By Clayton Mowry

Rocket launches, as well as the risks they convey, are part of most satellite executives’ daily lives. Without these expendable launch vehicles (ELVs), we’d have no way of bringing satellite services to market. Commercial launch services are now offered by over a dozen companies from the United States, Europe, Russia, Ukraine, the Peoples Republic of China, Japan, India and Israel.

Yet satellite companies’ ability to launch on a variety of ELVs is limited under three bilateral trade agreements negotiated by the United States in the early 1990s. These agreements were originally intended to limit participation in the commercial launch marketplace by industrial concerns from so called non-market economies–Russia, Ukraine and China–as they transitioned to operations based on market principles.

Strict quotas were set at the beginning of the trade agreements, limiting the number of satellite launches that could be conducted by the three countries over a period of several years. But time is running out for the commercial satellite industry. The U.S.-Russian agreement expires at the end of 2000, while the other two accords with Ukraine and China terminate at the end of 2001. As we went to press, the Clinton Administration announced it has terminated the launch agreement with Ukraine. It is unclear whether the U.S. government will try and re-negotiate new quotas with Russia and China before the end of this year or if they will simply let the current agreements expire. The lack of a clear policy on quotas has raised concerns among satellite manufactures, operators, and their customers, who are wary about signing up for launches on Proton or Zenit rockets beyond the terms of the agreements.

The satellite industry’s position, however, is clear. U.S. satellite manufacturers, operators and launch providers are united in the belief that the era of launch quotas must come to an end. While the quotas were originally sought by the U.S. government to protect U.S. companies from potential market disruption caused by the entry of new launch services providers into the global satellite launch marketplace, they are no longer necessary.

In the interest of full disclosure, let me confess that I served on the U.S. government delegation that negotiated the first bilateral agreement with Russia dating back to 1993. At that time, the U.S. launch industry was concerned that their share of a relatively small market for commercial launches–around a dozen or so per year–could be devastated by highly capable, low priced Russian rockets. These U.S. firms had only been competing in the commercial launch market for a few short years in the wake of the Challenger tragedy and President Reagan’s decision to restrict commercial launches aboard the space shuttle. The U.S. government was afraid, and rightly so, that Western launch companies could not compete against Russian and Ukrainian firms that had been subsidized for decades in their respective state-run economies.

Let me be the first to admit that times have changed. Since reaching the agreements, several factors have dramatically altered the landscape of the commercial launch industry. First, the market for commercial geostationary satellite launches has doubled since the early ’90s. Today’s commercial satellite market requires scheduling flexibility and a diversity of suppliers that is difficult to achieve under the current quota regime. Second, and more importantly, U.S. companies have entered into strategic partnerships with Russian and Ukrainian launch companies. International Launch Services, a joint venture between Lockheed Martin and Khrunichev, and Sea Launch, a partnership between Boeing, Yuzhnoye and Energia, have provided needed launch capacity to satellite operators at competitive market prices.

These joint ventures have not only met the U.S. government’s goals for establishing free and fair trade in commercial launch services, they have also accomplished a key U.S. national security objective in the post Cold War era–helping prevent the spread of missile technology to unfriendly nations.

But the U.S. wouldn’t be a democracy if it were not for a few dissenting voices. A very small but vocal minority in the aerospace community has argued that the U.S. government must constrain free trade in launch services to protect the United States’ two manufacturers of solid-fuel rocket motors. Alliant Aerospace and Thiokol build solid-fuel motors for ballistic missiles, the Space Shuttle, and commercial ELV strap-on boosters. Simply put, they believe the U.S. government should restrict satellite companies’ access to the launch market in order to protect the Defense Department’s ability to purchase ballistic missiles at a lower cost.

The Clinton Administration’s National Space Policy, released in October 1996, stated that “free and fair trade in commercial space launch services is a goal of the United States.” In support of that goal, the policy directed the U.S. Trade Representative and other federal agencies to implement a strategy for “transitioning” from negotiated quotas to open markets for commercial launch services.

By allowing commercial satellites to fly on variety of commercial rockets, satellite manufacturers and operators are afforded greater flexibility in scheduling launches– thereby reducing the risk associated with launching all their payloads on any one family of ELVs. The end of launch quotas should benefit satellite and launch companies alike through competition, lower prices, and greater choices.

Clayton Mowry is the executive director of the Satellite Industry Association. His email is [email protected].