Editorial: Opportunities Knock

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During a panel discussion at the recent Satellite 2010 conference near Washington, U.S. government and industry officials bemoaned missed opportunities for the government to acquire space capabilities at bargain prices by piggybacking on private-sector investments. Joseph Rouge, director of the U.S. National Security Space Office, noted that of 18 eligible commercial communications satellites ordered in the last two years, only one is slated to host a government-owned payload. “We should have been on all 18 satellites,” he said.

That’s probably taking things a bit far, but Mr. Rouge certainly has a solid point: With Pentagon space budgets getting tight after a decade of growth, cost sharing with a robust commercial satellite sector is an obvious means of meeting soaring military demand for space-based services ranging from communications to orbital surveillance. The U.S. government — and not just the Pentagon — has been slow to fully embrace this alternative way of doing business in space.

In recent years, the Pentagon — often criticized as a sluggish bureaucracy — has been most active among U.S. government organizations in leveraging commercial space capabilities. In addition to being the biggest single buyer of commercial satellite telecommunications services, albeit purely by necessity, the Defense Department has two hosted payload projects in progress: the Internet Router in Space demonstration aboard an Intelsat satellite that launched last year, and an experimental missile warning sensor to be launched next year aboard an SES Americom craft. The U.S. National Oceanic and Atmospheric Administration (NOAA), meanwhile, has studied the feasibility of using commercial satellites to host certain environmental sensors.

To date, however, neither agency has committed to placing an operational payload aboard a commercial satellite, despite having requirements that seemingly lend themselves to this type of arrangement. For example, Pentagon officials have for the past several years talked about the need for better surveillance of the space environment, particularly in the geostationary-orbit arc 36,000 kilometers above the equator. Given the fact that most communications satellites operate in geostationary orbit, this appears to be an obvious hosted payload opportunity that the Pentagon — which is spending heavily on space surveillance — is not exploiting, much to the puzzlement of satellite operators.

According to NOAA Deputy Administrator Charles Baker, the civilian agency has identified half a dozen or so environmental sensors that could be hosted by commercial satellites. He said NOAA has no budget for hosted payload missions, but added that the main obstacle is that the government has no policy governing these types of arrangements.

Mr. Baker is correct: Current U.S. space policy does not adequately address the myriad issues that can arise when the government places hardware aboard satellites it does not control. These include the fact that government payloads often feature capabilities or technologies that are deemed too sensitive to launch aboard non-U.S. rockets, which today loft the vast majority of commercial communications satellites.

Another big question is how commercial satellite operators will be compensated if the government backs out of a hosted payload arrangement. This is important because there likely will be instances where the revenue associated with a hosted government payload closes the business case for a satellite project, meaning if that revenue stream goes away the commercial operator ends up losing money.

These are potentially tricky issues, and in any case the wheels of the government’s policymaking apparatus grind very slowly. But as the Pentagon and the Australian military — which is buying a UHF payload to be flown aboard an Intelsat satellite — have shown, it is possible to arrange piggyback deals on a case-by-case basis. When there’s a will, there’s usually a way — even for the U.S. government.

To take advantage of hosted payload opportunities on a routine basis, however, an update to existing space policy is indeed required. The White House is in the midst of a comprehensive space policy overhaul, with a targeted completion date sometime this summer — which likely will be too late to affect the federal government’s 2012 budget request.

Given that, not to mention the possibility that the sweeping review will get bogged down over unrelated issues, the White House ought to consider an interim policy specifically for hosted payloads, one that gives government and industry a framework for negotiating deals that could get funded in 2012. Narrowly focused space policies are hardly unique: In the recent past the government has issued guidance addressing activities including launch, remote sensing and even the use of Russian engines in rockets that loft U.S. military payloads.

Without swift action, government and industry officials likely will be lamenting another slew of missed hosted payload opportunities a year from now — maybe even two — even as the Pentagon, NOAA and other agencies continue to face demands for space-based services that they cannot meet the traditional way.