by Carissa Bryce Christensen
The U.S. Defense Department (DoD) continues to become a bigger customer for commercial satellite communication services. Since September 11, 2001, DoD has increased its use of commercial satellites to support Operation Enduring Freedom from one commercial transponder for the region to more than 35, buying satellite capacity from global suppliers. More than two-thirds of DoD's satellite communications in the central region theater today are via commercial transponders.
DoD's current estimate of its total leased commercial bandwidth is about 3 GHz. This translates into three or four commercial GEO satellite equivalents (depending on what you assume about utilization rates and other factors). While this is far from a dominant proportion of an on-orbit population of 200 plus commercial GEO satellites, it represents a major increase for the military. DoD-used commercial capacity exceeds the total capacity of on-orbit DoD DSCS, Milstar and Ultra High Frequency communication satellites, some of which still operate at slower-than-dialup speeds.
New applications and users are relying on commercial satellites. Commercial GEO communication satellites support both battlefield operations and routine communication. The Defense Information System Network (DISN) today relies on commercial satellites at a significantly increased level compared to recent years. (DISN is the global end-to-end information transfer infrastructure of the DoD). Likewise, commercial satellites are now used for applications such as in-the-field tactical networking and communication among navy ships. Unmanned aerial vehicles, which have become a surprisingly commonplace element of battle in the last two years, rely exclusively on Ku-band (i.e., commercial band) transceivers for their bandwidth-intensive satellite operations. Tri-band terminals that allow warfighters access to data in both commercial bands (Ku-, C- and likely commercial Ka- in the future) and the military X-band have become the norm for new DoD acquisitions, with hundreds of millions budgeted for terminal upgrades in the next few years. The Navy continues to use extensively the commercialized Inmarsat system for mobile communication services. (In addition, while low earth- orbiting communication satellite systems have not proven to be commercially viable, they are serving military needs. Nearly 11,000 handsets are now supported by the Enhanced Mobile Satellite System, using Iridium satellites.)
What does this mean for the commercial satellite industry? Is DoD a good customer?
First, satellite service providers get a much-needed boost from a user with deep pockets and a growing appetite for bandwidth. DoD estimated in early 2002 that it spent an annual total of $200 million on commercial communications satellite capacity; by early 2003, that estimate increased to $400 million. And these estimates are certainly low. While DoD buys commercial satellite capacity through the Defense Information Systems Agency's (DISA) Commercial Satellite Branch, there are many instances of additional ad hoc purchases outside of DISA's mechanisms. For example, prior to September 11, 2001, DISA leased about $24 million in commercial satellite capacity for the Air Force to meet a range of service-unique requirements. Following September 11, Air Force components used non-DISA contract mechanisms to separately lease an additional $40 million in capacity to support military actions in Afghanistan and Iraq. As a result of this kind of fragmentation, it is difficult to get precise estimates of total use of commercial satellites. Clearly, however, DoD is a big customer.
DoD can also be a difficult customer to serve. The military client lacks centralized acquisition for commercial services, cannot commit to long-term leases, and does not have a coherent view of its requirements now and in the future for industry to draw on. These factors generate uncertainty and business risks because it is difficult to understand and plan for DoD needs with assurance.
What does the future hold for DoD and the commercial satellite communication industry? It is a mixed bag of uneven bandwidth use combined with reduced overall reliance on commercial satellites.
DoD projects less commercial traffic as planned military Wideband Gapfiller satellites are launched and as the spike in demand caused by operations in Iraq flattens. There are many scenarios of commercial satellite use by DoD, however, that could increase over the next few years: continued requirements in Southwest Asia, military operations in a new theater, delays in getting planned satellites on-orbit and deployment of new technologies and systems that rely on space-based communication. U.S. military use of commercial satellites may well in fact increase on average from the current level.
Nevertheless, the proportion of DoD traffic carried on commercial satellites will soon begin dropping, even if the absolute quantity increases. Today's crisis-driven use of commercial satellites, where 90 percent of the capacity is purchased from providers that are not U.S.-owned and operated, will not be acceptable. Concerns about the accessibility and security of commercial satellite services will certainly be reflected as the new transformational communications architecture evolves. The bottom line is that growth in DoD use of commercial satellite capacity will ultimately be outpaced by growth of DoD-owned systems.
Carissa Bryce Christensen is a founder and managing partner of the Tauri Group, an analytical consulting firm in Alexandria, VA. The Tauri Group delivers systems analysis for the space enterprise, technology assessment for weapons of mass destruction threat reduction and strategic IT support.