TRANSMITTAL OF ISSUE PAPERS ON LAND REMOTE SENSING AND WEATHER SATELLITES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84M00396R000300020002-4
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 5
• Document Creation Date: December 20, 2016
• Document Release Date: March 1, 2008
• Sequence Number: 2
• Publication Date: March 12, 1982
• Content Type: MEMO

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7 1.2-;:! ? THE SECRETARY OF COMMERCE
Washington, D.C. 20230
?17irres of
1 2 MAR 1982
TO: Members of the Cabinet Council on Commerce and Trade
FROM: Malcolm BaldrigelMO
Chairman, Cabinet Council on Commerce and Trade
SUBJECT: Transmittal of Issue Papers on Land Remote Sensing and Weather
Satellites
The Working Group has developed the additional material on Landsat
requested at the December 16, 1981, CCCT meeting, and prepared the issue paper
on commercializing the civil weather satellites for your consideration. The .
paper on Landsat (Paper I) provides additional information on benefits, required
private sector investment, and the magnitude of an enhanced Federal commitment
for continuing U.S. civil land remote sensing technology. Paper II examines
whether the Administration should consider transferring simultaneously the civil
weather and land remote sensing satellite systems to the private sector.
Four decisions by the Cabinet Council are needed:
1. Is the continuation of civil land remote sensing from space in
the national interest?
2. If (1) is answered affirmatively, what level of financial commit-
ment should be made to civil land remote sensing?
3. Should commercialization of weather satellites be considered at
this time?
4. In order to implement the decisions, the CCCT should direct the
Department of Commerce to (a) seek appropriate legislation and
(b) begin the competitive selection process.
LANDSAT: With respect to U.S. civil land remote sensing, the CCCT must
determine if continuation of civil land remote sensing from space is in the
national interest. Unquantifiable, but tangible, benefits in the form of impro-
vements in the balance of payments and efficiencies in the U.S. renewable and
non-renewable resources industries are projected; these have not been adequately
demonstrated to date. To make these benefits capturable by the private sector
as an inducement to invest, basic changes would have to be made in U.S. inter-
national policies. These changes could impact negatively national security
satellite systems and international relations to such an extent that the changes
are considered by many to be unacceptable.
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Continuing the U.S. civil capabilities provides intangible benefits con-
sidered by many to be of great value. Landsat, the current civil program, pro-
vides information, either by itself or in conjunction with other classified and
unclassified data sources, that is of significant value in the Administration's
development of national and international policies. Such continuation has its
costs. Most Working Group members believe that, because of the present small
market for data, and the inability of the satellite owner to capture the bene-
fits from derived information, the private sector will be unable to finance the
large investments required after the end of service from the present government
satellites. Significant Federal participation will be required especially in
the initial years when large capital investments must be made. This raises
issues of increased Federal budgets at a time when the Administration is trying
to reduce budget deficits. Federal participation also brings Federal interven-
tion in a program that some feel should be a totally private enterprise in which
the market place dictates decisions.
WEATHER SATELLITES: With respect to the simultaneous commercialization of
civil land and weather satellites to the private sector, most Working Group mem-
bers believe that the linkage between the two remote sensing systems is not
necessary, and is indeed unwise from political and policy perspectives.
Decisions on commercializing either system should be made on their separate
policy and financial merits, they feel.
Within the Working Group, there are divergent views on commercializing the
entire civil weather satellite program. Some see no insurmountable policy
barriers and urge prompt analyses (OMB Circular A-76) to determine relative
costs. Some suggest in-depth analyses of national security and international
policy issues, followed by A-76 studies if warranted. Still others, convinced
that these policy issues and complex program linkages are very significant,
oppose further considering commercialization of the civil weather satellite
systems at this time. They favor examining other alternatives to reduce the
Federal costs for weather satellite data, and the commercialization of portions
of the civil systems when it is cost effective to do so without raising serious
policy concerns.
The accompanying papers summarize the views of the Working Group on these
issues. The short summary papers are each supported by longer papers providing
additional analytical detail.
Attachments
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I.
CABINET COUNCIL INFORMATION MEMORANDUM
I. Subject: Private Sector Transfer of the LANDSAT Activities
II. Originator: Working Group of Cabinet Council on Commerce and Trade
III. Date: March 1, 1982
IV. Issue: Additional information on LANDSAT benefits, costs, and financing
requested by the Cabinet Council on December 16, 1981
Introduction
On December 16, 1981, the Cabinet Council on Commerce and Trade (CCCT),
requested additional information on benefits, required private sector
investment, and the magnitude of an enhanced Federal commitment for continuing
U.S. satellite land remote sensing technology. Working Group advice was also
solicited on methods of budgeting an enhanced Federal commitment, if such a com-
mitment is made. This analysis provides the requested information and also
addresses other matters pertinent to the commercialization process.
Benefits of Satellite Remote Sensing
It is not now possible to quantify the benefits from this U.S. space
technology. Three benefit studies conducted over the past ten years by repu-
table firms have projected benefits ranging from as little as $130 million to as
much as $10 billion per year starting as early as 1985. Contractor assumptions
on technological maturity, and the way in which the market would respond to new
or improved information have opened each of these studies to debate. However,
the studies indicate that national economic benefits of continuing and improving
land remote sensing from space exist.
Many segments of the U.S. economy stand to capture these benefits, but
mechanisms do not exist for them to accrue to the satellite operator. The
United States policy of public non-discriminatory access to civil land remote
sensing data precludes the private sector from treating the data as proprietary
and thereby exploiting the derived information as a means of financing a
satellite system. Therefore it appears that the only way to assure continued
U.S. civil land remote sensing is to continue some Federal support of a commer-
cial program. By this action, we will not only assure the non-capturable
tangible benefits, but also reap intangible benefits.
Among the most significant intangible benefits are:
o Improved information derivable from Landsat data analysis largely in
conjunction with other data sources increases the President's flexibi-
lity in strategic deliberations and establishing foreign policy. (See
attached classified Annex for additional information.)
o U.S. policies which have muted efforts in the United Nations to restrict
civil satellite remote sensing can be continued to the benefit of U.S.
civil and national security activities in space.
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o The U.S. government and industry will avoid depending on foreign owned
satellite systems as a source of important data. U.S. users will not be
bound by agreements on the prior consent of the sensed nations that
foreign satellite operators may negotiate. Areas of U.S. interest will
not be identified through data purchases from foreign owned satellite
systems.
Private Sector Investment and The Federal Contribution Needed
The amount of the required private sector investment cannot yet be deter-
mined because of a lack of specific proposals.* Capital costs will vary
depending on a number of technical and marketing decisions and strategies, and
on the data distribution policies to be followed. In NOAA's judgment, a reaso-
nable estimate of the required investment is between $600 and $900 million.
Depending on what proposals might be made by the private sector, annual Federal
support of between $40M and $100M will probably be required to encourage this
level of investment. An enhanced commitment would have budget implications,
probably starting in FY 1984 or 1985, and extending for five or ten years
thereafter. New budget authority will be required for the agency having the
responsibility to negotiate with the private sector.
THE URGENT NEED FOR ACTION IF CONTINUITY IS TO BE MAINTAINED
If both the Landsat D and D' satellites perform as hoped, U.S. land remote
sensing capabilities will continue through about mid-1988. However, continuity
of service through 1987 is a goal, not a certainty. Without prompt action, con-
tinuity of U.S. civil services will probably be interrupted after 1987, because
of the time needed for legislation, selection of owner/operator and launching
new satellites. At best, it is unlikely that commercial services from a new
series of satellites could be available before 1988 or 1989.
To assure continuity of U.S. civil data services and retain U.S. leadership
in this civil space technology, there are two actions that should be taken:
1. The Department of Commerce (DOC) should submit required legislation to
the Congress as soon as possible. While Congressional action proceeds,
the DOC should begin the competitive selection process.
2. The government should immediately start fabrication of a follow-on
satellite Which either could be launched upon failure of Landsat D' or
transferred to the private sector along with the other Landsat assets.
Initial procurements cannot be deferred until FY 1984, thus requiring
a supplemental appropriation of between $154 and $25M in FY 1983.
*Communications from the COMSAT Corporation contain no detailed information on
the land remote sensing program.
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CABINET COUNCIL DECISIONS/CONCURRENCES
Regardless of whether or not continuation of U.S. civil land remote sensing
beyond the presently approved Landsat satellites is agreed to, the Cabinet
Council should concur that the Secretary of Commerce should proceed to transfer
the Landsat program to the private sector as soon as possible and initiate
necessary legislation to accomplish the following: supervision and regulation
of private sector activities consistent with the Administration policies and
applicable laws; representation of the interests of the Federal users in nego-
tiations with the private owner/operator for data services to meet common data
needs; and management of the Landsat program until it is transferred to the pri-
vate sector. It should concur that during the process described above, issues
that cannot be resolved by the interagency Program Board on Civil Operational
Land Remote Sensing from Space will be submitted to the Cabinet Council for
resolution.
The Cabinet Council should determine if the continuation of U.S. civil land
remote sensing from space beyond the lifetime of Landsat D and D' is in the
national interest, and should be provided by future commercial services.
If these decisions are made affirmatively, the CCCT must determine the
level of funding required to assure this commitment by selecting one of the two
options discussed in the December 14, 1981 Decision Memorandum:
Option 1 - The Federal commitment would be limited to data purchases on
the order of $15 to $20 million per year from the budgets of
the user agencies. In the future agencies could allocate addi-
tional resources within overall budgetary allowances.
Option 2
The Federal commitment would include the above Federal data
purchase plus other forms of direct support to encourage
investment. Support could include transfer of the Landsat
assets, "free" government services, subsidy payments, loan
guarantees, or other financial arrangements.
The Departments of Agriculture, Interior, Defense, State, and Commerce
and the Director of Central Intelligence recommend an enhanced Federal
commitment. They do not believe that the minimum level commitment is sufficient
to create a viable land remote sensing program in the U.S. private sector.
The Office of Management and Budget, the Office of Science and Technology
Policy and the National Security Council staff recommend the minimum Federal
commitment specified in Option 1. They believe that the real market value of
Landsat can best be determined by free market forces (i.e., by the private
sector's willingness to make the required investments in a commercial venture
without a Federal subsidy).
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