The Unanticipated Consequences of Expanding WGS

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The Department of Defense’s expansion of the Wideband Global Satcom (WGS) program, and its drive to add new international partners to the global constellation, has resulted in the U.S. government’s becoming a front-line competitor in the commercial wideband satellite market. Not only does the program appear focused on replacing as much commercial capacity as possible, the government is becoming the de facto service provider to a host of high-value customers heretofore dependent on reliable, cost-effective satellite communication services from commercial operators. These customers are effectively now “off the market” to the commercial sector for the long term, eroding the vibrant satellite bandwidth market.

Securing reliable satellite bandwidth is a major priority of government agencies and the U.S. military. Defense, the intelligence community and warfighters alike depend on unfettered access to sufficient bandwidth to accomplish mission-critical activities.

To this end, the National Space Policy (and the National Security Space Strategy) clearly calls for the increased use of commercial in fulfilling military satellite communications (milsatcom) needs. Regrettably, the Defense Department has interpreted this commercial mandate to apply almost exclusively to the single commercial satellite manufacturer building WGS, and to owning and operating its own satellites. This discounts those commercial satellite builders and operators that have been critical mission-enablers, successfully supporting all the conflict areas in Iraq and Afghanistan over the last decade.

Commercial support of milsatcom priorities has resulted in the commercial sector ably and efficiently providing 80 to 90 percent of the military’s bandwidth requirements. The disquiet caused by these statistics has led to calls from within the military to right this purported imbalance. But why be defensive about reliance on commercial bandwidth? Since the government’s systems did not have sufficient bandwidth capacity to meet the rapid expansion of its global footprint, this oft-quoted ratio of commercial/government provision of satellite communications should come as no surprise, nor should it cause undue concern.

Maybe a “better” ratio could be achieved during peacetime, but given far-flung conflicts, inevitably the balance will shift to commercial. At no time since satellites became available as a resource to military operations has a military satellite system ever fully accommodated user demand. This has never been truer than in our Information Age, given the influx of young warfighters weaned on the connectedness of the modern era and the host of applications available to them. Government cannot afford the luxury — or taxpayers the cost — of trying to build its own satellites for this exponential demand. And why should it, when the commercial sector has more than demonstrated its ability to support this demand?

By pouring scarce milsatcom resources into a single system, the Defense Department is:

  • Shortchanging its protected communications capabilities, potentially undermining national security.
  • Minimizing its stake in the broader industrial base, further eroding market share of commercial providers.
  • Perpetuating the ad hoc, costly spot-market purchasing of bandwidth when operational demands and regional hot spots exceed WGS capabilities.

Put simply and bluntly: With WGS, the Defense Department is buying a system it cannot fully justify, with dollars that are simply not available in this budget environment. More to the point, the U.S. government is competing on an uneven playing field with the commercial sector, knowingly disadvantaging one sector of the space industry to the benefit, in this case, of a single satellite manufacturer and its supply chain.

Many satellite providers based their business plans and invested significant shareholder dollars on the premise of serving current and future government milsatcom needs and requirements. They identified gaps in the DoD’s arsenal of satellite capabilities, expanded their fleets and tirelessly reached out to government and DoD customers.

XTAR is a perfect example: The company built and launched two X-band satellites to fill an acknowledged capability gap — at a time when the troubled Transformational Satellite program was still on the books and WGS still a modest gap-filler program. As another clear example, Intelsat innovatively invested in launching a UHF payload, delivering capability years in advance of what WGS will provide. SES stepped forward, too, repositioning its SES 3, originally slated for coverage of the Americas, over the Indian Ocean to better support our troops and unmanned aerial vehicle fleets.

The government’s approach to milsatcom overall, and especially WGS, gives all commercial providers reason to pause and possibly rethink their strategies. As these examples indicate, industry has consistently been proactive in its efforts to support critical unmet communications needs. The Defense Department has clearly rebuffed these efforts — with no rational explanation or logic.

A recent Government Accountability Office report showed an increase of 321 percent in defense spending on major space acquisition programs between fiscal 2011 and 2016. This points to one inescapable conclusion: The Defense Department should work with industry as a whole to ensure its future milsatcom needs are met, to keep warfighters equipped to communicate whenever and wherever necessary, and do so within rational budget constraints. This dialogue and the ensuing business collaboration will ensure that industry is prepared to support these critical requirements.

The path of Defense Department self-reliance and the undermining of the private sector will lead to disenfranchisement of commercial satellite operators and, once again, the unpalatable loop of higher pricing for short-term spot-market leases. This is a consequence that our country and taxpayers cannot afford today — let alone in the future.

 

Philip Harlow has served as president and chief operating officer of XTAR LLC since June 2010. XTAR is a private company that owns and operates two payloads operating in the X-band frequency, exclusively serving U.S. and allied government and military customers.

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