The Challenge and Opportunity of Reduced Defense Spending in Space

The government may well be entering an extended period of reduced spending in space-based communications, and a new space architecture that ensures continued American superiority has yet to be defined. That was the sobering message delivered by Intelsat General President Kay Sears at a Washington Space Business Roundtable event last week.

In her speech, Kay described the four major cycles in defense spending that the United States has been through since the end of WWII. With the planned withdrawal of American troops from Afghanistan next year, and the current budgetary climate on Capitol Hill, she used a chart to show that the nation is currently heading into a down cycle following a decade-long growth period that began with the Sept. 11, 2001, terrorist attacks.

Defense Spending Slide

American superiority in space-based communications networks is not as clear as it was during the first Gulf war. Other nations now have their own space capabilities, and many of our nation’s satellite constellations are in need of technological refreshes, she said.

In the current budgetary climate, the buzzwords heard most often are “affordability,” “portfolio optimization,” “resiliency” “disaggregated architectures” Kay told the audience that the commercial space industry welcomes this kind of attention to getting the most for the taxpayer dollar, since commercial providers have a proven track record of delivering value. A fiercely competitive commercial space market demands it.

However, she said that though government officials often use value buzzwords, the dialogue has been lacking on how commercial companies can help government customers reduce the costs of the next steps in space. Kay has written in the past about how government clients are processing the fact that budget realities have shifted.

She pointed to some positive steps, as shown by the recent completion of FCSA, a great improvement in the procurement process.

Kay called on the industry leaders to help the government define an affordable vision for an upgraded architecture in space. The commercial industry is ready for that conversation, provided there is honest dialogue on four important principles:

  • The reliance on commercial SATCOM bandwidth is a reality for at least the next 10-15 years.
  • U.S. superiority in space has been diminished.
  • Economic and budgetary realities compel both parties to look at innovative solutions.
  • A technical refresh is required, preferably as part of a new, holistic architecture for space communications.

As the expression goes, sometimes change doesn’t occur until you’ve hit rock bottom.  Reduced spending and continued American superiority in space are not mutually exclusive. But if we want both, government and industry need to establish a culture of collaboration and true partnership.