COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT - THE EUROPEAN UNION AND SPACE: FOSTERING APPLICATIONS, MARKETS AND INDUSTRIAL COMPETITIVENESS
Date: 1996-12-04
Institutions: European Commission
Subjects: aerospace industry, competitiveness, research and development, satellite communications, space policy

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 

Introduction 

The importance  of  space to Europe 

The space industry  -  overall  issues 

2 

3 

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 

Role of the European  actors 

Space telecommunications 

Satellite navigation  and positioning 

Earth  observation  from  space 

Space launch  services 

Defence  and  dual  use  space technologies 

International  cooperation 

Standardisation 

Financing 

Institutional  aspects 

Conclusions 

Glossary 

9 

11 

14 

18 

23 

24 

25 

26 

26 

27 

28 

29 

1. 

2. 

3. 

4. 

5. 

6. 

7. 

8. 

9. 

10. 

11. 

12. 

13. 

14. 

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 
infrastructures 
(telecommunications, land use, urban development, ...) or quality of life (broadcasting, water 
management, ...). 

importance  of  space  technologies  for 

improving 

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* 
773  899  664  685  7Ô5  678  698 
1396  1749  1462  1470  1653  1427  1363 
972  1021  1048  1261  1333  1589  1541 
248  285  265  350  414  419  480 
3389  3954  3439  3766  4105  4113  4082 

National civilian R &D 
ESA 
Commercial 
Defence 
T O T AL 
* 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 

PCs' and 
broadband  * 

Traditional 
geostationar 
y 
47-64 

Space  segment  inc.  launch  and 
operation 
Ground  segment  and user  terminals 
Services  and  applications 
*  satellite personal  communications  services  (PCS) and  broadband  (multimedia)  services  are 
expected  to come  on  stream  in the next  ten  years. 

47-70 
>  100 

27-38 
30-45 

100 
200 

"TOT" 

~TT 

4-5 
8-13 

10-13 

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 

Export 

Commercial 

Government 

Defence 

Expendable launchers 

Communications satellites 

Remote sensing satellites 

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 
(financial,  commercial, 
technical) inherent to the new satellite systems 
being proposed  at  global  scale. 

risks 

the 

Indeed,  a  commercial 

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. 
customer 
purchasing a satellite system  has to consider a 
number  of 
beside  price  and 
technological  performance.  Delivery  times, 
financing,  insurance  and  associated  services 
are  all  elements  in  a complex  package  that  it 
is 
space 
manufacturers  to offer  with  their  products. 

increasingly 

necessary 

factors, 

for 

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 
Simultaneously,  world 
market. 
for 
competition  on 
satellites  and 
is 
becoming  increasingly  intense  and 
global. 

the  markets 
launch  services 

«•  The relevant European Union 
instruments  (including  regulatory 
actions)  should  be used  in order  to 
create the harmonised  environment 
facilitating 
to 
appropriate 
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 

R&D and SYSTEM ASPECTS  of SPACE  COMMUNICATIONS 

12 

DoD satcom budget 
46% 

USA budget 

Sales of commercial 
satcom 
,18% 

NASA R&D 
3% 

NASA satcom budget 
7% 

DoD R&D 
26% 

USA 

TOTAL MARKET FUNDED  =  11862 MECU 

TOTAL PUBLICLY  FUNDED  R&D  =  4900 MECU 

EUROPE budget 

Sales of commercial 
satcoms 
35% 

M R a ry  «ateocn budget 
17% 

MlitaryR&D 
5% 

National civilian 
satcom budgets  ESA satcom R&D 

ESA satcom budget 
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 
industry  and  operators  are  now 
beginning  to  compete  with  their 
own projects  and plans. 

In  relation 
the  full 
liberalisation  of  services,  an  open  access to  space 
segment  and  a  balanced  access  to  satellite  market 
should  be pursued  in WTO ; 

• m\ma^Êm^m^m^^mmmmmmÊmÊm^mm^m^^ 

telecommunicationsi 

••••• 

to 

this  meeting 

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  ; 

On 10 October  1996,  an  informal 
High  Level  meeting  took  place 
between 
the  Commission,  EU 
industry 
and 
m i n i s t e r s, 
representatives to discuss the need 
for  specific  action  in  the  satellite 
communications  sector.  As  a 
result  of 
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 
to  both  R&D  and 
approach 
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 

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. 

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, 

32 

33 

34 

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 

14 

. 

to reinforce  the  cooperation  with  ESA,  and with CEPT. 

6.  Satellite navigation and positioning 

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. 

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. 

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 
industry.  The 
geographical  coverage  and  improved  services.  Both  must  be  supplied  by 
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. 

m 

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Aviation 

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Survey/mapping 

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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 

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. 

17 

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 
system 
answering  the needs of civil users  ; 

a  global 

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 

South America,  Eastern Europe and the countries of the former Soviet Union have 
already expressed interest. 

18 

41 

42 

This work  will  be  carried  out  under a co-operation  framework  aimed  at  meeting  global 
interoperability  requirements and the requirements of international conventions. 

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. 

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 

45 

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. 

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 

46 

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. 

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 
An 
the 
Global  Ocean  Observing  System 
development  of  the  market  for  Earth 
(GOOS)  and  its  European  branch 
observation data-derived services could 
(EUROGOOS),  the  integration  of 
be given by the European Union through 
data  collected  with  other  in  situ 
the implementation  and operation  of  its 
observations could in particular be the 
policies ; 
subject of a European action. 

important  contribution 

to 

52 

the  time  being, 

Atmosphere monitoring - In this  field, 
application  of  space  techniques  are, 
limited  to 
for 
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. 

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 
in  collaboration  with  the 
technology 
appropriate partners taking into account the 
need  of  assuring  continuity  during  the 
demonstration phase. 

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 
environmental 
monitoring ; 

for 

cooperation 

measures  in  the  field  of  education  and 
training, as well as measures to promote 
and 
international 
development,  have  to be coordinated at 
the Union level in close cooperation with 
Member States and relevant organisations 
Space 
the 
notably 
University in Strasbourg 

International 

23 

53 

54 

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. 

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 

57 

58 

59 

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. 

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 

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. 

leadership  position 

Europe's 
in 
the 
launch 
commercial  market  for  space 
services  needs  to  be  maintained  against 
increasing  competition,  characterised  by 
the  presence  of  advanced  versions  of 
existing  US  launchers,  and  the entry  into 
the  market  of  vehicles  from  Russia, 
Ukraine,  and  China.  This  considerable 
increase  in  the  supply  of  space  launch 
in  certain  cases,  at 
services,  and, 
extremely 
to 
destabilise  the  market. 

low  prices, 

threatens 

.r a m ework  of 

A 
international  rules 
designed to secure fair competion in the 
s p a ce 
to  be 
iaU n cher  market  has 
established  ' 

r a n ge  0f 

ja u n ch  vehicles  available, 

^ 
adapted  to  new  market  requirements, 
might be broadened. 

60 

61 

62 

24 

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. 

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 

I H H I

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 
civil  and  military  effort  in  order  to avoid 
duplications  and  make the best  use of  the 
available  public  funding.  The  relatively 
high  cost  of  space  systems  make  them  a 
for  European 
first  choice  candidate 
cooperation, since individual countries will 
have difficulty  reaching the critical mass to 
justify  such an investment. 

T he  Commission 
encourages  a 
coordinated  approach  by  the  European 
U n i o n>  the  Member States, the WEU and 
E SA 
technologies. 

I^M H| ^M M M a H H H^ 

^mmmmÊ^mÊmmMMMHMI 

towards  dual-use 

space 

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 

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). 

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. 

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. 

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 

64 

65 

66 

67 

. 

•• 

'

-. 

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 

Innovative  funding  and  guarantee 
mechanisms,  including  those  of the 
therefore  very  sensitive  to  the  European Investment Bank and European 
Investment  Fund,  should  be used to 
facilitate  the financing of commercial 
space projects 

Space  projects,  and in  particular  those  ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^^ 
corresponding  to  the new applications, 
require  substantial  up front  investments 
with long pay-back periods. These projects 
are 
conditions  in  which  funding  can  be 
obtained,  as  much  as  they  are  to 
manufacturing costs and market conditions, 
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. 

72 

73 

74 

75 

76 

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. 

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 

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. 

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. 

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. 

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. 

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. 

28 

14.  Conclusions 

78 

79 

80 

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. 

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. 

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. 

Glossary 

29 

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. 
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 

the  exploitation  of  METeorological 

for 

UMTS 
VSAT 
WEU 
WTO 

Universal Mobile Telephony  Service 
Very Small Aperture Terminals 
West European Union 
World Trade Organisation 

30 

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. 

2. 

3. 

4. 

5. 

6. 

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. 

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. 

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. 

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. 

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. 

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. 

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. 

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. 

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. 

The  Council  recommends  that  a  common  approach  to  cooperation  with 
international  organizations  and  third  countries  should  be  sought  between  the 
Member States. 

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. 

7. 

8. 

9. 

10. 

11. 

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 

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