientific community and funds them on the however, the Shuttle is,at present, the only means by which to conduct long-duration micro- basis of merit (established by a peer review process) and relevance to current NASA programs. gravity research. In order to facilitate Government and private research on the Shuttle, NASA has NASA's research activities in MPS have focused developed or encouraged the development of a on the role played by gravity in materials proc- range o Shuttle-related, reusable MPS hardware. esses and the development of better control of Although this equipment is described in greater

'Hearings on Materials Processing in Space, Before the Subcom- detail later in this chapter, it is useful for the pur- mittee on Space Science and Applications of the House Commit- poses of this discussion to list the means by which tee on Science and Technology, 98th Cong ,1st sess , Statement MPS research is or will be carried out (table 8-1). of Richard Halpern, Director, NASA Acrogravity Science and Ap- plications Division, Sept14, 1933 sIbid

Table 8.1. Characteristics of Shuttle Payload Carriers

GAS HITCHIIIKER-G SPARTAN

Teametry More laseiliew down** of send bete el M. 10 1 a NOM NOM Pointing mom liming of peyload operations can be ceonlinMed SIMI. My pointing posbbie 17 ammin alMer t 1040 arc sec sow with mem psyloaf pointing rosomments The mem Mitaft imodemems do mom yea Mona MP oPPOdookkits Payload Sae If IS inches redius 21 ZS inches xi, la 13 mews high OmeMent on CG UM id SPARTAN camer is mission dependent Dimansiens ON SPANTAN 1 as 31 Of31 M 23 OS ins For AAAAAA libs 3 and 3 stalk envelop Wad lima of MO mom the My and SI II bone gm May

limbed Moeda 20010.0010. or SO es Conway IM idlchhiSer 0 is restricted I. paylemle SOO No (Wm emorlreenti miabinoless Man ISO~MeMtna COONId avowal toad., Of aCCOnon011110oll dOlOndioll Oa We and vielota

Lard Access before 2 3 nimbi, 3wiefehe I rsonlh Launch first Acesa. MIL 2 mobs 1 3 melts I mat Landing

111110elon Speclellet Operas two temple ranches and power anal switch Limited Aweless cbeelima woe oe Nam Mesh dialkimMon lb-miemie WNW limil MOW orienlallon release recaplom

Faielmina7 sif L.00CO Mlinnlinelely SO per year 21 hem Sown as M Conway am away six ~Me Vmer WIMP, lit 11 Isv IMO Oppolonlly Ociaber 1101

taboo Oleminments Solely Solely Last,

Lied rtim il13 mends Maim bomb Si.dombhebon Inillellon So Mehl Inetnarent depewleril IMPrmodinwin of nine menthe takoloOntallon LOwInall 1011CMle11 Old Matharical ochaonaOgg Oilinmardallon reminments correndy °NW Interlace Maddllon end safety whom chemical and bielmiksi/MamearbradonaMel Om develemmil ellegmes fiseemba and Means proceilmn ashy 1,0111.11 MOWN

Mahon Durellen Mollie MOW amebae or Mn1Med by bebbYmesh Mulls MIN Morello, 0 Mors Power Whom supply (Cwaterner Suppled) Avellebb IMMO Me Sbabla A sinIM Mama Illallary Impf (O$FC Supplied) Me I Masimon SOO iii aveilable Me 11111 PadaMile hem IMO iii medals UM** ei Omenline M.le An asynchronous illmallinli channel al 1300 Mod An sometwenswil Wale el *MO Mad Madem rate demilina (MOM at II alms lo 1 4 ISM*

Memel. CoMrol Made A Wilic111m0mp0CO011enonway sand. Milled IWIRIPP Prep.... rmied (mbrocompoten) cesiMalee of Mend and Nab momanala la Ms payledd

SOURCE -Attached Shuttle Payload Carriers, Versatile and Affordable Access to Space," NASA, Goddard Space Flight Center,(964

BEST COPY AVAILABLE 347 340 International Cooperation and Competition in Civilian Space Activities

Get-Away Special ,'I45 r2.:.,..:.:,rs Carriers The GAS program was developed by AASA to Carriers serve a similar goal to that of the GAS encourage researchers to take advantage of the programnamely, to maximize the use of the unused capacity which exists on most S iuttle Shuttle bay and reduce the cost of flying small flights. GAS canisters, which are little mon than payloads into space. NASA's current carrier pro- hollow cans mounted in some manner r n the gram, Hitchhiker, is based on the mission-pecu- Shuttle (fig. 8-1), come in two sizes: 5 cubic feet liar support structure (MPESS) developed by Tel- for payloads weighing ip to 200 pounds and 2.5 edyne Brown Engineering for Marshall Space cubic feet for r ayloads weighing up to 100 pounds. Flight Center (fig. 8-2). Although Hitchhiker is still The experimental equipment flown in the canis- in the development stage, the MPESSbasically ters is developed by the user subject to NASA a truss bridge on which GAS canisters or other safety regulations. Prices charged for flying the larger experiments are mountedwas used on GAS canisters are less than full Shuttle prices and Shuttle mission 7. Unlike the GAS canisters or range between $3,000 and $10,000. MPESS, Hitchhiker will provide limited power and command and control functions.

Figure 81.Shuttle Get-Away Special Canister

t Insulated Cylindrical E cover pressure enclosure l

Experiment mounting plate

Experiments

Interface equipment Insulated plate cover

SOURCE National Aeronautics and Space Administration

346 Ch. 8Materials Processing in Space 341

...

. : 4,

410,1;

Photo orsdlt: National Amonautics and Some Administration

This view shows the open cargo bay of the orbiter Challenger in the Ctlter Processing Facility. On the left, the Canadian- built Remote Manipulating System can be seen and six of the seven Get-Away Special Canisters are just below it. The other GetAway Special Canister Is In the front right side of the cargo bay.

Spacelab dependent from Shuttle environmental or time The Spacelab is a pressurized module designed constraints. Relying on technologies originally de- to be carried in the Shuttle payload bay. It is a veloped for sounding rockets, NASA has pro- laboratory that allows MPS and other types of reduced a free-flyer called the Spartan. This free- search to be done in a "shirtsleeve" environment flyer will be used for astronomical and astrophys- (fig 8-3). Spacelab was developed by ESA, but ical payloads which require precise celestial pursuant to prior agreements, was transferred to pointing. Spartan will be able to operate inde- NASA upon completion. pendently from the Shuttle for up to 40 hours. NASA is also working with Fairchild Industries Free-Flyers to develop a free-flyer called "Leasecraft." The F-ee-flyers are u man ned carriers designed to West German Government and the West Ger- be deployed and retrieved by the Shuttle. Such man firm MBB/ERNO developed the Shuttle Pal- free-flying carriers will allow experimentation inlet Satellite (SPAS) as the first free-flyer.

349 342 international Cooperation and Competition in Civilian Space Activities

Figure 8.2. NASA - Goddard Space Flight Center Hitchhiker Payload Mounted on the Mission-Peculiar Support Structure (MPESS)

SOURCE National Aeronautics and Space Administration

Figure 8-3.Spacelab Drawing of the Overall Conception of VFW-Fokker/ERNO Spacelab

SOURCE National Aeronautics and Space Administration

3 5 0 Ch. 8Materials Processing In Space 343

Photo meet: European Spew Agency Tae European-built Spacelab In cutaway view.

Space Station Although it is presently in the design stage, it can be reasonably assumed that some portion of the proposed U.S. space station will be dedicated to MPS research. In addition to its scientific research, NASA has Photocod,:Ns Waal Ammo INN ettO *NM MINInlobution also tried to encourage early U S private sector The Space Shuttle Challenger's Canadian-built remote commercial investment in MPS. NASA wanted manipulator arms grasps the Shuttle pallet satellite (SPAS-01), during proximity operations on June 22. The the private sector to participate in NASA pro- scene has within it a few reflections on the window grams in a more creative manner than was pos- through which It was photographed. SPAS-01 was sible under normal procurement contracts. To ac- developed by the West German firm Messerschmitt- complish this goal, NASA established the Joint Boelkow-Blohm GmbH (MSS). Endeavor Agreement (JEA) and the Technical Ex- iments in NASA ground-based facilities in- change Agreement (TEA). These are contractual cluding drop tubes, drop towers, and aircraft agreements between NASA and industrial part- in order to determine whether a more elab- ners to cooperate on the definition, development orate space experiment is justified. Using the and, in some circumstances, flight-testing of MPS TEA, John Deere and Dupont have proc- experiments and hardware. Under these arrange- essed samples in the Marshall Space Flight ments, no funds are transferred between NASA Center drop tube and KC-135 aircraft. joint and the private sector participants. The type of studies of convection in electrodeposition relationship chosen by the private sector partici- have been carried out by INCO, and studies pants marks the degree of the signatories' com- of the growth and purification of mercury mitment:6 cadmium telluride are in progress with Hon- Technical Exchange Agreement (TEA): The eywell's Electro-optical Division. In addition, TEA is for companies that are interested in there are some 20 new research activities the application of microgravity technology, that are the functional equivalent of formal but are not ready to commit to a specific TEA-sanctioned projects. Research topics space flight experiment. Under such an range from pharmaceuticals, to optical fibers, agreement, a company may conduct exper- to exotic chemistry. Joint Endeavor Agreement (JEA): The JEA is 6Ibid an arrangement whereby NASA and a pri-

351 38-797 O - 85 - 12:QL 3 344 International Cooperation and Competition in Civilian Space Activities

vate sector partner share the costs and risks The Private Sector of developing commercial space ventures. The JEA generally requires a larger financial Although there have been some recent indica- commitment on the part of the industrial par- tions of increased interest, the initial private sec- ticipant than does the TEA. Under a JEA, tor response to NASA's commercial MPS program NASA's partner is expected to develop the was quite reserved. There are several reasons for experimental apparatus and to provide its reservations:9 NASA with limited access to such equipment; NASA, in turn, agrees to provide ac- Absence of Proven Products cess to terrestrial facilities and a specified or Processes number of space flights. In some cases, data The commercial value of low-gravity manufac- from JEA experiments may be held as pro- turing remains largely an interesting conjecture; prietary information by the firm. At the end in the absence of conclusive experimental results of the JEA, should the venture become com- or existing products, the risks involved are simply mercially viable, the company would have too high for most private firms. At least for the to pay the normal Shuttle price for all future near future, the responsibility for proving the flights. JEAs are now in effect with McDon- technical and economic feasibility of new space nell Douglas, Microgravity Research Associ- technologies will rest on the Government, act- ates, Fairchild Industries, Spaceco, Ltd., 3M ing alone or in joint ventures with the private Corp., and Martin Marietta.' NASA is cur- sector. rently giving serious consideration to a number of other JEA proposals. Few Attractive Investments Although only a small portion of NASA's an- Although a number of MPS products, processes, nual MPS budget has been devoted to commer- and services are currently being discussed, few of cial activities, these activities have been widely these are attractive investments. Generally, invest- publicized by NASA and the popular press.8 This ments in MPS research involve high costs, con- publicity has led to disagreements within NASA siderable risks and long or uncertain lead times and the scientific community about the wisdom before a return on the investment could be of emphasizing the yet-unproved commercial realized. \'ue of MPS technology. The potential for development of highly profitable space industries NASA had hoped that the JEA and TEA pro- lends support to NASA's desires for stable or in- grams would encourage a wide range of commer- creasing science budgets and a space station. On cial space activities, but only six JEAs have been the other hand, NASA recognized thata signed since the programs began in 1980. The premature emphasis on yet-unproven technology first of these was signed in January 1980 with could damage its reputation in the scientific and McDonnell Douglas Astronautics Co. (MDAC). manufacturing community and jeopardize future Its purpose was to investigate the commercial vi- funding for science projects. ability of conducting electrophoretic separations in space; MDAC hoped that new and valuable pharmaceuticals might be developed. The next JEA, signed in January 1982 with GTI, a California-based electronics firm, was directed 'The Fairchild Industries JEA involves the building and flight-testing towards development of a multiuse metallurgical of a free-flying platform called "Leasecraft " Although Leasecraft furnace. This JEA was discontinued in January could be used for MN research or production, it is not limited to 1983 because of GTI's inability to market their this application and may be used as a "common bus" for other payloads °Until recently, only about 3 percent of the NASA MPS budget was devoted to purely commercial dctivitiec.This figure is likely 9U 5 Congress, Office of Technology Assessment, Civilian Space to increase substantially as the Office of Commercial Programs in- Policy and Apphcattons, OTA-S11-1 77 (Washington, DC: U.S. Gov. creases its scope of operations ernment Printing Office, June 1982), pp. 219-220, 224-129. Ch 8Materials Processing in Space 345

# !. . .

Photo credit: McDonnell Douglas McDonnell Douglas-Ortho continuous electrophoresis device. concept successfully.") The third JEA, signed in dynamics associated in capillary propellant tanks April 1983 with Microgravity Research Associates in low gravity. (MRA), is directed to the study of gallium arsenide The JEA program offers many attractive bene- crystal growth. The fourth JEA, with Fairchild In- fits to its participants, such as access to NASA fa- dustries, has as its subject the design and flight- cilities and personnel and free flights on the Shut- test of the free-flying Leasecraft. The fifth JEA, with tle. Still, the limited private sector interest in this Spaceco, Ltd., is for the development of a Shut- program is a clear indication of industry's assess- tle payload bay environmental monitoring instrument of the risk involved in pursuing MPS ment. The next JEA, with the 3M Corp., is for the activities. investigaton of organic polymers, crystal growth, and thin film. The most recent JEA, with Martin Entry Costs Are Extremely High Marietta, is directed toward research on fluid Access to orbit is very expensive and will con- "letter from James LaFluer, President, GTI, to James M Beggs, tin..e to be expensive even in the Shuttle ero., par- NASA Administrator, Dec 23, 1982 ticularly if compared with the costs of demol.li,at-

353 346 International Cooperation and Competition in Civilian Space Activities

ing the commercial viability of most Earth-based istration's space policy, national security con- innovations. A Delta-class MPS r ayload including straints, or fluctuations in congressional and integration expenses may involve flight costs in public support. If necessary space facilities are not excess of $15 million. This additional expendi- available when needed, the resulting costly de- ture, incurred well before commercial feasibil- lays could be fatal to a new commercial program. ity has been established, is a departure from normal product development on Earth. The recurring Markets for Some Space costs associated with payload integration and Products Are Underdeveloped space flight, added to the costs of starting materials, flight hardware (potentially tens of millions Unlike innovations that emerge in response to of dollars) and personnel, suggests that a com- existing or clearly possible market opportunities, mercial space venture would have to be assured some space-based products or processes may have of very high revenues before it became an attrac- to create new markets. The absence of a well- tive investment. defined market makes it difficult to project potential sales or return on investment; this makes Although the JEA reduces startup costs by of- it difficult to attract the financial backing neces- fering a limited number of free space flights sary for such endeavors. (MDAC is promised 8, MRA is promised 7) a commercial venture must be able to pay its own costs The difficulties encountered by GTI in its at- after the JEA is terminated. Therefore, the cost tempts to market a metallurgical furnace for re- of gaining access to the Shuttle or a space sta- search purposes make this problem especially tion will have a significant impact on the level clear. At the conclusion of a 9-month marketing of private industrial participation in MPS activities. effort GTI had no firm offer to fly a metallurgical sample in its furnace. Some observers have re- Fear of Terrestrial Competition marked that GTI erred in making a commitment to a furnace that was not versatile enough to cap- Some potential investors believe that whatever ture the entire market in experimental solidifi- can be done in space will eventually be achievable cation. Others have suggested that 9 months was more cheaply on Earth. Though the microgravity too short a time in which to expect to build a mar- environment of space cannot be duplicated, new ket, that their price was too high ($15,000 to technologies have been developed which do $20,000 per sample) and that their expectation minimize the effects of gravity on Earth. In 1980, of a 3-year return on investment was unrealistic a U.S. firm, working with NASA, developed a All of these criticisms reflect the difficulty of a containerless processing system for making spe- firm's trying to define a market while already in- cial glass products." In this system, glass is sus- volved in the complex tasks of technology de- pended within a chamber by sound beams in a velopment and the management of a space-based process called acoustic levitation. Similarly, new business venture. gel electrophoresis and recombinant DNA techniques may one day be able to accomplish more It would appear that the strength of the MDAC cheaply on Earth what McDonnell Douglas is try- and MRA Joint Endeavor Agreements stem at least ing to accomplish with continuous-flow electro- partially from the fact that the products being de- phoresis in space. velopednew drugs and semiconductor mate- rialsare intended for the large, well-defined, and Private Sector Does Not Control dynamic pharmaceuticals and electronics markets. Means of Access to Space Lack of Understanding Access to launches, launch assurances, availa- of the Space Environment bility of support lacilres, and the cost of space transportation may all be influenced by nonbusi- Many industries that may eventually benefit ness considerations such as changes in an admin- from future space research are simply unaware of what microgravity has to offer them. Scientists "Industry Week, Mar 1 1980, p 90 and engineers have not been educated in the use

3 54 Ch 8Materials Processing in Space 347 of the microgravity environment and therefore conceived and designed experiments, often may not investigate how the absence of gravity done in crude apparatus, from which weak con- could aid their work. For their part, managers clusions were drawn and, in some cases, over- tend to focus on development time, risk, and po- publicized. Nevertheless, there is opportunity for meaningful science and technology developed tential returns on investment. As discussed above, from experiments in space provided that prob- space innovation does not seem attractive from lems proposed for investigation in space have this perspective. Although formal, quantitative from the outset a sound base in terrestrial science project selection techniques can be used to pro- or technology and that the proposed experiments ject such factors as rates of return and pay-out address scientific or technical problems and are periods, in the final analysis the decision to in- not motivated primarily to take advantage of vest in new technology is a strategic choice that flight opportunities or capabilities of space facil- depends primarily on a corporate manager's busi- ities (emphasis in original). ness and technical judgments. The business com- Since publication of the STAMPS report, NASA munity's lack of understanding about MPS makes has worked to implement the report's recommen- it difficult for potential commercial space activi- dations. NASA requested the Universities Space ties to compete with other, more traditional, in- Research Association (USRA) to assist in the orga- vestment opportunities. nization and coordination of basic science working groups and to involve a larger segment of the The Scientific Community scientific community in MPS research.13 Since then, the USRA has sponsored science working NASA relies heavily on the scientific commu- groups, seminars, and workshops in the areas of nity, both industrial and university, to generate bioprocessing, combustion sciences, container- ideas for experiments and to provide direction less processing, fluids and transport phenomena, and review for ongoing activities. NASA accepts and solidification processes. Under NASA's direc- unsolicited proposals from the scientific commu- tion, USRA has also established contacts with U.S. nity for studies, theoretical and experimental re- industry and various professional associations that search, or minor developments. Space flight ex- share similar basic science interests. periments must lie proposed in response to specific "Announcements of Opportunity" or The USRA workng groups have also attempted "Dear Colleague" letters. NASA also sponsors to coordinate their activities with scientists from science working I roups to coordinate the interac- ESA and other nations interested in MPS. In 1983, tion between NASA-funded investigators, scien- USRA entered into an agreement with NASA and tists, engineers from universities, industry, and ESA to act as a liaison between the MPS science government labs and flight hardware contractors working groups of the two space agencies." and NASA personnel. USRA has encouraged joint ventures between ESA and NASA principal investigators, and the NASA's initial enthusiasm for MPS research and sharing of experimental facilities. its emphasis on the commercial potential of inspace processing found little immediate support in the scientific community. In 1978, NASA re- '3USRA is a private nonprofit corporation that was organized in quested the Space Applications Board (SAB) of 1969 by the National Academy of Sciences and is presently com- the National Research Council to review the MPS posed of 54 universitiesIt is chartered to provide a means through which unnersities and other research orgai izations may cooper- program. To accomplish this task, the National ate with one another, with the Government of the United States, Research Council formed the Committee on Sci- and with other organizations toward the development of knowl- entific and Technological Aspects of Material, edge associated with space science and technology USRA is further chartered to acquire, plan, construct, and operate laboratories Processing in Space (STAMPS). The STAMP, re- and other facilities for research, development, and education asso- port concluded:'2 ciated with space science and technology "Hearings on Materials Processing in Space, Before the Subcom- The early NASA program for processing ma- mittee on Space Science and Applications of the House Commit- terials in space has suffered from some poorly tee on Science and Technology, 98th Cong ,1st sess., Statement of Dr Guy Rindone, Universities Space Research Association, Sept. "Materials Processing in Space, op cit , p 5 14, 1983

355 34D International Cooperation and Competition in Civilian Space Activities

FOREIGN MPS ACTIVITIES European Space Agency (ESA) European interest in microgravity research began primarily as an outgrowth of ESA's commitment to Spacelab. Spacelab is ESA's largest cooperative project with NASA, involving European expenditures over the last 10 years of approximately f -.billion. ESA was responsible for designing and building Spacelab, and in December 1981, delivered to NASA, free of charge, the first flight unit. The first Spacelab mission flew in No- vember 1983 and involved a joint European- American crew conducting a wir:ety of test projects. Although West Germany has been the main financial contributor, providing over 50 percent of the budget, all ESA member states (except the Republic of Ireland and Sweden), and one of its associate member states (Austria) have partici- Photo credit: National Aeronautics and dome Adnentetretton pated in the Spacelab development program. The Spacelab In prelaunch configuration on Shuttle. West German firm MBB/ERNO is the prime contractor for Spacelab; it was assisted in its devel- centrate on microgravity research. The first flight opment activities by some 40 other European is scheduled for launch in April 1987 and retrieval companies. At the height of the development in September 1987. phase, an industrial work force of about 2,000 was employed on the program.15 EURECA is a reusable payload carrier designed to carry a payload mass of up to 1,200 kg and Spacelab will provide opportunities to conduct to remain in orbit for 6 months. After deployment space-based experimentation in both the physi- into space from the Shuttle, an onboard propul- cal and biological sciences. It consists of a pression unit "ill place the carrier into a higher orbit surized module capable of being carried in the where the drag on its large solar arrays wit! be payload bay of the Space Shuttle and allowing low. Once in its operational orbit, the payload experimenters to work at a variety of projects in will be switched on and operated by remote con- a shirtsleeve environment. Additional pallets are trol. Although the experiments will be highly also available which can be placed in the Shut- automated, they will nevertheless be monitored tle bay to allow equipment to be exposed directly from the ground. By the end of its mission to the vacuum and radiation of space. EURECA's orbit will have degenerated to the In early 1982, eight ESA member states agreed point where it can be recovered by the Shuttle. to undertake a Spacelab Follow-on Program. 16 The spacecraft will then be brought back down The most important element of this program is to Earth, along with its payload equipment and the development of a European Retrievable Car- processed material samples, for refurbishment for rier (EURECA), to be launched and retrieved by its next mission. the Space Shuttle. Funding for this program also In addition to the Spacelab program, ESA, in covers the flight costs and development of the January 1982, established its Microgravity Pro- core payload for the first mission, which will con- gram to encourage basic MPS research (fig. 8-4). The experiments proposed to date can be divided "European Space Agency, Europe Into Space, Paris, January 1983, p 36 into two main areas: life sciences, in which re- "They were Belgium, Denmark, Federal Republic of Germany, searchers can study the effects of reduced grav- Italy, Spain, Switzerland, and the United Kingdom ity on living organisms, including man; and ma-

J5 b' Ch. 8Materials Processing In Space 349

years. Future ESA experiments on TEXUS will concentrate on the fields of metallurgy and fluid pnysics.'7 2. Biorack: The Biorack is a multiuser experimental facility for investigating cell and mo- lecular biology, botany, and radiobiology in the weightless environment of the Spacelab module. The Biorack consists of a "glovebox" for handling experiments, a cooler/ freezer unit to protect specimens prior to launch and after landing, incubators,and a centrifuge to simulate gravity for reference purposes." The firms MATRA, BTM, and Mato omit European Spoof Agency Dornier have responsibility for developing Artist's conception of EURECA reusable payload the thermal conditioning units; Fokker is carrier built by ESA building the "glovebox;" and MBB/ERNO, with several subcontractors, is building the single rack equipment." The Biorack will be Figure 84.ESA Budget for Microgravit' Research flown on the West German D-I Spacelab Program" mission in 1985. 3. Fluid Physics Module: Also designed to be flown in the Spacelab module is the Fluid Physics Module, which will be used to study materials in susoended liquid form (floating zones) in the microgravity environment. A fluid physics module was .)wn on Spacelab- 1 and an improved v?.rcion is planned for the f. D-1 Spacelab flight in 1985. O 2 4. Materials Sciences Double Rack: This microgravity research facility was developed by West Germany and flown on the first Space- lab mission. West Germany has since turned over responsibility for the Double Rack to ESA; it is scheduled to be reflown on the West German D-I Spacelab mission. 0 '982 1963 1964 1985 1986 1987 1988 Although classified as a Spacelab follow-on pro- Years gram, the first EURECA payload will be almost

*June 1982 - 2 4180DM - 01, U N Monthly Westin of Statistics, August 1962 entirely devoted to material and life sciences and SOURCE MBBIERNO therefore will contribute considerably to ESA's Microgravity Program. terial sciences, in which the behavior of fluids. crystals, glasses, and metallurgical systems can Federal Republic of Germany be studied. In order to meet these objectives, ESA West Germany has an aggressive national MPS has concentrated on tou: main program elements: program and also conducts research with ESA or 1. Sounding Rockets: ESA participates in TEXLIc bilaterally with other countries. The Ministry for the West German and Swedish sourx.17ng Research and Technology (BMFT) coordinates rocket program. It had a share of the payload "ESA Annual Report, 1982, p. 54 3n two flights each year since 1982, with fur- '1111A., p. 52. ther flights planned for the forthcoming "Ibid. 357 350 International Cooperation and Competition in Civilian SpaceActivities

chemicals and materials processing have traditionally been areas of German technical and industrial ieadership. The Ministry for Research and Technologypro- vided approximately S50 million for MPS work from 1978 to 1981 and is authorizedtc, spend about $100 million more between 1982 and 1985 (fig. 8-5). These figures represent the totalWest Gelman federal commitment to MPS research. They do not include the contributions of private research programs, other relatedspace activities, or terrestrial materials research. Over the past several years, the West German Governmenthas endeavored to shift a part of the practical research burden to other sources, principally commercial and industrial organizations, andto use available government funds to sustain basic research programs. The German MPS program is intendedto meet the as-yet largely undefined needs of theuser community by conducting a wide variety of basic research projects. The ultimate goal ofgovern- ment support is substantial involvement of West German industry in such areas as chemistry,proc- Photo credit Netis.ial Aeronautics and Space Administration ess technology, metals, composite materials, and European-developed life sciences minilab for Spacelab. crystals.21 Early West German MPS experimentswere car- and funds most West German R&D efforts.Proj- ried on the 1975 Apollo-Soyuz manned mission. ects are managed by the German Aerospace Re- search Establishment (DFVLR), which directsgov- ""Commercialization of Materials Processing and Manufactur- ing in Space," TRW, Defense and Space Systems Group, Apr 14, ernment engineering and test centers, and by the 1981, p 26 German Research Association (DFG),a self-governing organization that allocates funds fromva- rious public and private sources to universities Figure 8.5.Budget for Microgravity Research and scientific societies.20 West Germany'smajor Program' aerospace firms also play a key role in initiating and funding research projects. Germany has placed a strong emphasison materials science and life science experimentsin its space program. Since the West German firm MBB/ERNO is the prime contractor for Spacelab, and West Germany is the major financialcon- tributor (54.9 percent), German interestin Spacelab exploitation has been high. In addition,

1978 1979 198019811982 1383 19841985 zo"Review of N 'lional and Cooperative Space Adivities for the Years Calendar Year 19t. UNCOPUOS, A/AC 105/286/Add 1, Feh 19, aJune 1982 - 2 46C..44 = 1$, U N Monthl; Bull -4 Statistics. August 1962 1981, pp 34.35 SOURCE MBBIERNO

35 Ch. 8Materials Processing in Space 351

Several methods are now used: suborbital sound- German Oberth Society, which promotes ing rockets, small self-contained payload pack- space research, has reserved a flight. ages (so-called "getaway specials") attached to Spacelab: West Germany is supporting ma- the space Shuttle, and full-scale Spacelab mis- jor experiments on Spacelab and was re- sions. The Germans are examining future flight sponsible for the development of the Mate- opportunities using free-flying automatic exper- rialsScience Double Rack (MSDR), a imental units for longer periods of time than can materials processing laboratory. A Wel be attained with the present Shuttle/Spacelab sys- German-sronsored Spacelab mission, D-1, tem. Primary elements of the West German MPS is scheduled for 1985. The D-1 will carry ex- Program are:" periments for tie West German Space Pro- gram, ESA, France, Italy, and NASA. Infor- TEXUS (technological experiments under mations from all the D-1 experiments, except miLrogravity): Certain experimerts are be- NAVEX, a proprietary communication and ing flight-tested using British-built Skylark navigation experiment, will be freely dissem- sounding rockets.Since1977, TEXUS inated. Planning has already begun for a D- launches have flown over 100 MPS experi- 2 mission which will be devoted primarily ments. The program presently calls for two to microgravity research. TEXUS launches per year. A number of ex- SPAS (Shuttle pallet satellite): SPAS is -4 car- perimental facilities are already available to rier which may be operated either in the users, and more will be added as demand Shuttle bay or in a free-flying mode. SPAS increases. The TEXUS program began as a was developed by MBB/ERNO as a corn- cooperative project with Sweden, using the Kiruna range as a launch site; since 1982, ESA has also participated in TEXUS. West German experiments have also flown on U.S. SPAR sounding rockets. MAUS (autonomous materials science experiments in microgravity): The MAUS program employs standardized containers similar to those NASA makes available to its "Get- Away-Special" (GAS) customers and instruments derived from the TEXUS program to conduct small MN experiments on the Shut- tle. The BMI-T has paid for 25 GAS flights; one was used on STS-5 and the rest will be used at a rate of 2 to 4 a year over the coming years. The Bit..7 has also purchased six CAS canisters which they modified for use on other carriers. On STS-7, three MAUS experiments in GAS canisters were attached to the OSTA-2 structure, and two experiments mounted on the SPAS structure. Two further MAUS experiments were flown on SPAS during the SPAS reflight mission, STS-11. The West German companies MBB/ERNO, Kaiser- Threde, and Dornier have reserved GAS Photo orada National Aeronautics and dome Administration flight opportunities. In addition, the West View of SPAS (Shuttle Pallet Satellite) prior to flight on STS-7. The payload consists of a beamlike structure which fits across the cargo bay and contains both self- "Gottfried Greger, "The German Material Processing in Space contained power and attitude control systems which Activities," paper presented at The Twentieth Goddard Memorial allow it to be deployed and retrieved by the orbiter's Symposium, NASA Goddard Space Flight Center, Mar 17-18, 1982 remote manipulator arm.

35y 352 International Cooperation and Competition in Civilian SpaceActivities

pany-funded venture with financial assist- In general, the French effort is smaller andmore ance from the BMFT. It is the first of a new research-oriented than the West German. CNES generation of free-flyers designed to take has studied since 1978an ambitious program advantage of the present and future needs called "Solaris," an unmanned orbitalspace sta- for long-duration facilities in space. SPAS is tion which would be able to conduct MPSex- able to supply limited power, cooling, and periments, perhaps on a commercial basis (fig. utilities to a payload It currently has no pro- 8-6). Solaris could be orbited byan Ariane-4 pulsion system but has a modest station- launcher, offer about 15 kilowatts ofpower and keeping capability. The first SPAS was in-orbit data processing, andoperate for up to launched on STS-7 to test the deployment 15 years. There has been no significantmove- ability of the Shuttle remote manipulator. ment to pursue the Solaris concept. Thisseems SPAS was reflown but not deployed on STS- to be the result of the French preoccupation with 11 in February 1984. Ariane development, the belief that MPS doesnot EURECA (European retrievable carrier): Al- offer near-term commercial opportunities, anda though it is an ESA project, the primecon- recent change in French policy that acknowl- tractor for the EURECA is MBB/ERNO and edges the usefulness ofman in space for some West Germany will supply the major share types of experimentation. Recent French inter- of the funding. EURECA is heed on the SPAS est in the Hermes (see ch. 5) manned, reusable structural concept butill have greater space plane, would seem to confirm this trend. payload capacity, power, cooling, and a pro- The Hermes would likely be useful for MPSre- pulsion system. search and for launching and recovering free- flying platforms. France It is conceivable that Hermesor Solaris might French MPS activities are modest ;71scope, with be accepted as a major project for ESA during a budget of approximately $1 million to $2 mil- the 1990s, thereby spreading the cost and stim- lion per year. Bilateral materials processingex- ulating MPS research activities ina number of periments have been conducted with West Ger- member countries not presently pursuing such many and the U.S.S.R. A Franco-Soviet crystal investigation. These projects not only create in- growth and solidification experimentwas carried creased demand for Ariane launchers, butoffer out aboard the Soviet manned laboratory, Salyut- European alternatives to participation ina U.S. - 6, sevcial more experimentswere conducted on developed space station. Salyut -7, and future cooperative MPS research is anticipated. French experimentson crystal Japan growth and the dynamics of metal alloy solidification were conducted on Spacelab-1. In addition, Japanese MPS activities began in 1973 withan the French Atomic Energy Commission (CENG) experiment flown on Skylab. Further research is and NASA are planninga cooperative project being conducted on the Space Shuttle, Spacelab and the TT-500-A, a Japanese suborbital rocket. called MEPHISTO (Materielpour l'Etude des Phe- The TT-500-A first flew in September 1980; since nomenes Interessant de la Solidificationsur Terre et en Orbite).23 Through this project the CENG that time, five additional flights have beenaccom- is developing a metallurgical furnaceto be used plished. The Japanese have also reserved one-half of a Spacelab flight in 1988 (the First Materials in the NASA MPS program. CNES has alsore- Processing Test, or FMPT). Project selection and quested to fly, on a reimbursable basis,a crystal growth experiment on Spacelab-3. hardware development for this flightare currently under way; at present, 45 materials processing experiments and 17 life science experimentsare planned."

z3) J Favier, Y Malmelac, et al , "MEPPISTO Research Equip- 24A Sawaoka, "Japanese Efforts Towards Materials Processingin ment for the Study of Solid/Liquid Interface Destabilization in Metal Space," Manufacturing in Space, L Kops (ed.), The Winter Annual Alloys," 33d Congress of the International Astronautica' Federa- Meeting of the American Society of Mechan.ral Engineers, Boston, tion, Sept 27-Oct 2, 1982, Paris, France MA, Nov 13-18, 1983, PED-Vol 11, p 40. 3t30 Ch. 8Materials Processing in Space 353

Figure 84.Sketch of the Proposed Solaris Orbital Station With (top centre)One Payload Recovery Capsule Being Ejected for Reentry

1 Payload fairing in raised pobition 2 Payload 3 Docking system 4 Reentry body ejec- tion mechanism 5 Synthetic aperture radar antenna 6 Proximity sensor for docking 7 Housekeeping systems 8 Thermal radiators 9 Furnace entrance port 10 Relay satellite link antenna 11 Earth sensor 12 Sun sensor 13 Ground link antenna 14 Interface with launch vehicle 5

SOURCE. CNES

In 1982, Japan's Council for Science and Tech- with NASA on the development of a space nology advised the Prime Minister that MN was station. one of the scientific fields meriting urgent research attention.25 The Science and Technology Soviet Union Agency (STA) was then given responsibility for MPS experiments have hid a high priority on organizing a 5-year research program. The first aboard the 2 years are to be spent conducting basic and recent Soviet space flights, especially theoretical research; the third and fourth years Salyut-6 and Salyut-7 orbiting laboratories.26 Re- search has been conducted in both materials are reserved for terrestrialexperimentation to result in the development of the flignt hardware for processing and the life sciences. Two furnaces, the FMPT, which would occur in the fifth year. the Splav-01 and the Kristall, have been used to conduct experiments on semiconductors, crystal Although the STA has primary responsibility for growth, alloys, glasses, and metal oxides. Samples the Japanese MPS program, a committee has analy- been established to coadinate STA activities with have been returned to Earth for detailed those of other government agencies(e.g., sis. Approximately 300 to 350 Soviet scientists are NASDA), universities, and the private sector. reported to be actively engaged in materials research related to space processing.27 The Japanese have no current plans tobuild a separate platform, such asSolaris, or a free- flying carrier, such as SPAS or EURECA. However, 28. Belitsky, "Soviet Manned Space Flight 20 Years On," Space- Japan has expressed a willingness to cooperate flight, vol. 23, No. 5, May 1981, pp. 154-155. l'"U S. Must Spend More to Maintain Lead in Space Technol- ogy," GAO-FGMSD-80-32 (Washington, DC: U S. General Account- "Ibid , p 41 ing Office, lan. 31, 1980), p. 21.

361 354 International Cooperation and Competition in Civilian Space Activities

The Soviets have also conducted research into and McDonnell Douglas.28 e:ectrophoretic separation techniques in space. Reports indicate that these experiments are simi- 29T Chesanova, Space biotechnology Experiment Furthers Work on Superpure Vaccines, Leningradskaya Pravda, May 22, 1983, No, lar to those presently being conducted by NASA 119, p 4, col1-3 (Abstract Daily SNAP, June 8, 1983).

MPS PRODUCTS, SERVICES, ANDEQUIPMENT It is impossible to make accurate predictions portance of the first computer or airplane to the about the future size and vitality of the markets et,nomy of the United States, it is difficult to esti- for MPS products, services, and equipment. The mate the future role for MPS products. On the potential for the development ofan MPS indus- other hand, not all new technologiescan be suc- try in the United States and elsewhere is depen- cessfully commercialized. Nuclearpower ar.f_i. dent on a variety of factors including continued supersonic transportation are examples of tech- government-funded basic research, availability of nologies which offered great promise but have reliable low-cost space transportation,access to had limited commercialsuccess. medium- or long-term MN facilities suchas free- flyers or a space station, competition fromter- The most likely candidates for commercializa- restrial processes, and serendipitous discovery of tion now appear to be certain pharmaceutical commercially viable MPS products. products and crystals for use in the electronics industry. Other countries have demonstrated considerable interest in MPS research and hardware de- Pharmaceuticals velopment; this could eventually translate into competition .Jr. the U.S. private sector. The U.S. The separation of biological materials using commitment to development of an MPS science techniques such as electrophoresiscan be signif- community, the existence of the Shuttle, and icantly enhanced in the near-zero gravity envi- NASA's encouragement of commercialspace ac- ronment of space. Electrophoresis is the move- tivities give the United States important advan- ment of particles in solution when they are placed tages. These advantages will diminishover the under the influence of an electric field (fig. 8-7); next several decades as access to space becomes because particles have different charges and more routine and the understanding of the ad- sizes, they will move at different speedsaway vantages and limitations of microgravity technol- from one electrode tc wards another withan op- ogy become more widely known. posite charge. This natural movement allows the segregation and isolation of different components Potential MPS Products of a mixture." On Earth, gravity reduces both the usable concentration and quantity of themate- Basic MPS research in the United States and rial being separated. Tests performedon STS-4 elsewhere has, to date, produced onlyone mar- (June 1983) as part of the MDAC/NASA Joint ketable product.29 As knowledge of the micro- Endeavor Agreement demonstrated 125 times gravity environment increases, it is possible that greater concentrations and 463 times greater major unforeseen scientific advancesas impor- quantities than could be obtained from equiva- tant as penicillin or microcircuits may result. Such lent ground-based units.31 advances could conceivably revolutionizeex- isting terrestrial markets and create entir 'ynew markets. Just as it was difficult to assess t.e im- 3°See generally, D W Richman, "EOS-Electrophoresis Opera- tions in SpaceA Promising Ne Era of Business in Space," Man- ufacturing in Space, L Kops (ed ), The Winter Annual Meeting of 29The product is monodisperse latex spheres Itwas manuflc the American Society of Mechanical Engineers, Boston, MA, Nov. tured by Particle Technologies ina Getaway Special Canister The 13-18, 1983 spheres are used in various medical calibration techniques. , p 141

362 Ch. 8Materials Processing in Space 353

Figure 13.7.Continuous Flow Electrophoresis Figure 11-8.Annual Market Potential for Electrophoresis Collection outlets 50 F 25 percent market capture USA only 0 ,Z 40 c 0 30 on P. S20

0.19). To 1P m 2 0 0 2 4 8 8 10 12 Number of products EOS Industry SOURCE McDonnell Douglas.

specifications for crystalline and chemical perfec- tion." Although silicon remains the material of primary interest to the electronics industry, attention has also been directed towards starting materials such as gallium-arsenide (GaAs) and mercury-cadmium-telluride (HgCdTe). Today. the chemical and crystalline imperfections of these Carrier fluid materials make them only marginally suitable for

Sample inlet device fabrication. It is possible that significant improvements in the properties and yields of Continuous flow electrophoresis separates the sample into individual particle streams semiconductor materials can be achieved by pro- SOURCE McDonnell Douglas ducing them in space. NASA researchers have performed a number Before signing its JEA with NASA, MDACin of experiments on these materials and NASA has conjunction with its industrial partnerOrtho entered into a JEA with Microgravity Research As- Pharmaceuticalsconducted a market analysis to sociates to investigate the commercial production determine potential commercial applications for of GaAs crystals. High-quality GaAs crystals might electrophoresis. This analysis led to the identification of 12 pharmaceutical products that might be used for:34 profitably be produced in space. MDAC esti- very high-speed microwave circuits (10 to mated the annual domestic market for these 150 gHz); products to be in excess of $7 billion (fig. 8-8).3' radiation-resistant, high-speed signal process- According to MDAC, these are conservative es- ing on missiles; timates based on the capture of 25 percent of the high-speed signal processing with integral projected annual domestic market of each lasers for readout through fiber optics; and product. semiconductor radar arrays on airplanes and satellites. Crystals 13A. F. Witt, "The Impact of Space Research on Semiconductor Semiconductor device technology requires rea- Crystal Growth Technology," Manufacturing in Space, L. Kops (ed.), sonably priced, single-crystal wafers that meet The Winter Annual Meeting of the American Society of Mechani- cal Engineers, Boston, MA, Nov. 13-18, 1983, p. 43. ""Space Station Needs, Attributes, and Architectural Options," ""Commercial Utilization of a Space Station: New Business Op- McDonnell Douglas Astronautics Co , Huntington Beach, CA, NASA portunities" (Downey, CA: Rockwell International, SSD 83-0046, contract NASw-3687, Task 1, April 1983, pp. 36-39. March 1983), pp. V-2-V-16. 363 356 International Cooperation and Competition in Civilian Space Activities

The primary initial purchasers of space-pro- as the applications for in-space research be- duced GaAs crystals would be the military; it is come more widely known. possible, though not certain, that the civilian elec- There is a need for MPS equipment such as tronics industry would also be a major purchaser carriers and furnaces, both for specific ap- of GaAs crystals. Figure 8-9 illustrates the poten- plications and for basic research. tial future demand for space-produced GaAs crys- At present, the long lead time between con- tals; because of the complex and rapidly chang- ceptualization and flight of an experiment ing nature of the electronics industry, and the and the cost of custom-fitting each experi- potential for competition from terrestriallyman- ment into the Shuttle are barriers to greater ufactured GaAs crystals, no attempt is made here use of the Shuttle as a research tool. to assess the accuracy of the figures presented. Th, .,e findings indicate that there may be opportunities for the private sector profitably to Potential MPS Services offer MPS services and equipment. Most of the and Equipment Technical Exchange Agreements (TEAS, discussed above) between NASA and industry have been U.S. Activities designed to gain a better understanding of ter- Recent experience with NASA and private sec- restrial phenomena. John Deere & Co. entefrA tor MPS experiments has revealed that: into a TEA in 1981 to study the solidification of cast iron. The purpose of this research was to gain There is a weak but discernible demand for a better understanding of how the graphite for- reasonably priced research facilities for in- mation of cast iron influences the metal's prop- space experiments; this demand may expand erties.

Figure 8-9.Demand for Space-Produced GaAs(millions of dollars) 8

1990 1991 1992 1993 1994 1995 1998 199V 1998 1999 2000

Years SOURCE McDonnell DOUQIIIII

364 Ch. 8Materials Processing in Space 357

INCO Research & Development Center, Inc., of interaction between scientist and experiment signed a TEA with NASA in 1982 to investigate that is not now possible.36 the basic properties of electroplating. Similarly, JEA proposals submitted in 1983 to NASA by Dupont entered into a TEA in 1982 to explore Baia Aerospace and Teledyne Brown Engineer- the catalytic properties of alloys. Such activities ing suggested another approach to MPS service indicate a potentially broad industrial interest in development. Under each of these proposals, the obtaining low-cost experimental data. This opens private sector participant would provide a car- up a number of opportunities for private sector rier to fit in the cargo bay of the Shuttle. These operation of service-oriented activities, such as carriers would supply utilities such as power, the vision of generic test equipment, com- cooling, and telemetry; NASA payloads and pay- mon-use buses to fly small user-specific experi- loads of opportunity would be attached to the ments, and integration services to reduce the carrier at any of a number of common use complexity of NASA/private sector interaction. "ports." If one accepts this interim goal, the question Each of these JEAs requested the opportunity then becomes how best to pursue it. One way to assume the marketing and integration functions is to focus on reducing the cost of experimental for all future MPS experimental payloads. The in- results per sample, thereby increasing both the tegration (preparation of payload and placement pool of potential users and the amount of infor- into Shuttle) of MPS payloads is considered essen- mation obtained over a given period of time. This tial to each of these JEAs, since this would pro- basic approach was unsuccessfu'iy attempted in vide an assured source of income while build- GTI's Joint Endeavor Agreement with NASA. GTI ing the commercial market for this service. had intended to fly on the Shuttle a metallurgical Integration for MPS payloads is currently being research furnace designed to accommodate a corducted under contract for NASA by Teledyne large number of experimental samples. Under the Bro,,1 Engineering. terms of the JEA, the furnace was to have been flown four times at NASA's expense in order to NASA's reluctance to decide between the Ball assess its commercial viability. GTI's clientswould and Teledyne proposals was based in part on the have had the opportunity to obtain data from applicants' request that NASA experiments be samples of their choice at a fraction of the cost flown on commercial carriers, and in part on of fielding their own instruments (discussed above). NASA's interest in developing what eventually became the Hitchhiker program. One U.S. firm, Instrumentation Technology As- sociates, Inc. (ITA), has announced that it wishes NASA's JEA with Fairchild Industries is another to enter the MPS equipment market by selling opportunity for a private sector-provided MPS standardized experimental modules which would service. The Shuttle and the Shuttle/Spacelab fit into NASA's GAS canister. ITA plans to offer combination have three important limitations: customers the option of the module structure by 1. The movements of crew members aboard itself, a complete module with experiment avi- the Shuttle cause micro-accelerations which onics and lease of a complete module for a flight, can interfere with results of certain MPS ex- or rental space inside a canister flown by ITA.35 periments. Another private firm is investigating the prac- 2. Shuttle flight duration is only 10 days or less, ticality of a fee-for-service laboratory to operate and many experiments will require longer in conjunction with the U.S. space station. Such periods of microgravity. a laboratory would allow customers to buy a 3. The Shuttle does not have adequate power number of days or hours of time to perform ex- for certain MPS applications. periments. It would eliminate the need for frequent Shuttle flights and would Gllow a degree

'6"Boo7.Allen, Weinberg Report on Space-Business Prospects," "AlatIon Week and Space Technology, June 25, 1984 Space BusIness News, Jan2, 1984, p 4

365 358 International Cooperation and Competition in Civilian Space Activities

Fairchild plans to develop a small platform When NASA began to consider developinga called "Leasecraft" which could providean alter- carrier that could fly on short-notice, space- native to Shuttle/Spacelab activities (fig. 8-10). available basis (a concept which has had several Leasecraft is a spacecraft bus designed to provide names and is currently known as "Hitchhiker"), services such as power, communications, data MBB/ERNO informally proposed the use of SPAS. handling, and propulsion for attitude control. The NASA's indecision regarding its own carrier customer supplies the payloadin this case, an needs, the JEA proposals of Teledyne and Ball, MPS experiment or production facilitywhich is and a general reluctance to engage in quasi-com- then attached to the Leasecraft. The Leasecraft mercial activities with foreign partners have pre- is then launched aboard the Shuttle and trans- vented a positive response to this suggestion. ferred to a free-flying mode foran indefinite amount of time. The Shuttle would service the The MBB/ERNO "payload support system" Leasecraft, supplying it withnew feedstock and (PASS) has already been flown eight times on returning processed materials to Earth 1..easecraft West German MAUS missions. The PASS fits inside a standard NASA GAS canister and includes is not designed to be returned to Earth to bere- fitted with new cargo, as is the EURECAor SPAS, an experiment mounting structure, main power nor is it designed to operate in the Shuttle bay battery, experimental control units, housekeep- as would the carriers proposed by Ball and ing sensors, and data evaluation units. MBB/ Teledyne. ERNO is now marketing the standardizedsup- port system developed for the MAUS program Fairchild proposes to provide customers with to NASA get-away-special customers.37 a turnkey operation. It would handle all at rangements for launch, servicing, and return of proc- The ESA project, EURECA, although smaller essed materials from space. The customer would and less powerful than Fairchild's Leasecraft, not own, but rather would lease this spacecraft. would offer similar utilities (e.g., power, cooling, It is possible that McDonnell Douglas' electro- propulsion, attitude control, and telemetry). phoresis operations will provide the first customer Howeve., Fairchild will be developing only the for the Leasecraft. spacecraft bus (the Leasecraft); ESA, in addition to developing the bus (EURECA) will also provide Foreign Activities multiuse MPS hardware. The first EURECA flight, planned for October 1987, will carry a payload West German and ESA activities in the devel- of six experimental facilities, three of whichwere opment of "carriers" and "free-flyers" allow developed for Spacelat '13 them to offer commercial MPS services similar to those proposed by Ball, Teledyne, and Fair- These instruments and the majority of the ini- child. The West German SPAS and ESA's EURECA tial EURECA missions are oriented toward build- reflect an important European commitmentto the ing basic scientific knowledge of physical phe- development of space facilities thatare Shuttle- nomena in microgravity. Applications exper- compatible yet reasonably independent of U.S. iments are now being left to various nationalpro- budgetary and political influence. grams working in association with private firms. ESA would like to fly the EURECA aboutonce When MBB began developing the SPAS, it every 2 years, and is discussing with NASA a hoped, like Fairchild, to offer a turnkeyservice cooperative arrangement to provide sufficientex- to customers willing to pay a broker to provide the payload structure and Shuttle integration and " "MBB Sells GAS Payload Support," Space Business News, Jan. to do the necessary flight negotiations with NASA. 30, 1984, p. 8 381) An automatic mono-ellipsoidal mirror furnace for crystal In addition to MPS payloads, MBB also expects growth experiments (developed for Spacelab), 2) a solution-growth to use the SPAS as a bus for national and Euro- facility for diffusion-controlled crystal growth (developed for Space- pean scientific, application, and communication lab), 3) a protein crystallization facility (developed for Spacelab), 4) a multifurnace assembly .;) an automatic gradient-heating facil- satellites. ity, and 6) a multiuser life-sciences facility

36 f.; Ch 8Materials Processing in Space 359

Figure 8-10.Leasecraft Baseline Concept

Fairchild Leasecraft satellite with a McDonnell Douglas biological processing unit is grappled here by the manipulator arm. The barrel-shaped resupply module on top containing processed material will be removed and replaced by the new mod le in the payload bay that contains raw biological material for processing.

SOURCE Fairchild Spa Co and Elactronice Co

367 360 International Cooperation and Competition in Civilian Space Activities

periments and funding to maintain this level of Political considerations: Should ESA adopt a activity." ESA is also investigating the potential "buy European" attitude towards MPSre- for commercial use of EURECA and has consid- search, it is conceivable that EURECA could ered transferring the responsibilities for the car- become the carrier of choice for all European rier to a private firm.40 MPS experiments. The primary buyers of carriers, free-flyers, and Technical considerations: CommP-:ial MPS other MPS equipment are government space operations will have specific neeus for pow- agencies such as NASA, DFVLR, and ESA. The er, telemetry, and other vital utilities. Mc- Donnell Douglas has indicated that, as pres- sellers in this market are, for the most part, aero- ently configured, neither the existing SPAS space corporations working under contract for nor the proposed EURECA could meet its national space agencies. At present, most firms power demands. The Fairchild Leasecraft, if involved in MPS research, such as MDAC, 3M, and MRA in the United States and MBB/ERNO developed, would seem to be able to meet these needs. European participation in the in West Germany, have designed and built their own test equipment. future MPS equipment market will be based, in part, on the ability to compete technically The vitality of a future market in MPS equip- with the U.S. private sector. rririt will depend on developments in commer- Market considerations: To date, Fairchild In- cial products and services. For example, should dustries has been unable to attract custom- McDonnell Douglas develop a pharmaceutical ers to its Leasecraft concept. It is possible that which can be profitably produced in space, it it will be many years before there is a strong would be necessary to graduate from Shuttle demand for commercial MPS production operations to a free-flyer. MDAC estimates that equipment. The EURECA's ability to fly nu- it might need anywhere from 8 to 14 free-flyers merous small payloads and the existence of to engage in a successful commercial ,,enture. It multiuse experimental equipment may make has considered the Fairchild Leasecraft, a Hughes- it the carrier of choice for conducting pre- designed free-flyer, MBB's SPAS, and the EURECA. commercial flight tests. MDAC has also considered developing and build- Financial considerations: Assuming a rough ing its own free-flyer. A similar scenario can be technical equivalence between U.S. and Eu- imagined for any of the proposed space products ropean MPS equipment, competition will be discussed above, all of which would need more based on cost. This may be significantly in- than the Shuttle to engage in successful commer- fluenced by direct or indirect government cial operations. subsidies. Such subsidies may be the inci- The demand for Shuttle-compatible carriers dental result of government R&D policiesor and related experimental equipment will most the direct result of a policy to promote the sale of this equipment. likely increase steadily throughout the decade. The percentage of this equipment which is avail- U.S. domestic policy: The Shuttle is, at pres- able commercially as opposed to through gov- ent, the primary means by which to conduct MPS research and manufacturing. The Euro- ernment space agencies will depend on the suc- peans are therefore subject to U.S. policy de- cess of current and future private sector proposals to conduct the integration and marketing of ex- cisions regarding access to and cost of Shut- tle services. Unless Europe develops perimental services. an alternative to the Shuttle for MPS research Development of the SPAS and ESA commit- (e.g., the Hermes vehicle), the commercial ment to EURECA ensure at least a limited Euro- success of European MPS endeavors may de- pean presence in the international MPS equip- pend on U.S. domestic space transportation ment market. The extent of this presence is policies. It is important to note that in other dependent on: important space technologies (space trans- "1 M Lenoroviti "FSA Offers EURECA Platform for Shuttle portation, communication satellites, and re- Aviation Week and Space Technology Oct 24, 1983, p 75 mote sensing) the Europeans have chosen 4"Ibici not to rely exclusively on U.S. technology. 368 Ch. 8Materials Processing in Space 361

COOPERATION IN MPS There is substantial foreign interest in micro- Spacelab mission. In both instances, flights were gravity research. Since the United States controls arranged on a "no exchange of funds" basis. the Shuttle, Spacelab, and other hardware essential to this research, it is a desirable partner for Foreign Policy cooperation. It is important to examine the value of such cooperation to the U.S. space program, Development of space technology is a demand- and, more generally, to long-term commercial ing and highly visible undertaking in which na- and foreign policy interests. tions have traditionallyinvestedsubstantial amounts of financial and political capital. MPS Advancement of Science is certainly no exception to this general rule. The potential benefits of cooperative MPS research The primary reason for pursuing international are not limited to such tangible items as monetary r:ooperation in MPS is to advance the microgra- return or technical advances, but include such vity sciences. Since NASA was founded it has pur- intangibles as national prestige and the desirability ,..ued a vigorous program of international coop- of maintaining stable relationships with other eration in the space sciences.4' Recently, as countries. Decisions about the level of internation- missions have become more complex and expen- al cooperation that NASA wishes to pursue will sive, and therefore more infrequent, a broad in- undoubtedly influence the investments and pro- ternational interest in space science has allowed grams of other countries. To the extent that important scientific work to go forward which NASA's decisions have a negative effect on the could not have been done by the United States space programs of other countries, they may be alone. As the space programs of the Europeans less willing to support U.S. foreign policy objec- and Japanese continue to grow in size and so- tives in space and elsewhere. phistication, so will the importance of interna- With the exception of terrestrial facilities and tional cooperation in the space sciences. sounding rockets, the Shuttle is the only non- Shuttle Mission 7 provided an excellent exam- Soviet means available for the conduct of micro- ple of international cooperation in MPS re- gravity investigations. As a result, foreign space search.42 On this mission, NASA entered into an hardware has been designed to take advantage agreement with MBB/ERNO, a private West Ger- of the special characteristics of the Shuttle. Such man firm, to use the SPAS to test the Canadian hardware includes the ESA Spacelab and all of remote manipulator system. Although NASA and its laboratory equipment, the future EURECA, MBB entered into a formal contract for reim- West Germany's SPAS and MAUS canisters, and bursement for the flight of the SPAS, the cost was France's MEPHISTO furnace. Future decisions re- discounted to reflect the value to NASA of hay- garding Shuttle and Spacelab pricing and availa- ing the SPAS as a test article. Also on STS-7, three bility should be made with Cie understanding that MAUS units were flown as a part of an experi- other countries have also made substantial eco- ment by NASA's Office of Space and Terrestrial nomic and political investments in this tech- Applications (OSTA-2). NASA and BMFT agreed nology. that the OSTA-2 flight opportunity would be matched by the reflight of the Materials Experi- Foreign Sale of U.S. Technology ment Assembly (MEA) on the West German D-1 Until recently, the United States held a virtual monopoly on the sale of space services and equipment. Now, even though the demand for

"See generally U S Congress, Office of Technology Assessment, such products is increasing, so is the number of UNISPACE '82 A Context for International Cooperation and Com- capable suppliers. It is, therefore. important to petition, OTA-TM-ISC26 (Washington, DC U S Government Print- examine what role international cooperation ing Office, March 1983), app B. ',Craig Covault, "Shuttle 7 to Carry Multinational Payload," Avia- might play in the promotion of these U.S. space tion Week and Space Technology, May 6, 1983, pp 52-57 goods and services. 362 International Cooperation and Competition in Civilian Space Activities

As a result of the unique characteristics of the creation of an International Microgravity Lab Shuttle and past NASA cooperative projects, mdst (IML) to allow the international sharing of MPS foreign MPS research will rely in some part on flight equipment. U.S. facilities. It might be possible to translate this reliance into an economic advantage for the The IML concept, developed by NASA's Space- United States. To the extent that foreign MN pro- lab Flight Division, envisions that the United grams remain dependent on the Shuttle, Shuttle States can reduce the cost of Shuttle flights and use is expanded and the cost of similar U.S. proj- the "rent" of Spacelab as a means to gain access ects is reduced. Policies that discourage foreign to European hardware. Discussions have focused use of the Shuttle by charging high prices for its on the life science and materials hardware (pri- use or limiting access serve to increase the rate marily the ESA Biorack and West Germany's Ma- of speed at which alternatives to the Shuttle will terials Science Double Rack), though the free- be developed. flyers, SPAS and EURECA may eventually enter the negotiations. The Europeans have responded Currently NASA and the private sector have dis- favorably to initial NASA inquiries, and there are cussed the development of a range of MPS hard- feasibility studies under way on both sides of the ware, including carriers, experimental equipment Atlantic. such as furnaces, and free-flyers. Cooperative programs that encourage the use of U.S. hardware The assumption underlying the IML is that most increase the poteat;a1 for eventual sales of such current MPS research seeks scientific knowledge hardware. about the microgravity environment. Given this common goal, the !ML would reduce duplicative activities, allow cost sharingparticularly with re- Cost Savings gard to experimental hardwareand encourage As a result of their interest in Spacelab and in use of the Spacelab and the creative interchange MPS generally, the European countries and Ja- of ideas. Whether or not the IML is approved, pan have developed, or are in the process of de- it raises an important issue. Unless the United veloping, valuable experimental hardware. Much States is prepared to commit more of its public of it is designed to be reflown and can support and private resources to space than it does now, a number of experiments. In recent years, NASA it cannot hope to maintain preeminence in all as- resources have been directed primarily to the com- pects of MPS technology. Given the likely con- pletion and flight testing of the Shuttle. As a restraints on the Federal budget, international coop- sult, in select areas of MPS research the United eration will play an increasingly important part in States is behind in the development of useful hard- future MPS projects. ware. This fact has caused NASA to suggest the

POLICY OPTIONS

In the near future, the United States will have "etween the U.S. private sector and foreignsup- to make important decisions concerning the pi.cyseither private sector or governmentdoes proper roles of international cooperation and not vei ex'st. However, the MPS research of ESA, competition in the microgravity sciences. So far, and If Frame, West Germany, and Japan, clearly commercial sales in MPS have been limited to the indicates the intention to pursue potentialcom- hardware supplied to NASA and foreign space merci41 MPS applications. It is important that the agencies for experimental purposes. Competition. U.S. Government begin to consider whether, and

3!() Ch 8-- Materials Processing in Space 363 to what extent, it will support the corm,.ercial in- companies, A commitment to basic research terests of the U.S. private sector should interna- would involve actions such as: tional competition become a reality. Increase funding for NASA research: Histori- The United States could obtain valuable tech- cally, NASA's MPS budget has been mod- nical and financial assistance if it expandA its est when c3mpared to other NASA science cooperative MPS efforts. In theory, international and application programs. The proposed cooperation should be encouraged in basic scien- 1986 budget reflects a significant increase tific investigations or in areas in which the United (fig. 8-11). State can benefit from foreign research (e.g., Encourage university and '.,dustrial support !use biomedical research and research in solidi- by established "research centers": The fication) and diKouraged in areas that might have House Committee en Science and Technol- near-term commercial applications or in which the ogy in its report on the 1984 NASA authori- United States holds a clear technological lead (e.g., zation bill recommended an increase of $5 continuous-Cow electrophoresis and containerless million to be used "in part to establish at a processing). The distinctions between these areas university a center for basic research in the are, in practice, difficult to make and must de- separation and purification of organics."'" pend on the unique characteristics of individual projects. "House Committee on Science ai.c1Techno'ogy, Authorizing Ap- propriations to the National Aeronautics and Space Administration for Fiscal Year 1984, H.R Report No 98-65, 98th Cong., 1st sess., Competition in MPS 1983 In most terrestrial markets the U.S. Govern- ment has tried to foster an international env.. on- Figure 8.11. NASA MPS Funding Trends ment congenial to the open competition of enter- (millions of dollars) prises. The preeminent role of goo-r6.-nekts in 36 development of space technology, and t:i i political and military sensitivity of much of t!-I'r tech- 32 nolugy, have made it difficult to adopt simil ii ool- k.les toward commercial space activitit s. Given 28 the cost and the complexity of doing research in space, it is unlikely that the private sector could 24 pursue commercial MPS activities without some support from the Government. This assured role 20 of Government makes it difficult to argue for free and open competition among commercia! con- IR Lerns. The question then becomes, what should be the nature and scope of Government interven- 12 ,4 tion in future MPS markets? Strategies for competition an focus either on 8 increased support for U.S. industries or on the cre- 4 ation of barriers to foreign firms wishing to conduct microgravity research or sell space products. 0 Support for U.S. industry can be increased either 1980 1981 1982 1983 1984 1985 1986 through a greater commitment to basic research Year or through direct support of industries or specific Budget request

371 364 International Cooperation and Competition in Civilian Space Activities

Such a center co. ild provide a focal point for These loans could be structured so that they research in biological separation presently were paid back if the enterprise was success- being conducted by NASA, various univer- ful and forgiven if it failed. sities, and the private sector. A similar cen- Tax incentives: Tax credits could be given for ter was successfully established by NASA at capital expenditures made in space manu- MIT to conduct research in materials and has facturing, similar to how they have been received substantial private sector support. used in the past for solar energy work. In the As other areas of microgravity research show alternative, income derived from the sale of promise, these too could be supported by space products could be made tax-exempt research centers. for a number of years. Develop and encourage use of in-spacere- Provide guaranteed Government marIcets: By search facilities: Such facilities would include providing a guaranteed market for MPS Spacelab and carriers for short-term re- products and equipment, the only risks research, and free-flyers and eventually a space maining to the supplier are those involving station for long-duration and commercial development and production. This could be operations. an interim step between a traditional con- Increasing research activities would generate tract arrangement with NASA and complete basic knowledge about microgravity, therebycre- commercialization. ating an environment conducive to commercial An alternative or parallel strategy for support- exploitation. It is also possible to support directly ing U.S. commercial activities is one which em- industries or specific companies in the' r)rts phasizes the creation of barriers to foreigncom- to find commercial appkations for micitc, cwity. petitionin MPS equipment, products, and A decision to do this might entail: services. Such a strategy might include such ele- Expansion of current joint Endeavor Agree- ments as: ment program: NASA's JEA program is a part- Limiting access to Shuttle and Spacelab: The nership between industries interested in MPS United States has almost complete control and the Government. Current JEAsare con- over the price and availability of the facili- ductd as "no exchange of funds"agree- ties necessary to carry out MPS research. A'- ments whereby the private sector partici- though it may not be politically or scientifi- pants must pay for their own research and cally desirable, it would be possible to bring hardware development. The JEA might be foreign MPS activities to a virtual standstill expanded to allow for partial Government by exercising this control. funding of such ventures. Encouraging "buy American" practices: Encourage firms to engage in joint research NASA could require that all U.S. research in ventures in MPS: The Government way MPS be conducted with hardwaN devel- choose to alter regulations or change laws oped in the United States. Thi: would reduce to permit joint research ventures among demand for European-developed free-flyers firms in ways that may currently be prohib- such as the SPAS and EURECA. NASA could ited. In the alternative, the Government also bring strong pressure to bear on its JEA could encourage the formation of organiza- partners to make sure that they conducted tions such as the SemiconoJctor Research their early commercial operations with U.S. Cooperative to do research into the applica- hardware. tion of microgravity science. Offer subsidized or guaranteed loans to pur- Financial support for private sector: Such chasers of U.S. products and hardware: support could include Government loans, Should products such as new pharmaceuti- Government-subsidized loans, or Govern- cal result from current MPS research, the ment loan guarantees to companies attempt- Government could encourage their sale in ing to produce and markt.* new products. foreign markets by offering attractive finan-

J 72 Ch. 8Materials Processing in Space 365

cial arrangementsthereby assuring that ities. Foro.ign researchers, acting on behalf U.S. firms will capture the largest market of their own space agencies or as NASA prin- share. A similar policy could be imple- cipal investigators (PIs), have made use of mented with regard to the sale of hardware U.S. facilities such as drop tubes and towers, such as free-flyers. airplanes flying parabolic trajectories, SPAR Establish trade barriers to protect infant in- sounding rockets, and, most recently, the dustries: Should foreign hardware or prod- Space Shuttle. Formal agreements have also uct manufacturers prove more successful been used by NASA to obtain valuable than their U.S. counterparts, trade barriers MPS-related hardware such as the ESA-de- could be established to slow their entry into veloped Spacelab, which allows "hands-on" U.S. markets. access to material and life science experi- Government entry as supplier: In the absence ments, and the Canadian remote manipula- of adequate private sector interest, the 'Thy- tor which allows the Shuttle to deploy and ernment could enter as supplier. Thisiuld retrieve MPS payloads. probably be done only under extreme cir- Opportunities for formal cooperation in cumstances, such as if the MPS pr duct or future MPS activities are numerous." As a hardware had a strong relationship to nation- result of their MPS activities, the European al security. nations and Japan have developed, or are developing, hardware which could be useful Although it would be possible to implement to NASA researchefforts.Particularly such policies, there is, at present, little reason to noteworthy are the Maters is Science Dou- do so. It is possible that such strategies might do ble Rack and the Biorack developed for use serious damage to our relationship with our allies . .Spacelab,'" and the SPAS and EURECA and might preclude other cooperative space activ- ,ree-flyers. Japanese interest in r SIPS and, spe- ities. Too immediate a concern with competition cifically, in space bioprocessing echnology, would accomplish little in the way of protecting may also present the United States with op- U.S. private niterests and could do much to in- portunities for joint development or shared jure the international reputation of the United use of hardware. States. Formal cooperative ventures, such as the Irernational Microgravity Lab (discussed Cooperation above), could be used to form international Most MPS researrk in the United States and in research teams to investigate specific MPS other countries seeks basic scientific knowledge. pnenomena. Such teams might initially con- Given this common goal, the primary reasons for centrate on use of the Spacelab. NASA could engaging in cooperative activities are to reduce encourage greater participation in its re- duplicdtive activities, to share costs, to encourage search efforts by foreign PIs and encourage the creative cross-fertilization of ideas and to gen- foreign space agencies to grant NASA scien- erate goodwill between nations. In addition, such tists similar treatment. cooperation reinforces the philosophical goals of Informal cooperation at the level of the na- the 1958 NASA Act and in the 1967 Outer Space tional space agency: Informal agency coop- Treaty which sought to encourage cooperation eratioi I offers an administratively simple, low- and ensure that space was used "for the benefit cost and low-visibility method of encourag- of all mankind." "The space station, currently under study by NASA, offers sig- A decision to emphasize cooperation in MPS nificant opportunities for formal international cooperation. This sub- res,,,,,..:-h could take several different forms: sect is discussed in detail in the OTA report Civilian Space Stations and :be U.S. Future in Space, OTA-STI.241 (Washington, DC: U.S. NASA formal agreements: To date, formal Government Printing Office, November 1984) asSpacelab Mission 1 Experiment Descriptions, P. D. Craven (ed.) cooperative activities in MPS have been lim- (Marshall Space Flight Center, AL NASA, November 1981), NASA ited, but have covered a wide range of activ- TM-82448

373 366 International Cooperation and Competition in Civilian Space Activities

ing cooperation on shared scier tific goals. of Science Working Groups or guest inves- For this reason, NASA has developed infor- tigate programs would have the indirect ef- mal working arrangements withnumerous fect of increasing the informal interaction foreign space agencies. In MPS, NASA has among scientists. been receptive to informal consultations with Cooperation inmultinational fora: The the scientists and program managers of other United Nations Committee on the Peacefui space agencies and has generally facilitated Uses of Outer Space (COPUOS) has been the international flow of information. the principal multinational forum for debate Specifically, NASA has encouraged its MPS of space issues. Although there is some cur- Science Working Groups to interact with rent dissatisfaction with tl a United Nations their counterparts from other countries, to (see ch. 3) and its committees, U.S. partici- share their experience, and to help define pation in COPUOS has in the past been ben- program goals. This unstructured cross-fer- eficial. Should the United States wish to tilization of ideas has contributed substan- avoid purely "international" space programs tially to the dissemination of knowledge and their at ridant political problems, the essential to the success of MPS projects. A (- United Nations may still play an important though Pls at NASA have exclusiveaccess role. For example, one of the seven propos- to data from their experiments far 1 year, als for multilateral cooperation presented by after this time they are required to deposit the United States at the UNISPACE '82 Con- the data, in a usable form, in the National ference was ar. intergovernmental meeting Space Science Data Center. This information of expert-, in the use and management of is thefreely available to allinterested space technology.46 panics. On February 4, 1983, NASA and Colum- A more focused method of encouraging bia University cosponsored the first such international cooperation might entail meeting. About 100 representatives from 40 greater use of the various Science Working countries and international organizations at- Groups, or some other organization, to co- tended and discussed technical space pro- ordinate research activities. The Science blems in an informal multilateral forum Working Groups piay primarily an informa- devoid of the usual U.N. political issues. The tional role, but they could be encouraged success of this first meeting indicates that it to take a greater part in organizing specific might be a useful tool for coordinating in- project interactions, identifying useful hard- ternational activities with regard to specific ware and coordinating joint projects. It is im- technologies such as MPS.47 portant that the group given this responsibility be familiar with the details of specific There is no simple formula for deciding the ap- projects to ensure the relevance ofcooper- propriate level of international cooperation to ative activities. pursue in MPS research. A well-structured and Informal communication among scientists: A resource-conscious MPS program will undoubt- great deal of information is transferred by in- edly wish to engage in some cooperative activi- dividual scientists as a result of their personal ti.as. Although the extent of internationalcoop- and professional relationships. There has eri tion must depend on the unique character- been an active dialog in the scientificcom- islics of individual projects, some effort should munity on MPS, and the subject has been be made to place these individual decisions in explored in numerous technical and scien- a coherent policy framework. At minimum, such tific papers. A decision to encourage infor- a policy should ensure teat: mal international communication among sci- 1. Me benefits of cooperationare in reasonable entists might involve such activitiesas voportion to the costs. The term "benefits" sponsoring symposia and making available funds necessary for travel. In addition, for- "See I NISPACE '82. A Context for International Cooperation and Competition, op at mal arrangements involving the coordination 471Efid , app. C 374 Ch. 8Materials Processing in Space 367

should include tangiJe items such as mon- international cooperative ventures must not etary return or technical advances and in- compete with them commercially. tangibles such as national prestige and the 3. The objectives and program responsibilities value of maintaining stable international rela- are clearly defined. Formal MPS cooperative tionships. The potential "costs" may be a ventures should have well-defined techno- loss of domestic jobs, contracts for services logical goals and should deal in advance and hardware, and a potential competitive with sensitive questions of data retention, pa- advantage in world markets. tent rights, and proprietary information. The 2. There is no negative impact on similar private technical, human, and financial resources of sector efforts. If the private sector is to be the participants should be examined to as- encouraged to take a greater share of the fi- sure that the costs of the research can be nancial and technical risk associated with lowered and effectively shared. MPS research and hardware development,

375 Chapter 9 SPACE SCIENCE

376

I '1'4417* Contents

Page Introduction 371 Cooperative Ventures in Space Science: The Opportunity and tIie Challenge 372 Competition in Space Science: The Shifting Balance 373 Prevailing Issues in Space Science 375 International Cooperation in Space Science 377 Historical Overview 377 Current or Planned Programs 382 Outlook for Future International Cooperation 384 The Role of Comr,etition in Space Science 386 Prospects for a "Space Science Race" n, Current ankirg of Participants 387 Trade Between Competition and Cooperation 388 Ma- ..cs for Hardware and Services: Space Science as Growth Industry 389 International Trade Factors 389 Space Science in Developing Countries 390 The Allure of Space Science 390 Difficulty of joining the Space Club 391 Space Science in the 1980s and 1990s: A Vital Concern 391 Policy Options 392 Cooperation With the Soviet Union 392 Project Continuity 393 Choosing Specialization 393 Technology Transfer 393

Table Table No. Page 9-1. International Cooperative Ventures in Space Sciences 379

377 Chapter 9 SPACE SCIENCE

INTRODUCTION

A substantial part of the resear:h activity carried out in space is directed, not at the achievement of economic benefits and commercial applications, but at the purely scientific study of t phenomena in and from space. This broad field of endeavor, known as space science, began to develop many years before the advent of orbiting satellites; from the 1940s on, scientists used sounding rockets and balloons to loft instruments and animals above most of the insulating and pro- tective blanket of atmosphere to acquire data about the space environment. These studies contributed to an ever-increasing body of knowledge about outer space. By contrast, over the past ouarter-century, Earth-orbiting and interplanetary spacecraft have been the catalyst for an explosive growth of knowledge in this field. Photo met: Nadas, Aeronautics sad Span Administration The rapid expansion Gf space science has pro- X-ray Image from NASA's High Energy Astronomy duced a number of component di3ciplines and Observatory (HEA0.2) of emnant of exploding subdisciplines. For organizational purposes, the supernova in the constellation Cassiopeia. Scientists estimate that the star from which this cloud National Aeronautics and Space Administration of expanding hot gas derives originally (NASA), which funds most space science re- exploded in A.D. 1657. search, divides space science into three areas: 1) physics and astronomy, 2) planetary exploration, large- and small-scale cosmic processes than and 3) life sciences. can be taken from the ground, whereonly op tical and radio wavelengths are received. Ac- Physics and astronomy encompasses the study cess to all regions of the spectrum as well as of the structure and dynamics of the Sun, solar- the removal of atmospheric distortion has pro- generated phenomena such as the solar wind, duced, in the span of a few years, a major rev- and other features of the near-Earth interplan- olution in our understanding of the nature, ori- etary environment such as the magnetosphere gin, and evolution of the universe and its and incident cosmic rays. Also included in this component matter. area are some of the most compelling and ex- siting investigations in any scientific field: the Planetary exploration is the study of the planets study of astronomical objects by means of tel- of our solar system and their satellites, the as- escopes and other space-borne instruments. teroids, and the comets. Activities in this area These objects include not only our own Sun include the dramatic unmanned exploratory and the multitude of stars and other condensed missions to the surface or environs of other objects of the Milky Way Galaxy, but also the planets, and the manned lunar landings. Inves- gas and dust between these stars, and finally tigations of the surface features and (if possi- the vast swarm of galaxies extending out to the ble) composition are made along with studies edge of the visible universe. of the planetary atmosphere and magneto- Observations from space take advantage of sphere, if they are present. These observations the entire spectrum of electromagnetic radia- are combined with data regarding orbital me- tion to acquire much more extensive data on chanics and rotational characteristics to pro-

371 378 372 International Cooperation and Competition in Civilian Space Activities

vide an understanding of the planet's internal cation. Thus, programs in space science area composition and dynamics, and thus its origin necessary basis for any nation's activity in space. and evolution. Nations that wish to pursue practical or commer- Life sciences are generally subdivided into bio- cial activities in space on their own must first ei- medical research (the study of the effect of ther pursue a program of space science them- space environmental factors on man) and selves, or have access to the technology and basic space biology (the effect of these factors on data that emerge from the conduct of sucha program. plants and animals). Separate but relatedareas are planetary biology, the study of the origin and distribution of life in the universe, and Cooperative Ventures in Space global biology, which examines the impact of Science: The Opportunity and life on our own planetary environment. Impor- the Challenge tant areas of research are the effects of pro- longed exposure to microgravity and ionizing As was discussed in chapter 3, the United States radiation on humans and animals, and the has engaged in a vigorous program of interna- study of plant developmental processes in tional cooperative ventures in space. When all space under artificial lighting. One objective forms of joint activity are taken into account, of the latter research is the development of ad- NASA alone has concluded over 800 agreements vanced life support systems. Because of the dif- with over 100 countries.' ficulties associated with supporting lifein From the standpoint of individual projects, the space, ground-based simulation studies are es- most notable single area of U.S. international pecially important in the space life sciences. space cooperation has been the space sciences.2 Although research in each of theseareas pro- It was apparent from the beginning that cooper- duces results that have great intrinsic value in ation in this field offered many advantages, from adding to our understanding of thecosmos and the point of view of both the United States (the our place within it, this research is not pursued leader and principal in these ventures) and the solely for its own sake. Space science provides cooperating nations. On the technical and po- much of the research base that underlies the de- litical level, the appeal of multinational space velopment of applications-orientedprograms dis- science stems from the global sphere of opera- cussed in earlier chapters. The subdiscipline of tions of satellites, and from the global and univzr- solar-terrestrial physics, for example, formsa di- sal perspective necessitated by operations in rect bridge betweenliar research (physics and space. astronomy program) ai.d Earth applications such More practically, the enormous cost of pursu- as communications, navigation, and meteorol- ing space science has been a strong argument for ogy. Studies of planetary magnetic fields, mag- sharing the economic burden among as many na- netospheres, and ionospheres havea direct rele- tions as efficiency permitted. In effect, if NASA vance to corresponding research inEarth's does not have enough money to pursue a proj- plasma envelope and upper atmosphere. ect alone, by cooperating with other countries In the long term, planetary studies also offer it may actually create opportunities to undertake the possibility of habitation and minerals exploita- research it could not otherwise have done. The tion. Life sciences research offers a wealth ofpo- pooling of scientific and technical talent offered tential applications, from the prolongation of hu- another strong advantage, and was allied with the man stay-times in space, to the pursuit of space agriculture and partly closed life support, to the 125 Years of NASA International Programs, NASA report, Janu- development of new medical treatments, diag- ary 1983 nostic techniques, and devices. Instruments and 21MISPACE '82 A Context for International Cooperation and sensor:, developed in every area of space science CompetitionA Technical Memorandum (Washington, DC U.S. Congress, Off.ce of Technology Assessment, cyrA-TM-ISC-26, March eventually find their way into commercial appli- 1983), p. 68

379 Ch 9 Space Science 373 value to the United States of building scientific/ (along with some technicians and engineers). The technical strength among its allies. These advan- influx of talent on the one hand and hardware tages were not restricted to the United States and on the other probably led to the development, its partners, but applied as well to the Soviet throughout the 1950s, of a broader based exper- Unionthe other leading nation in the early dec- tise in the essential space technologies in the ades of space activityin its dealings with its cli- United States, contrasted with an accelerated ent states and a few giber nations through the launcher capability in the U.S.S.R. The surprise Intercosmos program. launching of Sputnik in 1957 galvanized the latent capabilities of the American space commu- Now, as technical capability for the independ- nity into focusing on achievement and domi- ent conduct of space science has spread to the nance in space. European Space Agency (ESA) and many of its member nations, to Japan, and potentially to The emphasis on manned spaceflight through- some developing countries, the benefits of co- out the 1960s, culminating in lunar landing and operation are coming into play for a wider range exploration, obscured (and to some extent im- of nations. peded) developments in space science. Although the lunar missions were certainly "planetary," Conversely, the disadvantages of joint pursuit science was secondary to the engineering accom- of science in space are also being felt more widely plishments involved. Yet from the beginning of and perhaps more acutely. Prominent among both programs the science return was impressive. these are the problems attendant upon planning for and conducting long-term joint development The U.S.S.R. led initially. The second Sputnik, activities, during which any number of econom- launched a month after the first, carried substan- ic and national policy imperatives may intervene tial geophysical and radiation-sensing instrumen- to disrupt schedules and commitments. Differ- tation as well as a life support system and bio- ences in managerial style, and the difficulties in medical instrumentation for monitoring the achieving satisfactory management of parallel de- effects of spaceflight environmental factors on its ve!opment programs, produce another set of live payload, a dog. The third Soviet satellite, problems. launched shortly after the first two American successes, was a 11/2-ton orbiting geophysical lab- As cooperative partners in space sciences are oratory. By late 1959, the U.S.S.R. had struck the increasingly likely to be competitors in other Moon (Luna 2) and photographed its far side scientific or industrial fields (or even in other areas (Luna 3). In 1961 the manned orbital missions be- of space activity), the issue of technology trans- gan, with a return of important biomedical data. fer is becoming a matter of increasing concern. Tnis is especially true in light of the possibility that Soviet planetary satellites launched before the cooperative ventures may entail lost opportunities end of that year had already provided data on for indigenous scientists and indigenous technol- solar and cosmic radiation across the electro- ogy development. magnetic spectrum and on the upper atmosphere. However, between 1960 and 1965 a total Competition in Space Science: of 18 planetary missions to Venus and Mars failed The Shifting Balance to return any planetary data, primarily because of contamination problems. The First 15 Years The American space science effort got off to a slower start, but had a higher success rate. Sig- After World War II, one of the crucial factors nificant data were returned by the second Mari- setting the stage for the "space race" of the 1960s ner mission to Venus, in 1962. Likewise, the sec- was the fact that most of the expatriated Euro- ond mission to Mars, in 1964, provided pictures pean scientists and engineers came to the United

States, while the Soviet Union acquired the bulk 3Sowe, Space Programs, 1966-70, Congressconal Research Serv- of the surviving German V-1 and V-2 rockets ice, Science and Technology Division, 1971, p. 166.

38u 374 International Cooperation and Competition in Civilian Space Activities and data. However, a long series of Pioneer mis- U.S. program, being subject to the annual con- sions to the Moon, beginning in 1958, was un- gressional budget process, is more likely to under- successful. No until 1964, with the Ranger series go short-term perturbations.5 Thus, although the of TV-equipped hard landings, were U.S. lur,ar U.S. space science missions were more sophis- missions fruitful. Meanwhile, the Explorer series ticated than were those of the Soviets, Soviet of Earth and space science satellites was highly space science capabilities continued to grow, par- successful. Explorer 1, for example, discovered ticularly with the increasing use of Salyut as a plat- the existence of ionized particles trapped in form for research.6 Earth's magnetic field (the so-called Van Allen ra- The strong position of power occupied by the diation belts); subsequent Explorer missions paralleled the Soviet program in space science. U.S.S.R. Academy of Sciences ensures that basic science will not be ignored.' The fact that the In manned spaceflight, Project Mercury lagged U.S.S.R. is sending a mission to Halley, that it is its Soviet counterpart: the first U.S. orbital flight continuing to conduct missions to Venus, and did not occur until considerably after the second that it plans a flyby of the Martian Moon Phobos Soviet orbital mission had taken piace. Not until in 1988, is strong evidence of its continuing in- the advent of Gemini in 1965 did the U.S. pro- terest in science. However, Soviet space activi- gram gain momentum and surpass (perhaps in ties in recent years have in general become in- late 1966) the Soviet effort. The Soviets later 'Salyut Soviet Steps Toward Permanent Human Presence in regained this lead in the mid-1970s, as the U.S. SpaceA Technical Memorandum (Washington, DC. U.S Con- Skylab program was concluded and the Salyut gress Office of Technology Assessment, OTA-TM-STI-14, Decem- program got fully under way. ber 1983), p 3 6Alain Dupas, "Un Programme Spatial en Plein Renouveau," La Recherche, November 1984, pp. 1420-1427. Dynamics of Competition 'Soviet Space Programs: 1976.80 l'-'art I), Congressional Research Service, December 1982, p. 157. Despite the size of the U.S. investment in the manned program during its first decade, the science return was relatively small. Like its Soviet counterpart, its primary aim was national prestige, not science. In the post-Apollo era, however, the U.S. manned program has been more careful to build in significant science components from the beginning planning stages of its missions. The U.S. space science program also came into its own in the 1970s, highlighted by the Viking missions to Mars and the launch of the Voyager spacecraft to the outer planets. The mid-1970s saw funding peaks for space science missions, but these were followed by drastic budget reductions later in the decade.4 Meanwhile, the Soviet Union 0' established a dominant position in manned or- A bital operations through the series of Salyut space stations. The continuity of the Salyut program ex- emplifies the pattern of U.S.-Soviet competition in all space activities, including space science: the Soviets are able to sustain a steady, long-term commitni,iM in any area of space activity they Photo area. European Spam Apncy view as sup:.,)rtive of their long-term goals; the Spectra of Sirius A, the brightest star in the sky, and of Sirius B, its white dwarf companion. The X-ray 'Space Science Research in the United StatesA Technical Mem- spectrum of the white dwarf is the vertical line. orandum (Washington, DC U 5 Congress, Office of Technology The first and second order ultra-violet spectra of Assessment, OTATM-STI-19, September 1982), p 41 Sirius A are along the horizontal.

3s1 Ch. 9Space Science 375 creasingly applications-oriented, and the flight of possess the capability of developing space tech- large-scale, advanced-technology U.S. and Euro- nology, the more cooperative options there are. pean space observatories and planetary probes Nations will also decrease their dependence on (both independent and joint) will probably not the traditional center of activity, the United States. be matched by the Soviets for some years. In this context, a number of factors come into play in determining the scope and direction of The broad cooperative activity of the United future competition: States with its allies in space since 1961 has seeded and stimulated the growth of space the value of space science as compared with science and the associated technologies in many other space activities (e.g., remote sensing of the nations involved, to the point at which and communications); some of their capabilities rival our own. Among the overall space capability of a nation (e.g., ESA member nations, the United Kingdom is launch capability); highly astronomy-oriented; both West Germany reliability (in terms of schedule, costs, and (FRG) and France have strong space science ca- quality of services and hardware); pabilities, and are prime movers within ESA in both national and world economic factors this field. On roughly one-sixth of NASA's budg- (i.e.,the relative affordability of space et, ESA has launched a substantial X-ray satellite science among nations); and (Exosat) on a U.S. Delta launcher and will soon institutional factors within nations (e.g., gov- launch a cometary mission (Giotto), a 30-cm tel- ernmental commitment and support, man- escope (Hipparcos), and a solar-polar orbiter agement framework). (ISPM), as well as conduct numerous Spacelab science experiments. ISPM is a joint NASA/ESA mission with experiments rrom both sides, and Prevailing Issues in Space Science will be launched on the Shuttle. Competition Japan is also emerging as a contender in space sciences. Although its primary focus has been on The potential for more open competition in development of commercial applications satel- space science is related to the increase in the lites, the Institute of Space and Astronautical world market for space services in general. For Science (ISAS), responsible for Japanese space example, the possession of space transportation activities, sustains a level-of-effort in space science systems and/or orbiting research platforms is a of one launch per year, on average. On less than key factor in the competitive position of a nation one-tenth of the NASA space science budget, re- with regard to all areas of space activity. The abil- cent and upcoming achievements of ISAS include ity to develop cost-effective specialized instru- an X-ray optical/radio satellite (Hakucho), a solar mentation and equipment is also an important flare sensor (Hinotori), a larger X-ray satellite market factor in every area. (Tenma, or Astro-B), a cometary mission (Plan- In the absence of commercial interchange, the et-A), and an even larger X-ray detector (Astro- competition between the United States and the C), mounted jointly with the United Kingdom. U.S.S.R. has heretofore been primarily the pur- In developing its capabilities in space science Ja- suit of prestige. However, the increase in coop- pan has not relied heavily on cooperative mis- erative activity between the U.S.S.R. and France sions with the United States, although much of in recent years suggests that competition between the supporting technology has been derived from East and West may increasingly occur in the form U.S. commercial construction of large portions of competition for cooperative activity with others. of its Earth-sensing and communications satellites. An overall tendency toward the "loosening up" These developments lead to the conclusion that of Soviet space policy would accelerate this trend. activ,9mpetition in the space sciences is only This issue is particularly important with regard to now,coming possible. The more nations that Third World countries.

38-797 0- 85 - 13 :QL 3 382 376 International Cooperation and Competition in Civilian Space Activities

Developing Countries data being generated and transmitted bymeans The overall issue of how to involve develop- of advanced electronic systems. The ground ing countries in space science will become in- tracking and receiving stations are bophisticated creasingly pressing in comingyears. Most of the facilities, relying on computer systems formost interest of these countries in space relates toap- essential functions. Thus, space science isa high plications-oriented activities, but the need to technology endeavor, very mucha part of the build a domestic infrastructure for such activities most vigorous sector of our present-day econ- will inevitably dictate some involvement inspace omy. The actual and potential economic impact science, at least on a modest scale. For thespace- of space science as both a producer andpur- capable nations, the problem of how toaccom- chaser of goods and services should beexam- plish this integration at minimal cost and with- ined. ESA has conducted studies (now somewhat out doing damage to existing programs must be dated) of the economic benefits ofspace busi- addressed. ness to ESA contractors.° Comparable analyses were conducted for NASA by Chase Econome- Long-Term Agenda for Space Science trics in 1975, but no studies specific to space science contracts have ever been done. Development of a rational, long-term agenda for science missions as related to science objec- Education and Training tives is a continuing issue for each of thespace- faring nations. It is of particular importanceas Differences in education and training of scien- more nations enter the space arena. Given the tists and engineers among the space-faringna- pervasive sharing of data, at least in the West, tions constitute another issue. In the United States duplication of missions is pointless; yet the deci- the system for producing space scientists relies sion as to who conducts what missions isan in- heavily on academic graduate training ata few creasingly complex one, and involves issues of universities under individual faculty researchers. competition as well as cooperation. Such agendas Additional training occurs on-the-job in industrial are regularly drawn up in the United States, but project teams. Government contracts provide this there is no assurance that they can be adhered system's principal means of support. Yet theun- to. The difference between annual budget fund- evenness of funding provided to these laborato- ing in the United States and, for example, mission ries and industrial groups in recent years, asa re- funding within ESA, is a criticalone from the point sult of funding cuts and a decrease in the overall of view of U.S. scientists and potential partners number of missions, has endangered the system.° alike. In this regard, an 18-percent increase in the Along with the issue ofprogram planning goes overall space science budget for 1984was a the separate consideration of maintainingan ap- healthy sign, with new missions suchas the Ex- propriate balance between space science andap- treme Ultraviolet Explorer and the Venus Radar plications. This is donenow on a largely subjec- Mapper entering the budgetary picture. The 1985 tive basis, but the trend toward more expensive budget provides for even larger increases inspace science missions and an intensifying competition science fundingabout 21 percentincluding in the applications area may upset the balance, the Mars Geoscience Climatology Orbiter, the necessitating a more formal means of assessing Upper Atmosphere Research Satellite (UARS), the value and interlinkages of each. This ispo- and the scatterometer for the Navy's NROSSsat- tentially of greatest importance forspace science, ellite as new starts in 1985. where the value of findings cannot be easily quantified.

Economic Impact of Space Science ,Economic Benefits of ESA Contracts, ESA BR-02, European Space Agency, October 1979 Space science is conducted predominantly by 9Space Sc,ence Research in the United StatesA Technical Memorandum (Washington, DC' U S. Congress, Office of Tech- means of sensing and detecting equipment with nology Assessment, OTATMSTI.19, September 1982), pp. 8, 22. 383

.r. Ch. 9Space Science 377

Especially encouraging in these recent budgets science over the long term. In addition, the Shut- are the substantial increases in funding for con- tle will present numerous opportunities for small- tinued data analysis of astronomy and planetary scale instrument development projects, thus missions, as this support is crucial for the main- broadening rIpponunities for education and train- tenance of research groups. The planned space ing at U.S. "centers of excellence." station will hold many opportunities for space

INTERNATIONAL COOPERATION IN SPACE SCIENCE Historical Overview Luna sample return missions have been exchanged (including a 2-meter core sample from U.S./Soviet Cooperative Efforts* a 1976 Luna mission). Beginning in 1978, missions Given the persistence of enmity, suspicion, and to Venus (Soviet Venera and U.S. Pioneer Venus) political competitiveness between the United have been coordinated and data exchanged. This States and the Soviet Union, the overall level of has been particularly beneficial for U.S. scientists cooperation in space activities has been remark- in view of the vigor and success of the Soviet able. The primary basis for cooperation has been Venera program, which has included transmis- a "1972 Intergovernmental Agreement on Coop- sion of color photographs from the planet's eration in the Exploration and Use of Outer Space surface. for Peaceful Purposes," entered upon as the period of U.S./Soviet detente began. This agree- Probably the most comprehensive cooperation, ment provided for: 1) development of compati- however, has been in space biology and medi- ble rendezvous and docking systems for testing cine. Three unmanned Soviet Cosmos biosatel- lites launched in 1975, 1977, and 1978 carr;ed on a joint U.S./Soviet manned flight, and 2) establishment of Joint Working Groups in four scien- numerous U.S. biological experiments in a broad tific areas: range of areas, including simulated gravity experiments (via an onboard centrifuge). These flights Space Meteorology; were a valuable opportunity for American space Study of the Natural Environment; life scientists in a period when no U.S. manned Near-Earth Space, the Moon, and Planets; missions (or comparable biological missions) and were being flown. Equally important has been the Space Biology and Medicine. cooperation in ground-based studies, such as the The first part of the agreement resulted in the 1978/79 Joint Bedrest Study conducted to stand- 1975 Apollo-Soyuz Test Project (ASTP), which ardize procedures for weightlessness simulation probably represents the high-water mark of U.S./ in the laboratory. Further significant exchanges Soviet cooperation in space. However, although took place at the 1980 Joint Symposium on some joint biological experiments were con- Vestibular Problems and the 1981 Joint Sym- ducted onboard, ASTP was of far greater polo-. posium on Cardiovascular Changes Resulting cal than scientific value. from Spaceflight. Scientific cooperation with the Soviets has been The decision not to renew the May 1977 I nter- less dramatic but quite substantive, particularly gover n menta I Agreement in 1982 (see ch. 3) in the planetary and life sciences. The planetary meant that the Joint Working Groups were no working group has held numerous joint meetings longer constituted. Cooperative activity had for and information exchanges relating to solar- the most part dwindled down to a "baseline planetary physics and lunar and planetary ex- level" of routine data exchange and interpersonal ploration. Lunar samples from several Apollo and scientific communication through letters and at international scientific meetings. It is clear that .U.S -Soviet Cooperation in SpaceA Technical Memorandum (Washington, DC. U.S Congress, Office of Technology Assessment, cooperation in space science, as in other areas, OTA-TM-STI-27, in press) between the United States and the U.S.S.R. is tied 384 378 International Cooperation and Competition in Civilian SpaceActivities

to the overall level of diplomatic exchange and Western European nations, as wellas Japan, Aus- political relations between the two countries.10 tralia, New Zealand,India,Pakistan,Israel, Scientists on both sides generally regretted this Greece, Peru, Brazil, and Argentina. The offer of earlier loss of opportunity. However,recent leg- a cooperative shuttle flight mission was extended islation (Public Law 98-562) signed byPresident by the President to the People's Republic of China Reagan in October 1984, calls fora renewal of in May 1984. Table 9-1 shows thatz n increasing the 1972-77 agreement, and may presage a new number of major U.S. space science missionsare level of cooperative science activity between the truly joint missions, involving foreign-builtspace- two nations. craft or onboard instruments, and foreign prin- The most durable area of cooperationis in the cipal investigators. It is clear from the table that life sciences, where the UnitedStates particiNted the United States has been the leadinginstigator in another Cosmos biosatellite mission inDecem- of cooperative missions inspace science, even ber 1983 (the United States supplied medical considering the Soviet-bloc cooperativeIntercos- monitoring equipment and procedural advicefor mos missions, which are not itemized here. this primate mission). CAT-scan be- data from The table also depicts the variety ofstructures Salyut missions are still being suppliedto NASA. for joint projectsbilateral, multilateral, hosted NASA's Director of Life Sciences attendedan In- experiments, etc. Chapter 3 introduced the fact ternational Gravitational Physiology Meetingin that NASA prefers bilateral to multilateral efforts." the U.S.S.R. in 1983, and exchanges between Missions such as the International Sun-Earth Ex- Working Group members continueon an infor- plorers (ISEE), which involved the development mal basis. Some results of Venera 13 and14 were of separate spacecraft,c- the International Radio received in early 1982 (including the photographs Astronomy (IRAS), which entailed buildingsep- mentioned earlier), and data fromtwo Venus ra- arate major components, have proved to be dar mappers launchedin June 1983 (Venera 15/ among the smoothest joint undertakings. 16) were presented at an international conference in the United States. The United States hasa number of motives for stressing cooperation in space science. Some of U.S. Cooperative 'efforts these are altruistice.g., the desireto extend both With Other Parties knowledge of the space environment andbene- fits of space science to asmany nations as possi- Beginning in the late 1940s, the UnitedStates ble, and the wish to fostera cooperative atmos- actively sought and sponsored Canadianand phere among nations. Someare economic European participation in its embryonicspace re- principally, the desire to share costs. Aridsome search program. Such activitieswere numerous are political: the desire to broaden diplomatic re- throughou the 1950s, and were heavily sub- lations with others, to demonstrate U.S.com- sidized by the United States.* By 1962,cooper- petency and strength, to strengthenour allies ative space science projectswere being con- technically and economically, and to foster their ducted not only on sounding rocketsand greater security and independence. It should be balloons, but also on orbiting spacecraft. noted that these motivationsare equall,, appli- In the years since, such activities have contin- cable to any other form of cooperativespace activity. ued to expand, to the point at which allU.S. space science efforts now involve some foreign However, the benefits of cooperativespace participation (if data exchanges, guest investigator science are not always clear-cut. For example, programs, etc., are counted). The roster of U.S. it is difficult to assess the economic benefitsto partners has grown to include most of the major the United States of foreign participationon U.S. missions, especially where foreign gainsout of 'Soviet Space Program 1976 10 (Part 1) Congressional Research the project may have exceeded contributions.In Seivice, Dec ember 1982, pp 5, 202, 204, 219-20 'Frank McDonald NASA Chief Sr 'enlist, refers to this periodas "See UNISPACE '82 A Context for Cooperation and Competi- "a sort of Marshall Plan in space tion, op (it, app B

3 b 5 Ch 9Space Science 379

Table 9.1. International Cooperative Ventures in Space Sciences

Launch Cooperating year Mission name countries Space science objectives 1962 Ariel-1 US /UK Measure energy spectrum of cosmic rays, sole. X-rays 1962 Ane1-11 11 5./U K Measure galactic radio noise, micrometeoroid flux 1967 Orbiting Solar Observatory 4 U S a Measure solar X-ray distribution, He emission (OSO -4) 1968 Orbiting Geophysical U K a, Fra Determine direction of incidence of primary cosmic Observatory-5 (OGO-5) rays and density/temperature of H in geocorona 1969 OSO -5 U K a, Fra Measure solar X-ray flux and self-reversal of Lyman- Alpha line 1969 OSO-6 U K a, Ita Study solar He resonance, X-ray and gamma radiation 1969 Apollo-11 Switza Measure composition of solar wind 1969 Apollo-12 Switza Measure composition of solar wind 1971 Ariel-IV UK /US Measure VLF radiation and cosmic radio noise 1971 Barium Ion Cloud Probe FRG/U S Barium release to stimulate action of solar wind on comet tail 1971 Apollo-14 Switza Measure composition of solar wind 1971 Apollo-15 Switza Measure composition of solar wind 1972 Apollo-16 Switza Measure composition of solar wind 1972 Orbiting Astronomical U K a Study stellar ultraviolet and X-ray emissions (project Observatory-3 (0A0-3) also known as Copernicus) 1972 AEROS FRG/tJ S Measure solar extreme UV and correlate with upper- atmosphere components 1972 Apollo-16 FAGS, Fra BIOSTACK I (effects of CR on selected biosystems) 1972 Apollo-17 FRGa, Fra BIOSTACK II (effects of CR on selected biosystems) 1973 Skylab Ira, Switza Sky survey, distribution of galaxies and ionized hydrogen: and solar wind analysis 1974 Astronomical Netherlands Neth/U S UV photometry and X-ray emissions Satellite (ANS) 1974 Anel-V UK /US Conduct X-ray sky and survey and locate sources 1974 Helios-1 FRG/U Silt/Ails Measure micrometeoroid flux, study solar X-rays and mass, and planetary orbits 1975 Apollo-Soyuz Test Project U S /U.S.S R Rendezvous and docking test included joint biological studies 1975 Apollo-18 FRGa BIOSTACK-III expenmert aboard U.S. craft in ASTP :975 Aryabhata India/U S S R Solar and upper atmospheric research 1575 Cosmos 782 U S S.R.b Eleven U.S. experiments aboard (including centrifugation) 1975 OSO -8 Fra Spectrographic study of solar chromosphere 1976 Helios-2 FRG/U S /It/Aus Measure micrometeroid flux, study solar X-rays and mass, and planetary orbits 1977 International Sun-Earth Explorer-1 U S /ESA Coordinated spacecraft studied magnetosphere, (ISEE-1) interplanetary space, and their interaction 1977 ISEE-2 ESA/U S Coordinated spacecraft studied magnetosphere, interplanetary space, and their interaction 1977 SIGNE-3 U S S R./Fr Observatory with telescopes for locating CR sources 1977 Cosmos 936 U S S.R.b Ssven U S. Liological experiments 1977 Cosmos 936 U S.S R./Fr French biological experiments aboard 1978 ISEE-3 FRGa, Fra, Netha Solar wind composition and mapping; comet flyby 1978 Pioneer Venus-2 FRGa, Fra Atmospheric and cloud studies at Venus 1970 NASA Heliocentric Mission U.K a Solar proton behavior in interplanetary space (ISG E -3) 1978 Cosmos 1129 U.S SR b Fourteen U.S biological experiments 1978 Cosmos 1129 USSR/Fr French biological experiments aboard 1978 International Ultraviolet Explorer UV spectroscopy (WE) U.S /ESA/U K 1979 High Energy Astronomical Fra, Dka Study galactic CR composition Observatory-3 (HEAO-3) 1979 Hakucho Japanb Optical and radio observations of X-ray stars 1980 Solar Maximum Mission (SMM) U S INethIU.K.a Solar hard X-ray imaging spectrometry 1982 Soyuz T-7 USSR/Fr Biomedical tests, "Aelita" diagnostic device 1983 Infrared Astronomical Satellite Neth/U.S /U K. Conduct IR sky survey 'IRAS)

3b6 380 International Cooperation and Competition in Civilian Space Activities

Table 9.1.International Cooperative Ventures in Space SciencesContinued

Launch Cooperating year Mission name countries Space science objectives 1983 Optical -X -ray Observatory U S S.R /Fr UV and X-ray spectrometry 1983 Spacelab-1 ES,./U S Multinational experiments include biology, medicine, botany, astronomy, and solar physics 1983 San Marco-D ItIU S Effects of solar activity on meteorological processes 1983 Comos-1514 USSR° U.S. providing medical research devices for primate mission; U.S. biological experiments 1984 Active Magnetosphenc Particle U Sit AG Study solar wind, identify particle entry windows, ener- Tracer Explorer (AMPTE) gization and transport processes into magnetosphere 1984 Long-Duration-E ,losure Facility FRGa, Investigations of space environment (LDEF) U S /Ire/ESAa, Switza, U K 1985 Spacelab-2 U K a Galactic X-ray imaging and determination of He abundance in solar corona 1985/86 International Halley Watch ESAIU S S R , Spacecraft and mission design are being coordinated Japan/U S. for ESA's Giotto, U.S.S.R.'s Venera-Halley (2), and Japan's Planet-A. U.S. coordinating ground-based and near-Earth observations 1985 Gott.) ESA° Multi-parameter characterization of cometary environment 1985 Spacelab-3 Indiaa Study solar/galactic CR ionization states 1985 Spacelab-D-1 U S./Can b "Space Sled" to conduct neurophysioiogy research 1985 Gamma-1 U.S S R./Fr Gamma ray source detection 1986 Galileo U S /FRG Broad investigation of Jupiter environment 1986 Hubble Space Telescope U S /ESA High-resolution coverage of optical and UV wavelengths 1986 UlyssesInternational Solar ESA/U S Observations of Sun and interplanetary medium out of Polar Mission (ISPM) the ecliptic plane 1987 Roentgen-Satellite (ROSAT) FRG/U.S /U.K X-ray sky survey and sources study 1987 Astro-C Japan/U K Study spectral and time variation in X-ray sources 1987 Cooled submillimeter U S.S.R./Fr Study spectra of 0.1 to 2.0 mm radiation 1987 Sigma U.S.S.R./Fr X-ray/gamma telescopy and burst detection 1988 Gam :la Ray Observatory (GRO) U.S./FRGa Wide-range gamma ray detection 1988 Venus Radar Mapper (VRM) U.S./Fra Venus gravity and atmospheric tides NOTES 1 Table incluaes, in the case of future missions, only those officially approved Tables does not include cooperative soundingrocket, balloon, and ground-based pro/. acts, also excluded are incidents of data exchange or launch services only 2 Multilateral joint ventures among ESA member countries are considered as ESA missions However, national projectactivities Involving ESA members with non-ESA countries are considered as national cooperative ventures 3 Multilateral joint ventures among Soviet bloc countries under the InterkoSmos programare considered simply as Soviet missions 4 Fr = France, U K United Kingdom, It Italy, Switz Switzerland, FRG - Federal Republic of Germany, Neth - Netherlands, Aus Ire = Ireland Austria, Dk - Denmark, aForeign experiment (foreign PI) on U S mission bU S experiment on foreign spacecraft

the present era the latter has not been a largecon- (particularly in the case of Spacelab) means that, sideration. NASA solicits foreign proposals along in effect, the American taxpayer has paid for pro- with domestic ones, and selection of experiments viding inexpensive science opportunities inspace is made "blind." NASA officials insist that only to researchers of other nations. the best science is flown. However, some U.S. scientists often object that any inclusion of for- However, as the technical capabilities of our eign experiments is detrimental to U.S. scientific partners have increased, the scientific payoff from interests: U.S. teams lose valuable opportunities cooperation has become increasingly evident. for support, and opportunities for U.S. develop- The network of three satellites in ISEE (see table), ment of technology are also lost. There is also for example, was significantly enhanced by the the frequent complaint that NASA's periodic dif- inclusion of the ESA satellite as well as by the for- ficulty in funding science on American missions eign experiments present on all three spacecraft. 36 / Ch. 9Space Science 381

The one fact that has lent potency to many of Apart from the Soviet bloc countries, Soviet co- these criticisms in the past, however, has been operative activities in space have extended only the lack of reciprocity for U.S. scientists as prin- to the United States, France, India, and Sweden. cipal investigators on ESA missions.12 ESA has The relationship with France has been especially now agreed to permit U.S. proposals in response fruitful, and has involved quite substantive mis- to its Announcements of Opportunity. There is sions: an observatory for locating cosmic ray now a quota which is determined on acase-by- sources (SIGNE 3, 1977); life sciences experi- case basis, and procedures for carrying out the ments onboard Cosmos 936 and 1129 (1977/78); new policy are being implemented.Officials of instruments on the Lunokhod landers, Mars, and both ESA and NASA feel that the bottleneck will Venera spacecraft; and a UV spectrographic in- now be NASA's ability to fund U.S. experiments strument on the Prognoz station. Aread 3 (August on ESA missions. 1981) has returned data on magnetosphere- ionosphere coupling; the UFT spacecraft, an Soviet Cooperative Efforts optical and X-ray astronomy observatory was With Other Parties launched in March 1983. Plans for a joint So- viet/French mission to Venus in which French- The U.S.S.R. enterc-1 the cooperative arena in made balloons would be released into the atmos- space science more than 10 years after theUnited phere were recently altered to enable the Soviet States. Its primary vehicle for international coop- spacecraft to continue on to Halley's comet (see eration is the Intercosmos program, which was discussion of the International Halley Watch constitutes' in 1967 (with the first launch in 1969) below). to coordinate joint activities with Eastern Euro- pean and other communist countries. The scien- But the most striking cooperative project was tific program includes space physics and life the inclusion in 1982 of a French cosmonaut in sciences, in addition to more applications-ori- the second clew to visit Salyut-7. A substantial ented space research. Over the first several years element of the mission was the installation of a a few scientific satellites were flownunder the French medical diagnostic device, Aelita-1, Intercosmos label, but the focus of the program aboard the station.13 Gamma I, a high-energy appeared to be more political than genuinely gamma ray observatory (1986), Sigma, a more so- scientific or even genuinely cooperative. phisticated gamma ray facility (1987), and a cooled submillimeter telescope (1987).14 Plans for But the Intercosmos program took on added a Venus/asteroid lander in 1991 willprobably in- dimen,ion in 1976 when it was integrated into volve France as well.15 the manned spaceflight program. Under this plan, cosmonauts from the member countries fly, name France has engaged in this cooperation with by one, on Soviet missions to the orbiting Salyut the Soviets in a spirit of objective pragmatism. The space station. Thus far, these have been "visiting French space science community has been able crews," dedicated tc specific science objectives to make great strides through access to Soviet and typically lasting 8 days. The foreign cosmo- launchers and the well-developed Soviet space naut is a "flight engineer" or "research engineer" program. Meanwhile, French technicalskills have (not the commander). Instruments or experiments significantly enhanced the Soviet capability, par- developed by the Intercosmos member country ticularly in astronomy and the application of elec- under Soviet direction are flown up for use dur- tronics. The U.S.S.R. has also been able to gain ing the mission. The program appears to have considerable diplomatic advantage through the been highly successful and advantageous for the relationship with a major Western nation, and has Soviets, in the sense that they have gained much politicalcapitalvis-a-vis theparticipating ' lAccording to recent agreements, the same device will beflown countries aboard the U 5 Shuttle wl-,en a French astronaut participates in a U 5 mission in 1985 "Nigel Henbest, "AstronomyThe Next Space Race," New Sci- entist, Mar 31, 1983 ''Space Sc len( e Researc h in the United States op is/Aviation Week and Space Technology, Apr 1, 1985, pp 18-20

386 382 International Cooperation and Competition in Civilian SpaceActivities

capitalized on opportunities afforded by U.S. Because of its limited budget, ESA has had to space science program cuts.") The collaboration conduct a more focused scienceprogram than appears to have been mutually satisfying over- the United States or the U.S.S.R.mostlyastro- all, although private discussions revealsome dis- physics and astronomy, andsome life sciences. satisfaction on the French side with Soviet bu- (Since space life sciences work falls within the reaucratic processes. "optional" category of programs, it tends to be The other major Soviet cooperative activity dominated by individual nations, pr'ncipally with a non-Communist nation has been with In- France.) The Giotto mission to Halley in 1985 will dia. With the exception of the first Indian satel- be the agency's first planetary mission. Also,no lite, Aryabhata (1975), dedicated to solar andat- autonomous manned space activities have been mospheric studies, and an Indo-Soviet balloon attempted (the German payload specialist aboard experiment in gamma ray astronomy in 1979, the Spacelab 1, Shuttle flight 9,was the first ESA joint projects have been applications-oriented. astronaut). Nevertheless, ESA's accomplishments However, an Indian cosmonaut visited the Salyut- in space science have been considerable. Coop- 7 station in April 1984. erative missions such as International Ultraviolet Explorer (IUE, 1978) and International Sun-Earth Beginning in the early 1970s, India has parlayed Explorer (ISEE, 1977/78) have producedsome of a very modest inve-tment in space into a credit- the best science, and have been virtually textbook able program which is now nearing self-sufficien- cases of internationa: joint ventures. cy. To do so it has relied on assistance primarily from the United States, the U.S.S.R., and France, The subject of reciprocity for American prin- and on a substantial pool of domestic scientific cipal investigato son ESA missions has already talent. In the process it has successfully main- been discussed. One point relative to that issue, tained a balance between independence andco- and to ESA's long-term resistanceon it, is that operation, becoming a model for Third World (unlike NASA) ESA does notsave money when countries not only in the development ofa space American experiments are flown; rather, the program, but also in dealing with the super- member countries do, ona proportional basis. powers. It is partly India's leadership role in the Therefore, the loss of opportunity toa prospec- Third World that attracts Soviet attention, for In- tive European principal investigator looms much dia represents a lever by which the space-related larger as a factor. ESA has ultimately agreed with organizations at the U.N. can be influenced. NASA's position that itsprogram has reached maturity, and that U.S. assistanceover the years must European Space Agency: now begin to be, in a sense, paid back. Cooperative Outlook Current or Planned Programs Through ESA, the advanced Europeannations have been able to mount a spaceprogram com- As was pointed out earlier in this chapter, be- parable in scale with those of the United Sates cause of the increasing capabilities of space-faring and the U.S.S.R." Although a primary area of en nations as a whJle, cooperativeventures are in- deavor is space science, ESA's budget (currently creasingly common and increasing." affect the about 16 percent of NASA's' permits it to launch competitive balance of the nations involved in a medium-class space science mission only every space and space science. The following brief case 18 months. Cooperative activity, with the United studies illustrate the ways in which this dynamic States and with individual member nations, in- is being altered. creases considerably the rate of participation in space science. Infrared Astronomical Satellite (IRAS) 16.5oviet Space Programs 1976-80, op cit, pp 288-289 This trilateral missionwas launched in January "For a full discussion of ESA's evolution and its programs, see Civilian Space Policy and Applications (Washington, DC U S Con- 1983, and was the first major astronomical satel- gress, Office of Technology Assessment, OTA-ST1-177, lune 1982), lite launched since 1978. A short-livedsurvey tei- pp 176-187 escope, IRAS was first conceived by the Dutch

3S Ch. 9Space Science 383 but, at nearly $300 million, was not affordable Significant IRAS findings include: as a national project. The Netherlands approached a suspected burned-out comet, the United States for assistance, and the cost was dust in the asteroid belt, split three ways among the Netherlands, the a ring of interstellar dust and solid particles United States, and the United Kingdom. The orbiting the star Vega, and spacecraft was built by the Netherlands, with the infrared-emitting galaxies. United States providing a cryogenically cooled infrared telescope and detectors, and the United International Halley Watch (IHW) Kingdom providing the ground contra' and operations facility. The United States launched IRAS. This designator refers to the network of ground- Although the detectors aboard the satellite func based observations and data coordination that tioned as planned for only 11 months,18 it re- NASA will provide during the Halley missions in turned a wealth of new scientific data on infrared 1985-86. NASA will fund several international ob- objects that were previously unobservable. servational networks in addition to its own Deep Space Network; these will form the link between Earth-based and in situ observations of the comet ' "The liquid helium used to cool the infrared detectors boils away ephemeris (positional data). NASA will also make over time, limiting the life of the detector to the lifetime of the wad- able helium coolant supporting observations from Earth orbit via a collection of ultraviolet telescopes aboard the Shut- tle, known as Astro-1. Until mid-1982, there was a pofsibility that NASA would fund a Halley Earth Return Mission. That mission was not approved, so four spacecraft will travel to the vicinity of Halley: ESA's Giotto, two Soviet Venus-Halley (Vega 1&2) spacecraft, and Japan's Planet-A. This will be a first planetary mission for both ESA and Jaw. NASA's decision not to mount a mission was based partly on the fact that large quantities of in situ data will be collected by the already planned rnif..-s;ons. In addition, NASA is supporting U.S. co-investigators on nearly every C;atto experiment. Interestingly enough, a U.S. instrument is being flown aboard one of the Soviet Vega spacecraft.' 9 There has been considerable multinational communication among these participants (including NASA), and an "Inter-Agency Consultative Group" has been established to coordinate en- counter strategy and other matters relating to the space missions. A "Spacecraft Navigation and Mission Optimization Group" within this organization will provide the link between IHW ground observations and imaging data obtained aboard the various spacecraft. Data acquired Photo credit* National Aetchautki and Space Administration from the U.S.S.R. Vega 1 probe will provide posi- Infrared image of the center of the Milky Way galaxy taken from the Infrared Astronmical Satellite (IRAS). The Netherlands and the United Kingdom participated "John Noble Wilford, "U S Device Riding Soviet Spacecraft" with the United States in this survey mission. New York Times, 12/21/84, p A 1

31() 384 International Cooperation And Competition in Civilian Space Activities

tional data needed by ESA's Giotto spacecraft in tor, to be accompanied by smaller Japanese de- its attempt to come within 1,000 kilometers of tectors similar to those already flown. The United the comet's nucleus. The Vega spacecraft will Kingdom is now a "junior partner" in almost precede Giotto by several days, allowing its ob- every current joint astronomical mission. servations of the comet to be used 'n a final course correction of Giotto. International Solar Polar Mission (ISPM) Space Telescope (ST) Planned initially as a completely joint ESA/U.S. mission, ISPM became something of an interna- This is one of only two large U.S. astronomical tional cause celebre when the United States can- satellites currently approved (the other is the celed the most important part of its side of the Gamma Ray Observatory). Due for launch in mission. The mission was to consist of two space- 1986, it will be the most important telescope of craft (one from each agency) which would fly well the decade, putting in space a 2.4-meter tele- out of the plane of the solar system to cross the scope with an innovative "honeycomb" mirror. north and south poles of the Sun. When NASA Instruments at the focal plane will include two was faced, in the Reagan Administration's first cameras, a spectrograph, and a photometer to budget, with a large reduction, it became nec- cover the UV and optical spectrum. ESA is con- essary to cut either the Galileo mission, ST, or tributing a Faint Object Camera, in the develop- ISPM. ISPM was tappedthat is, the U.S. space- ment of which seven countries are participating. craft was canceled. However, the United States ESA will also provide the solar array and ground will still launch the ESA satellite, provide track- operations support. In return, ESA astronomers ing and data relay, and fund a number of exper- will receive 15 percent of the observing time. iments on the remaining satellite. This telescope will be able to detect objectsper- The European reaction was unexpectedly haps 100 times fainter than are observable with strong and outraged. ESA 'rod spent $100 million ground instruments, and is designed to last at least on the project, and v'as counting on the unique 15 years. NASA Administrator Beggs terms it "lit- stereoscopic view of solar phenomena made pos- erally... acooperative effort of the world's sible by two satellites. In addition, European astronomical community."2° An important ele- scientists planoing to fly experiments on the U.S. ment of this cooperation is the creation by the craft lost their opportunities. The affair has since Ui.:d States of the Space Telescope Science In- cooled down, although it is even now a sore point stitute, in which scientists from many countries raised as an example of the dangers of interna- are working to ensure thorough dissemination tional cooperation on a major project. and analysis of ST data.

Astro-C Outlook for Future International Cooperation This will be the third in a series of increasingly large and sensitive Japanese X-ray satellites. Un- In some respects, the era of small-scale missions like its predecessors, however, Astro-C isa joint performing valuable space science is nearlyover. mission between Japan and the United Kingdom. All new planetary missions and all manned and Japan prefers the autonomy of a national mis- most biological missions are expensive; the next sionits space science budget, roughly as large generation of cooled IR and X-ray observatories as ESA's, will usually permit it. The United King- will also be expensive. State-of-the-art missions dom also prefers national projects, but has not in space science will increasingly require multi- had one since about 1977. It has, however, had funding cooperation in order to be done. ROSAT, considerable X-ray experience in the Ariel series, Galileo, GRO, Starlab, FUSE, OPEN, iSTP (see 3,3 Japan asked it to develop the very large detec- table 9-1)the list of planned and proposed joint ventures is longand U.S. commitment to co- i"An Interview with lanes M Beggs, Sky & Telescope. October operate remains strong. Tl-ie President's "National 1982 p332 Space Policy," announced ;n July 1982, reaf-

391 Ch. 9Space Science 385

Photo credit: National Aeronautics and Space Administration Artist's conception of the International Solar Polar Mission in its originalconfiguration. NASA and ESA were to have flown two separate satellites, each in opposite directions over the Sun's poles. There will nowbe a single ESA satellite with participation from the United States. In this drawing the solarwind (cosmic rays emitted by the Sun) is depicted by the snake-like trail emanating from the Sun. The arrows indicate materialthat the Sun emits from its polar regions. firmed the need to "promote international co- Director of International Affairs, Kenneth Peder- operative acti Mies in the national interest" as a sen, asserts that there are three assurancesthat basic goal. This goal was reemphasized in the NASA can offer ESA: 1) the ISPM experience, with State of the Union Address delivered in January its repercussions, makes it less likely that similar 1984, in which the President expressed his ex- events will take place in the future; 2) budgetary pectation that "NASA will invite other countries austerity means that only top-priority (and there- to participate" in a U.S. space station effort. fore not expendable) science projects will be approved; and 3) space science is on the upswing The concerns provoked by ISPM and by U.S. within NASA. budgetary uncertainties in general have brought about a change in outlook more than behavior: Jointly coordinated planning and management "We learned a great deal about the U.S. budg- will probably be essential in the future. One ap- etary processes," as ESA's Washington represent- proach is the current activity of a Joint Working ative puts it. "...We shall be more cautious in Group of the NAS Space Science Board and the the future about drawing up agreements." NASA's Space Science Committee of the European Science

3 92 386 International Cooperation and Competition in Civilian Space Activities

Foundation toward establishing a framework for Technology Experts.21 This consideration is not the joint conduct of future planetary exploration. as directly relevant to space science, however, These discussions include formulation of a strat- as it is in the areas of launcher development and egy in terms of science goals and missions, and applications-oriented space activity. Neverthe- definition of a desirable approach to long-term less, it wiil play a role in the space sciences, par- cooperation. ticularly in light of the Soviets' apparent will- The broadening of cooperation will inevitably ingness totrain andflycosmonauts from require the leading countries in space to deal on developing countries (e.g., India). The United a policy level with the pressure from Third World Statesmust remain cooperative in order to remain countries for participation, as expressed recently competitive. by some members of the Committee on the Peaceful Uses of Outer Space (COPUOS), delegates to UNISPACE '82, and attendees at the Feb- 21UNISPACE '81 A Context for International Cooperation and ruary 1983 Intergovernmental Meeting of Space Competition, op cit

THE ROLE OF COMPETITION INSPACE SCIENCE

It is a truism, certainly in our free market sys- All of these factors combine to shapea coun- tem, that competition promotes better perform- try's competitive posture. It may then be asked, ance This applies in space science as well, does a country's competitive strength, gauged by whether on a national level, between research these criteria, determine its standingamong na- teams and laboratories, or on an international tions participating in space science? Are there level, between space agencies. But competition clear winners and loserson the international in space science works to the advantage of some scene? more than others. There are many factors at work other than sheer technical and scientific capabil- Prospects for a "Space ity. Institutional and economic variables on the national level come equally into play. Forexam- Science Race" ple, the amount of funding allocated is obviously The answer to that question, for the moment, a major factor. But also important is the degree appears to be "no." In large part this is because of governmental commitment to an endeavor two of the principal players, the United States and that will not immediately produce revenues or the U.S.S.R., have for decades had thegame es- increase the standard of living of the populace. sentially to themselves. They have competed, but This "willingness to take a risk" is essential; if, only at times "head-to-head," and inany event for example, a country provides governmental there was nc actual prize to win, beyond politi- support for the training of graduate students in cal prestige. 'Each nation has essentially cultivated astrophysics, then that activity is more likely to its own group of proteges. In thecase of the West, flourish competitively. The style of management some of these client nations have only recently accorded space science R&D and missions oper- begun to acquire a degree of self-sufficiency in ations is another important factor; a cumbersome, the support of space scienceprograms. There is multilayered bureaucracy will not allow efficient not yet adequate scope or momentum in these conduct of space science. Long-range planning programs to surpass the United States in any area. is also crucial: it must include realistic goals,an Space science mission, are selected out ofa intelligent assessment of scientific priorities, and common pool of ideas that, in most cases, have a shrewd appraisal of foreign plans. The degree been around for more thana decade. There is to which scientific opinion enters into the plan- no element of surprise. There is certainly no point ning process is also a factor. in duplication of missions,or in racing to launch.

3d3 Ch 9Space Science 387

A case in point is ESA's decision to build an In- United States. The United States is clearly the frared Space Observatory (ISO), which will be overall leader in space science. This is true similar in performance to NASA's planned Shut- even in view of the fact that only one mis- tle Infrared Telescope Facility (SI RTF). The likely sion (Solar Max) was launched between 1978 outcome is two separate missions with overlap- and 1983, while resources were being fo- ping but independent experiments to prevent too cused on the space shuttleU.S. current much duplication. In general, scientific data are weaknesses in X-ray astronomy will be rec- shared fully in the West, and it is to the benefit tified (it is hoped) by the proposed Advanced of all concerned to continue doing so. The con- X-Ray Astronomical Facility (AXAF); but at tinuing flow of information even between East any rate will be improved by participation and West makes this point clear. in the German ROSAT mission. The lan- guishing planetary program will be revived To say that there appears to be no scientific by the Galileo mission to Jupiter and by the space race in prospect is not to say that competi- Venus Radar Mapper (a new start in 1984) tive factors have no impact. Institutional commit- and a proposed Mars Geoscience/Climatol- ment and funding lever will inevitably affect the ogy mission (a new startin1985). Life rate, efficiency, quality, arid economy of missions sciences is being resumed in earnest on mounted and science performed. The positive Spacelab, with two dedicated Spacelab life image and reputation for reliability thus gained sciences missions tentatively scheduled for would then make a country an attractive coop- 1985 and 1986. erative partner, not only in space science but in European Space Agency. ESA's development the more commercial areas of space activity as in space science during the 1970s was rapid, well. as demonstrated by the ESRO and HEOS sat- One further point that should be made is that ellites, and especially by COS-B, a highly suc- it is only in the planetary sciences that there are cessful gamma ray satellite. A number of im- tangible 'prizes" to be won. Soviet spokesmen portant joint missions with the United States have consistently hinted at an agenda consisting augmented its autonomous programs in asof: 1) permanent manned presence in Earth or- tronomy and astrophysics, which are now bit, 2) colonization of the Moon, and 3) manned being continued with Exosat and Hipparcos. missions to Mars.22 The first step is already a re- ESA's venture to Halley's comet is its first ality, for all practical purposes. Any resumption planetary mission. On the basis of techno- of an active "space science race" between the logicalsophistication and diversityof United States and U.S.S.R. would likely focus on science, ESA is ahead of the U.S.S.R., al- the second. However, science would only be in- though not by a wide margin. cidental to such a contest. Soviet Union. The Soviet Union ranks ahead of Japan principally on the basis of its highly Current Ranking of Participants successful Venera series. Using vacuum-tube technology to withstand the planet's high It was pointed out earlier that technical, eco- surface temperature, this program has been nomic, and institutional factors determine a na- impressive. Another strong mission is Ven- tion's "competitive posture" for space science, era-Halley, which will drop probes to Venus and that this affects its ranking among nations and continue on to rendezvous with the although historical factors are at this point pre- comet. The U.S.S.R. is also advanced in the dominant. The following is a brief assessment of life sciences, both animal and plantchiefly the ranking of the four major entities in space bezause of the huge number of man-hours science: in space that its Salyut program has afforded. The Soviet effort in astronomy relies to a great extent on French technical capability.

"Salyut ,Suviet Step% Toward Permanent Human Pretence in Japan. This country is fourth, but is probably Space, up tit, p 4 moving the fastest. It currently has a narrowly

394 388 International Cooperation and Compettion in Civilian Space Activities

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Radar image of surface of Venus from Soviet Venera 16 spacecraft,January 1984.

focused program of solar terrestrial and as- Tradeoffs Between Competition trophysics research. The Planet-A mission to and Cooperation Halley will be its first planetary mission. Ja- pan has about one-tenth of NASA's budget The conduct of space science ina cooperative for space expenditures, and like NASA's, the yet increasingly competiti ie atmosphere gives rise overall budget has not grown substantially to some crucial policy issues. For example, the n recent years. In Japan, space science re- reduction of opportunities for U.S.space scien- search is conducted by the Instit.ite of Space tists in recent years brings to a sharper focus the and Astronautical Science (ISAS), a division criticisms of our open policy toward foreign proof the Ministry of Education. Although the posals. There is a tendency towarda protectionist budget for space science has increased sub- attitude among scientists, who view some collab stantially in recent years, most of the increase orative efforts as "giveaways." The only answer has gone for the construction of a new cam- to this is to ensure that foreign experiments win pus on the outskirts of Tokyo. Thus, of the approval on their own merits in everycase, and $80 million fiscal year 1983 budget for ISAS, that foreign governments pay their full share of $58.5 million went for space science and ob- every joint project. Yet policy decisions may oc- servations and $0.5 million for the high- casionally override these considerations, particu- altitude balloon program, with the remain- larly in the case of Third World countries. A pol- ing $21 million for various overhead costs; icy for dealing with this issue will be required. the increase for space science and observations in the fiscal year 1984 budget was a There is, as yet, no formal policy for dealing modest 4.3 percent, bringing its total to some with the issue of technology transfer. Currently $69.9 million. With the advent of a U.S. such decisions are made on a case-by-case basis, space station, Japanese spending for space and there is room for error here. Sucha policy science could be expected to rise more will be difficult to implement, because thecon- sharply. A Japanese space official estimates cerns are specific to each case. Often, there is that Japan is 5 years behind ESA and 15 years no problem because the technology is packaged behind the United States in space science. in such a way that it carnot be compromised. The new ISAS facilities, however, should But the growth of cooperative activity (e.g., be- position Japan well for future efforts to over- tween the French and the Soviets) increases the take ESA. risk of loss from both primary and second-party

3 t95t Ch 9Space Science 389 transfer. Our cooperative partners in space sci- closely grouped in the sense of product ca- ence are increasingly likely to be our industrial pabilities, performance, and quality. The real competitors. competition here is in price and reliability. Data Processing. This category includes all Markets for Hardware and Services: computer systems and facilities on the Space Science as Growth Industry ground for reception, analysis, and dissemination of spacecraft data. This area is the In recent years the most vigorous and dynamic least relevant to a discussion of the national areas of the U.S. economy have been the high- and international markets, since most U.S. tech fields: electronics, data processing, commu- missions do not require new facilities but rely nications, robotics. The conduct of state-of-the- on existing equipment at JPL (planetary mis- art space science relies to a great extent on these sions) and Goddard Space Flight Center. Be- fields, and on specialized applications such as cause this is the least critical area relative to high-quality optics and sensors. The value of this mounting space science missions, large dif- endeavor to the stimulation of further growth in ferences in ground-link data processing ca- these fields, and thus in the economy, has not pability among nations have relatively little yet been estimated. However, in the context of effect on space capability. (A case in point an overall NASA space science budget of $1,030 is the U.S.S.R., which has only in the past million (fiscal year 1985), it is clearly considerable. 2 years modernized its ground control facilities approximately to a mid-1970s level of What are the essential products and services U.S. computer technology.) Nations with no at issue? They fall into three categories: copability (e.g., The Netherlands) generally Instrumentation. This category includes all exchange scientific data for tracking and data sensing devices and associated hardware processing services. mounted on a scientific spacecraft: telescopes (including mirrors, lenses, housings, International Trade Factors and mechanisms for placing instruments at the focal plane): detectors (e.g., gamma ray, There are 13 U.S. space systems manufacturers, X-ray, IR) and spectrographs, cameras, and with two or three times that number supplying associated systems such as cryogenic cool- major components. Of these, only five have ever ing apparatus. Major ''ariables affecting cost manufactured space science spacecraft: Hughes, and availability inclu,2 spectral resolution Boeing, TRW, Grumman, and Ball Bros.* This and sensitivity. fact indicates as well as any other statistic the Spacecraft. This is essentially the develop- small size of the market in this area relative to ment of numerous variztions on a theme, that for launchers, applications satellites, and mil- with main components being the mounting itary systems. In dollar terms, the domestic mar- platform, an electrical bus for powering the ket amounts to about 85 percent of the NASA instrument5, and a system for thermal con- space science budget in any given year (e.g., trol. The technology is fairly standardized. roughly $716 million in fiscal year 1984), for sys- One area where R&D is still quite active is tems, components, and data analysis. in the search for ways to improve pointing The main point to be made is that, although accuracy and stability (accomplished by there is a national market, there is only a very feedback loops between the instruments and small international market in space science tech- the attitude control system). The improve- nology. Boeing has contracted to Sweden to build ment of onboard computer technology in the Viking satellite, at a cost of $9 million to $10 terms of storage capacity and data rates is million. Ball Bros. manufactured parts of the IRAS another developing area. Most systems (e.g., spacecraft. The total annual U.S. sales to foreign gyroscopes) are not particularly competitive in terms of technology. U.S. manufacturers 'RCA and GE, however, have built research satellites for Earth dominate the field internationally, and are s( once missions 3J6 390 International Cooperation and Competition in Civilian Spa .e Activities

countries, including components andspares, optics. But in general, U.S. companiesare far does not exceed $50 million, and insome years ahead of their foreign counterparts in the devel- is less than $20 million. Foreignspace programs opment of space science satellites and syskms. are generally requiredwhether implicitly or ex- plicitlyto keep their business at home. It issig- One development having potential implications nificant that no U.S.company has foreign sales for the stimulation of a market in thisarea is Boe- representatives for these systems. ing's development of MESA, a "generic" platform satellite similar to that being suppliedto Sweden. Foreign companies' sales to the United States Their approach is to offer a low-cost, standard- are even more limited. The solar arrays on Space ized bus and then 'o assist scientists in shaping Telescope will be built by British Aerospace. The the experiment tc't within its parameters. Boe- German firm Telefunken manufactures traveling ing is marketing this system internationally with wave tubes that have been bought by U.S. man- the help of Arianespace and Matra, the French ufacturers for use in onboard communications space companies. systems. Zeiss is a competitor of Perkin-Elmer in

SPACE SCIENCE IN DEVELOPING COUNTRIES

The Allure o Space Science that initiatives in space applications have most often been taken by people who were earlier Any discussion of this topic must be prefaced motivated by their interest in space science. by an acknowledgment that the interestso vocal- ly expressed by Third World countries ingreater Space science offers the ability to build the nec- participation in space activitie' is explicitlyan in- essary skills and knowledge, the research groups, terest in the "practical" side of space: television the facilitiesthe infrastrudure for space applica- and telephone communications for business, ed- tions. It also offers a model for the kind of large- ucational, medical and other purposes; remote scale cooperation with the primary space nations sensing of their terrain and weather; launcher that is needed to build and sustainan applica- services, etc. Chapters 3, 6, and 7 in particular tions program. The following "directions to fol- address these major aspectf of the subject. As- lovr" are excerpted (and summarized) from the tronomy or planetary exploration for their own UNISPACE Forum report:24 sake are "luxuries" that the Third World cannot 1. Obtaining Scientific and Technical Capa- yet contemplate. bilities Yet there is a small but essential role for space Training of scientific/technical personnel science in the context of Third World aspirations. by: Ev'n though developing countries are particularly inviting foreign experts; interested in the economic and practical bene- training in foreign countries; and fits of space activity, they are notunaware of the participating in seminars, _onferences, fundamental value of space science:23 summer study sessions, etc. Such training should be strengthened it is sometimes argued that basic sciencem through locally conducted space experi- general, and space science in particular,are not ments (usually cooperative and modest). important in a world dressed by practical prob- Training must not Ex? overspecialized. lems. This is not correct. Besides the fundamental argument that an unaerstanding of the uni- Basic training in electronics, optics, com- verse is important in its own right, it is also true puter sciences, etc., is essential.

23Report of the Second United Nations Conference on the Ex- 24' Relevance of Space Science for Development," in the Con- ploration and Peaceful Uses of Outer Space, Vienna, Aug 9-12, clusions from the UNISPACE Forum, Vienna, Aug 4-6, 1982, pp 1982 2-3

3T/ Ch 9 Spare Science 391

Training of high-level scientific and tech- Thus, our past cooperative ventures in space nical teams should be emphasized over science with countries such as 1:-.oia, Pakistan, training of individual specialties. Peru, and Brazil have a larger significance than 2. Fostering International Cooperation: their purely scientific content would indicat . Smaller countries, of modest means, can As was noted earlier, because of the great in- develop a major space capability only by crease in cost of space science projects there is forming into groups (e.g.,ESA, Inter- likely to be more cooperation in the future. An cosmos). increase in cooperative activity in general will Developing nations can oarticipate in the make the pressure from the Third World for par- space activities of industrialised countries ticipation more significant. Competition for co- by: operative activity as a political tool is therefore studying data from foreign satellites, likely to be an increasingly important factor on developing their own receiving sta- the world scene. President Reagan's offer in early tions, 1984 to fly an astronaut from the People's Re- participating in balloon or sounding public of China is certainly a case in point, though rocket experiments, subsequent discussion of this possibility has participating as guest investigators in focused on ensuring a substantive science return foreign protects, and with space plasma physics as the most likely sub- developing instruments forflight ject of joint investigation. aboard foreign spacecraft. Development of regional space research Although many developed nations (and ESA) centers and facilities could provide ben- may eschew cooperative arrangements inwhich efits at a low cost. the outlay is one-sidedas it will necessarily be in the case of space sciencethe United States Difficulty of Joining the Space Club probably cannot afford to overlook the political side of these activities. At the very least, policy- One of the expressed motivations underlying makers should be aware of the value of low-level U.S. cooperative activities in space is the politi- scientific activities in building part of the infra- cal one of winning friends and influencing na- structure needed for participating in applications, tions. This rationale certainly applies in those and should make this consideration part of any areas of the world where the diplomaticbalance long-term policy regarding the involvement of de- is less certain than it is among our majorallies. veloping nations in our space program.

SPACE SCIENCE IN T I-1 r" 1980s AND 1990s: A VITAL. CONCERN As an enterprise, space scienc o , had serve this essential undertakingfrom long-term quite the drama of the manned spac.., orowarns budgetary dedne. of the 19b0s and early 1970s; likewise, ti)e inter- As a foundation for applications in space, space est in commercialization in space may Jvershad- science will continue to be a most useful tool for ow its achievements in the public mind. Yet space diplomacy. Space science will also continue to science has a healthy .uture. The reaction to the be one of the small drivers of the most advanced Viking photograrhs, and especially to the Voy- elements of our national industry and economy, ager revelations and IRAS discoveries, showed fueling innovation and growth in many areas. This that there is a lively public fascination witll basic will be particularly important as private invest- discovery in space. The findings of the space ment in space expands. telescope may have a similar impact. There is a strong base of public support for space science Finally, it may be that space science will prove in the United States, one that will help to pre- valuable as an offset to military competition in

398 392 International Cooperation and Competition in Civilian Space Activities space, providing an outlet for the competition for fering a vehicle for cooperation that could once strength and prestige and, more important, of- again have a part in some future version of detente

POLICY OPTIONS

Cooperation With the Soviet Union As was pointed out earlier in this chapter, the history of Soviet cooperation with the United States in space science has been surprisingly strong. Yet, at any point in this history, the future has always been unpredictable. The United States has traditionally left the door open to cooperation, and the U.S.S.R. has occasionally taken advantage of the invitation. There has generally been little prelude to such initiatives. They are opened by the Soviets on an informal basis, usually through scientific exchange, as global politics appear to permit. In 1982 the United States decided not to renew the 1972/77 Intergovernmental Agreement. This decision undoubtedly had some of the intended diplomatic impact on the U.S.S.R., but it also eliminated opportunities for U.S. scientists and stifled what had been a frulful area of international exchange on many levels. At this point, the scientific value of reestablishing that inter- Photo credit' National Aeronautics and Space Administration change may exceed the political value of con- Apollo-Soyus Test project (2975). This scene, which tinuing to interdict it. Although the political ben- was photographed from a rendezvous window of the efits to be gained by cooperating with the Soviets American Apollo spacecraft in Earth-orbit, shows the Soviet Soyuz spacecraft contrasted against a black-sky appear relatively small,25 the scientific benefits background with a heavily cloud-covered Earth below. of cooperating in certain subfields of space science could be well worth the effort. In the previous agreement, the two primary areas of scien- 1 a focus on well-defined and specific scientific cooperation were in projects studying space tific objectives; biology and medicine and the Moon, planets, and 2. the selection of areas of complementary abil- near-Earth space. Of the two, the most substan- ities, which provides strong motivations to tive and successful cooperation was in the life continue to cooperate once a project is sciences. started; 3. the selection of instrumentation that did not Scientists actually involved in these exchanges raise concerns about technology transfer; believe that the overall success of the collabora- 4. institutional organization that gave officials tions in life sciences can be attributed to. on both sides the autonomy to decide how to implement plans; and - - - 5. the development of mutual confidence, ItitiueInV S -C(P.let ( ooperanon InSpace, Office of Technol- knowledge, and goals among working groups ogy Assessment,in prey, over a long period of cooperation.

3 Jli Ch 9Space Science 393

In the planetary category, the strongest areas cificaccomplishmentsiscounterproductive, of cooperaton were in lunar studies. the explora- competition is likely to take the form of long-term tion of Venus, and solar-terrestrial physics. The jockeying for areas of specialization (e.g., as- exchange of lunar samples and cartographic data tronomy, planetary missions). Manned planetary provided both sides with a range of information missions (supported by life sciences research) unobtainable by either program alone. ultimately hold the greatest strategic importance; it is this area that the Soviets appear to be em- As noted above, however, Public Law 98-562 phasizing. Yet astrcnomy and astrophysics are proposes a limited re; iewal of U.S./U.S.S.R. coop- perhaps more important to the advancement of eration. Such cooperation, if renewed, should be related Earth-bound technologies and to the ac based priman'y on the lessons learned from pre- quisition of knowledge essential to Earth-sensin3 vious cooperative programs. and meteorological applications.

Project Continuity Technology Transfer From a political standpoint, the most important The United States may embark on a program thing the United States can do to maintain its posi- to build long-term infrastructure in space for tion of leadership in space scieoce is to provide manned activities.26 If so, such a program will cer- assurances to cooperative partners that our com- tainly include some space science research. Many mitments will be kept. The unilateral decision of of these space science projects, and indeed, cer- the United States to reduce sharply its role in tain components of this infrastructure, may in- ISPM continues to be mentioned as an example clude cooperative efforts with other countries. It of U.S. unpredictability in cooperative efforts. will be important for the United States to work Assurances may have to take the form of multi- out policies governing technology transfer to en- year funding for international missions, so that sure that we do not give away our competitive they are not subject to the vagaries of annual edge, while cooperating as fully as possible with budgeting. Although U.S. political institutions are others. not structured in such a way as to make multi- year funding generally either particularlydesira- ble or feasible, given the importance of our relationships with our allies, providing multi-year funding for certain specific space prnjects may be appropriate.

Choosing Specialization mCivilian Space Stations and , he U 5 Futurein Space (Washing- Given the peculiar competitive environment of for DC U S Congress, Office k.; TechnologAssessment, 017. space science, in which "racing" others for spe- S11-241, November 1984)

4(10 7' -1:37,-477''.7.7:7;.7,:w,, n'gifFfIVA'Zfly?qrA'-'?,ir , Contents

Page introduction 397 Space Policy and National Objectives 397 Setting Goals and Objectives 399 Approaches to Competition 400 Principal Elements of Competition Policy in Space-Related Activities 401 Approaches to International Competition 403 Elements of Cooperative Policies 408 Emphasize Cooperation That Contributes to the Technological Goals of the United States 409 Emphasize Political Benefits of Space Technology 410 Partkipation in International Organizations 411 Provide Assistance to Developing Countries 411 Establish International Organizations to Provide Space Services 412 The Relationship Between Cooperation and Competition 413 OrganiziAg for the Future 414 Maintenance of U.S. Leadership 414 Scientific Research and Technology Development 415 Commerciai Application and Development of Space Industries 415 International Commercial Competition 416 International Cooperation 416 Responsibility for Individual Technologies 417 Conclusion 419 Chapter 10 POLICY ALTERNATIVES

INTRODUCTION

The policy by which the U.S. civilian space pro- ment its basic provisions. Over the past 27 years, gram has developed was first articulated in the the Act has been amended from time to time, but 1958 National Aeronautics and Space Act (NAS its basic guiding principles, including the above Act), which provided broad guiding principles for references to competition and cooperation, have U.S. space activities. The Act authorized the for- remained intact. According to most observers, mation, of the National Aeronautics and Space because of its generality, the NAS Act remains Administration (NASA) and declared that "activ- an appropriate overall guide for the Nation's ci- ities in space should be devoted to peaceful pur- vilian space activities.' Nevertheless, the terms poses for the benefit of all mankind" (sec. 101(b)). on which the United States and other nations It specifies, among other things, that NASA should operate in space have altered dramatically over conduct its space activities so as to contribute to: the years. As the analysis of previous chapters has emphasized, the emergence of commercial and the preservation of the rose of the United governmental competition from other industri- States as a leader in aeronautical and space alized nations in space, the increasing interest of science and technology and in the applica- the U.S. private sector in space investments, con- tion thereof to the conduct of peaceful activ- cern over access of U.S firms to foreign space- ities within and outside the atmosphere; and related markets, and anges in the climate of cooperation by the United States with other cooperation with both developed and develop- nations and groups of nations in work done ing countries, raise several important policy pursuant to this Act an(' in the peaceful ap- questions: plication of the results thereof.' 1. What new national goals and objectives, if Where necessary, Congress has enacted other any, are needed to sustain the general prin- specific legislation, such as the Communications ciples of the NAS Act in the 1990s? Satellite Act of 1962,2 which created the Com- 2. What alternative approaches or strategies munications Satellite Corp. (COMSAT) and aided should be considered by Congress in imple- in establishing INTELSAT,' or took other legisla- menting these goals and objectives? tive measures to advance the civilian uses of 3. What are the appropriate roles of incPvid- .5pace.4 All of these measures have built on the ual Government agencies, including NASA, provisions of the NAS Act. in carrying out future space policy and con- The broad policy principles of the NAS Act ducting governmental space activities? have allowed each successive Administration 4. What is the appropriate role of Government considerable latitude in deciding how to imple- in supporting and regulating private sector activities in space? 'National Aeronautics and Space Act of 1958, z.:, amended, sec 102 (c), Public Law 85-568, 85th Cong , H R 12575, July 29, 1958 'Communications Satellite Act of 1962, Public Law 87-624, 87th Space Policy and National Objectives Cong , H R 11040, Aug 30, 1962 ,Communications Satellite Act of 1%2, Amendment International The use of space technology is undergoing a Maritime Satellite Communications Act, Title V, Public Law 95-564, period of rapid and significant change. Because Nov 1, 1978 'or a more detailed discussion see U 5 Congress, Office of Tech. decisions concerning many domestic space-re- nology Assessment, Civilian Space Policy and Applications, OTA- 51-1-177 (Washington, DC U S Government Printing Office June 5See, for ex'mple, Finding 2, Sec 202 of Public Law 98-361, which 1982), ch 10 Congress also enacted the National Science and Tech- states, "The National Aeronautics and Space Act of 1958 has pro- nology Policy, Organization arid Priorities Act of 1976 (Public Law vided the policy framework for achieving this success (of the U.S. 94.282), which, among other things, authorized the formation of space program), and continues to be a sound statutory basis for the Office of Science and Technology Policy national efforts in space

397 403 398 International Cooperation and Competition in Civilian Space Activitges

lated issues necessarily affect decisionsover in- cialization of space technology.6 Yet thepo- ternational issues related to foreign competition litical and economic dimension ofspace and cooperation, domestic and internationalcon- technology already exceeds the purview of cerns must be considered simultaneously. Exam- zny one Government agency' let alone one ples of such domestic issues include thederegu- dedicated to the demanding task of research lation of the communications industry, the efforts and development of intricate and advanced to transfer space-based land remote sensing to space technology. private ownership, the development ofa com- The United States espouses the virtues of mercial space transportation industry, and the de- commercial competition in satellitecommu- velopment of commercial products from research nication services, yet foreign policy interests on materials processing in space. The n:-essary may cause it to restrict U.S. satellite firms interaction of domestic and international issues wishing to compete in international facilities has produced a complex, and sometimescon- markets. flicting, matrix of policies. For example: There is no single resolution of these sometimes Our desire to benefit from the technology conflicting policies. This report has explored the developed in the space programs of other application of these and other policiesas they re- developed countries andour commitment late to specific space technologies. Because the to assisting developing countries suggest in- path from initial conception toa mature technol- creased cooperation. Yet,our desire to limit ogy capable of governmental, commercial, or sci- the transfer of technology to economicas entific application is a complicatedone, involv- well as political competitors, maintain U.S. ing many decisions of the Government and the technological leadership, andensure that the private sector, it is clear that no single set of pol- economic benefits of U.S.-developed tech- icies can ever be sufficient to govern allspace nology flow directly to the U.S.economy, technologies. The development ofspace goals suggest a more restrictiveinternational and the policy strategies chosen topursue them stance must follow an evolutionary process, responding U.S. commitment to free trade andoper to specific technical as well as social, economic, markets supports policies of reducing Gov- and political problems. ernment subsidies of space industries and One end of the spectrum of policies relatedto eliminating "buy-national" practices.Yet space technology applies directly to questions of most countries, including the United States, technology R&D and Government use "buy-national" policies to support fledg- programs; the other applies to the development of domestic ling space industries and develop valuable experience with space technology. commercial space industries and to theirsuccess in international markets. In the latter,space pol- The United States encourages the participa- icy may serve as a component of more general tion of the private sector in all aspects of industrial policies. As the debatesover 'ransfer space technology development and applica- of remote sensing to the private sector, tion. Yet, in such important areas or over as space the appropriate U.S. response to private competi- transportation and remote sensing, the Gov- tion with INTELSAT, have shown, proposedcom- ernment's own programs have created bar- mercial space ventures may raise important issues riers to the successful commercialization of these technologies. "Public Law 98-361 amends the NAS Act to give NASAresponsi- bility for commercializing space technology The 'JAS Act gives NASA responsibilitynot 'In addition to NASA, the Departments of Agriculture, Commerce,

only for developing untried technologiesbut 'mem, and State as well as the Agency for International Devei. also for supporting critical U.S. competitive orment, the Federal Communications Commission, and the Na- tonal Science Foundation, all have some responsibility for portions aria cooperative goals, including commer- of our overall civilian space program

4 A Ch 10- Policy Alternatives 399

of foreign policy. In some instances, it will be nec- Reagan established a Senior Interagency Group essary to c'ioose between the claims of private for space (SIG-space) under the chairmanship of commercial interests and the demands of diplo- the Assistant to the President for National Secu- macy and international relations. rity Affairs. These considerations underscore the need for The way in which space policy has developed a new national debate and consensus on the Na- in the last decade reflects a generally reduced tion's important goals and objectives in space. congressional role. As the organization and con- Given the current confusion which exists regard- duct of space policy became centered in the ing the future of space technology and the role White House, the twin goals of providing for na- of space policy as it relates to other national pol- tional security and limiting increases in the Fed- icies, including industrial policies, well-articulated eral budget tended to be the most important de- goals would do much to focus he space debate terminants of national space policy. A strong and increase the likelihood of resolving specific indication of these trends is the central role problems. Once specific goals are articulated, it played by OMB in White House policy reviews, will be easier to identify specific objectives to and the membership of SIG-space: NASA, the De- carry us from where we are today to where we partments of Defense, State and Commerce, the would like to be a decade or two from now. In Office of the Special Assistant to the President for time, as relevant technical, economic, social, and National Security Affairs, the Central Intelligence political changes occur, these goals will have to Agency, the Joint Chiefs of Staff, and the Arms be reexamined and, where appropriate, revised Control and Disarmament Agency. Of these, all in the light of such changes. but NASA and Commerce are primarily concerned with national security and foreign policy. Setting Goals and Objectives Much of the success of the NAS Act can be as- In framing the NAS Act, Congress in 1958 rec- cribed to the fact that the Act was a bipartisan, ognized the need for ongoing high-level policy broadly representative response to the perceived review by establishing the National Aeronautics threat of early Soviet successes in space. It rep- and Space Council (NASC), which was chaired resented a national consensus on outer space. first by the President, and later by the Vice-Pres- Although the international use of space has changed ident and included the Secretaries of State and radically over the years, since the NASC was dis- Defense, the Administrator of NASA, and the banded there has been no broadly constituted Chairman of the Atomic Energy Commission. Its national review of this Nation's long-term goals responsibilities included surveying all U.S. space and objectives in space. Recent reviews con- activities, both civilian and military, developing ducted within the executive branch have been a comprehensive program for Government agen- useful for focusing attention on the near-term cies, and coordinating all Government space pro- needs of the space program, but they have been grams. The Council oversaw the U S. space pro- dominated by individuals within NASA and the grim during the critical years of the Apollo aerospace community and have often been in- prcject. fluenced by immediate political and budgetary issues. According to many observers, it is now The Nixon Administration abolished the NASC appropriate to institute a national debate that in- in 1973, in part because of a shift in emphasis cludes a wider range of U.S. industry and socie- after completion of the Apollo project that placed ty and focuses on the long-term goals and ob- the Office of Management and Budget (OMB) jectives for outer space.8 closer to the center of space policy decisions. President Carter assigned formal responsibility for Recent interest in commercial opportunities in space policy coordination to a National Security space and concern over U.S. leadership has led Counc I Po'icy Review Committee for space (PRC- °U S Congress, Office of Technology Assessment, Civilian Spare space), chaired by the director of the Office of Stations and the U.S. Future in Space, OTA-STI-241 (Washington, Science and Technology Policy (OSTP). President DC U.S. Government Printing Office, November 1984)

41)5 400 International Cooperation and Competition in Civilian Space Activities to increased congressional involvement in space 2. maintain the Nation's preeminence in space policy. The 98th Congress formulated and passed science, technology, and applications; three major bills: 3. promote the peaceful exploration and utili- Public Law 98-361, provisions of which: 1) zation of the space environment; arid amend the NAS Act to require NASA to 4. articulate goals and develop options for the "seek and encourage, to the maximum ex- future direction cf the Nation's civilian space tent possible, the fullest commercial use of program." space," and 2) establish a National Commis- The Commission's term is just 1 year. This will sion on Space;9 probably be sufficient to determine important Public Law 98-365,* an act which provides new goals and objectives for the U.S. space pro- for transfer of space-based land remote sens- gram and to lay the groundwork for further pol- ing to the private sector (see ch. 7); and, icy discussion. However, it may be appropriate Public Law 98-575,** an act to encourage to extend the Commission's term beyond 1 year the commercialization of expendable launch in order to assure continued broad-based discus- vehicles (ELVs) and related services. In ad- sion of these goals and objectives. dition, bills dealing with satellite communications have also been introduced by sev- In addition to developing recommendations for eral Members. goals and objectives, it may be appropriate for the Commission to suggest strategies by which Many observers, including OTA,10 have sug- those goals and objectives might be carried out.12 gested that, given the increasing number of gov- The previous chapters illustrate the potential (be- ernmental and private users of space technology, yond satellite communications) for commercial and the emergence of foreign commercial com- application and the opportunities for international petition, any body established to recommend cooperation in the various space technologies. policy should be as diverse and broadly based In ail cases, effective policy decisions can be as possible. The National Commission on Space made only after careful analysis of the individ- is expected to, among other things, help the ual characteristics of the individual technologies. United States: Moreover, a range of broad "strategies" articu- 1. define the long-range needs of the Nation lated by the Commission would aid the devel- that may be fulfilled through the peaceful opm?.nt of policy for individual technologies. The uses of outer space; following sections summarize elements of competitive and cooperative approaches.

9Public Law 98-361 directed the President to establish a National Commission on Space within 90 days of its enactment The bill was signed by the President on July 16, 1984 On Mar 29, 1985, the President announced the Commission appointees 1°See, for example, Civilian Space Policy and Apphcations, op cit , ch 10. J H Gibbons, testimony before the Subcommittee on Space Science and Applications of the House Committee on Science and Technology, Aug 4, 1982 and Oct 18, 1983, T. F. Rogers, testimony before the Subcommidee on Science, Technology and Space "Ti,le II, Public Law 361, the National Aeronautics and Space of the Committee on Commerce, Science, and Transportation, Mar Administration Act of 1984 1, 1984 '2The OTA assessment, Civilian Space Stations and the U S Future *Text in app C in Splice, op c ., suggests a list of goals and objectives that such "Text in app D a commission, if appointed, might wish to consider.

APPROACHES TO COMPETITION

Like other U.S. industries, space-related indus- sales. Like other industries, they are affected by tries contribute to the overall economy by pro- Government policies of many kinds, but they also ducing goods and services, by providing employ- have certain unique characteristics related to the ment and tax revenue, and by making export Nation's overall goals for space. As a result, the

4 J)6 Ch 10Policy Alternatives 401 development of the U.S. space program has led el playing fields" for all market participants. The to the formulation of distinct "space policies" that specific principles basically deal with various set these industries apart from other U.S. indus- kinds of subsidy and favoritism. "Most favored tries. This section identifies the principal elements nation" treatment (no discrimination among for- of U.S. policies for competition in space-related eigners) and "national" treatment (no discrimina- endeavors and then assembles them into four tion between foreigners and residents once in the more or less coherent approaches to international local market) mean that sellers from all countries competition. should be able to compete for ncngovernment, domestic sales on equal terms, once the relevant Principal Elements of Competition tariffs have been paid and other entry terms com- Policy in Space-Related Activities plied with. Export subsidies, below-market credit terms, or subsidized costs are now generally re- As discussed in chapter 4 and in the individu- garded as unfair. Further, favoritism in govern- al technology chapters, U.S. policy toward inter- ment procurement toward national firms is con- national competition involves policies directed sidered, in principle, to be an illegitimate practice toward international trade, noncommercial pro- in an open trading regime. As earlier chapters grams, and R&D. have shown, these concepts are unevenly applicable or applied, even when they have been in- International Trade Policy corporated into agreements, especially to high- in Space-Related Industrif.,6 technology sectors such as space. Nevertheless, they are widely recognized to incorporate the U.S. post-war international trade policy has basic concepts of fairness in international trade. generally been to work for fair and open trade. To further this goal, the United States has been Open trade is not always the objective of a leading proponent of international trading rules governments. In exporting big-ticket items in ad- embodied in multilateral or bilateral agreements. vanced-technology sectors, such as space trans- Although most international agreements regulat- portation contracts or telecommunication sat- ing market access, subsidies, and government ellites, making the sale may be considered more procurement apply only to a limited extent to important than defending the open trading re- trade in space-related equipment and even less gime. When this is the case, as it often is, gov- to services, the fair trade principles involved are ernments resort to subsidies, encourage discrim- reasonably clear and relevant. One day they may inatory treatment at home and in third countries, be applied more thoroughly to trade in space- and compete vigorously through political horse- related goods and services. trading. If free trade principles come to dominate space- A complicating factor is that trade policy is not related trade, the pricing of Ariane and Shuttle, the only or even the principal reason why gov- as well as market access to telecommunications ernments intervene or act in advanced technol- equipment procurement, is likely to be affected. ogy sectors. They underwrite or carry out R&D Even at present, while the general trade principles of both commercial and noncommercial rele- have only a small direct effect on these and simi- vance when they believe that reliance on mar- lar issues, they are the measuring device by which ket forces does not make good public policy. For unfair practices are identified. When agreements instance, it has been plausibly argued that pri- or understandings are reached among govern- vate firms tend to underinvest in R&D because, ments in the space arena, they tend to draw on among other reasons, they may be unable to prof- these principles. it sufficiently from their investment when their According to fair trade principles, market forces competitors can easily copy the technology once should determine market events in most cases. developed. It has also been argued that firms are Governments should not "load the dice" against unwilling to take large risks with long time hori- particular sellers but rather should construct "ley- zons (see ch. 4). To correct for these deficien-

07 402 Intemational Cooperation and Competition in Civilian Space Activities cies in the private economy, governments may Noncommercial Competition have good reason to engage in product-oriented for Leadership R&D, even when it is of direct benefit only to particular industries. U.S. policy toward international competition in space also involves significant noncommercial Certain governments, and certain opinion sec- competitive aspects summarized as "leadership" tors in all countries, espouse industrial policies (or "preeminence," when this leadership is strik- designed to stimulate particular industriesin this ing). The United States has derived substantial for- case, space-related industriesfor the conscious eign-policy benefits from its space activities. Be- purpose of making them more competitive inter- yond the foreign policy benefits that the United nationally. They argue that government interven- States has obtained from noncommercial leader- tions, such as targeted R&D programs, subsidies, ship, the public has derived the direct intangi- import protection, antitrust relaxation, and dis- ble benefit of national pride and the scientific criminatory government procurement stimulate benefits of space research. Any strategy toward "sunrise" high-technology sectors striving to be- international competition must deal with the non- come industries, by shielding them from inter- commercial dimension of competition as well as national competition until they become com- the commercial one. petitive. As the history of INTELSAT indicates (chs. 3 and Even if the focus of industrial policies is primar- 6), there is a clear relationship between cooper- ily domestic, they affect international trade as well. Subsidies in the name of domestic indus- ation and leadership. The United States is a val- trial policy are subsidies nonetheless. When they uable partner for future cooperation because it has achieved high technological status and ca- are .mplemented in pursuit of legitimate domes- pability. tic economic objectives, however, it becomes more difficult to identify them as unfair trading practices. They are therefore less likely to be con- Research and Development tained by general agreements or be the subject of bilateral ones. Nevertheless, the more com- U.S. policy toward space R&D draws on sev- mercially developed the technology, and the eral different motivations. At the simplest level, greater the impact of government support on in- aside from motives of international competition, ternational sales, the more likely it is that this sup- the Government spends funds on basic and ap- port will come to be identified as an unfair trade plied space research because of the direct sat- practice that can be placed on the table when isfaction citizens derive from accomplishing ma- trade negotiations occur, or one that should be jor engineering feats in space or gaining knowledge matched in kind in the interest of fair international of the universe. As space research is directed competition. toward application, the competitive motivations become more prominent. R&D support is undoubtedly one of the most difficult policies to subject to an international The Government is also motivated to stimulate trade regime. Little agreement exists on whether space research by the fact that, without a Gov- itis a threat to the open trading system, even ernment program, certain speculative research when it is designed to improve the international inpotentially commercializable technologies competitiveness of national industries. We have might not be done by private firms. If firmscan- noted international trade effects of subsidized not effectively gain ownership over the research R&D in each of the four technologies discussed results, they are understandably reluctant to fi- in this report. In satellite communications, inter- nance research. national trade considerations are among the principal arguments in favor of the Advanced Com- The problem of ownership arises when research munications Technology Satellite (ACTS) research results financed by a private firm flow into the program (ch. 6). public domain and are used free by competitors.

4 ','S Ch. 10Policy Alternatives 403

For example, research personnel move freely in fact, come into play at some stage in most among U.S. firms and bring the fruits of their re- space research programs and shape the direction search with them. They may also set up their own of the program in direct or subtle ways. It is there- firms in competition with their previous employ- fore often not possible to determine precisely ers. The firm in question is then at a financial dis- which motivation led to a particular projec,. The advantage. If no firm (or industry joint venture) inability to classify projects neatly is also rein- is willing to do particular kinds of research for forced by the fact that ongoing projects often at- the whole industry, it may be appropriate for the tempt to gain support from more than one con- Government to do it for the good of society. As stituency as they progress. an extension of this line of reasoning, NASA has long maintained that the direct and indirect "spinoffs" of NASA R&D have produced returns to so- Approaches to ciety well in excess of the Government invest- International Competition ment. An individual firm might not be able to capture similar returns, even if it could protect its Previous chapters have identified additional research, because the expected profit from an in- specific measures that may be appropriate for a novation may be small compared to the invest- given technology. With these measures and the ment. The Government may be able to justify the previous discussion of th;s chapter as back- program because of the spinoffs. ground, this section discusses four broad alternative approaches: Another rationale for Government support of space research is the trade-related industrial pol- Stimulate substantial exploitation of space. icy motivation referred to above. According to Continue to seek U.S. preeminence in space. this line of reasoning, if the U.S. Government fails Let market forces predominate where pos- to take an active role in some research areas, for- sible. eign research programs will give foreign produc- Keep Government financial outlay low. ers of space-related goods and services an unfair advantage. Countervailing U.S. Government R&D subsidies are one answer to such research Stimulate Substantial Exploitation of Space abroad, but foreign governments, in turn, often This approach employs the three principal ele- justify their research programs as a means of ments of policy discussed above for the overall countering ongoing U.S. civilian and military purpose of stimulating the development of space space research. In their eyes, research funding for its own sake. Those who favor substantial de- of military space programs constitutes an implicit velopment view exploration and scientific, R&D, subsidy of some U.S. civilian projects." and commercial uses of space all as valid reasons to move to the last "frontier." But more than that, One key motivation for the Government to car- they tend to see space development as a national ry out and finance space R&D is to support various Government activities. For example, much imperative that should be supported by as broad of the motivation PA- the Shuttle or for land a coalition as possible. To realize this Goal, they favor an eclectic policy approach: do whatever remote sensing research was to meet Govern- "works" best (as long as it happens in space) ment needs, both military and civilian, for space and be read/ to change when necessary. As they transportation and remotely sensed data. see it, the more actors on the space stage, and Although the different motivations for doing the more influential and permanent they are, the R&D are conceptually separate, most of them, better. Under such conditions, international competition among countries is seen as the stimulus ''see however, Civilian Space Policy and Applications, op. at , to achieve a greater presence in space. ch 5. The process of transfer of innovative ideas from the military context to civilian products is often fraught with delay and other In this approach, commercial space endeavors difficulties There is no one-to-one correspondence between military funding for rese.rch and technological benefits to the civilian are welcome. Its proponents would usually sup- population port the trade policy preferences of such firms

4o9 404 International Cooperation and Competition in Civilian Space Activities

with respect to organizing competition in space- means of promoting private sector competitive- related industries. They view serious conflict ness, and thus involvements. In addition, trans- within the "space community" over Government ferring costly Government-supported develop- policies as undesirable, and seek industry con- ment projects to commercial sponsorship would sensus, particularly among U.S. actors. In their be doubly welcome. In the first place, Govern- view, conflict even in international commercial ment funds would be freed up to address con- competition should ideally be kept at a lo v level, cerns that the private sector cannot be expected and each international competitor should have to meet. Second, and perhaps more important, a role. In other words, public squabbles among the private sector would thereby become more commercial competitors should not be allowed involved, thus making the structure of the space to undercut puF,-- confidence in the overall sector more closely resemble that of other, al- space effort. ready successful economic sectors. Unless it To stimulate the exploitation of space the Gov- undermined unity in the coalition of space inter- ernment, in addition to co, ducting its own R&D, est groups, those supporting the space-develop- could support space industries by means of loans, ment approach would be likely to favor some subsidized loans, or loan guarantees to compa- form of subsidized space transportation as a general way for the government to support space de- nies attempting to produce and market new products. One proposal suggests that Government velopment. loans be provided for high-risk projects from The major problem with this approach is that which private capital shies away." These loans the links of space policy to other areas of public would be paid back if the enterprise succeeded policy are tenuous; "more is better" is not a fully and forgiven if it failed. Such a policy might even adequate prescription for public policy. extend Government-subsidized or Government- guaranteed loans to foreign purchasers of U.S. Continue to Seek U.S. Preeminence in Space space products and services. The Government might also offer short-term trade protection on Although multiple motivations are involved here, as in the previous approach, seeking pre- the grounds that infant industries need to mature in the domestic market before they can compete eminence emphasizes the political and commer- successfully in international markets. cial benefits that proponents believe will flow both from a successful U.S. national civilian space Competition for leadership with other countries program and from growing U.S. commercial space in both commercial and noncommercial pro- activities. In defining this approach, one must first grams is viewed by those whose aim is to stimu- define preeminenceis it dominance across the late space development as a benign activity in board in space activities? or could "leadership" the service of all mankind. As a dramatic element, in most important activities satisfy the criterion? competition for leadership can increase support When the space programs of other nations (ex- for the space program in the public and boost cept for the Soviet Union) were small or non- morale in the participants. Cooperation on large existent, the United States was the preeminent projects is especially welcome because it could space power, however defined. Now, however, release significant amounts of resources for use with the emergence of large national space pro- on still other important activities. grams abroad, each of which seeks to make its own mark, what U.S. "preeminence" is to mean, Because exploration, space science, and R&D for actual policy determination, needs to be clear- directly stimulate the use of space, Government ly defined, in order to formulate and evaluate an R&D programs would usually be preferred over the subsidizing of space-related exports as a achievable approach. For the purposes of this discussion, "preeminence" will mean the achievable goal of leadership in most important civil- "See the Space Industrialization Act of 1979 (H R 2337), hear- ian space activities. ings before the Subcommittee on Space Science and Applications of the House Committee on Science and Technology, 96th Cong, Although competition in military space activi- 1st sess ,1979 ties has recently assumed greater importance, ci-

4.1.0 Ch. 10Policy Alternatives 405

vil'an space competition with the Soviet Union of space. They would want to assure this by, first, continues to be "-nportant. Preeminence over the reserving the large U.S. market for domestic Soviet civilian space program, in this approach, space producers by the usual means this is ac- is an important political goal and can be achieved complishedprice/quality dominance where pos- through a continuing large commitment of - sible, as in communication satellite production, sources. and subsidy and Government procurement re- strictior where it is not, as in remote sensing and Preeminence in noncommerc0 cor,pc:tion materials processing. They might also want to re- with the national space programs of non-Commu- strict access by other nations to the Shuttle. nist countries is also a coal. One major objective of this competition is to ensure that the United Second, in export markets, these proponents States will lead in commercially important space would urge open trade, in which cr)ace indus- technologies and therefore also in experimental tries are brought under the general coverage of technologies that are expected to lead to com- relevant international trading rules when U.S. mercial products. But the goal is broader than producers have price/quality dominance, but this. Proponents of this approach believe that the work for government-to-government market shar- United States should use its resources to retain ing agreements and/or export credit and other leadership in most space activities, commercial forms of subsidy when they do not. R&D subsi- or not. The use of Government agencies to pro- dies targeted to achieve a goal of enhancing the duce subsidized commercial services (e.g., NASA competitiveness of U.S. producers of space goods as the principal world provider of space transpor- and ser, ices would have a major role in this ap- tation services) is consistent with such a stance proach, both because of the sunrise-industry because a U.S. subsidy makes it more costly for characteristics of many space technologies and other countries to offer effective competition. because it allows an easy coalition with those If the entry of U.S. firms in an industry that had favoring substantial space development for its been dominated by Government led to phasing own sake. out subsidized production (e.g., in ELVs), foreign Like the space-development approach, this is governmental or commercial competition that an approach in which more is better," and the had been deterred by the subsidy might then links to broader political and economic policies emerge and threz fen U.S. preemino -e. For in- are not always explicitly ccnsidered. When Con- stance, proponents of this approach argue that gress favors financing a large and growing pro- full cost pricing of the Shuttle, which accounted gram, strategies built around substantial devel- for all the risks and operating costs that a private opment and preeminence fit together well. When firm would have to factor in, could enable Ariane- resources are scarce, however, the implicit con- space to capture an even larger share of the mar- flict between groups espousing the two positions ket than they now have and hereby damage U.S. leads to much more stressful bargaining. Neither preeminence. They therefore tend to oppose full group can then achieve allits important ob- cost pricing for the Shuttle, even if it largely pre- jectives. vents the U.S. private space transportation industry from developing. For instance, the influence of the space-devel- In general, proponents of U.S. preeminence in opment strategists may result in advanced tech- space are less concerned with the commercial nology that gains little significance in the actual viability of a project than some others; they are market. Conversely, politically attractive projects prepared to recommend subsidies to cover rev- to construct manned demonstration systems fa- enue shortfalls, and see commercial ventures as vored by those seeking preeminence may crowd vehicles to exp, ess U.S. leadership. out the more developmentally significant ones favored by the space-development point of view. In terms of trade policy, these considerations T:),.: crowding out of other NASA programs by tend toward a mercantilist position. Those who the Apollo program in the 1960s and the Shuttle favor the approach of preeminence tend to fa- program in the 1970s are examples of this latter vor clear U.S. dominance in the commercial uses conflict.

411 406 International Cooperation and Competition in Civilian Space Activities

Let Market Forces Predominate Government outlays intended to promote tech- Where Possible nological progress may include: funds to improve scientific ?ad engineering education, direct con- Letting market forces predominate is a well-de- duct of basic and applied research with poten- fined approach for potentially commercializable tial industrial applications, sponsorship of such activities, including their R&D phase. It can be research in universities or industries, transfer of combined with the noncommercial elements of research findings from Government programs other approaches to form rather diverse overall (e.g., military) to the private sector, joint Govern- strategies. The hallmark of this approach is the ment-industry research ventures, or special tax idea that, as a rule, Government should not in- treatment for private research. vest heavily in activities that the private sector is in a position to pursue. This stance is supported Consistent with this approach, then, is the idea by the belief that markets for products and serv- that as prospective R&D results come to look ices in the U.S. economy can usually be relied more commercializable, Government-supported on to signal which activities are socially useful. research can move from Government-performed According to this reasoning, if the private sector research (e.g., NASA research laboratories) to is not willing to fund a development project as Government-funded research (e.g., ACTS pro- conceived by NASA, the project probably should gram) to Government-subsidized research (e.g., not be carried out, at least in that form. Outside NASA's Joint Endeavor Agreements) to no signif- of R&D Government's role is envisaged as simply icant Government involvement at all. Thus, this to do its best to assure a fair, workably con.peti- approach is consistent with a large government five marketplace, domestically and internation- R&D role in the early stages of technol,-- 'cal de- ally, for those firms that wish to compete in sell- velopment that diminishes as markr .velop. ing space-related goods and services. One benefit of an approach that uepends on Consumers of space products and services, in market signals is that it sets space policy in the the rationale of this approach, would be expected context of overall economic policy. Attention to to pay prices that recover the full cost of provid- space technology becomes just one component ing them. With certain exceptions, such as me- of the U.S. approach to high-technology R&D. teorologicai data products, products and services As high-technology industries, space-related in- that private firms would not provide at the un- dustries would expect to benefit from a general subsidized prices are judged to be less valued by policy of fostering R&D. But under a policy of society than those that private markets do pro- broad support, they would not be singled out for duce. They have not passed the market test. Con- more favorable treatment than that received by trary judgments about social value, which would other high-technology industries. They would still allow government to overrule the dictates of the be expected to sink or swim in the marketplace. market, v.'ould have to show that, in the instance Large demonstration projects, in particular, are involved, the market was not reflecting the pref- less likely to be undertaken under this approach. erences of potential buyers, that there was some Its proponents do not regard failure to invest other market failure involved, or that government heavily in a particular Government development involvement would produce a clear-cut political prototype as evidence of the unwillingness of the benefit that was worth the outlay. private sector to invest in the technology per se. As discussed earlier in this section, Government They argue that scientists and Government offi- R&D activities have a clear rationale when pri- cials might incorrectly substitute their ideas of po- vate firms cannot expect to establish full prop- tential demand for those of entrepreneurs, finan- erty rights in the fruits of research. When this is cial analysts, arc! Insurance executives, thereby the case, private firms are likely to underinvest. distorting technological processes. The more basic the research, the riskier it is, or Previous chapters have also made the point, the larger the time until commercial payoff, the in the case of certain public goods like meteoro- less adequate the performance of private firms. logical remote sensing, that private markets

412 Ch. 10Policy kternatives 407 would be unlikely to produce the socially desir- of substantial space development tend to be im- able kinds and amounts of weather data. There- patient with letting market forces lead the way. fore, Government production or subsidy is justi- Their concept of commercialization tends to be fied as an exception. one in which Government takes the lead in developing prototypes. They are usually in natural An approach where market forces are allowed alliance with those favoring an approach of pre- to predominate requires clear signals from the eminence. Government to allow markets to work well for society. In a sector where Government involvement has been high, firms and investors that might be willing to invest on a commercial basis Keep Government Financial Outlay Low might hold off in the hope of receiving a subsidy. TI' low-outlay approach is the final competi- In part, their reluctance to start might also reflect tive approach. It is competitive in the sense that their fear that competitors would subsequently as total outlay on civilian space-related Govern- receive a subsidy or that the Government itself ment activity is reduced, certain aspects of the might undertake the project in competition with other options become infeasible. Sharply limiting them. The cost of waiting in these circumstances the available funds more or less defines a set of would generally be low. Because no firm would possible policy options. In particular, an effec- make a move until the Government acted, wait- tive policy to match the R&D, production or ex- ing would not disadvantage them. port-credit subsidies of other countries would be- Many proponents of an approach depending come impossible without substantial funding, as on market forces would undoubtedly prefer would subsidized Government production of open, fair international trade in space goods and space-related goods aud services for U.S. con- services, but others, despairing in obtaining it, sumption, such as Shuttle transportation. Con- might favor countervailing subsidies or restrictions sequently, a low - outlay approach tends toward on U.S. market access to match foreign restric- one that depends on market forces. tions. This approach can only lead to a partial Proponents of this approach would argue that strategy for achieving national goals. It does not most needed research would be funded by the pri- apply, for instance, to noncommercial compe- vate sector. If the market would not support the re- tition. search, it was probably not needed and therefore As long as make, buy, or contract decisions for should not be done. Only a limited amount of R&D Government use, including those designed to in- would be funded, and, in particular, few large, crease U.S. prestige, are made with prudent con- expensive projects would be undertaken by the tracting controls this approach has little inherent Government. The allocation among various types conflict with an approach of preeminence in of projectsthose that would develop space, space. In practice, however, the two approaches those that would bring political benefits, and are typically in conflict. Those who favor a mar- those that would bring industrial policy bene- ket strategy tend to want to leave the develop- fitswould depend on the alliances their propo- ment of most commercializable space systems, nents could make. One possible alliance might particularly their form, to the market, whereas be among the proponents of space development, those favoring an approach of preeminence market forces, and low-outlay. In this case, NASA would typically be loathe to entrust the fate of would tend to concentrate on more basic R&D valued projects to the uncertain decisions and and avoid building prototypes and use less ex- timing of private companies. pensive methods of technology transfer. One potential drawback of this approach is that it might In contrast, the approach of depending on mar- put U.S. industry directly in competition with gov- ket forces would seem to be compatible with one ernment-supported foreign industry. favoring substantial space development, as long as dependence on markets produces a vigorous Even though the low-outlay approach is incom- private sector. In practice, however, proponents patible with expensive "sunrise" industry indus-

38-797 0 - 85 - 14:121.3 413 408 International Cooperation and Competition in Civilian Space Activities

trial policy, it is not necessarily incompatible with trade in space-related goods and services. They the low-cost protectionist elements of this pol- could be used as bargaining chips in bilateral and icy. Several retaliatory weapons to punish unfair multilateral negotiations to create a more liberal trading practices by other space-capablecoun- international regime. tries exist that are not costly in budget terms: tariffs, quotas, boycotts, standards harrassment, In the low outlay approach, cooperating with and government procurement restrictions. These other countries in space applications (e.g., remote could effectively restrict foreign access to the U.S. sensing), space science, and exploration of outer market, although they would usually increase space assumes even greater importance than in prices for U.S. users. They might be utilized, in the other competitive approaches. A highly ac- retaliation for foreign subsidies in both U.S. and tive program of cooperation would be necessary third-country markets, under Section 301 of the to maintain a level of technological leadership Trade Act of 1974 or other existing trade id,,s. otherwise unavailable in this approach. Somewhat ironically, protectionist restrictions even have a role in securing free international

ELEMENTS OF COOPERATIVE POLICIES

International cooperation in civilian space action to this chapter and in chapter 3, increased tivities may serve a variety of goals: international competition and changes in the outlook of the developing countries have altered the 1. sharing the costs of expensive projects; international et-1,, ironment for cooperation. In 2. increasing exchange of scientific knowledge light of these changes, and the fact that the pri- and U.S. access to foreign technology; vate sector has demonstrated increased interest 3. promoting international understanding; in commercial space activities, a reassessment of 4. coordinating potentially conflicting interr.a- U.S. policies for space cooperation is in order. tional activities (e.g., the use of the ele:Aro- The key question in such a reassessment must magnetic spectrum for telecommunications); be, undE r what circumstances and in which tech- 5. providing services on a multinational basis nologies does cooperation serve the long-term (e.g., through INTELSAT or INMARSAT); political and economic interests of the United 6. regulating international trade in space-re- States? lated goods and services; 7. providing assistance to developing countries; This section identifies a range of cooperative 8. improving political relations; end, indirectly, approaches that the United States has taken in 9. promoting U.S. exports. the past, and discusses their use in today's climate. The options presented here are not mutu- At different points in the history of its space pro- ally exclusive: indeed, an effective overall pol- gram, the United States, rcting through NASA, icy woulu include aspects of each. Some potential the National Oceanic arl Atmospheric Admin- cooperative approaches would be inconsistent with istration (NOAA), the Department of State, Na- certain of the competitive approaches described tional Telecommunications and Information Ad- in the previous section. The opportunities for ministration (NT IA), Federal Communications cooperation also vary considerably across the Commission (FCC), and U S. Agency for Interna- range of technologies studied in this report. The tional Development (AID;, has pursuedsome or suitability of various approaches for cooperation all of these goals. Yet, as noted in the introduc- varies accordingly.

414 Ch 10 Policy Alternatives 409

Emphasize Cooperation That Contributes the industrialized countries are increasingly ca- to the Technological Goals of pable in space technology and are concerned the United States about transferring the fruits of their research to the United States. Given the enormous cost of space research and In the near future, the largest single area in exploration, and the recent space accomplish- which the United States will cooperate with the ments of other countries, the United States can- industrialized countries is in building and using not hope to remain a leader in every aspect of permanently inhabited space infrastructure, in- this technology, unless it actively seeks cooper- cluding a so-called space station. The United ative ventures. International cooperation is one States has already signed cooperative agreements means by which the United States can participate with Canada, ESA, and Japan for the design phase in numerous expansive projects. NASA's largest of NASA's space station program. As planning for cooperative project, Spacelab, cost the European the development and operation of the space sta- Space Agency (ESA) in excess of $1 billion and tion(s) proceeds, the various modes of coopera- is perhaps the best example, to date, of the mone- tion should be carefully studied. Possible coop- tary value of international cooperation. For budg- erative options are detailed in the OTA report, etary reasons, the alternative to an ESA Spacelab Civilian Space Stations and the U.S. Future in was not a less capable U.S. spacelab, but rather Space.16 no Spacelab at all. Additionally, Canadian e).- penditures (over $100 million) for the Shuttle's Emphasizing joirt technology development highly successful remote manipulator arm freed programs makes it difficult to define a meaningful the United States from this Shuttle expense. Not role for many developing countries. Yet including counting Spacelab, NASA has estimated that them in cooperative activities could give them other countries have contributed over $2 billion an opportunity to engage in the pursuit of space to U.S. objectives in space over the last 25 years technology and thereby ease current difficulties through cooperative programs.15 in the United Nations and make international consensus on issues such as frequency and spec- Joint technology development programs raise trum allocation easier to obtain. ? unique set of difficulties. A cooperative policy that stressed common technological goals would It is important to assess whether an internation- focus almost entirely on projects with nations al cooperative venture is truly in the long-term having reasonably advanced space programs. interest of the United States. Short-term budget- Such cooperative projects with developed coun- ary or political pressures should not be allowed tries, however, increase the likelihood of inad- to affect adversely the long-term viability of im- vertently transferring commercially useful tech- portant national programs. Yet, any policy on co- nology to them and increase the possibility that operation should be designed to allow access to foreign firms will be able to compete more ef- foreign technology and expertise where they fectively with U.S. firms in commercial space would materially benefit U.S. programs. In the markets. In addition, when dealing with new near future the major space powers will have to technologies it is often desirable to reduce the make critical decisions concerning the level of administrative complexity of research; coopera- international cooperation they wish to pursue. tive projects tend to increase the difficulty of tech- The United States may wish to limit cooperation nology development. For these reasons NASA has to the investigation of basic scientific phenomena traditionally avoided joint production arrange- or the development of discrete components (e.g., ments with other countries for essential hardware. the shuttle remote manipulator) so as not to con- As discussed elsewhere 'n this report, however, flict with the potential commercial activities of the U.S. private sector. To add to the subtlety of "U.S. Congress, Office of Technology Assessment, U.S. Govern- ment Printing Office, UNISPACE '82: A Context for Cooperation and Competition, OTA-TM-15C-26 (Washington, DC: March 1983), "See for example, Civilian Space Stations and the U S. Future app. El in Space, op. cit., app. C

415 410 International Cooperation and Competition in Civilian Space Activities

the decision process, it should be noted that U.S. international space activities among the Depart- corporations sometimes find flat international ment of State (foreign affairs and international joint ventures (e.g., AT&T and Olivetti) enhance organizationf.,the Department of Commerce their overall international competitive ability. (operational remote sensing [NOM], international satellite communications [NTIAJ, and trade-re- Emphasize Political Benefits lated activities); NASA (space R&D, science, and of Space Technology transportation); the FCC (regulation of U.S. international satellite communications); and the How can the United States reap the maximum National Security Council (national defense). advantage from c:irrent and future cooperative Considerable confusion now exists over who has activities? The posse:sion of highly visible, tech- jurisdiction in any given issue involvingmore than nologically advanceu industrial capacities, such one of these elements, as do most international as the ability to produce and use space technol- space activities. As a result, the task of using ogy, carry with them certain foreign policy ben- science and technology for diplomacy has often efits. The precise nature of these benefits, al- been considered of secondary importance. though difficult to define, is usually measured in terms of increases "prestige and influence." Co- Most of the day-to-day work of putting inter- operating with the United States on space proj- national space policy into practice has fallen to ects (or, for that matter, on any high-technology NASA and NOM. The FCC and the Department project) can create the perception that, bywon:- of State have overseen commercial satellite coming with the United States, nations are "on the munications. NASA's role as an R&D organiza- winning team," and can create an incentive for tion compels it to seek partners with which it can such nations to compromise with the United accomplish technological goals, and is, therefore, States on both space and nonspace issues if they less inclined to focus on the broad foreign poli- believe that such cooperation earns them the ad- cy implications of decisions. NOAA's interest in vantage of long-term access to advanced tech- maximizing the collection and distribution of crit- nology or other bilateral support. ical atmospheric and land remote sensing data has led it to seek broad operational agreements Using space technology for peacefulpurpo,,es with its counterparts in other countries. It there- to accomplish diplomatic pals is a complex task fore focuses on operational goals rather than on that is part of a larger diplomatic picture. Inter- diplomatic issues. The FCC and the Department national space policy in the United States has of State have jointly formulated U.S. positions in evolved slowly over the years, changing inre- bilateral and multilateral negotiations related to sponse to technological developments and the satellite communications. global political environment. For example, the Apollo-Soyuz Test Project, a U.S.-Sovietcooper- The State Department, as the foreign policy ative project, was a reflection of theera of organ of the Government, pursues relationships detente.' 7 The Carter Administration's emphasis that accomplish diplomatic tasks and is responsi- on the use of science and technology as tools for ble for overseeing U.S. treaty obligations (see ch. development led to increased assistance in space 3). Lacking NASA's, NOAA's, and the FCC's ex- technology to developing countries. pertise in space technology, it has traditionally deferred to their judgment on most international If the use of international cooperative efforts space activities. Although the Department of State in space to accomplish diplomatic ends is desira- consults regularly with NASA and NOAA on the ble, then it is appropriate to consider what Gov- one hand, and the FCC on the other, the success ernment organization is appropriate. The present of this coordination depends heavily on the per- arrangement divides the policy responsibility for sonalities of the individuals involved. "See Issues in U,S./U,S S R Cooperation in Space (Office of Tech. Using civilian space activities more aggressively nology Assessment, technical memorandum, in press) fora discussion of the Apollo-Soyuz cooperation and the political and techni- to pursue broad U.S. foreign policy interests, in- cal issues surrour ding cooperation with the Soviet Union. cluding the reduction of international tensions, 416 Ch. 10Policy Alternatives 411 would require the Department of State to in- The United States has tended toward follow- crease substantially its technical expertise arid the ing option 2 in recent years on the premise that continuityboth policy and humanof its re- other countries have politicized these internation- sponsibilities in space.'8 This would require, at al bodies. However, tying decisions on space is- a minimum, adding staff with substantial experi- sues to other policies carries with it the very risk ence in space technology. of politicizing these organizations that the United States seeks to avoid. In developing policies to- Participation in International ward international organizations dealing with Organizations space issues, it is also important to understand that each of these organizations have markedly As the analysis of chapter 3 indicates, in the different operational agendas and should 1::Q. face of a changing international environment in treated sep:rately. which the influence of the United states is shrink- Option 3 may not be advisable in those in- ing, the United States seems to have three broad stances where for technical reasons, cooperation options to consider in its participation in the in- is a virtual necessity. For example, current U.S. ternational organizations dealing with space such participation in ITU helps to guarantee interfer- as the International Telecommunication Union ence-free access to the radio spectrum for satel- (ITU), the Committee on the Peaceful Uses of lite communications. The assignment of a particu- Outer Space (COPUOS), and, more generally, the lar frequency is of little value if others feel free United Nations General Assembly: to use it for purposes that cause critical interfer- 1. Adopt a more flexible approach, emphasiz- ence. There are no sanctions to force compliance ing diplomacy and a willingness to compro- with ITU decisions. Consequently, the United mise in areas where critical U.S. interests are States, as well as other ITU members, rely on the not at issue. Attempt to build broadly based voluntary agreement and cooperation of other coalitions within the organizations. Establish nations to refrain from interferring with its as- immediately a permanent technical pres- signed use of the spectrum. ence at the U.S. Mission to the U.N. 2. Take an increasingly confrontational posture, using the threat of withdrawal in an attempt Provide Assistance to to prevent decisions contrary to U.S. interests. Emphasize build'ng coalitions of like- Developing Countries minded nations, or establishing alternative The United States could take the position that organizations. Where possible, tie decisions its competitive interests limit the number of de- on space issues to other U.S. policies on fi- sirable cooperative opportunities with the other nancial and technical assistance thereby ac- space-capable nations. Cooperative activities with quiring leverage in negotiations. the developing countries, on the other hand, 3. Drastically reduce or end U.S. participation might be pursued with renewed vigor in order in international organizations if they stray too to spread U.S. influence abroad. As a first prin- far from U.S.-supported policies, and estab- ciple, the United States has always recognized lish U.S.-led, permanent ad hoc multination- its responsibility to contribute to the welfare and al or bilateral arrangements where neces- development of the Third World. However, such sary. programs may also provide indirect economic, political, and strategic benefits to the United ' "The State Department has recently made some moves to States. Strengthening the scientific and technical strengthen its expertise in space and other technology fields, and to place greater importance on science and technology in diplo- capabilities of the developing world may promote macy. See John Walsh, "Shultz Signals Backing for Scienie the growth acid expansion of important markets, Attachi.s," Science, vol 226, 1984, pp 518-519; Also, Otho Eskin, provide new outlets for U.S. goods and services, hearings before the House Subcommittee on Space Science and Applications of the Committee on Science and Technology, July and orient the indigenous scientific and engineer- 25, 1984 ing community toward the United States.

41'i 412 International Cooperation and Cornpetitbn in Civilian Space Activities

The United States has considerable experience ideals as free speech and free enterprise. Such in providing technological assistance. Its mete- Third World demands have diminished the de- orological satellites have been used for global sire of some U.S. policymakers to support multi- weather coverage since the early 1960s, and the national technology transfer programs. Landsat Earth remote sensing system has been in operation since 1972 under a policy whereby the The United States has several methods avail- United States has sold imagery to any country for able for pursuing cooperativeprograms. The first, little more than the price of reproduction. NASA already used extensively, isan emphasis on bi- and AID have cooperated in giving developing lateral, as opposed to multilateral,assistance pro- counties valuable training in the use of Landsat grams. This allows projects more closely -elated data. In another example, NASA and AID used to individual country needs andassures some de- the ATS [advanced technology satellite] series of gree of accountability for both participants. An- experimental direct broadcasting satellites in the other method, introduced at the ITU Plenipoten- mid-1970s to carry out several important studies tiary Conference in Nairobi in 1982, is theuse in India, South America, and the Pacific, which of private U.S. firms to pursue development goals. demonstrated the usefulness of satellitecommu- The U.S. Telecommunications Training Institute nications to deliver programs to rural areas.* was established to promote the planning and operation of telecommunication and information The principal cooperative space activities with systems in developing countries. Because private the developing world are in remote sensing and U.S. firms provide the training, equipment, and telecommunications.** These could be coordi- funding for the Institute, its operation is unlikely nated with other assistanceprograms and be to be subverted solely for political or ideological made more responsive to the abilities andex- motivations. pressed needs of recipient nations. Suchpro- grams would likely include a large educational Establish International Organizations component, and would present only minimal technology transfer problems.It would be to Provide Space Services unlikely to interfere with other AID, NASA, and Once a technology has been developed and NOAA goals and programs. its value proven, the question then arises of how Although the United States has the technical best to apply the benefits of this technology. This and institutional means to carry outan expanded has generally led to debate over whether the pri- program of assistance using space technology, se- vate sector or the government is best suited to rious questions remain concerning the desirability manage the applications phase of the technolo- of such a course of action. The current official gy. Particularly important for this discussion i; the attitude of the United States (primarily within the role that international cooperation in the form Administration) toward many Third Worldcoun- of intergovernm,mta; consortiacan play in this tries is one of profound mistrust. In the view of process. many, Third World demands for access to tech- When INTELSAT was established, its advocates nology and space resources, and its support for considered the system to be the most effective larger political agendas, such as the New World way of quickly bringing the I meths of satellite Information Order or the New International Eco- communications to much of the world. Now, nomic Order, threaten such important American with the rise of potential private sector competitors, the cons as well as the pros of an internationally governed monopoly in satellitecommu- The countries that participated in these projects contributed to nications are being discussed (see ch. 6). A similar them as well analysis might be used in relation to remotesens- "The U S Government can provide certain technology to de- ing. Although land remote sensing isnow seen veloping countries, but it does not own or control all space-related as an area of international competition, it may technology these countries might wish to acquire Much of itis privately owned and would need to be licensed from privateowners turn out t..at the raw satellite data is less market- by individual countries able than communications services, at prices that

416 Ch. 10 Policy Alternatives 413

provide an adequate return on investment, and There may be instances (e.g., to save system will remain more of a public, than a private, costs) where the United States would benefit by good. If so, then it might be appropriate to at- actively pursuing the formation of interr,ational tempt to organize an international body to col- consortia. Presumably, such a course would be lect and distribute the data free or at low prices followed only in the absence of financial inter- (see ch. 7). Such an organization might pool in- est by the private sector in a new technology, or ternational resources to maintain a single system where the foreign policy benefits of such an orga- of satellites, which no single nation would invest nization clearly outweighed its negative effects in alone, but from which all participants would on the formation of a free market. benefit. Alternatively, the national members might agree to specialize in particular types of satellite facilities and data collection they would provide to all users at low prices. All would benefit from an international division of labor." of such a cooperative venture in ocean remote sensing among Can- "Indeed, sucn an organization was suggested as one of the poli- ada (Radarsat), ESA (ERS-1), Japan (M05 -1), and the United States cy options of Civilian Space Policy and Applications, op cit , ch (NROSS), in which NOAA would take the lead in gathering, proc- 10, pp 298-300 NOAA is now attempting to organize a variation essing, and distributing data sets globally.

THE RELATIONSHIP BETWEEN COOPERATION ANDCOMPETITION

Few elements of either governmental or private space, continue to seek U.S. preeminence in sector space activities am either purely cooper- space, let market forces dominate, and keep Gov- ative or purely competitive. Indeed, the motiva- ernment financial outlay lowwould be im- tions for cooperation or competition are driven proved by one or more of the cooperative ele- primarily by economic and political factors and ments explored in the section on cooperation. are often closely intertwined. As this report has For example, although the French will soon be emphasized throughout, cooperative projects are offering remotely sensed data from their SPOT often undertaken, in part, for competitive pur- system, in competition with data from the U.S. poses. For example, part of the U.S. political Landsat system, it is nevertheless in the best in- motivation in cooperating with developing coun- terests of both countries to cooperate on setting tries is to demonstrate 'he willingness of the data standards, format, and other aspects of the United States to share its knowhow with these two systems. In doing so, both countries may gain countries in competition with the Soviet Union. in political prestige and even in access to markets. On the other side of the coin, the enhanced abil- However, cooperation and competition do not ity of Europe and Japan to compete economically necessarily enhance one another. For example, with the United States in offering space goods and governmental cooperation with other countries, services makes them more attractive cooperative particularly technologically advanced ones, may partners for major projects such as an interna- make competition more difficult for U.S. firms. tional polar-orbiting remote sensing platform or As mentioned in several places in this report, co- a permanently inhabited space station. operation with Europe and Japan raises the spec- In developing policies for the U.S. space pro- tor of outward technology transfer that could gram it is important to recognize not only the strengthen their ability to offer space goods and roles played by cooperation and competition, but services in direct competition with the United also how each may enhance the effectiveness of States. This argues for structuring cooperative the other. The four approaches to international projects in such a way as to reduce the negative competition discussed in the section on compe- effects of unwanted technology transfer. How- titionstimulate the substantial exploitation of ever, as other countries reach parity with the

419 414 International Cooperation and Competition in Civilian Space Activities

United States in certain technologies, or even sur- the century, and faces greater competition from pass it, the United States will have something to other space-capable nations, it will be important gain from them. This is the case now in some nar- for policymakers to consider the interactions of row areas (e.g., in building manned space habi- cooperation and competition in each internation- tats). Therefore, in structuring cooperative agree- al project on which the United States embarks. ments, it will also be important for the United In order to compete effectively with other nations States to consider what technology it might gain in space science and space applications, it is nec- from other countries. essary to cooperate. On the other hand. in order As the United States structures its cooperative to cooperate most effectively, it is necess, try to be activities in space between now and the end of able to compete as well.

ORGANIZING FOR THE FUTURE

The NAS Act, in addition to establishing the ba- icy, domestic health, safety, and economic reg- sic guidelines for the Nation's space activities, au- ulation, and tax policy, all of which will have thorized the formation of NASA and assigned it essential roles in the development of vital U.S. the responsibility for the "aeronautical and space space industries. activities sponsored by the United States." As a result, except for satellite communications, dur- An important aspect of future national policy ing the past quarter century most civilian pro- for space will be the manner in which the respon- grams and policies dealing with space have sibility for various space activities is divided tended to focus primarily on NASA. Operating among the various Federal agencies. This respon- under a broad mandate to pursue excellence in sibility is essentially of two types, first, the broad space technology, NASA had a major hand in de- responsibility for the maintenance of U.S. "lead- veloping the technology for three industries ership" in space; this is inherently a shared satellite communications, remote sensing, and responsibility which requires the effective coordi- space transportation; it is currently working on nation of Government agencies and the private a fourthmaterials processing in space. Yet, de- sector and, second, the responsibility for the use spite NASA's successes, itis unlikely that the and successful commercial application of indi- agency can continue to be the primary focus of vidual space technologies. This latter responsi- civilian space activities as commercial interests bility can probably be most effectively carried out in space become stronger. NASA by itself is ill- when a designated agency has the responsibility equipped to deal with such complex issues as infor a specific technology. ternational commercial competition, trade pol-

MAINTENANCE OF U.S. LEADERSHIP

The NAS Act specifically calls for the United scope of space activities has increased, other States to preserveitsrole "as a leader in countries have developed expertise in space, and aeronautical and space science and technology costs have risen dramatically. It may now be more and in the application thereof. .." This has often appropriate for the United States to attempt to been interpreted to imply that the UnitedStates maintain its leadership in many, rather than all, should be preeminent in allspace activities, a areas of space technology, and to choose areas point of view appropriate to the early days of the on which it will focus its efforts. Whichever ones U.S. civilian space program. However,as the are chosen, successful coordination among Gov-

42u Ch. 10Policy Alternatives 415 ernment agencies in the following broad areas attention is being devoted to how the Govern- will be essential if the United States is to main- ment might encourage this development. tain its leadership position in space technology. In most nonspace industries, transfer of technology from the Government is a matter of tech- Scientific Research and nology diffusion, that is, encouraging the move- Technology Development ment of technology from the Government to the interested segment of the private sector. This was It is likely that NASA will continue to have the successfully done in the telecommunications in- primary responsibility for research in space science dustry with the transfer of communications sat- and the development of advanced space tech- ellite technology.20 Other potential space indus- nology. Although much of NASA's work in these tries face the problem that there may not be an areas will not have a direct bearing on other Fed- industry to which to transfer the technology. eral agencies, it should be alert to opportunities Thus, "commercializing" space technology pre- for using its results to assist other agencies in their sents a differer t, and more complex set of issues. own responsibilities. NASA did this with some de- NASA can help in some instances with "technol- gree of success in its Landsat program in the ogy diffusion" though it is not clear that NASA 1970s by being responsive and attentive to the is the appropriate agency to accomplish the needs of such Federal agencies as the Depart- "commercialization" of space technologies. Fur- ment of Commerce (NOAA), Department of Agri- ther, it is unlikely that NASA or any Government cu:ture, Department of Interior, AID, Department agency can oversee commercialization of a tech- of Defense, and the Central Intelligence Agency. nology in the absence of substantial private sec- It transferred funds to several agencie them tor interest and a relevant market. Nevertheless, to use in experimenting with applying _andsat individual Government agencies may be able to data to their missions. As a result of this close col- assist in this process by serving as a focal point laboration, some Federal agencies became ma- for diverse private sector interests, and, where jor users of the Landsat system, thereby taking appropriate, generating interest and support from the first step toward commercial market devel- Congress and the White House. This is discussed opment; NASA, for its part, gained immeasurable in greater detail below. multidisciplinary experience in building sensors and in applying remotely sensed data to impor- In view of the complexity of the issues involved tant public needs. and the relationship a developing space industry has to the wider industry of which it is a part, Commercial Application and it would be appropriate for NASA to seek advice Development of Space Industries from other departments on the need for advanced research in particular areas. For example, the There is general agreement in the United States Landsat Commercialization Act of 1984 calls for that the private sector has had a major part to continuing Government-sponsored research on play in developing and maintaining U.S. leader- sensor technology. The Department of Com- ship in space technology. Where possible, the merce (through NOAA) is the lead agency in private sector should therefore be encouraged to charge of commercializing the Landsat system. offer commercial space services and develop NASA has the research program on advanced space industries. At present, there is only one sensors. It will be important for NASA to consider mature space-related industrysatellite commu- carefully the near-term needs for advanced sen- nications. Yet, some activities now conducted pri- sor research for operational use as well as its long- marily by the Governmentremote sensing, space transportation, and materials processingare thought by many to hold promise for eventual 20For satelli e communications, the private sector played a ma- "commercialization." As a result, considerable jor part from the beginning

421 416 International Cooperation and Competition in Civilian Space Activities

term interests in developing a powerful research space or with responsibility for commercial space tool.21 activities.

International Commercial Competition International Cooperation At present, the dollar volume of international Effective use of international cooperation in trade in space-related goods and services is small space for peaceful purposes to achieve techni- compared to other sectors of international trade, cal and political objectives will require the close and the potential for growth in most of thespace coordination of many Government agencies and industries is still highly uncertain. Nonetheless, the private sector. The State Department is ina it is clear that foreign private and governmentac- position to have the clearest understanding of tors are offering space goods and services in com- what is in the diplomatic interests of thiscoun- petition with those offered by the U.S. private try. Yet, lacking NASA's technical expertise, it sector. The effectiveness of U.S. suppliers in in- may not be alert to many of the opportunities or ternational markets will then depend in large part economic costs of specific cooperative space ven- on their ability to compete on price and quality. tures. NASA, on the other hand, may understand As noted above, in the near term, NASA could well when it is in NASA's best interest tocoop- provide substantial assistance in thisarea. How erate on technical matters yet be unaware of the active NASA should be in commercially relevant wider diplomatic ramifications or political ben- R&D depends on both the U.S. stance on indus- efits and liabilities of such cooperation. For its trial policy that affects trade in space goods and part, the private sector might find fault with other- services and the general U.S. approach toward wise valuable cooperative ventures because they space development. The more active NASA is, may interfere with ongoing commercial activities. the more guidance it will need from Government agencies concerned with domestic and interna- If cooperation in space is to be used effectively tional economic policy. As the variousspace in- to obtain diplomatic objectives, then the State dustries mature, it is likely in any case that the Department will need to play a strong leadership private sector will be increasingly responsible for role. Still, it cannot take action and develop pol- most innovations having direct commercial ap- icies without the support of other interestedagen- plication. cies and the private sector. Some past attempts to coordinate these various activities have been In addition to the solving of technical problems, only marginally successful22 and thesuccesses the vigorous development of domestic space-related have tended to result from the personalities of industries will depend on successfully resolving the individuals involved rather thanan effective normal trade issues such as access to foreignmar- procedure. kets, the price of competing foreign goods and services, and the nature of any subsidies involved. It may be appropriate to conduct a major inter- The Government agencies primarily responsible departmental assessment of the appropriate use for trade matters, such as the Office of the United of cooperation in space. Such an assessment States Trade Representative, the International should investigate such broad topics as: the future Trade Commission, and the Department of Com- of U.S. participation in international organizations merce, will need to coordinate their activities dealing with space (e.g., COPUOS, ITU, and with those agencies having special expertise in INTELSAT), the use of space technology to obtain broad political objectives, and the overall ef- 21In August 1984, at about the time the Department of Commerce fect of cooperative activities on the privatesec- began to negotiate with EOSAT Corp to take over control of the tor. It should also examine specific questions such Landsat system, NASA decided, because of budgetary constraints, as the role of cooperation in developing and con- to terminate its contract with Santa Barbara Research Corp to build a multi-linear array sensor Critics of this decision are concerned that such research is needed to maintain U.S leadership in remote sensing technology, and to help ensure the viability of the com- 22See UNISPACE '82 A Context for Cooperation and Competi- mercialization process (see ch7) tion, op cit 422 Ch. 10Policy Alternatives 417 structing permanent space infrastructure," or re- Satellite communications is a mature technol- mote sensing,24 or materials processing," as well ogy; it was incorporated into the overall com- as the role of space technology in development munications industry almost from the start. assistance programs. The relationship of satellite communications to the private sector has been close from the If successful, such an interdepartmental assess- beginning. In the pre-commercial period, ment might result in a 5- or 10-year program of Bell Laboratories and other telecommunica- action, a more formal division of responsibilities, ti;ns entities carried out significant R&D on and a clearer understanding of the long-term communicationsatellitesthatpredated problems likely to be faced individually and col- NASA's activities, and the technology trans- lectively by various Government organizations. fer that took place has been a two-way phenomenon, fruitful to the R&D programs of Responsibility for Individual both NASA and the private sector. Because Technologies a large market for intercontinental telecommunications services was already a certainty The commercial success of specific space tech- and because a well-developed regulatory nologies will depend to some degree on how the structure already existed for the industry, a Government organizes to support, and, where clear natural division of responsibilities ex- necessary, to regulate these activities. Although isted among the FCC, NASA, and the Depart- coordination of Government agencies remains an ment of State. Only recently have problems important task, the success of specific space income to be perceived. dustries may depend, at least initially, on the ac- The Satellite Communications Act of 1962 tive participation of a lead agency. The role (building on the Communications Act of played by the Civil Aeronautics Board (CAB) and 1934) ratified the natural division of labor the continued role of the Federal Aviation Admin- among these agencies: the FCC would registration (FAA) in commercial aviation, the activ- ulate communications carriers, interstate and ities of the FCC in telecommunications, are all ex- internationally; the Department of State amples of Federal agencies assisting in the devel- would lead or instruct U.S. representation opment of new industries. in international institutions concerned with Much has been written about the potential neg- satellite communications (e.g., COPUOS, ative effects of regulation on industry. However, ITU, and INTELSAT); and NASA would do the potential danger to the public posed by some satellitecommunications R&D. NASA space technologies, and their ability to affect in- phased out most of this latter activity in the ternational relations suggest that some form of early 1970s, based on the expectation that Government intervention will be necessary." the satellite equipment industry would do its own R&D (see ch. 6). Decisions regarding which agencies should be Recently, as technological change and de- responsible for which space technologies should regulation allowed a vigorous domestic in- be a function of the maturity of the technology dustry to develop and look for access to in- and the industry and their relationship to like ter- ternational service markets and as foreign restrial activities. Because these conditions dif- satellite equipment manufacturers started to fer with each technology discussed in this report make inroads into U.S. and world markets, it is useful to examine them separately. the neat division of labor has become less adequate. In the early 1980s, new Govern- "See, for example, the discussion in Civilian Space Stations and ment actors came to play a larger part in the U 5 Futiire in Space, op. cit , app C "See Civilian Space Policy and Applications, op cit., ch 10 international telecommunications policy: "See R Dalbe!lo and 5 Finer, "Prospects for International Coop- NTIA in the Department of Commerce, the eration in Materials Processing Technologies," 33rd International Office of Telecommunications Policy in the Astronautical Congress, Paris, September 1982 "The 1967 Space Treaty makes states responsible for their own Department of State, the U.S. Trade Repre- actions or the actions of their citizens sentative's Office, not to mention the Nation-

423 418 tntemational Cooperation and Competition in Civilian Space Activities

al Security Council, the Department of De- tinue research into the application of remote fense, tne Council of Economic Advisors, the sensing data. Department of Justice, and the Federal Courts. Advocates of this legislation argued that des- NASA has also increased its involvement in ignating the Department of Commerce as the communication satellite research forreasons lead agency improved the probability thata relating to international trade and the inter- remote sensing industry could develop. By pro- national resource of the geostationary orbit. viding a single point contact within the Gov- With all the executive branch agencies in- ernment, interested parties know where to volved, a Senior Interagency Group and the make their application for systems develop- White House came to play coordinating ment, and where to express their ideas and roles. Even so, Congress has complained of grievances. The goal, as is also demonstrated executive branch disarray. in space transportation, is to establish a focal The size and maturity of the telecommu- point for the still diffuse private sector interest nications industry both in the United States in commercial space activities. The experience and foreign countries, and the increasing in- that the Department of Commerce has gained terdependence of the world economy, make (through NOAA) makes it the logicalagency it almost certain that the tasks for which the to oversee the private development of a remote U.S. Government must organize will contin- sensing industry.27 ue to be complex and, even more than in Space transportation is, in some respects, other large mature economic sectors, will both a mature technology and industry. Ma- defy easy organizational solutions. ture space transportation systems (ELVs) and Remote sensing is a mature technology di- a mature market (communication satellites rected toward a yet infant industry. After to geostationary orbit) both exist; the issue operational authority for Landsatwas :rans- now is how to encourage private sector en- ferred from NASA to NOAA, NASA's involve- try while NASA fulfills other important Gov- ment in this technology was sharply reduced. ernment needs. Two competing positions NASA now primarily conducts limited ad- are maintained; one encourages NASA to vanced R&D in high-resolutionsensors (see compete for commercial launch services and ch. 7). The Government's primaryconcern the other instructs the Department of Trans- now is to encourage the development of an portation (DOT) to promote the develop- economically viable private industry. Unlike ment of a private industry (see ch. 5). As a satellite communications, the market forre- result of this policy competition and itsown mote sensing services is small and the pri- long-term needs for space transportation vate sector has been reluctant to invest in services, NASA remains effectively the only this technology without some form of Gov- actor in space transportation services. ernment assistance. An Office of Commercial Space Transpor- The Land Remote Sensing Commercializa- tation has been formed within the Depart- tion Act of 1984 (Public Law 98-365) desig- ment of Transportation.28 The Expendable nates the Departs- it of Commerce as the Launch Vehicle Commercialization Actes- lead agency for future remote sensing activi- tablished DOT as the leadagency for com- ties. Among other things, this Act instructs mercial space transportation. This legislation Commerce to encourage private sector partici- is designed to promote and accomplish goals pation, establish a licensing system for prospec- similar to Public Law 98-365 discussed above tive entrants, ensure compliance with domestic for remote sensing. DOT would license pri- and international law (with guidance from the vate operators, draft regulation for launch Department of State), establish appropriatereg- activities and, after consultation with other ulation, and protect national security interests

(with guidance from DOD). The legislation also 17Still to be worked out is the thorny problem of whois to regu- directs NASA and NOAA to continue R&Dac- late use of the Shuttle for private sector or foreign remote sensing tivities in remote sensing andencourages the systems See, for example, "SFARX Fly Over U S -German Space Venture," Science, vol. 227, pp 617-619, 1985 Secretaries of Interior and Agriculture tocon- "Public Law 98-575 was signed into law Oct. 30, 1984

4 2 4 Ch. 10Policy Alternatives 419

relevant agencies (e.g., NASA, DOC, and the materials processing industry nor does one Department of State), determine whether seem necessary. such activities are in the public interest, are Should commercially viable MPS products safe, and are in the national security and for- be discovered, MPS would probably follow eign policy interests of the United States. the commercialization pattern of satellite DOT, in consultation with the Department communications rather than remote sensing of State, is also responsible for determining and space transportation, because MPS whether private launch companies conform products currently under investigation, uch to U.S. treaty obligations. as pharmaceuticals and crystals for electronic Materials processing in space (MPS) is a set applications, arelike satellite communica- of embryonic technologies directed towards tions servicesdirected toward large and known markets. NASA remains the most sig- growing commercial markets. nificant actor in the development of these In most instances it will be obvious which technologies and in the attempt to encour- Government agencies should take the lead age private sector participation in their cre- on regulating MPS products. For example, ation. Without NASA support it is unlikely regulation of phai!,1ceuticals made in space that MPS research would go fory and in this would be the responsbility of the Food and country. No lead agency has been desig- Drug Administration (FDA). rated to encourage the development of a

CONCLUSION

There is no single set of space policies capa- tional Space Commission may offer a means by ble of adequateIy responding to the challenges which to accomplish this objective. the Nation will face as a result of its scientific end Because goals must alter as milestones are commercial activities in space. This chapter sug- reached or circumstances change, it may also be --sts that the United States should, at a minimum, appropriate to adopt "strategies" for approaching evelop the institutional means to achieve con- competitive and cooperative goals in space. Cor- sensus on future space goals and to revise these rectly articulated, such strategies could provide goals when circumstances so dictate. In order to continui.y and an important middle ground be- survive over time, such goals must be, to the tween the basic principles of the NAS Act and greatest extent possible, independent of short- future space goals. term budgetary and political inflJences.29 The Na-

29See Civilian Space Stations and the U S Future in Space, op cit

425

Appendix A SEARCH AND RESCUE SATELLITES

A newly operational satellite-borne search and res- United States alone.' The signal from this common cue system now markedly increases the chances of beacon is only usable when the satellite is in the line being rescued when lost at sea or in remote land areas. of sight of both the beacon and the ground station. Until recently an experiment' in space technology de- An experimental system on the satellites (operating at velopment and international cooperation, COSPAS/ 406 MHz) uses a more sophisticated emergency bea- SARSAT has been responsible for saving nearly 400 con that carries a code identifying the type of aircraft human lives and 10 dogs, since the first rescue took or ship, the nature of the distress, the elapsed time place in September 1982. The participants in the ex- since the accident, the registry number, and beacon periment were the National Oceanic and Atmospheric identification. In addition to direct relays, the more Administration (NOAA) and the National Aeronautics sophisticated one can be subjected to signal-proc- and Space Administration (NASA) for the United essing on board the satellite, stored, and re-transmitted States, the Department of Communications of Can- to a ground station later on. The higher frequency sig- ada, the National Center for Space Studies (CNES) of nal will also permit higher accuracy location (1 to 3 France, and the Soviet Ministry of Merchant Marine miles) of the emergency transmitter. The first rescue (MORFLOT). In the operational phase, NOAA has the using the 406 MHz transmitter took place early in lead for the United States. 1985. The United States, Canada, and France have spent Norway and the United Kingdom participate in the about $53 million on satellite equipment and ground program by providing a ground station. Bulgaria, Den- stations to operate the Search and Rescue Satellite mark (MOU in process), and Finland participate as ex- (SARSAT) system. Canada and France supply the perimenters, with no indigeneous ground stations. SARSAT receiver. The United States supplies the Other countries, including Argentina, Australia, Bra- spacecraft on which it flies and the testing and integra- zil Chile, the People's Republic of China, Saudia Ara- tion A Soviet system, COSPAS, is designed to inter- bia, Singapore, Taiwan, Thailand, and Venezuela have operate with SARSAT. The first two satellites to be expressed interest in the program. equipped with receivers for emergency search were The four original nationsthe United States, Cana- low-altitude Soviet navigation satellites. eginning da, France, and the Soviet Unionare discussing with NOAA-8, the advanced TIROS-N series of NOAA means by which the system could gain still broader polar orbiting meteorological -atellites now also carry international acceptance after 1990, when its transi- search and rescue receivers.' tional operational period ends. The possible means Receivers on board the satellites detect the emer- include: operating the system through an existing in- gency radio beacons (operating ot 121.5 MHz) from ternational organization; creating a new organization downed aircraft or ships and boats in distress. The bea- specifically to operate the system; or continuing the con s signalis re-transmitted to i ground station, prt.sent four-party arrangement. At the present time, which analyzes the signal to determine the location the countries favor expanding to a total of 10 to 15 of the beacon. The small frequency shift caused by parties in a new organization after the current MOUs the relative velocity of the orbitin3 satellite and the expire in 1990. emergency radio transmitter on F.arth (the so-called The chief near-term problem faced by the COSPAS/ Doppler effect), enables system operators to deter- SARSAT project has been posed by Administration mine (within 12 to 15 miles accuracy) the position of policy on the polar-orbiting system on which the the emergency radio transmitter. Search and rescue SARSAT transponder flies. The frequent global cov- teams can then be dispatched to the area from which erage planned for the system was predicated on keep- the distress signal was sent. ing the necessary equipment aboard four satellites at The type of beacon used so far for rescues is car- a time- -two Soviet and two U.S. The two Soviet sat- ried by over 200,000 aircraft and 7,000 vessels in the ellites are in orbit. The Office of Management and

'Development of COSPAS/SARSAT was begun in 1977 In Octohe' 1984 Budget (OMB) has repeatedly attempted to limit the United States, Canada, France, and the Soviet Union signed an agree- NOAA to operating one polar-orbiting meteorologi- ment to begin the operational phase of COSPAS/SARSAT in 1985 and to ex- cal satellite at a time, although Congress has each year tend the program through 1990 See "SARSAT/cOSPAS to Operate Through 1990," Aviation Week and Space Technology, Oct 15, 1985, pp 24.25 restored the necessary funds in its yearly authoriza- ,Although NOAA8 has experienced serious operational difficulties over the past year it is now operational again and the 5AR pa,. kage is now work 'A major problem with the system so far has been a vast number of false ing satisfactorily alarmsabout 97 percent of the signs': received

423 424 International Cooperation and Competition in Civilian Space Activities tion and appropriations procedures. However, insign- for the most effective operation of the COSPAS/ ing the agreement with the other principal countries SARSAT system. In 1970 Congress passeda law rein Leningrad in October 1984, the United States has quiring that general aviation aircraft carry an Emer- now committed itself to maintain two SARSAT re- gency Locator Transmitter; in 1972 the National Trans- ceivers in orbit. AS OMB has made clear, this does portation Safety Board recommended that the Coast not necessarily commit the United States to maintain- Guard and the Federal Communications Commission ing both polar-orbiting meteorological satellite.It (FCC) require ocean-going vessels to carry an Emer- could fly the instrument on another polar-orbiting sat- gency Position-Indicating Radio Beacon. These are the ellite, for example, on one of the Air Force Defense beacons now usable by COSPAS/SARSAT satellites Meteorological Satellite Program spacecraftanop- when they are in the line of sight both of the craft in tion earlier rejected because of a desire to keep the distress and the ground station. There is so far no plan international segments of the project entirely civilian either for U.S. regulations or for international stand- in character. It could also be flown on a small dedi- ards to require the new, more sophisticated beacon. cated satellite at a cost of approximately $30 million Efforts are underway to make use of the new bea- for the first copy and about $15 million for subsequent cons on a voluntary basis. It would be difficult to man- models.4 date carriage of 40b MHz for general aviation and Another technical-economic problemis to bring small boats. It is likely to become mandatory for large about conversion from the present emergency bea- ships (1,600 gross tons and above) operating under con equipment on aircraft and ships to the more so- International Maritime Organization (IMO) conven- phisticated (and perhaps costlier) equipment needed tion. The Radio Subcommittee of IMO voted 17-4 in favor of 406 MHz for the frequency to be used in the 'Sour. e Preliminary study by Applied Physic s Laboratory Johns Hopkins float-free emergency procedures requircd by IMO in University ior NASA the Future Global Maritime Distress and Safety System.

42 Appendix B ALTERNATIVE FORMS OF INDUSTRY ORGANIZATION IN THE UNITED STATES

Although the general rule is that competition (de- When the natural monopoly was reestablished (per- spite its imperfections) is the preferred form of indus- haps by the new entrant), society would be in the try organization in the United States, there are two original position of suffering the effects of monopoly. principal exceptions to this rule where competition For these reasons, the public utility industries have cannot be expected to produce a socially desirable usually been organized in the United States as regu- outcome, industries with decreasing costs and indus- lated monopolies within certain geographical bound- tries or governments producing certain public goods. aries. Pi:ces set by a public regulatory body, are typi- The organization of these industries competitively cally set under a rationale that attempts to provide would result in the misallocation of society's re- investors no more than a fair return on assets and thus sources. Economic regulation of decreasing cost in- avoid monopoly profits. dustries (those where important cost savings could be Because prices cannot be maintained at regulated obtained by concentrating production in a single plant levels without controlling production to a greater or and where, up to a point, bigger plants would pro- lesser degree, regulatory bodies usually also erect a vide still greater cost savings as demand grows) is justi- rather intricate control mechanism over physical oper- fied as a substitute for competition on the grounds that ations. monopoly would otherwise naturally emerge and pro- Regulation often leads to two kinds of inefficiency. duce an antisocial result. This is the first major excep- First, politically motivated cross-subsidization between tion to the general rule that competition is preferred. classes of consumers ieads to wasteful consumption Government provision of "public goods," technically for those benefited, or to overcautious conservation, defined, the second major exception, is justified on for those penalized. Second, the whole regulatory the grounds that the unsubsidized private market structure may create incentives for managers to please would not produce them at all or would produce them the regulators rather than the market. Rather large in- below the socially desirable level. efficiencies can develop in these circumstances. These inefficiencies are likely to be greatest when Regulated Industries the regulated monopolist need not fear contestation or competition at the fringes of the industry, because Regulated public utilities producing water, electri- of regulatory controls on entry in these fringe areas. city, rail transportation, and local telephone service, In the communications industry, for example, com- for example, are industries where the average cost of munications equipment manufacturers were for many production decreases so rapidly with the size of the years not allowed to sell telephones to consumers in firm that when such an indus;ry has shaken out, ac- competition with the manufacturing arm of the regu- cording to a widely accepted theory, there will be only lated monopoly. This undoubtedly retarded product one firm left. The largest producer would be able to development and technology absorption. outcompete all others and drive them out of business. In the United States in recent years, deregulation Its size would be that of the whole market, and its cost has been embarked upon in a number of instances of production would be less than any potential smaller when opinion has shifted to the belief that competi- entrant. Hence new entrants would be deterred, and tive or contestable markets can regulate the formerly tne firm would be a "natural monopoly." A natural regulated industries, as in the current deregulation of monopoly has the same twin evils that all unregulated long-distance communications. During the process of monopolies are said to be notorious for: excessive deregulation, cross-subsidization and inefficient pro- prices and inadequate output. duction structures may become serious barriers to its To be sure, natural monopolies are contestible mar- completion. This is because the beneficiaries of the kets in the straightforward sense that a competitor cross-subsidization, and many of the affected manage- could challenge the incumbent for the whole market, ment groups, stand to lose from it and resist the but the process of contestation might be highly dis- changes politically. ruptive while it occurs, and lengthy periods of costly Business entities, which would benefit from deregu- production at less than optimal scale might occur. lation, may also muddy the waters during the period

425 429 426 International GJoperation and Competition in Civilian Space Activities

of partial deregulation by attempting tosecure cross these reasons, therefore, weather forecasts are pro- subsidization that had not existed before,now in the vided to the public without charge. name of deregulation. In these examples, and in the case of public goods Regulation, as an alternative to competition, therein general, reliance on the private market would re- fore is a difficult form of organization, bothin imple- sult in production not taking place at all, or if it does menting it and ending it. take place, taking place at an inadequate level when compared to what society would be willing topay for. Governmental Provision of Public goods can be produced at socially efficient Public Goods levels by either the government or the private sector, but since financing of production is not possible from A second type of noncompetitive industryorganiza- sales revenue, production would have to be subsi- tion is used in the United States in the case of "pub- dized if it were to be produced by the private sector lic goods" because competitive markets would result at the socially efficient level. in the absence of production or in production at inadequate levels "Public good" is the technicalterm Mixed Public/Private Goods in economic theory for a good or service for which it is impossible or undesirable for reasons of efficiency Some goods and services can be part public good to charge consumers in the normal way.' Examples and part private good. This is the case whena good of public goods are streets, national defense, police can be sold in the usual way by making those who services, weather forecasts, and various information- "consume" it pay for it. These private purchases, po- al activities of government. tential or actual, constitute the private good part. It may be impossible to charge for a goodor serv- There may also be spillover benefits to the general ice, for instance, as in the case of national defense, public from the good's consumption that cannot be because a person does not have to purchase it inor- charged for. These benefits constitute the public good der to consume it. There is no way to deny people part. access to the service on the condition that they pay An example of this is public education. It would be for it. Therefore there are no market signals to tellso- possible to charge parents for educating their children ciety how much to produce. and the collection costs would not be disproportion- In a second case, it may be undesirable to charge ately large. The decrease in benefits to the general for a good or service because, although it is possible public that would occur, nowever, is widely consid- to deny the consumer access if he or she does riotpay, ered to be so large that it justifies the free provision the costs of collection borne by the consumer, thepro- of primary and secondary education. Elementary and ducer, or society at large may be disproportionately secondary education is, therefore, provided straight- large compared to the extra cost of providing theserv- forwardly as a public good. ice to the consumer At the university level, however, user chargesare An example of a service of this typeis the daily geerally imposed in public universitiesso as to fi- weather forecast While this could be organizedon 'lance at least partially the private benefits of students. a pay-TV basis, the costs of doing so are considered Students are not allowed to attend without paying to be disproportionately large. First of all, the cost to fees, but the remainder of the State universities' budg- the weather service of one more viewerseeing the ets, over and above student fees, is paid for from gov- forecast is zero. Given this fact, the collection costs ernment tax revenues on the justification that en- that would be borne by the consumerin terms of price hanced culture and economic growth are public and inconvenience and by the pay-TV operatorare goods. It would not be possible to charge each mem- obviously disproportionate to the zero cost ofservic- ber of the general public for enhanced culture and ing the additional consumer. economic growth and deny them access to them if There would also be an extra cost to society at large they did not pay. Public higher education is, thus,a as well, according to prevailing belief. If the general mixed public/private good. public were not informed about weather dangers,according to this view, society as a whole would suffer Marginal Cost Pricing avoidable costs from weather disasters. For both of We can be more precise in discussing economic efficiency. Economic efficiency is defined in the textbook 'Put) goods are also referred to by %arfou, author~ a,social goods case as production at the level where the consumer or «Me( r goods of the last unit is willing to pay the cost of producing App. 8Alternative Forms of Industry Organization in the United States 427 it ("the marginal cost") but no more. We recognize good distributed free to the publicthe public good it as the efficient production level when at that price of increased economic efficiency. and at that level there are no excess inventories and While the subsidization of private, decreasing cost no unsatisfied potential consumers who would be will- industries has in some instances been done, it is ordi- ing to buy. narily not politically feasible to do it and, when ques- Larger or smaller production could not be sold at tions of the distribution of income and wealth are con- a price equal to marginal cost. Some othe- price would sidered, may indeed not be socially desirable. Other have to be charged to sell all the goods produced. This mechanisms, to be discussed below, are used instead other price would either result in an economic loss to ameliorate the efficiency loss that comes from to the producing entity or to consumers, including charging users a price based on average cost rather those who would be needlessly priced out of the mar- than on marginal cost. ket. In either case, there would be social loss. Al- though this exposition of the economic theory of production is very brief, it can be encapsuled in the the The Functional Similarity of Mixed general rule that, for a given distribution of wealth, Public /Private Goods and Goods of price should equal marginal cost for social efficiency Decreasing Cost Industries in production. In ordinary real-world private markets, workable In both public-good and decreasing-cost industries, competition is thought to produce prices that do not the cost of servicing an additiona! consumer is well depart too far from marginal cost in the long run. This below the average cost of servicing all consumers. In occurs because workably competitive industries, un- the case of the pure public good, the cost of servic- der antitrust regulation, are neither natural monopo- ing an additional consumer is zero; in the case of lies nor monopolies or combines based on conspiracy. mixed public/private goods, the marginal cost may be At prices based on marginal cost, such industries are significantly below average cost. The same situation self-financing as well in the sense that revenues ex- occurs in the case of decreasing-cost industries. ceed costs (except during periods of industry stress Hence, the problem of determining industry organiza- such as recessions). tion and pricing strategy is functionally the same in Decreasing-cost industries, on the other hand, are both cases. not self-financing with marginal-cost pricing. In certain declining-cost industries, in fact, marginal cost is Industry-Organization/Pricing Strategies far enough below average cost, even in the long run, that a second strong efficiency argument (in addition The problem of public-good/decreasing-cost indus- to the natural-monopoly argument) can be made tries has been handled in American industrial organi- against unsubsidized private provision of the good or zation in three ways: First, when the misallocation of service. If the price charged to all consumers is set social resources is thought to be small, the solution equal to the average cost, the pricing rule for break- is to ignore the problem, since the cures, government even operation when only a single price is charged, regulation and subsidy, are themselves difficult social the last consumer would have to pay more than the processes with which to achieve economic efficiency. cost of servicing him or her. In this case a number of Private competitive organization continues tc be the potential consumers, who should have been serviced norm in these cases. On the other hand, when the if the industry were operating efficiently, will have divergence between long-run marginal cost and long- been priced out of the market. Production would then run average cost is so large that it cannot be ignored, be higher cost than desirable from efficiency consid- two principal alternative methods have traditionally erations because the plant would be too small. Thus, been used in the United States. resources would be wasted. The first is to subsidize production, which then may If the industry were to be self-financing, however, be carried out either by a governmental or private en- the price would have to be at least equal to the aver- tity. Subsidization, of course, has political limits hav- age cost, even though the extra cost of servicing a cus- ing to do with the distribution of benefits uneve lly tomer might be well below the average cost. Decreas- across social groups. It may be thought of as u3fair ing cost industries, therefore, need to be subsidized, and, hence, politically unsupportable. Nevertheless, if production is to be at the economically efficient the production of a large fraction of the gross national level, where the good is priced equal to the cost of product is, in fact, subsidized by governmentfrom producing the last unit (the marginal cost). This sub- space research and development to interstate high- sidy can be justified as a means of providing a public ways to public education. Depending on the item in-

431 428 International Cooperation and Competition in Civilian Space Activities

volved, the unfairness of uneven distribution of ben- the consumption out of the market that would have efits in these cases is apparently considered minor, been attracted by marginal cost pricirg but still re- unavoidable, worth it, or compensated for by the pro- cover tota! costs from consumers. gressive tax system. Such devices as two-part tariffs, where there is a cer- The second method used to ameliorate the prob- tain monthly charge but where price per unit con- lem is to mandate certain kinds of non market pricing sumed is low, and price discrimination, where differ- by regulation. These special pricing schemes are used ent classes of customers are charged different rates, where subsidization is ruled cut and total costs must are among the devices use to keep production and be recovered from consumers but where the regula- consumption closer to optimal under full cost recov- tory agency desires to minimize the efficiency draw- ery than it would be under unitary pricing. backs of average-cost pricing. As a condition of survival, private firms do recover Space Markets Can Be Analyzed total costs over the long run. The norm in the general private economy is also *hat consumers are charged With These Concepts a single price (for the same good or service in the same Markets for space-related goods and services can quantity) or something close to it depending on the be analyzed according to these concepts. Arno' g the degree of monopoly power exercised by firms in the equipment and services treated in this studyh) space market. Charging a single price to all consumers may transportation, materials processing, satellite comr.,J- be inefficient for decreasing cost industries, however, nications, and remote sensingcan be found exam- when total cost recovery is specified. To try and ame- ples of normal goods, public goods, and decreasing- liorate this inefficiency, pricing schemes that involve cost, industry goods. As "commercialization" alter- different prices for different customers or different natives are considered, this mode of analysis may be prices for the first and last units consumed by a given useful in formulating public policy toward industrial consumer, have commonly been prescribed for reg- organization in each case. ulated utilities The idea is to avoid pricing some of

432 Appendix C PUBLIC LAW 98-365JULY 17, 1984

PUBLIC LAW 98-365JULY 17, 1984 98 STAT. 451

Public Law 98-365 98th Congress An Act

To establish a system to promote the use of land remote-sensing satellite data, and for July 17, 1984 other purposes. [H R 5155] Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act mayLand Remote- Sensing be cited as the "Land Remote-Sensing Commercialization Act ofCommercializa- 1984". tion Act of 1984. Communications and tele- TITLE IDECLARATION OF FINDINGS, PURPOSES, AND communications. POLICIES 15 USC 4201 note. FINDINGS Sec. 101. The Congress finds and declares that Congress (1) the continuous civilian collection and utilization of land 15 USC 4201 remote-sensing data from space are of r benefit in managing the Earth's natural resources and inplanningand conducting many other activities of economic importance; (2) the Federal Government's experimental Landsat system Landsat system has established the United States as the world leader in land remote-sensing technology; (3) the national interest of the United States lies in maintaining international leadership in civil remote sensing and in broadly promoting the beneficial use of remotesensing data; (4) land remote sensing by the Government or private partiesDefense and of the United States affects international commitments andnational policies and national security concerns of the United States;security (5) the broadest and most beneficial use of land remote- sensing data will result from maintaining a policy of nondiscriminatory access to data; (6) competitive, market-driven private sector involvement in land remote sensing is in the national interest of the United States; (7) use of land remote-sensing data has been inhibited by slow market development and by the lack of assurance of data continuity; (8) the private sector, and in particular the "value-added" industry, is best suited to develop land remote-sensing data markets; (9) there is doubt that the private sector alone can currently develop a total land remote-sensing system because of the high risk and large capital expenditure involved; (10) cooperation between the Federa; flovernment and private industry can help assure both data continuity and United States leadership; (11) the time is now appropriate to initiate such cooperation with phased transition to a fully commercial system; (12) such cooperation should be structured to involve the minimum practicable amount of support and regulation by the

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Federal Government and the maximum practicable amount of competition by the private sector, while assuring continuous availability to the Federal Government of land remote-sensing data; (13) certain Government oversight must be maintained to assure that private sector activities are in the national interest and that the international commitments and policies of the United States are honored; and (14) there is no corr pelling reason to commercialize meteorological satellites at this time.

PURPOSES 15 USC 4202 SEC. 102. The purposes of this Act are to (1) guide the Federal Government in achieving proper involvement of the private sector by providing a framework for phased commercialization of land remote sensing and byassur- ing continuous data availability to the Federal Government; Defense and (2) maintain the United States worldwide leadership in civil national remote sensing, preserve its national security, and fulfill its security international obligations; (3) minimize the duration and amount of further Federal investment n to assure data continuity while achieving commercialization of civil land remote sensing; (4) provide for a comprehensive civilian program of research, development, and demonstration to enhance both the United States capabilities for remote sensing from space and the application and utilization of such capabilities; and (5) prohibit commrcialization of meteorological satellites at this time. POLICIES 15 USC 4203 SEC. 103. (a) It shall be the policy of the United States topreserve its right to acquire and disseminate unenhanced remote-sensing data. (b) It shall be the policy of the United States that civilianunen- 'lanced remote-sensing data be made available to all potentialusers on a nondiscriminatory basis and in e manner consistent with applicable antitruPt laws Defense and (c) It shall be the policy of the United States both to commercialize nations' those remote-sensing space systems that properly lend themselves to private sector operation and to avoid competition by the Govern- ment with such commercial operations, while continuing to preserve our national security, to honor our international obligations, and to retain in the Government those remote-sensing functions thatare essentially of a public service nature.

DEFINITIONS 15 US(' 4204 Sec. 104. For purnnees of this Act: (1) The term -Landsat systam" means Landsata 1, 2, 3, 4, and 5, and any related ground equipment, systems, and facilities, and any successor civil land remote-sensing space systemsoper- ated by the United States Government prior to thecommencement of the six-year period described in title III. (2) The term "Secretary" means the Secretary of Commerce.

'13 4 App CPublic Law 98.365 July 17, 1984 431

PUBLIC LAW 98-365JULY 17, 1984 98 STAT. 453 (3XA) The term "nondiscriminatory basis" means without preference, bias, or any other special arrangement (except on the basis of national security concerns pursuant to section 60'7) regarding delivery, format, financing, or technical considerations which would favor one buyer or class of buyers over another. (B) The sale of data is made on a nondiscriminatory basis only if (i) any offer to sell or deliver data is published in advance in such manner as will ensure that the offer is equally available to all prospective buyers; (ii) tht system operator has not established or changed any price, policy, procedure, or other termor condition in a manner which gives one buyer or class of buyer de facto favored access to data; (iii) the system operator does not make unenhanced data available to any purchaser on an exclusive basis; and (iv) in a case where a system operator offers volume discounts, such discounts are no greater than the demonstrable reductions in the cost of volume sales. The sale of data on a nondiscriminatory basis does not preclude the system operator from offering discounts other than volume discounts to the extent that such discounts are consistent with the provisions of this paragraph. (C) The sale of data on a nondiscriminatory basis does not require (i) that a system operator disclose names of buyers or their purchases; (ii) that a system operator maintain all, or any particular subset of, data in a working inventory; or (iii) that a system operator expend equal effort in developing all segments of a market. (4) The term "unenhanced data" means unprocessed or mini- mally processed signals or film products collected from civil remote-sensing space systems. Such minimal processingmay include rectification of distortions, registration with respect to features of the Earth, and calibration of spectralresponse. Such minimal processing does not include conclusions, manipula- tions, or calculations derived from such signals or film products or combination of the signals or film products with other data or information. (5) The term "system operator" means a contractor under title II or title III or a license holder under title IV. TITLE IIOPERATION AND DATA MARKETING OF LANDSAT SYSTEM

OPERATION

SEC. 201. (a) The Secretary shall be responsible for 15 USC 4211 (1) the Landsat system, including the orbit, operation, and disposition of Landsats 1, 2, 3, 4, and 5; and (2) provision of data to foreign ground stations under the terms of agreements between the United States Government and nations that operate such ground stations whichare in force on the date of commencement of the contract awarded pursuant to this title. (b) The provisions of this section shall not affect the Secretary's authority to contract for the operation of partor all of the Landsat system, so long as the United States Government retains (1) ownership of such system; (2) ownership of the unenhanced data; and

435 432 International Cooperation and Competition in Civilian Space Activities

98 STAT. 454 PUBLIC LAW 98-365JULY 17, 1984

(3) authority to make decisions concerning operation of the system.

CONTRACT FOR MARKETING OF UNENHANCED DATA 15 USC 4212 SEc. 202. (a) In accordance with the requirements of this title, the Secretary, by means of a competitive process and to the extent provided in advance by appropriation Acts, shall contract with a United States private sector party (as defined by the Secretary) for the marketing of unenhanced data collected by the Landsat system. Any such contract (1) shall provide that the contractor set the prices of unenhanced data; (2) may provide for financial arrangements between the Sec- retary and the contractor including fees for operating the system, payments by the contractor as an initial fee or as a percentage of sales receipts, or other such considerations; (3) shall provide that the contractor will offer to sell and deliver unenhanced data to all potential buyers on a nondiscriminatory basis; (4) shall provide that the contractor pay to the United States Government the full purchase price of any unenhanced data that the contractor elects to utilize for purposes other than sale; (5) shall be entered into by the Secretary only if the Secretary has determined that such contract is likely to result in net cost savings for the United States Government; and (6) may be reawarded competitively after the practical demise of the space segment of the Landsat system, as determined by the Secretary. (b) Any contract authorized by subsection (a) may specify that the contractor use, and, at his own expense, maintain, repair, or modify, such elements of the Landsat system as the contractor finds necessary for commercial operations. Congress (c) Any decision or proposed decision by the Secretary to enter into any such contract shall be transmitted to the Committee on Commerce, Science, and Transportation of the Senate and the Com- mittee on Science and Technology of the House of Representatives for their review. No such decision or proposed decision shall be implemented unless (A) a period of thirty calendar days has passed after the receipt by each such committee of such transmittal, or (B) each such committee before the expiration of such period has agreed to transmit and has transmitted to the Secretary written notice to the effect that such committee has no objection to the decision or proposed decision. As part of the transmittal, the Secretary shall include information on the terms of the contract described in subsection (a). (d) In defining "United States private sector party" for purposes of this Act, the Secretary may take into account the citizenship of key personnel, location of assets, foreign ownership, control, influence, and other such factors.

CONDMONS OF COMPETITION FOR CONTRACT 15 USC 4213 SEc. 203. (a) The Secretary shall, as part of the advertisement for the competition for the contract authorized by section 202, identify and publish the international obligations, national security concerns (with appropriate protection of sensitive information), domestic

436 App. C Public Law 98-365July 17, 1984 433

PUBLIC LAW 98-365JULY 17, 1984 98 STAT. 455 legal considerations, and any other standards or conditions which a private contractor shall be required to meet. (b) In selecting a contractor under this title, the Secretary shall consider (1) ability to market aggressively unenhanced data; (2) the best overall financial return to the Government, including the potential cost savings to the Government that are likely to result from the contract; (3) ability to meet the obligations, concerns, considerations, standards, and conditions identified under subsection (al; (4) technical competence, including the ability to assure continuous and timely delivery of data from the Landsat system; (5) ability to effect a smooth transition with the contractor selected under title III; and (6) such other factors as the Secretary deems appropriate and relevant. (c) If, as a result of the competitive process required by section Report 202(a), the Secretary receives no proposal which is acceptable under the provisions of this title, the Secretary shall so certify and fully report such finding to the Congress. As soon as practicable but not later than thirty days after so certifying and reporting, the Secre- tary shall reopen the competitive process. The period for the subsequent competitive process shall not exceed one hundred and twenty days. If, after such subsequent competitive process, the Secretary receives no proposal which is acceptable under the provisions of this title, the Secretary shall so certify and fully report such finding to the Congress. In the event that no acceptable proposal is received, the Secretary shall continue to market data from the Landsat system. (d) A contract awarded under section 202 may, in the discretion of the Secretary, be combined with the contract required by title III, pursuant to section 304(b).

SALE OF DATA

SEC. 204. (a) After the date of the commencement of the contract15 USC 4214 described in section 202(a), the contractor shall be entitled to revenues from sales of copies of data from the Landsat system, subject to the conditions specified in sections 601 and 602. (b) The contractor may continue to market data previously generated by the Landsat system after the demise of the space segment of that system. FOREIGN GROUND STATIONS

SEC. 205. (a) The contract under this title shall provide that the 15 USC 4215 contractor shall act Ls the agent of the Secretary by continuing to supply unenhanced data to foreign ground stations for the life, and according to the terms, of those agreements between the United States Government and such foreign ground stations that are in force on the date of the commencement of the contract. (b) Upon the expiration of such agreements, or in the case of foreign ground stations that have no agreement with the United States on the date of commencement of the contract, the contract shall provide

437 434 International Cooperation and Competition in Civilian Space Activities

98 STAT. 456 PUBLIC LAW 98-365JULY 17, 1984

(1) that unenhanced data from the Landsat system shall be made available to foreign ground stations only by the contractor; and (2) that such data shall be made available on a nondiscriminatory basis.

TITLE ITTPROVISION OF DATA CONTINUITY AFTER THE LANDSAT SYSTEM

PURPOSES AND DEFINITION

15 USC 4221 SEC.301. (a) It is the purpose of this title (1) to provide, in an orderly manner and with minimal risk, for a transition from Government operation to private, commercial operation of civil land remote-sensing systems; and (2) to provide data continuity for six years after the practical demise of the space segment of the Landsat system. (b) For purposes of this title, the term "data continuity" means the continued availability of unenhanced data user(1) including data which are from the point of view of a data (A) functionally equivalent to the multispectral data generated by the Landsat 1 and 2 satellites; and (B) compatible with such data and with equipment used to receive and process such data; and (2) at an annual volume at least equal to the Federal usage during fiscal year 1983. (c) Data continuity may be provided using whatever technologies are available. DATA CONTINUITY AND AVAILABILITY

Contracts with SEC.302. The Secretary shall solicit proposals from United States US private sector parties (as defined by the Secretary pursuant to 15 US(' 4222 section 202) fo.. a contract for the development and operation of a remote-sensing space system capable of providing data continuity for a period of six years and for marketing unenhanced data in accordance with the provisions of sections 601 and 602. Such proposals, at a minimum, shall specify (1) the quantities and qualities of unenhanced data expected from the system; (2) the projected date upon which operations could begin; (3) the number of satellites to be constructed and their expected lifetimes; (4) any need for Federal funding to develop the system; (5) any percentage of sales receipts or other returns offered to the Federal Government; (6) plans for expanding the market for land remote-sensing data; and (7) the proposed procedures for meeting the national security oncerns and international obligations of the United States in accordance with section 607.

AWARDING OF THE CONTRACT 1:-) USC 4223 Szc. 303. (aX1) In accordance with the requirements of this title, the Secretary shall evaluate the proposals described in section 302 and, by means of a competitive process and to the extent provided in App. CPublic Law 98-365July 17, 1984 435

PUBLIC LAW 98-365JULY 17, 1984 98 STAT. 457 advance by appropriation Acta, shall contract with the United States private sector party for the capability of provi data continuity for a period of six years and for marketing une ced data (2) Before commencing apace operations the contractor shall obtain a license under ; itle W. (b) As part of the evaluation described in subsection (a), the Secretary shall analyze the expected outcome of each proposal in terms of (1) the net cost to the Federal Government of developing the recommended system; (2) the technical competence and financial condition of the contractor, (3) the availability of such data after the expected termination of the Landsat system; (4) the quantities and qualities of data to be generated by the recommended system; (5) the contractor's ability to supplement the requirement for data continuity by adding, at the contractor's expense, remote- sensing capabilities which maintain United States leadership in remote sensing; (6) the potential to expand the market for data; (7) expected returns to the Federal Government based on any percentage of data sales or other such Enancial consideration offered to the Federal Government in accordance with section 305; (8) the commercial viability of the pro (9) the proposed procedures for sa the national security concerns and international obligations of the United States; (10) the contractor's ability to effect a smooth transition with any contractor selected under title II; and (11) such other factors as the Secretary deems appropriate and relevant. (c) Any decision or proposed decision by the Secretary to enterCongresd into any such contract shall be transmitted to the Committee on Commerce, Science, and Transportation of the Senate and the Com- mittee on Science and Technology of the House of Representatives for their review. No cruel decision or proposed decision shall be implemented unless (1) a Jeriod of thirty calendar days has passed after the receipt by each ouch committee of such transmittal, or (2) each such committee before the expiration of such period has agreed to transmit and has transmitted to the Secretary written notice to the effect that such committee has no obkection to the decision or proposed decision. As part of the transnuttal, the '3cretary shall include the information specified in subsection (a). (d) If, as a result of the competitive process required by thisReport section, the Secretary receives no proposal which is acceptable under the provisions of this title, the Secretary shall so ce and fully report such finding to the Congress. As soon as practicab e but not later than thirty days after so certifying and reporting, the Sacretary shall reopen the competitive process. The period for the subsequent competitive process shall not exceed one hundred and eighty days. If, after such subsequent competitive process, the Secre- tary receives no proposal which is acceptable under the provisions of this title, the Secretary shall so certify and fully report such finding to the Congress. Not earlier than ninety days after evil certification and report, the Secretary may assure data continu:cy by procure-

4 3 9 436 International Cooperation and Competition in Civilian Space Activities

98 STAT. 458 PUBLIC LAW 98-365JULY 17, 1984 ment and operation by the Federal Government of the necessary systems, to the extent provided in advance by appropriation Acts.

TERM OF CONTRACT 15 USC 4224 Sac. 304. (a) Any contract entered into pursuant to this title d) shall be entered into as soon as practicable, allowing for the competitive procurement process required by this title; (2) shall, in accordance with criteria determined and published by the Secretary, reasonably assure data continuity for a period of six yews, beginning as soon as practicable in order to minimize any interruption of data availability; (3) shall provide that the contractor will offer to sell and deliver unenhanced data to all potential buyers on a nondiscriminatory basis; (4) shall not provide a guarantee of data purchases from the contractor by the Federal Government; (5) may provide that the contractor utilize, on a space-available basis, a civilian United States Government satellite or vehicle as a platform for a civil land remote-sensing space system, if (A) the contractor agrees to reimburse the Government immediately for all related costa incur_od with respect to such utilization, including a reasonable and proportionate share of fixed, platform, data transmission, and launch costa; and (B) such utillzati,,n would not interfere with or otherwise compromise intended civilian Government missions, as determined by the agency responsible for the civilian platform; and (6) may provide financial support by the United States Gov- ernment, for a portion of the capital costa required to provide data continuity for a period of six years, in the form of loans, loan guarantees, or payments pursuant to section 305 of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 255). (bX1) Without regard to whether any contract entered into under this title is combined with a contract under title II, the Secretary shall promptly determine whether the contract entered into under this title reasonably effectuates the pumons and policioe of title U. Such determination shall be submitted to thewi. .nt and the Congress, together with a full statement of the basis for such determination. (2) If the Secretary determines that such contract does notreason- ably effectuate the requirements of title II, the Secretary shall promptly carry out tl:(t provisions of such title to the extent provided in advance in appropriations Acts.

MARKITING 15 USC 4225 Sac. 305. (a) In order to promote aggressive marketing of land remote-sensing data, any contract entered into pursuant to this title may pro Ads that the percentage of sales paid by the contractor to the Federal Government shall decrease according to stipulated increases in sales levels. (b) After the six-year period described in section 304(aX2), the contractor may continue to sell data. If licensed under title IV, the

4 App. CPublic Law 98.365 July 17, 1984 437

PUBLIC LAW 98-365JULY 17, 1984 98 STAT. 459 contractor may continue to operate a civil remote-sensingspace s:,Ttem. REPORT

Sac. 306. Two years after the date of thecommencement of the 15 USC 4226 six-year period described in section 304(aX2),the Secretary shall report to the President and to the Congresson the progress of the transition to fully private financing, ownership, andoperation of remote-sensing space systems, together withany recommendations for actions, including actionsnecessary to ensure United States leadership in civilian land remote sensing fromspace.

TERMINATION OF AUTHORITY

Sac. 307. The authority granted to the Secretary by thistitle shall 15 USC 4227 terminate ten years after the date of enactment of this Act. TITLE IVLICENSING OF PRIVATE REMOTE-SENSING SPACE SYSTEMS

GENERAL AUTHORITY

Sac. 401. (aX1) In consultation with otherappropriate Federal 15 USC 4241 agencies, the Secretary is authorized to licenseprivate sector parties to operate private remote-sensingspace systems for such period as the Secretary may specify and in accordancewith the provisions of this title. (2) In the case of a private space system that is usedfor remote sensing and other purposes, the authority of theSecretary under this title shall be limited only to the remote-sensingoperations of such space system. (b) No license shall be granted by the Secretary unlessthe Secre- tary deo ermines in writing that the applicantwill comply with the requirements of this Act,any regulations issued pursuant to this Act, and any applicable Internationalobligations and national security concerns of the United States. (c) The Secretary shall reviewany application and make a deter- Review date mination thereon within one hundred andtwenty days of the receipt of such application. If final action hasnot occurred within such time, the Secretary shall inform the applicant ofany pending issues and of actions required to reoolve them. 4:1) The Secretary shall not deny such license inorder to protect aexisting licensee from competition.

CONDITIONS FOR OPERA? .

Sac. 402. (a) No person who is subjectto the jurisdiction or control 15 USC 4242 of the United St-Les may, directlyor through any subsidiary or affiliate, operate any private remote-sensingspace system without a license pursuant to section 401. (b) Any license issued pursuant to this title shallspecify, at a minimum, that the licensee shall comply with allof the requir.- ments of this Act and shall (1) operate the system in suchmanner as to preserve and Defense and promote the national security of the United Statesand to national observe and implema.. t the internationalobligations of the security United States in accordance with section607;

4 4 438 International Cooperation and Competition in Civilian Space Activities

98 STAT. 460 PUBLIC LAW 98-385--JULY 17, 1984

(2) make unenhanced data available to all potential users on a nondiscriminatory basis; (3) upon termination of operations under the license, make disposition of any satellites in space in a manner satisfactory to the President; (4) promptly make available all unenhanced data which the Secretary may request pursuant t3 sect:-..n 602: (5) furnish the Secretary with complete orbit and data collection characteristics of the system, obtain advance approval of any intended deviation from such characteristics, and inform the Secretary immediately of any unintended deviation; (6) notify the Secretary of any agreement the licensee intends to enter with a foreign nation, entity, or consortium involving foreign nations or entities; (7) permit the inspection by the Secretary of the licensee's equipment., facilities, and financial records; (8) surrender the license and terminate operations upon notification by the Secretary pursuant to section 403(a)(1); and (9XA) notify the Secretary of any "value added" activities (as defined by the Secretary by regulation) that will be conducted by the licensee or by a subsidiary or affiliate; and (B) if such activities are to be conducted, provide the Secre- tary with a plan for compliance with the provisions of this Act concerning nondiscriminatory access.

ADMINISTRATIVE AUTHORITY OF THE SECRIMARY 15 USC 4243 Sec. 403. (a) In order to carry out the responsibilities specified in this title, the Secretary may (1) grant, terminate, modify, condition, transfer, or suspend licenses under this title, and upon notification of the licensee may terminate licensed operations on an immediate basis, if the Secretary determines that the licensee has substantially failed to comply with any provision of this Act, with any regulation issued under this Act, with any terms, conditions, or restrictions of such license, or with any international obligations or national security concerns of the United States; (2) inspect the equipment, facilities, or financial records of any licensee under this title; (3) provide penalties for noncompliance with the requirements of licenses or regulations issued under this title, including civil penalties not to exceed $10,000 (each day of operation in violation of such licenses or regulations constituting a separate violation); (4) compromise, modify, or remit any such civil penalty; (5) issue subpenas for any materials, documents, or records, or for the attendance and testimony of witnesses for the purpose of conducting a hearing under this section; (6) seize any object, record, or report where there is probable cause to believe that such object, record, or report was used, is being used, or is likely to be used in violation of this Act or the requirements of a license or regulation issued thereunder; and (7) make investigations and inquiries and administer to or take from any person an oath, affirmation, or affidavit concerning any matter relating to the enforcement of this Act. (b) Any applicant or licensee who makes a timely request for review of an adverse action pursuant to subsection (aX1), (aX3),or

442 App CPublic Law 98365July 17, 1984 439

PUBLIC LAW 98-365JULY 17, 1984 98 STAT. 461 (aX6) shall be entitled to adjudication by the Secretary on the record after an opportunity for an agency hearing with respect to such adverse action. Any final action by the Secretary under this subsection shall be subject to judicial review under chapter 7 of title 5, United States Code. 5 USC 701 et set? REGULATORY AUTHORITY OF THE SECRETARY

Sec. 404. The Secretary may issue regulations to carry out the 15 USC 4244 provisions of this title. Such regulations shall be promulgated only after public notice and comment in accordance with the provisions of section 553 of title 5, United States Code.

AGENCY ACTIVITIES

SEC. 405. (a) A private sector party may apply for a license to15 USC 4245 operate a private remote-sensing space system which utilizes, on a space-available basis, a civilian United States Government satellite or vehicle as a platform for such system. The Secretary, pursuant to the authorities of this title, may license such system if it meets all conditions of this title cod a) the system operator agrees to reimburse the Government immediately for all related costa incurred with respect to such utilization, including a reasonable and proportionate share of fixed, platform, data transmission, and launch costs; and (2) such utilization would not interfere with or otherwise compromise intended civilian Government missions, as determined by the agency responsible for such civilian platform. (b) The Secretary may offer assistance to private sector parties in finding appropriate opportunities for such utilization. (c) To the extent provided in advance by appropriation Acts, any Federal agency may enter into agreements for such utilization if such agreements are consistent with such agency's mission and statutory authority, and if such remote-sensing space system is licensed by the Secretary before commencing operation. (d) The provisions of this section do not apply to activities carried out under title V. (e) Nothing in this title shall affect the authority of the Federal Communications Commission pursuant to the Communications Act of 1934, as amended (47 U.S.C. 151 et seq.). 47 USC 609

TERMINATION

Sec. 406. If, five years after the expiration of the six-year period15 USC 4246 described in section 304(aX2), no private sector party has been licensed and continued in operation under the provisions of ties title, the authority of this title shall terminate. TITLE VRESEARCH AND DEVELOPMENT

CONTINUED FEDERAL RESEARCH AND DEVELOPMENT

Sec. 501. (aX1) The Administrator of the National Aeronautics and15 USC 4261 Space Administration is directed to continue and to enhance such Administration's programs of remote-sensing research and development. (2) The Administrator is authorized and encouraged to

38-797 0 - 85 - 15:QL 3 443 440 International Cooperation and Competition in Civilian Space Activities

98 STA. 402 PUBLIC LAW 98-365JULY 17, 1984 (A) c Induct experimental space remote-sensing programs (includir. applications demonstration programs and basic research It universities); (B) de ,elop remote-sensing technoloees and techniques, includin, those needed for monitoring the Earth and its environment; and (C) conduct such research and development in cooperation with other Federal agencies and with public and private research entities (including private industry, universities, State and local governments, foreign governments, and international organizations) and to enter into arrangements (including joint ventures) which will foster such cooperation. of(bXl) The Secretary is directed to conduct a continuingprogram (A) research in applications of remote-sensing; (B) monitoring of the Earth and its environment; and (C) development of technology for such monitoring. (2) Such program may include support of basic research at universities and demonstrations of applications. (3) The Secretary is authorized and encouraged to conduct such research, monitoring, and development in cooperation with other Federal agencies and with public and private research entities (including private industry, universities, State and localgovern- ments, foreign governments, and international organizations) and to enter into arrangements (including joint ventures) which will foster such cooperation. (cXl) In order to enhance the United States ability to manage and utilize its renewable and nonrenewable resources, the Secretary of Agriculture and the Secretary of the Interior are authorized and encouraged to conduct programs of research and development in the applications of remote sensing using funds appropriated for such purposes. (2) Such programs may include basic research at universities, demonstrations of applications, and cooperative activities involving other Governmer t agencies, private sector parties, and foreign and international organizations. (d) Other Federal agencies are authorized and encouraged to conduct research and development on the use of remote sensing in fulfillment of their authorized missions, using funds appropriated for such purposes. Report (e) The Secretary and the Administrator of the National Aeronau- tics and Space Administration shall, within one year after the date of enactment of this Act and biennially thereafter, jointly develop and transmit to the Congress a report which includes (1) a unified national plan for remote-sensing research and development applied to the Earth and its atmosphere; (2) a compilation of progressm the relevant ongoing research and development activities of the Federal agencies; and (3) an assessment of the state of our knowledge of the Earth and its atmosphere, the needs for additional research (including research related to operational Federal remote-sensingspace programs), and opportunities available for further progress.

usz or EXPZIUMENTAL DATA IN' 4262 Sec. 502. Data gathered in Federal experimental remote-sensing space programs may be used in related research and development programs funded by the Federal Government (including applications

4i4 App. CPublic Law 98-365July 17, 1984 441

PUBLIC LAW 98-365JULY 1 ?, 1984 98 STAT. 463 programs) and cooperative research programs, but not for commercial uses or in competition with private sector activities, except pursuant to section 503.

SALE OF EXPERIMENTAL DATA

SEC. 503. Data gathered in Federal experimental remote-sensing 15 USC 4263 space programs may be sold en bloc through a competitive process (consistent with national security interests and international obligations of the United States and in accordance with section 607) to any United States entity which will market the data on a nondiscriminatory basis. TITLE VIGENERAL PROVISIONS

NONDISCRIMINATORY DATA AVAILABILITY

SEC. 601(a) Any unenhanced data generated by any system Public operator under the provisions of this Act shall be made available toav ilability all users on a nondiscriminatory basis in accordance with the 15 USC 4271 requirements of this Act. (b) Any system operator shall make publicly available the prices, policies, procedures, and other terms and conditions (but, in accordance with section 104(3XC), not necessarily the names of buyers or their purchases) upon which the operator will sell such data.

ARCHIVING OF DATA SEC. CO2. (a) It is in the public interest for the United States 15 USC 4272 Government (1) to maintain an archive of land remote-sensing data for historical, scientific, and technical purposes, including long- term global environmental monitoring; (2) to control the content and scope of the archive; and (3) to assure the quality, integrity, and continuity of the archive. (b) The Secretary shall provide for long-term storage, maintenance, and upgrading of a basic, global, land remote-sensing data set (hereinafter referred to as the "bask data set") and shall follow reasonable archival practices to assure proper storage andpreserva- tion of the basic data set and timely access for parties requesting data. The basic data set which the Secretary assembles in the Government arc; ive shall remain distinct fromany inventory of data which a system operator may maintain for sales and for other purposes. (c) In determining the initial content of, or in upgrading, the basic data set, the Secretary shall (1) use as a baseline the data archived on the date of enactment of this Act; (2) take into account future technical and scientific developments and needs; (3) consult with and seek the advice of users and producers of remote-sensing data and data products; (4) consider the need for data which may be duplicative in terms of geographical coverage but which differ in terms of season, spectral bands, resolution, or other relevant factors;

445 442 International Cooperation and Competition in Civilian Space Activities

98 STAT. 464 PUBLIC LAW 98-365--JULY 17, 1984 (5) include, as the Secretary considers appropriate, unenhanced data generated either by the Landsat system, pursuant to title III, or by licensees under title N; (6) include, as the Secretary considers appropriate, data collected by foreign ground stations or by foreign remoteeensing space systems; and (7) ensure that the content of the archive is developed in accordance with section 607. (d) Subject to the availability of appropriations, the Secretary shall request data needed for the basic data set and pay to the providing system operator reasonable costs for reproduction and transmission. A system operator shall promptly make requested data available in a form suitable for p for archiving. Marketing (e) Any system operator shall have the exc usive right to sell all data that the operator provides to the United States remotesensing data archive for a period to be determined by the Secretary but not to exceed ten years from the date the data are sensed. In the case of data generated from the Landsat system prior to the implementation of the contract described in section 202(a), any contractor selected pursuant to section 202 shall have the exclusive right to market such data on behalf of the United States Government for the duration of such contract. A system operator may relinquish the exclusive right and consent to distribution from the archive before the period of exclusive right has expired by terminating the offer to sell particular data. Public (0 After the expiration of such exclusive right to sell, or after availability relinquishment of such right, the data provided to the United States remote-sensing data archive shall be in the public domain and shall be made available to requesting parties by the Secretary at prices reflecting reasonable costs of reproduction and transmittal. (g) In carrying out the functions of this section, the Secretary shall, to the extent practicable and as provided in advance by appropriation Acts, use existing Government facilities.

NONREPRODUCTION 15 USC 4273 SEC. 603. Unenhanced data distributed by any system operator under the provisions of this Act may be sold on the condition that such data will not be reproduced or disseminated by the purchaser.

REIMBURSEMENT FOR ASSISTANCE 15 USC 4274 SEC. 604. The Administrator of the National Aeronautics and Space Administration, the Secretary of Defense and the heads of other Federal agencies may provide assistance to system operators under the provisions of this Act. Substantial assistance shall be reimbursed by the operator, except as otherwise provided by law.

ACQUISITION OF EQUIPMENT 15 USC 427 5 SEC. 605. The Secretary may, by means of a competitive process, allow a licensee under title IV or any other private party to buy, lease, or otherwise acquire the use of equipment from the Landsat system, when such equipment is no longer needed for the operation of such system or for the sale of data from such system. Officials of other Federal civilian agencies are authorized and encouraged to cooperate with the Secretary in carrying out the provisions of this section.

4 1 6 App. CPublic Law 98-365July 17, 1984 443

PUBLIC LAW 98-365JULY 17, 1984 98 STAT. 465

RADIO PRZQUENCY ALLOCATION

Sac. 606. (a) Within thirty days after the date of enactment of thisPresident of U S Act, the President (or the bent's delegee, if any, with authority 15 USC 4276 over the assignment of frequencies to radio stations or classes of radio stations operated by the United States) shall make available for nongovernmental use spectrum presently allocated to Govern- ment use, for use by United States Landsat and commercial remote- sensing space systems. The spectrum to be so made available shall conform to any applicable international radio or wire treatyor convention, or regulations annexed thereto. Within ninety days thereafter, the Federal Communications Commission shall utilize appropriate procedures to authorize the use of such spectrum for nongovernmental use. Nothing in this section shall preclude the ability of the Commission to allocate additional spectrum tocom- mercial land remote-sensing space satellite system use. (b) To the extent required by the Communications Act of 1934,as amended (47 U.S.C. 151 et seq.), an application shall be filed with the 47 USC 609 Federal Communications Commission for any radio facilities involved with the commercial remote-sem:4 space system. (c) It is the intent of Congress that the Federal Communications Commission complete the radio licensing process under the Commu- nications Act of 1934, as amended (47 U.S.C. 151 et seq.), upon the application of any private sector party or consortium operator of any commercial land remote-sensing space system subject to this Act, within one hundred and twenty days of the receipt ofan application for such licensing. If final action has not occurred within one hundred and twenty days of the receipt of such an application, the Federal Communications Commission shall inform the applicant of any pending issues and of actions required to resolve them. (d) Authority shall not be required from the Federal Communica- tions Commission for the development and construction of any United States land remote-sensing space system (or component thereof), other than radio transmitting facilitiesor components, while any licensing determination is being made. (e) Frequency allocations made pursuant to this section by the Federal Communications Commission shall be consistent with international obligations and with the public interest.

CONSULTATION

Sac. 607. (a) The Secretary shall consult with the Secretary ofDefense and Defense on all matters under this Act affecting national security.national security The Secretary of Defense shall be responsible for determining those 15 USC 4277 conditions. consistent with this Act, necessary to meet national security concerns of the United States and for notifying the Secre- tary promptly of such conditions. (bX1) The Secretary shall consult with the Secretary of Stateon all matters under this Act affecting international obligations. The Secretary of State shall be responsible for determining those conditions, consistent with this Act, necessary to meet international obligations and policies of the United States and for notifying the Secretary promptly of such conditions. (2) Appropriate Federal agencies are authorized and encouraged to provide remote-sensing data, technology, and training to developing nations as a component of programs of international aid.

4 4 7

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98 STAT. 416 PUBLIC LAW 98-365--JULY 17, 1984

(3) The Secretary of State shall promptly report to the Secretary any instances outside the United States of discriminatory distribution of data. (c) If, as a result of technical modifications imposed on a system operator on the basis of national security concerns, the Secretary, in consultation with the Secretary of Defense or with other Federal agencies, determines that additional costs will be incurred by the system operator, or that past development costa (including the cost of capital) will not be recovered by the system operator, the Secre- tary may require the agency or agencies requesting such technical modifications to reimburse the system operator for such additional or development costs, but not for anticipated profits. Reimburse- ments may cover costs associated with required changes in system performance, but not costa ordinarily associated with doing business abroad.

AMENDMENT TO NATIONAL AERONAUTICS AND SPAM ADMINISTRATION AUTHORIZATION, 1983 Sec. 608. Subsection (a) of section 201 of the National Aeronautics and Space Administration Authorization Act, 1983 (Public Law 97- 15 USC 1.7.17 324; 96 Stat. 1601) is amended to read as follows: note "(a) The 5ecretary of Commerce is authorized to plan and provide for the inanagement and operation of civil remote-sensing space systems, which may include the Landsat 4 and 5 satellites and associated ground system equipment transferred from the National Aeronautics and Space Administration; to provide for user fees; and to plan for the transfer of the operation of civil remote sensing space systems to the private sector when in the national interest. ".

AUTHORIZATION OF APPROPRIATIONS 15 USC 427S Sec. 609. (a) There are authorized to be appropriated to the Secretary $75,000,000 for fiscal year 1985 for the purpose of carrying out the provisions of this Act. Such sums shall remain available until expended, but shall not become available until the time periods specified in sections 202(c) and 303(c) have expired. (b) The authorization provided for under subsection (a) shall be in addition to moneys authorized pursuant to title II of the National 15 USC 1517 Aeronautics and Space Administration Authorization Act, 1983. note TITLE WIPROHIBITION OF COMMERCIALIZATION OF WEATHER SATELLITES

PROHIBITION President of U S Sec. 701. Neither the President nor any other official of the 15 IJSC 4291 Government shall make any effort to lease, sell, or transfer to the private sector, commercialize, or in any way dismantleany portion of the weather satellite systems operated by the Department of Commerce or any successor agency.

44d App. CPublic Law 98-365July 17, 1984 445

PUBLIC LAW 98-365JULY 17, 1984 98 STAT. 467

FUTURE CONSIDERATIONS

Sac. 702. Regardless of any change in circumstances subsequent to 15 USC 4292 the enactment of this Act, even if such change makes itappear to be in the national interest to commercialize weather satellites, neither the President nor any official shall take any action prohibited by section 701 unless this title has first been repealed. Approved July 17, 1984.

LEGISLATIVE HISTORYH.R 5155 HOUSE REPORT No. 98-647 (Comm on Science and Technology) SENATE REPORT No. 98-458 (Comm on Commerce, Science, and Transportation) CONGRESSIONAL RECORD, Vol 130 (1984) Apr. 9, considered and passed House. June 8, considered and passed Senate, amended. June 28, House concurred in Senate amendment with an amendment June 29. Senate concurred in House amendment WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 20, No 29 (1984) July 17, Presidential statement

449 Appendix D PUBLIC LAW 98-575OCT. 30, 1984

PUBLIC LAW 98- 575 OCT. 30, 1984 98 STAT. 3055 Public Law 98-575 981h Congress An Act Oct 30, 1984 To facilitate commercial space launches, and for other purposes. [H.R. 3942) Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, Commercial Space SHORT TITLE Launch Act.

SECTION 1. This Act may be cited as the "Commercial Space 49 USC app. 2001 Launch Act". note FINDINGS

SEC. 2. The Congress finds and declares that 49 USC app. (1) the peaceful uses of outer space continue to be of great 2601 value and to offer benefits to all mankind; (2) private applications of space technology have achieved a significant level of commercial and economic activity, and offer the potential for growth in the future, particularly in the United States; (3) new and innovative equipment and services are being sought, created, and offered by entrepreneurs in telecommunications, information services, and remote sensing technology; (4) the private sector in the United States has the capability of developing and providing private satellite launching and associated services that would complement the launching and associated services now available from the United States Gov- ernment; (5) the development of commercial launch vehicles and associated services would enable the United States to retain its competitive position internationally, thereby contributing to the national interest and economic well-being of the United States; (6) provision of launch services by the in' gate sector is consistent with the national security interests and foreign policy interests of the United States and would be facilitated by stable, minimal, and appropriate regulatory guidelines that are fairly and expeditiously applied; and (7)the United States should encourage private sector launches and associated services and, only to the extent necessary, regulate such launches and services in order to ensure compliance with international obligetions of the United States and to protect the public health and safety, safety of property, and national security interests and foreign policy interests of the United States. PURPOSES

SEC. 3. It is therefore the purpose of this Act 49 USC 2602 (1) to promote economic growth and entrepreneurial activity through utilization of the space environment for peaceful purposes;

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98 STAT. 3056 PUBLIC LAW 98-575OCT. 30, 1984

(2) to encourage the United States private sector to provide launch vehicles and associated launch services by simplifying and expediting the issuance and transfer of commercial launch licenses and by facilitating and encouraging the utilization of Government-developed space technology; and (3) to designate an executive department to oversee and coordinate the conduct of commercial launch operations, to issue and transfer commercial launch licenses authorizing such activities, and to protect the public health and safety, safety of property, and national security interests and foreign policy interests of the United States.

DEFINITIONS

49 USC app SEC. 1. For purposes of this Act 2603 (1) "agency" means an executive agency as defined by section 105 of title 5, United States Code; (2) "launch" means to place, or attempt to place, a launch vehicle and payload, if any, in a suborbital trajectory, in Earth orbit in outer space, or otherwise in outer space; (3) "launch property" means propellants, launch vehicles and components thereof, and other physical items constructed for or used in the launch preparation or launch of a launch vehicle; (4) "launch services" means those activities involved in the preparation of a launch vehicle and its payload for launch and the conduct of a launch; (5) "launch site ' means the location on Earth from which a launch takes place, as defined in any license issued or transferred by the Secretary under this Act, and includes all facilities located on a launch site which are necessary to conduct a launch; (6) "launch vehicle" means any vehicle constructed for the purpose of operating in, or placing a payload in, outer space and any suborbital rocket; (7) "payload" means an object which a person undertakes to place in outer space by means of a launch vehicle, and includes subcomponents of the launch vehicle specifically designed or adapted for that object; (8) "person" means any individual and any corporation, partnership, joint venture, association, or other entity organized or existing under the laws of any State or any nation; (9) "Secretary" means the Secretary of Transportation; (10) "State", and "United States" when used in a geographical sense, mean the several States, the District of Columbia, the Commonwealth of Puerto Rico, American Samoa, the United States Virgin Islands, Guam, and any other commonwealth, territory, or possession of the United States; and (11) "United States citizen" means (A) any individual who is a citizen of the United States; (B) any corporation, partnership, joint venture, association, or other entity organized or existing under the laws of the United States or any State; and (C) any corporation, partnership, joint venture, association, or other entity which is organized or exists under the laws of a foreign nation, if the controlling interest (as defined by the Secretary in regulations) in such entity is

451 448 International Cooperation and Competition in Civilian fipace Activities

PUBLIC LAW 98-575OCT. 30, 1984 98 STAT. 3057 held by an individual or entity described in subparagraph (A) or (B).

GENERAL RESPONSIBILITIES OF THE SECRETARY AND OTHER AGENCIES

Sec. 5. (a) The Secretary shall be responsible for carrying out this 49 USCapp. Act, and in doing so shall 2604 (1) encourage, facilitate, and promote commercialspace launches by the private sector; and (2) consult with other agencies to provide consistent application of licensing requirements under this Act and toensure fair and equitable treatment for all license applicanto, (b) To the extent permitted by law, Federal agencies shall assist the Secretary, as necessary, in carrying out this Act.

azqumminrr OF LICENSE FOR PRIVATE SPACE LAUNCH OPERATIONS

Sec. 6. (aX1) No person shall launch a launch vehicleor operate a 49usc app. launch site within the United States, unless authorized bya license 2605 issued or transferred under this Act. (2) No United States citizen described in subparagraph (A)or (B) of section 4(11) shall launch a launch vehicleor operate a launch site outside the United States, unless authorized bya license issued or transferred under this Act. (3XA) No United States citizen described in subparagraph (C) of section 4(11) shall launch a launch vehicleor operate a launch site at any place which is both outside the United States and outside the territory of any foreign nation, unless authorized bya license issued or transferred under this Act. The preceding sentence shall not apply with respect to a launch or operation ofa launch site if there is an agreement in force between the United States anda foreign nation which provides that such foreign nation shall exercise jurisdiction over such launch or operation. (EXi) Except as provided in clause (ii) of this subparagraph, this Act shall not apply to the launch ofa I: inch vehicle or the operation of a launch site in the territory ofa foreign nation by a United States citizen described in subparagraph (C) ofsection 4(11). (ii) If there is an agreement in force between the United States International and a foreign nation which provides that the United States shall agreements exercise jurisdiction over the launch of a launch vehicleor operation of a launch site in the territory of such nation bya United States citizen described in subparagraph (C) of section 4(11),no such United States citizen shall launch a launch vehicleor operate a launch site in the territory of such nation, unless authorized bya license issued or transferred under this Act. (bX1) The holder of a launch license under this Act shallnot launch a payload unless that payload complies with all requirements of Federal law that relate to the launch ofa payload. The Socretary shall ascertain whether any license, authorization,or other permit required by Federal law fora payload which is to be launched has been obtained. (2) If no payload license, authorization, or permit is required by any Federal law, the Secretary may take such action under this Act as the Secretary deems necessary to prevent the launch of a payload by a holder of a launch license under this Act if the Secretary determines that the launch of such payload would jeopardize the

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98 STAT. 3058 PUBLIC LAW 98-575OCT. 30, 1984

public health and safety, safety of property, or any national security interest or foreign policy interest of the United States. (cXl) Except as provided in this Act, no person shall be required to obtain from any agency a license, approval, waiver, or exemption for the launch of a launch vehicle or the operation of a launch site. (2) Nothing in this Act shall affect the authority of the Federal Communications Commission under the Communications Act of 1934 (47 U.S.C. 151 et seq.) or the authority of the Secretary of Commerce under the Land Remote-Sensing Commercialization Act of 1984 (15 U.S.C. 4201 et seq.)-

AUTHORITY TO ISSUE AND TRANSFER LICENSES

49 USC app Sec. 7. The Secretary may, consistent with the public health and 2606 safety, safety ofproperty,and national security interests and foreign policy interests of the ,nited States, issue or transfer a license for launching one or more launch vehicles or for operating one or more launch sites, or both, to an applicant who meets the requirements for a license under section 8 of this Act. Any license issued or transferred under this section shall be in effect for such period of time as the Secretary may specify, in accordance with regulations issued tinder this Act.

LICENSING REQUIREMENTS

49 USC app SEC. 8. (aX1) All requirements of Federal law which apply to the 2607 launch of a launch vehicle or the operation of a launch site shall be requirements for a license under this Act for the launch of a launch vehicle or the operation of a launch site, respuctivelv, except to the extent provided in paragraph (2). (2) If the Secretary determines, in consultaion with appropriate agencies, that any requirement of Federal law that would otherwise apply to the launch of a launch vehicle o' the operation of a launch site is not necessary to protect the public health and safety, safety of property, an,. national security interests and foreign policy interests of the United, Mee, the Secretary may by regulation provide that such requirement shall not be a requirement for a license under this Act. (b) The Secretary may, with respect to launches and the operation of iaunch sites, prescribe such additional requirements as are necessary to protect the public health and safety, safety of property, and national security interests and foreign policy interests of the United States. (c) The Secretary may, in individual cases, waive the application of any requirement for a license under this section if the Secretary determines that such waiver is in the public interest and will not jeopardize the public health and safety, safety of property, or any national security interest or foreign policy interest of the United States. LICENSE APPLICATION AND APPROVAL

49 USC app Sec. 9. (a) Any person may apply to the Secretary for issuance or 2,1108 transfer of a license under this Act, in such form and manner as the Secretary may prescribe. The Secretary shall establish procedures and timetabl-s to expedite review of applications under this section and to reduce regulatory burdens for applicants.

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PUBLIC LAW 98-575OCT. 30,1984 98 STAT. 3059

(b) The Secretary shall issue or transfer a license to an applicant if the Secretary determines in writing that the applicant complies and will continue to comply with the requirements of this Act andany regulation issued under this Act. The Secretary shall include in such license such conditions as may be necessary toensure compliance with this Act, including an effectivemeans of on-site verification that a launch or operation of a launch site conforms to representa- tions made in the application for a licenseor transfer of a license. The Secretary shall make a determinationon any application not later than 180 days after receipt ." such application. If the Secretary has not made a determination within 120 days after receipt ofsuch application, the Secretary shall inform the applicant ofany pending issues and of actions required to resolve such issues. (c) The Secretary, any officer or employee of the United States,or any person with whom the Secretary has entered into a contract under section 14(b) of this Act may not discloseany data or information under this Act which qualifies for exemption undersection 552(bX4) of title 5, United States Cede,or is designated as confiden- tial by the person or agency furnishing such dataor information, unless the Secretary determines that the withholding of suchdata or information is contrary to the public or national interest.

SUSPENSION, REVOCATION, AND MODIFICATION OF LICENSES

SEC. 10. (a) The Secretary may suspendor revoke any license 49 USC app issued or transferred under this Act if the Secretaryfinds that the 2609 licensee has substantially failed to comply withany requirement of this Act, the license, or any regulation issued under this Act,or that the suspension or revocation isnecessary to protect the public heaisl and safety, safety of property,or any national security interest or foreign policy interest of the United States. (b) Upon application by the licenseeor upon the Secretary's own initiative, the Secretary may modifya license issued or transferred under this Act, if the Secretary finds that the modificationwill comply with the requirements of this Act. (c) Unless otherwise specified by the Secretary,any suspension, revocation, or modification by the Secretary under this section (1) shall take effect immediately; and k2) shall continue in effect duringany review of such action under section 12 of this Act. (d) Whenever the Secretary takes any action under this section, the Secretary shall notify the licensee in writing of the Secretary's finding and the action which the Secretary has takenor proposes to take regarding such finding.

FMERGENCY ORDERS

SEC. 11. (a) 1.1e Secretary may terminate, prohibit,or suspend Prohibition immediately the launch of a launch vehicleor the operation of a 49 USC app launch site which is licensed under this Act if the Secretarydeter- 2610 mines that such launch or operation is detrimentalto the public health and safety, safety of property,or any national security interest or foreign policy interest of the United States. (b) An order terminating, prohibiting,or suspending any launch or operation of a launch site licensed by the Secretary under this Act shall take effect immediately and shall continue in effectduring any review of such order under section 12.

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98 STAT. 3060 PUBLIC LAW 98-575OCT. 30, 1984

ADMINISTRATIVE AND JUDICIAL REVIEW

49 USC app SEC. 12. (aX1) An applicant for a license and a proposed transferee 2611 of a license under this Act shall be entitled to a determination on the record after an opportunity for a hearing in accordance with section 554 of title 5, United States Code, of any decision of the Secretary under section 9(b) to issue or transfer a license with conditions or to deny the issuance or transfer of such license. tai owner or operator of a payload shall be entitled to a determination on the record after an opportunity for a hearing in accordance with section 554 of title 5, United States Code, of any decision of the Secretary under section 6(bX2) to prevent the launch of such payload. (2) A licensee under this Act shall be entitled to a determination on the record after an opportunity for a hearing in accordance with section 554 of title 5, United States Code, of any decision of the Secretary (A) under section 10 to suspend, revoke, or modify a license; or (B) under section 11 to terminate, prohibit, or susany launch or operation of a launch site licensedce by the Secretary. (b) Any final action of the Secretary under this Act to Woe, t-ansfer, deny the issuance or transfer of, suspend. revoke, or mrdify a license or to terminate, prohibit, or suspend any launch or operation of a launch site licensed by the Secretary or to prevent the launch of a payload shall be subject to judicial review as provided in chapter 7 of title 5, United States Code.

REGULATIONS

49 USC app SEC. 13. The Secretary may issue such regulations, after notice 2612 and comment in accordance with section 553 of title 5, United States Code, as may be necessary to carry out this Act.

MONIT(,RING OF ACTIVITIES OF LICENSEES

49 USC app SEC. 14. (a) Each license issued or transferred under this Act shall 2613 require the licensee (1) to allow the Secretary to place Federal officers or employees or other individuals as observes at Eny launch site used by the licensee, at any production facility or assembly site used by a contractor of the licensee in the production or assembly of a launch vehicle, or at any site where a payload is integrated with a launch vehicle, in order to monitor the activities of the licensee or contractor at such time and to such extent as the Secretary considers reasonable and necessary to determine compliance with the license or to carry out the responsibilities of the Secretary under section 6(b) of this Act; and (2) to cooperate with such observers in the performance of mon itoring functions. (b) The. Secretary may, to the extent provided in advance by appropriation Acts, enter into a contract with any person to carry out subsection (aX1) of this section.

USE OF GOVERNMENT PROPERTY

49 USC app SEC. 15. (a) The Secretary shall take such actions as may be 2614 necessary to fac...;itate and encourage the acquisition (by lease, sale, transaction in liceof sale, or otherwise) by the private sector of

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PUBLIC LAW 98-575OCT. 30, 1984 98 STAT. 3061

launch property of the United States which is excess or is otherwise not needed for public use and of launch services, including utilities, of the United States which are otherwise not needed for public use. (bX1) The amount to be paid to the United States by any person who acquires launch property or launch services, including utilities, shall be established by the agency providing the property or service, in consuitation with the Secretary. In the caw of acquisition of launch property by sale or transaction in lieu of sale, the amount of such payment shall be the fair market value. In the case of any other type of acquisition of launch property, the amount of such payment shall be an amount equal to the direct costs (inchding any specific wear and tear and damage to the property) incurred by the United States as a result of the acquisition of such launch property. In the case of any acquisition of launch services, including utilities, the amount of such payment shall be an amount equal to the direct costa (including salaries of United States civilian and contractor personnel) incurred by the United States as a result of the acquisition of such launch services. (2) The Secretary may collect any payment for launch property or launch services with the consent of the agency establishing such payment uncle---agraph (1). (3) The amount of any payment received by the United States for launch property or launch services, including utilities, under this subsection shall 'ae deposited in the general fu.id of the Treasury, and the amount of a payment for launch property (other than launch property which is excess) and launch services (including utilities) shall be credited to the appropriation from which the cost of providing such property or services was paid. (c) The Secretary may establish requirements for liability insurance, hold harmless agreements, proof of financial responsibility, and such other assurances as may be needed to protect the United States and its agencies and personnel from liability, loss, or injury as a resuh of a launch or operation of a launch site involving Government facilities or personnel.

LIABILITY INBURANCIs

Sac. 16. Each person who launches a launch vehicle or operates a 49 USC app launch site under a license issued or transferred under this Act 2615 shall have in effect liability insurance at least in such amount as is considered by the Secretary to be necessary for such launch or operation, considering the international obligations of the United States. The Secretary shall prescribe such amount after consultation with the Attorney General and other appropriate agencies.

ENFORCEMENT AUTHORITY

Sac. 17. (a) The Secretary shall enforce this Act. The Secretary 49 USC app may delegate the exercise of any enforcement authority under this 2616 Act to any officer or employee of the Department of Transportation or, with the approval of the head of another agency, any officer or employee of such agency. (b) In carrying out this section, the Secretary may (1) make investigations and inquiries, and administer to or take from any persor. an oath, affirmation, or affidavit, concerning any matter relating to enforcement of this Act; and (2) pursuant to any lawful process-

456 App. DPublic Law 98-575Oct. 30, 1984 453

98 STAT. 3062 PUBLIC LAW 98-575OCT. 30, 1984 (A) enter at any reasonable time any launch site, production facility, or assembly site of a launch vehicle, or any site where a payload is integrated with a launch vehicle, for the purpose of inspecting any object which is subject to this Act and any records or reports required by the Secretary to be made or kept under this Act; and (B) seize any such object, record, or report where there is probable cause to believe that such object, record, or report was used, is being used, or is likely to be used in violation of this Act. PROHIBITED ACTS 49 US(' app SEC. 18. It is unlawful for any person to violate a requirement of t;17 this Act, a regulation issued under this Act, or any term, condition, or restriction of any license issued or transferred by the Secretary under this Act. CIVIL PENALTIES 49 USC app SEC. 19. (a) Any person who is found by the Secretary, after notice 26IS and opportunity to be heard on the record in accordance with section 554 of title 5, United States Code, to have committed any act prohibited by section 18 shall be liable to the United States fora civil penalty of not more than $100,000 for each violation. Each day of a continuing violation shall constitute a separate violation. The amount of such civil penalty shall be assessed by the Secretary by written notice. The Secretary may compromise, modify,or remit, with or without conditions, ar.y civil penalty which is subject to imposition or which has been imposed under this section. (b) If any person fails to pay a civil penalty assessed against such person after the penalty has become final or if such person appeals an order of the Secretary and the appropriate court has entered final judgment in favor of the Secretary, the Secretary shallrecover the civil penalty assessed in any appropriate district court of the United States. (c) For purposes of conducting any hearing under this section, the Secretary may (1) issue subpoenas for the attendance and testimony of witnesses and the production of relevant papers, books, documents, and other records, (2) seek enforcement of such subpoenas in the appropriate district court of the United States, and (3) administer oaths and affirmations.

CONSULTATION Defense a'' SEC. 20. (a) The Secretary shall consult with the Secretary of national security Defense on all matters, including the issuance or transfer of each 49 USC app license, under this Act affecting national security. The Secretary of 2619 Defense shall be responsible for identifying and notifying the Secre- tary of those national security interests of the United States which are relevant to activities under this Act. (b) The Secretary shall consult with the Secretary of Stateon all matters, including the issuance or transfer of each license, under this Act affecting foreign policy. The Secretary of State shall be responsible for identifying and notifying the Secretary of those foreign policy interests or obligations of the United States whichare relevant to activities under this Act. (c) The Secretary shall consult with other agencies, as appropriate, in order to carry out the provisions of this Act.

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PUBLIC LAW 98-575OCT. 30, 1984 98 STAT. 3063

RELATIONSHIP TO OTHER LAWS AND INTERNATIONAL OBLIGATIONS

SEC. 21. (a) No State or political subdivision ofa State may edopt Prohibitions or have in effect any law, rule, regulation, standard, or order which 49 USC app is inconsistent with the provisions of this Act. Nothing in thisAct 2620 shall preclude a State or a political subdivision ofa State from adopting or putting into effect any law, rule, regulation, standard,or order which is consistent with this Act and is in addition toor more stringent than any requirement of or regulation issued under this Act. The Secretary may, and is encouraged to, consult with the States to simplify and expedite the approval ofspace launch activities. (b) A launch vehicle or payload shall not, byreason of the launching of such vehicle or payload, be considered an export forpurposes of any law controlling exports. (c) Nothing in this Act shall apply to (1) any (A) launch or operation of a launch vehicle, (B) operation of a launch site, or (C) other space activity, carried out by the United Stateson behalf of the United States; or (2) any planning or policies relating toany such launch, operation, or activity. (d) The Secretary shallcarry out this Act consistent with any obligation assumed by the United States inany treaty, convention, or agreement that may be in force between the United States and any foreign nation. In carrying out this Act, the Secretary shall consider applicable laws and requirements ofany foreign nation.

REPORT ON LEGISLATION

SEC. 22. (a) Not later than the last day of each fiscalyear ending Report after the date of enactment of this Act and before October 1, 1989, 49 USC aop the Secretary shall submit to the Committeeon Science and Tech- 2621 nology of the House of Representatives and the Committeeon Commerce, Science, and Transportation of the Senatea report describing all activities undertaken under this Act, includinga description of the process for the application for and approvalof licenses under this Act and recommendations for legislationthat may further commercial launches. (b) Not later than July 1, 1985, the Secretary shall submitto the Committee on Science and Technology of the House of Representa- tives and the Committee on Commerce, Science, and Transportation of the Senate a report which identifies Federal statutes,treaties, regulations, and policies which may havean adverse effect on commercial launches and include recommendationson appropriate changes thereto. SEVERABILITY

SEC. 23. if any provision of this Act,or the application of such 49 USC app provision to any person or circumstance, is held invalid, theremain- 2622 der of this Act and the application of such provision toany other person or circumstance .... 41 not be affected by such invalidation.

4 5 6 App. 0Public Law 98.575Oct. 30, W94 455

98 STAT. 3064 PUBLIC LAW 98-575OCT. 30, 1984

AUTHORIZED APPROPRIATIONS 49 USC app SEC. 24. There are authorized to be appropriated to the Secretary 2623 $4,000,000 for fiscal year 1985.

EFFECTIVE DATE

49 USC app2601 SEc. 25. (a) Except for section 15 and the authority to issue note regulations, this Act shall take effect 180 days after the date of enactment of this Act. (b) Section 15 shall talc& effect on the date of enactment of this Act, except that rothing in this Act shall affect any agreement, including negotiations which are substantially completed, relating to the acquisition of launch property or launch services of the United States entered into on or before the date of enactment of this Act between the United States and any private party. Regulations (c) Regulations to implement this Act shall be promulgated not later than 180 days after the date of enactment of this Act. Approved October 30, 1984.

LEGISLATIVE HISTORYH R. 3942 HOUSE REPORT No. 98-816 (Comm on Science and Technology) SENATE REPORT No. 98-656 (Comm on Commerce, Science, and Transportation) CONGRESSIONAL RECORD, Vol. 130 (1984) June 5, considered and passed House. Oct. 9, considered and passed Senate, amended; House concurred in Senate amendment. WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol 20. No. 44 (1984) Oct 30, Presidential statement. 0

459 Appendix E GLOSSARY OF ACRONYMS

ABU Avail Broadcasting Union dBw a measure of power, decibels ref- ACTS Advonced Communications Tech- erenced to 1 watt nologies Satellite Program (NASA) DELTA expendable launch vehicle AIAA American Institute of Aeronautics DFVLR Federal Republic of Germany Re- and Astronautics search and Test Establishment for AID Agency for International Devel- Aeronautics and Space Flight opment (U.S.) D.G.T. Direction General des Telecom- APPLE Ariane Passenger Payload Ex- munications periment DOC Department of Commerce ARIANE 3-stage expendable launch vehi- DOD Department of Defense cle developed by ESA DOE Department of Energy A-sat antisatellite DOI Department of Interior ASTP Apollo-Soyuz Test Project DOMSAT Domestic Communications Sat- ATLAS expendable launch vehicle ellites ATS Applications Technology Satellite DOT Department of Tra.isportation AT&T American Telephone & Telegraph EBU European Broadcasting Union Co. EDC.: EROS Data Center BLM Bureau of Land Management EEC European Economic Community (DOI) ELDO European Space Vehicle Launch- BMFT Federal Republic of Germany er Development Ministry of Research and Tech- ELV expendable launch vehicle nology ERBE Earth Radiation Budget Ex- BSS broadcasting-satellite services periment CCIR Consultative Committee on Inter- EROS Earth Resources Observation national Radio of the ITU Systems CCITT International Telegraph and Tele- ERS European Remote-Sensing Sat- phone Consultative Corniuittee of ellite the International Telecommunica- ESA European Space Agency (founded tion Union 1975) CCT computer-compatible tape (mag- ESRO European Space Research Orga- netic tape containing digital data nization in appropriate format) EUMETSAT European Meteorological Satellite CE PT Conference Europeene de Postes Organization et Telecommunications EUTELSAT European Telecommunications CFE continuous flow electrophoresis Satellite Organization CHM Common Heritage of Mankind FAA Federal Aviation Administration CITEL La Confuencia Interamericana de FAO Food and Agricultural Organiza- Telecomunicaciones tion (U.N.) CNES Centre National d'Etudes Spa- FAS Foreign Agricultural Service (of tiales, National Center for Space the DOA) Research (french) FCC Federal Communications Com- COMSAT Communications Satellite Corp. mission (U.S.) FLTSATCOM Fleet Satellite Communication COPUOS Committee on the Peaceful Uses System (Navy) of Outer Space (United Nations) FM frequency modulation COSPAR Committee on Space Research G-77 Group of 77 CRS Congressional Research Service, GARP Global Atmospheric Research Library of Congress Program (of the World Meteoro- CTA Centro Tecnico Aerospecial logical Organization) (Brazil) GATT General Agreement on Tariffs CTS Communications Technology Sat- and Trade ellite GDP gross domestic product DBS direct broadcast satellite GEO geostationary orbit 456 460 App. EGlossary of Acronyms 457

GHz gigahertz (91 billion cycles per kHz kilohertz (1,000 cycles per second) second) GMS Geostationary Meteorological Sat- LACIE Large Area Crop Inventory Ex- ellite (Japan) periment Gr:0 gross national product Landsat land remote-sensing satellite GP3 global positioning satellite (some- system times NAVSTAR/GPS-DOD) LDC less developed country GSO geostationary orbit LEO low-Earth orbit (up to approxi- HDDT-high density digital tape mately 500 km) HI AND HII Japanese expendable launch ve- MARISAT International Maritime Satellite hicles being developed by Organization NASDA MELCO Mitsubishi Electric Co. HF high frequency METEOSAT meteorological satellite devel- Hz hertz; a unit of frequency equal oped by ESA to one cycle per second MHz megahertz (106 cycles per IAA International Academy of As- second) tronautics MITI Ministry of International Trade IAEA International Atomic Energy and Industry (Japan) Agency MLA multispectral-linear array (solid IAF International Astronautical Fed- state) eration MOS Maritime Observation Satellite IBS INTELSAT Business Service (Japan) ICBM intercontinental ballistic missile MOU Memorandum of Understanding ICCP Committee on Information, Com- MPS materials processing in space puter and Communications Pol- MPTS microwave power transmission icy system ICSU International Council of Scientific MSS multispectral scanner (on Unions Landsat) IEEE Institute of Electrical and Elec- N-I & II Expendable launch vehicles de- tronics Engineers veloped by NASDA IFRB International Frequency Registra- NACA National Advisory Committee for tion Board Aeronautics IHW International Halley Watch NACP North Atlantic Consultative IISL International Institute of Space Process Law NACPWG North Atlantic Consultative Proc- ILA International Lawyers Association ess (NACP) and its working IMCO Intergovernmental Maritime Con- groups sultative Organization NAS National Academy of Sciences INMARSAT International Maritime Satellite NASA National Aeronautics and Space Organization Administration INTERSPUTNIKCommunist bloc satellite system NAS Act National Aeronautics and Space IPDC International Program for the De- Act of 1958 velopment of Communication NASDA --National Space Development IRAC Interdepartment Radio Advisory Agency (Japan) Committee NATO North Atlantic Treaty Organi- IRS Indian Remote-Sensing Satellite zation ISAS Institute for Space and Aeronauti- NEC Nippon Electric Corp. cal Sciences (Japanese) NESDIS National Environmental Satellite, ISPM International Solar Polar Mission Data, and Information Service ISRO Indian Space Research Organi- NIE0 New International Economic zation Order ITU International Telecommunication NOAA National Oceanic and Atmos- Union pheric Administration JEA Joint Endeavor Agreement N-ROSS Navy Remote Ocean Sensing Sat- (NASA) ellite

4 61 458 International Cooperation and Competition in Civilian Space Activities

NSF National Science Foundation SKYLAB U.S. space laboratory, placed in NTIA National Telecommunications orbit in the early 1970s and now and Information Agency (DOC) disintegrated NTT Nippon Telegraph & Telephone SLAR side looking airborne radar Co. (public corporation for Japa- Solaris proposed French free-flying, auto- nese communications) mated, industrial processing NWIO New World International Order station OAS Organization of American States SPACELAB space laboratory which fits into OCI Ocean Color Imager the shuttle's cargo bay and was ODA official development assistance developed as part of a coopera- OECD Organization for Economic Coop- tive project with ESA and NASA eration and Development SPAS Shuttle Pallet Satellite (a deploya- OES Bureau of Oceans and Environ- ble carrier developed by MBB mental and Scientific Affairs, De- and first flown aboard the space partment of Stare shuttle in 1983) OMB Office of Management and SPOT Systme Probetoire Observation Budget de la Terre (French land remote- ORB-85 1985 meeting of the ITU to con- sensing system) sider use of the geostationalf SPOT IMAGEsemi-private French organization orbit responsible for production, oper- OSAD U.N. Outer Space Affairs Di- ations, marketing, and sa!es of vis.on SPOT services OTA Office of Technology Assessment SSTDMA satellite switched time division OTRAG Orbital Transport and Raketen multiple access Aktiengesellschaft (German pri- SSTO single stage to orbit space vehicle vate firm) STS U.S. Space Transportation System PAM Payload Assist Module used to TAT transatl,ntic telephone, designa- boost satellites into GSO from tion given to a series of undersea the main launch vehicle communication cable facilities PRC People's Republic of China TDMA time division multiple access PRC (Space) Policy Review Committee on TDRSS Tracking and Data Relay Satellite Space established by Presidential System directive in 1978 TEA Technical Exchange Agreement PROTON expendable launch vehicle of the TITAN DOD expendable launch vehicle U.S.S.R. TM thematic mapper (on Landsat) PTT post, telephone, and telegraph TVRO television receive only administrations U.K. United Kingdom RARC Regional Administrative Radio U.N. United Nations Conference UNCSTD-U.N.Conference on Science, Technol- RESTEC Remote Sensing Technology Cen- ogy, and Development ter (Japan) UNDP U.N. Development Program RF radio frequency UNDRO U.N. Disaster Relief Organization R&D research and development UNEP U.N. Environment Program RMS-CanadarmRemote Manipulator System de- UNESCO U.N. Education Science and Cul- veloped by SPAR Aerospace for tural Organization use on the U.S. Shuttle UNGA U.N. General Assembly SAL' ST U.S.S.R. space station UNISPACE '821982 U.N. Conference on the Ex- SBS Satellite Business System ploration and Peaceful Uses of SCOUT small expendable launch vehicle Outer Space developed for NASA by LTV USDA U.S. Department of Agriculture SIG (Space) Senior Interagency Group-Space USGS U.S. Geological Survey (DOI) (within White House) USISCs U.S. international service carriers SITE Satellite Instructional Television USTTI U.S. Telecommunications Train- Experiment (India) ing Institute

462 App. EGlossary of Acronyms 459

VAN value-added networks WMO World Meteorological Organiza- VHF very high frequency tion (U.N. Agency) WARC World Administrative Radio Con- WU! Western Union International, ference (conducted by ITU) Inc., subsidiary of MCI Commu- WHO World Health Organization nications Corp. WIPO World Intellectual Property Orga- nization

46'3 SS .! 7 , - Index

ACTS See Advancea Communications Technology Satel- Brazil, 41, 120, 125, 190, 285 lite Program Bristol Aerospace Ltd., 87, 122 Advanced Communications Technology Satellite (ACTS) Pro- British Aerospace, 51, 390 gram, 13, 149, 164, 193-198, 206-207 British Telecom, 156, 160 Advanced research and development, 12-13, 193-198 BTM, 349 Advanced Television and Infrared Observation Satellite Bureau of the Budget (BoB), 2, 286 (TIROS), 253, 258-260, 312 Business data services, 167 Advanced Very-High Resolution Radiometer (AVHRR), 259, 270 Cable & Wireless, Ltd., 154, 159,186, 187 Aerojet-General, 119 Cable facilities, 14, 91, 123,149,152, 154,159,176-177, Aerojet Tech Systems, 109 185-187, 201-203 Aerospatiale, 60, 73, 272, 292 California Microwave, 166,167 Agreement Governing the Activities of States on the Moon Canada, 37, 44 and Other Celestial Bodies, 47 remote sensing activities,16,39, 266,277,292-293, Agreement on the Rescue of Astronauts, the Return of As- 306-307, 310 tronauts, and the Return of Objects Launched Into satellite communications activities, 161, 163, 179 Outer Space, 46 space station activities, 40 AID See U.S Agency for International Development space transportation activities, 122 AID/SAT, 41, 179 Canada Centre for Remote Sensing, 284 Air Force, 10, 106, 107, 109, 121 Carriers, 340 Alcatel-Thompson/Telspace, 165 Centaur G, 109, 121, 122 Apogee and Maneuvering Stage (AMS), 109 Center for Telecommunications Development, 178 AMS See Apogee Maneuvering Stage Centre National d'Etudes Spatiales (CNES), 73-74, 111, 284, Apollo-Soyuz Test Project (ASTP), 39, 350, 377 352 Arabsat, 60, 181, 190, 200 China, 39, 59, 120, 125, 261, 378 ARGOS Data Collection System, 259, 266, 312 CITEL, 171 Arcane, 5, 8, 10, 71, 75, 110-111, 116, 122, 124, 126, Citicorp, 90, 155 12R-133, 135 CNES. See Centre National d'Etudes Spatiales Ananespdce, S A ,8, 73, 87, 116, 126, 129-135, 390 Coastal Zone Color Scanner (CZCS), 303, 304, 308 ASLV launch vehicle, 120 Columbia University, 366 ASTP See Apollo-So J z Test Project Commercial competition Astro-C, 384 Federal agency role. 416 Astrotech Space Operations, 109 INTELSAT and, 6, 8, 11, 13, 91, 148, 149, 161, 180-184, AT&T, 89, 91, 104, 155, 160. 185 198.200, 202-203 AT&T Communications, 154 international trading rules, 83, 85-86 Atlas-Centaur launch vehicles, 105-106, 120, 124, 132, 138 leadership in, 405 ATS-6 communications satellite, 38, 39, 41, 179 materials processing in space, 94-95 AVHRR See Advanced Very -High Pesolution Radiometer policy options, 403-407 political transition factors, 95 Ball Aerospace, 357 remote sensing, 92-94 Ball Bros ,389, 390 satellite communications, services, 89-92, 180-188 Battelle, 124, 12,"., 127 satellite equipment, 188-193, 205-206 Beggs, Jame, M ,130, 135 space sciences equipment, 389-390 Bilateral cooperation, 28 space transportation, 86-89, 125-136, 141-143 developing countries, 59, 179-180 U.S. policy, 401-402 materials processing in space, 352 See also Competition; Market structure f meteorological remote sensing, 264-265 Ieroal cooperation, 60-61 National AeJnautics and Space Administration activities, commercialization 36, 39-40 Federal agency coordination, 415-416 satellite communications, 169-170, 179-180, 203, 204 land remote sensing, 14-15, 254, 257-258, 283, 284, 286, space transportation activities, 119-120, 138 288, 292-295, 299-301, 319-322 trade related, 11, 85, 89, 190 materials processing in space, 16, 17, 337, 343-347, Biorack, 349 354-360, 362, 364 Black Brant sounding rocket, 122 satellite communications advanced techology, 193-198 BoB See Bureau of the Budget. space transportation, 8-10, 103, 105-107, 109, 111, 116, Boeing, 107, 121, 389, 390 117, 119-122 Brasilsat, 190 Commercial Space Launch Act (Public Law 98-575), 10

463 465 464 International Cooperation and Competition in Civilian Space Activities

Committee on Earth Observation Satellites, 322 Soviet program, 7, 28, 39, 41-43, 45-47, 173, 266, 352, Committee on Scientific and Technological Aspects of 377-378, 381-384, 392-393 Materials Processing in Space (STAMDS) 347 space science, 18-19, 61, 373-373, 375, 377-386 Committee c n the Peaceful Uses of Outer Space (COPUOS), space transportation, 137-138 41, 4z-47, 51, 52-53, 55-57, 366 U S. program, 6-7, 33, 35-41, 53-58, 60, 70 Communications Research Center (CRC), 37 See also specific organizations. Communications Satellite Act of 1962 147, 148, 177, 417 COPUOS See Committee on the Peaceful Uses of Outer Communications Satellite Corp See COMSAT Space. Communicalions Technology Satellite (CTS), 37, 179 Cosmos satellites, 377, 378 Competition COSPAS/SARSAT, 16, 39, 259, 266, 277, 316 cooperation and, 60-61, 413-414 CRC. See Communications Research Center description of, 3, 5-6 Credit subsidies, 85-86, 191-192 economic, 68-70, 95 Cryogenic fuels, 112 European Space Agency program, 67, 70-73 Crystals, 338, 355-356 Federal agency coordination, 416 CTS See Communications Technology Satellite. French program, 73-75 Customer-premises Earth stations, 166, 167-168 government role in, bi-65 Cygnus, 182 Japanese program, 77-83 CZCS. See Coastal Zone Color Scanner land remote sensing, 14, 301, 319-322 materials processing in space, 16, 17, 94-95, 337, 363-365 D'Allest, Frederic, 130 meteorological remote sensing, 273, 275, 317, 319 Data Collection System (DCS), 259-261 military, 68, 69 DBS. See Direct broadcast satellites. overview, 26-27 DCS See Data Collection System. policy options, 403-408 Defense Meteorological Satellite Program (DMSP), 315.316 political, 66-69, 95 Delta launch vehicles, 104-105, 119-121, 124, 132, 138 remote sensing, 92-94 Delta Transfer Stage, 109, 121 satellite communications, 5-6, 10-12, 89-92 149, 157-161, Department of Agriculture, 20, 270, 286, 418 167, 180-193 Department of Commerce, 15, 20, 21, 253, 288, 290-291, satellite equipment, 11 12, 162, 164, 167-168, 188-193, 418 205-206 Department of Defense (DOD), 35, 122, 137, 315-316 space science, 19, 373-375, 386-390 Department of Interior, 20, 286, 418 space transportation applications, 8, 10, 86-89 Departrnent of State, 20, 21, 41, 47, 91, 410-411, 416, 417, U S policy, 21, 401-403 419 West German program, 75-77 Department of Transportation (DOT), 20, 21, 126, 418-419 See also Commercial competition, Market structure Developing countries COMSAT, 49, 51, 89, 148, 149, 154, 155, 168, 185, 193, geostationary orbit allocation issue, 13, 48-49, 174-176 200-201, 273 land remote sensing issues, 15, 293-294, 323 COMSAT General Corp, 50, 51 policy r ptions toward, 7, 411-412 Conestoga launch vehicles 121 remote sensing activities, 15, 16, 41, 52, 273 Continental Telephone, 155 satellite communications activities, 50, 150, 170-172, Convention on International Liability for Damage Caused 177-180, 184, 208-209 by Space Objects, 46, 47 satellite equipment trade, 86, 167, 191 Convention on Registration of Objects Launched Into Outer space science activities, 19, 376, 386, 390-391 Space, 46-47 space technology development, 28, 40-41, 58-60 Cooperation U N activities, 5, 55, 56 competition and, 60-61, 413-414 Direct broadcast satellites (DBS), 55, 73, 123 European Space Agency program, 43-44 OMSP See Defense Meteorological Satellite Program Federal agency coordination, 416-417 DOD. See Department of Defense. issues in, 52-61 Dolphin launch vehicles, 113, 121 and remote sensing, 38, 294, 322-323 Dormer, 349, 351 materials processing in space, 16, 17, 61, 352, 353, 35t, DOT. See Department of Transportation 360-363, 365-367 Dupont, 343, 357 meteorological remote sensing, 38, 43, 51-52, 61, :b4, 266, 275, 277-278, 315-317 Earth Radiation Budget Experiment (ERBE), 260 ocean remote sensing activities, 16, 61, 303, 30 ", 310, Ea th remote sensing. See Land remotesensing. 313-314, 323-3L4 Earth Resources Satellite Data Analysis Center (ERS-DAC),81 overview, 28 Earth Resources Satellites (ERS), 285, 305, 310, 313 policy options, 21, 408-413 Earth stations, 164-168, 178, 179, 185, 191, 194 satellite communications, 13-14, 47-49, 148, 150,168-180 Economic competition, 68-70, 95

466 Index 465

ECS. See European Communication,ateilites Fiber optics, 14, 91, 123, 152, 154, 159, 176-177, 186, Education and training, 38-39, 376-37, 201-203 EEC. See European Economic Community. Finance Satellite, 182 Eisenhower, Dwight D., 35, 36 first Materials Processing Test (FMPT), 352-353 ELDO. See European Launcher Development Organ zatron Fisheries appl.cations, 304, 312 Electromagnetic services, 193 Fluid Physics Modttle, 349 Electrophoresis, 354-355 FMPT. See First Materials Processing Test. ELV. See Expendable launch vehicles. Fokker, 349 EOSAT Corp., 15, 288, 290, 291, 319-320 Ford Aerospace, 60, 162-163 Equatorial Communications Co., 166, 168 Ford Aerospace & Communications, 190 ERBE. See Earth Radiation Budget Experiment. France EROS Data Center, Sioux Falls, SD, 41, 230. 285, 298, 299 land remote sensing acti,4les, 14, 283-284 ERS. See Earth Resources Satellites. materals processing in spat.e activities, 352 ERS-DAC. See Earth Resources Satellite Data Analybis Center. meteorological satellite activities, 16, 39, 266, 277 ERSO. 5- e European Space Research Organization, ocean remc,te sens.ng, 303 ESA. See European Space Agency. satellite communications activities, 72, 73, 159, 163, 190, EURECA (European Rev ievable Carrier), 348, 352, 358, 360 194 European Communications Satellites (ECS), 72 Soviet cooperation, 41, 381-382 European Economic Community (EEC), 133, 167 space program, 5, 66, 67, 73-75 European Launcher Development Organization (ELDO), 43, space science activities, 19, 375, 381-382 125 70 space transportation activities, 67, 70, 71, See al.;o European Space Agency Free-flyers, 341, 351-353, 358-359 European Retrievable Carrier. See EURECA Frequency reuse techniques, 194 European Space Agency (ESA), 5, 27 Fujitsu, 168 compet.tiv-: activities, 67, 70-73 cooperative activities, 28, 36-38, 43-44, 375, 381 G-77. See Group of 77. developing country assistance, 59 GaAs. See Gallium - arsenide crystals. formation of, 70-71 Gaganri, Yuri, 66 materials processing in space activities, 12, 76-77, 337, Gallium-arsenide (GaAs) crystals, 355-356 347-349, 358, 360 GARP. See Global Atmospheric Research Program. meteorological remote sensiag ari,ties, 261, 272 GAS canisters. See Get-away special canisters. ocean remote sensing activities, 16, Mr, 306, 310,313, GATT codes, 11, 85, 96, 190 314 General Dynamics, 10, 87, 105-106, 109, 120, 171 satellite communications activities, 77 .t. 163, 194 General Electric Corp., 90, 15s 270, 292 space science activities, 19, 375, 373, t8, 385, 387 Geostationary Op-rational Meteorological Satellite (GOMS), space transportation program, 67,10-111, 116, 122, 264 128-134 Geostationary orbit allocation, 13, 48-40, 173-177 European Space Research Organization (ERSO), 43, 67, 76 Geostationary Orbiting Eriviro, rental Satellite (GOES) sys- See also European Space Agency tem, 253, 258, 260, 271.172, 275, 317 Eutelsat, 166, 181, 200 Get-aw-v special (GAS) canisters, 340, 351 Ex-Im Bank. SLe U.S. Export-Import Bank. Globaltmospheric Research Program (GARP), 52, 269 Expendable Launch Vehicle Commercialization Act, (.OES S:,e2M. See Geos: tionary Orbiting Environmental 418-419 Satellite system. Expendable launch vex idles (ELVs). See Space tran-r,Jr- GOMS. See Geostationary Operational Meteorological tation. 7atellite. Export controls, 192-193 Government competitors Export subsidies, 35-86, '91-192 meteorological data, 275 space transportation. 87, 138-139, 142, 143 Facilities regulation, 184-1b7, 202-203 r_Iovernment subsidies Fairchild, 167, 292 materials processing in space, 364-365 Fairchild Industries, 341, 344, 345, 357-358, 360 policy issues, 401-402 FCC. See Federal Communications Commission. policy options, 404-407 Federal agency coordination, 20-21, 415-417 remote sensing, 93, 94, 291, 320-321 Federal agency responsibility, 414, 417-419 satellite communications, 205, 206 Federal Communications Commission (FCC) space transportation, 130-134, 141 satellite communications activities, 13-14, 91-92, 123, 147, Ground-based projects, 38 153, 154, 161, 181-183, 185 186, 200-201, 203 Ground-based sensors, 261 space activities role, 20, 21, 410, .,17 Ground station: and receivers, 272-273, 292-293 Federal Republic of Germany. See West Germany. Group of 77 (G-77), 55, 57 59

467 466 International Cooperation and Competitionin Civilian space Activities

Grumman, 389 Intergovernmental Maritime Consultative Organization GTE, 89, 154, 1 167 (IMCO), 50 GTI, 344-346, 357 International Astronautical Federation, 42 Guidance systems, 113 International Council of Scientific Unions (ICSU), 52 International Halley Watch, 18, 39, 40, 383-384 Harris Corp., 16u International Maritime Satellite Organization. See INMARSAT. Hermes, 110, 352 Ir .ernational Meteorological Organization (IMO), 51See High-Resolution Infrired Sounder (HRIS 2), 270 also World Meteorological Organization Hitchhiker, 340, 358 International Microgravity Lab (IML), 17, 362, 365 Honeywe:;, Electro-optical Division, 343 International organizations politicization, 68, 150, 170-173, House Committee on Science and Technology,290 207-208. 411-412 House Subcommittee on Natural Resources, Agriculture International Polar-Orbiting Meteorological Satellite(IPOMS) Research, and Environment, 274 group, 316 HRIS-2 See High-Resolution Infrared Sounder International Solar Polar Micsion (ISPM), 18-19, 384 H series launch vehicles, 119-120 International Telecommunications Satellite Organization. Hughes, 81, 114, 162, 389 See INTELSAT. Hughes Aircraft Corp , 13, 51, 162, 190, 193, 196, 270, 272, International Telecommunication Union (ITU), 7, 13-14, 292 47-49, 57-58, 170-171, 178, 207-208 Hughes Communications Galaxy, Inc., 195-196 ITU Region 2 Regional Administrative Radio Conferences, Hybrid rockets, 11: 171 International trade IBM, 89, 155, 165 materials processing in space and, 365 ICSU. See International Council of Scientific Unions policy options, 405, 407, 408 IMCO. See Intergovernmental MaritimeConsultative Or- satellite equipment, 83, 85-86, 89, 95, 188-193, 205.206 ganization. U.S. policy, 401-402 IML. See International Microgravity Lab International trading rules satellite services, 86, 89, 149, IMO See International Meteorological ni,2tion 180-188 INCO Research & Development Center,Inc., 357 lntersputnik, 42, 67-68 Independent Commission for Worldwide Telecommunica- IPOMS. See International Polar-Orbiting Meteorological tions Developmeri, 178 Satellite group India IRAS See Infrared Astronomical Satellite. developing ccuntry assistance, 59 IRIS. See Italian Research Interim Stage. land remote sensing, 284-225 IRS, 284-285 meteorolo6ical remote sensing, 261 ISAS. See Institute of Space and Aeronautical Sciences. satellite communications activities, 38, 58 ISPM. See International Solar Power Mission. Soviet cooperation, 28, 41, 382 ITA See Instrumentation Technology Associates, Inc. space science activities 382 Italian Research Interim Stage (IRIS), 122 space transportation activities, 120, 125 Italy, 72, 73, 122, 163, 194 Indonesia, 41 ITT, 89, 155, 166, 192 Inertial guidance systems, 114 ITU. See International Telecommunication Union. Inertial uppei stage (IUS), 107, 109, 121, 122 IUS See Inertial upper stage In .r.2d Astronomical Satellite (IRAS), 18,382-383 INMARSAT (International Maritime SatelliteOrganization), 6-8, 50-51, 117, 124, 172-173, 192 Japan Insat 1, 261 competitive activities, 5, 85 Institute of Space and Aeronautical Sciences (ISAS),117, developing country assistance, 59 375, 388 lard remote sensing activities, 81, 285 Instrumentation Technology Associates, Inc (ITA), 357 materials processing in space activities, 17, 352.353,365 INTELSAT (International Telecommunications Satellite Or- meteorologic 31 remote sensing activities, 78, 80, 261, ganization) 272 ocean remote sensing activities, 16, 81, 305, 314 competition and, 6, 8, 11, 13, 9 I, 148, 149, 161, 180-184, satellite communications livities, 11, 80-81, 160, 162, 198-200, 202-203 163, 165, 167, 168, 190-191, 194, 205 developing country assistance, 177-178 space program, 5, 66, 77-83 satellite operations, 114, 123, 154, 1b2 -163,167 space science activities, 19, 28, 78, 375, 383, 384, 38," 'ttill U.S. participation issues, 11, 13, 172, 173 space station activities, 40 INTELSAT Agreement of 19'3, 147, 180, 181 space transportation, 8, 80, 117, 119-120, 125, 138 Intercosmos, 42-43, 67-68, 381 Japanese National Research Institute for Metak, 37 Intergovernmental Agreement on Cooperationin the Explo- JEA. cee Joint Endeavor Agreements. ration and Use of Outer Space for Peaceful Purposes, John Deere & Co., 343, 356 377, 392 Johnson, Lyndon B., 35 466 Index 467

Joint Endeavor Agreements (JEA), b, 343-346, 354-355, Lodge, Henry Cabot, 45 357-358, 364 Long March launch vehicles, 120 LPM See Liquid Propulsion Module Ka-bana systems, 12-13, 81, 175, 176, 193-197 Kaiser-Threde, 351 M/A Com, 166 KDD. See Kokusai Denshin Denwa MacDonald Detwiler Association, Inc , 273, 292-293 Kennedy, John F , 66 McCormack, Jc.ln W., 35 Kodak/Fairchild, 288, 290 McDonnell Douglas, 89, 94, 105, 107, 109, 119, 155, 344 Kokusai Denshin Denwa (KDD), 156 McDonnell Douglas Astronautics Co (MDAC), 121, 344, Kosmos, 307 346, 354-355, 358, 360 Maitland Commission, 178 Lambda rockets, 117 Marec satellites, 71, 72 Land remote sensing Marine Observation Satellite (MOS-1), 305 applications, 258, 301 Mamie transportation applications, 310 commercial cooperation, 60-61 Market structure commercialization, 14, 15, 254, 257-258 -83, 284, 286, Earth stations, 164-167 288, 292-295, 299-301, 319-322 land remote sensing, 93-94, 285, 292-295, 299-301 competition, 14, 301, 319-322 materials processing in space, 94-95, 360, 362 cooperation, 38, 294, 322-323 meteorological remote sensing, 93, 270 data products and uses, 285, 293-2 5, 299-301 satellitecommunicationsservices,89-92,147-148, development of, 278 153-160 equipment market, 292-293, 323 satellite equipment, 162-163 foreign receiving stations, 280, 282 space science rela'ed industries, 389-390 foreign systems, 282-285 space transportation, 86-89 international role, 291-292 Martin Marietta, 10, 87, 1t.6, 109, 121, 344, 345 market structure, 93-94, 285, 293-295, 299-301 Materials processing in space (MPS) overview, 14-15, 253 application potential, 338, 354-360 policy options, 15, 319-323 rommercialization, 16, 17, .337, 343-347, 354-360, 362, private sector, 14-15, 93, 254, 257, 283, 284, 286, 288, 364 292-294, 301, 319-322 competition, 16, 17, 94-95, 33', 363-365 research and development, 280, 290, 294, 3G1, 321 cooperative activities, 16, 17, 61, 152, 353, 358, 360-363, U S policy, 286, 288-291 365-367 U S system, 253, 278-280 European Space Agency activities,17,76-77,337, Land Remote Sensing Commercialization Act of 1984 (Public 347-349, 358, 360 Law 98-365), 15, 257, 282, 289-290, 294, 121, 418 Federal agency responsibility, 4'9 Landsat applications, 258 France, 352 I andsat Ground Station Operators Working Groi os, 322 Japan, 17, 352-353, 365 .andsat system, 28, 41, 52, 94, 308, 309 launch service demand, 124 data products, 285, 293-295, 299-301 leadership role, 362 description, 253, 278-280 market structure, 94-95, 360, 362 Federal agency coordination, 415 NASA research, 16, 17, 94, 337-344, 347, 348, 352-358, foreign receiving stations, 38, 280, 212 360-366, 419 international role, 291-292 overview, 16-17, 337 issues, 293-301 policy options, 362-365 overview, 14-15 private sector, 337, 343-347, 354-358, 363-365 private sector transfer, 93, 254, 257, 286, 268, 293-294, research and development, 16-17, 76-77, 337 319-322 scientific community involvement, 347, 363-364, 366 satellite 4 repair, 322 Soviet Union, 17, 353-354 Launch vehicles. See Space transportation West German activities, 76-77, 337, 341, 348-352, 358, Leadership competition 361 cooperative activities and, 409 Materials Sciences Double Rack, 349 Federal agency coordination, 414-419 Matra, 73, 292, 349, 390 materials in space processing, 362 Matsushita, 168 policy options, 404-405 MAUS, 351, 358, 361 space science, 387. 393 MBB. See Messerschmitt-Boelkow-Blohm GmbH. space transportation, 136, 138, 141 MBB/ERNO, 341, 348, 349, 351-352, 358, 361 U.S. policy, 402 MCI, 89, 154, 155 Leasecraft, 341, 345, 358, 360 MDAC. See McDonnell Douglas Astronautics Co. Life sciences, 372, 377, 378, 387, 392 MEPHISTO (Materiel pour l'Etude des Phenomenes Interes- Liquid Propulsion Module (LPM), 109 sant de la Solidification sur Terre et en Orbite), 352 Liquid rockets, 112-114 Merrill Lynch, 90, 155

4 69 468 International Cooperation and Competition in Civilian Space Activities

MESA, 390 NASDA. See National Space Development Agency. Messerschmitt-Boelkow-Blohm Grri;r1 (MBB), 273, 283, 358 National Advisory Committee for Aeronautics, 35. See also METEOR-2, 261 National Aeronautics and Space Administration. Meteor° logit.al remote SE nsirg National Aeronautics and Space Act of 1958 (NAS Act), applications, 257-258 20-21, 25, 33, 35-36, 141, 397, 399, 414 competition, 273, 275, 317, 319 National Aeronautics and Space Administration (NASA) cooperative activities, 38, 43, 51-52, 61, 264, 266, 275, cooperative activities, 7, 21, 28, 33, 36-40, 44, 137, 352, 277-278, ;15-317 353, 361, 366 data products and service, 266, 269-270, 274 land remote sensing activities, 14, 15, 278, 280, 286-288, foreign systems, 260-261, 264 301, 321, 418 Japan, 78, 80, 261, 272 materials processing in spice activities,16,17, 94, market structure, 93, 270, 272-273 337-344, 347, 348, 152-358, 360-366, 419 ocean measurements, 305 meteorological remote sensing activities, 273 overview, 15-16 ocean remote sensing activities, 16, 302-304, 307, 324 policy options, 16, 315-319 private sector cooperation, 6 private sector, 15, 273-275 satellite communications activities, 12-13, 149-150, 163, research and development, 258, 260 164, 174, 193-198, 417, 418 servioe level issue, 275, 277 space activities role, 20-21, 397, 410, 414-41 U.S. systems, 253, 258 space sc....Nice, 371, 372, 376, 378, 380, 384, 385 Meteor satellites, 43 space transportation activities, 8-10, 87, 88, 103-109, Meteosat-2, 261, 272 120-122, 126, 128-136, 138-139, 142, 143, 418 Metsats (meteorological satellites) fee Meteorological re- National Aeronautics and Space Council (NASC), 399 mote sensing. National Commission on Space, 19-20, 400 Microgravity Research Associates (MRA), 344-346, 355 National Oceanic and Atmospheric Administratior. (NOM) Mic, .gravity Science and Applications (MSA) Division, 338 land remote sensing activities, 14, 15, 253, 280, 28', 295, Mic.owave sounders, 253, 266, 309 7,31, 321, 322, 418 M' v competition, 68, 69 meteorological remote sensing activities, 93, 253, 258, t ...on-perulier support st .icture (MPESS), 340 264, 266, 270, 273-275, 277, 316 Mitsubishi /COMSAT, 168 ocean remote sensing activities, 16, 304, 305, 315, 324 Mitsubishi Electric, 190 remote sensing systems, 253 Mitsubishi Industries, 119 space activities role, 7, 28, 33, 410 Mitterrand, Francois, 73 National Oceanic Satellite System (NOSS), 302 MLA. See Multispectral linear array National Research Council, 347 Modular Optoelectronic Multispectral Scanner (MOMS), 283 National Research Council of Canada, 107 Molniya satellites, 42 National Space Development Agency (NASDA), Japan, 28, MOMS See Modular Optoelectronic Multispectral Scanner. 117, 119 MOS-1. See Marine Observation Satellite. National Weather Service (NWS), 269-270 Motorola, 193 Na%,y Remote Ocean Sensing Satellite (NROSS), 16, 303, MPESS Sex, Mission-peculiar support structure 305, 313 MPS See Materials processing in space. NEC. See Nippon Electric Co. MRA See Microgravity Research Associates Netherlands, 37-38, 383 MSA Division See Microgravity Science and Appl'cations Netherionds' Delft Technical Institute, 37-38 Division Nimbus satellites, 303, 304, 308 Mu launchers, 117, 119 Nippon Electric Co. (NEC), 80-81, 165, 167, 168, i91 Multiiateral cooperation Nippon Telegraph & Telephone (NTT), 80, 81, 85, 190, 191 developing country assistance, 59-60, 177-179 Nissan Motors, 117 meteorological remote sensing, 264-265 NOAA See National Oceanic and Atmospheric Adminis- satellite communications related, 177-179, 204 tration. Soviet, 41-43 NOAA satellites, 258, 259, 272, 309 trade rules, 8: 86, 89 North Atlantic Consultative Process (NACP), 173, 186 See also specific organizations NOSS. See National Oceanic Satellite System. Multilateral coordination NROSS. See Navy Remote Ocean Sensing Satellite. land remote sensing, 322-323 N series launch vehicles, 119 Multispectral camera, 43 NTT. See Nippon Ti.iegraph & Telephone. Multispectral linear array (MLA), 280, 294 NWS. See National Weather Service.

NACP. See North Atlantic Consultative Process. NASA See National Aeronautics and Space Administration Ooerth Society, 351 NAS Act. See National Aeronautics and Space Act. Ocean color data, 304, 308, 312 NASC See National Aeronautics and Space Council. Ocean Color Imager (OCI), 260

47 Index 469

Ocean remote sensr land remote sensing, 286, 288-291 applications, 258, 304, 310-312 leadership maintenance and, 414-419 cooperative activities, 16, 61, 303, 307, 310, 313-314, problems, 397-398 323-324 regulatory framework, 397 data potential, 307-310 remote sensing, 254, 257 foreign systems, 305-307 satellite communications, 147, 149-150, 168-169 issues, 312-314 space transportation, 138-139 overview, 16, 253-254 Policy options policy options, 323-324 competition, 403-408 research and development, 312-313, 324 cooperation, 21, 408-4 i1 U S systems, 302-305 Federal agency coordination, 20-21, 415-417 00 See Ocean Color Imager Federal agency responsibilities, 414, 417-419 °defies, Inc , 292 land remote sensing, 15, 319-323 OECD See Organization for Economic Cooperation and De- materials processing in space, 362-365 velopment meteorological remote sensing, 16, 315-319 Office of Commercial Programs, 337 ocean remote sensing, 323-324 Office of Management and Budget (OMB), 134, 140, 193, satellite communications, 198-210 280, 286, 291, 298, 320, 399 space transportation, 127-128, 140-143 Office of Space and Terrestrial Applications, 361 Political competition, 66-69, 95 Office of the U S. Trade Representative, 131 Post, telephone, and telegraph agencies (PTTs), 11, 85, 90, Offshore mining applications, 310 91, 148, 155-15G, 159, 161, 163, 167, 187-188, 190 Oil and gas exploration and extraction applications, 310 Preeminence. See Leadership competition. OMB. See Office of Managemelt and Budget Private Export Funding Corp. ( PEFCO), 133 ORB'85, 13, 48-49, 173 Private sector Orbital Sciences Corp., 87, 109 Federal agency coordination, 21 Organization for Economic Cooperation and Development land remote sensing activities, 14-15, 93, 254, 257, 283, (OECD), 85, 86, 97 -93, 173, 191 284, 288, 290-294, 301, 319-322 OECD Arrangement on Officially Supported Export Credit, materials processing in space activities, 337, 343-347, 85, 86, 97-98, 191 354-358, 363-365 OECD Understanding on Export :redits for Ground Satel- meteorological remote sensing activities, 15, 273-275 lite Communication Stations, 1,91 ocean remote sensing activities, 16 Orion Satellite Corp., 154,82,84 research and development, 6, 194-195, 197, 206, 207, Ortho Pharmaceutical, 94, 355 401-402, 406, 407 OSAD See Outer coace Affairs Division. satellite communications activities, 6, 89, 90, 149, 161, OTRAG (Orbital' ansport-und-Raketen Aktiengesellschaft), 180-184, 198-200 87, 122 space activity role, 6, 27, 65 Outer Space Affairs Division (OSAD), 55 space transportation activities, 8-10, 120-123, 125-126, 129, 131, 132, 136, 138-139, 141-143 Page, 166 U.S. treaty obligations and, 47 Palapa, 181 Propulsion systems, 172-173 PAM. See Payload assist modules Proton launchers, 116-117 Pan American Satellite, 182 PSLV launch vehicles, 120 Payload assist modules (PAM), 107, 109, 121, 122 PTis. See Post, telephone, and telegraph agencies. Peace-Sat Network, 41 PEFCO. See Private Export Funding Corp. Quistgaard, Erik, 132 People's Republic of China See China Perkin-Elmer, 390 Radarsat, 306-307, 310 Peru, 41 R&D. See Research and development. Pharmaceuticals, 354-356 RCA, 89, 154, 155, 162-163, 166, 182, 193, 292 Philippines, 41 RLA Astro-Electronics, 270 Physics and astronomy, 371, 372 Reagan, Ronald, 8, 125-126, 137-138, 141-142, 183, 274, Planetary exploration, 371-372, 377, 387, 393 384-385 Polar-orbiting meteorological systems, 253, 258, 259, 272, Remote sensing 275-277, 315-317 applications, 257-258 Polar-orbiting platform, 314, 324 commercial cooperation, 60-61 Policy competition, 92-94 competition, 21, 400-408 developing countries, 15, 16, 41, 52, 273 cooperation-competition relationship, 413-414 Federal agency responsibility, 418 developing country assistance, 7, 411-412 foreign ground stations, 38 goals and objectives, 19-20. 399-400 Japan, 81

471 470 International Cooperation and Competition in Civilian Space Activities

market structure, 92-94 space science, 389-390 policy, 254, 25' trade issues, 188-193, 205-206 Soviet, 43 Satellite Instructional Television Experiment (SITE), 38, 41, 58 systems, 2.;3-254 Satellite switched time d'vision multiple access (SSTDMA), See also Land remote sensing, Meteorological remote 194 sensing, Ocean remote sensing SBUR. See Solar Backscatter Ultraviolet Radiometer Research and development (R&D) Scanning spot beams, 194, 196 Japan, 78 Science Working Groups, 356 land remote sensing, 280, 290, 294, 301, 321 Scientific Atlanta, 166, 167 materials processing in space, 16-17, 76-77, 337 Sea ice data, 308-310 meteorological remote sensing, 258, 260 Search and Rescue Satellite System. See COSPAS/SARSAT. ocean remote sensing, 312-313, 324 Sea surface temperature (SST) data, 276, 307-308, 312 policy options, 404, 406, 407, 415 Seasat, 16, 302, 303, 310 private sector, 6, 194-195, 197, 206, 207, 401-402, 406, SEM. See Space Environment Monitor. 407 Senate Committee on Commerce, Science, and Transpor- remote sensing, 15 tation, 290 satellite communications, 149-150, 163, 193-198, 206-207 Senate Committee on Foreign Relations, 39 satellite equipment, 163-164, 206-207 Senate Subcommittee on Science, Technology, and Space, trade subsidy factors, tb, 401-403 274 U S policy, 402-403 Senior interagency Group for Space (SIG space), 19, 399, See also Space science 418 Rockwell International, 106, 126-127, 134 Sensor development, 280, 283, 324 Rural Satellite Program, 41 SEP, 73, 273, 292 Shell Oil, 90, 155 SACI, 41 Shuttle, 8, 122, 124 Salyut space ' tation, 42, 43, 352, 353, 381 cooperative activities, 33, 44, 70, 137 Sapwood-A launchers, 116 description, 106, 126 SAR. See Synthetic Aperture Radar materials processing in space activities, 339, 340, 348, 357, Satellite communications 361-362, 364 commercial cooperation, 60 policy options, 10, 140-143 commercialization, 193-198 prices, 9-10, 128-136 competition,5-6,10-12, 89-92,149,157-161,167, upper stages, 107, 109 180-193 use policy, 138-139 cooperation, 13-14, 47-49, 148, 150, 168-180 Shuttle Pallet Satellite (SPAS), 341, 351-352, 358, 361 demand for 11, 150-153 SIG space. See Senior Interagency Group for Space. developing ccontry assistance, 50, 150, 170-172, 177-180, SITE. See Satellite Instructional Television Experiment. 184, 208-209 SLC. See Submarine Lightwave Cable Co. domestic market competition, 157-160 SLV-3 launch vehicle, 120 facilities regulation issues, 184-1d7, 201-203 Solar Backscatter Ultraviolet Radiometer (SBUR), 260 Federal agency responsibilities, 417-418 Solaris, 352 foreign market competition, 160-161 Solid rockets, 112-114 Japan, 11, 80-81, 156, 160, 162, 163, 165, 167, 168, Sonda launchehicles, 120 190-191, 194 205 Sounding rockets, 17, 38, 117, 122, 349 launch service demand, 122-124 Soviet Union market structure, 89-92, 147-148, 153-160 competitive activities, 6, 66-68 po' issues, 147, 149-150, 168-169 cooperative activities, 7, 28, 39, 41-43, 45-47, 173, 266, poilLy .options, 198-210 352, 377-378, 381-384, 392-393 private sector activities, 6, 89, 90, 149, 161, 180-184, materials processing in space activities, 17, 352-354 198-200 meteorological satellite activities, 16, 41, 43, 261, 264, 266 research and development, 12-13, 149-150, 163, 193-198, ocean remote sensing, 302, 307 206-207 remote sensing activities, 43 trade issues, 180-188 satellite communications activities, 42, 173 U.S. providers, 187-188, 203-204 space program, 65, 66-63 Satellite equipment space science activities,19, 41, 373-375, 377-378, competition. 11-12, 162, 164, 167-168, 188-193, 205.206 181-384, 386, 387, 392-393 land remote sensing, 292-193, 321 space transportation, 116-117 market structures, 16:1 63 Space America, 288 meteorological satellites, 270-273 Spaceco Ltd., 344, 345 research and development, 163-164, 206-207 Space Environment Monitor (SEM), 259, 260

472 Index 471

Space expenditures, 65-66, 73, 75, 81 STAMPS See Committee on Scientific and Technological Spacelab, 5, 28, 44, 71, 341, 348, 349, 351, 352, 361, 362, Aspects of Materials Processing in Space 364, 409 Starstruck, Inc , 87, 113, 121 Space science State of Alaska Medical Network, 41 competition, 19, 373-375, 386-390 Statsionar satellites, 42 cooperation, 18-19, 61, 372-373, 175, 377-386 Stenlieck Reassurance Co., Inc , 283 future role, 391-392 STG See Space Task Group issues, 375-377 Stockman, David, 135 leadership in, 387, 393 Stratospheric Sounding Unit, 258, 266 overview, 371-372 Submarine Lightwave Cable Co (SLC), 154, 186 policy options, 392-393 Subsidized credit, 85-86, 191-192 programs, 382-384 Support systems, 113-114 Space Services Inc(SSI), 87, 121 Sweden, 349, 351, 390 Space Shuttle. See Shuttle Synthetic Aperture Radar (SAR), 309-310 Space station program, 40, 314, 343-344, 353, 409 Systeme Probetoire d'Observa irn de la Terre (SPOT) See Space Task Group (STG), 137 SPOT Space telescope (ST), 384, 390 Space scope Science Institute, 384 Tanks, 113-114 Spar .,isportation TO. See Transpace Carriers, Inc. ,ne program, 110-111, 116 TEA See Technical Exchange Agreements. buyers, 122-124 Technical Exchange Agreements (TEA), 343, 356-357 commercialization, 8-10, 103, 105-107, 109, 111, 116, Technology transfer 117, 119-122 cooperation and competition risks, 60 competition, 8, 10, 86-89, 125-136 developing counties and, 28 cooperative activities, 137-138 materials processing in space, 61 demand for, 123-124, 126-128 private sector and, 415 Federal agency responsibility, 20, 21, 418-419 remote sensing, 273, 277, 278, 317 Japan, 19, 28, 78, 375, 383, 384, 387 satellite communications, 173 launch vehicle technology, 112-114 space science, 393 leadership in, 136, 138, 141 Telecommunications. Ste Satellite communications market structure, 86-89 Teledyne Brown Engineering, 340, 357 National Aeronautics and Space Administration launch Telefunken, 390 vehicles, 103-109 Telesat Canada, 154 policy options, 127-128, 140-143 Television receive-only (TVRO) Earth stations, 166, 168 potential government sellers, 116-120 Texas Instruments, 90, 155 potential private sellers, 120-122 TEXUS, 349, 351 pricing issue, 129-134 Thant, U, 46 private sector, 8-10, 120-123, 125-126, 129, 131, 132, 136, Thomson-CSF, 73 138-139, 141-143 3M Corp., 344, 345 trade rules, 89 TIROS. See Advanced Television and Infrared Observation U S. policy, 138-139 Satellite. Space transportation competition TIROS Operational Vertical Sounder (TOVS), 259 demand, 123-124, 126-128 Titan launch vehicles, 10, 106, 113, 121, 138 development of, 125-126 TOPEX/POSEIDON, 303 effects of, 134-136 TOS. See Transfer Orbit Stage. nature of, 128-134 TOVS. See TIROS Operational Vertical Sounder. Space WARC. See World Administrative Radio Conference. Transatla.itic systems, 11, 13, 91, 128-184, 202-203 SPAR Aerospace, 107, 163, 190 Transfer Orbit Stage (TOS), 109, 121, 122 Spartan, 341 Transpace Carries, Inc. (TCI), 87, 89, 120-121, 131-132 SPAR)' 283 Treaty on Outer Space (Treaty on Principles Governing the SPA., See Shuttle Pallet Satellite Activities of States in the Exploration and Use of Out- SPOT (Systeme Probetoire d'Observation de la Terre), 14, er Space, Including the Moon and Other Celestial 27, 60, 75, 9' 94, 283-284, 292-293 Bodies), 44, 46, 47, 288, 292 SPOT Image Corp.,84 TRW, 193, 389 SPOT Image, S.A ,73, 93, 94, 284 TVROs. See Television receive-only Earth stations. SSI. Se, Space Services Inc. SST. See lea surface temperature data. SSTDMA. See Satellite switched time division multiple Unisat satellite, 160 access. UNISPACE '82, 7, 49, 53, 366, 390-391 ST. See Space telescope United Brands, 89 155, 182

473 472 international Cooperation and Competition in Civilian Space Activities

United Kingdom, 71-73, 90, 91, 156, 159. 160, 163, 258, VAS See Visible Atmospheric Sounder. 266, 375, 384 Visible anti :-frared Spin-Scan Radiometer (VISSR), 260, 270 United Nations, 44, 51-58, 60, 170-171. See also Commit- Visible Atmosphei:- Sounder (VAS), 260 tee on the Peaceful Uses of Outer Space; International VISSR. See Visible and Infrared Spin-Scan Radiometer. Telecommunication Union, World Meteorological Von Braun, Wernher, 66 Organization. Universities Space Research Association (USRA), 347 Wave height data, 310, 312 University of Bern, Switzerland, 37 Weather data products, 266, 269, 310 University of Hawaii, 41 Western Union Telegraph Co., 89, 154, 155, 174, 175 University of West Indies, 41 West Germany Upper stages, 107-109, 114, 121-122 land remote sensing, 283 U.S. Agency for International Development (AID) materials processing in space activities, 76-77, 337, 341, international cooperation activities, 7, 28, 33, 39-41, 180, 348-352, 358, 361 209, 273 satellite communications activities, 72, 73, 163, 194 U.S. Data Communications System, 266 Spacelab activities, 5, 71, 75 U.S. Export-Import Bank (Ex-Im), 133, 134, 192, 206 Space program, 66, 70, 75-77 U.S. Geological Survey, 41 space science activities, 375 U.S.-Japanese Agreement on Space Activities, 119 space transportation activities, 128 U.S. Navy, 16, 503, 305 WMO. See World Meteorological Organization USRA. See Universities Space Research Association World Administrative Radio Conference 198c-88 (Space U.S.S R. See Soviet Union. WARC), 13, 48-49, 150, 171, 173-177 U.S. Telecommunication, Training Institute (USTTI), 59, World Bank, 179 179-180, 412 World Meteorological Organization (WMO), 43, 51-52, 264, U S Thiokol, 119 268, 273, 274 U.S. Trade Act of 1974, 131 World Weather Watch, 268-769, 273 USTTI See U S Telecommunications Training Institute Zeiss, 390 VAue-added servtccs, 257, 264, 274-275, 293-294, 299-301 317, 321-323

U.S. GOVERNMENT PRINTING 0?FICE :1985 0 - 38 -797: QL 3

474 Office of Technology Assessment

The Office of Technology Assessment (OTA) was created in 1972 as an analytical arm of Congress. OTA's basic function is to help legislative policymakers anticipate and plan for the consequences of technological changes and to examine the many ways, expected and unexpected, in which technology affects people's lives. The assessment of technology calls for explora tion of the physical, biological, economic, social, and political impacts that can result from applications of scientificknowledge. OTA provides Con- gress with independent and timely information about the potentialeffects- both beneficial and harmful of technological applications. Requests for studies are made by chairmen of standing committees of the House of Representatives or Senate; by the Technology Assessment Board, the governing body of OTA; or by the Director of OTA in consultation with the Board. The Technology Assessment Board is composed of six members of the House, six members of the Senate, and the OTA Director, who is a nonvoting member OTA has studies under way in nine program areas: energy and materials, industry, technology, and employment; ir,ternational security and commerce; biological applications; food and renewable resources;health; communication and information technologies; oceans ani environment; and science, transportation, and innovation.

475