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5/28/99 - Global space business collides with concerns of U.S. national security.
COLORADO SPRINGS, Colo. _ The global space business is colliding with the earthborn concerns of U.S. national security. Among the more pressing questions: In a business that literally transcends borders, can the government hope to regulate the transfer of militarily advantageous technology and know-how?
And why is it just as difficult to export a satellite to friendly countries as it is to potential enemies?
Those questions were among a cluster of others raised at the recent U.S. Space Symposium, an annual gathering of commercial, military and civilian space specialists. Among the dilemmas discussed:
As the U.S. military buys more commercially available Earth imagery for intelligence, U.S. suppliers of that data could find themselves supplying the same valuable information to foreign customers during times of conflict.
Foreign corporations are buying U.S. companies, meaning they own portions of America"s communications infrastructure, a crucial resource.
In the age of corporate consolidation, the U.S. military is buying hardware from U.S. contractors who have foreign partners.
U.S. space companies" on-orbit assets, which are important to the military and the nation, are vulnerable to attack.
Representatives of the military at the symposium focused on vulnerabilities born of globalization. Not surprisingly, business people argued that security has gone too far.
The U.S. satellite industry says red tape has slowed opportunity in the white-hot communications business, endangering America"s dominance in the marketplace.
Security concerns have led to a backlog at the State Department of hundreds of export-license applications for commercial-satellite launches atop foreign rockets, or for the export of satellites for use overseas.
Export restrictions are intended to ensure potential enemies don"t gain insight into superior U.S. technology _ even that of the private sector allowing them to match it, exceed it or circumvent it.
But U.S. space companies see heightened scrutiny as a competitive disadvantage because of the time it takes to win U.S. government approval. Foreign competitors have no such restrictions, they say.
Congress last year switched the approval authority for technology exports from the Commerce Department to the State Department after questions were raised about the launch of U.S. satellites on Chinese rockets.
A certain level of knowledge is necessary to marry a satellite to a rocket. But detailed inspections of hardware or, in the case of failures, wreckage can be an entree to proprietary information. So can overly detailed discussions between a satellite-maker and its launch partner.
An unclassified U.S. industry report on a failed 1996 launch may have inadvertently helped China technologically, some officials say, although it"s not clear if the information was militarily valuable.
Criminal and congressional investigations followed. Fueling a partisan fire in Congress were allegations that Bernard Schwartz, the chairman of Loral Space & Communications, one of the companies involved, had bought influence as a major Democratic contributor. President Clinton had granted Loral specialdispensation to launch the satellite on the Chinese Longmarch rocket, a converted missile.
Seattle-based Boeing is affected by the space-security issues in several ways. It is an exporter of space technology, including satellites, and an international collaborator potentially hampered by restrictions.
Boeing also is a domestic launch-vehicle provider whose business could be boosted if U.S. satellite-makers are forced to turn to domestic rockets because of the cumbersome approval process.
And Boeing, too, has had a scrape with export restrictions, under the previous Commerce Department rules last year. It failed to follow some reporting procedures in dealing with its Russian and Ukrainian partners in the Sea Launch venture, reporting itself to authorities and paying a civil penalty. Nothing important is believed to have been leaked. But a criminal investigationcontinues. It"s not clear if the company or foreign nationals are the target.
The policy change by Congress wasn"t intended to hamper business but to avoid security breaches.
As part of the Defense Authorization Act, Congress last year moved commercially exported satellites _ even the kind that merely transmit TV signals _ from the so-called Commerce Control List of the Commerce Department to the U.S. Munitions List of the State Department.
""We"re controlled the same way as tanks and guns and bombs are, and that"s our problem,"" said Clayton Mowry, executive director of the Satellite Industry Association.
Moreover, Mowry said, the State Department was woefully unprepared for the change. At Commerce, there are some 200 export-licensing officers. At State, there are 17, and only one is working on satellites. Applications are piling up rapidly.
And a new provision requires that Congress be notified of every license.
In all, the time from application to approval could be up to 20 months,
Mowry said. Under the Commerce Department, there is a three-month time limit for export approvals. The longest it takes to build a complicated satellite is about 18 months, and some satellites can be mass-produced in a matter of days.
A months-long delay on Earth means a satellite isn"t generating revenue in space, not to mention the planning problems it creates.
""What the Congress did was ridiculous,"" said Richard DalBello, a vice president for government affairs for ICO Global Communications, ""and the way it"s being implemented is unacceptable.
""Who are we protecting this (technology) from? Dangerous foreign nationals like the Brits, Italians, French people.""
Speaking of whom, the French-led Arianespace consortium has a lot at stake, too _ as do many other foreign launch companies and satellite customers. Seventy percent of the satellites launched on Ariane rockets are American-built.
""Things are getting more difficult, although they should go smoother,"" Serge Plattard, director of international relations for the French space agency, said of the U.S. export process. He said Europeans are prepared to prove the intellectual security of their launch program.
Through NATO, Britain, France, Germany and Italy recently filed a formal protest with the White House, citing fears that Arianespace will lose the business of U.S. satellite-makers.
In this country, some fear that if U.S. satellite launches elsewhere are restricted or delayed, other nations will fill the void, catching up to, or surpassing, America technologically, or in market share. That"s a somewhat intangible security threat itself.
""Commercial demands are going to be fulfilled somewhere,"" said Frank DiBello, vice chairman and managing director of SpaceVest, a financing company. ""It"s only a question of whether it"s a U.S. company that does that.""
Deputy Commerce Secretary Robert Mallett urged space leaders to push for a more enlightened approach to satellite exports. ""We simply cannot let the innovations pioneered by Americans be captured by the corporations in Europe or the Pacific Rim or anywhere else in the world, "" he said.
No one advocated a lessening of supervision of space-business exporting. But there was sentiment that it be streamlined. The discussions gave rise to numerous other security issues related to the globalization of the space industry:
Orbital services: Much revenue for U.S. providers of communications systems and Earth surveillance data comes from foreign clients. At times, U.S. companies may have an obligation to turn off that flow of information, especially remote-sensing data sold overseas.
""In times of crisis, they"ve just got to stop it, and their business case needs to take that into account,"" said Air Force Gen. Richard Myers, commander of the North American Aerospace Defense Command and the U.S. Space Command.
Corporate ownership: In the telecommunications industry, said aerospace and defense attorney Sheila Cheston, there are a number of international mergers and acquisitions under way, ""which raise all kinds of policy issues about how the government feels about potential foreign control over pipelines and communication assets and space-based assets.""
Foreign partners: Boeing and Lockheed Martin are developing separate rocket families under the Air Force"s Evolved Expendable Launch Vehicle contract. The rockets also will be used commercially.
Boeing"s Delta IV family will use Boeing"s own rocket motors. But Lockheed Martin"s Atlas V family uses engines built in a joint venture by Pratt & Whitney and NPO Energomash of Russia.
The Atlas engines for the Air Force models will be built in the United States. The engines for the commercial model will be built in Russia. Lockheed Martin awaits an export license to proceed, and the delay concerns military leaders.
_Protection of assets: ""Space systems are too tempting a target for terrorist or military action,"" said Myers. Commercial-satellite operators ""see no business case for protection,"" he warned, despite the potential chaos of satellite disruptions.
The impact of such was demonstrated when the Galaxy IV communications satellite went out of control last year, disrupting TV, radio and pager service for days.
ILLUSTRATION (from KRT Graphics Network, 202-383-6064):
SPACE SECRETS illus., 30 x 60p, Elliott Rosenstein illustration of U.S. and foreign rocket boosters and a satellite.
(c) 1999, The Seattle Times.
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AP-NY-05-27-99 1807EDT< -0- By Chuck Taylor The Seattle Times
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