U.S. Government Missing Hosted Payload Opportunities

by

WASHINGTON — Eighteen commercial satellites that could have carried U.S. government piggyback payloads have been placed into production in the past two years, but only one is slated to host such a payload because the government still has no policy on the matter, U.S. government and industry officials said here March 17.

“These are missed opportunities,” Joseph Rouge, director of the U.S. National Security Space Office, said during the Satellite 2010 conference here. “We should have been on all 18 of these satellites.”

As they have for years, commercial satellite operators said they are only too happy to host U.S. government instruments. Depending on how the contract is structured, the government pays an annual fee to the satellite operator, or a sizable up-front fee that can offset the company’s prelaunch investment in the satellite.

One industry official said cost should not be the issue. A space-surveillance sensor placed on a commercial satellite would cost no more than $10 million, this official said, a figure that may not include annual operating charges once the satellite is in orbit.

Rouge agreed that what he called a “neighborhood watch” space-surveillance payload looking at what else is in orbit “should be on all” or most commercial satellites with available room on board.


RELATED CONTENT



Hosted Payloads [Wikipedia]







Charles Baker, deputy administrator at the U.S. National Oceanic and Atmospheric Administration (NOAA), said his agency has identified half a dozen sensors whose likely weight and power requirements would make them suitable for flying as secondary payloads on commercial geostationary-orbit telecommunications satellites.

Baker conceded that NOAA has no budget for such missions, but said the U.S. government’s hosted-payload problem is not tied to the cost of the hardware.

“Unfunded termination liability is what is at issue in these long-term contracts,” Baker said, referring to U.S. government procurement rules that do not accept a future payment liability in the event a contract is terminated early.

Baker said there is ample precedent in U.S. law for changes to procurement policy. “All these rules can be changed,” he said, if the U.S. Defense Department, along with NOAA or any agency wanting to put hardware on commercial satellites, decides to make a clear case before the U.S. Congress, which then would agree to appropriate funds to pay off such liabilities.

Several industry officials questioned whether the Defense Department’s Operationally Responsive Space (ORS) Office, created in 2007, is not an impediment to greater use of the hosted-payload option insofar as the office is set up to develop and launch small satellite sensors on relatively short notice. It could be seen as an alternative to hosted payloads and a competitor for the limited funds available for these kinds of missions.

“I won’t say it’s a distraction, but there is money going there,” one industry official said of the ORS Office.

Rouge disagreed, and said ORS should evolve and that the office “should build payloads that could be flown in any way. ORS should be an incubator. It is not a distraction; it should be an enabler. The big issue is that there is no agreement on a national space strategy” that embraces this kind of partnership with commercial fleet operators.

He said a space strategy should be in place by this fall. “Since it takes about two to three years of thinking before we act, the 2012 [U.S. government] budget is the right place to make the case,” he said.

One possible future hosted-payload model, Rouge said, could be the U.S. Civil Reserve Air Fleet, in which commercial airlines are paid annually to keep available a certain amount of cargo capacity on their jets in the event the U.S. government’s military airlift is insufficient. The airlines are paid a minimum fee whether or not the government uses the capacity.

The Defense Department is already making heavy use of commercial telecommunications satellites by purchasing, on the spot market, conventional C- and Ku-band capacity to transmit data that do not require a high level of encryption. Several studies have concluded that around 80 percent of the total satellite capacity used by U.S. military forces is on commercial satellites.

Arnold Friedman, a senior vice president at satellite builder Space Systems/Loral of Palo Alto, Calif., said Loral estimates that 20 to 30 percent of U.S. military commercial satellite traffic is carried over Loral-built satellites.

Loral specializes in commercial telecommunications satellites. For a company like Boeing Space and Intelligence Systems, the hosted-payload idea is a two-edged sword. Boeing is building for commercial satellite fleet operator Intelsat a spacecraft that will carry a UHF payload for the Australian Defence Force. Without its UHF expertise, Boeing may not have won the Intelsat contract.

At the same time, a proliferation of hosted payloads could erode, at least slightly, the market for dedicated military spacecraft that Boeing builds.

Jim Simpson, Boeing vice president for business development, said it makes no sense for the government to take part in a commercial satellite program if the government wants capacity equivalent to a full satellite. He noted that the government pays top dollar for standard commercial bandwidth because, under current U.S. government policy, the government customer is usually limited to year-on-year leases that are more expensive than multiyear leases.