NEW YORK — A U.S.-Canadian venture that has raised some $480 million to refuel telecommunications satellites in orbit appears to be foundering because of uncertainties about U.S. government reaction to it, project managers said Oct. 12.

To enhance the appeal of its Space Infrastructure Services (SIS) proposal to the U.S. government, Canada’s MDA Corp. has agreed to scrap the Russian hardware initially selected as the refueling spacecraft, and abandon a Russian rocket as well, in favor of U.S. hardware.

Whether that will be sufficient to permit MDA and its partner, Intelsat General Corp. of Washington, to bid for future U.S. government contracts for satellite in-orbit servicing remains unclear. What is already certain is that using U.S. gear will increase the cost of putting an SIS system into service and put a strain on the project’s already stressed business model.

“This has changed our business plan,” Steve Oldham, president of MDA’s SIS division, said here during the Satcon conference. “The original design used a lot of Russian capability. Now we’re taking on U.S. suppliers. We are utilizing an American bus and launch and it is a very U.S.-flavored mission. It has increased our costs a wee bit.”

Richmond, British Columbia-based MDA had agreed to invest about $200 million over four years in the SIS project, with an inaugural launch foreseen as early as 2015. It secured a commitment from Intelsat General to pay $280 million for an SIS mission, assuming a certain number of Intelsat satellites were successfully refueled in orbit.

Intelsat General also agreed to act as an SIS agent in Washington to smooth its reception among U.S. government agencies. It is there that SIS has faced headwinds of two kinds.

First, the U.S. Defense Department has shown little interest in the project even though refueling military satellites — among the most expensive systems launched — figured heavily in the original MDA-Intelsat business plan.

Col. Michael Lakos, chief of the U.S. Air Force’s Milsatcom division, told the conference that U.S. military interest in satellite servicing is constrained by the growing pressure on military budgets, which makes any new initiative a tough sell.

Secondly, Lakos said, the U.S. military satellite telecommunications fleet is now being renewed with the Advanced EHF and Wideband Global Satcom fleets, meaning the MDA-Intelsat satellite-servicing idea is arriving at an unfavorable time in the cycle of satellite procurement.

Oldham said MDA and Intelsat had reworked their business plan so that it is less dependent on securing a military customer in the near term.

But perhaps even more threatening than the indifference of the U.S. Air Force is the interest taken in satellite servicing by NASA and the U.S. Defense Advanced Research Projects Agency.

Richard DalBello, Intelsat General vice president for legal and government affairs, said NASA and DARPA are preparing bid proposals to industry for a satellite-servicing mission.

The ability of MDA and Intelsat to bid on this work, given the Canadian heritage of the SIS technology, is unknown, DalBello said.

DalBello made clear that MDA and Intelsat are not seeking U.S. government funds for a large development program.

“We are not interested in there being a government program because it will take 10 years and cost a billion dollars,” DalBello said. “There is no need for a Hail Mary pass from the government, and we’re not waiting around for that. We would prefer to sell the service to the U.S. government.”

At least one company, Vivisat LLC of Dulles, Va., which is backed by rocket-hardware builder Alliant Techsystems (ATK), is standing ready to bid for any U.S. government program involving satellite servicing. Vivisat is developing what it calls a Mission Extension vehicle that would attach itself to satellites and act as an upper stage and a fresh fuel tank.

Bryan McGuirk, Vivisat’s chief operating officer, said ATK and Vivisat “have put together a supplier and infrastructure to offer a firm, fixed-price contract” for an eventual U.S. government contract proposal. McGuirk said a NASA bid proposal was expected to be released soon.

“We are a U.S. company and we will manufacture in the U.S.,” McGuirk said.

MDA and Intelsat have agreed to extend their collaboration to the end of the year before deciding whether to proceed with hardware development.

Oldham said regulatory issues remain to be sorted out for a vehicle that will be migrating among different slots near geostationary orbit 36,000 kilometers over the equator, where most telecommunications satellites operate. The SIS refueling or repair would occur slightly above this belt, so that in the event of a problem it would not leave dead hardware on the orbital highway.

But the stance of NASA will clearly be key to determining whether MDA and Intelsat move forward, Oldham said.

“NASA wants a domestic [satellite servicing] capability,” Oldham said. “We can’t compete with the U.S. government if it chooses to fund a competitor. To what extent do they distort the marketplace by enabling others?”



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Peter B. de Selding was the Paris bureau chief for SpaceNews.