U.S. efforts to try and stem the proliferation of militarily significant space technology have backfired by increasing the development of foreign space programs and damaging the competitiveness of the domestic satellite industry.
Keywords: Commercial Space Industry, Export Controls, Shutter Control.
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While government contracts were a major contributor to commercial space revenues in 2005, export regulations continued to hamper growth. The International Space Business Council cited the International Traffic in Arms Regulations as the “industry’s most serious issue,” arguing that “what initially was a nuisance to businesses has evolved into a serious problem for US industry.” Many American manufacturers believe that the US export control policy is hampering their commercial competitiveness. ( More ... ) Collard-Wexler, Simon, Thomas Graham et al. Space Security 2006. Waterloo, Ontario: Space Security Index, July 2006. [ 26 quotes ] [ page 94 ]
This latter concern may be overstated, given the progress we have seen to date in China’s space efforts. The U.S. should reconsider its restrictions on satellite technology transfer. The extent and progress of Chinese military programs, which were the target of these restrictions, suggest that U.S. policy has been ineffective. The restrictions applied primarily to commercial communications satellites and their launch, and had little effect on military programs, where the technology is largely unrelated to communications satellites. In only a few areas, such as advanced space sensors, does it make sense to continue tight restrictions on satellite technology transfer from the U.S. To the extent that the restrictions damage U.S. firms (and there is evidence that suggests that they have driven many subcontractors out of the space business) and make it more difficult for U.S. research centers to cooperate with European or Japanese space programs, they actually do more harm to the U.S. than to China. The goal should be to accelerate innovation in the U.S. rather than continue efforts to slow innovation in China. Lewis, James A. "China as a Military Space Competitor." Perspectives on Space Security. Ed. Audrey M. Schaffer. Washington, D.C.: Space Policy Institute, December 2005. [ 8 quotes ] [ page 114 ]
Second, tighter export controls have increased the U.S. commercial space industry's dependence on the Defense Department and raised the costs and risks associated with developing new military space capabilities. Contractors who are desperate to make the winning bid for a small number of lucrative, long-lead-time development projects are likely to promise whatever the sole customer wants, on the fastest possible schedule and at the lowest possible price, in the expectation that requirements, schedule, and cost will be adjusted after the project is underway. Moreover, as the primary customer, the DOD must provide more investment funding, pay a larger portion of fixed costs, and shoulder more responsibility for keeping contractors in business than it would if the commercial side of the U.S. space industry was flourishing. For example, the government's share of the EELV program, a government-indus- try partnership intended to reduce the life-cycle cost of launching large satellites, had nearly doubled by 2005 over the $18.8 billion baseline approved in 2002, with a little more than half of the increase due to the lack of a commercial market. Steinbruner, John D. and Nancy Gallagher. Reconsidering the Rules for Space Security. College Park, MD: Center for International and Security Studies at Maryland (CISSM), 2008. [ 17 quotes ] [ page 58 ]
The French satellite manufacturer Alcatel, which ranks third in the world and first in Europe, has had a commercial presence in China since 1983 and earns 10% of its income there. In 2002, Alcatel and the China Aerospace Science and Technology Corporation (CASC) signed a contract for the joint development of the first Chinese high-capacity communications satellite. Buoyed by this achievement, Alcatel further intends to double its business in the region over the next several years. Consequent to the Cox Report and current export control laws, US satellite manufacturers cannot sell communication satellites to China. These restrictions have caused Beijing to adopt standards that minimize vulnerability to US embargo by increasing compatibility with European technologies. China has opted for the European standard for its GSM mobile telephone technology, which is important for future contracts. Regarding space missions, researchers from China Satellite Launch and Tracking Control General (CLTC), which oversees all China’s launch sites as well as launch and tracking activities, emphasize that "ESA standards have been playing a very important role" in such areas as "PCM telemetry, PCM remote control, telemetry channel coding, emission frequency and modulation and space-carried data management systems." Clearly Europe has made significant inroads into the potentially lucrative China market and intends to expand them. More broadly, "the EU has expressed the intention of developing its strategic partnership with [China]. Johnson-Freese, Joan. "The Emerging China-EU Space Partnership: A Geo-Technological Balancer." Space Policy. Vol. 22, No. 1 (February 2006): 12-22. [ 8 quotes ] [ page 21 ]
Ironically, efforts to deny space technology to potential enemies have hampered American cooperation with other nations and have limited sales of U.S.-made hardware. Concerned about Chinese use of space technology for military purposes, Congress ramped up restrictions on rocket and satellite sales, and placed them under the cumbersome International Traffic in Arms Regulations (ITAR). In addition, sales of potentially "dual use" technology have to be approved the State Department rather than the Commerce Department. The result has been a surge of rocket and satellite production abroad and the creation of foreign-made satellites that use only homegrown components to avoid complex U.S. restrictions under ITAR and the Iran Nonproliferation Act. That law, passed in 2000, tightened a ban on direct or indirect sales of advanced technology to Iran (especially by Russia). As a result, a number of foreign governments are buying European satellites and paying the Chinese, Indian and other space programs to launch them. "Some of these companies moved ahead in some areas where, I'm sorry to say, we are no longer the world leaders," Griffin said. Joan Johnson-Freese, a space and national security expert at the Naval War College in Rhode Island, said the United States has been so determined to maintain military space dominance that it is losing ground in commercial space uses and space exploration. "We're giving up our civilian space leadership, which many of us think will have huge strategic implications," she said. Kaufman, Marc. "U.S. Finds It's Getting Crowded Out There." Washington Post. July 9, 2008.