By Marina Malenic
U.S. satellite manufacturers are suffering from government restrictions on space-related commerce, according to a new report on U.S. satellite programs released this week by the House intelligence committee.
The report finds that current statutes and regulations–particularly the International Traffic in Arms Regulation (ITAR)–“drastically hinder the space industry.”
ITAR regulations restrict sharing of defense technologies and data with non-U.S. persons unless the State Department provides a special exemption. U.S. companies can be subject to hefty fines if the department discovers unapproved transfer of designs, test data, software code and the like.
“Congress has a tendency to always overreact to a major problem,” Rep. Dutch Ruppersberger (D-Md.), the chairman of the House technical and tactical intelligence subcommittee, said regarding the implementation of ITAR. Ruppersberger discussed the findings of the study, which was produced by his panel, at a Nov. 18 forum sponsored by the Space Foundation.
“Now our American manufacturers are limited in what they can sell anywhere, and it’s really become a huge business in Europe to circumvent ITAR,” said Ruppersberger. “And consequently we’re at a great disadvantage. We can’t sell what we need to, and right now Europe is taking advantage of this and it’s hurting us.”
He noted that the foreign relations committees in Congress have begun examining the issue.
“One thing everybody agrees on is that we have to restructure ITAR,” he said. “What it is doing is putting us at a clear disadvantage.”
Specifically, the report states that ITAR “has motivated European companies to establish an international (non-U.S.) collaborative [research and development] environment where ITAR-banned technologies are produced indigenously, thereby defeating the premise of ITAR.”
U.S. contractors and officials who spoke with the congressional panel conducting the study said “U.S. corporations are experiencing a loss of market share from openly marketed ITAR-free products and services. They further stated that the ITAR-free market may soon provide foreign countries with capabilities that match some of those of the United States, further placing U.S. companies at risk.”
Compounding the problem, according to Ruppersberger, is the lack of adequate cooperation between the U.S. intelligence community and the Defense Department on satellite acquisitions, as well as their unwillingness to take advantage of commercial satellite capability. This often leads to duplicative efforts and more expensive specialized programs.
“There just hasn’t been enough cooperation between these two groups at the top,” said Ruppersberger.
“The lack of a comprehensive plan and one person making decisions undermines a lot of these programs,” he added. “We don’t have the money any more. It has to be a team effort from now on.”
He also pointed to European efforts to leverage commercial technologies as a possible model.
“Europe has taken advantage of commercial and they are way ahead of us,” the congressman said. “Where we are in our economy now, we have got to take a close look at commercial.”
He said the Obama administration will have to examine the possibility of using commercial satellites for a wider range of military applications.
“I see everything on the table for commercial except for the larger satellites that are so sophisticated where we need almost total control,” he said.
The study also advocates increasing the research and development funding for major satellites from 3 percent of a program’s budget to between 8-10 percent. The report authors said such a move could help avoid cost overruns stemming from hasty production of immature technologies.