COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 04.12.1996 
COM(96)617 final 
COMMUNICATION FROM THE COMMISSION 
TO THE COUNCIL AND THE EUROPEAN PARLIAMENT 
THE EUROPEAN UNION AND SPACE : 
FOSTERING APPLICATIONS, MARKETS AND INDUSTRIAL COMPETITIVENESS 

Table of contents 
1. Introduction 2 
2. The importance of space to Europe 3 
3. The space industry - overall issues 5 
3.1. A changing environment : transition to a global information society 
3.2. The growing space applications and downstream markets 
3.3. A sector of worldwide competition 
3.4 The conditions for industrial competitiveness 
4. Role of the European actors 9 
5. Space telecommunications 11 
6. Satellite navigation and positioning 14 
7. Earth observation from space 18 
8. Space launch services 23 
9. Defence and dual use space technologies 24 
10. International cooperation 25 
11. Standardisation 26 
12. Financing 26 
13. Institutional aspects 27 
14. Conclusions 28 
Glossary 29 
1. Introduction 
Space is no longer only a tool to explore the universe and to bring man to new frontiers. 
Even if these aspects remain important, space has now also strategic and economic 
dimensions. Space applications have opened new markets which are significant on the world 
trade scene and which have also brought new ways to satisfy human needs. As space 
contributes both to the industrial competitiveness of Europe and to the improvement in the 
quality of life of its citizens, the European Union cannot be indifferent about space 
developments. This does not mean that the European Union should substitute for relevant 
bodies, notably the European Space Agency, in formulating the European space policy but 
the European Union should contribute to the full development of the space policy and take 
into account the space dimension in the formulation and implementation of the policies 
mentioned in the Treaty. 
The European Union has had an interest for the space field for about a decade. The 
Commission's 1988 communication on space1 established the principle of a Union 
involvement in Europe's space activity and outlined its role which had to be complementary 
to that of the European Space Agency (ESA). 
Since the presentation of the last Communication "The European Union and Space: 
challenges, opportunities and new actions" of 23 September 19922, the overall international 
scenario has greatly evolved and new important events have occurred, requiring an update 
of the Commission's position in the space field : 
The emerging information society, together with technological developments, have 
opened up new perspectives for the use of space, which is of great socio-economic 
importance because of the inherent trans-border character of satellite services. 
The markets for space applications are developing fast, particularly in the areas of 
telecommunications and navigation; while Earth Observation is emerging from the 
realm of science towards an increased role of the market. Simultaneously, world 
competition on the markets for satellites and launch services is becoming increasingly 
intense and global. 
The restructuring process within European industry has made some progress, but at 
the same time their USA competitors have evolved towards greatly increased 
concentration. 
The ESA Ministerial Council of Toulouse in 1995 has taken important decisions, in 
the field of launchers and space infrastructure, which will affect the funding of 
application programmes. It also launched an assessment of ES A's industrial policy 
which may lead to its revision and which may relate to some of the Union fields of 
competence. 
At Union level, the development and demonstration of space applications have 
received increasing attention in the 4th Framework Programme for Research and 
Technology Development and Demonstration (1994-1998)3 as well as in the 
implementation of a number of the Union's policies. 
1 COM(88) 417 final 
2 COM(92) 360 final 
3 O.J. L 126, 5.18.1994 
The Commission, as part of its continued dialogue with the industry, has convened 
a High-level Group of industrialists to help and define actions intended to promote 
a dynamic and competitive space industry in Europe. 
This Communication takes into account the conclusions of the Council meeting of Research 
Ministers on 29.4.934, the European Parliament Resolution of 6.5.945 and the ESA 
ministerial Resolutions on 10.11.92 and 20.10.95, as well as the discussions during the 
European Space Forum on 6.11.95, the views expressed by the Space Advisory Group 
(SAG) and the report of the Industry High Level Group of 30.1.96. The next three sections 
set the general context of space and it applications within Europe. Sections 5 to 7 deal with 
the three most important space applications, while sections 8 to 13 cover some horizontal 
policy issues. 
2. The importance of space to Europe 
For more than thirty years, space has proved to be of crucial strategic, socio-economic and 
scientific importance. The major economic powers have implemented programmes to enable 
the parties involved, essentially the public authorities and industry, to demonstrate and 
exploit the potential of space technologies. The creation of ESRO, ELDO and then ESA, 
alongside national agencies and institutions, have allowed the development of a wide range 
of technological capabilities and an important industrial infrastructure. These efforts have put 
Europe at the forefront of the space field, though the levels of European spending in cannot 
be compared to those of the US or the former USSR. 
World space budgets, MECU 
USA 
As a result of this investment effort, there are now in Europe some 350 industrial companies 
with a degree of involvement in space activities, from the prime contractors to the first, 
second or third-level subcontractors and suppliers. Taking a wide definition, this sector 
PV/CONS 22 - RECH 22 - 6280/93 of 5.6.1993 
OJ. C 205/467, 7.25.1994 
generates up to 8 bn ECU and represents over 30,000 industrial jobs, with a further 9,000 
in related institutions (space agencies, research centres, Universities, etc.). As comparison 
there are in US about 200 000 jobs in the space business. 
To fully appreciate the economic importance of this industry, one must see it as a key 
element in a much larger value added chain. Typically, the bulk of that chain is made up of 
services, which together with the ground and user segments may represent more than ten 
times the value of the spacecraft and launchers. A European strategy towards the 
development of space activities, as proposed below, must therefore avoid a narrow concept 
of the space industry which would be limited to the space segment manufacturers, and 
include these related sectors. 
Other than the economic stakes, Europe has a strategic interest in the development of, and 
access to, space applications which have an impact on policy fields such as the information 
society, environment, agriculture, trans-European networks, regional policy, development aid 
etc. In this context the Union can place space techniques in the proper policy framework and 
may play a key role of pioneer customer in those applications which are potentially 
interesting to the implementation of its policies and to the fulfilment of user's needs. 
Europe's space activities, like in other sectors, are more concentrated in some of the member 
states. The downstream industries and services concern a much wider variety of countries and 
regions, and the same is true for the main space applications. Indeed, it can be said that space 
systems ignore political boundaries, they equally favour all European regions, in particular 
less favoured regions, and, thereby, social and economic cohesion within the Union, taking 
into account the importance of space technologies for improving infrastructures 
(telecommunications, land use, urban development, ...) or quality of life (broadcasting, water 
management, ...). 
This communication addresses the main issues for which there is an immediate Union interest 
and potential for action. Space science and manned space activities, although important from 
the strategic and industrial points of view, are essentially within the remit of the European 
Space Agency (ESA), national agencies and the Member States. In any case, complementarity 
and synergy between those efforts and Union policies such as research and technological 
development (RTD), human resources or external cooperation will be actively sought and 
exploited in order to sustain and potentiate all the sectors where Europe is already or may 
become competitive. 
In particular the use of the International Space Station, as a big scientific facility, should be 
considered in the implementation of the future Framework Programmes. 
3. The space industry - overall Issues. 
3.1. A changing environment: transition to a global information society. 
10 The space industry, including the ground segment and related services industries, is having 
to cope with a number of external changes which impact on its operating environment : 
The end of the geo-political context which had fuelled the growth of the sector for 
decades, as well as the economic slowdown and budgetary policies of recent years. 
This meant that, for the first time in its history, space employment has fallen in the 
last three years. 
The increased globalisation and opening of the international marketplace and the 
emergence of new competitors. This situation is exacerbated by a current excess 
industrial capacity resulting from the above mentioned factors. 
Also at global scale, technological developments and the movement towards the 
global information society have opened new application areas (satellite personal 
communications, multimedia, navigation etc.) whose importance was unforeseen only 
a few years ago. 
Some of these factors may be of a temporary nature, others will require permanent changes 
in the way the industry operates and in the role of public powers in this field. Industry is 
conscious of the fact that its present structures will have to be adapted in response to those 
changes, but it needs clear signals from the public authorities, as to what the new 
environment will be. 
3.2. The growing space applications and downstream markets. 
11 The level of activity in the European space industry has experienced an interruption of its 
growth after 1992, which can be put down mainly to the evolution of government funding. 
Meanwhile, their commercial and defence sales have experienced a moderate increase. 
Turnover of the European space industry by origin 
million ECU 
Ï99Ï Î992 Î993 1994 1995* 1996* 1997* 
National civilian R&D 773 899 664 685 7Ô5 678 698 
ESA 1396 1749 1462 1470 1653 1427 1363 
Commercial 972 1021 1048 1261 1333 1589 1541 
Defence 248 285 265 350 414 419 480 
TOTAL 3389 3954 3439 3766 4105 4113 4082 
* forecasts 
Source: CNES - Eurospace 
These figures show (in spite of significant differences between countries) that for the space 
industry commercial applications are only one element, not for the time being the dominant 
one. However, there is a clear trend for the market element to gain in importance: from 29% 
of the industry's turnover in 1991, to a forecast 38% in 1997. 
12 As already pointed out, in the market-oriented space applications the space segment is often 
only the tip of the iceberg. The bulk of business and employment are to be found in the 
downstream, applications-related industries and services which are, furthermore, growing at 
a faster rate than that of the space segment. This should not hide, however, the importance 
of the space segment as a strategic element in the whole chain. The fact that Europe has a 
prominent position in the space segment gives the industry an important leverage in the 
application markets, enabling it to sell complete systems and services to international 
customers. Moreover, space segment manufacturers often play a key role in the design of 
the entire application systems and in the definition of the technical options and standards to 
be used by the corresponding ground segment. 
13 The following are estimates of the market prospects for the main space applications : 
Worldwide civilian space market: prospects for 1996-2005 
billion ECU 
Satellite communications Satellite 
positioning "Remote" 
sensing 
Traditional 
geostationar 
y PCs' and 
broadband * 
Space segment inc. launch and 
operation 
Ground segment and user terminals 
Services and applications 47-64 
47-70 
> 100 ~TT 
100 
200 "TOT" 
27-38 
30-45 10-13 
4-5 
8-13 
* satellite personal communications services (PCS) and broadband (multimedia) services are 
expected to come on stream in the next ten years. 
Source: ESA - Euroconsult 
3.3. A sector of worldwide competition 
14 The position of the European industry in the space markets which are open to competition 
varies between a market share of more than 50% in space launch services, thanks to the 
Ariane programme, and 5 % or less in some categories of ground equipment. 
In the satellite manufacturing sector, which has a strategic position in the chain, Europe is 
currently achieving 20-25 % of prime contractorships at world level, the remaining going to 
the US industry. More significantly, virtually all the proposals for the new global and 
regional communications systems (personal and broadband services) are US led, with Europe 
only now starting a late reaction. The European industry's role as a subcontractor, and 
equipments supplier has increased, however, as has Japan's. Japan already leads Europe in 
the ground segment markets and, in the medium term, plans to become a satellite prime 
contractor and to enter the commercial launch market. 
Competition in the latter market field has become stronger, with the emergence of new 
suppliers such as Russia, China and Ukraine. The market for the launch of small spacecraft 
is also gaining in importance, which may prompt the entering of emerging space powers 
such as India or Israel. 
Finally, in the remote sensing market, the offers are mutiplying from a number of suppliers 
beyond the traditional ones, and the first commercially-driven missions are being planned 
in the US. 
Turnover according to destination markets 
Expendable launchers 
Communications satellites 
Remote sensing satellites Export 
Commercial 
Government 
Defence 
United States 
Eurooa 
3.4. The conditions for industrial competitiveness 
15 European initiative needs to be strengthened in the emerging fields such as satellite 
navigation, PCS, multimedia and broadband communications, building on confirmed 
European strengths such as the experience gained in Ka band technology or in direct satellite 
broadcasting. As already emphasised by the Commission6, it is important to capitalise on the 
European space industry's capacity to translate its R&D investment into innovative products. 
One can say, in fact, that innovation is built into this sector, but this is not enough to allay 
concerns that European competitiveness relative to the (mostly American) market leaders 
may deteriorate further. 
Apart from the fact that the US has long benefited from a genuine single market, their 
advantage is essentially due to two kinds of factors: imbalance in public support levels 
between Europe and the US, and Europe's own industrial structure and working methods. 
Direct and indirect support from the US government to its industry impacts both on the 
industry's technological level and on its costs, through, among other factors, economies of 
scale in manufacturing. The latter, related to the manufacturing process and, especially, to 
non-recurring costs, are seen as perhaps the greatest advantage to the US players. For 
example, today's most successful commercial satellite platform benefited from an initial US 
Navy order of 10 units. Since then, more than 50 have been ordered by commercial 
operators. By comparison, the most successful European platforms have not exceeded 10-15 
orders. It has been estimated that, in the past five years, government funding of the US 
satellite communications industry (through procurement and RTD for civilian and military 
See the Commission's "Green Paper on Innovation" of December 1995. 
programmes) amounted to ECU 9 billions, while commercial sales represented only 26% 
of the industry's revenue. The corresponding figures for Europe are respectively ECU 2 
billions and 45%. Although this latter share indicates a good performance of the European 
industry, the absolute figures highlight the disproportion between the levels of US and 
European public funding in this industry. 
Given this disproportion, it is vital that all available funding in Europe, whether civilian or 
military, at national or European level, is used in the most effective way in order to render 
industry more competitive. ESA will remain an important actor and its ongoing reflection 
on industrial policy and the application of geographic return is to be welcome. The current 
system, originally designed to help the birth of a new European industry, could now be 
improved by stressing economic efficiency mechanisms and the objective of world 
competitiveness in the market-oriented space 
domains. 
16 The industry's structure, characterised by 
considerable fragmentation and overlapping of 
competence both at prime and subcontractor 
level, also puts it at a cost disadvantage with 
respect to their American competitors who, 
moreover, benefit from a mature domestic 
market and a much higher volume of 
government contracts. It is difficult for the 
Europeans to offset that disadvantage through 
e.g. superior R&D, marketing, or other 
factors. The fragmentation of the European 
industry is also a problem when it comes to 
facing the risks (financial, commercial, 
technical) inherent to the new satellite systems 
being proposed at global scale. 
The relations between this complex web of 
industrial players, and their working methods, 
remain largely influenced by space agency 
programmes, more than by the needs of the 
users. Indeed, a commercial customer 
purchasing a satellite system has to consider a 
number of factors, beside price and 
technological performance. Delivery times, 
financing, insurance and associated services 
are all elements in a complex package that it 
is increasingly necessary for space 
manufacturers to offer with their products. The overall international scenario 
affecting space is evolving at a great 
speed creating new perspectives for 
the use of space ; in the context of 
the emerging Information Society the 
markets for space applications are 
developing fast, particularly in the 
areas of telecommunications and 
navigation, while Earth Observation 
is emerging from the realm of science 
towards an increased role of the 
market. Simultaneously, world 
competition on the markets for 
satellites and launch services is 
becoming increasingly intense and 
global. 
«• The relevant European Union 
instruments (including regulatory 
actions) should be used in order to 
create the harmonised environment 
appropriate to facilitating 
investment and in order to support 
more efficient industrial structures, 
encouraging the upgrading of the 
European space industry in terms 
of competitiveness and quality. 
The European space industry has, in the past 
few years, been improving its approach to customers along those lines. It has also taken 
significant steps towards consolidation and streamlining of its structures, through 
agreements or mergers, although these actions do not yet appear sufficient when compared 
to the impressive steps taken in the US industry. 
17 Another characteristic of the European industrial fabric is a relatively low level of vertical 
integration, especially towards the downstream services and equipment markets. This is not 
to say that vertical integration constitutes the only model to follow. Innovative forms of 
cooperation between industry and operators are needed, if European initiatives are to emerge 
in response to the American ones. 
In any case, it is clear that business and profitability are shifting downstream (towards 
network user equipment and services) conferring a strategic advantage to vertically 
integrated companies, especially in the new global telecommunications landscape. A greater 
part of the space telecommunications market will also be taken up by consortia where the 
satellite maker is a strategic partner, or is integrated in a wider group promoting the project. 
This has to be born in mind in a context where the opportunities open to independent 
manufacturers may not be expanding much. 
18 Specialisation, on the other hand, also has its benefits, especially for the industry of smaller 
countries. Small and medium enterprises (SMEs) are generally recognised to be the main 
source of new jobs in all Member States. In fact research work has shown that a small 
proportion of about 4% of enterprises contribute for some 50% of all net job creation. SMEs 
throughout Europe already play a role in the space and downstream sectors, such as remote 
sensing data services. Particular attention has to paid to their positioning in the evolving 
context, and full use will be made of the Commission actions for the improvement of the 
business environment and the promotion of the development of these enterprises. 
4. Role of the European actors 
19 As pointed out market-oriented applications are a growing but still not the dominant 
component of space activity. Their share is about 30% in Europe, but only 10% or less in 
the case of the other main space powers. Governments, through their space programmes and 
a number of other means, have an important impact in this sector and influence the nature 
of the game being played in the commercial arena. This highlights the importance of a 
strategic concertation of all European actors involved. 
20 ESA should remain one central piece of the institutional scheme, fostering European 
cooperation and strategic planning in the space field. Together with national space agencies, 
it should reinforce the European technological base and remain a mainstay of European 
industry, through the design and implementation of space programmes for their specific 
objectives. 
21 The European states, which have fostered the emergence of this industry through ESA and 
their space programmes, should now recognise that the context has evolved and that a more 
European, market-oriented approach is needed, where industry and service providers play 
a more active role. Failing that, no actions at EU or any other level can ensure the survival 
of this industry on a sound economic basis. 
22 Industry should be free to elaborate its strategy and choose a path, towards restructuring, 
which is adapted to the European framework. Issues such as industry consolidation, vertical 
integration and international cooperation are vital to the industry's global competitiveness. 
These issues have to be considered by taking into account European competition rules as 
well as the global challenges posed by the US and other competitors. 
10 
23 The Commission will work towards an open and competitive environment as the basis for 
a strong European industry and is willing to assist in the analysis of innovative strategic 
industrial alliances, contributing to a progressive awareness of the common European 
interests. It will also use its competence to ensure a level playing field within Europe and 
beyond. Furthermore, the Union is active in several policy fields mentioned above, for 
which space applications can be of strategic importance, and therefore has a stake in the 
development of those applications. Its role must be seen within the subsidiarity principle, 
and in particular : 
- the need to improve coordination of European RTD and industrial policies, in a context 
where competition is global and Europe does not have in general a strong position. 
- the European-wide or global reach of space applications, which leaves little scope for 
national solutions. 
- the international coordination issues pertaining to those applications (orbital slots, 
frequencies, licensing, standardisation) where the lack of a common European voice 
constitutes a serious handicap to a strong market position. 
THE PARTNERS IN THE DEVELOPMENT OF SPACE TECHNOLOGIES 
AND APPLICATIONS IN THE EUROPEAN UNION 
1, The European Community : support to the development of the market, pilot and 
demonstration projects, methodological research... 
2, The governments of the European States and their space agencies or national 
programmes : development of the space segment, exploratory and application 
missions, launching facilities.,. 
3, The European Space Agency : development of the space segment, scientific, 
"Explorer" and "Earth watch" missions, launchers... 
4. The Space industry : prime and sub-contractors for the space and ground 
segments, value added companies for services and products... 
5. The Space system operators such as : 
- EUMETSAT for meteorology, 
- EUTELSAT for telecommunications, 
- EUROCONTROL for air traffic management 
6. The end users 
ï'*m$mMmzmàmm~4 
11 
5. Space telecommunications 
24 Telecommunication is by far the most widespread application of space technology, with 75 % 
of all satellites at present being communications satellites. For the decade ahead (1996-
2005), the world market corresponding solely to satellites for fixed communications and 
broadcasting is conservatively estimated at ECU 12-16 billions, launchings at ECU 9-10 
billions, with operator revenues ECU 30-40 billions. The estimated ground station and 
terminal market is ECU 50-70 billions and for end-user services, ECU 120-160 billions. 
Current services provided in Europe cover namely voice and mobile telecommunications, 
high speed data, and increasingly business communications to small traffic terminals 
(VSAT). 
25 Since the last Communication by the Commission on space policy in 1992, there has been 
a resurgence of interest in the use of satellite communications prompted by technological 
developments which have enabled satellite systems to become a major mode of distribution 
of home entertainment television, and to compete with other communication technologies for 
new markets for mobile and very broadband communications. There is today a 'business 
synergy' to be developed between modern satellite systems and basic terrestrial 
infrastructure, and a convergence between the 'direct to home1 of satellite television and the 
'direct to user1 of satellite business communications. 
26 Two promising new markets present challenges for European industry; when mature, each 
should provide industrial and service elements of economic size comparable to that of 
today's fixed satellite communications systems. They are : 
- satellite personal communications systems (satellite-PCS), mobile communications for 
handheld GSM type terminals and voice/data services, one of which has extensive 
participation of European space industry. Each proposed system is targeting 1 to 2 
million users worldwide ; 
- very broadband digital communication systems. These systems are based on global 
satellite constellations and are intended to serve the explosive demand for Internet type 
data, voice and interactive multimedia services as a major building block of the Global 
Information Infrastructure ; 
Proposed actions 
27 The Commission proposes to enhance the role of satellite communications. This will be done 
in cooperation with ESA, national agencies and Member States, by developing a coherent 
set of policies and actions along three main lines: regulatory framework, external policy and 
RTD. 
28 Advanced technologies for the development of global broadband digital satellite systems (for 
fixed or mobile applications) have been developed over the last few years through ESA or 
national agency programmes. Such programmes are primarily concentrating on payload 
technologies and to a lesser extent, on ground segment technologies. On the other hand, 
Union supported programmes are concentrating more on technology and systems 
developments for ground segment and applications. Thus, European Union RTD Framework 
Programmes and national and ESA programmes should play complementary roles in 
promoting the commercialisation of space telecommunications services to address the new 
12 
R&D and SYSTEM ASPECTS of SPACE COMMUNICATIONS 
USA budget 
Sales of commercial 
satcom 
,18% 
NASA R&D 
3% 
NASA satcom budget 
7% DoD satcom budget 
46% 
DoD R&D 
26% 
USA 
TOTAL MARKET FUNDED = 11862 MECU 
TOTAL PUBLICLY FUNDED R&D = 4900 MECU 
EUROPE budget 
Sales of commercial MRary «ateocn budget 
satcoms 
35% 17% 
MlitaryR&D 
5% 
National civilian ESA satcom budget 
satcom budgets ESA satcom R&D 21% 
3% 19% 
EUROPE 
TOTAL MARKET = 3712 MECU 
TOTAL PUBLICLY FUNDED R&D = 1304 MECU 
Relative size of Europe / USA budgets from 1990 to 1994 
Source : European Commission (1995) 
29 
30 
31 13 
passive markets for communications and multimedia services, including Internet broadband 
access systems. 
In the field of mobile communications, research is today primarily centred around the 
development of the GSM follow up, also called UMTS (Universal Mobile Telephony 
Service). In Europe, the 4th Framework Programme provides a major source of funding 
through its ACTS component. There will be a need to continue the integration effort, in 
such a way that European industry is in good position to provide terminals for next 
generation mobile networks, with both terrestrial and satellite communications capabilities, 
thus maintaining the leading position obtained with GSM. 
Advanced broadband digital communications satellite systems are now being planned to 
provide communications infrastructure to support the Global Information Society, based on 
constellations of satellites in either geostationary or non-geostationary orbit, and optimised 
to serve the demand for Internet-type data, voice, and interactive multimedia services. Whilst 
initially almost all these initiatives 
came from the US, both European ••••• • m\ma^Êm^m^m^^mmmmmmÊmÊm^mm^m^^ 
industry and operators are now 
beginning to compete with their 
own projects and plans. In relation to telecommunicationsi the full 
liberalisation of services, an open access to space 
segment and a balanced access to satellite market 
should be pursued in WTO ; 
a harmonised regulatory regime for the introduction 
of satellite PCS services in Europe has to be 
consolidated, in conjunction with member States ; 
the concertation of European positions in 
international fora, in particular on the allocation of 
frequency spectrum and orbital allocations, has to 
be increased ; 
a specific Action Plan on key issues for satellite 
communications adressing in particular issues of 
the regulatory framework, the strengthening of 
efforts at European level in international fora, and 
research and development aspects will be proposed 
by the Commission. On 10 October 1996, an informal 
High Level meeting took place 
between the Commission, EU 
ministers, and industry 
representatives to discuss the need 
for specific action in the satellite 
communications sector. As a 
result of this meeting the 
Commission has announced in the 
Telecommunications Council of 
November 28, 1996, that, as part 
of its commitment of a partnership 
between public and private sector 
players, it will present a coherent 
approach to both R&D and 
regulatory/policy matters for the 
satellite communications sector 
addres-sed in the form of an 
Action Plan to be submitted to 
Council in 1997. This Action Plan ^mmmmm„mmm—mmÊ—Êmmmmmmm—Êmmm—m~m 
will be in full coherence with this 
present Communication and its objective shall be : 
. to present a framework in which private and public partners cooperate, 
. to stimulate the satellite sector to take initiatives and lead the public sector actors 
. to propose concrete actions in order to advance in broadband multimedia via satellite and 
in personal communications 
to reinforce the international position both at policy and industrial level. In particular, 
14 
the concertation of European positions on the allocation of frequency pectrum and 
orbital allocations has to be increased in international fora ; 
. to review the satellite communications aspects in the Community R&D programme, with 
a view to increase its relative position 
. to reinforce the cooperation with ESA, and with CEPT. 
6. Satellite navigation and positioning 
32 Satellite positioning systems (GPS and GLONASS7) have been deployed for military 
purposes by the US and Russia. Non-encrypted signals from these systems are available free 
of charge for civilian use, which has opened up a market for navigation equipment, 
increasingly used in all modes of transport, and for positioning equipment used in a wide 
range of other applications. Satellite navigation and positioning systems are thus evolving 
from a primarily military to a wider civilian use. 
33 Several studies underline the prospective benefits of satellite navigation all over the world. 
The advantages to be gained over existing systems include simplification through the use of 
a single system which could meet all users requirements operating world-wide 24 hours/day. 
A space based system will also provide improved accuracy of position and velocity 
measurement which will lead in turn to a reduction of waiting times, fuel savings, better 
environmental protection and a reduction in the number of accidents: the estimated savings 
are about 20 bn ECU/year world-wide. Such considerations have led both the International 
Civil Aviation Organisation (ICAO) and the International Maritime Organisation (IMO) to 
adopt space based systems as key components of the next generation of navigation and 
positioning services. 
34 Apart from the social and economic benefits one has also to consider the industrial 
opportunities. Since satellites have only a limited lifetime, space segments must be 
continuously maintained and updated. Ground segments must be extended to provide greater 
geographical coverage and improved services. Both must be supplied by industry. The 
market for user equipment already amounted to MECU 477 in 1994, and is predicted to rise 
to ECU 4 billions in 2000 and ECU 25 billions in 2005. A market of comparable size is 
also developing for peripheral services and hardware units. 
Experience shows that only those nations and industries with a decisive influence on the 
system infrastructure will remain competitive in the market. The objective of the European 
Union is to raise European industry to a level of competitiveness enabling it to participate 
in the deployment of a Global Navigation Satellite System (GNSS), in the definition of 
interoperability requirements and industrial standards, thereby giving industry the 
opportunity for an early entry in the market. 
The free availability of the signals and the political complications due to the dual use 
character of today' systems, however, make it very difficult for a purely private initiative 
to open the door to Europe's full participation in this market, and only a government-
industry partnership has a chance to provide a breakthrough. 
35 Although aviation represents only a limited share of the total market, its key role is due to 
the fact that no other sector has such strict requirements. The present GPS system, under 
the control of one single country, has some weak points: accuracy is insufficient; 
GPS: Global Positioning System, GLONASS: Global navigation System. 
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geographical coverage is not total; the technical failure probability is too u^h for safety 
critical applications; warning times in case of system failures are too long. Due to these 
shortcomings, public authorities all over the world have started to commission GPS 
augmentations, in order to provide better integrity, availability and accuracy to services for 
civilian use. This network of systems currently emerging around GPS and possibly 
GLONASS will become a seamless, worldwide augmentation system for air navigation. 
36 The Commission8, Council9 and the European Parliament10 have recognised the need for 
Europe to play a key role for the implementation of GNSS and adopted a two-track 
approach: 
A European augmentation to the existing military Constellation GPS and GLONASS 
in order to meet the civilian users requirements (GNSS-1) and at the same time, 
Preparatory work for the design and organisation of the second generation system 
(GNSS-2). 
The Commission has also set up a High Level Group consisting of representatives from 
national governments, users, industry, relevant industrial organisations and potential service 
providers which assists the Commission in the development of an Action Plan for 
deployment of GNSS. 
37 To co-ordinate the European Contribution to GNSS-1 and initiate actions on GNSS-2 the 
European Community with ESA and EUROCONTROL have gathered their efforts within 
the European Tripartite Group (ETG). The Community provides the political support and 
complementary financial support for projects through its Trans-European Transport 
Networks policy and its telematics and transport RTD programmes. ESA implements the 
ground segment and will operate the European Geostationary Navigation Overlay System 
(EGNOS) until it reaches the Advanced Operational Capability (AOC) phase. When AOC 
has been completed, EGNOS can be approved as a primary means of navigation. 
EUROCONTROL defines the Civil Aviation requirements and will validate the system in 
accordance with those requirements. 
More specifically, the Commission is supporting the following actions : 
From the Telematics applications programme of the Fourth Framework Programme, 
and concerning GNSS-1, several projects address the development of on-board 
receivers and demonstrate the ability of local area augmentation systems for air, sea 
and rail applications. At the same time, preparatory work has been launched which 
will identify the operational and functional requirements for a GNSS system, 
encompassing both GNSS-1 and GNSS-2. 
From the Transport research programme, concerning the potential benefits of the 
application of satellite-based services, a project assesses the transport policy 
requirements for the integration of information, communication and navigation 
technologies. 
8 
Communication on the Satellite Navigation Services. COM(94)248 of June 1994. 
9 Council Resolution 94/c379/02 of 19.02.94. 
10 E.P. Resolution 209.909 final of 30.11.94 
17 
Within the Trans-European Transport Network actions, support has been given to 
provision of access to the Inmarsat III navigation payloads ; a Council decision has 
been adopted which provides guidelines for the implementation of a Trans-european 
Navigation and Positioning Network11. 
38 Within the framework of the Common Transport Policy, a baseline European 
Radionavigation Plan (ERNP) is currently being developed, taking into account the 
requirements of international bodies (IMO, ICAO, ITU). The ERNP will help in the 
rationalisation and harmonisation of European policies concerning radionavigation systems 
facilitating among others the introduction of satellite based services. Studies are being 
launched, one of them is to analyse the costs and benefits of a contribution to GNSS. This 
study shall analyse in particular the benefits to users from the various sectors. Another 
study is to design an international system and determine the nature and thoroughly analyse 
the approach to a future system. 
39 Position determination by satellite may be used in surveillance systems and therefore in the 
monitoring of the implementation of Commission policies. As an example, the Commission 
is preparing a proposal for a Council regulation on the establishment of a satellite vessel 
monitoring system for the control of the Union Fisheries Policy. 
Proposed Actions 
40 With the assistance of the High Level Group, the Action Plan will be drawn up to cover : 
Proposals for institutional arrangements to facilitate the channelling of investments, 
placing of contracts and solving of ownership problems. Extending the remit of an 
existing agency or the creation of a new body are two of the options under 
consideration to ensure the provision of the appropriate infrastructure which will 
satisfy the certification requirements. 
Definition of a legal and regulatory framework with provision for different operators 
to provide navigation and positioning services to specific users. 
Definition of the configuration and 
implementation schedule for Full 
Operational Capability (FOC) which 
provides fail safe operation needed 
for safety critical operation by 
providing redundancy in ground and 
space segments. 
Identification of funding options for 
the deployment of FOC to start not 
later than 1999. As regards navigation and positioning 
services by satellite, Europe should play 
a key role by its participation to the 
development of a global system 
answering the needs of civil users ; 
A specific action plan under preparation 
will be presented by the Commission. 
Agreements with other countries or regions who have no space segment but wish 
to offer satellite navigation services over their territory and are willing to contribute 
to the required extensions to EGNOS. African countries, the Indian Ocean region, 
ii Decision 1692/96/EC of 23/7/96 O.J. L 228 
18 
South America, Eastern Europe and the countries of the former Soviet Union have 
already expressed interest. 
This work will be carried out under a co-operation framework aimed at meeting global 
interoperability requirements and the requirements of international conventions. 
41 Due to public investment amounting to ECU 10 bn for the supply of GPS, backed up by 
substantial orders for military terminals, the US has dominated the satellite navigation 
market. This experience has been used to draw up de facto standards in national bodies and 
are already being used to construct equipment. There is a danger that these will be adopted 
as international standards under pressure from current users. Urgent action is needed to 
strengthen the European standardisation process with a view to adopting a common 
European Position in critical areas. The global objective should be to discuss regional 
standards between Europe and the US before discussion within international bodies. 
42 Certification of a space system issues new challenges to regulators especially those 
responsible for safety of life level services. Relevant authorities must decide on their 
certification policy for GNSS1 which depends ultimately on a system or systems (GPS, 
GLONASS) which are under the ultimate control of the military authorities of the US and 
Russia. By consequence, deployment of a European specific contribution to GNSS-2 offers 
the appropriate way for Europe to maintain its sovereignty in the area of satellite navigation. 
43 Although GNSS-2-related developments have been initiated in Europe these are on too small 
a scale to provide realistic competition and the following urgent actions are needed : 
Speedy approval of the Action Plan, especially the institutional arrangements. 
Support for industry to develop user segment equipment particularly for land 
applications. 
Initiation of work for the design, development and organisation of GNSS-2, adding 
to the preparatory work already done under the Fourth Framework Programme and 
under ARTES 9 by ÉSA, leading to an in orbit demonstration of industry's capability 
to supply the system. Support of relevant actions in the Fifth Framework Programme 
in close cooperation with ESA and national agencies. 
To speed up the process, the possibility must also be considered of a European dedicated 
navigation payload, which may be launched in combination with another system including 
services other than navigation. 
7. Earth observation from space 
44 In the last 25 years, Europe, thanks to ESA and national Space agencies programmes, has 
established a sound base in satellite observation of the Earth with the SPOT, ERS and 
METEOSAT series which has to be exploited to the full. As regards meteorological 
satellites, for example, EUMETSAT operates systems meeting the needs of European States 
and contributes to a global meteorological system providing services throughout the world. 
45 The world market for civil remote sensing, in the decade ahead, is estimated at a minimum 
of ECU 12 billions for satellites and the corresponding launches, ECU 1.2 billions for data 
sales, ECU 4 billions for terrestrial receiving and processing equipment and more than ECU 
12 billions for services related to value-added products and services. According to recent 
estimations the whole market for data and related services (excluding meteorology) would 
be about 270 MECU for Europe in 2000. So far, the customers are mainly public entities. 
Not only must potential clients be shown that the data supply is cost effective for their 
19 
application, but also that the data can be delivered reliably, in good time, and for the 
foreseeable future, Given the limited revenue from sales, the value added industry has been 
unable until now to invest in attracting new customers. Although the potential is promising, 
the European market in data from satellite observation of the Earth is still largely 
underdeveloped and needs a major European effort to make it grow. 
46 Given that the EU is amongst the largest purchasers of data services in Europe, it is 
uniquely placed to play a fundamental role in developing this market, both as a pioneer 
customer and by supporting the development of data derived information services. This was 
indeed advocated by industry, which specifically recommended a "two step approach" as a 
phased means of establishing self sustaining markets. This constitutes a way to ensure the 
continuity of service, given a regular and adequate provision of new systems, which is the 
responsibility of industry and other organisations. In the longer term, once the market is 
consolidated, it will be industry's role to deliver data services to customers on a commercial 
basis. 
However, industry will be able to do this only if it has clear indications as to the market 
stability and size. Here the Commission could provide a significant contribution by 
accurately expressing Europe's requirements for Earth observation and corresponding 
services with a related estimate of the annual value of those services, this expression being 
divorced from any perception of the ability, or otherwise, of Earth observation technology 
to supply those services. On the basis of this assessment, the challenge to Industry will be 
to improve the quality, timeliness and cost of those services whilst developing a profitable 
business. Industry needs also appropriate financial engineering instruments enabling it to take 
the risks associated with the development of any new advanced technologies. 
47 An important step in the direction of further developing the field was the joint document by 
ES A 5 EUMETSAT and the European Commission12 presented to the Council of ESA in 
Toulouse on 20 October 1995 concerning a European policy on Earth observation by satellite 
which has the following main objectives : 
satisfy user needs on a permanent basis, mainly by establishing operational satellite 
services, ensuring continuous supply of data and services, and maintaining a state of 
the art configuration ; 
stimulate industrial profitability and competitiveness by promoting the widest possible 
market (including military) and reducing the cost of satellite observation systems to 
a minimum to ensure that they are used to the full ; 
achieve strategic objectives, ensuring guaranteed access to data where essential to the 
security of Europe or to the preservation of its environment, maintaining and 
developing its capacity to enable it to play a global role. 
Proposed actions 
48 In order to reach those objectives, each of the partners involved has to determine the 
appropriate ways and means according to its own procedures. At the Union level, the 
Commission has already given impetus to this sector through a dedicated activity within the 
Fourth Framework Programme of RTD. The following actions are proposed for the near 
future : 
12 
Proposal for a European policy for Earth observation from space ESA/PB-EO(95)7, rev. 2 
20 
Earth observation at the service of the citizen 
Satellites in low Earth orbit are repeatedly passing overhead, scanning the land and 
sea beneath them and transmitting the resulting data back to receiving stations on 
Earth. 
Optical instruments are particularly valuable for viewing small details for the kind of 
applications that have been familiar since the start of aerial photography. Many 
inaccessible areas of the Earth ^s surface have now been mapped for the first time, with 
high precision, using information acquired by the SPOT series of satellites. By 
combining the information from several instruments European scientists and technicians 
have developed some truly remarkable systems for monitoring various themes. One 
outstanding achievement to illustrate such an approach has been provided by the 
JRCKs MARS project to furnish its clients, particularly the DG VI and EUROSTAT, 
with some of the information they need to execute their mandates. Humanitarian 
organisations depend on these maps, which can be kept right up to date, to localise 
disasters and work out feasible approach routes. At the other end of the scale, some 
optical instruments are designed to collect data over huge swaths of the planet at a 
single sweep. In one application of such data, locust breeding grounds can be detected 
and teams of eradication experts brought in to stamp out the swarm before it can begin 
its devastating migration. 
Instruments capable of measuring the surface brightness temperature are routinely used 
in semi-arid lands for detecting areas that are at risk of bush fire, and in temperate 
lands for mapping areas where orchards or spring crops have suffered from frost 
damage. In this way disasters may be prevented on the one hand, and farmers 
compensated for loss of their crops on the other. Over the oceans, such instruments 
can measure the temperature of the ocean skin, and the resulting maps can show where 
nutrient-rich cold water is upwelling from the depths, attracting planckton and shoals 
of fish. In colder waters, the deliveries of food around northern capes can be 
maintained for vital weeks longer by monitoring the approaching sea ice with such 
instruments. 
Radar instruments, such as the Synthetic Aperture Radar on ESA Ks ERS satellites, are 
also constanly monitoring our planet from orbit. These instruments are essentially 
all-weather, and can image the planet V surface through cloud and at night. These 
instruments have proved themselves invaluable in measuring wave height and wind 
speeded to measuring the extent of floods, and in the future should become a vital 
element in the struggle to limit and prevent flooding. 
21 
49 On the basis of market studies involving the Commission's departments, national and 
european space agencies, and major industrial groups as potential promotors, the use of 
existing or planned European missions will be fostered. New application missions with 
sufficient potential return to attract investment by industry could be initiated with the 
Commission acting as pioneer customer in the first phase, with the support of space 
agencies. They will be implemented in full by such industrial investors or appropriate 
operational entities in the second phase with the aim of providing an operational service on 
a commercial basis. The Union action will be targeted at a limited number of application 
areas related to the implementation of its various policies such as : 
Monitoring of land use and resources - Europe has already made a major effort in this 
domain and a high level of expertise has been reached which has to be valorized. 
Additional research will be undertaken and new operational techniques developed to 
improve and foster European capacities in this area. Demonstration and pilot projects 
will be implemented in the fields of agriculture, forest, urban planning, waste disposal, 
etc. in close cooperation with industrial partners as main users (agro-food companies, 
forest exploitation companies, public work enterprises, local collectivities, ...). Such 
projects will contribute to Union's initiatives towards sustainable management of 
environmental resources. 
Monitoring of surface waters - The experience gained at European level will be 
optimised and developed through demonstration and pilot projects based on existing 
missions, before launching new dedicated application missions in collaboration e.g. 
with water management companies. This action will form part of the initiative proposed 
by the Commission on water. 
Monitoring of fisheries - Earth observation techniques are already well developed and 
their potential for the management of fisheries will provide an important complement 
to satellite based vessel tracking systems and in situ measurements. Large fishing 
companies are amongst the main potential industrial partners as promoters. 
50 Some of the application areas have a strategic and political interest for the Union involving 
other European or developing countries. On the basis of the know-how already acquired 
from the on-going or past European missions, new application missions, in particular ESA's 
"Earth watch missions" could be envisaged, notably in the following fields : 
Monitoring of Coastal areas - The strategic importance of those areas for the 
Community is obvious given the length and diversity of its coast line. The technologies 
and instruments developed to meet these needs will also have applications at world 
level in particular in the developing countries. Preliminary studies should be launched 
on the various coastal areas of Europe, taking account of their specific characteristics 
(Mediterranean Sea, Baltic Sea, North Sea and Atlantic arc). As a first step, the 
Commission proposes to identify the many initiatives under way, coordinate them and 
prepare, in close cooperation with the interested partners, a new strategic initiative to 
establish an information system on Mediterranean coastal areas using, amongst other 
sources of information, space remote sensing techniques. 
Monitoring of major risks and natural hazards - The Council of Europe, in cooperation 
with ESA and the Commission, has initiated an action in this field and exploratory 
studies are currently under way, involving the countries of Central and Eastern Europe. 
This is an area where civil and military technologies are of interests for that particular 
use, and the dual application of these technologies may enable them to be exploited to 
the full. The Commission with the interested parties, in particular the civil security 
22 
services, will identify and support pilot projects in order to pave the way for the 
implementation of new initiatives merging various space techniques in the fields of 
telecommunication, positioning, and remote sensing. 
51 As part of the implementation of the EU environmental policy, the Commission will 
continue to support the development of applications of Earth observation techniques by 
carrying out projects for environmental monitoring, including those aimed at increasing the 
effectiveness of European environmental legislation and international environmental 
agreements. This will be done in cooperation with national environment agencies and the 
EEA. In complement to existing or planned missions, new missions could be envisaged with 
the support of space agencies, in particular ESA through its "Earth explorer missions" 
initiative, and other appropriate partners such as EUMETSAT, in order to provide 
continuous public services in the following fields : 
Ocean monitoring - The experience so far gained should also be exploited at European 
level. In order to develop further 
operational oceanography systems and «••••«^^«••••^•^•••«^••^^••i 
to meet the requirements of the 
Global Ocean Observing System 
(GOOS) and its European branch 
(EUROGOOS), the integration of 
data collected with other in situ 
observations could in particular be the 
subject of a European action. 
Atmosphere monitoring - In this field, 
application of space techniques are, 
for the time being, limited to 
scientific research. Initially benefit 
will be drawn from existing missions 
in order to demonstrate the feasibility 
of the technique from an operational 
point of view. Future "explorer 
missions" could be envisaged in 
cooperation with ESA or 
EUMETSAT. 
52 To reinforce the necessary scientific and 
technical base and promote the use of 
scientific results to develop operational 
applications, the Commission will continue 
to implement the Union RTD Framework 
programmes particularly as regards basic 
methodological research and pilot and 
demonstration projects of a pre-operational 
nature in the above areas and in other less 
advanced sectors. Work will be also 
carried out on applications and further 
development of sensors using advanced 
technology in collaboration with the 
appropriate partners taking into account the 
need of assuring continuity during the 
demonstration phase. An important contribution to the 
development of the market for Earth 
observation data-derived services could 
be given by the European Union through 
the implementation and operation of its 
policies ; 
methodological research and pilot project 
will be proposed in dedicated areas of 
community interest ; 
this sector should be progressively taken 
over in most cases by private investors 
and the Commission should facilitate this 
process ; 
the development of service organisations 
and new European operational entities 
designed to deliver space information 
services have to be stimulated ; 
discussions with EUMETSAT will be 
opened to explore its possible role in 
providing data for environmental 
monitoring ; 
measures in the field of education and 
training, as well as measures to promote 
international cooperation and 
development, have to be coordinated at 
the Union level in close cooperation with 
Member States and relevant organisations 
notably the International Space 
University in Strasbourg 
23 
53 The Union's programme for a Centre for Earth Ob? vation (CEO) has an important role 
to play in the above. Aimed at bringing together the u:crs and suppliers of data, it will allow 
quicker and easier access to such data by promoting iho. development of common standards 
and formats. The CEO will also keep users better informed, enabling them to make full use 
of the processed information, while giving to the data providers the appropriate means and 
tools to satisfy the users needs. It will thus be an integral part of future operational systems. 
54 The development of the market also involves the training and education of potential users, 
particularly those using Earth observation data services in the decision making process, 
including those of developing countries. The Commission will continue the action undertaken 
in collaboration with ESA, the space agencies in the Member States and at international level 
(such as the International Space University). 
55 Where the need is perceived, and with the appropriate organisations, the Commission will 
foster the creation of new European operational entities. In particular, in the field of 
environmental monitoring, it will explore with EUMETSAT, and the partners concerned, 
the possibility of that body providing space data relevant to this field. 
56 In order to foster the applications of Earth observation from Space, the Commission will 
continue to study legal aspects of the use of Earth observation data as well as the broad 
principles of a data policy in agreement with the opening of a commercial market. The 
question of the frequencies and orbital slots allocation will be also taken into consideration 
by the Commission in international négociations. 
57 Finally, the Commission, jointly with his partners, will give further consideration to the 
establishment of a coherent European strategy to develop and implement operational systems 
for observing the Earth and its Environment. Such a strategy for coordinating systems 
already existing or planned at the European level without compromising their identities will 
give Europe the opportunity to make full and coherent contribution to the setting up of an 
Integrated Global Observing Strategy as proposed in the CEOS. 
8. Space launch services 
58 The need for Europe to secure an independent capability to provide applications satellite 
systems, be they for telecommunications, television or Earth observation, was a key political 
driver in the original decision in the early 70s to undertake the Ariane programme. This 
political commitment, which furthermore achieved for Europe a leadership position in the 
commercial market for space launch services, largely paying back the Member States' 
investment, is still valid today and remains a pre-condition for the continued access of 
Europe to space and space applications. 
59 Europe's leadership position in the 
commercial market for space launch 
services needs to be maintained against A .ramework of international rules 
increasing competition, characterised by designed to secure fair competion in the 
the presence of advanced versions of space iaUncher market has to be 
existing US launchers, and the entry into established ' 
the market of vehicles from Russia, 
Ukraine, and China. This considerable ^ range 0f jaunch vehicles available, 
increase in the supply of space launch adapted to new market requirements, 
services, and, in certain cases, at might be broadened. 
extremely low prices, threatens to 
destabilise the market. 
24 
60 A fundamental condition for the maintenance and further development of Eurc^jan space 
launch services is a degree of market access similar to that offered in the EU and the 
existence of fair trading conditions. As regards market access, the objective should be not 
only to ensure that there are no restrictions for space launch services provided for civilian 
uses, but also that there are no nationality conditions attached to space launch services 
provided to governmental entities. The latter are very frequent in countries such as China 
and the USA, whereas the EU has an open market. This should be adressed primarily in 
WTO, where the GATT covers space launch services. The Commission and the European 
industry are convinced that it should be in Europe's interest to start exploring the possibility 
to discuss and establish basic rules ("Rules of the Road") for the conduct of open and fair 
competition among the most important space launch service providers. This should include 
the issues of public support to this industry as well as balanced access to each country's 
domestic market. 
Such negotiations should include the US, whose industry benefits at an extraordinary and 
unequalled level of governmental support and military programmes, as well as emerging 
suppliers like Russia, Ukraine and China. A particular aim would be to give an important 
neighbour like Russia the chance of a smooth and progressive integration into the market for 
commercial space launch services on a fair and balanced basis. The Commission will work 
actively with Member States in order to arrive at a common long term strategy in this sector 
and reach a practical solution for the conduct of international negotiations. This focus on a 
forward looking international strategy aimed at opening markets, exploiting new 
opportunities and creating fair trading conditions, implies that market opening agreements 
would render redundant market sharing ones. 
61 The rapid growth in proposals for communications satellites for satellite personal systems 
and for broadband communications using non-geostationary orbits (LEOs, MEOs) leads to 
a broadened requirement for launch services over that of the basic market for satellites in 
the geostationary orbit. The Commission regards the continued presence of European 
industry in the provision of launch services as essential, and encourages the competent space 
agencies and industry to consider how best to maintain a comprehensive European offer over 
the whole spectrum of launch vehicle services. 
9. Defence and dual use space technologies 
62 Although it is not within the Commission's remit to consider the military aspects of space 
technology applications, any European 
strategy should ensure the convergence of IHHII^MH|^MMMaHHH^ 
civil and military effort in order to avoid 
duplications and make the best use of the The Commission encourages a 
available public funding. The relatively coordinated approach by the European 
high cost of space systems make them a Union> the Member States, the WEU and 
first choice candidate for European ESA towards dual-use space 
cooperation, since individual countries will technologies. 
have difficulty reaching the critical mass to ^mmmmÊ^mÊmmMMMHMI 
justify such an investment. mnËÈm 
63 Space technology is of central and growing importance for many types of military missions 
in the fields of telecommunications, navigation, intelligence, early warning and meteorology. 
Initially, military needs have driven space technology, which was channelled to civilian 
applications at an ulterior stage. More recently, the situation has changed in that civilian 
applications are driving the market and justifying themselves the technological investments. 
^ -' ?< 25 
The degree of technological commonality between military and civilian space systems is in 
general high, although it varies from one application to the next. Launch systems and 
propulsion also benefit from important spill overs between the military and civilian sectors. 
The US industry has long benefited from such spillovers in the commercial markets, thanks 
to a military space budget which is over forty times Europe's. 
As stressed in its Communication on the defence industries13 , strong and competent 
industrial bases hold the key to Europe's independence and hence any common effort 
contributing to the strengthening of these capacities must be welcomed and stimulated. 
10. International cooperation 
64 Since the removal of East-West barriers, international cooperation and exchanges in space 
programmes have flourished in previously impossible ways, a trend encouraged by 
budgetary restrictions and the realisation of common interests. At the same time, in the 
private sector, international risk sharing in the new information and multimedia industries 
is fostering the access to new markets, by bringing together industry and a number of 
different actors. Europe must be a key player in these international partnerships, provided 
that they are balanced. This implies that Europe must keep or acquire a critical mass, at 
least in the fields where this is not yet true, in order to draw full benefit from international 
cooperation with its large economic partners. This situation also implies a coordinated 
approach to problems at European level, and the appropriate concertation structures. 
In this perspective, the opportunities for industrial and technological cooperation with 
established players such as the US, Russia, China and Japan, but also the emerging ones 
such as India and Brazil, must be considered. 
International cooperation is also needed in the field of space wastes and the Commission 
could give a contribution to the already on-going works in various instances (UN, ESA). 
65 International cooperation in space technologies may enable certain objectives of the Union 
to be met, as regards third countries. The countries of Eastern Europe should benefit from 
an early integration in trans-European networks, and therefore should be associated to the 
European initiatives such as those in satellite communications and satellite navigation. 
66 Some of the countries from the former Soviet Union could also be partners in space relevant 
projects. Within the framework of its economic cooperation with the New Independent States 
(NIS) the Commission will continue to provide under the TACIS programme technical 
assistance to the aerospace industry. Through the International Science and Technology 
Centre in Moscow it will finance scientific cooperation with a view to integrating the 
scientific potential of the NIS into the global scientific community. 
67 As for the developing countries, such as in the Mediterranean basin, space technologies can 
provide some pertinent solutions. Some of the possibilities were highlighted during a 
workshop on " the construction of the Euro-Mediterranean Information Society - regulation 
framework and Developement of Communication Networks for Economic Cooperation 
(Palermo, 6/7 th may 1996). In the light of the needs, the Union can take action under 
several of its mandates, whether they relate to RTD, development aid or economic 
cooperation. Depending on their level of technical maturity, the implementation of these 
space-derived solutions necessitates a considerable concertation effort, which the 
13 COM (96) 10 final 
. •• '-. 26 
Commission proposes to undertake together with the developing countries and the partners 
concerned (agencies, industries, etc.) with the support of the appropriate Union instruments. 
11. Standardisation 
68 The space industry has to cope with very stringent requirements in terms of quality and 
reliability. In Europe as elsewhere, the need to standardise products and procedures in this 
field has long been recognised. If anything, Europe's complex industrial structure makes 
such a need more pressing. Following a number of past attempts, the European Cooperation 
for Space Standardisation (ECSS) has now managed to put together a group of agencies and 
industry players which offer no doubt as to their European representativeness. Their 
programme aims at a comprehensive and coherent system of standards, based on a 
commercially-oriented strategy. 
In order to foster the competitiveness of European industry, the Commission has given a 
mandate to ECSS and the European standards organisations CEN, CENELEC, and ETSI, 
inviting them to agree an cooperation arrangements and to elaborate an overall 
standardization strategy, identifying areas where standardization activities are to be carried 
out at the European level and at international level and identifying those specifications which 
should become formal standards and those which should remain within the exclusive sphere 
of ECSS. 
12. Financing 
69 Space projects, and in particular those ^^^^^^^^^^^^^^^^^^^^^^ 
corresponding to the new applications, 
require substantial up front investments Innovative funding and guarantee 
with long pay-back periods. These projects mechanisms, including those of the 
are therefore very sensitive to the European Investment Bank and European 
conditions in which funding can be Investment Fund, should be used to 
obtained, as much as they are to facilitate the financing of commercial 
manufacturing costs and market conditions, space projects 
whilst European players have had to cope ' 
with the exchange risk associated with the "^^™"™™"•»•••i»^™ 
fluctuations of the US dollar. 
Space is generally associated with an image of high-risk technologies, with new applications 
in unproven yet potentially very competitive markets. However, this situation is evolving, 
with investor attitudes becoming more positive. New systems such as satellite PCS are 
offering "franchising" opportunities for rights to offer services in specific regions against 
equity investment in the system costs. To the extent that the European environment is 
perceived as an obstacle to the financing of similar initiatives in Europe, the EU can play 
a direct and indirect role in improving this situation. 
70 Directly, the Commission will seek to identify and support projects of European interest in 
the fields of telecommunications, navigation control and Earth observation. These projects, 
on which all European partners should cooperate, will in principle be based on already 
existing or planned programmes of the Member States, ESA or national space agencies. 
Among other things they should use the resources of the RTD Framework Programme. 
Other resources could be made available under the framework of Trans European Networks, 
or, in accordance with the appropriate procedures, making use of the structural funds, 
agricultural development or cooperation budgets. It is worth noting, however, that the 
relevant parts of the Framework Programme as well as other instruments are severely 
27 
constrained, and can at best provide a useful complement to the projects in question. 
Initially, there should be no need for additional funding over and above existing levels and 
it should be a question above all of reallocating available funds among the topics selected 
as having a European interest, and achieving greater complementarity and synergy of work. 
Future needs will be determined on the basis of exploratory studies to be carried out in 
connection with specific selected projects. At the same time, the private sector should be 
called to take more responsibility in the implementation of these projects and to develop the 
appropriate infrastructures with the support of the public authorities. 
71 Indirectly, the EU can give a major contribution to improving investment conditions, first 
of all by reducing the uncertainty which arises from the regulatory environment, trade policy 
regimes, etc. Initiatives from the Commission in promoting innovation or supporting SMEs 
could also pave the way to complement and facilitate the decision of the potential partners, 
financial entities, operators and users, to take risks in space-based commercial ventures. 
The Union's contribution as a pioneer customer or demonstrator of space applications will 
also help service providers secure further private finance for space missions. In the context 
of Earth Observation, this has been described as a "two-step approach" to the development 
of a self-sustained industry. 
72 The European Investment Bank (EIB), from 1990 to date, has provided resources worth 
more than ECU 1.5 billion for the funding of 15 European satellite communications projects. 
The Commission proposes to pursue and activate discussions with the EIB and the European 
Investment Fund to define appropriate ways and means to facilitate access to their respective 
funding mechanisms. 
13. Institutional aspects 
73 It is necessary to implement or improve structures of collaboration and cooperation to 
reinforce the synergy of the European space effort at Member State and international level, 
maximising the return on the investment made, and ensuring respect for the individual 
responsibilities of the various partners in developing a coherent overall strategy. These 
structures should develop a sound relationship between Union bodies, national and European 
space agencies, industry, users, and other relevant scientific or operational entities. In order 
to improve complementarity of RTD activities, recourse to art 130K and L could be 
envisaged by the Commission. 
74 The role of the Space Advisory Group set up in 1993 to provide a forum for discussing the 
broad lines of Union action in the space field will be strengthened to allow coordination and 
concertation of actions carried out at national or Union level. 
75 Cooperation between the Commission and the European Space Agency, ESA, which 
currently has observer status at the Space Advisory Group, will be improved under the basis 
of Article 130M of the Treaty, respecting the independent status of this Agency, and under 
a negotiating mandate to be requested from the Council. 
76 On the basis of Art. 228 of the Treaty, the Commission is proposing moreover to put in 
place appropriate structures for the management of specific projects selected in agreement 
with the partners concerned and with the involvement of users (the tripartite group 
EC/ESA/EUROCONTROL set up for the GNSS-1 project is an example for consideration). 
For example the Community, jointly with its partners, is promoting the development of an 
European Economic Interest Grouping (EEIG) to carry out such projects. 
28 
77 In the trade policy area, in order to ensure fair competition with third countries in the 
commercial market for space launch services, the Commission and Member States must find 
an institutional compromise for the conduct of international negotiations. The Commission 
will continue to search for a rapid and practical solution and encourages the Member States 
to be forthcoming on this issue. 
14. Conclusions 
78 This Communication highlights the urgent need for action in order to establish an 
appropriate environment for the development of applications of space techniques and to 
improve the competitiveness of European industry at world level. 
79 Proposals in the above fields will be made by the Commission within the current and future 
RDT Framework Programmes with the key goal of consolidating the European satellite 
based infrastructure ; certain activities could necessitate the use of other forms of 
Community support according to the particular modalities concerned, concrete measures will 
be taken by the Commission. 
80 All these initiatives should be coordinated with those of Member States and of the European 
Space Agency in order to obtain, within European Union rules, the maximum degree of 
flexibility and synergy at the European level ; the Commission, together with the European 
Space Agency and other organisations concerned, will take the necessary steps to this end; 
the Commission will continue to rely on the advice of the Space Advisory Group (SAG) and 
other advisory groups and to maintain regular dialogue with industrialists and users. 
81 The Council is requested to adopt the attached Resolution. 
29 
Glossary 
ACTS 
AOC 
ARTES 
CEN 
CENELEC 
CEO 
CEOS 
CEPT 
CNES 
ECSS 
EEIG 
EGNOS 
EIB 
ELDO 
ERNP 
ERS 
ESA 
ESRO 
ETG 
ETSI 
EUMETSAT 
EUROCONTROL 
EUROGOOS 
EUROSPACE 
FOC 
GLONASS 
GNSS 
GOOS 
GPS 
ICAO 
IMO 
INMARSAT 
ITU 
METEOSAT 
NIS 
PCS 
SAG 
SME 
SPOT 
TACIS Advanced Communications Technologies and Services 
Advance Operational Capability 
Advanced Research and Telecommunication Systems 
Comité Européen de Normalisation 
Comité Européen de Normalisation Electrotechnique 
Centre of Earth Observation 
Committee on Earth Observation Satellites 
Conférence Européenne des administrations des PTT 
Centre National d'Etudes Spatiales 
European Cooperation for Space Standardisation 
European Economie Interest Groupings 
European Geostationnary Navigation Overlay System 
European Investment Bank 
European space vehicle Launcher Development Organisation 
European Radionavigation Plan 
European Remote Sensing Satellite 
European Space Agency 
European Space Research Organisation 
European Tripartite Group 
European Telecommunications standards Institute 
European org. for the exploitation of METeorological 
SATellites 
European association for Air Traffic Control 
EUROpean Global Ocean Observing System 
EUROpean SPACE industry association 
Full Operational Capability 
GLObal NAvigation System Satellite 
Global Navigation Satellite System 
Global Ocean Observing System 
Global Positioning System 
International Civil Aviation Organisation 
International Maritime Organisation 
INternational MARitime SATellite organisation 
International Telecommunication Union 
METEOrological SATellite 
New Independent States 
Personal Communications Services 
Space Advisory Group 
Small and Medium Entreprise 
Satellite Pour l'Observation de la Terre 
Technical Assistance for the Commonwealth of Indépendant 
States 
30 
UMTS Universal Mobile Telephony Service 
VSAT Very Small Aperture Terminals 
WEU West European Union 
WTO World Trade Organisation 
3/ 
PRELIMINARY DRAFT COUNCIL RESOLUTION ON 
"THE EUROPEAN UNION AND SPACE:Developing applications, markets and 
industrial competitiveness 
THE COUNCIL OF THE EUROPEAN UNION, 
Having regard to the Treaty establishing the European Community, and in particular 
Article 130f thereof ; 
Having regard to the communication from the Commission on the European Union and 
space1 ; 
Having regard to the Opinion of the European Parliament2 ; 
Considering the political, socio-economic and scientific interest of space technology 
applications for the European Union ; 
Considering the efforts which the European Space Agency and the Member States of the 
Union have been making for more than 20 years to develop European space capabilities 
and to stimulate the development of a competent European industry ; 
Considering the action undertaken by the Commission, in particular by the Joint Research 
Centre, in the field of space technology applications in the context of the European 
Community Framework Programme of research and technological development ; 
Considering the major role of industry, including small- and medium-sized undertakings, 
in the development of space technology applications and the corresponding services ; 
Whereas Community action should, in accordance with the objectives set out in the 
Treaty, aim to promote the Union's prosperity through greater industrial competitiveness, 
improvement of the quality of life and sustainable development ; 
Whereas the formulation and implementation of Community activities must take account 
of the objectives of economic and social cohesion within the Union ; 
Whereas, in accordance with the principle of subsidiarity, the Community may only 
intervene if and to the extent that the aims of the proposed activity cannot be achieved 
more satisfactorily by the Member States and are therefore, because of their scale or 
impact, best carried out at Community level ; 
Whereas Community action should focus on selected activities which meet specific 
criteria ; 
Il 
HAS ADOPTED THIS RESOLUTION: 
1. The Council recognizes the importance of a concerted European approach to the 
development of space technology applications and the urgent need for Community 
action in this respect to strengthen the European presence in markets for these 
applications, while creating conditions favourable to the emergence of new 
markets. 
2. The Council encourages the Commission to continue with its efforts to create an 
economic environment suitable for increasing the competitiveness of the European 
space industries at world level. In particular, it recommends that the Commission 
support the drawing up of common standards for space products and procedures. 
It also recommends that the Commission consider how financial engineering 
instruments might help in carrying out space projects, enabling the European 
industry to enter into the development and supply of new services without 
excessive risk. 
3. The Council supports the action taken by the Commission as regards the 
development of space technology applications, in particular in the sectors of 
telecommunications, navigation, Earth observation and environmental monitoring. 
It calls on the Commission to continue with its action and to report regularly to 
it on its implementation. However, the Council also wishes to emphasize that no 
field of activity should be excluded a priori. As far as dual-use civil and military 
technologies are concerned, the Council recommends a coordinated European 
approach and calls on the Commission to take appropriate steps in this respect. 
4. The Council stresses the importance of space systems for the development of the 
information society at world level. It believes that the measures proposed by the 
Commission to open up services and develop infrastructures will contribute to 
creating an environment favourable for the development of the telecommunications 
market and European competitiveness. It therefore encourages the Commission 
to pursue its action which will lead to the full opening up of these services, free 
access to the space sector and balanced access to the satellite market in the context 
of the World Trade Organization. The Council in particular encourages the 
Commission to seek further alignment of the European positions on the allocation 
of frequencies and orbital positions in close cooperation with the Member States 
and the organizations concerned. 
5. The Council recognizes the importance for Europe of confirming its role in the 
field of satellite navigation and positioning services. It supports the action taken 
jointly by the Commission, the European Space Agency and Eurocontrol for the 
establishment of an international interoperable civilian system and recommends 
that the Commission continue with its efforts to develop the European component 
of this system. It also recommends that the Commission consider the possibility 
of setting up a new operational body at European level in this sector in order to 
meet user requirements. 
6. The Council acknowledges the important contribution which the implementation 
of European Union policies may make to the development of the space data 
market in the field of Earth observation and environmental monitoring. However, 
it believes that, in the course of time, this sector should progressively be taken 
over, in most cases, by private investors and recommends that the Commission 
encourage this through the means at its disposal. It recommends that the 
Commission, in cooperation with appropriate partners, should foster the 
development at European level of service companies or new operational entities 
capable of supplying the space information needed to meet requirements. In 
particular, it encourages the Commission to open discussions with EUMETSAT 
as soon as possible to investigate to what extent this body might play an 
operational role in environmental monitoring. 
7. The Council acknowledges the usefulness of Community action in the field of 
education and training in the use of space technology. The Council also 
emphasizes the importance of using space technology for development. It 
encourages the Commission to take appropriate steps in these fields. 
8. The Council takes note of the Commission's proposals in the abovementioned 
fields and recommends that specific efforts should be taken to achieve greater 
complementarity and synergy of work in the context of ongoing and future 
framework programmes of Community RTD activities. It takes note that there 
should be no need for additional funding for the time beeing; it also takes note 
that some activities may require recourse to other form of community support. 
9. The Council calls on the Commission to pinpoint and propose, in cooperation with 
the Member States and the partners concerned, activities to obtain the opening of 
the markets of the main third countries and to help establish a set of international 
rules to guarantee conditions for balanced competition in the market for spacecraft 
launching services. 
10. The Council recommends that a common approach to cooperation with 
international organizations and third countries should be sought between the 
Member States. 
11. The Council recommends that all of these activities should be coordinated with 
those of the Member States and the European Space Agency in order to obtain 
greater synergy between efforts at the European level. It requests that the 
Commission take suitable measures to prepare the cooperation agreements 
required with the European Space Agency and other small agencies concerned. 
It takes note of the Commission's intention to make use of the work of the Space 
Advisory Group (SAG) and other advisory groups. 
Done at Brussels, 
) 
34 
ISSN 0254-1475 
COM(96) 617 final 
DOCUMENTS 
EN 07 88 10 15 
Catalogue number : CB-CO-96-657-EN-C 
ISBN 92-78-13175-X 
Office for Official Publications of the European Communities 
L-29&5 Luxembourg