Launch Price Sensitivity Depends on Application
Opposing views on launch-demand elasticity from two different launch-service providers suggests that operators of large telecommunications satellites are less sensitive to price than organizations that use smaller satellites for scientific or emerging commercial applications.
Elon Musk, chairman and chief executive officer of Space Exploration Technologies (SpaceX) of El Segundo, Calif., wants to shake up the launch business the way low-cost airlines have changed consumer air travel . Musk believes his Falcon family of rockets, beginning with the small Falcon-1, will lower the cost of launches enough to drive an increase in demand.
But Clayton Mowry, president of Washington-based Arianespace Inc., the U.S. marketing arm of the French launch-service provider, doesn’t buy that argument . Arianespace specializes in launching large geostationary-orbiting communications satellites.
The satellite business is no longer driven by speculative ventures, Mowry said April 5 during a panel discussion at the National Space Symposium . Investors today are seeking quick returns in proven markets, with much of the future growth being driven by consumer applications such as direct-to-home satellite television and satellite radio services.
Mowry said that for large companies like DirecTV, launch prices make little difference when it comes to planning satellite deployments. “DirecTV takes in $9 billion a year in revenue and even a free launch is not going to get them to launch more satellites,” Mowry said. “They are innovating in order to compete. What’s driving them to build more satellites has nothing to do with the cost of a launch, because that’s a tiny portion of their overall costs. A change of 3 or 4 percent in launch costs is not going to drive them to launch another satellite.”
Mowry also noted that many communications markets are saddled with excess satellite transponder capacity. Satellite operators are highly unlikely to add new capacity in these markets no matter how low launch prices fall, he said.
Musk points to the success SpaceX has had in winning customers for its unproven Falcon rocket family as evidence that there is in fact elasticity of demand. SpaceX has three U.S. government contracts for launches aboard its Falcon-1 rocket, which carries an advertised price tag of $6 million not including range fees — far cheaper than any U.S. rocket in its class.
SpaceX also has a customer lined up for its planned Falcon-5, a larger vehicle comparable in capability to Boeing’s Delta 2 rocket, and intends to develop even bigger vehicles in the future , Musk said.
“If the cost of the launch is $50 million or $100 million, there is no way someone will launch a $20 million satellite,” Musk said. “So they max out and pack everything they can on the satellite. The more complicated the satellite, the more it costs to maintain it and you get a ratchet effect on [mission costs]. The launch price is the key to the logjam, and if you can cut launch costs by a factor of four or five, then I think you cut the entire mission budget by a factor of four or five.”
Cisco Internet Router Still Working in Orbit
An off-the-shelf commercial Internet router placed on a British remote sensing satellite continues to operate after nearly a year in space, said Rick Sanford, director of Cisco System Inc.’s Global Defense and Space Group.
The router, built by San Jose, Calif.-based Cisco, is operating aboard the UK-DMC satellite, which is part of a multisatellite international Disaster Monitoring Constellation built by Surrey Satellite Technology Ltd. of Guildford, England.
Under the Cisco Router in Low-Earth Orbit experiment, which is being conducted under a Space Act Agreement with NASA, the router has been turned on more than 100 times without a failure since April 2004, Sanford said in an April 6 interview at the 21st Annual National Space Symposium. The event was sponsored by the Space Foundation of Colorado Springs, Colo.
The router was not radiation-hardened or otherwise qualified for spaceflight.
NASA will publish a paper on the early project results within the next 30 days and experiments will continue as long as the router is operational, Sanford said. “There is no defined life cycle for the router,” he said. “Part of the test is to see how long it will last.”
Cisco is targeting both NASA and the U.S. Department of Defense as potential customers for the technology, which could lead to lower-cost satellites and ground systems, Sanford said.
Banc of America Looking For Space Imaging Buyer
Space Imaging formally reached agreement with New York-based Banc of America Securities March 18 to help find a buyer for the commercial imaging satellite operator, Space Imaging spokesman Gary Napier said.
The future of Space Imaging , operator of the Ikonos high-resolution imaging satellite, has been in question since the company failed to secure U.S. government funding to help finance a second-generation spacecraft.
Space Imaging of Thornton, Colo., had three opportunities to capture a NextView contract from the U.S. National Geospatial-Intelligence Agency (NGA) but ultimately lost out to rivals DigitalGlobe of Longmont, Colo., and Orbimage Inc. of Dulles, Va. Space Imaging is owned by Lockheed Martin Corp. of Bethesda, Md., and Raytheon Co. of Waltham, Mass., but those two companies have written off their investments and stated that they have no interest in sinking additional money into the venture.
A previous deal to sell Space Imaging to L-3 Communications of New York fell through after Space Imaging missed its last chance to capture a NextView contract in September. Space Imaging holds a ClearView contract from the NGA to supply Ikonos imagery for military users. That deal runs through 2008 but is only funded through 2005.
Space Imaging also has a broad base of non-U.S. government customers for imagery from Ikonos, which was launched in 1999 and is expected to last at least until early 2008.
Napier said there is no timetable for the sale of Space Imaging and would not speculate on potential buyers.
An industry source said the company hopes to have a deal around mid summer.
Both CEV Competitors Have Teams in Place
An Italian aerospace company, a U.S. federal laboratory and an engineering firm have joined the Northrop Grumman- Boeing team competing against Lockheed Martin for a multibillion-dollar contract to design and build NASA’s Crew Exploration Vehicle (CEV).
Northrop Grumman and Boeing officials announced at the National Space Symposium April 5 the four major companies supporting the team’s CEV efforts. In addition to Italian space-hardware manufacturer Alenia Spazio, the team includes Ares Corp. , Draper Laboratory and United Space Alliance, the Houston-based Boeing- Lockheed Martin joint venture that maintains and operates NASA’s space shuttle fleet.
The Northrop Grumman-Boeing and Lockheed Martin-led teams are expected to submit the only bids NASA will receive for two separate $1 billion, three-year contracts to develop preliminary CEV designs and conduct prototype flight demonstrations in 2008. That fly-off is intended to help NASA pick one team to build the crew-carrying vehicle it expects to field by 2014. NASA has set May 2 as the deadline for submitting CEV proposals.
Lockheed Martin announced its team roster in January. It includes EADS Space Transportation, Honeywell, Hamilton Sundstrand, Orbital Sciences Corp. and United Space Alliance.
Chuck Allen, vice president of Boeing’s Space Exploration Systems, said more international members could join the Northrop Grumman-Boeing team as CEV development progresses.
“Over time this will become an international program, driven by the need for human intellect,” he said.
Robert Davis, director of business and strategy development for space systems at Northrop Grumman Integrated Systems, would not dismiss the possibility that NASA eventually might go with a national team that involves all of the major U.S. space companies . “As we look into the future, there are a lot of pieces required to take us to the Moon and stay there,” he said. “If that’s the way the nation chooses to go , then so be it.”
Calvert Supports Plan To Deorbit Space Telescope
The new chairman of the House Science space and aeronautics subcommittee told a packed house at the 21st National Space Symposium that he supports NASA’s proposal to drop any plan to refurbish the Hubble Space Telescope.
Rep. Ken Calvert (R-Calif.) said he agrees with NASA’s plan to send a small spacecraft to attach itself to the popular observatory and guide it toward a safe re-entry at the end of its service life. “Hubble has performed beyond its original design life. Hubble has delivered volumes of data that will keep scientists busy for years,” Calvert said. “I feel the de-orbit module is a wise way to proceed.”
Calvert, who serves on both the Science Committee and the House Armed Services Committee, also said the three major sectors of space activity — commercial, civil and military — need to find ways to work more closely together. Unnecessary barriers have prevented full cooperation, he said, questioning why these barriers should still be in place in the post-Cold War era.
The American West, Calvert said, was settled by a fragile coalition of diverse groups with different and sometimes competing needs. What the settlers all had in common, he said, was a willingness to take risks. Drawing on that analogy, Calvert said the United States is on the cusp of a new era of space exploration and is best served if it draws on the collective talents of all three sectors. This includes entrepreneurs like Paul Allen, who financed the SpaceShipOne rocket project, and Elon Musk, who is developing the Falcon-1 small launcher, he said.
The needs of the civil, commercial and military space sectors are great, Calvert said, adding that funding limitations make it important that they not duplicate efforts. He noted in particular that all three sectors need new launch technology at their disposal that would give them reliable, responsive access to space as affordably as possible.
“Now is the time to take a hard look at the space program … The changes we make today will shape space exploration for decades ahead,” Calvert said. He added that fulfilling U.S. President George W. Bush’s vision for space exploration — a return to the Moon leading to eventual missions to Mars — will require the nation to analyze and validate every program.
“We cannot cling to legacy programs and old ways of doing things,” he said.
Calvert also noted that NASA is one of the few federal agencies slated for a budget increase in 2006 and said the space agency is not likely to see any increase beyond what the president has proposed. “The current request will be the best top line we will see,” he said.
