The U.S. government’s decision to loosen the regulatory strings on imaging satellite operator DigitalGlobe is best viewed as qualified good news since regulators have reserved the right to apply new restrictions after the company’s newest and most capable satellite is declared operational.

Facing stiff competition from other satellite firms as well as the loosely regulated aerial photography industry, DigitalGlobe last year asked the U.S. Department of Commerce to lift the resolution restrictions on imagery it can sell to non-U.S government customers. At the time, the floor was set at 50 centimeters, or sharp enough to detect objects of that size and larger. 

Anything sharper was restricted to U.S. government customers only, a rule that effectively would have rendered the new capabilities to be introduced by DigitalGlobe’s WorldView-3 satellite, which will be capable of distinguishing objects as small as 31 centimeters across in black-and-white mode, irrelevant in the commercial marketplace.

Not surprisingly given the still-sensitive nature of satellite imagery, the matter was kicked up to the White House, which sought input from other government stakeholders including the departments of State and Defense and the intelligence community. In a development that appeared to catch the White House off guard, senior members of the intelligence community in April publicly weighed in in favor of DigitalGlobe’s request.

Nearly two months later, DigitalGlobe announced — there was no corresponding government announcement — that restrictions on commercial sales of data from the company’s current fleet of satellites, two of which can collect imagery with slightly better than 50-centimeter resolution, had been eliminated effective immediately. The government also granted DigitalGlobe’s request to sell 25-centimeter imagery to non-U.S. government customers.

But the latter decision came with a caveat: The company would have to wait until six months after WorldView-3 becomes operational, which, assuming the satellite launches in mid-August as planned and undergoes three months of on-orbit testing, would be next May.

Asked to explain the built-in waiting period, the Commerce Department, which licenses U.S. commercial satellite imagery providers, said it “permits the review and implementation of any measures that may be necessary to address national security concerns, foreign policy interests, and international obligations.”

In other words, even though DigitalGlobe will be permitted in principle to sell its highest-resolution WorldView-3 imagery on the open market, some restrictions may still apply. The wording of the Commerce Department’s statement suggests the deliberating government agencies failed to reach a consensus — the department won’t say — and thus compromised. 

Considering the likely alternative — indefinite indecision — that’s a good thing. But DigitalGlobe now faces an extended period of uncertainty, something businesses typically loathe. 

Particularly worrisome is that the government has reserved the right to apply restrictions based on “foreign policy interests and international obligations,” language that gives it wide latitude to act on concerns that have little to do with national security. In a worst-case scenario, the government conceivably could block the sale of imagery on the grounds that might cause embarrassment for an important ally, for example.

DigitalGlobe Chief Executive Jeffrey Tarr nonetheless has taken the high road, crediting the Commerce Department and other deliberating agencies for making a “forward-leaning” policy change that will, among other things, spur innovation and maintain the U.S. competitive edge in commercial remote sensing. 

That may well turn out to be the case — the government has indeed taken a positive step — but this matter clearly isn’t quite settled yet.