1 “State Of The Satellite Industry” Report“State Of The Satellite Industry” Report Prepared by Futron Corporation Prepared by Futron Corporation Sponsored by the Sponsored by the June 2005 2 Satellite Industry Overview Satellite Industry Overview Launch Industry Launch Industry Launch Services Launch Services Vehicle Manufacturing Vehicle Manufacturing Component and Component and Subsystem Manufacturing Subsystem Manufacturing Satellite Manufacturing Satellite Manufacturing Satellite Manufacturing Satellite Manufacturing Component and Subsystem Manufacturing Component and Subsystem Manufacturing Satellite Services Satellite Services DBS/DARS DBS/DARS Fixed Satellite Services Fixed Satellite Services Voice, Video, Data Voice, Video, Data VSATs VSATs Remote Sensing Remote Sensing Transponder Leasing Transponder Leasing Mobile Satellite Services Mobile Satellite Services Mobile Telephony Mobile Telephony Data/Messaging Data/Messaging Ground Equipment Ground Equipment Mobile Terminals Mobile Terminals Gateways Gateways Control Stations Control Stations VSATs Higher power allows for more applications; Higher order modulation schemes allow for more data throughput (i.e. reduced costs); Spot beams allow for frequency reuse; 11 Broadband Connectivity to Aircraft Forward link: 10 Mbps Return link: 128 - 512 Kbps E-mail/Internet access Emerging Services/Applications Emerging Services/Applications Broadband Connectivity to Homes/Offices Hughes Network Systems Direcway / Spaceway Americom-to-Home WildBlue Mobile Broadband Services “Comms on the Move” In-motion: Transmit and Receive on-the-go Multi-Mb inbound to vehicle, up to 500kbs+ out Valuable for Network Centric Operations Consumer Focused Satellite Services Ancillary Terrestrial Component (ATC) Satellite Radio 12 Satellites Are Critical Infrastructure Satellites Are Critical Infrastructure Early 2003 GAO Report re: Commercial Satellite Infrastructure “Commercial Satellite Security Should Be More Fully Addressed” January 2003 Homeland Security Act “Satellite Communications Infrastructure Is Critical National Infrastructure” May 2004 NSTAC Satellite Task Force Report to President “Commercial Satellite Industry Is Critical To Our National, Economic, and Homeland Security” December 2004 Satcom Policy Memo and Action Plan from OSD/NII “DoD Must Build Commercial SATCOM Into The Wideband Milsatcom Architecture” Early 2005 National Security Space Policy TBD 13 DoD Use Of Satcom DoD Use Of Satcom Since 9/11/01 the DoD has become our single largest customer FY 2004 FSS Airtime $350M FY 2004 MSS Airtime $175M FY 2004 Commercial SATCOM Equipment $200M Forecasts predict that by 2010 Demand could exceed Supply by 12 Gbps Commercial satellite industry has gone from “augmentation resources” to “strategic partners” for USG Agencies and the DoD 14 Requirements Requirements Space Segment Turn Key Global DoD Satellite Communications Requirements D I S A Current DoD Commercial Satcom Procurement Current DoD Commercial Satcom Procurement DSTS-G Contractors Global Satellite Operators 15 Multi-Year Support From Hill Multi-Year Support From Hill Language in HASC Reported H.R. 1815 - National Defense Authorization Act of 2006 Commercial communications bandwidth The committee recognizes the important contribution commercial satellite communications systems provide to military operations. The need for commercial bandwidth to supplement military systems will remain a requirement into the future. As a result, the committee believes a long-term commitment to the appropriate use of commercial satellite communications capacity is in the U.S. governments best interest. The committee believes a multi-year procurement strategy with the use of annual contract options would provide sufficient commitment to industry and provide the government ample flexibility to terminate work as necessary. The committee recommends use of this alternative to procure commercial bandwidth to support military operations for those cases where it is the most efficient and effective procurement method. 16 Problems With U.S. Export Controls Problems With U.S. Export Controls Lack of Transparency and Predictability Increase costs and delays Widely Available Technologies Deny high-tech industries in the U.S. a level playing field Lack of Tiered System Allies are examined under the same scrutiny as rogue states Extra-Territorial Reach On Components Foreign manufacturers wary of U.S. components Lack of Understanding Commercial Communications Satellites Differ from Military/ Scientific/ Civil Satellites and Launch Vehicles 17 Satellite Services Lower Transponder Rates Higher Insurance Costs Industry Consolidation Export Controls DBS/DARS Access To Adequate Spectrum Competition With Terrestrial “Giants” Satellite Manufacturing/Launch Overcap