A surprising political discussion emerged in the aftermath of the Republican Party takeover of the U.S. House of Representatives following the Nov. 2 midterm elections. Republicans, which traditionally have supported government spending cuts while avoiding the U.S. Department of Defense budget, now find themselves caucusing with a number of Tea Party candidates that see across-the-board downsizing as the only viable deficit reduction plan.
    The most visible example of this discussion came with Rand Paul’s (R-Ky.) election to the U.S. Senate from Kentucky. Paul mentioned the military budget as one of his primary targets for spending cuts — a statement that would have been considered heresy to Republicans a year ago. Paul now has other Tea Party supporters backing this plan, and U.S. Secretary of Defense Robert Gates is attempting to accelerate his budget plans to be approved before the new Congress is seated in January.
    Satellite industry executives, whose companies have greatly benefited from the staggering increase of commercial capacity and services utilization in military operations, have expressed mixed reactions to the looming threat. Some say that military reliance on commercial satellite has gained so much momentum that it would be impossible to scale back spending on these capabilities without serious implications to military operations. Others are bracing for cuts and openly expect revenues to be affected by potential cuts to the U.S. defense budget.
    Bruce Bennett, U.S. Defense Information System Agency (DISA) program executive officer for Satcom, Teleport and Services, said he is not concerned with the threat of cuts, as long-term plans and contracts already have been worked out. “President Obama is clearly committed to our continued presence in Afghanistan. The fact that demand is growing at such an explosive rate and satellite frequencies are playing an expanded role in operations with the emergence of high-performance Ka- and X-band capabilities, I see no significant drop off in commercial connectivity use by the government even with the rollout of” the Wideband Global Satcom program.
    Analysts generally agree with assessments from Bennett and others in the military sector that include long-term growth. In a report released in October, NSR estimated that the Ka-band market for communications-on-the-move systems and unmanned aerial vehicles (UAVs) would be as high as $100 million for aeronautical equipment by the end of 2019 and about $110 million for UAVs by the end of 2018. In addition, NSR believes commercial Ka-band systems supporting communications-on-the-pause will generate almost $50 million by the end of 2018, with a vast majority of users of these systems likely also will be deployed over military satellites.
   Strategy Analytics’ Advanced Defense Systems (ADS) September data model forecasts growing investments intended to upgrade the terrestrial portion of military satcom networks, resulting in a increased demand for advanced electronics and terminals. This demand, according to ADS, will peak as late as 2014.
    Not everyone is confident of the satellite industry’s invulnerability to cuts. During Intelsat’s Nov. 2 conference call to discuss the company’s third-quarter financial performance, CEO David McGlade said he sees some risk for Intelsat General, the satellite operator’s subsidiary that provides services to the military. “We think there may be cuts in some programs where we have a presence, and there will be times when it affects our revenue growth, but overall, we see it as a net positive, as some of the expensive government programs are augmented to better serve our customers in the government sector,” he said.
    While military budget cuts are being discussed publicly, no military satcom programs have been specifically named. Cautious executives remember the termination of TSAT in April 2009 and hope that other high-profile programs continue to avoid the chopping block.