Shift in Military Thinking for Commercial Bandwidth Leasing?

A crisis is a terrible thing to waste, as the old saying goes. The current budgetary climate for military operations and the threat of sequestration can certainly be seen as a crisis.

But a crisis is also an opportunity to rethink old processes and approach things differently. If you’ve been reading the satellite trades lately, that’s just what the Pentagon has been doing vis-à-vis leasing commercial satellite bandwidth.

Space News and C4ISR Journal have published in-depth stories in the past week about the U.S. military looking at new ways to procure commercial SATCOM in more innovative and efficient ways. Officials such as Frank Kendall, Undersecretary of Defense for Acquisition, Technology and Logistics, and Ashton Carter, Deputy Defense Secretary, have voiced public support for clarifying the role of commercial providers in feeding the military’s insatiable need for satellite bandwidth.

The stakes are very high, as are the potential savings. According to the C4ISR article, the military demand for SATCOM is expected to rise 74 percent in the next 10 years. Currently, over 80 percent of military satellite communications travels over commercial satellites, not military. The military insists on purchasing this bandwidth at the most expensive, spot market rates.

Incredibly, these costs aren’t even budgeted ahead of time. They are paid for out of contingency operational funds. According to C4ISR Journal, by simply moving to multi-year leases for bandwidth the military could save over 30 percent in SATCOM costs. Kay Sears of IGC spoke to Defense Daily on this point back in November:

“Intelsat General CEO Kay Sears told Defense Daily in November DoD’s spot market buying stunts industry’s growth because it doesn’t know where, nor when, to invest. Sears said spot market buying doesn’t give industry a signal as to how long it is going to need that capability and/or whether there are enhancements that are needed to that capability (Defense Daily, Nov. 29).”

Multi-year leasing is one of the final recommendations that has been released by the Defense Business Board, which was tasked with exploring how to more efficiently procure commercial bandwidth. Other recommendations include making better use of hosted payloads (which would get military capabilities to space much more quickly than the 10-20 years it now takes to design, launch and implement new government-owned satellite networks,) and the development of a commercial SATCOM plan in the 2014 Quadrennial Defense Review.

The government and the commercial sectors can’t squander this opportunity to define the proper working relationship. With the DoD’s announced pivot to the Asia Pacific region, there is less excess capacity with which to “muddle though” without a game plan. In fact, Kay Sears was quoted by C4ISR as saying:

“We estimate the Pacific region has roughly 25 percent of the available commercial satellite alternatives compared with the current conflict in southwest Asia, where over 20 satellites serve military and allied demand.”

Kay has written previously on this site about the need for a clearer role for commercial providers in supporting the warfighter. We hope what the trade publications are reporting is accurate, and that 2013 is the year this truly happens.

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