French Think Tank Offers Money-Making Tips for Galileo

PARIS — A prominent French international affairs think tank is urging European governments to broaden the revenue-generating potential of the Galileo satellite navigation system by adding a signal-authenticity feature to Galileo’s free, open signal.

In a March 30 report titled, “Galileo and the Profit Motive,” the Paris- and Brussels-based Ifri organization speculates that such an “Authenticated Open Service” — which has not been approved by European governments — could provide 50 percent to 60 percent of Galileo revenues.

Ifri also offers its interpretation for why the British government has objected to any military use of Galileo’s Public Regulated Service (PRS) encrypted signal.

Ifri uses previous industry estimates that predict Galileo could generate between 7 billion and 9 bil lion euros ($9 billion to $12 billion) in annual revenue to its private-sector managers by late in the next decade.

Whether the 30-satellite Galileo constellation, now being designed, can be fashioned into a profit-making business is one of the key questions now before European governments. Governments have already invested some 1.5 billion euros into the program and had hoped the private sector would step in to co-finance the system’s deployment in return for a 20-year concession contract to run Galileo.

Negotiations with the private-sector consortium designated to manage Galileo have stalled on several issues. Whether Galileo’s special features will be attractive enough to government and commercial users to recoup the investment costs over time has been a principal stumbling block.

European Union governments have set a June deadline to determine whether they should abandon or modify the idea of Galileo as a public-private partnership given the many sticking points that have yet to be resolved despite months of negotiations.

In this context, Ifri is joining other organizations in Europe that are scrambling to define the business case for Galileo.

The organization says all five of Galileo’s proposed services — the Open signal, the Commercial service, the Safety of Life service for airlines, the Search and Rescue service for emergency rescue and PRS — should be set up so that users have to pay a fee for access to those features.

For the Open signal, which up to now has been designed as a free service similar to the U.S. GPS signal, Ifri echoed an industry proposal that the service add an optional “Authenticated Open Service” that would give users a guarantee that their signals are provided by Galileo.

“This is meant to ensure that nobody could provide a fake or tampered Galileo signal as evidence” of regulatory compliance, Ifri says. For example, commercial fishing fleets would purchase this service to provide proof that they are steering clear of no-fishing zones.

Electronic fee collection services to replace highway toll stations also could require that users purchase the authentication option, Ifri says.

Europe and the United States have agreed that neither side of the Atlantic will adopt regulatory restrictions favoring GPS or Galileo within their borders. But rules that require services that Galileo can provide but GPS cannot — such as a guarantee of authenticity — are permitted.

If adopted, Ifri says, “the authentication service could constitute a legal guarantee. It could therefore be applied with a fee.”

Ifri’s report also tackles the issue of the use of Galileo’s PRS signal — featuring high levels of encryption and limited to European government customers — by European military forces.

A mid-2006 poll by the European Commission found that only one of the then 25 European Union members — Britain — is adamant in saying it would never permit its military to adopt PRS.

The remaining 24 governments said they may use PRS for military purposes depending on how much it costs. Some, including France, Spain and Portugal, said they almost certainly would use PRS to equip their military forces.

Elizabeth Duthie of Britain’s Department for Transport — European transport ministries are providing much of Galileo’s initial funding — reiterated Britain’s position March 7 at a satellite navigation conference in Munich.

Duthie, who is vice-chairwoman of the administrative board of the European Union body negotiating the Galileo concession contract with industry, said Britain remains attached to Galileo’s civil-only heritage. While she declined to repeat earlier British government officials’ assertion that Britain will forbid any other government’s military use of PRS, she did not disavow them.

U.S. government officials, and government and industry officials in Europe, have said in interviews in recent months that they cannot explain Britain’s harsh opposition to PRS.

Using an argument often wielded by the British government, Ifri says “the principle of value for money demands … that the government signal, PRS, be used by European military customers as well as other government users.”

PRS will be available only for European Union members. A non-European government seeking to use it will need to secure the approval of all 27 European Union members.

Ifri speculates that British hostility to PRS is due to its robust anti-jamming feature, which “could make it difficult for the U.S. to jam it anywhere, which would be contrary to U.S. [navigation warfare] doctrine,” the report says. “This is why some voices in the U.K. … want to prevent any such use by other program partners. They are particularly worried about the possibility that European guided munitions systems could become too autonomous.”