Government Use Shapes Future for Commercial Satellites
In June, we discussed the procurement of commercial satellite services by the U.S. government and particularly the Department of Defense under the Defense Information Systems Network Satellite Transmission Services-Global (DSTS-G) regime.
Since 2001, government use of satellite bandwidth and network solutions has grown explosively and outstripped military satellite capacity, particularly in Iraq and Afghanistan. In-theater satellite communications needs include: use of remotely piloted unmanned aerial vehicles for reconnaissance and ground attack, battlefield mapping and assessment, enemy identification and targeting, and combat troop point-to-point and point-to-command center voice, data and video communications. Other government departments and agencies such as the U.S. State Department, U.S. Department of Homeland Security and the CIA also are major consumers of satellite services.
The intensifying debate between the fleet operators and the integrators/aggregators of satellite services under DSTS-G reflects the fact that the U.S. government increasingly cannot rely solely on its own satellite assets for its needs and also must rely on commercial satellite services. Reports indicate that Pentagon bandwidth and satellite network solutions needs have grown to the extent of relying on commercial satellite service for 80 percent of those needs and more than 90 percent in the war theaters. This growth has been welcome news for the operators, whose commercial customer revenues have typically grown at steady but unexciting single-digit rates. In other words, both commercial satellite service providers and military/government customers need each other.
The Defense Department needs commercial satellite service in part because it is awaiting the deployment of next-generation satellites intended to provide high-speed data throughput, high-gain spot beam capabilities and intersatellite linking capabilities. Until those systems are fully deployed, the Defense Department’s use of commercial satellite capacity and service will continue to grow and likely will not decline even after their deployment. While commercial fixed and mobile satellites may not provide all the survivability and intersatellite linking features of planned military systems like the hardened Advanced Extremely High Frequency system and its less-protected cousins — the more commercial-like military wideband and mobile user satellite programs, commercial satellite service compares well with military satellites on throughput and reliability, and also provides redundancy and flexibility to military planners. In addition, some of the advanced military capabilities, where not precisely replicated by the commercial satellite fleet, can be mimicked, or functionally reproduced, by workarounds. In any event, the advanced military fleet is not yet available, and the commercial fleet is ready.
At the same time, the Pentagon faces significant problems in its space procurement. May testimony by the U.S. Government Accounting Office (GAO) to the Senate Subcommittee on Strategic Forces indicated that the Defense Department’s procurement of ambitious space programs has led to the cancellation of tens of billions of dollars’ worth of programs and extensive program delays, resulting in loss of capability in areas including positioning, weather monitoring, navigation and missile warning. The GAO cited practices such as starting more programs than the Pentagon could afford, encouraging contractors to underbid and over-optimistically schedule program milestones.
The convergence of government growth in use of satellite service, military procurement issues and delays, and the comparable capabilities, flexibility and redundancy offered by non-military satellites even when military satellite capacity exists means government extensive use of commercial satellite service is here to stay. While operators will be glad of the business, it raises significant issues for them.
Among the issues are compliance with heightened security and redundancy concerns. Longstanding commercial customers may have requirements for full-time, non-preemptible capacity built into their agreements, and will dependably feel themselves entitled to it. They will not be interested in being bumped from transponders or slots because of competing customer needs stated to be prioritized for national security reasons. The Pentagon may request transponder separation, encryption and other dedicated services not easily compatible with commercial customers. Government contracts are good business, but very demanding business.