Why has the U. S. State Department Declared War on the American Satellite Industry?

by Dale M. Gray

Why has the U. S. State Department Declared War on the American Satellite Industry?

Sometime last year while we were sleeping, America changed its policy toward the export of satellites and of the export of critical technologies. While we still welcome foreign technology with open arms, we have become defensive and paranoid when it comes to the possible export of certain technologies. Perhaps the world has become a more dangerous place in the last year. Certainly North Korea, Pakistan, Iraq and Iran have done their share in instilling fear in our leaders. This fear has crystallized in the realization that there is little to be done to stem the flood of information that is streaming from our shores via the Internet. To compensate, the government appears to be trying to prevent key technologies from becoming widely available and understood. In a world increasingly controlled by satellite communications and intelligence, the US has taken steps to assure its supremacy on what it perceives to be the high ground. Unfortunately, the enabling legislation has widely missed the mark. Instead of slowing the transfer of satellite technology, the legislation has created a real threat to American industry and the intellectual environment from which we derive our strength.

The U. S. State Department (among others) is justifiably concerned with the threat of transfer of critical technology to unstable or hostile powers. US satellite companies Hughes and Loral have been charged with allowing information to transfer after launch failures in China. The problem was compounded when the Chinese apparently lied about their 1996 investigations of the crashed Loral satellites. The State Department believes that the Chinese gleaned advanced technology from the satellites. Another leading American company, Boeing's SeaLaunch Venture, had to pay a $10 million fine to the US for having ill-defined firewalls to limit technology transfer in their joint venture with Ukraine and Russia rocket companies. But the filter works only one way. In the midst of the flurry of accusations and denials, Lockheed Martin is creating the new generation of Atlas rockets using purchased rocket technology developed by the Soviets.

In response to this perceived threat to U. S. security, legislation was placed in the 1999 defense bill which was signed into law last fall. Under a provision of the law, control of satellite exports was transferred from the Commerce Department to the State Department. At the same time, commercial satellites were reclassified as "munitions". The idea was to prevent technology from advanced American satellites from reaching unfriendly hands. In this it appears to be successful. However, the law will ultimately achieve another goal: the stifling of the American satellite industry. While the State Department is worried about third world powers, the only ones hurt so far by the law are American companies. Globalstar, in its efforts to find a replacement launchers for its communication satellite constellation has been repeatedly set back by the new American law. In the meantime, its competitor, the Iridium system will have had almost a year to solidify its hold on the market. Alternately, foreign satellite buyers are losing interest in buying American built satellites because the new restrictions will not allow them to see and understand in detail what they might be purchasing. America has long enjoyed the lion's share in the world communication satellite market. This law is eroding the American market share.

There is, however, a more insidious aspect the law. It is endangering our future as world leaders in the manufacturing of advanced satellites. The law has effectively ended the launching of American student satellites on foreign rockets. Because of budget constraints, these student satellites have to find free or nearly free rides as secondary payloads. Often the only space available is on foreign rockets. Recently a student satellite built by Stanford students lost its chance for a free ride as a secondary payload on a Russian rocket because of its reclassification as a "munitions". The offending satellite contains a digital camera, a voice synthesizer and a couple of telemetry and autonomy experiments. Many of the offending parts were purchased at Radio Shack. Across the nation, similar student satellite projects have been grounded by the new law because they now have to wait for free space on domestic launches. These students are the talent pool from which our future advanced satellites will be created -- not just commercial satellites, but the military reconnaissance, communication and navigation systems that our country depends on to maintain its security.

America is strong in part because it leads the way in science and new technologies. Our national security is intertwined with our ability to finance research and to create new technologies. The satellite export portion of the 1999 defense bill is not achieving its desired goal of making us a stronger and more secure nation. Instead it is weakening our economy and eroding the intellectual climate that has allowed our satellite industry to prosper. The legislation is a poorly-designed band-aid to a problem that stems from America's rapidly emerging communications satellite frontier outpacing American launch providers ability to boost satellites economically into orbit.

This is bad legislation that is not doing what it was intended and should be repealed, rewritten or replaced so that does not harm what it seeks to protect.

Next issue: Why American companies are using foreign rockets to launch commercial satellites.