U.S. International Traffic in Arms Regulations (ITAR) have been the source of much debate in the satellite industry in recent years. While many believe that these laws put U.S. satellite companies at a competitive disadvantage, some say the situation may soon change.
More than a decade after the United States classified commercial communications satellites as weapons and imposed strict controls on their transfer to non-U.S. entities, industry officials may finally be gaining traction with their message that the restrictions, which have served mainly to dilute critical American capabilities, should be abolished.
But after so many years operating in the shadow of the U.S. State Department’s widely disliked ITAR laws, the U.S. satellite industry faces a steep challenge in trying to regain the global market dominance it once enjoyed even if it is freed from ITAR’s grip, according to industry officials and analysts.
“This is market share that is permanently lost,” says William Reinsch, formerly U.S. under secretary of commerce for export administration and now president of the National Foreign Trade Council, a Washington, D.C.-based organization that presses for access by U.S. companies to global markets. “We can’t get it all back magically.”
U.S. Congress transferred responsibility for satellite exports from the U.S. Commerce Department to the State Department in 1999, in the aftermath of the failure of a Chinese rocket carrying a U.S.-built satellite for Intelsat. The legislation intended to bolster national security by keeping American space technology from potential U.S. adversaries, but also placed satellites on the U.S. Munitions List, subjecting their exports to ITAR. In addition, Congress required that it generally be notified before the government issues a satellite export license.
The satellite industry has complained that ITAR can slow down and otherwise complicate a U.S. satellite company’s plans to deliver parts or a complete spacecraft to a foreign customer. Industry officials also bristle about the need to obtain government approval to discuss technical information with their non-U.S. customers after a satellite is launched.
In a preliminary report delivered to a divided Congress in May, officials of the State and Defense departments said they had concluded that commercial communications satellites and related components could be conditionally removed from the munitions list without threatening U.S. national security.
Federal officials expect to provide the complete report, requested by Congress in the 2010 National Defense Authorization Act (NDAA), before the end of 2011. The final report is expected to expand on the recommendations in the interim version, which include transferring satellites and related components back to the Commerce Control List, and, consequently, removing them from the jurisdiction of ITAR and the State Department.
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