Government Policy Shifts in 2013 Set Path for More Efficient Use of Commercial SATCOM

by Kay Sears, President, Intelsat General, IGC news

In the five years that I have been leading the Intelsat General team as the company’s president, we have worked hard to improve the way the U.S. government buys and uses commercial satellite communications services. The acquisition approach put in place in the early 2000s, while nobly designed to help small businesses, was completely inadequate to support the tremendous growth in commercial SATCOM with the build-up of the wars in Iraq and Afghanistan. Not only was the U.S. government paying high prices on the spot market for commercial capacity, but too many hurdles stood between the warfighter and the commercial satellite services needed to carry out the mission.

I believe that in 2013, we made significant strides toward needed policy changes, and clearly defined the relationship between long-term leasing and commercial operator investment in future capabilities to serve the warfighter as well as other government agencies.

The most significant is a section of the National Defense Authorization Act passed by Congress in the final hours of 2013. This bill directs the DoD to move toward multi-year leases and hosted payloads to acquire commercial satellite capacity and services. The leaders of the commercial satellite industry have explained for many years that one-year leases are the most expensive and least-strategic method for the DoD to acquire commercial SATCOM services. 

By leasing commercial capacity on a long-term basis, the DoD will have an opportunity to take a broader approach to planning its space architecture, one that includes both commercial and government-owned satellites as well as stimulates investment by the operators in new assets and capabilities. Such long-range planning will not only generate cost savings, but will enable the DoD to more strategically plan for satellite capacity when and where it is needed to support a range of simultaneous missions around the globe. Only by working together can the commercial industry plan their future satellite networks to accommodate the DoD’s ever increasing needs.

Two other major initiatives came from the Air Force’s Space & Missile Systems Center (SMC). The Center communicated a vision for acquiring commercial satcom capabilities on orbit in much the same way that they build milsatcom capability, and merging both into their overall space architecture. This vision, known as Pathfinder, culminates in a potential for commercial constellation access on a large scale that will meet future wideband communications requirements beyond WGS. The second major accomplishment for SMC was the long-awaited request for bids on its Hosted Payload Solutions (HoPS) contract. We applaud the efforts of the SMC commander, Lt. Gen. Ellen Pawlikowski, its former Executive Director, Douglas Loverro, and its current Executive Director, Dave Madden for leaning forward in both vision and execution to improve the options for working with commercial operators, thus saving the DoD money and providing the needed flexibility to support the warfighter.

In early 2013, IGC and four other satellite operators presented the DoD with a list of seven changes the Pentagon could make that would result in more efficient procurement of commercial satellite services. A few months later, Frank Kendall, the Undersecretary of Defense for Acquisition, Logistics and Technology, announced that the Pentagon was launching a 90-day review of specific policy recommendations needed to improve the way the department acquires commercial satcom. We understand the review is ongoing, and look forward to a report in 2014.

Even without Kendall’s report, the DoD’s Better Buying Power initiative appears to be resulting in momentum for real change. The Pentagon leaders have acknowledged the vital role that commercial satellites play in helping the DoD achieve its global mission. The steps taken in 2013 have laid the groundwork for real change, increased dialogue, and a potentially disaggregated architecture for the future that will integrate milsatcom and comsatcom in an innovative, flexible and cost-effective manner. 

So we need to focus on the actions needed in 2014 to actually make these proposals a reality. The authority for the DoD to enter into multi-year leases for commercial SATCOM still needs to be passed by Congress. The Office of Management and Budget and the Congressional Budget Office have to work on terms for early termination of commercial leases and any other procedures that need to be implemented for long-term contracts. SMC will award HoPS and we anticipate the first hosted payload opportunity in 2014, in addition to the first phase of the Pathfinder initiative.

While 2013 was a difficult year from a budget perspective, it is important to remind ourselves what we achieved on the policy side and the potential for real change in the future. Never before in my time in the industry have I experienced the degree of common understanding and momentum among senior leaders regarding the benefits of commercial satcom. Thus, we enter 2014 with optimism and excitement and best wishes from all at IGC for a Happy New Year.