Insurers Sell AMC-14 Satellite to Pentagon

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PARIS – The AMC-14 commercial telecommunications satellite that was placed into the wrong orbit in March following a Proton rocket failure has been sold to the U.S. Defense Department for about $15 million by insurance underwriters, who took title to the spacecraft following a ettlement with satellite fleet operator SES of Luxembourg, industry officials said.

One industry official familiar with the insurance sale to the Pentagon said it was conditioned on a guarantee by U.S. defense authorities that the satellite would not be purposely destroyed in orbit.

While there was no indication that U.S. defense authorities intended to do such a thing, this official said the companies involved in the sale wanted to protect themselves against any future allegations that they had contributed to orbital debris.

The demand that the transfer of title to the satellite include a no-shootdown clause illustrates the nervousness of satellite underwriters and fleet operators in the wake of two events: the Chinese anti-satellite missile test in January 2007, in which China destroyed one of its retired weather satellites; and the U.S. Defense Department’s destruction of an out-of-control spy satellite in February using a sea-based missile.

SES officials made a brief reference to the AMC-14 sale during June 3-4 investor presentations in London and New York, saying the company’s SES Americom division of Princeton, N.J., assisted the underwriters in closing the deal.

SES spokesman Yves Feltes said June 6 that the company would have no comment on the transaction beyond confirming that it had been completed.

The premature shutdown of the upper stage of a Russian Proton-M rocket in March left AMC-14 in an orbit with an apogee of about 28,000 kilometers and a perigee of some 6,250 kilometers. SES officials declared the satellite a total loss after concluding that any attempted salvage on their part would be risky, and likely not worth the time and expense given the amount of satellite fuel that would be used in the process.

SES filed a total-loss claim and expects to receive its $151 million share of the settlement by the end of June. EchoStar Corp. of Englewood, Colo., owned a minority stake in AMC-14 and will receive a payment of around $40 million.

In addition to its commercial payload of 32 high-powered Ku-band transponders, AMC-14 carried an experimental active phased array antenna designed by prime contractor Lockheed Martin Commercial Space Systems to enable SES to create different beams according to business demand over the satellite’s life.

One Pentagon official said the satellite would likely be used for testing and training purposes, and depending on the orbit, could augment satellite communications capacity for operational missions.

“It could be like a dedicated [geosynchronous testing] bird, but you could never get Congress and the Defense Department to fund and build something like that just for training and testing,” the official said. “If soldiers in training could use their Ku-band terminals to actually link up with a dedicated satellite, there is value in that.”

Turner Brinton contributed to this article from Washington