Commercial satellite firms see uncertainty in defense market.

• Author: Erwin, Sandra I.
• Position: Industry News

The wars of the past decade fueled a demand for satellite communications services from the commercial industry, as the military's own spacecraft could not keep up with commanders' gargantuan needs.

Business has fallen off sharply. At the height of the war, commercial suppliers filled nearly half of the military's band-width demand. Today, 24 percent of the Defense Department's satellite communications needs are met by commercial providers.

As they consider their future in the military market, satellite operators are watching an upcoming Pentagon review of satcom requirements over the coming decade. Industry executives said they are confident that the review will lead to more deliberate policies to encourage the use of commercial services, although it could take years to change current practices.

A major concern in the industry is that growing fears of cyber attacks and hostile attempts to disrupt U.S. satellites will motivate the Pentagon to build more military spacecraft rather than use commercial services. The commercial satcom industry for years has argued that this would be a wasteful approach, as commercial satellites are equipped with advanced encryption technology and can do the job at less cost. Conversely, a decision to increase dedicated military satcom would benefit companies like Lockheed Martin, Northrop Grumman and Boeing that produce multibillion-dollar military spacecraft.

The U.S. Air Force is expected to launch a study this fall on future satcom requirements. Known as the "wideband communications services analysis of alternatives," the review will look at future demand but also will dig deeply into security and how best to ensure systems are safe. The AOA will focus on "assured communications when operating in a contested environment by enhancing the protection of both space and ground segments against the current and emerging threats to our space systems," Air Force spokeswoman Capt. Annemarie Annicelli said in a statement. The Air Force will seek advice from a broad range of experts, including commercial suppliers and international partners.

The Air Force oversees much of the Defense Department's space programs. For satellite communications, it draws from a mix of military satellites, the multinational Air Force-operated wide-band global sat-com known as WGS, and short-term service contracts with commercial providers. The Air Force Space Command operates the government-owned constellations and provides military satcom...