TRANSFER OF THE CIVIL SPACE REMOTE SENSING SYSTEMS TO THE PRIVATE SECTOR

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85M00363R001102400023-3
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 5
• Document Creation Date: December 20, 2016
• Document Release Date: September 13, 2007
• Sequence Number: 23
• Content Type: MEMO

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THE WHITE HOUSE
MEMORANDUM FOR THE PRESIDENT
FROM: THE CABINET COUNCIL ON COMMERCE AND TRADE'
SUBJECT: Transfer of the Civil Space Remote Sensing Systems
to the Private Sector
Issue
Should the Administration transfer to the private sector the
civil operational land and weather satellite systems?
Background
The current U.S. program in operational civil space remote
sensing consists of a single land satellite and 'four operational
weather satellites in orbit. Civil ocean observing satellites
have demonstrated their utility also, although there are no
operational systems currently in place. A number of private
entities have expressed interest in assuming responsibility for
portions of the civil space remote sensing system. Some firms
are interested in the land satellite systems; another is
interested. in both the land and weather satellite-systems.
Foreign governments have recognized the value of this technology.
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. To date, only France
has actually invested in a land remote sensing system (SPOT);
others have invested only in weather systems.
All agencies - believe- t~iat - self'supporting, successful private
ventures could evolve in the land and weather sensing markets;
However, the time required for this process, as well as the
potential size and characteristics of the market, once evolved,
are uncertain. The' Government provides a steady market for
weather data. The value of land satellite data to the U.S.
Government has not been rigorously established. Federal user
agencies have been happy to use data now provided at subsidized
costs, but, if required to pay the full cost of land satellite
data, they indicate an intention to consider other means to meet
their needs. Therefore, to avoid discriminating against
economically desirable alternatives, the Federal Government
should allow agencies to choose the most cost-effective means of
obtaining data.
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other than Federal users, the land satellite data market has not
grown as rapidly as it could have because of the inherent
limitations on the Government in developing domestic and
international markets. The market for land remote sensing data
will have to be further developed. If given the opportunity, an
aggressive private sector operation could expand the market base
for this product.
The U.S. Government is currently spending more than $14 billion
per year on the civil and national defense-space programs, of
which nominally $150-$200 million is'devoted.to civil space
remote sensing. The Administration's current budget includes
funding for the long term operation and replacement of the civil
weather satellite. For land remote sensing, the current policy
is to continue with the two land satellites which were purchased
prior to this Administration and are expected to last until 1988.
Thus, the budget has only operating costs and does not include
additional Federal funding to procure additional land satellites.
The budget assumes that any future land remote sensing'systems
would have to be developed, launched, and operated by a private
entity. Current budget projections do not include funding for
development and implementation of expanded uses'of data generated
by land satellite programs.
The United States has created this high-technology field, but.it
could lose its leadership position'in land remote sensing unless
action is taken to preserve it. It-should be noted, though, that
NASA and DOD are heavily committed to R&D in this field. Also,
some private U.S. firms have expressed strong interest in
enterin_g_the-field frny action taken to transfer civil'space
demote sensing to the private sector should in no way preclude=
the continuation of R&D in NASA and DOD -to advance remote sensing
(technology,
Transfer to a private entity without any government assurances
would be preferable and will be actively sought. However,
Fimplementing a commercial satellite system may involve some form
f Government-assured market for a guaranteed
minimum purchase agreement,----until-the private entity is _firmly
established. The level of need for such support, if any, will be
considered carefully in the evaluation of proposals actually
submitted. Such support could cerise future budget outlays by as
much as i$150 million per year., in 1983 dollars, above current
-budget projections.
Federal interests will require a continuing oversight to any
private entity involved in civil space remote sensing, as
outlined by existing international law, national law and current
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national space policy. Such oversight, carried out with
interagency coordination and contractual rovis ions between the
Government and the data supplier 111 assure that national
18ef-ens se ntelligence, and foreign relations concerns are,
The Cabinet Council on Commerce and Trade has extensively
reviewed the issue and has identified two principal options for
your consideration:
Option 1: Transfer to the private sector, by competitive
means, the current operational civil remote sensing satellites.
Separate bids would be accepted for the land or weather
satellites, or a firm could elect to submit a single bid for all
systems, any mix thereof, or any part of a -single systems.
The Department of Commerce will oversee the transfer of the civil
operational remote sensing satellites to the U.S. private sector
as soon as possible. The selection of the private entity would
occur under conditions of competition among U.S. firms only. The
transfer will be guided by the following principles:
(1)ationa3 .se~ur ~T -forte-1c=co~iees must be
appropriately addressed in preparing Xegislation,
requesting proposals, and overseeing the private entity-
or entities.
(2) The selection of the private entity would occur under
competitive conditions. Private firms would have the
option of bidding separately for the land or weather
satellite system or preparing a joint submission for
both. The financial and program justifications would
be presented in such a manner that separate submissions
can be appropriately compared to joint submissions.
(3) The Department of Commerce would establish an-------
nteir-agency coordinating' body as soon as possible .
The results of the competitive bidding will be evaluated and,
should that evaluation determine that it would be in the best
interest of the USG to effect the transfer, we will make a final
recommendation for your consideration.
Advantages
o Stimulates technology development by the private sector
in response to new market demands and expands the role of
private industry.
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o Demonstrates commitment to the private sector role in
space.
o Reduces the size and scope of Government activities.
o Increases the probability that information flows from
land satellites will continue.
Disadvantages
o May require maintaining Federal funding to cover minimum
purchase commitments by the Government, until the private
entity is firmly established..
o There is a possibility that a new regulatory structure
would be required.
Option 2: Continue the current budget policy of bringing the
operational land remote sensing systems in the Government to a
close nominally by 1988 (or sooner if private industry is willing
to take it over) and retain the civil.weather satellites under
Government control.
Advantage
o option is within current budget. .
Disadvantages
o only minimally reduces the size and scope of Government.
o May result in the relinquishment of land remote
sensing to foreign competitors by U.S..
Option 1 Transfer to the private sector, via competitive
means the current operational civil weather and
land satellites. Separate bids would be
permitted for the land or weather satellites,
or a firm could elect to submit a single bid
for all.
Option 1 unanimously supported by the Cabinet
Council on Commerce and Trade
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the operational land remote sensing systems in
= sooner if private industry is willing to take
it over, and retain the civil weather
satellites under. Government control.
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4M 2 Continue the current budget policy of bringing
Malcolm BaldrigeiChairman Pro Tempore
Cabinet Council on Commerce and Trade
STAT