COMMENTS ON DECISION MEMORANDUM: TRANSFER OF CIVIL SPACE REMOTE SENSING SYSTEMS TO THE PRIVATE SECTOR

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85M00363R001102400022-4
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 14
• Document Creation Date: December 20, 2016
• Document Release Date: September 13, 2007
• Sequence Number: 22
• Publication Date: February 9, 1983
• Content Type: MEMO

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The Director of Central Intelligence
Washington. D.C. 20505
Intelligence Community Staff
DCI/ICS 83-4239
9 February 1983,
MEMORANDUM FOR: Becky Norton Dunlop
Director, Office of Cabinet Affairs
SUBJECT: Comments on Decision Memorandum: Transfer of Civil
Space Remote Sensing Systems to the Private Sector
1. We have reviewed the subject Decision Memorandum and agree that
national security concerns must be addressed as part of Option 1. We are
satisfied that the establishment of an interagency coordinating body will
provide us a forum to consider any security concerns as the private sector
involvement unfolds.
2. As you requested, we have provided, at attachment, specific
recommended changes to the Decision Memorandum.
Th
Eloise R.
Acting Director
Attachment:
a/s
UNCLASSIFIED
STAT
STAT
STAT
STAT
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COMMENTS ON
TRANSFER OF THE CIVIL SPACE REPORT SENSING
SYSTEMS TO THE PRIVATE SECTOR
o Background, third paragraph: Change first sentence to read:
All parties believe that it is possible that a self- -
supporting, successful private venture or ventures could
evolve. The length of time required for such a market to
develop is uncertain. The Government . . . .
Rationale: Accuracy
o Background, fourth paragraph: Change last sentence to read:
If an aggressive private sector is given the opportunity to
develop the market base for this product, it is possible that
this market could experience significant growth.
Rationale: Accuracy
o Background, eighth paragraph: Revise as follows:
The Cabinet Council on Commerce and Trade has conducted an
extensive review of the issue. This included a formal request
to industry for information, the results of which were
reviewed by two advisory committees, one from the concerned
Federal agencies and one from the private sector.
Collectively, these reviews raised some concerns about the
near term viability of proceeding with commercialization at
this time. Summaries are attached. The Cabinet Council on
Commerce and Trade has identified two principal options for
your consideration:
Rationale: Completeness. The President should have the
benefit of the Advisory Committee perspectives on
this important issue. Copies of the above
referenced summaries are at Attachment 2.
o Option 1: Modify paragraph (1) as follow:
National security and foreign policy concerns must be
appropriately addressed in preparing legislation, requesting
.proposals, and overseeing the private entity or entities.
Rationale: Protecting national security interests is
mandatory.
UNCLASSIFIED
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0 Option 1: Modify (2) and (3) as follows:
Change would in line one in each instance to must.
Rationale: Consistency with previous recommendation.
o Option 1: Modify (2) second, sentence as follows:
Private firms would have the option of bidding separately for
the land or weather satellite system (or portions thereof) or
preparing a joint submission for both.
Rationale: Many of the industry respondents expressed an
interest in bidding on only part of the system.
o Option 1: Add the following Disadvantage:
o Sensor improvements and technology developments could lead to
systems that would heighten national security concerns.
Rationale: As technology advances, improved system
resolutions could be achieved resulting in
products of significant intelligence utility to
other countries, including those hostile to the
US.
o After presentation of Option 1 and Option 2, insert the following:
If Option 1 is chosen, the results of the competitive bid
procedure will be provided for your review prior to a final
decision or selection.
Rationale: Ensures that the President and the using
organizations are provided a firm understanding of
the cost implications of the decision.
UNCLASSIFIED
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SUBJECT: Comments on Decision Memorandum: Transf Civil Space Remote
Sensing Systems to the Private Sector
Distribution (DCI/ICS 83-4239):
Original - Addressee
1 - AD/ICS
1 - C/COMIRE
1 - CIA/CRES
1
1 - PPS Chrono
1 - PPS Subject
1 - ICS Registry
DCI/ICS/PPS
18 February 1983)
STAT
STAT
STAT
STAT
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(Excerpt from Land Remote Sensing Satellite
Advisory Committee Recommendations, 18 Nov 82
THE COMMITTEE BELIEVES, WITHOUT RESERVATION, THAT THE U.S.
GOVERNMENT MUST COMMIT ITSELF IN THE BEST INTEREST OF THE NATION TO
THE CONTINUITY OF A GOVERNMENTAL AND/OR PRIVATE SECTOR CIVIL LAND
REMOTE SENSING SYSTEM. THIS CONVICTION STEMS NOT ONLY FROM THE ROLE
REMOTE SENSING TECHNOLOGY WILL PLAY IN ENHANCING THE ECONOMIC BASE OF
THE COUNTRY BUT ALSO FROM THE PERVASIVE INFLUENCE SUCH INFORMATION
WILL HAVE ON IMPROVING THE FUTURE QUALITY OF LIFE ON EARTH.
THEREFORE, WE RECOMMEND THAT:
1) THE GOVERNMENT OF THE UNITED STATES WILL ATTEMPT TO NEGOTIATE
AN ARRANGEMENT WITH PRIVATE INDUSTRY TO OWN AND/OR OPERATE UNDER
CONTRACT SPECIFIED SPACE AND GROUND SEGMENTS, UP TO AND INCLUDING
ONLY ARCHIVING OF RAW UNPROCESSED DATA, OF THE LAND SATELLITE SYSTEM
BY ITSELF, OR BOTH THE METEOROLOGICAL AND LAND SATELLITE SYSTEMS.
2) THE GOVERNMENT OF THE UNITED STATES WILL MAKE A FIRM, LONG
RANGE COMMITMENT TO CONTINUE TO PROVIDE OR CAUSE TO BE PROVIDED
VIABLE R&D PROGRAMS ON BOTH THE LAND AND METEOROLOGICAL SATELLITE
PROJECTS.
3) THE REQUIREMENT BE MADE THAT THE OPERATOR, WHETHER IT BE
THE GOVERNMENT AND/OR THE PRIVATE SECTOR, SUBSCRIBE TO THE OPEN SKY
POLICY - WHICH PRIMARILY MEANS THAT ANYONE, ANYWHERE, IN ANY COUNTRY
CAN PURCHASE THE DATA AT EQUITABLE PRICES.
4) ALL NECESSARY LEGISLATION AND APPROPRIATIONS BE ENACTED
AI-ON-CE TO IMPLEMENT THESE RECOMMENDATIONS.
THE LAND REMOTE SENSING SATELLITE ADVISORY COMMITTEE UNANIMOUSL'
ENDORSES THIS REPORT AND ITS RECOMMENDATIONS AND OFFERS ITS
CONTINUED ASSISTANCE TO SECRETARY RALDRIGE IN'THE IMPLEMENTATION
OF THIS REPORT.
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FINAL IRECOJ?'J MEN'DAT I ONS
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S 1 OF FINDINGS OF WORKING GROUP ON COMMERCIALIZATION
Members of the Working Group were in unanimous agreement that commerciali-
zation of activities within the Government which were not inherently govern-rental
should enhance the development of the econanic base of the country. Such
ccnirnrcialization should also lead to expanded tax revenues and introduction of
better operational systems because the needs of the marketplace should drive the
requirements for current technology. It was generally felt that cazrnerciali-
zation should be accomplished in the envirorinent of an open marketplace which
encourages free enterprise and healthy competition on both a domestic and inter-
national scale.
The majority of the responses indicated that caaTercializiation should occur
gradually beginning with the ground data handling segment of the land re,note
sensing system. All responses indicated that the market for land re T%Dte secs i_-sg
data was not developed to a point where commercial viability could be
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demonstrated within the next ten years. Generally most respondents felt that
designation of a sole operator, which would have exclusive and proprietary
rights to the data from acquisition to delivery to users, under conditions of
guaranteed subsidy and guaranteed tax incentives would severely limit the
degree of natural market development. The Working Group also felt it was
absolutely essential to get the Goverment out of those elements of land remote
sensing which affect the market directly. Specifically those elements involve
services to: 1) convert raw data into images in computer compatible tape and
film product foam; 2) enhance, process and analyze image data; and 3) distribute
image data to non-government users.
International competition in civil rat to sensing was regarded as healthy,
however the Working Group felt that it was important to recognize that the most
serious foreign corpetitors in the data market (France gLnd Japan) write off the
costs for operation of their space segments in the hope that the activities of
their ground segments will lead to new information technologies that will
rapidly enhance growth and development of their economies. For this reason it
is doubtful that a United States c cii ercial venture, which recovers the costs
for operation of the space segment, will be able to canpete on a international
basis without Govern-pant support. The Working Group also recognized that
foreign competitors also write off aggressive research and development efforts
within their gove . , nt as investments in their economic future. Serious con-
cern was expressed by mem-' ers of the Working Group that the responses only pr-
posed very conservative, proven technologies for new systems to be utilized in
the next dec,--de.
Concern was expressed by r rrSars of the Working Group that the Govern nt
must acgressively suTport remote sensing research of a fundamental, high-risk
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and longer term nature, because such research in development of advance tech-
nology will not be done by industry. Industry will focus on applied, law-risk
and short-tern research to improve profitability using current, proven tech-
nology. A program board was suggested as a means for evaluation requirements
for research within the Government with respect to the needs for advanced tech-
nologies.
The matter of cannercialization of weather satellites was carefully analyzed
in the light of the responses. The Working Group concluded that there was only a
small carnercial opportunity associated with weather satellites because the
Government is the almost sole user of data produced by them. Therefore the
weather satellite systems were judged to be inherently governmental. A large
market for weather satellite data might be developed, but the National Weather
Service would have to be commercialized before it can be tapped. Members of the
Working Group also concluded that there would be a greater efficiency by
managing both the land and weather satellite systems as an entity. Qom=
satellite conrnand and control, ccrrn n data reception, and cannon raw data
recording and archiving facilities could be utilized. Weather data could be
used to target land data acquisition and to correct land data for atmopsheric
effects. The issue of the degree of savings to the Government for ccnbined
operation of land and weather systems could not be quantified by the W rking
Group. We felt that the issue should be more appropriately improved products
and services and therefore a more ccnretitive system for the international
marketplace.
On the basis of the responses, we concluded that major canrercial oppor-
tunities exist in the value-ad d portion of civil land re-mte sensing. One of
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the reasons that market development has been inhibited is that the Government
has extended its activities in those areas of data management that are non-
governmental and the GoverrIInent has managed the ground segment in an experimental
rather than operational mode... Specifically the Government has developed the
system to support the needs of scientific investigators rather than user appli-
cators. Thematic Mapper data are vital for market development. The current
lack of availability of Landsat-4 data is testimony to the problem. Cn the
basis of the responses there appears to be industrial interest in receiving land
satellite data directly, and distributing such data in near real time to users.
Although there is a perceived need to have data archived in raw form and also to
provide the Government with near real-time data, the Working Group felt the corn--
mercial sector should also be permitted to have direct access to the dowry-linked
Government data stream. Access to this Government data stream should be permitted
on a cost reimbursable basis. The Working Group concluded that value-added
industries should be allowed to develop pre-processing services that would for-
mat raw data to images in film and computer compatible tape (CCT) form. Users
having a need for raw, unprocessed data should be allowed to obtain copies of
such data directly. Users having a processing and analysis capability could
order film and CCT data directly from such value-added industries, or those
lacking a level of sophistication in image processing could also request addi-
tional services (Attachment 6).
The Working Group also recognized that there would be an efficiency in
management that would derive from operation of the space secant by a sole
entity. Certainly a hand-off to the Department of Defense in tines of emergency
would be facilitated. However, the Working Group felt that it was not clear
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that a hand-off of the ownership and management of the space segment to an
industrial entity would lead to increased profit, opportur~i. pis for the aerospace
industry. On the basis of the majority of the responses the Working Group
concluded that if a sole entity is selected to operate the space segment its
span of control over the data should only extend to the raw, unprocessed data.
Secondly, the Working Group concluded that if Government facilities are utilized
in any manner, or a Government subsidy is provided, such raw data should be
placed into a National archive in the public domain. The sole entity operating
the space segment should not be allowed to compete unfairly with the value-added
industry in furnishing processed and analyzed data to users. At the sxne time
there was a concern that the market must drive data acquisition technology, data
acquisition plans, etc., if commercialization is to succeed. It was concluded
that a review board should be formed to reconcile the differences between market
requirements generated by users, the needs of the value-added industry and the
needs for new efficient data collection technology.
Several responses indicated a desire to fly their own specialized sensors
and have proprietary rights to the data provided by such sensors. Because there
is not market which could support such a possibility in the near term (the next
10 years) the Working Group felt the Government could stimulate commercial
opportunities of this kind by providing launch services and/or access to
satellite platforms in the near term. If public monies are used, then data so
acquired could be placed into the public domain, but the Government should not
be allowed to distribute such data, except for its own internal use.
Finally, with respect to a specific response proposing hand over of both the
weather and land satellite system, the 1}brking Group concluded that natural (as
opposed to subsidized) commercialization would be adversely affected if a sole
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entity was given proprietary rights to the data and had control over the data to
include value-added services and d?r= .;istrioution to users. The Working Group
concluded that if the operation of the w ather and 1an3 satellites is handed off
to a single industrial entity, that control over the data thould only extend to
raw, unprocessed data that is archived in a National facility.
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Iu nurcuiucl 1we
Report of the Government Technical Review Panel
on Industry Responses on Commercialization of
the Civil Remote Sensing Systems.
1. OVERVIEW
The panel convened on 26 October and reviewed fourteen responses to the
Request for Information that appeared in the Commerce Business Daily (CBD) on
September 10, 1982. No attempt was made to solicit additional information or
clarification from respondents.
The responses varied in scope and sophistication from a handwritten
postcard to a fairly comprehensive, all inclusive submission. Criteria for
evaluation could not, therefore, be applied uniformly to all proposals.
However, the following general criteria were used, as applicable:
.(1) Responsiveness to federal needs;
(2) Continuity of data services;
(3) Feasibility; and
(4) National security and foreign policy concerns.
Responses were grouped into four (4) natural categories reflective of
their basic thrust:
(1) Those favoring near-term connercialization of existing civil remute
sensing capabilities, entirely or in part.
(2) Those espousing independent entrepreneurial interests and advocating
a climate conducive to free market competition.
(3) Those favoring government retention of the existing system, at least
for the immediate future.
(4) Other.
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II, SUMMARY AND OBSERVATIONS
It could fairly be stated that a simple evaluation of responses to the
RFI would fulfill the charter of this panel and that further comment is
gratuitous. Nonetheless, our study of this issue and the responses produced
a consensus which we would be remiss not to surface.
Insofar as the responses are positive toward the issue of commercializa-
tion, they tend to assert rather than demonstrate an ability to satisfy
whatever criteria we might establish. Nonetheless, the panel harbors significant
doubt as to whether all U.S. government interests could be satisfactorily
protected if the approach is simply to substitute one monopolistic organization
for another. Perhaps, it will take an RFP to answer the toughest questions.
The RFI elicited more interest than might have been expected and surfaced
a strong body of opinion that urges restraint and caution in proceeding with
commercialization. There is an underlying theme con-non to the submissions from
several large, responsible, and knowledgeable entities that commercialization
now could inhibit the free market process. They suggest continued government
operation of the system while fostering an environment conducive to an expansion
of free enterprise activities.
One of the concerns which permeated our discussions of a non-government
monopoly environment, was the potential lack of vigor in the R&D effort and lack
of incentive to adopt improvements which may materialize. This has been the
case in the satellite communications field. It is our belief that the best
answer to the emerging foreign competition lies in the continuation of a dynamic
U.S. government R&D system.
It is also the belief of the panel that there is considerable financial,
policy and program risk to the government in cornercializing weather satellites
and that there is no clear policy or financial benefit to be realized. Too,
there is no clear consensus among the respondents as to the desirability or
feasibility of com_ercializing any of our civil remote sensing systems at this
time.
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Additionally, creation of a single, government-chartered, subsidized firm
for this purpose would seem antithetical to the underlying economic philosophy
of the United States and, in particular, this Administration, as we understand
it. If regulated, it would result in the creation of a 'utilityu without the
competitive incentives for reducing operating costs or increasing efficiency.
If unregulated, the chartered entity would tend to assume the characteristics
of a legislated monopoly.
Finally, the following general national security concerns exist in
commercialization of remote sensing from space even though not specifically
addressed in the individual evaluations: -
(1) There is some potential for military and intelligence application
of current data products, and
(2) with possible system improvement under private sector control these
concerns would increase.
(3) There are technology transfer issues which might be exacerbated if a
private sector operator became the world wide supplier of remote
sensing equipment and spares.
(4) Controls over data dissemination, and provision for DOD emergency use
would require very careful stipulation in any transfer of civil remote
sensing activities.
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