Military Demand for Commercial Satcom Projected to Increase

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WASHINGTON — The planned launch of two U.S. Air Force Wideband Global Satcom (WGS) communications craft this year is expected to ease the Defense Department’s reliance on commercial satellite capacity in the near term, but the Pentagon’s latest projections show that its demand for bandwidth will far outstrip what it can provide with its own satellites over the next decade.

The military’s need for satellite communications bandwidth has been rising rapidly since 2000, and legacy systems like the Defense Satellite Communications System simply do not have the capacity to meet that demand. As a result, the military today relies on commercial satellite capacity for about 80 percent of its needs, at a cost of about $350 million per year.

The most recent estimates from the U.S. Defense Information Systems Agency (DISA) show demand for commercial bandwidth rising roughly 56 percent from 2010 to 2019, even though the six WGS satellites the Pentagon hopes to have on orbit by 2013 will increase government-owned capacity by at least a factor of six. These statistics were presented by Charlie Edwards,DISA’s acting deputy program manager for satellite communications, at a commercial satellite workshop in December. A copy of the presentation was obtained by Space News.

Close to 80 percent of the commercial bandwidth needed will be Ku-band capacity in North AmericaAfrica, the Middle East and Europe. The rest is a broad mix of L-, S-, X-, Ka- and C-band capacity needed around the world. At current prices, the military will be spending more than $500 million per year on commercial capacity toward the end of the next decade. But prices have been rising recently as commercial demand has exceeded supply in many parts of the world, industry officials say.

DISA, the Defense Department’s designated lead buyer of commercial bandwidth, is now planning how it will acquire capacity after its current contracting vehicle, called the Defense Satellite Transmission Services-Global, expires in 2011. The agency plans to issue a draft request for proposals for the Future Commercial Satcom Acquisition program in the second quarter of 2009, followed by a final version in the third quarter, DISA documents show.

The agency’s needs since the current contracting vehicle was put into place have expanded to include greater emphasis on information assurance and the use of less traditional services like commercial X-band capacity, according to e-mailed responses to questions from DISA spokesman Jon Anderson.

“DISA’s commercial Satcom contract mechanisms must support the evolving needs of the [Defense Department] warfighter,” Anderson said. “Accordingly, DISA anticipates future contract mechanisms needing to take advantage of future industry and user trends, including increased demand for managed and or shared services, increased support for protection and network operations, and increased support for Defense Department enterprise services capabilities.”

The essential gripe commercial satellite operators have with DISA’s current contracting vehicle, under which the agency procures capacity through third-party brokers, is it does not incorporate as much long-term planning as they would like. Whenever any of the armed services has a bandwidth need that cannot be satisfied by government systems, they make a request and pay DISA to acquire the capacity, and the agency begins a competition among satellite integrators and operators to get the service needed at the best price. These task orders can take months to process, and there is no guarantee the government will be able to get the capacity it needs, especially if a war or crisis creates a surge in demand, the commercial operators say.

The current structure does not allow for commercial capacity leases of longer than one year. While long-term agreements cannot be applied to every military need, the government would be better served to consider them in some cases, said Tip Osterthaler, chief executive officer of Americom Government Services of McLean, Va., a subsidiary of satellite operator SES of Luxembourg that serves the U.S. government.

“If you look back in recent history, for example, the amount of Ku-band fixed satellite services that we’ve used in a particular location – there’s always sort of a floor there,” Osterthaler said in an interview. “If you can identify a floor that seems to be a long-term commercial requirement, then the government probably ought to think about buying that long-term because it would get a lot better pricing and guaranteed availability.

“So rather than buying the surge part at the top of the pyramid, buy some at the base of the pyramid, because you know you’re always going to need it.”

David Cavossa, vice president of satellite communications at Arrowhead Global Solutions of Fairfax, Va., said DISA ought to look to the U.S. Marine Corps as an example of how to buy commercial capacity smartly. Arrowhead does not operate satellites but acts as an impartial capacity broker and integrator under the Defense Satellite Transmission Services-Global program.

The Marine Corps has a commercial bandwidth agreement with Arrowhead through its Support Wide Area Network program in which Arrowhead provides one pool of reserved, readily available capacity over the United States and another pool of reserved capacity for the rest of the world. The Corps just has to decide where it needs the capacity and at what level at any given time. These concepts, referred to as pre-positioned bandwidth and bandwidth portability, would serve the rest of the Defense Department well, Cavossa said. Much like Air Force Space Command manages the allocation of capacity on military-owned systems, a central government body, be it DISA or another organization, could manage a prepurchased block of commercial capacity as it sees fit, he said.

“It’s going to be tough to do in the beginning because somebody has to pay for all that bandwidth before it’s actually needed,” Cavossa said.