Russia’s Soyuz rocket on July 14 launched 72 small satellites, including 48 for Planet. Under legislation passed by the U.S. Congress, Soyuz launches would not be available for companies seeking to sell satellite services to the U.S. Defense Department starting in 2023. Credit: Roscosmos

LONDON — The commercial satellite industry dodged a bullet on Nov. 9 when the U.S. Congress stopped just short of barring U.S. Defense Department purchases of services from satellites launched on Russian rockets.

Instead, a compromise between the more-aggressive U.S. House version and the Senate version, which contained no such ban, ended up with the restriction still in place, but not taking effect until Dec. 31, 2022.

“We now have five years to act, and in that time there is reason to hope we can get this restriction removed,” said one satellite operator who has used Russian vehicles. “Obviously if the House version had prevailed, we would have been faced with an immediate problem.”

Most big commercial satellite operators make use of Russian rockets, either the larger Proton, sold through International Launch Services (ILS) of Reston, Virginia; or the medium-lift Soyuz rocket, sold by ArianeGroup’s Arianespace of Europe and by GK Launch Services of Moscow.

The geostationary-satellite fleet operators, including Intelsat, SES, Eutelsat, Inmarsat and Telesat, have always maintained they need at least three viable rockets to choose from. For now, that means ILS, Arianespace and SpaceX. The big fleet operators generate 10-15% of their annual bandwidth-sales revenue from the U.S. government, mainly the U.S. Defense Department.

Several fleet operators sought to make the best of the Congressional action, saying it is proof that their industry has at least some voice in Washington, even if was insufficient to prevent the House from bundling a launcher ban into a wider concern about information assurance.

Nonetheless, it was clear that the satellite sector was unable to persuade the Congress not to hinder the business of an industry that provides some 70% of the U.S. government satellite communications requirements.

The new law means that after having imposed a de facto ban on commercial satellite launches using Chinese rockets, and a now-porous ban on commercial U.S. use of India’s rocket, the U.S. government has further narrowed the launch options for companies wishing to remain in its favor.

It was unclear whether any of the current or prospective U.S. launch providers — Blue Origin, United Launch Alliance, SpaceX or Virgin Galactic/Virgin Orbit — was active in crafting the House language. United Launch Alliance has its own issues with the U.S. Congress with respect to its use, on the Atlas rocket, of Russian engines for U.S. military satellite launches.

The congressional decision, embedded in the National Defense Authorization Act, affects not just operators of commercial geostationary-orbit telecommunications satellites, but also operators of mega-constellations of broadband satellites in low Earth orbit.

Possible impact for constellations, Earth observation, smallsat market

The OneWeb constellation, for example, has purchased 21 Soyuz launches from Arianespace. While these launches are scheduled to be completed before the congressional measure takes effect, the restriction will have to be taken into account for next-generation OneWeb launches and for other constellation operators seeking launch capacity. The SES-owned O3b constellation thusfar has been launched exclusively aboard Soyuz rockets from Europe’s spaceport.

It also affects commercial Earth observation companies like Planet of San Francisco, which has repeatedly argued that it needs the widest possible access to launch capacity to manage its business of launching dozens of short-lived satellites into very low Earth orbit.

These companies, including Planet of San Francisco; and small-satellite launch aggregators including Spaceflight Industries of Seattle and Integrated Solutions in Space (ISIS) of The Netherlands, have made regular use of the Soyuz rocket.

The restriction on the use of Russian rockets for those seeking to sell satellite services to the U.S. government applies to Russian rockets wherever they are launched, according to an industry official whose company has used Soyuz from Europe’s Guiana Space Center.

Europe’s ArianeGroup and Arianespace is planning to reduce its use of Europeanized Russian Soyuz vehicles as it moves to a more European-built launch portfolio including the Ariane 6 rocket starting in 2020 and the more-powerful version of the Italian-led Vega rocket, called Vega-C, starting in 2019.

The Vega-C and the lighter version of Ariane 6 will cover the market niche now occupied by the Europeanized Soyuz, with a full phase-out scheduled to occur by around 2023.

Excerpt from the NDAA after House-Senate compromise

The NDAA language, which now goes to U.S. President Donald Trump for signature, reads in part:

“[T]he Secretary [of Defense] may not enter into a contract for satellite services with any entity if the Secretary reasonably believes that such satellite services will be provided using satellites that will be ‘designed or manufactured in a covered foreign country, or by an entity controlled in whole or in part by, or acting on behalf of, the government of a covered foreign country, regardless of the location of the launch (unless such location is in the United 11 States),” the final version of the NDAA reads.

“The limitation… shall not apply with respect to… a launch that occurs prior to December 31, 2022; or… a contract or other agreement relating to launch services that, prior to the date that is 180 days after the date of the enactment of this subsection, was either fully paid for by the contractor or covered by a legally binding commitment of the contractor to pay for such services.”

“The term ‘covered foreign country’ means any of the following: (A) A country described in section 8 1261(c)(2) of the National Defense Authorization Act for Fiscal Year 2013; (B) The Russian Federation.”

Peter B. de Selding on LinkedinPeter B. de Selding on Twitter
Peter B. de Selding
Peter B. de Selding

Peter de Selding is a Co-Founder and editor for SpaceIntelReport.com. He started SpaceIntelReport in 2017 after 26 years as the Paris Bureau Chief for SpaceNews where he covered the commercial satellite, launch and the international space businesses. He is widely considered the preeminent reporter in the space industry and is a must read for space executives. Follow Peter @pbdes


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