EXECUTIVE SUMMARY

INTRODUCTION

In 1992, the National Aeronautics and Space Administration (NASA) and the National Science Foundation (NSF) commissioned a panel of U.S. satellite engineers and scientists to study international satellite R&D projects to evaluate the long-term presence of the United States in this industry. The 1992/1993 study covered emerging systems concepts, applications, services and the associated technologies in Europe and Japan. The principal conclusions of that study were that the United States had lost its leading position in several critical communications satellite technologies and that the U.S. business lead in this market was at risk.

NASA and NSF recognized that major changes occurred in the global satellite communications business in the intervening five years, and in 1997 commissioned a new panel to undertake another worldwide study of this industry. This 1997/98 study differs from the one conducted in 1992 by including market, regulatory and policy issues in addition to technology and systems. In contrast to the 1992 study when only sites in Europe and Japan were visited, this study included site visits to many institutions in North America as well as in Europe and Asia. This panel was composed of individuals representing industry, academia and government organizations, half of whom were also on the 1992 panel. The panel either visited or conducted interviews with 61 satellite manufacturers, service providers and R&D laboratories, in 14 countries in North America, Asia and Europe.

This report details the information collected in the site visits, provides supplementary information on communications satellite markets and technology, projects trends, provides a perspective of this increasingly global business, and compares satellite communications activities in other countries to those in the United States. In addition, the report has benefited from review by an independent panel, composed of experts from industry, government and academia.

PRINCIPAL OBSERVATIONS AND CONCLUSIONS

  1. The panel observed that many European and Asian governments are maintaining or increasing their funding of commercial communications satellite R&D. The U.S. government, on the other hand, does not appear to be supporting such R&D at the level that is necessary to continue the leading U.S. market share position in this growing business. The current level of NASA R&D funding in this area is barely adequate to meet the competitive challenge posed by other nations. There is a critical and growing need for new technology in this technology-intensive industry. Continued funding for the long-term R&D programs at NASA, DOD, and NSF is crucial to the continued success of the U.S. commercial satellite communications industry in the next century.

    NASA and Department of Defense (DOD) R&D funding of previous decades played a key role in building the technology base that is the foundation of the current market success of the U.S. satellite communications industry; continued NASA and DOD R&D in this area will be critical to its future success. DOD support for satellite communications R&D (several hundred million dollars per year) does bring considerable benefits to the commercial sector, but is focused on DOD requirements. The character of NASA's R&D program and its benefits to the commercial satellite communications industry differ from the DOD program, particularly with regard to pressing commercial issues such as protocols and standards, which are especially important for the interoperability of the terrestrial and satellite communications networks, spectrum allocation, and the use of satellites in the global information infrastructure (GII). NSF has supported programs at universities that have benefited satellite communications also. This work, especially on high speed materials and devices as well as protocols, needs to continue. The members of this panel are concerned that cutbacks in government support and funding of long-term satellite and high frequency research work may eventually result in the erosion of the dominant position that the United States now enjoys, and in the loss of the benefits this industry brings to the United States in terms of high paying jobs and positive contributions to the balance of trade.

    While U.S. manufacturers are developing short-term, or competitive, technologies, they recognize that longer term work is being neglected. As a result of the panel's investigation into technology and new markets, it has identified several possible candidates for long-term U.S. government supported R&D that will enable U.S. industry to maintain its lead in the development and manufacture of the commercial communications satellites of the future. They include:

  2. The United States is the leader in the manufacture, insertion of new technology, development and finance of new commercial communications satellites, but foreign competition is increasing and this point needs to be addressed for the United States to maintain this lead. Further, the United States has lost its preeminence in the satellite launch service area and this must be viewed with concern. In addition, there is a critical need for lower cost and more reliable launch vehicles.

    Today, the U.S. aerospace industry is strong. Not only have the traditional leaders such as Hughes, Space Systems Loral, and Lockheed Martin grown stronger, but there is new strength coming into the competitive commercial satellite communications sector from Motorola, Boeing/Rockwell, Raytheon and elements of technical and systems strength from Ball and TRW. In addition, numerous other companies, many of them small, play a vital role by supplying components and sub-systems to the industry. U.S. companies lead the global manufacture of large commercial communications satellites. However, the manufacturing base is expanding to other parts of the globe as foreign companies are entering this market by providing the above-mentioned U.S. companies with piece parts and sub-systems. In addition, we are seeing the emergence of a stronger international presence in the manufacture of satellites, with Matra Marconi, Alenia Spazio, Alcatel, Mitsubishi, Toshiba and NEC all competing for this business.

    The strongest evidence of growing foreign participation in the satellite industry is in launch services. Here, the United States is no longer the leader. Approximately half the large commercial satellite launch service business is provided by Arianespace (dominated by the European Union), with the United States a close second, followed by Russia. China and Japan have entered this business, and several new companies are emerging, such as the SeaLaunch international consortium. Countries as well as international consortia will contend for future launch service business. Despite the increased number of new launch service providers, the cost of launches has not decreased appreciably and there is a need for a concerted effort to develop lower cost access to space. In addition, launch failures occur too frequently. This is a concern to the investment community, since these failures add cost to the communications services and uncertainty to the dates of service. More reliable launch services need to be introduced into this industry.

    Finally, we are seeing new and specialized development of satellite communications technologies and systems in space and on the ground in such countries as India, Israel and Korea, which could grow into important elements of the space communications business over the next ten years.

  3. Commercial communications satellite services are rapidly becoming a large and global business, increasing from $11 billion in 1992, to $20 billion in 1996 to our projected figure of $75 billion in 20051.

    The satellite communications service industry has grown more rapidly than was forecast in the 1992/1993 WTEC study. This growth has been a global phenomenon as the economies of the world have improved, requiring increased communications services for both business and consumer markets. The recent large and rapid expansion of business and consumer terrestrial mobile and Internet communications services has opened new opportunities for satellites. Mobile and Internet transport and access businesses, in particular, have stimulated the demand for new multi-satellite constellations to serve this market on both an international and regional scale. Growth in these areas, coupled with the global increase in TV viewership and high data rate transport, has been responsible for the recent and future anticipated growth. There is also new demand for integrated satellite/terrestrial communications that will enable the transport of information seamlessly across these transport media. These large and rapidly growing satellite based business opportunities have attracted the attention of government and industrial interests of many countries, and these nations are making significant investments of new capital to enable them to participate in this growth market. Many countries have allocated funds for satellite R&D projects to ensure their long-term presence in the commercial satellite industry. The expansion of satellites into new applications and the increased global demand for satellite communications services have attracted the attention of the investment community. This has resulted in the formation of new satellite service providers and stimulated mergers and acquisitions, the creation of new companies, the formation of global partnerships and the privatization of formerly public satellite service organizations. The United States in particular leads the way in proposals for new services and new satellites and in the innovative financing of new ventures to provide these services.

  4. New technology is being inserted into commercial satellite communications at an increasingly rapid pace.

    In the past, commercial communications satellite manufacturing and service provider organizations tended to be conservative and to be hesitant about inserting new technology into satellites. This has changed in response to the immediate need to serve customers' burgeoning demand for entertainment programming (TV), mobile communications and access to high bandwidth Internet data. Industry is inserting new technology into satellites at a rapid pace. Recent examples include onboard processing and switching, more efficient solar cells, higher power components, more efficient heat dissipation techniques, electric-based station keeping thrusters, intersatellite links, large antennas, phased array antennas, antennas with numerous spot beams and improved TWTAs. Increasingly, the satellite is no longer being viewed as a simple "bent pipe" but as an important component of a large global communications networking system, requiring interoperability between the satellite and terrestrial components and thus compatible protocols and standards. This integration of satellites into the global network will require the satellite industry to assume large software operations and develop new end-user services.

  5. Aerospace communications companies worldwide are expanding from their traditional role as equipment vendors into the end service provider business. Traditional satellite manufacturers such as Hughes and Loral are in the transponder lease business and Lockheed Martin is in the launch services business. However, these manufacturers are now becoming directly involved in providing end-services to the consumer, which is very much in evidence with DBS, mobile satellite services and Internet access businesses. The most significant change will come with the deployment of $50 to $80 billion worth of new multimedia, high data rate satellites early in the next decade. The new satellites, which will operate at the very high Ka and V-band frequencies, will provide services using very small micro-terminals or ultra-small aperture terminals. Unlike today's VSATs, these small terminals will provide a "universal service" for fixed or mobile customers requiring wide or narrow band services and will connect home and business users at the expected low cost of under $1,000 per terminal, with an objective of less than $250.
  6. Commercial communications satellites are increasingly being used to provide services directly to the end-consumers, creating a potentially large terminal industry.

    In the past, the principal customers for communications satellite services were large communications carriers, PTTs and medium to large sized businesses. This emphasis is changing rapidly into a business that will be dominated by the needs of the end-consumers, individuals located in homes and small businesses, often in competition with established communications and cable TV carriers. As such, the terminals, whether they be handheld units or units with small antennas attached to the home and connected to indoor electronics, will be manufactured in large quantities and cost less. The terminal business, especially the new multimedia, high data rate networks, has the potential to exceed the size of the satellite manufacturing and launch business. Mobile communications, access to Internet data, and television and entertainment programming provided by satellites will drive these satellite based consumer electronics markets.

  7. Satellite manufacturing is attaining maturity and is starting to follow manufacturing procedures that are similar to those used by the automobile industry.

    Satellite manufacturers do use some in-house manufactured components and sub-systems, but they are increasingly becoming dependent on the supply of many items from low cost, highly reliable global suppliers. Satellites are assembled, tested and shipped from facilities that place emphasis on concurrent engineering, computer aided design, quality concepts, expedited materials flow, low cost and rapid delivery time. While U.S. companies continue to dominate the manufacture of communications satellites, other nations are rapidly acquiring the expertise to compete effectively with the United States. In addition, it is now relatively common for companies located all over the globe to apply their expertise, focus on the development, manufacture and delivery of specific components and/or sub-systems and ship them to the satellite manufacturers. These niche players have been quite successful. No longer does a satellite manufacturer make everything, or almost everything that goes into a satellite. The manufacturers now shop around the globe for many of these specialty items. The competitive advantage goes to those companies that can manufacture at lowest cost and demonstrate the highest reliability and the shortest delivery time, all the while maintaining proprietary design concepts and inserting proprietary new technology into their satellites. The industry has matured to the point where companies do their own short-term development, often concurrent with manufacturing. In many instances, they just buy the technology. The manufacture of satellite components and sub-systems is becoming a global business.

    The advent of constellations containing numerous satellites, such as Iridium LLC, Globalstar LP and ICO Global Communications Holdings, has also added a new approach to the manufacture of satellites. These satellites are constructed on assembly lines. The study team saw eight being manufactured at a time at both Motorola (Iridium) and Alenia Spazio (Globalstar) facilities. These satellites contained many off-the-shelf components and sub-assemblies manufactured by other companies. Complete testing tends to be done on a few satellites to verify design concepts, while sample testing is done on the rest of the satellites to assure that the quality control processes are intact. Common buses and design concepts, along with improved manufacturing processes, have reduced the delivery time of large geosynchronous (GEO) satellites to 18 months, or less, a major improvement over the typical three year delivery time of five years ago.

  8. The increased global interest in the use of satellite based communications systems has created a demand for spectrum and orbital slots that exceeds availability. In addition, there is competition for much of this spectrum from terrestrial wireless systems

    A plethora of (apparently) "paper satellites" (a term referring to the filing of claims for spectrum allocation and orbital slots that may never be used) often creates contention between the communications interests of nations and companies, which is not resolved easily. Joint allocation of spectrum with satellite and terrestrial communications systems also creates interference problems that are not easily resolved. While the Federal Communications Commission (FCC), World Radio Communications Conference (WRC) and the International Telecommunications Union (ITU) have sought to settle many of these issues and disputes, it is expected that these problems will get progressively worse as the demand for space communications services increases. New procedures to resolve these issues need to be developed.

  9. Future development of commercial satellite communications appears to hinge on key regulatory, trade, spectrum, and inter-operability and standards issues as much as new technology development--and here government leadership and initiative will be the key.

    The opening up of world trade in telecommunications services will affect the satellite communications industry in many important ways. New competitors and new trade entrants are as likely as not to use wireless and satellite systems to accomplish their goals. Despite gains under the new World Trade Organization's General Agreement on Telecommunications Services there are still some difficulties in achieving direct satellite access to global markets. In the area of spectrum, new ways of allocating frequencies over broader multi-purpose service categories and new techniques to mitigate interference with both other satellites and with terrestrial service facilities need to be developed and then agreed to globally. Perhaps most critical is the need for inter-operability standards to seamlessly connect new satellites with terrestrial networks for public telephony, wide-band services and many forms of Internet access and commercial systems. In all of these areas, governmental initiative will be needed since commercial action alone cannot forge urgently needed new global agreements. The commercial use of the U.S. military controlled Global Positioning System (GPS) is an issue that needs to be resolved, especially in Europe where there is concern that military priorities will conflict with critical commercial applications.

  10. Opportunities for international cooperation can facilitate the global development of new satellite technologies, systems and standards.

    The highly competitive nature of the global satellite communications industry often makes international cooperation in the development of key technologies difficult. Nevertheless, there are opportunities for international cooperation, especially in the form of demonstrations of satellite services. An active international program to make satellite communications a vital part of the global information infrastructure is an area where such cooperation would be beneficial to the industry. Global demonstrations of broadband state-of-the-art digital applications for health, education, museums, entertainment, trade and business services, emergency recovery, and Internet based networking are some of the examples which can be vehicles for the development and agreement of interoperability standards and frequency allocations. In addition, such international demonstrations can be useful tools to stimulate the development of new equipment and new satellite services.

  11. There is considerable R&D work being done around the world on the understanding and development of protocols and standards to ensure the seamless interoperability of satellite and terrestrial communications transport facilities.

    The global network of the future will include terrestrial wireline and wireless facilities as well as satellites. Thus it is important that all these facilities be capable of operating together to provide the services that the customers expect. To achieve such a single global network, it is imperative that there be common protocols and standards, to avoid having a communications system composed of fragmented parts, each with its own protocols and proprietary standards. Since many of the protocols and standards currently in use were introduced for terrestrial communications, it has become necessary for the satellite service providers to work in this area to ensure their interoperability with the terrestrial network, especially for high bit rate applications. TCP/IP, the Internet protocol, and ATM, the current transport protocol of choice for multimedia transport, are receiving considerable attention by R&D institutions throughout Europe, Asia, the United States and Canada. This is driven in part by interest in developing a global information infrastructure (GII) offering high bandwidth services around the world. While considerable more R&D on this subject is needed, early experimental results of high bandwidth ATM and TCP/IP over properly conditioned satellite links have been successful.

BACKGROUND

The observations and conclusions presented in this report are quite different from those of the previous study. At that time, it was thought that the U.S. satellite communications industry had lost its leading position in several critical satellite technologies and that its leading market position was at risk. This has not happened. While there is no doubt that European and Japanese companies have become more active in the global satellite business, the United States continues to be the dominant source of large communications satellites and leads in the introduction of new services in a rapidly growing market. In the short five years between these studies, new markets have infused vitality into this business. The strong U.S. financial environment is an important factor in the establishment of this business position. While new technology certainly is important, market factors are driving the business. However, technology continues to be very important and has to be considered as an important factor in enabling U.S. industry to be so dominant in the manufacture of communications satellites. New technology, based on R&D programs of past years, is being inserted into satellites at an unprecedented pace. In addition, technology that has been developed by U.S. firms for terrestrial communications systems is being applied to satellite systems. The panel is concerned that the present leadership position of the U.S. satellite industry, which is greatly influenced by three decades of far- sighted investment in R&D programs by government agencies, is in jeopardy due to inadequate funding of long-term R&D. This inherently technology-intensive industry is dependent on long-term R&D for its future vitality.

The past five years have been exciting ones for worldwide communications, including the commercial communications satellite industry. This excitement has been fueled by the rapid growth in personal mobile wireless communications, the explosive growth of the Internet, the need for high data rate communications and the global growth in television viewing. In addition, the improved global economy and the increase in wealth of previously weak countries have created a demand for an expanded global communications infrastructure. The industry has experienced numerous legislative and regulatory changes, a host of mergers, acquisitions, and corporate realignments, and the privatization of government-dominated terrestrial and satellite service carriers. We have seen marked growth in many indicators of the health of the global satellite communications industry in the last five years, including:

Satellite based communications is by far the largest commercial application of space and is growing at an impressive pace. It is attracting the attention of the world's financial institutions, entrepreneurs and nations around the world that are looking to expand their global markets. The United States needs to continue its active role in the support of these markets. Table ES.1 provides a breakdown of this business by service categories.

Table ES.1
Profile of Satellite Systems by Service Category

Service

Service Description

1992

1996

Projected 2005

FSS

Conventional

$10 billion

$14 billion

$29.5 billion

Broadcast

DTH, DBS

$0.5

$3

$17

Multimedia, broadband

Internet access, multicast...

-

-

$13

Mobile

Maritime, aero, global & regional

$0.8

$2.5

$12.5

Other

Store/forward/paging/DARS

$0.1

$0.2

$2.5

Total services

 

$11.4

$19.7

$74.5

SCOPE

Technology Focus

The primary focus of the 1992 study was on R&D for future commercial satellites. This was appropriate at that time. New services that were dependent on new technology were introduced only when the R&D was well advanced and the technology was proven to be reliable, preferably with flight experience. Under those circumstances, it was much easier to predict the evolution of satellite technology and thus the availability of new services based on this technology. Markets, more than ever before, now drive this business. The approach to technology has changed considerably since the 1992 report. Under the driving force of market demands, new technologies are being inserted into satellites and new technologies are being developed or adapted for specific markets, often concurrently with manufacturing, at an unprecedented rate. Long-term work has not been neglected, especially in Japan and Europe, where there is an emphasis on the use of experimental satellites to test out technology and new service concepts. In addition, there is an increased emphasis on the improvement of manufacturing processes. While the primary focus of this panel's site visits was on the benchmarking of technology compared to what exists in the United States, the scope of this study was broadened to include both short- and long-term technology research and development, systems research including software, manufacturing technology, and terminal technology. Also included is material on markets and launch technology.

Market Focus

This report has a much greater emphasis on market drivers and market trends than did the 1992 report. The exciting growth of the satellite based communications industry is being driven by market forces and not by technology. Technology, on the other hand, is viewed as an enabler. As a whole these market forces are a direct consequence of the growth of terrestrial communications, with satellites covering those applications that utilize their strengths, namely providing identical information to many customers at a time, transporting thin route traffic, and serving both fixed and mobile customers anywhere on the globe. This report covers those market factors that have led to the increased use of commercial communications satellites. In addition, it covers the dynamics of an industry that is characterized by new start-ups, consolidations and mergers, creative financing, the role of banking institutions, and the formation of international partnerships.

Regulatory and Legislative Focus

The increased demand for orbital slots and spectrum and the need to acquire spectrum on a worldwide basis rather than just nationwide, have created an increased focus on the importance of regulatory issues in our study and such issues are covered in this report. The privatization of many of the markets and related legislative action have also had an impact on the industry, which is also part of the report.

Global Focus

This report has a global focus. Since an important objective of this study was to benchmark global technology and markets compared to the United States, we visited numerous institutions all over the world, albeit selectively. We visited sites in North America, Europe and Asia and interviewed representatives from South America, Africa, and Israel.

Limitations

As is the case of the 1992 report, the present study focused on commercial communications satellite technology and markets and did not attempt to review military and defense satellite technology, either classified or unclassified, in the United States or elsewhere. U.S. military spending on satellites is currently $8 billion per year, and development work is estimated at several hundred million dollars annually, of which a small portion is for R&D applicable to future commercial communications satellites. This is more than the NASA spending devoted to communications satellite R&D, but hardly enough to support a growing technology-dependent business in the United States. This study did not cover important commercial space applications such as weather reporting and forecasting, surveillance and image capture. Also, no attempt was made to cover commercial GPS technology, which is experiencing widespread use for navigation, mapping, surveying and position determination. All site hosts were provided with the opportunity to comment on the draft reports to make factual corrections and to eliminate any material that contained proprietary information.

PERSPECTIVE ON THE INDUSTRY

The fortieth anniversary of the launch of Sputnik was observed while this panel was in the midst of its activities. Satellites have come a long way since then. So has the general area of communications technology, which has been transformed from analog to digital. In the past few years, we have seen impressive growth in wireless communications for mobile voice, data, and paging. This has not gone unnoticed by the satellite business community. Satellites are ideally suited to provide mobile communications. Several new systems have been proposed to provide this service to customers located over the entire globe. The systems depart from the traditional GEO located satellites by including numerous satellites in a constellation located at LEO or MEO, often with on-board processing, switching and even intersatellite links. These systems are linked into the terrestrial communications network, requiring the establishment of innovative local partnering and financial relationships that make these constellations truly global. Table ES.2 lists the characteristics of the constellations of the principal, large, mobile satellite service providers. Not included in this table are the regional GEO satellites that will provide mobile services.

Table ES.2
Proposed New Global Satellite PCS Systems

Parameter

Iridium

Globalstar

ICO-Global

Ellipso

ECCO

No. of active satellites

66+6 spare

48

10 +2 spare

14 + 3 spare

11 + 1 spare

No. of satellites per orbit plane

11

8

5

2 inclined and 1 equatorial

1 (initially)

No. of orbit planes

6

6

2

4 and 6

11

Orbit altitude (km)

750

1,414

10,355

N.A.

8,040 equatorial

2,000

Orbit inclination

86.5

52

45

116.5°

0

Number of spot beams/satellite

48

16

163

61

32

Reported cost ($ billion)

4.7

2.5

4.6

0.91

1.15

The explosive growth of Internet traffic may have a profound impact on the future use of satellites. Satellites are now transporting this traffic and there is every indication that "you ain't seen nothing yet." The satellite industry has responded to this new market by proposing new systems designed specifically for the end customers. As in the case of satellite mobile communications systems, most of these systems involve multi-satellite constellations. Their seamless connectivity with the terrestrially dominated Internet requires new approaches to standards and protocols, which are discussed in chapter 4 of this report. These systems propose to operate at Ku, Ka, V and the mm-wave bands to meet the burgeoning demand for new spectrum and the high bandwidth required to provide these Internet services. Also under consideration is the use of optical links for space to earth and earth to space communications. Table ES.3 lists some of the new Ka-band systems that have been proposed to serve this Internet access market.

Both mobile and high data rate communications satellites have terrestrial competitors. The cellular industry is expanding rapidly all over the globe. Iridium will initiate service in the fourth quarter of 1998, Globalstar in 1999 and ICO in 2000.2 It will be interesting to follow their penetration into the mobile market. In the case of Internet access, several high data rate technologies are vying for this market, including xDSL, cable modems, wireless cable (TV), LMDS, MMDS, DEMS, and HALE platforms, in addition to satellites. To be successful it is important for satellite service providers to move rapidly to take advantage of a window of opportunity that may last for just a few years. If they do not, the terrestrial services will become so entrenched that it will be a challenge to acquire customers. In the event that the satellite systems do not provide broadband service in the next few years, a major question is, can these satellites services make an effective business by serving those customers that do not have ready access to the terrestrial Internet communications infrastructure? Hughes, with its DirecPC, is already in the high data rate Internet access market, with others to follow shortly.

Table ES.3
U.S. Licensed Ka-band Global Satellite Communications Systems

Company

System

Orbit

Coverage

No. of Satellites

Satellite Capacity (Gbps)

Intersatellite Link

Onboard Switching

Capital Investment ($ billion)

Lockheed Martin

Astrolink

GEO

Global

9

7.7

1 Gbps

FPS

4

Loral

Cyberstar

GEO

Limited Global

3

4.9

1 Gbps

BBS

1.05

Hughes

Galaxy/ Spaceway

GEO

Global

20

4.4

1 Gbps

BBS

5.1

GE Americom

GE*Star

GEO

Limited Global

9

4.7

None

BBS

4.0

Morning Star

Morning Star

GEO

Limited Global

4

0.5

None

None

0.82

Teledesic

Teledesic

LEO

Global

840*

13.3*

1 Gbps*

FPS*

9*


* Original design numbers

Several proposals have been made to use High Altitude (~12 miles) Long Endurance (HALE) platforms to provide communications services. The allocation of spectrum for their use further complicates the already high demand for frequencies and the potential interference with terrestrial radio communications.

Multicasting is an Internet based terrestrial service that is growing rapidly. It is a business that is a natural for satellites. It features the simultaneous transfer of identical information, such as stock quotations, electronic newspapers and magazines, etc., to many customers at a time; a strong point of satellites. However, a return link is required to enable the customers to obtain additional information or even to place orders to purchase advertised products. The terrestrial Internet network is not ideally suited to provide numerous customers with identical information, but new distribution algorithms are being developed to solve this problem. The DBS industry, with its established distribution and service channels to the customers with small antennas, is well positioned to enter this market.

As is the case with many services based on new technologies, the establishment of effective distribution channels is a major challenge to these satellite service providers, especially for those serving the end-consumer.

TECHNOLOGY TRENDS

Most of the time during the WTEC panel's site visits was devoted to discussions and demonstrations of new technology and visits to manufacturing facilities. Not surprisingly, there was a general consensus among the hosts and WTEC panelists on the technology that was needed for the successful application of satellites to the new markets. To meet these needs, there is a general willingness to insert new technologies onto satellites without the need for numerous test flights. This is a marked departure from past approaches to the insertion of new technology into commercial satellites.

The manufacture of satellites has also changed considerably in the past few years. Increasing competitiveness together with an increased number of viable competitive manufacturers has placed a greater emphasis on cost containment and a resultant focus on the improvement of manufacturing facilities and processes. Typically, parts and sub-systems are obtained from low cost, reliable sources and assembled and tested in modern facilities, much like the model for manufacturing by the automobile industry. The use of CAD, quality processes, material flow procedures, concurrent engineering, common buses, and new assembly and testing techniques is being emphasized. The successful manufacturers combine proprietary technology, sound design, manufacture and test practices to achieve low costs and short delivery times. Delivery times for large GEO satellites have been reduced to 18 months by using common buses and improved manufacturing processes. Most impressive are the changes that have occurred as a result of the assembly line-like manufacture of the multi-satellite constellations of Iridium, Globalstar, ICO, and Teledesic. At both Motorola (Iridium) and Alenia (Globalstar) the WTEC panelists observed eight satellites being manufactured at a time on assembly lines that were organized for large production capacity (for satellites), with emphasis on short delivery times and improved reproducibility.

New technology for GEO located satellites is driven by the need to increase on-board power to serve the consumer market. High power enables the end user to use small, low cost ground terminals. The emphasis is on the achievement of higher power without increasing weight and cost. High power, more efficient TWTAs are replacing SSPAs at C-band for many applications. Epitaxial GaAs/Ge solar cells, with efficiencies of >20%, are replacing Si cells, followed by cascade cells, composed of layers of different III-V compound materials, with efficiencies that promise to approach 35%. Innovative, large area solar cell arrays that look like pleated window shades or even blankets are being developed. Deployable heat radiators are being developed also. Progress in new batteries has been slow, with the high pressure nickel-hydrogen batteries continuing to be the preferred source of DC power. Work is being done to increase the number of charge/deep discharge cycles for the Li-ion battery system, but this work is progressing slowly. Shaped reflector antennas are in common use and have resulted in the elimination of considerable heavy microwave hardware. Electric ion propulsion engines for station keeping are in use, and considerable work is being done to improve their efficiency. Large, 12 meter antennas are being put onto regional mobile communications satellites.

The use of on-board processing and switching, as in the case of Iridium and many of the Internet access satellites, is the biggest step in the insertion of new technologies onto satellites. These satellites will be mini switchboards in the sky, supported by millions of lines of real-time software onboard the satellite and on the ground, a new phenomenon for satellites. The high data rate satellites face the challenge of being part of a large global system that is dominated by terrestrial technology. At these high data rates, latency sensitive protocols must be modified, or new ones developed, to obtain seamless interoperability with the terrestrial network. Intersatellite links are being used as well. The WTEC study team saw considerable work on optical intersatellite links (ISL), with the goal to increase the useable bandwidth of these links. The team also saw work on the development of high temperature superconducting devices, especially for the eventual manufacture of more highly selective filters.

The advent of end-consumer satellite services is a boon and a challenge to the terminal manufacturers. Low cost is the key factor in the acceptance of many of these services. Lightweight handheld mobile phones and pagers are essential. Low cost, two way, phased array, small size terminals are needed to serve the high data rate markets. DARS (Digital Audio Radio Services), a satellite based service, will also benefit from phased array antennas. While manufacture in great numbers is the critical step in the achievement of low costs, there is a need for new technologies also. Some candidates are single chip, high frequency integrated circuits, which appear to be a possibility with the recent advances in the use of Si/Ge alloys on silicon integrated circuits; phased array antenna components; Ka-band components, especially SSPAs; sharp filters; and software based multiple protocol terminals.

CONCERNS

While the U.S. position in the satellite business is quite impressive, there are concerns about its ability to maintain this lead.

R&D: The members of this panel are concerned that weak funding of long-term communications satellite R&D programs by government agencies, notably NASA and DOD, may result in the eventual erosion of the leading market position that U.S. industry now possesses. Just as the United States has lost its leading position in the commercial satellite launch industry as a result of poor support for new launch technology, vehicles and facilities, it is presently at risk of losing the lead in satellite manufacturing to other countries that are now making significant investments in long-term R&D in satellites and satellite services, as well as in modern satellite manufacturing facilities. The WTEC panelists were especially impressed by the long-term outlook of the government R&D programs in Europe and Asia. Clearly, the purpose of this generous R&D support is to capture an increasing share of future satellite business.

The continued leadership of U.S. industry in the global competition for the export of products and services in the "Information Age" is critically dependent on the R&D of today. Employment and national security are dependent on a vibrant communications industry, of which satellites are a part. The U.S. satellite manufacturing industry has demonstrated its ability to invest in new manufacturing facilities and do the short-term development that is necessary to be competitive, but present short-term developments are dependent on past long-term R&D programs that have been supported by NASA and DOD. Continued and even enhanced government R&D funding in the future will enable the United States to maintain its lead in this industry, even in the face of the increased competition from abroad that is likely in the coming years. Some of the long-term R&D topics that are appropriate for U.S. government R&D support are listed earlier in this Executive Summary.

Figure ES.1 reflects the relative spending of some of the leading space agencies around the world compared to their gross domestic product. The United States outspends the rest of the world on an absolute and a per GDP basis. When it comes to space telecommunications research and development, however, NASA's space policy is dramatically different from that of other countries. In general terms the governments of India, China, Korea and Canada spend some 14% to 25% of overall space-related funds for space telecommunications. Japan, France, and ESA spend between 8% to 12% of space funds in satellite telecommunications development and demonstrations, but NASA spends a fraction of 1% of its total budget on satellite communications research. Thus, while most of the rest of the space agencies of the world place a high priority on the largest and the most rapidly growing space industry because of its perceived economic, social and cultural importance, NASA activity in this area has all but disappeared. If, indeed, space telecommunications is to be a key part of the emerging global information infrastructure, this strategic approach by NASA seems to contain elements of risk. Finally, to complete the U.S. picture, the Department of Defense maintains an $8 billion-a-year satellite communications program, including several hundred million for satellite development (a small portion of which is commercially relevant). The great disparity in research spending between NASA and DOD seems to reflect the overall lack of national priorities in space communications as well as a lack of balance.

Protocols and Standards: Satellites are increasingly being used as part of a large global communications system composed of terrestrial, wireless and satellite facilities. To accomplish a true GII that serves all parts of the globe, from urban to rural, from business to homes and from affluent to underdeveloped nations, it is necessary that these transport facilities work seamlessly together. The terrestrial network is changing from a circuit-switched to an IP-centric operation. To be an important factor in the network of the future, the satellite business must recognize these changes and develop and embrace new and improved protocols and standards. The members of this panel believe that U.S. government agencies, such as NASA and NSF, should provide leadership to support and coordinate a strong and effective effort to accomplish this end. Satellites, with their ability to directly reach people all over the globe, especially in underdeveloped regions, should play an important role in this GII initiative.


Fig. ES.1. A comparison of the percentage of the GDP devoted to National Space Budgets. 3, 4, 5

Trained Engineer Shortage: The shortage of engineers with skills that can be applied to the design of satellites and satellite based communications systems is also of concern.

Satellite Organizations: The 1992 study recommended the formation of organizations that could serve the satellite community interests. This has begun with the formation of the Satellite Industry Alliance and the Satellite Division of the TIA (Telecommunications Industry Association), as well as the Space Technology Alliance, which coordinates related activities by various U.S. government agencies.6 The impact of these organizations has started to benefit the industry, but greater participation by industry and government is required to ensure their long-term effectiveness.

Spectrum: There are many issues associated with spectrum use and allocation that need attention. The processes for addressing these global issues need improvement.

Launch Services and Facilities: Traditionally, the United States has led the world in the launch of commercial satellites. This is no longer true. The lead has been assumed by the European Arianespace organization, driven by ESA funding for development of new rockets and the establishment of modern satellite preparation and launch facilities in Kourou, French Guiana. Russia and China have become major suppliers of commercial launch services in the past few years. The U.S. position will continue to erode unless changes are made, especially in the modernization of the procedures and commercial facilities located at Cape Canaveral and Vandenberg Air Force Base. In addition, the United States has an opportunity to recover its leading position in the launch industry by developing lower cost and more reliable launch services.

REFERENCES

Satellite Industry Task Force. Dec. 1997. Executive Summary to Satellite Alliance USA.

PANEL COMPOSITION

Dr. Joseph Pelton (Chair), Research Professor, Institute for Applied Space Research, George Washington University; Professor of Telecommunications, University of Colorado at Boulder; and College of Teachers, International Space University, Washington, DC

Dr. Alfred Mac Rae (Chair), President, Mac Rae Technologies, Berkeley Heights, NJ, and retired Director of Satellite Communications, AT&T Bell Laboratories

Dr. Kul Bhasin, Chief, Satellite Networks and Architectures Branch, NASA Lewis Research Center, Cleveland, OH

Dr. Charles Bostian, Director, Center for Wireless Telecommunications, Virginia Tech, Blacksburg, VA

Mr. William Brandon, Principal Engineer, the MITRE Corporation, Bedford, MA

Dr. John Evans, Vice President and Chief Technical Officer, COMSAT Corp., Bethesda, MD

Mr. Neil Helm, Deputy Director, Institute for Applied Space Research, George Washington University, Washington, DC

Dr. Christoph Mahle, Communications Satellite Consultant, former Vice President of the Satellite Systems and Technologies Division, COMSAT Laboratories, Washington DC

Dr. Stephen Townes, Deputy Manager, Communications Systems and Research Section, Jet Propulsion Laboratory, Pasadena, CA


1 These figures are satellite-related revenues for telecommunications and include estimated "retail sales" where possible.

2 Based on company announcements. Press accounts differ slightly.

3 Source: J. N. Pelton, NASDA white paper, 1998.

4 The ESA data includes contributions of the 14 member nations to ESA plus their own space budgets, divided by the sum of the GDP of these nations.

5 Data does not include defense related space activities.

6 The Satellite Industry Alliance was organized through the impetus of the Satellite Industry Task Force and formulated a vision statement and an outline of goals and objectives. The SIA had as its objectives the following points: (1) realizing the potential of satellite communications as an integral part of the global information infrastructure, (2) enhancing the international competitiveness and resulting market share of the U.S. satellite industry through technology and innovation, (3) reducing the costs of communication by increasing government reliance on domestic commercial satellite industry capabilities, (4) establishing a focal point for interaction conducive to the development of a national strategic focus for satellite technology, (5) maintaining a strong, national R&T base through the cross fertilization of R&D expenditures (Satellite Industry Task Force). The members of this panel believe that such an organization could have a positive impact, and that efforts to restart it should be pursued.


Published: December 1998; WTEC Hyper-Librarian