KEY DRIVERS FOR THE FUTURE

Clearly satellite communications has a bright future. This is due not only to exciting new technologies but also because of satellites' ability to provide broad coverage, mobile services, and services direct to the consumer. They can also supply cost-effective broadcasting services, together with the ability to provide instantaneous re-deployment of capacity, instantly provide communications infrastructure, and avoid costly, time-consuming trenching operations, and provide overall flexibility and reliability.

The next ten years are a critical window of opportunity for satellites with respect to countries with developed economies and perhaps twenty or more years for developing and industrializing countries with more limited terrestrial communications infrastructure. The following would seem to be key guideposts to the future:

1. whether the global shift to fully competitive telecommunications markets continues
2. whether new global trade agreements under the WTO are strenuously enforced and whether serious barriers to new satellite services continue to be encountered around the world
3. whether critical new technologies in optical communications, high power generation and storage systems, on-board processing systems, advanced antenna technologies and lower cost launch systems evolve and whether these evolve in the United States or in other parts of the world
4. whether there is continuing global consolidation, merger and partnerships both in the spacecraft design and manufacture industries, and in the satellite communications service delivery industries, and how fast this takes place
5. whether INTELSAT, Inmarsat, and EUTELSAT and/or their subsidiary spin-off organizations are able to adapt to fully competitive markets and whether the parent organizations are "privatized," and become truly competitors without special protection under intergovernmental agreements
6. whether effective standards to support global hybrid wire, terrestrial wireless and satellite seamless interconnection can be developed in a timely way and whether the ITU proves to be the effective body to provide needed protocols and standards in a timely way
7. whether new broadband, multimedia services and applications will expand modestly, moderately or explosively over the next five years and whether dramatically different patterns of telecommunications will evolve around the world

Current filings for future satellite systems, planned and newly operational systems are premised on explosive growth for new high data rate services and surging consumer demand. Optimistic projections of service demand now translate into huge new multi-billion dollar satellite systems which are typically too expensive to be entirely capitalized by even very large and established commercial organizations. This has led to a dizzying array of new alliances, partnerships and global coalitions.

There is thus much uncertainty as to the nature, direction and speed of change for the satellite industry. Even so, prudent steps toward the future are indicated despite the uncertainties. Such steps include the following:

1. Recognize the special synergy and relationships that exist within the commercial and defense communities in telecommunications and satellites. Much of the current surge in satellite communications technologies and systems can be traced to strategic defense developments and NASA ACTS technologies. In Europe, projects such as STENTOR stem in part from being able to have direct military involvement by the French DGA. Japan's proportionately higher funding of experimental satellite communications in part derives from being able to apply resources not spent on military programs. Basic and fundamental research in such areas as high frequency materials and devices, and solar cell technologies, from the U.S. perspective, will be severely eroded by decreased military spending. Somehow this gap in basic research support needs to be filled and quickly so.
2. U.S. government focus on key satcom pre-competitive technologies. The experience of ESA in Europe should be instructive to NASA. Industry and national governments in Europe have tended to lessen support for ESA R&D in the satellite communications field. The reasons given include: (a) slowness in implementation; (b) high overhead; (c) separation of military and civilian research activities; (d) lack of longer range vision in developing truly pre-competitive technologies; and (e) national industrial interests. In Japan and Korea support for research by CRL, MITI and others seems to have been strong; the MPT Vision 21 strategic plan provides clear, long-range goals and enjoys industry support. NASA could likely benefit from examining in more detail the strengths and weaknesses of governmental satcom R&D in these other regions. Clear long-term goals for critical but pre-competitive technologies would seem to a step in the right direction.
3. International cooperative projects. At the many international sites this panel visited, the subject of international cooperative projects and R&D partnerships was explored. There was a natural desire expressed to make limited research funds go further. It was rather broadly noted that the current highly competitive commercial satellite communications environment limits opportunities. The possibility of the United States joining Japan's OICETS or Europe's SILEX experiments was highlighted several times. It was also noted that developing, demonstrating and standardizing space based broadband applications for the Global Information Infrastructure under the G7 Information Society framework (a spin-off of the 1992 study) was not only successful to date, but should be further strengthened and more prominently backed if at all possible. Developing and demonstrating new applications, in short, was considered much easier to accomplish through international cooperation than developing new technologies having competitive implications.
4. Key new policy, regulatory, standards and trade initiatives. Action in these arenas may be more important than new technology. Some countries want multi-million dollar payments for landing rights for new satellite systems and wish to charge annual licensing fees for consumer terminals ranging from $1,000 to $10,000 per terminal. The viability of the new global land mobile satellite systems may actually hinge on such issues, more than on their technical design. Tariff and non-tariff barriers to satellite communications services and ground terminal licensing still exist. The new World Trade Organization Agreement on Trade in Telecommunications Services, as largely agreed by over 70 countries as of May 1998, is still subject to many loop-holes and has many weaknesses in enforcement provisions. ITU and regional standards-making groups, such as ANSI and the TIA in the United States, the TTT of Japan and ETSI of Europe, have yet to develop truly seamless standards that allow interconnection of terrestrial wire, wireless and satellite systems. These, and similar issues noted in the earlier section on this subject, are substantial barriers to the global development of 21st century satellite networks-much more so than technological challenges.
5. Institutional and financial challenges. The structured world of telecommunications monopolies and the global unity of universal international organizations such as INTELSAT, Inmarsat, etc., has clearly passed away in the wake of competitive systems. Further, the digital revolution of telecommunications, information systems and entertainment industries has reshaped global markets. To bring order to the currently rather chaotic environment will not be easy. There are no simple answers to such issues as "paper satellites," competitive standards initiatives, competing practices of global financial syndicates, and "random use" of frequencies for other than assigned services. Policy makers this panel surveyed indicated varying kinds of support for reform, such as stricter provisions related to the filing of "paper satellites," for multi-purpose frequency allocations, streamlined procedures for standards-making, and exacting standards for fund-raising and disclosures of conflicts of interests in capital financing. In large measure the ITU itself has lost a good deal of power and influence to regional organizations such as ETSI, and is really not in a position to undertake meaningful world-wide strategic planning exercises in today's competitive commercial environment.
6. Education for the future of the satellite communications industry. Today, consolidation is still going on (i.e., Lockheed Martin, Boeing, Matra Marconi, etc.). The resulting down-sizing and streamlining are reducing somewhat the workforce in aerospace and satellite communications. In the relative near term, it appears likely that there will be a shortage of qualified personnel in areas related to spacecraft design and manufacture, ground segment manufacture, and terrestrial/wireless interface and standards. Further, there are only a very few university level programs and professional training groups supporting the field of satellite telecommunications. Several organizations in the United States and Europe have indicated concern that future training needs, including in-service training for employees, will be a growing problem over the next ten years (Even Thailand has recently projected an anticipated deficit of 7000 telecommunications engineers per annum as of the year 2000.)
7. Launch systems. Major gains have been achieved in satellite platforms, as well as ground systems over the last five to ten years, but the high cost of placing spacecraft in orbit has been remarkably static and remains the single largest cost driver for satellite systems. One of the key critical success factors for the satellite industry is in getting substantial reductions in the cost of putting LEO, MEO and GEO satellites into orbit without sacrificing in launch reliability. Marginal gains in cost efficiency of 10% to 16% are not enough to make a difference. Particularly for LEO systems, major strides forward are needed.