Commercial satellite operators who have looked upon the U.S. government as a consistent customer can rest easy in the knowledge that the increased demand of commercial capacity by the government will remain in the near term.
That demand will remain even as the government, particularly the Defense Department, rolls out new satellite systems to support the future network-centric operations. However, the government will be looking to the commercial satellite industry for technological innovations to be placed into next generation communications satellites that will better meet the needs of the government as a customer of those services.
To put the future demand in perspective, Don Brown, vice president of government sales at G2 Satellite Solutions, a subsidiary of Panamsat, cited a recent U.S. Strategic Command report saying that by 2020, there will be a 19 GHz gap between the capacity the U.S. government operates and its demand. Brown made his comments during a panel discussion held during the SATELLITE 2005 conference and exhibition.
Lawrence Krebs, Satcom systems policy analyst within the Office of the Secretary of Defense added some other figures to lend perspective to the government’s use of commercial satellite technology. He noted that back during Operation Desert Storm in the early 1990s, commercial satellites provided 20 percent of the Defense Department’s capacity requirements. Today, commercial satellites provide 80 percent of those capacity requirements. Additionally, in 2003 alone, the military spent $270 million on commercial satellite capacity, $115 million on mobile satellite services and $181 on commercial satellite equipment. He too reiterated that future military deployment of satellites would not meet the demands of the military.
“Commercial Satcom is a critical part of government satellite communications,” Josh Hartmann, professional staff of the House Armed Services Committee said during the discussion. He noted that the government, even if it had the resources available on its own managed networks to cover the known capacity needs, it still has been unable to accurately account for “surge capacity.”
Needs From Commercial
At a separate panel discussion during the conference, Col. Patrick Rayermann, deputy chief of staff for operations and plans for the U.S. Army‘s Space and Missile Defense Command, said military planners have grown dependent on commercial satellite systems to take the burden off the Pentagon’s own facilities, which the government wants to ensure are available for the most critical missions. Part of the partnership between the military and commercial suppliers should involve more information sharing, so contractors can be in the best possible position to respond to the Defense Department’s requests, he said.
“We can become better customers,” said Rayermann. “We can help you understand us better” by building relationships defined by mutual understanding and respect. There should be a certain level of tension as commercial suppliers press their military customers for information and those users grapple with what information to share, “but there still can be trust [even] if there is tension,” he added. “We have to maintain a continuing dialog.”
Efforts to improve the relationship between satellite users in the military and commercial operators are taking place against a backdrop of an unmistakable trend: as the Pentagon’s communications needs grow, the department is buying an ever-increasing proportion of the capacity it needs from the private sector. For example, in just the past five years, the Defense Information Systems Agency (DISA), has gone from spending $45 million per year on wideband satellite communications to an estimated $245 million, said Rick Bourdon, program manager in DISA’s commercial satellite communications branch.
The military’s use of commercial satellite systems extends beyond communications to applications such as remote imagery and weather forecasting, Rayermann added. He also pointed out that the commercial world benefits handsomely from facilities operated by the military, such as the Global Positioning System (GPS), which highlights the often-similar requirements of the government and the private sector, such as where keeping track of equipment that may be scattered across a broad area. “We both want to know where our assets are.”
Regardless of the task at hand, the military places a high premium on flexibility–a concept that extends to the way Pentagon users prefer to deal with satellite and other forms of communications links. The Navy, for example, has to ensure that all of its ships have access to satellite links, regardless of their location or course, said Michelle Bailey, program manager in the communications programs office at the U.S. Navy‘s Space and Naval Warfare Systems Command, adding that she would like the ability to boost capacity on short notice and for limited periods. These so-called surge capabilities would reduce the need for the Pentagon to pay for transponder space that sits unused much of the time just in case a ship happens to need it, she said.
If the goal is to keep the Defense Department as a customer, the commercial satellite needs to be “technically relevant” and operators and manufacturers need to “step up” to meet the technological needs going forward, Hartmann said.
One technological challenge, in particular, that Krebs highlighted was the trend of going from circuit switched networks to Internet Protocol (IP)-based networks. “IP was not designed for wireless transport,” Krebs noted. He called upon the commercial satellite industry to address that in the development of its next generation networks going forward. Additionally, he called upon the industry to be sure to keep the government informed as to “where the technology is headed.”
Brown also acknowledged the changing nature of government’s needs for satellite communications. He noted the increased complexity of the network requirements and need for reconfigurable managed networks among other flexible requirements. “Millions of dollars” ride on meeting the flexibility needs of government users by commercial providers, he said.
Krebs offered another concern in regard to the security of commercial satellite networks. He said that commercial satellite communications should be protected as a national asset on all levels, from physical protections on the ground segment to protecting the networks themselves from cyber attacks. And while he did not highlight specific deficiencies in the existing commercial networks, he said that the government should “encourage” commercial satellite operators to make the appropriate capital expenditures to protect commercial satellite assets.
Paying For It
But encouraging commercial satellite operators to make additional capital expenditures to protect their networks for the benefit of the military and government user could be a challenge since the government does not have a history of awarding long-term contracts.
Hartmann acknowledged that due to budgetary considerations, Congress “is afraid to commit to long-term contracts” because there is a level of uncertainty in determining the needs of the government from year to year.
However, even with that hesitancy to offer something on a long-term basis, the government does have a history of paying over the long term to the commercial sector to meet its capacity requirements, even if it is not locked into long-term contracts.
Krebs noted that 80 to 85 percent of the contracts for commercial satellite services have a year base plus multi-year options that can be exercised. He added that 95 percent of the time, those options are in fact exercised; so while the government may not obligate funds throughout a long period of time, it does offer long term contracts.
Krebs also suggested that the government should only focus its use of commercial satellite infrastructure on those requirements that it knows and can predict going forward, and rely on government deployed satellites for surges in use as a way to help better plan for the financial side of commercial satellite use by the government.
Bailey offered several suggestions to commercial satellite providers looking to take advantage of the Pentagon’s seemingly insatiable appetite for telecommunications capacity. She urged providers to make sure they submit clearly written proposals that dispense with jargon and other unnecessary language, and advised against providing more than a cursory amount of background information about prior experience or other clients. Instead, companies should describe how they can fulfill the terms of a potential contract and “help me believe that you guys can do the job,” said Bailey. “Do not waste time telling me what I already know about your company” or can find out from evaluations provided by existing customers.
–Sam Silverstein and Gregory Twachtman
