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s the U.S. government takes steps to recapitalize its photoreconnaissance satellite fleet over the coming year, it will have important decisions to make regarding the role of commercial imagery providers in the new architecture.
Among the factors likely to be considered are the contract performance, financial health
and investment plans of the two leading U.S. commercial data providers, DigitalGlobe and GeoEye. Government officials also will take into account various expert studies, notably among them the “Independent Study of the Roles of Commercial Remote Sensing in the Future National System for Geospatial Intelligence,” which was completed in July and released in October.
Informally referred to by the name of its principal author, Peter Marino, chairman of the U.S. National Geospatial-Intelligence Agency (NGA) Advisory Group, the highly anticipated report lays out four options – ranging from much wider commercialization to none at all – for meeting future U.S. national security imaging needs. The report spells out the pros, cons and risks associated with each.
The recommended alternative, a hybrid that resembles the status quo in some ways, seems as likely as any to ensure that U.S. military forces and strategic decision makers have reliable access to this critical capability in the years ahead. Another likely outcome, unfortunately, is a U.S. commercial remote-sensing industry whose growth potential and ability to build upon a strong track record of serving its primary customer, the NGA, are
constrained.
This is not to say DigitalGlobe and GeoEye have proven themselves as the government’s most reliable or cost-effective solution for the types of imagery products they provide. But the user reviews they have gotten so far – from the likes of U.S. Marine Corps Gen.
James Cartwright, vice chairman of the Joint Chiefs of Staff – have been overwhelmingly positive.
Under the Marino panel’s hybrid option, the government would own all but perhaps two of the satellites providing imagery for national security purposes. Commercial data providers would be able to buy their medium-capability satellites – the most capable systems would remain government operated – at a discount by piggybacking on government bulk buys of identical systems. The data providers would sell imagery from their satellites commercially and presumably would handle the overflow when the government-owned systems become overtaxed.
That arrangement resembles today’s situation in the sense that DigitalGlobe and GeoEye operate three satellites between them that provide data to the NGA. A key difference is that the companies have multi
year contracts with the NGA, something the Marino panel frowns upon.
The panel’s primary concern with giving commercial providers a larger role in the imagery architecture is one of perceived risk – specifically, the fear that DigitalGlobe or GeoEye might not survive the next several years, leaving the national security community with unacceptable coverage gaps. This concern is understandable and clearly shared by many in government, as evidenced by the recent emergence of a proposed satellite procurement known as BASIC, or Broad Area Satellite Imagery Collection.
But it overlooks the fact that DigitalGlobe and GeoEye
by all accounts have been reliable providers to the NGA since they were put under contracts in 2003. Their performance has been recognized in the form of follow-on contracts to build and operate even more capable systems under the NGA’sNextView program; the first of those satellites, DigitalGlobe’s WorldView-1, was
launched successfully in September. Like GeoEye’s planned GeoEye-1 satellite, WorldView-1 has better agility and picture detail than its predecessor, bringing it into the class of capabilities envisioned for the BASIC program.
Meanwhile, commercial satellites
have taken on added importance – they’ve become crucial in fact – due to the failure of a more traditional government procurement, the Future Imagery Architecture, whose satellites originally were supposed to have begun launching by now. The U.S. National Reconnaissance Office’s cancellation of the optical portion of that program, after spending hundreds of millions if not billions of dollars, demonstrates in dramatic fashion that the government-ownership model is not without risks of its own.
A final point on the risk factor: the government can protect itself against business failures by securing via contract the right of first refusal to buy the bankrupt company’s satellite assets.
There is much to commend in the Marino report. It recognizes, for example, that relatively low-cost, commercially built satellite hardware can play an important role in the photoreconnaissance architecture – a situation, incidentally, that probably would not exist today had there not been a commercial remote sensing industry. The report’s calls for block procurements of these kinds of satellites and reform of U.S. export laws, both of which also would help shore up a depleted U.S. component-supplier base, should be adopted with deliberate speed.
But as the relevant U.S. agencies move ahead with BASIC or something similar, they can afford to be bolder on commercialization than the Marino panel advises, particularly in light of DigitalGlobe’s success thus far with WorldView-1. There is no question that DigitalGlobe and GeoEye face tough challenges: For one thing, both must have strong commercial sales to defray costs and thus offer attractive prices to the government, but their share of this market is threatened by the international proliferation of remote sensing satellites.
But this industry has proven to be very resilient while making itself indispensable to the government. DigitalGlobe and GeoEye have done everything asked of them by the NGA and are investing their own money in new satellites and capabilities. Moreover, the unclassified data they provide gives the government far more flexibility in terms of sharing with allies and civil agencies than it has with its own systems. What the U.S. government should be debating in the weeks and months ahead is not whether commercial providers can play a bigger role in the imagery architecture, but how.
