The high-tech cool war

Unfortunately for U.S. industry, many of the predictions made in that article have now come true: In a nutshell, U.S. satellite manufacturers have lost orders to Europe and European manufacturers have lost confidence in U.S. suppliers.

The evidence: Last year Hughes was forced to default on a $450 million contract with Asia Pacific Mobile Telecommunications and Space Systems/Loral was obliged to suspend work on Chinasat-8. Meanwhile, the German space company DASA notified its project managers that they should seek non-U.S. suppliers wherever possible. This year, following the Canadian government’s decision to ditch a potential U.S. supplier, Alenia Aerospazio of Italy won a contract to build the platform for the Radarsat-2 spacecraft. Alenia too has reduced its use of U.S. components and could be forced to abandon them entirely.

U.S. government officials have agreed, in principle, to treat some of their allies, such as Canada and some European nations, as special cases. Canada, for example, has been accorded an exemption under the U.S. International Traffic in Arms Regulations (ITAR) accord, presumably because America does not see Canada as a military threat.

Well, it’s very nice of America to consider Europe a special case under ITAR, but it misses the point. Commercial communications satellites and their components are not arms and should never have been included in the export regulations in the first place.

Apart from that, Europe and the rest of the world do not ultimately need America to supply its satellites. Yes, I know America’s leading satellite manufacturer, Hughes, has sold more than any other manufacturer, but “sold” is past tense. Let’s consider the future.

Following the recent formation of Astrium, a corporate amalgam of French, British and German space companies, Europe is home to two major satellite prime contractors (the other being Alcatel Space) and the world’s leading launch provider, Arianespace. In a sense, Europe is now a one-stop shop for satellite systems, a monopoly position once held by the United States.

Europe also has one of the largest satellite operators, Eutelsat, which plans to launch seven new satellites in the next two years as part of a $1 billion upgrade program. It is possibly not surprising that Eutelsat’s three generations of satellites have been built in Europe, but Astrium’s recent contracts for the Intelsat NI-Alpha spacecraft and Imnarsat’s fourth generation show that international organizations are also turning to Europe for their future orbital infrastructure.

A major argument against the transfer of licensing authority to the State department, and the reason Europe’s manufacturers are picking up the extra satellite contracts, is the time it takes to get an export license. The State department’s sensitivity to the issue was illustrated in May, when it closed its export licensing office for two weeks while it relocated. No written notice of closure was issued. Presumably no account was taken of any disruption that might be caused. I would guess that the words “to serve” do not feature in its motto.

Another argument against the current bureaucracy is that it hinders launch failure investigations, an issue of crucial importance to two international joint ventures involving American companies – International Launch Services (ILS) and Sea Launch. Both systems have suffered failures, of the Russian Proton and Ukrainian Zenit respectively, in the last year. The constriction of information flow enforced by ITAR rules extended the investigations, reduced the operators’ capability to serve the market and placed their businesses at unnecessary risk.

According to reports, at one point during the failed investigation, foreign nationals stationed at Sea Launch’s Long Beach home port were denied access to their own technology. Ultimately, this type of mentality and the lack of communication that ensues leads to technical failure — and this is one vicious cycle the launch industry cannot afford to enter.

All three of America’s leading satellite manufacturers have been accused by the government of compromising national security by releasing satellite and launch vehicle information to foreign nations, particularly China. This has been an issue for more than a year now, yet no manufacturer has been charged with a crime, let alone convicted. Perhaps the ultimate event occurred in April when, during a review of NASA’s Next Generation Space Telescope (hardly a national security concern one would think), a number of researchers were asked to leave the room because a Lockheed Martin presentation contained information controlled under ITAR. Strangely, one was a U.S. citizen (but employed by a German science institute); another was a French scientist with permanent U.S. residency status. Is U.S. industry running scared or what?

Indeed, the fear of Big Brother has spread to the ivory towers of U.S. universities, such as Stanford and MIT, which now avoid hiring non-U.S. citizens, dreading the consequences of the ITAR regime. It’s lucky this is not the McCarthy era because they’d be rooting out anyone with experience of a European vacation.

America is often accused of being parochial and it does not need to exacerbate this image. Apart from that, I seem to remember that Americans are proud of their rights for freedom of speech and expression? Is this not the cornerstone of a democracy?

Word is, America has an election coming up. One wonders whether industry supporters will be brave enough to make this an issue. Or will they quietly withdraw behind the ITAR curtain?

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