STATUS: TRANSFER OF CIVIL SPACE REMOTE SENSING TO THE PRIVATE SECTOR

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85M00363R001102400017-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 6
• Document Creation Date: December 20, 2016
• Document Release Date: September 13, 2007
• Sequence Number: 17
• Publication Date: March 4, 1983
• Content Type: MEMO

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ROUTING AND RECORD SHEET
SUBJECT: (Optional)
Status: Transfer of Civil Space Remote Sensing to the Private Sector
FROM.
EXTENSION
NO.
DCI/ICS 83-4256
Eloise R. Page, Deputy Director
Intelligence Community Staff
DATE 4 March 1983
TO: (Officer designation, room number, and
building)
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to whom. Draw a line across column after each comment.)
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DCI/ICS 83-4256
4 March 1983
MEMORANDUM FOR:
f Central Intelligence
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Director, Intelligence Community Staf
FROM: Miss Eloise R. Page
Deputy Director, Intelligence Community Staff
SUBJECT: Status: Transfer ofCivil Space Remote Sensing Systems to the
Private Sector
1. Purpose: To provide you a status report on the transfer of the civil
operational land and weather remote sensing satellites to the private sector
and convey our continuing concerns regarding this issue.
2. Action Requested: That you consider discussing the political and
national security implications with the President. F-1
3. Background/Status:
a. On 25 January 1983, Secretary Baldrige, in his role as Chairman,
Pro Tempore of the Cabinet Council on Commerce and Trade (CCCT), sent a
decision memorandum to the President regarding the transfer of the civil
space remote sensing systems to the private sector (Tab A). This
memorandum was to convey the results of the CCCT meeting of 15 December
1982. The CCCT decided that (1) the US Government should transfer both
systems, in a competitive process, as soon as possible; (2) National
Security (including intelligence) concerns can be accommodated; (3) a US
firm is mandatory; and (4) Commerce will oversee the process. Of note
was recognition of the need for a near-term enhanced Federal budget
commitment for these systems. The fundamental national security concerns
on commercialization were specified to Secretary Baldridge by the DCI and
the DepSecDef (Tab B and Tab C, respectively). Secretary Baldridge's
reply to the DCI (Tab D) noted that an interagency coordinating and
oversight body will be established at the Assistant Secretary level (non-
career appointees, to ensure that the group is thoroughly knowledgeable
in Administration policies).
b. The Commerce decision memorandum to the President did not
altogether accurately represent the commercialization issue and the CCCT
decision meeting. Subsequent to Commerce sending the memorandum to the
White House, the Office of Cabinet Affairs requested CCCT member
comments. Our proposed changes (Tab E) focused on:
This memorandum may be downgraded
to UNCLASSIFIED upon removal of
Tab C.
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National Security Implications: We specified a minimum set of
changes to make certain that national security concerns would be
accommodated consistent with your previously referenced memorandum
to Baldrige on 3 January 1983. If the President proceeds with the
commercialization, the Commerce-proposed establishment of an
interagency coordinating body should provide us the forum in which
to solve national security issues.
Accuracy: We inserted language to reflect accurately the views of
the Community on commercialization as gained through the work of the
two Commerce Advisory Committees--one from the concerned Federal
agencies and one from the private sector--and the decisions made at
the CCCT meeting in mid-December 1982. Of primary concern was
having the decision memorandum include the fact that there is
considerable uncertainty about the near-term viability of a market
for land remote sensing data. Similarly, there was uncertainty
regarding USG costs associated with commercialization. The Office
of the Under Secretary of Defense (Policy) and the Office of Science
and Technology Policy made similar comments.
Completeness: We added language to provide the Advisory Committees'
less than optimistic perspective on this issue, and the view that if
commercialization is chosen, the results of the competitive bid
procedure should be provided to the President for his review prior
to a final decision or selection. In this way, the President would
gain a firm understanding of the cost implications of the
decision.
c. On 25 February 1983, the Office of Cabinet Affairs circulated a
second draft of the decision memorandum (Tab F) which incorporated most
of our recommended changes. Accordingly, we have concurred in the
decision memorandum and we understand that it is on its way to the
President.
d. In parallel with commenting on the CCCT decision memorandum, we
have been preparing to participate in the CCCT interagency coordinating
and oversight body, e.g., in the drafting of the procurement
documentation. As part of these preparations, we are undertaking jointly
with the DoD a comprehensive review of civil remote sensing issues. We
have been advised that the Secretary of Defense may wish to discuss this
issue at a future breakfast meeting. When the item is scheduled, we will
provide yo h additional background on the joint efforts we are
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4. Concerns: The commercialization of both civil operational land and
weather satellite systems is proceeding apace. For some time we have had
concerns about the commercialization of these capabilities. However, in all
of the deliberations, we focused on those aspects within the DCI purview
(primarily national security). With a decision memorandum likely to go to the
President recommending that he proceed with commercialization, it may now be
appropriate to inform the President of our concerns and reservations. These
are:
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a. At present, CIA uses civil land remote sensing data, along with
a wide variety of human and other technical source
products to the CIA would likely increase with commercialization. CIA
envisages an increased importance of LANDSAT-type products in the latter
half of this decade, highlighting the need for and significance of
continuity of land remote sensing capabilities. From the CIA viewpoint,
commercialization of LANDSAT may be the only way of assuring the
availability of such products because no land remote sensing capabilities
are currently budgeted after LANDSAT's termination in 1988.
b. We are concerned that commercialization of the weather
satellites may impede and unnecessarily complicate satisfaction of the
worldwide national security weather support requirements. Their
product--along with data collected by DoD weather satellites and data
provided by foreign entities--is an integral part of an international
free exchange of weather information.
c. The Government Advisory Committees surfaced these points:
- There is a strong body of opinion that urges restraint and caution
in proceeding with commercialization. The Decision Memorandum
points out that implementing a commercial satellite system may
involve some form of Government-assured market for a time. The
level of need for such support, if any, could raise future budget
outlays by as much as $150 million per year above current budget
projections;
- A monopoly environment may cause a potential lack of vigor in the
R&D effort and lack of incentive to adopt improvements which may
materialize. This situation would be counter to the
Administration's policy of maintaining space leadership which
implies continuation of remote sensing activities without
interruption, and a vigorous and healthy R&D program. Government
subsidization of the private sector would therefore seem inevitable
if US leadership is to be maintained;
- Commercialization into a monopoly at this time could inhibit the
free market process. Designation of a sole operator, which would
have exclusive and proprietary rights to the data from acquisition
to delivery under conditions of guaranteed subsidy and guaranteed
tax incentives, would severely limit the degree of natural market
development. This is antithetical to the underlying economic
philosophy of the US and this Administration;
- The market for land remote sensing data has not developed to a point
where commercial viability could be demonstrated within the next ten
years;
The most serious potential foreign competitors in the data market
(France and Japan plan to write off the costs for operation, thus
making it doubtful that a US commercial venture would be able to
compete internationally without government support; and
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There is considerable financial, policy, and program risk to the
Federal Government in commercializing weather satellites with no
clear policy or financial benefit to be realized. There is only a
small commercial opportunity because the go ment is the
preponderant user of data produced by them._______________
d. National Security-related concerns include:
There are intelligence applications of current data products as has
long been demonstrated by CIA and more recently by DIA.
LANDSAT could provide foreign governments who do not already possess
a photographic reconnaissance system the means for obtaining
intelligence information from space. Systems improvements proposed
under private sector control could increase national security
concerns; and
There are technology transfer issues which might be exacerbated if a
private sector operator became the worldwide supplier of remote
sensing equipment.
e. Aside from the national security issues, there is a concern that
by proceeding with the commercialization of both LANDSAT and METSAT as
now proposed, the President could find himself in a politically
embarrassing situation. He would be open to-public and Congressional
criticism if no significant advantage can be cited--lessened government
involvement and reduced government fiscal outlays. The transfer could be
perceived as a give-away which is the essence of an article by
16 e ruar 1983 (Tab G), and as was portrayed in a WRC-TV news broadcast
by on 17 February 1983.
5. Recommendation: The Presidential decision being requested at this
time does not appear to be the final one, but it does commit the USG to a
process that will have considerable momentum toward an enhanced private sector
role. You may therefore wish to consider informally conveying our concerns to
the President before he acts on the decision memorandum. It seems appropriate
to advise him to proceed with caution. He should require the CCCT to conduct
thorough analysis of the competitive bids and all fiscal, policy and national
security implications. If you decide to raise the issue with the President,
1.1%
suggested talking points are provided at Tab H.
Attachments: a/s
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SLLKEI
SUBJECT: Status: Transfer of Civil Space Remote Sensing Systems to the
Private Sector
Distribution: DCI/ICS 83-4256
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