European governments have agreed that a new commercial telecommunications satellite design they are financing will permit customers to order a version without U.S.-built parts covered by the now-infamous U.S. technology export regime known as ITAR, government and industry officials said here May 27.


Officials said that while the first Small GEO platform, being tailored for Spanish satellite-fleet operator Hispasat, will feature U.S. parts, future versions not subject to ITAR, or
U.S. International Traffic in Arms Regulations, will be available to customers upon request
. These rules treat satellites and many of their components as weapons for export-control purposes and give the U.S. State Department veto power over who can purchase the satellite, and where it can be launched from.


“Customers will be able to choose which version they want, although the ITAR-free version will be a little bit more expensive,” said Manfred Fuchs, founder and president of OHB-System of Bremen, Germany, which is prime contractor for the Small GEO program.

Led by Germany and Spain, nine European Space Agency (ESA) governments – France is notably absent – are contributing 190 million euros ($299
million) to design Small GEO and develop the first model. Hispasat is the first customer and has agreed to spend more than 50 million euros of its own to pay for the satellite’s launch and insurance. OHB is spending around 20 million euros on its own for the satellite design.


The first Small GEO model, called Hispasat AG1, will be fitted with a Ku- and Ka-band telecommunications payload and is scheduled for launch in 2012. OHB and Hispasat signed a preliminary contract for the satellite
here May 27 during the Berlin air show, ILA 2008. A final contract for full construction is expected to follow in September.


Industry and government officials said OHB presented ESA with a list of components and technologies that would be needed for the Small GEO platform and asked which were available in Europe. All major subsystems will be built by European contractors. But several individual components will be purchased in the United States.


“It was more a matter of cost and time than anything else,” a European industry official involved in the selection said. “This is a new satellite design, and we already have enough challenges without adding the complication of making it ITAR-free from the outset.”

With the U.S. dollar trading at historically low levels relative to the euro, keeping a satellite ITAR-free carries a cost penalty.


One of Europe’s two principal satellite prime contractors, Thales Alenia Space, has developed an ITAR-free version of its Spacebus satellite platform and has said customers selecting this option should assume a cost increase of no more than 5 percent or so.


ESA’s long-term goal is to become self-sufficient in every critical technology needed to build and launch satellites. While that policy has been latent at the agency for decades, it has received a fresh impetus with the stricter
export-licensing rules that U.S. lawmakers put into place in 1999.


To make an ITAR-free policy work, European government and industry officials say,
parts currently purchased in the United States would need to be built by European companies with sufficient contract volume to assure long-term production-line continuity and to reduce unit costs. U.S. satellite contractors selling into Europe benefit not only from the dollar’s current weakness, but also from the fact that they have a domestic government market to assure production volume. This is not the case in Europe, where civil and military space customers spend much less than their U.S. counterparts.


Tesat-Spacecom of Backnang, Germany, will lead a payload-development team for the Hispasat AG1 satellite that has
numerous Spanish companies including the Spanish division of Thales Alenia Space and CASA, the Spanish division of Astrium Satellites.


With backing from the Spanish space agency, CDTI
, the Spanish contractors will develop an antenna capable of providing four reconfigurable Ku-band
and an advanced on
board processor.


Hispasat officials said the satellite would have 20 Ku-band transponders and three Ka-band transponders, with the latter
provide broadband data transmissions in Spain and Portugal. Ku-band spot beams will also cover the Americas, a growing market for Hispasat.


Small GEO is intended to give Germany its own national-branded satellite design and enable Europe to compete in the market for satellites weighing around 3,000 kilograms at launch. “We see a market for this that is much bigger than we expected when we started the program,” Fuchs said.


Small GEO will compete with the smallest versions of Thales Alenia Space’s Spacebus product, and also with satellites made by Orbital Sciences Corp. of Dulles, Va., and by a joint venture between
Astrium Satellites of Europe and Antrix Corp., the commercial arm of
the Indian Space Research Organisation
. The joint venture has already sold two spacecraft to commercial customers.