COMMERCIALIZATION OF THE CIVIL SPACE REMOTE SENSING SYSTEMS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84B00049R001700270002-8
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 6
• Document Creation Date: December 20, 2016
• Document Release Date: April 4, 2007
• Sequence Number: 2
• Publication Date: December 13, 1982
• Content Type: MEMO

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 THE WHITE HOUSE
Approved For Release 2007ICkA(4F DP84B00049R001700270002-8
CABINET AFF ST G MEMORAMUM
DATE: 12/13/82
NUMBER: 077657CA DUE BY:
SUBJECT: Cabinet Council on Commerce and Trade, December 15, 1982
8:45 a.m. in the Roosevelt Room
Vice President
State
Treasury
Defense
Attorney General
Interior
Agriculture
Commerce
Labor
HHS
HUD
Transportation
Energy
Education
Counsellor
-m
CIA
USTR
REMARKS:
Baker
Deaver
Clark
Darman (For WH Staffing)
Harper
Jenkins
CCCT/Gunn
201-
CCEA/Porter
^
CCFA/Boggs
13
^.
CCHR/Carleson
13
^
CCLP/Uhlmann
^.
CCMA/Bledsoe
^
^
CCNRE/Boggs
^
The Cabinet Council on Commerce and Trade will meet Wednesday,
December 15 at 8:45 a.m. in the Roosevelt Room. The agenda
and background paper are attached.
RETURN TO: ^ Craig L. Fuller f Becky Norton Dunlop
Assistant to the President Director, Office of
for Cabinet Affairs Cabinet Affairs
456-2823 456-2800
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4ffiJ%JJ~WOF COMMERCE
Washington, D.C. 20230
MEMORANDUM FOR: MEMBERS OF THE CABINET COUNCIL ON
COMMERCE AND TRADE (CCCT)
FROM: fill Baldrige, Chairman Pro Tempore
/'1 Cabinet Council on Commerce and Trade
SUBJECT: Commercialization of the Civil Space
Remote Sensing Systems
I. ISSUE
(1) What is the best mechanism to implement the current
policy of transfer of. civil land remote sensing
systems (Landsat) to the private sector as soon as
possible?-
(2) Should the Administration consider simultaneously
private sector transfer of both civil weather and
land satellites?
II. BACKGROUND
The CCCT has met to discuss this issue in December 1981,
March 1982, and April 1982. In the April meeting a tentative
decision was reached to examine commercialization of the
Landsats along three paths (international joint venture,
lower cost missions, or privatization). It was also tenta-
tively decided to continue the civil weather satellites under
Government control. The first two paths on Landsat have not
produced any new information. I have elected not to bring
the recommendation to the President pending further informa-
tion from industry on both. the land and civil weather
satellites.
Industry inputs, in the form of responses to a Request for
Information published in Commerce Business Daily, were received
October 22 and have been reviewed by a private sector advisory
committee and an ad hoc Governmental team chaired outside the
Department of Commerce.
The private sector committee, chaired by Mr. Michel Halbouty,
concluded that none of the submissions was satisfactory as
stated, a Request for Proposals (RFP) should be released and
legislation submitted to transfer either the land or land and
weather satellites to the private. sector, and an urgent supple-
mental appropriation be submitted to procure follow-on Landsats-.
The committee also concluded that a continuing advanced Federal
R&D program in remote sensing is essential and recommended a
restriction on the extent of responsibility given if a sole
entity were selected-for the satellite systems.
Not refrr dto:l OOC.V'V iv r
applies.
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-2-
The Government team analyzed the industry submissions,
but did not formulate a plan for commercialization.
In reviewing the industry submissions and the two evalu-
ations, the Department of Commerce found that industry
stated that all Government concerns could be satisfied
under a contractual relationship and that industry had
provided what might be considered an opening position
for negotiations. However, all responses had drawbacks
as submitted.
III. DISCUSSION
There are no zero cost solutions to maintaining a civil
space remote sensing capability. A purchase of Govern-
ment assets can reduce expenditures for a year or so,
but until a market is established Federal support is
necessary, and. at a level larger than current budget
assumptions -- if it is Government policy for civil
space remote sensing to continue. This statement is
true whether the systems remain in the Government or
are transferred. to the private sector.
The U.S. Government is currently spending more than
$14 billion per year on the civil and national defense
space programs. The investment of less than 2.5% of that
amount ($350 million-in FY 83 dollars, of which approxi-
mately half is already devoted to Federal civil space
remote sensing programs) can create a new private industry
based on remote sensing of the weather, ocean, and land
from space. .
A finite-duration redirection of this small fraction of
the Nation's investment in space will assure the U.S. of
a continued leadership role in civil land remote sensing,
a stronger weather satellite system, and the evolution of
a commercial ocean satellite system. This investment would
produce in the foreseeable future a self-supporting
commercial venture.
No other civil space effort can contribute so.surely to
the future economic base of the country, or continue so
visibly both the favorable image of the United States as
an advocate of the peaceful uses of outer space and as a
supporter of the private sector as the appropriate means
to advance those uses.
Civil space remote sensing systems are being advanced by
France, Japan, the European Space Agency, India, Canada,
the Federal Republic of Germany, and the Soviet Union.
The United States has created this high technology field,
but will now lose its leadership position unless strong
action is taken now.
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A commercial entity, with adequate early support, can
preserve the U.S. position -- with all of the concomitant
implications in contributions to economic strength,
national security, foreign policy, and the stimulation
f o a greater private sector role in space.
Although no one submission from private industry satisfies
all criteria that the Government would apply, there is
sufficient credible evidence that a satisfactory arrange-
ment can be reached with one or more entities in the
private sector. There is also sufficient evidence that a
contractual arrangement can be reached that will protect
satisfactorily all Federal interests (national security,
foreign policy, and protection of life and property), and
without creating so constraining an environment that no
latitude is left for the private entity.
Federal interests require a continuing- oversight of any
private entity involved in civil space remote sensing,,
as does the Outer Space Treaty. Consistent with the
President'sS.pace Policy, that oversight can be provided
by an interagency committee led by the Department of
Commerce.. Among the committee's tasks would be drafting
the RFP and required legislation, coordinating Federal
activities, and ensuring that the private entity adheres
to national policies. Illustrative of such policies--w oui-d------
be non-discriminatory data dissemination and continuing
the U.S. participation in the free international exchange
of weather-data.
Implementing a commercial system involving the large
capital expenditures of a satellite system necessitates some
form of assured market. Normal business practice employs
guaranteed minimum purchase agreements to justify large
capital investments. The Government, as the chief customer
in the early years, must accept the private firm's needs
for such assurances.
IV. OPTIONS
There are two principal options: (1) Transfer to the private
sector, via competitive means, the current operational land,
civil weather, and future civil ocean satellites. While one
RFP would be released for all systems, joint ventures would
be permitted to encourage competition. (2) Continue the
current budget policy of bringing the land remote sensing
systems within the Government to a close by nominally 1988
and retaining the civil weather satellites under Government
control.
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- Pros:
1. Maintains a vigorous U.S. program in
civil space remote sensing.
2. Demonstrates commitment to the private
sector role in space.
3. Creates a new private industry.
4. Reduces the size and scope of Government
activities.
Con:
1. Requires a. larger Federal commitment
to civil space remote sensing than-current
budget assumptions (nominally $350 million
in FY 83 dollars versus approximately
$200 million).
OPTION 2 - Pros:
1. Is within current budget.
2. Avoids need to solve foreign policy and
national security concerns resulting from
private ownership.
Cons:
1. Leaves advanced civil land remote sensing
to foreign entities.
2. Does not increase private sector role in
space.
3. Reduces neither the size nor scope of
Government.
V. RECOMMENDATION
Ask the Department of Commerce to oversee the transfer
of the civil operational weather, land, and future ocean
satellites to the private sector as soon as possible.
The transfer must be carried out consistent with the
following principles:
(1) National security and foreign policy concerns must
be appropriately addressed.
(2) The transfer should occur under competitive conditions
to the maximum extent practical.
(3) The Department of Commerce should establish the
interagency coordinating body as soon as pssible.