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Satellite Communications 

Commercial Satellite Firms See Uncertainty in Defense Market 

11  2,016 

By Sandra I. Erwin 

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 bandwidth 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 wideband 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 services to combatant commands around the world. Separately, the Defense Information Systems Agency oversees commercial satcom leases.

Commercial operators have a lot riding on the outcome of the AOA. For years they have called on the Defense Information Systems Agency to change its approach from short-term agreements to long-term deals in order to incentivize private-sector investment and negotiate better prices. The procurement methods for commercial satcom have been a sore issue for the industry, and executives have grown impatient.

“What we’d like to see is commercial built into the plan from day one, not as an afterthought when we need more bandwidth,” said Rick Lober, vice president and general manager of satcom provider Hughes Defense and Intelligence Systems. “We want a long-term commitment, instead of having the government buy a transponder for three months.”

The AOA presumably will shape future decisions on whether the Pentagon should buy more WGS satellites. The expectation is that more communications capacity will be needed over the next 20 years as the military increases its use of big-data systems and requires large pipes to send data around the globe. An information-centric military that also wants to work with allies needs flexible systems like those offered in the commercial industry, Lober said. “The military doesn’t want closed systems. They want interoperability. They want the cell phone model: Take a phone anywhere in the world and connect.”

Commercial operators now worry that their military business is at risk because their systems are said to be less secure than government-owned networks.

“I believe all military users prefer to use milsatcom, including WGS, for their missions — it’s almost like a security blanket,” said Philip Harlow, president and COO of XTAR, a commercial services provider. “We understand that approach,” he said. “They should look first to their own systems for any mission. If they have the capacity to support a mission on their own satellites, why would they pay for commercial bandwidth?” But when the military runs out of bandwidth and needs commercial support, “I believe we deliver advanced, highly effective service at a modest cost.”

Defense officials have learned in the last few years that commercial satellites have “very advanced and efficient technology that the department can access now, and not wait until new military programs get in place,” said Harlow. However, “a desire to employ these technological efficiencies does not often translate into procurement practice,” he added. “Procurement staff are incentivized to reduce costs as much as possible, and decision-makers on one end of that equation are not the same people who are buying the bandwidth.”

The security of satellite communications systems has been a central focus of congressional committees. Lawmakers two years ago directed the National Research Council to investigate the matter. The council’s final report concluded that space systems used for national security missions are vulnerable to hostile hacking and disruptions. For the military, any intrusions into its satcom systems could prove devastating. “Satellites are nodes in a network, and their value is derived from their ability to collect and disseminate information on the network. … As part of cyberspace, space systems can be equally threatened from cyber attack. For instance, a virus can interrupt the function of a satellite handset. Likewise, a virus placed into a satellite could prevent the proper onboard processing of information or the proper operation of the satellite itself.”

A spokesperson at the Defense Information Systems Agency said in a statement to National Defense that commercial satcom providers are held to the same security standards as government systems. “DISA follows the security requirements listed in the DoD National Information Assurance Policy for Space Systems used to support national security missions,” said the statement. “This policy is applicable to all national security system space systems and/or their components that are owned, operated, controlled, or leased either by the U.S. government or for the benefit of the U.S. government.”

Suppliers contend that there are inconsistencies in the military’s satcom security requirements. Harlow said companies need more clarity on this before they can invest in the appropriate technologies. “They’re looking to have commercial satellites look more like military satellites so they’re at higher levels of protection. We are trying to figure that piece out.”

The military’s most secure, nuclear-hardened constellation, the Advanced Extremely High Frequency system offers the highest levels of protection. WGS communications, either using commercial X-band or military Ka-band, are being upgraded with more secure features. “We can do much more in our new satellites,” said Harlow. “But we want some assurance from DoD that if we put these features on satellites that we will get more business … that we are not going to be competing against a guy who doesn’t have those features and offers lower prices.”

The industry wants to have these discussions sooner, rather than later, said Harlow. “Without question DoD is concerned about the cyber threat. Time has proven that we have underestimated adversaries’ capabilities. It scares a lot of people,” he added. In satcom procurement decisions, “it’s about the budget and the appetite for risk,” Harlow said. “We have always said the secure missions should be put on WGS. We still believe that commercial satellites are a huge capability at a modest cost.”

Hughes Network Systems this year signed an agreement with Airbus Defense and Space to provide secure satcom services using the U.K. government-owned Skynet X-band military communications satellite. Airbus is the operator of the constellation. Hughes plans to offer Skynet services to the U.S. government.

Lober, the vice president of Hughes, said the Defense Department “has reached out to industry.” There will be “pilot studies over the next couple of years to see how commercial industry can play in a way that is a little more integrated than it has been in the past,” he said. “In the past, DoD came to us when they ran out of capacity during war.” But short-term buys are expensive and inefficient, he said. “The AOA is looking at using commercial technology more effectively as part of  an overall military network. There will always be a need for WGS and AEHF protected comms, but commercial can go a long way in saving them money.”

What tends to get in the way of using more commercial services are defense procurement laws, said Lober. “It’s the type of money they have to use; they can’t get into long-term leases. If they can get past these hurdles this will move quickly.”

Satellite operators also are watching the Air Force’s next move on whether it might outsource the management of the WGS constellation. Boeing Space and Intelligence Systems is the prime contractor. Seven of the planned constellation of 10 satellites are in orbit.

The Air Force Space and Missile Systems Center last month asked vendors to submit proposals on how the commercial sector would operate WGS. “That was a big step,” said Lober. “That’s kind of the Airbus model with the U.K. Ministry of Defence.” This would be the first time that the Air Force is serious about outsourcing the operation and maintenance of WGS. “One of the motivators is cost,” said Lober. “People are the most expensive portion of military operations.”

Air Force Lt. Gen. Samuel Greaves, Space and Missile Systems Center commander and program executive officer for space, told National Defense that the decision to commercialize WGS is far from final. “The effort to potentially transition WGS spacecraft bus telemetry and commanding operations to a commercial operator is still in the acquisition planning stage,” he wrote in an email. “An RFP has not yet been released.”

Photos: iStock
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