Sunday, August 31st, 2008

In Earthbound, The Economist argues that gravity is not the main obstacle for America’s space business — government is:

The controls governing America’s export of satellites are part of the International Traffic in Arms Regulation (ITAR) and they are handled in the Department of State. At one time the Department of Commerce had the job. But in the mid-90s a great controversy arose when information was shared between American satellite makers and the Chinese. Politicians reacted to fears that secrets had been passed to China by moving control of space exports to the State Department.

Michael Beavin, a programme analyst at the Office of Space Commercialisation in America’s Commerce Department, says that the wording of the legislation is open to broader interpretation than Congress intended. An international GPS ground station may have to get export approval to buy a new screen for its Dell laptop, because it is part of a system that is controlled. Pierre Chao, a senior associate at the Centre for Strategic and International Studies (CSIS), a think-tank in Washington, DC, says that as soon as satellites were put on the munitions list “the little screw and the commodity wiring became a munition”. Furthermore, anything modified for a munition is a munition. This clause, he says, captures all the little “doodads”. In fact, he explains, it’s the extremely sophisticated “part X” that you want to keep out of the enemy’s hands, not the whole box. “You are using an extremely blunt instrument for sophisticated policy needs.”

You may think that is the price of security, but Lon Rains, the editor of Space News, says that ITAR has “sped up the inevitable proliferation of advanced technology, by forcing other countries to find other means of obtaining satellite components that had previously been manufactured only in the United States.” Joe Rouge, the director of the National Space Security Office at the Pentagon, thinks that ITAR probably made sense a decade ago but agrees that it is now a blunt instrument. “The problem is that today you can buy international equivalents that are as good as what American industry is producing.”

The result is a system that is too successful in keeping American technology out of foreign hands. Before 1999, when the State Department took over the export regulation of satellites, America dominated commercial satellite-making with an average market share of 83%. Since then, this share has declined to 50%, according to Space Review. ITAR’s critics blame the change in export controls. As bidding opened in July this year for the €3.4 billion ($5 billion) of contracts for Galileo, a constellation of 30 positioning satellites being built by the European Union and the European Space Agency, European officials cited export controls as a reason for avoiding anything to do with America wherever possible.

At the start of the decade, Alcatel Alenia Space (now Thales Alenia) announced that it would create an “ITAR-free” spacecraft, purged of all American components. Between 1998 and 2004 the company doubled its market share to over 20%, becoming perhaps the greatest beneficiary of export policies. Export controls also prompted the European Space Agency to pay to develop a European supplier of solenoid valves, so that European space-propulsion systems do not depend on this American part. Similarly, Telesat, Canada’s satellite-fleet operator, has said that ITAR is one of the reasons it has selected European satellite builders in recent competitions. And in 2005 EADS Sodern, a French maker of satellites’ control and positioning systems and subsidiary of the Franco-German company EADS, said it would start to phase out its American supplier base.

Meanwhile, American components and satellites are suffering because of the cost and delays in doing business with the firms that make them. International companies cannot access an inventory of vital American satellite components and place orders as the need develops because each component must run the gauntlet of export controls. Whether the component is a motor, a control valve, a star tracker, an antenna or a chip, it is simpler to look for non-American alternatives.

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