Magazine article Foreign Policy in Focus

The Space Industry: Supporting U.S. Supremacy

Magazine article Foreign Policy in Focus

The Space Industry: Supporting U.S. Supremacy

Article excerpt

The mid-1990s were heady years for the commercial space industry. Space buffs had been promoting the privatization of space applications for some time, so the satellite industry could lessen if not sever its ties to the military. When manned planetary exploration fell victim to spiraling cost overruns, advocates of space privatization looked to the proliferation of satellites in near-earth space, particularly to personal communication technology. Just as investors in the 1990s considered anything Internet-related as an instant gold mine, space advocates viewed the success of small low-earth-orbit (LEO) communication satellites as a litmus test for the commercialization of space.

On the balance sheet, this strategy appeared to pay off. The commercial satellite industry posted double-digit growth trends to yield an industry aggregate in 2001 of $97.7 billion in revenues worldwide. This total includes $42 billion in satellite services, $17 billion in satellite manufacturing, $18 billion in ground stations, and $9 billion in launch services and vehicle manufacturing.

These numbers do not convey, however, the crisis in the satellite industry. Several recent disasters, including the simultaneous loss of 12 Globalstar satellites in Kazakhstan, have rocked investor confidence. Cost overruns imperil key projects. In perhaps the most significant blow, the telecommunications industry pulled the rug out from under the commercial satellite industry by turning to cellular networks based on the ground rather than in space. Throughout most of the 1990s, the average number of satellite launches per year was 90, but in 2001 the number shrunk to 60, of which only 15 were true commercial satellite launches.

Because of these problems, the commercial industry remains dependent on the military for technology and capital infusions. LEO networks have depended on technology developed by the National Reconnaissance Office (NRO); without technology transfers and handouts from the military, networks like Iridium never would have made it past the design stage. With the help of the military, the space industry in the U.S. remains the strongest in the world. There are some competitors. The European Space Agency (ESA) is still sending up Ariane satellites from the Kourou launch facility in French Guiana. The European Union (EU) still supports the Galileo navigation network, despite intense U.S. pressure to cancel the program. And China is on the verge of introducing an ambitious manned-mission and satellite program. …

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