LETTER TO FRANK FROM SECRETARY OF COMMERCE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP10M02313R000703970026-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 24
• Document Creation Date: December 22, 2016
• Document Release Date: June 27, 2012
• Sequence Number: 26
• Publication Date: October 24, 1980
• Content Type: LETTER

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EXECUTIVE SECRETARIAT (0/DCI)
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Dear Frank:
THE SECRETARY OF COMMERCE
Washington. O.C. 20230
OCT 24 1980
Thank you for your letter of October 14 concerning the
U.S. civil remote sensing program. Please be assured
that I will be responding to you in more detail as soon
as possible.
Sincerely,
Secretary of Commerce
Honorable Frank C. Carlucci
Acting Director
Central Intelligence Agency
Washington, DC 20505
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THE SECRETARY OF COMMERCE
Washington, D.C 20230
2 3 OUCT 1960
Dear Mr. McIntyre:
Thank you for your letter of September 16, 1980, in which you
responded to the "Transition Plan for Civil Operational Land
Remote Sensing from Space," and outlined your views on the
next steps required to move forward with Administration
policy commitments for operational land remote sensing from
space. I have reviewed your comments with respect to the
Landsat program and your position that most decisions should
be made in the context of the 1982 budget process, and am
concerned. that neither the substantive nor the procedural
approaches outlined in your letter will enable us to achieve
the President's publicly stated objectives during this decade.
The President has made two major statements with respect to
land remote sensing from space. In October 1978, he made a
commitment, reiterated in his March 27, 1979, Science and
Technology Message, to continue the availability of land
remote sensing satellite data during the coming decade.
Subsequently, Dr. Frank Press, in Administration testimony
before the Senate Subcommittee on Science, Technology and
Space in April, 1979, stated that "the Administration is
committed to an operational remote sensing system, although
yet undefined."
Remaining to be resolved are the major policy issues of what
constitutes satisfactory continuity of data and when the
operational system should be implemented. In addition,
agreements must be reached on pricing policies, the timing
and institutional approach to eventual private sector owner-
ship, and the timing and scope of NOAA's market expansion-
program. In my view, which is shared by the Departments of
State, the Interior and Agriculture, the National Aeronautics
and Space Administration, and Central Intelligence, these
policy issues should be addressed and resolved expeditiously.
The FY 1982 budget should then implement the policy decisions
so made. In this regard, you state that the provision of
additional funding is dependent on thorough programmatic
justification and the willingness of users to share in costs.
Our programmatic justification is fully and clearly set
forth in the Transition Plan and in subsequent submissions
to your staff, to the extent such a justification can be
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articulated at this point. We have stated, as have users,
that they will share in the cost of the system. We have
concluded, however, that all these costs cannot be recovered
in the short run; nonetheless, in light of the President's
Directive, I do not believe that the operational system can
be deferred or rejected.
I suggest that we, and the other concerned Administration
officials, meet as soon as possible to discuss and resolve
the policy recommendations made in the Transition Plan.
Those issues that cannot be resolved should be forwarded to
the President for his decision.
I would like to review the policy issues that concern us:
1. Continuity of Data During the 1980s
The present authorization of only two Landsat D satellites
almost certainly will result in significant. gaps in coverage,
possibly for as long as a year or more. In addition, the
present Landsat D ground data processing system does not
provide the reliability and timeliness required for many
applications, and implied in the President's commitment.
Users, particularly those involved in the analysis of
natural resources data from foreign areas, unanimously
believe that these two shortcomings must be overcome before
the system can be considered even a limited operational
system. Only then will they consider making the investments
and developing the capability required to enable them to use
the data in operational programs. If these improvements are
not made, users have indicated they, may purchase data from
the French and Japanese programs as they become operational
during the mid-1980s.
The Transition Plan therefore recommends authorization
of two Landsat D satellites in addition to those now being
built by NASA, each equipped with both the MSS and the TM
sensors, together with the spare parts to refurbish Landsat D.
It also recommends the improvements in the timeliness and
reliability of the ground processing system required to meet
user needs.
The programmatic justification of users' perceived needs
that you requested in your letter, and already provided to
your staff, confirms that the user agencies have not yet felt
able to commit themselves to the full use of the experimental
Landsat data in their operational programs. It is not possi-
ble, therefore, to quantify completely the programmatic gains
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and losses that would occur from different levels of Landsat
performance and satellite coverage. The Administration
commitment to an operational system was made with knowledge
that this was the case. Rather than spend more resources
proving that an experimental system cannot stimulate wide-
spread operational use of its data, we must move promptly to
make the improvements in the coverage, reliability, and
timeliness of the Landsat D system that users have identified
as the prerequisites for operational data use and for their
willingness to share in the costs of the system.
2. Implementation of the Operational System
With the improvements set forth above, the United States
could have an operational system based on Landsat technology
in being by about 1983 that meets the users' criteria for con-
tinuity and reliability. An enhanced system, optimized with
respect to both performance and cost, could be introduced by
about 1989.
The Transition Plan recommends prompt initiation of
efforts to implement an operational system and then to improve
it in a cost-effective manner, including the development of
new solid state sensor technology and the initiation of defi-
nition studies for an enhanced system, so as to meet user needs
better and to maintain U.S. technological leadership in space
during the 1980s.
Implementation of an enhanced operational system with
solid state sensors will not only ensure U.S. technological
leadership in the world data market; it will also extend the
useful life of the operational satellites, thus achieving
considerable cost savings. Conditioning the timing of an
enhanced system on the willingness of users to invest in the
system, as your letter proposes, ignores these facts.
3. Pricing Policies and Federal Financing
The Presidential Directive called for the Transition Plan
to cover "system financing including pricing policies for the
users sharing of costs." The Transition Plan recommends that
prices for Landsat D data and data products should be raised
substantially but in such a manner and at such a pace as to
encourage, rather than discourage, their expanded use.
Tentative projections indicate that sales cannot support the
system fully until at least the end of this century.
The pricing goals set forth in your letter of total cost
recovery over the next five years for Federal -users, and over
the next ten years for non-Federal users, are, in my view,
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unrealistic. Every effort should and will be made by us to
increase system revenues through product and data sales, by
expanding the market and by increasing prices to the maximum
extent permitted by foreign satellite competition and other
competing data sources. However, users have made it clear
that, without the operational system set forth in the Transition
Plan, these efforts will be difficult, if not impossible, to
achieve.
I also question the. advisability of creating different pricing
structures for Federal and non-Federal users, if the differ-
tials are to be large, and particularly when the prices to be
charged Federal users are so artificially high as to make
Landsat data products uncompetitive with data from other
sources.
With respect to Federal financing, I am pleased that
you concur with the Plan's recommendation that NOAA ini-
tially should budget for the "core" operational system that
meets the common needs of the Federal government, and that
costs for any special system capabilities should be budgeted
by user agencies desiring them.
4. Private Sector Ownership
PD/NSC-54 states that "our goal is the eventual operation
by the private sector of our civil land remote sensing
activities." Differences of view on the method, timing and
extent of private sector involvement exist, largely related
to the fact that the system must be mostly financed by the
Federal government for many years. Concerns also exist
.regarding the impact foreign satellite systems may have on
revenues from the U.S. system, and the impact private
ownership and associated pricing policies may have on U.S.
international relations.
The Transition Plan recommends a legislatively established
for-profit corporation to take over an enhanced Landsat D
system in about 1989, when the new solid state sensor tech-
nology should be available. The plan also recommends that
private ownership be accompanied by whatever regulations and
controls are necessary to minimize U.S. internationallrela
tions problems.
We continue to believe that our recommended institutional
approach is correct. Our view is based on the reluctance of
existing private corporations to invest now in light of market,
legislative, regulatory, and international uncertainties; and
on our judgment that such a corporation would best protect the
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public interest in this endeavor, minimize international
concerns, and ensure the necessary capitalization. I do not
believe a legislatively-established corporation would lead
to any higher probability of never-ending Federal subsidies
than other options. If a decision with respect to private
sector ownership is deferred until later in this decade, as
is proposed by S.3169 recently introduced by Senator Adlai
Stevenson, Jr., and supported by the entire majority on the
Senate Commerce, Science and Transportation Committee, we
would want to reconsider our views at that time.
We can, as you suggest, pursue further the possibility
of having the private sector take over the system in the
near future. But we reiterate that the private sector will
not now be prepared to accept that responsibility without
greater government subsidy than would occur after.larger
markets are developed. The question is simply one of who
should take the risk; I prefer industry to take as much of
the risk as possible.
5. Control over Data Products and Market Expansion
I am pleased that you concur with our recommendation that
the system owner-operator should own the Landsat data and data
products and condition their dissemination on the payment of
appropriate fees.
With respect to market expansion, the Transition Plan
recommends the immediate establishment of a market expansion
program to train users of Landsat data and data products and
to conduct application demonstration programs so that the gap
between system revenues and system costs can be closed as
quickly as possible. Your letter states that, while there
may be a need for some market development by NOAA, you need a
firm understanding of what criteria will be used to determine
when NOAA should become involved in market development.
NOAA should initiate a market expansion program at the
earliest possible time. In the long term, the organization
most qualified and motivated to expand the market for Landsat
data will be the corporation that will eventually own and
operate the system. At this time, however, the necessary
investment in facilities and marketing cannot be justified by
companies in the field. Therefore, to achieve the pricing
goals required to ensure early system self-sufficiency, NOAA
must start a market expansion program in FY 1982 that will be
phased down as companies decide to enter the marketing arena
and will, in any event, terminate when a private owner takes
over the system.
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Administration positions on these key issues must be-estab-
lished promptly. The Transition Plan recommends submission
of authorizing legislation and the appropriation of about
$150 million in FY 1982 to begin efforts to ensure continuity
of data and the development of an enhanced system. Without a
coherent legislative and budgetary proposal to present to the
Congress and affected domestic and foreign interests, the
Administration will lose the initiative and will postpone
even further the establishment of a U.S. civil operational
land remote sensing satellite system.
My secretary will be in touch with yours to arrange the meeting
I have suggested.
Sincerely,
Honorable James T. McIntyre, Jr.
Director
Office of Management and Budget
Washington, D.C. 20503
cc:
Honorable Cecil D. Andrus, Secretary of the Interior
Honorable Bob S. Bergland, Secretary of Agriculture
Honorable Robert A. Frosch, Administrator, National
Aeronautics and Space Administration
/ Honorable Frank C. Carlucci, Acting Director, Central
Intelligence Agency
Honorable Matthew Nimetz, Under Secretary of State
Honorable Frank Press, Director, Office of Science
and Technology Policy
1_1
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 United States Department of the Interior
OFFICE OF THE SECRETARY
WASHINGTON, D.C. 20240
Honorable Philip PI. Klutznick
Secretary of Commerce
Washington, D. C. 20230
3 C,
TWe have carefully reviewed the September 16, 1980, letter from
Jim McIntyre regarding the Transition Plan for Land Remote Sensing
from Space. In general, we are concerned that the OMB guidance
could prematurely raise the prices of data to a level that would
severely impact the user community and could seriously delay
implementation of any meaningful operational Land Remote Sensing
Satellite System.
The Transition Plan provided for needed improvements in the cur-
rent Landsat experimental system, and, most importantly, provided
for the development of a reliable, fully operational land remote
sensing system before the end of the decade. In earlier corre-
spondence I stated that Interior was in agreement with the major
recommendation of the Plan, and urged that efforts be made to
accelerate the time schedule for launch of the core system
configuration to avoid the consequences of other countries pulling
ahead of the U. S. with an improved and more cost-effective land
remote sensing system. I have not changed my views on these
issues.
Resolution of the critical policy issues discussed in the
Transition Plan (such as, shall the United States maintain leader-
ship in this field, what is meant by continuity of data, defining
the speed with which we should move toward an operational system,
and the appropriate management structure) need to be made if we
are to proceed with implementation of a truly operational, cost-
effective Land Remote Sensing System.
I would be pleased to meet with you and other interested parties
to further define a process to determine the future of Land Remote
Sensing from Space.
Since ely,
-Qi'C.
S CRETARY
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OCT 2C 198o
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UNCLASSIFIED
The Director of Central Intelligence
Washington, D C. 20505
-TU
DCI/CT 80-0103
October 14, 1980
The Honorable Philip M. Klutznick
Secretary of Commerce
x
c
Washington, D.C. 20230 _
r
o 0
Dear Phil,
0
C>
Thank you for your letter to Admiral Turner. The following co="" ntsn
are in response to your 3 October 1980 request for our views on the'
current issues relative to developing a follow-on system to the LANEtT ' n
program. o M
I note that with reference to the civil satellite remote sensing
program the three recent Presidential Directives on National Space
Policy have consistently stressed the two major objectives of main-
taining U.S. leadership in space science, applications and technology,
and encouraging greater private sector involvement in the operation and
ownership of the satellite imaging system.
In contrast, the 16 September 1980 OMB letter has focused on the
aspect of minimizing the budgetary impact of the civil remote sensing
program. In this period where the need for fiscal constraint is critical
the various OMB comments warrant careful assessment. However, the basic
position of indicating that the OMB "decision to provide increased
funding for this program will be dependent on thorough programmatic
justification and the willingness of the users to share in the costs"
fails to give any weight to the major Presidential objective of main-
taining U.S. leadership in space technology. It also seems to ignore
the stipulation in Presidential Directive/NSC-42 that an "adequate
federal budget commitment will be made to meet the objectives" of the
national space policy. In our judgment, these omissions pose the serious
risk of undermining one of the cornerstones of national space policy.
The OMB letter acknowledges that moving on to the LANDSAT follow-on
system is "an area where we have little experience." Indeed, some of
the subsequent points it makes seem to be predicated upon assumptions
that are incomplete, inconsistent, or both. Thus, with reference to
NOAA Recommendation 1, OMB is insisting that before the concept of
attempting to maintain continuity of data in the 1980s can be accepted,
more detailed programmatic justification will be required by the users.
As a point of fact, this OMB requirement is being addressed almost
exclusively to the federal agency market. It ignores two key points--
that there are other users, both domestic and foreign, and the basic
fact that if a remote sensing system does not provide continuity of
data, users who have made or are about to make investments of manpower
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UNCLASSIFIED
and equipment will be forced either to curtail their investment or shift
to alternative sources of data. Lack of data continuity is a strong
counterforce to market expansion. Establishing continuity of data is a
foundation without which the United States cannot maintain leadership in
civil space applications.
0MB makes the implementation of NOAA Recommendation 2 to develop
specifications in 1981 for the goal of initiating a fully operational
system in 1989 conditional upon the willingness of U.S. users to invest.
OMB, therefore, indicates that a future, more advanced operational
system should be deferred beyond 1989. This position appears to be
predicated upon the assumption of a static condition whereby the making
of decisions concerning the civil remote sensing program can continue in
the future as in the past on the basis of unchallenged leadership and
with disregard of competitive foreign programs.
However, the remote sensing field will become far more dynamic in
the next few years as U.S. leadership is challenged by the ongoing
programs of France and Japan. Current information indicates that the
French SPOT program is comprehensive and aggressive. France has scheduled
the first SPOT satellite to be launched in November 1983, with operational
services to begin in January 1984. The satellite will carry two imaging
instruments capable of providing either a 20-meter or 10-meter capability--
as compared to 80 meters and 30 meters for*the United States. The
spectral range will be similar to that of the LANDSAT MSS but will
extend only to 0.9 micrometers into the infrared spectrum--as compared
with the 1.1 on the MSS. However, the pointing aspect of the SPOT
system will afford a stereoscopic capability that will be especially
useful for topographic mapping and geological surveys. The French
government has announced the policy that, although the 20-meter imagery
will be distributed without restriction to all users who pay the appropriate
fees, the 10-meter imagery will be released only with the consent of the
countries that are imaged. The higher resolutions and the restrictions
on the dissemination will have a strong appeal to many countries.
This SPOT program has been under development for a number of years
and was approved in late 1977 by the French government which also provides
the funding. The stated objectives of the SPOT program are quite broad
and include more effective land use management of French territory,
facilitating involvement of French companies in the economic development
of the developing nations, and providing a technologically sound basis
for a subsequent military reconnaissance program. The SPOT system
processing objective is to supply some standard products within 48 hours
and fully processed products within one week. Various parts of the
UNCLASSIFIED
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UNCLASSIFIED
French government's scientific and technical organizations are apparently
being geared up to provide additional specialized imagery interpretation
and analytical services. The Japanese satellite program can also be
expected to be a strong competitor.
It may well be that not all of these plans will be effected during
the 1980s, but these foreign developments. emphasize the point that the
U.S. civil remote sensing program will be subject to aggressive foreign
competition. If the development of its advanced capabilities should be
put into a holding pattern, maintaining U.S. technological leadership
will become increasingly difficult.
Therefore, there is a need to reaffirm the basic Presidential
objectives with reference to the conduct of the civil space programs as
they were unequivocally outlined in Presidential Directive/NSC-37--"to
increase the body of scientific knowledge about the earth and the
universe; to develop and operate civil applications of space technology;
to maintain United States leadership in space science, applications, and
technology; and to further United States domestic and foreign policy
objectives."
With reference to the 0MB comment on NOAA Recommendation 3, it
should be noted that price levels which are too high will also drive
users to curtail their purchase of U.S. satellite products or shift to
alternative sources. Again, nowhere does there appear to be 0MB con-
sideration of the impact of foreign competition.
To summarize, I believe an inadequate or poorly implemented system
of capital investments poses the risk of developing an inefficient or
unreliable remote sensing system. This will serve only to further
stimulate foreign competition for the international market that previous
U.S. investments have basically created. It will also lead to erosion
of the current U.S. leadership in civil applications of remote sensing
technology from space, maintenance of which is a basic objective_spelled
out in the Presidential Directives. Since the Europeans and the Japanese
are already making major remote sensing advances, satisfying this objective
should be a major consideration. Furthermore, a marginal or substandard
U.S. system not able to compete with foreign competition also decreases
the likelihood of achieving private sector involvement in the future
operation of civil remote sensing activities--still another Presidential
objective. And, finally, such a system will even fail to meet domestic
users' needs for data continuity and reliability.
rank C. Carlucci
Acting Director
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3 8,
DEPARTMENT OF AGRICULTURE'
OFFICE OF THE SECRETARY
WASHINGTON, D. C. 20250
Honorable Philip M. Klutznick
Secretary of Commerce
Washington, D.C. 20230
0 GT 2 0 1980
Thank you for the opportunity to comment on OMB's guidance letter of
September 18, 1980, on the Transition Plan for Land Remote Sensing from
Space.
I agree wholeheartedly that the 0MB letter raises a number of critical
policy issues. I also strongly agree with you that the issues must be
resolved in accordance with appropriate policy procedures.
It is unfortunate that the initial impression conveyed by the 0MB letter is
somewhat negative. In responding to recommendations in the final version of
the Transition Plan, the 0MB letter of September 18 ethos earlier comments
on the preliminary draft of the Plan which were transmitted in an OMB letter
dated January 24, 1980. Both 0MB letters appear to shift the relevant
issues from the framework of policy procedures to the budget process. Our
concern is that 0MB does not recognize that broad policy objectives must be
sst first and that consideration of resources necessary to achieve the
desired goals and objectives is the second step.
Even though previous correspondence has covered much of the same ground, we
propose to defer direct comment on specific points raised by 0MB in the
letter of September 18 pending additional review within the Department of
Agriculture. For example, key issues are continuity of data and financial
support for the civil space remote sensing system as it moves from research
and development into operational use.. The issue of system financing is
extremely complex and, in terms of national policy, has profound
implications for other Federal data acquisition systems; the solution
proposed by 0MB, recovery of costs through increased prices to Federal
users, may well inhibit successful development of an operational remote
sensing system which will serve national civil needs.
In this regard the Department of Agriculture has consistently taken the
position that a fair and reasonable price will be paid for data'products,
provided the system meets our requirements. We are attempting through the
AgRISTARS (Agricultural and Resource Inventory Surveys Through Aerospace
Remote Sensing) research program to determine the utility of satellite data
in USDA programs. Although some Landsat data are currently being used for
qualitative assessment of crop conditions, it will be difficult to respond
to OMB's specific questions until the research program has progressed, and
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Honorable Philip M. Klutznick 2
until the proposed system is in place and has demonstrated the capability to
deliver timely and reliable data to users. Because remotely sensed data
from space constitute such a. unique source of information whose potential
has only just begun to be exploited, it is entirely possible that we will be
able to demonstrate higher than anticipated levels of benefits in present
uses as well as new and unexpected benefits in the global renewable
resources and agricultural marketplace.
Let me assure you again of our support to the Department of Commerce and to
the National Oceanic and Atmospheric Administration as you prepare to assume
management responsibility for civil land remote sensing from space in
accordance with policy developed by the PRC on Space and formalized in
Presidential Directive No. 54.
Sincerely,
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National Aeronautics and
Space Administration
Washington, D.C.
20546
Office of the Administrator
Honorable Philip M. Klutznick
Secretary of Commerce
Washington, DC 20230
..OCT t 6 1980
47
I fully agree with the basic point of your October 3 letter on the Landsat
Transition Plan-that we must settle on a policy and then carry it out. It has
been my understanding that PD/NSC-54 established a policy and that your
Transition Plan was to lay out an implementation approach reflecting the views
and needs of the key federal elements involved. It seems to me that further
deferrals, further studies (especially those requiring economic assumptions that
are inherently suspect until there is relevant operational experience), or further
constraints (implied by subordinate policy questions on ownership or pricing) are
simply ways to avoid coming to grips with the decision to establish a viable,
operational, national program.
It will interest you to note that just the other day Frank Press asked me
to come over and discuss Landsat-D status and action plans, and what is the
minimally acceptable continuation of the Landsat-D series to meet the
President's commitment to data continuity-in short, the near-term technical
issues embodied in the Transition Plan. At that meeting, he assured me that he
fully supported the President's commitment and was prepared to argue for its
implementation in the final budget formulation process. You may wish to
discuss his viewpoint directly with him, as Dick Frank and I have done recently.
I urge you to press forward on an urgent basis toward the establishment of
a firm national policy of fiscal commitment on transition to an operational land
observing system; as always, you can count on NASA's full support.
Robert A. Frosch
Administrator
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UNDER SECRETARY OF STATE
FOR SECURITY ASSISTANCE, SCIENCE AND TECHNOLOGY
Dear Mr. Secretary:
Secretary Muskie has asked me to respond to
your letter of October 3 with respect to the
Transition Plan for Land Remote Sensing from Space
and the guidance you received September 16 from
the Office of Management and Budget.
The Department of State considers Presidential
Directive PD-54 as the basic policy document on
operational land remote sensing. We worked closely
in all the studies leading to PD-54 and agree with
you that the budget process should not affect the
fundamental Presidential commitment to Landsat data
continuity and making land remote sensing operational.
We therefore support your intention of-resolving the
policy differences raised in the 0MB letter.
The Landsat program has made us an international
leader in civil remote sensing. It is imperative
that we maintain this leadership by assigning the
highest priority to the Landsat D/D' project, with the
higher capability Thematic Mapper Instrument in space
no later than 1983. I am enclosing a copy of a memo-
randum the Department submitted to Dr. George Benton,
which explains in detail our views on the importance
which we attach to the Landsat program.
The pricing policies and the fee structure which
will be developed for the operational system will
have an important bearing upon its international
acceptability. We are planning a joint study with NOAA
on the international aspects of a pricing strategy.
The Honorable
Philip M. Klutznick,
Department of Commerce,
Washington, D.C. 20230
1 -11
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Until such an assessment is completed, the Department
would be opposed to making any major changes in the
current international user prices and fees.
As the Department has stated previously, the
benefits to U.S. foreign policy from Landsat are
very substantial. The Landsat program demonstrates
to the world community an openness, vitality, and
technological superiority, when contrasted with the
remote sensing activities of other nations. It is
a tangible contribution toward our obligation, under
the 1967 Outer Space Treaty, to use outer space for
the benefit and in the interests of all countries,
irrespective of their degree of economic or scientific
development. Developing countries with limited resources
have made investments to use this data, and the United
Nations and the international community are working
exclusively with Landsat data. This program is valuable
to the creation of a favorable international climate
allowing us to conduct all our space programs without
burdensome restrictions and regulations.
Other space powers are recognizing' the indirect
foreign policy benefits which accrue to the U.S. from
this program. France, the European Space Agency, Japan
and others, have initiated or are planning their own
programs. We should not risk losing our current leader-
ship because of gaps in data continuity, uncertain plans
and delays.
You can count on our strong support in your efforts
to move promptly towards an operational Landsat program.
Sincerely,
WE UNDERSTAND THAT THE STATE DEPARTMENT RESPONSE HAS BEEN
SIGNED BY UNDER SECRETARY NIMETZ TODAY (OCTOBER 24) WITH
NO SUBSTANTIVE CHANGES.
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DCI/CT 80-0103/1
10 OCT 1980
r~G.ti`Cu.'+Ct;M FCR: sting Director of Central Intelligence
Deputy to the DCI for Collection Tasking
SUBJECT: Letter of Response to Secretary of Commerce
REFERENC`. Letter to DCI from Secretary of Commerce, dated
3 October 1980
~~i:[:t 17. n
giaDr
[
Action Requested: Your signature on the attached letter of
response to Secretary Klutznick's request for your views on issues
raised in a recent 0MB guidance letter relative to the develo ment of a
follow-on to the current LANDSAT civil satellite program.
2. Background: As you are aware, three Presidential Directives
(PD/NSC-3T, PD NSC-42, and PD/NSC-54) have been generated by the recent
review of national space policy. The basic objectives with reference to
the civil space programs were indicated in PD/NSC-37 as being "to increase
the body of scientific knowledge about the earth and the universe; to
develop and operate civil applications of space technology; to maintain
United States leadership in space science, applications, and technology;
and to further United States domestic and foreign policy objectives."
This Directive also provided for encouraging "domestic commercial
exploitation of space capabilities" under government authorization and
supervision. The two subsequent Directives provided further guidance,
essentially concerning the specifics of implementing these basic objectives
Thus, PD/NSC-54 levied upon Commerce the responsibility for preparing
the transition plan from the current NASA LANDSAT experimental system to
an operational satellite-remote sensing program for civil applications.
The transition plan was to cover, among other subjects, "system financing
"
including pricing policies for the users sharing of costs.
3. Them differing reactions between 0MB and the federal user agencies
to the Presidential guidance surfaced during the evolution of the formal
Transition Plan, which was completed in June. On one hand, the OMB
thrust was to reduce program costs to the minimum, to push to the maximum
cost sharing by users, and to turn over ownership and operation of the
system to the private. sector as soon as possible. Implementation of the
0MB budget policies would:
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SUBJECT: Letter of Response to Secretary of Commerce
a. mean limited capability systems that will result in loss of
U.S.-leadership in civil applications of space technology;
b. stretch out the recommended procurement plans, thereby
threatening continuity of data flow; and
c. create a managerial/budgetary nightmare as the operations
of the civil system became dependent upon uncertain contributions
from the various users.
4. The other user agencies (Commerce, Agriculture, Interior,
State) have emphasized:
a. implementing the basic policy objective of maintaining U.S.
technological leadership in civil space matters, and
b. developing a sound program that would provide useful services,
thereby attracting a broad market of federal, private, and foreign
5. The OMB-user agency differences appeared to be somewhat moderated
by devising language in the text of the Transition Plan that tried to
respond to both points of view. However, the 16 September 1980 0MB
letter indicates that the 011E position--which is supported by Dr. Frank
Press--continues to be dominated by the sole objective of minimizing the
near-term budgetary effect without consideration of the resulting impact
on the national policy objective of maintaining leadership in space.
The 0MB approach is unrealistic since its pressures for reduced system
investments--and capabilities--and for higher product costs will be a
strong incentive for driving present users away, especially given the
uncertainties in data flow and.the near-term prospect of aggressive
competition from France. Furthermore, the private sector does not
appear to be too enthusiastic about taking over system ownership at this
time, and are inadequate system will only serve to strengthen their
reservations. Even if they are willing, devising and approving the
enabling legislation will probably take a minimum of two years.
While the exact
amount resulting ing from an implementation of the cost-sharing concept is
obviously subject to some negotiation, it is obvious that the 0MB concepts
will drive current users,torpdbice or eliminate their purchases of civil
remote sensing products.
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nature of the French competition. It should, therefore, be useful to
Secretary Klutznick in his present plan to get the President's resolution
of these issues.. The letter has been coordinated with, and concurred in
by, RMS and NFAC (OGSR and OSWR)
8. Recommendation: I recommend that you sign the attached letter
to Secretary K utznic