WASHINGTON — Commercial satellite operators for years have urged the Department of Defense to rely less on government-owned satellites and more on their own services. While advocacy efforts haven’t resulted in a massive shift yet, a proposed increase in the 2025 budget allocation for commercial satellite communications integration offers a glimmer of hope, said a senior industry executive.
The Pentagon’s proposed budget for fiscal year 2025 includes a $134 million line item for “commercial satcom integration” — an increase from $71 million in the 2024 budget. While the amount is still dwarfed by the $1.2 billion the Space Force has for military satellite programs, the industry views it as a positive sign, Rebecca Cowen-Hirsch, senior vice president for government strategy and policy at Viasat, told SpaceNews.
Viasat, a global communications firm, sells satcom services to the U.S. government and its market share increased last year after acquiring rival satcom operator Inmarsat.
“We’re hopeful this means DoD is getting more serious about leveraging commercial capabilities,” she said. But noted that the devil will be in the details in terms of how this integration funding is used.
What satellite companies hope is that the funding is used to establish a dedicated working capital fund under the Space Force’s Commercial Space Office. A working capital fund is essentially a pot of money set aside for the operational needs of military satcom users. That would really streamline the ability for combatant commands and others to take advantage of commercial services, Cowen-Hirsch said.
The commercial satcom integration fund was only established a few years ago, and it started out with about $25 million. The 2025 request for $134 million “certainly reflects national policy and defense strategy,” which calls for DoD to leverage commercial space services, she added.
Difficult to compete
All branches of the military currently buy hundreds of millions of dollars worth of commercial satcom services but have to use various types of contracting vehicles, whereas a dedicated working capital fund would ease the process for military units to access commercial services.
Cowen-Hirsch said DoD has not provided details on how the commercial satcom integration funds will be actually spent.
Commercial satellite operators recognize that it’s difficult to compete against major weapon systems acquisitions “supported strongly by their defense industrial base, which has a very strong lobbying component as well,” she said.
The fiscal year 2024 defense funding bill passed by Congress March 21, allocated around $1.2 billion for traditional military satellite programs. “Commercial services are consumed but in an ad hoc unbudgeted manner,” said Cowen-Hirsch.
The procurement mechanisms still favor legacy government systems over commercial integration. Nevertheless there are signs of growing interest in commercial options within the DoD, particularly in new space services like SpaceX’s Starlink internet constellation in low Earth orbit.
Satellite operators have a growing number of contracts across the military branches and combatant commands but have not been able to achieve a major strategic shift toward greater use of commercial services versus government-owned capabilities.
Cowen-Hirsch said satellite companies — including the traditional geostationary satcom providers and the newer LEO operators — are increasingly working together so DoD can access multiple orbits to get additional resiliency and more reliable services, she said.
The proposed increase for commercial satcom integration could help pave the way for expanded use of commercial services across the military, she said, but it still remains to be seen how that plan will be implemented.
Echoes in Remote Sensing
The debate over commercial integration mirrors a similar ongoing discussion within the remote sensing satellite industry. Remote sensing companies are eager to gain a bigger foothold in defense and intelligence agencies, offering high-resolution imagery and other data for surveillance and monitoring purposes.
There’s a definite recognition within the government that commercial remote sensing capabilities are valuable, and they are taking steps to leverage them, said Frank Backes, chief executive of remote sensing satellite operator Capella Space. However, building trust and assurance with government customers that private-sector capabilities will be available 24/7 and under any circumstance takes time, he said.
One of the industry’s major customers is the National Reconnaissance Office, a U.S. intelligence agency that builds and operates spy satellites. The NRO works with many commercial providers of satellite data but, like DoD, continues to fund large procurements of government-owned satellites.
“The government still sees a need for sovereign control of the sensing platform itself,” Backes said during a panel discussion at the recent Satellite 2024 conference.
A goal for the industry is to “build up trust” with the government, said Backes. “Another issue that’s really important to keep in mind, from a space perspective, is what would happen if there were a conflict in space,” he added. “What the government is really trying to get after is to create an architecture that can survive a conflict.”
The industry is now showing that its systems can withstand attack, which gives the government more confidence in using commercial services, Backes noted. “We’re getting attacked today, with reversible effects against our satellites. And certain countries have made it very clear that dual-use commercial capability is now a legitimate target.”
“A hybrid architecture is where the future is going,” he said. “And it will include sovereign capability, it will include commercial capability, and they will be integrated. And the key to all of that is the trust component and the survivability component that we all know we have to achieve.”
