Source: EURLEX
Language: en
Format: md

**COMMISSION OF THE EUROPEAN COMMUNITIES**

**Brussels, 04.12.1996**
**COM(96)617** **final**

**COMMUNICATION FROM THE COMMISSION**

**TO THE COUNCIL AND THE EUROPEAN PARLIAMENT**

**THE** **EUROPEAN UNION AND SPACE :**

**FOSTERING APPLICATIONS, MARKETS AND INDUSTRIAL COMPETITIVENESS**

**Table of contents**

1. Introduction 2

2. The importance of space to Europe 3

3. The space industry - overall issues 5

3.1. A changing environment : transition to a global information society

3.2. The growing space applications and downstream markets

3.3. A sector of worldwide competition

3.4 The conditions for industrial competitiveness

4. Role of the European actors 9

5. Space telecommunications 11

6. Satellite navigation and positioning 14

7. Earth observation from space 18

8. Space launch services 23

9. Defence and dual use space technologies 24

10. International cooperation 25

11. Standardisation 26

12. Financing 26

13. Institutional aspects 27

14. Conclusions 28

Glossary 29

**1.** **Introduction**

Space is no longer only a tool to explore the universe and to bring man to new frontiers.
Even if these aspects remain important, space has now also strategic and economic
dimensions. Space applications have opened new markets which are significant on the world
trade scene and which have also brought new ways to satisfy human needs. As space
contributes both to the industrial competitiveness of Europe and to the improvement in the
quality of life of its citizens, the European Union cannot be indifferent about space
developments. This does not mean that the European Union should substitute for relevant
bodies, notably the European Space Agency, in formulating the European space policy but
the European Union should contribute to the full development of the space policy and take
into account the space dimension in the formulation and implementation of the policies
mentioned in the Treaty.

The European Union has had an interest for the space field for about a decade. The
Commission's 1988 communication on space [1] 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 1992 [2], 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 29.4.93 [4], the European Parliament Resolution of 6.5.94 [5] and the ESA
ministerial Resolutions on 10.11.92 and 20.10.95, as well as the discussions during the
European Space Forum on 6.11.95, the views expressed by the Space Advisory Group
(SAG) and the report of the Industry High Level Group of 30.1.96. The next three sections
set the general context of space and it applications within Europe. Sections 5 to 7 deal with
the three most important space applications, while sections 8 to 13 cover some horizontal
policy issues.

**2.** **The importance of space to Europe**

For more than thirty years, space has proved to be of crucial strategic, socio-economic and
scientific importance. The major economic powers have implemented programmes to enable
the parties involved, essentially the public authorities and industry, to demonstrate and
exploit the potential of space technologies. The creation of ESRO, ELDO and then ESA,
alongside national agencies and institutions, have allowed the development of a wide range
of technological capabilities and an important industrial infrastructure. These efforts have put
Europe at the forefront of the space field, though the levels of European spending in cannot
be compared to those of the US or the former USSR.

**World space budgets, MECU**

**USA**

As a result of this investment effort, there are now in Europe some 350 industrial companies
with a degree of involvement in space activities, from the prime contractors to the first,
second or third-level subcontractors and suppliers. Taking a wide definition, this sector

**PV/CONS 22 - RECH 22 - 6280/93 of 5.6.1993**

**OJ.** **C** **205/467, 7.25.1994**

**generates up to 8 bn ECU and represents over 30,000 industrial jobs, with a further** **9,000**
**in related institutions (space agencies, research centres, Universities,** **etc.).** **As comparison**
**there are in US about 200 000 jobs in the space business.**

**To fully appreciate the economic importance of this industry, one must see it as a key**
**element in a much larger value added chain. Typically, the bulk of that chain is made up of**
**services, which together with the ground and user segments may represent more than ten**
**times the value of the spacecraft and launchers. A European strategy towards the**
**development of space activities, as proposed below, must therefore avoid a narrow concept**
**of the space industry which would be limited to the space segment manufacturers, and**
**include these related sectors.**

**Other than the economic stakes, Europe has a strategic interest in the development of, and**
**access to, space applications which have an impact on policy fields such as the information**
**society, environment, agriculture, trans-European networks, regional policy, development aid**
**etc.** **In this context the Union can place space techniques in the proper policy framework and**
**may play a key role of pioneer customer in those applications which are potentially**
**interesting to the implementation of its policies and to the fulfilment of user's needs.**

**Europe's space activities, like in other sectors, are more concentrated in some of** **the** **member**
**states.** **The downstream industries and services concern** **a** **much wider variety of countries and**
**regions, and the same is true for the main space applications. Indeed, it can be said that space**
**systems ignore political boundaries, they equally favour all European regions, in particular**
**less favoured regions, and, thereby, social and economic cohesion within the Union, taking**
**into account the importance of space technologies for improving infrastructures**
**(telecommunications, land use, urban development, ...) or quality of life (broadcasting, water**
**management, ...).**

**This communication addresses the main issues for which there is an immediate Union interest**
**and potential for action. Space science and manned space activities, although important from**
**the strategic and industrial points of view, are essentially within the remit of the European**
**Space Agency (ESA), national agencies and the Member States. In any case, complementarity**
**and synergy between those efforts and Union policies such as research and technological**
**development (RTD), human resources or external cooperation will be actively sought and**
**exploited in order to sustain and potentiate all the sectors where Europe is already or may**
**become competitive.**

**In particular the use of the International Space Station, as a big scientific facility, should be**
**considered in the implementation of the future Framework Programmes.**

**3.** **The space industry** **-** **overall** **Issues.**

_**3.1.**_ _**A**_ _**changing**_ _**environment:**_ _**transition**_ _**to a global**_ _**information**_ _**society.**_

10 The space industry, including the ground segment and related services industries, is having
to cope with a number of external changes which impact on its operating environment :

The end of the geo-political context which had fuelled the growth of the sector for
decades, as well as the economic slowdown and budgetary policies of recent years.
This meant that, for the first time in its history, space employment has fallen in the
last three years.

The increased globalisation and opening of the international marketplace and the
emergence of new competitors. This situation is exacerbated by a current excess
industrial capacity resulting from the above mentioned factors.

Also at global scale, technological developments and the movement towards the
global information society have opened new application areas (satellite personal
communications, multimedia, navigation etc.) whose importance was unforeseen only
a few years ago.

Some of these factors may be of a temporary nature, others will require permanent changes
in the way the industry operates and in the role of public powers in this field. Industry is
conscious of the fact that its present structures will have to be adapted in response to those
changes, but it needs clear signals from the public authorities, as to what the new
environment will be.

_**3.2.**_ _**The**_ _**growing space applications and**_ _**downstream**_ _**markets.**_

11 The level of activity in the European space industry has experienced an interruption of its
growth after 1992, which can be put down mainly to the evolution of government funding.
Meanwhile, their commercial and defence sales have experienced a moderate increase.

**Turnover of the European space industry by origin**
million ECU

```
                 Ï99Ï Î992 Î993 1994 1995* 1996* 1997*

    National civilian R & D 773 899 664 685 7Ô5 678 698

    ESA 1396 1749 1462 1470 1653 1427 1363

    Commercial 972 1021 1048 1261 1333 1589 1541

    Defence 248 285 265 350 414 419 480

    TOTAL 3389 3954 3439 3766 4105 4113 4082

    * forecasts

```

Source: CNES - Eurospace

These figures show (in spite of significant differences between countries) that for the space
industry commercial applications are only one element, not for the time being the dominant

one. However, there is a clear trend for the market element to gain in importance: from 29%
of the industry's turnover in 1991, to a forecast 38% in 1997.

12 As already pointed out, in the market-oriented space applications the space segment is often
only the tip of the iceberg. The bulk of business and employment are to be found in the
downstream, applications-related industries and services which are, furthermore, growing at
a faster rate than that of the space segment. This should not hide, however, the importance
of the space segment as a strategic element in the whole chain. The fact that Europe has a
prominent position in the space segment gives the industry an important leverage in the
application markets, enabling it to sell complete systems and services to international
customers. Moreover, space segment manufacturers often play a key role in the design of
the entire application systems and in the definition of the technical options and standards to
be used by the corresponding ground segment.

13 The following are estimates of the market prospects for the main space applications :

**Worldwide civilian space market: prospects for 1996-2005**
**billion** ECU

Satellite communications Satellite "Remote"
positioning sensing

Traditional PCs' and
geostationar broadband *

Satellite communications Satellite

positioning

PCs' and

broadband *

~TT

10-13

Space segment inc. launch and
operation
Ground segment and user terminals
Services and applications

y

47-64

"TOT"

47-70

- 100

100

200

27-38

30-45

Ground segment and user terminals 47-70 100 27-38 4-5
Services and applications - 100 200 30-45 8-13

- satellite personal communications services (PCS) and broadband (multimedia) services are
expected to come on stream in the next ten years.

Source: ESA - Euroconsult

_3.3. A sector of worldwide competition_

14 The position of the European industry in the space markets which are open to competition
varies between a market share of more than 50% in space launch services, thanks to the
Ariane programme, and 5 % or less in some categories of ground equipment.

In the satellite manufacturing sector, which has a strategic position in the chain, Europe is
currently achieving 20-25 % of prime contractorships at world level, the remaining going to
the US industry. More significantly, virtually all the proposals for the new global and
regional communications systems (personal and broadband services) are US led, with Europe
only now starting a late reaction. The European industry's role as a subcontractor, and
equipments supplier has increased, however, as has Japan's. Japan already leads Europe in
the ground segment markets and, in the medium term, plans to become a satellite prime
contractor and to enter the commercial launch market.

**Competition** **in the** **latter market field** **has** **become stronger, with** **the** **emergence** **of** **new**
**suppliers such as Russia, China and Ukraine. The market for the launch** **of** **small spacecraft**
**is also gaining** **in** **importance, which may prompt the entering** **of** **emerging space powers**
**such** **as** **India** **or** **Israel.**

**Finally, in the remote sensing market, the offers are mutiplying from a number** **of** **suppliers**
**beyond the traditional ones, and** **the** **first commercially-driven missions are being planned**
**in the US.**

**Turnover** **according to destination markets**

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 Commission** **[6]** **, it is important to capitalise on the**
**European** **space** **industry's capacity to translate** **its** **R&D investment** **into** **innovative products.**
**One can say,** **in** **fact, that innovation** **is** **built into this sector, but this** **is** **not enough** **to** **allay**
**concerns that European competitiveness relative** **to the** **(mostly American) market leaders**
**may deteriorate further.**

**Apart from** **the** **fact that** **the US has** **long benefited from** **a** **genuine single market, their**
**advantage** **is** **essentially** **due to two** **kinds** **of** **factors: imbalance** **in** **public support levels**
**between Europe and the US, and Europe's own industrial structure and working methods.**

**Direct and indirect support from** **the US** **government** **to its** **industry impacts both** **on the**
**industry's technological level and on its costs, through, among other factors, economies** **of**
**scale in manufacturing. The latter, related to the manufacturing process and, especially,** **to**
**non-recurring costs,** **are** **seen** **as** **perhaps** **the** **greatest advantage** **to the US** **players.** **For**
**example, today's most successful commercial satellite platform benefited from an initial US**
**Navy order** **of 10** **units. Since then, more than** **50** **have been ordered** **by** **commercial**
**operators. By comparison, the most successful European platforms have not exceeded 10-15**
**orders.** **It** **has been estimated that,** **in the** **past five years, government funding** **of** **the** **US**
**satellite communications industry (through procurement and RTD** **for** **civilian and military**

See the Commission's "Green Paper on Innovation" of December 1995.

programmes) amounted to ECU 9 billions, while commercial sales represented only 26%
of the industry's revenue. The corresponding figures for Europe are respectively ECU 2
billions and 45%. Although this latter share indicates a good performance of the European
industry, the absolute figures highlight the disproportion between the levels of US and
European public funding in this industry.

Given this disproportion, it is vital that all available funding in Europe, whether civilian or
military, at national or European level, is used in the most effective way in order to render
industry more competitive. ESA will remain an important actor and its ongoing reflection
on industrial policy and the application of geographic return is to be welcome. The current
system, originally designed to help the birth of a new European industry, could now be
improved by stressing economic efficiency mechanisms and the objective of world
competitiveness in the market-oriented space
domains.

16 The industry's structure, characterised by
considerable fragmentation and overlapping of
competence both at prime and subcontractor
level, also puts it at a cost disadvantage with
respect to their American competitors who,
moreover, benefit from a mature domestic
market and a much higher volume of
government contracts. It is difficult for the
Europeans to offset that disadvantage through
e.g. superior R&D, marketing, or other
factors. The fragmentation of the European
industry is also a problem when it comes to
facing the risks (financial, commercial,
technical) inherent to the new satellite systems
being proposed at global scale.

The relations between this complex web of
industrial players, and their working methods,
remain largely influenced by space agency
programmes, more than by the needs of the
users. Indeed, a commercial customer
purchasing a satellite system has to consider a
number of factors, beside price and
technological performance. Delivery times,
financing, insurance and associated services
are all elements in a complex package that it
is increasingly necessary for space
manufacturers to offer with their products.

The European space industry has, in the past

The overall international scenario
affecting space is evolving at a great
speed creating new perspectives for
the use of space ; in the context of
the emerging Information Society the
markets for space applications are
developing fast, particularly in the
areas of telecommunications and
navigation, while Earth Observation
is emerging from the realm of science
towards an increased role of the
market. Simultaneously, world
competition on the markets for
satellites and launch services is
becoming increasingly intense and
global.

«• **The relevant** **European** **Union**
**instruments (including regulatory**
**actions) should be used in order to**
**create the harmonised environment**
**appropriate** **to** **facilitating**
**investment and in order to support**
**more efficient industrial structures,**
**encouraging the upgrading of the**
**European space industry in terms**
**of competitiveness and quality.**

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 (19962005), 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 home [1] of satellite television and the
'direct to user [1] of satellite business communications.

26 Two promising new markets present challenges for European industry; when mature, each
should provide industrial and service elements of economic size comparable to that of
today's fixed satellite communications systems. They are :

   - satellite personal communications systems (satellite-PCS), mobile communications for
handheld GSM type terminals and voice/data services, one of which has extensive
participation of European space industry. Each proposed system is targeting 1 to 2
million users worldwide ;

   - very broadband digital communication systems. These systems are based on global
satellite constellations and are intended to serve the explosive demand for Internet type
data, voice and interactive multimedia services as a major building block of the Global
Information Infrastructure ;

_Proposed actions_

27 The Commission proposes to enhance the role of satellite communications. This will be done
in cooperation with ESA, national agencies and Member States, by developing a coherent
set of policies and actions along three main lines: regulatory framework, external policy and
RTD.

28 Advanced technologies for the development of global broadband digital satellite systems (for
fixed or mobile applications) have been developed over the last few years through ESA or
national agency programmes. Such programmes are primarily concentrating on payload
technologies and to a lesser extent, on ground segment technologies. On the other hand,
Union supported programmes are concentrating more on technology and systems
developments for ground segment and applications. Thus, European Union RTD Framework
Programmes and national and ESA programmes should play complementary roles in
promoting the commercialisation of space telecommunications services to address the new

**12**

**R&D and SYSTEM ASPECTS of SPACE COMMUNICATIONS**

**USA budget**

**Sales of commercial**

**satcom**

**,18%**

**NASA** **R&D**

**3%**

**NASA satcom budget**

**7%**

USA

**DoD satcom** **budget**

**46%**

**DoD R&D**

**26%**

TOTAL MARKET FUNDED = 11862 MECU

TOTAL PUBLICLY FUNDED R&D = 4900 MECU

**EUROPE budget**

**Sales of commercial** **M R a r** **y «ateocn** **budget**
**satcoms** **17%**

**35%**

**MlitaryR&D**

**5%**

**National civilian** **ESA satcom budget**
**satcom budgets ESA satcom R&D** **21%**

**3%** **19%**

EUROPE

TOTAL MARKET = 3712 MECU

TOTAL PUBLICLY FUNDED R&D = 1304 MECU

Relative size of Europe / USA budgets from 1990 to 1994

Source : European Commission (1995)

**29**

**30**

31

13

passive markets for communications and multimedia services, including Internet broadband
access systems.

In the field of mobile communications, research is today primarily centred around the
development of the GSM follow up, also called UMTS (Universal Mobile Telephony
Service). In Europe, the 4th Framework Programme provides a major source of funding
through its ACTS component. There will be a need to continue the integration effort, in
such a way that European industry is in good position to provide terminals for next
generation mobile networks, with both terrestrial and satellite communications capabilities,
thus maintaining the leading position obtained with GSM.

On 10 October 1996, an informal
High Level meeting took place

a harmonised regulatory regime for the introduction

between the Commission, EU

of satellite PCS services in Europe has to be

ministers, and industry

consolidated, in conjunction with member States ;

representatives to discuss the need
for specific action in the satellite the concertation of European positions in
communications sector. As a

international fora, in particular on the allocation of

result of this meeting the

frequency spectrum and orbital allocations, has to

Commission has announced in the

be increased ;

Telecommunications Council of

November 28, 1996, that, as part

a specific Action Plan on key issues for satellite

of its commitment of a partnership

communications adressing in particular issues of

between public and private sector

the regulatory framework, the strengthening of

players, it will present a coherent

efforts at European level in international fora, and

approach to both R&D and

research and development aspects will be proposed

regulatory/policy matters for the

by the Commission.

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**

Advanced broadband digital communications satellite systems are now being planned to
provide communications infrastructure to support the Global Information Society, based on
constellations of satellites in either geostationary or non-geostationary orbit, and optimised
to serve the demand for Internet-type data, voice, and interactive multimedia services. Whilst
initially almost all these initiatives
came from the US, both European - •••• - _m\ma^Êm^m^m^^mmmmmmÊmÊm^mm^m^^_
industry and operators are now In relation to telecommunications i the full
beginning to compete with their

liberalisation of services, an open access to space

own projects and plans.

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

a harmonised regulatory regime for the introduction
of satellite PCS services in Europe has to be
consolidated, in conjunction with member States ;

the concertation of European positions in
international fora, in particular on the allocation of
frequency spectrum and orbital allocations, has to
be increased ;

a specific Action Plan on key issues for satellite
communications adressing in particular issues of
the regulatory framework, the strengthening of
efforts at European level in international fora, and
research and development aspects will be proposed
by the Commission.

**present Communication and its objective shall be :**

**.** **to present a framework in which private and public partners cooperate,**

**.** **to stimulate the satellite sector to take initiatives and lead the public sector actors**

**.** **to propose concrete actions in order to advance in broadband multimedia via satellite** **and**
**in personal communications**

**to reinforce the international position both at policy and industrial level. In particular,**

14

the concertation of European positions on the allocation of frequency pectrum and
orbital allocations has to be increased in international fora ;

. to review the satellite communications aspects in the Community R&D programme, with
a view to increase its relative position

. to reinforce the cooperation with ESA, and with CEPT.

**6. Satellite navigation** **and** **positioning**

32 Satellite positioning systems (GPS and GLONASS [7] ) have been deployed for military
purposes by the US and Russia. Non-encrypted signals from these systems are available free
of charge for civilian use, which has opened up a market for navigation equipment,
increasingly used in all modes of transport, and for positioning equipment used in a wide
range of other applications. Satellite navigation and positioning systems are thus evolving
from a primarily military to a wider civilian use.

33 Several studies underline the prospective benefits of satellite navigation all over the world.
The advantages to be gained over existing systems include simplification through the use of
a single system which could meet all users requirements operating world-wide 24 hours/day.
A space based system will also provide improved accuracy of position and velocity
measurement which will lead in turn to a reduction of waiting times, fuel savings, better
environmental protection and a reduction in the number of accidents: the estimated savings
are about 20 bn ECU/year world-wide. Such considerations have led both the International
Civil Aviation Organisation (ICAO) and the International Maritime Organisation (IMO) to
adopt space based systems as key components of the next generation of navigation and
positioning services.

34 Apart from the social and economic benefits one has also to consider the industrial
opportunities. Since satellites have only a limited lifetime, space segments must be
continuously maintained and updated. Ground segments must be extended to provide greater
geographical coverage and improved services. Both must be supplied by industry. The
market for user equipment already amounted to MECU 477 in 1994, and is predicted to rise
to ECU 4 billions in 2000 and ECU 25 billions in 2005. A market of comparable size is
also developing for peripheral services and hardware units.

Experience shows that only those nations and industries with a decisive influence on the
system infrastructure will remain competitive in the market. The objective of the European
Union is to raise European industry to a level of competitiveness enabling it to participate
in the deployment of a Global Navigation Satellite System (GNSS), in the definition of
interoperability requirements and industrial standards, thereby giving industry the
opportunity for an early entry in the market.

The free availability of the signals and the political complications due to the dual use
character of today' systems, however, make it very difficult for a purely private initiative
to open the door to Europe's full participation in this market, and only a governmentindustry 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**

**75**
**(0**

**MUitary**

**Marine**

**Aviation**

**GIS**

**Survey/mapping**

**OEM** **os**
**OS**

**Tracking**

**Cellular**

**4 Carnavigation**

**2**

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**a**

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**16**

**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 Commission** **[8]** **, Council** **[9]** **and the European** **Parliament** **[10]** **have recognised the need for**
**Europe to play a key role for the implementation of GNSS and adopted a two-track**
**approach:**

**A European augmentation to** **the** **existing military Constellation GPS and GLONASS**
**in order to meet the civilian users requirements** **(GNSS-1)** **and at the same time,**

**Preparatory work for the design and organisation of the second generation system**
**(GNSS-2).**

**The Commission has also set up a High Level Group consisting of representatives from**
**national governments, users, industry, relevant industrial organisations** **and** **potential service**
**providers which assists the Commission in the development of an Action Plan for**
**deployment of GNSS.**

**37** **To co-ordinate the European Contribution to GNSS-1 and initiate actions on GNSS-2 the**
**European Community with ESA and EUROCONTROL have gathered their efforts within**
**the European Tripartite Group (ETG). The Community provides the political support and**
**complementary financial support for projects through its Trans-European Transport**
**Networks policy and its telematics and transport RTD programmes. ESA implements the**
**ground segment and will operate the European Geostationary Navigation Overlay System**
**(EGNOS) until it reaches the Advanced Operational Capability (AOC) phase. When AOC**
**has been completed, EGNOS can be approved as a primary means of navigation.**
**EUROCONTROL defines the Civil Aviation requirements and will validate the system in**
**accordance with those requirements.**

**More specifically, the Commission is supporting the following actions :**

**From** **the** **Telematics applications programme of** **the** **Fourth Framework Programme,**
**and concerning GNSS-1, several projects address the development of on-board**
**receivers and demonstrate the ability of local area augmentation systems for air, sea**
**and rail applications. At the same time, preparatory work has been launched which**
**will identify the operational and functional requirements for a GNSS system,**
**encompassing both GNSS-1 and GNSS-2.**

**From the Transport research programme, concerning the potential benefits of the**
**application of satellite-based services, a project assesses the transport policy**
**requirements for the integration of information, communication and navigation**
**technologies.**

**8**

Communication on the Satellite Navigation Services. COM(94)248 of June 1994.
9 Council Resolution 94/c379/02 of 19.02.94.

10 E.P. Resolution 209.909 final of 30.11.94

17

Within the Trans-European Transport Network actions, support has been given to
provision of access to the Inmarsat III navigation payloads ; a Council decision has
been adopted which provides guidelines for the implementation of a Trans-european
Navigation and Positioning Network [11] .

38 Within the framework of the Common Transport Policy, a baseline European
Radionavigation Plan (ERNP) is currently being developed, taking into account the
requirements of international bodies (IMO, ICAO, ITU). The ERNP will help in the
rationalisation and harmonisation of European policies concerning radionavigation systems
facilitating among others the introduction of satellite based services. Studies are being
launched, one of them is to analyse the costs and benefits of a contribution to GNSS. This
study shall analyse in particular the benefits to users from the various sectors. Another
study is to design an international system and determine the nature and thoroughly analyse
the approach to a future system.

39 Position determination by satellite may be used in surveillance systems and therefore in the
monitoring of the implementation of Commission policies. As an example, the Commission
is preparing a proposal for a Council regulation on the establishment of a satellite vessel
monitoring system for the control of the Union Fisheries Policy.

_Proposed Actions_

40 With the assistance of the High Level Group, the Action Plan will be drawn up to cover :

Proposals for institutional arrangements to facilitate the channelling of investments,
placing of contracts and solving of ownership problems. Extending the remit of an
existing agency or the creation of a new body are two of the options under
consideration to ensure the provision of the appropriate infrastructure which will
satisfy the certification requirements.

Definition of a legal and regulatory framework with provision for different operators
to provide navigation and positioning services to specific users.

Definition of the configuration and
implementation schedule for Full
Operational Capability (FOC) which
provides fail safe operation needed
for safety critical operation by
providing redundancy in ground and
space segments.

Identification of funding options for
the deployment of FOC to start not
later than 1999.

As regards navigation and positioning
services by satellite, Europe should play
a key role by its participation to the
development of a global system
answering the needs of civil users ;

A specific action plan under preparation
will be presented by the Commission.

Agreements with other countries or regions who have no space segment but wish
to offer satellite navigation services over their territory and are willing to contribute
to the required extensions to EGNOS. African countries, the Indian Ocean region,

**ii** Decision 1692/96/EC of 23/7/96 O.J. L 228

**18**

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

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

**41** **Due to public investment amounting to ECU 10 bn for the supply of GPS, backed up by**
**substantial orders for military terminals, the US has dominated the satellite navigation**
**market. This experience has been used to draw up de facto standards in national bodies and**
**are already being used to construct equipment. There is a danger that these will be adopted**
**as international standards under pressure from current users. Urgent action is needed to**
**strengthen the European standardisation process with a view to adopting a common**
**European Position in critical areas. The global objective should be to discuss regional**
**standards between Europe and the US before discussion within international bodies.**

**42** **Certification of a space system issues new challenges to regulators especially those**
**responsible for safety of life level services. Relevant authorities must decide on their**
**certification policy for** **GNSS1** **which depends ultimately on a system or systems (GPS,**
**GLONASS) which are under the ultimate control of the military authorities of the US and**
**Russia. By consequence, deployment of** **a** **European specific contribution to GNSS-2 offers**
**the** **appropriate way for Europe to maintain its sovereignty** **in** **the** **area** **of satellite navigation.**

**43** **Although GNSS-2-related developments have been initiated in Europe these** **are** **on too small**
**a scale to provide realistic competition and the following urgent actions are needed :**

**Speedy approval of the Action Plan, especially the institutional arrangements.**

**Support for industry to develop user segment equipment particularly for land**
**applications.**

**Initiation of work for the design, development and organisation of GNSS-2, adding**
**to the preparatory work already done under the Fourth Framework Programme and**
**under ARTES 9 by ÉSA, leading to** **an** **in orbit demonstration of industry's capability**
**to supply the system. Support of relevant actions** **in** **the Fifth Framework Programme**
**in close cooperation with ESA and national agencies.**

**To speed up the process, the possibility must also be considered of a European dedicated**
**navigation** **payload, which may be launched in combination with another system including**
**services other than navigation.**

**7.** **Earth observation from space**

**44** **In the last 25 years, Europe, thanks to ESA and national Space agencies programmes, has**
**established a sound base in satellite observation of the Earth with the SPOT, ERS and**
**METEOSAT series which has to be exploited to the full. As regards meteorological**
**satellites, for example,** **EUMETSAT** **operates systems meeting the needs of European States**
**and contributes to a global meteorological system providing services throughout the world.**

**45** **The world market for civil remote sensing, in the decade ahead, is estimated at a minimum**
**of ECU 12 billions for satellites and the corresponding launches, ECU 1.2 billions for data**
**sales,** **ECU 4 billions for terrestrial receiving** **and** **processing equipment** **and** **more** **than** **ECU**
**12 billions for services related to value-added products and services. According to recent**
**estimations the whole market for data and related services (excluding meteorology) would**
**be about 270 MECU for Europe in 2000. So far, the customers are mainly public entities.**
**Not only must potential clients be shown that the data supply is cost effective for their**

19

application, but also that the data can be delivered reliably, in good time, and for the
foreseeable future, Given the limited revenue from sales, the value added industry has been
unable until now to invest in attracting new customers. Although the potential is promising,
the European market in data from satellite observation of the Earth is still largely
underdeveloped and needs a major European effort to make it grow.

46 Given that the EU is amongst the largest purchasers of data services in Europe, it is
uniquely placed to play a fundamental role in developing this market, both as a pioneer
customer and by supporting the development of data derived information services. This was
indeed advocated by industry, which specifically recommended a "two step approach" as a
phased means of establishing self sustaining markets. This constitutes a way to ensure the
continuity of service, given a regular and adequate provision of new systems, which is the
responsibility of industry and other organisations. In the longer term, once the market is
consolidated, it will be industry's role to deliver data services to customers on a commercial
basis.

However, industry will be able to do this only if it has clear indications as to the market
stability and size. Here the Commission could provide a significant contribution by
accurately expressing Europe's requirements for Earth observation and corresponding
services with a related estimate of the annual value of those services, this expression being
divorced from any perception of the ability, or otherwise, of Earth observation technology
to supply those services. On the basis of this assessment, the challenge to Industry will be
to improve the quality, timeliness and cost of those services whilst developing a profitable
business. Industry needs also appropriate financial engineering instruments enabling it to take
the risks associated with the development of any new advanced technologies.

47 An important step in the direction of further developing the field was the joint document by
ES A 5 EUMETSAT and the European Commission [12] 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_
_JRC_ _[K]_ _s_ _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_ _[ K]_ _s_ _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 important contribution** **to 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**

**subject of a European action.**

**Atmosphere monitoring -** **In this** **field,**
**application of space techniques are,**
**for the time being, limited to**
**scientific research. Initially benefit**
**will be drawn from existing missions**
**in order to demonstrate the feasibility**
**of the technique from an operational**
**point of view. Future** **"explorer**
**missions" could be envisaged in**
**cooperation** **with** **ESA** **or**
**EUMETSAT.**

**52** **To reinforce the necessary scientific and**
**technical base and promote the use of**
**scientific results to develop operational**
**applications, the Commission will continue**
**to implement the Union RTD** **Framework**
**programmes particularly as regards basic**
**methodological research and pilot and**
**demonstration projects of** **a pre-operational**
**nature in the above areas** **and** **in other less**

**advanced sectors. Work will be also**
**carried** **out on** **applications** **and further**
**development of sensors using** **advanced**
**technology in collaboration with the**
**appropriate partners taking** **into** **account the**
**need of assuring continuity during the**
**demonstration** **phase.**

**An important contribution** **to the**
**development of the** **market** **for** **Earth**
**observation** **data-derived** **services could**
**be given by** **the** **European** **Union** **through**
**the implementation and operation of its**
**policies ;**

**methodological research** **and** **pilot project**
**will be proposed in dedicated areas of**
**community interest ;**

**this sector should be progressively taken**
**over in most cases by private investors**
**and the Commission should facilitate this**

**process ;**

**the development of service organisations**
**and new European operational entities**
**designed to deliver space information**
**services have to be stimulated ;**

**discussions with EUMETSAT will be**
**opened to explore its possible role in**
**providing** **data** **for** **environmental**
**monitoring ;**

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

**23**

53 The Union's programme for a Centre for Earth Ob? vation (CEO) has an important role
to play in the above. Aimed at bringing together the u:crs and suppliers of data, it will allow
quicker and easier access to such data by promoting _iho._ development of common standards
and formats. The CEO will also keep users better informed, enabling them to make full use
of the processed information, while giving to the data providers the appropriate means and
tools to satisfy the users needs. It will thus be an integral part of future operational systems.

54 The development of the market also involves the training and education of potential users,
particularly those using Earth observation data services in the decision making process,
including those of developing countries. The Commission will continue the action undertaken
in collaboration with ESA, the space agencies in the Member States and at international level
(such as the International Space University).

55 Where the need is perceived, and with the appropriate organisations, the Commission will
foster the creation of new European operational entities. In particular, in the field of
environmental monitoring, it will explore with EUMETSAT, and the partners concerned,
the possibility of that body providing space data relevant to this field.

56 In order to foster the applications of Earth observation from Space, the Commission will
continue to study legal aspects of the use of Earth observation data as well as the broad
principles of a data policy in agreement with the opening of a commercial market. The
question of the frequencies and orbital slots allocation will be also taken into consideration
by the Commission in international négociations.

57 Finally, the Commission, jointly with his partners, will give further consideration to the
establishment of a coherent European strategy to develop and implement operational systems
for observing the Earth and its Environment. Such a strategy for coordinating systems
already existing or planned at the European level without compromising their identities will
give Europe the opportunity to make full and coherent contribution to the setting up of an
Integrated Global Observing Strategy as proposed in the CEOS.

8. Space launch services

58 The need for Europe to secure an independent capability to provide applications satellite
systems, be they for telecommunications, television or Earth observation, was a key political
driver in the original decision in the early 70s to undertake the Ariane programme. This
political commitment, which furthermore achieved for Europe a leadership position in the
commercial market for space launch services, largely paying back the Member States'
investment, is still valid today and remains a pre-condition for the continued access of
Europe to space and space applications.

59 Europe's leadership position in the
commercial market for space launch
services needs to be maintained against A . rame work of international rules
increasing competition, characterised by designed to secure fair competion in the
the presence of advanced versions of s p a c e [ ia] Unc [her] [ market has to be ]
existing US launchers, and the entry into established '
the market of vehicles from Russia,
Ukraine, and China. This considerable _^_ r a n g e 0 [f] [ j] a u n c h [ vehicles available, ]
increase in the supply of space launch adapted to new market requirements,
services, and, in certain cases, at might be broadened.
extremely low prices, threatens to
destabilise the market.

**24**

**60** **A fundamental condition for the maintenance and further development of** **Eurc^jan** **space**
**launch services is a degree of market access similar to that offered in the EU and the**
**existence of fair trading conditions. As regards market access, the objective should be not**
**only to ensure that there are no restrictions for space launch services provided for civilian**
**uses,** **but also that there are no nationality conditions attached to space launch services**
**provided to governmental entities. The latter are very frequent in countries such as China**
**and the USA, whereas the EU has an open market. This should be adressed primarily in**
**WTO,** **where the GATT covers space launch services. The Commission and the European**
**industry are convinced that it should be in Europe's interest to start exploring the possibility**
**to discuss and establish basic rules ("Rules of the Road") for the conduct of open and fair**
**competition among the most important space launch service providers. This should include**
**the issues of public support to this industry as well as balanced access to each country's**
**domestic market.**

**Such negotiations should include the US, whose industry benefits at an extraordinary and**
**unequalled level of governmental support and military programmes, as well as emerging**
**suppliers like Russia, Ukraine and China. A particular aim would be to give an important**
**neighbour like Russia the chance of a smooth and progressive integration into the market for**
**commercial space launch services on a fair and balanced basis. The Commission will work**
**actively with Member States in order to arrive at a common long term strategy in this sector**
**and reach a practical solution for the conduct of international negotiations. This focus on a**
**forward looking international strategy aimed at opening markets, exploiting new**
**opportunities and creating fair trading conditions, implies that market opening agreements**
**would render redundant market sharing ones.**

**61** **The rapid growth in proposals for communications satellites for satellite personal systems**
**and for broadband communications using non-geostationary orbits (LEOs, MEOs) leads to**
**a broadened requirement for launch services over that of the basic market for satellites in**
**the geostationary orbit. The Commission regards the continued presence of European**
**industry in** **the** **provision of** **launch** **services as essential, and encourages the competent space**
**agencies** **and** **industry to consider how best to maintain** **a** **comprehensive European offer over**
**the whole spectrum of launch vehicle services.**

**9.** **Defence and dual use space technologies**

**62** **Although it is not within the Commission's remit to consider the military aspects of space**
**technology applications, any European**

**strategy should ensure the convergence of** **I** **H** **H** **I** **I** **[^]** **M** **H** **[| ^]** **M** **M** **M** **a** **H** **H** **H** **[^ ]**
**civil and military effort in order to avoid**
**T h e**
**duplications and make the best use of the** **Commission** **encourages** **a**
**available public funding. The relatively** **coordinated approach by the European**
**Union**
**high cost of space systems make them a** **>** **the** **Member** **States,** **the** **WEU** **and**
**first choice candidate** **for European** **E S A** **towards** **dual-use** **space**
**cooperation, since individual countries will** **technologies.**
**have difficulty reaching the critical mass to** _**^**_ _**mmmmÊ**_ _**^**_ _**mÊmm**_ **MMMHMI** _**mnËÈm**_
**justify such an investment.**

**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** **industries** **[13]** **, strong and competent**
**industrial bases hold the key to Europe's independence and hence any common effort**
**contributing to the strengthening of these capacities must be welcomed and stimulated.**

**10.** **International cooperation**

**64** **Since the removal of** **East-West** **barriers, international cooperation and exchanges in space**
**programmes have flourished in previously impossible ways, a trend encouraged by**
**budgetary restrictions and the realisation of common interests. At the same time, in the**
**private sector, international risk sharing in the new information and multimedia industries**
**is fostering the access to new markets, by bringing together industry and a number of**
**different actors. Europe must be a key player in these international partnerships, provided**
**that they are balanced. This implies that Europe must keep or acquire a critical mass, at**
**least in the fields where this is not yet true, in order to draw full benefit from international**
**cooperation with its large economic partners. This situation also implies a coordinated**
**approach to problems at European level, and the appropriate concertation structures.**

**In this perspective, the opportunities for industrial and technological cooperation with**
**established players such as the US, Russia, China and Japan, but also the emerging ones**
**such as India and Brazil, must be considered.**

**International cooperation is also needed in the field of space wastes and the Commission**
**could give a contribution to the already on-going works in various instances (UN, ESA).**

**65** **International cooperation in space technologies may enable certain objectives of the Union**
**to be met, as regards third countries. The countries of Eastern Europe should benefit from**
**an early integration in trans-European networks, and therefore should be associated to the**
**European initiatives such as those in satellite communications and satellite navigation.**

**66** **Some of** **the** **countries from the former Soviet Union could also be partners in space relevant**
**projects. Within** **the** **framework of its economic cooperation with** **the** **New Independent States**
**(NIS)** **the Commission will continue to provide under the** **TACIS** **programme technical**
**assistance to the aerospace industry. Through the International Science and Technology**
**Centre in Moscow it will finance scientific cooperation with a view to integrating the**
**scientific potential of the NIS into the global scientific community.**

**67** **As for the developing countries, such as in the Mediterranean basin, space technologies can**
**provide some pertinent solutions. Some of the possibilities were highlighted during a**
**workshop on** **"** **the construction of** **the** **Euro-Mediterranean Information Society - regulation**
**framework and** **Developement** **of Communication Networks for Economic Cooperation**
**(Palermo, 6/7 th may 1996). In the light of the needs, the Union can take action under**
**several of its mandates, whether they relate to RTD, development aid or economic**
**cooperation. Depending on their level of technical maturity, the implementation of these**
**space-derived solutions necessitates a considerable concertation effort, which the**

**13** **COM (96) 10 final**

. _•_ _•_ '                                                                                                                                                                                                         - . 2 6

Commission proposes to undertake together with the developing countries and the partners
concerned (agencies, industries, etc.) with the support of the appropriate Union instruments.

**11.** **Standardisation**

68 The space industry has to cope with very stringent requirements in terms of quality and
reliability. In Europe as elsewhere, the need to standardise products and procedures in this
field has long been recognised. If anything, Europe's complex industrial structure makes
such a need more pressing. Following a number of past attempts, the European Cooperation
for Space Standardisation (ECSS) has now managed to put together a group of agencies and
industry players which offer no doubt as to their European representativeness. Their
programme aims at a comprehensive and coherent system of standards, based on a
commercially-oriented strategy.

In order to foster the competitiveness of European industry, the Commission has given a
mandate to ECSS and the European standards organisations CEN, CENELEC, and ETSI,
inviting them to agree an cooperation arrangements and to elaborate an overall
standardization strategy, identifying areas where standardization activities are to be carried
out at the European level and at international level and identifying those specifications which
should become formal standards and those which should remain within the exclusive sphere
of ECSS.

**12.** **Financing**

69 Space projects, and in particular those ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^
corresponding to the new applications,
require substantial up front investments Innovative **funding** **and** **guarantee**
with long pay-back periods. These projects mechanisms, including those of the
are therefore very sensitive to the European Investment Bank and European
conditions in which funding can be Investment Fund, should be used to
obtained, as much as they are to facilitate the financing of commercial
manufacturing costs and market conditions, space projects
whilst European players have had to cope '
###### with the exchange risk associated with the " ^ ^ ™" ™™" • » • • • i » ^ ™

fluctuations of the US dollar.

Space is generally associated with an image of high-risk technologies, with new applications
in unproven yet potentially very competitive markets. However, this situation is evolving,
with investor attitudes becoming more positive. New systems such as satellite PCS are
offering "franchising" opportunities for rights to offer services in specific regions against
equity investment in the system costs. To the extent that the European environment is
perceived as an obstacle to the financing of similar initiatives in Europe, the EU can play
a direct and indirect role in improving this situation.

70 Directly, the Commission will seek to identify and support projects of European interest in
the fields of telecommunications, navigation control and Earth observation. These projects,
on which all European partners should cooperate, will in principle be based on already
existing or planned programmes of the Member States, ESA or national space agencies.
Among other things they should use the resources of the RTD Framework Programme.
Other resources could be made available under the framework of Trans European Networks,
or, in accordance with the appropriate procedures, making use of the structural funds,
agricultural development or cooperation budgets. It is worth noting, however, that the
relevant parts of the Framework Programme as well as other instruments are severely

**27**

constrained, and can at best provide a useful complement to the projects in question.

Initially, there should be no need for additional funding over and above existing levels and
it should be a question above all of reallocating available funds among the topics selected
as having a European interest, and achieving greater complementarity and synergy of work.
Future needs will be determined on the basis of exploratory studies to be carried out in
connection with specific selected projects. At the same time, the private sector should be
called to take more responsibility in the implementation of these projects and to develop the
appropriate infrastructures with the support of the public authorities.

71 Indirectly, the EU can give a major contribution to improving investment conditions, first
of all by reducing the uncertainty which arises from the regulatory environment, trade policy
regimes, etc. Initiatives from the Commission in promoting innovation or supporting SMEs
could also pave the way to complement and facilitate the decision of the potential partners,
financial entities, operators and users, to take risks in space-based commercial ventures.

The Union's contribution as a pioneer customer or demonstrator of space applications will
also help service providers secure further private finance for space missions. In the context
of Earth Observation, this has been described as a "two-step approach" to the development
of a self-sustained industry.

72 The European Investment Bank (EIB), from 1990 to date, has provided resources worth
more than ECU 1.5 billion for the funding of 15 European satellite communications projects.
The Commission proposes to pursue and activate discussions with the EIB and the European
Investment Fund to define appropriate ways and means to facilitate access to their respective
funding mechanisms.

13. Institutional aspects

73 It is necessary to implement or improve structures of collaboration and cooperation to
reinforce the synergy of the European space effort at Member State and international level,
maximising the return on the investment made, and ensuring respect for the individual
responsibilities of the various partners in developing a coherent overall strategy. These
structures should develop a sound relationship between Union bodies, national and European
space agencies, industry, users, and other relevant scientific or operational entities. In order
to improve complementarity of RTD activities, recourse to art 130K and L could be
envisaged by the Commission.

74 The role of the Space Advisory Group set up in 1993 to provide a forum for discussing the
broad lines of Union action in the space field will be strengthened to allow coordination and
concertation of actions carried out at national or Union level.

75 Cooperation between the Commission and the European Space Agency, ESA, which
currently has observer status at the Space Advisory Group, will be improved under the basis
of Article 130M of the Treaty, respecting the independent status of this Agency, and under
a negotiating mandate to be requested from the Council.

76 On the basis of Art. 228 of the Treaty, the Commission is proposing moreover to put in
place appropriate structures for the management of specific projects selected in agreement
with the partners concerned and with the involvement of users (the tripartite group
EC/ESA/EUROCONTROL set up for the GNSS-1 project is an example for consideration).
For example the Community, jointly with its partners, is promoting the development of an
European Economic Interest Grouping (EEIG) to carry out such projects.

**28**

77 In the trade policy area, in order to ensure fair competition with third countries in the
commercial market for space launch services, the Commission and Member States must find
an institutional compromise for the conduct of international negotiations. The Commission
will continue to search for a rapid and practical solution and encourages the Member States
to be forthcoming on this issue.

**14.** **Conclusions**

78 This Communication highlights the urgent need for action in order to establish an
appropriate environment for the development of applications of space techniques and to
improve the competitiveness of European industry at world level.

79 Proposals in the above fields will be made by the Commission within the current and future
RDT Framework Programmes with the key goal of consolidating the European satellite
based infrastructure ; certain activities could necessitate the use of other forms of
Community support according to the particular modalities concerned, concrete measures will
be taken by the Commission.

80 All these initiatives should be coordinated with those of Member States and of the European
Space Agency in order to obtain, within European Union rules, the maximum degree of
flexibility and synergy at the European level ; the Commission, together with the European
Space Agency and other organisations concerned, will take the necessary steps to this end;
the Commission will continue to rely on the advice of the Space Advisory Group (SAG) and
other advisory groups and to maintain regular dialogue with industrialists **and** users.

81 The Council is requested to adopt the attached Resolution.

**29**

**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**

**Glossary**

**Advanced Communications Technologies and Services**
**Advance Operational Capability**

**Advanced Research and Telecommunication Systems**
**Comité Européen de Normalisation**
**Comité Européen de Normalisation Electrotechnique**

**Centre of Earth Observation**

**Committee on Earth Observation Satellites**

**Conférence Européenne des administrations des PTT**
**Centre National** **d'Etudes** **Spatiales**
**European** **Cooperation** **for Space Standardisation**

**European** **Economie** **Interest Groupings**
**European Geostationnary Navigation Overlay System**
**European Investment Bank**
**European space vehicle Launcher Development Organisation**
**European Radionavigation Plan**

**European Remote Sensing Satellite**
**European Space Agency**
**European Space Research Organisation**
**European Tripartite Group**
**European Telecommunications standards Institute**
**European org. for the exploitation of METeorological**

**SATellites**

**European association for Air Traffic Control**
**EUROpean Global Ocean Observing System**
**EUROpean SPACE industry association**
**Full Operational Capability**
**GLObal NAvigation System Satellite**
**Global Navigation Satellite System**
**Global Ocean Observing System**
**Global Positioning System**
**International Civil Aviation Organisation**
**International Maritime Organisation**
**INternational** **MARitime** **SATellite organisation**

**International Telecommunication Union**

**METEOrological SATellite**
**New Independent States**

**Personal Communications Services**

**Space Advisory Group**
**Small and Medium Entreprise**

**Satellite Pour** **l'Observation** **de la Terre**
**Technical Assistance for the Commonwealth of** **Indépendant**
**States**

**30**

**UMTS** **Universal Mobile Telephony Service**
**VSAT** **Very Small Aperture Terminals**
**WEU** **West European Union**
**WTO** **World Trade Organisation**

## **3/**

**PRELIMINARY DRAFT COUNCIL RESOLUTION ON**
**"THE EUROPEAN UNION AND** **SPACE:Developing** **applications, markets and**

**industrial competitiveness**

```
THE COUNCIL OF THE EUROPEAN UNION,

```

Having regard to the Treaty establishing the European Community, and in particular
Article 130f thereof ;

Having regard to the communication from the Commission on the European Union and
space [1] ;

Having regard to the Opinion of the European Parliament [2] ;

Considering the political, socio-economic and scientific interest of space technology
applications for the European Union ;

Considering the efforts which the European Space Agency and the Member States of the
Union have been making for more than 20 years to develop European space capabilities
and to stimulate the development of a competent European industry ;

Considering the action undertaken by the Commission, in particular by the Joint Research
Centre, in the field of space technology applications in the context of the European
Community Framework Programme of research and technological development ;

Considering the major role of industry, including small- and medium-sized undertakings,
in the development of space technology applications and the corresponding services ;

Whereas Community action should, in accordance with the objectives set out in the
Treaty, aim to promote the Union's prosperity through greater industrial competitiveness,
improvement of the quality of life and sustainable development ;

Whereas the formulation and implementation of Community activities must take account
of the objectives of economic and social cohesion within the Union ;

Whereas, in accordance with the principle of subsidiarity, the Community may only
intervene if and to the extent that the aims of the proposed activity cannot be achieved
more satisfactorily by the Member States and are therefore, because of their scale or
impact, best carried out at Community level ;

Whereas Community action should focus on selected activities which meet specific
criteria ;

#### **_Il_**

HAS ADOPTED THIS RESOLUTION:

1. The Council recognizes the importance of a concerted European approach to the
development of space technology applications and the urgent need for Community
action in this respect to strengthen the European presence in markets for these
applications, while creating conditions favourable to the emergence of new
markets.

2. The Council encourages the Commission to continue with its efforts to create an
economic environment suitable for increasing the competitiveness of the European
space industries at world level. In particular, it recommends that the Commission
support the drawing up of common standards for space products and procedures.
It also recommends that the Commission consider how financial engineering
instruments might help in carrying out space projects, enabling the European
industry to enter into the development and supply of new services without
excessive risk.

3. The Council supports the action taken by the Commission as regards the
development of space technology applications, in particular in the sectors of
telecommunications, navigation, Earth observation and environmental monitoring.
It calls on the Commission to continue with its action and to report regularly to
it on its implementation. However, the Council also wishes to emphasize that no
field of activity should be excluded _a priori._ As far as dual-use civil and military
technologies are concerned, the Council recommends a coordinated European
approach and calls on the Commission to take appropriate steps in this respect.

4. The Council stresses the importance of space systems for the development of the
information society at world level. It believes that the measures proposed by the
Commission to open up services and develop infrastructures will contribute to
creating an environment favourable for the development of the telecommunications
market and European competitiveness. It therefore encourages the Commission
to pursue its action which will lead to the full opening up of these services, free
access to the space sector and balanced access to the satellite market in the context
of the World Trade Organization. The Council in particular encourages the
Commission to seek further alignment of the European positions on the allocation
of frequencies and orbital positions in close cooperation with the Member States
and the organizations concerned.

5. The Council recognizes the importance for Europe of confirming its role in the
field of satellite navigation and positioning services. It supports the action taken
jointly by the Commission, the European Space Agency and Eurocontrol for the
establishment of an international interoperable civilian system and recommends
that the Commission continue with its efforts to develop the European component
of this system. It also recommends that the Commission consider the possibility
of setting up a new operational body at European level in this sector in order to
meet user requirements.

6. The Council acknowledges the important contribution which the implementation
of European Union policies may make to the development of the space data
market in the field of Earth observation and environmental monitoring. However,
it believes that, in the course of time, this sector should progressively be taken

**over, in most cases, by private investors and recommends that the Commission**
**encourage this through the means at its disposal.** **It recommends that the**
**Commission, in cooperation with appropriate partners, should foster the**
**development at European level of service companies or new operational entities**
**capable of supplying the space information needed to meet requirements. In**
**particular, it encourages the Commission to open discussions with EUMETSAT**
**as soon as possible to investigate to what extent this body might play an**
**operational role in environmental monitoring.**

**7.** **The Council acknowledges the usefulness of Community action in the field of**
**education and training in the use of space technology.** **The Council also**
**emphasizes the importance of using space technology for development.** **It**
**encourages the Commission to take appropriate steps in these fields.**

**8.** **The Council takes note of the Commission's proposals in the abovementioned**
**fields and recommends that specific efforts should be taken to achieve greater**
**complementarity and synergy of work in the context of ongoing and future**
**framework programmes of Community RTD activities. It takes note that there**
**should be no need for additional funding for the time beeing; it also takes note**
**that some activities may require recourse to other form of community support.**

**9.** **The Council calls on the Commission** **to** **pinpoint** **and** **propose, in cooperation with**
**the Member States and the partners concerned, activities to obtain the opening of**
**the markets of the main third countries and to help establish a set of international**
**rules to guarantee conditions for balanced competition in the market for spacecraft**
**launching services.**

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

**11.** **The Council recommends that all of these activities should be coordinated with**
**those of the Member States and the European Space Agency in order to obtain**
**greater synergy between** **efforts** **at the European level.** **It requests that the**
**Commission take suitable measures to prepare the cooperation agreements**
**required with the European Space Agency and other small agencies concerned.**
**It takes note of the Commission's intention to make use of the work of** **the** **Space**
**Advisory Group (SAG) and other advisory groups.**

**Done at Brussels,**

**)**

## **34**

ISSN 0254-1475

### COM(96) 617 final

# **DOCUMENTS**

#### EN 07 88 10 15 Catalogue number : CB-CO-96-657-EN-C ISBN 92-78-13175-X

Office for Official Publications of the European Communities

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