International Cooperation and Competition

in Civilian Space Activities

June 1985

NTIS order #PB87-136842
Recommended Citation:

International Cooperation and Competition in Civilian Space Activities (Washington, DC:

U.S. Congress, Office of Technology Assessment, OTA-ISC-239, July 1985).

Library of Congress Catalog Card Number 84-601087

For sale by the Superintendent of Documents

U.S. Government Printing Office, Washington, DC 20402
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 deep space. 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. Government space program

and for the U.S. private sector.

This report presents the major findings of an assessment requested by the House

Committee 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 achievements—and those of other space-faring nations—the number of opportunities (and associated costs) that lie before us require a thoughtful articulation of space goals and objectives. * Such goals should reflect a broad public consensus, including, but not limited to, those with obvious stake

holdings in the space program. Defining these goals maybe 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 in an 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 international space

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. UN/SPACE ’82: A Context for Cooperation and Competition, was requested by the House Committee on Science and

Technology and the Joint Economic Committee. Remote Sensing and the Private Sector: Issues for Discussion was requested by the House Committee on Science and Technology 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, others reviewed 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. Future in Space

(Washington, DC: U.S. Congress, Office of Technology Assessment, OTA-STI-241, November 1984).

. . .

I l l
Related OTA Reports

Civilian Space

● Civilian Space Stations and the U.S. Future in Space.

OTA-STI-241, November 1984. GPO stock #052 -O03-O0969-2.

● Civilian Space Policy and Applications.

OTA-STI-1 77, June 1982. GPO stock #052 -O03-O0878-5.

● Radio frequency Use and Management: Impacts From the World Administrative Radio Conference

of 1979. OTA-CIT-1 63, January 1982. GPO stock #052 -O03-O0863-7.

● Solar Power Satellite Systems and Issues.

OTA-E-144, August 1981. NTIS order #PB 82-108846.

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 -O03-O0945-5.

Salyut: Soviet Steps Toward Permanent Human Presence in Space.

OTA-TM-STI-14, December 1983. GPO stock #052 -O03-O0937-4.

UNISPACE ’82: A Context for International Cooperation and Competition.

OTA-TM-ISC-26, March 1983. GPO stock #052 -O03-O0962-5.

Space Science Research in the United States.

OTA-TM-STI-19, September 1982. NTIS order #PB 83-166512.

Military Space

●

●

●

●

“Anti-Satellite Weapons, Countermeasures, and Arms Control” (scheduled for publication summer

1985)

“Ballistic Missile Defense Technologies” (scheduled for publication summer 1985).

Arms Control in Space—Workshop Proceedings.

OTA-BP-ISC-28, May 1984. GPO stock #052 -O03-O0952-8.

Directed Energy Missile Defense in Space–Background Paper.

OTA-BP-ISC-26, April 1984. GPO stock #052 -O03-O0948-0.

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-O-220, October 1983. GPO stock #052-003-00931-5.

● U.S. Industrial Competitiveness—A Comparison of Steel, Electronics, and Automobiles.

OTA-ISC-1 35, July 1981. NTIS order #PB 81-235749.

● Technology and Steel Industry Competitiveness.

OTA-M-1 22, June 1980. NTIS order #PB 80-208200.

● 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, Washington, DC 2040

783-3238; and the National Technical Information Service, 5285 Port Royal Road, Springfield, VA 22161, (703)487-4650.

iv
OTA Project Staff on International Cooperation and

Competition in Civilian Space Activities

Lionel S. Johns, Assistant Director, OTA

Energyl 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. Hut-d*

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-house contractor,

* *On detail from National Oceanic and Atmospheric Admlnlstratlon
Advisory Panel on International Cooperation

and Competition in Civilian Space Activities

Center for

Paul Doty, Chairman

Science and International Affairs

Harvard University

Benjamin Bova

president

National Space Institute

Robert Evans

Principal of Venture Capital

Hambrecht & Quist, Inc.

Robert Frosch

Vice President

General Motors Research Laboratories

Eilene Galloway

Honorary Director

International Institute of Space Law of the

International Astronautical Federation

Ivan Getting

President-Emeritus

The Aerospace Corp.

Mireille Gerard

Administrator, Corporate and International

Programs

American Institute of Aeronautics and

Astronautics

Benjamin Huberman

Vice President

Consultants International Group, Inc.

Walter McDougall

Associate Professor of History

University of California, Berkeley

John Mayo

Vice President

Bell Laboratories

John L. McLucas

Executive Vice President and Chief Strategic

Officer

Communications Satellite Corp.

Martin Menter

Attorney-at-Law

Washington, DC

Arthur Morrissey

Director, Future Systems

Martin Marietta Aerospace

Fred Raynes

Vice President

Grumman International Inc.

Gary Saxonhouse

Professor of Economics

University of Michigan

Jerome Simonoff

Vice President

Citicorp Industrial Credit, Inc.

Leonard Sussman

Executive Director

Freedom House

John Townsend

President

Fairchild Space & Electronics Co.

Laurel Wilkening

Vice Provost

University of Arizona

Elizabeth Young

Vice President, Marketing and Sales

COMSAT General Corp.

NOTE: OTA appreciates and is grateful for the valuable assistance and thoughtful critiques provided by these advisory panel members. The views expressed

in this OTA report, however, are the sole responsibility of the Office of Technology Assessment.

vi
Workshop on UNISPACE ’82 (Nov. 30, 1982)

Bert CowIan

International Communications Consultants

Russell C. Drew

Science and Technology Consultants

Wolfram Drewes

World Bank

Eilene Galloway

Vice President

International Institute of Space Law

Jerry Grey

Publisher

Aeronautics and Astronautics

Martin Menter

Attorney at Law

Kenneth Pederson (observer)

National Aeronautics and Space

Administration

Irwin Pikus (Chairman)

National Science Foundation

Charles Schmidt

RCA Astro Electronics

Ambassador Jean Wilkowski

Volunteer International Technical Assistance

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

Kenneth Craib

Resource Development Associates

Russeli C. Drew

Science and Technology Consultants

Robert A. Frosch

General Motors Research Laboratories

Roger Hofer

purdue University

Marvin R. Helter

ERIM

Terry Lehman

ARCO Oil & Gas Co.

Earl S. Merritt

Earth Satellite Corp.

Arthur Morrissey

Martin Marietta Aerospace

Charles Paul (observer)

U.S. Agency for International Development

Bruce Rado

ERDAS Inc.

Jerome Simonoff

Citicorp Industrial Credit, inc.

Harry Stewart

Strategic Geoscience Applications

SUN, E&T

Dennis Zimmerman

Congressional Research Service

vii
Executive Branch Meeting on Remote Sensing (August 18, 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 and Technology Policy

John H.

National

Kenneth

National

McElroy

Earth Satellite Service

Pederson

Aeronautics and Space

Lisle Rose

U.S. Department of State

John Townsend

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 Commission

. . . Vlll
Acknowledgments

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

James Ball

James Baker

Nadine Binger

William Bishop

Denise Bletsos

Kate Bonner

Jane Bortnick

Daniel Brandel

Darrell Branscome

Tom Bruce

Radford Byerly

Charles Chafer

Barbara Cherry

Stuart Chiron

Lynne Cline

John Coles

John Coruthers

Anthony Cox

Raymond Crowell

Terry Dawson

James Dougherty

Fred Doyle

Robert Duffy

Otho Eskin

Steven Flasjer

Donna Fossum

Sybil Francis

Roy Gamse

Marc Giget

Isaac Gillam

Robert Gosse

Richard Halpern

Peter Hambling

Larry Heacock

Douglas Heydon

Ken Hodgkins

Glen Horning

Pat Humphlett

Peter Johnson

Diana Josephson

Daniel Kevin

Mark Kieffer

Martin Kress

Chester Lee

Kenneth W. Leeson

George Li

John Logdson

William Lovell

Mark McCarthy

James Mahoney

T. Allen McArtor

Wally McClure

Mark McCarthy

John McElroy

Thomas McNight

Ahmed Meer

Charles Miller

Walter Morgan

James Morrison

George Ojalehto

Richard O’Rorke

Jack Osland

Scott Pace

Robert Palmer

Geoffrey Pardoe

Udo Pollvogt

William Raney

Cad Rappaport

Guy Rindone

Marvin Robinson

Thomas Rogers

Rudy Romero

Richard Rowberg

Fred Ruth

Glenn Sacra

Morgan Sanborn

Antonio Savoca

Fred Sarriner

Carl Schmitt

Dan Semick

Lisa Shaffer

Mike Simon

Marcia Smith

Marcellus Snow

Courtney Stadd

Louis Testardi

Shelby Tilford

Hans Traumann

Christopher Vizas

Howard Warriner

Fred Weingarten

Hayden Wetzel

Charles Wilk

Charles Williams

Bud Youngren

Dennis Zimmerman

OTA wishes to acknowledge the contributions of the following organizations and Government agencies

for their generous assistance:

Agency for International Development

American Telephone and Telegraph

Arianespace, Inc.

Communications Center

COMSAT Corp.

Congressional Research Service

Embassy of the Federal Republic of Germany

Embassy of France

Embassy of Great Britain

Export-Import Bank

Federal Communications Commission

General Accounting Office

General Dynamics

GTE International Systems Corp.

IN MARSAT

INTELSAT

International Trade Administration

MCI Communications Corp.

National Aeronautics and Space Administration

National Oceanic and Atmospheric

Administration

National Space Development Agency of Japan

National Telecommunications and Information

Administration

Orbital Sciences Corp.

Orion Satellite Corp.

Rockwell International

SPOT Image Corp.

Department of State

Texas Instruments

TransSpace Carriers Inc.

United Nations Committee on the Peaceful

Uses of Outer Space

Walter Hinchman Associates, Inc.

World Bank

ix
Contents

Chapter Page

I. Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

2. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

3. International Space Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

4. Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

5. Space Transportation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .103

6. 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 oflndustry Organization in the United States ..425

Appendix C: Public Law 98-365–July 17, 1984 ..,........................429

Appendix D: Public Law 98-575–Oct. 30, 1984 . . . . . . . . . . . . . . . . . . . .......446

Appendix E: Glossary of Acronyms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ......456

index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...........................463
Chapter 1

EXECUTIVE SUMMARY
Contents

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...........4....<..

Emergency of international Competition . . . . . . . + . . . . . . . . . . . . . . . . . . . . . . .

U.S. Private Sector Activities in Space . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

International Cooperative Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Space Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Space Transportation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Satellite Communications .. .. .. .. .. .. .. .. ... ... .. .$.... . . . . . . . . . . . . .

Remote Sensing From Space . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Materials Processing in Space, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Space Science.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

U.S. Civilian Space Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Future Goals and objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Organizing for Space Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cooperation and Competition as Part of Policy . . . . . . . . . . . . . . . . . . . . . . . . .

3

3

3

6

6

8

8

10

14

16

18

18

19

19

19

20

21
Chapter 1

EXECUTIVE SUMMARY

OVERVIEW

The United States has lost its monopoly in

Western space technology and operations; over

the past decade, Europe and Japan have developed the means to compete as providers of

space-related goods and services. At the same

time, major U.S. firms have expanded their interest and investment in the commercial applications of the technologies of outer space. Both

developments affect the ways that nations now

cooperate in space. Unfortunately, U.S. policies

have not adapted fully to the effects of increased

foreign competition, nor, outside of satellite telecommunications, has the United States developed

ways to involve its private sector effectively in applications of space technology. Moreover, it is less

and less appropriate to make “space policy” in

isolation from the broader agenda of domestic

and international commerce and foreign affairs.

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 efficacy 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, explores

U.S. civilian objectives in space, and suggests alternative options for enhancing the overall U.S.

position in space technologies and space science.

It also investigates past, present, and projected

international cooperative arrangements for space

activities and examines their relationship to competition in space. In keeping with the international focus of this assessment, the report discusses

the relationship between space policy and foreign policy. It analyzes domestic policy issues

only insofar as they affect our ability to sell goods

and services abroad or to cooperate effectively

with other nations. It does not assess policies related to the military and intelligence space programs except to the extent that they affect international civilian activities in space”.

The executive summary of this report was pub

lished as a separate document in July 1984.

However, the chapters of this nprt are up to

date as of May 1, 19$5. SirmJuly 1984, several

issues idqtified in the summary as needing poJicy attentim have been adthwssed by Congress

and the Administration, at least in part. In order

to pre~rve the integrity of the separately published Wmmryt ~ha~ q~ated it by print- ing cha~g~ in ~%@-W #@@from the original

text. )$ny &h& additbnq w korrectiorts ate identifkd kt~bekg” *t {n bwbts. In all other resped& 3tl&s swmmdry is identical to that publishtid b @ly 1984.

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

3
4 ● International Cooperation and Competition in Civilian Space Activities

Photo credits: European Space Agency, complements of National Aeronautics and Space Administration

Launch of Ariane (left), developed by the European Space Agency and marketed by

the French corporation Arianespace, S. A. Launch of Space Shuttle

Columbia (right), Nov. 28, 1983, carrying the European-developed Spacelab
Ch. I—Executive Summary 5

items but do not participate [extensively]l 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

countries, is an important vehicle for developing European competitive ability in space-related

commerce. Its largest single project, the Ariane

expendable launch vehicle (ELV), built under

French leadership, now competes directly with

U.S. launch services. ESA’S second largest project, the Spacelab, built under West German leadership, has increased European cooperation with

the United States in activities involving humans

in space. It has also assisted West Germany to

gain important expertise in building space habitats, thereby helping to set the stage for possible

later competition with the United States.

Outside of the ESA framework, the French Government has established and promoted particular space businesses (launch services and remote

sensing) that compete in the world market. West

Germany, as well as France, and to a lesser extent, the United Kingdom and Italy, invest in space

activities for more general purposes: to conduct

basic scientific research; to enhance the technological capabilities of national industries; to

realize some of the technological and economic

benefits of space applications; and to develop

1 [Th IS IS beginning to change. Canada, for example, had more

than $300 million in export contracts in 1984. The Soviet Union

and China have offered to sell space transportation services. ]

Photo credit: National Aeronautics and Space Administration

The European-built Spacelab-1 module and attached

pallet being prepared for installation in the

cargo bay of the space shuttle orbiter

Columbia, Aug. 16, 1983

space-related equipment industries. European

governments are developing their space-related

industry behind protectionist barriers where buynational government procurement is the rule. A

number of European firms are now able to participate in international space markets.

Like the other space powers, Japan has assumed that a government space program will ultimately contribute to national economic wellbeing. It has not specifically identified space industries as “targeted” for special emphasis in export competition; instead it seems to be aiming

to create a sizable space-related industry increasingly independent of U.S. technology and equipment. Although they now compete internationally only in electronics components and ground

stations, Japanese firms will be well positioned to

become major competitors in international markets for space-related equipment and services by

the early 1990s. Under internal and U.S. pressures, Japan has recently opened its market to

a limited degree to U.S. suppliers of satellites and

telecommunications equipment.
—

6 ● International Cooperation and Competition in Civilian Space Activities

Although the Soviet Union has the technological potential to compete with other countries for

commercial services, space competition between

the United States and the Soviet Union will continue to be more political and military than economic. Both nations today spend more on military than on civilian activities in space and make

heavy use of space for purposes of geodesy, navigation, weather forecasting, reconnaissance, missile-launch warning, and communications. They

are beginning to compete in developing weapons for use in space.

In space-related equipment and some service

markets, international commercial competition

outside of the European and Japanese markets

occurs in countries like Brazil, India, and Australia, which desire to develop domestic satellite

communications, and in INTELSAT and INMARSAT,2

but the largest market where substantial open

competition in sales of equipment takes place is

the U.S. domestic market. U.S. firms continue to

dominate both markets, although Japanese groundequipment sales have been substantial in developing countries,

In satellite communications services, international competition is currently almost nonexistent, except to a limited extent in North America. Carriers typically must hand off communications at foreign borders or at the geostationary

orbit, and are not allowed to sell full international

services to consumers. In addition, INTELSAT has

monopoly ownership of intercontinental satellite

communications facilities, but major U.S. carriers

and other firms are challenging this international

regulatory management.

U.S. Private Sector Activities in Space

Some of the largest U.S. corporations are now

heavily involved in space-related activities, especially satellite communications. Other firms are

beginning to invest in developing their own space

transportation, remote sensing, and materials

processing systems. Many corporations derive sigZINTELSAT is a 108 [now 109]-country organization carrying twothirds of the world’s international communications. INMARSAT is

a 37 [now 42]-country organization which was established in 1979

to facilitate maritime communications across the world’s shipping

lanes. COMSAT Corp. has been designated by the U.S. Government to serve as the U.S. representative to both organizations.

nificant revenues from producing specialized

space-related equipment.

However, except for satellite communications,

significant barriers of high cost and high technological and economic risk continue to deter investment. In space transportation and remote sensing, competition from U.S. Government-operated

systems is a significant impediment. Nevertheless,

fueled by technological advances and Government policy, the trend is toward more U.S. private investment in space systems. If current trends

continue, there will be a wide array of privately

financed space activities by the mid-199os.

One continuing difficult task facing the U.S.

Government will be to foster, in concert with the

private sector, an efficient transition from the current preponderance of Government investment in

civilian space activities to greater private sector

investment in the 1990s. Such a transition

occurred easily in satellite communications, because the demand for telecommunication services was already established and satellite circuits

were an immediate cost-effective way to accomplish what was already being done on Earth. In

new technology sectors, with small and uncertain

demand, and little institutional infrastructure, the

process of transition is likely to be difficult and

highly specific to the sector. The process will require periodic attention from Congress. In these

sectors, Government may be able to foster effective transitions by orienting its research and development (R&D) activities toward realistically

evaluated market demand and by involving industry early in the process. One such strategy is

the National Aeronautics and Space Administration’s (NASA) Joint Endeavor Agreement (JEA),

through which the private sector is encouraged

to share costs with NASA on projects having significant research objectives and potential commercial application.

International Cooperative Activity

Space is by nature and treaty an international

realm. The United States has played the leading

role in international cooperative activities by sharing the fruits of its research with developing countries, assisting other industrialized nations develop

their own space capabilities, and by helping to

establish the international legal regime in space.
Ch. I—Executive Summary ● 7

U.S. cooperative space projects continue to

serve important political goals of supporting global

economic growth and open access to information,

and increasing U.S. prestige by expanding the visibility of U.S. technological accomplishments. U.S.

noncommercial international space projects have

been managed principally by NASA, and aided

by the National Oceanic and Atmospheric Administration (NOAA) and the Agency for International Development (Al D). These projects also

support U.S. economic, scientific, and technological goals of obtaining access to countries for

tracking stations and ground-receiving stations,

influencing the space programs of other countries, and expanding research opportunities for

U.S. scientists by sharing costs with other

countries.

The examples of INTELSAT and INMARSAT,

two commercially successful international cooperative organizations, illustrate that countries with

political differences can cooperate to pursue

common social, political, and economic goals in

space. I NTELSAT, in particular, by establishing

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 nations—especially Japan and some European nations–have developed their own bilateral

cooperative programs. The Soviet Union continues to expand its international cooperative relationships in science and space applications. As

a result of these circumstances, the United States

is now one of several potential partners in cooperative space projects.

Developing countries will continue to depend

on the United States and other industrialized nations for help in expanding their own capacity

to use and develop space technology. If the

United States wishes to reap the full economic and

political benefits of its space program, its cooperative applications program must continue to involve the developing countries, especially because

they are beginning to represent a significant market for space-related goods and services.

The United States participates in various international organizations and meetings on space.

Improved U.S. preparation for these international

forums could result in more favorable treatment

of U.S. interests and concerns. U.S. experience

at UN I SPACE ’823 and the International Telecommunication Union (ITU) Plenipotentiary4 demonstrated that such improvements will require longterm domestic policy goals for outer space; more

effective coordination among U.S. agencies and

the private sector; greater continuity of personnel; and recognition that our critics may also represent important future markets. The series of ITU

meetings in the 1980s and 1990s, including

ORB’85 on the geostationary orbit, will present

occasions where U.S. policy will be tested.

The United States has signed agreements with

Canada, Japan, and ESA to cooperate in the designphase (phase B) of NASA’s space station

program. Each country will assume its own cost

for this and subsequent phases. The terms of

Cooperation ~q t~e, international development

and operatiwl o~ *eints of permanent space

infrastructure VW Muire careful attention by

Congress to ensure that the united States

achieves its goals in international cooperation.

>~ee UIVISPACE ‘g.2: A Context for Cooperation and COmpetition—A Technical Memorandum, OTA-TM-ISC-26 (Washington,

DC: U.S. Congress, Office of Technology Assessment, March 1983).

4

The ITU Plenipotentiary Conference was held in Nairobi in September 1982. See hearings before the Subcommittee on international Operations of the U.S. House Committee on Foreign Affairs,

Feb. 22, 1983.
8 ● International cooperation and Competition in Civilian Space Activities

SPACE APPLICATIONS

OTA examined a range of space technologies.

Each is at a different stage of commercial development or Government operational status. Each

therefore presents a different set of potential opportunities.

Space Transportation

The emergence of competition from foreign and

U.S. private sellers of launch services requires a

reassessment of the U.S. Government’s traditional

role as a provider of launch services to commercial interests. The Government must examine

whether and how it should continue to use the

Shuttle in competing for foreign and domestic

commercial launches.

The entry of ESA’s Ariane booster into the international launch vehicle market brought an end

to NASA’s monopoly in providing space transportation services to commercial entities and foreign governments. Eventually Japan will also be

able to offer competitive commercial launch services; still other nations are developing their own

means to launch payloads. In some respects, national launch vehicle programs can be compared

to national airlines: some are conducted primarily

for profit, while others play a role which is clearly

linked to perceptions of “prestige” and “national

self-image.” For these reasons, U.S. competitive

strategies based on price or superior technology

alone will not prevent foreign entry into the launch

services business. Nations that possess the commitment and the minimum economic and technical resources necessary to develop launch systems will take some share of the total world

market.

Although there are a number of potential entrants, launch service competition for the next

decade is likely to be primarily between NASA,

operating the Shuttle, and Arianespace, S. A., the

French corporations which markets the Ariane.

Both systems use technology developed by governments and compete primarily for the launch

of large geosynchronous communication satellites.

5

[The French Government owns (through CNES) 34 percent of

Arianespace. The balance is owned by European banks and aerospace firms.]

The Shuttle, although technically more sophisticated than the Ariane, has no special advantage

in this market. In addition, several U.S. private

firms are competing in offering launch services.

A large percentage of potential launch business

will undoubtedly be removed from international

competition. For instance, with few exceptions,

neither the U.S. Government nor the Japanese

or European governments are expected to make

launch procurement decisions under competitive

international bidding. Such restrictive trade practices could be altered by international agreement

in the distant future; in the near future, however,

it is unlikely that there will be effective coverage

of launch services under either government-procurement or trade-in-services agreements.

Much of the competitive part of the market will

consist of private U.S. communications carriers

putting up U.S. domestic satellites, INTELSAT,

INMARSAT, and a few countries will also purchase satellite launching services competitively.

Customers will base their choice on price (including the cost of financing), the reliability of launch

and schedule, the relative ease of planning and

processing payloads, the cost of insurance, and

the availability of coproduction and other offsets.

As with all large international contracts, political

considerations will undoubtedly play a role.

The Administration policy on launch vehicle

commercialization is ambiguous. On May 16,

1983, President Reagan announced that the U.S.

Government fully endorsed and wouId facilitate

the commercial operation of ELVs by the private

sector. 6 However, the President also stated that

the Shuttle is the “primary launch vehicle of the

U.S. Government” and that it would continue

to be available for domestic and foreign commercial users. The President’s policy encourages “free

market competition among the various systems

and concepts within the U.S. private sector,” yet

leaves the Government-subsidized Shuttle as the

main competitor to the private sector’s efforts to

market ELV services.

bThe Titan, the Atlas-Centaur and the Delta launch vehicles have

all been the target of efforts to commercialize existing ELVS. Other

smaller, private expendable launch vehicles are in development.
Ch. I—Executive Summary ● 9

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20 Artane 2 Titan 34D

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Space Shuttle

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Photo credit: Nationa/ Aeronautics and Space Administration

Current competition in space launching services from Earth to orbit is between

these five launchers

Current Shuttle prices were developed to encourage users to transfer their business from the

trusted ELVs, then operated by the Government,

to the Shuttle. According to NASA, launch prices

for the 1986-88 period will be based on the “outof-pocket” costs, that is, those costs which a commercial payload adds to a mission on the assumption that it would otherwise fly partially empty

when carrying a Government payload. Current

and projected pricing policies for commercial payloads allow the Shuttle to compete with Ariane’s

prices while earning some revenue and supporting other important national space goals; however,

these policies decrease the probability that U.S.

private firms will be economically successful in

providing competitive launch services.
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 long-term space goals

such as building space stations, encouraging the

development of manufacturing 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 ShuttIe 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 thriving, mature private space transportation industry in the United States by the 1990s. Because

the Ariane and U.S. ELVs have comparable capabilities, such a decision might also allow the

Government-subsidized Ariane to capture a larger portion of the international launch market than

it would if it were competing against the subsidized Shuttle.7

Satellite Communications

Unlike other technologies discussed in this

report, satellite communications technology has

passed from Government-dominated investment

to commercial status. Civilian satellite communications is now fully established within the overall telecommunications industry.

Competition in International Satellite

Communication Services

7Relatively powerful trade remedies for unfair foreign competition against U.S. goods and services are available to the Government. Recently, for example, Transpace Carriers, Inc., the company seeking to commercialize the Delta launcher, applied to the

President to prohibit Arianespace from marketing its services in the

United States and to penalize U.S. imports from the countries subsidizing Arianespace, S. A., under Section 301 of the Trade Act of

1974.

In the United States, increasing numbers of

satellite communications service providers, and

types of services, have forced examination of the

structure of the international satellite communications industry. In particular, several U.S. communications corporations have recently applied
Ch. I—Executive Summary ● 11

for authority from the Federal Communications

Commission (FCC) to launch satellites to provide

transatlantic satellite communications services.

The United States must soon decide whether it

wishes to continue its past support of INTELSAT

as the only provider of intercontinental satellite

communications facilities or whether it will permit U.S. firms to launch independent and/or competitive satellites. Preventing U.S. firms from owning independent international satellite facilities

would close off certain potentially profitable opportunities to them. But INTELSAT’s monopoly

status is strongly supported by many other governments. The United States must therefore weigh

the interests of the U.S. private sector against

other foreign policy objectives and existing international agreements.

In November 1984, the Administration endorsed U.S. private transatlantic satellite systems

as “required” in the national interest but it also

circumscribed their ability to compete with

INTELSAT. The matter is currently the subject of

a proceeding at the Federal Communications

Commission (FCC). It is not yet clear how vigorously the Administration might support private

U.S. applicants, nor what competing foreign

commercial systems may be proposed. The

INTELSAT Assembly of Parties meeting in January 1985 coordinated a significant additional

number of U.S and Canadian satellites offering

limited transborder satellite services for the developing Western Hemisphere regional system

of independent satellite operators. Most of these

services have now received final FCC approval.

The Government must also decide how vigorously to negotiate with other countries to advance

the interests of its consumers and producers in

other areas of international trade in satellite

telecommunications services. Regulatory regimes

in other countries prevent private carriers from

competing freely in international communications service markets. Other nations typically require that communications reaching their territories be handled by their governmental tele- —. — --- .— —

8Although [almost] all commercial intercontinental satellite traffic must pass through INTELSAT, regional systems provide limited

international services in the regions they serve.

communications monopolies and accept traffic

only from designated U.S. carriers in each market segment. Among the alternatives are: 1) bilateral negotiations with individual countries with

the short-term objective of access for additional

U.S. carriers; and 2) longer term multilateral negotiations on a general GATT9 code on trade-in

services.

All of the foregoing has resulted in a situation

where U.S. consumers have fewer price-service

options in international than in domestic telecommunications markets. Moves toward freer international competition would be consistent with

domestic steps toward deregulation and with recent U.S. efforts to secure fairer international

trade.

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. Satellite services will continue to dominate longdistance 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 couId 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 incentives, industry structure, and above all, on regulatory decisions. It is unlikely that the total demand for international satellite communications

will decline during the 1990s.

Competition in Satellite Communications

Equipment Market

U.S. satellite communications equipment firms

continue to dominate the relatively open international markets, including the U.S. domestic

market. However, access by U.S. producers of

Generdl Agreer-nent on Tariffs and Trade.
12 International Cooperation and Competition in Civilian Space Activities

North American

Earth stations

Central American

and Caribbean

Earth stations

South American

Earth

stations

European

Earth

stations

Middle East

Earth

stations

African

Earth

stations

This is one of three INTELSAT communications satellites stationed over 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 communications ment, and thus mu

equipment to most industrial country markets is not available.

restricted by “buy national” policies on the part

tilateral trade remedies are

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 satchasers 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 actions in
Ch. 13-Executlve Summary ● 7 3

the U.S. domestic long-distance telecommunications market have opened up the U.S. equipment

market to international competitors. Consequently, foreign communications equipment manufacturers have greater access to the U.S. market than

U.S. sellers have to theirs.

Advanced R&D

Although some level of Government R&D funding may be necessary to maintain the competitiveness of the U.S. satellite communications

equipment industry, Congress must determine

how much is appropriate. Increasing congestion

in the geostationary orbit over the Western Hemisphere for satellites using frequencies in the Cband (6/4 GHz) and Ku-band (14/12 GHz) may

create a market opportunity for Ka-band (30/20

GHz) satellites in the 1990s. This opportunity,

along with potential competition from foreign satellite system manufacturers, has led to the NASA

Advanced Communications Technology Satellite

(ACTS) program, which would develop a Ka-band

system. ACTS components would be more advanced than Ka-band technology under development in Europe or Japan;10 some aspects of

ACTS technology would also be applicable in satellites operating in the C- and Ku-bands.

Some satellites operating in the Ka-band may

well be launched in the late 1980s, Hughes Aircraft Co. has already applied for permission to

launch two. As planned, they would also be less

advanced than the proposed ACTS system, but

Hughes questions whether an ACTS-type system

would be commercially viable. Depending on its

perception of the threat of subsidized foreign

competition and the capabilities of the U.S. private sector to meet it, Congress could: 1 ) continue to fund the full ACTS program through the

flight testing stage, 2) fund only minimal communications satellite research, or 3) fund only that

part of the ACTS research that can be carried out

on the ground or in small-scale Shuttle experiments (on the assumption that the private sector will finance spacecraft tests of commercially

viable innovations or that spacecraft tests could

be postponed until foreign plans were clearer).

10ITwo Ka-band satellites were launched by Japan in 1983. This

year it expects to launch a third.]

Participation in the International

Telecommunication Union

Because most of the communications satellites

over the Western Hemisphere belong to U.S. private firms or the Government, the United States

has an interest in protecting the current method

of allocating slots in this hemisphere’s portion of

the geosynchronous orbit. Slots are now registered by the International Telecommunication

Union (ITU) according to a policy of “first-come,

first served.” * However, many countries of Central and South America, along with other developing countries, espouse the principle of a priori

allotments, whereby countries would be assigned

slots in advance of actual need.

The ITU has called the 1985-88 World Administrative Radio Conference (“Space WARC”) to

consider international arrangements for planning

and implementing the use of communications satellites in the geosynchronous orbit. (The particular meeting which will do so in 1985 is known

as ORB’85.) If the United States faced a limited

allotment of geosynchronous slots, it would be

obliged to deploy substitute capacity in the Kaband or in fiber-optic cables, presumably incurring additional costs.ll One such cost might be

the premature obsolescence of certain C- and Kuband ground equipment. If C- and Ku-band slots

had to be rented from countries to which they

had been assigned a priori, such rents would also

be an extra cost to U.S. consumers of satellite

communications. Participation in ORB’85 will require careful planning and coordination among

several U.S. Government agencies and the private sector. An isolated, combative stance in

ORB’85 on the part of the United States against

a priori planning could lead to difficulties in solving other international telecommunications issues. In particular, ill-considered U.S. actions that

disrupted the ITU’s decisionmaking processes

could lead to changes in international arrangements for allocating and assigning frequencies to

civilian and military communications in general.

—

*[This does not, however, entitle the country or the private firm

to retain the geostationary slot indefinitely. See ch. 6.]

l’~his supposes that the C and Ku bands would be saturated,

under given orbital spacing. If not, substitute capacity would not

be required. Large amounts of domestic fiber optic cable capacity

will be installed in the 1990s, in any case.]
14 ● International Cooperation and Competition in Civilian Space Activities

Remote Sensing From Space

Land Remote Sensing12

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

land. France is treating its Systeme Probetoire

d’Observation de la Terre (SPOT) as a commercial enterprise and has organized to market Earth

resources data when the system becomes operational in 1985.

NASA developed the Landsat system and managed it as an R&D project until January 1983;

Landsat is now managed by NOAA as a Government operational system. Landsat 5, launched in

March 1984, is expected to be the last in the Government’s Landsat series. Although NASA and

NOAA will continue advanced research on new

sensors and data processing techniques, using the

Shuttle to test new methods, the Administration

and Congress are now moving to transfer the

operation of land remote sensing to the private

sector.

Although the small size of the present market

for Landsat data and consequent high economic

risk’ 13 stand as major impediments to full commerI z~ee a150 Remote Sensing and the Private Sector: Issues for Discussion—A Technical Memorandum, OTA-TM-ISC-20 (Washington,

DC: U.S. Congress, Office of Technology Assessment, March 1984).

IJThe current annual market for Landsat data is about $10 million. Satellite capital costs (for a 5-year lifetime) are likely to be greater than $100 million.

cialization, several private firms have expressed

interest in providing land remote sensing data

commercially. Phased transfer to private hands,

in which a designated private firm uses its commercial skills to develop a market for Landsat data,

may result in an overall market for data and services adequate to support both a self-sufficient land

remote sensing business and the entrance of more

than one data seller.14

Without sufficient oversight, transfer of land

remote sensing to the private sector would negatively affect our relationships with other nations.

In view of the continued importance of the “open

skies” principle to the United States, recent legislation’ 15 continues the policy of nondiscriminatory sales of land remote sensing data. Not to do

so would be harmful to many U.S. foreign policy interests, not just those involving outer space.

I AH. R. 5155, passed by Congress June 28, 1984, provides for a

phased transfer [Public Law 98-365].

15H. R. 5155 [Public Law 98-365].
Ch. l—Executive Summary ● 1 5

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 business16 until a competitive international remote sensing 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 remotesensing 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. I n particular, as microcomputers become more powerful, and as appropriate computer software is developed, even relatively unsophisticated users may eventually

become purchasers of Earth resources data products—if their prices become sufficiently low.

The pressure for international agreements requiring “prior consent” to acquire remotely

sensed data from another country will continue

to mount as spatial and spectral resolution improve. However, if a strong, open, competitive

market for data products and data services develops, such pressure is likely to diminish.

lbvalue.added remote sensing corporations process and ma flipuIate remote sensing data to increase their value to the end user.

Beginning in September 1984, the Department

of Commerce attempted to negotiate a contract

with EOSAT Corp.* according to the terms of the

Landsat Commercialization Act of 1984. EOSAT,

Commerce, and OMB have reached agreement

(in May 1985) over the amount of the subsidy

($50 miliion plus launch costs) and EOSAT’S fi-.

nancial risk. It will now be up to Congress to

appropriate the transfer funds. Should the experiment in commercializing land remote sensing

eventually fail, Congress will be faced with a

decision about the future of land remote sensing from space. It could then:

1. decide to reestablish Government ownership of the system,

2. attempt to establish an international land

remote sensing system where costs could be

shared, or

3, cease to fund land remote sensing altogether.

Although Public Law 98-365 calls for continued R&D on remote sensors and applications

techniques, in August 1984, NASA reduced its

support for near-term R&D on land remote sensors. NOAA devotes less than $1 million yearly

to applications research (for land remote sensing). In contrast, other nations are increasing

their investment in remote sensing R&O.

*A c@praWn atarted by RCA and Hughes Aircraft Corp. specMca@tQ nwrket Landsat data and to construct, own, and operate foliow-url LandSat satellites.

Meteorological Satellites (Metsats)

Public Law 98-166 prevents the sale or transfer of U.S. metsat systems to private industry and

requires that they be operated in the public interest. At present, the commercial value-added

market for weather data from satellites is extremely small. However, innovative applications of metsat data to agriculture and hydrology demonstrate

that, when properly processed and integrated with

other data, they can sometimes substitute effectively for moderate resolution land remote sensing data, Because metsat data have the advantage that they are sensed and delivered twice

daily, their use for these purposes may reduce

the market for higher resolution, Earth resources

data.
.

16 . Internationa/ Cooperation and Competition in Civilian Space Activities

As meteorological satellite systems have grown

sophisticated and consequently more complicated, costs of building and operating the systems

have also grown. In contributing to the continuity of international collection and analysis of environmental data, the United States could follow

one

1.

2.

3.

of the following policy options:

It could continue to operate two civilian

polar orbiters and two geostationary satellites and share data internationally.

It could operate only one polar orbiter. Reducing polar-orbiter service would likely

save roughly $25 million per year, but would

lead to reduced service to Hawaii and Alaska as well as to the U.S. military. It would

also reduce our ability to share metsat data

with other nations.

Alternatively, the United States could join

with other industrialized nations in a joint

international system, as the Administration

has proposed. The United States could save

money on building and operating meteorological satellites and demonstrate its leadership in developing space for peaceful purposes by joining with other nations to build

and operate such a system.

Ocean Remote Sensing

NASA’s experimental Seasat ocean remote

sensing satellite demonstrated in 1978 the utility

of collecting data on properties of the ocean from

space. Although no U.S. civilian system is now

foreseen, the U.S. Navy is planning an operational ocean remote sensing satellite (Navy Remote

Ocean Sensing Satellite–NROSS) for launch in

1988 or 1989. NOAA will collect and distribute

data from NROSS. Canada, ESA, and Japan all

expect to have operational civilian ocean remote

sensing systems in the late 1980s or early 1990s.

None of the systems by themselves will produce

the full range of useful ocean data. [f all parties

were willing to coordinate satellite orbits and to

supply their data in usable form, NOAA could play

a crucial role in collecting, organizing, and distributing data from the U.S. Navy and the foreign

ocean remote sensing systems. Alternatively, at

some time in the future, it may be desirable to

develop an international ocean remote sensing

system.

Remote Sensing in Developing Countries

Most developing countries lack the basic infrastructure to use Earth remote sensing data efficiently. Because the meteorological terminals are

relatively inexpensive to install and operate, gaining experience with receiving and processing

weather data may be the best way for developing

countries to build the infrastructure necessary to

utilize remotely sensed land or ocean data. At the

same time, advances in information technology

that will make it easier and cheaper to process

remotely sensed data will vastly improve the ability of the developing countries to use them. By

continuing to support remote sensing programs

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 (MPS) because commercially significant MPS products have

yet to be developed; governments are now responsible for most MPS research activities. Given the

cost and complexity of research in space, and the

limited understanding of space processing and its

supporting technology, international cooperation

in MPS research could contribute substantially to

long-term U.S. objectives in space. A few firms,

working with NASA, are studying specific processes which could result in commercial products.

The primary motivation for studying the properties of materials in space is to use a microgravity

environment for extended periods for scientific

and, perhaps, commercial applications. Operating in a near zero-gravity environment may lead
Ch. l—Executive Summary ● 1 7

to improvements in controlling process variables

such as temperature, composition, and fluid flow,

and afford opportunities for understanding and

improving ground-based production methods.

Where economical, it might eventually lead to

manufacturing selected products in space.

Should MPS products prove to be commercially

viable, the United States would eventually face

market competition from other nations that are

also gathering experience in microgravity research. ” Most foreign MPS activities have been

conducted by ESA under the primary sponsorship of West Germany. European MPS activities

include an active sounding rocket program, the

development and use of Spacelab and related

hardware, and the development of the reusable

free-flying platforms, SPAS and EURECA. As a result of these activities, Europe will likely become

an important source of information on the behavior of materials in microgravity. Japan has a

small but active sounding rocket program directed toward MPS research; it has also used the

Shuttle and Spacelab to carry out experiments.

The Soviet Union has done a considerable amount

of MPS research in its Salyut space station, but

this research is unlikely to result in commercial

competition for the United States.

At present, U.S. commitment to the Shuttle and

to the development of an MPS science community, as well as NASA’s encouragement of certain commercial space activities, have given U.S.

industry a technological advantage. This advantage could diminish over the next decade as foreign access to space becomes more routine and

the advantages and limitations of microgravity

technology become more widely known.

MPS research and hardware development in Europe and Japan, in addition to raising the potential for future commercial competition, have made

these countries valuable partners for international cooperation. Considering the current limited

understanding of MPS and the high cost of investigating this technology, international cooperative activities would offer the benefit of expanding the base of knowledge while sharing costs.

The United States should encourage international cooperation in basic scientific investigations or

in areas in which the United States can benefit

from foreign research (e.g., basic biomedical research and research in solidification). It should

proceed cautiously in areas that might have nearterm commercial applications or in which the

United States holds a clear technological lead

(e.g., continuous flow electrophoresis and containerless processing).

Any decision to increase Government support

for MPS research should probably include increases in funding for international cooperative

activities such as formal and informal exchanges

of scientific personnel and information, and sharing of facilities such as the Shuttle, Spacelab, and

European- and Japanese-built hardware. Joint research projects such as the International Microgravity Lab proposed by NASA, which would allow

the cooperative use of the Shuttle and foreign MPS

hardware, seem to offer significant benefits and

savings to NASA and the U.S. taxpayer.

It is impossible to predict the future size or vitality of the markets for MPS products, services,

and equipment. Although in the near-term, a few

commercial MPS products will be developed, the

long-term potential of microgravity research will

not be known until substantially more research

has been accomplished. The potential for developing a U.S. MPS industry depends on: continued

Government-funded basic research; the availability of reliable, low-cost space transportation; and

access to medium- or long-term MPS facilities

such as free-flyers or a space station. It depends

most on the discovery of commercially viable

MPS products.la

I zForeign ability to compete i n space manufacturing will depend

strongly on availability of the Shuttle to foreign users or on the development of suitable foreign launch vehicles and carriers.

IsMc Donnell Douglas and Johnson & Johnson have been working since 1977 on processes to develop marketable pharmaceuticals. They hope to market their first product manufactured in space

by 1987.
18 ● Internat/ona/ Cooperation and Competition in Civilian Space Activities

SPACE SCIENCE

Cooperation

Cooperation between countries in space science

continues to be a major source of cultural, political, and social benefits. Cooperation occurs in a

variety of modes—among individuals, institutions,

and governments. The Infrared Astronomical Satellite (IRAS), by which several major astronomical

discoveries were made recently, is an excellent

example of the high level of science that cooperative ventures can achieve.

Exploratory missions in astronomy and planetary science are increasingly complex and expensive. Although political considerations are important, the major driving force behind large cooperative space science projects will continue to be

the prospect of sharing costs. Yet the complexity

of such missions makes joint management by different governments, space agencies, and research

institutions difficult. For this reason, international

cooperative missions in which costs are shared

should be designed so as to keep the management as simple as possible.

Now that ESA and Japan are able to mount major interplanetary missions, the terms of international cooperation have changed. in the international Halley Watch, for example, the United

States has assumed a supportive, rather than a

leading role. This change from its accustomed role

reflects a recognition that the United States need

no longer rely solely on unilateral efforts to maintain momentum in space science generally. The

United States can now anticipate some return on

our earlier investments in the space science programs of our cooperative partners.

Whatever part the United States assumes in cooperative space science activities, it is extremely important for the United States to adhere to

its cooperative agreements. As a case in point,

the U.S. decision in 1981 to reduce substantially

its participation in the International Solar Polar
Ch. l—Executive Summary . 19

Mission continues to be named as an example

of the difficulties involved in cooperating with the

United States.

Competition

It is difficult to speak of direct competition in

space science, at least among Western nations,

as every nation’s plans are known well in advance

and there is little to be gained from duplicated

research. (This was part of the reasoning behind

the U.S. decision not to send a spacecraft to Halley’s Comet.) Relative prestige is primarily a function of previous accomplishments and available

resources.

Space science is also one way in which the

United States demonstrates its leadership in space

technology. Although the United States maintains

a leadership position in space science, as other nations gain greater experience, the United States

faces increased competition in certain subfields

of space science from ESA, Japan, and the Soviet

Union. One way in which the United States can

maintain its broad base of knowledge and technology, while minimizing costs, is to continue to

cooperate with other countries, and to be aggressive in proposing experiments for foreign spacecraft.

Another competitive aspect of space science,

and one which is fairly new, is the competition

for cooperative partners on scientific missions.

The Soviet Union has used such cooperation as

a way to branch out from its Intercosmos base

of Soviet bloc countries, to extend its influence,

and to acquire needed scientific/technological expertise, The recent flight of an Indian cosmonaut

aboard the Salyut 7 space station is one example. The Soviets are continuing an elaborate program of joint scientific projects with France. The

United States must not overlook this competitive

factor with regard to Third World interest in space

science as a means of building the infrastructure

necessary for space applications. in the long run,

the United States must remain cooperative in

space science in order to remain competitive.

The international market for space science

equipment and services is relatively small. Because the United States has a well-developed infrastructure for supplying this market, it will continue to dominate the market for the foreseeable

future.

U.S. CIVILIAN SPACE POLICY

Analysis of the issues raised by this assessment

reveals that two major problems dominate the

organization and implementation of U.S. civilian

policies toward space: 1) there is no national consensus about long-term goals and objectives in

space, and 2) the political and economic dimension of space activities now exceed the purview

of any one Government agency.

Future Goals and Objectives

To maintain focus on the Nation’s goals in

space, periodic high-level review and discussion

are required. In recent years, the Administration’s

examination of space policy has centered in special committees organized within the White House,

and has been dominated by military and national

security, as well as yearly budgetary, concerns.

The current Administration’s space policy committee, the Senior Interagency Group for Space

(SIG space) reflects this emphasis.19 Neither the

private sector nor several agencies20 with longstanding responsibilities in the U.S. civilian space

program are represented.

Observers generally agree that the United States

needs to establish new specific civilian space

goals. One possible mechanism for encouraging

a national debate over the U.S. future in space

is the National Commission on Space, as author19The Senior Interagency Group is composed of representatives

from the Departments of Commerce, Defense, and State, and the

Central Intelligence Agency, the Joint Chiefs of Staff, the Arms Control and Disarmament Agency, and NASA.

ZOFor example, the C)epartrnents of Agricu Itu re and Interior, the

National Science Foundation, FCC, and AID.
20) . Internationa/ Cooperation and Competition in Civilian Space Activities

ized in H. R. 5154.21 A National Commission on

Space could, among other things, provide a public forum for analyzing the needs of the Nation

with respect to space. It could also help to develop a national consensus on new long-term

goals and objectives.22

Given the widespread and expanding uses of

space, the diversity of governmental and private

users, and the increase in international commercial competition, a commission designed to recommend future policy should be as diverse and

as broadly based as possible, and include members from the private sector. The Commission

should seek input from all the Government agencies with responsibilities in space, but remain independent of them. In addition to recommending goals and objectives, the Commission should

provide guidance for implementing its recommendations in the context of other national goals.

It will be important for the Commission to specify the relationship of new goals and objectives

to other national goals, and to take account of

the limitations, as well as the strengths, of space

policy. Just as satellite communications have become integrated into the telecommunications industry, so will other space technologies, as they

mature, become integral parts of larger, nonspace

industries. They will then gradually become less

appropriate objects of space policy, and more appropriate objects of policies related to those industrial sectors they serve.

It is inappropriate to use space policy (which

provides direction about the future exploration

and exploitation of space), for example, to make

decisions on international trade in space-related

goods and services in isolation from the U.S.

Trade Representative, decide on the require- ——————— zlpassed by congress, June 28, 1984. [Public Law 98-361.1

22FOr an initial suggested list of such goals and objectives, see

Civi/ian Space Stations (Washington, DC: U.S. Congress, Office of

Technology Assessment) [OTA-STI-241, November 1984.].

ments of international satellite telecommunications in isolation from the FCC, or to plan international programs in isolation from the Department of State. Nor should space policy per se be

used to guide the overall planning of operational

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 Space Activities

In the past, what this Nation sought to accomplish in space was achieved primarily by NASA

within the broad principles and goals of the 1958

National Aeronautics and Space Act (NAS Act).

Today, the increase in foreign and commercial

activities means that other Government agencies

now play a greater role in space. Already, the Departments of Agriculture, Commerce, Interior,

and State, and the FCC, in conjunction with the

private sector, manage most of the civilian applications of space technology. Recently the Department of Transportation (DOT) has been charged

with promoting and regulating private sector

space transportation systems.23 Strengthening U.S.

competition with other space-capable nations, or

improving our ability to cooperate effectively, will

require careful attention to the means of coordinating the activities of all of the Federal agencies

with an interest in space with each other and with

those of the private sector. *

For example, the 1984 fiscal year authorization

legislation for NASA, H.R. 5154,24 amended the

NAS Act to include a provision directly related

to private sector activity in space:

The Congress declares that the general welfare of the United States requires that the National Aeronautics and Space Administration

seek and encourage, to the maximum extent

possible, the fullest commercial use of space.

ZJThis assignment was made by President Reagan. Congress k

now considering DOT’s role in space transportation. [Public Law

98-575, signed Oct. 30, 1984, now gives DOT regulatory authority

over private sector launch activities.]

‘~he Government must also authorize and supervise private sector activities in accordance with international treaties and agreements on space.]

ZA[public Law 98-361.1
Ch. l—Executive Summary ● 2 1

This provision directs NASA to involve itself in

the commercial exploitation of space. Yet NASA,

by itself, is not well-equipped either to choose specific technologies for commercial exploitation or

to foster the creation of new space industries.

Seeking the fullest commercial use of space will

require the direct involvement of those agencies

versed in domestic commerce and regulation, international trade, and foreign affairs, Government

decisions regarding commercial space activities

must above all be responsive to how the actual

markets and industries involved work, and how

international ,competition in space industries relates to international competition generally.

In order to foster effective coordination, it will

be important for Congress to designate clearly a

lead agency for regulating a particular private sector activity. As new specific commercial space

technologies mature, agencies other than NASA

should be given primary responsibility for their

oversight. The recent designation of DOT as the

lead agency for private space transportation services indicates how the responsibilities for overseeing commercial space activities 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 Department 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

Cooperation and competition with other nations are not ends in themselves; they are merely

tools with which to carry out long-term national

security, political, and economic objectives. Nations have cooperated for humanitarian reasons,

for example, in the U.S. Advanced Telecommunications Satellite experiments of the 1970s or the

current U. S., Canadian, French, and Soviet SARSAT

project. They have also cooperated to obtain

technology or resources which would later allow

them to compete economically or politically. Examples of this include ESA’S work with the United

States on Spacelab and NASA’s cooperative programs involving remote sensing. European competition with the United States in launch services

and remote sensing has helped to establish Europe

as an important partner for cooperation with

other nations.

If the United States wishes to retain an international leadership role in the continued exploration, development, and use of space it must be

effective at both cooperation and competition.

A clear understanding of long-term national goals

and objectives and a workable division of responsibilities and coordination among the various Federal agencies as well as between Government and

the private sector will therefore be essential.

Photo credit: European Space Agency

Artist’s view of the European-developed EURECA

space carrier being deployed from the U.S. Space

Shuttle with the Canadian-built remote

manipulator arm

Chapter 2

Introduction
Contents

Page

Foreign Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Private Sector Space Activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

International Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Organization of the Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Chapter 2

INTRODUCTION

International cooperation and competition in

space science and technology have played important roles in the U.S. civilian space program

since its inception in 1958. Although the program

was primarily established to meet a competitive

challenge from the Soviet Union, the National

Aeronautics and Space Act identifies international

cooperation as a fundamental U.S. goal and

declares that “activities in space should be

devoted to peaceful purposes for the benefit of

all mankind” (sec. 102a).

For many years only the United States and

the Soviet Union had the capacity to build and

launch complex space systems. In the last decade, the Western European countries and Japan

have also succeeded in developing advanced

space systems; in large part they have done this

by assimilating U.S. technology and expertise

through cooperative scientific and commercial

ventures with the United States.

In the 1980s, advanced foreign capabilities

have or will become comparable to those of the

United States in virtually every area of civilian

space technology except manned flight. Foreign

accomplishments now provide new opportunities for bilateral and multilateral cooperation; they

also present the challenge of greatly increased

commercial, political, and military competition.

Significant changes have also occurred in the

U.S. relationship with the developing world. A

few developing countries, resolved upon using

space technology to promote their economic

growth, have begun to press for the establishment

of international organizations and legal regimes

with the power to ensure equitable access to

space systems and resources. Such developments

are often inconsistent with U.S. policies and objectives, particularly those designed to encourage private competition and investment in space

activities. This has occasioned a reassessment of

the traditional U.S. support for certain cooperative activities, particularly those sponsored by the

United Nations or its specialized agencies.

Because of their interest in maintaining U.S.

leadership in space technology, in capturing the

economic benefits of commercial space activities, and in using space technology as an instrument of foreign policy, the House Committee on

Science and Technology and the Joint Economic

Committee asked the Office of Technology Assessment (OTA) to prepare this report. ’ The committees requested an assessment of “international

cooperation and competition in space, ” that

would “compare the technical status of foreign

space systems . . . and investigate ways that U.S.

space applications and space science programs

could be used more effectively to further U.S.

commercial and foreign policy interests. ” They

asked OTA to examine U.S. relationships with developing as well as industrialized countries and

to offer suggestions about how “this country can

work together with other nations for mutual benefit. ”

This study builds upon the OTA report Civil--

ian Space Policy and Applications. 2 That assessment identified international competition in space

technology as a critical issue, described the current and projected space programs of other countries, and discussed domestic initiatives to make

better use of our own space assets. During the

course of the current study, OTA also published

two technical memoranda each of which highlighted important issues of cooperation and competition. 3 UN/SPACE ’82: A Context for International Cooperation and Competition focused on

U.S. participation in the second United Nations

‘ Letter from Congressmen Don Fuqua, Ronnie G. Flippo, Larry

Winn, Jr., and Harold C. Hollenbeck of the U.S. House of Representatives Committee on Science and Technology to the Honorable

Ted Stevens, Chairman, Technology Assessment Board, Mar. 8,

1982; Letter from the Honorable Roger W. Jepsen, Vice Chairman,

Joint Economic Committee to the Honorable Ted Stevens, Chairman, Technology Assessment Board, Mar. 24, 1982.

lcivillan Space po/icy and Applications (Washington, IX: LJ. s.

Congress, Office of Technology Assessment, OTA-STI-I 77; June

1982).

3

Technical memoranda are issued on specific subjects analyzed

in recent or ongoing OTA projects, They are issued at the request

of Members of Congress who are engaged in committee legislative

actions that are expected to be resolved before OTA completes

its assessment.

25
26 ● Internationa/ Cooperation and Competition in Civilian Space Activities

conference on the Exploration and Peaceful Uses

of Outer Space.4 The conference offered a window through which to view the needs of the developing world, the formation of international

space policy, the roles that the United States and

its agencies play in this process, and the potential effect of the process on U.S. public and private interests. Remote Sensing and the Private

Sector: Issues for Discussion investigated the recent proposal to transfer the meteorological and

land remote sensing satellite systems to the private sectors Among other things, it discussed the

size of the market, public good aspects of remote

sensing, U.S. Government (including military and

intelligence) needs for data, and the use of remotely sensed data to further foreign policy objectives.

In order to identify and refine the issues presented in this report, as well as the two previously

published technical memoranda, OTA convened

several workshops that assembled experts from

different subject areas:

Space Technology and Foreign Policy: UNlSPACE ’82 offered an opportunity to review the

development of international space policy, the

role that the United States and its various agencies play in this process, and the potential effect

4UNISPACE ’82: A Context for International Cooperation and

Competition–A Technical Memorandum (Washington, DC: U.S.

Congress, Office of Technology Assessment, OTA-TM- ISC-26, March

1983); requested by the House Science and Technology Committee and the Joint Economic Committee.

‘Remote Sensing and the Private Sector: Issues for Discussion—

A Technica/ Memorandum (Washington, DC: U.S. Congress, Office of Technology Assessment, (OTA-TM-ISC-20, March 1984); requested by the House Science and Technology Committee and the

House Government Operations Committee.

of this process on public and private U.S. interests, After OTA completed the first draft of the

UNISPACE ’82 Technical Memorandum, it held

a workshop to discuss the draft and the issues

raised by U.S. participation in international conferences.

Commercialization of Remote Sensing: OTA organized two different workshops on this subject.

In the first, participants drawn primarily from the

private sector discussed those broad issues implicit in the transfer of remote sensing systems

related to international trade, use of remotely

sensed data in foreign policy, public good aspects

of land and meteorological remote sensing, and

finally, national security issues. The second workshop, composed solely of participants from the

executive agencies, discussed most of the same

issues from the standpoint of Government policy and plans.

Internationa/ Trade in Space Equipment: This

workshop discussed the applications and effects

of current rules on trade in space-related services, equipment, and products. Additional issues

discussed included potential Government responses to “unfair” practices in space markets,

the likely evolution of the industrial organization

of the space transportation industry, and the potential effect of deregulation on the international

communications industry.

OTA is grateful to the workshop participants

and to the many others who provided information or reviewed portions of this draft or of the

drafts of the two technical memoranda. Their

helpful and timely comments and suggestions

helped to make it possible to complete this

report.

FOREIGN COMPETITION

Having begun in many cases by building com- hicles to launch them. Although no single counponents and subsystems for U.S. and INTELSAT try can yet match the U.S. range of technical

satellites, European and Japanese capacities now 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 sens- in specific areas, such as expendable launch

ing, and weather observation, as well as the ve- vehicles and satellite ground stations.
Ch. Z—Introduction ● 2 7

Until recently, the United States benefited from

the space programs of other nations because they

provided markets for U.S. goods and services.

Now, even though the overall market is increasing, foreign competition could threaten U.S. firms

with the loss of significant sales and the country

as a whole with potential loss of prestige and political influence. Already, technology developed

by the European Space Agency (ESA) supplies a

large portion of the satellite communications and

space transportation needs of the European community. I n 1985, the French SPOT system is expected to begin supplying commercial remotely

sensed data internationally. The Third World markets for space technology, once completely dominated by U.S. producers, are gradually opening

to European and Japanese sellers.

These advances are part of an overall evolution of European and Japanese expertise in advanced technology. Influential opinion sectors in

Europe and Japan believe that they must compete fully in advanced technology, and associated management skills as a prerequisite for

economic growth, political status, and national

security in a world dominated by the two superpowers. To obtain the necessary technology and

skills they have targeted specific industries for special attention, particulady industries where international competition was thought to be important.

Space technology is a prime exemplar of this phenomenon; it has not only been promoted domestically through research and engineering programs, but also imported from the United States

via educational and scientific exchanges and

through the activities of U.S. aerospace and communications firms.

In part because of its long-standing position as

the unchallenged leader in space applications

technology, the United States has been slow to

recognize and respond to foreign challenges. This

report offers a range of policy options which attempt to define appropriate roles for Government

in its task of maintaining technological leadership

in an increasingly competitive international environment.

PRIVATE SECTOR SPACE ACTIVITIES

The Carter and Reagan Administrations and

Congress have encouraged private sector investment in space technology. Consequently, in addition to expanding its major role in satellite

communications, the U.S. private sector would

like to offer space transportation services. It may

soon be obtaining and selling satellite remote

sensing data, and has also offered limited expressions of interest in materials processing in space.

The U.S. Government attempts to avoid competing with private commercial activities. However, since the development and use of space

technology is a long-term, expensive undertaking

and certain specialized government needs cannot always be supplied by the private sector, governments have traditionally been the driver behind the evolution and growth of space technology. This preeminent government role, combined

with the political sensitivity of the use of technologies that by nature transcend national boundaries, has inhibited the transfer of space technology to private sector hands.

In remote sensing and space transportation, although the U.S. Government creates a large part

of the total demand for these services, it is also

a potential competitor to private sector efforts.

This report offers policy options which attempt

to resolve the conflict between the Government’s

responsibilities for encouraging private sector investment in space and its responsibilities for maintaining the technological vitality of the Nation.
28 ● lnternationa/ Cooperation and Competition in Civilian Space Activities

INTERNATIONAL COOPERATION

International cooperation for peaceful purposes

has been a central element of the U.S. civilian

space program since its inception. Cooperative

activities have taken primarily three forms: 1 )

bilateral agreements with other industrialized

countries, usually with a technological goal; 2)

multilateral agreements in United Nations and

other international forums to develop the legal,

regulatory, or organizational norms for using

space; and 3) assistance projects undertaken by

the U.S. Agency for International Development,

with the help of the National Aeronautics and

Space Administration (NASA) and the National

Oceanic and Atmospheric Administration (NOAA),

which use space technology to benefit developing nations.

To make up for lack of individual size, European countries have also developed methods of

cooperating multilaterally in order to pool financial and technical resources. The multinational

ESA is coordinating projects in advanced satellite communications, ocean and land remote

sensing, and expendable launch vehicles. It is also

the lead agency for extensive bilateral agreements

with the United States in space science and in

the design and construction of Spacelab, the

manned Shuttle laboratory. In Japan, the national

space agency, NASDA, is developing its own family of launch vehicles (based on technology leased

from U.S. corporations), as well as advanced

communication satellites and ocean remote sensing systems. Japan also has an active space

science program. Much of this work is being pursued in cooperation with U.S. aerospace and

electronics firms as well as with NASA. The Soviet Union cooperates most actively with allied

socialist states. More recently, it has developed

programs with India and also with France.

In the past 25 years, the United States has engaged in hundreds of bilateral and multilateral

cooperative ventures in every area of space technology. U.S. launchers have orbited complete satellites and instrument payloads for dozens of

countries. As others develop indigenous space

capabilities they become potentially valuable

partners for cost-constrained U.S. projects. Yet,

cooperation in any high-technology venture can

result in some transfer of valuable technical

“know-how.” As private sector commercial activities increase there will be less Government incentive to cooperate because successful cooperation may lead to a decrease in market share

or create new competitors.

The U.S. cooperative relationship with developing countries is also undergoing a period of significant change. In the past, the United States

used the Landsat or the Advanced Telecommunications Satellite (ATS) programs to demonstrate

how space technology could benefit the developing world. In recent times, however, the

United States has come under strong criticism

from developing countries for failing to support

an agenda dedicated to equal and guaranteed access to space technology and resources.

The dominant dispute over the use and acquisition of space technology is between the industrialized and the developing countries, In general, the developing countries seek to gain greater

access to, and control over, the resources of outer

space and the advanced space technologies of

the industrialized nations. They do this primarily by advocating legal and regulatory regimes for

space activities in international organizations,

where they outnumber and can outvote industrialized countries. The developing countries also

promote the establishment of multilaterally funded

and controlled bodies to transfer know-how and

technology to the Third World. Industrialized

countries, on the other hand, fear turning over

control to multilateral organizations. In the

United States, the ideological emphasis has

shifted from a policy of using space for “all mankind,” to a desire to encourage the private exploitation of space. Yet private exploitation of

space resources assumes acquiescence by other

countries in U.S. goals. Increased private sector

activities will require political as well as market

accommodation by all countries,
Ch. Z—Introduction . 29

ORGANIZATION

The main body of this report begins with discussions of cooperation and competition in chapter 3 and chapter 4. These chapters provide the

conceptual and institutional context essential to

understanding the technology-oriented policy options that appear in the report. The interaction

between cooperation and competition is demonstrated concretely in each of the following

technology chapters.

Chapter 5 describes the technology and the

current issues involved in space transportation.

It discusses commerce in space transportation

equipment and services and the relative merits

of their individual needs and products. Shuttle

and Ariane price competition, launch vehicle demand, the role of the private sector and the longterm effects of government owned or sponsored

technology are all examined. It also considers the

history and future of cooperation in space transportation.

Chapter 6 examines international cooperation

and competition i: I satellite communications, the

only fully commercialized sector of space technology, in the context of the international telecommunications industry as a whole. International satellite communications, which has been

highly structured by regulation in the past, is now

an arena in which a deregulated U.S. domestic

telecommunications industry is poised to implement new technologies in international markets

if it can gain access to them. This chapter analyzes how the outcome of technological competition between fiber optic cables and communication satellites could affect the long-term

demand for satellite communications services and

equipment and how economic, political, and regulatory factors could affect this competition. It

analyzes U.S. policy toward international institutions like INTELSAT and the ITU, NASA’s advanced communication satellite research proOF THE REPORT

gram, international trade in telecommunications

equipment and services, and international facilities regulation.

Chapter 7 focuses on remote sensing and the

technical, political, and economic issues involved

in the operation of this technology. It pays particular attention to the worldwide market for

meteorological, land, and ocean remote sensing

services and summarizes civilian needs of the

U.S. Government. The United States is attempting to transfer land remote sensing functions (the

Landsat system) to the private sector. This chapter examines the transfer process and explores

policy issues related to it. Because several foreign

governments are planning to launch remote sensing systems, this chapter summarizes the attributes of these systems and examines the competitive challenge the systems pose for the United

States.

Chapter 8 examines foreign and U.S. materials

processing research and assesses the potential for

the development of marketable products. It also

discusses competitive foreign services and equipment. The value of pursuing cooperative MPS

programs is discussed in detail, particularly with

reference to basic scientific research.

Chapter 9 describes current cooperative and

competitive aspects of space science. [t details

the role of cooperation in reducing costs and expanding possible activities, and discusses the

emergence of competition as a new factor in

space science.

Finally, chapter 10 offers a broad examination

of the cooperative and competitive policy options

presented in the technology chapters and discusses the wider issues posed by U.S. involvement in international civilian space activities. The

chapter suggests several options for addressing

these issues.
Chapter 3

INTERNATIONAL SPACE COOPERATION
Contents

Introduction. ., ... , , . . .

International Cooperative

United States . . . . . . . .

The Soviet Union . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Programs Worldwide . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

European Space Agency (ESA) . . . . . . . . . . . . . . . . . . . . ... , . . . . . . . . . . . . . . .

The United Nations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

International Telecommunications Satellite Organization (lNTELSA

International Maritime Satellite Organization (lNMARSAT) . . . . . .

World Meteorological Organization. . . . . . . . . . . . . . . . . . . . . ... ,

“) . . . . ~ . . .

. . . . . . . . .

. . . . . . . . .

Issues in Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

List of Tables

33

35

35

41

43

45

49

50

51

52

3-1.

3-2.

List

Table No. Page

NASA Cumulative Statistical Summary Through Jan. 1, 1984 . . . . . . .......37

Current Membership of COPUOS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......46

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

activities has been a major component of U.S.

space policy ever since specific provisions for cooperation were included in the 1958 National

Aeronautics and Space Act (NAS Act). Later

amendments strengthened the role of international cooperative agreements in pursuit of scientific and technical research. Because each successive administration and Congress have

perceived international cooperation in civilian

space activities to be beneficial to U.S. interests,

U.S. involvement in international cooperation has

stood the test of time and the annual appropriations process.

In the early days of the Space Age, the United

States played a leading role in establishing the

international legal regime for outer space. It was

also a major force in establishing the multilateral

communications organizations, INTELSAT and (to

a lesser extent) INMARSAT, and in making the

results of remote sensing from space available

worldwide; in addition, it offered participation

in scientific space projects to other countries (see

fig. 3-l).

Recently, the National Aeronautics and Space

Administration (NASA) opened its manned space

flight program to other nations by flying foreign

mission specialists on the Shuttle.

Cooperative programs in space, managed principally by NASA, but also by the National Oceanic

and Atmospheric Administration (NOAA) and the

Agency for International Development (AID),

have supported the following U.S. technological,

political, and economic goals:

. Technological:

–Affording access to foreign countries for

tracking stations, launch sites, and ground

receiving stations.

–Expanding research opportunities for U.S.

scientists by sharing costs and acquiring/

using knowledge from other countries.

–Allocating scarce resources such as the

geostationary orbit.

● Political:

–Promoting international peace and reducing tensions through mutual understanding.

–Promoting greater openness and access

to information.

–Increasing U.S. prestige by giving high international visibility to U.S. technical and

scientific accomplishments.

–Affording political access to countries

where U.S. influence is otherwise weak.

● Economic:

–Promoting economic development in developed as well as developing nations.

–Developing global markets for U.S. spacerelated goods and services.

–Sharing costs of expensive, long-term

programs.

The very success of U.S. international cooperative programs has helped intensify international

challenges to U.S. leadership in space science

and space applications. The pressure comes not

only from other nations competing in space.

Developing countries, voting in blocs, now challenge U.S. leadership in international organizations that deal with space matters. These challenges raise critical questions about the future of

Us.

1.

2.

3.

cooperative space projects:

How can the United States use its participation in international multilateral organizations and meetings on space to promote U.S.

interests?

How can the United States cooperate most

effectively with the developing countries?

On what terms might the United States most

profitably cooperate with the industrialized

nations?

This chapter summarizes the history of U.S. international cooperation in civilian space activities and describes its major accomplishments. it

describes foreign cooperative programs and discusses issues arising from an altered international

outlook with respect to space are discussed.

33
34 ● Internationa/ Cooperation and Competition in Civilian Space Activities

-r

■
Ch. 3—international Space Cooperation . 35

INTERNATIONAL COOPERATIVE PROGRAMS WORLDWIDE

United States

Early Legislation

The history of cooperation in the use of outer

space for peaceful purposes bears the indelible

imprint of the U.S. Congress. Influential Members of both houses, including Speaker of the

House John W. McCormack and Senate Majority

Leader Lyndon B. Johnson, recognized as early

as 1957 that a strong national space program offered a basis for international cooperation in

activities which could extend peaceful pursuits

on a worldwide frontier.

On January 15, 1958, Senator Johnson called

for U.S. leadership in developing the capacity to

explore the space environment. lie suggested

that we invite the scientists of other nations to

work with U.S. scientists on projects to extend

the frontiers of mankind and to find solutions to

the problems facing the world:l

Our President . . . has a rare opportunity to

lead in this labor boldly and forcefully and in the

vigorous pursuit of peace; he will find the N a -

tion undivided in its support . , . it would be appropriate and fitting for our Nation to demonstrate its initiative before the United Nations by

inviting all member nations to join in this adventure into outer space together. The dimensions

of space dwarf our national differences on Earth.

Later, on March 5, 1958, President Eisenhower

approved a proposal for dividing control of space

activities between the Department of Defense,

which was to retain projects primarily associated

with military requirements, and the National Advisory Committee for Aeronautics (NACA), which

was to be the nucleus of a new civilian agency.

The President’s Science Advisory Committee published “Introduction to Space” on March 26,

1958, and on April 2, the President sent a special

message on “Space Science and Exploration” to

Congress with a draft proposal for legislation. The

message stated that “a civilian setting for the

administration of space functions will emphasize

‘Address by Senator Lyndon B. Johnson before a meeting of the

Columbia Broadcasting System Affiliates, Shoreham Hotel, Washington, DC, Jan. 14, 1958,

the concern of our Nation that outer space be

devoted to peaceful and scientific purposes.”

Although the Eisenhower Administration and

Congress agreed on dividing space activities between military and civilian agencies and expanding NACA into the National Aeronautics and

Space Administration, the special congressional

space committees made several changes in the

administration’s bill, particularly with regard to

the need for international cooperation. These actions reflected the testimony of scientists and

engineers who had been engaged in global projects of the International Geophysical Year. According to Senate Resolution 327, Report No.

1925, 85th Congress, 2nd session, July 24, 1958:

Particular attention should be paid to preserving and extending the patterns of cooperation

which were formed during the International

Geophysical Year. The IGY programs have been

an inspiring example of cooperation between

the scientists of 66 nations working through their

own professional organization, the International

Council of Scientific Unions (ICSU) and its

Special Committee, the CSAGI (Comite Sp&

cial de l’Ann~e Geophysique Internationale).

Another pattern of cooperation developed between scientists and their governments when

public funds and facilities were provided for IGY

research projects. Cosmic research and development can become an important force for

world peace. We must not lose what has thus

far been gained both on the international and

national levels by scientists working with each

other and with their governments.

The Senate also took account of certain technical facts:

. . . that the orbits of satellites are global in

nature and pass over national boundary lines;

tracking stations were needed throughout the

world; and international space cooperation

could promote peaceful relations among states

and form the basis for avoiding harmful and destructive actions in space. (Emphasis OTA.’ S.)

The NAS Act begins with a Declaration of Policy and Purpose:

The Congress hereby declares that it is the policy of the United States that activities in space
36 . Internatjonal cooperation and Competition in Civilian Space Activities

should be devoted to peaceful purposes for the

benefit of all mankind. (Sec. 102 (a).)

The policy declaration provides that:

The Administration, under the foreign policy

guidance of the president, may engage in a program of international cooperation in work done

pursuant to this Act, and in the peaceful application of the results thereof, pursuant to agreements made by the President with the advice

and consent of the Senate (sec. 205).

Recognizing that not all of NASA’s international

arrangements could be in the form of treaties subject to the advice and consent of the Senate,

President Eisenhower, in signing the bill on JUly

29, 1958, stated that while treaties may be made

in this field, the section does not preclude “less

formal arrangements for cooperation” since

otherwise the section would “raise substantial

constitutional questions. ” A later (1975) amendment incorporating provisions on Upper Atmospheric Research further specified that NASA,

under the President’s direction and after consulting the Secretary of State “shall make every

effort to enlist the support and cooperation of

appropriate scientists and engineers of other

countries and international organizations. ”2

NASA International Program

In keeping with the spirit of the 1958 NAS Act,

NASA has developed an extensive program of international cooperation which has opened the

entire range of its space activities to foreign participation. Cooperation by the United States with

other nations (who pay their share of the cost of

a project on a fully proportional basis) contributes to the U.S. space research program and to

broader national objectives by:

●

●

●

●

stimulating scientific and technical contributions from abroad,

enlarging the potential for developing the

state of the art,

providing access to foreign areas useful for

data collection during space, flights,

enhancing satellite experiments through foreign ground-support programs,

ZI nternational Aspects of the National Aeronautics and Space Act

of 1958, as amended (72 Stat. 426).

●

●

●

developing cost-sharing and complementary

space programs,

extending international ties among scientific

and national communities, and

supporting U.S. foreign relations and foreign

policy.

Cooperative activities have ranged from launching foreign-built spacecraft on U.S. launchers to

ground-based studies, analysis of data, and information exchanges. They include, for example,

contributions of experiments or payloads to be

flown in space by NASA, joint projects to develop

flight hardware, use of data or lunar samples provided by NASA missions, training, visits, and joint

publication of scientific results. In addition, NASA

provides certain services on a reimbursable basis,

including launching satellites and data and tracking services (table 3-1 ).

Cooperative programs and activities involving

nations and groups of nations are established by:

1) agency-to-agency memoranda of understanding (MOUs), 2) agency-to-agency letter agreements, or 3) more formal intergovernmental

agreements. The relative complexity, total shared

cost, and duration of the program or project dictate in part the type of arrangement used to establish the cooperative effort.

Bilateral arrangements between the United

States and one other country are by far the most

common. NASA prefers bilateral activities over

multilateral ones because they are substantially

less complex and easier to manage.3 Because of

the complexities inherent in international cooperation by government agencies, the fewer involved the better. Technical and cost difficuIties

also arise in the joint development of hardware.

For this reason, NASA has found that the most

desirable arrangements involve the development

of separate spacecraft or separate major components. In such missions the management and

technical interactions can be kept simple.4 Joint

ventures with the European Space Agency (ESA)

tend to have some of the complexity of multina3UNISPACE ’82: A Context for Cooperation and Competition—

A Technica/ Memorandum (Washington, DC: U.S. Congress, Office of Technology Assessment, OTA-TM-ISC-26, March 1983), app.

B (prepared by NASA).

4See, for example: Working Group Report on Space Science, i n

Global Space Activities: An AlAA Assessment, 1981, pp. 52-53.
Ch. 3—international Space Cooperation . 37

Table 3-1 .—NASA Cumulative Statistical Summary Through Jan. 1, 1984

Cooperative arrangements

Cooperative spacecraft projects . . . . . . . . . . . .

Experiments on NASA Missions:

Experiments with foreign principal

investigators . . . . . . . . . . . . . . . . . . . . . . . . .

US. experiments with foreign co-investigators

or team members . . . . . . . . . . . . . . . . . . . . .

U.S. experiments on foreign spacecraft . . . .

Cooperative sounding rocket projects . . . . . . .

Joint development projects . . . . . . . . . . . . . . . .

Cooperative ground-based projects:

Remote sensing . . . . . . . . . . . . . . . . . . . . . . . .

Communication satellite . . . . . . . . . . . . . . . . .

Meteorological satellite . . . . . . . . . . . . . . . . . .

Geodynamics. . . . . . . . . . . . . . . . . . . . . . . . . . .

Space plasma . . . . . . . . . . . . . . . . . . . . . . . . . .

Atmospheric study . . . . . . . . . . . . . . . . . . . . . .

Support of manned space flights . . . . . . . . .

Solar system exploration. . . . . . . . . . . . . . . . .

Solar terrestrial and astrophysics . . . . . . . . .

Cooperative balloon and airbrone projects:

Balloon flights. . . . . . . . . . . . . . . . . . . . . . . . . .

Airborne observations . . . . . . . . . . . . . . . . . . .

International solar energy projects . . . . . . . . . .

Cooperative aeronautical projects . . . . . . . . . . .

U.S./U.S.S.R. coordinated space projects . . . . .

U.S./China space projects . . . . . . . . . . . . . . . . . .

Scientific and technical information

exchanges . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Number of countries/

international

organizations

8

14

11

3

22

5

53

51 (27)b

44 (122)C

43

38

14

21

8

25

9

12

24

5

1

1

70

Number projects/

invest igat ions/actions

completed or in

progress as of 1/1/84

38

73

56

14

l,774a

9

163

19

11

20

10

11

2

10

11

14

17

9

40

9

5

3

aNumber of actuai launches.

bAIDSAT Demonstrations,

CAPT stations,

SOURCE: National Aeronautics and Space Administration

tional ventures (although they are considered by

NASA to be bilateral), since ESA represents a

muItinational consortium and is subject to more

complex internal political pressures than a national agency would be.

Some examples of major cooperative programs

illustrate the breadth of the U.S. international

space program:5

● Cooperative space projects involve cooperation between the United States and other

nations to develop, launch, and operate

communications satellites, scientific satellites, and Earth sensing satellites. A typical

example is the Communications Technology

Satellite (CTS), a joint effort with Canada in

5A complete list of NASA’s cooperative programs can be found

in 25 Years of NASA International Programs, NASA, January 1983.

1976. Canada built the satellite at its Communications Research Center (CRC), using

special hardware supplied by the United

States, which enabled the CTS to transmit at

high power levels to small terminals. NASA

launched the satellite and shared operations

with Canada.

Foreign experiments on NASA missions include, for example, an investigation of composite materials processing in space conducted by the Japanese National Research

Institute for Metals in 1973 aboard the U.S.

Skylab. The University of Bern, Switzerland,

mounted a series of experiments on U.S.

manned missions between 1969 and 1973

to measure the composition of solar wind.

The Netherlands’ Dekt Technical Institute

built a telescope to measure cosmic ray elec-
38 ● International cooperation and Competition in Civilian Space Activities

●

●

●

around the world.

trons, which it mounted on NASA’s fifth Orbiting 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

has involved scientific research with many

nations in all regions of the world. The purpose of these flights is usually upper-atmosphere research, since sounding rockets follow

a suborbital trajectory. An example is a series

of flights in 1980 on NASA rockets carrying

German and Norwegian experiments to study

energetic processes in the upper atmosphere.

Foreign ground stations are evidence of the

widespread use of land and meteorological

remote sensing. Ten foreign Landsat receiving, processing, and data distribution facilities now exist around the world. Some 125

countries own meteorological satellite receiving stations. Remote sensing projects

have resulted in research on the oceans,

winds, waves, snow cover, and snow melting. When nations report their national space

activities to the United Nations, the most frequent (and often the only) entry is a remote

sensing agreement on the use of Landsat data

and derived information products to solve

resource problems.

Photo credit National Aeronautics and Space Administration

The Active Magnetospheric Particle Tracer Explorer

(AMPTE) spacecraft is being encapsulated atop the

Delta launch vehicle in preparation for launch (1984).

AMPTE involves the United States, the United

Kingdom, and the Federal Republic of Germany.

●

●

Cooperative ground-based projects cover a

wide spectrum of cooperative research and

data analysis in such fields as remote sensing, communications, meteorology, and

geodynamics. These often involve a combination of ground measurements with associated satellite data received at foreign

stat ions.

Cooperative educational projects.6 The Satellite Instructional Television Experiment

(SITE) was a cooperative effort (1 975-76) between NASA, which furnished the ATS-6

communications satellite, and the Indian

Space Research Organization, which develb“United States Civilian Space Programs 1954- 1978,” report prepared by Congressional Research Service for House Subcommittee on Space.
Ch. 3—international Space Cooperation ● 3 9

oped programs on agriculture and family

planning to broadcast to approximately

2,400 Indian villages. In 1976 the Agency for

International Development (AID) and NASA

sent films and discussions on remote sensing via the ATS-6 experimental communications satellite to 27 participating developing

countries. (Later the ATS-6 was moved to locations above the Western Hemisphere for

further cooperative demonstrations.)

● U.S./U.S.S.R. cooperation. * These projects

date from 1962, when NASA and the U.S.S.R.

Academy of Sciences cooperated on meteorological studies. Between 1962 and 1964

there were experiments on telecommunications, and from 1962 to 1973 on geomagnetic mapping.

These early joint activities were based on

agreements between NASA and the Soviet

Academy of Sciences. In 1972, however, an

intergovernmental agreement was reached

between the Nixon Administration and the

Soviet Government. One outcome of this

agreement was the Apollo-Soyuz Test Project (ASTP), which culminated in 1975 in the

only joint manned space flight between the

two countries. Other areas of cooperation

established under the agreement included

meteorology, the natural environment, nearEarth space, the Moon and planets, and

space biology and medicine. After the highly

successfuI ASTP mission, the agreement was

renewed by President Carter in 1977.

The centerpiece of the renewed agreement was the commitment to plan for a joint

Salyut/Shuttle program. However, in 1978

and 1979 a series of events on the international political scene led to a progressive

hardening in East-West relations. This trend

culminated with the Soviet invasion of Afghanistan in late 1979 and the imposition of

martial law in Poland. As part of the U.S.

sanctions against the Soviet Union, the May

1977’ agreement was allowed to expire without renewal in 1982. The only remnant was

“See Issues in U. S.-Sov\et Cooperation In Space (Washington,

DC: U.S. Congress, Office of Technology Assessment, in press), for

a comprehensive discussion of U.S./Soviet cooperation.

The “1 972 Intergovernmental Agreement on Cooperation in the

Exploration and Use of Outer Space for Peaceful Purposes. ”

●

a low level of information exchange in space

medicine and biology.

Recently, the climate in Congress and the

Administration for renewed cooperation in

space has improved. In the spring of 1984,

members of the Senate Committee on Foreign Relations expressed interest in renewing and expanding U.S. cooperation with the

Soviets. In July, the President proposed a

joint U.S./Soviet mission to demonstrate the

feasibility of space rescue. Such a mission

cou Id serve as the cornerstone to increased

cooperation in space with the Soviets. These

interests culminated in a bill signed by President Reagan on October 30, 1984 (Public

Law 98-562). Testimony presented at hearings on September 13, 1984 concerning the

Senate bill indicated cooperation with the

Soviets in several scientific disciplines related

to space would be fruitful.8

The United States and the Soviet Union are

both cooperating with France and Canada

in the COSPAS/SARSAT search and rescue

program. (See app. A.) The United States is

also cooperating with the Soviet Union,

through ESA, on the International Halley

Watch (see ch. 9).

The United States and China are cooperating on a communications broadcast satellite

system, a Landsat ground receiving station,

and aeronautical technology. The Shanghai

Observatory of the Chinese Academy of Science is interested in cooperating with NASA

on measuring Earth’s crustal movements.

NASA’s international program also encompasses resident research associateships for senior foreign scientists, international fellowships,

technical training for foreign scientific and technical personnel, and hosting foreign officials and

scientists who visit NASA’s facilities.

BPresident Reagan discussed the subject in a meeting with Soviet representatives in June 1984, and in a speech on June 27. House

Resolution 536 and the companion Senate Resolution 236 proposed

the renewal of cooperation. See Issues In U.S./Soviet Cooperation

in Space (U.S. Congress, Office of Technology Assessment, Technical Memorandum, in press); statement of Dr. Bernard Burke, before the Senate Committee on Foreign Relatlons, Sept. 13, 1984;

“President Signs Bill Aimed at Restoring Cooperation in Space, ”

Aviation Week and Space Technology, Nov. 5, 1984, p, 16; “U.S.

Plans Soviet Talks on Joint Manned Mission, ” A\iation Week and

Space Technology, Jan. 7, 1985, pp. 16-18.
40 ● Internatjona/ Cooperation and Competition in Civi/ian Space Activities

The U.S. capacity for international cooperative

programs is dependent on a strong U.S. national

program; if civilian space budgets become overconstrained, it becomes difficult to budget for the

U.S. (NASA) share of planned joint international

projects. In one case the United States had to

back out of a major planned project because of

budgetary constraints:

. . . NASA’s success in international participation became a political liability in 1980-81 when,

in order to absorb its share of the Administration’s budget reductions, NASA found it necessary to reduce funding in one of its major science

missions. The problem was that all three of its

major science projects had significant international participation: Space Telescope (with ESA),

Galileo/Jupiter orbiter probe (West Germany)

and the International Solar Polar Mission (ESA).

Because of the high cost of this international participation in space science, NASA, for the first

time in its history, had to step back from an international commitment. NASA terminated development of the U.S. satellite for the international Solar Polar Mission. The project has been

subsequently restructured and now includes

only a single satellite built by Europe, but to be

launched by NASA on the space Shuttle.9

Budget stringency has limited some of NASA’s

projects, but at the same time it has led to a different form of cooperation, relying on the newly

developed capacities of other nations.

A prime example is the upcoming return of

Halley’s Comet. After reviewing its options, the

United States decided not to mount a mission

to Halley’s Comet, while ESA, the Soviet Union,

and Japan all decided to develop encounter missions. However, in order to provide important

data and assure that U.S. scientists and the world

scientific community would be able to fully participate in this historic event, NASA organized

an International Halley Watch (IHW) program.

IHW is an international network of groundbased observatories which will provide significant scientific and ephemeris [positional] data

important for assisting the three Halley encounter missions . . . By sharing leadership in

exploring the heavens with other qualified

space-faring nations, NASA stretches its own resources and is free to pursue projects which, in

‘UNISPACE ’82, op. cit., app, B.

the absence of such sharing and cooperation,

might not be initiated.10 (Also see the more

detailed discussion of IHW in ch. 9.)

Cooperation in building space infrastructure is

perhaps the most important cooperative activity

that the United States will embark upon this decade. It is keeping interested governments well informed of U.S. developments.’} Japan and ESA

have also funded their own studies of permanent

stations in space.12 Recently, Canada and Japan

have signed agreements with the United States

entering upon phase B (the preliminary design

phase) of the space station planning. * ESA is expected to sign a similar agreement in June 1985.

Most future NASA international cooperation

will raise a question as to whether bilateral arrangements can be emphasized as they have in

the past. As shown by examples of multilateral

cooperation in science such as the International

Halley Watch, and on an even greater scale by

international organizations governing satellite

communications (i.e., INTELSAT and INMARSAT),

multilateral cooperative efforts are manageable

and may still be appropriate for certain technologies (e. g., navigation and search and rescue) in

this era of emerging commercial competition. primarily because of the network of intergovernmental cooperation required, such technologies

might not be implemented without multilateral

cooperation.

Other U.S. Cooperative

Programs in Space

U.S. AGENCY FOR INTERNATIONAL

DEVELOPMENT (AID)

AID has over the years utilized new technology to support rural health, agriculture, and education programs in the Third World. In the early

1970s, immediately following its use of educational television in El Salvador and the Ivory

Coast, AID examined the potential of satellites

IOUNISPACE ’82, op. cit., app. B.

I IAv;at/On Week and Space Technology, Feb. 13, 1984.

12For a thorough discussion of possible international cooperation

in space stations, see Civilian Space Stations and the U.S. Future

in Space (Washington, DC: U.S. Congress, Office of Technology

Assessment, OTA-STI-241, November 1984),

*See Harry R. Marshall, Jr., “U.S. Space Programs: Cooperation

and Competition From Europe, ” Current Po/ic-y, No. 695, U.S. State

Department, May 1985.
Ch. 3—Internationa/ Space Cooperation 47

for delivery of services to remote, isolated, and

rural populations. It gave particular attention to

the public service projects funded by NASA

Goddard using the ATS/1 and the ATS/3 spacecraft. Providing very high frequency (VHF) voice

channels, the spacecraft were used in the State

of Alaska Medical Network project and in the

Peace-Sat Network in the Central Pacific operated by the University of Hawaii.

Preliminary project prototype work by AID was

started in the mid-1970s using ATS/6 in the Brazilian SACl13 project. AID also sponsored symposia for key Third World administrators to help

them ascertain through “hands on” experience

what indigenous needs might be met by applying lessons learned from the ATS/-l -3-6 demonstrations. They studied the use of various technology mixes (i. e., voice, slow-scan video,

two-way audio interactions), and examined the

variety of educational materials produced for

parents, students, teachers, and administrators.

The results of these symposia prompted AID

to fund a multinational 27-country demonstration

project in 1976 called Al D/SAT, an immediate

follow-on to the highly successful ATS/6 India Satellite Television Instruction Experiment (SITE)

project. The AID/SAT project, simple in format

but effective in its impact on the leadership of

the participating nations,14 led eventually to AID’s

current University of West Indies project and its

Rural Satellite Program. AID is now funding satellite programs in Peru, The Philippines, and lndonesia.

The Department of State is responsible for coordinating the diplomacy and policies of cooperative land remote sensing programs to assure

consistent development of the international

aspects of the Landsat program. AID has supported and encourages remote sensing activities

in developing countries by providing U.S. experts, training, and demonstrations; project

grants; financial and technical support for cooperative programs with U.S. industries and insti-

— ———

‘

3

’’ SACI: USAID, Satellite Technology Demonstration, 1974-75,”

Towarcls /nterrtationa/ Te/e-eclucation (Boulder, CO: Westvlew

Press, 1984), p. 115.

1 dsee Clvl/lan Space policy ancf Applications (Washington, DC:

U.S. Congress, Office of Technology Assessment, OTA-STI-1 77, June

1982), p. 208.

tutions; and financial support for education in

U.S. universities, on-the-job training, and creation of national and regional remote sensing

centers. Centers have been established in Nairobi,

Kenya; Ouagadougou, Upper Volta; and

Bangkok, Thailand. (See table 7A-1 in app. 7A.)

Other U.S. Government agencies have also assisted AID in providing foreign nations with Earth

resources remote sensing information. The U.S.

Geological Survey (of the Department of the interior) has sponsored numerous international

remote sensing training programs at the EROS

data center in Sioux Falls, SD, and in many foreign countries, all in support of the Landsat program. NASA provided technical support in the

form of hardware, personnel, and computer

software.

The Soviet Union

Like the United States, the Soviet Union has

long recognized the value of international cooperation in space activities. Since the early 1960s

the Soviet Union has stated its commitment in

principle to such cooperation, but it was not until

the 1970s that it began to practice what it professed–at least with a few partners.15 The most

dramatic Soviet-U.S. cooperative activity was the

Apollo-Soyuz Test Program, but the two countries engaged in a variety of other space science

and remote sensing projects in the 1970s. More

recently, the Soviet Union is cooperating with

France, the United States, and Canada in the

SARSAT/COSPAS project for locating lost ships

and planes by satellite-relayed radio beacon (see

app. A).

The Soviets have carried out several space science missions with France and have given considerable assistance to the Indian space program.

They are active participants in multilateral organizations: governmental, such as the U .N. Committee on the Peaceful Uses of Outer Space

(COPUOS); and nongovernmental, such as the

‘5For a detailed description of overall Soviet international cooperation in space, see Joseph Whelan, “Soviet Attitude Toward international Cooperation Space” in U.S. Congress, Senate Committee

on Commerce, Science, and Transportation Soviet Space Program:

1976-80, Part / Committee Print (Washington, DC: U.S. Government Printing Office, December 1982), pp. 205-305.
42 ● Internatlonal Cooperation and Competition in Civilian Space Activities

Phom credit: Nationa/ Aeronautics and Space Administration

Photo of the Soviet Soyuz spacecraft taken from the

Apollo spacecraft during the joint U.S.-U.S.S.R. Apollo

Soyuz Test Project in 1975.

International Astronautical Federation. However

their greatest cooperative activity has taken place

within the confines of the Soviet-led lntersputnik and lntercosmos programs.

Intersputnik

The Soviet Union and its allies were reluctant

to join INTELSAT when it was founded in 1964.

The Soviet objected to U.S./COMSAT management, to the use of U.S. technology, and to the

system of weighted voting whereby influence was

determined by a country’s percentage of use of

the system. (Soviet need was for only 2 to 3 percent of global international traffic, compared with

the United States’ 50 to 60 percent.) In 1968, the

Soviet Union and eight other socialist states (Poland, Czechoslovakia, East Germany, Hungary,

Romania, Bulgaria, Mongolia, and Cuba) proposed an alternative system, which in 1971 was

formally agreed to and called Intersputnik. Although its services are open for any state to use,

few other countries have joined.16 There is relatively little commercial or private traffic between

most Intersputnik members and the rest of the

world. Since the Intersputnik network was initially

based on use of the nongeosynchronous Molniya

satellites, ’ 7 it was difficult and expensive for

1 bsyria, Vietnam, and Laos joined for both political and techn ical reasons.

I The Molniya communications spacecraft follow a highly elliptical orbit (40,000 km by 500 km) that allows them to linger for

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 employed. Although the Soviet Union is now beginning to deploy

geostationary satellites as well, the Molniya satellites continue to

provide most Soviet domestic and international services.

INTELSAT Earth stations, which are designed to

work with fixed geosynchronous satellites, to

make use of the moving Moiniyas.

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

have grown, the Soviet Union, Cuba, and Romania (to be followed soon by Poland) have also

begun to use INTELSAT through Earth stations on

their own territories. increasing de facto integration of global satellite communications appears

to be occurring even in the absence of formal

agreements. 18

Intercosmos

Most Soviet joint and cooperative projects have

been conducted with allied socialist states. In

1967, the Intercosmos program was founded to

coordinate activities among the Soviet Union, its

East European allies, and other Communist states

such as Mongolia, Cuba, and more recently Vietnam. Several scientific satellites have been flown,

using instruments designed by member-states

under the overall direction of the Soviet Union.

Instruments and experiments, such as an East

German multispectral camera built by Carl Zeiss

Jena, have also flown on the Salyut series; many

of these were associated with the flights of guest

cosmonauts from participating states. To date,

cosmonauts from Czechoslovakia, poland, East

Germany, Bulgaria, Hungary, Romania, Mongolia, Vietnam, Cuba and, most recently, France and

India, have been trained in the Soviet Union and

spent time on board Salyut stations. The purpose

of Intercosmos seems to be largely political; the

Soviets thoroughly orchestrate these activities,

and emphasize propaganda.

Intercosmos projects are designed and managed very differently from U.S. cooperative projects. The experiments and guest cosmonauts of

member countries are invited, free of charge,

onto Soviet spacecraft on a nearly rotating basis.

However, it should be noted that this approach

differs from that of the United States toward its

lasee NiChOlaS Ma~e, Aerospace Law: Telecommunications Sate//ites, prepared by the Centre for Research of Air and Space Law,

McGill University, for the Social Sciences and Humanities Research

Council of Canada, 1980, pp. 118-123.
Ch. 3—lnternationa/ Space Cooperation . 43

allies only in degree and tone. Both nations are

well aware of the manifold benefits of cooperation. A lengthy retrospective article on the subject by a former cosmonaut expressed it in the

following way:

. . . space exploration requires considerable allocations. Quite often many costly space projects

are beyond the means of individual states and

demand the cooperation of a number of countries . . . Now it is becoming important to create

space vehicles through the joint efforts of various states and use them for peaceful scientific

and practical purposes. 19

Remote Sensing

The Soviet Union has also developed remote

sensing systems for civilian as well as military purposes. Perhaps the most ambitious civilian-oriented remote sensing work has been done on

manned missions, particularly aboard Salyut 6.

Some 50,000 photographs were taken using the

large East German MKF-6m multispectral camera,

and some of the data obtained has been shared

with allied and developing countries, such as

Cuba, Vietnam, Morocco, and Angola.

As a member of the World Meteorological Organization, the Soviet Union has distributed

weather photos from its Meteor-series meteorological satellites since 1966. Meteor satellites have

carried a variety of experimental sensors including, recently, advanced Earth resources instrumentation. In July 1980, the Soviet Union launched

a prototype remote sensing satellite with three

experimental multispectral sensors providing

ground resolution up to 30 m. They have offered

to share data from this satellite with other countries.

European Space Agency (ESA)

One of the most successful examples of international cooperation in space is the European

Space Agency, whose members devote anywhere

from a third (France) to nearly all (United

Kingdom) of their national space budgets to joint

projects. In part, this organization was created

to pool European expertise and place European

~qv. sevastyanov and A. Ursul, “Cosmonautics and Social Development, ’ /nternationa/ Affairs, No. 11, November 1977, pp.

76-77.

space industries in a better position to compete

with U.S. industries. At the same time, ESA has

proven to be a valuable partner for the United

States in a variety of cooperative programs, not

the least of which has been the development of

Spacelab for the space Shuttle.

ESA was established on May 31, 1975, by combining two institutions: the European Space Research Organization (ERSO) (which had been in

operation since March 20, 1964) and the European Launcher Development Organization (ELDO)

(dating from March 29, 1962). The establishment

of ESRO for space research and ELDO for launching satellites resulted from a desire on the part

of Western Europe to achieve space capabilities

independently of the United States and the

U.S.S.R. The institutional separation of space research from the launching of satellites proved inefficient, however, and after 15 years of intercooperative effort these space functions were

merged into ESA.20

Eleven European states are members: Belgium,

Denmark, the Federal Republic of Germany,

France, Ireland, Italy, The Netherlands, Spain,

Sweden, Switzerland, and the United Kingdom.

In addition, Austria is an associate member; Norway has observer status; and Canada has signed

a memorandum of association with ESA. The

1984 budget is about $850 million (compared

with NASA’s $7.3 billion) and the staff numbers

about J ,400 persons, many of whom are highly

accomplished experts in space science and technology, 21

ESA coordinates the national programs of its

members, developing missions in remote sensZOELDO and ESRO are described and analyzed in “International

Cooperation and Organization for Outer Space, ” staff report edited

by Eilene Galloway for the Senate Committee on Aeronautical and

Space Sciences, Senate Document No. 56, 89th Cong., 1st sess.,

Aug. 12, 1965. See Index, p. 564; “International Cooperation in

Outer Space: A Symposium, ” edited by Eilene Galloway for the

Senate Committee on Aeronautical and Space Sciences, Senate

Document No. 92-57. 92d Cong., 1st sess., Dec. 9, 1971; M. G.

Bourely, “The Legal Status of the European Space Agency,” Proceedings of the /nternationa/ /nstitute of Space Law published by

the American Institute of Aeronautics and Astronautics, 1633 Broadway, New York, NY 10019, 23d Colloquium, Tokyo, Japan; M. G.

Bourely (Legal Advisor to ESA). “Institutional Arrangements for

Space Cooperation in Europe, “ in the 24th colloquium volume for

Rome, Italy, September 1981.

21 EUrOpean space Agency in U. N. document A/COBNF. 101 /Bp/

10, Jan. 30, 1981, pp. 34-40.
44 ● International cooperation and competition in Civilian Space Activities

ing, telecommunications, and space science, in

addition to the Ariane launcher, which can place

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

with individual member countries having an interest in specific areas (e.g., Germany in materials

processing, or the U.K. in astronomy) are the

most prominent mechanism.

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

reusable laboratory for manned or unmanned experiments in life sciences, materials processing,

etc. NASA and ESA are also cooperating on building the Space Telescope which will be launched

in 1985 by the Shuttle. ESA has not cooperated

formally with Japan. It is cooperating with them

on the missions to Comet Halley.

Although 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 Nations through representation by its member states.

As an international intergovernmental organization, ESA has rights and obligations 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 Telecommunication Union

(ITU) conferences. ESA experts can advise its

members concerning positions to take on space

issues before COPUOS. The association of Canada with ESA can result in even stronger representation of any position ESA may decide to

espouse .22

**See Roy Gibson, “lrrternational Regicmal Role: Focus on the

European Space Agency” presented at the University of Mississippi

Law Center at a conference on Law and Security in Outer Space

held by the Standing Committee on Law and National Security and

the International Law Section of the American Bar Association, University of Mississippi, May 21-22, 1982. See also Annual Reports

of ESA, 8-10, rue Mario- Nikis, 75738 Paris, Cedex 15, France.
Ch. 3—Internationai Space Cooperation ● 4 5

INTERNATIONAL ORGANIZATIONS

The United Nations

The Committee on the Peaceful

Uses of Outer Space

The first meeting of the United Nations Committee on the Peaceful Uses of Outer Space

(COPUOS) was held on November 27, 1961, several years after the initial efforts had been made

to establish a means for dealing with space issues.

The Committee itself was a direct outgrowth of

controversy over the militarization of space. The

question of disarmament had prompted the U.S.

delegation to the U. N., in January 1957, to make

the following statement to the First Committee

of the General Assembly (Political and Security

Affairs):

Scientists in many nations are now proceeding

with efforts to propel objects through outer

space and to travel in the distant areas beyond

the Earth’s atmospheric envelope. The scope of

these programs is variously indicated in the

terms “Earth satellite, ” “intercontinental missiIes, ” “long-range unmanned weapons” and

“space platforms.” No one can now predict with

certainty what will develop from man’s excursion into this new field. But it is clear that if this

advance into the unknown is to be a blessing

rather than a curse the efforts of all nations in

this field need to be brought within the purview

of a reliable armaments control system. The

United States proposes that the first step toward

the objective of assuring that future developments in outer space would be devoted exclusively to peaceful and scientific purposes would

be to bring the testing of such objects under international inspection and participation. In this

matter, as in other matters, the United States is

ready to participate in firm, balanced, reliable

systems of control .23

This was probably the first mention of “Earth

satellites” in U.N. debate. In the same year, Canada, France, and the United Kingdom had also

suggested that a subcommittee of the Committee on Disarmament establish a technical committee to study the possibilities for an inspection

system which ensure that objects sent through

2JU .s. Statement to First Committee, Political and Security Affairs,

U.N. General Assembly, January 1957.

outer space would be used exclusively for peaceful and scientific purposes.

With the launch of Sputnik 1 on October 4,

1957, came a proliferation of statements and

resolutions, including the following phrase, which

the Soviet representative proposed be included

in the provisional agenda of the 13th session of

the U.N. General Assembly:

The banning of the use of cosmic space for

military purposes, the elimination of foreign military bases on the territory of other countries,

and international co-operation in the study of

cosmic space.

The reaction of the United States to this Soviet

proposal was to say that the elimination of defense bases, originally established and subsequently maintained by the mutual consent of the

nations concerned, could not be characterized

as “foreign” nor extracted as a price for international cooperation in the peaceful uses of the new

environment of outer space.

Henry Cabot Lodge, Permanent Representative

of the United States to the U. N., attached to his

letter to the Secretary General a resolution sponsored by 20 nations which set out the need for

what ultimately became the Committee on the

Peaceful Uses of Outer Space (table 3-2).24

The General Assembly resolution 1348 (X111)

December 13, 1958, authorized an “Ad Hoc

Committee” on the Peaceful Uses of Outer

Space. The Soviets, Czechoslovakia, Poland, lndia, and the United Arab Republic–all of which

had been named to the Committee–did not participate, although they were careful to attend

each subsequent meeting.

The ad hoc committee finished its work on June

25, 1959, and submitted its report to the General Assembly on July 14, 1959. Almost 21A years

——

zADUring the following months, Sept. 2—Nov. 18, 1958, the debate

on the proposed U.N, management unearthed a number of issues

of concern, not the least being questions of the sovereign rights

of airspace, common heritage (then called res cornrnunis omirrurn

–benefit of all mankind), international training and an international

space center. All of the foregoing were major issues at the

UN ISPACE ’82 conference in Vienna and most are far from being

resolved.
46 . Internatjona/ cooperation and Competition in Civilian Space Activities

Table 3.2.–Current Membership of COPUOSt

Albania

Argentina

Australia

Austria

Belgium

Benin

Brazil

Bulgeria

Canada

Chad

Chile

China*

Columbia

Czechoslovakia

Ecuador

Egypt

Federal Republic of Germany

France

German Democratic

Republic

Greece

Hungary

India”

Indonesia

Iran

Iraq

Italy

Japan ●

Kenya

Lebanon

Mexico

Mongolia

Morocco

Netherlands

Niger

Nigeria

Pakistan

Philippines

Poland

Romania

Sierra Leone

Spain

Sudan

Sweden

Syria

United Kingdom

United Republic of

Cameroon

United States ●

Upper Volta

Uraguay

U.S.S.R. “

Venezuela

Vietnam

Yugoslavia

NOTE: Italics indicate COPUOS membership 1961-73. Asterisk indicates independent launch capability. ESA members also have launch capability.

tGreece and Turkey, Spain and Portugal, alternate membership every 3 years.

SOURGE: Office of Technology Assessment.

later, at the first meeting of the Committee on the

Peaceful Uses of Outer Space. U Thant, Acting

Secretary General of the U. N,, was appointed

temporary Chairman pending the election of officers. At the same time, the U.S.S.R. became an

active participating member of the Committee.

in the interim between ad hoc status and permanent committee approval, the members agreed

to settle differences by consensus agreement,

That the consensus process worked is borne out

by the formation of five major space treaties and

agreements which are now in force to guide international behavior in space.25

Treaties and Agreements

The United States is a party to four major international agreements formulated by COPUOS:

● Treaty on Principles Governing the Activities of States in the Exploration and Use of

Outer Space, Including the Moon and

Zssee “International Coowration in Outer Space: A Symposium, ”

op. cit.

●

●

●

 ✍ ✎

Other Celestial Bodies (1967).26 This is the

principal agreement on outer space. It holds

that outer space, the Moon, and other celestial bodies are not subject to national appropriation. In addition, among other things, the

treaty defines the principles for the exploration and use of outer space and holds States

responsible for their own space activities and

those of their citizens. The other agreements

elaborate on elements of the 1967 Treaty.

Agreement on the Rescue of Astronauts, the

Return of Astronauts, and the Return of

Objects Launched Into Outer Space (1968).27

This agreement provides for the rescue and

return of downed or stranded astronauts as

well as the return of a space object and “its

component parts. ” It specifies that “the State

responsible for launching” shall pay the expenses for recovering and returning the

space object or its parts.

Convention on International Liability for

Damage Caused by Space Objects (1972).28

This convention is an extension of articles

VI and Vll of the 1967 treaty. It defines

“damage” as loss of life, personal injury, impairment of health, loss or damage to property or persons or property of international

organizations. “Launching” is held to include attempted launching, and a “launching State” is one that either launches or procures the launch of a space object. It is also

one “from whose territory or facility a space

object is launched. ”

Convention on Registration of Objects

Launched Into Outer Space (1974).29 The

information registered includes the name of

.———— Z6UST 241 O; llAS 6347; Senate Report No. 8, 9oth Cong., 1st sess.,

Apr. 17, 1967; Senate Committee on Aeronautical and Space Sciences, 90th Cong., 1st sess., staff report on “Treaty on Principles

Governing the Activities of States in the Exploration and Use of Outer Space, ” committee print, 1967.

27usT 757o; 7_lAS 659g; 1‘Agreement on the Rescue of Astronauts,

the Return of Astronauts, and the Return of Objects Launched Into

Space: Analysis and Background Data;” Senate Committee on Aeronautics and Space Science, 90th Cong., 2d sess., committee print,

)Uly 16, 1968.

Z6UST 238g; TIA’j 7762; Senate Committee on Aeronautics and

Space Sciences, 92d Cong., 2d sess., staff report on “Convention

on International Liability for Damage Caused by Space Objects, ”

committee print, 1972.

29TIM 848o; Senate Committee on Aeronautical and Space Sciences; 94th Cong., 1st sess., staff report on “Convention on Registration of Objects Launched Into Outer Space,” committee print, 1975.
Ch. 3—international Space Cooperation ● 4 7

the launching State or States, an appropriate designator or a registration number, the

date and territory of the launching, the initial basic orbital parameters including the

nodal period, inclination, apogee, perigee,

and the general function of the space object.

In addition to the four international agreements

which the United States has signed and ratified,

the General Assembly has recommended to States

the adoption of the Agreement Governing the

Activities of States on the Moon and Other Celestial Bodies (1979).30 Among other things this

Agreement provides for the use of the Moon “exclusively for peaceful purposes. ” It also provides

that “the exploration and use of the Moon shall

be the province of all mankind and shall be carried out for the benefit and in the interests of all

countries, irrespective of their degree of economic or scientific development. ” It further states that

“the moon and its natural resources are the common heritage of mankind . . .“ Austria became

the fifth nation to ratify the Moon Agreement on

June 11, 1984; it is now in force, the other parties being the Philippines, Chile, Uruguay, and

The Netherlands. The United States played a major leadership role in obtaining consensus in 1979

on the Moon Agreement in the COPUOS session.

However, while the United States and U.S.S.R.

are parties to all other space treaties, neither has

signed this one.

Of particular importance to potential private

operators of space systems is Article VI of the

1967 Outer Space Treaty which states:

States Parties to the Treaty shall bear international responsibility for national activities in

outer space, including the Moon and other celestial bodies, whether such activities are carried

on by governmental agencies or by nongovernmental entities . , . The activities of nongovernmental entities in space . . . shall require authorization and continuing supervision by the appropriate State party to the treaty.

Although the terms “authorization” and “continuing supervision” have been interpreted in various ways, article VI clearly requires some form

313(J. p4. General Assembly Resolution A/34/68, Dec. 14, 1979; Senate Committee on Commerce, Science, and Technology, 96th

Cong., 2d sess., “Agreement Governing the Activities of States on

the Moon and Other Celestial Bodies, ” committee print, 1980.

of licensing and adherence to government-imposed regulations.

Similarly, Article II of the 1972 Liability Convention makes the launching State responsible

for personal and property damage caused by any

satellites or launchers even if they are no longer

under the operation or direct control of the government. At a minimum, the government would

require assurance that the owner of the satellite

system had purchased adequate insurance to

cover possible damages.

The U.S. Government has not yet decided on

the precise mechanisms of ensuring that private

corporations comply with international treaty

obligations. Given the importance of this technology to U.S. foreign affairs, it is clear that the

Department of State must play a major role.

International Telecommunication

Union (ITU)

The United States is one of 155 nations bound

by treaty to cooperate within the structure of the

ITU for the use of technical facilities for telecommunications of all kinds. The ITU, which became

a specialized agency of the United Nations in

1947, has performed this regulatory function

since 1932. Twentieth-century communications

technology imposed the requirement for international cooperation to ensure technical efficiency and prevent harmful interference between nations and stations in the use of the radiofrequency

spectrum. During the early development of space

communications, the ITU began to study its implications, since all space objects communicating to Earth require radio services which are

under ITU jurisdiction. 31

JIThe IT(J was formed from the International Telegraph U n iOn

(begun in 1865) and signatories to the International Radiotelegraph

Convention. For further information on the ITU, see “International

Cooperation in Outer Space: A Symposium. ” This symposium covered 41 organizations in 1965, divided into four categories: U.S.

and International Space Cooperation, United Nations and Outer

Space, Intergovernmental International Organizations, and /ffternational Scientific Community and Professional Associations. For

up-to-date information on these and other organizations, see the

annual report of each and also testimony their officials have given

before House and Senate Committees on Commerce, Space,

Science and Technology, Foreign Relations, Foreign Affairs, etc.
48 ● Internatjonal Cooperation and Competition in Civilian Space Activities

The ITU is organized into four permanent bodies: 1 ) the General Secretariat; 2) the International

Radio Consultative Committee (CCIR); 3) the international Telegraph and Telephone Consultative Committee (CCITT); and 4) the International

Frequency Registration Board (I FRB). The CCIR

and CCITT are technical study groups; the IFRB

is concerned with orderly and effective use of the

radio spectrum and orbital slot allocations, in order to reduce communications interference. All

member States are represented in the Plenipotentiary Conference, which meets every 5 to 8 years

and elects an Administrative Council of 36 members to coordinate ITU work between sessions.

A Plenipotentiary Conference was held September-October 1982 in Nairobi, Kenya, to review the ITU Convention (adopted in Madrid in

1932 and amended in Malaga-Torremolinos,

Spain, in 1973).32 There were a few important actions that are worthy of note: plans for a major

world administrative conference on telegraph

and telephone in 1988; greater status for the Consultative Committee on Telegraph and Telephone

(CCITT); increased ITU involvement in development assistance for Third World members; clearer

recognition of Third World needs with respect

to the geostationary orbit; a newly elected leadership; and a relatively modest budgetary increase

of 26 percent over the next 7 years.

ITU decisions are made by the regional or

worldwide administrative conferences established to revise ITU regulations. The ITU concluded international agreements concerning

space communications in 1959, 1963, 1965,

1971, 1973, 1977, and 1979. When the final acts

of a conference are concluded they are referred

to each ITU member for ratification. [n the case

of the United States, these final acts must be submitted to the Senate for its advice and consent.

The jurisdiction of the ITU includes oversight of

the geostationary orbit; it registers orbital positions and assigns satellite frequencies. The 1973

Telecommunication Convention and Final Protocol, Article 33, provides a basic agreement on

space communications:

—— . . — 32’’ Final Acts of the Plenipotentiary Conference, ” Nairobi, Kenya,

1982. ITU Document. See also, hearing before the Subcommittee

on International Operations of the U.S. House Committee on Foreign Affairs, Feb. 22, 1983.

Members shall endeavor to limit the number

of frequencies and the spectrum space used to

the minimum essential to provide in a satisfactory manner the necessary services. To that end

they shall endeavor to apply the latest technical advances as soon as possible. In using frequency bands for space radio services Members

shall bear in mind that radio frequencies and the

geostationary satellite orbit are limited natural

resources, that they must be used efficiently and

economically so that countries or groups of

countries may have equitable access to both in

conformity with the provisions of the Radio Regulations according to their needs and the technical faciIities at their disposal (emphasis

OTA’ S).33

The ITU divides the world into three regions

for regulatory purposes; in 1979 spectrum allocations were made for Region 1 (Europe, U. S. S. R.,

Mongolia, and Africa) and Region 3 (Asia except

U.S.S.R. and Mongolia) and Australia. The United

States is in Region 2, which is comprised of North

and South America and Greenland. The ITU

made spectrum allocations for Region 2 in 1983.

It is at these regional conferences where decisions

are made by majority vote that issues which significantly affect the future of this nation’s communications are decided. The issues are technical but have become increasingly susceptible to

political influences in a forum where each nation

has one vote.34

The ITU has scheduled a World Administrative

Radio Conference on the Use of the Geostationary Orbit for 1985 and 1988. Its first session will

be held in 1985 in Geneva (ORB ‘85), and the

second in 1988 (ORB ‘88). Policy is now being

formulated for the U.S. delegation for this politically sensitive area. Some equatorial countries

continue to claim sovereign rights to segments

of the orbit above their territories; other Third

JJlnternational Telecommunication Convention, ch. Ill, Art. 33,

Rational Use of the Radio Frequency Spectrum and of the Geostationary Satellite Orbit, paragraphs 130 and 131. Treaty and international Agreements Series (TIAS); also in Space Law, op. cit.

(reference 15), pp. 86-87.

Jdproceedings of the International Institute of Space Law, 23d Colloquium, Tokyo, Japan, September 1980: M. A. Rothblatt, international Cooperation in Regulating 12 GHz Band Geostationary

Satellite Communications Technology, Geopolitics and the Common Heritage of Mankind, pp. 189-195. Also, Ronald F. Stowe,

Implications of the 1979 WARC for 12 GHz Satellite Services in

Region 2, pp. 93-95. American Institute of Aeronautics and Astronautics, 1633 Broadway, New York, NY 10019.
Ch. 3—lnternationa/ Space Cooperation ● 4 9

World countries are demanding orbit allocations

even though they have no present plans for using

the geostationary orbit (see ch. 6). Actions taken

at this conference will affect INTELSAT, INMARSAT,

U.S. domestic communications, and international

space activities in general.

The U.S. national paper for UNISPACE ’82,

March 23, 1982,35 points out that the ITU’s

WARC 1979 proved that international consensus

on regulating and managing the frequency spectrum and geostationary orbit is possible: the capacity for channels of the fixed, broadcast, and

mobile satellite services was increased; remote

sensing satellites were given new allocations; and

small Earth terminals and two-way communications links were facilitated. However, the United

States has stated that the WARC 1985-88 conference “may be crucial in determining whether a

comprehensive international regulatory system

can be maintained which will continue to facilitate the flow of the benefits of communications

satellite technology to developing countries. ” The

United States has submitted to the ITU some options and criteria for technological adjustments

to communication needs. In addition, the United

States is directing research and development efforts toward improving the use of the limited resources of orbit and frequencies (see ch. 6 for

discussion of issues the United States will face at

WARC ‘85-’88).

International Telecommunications

Satellite Organization (lNTELSAT)3

’

INTELSAT is a global commercial telecommunications satellite system owned by 109 member

countries. it has a capital ceiling of $1.2 billion. — — —

~5united states National paper, Second United Nations Conference on the Exploration and Peacefu[ Uses of Outer Space. For

further details on WARC ’79, see Radio frequency Use and Management: Impacts From the World Administrative Radio Conference of 1979 (Washington, DC: U.S. Congress, Office of Technology Assessment, OTA-CIT-1 63, January 1982).

JGFor further information on INTELSAT, see /NTELSA T: 1984 Anrrua/ Report, 490 L’Enfant Plaza, SW, Washington, DC 20024; INTELSAT: report describing the organization; Muki/atera/ /intergovernmental Cooperation in Space Activities, Background Paper, Second

United Nations Conference on the Exploration and Peaceful Uses

of Outer Space, United Nations document A/CON F/101/BP/l O, Jan.

30, 1981, pp. 1 -27; and Current and Future State of Space Technology, Background Paper, Second United Nations Conference on

the Exploration and Peaceful Uses of Outer Space, United Nations

document A/CONF.1010/BP/2, Mar. 16, 1981, pp. 6-7.

The United States played a major part in establishing this intergovernmental organization. For

the first 6 years of its operation, the Communications Satellite Corporation (COMSAT) managed

INTELSAT under a contract from INTELSAT’s

Board of Governors. Since 1977, INTELSAT has

been operated administratively and technically

by an international secretariat.

INTELSAT is not an agency of the United Nations, but it has some cooperative agreements

with the ITU, The organization has successfully

combined both governmental and nongovernmental entities into a global commercial service.

INTELSAT’S management structure provides a system within which to solve problems of national

representation, investment shares, and equitable

access to technology; these issues are resolved

through technological solutions, seldom subject

to current political rhetoric; furthermore, these

practical solutions respond to the global demand

for communications services, which has been

constantly increasing and providing mounting

profits.

INTELSAT’s Operating Agreement provides in

Article 6 that “ . . . each signatory shall have an

investment share equal to its percentage of all utilization of the INTELSAT space segment by all

signatories. ’ The U.S. investment share (1984),

which comes through COMSAT (as signatory for

the United States), is 23.1 percent. The United

Kingdom owns the next highest investment share,

of 12.9 percent.37

U.S. participation takes place within each of

INTELSAT’s four organizational units: 1 ) the

Assembly of Parties is made up of governmental

representatives who meet every 2 years to determine policies and long-term objectives; each

member has one vote; 2) the Meeting of Signatories is comprised of either governmental or

government-designated telecommunications entities that meet annually on such matters as capital investment and shares, approval of Earth stations for access to INTELSAT services, allotment

of satellite capacity, and adjustment of charges;

each signatory has one vote; COMSAT casts the

JTSee ch. 6 for a complete list of I NTELSAT members, signatories,

and investment shares, and the INTELSAT Annual Report for investment shares of any given year.
50 ● Internatinal Cooperation and Competition in Civilian Space Activities

U.S. vote; 3) the Board of Governors is composed

of signatory members who have an investment

share (either individually or in groups) of not less

than a specific amount which is determined each

year by the signatories. INTELSAT seeks to have

about 20 members on the Board and, in addition, “up to five groups composed of at least five

signatories from within the same ITU region . . .

regardless of the size of their investment shares”;

and 4) the Executive Organ is headquartered in

Washington, DC, and has a staff of about 400 persons from about 40 different nations.

The purposes of INTELSAT’s definitive multiIateral agreement, which recognizes the 1967

Treaty on Outer Space, are to provide advanced

technology, efficient and economic facilities for

the benefit of all mankind “with the best and

most equitable use of the radiofrequency spectrum and of orbital space. ” The preamble provides that “satellite telecommunications should

be organized in such a way as to permit all

peoples to have access to the global satellite system”; and ITU members that invest in the system

will participate in “the design, development, construction, including the provision of equipment,

establishment, operation, maintenance and

ownership of the system. ”38

Nonmembers may use the INTELSAT system

and are charged on the same basis as the 109

members; 145 nations use INTELSAT services, including the U.S.S.R. INTELSAT has a program for

assistance and development which can be especially helpful to developing countries. The program includes feasibility studies for Earth segment

stations, reports on financing and technical proposals, modernization and training, operation

and maintenance, and coordinating frequencies

in accordance with ITU regulations. In some

areas “1 NTELSAT has enabled developing countries to leapfrog over generations of communications technology without having to invest a

great deal of time and money in a telecommunications satellite system of their own . . . “39

lalnternational Telecommunications Sate!!ite Organization (l NTELSAT) Agreement with Annexes and also Operating Agreement

Relating to the International Telecommunications Satellite Organization (I NTELSAT). In Space Law, op. cit. (see reference 15), pp.

173-304.

lgMu[ti[atera[ Intergovernmental Cooperation in Space Activities,

op. cit. (see reference 36), p. 21.

International Maritime Satellite

Organization (l NMARSAT)40

The impetus to create lNMARSAT41 came from

the commercialization of this technology by

COMSAT during the 1970s and from a resolution

of the Intergovernmental Maritime ConsuItative

Organization (lMCO), a specialized agency of the

United Nations, which in 1974 called for a conference to establish an international maritime satellite system. The conference was held in London in 1975-76, and concluded with two agreements patterned after those which established

INTELSAT: a Convention on the International

Maritime Satellite Organization and an Operating Agreement on INMARSAT. Both agreements

entered into force on July 16, 1979. INMARSAT,

as established, is not a U.N. organization but is

comparable to INTELSAT.

INMARSAT developed technologically from the

U.S. Marisat satellite system, which was started

by COMSAT GeneraI Corp. in 1976. The international system, which is fully compatible with

the Marisat system, has 43 member states; headquartered in London, it began operations in 1982.

INMARSAT’s purposes are to improve maritime

communications to handle situations involving

distress and/or safety, through communication

between ships and shore and among ships at sea.

INMARSAT’s high-speed satellite communications have improved search and rescue missions,

medical assistance, warnings of weather conditions, and information to assist navigation.

INMARSAT is exploring the feasibility of establishing a Future Global Maritime Distress and

Safety System by the end of this decade, which

would improve maritime distress and safety procedu res.

40 For more information on INMARSAT, see International Maritime

Satellite Organization, INMARSAT, 40 Melton St., Euston Sq., London NW1 2EQ, England; Satellite Communications for Shipping.

INMARSAT, London, England. Investment shares as of August 1981,

p. 15.

41 I NMARSAT, established to facilitate maritime communicat

ion

across the world’s shipping lanes, is important because it represents an area of European rather than American leadership in space

activities and because it marks, for the first time, the participation

of the Soviet Union in an international commercial space organization.
Ch. 3—international Space Cooperation . 51

INMARSAT is structured as follows:

1.

2.

3.

An Assembly of member states meets at 2-

year intervals to consider policy, activities,

and long-range objectives for recommendation to the Council.

The Council has 18 signatories (or groups of

signatories) which have the largest shares of

investment and, in addition, four representatives to ensure fair geographical representation and concern for developing countries;

it is responsible for the space segment and

its economic and efficient management;

members vote according to the percentage

of their investment shares.

The Directorate has a Director General and

staff responsible for the actual operation of

worldwide maritime communications.

The United States has the largest investment

share (31 percent), followed by the United Kingdom (15 percent), Norway (12 percent), Japan

(7 percent), and the U.S.S.R. (7 percent) .42 Voting

shares are limited to a maximum of 25 percent.

The United States designated COMSAT as the signatory for its representation .43

The space segment of the INMARSAT system

is composed of satellites and tracking, telemetry,

command, monitoring, etc. Capacity to perform

maritime communications has been leased from

COMSAT General (a wholly owned operating

subsidiary of COMSAT). INMARSAT leases some

transponders from the European Space Agency—

the Maritime European Communications Satellites and some from INTELSAT (V-MCS). Future

INMARSAT satellites will have greater capacity

and higher in-orbit power than the transponders

it now leases. IN MARSAT has recently signed a

contract for purchase of second generation satellites from a consortium headed by British Aerospace. Hughes Aircraft Corp. is the prime subcontractor.

42see app, 6C for a complete table of I NMARSAT members and

Investment shares,

4~/nternat;ona/ Cooperation in Outer Space: A Symposium, edited

by Eilene Galloway for the Senate Committee on Aeronautical and

Space Sciences. Senate document No. 92-57, 92d Cong., 1st sess.,

Dec. 9, 1971 (see pp. 331-363).

World Meteorological Organization

(WMO)

The origins of the WMO can be traced back

to 1853, when the first International Meteorological Conference was held in Belgium. Participants

recognized the importance of sharing meteorological research and data. In 1873, the international Meteorological Organization (lMO) was

organized. IMO became a specialized agency of

the United Nations in 1947 and began functioning as the WMO in 1951. All sovereign states and

territories with weather services may become

members. WMO is not an international operational organization, but rather a planning and coordinating body with basic programs to assist all

nations. It is a specialized agency with specific

weather-related tasks that are planned with due

regard for operating efficiency to produce needed

information from global sources and for worldwide distribution. The WMO has been highly successful in eliciting cooperation among nations.

The United States launched the first meteorological satellite on April 1, 1960. When the U.N.

General Assembly passed resolution 1721 (XVI)

on December 20, 1961, on the peaceful uses of

outer space, it recommended that the WMO

make an early and comprehensive study:

(a) to advance the state of atmospheric science

and technology so as to provide greater knowledge of basic physical forces affecting climate

and the possibility of large-scale weather modification; and

(b) to develop existing weather forecasting capabilities and to help member states make effective use of such capabilities through regional

meteorological centers . . ,

WMO was requested to consult with others and

submit a report to its members and the Economic

and Social Council (ECOSOC) “regarding appropriate organizational and financial arrangements

to achieve those ends, with a view to their further consideration by the General Assembly. ”

In addition, the General Assembly requested

COPUOS to review the WMO report and submit comments to ECOSOC and the General Assembly. These U. N.-initiated WMO studies led
52 . International Cooperation and Competition in Civilian Space Activities

to plans for the World Weather Watch (WWW),

which was organized to use the new satellite

technology to improve meteorological services:

Such improvements will have a profound impact on the agriculture, commerce, and industry of all nations and will permit more accurate

and timely warnings of severe storms and other

weather hazards for the protection of life and

property. It will further the safety and efficiency

of international air traffic and transportation and

provide essential support to nations in the management of weather resources and food production. 44

An additional U.N. resolution in 1967 led to the

organization of the Global Atmospheric Research

Program (GARP), a joint project of the WMO and

the International Council of Scientific Unions

(Icsu).

WMO organizes symposia, workshops, seminars, and provides training courses and fellowships in atmospheric science and meteorology.

WMO’s Voluntary Assistance Program assists developing countries purchase satellite data receiving stations. The weather services of all countries

now depend on information from satellites.

Through WMO, global, regional, and national

environmental data are collected from the satellites of Europe, Japan, the United States, and the

U. S. S. R., and distributed among all nations.

WMO projections for the future emphasize that

more international cooperation will be required,

especially for the planned World Climate Program.

In 1978, WMO requested a U.S. and a Soviet expert to evaluate the future need for environmental satellites, including those for meteorology. 45

In discussions of the Legal Subcommittee of

COPUOS, the United States has, for many years,

been extremely careful not to commingle meteorological satellites of the NOAA/WMO type with

land remote sensing. However, some delegates

from other nations have discussed rules and regulations for all remote sensing satellites—civiIian

and military, meteorological, and general use as

represented by the Landsat system.

For more than a decade, COPUOS, within its

two operating subcommittees, the Legal Subcommittee and the Science and Technology Subcommittee, has discussed the formulation of principles

which are subject to political differences such as

the issue of prior consent to distribute data sensed

from space. Prior consent has not been made

an impediment to WMO/NOAA weather agreements or those of any other nation. However, the

situation is now further complicated by U.S. national actions to turn the Landsat system over to

the private sector (see ch. 7).

44(J.N. General Assembly Resolution 1721 (XVI) Dec. 20, 1961.

4J’’The Role of Satellites in WMO Programmed in the 1980s, ”

World Weather Watch Report No. 36, Annex Ill.

ISSUES IN COOPERATION

The changing role of industrialized countries

in space, and the aspirations of the developing

countries, coupled with a relatively static U.S. approach to cooperation in space, have raised several important issues for the United States:

● How can the United States use its partici- ●

pation in international multilateral organizations and meetings on space to promote

U.S. interests? The conduct and outcome of

recent international meetings on space has

not always been favorable to U.S. interests.

In part, this has come about as a result of

U.S. attempts over the last few years to limit

potential damage to its positions, while at the

same time posturing itself to reduce its activities within the various organs of the United

Nations that deal with communications, treaty,

and regulatory matters.

How can the United States cooperate most

effectively with the developing countries?

Developing and newly industrialized nations

are demanding a greater voice in the use of

the assets of outer space (e.g., apportionment of the geosynchronous orbit—see ch.

6), and a larger share of the perceived social
Ch. 3—lnternationa/ Space Cooperation ● 5 3

and economic benefits. Their demands have

taken the form of intense political pressure

at the United Nations and elsewhere.

● On what terms might the United States

most profitably cooperate with other industrialized nations? Greater competitiveness,

both among governments and the private

sectors of different countries, alters the context for cooperation and may make it more

difficult to establish cooperative programs.

Cooperating in International

Organizations

Space is by nature and treaty an international

realm about which cooperation between nations

on some level is essential, if only to avoid potential conflict over its resources. The United Nations and other multilateral organizations serve

as the forums for countries to discuss their needs

and resolve their differences, The various treaties

that provide the framework for the international

use of space were forged in the U.N. COPUOS.

When arranging the terms of cooperative technical agreements, the United States has preferred

to cooperate bilaterally rather than multilaterally.

Nonetheless it has actively participated in COPUOS

and the International Telecommunication Union

(ITU), and during the 1960s and 1970s it provided

leadership in forging the five ratified space treaties

and agreements. Today, however, the U.S. approach to international organizations in general,

and to the United Nations i n particuIar, is exemplified by its behavior at the United Nations Conference on the Peaceful Uses of Outer Space

(UNISPACE ’82) and the ITU Plenipotentiary in

Nairobi in October 1982, “The United States has

been generally reluctant to concede that its interests can be promoted or seriously jeopardized

at such conferences (i. e., UNISPACE ‘82). It approached UN I SPACE ’82 warily and attended primarily to “limit the damage” that UN I SPACE ’82

could cause to U.S. interests. ”46 Although the

United States was effective at UNISPACE ’82 in

preventing wording inimical to U.S. interests from

appearing in the final UNISPACE ’82 conference

report, it was less effective in using the conferWJUNISPACE ’82: ,4 Context for Cooperation and cOfTfpt?tltlOn,

op. Cit., p. 4.

ence to promote and explain U.S. positions on

outer space.

U.S. actions at recent conferences indicate that

the United States has adopted a “damage limitation” approach to participating in multinational

organizations. It has also threatened to withdraw

on several occasions, Such a stance, if maintained, will leave the United States in the position of having to “go it alone,” while others, both

friends and potential adversaries, continue to

operate in coalitions.

The United Nations

The United States played a leading role in the

formation and development of the U.N. Committee on the Peaceful Uses of Outer Space. It encouraged cooperative programs with NASA and

transfer of some space technology to industrialized and developing countries. U.S. programs

have consequently helped them realize some of

the benefits of space technology. Because of

these efforts by the United States, and the rapid

evolution of space industry, applications of space

technology have become an integral part of the

operations of several U.N. committees and U.N.

specialized agencies such as the ITU, the Food

and Agricultural Organization (FAO), the World

Meteorological Organization (WMO), and the international Maritime Commission (IMCO).

Developing countries see the U.N. as their preferred agent for deliberation and guidance for

space affairs as well as a forum in which to express their political views. Specifically, the U.N.

Special Political Committee, under whose administrative management the Committee on the

Peaceful Uses of Outer Space (COPUOS) functions (fig. 3-2), is the focus of their hopes and aspirations, fears and concerns with respect to

space. It provides the major forum for space-related issues–new regulations, proposed restrictive regimes, and challenges to Western world

policies, politics, and business practices. If

COPUOS, which operates by means of consensus, fails to reach agreement on a given course

of action, the Special Political Committee, which

is dominated by the developing countries, may

refer matters to the General Assembly for action.
—.

54 ● International Cooperation and Competition in Civilian Space Activities

Figure 3-2.—U.N. Bodies

(A)

t

I

? t

Committea

■

r

I

I

I

I

I

I

I

I

1-

1

I

I

+

. -- - - - -. - - ----------- ,

---- — - ---- -

I -1

I

I 1

i I

I

r

SubCommittee Direct Broadcast Satellites I I

T

Remote Sensing of the

Earth by Satellites

r J

I

I

I

I

I

I

I

1

I

I

!

I

(B)

1

#

,

1

I * I v I

Lagal Affairs Information UNDP

& .

I I
Ch. 3—Internationa/ Space Cooperation ● 5 5

For example, one issue which COPUOS has deliberated for 10 years is that of direct broadcast

satellites (DBS). The United States wants no restrictions imposed on the right to broadcast or

otherwise to transfer information across national

borders. Until 1982 it had been successful in preventing a restrictive set of principles on DBS from

being adopted. However, in November of that

year the developing countries, led by the G-77,

demonstrated their willingness to take this unresolved issue directly to the General Assembly.

The Special Political Committee, despite the objections of the United States and a few Western

allies, removed the DBS issue from COPUOS and

referred it to the General Assembly. The latter

passed the resolution by a large majority and

adopted a set of nonbinding principles governing the use of direct broadcast satellites. d’ These

principles endorse the right to “prior consent”

to the nations receiving such broadcasts. Although nonbinding, the principles foster a disturbing trend of bringing political pressure on the

United States and other industrialized countries

at the expense of the consensus process.

Championed by the G-77, the use of majority

voting rather than consensus may also be used

to influence the outcome of other long-term

issues of international debate, such as remote

sensing and equitable sharing of the geostationary

orbit. Members of the G-77 see the control of

new technologies as necessary in order to change

their societies in the directions in which they wish

to move.

Currently, the U.S. response to the well-organized political pressure from the developing

countries is to threaten to withdraw or curtail its

dTA/spc/37/L. 5/Rev, 1; NOV. 19, 1982. Preparation of an I nternational Convention on Principles Governing the Use by States of Artificial Earth Satellites for Direct Television Broadcasting (Argentina,

Bollvla, Brazil, Chile, Colombia, Ecuador, Egypt, India, Indonesia,

Iraq, Kenya, Mexico, Niger, Nigeria, Peru, Philippines, Romania,

Uruguary, and Venezuela; revised draft resolution).

The relevant section reads:

Consukatlons and agreements between States.

A State which Intends to establish or authorize the establishment

of an International direct telewslon broadcasting satellite service shall

without delay notify the proposed receiving State or States of such

IntentIon and shall promptly enter Into consultation with any of those

States which so requests.

An International direct television satelllte service shall only be established after the conditions set forth In paragraph 1 above have

been met and on the basis of agreements and/or arrangements In

conformity with the relevant Instruments of the International Telecommunication Union shall be exclusively applicable.

support for the organization in question. The

United States has withdrawn from UNESCO and

raised this possibility in the ITU, COPUOS, and

the United Nations Conference on Trade and Development (U NCTAD). Each of the above organizations serve different purposes and the usefulness of U.S. participation in them may differ.

The question of U.S. participation in one should

be analyzed independently of participation in

others. Although threat of withdrawal may appear to be an effective short-term tactic in some

circumstances, its potential long-term cost in political, social, diplomatic, and economic terms

may be too large a price to pay. Stressing, as the

Administration does, that the U.N. has changed

dramatically since the emergence of space tecttnology, but refusing to change with it, is to circumvent the critical question of our political effectiveness within the U.N. Withdrawing from a

given committee or specialized agency simply

further reduces our effectiveness in working within multilateral forums on substantial issues that

affect our interests i n space .48

In the U.N. Secretariat, the office within which

space issues are administered is the Outer Space

Affairs Division (OSAD). Currently the United

States has no high-level representation in OSAD, *

although the Soviet bloc is well represented. Because all U.N. employees are international civil

servants, countries cannot intervene directly in

the personnel actions of the Secretariat. However, they can further their own interests by recommending the selection of citizens for the

OSAD staff. The United States has not been as

active as it could be in promoting U.S. interests

in OSAD. * * If the United States desires to increase its effectiveness in the United Nations, it

should be alert to potential openings and plan

in advance to recommend the appointment of

qualified personnel. To such end, advance discussion with incumbents, U.S. departments and

agencies, and foreign government and U.N. officials as appropriate, should be undertaken in

timely fashion.

qJNISpACE ’82: A Context for Cooperation and ~Of?7petitiOn.

op. cit., p, 8, 9.

*See Unispace ’82: A Context for International Cooperation and

Competition, op cit., pp. 32-33, for an account of the selection of

the Chief of OSAD prior to UNISPACE ’82, and how countries may

become involved in the selection of U.N. personnel.

**Ibid.

38-797 0 - 85 - 3 : QL 3
56 ● Internatjona/ Cooperation and Competition in Civilian Space Activities

In 1984, the United States drastically reduced

its participation in the deliberations of COPUOS,

which is the chief forum for international rules

of outer space. The full Committee of COPUOS

(composed of 53 member nations) is essentially

a plenary session of its member nations to consider items on the agenda it adopts at the opening meeting of each session. Subjects assigned

to its two subcommittees are routinely included

and form a major part of its agenda. It is within

these subcommittees that the United States over

the years has been able to gain support of other

nations for its positions in the full Committee and

U.N. General Assembly sessions. The reports of

the COPUOS subcommittees are also routinely

included in the annual report COPUOS submits

to the General Assembly. The General Assembly,

after consideration of the COPUOS report, by resolution assigns the items for deliberation of the

subcommittees at its next session. Although in the

past the United States has maintained a leading

presence in COPUOS and its subcommittees, and

generally sends several delegates with a variety

of expertise in space-related matters, it sent only

one delegate to the February 1984 meeting of the

Scientific and Technical Subcommittee of COPUOS.49

In 1985, the United States, by sending several experts to the COPUOS subcommittees, participated more fully in the ongoing work of the Comm ittee.

The uncertain stance of the United States

toward COPUOS, arising from controversy within

the Administration concerning the usefulness of

COPUOS, has already had an adverse effect on

how other countries perceive U.S. participation.

A long-term drastic reduction in U.S. participation in COPUOS could send a message to the deqgHis statement to that group reflects one point of view about

the usefulness of U.S. participation in COPUOS:

Finally, Mr. Chairman, my delegation wishes to underscore that

our doubts about the future usefulness of the committee have not

in any way dissuaded the United States of the importance of international cooperation in the use of outer space. . Delegations can

be sure that our many existing cooperate programs with other nations in space science and applications will continue to grow in the

future. Nonetheless, we find it quite regrettable that the Committee

on the Peaceful Uses of Outer Space now threatens to loin the growing number of U.N. bodies that have grown increasingly impotent

and irrelevant as a result of confrontation, politicization and rhetorical

excesses.

Statement by Ambassador Jose S. Sorzano, U.S. Deputy Permanent

Representative to the United Nations, to the Scientific and Technical Subcommittee of the Committee on the Peaceful Uses of Outer

Space, Feb. 15, 1984.

veloping countries that the United States lacked

interest in working with them in the peaceful application of space technology.

The importance of COPUOS to the world space

community should not be underestimated. it is

the one place where all countries, developing

and industrialized alike, can discuss legal, scientific and technical issues related to space on a

continuing basis. Attendees at both COPUOS

subcommittees (the Legal Subcommittee and the

Scientific and Technical Subcommittee) tend to

have strong technical or legal backgrounds, and

their discussions focus on legal and technical

issues. To a large extent the discussions of these

subcommittees are protected from overt political rhetoric.

Legal problems currently being discussed within the Legal Subcommittee include:

●

●

●

●

the definition and/or delimitation of outer

space;

matters relating to the character and utilization of the geostationary orbit;

legal implications of remote sensing of the

Earth from space, with the aim of formulating

draft principles; and

the possibility of supplementing the norms

of international law relevant to the use of nuclear power sources in outer space,

The Scientific and Technical Subcommittee has

over the years discussed such issues as:

● Exchange of Information:

–National, regional and international programs.

–Governmental and nongovernmental

space organizations.

—Manuals on technical requirements.

—World Data Centers.

–SPACEWARN communications networks.

● Encouragement of International Programs:

–International Year of the Quiet Sun,

–World Magnetic Survey.

–Synoptic rocket experiments,

—Polar cap experiments.

–Space communications.

—Satellite meteorology.

–Scientific and technological assistance, education and training.
Ch. 3—international Space Cooperation ● 5 7

● International Equatorial Sounding Rocket

Launching Facilities:

–Scientific value.

—Usefu Iness.

—Basic facilities.

Given the importance of the subcommittees to

the work of COPUOS, it may not be possible to

protect U.S. interests fully by cutting back drastically on U.S. participation either there or in the

plenary sessions of COPUOS. Often, points of

view at variance with the democratic principles

of a free and open society could be debated, tempered, and sometimes changed within these subcommittees.

Although in the short run, the threat of cutting

back drastically on U.S. participation at COPUOS

may serve a useful political purpose in countering the perceived trend toward politicization of

COPUOS, in the long term, reduced U.S. participation will lessen U.S. influence in international

decisions on space activities. When the United

States and the Soviet Union were the only two

players in space, such a stance would have been

more plausible than today, when all the major

industrialized nations and several newly industrialized nations have increasingly strong space

programs. In particular, as the U.S. private sector increases its investment in space technologies,

it will need the support and encouragement of

its Government in international forums such as

COPUOS, where the private sector point of view

is often misunderstood. By sending only one delegate to the Scientific and Technical Subcommittee in 1984, and one with relatively little technical or scientific expertise, the United States ran

the risk of being perceived to be uninterested in

the matters being discussed therein, and of itself

contributing to the politicization of COPUOS. As

noted, the United States sent more delegates to

the Subcommittee meetings in 1985.

The International Telecommunication Union

(ITU). Cooperation with other countries within

the ITU has been crucial to maintaining access

to frequencies the United States needs in order

to support its Armed Forces, the Intelligence

Community, its diplomatic missions, the Voice

of America, and Radio Free Europe and indeed

for everyone who wishes to use the electromagnetic spectrum. Similar cooperation will be necessary in the future if U.S. industry is to expand

its sales of telecommunications equipment and

services. Inherent in any multilateral undertaking is cooperation and compromise on the

sometimes conflicting interests of parties to the

process. This is generally attainable when technical managers apply their knowledge and understanding of the limitations of the usable spectrum

to maximize its use for the maximum public good.

However, the technical experts must also work

in the context of the political and economic interests of the countries they represent. This is why

in the ITU the West faces strong political pressures from the group of nonaligned nations which

function as the Group of 77 (G-77). The G-77 is

committed to using international multilateral

organizations to gain economic and political

power. For example, at the ITU Plenipotentiary

in Nairobi in 1982, the G-77 garnered strong support for a resolution condemning Israel for its invasion of Lebanon. After long and heated discussion, the United States, citing dangers to the

international management of the electromagnetic

spectrum if such strictly political issues were

allowed to disrupt the workings of a technical

group, threatened to pull out of the ITU if the

vote carried.

The resolution condemning Israel failed by a

scant four votes, demonstrating the power of the

G-77. However, the United States cannot use the

threat of a pullout in every instance of political

concern. It is certain that the United States and

its allies will face similar situations more often at

the series of ITU meetings to be held over the

next 5 years—all of which will address issues of

great importance to the United States.

How the United States presents itself, or is

perceived by others to present itself, to the rest

of the world at multilateral conferences is a
58 ● International Cooperation and Competition in Civilian Space Activities

source of some concern to Congress.50 Yet, the

question is not whether multinational organizations present the optimum means for the United

States to pursue its cooperative programs, but,

rather, whether the United States can use its participation in the ITU and other international organizations as opportunities for exerting leadership

that would benefit the United States, including

its space-related private sector industries.

Two critical issues, requiring global cooperative support, must be kept in the diplomatic

forefront during this period of criticism of the

U. N.: first, the White House commitment to the

Space Station program and, second, the expansion of the U.S. private sector into U.N. member nations’ markets for telecommunication

goods and services. Those nations under criticism

are now and will be in the future, in part, the

same countries that NASA will eventually turn to

for support and that the private sector will be

asked to do business within an effort to reduce

U.S. trade imbalances.

Attitudes established and policies created in

one U.N. organization do carry over to others.

As UN ISPACE ’82 and the 1982 ITU Plenipotentiary in Nairobi clearly demonstrated, wherever

possible the G-77 pursues its strategy of using

U.N. and global conferences to demand changes

in global resource allocation and technology

t ransfer.51

Space Technology as a

Tool for Development

Space technology has become increasingly important to some developing and newly industrialized nations because they have come to see it

as a way to bypass intermediate stages of development and to become more independent of the

industrialized countries. Cooperative space ventures can assist developing countries in this development process. For example, as chapter 7

points out, land remote sensing data have aided

JOSee hearing before the Subcommittee on Space Science and

Applications of U.S. House Committee on Science and Technology, 97th Cong., July 14, 1982; hearing before the Subcommittee

on International Operations of U.S. House Committee on Foreign

Affairs, 98th Congress, Feb. 22, 1983.

51 UNISPACE ’82: A Context for Cooperation and cOt77pdit;On,

op. cit., p. 49.

both industrialized and developing countries to

achieve better control over their agricultural and

forestry planning. These data have also served as

a powerful tooI for locating needed nonrenewable resources.

As the SITE experiment in India demonstrated,

satellite communication can help countries to

“leapfrog” certain older technological developments and allow countries with inadequate terrestrial communications to build a strong educational and telecommunications network.

Space technology can be a powerful tool to

accelerate national development: it provides a

way of Ieap-frogging over obsolete technologies

and getting away from percolation and trickle-

-down models of development for which developing countries do not have the time. It could

effectively deal with the problems of illiteracy,

isolation and lack of information afflicting the development process. Depending on each country’s unique social, economic, cultural and resource context, and taking account of other

alternative technologies, space could play an important role in specific areas of development.sz

Developing countries face four major difficulties in joining the “space club” in any significant

way: 1 ) lack of capital; 2) few technically skilled

52 Repo~ of the Second United Nations Conference on the Exploration and Peaceful Uses of Outer Space, Vienna, Aug. 9-21,

1982, U.N. A/CON F.lOlll O; paragraph 11.

Photo credit: National Aeronautics and Space Administration

A Satellite Instructional Television Experiment (SITE)

Direct Receive Antenna installed in the village of

Kerelli, about 100 kilometers west of Hyderabad,

in 1975.
Ch. 3—lnternationa/ Space Cooperation . 59

personnel; 3) small scientific support base (computers, facilities, etc.); and 4) the need for stable

government and policymaking apparatus committed to the long-term political and financial support of space. In addition, because of these impediments to using space technology, developing

countries also have difficulties in forming and participating in stable multinational associations for

using space.

One of the trickiest political issues for developing countries relates to the difficulty of relying on foreign assistance without becoming overly dependent on, or influenced by, the donor

country. India, for example, has judiciously employed the assistance of both East and West over

the past 15 years, while working toward an independent space capability. The People’s Republic of China has attempted to do the same, though

its unstable internal politics has prevented China

from taking full advantage of all the external aid

it might have received in developing indigenous

space capabilities.

Developing countries have shared in the benefits of space technology by using satellite communications for international telecommunications (primarily via INTELSAT-see ch. 6) and

tracking weather patterns using meteorological

satellite data (see ch. 7). Some have also begun

to make limited use of Landsat data. Most developing countries depend heavily on foreign aid

to support applications of both the Metsat and

Landsat data.

Major cooperative options available for developing nations are likely to continue to fall between those offered by the United States and the

U.S.S.R. ESA, as a multinational coordinating

body, has no mechanism for funding foreign aid

to developing countries, nor does it solicit foreign

proposals (other than from the United States or

the Soviet Union and Japan) for cooperative missions. Individual European nations do carry on

cooperative activities in space on a bilateral basis

with developing countries, especially with former

colonies, and though these are often of significant value to the recipient country, the overall

amount of assistance is small compared to that

offered by the United States or the Soviet Union.

Japan is not likely to seek a wide variety of cooperative bilateral agreements with less capable

nations, as its tightly defined program is highly

national in character and Japan engages in cooperative programs only for clear, pragmatic returns.

However, it has engaged in a limited number of

multinational projects. It is most likely to cooperate with other nations in the Western Pacific

Rim.

India, with its highly successful, if small, indigenous space program, and its influence in the G77, is an obvious potential partner for cooperative activities with smaller countries. However,

lack of available capital limits what it can do.

China, which has offered to cooperate in launching other Third World satellites and in developing joint space systems when its own abilities

have matured, could be a major force in cooperative activities in a decade or two.

Developing countries need general education

in mathematics, science, and technology; direct

training with space technology; and funding for

equipment in order to overcome their deficiencies in being able to put space technology to

work in their economies, Though they have used

a variety of multilateral platforms within and without the United Nations to press their case for

greater assistance from the industrialized nations,

they have made little headway in obtaining support for broad multilateral help from the United

States, From the U.S. standpoint, bilateral and

limited multilateral cooperation are preferable to

blanket extensions of technology sharing to a

wide variety of parties because the former two

modes allow for greater specificity in meeting the

needs of both the donor and recipient.

The United States has less to gain from broad

multilateral cooperation because the direct political and economic benefits to the United States

are less clear. Nevertheless, the developing countries are pressing for greater multilateral cooperation. The United States might gain political and

economic benefits by offering to fund more multilateral educational programs, supported in part

by private industry. The U.S. Telecommunications Training Institute (USTTI) is one example of

the sort of training that might be offered. In the

USTTI, expenses are shared by the U.S. Government and the telecommunications companies

that participate in the program.
60 lnternational Cooperation and Competition in Civilian Space Activities

This issue is tied directly to the question of how

the United States should participate in the United

Nations. U.N. assistance in technology development is necessarily multilateral. Yet, in contributing to development programs, the United States

loses much of the control over the funding and

nearly all of the credit for having provided the

funding. Thus, it is loath to contribute to development programs within the U.N. structure, particularly if the funding is used on projects the

United States would not otherwise agree to or

to support the U.N. bureaucracy. If the United

States were to contribute more heavily to multilateral assistance, it would certainly wish to do

so in circumstances in which it could exercise

more control over funded projects.

Cooperation in the Face of Competition

Cooperative agreements with other industrialized countries have always been undertaken for

a different set of reasons and under a different

set of guidelines than those with developing

countries; in addition to the considerable political benefits accruing from cooperating with our

allies, considerations of saving U.S. costs and of

exchanging engineering know-how have been

important. However, in recent years those industrialized countries with whom we cooperate

have also become commercial and scientific

competitors. Thus, as noted elsewhere in this report, the terms on which we might wish to cooperate with the industrialized, space-capable nations have altered. Because of their increased

capability in space our new competitors have

something to teach us, The possibility for costsaving and sharing engineering and scientific

know-how have become more important than

they once were.

Although by cooperating with other spacecapable nations the United States can accomplish

important technological goals, it also runs the risk

of transferring certain technology to potential

economic competitors. Yet the United States cannot hope to lead in all space technologies without enormous expenditures. Cooperation continues to be in the long-term economic interest of

the United States. As the technology chapters discuss, precisely what policy to follow will depend

on the particular technology under consideration.

The competitive risks of technology transfer are

high in some and lower in others. In generaI,

however, the potential for technology transfer to

the United States, or cost sharing, requires a reexamination of the terms of cooperation with the

industrialized nations.

In some respects, the United States must cooperate with the western industrialized nations

in order to demonstrate leadership in space. As

chapter 4 emphasizes, the terms of such competition in the political realm extend not only to the

western industrialized nations, but also to the Soviet Union. For example, the Soviet Union has

cooperated with France in space science and in

the manned space program by bringing a French

cosmonaut aboard the Salyut space station. The

United States has flown a German payload specialist aboard the Shuttle and will, in the future,

fly French and Arab payload specialists as well

as other foreign nationals.

Cooperation among competitors is well illustrated in the commercial satellite communications industry, where competitors sometimes

team up for commercial reasons. For example,

in the competition for supplying Arabsat, for political reasons U.S. companies were at a strong

disadvantage. However, by teaming with the

French firm Aerospatiale, the U.S. firm Ford

Aerospace was able to capture the majority share

of the contract to build Arabsat. 53

If the United States is able to establish the private sector in the land remote sensing business

(see ch. 7), the French-built SPOT remote sensing satellite will in one sense be in direct competition with a U.S. firm for high resolution data.

Yet, data from the U.S. system will not have spatial resolution comparable to the SPOT data for

several years. On the other hand, the U.S. system will have greater spectral capabilities. Consequently, because the competing systems serve

somewhat different aspects of the overall market, it is in the interest of both to cooperate, at

least, in setting data format, satellite passage, and

perhaps in using the same receiving stations. The

United States could promote the interests of the

SJSee ch. 6. Aerospatiale became the prime contractor and Ford

Aerospace the chief subcontractor. Ford Aerospace has actually

built the satellite.
Ch. 3—Internationa/ Space Cooperation ● 6 1

U.S. data sellers and data users by encouraging

cooperation between the two countries. Mechanisms already exist for such cooperation, and

these could be continued and perhaps extended

in some form if transfer of U.S. land remote sensing to the private sector is accomplished. As offered as an option in chapter 7, it maybe appropriate to consider establishing an international

remote sensing corporation.

Because cooperation for scientific purposes can

benefit all participants, it may be appropriate for

the United States to seek cooperative ventures

in studying materials processing in space. It might

be possible to provide facilities, etc., on a cooperative basis. However, in this area, technology

transfer at the production stage is a serious concern, because the potential for using U.S. technology in competition with U.S. private sector

is higher. In some areas of materials processing,

because of European experience, the United

States could be in a position to gain technology

from the Europeans.

in activities such as meteorological or ocean

remote sensing where the public interest is paramount, interdependence and cooperative arrangements are and will remain highly productive. For example, the United States is now

attempting to develop a cooperative meteorological polar orbiter system with the Western industrialized countries (see ch. 7). This is a form

of cooperation that would not have been possible before the Europeans and the Japanese developed the ability to compete with us in designing and building space systems.

As noted in chapter 9, space science has also

become an arena for competition among nations.

However, space science remains the most active

area for government-to-govern ment cooperation,

for the purpose of saving costs as well as for increasing understanding among nations and furthering scientific knowledge. Chapter 9 details the

many cooperative ventures in space science that

the United States has carried out or has planned

with other nations.
Chapter 4

COMPETITION
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 Relevance to

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. NationaI 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
—.

Chapter 4

COMPETITION

THE SPACE POWERS

Dominant Role of Governments

Space activities today are primarily governmental: governments finance the research and development of space technology. They launch and

operate satellites. Even though private sector interest in space has increased, governments still

constitute the major markets for space-related

goods and services. (Civilian satellite telecommunications services in the United States are an exception to this rule, but in most countries outside the United States the telecommunications

service industry is owned and managed by the

govern merit.)

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

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 communications, 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

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 occurs–and

will continue to occur—in a context shaped primarily by the political, military, and economic

interests and actions of national governments.

Comparison of National Space Efforts

Globally, the constellation of space powers

closely resembles the constellation of politicalmilitary powers. The superpowers of space are

the United States and the Soviet Union, followed

somewhat distantly by Western Europe (with a

partially unified space program under the European Space Agency (ESA)l and Japan.

When national space budgets are compared

(fig. 4-1 ), the space programs of the United States

‘just as the Western European Community is not fully integrated,

neither are the space programs of the European Space Agency members. About half of the West German space budget goes into ESA

projects. Less than half the French space budget goes to ESA. Most

of the smaller British, Italian, Dutch, and Spanish space budgets

go to ESA.

25

20

15

10

5

0

.

Figure 4.1.—National Space Budgets

Compared—1984 (billion U.S. dollars)

(Est. 2:

17.5

0.85

+

0.57 0.53 0.12

r I I i 4

Soviet United France JaDan West EuroDean

Unio n

a Statesa Germany Space

Agency

alncludes military space bucfget, but excludes classified militarY and intf?lligence programs.

bEstimated cost the Llnited States would incur to duplicate Soviet effort.

SOURCE: Office of Technology Assessment.

65
66 ● International Cooperation and Competition in Civilian Space Activities

and the Soviet Union are by far the largest both

absolutely and relatively. Recent estimates mark

the overall Soviet space effort as substantially

greater than its U.S. counterpart.z 3 Some 600,000

people are thought to be employed in the Soviet

space programs, civilian and military (as much

as four times the total in the United States). Soviet expenditures on space in 1985 are estimated

to be some $23 billion, representing from 1.5 to

2.0 percent of Soviet gross national product

(GNP); total U.S. space expenditures are estimated to represent only about 0.5 percent of U.S.

GNP.

In contrast, the French, the West German, and

the Japanese space budgets are each only about

3 percent that of the United States (civilian plus

military). When percentages of GNP devoted to

space budgets are taken as indices of national ef2Alain Dupas, “Un Programme Spatial En Plein Remouveau, ” La

Reclrerche, November 1984, vol. 15, pp. 1420-1427.

3Nicholas johnson, “The Soviet Space–Current Plans and Programs–Future Direction, ” Space: The Next Ten Years, TMSA Proceedings, 1984, p. 94.

fort devoted to space, the level of U.S. space effort is approximately 6 times that of France, 11

times that of West Germany, and 11 times that

of Japan. Although the governments of France,

West Germany, and several other European countries (plus Canada) aggregate parts of their space

budgets in the European Space Agency, the U.S.

space budget is still eight times that of ESA. In

short, in terms of spending the United States is

by far the leading space power of the non-Communist world, whether the measure of effort is

absolute or relative.

Table 4-1 .—Space Expenditure

As a ~ercent

Country of “GNP

United States. . . . . . . . . . . . . . . . . . . . . . . 0.47

France. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.08

Federal Republic of Germany. . . . . . . . . 0.04

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.04

Italy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.03

United Kingdom . . . . . . . . . . . . . . . . . . . . 0.03

SOURCE: SEST/Euroconsult 1964-M.

INTERSECTING LINES OF COMPETITION

Political Competition

International competition in space began as a

highly political duel between the United States

and the Soviet Union. The Soviet Union scored

a propaganda coup against the United States

when it launched the first artificial Earth satellite,

Sputnik 1, in 1957. When the U.S. Navy team,

having started essentially from scratch, failed to

get a Vanguard satellite into orbit, the Army’s

rocket team under Wernher von Braun, relying

on a great deal of accumulated experience dating

from the German V2 program in World War 11,

managed to launch Explorer 1. An informal race

then began to get the first man into orbit. The

United States started work on Project Mercury

late in 1958, but in 1961 the Soviet Union won

that sprint with Yuri Gagarin in Vostok 1. Six

weeks later President Kennedy announced his

goal of placing Americans on the Moon by the

end of the decade. The United States won that

long-distance race in 1969.4 Both sides proclaimed

their interest in exploring space for the benefit

of mankind, but political motives clearly ranked

high in the decisions to race for space.

The Soviet Union, generally inferior to the

United States in economic and technological performance, was able to prove superiority in at least

some areas. The United States, particularly in the

early years, felt a strong need to “catch up” with

the Soviet Union. Both sides found in space successes a source of national pride and self-respect.

At the same time, they demonstrated to the rest

of the world that their respective (and competing)

political and social systems were powerful and

4

For discussions of the evidence as to whether the Soviets were

seriously committed to the moon race, see Marcia Smith, “Program

Details of Man-Related Flights” in U.S. Congress, Senate, Soviet

Space Programs, 1971-75, Vol. /, Staff Report Prepared for the Use

of the Committee on Aeronautical and Space Sciences, U.S. Senate, 1976, pp. 218-221; see also Charles S. Sheldon, 11, “Projections of Soviet Space Plans, ” ibid., pp. 502-515.
Ch. 4—Competition ● 6 7

effective. Moreover, each hoped that recognition

as an advanced technical power would enhance

its attractiveness as a political and trading partner.

After the United States reached the Moon, the

contest became less direct (at least in civilian

space activities) between the two great space

powers, but the element of political competition

remained. By then, several new entrants had entered the field. The European Space Research Organization (a precursor of ESA) seems to have

originated in a December 1960 discussion among

a group of European scientists about the impact

of space technology on science and:

the then-hot issue of the “brain drain”

[owing] to the explosive development of science

and technology in the United States. s

Although in its first years—between 1966 and

1970—the European Space Research Organization concentrated on scientific research:

The stated objectives of space collaboration

in Europe . . . were constantly presented in a

way that obscured the most fundarnenta/ reason

for cooperation, which was to help European industry develop its know-how and potential.G

Here is how the Director of Programs of the

French national space agency has described

French space policy:

For twenty years France has had the constant

will to develop a European capacity in the domain of space and to prove that our country and

Europe are in a position, as much in the domain

of launchers as in that of satellites and associated ground equipment, to play a role on the

world level. This will, which is affirmed equally

in the national program and in the European

cases, has permitted us to acquire, step by step,

the autonomy indispensable for satisfying national and European needs and for developing a dynamic and exporting space industry. ’

There is not much doubt that the “autonomy”

mentioned here means autonomy from the

United States, During that same 20 years France

has consistently striven for military, political, and

5A. Dattner, “Reflections on Europe in Space—The First TWO Decades and Beyond, ” ESA BR-10 (Paris: European Space Agency,

March 1982), p. 5.

Glbid., p. 7.

7jean-Marie Luton, “La politique spatiale franchise,” Les Cahiers

Francais, No. 206-207, May-September 1982, p. 89.

economic independence from the United States.

It has also encouraged its European partners to

do likewise–preferably asserting European independence under French leadership.

The transformation of the French Diamant

launch vehicle program into the ESA Ariane program was consistent with this broader French European policy. The French argued in the 1960s

and early 1970s that Europe needed its own

launch capabilities, independent of the United

States, so that a European satellite industry could

develop. They expressed fear that although the

United States had said it would always make

launch services available to the Europeans, it

might not actually do so if the Europeans chose

to build satellites in competition with American

products.

Offering to lead the development of a European

launcher within ESA, the French used a cooperative space project for competitive purposes. The

French launch vehicle program was brought to

bear in the French effort to compete with the

United States for leadership in Europe. In addition, European pooling of resources on the Ariane

has permitted ESA to raise a challenge to U.S.

domination of the market for launch services.

Other ESA projects–weather observation satellites and communications satellites–appear designed to reduce European dependence on American suppliers.

Most of the space powers, major and minor,

have sought to use their space assets as political

instruments for cementing ties with friends and

allies and for winning friends and influence in the

less developed countries. (See ch. 3 for more details.) The Soviet Union has encouraged the French

in their assertions of independence from the

United States by offering themselves as an alternative partner in space cooperation.8 The Soviets

have used their Intercosmos and lntersputnik coI$AS a congressional Research Service Analyst has put it, “Expanding space relations with France opened up potential opportunities

for the Soviets to influence the French politically, particularly in

seeking the much cherished Soviet foreign policy goal of dividing

the West.” Joseph Whelan, “Soviet Attitude Toward International

Cooperation in Space, ” ch. 3 of Soviet Space Programs: 1976 -80,”

op. cit., p. 290.

The French, for their part, have found it useful to counterbalance

U.S. power by forming a closer relationship with the Soviets than

the United States would like to see.
68 ● International Cooperation and Competition in Civilian Space Activities

operative space programs to strengthen ties with

East European and other Communist countries.

They have also given extensive assistance to the

Indian space program.9

As emphasized in chapter 3, the United States

has a long record of international cooperative

projects in space technology with both industrialized and non industrialized nations, with both allies and nonallies. Besides seeking the benefits

of the international pooling of resources, the

United States has also tried to use these cooperative projects to demonstrate: 1 ) the relative

openness of American society, and, particularly,

American science, in comparison with the closed

nature of Soviet society; and 2) the advantages

of association with the United States and its advanced technology.

In the arena of international organization politics, the competitive aspect of space cooperation comes to the fore.l” The United States and

the Soviet Union have each tried to show in international forums that it was the more peaceable

user of space technology and the nation whose

activities were most in the interests of “mankind”

or the international community. The Soviet Union

has in recent years made much of its willingness

to resume negotiations on space weapons, an offer made especially effective by the unwillingness

of the United States to discuss the question of

arms control measures for space. ’ 1

Military Competition

The space competition between the United

States and the Soviet Union has long been military as well as political (fig. 4-2). Many Americans

took the launch of Sputnik 1 to signify that the

Soviets were about to deploy large numbers of

Intercontinental Ballistic Missiles–a feat the Soviet Union did not achieve until several years after

9“ln the case of India, space cooperation was to play . . . [the

role ] . . . of an instrument for expanding Soviet political influence

in this leading country of the Third World, and thus furthering its

larger purpose of linking the Third World to the Soviet Union’s expected global destiny.” Whelan, op. cit., p. 290.

IOSee the technical memorandum which is part of this OTA Study,

UNISPACE ’82: A Context for International Cooperation and Competition, OTA-TM-ISC-26 (Washington, DC: U.S. Congress, Office

of Technology Assessment, March 1983).

1‘See ibid., “Appendix B: The Militarization Issue at UN ISPACE

‘82, ” pp. 61-67.

Figure 4-2.—U.S. Civilian and Miiitary Space Budgets,

1977.84 (millions of 1982 dollars)

““0 ~

9,000 —

8,500

8,000 —

7,500 —

7,000 —

6,500

6,000

5,500 —

5,000

4,500 —

4,000

3,500 —

3,000 —

2,500 —

2,000 —

1,500 —

1,000 —

500 —

o —

1977 1978 1979 1980 1981 1982 1983 1984

❑ Civilian

Years

_ Military

(excluding classified programs)

SOURCE: Office of Technology Assessment.

the United States had done so. Somewhat more

quietly, the United States and the Soviet Union

set about applying space technology to the enhancement of terrestrial military power. A discussion of the military space programs of the two

nations is beyond the scope of this report. However, both sides now make extensive military use

of space for purposes of geodesy, navigation,

weather forecasting, reconnaissance, missileIaunch warning, and communications.

Economic Competition

The one line of space competition in which the

U.S.-Soviet antagonistic relationship has not been

central has been the economic. Indeed, for most

of the Space Age there has been very little international economic competition at all. The Soviet

Union has been the main supplier of space-related goods and services to the Communist world.

But, except in France and India, it did not try to

compete with the United States as the chief sup-
Ch. 4—Competition . 69

plier to the rest of the world. Most non-Communist national space programs have been highly

dependent on U.S. satellites, U.S. launch services, and U.S.-licensed space technology.

The U.S. space program remains the benchmark by which other non-Communist nations

judge the progress of their own. At the same time,

Japan and the Western European space powers

(especially France) have been seeking greater independence from the United States as the major supplier of space technology and of spacerelated goods and services. These new space

powers are beginning to offer some competition

where before the United States held a virtual

monopoly. Instead of relying substantially on U.S.

suppliers, they are beginning to produce spacerelated goods and services domestically. Some

are beginning to offer export competition as well.

Competition is greatest in the areas of launch

services, satellite remote sensing services, and

communications satellite equipment and services.

Competition in the processing of materials in orbit is currently embryonic but may become significant in the future.

Intersections of the

Lines of Competition

In part because space activities are so heavily

governmental, the political, military, and economic lines of competition are not so divergent

as the above analysis might indicate. In fact, they

are sometimes difficult to separate.

1. Political-economic: For example, when a government undertakes to build a domestic launch

vehicle industry (as have France and Japan),

does it do so to conserve or earn additional

foreign exchange, or does it do so to remove

U.S. influence over the national space program? Economic dependence may seem inseparable from political dependence, and economic independence may be sought even

when it is economically inefficient. Government efforts to subsidize exports of space

goods or services in order to gain political influence over potential buyers may have “mercantilist” economic motives that reinforce the

political competition.

2.

3.

—

Political-military: The U.S. military space program may have important effects on the political competition. For example, if the Soviets

succeed in fostering the impression that the

U.S. program is the main cause of the current

‘‘miIitarization’ of space, the United States

may lose good will otherwise earned by its cooperative programs and its visible successes in

space technology.12 If the Space Shuttle or a

future space station are seen as dominated by

the military, that perception may reduce the

willingness of the European Space Agency to

cooperate in using the U.S. vehicle or platform. 13 U.S. cooperative programs may also

be hampered by attempts to limit the export

of technology for “national security” reasons.

Military-economic: The same problem may affect the competitiveness of U.S. firms in the

international space marketplace. Efforts to

keep American technology out of Soviet hands

may also keep it out of the hands of potential

Western customers.14 If the process of controlling exports appears capricious, it could give

the United States a reputation of being an unreliable supplier. Technology kept out of hands

of the U.S. civilian space program (say, highresolution remote sensors) may weaken its

ability to compete with foreign providers of remotely sensed images.

The impact of the U.S. military space program on U.S. competitiveness in space industries is complex and ambiguous. For example,

billions of military dollars spent over many

years have certainly helped to build the scientific and technological base, the manpower,

and the plants which have made U.S. firms the

competitors they are in international space

markets.ls Potential competitors with the U.S.

point to this subsidization as ample reason for

I ZUNp5pACE ’82, op. cit.

13ESA’5 by]aws prevent cooperation in rnilitary-related activities.

laTechno/ogy and East-west Trade: An Update, OTA-IS C-209

(Washington, DC: U.S. Congress, Office of Technology Assessment,

May 1983).

I SFor a repo~ on how government work has benefited one SuPplier of space equipment, see james Cook, “A Paragon Called

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 specialhand, it is also true that the increasing govern- ized plants that might otherwise have particiment expenditure on military space programs pated more directly in the civilian competition.

NATIONAL PROGRAMS AND STRATEGIES

Economic Motives for National

Space Programs

The economic motives for national space programs are more complex than the straightforward

desire to compete for international markets in

space goods and services. The space-faring countries commit national resources to space activities

●

●

●

●

●

●

●

in part out of hopes or beliefs that:

space research will contribute to the general

advancement of national scientific development;

efforts in space technology will contribute

to building and maintaining a strong national

technology base;

applications of space technology such as

remote sensing or satellite communications

will contribute to national economic growth;

useful products will spin off from space technology;

leadership in space technology will benefit

other industries in international competition

by promoting perceptions of the nation as

being at the forefront of modern technology

in general;

the space program will foster the development of space-related industries with competitively exportable products; and

the export of space-related goods or services

will help open up new markets for other

high-technology exports.

The mix of economic motives varies from country to country. Degrees and kinds of governmental support for space activities therefore vary in

turn with national conceptions of how those activities might contribute to economic growth and

competitiveness.

The Programs

European Space Agency

The European Space Agency (ESA) is something

more than an alliance of national space programs,

but something less than a third space superpower. It is a mechanism for pooling the financial and

industrial resources (table 4- I ) of several European countries in cooperative space projects (see

also ch. 3).

The French threatened in 1970 to quit the European Space Research Organization (ESRO) unless

it reduced its purely scientific programs in favor

of developing applications satellites. In 1971, the

European Launch Development Organization

(ELDO) abandoned its planned Europa series of

launchers. Late in 1972, the French indicated a

willingness to provide the majority of funding for

a European launcher. In July 1973, the ESRO

states accepted the French proposal. In the same

year, the European Space Council (with members

from both ESRO and ELDO states) arrived at a

“package deal” in which they agreed to form the

European Space Agency, combining the previous functions of ESRO and ELDO (the actual

merger took place in 1975).

During the late 1960s, West Germany supported the French position on the importance of

a European launch vehicle independent of the

United States. In 1969, the United States offered

the Europeans the opportunity to participate in

the Space Shuttle program. The Germans were

interested. More eager than the French to

strengthen cooperative ties with the United

States, they were more willing to rely on U.S.

guarantees that the ShuttIe would be fully available for European satellite launches.
Ch. 4—Competition 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 Ariane 4

Belgium . . 4.61 4.49 4.50 3.72

Denmark ., ~ ~ ~ ~ ~ ~ 2.30 2.51 2.92 1.99

France. 27.47 21.40 25.00 18.31

Germany 24.88 25.57 25.66 24.00

Ireland. ... ., ... 0.49 0.54 – –

Italy , 7.36 12.46 12.46 10.61

Netherlands ” 5.50 6.00 – 5.00

Spai n 4,76 5.04 – 2.00

Sweden ., ., : : ., 3.92 4,25 – 3.90

Switzerland ... . 3.84 3.99 4.10 1,70

United Kingdom ... 12.50 13.75 14.05 13.34

Other participants:

Austria ,. .., 0.38 – – –

Norway, ,., ,. . 0.54 – – 1,50

Canada . . . . . . . .,, 1.45 – – 9.10

Other income .. ..,,, – – 11.31 4.83

Key

ESA Kourou Launch faclhty m French Guana for the Arlane launcher

Science includes Exosat–X-ray observatory satelhte

International Solar Polar Mmon

Hlpparcos–Space astronomy satelhte

Glotto–probe of Comet Halley

Partlclpatlon m NASA Space Telescope

Meteosat Exploltatlon Use of data from the ESA geostatlonary weather observation satelhtes

ERS-1 A remote sensing satellite, with sensors for physical oceanography, glaclology, and

cllmatatology To be launched In 1987

SOURCE European Space Agency

When the ELDO and ESRO members combined

those organizations in the new ESA, they agreed

on a division of labor among the three major participants. France would pay for 62.5 percent of

the development of the ESA launch vehicle (Ariane).

The United Kingdom would pay for most (56 percent) of the Marots maritime communications satellite (later “Marecs A“ and “Marecs B“). Germany would take the lead in the Spacelab, a

Space Shuttle project, paying for 52.5 percent of

its developmental G Thus ESA’S largest single project, the Ariane launcher development under

French leadership, was designed to deal competitively with the U.S. space program. The second

largest project, the Spacelab under German leadership, was designed to increase cooperation with

the United States.

The explicit rationale for ESA was to allow the

member states to combine their resources for activities in a field—space technology—too costly

for any single European nation to engage in alone.

The Convention chartering ESA specifically

‘bMichiel Schwarz, “European Policies on Space Science and

Technology, 1960-1978.” Research Policy 8, 1979, pp. 204-243.

3.27

0.33

25.93

30.68 —

14.78

0.94

0.17

1,62

2.13

20.15

3.19

0.74

26.52

30,42 —

13.85

1.77

0.53

3.97

0.55

18.46

3.70

1.30

—

—

—

32.80

11.80

2.60

—

—

34.30

5.07

1.81

12.07

64.78 —

1.00

2.53

3.38

—

1,00

7.60

11.00

2.75

59.55

21.00 —

2.00

—

2.50

—

1.00 —

2.80

0.15

52.90

20.79

0,04

7,75

2.00

2.50

1,39

1,60

3.55

— — 0.75 0.76 – – — — — — — —

— — 9.00 – – –

— — 3.75 – – 4.53

ECS 1,2,3,4, & 5 Series of European Commurucatlon Satellites to operate 1984-1994

L-Sat Development of large, multf-purpose safellife for direct broadcasting, business communlcat!ons, experimentation with 30/20 GHz technology

Spacelab Modular laboratory designed for U S Space Shuttle cargo bay

Arlane Development of vehicle to prowde independent European launch serwces and to compete

In the international launch services market

ELA-2 ConstructIon of a second Artane launch stte at Kourou, French Guyana

charges the Agency with elaborating an “industrial policy” designed not only to “coordinate national space programmed in a cost-effective manner,” but also to:

. . . improve the worldwide competitiveness of

European industry by maintaining and developing space technology and by encouraging the

rationalization and development of an industrial

structure appropriate to market requirements,

making use in the first place of the existing industrial potential of all Member States.17

Citing ESA accomplishments in space science,

in satellite telecommunications, and in launch

vehicles (the Ariane), an ESA official boasted in

1982:

[these are] . . . cases where Europe can be described as a winning participant in the global

world competition for space products, competing successfully with the superpowers, whose

space potential is well known to everybody and

whose monopoly one thought could not be

menaced .18

17“Convention for the Establishment of a European Space Agency, ” Article V1.

16 Dattner, op. Cit., p. 37.
72 . International Cooperation and Competition in Civilian Space Activities

The members of ESA expect an economic return from their participation in its activities, and

the Agency has tried to show that those expectations are being met. It commissioned a series

of studies with the Theoretical and Applied Economics Bureau (BETA) of the Louis Pasteur University of Strasbourg aimed at showing the economic benefits of being in ESA. BETA asked a

sample of 77 firms to identify the economic value

of the benefits they derived from having received

ESA contracts. The benefits were described as:

“technological” –development of new products,

diversification into new fields; “commercial”-

increased market penetration; “organization and

methods” –knowledge and management techniques learned which improved internal operations; “work factor’ ’—vaiue of building skilled design and production teams.

The study concluded that the $1 billion which

ESA and its predecessors had granted in contracts

from the early 1960s through 1975 had yielded

another $2.7 billion in benefits to some 550 contractors. In particular, additional exports of $622

million were attributed to the “technological”

and “commercial” categories of benefit:

This indicates the successes achieved by ESA’S

contractors in penetrating difficult export markets such as the United States, where they have

taken part in space programmed funded by

NASA and INTELSAT.19

As one judges the validity of ESA claims about

the economic value of its programs, one should

of course realize that both ESA and its contractors have a vested interest in showing that national returns from the ESA subsidies are greater than

the face value of the contracts. Moreover, despite

the apparent successes of some European aerospace firms, ESA programs have not necessarily

maximized European competitiveness in international markets. The European Space Agency to

some extent reflects the continuing resistance of

Western European nation-states to genuine integration into a larger political and economic unit.

For example, the European Space Agency Convention provides that the industries of the member states should share “equitably” in the work

of ESA—that the contracts granted should be in

rough proportion to the contribution of each

state’s government to ESA. This has become

known as the principle of “fair return” or juste

retour. The principle of fair return means that ESA

is not able to choose those firms that may offer

the best combination of quality and cost, but instead must distribute its contracts geographically.

Then, too, the necessary intermeshing of various

national elements into a single project must impose additional costs on the manufacturers.

Other circumstances also deprive the European

space-related industries from the benefits of competitive bidding. One problem is that expensive

space projects become objects of political pressure. Most ESA contracts are currently negotiated

directly rather than competitively. Another problem is that although three international consortia formerly competed for ESA contracts, those

consortia are breaking down because of industrial mergers, the juste retour principle, and the

lack of sufficient business to keep all of the consortia working at once. z”

Differences in national priorities have led to significant departures from another important principle, that of a single European “industrial structure.” The communications satellite industry is

especially fragmented. Although the Marecs maritime communications satellite is an ESA project,

with the second, Marecs B, satellite, British participation went to 69 percent, while the next biggest share was only 13 percent, held by Germany. * The European Communications Satellites

(ECS), for telephone and some television transmission, have more even participation: Germany

31 percent, France 26 percent, United Kingdom

20 percent, Italy 14 percent.

Zosee W. Thoma, “The Sophia Antipolis Workshop on the Relalg’’Economic Benefits of ESA Contracts: Summary of a Study Con- tionship Between ESA and Industry, ” ESA Bu//etin, May 1983, pp.

ducted by the Theoretical& Applied Economics Bureau of the Louis 13-15.

Pasteur University of Strasbourg for the European Space Agency,” *Marecs B failed to orbit because of a launch failure. Marecs B2

ESA BR-02 (Paris: European Space Agency, October 1979). was successfully launched and deployed in November 1984.
Ch. 4—Competition ● 7 3

But in direct broadcast satellites, the intra-European competition seems to be growing. Within

ESA, the British (34 percent) and the Italians (33

percent) are leading the development of the LSat entirely without French and German participation. Germany and France are sharing in the

development of direct broadcast satellites (the TVSat/TDF 1) entirely outside the ESA framework.

Meanwhile, the United Kingdom, despite the lack

of an agreed European standard for satellite direct broadcasting, is proceeding with its own national direct broadcasting satellite.

France

In the 1960s, France identified certain industrial projects as “national champions’ ’—projects

intended to bring France prestige and autonomy

as well as economic benefit. One such project

was the Concorde supersonic transport, a technical success but an economic failure. Another

was the Plan Calcul, intended to give France a

highly competitive computer industry (marginally

successful at best). The French Government continues to try to guide the development of French

industry through formal plans (the eighth such

plan is now in effect), There is less emphasis on

specific projects like the Concorde, but some

space projects seem to have taken on the role

of “national champions” pursued as much for

prestige and independence as for economic reSuIts.21’

French President Mitterand and his first Minister of Research and Industry called for increased

research aimed at restructuring French industry

to reduce imports and increase exports of hightechnology products.22 The Centre National

ZI FOr a summary cfescriptiorl of recent French industrial poiicy,

see “Appendix D: Foreign Industrial Policies” in U.S. /ndustria/

Competitiveness: A Comparison of Steel, Electronics, and Automobi/es, OTA-ISC-135 (Washington, DC: U.S. Congress, Office of Technology Assessment, )uly 1981), pp. 190-200.

22’’ Mercantilism for the 21st Century, ” Business Week, jan. 10,

1983, p. 54. For a fuller report on French industrial policy, see the

special report on “France,’: the same issue, pp. 45-74.

See also Jean-Pierre Chevenement, Minister of Research and industry, “La Politique Industrielle,” in Industrie & Energie Francaise:

Lettre d’information No. 101 (Paris: Ministry of Research and industry, Sept. 7, 1982). In this speech, the Minister outlined his views

on industrial policy to the heads of the French national research

organizations and of the nationalized industrial enterprises.

For a description of French industrial research objectives, see Recherche et Techno/ogie, No. 2 (monthly information letter of the

d’~tudes Spatia/es (CNES) manages most of the

French space program (table 4-2). CNES is an independent agency under the “tutelage” of the

Ministry of Research and Industry. It disposes of

an annual budget of around 3 billion francs

(about $325 million) (fig. 4-3). Much of that

money is spent with the four largest aerospace

firms of France: Aerospatiale, Matra, SEP, and

Thomson-CSF–firms that are themselves owned

by the French Government (table 4-3).23

CNES, like NASA, operates government research

laboratories and oversees contractor work on satellites and launch vehicles. Unlike NASA, CNES

itself is a key shareholder in important commercial ventures. Not only has CNES managed the

development of ESA’S Ariane launcher, but it is

the largest single shareholder (34 percent) in

Arianespace, the company created to manage the

marketing, production, and operation of the

rocket. Similarly, CNES holds 34 percent of SPOT

Image, S. A., the company which will sell the services of the French SPOT remote sensing satellite.

CNES formulated the French space policy

adopted by the French Government in October

1981. According to the Director of Programs of

CNES, the objectives of French space policy

include:

To consolidate our position in the principal

domains of application (telecommunications,

television, Earth observation), to construct a solid

space industry and enlarge our penetration of

the international market for launchers, satellites,

and associated services and ground equipment.24

In addition, the French space program is to

carry out basic engineering and scientific research

to prepare for changes in space systems of the

Ministry of Research and Technology), September 1982. See also

joel Stratte-McClure, “French Technology: Preparing for the 21st

Century, ” Special Advertising Supplement to Scientific American,

November 1982, pp. F1-F30.

IJOne firm, the soci~t~ Europ~ene de Propulsion (S. E. P.) nicely

illustrates the French competitive attitude. The French Government

created the firm in 1969 to develop solid rocket motors for the

French nuclear missile force. In 1971, the Ballistics and Aeronautics

Laboratory (L. R. B.A.) was folded into S.E.P. to “ . . . create a unit

competitive with the American companies in the domain of large

liquid-fueled motors for satellite launchers. ” pierre Soufflet, president and director general of S. E. P., ”La S. E.P.,” in “Les quatres

grands de I’industrie spatiale fran~aise” in Les Cahiers FranCais, No.

206-207, May-September 1982, p. 11.

24 Luton, “ op. cit., p, 94.
74 ● International Cooperation and Competition in Civilian Space Activities

Table 4-3.—French Space Programs

Project Mission Year Comment

National programs

Telecom I . . . . . . . . . . . . Business telecommunications; TV; 1983

telephone; overseas connections

SPOT . . . . . . . . . . . . . . . . Inventory of terrestrial resources by 1985

satellite remote sensing

Biiaterai programs

ARGOS . . . . . . . . . . . . . .Operational service of location and 1978-1989

collection of meteorological and

oceanographic data

ARCAD 3 . . . . . . . . . . . . .Study of the magnetosphere 1981

SARGOS . . . . . . . . . . . . .Search and rescue of ships and planes in From 1982

distress

First manned flight . . . .Studies of materials, astronomy, 1982

medicine, biology aboard a Soviet space

station

Venera-HaIley . . . . . . . . .Study of Venus in 1985 and Halley’s

Comet in 1986 1984

TDF 1 . . . . . . . . . . . . . . . . Direct Broadcast Television satellite with 1985

two France networks

Projects with European Space Agency (degree of French participation varfes)

Ariane 1,2,3,4 . . . . . . . . . European heavy launcher developed under 1979-1986

supervision of CNES

Meteosat . . . . . . . . . . . . . Imaging, broadcast and collection of 1982

meteorological data

MARECS . . . . . . . . . . . . . Maritime communications 1982

EXOSAT . . . . . . . . . . . . . .X-ray astronomy 1982

ECX . . . . . . . . . . . . . . . . . European Communications Satellite; intra- 1982-1990

European telephone and telegraph

Spacelab . . . . . . . . . . . . .Orbiting laboratory integrated with U.S. 1983-1986

space shuttle

Giotto. . . . . . . . . . . . . . . .Study of Halley’s Comet 1985

Hipparcos . . . . . . . . . . . . Study position and movement of stars 1986

international programs

!ntelsat V International telecommunications Since 1980

Telecom satellites 1A and 1 B; Ariane

launcher

SPOT 1 satellite; Ariane launcher

French system aboard 10 U.S. NOAA

satellites

Soviet Arcad satellite; French computer

and experiments

French system aboard 6 U.S. NOAA

satellites

French experiments conducted with

French-Soviet equipment

French experiments on two Soviet probes

Cooperative program with West Germany;

1 French TDF 1 satellite, 1 German

TV-sat

Ariane 1 qualified 1981; Ariane 2-3 two

flights in 1984; Ariane 4 available 1986;

Financing mostly French

1 European Meteosat satellite: Ariane

launcher

Marecs A lost in Ariane launch failure;

Financing mostly British

Satellite planned for Ariane launch but

switched to U.S. Delta launcher

5 satellites; Ariane launcher

Financing predominantly German

Planetary probe to be launched in July

1985; Overflight of Mars in 1986; Ariane

launcher

Satellite to be launched by Ariane

12 satellites plus 3 options on Intelsat

network; Launchers: Ariane and Atlas

Centaur

SOURCE: Adapted from Cahiers Francais, “Les enjeux de I’esnare,” No. 206-207, May-Sepatember 19S3, p. 91

1990s, to participate in international research, particularly in international markets, from the comand to maintain European solidarity and coop- petence and methods acquired over 15 years.”25

eration. Although the French space program is generCNES is to work closely with other French Gov- ally justified in terms of its contribution to indusernment 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” apnications, broadcasting, and national defense. At preach: they may be pursued as much for their

the same time its mission also includes “the encouragement of French industry to get full value, z5J~~n-Marie LIJtOnl “Le C. N. E.S.,” Ibid., p. 96.
Ch. 4—Competition ● 7 5

Figure 4.3.—CNES and NASA Budgets Compareda

France: CNES

R&D Program

Science

support

Applications

R&D

Q ! l

United States: NASA I

Launchers

aArea of circle represents relative size of space bucfgets

SOURCE: Office of Technology Assessment

contributions to visibility and prestige as for their

promise of economic return. One project is the

Ariane rocket, formally an ESA program, but predominantly a French one. The other is the SPOT

land remote sensing satellite, which France proceeded with independently when it was not accepted as an ESA project (see chs. 5 and 7).

West Germany

Unlike France, which seems determined to establish 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 purposes: to invest in basic scientific research, to

enhance the overall technological capabilities of

German industry, to be a cooperative trading

partner and ally (e.g., Ariane and spacelab), and,

in the case of communications satellites, to realize

some of the benefits of space applications.

The German space budget of about $350 million a year is administered by the Ministry of Research and Technology (BMFT) (fig. 4-4). An official BMFT document describes the purposes of

the space program this way:

1. Advancement of basic research as a cultural

contribution and basis of a longer run security and productivity of our economy. Germany 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 component 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,

with its extreme demands on scientific and

technical creativity, the space program

should stimulate motivation and productive

readiness in all areas of science and

economy.

3. Strengthening of the competitiveness of industry through direct commercial utilization

of space technology. The industry should

reach a level of accomplishment that allows

it to achieve a share of the world market for

space-technological products (table 4-4).

Our own use of these products for public

services will advance competitiveness in the

world market, 26

zGDer Bundesminister fur Forschung und Technologies, 14efte5

Weltraumprogramm, Bundesrepublik Deutschland (Federal Republic of Germany: Ministry of Research and Technology, 1982) (OTA

translation of quotation).
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

Aerospatiale

Subtotal space and missiles . . . . . . . . . . . . 1,781

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,500

Percent space and missiles . . . . . . . . . . . . . 19

Matra

Satellites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172

Launchers . . . . . . . . . . . . . . . . . . . . . . . . . . 67

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total space . . . . . . . . . . . . . . . . . . . . . . . . . . . 239

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,249

Percent space . . . . . . . . . . . . . . . . . . . . . . . . . 11

SEP

Satellites 7

Launchers . . . . . . . . . . . . . . . . . . . . . . . . . . 344

Subtotal space . . . . . . . . . . . . . . . . . . . . . . . . 351

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 854

Percent space . . . . . . . . . . . . . . . . . . . . . . . . . 41

Thomson-CSF

Satellites . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

Ground Equipment . . . . . . . . . . . . . . . . . . . 219

Space . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 272

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,955

Percent space . . . . . . . . . . . . . . . . . . . . . . . . . 4

SOURCE: S.ES.TV “L’tndustire Spatiale Dans LeMonde/’ vol. 1, Paris.

Figure 4-4.— Funding Organization of

:tivities

Other German

Foreign

Projects and programs

%erman aerospace research establishment.

SOURCE: DFVLR.

2,543

11,400

22

169

85

254

2,939

9

6

291

297

773

38

53

275

328

9,440

3

2,642

13,200

20

285

55

340

2,903

12

33

244

277

908

31

13

421

560

12,794

4

2,845

16,500

17

499

152

51

702

4,501

16

62

342

404

1,055

38

250

NA

NA

NA

Table 4-5.—Turnover in the Largest

German Space Firms, 1981

Personnel Turnover

(space (million

Company activities) dollars)

Messerschmitt-BoelkowBlohm/ERNO . . . . . . . . . . 1,200 177.60

Dornier . . . . . . . . . . . . . . . . . NA 88.80

AEG-Telefunken . . . . . . . . . . 600 39.96

NA—Not available,

SOURCE: S.E.S.T. “L’lndustire Spatiale Dans LeMonde;’ vol. I, Paris.

Given the ability of the Spacelab to support

manned experiments in orbit, materials processing in space is a logical field of interest for German research.27 (See ch. 8, “Materials Processingin Space.) The FRG contributes well over 25

percent of the ESA microgravity research program, its share for 1984 being some $12 million.

— —

2The German reason for building the Spacelab had moretodo

with wanting toacceptthe partnership in advanced technology offered by the United States than it did with anya priori beliefin

the usefulness of the Spacelab in developing a materials processing industry.
Ch. 4—Competition “ 77

Recently, ESA approved Phase II of this program;

it will run from 1985 to 1989 with a total budget

envelope of some $170 million. Of this, the FRG

has agreed to contribute 40 percent. Total FRG

spending for MPS research totaled $28 million in

1984, a sum rivaled only by NASA’s 1984 expenditure of about $25.6 million.

Japan

Over the past several decades, Japan has evolved

a variety of mechanisms by which the government—particularly through the Ministry of international Trade and Industry (MITl)—influences

private businesses so as to try to shape the national economy along planned lines. These mechanisms have included:

. . . selective access to governmental or government-guaranteed financing, targeted tax breaks,

government-supervised investment coordination

in order to keep all participants profitable, the

equitable allocation by the state of burdens during times of adversity , . . , governmental assistance in the commercialization and sale of products, and governmental assistance when an

industry as a whole begins to decline, 28

There is considerable debate about whether

MITl has enforced a strategic “industrial policy”

which successfully picks and promotes “winners”

in international economic competition.29 Whatever the actual effectiveness of MITI, its economic

planners did design a new strategy they hoped

would adapt the Japanese economy to the new

conditions encountered in the 1970s and expected in the 1980s.

The current Japanese declaratory strategy

stresses growth of “knowledge-based” industries

and the development of Japan as a “high-technology” society, one less dependent on the import of raw materials for re-export as manufaczschalrners Johnson, MITI and the Japanese Miracle: the Growth

of /nc/ustria/ Po/icy, 1925-1975 (Stanford, CA: Stanford University

Press, 1982), p. 311.

Zgcf. Robe~s, Op. cit.; Philip Trezise, “Industrial Policy Not the

Major Reason for Japan’s Success, ” The Brookings Review, spring

1983, pp. 13-18; Gary Saxonhouse, “Japanese High Technology,

Government Policy, and Evolving Comparative Advantage in Goods

and Services” (University of Michigan, Department of Economics:

photocopy, Apr. 1, 1982.); jimmy Wheeler, Merit E. Janow, and

Thomas Pepper, )apanese Incfustrial Development Policies in the

1980s: Implications for U.S. Trade and Investment (Croton-on-Hudson, NY: The Hudson Institute, 1982), p. 138.

tured goods and more dependent on the export

information and technology produced in Japan.

Consistent with this approach is an emphasis on

strengthening Japanese science and technology.

JAPANESE SCIENCE AND

TECHNOLOGY POLICY

The Japanese are fully aware of their national

weaknesses in science and technology (compared with, for example, the United States). Their

government has outlined policies to build on Japanese strengths and remedy their weaknesses.

Japanese research expenditures account for

about 10 percent of the world’s total, as does the

Japanese GNP. Japan also possesses about 12 percent of the world’s researchers.30 It exports about

12 percent of the world’s technology-intensive

products. Using a mix of indexes of technological “power,” the Japanese Science and Technology Agency found Japan to be relatively high in

current technological capability, but lower than

desirable in the potential for developing new

technology. In terms of royalties paid for the

licensed use of foreign technology, Japan is still

a net importer of technology. Even so, when new

annual licensing only is measured, Japan has already begun to export more technology than it

imports.

The Japanese Government wants to reinforce

this trend. It has concluded that in order to do

so it will have to increase government support

of the basic research that can lead to new technology in the longer run. As other observers have

noted:

. . . there is a distinct bias in Japan’s overall research expenditures toward applied research

and prototype development—a bias reflected

both in government-supported R&D and private

sector research expenditure. 31

In the latter months of 1980, the ministers

whose tasks related to science and technology

met and agreed on a set of policies intended to

“make Japan into a so-called science and technology-oriented country, ” The first measure in

this new set of policies was to increase governJOMUCh of the following taken from “Science & Technology White

Paper ’81 Released,” Science & Technology in Japan, January 1982,

pp. 6-14.

JIWheeler, janow, and Pepper, oP. cit.
78 ● International Cooperation and Competition in Civilian Space Activities

ment investment in research and development

(R& D),32 and thereby increase the proportion of

national income devoted to R&D to 2.5 percent

and eventually to 3 percent. 33 The government

undertook to improve the coordination of national R&D policy among several ministries and agencies. In fiscal year 1981 it appropriated a special

“Science and Technology Promotion Coordination Fund” to be managed by the national Council for Science and Technology. (This fund went

from about $14 million in fiscal year 1981 to

about $25 million in fiscal year 1982.)

Although the Japanese Government has recognized the need to increase basic research, it has

also selected some specific areas of applied research that it thinks will help advance the goal

of becoming a “technology-oriented country. ”

One such area, a highly visible one, has been that

of industrial robotics. Japan has already assumed

world leadership both in the use and the export

of computer-controlled machines in manufacturing.34 Another well-known project is the “Fifth

Generation Computer Project,” a research effort

on which Japanese Government and industry will

spend about $500 million over 10 years.

THE JAPANESE SPACE PROGRAM

The Japanese space program, although not explicitly a part of this “high-tech” emphasis, seems

to be consistent with it. About 16 percent of all

Japanese Government research and development

expenditures is space-related. In 1968 Japan

formed a Space Activities Commission (SAC) to

formulate space policy (fig. 4-5). The chairman

of this five-man Commission is the Minister of the

Science and Technology Agency; the STA pro32’’ Science & Technology White Paper ’81 Released,” op cit., p.

11.

The other elements of the policy for promoting science and technology were as follows:

● Expansion and improvement of evaluation systems;

● Establishment of an organic system for coordinating activities among

academic, industrial and government circles;

. Promotion of original scientific and technological development;

● Recruitment and training of science and technology personnel;

● Promotion of international cooperation’ in science and technology.

jJThe United States already was spending about 2.5 percent, but

about a quarter of that went to military research, while much less

japanese research is military.

Jdsee, for example, Computerized Manufacturing Automation:

Employment, Education, and the Workplace, OTA-CIT-235 (Washington, DC: U.S. Congress, Office of Technology Assessment, April

1984).

vides the Commission staff. In October 1969, the

SAC put together the first “Space Development

Program, ” a plan it reviews annually. 35

In 1978 the SAC issued an “Outline of Japan’s

Space Development Policy,” enunciating “principles” and “priorities” for the long term. Although the policy statement holds as a priority

goal “keeping Japan’s level of science abreast

with international standards, ” the key words are

probably “ . . . promoting the development of

science and its application in ways suitable to Japan.”

Space science: Japan has launched several scientific satellites for observing astronomical,

near-Earth space, ionospheric, and atmospheric phenomena. They will send their first interplanetary satellite, PLANET A, to study Halley’s

Comet this year. They built hardware for the

joint U.S.-Japan Space Experiments with Particle Accelerators aboard the Space Shuttle’s

first spacelab mission in 1983. Pursuing space

science is consistent with the Japanese goals

of promoting basic research in Japan and partaking of the benefits of international scientific

cooperation.

Meteorological satellites: In 1984, Japan

launched its third geostationary meteorological

satellite. (It should be noted that Japanese meteorological satellites have relied heavily on

American suppliers of key technology.) The

weather information provided to Japan is obviously of benefit to the Japanese economy,

particularly because Japan is so fully a maritime

nation. But by beaming its images to 13 other

Asian and Pacific nations, the satellite also reinforces Japan’s efforts in international cooperation.

The program contributes to Japanese international policy in other ways as well. The first

Japanese weather satellite, launched in 1977,

was a part of the World Weather Watch program of the First GARP (Global Atmospheric

Research Program) Global Experiment. In

1978, Japan held a Joint U.N./WMO Training

Seminar on the Interpretation and Analysis and

Use of Meteorological Satellite Data for Asia

JSMasao Yoshiki, “Japan’s Space Programs, ” /nternationa/ Aerospace Symposium, Paris, june 2-3, 1981, p. 1.
Ch. 4—Competition ● 7 9

Figure 4-5.—Schematic Chart of Organization for Space Activities

I

I

1

-

. -

Laboratory 4 *

I

I

L hlecommunications Sateiiite -—-—. —. —-—- —

Corporation of Japan i

Ministry of Construction I

. Ministry of iioma Affairs

*

~ : ~

. . , Trade Associations

.

NOTES:— . — . Government funded special organization.

● Member companies and trade associations include: C. Itoh & Co., Ltd./Daicel Chemical Industries, Ltd./Daido Oxygen Co., Ltd.nhe Dai4chi Kangyo Bank, Ltd./The Fuji Bank, Ltd./Fujitsu Limited./Hitachi, Ltd./lshikawajima-Harlma Heavy Industries Co., Ltd./lwatsu Electric Co., Ltd./Japan Aircraft Mfg. Co., Ltd./Japan Aviation Electronics Industry, Ltd./Japan Broadcasting Corporation/Japan Propallent Industry Co., Ltd./Japan Radio Company Ltd./Kawasaki Heavy Industries, Ltd./Kokusai Denshln Denwa Co., Ltd./Kokusai Electric Co., Ltd./Kyokuto Boaki Kaiaha, Ltd./The Kyowa Bank, LTD./Kyushu Electrical Construction, Ltd./The Long-Term Credit Bank of

Japan, Ltd./Marubeni Corporation/Matsushita Communication Industrial Co., Ltd./Meisei Electric Co., Ltd./Mitsubishi Corporation/Mitsubishi Electric Corporation/

Mitsubishi Heavy Industries, Ltd./Mitsubishi Precision Company, Ltd./Mitsubishi Space Software Co., Ltd./M}tsui & Co., Ltd./Mitsui Ertgkwering & Shipbuilding Co,,

Ltd./NAC Incorporated/NEC-Honeywell Space Systems, Ltd./Nippon Electronics Development Co,, Ltd./Nippon Electric Company, Limited (N EC)/Nippon Oil & Fats

Co., Ltd./Nippon Sanso K,K./Nlppon Steel Corporation/Nippon Telegraph and Telephone Public Corporation/Nissan Motor Co., Ltd./Nissho Iwai Corporation/Okl Electric Industry Company, Ltd./Okura and Company, Ltd./Remote Sensing Technology Center of Japan/The Sanwa Bank Ltd./Sharp Corporation/The Society of Japanese

Aerospace Companies, lnc./Sumitomo Corporation/Sumitomo Precision Products Co., Ltd./System Development Corporation of Japan, Ltd./lElSAN K. K.rlokyo Akcraft Instrument Co., Ltd JToray Industries Inc.rloshiba Corporation/Tokyo Communication Equipment Co., Ltd.rThe Yokohama Rubber Co., Ltd.

SOURCE: National Space Development Agency of Japan.
80 ● International Cooperation and Competition in Civilian Space Activities

and the West Pacific, bringing together 32 representatives of 19 countries.3b

● Launch vehicles: Building on American technology (licenses to make the McDonnell Douglas Delta), Japan is developing its own stable

of launch vehicles, to culminate in the H-1 and

H-11. The former will be capable of delivering

55o kilograms of payload to geosynchronous

orbit. (See ch. 5 for more details.) The Japanese launch vehicle program is consistent with ●

the principle of “autonomy.” It also opens up

the possibility that someday Japan will enter

3b’’National Paper: Japan, ” op. cit., p. 25.

the international competition in launch vehicle services. But that day is not on the immediate horizon: the modest payloads deliverable

by the H-1 will not match the capabilities of

the Ariane series, let alone that of the Space

Shuttle. Indeed, a major communications satellite planned for the late 1980s by Nippon

Telegraph & Telephone (NTT) will be far too

heavy for the Japanese launcher.

Satellite communications: Satellite communications has offered one promising avenue

along which Japan can pursue its goal of developing a high-technology, information-based

economy. NEC—with technical assistance from
Ch. 4—Competition ● 8 1

Hughes Aircraft Corp.–has become the leading manufacturer of INTELSAT satellite transponders and ground terminals.37

In February 1983, Japan launched the world’s

first operational Ka-band (30/20 GHz) communications satellite. Japan plans a series of direct broadcast satellites and is conducting research on mobile satellite communications.

They reportedly intend to begin launching multi-beam communications satellites in 1988, as

a part of NTT’s “Information Network Systern. ”38

Satellite communications will allow Japan to

improve its domestic communications networks and no doubt contribute in that way to

the advancement of Japanese technology. But

presumably the industry will also more directly

draw on and stimulate Japanese strengths in

electronics technology. As the first, or close to

the first, operators of a Ka-band satellite communications system, Japanese firms may be in

a position to compete more fully in any international satellite market that develops for advanced satellites of this type.

 Remote sensing: In 1975, the Science and

Technology Agency formed the Japan Remote

Sensing Technology Center (RESTEC). Since

1979, Japan has had an operational Landsat receiving station, In 1981, the Machinery and information Industry Bureau of MITI created a

public nonprofit corporation (with funds from

27 firms), the Earth Resources Satellite Data

Analysis Center. One objective of the ERS-DAC

is to help locate mineral resources (the President of ERS-DAC is Director of the Japan Petroleum Exploration Co.). Another seems to be

to lay the groundwork for marketing remote

sensing services.39

JTSee U.S. Congress, House Committee on Science and Technology, Science, Technology, and Energy: Report ofa Congressional

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 1983, p. 33.

spa!epDaily Aug 24 1982 p. 301.

38 a an t. Launch a Multi-Beam Communications Satellk?,” Aero-

. ,

J9ER$DAC activities incl~de the following: contracting for research and development in computer image processing and analysis software; contracting for research and development on the geologic applications of remote sensing for finding nonrenewable

resources; engaging in foreign market research on user needs and

the technical state of the art; exploring foreign technology transfer

and liaison with foreign remote sensing organizations; sponsoring

symposia and publishing documents for internal dissemination of

The Japanese National Aeronautics and Space

Development Agency (NASDA) plans to launch

the first of a series of ocean and land remote

sensing satellites in 1986 (see ch. 7), Meanwhile, remote sensing is one of a handful of

fields selected by the Council for Science and

Technology as a “new vital research theme”

to receive support from the Science and Technology Promotion Coordination Fund.40 One

reason for Japanese Government support of

supercomputer technology is the large-scale

computing capacity useful for remotely sensed

image processing.41

The Japanese Government has not stated an

intention to make Japan an active competitor

in the international remote sensing market.

Even so, the Japanese program could put Japan in a position to:

—satisfy future Japanese remote sensing needs

without dependence on foreign satellites or

image processing facilities;

—enter the market for image-processing equipment and software;

—enter the market for remotely sensed data,

image processing, and image analysis; and

—offer remote sensing services to less developed countries in exchange for special consideration in supplying nonrenewable resources.

As an especially knowledge-intensive, hightechnology industry, remote sensing seems to

be a natural choice as a small element in the

stated Japanese industrial strategy for the 1980s

and 1990s.

In sum, the Japanese have been making steady

progress in space, but their program has, for the

past several years, maintained a level budget (fig.

4-6), which means that their real effort has declined after inflation.42 Like the other space

remote sensing analysis techniques. Source: 1982 ERS-DAC

brochure.

40’’ New Fund for Coordination and Promotion of Science and

Technology Policies, “Science & Technology in Japan, january 1982,

p. 21.

AI See Buzbee, et al., op. cit., P. 1189.

42 Takashi Yamada, “japan’s National Space Program–Current

Programs and New Directions, ” Space: The Next Ten Years, TMSA

Symposium Proceedings, 1984, p. 324.
82 ● International Cooperation and Competition in Civilian Space Activities

110 .

100 .

90 -

80 -

77.C

a

70 - A 60 - 57.5

A

50

40 - 36.6

30 -

A

24.0

20 — ,4

,8 15.4A

10

0

t

Gov .

budget

600

500

400

~

300

200

100

Years

NOTE: Since 1981, the proportion of GNP and the national budget devoted to space developments has remained constant at 0.20/. and 0.040/. respectively.

Growth of NASDA’S budget

1,100

1 ,Ooc

900

800

z

al 700 %

c

~ 600

: W

400

300

200

100

0

797.5 

303.4 —

187.4 /

1

102.8 106.3~

400

200

100

1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984

Years

NOTE: The figures in parenthesis are the percentages of the total budget.

● Dollar figures calculated, for Information only, at rate of 240 yen to the dollar (U.S.).

SOURCE: National Space Development Agency of Japan.
Ch. 4—Competition 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-being. Japan are to become major competitors in the internahas 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 stapetition. 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 commercial, questions of industrial organ ization—competition, monopoly, regulation—and of international trade assume a greater role in discussions

of space policy, At the same time, debates over

competition and protection are staples of public

policy in many other areas of the general economy; much of this wider debate is relevant to the

emerging space industries. Moreover, some policies in the space arena may be determined by

broad existing U.S. policies governing competition and international trade in the general

economy.

Space transportation and satellite communications are two technology sectors that provide examples of this shift of focus of the space policy

discussion onto questions of industrial organization and international trade. As private sector and

foreign space transportation firms challenge the

position of NASA as the U.S. Government space

transportation “firm,” the question of whether

or not the industry can be organized competitively—or should be—revolves around the questions of Shuttle pricing, government procurement,

and U.S. and foreign government subsidization.

In international satellite communications, which

has traditionally been organized noncompetitively, technological changes, the newly competitive

long-distance telephone industry in the United

States, and the Government’s drive for a broad

agreement on international trade in services are

among the elements forcing the focus of the

space policy debate to change.

International Commerical Competition

in Space-Related Markets

As the earlier part of this chapter has demonstrated, the space arena has been and continues

to be the scene of political competition among

space powers. It is also the scene of growing commercial competition in most space-related sectors. The competing enterprises may be private

firms or governmental organizations. They are

subject to greater or lesser coverage of general

international trading rules that govern commerce

among nations in today’s world.43 In certain in43App. 4A surveys the international trading rules applicable to

space commerce.

the course of the business cycle.*

*“Over the business cycle” is an average concept. There’s no expectation that prices will ever be such that normal profits

will be earned at any one time. When there is overcapacity, competitive firms may reduce prices below long run average cost

until the overcapacity is worked off, and when there is a shortage of capacity, prices may be above Ion&run average cost until

capacity increases.

Ch. 4—Competition ● 8 5

stances they are also governed by domestic and

international regulation.

The International Trading Regime in

Space-Related Equipment

The current structure of international trading

rules is primarily designed to regulate trade in

commodities rather than services. Although the

multilateral rules and understandings that have

been negotiated through GATT44 and OECD45 do

have a significant effect on international trade in

equipment in general, especially when the stakes

are relatively small, the many exceptions, exclusions, escape possibilities, etc., that have been

built into the rules can be used by sovereign governments to avoid effective trade discipline when

the stakes are large or when political considerations dominate.

Since France and Japan, and to a lesser extent

other industrial countries, have made the decision to join the United States as space powers,

it would be wishful thinking to believe that they

will fuIly abide by the trade ruIes i n competition

for sales of space-related equipment. In most

areas they would probably lose out to U.S. suppliers in open competition, as a result of the pricequality dominance of the latter.

From the point of view of U.S. space-related

equipment suppliers, perhaps the most damaging exclusion in the trade rules is the exclusion

of the major non-American buyers of satellite

communications equipment from the list of government organizations covered by the GATT

Government Procurement Code. These organizations are the European and Japanese PTTs

(post, telephone, and telegraph organizations)

that have communications monopolies (or near

monopolies) in their respective countries. The

code document, which has been signed by most

of the industrial countries, specifies which government agencies in each country are covered,

ddGeneral Agreement on Tariffs and Trade. The name refers both

to a treaty adhered to de jure and de facto by 117 countries and

to an organization, which has a permanent staff, the GATT Secretariat.

qsorganization for Economic Cooperation and Development.

Membership includes the United States, Canada, Japan, Australia,

New Zealand, and the governments of all Western European industrial market economies.

and the European countries and Japan have specifically excluded their PTTs from coverage. Because the PITs largely follow “buy-national” procurement policies, American aerospace and telecommunications equipment firms are systematically excluded from a significant share of the

international trade in satellites and ground-segment equipment.

Under considerable pressure from the United

States, Japan agreed in a 1981 bilateral agreement

to open up government procurement for the NIT

to American equipment suppliers.46 This agreement was also extended to the suppliers of all

other countries and in 1984 was extended to December 31, 1986. U.S. observers currently disagree about whether enough progress in opening up NTT procurement occurred to justify

renewing the agreement or not. No important

progress has taken place in opening up European

telecommunications equipment markets.

In third-country markets, the GATT Subsidies

Code, a second major multilateral trade agreement, in theory, limits all kinds of subsidized export competition. In practice, however, it has not

been used to cover the important types of subsidies in space-related equipment exports, such as

R&D subsidies and the subsidized operation of

government space organizations. Although these

types of subsidies affect export competition, they

also have justifications unrelated to international

trade that are within the sovereign powers of individual nations. Separating the effects of these

subsidies on trade from other effects has not yet

been attempted to any extent in the case of R&D

subsidies.

The OECD Arrangement on Officially Supported

Export Credit, a third major multilateral trade

agreement among the industrial countries, is designed to eliminate one particular type of export

subsidy—subsidized credit. It applies to sales by

both private and governmental organizations and

is effective to a degree in preventing competition

for third-country markets using subsidized export

finance. Perhaps the heart of the arrangement lies

in the elimination of credit subsidies that are relatively small. In instances where exporter govern4G’’NTT Pact Extended for Three Years, Abe Holds Trade Talks

With U.S. Official,” U.S. Expor? Week/y, jan. 31, 1984, pp. 580-581.
86 ● International Cooperation and Competition in Civilian Space Activities

ments do not choose to make large credit subsidies, the arrangement now keeps them and their

competitors from offering interest rates substantially below commercial interest rates and in this

way lessens “unfair” competition .47 A special

OECD arrangement exists for satellite ground stations; among other things, it limits the duration

of export credit for ground stations to 8 years.48

There are limits, in practice, to this discipline

in the use of export credit. Despite the arrangement, governments find ways to subsidize largeticket, high-technology sales to less developed

countries, both for political reasons and to promote exports. No existing multilateral agreement

disallows credit subsidies with a large grant element in sales to less developed countries; they

are simply given the label of “official development assistance” when the credit subsidy exceeds a 25 percent grant element.

Space-related transactions—e.g., the sale of a

satellite communications system—are often large

and politically significant to exporter countries.

Hence, large credit subsidies appear to be the

norm rather than the exception in sales of spacerelated equipment to less developed countries.

The other industrial countries have justified the

trade restrictions they have erected for space-related equipment and services and for subsidizing competition in third-world markets by arguing that they are simply countervailing against the

strong subsidy and industrial-policy support the

United States gives to its aerospace industry

through the defense budget.

International Trading Regimes in

Space-Related Services

General international trading rules do not as

yet exist for trade in services of any kind (with

the one important exception that export credit

for services is covered by the OECD arrangement). Thus, different international trading regimes exist for each different service industry. in

the four space-related service industries discussed

in this report-space transportation, remote sensazFor an extensive treatment of the subsidy issue see Gary Clyde

Hufbauer and Joanna Shelton Erb, Subsidies in /nternationa/ Trade

(Cambridge, MA: MIT Press, 1984). aBunpubliShed document, supplied by the U.S. Treasury.

ing, materials processing, and satellite communications—only the latter has a well-defined international trading and regulatory regime. Space

transportation and remote sensing have only begun to glimpse real commercial competition and

international trading regimes have not been developed for these industries. The materials processing industry (as well as its international trading

regime) does not yet exist.

The questions of industrial organization and international trading regime are discussed in the

following section in the context of each of the

service industries, but we note here that the international trading regime in international satellite communications has largely eliminated international competition in both the sale of services

and the ownership of facilities. International trading regimes in finance and other auxiliary services important for international trade in large,

risky, and long-lived space-related ventures, are

also highly anticompetitive in many countries because of restrictive national regulation and constitute an important non-tariff barrier to the sale

of U.S. space-related services and equipment in

these countries.49

Competitive Analysis of International

Space-Related Service and

Equipment Industries

Space Transportation Services

The space transportation services industry has

recently passed from infant industry status, where

to all intents and purposes there was only one

49By “anticompetitive” trading regimes, we mean that in the markets involved, firms (particularly foreign firms) are significantly restricted in entering the market, in offering products or services at

their discretion, in pricing these products and services, and in investing in facilities. The International Banking Act of 1978 established a U.S. Federal regulatory framework giving “national treatment” to foreign banks (i.e., nondiscriminatory treatment of foreign

banks vis-a-vis U.S. banks). U.S. banks and other financial institutions, however, are not accorded national treatment in many other

countries. In a recent survey for the Senate Committee on Banking, Housing, and Urban Affairs, the Controller of the Currency

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 countries surveyed (Canada, Finland, Norway, Portugal, Spain, and Sweden, but not Australia); Department of the

Treasury, “Report to Congress on Foreign Government Treatment

of U.S. Commercial Banking Organizations, 1984 Update, ” submitted july 5, 1984.
Ch. 4—Competition 8 7

producer carrying commerical payloads, to a

more complex competitive status. NASA is still

the dominant producer and still receives annual

congressional appropriations for space transportation, but there are now four additional actual

or potential major competitive carriers, Arianespace [Ariane], Transpace Carriers, Inc. [Delta],

General Dynamics IAtlas-Centau r], and Martin

Marietta Titan].

In addition to these major carriers or potential

carriers, several specialty carriers now offer or

may soon offer minor or specialized services,

such as low-earth-orbit and sub-orbital space

transportation. Identified in this report are Space

Services, Inc., Starstruck, Inc., Orbital Sciences

Corp., OTRAG (Germany), and Bristol Aerospace,

Ltd. (Canada), but other firms are likely to enter

this specialty market in the future.

Two classes of potential competitors are government launch agencies (in the U. S. S. R.,50 lndia, China,51 Brazil, and Japan), which so far have

not indicated a commercially important desire to

compete in the general international space transportation market, and the large U.S. aerospace

firms that do not currently maintain launch capability but are well entrenched in one or another

aspect of space (e.g., Hughes Aircraft Co. or British Aerospace).

Whether or not the fringe of the space transportation services industry develops or aerospace

firms enter the market will depend primarily on

future demand for space transportation and the

pricing of services by established subsidized providers like NASA and Arianespace.

By far the largest current demand for commercial space transportation comes from the communications industry. This demand for placing

communications satellites in orbit is relatively well

known for the next 5 years, but becomes highly

uncertain thereafter. 52 This uncertainty arises because satellite and fiber-optic cable technologies

will be active technological alternatives in volSOThe IJ. S.S. R. has offerecj its Proton launcher to INMARSAT in

what may be called international competitive behavior.

Slch ina has recently offered to sell Iau nch services to other nations. See “China Offering Launch Services to International Users,”

Aviation Week and Space Technology, Apr. 8, 1985, pp. 25-26.

‘

zSee chs. 5 and 6.

ume long-distance communications in the 1990s.

With the greater integration of space-related

commerce into the economy, economic events

far from space will strongly influence the market

for space transportation.

Other civilian demand for space transportation—for materials processing, remote sensing,

space station activities, space science and space

R&D–is even more uncertain. Complicating

everything will be military demand for both NASA

Shuttle bay capacity and, perhaps, for expendable launch vehicles (E LVS).53

Under continuing high demand, the space

transportation industry could mature rapidly in

the late 1980s and early 1990s. NASA, or private

sector descendants, would be providing Shuttle

services to space stations and to firms parking

free- flyers in space or sending communications

satellites on “upper stage” rockets to geostationary orbit. ELV operators, Arianespace and a number of U.S. firms, would probably be providing

an array of tailored services primarily to the communications industry. Firms providing specialty

services might be competing for a variety of lowmass communications and materials processing

payloads. The space transportation industry could

develop vigorously in the normal competitive

mode.

Under low demand, however, the industry

structure would be far different. There might be

an excess supply of Shuttle services. Arianespace

might be the only ELV operator, with most or all

U.S. aerospace firms either definitively discarding

plans to offer ELV services on current-generation

vehicles or simply continuing to hold back. Some

specialty firms might die out. NASA and Arianespace might continue to provide commercial

launches in protected home markets and engage

in subsidized export competition in international

markets.

Of several key decisions that will affect competition in space transportation, the first concerns

whether competition can be the preferred industrial organization in this industry, as it is in American industry in general, or whether there are special characteristics in the industry that make an

53 See ch. s for a more extensive discussion of space transportation.

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

organization based on regulation necessary. Recently, the theory that transportation industries,

absent special circumstances, operate more efficiently under competitive conditions has been

widely put into practice. In the face of this general practice, proponents of regulating space

transportation would have to argue that special

circumstances do indeed obtain .54 Their argument might emphasize the political and military

aspects of space, the large investments often necessary and the need for special institutions to accomplish national objectives.

The essence of competitive organization in any

industry is freedom of pricing and entry.55 in

space transportation, pricing freedom would apply to both private and government entities. In

the United States, space transportation is far from

being a perfectly competitive industry. Firms are

free to enter, but may face subsidized price competition from Government-owned systems (e.g.,

the Shuttle). But attempting to make it more competitive by establishing price controls, allowing

price fixing, or maintaining entry restrictions

would be contradictory. Workable competition

depends on firms having sufficient freedom of

both entry and pricing that customers will have

full freedom of choice. In this, as in many other

industries, regulating imperfect competition in order to improve it may prove to be counterproductive. 5G

54The Department of Transportation (DOT), with the demise of

the Civil Aeronautics Board at the end of 1984, now has full responsibility for both economic and safety regulation of the airline industry; it also has recently been given the lead responsibility for

regulating the space transportation industry. The recent history of

regulation of the airline industry may offer some guidance to what

form regulation of space transportation may take; in recent years,

economic regulation of entry, price, and capacity for both passenger and cargo has largely been removed for domestic but not for

international air transportation.

Sslt also needs to be specified that in space transportation or any

other market where the buyers may be government entities, “free

entry” has to mean more than just the freedom for sellers to offer

price-service combinations at their discretion. There must also be

buyers willing to purchase the best price-service offering, rather

than be constrained to purchase only from certain sellers because

of political directions.

s~Mixed pub]ic/private industries are a’ particular Case in pOint.

Aside from advantages in government procurement, public firms

are likely to have an advantage in their cost of capital and in their

de facto insurance against bankruptcy due to losses. Conversely,

they are likely to suffer from the disadvantage of being used as an

employment utility and, generally, from political interference. Thus,

there is usually no shortage of imperfections in competition involving such firms. Nevertheless, the use of regulation to cure such conA second important decision affecting competition in space transportation concerns the amount

of subsidy that will be provided to NASA in the

future to provide commercial space transportation services. If it is not Congress’ intention to subsidize these services, NASA would have to earn

a market return on its investment in facilities to

provide them. Measurement of NASA’s rate of

return on investment in these facilities is not a

trivial exercise, and key accounting determinations would need to be made (beyond those now

provided by NASA) as to what facilities should

be counted and how much of their services

should be ascribed to civilian launches.

Large new investments (e.g., the purchase of

additional orbiters) in a program to carry commercial cargoes would make the subsidy question salient. Under these circumstances, Shuttle

prices that did not take account of capital costs

related directly to commercial cargoes and did

not reasonably allocate costs of all kinds between

commercial and government business, would

constitute the subsidization of one competitor

(NASA) in a mixed public-private international industry.57

A third important decision affecting competition will be what stance the United States should

take toward international competition. It should

be clear that, in addition to developing other

space-related industries, France, Japan, and other

countries are convinced that they must have a

space transportation capability. This commitment

has been based on various theories about leadingsector industries, but it is undoubtedly also

grounded in straightforward considerations of national pride.

Given their commitment to developing launch

capability, it appears inevitable that they will also

practice restrictive procurement when their

space-related industries might not otherwise develop the minimum level of sales to justify operations. Open access of U.S. producers to these

ditions may often be a cure worse than the disease, if imperfect

competition is replaced by a government-managed cartel.

sTSimilar questions concern Arianespace, but since an ifnportant

current subsidy of international launches comes from discriminatory

pricing in favor of non-European cargoes, a more conventional international trade approach against “dumping” is possible if services should come to be covered by U.S. antidumping statutes.
Ch. 4—Competition 89

markets and full coverage of their space industries by liberal international trade principles do

not, therefore, appear to be possible in the near

future. Rather than attempting to prevent trade

restrictions in the international market for launch

services, the United States could try to minimize

their impact and scope.

Continued efforts to get a multilateral code on

trade in services, 58 to make general progress on

government procurement and subsidies, to achieve

an agreement on mixed credits in trade with developing countries, and to make sure that space

industries are not systematically removed from

coverage would probably help to achieve this objective. In addition to multilateral trading rules,

bilateral negotiations and reciprocity legislation

have also been advocated as mechanisms for securing access of U.S. firms to foreign markets.

How open the U.S. market should be to space

transportation firms from countries that exclude

U.S. firms and how to counteract subsidized

competition in the U.S. market and in thirdcountry markets are related questions. The use

of U.S. trade law and administrative procedures

to impose countervailing penalties has been the

traditional U.S. method of ensuring that competition is fair in the U.S. market. Transpace Carriers,

the U.S. space transportation company offering

the Delta launcher, has attempted to use them

and has asked the Administration to penalize

Arianespace and the European governments subsidizing it, if negotiations fail to ameliorate any

unfair competitive practices in space transpoftation. 59

Satellite Communications Services

The satellite communications industry is the

most mature of all the space-related industries

and has been big business since the late 1960s.

If we define the international satellite communications industry to be the firms that sell international communications services using communications satellites, the major U.S. industry

participants are AT&T, Western Union, RCA, IBM

(through SBS), ITT, GTE, MCI, McDonnell Douglas, United Brands,~ and COMSAT. These are the

large, basic U.S. long-distance telecommunications firms.61

After a decade of deregulatory action in longdistance domestic communications, culminating

with the AT&T divestiture, these firms are now

vigorously competing in the various domestic

communications/basic communications submarkets. In addition, other U.S. firms specialize in

various types of enhanced communications and

distribute them over circuits leased from the basic

communications carriers. A number of such firms

are those whose business has primarily been in

the information industry but which, because of

the merging of the data processing and telecommunications industries, are now offering satellite

communications services of various sorts in competition with traditional communications firms.

Private corporate networks are also a significant

element in the domestic market, since they provide excess communications capacity from their

private communications networks for resale.

Hence the U.S. domestic market is now vigorously competitive.G2

Saln the case of services (space transportation included), the only

multilateral agreement of any substance that currently applies is

the OECD Arrangement on Officially Supported Export Credit, but

the United States is leading a campaign to start multilateral negotiations for a GATT code on services.

Sgln its June I g84 petition, filed with the U.S. Trade Representative’s Office, Transpace Carriers, Inc., charged European Space

Agency member states (particularly France) with subsidizing Arianespace in its provision of expendable launch services. The Transpace

complaint objected to Arianespace’s two-tiered pricing structure

(lower for non-European buyers); the subsidized provision of launch

and range facilities, service;, and personnel; the subsidized provision of Centre National d’ Etudes Spatiale personnel; and the subsidization of mission insurance rates for Arianespace customers.

The complaint asks the President to negotiate for an end to such

practices, in the meantime to bar Arianespace from marketing its

services in the United States, and to impose economic penalties

against ESA-country imports under Sec. 301 of the Trade Act of 1974.

(U.S. Export Week/y, june 12, 1984.)

6’JThe involvement of these firms in international telecommunications is not well known. McDonnell Douglas participates through

its FTC Communications, Inc., Tymshare, Inc., and Tymnet, Inc.

subsidiaries. United Brands participates through its TRT Telecommunications Corp. subsidiary, and its ownership interest in international Satellite, Inc.

61 For a more complete list of firms that sell or intend to sell basic

international communications services, see ch. 6.

621 n recent years both the information and communications industries have seen substantial technological changes that make it

impossible to draw a clear boundary between them. Digital and

other communications transmissions in communications networks

can be made more efficient with computer processing (e. g., packet

switching), and computer networks also require special communications facilities and software to optimize their use. Particular

users, such as banks, may benefit when their computer and communications hardware and software are designed as an integrated

system. The manufacture of specialty components for such communications/com putation systems is now a major economic activ-
90 ● International Cooperation and Competition in Civilian Space Activities

Overseas, most countries have governmental

communications monopolies, for instance the

post, telephone, and telegraph organizations

(PTTs) of Germany and France, and these are

often very large firms. As regulated monopolies,

they typically handle all the telecommunications

of their countries—satellite and terrestrial, domestic and international. Although this is the dominant pattern, there is some institutional variation.

In Britain, the government monopoly, British

Telecom, has recently given way to an industry

with two major firms, and both have now been

privatized. In Japan and Canada, the international

satellite communications firms are regulated private rather than public monopolies.

In all industrialized countries, regulatory authorities have been and will increasingly be facing the need to decide: 1 ) where the regulated

domestic “network” (carrier-owned equipment)

ends and what customer-owned equipment can

be connected to it; and 2) where the precise dividing line between regulated communications

and unregulated data processing is. The need to

make and revise these determinations has already

brought large regulatory changes in U.S. domestic

communications and will almost certainly do so

in other countries. At a minimum, competition

will develop in the equipment and enhanced

services industries at the fringes of the governmental telecommunications monopoly. The new

fringe competitors, along with firms from other

countries, will, in turn, seek entry into international communications and create pressure for

regulatory changes there as well. The countries

that are experimenting with or about to experiment with competition in long-distance domestic communications will also be adding potential competitors and stimuli to change to the

international communications industry.

This is a process that is only beginning. Competition among carriers in international communications is still highly constrained by regu Iation.

The carrier selected by a consumer to initiate a

communication is almost never able to deliver

it internationally over its own facilities or more

generally to optimize an international network

for the use of its customers. Instead, because of

U. S., foreign, and international organization regulatory restrictions, it must hand off the communications to other entities at some point in its

journey with the result that linkage through a

whole chain of entities is typical of international

communications transmissions,

Little competition takes place between the entities in this chain. In all major countries, entry,

prices, service offerings, and facilities in the international satellite communications industry are

highly controlled. International competition between service sellers from different countries does

not yet exist to any extent. Even connection rights

to other countries’ networks currently are severely limited for all but a handful of traditional U.S.

carriers.

Despite the complexity of international interconnection, a number of large multinational

firms, such as Citicorp (connecting 1,400 offices

in 93 countries), Merrill Lynch, Texas Instruments,

GeneraI Electric, Shell Oil, etc., have developed

their own private international communications

networks.63 At the present time, these networks

are the closest that international communications

come to being handled by a single entity. Facilities outside their premises are typically not owned

by the communicating firm, but the network is

functionally controlled by it from initiation to

completion of communication. These corporate

networks are beginning to constitute a challenge

to the international regulatory regime as it is now

constituted, because excess capacity on these

networks (including that on U.S. domestic satellites) is potentially resalable to those who now

use international common carrier facilities. If

large-scale competition among resellers were permitted internationally as it is within the United

States, the competitive situation in international

communications services would be very different.

Hence, the issue of resale of capacity reaches to

ity. The communications service and equipment firms are entering various information lines, and computer firms are entering

various communications service and equipment lines. The recent

AT&T divestiture decision was predicated, among other things, on

the idea that it is no longer possible to draw a definitive line between the two industries.

G3U.S. Department of cornrnerce, U.S. /ndustria/ ~ut)ook 1984,

pp. 46-48; “Multilevel Network Connects Worldwide Workstations,” Telecommunications, North American Edition, August 1984,

pp. 41-45.
Ch. 4—Competition ● 9 1

the heart of the current international regulatory

regime.

To date, INTELSAT, an international satellite

consortium owned by the PITs (or other telecommunications organizations designated by its 109

member governments), provides most of the

transponders used in intercontinental civilian

communications. b4 However, competitive pressures may change this situation in the next few

years.

Technological developments and market

growth have created competitive pressures that

are likely to reduce the dominance of INTELSAT

in coming years. First, a number of regional international systems have come into existence in recent years. Second, since the AT&T divestiture

and the privatization of the British telecommunications industry, a number of private U.S. and

British firms are poised to construct satellite or

fiber-optic undersea cable facilities in competition with INTELSAT and the traditional cable consortia, which have been dominated by AT&T and

the European PTTs.

Under stringent limitations to safeguard

INTELSAT’S revenue base, the Reagan Administration at the end of 1984 urged the Federal Communications Commission to process favorably the

applications of five U.S. corporations wishing to

launch satellites for transatlantic communications. b5 The FCC, for its part, in early 1985 recommended that the State Department approve

the application of a British carrier’s U.S. partner

.——— GqcoMsAT, a Private firm, which functions as an intermediary

in virtually all U.S. intercontinental civilian satellite communications, is the U.S. representative.

6Jlntersputnik, an international satellite organization with mostly

East bloc countries as members, INMARSAT, an international satellite organization of which the United States is a member handling

marine communications, and the “domestic” satellites of countries that send communications to territories on other continents

(e.g., France’s Telecom I or U.S. COMSAT satellites transmitting

to Pacific territories), are the other elements in intercontinental comm un ications at the present time. See ch. 6 for further information.

GJother systems from the United States and other countries would

seem to be in the wings, as well, if the applications of the first five

are affirmatively acted on. For instance, France’s Telecom 1, designed for satellite communications with its overseas territories in

the Americas, has a reception “footprint” that covers large parts

of the United States and could be used for transatlantic communications to the United States.

to land a high capacity U. S.-U. K. undersea fiberoptic cable.66

If some or all of the alternative satellite and

cable systems come into being, as now seems

likely, both the operations of INTELSAT and the

international communications regime will be altered significantly. At present, it is not clear how

the foreign satellite link will be arranged. The

alternative satellite proposals are not definitive

on the terms of interconnection with the very

same foreign telecommunications entities that are

the part owners of INTELSAT with whose facilities theirs would be competing.

As it attempts to allow greater competition generally in international telecommunications, the

FCC should analyze whether the incentives U.S.

and foreign carriers will operate under will result in overcapacity in U.S. international telecommunications. One element in this determination

involves the amount of capacity to be provided

by the potential new satellite firms. Another involves the planned capacity of INTELSAT’S VI and

Vll series satellites. A third involves the capacity

to be provided by the proposed transatlantic

fiber-optic cables and the similar cables that have

been proposed for transpacific communications.

If open facilities competition should lead to overcapacity in international communications that resulted in higher rather than lower rates through

service regulation, continued facilities regulation

to avoid the overcapacity might be justified even

in a partially deregulated market. (See ch. 6 for

a discussion of competition between satellites and

fiber-optic cables.)

The FCC has regulatory authority over both the

construction and use of U.S. international telecommunications facilities. The prevailing pattern

of FCC facilities approvals in international (but

not in domestic) communications has been to approve the investment of U.S. carriers in international facilities owned by consortiums of carriers—COMSAT in INTELSAT for satellites and

AT&T and the other international service carriers

in cable consortiums with European PTTs. The

66 FCC News, “Preliminary Action on Tel-Optic and SLC (Submarine Lightwave Cable Co. ) Cable Landing Applications, Report No.

30992, Mar. 4, 1985.
92 ● International Cooperation and Competition in Civilian Space Activities

current exceptions to this involve North American regional use of U.S. domestic satellites owned

by single carriers in communications with certain

Western Hemisphere destinations. The Commission has also in the past regulated the relative use

of existing satellite and cable facilities for transatlantic service and is investigating what its policy toward facilities competition should be in the

North Atlantic during the 1986-91 period.

The market for international satellite communications services is part of the total market for

international telecommunications, which has

been growing rapidly since 1970 and will probably continue to do so. The fraction of this growing total that will be carried by satellite (and consequently the demand for satellites for this

purpose) is difficult to predict. Among other factors, it will depend on the relative cost of satellite and fiber-optic cable capacity, which remains

uncertain because technological developments

are extremely difficult to predict. The decisive factor, however, is likely to be the facilities regulation policies of the FCC and other governments.

In formulating U.S. policy regarding competition in international communications, policymakers should realize how much the market would

have to be liberalized before it could be regarded

as competitive, A not very likely competitive scenario can be specified as a standard for comparison to make this point. In a fully competitive industry, hundreds or thousands of communications firms from many countries would offer various kinds of international voice, data, and TV

services to individual consumers and businesses

around the globe. Unrestricted leased circuits and

lines would be freely available from a variety of

large and small satellite and cable owners. In

most places local telephone service would still

be provided by regulated common-carrier monopolies, but access by long-distance communications firms would be on a nondiscriminatory basis, regardless of their nationality and the

destination of the communication. Regulatory

problems would be transmuted into problems of

trade-in-services, with governments negotiating

about subsidies, nontariff barriers, and discrimination in government’s procurement of communications services, rather than regulating the prices,

entry, and investment of carriers.

This portrait of a fully competitive telecommunications industry is probably unrealizable in the

next decade, because the current structures of

international telecommunications regulation are

firmly entrenched in many countries, and the

United States cannot unilaterally alter them even

if it would Iike to. The policy questions that arise,

therefore, will most usefully be cast in terms not

of the general wisdom of competition vs. regulation, but rather whether the particular partial

moves toward deregulation under consideration

will produce economically and/or politically effective outcomes within the time-frame envisaged. This stance is particularly useful since many

of the proposed future actions in U.S. international communications are likely to be reactions

to developments in technology or in domestic

telecommunications markets, and the issue will

be how most effectively to secure their benefits

in international communications in the context

of continuing restrictions.

Remote Sensing Services

Remote sensing from space provides data relating to the Earth’s atmosphere, land masses, and

oceans. In all three cases, these data have “public-good” characteristics.67 Different governmental responses to their public good aspects, depending on whether they originate from meteorological, land, or oceans remote sensing systems,

have resulted in different industry structures and

different competitive patterns from those characterizing the other space applications technology sectors.

b7’’Public good” is used here in the technical sense used in formal economic theory to refer to those goods or services like national defense, city parks, and public health services, where the

cost of servicing an additional consumer (marginal cost) is negligible and where it is often impossible or undesirable to charge consumers for the service they consume. The general principle that

economic efficiency is served when consumers pay just the extra

cost of servicing them is only approximately honored in most industries, but in the case of industries producing public goods, it

is either impossible, infeasible, or undesirable even to approximate

it. Hence, alternative arrangements are common in the provision

of “public goods, ” often involving government subsidy and production. Although consumers who do not pay for the data may

be excludable from consumption (e.g., by coded signals), the transactions costs of excluding them may be large compared with marginal cost of servicing them. See app. 4A, for a fuller treatment of

public goods.
Ch. 4—Competition 93

In the United States and other countries, the

public benefits of having a meteorological remote

sensing capability have been considered large

enough to justify subsidized Government production. Accordingly, industry participants in the

United States and elsewhere have been governmental organizations producing meteorological

data and distributing them free or at the cost of

reproduction. 68 Currently, both the geostationary

and the polar-orbiting meteorological satellite systems are operated by the National Oceanic and

Atmospheric Administration. NOAA provides free

direct data transmission to Earth receivers around

the globe and a variety of data products which

can be purchased for the cost of reproduction.

Commercial operation of the meteorological

remote sensing system might be both possible

and profitable for private firms, but because of

the public good aspects of the industry, the level

of operation and the pattern of distribution of

benefits that would result would not be economically efficient. Congress, in fact, acted in 1983 to

prevent transfer of the U.S.-owned meteorological satellites to the private sector (Public Law 98-

166) for this and other reasons.

Land remote sensing shares some of the public good characteristics of meteorological remote

sensing69 but there are two important differences

in how the government and the public at large

regard it. First, the public interest in assuring that

the land remote sensing industry operates efficiently (in the sense that additional users pay only

the extra cost of servicing them) is not as great

as in weather remote sensing where universal access to the data is an important public goal. Second, fewer citizens benefit directly from land remote sensing data than from meteorological data.

——beAlthough it would be possible to charge for weather-related satellite data, the costs of doing so are disproportionately large. First

of all, the cost to NOAA of supplying data transmission to one more

receiving station is zero. Society would also suffer an extra cost

if data leading to weather forecasts were subject to user charges.

If the general public were not informed about weather dangers,

society as a whole would suffer avoidable costs from weather

disasters.

bgocean remote sensing also shares pubi(c good characteristics

but will not be discussed here. The United States is planning an

ocean remote sensing system to be operated by the Navy; the Navy

Remote Ocean Satellite System (N ROSS) is scheduled for deployment in 1987. NOAA is planning to distribute data from NROSS

to civilian users.

Moreover, the few users there are can sometimes

use alternative aerial-photogram metric and groundobservation data sources. Hence, U.S. policymakers have chosen to attempt to transfer the

Government’s Landsat system to the private sector (Public Law 98-365).

The difficulties in implementing this policy stem

primarily from the fact that the market for land

remote-sensed data is not currently large enough

to sustain a single, unsubsidized, self-sustaining

private enterprise, let alone a competitive industry. Only small amounts of land remote-sensed

data have actually been sold to private sector

buyers in either raw or analyzed form. At present most of the consumers of land remote-sensed

data are governmental agencies.

Private sector users are either firms that process the data for their own use, principally petroleum or other minerals firms, or “value-added

firms,” such as Earthsat Corp. and ERIM, Inc.,

which purchase raw data from the U.S. Government, analyze them and convert them to information suitable for clients. These companies are

essentially in the information business. Such

firms, for example, offer enhanced data for sale

to agribusiness, forestry, and mineral-exploration

companies.

Much of the potential demand for satellite remote sensing that has been identified is price sensitive and will not materialize at high prices. ’o

Data consumers will continue to use photogrammetric data when they are inexpensive enough,

or do without.

Despite the current meager prospects for commercialization, international competition has nevertheless emerged. SPOT IMAGE, S. A., a French

Government-owned remote sensing company,

will soon begin offering remotely sensed data to

customers in the United States and elsewhere in

the world.

Because of the characteristics of the two systems, data from SPOT and from the Landsat system are not perfect substitutes. The SPOT system,

zOThe Steep decline in sales of multispectral data after the Price

increased in October 1982 is evidence of such price sensitivity. The

availability of aerial photogrammetry and ground observation are

one reason for this price sensitivity. See Remote Sensing and the

Private Sector: Issues for Discussion, op. cit., ch. 5.
94 ● International Cooperation and Competition in Civilian Space Activities

for instance, provides relatively high resolution

data (20 meters) in three color bands (or 10 meter resolution in black and white). It also provides

quasi-stereo, an important feature for mineral exploration and mapmaking. The U.S. Landsat system has two instruments providing data: relatively

low resolution data (80 meters) in four wavelength bands; and higher resolution data (30

meters) in six wavelength bands. Given these factors, and the current uncertain state of private

sector entry into land remote sensing in the

United States, exactly how the competition will

develop is a matter of conjecture. SPOT IMAGE,

nevertheless, has already embarked on an aggressive data marketing effort in the United States.

The present inadequate size of the market leads

to the question of how much subsidy, if any, is

desirable for this infant industry and how long

it should be maintained. Both the United States

and France will have to answer this question on

a continuing basis; both currently are providing

significant subsidies to establish the firms. The inadequate size of the market and other considerations also lead to the question of how much regulation should be imposed on the U.S. private

satellite operator or operators.71 (See ch. 7 for a

fuller discussion of these issues.)

Materials Processing Services

Whether or not an industry processing materials in space will come to exist for any substantial volume or value of materials processed is still

highly uncertain. The industry analyzed in this

section, therefore, should be thought of as a potential industry rather than an actual one.

The set of firms likely to be processing materials

in space is potentially a diverse one. Two main

groups of firms will probably be, first, large

pharmaceutical, metallurgical, electronics, or

ceramics firms processing materials for themselves; and, secondly, specialized firms selling

materials processing services, such as unmanned

orbital processing units (“free-flyers”), special

metallurgical furnace services, or microgravity

processing facilities. The large cost of establishing a credible space processing facility will limit

TIThe Department of Commerce currently has regulatory responsibility.

entry to existing firms or entrepreneurial groups

that can marshall substantial resources. Joint ventures, like the one already in existence between

McDonnell Douglas, Ortho Pharmaceutical, and

NASA might be common as the industry gets

underway. Although the cost of entry may be

high, there appear to be a large number of firms

in materials-using industries and aerospace firms

able to deploy sufficient resources, particularly

if NASA offers subsidized shuttle services to them.

It is uncertain whether the relatively high expense of processing materials in space will substantially deter their marketability. Even if a material were produced in space, and marketed in

sufficient volume, there would always remain the

possibility that the space-based operation could

be undercut by terrestrial production of an adequate and less costly substitute.

The industry, it should nevertheless be emphasized, is poised for rapid development if the risks

are reduced and if a high value material is found

that can be produced most efficiently in space.

For example, if the McDonnell Douglas electrophoresis process should efficiently produce highpurity interferon in space and if interferon should

prove to be the wonder drug of the decade, a

number of pharmaceutical firms and aerospace

firms catering to the pharmaceutical industry

would be able to enter rather quickly. Such a development would also produce increased demand for space transportation and materials processing capacity.

Among U.S. pharmaceutical, metallurgical, and

other manufacturing firms which might manufacture materials in space for their own use, competition is now the organizing principle in most

cases and would undoubtedly continue to be, as

long as firms were allowed nondiscriminatory access to space processing facilities. Competition

will probably also be the organizing principle of

the processing services industry. However, if as

seems likely, the market for processing is both

small and broken up into specialized segments,

society will have to rely on potential rather than

actual new entrants to contest the several little

monopoly markets and keep prices down.

There would probably be few barriers to international competition in the materials processing
Ch. 4—Competition ● 9 5

industry. Materials processed by a French firm,

for example, and brought down from space in

France could be imported into the United States,

subject, presumably, to whatever tariffs were applicable. The principal, and probably the only important, barrier to free international competition

in materials processing, will be the question of

foreign access to the NASA Shuttle, as it is currently the most practical way to retrieve processed materials from orbit.

The Transition From Political to

Economic Competition

In this chapter we have looked at the various

political and economic aspects of international

competition in civilian space activities. With the

increasing commercialization of space, a number of space-related activities are caught between

the political competition of “national space programs” and the economic competition of international commerce.

Prior to the development of vigorous commercial civilian space activities, the arguments in favor of continued support of space activities are

usually scientific and political, although they

usually also include subsidiary industrial-policy

reasoning. Congress supports the national space

program both for national pride and also for technological development that may lead to later economic growth and exports.

As commercial activities develop, however, the

arguments used to justify government space activities begin to be measured against general concepts of international trade. Previously unfettered

national space policy—in its competitive aspects–becomes challenged as to its fairness and

consistency with general international trading

ruIes. Appropriations for the national space program in areas of commercial activity are now

characterized by some as subsidies against which

countervailing duties can in principle be assessed

or against which other retaliatory measures can

be taken. The government space agency now becomes a government entity covered or potentially

covered by the GATT government-procurement

agreement. Assistance to developing countries in

satellite communications or launch services, previously seen as an essential part of bringing the

benefits of space technology to all mankind, now

becomes the subject of international negotiations

on export credit subsidies. And trade negotiators

have to deal with whether or not space-related

services should be included among those to be

covered by potential future agreements on international trade in services.

This process is actually the natural outgrowth

of successful commercialization and the beginnings of healthy international trade, rather than

a threat to them. I n space-related equipment the

process has been clearly underway for some time.

Trade restrictions and subsidies in space-related

equipment manufacturing industries are increasingly seen as part of industrial policy in these industries and referred to as “targeting.” As in other

industrial contexts, government-supported R&D

in early phases of an industry are difficult to deal

with under the international trading rules, but insofar as the targeting takes the form of large current subsidies or trade restrictions, it becomes the

subject of trade negotiations, like those, for instance, that have taken place with Japan on spacesegment satellite communications equipment.

In space-related services, the process is less

clear, mainly because general international trading rules on services have not yet been agreed

on even within the industrialized countries, and

each trade sector currently has its own rules. international satellite communications services, for

instance, are subject to the unique regulatory regime that governs international telecommunications services generally.

What this implies for an understanding of competition in international civilian space activities

is that as each space sector matures commercially, it becomes subject not only to the international

politics of space but also to the broader and more

complex politics of international trade and regulation. A national political commitment to

space—and to competition for leadership in space

activities—may come into conflict with another

national commitment to fair competition within

an open world trading system.
—

96 . International Cooperation and Competition in Civilian Space Activities

APPENDIX 4A.–THE MAIN INTERNATIONAL TRADING RULES

OF RELEVANCE TO INTERNATIONAL COMPETITION IN

CIVILIAN SPACE ACTIVITIES

The general international trading rules have been

the subject of extensive negotiation in recent years.

Trade specialists generally agree that the rules are having a significant effect on the sales of equipment, but

that this effect is somewhat hard to quantify. With respect to services, general international trading rules

do not yet exist to any extent, although informal negotiations are currently underway to explore the possibility of a services code.

Three major trading rules affect “unfair” competitive practices in international trade in equipment, in

addition to the general GATT principles of equal access and equal treatment:

1. the OECD Arrangement on officially supported

export credits,

2. the GATT code on subsidies, and

3. the GATT code on government procurement.

These three codes fill gaps in the GATT treaty but do

not have universal coverage. They are largely restricted to the industrial countries, but a few developing countries are signatories.

in their present form they are quite new. Although

the OECD Arrangement has existed since the early

1970s, the minimum interest rate levels allowed for

official export finance had until recently been so much

lower than commercial interest rates that a large subsidy element remained. However, starting in 1982, the

minimum rates have been close to commercial rates.

When they are adhered to, these minimum rates now

serve effectively to discipline export finance subsidies

in equipment sales. The new GAIT codes on subsidies

and government procurement are also quite recent;

they entered into effect only in 1980 and 1981, respectively, and experience with them is still limited.

in addition, because of incomplete country coverage, specific exclusions, ease of escape, differences

in interpretation, and ineffective enforcement, the

trading rules are observed, when they are observed,

through a combination of deterrence and negotiation.

Essentially they set a standard that can be followed

voluntarily or against which deviations can be

measured.

The deterrence effect probably constitutes the major effect of the rules. Governments comply voluntarily

with the rules because they want to avoid being confronted by other governments asserting that they have

violated agreed trade rules and threatening retaliation.

The trade rules also set the standard for negotiation,

which is the predominant way that they are “enforced.” Although the term is used, enforcement is

clearly the wrong concept. The conciliation and negotiation activity referred to as “enforcement” does

not even approximately resemble an adjudicatory proceeding. It is primarily carried out on a bilateral basis

but also takes place, on occasion, in the GATT multilateral framework, Bilateral negotiation (or negotiation

among small groups of countries) may concern questions of compliance with the general trade rules, but

often these negotiations will be sector-specific, e.g.,

for aircraft or satellite ground stations. Frequently, the

participants in such negotiations hammer out sectorspecific arrangements that may conflict significantly

with the principles embodied in the general rules.

GATT dispute settlement panels complement bilateral negotiations in “enforcing” the trade rules in several ways. First, a GATT panel may award the right

to take retaliatory action as “compensation” for a

trade rule violation after conciliation has failed. Legitimizing retaliatory action in this way reduces the

possibility that a generalized trade feud will result from

retaliation against retaliation. Secondly, the possibility that a retaliatory action taken on the basis of a

country’s domestic law might subsequently be found

by a GAIT panel to be itself a trade rule violation tends

to lessen the incompatibility of these actions with the

rules. The major limitation on the usefulness of the

GATT panels is that panels in the past have typically

decided cases on the narrowest of grounds.

The actual workings of the trade codes have not always been transparent. Only narrow specialists, in

government agencies and in specialized private law

firms, are fully aware of all the relevant provisions of

the various agreements and statutes bearing on a particular problem area and how they work together. In

a given case, these complexities may result in a determination quite different from what a nonspecialist

might expect from a straightforward reading of the

documents.

One topical example of the complexity of trade

codes and laws is the question of how to classify a

launched satellite under U.S. trade law. Suppose a

French company offered to sell a satellite with subsidized financing to an American buyer delivered CIF

space. Would imposition of a countervailing duty

under section 301 of the Trade Law of 1974 be available as retaliation against such an unfair trade practice as it would be in the cases of other subsidized

sales of equipment imported into the U.S. market?
Ch. 4—competition 97

Under U.S. trade laws, the satellite would be classified

as an export from France but it could not be classified

as an import into the United States, since it had not

physically entered through customs. Because it was

not an import, countervailing duties or charges therefore could not be levied under section 301. However,

under section 1912 of the Export-Import Bank statute,

the Secretary of the Treasury may direct the Em-lm

Bank to subsidize the sale of an American product in

the U.S. market in retaliation, if that product is competing with a subsidized foreign product. This action

is available even when the equipment has not passed

through customs.

It appears to be the consensus of the trade experts

that the trading rules should be seen as “working”

in the general international trade in equipment, primarily by their deterrence effect but also through negotiation. This is particularly true when the stakes are

relatively small. When the stakes are large, however,

the many exceptions, exclusions, and escape possibilities that have been built into the rules, can be used

by sovereign governments to avoid effective trade discipline. Roughly speaking, where international trade

per annum in a sector on the order of $1 billion or

more is involved, the trade rules are likely to be seriously breached by governments.

Exclusions and Exceptions Keep

Space-Related Equipment From Being

Effectively Covered by the

International Trading Rules

None of the three major codes referred to above

effectively constrain “unfair” competition in spacerelated equipment because of exclusions and exceptions. Perhaps the most damaging exclusion involving space-related equipment is the exclusion of the

major non-American buyers of satellite packages (satellites transported into space and insured) from the

list of government organizations covered by the GATT

government procurement code. These organizations

are the PTTs (post, telephone, and telegraph organizations) that have communications monopolies in

their respective countries.1 The code document specifies which government agencies in each country are

covered, and the European countries and Japan specifically excluded their PTTs. (Because of this refusal

to include the PTTs, the United States, in retaliation,

excluded the Corps of Engineers from its list. NASA,

however, is included.) Because the PTTs do largely

1 See ch. 6 for discussion of recent events concerning transfer of some PTT

ownership to the private sector and the introduction of limited competition

In telecommunlcat)ons in the United K~ngdom and japan.

follow “buy-national” procurement policies, American firms are systematically excluded from a share of

the international trade in satellites and communications equipment.

In practice, the subsidies code does not effectively

cover the types of subsidies that are important in

international sales of space-related equipment. Although the code contains broad language prohibiting

unfair subsidies that affect international trade, it illustrates what a subsidy is only by a short list of examples,

all of which relate directly to international trade except for a general “any other subsidy” category. Not

by accident, none of the examples relates to research

and development expenditures or generally to the

subtle types of assistance included under the rubric

of “industrial policy. ”

Whether or not the subsidies code will be of any

use in disciplining international trade in space-related

equipment is problematic, because R&D and industrial-policy subsidies frequently occur in the space sector, and they will be the hardest to bring effectively

under the subsidies code. To be sure, the category including “any other subsidy, ” defined as “any subsidy

. . . which operates directly or indirectly to increase

exports of any product from, or to reduce imports of

any product into, [the] territory” of a contracting party,

is a very broad one which could easily be interpreted

to cover R&D and industrial policy in general. It has

not been effectively tested, however. The general impression among trade specialists is that it will be difficult to apply the subsidies code to those subsidies,

whose focus is primariIy domestic, even if their impact on international trade is substantial.

The United States has plainly been the country that

has most heavily used R&D and other industrial-policy

subsidies in the aerospace industry. This has not escaped the attention of other industrial countries and

has been a point of contention in recent trade negotiations. It should also be noted that the process of

countervailing against industrial policy measures is not

a trivial technical problem; such things as “reasonable

price,” subsidy margin, and injury would be difficult

to determine in a satisfactory way in order that an

appropriate countervailing duty or other measured

retaliation could be imposed.

The OECD Arrangement on export credits applies

universally to the official export finance of 22 OECD

signatories (excluding Turkey and Iceland), whether

or not the exports are undertaken by a government

entity or a private firm. Nevertheless, it has a big exception 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,

as long as they are called “official development assistance” (ODA) rather than “officially supported export
98 ● International Cooperation and Competition in Civilian Space Activities

credits. ” There has to be a “grant element” of greater

than 25 percent in order to escape into the ODA category and be free of the strictures of the export credit

agreement. 2

A separate OECD Arrangement on Mixed Credits

has recently been discussed within a working group

of the Development Assistance Committee of the

OECD (as opposed to the Export Credit Committee),

and it would supposedly further discipline the use of

mixed credits (i.e., development assistance mixed with

export credits). Disentangling true development assistance from commercially motivated sales would be desirable and is probably manageable in practice. How

much success any ODA arrangement would have,

though, is in doubt in the light of the demonstrated

desires of some of the negotiating governments to subsidize exports to developing countries by granting aid.

Subsidized credit to developing countries will therefore probably continue to be substantially undisciplined in high-cost items such as the sales of satellite

packages and other space-related equipment. On the

other hand, smaller sales of instruments and other

equipment may well generally take place in conformance with the OECD guidelines and not be the occasion for heavy-handed official competitive jockeying.

To summarize this section on exclusions and exceptions, each of the three major trading rules has an important exclusion or exception that removes a large

part of international trade in space-related equipment

from its coverage.

International Trading Rules for Services

In the area of services, there have been indications,

starting at the GATT ministerial talks in 1973 and extending to Economic Summit meetings since that time,

that the major industrial countries might be willing to

consider a code on services.

There are a number of barriers to an agreement on

international trade in services, however. Europeans

do not regard services as trade in the classic sense,

are worried about cultural imperialism from the

United States, and have service industries that are

heavily regulated and not very entrepreneurial. In the

area of telecommunications services, for instance, a

complicating factor is the fact that revenues from the

PITs often subsidize unrelated activities, including bus

service. In this context it is unlikely that much will be

‘Grant element IS defined as one minus the ratio of the present value of

the stream of payments that are proposed divided by the present value O(

the stream that would occur if the Arrangement terms governed, both discounted at the appropriate Arrangement rate. Deals, with financing still labeled as officially supported export credits, with grant element between 20

and 25 percent are permitted, but there must be advance notification to the

member governments adhering to the Arrangement.

accomplished for telecommunications services in multilateral negotiations.

What can be accomplished in the relatively near future, however, would nonetheless be useful. Removal

of the nontariff barriers to the movement of commodities, such as insurance and banking industry restrictions, might be one accomplishment. Another would

be to develop rules regarding competition with stateowned monopolies. A third would be to develop

guidelines on the cost of capital that state-owned or

regulated service enterprises must be charged.

Sovereignty Considerations Largely

Dominate the General Trading Rules

When They Are Applied to

Space-Related Equipment

The international trading rules are not strong enough

to restrain sovereign governments from taking action

they deemed to be of substantial importance to sovereignty and defense, including certain actions in

space with respect to goods and services. The escape

clauses, exclusions and fuzzy areas built into the trade

rules provide governments with plenty of opportunity,

in cases of particular importance to them, to elude

the bite of the trade rules. Because France and Japan,

and to a lesser extent other industrial countries, have

made the decision to develop wide-ranging space programs, it would be wishful thinking to believe that they

would fully abide by the trade rules in competition

for sales of space-related equipment or space transportation services, because for some time at least, they

would probably lose out in open competition with

American suppliers such as Hughes Aircraft.

However, the debate is not all one-sided. One justification other industrial countries have offered for the

trade restrictions they have erected in the space area

is that they are simply countervailing against the strong

subsidy and industrial-policy support the United States

gives to its aerospace industry.

How International Trading Rules

Actually Affect Competition for U.S.

Exporters of Space-Related

Goods and Services

The question of whether or not the international

trading rules affect competition at the level of the actual marketplace, of course, goes beyond the question of whether or not the general trading rules do or

do not have effect. For one thing the recent exchange

rate divergence of the dollar and other foreign cur-
Ch. 4—Competition 99

rencies, has had a more damaging effect on the overall position of U,S. equipment exporters than all existing tariffs and quotas combined.

From the business point of view, the government

decision to take complaints to bilateral negotiation or

to GATT panels rests on a prior business decision “to

fight this thing out through government channels,”

Considering that victories “through government channels” may be pyrrhic or much delayed or not valuable, the reality of engaging in competition in international markets is that competition takes place on many

fronts, including price, quality, service, political connections, and regulatory action. Some markets will

simply be off bounds to U.S. exporters no matter what

general or special agreements exist. Others may, in

fact, be penetrable despite supposedly formidable

barriers.

One tactic that has been used by American equipment manufacturers, in the defense area and also in

other equipment areas, is to develop non-U. S. component suppliers with the conscious purpose of obtaining political support for entering the market in the

component supplier’s country. In pursuit of this goal,

the seller may acquiesce in or seek out offset arrangements that it would not otherwise consider. Formal

international trading rules would have difficulty under

the best of circumstances in countering such subtle

trade restrictions.
Chapter 5

SPACE TRANSPORTATION
Contents

Page

Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..............103

The Space Transportation 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

Cooperation in Space Transportation . . . . . . . . . . . . . . . . . . . . . ..............137

Current 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 Manufacturing Japanese 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 Rockwell International. . . . ...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 Launch Vehicle . .......................130

5-8. Arianespace Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..133

5-9. Rockwell International Estimates That the Shuttle is Most Economical

Over ELVs at High-Volume Operations. . ............................135
Chapter 5

SPACE TRANSPORTATION

INTRODUCTION

Space transportation is an industry in which the

U.S. Government has acted both as the primary

seller and the primary buyer. But over the last

10 years the European Space Agency (ESA) has

developed the Ariane launcher, and in 1980 the

corporation Arianespace was formed to market

Ariane launch services. Taken together, these

events have ended the U.S. monopoly in commercial launches. Now that the Space Shuttle has

been certified “operational” and the U.S. Government has, for the most part, terminated its use

of the present fleet of expendable launch vehicles

(at least for civilian launches), private U.S. firms

may take over their operation. In addition, recent

activities of some small U.S. firms suggest that a

new generation of low-cost, low-capacity ELVS

could soon be competing in the launch vehicle

market. Thus, the National Aeronautics and

Space Administration (NASA) monopoly in U.S.

commercial launches may be ending as well.

Although NASA and Arianespace compete for

launch customers, neither has had much difficulty

filling current flight manifests. However, the entry of additional launch service providers over the

next 5 years could lead to a situation where

launch service capacity exceeds demand. In the

past, space transportation policy in the United

States has focused on development of new technology. The emergence of foreign competition

and the interest of the U.S. private sector in providing launch services require a reassessment of

the Government’s role as space transportation

service provider.

This chapter assesses the challenges of international competition and the opportunities for

future cooperation in the international space

transportation industry. It gives additional consideration to the role the private sector may play

in developing a space transportation industry

based on the principles of competition and open

entry.

THE SPACE TRANSPORTATION INDUSTRY

The Providers of Space

Transportation Services

National Aeronautics and

Space Administration

When NASA was established in 1958 it was

charged with responsibility for the “ . . . development and operation of vehicles capable of carrying instruments, equipment, supplies, and living organisms through space.’” The launch vehicles

that NASA developed (through contracts with private manufacturers) created the opportunity for

commercial space endeavors. Until the establishment of Arianespace, NASA was the only seller

‘ National Aeronautics and Space Act of 1958, sec. 102(c)(3), 42

U.S.C. 2451.

of commercial launch services. The U.S. manufacturers of expendable launch vehicles (ELVs)–

although they are “commercial companies”-

have not sold vehicles except through NASA.

In a typical pre-Shuttle commercial transaction,

the buyer would contract with NASA to launch a

payload–generally a communications satellite.

NASA would then contract with one of the launch

vehicle manufacturers for delivery of a launch vehicle; when it was complete, NASA would integrate

the payload into the launch vehicle and supervise

both launch and insertion of the payload into orbit. With a fully operational Shuttle, NASA no longer

needs to order individual vehicles for each of its

launches; its responsibilities for launch services have

otherwise remained the same.

103
—.

104 . International Cooperation and Competition in Civilian Space Activities

NASA entered into its first launch services agreement in July 1961, with American Telephone&Telegraph (AT&T) for the experimental Telstar communication satellites.2 Under this agreement AT&T

financed, designed, and built the satellites and reimbursed NASA for the costs it incurred for the

launch. NASA’s policy then was to recover incremental, “out-of-pocket” costs associated with the

launch and not the “sunk” costs associated with

the development of the vehicle or of the terrestrial

support facilities. Since that time, NASA has continued to provide launch services on expendable

vehicles for its own missions and, on a “reimbursable basis, ” for other U.S. Government users, foreign governments, and private entities.3 The curZThe Space Industrialization Act of 1979: hearings on H.R. 2337

before the Subcommittee on Space Science and Applications of

the House Committee on Science and Technology, 96th Cong.,

Ist sess. p. 85 (1979) (Statement of Dr. Robert A. Frosch).

JAlthough it was NA!5A’s policy to recover incremental, “out-ofpocket” costs in 1961, this later was changed to recovering “all

reasonable costs.” Launch services provided on a “reimbursable

basis” implies, then, a recovery of “all reasonable costs. ”

rent pricing policy for the Shuttle-although similar

to the policy for ELVs—raises a number of specific

problems which are discussed in detail below.

Provision of a reliable vehicle is only one element

of a launch service. Launch pads must be built and

special facilities must be provided for integrating

the payload and the launch vehicle. Equipment and

personnel must be available for tracking and control of the vehicle after launch, and pre- and postIaunch safety procedures must be developed and

implemented. The complex technical nature of

launch services, the need for elaborate terrestrial

facilities, and the high cost of operations have, until 1982, prevented any challenge to NASA’s monopoly in free world space transportation services.

NASA has used the following vehicles to launch

commercial payloads (fig. 5-1):

Delta: When NASA modified the Thor IRBM

in 19s9 to produce the Delta it was thought to

be only an interim launch vehicle. However, with

177 launches to date–94 percent of which have

Figure 5“1 .—U.S. Launch Vehicles

Class

E

LEO

5

Ioc

Scout-D I Delta 3920 I Atlas-Centaur I Titan 34D

T

I Space Shuttle

440 lb 7,800 lb 12,000 lb 33,000 lb 65,000 lb

— 2,800 lb (PAM) 5,200 lb 10,000 lb (IUS) 27,000 lb (Centaur)

— 1,300 lb (PAM) 2,600 lb 5,000 lb (IUS) 13,000 lb (Centaur)

Operational ] Operational I Operational I Operational I Operational
Ch. 5—Space Transportation ● 105

been successful–the Delta has become the mostused U.S. launch vehicle. The Delta has been

constantly upgraded by its manufacturer, McDonnell 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 threestage 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. Firstand 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 Shuttle-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 2.5-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.5 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

(LEO), lunar, planetary, and synchronous trans-

——.

4 —

The Delta and Titan ELVS and the shuttle-PAM and shuttle-TOS

combinations all require apogee kick motors; therefore in this report their capabilities are given as pounds to geostationary transfer orbit. These upper stages place about twice as much weight

into geostationary transfer orbit as eventually reaches geostationary

orbit. For example, the PAM-D can place about 2,800 pounds into

geostationary transfer orbit, but only 1,350 pounds into geostationary orbit. The Centaur stage of the Atlas-Centaur ELV, the ShuttleCentaur, or Shuttle/TOS-AMS, and the Shuttle-l US do not require

separate apogee kick motors; the capabilities of these vehicles are

given as pounds to geostationary orbit.

jThe Atlas is referred to as a one-stage booster because it shuts

down and jettisons two of its three engines during its flight. See:

R. Teeter, “U.S. Capability for Commercial Launches, ” AIAA Space

Systems Conference, Oct. 18-20, 1982, Washington, DC, AlAA-82-

1789, p. 1.

Photo credit: McDonnell Douglas

Delta Launch Vehicle

fer orbit missions. This vehicle can launch 2,600

pounds to geostationary orbit (about 5,000

pounds to geostationary transfer orbit; see footnote 4) and has a 91 percent success rate with

53 launches.

Atlas-Centaur performance was improved in

1982 to enable it to launch the INTELSAT V satellites. General Dynamics’ Convair Division, the

manufacturer of the Atlas-Centaur, had planned

to add strap-on boosters like those used on the

Delta to increase performance. In order to com-
106 International Cooperation and Competition in Civilian Space Activities

pete for smaller payloads, GeneraI Dynamics also

considered developing a tandem adapter and a

stretched payload shroud to allow the Atlas-Centaur to carry two Delta-class satellites or one

PAM-DII or Ariane-4 class satellite. As a result of

NASA discontinuation of Atlas-Centaur bookings,

such modifications may depend on General Dynamics’ success at marketing this vehicle commercially. As of January 1985, there were six Government-contracted Atlas-Centaur launches left.G

Titan: Designed by the Air Force to meet its

own needs, the Titan has not, to date, been used

as a commercial launch vehicle, although several firms have expressed interest in offering a

“commercial” Titan launch service. The Titan has

been configured in several different ways since

the vehicle was first manufactured under contract

by Martin Marietta in 1955. One of its current

configurations, the Titan IIIC, is a three-stage

solid-and-liquid-propellant launch vehicle. Its

central core is composed of two liquid stages.

Two 120-inch-diameter, solid-propellant motors

are added as an “O stage. ” The final or third

stage, called the transtage, contains an inertial

guidance system and altitude control system. The

transtage has a multistart capability and provides

the propulsive maneuvers for achieving a variety of circular and elliptical orbits. Titan IIIC can

launch multiple payloads to the same or different orbits on the same launch and can place

about 6,000 pounds into geosynchronous transfer orbit.

The Titan IIID is a two-stage solid-and-liquidpropellant launch vehicle. it is essentially a Titan

IIIC with the transtage removed. This vehicle was

designed to launch heavy, low-altitude payloads

for the military. It can place about 30,000 pounds

into LEO.

The Titan 34D, (considered for possible commercial use) is similar to the Titan IIIC and can

use the transtage, the Boeing inertial upper stage

(IUS, discussed below), the Centaur, or the

TOS/AMS upper stages (discussed below). As a

result, the Titan 34D can be used as a backup

vehicle for Shuttle upper stage payloads. It is ca61 bid, Of the six satellites manifested on Atlas-Centaur, three are

U.S. Navy Fltsatcoms and three are INTELSAT VA communication

satellites.

pable of launching about 4,0OO pounds into geostationary orbit.

ELV Derivations: The Air Force has announced

plans to purchase a fleet of 10 ELVs as a backup

and/or complement to the Shuttle fleet.7 General

Dynamics and Martin Marietta each received

contracts to study a larger launcher based, respectively, on the Atlas and the Titan. The Air

Force declared the Titan-derivative the victor in this

initial competition; in a second round, undertaken

at the insistence of NASA, the Air Force recommended the Titan-derivative over the proposed SRBX, an ELV based on Shuttle hardware.8 These possible derivations are mentioned because, when developed, a commercial version could very well

emerge.

Shuttle? The Shuttle is the world’s first partially

reusable, manned, launch vehicle. The prime

contractor is Rockwell International. The Shuttle system consists of an orbiter with 3 liquid-fuel

engines, two solid rocket boosters and a large external fuel tank (ET). The orbiter is about the size

of a DC-9 jet and carries both the crew and payload, When fully developed it will be able to

place 65,000 pounds into low-Earth orbit (LEO)

and return payloads up to 32,000 pounds,

The Shuttle is launched by the combined firing of the liquid fuel engines on the orbiter (which

are fed by the ET) and the solid rocket engines.

The solid rocket casings are parachuted back to

Earth and Iand in the ocean to be recovered and

reused. On all Shuttle flights to date or planned,

the ET, when nearly empty, is released just before

orbital insertion so as to be destroyed on its reentry trajectory by atmospheric friction. However, one or more ETs may eventually be orbited

as components of (or raw materials for) permanent LEO infrastructure.10

7“Commercial ELV Competition Planned by Air Force, ” Aerospace Daily, Feb. 22, 1984, p. 289.

Sspace Business News, Jan. 14, 1985, p. 1; see also ‘ ‘presidential Directive Expands U.S. Space Launches Spectrum, ” Aviation

Week and Space Technology, Mar. 4, 1985, pp. 18-20.

gsee generally: H. Allaway, “The Space Shuttle At Work,” NASA,

Washington, DC, 1979, NASA SP-432.

IOC;vi/ian Space stations and the U.S. Future in Space (Washington, DC: U.S. Congress, Office of Technology Assessment, OTASTI-242, November 1984), pp. 77-82.
Ch. 5—Space Transportation ● 107

Multiple payloads–e.g., communication satellites, the ESA-developed Spacelab, or various experimental pallets–can be carried in the Shuttle’s 15 x 60-foot cargo bay. ’ 11 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 Research Council of Canada.

Shuttle Upper Stages: The Shuttle carries its payloads only to low-Earth-orbit; to reach the higher

orbits in which most communication 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 Ibs, and PAM-DI 1, which has a capacity

of 4,0OO Ibs.

The PAM-DII 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.13 For

Shuttle use, each system has an expendable stage

consisting of a spin-stabilized solid rocket motor,

spacecraft fittings, and the necessary timing, sequencing, power, and control assemblies. Also

required is a spin system to provide stabilizing

rotation, a separation system to release and deploy the stage and spacecraft, and the necessary

avionics to control, monitor, and power the system. A cradle structure is also necessary to hold

the PAM and its spacecraft in the Shuttle bay.

The cost of a PAM-D upper stage system is approximately $7 million to $8 million (1984 dollars)

for a launch in 1987.14 Costs may vary depending on whether it is a first or a repeat launch for

I I The Shuttle is large and powerful enough to hold five Dehaclass satellites. However, due to center-of-gravity problems, and

limitations imposed by tracking facilities and the insurance market, it is unlikely that the Shuttle will carry more than three or four

satellites at one time.

I ZAlsCI referred to as the spinning solid upper stage or SSUS. See

generally, “Using the Space Shuttle,” Rockwell International, 1982,

p. 12.

13E. H. Peterson and R. j. Thiele, ‘‘PAM Commercial Upper Stages

for Space Access, ” (Huntington Beach, CA: McDonnell Douglas

Astronautics Co., August 1982), MDAC Paper G8920, p. 1-2.

“’’McDonnell Douglas Sees 50 PAM-Ds Sold by 1990,” Aviation

Week and Space Technology, june 25, 1984, pp. 169-171.

Photo credit: National Aeronautics and Space Administration

Shuttle launching Satellite Business Systems

communication satellite. PAM upper stage is

attached below satellite.

a customer, because initial launches require additional preparation such as structural analysis.

As of January 1985, a total of 26 PAM upper stages

have been launched. With the exception of the

17th and 18th launches, all were successful.ls

Another upper stage, the inertial upper stage

(I US), was developed by Boeing, primarily for the

Air Force.16 The I US, when used with the Shuttle, should be able to place about 5,000 pounds

into geostationary orbit. It is a two-stage solid-propellant, three-axis-controlled, inertially navigated

upper stage. The I US was designed originally as

an interim vehicle that would bridge the gap between existing expendable upper stages and the

reusable space tug desired by NASA. When it became apparent that the space tug would not be

developed in the foreseeable future, the “interim

151bid.

‘GE. L. Bangsund, “IUS Status and Growth Potential, ” Boeing Aerospace, Headquarters Space Division, 1982, IAF-82-05.
.

108 . International Cooperation and Competition in Civilian Space Activities

DELTA 3910/PAM

I SPACECRAFT I

1

STS

PAM-D

PAF WITH

EQUIPMENT

INSTALLED

SPIN TABLE &

SEPARATION

< SYSTE M

I

/

- ‘

/

—.— —

Photo credit: National Aeronautics and Space Admlnktration

The PAM-D was designed to be compatible with both the Shuttle and the Delta in order to provide

a backup capability for early Shuttle missions.
Ch. 5—Space Transportation ● 109

upper stage” gradually evolved into the present

“inertial upper stage. ” The I US can be used on

the Shuttle or the final stage of the Titan 34D.

NASA plans to use the I US only to launch the

Tracking and Data Relay Satellite System (TDRSS)

satellites, after which it will rely on the Centaur

upper stage. The Air Force will continue to use

the I US 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

expendable launch vehicle, the AtIas-Centau r. 17

These upper stages are under development by

General Dynamics for NASA and the Air Force.

The Centaur G will be capable of placing about

10,000 pounds into geostationary orbit from the

Shuttle. The Centaur G-prime is to be used on

the International Solar Polar Mission, and for the

Galileo Jupiter probe, both planned for 1986. This

stage will be capable of placing about 14,000

pounds into geostationary orbit.

Believing that the I US would be too expensive

for commercial users and that the PAM-D and

Dll are too small for the large communication satellites of the late 1980s, a private corporation, Orbital Sciences Corp., is working on an upper stage

called the Transfer Orbit Stage (TOS). 18 The TOS

would be able to place about 13,000 pounds into

geostationary transfer orbit and is less expensive

than the I US. The prime contractor for the TOS

is Martin Marietta.

Orbital Sciences Corp. also plans to offer an

Apogee and Maneuvering Stage (AMS); a bipropellant propulsion module which, depending on

the weight of the payload and the desired orbit,

will operate independently of, or with, the TOS.

OSC intends to charge about $30 million to

launch IUS-class payloads.20

—-— . . . . . . . .-

17E. H. Kolcum, “NASA Weighs Greater Role for Centaur, ” Aviation Week and Space Technology, july 25, 1983, p. 60.

‘8D. Dooling, “Business Graduates Plan New Shuttle Stage, ”

Space World, March 1983, p. 29.

lgThe TOS was fully financed by a $50-million R&D limited patinership, the largest private financing of any commercial space

endeavor to date.

‘“’’Orbital Sciences Offers Upper Stages, ” Aviation Week and

Space Technology, june 25, 1984, pp. 108-113.

Photo credlf: National Aeronautics and Space Administration

Artist’s conception of the proposed Shuttle launched

Centaur Inertial Upper Stage

Aerojet Tech Systems is also undertaking development, with in-house funds, of a high-performance, all-liquid upper stage, called the Liquid Propulsion Module (1PM). The basic model

is tailored for launching up to 3,500 pounds to

geostationary orbit; by using tandem stages it

would be capable of launching up to 8,500

pounds to geostationary orbit. Aerojet’s goal is

to offer this stage commercially by 1987 for $10

million. Its engine is derived from the Shuttle Orbit Maneuvering System Engine.

Astrotech Space Operations is another firm interested in entering the IUS-class upper stage

market for commercial and military payloads.

Astrotech and its prime contractor, McDonnell

Douglas, hope to develop a liquid-propellant

upper stage (Delta Transfer Stage) capable of placing 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-compatible and would cost in excess of $30 million. 21

2

1“Astrotech Sees Military Uses for Stage, ” Aviation Week and

Space Technology, june 25, 1984, p. 158.
—

110 . International Cooperation and Competition in Civilian Space Activities

Photo credit: Boeing Co.

IUS and attached tracking and data relay

communications satellite being launched

from the Shuttle.

Arianespace

Since the early 1960s, Europe has attempted

to mount a coordinated space program to ensure

European participation in the economic, scientific, and political benefits of space activities and

to compete with the United States and the Soviet 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 Organization (ESRO), the European Launcher Development Organization (ELDO), and the European

Space Conference (ESC).23 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

1980s. With Ariane 2 and 3 already operational,

the ESA member states have approved a program

to develop Ariane 4 as well as the HM-60 engine,

an essential component of the Ariane 5.24 Ariane

1 is 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 S- I ). Previous flights had been developmental (LO1 -L04) and promotional (L5-V8).

The first Ariane 3 was successfully launched on

August 4, 1984. The first flight of Ariane 4 is expected in 1986. A variety of designs for Ariane

5 are being debated, including a manned Shuttletype 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, ESAfunded Kourou spaceport in French Guiana,

South America. Currently, the one pad at Kourou

will allow only five or six flights a year; a new

ZZESA has I I full members—Belgium, Denmark, France, West

Germany, Ireland, Italy, the Netherlands, Spain, Sweden, Switzerland, and the United Kingdom–and three associate members-Austria, Canada, and Norway. (See ch. 3 for a discussion of ESA.)

23 For a description of European space activities prior to and following the formation of ESA, see: Civi/ian Space f’o/icy and Applications (Washington, DC: U.S. Congress, Office of Technology Assessment, OTA-STI-1 77, june 1982).

24Gibson, Roy, “Europe-Towards a New Long-Term Programmed,” Space Po/icy (1: 1), February 1985, p. 5.
Ch. 5—Space Transportation ● 111

SKIRT

SOLID ROCKET d

MOTOR L THRUST

VECTOR CONTROL

ACTUATOR

Photo credit; Boeing Co.

Inertial Upper Stage

Photo credit: McDonne\l Douglas

Artist’s conception of Delta Transfer Stage

pad in 1985 will allow about 10 annual

As of January 1985, there have been

launches, of which two have been fain

5-1 ).

au riches.

1 Ariane

res (table

Realizing that commercial operations would be

difficult if the 11 ESA nations had to agree unanimously to every business decision, ESA and

CNES (the French national space program) established a quasi-private corporation called Arianespace to produce, finance, market, and launch

Ariane vehicles. ESA and CNES remain responsible for development of future Ariane vehicles

and for operation of the Guiana spaceport.

Arianespace S.A. is incorporated in France

(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

34 percent) own 60 percent; West German investors own 20 percent; and the remainder is split



Ch. 5—Space Transportation ● 115

Photo credit: European Space Agency

Ariane L1 on ELA1

Table 5-1.—Ariane Flights

Flight reference Date Launcher Payload Comments

Development flights:

LO1. . . . . . . . . . . . . . . . . . . . . . . . Dec. 24, 1979

L02 . . . . . . . . . . . . . . . . . . . . . . . . May 23, 1980

LO.. . . . . . . . . . . . . . . . . . . . . . . June 19, 1981

LO.. . . . . . . . . . . . . . . . . . . . . . . Dec.20, 1981

Promotion flights:

Lo. . . . . . . . . . . . . . . . . . . . . . . . . Sept 10, 1982

Lo. . . . . . . . . . . . . . . . .. ... ... .June 16, 1983

L7. . . . . . . . . . . . . . . ... ... ... .Oct. 19, 1983

V8 . . . . . . . . . . . . . . . . . . . . . . . . Mar.5, 1984

Arianespace commercial flights:

V9 . . . . . . . . . . . . . . . . . . . . . . . . May23, 1984

Vlo . . . . . . . . . . . . . . . . . . . . . . . Aug.4, 1984

Vll . . . . . . . . . . . . . . . . . . . . . . . Nov. 10, 1984

V12 . . . . . . . . . . . . . . . . . . . . . . . 1985

AR 1

AR 1

AR 1

AR 1

AR1 (SYLDA)

AR1 (SYLDA)

A R 1

A R 1

AR1

AR3(SYLDA)

AR3

AR3(SYLDA)

Technological Capsule (CAT)

AMSAT-FIREWHEEL

CAT + APPLE + METEOSAT

CAT + MARECSA

MARECSB/SIRIO

ECS-1/OSCAR

INTELSATV-F7

INTELSATV-F8

SPACENET1

ECS-2/TELECOM 1A

SPACENETF21MARECS 62

ARABSAT/SBTS-l

Success

Failure

(Viking engine

instability)

Success

Success

Failure

(third-stage Turbo

pump)

Success

Success

Success

Success

Success

Success

—

SOURCE” Arianespace, Inc
. . -.

116 ● International Cooperation and Competition in Civilian Space Activities

Figure 5=2.—The Hermes Spaceplane (conceptual design)

SOURCE: CNES

among the other ESA nations, A U.S. subsidiary

(Arianespace, Inc.) was chartered in November

1982.

Potential Government Sellers

A number of countries have, or are developing, launch vehicles which would enable them

to enter the launch vehicles market (figs. 5-3a and

5-3 b):

SOVIET VEHICLES25

The Soviets have developed a number of expendable launch vehicles; the most commonly

used is the Sapwood-A launcher, a derivative of

an ICBM design dating back to the mid-l950s.

ZSThe sov~ union does not r-lar-ne or identify its launch vehicles.

Soviet surface-to-surface missiles are assigned numbers with the prefix SS by the U.S. military. When such missiles are seen often enough

to be identified by military branches of the NATO powers, code

names such as Sandal, Skean, or Sapwood are assigned. (The Proton, not having been developed as a missile, does not have an SS

or code-S designator. ) In order to convey more information about

the Soviet vehicle and its various stages, TRW developed the sysAs presently modified, the Sapwood-A can

launch Soyuz manned vehicles of about 15,000

pounds to low-Earth-orbit. The larger Proton-D

launcher can carry about 44,000 pounds to lowEarth-orbit and has been used to launch the Salyut space stations. Recent reports indicate that

the Soviets are developing both a Saturn-class

vehicle capable of placing 300,000 pounds into

low-Earth-orbit and a reusable space vehicle similar to the Shuttle.26

Although the Soviets have long had a reliable

fleet of launch vehicles they have only recently

tern of using capital letters for the first stage, numbers for the upper stages and small letters for the final stage. Both the letter and

code designators are used here. For a detailed discussion of Soviet

launch activities, see: Soviet Space Programs, 1971-1975, Staff Report for Senate Committee on Aeronautics and Space Sciences, Congressional Research Service, August 1976.

‘

b

’’ Soviets Said to Remove Camouflage Nets From New Launch

Vehicles,” Aerospace Dai/y, Dec. 14, 1983, p. 227; See also: D.

Doder, “Soviets Say They Plan to Build Space Shuttle,” The Washington Post, Dec. 13, 1983, p. A 10, c. 1; See also, “Soviets Ready

New Boosters at Tyuratam, ” Aviation Week and Space Technology, Aug. 27, 1984, pp. 18-21.
Ch. 5—Space Transportation ● 117

Photo credit: Ariane

Kourou, French Guiana V1O launch, August 4, 1984.

Arianespace/ECS-2 Telecom 1-A

made an attempt to enter the international launch

services market. In June 1983, the Soviets requested that their Proton launcher be considered

as a candidate to orbit INMARSAT’s second-generation communication satellites.27 At the time

of the Soviet announcement, the other candidate

launch vehicles were the Shuttle, Ariane, AtlasCentaur, Delta, and Titan. The INMARSAT council accepted the Soviet request and informed its

satellite contract bidders that they must design

their spacecraft for compatibility with at least two

of the six launchers and that one of their selections had to be the Proton, Shuttle, or Ariane.28

27j. M. Lenorovitz, “IN MARSAT Adds Proton to Booster List, ”

Aviation Week and Space Technology, Aug. 1, 1983, p. 16; see

also, “Soviets Provide Data to Guide INMARSAT in Launcher Decision, ” Aviation Week and Space Technology, Aug. 8, 1983. p 22.

It should be noted that the Soviet Union is a member of INMARSAT

(see chs. 3 and 6).

IaAv;at;on Week and Space Technology, Aug. 1, 1983, P. 17.

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 (Tyuratam) 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 vehicle 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 wouId have to allow Western 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

1960s, the Institute of Space and Aeronautical

Sciences (ISAS), developed the Kappa and Lambda series of solid-fuel sounding rockets, which

were used for Japanese scientific and applications

experiments. The difficulties of rocket development were exacerbated by inadequate guidance

and stabilization technology, the result in part of

a self-imposed reluctance to fund technologies

that might be perceived as having military applications. ISAS went on to develop orbital

rockets; the first successful 50-pound test satellite was launched by an advanced Lambda in February 1970. The Mu-class orbital launcher

achieved its first success in 1971 and continues

to be operated by ISAS from its Kagoshima test

range. Nissan Motors is currently designing an

advanced version of the Mu, the M-3-kai-l, which

will be used for Japan’s first planetary exploration missions in the mid-1980s, including a

planned Halley/Venus mission in 1985.

In 1969, the National Space Development

Agency (NASDA), assumed primary responsibility

for launcher development for applications satel-
— — —. - . — . .- - - - -

118 ● International Cooperation and Competition in Civilian Space Activities

Figure 5-3.—Foreign National Comparative Launch Vehicle Development

A

f

60

50

40

30

20

10

Class

Ioc

60

50

40

30

20

10

I H-11

SLV-3 I ASLV I PSLV

80-100 lb 300 lb 1,300 lb

— — —

I I

)peratlonall 1982 I 1988

I Brazil

SOND IV

440-660 lb

450 ml

1990’s

Europe (ESA) I

*

——

*

—

m l

Ariane 1 I

Ariane 2/3 IAriane 4 IAriane 5 I

CSL-1 I

CSL-2 I

CSL-3

4,000 lb I

5,000 lb I30,000 lb I (7) I

370 lb I

2,600 lb

95 mi I

3,600 lb 4,400-5,200 lb 9,200 lb (?) 860 lb

Operational Operational 1985 1990-1994 Operational Operational 1985
—

Ch. 5—Space Transportition ● 119

—

I

D

—

3rd.

.

0

Ist.

D-1

PROTON

HEAVY SOYUZ

CONCEPT

Photo credit: C. P. VickG

Soviet launcher

Iites. Instead of attempting to develop further versions 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 this technology (subject to certain limitations, which are

discussed below). As a result, Japan developed

the N-1 launcher, which is capable of lifting over

500 pounds into geostationary transfer orbit. The

N-1 consists of a Thor first stage, built in Japan

by Mitsubishi Industries under license to McDonnell Douglas, a Japanese-developed liquid-fuel

second stage, and a U.S. Thiokol third stage. Approximately 67 percent of the N-1 is supplied by

Japanese firms.

A more powerful version, the N-11, had its first

successful test flight in February 1981, and is capable of lifting about 1,500 pounds into geostationary transfer orbit. The major differences from

the N-1 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

the N-11 is only 56 percent. For the late 1980s and

the 1990s, the Japanese have a new booster, the

H-1, 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-1 will be able to place about 2,400

pounds into geostationary transfer orbit; a

recently funded follow-on version, the H-11, will

have even greater capacity (in the early 1990s).2’3

The H-1 will use an inertial guidance system instead of the radio guidance of the N-1 series.

The Japanese have not announced plans to offer commercial launch services. At present, Japanese launch capabilities are restricted not only

by technology, but also by agreements with the

Japanese fishing industry which allow missiles to

be fired only at two times of the year, JanuaryFebruary and August-September. In addition, the

U.S.-Japanese agreements which cover the transfer of Delta technology prevent its transfer to third

Zg’’japan Funds Launcher, Satellite Development,” Av;afiofl week

and Space Technology, Feb. 13, 1984, p. 125.

38-797 0 - 85 - 5 : QL 3
.— - - . .

120 . International Cooperation and Competition in Civilian Space Activities

countries or its use for launching third-country

payloads. The H-11 launch vehicle, which will be

designed and built entirely with Japanese technology, will not be similarly restricted.

CHINESE VEHICLES

The Peoples Republic of China’s (PRC) launch

technology has been derived from the Soviet

Union, primarily the SS-4 (Sandal) medium-range

liquid-fueled missile. The design for these missiles was given to the Chinese in the late 1950s

before relations between the two countries deteriorated.

The Chinese launched their first satellite, the

380-pound China 1, in April 1970, with a CSL-I

(Long March 1) launcher. Starting with China 3

in 1975, launches were made with the FB-I

(Storm) vehicles, a version of the CSS-X-4 ICBM,

which is equivalent in size to the U.S. Atlas. The

FB-1 can launch about 2,600 pounds into lowEarth-orbit.

The Chinese are known to be working on a

new launcher, the Long March 3, that would use

the two stages of the FB-1 plus a liquid oxygenIiquid hydrogen upper stage. If successful, this

would make them third in the world, after the

United States and ESA, to use high-energy cryogenic fuels. The Long March 3 would be capable of launching about 3,080 pounds into geostationary transfer orbit.

China is planning to accelerate its international

cooperative efforts in space, and it has announced

that it is ready to discuss Long March launch services with interested customers .30

INDIAN LAUNCH VEHICLES

India began to work on its first launch vehicle,

the SLV-3, in 1973. It is is a four-stage, inertially

guided, solid-propellant rocket designed to lift 80

to 100 pounds to low-Earth-orbit. The SLV-3 successfully launched a 75-pound RS-1 technology

demonstration satellite in July 1980.

The Indians are developing the ASLV, which

will be able to lift about 300 pounds into lowEarth-orbit. The first launch of the ASLV is

Jo’’China Offering Space Launch Services to International Users,”

Aviation Week and Space Technology, Apr. 8, 1985, p. 25.

planned for 1985 or 1986. The ASLV will continue to use solid propellant for the main motors,

as does the SLV, but will have two solid-propellant strap-on boosters. The PSLV, a vehicle

planned for development in the late 1980s or

early 1990s, will be similar to the ASLV but may

use the Viking engine (currently used on the

Ariane) as its second stage and will be able to

launch 1,300 pounds into low-Earth-orbit. Longterm plans call for development of a SPSLV capable of low-Earth-orbit launches of 7,50O

pounds. It is unlikely that India will be able to

compete with NASA or Arianespace in the next

two decades.

BRAZILIAN VEHICLES

Brazil has developed a family of solid-propellant sounding rockets called the Sonda; the latest

of these—the Sonda Ill—is a two-stage rocket

which can carry payloads of about 130 pounds

to altitudes of 380 miles. Several variants of the

Sonda are now operational and regularly used

for meteorological observation and atmospheric

testing. Although these rockets lack the power

to place a satellite into orbit, current plans call

for development of more powerful boosters.

Potential Non-Government Sellers

U.S. PRIVATE SECTOR ACTIVITIES

Three types of private sector launch activities

are currently under way in the United States:

firms which want to market one of the existing

ELVS (Delta, Atlas-Centaur, or Titan), firms which

want to develop new, low-cost expendable

launch vehicles, and those marketing upper

stages for use with the Shuttle.

When NASA announced in 1983 that it was

seeking private sector operators for the Delta and

the Atlas-Centaur, five firms expressed interest in

marketing these vehicles.31 However, when NASA

published its official solicitation for proposals,

only two companies responded with firm offers.

General Dynamics’ Convair Division, the current

manufacturer of the Atlas-Centaur, was the only

company to express interest in that vehicle. Transpace Carriers, inc., was the only company to reJ’ “Five Firms Seek NASA ELVS,” Space Business News, July 18,

1983.
Ch. 5—Space Transportation ● 121

quest the right to operate the Delta line. McDonnell Douglas Astronautics, the manufacturer of

the Delta, did not bid on this vehicle.

The Titan was not included in the NASA solicitation because it is an Air Force vehicle. Prime

contractor Martin Marietta has expressed interest in marketing 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. (SS1) of Houston, TX, and

Starstruck, Inc. (formerly Arc Technologies) of

Redwood City, CA.

[n September 1982, SS1 flew a successful suborbital flight of its Conestoga 1 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 SS1 will be able to place small payloads

into low-Earth-orbit. The Conestoga II will be a

multistage vehicle based on the Thiokol solidrocket motors presently used as strap-ens 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 hopes to 

in the market for geosynchronous payloads

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

it will remain in business. 36

As discussed above, there are five families of

Shuttle upper stages either existing or under de32Space Services Inc., press release, Sept. 8, 1983. See also, “SS1

Selllng Conestoga 1-6, ” Space Business News, Aug. 13, 1984.

13SSI has a contract to launch the cremated remains of humans

into orbit in an orbiting mausoleum. The firm awaits DOT approval

to do so. See “SS1 Awaits DOT Mission Approval, ” Space Business

News, Jan. 28, 1985, p. 1.

14j. Levine, “Shooting for Outer Space, ” Venture, October 1983,

PP. 116-117.

1~’’Arc/Starstruck Plans Three Tests In ‘83, ” Space Business News,

)Uly 18, 1983, p. 6.

“See, for example , “Reorganization Gives New Life to

Starstruck, ” Space Bus{ness News, Oct. 22, 1984, pp. 2-3.

;

Photo credit: Space Services Inc.

Artist’s depiction of SS1’s Conestoga II

velopment in the United States—PAM, I US, Centaur (under development), TOS (under development), and the Delta Transfer Stage. Although it

is possible that any of these might be sold commercially, only the PAM (McDonnell Douglas),

the TOS (Orbital Sciences Corp./Martin Marietta),

and the Delta Transfer Stage (Astrotech, McDonnell Douglas) were developed as private initiatives. The I US was developed for the Air Force

by Boeing, and the Centaur is being developed

under a joint NASA-Air Force contract by General Dynamics. There might be little competition

between these upper stages because they are designed to serve different weight classes of satel-
122 “ International Cooperation and Competition in Civilian Space Activities

Iites. Their approximate capacities to geostationary orbit are: PAM-D—1 ,400 pounds, IUS—5,000

pounds, TOS–5,000 pounds, Delta Transfer

Stage–7,500 pounds, Centaur—10,000 to 14,000

pounds. Although the I US and TOS/AMS are in

the same weight class, the currently planned TOS

should cost substantially less than the IUS.37

The only potential foreign participation in the

Shuttle upper stage market is the Italian Research

Interim Stage (I RIS).SB The IRIS is being developed

by the Italian Government and aerospace industries and should be able to launch 1,900 pounds

to geostationary transfer orbit or about 900

pounds to geostationary orbit. The limited capacity of the IRIS will prevent it from launching even

small Delta-class communication satellites; however, it may be ideal for scientific satellites and

small commercial satellites should a market develop for these. The first flight of the IRIS is

planned for November 1986.

FOREIGN PRIVATE SECTOR

In the late 1970s, a private West German firm,

OTRAG (Orbital Transport-und-Raketen Aktiengesellschaft), announced its plans to offer private

launch services. However, political complications

with the West German Government, combined

with the company’s inability to find a permanent

location for its launch pad, have so far prevented

OTRAG’S success. OTRAG plans to create a family of vehicles using clusters of identical liquid propulsion units; such units would be added or subtracted to match the payload weight. Their

smallest model would be capable of launching

a 440-pound payload to an altitude of 31 miles

and their largest vehicles would be able to carry

a 1,1oo-pound payload to 174 miles. OTRAG successfully tested a two-unit rocket in 1977 and a

four-unit rocket in 1978. Eventually, OTRAG

hopes to create a vehicle in the Ariane class; however, its present activities are limited to launching sounding rocket-class vehicles from Sweden’s

Kiruna launch site.39

37pAM and TOS Upper stages only go to geostationary transfer

orbit. Figures given here assume an appropriate apogee motor.

38E. Vallerani, F. Veresio, and L. Bljssolino, “IRIS-A New [tat.

ian Upper Stage System, ” 3dth Congress of the International Astronautical Federation, Oct. 10-15, 1983.

39J. Lenorovitz, “Otrag Prepares for Full Launch Service, ” Av;ation Week and Space Technology, Sept. 12, 1983, pp. 77-78.

Bristol Aerospace, Ltd., of Canada, has also announced plans to offer a low-cost commercial

launch vehicle.40 Bristol currently manufactures

the Black Brant sounding rocket, which has been

used for research by several space agencies including NASA and ESA. Bristol plans to develop

a solid-propellant vehicle capable of placing 500-

to 1,700-pound payloads into low-Earth-orbit and

payloads of up to 800 pounds into geosynchronous orbit. The company hopes to conduct flight

tests in 1988 and

tivities by 1990.

Buyers of

to begin commercial launch acSpace Transportation

Services

At present, the three primary purchasers of

space transportation services are the military, national and cooperative space programs, and communication satellite service providers. Activities

of the military and of the various national and

cooperative space programs will account for over

75 percent of the total demand for launch services over the next decade. Although these activities are numerically the largest, they raise few

international competitive issues. In the United

States, most NASA and Department of Defense

(DOD) payloads will fly on the Shuttle. A number of DOD payloads will fly on an ELV designated as a Shuttle backup. The payloads of ESA

and the ESA member states will most likely fly

on Ariane unless—as in the case of Spacelab—

the unique capabilities of the Shuttle are necessary. International commercial competition in

space transportation will take place primarily with

regard to large communication satellites launched

to geostationary orbit.

Outside the Soviet bloc, the buyers of civilian

communication satellites can be divided into

three submarkets: U.S. communications carriers,

global international satellite organizations, and

considered together, foreign national and regional satellite systems.

U.S. Communications Firms

Of these submarkets, that of U.S. communications carriers is by far the largest. U.S. commu-

~“Expendable Launch Vehicle,” Bristol Aerospace Ltd., 1983.
Ch. 5—Space Transportation ● 123

nications and satellite manufacturing firms such

as AT&T, RCA, Western Union, ITT, Satellite Business Systems, American Satellite, Ford Aerospace,

and Hughes now own 21 geosynchronous communication satellites, used primarily for domestic U.S. communications. In limited but growing

numbers, they are also used for transborder communications between the United States and

North and South America and the Caribbean.

Up to the present, forecasters have been optimistic regarding the continuing need for launch

services to put U.S. communications satellites in

orbit. One indication supporting this prospect are

the 81 pending and approved applications filed

with the Federal Communications Commission

(FCC) to construct and launch satellites, and to

receive orbital locations. Two studies done for

NASA have also concluded that the demand for

launch services for communications satellites

would remain strong.41 One estimated that 61

U.S. communications satellites would be launched

during the 1986-89 period, with 68 more

launched before 2000; the other that between

97 and 163 U.S. domestic communications payloads would be launched between 1984 and

1999.

Recent events, however, put these optimistic

projections in doubt. First, the expected surge in

demand for direct broadcasting satellites has

failed to materialize. Second, current substantial

excess satellite capacity (see ch. 6) may delay or

deter firms from proceeding with announced

plans. Third, in the late 1980s and 1990s, communications carriers are expected to have large

fiber optic networks in place that will compete

with satellite communications in virtually all applications except point-to-multipoint, sparse area,

and some mobile communications. While the

outcome of this technological competition cannot now be clearly foreseen, fiber optic cables

and other terrestrial modes linked to fiber optic

local area networks will almost certainly carry

some traffic that satellites heretofore had been

expected to carry. Optimistic projections of the

number of communications satellite launches,

therefore, should be treated with considerable

skepticism.

included in the forecasts is launch demand generated by satellite replacement. Because communications satellites typically have design lives of

less than 10 years, most of the satellites that are

expected to be in orbit or launched before the

end of 1985 will therefore cease operation before

1995 and, if replaced, will generate demand for

launch services.

The Shuttle, Ariane, Delta, Atlas-Centaur, and

Titan launch vehicles could all meet the needs

of U.S. communication satellite system operators.

The Shuttle, although more sophisticated than its

competitors, has no special advantage in launching satellites to geostationary orbit, If all these

vehicles are equally reliable, the choice of

launcher will be based primarily on: 1 ) the price

of the vehicle, 2) the reliability of the launch

schedules, 3) the relative simplicity of planning,

documenting, and processing their payloads.42

INTELSAT and INMARSAT

The International Telecommunications Satellite Organization (INTELSAT) and the international Maritime Satellite Organization (lNMARSAT)

maintain global communications systems.

INTELSAT, which also provides space segment

capacity for many countries that do not have national systems, currently has 15 satellites in orbit, 8 of them large INTELSAT V satellites, which

were launched by Atlas-Centaur and Ariane from

1980 through 1984. Current plans are for

INTELSAT to launch 13 satellites in the 1985-87

period. If all are launched as planned, six of them

will be INTELSAT V satellites, and seven will be

INTELSAT Vls. The latter series of satellites are

very large and will be able to carry approximately

40,000 separate simultaneous telephone conversations. Still on the drawing board is an INTELSAT

VII series.

Whether all the INTELSAT Vls will be launched

as planned is in some doubt. INTELSAT transatlantic and transpacific satellites will compete with

undersea fiber optic cables, several of which are

dlou~s;~e U5er5 pay/oa~ Mode/, Battelle’s Columbus Laboratories,

NASA contract NASW-338; june 1983. For a more complete discussion of the demand for communication satellites see ch. 6.

41NA5A Advjsory Coljncj]Study of Effective Shuttle Utilization,

NAC Task Force for the Study of Effective Shuttle Utilization, Nov.

17, 1983,
124 . International Cooperation and Competition in Civilian Space Activities

planned for the late 1980s and early 1990s. In

addition, some competition from private U.S.

satellite systems is likely to emerge. Although

INMARSAT is purchasing its own system of satellites, it currently leases capacity from INTELSAT

and other systems.

Satellites of the INTELSAT 1, 11, and 111 series

were launched on the Delta; satellites of the

INTELSAT IV and V series were launched on the

Atlas-Centaur. To satisfy political pressures that

have arisen since the development of Ariane,

INTELSAT now intends to distribute its business

between U.S. and European vehicles, The Ariane

has been used to launch an INTELSAT V, and the

Shuttle will be used for the initial INTELSAT VI

launch.

As a result of the projected size of the next generation of INTELSAT satellites (I NTELSAT VI will

weigh 4,800 pounds in orbit) the only vehicles

that could launch them are the Shuttle, Ariane4 (under development), Atlas (improved version

not developed), and Titan.

Foreign Satellite Systems

This category includes both the satellites of individual foreign countries (private or government

owned) and organizations established to provide

services to regional groups of countries. In addition to voice communication, such systems provide TV distribution, maritime communication,

data transfer, and direct broadcast TV,

At present, Canada, France, Great Britain, lndonesia, Japan, the Middle East countries (Arabsat), and NATO all have operational systems.

Other planned but not yet operational systems

include: ITALSAT (Italy), MORELES (Mexico),

SBTS (Brazil), AUSSAT (Australia), ECS (Eutelsat),

LUXSAT (Luxembourg), and STW (China). Current users of the INTELSAT system may convert

to national or regional satellite systems if they experience a dramatic increase in traffic volume or

it becomes politically or economically desirable

to exercise greater control over their communications network (see ch. 6).

Battelle has estimated that between 1983 and

1998 anywhere from 110 to 176 satellites will be

launched for foreign national or regional communications.43 Countries that have the ability to

place large payloads into geostationary orbit will

presumably use their own launch vehicles, For

example, the Europeans will favor the Ariane

rocket. Countries such as Japan and China, which

have at present only a limited launch capability,

will within 10 years probably be able to launch

large communication satellites to geostationary

orbit.

Countries which do not possess an independent launch capability will, like the U.S. domestic communications suppliers, be concerned with

the price, schedule, reliability, and processing

simplicity of individual launchers. The availability of favorable financing and/or trade offsets (particularly for developing countries) may also be

an important consideration .44

In addition to communication satellites, other

space activities such as remote sensing (ch. 7),

materials processing (ch. 8), and navigational satellites (app. C) may require commercial launch

services. Many activities conducted in low-Earthorbit might be launched not only with the Shuttle, Ariane, Delta, Titan, and Atlas, but also with

the new generation of low-cost privately developed launch vehicles and with the vehicles of Japan, China, and perhaps Brazil and India. Current demand for such activities is limited;

however, together they constitute a significant uncertainty in future launcher demand estimates.

The Shuttle, because it allows human interaction with and retrieval of payloads, has a decided

advantage over other launch systems for manufacturing in space. Unless the Ariane is substantially modified—a subject which has been discussed within ESA—it cannot compete with the

Shuttle for MPS and other payloads that require

human interaction. Other ELVS are equally disadvantaged in comparison to the Shuttle.

43gattel[e, op. cit., note 41.

qqRainbow !jatellite I nc. ’s decision to launch two cOmm IJnicatiOn

satellites on the General Dynamics Atlas-Centaur is a good example of the value of creative financing. In order to insure that Rainbow’s launch business did not go to either NASA or Arianespace,

General Dynamics agreed to provide $2oO million in financing for

Rainbow and to give “a back-up commitment for all of the capacity” of one of the satellites. See: Space Business News, July 16, 1984,

p. 1.
Ch. 5–Space Transportation 125

COMPETITION IN SPACE TRANSPORTATION

The entrance of ESA’s Ariane rocket into the

international marketplace brought an end to

NASA’s monopoly in commercial space transportation services. This fact, combined with the development of the Shuttle and the potential entry

of other new launch vehicles, has created a situation where, for the first time, supply cou/d significantly exceed demand in the space transportation service market. Prior to these two occurrences, vehicles were manufactured and consumed as they were needed; therefore, the supply of launch services was always roughly equivalent to the demand for that service. Depending

on the size of demand for satellites, NASA and

the other launch service suppliers may find themselves in a situation where they must compete

for a limited number of payloads.

Development of Competition

Access to space via a capable and reliable

launch vehicle is important to the technological

and commercial goals of all nations that may wish

to orbit satellites. The desire of some nations to

develop an indigenous launch capability derives

from three considerations: first, a lack of confidence that launch services would be available

when needed and without restriction from the

United States or the Soviet Union; second, an interest in enhancing national prestige by demonstrating the technical virtuosity required to maintain an independent launch service; and third,

an intention to participate in any economic gain

to be derived from a wide range of commercial

space services. Some newly industrialized countries, may also desire to acquire launch vehicle

and precision guidance and control technologies

for use in military ballistic missile systems.

Some European countries–particularly France–

have always been reluctant to concede to the

United States a monopoly in launch vehicles.

Consequently, U.S. hesitation before launching

the French-German Symphonic communications

satellite in 1971 strengthened European determination to develop an autonomous launch capability. 45 The decision to build the Ariane launch

JScivi/lan space po/;cy and Applications, oP. cit., p. 363.

vehicle was a declaration of political and technological independence from the United States.

In Japan, space technology has been identified

as an area of future economic significance. A

1981 report by the Ministry of International Trade

and Investment (MITI), emphasized the export

potential of space technology and concluded that

an indigenous space industry is vital because:

As unilateral introduction of technologies from

foreign countries is getting more difficult, it is

necessary to strengthen Japan’s own bargaining

power through accumulation of necessary technological know-how. 46

With a smaller economic and technical base to

draw from than either the United States or Europe, and lacking the major military program to

ensure political and financial support, the Japanese launcher program has relied on close cooperation with the United States.

Brazil, India, and China are also developing

their own launch capabilities–for many of the

reasons mentioned above. All three countries

possess a strong desire to be technologically independent from the developed world, to gain any

economic benefits that derive from the application of space technology, and to be regarded as

belonging to the prestigious club of “space powers.” Although the launch vehicles being developed in these countries are at present somewhat

limited, their political importance will probably

assure their continued existence. In some respects, national launch vehicle programs can be

compared to national airlines—some are conducted primarily for profit, others play the role

of enhancing “prestige” and “national self-image.”

To date, competition in launch vehicles has

been limited to those developed by governments.

The fact that private or semi-private launch services will soon be available introduces a different

kind of competition into this market. On May 16,

1983, the president announced that the U.S. Government fully endorsed and would facilitate the

commercial operation of expendable launch ve46 Repofl of the Deliberation Council on Basic problems in the

Space Industry, MITI, Apr. 20, 1981.
. -.—— — — - -- . . . . . 

126 . International Cooperation and Competition in Civilian Space Activities

hicles (ELVs) by the private sector.47 He assigned

the Department of Transportation the task of assisting commercial ELV operations and recommending necessary regulatory, policy, and treaty

changes. Subsequent legislation (Public Law 98-

575), signed into law on October 30, 1984, confirmed 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

able to provide 24 launches per year by 1988,

and Arianespace hopes to be able to launch 10

Arianes per year by that time. Experts disagree

about whether the demand for launch vehicles

will exceed the supply. They further disagree

about what, if any, public policies to pursue to

affect supply and demand.48 Estimates of demand

must be viewed with caution since they are, at

bottom, only “best guesses.” Such estimates will

be affected by changes in:

●

●

●

●

U.S. and foreign government space activities–Building a space station, pursuing

planetary exploration, or pursuing additional

military activities in space will increase the

demand for launch services.

Space policy–Encouraging or subsidizing

commercial activities such as remote sensing or materials processing in space could

increase demand.

Space technology-Satellites with longer lives

could reduce the need for new satellite

launches; new technologies such as DBS

may increase the demand for new launches.

Terrestrial technologies–Use of fiber optics

may reduce the demand for communication

satellites; technologies such as genetic engineering might reduce the desirability of conducting biological and materials research in

space. ——-.

dTWhite House piess release, May 16, 1983.

qaThe question of whether or not NASA should be competing

for commercial launches is discussed in the policy options.

Photo credit: Nat/onal Aeronautics and Space Administration

Artist’s depiction of a Shuttle paying a visit to a Space

Operations Center (SOC) in Earth orbit.

The results of the Rockwell International (fig.

5-4) and the Battelle (fig. 5-5) assessments of future launcher demand are presented below to illustrate the connection between the demand for

launch vehicles and U.S. space policy .49 OTA has

not conducted an independent appraisal of either of these studies; and therefore offers no opinion as to their validity. They are included here

to provide a rough quantitative dimension to this

discussion.so

● Result 1: If the Shuttle fleet can provide 24

flights per year and the Ariane 10 flights per

year, and the Rockwell projection of total demand is correct or low, then by 1988 additional launch capacity will be needed. This

could be supplied by U.S. commercial or foreign ELVS or additional orbiters.

———.—— dqsee also: projection of Non-Federal Demand for Space Transportation Services Through 2(X)(): An AlAA Assessment for the Office of Science and Technology Po/icy of the White House, American Institute of Aeronautics and Astronautics, jan. 19, 1981; Systems

Analysis of National Space Launch Possibilities, The Aerospace

Corp., March 1983; “United States Commercial Expendable Launch

Vehicles, ” General Dynamics, 1982; Assessment of Constraints on

Space Shutt/e Launch Rates, National Research Council, Committee on NASA Scientific and Technological Program Reviews, April

1983.

SoThese analyses are based on the Shuttle reaching 24 flights Per

year and Ariane reaching 10 flights per year, assumptions that remain to be proven by experience. Some analysts doubt that NASA

will be able to reach that level of flights before 1990.
Ch. 5—Space Transportation . 127

Figure 5-4.-Projection of Future Space Shuttle Demand Rockwell International

50

48 —

46 —

44 “ Total demand)

42 — + estimated # of

40 — reflights

38 —

36 —

34 —

32 “

30 —

% 28 al h

z

26 —

a

u) 24

z 22

p

ii 20

18 — (DOD demand)

16 —

14 — ~ (NASA demand)

12 —

10 — (Aerospace Corp. DOD estimates)

8 —

6

4

2

0

1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994

Years

Rockwell International’s Projection O( Future Space Slrurtla TraVic Demand, (July 1963).

Time period: 1963-1994 (shown here 1964-1994).

Scope: All NASA, DOD, commercial and foreign (non-Soviet) space transportation demand.

Key assurrrptiorrs: ● Payloads booked on U.S. ELVS would fly on them

● Payloads for Japan and China would fly on their own national vehicles unless specifically

booked elsewhere

● The Ariane will fly full. (5 launch 19S4-5; 10 launches 1986-1994)

● Model includes funded, extensions or followans and potential new missions.

“Equlva/ent Shutt/e flights:” All payloads characterized in terms of equivalent Shuttle payloads.

● Result 2: Starting with the assumptions listed

in Result 1, if the Rockwell projection for

DOD demand is overstated (as has been suggested by an Aerospace Corp. study),5t

and/or, some DOD payloads continue to fly

on ELVS, then the Shuttle and Ariane could

probably meet the total launch demand

through 1994.

● Result 3: If the Rockwell and Battelle estimates of non-NASA, non-DOD demand are

accurate, but Rockwell’s NASA and DOD estimates are both overstated, then the Shuttle and Ariane will create a surplus of launch

capacity through 1994. Neither U.S. com51sY~t~~~ AnajySl~ of National Space Launch possibilities, op. cit.

mercial nor other foreign ELVS would be necessary to satisfy total launch demand,

If the demand for launch services were unlimited the United States would be well-advised to

pursue a policy of encouraging both Shuttle use

and the commercialization of ELVS. With the demand for launch services uncertain, the questions

become more complex. Should the Shuttle be allowed to compete with private firms for a limited

number of commercial launches? If the demand

for launch services exceeds the Shuttle’s capacity, should additional orbiters be purchased, or

should ELVS be used to fill the gap? If the Shuttle

fleet is diminished by a catastrophic accident or

unforeseen technical problems, how is the de-
- - . . — - -

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

20

15

10

5

0

1985 1988 1987 1988 1989 1990 1991 1992 1993 1994

Years

Battelle’s Outside users Payload Model (June 19S3).

Time period: 19S3-199S (shown here 19S4-1904).

Scope: All known non-NASA, non-DOD reimbursable payloads scheduled to be flown by non-soviet-bloc countries.

Key assumptions: ● Shuttle and Arlane successful and price competitive

● U.S. commercial ELVS not considered

● Space station not conaldered

● No revolutionary technical, economic or social developments

“E@va/errt Shuttle Fllglrts:” All payloads characterized in terms of equivalent Shuttle payloads.

mand for launch services to be met? In the long

run, will private ELVs or the Shuttle prove to be

the more cost-effective way to meet the additional

demand? Unless additional orbiters or ELVs are

ordered, will the production lines for either remain open? Given the U.S. Government’s commitment to the space station and other space

goals, is cost effectiveness an important shortterm consideration?

The primary focus of this study is international

competition and cooperation; therefore, many

of these questions are beyond the scope of this

report. Those that pertain directly to international

competition are discussed in greater detail in the

policy options that follow.

Nature of Competition

Although there are a number of potential entrants, current competition in space transportation is predominantly between the U.S. Government-supported Shuttle and the European

government-supported Ariane.52 The Shuttle and

Ariane are competing primarily for the launch of

large geosynchronous communication satellites.

A recent study conducted for NASA estimated

that from 1983 to 1998 there will be between 103

and 163 non-NASA, non-DOD payloads for which

NASA and Arianespace are in direct competiCompetitionn between U.S. upper stage manufacturers is to a

great extent dependent on, and subsidiary to, the Shuttle successfully competing with other launch vehicles.
Ch. 5—Space Transportation 129

tion.53 (See figs. 5-6 and 5-7.) Of this number, the

study estimated that between 29 and 72 payloads

would go to Arianespace. 54 That is a loss of between one and two dedicated Shuttle flights per

year over a period of 15 years.

The primary advantages of the Shuttle are that

it is manned, reusable, and able to retrieve and

deploy large objects in low-Earth-orbit. Normally,

none of these advantages is important when communication satellites are launched to geosynchronous orbit. * Its primary disadvantages are that

schedules have slipped about 1s percent each

year, raising questions of reliability and planning,

and that documentation and integration are more

complex and expensive than those of Ariane.

—— — .— SJOutsjde users payload Model, op. cit.

J41n 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

into an anomalous orbit. An example was the recent retrieval of

the Westar and Palapa spacecraft after their PAM-D stages failed.

See “Astronauts Deploy, Retrieve Satellites, ” Aviation Week and

Space Technology, Nov. 26, 1984, pp. 20-23.

These particular disadvantages are quite important to commercial launch customers. As a result, the Ariane launch vehicle, which is less sophisticated than the Shuttle, is capable of

competing with the Shuttle for payloads. (In addition, Ariane competes well with the Shuttle on

the basis of price.) For the same reasons, private

U.S. ELVs, which are technically comparable to

Ariane, can also compete with the Shuttle.

The technical comparability of the Shuttle and

Ariane with respect to launching communication

satellites has focused competition primarily on

launch price and financing.55

Current pricing policies have occasioned complaints of unfair competition on both sides of the

Atlantic and generated considerable unrest

among private U.S. ELV manufacturers. In a state-

...—

Ssshoukf a U.S. commitment to a space Stati On or an increase

in military space activities reduce the number of commercial Shuttle

flights, or should a catastrophic failure reduce or ground the Shuttle fleet, availability would become a more important factor than

price or financing.

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

N

147

\

Misc. ELV 6.0

3.6

435 payloads 104 equivalent Shuttle flights

Assumes 75°\0 average Shuttle load factor

SOURCE: Outside Users Payload Model Battelle Columbus Laboratories (NASA contract NASW-336), June 1963.
. . . -- — -- - -- 

130 . International Cooperation and Competition in Civilian Space Activities

Nominal

Split:

STS-357

Figure 5“7.–High Model Market Share by Launch Vehicle

STS

81.6

Ariane 99

Misc.

~y ELV 1

75 Japanese

ELV

67

Ariane-171

— 35 Nominal

Split:

STS-1 12.4

+

NASA ELV 5.6

Ariane-48.8 Japanese ELV

7.9

705 payloads 187 equivalent Shuttle flights

Assumes 75?40 average Shuttle load factor

SOURCE: Outside Users Payload Model Battelle Columbus Laboratories (NASA

ment before the Senate Commerce Committee,

NASA Administrator James Beggs cautioned:56

The French are pricing their service very, very

competitively. As a matter of fact, they have set

the price very close to Shuttle-type pricing. They

are, without any question, subsidizing that, because their costs are not down. With respect to

the cost per launch and the financial terms

. . . they are more than competitive with us

. . (T)hey are formidable competition, and we

are not taking them lightly.

The Europeans take exception to suggestions that

the Ariane is unfairly being subsidized. Frederic

D’Allest, President of Arianespace, testified before

a

—

Senate subcommittee:57

There is no transfer of money between Arianespace and ESA and the other European organizations other than the payments due to Arianespace within the framework of the launch

services contracts . . .

sqqAsA Authorization for Fiscal Year 1983: Hearings before the

Subcommittee on Science, Technology, and Space of the Senate

Committee on Commerce, Science, and Transportation, 97th Cong.,

2d sess,, February 1982, Statement of Hon. james A. Beggs, p. 41.

STlbid,, p. 170, statement of Frederic D’Allest.

contract NASW-338), June 19S3.

When establishing Arianespace, we succeeded in convincing ESA and its member States

that the STS (Space Transportation System) pricing policy during the first 3 years of its operations involved a huge subsidy, thus creating an

unfair competition. In response, it was agreed

that for the European payloads launched before

mid-1 986, the standard price negotiated with

ESA . . . would include a 25-percent extra

charge to support the company.

We consider, and hope you will consider, that

these practices are not very sound, as they

charge the research and development programs

on both sides of the Atlantic, instead of charging the users who reportedly look to gain great

financial profit from their commercial applications.

As long as the STS production and operation

costs do not reflect realistically the STS pricing

policy, we shall claim some support through the

European payloads launch prices, to ESA and its

member States.

The principal complaint of the Europeans has

been that the Shuttle price–unlike the price

charged for U.S. expendable vehicles, which was

based on the recovery of “all reasonable

costs’ ’–bears little relationship to the cost of
Ch. 5—Space Transportation ● 131

operating the Shuttle. The price currently charged

by NASA for a Shuttle launch was developed in

1975 and was designed, in part, “to effect early

transition from expendable launch vehicles. 58

At the time, NASA felt that Shuttle costs would

fall as they gained more experience with the system and the flight rate increased. It was assumed

that there would be a tendency among users to

delay Shuttle use in order to take advantage of

the lower prices in later years. 59

In order to overcome this tendency, NASA

based the Shuttle price on the estimated 12-year

average cost of the program. As a result, cost of

launching a Delta-class payload to geosynchronous orbit on the Shuttle was about one-half of

what it would have cost to use an expendable

Delta.60 The initial price for a dedicated Shuttle

bay was $18 million in 1975 dollars or about $40

million in 1984 dollars. 61 Although exact, per

flight, Shuttle costs (recurring costs per flight,

refurbishment, support facilities, and personnel)

are difficult to calculate, it has been estimated

that each of the five Shuttle flights in 1983 cost

$375 milliono

b2

In 1981-82, when NASA began to reassess its

pricing policy, several U.S. customers had already

switched from the Shuttle to Ariane. NASA felt

that a pricing policy based on current Shuttle

costs would lead to “an unacceptable commercial and foreign users price. 63 NASA does plan

to raise the price for a dedicated Shuttle launch

in 1985 to $38 million 1975 dollars (about $80

million in 1984 dollars). President Reagan’s policy statement of May 16, 1983, declared that after

1988 NASA should charge a “full cost recovery”

price

64. If prices continue to fall as experiencxe is

gained with Shuttle operations, the 1988 price

could still be as high as $100 million to $150 million in 1984 dollars.

SEC. M. Lee and B. Stone, “STS Pricing Policy,” AIAA Space SyStems Conference, Oct. 18-20, 1982,, Washington, DC, p. 1.

Sglbid., p. 2.

601bid.

s] Based on an escalation rate of 2.192 from 1975 to 1984. Note

that this is the price for a “dedicated payload bay”; a Delta-class

satellite would only take up about 25 percent of the bay, and therefore the price to launch this payload would be about 25 percent

of the “dedicated payload bay” price.

bzjames Abrahamson, testimony before the Subcommittee on

Space Science and Technology, February/March 1984, p. 584.

sqLee and Stone, Op. Cit.

WA/hite House Press Release, May 16, 1983.

As described above in Frederic D’Allest’s statement, the ESA nations also felt that the early success of Ariane could not be assured if the price

were based entirely on launch costs. An Organization for Economic Cooperation and Development (OECD) study has estimated that the Ariane

is priced at about two-thirds of its cost.bs The commercial Ariane price is approximately $54 million,

or $25 million to $30 million per customer for

dual launch. This is purportedly a temporary promotional price to be followed by a “more normal cost coverage basis. ” ESA States pay a 25 percent additional charge to support the Ariane

program.

Price competition between Shuttle and Ariane

has made it difficult for private sector ELVS to enter the market. In an attempt to alter the current

situation, Transpace Carriers, Inc., seller of the

commercial Delta launch vehicle, filed a complaint with the Office of the U.S. Trade Representative charging that Aria nespace was engaged

in predatory pricing. The complaint, filed under

Section 301 of the U.S. Trade Act of 1974, stated

that Arianespace charged prices to U.S. firms that

were 25 to 33 percent lower than those charged

to ESA members, and that as a result of this practice TCI had lost sales to Arianespace.bb

In its petition, TCI asked that the President seek

the immediate discontinuance of the two-tiered

pricing policy; the elimination of the cost-free or

below-cost support in facilities, services, and personnel; and the subsidization of mission insurance rates. Pending the cessation of these practices, the complaint requested the President to

retaliate by prohibiting Arianespace from advertising and marketing its services in the United

States and by imposing economic sanctions against

the goods and services of the Member States of

ESA.

b50EcD, Trade in High-Technology Products, The Space Products Industry, Paris, 1985.

bbsee “U.S. Space Launch Services Company Brings Unprecedented Complaint Against Europeans,” U.S. Import Week/y, vol.

9, June 6, 1984, p. 1088. The complaint stated:

As a beneficiary of such subsidy practices Arianespace has been

able to offer launch services to U.S. companies and third country

customers at rates which are substantially less than those ctrarged

to Member States of ESA and substantially below those prices that

Arianespace would be able to charge in the absence of subsidization. This unfair competitive advantage has resulted in lost sales to

petitioner and price suppression, if not depression, of bid prices. Furthermore, it poses a serious threat to the establishment of a United

States commercial launch services industry.
. . . . . . . . .

132 ● International Cooperation and Competition in Civilian Space Activities

Responding to the TCI complaint, Erik Quistgaard, ESA Director General, announced that his

agency was willing to talk to the U.S. Government in an attempt to “create conditions for

healthy competition“ in launch services.67

To summarize, the price for an Ariane launch

has been set so as to compete effectively with the

Shuttle. The ESA nations, in order to assist in this

goal, pay more for a flight than would the purchaser of a commercial launch.

The Shuttle price rests heavily on the following reasoning. First, in the absence of commercial payloads the Shuttle would fly anyway. As

a consequence, NASA charges customers only

for the amount that their payload adds to the cost

of flying all Government payloads for a given period and not for a portion of the total cost of an

individual flight. Second, the cost of flying the

Shuttle will decrease substantially as experience

is gained. By spreading the average cost over a

number of years and projecting a rapid decline

in Shuttle launch prices, the near-term average

cost can be kept low. As a result of current NASA/

ESA price competition, launch service purchasers

(largely satellite communication service providers) are benefiting—at least in the early years of

Shuttle operations–from substantial government

subsidies for each launch.

Given the commitment of the United States and

the European nations to the success of their respective vehicles, these pricing structures are

defensible; they do, however, raise substantial

67’’ESA Replies to Charges on Arianespace Pricing,” Aviation

Week and Space Technology, July 2, 1984, pp. 22-23.

barriers to the commercial success of any private

ELVS. Assuming a 65,000-pound capacity and an

$80 million (1984 dollars) price per launch, the

Shuttle can place a Delta-class payload into

Iow-Earth-orbit for about $1,200 per pound.

However, because the full payload capacity is

rarely used and in order to reach geosynchronous

orbit communication satellites require the additional weight of upper stages and cradle structures, the Shuttle cost of placing a payload into

orbit is about $10,000 to $20,000 per pound depending on the upper stage (see table 5-2). This

is compared to the approximate per pound cost

of a Delta ($24,000), an Atlas-Centaur ($25,000),

or the Ariane 3 ($20,000).

At current prices, the Shuttle is less expensive

than any of the ELV alternatives; however, this

advantage will be lost as Shuttle prices increase.

At $125 million per dedicated launch, the Shuttle is competitive though not preferable to the

ELVS; at $150 million per launch the Shuttle

ceases to be financially attractive for payloads not

requiring human interaction. 68

NASA has expressed concern that it cannot effectively compete with the Ariane because of the

favorable financing that Arianespace has been

Gaprjces given here are approximations, supplied tO illustrate the

Shuttle’s competitive position vis-a-vis ELVS. Such estimates do not

reflect the dynamic nature of the launch vehicle industry. NASA

maintains that Shuttle prices will fall substantially as experience is

gained. It is also possible that less expensive upper stages or orbital transfer vehicles will be developed, thereby reducing the cost

to geostationary orbit. Both General Dynamics (Atlas-Centaur) and

Transpace Carriers Inc. (Delta) have stated that commercial competition and private sector efficiencies will reduce the cost of ELV

launches.

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

ELVS Shuttle

Maximum Maximum

payload Cost/ib payload Cost/lb to GEO

Vehicie (lb to GEO) to GEO Vehicle (lb to GEO) $83M price $125M price $150M price

Deita. . . . . . . . . . . . . . . . . . . . 1,350 24,000 PAM-D . . . . . . . 1,350 17,000 24,000 28,000

Atias-Centaur . . . . . . . . . . . . 2,600 25,000a PAM-DII . . . . . . 2,000 17,000 23,000 27,000

Ariane 3 . . . . . . . . . . . . . . . . . 2,700 20,000 a PAM-A . . . . . . . 2,200 17,000 24,000 28,000

Titan 34 D/lUS , . . . . . . . . . . . 5,000 31,000 Shuttie/lUS . . . 5,000 30,000 38,000 43,000

Titan 34 D/TOSb

. . . . . . . . . . . 6,400 17,000 Shuttie ~OS. . . 6,800 14,000 19,000 22,000

Ariane 4 . . . . . . . . . . . . . . . . . 4,500 19,000 Shuttle/Centaur . 14,000 9,000 12,000 14,000

eOTA figures.

%ransfer Orbit Stage.

SOURCE: M. C. Simon and O. Steinbroun, “The Economics of Space Development,” General Dynamics, Convair Division, October 1983, p. 3.
Ch. 5—Space Transportation ● 133

able to offer its customers. The Ariane payment

schedule requires that a company pay 20 percent

of the cost 30 months prior to launch; the balance is spread over 5 years at low interest rates

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 financing would be at market rates.

Although NASA cannot provide financing and

requires that the entire cost be paid prior to

launch, it can, with the help of the U.S. ExportImport Bank (Ex-lm), offer financing similar to that

of Arianespace in foreign, non-EEC (European

Economic Community) countries.70 Recently, the

Ex-lm Bank agreed to guarantee 85 percent of

costs to be incurred by Mexico for a Shuttle

launch; this allowed the Private Export Funding

Corp. (PEFCO) to provide the funding for this

691n one example, 64 percent of the subsidized debt was at 9.5

percent (from Compagnie Francaise d’Assurance Pour Le Commerce Exterieur) and the remaining 16 percent was at 10.5 percent; this resulted in a blended subsidized rate of 9.75 percent.

See NASA Advisory Council 5tudy of Effective Shuttle Utilization,

Nov. 17, 1983, p. 30.

‘oIbid., p. 30.

Table 5-3.—NASA vs. Arianespace Financing (1982 $M)

(FY 1982-85 pricing)

NASA’s STS Ariane

Total launch price:

SBS ... ... ... ... ... .. $12.65 $22.0

iNTELSAT ... ... ... .. $28.34 $39.6

Prelaunch payments required (S6S example):

36 months ... ... ... ..$ 0.1

33 months . . . . . . . . . . . 1.25 (l O”/o)

27 months . . . . . . . . . . . 1.25 (lt) O\o) $4.4 (20°/0) due 30

months prior to

launch

21 months . . . . . . . . . . . 2.13 (17°/0)

15 months . . . . . . . . . . . 2.13 (17°/0)

9 months . . . . . . . . . . . 2.9 (230/. )

3 months . . . . . . . . . . . 2.9 (23Yo)

$12.65 (lOOO

/o)

Postlaunch payments—none 80°/0 balance—

payments begin

6 months after

launch, spread

over 5 years at

5-100/0 interest

SOURCE D. A Bletsos, The Current Status and future Out/ook of Foreign Space

Transportation Programs, Rockwell International Shuttle Orb!ter

Division

-3 -2 -1 0 1 2 3 4 5

Launch

. Arianespace gets paid up front

● Financing by FrenchlGerman banks

● Rates negotiable (typically 9-10°/0)

. Payback out of revenues —starts 6 months after launch

transaction. 71 Similar NASA/Ex-lm packages have

been proposed for Australian and Colombian

payloads. A recent report by the NASA Advisory

Council stated:72

In virtually all cases the difference between

Shuttle and Arianespace rates and terms were

not significant. Except for the loss of a Brazilian

launch due to a development loan and offsets,

NASA has not lost any launch business due to

more competitive financing. Based on recent discussions with senior officers of the Ex-lm Bank,

there is every indication that the Ex-lm will be

responsive to export financing for non-EEC countries, particularly when there is competitive European export financing involved (emphasis added).

When dealing with EEC countries, neither NASA

nor Arianespace can employ subsidized financing. EEC export agencies will not provide subsidized financing to other EEC members, and, in

the absence of such subsidized financing, the ExIm bank will not become involved. In any case,

since European nations will almost certainly

choose to support the Ariane program, there will

probably be no significant number of Shuttle sales

to EEC countries.73

71 pEFCO is owned by 52 U.S. banks and manufacturers. Its function is to provide funding against Ex-lm-guaranteed paper. Its rates

are essentially the prevailing market rate for U.S. Government-guaranteed obligations plus a commitment fee and arrangement fee.

P.?lbid .

Tjspecial Circumstances may make possible a limited number of

sales of Shuttle services to EEC members. For example, British Skynet

military satellite will fly on the Shuttle in 1986.
———— — — -- - . -- - — -- - - - -

134 “ International Cooperation and Competition in Civilian Space Activities

Arianespace has its strongest potential advantage in U.S. domestic markets. Here, it can provide 80 percent financing at a subsidized rate

(currently 12.4 percent), and the Ex-lm Bank will

not step in because the customers are U.S. nationals. In examining this issue, the NAC report

acknowledged that it was a potential problem,

but noted that:

. . . Arianespace financing up to this point did

not present a big enough discount off the advertised Arianespace price to affect significantly and

adversely NASA’s marketing of the shuttle.

However, this could become a serious competitive disadvantage in the future if prices

equalized. ’4

In summation, current international launch

vehicle competition has been between government-supported vehicles and has focused almost

exclusively on price. To date, sales have been

sought to ensure maximum use of the Ariane and

the Shuttle and there has been little opportunity

for profit taking.75 In this environment, the successful entry of commercial, nongovernmentsupported launch vehicles seems unlikely.

Effects of Competition

Foreign launch vehicles can reduce the demand for U.S. Government and private sector

launch vehicles in two important ways: 1) by flying their own and regional payloads, and 2) by

marketing their services internationally. Reductions in demand caused by the former will be difficult, if not impossible, to offset by altering present U.S. practices or policies. Other governments willing to expend the human and economic resources to develop their own launch capabilities can, of course, work toward satisfying all

of their indigenous launch needs and may capture some portion of the overall world demand

for space transportation services. However, the

resulting losses to the United States are likely to

be small, because the vast majority of nations will

continue to be launch service consumers rather

than producers.

741bido

zsArianeSpaCe claims that in 1985 it made a profit on its commercial launch activities. See Space Commerce Bulletin, vol. 11, No.

1, Ian. 18, 1985, p. 3.

There is substantial difference of opinion regarding the effect that the marketing of foreign

launch systems may have on U.S. space transportation services. Under these circumstances,

perhaps the most useful approach is to lay out

possible effects that international competition in

space transportation may have, with a view to

setting boundary conditions for an appropriate

policy response. Possible effects are:

. Reduced demand for the Shuttle: A substantial reduction in demand would occur only

if an international provider were to offer

equivalent services to users at significantly

lower prices. Now it is already the case that

the prices charged to users do not recover

the Shuttle’s operating and maintenance

(O&M) costs, and Rockwell International, the

manufacturer of the Shuttle, has argued that,

with only four orbiters and a low annual

flight rate, these costs probably cannot be

significantly reduced (fig. 5-9).76 With Shuttle prices set to rise over the next few years

in order to more closely approximate average operating costs, there is every likelihood

that international providers may capture an

increasing share of the market for users

whose spacecraft do not require hum.. intervention in orbit. However, this result, in

itself, is not a simple economic negative, for

the prices charged for an all-commercial

flight do not recoup the costs of making the

flight.

With these new facts in view, the Office

of Management and Budget (OMB) has

stated that the Shuttle’s primary goal is to

meet U.S. Government needs, not those of

foreign governments or the private sector.

Therefore, the price charged to non-U.S.

Government users should reflect the true

“additive costs” of flying them on the Shuttle and should serve to “minimize the overall cost to the Federal Government of meeting its own needs.’’” In a letter to NASA

Ts’’Economic Comparison: Shuttle-only Fleet vs. Shuttle/Commercial ELV Mixed Fleet, ” Rockwell International Space Transportation & Systems Group, May 17, 1983.

zzLetter from David A. Stockman, Director, OMB, to James M.

Beggs, NASA Administrator, june 14, 1982; See also C. Covault,

“Shuttle Fund Policy Stirs Concern at NASA,” Aviation Week and

Space Technology, Oct. 18, 1982.
Ch. 5—Space Transportation . 135

Figure 5-9.— Rockwell International Estimates

That the Shuttle is Most Economical Over ELVS

at High-Volume Operations

260

240

220

200

8 0

60

40

20

0

19831984198519861987 19881989199019911992 19931994

Fiscal Year

(Shuttle cost data from NASA independent assessment, April 1982)

SOURCE: “Economic Comparison: Shuttle-Only Fleet vs ShuttlelCommercial

ELV Mixed Fleet,” Rockwell International Space Transportation and

Systems Group, May 17, 1983.

Administrator James M. Beggs, OMB Director David Stockman stated :78

. . . (T)he appropriate price for excess Shuttle launch capacity after 1985 would appear

to be one that:

●

●

●

Is the highest price at which sufficient

users will be available to utilize the excess

capacity of the Shuttle system after USG

[U.S. Government] user needs are met.

At least covers the additive costs of the

USG to operate the Shuttle system for nonU.S. Government users.

Does not in itself lead to the demand for

funding of additional capacity by the USG

(e.g., additional orbiters, ground support

systems).

According to OMB’S view, a reduction in

non-U.S. Government demand for Shuttle

●

services resulting from foreign competition

would require no policy change. Indeed, the

Stockman letter implies that if Shuttle launch

costs were to rise as a result of a reduction

in demand, then the price charged to nonU.S. Government users should also be increased.

On the other hand, it should be pointed

out that such a price increase might lead to

a further reduction in demand, thus setting

up a vicious cycle. In economic terms, this

result might make sense, but there is a political price to be paid, namely that the commercial market may come to see the Shuttle as vehicle of last resort, rather than

vehicle of choice. [n that case, the Shuttle

might be perceived as increasingly irrelevant

to the commercial development of space.

Loss of revenue: A 1982 NASA report stated

that: “The present projection of capital lost

to Ariane is estimated to be approximately

$3 billion total through 1984, if every compatible U.S. customer used Ariane.”79 There

is considerable question as to the significance of this finding. It should be noted that

this is a potential loss of income, not a real

loss to NASA, since none of the “out-ofpocket” costs associated with each additional commercial flight would be incurred.

Therefore, the actual “loss” to NASA would

be limited to the amount of “revenue” which

would have been derived from each Shuttle launch and the potential costs of a lessthan-optimal use of the Shuttle fleet. Since

the cost of an additional Shuttle flight still exceeds the revenue produced by that flight,

the marginal value of additional flights is

debatable. In addition, there is no reason to

believe that Ariane will capture “every compatible customer.” Current Shuttle manifests

do not reflect an exodus to Ariane; it will

probably be the early 1990s before Arianespace can handle more than 10 flights per

year. Therefore loss of revenue does not

seem to be a major problem requiring immediate policy attention.

781 bid . TgAna/ySjS of Policy Issues, NASA, August 1982, P. 78
136 . International Cooperation and Competition in Civilian Space Activities

●

●

Loss of technological leadership: A recent National Academy of Public Administration report warned that the loss of U.S. leadership

in space technology “would be felt acutely

on the economic front. 80 The report compared space to the electronics and communications fields where the United States once

held a dominant position and cautioned that

foreign competitors have “increased their

public expenditures for space programs in

recognition of the benefits of such endeavors

to the strengthening of their national economies.” Broadly taken, this is sound advice.

However, with specific reference to space

transportation it loses some of its urgency.

The Shuttle is, and will be for some time, the

most sophisticated and capable space vehicle flying. Ariane, Shuttle’s main competitor,

challenges the Shuttle in only one important

area—the placement of satellites into geostationary orbit.

Loss of prestige: The perception that the

United States is first among space powers is

an important advantage, albeit difficult to define. The United States has had enormous

influence on the international application of

space technology. This is particularly true

with regard to satellite communications and

remote sensing, where the United States not

only developed most of the technology but

also played a major role in establishing the

institutions by which it was shared.

Some diminution of the world’s regard for

U.S. technological prowess is certain to occur as alternatives to U.S. launch vehicles

begin to appear. However, the United States

may offset such changes by taking a leadership role in defining the organizational structure of the future space transportation industry. Major questions regarding the roles that

governments and the private sector will play

in this industry, the need for international

regulation, and the usefulness of competition have yet to be answered. Space transportation is an infant industry; the United

States, as its most important actor, still exerts considerable influence. It is appropriate

that the United States exercise its leadership

to ensure that this industry matures in a man-

~Encourag;ng Business Ventures in Space Technologies, National

Academy of Public Administration, May 1983, p. 6.

●

●

ner consistent with long-term U.S. trade objectives.

Hindrance of private sector entry: The current Shuttle pricing policy, not foreign competition, is the most important barrier to U.S.

private sector entry. Though the private

firms–using current ELVs–should be able

to compete on technical grounds with Government-backed launch services, they are

not now financially competitive. Although

the price for a Shuttle launch will be raised

by NASA in 1985 and probably again in

1988, private operators may not be able to

keep current ELV production lines open.

Should the Air Force decide to purchase private launch vehicles to complement the

Shuttle, the chosen company would be in

a good position for successful “commercial”

operation. Firms such as Starstruck and SS1,

which do not compete for the same class of

payloads as Ariane and the Shuttle, may not

be affected by Government pricing policies.81

Secondary effects (e.g., loss of satellite sales,

etc.): Although foreign competition may not

cause serious disruption of the Shuttle program, it may have indirect effects on other

U.S. industries. A 1982 NASA policy report

cautioned:82

The loss of launch operations to foreign

competition can have important secondary

effects. Foreign candidates for launch services

are candidates for U.S. development of their

satellite and of any related ground stations.

When the direct effects are totaled, the estimate of the direct losses to the U.S. economy is very close to $4 billion over (a 12-year

period).

Although it is possible that Arianespace,

or some other foreign organization, might

eventually offer an attractive “package deal”

including both satellite and launch vehicle,

current buying practices do not indicate a

cause for concern. Recent examples of satellite double-booking on both the Shuttle

and Ariane and the successful entry of Japan

into the ground station market indicate that

price and product quality remain the primary

concern of the buyer.

al It 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

could afford to charge.

ezAna/ysis of Po/icy /ssues, op. cit.
Ch, 5—Space Transportation ● 137

COOPERATION IN SPACE TRANSPORTATION

In the heyday of the Apollo program, President

Nixon in 1968 impaneled a Space Task Group

to develop future goals for the U.S. space program, One of the recommendations of the Space

Task Group (STG) was that the United States:83

(U)se (its) space capability not only to extend

the benefits of space to the rest of the world, but

also to increase direct participation by the world

community in both manned and unmanned exploration and use of space.

More specifically, the STG advocated a national

commitment to what would eventually become

the Space Shuttle.84 As conceived by the STG,

the Shuttle program would be an international

cooperative effort with possible European design

and construction of major subsystems. In 1970

and 1971, NASA discussed the possibility of a

European contribution to a variety of cooperative ventures including the space transportation

system. While Shuttle design options were proliferating and tradeoffs were being made internally among NASA, OMB, and Congress, NASA

tried to include the Europeans in the program.

However, in view of the difficulty of resolving

emerging conflicts within U.S. agencies, simultaneous negotiations with a multinational European group seemed out of the question.

To prevent the total exclusion of the Europeans

from Shuttle activities, NASA suggested that they

might develop the “space tug.” This potential

role was the subject of extensive discussions lasting almost 2 years. As the final design approach

to the Shuttle became fixed in the spring and

summer of 1972, the role of DOD in supporting

Shuttle development became more important.

When the Space Task Group had identified the

Shuttle as the next major technological develop83’’ The Post-Apollo Space Program: Directions for the Future, ”

Space Task Group Report to the President, September 1969, p. 10.

BAThe ‘{space shuttle” endorsed by the STG was a concept rather

than a specific design. It was merely one part of a set of space activities which included a space station, an integrated transportation

system and a vigorous program of advanced technology development. The integrated transportation system included the basic shuttle, an orbital transfer vehicle, and a reusable nuclear stage for larger,

manned systems and for follow-on lunar or planetary missions. All

of these systems were to satisfy three basic characteristics— ’’cornmonality, reusability, and economy. ”

ment in space, DOD had not been an enthusiastic supporter. It was only with the aid of policy guidance from the President (i. e., that the

Shuttle was a “national” system that would serve

both DOD and civilian payloads) that DOD requirements were brought into the design process. Although NASA had primary responsibility

for Shuttle development, the President decided

that for political and economic reasons visible

DOD interest and contribution to the Shuttle

would be desirable.

DOD involvement in Shuttle design resulted in

a further reduction of the European role. Some

DOD missions would require the addition of an

upper stage to place payloads into their desired

orbits. The European space tug was originally intended to serve this function. But, because of the

sensitive nature of certain of these payloads,

DOD decided to take responsibility for the upper stage development. As a result, the United

States discouraged European development of a

tug and urged them to redirect their efforts

toward what was to become the Spacelab.

Thus, in 2 years, the United States went from

its initial encouragement of substantial international cooperation in space transportation system

development to a position in which only payloads

were being discussed. This change in position left

segments of the European space community suspicious of U.S. intentions and disturbed by its

peremptory behavior.

Against this background, future cooperative activities in space transportation must overcome

major economic and political hurdles. First, the

military security sensitivities which prevented the

Europeans from building the space tug still exist

and would presumably inhibit other types of

cooperation. Second, both Europe and Japan

foresee possible constraints on their full development of competitive commercial spacecraft

and services (e.g., communication and remotesensing satellites) if they do not also have control of an independent launch capability for such

spacecraft. Both Europe and Japan have active

aerospace industries increasingly capable of competing in the world markets. Finally, the Europeans are particularly sensitive to the prospect
. . . . . . . . .

138 . International Cooperation and Competition in Civilian Space Activities

that any cooperative launching enterprise with

the United States would depend on budget support that cannot be guaranteed.

The ability to reduce costs significantly is one

reason why nations might wish to cooperate on

the development and/or operation of launch vehicles. It is expensive to develop and maintain

an efficient, low-failure-rate launching service to

geostationary orbit. Subsidized and inefficient

launch vehicles may keep aerospace employment high and help to support production costs,

but are a drain on the economy.

Despite the pull of potential cost savings, the

future of cooperative space transportation research will be further limited if the private sector can successfully offer launch services. international cooperation would most certainly

involve government activities that would provide

competition to private firms. It is unlikely that the

United States will find reason to engage in international development programs in space transportation.

The U.S./Japanese agreements of 1969, 1975,

and 1980 provide a different example of international cooperation.85 Under these agreements

the United States allowed U.S. firms to provide

the Japanese Government—or firms working under contract to the Japanese Government–with

launch vehicle equipment and technology. Although the individual agreements differ slightly,

taken as a whole, Japan agreed: 1) to use the technology for peaceful purposes, 2) not to transfer

the technology to third countries, 3) to use the

technology exclusively for the launch of satellites

for the Japanese National Space Development

Agency, and 4) not to launch projects for third

countries. As a result of these agreements, U.S.

firms have played and will continue to play an

important role in Japanese launch vehicle technology (see table 5-4). This type of cooperation

might be used successfully as other nations begin

to develop indigenous launch vehicles.

‘sSee generally, “Space Cooperation: Agreement Between the

United States of America and Japan, ” july 31, 1969, T. I.A.S. 6735.

CURRENT POLICIES

As a corollary to the development of the Shuttle, NASA had planned to phase down and eventually terminate ELV programs; this plan was endorsed in the President’s July 4, 1982, policy

statement. 86 As a result of early Shuttle successes,

NASA declined to order new Delta or Atlas-Centaur vehicles after 1982. Early in 1983, the Department of Defense also announced that it was

stopping production of the Titan vehicle.*’

White House to develop a policy in support of

their efforts. On May 16, 1983, the Reagan Administration announced that “the U.S. Government fully endorses and will facilitate commercial operations of Expendable Launch Vehicles

(ELVS) by the U.S. private sector.” One of the

basic goals of the President’s ELV policy was to

“ensure a flexible and robust U.S. launch posture to maintain space transportation leadership.”

When it appeared that NASA and DOD would Although not cited as one of its major goals, the

President’s statement did observe that: “Each no longer fund ELV procurement, several private

firms expressed interest in providing this service commercial launch conducted in the United

States, rather than by foreign competitors, would on a commercial basis. They encouraged the strengthen our economy and improve our international balance of payments. ” SGwhite HOUSe FaCt Sheet: National Space POliCy, July 4, 1W2.

a~he DOD decision to launch all payloads on the Shuttle is be- The ELV policy further emphasized that the

ing reconsidered. The Air Force recently asked Congress to approve Shuttle is the “primary launch vehicle for the U.S. procurement of 10 upgraded Titan or Atlas-Centaur vehicles to be

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 ELVS are neces- be available for domestic and foreign commersary to provide “assured access to space. ” See: Aviation Week and

Space Technology: Mar. 5, 1984, p. 19; Apr. 16, 1984, p. 17; Apr. cial users. NASA has interpreted this to mean that

30, 1984, p. 25; Aerospace Daily, Mar. 23, 1984, p. 129; Defense the Government will not only take care of its own

Daily, Feb. 28, 1984, p. 317. needs, but also participate actively as a compet-
Ch. 5—Space Transportation ● 139

Table 5-4.—Companies That Contribute to Manufacturing Japanese Launch Vehicies

(U.S. corporations are given in parentheses)

Vehicle

Covered work N-1 N-11 H-1

Vehicle integration . . . . . . . . . . . . . . . . . . . . . . . MHI (M DC) MHI (MDC) MHI

First stage:

Airframe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . MHI (MDC) MHI (MDC) MHI (MDC)

Main engine . . . . . . . . . . . . . . . . . . . . . . . . . . . MH1/lHl (RIC) MH1/lHl(RIC) MHUIHI(RIC)

Vernier engine , ... , . . . . . . . . . . . . . . . . . . . . IHI (RIC) IHI (RIC) IHI (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) MH\N M

Motor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . NM(TC) NM(TC) NM

Satellite fairing . . . . . . . . . . . . . . . . . . . . . . . . . . MHI(MDC) MHI(MDC) MHI(MDC)

Onboard equipment:

Guidance and control equipment . . . . . . . . . NEC(HONEYWELL~ JAE,MHl MHI(MDC) JAE, NEC, MH~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 TechSystems Co. MPC: Mitsubishi Precision Co. Ltd.

HONEYWELL: Honeywell Inc. MSS: Mitsubishi Space Software Co. Ltd.

IHI: lshikawajlma-Harlma 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: Motoroia 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 means of technical assistance,

production licenses, or hardware supply.

SOURCE: National Space Development Agency.

itor in the overall launch market. The President’s

policy encourages “free market competition

among the various systems and concepts within

the U.S. private sector,” yet the policy fails to recognize that the Government-owned Shuttle is one

of the main competitors for private sector ELV activities. Therefore, “free market competition” between private ELV suppliers may be meaningless

if ELVs are noncompetitive vis-a-vis the Shuttle.

Notwithstanding its support for ELVS, the policy stated that the price for Shuttle flights “will

be maintained in accordance with the currently

established NASA pricing policies” through 1988.

After this time, “ . . . it is the U.S. Government’s

intent to establish a full cost recovery policy for

commercial and foreign STS flight operations. ”

If the price of a Shuttle launch were increased

before 1988 to reflect actual costs, including depreciation, current ELVs might have a better

chance of competing for a share of the commercial market. Such a price increase might be damaging to Shuttle-related commercial activities such

as privately developed upper stages and various

MPS-related activities.

his unclear what effect such an increase would

have on the demand for Ariane launches. It is

possible that an increase in Shuttle prices would

drive some customers to U.S. ELVs or to Ariane,

If, as has been suggested by some analysts, the

Ariane price was chosen to be competitive with

the Shuttle, an increase in Shuttle price might result in a like increase in the price of an Ariane.

In any case, since “full cost recovery” will not

be the Shuttle pricing policy until 1988, it is uncertain whether the Titan, Atlas-Centaur, and Delta launch vehicles will be able to sustain launch

activity to see them through to this time. Therefore, commercial U.S. ELVS may not be an important participant in the global competition for

launch services.
140 ● International Cooperation and Competition in Civilian Space Activities

FUTURE POLICY OPTIONS

The United States does not lack the “means”

by which to engage in successful private or government-supported international competition in

space transportation; what it lacks is a national

consensus concerning the “ends” of such competition. The development of foreign space transportation systems has caused considerable–and

often unwarranted—concern in the United States.

It is true that foreign competition will reduce the

demand for Shuttle launches and for private ELVs;

whether this requires an immediate policy response depends entirely on the constraints that

the Government imposes on NASA and the incentives it offers the private sector. The following discussion analyzes several different policy

options that have been proposed for the U.S.

space transportation system.

Option 1:

Use the Shuttle primarily for launching

Government payloads

Should the U.S. Government compete in the

international launch service market? The United

States could adopt the policy that the primary role

of the Shuttle is to launch U.S. Government payloads. Such a position might rest on the ideological conviction that, except in rare instances, the

Government should not undertake activities that

compete with the private sector. Alternatively,

since commercial payloads launched on the Shuttle involve some degree of Government subsidy,

such a policy might flow from a desire to reduce

the cost to the taxpayer of operating the space

program. OMB has indicated its support for such

a policy :88

Generally speaking, when circumstances justify the funding and management of an operational system by the U.S. Government that is also

sought by nongovernment entities, the U.S. Government should limit its role to making available

system capacities which exceed its own needs.

Under the OMB approach, NASA would not

regard itself as being in competition with foreign

or domestic launch services. To the extent that

BBStockman Letter, Op. cit.

excess capacity existed,

to minimize the overall

ernment of meeting its

it would be sold “so as

cost to the federal govown needs in the long

run.” The existence of foreign and private U.S.

vehicles would be important only insofar as they

affected the price at which this excess capacity

could be sold. OMB suggested that an appropriate price would be “the highest price at which

sufficient users will be available to utilize the excess capacity.” Limited competition from foreign

and private U.S. suppliers would allow NASA to

charge a high price for launch services; aggressive

competition would limit the price that NASA

could charge and still sell all of its excess capacity.

Under a policy of noncompetition, an increase

in Government launch activities could significantly reduce commercial Shuttle operations. For example, the decision to build a space station or

to increase military activities in space might limit

the space available on the Shuttle for commercial launches. OMB suggested that the Shuttle

price should not “in itself lead to the demand for

funding of additional capacity by the U.S. Government.” This would indicate that, with a very

limited capacity, NASA would discourage commercial Shuttle use by charging higher prices. The

OMB position does not consider the possibility

that an increased Shuttle flight rate might increase

efficiency and reduce costs for all users.

To summarize, a policy that restricted the Shuttle primarily to Government payloads would likely have the following results:

●

●

●

●

●

eliminate NASA as a major supplier of commercial launch services;

reduce the likelihood that additional orbiters

will be needed in this decade;

increase the likelihood that the U.S. private

sector could make an early and successful

entry into the launch service market;

potentially reduce the cost of operating the

overall Shuttle program by requiring fewer

flights; and

increase the demand for, and potential commercial success of, the Ariane launch

vehicle.
Ch. 5—Space Transportation ● 141

Option 2:

Capture a high percentage of commercial

launches with the Shuttle

This would appear to be the current U.S. policy. Two reasons are often stated for a strong U.S.

competitive posture: to maintain its leadership

role in the development and application of space

technology, and to ensure foreign technical and

financial support for future U.S. space activities.

In addition, being regarded as first among the

Free World space powers carries important international political and psychological advantages.

A recent NASA Advisory Council report on the

Shuttle found that:89

The overwhelming positive appeal of the Shuttle lies in current NASA pricing policy, designed

to make the Shuttle competitive to currently

available expendable boosters. Commercial success of STS hinges on continuation of this

margin.

In accordance with the Council’s report, a policy decision has been made to pursue international launch opportunities aggressively. This

decision entails a commitment to continue the

current practice of subsidizing the Shuttle’s commercial payloads, as well as a requirement that

greater attention be paid to Shuttle marketing.

The NASA Advisory Council report stated:

There was general agreement in the Task

Force that an intensive high level marketing effort on behalf of Shuttle utilization is warranted.

In this context, marketing means to develop and

implement a broad scale and long range plan

to involve increasing numbers of users in the exploration of the STS capabilities. It thus involves

market analysis, planning, advertising, customer

service, financing, and insurance, to name a few

areas. It must be a high level, strongly led effort,

with the active participation of NASA top management to the Administrator level.

The NASA Advisory Council report identified

“the emergence of increased competition” as

one of the primary reasons for pursuing a bold

marketing strategy.

a9’’Study of Effective Shuttle Utilization, ” report of the NASA Advisory Council Task Force, Nov. 17, 1983.

To summarize, current policy encouraging the

Shuttle to capture a high percentage of commercial launches, will likely have the following

results:

●

●

●

●

●

increase the demand for Shuttle services;

create a need for additional orbiters in this

decade;

potentially increase the cost of operating the

overall Shuttle program;90

decrease the likelihood that the U.S. private

sector could make an early and successful

entry into the launch services market; and

reduce the demand for, and the potential for

commercial success of, the Ariane launch

vehicle.

Option 3:

Encourage private launch activities

When the National Aeronautics and Space Act

was written in 1958, it was assumed that the Government would be the prime launch authority.

The NAS Act stated:91

The Congress further declares that such (aeronautical and space) activities shall be the responsibility of, and shall be directed by, a civilian agency (NASA) exercising control over aeronautical and space activities sponsored by the

United States.”

The NAS Act refers to the private sector as potential NASA contractors but does not mention

their independent participation in space activities.92 It may be assumed from the historic U.S.

dependence on a private sector economy that

expectations of private Iaunch services were implicit in U.S. space policy, subject only to satisfying the applicable health and safety regulations.

More recently, statements of national space policy by both the Carter and Reagan Administrations have highlighted the importance of private

sector space activities. For example, President

Reagan’s Statement on Space Policy of July 4,

1982, declared:

gosome analysts believe that an increase in Shuttle flights wilJ,

through a combination of learning curve efficiencies and economies

of scale, actually reduce the cost of operating the Shuttle.

91 National Aeronautics and Space Act of 1958, sec. 102(b), 42

U.S.C. 2451.

9Zlbid., sec. 203(5).
— ----- . - -- - - - — - - —-

142 ● International Cooperation and Competition in Civilian Space Activities

The U.S. Government will provide a climate

conducive to expand private sector investment

and involvement in space activities . . .

Can the U.S. private sector, encouraged by the

U.S. Government, be competitive with foreign,

government-supported launch systems? This is a

point on which there is significant disagreement

both in the U.S. Congress and in the private sector. In the U.S. air transportation industry, however, private U.S. firms have successfully competed with foreign government-owned, often

subsidized, firms. Private U.S. firms, using current ELV technology, could probably compete successfully against foreign launch vehicles such as

the Ariane.

It is uncertain whether U.S. firms will be able

to compete against both foreign ELVs and the

U.S. Government’s Shuttle. A decision to support

private launch activities aggressively would most

certainly require either limiting the number of

commercial payloads carried on the Shuttle or raising the Shuttle launch price. On this subject, the

NASA Advisory Council report stated:93

The potential for the successful privatization

of ELVs was considered fairly low by the Task

Force. It seems probable that following divestiture by NASA of an ELV to an entrepreneurial

company, that company would exert every effort to cause the Shuttle pricing to be revised upward in order to make the ELV more competitive. This would run counter to the Shuttle

pricing policy and its objectives.

It is possible to argue by analogy to the postal

service that the Government and the private sector might coexist as launch service providers. The

majority of the mail in the United States, by law,

can be handled only by the U.S. Postal Service;

however, private firms are allowed to provide numerous specialty services. If NASA continues to

pursue commercial payloads aggressively, it is

conceivable that some private sector firms might

be able to market expendable launch vehicles to

customers who needed unique services such as

rapid launches or payload delivery to non-Shuttle

orbits. It is doubtful, however, that the near-term

demand for such “specialty services” will be sufficient to sustain even a single private firm.

At present, the United States is attempting to

pursue policies that simultaneously seek to encourage the entry of the private sector into the

launch services market and to maximize the use

of the Shuttle for commercial launches. If the demand for launch services were to increase dramatically, it might be possible to maintain both positions; since this is unlikely in this decade, the

United States must choose which of these two

courses it intends to follow.

To summarize, a policy that encouraged the

participation of the Private sector with expendable Iaunch vehicles would likely have the following

●

●

●

●

results:

encourage the formation of an internationally competitive U.S. space transportation industry;

reduce NASA’s role in space transportation

and the demand for Shuttle launches;

reduce the likelihood that additional orbiters

will be needed in this decade;

potentially reduce the cost of operating the

Shuttle program; and

increase the demand for, and the potential

commercial success of, the Ariane launch

vehicle.

Option 4:

Use the Shuttle to meet all current and

future U.S. space objectives

The ShuttIe is not “just another launch vehicle.” It is a unique tool for conducting manned

activities in space that until now were not possible. It is also a technology in which this Nation

has invested over $15 billion. The NASA Advisory Council recently expressed their concern

that the U.S. commitment to the Shuttle might

be wavering:94

We sensed a great pressure within the government to find some way to make the STS “pay

its way” . . . We are concerned that preoccupation with this thrust may distort our national

priorities in space. In our view the Shuttle is a

great national asset in its own right, and is essential to pursuit of civil and military objectives in

space.

gq’’Study of Effective Shuttle Utilization, ” op. cit. Wlbid.
Ch. 5—Space Transportation ● 143

It is possible to conceive of a space transportation policy built around the expansion of space

activities through the Shuttle, Having recently

made the decision to encourage Shuttle-related

commercial activities, to build a space station,

and to use the Shuttle for military space activities, this Nation has already made a substantial

commitment to Shuttle operations. It is reasonable to argue, as NASA has often done, that commercial space operation should be coordinated

so as to contribute to overall national space goals,

including in this case the success of the Shuttle

program. If current Shuttle-use policies were

combined with a more vigorous attempt to enlist

commercial communication satellites (perhaps at

the expense of developing a reusable orbital

transfer vehicle for payload delivery to geostationary orbit) and an increased level of effort (and

of expenditure) for scientific and new commercial payloads such as materials processing, Shuttle

utilization might remain the most important single

element in future space policy decisions.

Under such a policy NASA would not be limited to flying Government payloads, since it

would be desirable to direct the energies of the

private sector into Shuttle-related activities. However, capturing a large number of communication satellite launches with the Shuttle would not

be the only purpose of such a policy; it would

also require a commitment to NASA programs

and research activities that would create new

sources of demand for Shuttle services. Such a

policy would rest on the belief that, if the benefits of “space industrialization” are to be realized,

the Shuttle, is indispensable.

Competing with foreign launch vehicles would

not be the primary reason for such a policy. Capturing a large number of commercial payloads

might be useful if it created pressure to “Shuttleoptimize” satellites and other cargo. Conceivably, a strong movement in this direction could,

as NASA had hoped in the past, render ELVs obsolete.

A policy that sought to maximize Shuttle use

would have to overcome a number of important

domestic and international barriers. Domestically,

there is considerable support for a policy to encourage a private ELV industry. There are some

compelling arguments in support of this position.

There is also substantial national interest in reducing the Federal deficit and, therefore, Government expenditure; this includes expenditures

for the space program. Though NASA argues that

revenue from commerical flights will eventually

reduce the cost of operating the Shuttle, critics

charge that, for the foreseeable future, such activities only add to the cost of the space program.

Even though the Shuttle is technologically superior to the Ariane and other potential foreign

competitors, as long as these competitors can

launch payloads at a price that bears a reasonable relationship to the cost, they will continue

to do so. For this reason, it is unlikely that foreign equipment manufacturers will “Shuttle-optimize” future satellites and other space cargo;

likewise, U.S. equipment manufacturers are unlikely to build “Shuttle-only” equipment as long

as the space transportation market includes both

the Shuttle and ELVS.

To summarize, a policy that encouraged the

maximum use of the Shuttle for all types of missions would likely have the following results:

●

●

●

●

●

increase the likelihood that the Shuttle will

play a major role in the successful exploitation of outer space;

create a need for additional orbiters in this

decade;

decrease the likelihood that the U.S. private

sector could make a successful entry into the

launch service market;

greatly increase the cost of operating the

Shuttle program (as well as other NASA programs); and

reduce the demand for, and the potential

commercial success of, the Ariane launch

vehicle.
Chapter 6

SATELLITE COMMUNICATIONS

Contents

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147

Space Policy and International Telecommunications Policy. . . . . . . . . . . . . . . . . . . . . . 1 4 7

The international Satellite Communications Industry . . . . . . . . . . . . . . . . . . . . . . . . . 147

International Cooperation in Satellite Communications . . . . . . . . . . . . . . . . . . . .. ..143

Policy Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149

The Demand for International Satellite Communications . . . . . . . . . . . . . . . . 150

The lnternational Satellite Communications Service Industry . . . . . . . . . . . . ,, . . . . 153

The Satellite Communications Equipment Industry . . . . . . . . . . . . . 161

Cooperation and Competition Issues in International Satellite Communications I 1 6 8

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 . . . . . . . . . . . . . . . . . . 18 8

The Advanced Communications Technologies Satellite Program . . . . . . . . . . . . . . . . . . 19 3

Policy Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198

The Future of lNTELSAT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .., 198

The Future of COMBAT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .200

Satellites v. Fiber Optic Cables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . JO I

Access of U.S. Carriers 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 Satellite Communications . ...............22 0
. . .

Appendix 6B: The Communications

Introduction . . . . . . . . . . . . . . . . . .

Satellite Equipment Market. . ..................226

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226

Satellite Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .....................226

Satellite Suppliers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ................237

International Competitive Factors in the Wodd Satellite Market . ................,238

Earth Station Equipment Suppliers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...........238

Appendix 6C: INTELSAT and INMARSAT Members: Signatories and

Investment Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .....................244

Appendix 6D:Article XlV and Other Excerpts From the INTELSAT Agreement

Relating to Space Segment “Facilitie separate From INTELSAT” . ................247

List of Tables

Table No. Page

6-1.

6-2

6-3,

6-4,

6-5.

6-6.

6-7.

6-8.

6-9.

6A-1.

6A-2.

6A-3.

66-1.

66-2.

68-3.

66-4.

6B-5.

66-6.

66-7.

6B-8.

U.S. International Telephone and Telegraph Service Revenues, 1972-85........151

U.S. International Common Carrier Telecommunications Traffic by

World Region, 1982 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..............,151

Scenarios for Satellite Communications Demand in the 1990s .. .. .. ... ... ....I53

U.S. Telecommunications Firms Providing International Satellite

Communications Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......156

Members of lNTELSAT: The Major Non-U.S. Telecommunications Providersof

International Satellite Communications Services. . . . . . . . . . . . . . . . . . . . . . ......159

U.S. Market Share of Commercial Satellite Prime Contracts . .................162

Prime Contractors for Commercial Communications Satellites . ...............164

Earth Station Market Shares, By Country of Supplier For the Period 1965-82....165

U.S. international Telephone and Telegraph Equipment Trade, 1978-85........189

U.S.-Europe Telecommunications Forecast~ 1985-95 ........................211

Representative Transatlantic Facilities Plans for U.S.-Europe Telecommunications,

1985-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ................212

Satellite Share of international Communications Capacity CEPT Master Plan

Projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .........................213

international Communications and Direct-Broadcast Satellite Series . . . . . . . . . ...228

Estimated New and Replacement Communications Satellites

Scheduled for Launch During 1984-2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .236

INTELSAT VI: Subcontracts Let by the Prime Contractor Hughes Aircraft . ......237

Satellite Earth Station Market Forecast . . . . . . . . . ...........................238

INTELSAT Earth Station Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ......,.239

Major Worldwide Suppliers of Satellite Earth Stations ., . ....................239

Major Satellite Earth Station Suppliers-Company Profiles, . . . . . . . . . . . ........241

NEC Satellite Earth

List of Figures

Figure No.

6-1. Texas Instruments’

6-2. Texas Instruments’

Station Orders as of June 1984 . ........................243

Page

Worldwide Data Communications Network . ..............157

information Network Concept . .........................158

6-3. Radio Signal Attenuation . . . . . . . . . . . . . . . . . :. . . . . . . . . . . . . ...............194

6A-1. Cost of Satellite vs. Cable Transmission: Conceptual Diagram . ...............214

6B-l. Estimated Worldwide Investment in Commercial Communications Satellites,

1965-85 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..................,.....227

6B-2. Estimated Worldwide investment uncommercial Communications Satellites,

1985-89 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........................233

6B-3. Locations of Commercial Communications Satellites in Geosynchronous Orbit

as of June 25, 1984 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..............234

6B-4. Locations of Commercial Communications Satellites in Geosynchronous Orbit

Planned for as of june 25, 1984 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ......235

6B-5. Typical Ground Station Costs for Differing Antenna Sizes . . . . . . . . . . . ......,..240

613-6. INTELSAT Satellite Earth Station Suppliers . . . . . . . . .........................243
Chapter 6

SATELLITE COMMUNICATIONS

INTRODUCTION

Space Policy and International

Telecommunications Policy

Satellite communications is the only substantial commercial exploitation of space. As communication satellites came into commercial use,

many people concerned with international satellite communications policy assumed that most

of the important issues in the satellite arena could

be analyzed apart from the regulatory issues of

the wider telecommunications industry. The policy they made, embodied initially in the Communications Satellite Act of 1962 and the INTELSAT

Agreement of 1973, evolved with its own momentum, its own objectives, and its own “space”

constituencies. The Federal Communications

Commission (FCC) then molded the regulatory

framework to accommodate the policy framework.

Recently, the regulatory framework that the

FCC put in place to reconcile U.S. international

satellite communications policy with commercial

reality has come u rider new challenge in a number of different contexts and must adapt in fundamental ways. Technological, economical, and

regulatory changes have resulted in a situation

where almost no aspect of international satellite

communications can any longer be analyzed

apart from the international telecommunications

industry—terrestrial and satellite—as a whole. At

the same time, most of the major issues in international satellite communications have also become issues of telecommunications regulation

rather than space policy.

International competition in satellite communications equipment has also taken on a new dimension now that the U.S. market has opened

up because of domestic deregulation. Foreign

suppliers, who had hitherto largely sold in protected markets or according to the allocation formulas of international agencies, are free to sell

in the United States, but U.S. suppliers are seriously restricted in Europe and Japan.

The International Satellite

Communications Industry

These shifts in policy emphasis are taking place

at a time when satellites provide the dominant

transmission technology in international telecommunications. Approximately two-thirds of transoceanic international telecommunications now

pass through satellites; the remainder is carried

via undersea cables.1 The information transmitted

includes not only telephone conversations, telex

messages, and television programs, but increasing amounts of computer-processed data. In the

future, videoconferencing may become a large

service. Multinational corporations now send

large quantities of data around the world within

private line networks. In the general international

economy, the exchange of goods and services

among nations is paralleled by streams of related

information and electronic financial transfers.

More and more, the same firms that carry data

from one point to another also process the data.

This merger of two formerly separate activities–

telecommunications and data processing—already has led to substantial regulatory changes

in both the domestic and international telecommunications of the United States, a process that

is beginning to occur in several other countries

as well. The 1984 breakup of AT&T in an antitrust

consent decree is the most spectacular, but only

one, result of the pressure that technical changes

are placing on regulatory structures.2

Within the United States, several of the largest

U.S. corporations now offer both domestic and

international satellite communications services.

AT&T, Western Union, IBM, RCA, ITT, and GTE

] Departments of State and Commerce, ‘‘A White Paper on New

International Satellite Systems, ” February 1985, p. 7.

2U .S. Congress, Office of Technology Assssment, Effects of /formation Technology on Financial Services Systems, OTA-CIT-202

(Washington, DC: U.S. Government Printing Office, September

1984), ch. 6.

147
148 ● International Cooperation and Competition in Civilian Space Activities

are important examples. * Each of the three largest

communications satellite makers—Hughes, Ford,

and RCA—also offers, or is about to offer, satellite communications services. In addition to these

firms, which offer services for sale, a number of

large U.S. firms, e.g., Citicorp and General

Electric, have sizable private communications

networks.

Abroad, the picture is much different: except

in a few countries, telecommunications is a government monopoly (the so-called “PTT” or post,

telegraph, and telephone entity). 3 Internationally,

the International Telecommunications Satellite

Organization (INTELSAT), a consortium with

more than 100 member countries, is the monopoly provider of intercontinental satellite facilities.4

INTELSAT was established under U.S. leadership

pursuant to the Communications Satellite Act of

1962, which also authorized the charter of the

Communications Satellite Corp. (COMSAT) as a

private company. COMSAT is a carriers’ carrier

(all U.S. carriers sending international satellite

communications via the INTELSAT system must

pay COMSAT’s tariff) and represents the United

States in the INTELSAT Board of Governors. It

currently has an investment share in INTELSAT

of 23 percent. Other countries are typically represented on the INTELSAT Board of Governors

by their PTTs.

Both INTELSAT and the PTTs in the industrial

countries are beginning to feel pressures for increased openness to competition—pressures 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.

JThe divestiture decisions contained in the AT&T consent decree

are, of course, just one of the possible ways in which industry structures could be reformed to take account of the new technological

realities. Other countries, notably the United Kingdom, Japan, and

France, responding to these same technological realities by altering industry structures in other ways.

Some traffic is now or will shortly be carried on regional systems in the Western Hemisphere, Southeast Asia, Europe, and the

Middle East, on INTERSPUTNIK, a Communist bloc satellite system, and on INMARSAT, an international system for marine communications. The Western Hemisphere regional system is often

omitted from the list of regional systems, perhaps because it is made

up of unrelated private carriers rather than operated by an intergovernmental organization, and is usually referred to as “transborder services. ” Currently, U.S. domestic satellite operators are authorized to carry international traffic to Canada, Mexico, Bermuda,

and many locations in the Caribbean.

the continued growth of demand for telecommunications services, from the new information and

telecommunications technologies, and from the

new competitors in the U.S. markets They fear

that unilateral moves by the United States will

cause changes in the current international regulatory regime that will make them change valued

modes of operation and, in the case of INTELSAT,

threaten its economic viability.b At the same time,

some developing countries are demanding changes

in the ways in which the international community assigns the radio frequencies and geosynchronous orbital positions.

International Cooperation in

Satellite Communications

The United States cooperates extensively in international satellite communications and, in addition to its membership in INTELSAT, participates in several other international organizations

concerned with it. U.S. concerns in these cooperative processes are not only related to the welfare of U.S. producers and consumers of telecommunications services and equipment. They also

are concerned with linkages to wider foreign policy concerns—e.g., relations with other industrial countries and with the developing world, global national security communications capabilities,

the effectiveness of international institutions, and

the general international trading system.

SEli M. Noam, “Telecommunications Policy on the TWO Sides Of

the Atlantic: Divergence and Outlook, ” Columbia University, Research Program in Telecommunications and Information Policy,

New York, Aug. 15, 1984. See also testimony and statements in

“international Satellite Issues,” U.S. Congress, House Committee

on Energy and Commerce, Subcommittee on Telecommunications,

Consumer Protection, and Finance, Hearings, June 13, July 25 and

26, 1984, Washington, DC, 1985,

GWe use the term “international regulatory regime” (Or “international communications regime”) broadly to include all governmental and intergovernmental actions affecting the operations of

the international communications carriers. These include treaties

and other formal and informal intergovernmental agreements in

the area of telecommunications, other elements of international

law affecting telecommunications, the actions of international organizations such as the ITU or INTELSAT, and the actions of national

governments that affect the international telecommunications industry.
Ch. 6—Satellite Communications ● 149

Policy Issues

These pressures for change pose issues for U.S.

international communications policy that involve

both international competition and international

cooperation. Important current policy issues of

relevance to international satellite communications are mentioned below.

Competition for INTELSAT

Should the United States attempt to foster greater competition in the provision of international

satellite communications facilities? If so, would

the United States serve this objective, and wider

U.S. foreign policy concerns, by allowing private

U.S. firms to construct satellite facilities for use

in whichever country markets they can gain entry, in possible competition with INTELSAT?

Competition for COMSAT

Should other U.S. telecommunications carriers

be allowed access to INTELSAT on the same basis

as COMSAT? If COMSAT continues as the sole

U.S. investor in INTELSAT and as the sole U.S.

“wholesaler” of international satellite communications, should COMSAT be required to divest

itself of its other activities or could they be carried out in separate subsidiaries, as at present,

with accounting controls to guard against its monopoly activities cross-subsidizing its competitive

ones?

Satellites v. Cables: Facilities Regulation

How will the international facilities regulation

of the FCC affect the future of satellite communications? The future distribution of traffic in international communications between satellites

and undersea cables is partly dependent on the

cost and performance characteristics of the two

technologies, but it also depends on whether the

Government regulates investment in new satellite and cable facilities and whether it mandates

the shares of the traffic that U.S. service carriers

must send over the two media. Should the current regulatory regime be maintained or can competition be relied on to determine investment in

long-distance international facilities in the same

manner that it does in the substantially deregulated U.S. domestic telecommunications industry?

Access of U.S. Carriers to Foreign

Telecommunications Service Markets

Now that several dozen large U.S. corporations

are active in U.S. domestic satellite communications, as basic, enhanced, or private communications providers, how can the United States endeavor to assist them in gaining access to foreign

telecommunications service markets (principally

in the industrial countries)? Should the United

States adopt a demanding posture at the risk of

straining relationships with our principal trading

partners?

International Trade in Satellite

Communications Equipment

What additional action should the Government

take to try to assure fair international competition in both space- and ground-segment equipment? Can foreign governments be persuaded to

end their PTTs’ discriminatory procurement policies by agreeing to apply the GATT agreement

on government procurement (or a similar principle) to PIT procurement of telecommunications

equipment? Would reciprocity legislation help?

How disadvantaged are U.S. satellite communications equipment makers likely to be in the

availability of and interest rates charged for official export finance for sales to less developed

countries? Would a new international agreement

help?

NASA Satellite R&D

How much should the Government spend on

research and development to help keep the U.S.

satellite manufacturing industry technologically

vital and ahead of potential foreign competitors?

In particular, is the NASA Advanced Communications Technologies Satellite (ACTS) program a

desirable program that the private sector is not

financially capable of mounting? Or should the

private sector be relied on to do its own R&D?

Should the U.S. Government match foreign civilian R&D programs in satellite communications

or would the ACTS program actually engender

greater foreign efforts to surmount U.S. domi-
150 ● International Cooperation and competition in Civilian Space Activities

nance in communications satellites? Finally, how

much success is a government-conducted R&D

program likely to have in developing marketable

technology?

Space WARC

What should be the U.S. approach to cooperation with other countries in international telecommunications organizations? In particular,

how should the United States approach the international Telecommunication Union’s (lTU)upcoming World Administrative Radio Conferences

on space services (“Space WARC”), so as to protect U.S. access to the geosynchronous orbit and

the radio frequency spectrum? Should temporary

or permanent withdrawal from ITU’ (and other

international organizations concerned with satellite communications, such as the U.N. Committee on the Peaceful Uses of Outer Space

(COPUOS) be considered as active contingencies

in the wake of U.S. withdrawal from the U.N. Educational, Scientific, and Cultural Organization

(UNESCO)?

Aid to Developing Countries

Should Congress attempt to direct more U.S.

development-assistance resources into telecommunications? Should the United States encourage

multilateral assistance to developing countries

through the World Bank or specialized international telecommunications institutions, such as

INTELSAT (cross subsidies) and the ITU (development assistance), or are bilateral programs,

such as those that might be carried out by the

U.S. Agency for International Development

(AID), more effective in achieving U.S. objectives?

Can mixed credit programs f~r buyers in developing countries assist U.S. telecommunications

exports?

The Demand for International

Satellite Communications

The Importance of the Demand Factor

The demand for satellite communications, its

size and rate of growth in this decade and in the

%Vhether significant cross subsidies are created by INTELSAT pricing is in dispute (see below).

1990s, will be one of the fundamental variables

affecting issues of importance to the United States

in international space and telecommunications

policy.8 The prospect of high demand for satellite communications over the North Atlantic

would make it easier for the United States and

other governments to allow the entry of private

satellite communications firms in competition

with INTELSAT. High demand for satellite communications services would also result in higher

derived demand for space transportation services

and for satellite equipment and would affect international competition in both areas. One effect

of high demand would not be favorable, however. High demand would tend to exacerbate any

situation of crowding in the geostationary orbit.9

Growth of International

Telecommunications as a Whole

U.S. international communications has been

growing rapidly since high-quality voice service

was inaugurated in transatlantic service via undersea cable in 1956. U.S. carriers’ international real

revenues grew at an annual average rate of approximately 13 percent during the 1972-84 period

(table 6-l). For 1985, the Department of Commerce projects a growth rate of 14 percent.

scare should be taken with the concept of “demand for international satellite communications, ” since satellite communications

and terrestrial communications are extremely close substitutes in

telephony and most other international volume applications. It

should probably be thought of as a demand derived from total international telecommunications demand that is determined by the

institutional and regulatory structures of both cables and satellites

and also by the relatively small differences in the characteristics

of the services provided. The general conclusion that satellite and

cable transmission modes are close substitutes is not changed by

the existence of certain uses, such as point-to-point television or

certain high-speed interactive data communications, where the two

modes are not close substitutes. At present these uses are relatively

low-volume uses in international satellite communications.

gcrowding (or congestion) in the geostationary orbit k sad to

occur when preferred or substitutable orbital slots in a desired frequency band are not available to an applicant. This may be because they are occupied by another satellite or reserved for future

use by another user. Thus, the applicant experiences the economic

costs of changing desired services. Crowding can be local or can

occur in an entire region of the geostationary orbit, such as the

Western Hemisphere. Certain observers eschew the term as

misleading, since no physical crowding occurs, and the spacing

is fixed by regulatory decision. At 2 deg. orbital spacing, for instance,

satellites would be approximately 500 miles apart. The volume of

two-way communications that can be handled in a given slot also

depends on the technology in use by the satellite.
Ch. 6—Satellite Communications ● 151

Table 6.1 .—U.S. International Telephone and

Telegraph Service Revenues, 1972-85

International Growth

revenues ratea

Year (1972$ millions) (percent)

1972 . . . . . . . . . . . . . . 663 —

1977 . . . . . . . . . . . . . . 1,339 15.1 (1972-77)

1978 . . . . . . . . . . . . . . 1,607 5.7

1979 . . . . . . . . . . . . . . 1,906 18.6

1980 . . . . . . . . . . . . . . 2,082 9.2

1981 . . . . . . . . . . . . . . 2,250 8.1

1982 . . . . . . . . . . . . . . 2,325 3.3

1983 . . . . . . . . . . . . . . 2,500 7.5

1984e . . . . . . . . . . . . . 2,800 12.0

Average twelve-year period . . . . . . . . . . . 12.8 (1972-84)

1985p . . . . . . . . . . . . . 3,200 14.3

KEY: e = estimated; p = projected. aAVOragOCOrnpOUnd growthratecalculated on the end points for indicated PfMiods of over 1 year,

SOURCE: U.S. Department of Commerce, u.S. Industrial Outlook 1985, pp. 31-7,

31-9.

U.S. carriers expect rapid growth of international communications to continue. In forecasts

prepared for a working group meeting in connection with the FCC’s facilities planning process, the

U.S. international service carrierslo projected the

demand for U.S.-Europe common carrier commu nications (including new services) to increase

at an average annual rate of 16.3 percent during

loln 1983, the major IJ. !j. companies involved in the planning

process were AT&T, RCA, Western Union, GTE, MCI, and ITT and

COMSAT.

the period 1985-95. They foresee demand for capacity of 82,000 voice-equivalent circuits in

1995.11

Table 6-2 shows the distribution of two-way

telephone and telex services between the United

States and various world regions in 1982. In that

year, 86 percent of telephone and 80 percent of

telex minutes were transmitted along high-volume corridors to Europe, North Asia, and the

Americas.12 Transatlantic traffic to Europe alone

accounted for about 50 percent of total minutes.

Demand Forecasts Subject

to Substantial Uncertainty

Forecasts of demand a decade ahead are, of

course, subject to wide forecast error, because

the assumptions regarding price, economic growth,

technology, market development, and consumer

response on which they are implicitly or explicitly based are themselves subject to great uncertainty.

One assumption behind the U.S. carriers’ forecast stands out as particularly uncertain-their

I I This gro~h rate refers to the forecast of November 1984. Table

6A-1 in app. 6A presents these November 1984 overall forecasts.

It also presents 1983 forecasts (which were significantly higher) by

carrier and by major destination country.

lzNot including Canada and Mexico. These percentages are taken

from table 6-2.

Table 6-2. -U.S. International Common Carrier Telecommunications Traffic

by Worid Region (Voice and Teiex), 1982a

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 . . . . . . . . . . . . . . . . . . . . . 46 2.3 14 4.3

Total . . . . . . . . . . . . . . . . . . . . 2,019 100.0 336 100.0

alncludes only telephone and telex traffic. In addition to telex, which was reported by region and by I’TIi MOS and which accounted for 70 percent of,thelr revenues, the (former) international record carriers derived 30 percent of their revenues from

telegraph messages and private lines.

bJapan, Republic of Korea, China, Hong Kong, Taiwan, Philippines.

cExc/uding c~ada, Mexico, and U.S. territories, Canada and Mexico are not 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: Dertved from Federal Communications Commission, Statist/es of Common carders, year ended Dec. 31, 1982, pubiished in 1984.

38-797 0 - 85 - 6 : QL 3
152 ● International Cooperation and Competition in Civilian Space Activities

assumption that new services, especially videoconferencing, will not grow to be a large fraction

of total demand.13 A study prepared for NASA

in 1980 comes to a different conclusion as do recent statements by other observers. (See app. 6A

of this chapter for further discussion.) If a large

demand for videconferencing should materialize,

perhaps stimulated by new satellite and cable

competitors, demand for international communications could grow even more rapidly than the

carriers’ forecast.

The Satellite Communications

Component

Will international satellite communications

share in this rapid growth? Will it grow as rapidly as international telecommunications as a

whole? The growth prospects for satellite communications are even more uncertain than those

of the total industry. It is even possible that the

growth of international satellite communications

could level out in the 1990s at the same time as

total international telecommunications was continuing to expand rapidly. This could occur if

undersea cables, using advanced fiber optic technology, are used relatively more in the future than

satellites.

Although international satellite communications can be expected to continue to grow rapidly in the 1980s,14 the prospects for the 1990s

are

the

●

●

much less certain. The s-hare of satellites in

1990s will depend on:

the growth in the total demand for international telecommunications services;

the price advantage/market preference, if

any, of fiber optic over satellite transmission

for high-volume applications;15

IJVideoconferencing and audioconferencing (no video element)

together comprise teleconferencing. Full-motion videoconferencing requires broadband telecommunications capability, but slowscan videoconferencing (as well as audioconferencing) can be sent

over standard telephone circuits.

lqAt least through 1%8, when the transatlantic TAT-8 and transpacific Transpac 3 fiber optic cables are scheduled to be operational.

1 SHigh-volume applications refers to addressable communications,

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 particularly suited—point-to-mu lti-point receive-only television transmission and low-density communications—will also be a factor, but

●

●

the strength of industry-structure and other

incentives for carriers to invest in fiber optic undersea cables and use them in preference to satellites; and

the actual growth of undersea cable capacity and the- presence or absence of regulatory restrictions on its use.

Because all of these factors are uncertain, we

organize the discussion of the demand for satellite communications in the 1990s in terms of three

plausible scenarios:

1: Rapid growth throughout the 1990s.

Ii: Slow growth throughout the 1990s.

Ill: A no-growth plateau in the 1990s.

Essentially the three scenarios represent different outcomes of the modal competition between

fiber optic undersea cables and communication

satellites for international communications in high

volume uses. If users and carriers have significant

preferences in favor of fiber optic transmission,

and if these preferences are not blunted by regulatory decisions to limit the construction or use

of undersea cables, the employment of satellites

on major trunk routes could decline significantly

in the 1990s, and total satellite communications

use could level off. This would be more likely to

occur if international telecommunications as a

whole did not grow as rapidly as the videoconferencing optimists expect. This is the no-growth

scenario for satellite communications in the

1990s.

On the other hand, less preference for cables

or more stringent regulation requiring carriers to

use satellites could keep satellite communications

carrying roughly the same 50 percent share of the

growing transatlantic market as it does now. This

would be the rapid growth scenario.

A slow growth scenario represents a trend midway between the other two scenarios.

Table 6-3 lists the key variables that are uncertain and the assumptions about them that would

affect demand according to the three scenarios.

a relatively unimportant one in irrtefnationa/ satellite communications than the growth of high-volume point-to-point applications

because of the low total communications volume of the former.
Ch. 6—Satellite Communications ● 153

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

Scenario I Scenario II Scenario Ill

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

Industry-structure incentives to

adoption of fiber-optic cable LOW MODERATE HIGH

transmission

OR OR AND

Growth in actual cable capacity

or in capacity available SLOW-TO-MODERATE MODERATE RAPID

under loading restrictions

Note: These scenarios and assumptions are discussed in app. 6A of this chapter. This chart emphasizes the factors affecting

the share of satellite communications. Slow growth In tota/ international telecommunications demand would reduce

the growth of satellite communications in ali scenarios and make the growth plateau more likely.

The scenarios and the assumptions behind them

are discussed in greater detail in appendix 6A of

this chapter.

The International Satellite

Communications Service Industry

A number of important issues in U.S. international space and satellite communications policy are embedded in the structure of the world

telecommunications service industry. (Structure

here refers to the prevailing modes of operation,

ownership, and regulation in the industry.) The

world industry and its structure are increasingly

affected by the same technological developments—the merging of the data processing and

telecommunications industries based on inexpensive computing power, digital communications,

satellite networks, and other technical innovations–that contributed to the break-up of the regulated-monopoly structure in U.S. long-distance

communications. 16 These developments are now

affecting the telecommunications economies of

a number of other industrial countries and are

beginning to force structural change to occur

there as well.17

161jee Richard I. Kirkland, “Ma Blue: IBM’s Move Into communications,” Fortune, vol. 110, Oct. 15, 1984, pp. 52-54,58,62. Also

see Dante B. Fascell and Virginia M. Schlundt, “United States international Communications and Information Policy: A Crisis in the

Making?” Northwestern journal of International Law and Business,

vol. 5, fall 1983, pp. 486-509.

1 TFor a discussion of technological change as the leading edge

of change in telecommunications regulation in the United States

and other countries, see unpublished paper by Alan Baughcum,

Since the pace of change is greatest in U.S. telecommunications markets, conflicts with other

countries in international satellite communications policy have been growing out of the conflicting desires and actions of U.S. and foreign

telecommunications producers and consumers—

both in the United States and other countries–

as they respond to technology-driven changes in

telecommunications markets. These market developments, rather than the initiatives of the U.S.

or foreign governments, are the primary impetus

behind current policy discussions in satellite communications.18

The Emerging Industry Structure in

U.S. International Communications

Even though the United States has deregulated

much of its domestic telecommunications, the

old regulatory structures affecting U.S. interna--

tional communications remain largely in place.19

While the FCC has relaxed the distinctions between international and domestic and voice and

record carriers,20 this as yet has had little impact

presented at the Research Workshop on Economics of Telecommunications, Information and Media Activities in Industrial Countries, National Science Foundation, Apr. 3@May 2, 1984, Washington, DC (forthcoming, North-Holland Publishing Co., 1985). Also

see “America calling, ” Economist, Nov. 24, 7984, pp. 97-98.

lsFor a general treatment of the problem of international conflicts of jurisdiction, see George Shultz, “Trade, Interdependence,

and Conflicts of Jurisdiction, ” Current Policy No. 573, May 5, 1984.

Igsee app< 6A for fu~her discussion of how the international regulatory regime has changed in recent years.

‘“’’ Record” communications–telegraph, telex, and data—are

conventionally distinguished from “voice’ ’-telephone-and from

television transmissions.
- —. . . . . - . . — —- -

154 ● International Cooperation and Competition in Civilian Space Activities

on which firms carry what traffic and on how they

do business internationally. AT&T Communications still carries almost all U.S. international

telephone communications; the international record carriers, formerly restricted to record communications, still handle most of the record traffic; INTELSAT and COMSAT still have a virtual

monopoly on U.S. intercontinental space-segment communications; and the FCC still oversees

a process in which approved carrier consort~a

plan facilities years ahead.

Nevertheless, pressed by regulatory and technological changes, the large firms, such as AT&T,

IBM, GTE, lTT, RCA, Western Union, and COMSAT,

have all started to penetrate each other’s former

preserves (or are contemplating it). New entrants

have also been able to enter the international markets for both basic and enhanced telecommunications services.21

Several notable events have recently set the

stage for the large telecommunications firms to

start moving toward an undifferentiated international industry on the U.S. side:

●

●

The Orion Satellite Corp., RCA, and other

applications to the FCC in 1983, 1984, and

1985 to construct private transatlantic satellite facilities to be owned by individual firms.

The FCC decisions to allow COMSAT to provide retail service and other carriers to independently own Earth stations transmitting

to and receiving from INTELSAT satellites.22

ZI In early I !385, the FCC was moving toward making entry even

easier by relaxing the procedural requirements for all but “dominant” carriers (those having significant market power). In the course

of this process, it has tentatively concluded that, except for the local

telephone carriers in Alaska, Hawaii, and Puerto Rico, only AT&T

(in message telephone service) and COMSAT are dominant carriers and therefore have to be closely regulated. (FCC, “In the Matter

of International Competitive Carrier Policies, ” File No. 85-177, released Apr. 19, 1985.)

zzThe FCC authorized COMSAT to compete directly with other

carriers for customers’ business in 1982, but the U.S. Court of Appeals for the District of Columbia suspended action until the FCC

resolved other matters, including the issue of Earth stations and direct ownership-type access to the INTELSAT system by carriers other

than COMSAT. (U.S. General Accounting Office, FCC Needs to

Monitor a Changing International Telecommunications Market,

RCED-83-92, Mar. 14, 1983.) In a series of decisions culminating

in an order released in January 1985, the FCC reaffirmed its policy

to allow COMSAT to provide retail service (through a subsidiary

separate from the monopoly World Systems Division), denied carriers ownership-type access to INTELSAT, but allowed them and

other users to own their own Earth stations communicating directly

●

●

●

The success of Western Union Telegraph

Co. 33 in penetrating the international record

market and the moderate success of MCI and

GTE in penetrating the international telephone market.

The emergence of a Western Hemisphere regional system based on the satellites owned

individually by U.S. private domestic satellite providers and by Telesat Canada.

Finally, the plans announced in 1984 by: 1)

Cable’& Wireless, Ltd., a British firm, and its

U.S. partners;24 and 2) Submarine Lightwave

Cable Co. (SLC),25 a U.S. entrepreneurial

group, to install new very high-capacity,

transatlantic fiber optic cables.26

Because data processing and telecommunications firms can no longer easily be separated into

different industries, and telecommunications providers themselves are no longer segmented into

the traditional rigid regulatory categories, the inwith INTELSAT satellites (FCC, “Second Report and Order in the

Matter of Proposed Modification of the Commission’s Authorized

User Policy Concerning Access to the International Satellite Services of the Communications Satellite Corporation,” released Jan.

11, 1985).

zJWestern Union Telegraph Co., formerly the de facto monoPoly domestic record carrier, should not be confused with Western

Union International, a separate firm, one of the traditional record

carriers and now a wholly owned subsidiary of MCI Corp.

24Application of Tel-Optik Ltd. (Cable & Wireless’ U.S. partner)

for a license to land and operate in the United States a submarine

cable extending between the United States and the United Kingdom, FCC File No. S-C-L-84@02, Sept. 28, 1984.

25Application of submarine Lightwave Cable CO., FCC File No.

SCL-85-001, Oct. 16, 1984. Submarine Lightwave’s FCC filing says

that the cable would provide 250,0(X voice circuits for telephony

or 72 broadcast-quality video channels, if used entirely for those

purposes; it would cost $450 million, and would be installed in 1989.

The application also states that the cable may in its final design result in even more usable capacity, since “current technology is developing extremely rapidly” (p. 2).

Zbln March 1985, the FCC informed the Secretary Of State Of its

conclusions that the Tel-Optik application “meets the threshold

reciprocity showing of the Cable Landing License Act and otherwise appears to be consistent with U.S. interests under the Act. ”

The SLC ap~lication was not acted on pending the receipt of additional information. (FCC News, Report No. 3092, Mar. 4, 1985).

In May 1985 (based on an April refiling by SLC), the FCC recommended to the State Department that it also approve the SLC cable

landing license (letter from Mark S. Fowler to William Schneider,

Jr., May 16, 1985). The Tel-Optik cable landing license was approved ●

by the FCC on May 16, 1985, subject to conditions that it is

revocable after due notice of hearing and that it is subject to future

modification by the Secretary of State “to protect U.S. interests as

a result of the sale or lease of capacity to particular foreign or domestic entities” (“In the Matter of Tel-Optik Ltd. Cable Landing

License, ” FCC Mimeo 461 8).
Ch. 6—Satellite Communications . 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 (postdivestiture) total assets

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., McDonnell Douglas, Continental Telephone, and United

Brands) currently have a large participation in international telecommunications, but each is in

a competitive position to expand their already significant activities should they so choose. (See

table 6-4 for a listing of U.S. international communications firms.)

In addition to these firms, the list of potential

new entrants into international satellite communications is large and growing. It includes both

other owners of satellites used in U.S. domestic

communications (e.g., Hughes Aircraft C0.

27 and

Ford Motor CO.28) and those that lease or buy

transponders from them. Several potential entrants are new corporations organized to provide

international satellite capacity.

In addition to firms that sell or plan to sell telecommunications services, a growing number of

other large U.S. multinational firms have put together very large private international communications networks, notably Citicorp (connecting

1,400 offices in 93 countries), General Electric,

Merrill Lynch, Shell Oil, and Texas Instruments,

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,

many of them have become telecommunications

‘Through ;W Hughes Comrnunicatiom, Inc., and Hughes Communications Galaxy, Inc., subsidiaries. ZsThrOugh its Ford Aerospace & Communications Corp. and Ford

Aerospace Satellite Services Corp. subsidiaries.

29Department of Commerce, U.S. /ndWria/ Out/OOk ~ 984, PP.

46-48.

Photo credit: ~atlonal Aeronaut/es and Space Adrn/rdstrat/on

Westar Vl, communications satellite built by Hughes

Aircraft Co., being retrieved by Shuttle astronauts on

mission 51-A after it failed to achieve geostationary

orbit. The astronauts are to the left and right of the

satellite. An astronaut on board controls the remote

manipulator arm to bring the satellite

into the ShuttIe bay.

providers in the U.S. domestic market, and if permitted, could participate in the international market as well.

As the international regulatory regime30 for telecommunications is currently structured, U.S. international service carriers must hand off communications traffic to foreign telecommunications

carriers for entry into other countries. Table 6-5

presents a list of the major carriers of satellite

communications outside the East European bloc;

these are the officially designated representatives

of their countries (“signatories”) to INTELSAT.

The PTTs of Germany and France are both large

entities, as are the PTTs of a number of other

countries. They own most of the telecommujowe use the term “international regu Iatory regime’ (or “international communications regime”) broadly to include all governmental and intergovernmental actions affecting the operations of

the international communications carriers. These include treaties

and other formal and informal intergovernmental agreements in

the area of telecommunications, other elements of international

law affecting telecommunications, the actions of international organizations such as the ITU or INTELSAT, and the actions of national

governments that affect the international telecommunications industry.
— .- . . . . . . - . . . . . .

156 . International Cooperation and Competition in Civilian Space Activities

Table 6.4.—U.S. Telecommunications Firms Providing international

Satellite Communications Services

Salected major U.S. corporations currently authorized to Assets

provide International service to consumers, Dec. 31, 1984

directly or through one or more subsldlarie~ ($ mllllon)

International Business Machines Corp. (Satellite Business Systems)bc d e. . . 42,808

American Telephone and Telegraph Co. (post-divestiture)c d f 

. . . . . . . . . . . . . . 38,826

GTE Corp. (GTE Sprint Communications GTE Spacenet Corp., Hawaiian

Telephone Co., GTE Telenet Corpc d e }

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,364

llT Corp. (ITT Worldcom, U.S. Transmissions Systems, Inc.)d f

. . . . . . . . . . . . . 13,277

RCA Corp. (RCA Globcom, RCA Americom). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,221

McDonnell Douglas, Inc. (FTC Communications, Inc., FTC Satellite

Systems, Inc., Tymshare, Inc., Tymnet, Inc.)d f h 

. . . . . . . . . . . . . . . . . . . . . . . . 6,191

Continental Telecom, Inc. (American Satellite and Space Communications

Co., joint venture with Fairchild Industriesc d 

. . . . . . . . . . . . . . . . . . . . . . . . . . 4,557

MCI Communications Corp. (Western Union International, Inc.)f 

. . . . . . . . . . . 3,894

Hughes Aircraft Co. (Hughes Communications, Inc., Hughes

Communications Galaxy, Inc.)c d e Q. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,500’

Western Union Corp.cef. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,259

Federal Express Corp. (Fedex international Transmission Corp.~ . . . . . . . . . . 1,526

Communications Satellite Corp. (COMSAT International Communications,

COMSAT General Telematics, Inc.)d k

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,166

United Brands Co. (TRT Telecommunications, Inc., International Satellite,

Inc., Pacific Satellite, Inc.)d ‘

f 

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,024

Fairchild Industries, Inc. (American Satellite and Space Communications

Co., joint venture with Continental Telecom)cd 

. . . . . . . . . . . . . . . . . . . . . . . . 948

epa~ia[ Iiet of other U.S. telecommunications corporations participating in or intending to participate in international sateltite

communications service markets: Advanced Business Communications, Inc., Atlantic Transport Co., Bonneville Satellite Corp.,

Compact Video Sarvices, Inc., Cygnus Satellite Corp., Eastern Microwave, Inc., Equatorial Communications Services, Inc.,

Financial Sateilite Corp., Grapfmet, Inc., International Relay, Inc., Inteimet, Inc., Koplar Communication, Inc., Metromedia,

Inc., Midwest Cabie and Satellite, inc., NEP Communications, Inc., Netcom International, Orion Sateliite Corp., Pan American

Satellite Corp., Rainbow Sateliite, Inc., Reuters Ltd., Satellite Gateway Communications, Inc., Sunbeam Television Corp., Taft

Television and Radio Co., Inc., Turner Teleport, inc., United Video, Inc., Videaatar Connections, Inc., Visions, Ltd., Vitalink

Communication Corp., World Telecommunications Corp., 220 Television.

bsatellite Business Systems (sES) IS a joint venture with Aetna Life and Caauaity Co. as of December 1984. IBM own~ ~

percent of SBS and with Aetna owning the remainder. COMSAT, an original partner in the joint venture sold its holdings

to the other two partnera.

ccu~ently authoriz~ to provide satellite communications service to specific North American COUfItries.

dAuthoriz~ t. receive INTELSAT Business service using its own earth station facilities and satellite circUit.9 leased from

COMSAT. eAppllCatlOn t. provide c~ac]ty for specific transatlantic, transpacific or Western Hemisphere satellite Services pending at

the FCC.

fEstablish~ U.S. International Service Carrier.

gApplication to provide sp~ific North and South American international services conditionally approved by the FCC pending

INTELSAT coordination procedure.

h~c Communications, Inc., IS 20 Pgrcent owned by the French Government, 80 percent owned by McDonnell Douglas.

iThis figure is the rn@pOlnt of the range of estimated market value by “Wall Street sources” of this PrivatelY held corporation

for the New York Times (Jan 11, 19S5, P. D3).

]Authorized to provide transatlantic document transmission SWViCe.

ku.s. INTELSAT signatory.

SOURCE: Fortune (Apr. 19, June 10, 19S5), Financial Statements, Moody’s Manuals and News Reports, FCC documents.

nications assets of their countries.31 British

Telecom, slightly more than half of which was

sold to private stockholders in November 1984,

remains the preponderant British domestic and

international carrier and is the U.K. INTELSAT

signatory. Kokusai Denshin Denwa (KDD), Japan’s officially designated international monopoly carrier, is both a regulated private firm and

the INTELSAT signatory for Japan.

31 For instance, the p~ 0( France, Direction General des Telecommunications, had year-end 1983 assets of FF 164 billion, about $20

billion (source: telephone conversation with France Telecom, Inc.

(New York), October 1984).

INTELSAT is the final element in the international industry. At the end of 1983, it had assets

of $1.6 billion .32 Like most of the participants in

the international telecommunications service industry, INTELSAT provides communications services (in this case, space-segment capacity) in both

international and domestic markets.33 INTELSAT

32] NTELSATFinancial Statements, contribution of the Director

General to the Board of Governors Meeting, BG-S8-70E W/3/84,

Feb. 10, 1984.

MI NTELSAT pa~iciwtes in the domestic markets of a number of

countries by leasing transponders for domestic service to telecommunications entities, usually its signatory-owners. h also provides

a small fraction of its space-segment capacity to non-owner gov-
Ch. 6—Satellite Communications ● 157

Figure 6-1 .—Texas Instruments’ Worldwide Data Communications Network

Information systems and services

TI worldwide plant locations

Central Lake–1985 Richmond Hill—1984 Plymouth—1970 Almelo—1955

Johnson City—1973 Versailles—1954 Attleboro—1959 \ / / /

8edford– 1957 Freising—1988

/

Sherman—1988

Piano—1972

McKinney— 1984

Abilene–1978 1

Colorado Springs—1979

Lubbock–1973

Ridgecrest— 1984 &

Dallas—1930

Lewisville—1978

Temple—1978

College Station—1978~

Austin—1968

Midland-Odessa—1977

Houston—1953

Nice—1981

ieti—1970

iho— 1980

Oya-ma– 1978

Hiji —1973

\

1973

Aguascalientes— 1984

San Salva’dor-1973 Oporto— 1973

I

Buenos”Aires–1957 Campinas–1~3 \

— Location and date connected

Texas Instruments’ worldwide data communications and electronic mail network is an illustration of the

current possibilities for multinational 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

commercial goals and an international organization with important noncommercial goals.

ernments, such as the Soviet Union. How to characterize INTELSAT

has become an element in the policy debates involving INTELSAT

and COMSAT. INTELSAT and COMSAT and those supporting their

positions often denote INTELSAT as a “cooperative” of owner-members. Others, in opposition to these positions, who wish to emphasize the price—and capacity-setting aspects of the organization,

often characterize it as a “monopoly” or a “cartel” composed of

COMSAT and the PTTs. To attempt neutral terminology in this report, we refer to it as a “consortium” or an “international organization” as appropriate.

Competition

International

in the United States Among

Communications Firms

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 market, should they choose to or be allowed to

enter.34

Entry is likely to take place in those areas with the highest profit

rates. This applies to both domestic and international markets. Although most domestic market segments are now contestable, in

the sense that firms are free to enter, firms will pick and choose

carefully for actual entry among the richly differentiated opportlJnities in the communications and information industries that are

available.
. .- . .— - - — --

158 . International Cooperation and Competition in Civilian Space Activities

Figure 6-2.—Texas Instruments’ Information

Level I Host Center—Dallas Level I Host Center—Lewisville

Network Concept

Seismic Level I Center—Austin

o

- \

. Transoceanic cable . Microwave

. Satellite ● Leased lines

Terminals

rs

Terminals Terminals

4 , C @ 9

r

Terminals

Terminals

t . m , .4

Terminals

m

Local area network Color

terminal

Personal workstations

Level I IBM host

(IBM 3033, 3081)

Level II IBM processor

(IBM 4300)

Local area network

Terminals Dial up

terminal

DPS—TI distributed processing

system —~1990/10, T1990/12)

DCP—Distributed communications

processor

DNCS—Distributed network

communication system

BDT—Bulk data transfer

TDT—Transaction

data transfer

This figure schematically displays some of the characteristics of Texas Instrument’s system and shows how it is

controlled and linked.

SOURCE: Texas Instruments.

An important point to make is that competi- into opportunities that become available than

tion among U.S. firms takes place not only in the firms that attempt to deter entry into their tradiservices and facilities markets but also in the fi- tional preserves through a strategy of keeping

nancial markets. Firms that are successful in at- their prices and profits low. This second dynamic

tracting funds are able to expand more rapidly (competition in financial markets) will affect the
Ch. 6—Satellite Communications ● 159

Table 6-5.—Members of INTELSAT: The Major Non-U.S. Telecommunications Providers of

International Satellite Communications Services

Investment sharea

Country Signatory (percent)

Total nine countries with 3 percent or more: 60.7

United States of America . . . . . . . . . . . . . . . .

United Kingdom . . . . . . . . . . . . . . . . . . . . . . . .

France . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Germany, Federal Republic of . . . . . . . . . . . .

Australia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Saudi Arabia . . . . . . . . . . . . . . . . . . . . . . . . . . .

Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Other 99 INTELSATMembers:

aAsof Mar 1, 1964.

Communications Satellite Corp. 23.1

British Telecommunications 12.9

Government of France 5.6

Kokusai Denshin Denwa Co. Ltd. 3.3

Ministry for Post and Telecommunication 3.3

Overseas Telecommunications Commission 3.2

Government of Saudi Arabia 3.1

Empresa Brasileira de Telecomunicacoes S.A. 3.0

Teleglobe Canada 3.0

39.3

SOURCE: INTELSAT. See app. 6C, for a complete listing of the members of INTELSAT and their investment shares.

speed with which the old specialist structures remaining from the era of tight regulation break

down and new specializations based on competitive advantage emerge.

Foreign competition in U.S. long-distance telecommunications (in both domestic and international market segments) is also a possibility now

that the U.S. market is substantially deregulated.

At least one foreign firm is currently seeking to

enter in a substantial way. Cable & Wireless, a

British firm with some U.K. Government ownership, is reputed to be planning to enter the U.S.

domestic long-distance telecommunications market by constructing an extensive fiber optic cable

network laid on railroad rights of way.35 It is quite

possible that telecommunications firms from

other countries will also enter in the future. Cable

& Wireless, in joint venture with U.S. investors,

has also applied for and received a cable landing license for a high-capacity transatlantic fiber

optic cable facility (six fiber pairs) between the

United States and the United Kingdom.3b A Cable

Jscable & Wireless has discussed the possibility with a number

of U.S. railways. (Department of Commerce, U.S. /rrdustria/ Out-

/ook 1984, pp. 46-51). Rights of way along highways, gas or oil pipelines, and electric utility transmission lines may also be usable

(“Golden Opportunity, Can Utilities Move Fast Enough to Cash in

On the Telecommunications Boom?” The Energy Dai/y, Nov. 16,

1984.) Mercury Communications, the new entrant in U.K. domestic telecommunications, is a wholly owned subsidiary of Cable &

Wireless, Ltd.

36 Application of Tel-Optik Ltd. (Cable & Wireless’ U.S. Partner)

for a license to land and operate in the United States a submarine

cable extending between the United States and the United Kingdom, op. cit.

& Wireless subsidiary has already established

service between the United States and Canada. s’

It may be somewhat difficult for European government-owned PTTs to compete directly in the

U.S. market (selling domestic and international

communications services directly to U.S. consumers) without undercutting the diplomatic justifications they make for preserving their monopolies at home.3e Nevertheless, the French PIT has

designed its transatlantic satellites Telecom I and

Videosat III with footprints (transmission area) that

include the Eastern United States. (Any intent to

use them for transatlantic international communications other than to reach French territories

is denied by French telecommunications officials. 39) Self-imposed restraints may not be as

binding for certain foreign private telecommuni-

.—. —

37FCC, “]n the Matter of TDX Systems, Inc. . ., File No. ITC 85-

077, Mimeo No. 3604, released Apr. 3, 1985. TDX Systems, Inc.

is a wholly owned subsidiary of Cable & Wireless.

JBThis reticence may not be as strong in enhanced (computerprocessed) communications services, and entry via INTELSAT Business Services will be easy (Eli M. Noam, “Telecommunications Policy on the Two Sides of the Atlantic: Divergence and Outlook, ”

op. cit., p. 16).

JgThe stated justification for the Telecom I satellite is to Com municate with a French island territory in the Atlantic off of Canada

and French territories in the Caribbean, but there would be no technical reason why it or the successor satellite Telecom I B, scheduled

to be launched in March 1985, could not be repositioned to offer

competition to INTEL5AT or entry into the U.S. market (source:

telephone conversation with France Telecom, Inc., October 1984).

See also “French PTT Chief, COMSAT Deny Telecom 1 Will Compete With INTELSAT, ” Sate//ite News, Nov. 5, 1984. There has also

been a January 1985 French filing with the IFRB for the Videosat

satellite, whose footprint will include most of the Eastern United

States.
160 . International Cooperation and Competition in Civilian Space Activities

cations firms like KDD,@ Japan’s international carrier, however, since they are not government corporations. Cable & Wireless has Ied the way, but

now that British Telecom has been taken private,

it may also become more aggressive. Similarly,

Britain’s Unisat satellite (launch date 1986), which

like the French satellites has a footprint covering parts of North America,41 may not be constrained from competing for U.S. business by its

minority government ownership.

In sum, in the highly competitive, new U.S. telecommunications industry, very large U.S. domestic telecommunications and data processing firms,

as well as a full range of large, small, and foreign

new entrants, are in actual or potential competition with each other for both domestic and international communications opportunities. AT&T

may be able to keep its present dominance in domestic long-distance telephony in the new domestic market, but it will do so only by competitive success. In the long run, technological and

economic forces, which are affecting regulatory

structures in the national markets of other countries, as well as in the United States, appear likely

also significantly to expand opportunities for firms

other than AT&T in international communications

service markets.43 For the present, however, powerful barriers to change in foreign countries are

still limiting these opportunities.

40KDD is forrnal[y a private stock company traded on the Tokyo

Stock Exchange. The private status of KDD can be overemphasized,

however. Very strong Japanese Government influence enters not

only through regulatory channels, but also because large blocks

of stock are owned by government employee pension funds and

other government employee organizations.

41 Depaflments of State and Commerce, “A White Paper on New

International Satellite Systems,” op. cit., p. 25.

qZBritiSh Te[ecom, which had previously been separated from the

postal administration, underwent majority privatization Nov. 28,

1984, and is facing limited domestic competition from Cable& Wireless’ domestic subsidiary (Mercury Communications) and from

enhanced service providers. The expectation that the European PITs

will not enter the domestic U.S. telecommunications market is also

subject to some question. Several European state-owned enterprises

have entered the U.S. market in other industries. For instance, Renault, a French state-owned auto company has a relationship with

American Motors, various European state-owned airlines have effectively competed for U.S.-origin airline passengers, and several

state-owned banks have established active branches in the United

States.

qJOne such technological force impelling change concerns telecommunications equipment. Developments in customer-premises

communications equipment and in computers have undercut regulatory rules that require customers to acquire such equipment only

by leasing or purchasing it from their telecommunications carrier.

Competition in Foreign

Telecommunications Service Markets

In “basic” telecommunications services,44 international competition in foreign markets is practically nonexistent. Most countries outside the

United States do not allow competition even in

domestic long-distance telecommunications; a

telecommunications monopoly, owned by the

government (or, alternatively, in some cases a private monopoly regulated by the government) is

the prevailing mode of industry organization

around the world. While a few countries, notably

the United Kingdom, Japan, and Canada, are

moving toward privatization and limited domestic

competition, they do not as yet envisage competition from foreign (including U. S.) firms. Foreign carriers must transfer control of communications passing into (or through) the country to

the PTT at the international border or to an intermediate cable or satellite consortium that

subsequently passes control to the PTT.

In contrast, at the information services end of

the information/communications continuum,

U.S. and foreign firms, which provide interactive

data processing services, compete in many national markets. For regulation to have practical

effect, a boundary has to be drawn somewhere

between the regulated basic communications industry and the unregulated data processing industry, since they merge into each other. Unlike

the present situation in the United States, in most

countries, the telecommunications entities attempt to monopolize enhanced communications

and value-added network (VAN) services, which

increase the efficiency of communications in private networks. (This latter technique uses computer processing to group communications into

packets going to common destinations.) In a few

countries, private firms, including U.S. ones, are

allowed to compete freely in providing these serv-

— — —

Private purchase and interconnection of telecommunications equipment to the public network have been permitted in the United States

since the 1970s and are now allowed in a variety of other countries. (See Del Meyers, Janice Drummond, and Czatdana Inan,

“World Telecom Spending to Reach $78.5 Billion This Year,”

Telephony, Feb. 28, 1983, p. 43.)

al e., Ordinaw voice, record, data, and television transmission,

where computers are not used to process the communications flow.
.—

Ch. 6—Satellite Communications ● 161

ices. (See app. 6A for a discussion of the international regulatory regime.)

International Facilities Competition

Control of international communications sent

between adjacent countries by land cable, undersea cable, or terrestrial microwave passes bilaterally at the border from one country’s carrier

to the other country ’s. In certain cases, however,

governments and carriers have devised mukilateral mechanisms of joint ownership for international satellites and transoceanic cables (described

further in app. 6A). INTELSAT and INMARSAT are

two such consortiums of international carriers,

and there are transatlantic and transpacific cable

consortiums that are jointly owned by U.S. and

Canadian carriers, on the one hand, and European or Asian carriers, on the other.45

As in the provision of basic international telecommunications services, competition among

firms in the provision of international transmission facilities is also almost universally not

allowed. The closest thing to competition in international facilities in the current regulatory regime

is the competition between INTELSAT and the

various transatlantic cable consortia. Even this

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 facilities, and

by facilities planning processes overseen by the

FCC and other regulatory authorities.46

— —- —

45LJ.s. carrier panicipatim in INTELSAT and INMARSAT is through

COMSAT alone, in its role as a carriers’ carrier, in contrast to the

cable consortiums to which most U.S. service carriers belong.

4b’’Balanced use, ” as used in this report, means the substantial

use of both satellites and cables, without specifying exactly how

this is to come about. At various times in the past, the FCC has

used several formulas to balance the use of satellites and cables

through regulation, including “proportional fill,” “50-50,” and “balanced loading. ” The loading methodology currently in use was negotiated among AT&T, COMSAT, and the European PTTs on a

country-by-country basis and approved by the FCC. It is generally

“in accordance with what is known as the ‘balanced loading’ methodology, ” defined by the FCC as the “distribution ofl circuits among

Recently, these arrangements have been challenged by the would-be private transatlantic and

Western Hemisphere satellite and cable operators referred to above. These potential entrants

have received qualified official encouragement

from either the FCC, the executive branch, or

both. As we discuss below and in appendix 6A,

the capacity additions specified in these applications, together with INTELSAT’s planned additions and the cable facilities discussed within the

official planning process, are far in excess of the

1995 communications demand projected by the

U.S. international service carriers and their European counterparts.47 This would appear to call

into serious question the FCC planning process

and/or the demand projections of the carriers.

The Satellite Communications

Equipment Industry

The large-scale development of the world satellite communications service industry has been

made possible by the development of a large satellite communications equipment industry, particularly in the United States. Despite severe trade

restrictions and growing industrial policy chalfacilities with unused capacity in a manner which, to the extent

possible, seeks to place equal numbers of circuits on all transmission systems” [emphasis added] (Federal Communications Commission, “Second Notice of Proposed Rulemaking in the Matter

of . . . Authorization of Common Carrier Facilities to Meet North

Atlantic Telecommunications Needs During the 1985-1995 Period,”

FCC 85-176, released Apr. 22, 1985, p. 3). See below and app. 6A

for further discussion of facilities regulation.

qTFor transatlantic communications the FCC has received abdications to install satellite capacity of about 120,000 circuits and fiber

optic cable capacity of about 330,000 circuits in addition to the

proposed capacity additions of the traditional consortia listed in

table 6-A2 in app. 6A. See also discussion of alternative satellite

providers below and in app. 6A. The additional 330,000 circuits

of cable capacity, for which cable landing licenses have been applied, are in the cable projects of Cable & Wireless and its U.S.

partners (Tel-Optik) and Submarine Lightwave Cable Co., which

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. manufacturers continue to dominate world sales of communication satellites. U.S. ground equipment

manufacturers, however, no longer dominate the

world market for large standardized Earth stations, and though they still lead in the market for

small Earth stations designed for customer premises, they are beginning to receive strong foreign

competition there as well, 48

World Satellite Markets

For the satellite manufacturing industry, the

non-Communist world market can be conveniently divided into five parts: the United States,

INTELSAT, Canada, Europe and Japan considered

together, and the rest of the world. During the

1965-83 period, INTELSAT was the largest of

these markets, with 35 satellites launched, followed by the United States with 26 (as shown in

table 6-6). U.S. prime contractors manufactured

all 72 of the commercial communication satellites sold outside of Europe and Japan during the

1965-83 period. In contrast, European and JapadBcuStomer premises Earth stations can be defined as stations

which are located at the point of use.

nese contractors produced only the eight satellites launched for European and Japanese buyers

during the same period and sold none outside

of these reserved markets. In the case of the Japanese satellites placed in orbit, a U.S. company

provided many of the components and provided

technical assistance.

In the 1984-89 period, for satellites whose

prime contractors have already been announced,

the pattern is similar, with the one important exception that the United States is expected to be

by far the largest single market, with 53 percent

of the scheduled satellites during this period (see

table 6-6). U.S. satellite buyers are of several

types: private communications firms such as

AT&T, Western Union, COMSAT, GTE, Federal

Express, and IBM’s Satellite Business Systems

(SBS) subsidiary, direct broadcasters (e.g., Dominion Video Satellite Corp.), and several smaller and

newer firms that provide specialized satellite facilities to business and media customers (e.g.,

American Satellite). The three major U.S. satellite manufacturers–Ford, RCA, and Hughes–

have also launched, or plan to launch, their own

satellites for lease or self-use. RCA plans to use

its satellites in its own common carrier operations,

Table 6-6.—U.S. Market Share of Commercial Satellite Prime Contracts

Number of satellites

Seller

No prime

Buyer United States Canada Western Europe Japan selected Total

1965-83:

United States . . . . . . . 26 26

INTELSAT , . . . . . . . . . 35 35

Canada . . . . . . . . . . . . 6 l(l) 7

Western Europe. . . . . 5 5

Japan. . . . . . . . . . . . . . 3(3) 3

Other ., . . . . . . . . . . . 5 5

Total . . . . . . . . . . . . 72 l(l) 5 3(3) 81

1934-39:

United States . . . . . . . 40 40 80

INTELSAT . . . . . . . . . . 20 20

Canada . . . . . . . . . . . . 1 4(1) 5

Western Europe. . . . . 19 19

Japan. . . . . . . . . . . . . . 8(4) 8

Other b . . . . . . . . . . . . . 9 2(2) 2(2) 5 18

Total ., . . . . . . . . . . 70 6(3) 21(2) 8(4) 45 150

NOTE: Numbers in parentheses refer to the number of satellites manufactured by foreign prime contractors but with ma]or

U.S. participation.

qndonesia, Italy, India.

blndonesia, Arab States, Mexico, Australia, Brazil, India, Korea, Argentina, Cuba.

SOURCE: Derived from R. Fllep, A. Schnapf, and S. Fordyce, “World Communications Satellite Market Characteristics and

Forecast,” prepared for the NASA Lewis Research Center, NASA CR-188270, November 1983. Non-Communist countries only are included in the list given here.
Ch. 6—Satellite Communications 163

/ ’

.ation

‘1

both domestically and internationally, and all

three either lease facilities to other firms now, or

plan to.

In the rest of the world, the buyers are almost

always governmental entities such as the Indonesian and other ASEAN49 PTTs, for the Palapa series, or the Arab League consortium of PTTs for

Arabsat.

For the period 1984-89, all sales of communications satellites to U.S. buyers and to INTELSAT

(where prime contractors are known) have gone

to U.S. prime contractors. so All 19 of the European contracts went to European contractors,

and all 8 of the Japanese contracts went to Japanese contractors (see table 6-7). U.S. satellite

manufacturers will still participate in major ways

in four of the eight Japanese satellites to be

launched during this period, but the other four

will be manufactured by Japanese firms without

the formal association of an American satellite

manufacturer and will use key components of

4gAssociation of Southeast Asian Nations.

~~contractors had been selected, however, for only 40 of the 80

announced US. satellites. Whether they will all be built will depend on whether sufficient demand for U.S. domestic satellite communications services develops.

Japanese design.51 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

prime contracts for the current (INTELSAT V and

V-A) and the next (INTELSAT Vl) generation of

INTELSAT satellites, but non-U.S. subcontractors

received contracts for 23 and 21 percent, respectively, of the contract value of the two satellite

series .52

Satellite R&D

Even though NASA funded relatively little communication satellite research and development

during the 1973-83 period, U.S. market dominance persisted. U.S. industry was relied upon

to finance its own R&D efforts. During the same

period, however, foreign government-funded satellite communications R&D increased substantially. At present, the governments of Japan, Canada, United Kingdom, France, Germany, and Italy;

the European Space Agency; and INTELSAT are

all funding significant satellite communications

research programs. 53 This imbalance in government R&D support led to concern in the United

51 R. Filep, A, schnapf, and S. Fordyce, “World Communications

Satellite Market Characteristics and Forecast, ” prepared by Communications 21 Corp., Redondo Beach, CA, for the NASA-Lewis

Research Center, Cleveland, OH, NASA CR-1 68270, November

1983.

sZFilep, et al., op. cit., p. 101.

Jlsee R. Filep, A. Schnapf, and S. Fordyce, “)a Panese and ‘estern European Space Research and Development, ” unpublished paper prepared for NASA Lewis Research Center, Feb. 1, 1984. See

also U.S. Congress, Office of Technology Assessment, /rrfownation

Technology R&D: Critical Trends and Issues, OTA-CIT-268 (Washington, DC: U.S. Government Printing Office, February 1985), ch.7.
. . —— - -. .—

164 . International Cooperation and Competition in Civilian Space Activities

Table 6-7.-Prime Contractors for Commercial Communications Satellites

(by launch period)

Actual Planned

Company Country 1985-83 1984-89

Prime contractor:

[First launch 1983 or before]

Hughes Aircraft . . . . . . . . . . . . . . . . . . . . . . . .

Ford Aerospace . . . . . . . . . . . . . . . . . . . . . . . .

RCA Astro-Electronics . . . . . . . . . . . . . . . . . .

TRW Defense and Space Systems . . . . . . . .

British Aerospace Dynamics . . . . . . . . . . . . .

Melco/Ford Aerospace . . . . . . . . . . . . . . . . . .

C.N,S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Spar Aerospace/Hughes Aircraft. . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Additional prime contractors:

[First launch 1984 or later]

Eurosatellite . . . . . . . . . . . . . . . . . . . . . . . . . . .

Melco (Mitsubishi Electric Co.). . . . . . . . . . .

Toshiba/GE . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Spar Aerospace . . . . . . . . . . . . . . . . . . . . . . . .

Matra Space . . . . . . . . . . . . . . . . . . . . . . . . . . .

Aerospatiale (with Ford Aerospace) . . . . . . .

Siemens/MBB/ERNO/AEG/ANT . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Pr/rne contractor not yet selected: 8

United States

United States

United States

United States

United Kingdom

Japan/United States

Italy

CanadaWnited States

. . . . . . . . . . . . . . . . . . . . . . . .

West European Consortium

Japan

Japan/United States

Canada

France

France/United States

West European Consortium

. . . . . . . . . . . . . . . . . . . . . . . . . . . .

45

10

9

8

4

3

1

1

81

. . . . .

Grand total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

33

10

27

0

9

1

:

84

5

4

3

3

2

2

2

21

45

150

aFor the per[od “~ginrllng of I@Y1 Through “The End of 1999, ” 18 prime contractors have been selected (Of which 11 are

U. S.) for specific satellites. During this same period, 149 satellite projects as yet have no prime contractor selected.

SOURCE: Derived from R. Filep, A. Schnapf, and S. Fordyce, “World Communications Satellite Market Characteristics and

Forecast,” ~reDared for ttw NASA Lewis Research Center, NASA CR-188270, November 1983. Non-Communist countries only are included In the list given here.

States that the United States could be behind in

the technology of the next generation of communications satellites and was a prime motivation for Congress funding NASA’s Advanced

Communication Technology Satellite (ACTS) program at higher levels in fiscal year 1985 than previously. 54 (See below for further discussion of the

ACTS program.)

Competitive Factors in International

Satellite Markets

The price/quality dominance of U.S. manufacturers has been the most important competitive

factor in both the U.S. domestic market and in

INTELSAT contracts. Even the strong dollar has

not hampered their recent successes. Other competitive factors helping U.S. firms are their wellknown experience and the operational reliability

of their satellites.

s~hris Bulloch, “Advancing the Art of Satellite Communications—

Foreign Competition Spurs NASA Satcom Research,” /nteravia, )anuary 1985, pp. 25-28.

Protection and discriminatory government procurement are major factors segmenting world satellite markets and are the major factors determining sales of satellites in Europe and Japan. European and Japanese space development policies

have included restrictions on procurement of

complete satellites in order to favor national development of space technology. 55 Recent policy

changes, however, may make possible the sale

of U.S. communications satellites in Japan.5b

World Earth Station Markets

In contrast to the relatively small number of satellite manufacturers, more than 25 sizable firms

55’’japan’s Satellite Development Program,” Japan Economic institute Report, Washington, DC, No. 11A, Mar. 16, 1984 and

“Aerospace in japan: Competition Through Partnership,” Aerospace

America, March 1985, pp. 68-70. See also Neil Davis, “japan Broadens Domestic Role in Satellite Development, ” Aerospace America, February 1985, p. 27.

Sbsee “New Trade Policy May Boost Japanese Imports of Satellites, ” Aviation Week and Space Technology, May 7, 1984, p. 16;

and William Chapman, “japanese Trade Plan Seems to Open Door

for U.S. Satellite Sales,” The Washington Post, Apr. 28, 1984, p. A20.
Ch. 6—Satellite Communications “ 165

in 7 countries manufacture Earth station equipment (see app. 6B). The equipment for an Earth

station is diverse and includes antennas, tracking systems, amplifiers, ground communication

equipment, multiplex equipment, and, for larger

installations, support buildings and equipment

(for air-conditioning, controls, power, etc.) .57

Earth stations vary considerably in size, from large

stations, such as the INTELSAT Standard A stations that send and receive most international

trunk communications, which have 30-meter antennas, to receive-only equipment whose antennas are less than 1 meter in diameter. INTELSAT

Standard A stations cost $5 million to $9 million

each (higher-density INTELSAT C stations can cost

up to $15 million), compared to 5-meter and

smaller transmit and receive stations that might cost

$200,000 to $300,000.58 Small receive-only stations, such as those used for CATV or home reception, can cost as little as $2,000.59

The larger stations are purchased mainly by

common carrier communications firms, which

carry domestic and international switched voice

and message traffic and television. Common carriers also use medium-sized stations in locations

with smaller traffic volumes. Specialized data and

television carriers and firms operating private

communications networks use medium-sized

Earth stations located on “customer premises.”60

Receive-only stations on customer premises are

typically small and are used only for television

and data reception. They may be purchased by

businesses for point-to-multi-point teleconferencing networks or data transmission (when it can

be carried out at slow speeds) and by home consumers for television reception.

Nippon Electric Co. (NEC), a Japanese firm, is

the largest manufacturer of large nonmilitary

Earth stations, having manufactured approximately one-third of all such stations around the

world .61 The cumulative market shares, by counJzEloise Jensen, Tracey Harbaugh, Kenneth Telesca, and James

Mahoney, “Sector Study–Satellite Earth Stations, ” The ExportImport Bank, Washington, DC, June 1984.

581 ndustry sources.

wu npu b] ished memorandum, Ford Aerospace & Commu n ications, 1981.

‘Chris Bulloch and Paul Rubin, “Satellite Telecommunications—

The Ground Segment Grows, ” /nteravia, November 1984, pp.

1231-1235.

b’ibid., p. 1233.

try, for major suppliers from various countries for

INTELSAT standard A and B stations are shown

in table 6-8. Over the whole period, U.S. major

firms had the largest share–39 v. 37 percent for

Japanese firms–but this larger share of U.S. firms

reflects their early dominance. Japanese firms

now dominate new orders.

In addition to leading in sales of standard

INTELSAT Earth stations, NEC also leads in large

and medium-sized domestic-system Earth stations. It sold in excess of 500 Earth stations in 15

countries prior to 1984 and is particularly strong

in total equipment technology. b2

Despite its worldwide preeminence, up to the

present, NEC has rarely been seen as a major

competitor in U.S. Earth station sales. Nevertheless, it recently penetrated the U.S. market in a

significant way, with the sale of 130 RF terminals

(antennas and radio-frequency electronics) to

IBM’s Satellite Business Systems network. (IBM

provided its own digital baseband equipment.)

in Europe, Alcatel-Thompson/Telspace is the

largest manufacturer of Earth stations, with approximately 580 systems of all types operating,

under installation, or on order. It has supplied

30 INTELSAT Standard A terminals plus another

30 Standard B and C stations for international traffic and 21 for domestic leased-capacity traffic. It

is also supplying 467 stations for France’s Telecom 1 network. Of these, 350 will be the 2.0 to

2.3 meter video receive-only type and 116 will

be 3.5 meter business data transmit/receive terminals.

bzlbid., p. 1234; RiChard Shaffer, “japanese NOW Target Communications Gear as a Growth Industry, ” The Wa// Street Journa/,

Jan. 13, 1983, p. 1.

Table 6-8.-Earth Station Market Shares, By Country

of Supplier, For the Period 1965-82

United States (Harris, GTE, ITT, RCA, Page) . . . . . . . . 39°A

Japan (NEC, Mitsubishi) . . . . . . . . . . . . . . . . . . . . . . . . . 37°/0

France (Thompson CSF, AlcatelThompson~elespace) . . . . . . . . . . . . . . . . . . . . . . . . . 13°\0

Italy (STS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5°\0

United Kingdom (Marconi) . . . . . . . . . . . . . . . . . . . . . . . 4°/0

West Germany (Siemens) . . . . . . . . . . . . . . . . . . . . . . . . 2°\0

Canada (S~ar) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . nla

SOURCE: Derived from Eloise Jensen, Tracey Harbaugh, Kenneth Telesca, and

James Mahoney, “sector Study—Satellite Earth Stations,” The ExportImport Bank, Washington, DC, June 1984.
—. —. — —

166 International Cooperation and Competition in Civilian Space Activities

Although U.S. manufacturers are no longer the

dominant suppliers of large Earth stations as they

were in the beginning phase of satellite communications, they continue to win contracts for

INTELSAT A and B stations and are particularly

competitive in specialized, medium-sized Earth

stations for domestic satellite systems, which are

a growing part of world demand, and in digital

subsystems associated with large station networks. 63 This has resulted in U.S. companies such

as Scientific Atlanta, Harris, GTE, and M/A Corn

increasing their relative share of U.S. exports of

Earth stations or associated equipment. ITT_, RCA,

and Page have seen their exports decline. California Microwave is an important additional participant in the U.S. domestic Earth station market.

Customer-premises Earth stations include small

to medium-sized transmit/receive Earth stations

as well as television and data receive-only equipment. Although reliable sales data is not available for sales of customer-premises Earth station

equipment, because satellite ground equipment

is not broken out of the more inclusive data category for telecommunications equipment as a

whole, it appears that, worldwide, most such stations are manufactured by U.S. firms and sold in

the United States.b4 The direction of technological change is toward higher-power, more sophisticated satellites making possible smaller, less expensive, but technically advanced Earth stations

that can be used for corporate data transmission

and videoconferencing. U.S. firms, represented

by Scientific Atlanta, M/A Corn, and numerous

smaller firms, are still dominant at this end of the

market, and appear to have the technical edge,

particularly in equipment for digital transmission. bs

Television receive-only Earth stations (TVROS),

which are primarily used to feed large or small

television cable networks, are already a large part

of the total demand for Earth stations in the

United States and are becoming so in Europe,

where a major proportion of Eutelsat’s ECS system capacity is devoted to TV distribution.

Whether the market for TVROS will continue to

63Jen5en, @ al., OP. cit., P. 10“

@private communication, International Association Of Satellite

Users and Suppliers, March 1985.

Gsjensen, et al., op. cit., June 1984.

grow will depend on the ultimate popularity of

high-power direct broadcasting systems (DBS) designed to feed very small home TVROS. Scientific Atlanta has supplied over 10,000 Ku-band

TVRO Earth stations to individual cable systems.

The company has also supplied video uplink stations to over 350 U.S. television stations. Harris

Corp., another major U.S. supplier of cable TVRO

stations, is the contractor for 180 ground stations

for NBC television affiliates. DBS receiving dishes,

if a mass residential market develops, will undoubtedly be sold through consumer electronics

channels. Somewhat larger and more expensive

TVRO dishes, capable of tapping directly into existing cable distribution systems, are already being marketed in this way (see app. 66 of this

chapter) .66

A significant and growing number of mediumsize and small Earth stations, ranging from oneway data to full two-way voice and data, are being used in corporate networks and in shared tenant systems operated by office building management firms. These networks, using small send/

receive Earth stations, are now very competitive

in cost with established local and long-distance

telephone companies for two-way voice communication. This has been called the “bypass problem”; the equipment itself is said to embody “bypass technology.”

A U.S. firm, Equatorial Communications Co.,

has been very successful in marketing very small,

receive-only dishes, only 2 feet in diameter, that

permit reception of computer data at relatively

slow speed but at a cost only about 60 percent

of AT&T’s charges for functionally equivalent private-line service. Major corporations, such as the

Associated Press, Reuters, Dow Jones, and E.F.

Hutton, concentrated in the media and financial

sectors, have collectively purchased 20,000 of

these $2,500 one-way dishes in the last 3 years.

In 1984, Equatorial began to sell a new line of

4-ft send/receive digital Earth stations for lowspeed data transmission.67

The most rapid growth in demand for satellite

services (primarily domestic), and in ground

equipment, will probably occur in the data, teleGGBullock ancj Rubin, op. cit., November 1984, p. 1232.

67’’Tiny Satellite Dishes Are Serving Up a Hot New Market, ” Business Week, Mar. 11, 1985, pp. 102, 106.
Ch. 6—Satellite Communications ● 167

vision distribution, and videoconferencing areas.

Business data services are projected to be the

largest growing segment of the satellite communications market. Internationally, INTELSAT has

developed new E- and F-Standard stations for its

INTELSAT Business Service. California Microwave, Fairchild, and GTE are the primary competitors in this field, and Scientific Atlanta has developed an Integrated Business Terminal that is

roof-mounted, fully remote controlled, and requires no air-conditioning. Rural thin-route telephony and mobile services, while not a large

element in total sales, may require a large number of Earth receiving units.

Competitive Factors in International

Earth Station Markets

The competitive factors influencing sales of

Earth station equipment are different in the three

market segments: 1 ) INTELSAT and other large

standardized Earth stations, 2) medium-sized,

“domestic” Earth stations, and 3) television and

data receive-only equipment.

In the world market for large Earth stations,

where typical contracts are in the $5 million to

$15 million range, procurement restrictions and

price (including the cost of financing) appear to

be the principal competitive factors affecting international market shares. The Japanese, French,

German, and Italian markets are essentially

closed to U.S. manufacturers of INTELSAT and

domestic-satellite Earth stations because of government procurement restrictions. The markets

of other European countries, though, are not fully

closed. In recent years there have been sales by

Japanese companies in the United Kingdom,

Sweden, and Turkey. But these markets are not

fully open either. The problem is that the buyers

of large Earth stations are usually PTTs, which are

not covered by the GATT Government Procurement Code, and they typically discriminate in favor of local manufacturers or make other discriminatory purchases. In the case of Japan, even if

the telecommunications sector should be opened

generally to foreign telecommunications equipment, NEC would probably still dominate the

market for large Earth stations for the same reasons of low price and high quality that have led

to its current dominance in other world markets

outside of Europe.

In the rest of the world–the United States, the

smaller industrial countries outside the EEC, and

the developing world—price appears to be the

principal competitive factor in the sale of large

Earth stations. Subsidized financing through the

use of mixed credits has been a determining factor in a some sales to developing countries.68

Other competitive elements in sales to developing countries have been political factors (Frenchspeaking West Africa) and the willingness of suppliers to meet local content thresholds (Brazil).bg

For large Earth stations, superior technical features appear as a competitive factor only in the

digital subsystems. NEC (particularly outside the

United States) and U.S. manufacturers like M/A

Corn, COMSAT, Comtech, and Fairchild appear

to have a competitive advantage in these subsystems.

Technical features are a more important competitive element for medium-size customer premises Earth stations than in large ones, because

technical change is faster and customer needs are

more differentiated. For this reason, restrictive

telecommunications standards join restrictive

procurement practices as trade barriers to U.S.

exports to Europe and Japan .70 Industry sources

in the United States believe that both the Japanese and EEC markets are effectively closed to

U.S. manufacturers of customer premises and domestic-system Earth stations at the present time. ”

Exporting to these markets, however, is likely to

be more possible in the future, as businesses in

foreign countries increasingly come to use customer premises equipment in corporate information/communications networks and seek to control it through ownership, rather than lease it from

GBJenSen, et al., op. cit., app. 11. Also Robin Day Glenn, “Financing of United States Exports of Telecommunications Equipment, ”

International Law Institute, Georgetown University, Washington,

DC, 1982, pp. 34-39.

Ggjensen, et al., Op. Cit., P. 9.

71JAs a Control Data executive put it, ‘‘If you’ re trying tO bring

in a competing product, a written request may gather dust for four

years before it’s certified by the PIT, ” quoted in Gary Stix, “PTTs

Make Life Rough Overseas, ” Computer Decisions, Apr. 9, 1985.

7’ “Europe’s Technology Gap, “ The Economist, Nov. 24, 1984,

pp. 93-98. Shaffer, op. cit.; U.S. Department of Commerce international Trade Administration, Country Market Survey— Telecommunications Equipment: Japan, CMS/TCE/558/83, April 1983;

John Burgess, “japan’s Phone ShakeUp May Profit U.S. Firms,”

The Washington Post, Nov. 18, 1984, p. 51; and “Phone Market:

Japan Keeps Hanging Up on the U.S., ” Business Week, Mar. 11,

1985, p. 67.
. -. . -- ---

168 . International Cooperation and Competition in Civilian Space Activities

the PIT. In the case of Japan, while domestic telecommunications privatization and competition

and trade understandings with the United States

may succeed in opening up some sectors of Japan’s telecommunications market to foreign competition, industry sources are skeptical that it will

have measurable impact in the Earth station

market.

In any case, by far the largest portion of the

world market for customer premises Earth stations

is currently in the United States. In this market,

dozens of established and new firms compete for

the business of corporate networks and sharedtenant systems in office buildings. Because technical change has been rapid in the customer

premises segment, the ability to assist customers

with technical sales support activities is an important competitive factor in addition to price.

At the low end of the market, the receive-only

segment, the world market is again principally

concentrated in the United States. When the

product sold is simply the equipment, the principal competitive factor is price. When the product is sold as part of a data-transmission service

package, however, the price of the equipment

has not been the major factor. The large numbers of small receive-only dishes sold (or leased)

by Equatorial Communications, for instance, are

not in competition with other small Earth stations.

Rather as a required component of Equatorial’s

spread-spectrum service, they compete with terrestrial alternatives such as packet-switching services. price competition may become more intense as new firms enter the market for small-dish

satellite data transmission services, however.

One indication that this may happen in the near

future is that a significant number of firms are now

in bidding competition to provide approximately

50,000 small transmit/receive Earth stations for

Federal Express’s Zap Mail service. Besides Equatorial, the main contenders are NEC, Mitsubishi/

COMSAT, Fujitsu, and Matsushita (in collaboration with Harris and Scientific Atlanta). The bidders on this huge contract ($500 million to $750

million) may be in a position to challenge Equatorial’s dominance in other sectors of the market for small data-oriented Earth stations.

COOPERATION AND COMPETITION ISSUES IN

INTERNATIONAL SATELLITE COMMUNICATIONS

International Context of

Satellite Communications

By its nature, the world satellite communications network is an important arena for international cooperation. The United States participates

with other nations in a number of specialized

international institutions producing satellite communications services and dealing with the regulation of international telecommunication services. Because of the politics of these organizations, U.S. telecommunications interests are frequently linked to wider foreign policy concerns,

and conflict originating in diverse contexts can

spill over into telecommunications matters. *

*See ch. 3 for an in-depth discussion of issues relating to the U.S.

role in international organizations. See also Unispace ’82: A Context for Cooperation and Competition, op. cit.

In recent years the reverse process also appears

to be occurring. Conflicts originating in the satellite communications area now affect broader

U.S. foreign policy interests. These conflicts, in

turn, have grown out of two fundamental trends

in satellite communications:

1. The expansion of the world’s satellite communications industry is producing potential

crowding in the geostationary orbit.72 This

has resulted in conflict with developing

countries in international organizations.73

2. Technology-driven change in satellite networks, data processing, and telecommunicaZ+ee box, p. 174 for a description of the use of the geostationary

orbit for communication satellites.

zJCe~ain industrializ~ countries, notably Canada, may also have

interests that potentially conflict with those of the United States with

regard to the geostationary orbit.
Ch. 6—Satellite Communications . 169

tions generally is upsetting the current international regulatory regime and the existing

cooperative arrangements in satellite communications. 74 It has resulted in conflict between the United States and other industrial

countries.

The expansion of the world’s satellite communications industry has made access to the geostationary orbit an issue. It is basically a “NorthSouth” issue between the industrial countries of

the “North” and the developing countries of the

“South. ” The crowding that is currently developing in that portion of the geostationary orbit

that serves the Western Hemisphere, mostly for

satellites broadcasting in the C band, is the result of the continuing expansion of U.S. domestic satellite systems. A World Administrative Radio

Conference of the International Telecommunication Union scheduled to convene in August 1985

will attempt to develop new international mechanisms to deal with the issue.

Prospective moves by the United States to alter

the international regulatory regime in satellite

communications (discussed above and in app. 6A)

constitute a second major satellite communications issue.75 It is primarily a “North-North” issue

between the United States and other industrial

countries but has an important “North-South”

dimension as well.7b The general issue is whether

the United States should attempt to derive the

benefits of the free market in international telecommunications, as it does in most other industries, even if other countries are opposed to competition.

The most contentious specific issue at present

is whether the United States should allow the entry of U.S. firms into transatlantic satellite communications in full or partial competition with the

International Telecommunications Satellite Orga74’’lnternational regulatory regime” is defined in note 6 above

in this chapter.

TJFor a treatment of how certain aspects of the international regulatory regime affecting frequency allocations evolved, see David

M. Leive, /nternationa/ Telecommunications and /nternationa/ Law:

The Regulation of the Radio Spectrum, Oceana Publications, 1970.

76A currently controversial issue within I NTELSAT is the concern

that less developed countries have about the impact of competition in the North Atlantic on the present global averaging of the

INTELSAT unit charge.

nization (INTELSAT). As described below, an initial move was made in this direction in November 1984, when the Reagan Administration found

that private satellite systems were “required in

the national interest.77 The decision to allow

U.S. firms to launch private satellite communications facilities in competition with INTELSAT

has the potential for causing difficulties with other

governments that actively seek to limit competition in telecommunications. Beyond the INTELSAT

issue, the United States must also face the broader

question of how much conflict to allow into the

necessarily cooperative regulation of international

communications.

A second highly contentious competition issue–

the issue of access for U.S. telecommunications

equipment manufacturers into other industrial

country markets—also arises because the United

States wishes to derive the benefits of free markets in telecommunications equipment, both

within the United States and in international

trade. The open market for telecommunications

equipment within the United States has brought

into sharp relief the restrictionist policies of other

industrial countries toward trade in satellite and

other communications equipment.

These conflicts with other countries in international satellite communications can best be understood in the organizational context in which

the United States participates with other countries in operating and regulating the international

satellite communications system.

U.S. Participation in International

Organizations Concerned With

Telecommunications

In international satellite communications, the

United States interacts with other nations both

through bilateral diplomacy and within international institutions. Outside of North America, formal bilateral telecommunications service agreements of any substance between the United

States and other governments are rare, but biZzpresidential Determination No. 85-2, NJov. 28, 1984. This has

been elaborated in Departments of State and Commerce, “A White

Paper on New International Satellite Systems, ” op. cit.
. .

170 ● International Cooperation and Competition in Civilian Space Activities

lateral activity takes place short of formal agreements. In addition to according representation

to U.S. commercial interests, the Government is

diplomatically active in connection with its participation in the activities and meetings of international organizations.

Such organizations include:

1.

2.

3.

4.

5.

6.

7.

8.

9.

International Telecommunication Union

(ITU):

–Consultative Committee on Radio (CCIR)

–Consultative Committee on Telephone

and Telegraph (CCITT)

—World Administrative Radio Conferences

(WARC)

–Regional Administrative Radio Conferences (RARC)

—International Frequency Registration

Board (IFRB)

United Nations Committee on the Peaceful

Uses of Outer Space (COPUOS)/United Nations General Assembly

United Nations Educational, Scientific and

Cultural Organization (UNESCO) [United

States withdrew at the end of 1984]:

–International Program for the Development of Communication (IPDC)

Universal Postal Union

International Telecommunications Satellite

Organization (INTELSAT)

International Maritime Satellite Organization

(lNMARSAT)

Organization for Economic Cooperation and

Development (OECD):

–Committee on Information, Computer,

and Communications Policy (ICCP)

North Atlantic Consultative Process

(NACP):78

–European Conference for Post and Telecommunications (CEPT)

Organization of American States (OAS):

–La Conferencia Interamericana de Telecomunicaciones (CITEL)

Zswhile not a formal organization’, the North Atlantic Consukative

Process is an organized effort involving the European PTTs, U.S.

International Service Carriers, the Federal Communications Commission and other U.S. and foreign governmental entities in ongoing facilities planning activities. There is an even more informal Pacific Planning Process.

The ITU and Other Specialized

United Nations Agencies

The first four organizations in the above list are

within the United Nations group of organizations

and, if voting takes place, operate within the rules

of one-nation-one-vote typical of such organizations. They perform the international regulatory

functions of setting the legal framework for the

use of space, setting telecommunications standards, allocating radio frequencies, and allotting

positions in the geostationary orbit. The dominant politics of such organizations is the general

politics of “North-South” relations between the

industrialized and the developing nations.

Superimposed on the North-South politics are

the East-West politics of Soviet-U. S. confrontation and the “North-North” alliance-cum-competition politics of the industrial countries. 79 When

substantive regulatory decisions are taken in regular or special meetings of the ITU or other specialized U.N. bodies, the general practice of the

past has been to develop as much consensus as

possible on conventions to be submitted to governments for ratification .80

At ITU meetings, many votes are taken, but to

preserve the consensus on basic issues, delegates

usually agree to reschedule unresolved major issues for later resolution. Certain significant issues

dealing with the allotment of the geostationary

orbit, for instance, were not dealt with at the 1979

World Administrative Radio Conference (WARC)

of the ITU because of their controversiality. instead, the issues were put off for future consideration.81 After limited discussion at WARC ’79,

Tgwithin the industrialized country group, the CEPT countries

often constitute a European regional bloc in telecommunications

matters.

Soln copuos, consensus operation is taken to the extreme in

that voting, even unanimous voting, is not a practice. Unresolved

issues either stay unresolved or are passed on to the Special Political Committee and the GeneraI 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

of space on the grounds that it was the wrong forum and the U.S.

delegate indicated that it was considering quitting the committee

over the issue (Washington Post, june 15, 1984, p. A28).

alThe issue of planning the geostationary orbit was also aired at

the UN ISPACE ’82 conference, without being resolved. (Unispace

’82: A Context for Cooperation and Competition, op. cit.)
Ch. 6—Satellite Communications ● 171

where the contentiousness of the issues became

apparent, the delegates decided to schedule a

special WARC to consider them (see below).

In recent years, a trend toward the politicization of the specialized United Nations agencies,

including those that deal with international satellite communications, has emerged to threaten

the consensus mode of operation, For instance,

at the ITU plenipotentiary in Nairobi in 1982, after

a maximum worldwide diplomatic effort by the

United States and its allies and an explicit U.S.

threat to withdraw from the ITU, a key procedural question bearing on the attempted expulsion of Israel nevertheless almost attracted a

majority and failed by a scant four votes. 82 In

UNESCO, another forum in which telecommunications issues are discussed, politicization was

one issue cited by the United States when it withdrew at the end of 1984,83

Both the politicization of international for a and

the countervailing threats of the United States to

withdraw threaten the cooperative operation of

international organizations, including the ITU and

other organizations dealing with satellite communications. In addition to this general politicization and the U.S. reaction to it, certain factions

composed of developing countries may be increasingly willing to violate the consensus-building mode of operation strictly on telecommunications issues. For both these reasons, the United

States may, therefore, face difficult decisions in

the coming decade if it should find itself on the

losing side in votes taken on contentious telecommunications issues.

The basic calculation implicit in U.S. participation is whether the net benefits are positive

(when all the linkages with other issues and negotiations are considered). Economic costs-higher than necessary communications costs for U.S.

residents and less of an array of services—may

result from the regulatory arrangements of an

achievable consensus. But there may also be the

economic benefits of continued orderly communications that could not otherwise be ensured.

Looked at from another angle, the United States

might have to shoulder significant political costs

in order to persuade reluctant delegates to adhere

to a consensus that benefits the United States.

Thus, there could be significant costs to a policy

of building and adhering to consensus within the

ITU and other international organizations. On the

other hand, confrontation in these for a, or withdrawal from them, could also have large economic and political costs.

Effectively balancing these costs has been a difficult assignment for the diffuse and frequently

ad hoc U.S. policymaking apparatus in international telecommunications. on the one hand,

policy makers must have effective knowledge

about the telecommunications and space sectors

and the importance of substantive matters. On

the other, they must also have knowledge of the

full international economic context of the United

States, the connections of telecommunications

negotiations to this context, and the diplomatic

costs of accommodation or confrontation. U.S.

diplomacy, however, has often not been informed by all these requisite skills.84

Regional Organizations or

Suborganizations in the Americas

Dealing With Satellite Communications

Two entities deal solely with Western Hemisphere communications matters: CITEL (affiliated

with the Organization of American States) and

the ITU Region 2 Regional Administrative Radio

Conferences, which are held periodically. Given

their framework of one-nation-one-vote, they exhibit similar characteristics to those of the full ITU

and other international for a that are similarly

organized.

WAS of December 1984, the ITU had 158 members (source: U.S.

State Department, Office of International Communications Policy).

aJFor a discussion of various U.S. and foreign points Of view on

the withdrawal see “World Forum: the U.S. decision to withdraw

from UN ESCO,” journal of Cornrnunication, vol. 34, autumn 1984,

pp. 81-1 79; and Lois McHugh, U.S. Withdrawal From the international Labor Organization: Successful Precedent for UNESCO?”

Congressional Research Service Report No. 84-202, Nov. 8, 1984.

~See U*S. Congress, office of Technology Assessment, Rad;ofrequency Use and Management: Impacts From the World Administrative Radio Conference of 7979 (Washington, DC: U.S. Government Printing Office, january 1982); and UN/SPACE ’82: A Context

for /rrternationa/ Cooperation and Competition, op. cit. See also

Simon jenkins, “A Diplomat Now Needs Expertise Rather Than Experience, ” Listener, vol. 111, Mar. 22, 1984, pp. 2-4 for a discussion of the diplomacy needed in modern foreign relations.
. . . . . .

172 ● International Cooperation and Competition in Civilian Space Activities

Weighted Voting Institutions

Two international institutions in the satellite

communications area—lNTELSAT and lNMARSAT85—

are controlled through a process of weighted

voting and hence exhibit different institutional

characteristics from the U.N. or regional organ izations. 86

While INTELSAT is an operating organization

that provides almost all of the world’s international satellite communications capacity, it can

also be viewed as an intergovernmental organization whose board of governors establishes policies affecting the two-thirds of intercontinental

communications that pass through its transponders. In this limited sense, INTELSAT is one of the

key elements in the regulation of international

communications. In INTELSAT’S board of governors, a country’s voting power is determined by

its volume of communications on the INTELSAT

system. Because they are the big users, a small

coalition of the United States and a few industrial countries can muster a majority of votes (see

table 6-5, above, and app. 6C of this chapter).

Nevertheless, non-unanimous votes are rare.

Consensus is still the norm in INTELSAT. The consensuses the United States adheres to in INTELSAT,

Ssln the Communications Satellite Act of 1%2, Congress set basic

goals for international satellite communications and of U.S. participation in it. COMSAT, a private corporation, was subsequently

chartered and designated to represent the United States in INTELSAT

and INMARSAT. Most countries are represented in INTELSAT by

their post, telephone, and telegraph (PTl_) administrations.

~The reality of INTELtjAT’s operation has been that of a weighted

voting institution, but the actual legal structure of the organization

is somewhat complicated. The 1973 INTELSAT Agreement provides

for two one-nation-one-vote bodies formally superior to the

weighted-voting Board of Governors. These are the Assembly of

Parties (governments), which usually meets every two years, and

the Meeting of Signatories (telecommunications entities), which

meets every year. With a few exceptions, the powers of these bodies

are not clearly specified in the INTELSAT Definitive Agreements.

See Richard R. Colino, “The INTELSAT Definitive Arrangements:

Ushering in a New Era in Satellite Telecommunications,” European

Broadcasting Union, Geneva, 1973. Both bodies were characterized

in one critical review of INTELSAT (Michael E. Kinsley, Outer Space

and /nner Sanctums (New York: Wiley, 1976), p. 128) as “impotent. ” Nevertheless, the INTELSAT 1982 Annual Report indicates

that the Meeting of Signatories “accepted the recommendation of

the Board of Governors to increase INTELSAT’S capital, ” a rather

important function, if the ability to “not accept” would have any

substantive effect. The Assembly of Parties specifically has the formal power of decision in the INTELSAT procedure of coordinating

with separate satellite systems, a power that has recently taken on

importance. h may be that, in future years, the character of

INTELSAT could take on more of the characteristics of one-nationone-vote organizations, if the Assembly of Parties or the Meeting

of Signatories become more influential.

however, are influenced by its juridical voting

power and not just by its diplomatic efforts.

It would therefore be expected that NorthSouth issues would be muted in INTELSAT, and

this is usually the case. For this reason and because they must manage INTELSAT as a functioning commercial entity, developing-country members have incentives to keep politicization to a

minimum. Nevertheless, because INTELSAT is increasingly likely to be a locus of “North-North”

deregulatory and trade controversies among the

industrial countries, and because developing

countries may be receiving benefits from cross

subsidization (through a process called “global

averaging ), 87the future of INTELSAT is likely to

become a North-North and North-South question at the same time.

INMARSAT, a second international satellite organization, which was established in 1976 and

commenced service in 1982, aims to increase the

efficiency and safety of marine transportation by

providing effective communications.88 Unlike

INTELSAT, INMARSAT does not currently own

its own satellites; instead, it leases or is committed to lease capacity from MARlSAT (a joint venture of U.S. communications carriers), ESA and

INTELSAT.89 To date, it has not been an important arena for international controversy, except

for subtle jockeying among the major industrialized-country members for shares in procurement,

but East-West and North-South politics could become more important in INMARSAT in the future. Politicization of the organization along the

lines of the U.N. Specialized Agencies, is unlikely,

Bzsee, e.g., Testimony of Richard R. Colino, Hearings Before the

Subcommittee on Arms Control, Oceans, International Operations,

and Environment, Senate Foreign Relations, 98th Cong., Oct. 19

and 31, 1983, p. 152.

88As of early 1985, INMARSAT had 43 members (see app. 6C of

this chapter for a list of the members and their voting shares). The

INMARSAT Council, modeled on the INTELSAT Board of Governors, is made up of the largest 18 shareholders plus four additional

country representatives to insure geographical balance. Voting is

weighted according to ownership shares, except that no country

can have a weight greater than 25 percent. The ownership shares

of the six largest country owners were as follows: United States (3o.9

percent), United Kingdom (14.6 percent), Norway (1 1.6 percent),

Japan (7.0 percent), USSR (6.9 percent), and Canada (3.9 percent)

[source: COMSAT1. COMSAT represents the United States in

INMARSAT, as well as in INTELSAT.

89 David W. Lipke, “IN MARSAT Plans for New Satellites, ” Marifacts, March 1983.
Ch. 6—Satellite Communications ● 173

however, because the major maritime countries

are also the major actors, as a result of its

weighted voting mode of governance (see app.

6C). The commercial goals of the organization

also militate against politicization.

Nevertheless, the presence of the Soviet Union

within the organization has resulted in technology transfer controversy with the U.S. Government. COMSAT, which holds the management

contract for INMARSAT, was prevented by the

U.S. Government (through delay of an export license) from providing the results of several small

study contracts to other members of INMARSAT.90

In March 1985, it was reported that INTELSAT

and the U.S.S.R. might sign an information exchange agreement.91 Although it would be premature to assume that such an agreement would

lead to U.S.S.R. membership in INTELSAT, such

membership might intensify U.S. concern about

issues of technology transfer. The People’s Republic of China is already a member, as are Vietnam and Afghanistan.

Industrial Country Organizations

In addition to INTELSAT and INMARSAT, the

United States participates in two other organized

groups that are ordinarily concerned with international telecommunications between the industrial countries, the Organization for Economic

Cooperation and Development (OECD) and the

North Atlantic Consultative Process (NACP).

The OECD92 provides a setting where industrial countries can reach understandings on satellite communications (as well as many other)

issues and also can develop coordinated positions

on North-South issues. A special arrangement

concerned with the terms of export finance in satellite ground segment equipment, for instance,

has been reached under the aegis of the OECD.

In the NACP (in coordination with similar planning

‘Conversations with industry sources in 1983. See below, p. 192.

9’ “U.S.S.R, May join INTELSAT Consortium Within 2 Yearsr”

Washington Post, Mar. 13, 1985, p. 1; “Fingerprints on the SelfDestruct Button, ” Chronicle of /nterrrationa/ Communication,

March 1985, p. 1.

gZMembership includes the United States, Canada, Japan, Australia, New Zealand, and the governments of all European industrial market economies.

within INTELSAT), an ad hoc group of representatives of U.S. and European governments and/or

their communications carriers discuss communications facilities planning for transatlantic communications. While not a formal organization,

per se, because it has no charter or secretariat,

the NACP and its working groups (NACPWG)

constitute one of the most important elements

in the international regulatory regime93 affecting

U.S. international communications.

U.S.-Europe controversy over liberalization in

international communications has recently increased as the newly deregulated long-distance

communications industry in the United States has

attempted to deal with the European industry,

with its general preference for restrictions on entry and trade in both international telecommunications services and equipment. It finds a locus

in INTELSAT, INMARSAT, OECD and the NACP,

as well as in relations between carriers and governments. There is a good possibility that differences among the industrial countries over how

to structure international telecommunications will

make it difficult for the North to take a unified

position in some North-South disputes, and it may

result in a position of isolation for the United

States on certain telecommunications issues in

international organizations and meetings.

Space WARC and the Issue of the

Allotment of the Geostationary Orbit

“Space WARC,” whose first session “ORB-85”

will convene in August 1985, is one of the ITU

World Administrative Radio Conferences that regulate international satellite communications.

ORB-85 will attempt to resolve the issue of equitable access for all countries to the geostationary

orbit by devising mutually acceptable changes in

the arrangements by which radio frequencies and

orbital locations are assigned. Three years later,

the second session–ORB-88–is designed as a follow-on and implementing conference and will

provide an opportunity to fine-tune decisions

reached at ORB-85.94

gl’’lnternational Regulatory Regime” is defined in note 30 above

in this chapter.

%ee A. M. Rutkowski, “The Space WARC,” Telecommunications, january 1984 and “Space WARC Momentum Builds,” Chronicle of /nternationa/ Communication, october 1984, vol. 5, No. 8.
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 frequencies are 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 ITU generally. Alternatives to even a poorly functioning

ITU all have serious disadvantages from the U.S.

point of view.9b

Potential Western Hemisphere Crowding

Important to U.S. Satellite

Communications Operators

In the geostationary arc above the Western

Hemisphere, the problem of actual scarcity may

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 satellites in orbit

or assigned orbital locations by the Federal Communications Commission for launch 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 unless a

satellite currently in orbit is deactivated. A study

done recently for NASA by Western Union Telegraph Co. concluded that crowding in the C and

Ku bands will be such that slots in the higher frequency Ka band (30/20 GHz) will be needed for

U.S. domestic communications starting in the

early 1990s.98 The conclusions were based on

rapidly expanding demand for domestic satellite

communications. If it does not materialize, the

95See, e.g., FCC First Report and Order in the matter of ORB85], FCC 85-94, released Mar. 1, 1985.

For ational discussion of policy options regarding U.S. participation in the ITU, see ibid. and Leslie Milk and Allen Weinstein,

“United States Participation in the International Telecommunication Union: A Study of Policy Alternatives, ” paper prepared for the

Department of State as part of its external research program,

undated.

9TFCC, “united States Domestic Satellite Summary, ” unpublished

table, jan. 11, 1984.

gswestern Union Telegraph Co., Government Systems Division,

“Satellite Provided Fixed Communications Services: A Forecast of

Potential Domestic Demand Through the Year 2000,” Final Recrowning would be less or, with low demand,

might not occur at all.

The issue for the United States at Space WARC

is that crowding in the C and Ku bands would

occur sooner under an institutional arrangement

favored by many less developed countries in and

out of the Americas. In various versions this

would essentially assign future rights to the geostationary orbit to individual countries, utilizing

an a priori planning process to do so. The availability of geostationary arc locations for the United

States for C and Ku band transmission could be

reduced, under such a scheme, because particular slots would be reserved prior to use and might

port-Executive Summary, NASA Contractor Report 168145, August

1983, p. 4-1. Ka band (30/20 GHz) commercial satellites are not

yet in service in the United States, although several are proposed

for launch in the late 1980s. Because of its size and current nonutiIization, the possibility of crowding in the Ka band is distant.
Ch 6—Satelle Communications 175

be unused for lengthy periods of time.99nder

the current system of registration and coordination, slots are not reserved but are made available on a first-come-first-served basis.

It is, of course, possible that under an a priori

scheme slots could be made available to U.S. satellite operators by the countries to which they

were allotted, on a rental basis or under an arrangement whereby capacity on U.S. satellites

was exchanged for the right to use the slots, These

arrangements, even if they could be made, would

undoubtedly have direct financial costs and also

indirect costs whenever the arrangements resulted in decreased flexibility.

Thus, whether reserved slots would be made

available to U.S. satellite operators under rental

or other arrangements or not, the economic issue

for the United States in Space WARC is still the

possibility of both an increase in the cost and a

reduction in the effectiveness of its use of the

geostationary orbit in the C and Ku bands.

A somewhat different consideration is that if

some a priori arrangement did come into force

in the 1990s for the C and Ku bands, the United

States would have a stake in trying to assure that

the ground equipment associated with retired satellites would not be made artificially obsolete.

This could happen if no appropriate slots would

be assigned for replacement satellites to utilize

it. Under current ITU [International Frequency

Registration Board] rules, the problem would not

arise in most circumstances, since a replacement

satellite with the same technical characteristics

as a defunct one can be placed in the same slot

without a need to go through the complete IFRB

registration process.

Access to the Lower Frequency

Satellite Transmission Bands

Important to Developing Countries

The United States argued at the UNISPACE ’82

conference that technological advances that allow more intensive use of the geostationary orggsuch an a priori allotment scheme was actually incorporated

in the 1977 Broadcasting-Satellite Plan for ITU Regions 1 and 3.

It arbitrarily allotted a minimum of four or five transmission links

to every country irrespective of any requirements (FCC, op. cit.,

Mar. 1, 1985, p. 43, note 127).

bit for C and Ku band transmissions, such as frequency reuse, better station keeping, shaped

beams, scanning spot beams, superior ground

equipment, and closer spacing are likely to put

off the day of scarcity in these bands for the foreseeable future.100 (This is contradicted by the

Western Union study, which states that such

scarcity may arrive in the early 1990s.) Furthermore, the United States has argued, the availability of the very high capacity Ka band (30/20 GHz)

for satellite transmission reduces the importance

of potential crowding in the lower frequency

bands. When scarcity does arrive for the C and

Ku bands, satellite communications can begin to

be transmitted in the higher frequencies of the

Ka band.

Representatives from developing countries

have pointed out, however, that satellite systems

transmitting in the lower frequency C and Ku

bands are less costly at given satellite power levels

and less technically demanding than satellite systems transmitting and receiving at higher frequencies. The space segment technology for transmission in these bands (particularly the C band

technology) is now widely known and ground stations to receive this transmission are less costly

than those designed for receiving transmissions

at higher frequencies. As such they are more suitable for the rural and remote area communications that are thought to be an important satellite

communications contribution to rural development in developing countries.

Developing country representatives have also

stated that the present first-come-first-served system allows the industrial countries to exploit a

scarce global resource that is the “common heritage of mankind” and, this being the case, developing countries should also benefit from the

common heritage by using it or profiting from its

use.101 They fear that if first-come-first-served

assignment of orbital slots continues in the C and

Ku bands, the industrial countries will have made

Competition, op. cit.

IOITaking a different approach, certain equatorial cOIIntrles have

claimed (without much international support) that the geostationary

orbit above their territories is within their national jurisdictions. In

1976, seven equatorial states, including Colombia, Ecuador, and

Indonesia signed the Bogota Declaration claiming sovereignty over

portions of the geostationary arc.
176 . International Cooperation and Competition in Civilian Space Activities

substantial further investments in ground equipment appropriate to those bands. The existence

of this investment will then constitute an argument for renewing the supposedly temporary

assignments, and the developing countries will

have lost out permanently.102 The developingcountry proposals for a system of a priori allotment of orbital slots are based on these ideas of

common heritage and equitable access.

A Priori Planning Would Tend to Increase

Crowding in the Geostationary Orbit

The United States has an important stake in

Space WARC. Any a priori planning system to assign the remaining orbital slots in these bands

(plus previously occupied slots that become vacant) would tend to increase the crowding already experienced by U.S. communications carriers in the C and Ku bands, if it should place a

significant number of slots out of their reach. (It

should be noted that any allotment scheme decided on by ORB-85 and implemented in detail

in ORB-88 would not take affect until 1989 at the

earliest.) By then almost all of the slots above the

Western Hemisphere that are desirable for U.S.

domestic communications may well have already

been occupied (mainly by U.S. domestic satellites).

If both U.S. launch schedules and the Space

WARC schedule are maintained, the question of

greatest economic importance to the United

States would seem to be whether slots then occupied by U.S. satellites would be reassigned to

other countries when U.S. satellites are decommissioned. Other countries will, of course, be

aware of the possibility that U.S. satellites may

occupy most of the desirable slots before a planning scheme could go into effect under the present conference timetable. Their ORB-85 positions

may, therefore, include proposals for early implementation of any planning scheme adopted

and rigid safeguards to stop first-come-first-served

occupation of geostationary slots by U.S. satellites in the late 1980s.

10zThiS argument, in fact, is made explicitly in an FCC ORB-85

preparatory document (FCC, op. cit., Mar. 1, 1985, app. B, p. 8).

Close Substitutes to C and Ku Band

Satellite Transmission Set Limits on

the Economic Cost of Crowding

Fortuitously, at the same time that potential

crowding in the geostationary orbit has appeared,

it has also become apparent that that the United

States can expect to have two important close

substitutes for satellite capacity in the C and Ku

bands in the 1990s:

1. satellites transmitting in the large Ka band

(30/20 GHz), which, however, requires more

sophisticated satellites and ground-segment

equipment; 103 and

2. the developing domestic and international

fiber optic cable network.104

The existence of these two substitutes clearly

limits the potential economic damage to the

United States of losing C and Ku band capacity.

Ka band capacity, which has yet to be fully developed, will probably be somewhat more costly

than that in the C and Ku bands, since, for many

applications, more sophisticated satellites and

Earth stations will be required to avoid significant

effects from the rain attenuation of satellite signals. For certain high-volume uses, there is a possibility that Ka band technology, when it has been

developed sufficiently, may be more cost effective than C or Ku band technology, or that the

penalty will be very slight, but there seems to be

general agreement that there will be some cost

penalty in most cases for U.S. carriers to substitute Ka band transmission for that in the C and

Ku bands.

There also is general agreement that the emerging fiber optic domestic and international cable

networks will be fully competitive with satellites

using C and Ku band technology and may in fact

be technologically preferred (see discussion

above and in app. 6A). A relative shift toward fiIOJSee the discussion below in this chapter of the NASA ACTS

program.

IOdWhile terrestrial networks are a close substitute for satellites

for point-to-point communications, and technically could distribute point-to-m ultipoint communications, they would generally not

be used for the latter, unless there were excess network capacity,

because of the long-run cost advantage satellites have for pointto-multi-point applications.
Ch. 6—Satellite Communications ● 177

ber optic cable transmission for new domestic

and international telecommunications capacity

is expected to take place in any case. Less availability of C and Ku band capacity might simply

make this shift take place sooner or take place

to a greater extent than otherwise. Furthermore,

because of fiber optic efficiencies, there may not

be a cost or service penalty for the shift. Again,

this is uncertain, because fiber optic technology

is still evolving too rapidly to allow reliable cost

projections for the period beyond 1990, when

any arrangements determined in Space WARC

would come into force.

It should be emphasized that the need for substitutes for C and Ku band capacity and any cost

to the United States of using them would only

occur if serious crowding, in fact, did materialize

in the two bands. Crowding might not materialize

if there were a major shift toward fiber optic and

other terrestrial transmission modes for the types

of U.S. domestic communications now carried

by satellite and if earlier projections of direct

broadcasting demand prove high.105

Foreign Policy Linkage

On the other side of the ledger, the foreign policy cost that the United States would have to pay

for an isolated, combative stance at Space WARC

against a priori planning of the geostationary orbit must also be considered. Just as the U.S. influence in any Space WARC consensus will depend on the wider influence that it exercises in

North-South politics, so will a break in consensus politics of Space WARC affect the ability of

the United States to further its general foreign policy objectives.106

The U.S. stance at Space WARC also involves

a link with U.S. national defense communications

requirements. Any breakdown in the current inIOSDireCt broadcasting ventures have been holding back because

of competition from cable television and video cassettes, and the

part of the spectrum reserved for this use maybe available for other

uses. See “FCC Asked to Delay Radio Spectrum Shift,” Washington Post, Apr. 9, 1985, p. D3.

lobone clos~by linkage that may play a role in the outCOme of

the Space WARC sessions is the linkage with INTELSAT politics.

One study suggests a U.S. negotiating strategy that would utilize

that linkage. See Wilson P. Dizard, “Space WARC and the Role

of International Satellite Networks, ” Georgetown University Center for Strategic and International Studies, Washington, DC, August

1984.

ternational arrangement on frequency assignments or orbital slots might bring into question

the availability of frequencies for military communications. Consequently, there is understandable concern in the U.S. military establishment

about anything that might upset the international

consensus on arrangements for frequency use.

The problem facing the U.S. delegation and the

Administration behind it will be to weigh the various aspects of this issue against each other. The

Congress, in its oversight capacity and also because (in the Senate) it will have to decide whether or not to ratify any WARC agreement the

United States has signed, will also have to weigh

the consequences of various courses of action in

Space WARC.

Assistance to Developing Countries

The issues involved in assistance to developing countries in the area of satellite communications are complex and intertwined with general

development assistance issues. Should the United

States use international institutions, such as

INTELSAT, the ITU, and the World Bank, as

mechanisms for development assistance or would

bilateral U.S. Agency for International Development (AID) programs be more effective in achieving U.S. objectives? Should Congress direct more

U.S. development-assistance resources into telecommunications or leave such decisions to AID

and other agencies?

Assistance Through INTELSAT’S

Operations

The Communications Satellite Act of 1962 directed:

care and attention . . . toward providing

[sa;ellite communications] services to economically less developed countries and areas as well

as those more highly developed . . .107

The INTELSAT Agreement speaks of extending

services to all peoples and to all areas of the

world, and INTELSAT has brought many cities in

the developing nations into the global satellite

network.1~ Developing countries with INTELSAT

lozcommunications Satellite Act of 1962, Sec. loz(b).

loasee preamble t. the Agreement, app. 6D of tt-tis chapter.
—.— -

178 ● International Cooperation and Competition in Civilian Space Activities

Earth stations now no longer need to pay extra

tariffs to route their international communications

to other developing countries through cable systems that pass through the industrialized countries. They also have the opportunity to lease

spare INTELSAT capacity for domestic communications when terrestrial communications or satellite ownership are impractical.109

While the INTELSAT network has brought modern communications to major cities in the developing world, it has not met the needs of dispersed

populations in rural areas or island territories, for

example, in the pacific, where small populations

live in widely dispersed settlements in a dozen

sovereign nations and territories. INTELSAT Earth

stations of current design are too expensive for

use in these contexts. Such expensive Earth stations are required because transponders of higher

power than INTELSAT has deployed on its satellites are necessary to make possible small, inexpensive ground terminals to handle one or two

telephone channels.

The current smallest Earth terminals for

INTELSAT connection are expensive: the type

(Std B) installed in Micronesia in 1982 cost $1.6

million. In an effort to make satellite communications more widely available, the INTELSAT

Board of Governors approved in 1983a new (Std

D) class of small terminal for isolated areas. In

one estimate, this terminal alone will still cost

about $60,000 initially. 110 Even with significant

cost reductions when mass-produced, Earth station costs of this magnitude, together with the

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.111 Because of this, INTELSAT, in collaboraIOq NTELS~T 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 Corrrmunications and Broadcasting, vol. 1, No. 1, April 1983.)

1 IOAviation Week and Space Technology, Jan. 16, 1984, P. 203.

1 llln any case, INTELSATf S new low-density services will be useful

in certain commercial applications. For instance, a low-density

INTELSAT Vista system, also using Std D-1 5-meter antennas, will

be used by a U.S. multinational oil company for communication

with its drill sites starting in 1985 (Thomas A. McIntyre and Robert

H. Emberley, “The Vista Link From Madagascar to Houston, ” Te/ecornrnunicatiorrs, April 1985, pp. 66g-66q).

tion with other organizations, has proposed a 16-

month satellite test and demonstration program

to experiment with health and education programs for populations in remote areas. INTELSAT

would provide technical advice and free satellite transmission time using spare capacity.112

Assistance Through the ITU

The International Telecommunication Union

(ITU) is considering forming a Center for Telecommunications Development to assist developing countries. Such a center has been proposed

in the report of the Independent Commission for

Worldwide Telecommunications Development

(informally known as the Maitland Commission),

which has been financially supported by the

United States, other governments, and U.S. private firms. ’ The center would offer both general advice and analysis on telecommunications

development and assistance in detailed project

planning with the aim of “bringing all mankind

within easy reach of a telephone by the early part

of next century.’” 114

While not opposing multilateral communications programs in general (e.g. World Communications Year ’83 and the Maitland Commission

itself), the Reagan Administration has opposed

channeling U.S. Government development assistance funds to any significant extent through

such programs. ’ 115 Thus, it is not expected to

budget more than minimal funding for the Center and certainly does not favor funding it through

a tax on international telecommunications traffic.

112sate//jte News, Aug. 20, 1984.

11 jlndependent cOmmi55ion for World Wide Telecommunications Development, “The Missing Link, ” International Telecommunication Union, December 1984. See also Chronic/e of /rrternationa/ Communications, August 1984, pp. 1-2, September 1984,

pp. 1-3, and December 1984, p. 5.

1 IAlndependent Commission for World Wide Telecommunications Development, op. cit., p. 5.

‘‘5’’Cancelled Ticket to Arusha,” Chronic/e of/nternationa/ Cornrnunication, March 1985, p. 1.
Ch. 6—Satellite Communications s 179

Assistance Through Multilateral

Lending Institutions

Developing countries spend approximately $8

billion per year on public telecommunications

plant (1983 figure cited in the Maitland Report116).

Most of the external finance for this expenditure

comes from commercial sources, augmented by

officially supported export credit from exporter

countries. Only about $200 million per annum

comes from the World Bank; other regional lending institutions, such as the Inter-American Development Bank or the Asian Development Bank,

are also not active in financing telecommunications projects. ’ 117

Using U.S. influence to encourage international

lending institutions to give more emphasis to telecommunications lending is a multilateral akernative to the proposed ITU center. Particularly in

the case of the World Bank, it would have the

advantage of keeping telecommunications lending in the context of the Bank’s ongoing country

development assistance programs.118 It would

also make use of its project analysis capabilities,

its influential status with both developing country governments and industrial country lenders,

and its relative freedom from politicization,

Bilateral Assistance

How to help bring the benefits of satellite communications technology to more people in developing nations is also a policy issue for U.S.

bilateral assistance programs.119

In the 1970s, the United States used its Applications Technology Satellite series (particularly the

highly capable ATS-6) and other programs to

demonstrate some of the applications of communications satellites in health, education, and agriculture. After year-long experiments in the United

States (Health, Education, Telecommunications

1161 ndependent commission for World Wide Telecommu niCations Development, op. cit., p. 57.

I I Tlbid., app, Vll, P. 121,

I Iasee Robefl j. Saunders, Jeremy j. Warford, and Bjorn Wellenius,

Telecommunications and Economic Development, World Bank

Publication, Johns Hopkins Press, Baltimore, 1983 for an examination of the issues involved in World Bank lending for telecommunications.

119A discussion of these benefits can be found in ibid. and in “De.

velopment Communications, ” Policy Determination PD 10, U.S.

Agency for International Development, Feb. 17, 1984.

Experiments) and in India (the Joint U.S.-India Experiment in Educational Broadcasting), the ATS6 was used in a 3-month project (AIDSAT) by

NASA and AID to show a number of other countries (27, in all) what was possible. The United

States and Canada later cooperated in the Kuband Communications Technology Satellite program to demonstrate applications in education,

health, and specialized community services.

These programs were phased out beginning in

1973 after the Nixon Administration decided that

the Federal Government would no longer undertake advanced technology development for communications satellites or satellite demonstration

programs. Some funding for Earth station demonstration projects continues.120

In 1982, the United States established the U.S.

Telecommunications Training Institute (USJTI) to

train developing country nationals in basic and

advanced telecommunications technologies and

management. USTTI is a nonprofit independent

corporation administered by a board of directors

representing both industry and govern merit.’ 121

Expenses of the training program, including travel

and living expenses, are shared among the Government and the telecommunications companies

on whose premises the training takes place. * The

program is supported by such corporations as

AT&T, IBM, GTE, Western Union, MCI, and

COMSAT. Some 400 people from 65 developing

countries were trained in 1983 and 1984, the first

2 years of operation. As a result of the program,

graduates will be better informed about U.S. telecommunications products, and some may be in

a position to influence procurement decisions. ’ 122

IZOU.S. development assistance efforts in telecommunications in

fiscal years 1983 and 1984 were estimated by the Academy of Educational Development to exceed $422 million in loans and grants.

These efforts, in addition to financing the purchase of U.S.-produced

equipment, trained 1,153 LDC participants, arranged at least 63

distinct technical assistance and training programs, and served over

100 countries. Twenty-five U.S. agencies had such activities, but

only the Export-import Bank, Overseas Private Investment Corp.,

Agency for International Development, and U.S. Information Agency made monetary estimates and these are included in the total.

(Chronic/e of/nternationa/ Communication, September 1984, p. 7).

121 U.S. Telecommunications Training Institute, course ci3ta/Og,

1983-84.

*Travel and living expenses of participants are financed by a variety of sources, including AID, international institutions, and private firms. Participants from some high-income oil exporting countries receive support from sources in their own countries.

lzZThe president’s Task Force on International private Enterprise,

Report to the President, December 1984, p. 114.
180 ● International Cooperation and Competition in Civilian Space Activities

The program is, in part, a response to telecommunications training programs conducted by

training centers in France and Japan, which also

combine development assistance with export

promotion. 123

While AID anticipates substantial increase in

support for communications activities, aside from

the USTTI program and limited investment in

communications infrastructure, it “does not expect to support communications as a distinct program sector. ’’124 It plans to focus its spending on

specific cost-effective communications applications on a bilateral basis within projects in its principal development sectors, agriculture, education, health, nutrition, and population.

With respect to developing country investment

in communications infrastructure, Al D plans primarily to concentrate on providing technical

assistance and training that will help countries:

1) assess their technology needs both for specific sectors or functions and for entire communications systems; 2) plan for infrastructure expansion; and 3) develop operational and maintenance skills for existing as well as new infrastructure, rather than to provide support for the acquisition of such equipment as telephone switching systems, radio or television broadcasting

facilities, or communications satellites and ground

stations. It takes this position because “other financing mechanisms (both conventional and

confessional) exist for communications infrastructure.” The door is not closed to “add-ens”

of specialized equipment, such as satellite ground

stations, though, which would extend the country’s communications systems in ways that would

accomplish development objectives.

AID also does not intend to finance substantial multilateral development activities in communications and will avoid financing host country

participation fees or membership contributions

in international organizations or regional/international communications infrastructure.

IZJEli M. Noam, “Telecommunications Policy on the Two Sides

of the Atlantic: Divergence and Outlook, ” op. cit., pp. 4-5.

1

2 4 ’’ Development Communications,” Policy Determination P D

10, op. cit., p. 5.

International Trade in

Telecommunications Services

The principal issues in the regulation of international satellite communications services involve

how much competition the United States should

seek and how aggressively it is prepared to seek

it. Despite important deregulatory moves affecting the international arena, which have mostly

been offshoots of deregulatory actions in the

newly competitive domestic market, the FCC and

the Reagan Administration have been rather cautious in extending deregulation directly into international communications. For the most part,

the foundations of the international communications regime described above and in app. 6A, in

which competition is severely limited, have hardly been touched. As this discussion and that in

app. 6A indicate, however, harbingers of change

are appearing in virtually every aspect of international satellite communications, as technological and market forces begin to chip away at aging

regulatory structures.

Competition for INTELSAT

Competition for INTELSAT is a partial exception to this generalization. Currently INTELSAT

has a near monopoly on intercontinental satellite communications facilities, and the recent executive branch decision to sponsor the entry of

private U.S. satellite systems in competition with

it is a purely international regulatory decision that

did not grow out of domestic deregulation.

In the Preamble of the INTELSAT Agreement

the contracting parties state that in establishing

INTELSAT their intention was:

. . . to continue the development of this telecommunications satellite system with the aim of

achieving a single global commercial telecommunications satellite system as part of an improved global telecommunications network

which will provide expanded telecommunications services to all areas of the world and which

will contribute to world peace and understanding . . . 125

lzsThat goal was achieved: the original 1965 satellite with one

Earth station in the United States, another in Canada and a few

in Europe had led to a system of 15 satellites in 1984, covering three

ocean regions with 981 operating or approved Earth stations in 172
Ch. 6—Satellite Communications ● 181

The term “single global commercial” system

implies to some that INTELSAT is to have a permanent monopoly over virtually all international

communications carried by satellite, while others

see INTELSAT as only one element, a major one

to be sure, but only one, in the developing international telecommunications industry, where

competition will also be an increasingly important principle.

INTELSAT argues that it receives sufficient competition from transoceanic cables and that this

competition between transmission media will intensify in the future as the TAT-8 and other fiber

optic cables come into operation in the period

just before and after 1990.126 Any more competition from private satellite companies, in the

INTELSAT view, would further reduce the scale

of INTELSAT’S operations and raise the price of

INTELSAT’S services, since its costs would be recovered over a smaller volume of traffic. This

judgment of higher prices, of course, would not

hold true if a competitive market developed in

which competition forced all satellite prices

down, including INTELSAT’S.

INTELSAT officials fear that growing numbers

of competitors to INTELSAT might result in the

decline of the system and its eventual replacement by poorly connected regional systems. Several regional international satellite systems, described earlier in this chapter and in app. A, have

recently emerged. All have been through or are

going through a process called the “INTELSAT

coordination process, “ in which proposed new

international satellite services are presented to

INTELSAT for a finding of whether they are technically compatible or in the case of “international

public telecommunications services” whether

they will cause it “significant economic harm.”

Parties to the INTELSAT Agreement, including the

United States, have bound themselves to go

through the somewhat cumbersome consultation

countries or territories. The number of telephone channels went

from 150 to 60,000, while the annual tariff per voice half-circuit

went from $93,000 to $4,680 [in 1983 dollars] (I NTELSAT Annual

Report, 1983; converted to 1983 dollars using the U.S. GNP

deflator).

I zbTestimony of Richard R. Colino, Hearings Before the Subcommittee on Arms Control, Oceans, International Operations, and Environment, Senate Foreign Relations, 98th Cong., Oct. 19 and 31,

1983, p. 25.

process in Article XlV(d) of the agreement with

respect to proposed systems offering separate

public international services, but are not obligated by the agreement to do more than that (see

app. 6D of this chapter for the text of Article XIV

and related parts of the INTELSAT Agreement) .127

The INTELSAT Assembly of Parties, a one-nation-one-vote body, which ordinarily meets biennially, is charged by Article XIV with making

INTELSAT’S recommendations to the parties (governments) proposing to establish satellite systems

separate from INTELSAT as to whether, in its

opinion, they will or will not cause significant economic harm to INTELSAT.128 To date INTELSAT

has approved at least some of the services to be

offered by the four regional systems, usually on

the grounds that the communications services to

be carried would not to any significant extent

have been carried on INTELSAT, because they

would have been carried on terrestrial media instead, or not sent at all. The Palapa, Eutelsat, and

Arabsat systems have been approved for this reason, even though they carry international message telephone service and other communications of the type INTELSAT typically carries.

The development of a Western Hemisphere regional system composed of satellites and Earth

stations owned by a diverse set of mostly private

entities rather than by a regional organization of

governments, however, has been delayed for several years because of INTELSAT coordination difficulties. By March 1984, the FCC had conditionally approved a total of 114 applications for

regional international service in the Americas involving U.S. and Canadian domestic satellites, but

IZ7A recent Adm ir-iistration ~licy paper, however, asserts that

the “United States is committed to ensuring that non-l NTELSAT

satellite systems are technically compatible with existing and

planned INTELSAT satellites and to avoiding significant economic

harm to the global INTELSAT system (Departments of State and

Commerce, “A White Paper on New International Satellite Systems,” op. cit., p. 17.

1 ZaThe I NTELSAT c~rdination procedures and criteria of economic harm have not been fully developed, and guidelines are now

under consideration within INTELSAT. If the proposed services are

international but not public, they fall under Article XlV(e); ;( they

are public but domestic they are coordinated under Article XIV(C),

The Assembly of Parties has as yet not adopted an official definition of “significant economic harm, ” the number of cases decided

have been few, and the findings to date have in almost all cases

been in favor of the proposed systems.
182 . International Cooperation and Competition in Civilian Space Activities

Photo credit: Nationa/ Aeronautics and Space Administration

Artist’s conception of INTELSAT V, for which the U.S.

company Ford Aerospace was the prime contractor.

many of these were on hold awaiting State Department, foreign government, or INTELSAT action. As of March 31, 1985, the FCC had given

final approval to 46 applications for services to

Canada, Mexico, Central America, and the Caribbean. Although final approval has been given for

extended data and television services between

the United States and Canada, the only services

that have been approved for most of the other

destinations are television receive-only transmissions.129 Thus, only part of the potentially large

Western Hemisphere system is currently in place.

In the future, this system could compete with

INTELSAT.

Whether the INTELSAT coordination process

for the other conditionally approved television

and data services will go smoothly and whether

telephony will ever be a service carried on the

lzgcoordination of even this limited competition represented a

significant departure from the previous situation. Until the meeting

of the INTELSAT Assembly of Parties in January 1985, only 13 services had been given final approval by the FCC on the basis of

INTELSAT coordination and only to Canada, Bermuda, and the Cayman Islands. At the January meeting, 19 U.S. and 6 Canadian satellite systems were coordinated, involving data transmission to and

from Canada and television receive-only transmission to Mexico,

Bermuda, Bahamas and 17 Caribbean and Central American countries and territories. Television services coordinated between Canada and the U. S., U.S. and Canada, and Mexico and the U.S. were

point-to-point and point-to-multi-point in some cases.

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 Hemisphere 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

applications through the INTELSAT coordination

process.

The key U.S. decisions about its policy toward

INTELSAT will probably not be initially made on

issues involving the Western Hemisphere, but

rather on issues that concern what could potentially develop into a North Atlantic regional system, if any of its components come into existence. As described above, six private U.S.

companies have applied for permission to construct and operate transatlantic communications

satellites. Two of these are large corporations with

communications interests—RCA (through its RCA

Americom subsidiary) and United Brands (through

its International Satellite, Inc. [ISI] subsidiary); four

smaller firms—Orion, Cygnus, Pan American Satellite, and Financial Satellite—have also applied. 130 In response to this potential entry,

INTELSAT has argued that open competition in

transatlantic satellite communications facilities

could mean the breakup of the INTELSAT system,

1 JoOrion, pa~msat, and Finansat do not plan to offer any common carrier services, but the other three applicants (RCA, United

Brands’ ISI, and Cygnus) have stated their desire to use some capacity for common carrier service, in addition to business and media

services, which they state to be their primary offering. The satellites of other countries, including those owned by noncitizens (analogous to flags of convenience in ocean shipping), are also potential entrants in transatlantic satellite communications. France and

the United Kingdom are constructing satellite systems that will be

capable of serving both sides of the Atlantic (the first French satellite has already been placed in orbit) to connect them to their North

American and Caribbean territories. They have stated that they do

not intend to compete with INTELSAT.
Ch. 6—Satellite Communications . 183

which U.S. diplomacy worked long and hard to

put together in the first place. 131

After many months delay, President Reagan in

November 1984 determined that separate international satellite systems “are required in the

national interest. ” 132 However, in an attempt to

reduce the challenge to INTELSAT, the Administration set two criteria for the FCC to use in acting on the existing transatlantic satellite applications.

. . . to assure that the United States meets its

obligations as a Party to the Agreement Establishing the International Telecommunications

Satellite Organization (INTELSAT):

1. each system is to be restricted to providing

services through the sale or long-term lease

of transponders or space segment capacity

for communications not interconnected with

public-switched message networks (except

for emergency restoration service); and,

2. one or more foreign authorities are to authorize use of each system and enter into

consultation procedures with the U.S. party

under Article XlV(d) of the INTELSAT Agreement to ensure technical compatibility and

to avoid significant economic harm.133

As of this writing, neither the Administration’s

nor the FCC’s policy is clear concerning how

many transatlantic systems will be authorized,

how much capacity will be allowed, and, despite

the interconnection prohibition, what the conditions on resale will be. Even if stringent connection and resale conditions were enforced,

users of these systems would undoubtedly withdraw a nontrivial amount of transatlantic traffic

from INTELSAT and send it via their own transponders (what they carry would not all be new

demand). Hence, it is not clear that any of the

systems would satisfy the as yet ill-defined criterion of avoiding significant harm to INTELSAT. ’34

IJlsee written testimony (dated Nov. 14, 1983) of Richard D. COlino, Director-General of INTELSAT, before the Subcommittee on

Arms Control, Oceans, International Operations, and Environment,

Senate Foreign Relations Committee, Oct. 19, 1983.

1 Jzpresidential Determination No. 85-2, NO V. 28, 1984.

I JJLetter of the Secretaries of Commerce and State to the Chairman of the Federal Communications Commission, Nov. 28, 1984.

I JAThe FCC inquiry will evaluate what economic effeCts the flew

systems would have on INTELSAT. (Mark S. Fowler, Statement on

New International Communications Satellite Systems at Hearings

Before, U.S. Congress, House, Hearings on International Satellite

Issues before the Subcommittee on Telecommunications, Consumer

Protection, and Finance, Apr. 3, 1985.)

If the United States should take the applications

for private transatlantic satellite systems through

the INTELSAT coordination process in collaboration with one or more other governments, as the

executive branch now plans (providing the FCC

conditionally approves the applications), and if

they were rejected by INTELSAT for coordination,

the stage would be set for one of the following

five

●

●

●

●

●

processes:

U.S. denial of operating authority to all of

the proposed systems.

Unilateral U.S. conditional approval of operating authority to some or all of them, (They

wouId then need to secure foreign connection rights from foreign regulatory authorities, with or without the good offices of the

U.S. Government.)

Bilateral governmental negotiations with one

or more communications partners with the

object of establishing bilateral regulatory

regimes that would allow the operation of

some or all of the systems, as well as systems

proposed by these partners.

Multilateral governmental negotiations outside of INTELSAT with the object of establishing a regional international regulatory

regime for North Atlantic satellite communications that would also allow the operation of some or all of the systems as well as

systems proposed by parties to the negotiations.

Multilateral negotiations within INTELSAT to

amend Article-XIV(d) so as to permit certain

alternative satellite systems even though the

permitted services might cause some degree

of “economic harm. ”

Because the applications to provide international satellite communications involve facilities

competition and, in the case of transborder and

transatlantic business services, the possibility of

single-vendor, dish-to-dish service, they provide

a strong challenge to the current international regulatory order135 Free markets in telecommunica1 J5The uniqueness of international communications arYdngementS

is not always appreciated. “Single-vendor service” is now the norm

in U.S. domestic long-distance communications and always has

been in virtually all other markets in the U.S. economy, and even

in most other international service markets, Single-vendor service,

however, is not the norm in international telecommunications service markets. U.S. basic telecommunications providers (and those

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

tions are not considered desirable by most telecommunications partners of the United States.

Consequently, U.S. moves that attempt to increase competition in the provision of international facilities are likely to engender conflict with

some of our telecommunications partners in Europe, Japan, and elsewhere.136

In transatlantic telecommunications, U.S. approval of the six satellite applications, without

prior agreement by all its major European communications partners, would amount to a major

modification in the multilateral mechanisms—

the North Atlantic Consultative Process and

INTELSAT–that have been used in recent years

to coordinate facilities decisions in that geographical sector. (The Administration’s recently adopted

policy requires only that “one or more” foreign

authorities authorize new systems and be involved in the INTELSAT coordination procedures. 137) Approval of the private cable applications would have a similar effect. If any U.S.

moves to increase facilities competition should

successfully obtain the collaboration of one or

more U.S. communications partners, major changes

in INTELSAT operations, as the consortium attempted to adapt to the new competitive environment, might be required. The principles that

are employed in taking action in the case of the

transatlantic applications will also set a precedent

for similar Western Hemisphere and transpacific

facilities.

If INTELSAT were in fact significantly damaged,

then the United States would be blamed, justifiably or not, for helping to ruin the cooperative

mechanism it had been instrumental in creating.

U.S. telecommunications users might also lose

from higher rates and poorer service, if the successor system performed poorly.

of other countries) are not free to offer single-vendor service in most

international markets (i.e., to offer end-to-end communications service over their own owned or leased networks).

I Jf+ee National Telecommunications and Information Adrnin istration, Telecommunications Policies in Seventeen Countries: Prospects for Future Competitive Access, May 1983 for a survey of country policies. Also Eli M. Noam, “Telecommunications Policy on the

Two Sides of the Atlantic: Divergence and Outlook,” op. cit.

1 qzLetter of t~ Secretaries of Commerce and State to the Chairman of the Federal Communications Commission, Nov. 28, 1984.

INTELSAT officials also maintain that INTELSAT

now significantly subsidizes satellite communications for developing countries by means of

averaged rates, but this is contradicted by analyses sponsored by the Orion Satellite Corp.138 If

there is a substantial cross-subsidy, then INTELSAT’S

loss of revenues to competitors could lead it to

raise rates for developing countries. Developing

countries’ displeasure over this, in turn, might

then affect U.S. foreign policy interests.

A representative of one of the would-be new

entrants suggested in testimony to Congress that

consumers, in fact, would gain a number of benefits from competition to INTELSAT: advancing

the general U.S. policy of favoring competitive

markets, creating new markets, introducing new

and more flexible services, lowering prices, and

stimulating new technology.139 The argument

about the stimulative effects of competition (from

alternative satellite or cable providers) is plausibly

supported (at least prima facie) by INTELSAT’S announcement in October 1983 that it would accelerate the introduction of its “INTELSAT Business

Service,” offering firms facilities for dedicated international satellite telecommunications networks. 140

Facilities Planning

Beyond the issue of satellite competition to

INTELSAT from private U.S. satellite systems,

1 jsThe existence and importance of a cross-subsidy to developing countries through the INTELSAT system is a complex issue that

has been addressed in testimony before Congress by witnesses presenting material developed for INTELSAT and Orion Satellite Corp.

See, e.g., Kenneth R. Dunmore, Hatfield Associates, “An Analysis

of the INTELSAT Subsidy Issue, ” August 1983 and “Issues in international Telecommunications Pricing anci Demand,” Nov. 27, 1984,

both prepared for Orion Satellite Corp.; Walter Hinchman Associates, Inc., “The Economics of International Satellite Communications, ” May 18, 1984, prepared for INTELSAT. The principal analytical questions revolve around what satellite capital cost should

be assigned to different world regions, considering that satellites

are movable, and the efficiency of transponder use when a single

transponder is used by more than one country.

139T@imony of William L. Flshman (International satellite, I nC. ),

International Communication and Information Policy, op. cit., p.

280.

IAOSee Connections: World Communications Report, published

by The Economist and Television Digest, Oct. 27, 1983, p. 2 and

Broadcasting, July 4, 1983, p. 67. This conclusion was also reached

in the Departments of State and Commerce, “A White Paper on

New International Satellite Systems, ” op. cit., p. 51.
Ch. 6—Satellite Communications . 185

there are two broader issues in facilities regulation:

1. Does the United States need to develop new

international regulatory mechanisms to balance the use and/or construction of satellite

and cable facilities?

2. Should U.S. regulatory authorities be concerned with the possibility of overcapacity

in transatlantic telecommunications facilities?

Restrictions on facilities construction, ownership, and use are key elements in the present international communications regulatory structure

and are the elements currently most under challenge. Carriers or other firms wishing to construct,

purchase, or operate international communications facilities are not free simply to do so. They

must apply to the FCC for authority, and the Commission has often used its power to delay or deny

such applications on a variety of grounds. For instance, in 1984 the Commission decided not to

allow firms to gain direct ownership access to

INTELSAT, and private U.S. firms have not yet

been allowed to own satellites for use in international communications, except within the limited Western Hemisphere regional system. (See

app. 6A for further discussion of the issues in this

section.)

The FCC also restricts the U.S. international

service carriers in their use of communications

facilities. In practice, this has meant that AT&T

and other carriers have been required or induced

to divide their transatlantic traffic between cables

and satellites in approximately equal parts. Although the Communications Satellite Act of 1962

and the INTELSAT Agreement of 1973 endeavored to promote the use of satellites, incentives

set up by the Act and the Agreement and by regulations based on them have had just the opposite effect.

This paradoxical outcome occured because,

under U.S. regulation, carriers have an incentive

to invest in and use their own cables in preference to satellite circuits leased from COMSAT,

particularly at times of day and during seasons

and periods when there is surplus cable capacity. These reasons involve the impacts of returnon-rate-base regulation, the tax code, and the fact

that COMSAT’S tariff is greater than the variable

costs of using cables. Once the distortion of incentives became apparent, the FCC decided to

ameliorate the situation through additional regulation to limit the cable capacity of carriers and

to secure the balanced use of the satellite and

cable facilities in existence.

The FCC is currently considering what circuit

distribution and facilities planning policies to implement in the 1985-95 period and has tentatively

concluded that only AT&T’s message telephone

traffic should be forced to conform to a circuit

distribution scheme during the period (all other

carriers and AT&T’s record traffic would be exempt).141 It also tentatively concluded that AT&T

should be gradually allowed to raise the proportion of its message telephone traffic transmitted

by cable to 60 percent by 1991 (up from 48 percent in 1984). Based on AT&T projections, the

FCC analysis is that this would allow AT&T to send

72 percent of its 1991 traffic growth by cable and

would reduce INTELSAT’S revenues by $33 million in the same year.142

The FCC has also recently altered the regulatory structure to change COMSAT’S special role

in the ownership of INTELSAT Earth stations. Previously, the U.S. international service carriers had

been locked in a mandated Earth Station Ownership Committee Consortium with COMSAT.

COMSAT owned 50 percent of the Earth stations

and the carriers owned the rest. Now there is a

COMSAT tariff purely for space segment services,

and the carriers (and other users) are free, as they

see fit, to own their own Earth station facilities

and incorporate them in their rate bases or, akernatively, to lease Earth station capacity from

COMSAT or other owners. One effect of the new

FCC Earth station policy is to reduce (in only a

moderate way, however) the bias of U.S. carriers

toward cables.

Because the would-be satellite entrants arrived

on the scene first, and because an intergovern1-11 FCC, “second NOtiCe of proposed Rulemaking In the Matter

of . . . Authorization of Common Carrier Facilities to Meet North

Atlantic Telecommunications Needs During the 1985-1995 Period,”

op. cit., pp. 20-32.

IAZDerived from i bid., table following p. 34. The reduction in

INTELSAT’S revenues is in comparison with the “balanced loading” circuit distribution scheme used by the FCC at times in the

past (see note 46, p. 161, for a definition of balanced loading).
186 . International Cooperation and Competition in Civilian Space Activities

mental organization (and its financial health) are

involved, much of the public discussion has centered around satellite entry in competition with

INTELSAT. In late 1984, however, the FCC received two transatlantic cable landing applications that may pose an even greater threat to the

current regulatory regime and, consequently, to

INTELSAT. They propose to add an estimated

total of 330,000 voice-equivalent circuits in private fiber optic cables by 1990, four times the estimated 80,000 combined capacity of the TAT-8

and TAT-9 cables that the consortium of the

North Atlantic carriers has discussed in the North

Atlantic Consultative Process. By itself, the capacity proposed by the two new cable applicants is

approximately four times the carrier demand forecasts for 1995.’43

Such major capacity additions obviously raise

the possibility of substantial overcapacity (discussed below), and they also threaten both the

cable-consortium mechanism, which has heretofore built all transatlantic cables, and an international “institution,” the North Atlantic Consultative Process. Once again, the challenge comes

ostensibly in business communications, although

the organizers of Submarine Lightwave Cable Co.

do not exclude sales of capacity to common carriers like MCI. One of the two cable facilities is

proposed by a major foreign carrier, Cable &

Wireless Ltd. (with U.S. venture capital partners)

and therefore also raises questions of international service competition in the United States.

These large proposed capacity additions–far

in excess of demand projections—pose the question of whether there is a built-in tendency in the

ldJThe TAT.8 cable (owned jointly by AT&T, other U.S. international service carriers, and European PITs) was approved by the

FCC in 1984. A similar TAT-9 cable is proposed by the consortium

for 1992. The new cable applicants are: 1) Tel-Optik Ltd. (the U.S.

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. $C-L-84-002, Sept. 28, 1984); and 2) Submarine Lightwave Cable Co., a U.S. venture capital group, which has applied

to build a second cable facility with capacity of 250,000 voiceequivalent circuits (FCC File No. SCL-85-001, Oct. 16, 1984). In

March 1985, the FCC informed the Secretary of State of its conclusions that the Tel-Optik application “meets the threshold reciprocity

showing of the Cable Landing License Act and otherwise appears

to be consistent with U.S. interests under the Act. ” The SLC application was not acted on pending the receipt of additional information but no prejudicial finding was made. (FCC News, Report

No. 3092, Mar. 4, 1985).

imperfectly competitive transatlantic telecommunications market for unrestricted freedom to invest to result in chronic overcapacity. A case

could be made for facilities regulation, if consumers, rather than investors, would suffer the consequences of over-investment by having to pay

higher prices. This could occur if investing carriers would be able to recoup losses from any

“white elephants” by persuading regulators to

allow high prices and restrict the capacity in use.

Regulation of price and of the use of capacity

creates an effective cartel, and facilities owners

might be able to avoid the competitive consequences of over capacity investment and still earn

high returns (supposing that demand responsiveness would not prevent it). The primary justification for facilities regulation, thus, is that price and

capacity-use regulation can be even worse. U.S.

use of facilities regulation can also be justified if

price and capacity-use regulation is imposed by

foreign authorities.

Considering the announced plans and the nature of the actual participants in the transatlantic service market, there is some realistic possibility that the supply of transatlantic capacity, in

the absence of controls on construction, could

far exceed the demand for it in the 1990s. if all

the proposed capacity additions were actually

constructed, capacity in 1992 would amount to

about 650,000 voice-equivalent circuits,144 compared to current expected demand (about 20,000

circuits in 1985) and the transatlantic demand

forecasts of the U.S. international service carriers

(USISCS) and the European CEPT carriers for

1995. Both of these 1995 forecasts are for approximately 82,000 voice-equivalent circuits (tables

6A-1 and 6A-3, app. 6A). Taking all estimates at

face value, the construction of the proposed facilities would result in a very large excess supply.

1 ddThis should be regarded as only a rough estimate of the circuit capacity of proposed facilities, since both the magnitude of

circuit multiplication that will be possible for voice conversations

(this estimate is based on a multiplication factor of 5), and the proportion of voice to other uses that do not use multiplication techniques, are uncertain. It is arrived at by adding the following rough

estimates: Currently existing cables in service at that time (10,000),

TAT-8 and TAT-9 (80,000), Tel-Optik cable (Cable & Wireless)

(80,000), Submarine Lightwave Cable (250,000), separate satellite

systems (RCA, Orion, et al.) (120,000), and INTELSAT (100,000+).
Ch. 6—Satellite Communications ● 187

If the USISC or CEPT forecasts are even remotely realistic, much of the excess supply can be expected not to materialize as plans are reevaluated. Nevertheless, even if all the venture-capital

groups drop out, just the announced plans of

INTELSAT, the cable consortia (principally AT&T

and the European PTTs), Cable & Wireless, and

RCA would together still equal more than 300,000

voice-equivalent circuits. It is not at all clear that

any of these large firms or consortia would drop

out or scale their plans far enough back to reach

the neighborhood of the demand projections,

even if they could forecast demand (at the level

of the USISC projection) with certainty. They

might fear that scaling back, without the certainty

that the other major players would also scale

back, would expose them to an unacceptable loss

of market share. Such behavior might occur

u rider the existing conditions of imperfect competition if firms had full freedom to invest in facilities, especially if they could expect to recover

the costs of the capacity from consumers via higher prices enforced by regulation.

The competitive solution would be to liberalize

the entire market, allowing free entry in both the

service and facilities markets. Overinvestment

that resulted in lower rates of return would deter

additional investment. In the long run, society’s

resources would be allocated optimally.145 One

advantage of the competitive solution, if it could

actually be implemented, is that consumers would

determine the types of facilities that would be utilized and the types of services that would be provided. They would also determine the mix of private and public (common carrier) networks.

Facilities regulation would be an alternative

solution, using the methodology that the FCC currently uses or another that involves INTELSAT

more formally in the process. Facilities regulation

145ThiS might not be true of imperfect competition. Regulated firmS

would have a tendency to overinvest, if they did not have to pay

for their investment mistakes. A number of the participants in international communications are likely to act differently from competitive firms. AT&T, whatever its regulatory status, is likely to retain significant market power and might invest for strategic reasons,

particularl y if there are important fiber optic economies to scale.

Foreign PTTs, being for the most part government owned, might

also have a tendency to overinvest in facilities for defensive reasons, if they had reason to expect a financial bailout in the case

of loss and had monopoly power over rates, INTELSAT might have

an incentive to overinvest for the same reasons as its PTT owners.

would have symmetrical disadvantages compared

to the competitive model; there would likely be

some level of reguIation-induced inefficiency in

the facilities mix, in the service mix, and in the

mix between public and private networks. A second disadvantage is that facilities regulation might

be used to maintain an uncompetitive, highpriced services market, if facilities regulation were

used to make entry difficuIt for new service providers. Despite these potential defects, facilities

regulation might still be justified if the possible

excess supply of facilities suggested by the current facilities plans were considered to reflect a

tendency towards either chronic overcapacity or

chronic instability.

This brief discussion suggests that a clear prima

facie case cannot be made either for unrestricted

transatlantic facilities competition (in the current

institutional context) or for facilities regulation.

Much depends on the particular technical, market, and institutional characteristics of the transatlantic communications market involved: the

size of the demand, the seriousness of any tend -

ency by the institutions involved to overinvest,

the actual magnitude of fiber optic economies to

scale, and the cost effectiveness of alternative

methods of communication security.

Entry for U.S. Service Providers in

International Markets

The United States must also choose how aggressively to pursue liberalization in the general

area of entry into international telecommunications service markets. The issue is: how can the

United States assist the several dozen large and

small U.S. corporations active in U.S. international satellite communications, plus those currently only in domestic satellite communications,

to gain access to foreign telecommunications

service markets? Should the United States adopt

an aggressive posture at the risk of straining relationships with our principal trading partners?

Because basic telecommunications providers

are not free to offer single-vendor service in most

international markets (i.e., to offer end-to-end

communications service over their own owned

or Ieased networks), they can only gain entry to

the U.S.-Country X market, if the PTT of Coun-
188 ● International Cooperation and Competition in Civilian Space Activities

try X will allow them to connect. Even if they were

able to enter, they would have to tailor the service they offer to the facilities and practices of the

PTT.

Full liberalization in international telecommunications service would require single-vendor

service, pricing freedom, and open entry for common carriers and private firms alike in both U.S.

and foreign markets.146 While full liberalization

is very unlikely in the short run, the United States

could pursue certain short- to medium-term liberalization objectives in order to increase efficiency in U.S. international telecommunications

markets and also increase the access of U.S. carriers. It could attempt to:

establish a right of connection for all U.S.

common carriers to connect to foreign public networks on a nondiscriminatory basis;

retain country-of-origin pricing;

prevent deterioration in the ability of U.S.

firms to lease international private lines overseas under flexible conditions and with prices

related to facilities cost;

develop beachhead rights for the two-way

handling of international communications to

and from foreign satellite ground stations by

both U.S. common carriers and private

firms 147 and

secure the right of entry for U.S. value-added

and data processing firms into foreign domestic markets.

One possible outcome of the current attempts

by U.S. corporations to enter transatlantic satellite markets could be that even if private competition were permitted, it could be narrowly

restricted to business communications that do not

enter public-switched networks and effectively

circumscribed on the ground in Europe. In this

case the current international system would probably largely remain in place.148

l~single.vendor sewice can coexist with monopoly provision of

local service under an access-charge arrangement.

IA~he impo~ 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.

14sEli M. Noam, “Telecommunications Policy on the Two Sides

ofthe Atlantic: Divergence and Outlook,” op. cit., pp. 13-14.

Another possible outcome is that the data processing revolution, and the business communications involved in it, will simply overwhelm regulatory defenses and bring not only international

liberalization but also substantial domestic deregulation in most industrial countries within the

next 15 years.

A third possible outcome could be that great

resistance will develop to change, in Europe in

particular, and that deregulatory pressures from

the U.S. side—from consumers, excluded carriers, and the U.S. Government—will mount. For

instance, large consumers abroad might attempt

(with U.S. Government toleration) to circumvent

national regulation and high prices in certain

countries, by routing a greater flow of communications to the United States via cheaper neighboring countries than they do now. This could

force unwilling PTTs to lower their international

rates to meet the competitive threat.149 The conflict that could result from such a situation might

so sour communications relationships that the

United States could find itself with few allies

within international organizations on matters of

telecommunications.

International Trade in Satellite

Communications Equipment

The issue in this area is what action the Government should take to try to assure fair international competition in trade in both space- and

ground-segment equipment.

The United States is both a leading importer

and a leading exporter of telecommunications

equipment. It used to have a large overall positive balance of trade in telecommunications

equipment, but the balance suddenly shifted to

negative in 1983. Table 6-9 shows this deterioration 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

has turned into an estimated deficit of $945 million in 1984 and a projected deficit of $1.7 bil-

‘49Data Communications, “Users May Reap Benefits of Transatlantic Competition, ” March 1985; Gary Stix, “PTTs Make Life Rough

Overseas,” Computer Decisions, Apr. 9, 1985.
Ch. 6—Satellite Communications 1 8 9

Table 6-9.—U.S. International Telephone and

Telegraph Equipment Trade, 1978-85 ($ millions)

Surplus (+)

Year Exports Imports Deficit (–)

1978. . . . . . . . . . . . . . . . . . 388 233 155

1982 . . . . . . . . . . . . . . . . . . 829 626 203

1983. . . . . . . . . . . . . . . . . . 790 1,209 –419

1984e . . . . . . . . . . . . . . . . . 795 1,740 –945

1985p . . . . . . . . . . . . . . . . . 800 2,505 –1,705

Key:e = estimated; p = projected.

SOURCE: Derived from Departmentof Commerce, U.S. /ndustria/Ouf/ook 1985,

pp. 30-1,30-5,

lion for 1985. The International Trade Commission has forecast that the deficit will continue to

increase and will reach $3 billion by 1993. 150

Large exports to developing countries used to

more than make up for a trade deficit in telecommunications equipment with other OECD countries. Recently, however, a number of changes

in international trade patterns—the deregulation

of the U.S. long-distance communications market and the elevated value of the dollar among

them, together with continuing barriers to U.S.

telecommunications exports in the other industrial countries—have resulted in both a disappearing surplus in trade with less developed countries

and a much greater deficit with other industrial

count ries.151

Turning to satellite communications equipment,

in particular, it seems clear that, absent trade barriers, the United States still enjoys strong comparative advantage in communication satellites.

This also appears to be true in customer-premises

Earth stations, except that the advantage of U.S.

firms over Japanese ones in this area may be

ephemeral. In standard INTELSAT Earth station

components, DBS equipment and standard telecommunications equipment, comparative advantage in high-volume manufacturing operations

appears to have been shifting away from the

1 SoStatement Of Pauk Stern, Chairwoman of the ITC, in U.S. Senate, 98th Cong., Committee on Finance, Subcommittee on international Trade, Hearing, Telecommunications Trade, june 26, 1984,

p. 9.

151 See Robert Eckelman, “A Study of the International competitive Position of the U.S. Telecommunications Equipment Industry”

in U.S. Department of Commerce, International Trade Administration, The Telecommunications Industry (High Technology industries: Profi/es and Out/ooks), April 1983 and International Trade

Commission, “Changes in the U.S. Telecommunications Industry

and the Impact on U.S. Telecommunications Trade, ” Investigation

No. 332-172, 1984,

United States, first to Japan, and now to Hong

Kong, Taiwan, and South Korea. The latter advanced developing countries all had large telecommunications equipment deficits in 1978, but

in 1983 had substantial telecommunications trade

surpluses.152

While fundamentals may govern the movement

of certain components of the telecommunications

equipment industry into less developed countries,

particular factors have contributed to the decline

of both the U.S. export share in telecommunications exports and to the vastly greater imports of

telecommunications equipment into the United

States from the other industrial countries.

Strength of the Dollar

The high value of the dollar (typically described

as over-valuation) tends to make all U.S. exports,

including telecommunications exports, less competitive in price. The dollar rose by 58 percent

between 1980 and 1984 relative to other currencies 153 and a shift of this magnitude, seemingly

unrelated to changes in U.S. comparative advantage, is large enough to overwhelm it in many

sectors.

Unequal Access to Industrial

Country Markets

Following the AT&T breakup at the beginning

of 1984, which separated Western Electric (now

AT&T Technologies) from its special corporate

relationship with the Bell Operating Companies,

foreign telecommunications equipment sellers

are now able to compete in the U.S. civilian market on substantially equal terms with U.S. producers. This market has supported explosive

growth of imports for several reasons—because

of strong U.S, economic growth, because of the

elevation of the dollar, and because of some shift

in comparative advantage. Imports grew 93 per152Depanment of Commerce, U.S. /ndustria/ OUt/OOk 1985, P.

30-5. See Raymond F. Mikesell and Mark G. Farah, U.S. Export Competitiveness in Manufactures in Third World Markets (Washington,

DC: Center for Strategic and International Studies, Georgetown

University, 1980), p. 106ff for an analysis of comparative advantage patterns, which concludes that the United States continues

to have comparative advantage in technology-intensive products.

15JU ,s, president, Economic Report of the President, February

1985, table B-104, p. 351.
190 ● International Cooperation and Competition in Civilian Space Activities

cent in 1983, are estimated to have grown 44 percent in 1984, and are projected to grow another

44 percent in 1985.

The same is not true for U.S. manufacturers in

most other industrial countries. The PITs of most

such countries usually purchase telecommunications equipment from national firms. Sometimes

they engage in extensive R&D, which is provided

to national supplier firms without cost. The GAIT

Government Procurement Code covers only those

government entities that individual countries

specify as being under its coverage. As discussed

in chapter 4, most governments have elected not

to place their PTTs under its coverage and the

European Space Agency is not a party to it, so

there is no question of, for example, accusing the

Bundespost monopoly, of breaking international

trading agreements by proposing to launch a German-made communications satellite without allowing U.S. manufacturers to bid on the project.

In another example, the French Telecom 1 satellite system has been developed directly by the

D.G.T (Direction General des Telecommunications), the French telecommunications monopoly. The radio and television broadcasting companies of most foreign countries are also government organizations, and, where possible, buy

direct broadcasting satellites from their own national or regional manufacturers.

Despite the desire by foreign governments to

buy locally, U.S. firms have nevertheless had important participation in foreign satellite projects.

The current Japanese communications satellites,

CS-2A and CS-2B, for example, were built by Mitsubishi Electric with the active participation of

Ford Aerospace & Communications.154 Although

the French firm Aerospatiale is the prime contractor for the Arabsat regional system, Ford is doing 59 percent of the work.155 Brazil has contracted with SPAR Aerospace of Canada to supply

the Brasilsat satellite, but Hughes will actually

build it. A primary objective of foreign national

space programs has been to reduce dependence

on U.S. suppliers, and although U.S. satellite suppliers may continue to supply major components

or technical services, foreign programs will continue to try to do more on their own.

There are signs that some PTTs may in the future permit some competition in equipment purchases, but these signs are far from suggesting a

wave of the future.156 In 1980 the U.S. and Japanese Governments signed an agreement to open

the Japanese equipment market to U.S. firms.

This agreement has not so far resulted in substantial U.S. telecommunications equipment sales in

Japan, and it does not cover imports of satellites

themselves. 157

Just prior to when the partial privatization of

the Nippon Telephone & Telegraph Co. (NTT)

and removal of its monopoly status took effect

in April 1985, the Ministry of Posts and Telecommunications proposed regulations that, in effect,

would give Japanese manufacturers almost veto

power over which foreign telecommunications

products could be introduced into the Japanese

market. Furthermore, the restructured NTT

would be given special competitive advantages.

Major changes in these regulations, which U.S.

diplomacy (and certain Japanese industry groups)

have been seeking from the Japanese Government and have obtained in principle, are:

1

2<

3.

that U.S. manufacturers be allowed to certify that their products meet Japan’s standards, instead of having to submit individual

products for inspection by a Japanese Government agency;

that trade secrets should not have to be submitted to a group containing representatives

of their Japanese competitors; and

that a single agency would be set up to approve telecommunications products for sale

in Japan, rather than the four specified in the

draft regulations.158

In this instance, as in previous trade disputes

between the United States and Japan, political

maneuvering within the Japanese Government

and bureaucracy has made implementation far

from certain, despite the strong support the U.S.

154Avjatjon Week and Space Technology, Feb. 4, 1985.

I SSU.S. ConWess, office of Technology Assessment, Technology

Transfer to the MiddleEast, OTA-ISC-173 (Washington, DC: U.S.

Government Printing Office, September 1984), p. 210.

lsGSee Dan Schi]ler, “The Storming of the PTTs, ” ~afamaf;On,

May 1983, pp. 155-158.

157(J.s. Export Weekly, jan. 31, 1984, pp. 580-581.

158waSh;ngton Post, op. cit., Mar. 19, 1985, p. D1.
Ch. 6—Satellite Communications ● 797

position has received from the Prime Minister.

In Japan, as in other industrial countries, the old

PTT structure does not easily accommodate international competition, even when it is altered.

In satellite communications equipment, the

opening of the telecommunications market, if it

should materialize, would primarily affect Earth

station equipment and some satellite components. Even an open market would not guarantee success in the Earth station market, however;

in this market U.S. firms face a formidable competitor in NEC, the leading ground station supplier internationally as well as in Japan. Japan’s

response to U.S. pressure to open its satellite procurement market was to give NTT the option to

buy foreign communications satellites if it should

wish to do so, but U.S. “officials would not venture to guess the extent to which it would result

in foreign purchases.’”159Under the terms of the

restructuring of the telecommunications service

industry, new entrants will also be allowed to purchase foreign satellites, and U.S. satellite makers

appear to be actively seeking sales.160

Questions of the openness of the Japanese market are likely to persist, given the history of the

bilateral negotiations over the 1980-85 period, but

there is at least some movement there.161 Elsewhere in the industrial world, the European markets remain tightly closed to imports of satellites

and much telecommunications equipment. In

these circumstances, some U.S. firms have found

joint ventures with European firms to be a partial substitute.162

Trade Barriers in Developing Countries

Given the barriers to equipment market entry

in the industrialized countries, the major new

markets outside the United States seem to be in

I Sqwastr;ngton Post, Apr. 28, 1984, p. A20.

lbO’’Hughes Pushes Japanese Ku-Band Allocation, ” Aviation Week

and Space Technology, Feb. 4, 1985, p. 72.

’61 Lee Smith, “What the U.S. Can Sell to japan, ” Fortune, May

13, 1985.

lbZFor example, Fairchild Industries has entered into a complicated

joint venture agreement with Thompson Alcatel of France that involves each partner as a minority shareholder in subsidiaries of the

other. The four jointly owned subsidiaries, two in the United States

and two in France, will market pooled lines of satellite and terrestrial

communications products and services (Washington Post, Washington Business Section, Mar. 11, 1985, p. 3).

the developing world and in smaller industrial

countries that do not produce satellites or ground

equipment. U.S. satellite manufacturers are in a

particularly good competitive position to sell in

those markets due to their technological dominance. In Earth station sales, U.S. firms are more

on a par with firms from other industrial countries, particularly Japan. In the developing world,

it should be noted, there are a variety of nontariff

barriers to trade that U.S. manufacturers must

cope with. These include adherence to equipment standards set by former colonial powers and

the fact that the PTT buyers of satellites and satellite equipment, by dint of their governmental

status, may make purchasing decisions not entirely on economic grounds.163

Foreign Government Export Support

Some U.S. firms also believe that other OECD

governments offer better export financing for their

firms than does the U.S. Export-Import Bank does

for U.S. firms, despite the fact that the OECD Arrangement on officially supported export credit

has reduced credit subsidies in regular export financing. 164For some kinds of exports to developing countries, industrial countries combine foreign assistance credits with commercial export

credits, i.e., “mixed credits, ” an allowable practice under the current OECD arrangement on official export financing as long as the assistance

meets certain criteria (see ch. 4), but one that the

U.S. Government believes is being abused by

France and Japan.165 To counter an earlier use

of subsidized credit by Japan in sales of Earth stations to less developed countries (in this case, an

over-generous repayment period), the United

States negotiated a special OECD Understanding

on Export Credits for Ground Satellite Communication Stations. it provides for a maximum

repayment term of 8 years in this case.166

lblsee discussion above and also Technology Transfer to the Midd/e East, op. cit.

Ibdjohn N. Lemaste~, op. cit., pp. 66-69. For a general d i5cLJ5-

sion of the OECD Arrangement and the reprint of an unofficial version of its text, see Gary Hufbauer and Joanna Shelton Erb, subsidies ;n lnternat;ona/ Trade, Institute for International Economics,

Washington DC, 1984, ch. 3 and app. G, respectively.

165’’U.S. Warns France on Trade Issue, ” Washington Post, Nov.

28, 1984.

IGbHufbauer and Shelton Erb, op. cit., app. G, p. 224.
192 . International Cooperation and Competition in Civilian Space Activities

Currently, the United States is attempting to ob

tain a significant tightening of the criteria for

mixed credits and is threatening to retaliate with

higher funding for U.S. mixed credits, if negotiations fail to produce the sought-after tighten ing.167

An earlier example, where the United States

matched foreign subsidized credit in satellite

communications, occurred when ITT, a U.S.

company, was attempting to selI an INTELSAT

Earth station package to Cyprus in competition

with a French company. Eximbank offered 85

percent financing at 6 percent, and the sale went

to ITT.168

Other potential governmental means of supporting satellite communications equipment sales

include: offering specially discounted combination packages of satellite and government-subsidized launch services (see ch. 4) or making countertrade arrangements in which satellite or ground

equipment sales at ostensibly unsubsidized prices

are tied to the purchase of commodities from the

buyer at higher-than-market prices.169

U.S. Government Policy

on Export Controls

In recent years there has been increased Government concern over the risk that exported hightechnology equipment may fall into Communist,

particularly Soviet, hands where it might be used

for military purposes. One result has been increased vigilance over items which might be on

the Department of Defense list of militarily critical technologies. At the same time, the United

States has used export controls for political purposes–the most dramatic use being the withholding of technology and equipment that might be

used to build the Soviet natural gas pipeline to

bring gas to Western Europe.170 These restraints

on exports, whatever other purposes they may

IGTNeWS conference of the vice chairman of the U.S. ExpOrtImport Bank, Paris, Nov. 27, 1984.

lb6Robin Day Glenn, Financing of United StateSExpOflS of Telecommunications Equipment, International Law Institute, Georgetown University, Washington DC, 1982, p, 39.

lbqDoug[as L. Adkins, “Countertrade, Clearing Arrangements, Reciprocity and Other Instruments of the New Bilateralism in international Trade, ” unpublished paper presented at the Allied Social

Sciences Association meetings, San Francisco, Dec. 29, 1983.

1 ZOU.S. Congress, office of Technology Assessment, Technology

and East-West Trade: An Update, OTA-ISC-209 (Washington, DC:

U.S. Government Printing Office, May 1983).

serve, affect the competitiveness of U.S. telecommunications equipment suppliers in international

markets.

One case of note in satellite communications

illustrates the problem. In late 1981 and early

1982, INMARSAT signed four contracts with U.S.

companies (three with COMSAT and one with

Digital Communications Corp.) in connection

with the INMARSAT research program on the

next generation of maritime communications satellites. Because the Soviet Union is a member

state of INMARSAT and contract studies are available to all members, the U.S. Government delayed delivery of these studies to INMARSAT.

Three of the studies were eventually delivered,

but well beyond the contractual due dates, and

one was completely canceled by INMARSAT.

INMARSAT officials expressed surprise at the

export blockages, particularly since critical technical details did not have to be disclosed.

INMARSAT required only enough information on

the workings of the satellites to be sure they met

performance specifications. With respect to the

prospective delivery of actual U.S. satellites, no

actual satellite equipment would ever actually be

in the possession of INMARSAT, because the satellites would be launched directly from the

United States or from French Guiana by the U.S.

contractor. Responding to the U.S. action in this

case, INMARSAT has decided not to accept bids

on future contracts unless a firm can show that

it has its government’s permission to deliver the

goods or services offered.171

Some U.S. firms see the application of export

controls as putting them at a potential competitive disadvantage. As the vice-president of a firm

manufacturing satellite Earth stations and other

products put it:

Too much time and effort is wasted in the U.S.

on the so-called control of mature products

which are already commercially available

throughout the world. Control of technology

must take place prior to the commercial introduction of a new product.172

171 See “IN MARSAT Adds contract Stipulations, ” Aviation Week

and Space Technology, Nov. 15, 1982, p. 25.

1 TZjohn N. Lemasters, op. cit., p. 68. Mr. Lemasters is Senior Vice

President, Communications Sector, Harris Corp.
Ch. 6—Satellite Communications ● 193

The same official argued that export restrictions

for foreign policy, rather than military, reasons

was “the single most damaging U.S. action affecting U.S. exports, particularly to lesser-developed

countries.” He called the practice particularly

harmful to the U.S. telecommunications industry, saying that customers would not buy from

a country whose government might arbitrarily

step in to restrict the flow of spare parts and maintenance services.

As OTA has previously suggested, the national

security and foreign policy benefits of export controls need to be weighed against the loss in export competitiveness to which they may sometimes lead.173

The Advanced Communications

Technologies Satellite Program

The key issues for Congress concerning the

NASA Advanced Communications Technologies

Satellite (ACTS) program are:

1. how much should the Government spend

on research and development to help keep

the U.S. satellite manufacturing industry

technologically vital and ahead of potential

foreign competitors? and

2. will the ACTS program do this?

In 1973 the Office of Management and Budget

directed NASA to cut back research on civilian

communication satellite technology on the

grounds that the industry had matured to the

point where it could provide its own research and

development funds. In 1978 the NASA communication satellite program picked up again and

conducted a proof of concept program on advanced satellite communications technology. Authority for elements of a demonstration satellite

program (including a flight testing program) were

included in 1984 appropriations.174 The Administration proposed cutting back the program considerably for the 1985 budget, eliminating funds

for the flight testing program, but interest in both

the House and Senate in retaining the full ACTS

173Techno/ogy and East- West Trade: An Update, oP. cit.

1 TqMarcia Smith, “NASA’s Advanced Communications Technology Satellite (ACTS) Program in Light of the Hughes Filing, ” Congressional Research Service report LTR84-1 58, Mar. 2, 1984 (Washington, DC: Library of Congress).

flight test program has resulted in Congress funding the $354 million program with a $45 million

budget in fiscal year 1985.175 RCA is the prime

contractor for the $260 million outside contract,

and TRW and COMSAT are co-contractors;’ 176

Motorola, Electromagnetic Services, and Hughes

are the major subcontractors. ’ 77 NASA estimates

that the contractors and other experimenters will

spend an additional $100 million of their own

funds on R&D that uses the test satellite facility

or is otherwise closely related to the program.

ACTS will develop technology for Ka band

(30/20 GHz) satellite systems and will a!so explore

techniques for increasing satellite capacity that

may have application in the C and Ku bands as

well as the Ka band. ’ 178 Operational satellites in

the Ka band could be used to relieve crowding

in the C and Ku bands. There is 2,500 MHz of

frequency spectrum allocated for communication

satellite use in the Ka band, compared to a total

of 500 MHz in both the C and Ku bands. ’ 79 Because of greater rain attenuation of signal in the

Ka band (see fig. 6-3), however, special techniques, such as variable power level control to

amplify the signal in compensation for the rain

effects, forward error correction, involving signal

redundancy, or alternative Earth station routings

are necessary to use the band effectively.

~TSAvjatjon Week and Space Technology, Aug. 6, 1984, Pp. 24-

25. The fiscal year 1985 program will continue ACTS technology

development and activities leading to the flight program. Much of

the $9 million appropriation for Communications Program research

and analysis will be used for in-house research related to the ACTS

program. U.S. House of Representatives, 98th Cong., 2d sess., Report 98-629, Committee on Science and Technology, “Authorizing

Appropriations to the National Aeronautic and Space Administration for Fiscal Year 1985, Mar. 21, 1984, pp. 97-102.

1 TGThe NASA program cost estimate was based on a 1988 launch,

but this has now been moved into 1989 (Aviation Week and Space

Technology, Aug. 6, 1984, pp. 24-25).

1 Tzsmith, CRS Report LTR84-I 58, Op. Cit., p. 11.

I TEThis discussion draws on a number of sources, especially Smith,

CRS Report LTR84-1 58, op. cit. NASA, Office of Space Science and

Applications, “ACTS: Advanced Communications Technology Satellite Program” [undated pamphlet]; Chris Bulloch, “Advancing the

Art of Satellite Communications,” /nteravia, January 1985, pp. 25-

28; and C. Richard Whelan, “Communications Satellites Move to

Higher Frequencies, ” High Technology, November 1984, pp. 49-53.

I TgAn advantage of the Ka band, minimal orbital spacing (potentially 1 rather than the 2 or 3 degree spacing in the lower bands),

is of little economic value unless there were also crowding in the

Ka band, a possibility that is unlikely in any but the distant future

(VVhelan, op. cit., p. 49).
194 . International Cooperation and Competition in Civilian Space Activities

Figure 6-3.—Radio Signal Attenuation

1,000

[

Additional ,-.

effects t ‘.

0.1

Clear weather

absorption

effects

c Ku Ka

1 1 1 I

0.010 0.100 0.1 m 10 ‘ =

100

Frequency (GHz)

SOURCE: National Aeronautics and Space Administration

Among the techniques that increase satellite capacity are those designed to increase the communications capability of individual satellites in

given geosynchronous slots, called “frequency

reuse” techniques. One such technique that the

program would investigate is the use of spot

beams, allowing the satellite to use the same frequencies simultaneously to transmit and receive

different signals to and from geographically separate ground stations. On the ACTS test satellite,

some of these beams would be scanning, sweeping back and forth from ground station to ground

station. The scanning spot beams would further

increase the total message capacity of the satellite by permitting fewer separate beams with higher power in each transmission. This scanning

technique also would allow the satellite to redistribute its capacity continuously, following variations in service demand, to different areas of the

country. Higher satellite power in beams would

by itself allow the use of less expensive Earth station equipment, but a firm opposing the program

contended that Earth stations required for the

ACTS scanning-spot-beam technology would be

more expensive than Earth stations required by

satellites employing fixed spot beams.180

The program would also study increasing satellite capacity by a message processing procedure

called “satellite switched time division multiple

access” (SSTDMA).181 SSTDMA is a technique of

IBOSmith, CRS Report LTR84-1 58, Op. cit.

IIJ1 “By dividing the satellite communications signals into short,

compressed bursts of information, several users may transmit and

beam-to-beam digital switching within the satellite, which, though potentially useful with fixed

spot beams, would be essential for scanning spot

beams. An onboard computer, called a “baseband processor,” would control scanning, switching, and other functions within the spacecraft.

During the period of low NASA effort in satelIite communications research, individual European countries and Japan were all providing

government funds for research in satellite communications technology and for the development

of operational satellites in an effort to catch up

with U.S. technology. One NASA study showed

that, at $55 million in 1982, European expenditures were 2.5 times those of NASA, while, at

$190 million, Japan’s were 11 times NASA’s.182

Another estimate placed combined Japanese

Government and private communications satellite R&D expenditures in 1983 at nearly $400 milIion.183 Japan’s current and planned satellites include fixed spot beams in the Ka band, as does

Italy’s Italsat, planned for launch in 1987. Satellites proposed by the European Space Agency,

and by France and Germany separately, would

also use the Ka band. None of the current foreign programs appear to contemplate movable

or scanning spot beams, but Japan is considering a next-generation operational satellite system

(cs-4) using scanning spot beams and onboard

signal processing.184

U.S. firms have also carried out large corporate

R&D efforts in satellite communications.185 Nevertheless, industry and NASA officials have repeatedly told Congress that no private firm would be

willing to bear the risk, expense, and delayed payoff of launching its own Ka band satellite incorreceive at the same frequencies by taking turns or time sharing.

The time slot allocated to a given Earth station can be lengthened

or shortened to accommodate a varying amount of communications needs.” NASA, op. cit., p. 9.

IBZAv;ation Week and Space Technology, Sept. 6, 1982, p. 241.

18JR. Filep, A Schnapf, and S. Fordyce, “Japanese and Western

European Spa@ Research and Development With a Focus on Communications Satellites, ” paper prepared for NASA Lewis Research

Center, Feb. 1, 1984.

16qBulloch, op. cit., p. 462-63.

lsSThese effo~s may have been stimulated by research for, or in

anticipation of, military and INTELSAT contracts. Hughes, in particular, has developed advanced technology for the Department

of Defense’s MI LSTAR series of military communication satellites

and for the INTELSAT VI series. Smith, CRS Report LTR84-1 58, op.

cit., p. 13.
Ch. 6—Satellite Communications ● 795

Photo credit: Nationa/ Aeronautics and Space Administration

Artist’s conception of the NASA Advanced Communication Technology Satellite (ACTS). The solar panels that provide

the power are deployed on the left and right of the drawing. The reflectors for the 30 MHz and 20 MHz frequency antennas

are shown above and below the satellite.

porating advanced technology. Were NASA not

to test such a satellite first, their argument has

been, the United States would lose its “preeminence” in satellite communications technology.

In 1984, however, Hughes Communications

Galaxy, Inc., filed with the FCC for permission

to construct, launch, and operate two Ka band

satellites with its own funds in 1988 and 1989.

The proposed Hughes satellites would have 16

spot beams, thus allowing multiple re-use of the

same frequencies. The on board signal processing techniques would not include the SSTDMA

planned for the ACTS satellite. The spot beams

would all be fixed rather than scanning. According to Hughes, the simpler onboard system would

allow the use of less expensive ground stations

than those that would be required for the ACTS

satellite. 186 On board switching circuitry would interconnect all 16 spot beams. The system in orbit was expected to cost about $450 million, to

be financed with private capital.

Hughes officials argued scanning spot beam

technology would probably never be economical for commercial satellites; there was thus no

commercial reason for NASA to invest in that

technology. 187 As for the advanced signal proclablt appears that Hughes also has the ability to install movable

spot beams in commercial satellites, at least at lower frequencies.

The recent application by Pan American Satellite Corp. to provide

international communications satellite service proposes to launch

a hybrid system based on the Hughes HS-393 satellite with one

“movable spot beam” and several fixed beams in 1987. The

movable spot beam is designed to transmit in C band. (“Application of Pan American Satellite Corp. for a Subregional Western Hemisphere Satellite System, ” May 31, 1984, before the FCC, pp. 15-18).

I BTSee jay C. Lowndes, “Hughes Plan May Spark Round of Ka

band Filings,” Aviation Week and Space Technology, Dec. 19, 1983,

pp. 28-29.
196 International Cooperation and Competition in Civilian Space Activities

essing (called “baseband processing” to be explored in the ACTS), Hughes argued that NASA

could do that research on the ground.188

The decision on whether the U.S. Government

should fund the space testing of advanced satellite communications technologies depends on

two classic arguments for government R&D as an

element in the commercialization of advanced

technology and on one argument unique to satellite communications:

1.

2.

3.

In

The Government needs to protect U.S. industry’s market share (jobs, exports, etc.)

from the R&D subsidies of other countries

by funding R&D of its own.

The Government should fund and possibly

conduct advanced R&D in many advanced

technology industries, such as aircraft, computers, telecommunications, etc., because

the private sector systematically underfunds

research that has two types of risks: the risk

that the technology will not work or be saleable and the risk that competitors will be

able to gain access to their expensive research as free riders. Industry therefore stays

with proven, if older, technology.

In satellite communications in particular,

only Government has the incentive to do research to guard against the misuse of a resource that is in the public domain, the geostationary orbit.

satellite communications, as in other R&D

contexts, evaluating the strength of these arguments is difficult because the chains of reasoning involved are complex and key facts and

cause-effect relationships are highly uncertain. In

satellite communications, there is no issue of the

narrowness of the groups that would benefit from

Government funding, assuming that the benefits

were real. Every member of the public is a communications user.

How strong is the argument that unless the U.S.

Government funds satellite research, the U.S.

communication satellite manufacturers will fall

behind their government-subsidized international

rivals? In particular, determining whether the

costly flight testing aspect of the ACTS program

IeBSmith, CRS Report LTR84-1 58, Op. cit., p. 4.

will be needed and effective in keeping U.S. firms

competitive with foreign firms will have to deal

with the folIowing question:

● Will there be enough of a world market for

Ka band satellites to justify a sizable research

program of any kind on Ka band satellites?

A large market for Ka band satellites would exist

only if there were substantial crowding in the geostationary orbit in the C and Ku bands, which in

turn would occur in the 1990s only if the demand

for U.S. domestic satellite communications expands very rapidly189 The current glut in U.S. domestic satellites, the failure, as yet, of direct

broadcasting satellites (DBS) to prove a market,190

and the almost certain existence of an extensive

U.S. fiber optic cable network in the 1990s, all

make the existence of a Ka band market highly

uncertain.

Assuming that there will be a sizable Ka band

satellite market, is the U.S. satellite manufacturing industry already competitive in Ka

band satellites? At least one U.S. satellite

manufacturer (Hughes Aircraft) asserts that

it has the capability to build and market fairly sophisticated Ka band satellites, with technology as advanced or more advanced than

the satellites in many of the foreign experimental programs.

Will there be enough of a world market for

satellites with scanning spot beams to justify

a sizable research program on the necessary

advanced techniques?

Depending on their cost, satellites with scanning spot beams might be purchased by satellite

buyers so that they could increase the capacity

of satellites in given orbital locations by more efficiently handling the communications of smaller

cities outside of metropolitan areas and of rural

areas. The actual cost and characteristics would

be important, since other techniques of increasing the capacity of given orbital locations will be

available, including the use of less sophisticated

and less costly versions of Ka band technology.

IBgSee the di~ussion of the satellite equipment market above in

this chapter.

190’~Fcc Ask~ to Delay Radio Spectrum Shift, ” Wa5hiftgf0n post,

Apr. 9, 1985, op. cit., p. D3.
Ch. 6—Satellite Communications 197

● Assuming that there are significant markets

for satellites with Ka band and scanning spot

beam features in the 1990s, will U.S. firms

gain an advantage over foreign firms from

the ACTS program or at least not lose the advantage they now have in commercial satellites? in part this depends on the usefulness

of the results; can NASA’s ACTS program,

with the advice and significant financial participation of the private sector, “pick winners”? Whether U.S. firms would gain a

competitive advantage also depends on

whether foreign governments match NASA’s

research program with programs of their

own intended to accomplish the same commercial objectives. Such induced programs

might cancel or partly cancel the effects of

the ACTS program on U.S. competitiveness.

There is also the problem of NASA transferring the technology to U.S. firms and simultaneously preventing foreign firms from gaining access to it.

Turning from foreign competition to the basic

role of government in advanced technology R&D,

how strong is the argument that the private sector would not perform the socially optimum level

of R&D in satellite communications, if there were

no ACTS program? There is general agreement

that the Government has a role in funding basic

research, since the private sector has insufficient

incentive to invest in it. Because an investing firm

would not be able to keep its competitors from

gaining substantial access to the research results,

such an investment would usually not be profitable. If the basic research results are available to

other firms through scientific publications or personnel transfer, they need not recover the costs

of the basic research to stay in business and, in

a competitive market, will tend to set their prices

too low for the investing firm to recover its costs.

The best way for a firm to avoid this situation is

not to do the basic research. Private firms may

also be too risk averse or too small to perform

the basic research function. Consequently, government (and certain other research institutions)

typically must do socially useful basic research,

if it is to be done at all.

At the other end of the basic/applied research

spectrum, firms are much more able to keep the

results of applied process, product, and market

research from their competitors and, thus, earn

sufficient revenues from them to finance the research and earn profits. They can keep their research results secret as proprietary information,

protect it with patents, incorporate it in engineering drawings and prototypes, and, finally, embed

it in organizational practices. Much applied research and development is so intimately involved

with the operations of firms and the characteristics of markets that only firms have the proper

incentives to perform it well. Government organizations that try to perform highly applied research may end up with commercially irrelevant

results.

To determine how much of the ACTS-type research private industry would do and what part

the Government should fund, answers to the folIowing questions should be sought:

●

●

What kind of R&D have U.S. satellite manufacturers been doing by themselves? In connection with the ACTS program, what kinds

of coordinated research have the private participants been willing to finance from their

own funds or in joint venture with other large

aerospace, communications and information

corporations? Using this evidence, what

kinds of research would the industry be likely

to do on its own? Considering that each of

the three largest satellite prime contractors

(Hughes, Ford, and RCA) own or expect to

own satellite capacity for sale or lease to customers, should they be expected to flightiest innovative components on their own

spacecraft? (The Hughes application promises to do just that.)

How important, within the overall U.S. Government program of R&D in advanced technology, are those components of the ACTS

program that only the government appears

likely to perform? Which particular markets

are they relevant to? The market for less sophisticated Ka band satellites or the market

for satellites equipped with scanning spot

beams and other sophisticated technology?

Are either of these markets likely to be large

enough to justify the cost of the ACTS

program?

Finally, the unique argument in support of satellite communications R&D, which does not have
198 ● International Cooperation and Competition in Civilian Space Activities

a counterpart in the debates over other types of

government-supported advanced R&D, is its relevance to potential crowding in the geostationary

orbit. Certain questions need to be answered in

order to evaluate the strength of the argument

that Ka band satellites will be needed due to the

crowding in the geostationary orbit:

●

●

How likely is crowding in the geostationary

orbit in C and Ku bands in the 1990s, considering the current satellite glut and the

emerging domestic and international fiber

optic networks? How damaging to the public interest would any crowding be that developed in the C and Ku bands, considering the existence of transmission alternatives.

How much of the private sector’s response

to any crowding in the two lower bands

POLICY

This chapter has discussed and analyzed a

number of elements in the U.S. international satellite communications sector. Implicit were various policy options. This section draws them out

explicitly.

The Future of INTELSAT

The United States has three principal longrange options for dealing with the future of the

international satellite communications system

(INTELSAT augmented, as it currently is, by a

number of coordinated regional systems):

1. It could attempt to preserve the current system, with INTELSAT continuing to carry the

preponderant amount of intercontinental

traffic and carefully controlled regional systems handling some intra-regional communications. Denial of the applications of private U.S. satellite firms to undertake largevolume transmit/receive operations across

the Atlantic or within the Western Hemisphere would be consistent with this goal.

2. It might assert the freedom of U.S. satellite

firms to offer substantial but not unlimited

intercontinental transatlantic and Western

Hemisphere satellite services, particularly in

business and television communications, if

it is satisfied that moderate competition in

●

●

would use existing frequency reuse techniques or less sophisticated Ka band satellites of the Hughes type, rather than sophisticated techniques, such as the ACTS scanning

spot beams?

How would crowding and technological responses to it be affected by any planning

mechanisms decided on in the upcoming

ITU Space WARC conferences?

IS there a role for an auction techniaue to

allocate the geostationary arc available ‘to the

United States in providing incentives to satellite manufacturers to develop arc-conserving technologies?

OPTIONS

these areas would not jeopardize INTELSAT’s

financial performance. This objective could

be pursued with the following short-run policy options:

a.

b,

attempt to negotiate a regulatory regime

with one or more major U.S. communications partners that would permit these

services before licensing U.S. satellite

firms to provide them, or

license U.S. firms first, then negotiate the

3.

regulatory framework with communications partners later (or let the firms do it).

It could opt to abandon special support of

INTELSAT; allowing U.S. firms to offer competitively as much and as many different

kinds of international satellite and cable service as they wish (and can find interconnections for), and expect INTELSAT to adjust,

with its survival a matter of its competitive

success.191 (I NTELSAT would, of course, continue to benefit from its monopoly position

in non-competitive world regions.)

The question of competition to INTELSAT involves two conflicting objectives: 1 ) preservation

of the “single global system” for foreign policy

lglThis option is not under active consideration by any Of the @

icymaking bodies in the U.S. Government, but is included for completeness.
Ch. 6—Satellite Communications 199

reasons and for its economic benefits, and 2)

maximum competitive access for U.S. telecommunications carriers on grounds of fairness and

the economic benefits that flow from competition. There is general agreement that U.S. policy toward INTELSAT in its formative stages engendered international goodwill and therefore

furthered general U.S. foreign policy objectives.

In the United States, at least, there is support

for the general ideas of increased competitive access for U.S. firms and fair international competition.192 As discussed in chapter 4, competitive

organization is the recognized normal form of industrial organization relied on by the United

States in most domestic and international markets. In the specific case of international telecommunications, however, the U.S. consensus

that competition promotes economic efficiency

has been tempered by the fact that the United

States simply does not have the power to create

fully competitive conditions either by unilateral

action or by entering into good-faith negotiations

with communications partners. Competition in

international telecommunications is not something that the United States can impose or that

will happen if negotiations fail. Other nations

have the unilateral power to disallow competitive arrangements when their territories are directly involved.

In the case of transatlantic entry, any U.S. satellite firms wishing to compete with INTELSAT

will need the permission of one or more foreign

governments to legally transmit into their territory. In cases where the public network is involved, it will also mean that the PTT will have

to be willing to interconnect.193 Even when the

PIT is wholly government owned, formal permission by the regulatory authorities may not easily

translate into actual connection by the PIT; when

the PTT is partly or wholly private, resistance by

an unwilling PTT may be even more of a problgZThiS consensus cfoes not generally extend beyond U.S. borders,

however, where the idea of competitive provision of “basic public services” by lightly regulated private companies is often severely

criticized.

lgllntercon nectlon, however: does not mean nondiscriminatory

treatment. For this to occur, the PTT would have to agree to send

communications it originates via each of the U.S. carriers’ satellite

facilities (according to some formula) in competition with the

INTELSAT facilities of which it is part owner.

Iem. Reciprocal access of communications carried via foreign-owned satellites into the United

States could be a condition for the entry of U. S.-

owned satellite operations into foreign countries

in many cases; foreign countries might alternatively insist on joint ownership as a condition for

operation.

The three options listed above should be seen

as different tradeoffs between the U.S. foreign

policy objective of friendly relations with other

countries and the economic interests of U.S. telecommunications producers. Where the interests

of consumers lie is subject to debate and depends

on how much competition would actually be established. 194

Option 1 would attempt to prevent private

competition to I NTELSAT in any but minor ways.

Option 2 would move toward increased competition, while keeping INTELSAT viable. Option 3

would disregard any special consideration for

INTELSAT and would move toward a competitive system if at least a small number of U.S. communications partners would let it.

In option 2, there is a significant range of tactical options between the extremes of “license

first then negotiate” and “negotiate first for as

good a deal as possible and then license in conformity with it.” Because the United States does

not have the power to remake the international

regulatory regime unilaterally, if it decides to promote greater competition in international telecommunications, it should choose tactics that will

help gain the agreement of the relevant foreign

countries (and not harm general U.S. interests).

Cases can be made for both of the tactical options listed or for something in between.195

For instance, would-be satellite providers could

be given permission to construct (but not launch)

their satellites, prior to the completion of the

lggone argument in favor of option 2 is that it would allow some

measurement of the performance of competitive satellite operations and thereby allow a better estimate of the costs or benefits

to U.S. consumers, and to those in developing countries, of maintaining INTELSAT as a viable entity.

lgssee Ben W. Rein, et a]., “lrnplementa/ion of a U.S. ‘Free Errtry’ Initiative for Transatlantic Satellite Facilities: Problems, Pitfalls

and Possibilities” (Washington, DC: Wiley, johnson & Rein, july

3, 1984); and Daniel P. Kaplan, “Buying and Selling International

Airline Deregulation, ” paper presented at the Allied Social Science

Associations Meetin~, Dallas, TX, Dec. 28, 1984.
200 ● Intemational Cooperation and Competition in Civilian Space Activities

INTELSAT coordination process. Construction

took place in the Eutelsat and Arabsat cases prior

to coordination. Alternatively, permission both

to construct and launch satellites could be given

but made contingent on completing the coordination process. In any case, there will be a mix

of the unilateral exercise of sovereign power and

of negotiations with communications partners

over bilateral or mu Itilateral communications arrangements.

The President has decided on option 2, in finding that alternative satellite systems (not connected to public networks) are “required” in the

national interest, but has not indicated his tactical decisions.196 To date the United States has

conditionally approved applications by U.S. domestic satellite providers in the Western Hemisphere and may proceed to do the same for the

prospective transatlantic satellite providers. What

action the United States should take if INTELSAT

refuses to coordinate some or all of the conditionally approved services is another important

tactical issue yet to be joined.

In option 3 the tactical issues would not be so

varied. For instance, because this option, to abandon special support of INTELSAT, would be the

most disruptive of the current system, the United

States’ ability to negotiate it with most of its major communications partners in advance would

be in great doubt. Hence, the license-first tactic

is probably implicit in it. This, of course, would

not rule out the ordinary type of diplomatic interaction by which the Government keeps its allies and trading partners informed of what it is

about to do.

The Future of COMSAT

A separate set of policy options apply to

COMSAT. Congress could:

1. Continue current legislative policy toward

COMSAT, except with greater legislative oversight of the FCC’s surveillance of COMSAT’S

rate-of-return and its separation of regulated

from unregulated activities. In this option,

lgGSee previous discussion in this chapter of the Reagan Administration’s 1984 decision to support limited operations by new satellite entrants.

2.

3.

COMSAT would continue its monopoly status as the sole U.S. owner of INTELSAT investment shares and thereby as an intermediary in both traditional services and the new

INTELSAT Business Service (IBS).

Mandate a rapid evolution of COMSAT into

a fully competitive, general communications

carrier, ending its special status at some specified future date by allowing other carriers

direct ownership of or “direct access” to

INTELSAT space segment facilities.197

Retain COMSAT’S monopoly as the sole conduit to INTELSAT, but restrict this role to the

minimum and force divestiture of all other

activities.

The fact that COMSAT is an ongoing, regulated

enterprise that has managed the international satellite communications of the United States with

technical effectiveness at declining prices to the

carriers it serves and, as the U.S. signatory, has

maintained good relations with U.S. communications partners is an argument in favor of option 1, to continue the status quo.

As the FCC sees it, this is an evolving status quo.

For instance, several other communications firms

are now allowed direct technical access to

INTELSAT space segment facilities for I NTELSAT

Business Service (IBS), although they still must pay

COMSAT’S tariff for their use.198 Its Earth station

decision also now allows carriers to own Earth

INTELSAT stations.199 The FCC also allows COMSAT

to participate in other regulated and unregulated

‘

97’’ Direct access” is the term used by the FCC to refer to various mechanisms whereby the other carriers could bypass COMSAT without actual ownership of an investment share in INTELSAT.

Among the proposals the Commission considered (and denied) in

its direct access decision were: 1 ) a capitalized lease option whereby

the carriers would include in their rate bases the amounts they now

pay COMSAT for circuit leases, and 2) an IRU (indefeasible right

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 Commission also did not foreclose the possibility that it might revisit

the direct access question in the future. (FCC, “Second Report and

Order . . .,” op. cit., jan. 11, 1985, pp. 8-9).

198The executive branch has recommended that “cost-based car -

rier and user access to INTELSAT with respect of customized services” be ordered by the FCC but has not yet specified whether this

is compatible with current 16S arrangements (Departments of State

and Commerce, “A White Paper on New International Satellite Systerns, ” op. cit. p. 33.

199FCC, “second Report and Order . . .,” op. cit., Jan. 11, 1985,

p. 10.
Ch. 6—Satellite Communications . 201

communications markets, with strict separation

of accounts and of elements of the corporate

structure. In accord with FCC policy, COMSAT

will now also be allowed to offer 1NTELSAT services to customers other than the international

service carriers.

Options 2 and 3 would both make major changes

in COMSAT’s position. They might be attractive

to those who have argued that, no matter how

carefully COMSAT and its regulators attempt to

insulate COMSAT’s special role as the sole U.S.

intermediary to INTELSAT from its other roles as

a basic and enhanced communications carrier

and equipment manufacturer, it cannot be effectively done. Thus, in this view, COMSAT would

always be able to gain unfair competitive advantage from its special position.200 The solution of

option 2 is to end COMSAT’S special role, and

that of option 3 is to restrict it only to that special

role.

Option 2, to end COMSAT’S special role by allowing other U.S. businesses direct ownership of

INTELSAT space segment facilities on the same

basis as COMSAT could be difficult to implement,

if it would require the agreement of the Board

of Governors of INTELSAT or other INTELSAT

bodies. Such agreement might not be forthcoming or might not be forthcoming on terms the U.S.

would find acceptable. 201 Various direct access

plans, which have been proposed to the FCC

would allow the carriers to acquire ownership of

assets from COMSAT, but depending on the arrangement, COMSAT might end up with a “ministerial role” in which it had large responsibility

but little financial stake. If it did retain substanZooThe fear that COMSAT would be able to subsidize its competitive activities with revenues as monopoly provider of INTELSAT

space segment services is one aspect, but information access is also

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

taken at those meetings is “critical to the future course of IRI’s business plans, and those of others who are dependent on the INTELSAT

system.” (Statement of Steven A. Levy, U.S. Congress, House, Hearings on International Satellite Issues before the Subcommittee on

Telecommunications, Consumer Protection, and Finance, June 13,

jUly 25-26, 1984, pp. 156-185)

zOIThe substitution of a new entity, perhaps governmental, to rePresent the United States so as to avoid the need to involve INTELSAT

in the decision can best be san as a version of option 3 to restrict

COMSAT (or the new entity) to the role of owner of and intermediary to INTELSAT or as a separate option. See the following discussion of option 3.

tial financial stake (perhaps because the other

carriers did not choose to or were not allowed

to acquire assets proportional to their use of

INTELSAT) the situation would be little different

from the current arrangement.202

Option 3, which would restrict COMSAT (or

a successor, perhaps governmental, entity) to its

special, highly regulated role as the owner of and

intermediary to I NTELSAT, would also remove

the possibility that COMSAT’S special position in

INTELSAT could be used to give it a competitive

advantage in other activities, since it would not

then have any other activities. This option could

take diverse forms with diverse effects on market structure, however, depending on ownership

and other restrictions that might be placed on the

restructured COMSAT and on other changes i n

the regulatory regime in international communications. For instance, if U.S. international carriers

could gain ownership rights in the stripped-down

COMSAT, such an arrangement could constitute

a capacity cartel203 and could make the current

regime even less competitive than it is now.

Full assessment of the regulatory requirements

under options 2 and 3 would require further analysis, but this brief treatment indicates that solutions designed to mitigate the competition problems

caused at the domestic interface with INTELSAT are

themselves likely to engender other, knotty problems of competition and regulation.

Satellites v. Fiber Optic Cables

The demand for international satellite communications services will undoubtedly continue to

grow rapidly at least until the early 1990s, but between then and the end of the century, it may

or may not continue to grow. The pace of that

Zozlt should be noted that even if the carriers were allowed to

gain ownership rights in INTELSAT, this would reduce but not eliminate their extra incentive to use cables rather than satellite transponders. Their traffic-sensitive satellite costs, which, depending on

the exact arrangements, might be reduced from the COMSAT tariff to something closer to the INTELSAT unit charge, would still be

greater than the minimal traffic-sensitive costs of using the cables

they own.

zOJThe term cartel is used here and elsewhere in this assessment

descriptively to mean a group of firms that openly communicate

with each other and reach joint decisions on such things as price,

capacity, product offerings, market participation, etc. We do not

use it to judge whether firms are in violation of the antitrust laws.
——. .— ——

202 ● International Cooperation and Competition in Civilian Space Activities

growth will be conditioned not just by technology developments but also by choices that

government will make with respect to facilities

regulation, Options for the U.S. Government

include:

10

2.

3.

4.

Continue to control the amounts of transatlantic cable and satellite capacity available

by approving or disapproving the facilities

plans of cartels of U.S. and foreign carriers

or of individual firms, and to oversee the

loading of traffic on satellites and cables so

that some form of balanced use of cables

and satellites is maintained. Primary U.S. responsibility for international facilities regulation would remain with the FCC.

Same as above, except that no systematic

policy of facilities balance would be followed. Technological competition between

cables and satellites would be allowed. Action might be taken to reduce carrier bias

toward cables, but other than this, the

market, the carriers, and foreign regulation

would be the primary determinants of the

relative use of satellites and cables.

Leave U.S. telecommunications firms competitively free to invest in international cable

or satellite facilities as they see fit and secure

international connection rights as they are

able. Reciprocal access for carriers using foreign-owned facilities is likely to be a condition for such connection. When entry to foreign service markets is limited, regulate the

country-pair cartels that may arise to prevent

high rates and the whipsawing of U.S. carriers.204 Primary responsibility for overseeing the process would probably remain with

the FCC.

Change to a more activist international-facilities policy involving a greater emphasis on

bilateral government-to-government agreements on telecommunications facilities. Under

zodwhipsawing refers to a feared practice on the part of foreign

monopoly PTfs in the negotiation of settlement rates with U.S. competitive carriers whereby the privilege of connection is awarded

to the single U.S. carrier offering the highest accounting rate (or

is awarded to each of a number of carriers based on what their

offers are). Competition among the U.S. carriers could reduce their

revenues, but the price of the end-to-end message could still be

kept high if the favored U.S. carrier or carriers had to pay out

monopoly profits to the PTT. See Evan Kwerel, “Promoting Competition Piecemeal in International Telecommunications, ” working paper, Office of Plans and Policy, FCC, December 1984.

this option, the United States would undoubtedly seek bilateral telecommunications

collaboration with countries like the United

Kingdom or Japan that are favorably disposed toward deregulation. In such a strategy there could also be room for multilateral

communications agreements and for more

general multilateral agreements on trade in

services. This strategy would require more

negotiation than the current regulatory regime and would be similar to the U.S. a: -

preach to international airline regulation.

The executive branch (National Telecommunications and Information Administration,

the State Department and/or the U.S. Trade

Representative) would be likely to take over

the leadership in international facilities regulation from the FCC.

Option 1, to continue the present policy of controlling transatlantic communications capacity

and its division between satellites and cables, has

the attractive feature that it is a well-established

policy in which flexibility can be obtained through

ad hoc actions of the FCC. In support of current

policy, INTELSAT and others have expressed the

concern that unrestricted facilities competition

between cables and satellites, in a still restricted

international market, might result in:

1. excess capacity that consumers might have

to pay for through higher-than-necessary

prices, and

2. serious difficulty for INTELSAT with attendant political problems.

Nevertheless, a policy of balance–balanced

construction and/or balanced use—could entail

a large economic cost to U.S. consumers if the

cost advantage of cables (or satellites) should

prove to be substantial and if it required carriers

and consumers to use facilities they would otherwise not choose to use.205 A second question

Zosunder a balance policy, a desired distribution of traffic between

cables and satellites could result from either controls on construction or on use. If a carrier, carrier pair, or carrier consortium were

convinced that the FCC would enforce a balanced use policy (e.g.,

50-50 or “balanced Ioading’’–see note 46, p. 161 for the FCC’s

definition of “balanced loading” between cable and satellite facilities), they would be unlikely to invest disproportionately in facilities they would not be allowed to use.
Ch. 6—Satellite Communications ● 203

relating to balance is whether the existence of

satellites should be guaranteed by government

regulation so as to provide security against communications interruption or whether this function

can be provided by redundant cable capacity.

Any large shift to cables would have important

effects on INTELSAT and make it more likely that

INTELSAT could become seriously unprofitable,

so the issues of facilities planning and competition for INTELSAT are closely linked. The recent

FCC recommendations of approval for approximately 330,000 voice-equivalent, transatlantic circuits in new private fiber optic cables, without

much attention to its planning process, indicate

that the Commission is acting without much regard for this link.

Option 2, to avoid any policy of balance but

to continue to attempt control of total capacity,

would leave the present reguIatory regime in international communications largely intact, with

the important exception that, if carriers were free

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

toward both INTELSAT and COMSAT (see discussion of policy options on competition to INTELSAT,

above.) It would have the advantage of partially

meeting the long-standing objections of European

PTTs to unilateral U.S. Government intervention

in facilities decisions. (The favorable actions by

the FCC and the State Department on cable landing licenses for large capacity private fiber optic

cables, however, may have removed option 2 as

a possibility.)

Options 3 and 4 would represent the abandonment by the United States of the North Atlantic

Consultative Process as it is now structured and of

INTELSAT’S position as the monopoly transcontinental satellite provider. They would also give

freer rein to technological experimentation as individual cable and satellite operators (including

INTELSAT) attempted to provide specialized facilities to meet differentiated market demands,

Option 3, where the FCC would oversee the

process of facilities decontrol, might have a number of outcomes depending on the reactions of

foreign governments and the ability of consumers

to circumvent restrictive regimes.

Option 4, the activist strategy of bilateral negotiation, however, would almost certainly move

the international communications industry away

from its present facilities structure, which on the

U.S. side has till now meant the dominance of

AT&T and COMSAT in the cable and satellite consortiums, respectively, along with the PTTs.

Again, outcomes are difficult to forecast, but, for

instance, the fortunes of the U .S, transatlantic satellite applicants and the U.K.-led fiber optic cable

group could very well be the subject of a bilateral

U.S.-U.K. communications agreement that would

regulate the conditions of facilities competition.

Such a bilateral agreement would be likely to include restrictive features; nevertheless, the United

States might be able to secure enough facilities

decontrol that there would be a large increase

in competition in U.S,-U. K. telecommunications.

Competitive effects, such as pressure on prices,

might also extend to the wider market in other

countries whose communications can reach the

United States by transiting the United Kingdom.

Access of U.S. Carriers

Foreign Markets

The essence of the current regime

t o

in international communications is that U.S. carriers are

barred from competing freely for the international

communications business of either U.S. or foreign residents. With deregulation firmly entrenched as its domestic communications policy,

the United States is now led to a number of specific objectives in international communications

policy. In light of the fact that pursuit of these objectives might engender conflict with important

countries, they can be analyzed according to the

following options:

1. Give regulatory support and diplomatic representation to: a) carriers desiring to make

voice and other connections with foreign

carriers, b) data processing and enhanced

telecommunications service providers wishing to service the needs of U.S. and foreign

businesses, and c) U.S. multinational firms

desiring to establish private communications

networks. In this option the FCC and the Departments of State and Commerce would do
204 ● International Cooperation and Competition in Civilian Space Activities

2.

3.

little more than facilitate carriers’ efforts to

gain market access.

Formulate an activist policy of bilateral negotiations to secure interconnection (particularly, message-telephone) rights in foreign

countries for U.S. carriers. Where possible,

attempt to stimulate competition in all aspects of international communications by

negotiating direct access for U.S. firms to foreign consumers. The United States would

likely be called on to extend equivalent access to foreign firms in the United States.

Seek to accomplish the same objectives on

a multilateral basis through an effective

GATT agreement on international trade in

services.

Option 1 is essentially to continue present policy, with increased diplomatic representation for

U.S. telecommunications service firms seeking

access to foreign markets. Such a policy is feasible and desirable, as far as it goes, but it is doubtful that it would, in fact, result in market access

in many countries in the face of continued foreign opposition. Only if domestic deregulation

in our communications partners’ home markets

should proceed very rapidly, would effective access for U.S. firms be secured in this way without conflict. Even then, while domestic deregulation may be a necessary condition for access,

it is not a sufficient one, since U.S. firms could

still be excluded.206

Option 2, the activist policy of bilateral negotiations is probably the option that would achieve

the greatest gains in market access for U.S. telecommunications service firms. In this option, substantial bilateral and multilateral conflict, engendered by U.S. efforts to export its deregulation

policies into the international market, might entail substantial foreign policy costs in our relations

2~That this will happen is the conclusion of one knowledgeable

European observer (Guy de jonquieres of the Financia/ Times). He

notes that, while the PTT ministers of the EEC have agreed to open

a small percent of Pll procurement to competitive bidding, it is

only for the benefit of bidders from European countries. He specifically expects most European, governments to continue to restrict

the opportunity for U.S. firms, in particular IBM, to enter telecommunications markets unrestrictedly. (Text of speech to the USTSA,

Washington DC, Apr. 17, 1985, pp. 41, 45.)

with our principal communications partners,

who, after all, are also our principal allies. The

advantage of this option is that both the source

of the conflict and effective negotiating strategies

could be determined on a country-by-country basis. This option of bilateral negotiation would also

allow the agreements reached with one communications partner to put liberalizing pressure on

negotiations with another, since consumers might

be able to circumvent the high prices of the latter

country by routing their U.S.-bound communications via the former. This aspect of bilateralism

might engender the greatest amount of conflict

but also the greatest deregulation.

Option 3 (the multilateral option) would not

appear to be any more likely to succeed than option 1 (the status quo) for telecommunications

services as a whole, because any GATT agreement on trade in services would have to take account of the desires of the most restrictive countries. If and when domestic telecommunications

is liberalized in all major OECD countries, significant gains in access for service firms could

probably be made through multilateral understandings, but not before then. Nevertheless, a

near-term multilateral agreement on trade-in services should be pursued in any case in the telecommunications area for the benefit of data processing and information firms.

The differences between options 1 and 2 are

matters essentially of degree. They are distinguished by judgments about how much diplomatic capital to spend on attempting to gain access for U.S. telecommunications service firms

in individual countries, particularly when the attempt engenders conflict. If a significant effort

(option 2) is chosen, the fact that there are many

U.S. actors on the international telecommunications scene who officially or unofficially negotiate with foreign government entities—notably the

FCC, the State Department, NTIA, COMSAT,

AT&T, the other international service carriers,

and, now, the would-be satellite and cable providers—raises the question of whether effective

negotiations to serve the national interest can take

place outside the framework of formal bilateral

communications agreements.
Ch. 6—Satellite Communications ● 205

International Trade in Satellite

Communications Equipment

Freer trade in telecommunications equipment

would help two important sectors in the United

States—consumers of telecommunications services, who benefit from using whatever cheaper

or better imported equipment might be available,

and the satellite communications equipment

industries, which would like to export more to

currently restricted markets. U.S. options for reducing barriers to international trade in telecommunications equipment include:

1. Continue to follow a quasi-multilateral approach through the GAIT process of opening access to government procurement and

the OECD process of controlling the terms

of export finance. This involves bilateral negotiations to persuade other governments to

put their PTTs under the government procurement code (or an equivalent agreement)

and to regularize their use of mixed credits.

Major departures from most-favored-nation

treatment of U.S. trading partners would be

avoided in this option.

2. Aggressively enforce more trading reciprocity by political persuasion, threats of retaliation, and bilateral negotiations. Take more

positive government action to promote U.S.

exports through subsidized export credits

and industrial policy. If reciprocal market access can not be brought about, take steps

selectively to close the U.S. market to countries that restrict U.S. exports.

Opinion appears to be divided over whether

the current policy, option 1, will actually be effective in opening the Japanese market to U.S.

satellite equipment exports. (It is not expected

to do so in the immediate future.207) It clearly has

not opened up European markets, although these

markets, particularly for specialized telecommunications and data processing equipment and

207 telecommunication equipment as a whole in 1983 the Department of Commerce forecasted that Japan would import only

$210 million in 1986 from all countries, compared to a total Japan

market of $6.5 billion and japanese exports of $2.6 billion. (international Trade Administration, “Country Market Survey: Telecommunications Equipment, Japan, ” April 1983. Nevertheless, japan

appears to be making an unprecedented effort to encourage imports (Susan Chira, “japan Urges Companies to Buy Foreign

Goods,” New York Times, Apr. 23, 1985).

components of satellites and Earth stations, are

not completely closed.208 Despite the U.S. success in negotiating the bilateral agreements to

open the wider Japanese telecommunications

market to U.S. suppliers, the Japanese satellite

market was specifically placed off bounds to foreign suppliers in 1984, even though Japan is in

the special position of having an embarrassingly

large trade surplus with the United States, The

United States later succeeded in having this restriction partially removed, but how much actual

effect on sales this will have is uncertain.

Were the United States to single out satellite

communications equipment as a special target

for reducing trade barriers in European producer

countries, it would be an especially difficult task.

On the one hand, many European countries,

rightly or wrongly, see U.S. satellite equipment

makers as heavily subsidized—earlier in their development by NASA, more recently by DOD.

Those countries which potentially offer competition to U.S. satellite manufacturers have devoted

large government resources to try to reduce their

national dependence on U.S. suppliers. While

they have been willing to purchase U.S. technology where necessary, including satellite subsystems, they are not eager to see their fledgling industries outcompeted by technologically more

capable U.S. competitors.

Option 2 would take more aggressive government action to promote exports and secure reciprocal market access. It is an alternative to

striving for a more open international trading

environment in satellite communications equipment. Exports might be supported by making

Government-subsidized export credits available,

by attempting to use political influence to promote foreign sales, or by using foreign aid programs to subsidize sales to developing countries

through mixed credits. Government subsidy of

export activities involves distortions in the operation of the market system. Insofar as other countries seem to be engaging in these practices, the

United States may decide that in defense of its

own firms it can do no less.

zoaseveral u .s. telecor-nmu nications equipment firms have also

formed joint ventures with European firms with the object of thereby

gaining some access to their markets, among other reasons (e.g.,

AT&T with Olivetti and Fairchild with Alcatel-Thompson).
206 . International Cooperation and Competition in Civilian Space Activities

Imposing retaliatory trade barriers in the U.S.

market in order to secure the opening of foreign

markets might succeed, or it might engender further retaliatory measures by the countries targeted. 209 Because they involve breaching the

most-favored-nation principle, engaging in such

practices in many sectors runs the risk of inducing escalator responses from other governments,

ultimately restricting international trade as a

whole and leaving everyone worse off.210 Judicious use in individual sectors, such as telecommunications equipment, could serve the purpose

of indicating the seriousness with which the U.S.

regards the barriers in those sectors and could

serve as a bargaining chip.211 Even if the Government should decide to use public resources to

support particular industries, whether satellite

communications should be singled out in the

competition for such government resources

would remain to be determined. There are, of

course, many other national demands for government budgetary resources in addition to export subsidies, a fact that has led the Reagan

Administration to propose the curtailment of

Export-import Bank funding in the 1986 budget.

Research and Development Subsidies

Another way of attempting to improve the international competitive position of the U.S. satellite equipment industry would be for the Government to carry out research and development

in advanced communications technology that private manufacturers seem unwilling or unable to

finance with their own resources. This is just what

Zoqoccasioned by the $37 billion 1983 bilateral trade deficit with

Japan, a number of legislative proposals have been directed at the

overall trade deficit and at the telecommunications equipment trade

deficit in particular, among them a 20 percent surcharge on all imports from japan for 3 years and a boycott of Japanese telecommunications equipment until the Japanese telecommunications

market is fully open (Washington Post, jan. 27, 1985, p. D1 ). See

also U.S. Congress, Senate, Committee on Finance, Hearings on

the Telecommunications Trade Act of 1984(S.2618) Before the Subcommittee on International Trade, Sept. 12, 1984.

Z1OU s Congress, joint Economic Committee, “1985 joint ECOnomic” Report,” Washington DC, Apr. 18, 1985, ch. 6.

ZI I congressional statements also have an impact, Such statements

at a March congressional hearing were reputed to have “shocked

the Japanese and may have contributed to their willingness” to alter

complex proposed telecommunications products regulations that

would disadvantage U.S. suppliers (Washington Post, “japan Softens

Stance in Trade Talks, ” Mar. 19, 1985, p. Dl).

is being done in the NASA Advanced Communications Technologies Satellite (ACTS) program.

Since Congress provided funding for the ACTS

program in the current budget, the following options relate to the scale of the program in future

years:

1.

2.

3.

4.

Fund the full ACTS program, in one of its existing versions, including the flight test of the

experimental satellite.

Continue to fund the research programs on

the ground but postpone from year to year

a decision on construction and flight testing

of the spacecraft until clearer support for one

or more of the three supporting arguments

discussed earlier occurs. For example, the

United States might want to postpone commitment to a space test until a sizable market for satellites with scanning spot beams

emerges and potentially competitive government programs abroad have committed

funds to space testing of similar technology.

Continue funding only for those research

programs that can be developed on the

ground (e.g., the baseband processor for onboard message switching), but make a decision to leave flight testing and its funding

to the private sector, at its option.

Return NASA satellite communications research to the very low levels of previous

years, leaving responsibility for maintaining

U.S. competitiveness in communications satellites to the private sector.

Budgetary and foreign response considerations

will clearly continue to weigh heavily in future

decisions on the ACTS program as they have in

the past. There are significant arguments in favor of the program—promoting the international

competitiveness of U.S. satellite manufacturers,

the economic efficiency of the U.S. economy,

and the danger of orbital crowding (see discussion of these arguments above). If none of these

arguments in favor of the program are deemed

to be strong enough, the U.S. Government would

certainly be able to apply the significant resources

of option 1 to other NASA projects, to other Government purposes, or to deficit reduction. A lot

depends on whether sizable markets for either

Ka band satellites of any kind or for ones incor-
Ch. 6—Satellite Communications ● 207

porating ACTS-type sophisticated scanning spot

beams can be realistically forecasted.

Options 2 and 3 are ways of hedging the Government’s position by limiting it to the relatively

less expensive, but arguably critical research that

can be done on the ground. Option 2 would give

the U.S. Government a way of waiting to see if

foreign governments are first attempting tradeimpacting R&D before it does the same. At the

present time foreign governments have not yet

committed significant funds to flight test programs

for satellites with such advanced features as scanning spot beams. Congress could take the waitand-see attitude implied by option 2, with the risk

that the time lags involved could give foreign

manufacturers a significant, avoidable advantage.

It would open the possibility that the executive

branch could reach an understanding with specific foreign governments about the level and type

of their export-relevant R&D subsidies for communication satellites. The funding level and nature of the ACTS program could be the U.S. bargaining chip in such discussions.

The case can be made here (as in other R&D

contexts) that the Government’s best contribution is at the research rather than at the development stage. The more general the research, the

less danger that the Government, in attempting

to pick the specific configurations of ideas that

the rapidly changing satellite market will adopt,

will pick commercially nonviable ideas. Option

3 would take the Government out of the expensive and risky development end of the business.

h would also preclude the research planned by

the private sector from its own funds using the

experimental ACTS satellite. Of course, the absence of a government development program

might in the longer run stimulate private sector

development efforts.

The Government could also use either option

2 or 3 to wait until the outcome of technological

competition between fiber optic networks and

satellites in U.S. domestic communications—and

thus the demand for communication satellites—

becomes clearer. There is a clear possibility that

both domestic and international fiber optic networks will have sufficient capacity and coverage

by the mid-1990s that new communication satellites will be priced out of the market for volume communications. In that event the eventual

market for the ACTS innovations could be too

small to justify a large program.

Option 4, essentially the abandonment of an

ongoing program funded by Congress, would be

an extreme measure (perhaps justified by the general budgetary situation), because much of the

potential future benefit from the current research

effort would undoubtedly be lost.

Participation in the International

Telecommunication Union

In the face of growing “politicization” of ITU

conferences and technical committees, the

United States seems to have three broad options.

It could:

1.

2.

3.

stay in the ITU but take an increasingly confrontational posture, using the threat of withdrawal from the organization to attempt to

prevent votes against the maintenance of

principles important to the United States;

reduce or end U.S. participation in the ITU

and establish U.S.-led, ad hoc international

arrangements for sharing the radio frequency

spectrum; 2

12

attempt a more flexible approach in which

a broad range of telecommunications and

other issues, negotiated in the ITU and elsewhere, are treated as “linked. ” The emphasis here would be on a centralized bargaining

strategy with developing countries intended

to maximize U.S. interests across the board.

In this option, U.S. delegations to conferences and committees would need to have

very high levels of both telecommunications

industry and foreign policy knowledge.

The United States faces a dilemma here. On

the one hand, the international regulation of

telecommunications seems to some observers to

be in danger of further politicization and of bloc

voting to the detriment of U.S. telecommunications and other interests. Option 1, a confrontaZ1 zFOr a fu Iier discussion of these options and the middle course

of participating fully in the ITU but adhering only selectively to its

agreements, see National Telecommunications and Information Administration, op. cit., pp. 35-55.
208 ● International Cooperation and Competition in Civilian Space Activities

tional approach within the organization to meet

this, has been been discussed within the Administration as a means to minimize the damage to

U.S. telecommunications interests (e.g., in the allocation of the geostationary orbit) without inducing the breakdown of the international telecommunications system.

In option 2, withdrawal from the ITU, the

United States faces a significant risk of a breakdown in the international system of assigning

radio frequencies and developing international

standards for telecommunications equipment.

The United States also runs the risk that if the international system continued to operate without

U.S. participation, it might act with increasing

disregard for U.S. interests. Either a proliferation

of inconsistent national regulations or a coherent

international regime that was injurious to the

United States could develop and damage both

U.S. economic and national security interests. It

is not clear that U.S. technical leadership and

economic power would suffice to induce the international community to follow U.S. telecommunications preferences in the absence of our

participation in the ITU.

Option 3 is the diplomatic option, where the

avoidance of conflict continues to be an important value in U.S. foreign policy. It might lead to

the United States being induced to accept a spectrum-and-orbit regulatory regime that we would

otherwise oppose. The attractiveness of this option depends on how important the linkages to

other foreign policy objectives are and on how

deleterious the ITU actions opposed by the

United States might be. Because important U.S.

economic and military interests are dealt with by

international bodies that regulate the spectrum

and orbit, as is rarely the case in other individual international fora where the United States can

be outvoted by developing countries, the United

States is likely to prevail in the ITU in the face

of significant opposition only if it is willing to

make a large investment of political and economic resources in a variety of bilateral and multilateral contexts. For this reason, options 1 and 2,

where the United States would attempt to live

with significant defeats in the ITU and would

thereby save the investment of resources that it

might have to make under option 3, could be

more attractive budgetarily.

Assistance to Less Developed

Countries

Assistance in satellite communications is one

among many potential elements in U.S. aid programs. Because of the large number and complexity of individual country programs, because

program elements are interrelated, and because

host-country government officials are actively involved, Congress necessarily leaves detailed planning of such programs to program officials. For

example, the role of receive-only rural satellite

transmission, through which educational television programs can be made available to villagers,

is viewed by Al D in the context of the actual agricultural and social development activities to

which the information is related and in comparison to alternative means of accomplishing the

educational objectives. The role of satellite communications in national systems of addressable

telecommunications–telephone, telegraph, and

telex—can also only be assessed effectively in the

context of the country involved, its existing and

planned national telecommunications system, its

existing and planned domestic regional telecommunications systems and its development

program.

Satellite communications options, like those

concerning other aid program elements, are typically formulated at the program level, even if

higher levels in the U.S. Government may ultimately become involved in program and funding decisions. This country-specific nature of assistance programs makes it difficult to formulate

general options for satellite communications assistance, ones that would have worldwide applicability, and the more detailed country-program

options that might be formulated for given countries’ use of satellite communications are outside

the scope of this assessment. Consequently, we

do not set out options for development assistance

in satellite communications here. Rather we highlight a number of issues in which satellite communications figures prominently, which Congress
Ch. 6—Satellite Communications ● 209

may find it useful to explore with relevant officials in its oversight of country development assistance programs and the export credit program.

Country-specific considerations for satellite

communications include:

●

●

●

●

●

●

the goals of U.S. assistance in the country

(i.e., the relative emphasis given to rural development, regional development, industrial

development, social and institutional development, general support of the regime, the

support of particular power centers and institutions within the country, etc.);

the extent of U.S. and other industrial-country use of mixed credits for financing equipment exports to the country;

the volume of assistance the United States

gives to the country through bilateral v. multilateral channels;

the philosophies toward development policy of the country’s government and the

various donor agencies and organizations

through which the United States gives assistance (e.g., AID and the World Bank);

the presence or absence of special country

characteristics enhancing the usefulness of

satellite communications, such as large geographical size or insularity and other factors

that limit the feasibility of terrestrial transmission modes; and

the difficulties that the country has had or #

is likely to have with technology transfer in

advanced technology systems—particuIarly

in training and maintenance.

This variety of country-specific considerations

demonstrates the difficulty of formulating general

policy options toward satellite communications

assistance. Often the issues that are relevant to

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:

1. How much emphasis, financial and otherwise, should U.S. development assistance

programs give to the development of a country’s general telephone/telegraph/telex infrastructure, as opposed to the communications components embedded in particular

agricultural, health, education, industrial,

and regional development projects.213 Current AID policy prefers the embedded component approach.214

2. Are there development assistance programs

for specific countries that Congress can identify as underinvesting in satellite communications technologies for rural and remote

area residents? New technologies allowing

much smaller and less expensive receiving

dishes and other advances are important reasons to make this examination.

3. Should Congress finance more satellite communications R&D directed specifically at the

needs of developing countries?

4. Given the differing goals of U.S. programs

5

in various countries, can countries be identified in which U.S. mixed credit financing

of satellite communications systems is indicated on important development assistance

or political grounds (in addition to its usefulness in financing exports of U.S. satellites

and ground equipment or protecting against

the mixed credit programs of other countries)?

What are the relative political advantages for

the United States of multilateral v. bilateral

telecommunications assistance programs

compared to the general thrust of the U.S.

aid program? Considering U.S. need to deal

with developing nations within international

telecommunications organizations, does

telecommunications constitute a special case

for directing relatively more (or relatively

less) assistance through multilateral channels

(e.g., the Center for Telecommunications

proposed by the Maitland Commission or

the World Bank)?

ZI j[n early 1985 the Senior Interagency Group on International

Communications and Information Policy recommended to the National Security Council that the telecommunications development

be given strategic priority on the US. foreign policy agenda because of the desirability of promoting the free flow of information,

U.S. exports, and economic development (“U.S. Development

Communications Assistance Programs, ” Feb. 1, 1985).

Zlasee policy Determination PD-1 O, U.S. Agency for International

Development, op. cit., Feb. 17, 1984.
210 ● International Cooperation and Competition in Civilian Space Activities

Synthesis

A theme that runs through this discussion of

specific policy areas is that there is frequently a

tension between international competition and

cooperation as means to further the U.S. national

interest. Avoiding excessive conflict with other

countries through international mechanisms (cooperation) is an important value in itself. But so

is the furtherance of the legitimate objectives that

the United States has in support of its consumers

and producers. These objectives may often require the furtherance of competition, which, in

turn, may engender conflict. A broad judgment

about how the United States should most effectively make its way in the general world of cooperation and competition, then, is one of the

key factors in choosing among the various options presented for specific satellite communications policies and is an important link with the

Government’s broader international economic

policies.

APPENDIX 6A.–ADDITIONAL ANALYSIS OF THE SATELLITE

COMMUNICATIONS SERVICE INDUSTRY

Demand for International Satellite

Communications: Factors Influencing

Its Growth and Scenarios for the 1990s

Policy Issues and Demand

As the discussion in chapter 6 has demonstrated,

the future growth of satellite communications is a key

parameter that will affect virtually all important U.S.

international space and telecommunications policy issues during the remainder of this century. While the

impacts of high or low demand for satellite communications services are reasonably clear, our ability to

forecast what demand will be is limited. This is because satellite communications demand is not only

the result of overall economic activity and the price

of the satellite services, difficult in themselves to predict, but is also strongly affected by the availability and

the price of closely substitutable terrestrial communications modes. Most important of all, the demand for

satellite communications is tremendously affected by

the institutional and regulatory structures governing

both cables and satellites.

This section discusses in detail the factors influencing the demand for international satellite communications and shows how different scenarios for its

growth can be the result of different outcomes for

these factors.1

Demand for International

Telecommunications as a Whole

Historically, U.S. international telecommunications

has grown at an impressive rate. During the 1972-84

period, U.S. carriers’ international real revenues grew

at an annual average rate of approximately 13 percent

(see table 6-l). Growth between 1980 and 1983 was

temporarily slowed by recessionary conditions, but

even during this period, when other sectors of world

trade experienced declines, real U.S. international

telecommunications revenues grew at rates of about

8 percent per annum (except in 1982, when large cuts

in AT&T’s international telephone rates reduced revenues more than they stimulated demand).

Estimates of the future growth of international telecommunications are available from several sources.

For 1985, the Department of Commerce projects a

growth rate of 14 percent. U.S. telecommunications

carriers also expect rapid growth of international communications to continue. In November 1984 forecasts

prepared for a working group meeting in connection

with the North Atlantic Consultative Process, the U.S.

international service carriers (USISC)Z projected the

demand for U.S.-Europe common carrier communications (including new services) to increase at an average annual rate of 16.3 percent during the period

1985-95. They foresee demand for telecommunications capacity of 82,000 voice-equivalent circuits in

1995 (table 6A-1, last line).J

‘A similar treatment of the demand for U.S. domestic communications is

beyond the scope of this assessment, but it is treated in less detail in ch.

6 and app. 66, in connection with the NASA ACTS program and with satellite communications equipment issues.

Zln 1983, the major U.S. companies involved in the planning process were

AT&T, RCA, Western Union, GTE, MCI, and ITT and COMSAT.

jThis growth rate refers to the forecast of November 1984. Table 6A-1 also

presents 1983 forecasts (which forecasted a significantly higher growth rate

of 17.5 percent) by carrier and by major destination country. The U.S. carriers’ European counterparts did not expect as rapid growth in overall transatlantic telecommunications demand in 1983 as did the U.S. carriers, Both
Ch. 6—Satellite Communications ● 211

Table 6A-1 .—U.S..Europe Telecommunications

Forecasts, 1985”95a (equivalent voice quality circuits)

1985 1990 1995

Major traditional carriers:

United Kingdom:

AT&T . . . . . . . . . . . . . . . . . . . . . . . 5,689 12,158 24,782

ITT Worldcom . . . . . . . . . . . . . . . 289 501 775

MC1/WUl . . . . . . . . . . . . . . . . . . . . 299b484 743

Western Union . . . . . . . . . . . . . . . 15 143 631

RCA Globcom . . . . . . . . . . . . . . . — — 229 354 479—

Total above . . . . . . . . . . . . . . . . . . 6,521 13,640 27,410

Germany:

AT&T . . . . . . . . . . . . . . . . . . . . . . . 2,358 5,458 11,400

ITT Worldcom . . . . . . . . . . . . . . . 82 129 179

MC1/WUl . . . . . . . . . . . . . . . . . . . . 61 b 76 94

Western Union . . . . . . . . . . . . . . . 5 49 206

RCA Globcom . . . . . . . . . . . . . . . 67 — —92 117

.

Total above . . . . . . . . . . . . . . . . . . 2,573 5,804 11,996

France:

AT&T . . . . . . . . . . . . . . . . . . . . . . . 1,780 4,774 10,922

ITT Worldcom . . . . . . . . . . . . . . . 48 80 130

MC1/WUl . . . . . . . . . . . . . . . . . . . . 49b 66 85

Western Union . . . . . . . . . . . . . . . 4 34 154

RCA Globcom . . . . . . . . . . . . . . . 35 — —53 73—

Total above . . . . . . . . . . . . . . . . . . 1,916 5,007 11,364

Other CEPT countries. . . . . . . . . . . 6,157 b 13,481 30,670

New services n.e.c. . . . . . . . . . . . . . 8 3 4

b 

— — 1,76 6 4,326—

Total traditional major carriers . . . 18,001 39,698 85,766

Other U.S. carriers:

GTE Sprint . . . . . . . . . . . . . . . . . . 356 2,777 7,673

Minor carriers . . . . . . . . . . . . . . . . 1,143 — — 2,625 4,761—

Total CEPTcountriesd . . . . . . . . . . 19,50@ 45,100 98,200

AT&T share . . . . . . . . . . . . . . . . . . 83.5% 81.9Y0 82.4%

IRevised forecast Nov. 1984] . ....18,092 37,161 81,888

a“EUrOpe’’here jStheEUrOpean Confwmce for Post and Telecommunications

(CEPT) membercountries: Austria, Belgium, Cyprus, Denmark, Finland, France,

Germany, Greece, lreland, ltaly, Luxembourg, Netherlands, Norway, PortugaL

Spain, Sweden, Switzerland, Turkey, United Kingdom, and Yugoslavia.

bMCl estimates for 19w are included in the 1985 tOtalS.

cunit~ Brands (TRT Telecommunications subsidiary), McDonnell Douglas (FTC

Communications subsidiary) and GTE (Hawaiian Telephone Co. subsidiary), Estimates for total circuit demand, including estimates for these carriers, were

provided to the FCC by AT.ST and were constructed by adding up the estimates

of the major carriers (including GTE Sprint) and adding to them an estimate for

these carriers. The estimate given in this table for these carriers was calculated

by subtracting the individual carriers’ estimates from the AT&T overall industry

estimate.

dThe total estimate includes an unknown error due to differing assumptions on

market shares the carriers used in constructing the forecasts. For instance, FCC

anatysts believe that AT&T’s forecast for itself of 77.7 thousand circuits in 1995

is not based on an assumption that GTE Sprint would have anywhere near the

7,700 circuits that GTE Sprint forecasts for itself and that therefore the total

forecast is somewhat too high due to double counting,

SOURCE: Communications to the Federal Communications Commission in

August and September 1983 by the listed carriers, except the revised

forecast, which is from the Report of the North Atlantic Consultative

Working Group to the CEPT/USA/Teleglobe Canada Senior Level

Meeting, Jan. 8-11, 1985, p. 24.

— . . . . .

(footnote continued)

groups revised their forecasts in November 1984, and the revised forecasts

are relatively close. See table 6A-3 for the European carriers’ forecasts. Carrier forecasts are also incorporated in the INTELSAT Traffic Data Base; see

below note 11.

This rapid growth is expected in all sectors except

TV transmission by satellite. COMSAT’S 1983 forecast

projects total half-channel hours of occasional-use television to increase from 2,180 in 1985 to 2,240 in 1995,

and the number of 40-MHz transponders for fullperiod television to increase from three in 1985 to four

in 1995. In both cases, this is less than a 3 percent

annual growth rate.4

The U.S. international service carriers forecast that

“new services, ” including videoconferencing, facsimile, electronic mail, and computer traffic, while

growing rapidly from a small base, will account for

onlys percent of total demand by 1995 (table 6A-1 ).5

That new services will be a small fraction of total demand is in considerable dispute. A 1980 NASA study,

for instance, projects very large worldwide videoconferencing demand in the 1990s, Videoconferencing

alone is forecasted to constitute approximately onethird of total world telecommunications demand in

the year 2000.6 Several of the recent applicants for permission to construct transatlantic satellite and cable

facilities have also stated in their applications to the

Federal Communications Commission (FCC) that they

expect videoconferencing demand to be substantial

but have not given quantitative estimates of the

growth; RCA in its application, for instance, stated that

“teleconferencing should increase dramatically.”

The Supply of Capacity in International

Communications

Despite rapidly expanding demand, the discussion

of facilities planning at the FCC has been concerned

with excess capacity, rather than shortage.7 Some extThese numbers do not refer to vldeoconferencing, which is included In

new services.

5AT&T, the principal contributor to the USISC forecast, nevertheless, tntends to participate fully in any expanding market for videoconferencing that

materializes, It recently introduced a U.S.-U .K. videoconferencing tariff. It

has also signed an agreement with the French PTT to prowde transatlantic

videoconferencing for multinational firms, using a system of INTELSAT satellites for transatlantic transmission and Telecom 1 for European transmission (Safe//ite News, Oct. 15, 1984, p. 4). And it has now introduced a new

domestic C-band satellite videoconferencing service named Skynet Digital

Service (Ibid., Oct. 22, 1984, p. 8).

eFuture Systems, Inc., “Cross-Impact of Foreign Satellite Communications

on NASA’s 30/20 GHz Program,” NASA Lewis Research Center, August 1980,

FSI Report No. 251, It contains a detailed world satelllte communications

demand forecast, by type of service, pp. 24-85, Including extensive quantitative demand estimates (or videoconferencing, Since the authors give a detailed analysis only for satellite transmission, it required minor calculation

to 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 carried on

satellites in North America, Europe, and Japan (higher in other world regions.)

Future Systems, Inc., ibid., table 3-25, p. 60.

zFor instance, see Federal Communications Commission, ‘ ‘Notice of Proposed Rule Making, ” released Nov. 7, 1980, in CC Docket No. 79-184, “inquiry Into the Policies To Be Followed in the Authorization of Common Carrier Facilities To Meet North Atlantic Telecommunications Needs During the

1985-1995 Period, ”
—

212 ● International Cooperation and Competition in Civilian Space Activities

cess capacity is, of course, required to maintain service quality in the event of a facilities outage8 and to

guard against greater-than-expected demand on the

system. When capacity is added in large increments

every few years, such as in the TAT-8 and TRANSPAC3 transoceanic cables or in INTELSAT VI facilities, excess capacity in the early years is inevitable if shortages are to be avoided before the next capacity addition. But other reasons relating to the industry

structure of regulated industries, which we discuss below, may also be involved.

As part of the FCC’s formal facilities planning process, various facilities plans have been proposed’ by

communications carriers or groups of carriers to meet

projected transatlantic telecommunications demand.

Table 6A-2 lists the plans proposed in 1980 by the U.S.

international service carriers as a group (USISC), plus

COMSAT, as well as a reference plan the FCC constructed for analytical purposes to determine when capacity would equal demand. Some of the features of

these three plans are:

 They differ principally in when they schedule the

transatlantic cables.

—.————

8Restoration of service of different given qualities after a faci Iities outage

requires different types of backup facilities. The new competition developing on the North Atlantic among carriers who may desire different qualities

of restoration, the large size of the individual TAT-8 and INTELSAT VI facilities, and the new network management techniques that allow carriers to

make optimal use of facilities, has made the discussion more complex in

recent years. (U.S. International Service Carriers submission to the North Atlantic Consultative Working Group meeting, Jan. 31-Feb, 2, 1984, Pans,

France, p. 29.)

●

☛

●

They cover a range from 106,000 to 145,000 U. S.-

Europe circuits in 1995.

They do not include satellite or fiber optic cable

capacity supplied by private U.S. or foreign communications firms.

A single cable or large satellite, such as the TAT9 cable (included in the USISC plan but not in

the COMSAT or FCC plans), can by itself produce

a large excess supply of capacity.

The amount of transatlantic cable capacity is potentially even more uncertain than indicated in the plans.

Fiber optic technology is evolving rapidly and becoming more efficient in the sense that improved digital

multiplication techniques are increasing the number

of telephone circuits that can be carried on a given

cable. Furthermore, large additional cable capacity

can be provided in cables by straightforward design

changes (e.g., three working fiber pairs rather than

two). What is holding down the size of cables (particularly the USISC planned facilities) is not the limitations of the technology but the size of the demand

and the regulatory policy requiring a balance between

satellite and cable facilities. g

9A case in point is that TAT-8 was originally designed by AT&T to have

12,000 basic circuits. With an assumed 3-to-1 multiplication factor, the cable

was then rated as capable of carrying 36,000 simultaneous telephone conversations (or some lesser number of telephone, record, data, and video circuits, since the 3-to-1 multiplication factor does not apply to the latter types

of service). It is now expected to have a 5-to-1 multiplication factor. (U.S.

Carriers’ submission to the North Atlantic Consultative Working Group

meeting, Jan. 31 -Feb. 2, 1984, Paris, France, pp. 15-1 6.) To compensate for

the improved performance of the cable—a 5-to-1 multiplication would reTable 6A-2.–Representative Transatlantic Facilities Plans for U.S.-Europe Telecommunications, 1985-95

USISCa 1983 demand USISC Plan 1 COMSAT Plan 1 FCC reference plan

Year Forecast Type Capacity b Type Capacity b Type Capacity b

1985 , . . . . . . . . . . . . . 19.5 34.0 34.0 34.0

1986 . . . . . . . . . . . . . . 23.0 1-VI PP 45.9 1-VI PP 45.9 I-VI PP 43.6

1987 . . . . . . . . . . . . . . 27.1 1-VI 45.9 I-VI Spare 45.9 I-VI Spare 43.6

1988 . . . . . . . . . . . . . . 33.0 TAT-8 81.2 TAT-8 81.2 I-VI MP1 49.4

I-VI MP1 I-VI MP1

1989 . . . . . . . . . . . . . . 38.6 I-VI MP2 88.4 I-VI MP2 88.4 I-VI 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 1-VI PP 129.8 1-VI PP 102.6 1-VI PP 93.0

I-VI Spare I-VI Spare I-VI Spare

1994 . . . . . . . . . . . . . . 84.5 129.8 102.6 93.0

1995 . . . . . . . . . . . . . . 98.2 I-VII MP1 145,1 I-VII MP1 117.9 I-VII MP1 106.0C

KEY: Fiber optic cables–TAT-8 and TAT-9

Satellites–lNTELSAT VI Prtmary Path 1-VI PP

INTELSAT VI Primary Path Spare I-VI Spare

INTELSAT VI Major Path 1 l-VI MP1

INTELSAT VI Major Path 2 I-VI MP2

INTELSAT Vll Major Path 1 I-VII MP1

Satellite designs identical except for FCC satellites, which are lower capacity L designs. auslsc = U.S. International Service Carriers. The principal ones are listed in table 6A-1.

bThousands of voice grade circuits.

CThe FCC reference plan ellmlnat~ excess capacity in 1~ when compared with the then-current 104,516-circuit USISC 1W5 fOr9CaSt.

SOURCE: Demand forecast: 1963 forecast from table 6-Al. Facilities: Federal Communications Commission, “Notice of Proposed Rule Making,” released Nov. 7, 1960,

in CC Docket No. 79-164, “Inquiry into the Policies to be Followed in the Authorization of Common Carrier Facilities to Meet North Atlantic Telecommunications Needs During the 1985-1995 Period,” pp. 20-35.
Ch. 6—Satellite Communications ● 213

By early 1985, the FCC had received applications

to install satellite capacity of about 120,000 circuits

and fiber optic cable capacity of about 330,000 circuits for transatlantic communications, in addition to

the capacity additions listed in table 6A-2.1° These

large proposed capacity additions call into question

the FCC planning process, the demand projections of

the USISC carriers and their European counterparts

or both.

Satellite Communications’ Share

European communications carriers (CEPT) expect

that satellites will maintain their share of transatlantic

telecommunications at least through 1995, according

to projections submitted in connection with the North

Atlantic Consultative Process (table 6-A3) .11 In all

suit In a capacity of 60,000 circuits—the originally contemplated three-fiberp.mr cable was replaced by a two-fiber-pair cable (ibid., p. 12) with only 8,000

basic circuits, which would have a capacity of approximately 40,000 circuit~.

These data indicate that capacity estimates for the transatlantic cables may

be alterable by design changes, by Improved multiplication techniques, and

by Investment In m~ltiplication equipment embodying these techniques.

IOSee also the discussion of alternative satellite providers in ch. 6. The additional 330,000 circu}ts of cable capacity are in the cable projects of Cable

& Wireless and Its U.S. partners (TelOptic) (license granted) and Submarine

Llghtwave Cable Co. (license recommended by the FCC), of 80,000 and

250,000 circuits, respectively.

I I The USISC forecasts for circuit demand presented to the North Atlantic

Consultative Process (table 6A- I above) are not broken down by the shares

for satellites and cables. Data submitted to the !NTELSAT Traffic Data Base,

which Includes a U.S. submission based on data from U.S. carriers, however, IS roughly consistent with the CEPT forecast. For instance, satellites are

projected to have 1995 demand for 11,312 4khz-equivalent satellite circuits

between the United States and the United Kingdom. (INTELSAT, Contribution of the Director General BG-56-1OE W/9/83, Aug. 2, 1983.) Although not

strictly comparable this may be compared to the major USISC carriers’ U ,S.-

U.K. projection in table 6-3 of 27,410 clrcults to get a rough idea of the satellite share.

Table 6A.3.—Satellite Share of International

Communications Capacity CEPT

Master Plan Projectionsa

1986 199 0 1995

(circuits)

AT&T-CEPT . . . . . . . . . . . . . . . . . . . . 18,023 33,086 67,533

‘/0 satellite . . . . . . . . . . . . . . . . . . 52.2Y0 56.O?AO 54.7?40

Other USISC carriers-CEPT . . . . . . 2,338 3,465 5,241

‘/0 satellite . . . . . . . . . . . . . . . . . . 57.7’?/0 57.7%0 59.OYO

Total USA-CEPT. . ..............20,362 36,543 72,766

‘/0 satellite . . . . . . . . . . . . . . . . . . 52.80/o 56.1 0/0 55.00/0

AT8LT share of total demand . . . 88.50/o 90.50/0 92.80/o

[Revised forecast Nov. 1984] . ....20,829 38,329 83,64 0

a’(EUrOpe” is defined here as the European Conference for POSt and Telecommunications (CEPT).

bGircuit Projecting include “new services” and are broken down by ~ndividual

years, facilities and European countries in the source document.

SOURCE: Conference Europeen des Administrations des Poste et des Telecommunications (CEPT), ‘ICEPT Master Plan, Transatlantic Facilities Requirements, 1988-1995,” January 1984, except the revised forecast,

which is from the Report of the North Atlantic Consultative Working

Group to the CEPT/USAfleleglobe Canada Senior Level Meeting, Jan,

B-1 1, 1985, p. 24.

years, and for AT&T and other U.S. carriers independently, the CEPT forecast has the satellite share remaining at over 50 percent.

DEMAND FOR INTERNATIONAL SATELLITE

COMMUNICATIONS IN THE 1980s

The demand for international satellite communications can be expected to continue to grow rapidly in

the 1980s, because major capacity on the expected

competing transmission mode, fiber optic undersea

cables, will not be in place until 1988, when the TAT-8

cable is scheduled to be operational. Other cable

landing applications, which have been filed with the

FCC, are for cables to be constructed in the 1988-92

period, as well.

DEMAND FOR INTERNATIONAL SATELLITE

COMMUNICATIONS IN THE 1990s

Whether international satellite communications will

continue to grow as rapidly in the 1990s as international communications as a whole is highly uncertain,

however, and will depend on the following factors:

The price advantage/market preference, if any,

of fiber optic over satellite transmission for highvolume applications.

The strength of industry-structure and other incentives to the adoption of fiber optic technology.

The growth of undersea cable capacity and the

presence or absence of regulatory restrictions on

its use.

Discussion of Uncertainties in Factors

Affecting the Demand for Satellite

Communications

EXTENT OF PRICE ADVANTAGE OF OR

CONSUMER PREFERENCE FOR FIBER OPTIC

UNDERSEA CABLES

Any basic advantage that fiber optic cable technology will have over satellite technology for use in U.S.

long-distance international communications in the

1990s will probably depend more on technical features than on cost,12 because the difference in cost

I ZBy “cost,” we refer to the investment cost of the communications and

maintenance faci Iities and the cost of operating them, per unit of communications. Since the investment cost is the most important cost component,

cost estimates are sensitwe to the depreciation periods assumed for cables

and satellites and to the discount factor used in calculating present values.

An economic evaluation of cost will usually be different from an accounting

evaluation and both cost concepts should be distinguished from price. Both

average and marginal cost concepts are used in the discussion.
. 

214 International Cooperation and Competition in Civilian Space Activities

is not likely to be large for long-distance communications, such as transatlantic or transpacific communications. In any case, the prices charged users of the

alternative satellite and cable facilities may not bear

a close relation to cost.

Cost.–Not long ago it seemed that advanced satellites would have a large cost advantage over fiber

optic cables.13 Rapid advances in fiber optic technology have now convinced many experts that fiber op,-

tic cables will eventually be less costly than satellites

over substantial distances.14 At very long distances

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.15 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. Technological forecasting, difficult enough for all technologies, is especially difficult in telecommunications due

to the rapidity of fundamental change and the flow

of innovations. Nevertheless, in OTA’S judgment, fiber optic technology will probably experience greater

cost reduction than satellite technology. This judgment

is based on the premise that satellite technology is now

more mature than fiber optic technology and that considerable “learning economies” are still available for

the latter.16 Both technologies have further room for

fundamental innovation, and substantial R&D is being done in both. However, because light wave-guide

technology is farther below its theoretical information

capacity limit than microwave transmission from satellites, and because the latter is constrained by practical interference problems, fiber optics appear to have

I ~For instance, see Future Systems, Inc., “Transmission Cost Comparison

for Satellite, Fiber Optics, and Microwave Radio Communications,” FSI Report No. 107, Gaithersburg, MD, May 1980. Since facilities cost is most of

the cost of transmission, the cost concept referred to is long-run average cost.

IAlndustry sources surveyed by telephone in 1984 estimated that the breakeven distance will be in the 800 to 1,000mile range in the late 1980s. It is

expected to increase in the 199os.

I SAII current commercial satellite transmissions travel roughly 44,600 miles

roundtrip to the geostationary orbit and back, regardless of the terrestrial

distance between the sending and receiving points. The transmission cost

is thus the same regardless of distance (for one-hop transmissions). Conversely, since longer cables cost more to lay than shorter ones, cable transmission cost varies with distance. Two-hop satellite transmission is approximately

twice as costly as one-hop transmission, it should be noted, however.

1%w, e.g., J. Shubert, “Progress in Optical Communication Technology, ”

Telecommunications, july 1983, Global Edition, vol. 17, No. 7, p. 35-1. In

a 1984 press report, AT&T Bell Laboratories announced the development

of an improved fiber over which signals can be transmitted with 10 times

as much strength after 125 miles, without boosting, as any previous fiber,

a feature important for undersea cables (New York Times, 1984). NASA believes that zero-gravity, containerless manufacturing of very pure glass in

space may increase fiber optic efficiency. (Space Enterprise Today, September 1984, p. 5.)

Figure 6A-1 .—Cost of Satellite vs. Cable Transmission

(Addressable Communications): Conceptual Diagram

Current 1990s Distance

breakeven breakeven

distance distance

The horizontal lines for satellites indicate that average satellite

transmission cost per circuit-year does not vary by distance for current and future generation models and that future cost is lower than

current cost. The rising curved lines for fiber optic cables indicate

that average cost for both current and future generation technology

does vary with distance, but that the cost increase per mile declines

as distance increases.

NOTE: Diagram is constructed to illustrate the situation where breakeven

distance increases markedly for 1990’s technology.

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

competition between cables and satellites in longdistance international communications is also illustrated in the diagram. For the long distances typical

of transatlantic and transpacific communications and

of communications to and from South America, satellites and cables may not differ very much in transmission cost, even if satellites are less costly than cables.17 This is because, while the transmission cost for

cables will increase with distance, it will not increase

—

1 zBelow the breakeven distance, fiber optic cables are expected to have

a substantial cost advantage. Within the United States, therefore, it is Iikeiy

that carriers will use fiber optic cables for dense trunk routes. At a 1984 conference on satellites v. fiber optic cables, the president of iBM’s subsidiary,

Sateilite Business Systems, stated that even SBS plans to develop a fiber optic

network for high-traffic trunk routes to complement its current primarily satellite network, because [within the United States] “it is highly efficient for

point-to-point trunking” (“Fiber Optics, Satellite Technologies Confront Each

Other: Merging Expected, ” Sate//ite News, Nov. 19, 1984, p. 8).
Ch. 6—Satellite Communications “ 215

proportionally for longer cables.18 Thus, even at distances far above the breakeven point, satellites may

not have much of an advantage in transmission cost.

Considering that nontransmission costs do not differ

by mode, this advantage would be even less as a proportion of total message cost.

Price.–The implicit implication of many discussions

of the relative cost of cables and satellites is that

telecommunications service markets will react to cost

differentials in much the same way they would react

to price differentials. This is clearly not the case in international telecommunications. In some industries,

cost can be used as a proxy for price, because price

and cost are of similar magnitude in these industries.

In international telecommunications, however, there

can be very wide divergence between cost and price.

This is not to say that cost competition between satellites and cables is not an important long-run factor

i n determining the supply of various kinds of i nternational telecommunications facilities, since if cost differentials are large, they would affect carrier incentives to invest in various types of capacity. But in the

telecommunications service markets themselves, it is

prices that buyers pay, and to which they react, not

the costs of suppliers.

The significance of this is twofold: 1 ) even if costs

differ for satellites and cables, the prices could and

would probably be closely similar and 2) under conditions of overcapacity, international telecommunications prices could drop far below calculated full costs,

as carriers responded to market pressures,

Prices would be similar for telecommunications

services using the two transmission media (if markets

were unrestricted) because they deliver similar services, This would occur regardless of what the faciIities

cost to install when they were new or what new facilities would cost. If prices started to diverge, consumers

would move toward the cheaper medium, and sellers

of the expensive one would have to lower their prices

to stay competitive.

International telecommunications prices (similar for

both media) could also drop far below the full costs

of both satellites and cables. Telecommunications

service markets contrast with many other markets in

this regard because of one key factor; the telecommunications service industry (using either satellites or

cables) is highly capital intensive. Capital intensity

means that most costs are incurred when the facilities

are installed and that variable costs for labor, materials,

IsThese economies to scale are Illustrated (n hg. 6A-1 by the curvature of

the cable cost curve.

power, etc. are small relative to total cost. Because

of this, revenues from the sale of services are usually

used mainly to cover payments of principal and interest on debt incurred in acquiring the facilities, rather

than for meeting payrolls and paying suppliers.

If the market becomes highly price-competitive because of excess capacity, carriers may have to reduce

their prices markedly to sell anything at all. The paradoxical aspect of this is that even if overcapacity

should cause prices to drop to very low levels, individual carriers would not have an incentive to reduce

the capacity offered for sale and thereby counteract

the overcapacity. In fact, the prime motivation for

dropping prices would be to keep capacity in operation and earn as much cash flow as possible, for even

at very low prices, carriers would still generate cash

flow as long as they covered the low variable cash

costs of running the operation. If they tried to charge

higher prices to cover full costs, there would be few

or no sales, little or no revenue and thus little if any

cash flow from operations. For these twin reasons, the

existence of net revenue possibilities even at low

prices and the inability to sell much except at the competitive price, individual firms have a strong incentive

to keep the facilities in operation.

Even bankruptcy would not serve to inspire them

to remove the facilities from service. If a court gives

protection from creditors, the firm could continue to

use the net cash flow from operating the facilities to

make partial payments to creditors and for other uses.

If the assets had to be sold at realistic prices consistent with the reduced earning potential of the facilities,

the new owners would also have incentives to operate them. These would be the usual investment incentives of cash flow and profits. Thus, while very low

prices might constitute a severe financial problem for

carriers with high fixed obligations, their financial

problems would be unlikely to induce them to take

their capacity off the market.

Overcapacity does not last forever, however. It is

a so-called “short-run” phenomenon, in the sense that

in normal competitive markets, it would ultimately be

worked away as plans for new investment are reduced

and existing equipment depreciates. Yet in telecommunications, overcapacity, with low prices could persist for many years. The low prices that have persisted

for years in the markets for certain long-lived capital

items (and for the services rendered by them) —e.g.,

supertankers and widebody jets—are instructive on

this point.lg

19,4ithough this discussion concentrates on overcapacity, Shofiages Of International telecommun[catlons capacity could also occur and result (n pr[ces

considerably higher than costs.

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

In a situation of overcapacity, the gradual working

off of surplus capacity and the restoration of prices

that cover full costs, of course, assumes a relatively

normal investment market. Such a market exists in

U.S. domestic satellite communications. In a situation

of overcapacity, sources of financial capital become

less willing to invest in more capacity. An adjustment

process then takes place. Rapidly expanding demand

or rapid physical deterioration of the capacity speeds

this adjustment process. In the case of international

satellite communications, however, the investment

market is far from normal, Governmental, intergovernmental and regulated institutions—lNTELSAT and its

mostly PTT owners are currently the principal investors in international satellite facilities—may not respond to market signals as quickly as private firms

might,

Much of this analysis applies to carriers making decisions singly. If carriers should make coordinated decisions on prices (in many circumstances illegal under

the antitrust laws) or if governments should impose

capacity-use regulation on the industry, capacity could

be withdrawn from the market, and prices could be

higher. Even in this circumstance, however, if consumers responded to low prices by substantially increasing their purchases, prices designed to maximize

carrier net revenues would still probably be way below full cost.

One further aspect of capacity in international communications should be considered. Since all satellites

have on-board propulsion capabilities that allow them

to be moved occasionally from one world region to

another, the locations of particular satellites and,

therefore, of excess satellite capacity, will also respond

to market forces.21 At present, there is a regulationenforced separation between domestic and international facilities, but if private satellite firms from the

United States and other countries are allowed to enter international facilities markets, domestic and international capacity may ultimately become interchangeable, and world overcapacity (or shortage)

would affect both international and domestic prices.

ZOIt should not be concluded, however, that govern menbl entities operating in substantially competitive international markets will not make rational

commercial decisions. Evidence from the international airline industry in the

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

to changes in demand, they adjusted capacity similarly in individual North

Atlantic city-pair routes (Douglas L. Adkins, Martha J. LangeIan, and Joseph

M. Trojanowski, “IS Competition Workable in North Atlantic Airline Markets?” Civil Aeronautics Board, March 1982).

ZI Because of limited on-board propulsion fuel, changing orbital position

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 conditions of supply and demand, just as the prices of super tankers or wide-body

jets now are.

Technical Features. –Fiber optic cables appear to

have three technical advantages over satellite transponders that are moderately to highly important in

certain applications in international communications—

freedom from external and environmental sources of

interference, greater communication security, and relatively short signal delay. None of these advantages

is decisive in volume uses of international telecommunications, however.

For instance, despite the greater vulnerability to interference, error rates for satellite communications can

be designed to the same minimum technical specifications in most cases as fiber optic cable systems,

but the extra design features can be costly.

The greater signal delay in satellite transmission adds

to the total of all the delays in terrestrial switching and

in the facilities through which it must pass and, thus,

typically consumes between one-fourth and one-third

of a second. innovations in satellite transmission of

ordinary voice and videoconferencing are likely to

continue to improve the techniques that now reduce

the disadvantages of satellites that arise from signal

delay in those uses and in interactive data transmission as well.

In communication security, the absence of an electromagnetic field around a fiber optic cable means

that, to intercept the information, the cable itself has

to be tapped, an act that can be detected by sensitive

monitoring devices. In contrast, microwave radiation

that satellites use to transmit information is usually

easily accessible by the public and certainly by those

who would intercept it. Encryption possibilities, however, can give satellite microwave transmission substantial protection against all but the most sophisticated interception attempts. Once again, there may

bean extra cost penalty for various levels of security

for satellite v. fiber optic transmission.

Taken together, the disadvantages of satellite transmission result in a product that is currently perceived

by users to be somewhat technically inferior to the

product of cable in certain point-to-point applications,

particularly voice, certain computer applications, and

secure communications. If there should be carriers

who specialize in a single mode of transmission, as

several of the new firms applying for permission to

construct satellite or cable facilities are planning to do,

or if carriers using both modes should offer consumers

the opportunity to choose mode, the preferences of

the marketplace would govern. What seems a trivial

disadvantage to satellite proponents might loom large

in consumer choices. 22

ZISpeakers at the Fourth Annual Satellite Communications Conference,

Washington DC, Apr. 10-11, 1984, who were involved in satellite communications as producers or consultants uniformly stated that when the echo
Ch. 6—Satellite Communications ● 2 1 7

When there are domestic communications legs on

either side of the international leg, undersea cables

may sometimes have an advantage over satellites in

international transmission. Because of the total delay,

CCITT recommendations and consumer preferences

discourage the use of more than one satellite hop in

end-to-end service. Mixed satellite/cable transmission

is the means employed to keep the satellite segment

to one-hop, of course. In international communications, this may result in a preference for cable transmission in certain situations. If domestic transmission

by satellite has been decided on for the U.S. leg, for

instance, because a business user would like to bypass the local phone company, keeping the satellite

link to one-hop would induce such a user (or his carrier) to arrange cable transmission for the international

link. If the domestic link was cable, however, there

would be no parallel incentive to use a satellite for

the international link.

International satellite transmission currently has two

important advantages over cable transmission—broadband capability and certain networking advantages.

Broadband capability refers to the ability to send large

amounts of related information simultaneously and is

important i n television and certain data applications.

Large capacity coaxial copper cables, terrestrial microwave, and fiber optic cables all have this capability,

as do satellite transponders, but for the broadband

communication to take place, the capability must be

in place end to end, This is straightforward for most

all-satellite systems, but for terrestrial networks, all legs

and switching facilities must have broadband capability. Currently, it is often necessary to have a satellite link in order to have broadband communication

at all. As international and domestic fiber optic networks become widespread in the 1990s, this advantage of satellites will diminish and will probably not

continue to be quantitatively very important.

Satellites have a more enduring advantage in certain networking applications. For instance, point-tomulti point transmissions are trivially simple using a satellite. The single transmission can simply be picked

up by even thousands of individual satellite Earth stations. To do the same thing in cable networks would

require vast amounts of switching, something which

would not usually be done terrestrially if the number

of destinations were at all large. In general, whenever

the alternative terrestrial network becomes cumbersome or expensive or lacking in certain capabilities,

satellites can be employed to bypass the difficulties

and transmit directly from one Earth station to another.

These special networking capabilities of satellites

will ensure a market for communication satellites.

Only if nationwide and worldwide fiber optic networks should have large excess capacity in the future

would they be used for the point-to-multipoint (or

multipoint-to-multipoint) communications that satellites have a cost natural advantage in. Nevertheless,

this advantage is important in only a small proportion

of the international communications volume sent by

satellites at present. It is likely to grow rapidly if international videoconferencing does, but will become a

large fraction of international satellite communications

only if satellites lose out to fiber optic cables in the

telephone, record, and data uses that now constitute

the major uses of international satellite transmission.

Industry-Structure Incentives to

Adoption of Fiber Optic Technology

The second important uncertainty affecting the demand for international satellite communications in the

1990s is whether the structure of the communications

industry will continue to provide incentives to invest

in and use cable technology that are independent of

the cost and technical features of fiber optic cables.

Three such incentives have been suggested in analyses of telecommunications industry structure .23

First, U.S. regulated international telecommunications carriers are said to have a bias in favor of investment in undersea cables that they own and which

therefore constitute part of their rate base, in preference to the alternative of leasing INTELSAT/COMSAT

satellite transponders, which are not in their rate

bases. This incentive (to buy cable capacity rather than

lease capacity on satellites) allegedly operated in the

past even when transatlantic transmission by satellite

had a substantial underlying cost advantage over coaxial copper cable. It and other reasons have been cited

to explain why the FCC ordered the balanced use of

satellite and cable capacity in transatlantic service.

The putative industry bias toward investment in

cables, which has existed during the period when

cable technology had a cost disadvantage, would undoubtedly reinforce any desire of the carriers to use

cable technology for other reasons. It might be mitigated if the carriers should come to own satellite facilities. RCA, for instance, has proposed to use a satellite for transatlantic communications that it had

equipment was tuned properly, the delay problem for one-hop satellite transmission was trlvlal, On the other hand, representatives of a large bank and

a large developer stated that there is currently a prejudice among consumers

against satelllte transmission on the basis of quality.

~>~ee, e,g,, Bruce M, C)wen and Ronald Braeutigam, The Regulation Game

(Cambridge, MA Balltnger, 1978), ch. 2-’’Regulatton of Oligopoly: international Communication;” and Michael E. Klnsley, Outer Space and /nner Sanctums: Government, Bus/ness and Sate///fe Communication (New York: Wiley,

1976).
— —. . . .

218 ● International Cooperation and Competition in Civilian Space Activities

originally proposed solely for domestic use. It would,

of course, be able to include this satellite in its rate

base.24

It should be noted that the preference for facilities

that can be put in the rate base is a long-run decision

factor in the purchase of facilities, with the comparison

being between installing new cable capacity in preference to an alternate program of leasing satellite capacity during the life of the cable. Besides this longrun factor, there is also a powerful short-run incentive for U.S. international service carriers to use cables.

Once a cable and associated maintenance capability

is owned but not fully utilized, the variable cost of

using it approaches zero and is, of course, much smaller than COMSAT’S circuit lease price.25 This powerful incentive to use owned cable facilities up to their

capacity before leasing more expensiv e

INTELSAT/COMSAT satellite capacity operates

strongly during the early life of a new cable facility

before it approaches capacity use. if carriers owned

under-utilized satellites as well as cable facilities, this

incentive would also cease to operate.

Finally, some carriers, such as AT&T, KDD, and

Cable & Wireless, are also producers and servicers of

cables; they may favor using what they themselves

manufacture and maintain. Carriers manufacturing satellites, such as RCA, might find a similar reason to favor satellites.

Some of the major European PTTs are also said to

favor using cable facilities over satellites for much the

same reasons as U.S. carriers.26 The incentive to use

unused cable capacity before INTELSAT probably also

applies to them as well as to the U.S. private carriers,

but because of the different regulatory structure, the

impact is less powerful. In the first place, they pay the

lower INTELSAT utilization charge rather the higher

tariff of an intermediary such as COMSAT. Secondly,

as signatories, they make investment payments and

zqln fact the incentive could stl ift i n favor of owning satellites if SiItdl k

capacity were relatively inexpensive due to glut conditions, such as now may

be occurring in U.S. domestic communications. A 1984 survey by the FCC

found that there only 143 out of 312 transponders were In use on 14 satellites on a weekday afternoon. (“Satellites Outpace Customers, ” New York

Times, Apr. 10, 1984, First Business Page.)

Z~The Variable transmission cost of using the cables they own is primarily

the cost of the electrical current and of the cable repairs, and this is relatively small compared to the fixed cost of building the cable, providing it with

auxiliary communications equipment, and providing maintenance vessels

and facilities. In the case of underutilized INTELSAT satellite facilities, however, the variable cost to AT&T, for instance, is still the COMSAT tariff. This

tariff Includes a capital recovery factor and is thus considerably higher than

the small variable satellite transmission cost. COMSAT’S prices for satellite

circuits may also have been higher than they need be, due to a higher than

normal rate of return and the existence of substanital I NTELSAT excess capacity which the FCC allows COMSAT to earn a rate of return on.

ZbBruce M. Owen and Ronald Braeutigam, op. Cit., p. 61.

receive returns on that investment that vary with their

usage of the INTELSAT system. Nevertheless, the

variable cost to most PTTs of increased INTELSAT use

is probably greater than the variable cost of cable

use.

27 They would not have the same incentive to

create excess cable capacity as U.S. carriers, however,

unless they were also subject to regulation simiIar to

U.S. return-on-rate-base regulation.28

CABLE CAPACITY GROWTH

The third key uncertainty that will affect the demand

for satellite communications in the 1990s is the growth

of usable undersea cable capacity vis-a-vis the demand

for telecommunications service.

Transoceanic cables often require lengthy periods

between conception and installation for planning, regulatory action, and construction. The official planning

process for a transpacific fiber optic cable, for instance, was only just beginning in 1984 (following extensive planning work by individual carriers), and it

is possible that the TRANSPAC-3 cable will be delayed

beyond its proposed year-end 1988 service date.29

Considering the TAT-8 transatlantic cable and the

other proposed transatlantic cables, 5 years or more

could be regarded as the norm.

If telecommunications demand should outstrip the

cable capacity available in a geographical sector for

any reason, satellites, if available, could and would

be repositioned to serve it. More rapid growth in demand than expected, or regulatory restrictions on

cable installation, could be important reasons why

total telecommunications demand might outstrip

cable capacity.

If, on the other hand, there should be excess cable

capacity (the more likely case in the Atlantic region),

the question remains as to whether it would be used

in preference to satellite capacity. It would appear,

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 imposed by regulation) rather than facilities owned by

other entities (which happen to be satellites). By 1985

-’zFor p~s subject t. significant transit charges, however, cable variable

costs may be significant, and their incentive to use cables would be less or

nonexistent.

Zalt should be noted that a PTT’s bias In favor of using fiber Optic cables

for communication trunks does not necessarily mean that they can handle

large volume and/or broadband communications in their local cable networks, Until appropriate switching and broadband transmission facilities have

been installed at the local exchange level, premises-to-premises satellite transmission may be the only practical way to handle business communications

that that require these facilities. 29AccOrding t. a AT&T press release, Jan. 23, 1985, Hawaii 4/TRANSpAC3 will have two working fiber pairs, will run 7,200 nautical miles across the

Pacific, will have approximately 250 undersea generators, and would be able

to transmit 37,4oO simultaneous telephone conversations,
Ch. 6—Satellite Communications ● 219

the FCC had granted or recommended cable landing

licenses for fiber optic capacity of approximately

370,000 voice circuits to be installed in 1988 or 1989,

compared to the 1990 USISC forecast (above, table

6A-1 of 45,000 equivalent voice circuits. 30

Hence, unless regulation or other nonmarket forces

impell carriers to use satellites in a situation of plentiful carrier-owned cable facilities or unless carriers

come to own satellites, they would be likely to use

available cable facilities in preference to satellites,

even if, to a certain extent, satellites were less expensive.

Scenarios for Growth of Satellite

Communications Demand in the 1990s

Depending on what assumptions are used for the

uncertain factors that we have just discussed, projections of the demand for international satellite communications would vary. Since all of the factors are highly

uncertain, the discussion is organized into three credible scenarios that use different assumptions that result in rapidly growing demand, slow growing demand

and plateauing demand, respectively.

SCENARIO 1: RAPID GROWTH OF SATELLITE

COMMUNICATIONS IN THE 1990s

The North Atlantic communications carriers, both

the U.S. international service carriers and the European CEPT carriers, expect Scenario l–continued rapid growth of satellite communications—at least through

1995, as indicated by the projections provided for the

North Atlantic Consultative Process. These projections

were discussed above in this appendix and are presented in tables 6A-1 and 6A-3.31

Implicit in the carriers’ facilities demand forecast for

the North Atlantic are assumptions about a number

of factors that would lead to rapid growth in satellite

communications in the 1990s. This could result from

fiber optic cables having little or no cost/price advantage or consumer preference, from the absence of

special carrier incentives to use cable transmission,

or from limited actual cable capacity in place or in use.

—_.-———

JOThlS estimate includes 40,000 for the approved TAT-8 cable, and ~0,000

and 250,000, respectively, for the proposed Cable & Wireless (TelOptlc) and

Submarine Llghtwave Cable Co. cables, making a total of 370,000 volceequlvalent clrcults. These estimates must be regarded as order of magnitude

only, since estimates of multiplication factors for voice conversations are likely

to change considerably.

II Data submitted to the JNTELSAT Traffic Data Base ref}ectl ng the protections of the U.S. International service carriers tends to reinforce this expectation of rapidly growing transatlantic satelllte communications demand

through 1997. (I NTELSAT Contnbution of the Director General, BG-56-1OE

W/9/83, Aug 2, 1983.) See note 11.

SCENARIOS II AND Ill: MODERATE OR ZERO

GROWTH OF INTERNATIONAL SATELLITE

COMMUNICATIONS IN THE 1990s

Four elements, none of them improbable, could

cause a slowdown in satellite communications growth

as a result of the substitution of fiber optic cable for

satellite transmission. First, various decision makers

could perceive fiber optic technology to be superior

for reasons of its technical features or cost/price advantage. Second, the price (or other advantage) would

be available to them in such a way that they would

actually have the incentive to use cable transmission.

Thirdly, actual cable capacity would be great enough

to service most of the growth in total telecommunications demand. And last, but not least, there would

be a noninhibiting U.S. and international regulatory

framework that would allow greater relative cable use.

Scenario II Slow Growth.–Even if consumers or

carriers came to prefer fiber optic cables for transatlantic and other long-distance international communications in the late 1980s, their preference might not be

particularly intense. They therefore might not make

the switch very rapidly. Whether or not their preference is intense, regulatory barriers in any case could

delay the adoption of cable transmission. For all of

these reasons, satellite usage in high-volume trunking

applications might continue to grow, if only moderately, through the end of the century.

Scenario Ill: No-Growth Plateau.–In this scenario,

cable transmission would be adopted relatively quickly because of strong carrier or consumer preference,

or for other reasons, and would be used for most highvolume point-to-point international communications.

Cable capacity for this expansion would be in place

by the early 1990s in the form of the TAT-8, TAT-9,

and TRANSPAC-3 cables to be constructed and owned

by cable consortia and/or those proposed by individual firms. Satellites would still perform an essential role

in long-haul international communications, however,

particularly on low-volume routes to smaller or less

developed countries and to remote areas. Satellites

could also fill in where cables had not been constructed or could not handle broadband communications because of networking problems. Essentially,

satellite transmission in this scenario would serve as

the backup technology for cable transmission.

Satellites would also continue to be used where they

have a competitive edge over cables in technical features or cost: to service the growing expected

demands for point-to-m ultipoint or multi point-to-m ul-
220 ● international Cooperation and Competition in Civilian Space Activities

tipoint communications, for certain mobile communications, and for broadband communications where

local broadband fiber optic or microwave distribution

capacity was not in place. This scenario posits a leveling off of satellite communications in the 1990s,

rather than a decrease. The latter would result if these

specialized uses did not grow sufficiently to offset the

relinquishment of high-volume, long-haul traffic to —

cabl e

32

The Regulatory Regime

International Satellite

Communications33

in

The Traditional Regulatory Regime

in U.S. International Telecommunications

Ten years ago, both the domestic and international

segments of the U.S. telecommunications industry

were tightly controlled by government regulation.

Consumers of international telecommunications services were not allowed to choose among carriers on

the basis of price and service offerings. 34 The carriers

of the countries between which the communications

moved were almost always organized into a monopoly or close-to-a-monopoly structure and thus did not

have to respond closely to consumer needs.

On the U.S. side, as a rule, each country-pair market was segmented into a number of nearly air-tight

compartments. There was a telephone (“voice”) monopolist (usually AT&T). Terrestrial and satellite record (telegraph/telex) communications for the most part

had to pass through a small, regulated cartel of U.S.

“international record carriers, ” principally ITT, RCA,

and WUI,35 prior to being interconnected with West-

—. . .——.—— 3Zlf the component of International telecommunications where satell ites

have a technical or cost advantage is one-fourth of the total and is growing

at the same rate as transatlantic telecommunications as a whole (1 6.2 percent per annum in the USISC forecast for the North Atlantic), it alone would

equal the total current international telecommunications volume in 9 years

Jlwe use the term “international regulatory regime” (Or “international communications regtme”) broadly to include all governmental and intergovernmental actions affecting the operations of the international communications

carriers, These include treaties and other formal and informal intergovernmental agreements in the area of telecommunications, other elements of international law affecting telecommunications, the actions of international organizations such as the ITU or INTELSAT, and the actions of national

governments that affect the International telecommunications industry.

JgThe uniqueness of international communications a[rangernents is not always appreciated. “Single-vendor serwce” is now the norm In U.S. domestic long-distance communications and always has been in virtually all other

markets in the U.S. economy, and even in most other international service

markets. U.S. basic telecommunications providers (and those of other countries), however, are not free to offer single-vendor service in most international markets (i ,e., to offer end-to-end communications service over their

own owned or leased networks).

J~Western Union International, Inc., was separated from Western Union

Telegraph Co., the former domestic record monopoly, in a divestiture that

took place in 1963. (General Accounting Office, FCC Needs to Monitor a

Changing International Telecommunications Market, RCED-83-92, Mar. 14,

1983, p. 22.) In 1982 WUI was acquired by MCI Corp. as a wholly owned

subsidiary.

ern Union, the de facto monopoly domestic

telex/telegraph company .36 On the foreign side, the

operator of both voice and record facilities was usually a single government post, telephone, and telegraph firm or ministry (PTT). Usually, the PTT controlled virtually all civilian telecommunications—voice

and record, satellite and terrestrial, international and

domestic.

In cable transmission, the cartel arrangements were

cemented further by joint ownership of oceanic cables. For private, regulated U.S. carriers, ownership

in cables is counted among the assets of their rate

bases. The size of a carrier’s rate base, in turn, along

with the allowed rate of return, determines the maximum allowable profit in regulated activities.

The situation has been somewhat different in satellite communications, principally because there are intermediaries (INTELSAT and COMSAT) whose tariffs

must be paid. All U.S. intercontinental satellite communications are currently routed through COMSAT

and INTELSAT. U.S. international service carriers pay

COMSAT’S tariff, and COMSAT, in turn, pays INTELSAT

ciruit charges.37 This differs from the cable situation

in that once the cable is in place, only minor payments

are made by the owner-users for cable use and maintenance, and usage sensitive costs are practically nil.38

In the satellite situation, carriers have to pay the

COMSAT or INTELSAT charges in proportion to their

use of INTELSAT capacity .39 In the case of U.S. international carriers, the charges for leasing COMSAT circuits are current costs and can, of course, be recovered from their customers, but the satellite charges are

not capitalizable and therefore do not enter the carriers’ rate bases.40

- ...——— Jblf a customer was sited at one of the five “gateway cities” Or M Several

other domestic “points of operation, ” he or she was able to deal directly

with one of the international record carriers without having to go through

Western Union (General Accounting Office, FCC Needs to Monitora Changing International Telecommunications Market, GAO/RCED-83-92, Mar. 14,

1983, p. 22). Western Union’s monopoly status was never formally conferred

by the FCC. How it used the regulatory process to preserve this status is a

complex question (see Bruce M. Owen and Ronald Braeutigam, The Regulation Game (Cambridge, MA: Ballinger, 1978), ch. 1.

JTCOMSAT is Pafl owner of INTELSAT, and receives offsetting return on

its investment. Foreign international carriers from countries that do not belong

to INTELSAT are able to use the system by paying the circuit charge.

JJThese should be disrirlguished from payments at the ‘‘aCCOUntl ng rate’

which are calculated on the volume of telecommunications regardless of the

transmission medium used. The country-pair partner that originates the greater volume of traffic compensates the other partner for its greater use, at the

agreed-on accounting rate.

J’JThe foreign pTTS and CC) MSAT, of course, collectively determine the

INTELSAT unit charge through their weighted votes on the Board of Governors of INTELSAT. Table 6-5 and app. C give the voting weights of INTELSAT

signatories.

~A number of U.S. international service carriers do have part ownership

in the INTELSAT Earth stations (prior to recent changes COMSAT owned the

other half) and can add the value of these facilities into their rate base. 1984

ownership shares were as follows: contiguous United States: COMSAT 50

percent, AT&T 35.5 percent, RCA 10.5 percent, MCI (WUI subsidiary) 4.0

percent; Hawaii: Comsat 50 percent, GTE (Hawaiian subsidiary) 30 percent,

RCA 11 percent, llT 6 percent, MCI(WUI) 3 percent; Guam: COMSAT 50

percent, RCA 48.9 percent, MCI(WUI) 1.1 percent (Sate//ite News, Dec 10

and 24, 1984).
Ch. 6—Satellite Communications 221

Under the traditional regulatory regime, U.S. international carriers and satellite intermediaries were usually not allowed to penetrate very far into each other’s

markets. With only minor exceptions, the entry of new

firms was also not allowed. Even when new firms were

allowed in the United States, most foreign countries

continued as they had in the past to allow only the

traditional U.S. international service carriers (in voice

only AT&T) to connect to their networks. For the international record carriers and COMSAT, U.S. international communications prices were regulated by the

Federal Communications Commission under loose

“rate of return on rate base” procedures.41 For AT&T,

no international rate base was separated; the firm retained greater discretion over international rates and

could engage in price discrimination to the disadvantage of consumers of international communications.

Investment by the carriers in new facilities was also

restricted—only cable or satellite facilities approved

by the FCC and foreign governments were allowed.

Investment by consumers was also restricted; only certain types of equipment, usually owned, manufactured, or supplied by carriers could be connected to

their networks. Both of these restrictions constituted

a severe barrier to international (and domestic) trade

in telecommunications equipment and services and

may have inhibited the full development of communications technology.

The Deregulated U.S. Industry:

A New Element

Since the breakup of AT&Tat the beginning of 1984,

a new more competitive U.S. telecommunications

service industry has clearly emerged, with some of the

largest U.S. corporation entering into what had been

regulation-protected preserves. The formerly distinct

industry compartments-voice and record, satellite

and terrestrial, basic and enhanced, and domestic and

international—have all been breached by large firms

and smaller entrants, and each is now a competitive

arena.

This vigorous new U.S. industry is also placing immense pressure on the international regulatory regime.

Institutional and regulatory barriers to competition

have allowed firms to earn high profits in international

communications. Lured by these profits, many large

firms in U.S. domestic telecommunications are seeking to expand their international activities (e.g., MCI,

Western Union, and GTE). The list of potential new

entrants into international satellite communications is

large and growing (see table 6-4 for a partial listing

of U.S. international communications firms).

Even though considerable domestic telecommunications deregulation has occurred in the United

States, the old regulatory structures affecting U.S. international/ communications remain largely in place.

While the FCC has relaxed the distinctions between

international and domestic, satellite and cable, and

voice and record carriers, this as yet has had little impact on which firms carry the bulk of each type of traffic and on how they do business internationally. AT&T

Communications still carries almost all U.S. international telephone communications; the former international record carriers still handle most of the record traffic; INTELSAT and COMSAT still have a virtual

monopoly on U.S. intercontinental space-segment

communications; and the FCC still oversees a process in which approved carrier consortia plan facilities

years ahead.

Competition in Foreign

Telecommunications Service Markets

In “basic” telecommunications services, 42 international competition in foreign markets is practically

nonexistent. While a few countries, notably the United

Kingdom, Japan, and Canada, are moving toward privatization and limited domestic competition, most

countries outside of the United States do not allow

competition even in domestic long-distance telecommunications. A telecommunications monopoly, owned

by the government (or, alternatively, in some cases

a private monopoly regulated by the government) is

the prevailing mode of industry organization around

the world. Competition from foreign (including U.S.

firms) is not yet envisaged even in countries allowing

limited domestic competition .43 Foreign carriers must

transfer control of communications passing into (or

through the country) to the PTT at the international

border or to an intermediate cable or satellite consortium that subsequently passes control to the PTT.

For regulation to have practical effect, a boundary

has to be drawn somewhere between the regulated

basic communications industry and the unregulated

data processing industry, since they now merge into

each other. [n contrast to the present situation in the

United States, in most countries, the telecommunications administrations still attempt to draw this boundary so as to keep computer-enhanced communications services, such as “packet switching, ” which

.—41 General ACCCNJ ntlng Off Ice, FCC Needs to Men/for a Changing /nfernat/ona/ Te/ecommun/cations Market, RCED-83-92, Mar. 14, 1983.

qzl,e,, Ordinay 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.

dJExcept that Japan’s new domestic telecommunications law seems to Wrmlt U.S. firms to operate some types of value-added networks within Japan.
222 ● International Cooperation and Competition in Civilian Space Activities

increase the efficiency of communications in private

networks, on the PTT monopoly side of the boundary. 44 In only a few countries are private firms, including U.S. corporations, allowed to compete freely

in providing computer-enhanced communications

service.

Further in the direction of information services are

the value added networks (VANS). These are networks

of computers that interact with each other in “real

time, ” that is, with little delay. For instance, users at

keyboards in New York and other cities may wish simultaneously to query an industry data base in Philadelphia and use some of its software. The VAN operator buys communications capacity in bulk and uses

its computers to make this communications network

most efficient. In the United States these services have

been fully deregulated since 1980.45 The situation

abroad is variable; in many countries, the PTTs still

do not allow private firms to construct VANS, and the

only VAN services available are those provided by the

PTTs. In countries, such as Canada, United Kingdom,

and Japan, that are experiencing a measure of domestic liberalization, competition is now allowed in the

provision of VANS.

Control of international communications sent between adjacent countries–usually by land cable,

undersea cable or terrestrial microwave—passes

bilaterally at the border from one country’s carrier to

the carrier of the other country. In certain cases, however, governments and carriers have devised

multilateral mechanisms of joint ownership for international satellites and transoceanic cables.4G

As in the provision of basic international telecommunications services, competition between firms in

the provision of international transmission facilities

(with or without joint-venture affiliation) is also almost

universally not allowed. The closest thing to competition in international facilities in the current regulatory

regime is the competition between INTELSAT and the

various transatlantic cable consortia. Even this competition is largely managed by overlapping PTT representation in INTELSAT and the cable consortia, by

U.S. regulatory policies encouraging the “balanced”

use of both kinds of facilities, and by facilities planning processes overseen by the FCC and other regulatory authorities.

4Apacket switching uses computer processing to group communications

into packets going to common destinations.

45FCC, “In the Matter of Amendment of Section 64.702 of the Commission’s Rules and Regulations [Second Computer Inquiry],” FCC-80-1 89, final

decisions, released May 1980.

Absee ch, 6 for descriptions of the INTELSAT, I NMARSAT, and the transatlantic cable consortium.

Although in recent years the Commission has tried

to back away from explicit satellite/cable use rules on

the grounds that competition between the transmission modes should be allowed so that consumers

would benefit, its 1982 “Authorized User” decision

stated that the FCC would “continue to monitor the

carriers’ use of facilities to insure [that] both cable and

satellite facilities are reasonably used 47 Using monthly circuit status reports, the FCC notes that “the existing policy has produced a satellite-cable facility usage

ratio in the North Atlantic region of approximately 50-

50 (specifically 48 percent cable, 52 percent satellite).

4 8

The FCC is currently considering what transatlantic

circuit distribution policy to follow in the 1985-95

period, since the current negotiated plan expires in

1985. 49 It is considering as alternatives: 1) continued

use of “balanced loading, 50 2) other distribution

schemes, and 3) no FCC prescription of circuit distribution. The Commission recently tentatively concluded that transatlantic balanced use restrictions will

still be necessary in the 1986-91 period. 51 Although

no hint to the effect is given in the relevant FCC documents,52 these distribution alternatives must be considered in the context of the large transatlantic capacity in the proposed new private satellite and fiber optic

cable systems that may come to exist alongside the

facilities of the cable consortia and INTELSAT. It must

also take into account the growing private transborder

regional system in the Americas.

The option of having no FCC circuit distribution prescription would not necessarily mean a significant

change in the regulatory regime, however. The FCC

could continue to approve the coordinated planning

of new facilities within the North Atlantic Consultative

Process by groups of U.S. and foreign carriers, who,

as part of the process, would be likely to negotiate

circuit loading rules. As long as facilities construction

is regulated and individually owned facilities are not

allowed, some formal or informal circuit loading rules

are likely to be followed in any case. What is not clear,

however, is how any but the most stringent circuit distribution requirements can protect the revenues of

COMSAT/lNTELSAT, if large alternative satellite and

cable capacity comes into existence.

— — qpGeneral Accounting OfflCe, Op. Cit., p. 43.

48NOI, op. cit., p. 9.

AgThe u ,S. international carriers have also stated that they would I ike to

see a reevaluation of the circuit loading policy (“Contribution of the U.S.

Delegation to the North Atlantic Consultative Working Group, Paris, France,

Jan. 31-Feb. 2, 1984, unpublished, p. 41).

sOBalanced loading is defined in note 46, P. 161.

J] FCC, ‘ ‘Second Notice of Proposed Rulemaking I n the Matter of . . Authorization of Common Carrier Facilities to Meet North Atlantic Telecommunications Needs During the 1985-1995 Period, ” FCC 85-176, released Apr.

22, 1985.

Jllbid,, and NOI, O P. cit.
Ch. 6—Satellite Communications ● 223

Pricing

The pricing of international telecommunications to

consumers is in most cases determined solely by the

carrier and/or regulatory authority of the originating

country. Rates for calls originating in (or collect to)

a country can therefore differ tremendously from rates

of calls going the other way, frequently by a factor of

more than 2. In most cases, U.S. rates are significantly

lower than the rates of other countries (even with the

strong dollar), but nevertheless, as a recent executive

branch white paper states, “International service, in

short, costs between two and three times comparable U.S. domestic service. 53

In virtually all countries, international telecommunications profits cross-subsidize various unrelated

activities. The surplus from international operations

is transferred by administrative or regulatory action

to such other activities as local or domestic long-distance phone service (e.g., the United States), the

postal service (Germany), or even bus service (Switzerland). At stake in current telecommunications regulation, therefore, are the interests of the subsidy recipients as well as the carriers and buyers of

international telecommunications services,

Deregulatory Moves in

International Telecommunications

To date most of the actions taken to liberalize international telecommunications have been in the

United States, although some moves in this direction

have taken place in Canada54 and the United Kingdom.

55 Even though domestic deregulatory actions

have not been taken to any great extent in most other

industrial countries, all are wrestling with the need to

erect a practical perimeter around the regulated or

state-owned sector that can effectively differentiate it

from the growing array of computer-enhanced communications applications outside the perimeter without stunting their development. 56

—

53DepaflmentS of State and Commerce, “A White Paper on New international Satellite Systems, ” op. cit., p. 42.

Msee Joseph S. Schmidt and Ruth M. Corbin, “Telecommunications in Canada: The Regulatory Crisis, ” Telecommumcations Policy, vol. 7, September

1983, pp. 215-227.

‘sSee Andrew C, Brown, “For Sale: P}eces of the Public Sector, ” Fortune,

vol. 108, Oct. 31, 1983, pp. 78-84, for a discussion of the privatization of

Bntlsh Telecom. Also “Evaluating Telecom’s Outlook, ” New York Times,

p. D1. Actual sale of 50.8 percent of the stock to the public took place on

Nov. 28, 1984. A second domestic interexchange carrier has also emerged:

Cable & Wireless’ wholly owned subsidiary, Mercury Communlcatlons. See

also Eli M. Noam, “Telecommunications Pollcy on the Two Sides of the Atlantlc: Divergence and Outlook, ” op. cit.

%ee Marcellus S. Snow, “Telecommunications Deregulation In the Federal Republic of Germany,” Co/umbia Journa/ of Wor/d Business, vol. 18,

No. 1, spring 1983; and Dan Schiller, “The Storming of the PTTs,” Datamat~on, May 1983, pp. 155-158.

The deregulatory moves the United States has taken

in international telecommunications can be explained

mostly as the straightforward result of domestic deregulatory actions that have, insofar as possible,

removed the regulatory distinctions between firms. For

instance, the dropping of the distinction among voice

and record carriers could not easily be maintained by

the FCC in international communications after it had

abandoned it in domestic communications. As a practical matter, it would also be difficult for the FCC to

discriminate in international communications among

the major U.S. corporations that are now the vigorous new competitions in domestic markets. In theory

at least, discrimination is now left to foreign governments beyond the control of the FCC and to the market. 57

COMSAT’S special status as the monopoly wholesaler of INTELSAT services is an exception to this. By

law and regulatory action, COMSAT has the special

status of a carrier’s carrier with monopoly access to

INTELSAT space segment facilities. The FCC would

like to control and dilute this special status, however,

and see COMSAT evolve primarily into a general communications carrier.58 The FCC’s 1982 decision to

allow COMSAT to sell to consumers directly was to

be a step in this direction, but it was suspended until

198s by court decision and may continue to accrue

court challenges.53 In 1984, the FCC first allowed communications firms to own limited-use INTELSAT Earth

stations. Traditional INTELSAT Earth stations have

been owned 50 percent by COMSAT and 50 percent

by the international carriers using them. The FCC

altered this policy by approving the applications of

several carriers to construct and operate special Earth

stations in Chicago, New York, Washington, and other

cities for INTELSAT Business Service (IBS) (primarily

data and videoconferencing) and expects to approve

other similar applications in the future. 60 lt then fols~he FCC ~ovisionally still regulates A I & I as the dominant carrier both

domestically and internationally and also the other international carriers in

most international markets, since competition at present IS Insufficient to ellminate market power. Legislation, such as the Record Carrier Competition Act

of 1981, guides the FCC in making the transition and in residual regulation

of nondominant carriers.

Sssee main ch. 6 for a discussion of other alternative means of dealing with

COMSAT’S future status.

Sglt has a[ready come under fire. A number of US carriers petitioned the

FCC to be allowed to acquire capacity in the INTELSAT system parallel to

COMSAT, in much the same way that they now own capacity in transatlantic cables. The FCC recently turned them down and closed the issue for the

time being, but it will undoubtedly be raised again at some time In the future,

perhaps as an alternative to private satellite ownership (Safe//ite News, Apr.

2, 1984, p. 2].

@As of January 1985, besides that of COMSAT, the FCC had approved appl(catlons of the followlng firms or their subs~d(ar(es to d~str~bute INTELSAT

Business Serwce: International Relay, Inc., ITT Corp., United Brands Co. (subsidiary: TRT Telecommunications, Inc.), IBM Corp. (joint venture subsidiary:

Satellite Business Systems), Satellite Gateway Communtcatlons, Inc., Vital Ink

International Communlcatlons, Inc., McDonnell Douglas (subsldlary: FTC

Satellite Systems, Inc.), and United Vtdeo, Inc.
— 

224 ● International Cooperation and Competition in Civilian Space Activities

lowed this by removing the requirement that COMSAT

must own a half share of the general-purpose INTELSAT

Earth stations.G4

In the view of some, this evolution is too slow. In

their view, it may allow COMSAT to take advantage

of its special position in international communications

to unfairly cross subsidize its competitive domestic

activities, despite the special accounting rules devised

by the FCC to minimize the possibility.

The FCC’s abandonment of the distinctions between

international voice and record carriers and international and domestic carriers, together with its moves

to end the special position of COMSAT, already make

a significant difference in the way the U.S. industry

faces the world. What the changes mean collectively

is that all U.S. communications carriers (except

COMSAT, for the present) will be allowed to operate

in international communications markets in the nearly

same way as far as the U.S. Government is concerned.

What this will mean in terms of actual competition

in the intermediate-range future is in doubt, however.

First, AT&T currently has a dominant position in international service markets: at the end of 1983, AT&T

alone was using approximately 88 percent of all cable

and satellite circuits in service between the United

States and Europe just for message telephone service.G2

Despite its important domestic deregulatory moves,

the FCC has been rather cautious in extending deregulation directly into international communications. For

the most part, the foundations of the international

communications regime, in which competition is

severely limited, have not been touched.

Restrictions on facilities construction, ownership,

and use, for instance, are one of the key elements in

the current international communications regulatory

structure. Up to 1985 the FCC continued to approve

carrier facilities agreements and implicit or explicit balance criteria. The proposed transatlantic TAT-8 cable,

for instance, which received FCC approval in 1984,

will be jointly owned by the traditional U.S. international service carriers, together with foreign PTTs and

governments. Likewise, INTELSAT, among other things,

is a satellite cartel, and the FCC has been a strong supporter of INTELSAT. The pending applications for private “international” and “transborder” facilities, however, are forcing the FCC to reevaluate its position on

facilities. The reevaluation also appears to be underway in the current inquiry on facilities loading. Whether this reevaluation will result in

regulatory moves in international

not clear.

-—-—-——

6’FCC, ‘iSecond Report ., .,” op. cit., Jan. 1

6ZNOI, op. cit., p. 12.

important U.S. decommunications is

1, 1985,

The changes that have already taken place in the

international regulatory regime mean that the international communications game will now be played

by a greater number of potential U.S. pIayers. This introduces one new element, the increased ability of the

PTTs to use their monopoly power at the expense of

competitive U.S. carriers (and consumers) by favoring those U.S. carriers which offer the most advantageous terms.63 In the extreme, this would mean selling the right to interconnect to the single highest

bidder. In this way, PTT could get most of the excess

profit obtainable from the monopoly structure.

Care needs to be taken in interpreting the prices

(“accounting rates”) paid by international carriers to

their country-pair partners (“correspondents”) in other

countries. With certain exceptions, notably private

lines, carriers derive revenues only from customers

sending outbound communications and do not charge

for inbound ones. Since country-pair traffic flows are

usually unbalanced, sometimes with heavy net flow

in one direction, there is a need for the carrier with

the heavier flow (and heavier collection of tariff revenue from customers) to compensate the carrier that

is the net communications recipient for the uneven

use of jointly provided facilities.

It is a two-step procedure. First, there is a barter

mechanism, whereby minutes in one direction are

traded one-for-one for minutes in the other direction,

up to the level of the smaller directional flow. The

country-pair partners then complete the settlement by

negotiating a price for the excess minutes, the

“accounting rate.” This is than multiplied by the number of excess minutes to determine the amount to be

paid to the net recipient. These payments are made

regardless of which transmission mode is used and,

therefore, cover communications sent both by cable

and satellite,64

For voice service, there is a net communications

outflow from the United States, and U.S. carriers

therefore typically make payments to the PTTs. Any

increase in the accounting rate that a foreign PTT

could negotiate with U.S. voice carriers would therefore typically increase the operating expenses and decrease the net revenues of the U.S. carriers. For record service, the reverse movement in the accounting

rate would disadvantage U.S. carriers. While there is

some variation in directional flow among individual

U.S. record carriers, the record carriers as a group

have more traffic flowing into the United States than

sJACCOrding to GAO, op. cit., p. 18, the PTTs or groupings of PTTs representing Belgium, Luxembourg, the Netherlands, Denmark, Finland, Iceland,

Norway, and Sweden invited potential suppliers of data communication services to make accounting rate bids on existing and new services.

sgThe pa~ners also negotiate an exchange rate, the “settlement rate, ” so

the payment can be made in the appropriate currency.
Ch. 6—Satellite Communications 225

out. Here PTTs typically gain by pressuring U.S. record carriers to decrease the accounting rate, which,

decreases the revenues of U.S. carriers.

To combat the use of PTT monopoly power to disadvantage competitive U.S. carriers, the FCC has mandated that all potential U.S. connectors agree on a

single accounting rate. Ironically, this discourages

competition among the U.S. carriers, and, in particular, does not allow new entrants to compete on the

basis of price. It thereby lessens the benefits that consumers derive from increasing international competi -

tion. 65 It also illustrates the broader principle that halfway liberalization of markets may have unintended

consequences.

Entry Into U.S. International

Satellite Communications Markets

In most foreign countries, when there is more than

one potentially connecting U.S. firm, each country determines which carrier or carriers it will interconnect

with and which it will exclude in each market segment. 66 The arrangement is facilitated by joint owner-

. . —

6JThls Point IS made In an unpublished paper by EII Noam presented at

the Research Workshop on Economics of Telecommunications, Information

and Media Actlvlties In Industrial Countries, National Science Foundation,

Apr. 30-May 2, 1984, Washington DC.

6GI n the u nlted States, the Federal Communications CommlsslOn has required InterconnectIon. Nevertheless, since usually there was only one foreign carrier to connect with In each market, the market structure in countrypalr markets remained noncompetitive.

ship of oceanic cables. For instance, the planned TAT8 and TAT-9 fiber optic cables are to be owned jointly

by a consortium of AT&T, seven other U.S. international carriers, British Telecom, French Telecom, and

virtually every PIT in Europe. The Hawaii 4/TRANSPAC-3

cable that is to link the U.S. mainland to Japan and

several other Asian countries in 1988 or 1989 will be

also jointly owned by numerous telecommunications

entities (22 in all from North America, the Pacific region, and Europe).

In both the North Atlantic and Western Hemisphere

satellite arenas, deregulatory pressures from the U.S.

private sector have recently become intense. They are

currently manifesting themselves mainly in attempts

to enter communications markets with private facilities. The traditional U.S. international service carriers,

augmented by Western Union Telegraph Co., MCI international, and GTE Sprint, require correspondent

relationships with the PTTs of the destination countries, and while some entry is taking place in these

markets, they are not the scene of the most active entry. Western Union’s ability to enter many international record markets, since being allowed to by the FCC,

and MCI International’s entry into the United Kingdom, Belgium, Brazil, and other voice markets in late

1984/early 1985 are the most notable events. The most

active entry is currently being attempted in transatlantic and Western Hemisphere satellite facilities markets (as described above, in ch. 6) and in markets for

business communications facilities, such as INTELSAT

Business service.
—— — —

226 ● International Cooperation and Competition in Civilian Space Activities

APPENDIX 6B.–THE COMMUNICATIONS SATELLITE

EQUIPMENT MARKET

Introduction

The large-scale development of the satellite communications service industry has been paralleled by

the requisite development of a large satellite equipment industry. Estimated worldwide investment in

commercial communications satellites from 1965 to

1985 (not including the Soviet Union) will have been

$4.8 billion with 132 launches.’ This is shown in figure 66-1, which breaks out this investment for various countries, organizations, and regions.

Some analysts foresee continued expansion in communication satellite systems. In one recent optimistic

forecast, for instance, the world market for satellite

communications equipment in the 1980-2000 period

is projected to be $30 billion to $50 billion. z Expansion and periodic replacement of the world’s satellite

communications systems, which will require continuing future investment in satellites and ground segment

equipment, is included in this projection,

While this is consistent with one of the possible futures for satellite communications, previous analysis

in chapter 6 concluded that the demand for international satellite communications services on which the

demand for satellite equipment depends, is highly uncertain, particularly in the 1990s. Although the domestic markets for satellite communications in the United

States and other countries are not analyzed in this assessment, it is clear that demand for domestic, as well

as international, satellite services and for equipment

to provide them is also highly uncertain.3 Consequent-

‘R. Filep, A. Schnapf, and S, Fordyce, “World Communications Satelltte

Market Characteristics and Forecast,” prepared by Communications 21 Corp.,

Redondo Beach, CA, for the NASA-Lewis Research Center, Cleveland, OH,

NASA CR-168270, November 1983.

%ee Ted Lanpher, “ACTS: The Case for U.S. Investment in 30/20 GHz, ”

Satellite Communications, May 1983. A second projection for the world

equipment market between 1983 and 1990 in just the 14/12 GHz Ku band

IS $25 billion, peaking in 1988-89. Interview with Dennis Fraser, Corporate

Vice President and General Manager, NEC America Broadcasting Equipment

Division and Executive Vice President Alcoa-NEC Communications Corp.

as quoted in Satellite Week, Mar. 28, 1983, p. 7.

3

For a recent forecast of the demand for U.S. satellite and terrestrial telecommunications capacity, see S. Stevenson, W. Poley, j. Lekan, and j. Salzman, “Demand for Satellite-Provided Domestic Communications Services

to the Year 2000, ” Technical Memorandum 86894, NASA, Lewis Research

Center, Cleveland, OH, November 1984, For the decades of the 1980s and

1990s, the authors forecast the average annual demand for long-haul communications capacity in the United States to grow at 1.6 and 3.8 percent

respectively, but that the demand for satelllte capacity will grow at 10.4 and

7.5 percent, respectively. In their projection, the ratio of total satellite demand to total long-haul demand increased rapidly from 0.15 in 1980, to 0.35

In 199o and 0,51 i n 2000. The authors project an even more dramatic increase in the ratio of business services demand for satellite capacity (data

and video [mostly vldeoconferencing]) to demand for total long-haul capacIy, considerable skepticism of both U.S. and worldwide projections of satellite communications equipment demand is warranted.

Satellite Markets

The bulk of satellite communications services (outside the Soviet bloc) in the 1980s and 1990s will be

provided by INTELSAT and other global systems,4 regional systems such as ARABSAT, PALAPA, EUTELSAT,

and the potential private Western Hemisphere and

transatlantic systems; and national systems, particularly those of the United States, Canada, Mexico, Brazil, Japan, India, China, and Australia. The latter are

starting to provide increasing amounts of transborder

service to neighboring nations; consequently, the distinction between national and regional will become

less clear. Information on major international communications and direct broadcast satellites (DBS) which

are in use already or reasonably certain to be orbited

soon are listed in table 66-1.

The United States is the world’s largest single market for satellite communications equipment. One estimate places U.S. investment in commercial communications satellites at $1.63 billion between 1965 and

1985 as shown in figure 66-1 and $3.19 billion between 1986 and 1989 as shown in figure 6B-2. In April

1983, the Federal Communications Commission (FCC)

authorized 19 new communications satellites for

launch by 1987–more than are to be launched by the

rest of the non-Communist world combined. s Pending before the FCC are applications for over 50 more

communications satellites (represented by 22 differity for these services: 0.11 (1 980), 0.56 (1 990) and 0.87 (2000). This, therefore, presents one view of the outcome of technological competition between

satellites and fiber optic cables. In addition, commercialization of space ventures such as launch vehicles and materials processing may divert investment capital from communications satellites. See Jay C. Lowndes, “Increased

Space Commercialization May Tighten Investment Capital,” Awation Week

and Space Technology, Apr. 29, 1985, pp. 123-128.

‘E.g., INMARSAT.

JPersonal communication, FCC, May 1985. No more have been authorized since April 1983. In addition, the authorizations granted in April 1983

to Advanced Business Communications, Inc., Rainbow Satellite, Inc., and

United States Satellite Systems, Inc., all In Ku-band, have since been declared

null and void. The FCC hopes to have the pending applications settled by

August 1985, prior to ORB-85.

‘including spares, but not includlng previously built replacement satellites.

Much of this capacity IS for private business networks which bypass the local terrestrial telephone networks. Reasons why businesses have invested

in such private bypass facilities are that they can avotd cross subsidizing residential phone service, they may be able to gain types of serwce not available over the public network, and large users might find their own networks

to be economic since they can design them without provision for redundancy. (For a discussion of these issues, see House of Representatives, 98th
Ch. 6—Satellite Communications 227

Figure 6B-1. —Estimated Worldwide Investment in Commercial Communications Satellites,a 1965-85

(1983 dollars)

IN MARSAT

$36 million

(1)

\ $204 ml!lion / .

Arab

States

$46 million

(1)

Australia

$116 million

(2)

Total expenditures

$4,795 million

Total launches (132)

aD@~ not include the soviet union

SOURCE: Data from: R. Filep, A. Schnapf, and S. Fordyce,

“World Communications Satellite Market-characteristics and Forecast,”

prepared for NASA by Communications 21 Corp., NASA CR-168270, November 1983, p. 12.

Congress, Committee on Energy and Commerce, Report on HR 4102, LJniversal Telephone Service Preservation Act of 1983, Report No. 98-479, NO V.

3, 1983; “FCC Needs to Monitor a Changing International Telecommunlcatlons Market, ” General Accounting Office, Washington, DC, Report RCED83-92, Mar 14, 1983; “Eftlclency vs Comity In U.S. International Telecommunlcatlons Regulation, ” by Douglas L. Adkins, paper presented at the SOc Iety of Government Economists’ Session on International Regulation, ASSA

Me@lngs, Dallas, TX, Dec 28, 1984; and “Breaking IJP AT&T” by Mary H

Cooper, Edl/Ofld/ Research Repofls, \ol. 11, No. 23 Dec lb, 1983

ent companies) and about 18 direct-broadcast satellites. 7 Not all of these satellites will be built, partly because a number of the firms are requesting the same

7See ‘FCC Approves d Firms for Satelllte TV, Av/at/on week a~~ SPaCe

Technology, Oct. 15, 1984, p. 22; and “Four Firms Win Approval of FCC

for TV Satellites, ” Avlatiorl Week and Space Teclrrro/ogY, Dec. 17, 1984,

p, 18
. . .

228 ● lnternational Cooperation and Competition in Civilian Space Activities

Table B=l.—lnternational Communications and Direct Broadcast Satellite Series

Name Date Owner Manufacturer Technical characteristics

AM ERSAT 1985, 86 American Satellite (jointly RCA Astro-Electronics Six Ku-band (14/12 GHz)

owned by Fairchild transponders plus 12 Clndustries and band (6/4 GHz)

Continental Telephone) transponders

ARABSAT 1985, 86 Arab Satellite Organization Aerospatiale/Ford 25 C-band transponders 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 D,

Hughes Aircraft, Anik D- 24 transponders. All Ku or

Spar Aerospace/Hughes C-band or combination

BS 2 1984, 85 NASDA ToshibalGeneral 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 GHz

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, AEGTelefunken, Selenia, NEC

INTELSAT V 1978-84 INTELSAT Ford Aerospace leads a 21 transponders at 6/4 GHz

team that includes plus 6 at 14/11 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 (Telespazio) 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 30/20 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 /nternat/ona/, May 14, 1*, pp. 1311.1330 and Sate//ite Communications Notebook, 1984.

● ‘Retrieved November 19S4 after a previous failed mission.

NOTE: All satellites are geosynchronous.
Ch. 6—Satellite Communications . 229

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

General information Design life (years) Launch

Two satellites ordered so far by American Satellite AM ERSAT A, 8.5 yrs. Shuttle

AM ERSAT B, 10 yrs.

Will provide television, voice, and data links 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-11

and mountainous regions

Medium-scale broadcasting satellite for experimental purposes NIA 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-11

comprises two craft in orbit

European Communications Satellite. Five ECS are being built, procured for 7 Ariane

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

The largest series of communications 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. Ariane

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

IN MARSAT to provide ship-shore link

“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 DirectoryFlight Data,” Flight Irrterrrational, May 14, 1983, pp. 1311-1330 and Satellite Communications Notebook, 1984.

“ “Retrieved November 19S4 after a previous failed mission.

NOTE All satellites are geosynchronous
230 ● International Cooperation and Competition in Civilian Space Activities

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

Name Date Owner Manufacturer Technical characteristics

PALAPA 1976, 77, Permutel (Indonesian Hughes Aircraft 12 transponders in C-band; 1, 2

84, * ● 85 telecommunications 24 transpond. in C-band; 61, 62

administration)

Postsat 1986 or 87 German Ministry for Post 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 11: RCA RCA Astro-Electronics 24 transponders at 6/4 GHz

81, 82, American Comm., Satcom

83, 85 Ill onward: Americom

S0S 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 Southern 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; ISWestern Union) band 20-user mult. access

(RO), 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 France 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, inTelegraph (AT&T) creasing to 30 in later series

Unisat 1986 United Satellites, a British Aerospace 2 direct-broadcast television

consortium of British Dynamics (payload by channels plus 4 transTelecom, British Marconi) ponders for mixed

Aerospace Dynamics, business use

and Marconi Space &

Defense Systems

Westar 1974, 79, 8 0 01 0 Wester n

-Union a n d Hughes Aircraft 1, 11, Ill: 12 transponders at 6/4

82, 84* ●

ZOO/o American satellite GHz IV, V: 24 at 6/4 GHz

Direct-Broadcast:

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 Corp.

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 Ministrv for Post Eurosatellite 3 active direct-broadcast

and Telecom”. transponders DIUS 2 st)ares

● This includes all major satellites currently in service in the Western world as well as new ventures with a firm go-ahead. Derived from “lntemational Satellite

Directory-Flight Data,” flight International, May 14, 19S3, pp. 1311-1330 and Satellite Cornmmications Notebook 19S4.

“ ● Retrieved November 19S4 after a previous failed mission.

NOTE: All satellites are geosynchronous
Ch. 6—Sate/llte 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 61

and 62, 8 vrs.

West Germany’s first domestic communications satellite, also known as 7 Ariane 3 or 4

DFS; 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

Us.

Southern Pacific has ordered 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 (TDRSS) 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 Ill, IV, and V 1, 11, Ill: 7 yrs. IV, V: Thor-Delta,

10 yrs, Shuttle

Australia’s first domestic communications satellite. AUSSAT has two main 7 Shuttle

functions—direct 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 StakS

First export application of the French-German TV-Sat/TDF 1 direct- 5 Ariane

broadcast television satellite

France’s version of the direct-broadcast television satellite, being 7.5 Ariane

develor)ed 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 as well as new ventures with a firm go-ahead Derived from “International Satellite DirectoryFllght Data, ” F//ghf /rrterrtationa/, May 14, 1983, pp. 1311.1330 and Sate//ite Communications Notebook, 1984

.” Retrieved November 1984 after a previous failed mission

NOTE: All satellites are geosynchronous
232 ● International Cooperation and Competition in Civilian Space Activities

geosynchronous orbital slots in the C (6 GHz uplnak/4

GHz downlink) and Ku (14/12 GHz) bands.8 Several

of the proposed satellites will either have to be placed

in less desirable slots, not launched, or redesigned to

transmit in the higher frequency Ka (30/20 GHz)

band. 9 The present transponder oversupply or inroads

made by fiber optic systems could also reduce the

number launched.10 Geostationary commercial communications satellite locations, present and planned

as of June 1984, are shown in figures 6B-3 and 6B-4.

The next largest civilian communications satellite

market is INTELSAT, now operating 16 satellites with

a network of 173 receiving and transmitting Earth sta-

—. —

‘The geostationary orbit is becoming increasingly congested, as shown in

figs. 6B-3 and 6B-4 and allocation of these slots will be a malor issue in the

upcoming Space WARC ’85, Some technical solutions will help alleviate but

not solve the seriousness of the congestion. See, for example, L. Pollack and

H. Weiss, “Communications Satellites: Countdown for INTELSAT VI, ”

Science, Feb. 10, 1984, pp. 553-559; and Walter L, Morgan, “Satellite Locations–l 984, ” Proceedings of the /EEE, vol. 72, No. 11, November 1984, pp.

1434-1444.

‘%ee for example: Chris Bulloch, “Space Communications Move Into the

Millimetre-Wave Bands, ” Interavla, May 1984, pp. 461 -463; “Advanced

Technology Satellites in the Commercial Environment, ” vol. 2, final report,

prepared by Future Systems Inc., Rockville, MD, for NASA-Lewis Research

Center, Cleveland, OH, March 1984; and C. Richard Whelan, “Communications Satellites Move to Higher Frequencies, ” High Technology, November 1984, pp. 48-53.

IOsee for example: ‘‘satellites OutPace Customers—Gap Viewed as CYCIIcal, ” The New York Times, Apr. 10, 1984; or Stephen Shaw, “Business Outlook-Satellite Operators Bet on Demand Surge, ” High Technology, November 1984, p. 54.

tions located in 146 countries, dependencies, and

areas of other special sovereignty .11 In most cases, the

Earth stations themselves are owned and operated by

the international telecommunications organizations of

the member countries in which they are located.

INTELSAT has contracted for nine INTELSAT V and

V-A satellites to be launched between 1983 and 1986

and five of the new INTELSAT VI models for 1986-87

Iaunches .

12 Options exist for an additional 11

INTELSAT Vls, which, if built, are projected for launch

in 1988 and onward. Anticipated INTELSAT investment

in commercial communications satellites between

1986 and 1989 at $1.2 billion would be second only

to that of the United States ($3,19 billion) as shown

in figure 6B-2.

Several other satellite systems, for which the satellites have already been contracted, may later require

replacement or follow-on satellites. These systems include that of the International Maritime Satellite Organization (l NMARSAT) and others listed in table 6B-1

such as ARABSAT, ANlK,13 PALAPA, and AU SSAT. Japan apparently plans a larger satellite series to follow

its current series .14 France has not announced plans

———.——

I I INTELSAT, Annua/ Report, Washington, DC, 1983, P. 9.

lzpersonal Communication, INTELSAT, November 1984; pollack and Welsst

op. Cit.

{ %ee however, “Mature Market to Affect Next ANIK Generation, ” Av/ation Week and Space Technology, Dec. 10, 1984, pp. 87-88.

14Filep, Schnapf, and Fordyce, OP. cit., P. 89.
Ch. 6—Satellite Communications ● 233

Figure 6B”2.— Estimated Worldwide Investment in Commercial Communications Satellites,a 1985-89

(1983 dollars)

Canada

$78 millio

(2)

America

$166 million

(4)

Total expenditures $5,892 million

Total launches (107)

aDoes r-lot include the Soviet Union.

SOURCE: Data from: R. Filep, A. Schnapf, and S. Fordyce, “World Communications Satellite Market-Characteristics and Forecast,” prepared for NASA by Communications 21 Corp., NASA CR-166270, November 1963, p. 36.
. . . . 

234 ● International Cooperation and Competition in Civilian Space Activities

Figure 6B-3.– Locations of Commercial Communications Satellites

in Geosynchronous Orbit as of June 25, 1984

w ,.

% uQ a , 2

‘a%% 1 A f 8

Raduga 14 ●

Gor,zont 8 ●

Ekran 7 ●

o“

I

ao”w

Iii)”

Key

@Broadcasts (n C band and other Irequenc,es below 107 G1-lz

ABmadcasts above 107 GHZ tncludmg K band

● Broadcasts in mult,ple bands that cross over the 107

GHz demarcation Included are combination C and K band

satellites I

.Satcom IV

● Comstar D Ill

● Westar Ill

NOTE:

1. IS refers to INTELSAT satellites.

2. The following are USSR satellite series: CSDRN, Ekran, ESDRN, Gorizont, Loutch, Potok, Prognoz, Raduga, Statsionar, Volna, WSDRN.

SOURCE: COMSAT, Communications Satellite Corporation Magazine, Washington, DC., 1984.
Ch. 6—Satellite Communications 235

Figure 6B-4.—Locations of Commercial Communications Satellites

in Geosynchronous Orbit Planned for as of June 25, 1984

-“

,

~ala.~ ~“” . ‘;>. = ‘

-

~ek3@ ,!7s1 ~ ● Westa, 9

USA%( 7D ●

Am~{ sa~ ●

i

At3cl

s Tsc, ~P usa~ 4

usat 1

Wesla{ 6 ● t.4ob,lSal 2

Weslar “’’’” ‘HR’?ox; 9 . S:S 4

9 3 W soar..., ,,, m (

{

Weslar E

- Sa!com

Weslar B

/

‘ /

/ ,

CSDRN 4

Jog

NOTE:

1. IS refers to INTELSAT satellites.

2. The following are USSR satellite series: CSDRN, Ekran, ESDRN, Gorizont, Loutch, Potok, Prognoz, Raduga, Statsionar, 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., 1984.
236 . International Cooperation and Competition in Civilian Space Activities

to follow its current Telecom series, but there are likely

to be follow-on launches. The planned German,

French, and British DBS launches have been deIayed. 15

A 1983 market analysis16 also estimated that worldwide (excluding the Soviet Union), 107 commercial

communications satellites, worth $5.9 billion, might

be launched between 1986 and 1989, as shown in figure 66-2. U.S. firms are likely prime contractors for

at least three-quarters of these 1986-1989 launches (as

shown previously in table 6-7). Also projected are 171

launches worth $8.6 billion for the period 1990-2000.

In another separate study for NASA, it is estimated that

between 1983 and 1998, anywhere from 240 to 330

civilian communication satellites will be launched by

the non-Communist world.17 Again, as mentioned previously, launch projections in the 1990 s are highly

uncertain.

In the more predictable decade of the 1980s, it is

observed when comparing figure 66-1 and figure 6B2 that investment in U.S. commercial communications

satellites between 1986 and 1989 ($3. 19 billion) is projected nearly to double the investment (in constant

1983 dollars) during the previous cumulative 20 years

($1 .63 billion). In addition, the U.S. share of this

worldwide investment would actually increase from

34 percent in the 1965-85 period to 54 percent in the

1986-89 period. The number of U.S. satellite transponders is expected to increase from 449 in December 1984 to as many as 883 by 1987.18

After several years of relativel y tight capacity, there

is now surplus capacity, known as “transponder glut”

in the industry.19 This oversupply is likely to continue

for the next 2 or 3 years at least because demand is

expected to continue to lag supply as more satellites

are launched in the near future. This may result in less

launches actually taking place. According to a study

by the FCC, carried out on a weekday afternoon in

December 1983, only 54 percent of capacity on U.S.

communication satellites was in use. Of the 14 satellites studied, 143 of 312 transponders were idle. 20

INTELSAT also has stated that its overall “load factor”

‘

5

” W ~ransmlssion Wave Tube] Problems Delay French, West German,

DBS Programs,” Safe//ire News, vol. 7, No. 43, Oct. 29, 1984, p. 5; “France

Delays Launch of Direct Broadcast TDF-1 Until 1986, ” Aviation Week and

Space Technology, Jan. 28, 1985, p. 93; Chris Bulloch, “New Satellites at

Telecom 83–Spacecraft Builders Chase a Growing Market, ” /rrferavia, january 1984, p. 77,

lbFliep, Schnapf, and Fordyce, oP. cit.

1 TOutslde Users payload Model, prepared by Battelle Columbus Laboratories for NASA, NASW-3381, june 1983.

IaShaw, op. cit., p. 54, Filep, Schnapf, and Fordyce, oP. cit.

I qThe New york Times, Op. clt.

Zolbld, See also “Quarterly Transponder Report of C-band and Ku-band

Communication-Satellite Space Stations” by Charles C, Magin, Federal Communications Commission Field Operations Bureau, Sept. 28, 1984 and “FCC’s

Transponder Loading Report Continues to Show Wide Disparities In Usage, ”

Safe///te News, Washington, DC, vol. 7, No. 45, Nov. 12, 1984, p. 1.

has been only about 34 percent in recent years.21 industry executives assert that this situation is cyclical

and expect the excess capacity to disappear as they

claim that a drop in service prices will eventually result in a dramatic rise in demand. 22 For several reasons, developing countries may also find it more feasible in the 1990s to rent INTELSAT or other satellite

capacity than to install large complex terrestrial cable networks.23

The replacement market will continue to be a

source of demand for satellites, even in the event of

a slowdown in the demand for satellite communications, since satellite performance diminishes with age

and satellites have typically been designed with lifetimes of 5 to 10 years24 (see table 66-1, Design Life

column). Table 66-2 lists estimated new and replacement commercial communications satellites scheduled for launch in the interval 1984 to the year 2000.

The table demonstrates the significance of the replace21 chrls BUllOCh, ‘‘1 NTELSAT Builds Its Defenses Against Competition, /nferavia, October 1984.

Zzsome industry groups contend that by the end of the 1980s, the WPPIY

of transponders may not keep pace with demand. ITT forecasts 1,37o transponders will be needed in 1990 and 3,594 In 2000. Western Union independently arrived at the numbers 1,140 transponders required In 1990 and

2,779 by 2000.

ZjTh is contrasts with the situation in developed countnes which already

have terrestrial networks of copper cable and microwave in place and also

have many other available routes such as rail rights-of-way in which to lay

fiber optic cable.

z41 mprovements I n solar cel 1, battery, statlonkeeplng, and microwave amplification technology have Increased satelllte Iifetlmes from 1.5 to 10 years

In several cases. (Pollack and Weiss, op. cit. )

Table 6B-2.—Estimated New and Replacement

Communications Satellites Scheduied for

Launch During 1984-2000

Year New Replacement

1984 . . . . . . . . . . . . . . . . . . . . . . . . . . 11 10

1985 . . . . . . . . . . . . . . . . . . . . . . . . . . 21 9

1986 . . . . . . . . . . . . . . . . . . . . . . . . . . 21 7

1987 . . . . . . . . . . . . . . . . . . . . . . . . . . 26 6

1988 . . . . . . . . . . . . . . . . . . . . . . . . . . 20 9

1989 . . . . . . . . . . . . . . . . . . . . . . . . . . 15 2

1990 . . . . . . . . . . . . . . . . . . . . . . . . . . 8 4

1991 . . . . . . . . . . . . . . . . . . . . . . . . . . 10 17

1992 . . . . . . . . . . . . . . . . . . . . . . . . . . 8 13

1993 . . . . . . . . . . . . . . . . . . . . . . . . . . 16 6

1994 . . . . . . . . . . . . . . . . . . . . . . . . . . 10 10

1995 . . . . . . . . . . . . . . . . . . . . . . . . . . 15 9

1996 . . . . . . . . . . . . . . . . . . . . . . . . . . 13 4

1997 . . . . . . . . . . . . . . . . . . . . . . . . . . 6 11

1998 . . . . . . . . . . . . . . . . . . . . . . . . . . 8 8

1999 . . . . . . . . . . . . . . . . . . . . . . . . . . 3 2

Total . . . . . . . . . . . . . . . . . . . . . . . . 211 127

SOURCE: R. Filep, A. Schnapf, and S. Fordyce, “World Communlcationg Satellite Market–CharactwiStiCS and Forecast,” prepared for NASA by Communications 21 Corp., NASA CR-168270, November 1963, p. 99.
Ch. 6—Satellite Communications . 237

ment market, which represents over one-third of total estimated launches during this period.

Satellite life and therefore replacement interval is,

however, subject to substantial uncertainty, Current

generation satellites typically have estimated lifetimes

of about 7 years, but experience with satellites to date

and recent advances have led to estimates of increased

life for satellites. RCA American Communications, for

instance, recently asked the FCC to approve design

modifications on its Satcom VI satellite that would increase its design life from 10 to 12 years .25

Satellite Suppliers

U.S. Firms

U.S. firms have dominated the international satellite 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.2b Table 6-7 previously listed the prime contractors for commercial satellites for the periods 1965-83 and 1984-89; U.S. dominance is evident, but foreign activity is increasing, The

large U.S. market share in commercial satellite prime

contracts was shown previously in table 6-6 with the

United States capturing over 90 percent of the prime

contracts from 1965 to 1983. It should be noted that

in the future (1 984 through 1989) prime contracts will

increasingly reside with the purchaser. It was also seen

in table 6-6 that U.S. firms have been the prime contractors on all INTELSAT satellites, though models IV,

V, and VI have had certain subsystems subcontracted

to European and Japanese firms. For example, the

INTELSAT VI contract, while going to Hughes Aircraft,

involved subcontracts to non-U. S. firms totaling 21

percent of the contract value, as shown in table 6B-3.

The Indonesian, Australian, Indian, and Mexican national satellites have been or will be mostly or completely U.S.-built. Even where the U.S. firm is not the

prime contractor, U.S. suppliers often play a key

part-this is the case with the Brazilian, Arab League,

and Japanese satellites.

Three U.S. firms dominate the civilian communication satellite market—Hughes Aircraft, Ford Aero25 The improvement has come prlnlarlly from the substitution of a new Upper stage, which will allow a larger amount of statlonkeeplng fuel (hydrazlne) to be transported (5ate//lte News, Apr. 23, 1984, p. 1). Responsible admlnlstratlons are moving their retired geosynchronous satellites Into higher

orbits to avoid the possibility of an orbit collision with an operating satellite.

The orbital decay of these supergeosynchronous orbits IS estimated at only

1 meter per year (Personal communlcatlon, Walter Morgan, Communications Center, December 1984 )

MA possible exception cou Id be In the DES market, where i n at leaSt one

case, a European consortium, Eurosatellite (led by Aerospatlale of France

and MBB of West Germany) has teamed wtth General Electric of the United

States to offer a satellite to that of one of the U.S. 2BS firms. (See Chris BulIoch, “Aerospatlale and MBB Found a New SatellKe Dynasty,” Inferawa, May

1984, p. 465. )

Table 6B-3.—INTELSAT Vl: Subcontracts Let

by the Prime Contractor Hughes Aircraft

Millions Percent of tot=l

Participant (Us. $) contract value

United Kingdom:

British Aerospace . . . . . . . . 32.4 4.8

France:

Thomson-CSF . . . . . . . . . . . 24.8 3.7

Germany:

MBB . . . . . . . . . . . . . . . . . . . 18.5 2.8

Selenia . . . . . . . . . . . . . . . . . 24.4 3.6

Japan:

NEC . . . . . . . . . . . . . . . . . . . . 22.6 3.4

Canada:

Spar. . . . . . . . . . . . . . . . . . . . 18.0 2.7

Total . . . . . . . . . . . . . . . . . . . $140.7 21 .0 ”/0

SOURCE: R. FileP, A. Schnapf, and S. Fordyce, “World Communications SatelIlte Market—Characteristics and Forecast,” prepared for NASA by Communications 21 Corp., NASA CR-168270, November 1983, p, 101.

space, and RCA Astro-Electronics—as seen in table 6-

7.27 The largest supplier is Hughes Aircrafi, Which ‘n

addition to providing satellites for several U.S. systems,

has also sold satellites to Canada, Indonesia, Australia, and Mexico. Hughes won the INTELSAT contract

to build at least the first five INTELSAT Vi-class satellites. That contract is worth $750 million and could

rise to $1.3 billion. Estimated satellite sales (civilian

and military) for 1983 were $1 billion, up from $715

million in 1982. The backlog of orders in 1983 was

approximately $2 billion, half of which was for civilian satellites.28 Approximately 8,000 Hughes employees work on space programs.

RCA Astro-Electronics estimated its satellite sales to

be $240 million in 1983, but this figure includes Government-purchased, noncom munications satellites.

The firm projects annual sales of $400 million by 1988

and has a current backlog of approximately $992 million .29 RCA employs 800 people on space programs.

Ford Aerospace & Communications has had contracts worth about $600 million to build 15 INTELSAT

V and V-A satellites. The company’s recent annual

sales of civilian communications satellites has been

in the range of $150 million. Ford has joined its competitors, Hughes and RCA, in forming its own satellite communications service subsidiary to buy and

operate some of its equipment. The Ford Aerospace

Satellite Services Corp. has applied with the FCC to

launch three large “Fordsat” satellites each with 24

C-band and 24 Ku-band transponders.30

~~hey are also large ml Iltary satellite commu n Icatlons contractors.

ZaChris Bulloch, “Communications Satellite Prospects: Competition Sharpens Between the ‘Big Three’ U .S Builders, ’ /rrtera~ M, vol. 38, October 1983,

p. 1111-1113

Zglbid.

30Bu I loch , “New Satellites at Telecom ‘83, ” op. ctt,
. . — -- - - -- - -- - - -

238 ● International Cooperation and Competition in Civilian Space Activities

Foreign Firms

The major foreign firms building communication satellites 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

up of Aerospatiale (France), Compagnie Generale

d’Electricity (France), MBB/ERNO (West Germany),

ANT-Nachtrichten (successor in the space flight field

to West Germany’s AEG), and ETCA (Belgium). This

consortium is not only offering a DBS satellite to U.S.

firms, but may attempt to sell a low-capacity C-band

satellite to INTELSAT for “thin-route” use over the lndian and Pacific Oceans. Two satellite consortia,

which include West European firms, have been active in bidding on the second-generation INMARSAT

system—namely, British Aerospace Dynamics Group/

Hughes Aircraft Co,; and Marconi Space Systems

Ltd./Ford Aerospace & Communications Corp. /Aerospatiale.31

The major communication satellite firms of Japan

have been MELCO (Mitsubishi Electric Co.) and Toshiba, With assistance from Ford Aerospace, MELCO

built the current CS-2A and CS-2B satellites. With help

from General Electric, Toshiba is building the BS-2A

and BS-2B direct broadcast satellites. Although the CS2A is the world’s first operational civilian communication satellite using the Ka band, it is a relatively small

satellite with limited capacity: it is not likely to be

offered for export. At some point in time, however,

future generations of heavier Japanese satellites will

probably be able to enter the export market.

International Competitive Factors

in the World Satellite Market

In general, it seems likely that those countries or

groups of countries that have invested substantial public resources in building industries capable of producing communication satellites will buy their satellites

at home if they can,32 This has been the case previously as shown in table 6-6. In the general export market and in the U.S. domestic market (the world’s largest), U.S. firms will probably continue to dominate,

based on their performance to date, although there

are no trade barriers to the import of civiIian communications satellites.

Inroads into this U.S. dominance might occur if foreign governments continue their heavy subsidization

of satellite communications research and developI I sPdC~ 6US,n~~~ ~few5, A~r, z 3, 1984, p, 2; and Bulloch, ‘‘New Satel I ites

at Telecom ‘83, ” op. cit.

~~Thl~ Commitment to their own prime contractors may nevertheless involve continued rellance on technical assistance or components from U.S.

satellite manufacturers,

ment and neither the U.S. Government nor U.S. private firms develop technology desired by those who

buy and operate satellites in the 1990s,

Earth Station Equipment Suppliers

The major equipment components which comprise Earth stations can be summarized by the following:

1. antenna and tracking system;

2. high power and low noise amplifiers;

3. ground communications equipment;

4. multiplex equipment (analog or digital); and

5. ancillary and support equipment (air-conditioning, power supplies, controls, etc, )33

Because U.S. Department of Commerce statistics do

not permit easy identification of space-related telecommunications equipment, even the current size of

this market is difficult to estimate. In 1981 it was estimated that between 1981 and 1985 the world market for Earth station equipment would total approximately $2.2 billion (in 1984 dollars). 34 The estimate

for the period 1986-2000 was over $19 billion (in 1984

dollars) as shown in table 6B-4 which disaggregates

J~Eloise Jensen, Tracey Harbaugh, Kenneth Telesca, and lames Mahoney,

“Sector Study–Satellite Earth Stat ions,” The Export-Import Bank, Washington, DC, june 1984.

~“’Task 11 Report Plannlng Assistance (or the 30/20 GHz Program: Worldwlde Satelllte Market Demand Forecast, ” Western Union, NASA Report No.

1-4-W-l -TH, June 19, 1981.

Table 6B-4.—Satellite Earth Station Market Forecast

(millions of 1984 U.S. dollars)

1986.90 1991-2000 Total

North America:

INTELSAT. . . . . . . . . . . . . . 11

Domestic . . . . . . . . . . . . . . 1,414

South America:

INTELSAT . . . . . . . . . . . . . . 124

Domestic . . . . . . . . . . . . . . 14

Europe:

INTELSAT. . . . . . . . . . . . . . 78

Domestic . . . . . . . . . . . . . . 681

Africa:

INTELSAT . . . . . . . . . . . . . . 416

Domestic . . . . . . . . . . . . . . 5

Asia:

INTELSAT. . . . . . . . . . . . . . 164

Domestic . . . . . . . . . . . . . . 608

Oceania:

INTELSAT. . . . . . . . . . . . . . 35

Domestic . . . . . . . . . . . . . . 48

46

5,696

469

121

276

2,511

976

36

690

4,310

129

134

Totals:

INTELSAT . . . . . . . . . . . . . . 846 2,586

57

7,110

592

135

354

3,192

1,393

40

874

4,918

164

181

3,433

Domestic . . . . . . . . . . . . . . 2,768 12,608 15,576

SOURCE: Derived from: “Task 11 Report Planning Assistance for the 30/20 GHz

Program: Worldwlde Satellite Market Demand Forecast,” Western

Union, NASA Report No. I-4-W-1-T11, June 19, 1981, pp. 3-91. Dollars

converted to 1984 values.
Ch. 6—Satellite Communications ● 239

by world region and INTELSAT versus domestic

systems.

Several standards for Earth stations operating in conjunction with INTELSAT have been established with

Standard A and Standard B being the most common.

The features and differences of these INTELSAT station types are listed in table 6B-5.35 Figure B-5 shows

how typical ground stations costs vary for hardware

and technical expertise for differing sizes of antenna.

Unlike the satellite manufacturing industry, which

is dominated by three U.S. firms, the ground station

industry has many firms in the United States and several prominent foreign firms as well . The Earth station

market is large and growing, there are many suppliers

in the international arena, and competition among

them is intense. Price, rather than any specific technological advantage, is often the deciding factor in

contract awards. The principal worldwide suppliers

of satellite Earth stations and the station types they specialize in are listed in table 6B-6.36

Company profiles of some of the major satellite

Earth station suppliers are given in table 6B-7. No one

U.S. company produces all of the subsystems required

for a significantly sized ground station; hence, numerous individual vendors may in fact be involved in a

typical station project. Often the prime contractor will

be a company with extensive background in microwave or antenna technology or i n the actual communications technology.

37 For examnple, TIW specializes

~~+e a [50 ]~rl~en, et d I , Op c It ; d nd Corn mlttee Print — U nited Stdtes C’l -

i IIlan SIMC e Progrdms, \ 01 I I Appllcatlons Satel llte~ Subcommittee on 5p<ic e

% Ienc e and Appllcatlon\ ot the Committee on Science and Technology, U S.

Houst” ot Representatl\ es, IMay 1981, p. 35

N, K{)I[, t h<lt , 5M<11 I’ ~ \tJtlon I n t hls table refers to a Standard Z station which

c arrles a 5-10 1 1 -meter antenna Th(> small com mere Ial and ‘‘backyard’ sta -

tlf)n (In the 1- to Lmetcr \Ize range) cou Id thus be considered a very small,

m I n 1, or m I{ m ~tat ion The n u m her ot su ppl Iers ot these \ ery small station<

IS \u b~t~ nt Ial and I ncr(~a>l ng ra pIdly and are th U5 not ipecltlca I Iy I Isteci I n

th(’ tc]ble

‘“j(lnsen et a I , op ( It

Table 6B-6.—Major Worldwide Suppliers of

Satellite Earth Stations

Station typea

Small Medium Large

United States:

GTE International System Corp. . . . . X

ITT Spaceb . . . . . . . . . . . . . . . . . . . . . . X

TIW C . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Harris Corp. . . . . . . . . . . . . . . . . . . . . . X

Scientific Atlanta. . . . . . . . . . . . . . . . . X

GE d 

. . . . . . . . . . . . . . . . . . . . . . . . . . . .

M/A Communications Corp. . . . . . . . . X

Andrew Corp. . . . . . . . . . . . . . . . . . . . . X

Satellite Transmission System, Inc. . X

Aydin . . . . . . . . . . . . . . . . . . . . . . . . . . . X

Microdyne Corp. . . . . . . . . . . . . . . . . . X

Amplica . . . . . . . . . . . . . . . . . . . . . . . . . X

Satellite America . . . . . . . . . . . . . . . . . X

NETCOM-TES . . . . . . . . . . . . . . . . . . . . X

Japan:

NEC (Nippon Electric Co.) . . . . . . . . . X

Mitsubishi . . . . . . . . . . . . . . . . . . . . . . . X

France:

Alcatel Thomson/Telspace. . . . . . . . . X

Thomson-CSF. . . . . . . . . . . . . . . . . . . . X

United Kingdom:

Marconi . . . . . . . . . . . . . . . . . . . . . . . . . X

West Germany:

Siemens . . . . . . . . . . . . . . . . . . . . . . . . X

ANT Telecommunications . . . . . . . . . X

MBB . . . . . . . . . . . . . . . . . . . . . . . . . . . . X

Italy:

STS . . . . . . . . . . . . . . . . . . . . . . . . . . . . X

x x

x x

x x

x x

x x

x

x

x x

x x

x x

x x

x x

x x

x x

x x

x x

aThe small, medium, and large station types are roughly similar to INTELSAT

standard type Z, B, and A size stations respectively.

blTT, an early competitor in the large Earth station market, is now withdrawing

from this market

CTIW, previously a major supplier of Earth station antennas, iS now Penetratln9

the main contractor market.

dGE supplies LANDSAT type earth stations onlY

SOURCES: E, Jensen, et al , ‘Sector Study-Satellite Earth Stations,” The Export.

Import Bank, Washington, DC, June 1984; and Chris Bulloch and Paul

W. Rubin, “Satellite Telecommunications-The Ground Segment

Grows,” Interavia, November 1984, pp. 1231-1235

Table 6B-5.—INTELSAT Earth Station Standards

Earth station Antenna size Frequency band (G Hz)

standard in meters Types of service uplink/downlink

A . . . . . . . . . . . . . 26-32.5 International voice, data, TV, IBS 6/4

B . . . . . . . . . . . . . 10-13 International voice, data, TV, IBS 6/4

c 17.4-38 International voice, data, TV, IBS 14/1 1

Dl” : : : : : : : : : : : : 5 VISTA (International or Domestic) 6/4

D2 . . . . . .......11 VISTA (International or Domestic) 6/4

El . ...........3.5-4.5 IBS (K band) 14/11 &. 14/12

E2 . ...........5. 5 IBS (K band) 14/1 1 & 14/12

E3 . . . . . . . .....8-10 IBS (K band) 14/1 1 & 14/12

F1 . ...........4.5-5 IBS (C band) 614

F2 . ...........7.5-8 IBS (C band) 6/4

F3 . . . . . . . .....9-10 IBS (C band) 6/4

G . . . . . . . . . . . . . 0.8-12 INTELNET, international TV, etc. 6/4 & 14/11

z . . . . . . . . . . . . . 4.5-18.3 Domestic voice, TV, data 6/4 & 14/11

SOURCE: INTELSAT Report 1984-1985, Washington, DC, Mar. 31, 1985, p. 17.
— . . — . .

240 ● International Cooperation and Competition in Civilian Space Activities

Figure 6B-5.—Typical Ground Station Costs

32.meter heavy route

Spares, testing

equipment

670

4.5-meter thin route

Foundation ‘ h~ !

ter

SOURCE: Ford Aerospace and Communications, 1981.

in microwave and radar antenna systems, whereas marked the emergence of non-U.S. 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. suppliers of large Earth stafirms. The maturing of the technology, however, has tions has shifted to dominance by Japanese suppliers.
Table 6B-7.—Major Satellite Earth Station Suppliers-Company Profiles

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

1, General Telephone &

Electromcs Corp.,

U.S.A. (GTE)

2. Harris, U.S.A.

Created as partnership in Private

1918. Incorporated in 1920 as

Associated Telephone Utihties.

(Reorganized in 1936 as General Telephone Corp. )

Incorporated in 1926 Private

3. ITT, U.S.A.

4. Scientific Atlanta, Organized in 1951.

U.S.A.

5 TIW, U .5A.

Private

Prwate

GTE is the parent company of more than 60 communications,

products, research, and serwce subsidiaries operating in 39

States & 19 foreign countries. Provides many types of communications services & the GTE products group produce products ranging from complete communications systems &

telephone instruments to TV sets & lighting products.

Information systems, communications equipment including twoway radios, microwave & lightwave transmission equipment,

Earth stations & antennas for satellite communication, auxiliary

telephone products, & turn-key telecommunications networks.

Diversified, principally in telecommunications-transmission

switching & subscriber systems. Has 45 major R&D &

engineering centers in 24 countries. In 1982 ITT operated

plants & performed business in about 100 countries.

Designs, manufactures, & markets commercial electroruc

signal-generating and receiving equipment. Sales made directly

to foreign purchasers constituted from 13 to 17% of the company’s total sales in recent years.

1982

Revenue & sales, 12,066 M $

Communications products, 1,614 M $

Net income, 550 M $

1983

Total sales, 1,424 M $

Information systems, 319 M $

Communications products, 425 M $

Net income, 27 M $

1982

Total sales, 15,958 M $

Telecommunications sales, 6,375 M $

Net income, 703 M $

1983

Total sales, 327 M $

Communications products, 205 M $

Net income, 0.37 M $

Until July 1983, TIW Systems Private Design, fabrication, & installation of large-diameter antennas 1983

Inc. was a wholly owned sub- Contract revenue, 9.8 M $

sidiary of TIW Systems Ltd. In Net income, O 38 M $

July 1983, Visionics Corp. acquired the shares of TIW Systems Ltd. and effected a

reorganization resulting in two

subsidiaries wholly owned by

Visiomcs Corp.

Well-positioned in ground station

market as they are one of the few

full-line telecommunications companies,

Satellite-related revenues in 1983

were about $350 M. It has a wide

breadth of products m Its Earth station line.

Also involved in insurance/financial

services and natural resources.

The formation of a European

marketing joint venture with

PLESSY should have given

Scientific-Atlanta better access to

the U.K. & Common Market communications markets—however, it

was ended in Nov. 1984.

A world leader in design and construction of large steerable antenna

systems. TIW is now attempting to

penetrate the prime contractor market for Earth stations
Table 6B-7.—Major Satellite Earth Station Suppliers-Company Profiles—Continued

Company, country Origin Ownership Maior business (Products) Perfnrm2nr0 Comments

6. NEC, Japan

7. Mitsubishi, Japan

8 Siemens, A, G.,

West Germany

9. The Thomson Group,

Began as a partnership in Private

1848. Incorporated in Japan m

1899

Founded in 1870 as a small Private

shippmg company. Later incorporated

Founded In 1847 by Werner

Siemens. Reorganized as a

stock corporation in 1897.

Group founded m 1893 as

France (Thomson-CSF Compagnie Francaise

and Thomson-Brandt) Thomson-Houston, ThomsonBrandt & CSF merged in

1968. Nationalized in early

1982.

Private

French

Government

Leading Japanese maker of telecommunications, electronic, &

related equipment. In 1982 Government-owned NTT & Government agencies accounted tor 18’%0 of sales; Commercial 49%,

and overseas 33%. Company has 42 major plants in Japan &

18 overseas plants, R&D labs are located near Tokyo.

Diversified, Fuels, metals, machinery, foods, chemicals, & textiles. Its communications products exist in its machineries

group. Has a worldwide network of offices & offers a variety of

products & services.

Diversified telecommunications: Data Systems, Electromc Components, Safety & Securty Systems, Electrical Installations.

Sales outside of Germany accounted for 55% of total sales in

1982. Almost one-half of its international business is m

Western Europe,

CSF-Dwerslfied Telecommumcatlons products: transmitters,

receivers, microwave, fiber optics, etc. Brandt-wire & cables,

CSF is active in over 100 countries with manufacturing and/or

commercial subsidiaries & representatwe offices. Thomson

Corp. of America & seven other major subsidiaries are located

m the U.S.

. .,, ,“ ...!..,!””

1982

Total sales, 4,872 M $

Telecommunications sales, 1,461 M $

Employees, 69,000

Sales/employee, $70,546

1983

Total sales, 65,346 M $

Net Income, 109 M $

Machinery, 13,893 M $

EXpOrtS, 12,062 M $

1982

Total sales, 16,527 M $

Telecommunications sales, 4,627 M $

Export sales, (all categories),

4,938 M $

Net income, 272.6 M $

Employees, 324,000

Sales/employee, $51,009

CSF 1981

Total sales, 4,363 M $

Telecommunications sales, 2,574 M $

Net income, 12 M $

Employees, 82,500

Sales/employee, $52,885

Sales distribution by product line

1982

Elec. Computers & Industrial Elec.

Equipment (23%), Communications

equipment (37’Yo), Electron Devices

(24%), Home Electronics (12%),

Other (4%).

Many of the company’s overseas

projects are undertaken in partnership with local interests

Sir?mens & ltS subsidiaries are the

largest electrical company in West

Germany

Thomson-CSF IS a world leader in

electronic systems & equipment. Is

a major subcontractor to Hughes

aircraft for supplying electronics

equipment for five INTELSAT VI

satellites. TELSPACE, CSF’S joint

venture with the CGE group, has

manv Iarae Earth station contracts

SOURCES E Jensen, et al-, ‘‘Sector Study –Satelhte Earth StatIons, The Export-lmporf Bank, Washington DC June 1984, annual reports of the respectwe compames, and prwate commumcations with the companies Involved October-November 1984

. -
Ch. 6—Satellite Communications ● 243

For example, NEC of Japan is the single largest source

of large (Standard A) INTELSAT Earth stations. Figure

6B-6 illustrates relative market shares of suppliers of

INTELSAT Standard A and Standard B stations. Japanese companies supplied 41.4 percent of the A stations while U.S. companies supplied 29.0 percent.

U.S. companies performed better with B stations, having a 46.7 percent share of the INTELSAT B stations

while Japanese companies captured 37.1 percent.

When considering all types of full-scale, nonmilitary

Earth stations in the non-Communist world, NEC alone

has 1,018 of the approximately 3,000 stations, or

about a 34-percent share of the world market, as

shown in table 6B-8.

Japanese Earth station suppliers are successful in a

broad spectrum of enterprises. Satellite Business Systems (SBS) ordered Time Division Multiple Access

(TDMA) modems from Fujitsu, Ltd., for its Earth stations. Japanese manufacturers have sold 130 RF terminals to SBS.38 Satellite Television Corp., a subsidiary of COMSAT, selected Alcoa-NEC Communications

Corp. and Toshiba Corp. as suppliers of home receivers for its planned direct broadcast service .39 Thus, de3sChrls Bu I loch and pau I w. RU bin, ‘‘Satel I ite Telecommu nlcatlons—The

Ground Segment Grows, ” /rrferavia, November 1984, pp. 1231-1235.

‘

q

’’ FCC Evaluating 15 Proposals for Satellite TV Broadcasting, ” Av/af/on

Week and Space Technology, Mar. 12, 1984, p. 116. “

Figure 6B-6. —INTELSAT Satellite Earth Station

Suppliersa

1401

,

m

.

❑ “A” stations

“B” stations

aAs of June 1982, From “sector Studv—Satellit@ Earth Stations. ” bv E. Jensen.

et al., The Export-Import Bank, Wa~hlngton, DC, June 1984 and prwate corny

munications with INTELSAT, Washington, DC, November 1984.

Table B-8.—NEC Satellite Earth Station Orders

as of June 1984

INTELSAT Standard A Stations . . . . . . . . . . . . . . . . . 59

INTELSAT Standard B Stations . . . . . . . . . . . . . . . . . 39

Domestic—service stations using

leased INTELSAT capacity . . . . . . . . . . . . . . . . . . . 181

Domestic—service stations using other

dedicated satellites. . . . . . . . . . . . . . . . . . . . . . . . . . 590

Domestic service stations in Japan . . . . . . . . . . . . . . 83

INMAI?SAT coastal and other stations . . . . . . . . . . . 66

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,018

SOURCE: Chris Bulloch and Paul W. Rubin, “Satellite Telecommunications—

The Ground Segment Grows,” Interavia, November 1984, p. 1234.

spite Japan’s limited experience i n manufacturing sophisticated communications satellites, its ground

equipment firms compete very well in international

markets .40 Market trends indicate an increasing demand for smaller Earth stations and a smaller market

for the larger Earth stations. As the demand for small,

direct-broadcast receivers and antennas grows, Japanese firms may increase their penetration of the U.S.

market. Whether Japanese companies will achieve in

this sector of consumer electronics what it did with

television sets and video recorders remains to be

seen 41

1

Developing countries are increasingly important

markets for Earth station suppliers, since country authorities are placing a high priority on building and

modernizing communications systems. However, in

certain countries, as the number of sales within a

country increases and the country develops technologically, ground station suppliers will be required to

use an increasing percentage of local content.42

@Bulloch, “Satelllte Telecommunlcatlons—The Ground Segment Grows, ’

op. cit.

dlsales of u .s. ground statton equipment in japan, however, has so far been

minimal. Telecommunlcatlons 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.S. communications satellites and ground statton equipment In japan in the future. See for example: “New Trade Policy May Boost

Japanese Imports of Satellites, ” Aviat/on Week and Space Technology, May

1984. “Hughes to Announce Extensive jotnt Venture for japanese DOMSAT

System, ” Satellite News, Washington, DC, vol. 7, No. 37, Sept 17, 1984,

p, 1; “Hughes to Study ]apanese Telecommunications, ” A~vat/on Week and

Space Techrro/ogy, Sept. 24, 1984, p. 25; “japan’s ttoh Plans Hughes Satcom Buy, ” Aviation Week and Space Technology, Oct. 22, 1984, p. 30; “RCA

Astro to Announce japanese Satellite Venture With Sony; Ford Works with

Mltsuhlshl, ” Sate//he News, Washington, DC, vol. 7, No. 49, Dec. 70, 1984,

john Burgess, “Japan’s Phone Shake-Up May Profit U.S. Firms, ” The Washington Post, Nov. 18, 1984, p F 1; Susan Chlra, “Nippon Telegraph Sale to

Public IS Backed, ” The New York T/rnes, Dec. 14, 1984, p. D1

dzjensen, et al., OP. Cit,; and personal com mu n icatlons with Ha rrls Corp.

and Sclentlflc Atlanta, December 1984 These requirements for technology

transfer are becoming increasingly prevalent.
- . . — - -. .

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 . . . . . . . . . . .

United Kingdom ., , . . . . .

France . . . . . . . . . . . . . . . .

Japan . . . . . . . . . . . . . . . . .

Germany, Federal

Republic of , . . . . . . . . .

Australia ., . . . . . . . . . . . . .

Saudi Arabia . . . . . . . . . . .

Brazil . . . . . . . . . . . . . . . . .

Canada . . . . . . . . . . . . . . . .

Italy . . . . . . . . . . . . . . . . . .

Spain . . . . . . . . . . . . . . . . .

Mexico . . . . . . . . . . . . . . . .

United Arab Emirates . . . .

Venezuela . . . . . . . . . . . . .

Nigeria . . . . . . . . . . . . . . . .

Singapore . . . . . . . . . . . . . .

Switzerland . . . . . . . . . . . .

South Africa . . . . . . . . . . . .

Argentina . . . . . . . . . . . . . .

Netherlands . . . . . . . . . . . .

India . . . . . . . . . . . . . . . . . .

Iran, Islamic Republic of. .

Kuwait . . . . . . . . . . . . . . . .

Colombia . . . . . . . . . . . . . .

Greece . . . . . . . . . . . . . . . .

Korea, Republic of . . . . . .

Belgium ... , . . . . . . . . . . .

Philippines . . . . . . . . . . . . .

Sweden . . . . . . . . . . . . . . .

Portugal . . . . . . . . . . . . . . .

Egypt . . . . . . . . . . . . . . . . .

Peru . . . . . . . . . . . . . . . . . .

Chile . . . . . . . . . . . . . . . . . .

Israel . . . . . . . . . . . . . . . . .

Oman . . . . . . . . . . . . . . . . .

Thailand . . . . . . . . . . . . . . .

Indonesia . . . . . . . . . . . . . .

Denmark . . . . . . . . . . . . . .

New Zealand.. . . . . . . . . .

Jamaica . . . . . . . . . . . . . . .

Iraq . . . . . . . . . . . . . . . . . . .

Communications Satellite Corp... . . . . . . . . . . . . . . . . . . . . . . .

British Telecommunications . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Governmentof France ..., . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Kokusai Denshin Denwa Co. Ltd. . . . . . . . . . . . . . . . . . . . . . . .

Ministry for Post and Telecommunication. . . . . . . . . . . . . . . . .

Overseas Telecommunications Commission . . . . . . . . . . . . . . .

Government ofSaudi Arabia . . . . . . . . . . . . . . . . . . . . . . . . . . .

Empri%a Brasileira de Telecomunica@es S.A. . . . . . . . . . . . . .

Teleglobe Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Societ3 Telespazio. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Compall~ Telef6nica Nacional de Espafia . . . . . . . . . . . . . . . .

Government of Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Ministry of Communications . . . . . . . . . . . . . . . . . . . . . . . . . . .

Compah~Anofiima Nacional TelFfonos de Venezuela . . . . . .

Nigerian External Telecommunications Ltd. . . . . . . . . . . . . . . .

Telecommunication Authority of Singapore . . . . . . . . . . . . . . .

Direction G<n~ralede l’Entreprisedes Postes, TEl@phoneset

T~l&graphes Suisses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Department of Posts and Telecommunications. . . . . . . . . . . . .

Empresa Nacional de Telecomunicaciones . . . . . . . . . . . . . . . .

Government of the Kingdom of the Netherlands . . . . . . . . . .

Ministry of Communications . . . . . . . . . . . . . . . . . . . . . . . . . . .

Telecommunication Co. oflran . . . . . . . . . . . . . . . . . . . . . . . .

The Ministry of Communications . . . . . . . . . . . . . . . . . . . . . . . .

Empresa Nacional de Telecomunicaciones . . . . . . . . . . . . . . . .

Hellenic Telecommunications Organization S.A. . . . . . . . . . .

Korea Telecommunication Authority . . . . . . . . . . . . . . . . . . . .

R~giedes T61~graphes et des T61<phones . . . . . . . . . . . . . . . . .

Philippine Communications Satellite Corp. . . . . . . . . . . . . . . .

Swedish Telecommunications Administration . . . . . . . . . . . . . .

Companhia Portuguese RSdio Marconi . . . . . . . . . . . . . . . . . . .

Government of the Arab Republic of Egypt . . . . . . . . . . . . . . .

Empresa Nacionai de Telecomunicaciones del Peru . . . . . . . .

Empresa NacionaI de Telecomunicaciones S.A. . . . . . . . . . . . .

Government of the State oflsrael . . . . . . . . . . . . . . . . . . . . . . .

Sultanate of Oman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Government of Thailand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Government of the Republic oflndonesia . . . . . . . . . . . . . . . .

Generaldirektoratet for Post-og Telegrafvaesenet . . . . . . . . . .

Postmaster-General of New Zealand . . . . . . . . . . . . . . . . . . . . .

Jamaica International Telecommunications Ltd. . . . . . . . . . . . .

Government of the Republic oflraq . . . . . . . . . . . . . . . . . . . . .

23.09

12.93

5.65

3.33

3.30

3.24

3.14

3.04

2.98

2.15

2.00

1.82

1.74

1.42

1.33

1.30

1.25

1.17

1.15

1.06

1.03

1.02

1.01

1.00

0.84

0.72

0.72

0.65

0.64

0.63

0.62

0.06

0.58

0.56

0.51

0.49

0.48

0.42

0.40

0.04

0.04
Ch. 6—Satellite Communications . 245

Investment

share*

Country Signatory percent

China, People’s

Republic of. . . . . . . . . . .

Norway . . . . . . . . . . . . . . .

Algeria . . . . . . . . . . . . . . . .

Kenya . . . . . . . . . . . . . . . . .

Pakistan . . . . . . . . . . . . . . .

Qatar . . . . . . . . . . . . . . . . .

Ecuador . . . . . . . . . . . . . . .

Sudan . . . . . . . . . . . . . . . . .

Yugoslavia . . . . . . . . . . . . .

Morocco . . . . . . . . . . . . . .

Austria . . . . . . . . . . . . . . . .

Jordan . . . . . . . . . . . . . . . .

Zaire . . . . . . . . . . . . . . . . . .

Ivory Coast . . . . . . . . . . . .

Malaysia. . . . . . . . . . . . . . .

Cameroon . . . . . . . . . . . . .

Turkey . . . . . . . . . . . . . . . .

Yemen Arab Republic. . . .

Haiti . . . . . . . . . . . . . . . . . .

Iceland . . . . . . . . . . . . . . . .

Libya . . . . . . . . . . . . . . . . .

Ireland . . . . . . . . . . . . . . . .

Cyprus . . . . . . . . . . . . . . . .

Syria . . . . . . . . . . . . . . . . . .

Paraguay . . . . . . . . . . . . . .

Angola . . . . . . . . . . . . . . . .

Zambia. . . . . . . . . . . . . . . .

Bangladesh . . . . . . . . . . . . .

Lebanon. . . . . . . . . . . . . . .

Ethiopia . . . . . . . . . . . . . . .

Mali . . . . . . . . . . . . . . . . . .

Finland. . . . . . . . . . . . . . . .

Bolivia . . . . . . . . . . . . . . . .

Afghanistan . . . . . . . . . . . .

Barbados . . . . . . . . . . . . . .

Burkina Faso . . . . . . . . . . .

Central African Republic. .

Chad . . . . . . . . . . . . . . . . .

Congo . . . . . . . . . . . . . . . .

Costa Rica . . . . . . . . . . . . .

Dominican Republic . . . . .

El Salvador. . . . . . . . . . . . .

Fiji . . . . . . . . . . . . . . . . . . .

Gabon . . . . . . . . . . . . . . . .

Ghana . . . . . . . . . . . . . . . .

Guatemala . . . . . . . . . . . . .

Guinea . . . . . . . . . . . . . . . .

Honduras. . . . . . . . . . . . . .

Liechtenstein . . . . . . . . . . .

Ministry of Posts and Telecommunications . . . . . . . . . . . . . . .

Norwegian Telecommunications Administration. . . . . . . . . . . .

Government of Algeria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Kenya Posts & Telecommunications Corp. . . . . . . . . . . . . . . . .

Government of Islamic Republic of Pakistan . . . . . . . . . . . . . .

Government of the State of Qatar. . . . . . . . . . . . . . . . . . . . . . .

Instituto Ecuatoriano de Telecomunicaciones . . . . . . . . . . . . . .

Governmentof

Yugoslav Posts,

Government of

Governmentof

Governmentof

Office National

Governmentof

Democratic Republic of Sudan . . . . . . . . . . . .

Telegraphs &Telephones. . . . . . . . . . . . . . . . .

Morocco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Austria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

the Hashemite Kingdom of)ordan . . . . . . . . .

des Posteset Telecommunications du Zaire..

the Republic oflvory Coast . . . . . . . . . . . . . .

Telecommunications Department, Malaysia . . . . . . . . . . . . . . .

Socid#des Td@communications Internationalesdu

Cameroun . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Government of Turkey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Government of Yemen Arab Republic . . . . . . . . . . . . . . . . . . .

T61{communications d’Haiti S.A. . . . . . . . . . . . . . . . . . . . . . . . .

Government oflceland. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Government of the Libyan Arab Republic . . . . . . . . . . . . . . . .

Department of Posts and Telegraphs . . . . . . . . . . . . . . . . . . . . .

Cyprus Telecommunications Authority . . . . . . . . . . . . . . . . . . .

Government of the Syrian Arab Republic . . . . . . . . . . . . . . . . .

Administration Nacional de Telecomunicaciones . . . . . . . . . .

Empr~sa Ptiblica de Telecomunica@es . . . . . . . . . . . . . . . . . . .

Government of the Republic of Zambia . . . . . . . . . . . . . . . . . .

Telegraph and Telephone Board of Bangladesh . . . . . . . . . . . .

Government of Lebanon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Telecommunications Service

T61dcommunications Internationalesdu Mali . . . . . . . . . . . . . .

General Directorate of Posts and Telecommunications . . . . . .

Empresa Nacional de Telecomunicaciones . . . . . . . . . . . . . . . .

Ministry of Communications

Cable and Wireless (West Indies) Ltd. . . . . . . . . . . . . . . . . . . . .

Officedes Postes et Td<communications de Burkina Faso

Government of the Central African Republic . . . . . . . . . . . . . .

Socid<des T61<communications Internationalesdu Tchad

Government of People’s Republic of the Congo

lnstituto Costarricense de Electricidad . . . . . . . . .

Compa;fi Dominican de TelFfonos . . . . . . . . .

Administration Nacional de Telecomunicaciones

Fiji International Telecommunications Ltd. . . . . .

Soci<td des T41<communications Internationales

Ministry of Transport and Communications . . . .

Empresa Guatemalteca de Telecomunicaciones .

Government of People’s Revolutionary Republic

Empresa Hondurefia de Telecomunicaciones . . .

Government of the Principalityof Liechtenstein.

. . . . . . . . .

. . . . . . . . .

. . . . . . . . .

. . . . . . . . .

. . . . . . . . .

. . . . . . . . .

. . . . . . . . .

. . . . . . . . .

of Guinea

. . . . . . . . .

. . . . . . . . .

. .

. .

. .

. .

. .

. .

. .

. .

. .

. .

. .

0.39

0.39

0.39

0.38

0.37

0.35

0.35

0.33

0.32

0.31

0.30

0.30

0.29

0.29

0.25

0.24

0.23

0.22

0.18

0.18

0,15

0.13

0.13

0.13

0.12

0.11

0.11

0.10

0.10

0.09

0.08

0.08

0.05

0.05

0.05

0.05

0.05

0.05

0.05

0.05

0.05

0.05

0.05

0.05

0.05

0.05

0.05

0.05
——- . . . - . -- - - —- — — - -—. — —

246 International Cooperation and Competition in Civilian Space Activities

Investment

share*

Country Signatory percent

Luxembourg. . . . . . . . . . . .

Madagascar . . . . . . . . . . . .

Mauritania . . . . . . . . . . . . .

Monaco . . . . . . . . . . . . . . .

Nicaragua . . . . . . . . . . . . .

Niger . . . . . . . . . . . . . . . . .

Panama . . . . . . . . . . . . . . .

Papua New Guinea. . . . . .

Senegal. . . . . . . . . . . . . . . .

Somalia . . . . . . . . . . . . . . .

Sri Lanka . . . . . . . . . . . . . .

Tanzania . . . . . . . . . . . . . .

Trinidad and Tobago. . . . .

Tunisia . . . . . . . . . . . . . . . .

Uganda . . . . . . . . . . . . . . .

Uruguay . . . . . . . . . . . . . . .

Vatican City State . . . . . . .

Viet Nam . . . . . . . . . . . . . .

Government of Luxembourg . . . . . . . . . . . . . . . . . . . . . . . . . . .

Societe des Telecommunications Internationales . . . . . . . . . . .

Government of lslamic Republic of Mauritania . . . . . . . . . . . .

Government of the Principality of Monaco. . . . . . . . . . . . . . . .

Compania Nicaraguense de Telecomunicaciones por Satelite.

Government of the Republic of Niger. . . . . . . . . . . . . . . . . . . .

Intercontinental de Comunicaciones por Satelite, S.A. . . . . . .

Post and Telecommunication Corp. of Papua New Guinea ,.

Government of the Republic of Senegal . . . . . . . . . . . . . . . . . .

Ministry of Posts and Telecommunications . . . . . . . . . . . . . . . .

Government of Sri Lanka . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Tanzania Posts and Telecommunications Corp. . . . . . . . . . . . .

Trinidad and Tobago External Telecommunications Co. Ltd.

Administration for Post, Telegraph and Telephone

Ministry of Power, Posts, and Telecommunications

Administration Nacional de Telecomunicaciones . . . . . . . . . .

Government of the Vatican City State . . . . . . . . . . . . . . . . . . . .

Direction Generaledes Postes et Telecommunications . . . . . .

0.05

0.05

0.05

0.05

0.05

0.05

0.05

0.05

0.05

0.05

0.05

0.05

0.05

0.05

0.05

0.05

0.05

0.05

*As otMar. 1, 198 4

SOURCE INTELSAT, Contrlbutlon of the Director Generai, MS-14 -6 EW/4/84, Mar. 19, 1984 (See Footnotes In Original). Cet-tai nnameabbrevlations and changes

have been made by OTA.

INMARSAT

United States . . . . . . . . . .

United Kingdom . . . . . . . .

Norway . . . . . . . . . . . . . . .

Japan ., . . . . . . . . . . . . . . .

USSR . . . . . . . . . . . . . . . . .

Canada . . . . . . . . . . . . . . . .

Denmark . . . . . . . . . . . . . ,

Singapore . . . . . . . . . . . . . .

Netherlands . . . . . . . . . . . .

Italy . . . . . . . . . . . . . . . . . .

Germany, Federal

Republic of . . . . . . . . . .

France . . . . . . . . . . . . . . . .

Greece . . . . . . . . . . . . . . . .

Kuwait . . . . . . . . . . . . . . . .

Spain . . . . . . . . . . . . . . . . .

Sweden . . . . . . . . . . . . . . .

Australia . . . . . . . . . . . . . . .

Brazil . . . . . . . . . . . . . . . . .

India . . . . . . . . . . . . . . . . . .

Poland . . . . . . . . . . . . . . . .

Saudi Arabia . . . . . . . . . . .

China . . . . . . . . . . . . . . . .

Belgium . . . . . . . . . . . . . . .

Argentina . . . . . . . . . . . . . .

Finland . . . . . . . . . . . . . . . .

Communications Satellite Corp. . . . . . . . . . . . . . . . . . . . . . . . . .

British Telecommunications . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Norwegian Telecommunications Administration . . . . . . . . . . . .

Kokusai Denshin Denwa Co., Ltd.. . . . . . . . . . . . . . . . . . . . . . .

Morsviazsputnik . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Teleglobe Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Post and Telegraph Administration . . . . . . . . . . . . . . . . . . . . . .

Telecommunication Authority of Singapore . . . . . . . . . . . . . . .

Netherlands PTT Administration . . . . . . . . . . . . . . . . . . . . . . . .

Telespazio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Ministry for Port & Telecommunication . . . . . . . . . . . . . . . . . .

Direction Generale des Telecommunications . . . . . . . . . . . . . .

Helienic Telecommunications Organization . . . . . . . . . . . . . .

Ministry of Communications . . . . . . . . . . . . . . . . . . . . . . . . . . .

Compafi;a Telefdnica Nacional de Espafia . . . . . . . . . . . . . . . .

Swedish Telecommunications Administration . . . . . . . . . . . . . .

Overseas Telecommunications Commission . . . . . . . . . . . . . .

Empresa Brasileira de Telecomunicacoes S.A, . . . . . . . . . . . . .

Overseas Communications Service . . . . . . . . . . . . . . . . . . . . . .

Office of Maritime Economy . . . . . . . . . . . . . . . . . . . . . . . . . . .

Ministry of Posts, Telegraphs and Telephones . . . . . . . . . . . . .

Beijing Marine Communications and Navigation Company. . .

Regie des Telegraphes et des Telephones . . . . . . . . . . . . . . . . .

Empresa Nacional de Telecomunicaciones . . . . . . . . . . . . . . .

General Directorate of Posts and Telecommunications of

Finland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

30.73

14.55

11.59

6.96

6.91

3.85

2.47

2.39

2.28

1.94

1.69

1.67

1.67

1.17

1.17

1.10

1.08

0.97

0.97

0.97

0.97

0.72

0.34

0.30

0.30
Ch. 6—Satellite Communications 247

Investment

share*

Country Signatory percent

New Zealand . . . . . . . . . . .

Bulgaria . . . . . . . . . . . . . . .

Portugal . . . . . . . . . . . . . . .

Egypt . . . . . . . . . . . . . . . . .

Liberia . . . . . . . . . . . . . . . .

Philippines . . . . . . . . . . . . .

United Arab Emirates . . . .

Sri Lanka . . . . . . . . . . . . .

Algeria . . . . . . . . . . . . . . . .

Chile . . . . . . . . . . . . . . . . . .

Gabon . . . . . . . . . . . . . . . .

Iran.. . . . . . . . . . . . . . . . . .

Iraq . . . . . . . . . . . . . . . . . . .

Oman . . . . . . . . . . . . . . . . .

Pakistan . . . . . . . . . . . . . . .

Tunisia . . . . . . . . . . . . . . . .

** Asot Feb 6, 1985.

Post Office Headquarters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Shipping Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Companhia Portuguese Radio Marconi . . . . . . . . . . . . . . . . . . .

National Telecommunications Organization . . . . . . . . . . . . . .

Republic of Liberia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Philippine Communications Satellite Corp. . . . . . . . . . . . . . . . .

Ministry of Communications . . . . . . . . . . . . . . . . . . . . . . . . . . .

Overseas Telecommunication Service . . . . . . . . . . . . . . . . . . . .

Ministere des Postes et Teledcommunications . . . . . . . . . . . . . .

Empresa Nacionai de Telecomunicaciones S.A. . . . . . . . . . . . .

Telecommunications Internationales Gabonaises . . . . . . . . . .

Telecommunication Co. of Iran . . . . . . . . . . . . . . . . . . . . . . . . .

Republic of Iraq . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Sultanate of Oman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Pakistan Telegraph and Telephone Department. . . . . . . . . . . .

Republic of Tunisia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

0.21

0.16

0.11

0.07

0.07

0.07

0.07

0.06

0.05

0.05

0.05

0.05

0.05

0.05

0.05

0.05

APPENDIX 6D.–ARTICLE XIV AND OTHER EXCERPTS FROM

THE INTELSAT AGREEMENT RELATING TO SPACE SEGMENT

“FACILITIES SEPARATE FROM INTELSAT”

Agreement Relating to the

International Telecommunications

Satellite Organization “INTELSAT”

May 19, 1971

Preamble

The States Parties to this Agreement,

Considering the principle set forth in Resolution

1721 (XVI) of the General Assembly of the United Nations that communication by means of satellites should

be available to the nations of the world as soon as

practicable on a global and nondiscriminatory basis,

Considering the relevant provisions of the Treaty on

Principles Governing the Activities of States in the Exploration and Use of Outer Space, Including the Moon

and Other Celestial Bodies, and in particular Article

I, which states that outer space shall be used for the

benefit and in the interests of all countries,

Noting that pursuant to the Agreement Establishing

Interim Arrangements for a Global Commercial Communications Satellite System and the related Special

Agreement, a global commercial telecommunications

satellite system has been established,

Desiring to continue the development of this telecommunications satellite system with the aim of

achieving a single global commercial telecommunications satellite system as part of an improved global

telecommunications network which will provide expanded telecommunications services to all areas of

the world and which will contribute to world peace

and understanding,

Determined, to this end, to provide, for the benefit

of all mankind, through the most advanced technology available, the most efficient and economic facilities possible consistent with the best and most equitable of the radio frequency spectrum and of orbital

space,

Believing that satellite telecommunications should

be organized in such a way as to permit all peoples

to have access to the global satellite system and those

States members of the International Telecommunication Union so wishing to invest in the system with consequent participation in the design, development, construction, 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 ownership of the system,

Pursuant to the Agreement Establishing Interim Arrangements for a Global Commercial Communications Satellite System,

Agree as follows:

Article 1: Definitions

* * *

(k) “public telecommunications services” means

fixed or mobile telecommunications services which

can be provided by satellite and which are available

for use by the public, such as telephony, telegraphy,

telex, facsimile, data transmission, transmission of

radio and television programs between approved

earth stations having access to the INTELSAT space

segment for further transmission to the public, and

leased circuits for any of these purposes; but excluding

those mobile services of a type not provided under

the Interim Agreement and the Special Agreement

prior to the opening for signature of this Agreement,

which are provided through mobile stations operating directly to a satellite which is designed, in whole

or in part, to provide services relating to the safety or

flight control of aircraft or to aviation or maritime radio

navigation;

(1) “Specialized telecommunications services” means

telecommunications services which can be provided

by satellite, other than those defined in paragraph (k)

of this Article, including, but not limited to, radio

navigation services, broadcasting satellite services for

reception by the general public, space research services, meteorological services, and earth resources

services;

* * *

Article XIV: Rights and

Obligations of Members

(a) The Parties and Signatories shall exercise their

rights and meet their obligations under this Agreement

in a manner fully consistent with and in furtherance

of the principles stated in the Preamble and other provisions of this Agreement.

(b) All Parties and all Signatories shall be allowed

to attend and participate in all conferences and meetings, in which they are entitled to be represented in

accordance with any provisions of this Agreement or

the Operating Agreement, as well as in any other

meeting called by or held under the auspices of

INTELSAT, regardless of where they may take place.

The executive organ shall ensure that arrangements

with the host Party or Signatory for each such conference or meeting shall include a provision for the admission to the host country and sojourn for the duration of such conference or meeting, of representatives

of all Signatories entitled to attend.

(c) To the extent that any Party or Signatory or person within the jurisdiction of a Party intends to establish, acquire or utilize space segment facilities separate from the INTELSAT space segment facilities to

meet its domestic public telecommunications services

requirements, such Party or Signatory, prior to the

establishment, acquisition or utilization of such facilities, shall consult the Board of Governors, which shall

express, in the form of recommendations, its findings

regarding the technical compatibility of such facilities

and their operation with the use of the radio frequency

spectrum and orbital space by the existing or planned

INTELSAT space segment.

(d) To the extent that any party or Signatory or person within the jurisdiction of a Party intends individually or jointly to establish, acquire or utilize space

segment facilities separate from the INTELSAT space

segment facilities to meet its international public

telecommunications services requirements, such Party

or Signatory, prior to the establishment, acquisition

or utilization of such facilities, shall furnish all relevant information to and shall consult with the Assembly of Parties, through the Board of Governors, to ensure technical compatibility of such facilities and their

operation with the use of the radio frequency spectrum and orbital space by the existing or planned

INTELSAT space segment and to avoid significant economic harm to the global system of INTELSAT. Upon

such consultation, the assembly of Parties, taking into

account the advice of the Board of Governors, shall

express, in the form of recommendations, its findings

regarding the considerations set out in this paragraph,

and further regarding the assurance that the provision

or utilization of such facilities shall not prejudice the

establishment of direct telecommunication links through

the INTELSAT space segment among all the participants.

(e) To the extent that any Party or Signatory or person within the jurisdiction of a Party intends to establish, acquire or utilize space segment facilities separate from the INTELSAT space segment facilities to

meet its specialized telecommunications services requirements, domestic or international, such Party or

Signatory, prior to the establishment, acquisition or

utilization of such facilities, shall furnish all relevant

information to the Assembly of Parties, through the

Board of Governors. The Assembly of Patties, taking

into account the advice of the Board of Governors,

shall express, in the form of recommendations, its findings regarding the technical compatibility of such fa-
Ch. 6—Satellite Communications ● 2 4 9

cilities and their operation with the use of the radio

frequency spectrum and orbital space by the existing

or planned IN TELSAT space segment.

(f) Recommendations by the Assembly of Parties or

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

foregoing paragraphs. An extraordinary meeting of the

Assembly of Parties may be convened for this purpose.

(g) This Agreement shall not apply to the establishment, acquisition or utilization of space segment faciIities separate from the INTELSAT space segment facilities solely for national security purposes.
Chapter 7

REMOTE SENSING FROM SPACE

Contents

Page

Introduction . . . . . . . . . . . . . . . . . . . . . .......253

The Systems . . . . . . . . . . . . . . . . . . . . . . . . ...253

Remote Sensing Policy . .................254

Applications of Remotely Sensed Data .. .,.257

Meteorological Remote Sensing Systems .. ...258

U.S. Systems . . . . . . . . . . . . . . . . . . . . . . . . . . 258

Possible Future Directions . . . . . . . . . . . . . . . 258

Foreign Systems. ., , . . . . . . . . . . . .........260

International Cooperation in Meteorological

Satellite Systems . . . . . . . . . .............264

Data Products and Service . ..............266

Market for Metsat Equipment and Services. .270

Meteorological Satellite Issues . ...........273

Land Remote Sensing Systems. . ............278

The U.S. Landsat System . ...............278

System Development . ..................280

Foreign Landsat Receiving Stations . .......280

Data Products and Uses . . . . . . . ..........285

Policy History of Land Remote Sensing. ....286

International Relevance of Landsat . .......291

Equipment Market . .....................29 2

Issues ..., . . . . . . . . . . . . . . . . . . , . ........293

ocean Remote Sensing . . . . . . . . . . . . . . . . . . . 302

U.S. Oceanographic Systems . ............303

Foreign Systems. . . . . . . . . . . . . . . . . . . . . ...305

Major Ocean Parameters of lnterest for

Scientific and Applied Uses. . . . . . . . . . . ..307

Applications of Ocean Remote Sensing. ....310

Issues in Ocean Remote Sensing . . . . . . . . . . 312

Remote Sensing Policy . . . . ................314

Meteorological Remote Sensing Policy .. ...315

Land Remote Sensing Policy . ............319

Options for Continued Financial Support .,.319

Additional Policy Options. , . . . . . . . . ......321

Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . 322

Ocean Remote Sensing Policy . . . . . . . . . . . 323

Appendix 7A.–Satellite Remote Sensing in

Developing Countries . ..................325

The Experience of Developing Countries . 325

Institutional Factors Influencing the Use of

Satellite Remote Sensing . . . . . . . . . . . . . 328

Political Constraints. . . . . . . . . . . . . . . . . . . . . 329

Appendix 7B.–U.S. Environmental Satellites,

1960-85 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 332

List of Tables

Tab/e No. Page

7-l, Countries With APT/HRPT Reception

Capabilities. . . . . . . . . . . . . . . . . . . . . . . . 267

7-2. Domestic Users of Meteorological

Satellite Data . . . . . . . . . . . . . . . . . . . . 269

7-3. Derived Meteorological Satellite

Products . . . . . . . . . . . . . . . . . . . . . . . . . . 269

7-4. National Weather Service Hurricane,

International Aviation, and Marine

Forecast Programs . . . . . . . . . . . . . . . 269

7-5. Costs for Some Landsat Data Products. . 282
7-6.

7-7.

7-8.

7-9.

7-1o.

7-11,

7-12.

7-13,

7-14,

7-15,

7-16.

7-17.

7-18.

7A-1.

Major Imaging Sensors Under

Development by NASA , . . . . . . . . . . . . . 282

Foreign Landsat Ground Stations . . . . . . 284

Categories of Foreign and Domestic

Users . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 285

Domestic Distribution of Landsat

Products . . . . . . . . . . . . . . . . . . . . . . . . . . 286

Customer Profile of Landsat Total Data .297

Agribusiness Industry Structure Analysis 300

Geophysical Oceanographic

Measurement Design Capabilities

for Seasat-A . . . . . . . . . . . . . . . . . . . . . . . 302

Measurement Needs for Oceanographic

Satellites . . . . . . . . . . . . . . . . . . . . . . . . . . 305

N-ROSS Sensor Capabilities . . . . . . . . . . 306

Oceanographic Data Tactical

Operations . . . . . . . . . . . . . . . ...4..... 307

Ice Parameters of lmportance in

Different Operations and Research

Areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 309

Possible Oceanographic Satellite

Applications . . . . . . . . . . . . . . . . . . . . . . . 311

Impacts of Observed Parameters on

Commercial Benefits . . . . . . . . . . . . . . . . 311

Agency for International Development

Remote Sensing Grants and Projects,

1971-85 . . . . . . . . . . . . . . . . . . . . . . . . . . . 326

7-2.

7-3.

7-4.

7-5.

7-6.

7-7.

7-8,

7-9.

7-1o.

7-11.

7-12,

7-13.

7-14.

7-15.

7-16.

7-17,

7-18.

7-19,

7-20.

image of Earth, Received Aug. 8, 1980,

by GOES Satellite. . . . . . . . . . . . . . . . . . . 255

image of Northeast United States Taken

in February 1979 by the NOAA-N Series

Polar-Orbiting Satellite. . . . . . . . . . . . . . . 256

Image of New York City and Environs

Taken by the Thematic Mapper . . . . . . . 257

Advanced TIROS-N . . . . . . . . . . . . . . . . . 262

GOES Satellite . . . . . . . . . . . . . . . . . . . . . 263

GOES Geographic Coverage . . . . . . . . . . 264

Path of Geosynchronous Satellite in

Inclined Orbit.. . . . . . . . . . . . . . . . . . . . . 265

Operational Earth Observation Satellites 268

One-and Two-Polar Soundings . . . . . . . 276

Landsat-5 Spacecraft . . . . . . . . . . . . . . . . 279

Cutaway View of the Multispectral

Scanning System . . . . . . . . . . . . . . . . . . . 280

Landsat Bands and Electrc)magnetic

Spectrum Comparison . . . . . . . . . . . . . . . 281

Thematic Mapper Sensor . . . . . . . . . . . . 281

Distribution by Foreign Ground Stations 283

Customer Profile of Landsat Digital and

Imagery Products, Fiscal Year 1984 . . . . 287

Sale of Landsat Imagery Frames

and Digital Products . . . . . . . . . . . . . . . . 296

The Seasat-A Spacecraft . . . . . . . . . . . . . 303

Navy Remote Ocean Sensing Satellite . . 306

Radar lmage 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 provide crucial resource and environmental information on the atmosphere, oceans, and land

masses was recognized early in this Nation’s development of space technology. It was an obvious

extension of remote sensing by aircraft and balloons, technologies that were already well-estabIished.1 Two years after the National Aeronautics

and Space Act was signed, the United States received its first images from space taken by the

polar-orbiting2 weather satellite called the Television and infrared Observation Satellite (TIROS).

This chapter describes the principal remote

sensing systems that have been developed by the

United States and other countries and those that

are now under development. It draws heavily on

a technical memorandum published in 1984 in

connection with this assessments The chapter explores the primary issues connected with the generation, distribution, and application of remotely

sensed data, and assesses various policy options

for Congress to consider as it debates the need

for remote-sensing technology for the atmosphere, land, and oceans.

1 I n general terms, remote sensing is the art of obtaining information about objects, areas or phenomena through analyzing data

gathered by devices placed at a distance from the subjects of study.

Remote sensing may refer to sensing over short distances, as in medical or laboratory research applications using lasers, or over long

distances 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

or through sophisticated computer analysis.

21 n a polar orbit the satellite is inclined nearly 90 degrees to the

Equator. As the satellite orbits, the Earth turns beneath, making possible direct overhead observations of the entire Earth over a given

period. The geostationary satellites, by contrast, provide continuous viewing but are limited to providing perpendicular viewing at

only one longitude at the equator. All other points on Earth are

sensed at some angle. They therefore “see” the polar regions at

a highly oblique angle. The orbital elements of the meteorological

TIROS satellit~ are so chosen to allow them to pass over every

portion of Earth’s surface twice every 24 hours, once passing from

north to south, and once passing from south to north.

‘Remote Sensing and the Private Sector.. Issues for Discussion

(Washington, DC: U.S. Congress, Office of Technology Assessment,

OTA-TM-ISC-20, March 1984).

The Systems

The National Oceanic and Atmospheric Administration (NOAA)4 operates two civilian systems (fig. 7-1 ) for making global meteorological

observations: a geostationary system (Geostationary Orbiting Environmental Satellite–GOES)

using two satellites that continuously monitor

weather systems within their field of view (fig. 7-

2);5 and a polar-orbiting meteorological system

(Advanced Television and Infrared Observation

Satellite–TIROS) that observes meteorological

phenomena in more detail over the entire globe

from two satellites (fig. 7-3).

NOAA also operates the polar-orbiting U.S.

Landsat system, which was developed by the

National Aeronautics and Space Administration

(NASA), to provide valuable data of high spatial

and spectral resolution (fig. 7-4) of Earth’s land

resources. Data from the system support a variety of applications, including assessing and managing renewable and nonrenewable resources,

mapping, and land-use planning. The Landsat system was transferred to NOAA in 1983 and is now

managed as an operational system. The Department of Commerce is currently attempting to

transfer the Landsat system to private ownership.

Ocean remote sensing systems are the least developed of remote sensing efforts. Although the

results from such experimental ocean satellites

as Seasat, Nimbus, and the Geodynamic Experi4

The development of the weather satellite began in the DOD,

but was transferred to NASA in 1959. In 1961 the Weather Bureau

was placed in charge of providing an operational weather satellite

system. Operational satellite services were moved to the Environmental Science Services Administration in 1965 and finally to NOAA

in 1970. They now reside in the National Environmental Satellite

Data and Information Service (N ESDIS), which is part of NOAA.

son juIy 30, 1 g84, GOES-5 failed in orbit. This left the United

States with only a single geostationary satellite (the western satellite, GOES-6) to provide data during the critical severe storm seasons

of the summer and early fall. To make up (in part) for the !OSS of

information that losing the eastern satellite entailed, NOAA moved

GOES-6 to a central location. This meant reduced weather service

for Alaska, Hawaii, and the Pacific Trust Territories. GOES-7, the

replacement for the failed GOES-5, will not be available for launch

until late in 1985 or early 1986.

253
 

✒✕✔ ● International Cooperation and Competition in Civilian Space Activities

Figure 7-1.—Polar-Orbiting and Geostationary Satellites

Polar orbiting satellites

N

Gilmore Creek,

Alaska

530 mi

earth rotation

Orbit path E

&

per orbit

s

Orbit plane

rotates eastward

1“ per day

SOURCE: National Oceanic and Atmospheric Administration.

Wallops

Island,

Virginia

Geostationary satellites

mental Ocean Satellite have created interest in

developing remote sensing systems that will provide resource information from the oceans, no

civilian operational U.S. system is planned.G

Remote sensing from space at present constitutes a small part of a larger array of mapping

services provided by terrestrial and airborne devices. 7 The data acquired from space are now

routinely integrated with other remotely sensed

data (aircraft and balloons) and terrestrial, air, and

water measurements, thus enhancing the value,

and expanding the application of both data sets.

As discussed in detail below, other countries either operate, or have under development, various remote sensing systems; a few complement

U.S. efforts, others will compete with U.S.

systems.

Subsatellite

s

6

The u .S. Navy is planning a system called Navy Remote Ocean

Sensing System (N-ROSS) which may be launched in 1988 or 1989.

Most data from this system will be available to civilian users through

NOAA (see section on Ocean Remote Sensing).

Zln fisca[ year 1984, sales of Lan4sat data made up 34 percent

of the total sales of remotely sensed data from the EROS Data Center

in Sioux Falls, SD. Private services also sense and sell aircraft data.

Remote Sensing Policy

Although the United States has led the world

in the development and operation of civilian remote sensing systems, this year it will face competition from France for the sale of land remote

sensing data products. There is little commercial

market for data sales from meteorological systems, but opportunities do exist for broad multinational cooperation in providing meteorological

data from space. The United States is exploring

the prospect of joining with other Free World

space-capable nations in building a cooperative

polar-orbiting global meteorological satellite system. Such a venture could strongly enhance the

level of service delivered by such systems.

In 1983, the Administration accelerated a process begun in the late 1970s intended to lead to

the transfer of the Landsat system from the Federal Government to the private sector. The principal motivation for transferring the system to private hands is that the private sector excels both

at innovation and at developing markets for

goods and services. The 98th Congress passed the
Ch. 7—Remote Sensing From Space c 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 Isis just west of Mexico.

SOURCE: National Oceanic and Atmospheric Administration.

Ch. 7—Remote Sensing From Space ● 257

Figure 7-4.—image of New York City and Environs

Taken by the Thematic Mapper (30-meter resolution)

The George Washington and Verrazano bridges are clearly

visible.

Landsat Commercialization Act of 1984 (Public

Law 98-365) that provides for a phased transfer

of the Landsat system (see later section, Policy

History of Land Remote Sensing) and authorizes

a subsidy to fund part of the capital costs of building and launching a commercial system. As the

Department of Commerce implements the provisions of Public Law 98-365, Congress is overseeing the transfer process. The question Congress now faces is whether additional legislation

or other measures will be necessary to aid the

commercialization process.

Transfer to the private sector raises several

questions: 1) whether this course of action will

enhance or impede U.S. competitiveness with

other nations in this field, 2) whether private firms

will eventually develop a self-sustaining business

of providing land remote sensing from satellites,

3) how the Government might enhance that process, and 4) what transfer model best serves the

needs of the United States? If the current transfer process fails to establish a viable commercial

operation, Congress will be faced with deciding

what to do about it.

A significant international effort has begun in

remote sensing of the oceans. Both research and

operational satellites are planned by the United

States and other nations, making possible joint

research and data distribution efforts. The United

States is exploring ways in which to coordinate

international efforts in ocean remote sensing.

Applications of Remotely Sensed Data

Data from satellite systems have been used for

a variety of applications beyond the specific

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 Service for weather forecasting and warning. However, as the technology has evolved, the United

States has used these systems to enhance its relations with other countries by integrating instruments provided by other nations into U.S. spacecraft, and by freely sharing data with member

nations of the World Meteorological Organization (WMO), a specialized agency of the United

Nations formed to coordinate weather services

on a global basis. Though the Landsat system has

a shorter history, the United States has also used

it as an ambassador for U.S. space technology

by selling data on a public, nondiscriminatory

basis, and through arrangements for direct transmission of Landsat data (on a fee basis) to foreignowned and foreign-operated ground stations.

Satellite remote sensing systems are also important to national security. Though the United States

has consistently maintained separate civilian and

military systems, the programs have been mutually supportive. In defense and civilian meteorological programs, mutual backup in case of system failures and free data exchange exemplify this

support.

Government and civilian market potential vary

considerably for the different remote sensing systems. Although the metsats have a long history

of operation, these systems are just beginning to

develop a commercial value-added data industry. The Federal Government is by far the largest

user of meteorological data.g U.S. State and local

B“Transfer of the CIVII Operational tarth Observation Satellites

to the Private Sector, ” U.S. Department of Commerce, February

1983. p. B-24,
. . . . . .

258 International Cooperation and Competition in Civilian Space Activities

governments, foreign governments, universities,

and commercial firms also use these data. Though

new applications for meteorological data are being found for assessing crop conditions, scanning

the ocean, and for mapping water resources, their

potential for expanded use is limited by the need

for more complete computer models and by the

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, has remained undeveloped. The Government purchases

nearly 50 percent of the Landsat data, but the

commercial market for these data remains diffuse,

unaggregated, and small.9

9

For example, total shipped sales (not counting special charges)

for fiscal year 1984 amounted to only $3,812,128, 45 percent of

which was purchased by Government agencies. Although the curAlthough the potential for applying ocean remote sensing data to problems faced by ocean

users is high, only short-term scientific satellite

missions have been flown. Much more experimentation with actual data from operational satellite systems will be needed to assess the potential commercial market for data and data products.

rent market has historically been small (see table 7- I 4 and fig. 7-

16 for the total Landsat data sales since 1972), these data have never

been marketed commercially. Several analysts have predicted that

given proper commercial marketing and a favorable Governmental

attitude, the future market could be large. Their analysis is in part

the basis for believing that land remote sensing could be effectively

commercialized. See G. William Spann, statement before the Senate

Subcommittee on Science, Technology, and Space of the Committee on Commerce, Science, and Transportation, S. Hrg. 98-747,

Mar. 22, 1984.

METEOROLOGICAL REMOTE SENSING SYSTEMS

U.S. Systems10

NOAA manages two civilian environmental satellite (metsat) systems (see pp. 259, 260, and 261).

The TIROS-N series of polar-orbiting satellites (fig.

7-5) provide systematic high resolution global

weather observations, both day and night, to

meet both U.S. and international data requirements for a global, immediate, and long-range

weather forecasting system. The GOES series of

geostationary satellites (fig. 7-6) provides continuous viewing of weather systems at visible and

infrared wavelengths between 70°N latitude and

70°S latitude (fig. 7-7), and complements the data

received by the TIROS-N series. The GOES satellites provide the weather images seen on television and in the newspapers. Both systems have

the ability to collect and transmit data from Earthbased platforms. Both systems are necessary for

providing adequate information about weather

conditions directly related to U.S. needs.

IOSee NOAA Sate//ite Programs Briefing, U.S. Department of Commerce, August 1983.

Possible Future Directions

Continued R&D on new sensors will enhance

the abilities of U.S. satellites to gather useful environmental data. Because much meteorological

sensor technology is common to all national systems, new developments are applicable to both

foreign and U.S. systems. Experience with microwave sounders’ 11 on Nimbus satellites, as well as

on the NOAA-N series, indicates that a new

sounder capable of infrared sensing has promise for better soundings in cloudy areas, and better information on atmospheric water vapor and

precipitation rates. The proposed 15-channei

microwave instrument would give better vertical

resolution, particularly in the stratosphere, and

would be supplemented with additional channels

for sounding water vapor. The United Kingdom,

which now provides the microwave instrument

on the TIROS-N spacecraft, has expressed interest in providing an advanced sounder with these

improved characteristics.

11A device for measuring atmospheric parameters at different

altitudes.
Ch. 7—Remote Sensing from Space 259

The Polar Orbiting Meteorligical Systems

The Advanced TIROS-N series first become operational with the launch of NOAA-8 in March 1983+*

The spacecraft is a three-axis stabilized, box-like structure that carries four primary instrument systems

*NOAA-8 faikd im JMly 1$S4 and wrepkmd in Recetnber 1984 by hKlAA4& NOAA-8 is nww in partiat operatkx’i a~in.
i . . . 

260 ● International Cooperation and Competition in Civilian Space Activities

A second area for development involves increased use of the Visible Atmospheric Sounder

(VAS) on geostationary satellites. Tests with the

experimental system aboard the GOES satellites

suggests the possibility of generating an index for

severe weather.

An advanced Ocean Color Imager (OCI), similar to the Coastal Zone Color Scanner (CZCS) instrument flown on the NASA satellite, Nimbus7, if placed on the polar-orbiters, would provide

multispectral scanning of the ocean in the visible, and near-infrared spectral regions, for detection of such ocean phenomena as pigmentation

chlorophyll content, and turbidity.

instruments on the TIROS-N satellites collect

global data on the radiation processes of the

Earth’s surface and atmosphere for the Earth

Radiation Budget Experiment (ERBE). 12 The ex1 ZThe ERBE experiment Will consist of measurements Of the tOtal

radiation received by Earth and radiation reemitted by Earth. Measurements are being made by a dedicated satellite, the Earth Radiation Budget Satellite (ERBS) which was launched Oct. 5, 1984, and

by an Instrument on the NOAA-N series of satellites.

change system involved in the absorption and reradiation of solar influx by Earth’s surface is a major component of weather analysis. A Solar

Backscatter Ultraviolet Radiometer (SBUR) will

provide global sensings of the vertical distribution of ozone to assist determination of the effect of human activities on this essential protective shield and to further understanding of the

relationship of ozone to weather changes,

Internationally, the principal technological

thrust is toward devising more sensitive and stable

sensors for polar-orbiting spacecraft, increasing

the operational use of the microwave spectrum

for atmospheric temperature and humidity measurements, and increasing the use of the Data Collection System for the international hydrological

community.

Foreign Systems

Other nations maintain operational satellite systems for both national purposes and as part of
Ch. 7—Remote Sensing From Space 261

Ground-Based Sensor Data

Remote sensors achieve greater value for

weather analysis when combined with data from

ground-based measurements. Ground-based

sensors can provide data not now obtainable by

a satellite-borne sensor, such as surface wind

and pressure, rainfall amount, river levels, sea

salinity, or subsurface oceanic temperatures. Because the ARGOS system can locate these surface platforms containing ground-based sensors,

it is also possible to determine ocean currents

and atmospheric winds. Ground-based observations also provide “ground truth” data valuable

in verifying and correlating large-scale weather

patterns predicted through analysis of satellite

observations.

For their data to be useful for weather monitoring, moving platforms, such as ships or aircraft,

must be capable of reporting their own position

when reporting to geostationary satellites. Fixed

platforms can be of three types: 1) self-timed,

which report under control of an internal clock

on a frequency and time assigned by an operator; 2) interrogated, in which a receiver replaces

the clock to allow the satellite ground station to

signal for a report on a flexible time schedule;

and 3) alert, in which a special repmting frequency is allocated for a signal from the platform

that some particular phenomenon has exceeded

a preestablished threshold. The number of platforms that can be incorporated into the data collection service (DCS) is limited by the time required to interrogate, receive, and relay signals.

Still, DCS capabilities have greatly expanded the

availability of observations by obtaining data

from remote areas not accessible to satellite sensors or ground telecommunication systems.

the international environmental data gathering

community:

● European Space Agency (ESA)—Meteosat2. The geostationary satellite, located at 0°

longitude, provides raw imagery of European

weather conditions to Europe as well as relaying processed imagery from U.S. geostationary weather satellites. It carries a visible

and infrared scanning radiometer, a Data

Collection System, and a weather facsimile

●

●

●

●

service (WE FAX). An improved Meteosat is

planned for launch in 1985.

India—1nsat-1. This geostationary satellite

provides both telecommunications and limited meteorological data. Visible and infrared

images are available every 30 minutes from

Insat 1‘s Very High Resolution Radiometer

(VHRR). The spacecraft also has a data collection system. The satellite 1B, which replaced lnsat-lA, 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.

Japan–Geostationary Meteorological Satellite, GMS-3 (Himawari or Sunflower 3).

This was launched by Japan on a Japanese

Nll 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

WE FAX. 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; their launch

dates are uncertain.

The U.S.S.R. polar-orbiting meteorological

program consists of two or three METEOR2 series spacecraft that fly a near-polar orbit

at a 900 km height with an orbital inclination of 810. 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 resolution; an infrared scanning radiometer; an

8-channel infrared scanning radiometer that

senses the vertical temperature distribution

in the atmosphere; and a radiometer that

monitors high energy radiation influx from

space.

Data available from these instruments provide analysis of the global distribution of

clouds and snow and ice cover, global radiation temperature of the surface, cloud-top
———. . - . . . . . -- - - — - - - -- - - .

262 ● International Cooperation and Competition in Civilian Space Activities

SBA13)

ERBE / E

[SCANNER) /

SOA

Figure 7-5.—Advanced

/

AVHRR

I

SBUV

ERBE

(NON. SCANNER)

RI

SOURCE. Nat[onal Oceanic and Atmospheric Adm!nistratlon.

MISSION: Collect global data on cloud cover, surface conditions such as Ice and snow.

surface and afmosphenc temperatures. and atmospheric humldtty, measure solar particle flux, collect and relay informatlon from hxad and mowng

data platforms, prowde continuous data broadcasts

ORBIT: 833- and 870-km ctrcular, 9889$ mclrratlon, 14-14 revsday

SENSORS AND FUNCTIONS:

. Advanced very High Resolutlon Radiometer (AVHRW2)

1 l-km resolution. ,2600-km swath width

Channels Wavelengths (Km) primary Ueea

1 058-06 8 Daytime cloud, surface mapping

2 0725-1 10 Surface water delineahon. Ice and snow

melt

3 355-39 3 Sea surface temperature nighttlme cloud

mappmg

4 1030-1130 Sea surface temperature, day and nighl

cloud mappmg

5 1150-1250 Sea surface temperature. day and night

cloud mappmg

● TIROS Operational Vertlcal Sounder (TOVS):

A 3-sensor atmospheric sounding system

(1) High Resolution Infrared Radiatlon Sounder (HlRS/2) 17 4-km resolution

Chennels Waelengths (Pm) Primary Uses

1-5 1495-1397 Temperature profiles, clouds

6-7 1364-1335 Carbon dloxlde & water vapor bands

8 11 11 Surface temperature, clouds

9 971 Total 03 concentration

10-12 816-67 2 Humldlty profiles, detection of thin cirrus

clouds

13-17 457-42 4 Temperature profiles

18-20 400.06 9 Clouds surface temperatures under partly

cloudy skies

TIROS.N

SOLAR

VRA

(4)

(2) Stretospharic Sounding Unit (SSU): 147 3-km resolution

Channals Wavelengths (vm) Prtmary Uses

1-3 15 Temperature profiles

(3) Microwave Sounding Unit (MSU): 105-km resolution

Channela Frequencies Primary Uses

1 5031 GHz

2 5373 GHz Temperature soundings through clouds

3 5496 (+iz

4 5795 CiHz

. Space Environment Monitor (SEM): Measures solar particle flux at spacecraft

( 1 ) Total Energy Detector (TED): Solar particle mtensty from 03- to 20-keV

(2) Madlum Energy Proton and EIWron Detector (MEPED): Protons,

electrons and Ions m 30- to 60-keV range

. ARGOS Data Collection System (DCS) (French): CollectIon and relay of data

from fixed or movmg automatic sensor platforms, determmes Iocatlon of movmg

platforms

DIRECT BROADCAST: Contmuousdata broadcasts avadable to any recewmg station

wthm range

● Automatic Picture Transmlaaion (APT): Vwble and Infrared Imagery at 4-km

resolution VHF broadcasts at 13750 or 13762 MHz Basic ground equipment

costs about $25.000 (U S ) m 1981

0 tllgh Resolution Picture Transmission (HRPT): V!s!ble and Infrared data at

1 -km resolution S-band broadcasts at 16980 and 17070 MHz Basic

ground equlpmer)t costs about $250000 (U S ) In 1981

0 Direct Sounder Broedca.t (DSB): TOVS data Iransmftted for use In quantitative programs Broadcast at 13677 or 13777 MHz (Beacon Frequency)

and In the HRPT data stream Conventional ground recelwng station required but specialized data processng IS necessary IO produce environmental In formation
Ch. 7—Remote Sensing From Space ● 263

Figure 7-6.—GOES Satellite

I

Section

/7/ II

) /w@ / Magnetometer

X.ray

sensor

Hepad

+

Radial

thrusters

\

SOURCE: National Oceanic and Atmospheric Admlnlstration

MISSION: Repetttwe observations of the earth dsk and overlaying atmosphere (n the

held of wew measurements of solar x-rays and the proximate space

enwronment, collection and relay of data from platforms at or near the

earths surface, broadcast of data and environmental informallon

ORBIT: 35,800-km geosynchronous GOES East over equator at 75” W GOES

West at 135-W

SENSORS AND FUNCTIONS:

. Visible and fnfrared Spin Scan Radiometer (VfSSR) Atmospheric Sounder

(vAS): The VAS IS a wslble and Infrared radiometer capable of provldln9 both

multl-spectral Imagmg and dwell sounding data It possesses eight vmble and

SIX infrared detectors Posmonmg a tdfer wheel allows selections from among 12

spectral bands w!th centra~ wavelengths between 39 and 15 Wm VAS scans

west to east In coryunctlon wl!h spacecraft rotation at 100 rpm a stepping mirror

prowdes pole to pole scanning Resolutions are 1-km In the wslble and 7- or

14-km m the infrared depending upon the selectlon of IR detectors V!slble

Imagmg data are prowded routinely every 30 mmutes by each spacecraft during

dayllght and mfrarad (7-km) Imagmg data on the same Schedule. are provided

day and rvght

. Space Environment Monitor (SEM): Composed of 4 subsystems

( 1 i X-Ray Sensor Prowdes data on solar x-ray actw(ty m two wavelength

bands O 5-3 OA and 1-8A

Protons -08 to 500 fvfeV, 7 log ranges

Aiphas -32 to 400 MeV, 6 log ranges

Electrons <2 MeV. 1 range

(3) High Energy Proton and Alpha Detector (HEPAD) Protons m the 379-keV

range, alpha particles m the 850-keV range

(4) Magnetometer Momlors magnitude and dlrectlon of ambient magnetic

field, parailei field ( - 1200Y} and transverse field (n 4 selectable ranges

( : 5oy, : 1007, - 200Y, or z 400-Y)

. Data Colitilon System (DCS): Reiays UHF mterrogahons to and data from

sensor platforms reporting enwronmenlai data

DIRECT BROADCAST: Broadcasts available to any ground station wtthm range

0 WEFAX: Retransmlsson of processed data at 16910 MHz Along with meteorological charts, GOES Imagery at 8-km resolution and NOAA Imagery al 8-

to 12-km resolution are transmitted A dally operational message IS transmltfed

that prowdes schedules and contents A basic ground capablhty costs about

$tLOOO (U S ) n 1981

, Stretched Sensor Data: A retransmsslon at a reduced rate, of the data burst

that occurs during the 20’ angular sweep of VAS detectors across the earth

The Iransmisslon IS on S-band at 16871 MHz A basic ground station that

includes a hmded product capablhty costs about $150 OM (U S ) m 1981

(2) Energy Particle Sensor Determmes mtensfy of charged particle flux m

the tollowmg ranges
.-— - .- - - — — . . . .

264 ● International Cooperation and Competition in Civilian Space Activities

Figure 7-7.—GOES Geographic Coverage

One satellite Two satellites

— —— —---+:+. . - . . .

+—— !

1 ’ + >1 I m

++-:” Y i ./’ ”+--+”

--+;/-+++-- -’q’’ t-j

SOURCE: National Oceanic and Atmospheric Administration.

heights; and vertical distribution of temper- International Cooperation in

ature. Only the United States and the Soviet Meteorological Satellite Systems

Union operate polar-orbiting meteorological

spacecraft.

The Soviet Union plans to launch a Geostationary Operational Meteorological Satellite (GOMS) this year, which will carry visible and infrared sensors. It will be stationed

at 70°E longitude and will have a scanning

radiometer operating at visible and infrared

wavelengths, DCS, and WEFAX. Soviet designers are investigating the feasibility of

operating a geosynchronous satellite inclined

by 65° to the Equator.13 The ground track

of such a satellite would describe a figureeight pattern (fig. 7-8) and have the dual advantage of spending some time over the Soviet Union, the northern reaches of which

are inaccessible to a satellite positioned over

the Equator, and also over the Indian Ocean

where observations critical to certain Soviet

military operations would be possible.

I jNicholas L. Johnson, “The Soviet Year in Space: 1983,” Teledyne Brown Engineering, 1984, p. 24.

The United States has encouraged direct reception of data (at no cost) from its civilian meteorological satellites on an international basis for

over 20 years. There are about 1,000 direct readout stations in over 125 countries (table 7-1). In

addition, NOAA sells metsat data products worldwide. Foreign sales of U.S. meteorological value-

-added data products were about 13 percent of

product sales (provided at cost of reproduction)

in fiscal year 1984.14

The United States cooperates with other nations through the World Meteorological Organization (WMO), a specialized agency of the

United Nations whose purpose is to coordinate,

standardize, and improve meteorological services

throughout the world (see box, p. 268).

The United States has also reached bilateral and

multilateral agreements in the form of Memoranda of Understanding with foreign governments

1 qFigure provided by National Environmental Satellite, Data, and

Information Service of NOAA.
Ch. 7—Remote Sensing From Space ● 2 6 5

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

83, / I

60

45

o

- 1 5

- 3 0

- 4 5

-60 -

- 7 5 “

I

- -

I I \ I 1

- 5 30 30 60 90 120 150 180 210 240 270 300 330 360

NOTE: A geosynchronous satelllte In an orbit lncllned 65° to the Equator would trace out a dally figure eight pattern like the one Illustrated above

A geosynchronous satellite in an orbit inclined 65° to the Equator would trace out a daily figure-eight pattern like the one illustrated above.

SOURCE: N Johnson, “The Soviet Year in Space, 1983,” Teledyne Brown Engineering, January 1984, p. 24.

concerning use of the U.S. Data Communications

System. In order to be included in the system,

foreign projects must be of interest to a U.S. Government agency and must meet certain technical criteria for system use. In some cases, data

included in this system may be treated confidentially by the United States. However, all data in

the system are available to NOAA.

As mentioned earlier, the United Kingdom has

provided the Stratospheric Sounding Unit for the

U.S. TIROS-N polar orbiter. The French provide

and operate the ARGOS data collection system

for the NOAA polar orbiter. These arrangements

make the polar-orbiting satellites much more capable than they would be otherwise.

Finally, under an agreement among the United

States, Canada, France, and the Soviet Union, the

polar orbiting satellites are being used for search

and rescue of downed aircraft in remote areas

(COSPAS/SARSAT–see app. A).

Data Products and Service

This section summarizes the data products and

services derived from meteorological satellite data

that are routinely available through NOAA. All

of these data products are available to users

around the world either for free (through radio,

TV, or telephone) or for purchase on a nondiscriminatory, cost-reimbursable basis from NOAA.

Table 7-2 lists the categories of U.S. domestic

users of such data. The categories of international

users are similar.

Weather

Table 7-3 summarizes the major weather-related products provided by NOAA. In addition,
—-. . -— — - - . . .

266 ● International Cooperation and Competition in Civilian Space Activities

Photo credit: European Space Agency

Visible wavelength image of weather patterns on Earth, as taken by Meteosat, the European geostationary meteorological

satellite. Meteosat was developed and built by the European Space Agency.
Ch. 7—Remote Sensing From Space ● 267

Table 7-1. Countries With APT/HRPT Reception Capabilities

Countries with APT facillties:

Afghanistan

Algeria

Angola (status unknown)

Antarctica (USN res.)

Argentina

Australia

Austria

Azores

Bahamas

Bahrain

Bangladesh

Barbados

Belgium

Bermuda

Bolivia

Brazil

Bulgaria

Burma

Cambodia (status unknown)

Cameroon

Canada

Canary Islands

Chile

Colombia

Costa Rica

Curacao

Czechoslovakia

Denmark

Dominican Republic

Ecuador

Egypt

El Salvador

Ethiopia

Fiji

Finland

France

French Guiana

Gambia

German Democratic Republic

Germany, Federal Republic of

Ghana

Greece

Greenland

Guadaloupe

Guatemala

Guyana

Honduras

Hong Kong

Hungary

Iceland

India

Indonesia

Iran

Iraq

Israel

Italy

Ivory Coast

Japan

Jordan

Kenya

Korea (South)

Kuwait

Madagascar

Malaysia

Mali

Malta

Martinique

Mauritania

Mauritius

Mexico

Mongolia

Morocco

Mozambique

Nepal

Netherlands

Netherlands Antilles

New Guinea

New Zealand

Nicaragua

Nigeria

Norway

Oman

Pakistan

Papua New Guinea

Paraguay

People’s Republic of China

Peru

Philippines

Poland

Portugal

Romania

Saudi Arabia

Scotland

Senegal

Seychelles

Sierra Leone

Singapore

Somalia

South Africa

South Yemen

Spain

Sri Lanka

Sudan

Surinam

Sweden

Switzerland

Syria

Tahiti

Taiwan

Tanzania

Thailand

Trinidad and Tobago

Tunisia

Turkey

Union of Soviet Socialist Republics

United Arab Emirates

United Kingdom

United States

Upper Volta

Uruguay

Venezuela

Viet-Nam, Republic of (status unknown)

Yugoslavia

Zaire

Zambia

Zimbabwe

Countries with HRPT facilities:

Bangladesh

Belgium

Brazil

Canada

Czechoslovakia

Denmark

France

Germany, Federal Republic of

Greenland

India

Indonesia

Iran

Italy

Japan

Korea (South)

Malaysia

Mongolia

Netherlands

New Zealand

Norway

People’s Republic of China

Saudi Arabia

Singapore

South Africa

Sweden

Switzerland

Taiwan

Thailand

Tunisia

Union of Soviet Socialist Republics

United Kingdom

United States

Yemen (South)

SOURCE” National Oceanic and Atmospheric Administration.
— -. — . . .- . -. —

268 . International Cooperation and Competition in Civilian Space Activities
Ch. 7—Remote Sensing From Space 269

the

satellite, make up the heart of the World Weather WkK1. Metsat data received in the

United States support the National Weather Service, the of Defense, and international aviation. Most of the data on the Global Telecommunication & System come from countries other than the

United States.** , . .

In collaboration with the International Council of ~ie<ptl~~ LJaiO~$, the WMC) established the Global

Atmospheric Research Program (GARP) to develop for large-scale atmospheric data

gathering. The principal experiment of this kind was the F@tKb4RP Global Experiment (FGGE), held

in the late 1970s, which prompted extensive nat[onal and [@emotional planning for development of

meteorological systems. The WMO was assisted in this coa&?atlve effort by an informal forum of representatives of governments and organizations praposit&aU%mch geostationary meteorological satellites, the Coordination of Geostationary Meteoro!ogicai (CGMS), This group was effective in

coordinating technical characteristics and operational pr@@qres ofsystems as well as assuring similarity of data transmissions and platform data collection proc~+wes. The activities of these organizations

led to support of the FGGE in 1978 and to the current glt@a’1 meteorological system.

.,

**’’Satellite Systems in Support of WMO Programrnes and Joint Programmed Wkh Other International (3qi@zations,” prepared by the WMO

for Unispace-82, Geneva, January 1982, pp. 20-21.

National Weather Service (NWS) (table 7-4) Table 7-3.—Derived Meteorological

combines satellite data with other weather data Satellite Productsa

to develop weather forecasts designed to be useful to a variety of commercial interests, including ● Soundings —Temperature profiles from the surface

through the stratosphere

aviators, farmers, fishermen, fruit growers, and Sea Surface Temperature—Global and regional sea

surface temperature and water mass analyses

Table 7.2.—Domestic Users of Meteorological

● Ice—Ice analyses of the polar regions and Great Lakes

Satellite Data

● Vegetation index — Measure of how “green” a target

area appears.

● Rainfa’11“ Estimates

●

●

●

●

●

●

●

●

●

●

●

●

NOAA

—National Weather Service Centers and Forecast

Offices

—National Ocean Service

—Office of Research

Department of the Interior

—Bureau of Land Management and Reclamation

—Water Resources Division

Department of Agriculture

—Soil Conservation Service

—Forestry Service

—Foreign Agriculture Service

NASA

Department of Defense

Agency for International Development

Department of Transportation

National Science Foundation, National Academy of

Science

News media

Commercial users

—Offshore drilling operations

—Ship routing

—Agricultural producers

—Commercial and general aviation

—Vessels at sea

—Fishing industry

Universities

Private individuals

 Hurricane Classification

● Cloud Motion Winds

. Satellite Interpretation Messages

● Tropical Storm BulIetins

 Cloud Top Height Data

aThese products are available in a variety of forms e g , charts, broadcast messages, and imagery

SOURCE: National Oceanic and Atmospheric Administration.

Table 7-4.—National Weather Service Hurricane,

International Aviation, and Marine Forecast Programs

● Hurricane forecasts and warnings

. International aviation weather services

—Area forecasts

—Inflight advisories (hazardous weather)

—Computer flight planning forecasts

● High seas weather services

—Weather, waves, currents, and sea ice forecasts

—Navigation and operations support

—Forecasts and warnings for U.S. coastal and offshore

waters

—Tsunami warnings and advisories

Source: National Oceanic and Atmospheric Administration. SOURCE: National Oceanic and Atmospheric Administration.
- .— — —— - — . —. -- .- -- - -— --

270 . International Cooperation and Competition in Civilian Space Activities

commercial shippers. The broadest category of

weather data users are the millions of ordinary

citizens who tune in to or read the daily forecast

for guidance in preparing for work and recreation. NOAA and NWS also provide special warning of hurricane, tornado, and other severe

weather conditions.

Land and Ocean

Meteorological remote sensing is not limited

solely to weather applications, as the sensors can

also measure important land and ocean phenomena throughout the world. Using data derived

from channels 1 and 2 of the polar-orbiters’

AVHRR to sense visible and near-infrared radiations, the U.S. Department of Agriculture, as well

as the United Nations’ Food and Agriculture Organization and private value-added corporations,

are able to monitor and analyze global crop conditions (see later section on market for land remote sensing data). Identification of urban “heat

islands” sensed by the High-Resolution Infrared

Sounder assists planners in monitoring metropolitan industrial and population growth. NOAA provides analyses of meteorological satellite observations of snow and ice as both hydrological and

oceanographic products.

Hydrological products using the AVHRR and

GOES-VISSR instruments include the following

at 1 km resolution: snow coverage observations

of selected river basins; regional snow coverage

analysis for selected regions of the world; and a

northern hemisphere snow and ice chart. These

products are valuable for assessing water runoff

potential.

Products for oceanographic use include ice

charts produced from AVHRR readings for the

polar regions and a combination of AVHRR and

geostationary VISSR imagery for the Great Lakes

region, both to accuracies of 5 km. These analyses are particularly useful in forecasting the limits

of the shipping season in particular regions and

commercial ship routing, as well as for U.S. Navy

and U.S. Coast Guard missions.

Global sea surface temperature (SST) observations are received daily from AVHRR infrared data

and the High-Resolution Infrared Radiation

Sounder (H IRS-2) data aboard the polar orbiters.

Accuracies of 1.5o C are achieved over 70 percent of the oceans. Regional SST charts, distributed through NOAA Satellite Field Service Stations in Miami, Washington, DC, San Francisco,

and Anchorage, are particularly useful to commercial fishermen for locating certain species of

fish. Ocean current analyses include thermal front

analysis of the waters off the west coast of the

United States, which also benefits fishermen by

identifying nutrient-rich ocean upwellings attractive to fish. Observations in the infrared using

AVHRR can give an accuracy of 5 km for locating frontal zones. Ocean current navigation

is assisted by analyses of polar-orbiter AVHRR

infrared and GOES-VISSR imagery of the Gulf

stream and “loop currents” in the Gulf of Mexico. The thermal boundaries of these currents and

their eddies can be determined with an accuracy

of 5 km, which allows fuel savings and reduces

hazards for fishing and shipping interests. All of

these data products are available for purchase on

a nondiscriminatory cost-reimbursable basis from

NOAA to users around the world.

Market for Metsat Equipment

and Services

The market for civilian metsat equipment and

services can be divided into three categories: the

space component, ground station equipment,

and various services related to reception and data

distribution.

Satellite Manufacturers

The primary U.S. manufacturers are Hughes

Aircraft Corp., which has built the U.S. (GOES)

and most of the Japanese (GMS) geostationary satellites,15 and RCA Astro-Electronics, which has

built the NOAA-N series of polar orbiters.lb The

General Electric Corp. built the Nimbus series of

research satellites for NASA.

The GOES satellites (4-6) cost approximately

$15 million apiece and are designed to last about

5 years.17 Replacement satellites (GOES-G and

ISThe GMS.2 and GMS-3 satellites were built by Hughes and Nippon Electric Corp.

1 GRCA also bu i Ids the DMSP satellites for DOD.

1 zHowever, GOES-5 lasted only 3 years. GOES4 failed even

sooner.
Ch. 7—Remote Sensing From Space ● 2 7 1

Sixday normalized vegetative index composite made with data from

w

Photo credit; ~arfonal Oceanic and Atmosjmerlc Adrmnisfration

instruments aboard the NOAA-N series polar orbiter.
 . . . .

272 ● International Cooperation and Competition in Civilian Space Activities

GOES-H), built by Hughes, are expected to cost

about $50 million and will be designed for a similar lifetime. Future satellites in the series, which

will be much more capable, will likely cost about

$100 million apiece. Two GOES satellites are necessary for complete coverage of the United States.

The NOAA-N polar orbiters (H, 1, J) cost approximately $45 million but future models will cost

about $100 million. Each polar orbiter is designed

to last 3 years and two are normally orbiting at

any one time.

The European (Meteosat) geostationary satellites, which constitute the satellite portion of

Eumetsat, were built by a consortium headed by

the French firm Aerospatiale.18 Two Meteosat satellites have been launched since 1977. Although

Europe has no polar-orbiting system, the United

Kingdom and France contribute sensors to the

U.S. polar orbiters.

Satellites

For several reasons, the overall market for

meteorological satellites or for individual sensors

is likely to remain small and competition highly

limited. First, because the complete international

geostationary system gives rather good coverage

of the world as it is, no sales to countries that do

not presently own a system are likely. * Second,

because satellites are owned by national governments, countries will tend to purchase satellites

from their own vendors.

● The United States. GOES G and H are planned

for delivery in late 1985 and mid-l986 respectively. The GOES-Next series of advanced geostationary satellites (five are planned) will be

needed in 1989 and beyond, but have not yet

been ordered. NOAA-G is planned for launch

in 1985. The Advanced NOAA series of polarorbiting satellites are also planned but have not

yet been ordered.

18The other ~ember~ of the ~on~ortium ~~~ Matra (France), IGG

(United Kingdom), Marconi Space and Defense Systems (United

Kingdom), Messerschmitt-Boelkow-Blohm (Federal Republic of Germany), ANT (Federal Republic of Germany), ETCA (Belgium), and

Selenia (Italy).

*lf China proceeds with its present plans to launch a geostationary

and a polar-orbiting satellite, it will likely provide its own satellites

as part of its effort to develop a capacity in space technology.

●

●

●

Japan. It plans to launch three additional GMS

satellites before the end of the century. 19 As

noted, it purchased major portions of its previous geostationary satellites from Hughes Aircraft Corp. In the future it may attempt to build

its own, or consider purchasing its next satellite from Europe.20

Europe. The third Meteosat satellite is scheduled for launch in an Ariane 4 test flight in July

1986. Three more satellites and parts for building a backup satellite are now on order, and

are scheduled for launch in August/September

1987, August 1988, and 1990. The market for

Meteosat satellites, which are comparable to

the GOES series, is essentially closed to U.S.

suppliers.

International systems. The Europeans and the

Japanese may contribute to an international

polar-orbiting system, in which case, individual countries will contribute instruments or

other subsystems to the system (see section

below on issues).

Ground Stations

The primary characteristic of the metsat ground

equipment market is its relatively small size. Yearly international sales are extremely difficult to

quantify, but representatives of several U.S. firms

interviewed by OTA agreed that total yearly sales

amount to less than $20 million, more than half

from U.S. firms. Total worldwide investment in

metsat ground receiving stations now equals at

least $200 million.

Ground stations consist of the relatively inexpensive APT station (approximately $40,000 to

$55,000), the more expensive HRPT station (approximately $0.5 million to $1 million) and any

auxiliary data processing equipment. U.S. ground

1 gACCOrdirlg m current Space Council and NASDA plans, Japan

will launch GMS-4 in 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, ”

Aviation Week and Space Technology, june 25, 1984, pp. 151-57.

ZOLast year, European corporations offered to build a replacement

satellite for the japanese patterned after their own meteosat series.

The price for the satellite, not including possible modifications to

suit it for operation over japan, is about $30 million. The offer included an additional $30 million to $32 million to launch it on an

Ariane launcher. See “Europe Offers Weather Satellite to japan,”

Aviation Week and Space Technology, july 2, 1984, pp. 21-22.
Ch. 7—Remote Sensing From Space . 273

equipment manufacturers also supply receivers

for a variety of applications, including civilian and

military communications, military meteorological

applications, intelligence, and command and

control; supplying metsat stations and associated

data processing equipment is a small part of their

total business.

Foreign suppliers of ground station equipment

include MacDonald Dettwiler Association, Inc.,

of Canada, SEP of France, MBB of West Germany,

and NEC of Japan. They compete directly with

U.S. firms abroad. U.S. firms compete well in the

international market because of superior technology. In the past they have been supported in selling to the developing countries by the involvement of NASA, NOAA, and the U.S. Agency for

International Development (AID) in extending the

use of metsat technology.

There is little market in the United States for

additional ground receivers because of easy access to processed data from the National Weather

Service, Except for replacement items, most future market expansion will be in the developing

world. However, developing countries already

own a large number of installations and their

future purchasing power is highly dependent on

foreign aid programs, especially for the more expensive H RPTs. Technology transfer restrictions

are not a problem, even for the high resolution

equipment, because these receivers are not capable of conversion for use with military systems.

The foreign commercial market is dominated

by foreign suppliers. Many of the purchases by

Third World countries are sponsored by WMO

through the World Weather Watch. In these instances, supplier selection is based on the usual

purchase considerations, including lowest cost,

best technology, and local and international politics. Where foreign aid is used, supplier selection will be heavily influenced by the donor country. The donor’s influence can be felt either

informally, through recommendations, or more

formally, through specifications set to favor the

donor country’s technology. Selling to some foreign governments can be difficult because they

often do not release enough information to allow

a U.S. company to bid responsibly. Sometimes

it is possible to obtain information through other

U.s(

part

firms that are successful bidders on another

of the project (e.g., the satellite builder).

Meteorological Satellite Issues

What Role Might the Private Sector

Play in Enhancing the Utility of U.S.

Meteorological Satellite Systems?

Suggestions a few years ago that the U.S. meteorological satellites might be transferred to private ownership raised a number of concerns

about the domestic and international effects of

such a policy. In March 1983, the Reagan Administration announced that it would seek to transfer both the meteorological and land remote sensing satellite systems to the private sector. This

proposal was the result of an offer from COMSAT

Corp. to purchase the Landsat system from the

Government if the meteorological system was

also included .21 Although most aspects of this

issue have been resolved in favor of continued

Government operation of the metsat systems, the

related principle of encouraging private sector involvement in space makes continued discussion

of the issue appropriate. The following key concerns relate directly to the transfer proposal:

● Data distribution policy. In order to prepare

for the eventuality that metsat data would

be sold through a private corporation, the

Administration began to explore the feasibility of charging for metsat data. Tentative and

unofficial suggestions by U.S. officials in the

spring and summer of 1983 that the United

States might begin to charge other nations

for these data were met with warnings from

those countries22 that the United States was

tampering with well-established, long-term

practices and that other countries might reciprocate in kind. These nations felt that such

a change of policy would introduce an unZISee statement of Joseph V. Charyk, of COMSAT before the Subcommittee on Space Science and Applications of the House Committee on Science and Technology and the Subcommittee on

Science Technology, and Space of the Senate Committee on Commerce, Science, and Transportation July 23, 1985. COMSAT argued

that if both systems were operated by a single entity, certain economies inherent in system operation, and sales of metsat data, would

allow it to build the market for Landsat data while charging roughly

what the Government was charging for Landsat data.

22’’ Satellite Storm Ahead, ” Nature, vol. 304, p, 202, 1983.
274 ● International Cooperation and Competition in Civilian Space Activities

●

●

●

necessary and potentially destructive competitive element into a smooth functioning

cooperative arrangement. Because the United

States receives more data through membership in WMO than it supplies to the rest of

the world, charging for metsat data would

also result in a net cost to the United States.

In part because of the outcry from U.S. users

of foreign data (especially the Department

of Defense (DOD)) as well as from Congress, 23 the Administration drew back and

subsequently reaffirmed earlier commitments to supply meteorological data freely

and free of charge to users throughout the

world (except for certain special products

that are priced at cost).

Contributions to and from the global system. As noted earlier, the United States has

been a member and strong supporter of the

World Meteorological Organization since it

was founded in 1947. Transfer of metsats to

private ownership would have complicated

U.S. arrangements with WMO and, in the

absence of a formal organization such as

INTELSAT or INMARSAT for managing a global meteorological satellite system, a U.S.

private firm might have found it extremely

difficult to work with the meteorological

agencies from other governments.

Reduction of service. In testimony before

the Senate Subcommittee on Science, Technology, and Space in August 1983, representatives from several industries that depend heavily on weather data, including

agriculture, aviation, forestry, and marine industries, expressed their reservations about

the proposed transfer. They felt that the quality and quantity of service would suffer. Similar concerns were expressed to members of

the House Subcommittee on Natural Resources, Agriculture Research, and Environment.

System hardware. Although the specifications of the meteorological satellite systems

are set by NOAA in response to Government

and private sector needs, private firms have

a major role in designing and building the

ZJfjOth HOUSE Concurrent Resolution 168, Sept. 19, 1983, and

Senate Concurrent Resolution 67, Sept. 19, 1983; 98th Cong., 1st

sess., expressed Congress’ opposition to sale of metsat data.

●

systems’ components. In the future, NOAA

might be encouraged to make space available on its satellites (on a fee basis) for instruments that serve particular needs of the private sector and that would be provided by

private firms for profit-making data services.

In addition to serving domestic needs, such

instruments would also be of interest to foreign customers.

Development of market for metsat data

products. In addition to their use in daily

weather forecasts from the National Weather

Service, data from meteorological satellites

support a small, but growing industry devoted to converting data supplied by NOAA

to information for a wide variety of public

and private interests. These specialized value-added firms provide services as varied as

predicting severe impending weather for the

benefit of specialized groups, or predicting

the best ocean routes for international shipping. Value-added firms have learned how

to process metsat data conjointly with land

remote sensing data to predict crop yields,

both domestically and abroad.24 Such information products are expected to be used by

the value-added industry to expand the market for data sales from land remote sensing

satellites. As the value of these services for

metsat data becomes more widely known,

this industry is likely to grow.

As a result of these and other considerations,

Congress amended appropriations bill H.R. 3222,

to prohibit the sale or transfer of the meteorological satellite systems to the private sector. On

November 28, 1983, President Reagan signed this

bill into law (Public Law 98-1 66), thereby reaffirming that the U.S. meteorological satellite systems

would remain in the public sector.25

In order to provide appropriate service to data

users, NOAA funds limited internal and university research to find new ways to utilize metsat

IAsee, for example, t?prnotp Sensing and the Private Sector, op.

cit., app. D. The results of much of this work were reported at a

NOAA-sponored conference, “NOAA’s Environmental Satellites

Come of Age,” Mar. 26-28, 1984, Washington, DC.

251n addition, the Land5at commercialization Act of 1984 (pub -

lic Law 98-365) contains a provision that specifically prohibits sale

of the meteorological systems. These actions reflect the strength

of congressional opposition to the sale of any part of the meteorological satellite system.
Ch. 7—Remote Sensing From Space ● 275

data.26 In addition, NOAA provides some specialized value-added services and products (e.g., fruit

frost warnings or ocean surface temperatures

charts) that might in time be provided profitably

by private firms, using the initial satellite weather

data as the input. As users gain more experience

with using metsat data and linking them to other

information sources, it will be important for the

Government to avoid competing with the private

sector in providing value-added data products,

and to find ways to motivate the private sector

to provide such services.

What Level of Service From the PolarOrbiting Satellites Is Appropriate?

In its effort to reduce the costs of operating the

meteorological satellites, the Administration has

attempted to move to what is essentially a single

polar-orbiting system, thereby saving some of the

cost of the second satellite, and a percentage of

the operating costs of the entire system. Eliminating one of the polar orbiters would reduce the

coverage of the system from once every 6 hours

to once every 12 hours for a particular spot on

the Earth. For most of the continental United

States, a reduction in service would not cause a

serious decline in the ability to predict future

severe weather. In those areas, conventional data

collection systems and the geostationary satellites

provide sufficient information. For the Pacific

coast, Hawaii, Alaska, and the Pacific Trust Territories, the 6-hour repeat coverage that two polar-orbiting metsats supply is extremely important

for timely warning of rapidly changing weather

conditions (fig. 7-1 O). None of these areas has access to surface data for the predominately westto-east weather patterns.27

As one observer noted,28 having a second satellite for backup is also important. Experience

ZeN@M spends about $1.25 million, primarily internally, to develop new products that will use both Landsat and metsat data for

agricultural and other renewable resource applications. In addition, it funds R&D (approximately $1 million) at about 6 universities to find new applications for metsat data in a variety of disciplines

including severe storms, climate studies, and mesoscale

meteorology.

zzBecause the primary weather flow i n the northern hemisphere

is from west to east, information gathered to the west of a geographic

area is especially important for weather predictions.

28 Richard j, Re~, statement before the Subcommittee on Science,

Technology and Space of the Senate Committee on Commerce,

Science, and Transportation, August 1983.

with failures aboard Landsat 4 and metsats has

demonstrated that even relatively simple satellite subsystems may fail in the harsh conditions

imposed by launch or the environment of outer

space. If only one polar orbiter were in service,

and it failed, there wouId be no service for a period from the civilian satellite.29 When NOAA’s

GOES-West failed in November 1982, well before

it was scheduled to be replaced, NOAA was

unable to replace it until June 1983. Only one

GOES satellite is now in operation, the GOESEast satellite having failed in July 1984; its replacement cannot be launched before late 1985 or

early 1986.

Operating only one polar orbiter would also

reduce the data available to the military. Though

it has its own system of meteorological satellites,

the military makes extensive use of the NOAA

system, both to provide data at different times

of the day, and to act as an emergency backup

to the military system. In the past, the military

has had to depend from time to time on the civilian systems for critical weather information.

Although dropping one of the polar-orbiting

satellites would not change the form of our cooperation with other nations, such a course of

action would significantly reduce the amount and

quality of data the United States can supply to

other nations for predicting weather conditions.

other nations that depend on these data and

have purchased receiving stations have expressed

dismay that the United States might operate only

a single polar orbiter. Furthermore, the United

States would not save much money because the

cost of operating two polar satellites is very little

more than the cost of operating one. NOAA estimates it would save between 10 and 20 percent

of its yearly satellite operational costs by dropping one. In round numbers, each copy of the

next series of NOAA polar-orbiting satellites,

which are designed to last 5 years, is expected

to cost about $100 million. so

ZgPreSumably, some data could be provided by the DOD DMSp

Satellites until a new civilian satellite was launched. However, the

data from the two systems are not quite compatible. The quality

of results from NOAA’s forecasting models are reduced accordingly.

Information from the GOES satellites cannot replace information

from the polar orbiting satellites (see boxes A and B).

JOThe precise unit cost will depend on the total number of satellites purchased at one time, the delivery schedule, and their capability. If service is reduced to one satellite, each one will cost more

than if two satellites were orbiting at all times.
- . . . — -— - — . . . .

276 . International Cooperation and Competition in Civilian Space Activities

Figure 7-10.—One. and Two-Polar Soundings

Two-Polar Soundings Map for O Hour Greenwich Mean Time

One-Polar Soundings Map for O Hour Greenwich Mean Time

The charts show satellite observational coverage for a 6-hour period centered at the synoptic obsewation time of O hour Greenwich

mean time.

SOURCE: National Oceanic and Atmospheric Administration.
Ch. 7—Remote Sensing From Space . 277

Reducing to one polar orbiter would also have

had the effect of reducing our commitment to cooperation with Canada, France, and the Soviet

Union in the COSPAS/SARSAT Search and Rescue Program (see app. A). The SARSAT receivers,

built by France, are carried on the polar orbiters.

The optimum system calls for a total of four instruments, one on each of two Soviet polar-orbiting metsats and one on each of two U.S. polar

orbiters. Until recently this important international cooperative program was in jeopardy. In

October 1984, after considerable debate over the

implications of the decision, the United States

signed an agreement with the three other primary

participants to enter into operational phase of the

project, which would extend through 1990.3

1 The

Administration was at first reluctant to sign the

agreement because it means maintaining a two

polar-orbiter system, or building another satellite to carry the emergency beacon. However,

the system seems to have proved its worth, having contributed to saving nearly 400 lives since

it began experimental operation in September

1982. Hence the Administration yielded to congressional and other pressure to maintain the

program. Although the decision improves the

chances for maintaining a two polar-orbiter system, it still does not mean its automatic continuation, because it would be possible (for a cost) to

build and operate a dedicated satellite for the second beacon. This issue will require continual attention by Congress.

What Level of Cooperation With

Other Nations Is Desirable?

In part because of the decrease in the quality

of weather monitoring that would result from a

reduction from two to one polar orbiters, and in

part to share the costs of maintaining satellite

weather service, the Administration is exploring

the feasibility of establishing a formal cooperative arrangement with other nations. It has formally raised the question at two meetings of the

Economic Summit of Industrialized Nations32 and

J! See 1‘OMB jeopardizes U.S.-Soviet Satellite Accord, science,

Vol. 25, pp. 999-1000, 1984; “Sarsat/Cospas to Operate Through

1990,” Aviation Week and Space Technology, Nov. 12, 1984, p. 25.

32 For a discussion of various cooperative mechanisms, see ‘‘1 nternational Meteorological Satellite System: Issues and Options, ”

National Environmental Satellite, Data and Information Service, National Oceanic and Atmospheric Administration, Nov. 18, 1983.

has received favorable responses (see policy discussion below). In addition to meeting daily

needs for meteorological data and for sharing the

operating costs of the system among its major

users, a formal arrangement that would guarantee an internationally based two polar-orbiter system would increase each country’s long-term

ability to gather operational satellite data. It could

also go far toward assuring continuity in spatial

and temporal coverage and stimulating technological growth in member countries. 33 In short,

the benefits of establishing a more formal cooperative arrangement seem to be high. Such cooperation could be a major step in improving the

quantity and quality of weather-related information throughout the world. In addition, as the appendix on remote sensing in developing countries

suggests, the greater use a country makes of

meteorological satellite data, the more likely it

is to develop uses for land remote sensing data

as well.

Several drawbacks to a formal cooperative system

●

●

●

exist:

The United States would lose its unilateral

control (through NOAA) over the management of the system. Thus, the U.S. military

would lose its unilateral power to preempt

civilian satellite operations in time of national

emergency. Further, NOAA would also lose

the power it now has to alter routine operations to follow particularly severe or dangerous weather developments in the United

States. On the other hand, if the alternative

is a single polar orbiter, U.S. access to crucial

meteorological data (particularly for the military) would be lessened anyway.

Some technology might be transferred from

the United States to industrialized countries

which could then use it in economic competition with the United States.

An international organization might inadvertently become somewhat more cumbersome

and require more personnel to operate the

system than the current arrangement through

WMO now requires.

33 Department of Commerce news release, NIC 84-1 Z Dec. 121

1984.
-———— — — . . . . ———. —

278 . International Cooperation and Competition in Civilian Space Activities

The existence of INTELSAT and INMARSAT,

both truly international organizations (see chs.

3 and 6), and the existence of Eumetsat, the European regional organization, suggest that the organizational problems can be solved within reasonable cost goals. Technology transfer also need

not necessarily be a major threat. Most of the necessary technology is well understood and already

well within the capacity of the industrialized

countries. As these countries extend their capabilities, any technological gap is likely to shrink

over time, making the problem moot. Nevertheless, all of these concerns would have to be

weighed in deciding whether formal cooperation

is of overall benefit to the United States and, if

so, which form of cooperation would be most

appropriate (see policy section).

LAND REMOTE SENSING SYSTEMS

Land remote sensing in the form of aerial photography is nearly as old as the photographic

camera. Cameras have been flown on both balloons and aircraft. During World War II, aerial

photography developed into a powerful and vital

aid to tactical warfare. Well before the war, photographs taken from the special vantage point afforded by aircraft and balloons found use among

such customers as agricultural and land-use planners, archaeologists, foresters, geologists, and

geographers. By the early 1960s the interpretation of aerial photography had developed into

a small, but highly useful, discipline. With the development of special-purpose photographic

emulsions (e.g., infrared), advanced lenses, shutters, and other sensing devices (e.g., sidelooking

radar) remote sensing analysts now provide a

wider range of products for these customers.

Sensing from aircraft has limitations of coverage, high cost per unit area, as well as the difficulty of controlling lighting conditions. It is not

suitable for developing a global data base. In contrast, remote sensing from space possesses several properties that permit the development of

a unique global data base for resource inventory

and monitoring over time:

●

●

●

●

perspective over a range of selected spatial

scales;

selected combinations of spectral bands for

categorizing and identifying surface features;

repetitive coverage over comparable viewing conditions;

direct measurement based on one set of solar illumination conditions for a wide surface

area, data standardized from area to area

and from day to day;

● signals suitable for digital storage and subsequent computer manipulation; and

● accessibility over remote and difficult terrain

and across political divisions.

Although all of these characteristics contribute

to the potential utility of remote sensing from

space, the fact that data about Earth’s surface arrive i n digital form suitable for routine computer

manipulation is perhaps of greatest importance.

Data from space can be routinely combined with

other data to generate information products of

great utility,

The U.S. Landsat System

Land remote sensing from space for civilian

uses had its origins in a NASA program, begun

in 1964.34 After considerable theoretical study,

and research and testing of multispectral scanners and other instruments in aircraft, NASA

launched the first of five Landsat satellites in

1972.35 These satellites follow a polar orbit that

takes them over the same spot on Earth at the

same time of day every 16 days. The latest in the

series is Landsat 5, which was successfully

launched on March 1, 1984, after Landsat 4 began to fail (fig. 7-11). In addition to other experijqFOr an early policy and institutional history of the Landsat sYstem, see Pamela E. Mack, “Space Science for Applications: the History of Landsat, “ in Space Science Comes of Age (Washington, DC.:

Smithsonian Institution Press, 1981).

jSLandsat I was originally named Earth Resources Technology

Satellite (ERTS-1).
Ch. 7—Remote Sensing From Space ● 279

Figure 7-11 .—Landsat.5 Spacecraft

SOURCE: National Oceanic and Atmospheric Administration.

MfSSION: Collect remotely sensed muitlspectral land data broadcast data for recemt

.

at ground stations operalmg under formal agreements

ORBIT: 705-km sun synchronous 16 day repeal cycle

SENSORS AND FUNCTIONS:

o Multi-spectral Scanner (MSS): The MSS IS the Speclfted operational sensor

Swath width IS 185-km resolution IS 80-m

senso r

Wavelengths

(Km)

05-0 6

06-0 7

07-0 8

08-1 1

Primary Uses

Movement 01 sedlmenl laden water ctelmeauon of shallow

water areas

Cultural features

Veaetatlon boundary between land and water. Iandforms

Thematic Mapper (TM): The TM IS a NASA experimental sensor It WIII come

on-hne operationally after It has been proven by NASA and an appropriate

ground system has been constructed It IS desgnad to prowde 30-m resoluhon

except for 120-m resolution m the thermal infrared band

sensor

Wvehtgths

(~m) Primary Uses

045 - 052 Coastal water mappmg. soIl vegetaoon dlfferentlatlon

deciduous coniferous differentiation

052 - 060 Green reflectance by healthy vegetauon

063 - 069 Chlorophyll absorptmn for plant species dlfferentlatlon

076 - 090 Biomass surveys, water body dehneahon

1 55 - 1 75 Vegetation moisture measurement

1040 -1250 Plant heal stress management, other thermal mappmg

208 - 235 Hydrothermal mappmg

Pe~etratlon of atmospheric haze vegetation boundary

between land and water Iandforms

DIRECT BROADCAST: Broadcasts are prowded for ground stations which have

entered Into formal agreements covering the recelpl and dlsfnbutlon of these data

38-797 0 - 85 - 10 : QIL 3
— — — — .— - - - -- -- - - -

280 ● International Cooperation and Competition in Civilian Space Activities

mental instruments, each Landsat spacecraft has

carried a multispectral scanner (MSS), which has

a spatial resolution of 80 meters and senses in

four spectral bands (figs. 7-12 and 7-1 3). The

Landsat 5 spacecraft carries an MSS and a thematic mapper (TM) sensor (fig. 7-13, which has

a spatial resolution of 30 meters3b and seven spectral bands (fig. 7-14).

The Landsat system is composed of the spacecraft and associated command and control telemetry, ground receiving stations, and processing,

copying, storage, and distribution facilities. Landsat data are transmitted from the spacecraft in

digital form to ground stations, collected on tape,

corrected to remove radiometric and geometric

distortions, and sold through the EROS Data Center (Department of the Interior) at Sioux Falls, SD.

Data products are available in either image (photographic) form or on computer compatible tapes

(CCTS) suitable for additional processing by large

computers. Table 7-5 lists current and projected

prices for Landsat data products.

In addition to providing data from the Landsat

system to users around the world, NASA insti36Except for the 10.4 to 12.5 micron wavelength band which has

a spatial resolution of 120 meters.

Figure 7-12.–Cutaway View of the Multispectral

Scanning System

PtWTOMULTIPLIER PMOTOWOOE DETECTOR/PREAMP

TUBES (1S) \ /

SUN

SOURCE: National Aeronautics and Space Administration.

tuted a program in the mid-1970s to encourage

wider experimentation with the data, and issued

grants to a variety of State and local governments,

to universities and private nonprofit institutions.

As well as providing data free or at extremely low

cost to these users and to other Federal agencies,

the NASA program also developed computer software for processing the data.

System Development

NASA has a small continuing program of sensor

development for both optical and microwave (radar) sensors. Developmental models for these

sensors are to be flown on the Shuttle. There are

no plans for the Government to develop free-flying orbital systems in the near term. Both NASA

and NOAA are exploring the possibility of a polarorbiting platform as part of the U.S. effort in developing a permanently manned space station.

Such a platform is a good candidate for international development. 37

Table 7-6 lists the major sensors now under development by NASA. Until August 1984, NASA

had a program to develop a multispectral linear

array (MLA), similar to, but more capable than,

the French SPOT sensor. However, under pressure from the Office of Management and Budget

(OMB) to reduce overall spending, NASA decided

to cut this program, on grounds that it was leading

to an operational sensor rather than a research

tool. Although NASA is attempting to reinstate

part of this research, the United States now has

only a small near-term remote sensor development program (see issues discussion below).

NOAA has no program to develop sensors for

land remote sensing, though it has a small effort

in studying applications of metsat and Landsat

data.

Foreign Landsat Receiving Stations

As NASA developed the Landsat system, it encouraged other countries to use the system. Ten

countries now own operational receiving stations

(fig. 7-1 5). In return for a fee, these foreign staJTjohn H. McElroy and Stanley R. Schneider, “Utilization of the

Polar Platform of NASA’s Space Station Program for Operational

Earth Observations,” NOAA Technical Report, NESDIS 12, September 1984.
Ch. 7—Remote Sensing From Space . 281

Figure 7-13.—Landsat Bands and Electromagnetic Spectrum Comparison

.+, . . , ., -

~hematic mapper.

SOURCE: U.S. Geological Survey

Figure 7-14.—Thematic Mapper Sensor

SCAN MIRRO R SECONDARY MIRRO R

SECONDARY

ASSEMBLY ASSEMBLY

SCAN MIRRO R

\ D

ARRA Y

OOLER

MIRROR L

‘ \

PRIMARY Y

MIRRO R

ELECTRONICS BOARDS

ALIGNMENT AN D

w

FOCUS ASSEMBLY
. —. . . . . . . . — -

282 ● International Cooperation and Competition in Civilian Space Activities

Table 7.5.—Costs for Some Landsat Data Products

cost

Until October 1981– October 1983– February 1985–

Product October 1981 October 1983 February 1985 ?7?

Multispectral scanner (MSS) computercompatible 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):

MSS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $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

Sensor Sensor type Status Notes

Large Format Camera 30.5 cm focal length Flown on Shuttle flight 41-G, Used for high-reolution mapping

October 1984

Shuttle Imaging Radar

(SIR)

camera; stereo capability

Synthetic Aperture Radar

SIR-A

SIR-B

SIR-C

Pointing six-band focal

plane sensor

High spectral and spatial

resolution spectrometer

Flown on Shuttle, November

1981

Flown on Shuttle flight 41-G,

October 1984

Under development

Under development

Under development for

Shuttle flight in 1989/90

L-Band microwave

L-Band microwave

L-Band and C-Band microwave;

NASA is negotiating with

Germany to provide X-Band

capability in a cooperative

venture

Program terminated in August

1984; portions now reinstated

Planned eventually for

incorporation into space station

Multispectral Linear

Array Experiment

Shuttle Imaging

Spectrometer

polar~orbiting platform

tions receive Landsat data sensed over their region and sell or distribute them to local and foreign customers. Until fiscal year 1983, the yearly

ground-station fee to NOAA was $200,000, but

beginning on October 1, 1982, NOAA began to

assess a $600,000 fee. In addition to the fee, each

station pays a small distribution fee to NOAA for

the data it sells or otherwise distributes. By signing the Memorandum of Understanding with

NOAA, each station owner agrees to abide by

the same nondiscriminatory data policy that

NASA and NOAA have always followed and that

is now mandated by the Landsat Commercialization Act of 1984.

All Landsat receiving stations are capable of receiving MSS data. Some are also able to receive

the more sophisticated TM data as well (table 7-

7). Until the complete Tracking Data and Relay

Satellite System (TDRSS) is in place and working,JB

foreign ground stations will be the predominant

source of Landsat data for regions beyond the

U.S. receivers.

Foreign Systems

As noted earlier, except for limited distribution

of remotely sensed land data by the Soviet Union,

the United States has been the sole supplier to

the rest of the world. Other countries are now

developing land remote sensing systems. These

JBIJnlike Lancjsats 2 and 3, Landsats 4 and 5 carry no tape

recorders. They therefore depend on transmissions to ground stations as the satellites pass over, or to transmissions through the

TDRSS satellites. Only one TDRSS satellite is currently in place and

the demands on its time for other uses are great. The second TDRSS

satellite is scheduled for launch on the Shuttle in late 1985 or early

1986 and will increase the capability of the Landsat 5 satellite to

deliver TM data to users.
Ch. 7—Remote Sensing From Space “ 283

Figure 7-15.—Distribution by Foreign Ground Stations (as of Jan. 1, 1985)

SOURCE: National Oceanic and Atmospheric Administration.

foreign systems rely directly on experience and

technology their designers have gained from U.S.

R&D efforts as well as on indigenous capabilities.

They are designed primarily to be operational,

rather than R&D, systems. Some will be technically directly competitive with, but different from,

the current Landsat system; some will exceed

Landsat’s capacity to return useful data.39 The following summarizes briefly the characteristics of

the foreign systems. In order of planned deployment, they are:

● West Germany—Modular Optoekctronic

Multispectral Scanner (MOMS) —1984/85).

jgFor example, the French SPOT system will have higher re501u -

tion than is possible from the current Landsat system. It will also

have the capacity to return quasi-stereo data to the user. It will,

however, have fewer spectral bands, an important consideration ●

in comparing the competitive capabilities of different systems.

This instrument was flown on the Shuttle Pallet

Satellite (SPAS) developed by MesserschmittBoelkow-Blohm GmbH (MBB) aboard Shuttle

flight 7. MBB and the Stenbeck Reassurance

Co., Inc., together with the U.S. corporation,

SPARX, wanted to market selected 20-meter

resolution 2-color land remote sensing data

collected on Shuttle flights beginning in 1985.

However, they dropped such plans after NASA

informed them that, according to public Law

98-365, the data must be sold on a nondiscriminatory basis. NASA and MBB are holding continuing discussions over a separate venture that

would use the MOMS. The West Germans are

developing a stereoscopic sensor and have already tested a limited synthetic aperture radar

on Shuttle flight 9.

France—Systeme Probatoire d’Obsixvation

de La Terre (SPOT) -1985. Since 1978,
— — . . . .

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

Argentina . . . . . . Mar Chiquita

Australia . . . . . . . Alice Springs

Brazil . . . . . . . . . . Cuiaba

Canada . . . . . . . . Prince Albert

European Space

Agency . . . . . . Fucino, Italy

Kiruna, Sweden

India. . . . . . . . . . . H yderabad

Indonesiaa. . . . . . Jakarta

Japan . . . . . . . . . . Tokyo

Pakistan . . . . . . . [under development]

Peoples Republic

of Chinab

. . . . . Beijing

Saudia Arabia, . . [under development]

South Africa . . . . Johannesburg

Thailand . . . . . . . Bangkok

Comision Nacional de signed yes

Investigaciones Espaciales (CNIE)

Division of National Mapping, signed yes

Department of Resources and

Energy (DRE)

Instituto de Pesquisas Espaciais signed yes

(INPE)

Canada Centre for Remote signed yes

Sensing (CCRS)

European Space Agency (ESA) signed yes

National Remote Sensing Agency signed yes

(NRSA)

Indonesian National Institute of under negotiation

Aeronautics and Space (LAPAN) (expe~~ed in

1985)

National Space Development signed yes

Agency (NASDA)

signed yes

Chinese Academy of Science signed yes

signed yes

National Institute for signed yes

Telecommunications, Council for

Scientific and Industrial Research

(CSIR)

National Research Council of under negotiation yes

no

no

yes

yes

yes

yes

no

yes

yes

yes

yes

no

no

Thailand (NRCT)

aNOt currently operational.

bEXpeCted to starl operations, fatl 1985.

France (through the French space agency

CNES) has been planning the world’s first

commercial remote-sensing satellite service.

It expects to fly a series of four satellites. Although the first satellite will not be launched

until late 1985, it is currently preparing the

sales market through a French company (government-owned in part), SPOT IMAGE, S.A.

A Washington-based American subsidiary

called SPOT Image Corp. is now developing

the U.S. market for SPOT data. The U.S. corporation has flown a successful series of tests

from high-altitude aircraft over the United

States using sensors designed to simulate the

data that will eventually flow from the SPOT

system. Customers from U. S., private firms,

State governments, and the Federal Government have purchased data sets from these

flights. SPOT Image Corp. has an agreement ●

with the Canada Centre for Remote Sensing

to receive SPOT data from North America

at two stations (Prince Albert and Ottawa).

The SPOT satellite will carry pointable multispectral linear-array sensors capable of resolving images at least as small as 20 meters

in three wavelength bands. In addition, the

satellite will be capable of 10-meter resolution operating in a panchromatic mode.

These are higher resolutions than are possible on Landsat 5. Because the sensors are

pointable, they are capable of producing

quasi-stereo images. Although the system is

a commercial effort, the French Government

is spending a minimum of $400 million to

$500 million to develop the system. CNES

will pay for and build the second satellite in

the series; SPOT Image will reimburse CNES

from sales of SPOT data.

lndia-lRS-1985. This low-resolution “semioperational” land remote sensing satellite
Ch. 7—Remote Sensing From Space ● 285

●

●

Photo credit: @19S3 SPOT Image Corp.

Panchromatic simulated SPOT image of Washington, DC (10 meters resolution), taken July 7, 1983, from an airplane.

The SP~T satellite i: expected to be launched in “late 1985. -

will be built in India but launched by a Soviet launcher. It will carry solid-state sensors.

Japan Earth Resources Satellite (ERS-1)–

1991. Its primary mission will be to collect

information on renewable and nonrenewable natural resources, including minerals,

forests, and crops. ERS-1 will carry a synthetic aperature radar and an optical (visible and

infrared) radiometer. It will be launched by

an H-1 vehicle. Japan is also building a marine observation satellite (MOS-1 ) to be

launched in 1986 by an N-11 vehicle.

Brazil. Working on a moderate-resolution

land-sensing salellite to be launched in the

late 1980s.

Data Products and Uses

Land remote sensing data are put to a variety

of uses for resource mapping, assessment, and

management. 40 Table 7-8 lists the major categories of data users, table 7-9 lists the major customers for data. Figure 7-16 illustrates the broad

categories of major users and their relative share

of the data market. The EROS Data Center sells

data either in digital format (computer compatible tapes, or CCTS) or photographic imagery in

~For an emended discussion of potential customers and their data

needs see Remote Sensing and the Private Sector, chs. 4, 5, 6.

Table 7-8.—Categories of Foreign and

Domestic Users

●

●

●

●

●

●

●

Agriculture (Federal, State, and private): specific

sampling areas chosen according to the crop; timedependent data related to crop calenders and the

weather patterns

Forestry (Federal, State, and private): specific

sampling areas; twice per year at preselected dates

Geology and nonrenewable resources (Federal, State,

and private): wide variety of areas; seasonal data in

addition to one-time sampling

Civil engineering and /and use (State and private):

populated areas; repeat data required over scale of

months or years to determine trends of land use

Cartography (Federal, State, and private): all areas,

repeat data as needed to update maps

Coastal zone management (Federal and State):

monitoring of all coastlands at selected dates

depending on local seasons

Po//ution monitoring (Federal and State): broad,

selected areas; highly time-dependent needs both for

routine monitoring and in response to emergencies

SOURCE: Off Ice of Technology Assessment.

several sizes. For a special additional fee, customers may specify cloud-free scenes or other special

attributes. As the section on issues points out, the

largest potential market for land remote sensing

data products is for information products generated by processing and adding information to the

satellite data from other sources (so-called value-

-added products).
.. . . 

286 ● International Cooperation and Competition in Civilian Space Activities

Table 7-9.—Domestic Distribution of

Landsat Products

●

●

●

●

●

●

●

●

●

●

●

Department of Agriculture

Department of Defense

Department of the Interior

National Aeronautics and Space Administration

Intelligence community

Coast Guard

State planning and resource management agencies

Regional planning agencies

Academic community

Commercial users (e.g., foresters, mineral exploration geologists, engineering and consulting

companies)

Private individuals

SOURCE: Off Ice of lechnol~y Assessment.

. — .

Policy History of Land Remote

Sensing

Although the potential utility of images gathered by satellite of atmospheric conditions and

of the surface of the land and ocean were recognized by those conceiving the systems, until

recently few considered operating the systems as

commercial entities. However, as Federal, State,

and local governments, universities, and industrial firms began to work with the data from the

Landsat system, they realized that, at the prices

charged, 41 these data Were often a cost-effective

substitute for older (aircraft) methods of gathering Earth resources data. The digital format, wide

spatial coverage, and repeatability of the data

made possible new applications that could eventually increase the value of the information these

data provide. By the late 1970s, some observers

postulated that the data might eventually have

sufficient commercial value to attract private investment in a remote sensing system. However,

it was also clear that the known barriers of high

system cost, and technological and economic

risk, would have to be drastically reduced if private investors were to be interested in providing

a system comparable to Landsat, especially because the initial market for the data was thought

to be quite small (see section on issues).

The history of the Landsat system illustrates the

difficulties that may attend bringing a Government-developed applications system to opera- ———-—

Q! LancjSat data prices have never reflected the cost of operating

the system, much less the costs of developing the sensors in the

first place.

tional status, let alone to commercial status. The

current policy debate over land remote sensing

had its genesis in an interagency controversy over

who should develop and operate the Government system and what sensors it should contain.

In 1966, while NASA and other agencies were

experimenting with data derived from a variety

of sensors carried in aircraft, the Department of

Interior announced a program to fly its own operational satellite. NASA was convinced that considerable flight experimentation was needed with

sensors that would be carried on Apollo and Skylab missions. The Interior Department, however,

wanted to proceed more directly to operational

use of data from a satellite and to shorten the

lengthy process of research and development that

NASA was contemplating. Yet its specifications

for the appropriate sensor differed from those of

the Department of Agriculture, which wanted

greater spectral discrimination in order to detect

crop stress and other agricultural characteristics.

Both departments recognized the need to have

NASA design and build the satellite, but as they

would eventually derive the greatest use from the

data generated by the Landsat system, they

wanted control over the design of the system because they were aware that “the experimental

program would inevitably shape any operational

program.” 42

The Bureau of the Budget (BoB) was not convinced of the utility of the Landsat system compared to other data sources, and specified that

NASA do only research and development. It also

opposed purchase of equipment that would lead

to operational use of the system. As the system

was flight tested, NASA encouraged Federal,

State, and local agencies and private groups to

apply the data to their needs, in part to demonstrate to BoB that the data were beneficial. In spite

of continued opposition from BoB and its successor, the Office of Management and Budget

(OMB), NASA continued to involve data users,

both domestic and foreign, in planning for followon satellites and sensors and to encourage the

widespread use of the data. The result was a quasi-operational43 system, which only partially met

.—— —

42Parne[a E. MaCk, “Space Science for Applications . . . ,“ oP. cit.

QjCivi/ian Space policy and Applications, OTA, p. 13. Article I

also states: “The exploration and use of outer space . . . shall be

carried out for the benefit and in the interest of all countries. ”
Ch. 7—Remote Sensing From Space ● 287

Figure 7-16.—Customer

3,042 items

19%

Individuals

Profile of Landsat Digital and Imagery Products (shipped sales), Fiscal Year 1984

1

\

State and Local

Government 2°/0

34,964 frames

Individuals 5 %

State and Local

Government 3%

60/0

Individuals 1%

\

$2,221,253

Individuals 3 %

Government 3%

SOURCE: National Oceanic and Atmospheric Administration,
— — . .

288 “ International Cooperation and Competition in Civilian Space Activities

the needs of users. Even though the system has

now been transferred to NOAA, and is fully operational, it does not generate sufficient revenue

from customers (i.e., a market) to enable the

Landsat system to be transferred to the private

sector or be commercialized without sizable

subsidy.

Transfer of the Government’s civilian land remote sensing system to private hands was first

considered seriously by policy makers in the drafting of President Carter’s 1979 policy statement

on space, PD/NSC-54, which amplified the earlier

policy directives, PD/NSC-37 and PD/NSC-42. It

stated:

Our goal is the eventual operation by the private sector of our civil land remote-sensing activities. Commerce will budget for further work in

fiscal year 1981 to seek ways to enhance private

sector opportunities.44

This statement left open the speed and the means

of the transfer but, because it also committed the

United States to provide continuity of the data

flow from the Landsat system through the 1980s,

most observers assumed that transfer to the private sector would take place about 1990. The first

stage of that process was to transfer responsibility

for operational management of the Landsat program to NOAA. Transfer of the meteorological

satellite systems to private ownership was not envisioned by PDNSC-S4.

The Reagan Administration decided early in its

tenure to hasten the process of transfer, and announced “the intent of transferring the responsibility [for Landsat] to the private sector as soon

as possible. ”45 That statement, too, made no

mention of the meteorological systems. Later, in

March 1983, the Administration proposed to

transfer both the Landsat and the metsat systems

to private hands.4G Public Law 97-324 mandated

“’’Presidential Directive NSC-54,” Nov. 16, 1979.

‘sStatement of joseph Wright, Deputy Secretary, Department of

Commerce, to the Subcommittee on Space Science and Applications of the House Committee on Science and Technology, and

the Subcommittee on Science, Technology, and Space of the Senate Committee on Commerce, Science, and Transportation, July

22 and 23, 1981.

~Statement of Malcolm Baldrige, Secretary of Commerce, to the

Subcommittee on Natural Resources, Agricultural Research, and

Environment of the House Committee on Science and Technology, Apr. 14, 1983. As discussed earlier, in November 1983, Con-

(in Title 11) the Department of Commerce to commission studies and internal analyses to explore

and examine the issues raised by transfer of remote sensing from space to the private sector.47

None of these reports concluded that rapid transfer was in the best interest of the United States .48

In late 1983, however, the Administration began to draft a request for proposals designed to

solicit proposals from private industry to own and

operate the current Landsat system and any follow-on. Concurrently, the House Committee on

Science and Technology drafted a bill authorizing a phased transfer of the system to the private

sector, with the aim of eventually establishing a

profit-making satellite land remote sensing industry. On January 3, 1984, the Department of Commerce released its request for proposal (RFP). Seven proposals were received on March 19, 1984.49

It is significant that several of the proposers were

partnerships or consortia. Few single firms have

the breadth of experience and personnel to design, build, and operate a system as complex as

the Landsat system. After evaluating all the proposals in an initial round, in June the Department

of Commerce Source Evaluation Board (SEB)

found three proposers, EOSAT, Kodak/Fairchild,

and Space America, to be within the competitive range required by the RFP. After a second

round of evaluation, the Secretary of Commerce

selected Eastman Kodak and EOSAT for negotiations with the Department.

gress passed, and the President signed, appropriations bill H.R. 3222

(Public Law 98-166), which contained a provision preventing sale

of the Nation’s meteorological satellite systems to private hands.

The meteorological satellites will continue to be operated as a public

service.

47’’ Space Remote Sensing and the Private Sector: An Essay,” National Academy of Public Administration, March 1983, Department

of Commerce contract No. NA-83-SAC-066; “Commercialization

of the Land Remote Sensing System: An Examination of Mechanisms and Issues, ” ECON, Inc., April 1983, Department of

Commerce contract No. NA-83-SAC-O0658; “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

Abt Associates, Inc., Department of Commerce contract No.

NA-83-SAC-O0679.

qBThe assumptions upon which these analyses were based included: 1 ) maintenance of data continuity, 2) maintenance of U.S.

leadership, 3) Landsat-type technology, and 4) maintenance of international obligations.

‘gThese were: Earth observing Satellite Co. (EOSAT—a new company to be formed by RCA and Hughes Aircraft); Eastman Kodak;

Gee-Spectra Corp.; Miltope Corp. of Melville, NY.; Milton A. Schultz

of Williston, ND; Space Access Corp. of Marina Del Rey; Space

America Inc. See Space Business News, Mar. 26, 1984, p. 1.
Ch. 7—Remote Sensing From Space ● 2 8 9
— . . —— . . 

290 International Cooperation and Competition in Civilian Space Activities

The initial proposals from EOSAT and Kodak/

Fairchild included estimates of nearly $1 billion

in Government subsidies over a 10-year period

in order to take over marketing data from the current Landsat system and to build an advanced

new satellite system. EOSAT was prepared to fly

a refurbished Thematic Mapper on Landsat 6 and

7 and to develop and launch a more advanced

multispectral linear array (MLA) sensor on Landsat 8 and 9. Kodak’s proposal called for an entirely new design as a follow-on to Landsat 5 that

would move directly to MLA technology. The Department of Commerce found both proposals acceptable technically, but unacceptable from a financial point of view. It invited drastically revised

financial plans. Among other matters, the amount

of financial risk the two companies were willing

to accept was unacceptable.

During this process, H.R. 5155 was reported

out of the House Committee on Science and

Technology on April 3, 1984, and passed by the

entire House April 10.50 A similar bill (S. 51 55)

was under consideration by the Senate Committee on Commerce, Science, and Transportation

and passed the Senate May 8, 1984. After a conference and subsequent passage by both Houses,

the Land Remote Sensing Commercialization Act

of 1984 was signed into law (Public Law 98-365)

by President Reagan on July 17, 1984.

In addition to authorizing the commercialization of the U.S. land remote sensing program, and

providing for continuation of certain Government

Socommittee f@pOti 98-647 on the Land Remote-Sensing Commercialization Act of 1984, House Committee on Science and Technology.
Ch. 7—Remote Sensing From Space ● 291

functions, the Act is noteworthy for being the first

piece of major legislation that attempts to set out

the legal and regulatory framework for commercial space activity as required by the 1967 Outer

Space Treaty (Articles VI and IX). The box summarizes the major provisions of Public Law 98-365.

The complete Act is reproduced in appendix C.

The ultimate goal of the transfer of the results

of Government R&D to the private sector is to

create a self-sustaining business from all or part

of the technology so transferred, with the private

sector in full control (except for appropriate regulation) of further development and shaping of

the system and products. Realization of this goal

would constitute full commercialization of the

Government-developed technology. intermediate steps along the way to this end could result

in: 1 ) shared control of the technology by Government and the private sector; and/or 2) joint

continued development of the technology and

its products, through either subsidies, shared investment, or guaranteed Government purchase.

Such intermediate steps, in which the system

would receive significant Government subsidy,

have often been referred to as “privatization. ”

In passing Public Law 98-365, Congress decided to privatize the Landsat system by first authorizing the Secretary of Commerce to contract

with a private firm to market Landsat data as the

Government continues to operate the current system (Title I l). The Government will also provide

a subsidy to enable a private operator to build

a system that would provide data continuity for

a total of 6 years after the demise of Landsat 5.

Such legislation implicitly expects sufficient market for data to develop within 8 to 10 years to

enable a private operation to be self-sufficient.

Among other provisions, Public Law 98-365 authorized up to $75 million for fiscal year 1985 as

the first installment of a subsidy to aid the eventual commercialization of land remote sensing.

The law does not specify the total amount of subsidy necessary, as this was left to the Department

of Commerce to work out with a potential contractor. As these corporations were preparing to

revise their proposals to respond to the SEB’S concerns, OMB informed the Department of Commerce a subsidy was inappropriate. After considerable debate within the Administration, the two

agencies agreed on:

1 ) The run-out of Government cost for operating Landsats 4 and 5; plus 2) a maximum of

$250 million of new budget authority for the

commercial follow-on system .51

In August 1984, EOSAT submitted a revised

proposal that included only two satellites, both

using a Landsat-type sensor (TM), and which,

among other things, assumed that the Government would continue its research program in advanced sensors, to support the transition to a

more advanced system in the 199os. I n addition,

EOSAT included an escape clause that allowed

it to withdraw from the contract if sufficient market for data had not developed to support a commercial enterprise. Kodak Corp. declined to submit a revised proposal.

In mid-May 1985, the Department of Commerce announced that it had reached agreement

with EOSAT to provide $250 million plus Iaunch

costs (a total subsidy of about $290 million).

EOSAT agreed to build and launch two satellites

whether or not the market has developed to support a profit-making business. An Administration

request for $125 million ($75 million for fiscal year

1985 and $50 million for fiscal year 1986) to allow

EOSAT to begin the process of building Landsat

6 has recently been sent to Congress for action .52

International Relevance of Landsat

Because the Landsat satellite travels in a polar

orbit, which enables it to sense the entire surface

of Earth, data from the system necessarily have

international implications. Data from both the

Landsat and metsat systems have served as constructive instruments of U.S. foreign relations, For

example, these data have aided other countries

to map, manage, and exploit their own resources;

they have also raised the general level of awareness about growing environmental problems

throughout the world.

51’’ Report to the Congress (Public Law-98-365 ),” Department of

Commerce, September 1984.

5ZEOSAT proposed an escape clause in the contract to al IOW for

the possibility that, even with a vigorous marketing effort on its part,

insufficient demand for data would develop.
. . - — . - -- - — - -- -- - — — —

292 ● International Cooperation and Competition in Civilian Space Activities

Aircraft or balloons are clearly limited in overflight by national restrictions on sovereign airspace, but spacecraft have no overflight restrictions. According to international treaty, “Outer

space . . . shall be free for exploration and use

by all states.”53 This principle is understood by

the United States and most other nations to mean

that nations are free to place in orbit any satellite that does not violate other provisions of the

1967 Outer Space Treaty or other principles of

international law. This understanding has been

called the “open skies” principle; it is a fundamental principle of the U.S. space program. The

United States supports this principle54 in part by

making civilian remote sensing data available on

a nondiscriminatory basis to anyone who wishes

to receive them. Through AID, NASA, and NOAA,

the United States has been the principal force in

setting up foreign regional and national centers

capable of processing and interpreting Landsat

data. By integrating these data with meteorological and/or ground data of all kinds, these centers

aid developing countries coping with the enormous problems of environmental protection and

resource management.

Although the private sector is technically capable (given adequate financial incentives) of

providing the data promptly to meet the requirements of the Federal Government and other potential customers, commercial objectives may

conflict with certain U.S. foreign policy objectives. Constraints on a private firm that are sufficient to protect U.S. foreign policy objectives

could well make such an enterprise unprofitable

or require a large and continuing Government

subsidy to make the enterprise viable.

Equipment Market

In a manner similar to that for meteorological

satellites, the market for land remote sensing

equipment and services can be divided into three

categories: the space component, ground station

5JI gfji’ Outer Space Treaty. 8ecause of the U.S. example, the nondiscriminatory data distribution policy is now of impxtance to other

countries as well.

Sqjohn H. Gibbons, “International Implications of Transferring

the Landsat System to the Private Sector, ” hearing before the Subcommittee on Legislation and National Security of the Committee

on Government Operations, Sept. 28, 1983.

equipment, and services related to reception and

data preprocessing (excluding the value-added

industry discussed above).

Satellite Manufacturers

General Electric Corp. was the prime contractor for the Landsat 4 and 5 satellites, with Fairchild and Hughes Aircraft supplying significant

components. If the transfer of the Landsat system

to EOSAT is completed by appropriating the necessary subsidy, RCA and Hughes Aircraft Corp.

(the two participants in EOSAT) will likely build

most of the hardware (two satellites and associated system hardware), with other firms providing portions of it under contract.

The French firm Matra is the prime contractor

for the SPOT satellite. Major subsystems and software are provided by Aerospatiale and SEP. The

tape recorders are built by the U.S. corporation,

Odetics, Inc.

Ground Stations and Receivers

Many of the same firms that manufacture components of ground stations and receivers for

meteorological data reception also sell similar

equipment for land remote sensing. The major

differences are in the frequencies used for transmission and in the scale of investment for land

remote sensing stations. There are now 12 operational Landsat receiving stations and 2 under

construction. In addition, there are several SPOT

receiving stations under construction. In the next

3 to 4 years, because of the advent of the SPOT

system and the European ERS system (see section on ocean remote sensing) there could be as

many as eight new receiving stations begun

around the world. Several African countries, Iraq,

Pakistan, and Saudia Arabia have expressed interest in building receiving stations. Each new

station will cost between $10 million and $15 million. The balance of the market for ground stations, receivers, tape recorders, and the like will

be in replacements and in upgrading some stations to receive X-Band transmissions from TM

and from SPOT. For example, the Canadian Landsat receiving station in Prince Albert is being

equipped to receive SPOT data. The Canadian

firm MacDonald Dettwiler Association, inc. is

providing the equipment for this station and the
—

SPOT receiving station in Ottawa. MBB of Germany and NEC of Japan also supply ground station equipment. Yearly international sales in

ground receiving equipment may be as high as

$30 million.

Issues

What International Issues Are Raised by

Transfer to the Private Sector?

Congress and the Administration, in passing

and signing into law Public Law 98-365, have

agreed on the broad terms of transfer of the U.S.

land remote sensing system to the private sector. Although the current attempts to effect such

a transfer arose both from concern for reducing

the Federal budget deficit and from the philosophical conviction that the private sector could

provide those services more efficiently, the legislation also took into account the broader agenda of U.S. international relations. In general, the

successful transfer of Government-developed

technology to the private sector is a process that

must take place over time, and with strong support from the potential foreign and domestic customers as well as from the policy makers.

As the process of transferring the Landsat system proceeds, it will be important to monitor the

reactions of other countries to it, and to continue

to approach each of the following issues with imagination and a sensitivity to the real or perceived

concerns of other nations. Not only are the political sensitivities of other countries important to

the United States, foreign customers are necessary to the financial viability of a private Landsat

system. 55 In addition, the French SPOT system

wiII soon offer customers an alternative choice

of data sources.

The following discussion of international issues

is summarized from the OTA Technical Memorandum, Remote Sensing and the Private Sector:

Issues for Discussion :56

SsWhen projected foreign ground station feesare included in the

estimates of future income from a land remote sensing system, foreign sales could constitute as much as 39 percent of the revenue

from a U.S. system. See “Commercialization of the Land Remote

Sensing System: An Examination of Mechanisms and Issues, ” ECON,

Inc., Prepared for the U.S. Department of Commerce, contract No.

NA-83-SAC-O0658.

ShRemote sen5ing and the Private Sector: Issues for Discussion,

op. cit., ch. 3.

Ch. 7—Remote Sensing From Space ● 293

●

●

Data sales policies. Landsat data have always

been sold to all purchasers on a nondiscriminatory basis. In large part this policy was

originally chosen to support the U.S. “open

skies” policy and the use of space for peaceful purposes. In practice, selling data on a

nondiscriminatory basis has helped to blunt

criticism of other activities, such as the operation of classified surveillance satellites. It has

also demonstrated U.S. adherence to the

principle of the free flow of information. Although some private sector analysts* have

argued that owners of remote sensing systems should be allowed to set their own data

policies, Public Law 98-365 mandates the

policy of nondiscriminatory sales, on the

basis that the open skies policy continues

to be of importance to the United States.

Value-added services. Most of the revenue

earned from space remote sensing will be

earned by the companies that add value to

the data by processing, analyzing, adding

other information, and interpreting the primary data from space. The value-added

companies constitute a small, but growing,

specialized industry. The strength of commercial space remote sensing will depend

on a strong value-added industry. 57 Most remote sensing system operators would want

to participate in the value-added business.

The availability of high resolution land remote sensing data and the ability to analyze

them are potentially powerful tools for

resource development. Many developing

countries have expressed the concern that

allowing the system operator to offer value-

-added services might give the seller too

much power over the acquisition and distribution process. They are concerned that

the company or favored customers could,

by processing and interpreting these data

before delivering them to others, obtain economic leverage over countries that lack their

*Cf. Klaus Heiss, statement at hearing before the Subcommittee

on Science, Technology, and Space of the Senate Committee on

Commerce, Science, and Transportation, Mar. 22, 1984, pp. 83-88.

S7Fred rick B. Henderson, I I 1, “The Significance of a StrOng Value-

-added Industry to the Successful Commercialization of Landsat, ”

presented at the 21st Goddard Memorial Symposium, Mar. 24-

25, 1983.
-— .- —- - --- . . —

294 ● International Cooperation and Competition in Civilian Space Activities

●

●

own facilities and personnel to interpret the

data. Therefore, in order to maintain good

relations with developing countries, it may

be appropriate for the United States to restrict the private data distributor from entering into the value-added business, or to

regulate it closely to prevent such a company from exerting unfair economic leverage over others. Here, foreign perception of

economic harm may be as important as actual harm. As competition from foreign or

other domestic systems grows, it would be

possible to relax such restrictions.

Public Law 98-365 deals with this issue by

requiring the firm to “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” (Sec. 402(b)(6)). The terms of the

Act assume that antitrust legislation is sufficient in most cases to deter the corporation

from engaging in practices that would either

inhibit competition from other U.S. firms or

harm U.S. relationships with other nations.

If additional legislation is required, as more

experience is gained with private operation

of land remote sensing, Congress could take

remedial action.

U.S. cooperation with other countries. The

Landsat ground stations in 10 foreign countries constitute an eloquent statement of U.S.

leadership in successfully applying high technology for the benefit of all mankind. The

United States has also participated with industrialized and developing countries in research on applying Landsat data to critical

resource and environmental needs. It is

essential for the continuing research and

development of remote sensing technology,

and the growth of the data market, for the

United States to maintain its cooperative

basic and applied research programs with

other countries. [f the transfer is made, it

will be particularly important to assure that

appropriate Government funding is continued for imperative projects with developing countries.

International legal issues. Private ownership

of the land remote sensing system could lead

to suspicions that such data would be used

to enable interests outside a sensed country to gain a competitive advantage in knowledge of minerals or other nonrenewable

resources, or that information on crop conditions or military activities of states might

be sold preferentially to political adversaries.

Developing countries are particularly concerned about this possibility, because most

lack the indigenous ability to analyze the

data (see app. 7A). Some countries have

maintained that they should have priority access to data derived from sensing their territory, while others have argued that their

consent should be obtained before these

data are transferred to third parties.

The United States has consistently opposed

efforts to limit the distribution of Landsat

data, arguing that remote sensing is a peaceful and beneficial use of space in which the

restraints of national sovereignty have no valid application. Further, it has held that the

free collection and dissemination of primary

data and analyzed information is supported

legally and encouraged by the 1967 Outer

Space Treaty and article 19 of the U.N. Declaration of Human Rights. The U.S. policies

of nondiscriminatory data sales and free flow

of information have so far successfully deflected attempts to restrict the right to sense

other countries and sell those data to third

parties. Although attempts to restrict the flow

of remotely sensed data and information are

likely to continue in the U.N. and other international fora, the proliferation of civilian

remote sensing systems will make it more

difficult for such restrictions to gain ascendancy.

What Factors Are Most Important to

Market Growth of Land Remote

Sensing Data Products?

During its development, land remote sensing

was treated as a technology that eventually

“would create billions of dollars annually in benefits” to the public.58 Actually, benefits of this

magnitude have yet to materialize. To many, this

departure from stated expectations suggests that

58’’Commercialization of the Land Remote Sensing System: An

Examination of Mechanics and Issues, ” op. cit., p. 80,
Ch. 7—Remote Sensing From Space ● 295

the potential direct economic benefits of the

Landsat program were oversold by some in its

early days. I n part, large public economic benefits have not followed from Landsat development

because agencies have been slow to incorporate these data into their routine operations. sg

Government agencies have bought even less data

in recent years than they did at first.

Clearly, although overall data sales have been

low, the Landsat system still generates both public

and private goods.60 Data from the Landsat system have demonstrated to many domestic and

foreign users, both inside and outside Government, that these data can be highly effective in

meeting large-scale resource information needs.

As the policy section notes, transferring the

Landsat system to the private sector may enhance

this Nation’s competitiveness in land remote sensing by employing industry’s skills in marketing

and innovation to increase the overall market for

data and services. However, without substantial Government subsidy for a land remote sensing enterprise, transfer in itself is not likely to

result in a viable commercial business.61

If the initial phase of the transfer process in

which a private operator markets the data from

Landsat 5 proves successful, it will still be necessary to evaluate progress toward a self-sustaining

business. If Congress were to decide that sufficient progress had not been made, but the public good aspects were still high, it could still decide to operate a civilian system within the

Government. The most important single factor

that will determine the viability of a commercial remote sensing enterprise is market growth.

The development of the market for remote

sensing data and services will depend on four major factors: the price, availability, utility of the

data, and the ability of the information industry

to develop cost-effective ways of processing and

applying such data to the needs of users.

Sgsee for example, Remote Sensing and the Private Sector, Ch. 5.

60Remote sensing and the Private Sector, Ch. 4.

61Although OTA has not done a detailed analysis of costs associated with developing a land remote sensing system, it appears that

a subsidy (including launch costs) between $35o million and $500

million (depending on the financial risk the private firm is willing

to assume) might be needed to reduce the risk of commercial failure to an acceptable level. See also Remote Sensing and the Private Sector, op. cit., ch. 1.

●

●

Data prices. Even if it is possible to reduce

dramatically the cost of the system’s space

segment, the costs of handling and correcting the raw data are likely to remain high in

the near term because, with current data

processing technology, labor costs are a significant proportion of the overall expense of

producing corrected Landsat data. Technological advances in large-scale data processing, storage, and retrieval could reduce such

costs. Customers for primary data complain

that dramatic increases in data prices would

reduce their ability to purchase data in the

quantities that would be most effective.62 Figures on data purchases from the EROS Data

Center bear out their concerns. In October

1982, the beginning of fiscal year 1983,

NOAA increased the price of data dramatically (table 7-5). For example, the price for

an MSS computer compatible tape (CCT) increased 325 percent, from $200 to $650.

Knowing the price increase was coming, customers purchased more data in the last half

of 1982 than they would have otherwise (fig.

7-1 7). Although income from data sales increased in fiscal year 1983, the number of

MSS scenes purchased fell to 33 percent of

fiscal year 1982 sales (table 7-10). Sales

figures for fiscal year 1984 confirm the overall

downturn in data sales. Overall income from

sales has increased dramatically, however,

because OMB has required each agency to

account for its data receipts,b3 and because

NOAA has instituted special acquisition

charges for cloud-free images or other nonstandard requests. In fiscal year 1983, special

acquisition charges amounted to about $4

million, or 58 percent of the total income

from data sales. In fiscal year 1984, special

acquisition charges were $6,130,275 or 62

percent of total Landsat data income.

Availability of data. Customers cite two concerns over-the availability of data: 1 ) data are

‘zSee testimony in “Civil Land Remote Sensing Systems, ” Joint

Hearings before the House Subcommittee on Space Science and

Applications of the Committee on Science and Technology, and

the Senate Subcommittee on Science, Technology, and Space Committee on Commerce, Science, and Transportation, July 22, 23,

1981.

bJThe Fc3reign Agriculture] Service, for example, Was receiving

data directly from NASA through a receiver in Houston.
— ———. . -. . -

296. International Cooperation and Competition in Civilian Space Activities

350

300

250

200

150

100

50

Figure 7-17.—Sale of Landsat Imagery Frames and Digital

Imagery frames

I

al

(n

1972 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85

Calendar year quarters

Digital products

70 ‘ A \

60

50 ‘

b

A

40

30

A

20 ‘

10

1972 ’73 ’74 ’75 ’76 ’77 ’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85

Calendar year quarters

SOURCE: National Oceanic and Atmospheric Administration.
Table 7=10.—Customer Profile of Landsat Total Data

FY 1973a FY 1974a

FY 1975

Customer category Items Item (o/o) Dollars Dollar (o/o) Items Item (o/o) Dollars Dollar (o/o) Items Item (o/o) Dollars Dollar (o/o)

Federal Government

(less N.1.’s) . . . . . . . 21,780 27°~ 62,756 270/o 28,493 180/0 87,156 160/0 34,346 17”!0 169,283 19 ”/0

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 . . . . . . . . . . 13,071 160/0 28,679 13 ”/0 18,611 12 ”/0 63,964 12 ”/0 27,727 14 ”/0 142,054 160/0

Industrial . . . . . . . . . . 24,430 30%0 67,360 30 ”/0 35,890 230/o 114,140 22%0 45,671 230/o 219,704 240/o

Individuals . . . . . . . . . 5,109 60/0 17,143 7% 17,266 11 ”/0 67,127 13 ”/0 18,643 9% 100,953 11 ”/0

Non-U.S. . . . . . . . . . . . 8,497 11% 28,154 12 ”/0 37,038 230/o 120,499 230/o 47,174 240/o 174,659 19 ”/0

Non-identified . . . . . . 5,189 6% 13,311 6% 17,346 11 ”/0 64,708 12% 17,397 9% 69,376 7%

Total data. . . . . . . . 81.071 100 ”/0 228,042 100 ”/0 157,178 lOO% 528,514 100 ”/0 198.383 lOO% 909,009 100 ”/0

FY 1976 TQ 1976 FY 1977

Customer category Items Item (o/o) Dollars Dollar (o/o) Items Item (o/o) Dollars Dollar (o/o) Items Item (o/o) Dollars Dollar (o/o)

Federal Government

(less N.1.’s) . . . . . . . 31,645 13% 253,166 15 ”/0 7,771 15% 73,436 16% 21,074 16% 269,825 19%

NASA investigators . . 63,329 250/o 341,056 21 “/0 5,730 11 ”/0 48,111 11 ”/0 9,827 7% 96,032 7%

State/local

government . . . . . . 1,214 10% 8,191 00/0 149 0% 1,168 0% 1,360 1% 20,168 1 5

Academic . . . . . . . . . . 26,077 11 ”/0 178,160 11 ”/0 8,489 160/0 40,129 9% 14,063 11 ”/0 141,077 10 ”/0

Industrial . . . . . . . . . . 42,833 17 ”/0 322,699 20 ”/0 12,122 240/o 121,025 270/o 36,979 280/o 412,183 280/o

Individuals . . . . . . . . . 18,052 7% 141,556 9% 3,755 7% 28,683 60/0 8,003 60/0 72,129 5%

Non-U.S. . . . . . . . . . . . 65,100 26% 391,673 240/o 13,702 27% 138,632 31 “/0 40,632 31“!0 442,079 30%

Non-identified . . . . . . 488 0% 4,892 0% 96 0% 1,087 0% 49 0% 344 0%

Total data. . . . . . . . 248,738 1000/o 1,641,393 100 ”/0 51,814 1000/o 452,271 100 ”/0 131,271 100 ”/0 1,453,837 100 ”/0
— ——————. . . . ——. -

298 ● International Cooperation and Competition in Civilian Space Activities

fE

al

1 -

$

0

0

L

. . . . . . . . . .

. . . . .

. . . . .

. . . . .

. . . . .

. . . . .

+::: :

u.. . . . . .

. . . . .

. . . . .

. . . . .

. . . . .

. . . .
Ch. 7—Remote Sensing From Space ● 299

not delivered promptly, (the shortest period

between acquisition and delivery from the

EROS Data Center is about 2 weeks); and 2)

the likelihood of a gap in delivery of data between the demise of Landsat 5 and the deployment of a follow-on satellite.b4 In part

because the Landsat system was treated as

an R&D system and declared operational

only in 1983, insufficient funding and planning effort was devoted to assuring that customers received data in a timely, continuous manner. This has inhibited full

development of those segments of the market (primarily agriculture and other nonrenewable resource management areas) that

rely on rapid receipt of the data. Potential

users have also been discouraged by the possibility that data from Landsat or a similar

U.S. system may not be available in the

future.

Until recently, the cost of manipulating

data and adding value to them has been high

because they have required large, expensive

computers and peripheral equipment. Potential customers from all segments of the

user community are reluctant to invest in the

necessary sophisticated hardware and software as long as the data supply is uncertain.

● Utility of data. The value-added industry

consists of a diverse set of service companies

or departments of larger (discipline-oriented)

industries (e. g., petroleum, mineral, or forestry firms) that take the corrected spacecraft

data, manipulate them, and integrate them

with other data to create useful sets of information, in the form of maps, tables, or

graphs. They are properly considered part

of the overall information industry. 65 Information derived from this process may, for

example, indicate to the exploration geologist where ground tests for particular forms

of minerals should be made, or to the agricultural planner what the extent of weatherrelated stress to a particular crop is likely to

be. In addition to the profit-making enterprises that process land remote sensing data,

64 Remo[e Sensing and the Private Sector, ch. 4.

65Donn C. Walklet, “Remote Sensing Commercialization: Views

of the Investment Community, ” ERIM Conference, May 9-13, 1983.

a variety of nonprofit data users also process data for information content. These include universities, State and local governments, and several Federal agencies.

In order for the market for data to increase

to the point that it will sustain a self-supporting business, potential customers will

have to become convinced of the utility

(based on price, availability, and convenience) of data for their needs. Although users

in many different fields have experimented

(with NASA’s help) with the data and written much about their utility, the message has

not yet reached the sort of customers needed

to sustain a self-supporting business. Unlike

most current users, who are conversant with

manipulating data on mainframe computers

and who have experimented with satellite

data, potential customers are more interested in information and “services which directly address their information needs. 66

They are not customers for Landsat data per

se, but for the information derived from linking Landsat data with other resource data.

As such they are not unlike the majority of

customers for personal computers—individuals who are uninterested in writing their

own programs and will only purchase a computer if they can also purchase simple, “user-

-friendly” software that will meet their needs

without modification and with little additional instruction.

For example, as one study has noted, the

need to manage and exploit the world’s renewable resources more effectively will require “more complete and timely information about soil conditions, crop acreage and

yields, water availability, meteorology, and

other factors that could benefit or deter resource production . . . the farmer, and the

government official, and everyone in between is a potential customer for resource

information. ’67 At present, the primary customer for Landsat data related to agriculture

is the Federal Government, which has a

stake in U.S. agricultural productivity. Howbc’’Markets for Remote Sensing Data 1980-2000,” Terra-Mar,

Study for TRW Defense and Space Systems Group, contract No.

M624770C2M, November 1982.

b7’’Markets for Remote Sensing Data 1980-2000,” op. cit.
—. ..— ——. -

300 . International Cooperation and Competition in Civilian Space Activities

ever, the agricultural industry also includes

producers, processors, and merchandisers,

banks, and brokers; only a few of these companies are now customers of land remote

sensing data (table 7-11). As one report observed, the agricultural industry is highly

competitive. Inexpensive and timely information about the status of crops would be

well received68 by all elements of that community. Unprocessed data will find little use

by these potential customers.

 Processing improvements. Inexpensive data

processing is only one component in the list

of factors that affect market growth, yet it

could be more important than the price of

data. The cost of adding value to a CCT* can

today far exceed the price of a CCT. Typically, value-added services applied to a single CCT may range from 100 to 300 percent

of the price of unprocessed data depending

on the complexity of the service desired. If

it is eventually possible to purchase particular

portions of a CCT, rather than an entire

scene,69 the need for large computers to —— 681bld.

69&nydata users find that they need only Part of a given Scene.

As the data become more widely used by customers interested primarily in small geographical areas, the demand for smaller parts

of a scene will likely increase. It is now possible to purchase quarterscenes of TM data from EDC.

*Computer-compatible tape.

process these data will decrease. Already, it

is possible to purchase a minicomputer system for processing Landsat data for about

$50,000. In the near future, it will be possible for data users to make more effective use

of microcomputers and thereby to decrease

the cost of an in-house value-added system

to the order of $20,000 to $25,000.70 Although not as efficient as the mainframe

computers, such systems put the price of

using Landsat data for specific applications

within the range of relatively small companies.

One of the reasons the market for Landsat data has not developed more quickly is

that potential customers need primary data

with a wide variety of different basic characteristics (spatial and spectral resolution,

number of spectral bands, coverage area) delivered over widely different timeframes. Until the thematic mapper (TM) was developed,

the data’s spatial resolution and number of

spectral bands were limited to the capabil-

— .— . --—

msuch a system would include at Ieast a microcomputer with

hard disk storage of 10 megabytes ($5,000 or less), an image processor and associated computer software ($1 5,000). Additional items,

such as the software to work with a geographic information system, could raise the total to $25,0(X).

Table 7-il.—Agribusiness Industry Structure Analysis

Producers:

Individual farmers

Farm cooperatives: International Agribusiness Banks?

Farmland Industries, Inc. Bank of Americab

Citibank

Processors:

Combined Function Companies: Agribusiness Brokers?

Pillsbury Merrill Lynch

Quaker Conticommodity Servicesc

Ralston-Purina

Merchandisers:

International Grain Companies:d

Cargill

Bunge

Dreyfus

Continental Grain

aaarrks gnd brokers Interact with all three industry 9erJmentS.

bBank of America consistently maintains the largest share of agribusiness lending in the world.

cconticommtiity h a subsidiary of COntlnental Grain.

d~nternational grain tr~ing iS dominated by these four companies with Carfdill rePresentinsJ by far the 9reatest influence within the industry,

SOURCE: Terra-Mar.

This table illustrates the variety of possible consumers of information from a single business area. Similar tables could be drawn for other business that depend on information about

natural resources, whether renewable or nonrenewable.
Ch. 7—Remote Sensing From Space ● 301

ity of the MSS sensor. The speed of correcting and delivering the data has also been limited, If the market for primary data is to grow

substantially, the system’s owner will have

to deliver data useful for a broad range of

applications, and the value-added industry

will have to develop a wide variety of inexpensive data products. At present, although

some users can utilize the higher capabilities

of the TM data, most cannot. 71 In other

words, as argued above, the data will have

to interest a broader category of users than

they now do.

Issues for the Future

It is evident from the earlier summary of foreign systems that other countries, building on the

experience gained from U.S. applications technology as well as on their own capabilities, see

the development of the full range of remote-sensing satellites as an integral part of their entry into

space. In addition to constructing systems that

will be competitive with the U.S. Landsat system,

they are also engaged in extensive research on

how to apply the data.

● Private sector efforts. The success of the private sector in developing a competitive remote sensing system may well depend on

the strength and longevity of Government

support. Such support could consist of one

or more of the following: a direct subsidy,

such as has been authorized in Public Law

98-365, support in the form of a guaranteed

annual Government purchase of data (specifically prohibited in Public Law 98-365), tax

benefits, and/or in continued Government

research. Although NASA has a program to

develop a variety of advanced sensors that

would be tested on the relatively short Shuttle missions, the Government has announced

no plans to develop civilian operational systems that would provide data over the long

71 For a ciiscussion of using TM data effectively, see l?erTIOte %Ming

and the Private Sector, op. cit., pp. 62-65.

●

term with repeat coverage. It will rely primarily on the private sector to develop and

maintain a land remote sensing system. Thus,

to obtain certain important civilian data, the

Government may have to rely on foreign systems. In the absence of strong Government

support for a private system, the private sector would be left to compete directly with

foreign government-funded enterprises to

sell data.

Remote sensing research. An important

aspect of maintaining leadership in land remote sensing is the continuation of research

on applying remotely sensed data to resource

discovery, analysis, and management. University land remote sensing research is at a

low ebb in this country,72 in large part because Federal research funds have dried up

prematurely. If the market for land remote

sensing data were strong, research funding

for applications would likely be forthcoming from the private sector in support of its

needs. However, the lack of high demand

for data, caused in part by the uncertainty

over whether land remote sensing activities

will continue, has led to reduced private

funding for applications research. Neither

NASA nor NOAA now have strong land remote sensing research programs, although

the Land Remote Sensing Commercialization

Act of 1984 authorizes both agencies to continue such research. It is clear, however, that

successful commercialization will depend on

developing a large variety of methods to turn

remotely sensed data, especially the highresolution TM data, into useful information.

The decline in U.S. research has taken place

at the same time that other nations are developing new remote sensing systems and

increasing their research funding on remotesensing applications. These nations are building on the substantial investment that the

United States has already made in remote

sensing applications.

lzsee, for example, ~e~~~e Sensing and the Private Sector, O P.

cit., pp. 60-61, app. C.
.— —— ——— - — -

302 ● International Cooperation and Competition in Civilian Space Activities

OCEAN REMOTE SENSING

Observations from space devoted specifically

to understanding ocean phenomena were first

made visually and photographically by the Mercury program astronauts in the 1960s. Later, infrared radiometers incorporated on the meteorological satellites provided considerable ocean data

that were later supplemented by data from a

microwave instrument aboard Skylab in 1973. In

1978, NASA launched Seasat, the first dedicated

ocean remote sensing satellite, which demonstrated the feasibility of using microwave sensors

aboard a spacecraft. Although it failed prematurely, the experimental Seasat returned massive

amounts of highly useful data to scientists (table

7-1 2) and demonstrated that a dedicated oceanographic satellite would serve the needs of commercial and scientific interests and Government

agencies.

Because the ocean environment is constantly

changing and potentially dangerous, its behavior

is of considerable importance to all countries that

border on the oceans, and especially to those that

maintain large commercial or military fleets.

Whether they are primarily concerned about activities within the 200-mile economic zones or

have a wider interest in the oceans, all of these

countries would benefit from data derived from

space-based ocean observations delivered promptly and continuously.

A few countries, notably Canada, Japan, and

the European nations (under the auspices of the

European Space Agency) are now planning civilian satellite systems specifically dedicated to

ocean observations. The Soviet Union has flown

several dedicated civilian-military oceanographic

satellites. In the United States a joint civilianmilitary National Oceanic Satellite System (NOSS)

was proposed for launch in 198673 but was canceled when projected program costs rose to more

73 Technology and oceanography, U.S. Congress, Office of Technology Assessment (Washington, DC: OTA-O-1 41, June 1981).

Table 7=12.—Geophysical Oceanographic Measurement Design Capabilities for Seasat-A

Precision

Measurement Sensor Range /accuracy Resolution, km

Geoid 5cm-200m

Topography Currents, surges, etc. Altimeter IOcm-10m * 20cm 1.6-12

Surface winds Amplitude Microwave radiometer 7-50mls ~ 2m/s OR A 10°/0 50

Scatterometer

3-257’——— m s * 2m/s OH 1070

Direction 0-360° * 2(30 50

Height Altimeter 0.5-25m & 0.5 TO 1.Om 1.6-12

OR& lo~o

Gravity waves Length Imaging 50-100m * 100/0

Direct Ion radar 0-360° * 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 10-1 5km 10-15

Sea ice .— * 25m 25m

Leads Imaging radar 50m * 25m 25m

Icebergs 25m * 25m 25m

Shores, clouds V & IR radiometer

Ocean islands 7 !jkm - 5

features Shoals, currents Imaging radar * 25m 25m

Atmospheric Water vapor Microwave ~ 25m 50

corrections & liquid radiometer

SOURCE: National Oceanic and Atmospheric Administration
Ch. 7–Remote Sensing From Space ● 303

than three-quarters of a billion dollars. No civilian operational ocean satellite is now planned,

but the U.S. Navy is developing the Navy Remote

Ocean Sensing Satellite (N-ROSS) for Jaunch 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.

7-1 8) lasted only 3 months. However, it returned data of considerable scientific and

operational use.

● Nimbus—1%4-85. The Nimbus series of research satellites were designed by NASA to

test new sensors for generating ocean and

meteorological data and to collect data of

scientific interest. Nimbus-7, the latest in the

series, which was launched in 1978, is still

operating. It carries a Scanning Multichannel Microwave Radiometer (SMMR) that provides measurements of sea surface temperatures, and a Coastal Zone Color Scanner

(CZCS) that provides a measure of biological productivity of the ocean.

● TOPEX/POSEI DON —1990. NASA has proposed to operate, in a joint U.S./French project, a research satellite devoted primarily to

highly accurate measurements (to an accuracy of about 2.0 centimeters) of the height

of the oceans. The satellite would also carry

a microwave radiometer in order to correct

for the effects of water vapor in the atmosphere, France would supply a solid-state altimeter and a radiometric tracking system.

The altitude of the ocean is crucial to understanding patterns of ocean circulation. The

satellite’s orbit would allow determination

Figure 7-18.—The Seasat-A Spacecraft

SOURCE: National Aeronautics and Space Administration.

of ocean topography from latitudes 630

north to 630 south. Accurate altitude measurements could lead to better understanding of ocean topography and dynamics,

tides, sea ice position, climate and seafloor

topography, among other ocean-related

qualities. 74 TOPEX is planned as a new start

for fiscal year 1987 and would be in orbit

from 1990 to 1993 or later. This schedule

would allow altitude data to be gathered at

the same time N-ROSS (U.S. Navy) and ERS1 (ESA), which would fly similar orbits, would

be sensing data on other ocean parameters.

ERS-1 would generate topography data of

lower accuracy but it would reach higher

latitudes than TOPEX. Together, data from

the two satellites would provide considerably

more information on ocean topography than

either satellite could alone.

74’’ Satellite Altimetric Measurements of the Ocean,” Report of

the TOPEX Science Working Group, NASA, JPL 1981; Richard

Fifield, “The Shape of Earth from Space, ” New Scjentjst, Nov. 15,

1984, pp. 46-50.
[page omitted]

This page was originally printed on a dark gray background.

The scanned version of the page was almost entirely black and not usable.
Ch. 7—Remote Sensing From Space ● 305

●

●

●

Metsats. The operational meteorological satellites, including the DOD DMSP satellites,

have carried instruments that measure ocean

parameters of interest to those who study,

use, explore, and exploit the oceans’ resources. Table 7-13 lists the measurements

from satellites that are of particular utility to

oceanic concerns.

Navy Remote Ocean Sensing System (NROSS). N-ROSS is under development by the

Navy; as currently configured, the system

would employ one satellite (fig. 7-19) deployed in polar orbit, having a design life of

3 to 4 years. Although it is designed to sense

parameters of direct interest to the operational needs of the Navy (tables 7-14 and 7-1 5),

the data it returns will also benefit civilian

users of the ocean. NOAA plans to collect

and distribute these data (except for certain

classified information) to the civilian commu nity.

Foreign Systems

Japan Marine Observation Satellite-1 (MOSvisible and one infrared (IR) wavelength

bands. It will also carry a microwave scanning radiometer and a variable-resolution

radiometer (900 to 2,700 meters) with one

visible and three thermal IR bands. Although

this satellite is being developed primarily for

ocean sensing of wave heights, ocean color,

and temperature, these data will also be useful for land remote sensing. Japan is also

planning a land remote-sensing satellite (ERS1), which it expects to launch by 1990. It will

carry a synthetic aperture radar. It has not

yet announced plans for distributing or selling data from MOS-1 or ERS-1.

● European Space Agency (ESA) Remote Sensing Satellite (E RS-l)—1987/88.75 This satellite is planned primarily for passive microwave

sensing of the coastal oceans and weather over

the oceans. In addition, it will carry a synthetic aperture radar for active microwave

sensing of ice topography or land masses

through any cloud cover. However, because

of inherent limits of available power aboard

the spacecraft, its use over the Arctic regions

1)-1986. MOS-1 will carry sensors capable

of resolving objects 50 meters across in three

75A. Haskell, “The ER!j-1 Programme of the European Space

Agency,” ESA Journa/, vol. 7, 1983, pp. 1-14.

Table 7-13.—Measurement Needs for Oceanographic Satellites

Precision

Measurement Range accuracy Resolution Spacial grid Temporal grid

Geoid 5cm-200m * 10 cm IOkm — Weekly to monthly

Topography Currents, IOcm-10m Y 1 Ocm 10-1 OOOm IOkm Twice a day to

surges, etc. 5-500cm/s a 5cm/s

Open ocean

weekly

10-50km 50-100km

Surface winds Amplitude Closed sea 3-50mLs & 1 TO 2m/s 5-25km 25km 2-81d

Coastal OR A 10% l-5km 5km Hourly

Direction 0-360° ~ 1 ().200 — — —

Height 0.5-20m & 0.5m 20km 2-81d

OR ~ 10.25y0

Gravity waves Length 6-1 ,000m ~ 10.250/o 3-50m 50km 2-4/d

Direction 0-360° * 10-300

Open sea 25-100km IOOkm Daily to weekly

Surface Closed sea –2-35°C 0.1-2 ‘relative 5-25km 25km with spectrum of

temperature Coastal 3.5-2° absolute 0.1-5km 5km times of day and

times of year

Extent and age 6 me.— yrs. l-5km l-5km l-5km weekly

Sea ice Leads 50cm 25m 25m 25m 2-4/d

Icebergs IOcm l-50m l-50m 25m —

SOURCE National Ocean(c and Atmospheric Admlnlstratlon
— — ——

306 ● International Cooperation and Competition in Civilian Space Activities

Figure 7-19.—Navy Remote Ocean Sensing Satellite (N-Ross)

SOURCE: U.S. Navy.

Table 7-14 N-ROSS Sensor Capabilities

Sensor Parameter measured Capability Heritage

Scatterometer . . . . . . . . . . . . . . . . . . . Wind speed

Wind direction

Altimeter . . . . . . . . . . . . . . . . . . . . . . . Altitude

Significant waveheight (H 1/3)

Wind speed

Microwave Imager (SSM/l)b . . . . . . . . Surface wind speed

Ice edge

Precipitation

Low Frequency Microwave

Radiometer (LFMR)C d . . . . . . . . . . . Sea surface

temperature

1.3 M/S (range 4-26 MIS)

16°

8 cm (when H 1/3 s5M)

0.5 m

2 MIS

*2 MIS (25 km resolution)

t 12.5 km (25 km

resolution)

*5 mmlhr (25 km

resolution)

1.0”

2.5 km resolution

Modified from Seasat;

improved wind direction

Same as GEOSAT

altimeter

DMSP instrument; high

frequency for ice

Edge better than Seasat

SMMR

New device with higher

resolution than SMMR

aSeasat type sensor.

bAFlpJavy DMSP sensor.

cNew sensor.

dDuaj Frequency Sensor (!j and 10 GHz) to be flown as a companion sensor to the SSMII.

SOURCE: RCA Astro-Electronics.

may be limited. It is the first of a planned series of three satellites to be launched by ESA.

It is not yet clear how data from this satellite are to be distributed to other countries

(see issues section below).

 Canada Radarsat—1990. Under development by Canada for routine observations of

polar sea ice, as well as assessments of Canada’s natural resources, the satellite will provide C-band radar images of Earth’s surface.

Its primary sensor will be capable of being

pointed and will have a spatial resolution of

about 30 meters. Because it will operate at

microwave frequencies, it will be able to

gather information on the surface of Earth

through cloud cover. Data from this satel-
Ch. 7—Remote Sensing From Space ● 307

Table 7-15.—Oceanographic Data Tactical Operations

Data/lnstrument Oceanographic Product Fleet Tactical Applications

Sea Surface Winds/(Scatterometer,

Altimeter, Microwave lmager) . . . . . . . . . . . . . Sea Surface Wind Field

Analysis

Sea Surface Temp.l(Low frequency

microwave radiometer). ... , . . . . . . . . . . . . . . Ocean Thermal

Structure Analysis

Map of Fronts and Eddies

Ice/( Microwave Imager) . . . . . . . . . . . . . . . . . . . . Polar Ice Field Analysis

Flight Forecasting

Ship Routing

Wave and Surf Forecasting:

● Amphibious Operations

● Swimmer OPS

● Underway Replenishment

Cruise Missile Support

Surface Ambient Noise (ASW)

Radar and ECM Range Predictions

Location of Potential Hiding Places

For Submarines (Friendly and Unfriendly)

ASW SUPPO~:

c Sonar Range Predictions

● Weapons Settings

Q Sonobuoy Spacing

● Sonar Tow Depths

Acoustic Routing of Surface Ships

and Submarine

Submarine Surfacing information

Navigation Information

SOURCE’ RCA Astro-Electronics.

Iite will be available for direct sale or by arrangement through offset programs. In order to reduce its costs, Canada is seeking

partners in this venture. The spacecraft will

also carry a NASA scatterometer and an optical sensor built either in the United States

or Europe.

● U.S.S.R. Oceanographic Satellites Kosmos

1500 (1983) and Kosmos 1602 (1984).76 In

addition to a low-resolution scanner and a

microwave radiometer, Kosmos 1500 carried

a side-looking radar that was used to assist

Soviet merchant ships trapped in the ice in

the Chukchi and East Siberian Seas.77 Kosmos 1602 presumably carries a similar complement of instruments. Analysis of data received from these satellites indicates quality

comparable to that of the U.S. Seasat.

7’Nicholas L. Johnson, “The Soviet Year in Space: 1984, ” Teledyne Brown Engineering, 1985, p. 28.

77v. sh rnyganovisk iy, “A Space Pilot for the Nuclear-Powered

Icebreakers, ” Izvestiya, Moscow, Nov. 6, 1983, p. 6; TASS, Moscow,

23 Jan. 1984; “Soviet Cosmos Spacecraft Providing Lane, Sea imagery,” Aviation Week and Space Technology, Nov. 12, 1984, pp.

212-213.

Major Ocean Parameters of Interest

for Scientific and Applied Uses

A satellite specifically designed for ocean applications should produce timely, synoptic data

of extreme usefulness to researchers, to private

enterprise, and to governments.

The following selection of major ocean attributes indicates some parameters that satellites

could measure successfully.

Sea Surface Temperature

Data on sea surface temperatures, gathered by

the infrared radiometers aboard the meteorological spacecraft, have been available for two

decades. The maps of sea surface temperatures

produced from these data demonstrate complex

surface temperature patterns that have led to considerable speculation about the physical processes that might cause such patterns. Because

they reflect only surface effects (1 millimeter or

less) these data alone are of limited use in understanding the physical processes of the deeper

layers of the ocean. Yet, higher resolution meas-
. —— ——— — -

308 ● International Cooperation and Competition in Civilian Space Activities

Photo credit: U.S.S.R. Hydromet Office

Images of hurricane Diane off the coast of North

Carolina received from the Soviet Cosmos-1500

satellite (Sept. 11, 1984). The lefthand image is from

a multichannel scanner. The righthand one is from a

side-looking radar operating at 3 cm wavelength. They

were given to NESDIS by engineers at Hydomet

in Moscow.

urements of water temperatures at the surface,

coupled with observations of surface winds and

estimates of evaporation and rainfall, would provide better information on heat transport of the

oceans. ’B 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 considerable utility in locating areas of fish abundance, A recent report80 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).81 Visual observations

of sea ice are now collected by the Multispectral Scanner (MSS) and Thematic Mapper (TM)

sensors aboard Landsat 5 and by the Very High

76 Brethaton Francis P., “Climate, the Oceans and Remote Sensing,” Oceans 24, No. 3, pp. 48-55, 1981.

79’’The Marine Resources Experiment Program, (MAREX),” Report of the Ocean Color Science Working Group, NASA-Goddard

Space Flight Center, December 1982.

b“’’oceanography From Space: A Research Strategy for the Decade 1985-1 995, ” Report of the Joint Oceanographic Institutions,

Washington, DC. 1984.

61W. F. Weeks, “Sea Ice: The Potential of Remote Sensing,”

Oceanus 24, No. 3, pp. 39J17, 1981.
Ch. 7—Remote Sensing From Space . 309

Table 7-16.—lce Parameters of Importance in Different Operations and Research Areas

Area of interest Pertinent ice parameters’

Offshore operations. . . . Extent, type, thickness, drift velocity, 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 veloclty)

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 ablatlon rates, drift velocity (current veloclty,

water-column stablllty)

‘The parameters In parentheses are alao Impottant, although they arc not directly related to Ice.

SOURCE: W. F. Weeks, “Sea Ice: The Potential of Remote Sensing,” oceanus 24, No. 3, 19S1, p. 41.

Resolution Radiometer (VHRR) on the NOAA-N

series satellites. Although highly useful for determining the extent of ice cover and ice flow, these

data are limited by cloud cover and by darkness

(at those times of year when the Sun is not visible at high latitudes). Further, the Landsat data

are limited by lack of daily coverage, and the

NOAA-N data are limited in spatial resolution.

Thermal infrared measurements made by the

VHRR infrared sensor on the NOAA-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 suffers 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 problem of low resolution at the price of having to

handle high volumes of data. A Synthetic Aperture Radar (SAR) would achieve relatively high

resolution along the line of sight at an angle to

the nadir by using the satellite motion coupled

with digital signal processing techniques to create

a synthetic image of Earth’s surface. Such systems

are an outgrowth of aircraft side-looking aperture

radar systems; an L-band SAR was demonstrated

on Seasat (fig. 7-20). However, before such an

instrument could become operational, methods

Figure 7“20.—Radar Image of Kuskokwim Bay

in Alaska

o 20 km “Y ILLUMINATION

I I --DIRECTION

As the Kuskokwim River flows into the Bering Sea, it forms

large sediment deposits in Kuskokwim Bay, which are visible as small dark areas separated by channels (bright areas).

SOURCE: Lee-Lueng Fu and Benjamin HoIt, “Seaaat Viewe Oceans and Sea Ice

With Synthetic-Aperature Radar,” NASA Jet Propulsion Laboratory Pub

Iicatlon 81-120, Feb. 15, 1982, p. 98.
310 ● International Cooperation and Competition in Civilian space Activities

would have to be developed to process the data

rapidly and turn them into useful products. As

noted, Canada and ESA will include an SAR instrument on their satellites, Radarsat, and ERS-1.

A satellite altimeter and a scatterometer are two

other examples of active radar systems that could

be used to measure ice parameters. An altimeter

(e.g., that planned for TOPEX/POSEIDON) could

measure the height of the ice with a precision of

a few centimeters. Data from a scatterometer

would be used to determine ice roughness and

the position of sea-ice boundaries.

Wave Heights

Knowledge of wave height and general wave

conditions at a variety of ocean locations is crucial

for the safety of ships at sea, and for ocean platforms. Data on waves are also important for

understanding and modeling ocean dynamics.

Because winds create waves, measurements of

wind speed and direction over wide areas can

lead to estimates of wave height and condition.

Applications of Ocean Remote

Sensing

Data from satellite remote sensing of the oceans

have the potential for providing information for

several important applications (table 7-17; table

7-18). The following examples illustrate the potential importance of these data.

Weather and Climate

The world’s climate system is dominated by the

behavior of the oceans. Understanding and predicting climate depends directly on understanding ocean temperatures, currents, wave heights,

sea level, and sea surface winds, as well as other

characteristics. Obtaining comprehensive, periodic, synoptic measurements requires a spaceborne system. Although daily measurements from

ships crossing the oceans or from ocean buoys

are available to climatologists, such measurements are primarily limited to the major shipping

routes or to the coastal areas. The climate-related

parameters of vast areas of the ocean remain unobserved except on a sporadic basis.

Marine Transportation

In ship routing, the most critical parameter to

measure is sea state (wave heights). However,

winds, currents, fog, rain, etc., are also important. One report suggested that reliable data and

analysis of sea state “can reduce ship transit time

and therefore save a significant amount of fuel.”82

The experimental Seasat was used by a U.S.

ship routing company in studies that indicated:

. . . that the use of satellite-derived wind observations can be useful in more accurately locating low-pressure storm centers. This knowledge

could reduce vessel transit distances and times.83

Offshore Mining: Oil and Gas

Exploration and Extraction

Offshore mining firms could make considerable

use of ocean satellites because many of the areas

with the richest resource potential are not located

in the major shipping lanes and thus are the most

poorly observed by conventional means. The

deep-ocean-mining industry now is using wind

and wave measurements from ship reports in designing equipment and formulating operating

plans and schedules.84 Various experimenters

have suggested that a better climatological information base, which could be provided by satellite, would be put to good use in planning for and

operating deep ocean mining projects.

Oil and gas exploration and extraction companies could also use an improved ocean climatological data base for selecting equipment, such

as drilling rigs and supply vessels, and in planning offshore operations. * Perhaps the most important use of the satellite data is for improved

weather warnings and status of ice information. as

82Donald Montgomery, “Commercial Applications of Satellite

Oceanography,” Oceanus 24, No. 3, p. 58, 1981.

631 bid., p. s9.

841 bid., p. s9.

“Oil and Gas Technologies for the Arctic and Deepwater (Washington, DC: U.S. Congress, Office of Technology Assessment, OTA0-270, May 1985).

Bslbid., p. 60.
Ch. 7—Remote Sensing From Space ● 311

Table 7-17.—Possible Oceanographic Satellite Applications

Activity Application

Offshore oil and gas:

Environmental forecasting:

Marine transportation:

Deep-ocean mining:

Marine fisheries:

Increased ocean forecast accuracy

Exploration operations

Seismic surveys

Drill ships

Towout operations

Production operations

Crew scheduling

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

Increased observations (particularly in Southern Hemisphere)

Consistent observations

Wave-height measurements

Wind averages

Increased ocean forecast accuracy

Optimum routing

Port scheduling

Ice observations

Arctic resupply

Vessel/personal safety

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

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,” Ocearrus 24, 1981, pp. 57-65.

Table 7-18.—lmpacts of Observed Parameters on Commercial Benefits

Measurement Parameter

Sea Surface

Application Wind Waves Temperature Ice

Ocean Fishing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . High High High Low

Marine Transportation . . . . . . . . . . . . . . . . . . . . . . . . . . . High High Lowa Lowb

Oil and Gas Exploration

and Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . High High Low Highc

Arctic Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . High High Low High

%tIgh in regions where sharp temperature gredlents indicate currents.

b~Wnden~y Iow for pre~nt tr~e routes; will Increase with the movements of arctic resources using Ice bre*ers.

Cktigh only In ice prevalent regions.

SOURCE RCA Astro-Electronics

38-797 0 - 85 - 11 : QL 3
312 ● international Cooperation and Competition in Civilian Space Activities

Surveillance and Enforcement

With the recent extension of coastal economic

zones to 200 miles, all coastal countries, and

especially developing ones, would benefit from

better surveillance and enforcement programs.

Surveillance of cooperative targets–the monitoring of boats legally within a country’s 200-mile

economic zone–could be done using the ARGOS

system on TIROS-N, This system could monitor

cooperative vessels (i. e., those with an appropriate transmitter aboard) and enable a host government to supervise their fishing activities. An

uncooperative or illegal foreign fishing vessel,

however, must still be apprehended by aircraft

or ocean patrol.8b

Fisheries

Indirect measurements of environmental factors which affect the distribution and abundance

of the resource, both temporally and spatially,

can be used to indicate areas of high yield. However, using satellite data for commercial fisheries

requires that two links be made: 1 ) fish availability must first be correlated with environmental

and/or ocean attributes, then, 2) environmental

and/or attributes detected from the satellite must

lead to information about the potential available

food Supply.

The following environmental parameters relate

to the distribution and abundance of ocean fish:

Sea surface temperature. Sea surface temperature may be directly related to the distribution and abundance of marine organisms. For instance, studies of Pacific tuna

have demonstrated strong correlations between tuna catch and water temperature.

Also, strong temperature gradients may indicate the edges of warm and cold water systems. These edges or boundaries usually

define currents and mark areas of increased

pelagic fish productivity.

Sea surface salinity. Although sea surface

salinity cannot be measured by satellite,

measurements of salinity help indicate the

B6ResOurces Development Associates, Feasibility OfsUrVei/kInCe

and Monitoring of Fishing Vessels in Papua New Guinea (Los Altos,

CA: RDA, January 1980).

●

●

●

●

●

distribution and abundance of certain kinds

of marine organisms, especially those that

spend some portion of their life cycle in the

estuarine areas.

Sea state (wave heights). Sea state becomes

an important indicator for current systems

when temperature, salinity, and other property gradients are negligible. Because current

systems delineate areas of more or less fish

productivity and may also possess different

sea states, the measurement of sea state may

correlate with fish catch.

Water color and chlorophyll concentrations.

Water color variations indicate the boundaries of major current systems. More important, water color has long been used indirectly as an indicator of biological

productivity. Detection of water color is primarily used to detect shifts of marine organisms, especially those that spend some portion of their life cycle in the estuarine areas.

Pollution. Pollution may be considered as

an indicator of areas in which fish are not

present. it may also indicate where fish and

their environment might be endangered.

Slicks, foam, and debris lines may also indicate current convergence zones, which

may be areas of high productivity.

Surface objects. Surface objects of interest

that may be detected include vessels, buoys,

offshore oil platforms, weed-debris lines,

marine mammals (whales, porpoises), bioluminescence, and fish schools on or near

the surface.

Other factors. Other environmental data are

important, including water clarity and current patterns, but these are usually inferred

from the parameters listed above.

Issues in Ocean Remote Sensing

What Are the Research Needs for

Ocean Remote Sensing?

There is a strong continuing need for research

into ocean phenomena, both to support ocean

users (e.g., the maritime industries), and to increase our basic understanding of fundamental

ocean processes. Although humans have traveled

and studied the oceans since before recorded his-
Ch. 7—Remote Sensing From Space ● 313

tory, our ability to predict future ocean behavior

is severely limited by lack of knowledge of how

the ocean works and how to model its behavior.

Understanding the oceans more thoroughly will

also require the collection and processing of vast

amounts of data, both from surface observations

and from satellites.

The problems of understanding the dynamics

of the ocean are similar to those of understanding the dynamics of the atmosphere. The oceans

and the atmosphere are both fluids that are

heated and cooled by complicated processes and

strongly affected by thermal flows from the land

masses. Major changes may occur over scales of

hours, days, weeks, or even years. The ability to

predict future behavior of the oceans requires

knowledge of the ocean as it is at any given moment, and how it changes over time. predictions

also require the abiIity to model ocean behavior

in large computers and compare those results

with observations. Satellites are particularly useful

for gathering much of the necessary data because

they provide a synoptic view of the oceans at predictable repeat intervals. Observations from ships,

although extremely important in verifying satellite records, are scattered both in time and space,

and provide poor data sets for modeling ocean

behavior. Ocean buoys, though useful for collecting important data, are necessarily few in

number and widely scattered throughout the

oceans.

How Can We Make the Best Use of the

Space Assets of the United States and

of Other Countries to Increase Our

Knowledge of the Oceans?

As noted earlier in this section, Canada, Japan,

and the European Space Agency are designing

or building ocean-related satellite systems that are

expected to be operational within the next s

years. The Navy N-ROSS system, the data from

which will be distributed to the civilian community through NOAA, is likely to be operational

in the same time period. This is one area in which

the increased ability of other countries to compete with the United States technologically by

building space systems can lead to closer cooperation. Close cooperation and coordination

among countries could provide timely and continuous access to the data from these systems.

Most important, substantial cooperation could assure that the data the systems provide are useful

to the worldwide community of users. The result

of cooperation and coordination could be a system that is of far greater utility than any one nation could provide on its own. NOAA is expending considerable energy to increase cooperation,

not least because cooperation may enable the

United States to spend lesson its own data collection systems.

Opportunities for cooperation occur in the following areas:

●

●

Coordination of Equator crossing times and

repeat cycles. N-ROSS is designed to have

a 2-day repeat cycle for measurements. ERS1 will also pass over the same locations every

2 days. If the orbital parameters of both satellites could be properly coordinated, because the sensor complement of the satellites overlaps to a considerable extent, it

would be possible to achieve daily global

ocean coverage. Such coordination would

affect neither the cost nor the national objectives of either satellite system, but could

nearly double their value to the participants,

if all the data are shared freely .87

As future systems are designed, coordination of the Equator crossing times for satellites could also lead to similar benefits. For

example, measurements of ocean color, solar radiation, and ozone content require high

Sun angles, and are therefore best taken near

noon.

Cooperation on future satellite missions. As

experience is gained with the planned operational and research satellites, potential cooperative missions will begin to suggest

themselves. It appears to be in the best interest of the United States to continue a variety of cooperative programs in order to: 1 )

save money on building research and applications systems, and 2) increase the available

scientific and operational knowledge base

about ocean processes.

87’’ Utilization of the Polar Platform of NASA’s Space Station Program for operational Earth Observations, ” op. cit. (fn 37).
—

314 ● International Cooperation and Competition in Civilian Space Activities

● Building an international polar-orbiting

platform. The Europeans have shown considerable interest in providing instruments or

funding for an international system of meteorological satellites (see metsat issues above).

They and the Japanese have also indicated

interest in supplying some part of a space station. Polar-orbiting platforms that could provide a variety of atmospheric, land, and

ocean measurements would seem to provide

fertile ground for future international cooperation in remote sensing.88

What Needs Are There for Collecting,

Processing, and Distributing the

Primary Data From Satellites?

The ground receiving station, and the data

ordering, processing, and distribution facilities are

as important to the user of satellite data as are

the satellites that gather the data. Therefore, when

the funding for ocean remote sensing systems is

considered, it is extremely important to include

sufficient funds for these ground-based functions,

because NOAA must be capable of supplying

unenhanced data reliably and efficiently to the

user. Some data, such as the position and strength

of a large ocean storm, are highly time-dependent

and are of no use to the operational user unless

supplied immediately after being gathered.

Sslbid

Others, relating for example to sea ice position,

may change more slowly and allow a time lag

of several hours or even days for distribution.

The need for timely delivery of data is as important for research scientists as it is for commercial

or Government applications. Sensor characteristics change with time and require recalibration

if the data collected are to be of use to the researcher. Data stored for long periods before their

intended use may well be unusable because the

user was unaware soon enough of small changes

in sensor characteristics.

Large-scale experimental programs such as the

World Climate Research Program, components

of which include the Tropical Ocean Global Atmosphere Program and the World Ocean-Circulation Experiment,89 or the International Geosphere-Biosphere Program (lGBP),90 will generate

large amounts of data from space that must be

sifted, analyzed, and integrated with related data

gathered at the surface, before being used in experimental models of the oceans and the atmosphere. This process will require sufficient archiving of corrected historical data, and the ability

to access them efficiently.

Bg’’Oceanography From Space: A Research Strategy for the Decade 1984-1 995, ” op. cit.

90’’ Toward an International Geosphere-Biosphere Program: A

Study of Global Change,” Report of a National Research Council

Workshop, Woods Hole (Washington, DC: National Academy

Press, July 25-29, 1983).

REMOTE SENSING POLICY

The treatment of current U.S. systems for remote sensing from space presents a particular

challenge to policy makers. Although land, ocean,

and meteorological remote sensing use related

technologies to produce data, for the most part

they still serve different constituencies. Consequently each requires a different policy treatment.

Further, the three systems have different economic, political, and social characteristics, As the data

from these systems find greater use, and their applications increasingly overlap it may be possible to integrate the systems, perhaps on an astronaut-tended polar-orbiting platform.91 However,

analysis of such an integrated approach is beyond

the scope of this report.

Policy options for guiding the direction of U.S.

meteorological satellite systems exist primarily in

the context of cooperative ventures in space, because these spacecraft sense large-scale conditions that generally transcend political boundaries. Small-scale surface features and most signs

of human activity do not appear in images produced by metsat sensors. Economic value lies primarily in the data’s use in predicting severe

weather and climate trends.92 Earth resources reglsee, for example, the discussion in “Utilization of the Polar Platform of NASA’s Space Station Program for Operational Earth Observations, ” op. cit. (fn 37),

glsee, for example, the discussion of “El Nino in the Southern

Hemisphere and Its Effects on the Northern Hemisphere, ” Remote

Sensing and the Private Sector, op. cit, App. 1.
Ch. 7—Remote Sensing From Space ● 315

mote sensing systems, whether for land, coastal

regions, or the oceans, are specifically designed

to be used for assessing, managing, and exploiting

renewable and nonrenewable resources. The

data collected therefore have direct economic

consequences for the sensed country. Consequently, the following policy treatment discusses

each system independently.

Meteorological Remote Sensing

Policy

Because weather data collected in one region

of the globe are of interest to other regions, the

nations of the world, even in time of war, have

at least since 1853 treated the gathering and distribution of weather data as a cooperative venture. The primary means of cooperation among

nations with respect to meteorological satellite

systems has been the sharing of data.

Cooperation

Four primary policy options are possible: 1)

maintain the status quo in polar-orbiting systems

and continue to cooperate in providing data to

the global meteorological data exchange; 2)

maintain the form of our cooperation, but reduce

the quantity and quality of data supplied to other

countries by operating only one polar orbiter;93

3) increase our cooperation with other countries

by engaging in additional cooperative projects;

and 4) increase the sharing of data from the geostationary satellites with our Western Hemisphere

partners.

Maintain Status Quo

The United States normally operates two civilian polar orbiters and two geostationary satelIites. 94 It could continue to operate both systems

and cooperate as in the past by supplying data

93A fifth potential option of reducing our cooperative effofls in

meteorology by reducing our participation in the WMO is infeasible because the United States would therefore likely lose access

to some data it now receives from foreign surface stations.

94Note that only one geostationary Satellite is now operating.

NOAA plans to launch a replacement for the failed GOES-5 in late

1985 or early 1986. See W. Mitchell Waldrop, “A Silver Lining for

the Weather Satellites?” Science, vol. 226, pp. 1289-1291, for a

summary of the state of technological and political affairs of the

U.S. meteorological satellite systems.

to U.S. citizens and other nations at no cost (or

at cost of reproduction), while continuing to fly

sensors of other countries. The two systems cost

about $7.4 million in fiscal year 1984 to operate.

Each new polar-orbiting satellite will cost about

$100 million to build and $30 million to $50 million to Iaunch. 9 5

As argued in the next option, this course of action would have the advantage that it would

maintain the same data flow that the United

States and other countries have experienced in

the past, with the consequent benefits that flow

from access to such data. It would have the disadvantage of not contributing to a reduction of

the budget deficit.

Operate Only One Polar Orbiter

In its effort to reduce the Government’s budget

deficit, the Administration has repeatedly tried

to reduce the number of polar orbiters from two

to one. Eliminating one of the polar orbiters

would reduce the coverage of the system from

once every 6 hours to once every 12 hours for

a particular spot on the Earth. For most of the

United States, a reduction in service would not

cause a serious decline in the ability to predict

severe weather. Conventional data collection systems and the geostationary satellites provide sufficient information. For Hawaii, Alaska, American Samoa, Guam, and the Pacific Trust Territories, however, the 6-hour repeat coverage that

two polar-orbiting metsats supply is extremely important for timely warning of rapidly changing

weather conditions. None of these areas has access to surface data for the predominantly westto-east weather patterns.96

Operating only one civilian polar orbiter would

reduce the data available to DOD. Though it has

its own system of meteorological satellites (Defense Meteorological Satellite Program or DMSP),

DOD makes extensive use of the civilian system,

both to provide data at different times of the day,

gsThese figures are approximate and depend highly on the number of satellites contracted for in a single purchase agreement, the

number and type of new sensors that are flown, inflation, and future

launch prices.

gbBecause the prirnay weather flow in the Northern Hemisphere

is from west to east, information gathered to the west of a geographic

area is especially important for weather predictions.
316 ● International Cooperation and Competition in Civilian Space Activities

and to act as an emergency backup to the military system. The DMSP can provide a backup of

sorts for the civilian satellite. However, because

the characteristics of the data from the DMSP are

somewhat different from those supplied from the

civilian system, its data cannot be used directly

in forecasting models.

Nations that depend on metsat data and have

purchased receiving stations have expressed their

dismay that the United States might operate only

a single polar orbiter. Such a course of action

would save less money than it might appear because the cost of purchasing and operating two

polar satellites is much less than twice the cost

of operating one. NOAA estimates it would save

less than $25 million yearly.

The U.S. polar orbiters carry the emergency

beacons used in the COSPAS/SARSAT cooperative program with Canada, France, and the

U.S.S.R. Until October 1984, the system had

been operated as a demonstration program.

However, in October 1984, the Administration

signed an agreement with the participating countries to continue the program on an operational

basis, therefore committing the United States for

the immediate future to maintain two polar-orbiting metsats for the COSPAS/SARSAT program.

The SARSAT receiver could be flown on a separate small satellite (at an unknown cost), so this

agreement does not guarantee continuation of

two polar-orbiting metsats.

Joint International System

for Polar Orbiters

The only other nation to operate a polar-orbiting meteorological satellite is the Soviet Union.

The two U.S. polar-orbiting satellites provide total global coverage and are the principal source

of meteorological data from 80 percent of the

globe. They also provide coverage for the high

latitude regions, which are not covered by the

geostationary satellites,97 and for which conventional measurements are particularly sparse. The

two-orbiter system benefits all the countries of

gTAlthOUgh the geostationa~ satellites can image the full disk of

the Earth, their ability to make quantitative measurements of extreme north and south latitudes is limited by the oblique angle at

which they sense Earth’s surface at these latitudes.

the world because of its frequent coverage. A single polar orbiter would result in markedly reduced weather coverage (fig. 7-10).

The United States has suggested to the other

OECD nations that:

unlike the situation that existed when the

United States initiated the meteorological satellite system, it is now possible for subsystems, systems, and entire satellites to be built, launched,

and operated by numerous organizations in

many countries. The satellites and instruments

are well understood. The data standards that are

necessary for worldwide distribution and use of

satellite data are in place and thoroughly developed. Interoperability of space systems or subsystems can be readily achieved through procedures that many countries have applied.98

NOAA representatives have briefed representatives of other nations about U.S. views on the

desirability of jointly providing the second polar

orbiter. A joint program would reduce U.S. operating costs and increase U.S. cooperation with

other countries.

At the June 1984 Versailles Economic Summit,

delegates agreed to discuss cooperating in satellite remote sensing and established the international polar-Orbiting Meteorological Satellite

group (lPOMS), the members of which unanimously agreed on the need for two polar orbiters.99 Foreign participants were willing to accept

more of the financial burden of an advanced

polar-orbiting system and to fund new instruments for it.

An agreement to cooperate in building and

maintaining a multinational polar-orbiting system

would constitute a marked change in the form

of international cooperation in meteorological

systems. Heretofore, with the exception of two

foreign sensors flown on U.S. polar orbiters, data,

not sensors, have been shared.

~“lnternational COOWratiOn in Polar-Orbiting Meteorological satellites,” NOAA, Apr. 19, 1983.

99’’Dual Polar Satellites Draw International Support,” Aviation

Week and Space Technology, Dec. 10, 1984, p. 27. Members of

this group include representatives from Australia, Canada, France,

Federal Republic of Germany, Italy, Japan, Norway, the Commission of the European Communities, the European Space Agency,

the United Kingdom, as well as the United States (NASA, NOAA,

and the Depanment of State).
Ch. 7—Remote Sensing From Space ● 317

U.S. spacecraft manufacturing firms might lose

some business as a result of such cooperation.

On the other hand, if the choice were between

international cooperation on a two polar-orbiting

system and a domestic system of only one polarorbiting satellite, they could well do more business with an international system.

Although the nations that might participate are

able to contribute to this effort, the United States

could face a question of undesirable technology

transfer. For certain advanced new sensors and

data processing technology, it would be important to structure the agreement so that no technology vital to national security interests be transferred to other countries. Part of this concern

could be met by structuring the system in such

a way that each country provided its own independently developed sensors in accordance with

mutually agreed-upon specifications.

Sharing the Data From

Geostationary Satellites

The U.S. geostationary satellites are in a different category from the polar orbiters because they

remain stationary over regions centered on the

Equator. The data from these satellites, like those

Photo credit: National Oceanic and Atmospheric Administration

Image of Hurricane Allen centered over the Gulf of

Mexico received from the GOES satellite stationed

at 75° W longitude, Aug. 8, 1980.

from the polar orbiters, are already shared with

the countries of the world. However, unlike the

data from the polar orbiters, their data benefit primarily the countries of the Western Hemisphere.

Thus, in order to provide development assistance

to many of these countries, and further Western

Hemisphere relations, it may be in the long-term

interest of the United States to support bilateral

or multilateral programs to make better use of the

data from these satellites. Such programs could

take the form of joint research projects to investigate the effects of El Nino and other large-scale

weather patterns that affect the Western Hemisphere.

Competition

There is no market for sales of primary metsat

data because, except for reproduction changes,

they are shared freely among nations.100 What

competition exists for meteorological satellite

technology is for ground equipment, but that

market is extremely small and is likely to remain

so in the future.

Competition for value-added services also exists, but here again the total market is now extremely small. The United States leads in processing metsat data. The value-added market will

remain relatively small in the near future, but is

likely to continue to develop as techniques for

using land and meteorological data for agricultural and hydrological purposes improve.101 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 meteorological data may begin to compete with the use of certain land and

ocean remote sensing data both in the United

States and abroad.102 This could bean important

step toward an integrated U.S. remote sensing

looCountry satellite services organizations generally charge (at cost)

for data that requires special processing, or for derived products.

101 see, for enmple, discussion at the NOAA-sponsored conference, NOAA’s Environmental Satellites Come of Age, Mar. 26-28,

1!%4. Participants there shared techniques used to utilize environmental satellite data for a variety of tasks once reserved for high

resolution data. See also “Metsats Seen Competing with Landsats, ”

Space Business News, May 21, 1984, p. 3.

1°Z’’Metsats Seen Competing With Landsats, ” Space Business

News, May 21, 1984, p. 3.
—

318 . International Cooperation and Competition in Civilian Space Activities

Photo credits: Nat\onal Oceanic and Atmospheric Administration

NOAA-N series polar-orbiting environmental satellite, artist’s conception.
Ch. 7—Remote Sensing From Space ● 319

system that would enhance the U.S. competitive

position in remote sensing.

Land Remote Sensing Policy

The feature that most distinguishes Earth resources remote sensing from meteorological remote sensing is its potential for immediate use

in assessing, managing, and exploiting Earth’s resources. The potential economic value of the data

these systems supply has recently made them a

primary subject of competition between nations.

Cooperative efforts, though potentially serving an

important role, have lessened in importance with

the development of competitive foreign systems.

Competition

The previous analysis in this chapter has shown

that the greatest current demand (in volume) for

land remote sensing data is for low-cost moderate-resolution (80-meter) MSS data delivered

promptly and continuously. The current demand

for expensive data is smaller.103 Most customers

today have neither the experience with high resolution (30-meter) thematic mapper (TM) data nor

the processing equipment. In addition, it is not

clear that TM data or their equivalent will be cost

effective for many tasks. Except for the mineral

exploration companies, which can make costeffective use now of the more expensive TM data,

relatively few users are willing or able to purchase them. This situation is likely to continue

until: 1 ) customers gain confidence that TM or

comparable data would be cost effective; and 2)

they also gain confidence that the data will be

available on a continuous, long-term basis.

Land remote sensing policy is at an important

crossroad. As discussed earlier, by creating Public Law 98-365, the Administration and Congress

committed the United States to transferring this

technology to the private sector. Proponents of

transfer hope that the private sector will eventually develop the technology into a self-supporting, commercial operation. However, it is unclear:

1 ) how much subsidy might eventually be needed,

2) how future research and development needs

IOJln the first half of fiscal year 1985, Thematic Mapper data generated about 49 percent of the total income of Landsat data sales

from the EROS Data Center.

will be met, and 3) whether sufficient demand

for data will develop to build a viable market.

Opponents of transfer generally believe the system should continue to be operated in the public interest. They argue that the costs of continuing to provide data are relatively small compared

to the cost of putting the system in place. A few

observers believe that it is possible to operate a

complete land remote sensing system without

Government subsidy.104 However, they also point

out that this could not be done in competition

with a Government-subsidized operation.

The following discussion views each policy option from the point of view of how it would serve

the overall public interest. The disposition of the

Landsat system is likely to affect overall U.S. competitiveness in space, international relations, and

the development of the international market for

land remote sensing data.

Options for Continued

Financial Support

The Administration and Congress have decided

that the public interest will be served by a phased

transfer of the Landsat system to private ownership. Although the Department of Commerce has

chosen the EOSAT Corp. to operate the current

Landsat system and to build two follow-on satelIOqVIoq nOtabJe among these is Space America, Inc., which was

one of the bidders to take over operation of the Landsat program.

Space America’s approach to land remote sensing is radically different from either EOSAT or Kodak. It has proposed building a system that would be less technically sophisticated than the current

Landsat 5, but would be considerably cheaper and directly responsive to customers’ data needs. Operating at 40 meters resolution

in 4 wavelength bands and providing stereoscopic data, its proposed MLA-based satellite would be comparatively light and require little advanced technology development. It would also require relatively little or no Government subsidy. Space America

is also developing a data processing system that would integrate

satellite aircraft and ground-based data to produce new information products. In proposing such a satellite system, Space America

is relying on the premise that the largest market for data will be

for inexpensive, moderate resolution data targeted to customers’

needs and combined with ground-based data. Its proposed system

has been criticized on the grounds that it does not maintain the

U.S. technological leadership in remote sensing. However, Space

America is convinced that the greatest immediate need is to build

a market for the data before moving to more advanced sensors that

will generate expensive data. See Diane Josephson, statement at

hearing before the Subcommittee on Science and Technology, of

the Senate Committee on Commerce, Science, and Transportation,

Mar. 22, 1984, S. Hrg. 98-747, pp. 78-82.
320 ● International Cooperation and Competition in Civilian Space Activities

Iites, and has reached agreement on the contract

terms (including amount of subsidy), it will still

be necessary for Congress to monitor the process of transfer over the long term.

If EOSAT is able to operate the current system

for a period long enough to inspire customer confidence, to provide data promptly at reasonable

costs, and to establish a strong market for data,

then the transfer has a reasonable chance of succeeding. 105 However, the subsidy cap of $250

million plus launch costs OMB has imposed may

limit the ability of EOSAT to establish a self-sustaining corporation within the 10 years of the

centract.

This attempt to commercialize land remote

sensing is an experiment that has no exact precedent. It may be necessary or desirable to institute additional legislative measures, or to appropriate additional funds for the transfer in later

years (beyond that committed in the current contract). Therefore, Congress may wish to pursue

one of the following options:

Maintain a High Level of Direct Support

for Commercial Land Remote Sensing

Although the Administration has set a cap on

the total subsidy to be paid, Congress might later

decide to appropriate an additional subsidy (perhaps $100 million to $150 million), on the basis

that a $250 million subsidy allows little margin

for maintaining U.S. technological and marketing leadership. The contract with EOSAT has several vulnerabilities that could adversely affect the

company’s ability to compete effectively. EOSAT

will attempt to use high-capacity tape recorders

on Landsat 6 and 7 to gather and store data from

areas that are not covered by ground receiving

stations. However, tape recorders have proven

particularly vulnerable to malfunctions in the past

(e.g., on Landsats 2 and 3). In addition, MSS-type

data will be generated by summing appropriate

elements of the TM instrument on board the

spacecraft. Not only is this an untried technique,

but because there will be no separate MSS instrument, there will be no backup should the TM it10SAS noted in the cjiscussion of issues, a strong market for data

would imply sufficient revenues to build follow-on satellites beyond

Landsat 6 and 7.

self fail. (On Landsat 4, when the antenna for the

TM failed, it was still possible to receive MSS data

through an entirely separate system.) Finally, the

rate of data processing planned for the facility at

Goddard Space Flight Center has never been

reached for the extended periods of time necessary for developing a high-volume market.

Additional funding could allow redundant systems to be built that would reduce the amount

of risk posed by these system vulnerabilities. Proponents of additional subsidy argue that the benefits derived from land remote sensing are such

that the system should be maintained even if

there is a relatively low demand for data. They

further offer that Government needs for data to

use in monitoring the Nation’s renewable and

nonrenewable resources and the environment,

in the public interest, are great and that more time

and funds are needed to learn how to integrate

these data into existing programs.106

Moderate Additional Subsidy

The difference between this and the previous

option is the level of extra support that is deemed

necessary to assure near-term privatization and

eventual commercialization of land remote sensing. proponents of this alternative policy would

argue that some additional subsidy is appropriate to provide an additional margin of safety for

the transfer, but that it should not exceed, say,

$50 million over the life of the current contract

between the private firm and the Government.

They further support the need for the private corporation to assume a higher level of financial risk

than might be implied in the first option.

No Extra Subsidy

Such a policy would follow from OMB’S conviction that $250 million (plus launch costs) is

about the right amount to extend to a private corporation for the first steps of the commercialization process and that holding out the possibility

of any greater future subsidy would undermine

the creative energies of a corporation that was

risking its own capital to build sufficient market

for remotely sensed data. Further, it could be

l~For a detailed discussion of Government requirements, see Remote Sensing and the Private Sector, op. cit., ch. 5, app. G, H, 1.
Ch. 7—Remote Sensing From Space ● 321

argued that if sufficient demand for remote sensing products fails to develop, the field should be

left to other nations and the United States should

devote its energies to maintaining leadership in

other technologies.

Additional Policy Options

Several other options for promoting U.S. competition in satellite land remote sensing are possible. They are primarily designed to promote the

development of a market for the data. As the earlier analysis has shown, the most important factors contributing to the development of demand

for remotely sensed data are: 1) continuity and

timeliness of data delivery; 2) a strong value-

-added industry; and 3) continued research and

development, both on sensors and other system

elements, and on effective application of the data.

The last factor is also the major element in contributing to U.S. technological leadership.

Reinstate a Strong Remote Sensing

Research Program

The Remote Sensing Commercialization Act of

1984 calls for both NASA and NOAA to continue

research in advanced sensors and in the use of

remotely sensed data.107 Until about 1982, primarily within NASA, the United States maintained

a strong remote sensing research program both

for applications of the data, and in sensor development. As the Landsat system began the transition to operational status, NASA began to cut

back on its research effort in the expectation that

NOAA would be the lead agency in operational

land remote sensing. However, NOAA has only

a small research program. NASA continued to

work on a multispectral linear array to be tested

on a future satellite. As discussed earlier (see

issues section), NASA terminated fiscal year 1985

research in order to concentrate on developing

a much more advanced sensor system. Some

Members of Congress and representatives of the

industry are concerned that NASA’s decision,

which was driven by the desire to cut some programs in order to reduce its operating budget,

left NASA providing very little research effort for

supporting the U.S. competitive stance in land

IOTsee Publlc LaW g.sfjs, Title V—Research and Development.

remote sensing. NASA officials argue that NASA’s

role is to continue research on advanced sensors,

not to develop sensors that would be used for

commercial operations. NASA is now attempting to reinstate part of this research. However,

the question of what level of effort is appropriate remains.

In spite of the mandate of Public Law 98-365

for continuing research in land remote sensing,

the fiscal year 1985 NOAA budget contains no

support for research on operational sensors or

on utilization of the data. if the United States is

to support the development of a market for the

data, maintain its technological lead in civilian

applications of remote sensing technology, and

promote national prestige in the face of competition from France and other countries, continued

research on advanced civilian sensors will be necessary. Some technology developed for reconnaissance satellites might eventually be transferred to civilian use, but as discussed in a

previous OTA report,108 the steps from military

or intelligence use of part or all of a space system to civilian use are long and difficult.

Encourage the Growth of the

Value-Added Business

There is no straightforward process for transferring complex new technologies from Government laboratories to private industry. Indeed, the

experience with Landsat has demonstrated that

it can be highly complex and difficult. The biggest impediment to private ownership of land

remote sensing is the small market for data from

the system.

Gathering land data from space is a major innovation in the remote sensing business; it will

take yet more time, money, and considerable attention to building sufficient demand for data to

support a self-sufficient private sector operation.

One key to developing a sufficient market is

the small value-added industry.109 One reason it

remains small is that the Government, in certain

4IOaCjvj/jan Swce pojjcy ad Applications, OP. cit., Ch. 6.

loglt is difficult t. estimate how much income the value-added

industry generates because many larger firms, such as the oil and

gas firms, maintain their own computer processing facilities for converting the data to useful information.
322 ● International Cooperation and Competition in Civilian Space Activities

areas, in effect competes with it by maintaining

its own data processing and value-added capacity. This may be appropriate in the research and

development phase, but inappropriate when the

system is to be transferred to private hands and

operated as a profitmaking entity. If a strong land

remote sensing industry is desired, it will be

essential for the Government to reduce its involvement in value-added services and contract

for those services that can be supplied by private

companies.

Repair Landsat 4

The virtual certainty of a gap in data delivery

between the demise of Landsat 5 and the launch

of a private follow-on satellite deeply concerns

data users. Some have suggested that it might be

possible to eliminate or shorten such a data gap

by repairing Landsat 4, which is still operating,

though at sharply reduced capacity. NASA has

investigated the feasibility of repairing the Landsat 4 satellite in orbit, as was done with the Solar

Maximum Mission repair in April 1984,110 or

bringing it back to Earth, as was done with two

communications satellites. However, unlike the

Solar Maximum Mission, which operates at altitudes that are accessible to the Shuttle, Landsat

4 would require special efforts to retrieve it and

bring it back for repair.111 In addition, it does not

seem cost effective to repair the satellite.112

Because the Landsat satellites follow a near-polar orbit, a Landsat repair mission would have to

wait until the Western Test Range at Vandenberg

Air Force Base in California is able to accommodate the Shuttle (i.e., in 1986). NASA has no such

plans.

Cooperation

Although competition plays a major role in land

remote sensing policy, there is ample opportunity

I

] O’’Orbiter Crew Restores Solar Max,” Aviation Week and Space

Technology, Apr. 16, 1984, pp. 18-20. See “Astronauts Deploy,

Retrieve Satellite, ” Aviation Week and Space Technology, Nov.

26, 1984, pp. 20-22.

11 IThe Satellite is designed to operate at an orbit of 380 nautical

miles. The shuttle can only reach to about 285 nautical miles above

Earth.

1 lzAccording to NASA, estimates for the cost of retrieva I and repair, range up to $250 million, depending on how extensive refurbishment of Landsat 4 might be.

for cooperative efforts as well. These range from

coordination of individual country efforts to the

possibility of establishing a multilateral consortium to build and operate a system from which

remotely sensed data are sold.

Future International Coordination

The United States participates (through NOAA)

in the deliberations of the Landsat Ground Station Operators Working Group and the Committee on Earth Observation Satellites,113 organizations that coordinate standards for land remote

sensing systems and serve as fora for exchanging technical and other remote sensing information. Such coordination will still be important

after the Landsat system is transferred to the private sector. If the transfer process continues as

planned, it will be important to spell out how private firms would have to interact with the agencies that represent the United States in these organizations. At present, NOAA’s plan is to continue

to take the lead, with major input from the corporation, and from representatives of the value-

-added industry.

Multilateral Consortium

Although the idea has received relatively little

attention since it was recommended in a 1977

National Academy of Sciences study,114 one feasible option is to establish a land (and ocean) satellite remote sensing system owned and operated

by a multinational consortium. One possible form

of this option is discussed in detail in an earlier

OTA report.115 Under such an arrangement, a single management authority with multinational par11 IThiS group met for the first time in September 1984. It was

formed from the Coordination on Land Observing Satellites and

the Coordination on Ocean Remote Sensing Satellites, as a result

of a recommendation from the Economic Summit panel of experts

on remote sensing. It includes entities from the free world that have

land or ocean remote sensing systems or plans for building them.

I ~dReSourceS Sensing From Space: Prospects fOr kW?lOpiIlg cOlJf’rtries (Washington, DC: National Academy of Sciences 1977); see

also Ray A. Williamson, “Comment~ on Land, Sea, and Air: Global

Implications of the View from Space,” G/oba/ /mp/ications of Space

Activities, AlAAAerospace Assessment Series, vol. 9, 1982; and John

L. McLucas, “Whither Landsat,” Aerospace America, January 1985,

p. 6.

11 SCjvi/jan SPce Po/jcy and Applications, pp. 298-300; A similar

option has also been discussed at recent meetings of the U.N. Committee on the Peaceful Uses of Outer Space, though the United

States took little part in these deliberations.
Ch. 7—Remote Sensing From Space . 323

ticipation would assume responsibility for global

operation of the system, including establishing

technical specifications, procuring and operating

satellites, and receiving and preprocessing satellite data. This approach would spread the investment risk, as well as encourage other nations to

be more aggressive in developing their own internal markets for satellite data. It would also aid

the developing countries in establishing their own

ability to use remotely sensed data for resource

development and help allay their fears of domination of this technology by industrialized countries.

A multinational remote sensing corporation could

also guarantee that data would continue to be

accessible to all countries on a nondiscriminatory

basis.

Given the current climate in the U.N. toward

remote sensing, and the more important fact that

the U.N. is not organized for operational functions, a U.N. consortium seems inappropriate.

It would in principle be more feasible to establish a limited consortium among those nations

with substantial expertise in remote sensing, similar in form, perhaps, to the INMARSAT structure.

Overtures for other countries to cooperate in

remote sensing have been made in the past.

Now, because France, Japan, and Canada are

well along in their planning process for either land

or ocean remote sensing satellite systems, their

commitment to national systems might make it

difficult to interest them in such a multinational

system, particularly if it were dominated by the

United States. Nevertheless, a multinational system might eventually emerge from the current

cooperative arrangements for coordinating and

setting system standards.

One major disadvantage of a multinational system is that the United States would no longer be

in complete control of its own civilian system.

In addition, U.S. suppliers of space system equipment would face certain competition from industries in other countries. Yet, U.S. industry currently possesses a competitive advantage in these

areas, which transfer of the Landsat system to the

private sector will support. In addition, because

the value-added component of the remote sensing industry is projected to be the major revenue source, and the United States is in a relatively strong competitive position in that market too,

a cooperative satellite system in which costs were

shared could be of overall benefit to the United

States.

Development Assistance

The United States could continue to provide

technical assistance to developing countries in

the applications of remotely sensed data, even

after the Landsat system has been transferred to

private hands.

As explained in appendix 7A of this chapter,

developing countries face two major barriers to

expanding their applications of remotely sensed

data: lack of supportive institutions, and lack of

training. The United States has attempted to reduce some of these barriers by offering developing countries substantial assistance in applying

remotely sensed data to their resource problems.

It has set up training programs, regional centers,

and has assisted in purchasing data processing

equipment.

The U.S. technical assistance programs are

largely responsible for the emergence of the international user community. To the extent that

an international market exists for satellite remote

sensing data, it developed as a result of U.S. aid.

Discontinuing such aid would slow the growth

of an international market for the data and impede the spread of land remote sensing technology.

Ocean Remote Sensing Policy

International interest in ocean remote sensing

from space in this decade is high and reflects a

sense that such systems can serve as useful research tools and provide important operational

data for ocean users. Ocean remote sensing, because it is about to pass from research to operational status, presents a substantial opportunity

for all nations to gain from cooperative arrangements. The following presents possible policy options for Congress to consider vis-a-vis ocean remote sensing.

Take the lead in organizing and coordinating

an international program for collecting and distributing ocean data from space.

International prospects for ocean remote sensing from space present the United States with an

excellent opportunity to lead the coordination of
324 ● International Cooperation and Competition in Civilian Space Activities

global efforts. Although the U.S. system is a Navy

one (N-ROSS), under arrangements now planned,

NOAA will distribute most of the data to the civilian community in the United States and abroad.

NOAA has embarked on an effort to coordinate not only the distribution of data gathered

from N-ROSS and other ocean satellites, but also

the orbital parameters of the satellites. For example, coordination of the satellite crossing times

of N-ROSS with ESA’S ERS-1, if successful, could

result in a data set much more useful to the

United States and other nations than either ESA

or NOAA could accomplish alone.116 This appears to be a least-cost approach to obtaining

data important to research scientists and to ocean

industries. Congress may wish to encourage this

effort by specifically directing NOAA to take the

lead in organizing and coordinating an international program for collecting and distributing

ocean data from space. If it decides to do so, Congress must also authorize and appropriate adequate funds to support acquisition, processing,

archiving, and distribution of the data from the

various sytems.

Support continued research for advanced

ocean sensors and applications.

In the next decade, NASA plans several major

ocean sensing experiments and contemplates

many more. 117 These will contribute vital information to our general knowledge of the oceans.

As these experiments proceed, it will be important to examine them for opportunities to develop

operational sensors that would serve users of

ocean data. Such sensors could be flown on a

variety of platforms. For example, it may be

appropriate for the Government to fund part or

all of the ocean sensors that would be flown on

a private land remote sensing satellite. Alternatively, the private sector may wish to build sen1

‘b’’Utilization of the Polar Plaform of NASA’s Space Platform Program for Operational Earth Observation,” op. cit.

1

17“Oceanography From Space: A Research Strategy for the Decade 1985-1 995, ” Report of the Joint Oceanographic Institutions,

1984.

sors for obtaining certain specialized ocean data

that would be flown on a Government satellite.

Finally, as the planning for the space station proceeds, it will be especially important for NASA

and NOAA to consider operational sensors appropriate for a polar-orbiting platform, one of the

planned elements of the international space station program.

As work on the sensors proceeds, it is just as

important to continue research on how to apply

the data from research and operational sensors

for ocean-related problems. World maritime industries generate billions of dollars of revenue

each year. Information about ocean parameters

can increase industry productivity and reduce the

danger to Iives at sea.l118 One component of this

research should be the development of techniques to utilize meteorological data more effectively in understanding and predicting ocean

dynamics. Developing U.S. capability to use

ocean data from satellites effectively would help

maintain U.S. technological leadership and contribute to the efforts of U.S. value-added firms to

generate useful information products for the international maritime market.

Develop a dedicated civilian ocean satellite.

Through its flights of Seasat in 1978 and the

Nimbus series of satellites the United States has

demonstrated the utility of ocean remote sensing. In the future it may be appropriate for the

United States to operate a dedicated civilian

ocean remote sensing satellite. If current attempts

to coordinate ocean remote sensing with other

nations prove successful, it may be possible to

develop an international polar-orbiting platform

carrying some sensors dedicated to ocean sensing, or to build a U.S. platform that contains a

set of instruments complementary to those of a

platform built by other nations. In the latter case,

it would be essential to select the orbital parameters of each to allow the satellite to sense Earth

at complementary times as well.

‘‘s’’Oceanography From Space: A Research Strategy for the Decade 1985-1 995, ” op. cit.
Ch. 7—Remote Sensing From Space 325

APPENDIX 7A.–SATELLITE REMOTE SENSING

IN DEVELOPING COUNTRIES

Developing countries have made limited use of remote sensing from aircraft for mapmaking or for resource development and management since the 1930s

and 194os. When meteorological data from satellites

became available in the mid-1960s, developing countries began to take advantage of the opportunity these

systems afforded to gather information on current and

impending weather conditions.

By contrast, satellite remote sensing for the purposes

of resource development, on land or in the ocean, has

seen relatively little application in developing countries, primarily because the level of technical sophistication needed to process the data is very high and

the hardware and special training costly.

This section decribes the current use of remote sensing data in selected developing countries and investigates the potential these data provide for locating and

managing renewable and nonrenewable resources. It

identifies the factors that might contribute to the

growth of a market for remotely sensed data and data

products and suggests ways in which U.S. policies

could be improved to the mutual benefit of both the

developing countries and the United States.1

The Experience of Developing Countries

As the UNISPACE ’82 report notes, “The synoptic view

and the possibility of frequent repetitive coverage of

large and even inaccessible areas make, for the first

time, regional and global monitoring of renewable natural resources and changing environmental phenomena technically feasible and economically attractive. ”2

This statement is as true for the developing countries

as it is for those industrialized countries that already

possess a well-developed industrial and information

infrastructure. The problems lie in the ability of developing countries to take advantage of remotely

sensed data from space,

Weather and Climate

Developing countries have made significant use of

the availability of weather data supplied by satellite.

Synoptic, timely, weather data are of general use to

all countries, and are particularly useful in development projects. Beyond their use in warning of particu-

— — —

I For a related discussion of the potential effects of transfer of the Landsat

system to prwate hands, see Remote Sens/ng and the f%vate sector, op. cit.,

app. A.

“’Report of the Second United NatIons Conference on the Exploration and

Peaceful Uses of Outer Space, A/CON F,l Ol/10, 1982, para. 168

lady stressful conditions, such as severe storms or radical short-term climatic changes, they can also be

employed predictively in crop yield models to signal

potential crop failure.3 Most satellite weather data are

readily and routinely available via direct readout to

any government agency, nongovernment agency, institution, or individual anywhere in the world within

range of the satellites. One need only acquire the

proper ground receiving equipment. Neither permission, consent, nor payment is required. Because

ground receiving equipment is relatively inexpensive,

the meteorological system is highly accessible to most

countries of the world. Nearly 100 developing or

newly industrialized countries now own APT receiving stations. A few own High Resolution Picture Transmission Stations (H RPT). Many of these countries acquired the stations through the voluntary assistance

program initiated by the WMO as part of its traditional

effort to aid developing countries in learning to gather

and analyze weather data.

Earth Resources

Few developing countries have made much use of

Earth resources data from satellites, in spite of the fact

that these data could directly serve their development.

The

tion

1.

2.

3.

4.

objectives of collecting Earth resources informaare to:4

locate resources;

aid in evacuating resource investment;

provide information to be used for improving current management of natural resources; and

aid in the performance of certain government/

activities (particularly administerig land taxes,

etc.).

Although the resource information needs of developing countries are similar to those of the industrialized countries, their experience in attempting

to develop an adequate information base is different.

Whereas in most industrialized countries detailed

maps of all kinds (e.g., political, geologic, hydrologic,

agricultural) already exist to provide baseline data for

a resource survey, s many developing countries have

not even been mapped on the coarsest scale for any

%e dlsscussion in section on meteorological remote sensing also, Remote

Sensing and the Pr/vate Sector, op. cit., app. D.

Klris Herflrrdel, Natural Resource Information for Economic Development.

Resources for the Future, Washington, DC, John Hopkins Press, Baltimore,

MD, 1969, pp. 20-21.

‘1 n the U nlted States, for example, even the average citizen may purchase

topographic maps from the U.S Geological Survey at scales as detailed as

1 S0,000. In addition, State, county, and local maps are readily available,

as well as direct aerial survey photographs,
—.

326 . International Cooperation and Competition in Civilian Space Activities

reason. Because they lack useful maps, many developing countries can often use the coarse-scale mapping available from Landsat MSS imagery effectively

for initial survey of a resource problem. Map scales

of 1 :200,000 are possible with the 80-meter resolution of the MSS sensors aboard Landsat. Application

of this minimal record could help define the boundaries of particular resource problems, and identify specific needs for more detailed information. At that

stage, aerial photography and ground survey become

important.

Data needs are generally divided into two categories

●

●

of renewable and nonrenewable resources:

Renewable resources. Some 25 developing countries have used Landsat data together with aerial

photographs to gather information on crop or forest statistics.6 Because the agricultural production

and distribution system reacts slowly to emergency conditions, advance warning of drastic

changes in predicted crop production is necessary to prevent either famine or oversupply. For

this purpose, the synoptic view of satellites is

especially advantageous. These same countries

have also used Landsat imagery to monitor water

availability and to create maps delineating the

uses to which the land is now put, and to assess

the renewable natural resources that are available. Most of them feel that as land use intensifies,

they will need to put more effort into both shortand long-term planning based on satellite remote

sensing.

Nonrenewable resources. In sharp contrast to the

case for renewable resources, large national and

multinational firms have led the efforts to integrate Landsat data with aircraft and ground data

in the search for valuable minerals in the developing countries.7 Efforts to date have resulted primarily in locating oil. Although these firms are

willing to search for minerals in various developing countries, they are uninterested in sharing the

use of data processing technology because many

of their techniques are proprietary.

Most developing countries have received their

knowledge and training in the application of remotely

sensed data through programs instituted by AID,

NASA, and NOAA. Table 7A-1 lists the developing

countries that have received aid directly from the

United States for satellite land remote sensing and

meteorological projects. Other industrialized countries

and several multilateral organizations have also been

active in supplying similar aid.

bC. K. Paul, “Land Remote Sensing, ” Science, 1981.

7

1 bid.

Table 7A.1.—Agency for International Development

Remote Sensing Grants and Projects, 1971.85

Bangladesh

Bolivia

Costa Rica

Cameroon

Cape Verde

Chile

Ecuador

Egypt

The Gambia

Haiti

Indonesia

Jamaica

Kenya

Lesotho

Mali

Morocco

Niger

Pakistan

Peru

Philippines

Senegal

Somalia

Sri Lanka

Switzerland

Thailand

Tunisia

Upper Volta

Yemen

Zaire

Regiona/ Aid:

Asia

East Africa

West Africa

Sahel Regional Program

Gathering Information for Development

Although developing countries face the same general needs for resource information to aid their development process, the stated needs of individual

countries can vary widely. The following programs illustrate the variety of information needs that can be

met by using information derived from satellites. They

were chosen to be illustrative and are not comprehensive.

TANZANIA

Much of Tanzania’s economic development effort

is directed toward agriculture and animal husbandry.

Its strongest data requirements include:

●

●

●

current land use-and land suitability (distribution

of vegetation and soil types);

geologic and groundwater information to help

locate additional water sources, increase the efficiency of schemes for well-digging and water impoundment, and to help in siting new villages;

vegetative cover information for monitoring land

and range stress (drought and overgrazing are primary concerns).8

VENEZUELA

Venezuela plans to tap its natural hydroelectric potential in order to develop nonpetroleum energy

sources. The planning effort requires extensive surveys

to locate potential dam sites. Data required include:

● reconnaissance level maps over an entire region

to delineate drainage, watersheds, soils, vegetation and geologic structure;

 detailed maps of target areas to determine appropriate dam heights, flow rates, the commercial

potential of resources, and detrimental environmental effects.9

‘National Academy of Sciences, Remote Sensing From Space: Projects for

Developing Countries, (Washington, DC: NAS, 1977), p. 29.

gRobert W. Campbell, Jule A. Caylor, and Matthew R. Willard, “Rio Caura

Resource Inventory” (Diamond Springs, CA:RDA, 1982).
Ch. 7—Remote Sensing From Space 327

COSTA RICA

Costa Rica’s growing industrial and economic base

places increasing pressures on agricultural and range

land, and in turn, upon the nation’s forests. The result is that prime agricultural areas are threatened by

urban expansion at the same time that areas predominantly suited to forestry are being converted to marginally productive range and agricultural uses. Costa

Rica has expressed a need to monitor and control

these changes.10

SRI LANKA

In the mid-1970s Sri Lankan development planners

began a program to develop new agricultural land in

order to become self-sufficient in agricultural production. Program goals include:

● crop breeding;

● multiple cropping;

● soiI conservation;

● improved management of agricultural lands.

Sri Lanka began an agricultural base mapping program to provide information on soils, present vegetation, land use for siting new agricultural areas, and

topography for assisting irrigation planning and watershed management. Although earlier maps existed

they had not been updated since the early 1960s and

they were incomplete. ”

PERU

In Peru, the Officina Nacional de Evaluation de

Recoursos Naturales (ONERN) is to provide the Peruvian Government with inventory and evaluation of

Peru’s natural resources as well as an assessment of

the state of the environment and recommendations

for its protection. ON ERN’S objectives require extensive resource information:

 natural resources inventories oriented to Peru’s

development and resource management needs;

● natural resources inventories for conservation

policy planning;

● studies of the interactions of human and other

natural resources, with an emphasis on use and

preservation .12

1°T. K. Cannon, et al., “Application of Remote Sensing Techniques to Forest Vegetation Surveys in Tropical Areas and urban Fringe Land Use Problems In Coasta Rica,” m Proceedings of the Twelfth International Symposium

of Remote Sensing of Enwronment, (Ann Arbor, Ml: Environmental Research

Institute of Michigan, 1978), p. 2081.

I I Resources Development Associates, “Agricultural Resource Inventory and

Base Mapping in Sri Lanka, A Program Evaluation and Assessment, ” Los Altos,

CA NOV., 1976.

~luobert Campbell, et al., [and Use Inventory and Environmental planning Project: Peru (Los Altos, CA: RDA, April 1980).

BANGLADESH

Among other things, Bangladesh’s development

goals include disaster warning to prevent damage and

loss of life from severe storms, as well as increased

agricultural production and monitoring of crop production. These two areas generate a need for the following types of resource information:

cloud patterns and storm warning on a real-time

basis;

data on rainfall, soil moisture, hours of sunshine,

and crop stress, in order to monitor crop growth

and crop conditions;

data on land use and land use change to plan better agricultural development and irrigation;

flood patterns and water levels to plan better

cropping patterns. 13

DOMINICAN REPUBLIC

Forests represent one of the Dominican Republic’s

primary natural resources. Before an aerial photographic survey in 1965 and 1966, the Government of

the Dominican Republic believed that 40 percent of

its total land area was forested, 750,000 hectares in

high-quality pine. The survey showed that less than

11.5 percent of the land was actually in forest, and

only 215,000 hectares in pine. This information profoundly affected its previous planning estimates.14

Continued observation using satellite data could help

the country survey their forest resources on a regular

basis.

Potential Fishery Applications

To date, very little work has been done in developing countries with respect to fisheries development.

However, “new developments in marine-related

remote sensing, such as synthetic aperture radar for

wave studies, microwave radiometers for salinity

measurements, and multispectral scanners for

chlorophyll mapping”ls present new opportunities for

the use of satellites in fisheries development throughout the world.

Although U.S. research on using satellite remote

sensing for fisheries is in its infant stages, it has not

begun in developing countries. Generally, Landsat’s

IJH~rveY Ne~On, et al., Early warning Crop yield Modelling in Bangladesh

(Diamond Springs, CA: RDA, April 1982).

‘Organization of American States, “An Exploratory Survey of the

Dominican Republic, “ in Physical Resources Investigations for Economic Development, A Casebook of OAS Field Experience in Latin America, General

Secretariat, Washington, DC, 1969, pp. 212-214.

15Vic Klemas, “Technology Transfer to Developing Countries: Future Use

of Remote Sensing in Biological Marine Resource Development, ” Background paper for Ocean Policy Committee, National Academy of Sciences

Workshop on Future of International Cooperation in Marine Technology,

Science, and Fisheries, La Jolla, CA, Jan. 18-22, 1981.
328 . International Cooperation and Competition in Civilian Space Activities

sensors have very limited application to marine

studies; thermal infrared and microwave sensors have

shown good potential. While some developing countries receive low-resolution thermal infrared imagery

from the GOES satellites, they would not be able to

receive and analyze thermal infrared or microwave

data of high resolution from ocean satellites if they

were flying because they do not possess the high capacity computers needed to process such data. However, these kinds of data are necessary to pursue useful

analyses of the coasts and oceans. In addition, as the

previous section on ocean remote sensing emphasized, those applications require more research

and efforts to demonstrate whether they will work or

be cost effective.

The importance of accurate information about natural resources is clear, particularly as developing

countries strive for self-sufficiency. Economic development requires discovering what resources are available and then organizing the information so that informed decisions can be made about the development

and exploitation of natural resources. The key is the

information base. Most developing countries lack a

consistent, homogeneous, and complete data base

from which to work. They also lack the means to acquire, sift, and analyze the new data they need. The

preliminary surveys and maps they have made, largely

with the help of the United States and the European

countries, represent only the beginning of the long and

difficult process of information management.16

Institutional Factors Influencing the

Use of Satellite Remote Sensing

A variety of nontechnical factors, including institutional and political ones, affect the use of satellites in

developing countries.

Domestic Institutional Factors

It is in the routine use of data, not its initial collection, that the operational use of remote sensing data

meets its toughest test. ’ Therefore, in order to determine what type of interpretation and analysis procedures will best serve a developing country’s needs,

it is necessary to understand what internal institutional

and technological capabilities already exist in a given

country,

As one report18 suggests, prior to the development

of self-supporting satellite data users in developing

l%ee, for example, “Satellite Remote Sensing for Developing Countries,”

Proceedings of an EARSel-ESA Symposium, Igls, Austria, Apr. 20-21, 1982

(WA- SP-1 75).

ITNAS study, op. cit., P. 117.

18Ha~ey Wallender,et al., Technology Transfer and Management in Deve/o@ng Countries (Cambridge, MA: Ballinger Publishing Co., 1979), ch. 3.

countries, an institutional framework to support the

use of that data and a capacity for internal problem

solving are essential. In the absence of this homework,

transferring or selling technology to end-users does

little to help them achieve any of their objectives with

remote sensing data. Unfortunately, many international technology transfer projects have overemphasized

the immediate use of equipment and technologies and

have failed to aid in building an infrastructure or internal organization to support continued use of the

data. The Wallender study19 concluded that efforts to

build the technical capabilities associated with later

stages of development will fail unless the objectives

of earlier stages have been realized.

Because satellite data is likely to be used by many

interested parties, including hydrologists, geologists,

soils scientists, agricultural specialists, physical planners, or geographers, economies of scale can be

realized by promoting multiple uses of satellite data.

In other words, “the more numerous and diversified

the users of remote sensing are, the more economically feasible it is for a country to sustain a national

analysis capability.”20 In addition, given limited manpower and budgetary resources, a focused resource

and environmental information effort is also needed.

Many ways of coordinating such activity are possible,

depending on the country involved, its needs, resources, and political situation. The transfer agent,

whether USAID or some private consulting firm, will

not succeed until the developing country has developed an internal organization that can decide on its

own to use satellite products and satellite technology.

Foreign aid spent on transferring technology (hardware) might be better spent in developing an institutional and organizational infrastructure conducive to

using remote sensing data.

The Training Constraint

Closely related to the development of an effective

organizational context is the need to familiarize

thoroughly the users of the technology with the technology itself and its value for helping them perform

their work. This primarily means training people and

coordinating manpower and equipment.

As a review of AID projects in the Sahel pointed out:

[the] factors which impeded the maximum transfer”of technical expertise to the counterparts and the

application of results to development programs were:

the scant availability of appropriately trained counterpart resource analysts; and the lack of an extended

period of practical training and technical assistance after

inventory completion, during which expatriate analysts

~91bid.

20Remote Sensing From Space, op. cit., P. 125.
Ch. 7—Remote Sensing From Space ● 329

could gradually withdraw as the host country personnel gained self-sufficiency in the implementation process. These are issues which can and should be accounted for in future resource inventories in Africa.

They must be considered in the preliminary stages of

project design by the funding agency and the host country, so that adequate time and resources for them are

allocated .21

In developing countries where trained personnel do

not exist, training is critical, not only in resource survey and map interpretation and mapmaking techniques, but also in equipment operation and upkeep.

Where a country does not have the personnel or tools

to provide upkeep on electronic equipment, it quickly

becomes useless.

Training in both general topics and specific subjects

is needed. General training includes educating scientists and policy makers about the technology and its

limitations and advantages. Such exposure is essential to starting a country on a road toward the adoption of the technology.

Specific training involves coupling the training of

specialists in the fields to be explored (e.g., weather,

climate, water resources, geology) with training in the

interpretation of remotely sensed data. This process

may be extensive and take several years. Such training may well consist of courses in the United States,

on-the-job training either in the United States or in the

host country, and day-to-day interactions between foreign and host country participants.

Training programs of even the best quality may not

be successful, however, unless developing countries

are able to commit professional personnel on a longterm basis:

In most VVest African countries, the supply of educated scientists and planners is extremely limited. The

few specialists who do exist are often quickly cycled

through government hierarchies and do not remain in

positions where their project experience can be technically or managerially utilized. The shortage of scientists sometimes necessitates that government administrators be given assignments that would be more

appropriately filled by people trained in the earth

sciences. This was the case in the Volta Basin project

where three of the seven counterparts were government administrators or department heads who already

had full-time administrative positions and corresponding responsibi lities.22

These administrators usually return to their old

duties and are unable to continue supporting the use

of remote sensing:

program success also requires the full commitment

of scientifically trained counterparts for an extended

period immediately following the inventory, during

which resource development programs are initiated.

The inclusion and funding of this extended implementation period is a critical element of any natural resource

inventory. It is also one which has often been overlooked by sponsor agencies in project design. The result is that priorities are shifted, counterparts resume,

or are reassigned to other duties, and inventory products are shelved. Development projects may then continue on an ad hoc basis, without the benefit of the

management resource.23

To develop self-supporting users who can generally

solve their own problems, it will be essential to construct long-term, intensive training programs. If training is treated haphazardly, the potential for satellite

applications in developing countries will be severely

hampered.

In sum, the development of satellite remote sensing users in developing countries will rely on effective technology transfer that encourages these countries permanently to adopt satellite technology. Such

technology transfer will be successful only if it assists

in the development of an effective organizational context. However, the adoption of satellite technology in

developing countries also depends on political factors.

Political Constraints

During the last decade, the control of information

has emerged as a critical component of the NorthSouth debate over a New International Order. In particular, information that is carried across national

boundaries without the consent of all parties has been

seen by some countries as a threat to their national

sovereignty and their “sovereign right” to control information about themselves and their resources (including resources within a 200-mile Extended Economic Zone). Earth resource sensing satellites pose a

unique problem because they collect information

about one country and disseminate it to many other

countries .24

Sovereignty issues have been discussed and debated

throughout the legal and political debate in the U. N.,

focusing on the development of an international

regime for Earth resource sensing satellites. The sovereignty debate has centered on the desire of some

countries to control the dissemination of data obtained

about their country from space. This issue is the heart

of the argument in the U.S. debate; a prohibition

against open dissemination without consent is contained in an early Argentine-Brazilian draft treaty, and

21 Lynda Hall, “Factors in the Effective Utilization of a Landsat Related inventory In West Africa” (Baltimore, MD: National Conference on Energy Resource Management, 1982), p. 4.

Zzlbld , p. 5

2Jlbid., p. 6.

Zdsee discussion on this and SI milar Issues in UNISPACE ‘82.. A Context

for International Cooperation and Competition, op. cit., pp. 24-28,
330 ● International Cooperation and Competition in Civilian Space Activities

also in an early French-Russian set of draft principles

regarding control of remote sensing from space. zs

The issue stems from a basic disagreement over control of information. Whereas the United States admits

to a nation’s sovereignty over its natural resources, it

does not agree to a nation’s sovereignty over information about those resources, Developing countries

fear being exploited by other countries and especially

by multinational corporations. The importance of information is dramatically evident in the search for new

forms of mutually agreeable relations–new contracts-between multinational corporations and developing countries. Differential access to information and

the ability to apply it are crucial elements in bargaining power between multinational corporations and the

developing countries.

The United States questions developing countries’

concerns over economic exploitation on three

grounds:

First, developing countries are entering into mature,

mutually beneficial resource exploitation relationships

with foreign interests, without forswearing their rights

to such ultimate sanctions as nationalization andlor expropriation. Second, the physical control of resources

and of access to resource sites are the trump cards, not

possession of tentative and unverified data. Third, as

developing countries acquire their own remote sensing expertise, whether indigenous or procured from

outside consultants, the margin of information disadvantage can lose a good measure of its significance.26

The United States further suggests that imposition of some form of restrictive data dissemination regime would create two “classes” of countries; those with data acquisition capabilities and

those without. It has argued that this would create

more inequality than a regime of open dissemination.

Such a point of view suggests that developing

countries should emphasize efforts to develop capabilities to use technology and data relevant to

their capacities while working to maintain equal

access to worldwide data and information networks. There is, however, a serious tradeoff involved here. If developing countries make:

. . . vigorous attempts to be integrated into the international data market, many of them may face the prospects of increased dependence on imported technology and equipment; on the other hand, if they stand

aloof, they may have the problems associated with a

Zssee u .N. Document A/AC,1/1047 (Oct. 15, 1974), Article IX of Latin

America Draft Treaty. Although positions on this issue have shifted, it is still

a major point for debate.

2hRemote Sensing from Space, op. cit., pp. 147-148.

very limited access to the rapidly expanding pool of

machine-readable data.27

The avoidance of this tradeoff will be extremely difficult. It is important, though, that information asymmetries (either real or imagined) be dealt with, because it is likely that an increase in the knowledge and

capabilities of developing countries would lead to

smoother international negotiations. At present, international negotiations over access to data and information may be clouded with political rhetoric from

countries that feel they are at an information disadvantage; perceiving asymmetries in access to information,

they tend to block agreement.

Cruise O’Brien and Helleiner suggest that “the consequences of imperfect information are nowhere more

dramatic than in the resource sector.”28 Private users,

with greater information in early stages of resource exploitation, usually strike what appears to be a good

bargain. As exploration proceeds and the host government learns more, it may find that it gave away too

much early on. This leads to what is known as the “ob

solescing bargain.” When this occurs, host countries

push for renegotiation and, in fact, a great deal of renegotiation has occurred in recent years. 29 As a result, an impasse “has developed between host governments in developing countries and the resource

transnationals (multinationals) which has produced a

marked decline in resource exploration and development in the Third World in recent years which is in

the interests of neither. 30

The elimination of information asymmetries might

provide a common knowledge base and common

ground for negotiation. Increased knowledge in developing countries would enable them to bargain

more effectively and efficiently.

The issue of dependence cannot be easily dismissed.

Developing countries do not want, for political and

practical reasons, to become dependent on one

source of resource information vital to their national

planning–particularly a source over which they have

no control. As dependence increases, the demand for

a voice in the planning of the system will grow.

It should be noted that U.S. policies to make data

and technology available have to a great extent mitigated the most serious concerns of developed and deZ

7

’’Transnational Corporations and Transborder Data Flows: A Technical

Paper,” U.N. Centre of Transnational Corporations, ST/CTC/23, New York,

1982.

Z@Rita Cruise O’ Brien and Gerald Helleiner, “The Political Economy of information in a Changing International Economic Order,” in /nternationa/

Organization 34:4, Autumn 1980, p. 457.

Z9U. N. commission on TranSnation,31 Corporations, “Transnational Corporations in World Development: A Re-Examination, ” U.N. Economic and

Social Council E/CIO/28, Mar. 20, 1978.

JOJ, Favre and H. La Lauch, “Natural Resources Forum, ” VO!. 5, No. 4 (Boston, MA: D. Ridel Pub. Co., October 1981), pp. 327-347.
Ch. 7—Remote 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 ternot only in the French and Japanese remote sensing minated. 31

programs, which will fly Landsat compatible sensors,

but also in the developing countries which focus their

space activities around remote sensing. The effect of j! second u N lsp,4cE Conference, Dratl Report of the cOfJf6W’nCe,

the Landsat system and Landsat policy has been to A/CONF.101/3, Mar. 20, 1982., p. 77.
332 . International Cooperation and Competition in Civilian Space Activities

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

Average(*

) Ceased

Satellite Purpose(l) Launch Altitude (km) Operation Remarks(3)

— — -

TIROS I

TIROS 2

TIROS 3

TIROS 4

TIROS 5

TIROS 6

TIROS 7

TIROS 8

Nimbus 1

TIROS 9

TIROS 10

ESSA 1

ESSA 2

Nimbus 2

ESSA 3

ATS 1

ESSA 4

ATS 2

ESSA 5

ATS 3

ESSA 6

R

R

R

R

R

R

R

R

R

R

o

0

0

R

o

R

o

R

o

R

o

04/01 /60

11 /23/60

07/12/61

02/08/62

06/19/62

09/ 18/62

06/19/63

12/21 /63

08/28/64

01/22/65

07/01 /65

02/03/66

02/28/66

05/15/66

10/02/66

12/06/66

01 /26/67

04/05/67

04/20/67

11 /05/67

11 /10/67

720

672

760

773

694

694

645

749

S/677

S11630

S1792

S/765

S/1376

S/1 136

S/1427

G135,765

s/1373

—

S11379

G135,815

SI1437

06/19/60

02/01 /61

10/30/61

“06/12/62

10/1 1 /63

10/ 11 /63

02/03/66

01 /22/66

09/23/64

02/15/67

07/03/66

05/08/67

10/16/70

01/18/69

10/09/68

10/16/72

(pictures)

10/06/67

—

02/20/70

10/30/75

(pictures)

11/04/69

First weather satellite providing cloud

cover photography.

First APT satellite.

Carried AVCS, APT,and High

Resolution Infrared Radiometer for night

pictures.

First TIROS satellite in Sun-synchronous

orbit.

First satellite in the operational system;

carried 2 wide-angle TV cameras.

Carried APT cameras. APT carried onall

even-numbered ESSA satellites

Carried first AVCS cameras. ABCS

carried on all odd-numbered ESSA

satellites.

WEFAX discontinued

December 31, 1978.

Unstable attitude-data

WEFAX discontinued

December 31, 1978.

not useful.
Ch. 7—Remote Sensing From Space . 333

Average[

2

) Ceased

Satellite Purpose(l) Launch Altitude (km) Operation Remarks(3~

ESSA 7

ESSSA 8

ESSA 9

Nimbus 3

ITOS 1

Nimbus 4

NOAA 1

ITOS B

Landsat 1

NOAA 2

Nimbus 5

ITOS E

NOAA 3

SMS 1

NOAA 4

Landsat 2

SMS 2

Nimbus 6

GOES 1

NOAA 5

GOES 2

0

0

0

R

R/O

R

o

0

R

o

R

o

— 0-

RIO

0

R

R/O

R

0

0

0

08/16/68

12/ 15/68

02/26/69

04/ 14/69

01 /23/70

04/08/70

12/1 1 /70

10/21 /71

07/23/72

10/15/72

12/12/72

07/16/73

11/06/73

05/17/74

11/15/74

01/22/75

02/06/75

06/12/75

10/16/75

07/29/76

06/16/77

s/1440

S/1429

S/1456

S/ll00

S/1456

S/1108

S/1438

—

S/918

S/1460

S/lll 0

—

s/1510

G/35,788

S/1460

S/918

G/35,800

s/lll 0

G/35,796

s/1511

G/35,787

07/19/69

03/12/76

11/15/73

01/22/72

06/17/71

09/30/80

08/19/71

—

01/16/78

01/30/75

03/29/83

—

08/31/76

01/29/81

11/18/78

03/31/83

08/05/82

03/29/83

—

07/16/79

—

Provided first vertical temperature profile

data of the atmosphere on a global

basis.

Second generation prototype.

First NOAA funded second generation

satellite.

Failed to orbit.

First operational satellite to carryall

scanning radiometer.

Failed orbit.

First operational satellite to permi(t direct

broadcast of VTPR data.

Deactivated. Boosted out of

geosynchronous orbit,

Deactivated.

On Standby.

Deactivated. Boosted out of

geosynchronous orbit.

First NOAA operational geostationary

satellite; 130°W on standby.

Deactivated.

Second NOAA operational geostationary

satellite; 113°W supporting Central

WEFAX.
334 ● International Cooperation and Competition in Civilian Space Activities

Average(2) Ceased

Satellite Purpose[l) Launch Altitude (km) Operation Remarks (3)

Landsat 3

GOES 3

Seasat 1

TIROS-N

Nimbus 7

NOAA 6

NOAA B

GOES 4

GOES 5

NOAA 7

Landsat 4

NOAA 8“

GOES 6

NOAA 9

R

o

R

RIO

R

o

0

0

0

0

0

0

0

0

03/05/78 S/918

06/16/78 G/35,784

06/26/78 850

10/13/78 S/850

10/24/78 S/954

06/27/79 S/807

05/30/80 –

09/09/80 G/35,782

03/31 /83

—

10/10/78

02/27/81

—

—

—

—

05/22/81 G/35,785 –

06/23/81 S/847 –

07/ 16/82 S/7oo –

03/28/83 S/815 06/12/84

04/28/83 G/35,791 –

12/12/84 S/815 –

First Landsat with infrared capability.

Now on standby.

On standby. Moving to 135°W.

Electrical failure.

Deactivated.

Carrying Coastal Zone Color Scanner.

First NOAA funded TIROS-N system

satellite.

Failed to achieve an operational orbit.

First geostationary satellite to carry the

VISSR Atmospheric Sounder (VAS)

which has now failed. At 139°W.

Provides west, WEFAX, and DCS.

At 75°W; also carried VAS. Now failed.

Provides east DCS, WEFAX, and relay

of GOES 6 imagery.

Second NOAA funded TIROS-N system

satellite.

Carries MSS and TM.

Had search and rescue capability.

Alternates between 98°W and 108°W.

Only spacecraft with operating VAS.

Has search and rescue capability and

sensors for ozone and earth radiation

budget.

(l) R. Re~earch; O.operations; R/O-Operational protowpe.

~)s-sun-synchronous; G-Geosynchronous,

~) ApT-Automatic picture Transmission; AVCS-Advanced Vidicon Camera System; WEFAX-Weather Facsimile; VTPRVertical 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
Contents

Page

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

Foreign Policy . . . . . . . . .

Foreign Sale ofU.S. Techr

Cost Savings . . . . . . . . . . .

Policy Options. . . . . . . . . . .

Competition inMPS . . . .

Cooperation . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 361

...,, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 361

ology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .361

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , 362

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 362

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 363

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 365

Table

Table No. Page

8-1. Characteristics of Shuttle Payload Carriers . . . . . . . . . . . . . . . . . . . . . . . ....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. NASAMPS Funding Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......363
Chapter 8

MATERIALS PROCESSING IN SPACE

INTRODUCTION

The primary motivation for pursuing materials

science and engineering in space is to use this

low-gravity environment for scientific and commercial applications.1 Removing the effects of

gravity offers a new dimension in controlling

process variables such as convection, composition, and fluid flow. This may create opportunities

for understanding and improving ground-based

production methods and, where economical,

manufacturing select materials in space.

NASA research on materials processing in

space (MPS) research started in the late 1960s

with relatively simple demonstration experiments

in solidification, fluid dynamics, and electrophoresis conducted during the Apollo missions. Further MPS experiments were carried out during

the three Skylab missions and during the ApolloSoyuz Test Project (ASTP). During the hiatus of

manned space flight, between Apollo and the

Shuttle, NASA continued its MPS research by

using the SPAR (Space Processing Applications

Rocket) sounding rocket program, drop tubes and

towers, and research aircraft flying parabolic trajectories. The majority of future MPS research will

be conducted on the Shuttle, free-flying platforms, and eventually on a space station.

Neither the scientific nor the commercial value

of materials research in microgravity is fully understood. Although there may be near-term commercial MPS applications (e.g., certain pharmaceutical products), the true value of the microgravity sciences will not be known until years of

basic research and significant improvements in

space-based hardware have been accomplished.

The National Aeronautics and Space Administration’s (NASA) MPS program, operating with a modest annual budget ($27 million in 1985), has identified several scientifically interesting phenomena

‘The gravitational attraction of Earth on a spacecraft in a 400-km

orbit is only about 12 percent less than it would be if it were on

the Earth’s surface. However, the phenomena of weightlessness

occur because the spacecraft and its contents are in a state of free

fall. A spacecraft which has achieved orbital velocity has a gravity

environment of about 10-7 g (1 ten-millionth of Earth’s gravity).

with potential commercial value. To date, this

program has met with limited success both in attracting private sector participants and in identifying commercially valuable products and services. Nonetheless, there is a strong belief in both

the scientific and industrial communities that MPS

research will eventually lead to dramatic breakthroughs in terrestrial and space-based products

and processes. To assist this process, NASA established an Office of Commercial Programs in September 1984 to provide a focus for NASA research with potential application and to expand

U.S. private sector investment in technologies

with commercial potential.

MPS research and hardware development are

being pursued with interest in Europe and Japan.

In Europe, West Germany has long maintained

the most vigorous national MPS program; the European Space Agency (ESA) has recently begun

to conduct a wide range of MPS activities. European enthusiasm for MPS research stems from

ESA’S commitment to the development of SpaceIab and, as in the United States, from a belief that

basic MPS research may eventually lead to important scientific and economic rewards. As a result of ESA Spacelab and other MPS activities, it

is likely that Europe will become an important

source of published information on the behavior

of materials in microgravity. The Europeans have

positioned themselves well to exploit future MPS

products and services if they prove commercially

valuable. 2

MPS is not yet an area of international commercial competition: there are no MPS products

and the demand for equipment and services is

generated primarily by the various government

space agencies. The most important international

issue in MPS is how to make the most effective

use of cooperation to share the costs of research

and to realize the benefits of this new technology

more quickly.

ZForeign ability to compete in space manufacturing will depend

strongly on availability of the Shuttle to foreign users or on the development of suitable foreign launch vehicles and carriers.

337
338 ● International Cooperation and Competition in Civilian Space Activities

Some of the MPS potential applications for the

microgravity environment are:3

●

●

●

Processing of biological materials: Such diverse tasks as the isolation of beta pancreatic

cells to determine how the production of insulin is regulated, the isolation of cells from

organs that produce various hormones and

enzymes such as urokinase and erythropoietin, and the purification of proteins for research and as pharmaceutical products may

be accomplished in microgravity. On Earth,

convection, sedimentation, and buoyancy

inhibit the separation of certain lighter-density materials. In microgravity, separation

techniques such as electrophoresis, isoelectric focusing, and suspension cell culturing

may be accomplished with greater efficiency

and higher purity.

Production of large perfect crystals: It may

be possible to produce certain types of crystals in space for use in semiconductors, solar

ceils, infrared detectors, and other electronic

devices. On Earth, the chemical homogeneity and size of crystals are limited by convection- and gravity-induced growth defects.

It may be possible to control these parameters and minimize defects in the microgravity

environment of space.

Production of glass and ceramics: The microgravity environment may allow the production of special glasses that are useful in optical fibers, high-energy laser applications, and

fusion research. Use of containerless proc-

— —

3See: Materiak Processing in Space, Committee on Scientific and

Technological Aspects of Materials Processing in Space, National

Research Council, 1978; Materia/s Processing in Space: Ear/y Experiments (Washington, DC: NASA SP-443, 1980); Materials Processing in the Reduced Gravity Environment of Space, G. E. Rindone (cd.), Proceedings of the Materials Research Society, vol. 9,

1982.

●

●

essing could eliminate the problems caused

by nucleation and reduce trace impurities

that limit the applications of high-purity

glasses. Such space-based techniques could

extend the glass-forming range of many materials and result in new and unique glasses

with exotic properties. MPS research may

also help to improve glass processing on

Earth by providing information on how to

eliminate gases in glass, and improving

homogeneity through chemical interaction.

Ceramics must be prepared by sintering at

such high temperatures that they are almost

invariably contaminated by the container in

which they are made. Containerless processing may offer valuable research opportunities

for the preparation of high-purity ceramics.

Studies of fluid and chemical processes: Such

studies would be designed to understand the

effects of convection. This research would

be applicable to the study of continuous-flow

electrophoresis; dendritic growth processes;

the growth of very delicate organic crystals;

and the nucleation, growth, and coalescence

of bubbles, flocculants, colloids and hydroSOIS. Apart from the basic scientific interests,

such studies have important applications in

many industrial processes.

Investigation of metals, alloys, and composite materials: Microgravity allows research

into the basic properties of pure metals,

macrosegregation and microsegregation during solidification of alloys, the role of gravitydriven convection in the microstructure of

castings, and the preparation of alloys or

composites having components with large

density differences. Space-based metallurgical research may result in the development

of terrestrially useful products such as hightemperature turbine blades and new battery

technologies.

MPS ACTIVITIES IN THE UNITED STATES

NASA Research istrator for the Office of Space Science and Applications (OSSA) and is directed and adminisThe 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 Scienvision) is a responsibility of the Associate Admin- tific Advisory Committee, determines policy, ob-
Ch. 8—Materials Processing in Space 339

jectives, and priorities, and allocates program resources. NASA materials processing research is

being conducted at Marshall Space Flight Center, Jet Propulsion Laboratory, Johnson Space

Center, Lewis Research Center, and Langley Research Center. There are also approximately 100

university and industrial investigators currently

working with NASA on MPS-related projects. ’$

NASA solicits proposals for research tasks from

the scientific community and funds them on the

basis of merit (established by a peer review process) and relevance to current NASA programs.

NASA’s research activities in MPS have focused

on the role played by gravity in materials processes and the development of better control of

4Hearings on Materials Processing in Space, Before the Subcommittee on Space Science and Applications of the House Committhe composition, structure, and morphology of

materials processed in space. The MPS program

currently supports research in metals and alloys,

electronic materials, biotechnology, glasses and

ceramics, combustion, and fluid dynamics and

transport phenomena. s

NASA still uses sounding rockets, drop-tubes

and towers, and research aircraft in its MPS work;

however, the Shuttle is, at present, the only

means by which to conduct long-duration microgravity research. In order to facilitate Government

and private research on the Shuttle, NASA has

developed or encouraged the development of a

range of Shuttle-related, reusable MPS hardware.

Although this equipment is described in greater

detail later in this chapter, it is useful for the purposes 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, Microgravity Science and Applications Division, Sept. 14, 1983. Slbid.

Table 8.1 .—Characteristics of Shuttie Payload Carriers

—-—-

GAS HITCHHIKER-G SPARTAN

Telemtry None Real-time downllnk of serial data d up to 14 Mbps None

Polntlng None Ilmlng of payload opemt!o. s can M cmdlnated Shuttle bny pointing possible z 3 arc-mln stellar : 1020 .3 K.sec S O I.,

wllh m+r payload po, ntlng raqulremems Ttu more

S Xlfl C re@fefnents the nwe YOU MM you r

oppormnkm

Payload Size 1975 Inches radius 2825 !nches or 14 13 inches hqh Dependtn! on CG Sue of SPARTAN carrmt IS m,ss,cm ~Pn~nt

Dhnensions of SPARTAN 1 are 31 89 I 31 89 , 2205 I,,,

For SPARTANS 2 and 3 slMIc ● nvelop r.dial IImIt, ~f

8563 ● cross the bay ● nd S1 18 ● lcmg the bay

Psyload Wmght 200 Ibs IDO Ibs Or 60 Ibs Currently the 141tchh#ker.G IS restrkled to payloads 500 Ibs (for experlmenl)

wetghlng 10ss lhsn 750 pounds twth ● chotce O?

several modes of ● ccommodations depending on

sam ● nd Weight

Last Acc8,8 Befo,e 2-3 months 2 months 1 month

Launch

F1r8t Access After 2 Weeks

Lmdkng

2-3 weekc 1 week

Mlaskm Spulallct Dpemte two toggle swItchas snd power on+ff switch L)mnti Pre-relmti checkout, gwno go ● la!”, ch~k

Pa ftlclpatlon pce.rekease of bltef ● nd payload Cwbeniatlo”

release recapture

Fmquoncy of Launch Approximately SO per yew, 29 have flown ● s of Currently ooe evefy SIX months

OppO@.nlty

2 year bulldlng to 11 by 1990

Octobol 1s64

Testing fioqulmrnents 591 * Sdrty w a y

Led T!me 11.13 month- Lmfore launch SIX mooths from Initiation to Night In.wwnw-d dependent with ● m~nlmum 0! nine rnomh.

OOcuwmnt*tlOn Dfswlngs, Dk.cwkcsl snd m.chankd schemal~cs OOcuwmnlstJOn rqukements currently under Intertace ~fmllmn ● nd safety pack~.

chamkal ● nd bkoqcal balance equmtlona. heat flow development

dbgrams, smembly ● nd handllng procedures

sdety hazard repwls

M18alon D“ratlon Shuttle ftight duration or Ilmlted by battery supply Shunk@ IUghl dur.tloo 40 hours

Power Batlwy supply (Customer SUpphd) Available through fhe Shuttle A $Ingle payload Battery Supply (GSFC SuPplled)

has ● maximum S00 w ● vailable the total p8yloads

have 14&3 w ● vadable

Upllnk or Oownllnk None An ● synchronous dowdllnk chwmel ● 1200 bsud None

An ● synchronous up41nk ● t 121XI baud Medium rate

downllnk channd 01 16 Kbp9 1014 Mbps

R.mota Cc.”t,ol Nom A HtichhUmr.G c“slorne, may bend ● Ilmllod number Prgprcqrammed (mlcrocomD”tor)

Pmslbklnloa of bllevel ● nd serld commands 10 the payload

. — —

SOURCE: “Attached Shuttle Payload Carriers, Versatile and Affordable Access to Space,” NASA, Goddard Space Flight Center, 1984,
340 ● International Cooperation and Competition in Civilian Space Activities

Get-Away Special (GAS) Canisters

The GAS program was developed by NASA to

encourage researchers to take advantage of the

unused capacity which exists on most Shuttle

flights. GAS canisters, which are little more than

hollow cans mounted in some manner on the

Shuttle (fig. 8-l), come in two sizes: 5 cubic feet

for payloads weighing up to 200 pounds and 2.5

cubic feet for payloads weighing up to 100 pounds.

The experimental equipment flown in the canisters is developed by the user subject to NASA

safety regulations. Prices charged for flying the

GAS canisters are less than full Shuttle prices and

range between $3,000 and $10,000.

Cylindrical

pressure enclosure

Interface —

equipment

plate

Carriers

Carriers serve a similar goal to that of the GAS

program–namely, to maximize the use of the

Shuttle bay and reduce the cost of flying small

payloads into space. NASA’s current carrier program, Hitchhiker, is based on the mission-peculiar support structure (MPESS) developed by Teledyne Brown Engineering for Marshall Space

Flight Center (fig. 8-2). Although Hitchhiker is still

in the development stage, the MPESS—basically

a truss bridge on which GAS canisters or other

larger experiments are mounted–was used on

Shuttle mission 7. Unlike the GAS canisters or

MPESS, Hitchhiker will provide limited power

and command and control functions.

Figure 8-1.—Shuttle Get-Away Special Canister

r 1

I I

— Insulated

cover

— Experiment

mounting

plate

Experiments

–- __- i

SOURCE: National Aeronautics and Space Administration.
Ch. 8—Materials Processing in Space ● 341

Photo credit: Nationai Aeronautics and Space Administration

This view shows the open cargo bay of the orbiter Challenger in the Orbiter Processing Facility. On the left, the Canadianbuilt Remote Manipulating System can be seen and six of the seven Get-Away Special Canisters are just below it.

The other Get-Away Special Canister is in the front right side of the cargo bay.

Spacelab

The Spacelab is a pressurized module designed

to be carried in the Shuttle payload bay. It is a

laboratory that allows MPS and other types of research to be done in a “shirtsleeve” environment

(fig 8-3). Spacelab was developed by ESA, but

pursuant to prior agreements, was transferred to

NASA upon completion.

Free-Flyers

Free-flyers are unmanned carriers designed to

be deployed and retrieved by the Shuttle. Such

free-flying carriers will allow experimentation independent from Shuttle environmental or time

constraints. Relying on technologies originally developed for sounding rockets, NASA has produced a free-flyer called the Spartan. This freeflyer will be used for astronomical and astrophysical payloads which require precise celestial

pointing. Spartan will be able to operate independently from the Shuttle for up to 40 hours.

NASA is also working with Fairchild industries

to develop a free-flyer called “Leasecraft.” The

West German Government and the West German firm MB B/ERNO developed the Shuttle Pallet Satellite (SPAS) as the first free-flyer.
—

342 ● lnternationa/ 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 Admlnlstration.

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

SOURCE: National Aeronautics and Space Admlnlstratlon.
Ch. 8—Materials Processing in Space ● 343

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

also tried to encourage early U.S. private sector

commercial investment in MPS. NASA wanted

the private sector to participate in NASA programs in a more creative manner than was possible under normal procurement contracts. To accomplish this goal, NASA established the Joint

Endeavor Agreement (JEA) and the Technical Exchange Agreement (TEA). These are contractual

agreements between NASA and industrial partners to cooperate on the definition, development

and, in some circumstances, flight-testing of MPS

experiments and hardware. Under these arrangements, no funds are transferred between NASA

and the private sector participants. The type of

relationship chosen by the private sector participants marks the degree of the signatories’ commitment:6

● Technical Exchange Agreement (TEA): The

TEA is for companies that are interested in

the application of microgravity technology,

but are not ready to commit to a specific

space flight experiment. Under such an

agreement, a company may conduct experblbid.

38-797 0 - 85 - 12 : QL, 3

Photo credt: Nat/onal Aeronautics and Space Administration

The Space Shuttle Challenger’s Canadian-built remote

manipulator arms grasps the Shuttle pallet satellite

(SPAS-01), during proximity operations on June 22. The

scene has within it a few reflections on the window

through which it was photographed. SPAS-01 was

developed by the West German firm Messerschmitt-

●

Boelkow-Blohm GmbH (MBB).

iments in NASA grou rid-based faci Iities including drop tubes, drop towers, and aircraft

in order to determine whether a more elaborate space experiment is justified. Using the

TEA, John Deere and Dupont have processed samples in the Marshall Space Flight

Center drop tube and KC-1 35 aircraft. Joint

studies of convection in electrodeposition

have been carried out by INCO, and studies

of the growth and purification of mercury

cadmium telluride are in progress with Honeywell’s Electro-optical Division. In addition,

there are some 20 new research activities

that are the functional equivalent of formal

TEA-sanctioned projects. Research topics

range from pharmaceuticals, to optical fibers,

to exotic chemistry.

Joint Endeavor Agreement (JEA): The JEA is

an arrangement whereby NASA and a pri-
344 ● International Cooperation and Competition in Civilian Space Activities

vate sector partner share the costs and risks

of developing commercial space ventures.

The JEA generally requires a larger financial

commitment on the part of the industrial participant than does the TEA. Under a JEA,

NASA’s partner is expected to develop the

experimental apparatus and to provide

NASA with limited access to such equipment; NASA, in turn, agrees to provide access to terrestrial facilities and a specified

number of space flights. In some cases, data

from JEA experiments may be held as proprietary information by the firm. At the end

of the JEA, should the venture become commercially viable, the company would have

to pay the normal Shuttle price for all future

flights. JEAs are now in effect with McDonnell Douglas, Microgravity Research Associates, Fairchild industries, Spaceco, Ltd., 3M

Corp., and Martin Marietta.7 NASA is currently giving serious consideration to a number of other JEA proposals.

Although only a small portion of NASA’s annual MPS budget has been devoted to commercial activities, these activities have been widely

publicized by NASA and the popular press.8 This

publicity has led to disagreements within NASA

and the scientific community about the wisdom

of emphasizing the yet-unproved commercial

value of MPS technology. The potential for development of highly profitable space industries

lends support to NASA’s desires for stable or increasing science budgets and a space station. On

the other hand, NASA recognized that a

premature emphasis on yet-unproven technology

could damage its reputation in the scientific and

manufacturing community and jeopardize future

funding for science projects.

The Fairchild Industries JEA involves the building and flight-testing

of a free-flying platform called “Leasecraft.” Although Leasecraft

could be used for MPS research or production, it is not limited to

this application and may be used as a “common bus” for other

payloads.

al_Jntil recently, only about 3 percent of the NASA MpS budget

was devoted to purely commercial activities. This figure is likely

to increase substantially as the Office of Commercial Programs increases its scope of operations.

The Private Sector

Although there have been some recent indications of increased interest, the initial private sector response to NASA’s commercial MPS program

was quite reserved. There are several reasons for

its reservations:9

Absence of Proven Products

or Processes

The commercial value of low-gravity manufacturing remains largely an interesting conjecture;

in the absence of conclusive experimental results

or existing products, the risks involved are simply

too high for most private firms. At least for the

near future, the responsibility for proving the

technical and economic feasibility of new space

technologies will rest on the Government, acting alone or in joint ventures with the private

sector.

Few Attractive Investments

Although a number of MPS products, processes,

and services are currently being discussed, few of

these are attractive investments. Generally, investments in MPS research involve high costs, considerable risks and long or uncertain lead times

before a return on the investment could be

realized.

NASA had hoped that the JEA and TEA programs would encourage a wide range of commercial space activities, but only six JEAs have been

signed since the programs began in 1980. The

first of these was signed in January 1980 with

McDonnell Douglas Astronautics Co. (MDAC).

Its purpose was to investigate the commercial viability 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

towards development of a multiuse metallurgical

furnace. This JEA was discontinued in January

1983 because of GTI’s inability to market their

9U .s. Congress, Office of Technology Assessment, Civilian space

F’o/icy and Applications, OTA-STI-1 77 (Washington, DC: U.S. Government Printing Office, June 1982), pp. 219-220, 224-229.
Ch. 8—Materials Processing in Space ● 345

. .

.“”

/ /

#.. ” - ”

. . 8 , ● 9

. ●

.

. ● ✎☛ ✎

✎ ✎

“ .

Photo credit: McDonnell Douglas

McDonnell Douglas-Ortho continuous electrophoresis device.

concept successful ly.10 The third JEA, signed in

April 1983 with Microgravity Research Associates

(MRA), is directed to the study of gallium arsenide

crystal growth. The fourth JEA, with Fairchild industries, has as its subject the design and flightiest of the free-flying Leasecraft, The fifth JEA, with

Spaceco, Ltd., is for the development of a Shuttle payload bay environmental monitoring instrument. The next JEA, with the 3M Corp., is for the

investigation of organic polymers, crystal growth,

and thin film. The most recent JEA, with Martin

Marietta, is directed toward research on fluid

IOLetter from James La Fluer, President, GTI, to James M. Beggs,

NASA Administrator, Dec. 23, 1982.

dynamics associated in capillary propellant tanks

in low gravity.

The JEA program offers many attractive benefits to its participants, such as access to NASA facilities and personnel and free flights on the Shuttle. Still, the limited private sector interest in this

program is a clear indication of industry’s assessment of the risk involved in pursuing MPS

activities.

Entry Costs Are Extremely High

Access to orbit is very expensive and will continue to be expensive even in the Shuttle era, particularly if compared with the costs of demonstrat-
346 ● Internationa/ Cooperation and Competition in Civilian Space Activities

ing the commercial viability of most Earth-based

innovations. A Delta-class MPS payload including

integration expenses may involve flight costs in

excess of $15 million. This additional expenditure, incurred well before commercial feasibility has been established, is a departure from normal product development on Earth. The recurring

costs associated with payload integration and

space flight, added to the costs of starting materials, flight hardware (potentially tens of millions

of dollars) and personnel, suggests that a commercial space venture would have to be assured

of very high revenues before it became an attractive investment.

Although the JEA reduces startup costs by offering a limited number of free space flights

(MDAC is promised 8, MRA is promised 7) a commercial venture must be able to pay its own costs

after the JEA is terminated. Therefore, the cost

of gaining access to the Shuttle or a space station will have a significant impact on the level

of private industrial participation in MPS activities.

Fear of Terrestrial Competition

Some potential investors believe that whatever

can be done in space will eventually be achievable

more cheaply on Earth. Though the microgravity

environment of space cannot be duplicated, new

technologies have been developed which do

minimize the effects of gravity on Earth. In 1980,

a U.S. firm, working with NASA, developed a

container-less processing system for making special glass products. ’ I In this system, glass is suspended within a chamber by sound beams in a

process called acoustic levitation. Similarly, new

gel electrophoresis and recombinant DNA techniques may one day be able to accomplish more

cheaply on Earth what McDonnell Douglas is trying to accomplish with continuous-flow electrophoresis in space.

Private Sector Does Not Control

Means of Access to Space

Access to launches, launch assurances, availability of support facilities, and the cost of space

transportation may all be influenced by nonbusiness considerations such as changes in an adminI l/ndu5tTy Week, Mar. 3, 1980, P. 90.

istration’s space policy, national security constraints, or fluctuations in congressional and

public support. If necessary space facilities are not

available when needed, the resulting costly delays could be fatal to a new commercial program.

Markets for Some Space

Products Are Underdeveloped

Unlike innovations that emerge in response to

existing or clearly possible market opportunities,

some space-based products or processes may have

to create new markets. The absence of a welldefined market makes it difficult to project potential sales or return on investment; this makes

it difficult to attract the financial backing necessary for such endeavors.

The difficulties encountered by GTI in its attempts to market a metallurgical furnace for research purposes make this problem especially

clear. At the conclusion of a 9-month marketing

effort GTI had no firm offer to fly a metallurgical

sample in its furnace. Some observers have remarked that GTI erred in making a commitment

to a furnace that was not versatile enough to capture the entire market in experimental solidification. Others have suggested that 9 months was

too short a time in which to expect to build a market, that their price was too high ($1 5,000 to

$20,000 per sample) and that their expectation

of a 3-year return on investment was unrealistic.

All of these criticisms reflect the difficulty of a

firm’s trying to define a market while already involved in the complex tasks of technology development and the management of a space-based

business venture.

It would appear that the strength of the MDAC

and MRA Joint Endeavor Agreements stem at least

partially from the fact that the products being developed—new drugs and semiconductor materials—are intended for the large, well-defined, and

dynamic pharmaceuticals and electronics markets.

Lack of Understanding

of the Space Environment

Many industries that may eventually benefit

from future space research are simply unaware

of what microgravity has to offer them. Scientists

and engineers have not been educated in the use
Ch. 8—Materia/s Processing in Space ● 347

of the microgravity environment and therefore

may not investigate how the absence of gravity

could aid their work. For their part, managers

tend to focus on development time, risk, and potential returns on investment. As discussed above,

space innovation does not seem attractive from

this perspective. Although formal, quantitative

project selection techniques can be used to project such factors as rates of return and pay-out

periods, in the final analysis the decision to invest in new technology is a strategic choice that

depends primarily on a corporate manager’s business and technical judgments. The business community’s lack of understanding about MPS makes

it difficuIt for potential commercial space activities to compete with other, more traditional, investment opportunities.

The Scientific Community

NASA relies heavily on the scientific community, both industrial and university, to generate

ideas for experiments and to provide direction

and review for ongoing activities. NASA accepts

unsolicited proposals from the scientific community for studies, theoretical and experimental research, or minor developments. Space flight experiments must be proposed in response to

specific “Announcements of Opportunity” or

“Dear Colleague” letters. NASA also sponsors

science working groups to coordinate the interaction between NASA-funded investigators, scientists, engineers from universities, industry, and

government labs and flight hardware contractors

and NASA personnel.

NASA’s initial enthusiasm for MPS research and

its emphasis on the commercial potential of inspace processing found little immediate support

in the scientific community. In 1978, NASA requested the Space Applications Board (SAB) of

the National Research Council to review the MPS

program. To accomplish this task, the National

Research Council formed the Committee on Scientific and Technological Aspects of Materials

Processing in Space (STAMPS). The STAMPS report concluded:12

The early NASA program for processing materials in space has suffered from some poorly

12Ma(erja/s processing in SpdCe, Op. cit., P. 5.

conceived and designed experiments, often

done in crude apparatus, from which weak conclusions were drawn and, in some cases, overpublicized. Nevertheless, there is opportunity for

meaningful science and technology developed

from experiments in space provided that problems proposed for investigation in space have

from the outset a sound base in terrestrial science

or technology and that the proposed experiments

address scientific or technical problems and are

not motivated primarily to take advantage of

flight opportunities or capabilities of space facilities (emphasis in original).

Since publication of the STAMPS report, NASA

has worked to implement the report’s recommendations. NASA requested the Universities Space

Research Association (USRA) to assist in the organization and coordination of basic science working groups and to involve a larger segment of the

scientific community in MPS research, ’ 3 Since

then, the USRA has sponsored science working

groups, seminars, and workshops in the areas of

bioprocessing, combustion sciences, containerIess processing, fluids and transport phenomena,

and solidification processes. Under NASA’s direction, USRA has also established contacts with U.S.

industry and various professional associations that

share similar basic science interests.

The USRA working groups have also attempted

to coordinate their activities with scientists from

ESA and other nations interested in MPS. In 1983,

USRA entered into an agreement with NASA and

ESA to act as a liaison between the MPS science

working groups of the two space agencies .14

USRA has encouraged joint ventures between

ESA and NASA principal investigators, and the

sharing of experimental facilities.

13USRA is a private nonprofit corporation that was organized i n

1969 by the National Academy of Sciences and is presently composed of 54 universities. It is chartered to provide a means through

which universities and other research organizations may cooperate with one another, with the Government of the United States,

and with other organizations toward the development of knowledge associated with space science and technology. USRA is further chartered to acquire, plan, construct, and operate laboratories

and other facilities for research, development, and education associated with space science and technology.

14H earl ngs on Materia[s Processing i n Space, Before the SU bcommittee on Space Science and Applications of the House Committee on Science and Technology, 98th Cong., 1st sess., Statement

of Dr. Guy Rlndone, Universities Space Research Association, Sept.

14, 1983.
348 ● 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 $1 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 November 1983 and involved a joint EuropeanAmerican crew conducting a variety 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 participated in the Spacelab development program. The

West German firm MBB/ERNO is the prime contractor for Spacelab; it was assisted in its development activities by some 40 other European

companies. At the height of the development

phase, an industrial work force of about 2,000

was employed on the program .15

Spacelab will provide opportunities to conduct

space-based experimentation in both the physical and biological sciences. It consists of a pressurized module capable of being carried in the

payload bay of the Space Shuttle and allowing

experimenters to work at a variety of projects in

a shirtsleeve environment. Additional pallets are

also available which can be placed in the Shuttle bay to allow equipment to be exposed directly

to the vacuum and radiation of space.

In early 1982, eight ESA member states agreed

to undertake a Spacelab Follow-on Program .16

The most important element of this program is

the development of a European Retrievable Carrier (EURECA), to be launched and retrieved by

the Space Shuttle. Funding for this program also

covers the flight costs and development of the

core payload for the first mission, which will conIsEuropean Space Agency, Europe Into Space, park, January 198s,

l). 36.

lbThey were: Belgium, Denmark, Federal Republic Of GerrnanY,

Italy, Spain, Switzerland, and the United Kingdom.

centrate on microgravity research. The first flight

is scheduled for launch in April 1987 and retrieval

in September 1987.

EURECA is a reusable payload carrier designed

to carry a payload mass of up to 1,200 kg and

to remain in orbit for 6 months. After deployment

into space from the Shuttle, an on board propulsion unit will place the carrier into a higher orbit

where the drag on its large solar arrays will be

low. Once in its operational orbit, the payload

will be switched on and operated by remote control. Although the experiments will be highly

automated, they will nevertheless be monitored

from the ground. By the end of its mission

EURECA’s orbit will have degenerated to the

point where it can be recovered by the Shuttle.

The spacecraft will then be brought back down

to Earth, along with its payload equipment and

processed material samples, for refurbishment for

its next mission.

In addition to the Spacelab program, ESA, in

January 1982, established its Microgravity Program to encourage basic MPS research (fig. 8-4).

The experiments proposed to date can be divided

into two main areas: life sciences, in which researchers can study the effects of reduced gravity on living organisms, including man; and ma-
Ch. 8—Materials Processing in Space . 349

Programa

1982 1983 198 4 1985 1988 1987 1988

Years

aJune 1982. z,480DM . $I; IJ.N, Monthly Bulletin of statistics, August 1982.

SOURCE: MBBIERNO,

terial sciences, in which the behavior of fluids,

crystals, glasses, and metallurgical systems can

be studied. In order to meet these objectives, ESA

has concentrated on four main program elements:

1. Sounding Rockets: ESA participates in TEXUS,

the West German and Swedish sounding

rocket program. It had a share of the payload

on two flights each year since 1982, with further flights planned for the forthcoming

2.

3.

4.

years. Future ESA experiments on TEXUS will

concentrate on the fields of metallurgy and

fluid physics.17

Biorack: The Biorack is a multiuser experimental facility for investigating cell and molecular 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.18 The firms MATRA, BTM, and

Dornier have responsibility for developing

the thermal conditioning units; Fokker is

building the “glovebox;” and MBB/ERNO,

with several subcontractors, is building the

single rack equipment.19 The Biorack will be

flown on the West German D-1 Spacelab

mission in 1985.

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 suspended liquid form (floating

zones) in the microgravity environment. A

fluid physics module was flown on Spacelab1 and an improved version is planned for the

D-1 Spacelab flight in 1985.

Materials Sciences Double Rack: This microgravity research facility was developed by

West Germany and flown on the first SpaceIab 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-1 Spacelab mission.

Although classified as a Spacelab follow-on program, the first EURECA payload will be almost

entirely devoted to material and life sciences and

therefore will contribute considerably to ESA’S

Microgravity Program.

Federal Republic of Germany

West Germany has an aggressive national MPS

program and also conducts research with ESA or

bilaterally with other countries. The Ministry for

Research and Technology (BMFT) coordinates

I ?ESA Annua/ Report, 1982, P. 54.

‘

8

! bid., p. 52.

‘g Ibid.
350 ● International Cooperation and Competition in Civilian Space Activities

Photo credit: National Aeronautics and Space Administration

Europeandeveloped life sciences mini lab for Spacelab.

and funds most West German R&D efforts. Projects are managed by the German Aerospace Research Establishment (DFVLR), which directs government engineering and test centers, and by the

German Research Association (DFG), a self-governing organization that allocates funds from various public and private sources to universities

and scientific societies.20 West Germany’s major

aerospace firms also play a key role in initiating

and funding research projects.

Germany has placed a strong emphasis on materials science and life science experiments in its

space program. Since the West German firm

MBB/ERNO is the prime contractor for Spacelab,

and West Germany is the major financial contributor (54.9 percent), German interest in

Spacelab exploitation has been high. In addition,

20’’ Review of National and Cooperative Space Activities for the

Calendar Year 1980,” UNCOPUOS, A/AC.105/286/Add.l., Feb. 19,

1981, Pp. 34-35.

chemicals and materials processing have traditionally been areas of German technical and industrial leadership.

The Ministry for Research and Technology provided approximately $50 million for MPS work

from 1978 to 1981 and is authorized to spend

about $100 million more between 1982 and 1985

(fig. 8-5). These figures represent the total West

German federal commitment to MPS research.

They do not include the contributions of private

research programs, other related space activities,

or terrestrial materials research. Over the past several years, the West German Government has

endeavored to shift a part of the practical research

burden to other sources, principally commercial

and industrial organizations, and to use available

government funds to sustain basic research

programs.

The German MPS program is intended to meet

the as-yet largely undefined needs of the user

community by conducting a wide variety of basic

research projects. The ultimate goal of government support is substantial involvement of West

German industry in such areas as chemistry, process technology, metals, composite materials, and

crystals .21

Early West German MPS experiments were carried on the 1975 Apollo-Soyuz manned mission.

21 “Commercialization of Materials Processing and Manufacturing in Space, ” TRW, Defense and Space Systems Group, Apr. 14,

1981, p. 26.

Figure 8-5.—Budget for Microgravity Research

Program’

v

1978 1979 1980 1981 1982 1983 1984 1985

Years

a

June 1982- 2.460DM = 1$; UN. Monthly Bulletin of Statistics, August 1982.

SOURCE: MBB/ERNO.
Ch. 8—Materials Processing in Space 351

Several methods are now used: suborbital sounding rockets, small self-contained payload packages (so-called “getaway specials”) attached to

the space Shuttle, and full-scale Spacelab missions. The Germans are examining future flight

opportunities using free-flying automatic experimental units for longer periods of time than can

be attained with the present Shuttle/Spacelab system. Primary elements of the West German MPS

Program are:22

● TEXUS (technological experiments u rider

microgravity): Certain experiments are being flight-tested using British-built Skylark

sounding rockets. Since 1977, TEXUS

launches have flown over 100 MPS experiments. The program presently calls for two

TEXUS launches per year. A number of experimental facilities are already available to

users, and more will be added as demand

increases. The TEXUS program began as a

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 “GetAway-Special” (GAS) customers and instruments derived from the TEXUS program to

conduct small MPS experiments on the Shuttle. The BMFT 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 BMFT has also purchased six

GAS 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, KaiserThrede, and Dornier have reserved GAS

flight opportunities. In addition, the West

22 Gottfried Greger, “The German Material Processing in Space

Activities, ” paper presented at The Twentieth Goddard Memorial

Symposium, NASA Goddard Space Flight Center, Mar. 17-18, 1982.

German Oberth Society, which promotes

space research, has reserved a flight.

Spacelab: West Germany is supporting major experiments on Spacelab and was responsible for the development of the Materials Science Double Rack (MSDR), a

materials processing laboratory. A West

German-sponsored Spacelab mission, D-1,

is scheduled for 1985. The D-1 will carry experiments for the West German Space Program, ESA, France, Italy, and NASA. lnformations from all the D-1 experiments, except

NAVEX, a proprietary communication and

navigation experiment, will be freely disseminated. Planning has already begun for a D2 mission which will be devoted primarily

to microgravity research.

SPAS (Shuttle pallet satellite): SPAS is a carrier which may be operated either in the

Shuttle bay or in a free-flying mode. SPAS

was developed by MBB/ERNO as a comPhoto credit: Nat/onal Aeronautics and Space Administration

View of SPAS (Shuttle Pallet Satellite) prior to flight

on STS-7. The payload consists of a beam like structure

which fits across the cargo bay and contains both selfcontained power and attitude control systems which

allow it to be deployed and retrieved by the orbiter’s

remote manipulator arm.
352 ● International Cooperation and Competition in Civilian Space Activities

pany-funded venture with financial assistance from the BMFT. It is the first of a new

generation of free-flyers designed to take

advantage of the present and future needs

for long-duration facilities in space. SPAS is

able to supply limited power, cooling, and

utilities to a payload. It currently has no propulsion system but has a modest stationkeeping capability. The first SPAS was

launched on STS-7 to test the deployment

ability of the Shuttle remote manipulator.

SPAS was reflown but not deployed on STS11 in February 1984.

● EURECA (European retrievable carrier): Although it is an ESA project, the prime contractor for the EURECA is MBB/ERNO and

West Germany will supply the major share

of the funding. EURECA is based on the SPAS

structural concept but will have greater

payload capacity, power, cooling, and a propulsion system.

France

French MPS activities are modest in scope, with

a budget of approximately $1 million to $2 miliion per year. Bilateral materiais processing experiments have been conducted with West Germany and the U.S.S.R. A France-Soviet crystal

growth and solidification experiment was carried

out aboard the Soviet manned laboratory, Salyut6, several more experiments were conducted on

Salyut-7 and future cooperative MPS research

is anticipated. French experiments on crystal

growth and the dynamics of metal alloy solidification were conducted on Spacelab-1. in addition,

the French Atomic Energy Commission (CENG)

and NASA are planning a cooperative project

called MEPHISTO (Materiel pour I’Etude des PhEnomenes Interessant de la Solidification sur Terre

et en Orbite).23 Through this project the CENG

is developing a metallurgical furnace to be used

in the NASA MPS program. CNES has also requested to fly, on a reimbursable basis, a crystal

growth experiment on Spacelab-3.

“j. j. Favier, Y. Malmejac, et al., “MEPHISTO: Research Equipment for the Study of Solid/Liquid Interface Destabilization in Metal

Alloys, ” 33d Congress of the International Astronautical Federation, Sept. 27-Oct. 2, 1982, Paris, France.

In general, the French effort is smaller and more

research-oriented than the West German. CNES

has studied since 1978 an ambitious program

called “Solaris,” an unmanned orbital space station which would be able to conduct MPS experiments, perhaps on a commercial basis (fig.

8-6). Solaris could be orbited by an Ariane-4

launcher, offer about 1s kilowatts of power and

in-orbit data processing, and operate for up to

15 years. There has been no significant movement to pursue the Solaris concept. This seems

to be the result of the French preoccupation with

Ariane development, the belief that MPS does not

offer near-term commercial opportunities, and a

recent change in French policy that acknowledges the usefulness of man in space for some

types of experimentation. Recent French interest in the Hermes (see ch. 5) manned, reusable

space plane, would seem to confirm this trend.

The Hermes would likely be useful for MPS research and for launching and recovering freeflying platforms.

It is conceivable that Hermes or Solaris might

be accepted as a major project for ESA during

the 1990s, thereby spreading the cost and stimulating MPS research activities in a number of

member countries not presently pursuing such

investigation. These projects not only create increased demand for Ariane launchers, but offer

European alternatives to participation in a U. S.-

developed space station.

Japan

Japanese MPS activities began in 1973 with an

experiment flown on Skylab. Further research is

being conducted on the Space Shuttle, Spacelab

and the TT-500-A, a Japanese suborbital rocket.

The TT-500-A first flew in September 1980; since

that time, five additional flights have been accomplished. The Japanese have also reserved one-half

of a Spacelab flight in 1988 (the First Materials

Processing Test, or FMPT). Project selection and

hardware development for this flight are currently

under way; at present, 45 materials processing

experiments and 17 life science experiments are

plan ned.24

Z4A. Sawaoka, “japaneSe Efforts Towards Materials Processing in

Space, ” Manufacturing in Space, L. Kops (cd.), The Winter Annual

Meeting of the American Society of Mechanical Engineers, Boston,

MA, Nov. 13-18, 1983, PED-VOI 11, p. 40.
Ch. 8—Materials Processing in Space . 353

Figure 8-6.—Sketch of the Proposed Solaris Orbital Station With (top centre) One

l —

2 —

3 –

4 —

5 —

6 —

7 –

8 –

9 –

10 —

11 —

12 —

13 —

14 —

SOURCE: CNES.

In 1982, Japan’s Council for Science and Technology advised the Prime Minister that MPS was

one of the scientific fields meriting urgent research attention .25 The Science and Technology

Agency (STA) was then given responsibility for

organizing a 5-year research program. The first

2 years are to be spent conducting basic and

theoretical research; the third and fourth years

are reserved for terrestrial experimentation to result in the development of the flight hardware for

the FMPT, which would occur in the fifth year.

Although the STA has primary responsibility for

the Japanese MPS program, a committee has

been established to coordinate STA activities with

those of other government agencies (e.g.,

NASDA), universities, and the private sector.

The Japanese have no current plans to build

a separate platform, such as Solaris, or a freeflying carrier, such as SPAS or EURECA. However,

Japan has expressed a willingness to cooperate

251 bid., p. 41

with NASA on the development of a space

station.

Soviet Union

MPS experiments have had a high priority on

recent Soviet space flights, especially aboard the

Salyut-6 and Salyut-7 orbiting laboratories.26 Research has been conducted in both materials

processing and the life sciences. Two furnaces,

the Splav-01 and the Kristall, have been used to

conduct experiments on semiconductors, crystal

growth, alloys, glasses, and metal oxides. Samples

have been returned to Earth for detailed analysis. Approximately 300 to 350 Soviet scientists are

reported to be actively engaged in materials research related to space processing.27

266 Beli~SkY, “sOVi@ fvlannecj Space Flight 20 Years On, ” @aceflighti vol. 23, No. 5, May 1981, pp. 154-155.

27’’U.S. Must Spend More to Maintain Lead in Space Technology, ” GAO-FGMSD-80-32 (Washington, DC: U.S. General Accounting Office, Jan. 31, 1980), p. 21,
— — —

354 International Cooperation and Competition in Civilian Space Activities

The Soviets have also conducted research into and McDonnell Douglas.28

electrophoretic separation techniques in space.

Reports indicate that these experiments are simi28T. Chesanova, Space Biotechnology Experiment Furthers Work

Iar to those presently being conducted by NASA

on Superpure Vaccines, Leningradskaya Pravda, May 22, 1983, No.,

119, p. 4, COI. 1-3. (Abstract: Daily SNAP, June 8, 1983).

MPS PRODUCTS, SERVICES, AND EQUIPMENT

It is impossible to make accurate predictions

about the future size and vitality of the markets

for MPS products, services, and equipment. The

potential for the development of an MPS industry in the United States and elsewhere is dependent on a variety of factors including continued

government-funded basic research, availability of

reliable low-cost space transportation, access to

medium- or long-term MPS facilities such as freeflyers or a space station, competition from terrestrial processes, and serendipitous discovery of

commercially viable MPS products.

Other countries have demonstrated considerable interest in MPS research and hardware development; this could eventually translate into

competition for the U.S. private sector. The U.S.

commitment to development of an MPS science

community, the existence of the Shuttle, and

NASA’s encouragement of commercial space activities give the United States important advantages. These advantages will diminish over the

next several decades as access to space becomes

more routine and the understanding of the advantages and limitations of microgravity technology become more widely known.

Potential MPS Products

Basic MPS research in the United States and

elsewhere has, to date, produced only one marketable product.29 As knowledge of the microgravity environment increases, it is possible that

major unforeseen scientific advances as important as penicillin or microcircuits may result. Such

advances could conceivably revolutionize existing terrestrial markets and create entirely new

markets. Just as it was difficult to assess the im29The product is Monodisperse latex spheres. h was manufactured by Particle Technologies in a Getaway Special Canister. The

spheres are used in various medical calibration techniques.

portance of the first computer or airplane to the

economy of the United States, it is difficult to estimate the future role for MPS products. On the

other hand, not all new technologies can be successfully commercialized. Nuclear power and

supersonic transportation are examples of technologies which offered great promise but have

had limited commercial success.

The most likely candidates for commercialization now appear to be certain pharmaceutical

products and crystals for use in the electronics

industry.

Pharmaceuticals

The separation of biological materials using

techniques such as electrophoresis can be significantly enhanced in the near-zero gravity environment of space. Electrophoresis is the movement of particles in solution when they are placed

under the influence of an electric field (fig. 8-7);

because particles have different charges and

sizes, they will move at different speeds away

from one electrode towards another with an opposite charge. This natural movement allows the

segregation and isolation of different components

of a mixture.30 On Earth, gravity reduces both the

usable concentration and quantity of the material being separated. Tests performed on STS-4

(June 1983) as part of the MDAC/NASA Joint

Endeavor Agreement demonstrated 125 times

greater concentrations and 463 times greater

quantities than could be obtained from equivalent ground-based units.31

losee generally, D. W. Richman, “EOS-Electrophoresis Operations in Space—A Promising New Era of Business in Space, ” Manufacturing in Space, L. Kops (cd.), The Winter Annual Meeting of

the American Society of A4echanical Engineers, Boston, MA, Nov.

13-18, 1983.

J’Ibid., p. 141.
Ch. 8—Materials Processing in Space ● 355

Figure 8-7.—Continuous Flow Electrophoresis

Collection ou

Carrier fluid

x Sample Inlet

Continuous flow electrophoresis separates the

sample Into individual particle streams.

SOURCE: McDonnell Douglas.

Before signing its JEA with NASA, MDAC–in

conjunction with its industrial partner-Ortho

Pharmaceuticals–conducted a market analysis to

determine potential commercial applications for

electrophoresis. This analysis led to the identification of 12 pharmaceutical products that might

profitably be produced in space. MDAC estimated the annual domestic market for these

products to be in excess of $7 billion (fig. 8-8).32

According to MDAC, these are conservative estimates based on the capture of 25 percent of the

projected annual domestic market of each

product.

Crystals

Semiconductor device technology requires reasonably priced, single-crystal wafers that meet

32’’ Space Station Needs, Attributes, and Architectural Options, ”

McDonnell Douglas Astronautics Co., Huntington Beach, CA, NASA

contract NASW-3687, Task 1, April 1983, pp. 36-39.

Figure 8-8.-Annual Market Potential for

Electrophoresis

5.0

z 25 percent market capture USA only

z=

~ 4.0

c

o—. -

z 3 . 0 — ● Population

g USA 230 million (5.12%)

: VWfd 458S rnlllbn

~ 2.0 —

mg ● Gross rtatbnal product (GMP) 01 USA $2.- tdlllon

z 1.0 Europa/Japan S4.530 trillion

z

o 2 4 6 8 10 12

Number of products EOS industry

SOURCE: McDonnell Douglas.

specifications for crystalline and chemical perfection. 33 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

materials make them only marginally suitable for

device fabrication. It is possible that significant

improvements in the properties and yields of

semiconductor materials can be achieved by producing them in space.

NASA researchers have performed a number

of experiments on these materials and NASA has

entered into a JEA with Microgravity Research Associates to investigate the commercial production

of GaAs crystals. High-quality GaAs crystals might

be used for:34

●

●

●

●

very high-speed microwave circuits (1 O to

150 gHz);

radiation-resistant, high-speed signal processing on missiles;

high-speed signal processing with integral

lasers for readout through fiber optics; and

semiconductor radar arrays on airplanes and

satellites.

33A. F. witt, “The lrnpact of Space Research on Semiconductor

Crystal Growth Technology,” Manufacturing in Space, L. Kops (cd.),

The Winter Annual Meeting of the American Society of Mechanical Engineers, Boston, MA, Nov. 13-18, 1983, p. 43.

34’’ Commercial Utilization of a Space Station: New Business Opportunities” (Downey, CA: Rockwell International, SSD 83-0046,

March 1983), pp. V-2-V-16.
356 ● International Cooperation and Competition in Civilian Space Activities

The primary initial purchasers of space-produced GaAs crystals would be the military; it is

possible, though not certain, that the civilian electronics industry would also be a major purchaser

of GaAs crystals. Figure 8-9 illustrates the potential future demand for space-produced GaAs crystals; because of the complex and rapidly changing nature of the electronics industry, and the

potential for competition from terrestrially manufactured GaAs crystals, no attempt is made here

to assess the accuracy of the figures presented.

Potential MPS Services

and Equipment

U.S. Activities

Recent experience with NASA and private sector MPS experiments has revealed that:

● There is a weak but discernible demand for

reasonably priced research facilities for inspace experiments; this demand may expand

●

●

as the applications for in-space research become more widely known.

There is a need for MPS equipment such as

carriers and furnaces, both for specific applications and for basic research.

At present, the long lead time between conceptualization and- flight of an experiment

and the cost of custom-fitting each experiment into the Shuttle are barriers to greater

use of the Shuttle as a research tool.

These findings indicate that there may be

opportunities for the private sector profitably to

offer MPS services and equipment. Most of the

Technical Exchange Agreements (TEAs, discussed

above) between NASA and industry have been

designed to gain a better understanding of terrestrial phenomena. John Deere & Co. entered

into a TEA in 1981 to study the solidification of

cast iron. The purpose of this research was to gain

a better understanding of how the graphite formation of cast iron influences the metal’s properties.

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

Years

SQURCE: McOonnell Oouglas.
Ch. 8—Materials Processing in Space ● 357

INCO Research & Development Center, Inc.,

signed a TEA with NASA in 1982 to investigate

the basic properties of electroplating. Similarly,

Dupont entered into a TEA in 1982 to explore

the catalytic properties of alloys. Such activities

indicate a potentially broad industrial interest in

obtaining low-cost experimental data. This opens

up a number of opportunities for private sector

operation of service-oriented activities, such as

the provision of generic test equipment, common-use buses to fly small user-specific experiments, and integration services to reduce the

complexity of NASA/private sector interaction.

If one accepts this interim goal, the question

then becomes how best to pursue it. One way

is to focus on reducing the cost of experimental

results per sample, thereby increasing both the

pool of potential users and the amount of information obtained over a given period of time. This

basic approach was unsuccessfully attempted in

GTI’s Joint Endeavor Agreement with NASA. GTI

had intended to fly on the Shuttle a metallurgical

research furnace designed to accommodate a

large number of experimental samples. Under the

terms of the JEA, the furnace was to have been

flown four times at NASA’s expense in order to

assess its commercial viability. GTI’s clients would

have had the opportunity to obtain data from

samples of their choice at a fraction of the cost

of fielding their own instruments (discussed above).

One U.S. firm, Instrumentation Technology Associates, Inc. (ITA), has announced that it wishes

to enter the MPS equipment market by selling

standardized experimental modules which would

fit into NASA’s GAS canister. ITA plans to offer

customers the option of the module structure by

itself, a complete module with experiment avionics and lease of a complete module for a flight,

or rental space inside a canister flown by ITA.35

Another private firm is investigating the practicality of a fee-for-service laboratory to operate

in conjunction with the U.S. space station. Such

a laboratory would allow customers to buy a

number of days or hours of time to perform experiments. It would eliminate the need for frequent Shuttle flights and would allow a degree

~~Avjatjon week and Space Technology, ) u ne 25, 1984.

of interaction between scientist and experiment

that is not now possible.36

JEA proposals submitted in 1983 to NASA by

Ball Aerospace and Teledyne Brown Engineering suggested another approach to MPS service

development. Under each of these proposals, the

private sector participant would provide a carrier to fit in the cargo bay of the Shuttle. These

carriers would supply utilities such as power,

cooling, and telemetry; NASA payloads and payloads of opportunity would be attached to the

carrier at any of a number of common use

“ports.”

Each of these JEAs requested the opportunity

to assume the marketing and integration functions

for all future MPS experimental payloads. The integration (preparation of payload and placement

into Shuttle) of MPS payloads is considered essential to each of these JEAs, since this would provide an assured source of income while building the commercial market for this service.

Integration for MPS payloads is currently being

conducted under contract for NASA by Teledyne

Brown Engineering.

NASA’s reluctance to decide between the Ball

and Teledyne proposals was based in part on the

applicants’ request that NASA experiments be

flown on commercial carriers, and in part on

NASA’s interest in developing what eventually

became the Hitchhiker program.

NASA’s JEA with Fairchild Industries is another

opportunity for a private sector-provided MPS

service. The Shuttle and the Shuttle/Spacelab

combination have three important limitations:

1.

2.

3.

——

The movements of crew members aboard

the Shuttle cause micro-accelerations which

can interfere with resuIts of certain MPS experiments.

Shuttle flight duration is only 10 days or less,

and many experiments will require longer

periods of microgravity.

The Shuttle does not have adequate power

for certain MPS applications.

3b’’Booz-Allen, Weinberg Report on Space-Business Prospects, ”

Space Bus/ness News, Jan. 2, 1984, p. 4.
358 International Cooperation and Competition in Civilian Space Activities

Fairchild plans to develop a small platform

called “Leasecraft” which could provide an alternative to Shuttle/Spacelab activities (fig. 8-10).

Leasecraft is a spacecraft bus designed to provide

services such as power, communications, data

handling, and propulsion for attitude control. The

customer supplies the payload—in this case, an

MPS experiment or production facility–which is

then attached to the Leasecraft. The Leasecraft

is then launched aboard the Shuttle and transferred to a free-flying mode for an indefinite

amount of time. The Shuttle would service the

Leasecraft, supplying it with new feedstock and

returning processed materials to Earth. Leasecraft

is not designed to be returned to Earth to be refitted with new cargo, as is the EURECA or SPAS,

nor is it designed to operate in the Shuttle bay

as would the carriers proposed by Ball and

Teledyne.

Fairchild proposes to provide customers with

a turnkey operation. It would handle all arrangements for launch, servicing, and return of processed materials from space. The customer would

not own, but rather would lease this spacecraft.

It is possible that McDonnell Douglas’ electrophoresis operations will provide the first customer

for the Leasecraft.

Foreign Activities

West German and ESA activities in the development of “carriers” and “free-flyers” allow

them to offer commercial MPS services similar

to those proposed by Ball, Teledyne, and Fairchild. The West German SPAS and ESA’S EURECA

reflect an important European commitment to the

development of space facilities that are Shuttlecompatible yet reasonably independent of U.S.

budgetary and political influence.

When MBB began developing the SPAS, it

hoped, like Fairchild, to offer a turnkey service

to customers willing to pay a broker to provide

the payload structure and Shuttle integration and

to do the necessary flight negotiations with NASA.

In addition to MPS payloads, MBB also expects

to use the SPAS as a bus for national and European scientific, application, and communication

satellites.

When NASA began to consider developing a

carrier that could fly on short-notice, spaceavailable basis (a concept which has had several

names and is currently known as “Hitchhiker”),

MBB/ERNO informally proposed the use of SPAS.

NASA’s indecision regarding its own carrier

needs, the JEA proposals of Teledyne and Ball,

and a general reluctance to engage in quasi-commercial activities with foreign partners have prevented a positive response to this suggestion.

The MBB/ERNO “payload support system”

(PASS) has already been flown eight times on

West German MAUS missions. The PASS fits inside a standard NASA GAS canister and includes

an experiment mounting structure, main power

battery, experimental control units, housekeeping sensors, and data evaluation units. MBB/

ERNO is now marketing the standardized support system developed for the MAUS program

to NASA get-away-special customers.37

The ESA project, EURECA, although smaller

and less powerful than Fairchild’s Leasecraft,

would offer similar utilities (e.g., power, cooling,

propulsion, attitude control, and telemetry).

However, Fairchild will be developing only the

spacecraft bus (the Leasecraft); ESA, in addition

to developing the bus (EURECA) will also provide

multi use MPS hardware. The first EURECA flight,

planned for October 1987, will carry a payload

of six experimental facilities, three of which were

developed for Spacelab.38

These instruments and the majority of the initial EURECA missions are oriented toward building basic scientific knowledge of physical phenomena in microgravity. Applications experiments are now being left to various national programs working in association with private firms.

ESA would Iike to fly the EURECA about once

every 2 years, and is discussing with NASA a

cooperative arrangement to provide sufficient ex37’’MBB Sells GAS Payload Support, ” Sp,]ce Business News, Jan.

30, 1984, p. 8.

3L71 ) An automatic mono-ellipsoidal mirror furnace for CrySta!

growth experiments (developed for Spacelab); 2) a solution-growth

facility for diffusion-controlled crystal growth (developed for SpaceIab); 3) a protein crystallization facility (developed for Spacelab);

4) a multifurnace assembly; 5) an automatic gradient-heating facility; and 6) a multiuser life-sciences facility.
Ch. 8—Materials 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 module in the payload bay that contains raw biological

material for processing.

SOURCE: Fairchild Space and Electronics Co.
360 International Cooperation and Competition in Civilian Space Activities

periments and funding to maintain this level of

activity .39 ESA is also investigating the potential

for commercial use of EURECA and has considered transferring the responsibilities for the carrier to a private firm .40

The primary buyers of carriers, free-flyers, and

other MPS equipment are government space

agencies such as NASA, DFVLR, and ESA. The

sellers in this market are, for the most part, aerospace corporations working under contract for

national space agencies. At present, most firms

involved in MPS research, such as MDAC, 3M,

and MRA in the United States and MBB/ERNO

in West Germany, have designed and built their

own test equipment.

The vitality of a future market in MPS equipment will depend on developments in commercial products and services. For example, should

McDonnell Douglas develop a pharmaceutical

which can be profitably produced in space, it

would be necessary to graduate from Shuttle

operations to a free-flyer. MDAC estimates that

it might need anywhere from 8 to 14 free-flyers

to engage in a successful commercial venture. It

has considered the Fairchild Leasecraft, a Hughesdesigned free-flyer, MBB’s SPAS, and the EURECA.

MDAC has also considered developing and building its own free-flyer. A similar scenario can be

imagined for any of the proposed space products

discussed above, all of which would need more

than the Shuttle to engage in successful commercial operations.

The demand for Shuttle-compatible carriers

and related experimental equipment will most

likely increase steadily throughout the decade,

The percentage of this equipment which is available commercially as opposed to through government space agencies will depend on the success of current and future private sector proposals

to conduct the integration and marketing of experimental services.

Development of the SPAS and ESA commitment to EURECA ensure at least a limited European presence in the international MPS equipment market. The extent of this presence is

dependent on: ———

39j. M. Lenorovitz, “ESA Offers EURECA Platform for Shuttle, ”

Aviation Week and Space Technology, Oct. 24, 1983, p. 75.

401 bid,

Political considerations: Should ESA adopt a

“buy European” attitude towards MPS research, it is conceivable that EURECA could

become the carrier of choice for all European

MPS experiments.

Technical considerations: Commercial MPS

operations will have specific needs for power, telemetry, and other vital utilities. McDonnell Douglas has indicated that, as presently configured, neither the existing SPAS

nor the proposed EURECA could meet its

power demands. The Fairchild Leasecraft, if

developed, would seem to be able to meet

these needs. European participation in the

future MPS equipment market will be based,

in part, on the ability to compete technically

with the U.S. private sector.

Market considerations: To date, Fairchild industries has been unable to attract customers to its Leasecraft concept. It is possible that

it will be many years before there is a strong

demand for commercial MPS production

equipment. The EURECA’S ability to fly numerous small payloads and the existence of

multiuse experimental equipment may make

it the carrier of choice for conducting precommercial flight tests.

Financial considerations: Assuming a rough

technical equivalence between U.S. and European MPS equipment, competition will be

based on cost. This may be significantly influenced by direct or indirect government

subsidies. Such subsidies may be the incidental result of government R&D policies or

the direct result of a policy to promote the

sale of this equipment.

U.S. domestic policy: The Shuttle is, at present, the primary means by which to conduct

MPS research and manufacturing. The Europeans are therefore subject to U.S. policy decisions regarding access to and cost of Shuttle services. Unless Europe develops an

alternative to the Shuttle for MPS research

(e.g., the Hermes vehicle), the commercial

success of European MPS endeavors may depend on U.S. domestic space transportation

policies. It is important to note that in other

important space technologies (space transportation, communication satellites, and remote sensing) the Europeans have chosen

not to rely exclusively on U.S. technology.
Ch. 8—Materials Processing in Space ● 361

COOPERATION IN MPS

There is substantial foreign interest in microgravity research. Since the United States controls

the Shuttle, Spacelab, and other hardware essential to this research, it is a desirable partner for

cooperation. It is important to examine the value

of such cooperation to the U.S. space program,

and, more generally, to long-term commercial

and foreign policy interests.

Advancement of Science

The primary reason for pursuing international

cooperation in MPS is to advance the microgravity sciences. Since NASA was founded it has pursued a vigorous program of international cooperation in the space sciences.41 Recently, as

missions have become more complex and expensive, and therefore more infrequent, a broad international interest in space science has allowed

important scientific work to go forward which

could not have been done by the United States

alone. As the space programs of the Europeans

and Japanese continue to grow in size and sophistication, so will the importance of international cooperation in the space sciences.

Shuttle Mission 7 provided an excellent example of international cooperation in MPS research. 42 On this mission, NASA entered into an

agreement with MBB/ERNO, a private West German firm, to use the SPAS to test the Canadian

remote manipulator system. Although NASA and

MBB entered into a formal contract for reimbursement for the flight of the SPAS, the cost was

discounted to reflect the value to NASA of having the SPAS as a test article. Also on STS-7, three

MAUS units were flown as a part of an experiment by NASA’s Office of Space and Terrestrial

Applications (OSTA-2). NASA and BMFT agreed

that the OSTA-2 flight opportunity would be

matched by the reflight of the Materials Experiment Assembly (MEA) on the West German D-1

AI See genera[ly: u .S. Congress, Office of Technology Assessment,

UNISPACE ’82: A Context for International Cooperation and Competition, OTA-TM-ISC-26 (Washington, DC: U.S. Government Printing Office, March 1983), app. B.

42 Craig Covault, “Shuttle 7 to Carry Multinational Payload, ” Aviation Week and Space Technology, May 6, 1983, pp. 52-57.

Spacelab mission. In both instances, flights were

arranged on a “no exchange of funds” basis.

Foreign Policy

Development of space technology is a demanding and highly visible undertaking in which nations have traditionally invested substantial

amounts of financial and political capital. MPS

is certainly no exception to this general rule. The

potential benefits of cooperative MPS research

are not limited to such tangible items as monetary

return or technical advances, but include such

intangibles as national prestige and the desirability

of maintaining stable relationships with other

countries. Decisions about the level of international cooperation that NASA wishes to pursue will

undoubtedly influence the investments and programs of other countries. To the extent that

NASA’s decisions have a negative effect on the

space programs of other countries, they may be

less willing to support U.S. foreign policy objectives in space and elsewhere.

With the exception of terrestrial facilities and

sounding rockets, the Shuttle is the only nonSoviet means available for the conduct of microgravity investigations. As a result, foreign space

hardware has been designed to take advantage

of the special characteristics of the Shuttle. Such

hardware includes the ESA Spacelab and all of

its laboratory equipment, the future EURECA,

West Germany’s SPAS and MA US canisters, and

France’s MEPHISTO furnace. Future decisions regarding Shuttle and Spacelab pricing and availability should be made with the understanding that

other countries have also made substantial economic and political investments in this technology.

Foreign Sale of U.S. Technology

Until recently, the United States held a virtual

monopoly on the sale of space services and

equipment. Now, even though the demand for

such products is increasing, so is the number of

capable suppliers. It is, therefore, important to

examine what role international cooperation

might play in the promotion of these U.S. space

goods and services.
362 ● International Cooperation and Competition in Civilian Space Activities

As a result of the unique characteristics of the

Shuttle and past NASA cooperative projects, most

foreign MPS research will rely in some part on

U.S. facilities. It might be possible to translate this

reliance into an economic advantage for the

United States. To the extent that foreign MPS programs remain dependent on the Shuttle, Shuttle

use is expanded and the cost of similar U.S. projects is reduced. Policies that discourage foreign

use of the Shuttle by charging high prices for its

use or limiting access serve to increase the rate

of speed at which alternatives to the Shuttle will

be developed.

Currently NASA and the private sector have discussed the development of a range of MPS hardware, including carriers, experimental equipment

such as furnaces, and free-flyers. Cooperative programs that encourage the use of U.S. hardware

increase the potential for eventual sales of such

hardware.

Cost Savings

As a result of their interest in Spacelab and in

MPS generally, the European countries and Japan have developed, or are in the process of developing, valuable experimental hardware. Much

of it is designed to be reflown and can support

a number of experiments. In recent years, NASA

resources have been directed primarily to the completion and flight testing of the Shuttle. As a result, in select areas of MPS research the United

States is behind in the development of useful hardware. This fact has caused NASA to suggest the

creation of an International Microgravity Lab

(lML) to allow the international sharing of MPS

flight equipment,

The IML concept, developed by NASA’s SpaceIab Flight Division, envisions that the United

States can reduce the cost of Shuttle flights and

the “rent” of Spacelab as a means to gain access

to European hardware. Discussions have focused

on the life science and materials hardware (primarily the ESA Biorack and West Germany’s Materials Science Double Rack), though the freeflyers, SPAS and EURECA may eventually enter

the negotiations. The Europeans have responded

favorably to initial NASA inquiries, and there are

feasibility studies under way on both sides of the

Atlantic.

The assumption underlying the IML is that most

current MPS research seeks scientific knowledge

about the microgravity environment. Given this

common goal, the IML would reduce duplicative

activities, allow cost sharing—particularly with regard to experimental hardware–and encourage

use of the Spacelab and the creative interchange

of ideas. Whether or not the IML is approved,

it raises an important issue. Unless the United

States is prepared to commit more of its public

and private resources to space than it does now,

it cannot hope to maintain preeminence in all aspects of MPS technology. Given the likely constraints on the Federal budget, international cooperation will play an increasingly important part in

future MPS projects.

POLICY OPTIONS

In the near future, the United States will have between the U.S. private sector and foreign supto make important decisions concerning the pliers—either private sector or government—does

proper roles of international cooperation and not yet exist. However, the MPS research of ESA,

competition in the microgravity sciences. So far, and of France, West Germany, and Japan, clearly

commercial sales in MPS have been limited to the indicates the intention to pursue potential comhardware supplied to NASA and foreign space mercial MPS applications. It is important that the

agencies for experimental purposes. Competition U.S. Government begin to consider whether, and
Ch. 8—Materiats Processing in Space . 363

to what extent, it will support the commercial interests of the U.S. private sector should international competition become a reality.

The United States could obtain valuable technical and financial assistance if it expanded its

cooperative MPS efforts. In theory, international

cooperation should be encouraged in basic scientific investigations or in areas in which the United

States can benefit from foreign research (e.g.,

basic biomedical research and research in solidification) and discouraged in areas that might have

near-term commercial applications or in which the

United States holds a clear technological lead (e.g.,

continuous-flow electrophoresi$ and containerless

processin~. The distinction between these areas

are, in practice, difficult to make and must depend on the unique characteristics of individual

projects.

Competition in MPS

In most terrestrial markets the U.S. Government has tried to foster an international environment congenial to the open competition of enterprises. The preeminent role of governments in

development of space technology, and the political and military sensitivity of much of this technology, have made it difficult to adopt similar policies toward commercial space activities. Given

the cost and the complexity of doing research in

space, it is unlikely that the private sector could

pursue commercial MPS activities without some

support from the Government. This assured role

of Government makes it difficult to argue for free

and open competition among commercial concerns. The question then becomes, what should

be the nature and scope of Government intervention in future MPS markets?

Strategies for competition can focus either on

increased support for U.S. industries or on the creation of barriers to foreign firms wishing to conduct microgravity research or sell space products.

Support for U.S. industry can be increased either

through a greater commitment to basic research

or through direct support of industries or specific

companies. A commitment to basic research

would involve actions such as:

Increase funding for NASA research: Historically, NASA’S MPS budget has been modest when compared to other NASA science

and application programs. The proposed

1986 budget reflects a significant increase

(fig. 8-1 1).

Encourage university and industrial support

by established “research centers”: The

House Committee on Science and Technology in its report on the 1984 NASA authorization bill recommended an increase of $5

million to be used “in part to establish at a

university a center for basic research in the

separation and purification of organics. ”43

41 Hou~e Committee on Science and Technology, Authorizing Appropriations [o the National Aeronautics and Space Administration

for Fiscal Year 1984, H.R. Report No. 98-65, 98th Con~., 1st sess.,

1983,

Figure 8-11 .—NASA MPS Funding Trends

(millions of dollars)

36 *

1980 1981 1982 1983 1984 1985 1986

Year

“Budget request,
364 ● International Cooperation and Competition in Civilian Space Activities

●

Such a center could provide a focal point for

research in biological separation presently

being conducted by NASA, various universities, and the private sector. A similar center was successfully established by NASA at

MIT to conduct research in materials and has

received substantial private sector support.

As other areas of microgravity research show

promise, these too could be supported by

research centers.

Develop and encourage use of in-space research facilities: Such facilities wouldinclude

Spacelab and carriers for short-term research, and free-flyers and eventually a space

station for long-duration and commercial

operations.

Increasing research activities would generate

basic knowledge about microgravity, thereby creating an environment conducive to commercial

exploitation. It is also possible to support directly

industries or specific companies in their efforts

to find commercial applications for microgravity.

A decision to do this might entail:

●

●

●

Expansion of current Joint Endeavor Agreement program: NASA’s JEA program is a partnership between industries interested in MPS

and the Government. Current JEAs are conducted as “no exchange of funds” agreements whereby the private sector participants must pay for their own research and

hardware development. The JEA might be

expanded to allow for partial Government

funding of such ventures.

Encourage firms to engage in joint research

ventures in MPS: The Government may

choose to alter regulations or change laws

to permit joint research ventures among

firms in ways that may currently be prohibited. In the alternative, the Government

could encourage the formation of organizations such as the Semiconductor Research

Cooperative to do research into the application of microgravity science.

Financial support for private sector: Such

support could include Government loans,

Government-subsidized loans, or Government loan guarantees to companies attempting to produce and market new products.

●

●

These loans could be structured so that they

were paid back if the enterprise was successful and forgiven if it failed.

Tax incentives: Tax credits could be given for

capital expenditures made in space manufacturing, similar to how they have been

used in the past for solar energy work. In the

alternative, income derived from the sale of

space products could be made tax-exempt

for a number of years.

Provide guaranteed Government markets: By

providing a guaranteed market for MPS

products and equipment, the only risks remaining to the supplier are those involving

development and production. This could be

an interim step between a traditional contract arrangement with NASA and complete

commercialization.

An alternative or parallel strategy for supporting U.S. commercial activities is one which emphasizes the creation of barriers to foreign competition in MPS equipment, products, and

services. Such a strategy might include such elements as:

●

●

●

Limiting access to Shuttle and Spacelab: The

United States has almost complete control

over the price and availability of the facilities necessary to carry out MPS research. Although it may not be politically or scientifically desirable, it would be possible to bring

foreign MPS activities to a virtual standstill

by exercising this control.

Encouraging “buy American” practices:

NASA could require that all U.S. research in

MPS be conducted with hardware developed in the United States. This would reduce

demand for European-developed free-flyers

such as the SPAS and EURECA. NASA could

also bring strong pressure to bear on its JEA

partners to make sure that they conducted

their early commercial operations with U.S.

hardware.

Offer subsidized or guaranteed loans to purchasers of U.S. products and hardware:

Should products such as new pharmaceutical result from current MPS research, the

Government could encourage their sale in

foreign markets by offering attractive finan-
Ch. 8—Materials Processing in Space ● 365

cial arrangements—thereby assuring that

U.S. firms will capture the largest market

share. A similar policy could be implemented with regard to the sale of hardware

such as free-flyers.

● Establish trade barriers to protect infant industries: Should foreign hardware or product manufacturers prove more successful

than their U.S. counterparts, trade barriers

could be established to slow their entry into

U.S. markets.

● Government entry as supplier: In the absence

of adequate private sector interest, the Government could enter as supplier. This would

probably be done only under extreme circumstances, such as if the MPS product or

hardware had a strong relationship to national security.

Although it would be possible to implement

such policies, there is, at present, little reason to

do so. It is possible that such strategies might do

serious damage to our relationship with our allies

and might preclude other cooperative space activities. Too immediate a concern with competition

would accomplish little in the way of protecting

U.S. private interests and could do much to injure the international reputation of the United

States.

Cooperation

Most MPS research in the United States and in

other countries seeks basic scientific knowledge.

Given this common goal, the primary reasons for

engaging in cooperative activities are to reduce

duplicative activities, to share costs, to encourage

the creative cross-fertilization of ideas and to generate goodwill between nations. In addition, such

cooperation reinforces the philosophical goals of

the 1958 NASA Act and in the 1967 Outer Space

Treaty which sought to encourage cooperation

and ensure that space was used “for the benefit

of all mankind. ”

A decision to emphasize cooperation in MPS

research could take several different forms:

● NASA formal agreements: To date, formal

cooperative activities in MPS have been limited, but have covered a wide range of activities. Foreign researchers, acting on behalf

of their own space agencies or as NASA principal investigators (Pls), have made use of

U.S. facilities such as drop tubes and towers,

airplanes flying parabolic trajectories, SPAR

sounding rockets, and, most recently, the

Space Shuttle. Formal agreements have also

been used by NASA to obtain valuable

MPS-related hardware such as the ESA-developed Spacelab, which allows “hands-on”

access to material and life science experiments, and the Canadian remote manipulator which allows the Shuttle to deploy and

retrieve MPS payloads.

Opportunities for formal cooperation in

future MPS activities are numerous.44 As a

result of their MPS activities, the European

nations and Japan have developed, or are

developing, hardware which could be useful

to NASA research efforts. Particularly

noteworthy are the Materials Science Double Rack and the Biorack developed for use

on Spacelab,45 and the SPAS and EURECA

free-flyers. Japanese interest in MPS and, specifically, in space bioprocessing technology,

may also present the United States with opportunities for joint development or shared

use of hardware.

Formal cooperative ventures, such as the

International Microgravity Lab (discussed

above), could be used to form international

research teams to investigate specific MPS

phenomena. Such teams might initially concentrate on use of the Spacelab. NASA could

encourage greater participation in its research efforts by foreign Pls and encourage

foreign space agencies to grant NASA scientists similar treatment.

● Informal cooperation at the level of the national space agency: Informal agency cooperation offers an administratively simple, lowcost and low-visibility method of encouragAAThe space station, currently under study by NASA, offers significant opportunities for formal international cooperation. This subject is discussed in detail in the OTA report Civilian Space Stations

and the U.S. Future in Space, OTA-STI-241 (Washington, DC: U.S.

Government Printing Office, November 1984).

aSSpace/ab Mission 1 Experiment Descriptions, P. D. Craven (ed. )

(Marshall Space Flight Center, AL: NASA, November 1981 ), NASA

TM-82448.
366 ● International Cooperation and Competition in Civilian Space Activities

●

ing cooperation on shared scientific goals.

For this reason, NASA has developed informal working arrangements with numerous

foreign space agencies. In MPS, NASA has

been receptive to informal consultations with

the scientists and program managers of other

space agencies and has generally facilitated

the international flow of information.

Specifically, NASA has encouraged its MPS

Science Working Groups to interact with

their counterparts from other countries, to

share their experience, and to help define

program goals. This unstructured cross-fertilization of ideas has contributed substantially to the dissemination of knowledge

essential to the success of MPS projects. Although Pls at NASA have exclusive access

to data from their experiments for 1 year,

after this time they are required to deposit

the data, in a usable form, in the National

Space Science Data Center. This information

is then freely available to all interested

parties.

A more focused method of encouraging

international cooperation might entail

greater use of the various Science Working

Groups, or some other organization, to coordinate research activities. The Science

Working Groups play primarily an informational role, but they could be encouraged

to take a greater part in organizing specific

project interactions, identifying useful hardware and coordinating joint projects. It is important that the group given this responsibility be familiar with the details of specific

projects to ensure the relevance of cooperative activities.

Informal communication among scientists: A

great deal of information is transferred by individual scientists as a result of their personal

and professional relationships. There has

been an active dialog in the scientific community on MPS, and the subject has been

explored in numerous technical and scientific papers. A decision to encourage informal international communication among scientists might involve such activities as

sponsoring symposia and making available

funds necessary for travel. [n addition, formal arrangements involving the coordination

of Science Working Groups or guest investigator programs would have the indirect effect of increasing the informal interaction

among scientists.

Cooperation in multinational fora: The

United Nations Committee on the Peaceful

Uses of Outer Space (COPUOS) has been

the principal multinational forum for debate

of space issues. Although there is some current dissatisfaction with the United Nations

(see ch. 3) and its committees, U.S. participation in COPUOS has in the past been beneficial. Should the United States wish to

avoid purely “international” space programs

and their attendant political problems, the

United Nations may still play an important

role. For example, one of the seven proposals for multilateral cooperation presented by

the United States at the UN ISPACE ’82 Conference was an intergovernmental meeting

of experts in the use and management of

space technology. 46

On February 4, 1983, NASA and Columbia University cosponsored the first such

meeting. About 100 representatives from 40

countries and international organizations attended and discussed technical space problems in an informal multilateral forum

devoid of the usual U.N. political issues, The

success of this first meeting indicates that it

might be a useful tool for coordinating international activities with regard to specific

technologies such as MPS.47

There is no simple formula for deciding the appropriate level of international cooperation to

pursue in MPS research. A well-structured and

resource-conscious MPS program will undoubtedly wish to engage in some cooperative activities. Although the extent of international cooperation must depend on the unique characteristics of individual projects, some effort should

be made to place these individual decisions in

a coherent policy framework. At minimum, such

a policy should ensure that:

1. The benefits of cooperation are in reasonable

proportion to the costs. The term “benefits”

A6See: UNISpACE ‘82.. A Context for /fWWMtiOfk3/ Cooperation

and Competition, op. cit.

q71bid., app. C .
Ch. 8—Materials Processing in Space ● 367

should include tangible items such as monetary return or technical advances and intangibles such as national prestige and the

value of maintaining stable international relationships. The potential “costs” may be a

loss of domestic jobs, contracts for services

and hardware, and a potential competitive

advantage in world markets.

2. There is no negative impact on similar private

sector efforts. If the private sector is to be

encouraged to take a greater share of the financial and technical risk associated with

MPS research and hardware development,

international cooperative ventures must not

compete with them commercially.

3. The objectives and program responsibilities

are clearly defined. Formal MPS cooperative

ventures should have well-defined technological goals and should deal in advance

with sensitive questions of data retention, patent rights, and proprietary information. The

technical, human, and financial resources of

the participants should be examined to assure that the costs of the research can be

lowered and effectively shared.
Chapter 9

SPACE SCIENCE
Contents

Page

Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....................371

Cooperative Ventures in Space Science:

The Opportunity and the Challenge . . . . . . . . . . . . . . . ..................372

Competition in Space Science: The Shifting Balance.. . ..................373

Prevailing Issues in Space Science . . . . . . . . . . . . . . . . . . . . . . . . ........4 .$.375

International Cooperation in Space Science. .. .. 0 <.......................377

Historical Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..........377

Current or Planned Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...382

Outlook for Future International Cooperation . .........................384

The Role of Competition in Space Science . .............................386

Prospects for a “SpaceScience Race” . . . . . . . . . . . . . . . . . . . . . . . ..,......386

Current Ranking of Participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......387

Tradeoffs Between Competition and Cooperation . ......................388

Markets 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. . . . . . . . . . . . . . . 4 . . . . . . . . . . . . . . . . .................4....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
Chapter 9

SPACE SCIENCE

INTRODUCTION

A substantial part of the research activity carried out in space is directed, not at the achievement of economic benefits and commercial applications, but at the purely scientific study of

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

sou riding rockets and balloons to loft instruments

and animals above most of the insulating and protective 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

quarter-century, Earth-orbiting and interplanetary

spacecraft have been the catalyst for an explosive

growth of knowledge in this field.

The rapid expansion of space science has produced a number of component disciplines and

subdiscipline. For organizational purposes, the

National Aeronautics and Space Administration

(NASA), which funds most space science research, divides space science into three areas: 1 )

physics and astronomy, 2) planetary exploration,

and 3) life sciences.

● Physics and astronomy encompasses the study

of the structure and dynamics of the Sun, solargenerated phenomena such as the solar wind,

and other features of the near-Earth interplanetary environment such as the magnetosphere

and incident cosmic rays. Also included in this

area are some of the most compelling and exciting investigations in any scientific field: the

study of astronomical objects by means of telescopes and other space-borne instruments.

These objects include not only our own Sun

and the multitude of stars and other condensed

objects of the Milky Way Galaxy, but also the

gas and dust between these stars, and finally

the vast swarm of galaxies extending out to the

edge of the visible universe.

Observations from space take advantage of

the entire spectrum of electromagnetic radiation to acquire much more extensive data on

●

Photo credit: National Aeronautics and Space Administration

X-ray image from NASA’s High Energy Astronomy

Observatory (H EAO-2) of remnant of exploding

supernova in the constellation Cassiopeia. Scientists

estimate that the star from which this cloud

of expanding hot gas derives originally

exploded in A.D. 1657.

large- and small-scale cosmic processes than

can be taken from the ground, where only optical and radio wavelengths are received. Access to all regions of the spectrum as well as

the removal of atmospheric distortion has produced, in the span of a few years, a major revolution in our understanding of the nature, origin, and evolution of the universe and its

component matter.

Planetary exploration is the study of the planets

of our solar system and their satellites, the asteroids, and the comets. Activities in this area

include the dramatic unmanned exploratory

missions to the surface or environs of other

planets, and the manned lunar landings. investigations of the surface features and (if possible) composition are made along with studies

of the planetary atmosphere and magnetosphere, if they are present. These observations

are combined with data regarding orbital mechanics and rotational characteristics to pro371
372 International Cooperation and Competition in Civilian Space Activities

●

vide an understanding of the planet’s internal

composition and dynamics, and thus its origin

and evolution.

Life sciences are generally subdivided into biomedical research (the study of the effect of

space environmental factors on man) and

space biology (the effect of these factors on

plants and animals). Separate but related areas

are planetary biology, the study of the origin

and distribution of life in the universe, and

global biology, which examines the impact of

life on our own planetary environment. important areas of research are the effects of prolonged exposure to microgravity and ionizing

radiation on humans and animals, and the

study of plant developmental processes in

space under artificial lighting. One objective

of the latter research is the development of advanced life support systems. Because of the difficulties associated with supporting life in

space, ground-based simulation studies are especially important in the space life sciences.

Although research in each of these areas produces results that have great intrinsic value in

adding to our understanding of the cosmos and

our place within it, this research is not pursued

solely for its own sake. Space science provides

much of the research base that underlies the development of applications-oriented programs discussed in earlier chapters. The subdiscipline of

solar-terrestrial physics, for example, forms a direct bridge between solar research (physics and

astronomy program) and Earth applications such

as communications, navigation, and meteorology. Studies of planetary magnetic fields, magnetospheres, and ionospheres have a direct relevance to corresponding research in Earth’s

plasma envelope and upper atmosphere.

In the long term, planetary studies also offer

the possibility of habitation and minerals exploitation. Life sciences research offers a wealth of potential applications, from the prolongation of human stay-times in space, to the pursuit of space

agriculture and partly closed life support, to the

development of new medical treatments, diagnostic techniques, and devices. Instruments and

sensors developed in every area of space science

eventually find their way into commercial application. Thus, programs in space science are a

necessary basis for any nation’s activity in space.

Nations that wish to pursue practical or commercial activities in space on their own must first either pursue a program of space science themselves, or have access to the technology and basic

data that emerge from the conduct of such a

program.

Cooperative Ventures in Space

Science: The Opportunity and

the Challenge

As was discussed in chapter 3, the United States

has engaged in a vigorous program of international cooperative ventures in space. When all

forms of joint activity are taken into account,

NASA alone has concluded over 800 agreements

with over 100 countries. 1

From the standpoint of individual projects, the

most notable single area of U.S. international

space cooperation has been the space sciences.2

It was apparent from the beginning that cooperation in this field offered many advantages, from

the point of view of both the United States (the

leader and principal in these ventures) and the

cooperating nations. On the technical and political level, the appeal of multinational space

science stems from the global sphere of operations of satellites, and from the global and universal perspective necessitated by operations in

space.

More practically, the enormous cost of pursuing space science has been a strong argument for

sharing the economic burden among as many nations as efficiency permitted. In effect, if NASA

does not have enough money to pursue a project alone, by cooperating with other countries

it may actually create opportunities to undertake

research it could not otherwise have done. The

pooling of scientific and technical talent offered

another strong advantage, and was allied with the

125 Years of NASA /rrternationa/ Progr,~ms, NASA report, January 1983.

ZUNISpACE ‘8.2: A Context for International Cooperation and

Competition–A Technical Memorandum (Washington, DC: U.S.

Congress, Office of Technology Assessment, OTA-TM-ISC-26, March

1983), p. 68.
Ch. 9—Space Science 373

value to the United States of building scientific/

technical strength among its allies. These advantages were not restricted to the United States and

its partners, but applied as well to the Soviet

Union–the other leading nation in the early decades of space activity—in its dealings with its client states and a few other nations through the

Intercosmos program.

Now, as technical capability for the independent conduct of space science has spread to the

European Space Agency (ESA) and many of its

member nations, to Japan, and potentially to

some developing countries, the benefits of cooperation are coming into play for a wider range

of nations.

Conversely, the disadvantages of joint pursuit

of science in space are also being felt more widely

and perhaps more acutely. Prominent among

these are the problems attendant upon planning

for and conducting long-term joint development

activities, during which any number of economic and national policy imperatives may intervene

to disrupt schedules and commitments. Differences in managerial style, and the difficuIties in

achieving satisfactory management of parallel development programs, produce another set of

problems.

As cooperative partners in space sciences are

increasingly likely to be competitors in other

scientific or industrial fields (or even in other areas

of space activity), the issue of technology transfer is becoming a matter of increasing concern.

This is especially true in light of the possibility that

cooperative ventures may entail lost opportunities

for indigenous scientists and indigenous technology development.

Competition in Space Science:

The Shifting Balance

The First 15 Years

After World War II, one of the crucial factors

setting the stage for the “space race” of the 1960s

was the fact that most of the expatriated European scientists and engineers came to the United

States, while the Soviet Union acquired the bulk

of the surviving German V-1 and V-2 rockets

(along with some technicians and engineers). The

influx of talent on the one hand and hardware

on the other probably led to the development,

throughout the 1950s, of a broader based expertise in the essential space technologies in the

United States, contrasted with an accelerated

launcher capability in the U.S.S.R. The surprise

launching of Sputnik in 1957 galvanized the latent capabilities of the American space community into focusing on achievement and dominance in space.

The emphasis on manned spaceflight throughout the 1960s, culminating in lunar landing and

exploration, obscured (and to some extent impeded) developments in space science. Although

the lunar missions were certainly “planetary,”

science was secondary to the engineering accomplishments involved. Yet from the beginning of

both programs the science return was impressive.

The U.S.S.R. led initially. The second Sputnik,

launched a month after the first, carried substantial geophysical and radiation-sensing instrumentation as well as a life support system and biomedical instrumentation for monitoring the

effects of spaceflight environmental factors on its

live payload, a dog. The third Soviet satellite,

launched shortly after the first two American successes, was a 1 %-ton orbiting geophysical laboratory. By late 1959, the U.S.S.R. had struck the

Moon (Luna 2) and photographed its far side

(Luna 3). In 1961 the manned orbital missions began, with a return of important biomedical data.

Soviet planetary satellites launched before the

end of that year had already provided data on

solar and cosmic radiation across the electromagnetic spectrum and on the upper atmosphere. However, between 1960 and 1965 a total

of 18 planetary missions to Venus and Mars failed

to return any planetary data, primarily because

of contamination problems.3

The American space science effort got off to

a slower start, but had a higher success rate. Significant data were returned by the second Mariner mission to Venus, in 1962. Likewise, the second mission to Mars, in 1964, provided pictures

3Soviet Space Programs, 1966-70, Congressional Research Service, Science and Technology Division, 1971, p. 166.
374 . International Cooperation and Competition in Civilian Space Activities

and data. However, a long series of Pioneer missions to the Moon, beginning in 1958, was unsuccessful. Not until 1964, with the Ranger series

of TV-equipped hard landings, were U.S. lunar

missions fruitful. Meanwhile, the Explorer series

of Earth and space science satellites was highly

successful. Explorer 1, for example, discovered

the existence of ionized particles trapped in

Earth’s magnetic field (the so-called Van Allen radiation belts); subsequent Explorer missions paralleled the Soviet program in space science.

In manned spaceflight, Project Mercury lagged

its Soviet counterpart: the first U.S. orbital flight

did not occur until considerably after the second

Soviet orbital mission had taken place. Not until

the advent of Gemini in 1965 did the U.S. program gain momentum and surpass (perhaps in

late 1966) the Soviet effort. The Soviets later

regained this lead in the mid-l970s, as the U.S.

Skylab program was concluded and the Salyut

program got fully under way.

Dynamics of Competition

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

established a dominant position in manned orbital operations through the series of Salyut space

stations. The continuity of the Salyut program exemplifies the pattern of U.S.-Soviet competition

in all space activities, including space science:

the Soviets are able to sustain a steady, long-term

commitment in any area of space activity they

view as supportive of their long-term goals; the

4Space Science Research in the United States—A Technical Memorandum (Washington, DC: U.S. Congress, Office of Technology

Assessment, OTA-TM-STI-19, September 1982), p. 41.

U.S. program, being subject to the annual congressional budget process, is more likely to undergo short-term perturbations.5 Thus, although the

U.S. space science missions were more sophisticated than were those of the Soviets, Soviet

space science capabilities continued to grow, particularly with the increasing use of Salyut as a platform for research.

The strong position of power occupied by the

U.S.S.R. Academy of Sciences ensures that basic

science will not be ignored. ’ The fact that the

U.S.S.R. is sending a mission to Halley, that it is

continuing to conduct missions to Venus, and

that it plans a flyby of the Martian Moon Phobos

in 1988, is strong evidence of its continuing interest in science. However, Soviet space activities in recent years have in general become in- —.———— —— 5Sa/yut: Soviet Steps Toward Permanent Human Presence in

Space–A Technica/ Memorandum (Washington, DC: U.S. Congress, Office of Technology Assessment, OTA-TM-STI-14, December 1983), p. 3.

6Alain Dupas, “Un Programme Spatial en Plein Renouveau, ” La

Recherche, November 1984, pp. 1420-1427.

7Soviet Space Programs: 1976-80 (Part l), Congressional Research

Service, December 1982, p, 157.

Photo credit: European Space Agency

Spectra of Sirius A, the brightest star in the sky, and

of Sirius B, its white dwarf companion. The X-ray

spectrum of the white dwarf is the vertical line.

The first and second order ultra-violet spectra of

Sirius A are along the horizontal.
Ch. 9—Space Science ● 375

creasingly applications-oriented, and the flight of

large-scale, advanced-technology U.S. and European space observatories and planetary probes

(both independent and joint) will probably not

be matched by the Soviets for some years.

The broad cooperative activity of the United

States with its allies in space since 1961 has

seeded and stimulated the growth of space

science and the associated technologies in many

of the nations involved, to the point at which

some of their capabilities rival our own. Among

ESA member nations, the United Kingdom is

highly astronomy-oriented; both West Germany

(FRG) and France have strong space science capabilities, and are prime movers within ESA in

this field. On roughly one-sixth of NASA’s budget, ESA has launched a substantial X-ray satellite

(Exosat) on a U.S. Delta launcher and will soon

launch a cometary mission (Giotto), a 30-cm telescope (Hipparcos), and a solar-polar orbiter

(ISPM), as well as conduct numerous Spacelab

science experiments. ISPM is a joint NASA/ESA

mission with experiments from both sides, and

will be launched on the Shuttle.

Japan is also emerging as a contender in space

sciences. Although its primary focus has been on

development of commercial applications satellites, the Institute of Space and Astronautical

Science (ISAS), responsible for Japanese space

activities, sustains a level-of-effort in space science

of one launch per year, on average. On less than

one-tenth of the NASA space science budget, recent and upcoming achievements of ISAS include

an X-ray optical/radio satellite (Hakucho), a solar

flare sensor (Hinotori), a larger X-ray satellite

(Tenma, or Astro-B), a cometary mission (Planet-A), and an even larger X-ray detector (AstroC), mounted jointly with the United Kingdom.

In developing its capabilities in space science Japan has not relied heavily on cooperative missions with the United States, although much of

the supporting technology has been derived from

U.S. commercial construction of large portions

of its Earth-sensing and communications satellites.

These developments lead to the conclusion that

active competition in the space sciences is only

now becoming possible. The more nations that

possess the capability of developing space technology, the more cooperative options there are.

Nations will also decrease their dependence on

the traditional center of activity, the United States.

In this context, a number of factors come into

play in determining the scope and direction of

future competition:

●

●

●

●

●

the value of space science as compared with

other space activities (e. g., remote sensing

and communications);

the overall space capability of a nation (e.g.,

launch capability);

reliability (in terms of schedule, costs, and

quality of services and hardware);

both national and world economic factors

(i.e., the relative affordability of space

science among nations); and

institutional factors within nations (e.g., governmental commitment and support, management framework).

Prevailing Issues in Space Science

Competition

The potential for more open competition in

space science is related to the increase in the

world market for space services in general. For

example, the possession of space transportation

systems and/or orbiting research platforms is a

key factor in the competitive position of a nation

with regard to all areas of space activity. The ability to develop cost-effective specialized instrumentation and equipment is also an important

market factor in every area.

In the absence of commercial interchange, the

competition between the United States and the

U.S.S.R. has heretofore been primarily the pursuit of prestige. However, the increase in cooperative activity between the U.S.S.R. and France

in recent years suggests that competition between

East and West may increasingly occur in the form

of competition for cooperative activity with others.

An overall tendency toward the “loosening up”

of Soviet space policy would accelerate this trend.

This issue is particularly important with regard to

Third World countries.

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

Developing Countries

The overall issue of how to involve developing countries in space science will become increasingly pressing in coming years. Most of the

interest of these countries in space relates to applications-oriented activities, but the need to

build a domestic infrastructure for such activities

will inevitably dictate some involvement in space

science, at least on a modest scale. For the spacecapable nations, the problem of how to accomplish this integration at minimal cost and without doing damage to existing programs must be

addressed.

Long-Term Agenda for Space Science

Development of a rational, long-term agenda

for science missions as related to science objectives is a continuing issue for each of the spacefaring nations. It is of particular importance as

more nations enter the space arena. Given the

pervasive sharing of data, at least in the West,

duplication of missions is pointless; yet the decision as to who conducts what missions is an increasingly complex one, and involves issues of

competition as well as cooperation. Such agendas

are regularly drawn up in the United States, but

there is no assurance that they can be adhered

to. The difference between annual budget funding in the United States and, for example, mission

funding within ESA, is a critical one from the point

of view of U.S. scientists and potential partners

alike.

Along with the issue of program planning goes

the separate consideration of maintaining an appropriate balance between space science and applications. This is done now on a largely subjective basis, but the trend toward more expensive

science missions and an intensifying competition

in the applications area may upset the balance,

necessitating a more formal means of assessing

the value and interlinkages of each. This is potentially of greatest importance for space science,

where the value of findings cannot be easily

quantified.

Economic Impact of Space Science

Space science is conducted predominantly by

means of sensing and detecting equipment, with

data being generated and transmitted by means

of advanced electronic systems. The ground

tracking and receiving stations are sophisticated

facilities, relying on computer systems for most

essential functions. Thus, space science is a high

technology endeavor, very much a part of the

most vigorous sector of our present-day economy. The actual and potential economic impact

of space science as both a producer and purchaser of goods and services should be examined. ESA has conducted studies (now somewhat

dated) of the economic benefits of space business to ESA contractors.a Comparable analyses

were conducted for NASA by Chase Econometrics in 1975, but no studies specific to space

science contracts have ever been done.

Education and Training

Differences in education and training of scientists and engineers among the space-faring nations constitute another issue. In the United States

the system for producing space scientists relies

heavily on academic graduate training at a few

universities under individual faculty researchers.

Additional training occurs on-the-job in industrial

project teams. Government contracts provide this

system’s principal means of support. Yet the unevenness of funding provided to these laboratories and industrial groups in recent years, as a result of funding cuts and a decrease in the overall

number of missions, has endangered the system.g

In this regard, an 18-percent increase in the

overall space science budget for 1984 was a

healthy sign, with new missions such as the Extreme Ultraviolet Explorer and the Venus Radar

Mapper entering the budgetary picture. The 1985

budget provides for even larger increases in space

science funding—about 21 percent—including

the Mars Geoscience Climatology Orbiter, the

Upper Atmosphere Research Satellite (UARS),

and the scatterometer for the Navy’s NROSS satellite as new starts in 1985.

eEcOnOmjc Benefits of ESA Contracts, ESA BR-02, European Space

Agency, October 1979.

%pace Science Research in the United States—A Technical

Memorandum (Washington, DC: U.S. Congress, Office of Technology Assessment, OTA-TM-STI-19, September 1982), pp. 8, 22.
Ch. 9—Space Science ● 377

Especially encouraging in these recent budgets science over the long term. In addition, the Shutare the substantial increases in funding for con- tle will present numerous opportunities for smalltinued data analysis of astronomy and planetary scale instrument development projects, thus

missions, as this support is crucial for the main- broadening opportunities for education and traintenance of research groups. The planned space ing at U.S. “centers of excel lence. ”

station will hold many opportunities for space

INTERNATIONAL COOPERATION IN SPACE SCIENCE

Historical Overview

U.S./Soviet Cooperative Efforts*

Given the persistence of enmity, suspicion, and

political competitiveness between the United

States and the Soviet Union, the overall level of

cooperation in space activities has been remarkable. The primary basis for cooperation has been

a “1972 Intergovernmental Agreement on Cooperation in the Exploration and Use of Outer Space

for peaceful purposes, ” entered upon as the

period of U.S./Soviet detente began. This agreement provided for: 1 ) development of compatible rendezvous and docking systems for testing

on a joint U.S./Soviet manned flight, and 2) establishment of Joint Working Groups in four scientific

●

●

●

●

areas:

Space Meteorology;

Study of the Natural Environment;

Near-Earth Space, the Moon, and Planets;

and

Space Biology and Medicine.

The first part of the agreement resulted in the

1975 Apollo-Soyuz Test Project (ASTP), which

probably represents the high-water mark of U. S./

Soviet cooperation in space. However, although

some joint biological experiments were conducted on board, ASTP was of far greater political than scientific value.

Scientific cooperation with the Soviets has been

less dramatic but quite substantive, particularly

i n the planetary and life sciences. The planetary

working group has held numerous joint meetings

and information exchanges relating to solarplanetary physics and lunar and planetary exploration. Lunar samples from several Apollo and —— - —

*U.S.-Soviet Cooperation in Space–A Technical Memorandum

(Washington, DC: U.S. Congress, Office of Technology Assessment,

OTA-TM-STI-27, in press),

Luna sample return missions have been exchanged (including a 2-meter core sample from

a 1976 Luna mission). Beginning in 1978, missions

to Venus (Soviet Venera and U.S. Pioneer Venus)

have been coordinated and data exchanged. This

has been particularly beneficial for U.S. scientists

in view of the vigor and success of the Soviet

Venera program, which has included transmission of color photographs from the planet’s

surface.

Probably the most comprehensive cooperation,

however, has been in space biology and medicine. Three unmanned Soviet Cosmos biosatelIites launched in 1975, 1977, and 1978 carried

numerous U.S. biological experiments in a broad

range of areas, including simulated gravity experiments (via an on board centrifuge). These flights

were a valuable opportunity for American space

life scientists in a period when no U.S. manned

missions (or comparable biological missions)

were being flown. Equally important has been the

cooperation in ground-based studies, such as the

1978/79 Joint Bed rest Study conducted to standardize procedures for weightlessness simuIation

in the laboratory. Further significant exchanges

took place at the 1980 Joint Symposium on

Vestibular Problems and the 1981 Joint Symposium on Cardiovascular Changes Resulting

from Spaceflight.

The decision not to renew the May 1977 intergovernmental Agreement in 1982 (see ch. 3)

meant that the Joint Working Groups were no

longer constituted. Cooperative activity had for

the most part dwindled down to a “baseline

level” of routine data exchange and interpersonal

scientific communication through letters and at

international scientific meetings. It is clear that

cooperation in space science, as in other areas,

between the United States and the U.S.S.R. is tied
378 International Cooperation and Competition in Civilian Space Activities

to the overall level of diplomatic exchange and

political relations between the two countries.10

Scientists on both sides generally regretted this

earlier loss of opportunity. However, recent legislation (Public Law 98-562) signed by President

Reagan in October 1984, calls for a renewal of

the 1972-77 agreement, and may presage a new

level of cooperative science activity between the

two nations.

The most durable area of cooperation is in the

life sciences, where the United States participated

in another Cosmos biosatellite mission in December 1983 (the United States supplied medical

monitoring equipment and procedural advice for

this primate mission). CAT-scan bone data from

Salyut missions are still being supplied to NASA.

NASA’s Director of Life Sciences attended an international Gravitational Physiology Meeting in

the U.S.S.R. in 1983, and exchanges between

Working Group members continue on an informal basis. Some results of Venera 13 and 14 were

received in early 1982 (including the photographs

mentioned earlier), and data from two Venus radar mappers launched in June 1983 (Venera 15/

16) were presented at an international conference

in the United States.

U.S. Cooperative Efforts

With Other Parties

Beginning in the late 194os, the United States

actively sought and sponsored Canadian and

European participation in its embryonic space research program. Such activities were numerous

throughout the 195os, and were heavily subsidized by the United States. * By 1962, cooperative space science projects were being conducted not only on sounding rockets and

balloons, but also on orbiting spacecraft.

In the years since, such activities have continued to expand, to the point at which all U.S.

space science efforts now involve some foreign

participation (if data exchanges, guest investigator

programs, etc., are counted). The roster of U.S.

partners has grown to include most of the major

losovjet Space program: 1976-80 (Part 1), Congressional Research

Service, December 1982, pp. 5, 202, 209, 219-20.

*Frank McDonald, NASA Chief Scientist, refers to this period as

“a sort of Marshall Plan in space. ”

Western European nations, as well as Japan, Australia, New Zealand, India, Pakistan, Israel,

Greece, Peru, Brazil, and Argentina. The offer of

a cooperative shuttle flight mission was extended

by the President to the People’s Republic of China

in May 1984. Table 9-1 shows that an increasing

number of major U.S. space science missions are

truly joint missions, involving foreign-built spacecraft or on board instruments, and foreign principal investigators. It is clear from the table that

the United States has been the leading instigator

of cooperative missions in space science, even

considering the Soviet-bloc cooperative lntercosmos missions, which are not itemized here.

The table also depicts the variety of structures

for joint projects–bilateral, multilateral, hosted

experiments, etc. Chapter 3 introduced the fact

that NASA prefers bilateral to multilateral efforts.11

Missions such as the International Sun-Earth Explorers (ISEE), which involved the development

of separate spacecraft, or the International Radio

Astronomy (I RAS), which entailed building separate major components, have proved to be

among the smoothest joint undertakings.

The United States has a number of motives for

stressing cooperation in space science. Some of

these are altruistic-e.g., the desire to extend both

knowledge of the space environment and benefits of space science to as many nations as possible, and the wish to foster a cooperative atmosphere among nations. Some are economic—

principally, the desire to share costs. And some

are political: the desire to broaden diplomatic relations with others, to demonstrate U.S. competency and strength, to strengthen our allies

technically and economically, and to foster their

greater security and independence. It should be

noted that these motivations are equally applicable to any other form of cooperative space

activity.

However, the benefits of cooperative space

science are not always clear-cut. For example,

it is difficult to assess the economic benefits to

the United States of foreign participation on U.S.

missions, especially where foreign gains out of

the project may have exceeded contributions. In

I I See UNISpACE ’82: A Context for Cooperation and competition, op. cit., app. B.
Ch. 9—Space Science ● 379

Table 9-1 .—International Cooperative Ventures in Space Sciences

Launch Cooperating

year Mission name countries

1962

1962

1967

1968

1969

1969

1969

1969

1971

1971

1971

1971

1972

1972

1972

1972

1972

1973

1974

1974

1974

1975

1975

1975

1975

1975

1976

1977

1977

1977

1977

1977

1978

1978

1978

1978

1978

1978

1979

1979

1980

1982

1983

Ariel-1

Ariel-11

Orbiting Solar Observatory-4

(0s0-4)

Orbiting Geophysical

Observatory-5 (OGO-5)

0s0-5

0S0-6

Apollo-1 1

Apollo-12

Ariel-lV

Barium Ion Cloud Probe

APoIIo-14

Apollo-15

Apollo-16

Orbiting Astronomical

Observatory-3 (OAO-3)

A EROS

Apollo-16

Apollo-17

Skylab

Astronomical Netherlands

Satellite (ANS)

Ariel-V

Helios-1

Apollo-Soyuz Test Project

Apollo-18

Aryabhata

Cosmos 782

0S0-8

Helios-2

U. SJU.K.

U. S./U.K.

U.s. a

U.K.

a

, FF

U.K.

a

, FF

U.K .

a

, Ita

Switz a

Switz a

U. K./U.S.

FRG/U.S.

Switz a

Switz a

Switz a

UK.a

FRGAJ.S.

F R G

a

, FP

F R G

a

, FF

FP, Switz a

Neth/U.S.

U. K./U.S.

FRG/U.S./lt/Aus

U.S./U.S.S.R.

F R G

a

India/U.S.S.R.

U. S. S.R.b

F F

FRG/U.S./lt/Aus

International Sun-Earth Explorer-1 U. SJESA

(lSEE-l)

ISEE-2

SIGN E-3

Cosmos 936

Cosmos 936

ISEE-3

Pioneer Venus-2

NASA Heliocentric Mission

(ISGE-3)

Cosmos 1129

Cosmos 1129

International Ultraviolet Explorer

(IUE)

High Energy Astronomical

Observatory-3 (H EAO-3)

Hakucho

Solar Maximum Mission (SMM)

SOyUZ T-7

Infrared Astronomical Satellite

(IRAS)

ESAW.S.

U. S. S. R.lFr

U. S. S.R.b

U. S. S. R.lFr

F RG

a

, FF, Netha

FRGa, FP

U.K,a

U. S. S.R.b

U. S. S. R.lFr

U. S. IESAW.K.

F@, Dka

Japanb

U. S./NethW. K.a

U. S. S. R.lFr

Neth/U.S.W. K.

Space science objectives

Measure energy spectrum of cosmic rays, solar X-rays

Measure galactic radio noise, micrometeoroid flux

Measure solar X-ray distribution, He emission

Determine direction of incidence of primary cosmic

rays and density itemperature of H in geocorona

Measure solar X-ray flux and self-reversal of LymanAlpha line

Study solar He resonance, X-ray and gamma radiation

Measure composition of solar wind

Measure composition of solar wind

Measure VLF radiation and cosmic radio noise

Barium release to stimulate action of solar wind on

comet tail

Measure composition of solar wind

Measure composition of solar wind

Measure composition of solar wind

Study stellar ultraviolet and X-ray emissions (project

also known as Copernicus)

Measure solar extreme UV and correlate with upperatmosphere components

BIOSTACK I (effects of CR on selected biosystems)

BIOSTACK II (effects of CR on selected biosystems)

Sky survey, distribution of galaxies and ionized

hydrogen; and solar wind analysis

UV photometry and X-ray emissions

Conduct X-ray sky and survey and locate sources

Measure micrometeoroid flux, study solar X-rays and

mass, and planetary orbits

Rendezvous and docking test included joint biological

studies

BIOSTACK-111 experiment aboard U.S. craft in ASTP

Solar and upper atmospheric research

Eleven U.S. experiments aboard (including

centrifugation)

Spectrographic study of solar chromosphere

Measure micrometeroid flux, study solar X-rays and

mass, and planetary orbits

Coordinated spacecraft studied magnetosphere,

interplanetary space, and their interaction

Coordinated spacecraft studied magnetosphere,

interplanetary space, and their interaction

Observatory with telescopes for locating CR sources

Seven U.S. biological experiments

French biological experiments aboard

Solar wind composition and mapping; comet flyby

Atmospheric and cloud studies at Venus

Solar proton behavior in interplanetary space

Fourteen U.S. biological experiments

French biological experiments aboard

UV spectroscopy

Study galactic CR composition

Optical and radio observations of X-ray stars

Solar hard X-ray imaging spectrometry

Biomedical tests, “Aelita” diagnostic device

Conduct IR sky survey
380 ● International Cooperation and Competition in Civilian Space Activities

Table 9-1 .—International Cooperative Ventures in Space Sciences—Continued

Launch Cooperating

year Mission name countries Space science objectives

1983

1983

1983

1983

1984

1984

1985

1985186

1985

1985

1985

1985

1986

1986

1986

1987

1987

1987

1987

1988

1988

Optical-X-ray Observatory

Spacelab-1

San Marco-D

Cosmos-1514

Active Magnetospheric Particle

Tracer Explorer (AMPTE)

Long-Duration-Exposure Facility

(LDEF)

Spacelab-2

International Halley Watch

Giotto

Spacelab-3

Sp’acelab-D-l

Gamma-1

Galileo

Hubble Space Telescope

Ulysses— International Solar

Polar Mission (ISPM)

Roentgen-Satellite (ROSAT)

Ast ro-C

Cooled submillimeter

Sigma

Gamma Ray Observatory (GRO)

Venus Radar Mariner (VRM)

U. S. S. R./Fr

ESAW.S.

Itlu.s.

U. S. S.R.b

U. S.IFRG

FRGa;

U. S.llre/ESAa

;

Switz a

; U.K.

U.K.a

ESA/U.S.S.R.;

JapanW.S.

ESAb

Indiaa

U. S./Canb

U. S. S. R.lFr

U. S./FRG

U. S./ESA

ESALI.S.

FRG/U.S./U.K.

Japan/U.K.

U. S. S. R.lFr

U. S. S. R.lFr

U. S.lFRGa

U. S. IF@

NOTES:

UV and X-ray spectrometry

Multinational experiments include biology, medicine,

botany, astronomy, and solar physics

Effects of solar activity on meteorological processes

U.S. providing medical research devices for primate

mission; U.S. biological experiments

Study solar wind, identify particle entry windows, energization and transport processes into magnetosphere

Investigations of space environment

Galactic X-ray imaging and determination of He

abundance in solar corona

Spacecraft and mission design are being coordinated

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 obsewations

Multi-parameter characterization of cometary

environment

Study solar/galactic CR ionization states

“Space Sled” to conduct neurophysiology research

Gamma ray source detection

Broad investigation of Jupiter environment

High-resolution coverage of optical and UV

wavelengths

Observations of Sun and interplanetary medium out of

the ecliptic plane

X-ray sky survey and sources study

Study spectral and time variation in X-ray sources

Study spectra of 0.1 to 2.0 mm radiation

X-raylgamma telescopy and burst detection

Wide-range gamma ray detection

Venus gravity and atmospheric tides

1. Table includes, in the case of future missions, only those officially approved. Tables does not include cooperative sounding rocket, balloon, and ground-based projects; 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 project activities involving ESA members with non-ESA

countries are considered as national cooperative ventures.

3. Multilateral joint ventures among Soviet bloc countries under the Interkosmos program are considered simply as Soviet missions.

4. Fr = France; U.K. = United Kingdom; It = Italy; Switz = Switzerland; FRG = Federal Republic of Germany; Neth = Netherlands; Aus = Austria; Dk = Denmark;

Ire = Ireland.

aForeign experiment (foreign Pl) on U.S. misSiOn.

bu,s experiment on foreign Spacecraft.

the present era the latter has not been a large consideration. NASA solicits foreign proposals along

with domestic ones, and selection of experiments

is made “blind. ” NASA officials insist that only

the best science is flown. However, some U.S.

scientists often object that any inclusion of foreign experiments is detrimental to U.S. scientific

interests: U.S. teams lose valuable opportunities

for support, and opportunities for U.S. development of technology are also lost. There is also

the frequent complaint that NASA’s periodic difficulty in funding science on American missions

(particularly in the case of Spacelab) means that,

in effect, the American taxpayer has paid for providing inexpensive science opportunities in space

to researchers of other nations.

However, as the technical capabilities of our

partners have increased, the scientific payoff from

cooperation has become increasingly evident.

The network of three satellites in ISEE (see table),

for example, was significantly enhanced by the

inclusion of the ESA satellite as well as by the foreign experiments present on all three spacecraft.
Ch. 9—Space Science ● 381

The one fact that has lent potency to many of

these criticisms in the past, however, has been

the lack of reciprocity for U.S. scientists as principal investigators on ESA missions.12 ESA has

now agreed to permit U.S. proposals in response

to its Announcements of Opportunity. There is

now a quota which is determined on a case-bycase basis, and procedures for carrying out the

new policy are being implemented. Officials of

both ESA and NASA feeI that the bottleneck will

now be NASA’s ability to fund U.S. experiments

on ESA missions.

Soviet Cooperative Effort s

With Other Parties

The U.S.S.R. entered the cooperative arena in

space science more than 10 years after the United

States. Its primary vehicle for international cooperation is the Intercosmos program, which was

constituted in 1967 (with the first launch in 1969)

to coordinate joint activities with Eastern European and other communist countries. The scientific program includes space physics and life

sciences, in addition to more applications-oriented space research. Over the first several years

a few scientific satellites were flown under the

Intercosmos label, but the focus of the program

appeared to be more political than genuinely

scientific or even genuinely cooperative.

But the Intercosmos program took on added

dimension in 1976 when it was integrated into

the manned spaceflight program. Under this plan,

cosmonauts from the member countries fly, one

by one, on Soviet missions to the orbiting Salyut

space station. Thus far, these have been “visiting

crews, ” dedicated to specific science objectives

and typically lasting 8 days. The foreign cosmonaut is a “flight engineer” or “research engineer”

(not the commander). Instruments or experiments

developed by the Intercosmos member country

u rider Soviet direction are flown up for use during the mission. The program appears to have

been highly successful and advantageous for the

Soviets, in the sense that they have gained much

political capital vis-a-vis the’ participating

countries.

I ISpace Science Research in the United States, op. cit.

Apart from the Soviet bloc countries, Soviet cooperative activities in space have extended only

to the United States, France, India, and Sweden.

The relationship with France has been especially

fruitful, and has involved quite substantive missions: an observatory for locating cosmic ray

sources (SIGNE 3, 1977); life sciences experiments onboard Cosmos 936 and 1129 (1 977/78);

instruments on the Lunokhod landers, Mars, and

Venera spacecraft; and a UV spectrographic instrument on the Prognoz station. Aread 3 (August

1981) has returned data on magnetosphereionosphere coupling; the UFT spacecraft, an

optical and X-ray astronomy observatory was

launched in March 1983. Plans for a joint Soviet/French mission to Venus in which Frenchmade balloons would be released into the atmosphere were recently altered to enable the Soviet

spacecraft to continue on to Halley’s comet (see

discussion of the International Halley Watch

below).

But the most striking cooperative project was

the inclusion in 1982 of a French cosmonaut in

the second crew to visit Salyut-7. A substantial

element of the mission was the installation of a

French medical diagnostic device, Aelita-1,

aboard the station. ’3 Gamma 1, a high-energy

gamma ray observatory (1986), Sigma, a more sophisticated gamma ray facility (1987), and a

cooled submillimeter telescope (1987).’4 Plans for

a Venus/asteroid lander in 1991 will probably involve France as well. ’ 5

France has engaged in this cooperation with

the Soviets in a spirit of objective pragmatism. The

French space science community has been able

to make great strides through access to Soviet

launchers and the well-developed Soviet space

program. Meanwhile, French technical skills have

significantly enhanced the Soviet capability, particularly in astronomy and the application of electronics. The U.S.S.R. has also been able to gain

considerable diplomatic advantage through the

relationship with a major Western nation, and has

13Accordi ng to recent agreements, the same dei’lce WIII be flown

aboard the U.S. Shuttle when a French astronaut participates in

a U.S. mission in 1985.

“Nigel Hen best, “Astronomy-The Next Space Race, ” New Sc/-

entist, Mar. 31, 1983.

1 sAb,iat/on Week and Space Technology, Apr. 1, 1985, pp. 18-20.
382 International Cooperation and Competition in Civilian Space Activities

capitalized on opportunities afforded by U.S.

space science program cuts.16 The collaboration

appears to have been mutually satisfying overall, although private discussions reveal some dissatisfaction on the French side with Soviet bureaucratic processes.

The other major Soviet cooperative activity

with a non-Communist nation has been with lndia. With the exception of the first Indian satellite, Aryabhata (1975), dedicated to solar and atmospheric studies, and an lndo-Soviet balloon

experiment in gamma ray astronomy in 1979, the

joint projects have been applications-oriented.

However, an Indian cosmonaut visited the Salyut7 station in April 1984.

Beginning in the early 1970s, India has parlayed

a very modest investment in space into a creditable program which is now nearing self-sufficiency. To do so it has relied on assistance primarily

from the United States, the U. S. S. R., and France,

and on a substantial pool of domestic scientific

talent. In the process it has successfully maintained a balance between independence and cooperation, becoming a model for Third World

countries not only in the development of a space

program, but also in dealing with the superpowers. It is partly India’s leadership role in the

Third World that attracts Soviet attention, for lndia represents a lever by which the space-related

organizations at the U.N. can be influenced.

European Space Agency:

Cooperative Outlook

Through ESA, the advanced European nations

have been able to mount a space program comparable in scale with those of the United States

and the U. S. S.R.17 Although a primary area of endeavor is space science, ESA’s budget (currently

about 16 percent of NASA’s) permits it to launch

a medium-class space science mission only every

18 months. Cooperative activity, with the United

States and with individual member nations, increases considerably the rate of participation in

space science.

~bsov;et space Programs: 1976-80, op. Cit., pp. 288-289.

1 TFor a full discussion of ESA’S evolution and its programs, see

Civilian Space Policy and Applications (Washington, DC: U.S. Congress, Office of Technology Assessment, OTA-STI-1 77, June 1982),

pp. 176-187.

Because of its limited budget, ESA has had to

conduct a more focused science program than

the United States or the U.S.S.R.—mostly astrophysics and astronomy, and some life sciences.

(Since space life sciences work falls within the

“optional” category of programs, it tends to be

dominated by individual nations, principally

France.) The Giotto mission to Halley in 1985 will

be the agency’s first planetary mission. Also, no

autonomous manned space activities have been

attempted (the German payload specialist aboard

Spacelab 1, Shuttle flight 9, was the first ESA

astronaut). Nevertheless, ESA’s accomplishments

in space science have been considerable. Cooperative missions such as International Ultraviolet

Explorer (IUE, 1978) and International Sun-Earth

Explorer (ISEE, 1977/78) have produced some of

the best science, and have been virtually textbook

cases of international joint ventures.

The subject of reciprocity for American principal investigators on ESA missions has already

been discussed. One point relative to that issue,

and to ESA’s long-term resistance on it, is that

(unlike NASA) ESA does not save money when

American experiments are flown; rather, the

member countries do, on a proportional basis.

Therefore, the loss of opportunity to a prospective European principal investigator looms much

larger as a factor. ESA has ultimately agreed with

NASA’s position that its program has reached maturity, and that U.S. assistance over the years must

now begin to be, in a sense, paid back.

Current or Planned Programs

As was pointed out earlier in this chapter, because of the increasing capabilities of space-faring

nations as a whole, cooperative ventures are increasingly common and increasingly affect the

competitive balance of the nations involved in

space and space science. The following brief case

studies illustrate the ways in which this dynamic

is being altered.

Infrared Astronomical Satellite (IRAS)

This trilateral mission was launched in January

1983, and was the first major astronomical satellite launched since 1978. A short-lived survey telescope, IRAS was first conceived by the Dutch
Ch. 9—Space Science 383

but, at nearly $300 million, was not affordable

as a national project. The Netherlands approached

the United States for assistance, and the cost was

split three ways among the Netherlands, the

United States, and the United Kingdom. The

spacecraft was built by the Netherlands, with the

United States providing a cryogenically cooled

infrared telescope and detectors, and the United

Kingdom providing the ground control and operations facility. The United States launched IRAS.

Although the detectors aboard the satellite functioned as planned for only 11 months,18 it returned a wealth of new scientific data on infrared

objects that were previously unobservable.

18The liquid helium used to cool the infrared detectors boils aWaY

over time, limiting the life of the detector to the lifetime of the available helium coolant.

Photo credit: National Aeronautics and Soace Administration

Infrared image of the center of the Milky Way galaxy

taken from the Infrared Astronomical Satellite (IRAS).

The Netherlands and the United Kingdom participated

with the United States in this survey mission.

Significant IRAS findings include:

● a suspected burned-out comet,

● dust in the asteroid belt,

● a ring of interstelIar dust and solid particles

orbiting the star Vega, and

● infrared-emitting galaxies.

International Halley Watch (IHW)

This designator refers to the network of groundbased observations and data coordination that

NASA will provide during the Halley missions in

1985-86. NASA will fund several international observational networks in addition to its own Deep

Space Network; these will form the link between

Earth-based and in situ observations of the comet

ephemeris (positional data). NASA will also make

supporting observations from Earth orbit via a collection of ultraviolet telescopes aboard the Shuttle, known as Astro-1.

Until mid-1982, there was a possibility 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 Japan.

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 missions. In addition, NASA is supporting U.S. co-investigators on nearly every Giotto

experiment. Interestingly enough, a U.S. instrument is being flown aboard one of the Soviet

Vega spacecraft. 19

There has been considerable multinational

communication among these participants (including NASA), and an “Inter-Agency Consultative

Group” has been established to coordinate encounter 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

from the U.S.S.R. Vega 1 probe will provide posiIg]ohn Noble Wilford, “u .S. Device Riding soviet Spacecraft, ”

New York Times, 12/21/84, p. A.1.
384 ● International Cooperation and Competition in Civilian Space Activities

tional data needed by ESA’s Giotto spacecraft in

its attempt to come within 1,000 kilometers of

the comet’s nucleus. The Vega spacecraft will

precede Giotto by several days, allowing its observations of the comet to be used in a final

course correction of Giotto.

Space Telescope (ST)

This is one of only two large U.S. astronomical

satellites currently approved (the other is the

Gamma Ray Observatory). Due for launch in

1986, it will be the most important telescope of

the decade, putting in space a 2.4-meter telescope with an innovative “honeycomb” mirror.

Instruments at the focal plane will include two

cameras, a spectrograph, and a photometer to

cover the UV and optical spectrum. ESA is contributing a Faint Object Camera, in the development of which seven countries are participating.

ESA will also provide the solar array and ground

operations support. In return, ESA astronomers

will receive 15 percent of the observing time.

This telescope will be able to detect objects perhaps 100 times fainter than are observable with

ground instruments, and is designed to last at least

15 years. NASA Administrator Beggs terms it “literally . . . a cooperative effort of the world’s

astronomical community. ”20 An important element of this cooperation is the creation by the

United States of the Space Telescope Science institute, in which scientists from many countries

are working to ensure thorough dissemination

and analysis of ST data.

Astro-C

This will be the third in a series of increasingly

large and sensitive Japanese X-ray satellites. Unlike its predecessors, however, Astro-C is a joint

mission between Japan and the United Kingdom.

Japan prefers the autonomy of a national mission—its space science budget, roughly as large

as ESA’s, will usually permit it. The United Kingdom also prefers national projects, but has not

had one since about 1977. It has, however, had

considerable X-ray experience in the Ariel series,

so Japan asked it to develop the very large detec20An 1“t~rvl~W ~lth jame5 M, Beggs, sky & Te/escope, Octobe r

1982, p. 332.

tor, to be accompanied by smaller Japanese detectors similar to those already flown. The United

Kingdom is now a “junior partner” in almost

every current joint astronomical mission.

International Solar Polar Mission (ISPM)

Planned initially as a completely joint ESA/U.S.

mission, ISPM became something of an international cause celebre when the United States canceled the most important part of its side of the

mission. The mission was to consist of two spacecraft (one from each agency) which would fly well

out of the plane of the solar system to cross the

north and south poles of the Sun. When NASA

was faced, in the Reagan Administration’s first

budget, with a large reduction, it became necessary to cut either the Galileo mission, ST, or

ISPM. ISPM was tapped–that is, the U.S. spacecraft was canceled. However, the United States

will still launch the ESA satellite, provide tracking and data relay, and fund a number of experiments on the remaining satellite.

The European reaction was unexpectedly

strong and outraged. ESA had spent $100 million

on the project, and was counting on the unique

stereoscopic view of solar phenomena made possible by two satellites. In addition, European

scientists planning to fly experiments on the U.S.

craft lost their opportunities. The affair has since

cooled down, although it is even now a sore point

raised as an example of the dangers of international cooperation on a major project.

Outlook for Future International

Cooperation

In some respects, the era of small-scale missions

performing valuable space science is nearly over.

All new planetary missions and all manned and

most biological missions are expensive; the next

generation of cooled IR and X-ray observatories

will also be expensive. State-of-the-art missions

in space science will increasingly require multifunding cooperation in order to be done. ROSAT,

Galileo, GRO, Starlab, FUSE, OPEN, ISTP (see

table 9-1 )—the list of planned and proposed joint

ventures is long—and U.S. commitment to cooperate remains strong. The President’s “National

Space Policy,” announced in July 1982, reaf-
Ch. 9—Space Science . 3 8 5

Photo credit” National Aeronautics and Space Admin/strallon

Artist’s conception of the International Solar Polar Mission in its original configuration. NASA and ESA were to have

flown two separate satellites, each in opposite directions over the Sun’s poles. There will now be a single ESA satellite

with participation from the United States. In this drawing the solar wind (cosmic rays emitted by the Sun) is depicted

by the snake-like trail emanating from the Sun. The arrows indicate material that the Sun emits from its polar regions.

firmed the need to “promote international cooperative activities in the national interest” as a

basic goal. This goal was reemphasized in the

State of the Union Address delivered in January

1984, in which the President expressed his expectation that “NASA will invite other countries

to participate” in a U.S. space station effort.

The concerns provoked by ISPM and by U.S.

budgetary uncertainties in general have brought

about a change in outlook more than behavior:

“We learned a great deal about the U.S. budgetary processes, ” as ESA’S Washington representative puts it. “. . . We shall be more cautious in

the future about drawing up agreements. ” NASA’s

Director of International Affairs, Kenneth Pedersen, asserts that there are three assurances that

NASA can offer ESA: 1) the ISPM experience, with

its repercussions, makes it less likely that similar

events will take place in the future; 2) budgetary

austerity means that only top-priority (and therefore not expendable) science projects will be approved; and 3) space science is on the upswing

within NASA.

Jointly coordinated planning and management

will probably be essential in the future. One approach is the current activity of a Joint Working

Group of the NAS Space Science Board and the

Space Science Committee of the European Science
386 International Cooperation and Competition in Civilian Space Activities

Foundation toward establishing a framework for

the joint conduct of future planetary exploration.

These discussions include formulation of a strategy in terms of science goals and missions, and

definition of a desirable approach to long-term

cooperation.

The broadening of cooperation will inevitably

require the leading countries in space to deal on

a policy level with the pressure from Third World

countries for participation, as expressed recently

by some members of the Committee on the

Peaceful Uses of Outer Space (COPUOS), delegates to UN I SPACE ’82, and attendees at the February 1983 Intergovernmental Meeting of Space

Technology Experts.2

~ This consideration is not

as directly relevant to space science, however,

as it is in the areas of launcher development and

applications-oriented space activity. Nevertheless, it will play a role in the space sciences, particularly in light of the Soviets’ apparent willingness to train and fly cosmonauts from

developing countries (e.g., India). The United

States must remain cooperative in order to remain

competitive.

ZI UNISPACE ’82: A Context for International Cooperation and

Competition, op. cit.

THE ROLE OF COMPETITION IN SPACE SCIENCE

It is a truism, certainly in our free market system, that competition promotes better performance. This applies in space science as well,

whether on a national level, between research

teams and laboratories, or on an international

level, between space agencies. But competition

in space science works to the advantage of some

more than others. There are many factors at work

other than sheer technical and scientific capability. Institutional and economic variables on the

national level come equally into play. For example, the amount of funding allocated is obviously

a major factor. But also important is the degree

of governmental commitment to an endeavor

that will not immediately produce revenues or

increase the standard of living of the populace.

This “willingness to take a risk” is essential; if,

for example, a country provides governmental

support for the training of graduate students in

astrophysics, then that activity is more likely to

flourish competitively. The style of management

accorded space science R&D and missions operations is another important factor; a cumbersome,

multilayered bureaucracy will not allow efficient

conduct of space science. Long-range planning

is also crucial: it must include realistic goals, an

intelligent assessment of scientific priorities, and

a shrewd appraisal of foreign plans. The degree

to which scientific opinion enters into the planning process is also a factor.

All of these factors combine to shape a country’s competitive posture. It may then be asked,

does a country’s competitive strength, gauged by

these criteria, determine its standing among nations participating in space science? Are there

clear winners and losers on the international

scene?

Prospects for a “Space

Science Race”

The answer to that question, for the moment,

appears to be “no.” In large part this is because

two of the principal players, the United States and

the U. S. S. R., have for decades had the game essentially to themselves. They have competed, but

only at times “head-to-head,” and in any event

there was no actual prize to win, beyond political prestige. Each nation has essentially cultivated

its own group of proteges. In the case of the West,

some of these client nations have only recently

begun to acquire a degree of self-sufficiency in

the support of space science programs. There is

not yet adequate scope or momentum in these

programs to surpass the United States in any area.

Space science missions are selected out of a

common pool of ideas that, in most cases, have

been around for more than a decade. There is

no element of surprise. There is certainly no point

in duplication of missions, or in racing to launch.
Ch. 9—Space Science 387

A case in point is ESA’s decision to build an lnfrared Space Observatory (ISO), which will be

similar in performance to NASA’s planned Shuttle Infrared Telescope Facility (SIRTF). The likely

outcome is two separate missions with overlapping but independent experiments to prevent too

much duplication. In general, scientific data are

shared fully in the West, and it is to the benefit

of all concerned to continue doing so. The continuing flow of information even between East

and West makes this point clear.

To say that there appears to be no scientific

space race in prospect is not to say that competitive factors have no impact. institutional commitment and funding levels will inevitably affect the

rate, efficiency, quality, and economy of missions

mounted and science performed. The positive

image and reputation for reliability thus gained

would then make a country an attractive cooperative partner, not only in space science but in

the more commercial areas of space activity as

wel I.

One further point that should be made is that

it is onIy i n the planetary sciences that there are

tangible “prizes” to be won. Soviet spokesmen

have consistently hinted at an agenda consisting

of: 1 ) permanent manned presence in Earth orbit, 2) colonization of the Moon, and 3) manned

missions to Mars.22 The first step is already a reality, for all practical purposes. Any resumption

of an active “space science race” between the

United States and U.S.S.R. would likely focus on

the second. However, science would only be incidental to such a contest.

Current Ranking of Participants

It was pointed out earlier that technical, economic, and institutional factors determine a nation’s “competitive posture” for space science,

and that this affects its ranking among nations—

although historical factors are at this point predominant. The following is a brief assessment of

the ranking of the four major entities in space

science:

ZZSa Iyut: SoL,le( steps Towarc/ Permanent Human Presence in

Space, op. cit., p. 4.

●

●

●

●

United States. The United States is clearly the

overall leader in space science. This is true

even in view of the fact that only one mission (Solar Max) was launched between 1978

and 1983, while resources were being focused on the space shuttle. U.S. current

weaknesses in X-ray astronomy will be rectified (it is hoped) by the proposed Advanced

X-Ray Astronomical Facility (AXAF); but at

any rate will be improved by participation

in the German ROSAT mission. The languishing planetary program will be revived

by the Galileo mission to Jupiter and by the

Venus Radar Mapper (a new start in 1984)

and a proposed Mars Geoscience/Climatology mission (a new start in 1985). Life

sciences is being resumed in earnest on

Spacelab, with two dedicated Spacelab life

sciences missions tentatively scheduled for

1985 and 1986.

European Space Agency. ESA’s development

in space science during the 1970s was rapid,

as demonstrated by the ESRO and HEOS satellites, and especially by COS-B, a highly successful gamma ray satellite. A number of important joint missions with the United States

augmented its autonomous programs in astronomy and astrophysics, which are now

being continued with Exosat and Hipparcos.

ESA’s venture to Halley’s comet is its first

planetary mission. On the basis of technological sophistication and diversity of

science, ESA is ahead of the U. S. S. R., although not by a wide margin.

Soviet Union. The Soviet Union ranks ahead

of Japan principally on the basis of its highly

successful Venera series. Using vacuum-tube

technology to withstand the planet’s high

surface temperature, this program has been

impressive. Another strong mission is Venera-Halley, which will drop probes to Venus

and continue on to rendezvous with the

comet. The U.S.S.R. is also advanced in the

life sciences, both animal and plant–chiefly

because of the huge number of man-hours

in space that its Salyut program has afforded.

The Soviet effort in astronomy relies to a

great extent on French technical capability.

Japan. This country is fourth, but is probably

moving the fastest. It currently has a narrowly
388 ● International Cooperation and Competition in Civilian Space Activities

- .

-

7-1 8

rJi’- 1 s

Photo credit: /nstitute of Space Research, U.S.S.R. Academy of Sc/ences

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

focused program of solar-terrestrial and astrophysics research. The Planet-A mission to

Halley will be its first planetary mission. Japan has about one-tenth of NASA’s budget

for space expenditures, and like NASA’s, the

overall budget has not grown substantially

in recent years. I n Japan, space science research is conducted by the Institute of Space

and Astronautical Science (I SAS), a division

of the Ministry of Education. Although the

budget for space science has increased substantially in recent years, most of the increase

has gone for the construction of a new campus on the outskirts of Tokyo. Thus, of the

$80 million fiscal year 1983 budget for ISAS,

$58.5 million went for space science and observations and $0.5 million for the highaltitude balloon program, with the remaining $21 million for various overhead costs;

the increase for space science and observations in the fiscal year 1984 budget was a

modest 4.3 percent, bringing its total to some

$60.9 million. With the advent of a U.S.

space station, Japanese spending for space

science could be expected to rise more

sharply. A Japanese space official estimates

that Japan is 5 years behind ESA and 15 years

behind the United States in space science.

The new ISAS facilities, however, should

position Japan well for future efforts to overtake ESA.

Tradeoffs Between Competition

and Cooperation

The conduct of space science in a cooperative

yet increasingly competitive atmosphere gives rise

to some crucial policy issues. For example, the

reduction of opportunities for U.S. space scientists In recent years brings to a sharper focus the

criticisms of our open policy toward foreign proposals. There is a tendency toward a protectionist

attitude among scientists, who view some collaborative efforts as “giveaway s.” The only answer

to this is to ensure that foreign experiments win

approval on their own merits in every case, and

that foreign governments pay their full share of

every joint project. Yet policy decisions may occasionally override these considerations, particularly in the case of Third World countries. A policy for dealing with this issue will be required.

There is, as yet, no formal policy for dealing

with the issue of technology transfer. Currently

such decisions are made on a case-by-case basis,

and there is room for error here. Such a policy

will be difficult to implement, because the concerns are specific to each case. Often, there is

no problem because the technology is packaged

in such a way that it cannot be compromised.

But the growth of cooperative activity (e.g., between the French and the Soviets) increases the

risk of loss from both primary and second-party
Ch. 9—Space Science 389

transfer. Our cooperative partners in space science are increasingly likely to be our industrial

competitors.

Markets for Hardware and Services:

Space Science as Growth Industry

In recent years the most vigorous and dynamic

areas of the U.S. economy have been the hightech fields: electronics, data processing, communications, robotics. The conduct of state-of-theart space science relies to a great extent on these

fields, and on specialized applications such as

high-quality optics and sensors. The value of this

endeavor to the stimulation of further growth in

these fields, and thus in the economy, has not

yet been estimated. However, in the context of

an overall NASA space science budget of $1,030

million (fiscal year 1985), it is clearly considerable.

What are the essential products and services

at issue? They fall into three categories:

● Instrumentation. This category includes all

sensing devices and associated hardware

mounted on a scientific spacecraft: telescopes (including mirrors, lenses, housings,

and mechanisms for placing instruments at

the focal plane); detectors (e.g., gamma ray,

X-ray, IR) and spectrographs, cameras, and

associated systems such as cryogenic cooling apparatus. Major variables affecting cost

and availability include spectral resolution

and sensitivity.

● Spacecraft. This is essentially the development of numerous variations on a theme,

with main components being the mounting

platform, an electrical bus for powering the

instruments, and a system for thermal control. The technology is fairly standardized.

One area where R&D is still quite active is

in the search for ways to improve pointing

accuracy and stability (accomplished by

feedback loops between the instruments and

the attitude control system). The improvement of on board computer technology in

terms of storage capacity and data rates is

another developing area. Most systems (e.g.,

gyroscopes) are not particularly competitive

in terms of technology. U.S. manufacturers

dominate the field internationally, and are

closely grouped in the sense of product capabilities, performance, and quality. The real

competition here is in price and reliability.

Data Processing. This category includes all

computer systems and facilities on the

ground for reception, analysis, and dissemination of spacecraft data. This area is the

least relevant to a discussion of the national

and international markets, since most U.S.

missions do not require new facilities but rely

on existing equipment at JPL (planetary m issions) and Goddard Space Flight Center. Because this is the least critical area relative to

mounting space science missions, large differences in ground-link data processing capability among nations have relatively little

effect on space capability. (A case in point

is the U. S. S. R., which has only in the past

2 years modernized its ground control facilities approximately to a mid-1970's level of

U.S. computer technology.) Nations with no

capability (e. g., The Netherlands) generally

exchange scientific data for tracking and data

processing services.

International Trade Factors

There are 13 U.S. space systems manufacturers,

with two or three times that number supplying

major components. Of these, only five have ever

manufactured space science spacecraft: Hughes,

Boeing, TRW, Grumman, and Ball Bros. * This

fact indicates as well as any other statistic the

small size of the market in this area relative to

that for launchers, applications satellites, and military systems. I n dollar terms, the domestic market amounts to about 85 percent of the NASA

space science budget in any given year (e. g.,

roughly $716 million in fiscal year 1984), for systems, components, and data analysis.

The main point to be made is that, although

there is a national market, there is only a very

small international market in space science technology. Boeing has contracted to Sweden to build

the Viking satellite, at a cost of $9 million to $10

million. Ball Bros. manufactured parts of the IRAS

spacecraft. The total annual U.S. sales to foreign

* RCA and GE, however, have built research satellites for Earth

K Ien( e m I st I o ns.
390 International Cooperation and Competition in Civilian Space Activities

countries, including components and spares,

does not exceed $50 million, and in some years

is less than $20 million. Foreign space programs

are generally required—whether implicitly or explicitly–to keep their business at home. It is significant that no U.S. company has foreign sales

representatives for these systems.

Foreign companies’ sales to the United States

are even more limited. The solar arrays on Space

Telescope will be built by British Aerospace. The

German firm Telefunken manufactures traveling

wave tubes that have been bought by U.S. manufacturers for use in on board communications

systems. Zeiss is a competitor of Perkin-Elmer in

optics. But in general, U.S. companies are far

ahead of their foreign counterparts in the development of space science satellites and systems.

One development having potential implications

for the stimulation of a market in this area is Boeing’s development of MESA, a “generic” platform

satellite similar to that being supplied to Sweden.

Their approach is to offer a low-cost, standardized bus and then to assist scientists in shaping

the experiment to fit within its parameters. Boeing is marketing this system internationally with

the help of Arianespace and Matra, the French

space companies.

SPACE SCIENCE IN DEVELOPING COUNTRIES

The Allure of Space Science

Any discussion of this topic must be prefaced

by an acknowledgment that the interest so vocally expressed by Third World countries in greater

participation in space activities is explicitly an interest in the “practical” side of space: television

and telephone communications for business, educational, medical and other purposes; remote

sensing of their terrain and weather; launcher

services, etc. Chapters 3, 6, and 7 in particular

address these major aspects of the subject. Astronomy or planetary exploration for their own

sake are “IUXUries” that the Third World cannot

yet contemplate.

Yet there is a small but essential role for space

science in the context of Third World aspirations.

Even though developing countries are particularly

interested in the economic and practical benefits of space activity, they are not unaware of the

fundamental value of space science:23

It is sometimes argued that basic science in

general, and space science in particular, are not

important in a world pressed by practical problems. This is not correct. Besides the fundamental argument that an understanding of the universe is important in its own right, it is also true

that initiatives in space applications have most

often been taken by people who were earlier

motivated by their interest in space science.

Space science offers the ability to build the necessary skills and knowledge, the research groups,

the facilities—the infrastructure for space applications. It also offers a model for the kind of largescale cooperation with the primary space nations

that is needed to build and sustain an applications program. The following “directions to follow” are excerpted (and summarized) from the

UN ISPACE Forum report:24

1. Obtaining Scientific and Technical Capabilities:

●

●

●

Training of scientific/technical personnel

by:

— inviting foreign experts;

— training in foreign countries; and

— participating in seminars, conferences,

summer study sessions, etc.

Such training should be strengthened

through locally conducted space experiments (usually cooperative and modest).

Training must not be overspecialized.

Basic training in electronics, optics, computer sciences, etc., is essential.

23RepOrt of the Second United Nations Conference on the Exploration and Peaceful Uses of Outer Space, Vienna, Aug. 9-12,

1982.

24’’ Relevance of Space Science for Development, ” in the Conclusions from the UN ISPACE Forum, Vienna, Aug. 4-6, 1982, pp.

2-3.
Ch. 9—Space Science ● 391

● Training of high-level scientific and technical teams should be emphasized over

training of individual specialties.

2. Fostering International Cooperation:

● Smaller countries, of modest means, can

develop a major space capability only by

forming into groups (e.g., ESA, lntercosmos).

● Developing nations can participate in the

space activities of industrialized countries

by:

— studying data from foreign satellites,

– developing their own receiving stations,

— participating in balloon or sounding

rocket experiments,

— participating as guest investigators in

foreign projects, and

– developing instruments for flight

aboard foreign spacecraft.

● Development of regional space research

centers and facilities could provide benefits at a low cost.

Difficulty of Joining the Space Club

One of the expressed motivations underlying

U.S. cooperative activities in space is the political one of winning friends and influencing nations. This rationale certainly applies in those

areas of the world where the diplomatic balance

is less certain than it is among our major allies.

Thus, our past cooperative ventures in space

science with countries such as India, Pakistan,

Peru, and Brazil have a larger significance than

their purely scientific content would indicate.

As was noted earlier, because of the great increase in cost of space science projects there is

likely to be more cooperation in the future. An

increase in cooperative activity in general will

make the pressure from the Third World for participation more significant. Competition for cooperative activity as a po/itica/ tool is therefore

likely to be an increasingly important factor on

the world scene. president Reagan’s offer in early

1984 to fly an astronaut from the People’s Republic of China is certainly a case in point, though

subsequent discussion of this possibility has

focused on ensuring a substantive science return

with space plasma physics as the most likely subject of joint investigation.

Although many developed nations (and ESA)

may eschew cooperative arrangements in which

the outlay is one-sided—as it will necessarily be

in the case of space science—the United States

probably cannot afford to overlook the political

side of these activities. At the very least, policymakers should be aware of the value of low-level

scientific activities in building part of the infrastructure needed for participating in applications,

and should make this consideration part of any

long-term policy regarding the involvement of developing nations in our space program.

SPACE SCIENCE IN THE 1980s AND 1990s: A VITAL CONCERN

As an enterprise, space science has not had

quite the drama of the manned space programs

of the 1960s and early 1970s; likewise, the interest in commercialization in space may overshadow its achievements in the public mind. Yet space

science has a healthy future. The reaction to the

Viking photographs, and especially to the Voyager revelations and IRAS discoveries, showed

that there is a lively public fascination with basic

discovery in space. The findings of the space

telescope may have a similar impact. There is a

strong base of public support for space science

in the United States, one that will help to preserve this essential undertaking from long-term

budgetary decline.

As a foundation for applications in space, space

science will continue to be a most useful tool for

diplomacy. Space science will also continue to

be one of the small drivers of the most advanced

elements of our national industry and economy,

fueling innovation and growth in many areas. This

will be particularly important as private investment in space expands.

Finally, it may be that space science will prove

valuable as an offset to military competition in
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

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 fruitful area of international exchange on many levels. At this point,

the scientific value of reestablishing that interchange may exceed the political value of continuing to interdict it. Although the political benefits to be gained by cooperating with the Soviets

appear relatively small, *s the scientific benefits

of cooperating in certain subfields of space science could be well worth the effort. In the previous agreement, the two primary areas of scientific cooperation were in projects studying space

biology and medicine and the Moon, planets, and

near-Earth space. Of the two, the most substantive and successful cooperation was in the life

sciences.

Scientists actually involved in these exchanges

believe that the overall success of the collaborations in life sciences can be attributed to:

25/55ues in us-soviet Cooperation in Space, Office of Tech nology Assessment, in press.

o

1.

2,

34

4.

5.

a focus on well-defined and specific scientific objectives;

the selection of areas of complementary abilities, which provides strong motivations to

continue to cooperate once a project is

started;

the selection of instrumentation that did not

raise concerns about technology transfer;

institutional organization that gave officials

on both sides the autonomy to decide how

to implement plans; and

the development of mutual confidence,

knowledge, and goals among working groups

over a long period of cooperation.
Ch. 9—Space Science 3 9 3

In the planetary category, the strongest areas

of cooperation were in lunar studies, the exploration of Venus, and solar-terrestrial physics. The

exchange of lunar samples and cartographic data

provided both sides with a range of information

unobtainable by either program alone.

As noted above, however, Public Law 98-562

proposes a limited renewal of U.S./U.S.S.R. cooperation. Such cooperation, if renewed, should be

based primarily on the lessons learned from previous cooperative programs,

Project Continuity

From a political standpoint, the most important

thing the United States can do to maintain its position of leadership in space science is to provide

assurances to cooperative partners that our commitments will be kept. The u n i lateral decision of

the United States to reduce sharply its role in

ISPM continues to be mentioned as an example

of U.S. unpredictability in cooperative efforts.

Assurances may have to take the form of multiyear funding for international missions, so that

they are not subject to the vagaries of annual

budgeting. Although U.S. political institutions are

not structured in such a way as to make multiyear funding generally either particuIarly desirable or feasible, given the importance of our relationships with our allies, providing multi-year

funding for certain specific space projects may

be appropriate.

Choosing Specialization

Given the peculiar competitive environment of

space science, i n which ‘‘racing” others for specific accomplishments is counterproductive,

competition is likely to take the form of long-term

jockeying for areas of specialization (e.g., astronomy, planetary missions). Manned planetary

missions (supported by life sciences research)

ultimately hold the greatest strategic importance;

it is this area that the Soviets appear to be emphasizing. Yet astronomy and astrophysics are

perhaps more important to the advancement of

related Earth-bound technologies and to the acquisition of knowledge essential to Earth-sensing

and meteorological applications.

Technology Transfer

The United States may embark on a program

to build long-term infrastructure in space for

manned activities.26 If so, such a program will certainly include some space science research. Many

of these space science projects, and indeed, certain components of this infrastructure, may include cooperative efforts with other countries. It

will be important for the United States to work

out policies governing technology transfer to ensure that we do not give away our competitive

edge, while cooperating as fuIIy as possible with

others.

Ibcivilian space stations and the U.S. Future in Space (Washington, DC: U.S. Congress, Off Ice of Technology Assessment, OTASTI-241, November 1984).
Chapter 10

POLICY ALTERNATIVES
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

Participation 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

Organizing for the Future . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .............414

Maintenance of U.S. Leadership . . . . . . . . . . . . . . . . . . . . . . .................414

Scientific Research and Technology Development, . . . . ..................415

Commercial 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 program has developed was first articulated in the

1958 National Aeronautics and Space Act (NAS

Act), which provided broad guiding principles for

U.S. space activities. The Act authorized the formation of the National Aeronautics and Space

Administration (NASA) and declared that “activities in space should be devoted to peaceful purposes for the benefit of all mankind” (sec. 101 (b)).

It specifies, among other things, that NASA should

conduct its space activities so as to contribute to:

●

●

the preservation of the role of the United

States as a leader in aeronautical and space

science and technology and in the application thereof to the conduct of peaceful activities within and outside the atmosphere; and

cooperation by the United States with other

nations and groups of nations i n work done

pursuant to this Act and in the peaceful application of the results thereof.1

Where necessary, Congress has enacted other

specific legislation, such as the Communications

Satellite Act of 1962,2 which created the Communications Satellite Corp. (COMSAT) and aided

in establishing INTELSAT, 3 or took other legislative measures to advance the civilian uses of

space .

4 All of these measures have built on the

provisions of the NAS Act.

The broad policy principles of the NAS Act

have allowed each successive Administration

considerable latitude in deciding how to imple-

‘ National Aeronautics and Space Act of 1958, as amended, sec.

102 (c), Public Law 85-568, 85th Cong., H.R. 12575, july 29, 1958.

2Communlcatlons Satellite Act of 1962, Publlc Law 87-624, 87th

Cong., H.R. 11040, Aug. 30, 1962.

3Communications Satellite Act of 1962, Amendment: International

Maritime Satellite Communications Act, Title V, Public Law 95-564,

N O V. 1, 1978.

4

For a more detailed discussion see: U.S. Congress, Office of Technology Assessment, Civilian Space Policy and Applications, OTASTI-177 (Washington, DC: U.S. Government Printing Off Ice, June

1982), ch. 10. Congress also enacted the National Science and Technology Policy, Organization and Priorities Act of 1976 (Public Law

94-282), which, among other things, authorized the formation of

the Office of Science and Technology Policy,

ment its basic provisions. Over the past 27 years,

the Act has been amended from time to time, but

its basic guiding principles, including the above

references to competition and cooperation, have

remained intact. According to most observers,

because of its generality, the NAS Act remains

an appropriate overall guide for the Nation’s civilian space activities. s Nevertheless, the terms

on which the United States and other nations

operate in space have altered dramatically over

the years. As the analysis of previous chapters has

emphasized, the emergence of commercial and

governmental competition from other industrialized nations in space, the increasing interest of

the U.S. private sector in space investments, concern over access of U.S. firms to foreign spacerelated markets, and changes in the climate of

cooperation with both developed and developing countries, raise several important policy

questions:

10

2.

3.

4.

What new national goals and objectives, if

any, are needed to sustain the general principles of the NAS Act in the 1990s?

What alternative approaches or strategies

should be considered by Congress in implementing these goals and objectives?

What are the appropriate roles of individual Government agencies, including NASA,

in carrying out future space policy and conducting governmental space activities?

What is the appropriate role of Government

in supporting and” regulating private sector

activities in space?

Space Policy and National Objectives

The use of space technology is undergoing a

period of rapid and significant change. Because

decisions concerning many domestic space-re5See, for example, Finding 2, Sec. 202 of Public Law 98-361, which

states, “The National Aeronautics and Space Act of 1958 has provided the policy framework for achieving this success (of the U.S.

space program), and continues to be a sound statutory basis for

national efforts in space. ”

397
398 ● International Cooperation and Competition in Civilian Space Activities

lated issues necessarily affect decisions over international issues related to foreign competition

and cooperation, domestic and international concerns must be considered simultaneously. Examples of such domestic issues include the deregulation of the communications industry, the efforts

to transfer space-based land remote sensing to

private ownership, the development of a commercial space transportation industry, and the development of commercial products from research

on materials processing in space. The necessary

interaction of domestic and international issues

has produced a complex, and sometimes conflicting, matrix of policies. For example:

●

●

●

●

our desire to benefit from the technology

developed in the space programs of other

developed countries and our commitment

to assisting developing countries suggest increased cooperation. Yet, our desire to limit

the transfer of technology to economic as

well as political competitors, maintain U.S.

technological leadership, and ensure that the

economic benefits of U.S.-developed technology flow directly to the U.S. economy,

suggest a more restrictive international

stance.

U.S. commitment to free trade and open

markets supports policies of reducing Government subsidies of space industries and

eliminating “buy-national” practices. Yet

most countries, including the United States,

use “buy-national” policies to support fledgling space industries and develop valuable

experience with space technology.

The United States encourages the participation of the private sector in all aspects of

space technology development and application. Yet, in such important areas as space

transportation and remote sensing, the Government’s own programs have created barriers to the successful commercialization of

these technologies.

The NAS Act gives NASA responsibility not

only for developing untried technologies but

also for supporting critical U.S. competitive

and cooperative goals, including commer-

●

cialization of space tech nology.6 Yet the political and economic dimension of space

technology already exceeds the purview of

any one Government agency 7—let alone one

dedicated to the demanding task of research

and development of intricate and advanced

space technology.

The United States espouses the virtues of

commercial competition in satellite communication services, yet foreign policy interests

may cause it to restrict U.S. satellite firms

wishing to compete in international facilities

markets,

There is no single resolution of these sometimes

conflicting policies. This report has explored the

application of these and other policies as they relate to specific space technologies, Because the

path from initial conception to a mature technology capable of governmental, commercial, or scientific application is a complicated one, involving many decisions of the Government and the

private sector, it is clear that no single set of policies can ever be sufficient to govern all space

technologies. The development of space goals

and the policy strategies chosen to pursue them

must follow an evolutionary process, responding

to specific technical as well as social, economic,

and political problems.

One end of the spectrum of policies related to

space technology applies directly to questions of

technology R&D and Government programs; the

other applies to the development of domestic

commercial space industries and to their success

in international markets. In the latter, space policy may serve as a component of more general

industrial policies. As the debates over transfer

of remote sensing to the private sector, or over

the appropriate U.S. response to private competition with INTELSAT, have shown, proposed commercial space ventures may raise important issues

bPublic Law 98-361 amends the NAS Act to give NASA responsibility for commercializing space technology.

Tln addition to NASA, the Departments of Agriculture, Commerce,

Interior, and State as well as the Agency for International Development, the Federal Communications Commission, and the National Science Foundation, all have some responsibility for portions

of our overall civilian space program.
Ch. 10—Policy Alternatives ● 399

of foreign policy. In some instances, it will be necessary to choose between the claims of private

commercial interests and the demands of diplomacy and international relations.

These considerations underscore the need for

a new national debate and consensus on the Nation’s important goals and objectives in space.

Given the current confusion which exists regarding the future of space technology and the role

of space policy as it relates to other national policies, including industrial policies, well-articulated

goals would do much to focus the space debate

and increase the likelihood of resolving specific

problems. Once specific goals are articulated, it

will be easier to identify specific objectives to

carry us from where we are today to where we

would like to be a decade or two from now. In

time, as relevant technical, economic, social, and

political changes occur, these goals will have to

be reexamined and, where appropriate, revised

in the light of such changes.

Setting Goals and Objectives

In framing the NAS Act, Congress in 1958 recognized the need for ongoing high-level policy

review by establishing the National Aeronautics

and Space Council (NASC), which was chaired

first by the President, and later by the Vice-President and included the Secretaries of State and

Defense, the Administrator of NASA, and the

Chairman of the Atomic Energy Commission. Its

responsibilities included surveying all U.S. space

activities, both civilian and military, developing

a comprehensive program for Government agencies, and coordinating all Government space programs. The Council oversaw the U.S. space program during the critical years of the Apollo

project.

The Nixon Administration abolished the NASC

in 1973, in part because of a shift in emphasis

after completion of the Apollo project that placed

the Office of Management and Budget (OMB)

closer to the center of space policy decisions.

President Carter assigned formal responsibility for

space policy coordination to a National Security

Council Policy Review Committee for space (PRCspace), chaired by the director of the Office of

Science and Technology Policy (OSTP). President

Reagan established a Senior Interagency Group

for space (SIG-space) under the chairmanship of

the Assistant to the President for National Security Affairs.

The way in which space policy has developed

in the last decade reflects a generally reduced

congressional role. As the organization and conduct of space policy became centered in the

White House, the twin goals of providing for national security and limiting increases in the Federal budget tended to be the most important determinants of national space policy. A strong

indication of these trends is the central role

played by OMB in White House policy reviews,

and the membership of SIG-space: NASA, the Departments of Defense, State and Commerce, the

Office of the Special Assistant to the President for

National Security Affairs, the Central Intelligence

Agency, the Joint Chiefs of Staff, and the Arms

Control and Disarmament Agency. Of these, all

but NASA and Commerce are primarily concerned with national security and foreign policy.

Much of the success of the NAS Act can be ascribed to the fact that the Act was a bipartisan,

broadly representative response to the perceived

threat of early Soviet successes in space. It represented a national consensus on outer space.

Although the international use of space has changed

radically over the years, since the NASC was disbanded there has been no broadly constituted

national review of this Nation’s long-term goals

and objectives in space. Recent reviews conducted within the executive branch have been

useful for focusing attention on the near-term

needs of the space program, but they have been

dominated by individuals within NASA and the

aerospace community and have often been influenced by immediate political and budgetary

issues. According to many observers, it is now

appropriate to institute a national debate that includes a wider range of U.S. industry and society and focuses on the long-term goals and objectives for outer space.8

Recent interest in commercial opportunities in

space and concern over U.S. leadership has led

8U. S. Congress, Office of Technology Assessment, Civi/ian Space

Stations and the U.S. Future in Space, OTA-STI-241 (Washington,

DC: U.S. Government Printing Office, November 1984).
400 ● International Cooperation and Competition in Civilian Space Activities

to increased congressional involvement in space

policy. The 98th Congress formulated and passed

three major bills:

●

●

●

Public Law 98-361, provisions of which: 1)

amend the NAS Act to require NASA to

“seek and encourage, to the maximum extent possible, the fullest commercial use of

space, ” and 2) establish a National Commission on Space;g

Public Law 98-365, * an act which provides

for transfer of space-based land remote sensing to the private sector (see ch. 7); and,

Public Law 98-575,** an act to encourage

the commercialization of expendable launch

vehicles (ELVS) and related services. In addition, bills dealing with satellite communications have also been introduced by several Members.

Many observers, including OTA,1° have suggested that, given the increasing number of governmental and private users of space technology,

and the emergence of foreign commercial competition, any body established to recommend

policy should be as diverse and broadly based

as possible. The National Commission on Space

is expected to, among other things, help the

United States:

1. define the long-range needs of the Nation

that may be fulfilled through the peaceful

uses of outer space;

2.

3.

4.

maintain the Nation’s preeminence in space

science, technology, and applications;

promote the peaceful exploration and utilization of the space environment; and

articulate goals and develop options for the

future direction of the Nation’ s-civilian space

program. 1 1

The Commission’s term is just 1 year. This will

probably be sufficient to determine important

new goals and objectives for the U.S. space program and to lay the groundwork for further policy discussion. However, it may be appropriate

to extend the Commission’s term beyond 1 year

in order to assure continued broad-based discussion of these goals and objectives.

In addition to developing recommendations for

goals and objectives, it may be appropriate for

the Commission to suggest strategies by which

those goals and objectives might be carried out.12

The previous chapters illustrate the potential (beyond satellite communications) for commercial

application and the opportunities for international

cooperation in the various space technologies.

In all cases, effective policy decisions can be

made only after careful analysis of the individual characteristics of the individual technologies.

Moreover, a range of broad “strategies” articulated by the Commission would aid the development of policy for individual technologies. The

following sections summarize elements of competitive and cooperative approaches.

qPublic 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.

IOSee, for example, Civilian space Policy and Applications, 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 Subcommittee on Science, Technology and Space

of the Committee on Commerce, Science, and Transportation, Mar.

1, 1984.

*Text in app. C.

* *Text in app. D.

1 ITitle II, public Law 361, the National Aeronautics and Space

Administration Act of 1984.

I ZThe OTA assessment, civilian Space Stations and the U.S. Future

in Space, op. cit., suggests a list of goals and objectives that such

a commission, if appointed, might wish to consider.

APPROACHES TO COMPETITION

Like other U.S. industries, space-related industries contribute to the overall economy by producing goods and services, by providing employment and tax revenue, and by making export

sales. Like other industries, they are affected by

Government policies of many kinds, but they also

have certain unique characteristics related to the

Nation’s overall goals for space. As a result, the
Ch. 10—Policy Alternatives 401

development of the U.S. space program has led

to the formulation of distinct “space policies” that

set these industries apart from other U.S. industries. This section identifies the principal elements

of U.S. policies for competition in space-related

endeavors and then assembles them into four

more or less coherent approaches to international

competition.

Principal Elements of Competition

Policy in Space-Related Activities

As discussed in chapter 4 and in the individual technology chapters, U.S. policy toward international competition involves policies directed

toward international trade, noncommercial programs, and R&D.

International Trade Polic y

in Space-Related Industries

U.S. post-war international trade policy has

generally been to work for fair and open trade.

To further this goal, the United States has been

a leading proponent of international trading rules

embodied in multilateral or bilateral agreements.

Although most international agreements regulating market access, subsidies, and government

procurement apply only to a limited extent to

trade in space-related equipment and even less

to services, the fair trade principles involved are

reasonably clear and relevant. One day they may

be applied more thoroughly to trade in spacerelated goods and services.

If free trade principles come to dominate spacerelated trade, the pricing of Ariane and Shuttle,

as well as market access to telecommunications

equipment procurement, is likely to be affected.

Even at present, while the general trade principles

have only a small direct effect on these and similar issues, they are the measuring device by which

unfair practices are identified. When agreements

or understandings are reached among governments in the space arena, they tend to draw on

these principles.

According to fair trade principles, market forces

should determine market events in most cases.

Governments should not “load the dice” against

particular sellers but rather should construct “level playing fields” for all market participants. The

specific principles basically deal with various

kinds of subsidy and favoritism. “Most favored

nation” treatment (no discrimination among foreigners) and “national” treatment (no discrimination between foreigners and residents once in the

local market) mean that sellers from all countries

should be able to compete for nongovernment,

domestic sales on equal terms, once the relevant

tariffs have been paid and other entry terms complied with. Export subsidies, below-market credit

terms, or subsidized costs are now generally regarded as unfair. Further, favoritism in government procurement toward national firms is considered, in principle, to be an illegitimate practice

in an open trading regime. As earlier chapters

have shown, these concepts are unevenly applicable or applied, even when they have been incorporated into agreements, especially to hightechnology sectors such as space. Nevertheless,

they are widely recognized to incorporate the

basic concepts of fairness in international trade.

Open trade is not always the objective of

governments. In exporting big-ticket items in advanced-technology sectors, such as space transportation contracts or telecommunication satellites, making the sale may be considered more

important than defending the open trading regime. When this is the case, as it often is, governments resort to subsidies, encourage discriminatory treatment at home and in third countries,

and compete vigorously through political horsetrading.

A complicating factor is that trade policy is not

the only or even the principal reason why governments intervene or act in advanced technology sectors. They underwrite or carry out R&D

of both commercial and noncommercial relevance when they believe that reliance on market forces does not make good public policy. For

instance, it has been plausibly argued that private firms tend to underinvest in R&D because,

among other reasons, they may be unable to profit sufficiently from their investment when their

competitors can easily copy the technology once

developed. It has also been argued that firms are

unwilling to take large risks with long time horizons (see ch. 4). To correct for these deficien-
402 International Cooperation and Competition in Civilian Space Activities

cies in the private economy, governments may

have good reason to engage in product-oriented

R&D, even when it is of direct benefit only to particular industries.

Certain governments, and certain opinion sectors in all countries, espouse industrial policies

designed to stimulate particular industries–in this

case, space-related industries—for the conscious

purpose of making them more competitive internationally. They argue that government interventions, such as targeted R&D programs, subsidies,

import protection, antitrust relaxation, and discriminatory government procurement stimulate

“sunrise” high-technology sectors striving to become industries, by shielding them from international competition until they become competitive.

Even if the focus of industrial policies is primarily domestic, they affect international trade as

well. Subsidies in the name of domestic industrial policy are subsidies nonetheless. When they

are implemented in pursuit of legitimate domestic economic objectives, however, it becomes

more difficult to identify them as unfair trading

practices. They are therefore less likely to be contained by general agreements or be the subject

of bilateral ones. Nevertheless, the more commercially developed the technology, and the

greater the impact of government support on international sales, the more likely it is that this support will come to be identified as an unfair trade

practice that can be placed on the table when

trade negotiations occur, or one that should be

matched in kind in the interest of fair international

competition.

R&D support is undoubtedly one of the most

difficult policies to subject to an international

trade regime. Little agreement exists on whether

it is a threat to the open trading system, even

when it is designed to improve the international

competitiveness of national industries. We have

noted international trade effects of subsidized

R&D in each of the four technologies discussed

in this report. In satellite communications, international trade considerations are among the principal arguments in favor of the Advanced Communications Technology Satellite (ACTS) research

program (ch. 6).

Noncommercial Competition

for Leadership

U.S. policy toward international competition

in space also involves significant noncommercial

competitive aspects summarized as “leadership”

(or preeminence ” when this leadership is striking). The United States has derived substantial foreign-policy benefits from its space activities. Beyond the foreign policy benefits that the United

States has obtained from noncommercial leadership, the public has derived the direct intangible benefit of national pride and the scientific

benefits of space research. Any strategy toward

international competition must deal with the noncommercial dimension of competition as well as

the commercial one.

As the history of INTELSAT indicates (chs. 3 and

6), there is a clear relationship between cooperation and leadership. The United States is a valuable partner for future cooperation because it

has achieved high technological status and capability.

Research and Development

U.S. policy toward space R&D draws on several different motivations. At the simplest level,

aside from motives of international competition,

the Government spends funds on basic and applied space research because of the direct satisfaction citizens derive from accomplishing major engineering feats in space or gaining knowledge

of the universe. As space research is directed

toward application, the competitive motivations

become more prominent.

The Government is also motivated to stimulate

space research by the fact that, without a Government program, certain speculative research

in potentially commercializable technologies

might not be done by private firms. If firms cannot effectively gain ownership over the research

results, they are understandably reluctant to finance research.

The problem of ownership arises when research

results financed by a private firm flow into the

public domain and are used free by competitors.
Ch. 10—Policy Alternatives ● 403

For example, research personnel move freely

among U.S. firms and bring the fruits of their research with them. They may also set up their own

firms in competition with their previous employers. The firm in question is then at a financial disadvantage. If no firm (or industry joint venture)

is willing to do particular kinds of research for

the whole industry, it may be appropriate for the

Government to do it for the good of society. As

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 society well in excess of the Government investment. An individual firm might not be able to capture similar returns, even if it could protect its

research, because the expected profit from an innovation may be small compared to the investment. The Government may be able to justify the

program because of the spinoffs.

Another rationale for Government support of

space research is the trade-related industrial policy motivation referred to above. According to

this line of reasoning, if the U.S. Government fails

to take an active role in some research areas, foreign research programs will give foreign producers of space-related goods and services an unfair advantage. Countervailing U.S. Government

R&D subsidies are one answer to such research

abroad, but foreign governments, in turn, often

justify their research programs as a means of

countering ongoing U.S. civilian and military

space research. In their eyes, research funding

of military space programs constitutes an implicit

subsidy of some U.S. civilian projects. ’ 3

One key motivation for the Government to carry out and finance space R&D is to support various Government activities. For example, much

of the motivation for the Shuttle or for land

remote sensing research was to meet Government needs, both military and civilian, for space

transportation and remotely sensed data.

Although the different motivations for doing

R&D are conceptually separate, most of them,

13see however, civi/ian space Policy and Applications, oP. cit. I

ch. 5, The process of transfer of innovative ideas from the military

context to civilian products is often fraught with delay and other

difficulties. There is no one-to-one correspondence between military funding for research and technological benefits to the civilian

population.

in fact, come into play at some stage in most

space research programs and shape the direction

of the program in direct or subtle ways. It is therefore often not possible to determine precisely

which motivation led to a particular project. The

inability to classify projects neatly is also reinforced by the fact that ongoing projects often attempt to gain support from more than one constituency as they progress.

Approaches to

International Competition

Previous chapters have identified additional

specific measures that may be appropriate for a

given technology. With these measures and the

previous discussion of this chapter as background, this section discusses four broad alternative approaches:

● Stimulate substantial exploitation of space.

● Continue to seek U.S. preeminence in space.

. Let market forces predominate where possible.

● Keep Government financial outlay low.

Stimulate Substantial Exploitation of Space

This approach employs the three principal elements of policy discussed above for the overall

purpose of stimulating the development of space

for its own sake. Those who favor substantial development view exploration and scientific, R&D,

and commercial uses of space all as valid reasons

to move to the last “frontier.” But more than that,

they tend to see space development as a national

imperative that should be supported by as broad

a coalition as possible. To realize this goal, they

favor an eclectic policy approach: do whatever

“works” best (as long as it happens in space)—

and be ready to change when necessary. As they

see it, the more actors on the space stage, and

the more influential and permanent they are, the

better. Under such conditions, international competition among countries is seen as the stimulus

to achieve a greater presence in space,

In this approach, commercial space endeavors

are welcome, its proponents would usually support the trade policy preferences of such firms
404 ● International Cooperation and Competition in Civilian Space Activities

with respect to organizing competition in spacerelated industries. They view serious conflict

within the “space community” over Government

policies as undesirable, and seek industry consensus, particularly among U.S. actors. In their

view, conflict even in international commercial

competition should ideally be kept at a low level,

and each international competitor should have

a role. In other words, public squabbles among

commercial competitors should not be allowed

to undercut public confidence in the overall

space effort.

To stimulate the exploitation of space the Government, in addition to conducting its own R&D,

could support space industries by means of loans,

subsidized loans, or loan guarantees to companies attempting to produce and market new products. One proposal suggests that Government

loans be provided for high-risk projects from

which private capital shies away.14A These loans

would be paid back if the enterprise succeeded

and forgiven if it failed. Such a policy might even

extend Government-subsidized or Governmentguaranteed loans to foreign purchasers of U.S.

space products and services. The Government

might also offer short-term trade protection on

the grounds that infant industries need to mature

in the domestic market before they can compete

successfully in international markets.

Competition for leadership with other countries

in both commercial and noncommercial programs is viewed by those whose aim is to stimulate space development as a benign activity in

the service of all mankind. As a dramatic element,

competition for leadership can increase support

for the space program in the public and boost

morale in the participants. Cooperation on large

projects is especially welcome because it could

release significant amounts of resources for use

on still other important activities.

Because exploration, space science, and R&D

directly stimulate the use of space, Government

R&D programs would usually be preferred over

the subsidizing of space-related exports as a

Idsee the Space Industrialization Act of 1979 (H. R. 2337), hearings before the Subcommittee on Space Science and Applications

of the House Committee on Science and Technology, 96th Cong.,

1st sess., 1979.

means of promoting private sector competitiveness, and thus involvements. In addition, transferring costly Government-supported development projects to commercial sponsorship would

be doubly welcome. In the first place, Government funds would be freed up to address concerns that the private sector cannot be expected

to meet. Second, and perhaps more important,

the private sector would thereby become more

involved, thus making the structure of the space

sector more closely resemble that of other, already successful economic sectors. Unless it

undermined unity in the coalition of space interest groups, those supporting the space-development approach would be likely to favor some

form of subsidized space transportation as a general way for the government to support space development.

The major problem with this approach is that

the links of space policy to other areas of public

policy are tenuous; “more is better” is not a fully

adequate prescription for public policy.

Continue to Seek U.S. Preeminence in Space

Although multiple motivations are involved

here, as in the previous approach, seeking preeminence emphasizes the political and commercial benefits that proponents believe will flow

both from a successful U.S. national civilian space

program and from growing U.S. commercial space

activities. In defining this approach, one must first

define preeminence–is it dominance across the

board in space activities? or could “leadership”

in most important activities satisfy the criterion?

When the space programs of other nations (except for the Soviet Union) were small or nonexistent, the United States was the preeminent

space power, however defined. Now, however,

with the emergence of large national space programs abroad, each of which seeks to make its

own mark, what U.S. “preeminence” is to mean,

for actual policy determination, needs to be clearIy defined, in order to formulate and evaluate an

achievable approach. For the purposes of this discussion, “preeminence” will mean the achiev -

able goal of leadership in most important civilian space activities.

Although competition in military space activities has recently assumed greater importance, ci-
Ch. 10—Policy Alternatives ● 405

viiian space competition with the Soviet Union

continues to be important. Preeminence over the

Soviet civilian space program, in this approach,

is an important political goal and can be achieved

through a continuing large commitment of resources.

Preeminence in noncommercial competition

with the national space programs of non-Communist countries is also a goal. One major objective

of this competition is to ensure that the United

States will lead in commercially important space

technologies and therefore also in experimental

technologies that are expected to lead to commercial products. But the goal is broader than

this. Proponents of this approach believe that the

United States should use its resources to retain

leadership in most space activities, commercial

or not. The use of Government agencies to produce subsidized commercial services (e.g., NASA

as the principal world provider of space transportation services) is consistent with such a stance

because a U.S. subsidy makes it more costly for

other countries to offer effective competition.

If the entry of U.S. firms in an industry that had

been dominated by Government led to phasing

out subsidized production (e.g., in ELVS), foreign

governmental or commercial competition that

had been deterred by the subsidy might then

emerge and threaten U.S. preeminence. For instance, proponents of this approach argue that

full cost pricing of the Shuttle, which accounted

for all the risks and operating costs that a private

firm would have to factor in, could enable Arianespace to capture an even larger share of the market than they now have and thereby damage U.S.

preeminence. They therefore tend to oppose full

cost pricing for the Shuttle, even if it largely prevents the U.S. private space transportation industry from developing.

In general, proponents of U.S. preeminence in

space are less concerned with the commercial

viability of a project than some others; they are

prepared to recommend subsidies to cover revenue shortfalls, and see commercial ventures as

vehicles to express U.S. leadership.

In terms of trade policy, these considerations

tend toward a mercantilist position. Those who

favor the approach of preeminence tend to favor clear U.S. dominance in the commercial uses

of space. They would want to assure this by, first,

reserving the large U.S. market for domestic

space producers by the usual means this is accomplished—price/quality dominance where possible, as in communication satellite production,

and subsidy and Government procurement restrictions where it is not, as in remote sensing and

materials processing. They might also want to restrict access by other nations to the Shuttle.

Second, in export markets, these proponents

would urge open trade, in which space industries are brought under the general coverage of

relevant international trading rules when U.S.

producers have price/quality dominance, but

work for government-to-govern ment market sharing agreements and/or export credit and other

forms of subsidy when they do not. R&D subsidies targeted to achieve a goal of enhancing the

competitiveness of U.S. producers of space goods

and services would have a major role in this approach, both because of the sunrise-industry

characteristics of many space technologies and

because it allows an easy coalition with those

favoring substantial space development for its

own sake.

Like the space-development approach, this is

an approach in which “more is better, ” and the

links to broader political and economic policies

are not always explicitly considered. When Congress favors financing a large and growing program, strategies built around substantial development and preeminence fit together well. When

resources are scarce, however, the implicit conflict between groups espousing the two positions

leads to much more stressful bargaining. Neither

group can then achieve all its important objectives.

For instance, the influence of the space-development strategists may result in advanced technology that gains little significance in the actual

market. Conversely, politically attractive projects

to construct manned demonstration systems favored by those seeking preeminence may crowd

out the more developmentally significant ones

favored by the space-development point of view.

The crowding out of other NASA programs by

the Apollo program in the 1960s and the Shuttle

program in the 1970s are examples of this latter

conflict.
406 . International Cooperation and Competition in Civilian Space Activities

Let Market Forces Predominate

Where Possible

Letting market forces predominate is a well-defined approach for potentially commercializable

activities, including their R&D phase. It can be

combined with the noncommercial elements of

other approaches to form rather diverse overall

strategies. The hallmark of this approach is the

idea that, as a rule, Government should not invest heavily in activities that the private sector is

in a position to pursue. This stance is supported

by the belief that markets for products and services in the U.S. economy can usually be relied

on to signal which activities are socially useful,

According to this reasoning, if the private sector

is not willing to fund a development project as

conceived by NASA, the project probably should

not be carried out, at least in that form. Outside

of R&D, Government’s role is envisaged as simply

to do its best to assure a fair, workably competitive marketplace, domestically and internationally, for those firms that wish to compete in selling space-related goods and services.

Consumers of space products and services, in

the rationale of this approach, would be expected

to pay prices that recover the full cost of providing them. With certain exceptions, such as meteorological data products, products and services

that private firms would not provide at the unsubsidized prices are judged to be less valued by

society than those that private markets do produce. They have not passed the market test. Contrary judgments about social value, which would

allow government to overrule the dictates of the

market, would have to show that, in the instance

involved, the market was not reflecting the preferences of potential buyers, that there was some

other market failure involved, or that government

involvement would produce a clear-cut political

benefit that was worth the outlay.

As discussed earlier in this section, Government

R&D activities have a clear rationale when private firms cannot expect to establish full property rights in the fruits of research. When this is

the case, private firms are likely to underinvest.

The more basic the research, the riskier it is, or

the larger the time until commercial payoff, the

less adequate the performance of private firms,

Government outlays intended to promote technological progress may include: funds to improve

scientific and engineering education, direct conduct of basic and applied research with potential industrial applications, sponsorship of such

research in universities or industries, transfer of

research findings from Government programs

(e.g., military) to the private sector, joint Government-industry research ventures, or special tax

treatment for private research.

Consistent with this approach, then, is the idea

that as prospective R&D results come to look

more commercializable, Government-supported

research can move from Government-performed

research (e.g., NASA research laboratories) to

Government-funded research (e.g., ACTS program) to Government-subsidized research (e.g.,

NASA’s Joint Endeavor Agreements) to no significant Government involvement at all. Thus, this

approach is consistent with a large government

R&D role in the early stages of technological development that diminishes as markets develop.

One benefit of an approach that depends on

market signals is that it sets space policy in the

context of overall economic policy. Attention to

space technology becomes just one component

of the U.S. approach to high-technology R&D.

As high-technology industries, space-related industries would expect to benefit from a general

policy of fostering R&D. But under a policy of

broad support, they would not be singled out for

more favorable treatment than that received by

other high-technology industries. They would still

be expected to sink or swim in the marketplace.

Large demonstration projects, in particular, are

less likely to be undertaken under this approach.

Its proponents do not regard failure to invest

heavily in a particular Government development

prototype as evidence of the unwillingness of the

private sector to invest in the technology per se.

They argue that scientists and Government officials might incorrectly substitute their ideas of potential demand for those of entrepreneurs, financial analysts, and insurance executives, thereby

distorting technological processes.

Previous chapters have also made the point,

in the case of certain public goods like meteorological remote sensing, that private markets
Ch. 10—Po/icy Alternatives 407

would be unlikely to produce the socially desirable kinds and amounts of weather data. Therefore, Government production or subsidy is justified as an exception.

An approach where market forces are allowed

to predominate requires clear signals from the

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

r-night hold off in the hope of receiving a subsidy.

In part, their reluctance to start might also reflect

their fear that competitors would subsequently

receive a subsidy or that the Government itself

might undertake the project in competition with

them. The cost of waiting in these circumstances

would generally be low. Because no firm would

make a move until the Government acted, waiting wouId not disadvantage them.

Many proponents of an approach depending

on market forces would undoubtedly prefer

open, fair international trade in space goods and

services, but others, despairing in obtaining it,

might favor countervailing subsidies or restrictions

on U.S. market access to match foreign restrictions. This approach can only lead to a partial

strategy for achieving national goals. It does not

apply, for instance, to noncommercial competition.

As long as make, buy, or contract decisions for

Government use, including those designed to increase U.S. prestige, are made with prudent contracting controls this approach has little inherent

conflict with an approach of preeminence in

space. in practice, however, the two approaches

are typically in conflict. Those who favor a market strategy tend to want to leave the development of most commercializable space systems,

particularly their form, to the market, whereas

those favoring an approach of preeminence

would typically be loathe to entrust the fate of

valued projects to the uncertain decisions and

timing of private companies.

In contrast, the approach of depending on market forces would seem to be compatible with one

favoring substantial space development, as long

as dependence on markets produces a vigorous

private sector. In practice, however, proponents

of substantial space development tend to be impatient with letting market forces lead the way.

Their concept of commercialization tends to be

one in which Government takes the lead in developing prototypes. They are usually in natural

alliance with those favoring an approach of preeminence.

Keep Government Financial Outlay Low

The low-outlay approach is the final competitive approach. It is competitive in the sense that

as total outlay on civilian space-related Government activity is reduced, certain aspects of the

other options become infeasible. Sharply limiting

the available funds more or less defines a set of

possible policy options. in particular, an effective policy to match the R&D, production or export-credit subsidies of other countries would become impossible without substantial funding, as

would subsidized Government production of

space-related goods and services for U.S. consumption, such as Shuttle transportation. Consequently, a low-outlay approach tends toward

one that depends on market forces.

Proponents of this approach would argue that

most needed research would be funded by the private sector. If the market would not support the research, it was probably not needed and therefore

should not be done. Only a limited amount of R&D

would be funded, and, in particular, few large,

expensive projects would be undertaken by the

Government. The allocation among various types

of projects—those that would develop space,

those that would bring political benefits, and

those that would bring industrial policy benefits–would depend on the alliances their proponents could make. One possible alliance might

be among the proponents of space development,

market forces, and low-outlay. In this case, NASA

would tend to concentrate on more basic R&D

and avoid building prototypes and use less expensive methods of technology transfer. One potential drawback of this approach is that it might

put U.S. industry directly in competition with government-supported foreign industry.

Even though the low-outlay approach is incompatible with expensive “sunrise” industry indus38-797 0 - 85 - 14 : QL 3
408 ● International Cooperation and Competition in Civilian Space Activities

trial policy, it is not necessarily incompatible with

the low-cost protectionist elements of this policy. Several retaliatory weapons to punish unfair

trading practices by other space-capable countries exist that are not costly in budget terms:

tariffs, quotas, boycotts, standards harassment,

and government procurement restrictions. These

could effectively restrict foreign access to the U.S.

market, although they would usually increase

prices for U.S. users. They might be utilized, in

retaliation for foreign subsidies in both U.S. and

third-country markets, under Section 301 of the

Trade Act of 1974 or other existing trade laws,

trade in space-related goods and services. They

could be used as bargaining chips in bilateral and

multilateral negotiations to create a more liberal

international regime.

In the low outlay approach, cooperating with

other countries in space applications (e.g., remote

sensing), space science, and exploration of outer

space assumes even greater importance than in

the other competitive approaches. A highly active program of cooperation would be necessary

to maintain a level of technological leadership

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 activities may serve a variety of goals:

1.

2.

3.

4.

5.

6.

7.

8.

9.

sharing the costs of expensive projects;

increasing exchange of scientific knowledge

and U.S. access to foreign technology;

promoting international understanding;

coordinating potentially conflicting international activities (e.g., the use of the electromagnetic spectrum for telecommunications);

providing services on a multinational basis

(e.g., through INTELSAT or INMARSAT);

regulating international trade in space-related goods and services;

providing assistance to developing countries;

improving political relations; and, indirectly,

promoting U.S. exports.

At different points in the history of its space program, the United States, acting through NASA,

the National Oceanic and Atmospheric Administration (NOAA), the Department of State, National Telecommunications and Information Administration (NTIA), Federal Communications

Commission (FCC), and U.S. Agency for international Development (AID), has pursued some or

all of these goals. Yet, as noted in the introduction to this chapter and in chapter 3, increased

international competition and changes in the outlook of the developing countries have altered the

international environment for cooperation. In

light of these changes, and the fact that the private sector has demonstrated increased interest

in commercial space activities, a reassessment of

U.S. policies for space cooperation is in order.

The key question in such a reassessment must

be, under what circumstances and in which technologies does cooperation serve the long-term

political and economic interests of the United

States?

This section identifies a range of cooperative

approaches that the United States has taken in

the past, and discusses their use in today’s climate. The options presented here are not mutually exclusive; indeed, an effective overall policy would include aspects of each. Some potential

cooperative approaches would be inconsistent with

certain of the competitive approaches described

in the previous section. The opportunities for

cooperation also vary considerably across the

range of technologies studied in this report. The

suitability of various approaches for cooperation

varies accordingly.
Ch. 10—Policy Alternatives ● 409

Emphasize Cooperation That Contributes

to the Technological Goals of

the United States

Given the enormous cost of space research and

exploration, and the recent space accomplishments of other countries, the United States cannot hope to remain a leader in every aspect of

this technology, unless it actively seeks cooperative ventures. International cooperation is one

means by which the United States can participate

in numerous expensive projects. NASA’s largest

cooperative project, Spacelab, cost the European

Space Agency (ESA) in excess of $1 billion and

is perhaps the best example, to date, of the monetary value of international cooperation, For budgetary reasons, the alternative to an ESA Spacelab

was not a less capable U.S. spacelab, but rather

no Spacelab at all. Additionally, Canadian expenditures (over $100 million) for the Shuttle’s

highly successful remote manipulator arm freed

the United States from this Shuttle expense. Not

counting Spacelab, NASA has estimated that

other countries have contributed over $2 billion

to U.S. objectives in space over the last 25 years

through cooperative programs.15

Joint technology development programs raise

a unique set of difficulties. A cooperative policy

that stressed common technological goals would

focus almost entirely on projects with nations

having reasonably advanced space programs.

Such cooperative projects with developed countries, however, increase the likelihood of inadvertently transferring commercially useful technology to them and increase the possibility that

foreign firms will be able to compete more effectively with U.S. firms in commercial space

markets. In addition, when dealing with new

technologies it is often desirable to reduce the

administrative complexity of research; cooperative projects tend to increase the difficulty of technology development. For these reasons NASA has

traditionally avoided joint production arrangements with other countries for essential hardware.

As discussed elsewhere in this report, however,

1 w .s. congress, office of Technology Assessment, U.S. Government Printing Office, UN/SPACE ’82: A Context for Cooperation

and Competition, OTA-TM-ISC-26 (Washington, DC: March 1983),

app. B,

the industrialized countries are increasingly capable in space technology and are concerned

about transferring the fruits of their research to

the United States.

In the near future, the largest single area in

which the United States will cooperate with the

industrialized countries is in building and using

permanently inhabited space infrastructure, including a so-called space station. The United

States has already signed cooperative agreements

with Canada, ESA, and Japan for the design phase

of NASA’s space station program. As planning for

the development and operation of the space station(s) proceeds, the various modes of cooperation should be carefully studied. Possible cooperative options are detailed in the OTA report,

Civilian Space Stations and the U.S. Future in

Space.lb

Emphasizing joint technology development

programs makes it difficult to define a meaningful

role for many developing countries. Yet including

them in cooperative activities could give them

an opportunity to engage in the pursuit of space

technology and thereby ease current difficulties

in the United Nations and make international

consensus on issues such as frequency and spectrum allocation easier to obtain.

It is important to assess whether an international cooperative venture is truly in the long-term

interest of the United States. Short-term budgetary or political pressures should not be allowed

to affect adversely the long-term viability of important national programs. Yet, any policy on cooperation should be designed to allow access to

foreign technology and expertise where they

would materially benefit U.S. programs. In the

near future the major space powers will have to

make critical decisions concerning the level of

international cooperation they wish to pursue.

The United States may wish to limit cooperation

to the investigation of basic scientific phenomena

or the development of discrete components (e.g.,

the shuttle remote manipulator) so as not to conflict with the potential commercial activities of

the U.S. private sector. To add to the subtlety of

IbSee for example, Civilian Space Stations and the U.S. Future

in Space, op. cit., app. C.
410 . International Cooperation and Competition in Civilian Space Activities

the decision process, it should be noted that U.S.

corporations sometimes find that international

joint ventures (e.g., AT&T and Olivetti) enhance

their overall international competitive ability.

Emphasize Political Benefits

of Space Technology

How can the United States reap the maximum

advantage from current and future cooperative

activities? The possession of highly visible, technologically advanced industrial capacities, such

as the ability to produce and use space technology, carry with them certain foreign policy benefits. The precise nature of these benefits, although difficult to define, is usually measured in

terms of increased “prestige and influence.” Cooperating with the United States on space projects (or, for that matter, on any high-technology

project) can create the perception that, by working with the United States, nations are “on the

winning team, ” and can create an incentive for

such nations to compromise with the United

States on both space and nonspace issues if they

believe that such cooperation earns them the advantage of long-term access to advanced technology or other bilateral support.

Using space technology for peaceful purposes

to accomplish diplomatic goals is a complex task

that is pat-t of a larger diplomatic picture. international space policy in the United States has

evolved slowly over the years, changing in response to technological developments and the

global political environment. For example, the

Apollo-Soyuz Test Project, a U.S.-Soviet cooperative project, was a reflection of the era of

detente.17 The Carter Administration’s emphasis

on the use of science and technology as tools for

development led to increased assistance in space

technology to developing countries.

If the use of international cooperative efforts

in space to accomplish diplomatic ends is desirable, then it is appropriate to consider what Government organization is appropriate. The present

arrangement divides the policy responsibility for

I TSee /sSues in U.S./U.S.S.R. Cooperation in Space (Office of Technology Assessment, technical memorandum, in press) for a discussion of the Apollo-Soyuz cooperation and the political and technical issues surrounding cooperation with the Soviet Union.

international space activities among the Department of State (foreign affairs and international

organizations); the Department of Commerce

(operational remote sensing [NOAA], international satellite communications INTIA], and trade-related activities); NASA (space R&D, science, and

transportation); the FCC (regulation of U.S. international satellite communications); and the

National Security Council (national defense).

Considerable confusion now exists over who has

jurisdiction in any given issue involving more than

one of these elements, as do most international

space activities. As a result, the task of using

science and technology for diplomacy has often

been considered of secondary importance.

Most of the day-to-day work of putting international space policy into practice has fallen to

NASA and NOAA. The FCC and the Department

of State have overseen commercial satellite communications. NASA’s role as an R&D organization compels it to seek partners with which it can

accomplish technological goals, and is, therefore,

less inclined to focus on the broad foreign policy implications of decisions. NOAA’s interest in

maximizing the collection and distribution of critical atmospheric and land remote sensing data

has led it to seek broad operationa/ agreements

with its counterparts in other countries. It therefore focuses on operational goals rather than on

diplomatic issues. The FCC and the Department

of State have jointly formulated U.S. positions in

bilateral and multilateral negotiations related to

satellite communications.

The State Department, as the foreign policy

organ of the Government, pursues relationships

that accomplish diplomatic tasks and is responsible for overseeing U.S. treaty obligations (see ch.

3). Lacking NASA’s, NOAA’s, and the FCC’s expertise in space technology, it has traditionally

deferred to their judgment on most international

space activities. Although the Department of State

consults regularly with NASA and NOAA on the

one hand, and the FCC on the other, the success

of this coordination depends heavily on the personalities of the individuals involved.

Using civilian space activities more aggressively

to pursue broad U.S. foreign policy interests, including the reduction of international tensions,
Ch. 10—Po/icy Alternatives 4 1 1

would require the Department of State to increase substantially its technical expertise and the

continuity—both policy and human—of its responsibilities in space. 18 This would require, at

a minimum, adding staff with substantial experience in space technology.

Participation in International

Organizations

As the analysis of chapter 3 indicates, in the

face of a changing international environment i n

which the influence of the United State~ IS shrinking, the United States seems to have three broad

options to consider in its participation in the international organizations dealing with space such

as the International Telecommunication Union

(ITU), the Committee on the Peaceful Uses of

Outer Space (COPUOS), and, more generally, the

United Nations General Assembly:

1.

2.

3.

Adopt a more flexible approach, emphasizing diplomacy and a willingness to compromise in areas where critical U.S. interests are

not at issue. Attempt to build broadly based

coalitions within the organizations. Establish

immediately a permanent technical presence at the U.S. Mission to the U.N.

Take an increasingly confrontational posture,

using the threat of withdrawal in an attempt

to prevent decisions contrary to U.S. interests. Emphasize building coalitions of likeminded nations, or establishing alternative

organizations. Where possible, tie decisions

on space issues to other U.S. policies on financial and technical assistance thereby acquiring leverage in negotiations.

Drastically reduce or end U.S. participation

in international organizations if they stray too

far from U.S.-supported policies, and establish U.S.-led, permanent ad hoc multinational or bilateral arrangements where necessary.

leThe State Department has recently made 50me moves to

strengthen its expertise in space and other technology fields, and

to place greater importance on science and technology in diplomacy. See John Walsh, “Shultz Signals Backing for Science

Attach&, ” Science, vol. 226, 1984, pp. 518-51 9; Also, Otho Eskin,

hearings before the House Subcommittee on Space Science and

Applications of the Committee on Science and Technology, )uly

25, 1984.

The United States has tended toward following option 2 in recent years on the premise that

other countries have politicized these international bodies. However, tying decisions on space issues to other policies carries with it the very risk

of politicizing these organizations that the United

States seeks to avoid. In developing policies toward international organizations dealing with

space issues, it is also important to understand

that each of these organizations have markedly

different operational agendas and should be

treated separately.

Option 3 may not be advisable in those instances where for technical reasons, cooperation

is a virtual necessity. For example, current U.S.

participation in ITU helps to guarantee interference-free access to the radio spectrum for satellite communications. The assignment of a particular frequency is of little value if others feel free

to use it for purposes that cause critical interference. There are no sanctions to force compliance

with ITU decisions. Consequently, the United

States, as well as other ITU members, rely on the

voluntary agreement and cooperation of other

nations to refrain from interfering with its assigned use of the spectrum.

Provide Assistance to

Developing Countries

The United States could take the position that

its competitive interests limit the number of desirable cooperative opportunities with the other

space-capable nations. Cooperative activities with

the developing countries, on the other hand,

might be pursued with renewed vigor in order

to spread U.S. influence abroad. As a first principle, the United States has always recognized

its responsibility to contribute to the welfare and

development of the Third World. However, such

programs may also provide indirect economic,

political, and strategic benefits to the United

States. Strengthening the scientific and technical

capabilities of the developing world may promote

the growth and expansion of important markets,

provide new outlets for U.S. goods and services,

and orient the indigenous scientific and engineering community toward the United States.
412 ● International Cooperation and Competition in Civilian Space Activities

The United States has considerable experience

in providing technological assistance. Its meteorological satellites have been used for global

weather coverage since the early 1960s, and the

Landsat Earth remote sensing system has been in

operation since 1972 under a policy whereby the

United States has sold imagery to any country for

little more than the price of reproduction. NASA

and AID have cooperated in giving developing

counties valuable training in the use of Landsat

data. In another example, NASA and AID used

the ATS [advanced technology satellite] series of

experimental direct broadcasting satellites in the

mid-1970s to carry out several important studies

in India, South America, and the Pacific, which

demonstrated the usefulness of satellite communications to deliver programs to rural areas. *

The principal cooperative space activities with

the developing world are in remote sensing and

telecommunications. * * These could be coordinated with other assistance programs and be

made more responsive to the abilities and expressed needs of recipient nations. Such programs would likely include a large educational

component, and would present only minimal

technology transfer problems. It would be

unlikely to interfere with other AID, NASA, and

NOAA goals and programs.

Although the United States has the technical

and institutional means to carry out an expanded

program of assistance using space technology, serious questions remain concerning the desirability

of such a course of action. The current official

attitude of the United States (primarily within the

Administration) toward many Third World countries is one of profound mistrust. In the view of

many, Third World demands for access to technology and space resources, and its support for

larger political agendas, such as the New World

Information order or the New International Economic Order, threaten such important American

*The countries that participated in these projects contributed to

them as well.

**The U.S. Government can provide certain technology to developing countries, but it does not own or control all space-related

technology these countries might wish to acquire. Much of it is privately owned and would need to be licensed from private owners

by individual countries.

ideals as free speech and free enterprise. Such

Third World demands have diminished the desire of some U.S. policy makers to support multinational technology transfer programs.

The United States has several methods available for pursuing cooperative programs. The first,

already used extensively, is an emphasis on bilateral, as opposed to multilateral, assistance programs. This allows projects more closely related

to individual country needs and assures some degree of accountability for both participants. Another method, introduced at the ITU Plenipotentiary Conference in Nairobi in 1982, is the use

of private U.S. firms to pursue development goals.

The U.S. Telecommunications Training Institute

was established to promote the planning and

operation of telecommunication and information

systems in developing countries. Because private

U.S. firms provide the training, equipment, and

funding for the Institute, its operation is unlikely

to be subverted solely for political or ideological

motivations.

Establish International Organizations

to Provide Space Services

Once a technology has been developed and

its value proven, the question then arises of how

best to apply the benefits of this technology. This

has generally led to debate over whether the private sector or the government is best suited to

manage the applications phase of the technology. Particularly important for this discussion is the

role that international cooperation in the form

of intergovernmental consortia can play in this

process.

When INTELSAT was established, its advocates

considered the system to be the most effective

way of quickly bringing the benefits of satellite

communications to much of the world. Now,

with the rise of potential private sector competitors, the cons as well as the pros of an internationally governed monopoly in satellite communications are being discussed (see ch. 6). A similar

analysis might be used in relation to remote sensing. Although land remote sensing is now seen

as an area of international competition, it may

turn out that the raw satellite data is less marketable than communications services, at prices that
Ch. 10—Policy Alternatives ● 413

provide an adequate return on investment, and

will remain more of a public, than a private,

good. If so, then it might be appropriate to attempt to organize an international body to collect and distribute the data free or at low prices

(see ch. 7). Such an organization might pool international resources to maintain a single system

of satellites, which no single nation would invest

in alone, but from which all participants would

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.19

191 ndeecf, such an organization was suggested as one of the Policy options of Civilian Space Policy and Applications, op. cit., ch.

10, pp. 298-300. NOAA is now attempting to organize a variation

There may be instances (e.g., to save system

costs) where the United States would benefit by

actively pursuing the formation of international

consortia. Presumably, such a course would be

followed only in the absence of financial interest by the private sector in a new technology, or

where the foreign policy benefits of such an organization clearly outweighed its negative effects

on the formation of a free market.

of such a cooperative venture in ocean remote sensing among Canada (Radarsat), ESA (ERS-1 ), japan (MOS-1 ), and the United States

(NROSS), in which NOAA would take the lead in gathering, processing, and distributing data sets globally.

THE RELATIONSHIP BETWEEN COOPERATION AND COMPETITION

Few elements of either governmental or private

sector space activities are either purely cooperative or purely competitive. Indeed, the motivations for cooperation or competition are driven

primarily by economic and political factors and

are often closely intertwined. As this report has

emphasized throughout, cooperative projects are

often undertaken, in part, for competitive purposes. For example, part of the U.S. political

motivation in cooperating with developing countries is to demonstrate the willingness of the

United States to share its knowhow with these

countries i n competition with the Soviet Union.

On the other side of the coin, the enhanced ability of Europe and Japan to compete economically

with the United States in offering space goods and

services makes them more attractive cooperative

partners for major projects such as an international polar-orbiting remote sensing platform or

a permanently inhabited space station.

In developing policies for the U.S. space program it is important to recognize not only the

roles played by cooperation and competition, but

also how each may enhance the effectiveness of

the other. The four approaches to international

competition discussed in the section on competition—stimulate the substantial exploitation of

space, continue to seek U.S. preeminence in

space, let market forces dominate, and keep Government financial outlay low—would be improved by one or more of the cooperative elements explored in the section on cooperation.

For example, although the French will soon be

offering remotely sensed data from their SPOT

system, in competition with data from the U.S.

Landsat system, it is nevertheless in the best interests of both countries to cooperate on setting

data standards, format, and other aspects of the

two systems. In doing so, both countries may gain

in political prestige and even in access to markets.

However, cooperation and competition do not

necessarily enhance one another. For example,

governmental cooperation with other countries,

particularly technologically advanced ones, may

make competition more difficult for U.S. firms.

As mentioned in several places in this report, cooperation with Europe and Japan raises the specter of outward technology transfer that could

strengthen their ability to offer space goods and

services in direct competition with the United

States. This argues for structuring cooperative

projects in such a way as to reduce the negative

effects of unwanted technology transfer. However, as other countries reach parity with the
414 ● International Cooperation and Competition in Civilian Space Activities

United States in certain technologies, or even surpass it, the United States will have something to

gain from them. This is the case now in some narrow areas (e.g., in building manned space habitats). Therefore, in structuring cooperative agreements, it will also be important for the United

States to consider what technology it might gain

from other countries.

As the United States structures its cooperative

activities in space between now and the end of

the century, and faces greater competition from

other space-capable nations, it will be important

for policy makers to consider the interactions of

cooperation and competition in each international project on which the United States embarks.

In order to compete effectively with other nations

in space science and space applications, it is necessary to cooperate. On the other hand, in order

to cooperate most effectively, it is necessary to be

able to compete as well.

ORGANIZING FOR THE FUTURE

The NAS Act, in addition to establishing the basic guidelines for the Nation’s space activities, authorized the formation of NASA and assigned it

the responsibility for the “aeronautical and space

activities sponsored by the United States. ” As a

result, except for satellite communications, during the past quarter century most civilian programs and policies dealing with space have

tended to focus primarily on NASA. Operating

under a broad mandate to pursue excellence in

space technology, NASA had a major hand in developing the technology for three industries—

satellite communications, remote sensing, and

space transportation; it is currently working on

a fourth-materials processing in space. Yet, despite NASA’s successes, it is unlikely that the

agency can continue to be the primary focus of

civilian space activities as commercial interests

in space become stronger. NASA by itself is ill-

-equipped to deal with such complex issues as international commercial competition, trade polMAINTENANCE OF

The NAS Act specifically calls for the United

States to preserve its role “as a leader in

aeronautical and space science and technology

and in the application thereof. . .“ This has often

been interpreted to imply that the United States

should be preeminent in all space activities, a

point of view appropriate to the early days of the

U.S. civilian space program. However, as the

icy, domestic health, safety, and economic regulation, and tax policy, all of which will have

essential roles in the development of vital U.S.

space industries.

An important aspect of future national policy

for space will be the manner in which the responsibility for various space activities is divided

among the various Federal agencies. This responsibility is essentially of two types, first, the broad

responsibility for the maintenance of U.S. “leadership” in space; this is inherently a shared

responsibility which requires the effective coordination of Government agencies and the private

sector and, second, the responsibility for the use

and successful commercial application of individual space technologies. This latter responsibility can probably be most effectively carried out

when a designated agency has the responsibility

for a specific technology.

U.S. LEADERSHIP

scope of space activities has increased, other

countries have developed expertise in space, and

costs have risen dramatically. It may now be more

appropriate for the United States to attempt to

maintain its leadership in many, rather than all,

areas of space technology, and to choose areas

on which it will focus its efforts. Whichever ones

are chosen, successful coordination among Gov-
Appendixes

Ch. 10—Policy Alternatives ● 417

structing permanent space infrastructure,23 or remote sensing,24 or materials processing,25 as well

as the role of space technology in development

assistance programs.

If successful, such an interdepartmental assessment might result in a 5- or 10-year program of

action, a more formal division of responsibilities,

and a clearer understanding of the long-term

problems likely to be faced individually and collectively by various Government organizations.

Responsibility for Individual

Technologies

The commercial success of specific space technologies will depend to some degree on how the

Government organizes to support, and, where

necessary, to regulate these activities. Although

coordination of Government agencies remains an

important task, the success of specific space industries may depend, at least initially, on the active participation of a lead agency. The role

played by the Civil Aeronautics Board (CAB) and

the continued role of the Federal Aviation Administration (FAA) in commercial aviation, the activities of the FCC in telecommunications, are all examples of Federal agencies assisting in the development of new industries.

Much has been written about the potential negative effects of regulation on industry. However,

the potential danger to the public posed by some

space technologies, and their ability to affect international relations suggest that some form of

Government intervention will be necessary.26

Decisions regarding which agencies should be

responsible for which space technologies should

be a function of the maturity of the technology

and the industry and their relationship to like terrestrial activities. Because these conditions differ with each technology discussed in this report

it is useful to examine them separately.

ZJsee, for example, the discussiorl in Civi/ian Space Stations and

the U.S. Future in Space, op. cit., app. C.

Zdsee C;v;/lan Space Policy and Applications, op. cit., Ch. 10.

Zssee R. Da] bello and s. Finer, “Prospects for International Cooperation in Materials Processing Technologies, ” 33rd International

Astronautical Congress, Paris, September 1982.

ZbThe 1967 Space Treaty makes states responsible for their Own

actions or the actions of their citizens.

Satellite communications is a mature technology; it was incorporated into the overall communications industry almost from the start.

The relationship of satellite communications

to the private sector has been close from the

beginning. In the pre-commercial period,

Bell Laboratories and other telecommunications entities carried out significant R&D on

communication satellites that predated

NASA’s activities, and the technology transfer that took place has been a two-way phenomenon, fruitful to the R&D programs of

both NASA and the private sector. Because

a large market for intercontinental telecommunications services was already a certainty

and because a well-developed regulatory

structure already existed for the industry, a

clear natural division of responsibilities existed among the FCC, NASA, and the Department of State. Only recently have problems

come to be perceived.

The Satellite Communications Act of 1962

(building on the Communications Act of

1934) ratified the natural division of labor

among these agencies: the FCC would regulate communications carriers, interstate and

internationally; the Department of State

would lead or instruct U.S. representation

in international institutions concerned with

satellite communications (e.g., COPUOS,

ITU, and INTELSAT); and NASA would do

satellite communications R&D. NASA

phased out most of this latter activity in the

early 1970s, based on the expectation that

the satellite equipment industry would do its

own R&D (see ch. 6).

Recently, as technological change and deregulation allowed a vigorous domestic industry to develop and look for access to international service markets and as foreign

satellite equipment manufacturers started to

make inroads into U.S. and world markets,

the neat division of labor has become less

adequate. In the early 1980s, new Government actors came to play a larger part in

international telecommunications policy:

NTIA in the Department of Commerce, the

Office of Telecommunications Policy in the

Department of State, the U.S. Trade Representative’s Office, not to mention the Nation-
418 ● International Cooperation and Competition in Civilian Space Activities

●

al Security Council, the Department of Defense, the Council of Economic Advisors, the

Department of Justice, and the Federal Courts.

NASA has also increased its involvement in

communication satellite research for reasons

relating to international trade and the international resource of the geostationary orbit.

With all the executive branch agencies involved, a Senior Interagency Group and the

White House came to play coordinating

roles. Even so, Congress has complained of

executive branch disarray.

The size and maturity of the telecommunications industry both in the United States

and foreign countries, and the increasing interdependence of the world economy, make

it almost certain that the tasks for which the

U.S. Government must organize will continue to be complex and, even more than in

other large mature economic sectors, will

defy easy organizational solutions.

Remote sensing is a mature technology directed toward a yet infant industry. After

operational authority for Landsat was transferred from NASA to NOAA, NASA’s involvement in this technology was sharply reduced.

NASA now primarily conducts limited advanced R&D in high-resolution sensors (see

ch. 7). The Government’s primary concern

now is to encourage the development of an

economically viable private industry. Unlike

satellite communications, the market for remote sensing services is small and the private sector has been reluctant to invest in

this technology without some form of Government assistance.

The Land Remote Sensing Commercialization Act of 1984 (Public Law 98-365) designates the Department of Commerce as the

lead agency for future remote sensing activities. Among other things, this Act instructs

Commerce to encourage private sector participation, establish a licensing system for prospective entrants, ensure compliance with domestic

and international law (with guidance from the

Department of State), establish appropriate regulation, and protect national security interests

(with guidance from DOD). The legislation also

directs NASA and NOAA to continue R&D activities in remote sensing and encourages the

Secretaries of Interior and Agriculture to continue research into the application of remote

sensing data.

Advocates of this legislation argued that designating the Department of Commerce as the

lead agency improved the probability that a

remote sensing industry could develop. By providing a single point of contact within the Government, interested parties know where to

make their application for systems development, and where to express their ideas and

grievances. The goal, as is also demonstrated

in space transportation, is to establish a focal

point for the still diffuse private sector interest

in commercial space activities. The experience

that the Department of Commerce has gained

(through NOAA) makes it the logical agency

to oversee the private development of a remote

sensing industry.27

Space transportation is, in some respects,

both a mature technology and industry. Mature space transportation systems (ELVS) and

a mature market (communication satellites

to geostationary orbit) both exist; the issue

now is how to encourage private sector entry while NASA fulfills other important Government needs. Two competing positions

are maintained; one encourages NASA to

compete for commercial launch services and

the other instructs the Department of Transportation (DOT) to promote the development of a private industry (see ch. 5). As a

result of this policy competition and its own

long-term needs for space transportation

services, NASA remains effectively the only

actor in space transportation services.

An Office of Commercial Space Transportation has been formed within the Department of Transportation.28 The Expendable

Launch Vehicle Commercialization Act established DOT as the lead agency for commercial space transportation. This legislation

is designed to promote and accomplish goals

similar to Public Law 98-365 discussed above

for remote sensing. DOT would license private operators, draft regulation for launch

activities and, after consultation with other

ZTStill t. be worked out is the thorny problem of who is to regulate use of the Shuttle for private sector or foreign remote sensing

systems. See, for example, “SPARX Fly Over U.S.-German Space

Venture, ” Science, vol. 227, pp. 617-619, 1985.

Zapublic Law 98.575 was signed into law Oct. 30, 1984.
Ch. 10—Policy Alternatives ● 419

●

relevant agencies (e.g., NASA, DOD, and the

Department of State), determine whether

such activities are in the public interest, are

safe, and are in the national security and foreign policy interests of the United States.

DOT, in consultation with the Department

of State, is also responsible for determining

whether private launch companies conform

to U.S. treaty obligations.

Materials processing in space (MPS) is a set

of embryonic technologies directed towards

known markets. NASA remains the most significant actor in the development of these

technologies and in the attempt to encourage private sector participation in their creation. Without NASA support it is unlikely

that MPS research would go forward in this

country. No lead agency has been designated to encourage the development of a

materials processing industry nor does one

seem necessary.

Should commercially viable MPS products

be discovered, MPS would probably follow

the commercialization pattern of satellite

communications rather than remote sensing

and space transportation, because MPS

products currently under investigation, such

as pharmaceuticals and crystals for electronic

applications, are—like satellite communications services—directed toward large and

growing commercial markets.

In most instances it will be obvious which

Government agencies should take the lead

on regulating MPS products. For example,

regulation of pharmaceuticals made in space

would be the responsibility of the Food and

Drug Administration (FDA).

CONCLUSION

There is no single set of space policies capable of adequately responding to the challenges

the Nation will face as a result of its scientific and

commercial activities in space. This chapter suggests that the United States should, at a minimum,

develop the institutional means to achieve consensus on future space goals and to revise these

goals when circumstances so dictate. In order to

survive over time, such goals must be, to the

greatest extent possible, independent of shortterm budgetary and political influences.29 The National Space Commission may offer a means by

which to accomplish this objective.

Because goals must alter as milestones are

reached or circumstances change, it may also be

appropriate to adopt “strategies” for approaching

competitive and cooperative goals in space. Correctly articulated, such strategies could provide

continuity and an important middle ground between the basic principles of the NAS Act and

future space goals,

Zgsee Cjvi/jan Space stations and the U.S. Future in Space, OP. cit.
Appendix A

SEARCH AND RESCUE SATELLITES

A newly operational satellite-borne search and rescue system now markedly increases the chances of

being rescued when lost at sea or in remote land areas.

Until recently an experiment’ in space technology development and international cooperation, COSPAS/

SARSAT has been responsible for saving nearly 400

human lives and 10 dogs, since the first rescue took

place in September 1982, The participants in the experiment were the National Oceanic and Atmospheric

Administration (NOAA) and the National Aeronautics

and Space Administration (NASA) for the United

States, the Department of Communications of Canada, the National Center for Space Studies (CNES) of

France, and the Soviet Ministry of Merchant Marine

(MORFLOT). In the Operational phase, NOAA has the

lead for the United States.

The United States, Canada, and France have spent

about $53 million on satellite equipment and ground

stations to operate the Search and Rescue Satellite

(SARSAT) system. Canada and France supply the

SARSAT receiver. The United States supplies the

spacecraft on which it flies and the testing and integration. A Soviet system, COSPAS, is designed to interoperate with SARSAT. The first two satellites to be

equipped with receivers for emergency search were

low-altitude Soviet navigation satellites. Beginning

with NOAA-8, the advanced TIROS-N series of NOAA

polar orbiting meteorological satellites now also carry

search and rescue receivers. z

Receivers on board the satellites detect the emergency radio beacons (operating at 121.5 MHz) from

downed aircraft or ships and boats in distress. The beacon’s signal is re-transmitted to a ground station,

which analyzes the signal to determine the location

of the beacon. The small frequency shift caused by

the relative velocity of the orbiting satellite and the

emergency radio transmitter on Earth (the so-called

Doppler effect), enables system operators to determine (within 12 to 15 miles accuracy) the position of

the emergency radio transmitter. Search and rescue

teams can then be dispatched to the area from which

the distress signal was sent.

The type of beacon used so far for rescues is carried by over 200,000 aircraft and 7,000 vessels in the

‘ Development ot COSPAS/SARSAT was begun I n 1977. I n October 1984

the United States, Canada, France, and the Soviet Union signed an agreement to begl n the operationa I phase of COSPAS/SARSAT I n 1985 and to extend the program through 1990 See “SARSAT/COSPAS to Operate Through

1990,’” Av;dt/on Week and Space Technology, Oct. 15, 1985, pp. 24-25

2Although NOAA-8 has experienced serious operational dlfflcu [ties over

the past year, It IS now operational again and the SAR package IS now working satlsiactorlly.

United States alone.3 The signal from this common

beacon is only usable when the satellite is in the line

of sight of both the beacon and the ground station.

An experimental system on the satellites (operating at

406 MHz) uses a more sophisticated emergency beacon that carries a code identifying the type of aircraft

or ship, the nature of the distress, the elapsed time

since the accident, the registry number, and beacon

identification. In addition to direct relays, the more

sophisticated one can be subjected to signal-processing on board the satellite, stored, and re-transmitted

to a ground station later on. The higher frequency signal will also permit higher accuracy location (1 to 3

miles) of the emergency transmitter. The first rescue

using the 406 MHz transmitter took place early in

1985.

Norway and the United Kingdom participate in the

program by providing a ground station. Bulgaria, Denmark (MOU in process), and Finland participate as experimenters, with no indigenous ground stations.

Other countries, including Argentina, Australia, Brazil, Chile, the People’s Republic of China, Saudia Arabia, Singapore, Taiwan, Thailand, and Venezuela have

expressed interest in the program.

The four original nations–the United States, Canada, France, and the Soviet Union–are discussing

means by which the system could gain still broader

international acceptance after 1990, when its transitional operational period ends. The possible means

include: operating the system through an existing international organization; creating a new organization

specifically to operate the system; or continuing the

present four-party arrangement. At the present time,

the countries favor expanding to a total of 10 to 15

parties in a new organization after the current MOUs

expire in 1990,

The chief near-term problem faced by the COSPAS/

SARSAT project has been posed by Administration

policy on the polar-orbiting system on which the

SARSAT transponder flies. The frequent global coverage planned for the system was predicated on keeping the necessary equipment aboard four satellites at

a time—two Soviet and two U.S. The two Soviet satellites are in orbit. The Office of Management and

Budget (OMB) has repeatedly attempted to limit

NOAA to operating one polar-orbiting meteorological satellite at a time, although Congress has each year

restored the necessary funds in its yearly authoriza3A major problem with the system so far has been a vast number ot tal$e

alarms—about 97’ percent of the signals received.

423
424 International Cooperation and Competition in Civilian Space Activities

tion and appropriations procedures. However, in signing the agreement with the other principal countries

in Leningrad in October 1984, the United States has

now committed itself to maintain two SARSAT receivers in orbit. AS OMB has made clear, this does

not necessarily commit the United States to maintaining both polar-orbiting meteorological satellite. It

could fly the instrument on another polar-orbiting satellite, for example, on one of the Air Force Defense

Meteorological Satellite Program spacecraft-an option earlier rejected because of a desire to keep the

international segments of the project entirely civilian

in character. It could also be flown on a small dedicated satellite at a cost of approximately $30 million

for the first copy and about $15 million for subsequent

models.4

Another technical-economic problem is to bring

about conversion from the present emergency beacon equipment on aircraft and ships to the more sophisticated (and perhaps costlier) equipment needed

4Source: Preliminary study by Applled Physics Laboratory, Johns Hopkins

Unwerslty for NASA,

for the most effective operation of the COSPAS/

SARSAT system. In 1970 Congress passed a law requiring that general aviation aircraft carry an Emergency Locator Transmitter; in 1972 the National Transportation Safety Board recommended that the Coast

Guard and the Federal Communications Commission

(FCC) require ocean-going vessels to carry an Emergency Position-Indicating Radio Beacon. These are the

beacons now usable by COSPAS/SARSAT satellites

when they are in the line of sight both of the craft in

distress and the ground station. There is so far no plan

either for U.S. regulations or for international standards to require the new, more sophisticated beacon.

Efforts are underway to make use of the new beacons on a voluntary basis. It would be difficult to mandate carriage of 406 MHz for general aviation and

small boats. It is likely to become mandatory for large

ships (1 ,600 gross tons and above) operating under

International Maritime Organization (lMO) convention. The Radio Subcommittee of IMO voted 17-4 in

favor of 406 MHz for the frequency to be used in the

float-free emergency procedures required by IMO in

the Future Global Maritime Distress and Safety System.
Appendix B

ALTERNATIVE FORMS OF INDUSTRY ORGANIZATION

IN THE UNITED STATES

Although the general rule is that competition (despite its imperfections) is the preferred form of industry organization in the United States, there are two

principal exceptions to this rule where competition

cannot be expected to produce a socially desirable

outcome, industries with decreasing costs and industries or governments producing certain public goods.

The organization of these industries competitively

would result in the misallocation of society’s resources. Economic regulation of decreasing cost industries (those where important cost savings could be

obtained by concentrating production in a single plant

and where, up to a point, bigger plants would provide still greater cost savings as demand grows) is justified as a substitute for competition on the grounds that

monopoly would otherwise naturally emerge and produce an antisocial result. This is the first major exception to the general rule that competition is preferred.

Government provision of “public goods,” technically

defined, the second major exception, is justified on

the grounds that the unsubsidized private market

would not produce them at all or would produce them

below the socially desirable level.

Regulated Industries

Regulated public utilities producing water, electricity, rail transportation, and local telephone service,

for example, are industries where the average cost of

production decreases so rapidly with the size of the

firm that when such an industry has shaken out, according to a widely accepted theory, there will be only

one firm left. The largest producer would be able to

outcompete all others and drive them out of business.

Its size would be that of the whole market, and its cost

of production would be less than any potential smaller

entrant. Hence new entrants would be deterred, and

the firm would be a “natural monopoly.” A natural

monopoly has the same twin evils that all unregulated

monopolies are said to be notorious for: excessive

prices and inadequate output.

To be sure, natural monopolies are contestable markets in the straightforward sense that a competitor

could challenge the incumbent for the whole market,

but the process of contestation might be highly disruptive while it occurs, and lengthy periods of costly

production at less than optimal scale might occur.

When the natural monopoly was reestablished (perhaps by the new entrant), society would be in the

original position of suffering the effects of monopoly.

For these reasons, the public utility industries have

usually been organized in the United States as regulated monopolies within certain geographical boundaries. Prices set by a public regulatory body, are typically set under a rationale that attempts to provide

investors no more than a fair return on assets and thus

avoid monopoly profits.

Because prices cannot be maintained at regulated

levels without controlling production to a greater or

lesser degree, regulatory bodies usually also erect a

rather intricate control mechanism over physical operations.

Regulation often leads to two kinds of inefficiency.

First, politically motivated cross-subsidization between

classes of consumers leads to wasteful consumption

for those benefited, or to overcautious conservation,

for those penalized. Second, the whole regulatory

structure may create incentives for managers to please

the regulators rather than the market. Rather large inefficiencies can develop in these circumstances.

These inefficiencies are likely to be greatest when

the regulated monopolist need not fear contestation

or competition at the fringes of the industry, because

of regulatory controls on entry in these fringe areas.

In the communications industry, for example, communications equipment manufacturers were for many

years not allowed to sell telephones to consumers in

competition with the manufacturing arm of the regulated monopoly. This undoubtedly retarded product

development and technology absorption.

In the United States in recent years, deregulation

has been embarked upon in a number of instances

when opinion has shifted to the belief that competitive or contestable markets can regulate the formerly

regulated industries, as in the current deregulation of

long-distance communications. During the process of

deregulation, cross-subsidization and inefficient production structures may become serious barriers to its

completion. This is because the beneficiaries of the

cross-subsidization, and many of the affected management groups, stand to lose from it and resist the

changes politically.

Business entities, which would benefit from deregulation, may also muddy the waters during the period

425
426 ● /international Cooperation and Competition in Civilian Space Activities

of partial dereguIation by attempting to secure crosssubsidization that had not existed before, now in the

name of deregulation.

Regulation, as an alternative to competition, therefore is a difficult form of organization, both in implementing it and ending it.

Governmental Provision of

Public Goods

A second type of noncompetitive industry organization is used in the United States in the case of “public goods” because competitive markets would result

in the absence of production or in production at inadequate levels. “Public good” is the technical term

in economic theory for a good or service for which

it is impossible or undesirable for reasons of efficiency

to charge consumers in the normal way.1 Examples

of public goods are streets, national defense, police

services, weather forecasts, and various informational activities of government.

It may be impossible to charge for a good or service, for instance, as in the case of national defense,

because a person does not have to purchase it in order to consume it. There is no way to deny people

access to the service on the condition that they pay

for it. Therefore there are no market signals to tell society how much to produce.

In a second case, it may be undesirable to charge

for a good or service because, although it is possible

to deny the consumer access if he or she does not pay,

the costs of collection borne by the consumer, the producer, or society at large may be disproportionately

large compared to the extra cost of providing the service to the consumer.

An example of a service of this type is the daily

weather forecast. While this could be organized on

a pay-TV basis, the costs of doing so are considered

to be disproportionately large. First of all, the cost to

the weather service of one more viewer seeing the

forecast is zero. Given this fact, the collection costs

that would be borne by the consumer in terms of price

and inconvenience and by the pay-TV operator are

obviously disproportionate to the zero cost of servicing the additional consumer,

There would also bean extra cost to society at large

as well, according to prevailing belief. If the general

public were not informed about weather dangers, according to this view, society as a whole would suffer

avoidable costs from weather disasters. For both of

I Pu bllc goods are a Iso referred to by Y arious authors a5 ‘‘social goods’

or “collectlie goods, ”

these reasons, therefore, weather forecasts are provided to the public without charge.

In these examples, and in the case of public goods

in general, reliance on the private market would result in production not taking place at all, or if it does

take place, taking place at an inadequate level when

compared to what society would be willing to pay for.

Public goods can be produced at socially efficient

levels by either the government or the private sector,

but since financing of production is not possible from

sales revenue, production would have to be subsidized if it were to be produced by the private sector

at the socially efficient level.

Mixed Public/Private Goods

Some goods and services can be part public good

and part private good. This is the case when a good

can be sold in the usual way by making those who

“consume” it pay for it. These private purchases, potential or actual, constitute the private good part.

There may also be spillover benefits to the general

public from the good’s consumption that cannot be

charged for. These benefits constitute the public good

part.

An example of this is public education. It would be

possible to charge parents for educating their children

and the collection costs would not be disproportionately large. The decrease in benefits to the general

public that would occur, however, is widely considered to be so large that it justifies the free provision

of primary and secondary education. Elementary and

secondary education is, therefore, provided straightforwardly as a public good.

At the university level, however, user charges are

generally imposed in public universities so as to finance at least partially the private benefits of students.

Students are not allowed to attend without paying

fees, but the remainder of the State universities’ budgets, over and above student fees, is paid for from government tax revenues on the justification that enhanced culture and economic growth are public

goods. It would not be possible to charge each member of the general public for enhanced culture and

economic growth and deny them access to them if

they did not pay. Public higher education is, thus, a

mixed public/private good.

Marginal Cost Pricing

We can be more precise in discussing economic efficiency. Economic efficiency is defined in the textbook

case as production at the level where the consumer

of the last unit is willing to pay the cost of producing
App. B—Alternative Forms of Industry Organization in the United States ● 427

it (“the marginal cost”) but no more. We recognize

it as the efficient production level when at that price

and at that level there are no excess inventories and

no unsatisfied potential consumers who would be willing to buy.

Larger or smaller production could not be sold at

a price equal to marginal cost. Some other price would

have to be charged to sell all the goods produced. This

other price would either result in an economic loss

to the producing entity or to consumers, including

those who would be needlessly priced out of the market. In either case, there would be social loss. Although this exposition of the economic theory of production is very brief, it can be encapsuled in the the

general rule that, for a given distribution of wealth,

price should equal marginal cost for social efficiency

in production.

In ordinary real-world private markets, workable

competition is thought to produce prices that do not

depart too far from marginal cost in the long run. This

occurs because workably competitive industries, under antitrust regulation, are neither natural monopolies nor monopolies or combines based on conspiracy.

At prices based on marginal cost, such industries are

self-financing as well in the sense that revenues exceed costs (except during periods of industry stress

such as recessions).

Decreasing-cost industries, on the other hand, are

not self-financing with marginal-cost pricing. I n certain declining-cost industries, in fact, marginal cost is

far enough below average cost, even in the long run,

that a second strong efficiency argument (in addition

to the natural-monopoly argument) can be made

against unsubsidized private provision of the good or

service. If the price charged to all consumers is set

equal to the average cost, the pricing rule for breakeven operation when only a single price is charged,

the last consumer would have to pay more than the

cost of servicing him or her. In this case a number of

potential consumers, who should have been serviced

if the industry were operating efficiently, will have

been priced out of the market. Production would then

be higher cost than desirable from efficiency considerations because the plant would be too small. Thus,

resources would be wasted.

If the industry were to be self-financing, however,

the price would have to be at least equal to the average cost, even though the extra cost of servicing a customer might be well below the average cost. Decreasing cost industries, therefore, need to be subsidized,

if production is to be at the economically efficient

level, where the good is priced equal to the cost of

producing the last unit (the marginal cost). This subsidy can be justified as a means of providing a public

good distributed free to the public–the public good

of increased economic efficiency.

While the subsidization of private, decreasing cost

industries has in some instances been done, it is ordinarily not politically feasible to do it and, when questions of the distribution of income and wealth are considered, may indeed not be socially desirable. Other

mechanisms, to be discussed below, are used instead

to ameliorate the efficiency loss that comes from

charging users a price based on average cost rather

than on marginal cost,

The Functional Similarity of Mixed

Public/Private Goods and Goods of

Decreasing Cost Industries

In both public-good and decreasing-cost industries,

the cost of servicing an additional consumer is well

below the average cost of servicing all consumers. In

the case of the pure public good, the cost of servicing an additional consumer is zero; in the case of

mixed public/private goods, the marginal cost may be

significantly below average cost. The same situation

occurs in the case of decreasing-cost industries.

Hence, the problem of determining industry organization and pricing strategy is functionally the same in

both cases.

industry-Organ ization/Pricing Strategies

The problem of public-good/decreasi rig-cost industries has been handled in American industrial organization in three ways: First, when the misallocation of

social resources is thought to be small, the solution

is to ignore the problem, since the cures, government

regulation and subsidy, are themselves difficult social

processes with which to achieve economic efficiency.

Private competitive organization continues to be the

norm in these cases. On the other hand, when the

divergence between long-run marginal cost and longrun average cost is so large that it cannot be ignored,

two principal alternative methods have traditionally

been used in the United States.

The first is to subsidize production, which then may

be carried out either by a governmental or private entity. Subsidization, of course, has political limits having to do with the distribution of benefits unevenly

across social groups. It may be thought of as unfair

and, hence, politically unsupportable. Nevertheless,

the production of a large fraction of the gross national

product is, in fact, subsidized by government–from

space research and development to interstate highways to public education. Depending on the item in-
428 ● International Cooperation and Competition in Civilian Space Activities

volved, the unfairness of uneven distribution of benefits in these cases is apparently considered minor,

unavoidable, worth it, or compensated for by the progressive tax system.

The second method used to ameliorate the problem is to mandate certain kinds of nonmarket pricing

by regulation. These special pricing schemes are used

where subsidization is ruled out and total costs must

be recovered from consumers but where the regulatory agency desires to minimize the efficiency drawbacks of average-cost pricing.

As a condition of survival, private firms do recover

total costs over the long run. The norm in the general

private economy is also that consumers are charged

a single price (for the same good or service in the same

quantity) or something close to it depending on the

degree of monopoly power exercised by firms in the

market. Charging a single price to all consumers may

be inefficient for decreasing cost industries, however,

when total cost recovery is specified. To try and ameliorate this inefficiency, pricing schemes that involve

different prices for different customers or different

prices for the first and last units consumed by a given

consumer, have commonly been prescribed for regulated utilities. The idea is to avoid pricing some of

the consumption out of the market that would have

been attracted by marginal cost pricing but still recover total costs from consumers.

Such devices as two-part tariffs, where there is a certain monthly charge but where price per unit consumed is low, and price discrimination, where different classes of customers are charged different rates,

are among the devices use to keep production and

consumption closer to optimal under full cost recovery than it would be under unitary pricing.

Space Markets Can Be Analyzed

With These Concepts

Markets for space-related goods and services can

be analyzed according to these concepts. Among the

equipment and services treated in this study—in space

transportation, materials processing, satellite communications, and remote sensing—can be found examples of normal goods, public goods, and decreasingcost, industry goods. As “commercialization” alternatives are considered, this mode of analysis may be

useful in formulating public policy toward industrial

organization in each case.
Appendix C

PUBLIC LAW 98-365—JULY 17, 1984

PUBLIC LAW 98-365—JULY 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 the House of Representatives of the

United States of America in Co

~ m “ 8 e as the ‘land Rem o

assembled, That this Act may ~::li~gemote -

nmng Commercialization Act of ~o~merCi~liM-

. tion Act of 1984.

Communications

TITLE I–DECLARATION Of findings PURPOSES, AND and telecommunications.

15 Usc 4201

note.

FINDINGS

SEC. 101. The Congress finds and declares that— Congress.

(1) the continuous civilian collection and utilization of land I S ‘

Sc 4201

remote-sensin~ data from space are of major benefit in managing the Earths natural resources and in planning and conducting many other activities of economic importance;

(2) the Federal Government’s experimental Landsat system Land@ system.

has established the United States as the world leader in land

remote-sensing technology;

(S).the national interest of the United States lies in maintaining mternatlonal leadership in civil remote sensing and in

broadly promoting the beneficial use of remote-sensing data;

(4) land remote sensing by the Government or private parties De[:o;s:land

of the United States affects international commitments and

policies and national security concerns of the United States; ‘ecuritJ’

(5). the broadest and most beneficial use of land remOtesensmg data wdl result from maintaining a policy of nondiscriminatory access to data;

(0 competitive, marketdriven private sector involvement in

land remote sensing is in the national interest of the United

States;

(7) use of land remote-sensing data haa been inhibited b slow

market development and by the lack of assurance o data [

continuity;

(0 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 Federal Government and private

indust can help assure both data continuity and United States

leaders ip; 7

(11) the time is now appro riate to initiate such cooperation

with phased transition to a fu Yly commercial system;

(12) such cooperation should be structured to involve the

minimum practicable amount of support and regulation by the

429
430 ● International Cooperation and Competition in Civilian Space Activities

98 STAT. 452 PUBLIC LAW 98-365—JULY 17, 1984

15 USC 4202.

Defense and

national

security.

15 USC 4203.

Defense and

national

security.

15 USC 4204.

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 compelling reason to commercialize meteorological satellites at this time.

PURPOSES

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 by assuring continuous data availability to the Federal Government;

(2) maintain the United States worldwide leadership in civil

remote sensing, preserve its national security, and fulfill its

international obligations;

(3) minimize the duration and amount of further Federal

investment necessary 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 commercialization of meteorological satellites at

this time.

POLICIES

SEC. 103. (a) It shall be the policy of the United States to preserve

its right to acquire and disseminate unenhanced remote-sensing

data.

(b) It shall be the policy of the United States that civilian unenhanced remote-sensing data be made available to all potential users

on a nondiscriminatory basis and in a manner consistent with

applicable antitrust laws.

(c) It shall be the policy of the United States both to commercialize

those remote-sensing space systems that properly lend themselves to

private sector operation and to avoid competition by the Government 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 that are

essentially of a public service nature.

DEFINITIONS

SEC. 104. For purposes of this Act:

(1) The term “Landsat system” means Landsats 1,2,3,4, and

5, and any related ground equipment, systems, and facilities,

and any successor civil land remote-sensing space systems operated by the United States Government prior to the commencement of the six-year period described in title III.

(2) The term “Secretary” means the Secretarv of Commerce.
App. C—Public Law 98-365—July 17, 1984 . 431

PUBLIC LAW 98-365—JULY 17, 1984 98 STAT. 453

(3)(A) The term “nondiscriminatory basis” means without

preference, bias, or any other special arrangement (except on

the basis of national security concerns pursuant to section 607)

regarding delivery, format, financing, or technical considerations which would favor one buyer or class of buyers over

another.

(~) The sale of data is made on a nondiscriminatory basis only

if (1) 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) the system operator has not established or changed any price, policy, procedure, or other term or

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 minimally processed signals or film products collected from civil

remote-sensing space systems. Such minimal processing may

include rectification of distortions, registration with respect to

features of the Earth, and calibration of spectral response. Such

minimal processing does not include conclusions, manipulations, 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 II—OPERATION AND DATA MARKETING OF LANDSAT

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 forei

r

ground stations under the

terms of agreements between t e United States Government

and nations that operate such ground stations which are 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 part or 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
432 International Cooperation and Competition in Civilian Space Activities

98 STAT. 454 PUBLIC LAW 98-365—JULY 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 recess and to the extent

provided in advance by appropriation cts, shall contract with a I

United States private sector arty (as defined by the Secretary) for

the marketing of unenhancJ 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 Secretary and the contractor including fees for operating the

system, payments by the contractor as an initial f= or as a

percentage of sales receipts, or other such considerations;

(~) shall provide that the contractor will offer to sell and

dehver 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 Secreta only if the Secretary

has determined that such contract is like y to result in net cost Y

savings for the United States Government; and

(6) may be reaward~ 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.

(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 Trans rtation of the Senate and the Committee on Science and Techno ogy of the House of Representatives r

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.

Congress.

CONDITIONS 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 pub ish the international obligations, national security concerns l

(with appropriate protection of sensitive information), domestic
App. C—Pub/ic Law 98-365—July 17, 1984 ● 433

PUBLIC LAW 98-365—JULY 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 (a);

(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 Rewrt

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 Secretary 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 thedate of the commencement of the contract 15WC4Z14.

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 as 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—
434 ● International Cooperation and Competition in Civilian Space Activities

98 STAT. 456

15 Usc 4221.

PUBLIC LAW 98-365—JULY 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 barns.

TITLE III–PROVISION OF DATA CONTINUITY AFTER THE

LANDSAT SYSTEM

PURPOSES AND DEFINITION

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 remotesensing systems; and

(2) to provide data continuity for six ears after the practical

demise of the space segment of the LanL t system.

(b) For purposes of this title, the term “data continuity” means

the continued availability of unenhanced data—

(1) including data which are from the point of view of a data

user—

(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 f~cal 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.

15 Usc 4222. private sector parties (as defined by the Secretary pursuant to

section 202) for 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 u~n which operations could begin;

(3) the -number of satilhtes to be constructed and their

expected hfetlmes;

(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 pro ed procedures for meeting the national security

concerns an international obligations of the United States in r

accordance with section 607.

AWARDING OF THE CONTRACT

15 USC 4223. SEC. 303. (a)(l) In accordance with the r uirementa of this title,

the Secretary shall evaluate the proposals Described in section 302 7

and, by means of a competitive process and to the extent provided in
App. C—Public Law 98-365—JIJly 17, 1984 ● 435

PUBLIC LAW 98-365—JULY 17, 1984 98 STAT. 457

advance by appropriation Acts, shall contract with the United

States private sector party for the capability of providing data

continuity for a period of six years and for marketing unenhanced

data.

(2) Before commencing s ace operations the contractor shall

obtain a license under title I . IV

(b) AS part of the evaluation described in subsection (a), the

&~:t.a~ shall analyze the expected outcome of each proposal in

(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, remotesensing 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 financial consideration

offered to the Federal Government in accordance with section

305;

(8) the commercial viability of the proposal;

(9) the proposed procedures for satisfying 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 enter Con=ess.

into any such contract shall be transmitted to the Committee on

Commerce, Science, and Transportation of the Senate and the Committee on Science and Techno ogy of the House of Representatives r

for their review. No such decision or proposed decision shall be

implemented unless (1) a period of thirty calendar days has passed

after the receipt by each such 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 objection to the decision or

proposed decision. As part of the transmittal, the Secretary shall

include the information specified in subsection (a).

(d) If, as a result of the competitive process required by this Rewrt.

section, the Secretary receives no proposal which is acce table

under the provisions of this title, the secretary shall so certi!

K

and

fully report such findin to the Congress. As soon as practicab e but

not later than thirty ays after so certifying and reporting, the f

Secretary shall reopen the competitive process. The period for the

subsequent competitive process shall not exceed one hundred and

eighty days. If, after such subsequent com titive process, the Sem+

tary receives no proposal which is accepta le under the provisions of r

this title, the Secretary shall so certify and full report such finding

to the Congress. Not earlier than ninety days a ter such certification /’

and report, the Secretary may assure data continuity by procure-
436 . International Cooperation and Competition in Civilian Space Activities

98 STAT. 458 PUBLIC LAW 98-365—JULY 17, 1984

ment and operation by the Federal Government of the necessary

systems, to the extent provided in advance by appropriation Acts.

TERMS OF CONTRACT

15 USC 4224. SE C. 304. (a) Any contract entered into pursuant to this title—

(1) 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 ub

lished by the Secretary, reasonably assure data continuity or a r

period of six years, beginning as soon as practicable in order to

minimize any interruption of data availability ;

(~) sh~l provide t at the contractor wil offer ti =11 and h r

dehver 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 spacc+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 costs incurred with respect to

such utilization, including a reasonable and proportionate

share of freed, platform, data transmission, and launch

COStS; and

(B) such utikdon would not interfere with or otherwise

compromwe intended civilian Government missions, as determined by the agency responsible for the civilian platform; and

(6) may provide financial support by the United States Government, for a portion of the capital costs required to rovide

data continuity for a period of six years, in the form o loans, F

loan guarantees, or a ment.a pursuant to section 305 of the

Federal Property an! Kdministrative Services Act of 1949 (41

U.S.C. 255).

(b)(l) 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 pur

“ xtl %d

Pz%&t!:% l

e

Such determination shall be submit t : :

Congress, together with a full statement of the basis for such

determination.

(2) If the Secretary determines that such contract does not reasonably effectuate the requirements of title II, the Secretary shall

promptly carry out the provisions of such title to the extent provided in advance in appropriations Acts.

MARKETING

15 USC 4225. SEC. 305. (a) In order to promote aggressive marketing of land

remote-sensing data, any contract entered into pursuant to this title

may provide 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
App. C—Public Law 98-365—July 17, 1984 “ 437

PUBLIC LAW 98-365—JULY 17, 1984 98 STAT. 459

contractor may continue to operate a civil remote-sensing space

system.

REPORT

SE C. 306. Two ears after the date of the commencement of the 15 usc 4226.

six-year period escribed in section 304(a)(2), the Secretary shall ( / ’

report to the President and to the Congress on the progress of the

transition to fully private financin , ownership, and operation of

remotesensing space systems, toget er with any recommendations i

for actions, including actions necessary to ensure United States

leadership in civilian land remote sensing from space.

TERMINATION OF AUTHORITY

SEC. 307. The authority granted to the Secreta by this title shall Is usc d~~T

terminate ten years after the date of enactment o this Act. ?’

TITLE IV–LICENSING OF PRIVATE REMOTE-SENSING

SPACE SYSTEMS

GENERAL AUTHORITY

SE C. 401. (a)(l) In consultation with other appropriate Federal Is usc d~~l

agencies, the Secretary is authorized to license private sector parties

to o rate private remotesensing space systems for such period as

the !&c retary may specify and in accordance with the provisions of

this title.

(2) In the case of a private space s stem that is used for remote

sensing and other purposes, the aut ority of the Secretary under {

this title shall be limited only to the remote-sensing operations of

such space system.

(b) No license shall be granted by the Secretary unless the Secretary determines in writing that the applicant will comply with the

requirements of this Act, any regulations issued pursuant to this

Act, and any applicable international obligations and national security concerns of the United States.

(c) The Secretary shall review any application and make a deter- Review date

mination thereon within one hundred and twenty days of the receipt

of such a plication. If final action has not occurred within such

time, the L retary shall inform the applicant of any pending issues

and of actions required to remlve them.

(d) The Secretary shall not deny such license in order to protect

any existing licensee from competition,

CONDITIONS FOR OPERATION

SEC. 402. (a) No person who is subject to the jurisdiction or control lb USC 4Z42.

of the United States may, directly or through any subsidiary or

affiliate, operate any private remote-sensing space system without a

license pursuant to section 401.

(b) Any license issued pursuant to this title shall specify, at a

minimum, that the licensee shall comply with all of the requirements of this Act and shall—

(1) operate the system in such manner as to preserve and ~~:;O~S;land

promote the national security of the United States and to

observe and implement the international obligations of the ‘ ecurity ”

United States in accordance with section 607;
438 “ International Cooperation and Competition in Civilian Space Activities

98 STAT. 460 PUBLIC LAW 98-365—JULY 17, 1984

(2) make unenhanced data available to all potential users on a

nondiscriminatmy 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 r uest pum.mnt to section 602;

(5) furnish the%ec retary 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)(l); and

(9)(A) 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 SECRETARY

15 USC 4243. SEC. 403. (a) In order ti 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, affh-mation, 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 (a)(l), (a)(3), or
App. C—Public Law 98-365—July 17, 1984 ● 4 3 9

PUBLIC LAW 98-365—JULY 17, 1984 98 STAT. 461

(a)(6) 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 seq.

REGULATORY AUTHORITY OF THE SECRETARY

SEC. 404. The Secretary may issue regulations to carry out the Is 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 ACI’IVITIES

SEC. 405. (a) A private sector party may apply for a license to 15 usc 4245

operate a private remotesensing 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 and—

(1) the system operator agrees to reimburse the Government

immediately for all related costs incurred with respect to such

utilization, including a reasonable and proportionate share of

freed, 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 agreement for such utilization if

such agreements are consistent with such agency’s mission and

statutory authority, and if such remotesensing space system is

licen& 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

SW. 406. If, five years after the expiration of the six-year period 15 u~ 4246.

described in section 304(a)(2), no private sector party h= been

licensed and continued in operation under the provisions of this

title, the authority of thia title shall terminate.

TITLE V–RESEARCH AND DEVELOPMENT

CONTINUED FEDERAL RESEARCH AND DEVELOPMENT

SEC. 501. (a)(l) The Administrator of the National Aeronautics and 15 uw 4261.

Space Administration is directed to continue and to enhance

such Administration’s programs of remote-sensing research and

development.

(2) The Administratzn= is authorized and encouraged to—

38-797 0 - 85 - 15 : QL 3
440 . International Cooperation and Competition in Civilian Space Activities

98 STAT. 462 PUBLIC LAW 98-365—JULY 17, 1984

Report.

(A) conduct experimental space remotesensing programs

(including applications demonstration programs and basic

research at universities);

(B) develop remotesensing technologies and techniques,

including those needed for monitoring the Earth and its environment; and

(C) conduct such research and development in cooperation

with other Federal

d

encies and with public and private

research entities (inclu ing 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.

b)(l) The Secretary is directed to conduct a continuing program

of—

(A) research in a placations of remote-sensing;

(B) mondmng o 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 local governments, foreign governments, and international organizations) and to

enter into arrangements (including joint ventures) which will foster

such cooperation.

(c)(1) 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 Government agencies, private sector parties, and foreign and

international or animations.

(d) Other F eral agencies are authorized and encouraged to ederal

conduct research and development on the use of remote sensing in

fulfillment of their authorized missions, using fun”& appropriated

for such purposes.

(e) The Secretary and the Administrator of the National Aeronautics 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 remotesensing research and development applied

to the Earth and its atmosphere; (2) a compilation of progress in 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-sensing space

programs), and opportunities available for further progress.

USE OF EXPERIMENTAL DATA

15 USC 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
App. C—Public Law 98-365—July 17, 1984 ● 441

PUBLIC LAW 98-365—JULY 17, 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 lb USC dz~:l

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 VI–GENERAL 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 to ~~afi]~i~~+l

all users on a nondiscriminatory basis in accordance with the ‘

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(3)(C), not necessarily the names of buyers or

their purchases) upon which the operator will sell such data.

ARCHIVING OF DATA

SEC. 602. (a) It is in the public interest for the United States Is USC ~~~~

Government—

(1) to maintain an archive of land remote-sensing data for

historical, scientific, and technical purposes, including longterm 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 “basic data set”) and shall follow

reasonable archival practices to assure proper storage and preservation of the basic data set and timely access for parties requesting

data. The basic data set which the Secretary assembles in the

Government archive shall remain distinct from any 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;
442 ● International Cooperation and Competition in Civilian Space Activities

98 STAT. 464

Marketing.

Public

availability.

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 IV;

(6) include, as the Secretary considers appropriate, data collected by foreign

f

ound stations or by foreign remote-sensing

space systems; an

(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 processing for archiving.

(e) Any system operator shall have the exclusive right to sell all

data that the operator provides to the United States remote-sensing

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.

(f) After the expiration of such exclusive right to sell, or after

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. SE C. 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 4275. SEC. 605. The Secretary ma , by means of a competitive process,

allow a licensee under title I or any other private party to buy, 6

lease, or otherwise acquire the use of equipment from the Landsat

system, when such equipment is no longer needed for the o ration

of such system or for the sale of data from such system. O lcials of F

other Federal civilian agencies are authorized and encouraged to

cooperate with the Secretary in carrying out the provisions of this

section.
App. C—Public Law 98-365—July 17, 1984 ● 443

PUBLIC LAW 98-365—JULY 17, 1984 98 STAT. 465

RADIO FREQUENCY ALLOCATION

SEC. 606. (a) Within thirty days after the date of enactment of this

Act, the President (or the President’s delegee, if any, with authority

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 Government use, for use by United States Landsat and commercial remotesensing space systems. The spectrum to be so made available shall

conform to any applicable international radio or wire treaty or

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 to commercial 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

Federal Communications Commission for any radio facilities involved with the commercial remote-sensing space system.

(c) I! is the intent of Congress that the Federal Communications

Commlsslon complete the radio licensing process under the Communications 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 of an

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 Communications Commission for the development and construction of any

United States land remote-sensing space system (or component

thereof), other than radio transmitting facilities or 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

SE C. 607. (a) The Secretary shall consult with the Secretary of

Defense on all matters under this Act affecting national security.

The Secretary of Defense shall be responsible for determining those

conditions, consistent with this Act, necessary to meet national

security concerns of the United States and for notifying the Secretary promptly of such conditions.

(b)(l) The Secretary shall consult with the Secretary of State on

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.

President of U.S.

15 USC 4276.

47 USC 609.

Defense and

national

security,

15 Usc 4277

38-797 0 - 85 - 16 : QL 3
444 . International Cooperation and Competition in Civilian Space Activities

98 STAT. 466 PUBLIC LAW 98-365—JULY 17, 1984

15 Usc 1517

note.

15 USC 4278.

15 Usc 1517

note.

(3) The Secretary of State shall romptly report to the Secretary

any instances outside the United tates of discriminatory distribu- 8

tion of data.

(c) If, as a result of technical modifications imposed on a system

operator on the basis of national securit concerns, the Secretary, in

consultation with the Secretary of De ense or with other Federal /’

agencies, determines that additional costs will be incurred by the

system operator, or that past development costs (including the cost

of capital) will not be recovered by the system operator, the Secretary 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. Reimbursements may cover costs associated with required changes in system

performance, but not costs ordinarily associated with doing business

abroad.

AMENDMENT TO NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

AUTHORIZATION, 1983

SEC. 608. Subsection (a) of section 201 of the National Aeronautics

and Space Administration Authorization Act, 1983 (Public Law 97-

324; 96 Stat. 1601) is amended to read as follows:

“(a) The Secretary of Commerce is authorized to plan and provide

for the management and opdration 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

SE C. 609. (a) There are authorized to be appropriated to the

Secretary $75,000,000 for fwal 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

Aeronautics and Space Administration Authorization Act, 1983.

TITLE VII–PROHIBITION OF COMMERCIALIZATION OF

WEATHER SATELLITES

PROHIBITION

President of U.S. SEC. 701. Neither the President nor any other official of the

15 USC 4291. Government shall make any effort to lease, sell, or transfer to the

private sector, commercialize, or in any way dismantle any portion

of the weather satellite systems operated by the Department of

Commerce or any successor agency.
App. C—Public Law 98-365—July 17, 1984 . 445

PUBLIC LAW 98-365—JULY 17, 1984 98 STAT. 467

FUTURE CONSIDERATIONS

SEC. 702. Regardless of any change in circumstances subsequent to 15 USC 4292.

the enactment of this Act, even if such change makes it appear 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 HISTORY—H.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.

o
Appendix D

PUBLIC LAW 98-575–OCT. 30, 1984

PUBLIC LAW 98-575—OCT. 30, 1984

Public Law 98-575

98th Congress

An Act

To facilitate commercial space launches, and for other purposes.

Be it enacted by the Senate and House of Representatives of the

United States of America in Congress assembled,

SHORT TITLE

SECTION 1. This Act may be cited as the “Commercial Space

Launch Act”.

FINDINGS

SEC. 2. The Congress finds and declares that—

(U the peaceful uses of outer space continue to be of great

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 Government;

(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 private 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 obligations 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—

(1) to promote economic growth and entrepreneurial activity

through utilization of the space environment for peaceful purposes;

98 STAT. 3055

Oct. 30.1984

[H.R. 3942]

Commercial

Space

Launch Act.

49 USC app. 2601

note.

49 USC app.

2601.

49 USC 2602.

446
App. D—Public Law 98-575—Oct. 30, 1984 ● 447

98 STAT. 3056 PUBLIC LAW 98-575—OCT. 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.

2603.

SEC. 4. For purposes of this Act—

(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 an State or any nation;

(9) “secretary” means the & xretary 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

(0 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
448 ● International Cooperation and Competition in Civilian Space Activities

PUBLIC LAW 98-575—OCT. 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 $~O~SC app.

Act, and in doing so shall—

(1) encourage, facilitate, and promote commercial space

launches by the private sector; and

(2) consult with other agencies to provide consistent application of licensing requirements under this Act and to ensure fair

and equitable treatment for all license applicants.

b) TO the extent permitted by law, Federal agencies shall assist

the Secretary, as necessary, in carrying out this Act.

REQUIREMENT OF LICENSE FOR PRIVATE SPACE LAUNCH OPERATIONS

SEC. 6. (a)(l) No person shall launch a launch vehicle or operate a $:O~SC app.

launch site within the United States, unless authorized by a license ~

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 vehicle or operate a launch

site outside the United States, unless authorized by a license issued

or transferred under this Act.

(3)(A) NO United States citizen described in subparagraph (C) of

section 4(11) shall launch a launch vehicle or operate a launch site

at any place which is both outside the United States and outside the

territory of any foreign nation, unless authorized by a license issued

or transferred under this Act. The preceding sentence shall not

apply with respect to a launch or operation of a launch site if there

is an agreement in force between the United States and a foreign

nation which provides that such foreign nation shall exercise jurisdiction over such launch or operation.

(B)(i) Except as provided in clause (ii) of this subparagraph, this

Act shall not apply to the launch of a launch vehicle or the

operation of a launch site in the territory of a foreign nation by a

United States citizen described in subparagraph (C)of section 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 agyeerne”~”

exercise jurisdiction over the launch of a launch vehicle or operation

of a launch site in the territory of such nation by a United States

citizen described in subparagraph (C)of section 4(11), no such United

States citizen shall launch a launch vehicle or operate a launch site

in the territory of such nation, unless authorized by a license issued

or transferred under this Act.

(b)(l) The holder of a launch license under this Act shall not

launch a payload unless that payload complies with all requirements of Federal law that relate to the launch of a payload. The

Secretary shall ascertain whether any license, authorization, or

other permit required by Federal law for a 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
App. D—Public Law 98-575—Oct. 30, 1984 . 449

98 STAT. 3058 PUBLIC LAW 98-575—OCT. 30, 1984

public health and safety, safety of property, or any national security

interest or foreign policy interest of the United States.

(c)(1) 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 affkct 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

SEC. 7. The Secretary may, consistent with the public health and

safety, safety of property, and national security interests and foreign

policy interests of the United 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 under this Act.

LICENSING REQUIREMENTS

49 USC app. SEC. 8. (a)(1) 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, respectively, except to the

extent provided in paragraph (2).

(2) If the Secretary determines, in consultation with appropriate

agencies, that any requirement of Federal law that would otherwise

apply to the launch of a launch vehicle or the operation of a launch

site is not necessary to protect the public health and safety, safety of

property, and national security interests and foreign policy interests

of the United States, 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 launch 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

2608. transfer of a license under this Act, in such form and manner as the

Secretary may prescribe. The Secretary shall establish procedures

and timetables to expedite review of applications under this section

and to reduce regulatory burdens for applicants.
450 ● International Cooperation and Competition in Civilian Space Activities

PUBLIC LAW 98-575—OCT. 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 and an

regulation issued under this Act. The Secretary shall include in suci

license such conditions as may be necessary to ensure compliance

with this Act, including an effective means of on-site verification

that a launch or operation of a launch site conforms to representations made in the application for a license or transfer of a license.

The Secretary shall make a determination on any application not

later than 180 days after receipt of such application. If the Secreta

has not made a determination within 120 days after receipt of sucT

application, the Secretary shall inform the applicant of any 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 disclose any data or information under this Act which qualifies for exemption under section

552(b)(4) of title 5, United States Code, or is designated as confidential by the person or agency furnishing such data or information,

unless the Secretary determines that the withholding of such data

or information is contrary to the public or national interest.

SUSPENSION, REVOCATION, AND MODIFICATION OF LICENSES

SE C. 10. (a) The Secretary may suspend or revoke any license ~:O~SC a pp.

issued or transferred under this Act if the Secretary finds that the 1.

licensee has substantially failed to comply with any requirement of

this Act, the license, or any regulation issued under this Act, or that

the suspension or revocation is necessary to protect the public

health and safety, safety of property, or any national security

interest or foreign policy interest of the United States.

(b) Upon application by the licensee or upon the Secretary’s own

initiative, the Secretary may modify a license issued or transferred

under this Act, if the Secretary finds that the modification will

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

(2) shall continue in effect during any 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 taken or proposes to

take regarding such finding.

EMERGENCY ORDERS

SE C. 11. (a) The Secretary may terminate, prohibit, or suspend Prohibition.

immediately the launch of a launch vehicle or the operation of a 49 USC app.

launch site which is licensed under this Act if the Secretary deter- 2G1

0

mines that such launch or operation is detrimental to 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 effect during

any review of such order under section 12.
App. D—Public Law 98-575—Oct. 30, 1984 ● 451

98 STAT. 3060 PUBLIC LAW 98-575—OCT. 30, 1984

ADMINISTRATIVE AND JUDICIAL REVIEW

$ ll~SC app. SEC. 12. (a)(l) An applicant for a license and a proposed transferee

of a license under this Act shall be entitled to a determination on

the record after an opportunist for a hearing in accordance with

section 554 of title 5, United tates 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. An

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

~?::etary under section 6(b)(2) to prevent the launch of such pay-

(2i 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 suspend any

launch or operation of’ a launch site licensed by the Secretary.

~) Any final action of the Secretary under this Act to issue,

transfer, deny the issuance or transfer of, suspend, revoke, or modify

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

261’2. and comment in accordance with section 553 of title 5, United States

Code, as maybe necessary to carry out this Act.

MONITORING OF ACTIVITIES OF LICENSEES

49 USC app. SEC. 14. (a) Each license issued or transferred under this Act shall

2513, require the licensee—

(1) to allow the Secretary to place Federal officers or employees or other individuals as observers at ~ny 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 pa load is integrated

with a launch vehicle, in order to monitor t e activities of the i

licensee or contractor at such time and to such extent aa 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 coo rate with such observers in the performance of

monitoring unctions. r

(b) The Secretary may, to the extent provided in advance by

appropriation Acts, enter into a contract with any person to carry

out subsection (a)(l) 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 facilitate and encourage the acquisition (by lease, sale,

transaction in lieu of sale, or otherwise) by the private sector of
452 ● International Cooperation and Competition in Civilian Space Activities

PUBLIC LAW 98-575—OCT. 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.

(b)(l) 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 consultation with the Secretary. In the case 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 an

other type of acquisition of launch property, the amount of suci!

payment shall bean amount equal to the direct COStS (including 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

costs (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 under paragraph (l).

(3) l’he amount of any payment received by the United States for

launch property or launch services, including utilities, under this

subsection shall be deposited in the general fund 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 ita agencies and personnel from liability, loss, or injury

as a result of a launch or operation of a launch site involving

Government facilities or personnel.

LIABILITY INSURANCE

SEC. 16. Each person who launches a launch vehicle or operates a &#C app.

launch site under a license issued or transferred under this Act ~

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

SE C. 17. (a) The Secretary shall enforce this Act. The Secretary $~l~sc app.

may delegate the exercise of any enforcement authority under this ~

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 person an oath, affhmation, or affidavit, concerning any matter relating to enforcement of this Act; and

(2) pursuant to any lawful process—
App. D—Public Law 98-575—Oct. 30, 1984 . 453

98 STAT. 3062 PUBLIC LAW 98-575—OCT. 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 Usc app, SE C. 18. It is unlawful for any person to violate a requirement of

2617. 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 LJS(: app SEC. 19. (a) Any person who is found by the Secretary, after notice

261X, 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 for a

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, any 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 shall recover

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 and SEC. 20. (a) The Secretary shall consult with the Secretary of

national Defense on all matters, including the issuance or transfer of each

security. license, under this Act affecting national security. The Secretary of 4:) US(’ app. Defense shall be responsible for identifying and notifying the Secre- ‘261!). 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 State on 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 which are

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.
454 ● International Cooperation and Competition in Civilian Space Activities

PUBLIC LAW 98-575—OCT. 30, 1984 98 STAT. 3063

REIJITIONSHIP TO OTHER LAWS AND INTERNATIONAL OBLIGATIONS

SEC. 21. (a) No State or political subdivision of a State may adopt 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 this Act Z6Z0.

shall preclude a State or a political subdivision of a State from

adopting or putting into effect any law, rule, regulation, standard, or

order which is consistent with this Act and is in addition to or 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 of space launch activities.

(b) A launch vehicle or payload shall not, by reason of the launching of such vehicle or payload, be considered an export for purposes

of any law controlling exports.

(c) N:\hiI& in this Act shall apply to— —

(A) launch or operation of a launch vehicle,

(B) operation of a launch site, or

(C) other space activity,

carried out by the United States on behalf of the United States;

or

(2) any planning or policies relating to any such launch,

operation, or activity.

(d) The Secretary shall carry out this Act consistent with any

obligation assumed by the United States in any 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 of any foreign nation.

REPORT ON LEGISLATION

SE C. 22. (a) Not later than the last day of each fiscal year ending Re ort.

L after the date of enactment of this Act and before October 1, 1989, ~~zl

sc a

pp

the Secretary shall submit to the Committee on Science and Tech- ~

nology of the House of Representatives and the Committee on

Commerce, Science, and Transportation of the Senate a report

describing all activities undertaken under this Act, including a

description of the process for the application for and approval of

licenses under this Act and recommendations for legislation that

may further commercial launches.

(b) Not later than July 1, 1985, the Secretary shall submit to the

Committee on Science and Technology of the House of Representatives and the Committee on Commerce, Science, and Transportation

of the Senate a report which identifies Federal statutes, treaties,

regulations, and policies which may have an adverse effect on

commercial launches and include recommendations on appropriate

changes thereto.

SEVERABILITY

SE C. 23. If any provision of this Act, or the application of such #&;SC a pp.

provision to any person or circumstance, is held invalid, the remain- ~

der of this Act and the application of such provision to any other

person or circumstance shall not be affected by such invalidation.
——

App. E—Glossary of Acronyms ● 457

GHz

GMS

GNP

GPS

GSO

HDDT-high

HI AND Hll

HF

Hz

IAA

IAEA

IAF

IBS

ICBM

lccP

Icsu

IEEE

IFRB

IHW

IISL

ILA

IMCO

INMARSAT

—gigahertz (91 billion cycles per

second)

–Geostationary Meteorological Satellite (Japan)

–gross national product

—global positioning satellite (sometimes NAVSTAR/GPS-DOD)

–geostationary orbit

–density digital tape

–Japanese expendable launch vehicles being developed by

NASDA

–high frequency

–hertz; a unit of frequency equal

to one cycle per second

–International Academy of Astronautics

–International Atomic Energy

Agency

–International Astronautical Federation

—INTELSAT Business Service

—intercontinental ballistic missile

–Committee on Information, Computer and Communications Policy

—International Council of Scientific

Unions

—Institute of Electrical and Electronics Engineers

–International Frequency Registration Board

–International Halley Watch

–International Institute of Space

Law

—International Lawyers Association

—Intergovernmental Maritime Consultative Organization

–International Maritime Satellite

Organization

INTERSPUTNIK–Communist bloc satellite system

IPDC –International Program for the Development of Communication

IRAC –Interdepartment Radio Advisory

Committee

IRS –Indian Remote-Sensing Satellite

ISAS —Institute for Space and Aeronautical Sciences (Japanese)

ISPM —International Solar Polar Mission

ISRO —Indian Space Research Organization

ITU –International Telecommunication

Union

JEA –Joint Endeavor Agreement

(NASA)

kHz

LACIE

Landsat

LDC

LEO

MARl SAT

MELCO

METEOSAT

M Hz

MITI

MLA

MOS

M OU

MPS

MPTS

MSS

N-1 & II

NACA

NACP

NACPWG

NAS

NASA

NAS Act

NASDA

NATO

NEC

NESDIS

NIEO

NOAA

N-ROSS

–kilohertz (1 ,000 cycles per

second)

–Large Area Crop Inventory Experiment

–land remote-sensing satellite

system

–less developed country

–low-Earth orbit (up to approximately .SOO km)

–International Maritime Satellite

Organization

–Mitsubishi Electric Co.

—meteorological satellite developed by ESA

—megahertz (1 Ob cycles per

second)

–Ministry of International Trade

and Industry (Japan)

—multispectral-li near array (solid

state)

–Maritime Observation Satellite

(Japan)

–Memorandum of Understanding

—materials processing in space

—microwave power transmission

system

—multispectral scanner (on

Landsat)

–Expendable launch vehicles developed by NASDA

–National Advisory Committee for

Aeronautics

–North Atlantic Consultative

Process

—North Atlantic Consultative Process (NACP) and its working

groups

—National Academy of Sciences

–National Aeronautics and Space

Administration

–National Aeronautics and Space

Act of 1958

—National Space Development

Agency (Japan)

–North Atlantic Treaty Organization

–Nippon Electric Corp.

–National Environmental Satellite,

Data, and Information Service

—New International Economic

Order

—National Oceanic and Atmospheric Administration

–Navy Remote Ocean Sensing Satellite
458 “ International Cooperation and Competition in Civilian Space Activities

NSF

NTIA

N T T

NWIO

OAS

Ocl

O DA

OECD

OES

OMB

ORB-85

OSAD

OTA

OTRAG

PAM

PRC

PRC (Space)

PROTON

PTT

RARC

RESTEC

RF

R&D

—National Science Foundation

—National Telecommunications

and Information Agency (DOC)

–Nippon Telegraph & Telephone

Co. (public corporation for Japanese communications)

–New World International Order

–Organization of American States

–Ocean Color Imager

—official development assistance

–Organization for Economic Cooperation and Development

—Bureau of Oceans and Environmental and Scientific Affairs, Department of State

–Office of Management and

Budget

—1 985 meeting of the ITU to consider use of the geostationary

orbit

–U. N. Outer Space Affairs Division

–Office of Technology Assessment

–Orbital Transport und Raketen

Aktiengesellschaft (German private firm)

–Payload Assist Module used to

boost satellites into GSO from

the main launch vehicle

–People’s Republic of China

—Policy Review Committee on

Space established by Presidential

directive in May 1978

—expendable launch vehicle of the

U.S.S.R.

–post, telephone, and telegraph

administrations

–Regional Administrative Radio

Conference

–Remote Sensing Technology Center (Japan)

—radio frequency

—research and development

RMS-Canadarm–Remote Manipulator System developed by SPAR Aerospace for

use on the U.S. Shuttle

SALYUT —U.S.S.R. space station

SBS –Satellite Business System

SCOUT —small expendable launch vehicle

developed for NASA by LTV

SIG (Space) –Senior Interagency Group-Space

(within White House)

SITE —Satellite Instructional Television

Experiment (India)

SKYLAB –U.S. space laboratory, placed in

orbit in the early 197os and now

disintegrated

SLAR —side looking airborne radar

Solaris –proposed French free-flying, automated, industrial processing

station

SPACE LAB —space laboratory which fits into

the shuttle’s cargo bay and was

developed as part of a cooperative project with ESA and NASA

SPAS –Shuttle Pallet Satellite (a deployable carrier developed by MBB

and first flown aboard the space

shuttle in 1983)

SPOT –SystSme Probetoire Observation

de la Terre (French land remotesensing system)

SPOT IMAGE —semi-private French organization

responsible for production, operations, marketing, and sales of

SPOT services

SSTDMA —satellite switched time division

multiple access

SSTO —single stage to orbit space vehicle

STS –U.S. Space Transportation System

TAT —transatlantic telephone, designation given to a series of undersea

communication cable facilities

TDMA —time division multiple access

TDRSS –Tracking and Data Relay Satellite

System

TEA –Technical Exchange Agreement

TITAN –DOD expendable launch vehicle

TM –thematic mapper (on Landsat)

TVRO –television receive only

U.K. –United Kingdom

U.N. –United Nations

UNCSTD-U. N. –Conference on Science, Technology, and Development

UNDP –U. N. Development Program

UNDRO –U. N. Disaster Relief Organization

UNEP –U. N. Environment Program

UNESCO –U. N. Education Science and Cultural Organization

UNGA –U.N. General Assembly

UN ISPACE ’82 –1 982 U.N. Conference on the Exploration and Peaceful Uses of

Outer Space

USDA –U.S. Department of Agriculture

USGS –U.S. Geological Survey (DOI)

Uslscs —U.S. international service carriers

USTTI –U.S. Telecommunications Training Institute
App. E—Glossary of Acronyms ● 459

VAN —value-added networks W M O —World Meteorological OrganizaVHF —very high frequency tion (U. N. Agency)

WARC –World Administrative Radio Con- Wul –Western Union International,

ference (conducted by ITU) Inc., subsidiary of MCI CommuW H O —World Health Organization nications Corp.

WIPO –World Intellectual Property Organization
Index
Index

ACTS. See Advanced Communications Technology Satellite Program.

Advanced Communications Technology Satellite (ACTS) Program, 13, 149, 164, 193-198, 206-207

Advanced research and development, 12-13, 193-198

Advanced Television and Infrared Observation Satellite

(TIROS), 253, 258-260, 312

Advanced Very-High Resolution Radiometer (AVHRR), 259,

270

Aerojet-General, 119

Aerojet Tech Systems, 109

Aerospatiale, 60, 73, 272, 292

Agreement Governing the Activities of States on the Moon

and Other Celestial Bodies, 47

Agreement on the Rescue of Astronauts, the Return of Astronauts, and the Return of Objects Launched Into

Outer Space, 46

AID. See U.S. Agency for International Development.

Al D/SAT, 41, 179

Air Force, 10, 106, 107, 109, 121

Alcatel-Thompson/Telspace, 165

Apogee and Maneuvering Stage (AMS), 109

AMS. See Apogee Maneuvering Stage.

Apollo-Soyuz Test Project (ASTP), 39, 350, 377

Arabsat, 60, 181, 190, 200

ARGOS Data Collection System, 259, 266, 312

Ariane, 5, 8, 10, 71, 75, 110-111, 116, 122, 124, 126,

128-133, 135

Arianespace, S. A., 8, 73, 87, 116, 126, 129-135, 390

ASLV launch vehicle, 120

ASTP. See Apollo-Soyuz Test Project.

Astro-C, 384

Astrotech Space Operations, 109

AT&T, 89, 91, 104, 155, 160, 185

AT&T Communications, 154

Atlas-Centaur launch vehicles, 105-106, 120, 124, 132, 138

ATS-6 communications satellite, 38, 39, 41, 179

AVHRR. See Advanced Very-High Resolution Radiometer.

Ball Aerospace, 357

Ball Bros., 389, 390

Battelle, 124, 126-127

Beggs, James M., 130, 135

Bilateral cooperation, 28

developing countries, 59, 179-180

materials processing in space, 352

meteorological remote sensing, 264-265

National Aeronautics and Space Administration activities,

36, 39-40

satellite communications, 169-170, 179-180, 203, 204

space transportation activities, 119-120, 138

trade related, 11, 85, 89, 190

Biorack, 349

Black Brant sounding rocket, 122

BoB. See Bureau of the Budget.

Boeing, 107, 121, 389, 390

Brasilsat, 190

Brazil, 41, 120, 125, 190, 285

Bristol Aerospace Ltd., 87, 122

British Aerospace, 51, 390

British Telecom, 156, 160

BTM, 349

Bureau of the Budget (BoB), 2, 286

Business data services, 167

Cable & Wireless, Ltd., 154, 159, 186, 187

Cable facilities, 14, 91, 123, 149, 152, 154, 159, 176-177,

185-187, 201-203

California Microwave, 166, 167

Canada, 37, 44

remote sensing activities, 16, 39, 266, 277, 292-293,

306-307, 310

satellite communications activities, 161, 163, 179

space station activities, 40

space transportation activities, 122

Canada Centre for Remote Sensing, 284

Carriers, 340

Centaur G, 109, 121, 122

Center for Telecommunications Development, 178

Centre National d’Etudes Spatiales (CNES), 73-74, 111,284,

352

China, 39, 59, 120, 125, 261, 378

ClTEL, 171

Citicorp, 90, 155

CNES. See Centre National d’Etudes Spatiales.

Coastal Zone Color Scanner (CZCS), 303, 304, 308

Columbia University, 366

Commercial competition

Federal agency role, 416

INTELSAT and, 6, 8, 11, 13, 91, 148, 149, 161, 180-184,

198-200, 202-203

international trading rules, 83, 85-86

leadership in, 405

materials processing in space, 94-95

policy options, 403-407

political transition factors, 95

remote sensing, 92-94

satellite communications, services, 89-92, 180-188

satellite equipment, 188-193, 205-206

space sciences equipment, 389-390

space transportation, 86-89, 125-136, 141-143

U.S. policy, 401-402

See a/so Competition; Market structure

Commercial cooperation, 60-61

Commercialization

Federal agency coordination, 415-416

land remote sensing, 14-15, 254, 257-258, 283, 284, 286,

288, 292-295, 299-301, 319-322

materials processing in space, 16, 17, 337, 343-347,

354-360, 362, 364

satellite communications advanced techology, 193-198

space transportation, 8-10, 103, 105-107, 109, 111, 116,

117, 119-122

Commercial Space Launch Act (Public Law 98-575), 10

463
464 ● International Cooperation and Competition in Civilian Space Activities

Committee on Earth Observation Satellites, 322

Committee on Scientific and Technological Aspects of

Materials Processing in Space (STAMPS), 347

Committee on the Peaceful Uses of Outer Space (COPUOS),

41, 44-47, 51, 52-53, 55-57, 366

Communications Research Center (CRC), 37

Communications Satellite Act of 1962 147, 148, 177, 417

Communications Satellite Corp. See COMSAT.

Communications Technology Satellite (CTS), 37, 179

Competition

cooperation and, 60-61, 413-414

description of, 3, 5-6

economic, 68-70, 95

European Space Agency program, 67, 70-73

Federal agency coordination, 416

French program, 73-75

government role in, 65-66

Japanese program, 77-83

land remote sensing, 14, 301, 319-322

materials processing in space, 16, 17, 94-95, 337, 363-365

meteorological remote sensing, 273, 275, 317, 319

military, 68, 69

overview, 26-27

policy options, 403-408

political, 66-69, 95

remote sensing, 92-94

satellite communications, 5-6, 10-12, 89-92, 149, 157-161,

167, 180-193

satellite equipment, 11-12, 162, 164, 167-168, 188-193,

205-206

space science, 19, 373-375, 386-390

space transportation applications, 8, 10, 86-89

U.S. policy, 21, 401-403

West German program, 75-77

See a/so Commercial competition; Market structure

COMSAT, 49, 51, 89, 148, 149, 154, 155, 168, 185, 193,

200-201, 273

COMSAT General Corp., 50, 51

Conestoga launch vehicles, 121

Continental Telephone, 155

Convention on International Liability for Damage Caused

by Space Objects, 46, 47

Convention on Registration of Objects Launched Into Outer

Space, 46-47

Cooperation

competition and, 60-61, 413-414

European Space Agency program, 43-44

Federal agency coordination, 416-417

issues in, 52-61

land remote sensing, 38, 294, 322-323

materials processing in space, 16, 17, 61, 352, 353, 358,

360-363, 365-367

meteorological remote sensing, 38, 43, 51-52, 61, 264,

266, 275, 277-278, 315-317

ocean remote sensing activities, 16, 61, 303, 307, 310,

313-314, 323-324

overview, 28

policy options, 21, 408-413

satellite communications, 13-14, 47-49, 148, 150, 168-180

Soviet program, 7, 28, 39, 41-43, 45-47, 173, 266, 352,

377-378, 381-384, 392-393

space science, 18-19, 61, 373-373, 375, 377-386

space transportation, 137-138

U.S. program, 6-7, 33, 35-41, 53-58, 60, 70

See a/so specific organizations.

COPUOS. See Committee on the Peaceful Uses of Outer

Space.

Cosmos satellites, 377, 378

COSPAS/SARSAT, 16, 39, 259, 266, 277, 316

CRC. See Communications Research Center.

Credit subsidies, 85-86, 191-192

Cryogenic fuels, 112

Crystals, 338, 355-356

CTS. See Communications Technology Satellite.

Customer-premises Earth stations, 166, 167-168

Cygnus, 182

CZCS. See Coastal Zone Color Scanner.

D’Allest, Frederic, 130

Data Collection System (DCS), 259-261

DBS. See Direct broadcast satellites.

DCS. See Data Collection System.

Defense Meteorological Satellite Program (DMSP), 315-316

Delta launch vehicles, 104-105, 119-121, 124, 132, 138

Delta Transfer Stage, 109, 121

Department of Agriculture, 20, 270, 286, 418

Department of Commerce, 15, 20, 21, 253, 288, 290-291,

418

Department of Defense (DOD), 35, 122, 137, 315-316

Department of Interior, 20, 286, 418

Department of State, 20, 21, 41, 47, 91, 410-411, 416, 417,

419

Department of Transportation (DOT), 20, 21, 126, 418-419

Developing countries

geostationary orbit allocation issue, 13, 48-49, 174-176

land remote sensing issues, 15, 293-294, 323

policy options toward, 7, 411-412

remote sensing activities, 15, 16, 41, 52, 273

satellite communications activities, 50, 150, 170-172,

177-180, 184, 208-209

satellite equipment trade, 86, 167, 191

space science activities, 19, 376, 386, 390-391

space technology development, 28, 40-41, 58-60

U.N. activities, 5, 55, 56

Direct broadcast satellites (DBS), 55, 73, 123

DMSP. See Defense Meteorological Satellite Program.

DOD. See Department of Defense.

Dolphin launch vehicles, 113, 121

Dornier, 349, 351

DOT. See Department of Transportation.

Dupont, 343, 357

Earth Radiation Budget Experiment (ERBE), 260

Earth remote sensing. See Land remote sensing.

Earth Resources Satellite Data Analysis Center (ERS-DAC), 81

Earth Resources Satellites (ERS), 285, 305, 310, 313

Earth stations, 164-168, 178, 179, 185, 191, 194

Economic competition, 68-70, 95
Index . 465

ECS. See European Communications Satellites.

Education and training, 38-39, 376-377

EEC. See European Economic Community.

Eisenhower, Dwight D., 35, 36

ELDO. See European Launcher Development Organization.

Electromagnetic services, 193

Electrophoresis, 354-355

ELV. See Expendable launch vehicles.

EOSAT Corp., 15, 288, 290, 291, 319-320

Equatorial Communications Co., 166, 168

ERBE. See Earth Radiation Budget Experiment.

EROS Data Center, Sioux Falls, SD, 41, 280, 285, 298, 299

ERS. See Earth Resources Satellites.

ERS-DAC. See Earth Resources Satellite Data Analysis Center.

ERSO. See European Space Research Organization.

ESA. See European Space Agency.

EURECA (European Retrievable Carrier), 348, 352, 358, 360

European Communications Satellites (ECS), 72

European Economic Community (EEC), 133, 167

European Launcher Development Organization (ELDO), 43,

70

See a/so European Space Agency

European Retrievable Carrier. See EURECA.

European Space Agency (ESA), 5, 27

competitive activities, 67, 70-73

cooperative activities, 28, 36-38, 43-44, 375, 381

developing country assistance, 59

formation of, 70-71

materials processing in space activities, 17, 76-77, 337,

347-349, 358, 360

meteorological remote sensing activities, 261, 272

ocean remote sensing activities, 16, 305-306, 310, 313,

314

satellite communications activities, 72-73, 163, 194

space science activities, 19, 375, 376, 381-385, 387

space transportation program, 67, 110-111, 116, 122,

128-134

European Space Research Organization (ERSO), 43, 67, 70

See a/so European Space Agency

Eutelsat, 166, 181, 200

Ex-lm Bank. See U.S. Export-import Bank.

Expendable Launch Vehicle Commercialization Act,

418-419

Expendable launch vehicles (ELVS). See Space transportation.

Export controls, 192-193

Export subsidies, 85-86, 191-192

Facilities regulation, 184-187, 202-203

Fairchild, 167, 292

Fairchild Industries, 341, 344, 345, 357-358, 360

FCC. See Federal Communications Commission.

Federal agency coordination, 20-21, 415-417

Federal agency responsibility, 414, 417-419

Federal Communications Commission (FCC)

satellite communications activities, 13-14, 91-92, 123, 147,

153, 154, 161, 181-183, 185, 186, 200-201, 203

space activities role, 20, 21, 410, 417

Federal Republic of Germany. See West Germany.

Fiber optics, 14, 91, 123, 152, 154, 159, 176-177, 186,

201-203

Finance Satellite, 182

First Materials Processing Test (FMPT), 352-353

Fisheries applications, 304, 312

Fluid Physics Module, 349

FMPT. See First Materials Processing Test.

Fokker, 349

Ford Aerospace, 60, 162-163

Ford Aerospace & Communications, 190

France

land remote sensing activities, 14, 283-284

materials processing in space activities, 352

meteorological satellite activities, 16, 39, 266, 277

ocean remote sensing, 303

sateIlite communications activities, 72, 73, 159, 163, 190,

194

Soviet cooperation, 41, 381-382

space program, 5, 66, 67, 73-75

space science activities, 19, 375, 381-382

space transportation activities, 67, 70, 71, 125

Free-flyers, 341, 351-353, 358-359

Frequency reuse techniques, 194

Fujitsu, 168

G-77. See Group of 77.

GaAs. See Gallium-arsenide crystals.

Gagarin, Yuri, 66

Gallium-arsenide (GaAs) crystals, 355-356

GARP. See Global Atmospheric Research Program.

GAS canisters. See Get-away special canisters.

GATT codes, 11, 85, 96, 190

GeneraI Dynamics, 10, 87, 105-106, 109, 120, 121

General Electric Corp., 90, 155, 270, 292

Geostationary Operational Meteorological Satellite (GOMS),

264

Geostationary orbit allocation, 13, 48-49, 173-177

Geostationary Orbiting Environmental Satellite (GOES) system, 253, 258, 260, 270, 272, 275, 317

Get-away special (GAS) canisters, 340, 351

Global Atmospheric Research Program (GARP), 52, 269

GOES system. See Geostationary Orbiting Environmental

Satellite system.

GOMS. See Geostationary Operational Meteorological

Satellite.

Government competitors

meteorological data, 275

space transportation, 87, 138-139, 142, 143

Government subsidies

materials processing in space, 364-365

policy issues, 401-402

policy options, 404-407

remote sensing, 93, 94, 291, 320-321

satellite communications, 205, 206

space transportation, 130-134, 141

Ground-based projects, 38

Ground-based sensors, 261

Ground stations and receivers, 272-273, 292-293

Group of 77 (G-77), 55, 57-59
466 ● International Cooperation and Competition in Civi/ian space Activities

Grumman, 389

GTE, 89, 154, 155, 167

GTI, 344-346, 357

Guidance systems, 113

Harris Corp., 166

Hermes, 110, 352

High-Resolution Infrared Sounder (H RIS-2), 270

Hitchhiker, 340, 358

Honeywell, Electro-optical Division, 343

House Committee on Science and Technology, 290

House Subcommittee on Natural Resources, Agriculture

Research, and Environment, 274

HRIS-2. See High-Resolution Infrared Sounder.

H series launch vehicles, 119-120

Hughes, 81, 114, 162, 389

Hughes Aircraft Corp., 13, 51, 162, 190, 193, 196, 270, 272,

292

Hughes Communications Galaxy, Inc., 195-196

Hybrid rockets, 113

IBM, 89, 155, 165

ICSU. See International Council of Scientific Unions.

IMCO. See Intergovernmental Maritime Consultative Organization.

IML. See International Microgravity Lab.

IMO. See International Meteorological Organization.

INCO Research & Development Center, Inc., 357

Independent Commission for Worldwide Telecommunications Development, 178

India

developing country assistance, 59

land remote sensing, 284-285

meteorological remote sensing, 261

satellite communications activities, 38, 58

Soviet cooperation, 28, 41, 382

space science activities, 382

space transportation activities, 120, 125

Indonesia, 41

Inertial guidance systems, 114

Inertial upper stage (IUS), 107, 109, 121, 122

Infrared Astronomical Satellite (IRAS), 18, 382-383

INMARSAT (International Maritime Satellite Organization),

6-8, 50-51, 117, 124, 172-173, 192

Insat 1, 261

Institute of Space and Aeronautical Sciences (ISAS), 117,

375, 388

Instrumentation Technology Associates, Inc. (ITA), 357

INTELSAT (International Telecommunications Satellite Organization)

competition and, 6, 8, 11, 13, 91, 148, 149, 161, 180-184,

198-200, 202-203

developing country assistance, 177-178

satellite operations, 114, 123, 154, 162-163, 167

U.S. participation issues, 11, 13, 172, 173

INTELSAT Agreement of 1973, 147, 180, 181

Intercosmos, 42-43, 67-68, 381

Intergovernmental Agreement on Cooperation in the Exploration and Use of Outer Space for Peaceful Purposes,

377, 392

Intergovernmental Maritime Consultative Organization

(lMCO), 50

International Astronautical Federation, 42

International Council of Scientific Unions (ICSU), 52

International Halley Watch, 18, 39, 40, 383-384

International Maritime Satellite Organization. See INMARSAT.

International Meteorological Organization (lMO), 51 See

a/so World Meteorological Organization

International Microgravity Lab (lML), 17, 362, 365

International organizations politicization, 68, 150, 170-173,

207-208, 411-412

International Polar-Orbiting Meteorological Satellite (l POMS)

group, 316

International Solar Polar Mission (ISPM), 18-19, 384

International Telecommunications Satellite Organization.

See INTELSAT.

International Telecommunication Union (ITU), 7, 13-14,

47-49, 57-58, 170-171, 178, 207-208

ITU Region 2 Regional Administrative Radio Conferences,

171

International trade

materials processing in space and, 365

policy options, 405, 407, 408

sateIlite equipment, 83, 85-86, 89, 95, 188-193, 205-206

U.S. policy, 401-402

International trading rules satellite services, 86, 89, 149,

180-188

Intersputnik, 42, 67-68

IPOMS. See International Polar-Orbiting Meteorological

Satellite group.

IRAS. See Infrared Astronomical Satellite.

IRIS. See Italian Research Interim Stage.

IRS, 284-285

ISAS. See Institute of Space and Aeronautical Sciences.

ISPM. See International Solar Power Mission.

ITA. See Instrumentation Technology Associates, Inc.

Italian Research Interim Stage (IRIS), 122

Italy, 72, 73, 122, 163, 194

ITT, 89, 155, 166, 192

ITU. See International Telecommunication Union.

IUS. See Inertial upper stage.

Japan

competitive activities, 5, 85

developing country assistance, 59

land remote sensing activities, 81, 285

materials processing in space activities, 17, 352-353, 365

meteorological remote sensing activities, 78, 80, 261, 272

ocean remote sensing activities, 16, 81, 305, 314

satellite communications activities, 11, 80-81, 160, 162,

163, 165, 167, 168, 190-191, 194, 205

space program, 5, 66, 77-83

space science activities, 19, 28, 78, 375, 383, 384, 387-388

space station activities, 40

space transportation, 8, 80, 117, 119-120, 125, 138

japanese National Research Institute for Metals, 37

JEA. See Joint Endeavor Agreements.

John Deere & Co., 343, 356

Johnson, Lyndon B., 35
/ndex ● 467

Joint Endeavor Agreements (JEA), 6, 343-346, 354-355,

357-358, 364

Ka-band systems, 12-13, 81, 175, 176, 193-197

Kaiser-Threde, 351

KDD. See Kokusai Denshin Denwa.

Kennedy, John F., 66

Kodak/Fairchild, 288, 290

Kokusai Denshin Denwa (KDD), 156

Kosmos, 307

Lambda rockets, 117

Land remote sensing

applications, 258, 301

commercial cooperation, 60-61

commercialization, 14, 15, 254, 257-258, 283, 284, 286,

288, 292-295, 299-301, 319-322

competition, 14, 301, 319-322

cooperation, 38, 294, 322-323

data products and uses, 285, 293-295, 299-301

development of, 278

equipment market, 292-293, 323

foreign receiving stations, 280, 282

foreign systems, 282-285

international role, 291-292

market structure, 93-94, 285, 293-295, 299-301

overview, 14-15, 253

policy options, 15, 319-323

private sector, 14-15, 93, 254, 257, 283, 284, 286, 288,

292-294, 301, 319-322

research and development, 280, 290, 294, 301, 321

U.S. policy, 286, 288-291

U.S. system, 253, 278-280

Land Remote Sensing Commercialization Act of 1984 (Public

Law 98-365), 15, 257, 282, 289-290, 294, 321, 418

Landsat applications, 258

Landsat Ground Station Operators Working Groups, 322

Landsat system, 28, 41, 52, 94, 308, 309

data products, 285, 293-295, 299-301

description, 253, 278-280

Federal agency coordination, 415

foreign receiving stations, 38, 280, 282

international role, 291-292

issues, 293-301

overview, 14-15

private sector transfer, 93, 254, 257, 286, 288, 293-294,

319-322

satellite 4 repair, 322

Launch vehicles. See Space transportation.

Leadership competition

cooperative activities and, 409

Federal agency coordination, 414-419

materials in space processing, 362

policy options, 404-405

space science, 387, 393

space transportation, 136, 138, 141

U.S. policy, 402

Leasecraft, 341, 345, 358, 360

Life sciences, 372, 377, 378, 387, 392

Liquid Propulsion Module (LPM), 109

Liquid rockets, 112-114

Lodge, Henry Cabot, 45

Long March launch vehicles, 120

LPM. See Liquid Propulsion Module.

M/A Corn, 166

MacDonald Dettwiler Association, Inc., 273, 292-293

McCormack, John W., 35

McDonnell Douglas, 89, 94, 105, 107, 109, 119, 155, 344

McDonnell Douglas Astronautics Co. (MDAC), 121, 344,

346, 354-355, 358, 360

Maitland Commission, 178

Marec satellites, 71, 72

Marine Observation Satellite (MOS-1 ), 305

Marine transportation applications, 310

Market structure

Earth stations, 164-167

land remote sensing, 93-94, 285, 292-295, 299-301

materials processing in space, 94-95, 360, 362

meteorological remote sensing, 93, 270

satellite communications services, 89-92, 147-148,

153-160

satellite equipment, 162-163

space science related industries, 389-390

space transportation, 86-89

Martin Marietta, 10, 87, 106, 109, 121, 344, 345

Materials processing in space (MPS)

application potential, 338, 354-360

commercialization, 16, 17, 337, 343-347, 354-360, 362,

364

competition, 16, 17, 94-95, 337, 363-365

cooperative activities, 16, 17, 61, 352, 353, 358, 360-363,

365-367

European Space Agency activities, 17, 76-77, 337,

347-349, 358, 360

Federal agency responsibility, 419

France r 352

Japan, 17, 352-353, 365

launch service demand, 124

leadership role, 362

market structure, 94-95, 360, 362

NASA research, 16, 17, 94, 337-344, 347, 348, 352-358,

360-366, 419

overview, 16-17, 337

policy options, 362-365

private sector, 337, 343-347, 354-358, 363-365

research and development, 16-17, 76-77, 337

scientific community involvement, 347, 363-364, 366

Soviet Union, 17, 353-354

West German activities, 76-77, 337, 341, 348-352, 358,

361

Materials Sciences Double Rack, 349

Matra, 73, 292, 349, 390

Matsushita, 168

MAUS, 351, 358, 361

MBB. See Messerschmitt-Boelkow-Blohm GmbH.

MBB/ERNO, 341, 348, 349, 351-352, 358, 361

MCI, 89, 154, 155

MDAC. See McDonnell Douglas Astronautics Co.

MEPHISTO (Materiel pour I’Etude des Phenomenes lnteressant de la Solidification sur Terre et en Orbite), 352

Merrill Lynch, 90, 155
4W ● /nternatjona/ cooperation and competition in Civilian Space Activities

MESA, 390

Messerschmitt-Boelkow-Blohm GmbH (MBB), 273, 283, 358

METEOR-2, 261

Meteorological remote sensing

applications, 257-258

competition, 273, 275, 317, 319

cooperative activities, 38, 43, 51-52, 61, 264, 266, 275,

277-278, 315-317

data products and service, 266, 269-270, 274

foreign systems, 260-261, 264

japan, 78, 80, 261, 272

market structure, 93, 270, 272-273

ocean measurements, 305

overview, 15-16

policy options, 16, 315-319

private sector, 15, 273-275

research and development, 258, 260

service level issue, 275, 277

U.S. systems, 253, 258

Meteor satellites, 43

Meteosat-2, 261, 272

Metsats (meteorological satellites). See Meteorological remote sensing.

Microgravity Research Associates (MRA), 344-346, 355

Microgravity Science and Applications (MSA) Division, 338

Microwave sounders, 258, 266, 309

Military competition, 68, 69

Mission-peculiar support structure (MPESS), 340

MitsubishilCOMSAT, 168

Mitsubishi Electric, 190

Mitsubishi Industries, 119

Mitterrand, Francois, 73

MLA. See Multispectral linear array.

Modular Optoelectronic Multispectral Scanner (MOMS), 283

Molniya satellites, 42

MOMS. See Modular Optoelectronic Multispectral Scanner.

MOS-1. See Marine Observation Satellite.

Motorola, 193

MPESS. See Mission-peculiar support structure.

MPS. See Materials processing in space.

MRA. See Microgravity Research Associates.

MSA Division. See Microgravity Science and Applications

Division.

Mu launchers, 117, 119

Multilateral cooperation

developing country assistance, 59-60, 177-179

meteorological remote sensing, 264-265

satellite communic~tions related, 177-179, 204

Soviet, 41-43

trade rules, 85-86, 89

See a/so specific organizations.

Multilateral coordination

land remote sensing, 322-323

Multispectral camera, 43

Multispectral linear array (MLA), 280, 284

NACP. See North Atlantic Consultative Process.

NASA. See National Aeronautics and Space Administration,

NAS Act. See National Aeronautics and Space Act.

NASC. See National Aeronautics and Space Council.

NASDA. See National Space Development Agency.

National Advisory Committee for Aeronautics, 35. See a/so

National Aeronautics and Space Administration.

National Aeronautics and Space Act of 1958 (NAS Act),

20-21, 25, 33, 35-36, 141, 397, 399, 414

National Aeronautics and Space Administration (NASA)

cooperative activities, 7, 21, 28, 33, 36-40, 44, 137, 352,

353, 361, 366

land remote sensing activities, 14, 15,278,280,286-288,

301, 321, 418

materials processing in space activities, 16, 17, 94,

337-344, 347, 348, 352-358, 360-366, 419

meteorological remote sensing activities, 273

ocean remote sensing activities, 16, 302-304, 307, 324

private sector cooperation, 6

satellite communications activities, 12-13, 149-150, 163,

164, 174, 193-198, 417, 418

space activities role, 20-21, 397, 410, 414-41

space science, 371, 372, 376, 378, 380, 384, 385

space transportation activities, 8-10, 87, 88, 103-109,

120-122, 126, 128-136, 138-139, 142, 143, 418

National Aeronautics and Space Council (NASC), 399

National Commission on Space, 19-20, 400

National Oceanic and Atmospheric Administration (NOAA)

land remote sensing activities, 14, 15, 253,280, 282,295,

301, 321, 322, 418

meteorological remote sensing activities, 93, 253, 258,

264, 266, 270, 273-275, 277, 316

ocean remote sensing activities, 16, 304, 305, 313, 324

remote sensing systems, 253

space activities role, 7, 28, 33, 410

National Oceanic Satellite System (NOSS), 302

National Research Council, 347

National Research Council of Canada, 107

National space Development Agency (NASDA), Japan, 28,

117, 119

National Weather Service (NWS), 269-270

Navy Remote Ocean Sensing Satellite (N ROSS), 16, 303,

305, 313

NEC. See Nippon Electric Co.

Netherlands, 37-38, 383

Netherlands’ Delft Technical Institute, 37-38

Nimbus satellites, 303, 304, 308

Nippon Electric Co. (NEC), 80-81, 165, 167, 168, 191

Nippon Telegraph & Telephone (Nl_l_), 80,81,85, 190, 191

Nissan Motors, 117

NOAA. See National Oceanic and Atmospheric Administration.

NOAA satellites, 258, 259, 272, 309

North Atlantic Consultative Process (NACP), 173, 186

NOSS. See National Oceanic Satellite System.

NROSS. See Navy Remote Ocean Sensing Satellite.

N series launch vehicles, 119

NTT. See Nippon Telegraph & Telephone,

NWS. See National Weather Service.

Oberth Society, 351

Ocean color data, 304, 308, 312

Ocean Color Imager (OCI), 260
Index ● 4 6 9

Ocean remote sensing

applications, 258, 304, 310-312

cooperative activities, 16, 61, 303, 307, 310, 313-314,

323-324

data potential, 307-310

foreign systems, 305-307

issues, 312-314

overview, 16, 253-254

policy options, 323-324

research and development, 312-313, 324

U.S. systems, 302-305

OCI. See Ocean Color Imager.

Odetics, Inc., 292

OECD. See Organization for Economic Cooperation and Development.

Office of Commercial Programs, 337

Office of Management and Budget (OMB), 134, 140, 193,

280, 286, 291, 298, 320, 399

Office of Space and Terrestrial Applications, 361

Office of the U.S. Trade Representative, 131

Offshore mining applications, 310

Oil and gas exploration and extraction applications, 310

OMB. See Office of Management and Budget.

ORB’85, 13, 48-49, 173

Orbital Sciences Corp., 87, 109

Organization for Economic Cooperation and Development

(OECD), 85, 86, 97-98, 173, 191

OECD Arrangement on Officially Supported Export Credit,

85, 86, 97-98, 191

OECD Understanding on Export Credits for Ground Satellite Communication Stations, 191

Orion Satellite Corp., 154, 182, 184

Ortho Pharmaceutical, 94, 355

OSAD. See Outer Space Affairs Division.

OTRAG (Orbital Transport-u nd-Raketen Aktiengesellschaft),

87, 122

Outer Space Affairs Division (OSAD), 55

Page, 166

Palapa, 181

PAM. See Payload assist modules.

Pan American Satellite, 182

Payload assist modules (PAM), 107, 109, 121, 122

Peace-Sat Network, 41

PEFCO. See Private Export Funding Corp.

People’s Republic of China. See China.

Perkin-Elmer { 390

Peru, 41

Pharmaceuticals, 354-356

Philippines, 41

Physics and astronomy, 371, 372

Planetary exploration, 371-372, 377, 387, 393

Polar-orbiting meteorological systems, 253, 258, 259, 272,

275-277, 315-317

Polar-orbiting platform, 314, 324

Policy

competition, 21, 400-408

cooperation-competition relationship, 413-414

developing country assistance, 7, 411-412

goals and objectives, 19-20, 399-400

land remote sensing, 286, 288-291

leadership maintenance and, 414-419

problems, 397-398

regulatory framework, 397

remote sensing, 254, 257

satellite communications, 147, 149-150, 168-169

space transportation, 138-139

Policy options

competition, 403-408

cooperation, 21, 408-413

Federal agency coordination, 20-21, 415-417

Federal agency responsibilities, 414, 417-419

land remote sensing, 15, 319-323

materials processing in spacer 362-365

meteorological remote sensing, 16, 315-319

ocean remote sensing, 323-324

satellite communications, 198-210

space transportation, 127-128, 140-143

Political competition, 66-69, 95

Post, telephone, and telegraph agencies (PTTs), 11, 85, 90,

91, 148, 155-156, 159, 161, 163, 167, 187-188, 190

Preeminence. See Leadership competition.

Private Export Funding Corp. (PEFCO), 133

Private sector

Federal agency coordination, 21

land remote sensing activities, 14-15, 93, 254, 257, 283,

284, 288, 290-294, 301, 319-322

materials processing in space activities, 337, 343-347,

354-358, 363-365

meteorological remote sensing activities, 15, 273-275

ocean remote sensing activities, 16

research and development, 6, 194-195, 197, 206, 207,

401-402, 406, 407

satellite communications activities, 6, 89, 90, 149, 161,

180-184, 198-200

space activity role, 6, 27, 65

space transportation activities, 8-10, 120-123, 125-126,

129, 131, 132, 136, 138-139, 141-143

U.S. treaty obligations and, 47

Propulsion systems, 172-173

Proton launchers, 116-117

PSLV launch vehicles, 120

PITs. See Post, telephone, and telegraph agencies.

Quistgaard, Erik, 132

Radarsat, 306-307, 310

R&D. See Research and development.

RCA, 89, 154, 155, 162-163, 166, 182, 193, 292

RCA Astro-Electronics, 270

Reagan, Ronald, 8, 125-126, 137-138, 141-142, 183, 274,

384-385

Remote sensing

applications, 257-258

commercial cooperation, 60-61

competition, 92-94

developing countries, 15, 16, 41, 52, 273

Federal agency responsibility, 418

foreign ground stations, 38

Japan, 81
470 . International Cooperation and Competition in Civilian Space Activities

market structure, 92-94

policy, 254, 257

Soviet, 43

systems, 253-254

See a/so Land remote sensing; Meteorological remote

sensing; Ocean remote sensing.

Research and development (R&D)

Japan, 78

land remote sensing, 280, 290, 294, 301, 321

materials processing in space, 16-17, 76-77, 337

meteorological remote sensing, 258, 260

ocean remote sensing, 312-313, 324

policy options, 404, 406, 407, 415

private sector, 6, 194-195, 197, 206, 207, 401-402, 406,

407

remote sensing, 15

satellite communications, 149-150, 163, 193-198, 206-207

satellite equipment, 163-164, 206-207

trade subsidy factors, 85, 401-403

U.S. policy, 402-403

See a/so Space science.

Rockwell International, 106, 126-127, 134

Rural Satellite Program, 41

SACI, 41

Salyut space station, 42, 43, 352, 353, 381

Sapwood-A launchers, 116

SAR. See Synthetic Aperture Radar.

Satellite communications

commercial cooperation, 60

commercialization, 193-198

competition, 5-6, 10-12, 89-92, 149, 157-161, 167,

180-193

cooperation, 13-14, 47-49, 148, 150, 168-180

demand for, 11, 150-153

developing country assistance, 50, 150, 170-172, 177-180,

184, 208-209

domestic market competition, 157-160

facilities regulation issues, 184-187, 201-203

Federal agency responsibilities, 417-418

foreign market competition, 160-161

Japan, 11, 80-81, 156, 160, 162, 163, 165, 167, 168,

190-191, 194, 205

launch service demand, 122-124

market structure, 89-92, 147-148, 153-160

policy issues, 147, 149-150, 168-169

policy options, 198-210

private sector activities, 6, 89, 90, 149, 161, 180-184,

198-200

research and development, 12-13, 149-150, 163, 193-198,

206-207

trade issues, 180-188

U.S. providers, 187-188, 203-204

Satellite equipment

competition, 11-12, 162, 164, 167-168, 188-193, 205-206

land remote sensing, 292-293, 323

market structures, 162-163

meteorological satellites, 270-273

research and development, 163-164, 206-207

space science, 389-390

trade issues, 188-193, 205-206

Satellite Instructional Television Experiment (SITE), 38,41,58

Satellite switched time division multiple access (SSTDMA),

194

SBUR. See Solar Backscatter Ultraviolet Radiometer.

Scanning spot beams, 194, 196

Science Working Groups, 366

Scientific Atlanta, 166, 167

Sea ice data, 308-310

Search and Rescue Satellite System. See COSPAS/SARSAT.

Sea surface temperature (SST) data, 270, 307-308, 312

Seasat, 16, 302, 303, 310

SEM. See Space Environment Monitor.

Senate Committee on Commerce, Science, and Transportation, 290

Senate Committee on Foreign Relations, 39

Senate Subcommittee on Science, Technology, and Space,

274

Senior Interagency Group for Space (SIG space), 19, 399,

418

Sensor development, 280, 283, 324

SEP, 73, 273, 292

Shell Oil, 90, 155

Shuttle, 8, 122, 124

cooperative activities, 33, 44, 70, 137

description, 106, 126

materials processing in space activities, 339, 340, 348, 357,

361-362, 364

policy options, 10, 140-143

prices, 9-10, 128-136

upper stages, 107, 109

use policy, 138-139

Shuttle Pallet Satellite (SPAS), 341, 351-352, 358, 361

SIG space. See Senior Interagency Group for Space.

SITE. See Satellite Instructional Television Experiment.

SLC. See Submarine Lightwave Cable Co.

SLV-3 launch vehicle, 120

Solar Backscatter Ultraviolet Radiometer (SBUR), 260

Solaris, 352

Solid rockets, 112-114

Sonda launch vehicles, 12o

Sounding rockets, 17, 38, 117, 122, 349

Soviet Union

competitive activities, 6, 66-68

cooperative activities, 7, 28, 39, 41-43, 45-47, 173, 266,

352, 377-378, 381-384, 392-393

materials processing in space activities, 17, 352-354

meteorological satellite activities, 16, 41, 43, 261, 264, 266

ocean remote sensing, 302, 307

remote sensing activities, 43

satellite communications activities, 42, 173

space program, 65, 66-68

space science activities, 19, 41, 373-375, 377-378,

381-384, 386, 387, 392-393

space transportation, 116-117

Space America, 288

Spaceco Ltd., 344, 345

Space Environment Monitor (SEM), 259, 260
Index . 471

Space expenditures, 65-66, 73, 75, 81

Spacelab, 5, 28, 44, 71, 341, 348, 349, 351, 352, 361, 362,

364, 409

Space science

competition, 19, 373-375, 386-390

cooperation, 18-19, 61, 372-373, 375, 377-386

future role, 391-392

issues, 375-377

leadership in, 387, 393

overview, 371-372

policy options, 392-393

programs, 382-384

Space Services Inc. (SS1), 87, 121

Space Shuttle. See Shuttle.

Space station program, 40, 314, 343-344, 353, 409

Space Task Group (STG), 137

Space telescope (ST), 384, 390

Space Telescope Science Institute, 384

Space transportation

Ariane program, 110-111, 116

buyers, 122-124

commercialization, 8-10, 103, 105-107, 109, 111, 116,

117, 119-122

competition, 8, 10, 86-89, 125-136

cooperative activities, 137-138

demand for, 123-124, 126-128

Federal agency responsibility, 20, 21, 418-419

Japan, 19, 28, 78, 375, 383, 384, 387

launch vehicle technology, 112-114

leadership in, 136, 138, 141

market structure, 86-89

National Aeronautics and Space Administration launch

vehicles, 103-109

policy options, 127-128, 140-143

potential government sellers, 116-120

potential private sellers, 120-122

pricing issue, 129-134

private sector, 8-10, 120-123, 125-126, 129, 131, 132, 136,

138-139, 141-143

trade rules, 89

U.S. policy, 138-139

Space transportation competition

demand, 123-124, 126-128

development of, 125-126

effects of, 134-136

nature of, 128-134

Space WARC. See World Administrative Radio Conference.

SPAR Aerospace, 107, 163, 190

Spartan, 341

SPARX, 283

SPAS. See Shuttle Pallet Satellite.

SPOT (Systeme Probetoire d’Observation de la Terre), 14,

27, 60, 75, 93-94, 283-284, 292-293

SPOT Image Corp., 284

SPOT Image, S. A., 73, 93, 94, 284

SS1. See Space Services Inc.

SST. See Sea surface temperature data.

SSTDMA. See Satellite switched time division multiple

access.

ST. See Space telescope.

STAMPS. See Committee on Scientific and Technological

Aspects of Materials Processing in Space.

Starstruck, Inc., 87, 113, 121

State of Alaska Medical Network, 41

Statsionar satellites, 42

StenGeck Reassurance Co., Inc., 283

STG. See Space Task Group.

Stockman, David, 135

Stratospheric Sounding Unit, 258, 266

Submarine Lightwave Cable Co. (SLC), 154, 186

Subsidized credit, 85-86, 191-192

Support systems, 113-114

Sweden, 349, 351, 39o

Synthetic Aperture Radar (SAR), 309-310

Systeme Probetoire d’Observation de la Terre (SPOT). See

SPOT.

Tanks, 113-114

TCI. See Transpace Carriers, Inc.

TEA. See Technical Exchange Agreements.

Technical Exchange Agreements (TEA), 343, 356-357

Technology transfer

cooperation and competition risks, 60

developing countries and, 28

materials processing in space, 61

private sector and, 41s

remote sensing, 273, 277, 278, 317

satellite communications, 173

space science, 393

Telecommunications. See Satellite communications.

Teledyne Brown Engineering, 340, 357

Telefunken, 390

Telesat Canada, 154

Television receive-only (TVRO) Earth stations, 166, 168

Texas Instruments, 90, 155

TEXUS, 349, 351

Thant, U, 46

Thomson-CSF, 73

3M Corp., 344, 345

TIROS. See Advanced Television and Infrared Observation

Satellite.

TIROS Operational Vertical Sounder (TOVS), 259

Titan launch vehicles, 10, 106, 113, 121, 138

TOPEX/POSEIDON, 303

TOS. See Transfer Orbit Stage.

TOVS. See TIROS Operational Vertical Sounder.

Transatlantic systems, 11, 13, 91, 128-184, 202-203

Transfer Orbit Stage (TOS), 109, 121, 122

Transpace Carriers, Inc. (TCI), 87, 89, 120-121, 131-132

Treaty on Outer Space (Treaty on Principles Governing the

Activities of States in the Exploration and Use of Outer Space, Including the Moon and Other Celestial

Bodies), 44, 46, 47, 288, 292

TRW, 193, 389

TVROS. See Television receive-only Earth stations.

Unisat satellite, 160

UN ISPACE ’82, 7, 49, 53, 366, 390-391

United Brands, 89, 155, 182
472 ● International Cooperation and Competition in Civi/ian Space Activities

United Kingdom, 71-73, 90, 91, 156, 159, 160, 163, 258,

266, 375, 384

United Nations, 44, 51-58, 60, 170-171. See a/so Committee on the Peaceful Uses of Outer Space; International

Telecommunication Union; world Meteorological

Organization.

Universities Space Research Association (USRA), 347

University of Bern, Switzerland, 37

University of Hawaii, 41

University of West Indies, 41

Upper stages, 107-109, 114, 121-122

U.S. Agency for International Development (AID)

international cooperation activities, 7, 28, 33, 39-41, 180,

209, 273

U.S. Data Communications System, 266

U.S. Export-Import Bank (Ex-lm), 133, 134, 192, 206

U.S. Geological Survey, 41

U.S.-Japanese Agreement on Space Activities, 119

U.S. Navy, 16, 303, 305

USRA. See Universities Space Research Association.

U.S.S.R. See Soviet Union.

U.S. Telecommunications Training Institute (USTTI), 59,

179-180, 412

U.S. Thiokol, 119

U.S. Trade Act of 1974, 131

USTTI. See U.S. Telecommunications Training Institute.

Value-added services, 257, 264, 274-275, 293-294, 299-301

317, 321-323

VAS. See Visible Atmospheric Sounder.

Visible and Infrared Spin-Scan Radiometer (VISSR), 260,270

Visible Atmospheric Sounder (VAS), 260

VISSR. See Visible and Infrared Spin-Scan Radiometer.

Von Braun, Wernher, 66

Wave height data, 310, 312

Weather data products, 266, 269, 310

Western Union Telegraph Co., 89, 154, 155, 174, 175

West Germany

land remote sensing, 283

materials processing in space activities, 76-77, 337, 341,

348-352, 358, 361

satellite communications activities, 72, 73, 163, 194

Spacelab activities, 5, 71, 7S

Space program, 66, 70, 75-77

space science activities, 375

space transportation activities, 128

WMO. See World Meteorological Organization.

World Administrative Radio Conference 1985-88 (Space

WARC), 13, 48-49, 150, 171, 173-177

World Bank, 179

World Meteorological Organization (WMO), 43, 51-52, 264,

268, 273, 274

World Weather Watch, 268-269, 273

Zeiss, 390

U.S. GOVERNMENT PRINTING OE’F’ICE : 1985 0 - 38-797 : QL 3