Order Code IB93062
CRS Issue Brief for Congress
Received through the CRS Web
Space Launch Vehicles:
Government Activities,
Commercial Competition,
and Satellite Exports
Updated June 25, 2004
Marcia S. Smith
Resources, Science, and Industry Division
Congressional Research Service ˜ The Library of Congress

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CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
U.S. Launch Vehicle Policy
From “Shuttle-Only” to “Mixed Fleet”
Clinton Administration Policy
George W. Bush Administration Policy
U.S. Launch Vehicle Programs and Issues
NASA’s Space Shuttle Program
NASA’s Efforts to Develop New Reusable Launch Vehicles (RLVs)
DOD’s Evolved Expendable Launch Vehicle (EELV) Program
Private Sector Launch RLV Development Efforts
U.S. Commercial Launch Services Industry
Congressional Interest
Foreign Launch Competition
Europe
China
Russia
Ukraine
India
Japan
Satellite Exports: Agency Jurisdiction and Other Issues
LEGISLATION
For more information on the space shuttle program, see:
CRS Report RS21408, NASA’s Space Shuttle Columbia: Quick Facts and Issues for
Congress
CRS Report RS21606, NASA’s Space Shuttle Columbia: Synopsis of the Report of the
Columbia Accident Investigation Board
CRS Report RS21411, NASA’s Space Shuttle Program: Space Shuttle Appropriations
FY1992-FY2002
CRS Report RS21419, NASA’s Space Shuttle Program: Excerpts from Recent Reports and
Hearings Regarding Shuttle Safety

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Space Launch Vehicles: Government Activities, Commercial
Competition, and Satellite Exports
SUMMARY
Launching satellites into orbit, once the
build them (Lockheed Martin and Boeing)
exclusive domain of the U.S. and Soviet
want more DOD funding to defray their costs
governments, today is an industry in which
in the wake of lower commercial demand.
companies in the United States, Europe,
China, Russia, Ukraine, Japan, and India
On February 1, 2003, NASA’s space
compete. In the United States, the National
shuttle Columbia broke apart as it descended
Aeronautics and Space Administration
from orbit, killing all seven astronauts aboard.
(NASA) continues to be responsible for
NASA hopes the shuttle will return to flight in
launches of its space shuttle, and the Air Force
spring 2005. On January 14, 2004, President
has responsibility for launches associated with
Bush announced new exploration goals for
U.S. military and intelligence satellites, but all
NASA (see CRS Report RS21720), which
other launches are conducted by private sector
include retiring the shuttle in 2010 after space
companies. Since the early 1980s, Congress
station construction is complete. NASA
and successive Administrations have taken
would build a new Crew Exploration Vehicle
actions, including passage of several laws, to
to take astronauts to the Moon, but NASA
facilitate the U.S. commercial space launch
plans to launch it on an EELV, not a new
services business. The Federal Aviation
launch vehicle. NASA’s FY2004-2020 pro-
Administration (FAA) regulates the industry.
jected funding chart includes funding (starting
in FY2011) for a new “heavy lift” launch
Forecasts in the 1990s suggesting signifi-
vehicle, but NASA officials say that they do
cant increases in launch demand sparked plans
not know yet if they will need such a vehicle
to develop new launch vehicles. NASA and
the Department of Defense (DOD) created
Commercial human space flight took a
government-industry partnerships to develop
step forward on June 21, 2004, when Mike
new reusable launch vehicles (RLVs) and
Melvill became the first person to reach space
“evolved” expendable launch vehicles
(on a suborbital flight) on a privately funded
(EELVs), respectively. The primary goal was
launch vehicle, SpaceShipOne.
to reduce launch costs. (The U.S. space shut-
tle is the only RLV today. All other launch
Concerns that China benefitted militarily
vehicles are expendable — they can only be
from knowledge gained through commercial
used once). Several U.S. private sector com-
satellite launches in the 1990s led to changes
panies began developing their own launch
in U.S. satellite export policy, and satellite
vehicles, though some sought government
exports to China have not been approved in
loan guarantees or tax incentives.
recent years. The changes to U.S. satellite
export policy, especially returning control
Since 1999, projections for launch ser-
over such exports to the State Department
vices demand have declined dramatically,
from the Commerce Department, remain
however, complicating private sector efforts to
controversial in terms of what some claim has
obtain financing. NASA’s efforts to develop
been a negative impact on U.S. satellite
a new RLV to replace the shuttle faltered.
manufacturing companies whose clients may
DOD’s new EELVs (Atlas 5 and Delta 4)
choose European suppliers in order to avoid
have begun service, but the companies that
the U.S. export control regulations.
Congressional Research Service ˜ The Library of Congress

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MOST RECENT DEVELOPMENTS
NASA’s space shuttle fleet remains grounded following the February 1, 2003 Columbia
accident (see CRS Report RS21408). The target date for returning the shuttle to flight is
March/April 2005. NASA is requesting $4.3 billion for the shuttle in FY2005, out of a total
request of $16.2 billion. Congress appropriated $4 billion for the shuttle program in FY2004
(as requested). NASA’s FY2005 budget request reflects President Bush’s proposal for
NASA to embark upon a new exploration initiative to return humans to the Moon in the
2015-2020 time frame, and ultimately go on to Mars and “worlds beyond.” Under the plan,
NASA would retire the shuttle fleet in 2010, and is terminating the Space Launch Initiative
program that was, inter alia, developing new launch vehicle technologies. NASA has not
decided if it needs a new launch vehicle to accomplish the President’s goals. Senator
McCain introduced a FY2005-2009 NASA authorization bill on June 17 (S. 2541).
For FY2005, DOD is requesting $611 million for procurement of Evolved Expendable
Launch Vehicles (EELVs), and $27 million for EELV R&D. The House and Senate versions
of the FY2005 DOD authorization bill (H.R. 4200/S. 2400), and the Senate version of the
FY2005 DOD appropriations bill (S. 2559), reduce the EELV request by $100 million
because one launch (SBIRS-High) has been delayed by a year. The House version of the
appropriations bill (H.R. 4613) transfers $91 million from EELV into SBIRS-High, stating
that the Air Force requested that action. The House Appropriations Committee’s report
(H.Rept. 108-553) directs DOD to study whether both EELVs are really needed.
On June 21, 2004, Mike Melvill became the first person to reach space (on a suborbital
flight) aboard a privately funded launch vehicle, SpaceShipOne.
BACKGROUND AND ANALYSIS
U.S. Launch Vehicle Policy
The National Aeronautics and Space Administration (NASA) and the Department of
Defense (DOD) have each developed expendable launch vehicles (ELVs) to satisfy their
requirements. NASA also developed the partially reusable space shuttle. U.S. ELVs
currently in use include Titan and Atlas (manufactured by Lockheed Martin), Delta
(manufactured by Boeing), and Pegasus and Taurus (manufactured by Orbital Sciences
Corporation). Delta 4 and Atlas 5 are the most recent additions to the fleet, and were
developed through DOD’s Evolved Expendable Launch Vehicle (EELV) program.
From “Shuttle-Only” to “Mixed Fleet”
In 1972, President Nixon approved NASA’s plan to create the first reusable launch
vehicle, called the space shuttle, and directed that it become the nation’s primary launch
vehicle, replacing all the ELVs except Scout (later discontinued for unrelated reasons). This
would have made NASA and DOD dependent on a single launch vehicle, but the resulting
high launch rate was expected to reduce the cost per flight significantly. The shuttle was first
launched in 1981, and was declared operational in 1982. The phase-out of the ELVs began,
but in 1984 the Air Force successfully argued that it needed a “complementary” ELV as a
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backup to the shuttle for “assured access to space” and initiated what is now known as the
Titan IV program. Production lines for the Delta and Atlas began to close down, and it was
expected that only the shuttle, Scouts, and Titan IVs would be in use by the mid-1980s.
Everything changed on January 28, 1986, however, when the space shuttle Challenger
exploded 73 seconds after launch. Apart from the human tragedy, the Challenger accident
deeply affected U.S. space launch policy, demonstrating the vulnerability of relying too
heavily on a single system. Many military and civilian satellites had been designed to be
launched on the shuttle, and could not have been transferred to ELVs even if the ELVs were
not already being phased out. The remaining ELVs had their own problems in 1986. A
Titan exploded in April and a Delta failed in May, which also grounded Atlas because of
design similarities. Consequently, the Reagan Administration revised U.S. launch policy
from primary dependence on the shuttle to a “mixed fleet” approach where a wide variety of
launch vehicles are available. The shuttle is used principally for missions that require crew
interaction, while ELVs are used for launching spacecraft. President Reagan also decided
that commercial payloads could not be flown on the shuttle unless they were “shuttle-unique”
(capable of being launched only by the shuttle or requiring crew interaction) or if there were
foreign policy considerations. That action facilitated the emergence of a U.S. commercial
space launch industry whose participants had long argued that they could not compete against
government-subsidized shuttle launch prices. The White House and Congress had taken
steps beginning in 1983 to assist in developing a commercial space launch services business,
including President Reagan’s 1983 designation of the Department of Transportation as the
agency responsible for facilitating and regulating the commercial space launch sector.
Passage of the 1984 Commercial Space Launch Act (P.L. 98-575), the Commercial Space
Launch Act Amendments of 1988 (P.L. 100-657), and the Commercial Space Act of 1998
(P.L. 105-303) also have helped. But removing the shuttle as a competitor was the major
factor in fostering the U.S. launch businesses.
Clinton Administration Policy
On August 5, 1994, President Clinton released a National Space Transportation Policy
that gave DOD lead responsibility for improving ELVs and NASA lead responsibility for
upgrading the space shuttle and technology development of new reusable launch vehicles.
The policy also sets guidelines for the use of foreign launch systems, the use of excess
ballistic missile assets for space launch, and encourages an expanded private sector role in
space transportation R&D.
George W. Bush Administration Policy
On June 28, 2002, President Bush ordered the National Security Council to chair a
review of several U.S. space policies. The review of space transportation policy was due by
December 31, 2002, but was initially delayed, and then further delayed by the February 2003
space shuttle Columbia accident. A date for that policy’s release is not available. However,
on January 14, 2004, the President announced a new exploration initiative for NASA that
includes retiring the shuttle fleet after construction of the space station is completed in 2010.
Under the plan, NASA would send humans back to the Moon by 2015-2020, and eventually
to Mars. No decisions have been made on what, if any, new launch vehicles are needed to
fulfill those goals.
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U.S. Launch Vehicle Programs and Issues
NASA’s Space Shuttle Program
The Space Transportation System — the space shuttle — is a partially reusable launch
vehicle and is the sole U.S. means for launching humans into orbit. It consists of an airplane-
like Orbiter, with two Solid Rocket Boosters (SRBs) on each side, and a large, cylindrical
External Tank (ET) that carries fuel for the Orbiter’s main engines. The Orbiters and SRBs
are reused; the ET is not. NASA has three remaining spaceflight-worthy Orbiters: Discovery,
Atlantis, and Endeavour.
A total of 113 launches have taken place since April 1981. Two of those missions
ended in tragedy, each killing seven astronauts. In 1986, the space shuttle Challenger
exploded 73 seconds after launch because of the failure of a seal (an O-ring) between two
segments of an SRB. In 2003, the space shuttle Columbia disintegrated as it returned to
Earth from a 16-day science mission (see CRS Report RS21408). The shuttle fleet is
grounded. NASA’s current target for “Return to Flight” (RTF) is March/April 2005.
Congress is debating issues stemming from the Columbia tragedy, which is discussed
in CRS Report RS21408. The Columbia Accident Investigation Board released its report
on August 26, 2003 (see [http://www.caib.us]). A synopsis is available in CRS Report
RS21606. The Board found that the tragedy was caused by technical and organizational
failures, and made 29 recommendations to fix the program. Fifteen of the 29
recommendations must be completed before the shuttle returns to flight. NASA
Administrator O’Keefe says NASA will comply with CAIB’s recommendations. He
established a “Return to Flight” (RTF) Task Group chaired by two former astronauts, Tom
Stafford and Dick Covey, to oversee NASA’s implementation of the CAIB recommendations
as they relate to RTF. The Task Group will not address management and culture changes
recommended by CAIB. Questions remain about who should oversee implementation of
those recommendations, and 27 “observations” made by CAIB. H.R. 3219 (Hall) would
establish an independent panel of the National Academies of Science and Engineering to
provide that oversight. S. 1821 (Hollings) would establish a permanent National Space
Commission, inter alia, to oversee compliance. The Stafford/Covey task group
[http:\\www.returntoflight.org] has issued two interim reports, in January and May 2004.
The May 2004 report conditionally closed out three of the 15 CAIB recommendations, but
also determined that the ability to use the space station as a shelter for shuttle crews is
becoming increasingly important as a RTF issue, and notified NASA it has added that
capability to its oversight responsibilities. The report also expressed concern about whether
the shuttle program has sufficient personnel to complete the RTF activities.
Although 87 successful shuttle launches were conducted between the two tragedies,
there were persistent concerns that cuts to the shuttle budget, personnel reductions, and
NASA’s 1995 decision to turn most shuttle operations over to a “single prime contractor,”
could impact shuttle safety. (Shuttle appropriations levels for FY1992-FY2002 are in CRS
Report RS21411.) The “single prime contractor” is the United Space Alliance (USA), a
limited liability company owned 50-50 by Boeing and Lockheed Martin, created to pull
together the 86 separate contracts with 56 different companies under which the shuttle
program was then operating. NASA signed a $7 billion, six-year Space Flight Operations
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Contract (SFOC) with USA on September 26, 1996 with the goal of reducing shuttle
operational costs while ensuring safety. On August 2, 2002, NASA exercised the first of two
two-year options, extending the contract to September 30, 2004. NASA asserts that SFOC
has saved the agency approximately $1 billion per year. Contracts for the External Tank,
Solid Rocket Boosters, and Space Shuttle Main Engines have not yet been incorporated into
SFOC. NASA manages those contracts, with Lockheed Martin, ATK Thiokol, and Boeing
Rocketdyne, respectively.
NASA and USA statistics showing reduced “in-flight anomalies,” and several instances
where USA grounded the shuttle fleet after discovering potential problems, seemed to
indicate that safety was not being eroded. But safety concerns were expressed by review
panels, particularly the Aerospace Safety Advisory Panel (ASAP), and an internal NASA
review commissioned after a 1999 mission (STS 93) suffered two serious anomalies during
launch. Called the Shuttle Independent Assessment Team — see CRS Report RS21419 for
excerpts — it concluded that NASA needed to augment the resources available to the shuttle
program to ensure safety.

NASA added some personnel and funding, but both remained constrained. Efforts to
upgrade the shuttle to improve safety and combat obsolescence were cut after individual
projects proved more expensive and/or technically challenging than expected. In the
February 2002 budget request for FY2003, NASA Administrator O’Keefe reduced funding
for upgrades in the FY2002-2006 time period by 34% — from $1.836 billion to $1.220
billion. In November 2002, however, Mr. O’Keefe submitted a FY2003 budget amendment
shifting more funds into the shuttle program ($470 million for FY2003-2007) and
announcing that NASA would continue to use the shuttle longer than planned — until at least
2015, and perhaps 2020 and beyond, instead of replacing it in 2012. NASA created a new
line in its FY2004 budget for a “Shuttle Service Life Extension Program” (SLEP) that
incorporated funding previously identified for shuttle upgrades. At the same time, Mr.
O’Keefe restructured the Space Launch Initiative, which had been developing technologies
to build a replacement for the shuttle (see below), to focus on building an Orbital Space
Plane (OSP) to take crews to and from the space station.
Less than three months later, however, the Columbia tragedy forced NASA to reassess
its space transportation strategy. Final action on the FY2003 budget was pending at the time
of the tragedy. The amended FY2003 shuttle request was $3.2 billion. Congress approved
that level, and added $50 million for the Columbia investigation and other accident-related
expenses, and exempted the shuttle program from an across-the-board rescission applied to
most other government programs. Congress added another $50 million for FY2003 for
investigation and remediation activities in the FY2004 Legislative Branch Appropriations
Act (P.L. 108-83). (NASA’s FY2004 budget justification documents show $3.786 billion
as the expected FY2003 funding level because it is expressed in “full cost accounting,”
which includes certain costs that previously were accounted for separately, and does not
include the second $50 million supplemental.) Congress appropriated $3.968 billion for the
shuttle program in FY2004, as requested. The FY2005 request is $4.3 billion.
Plans for the future of the shuttle fleet changed again on January 14, 2004, when
President Bush announced that the shuttle system would be retired after construction of the
space station is completed in 2010. The announcement was part of a new exploration
initiative announced by the President (see CRS Report RS21720). NASA plans to terminate
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the SLEP program. Some upgrade activities will continue under other budget line items.
Congress is debating the President’s new plan, including its impact on the shuttle and on U.S.
human access to space. Some Members want to terminate the shuttle earlier than 2010
because they feel it is too risky and/or that the funds should be spent on accelerating the
President’s vision of returning humans to the Moon. Others want to retain the shuttle at least
until a new spacecraft is available to take astronauts to and from the space station. Under
NASA’s current plan, such a spacecraft would not be ready at least until 2014. Between
2010 and 2014, U.S. astronauts would have to rely on Russia for access to the space station.
This issue is discussed in more detail in CRS Issue Brief IB93017.
NASA’s Efforts to Develop New Reusable Launch Vehicles (RLVs)
U.S. expendable and reusable launch systems remain expensive and less efficient and
reliable than desired. DOD and NASA initiated several efforts in the late 1980s and early
1990s to develop new systems, but each was terminated in turn because Congress or the
agencies themselves were not convinced that the required investment had sufficient priority.
In response to the 1994 Clinton policy, two programs were initiated: DOD’s Evolved
Expendable Launch Vehicle (EELV) program (see below) and NASA’s Reusable Launch
Vehicle (RLV) program. Proponents believe that RLV technology can dramatically lower
the cost of accessing space. NASA’s efforts to develop a “2nd generation” RLV to replace
the shuttle (which is the 1st generation RLV) have not fared well, however.

X-33 and X-34. From 1995 to 2000, NASA’s approach was based on establishing new
forms of cooperation with industry by sharing the costs of developing technology with the
intent that industry take over development, operation, and financing of the operational
vehicle. Two “X” (for “experimental”) flight test programs were begun: X-33 and X-34. X-
33 was a joint program with Lockheed Martin to build a subscale prototype of a large RLV
based on single-stage-to-orbit (SSTO) technology. The SSTO concept involves a rocket that
can attain orbit with only one stage (instead of two or more as is common today) carrying
people or cargo. X-34 was a small RLV “testbed” to demonstrate reusable two-stage-to-orbit
technologies, which was being built under a traditional contract with Orbital Sciences
Corporation. (Initially, X-34 also was a government-industry cooperative effort with Orbital
and Rockwell International, but those companies withdrew from the cooperative agreement.
NASA then signed a contract with Orbital for a scaled-back program.) NASA terminated
X-33 and X-34 in March 2001. NASA spent approximately $1.2 billion on X-33, and
Lockheed Martin said that it spent $356 million of its own funding. Technical problems with
the X-33, particularly its new “aerospike” engines and construction of its composite
hydrogen fuel tanks, led to delays in test flights from 2000 to 2003. NASA concluded that
the cost to complete the program was too high compared to the benefits. X-34 was
terminated for similar reasons. NASA spent $205 million on X-34.
Space Launch Initiative (SLI). NASA restructured its RLV program in 2000 (as
part of its FY2001 budget request) and initiated the Space Launch Initiative (SLI). NASA
dramatically restructured the SLI program in 2002, and now is terminating it.
Originally, the SLI plan was for NASA to work with the private sector and universities
to develop new technologies to allow a decision in 2006 on what new RLV to develop. The
goal was to develop RLV technology that would be “10 times safer and crew survivability
100 times greater, all at one-tenth the cost of today’s space launch systems.” NASA initially
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specified that it expected the private sector to pay some of the development costs, but later
conceded that market conditions made that unlikely. SLI was budgeted at $4.8 billion from
FY2001-2006. The failure of the X-33 and X-34 programs, and of the National AeroSpace
Plane (NASP) program before them, made some observers skeptical about NASA’s ability
to develop a 2nd generation RLV. NASA Administrator O’Keefe and the Bush
Administration agreed. In a budget amendment submitted to Congress in November 2002,
the SLI program was significantly changed. Mr. O’Keefe was quoted as calling the SLI goal
“a bumper sticker.” The budget amendment documentation said a new RLV lacked economic
justification and that although the SLI program estimated the cost of a new RLV at $10
billion (not including the funding spent on SLI), a new estimate by the SLI program office
was $20 billion, and four independent estimates sponsored by NASA suggested $30-35
billion. Therefore, the Bush Administration shifted funding away from developing a 2nd
generation RLV. Although the name SLI continued, the program was restructured into two
components: building an Orbital Space Plane (OSP) to take crews to and from the space
station, and developing “Next Generation Launch Technology” (NGLT), with a decision in
2009 on what new launch vehicle to build. OSP was not a launch vehicle, but a spacecraft
designed to take crews to and from the space station. NGLT comprised the funding that
remained for the 2nd generation RLV program plus funding allocated for “3rd generation”
technologies (a then-existing line item in the NASA budget). Following President Bush’s
announced of new goals for NASA in January 2004, NASA announced that it would
terminate SLI, and shift remaining SLI funding into activities that support the new
exploration initiative. A projected NASA funding chart for the years FY2004-2020 assumes
spending $13-16 billion for a new “heavy lift” launch vehicle beginning in FY2011 to
support returning astronauts to the Moon, but NASA says its does not yet know if a new
vehicle will be needed.
DOD’s Evolved Expendable Launch Vehicle (EELV) Program
DOD began what is now known as the EELV program in FY1995 (P.L. 103-335) with
a $30 million appropriation. EELV was first formally identified in DOD’s FY1996 budget.
Two EELVs were developed in joint government-private sector programs: Boeing’s Delta
IV and Lockheed Martin’s Atlas V. Both vehicles have successfully entered service. The
goal of the EELV program was to reduce launch costs by 25%, but that goal may not be met.
In 1996, the Air Force had selected Lockheed Martin and McDonnell Douglas (later
bought by Boeing) for development contracts worth $60 million. Originally, one of those
companies would have been selected in 1998 to develop the EELV. In November 1997,
responding to indicators at the time that the commercial space launch market would be larger
than expected, DOD announced that it would help fund development of both Atlas V and
Delta IV. In October 1998, DOD awarded Boeing $1.88 billion for the Delta IV ($500
million for further development plus $1.38 billion for 19 launches), and awarded Lockheed
Martin $1.15 billion for the Atlas V ($500 million for further development plus $650 million
for 9 launches). The companies were expected to pay the rest of the development costs
themselves. (Boeing officials state that Boeing invested $2.5 billion in design, development,
and infrastructure for the Delta 4, of which the company has written off $2 billion.)
In 2000, however, new market forecasts showed a reduction in expected commercial
demand, and DOD began reevaluating its EELV strategy. It renegotiated the contracts with
both companies, shifting two of the launches previously awarded to Lockheed Martin to
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Boeing instead, and relieving Lockheed Martin (reportedly at the company’s request) of the
requirement to build a launch pad at Vandenberg AFB, CA. The companies then approached
DOD to obtain additional government funding because of the downturn in the commercial
market. This is called “assured access to space” in the sense of assuring that both companies
remain in the EELV business so DOD has redundancy in capability should one of the launch
vehicles experience difficulties. The FY2004 DOD authorization act (P.L. 108-136) codified
“assured access” as U.S. policy, stating that two space launch vehicles (or two families of
them) are to be sustained. It does not specify Atlas 5 and Delta 4, but there appears to be no
other alternative, since the space shuttle, once it resumes flight, will be used only for space
station-related launches and is scheduled to be terminated around 2010.
In May 2003, Boeing revealed that it was under investigation by the Justice Department
about whether it illegally obtained proprietary information about Lockheed Martin’s EELV
program in the 1996-1999 time frame. On July 24, DOD suspended three Boeing business
units from eligibility for new government contracts, shifted seven existing launch contracts
from Boeing to Lockheed Martin, and disqualified Boeing from bidding for three new launch
contracts. Exceptions to the suspension are allowed if “compelling national need” can be
demonstrated, and the government has awarded several contracts to those Boeing units
despite the suspension, including one new launch contract. Lockheed Martin will build the
launch pad (actually upgrading an existing Atlas 3 pad) for the Atlas 5 that was previously
planned at Vandenberg. Boeing subsequently withdrew the Delta 4 from competition for
commercial contracts and is focusing entirely on the government market.
DOD notified Congress that the EELV program breached the “Nunn-McCurdy” limit
of 25% cost growth, which requires DOD to cancel or restructure the program, or certify that
it is essential to national security. In April 2004, DOD made that certification. The FY2005
request is $611 million for procurement, and $25 million for R&D. In the FY2005 DOD
authorization bill (H.R. 4200/S. 2400), the House and Senate each cut the procurement
request by $100 million because one of the launches ( SBIRS-High) was delayed by a year.
In the FY2005 DOD appropriation bill (H.R. 4613/S. 2559), the Senate cut $100 million as
in the authorization bill. The House appropriations bill transferred $91 million from EELV
into SBIRS-High, stating that the Air Force requested that action. In its accompanying report
(H.Rept. 108-553), the House Appropriations Committee directed DOD to study whether
both families of EELVs are really needed. The committee argued that “assured access”
might be better ensured by adequately funding only one vehicle, instead of inadequately
funding two, and raised other issues.
Private Sector Launch RLV Development Efforts
Several entrepreneurial U.S. companies have been attempting to develop RLVs through
private financing. Many have encountered difficulties in obtaining financing from the
financial markets, and some have sought government loan guarantees or tax credits. Some
(e.g. Kistler Aerospace and Universal Space Lines) have received limited direct government
funding through various contracts. Another company, SpaceX, asserts that it will
dramatically reduce the cost of reaching orbit with its partially reusable Falcon launch
vehicle. The first launch, of a small DOD communications satellite, is scheduled for 2004.
A number of companies are focusing on building suborbital rockets instead of those
that can reach orbit, anticipating that space tourism will be a substantial market. Twenty
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seven teams from seven countries are participating in the “X-Prize” contest
[http://www.xprize.com], which will award $10 million to the first privately-financed
company to launch a vehicle capable of carrying three people (one person must actually be
aboard) to an altitude of 100 kilometers (62.5 miles), return safely to Earth, and repeat it
within two weeks using the same vehicle. On June 21, 2004, Mike Melvill became the first
person to reach space (on a suborbital flight) on a vehicle, SpaceShipOne, built entirely with
private funds. It was designed by Burt Rutan and financed by Microsoft co-founder Paul
Allen. Although the flight was successful in that Mr. Melvill surpassed 100 kilometers and
returned safely, several anomalies occurred during the flight. The vehicle’s designer, Burt
Rutan, subsequently stated that he would not attempt to repeat the flight until those problems
were understood and fixed. H.R. 3752 would regulate commercial human space flight.
Inter alia, it directs the Secretary of Transportation to issue regulations setting requirements
for the crew and passengers (“space flight participants”) of such flights, but permits licenses
to be issued for such flights prior to finalization of those regulations.
U.S. Commercial Launch Services Industry
Congressional Interest
Congress is debating issues involving the domestic launch services industry, many of
which were debated in previous Congresses. Some are focused on satellite export issues
(discussed below). Another is the question of what the government should do to stimulate
development of new launch vehicles by the private sector, particularly in a market that is
stagnant or declining. That debate focuses on whether tax incentives or loan guarantees
should be created for companies attempting to develop lower cost launch vehicles. Tax
incentive advocates argue that loan guarantee programs allow the government to pick
winners and losers; loan guarantee advocates argue that tax incentives are insufficient to
promote necessary investment in capital intensive projects. Congress created (Title IX,
FY2003 DOD appropriations Act, P.L. 107-248) a loan guarantee program for companies
developing commercial, reusable, in-orbit space transportation system, but such systems are
not launch vehicles (they move satellites from one orbit to another) and are not discussed
further here. In the 108th Congress, H.R. 2358 would create tax incentives. H.R. 644 would
make spaceports eligible for tax exempt bonds. S. 1260 would extend until 2009 (from
2004) the period through which the government will indemnify commercial space launch
companies from certain third-party claims, and require the Secretary of Transportation to
study whether suborbital launch vehicles require separate regulation. H.R. 3752 would
extend the government indemnification until 2007, establish a regulatory regime for the
commercial human space flight — “space tourism” — industry (discussed above), and allow
the FAA to issue experimental launch permits.
One difficulty facing existing and nascent launch service providers is dramatically
changed market forecasts. In the mid- to late-1990s when many of the entrepreneurial
companies began their efforts, a very large market was predicted for placing satellites into
low Earth orbit (LEO), particularly for satellite systems to provide mobile satellite telephony
services. Many of the companies targeted the LEO market, but it has shrunk markedly in the
intervening years. Three satellite mobile phone companies (Iridium, ICO, and Globalstar),
and a company that offered data services using LEO satellites (Orbcomm), all declared
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bankruptcy. Iridium, ICO, and Globalstar were later brought out of bankruptcy, and
Orbcomm was purchased at auction, but many investors remain skeptical about the prospects
for such systems. Another factor is that technological advances permit longer satellite
lifetimes and enlarged capacity, reducing the need for new satellites. Launch forecasts
published by FAA (available at [http://ast.faa.gov]) reflect the changing market conditions.
Foreign Launch Competition
Europe, China, Russia, Ukraine, India, and Japan offer commercial launch services in
competition with U.S. companies. Most satellites are manufactured by U.S. companies or
include U.S. components and hence require export licenses, giving the United States
considerable influence over how other countries participate in the commercial launch
services market. The United States negotiated bilateral trade agreements with China, Russia,
and Ukraine on “rules of the road” for participating in the market to ensure they did not offer
unfair competition because of their non-market economies. Launch quotas were set in each
of the agreements. However, President Clinton terminated the quotas for Russia and Ukraine
in 2000, and the agreement with China expired at the end of 2001.
Europe. The European Space Agency (ESA) developed the Ariane family of launch
vehicles. The first test launch of an Ariane was in 1979; operational launches began in 1982.
ESA continued to develop new variants of Ariane. Ariane 5 is the only version now in use.
ESA also is developing a smaller launch vehicle, Vega, whose first launch is expected in
2005. Operational launches are conducted by the French company Arianespace.
Arianespace conducts its launches from Kourou, French Guiana, on the northern coast of
South America. Arianespace also markets Russia’s Soyuz launch vehicle and ESA is
planning to build a launch site for Soyuz at Kourou.
In 1985, a U.S. company (Transpace Carriers Inc.) filed an unfair trade practices
complaint against Arianespace, asserting that European governments were unfairly
subsidizing Ariane. The Office of the U.S. Trade Representative (USTR) investigated and
found that Europe was not behaving differently from the United States in pricing commercial
launch services (then offered primarily on the government-owned space shuttle). The
incident raised questions about what “rules of the road” to follow in pricing launch services.
In the fall of 1990, USTR and Europe began talks to establish such rules of the road and
assess how to respond to the entry of non-market economies into the launch services
business. The only formal negotiating session was held in February 1991.
Each side is concerned about how much the respective governments subsidize
commercial launch operations, but another controversial topic (not formally part of the talks)
was whether Arianespace should be able to bid for launches of U.S. government satellites,
which now must be launched on U.S. launch vehicles as a matter of U.S. policy.
Arianespace wants that restriction lifted. France and other European governments do not
have written policies requiring the use of Ariane for their government satellites. However,
the member governments of ESA originally agreed to pay a surcharge of as much as 15-20%
if they chose Ariane. The surcharge led some cost-conscious European governments to buy
launch services from other (notably U.S.) suppliers. In the fall of 1995, ESA’s member
governments reached agreement with Arianespace to reduce the surcharge to encourage use
of Ariane. (ESA itself gives preference to using Ariane, but is not legally constrained from
using other launch vehicles.) Arianespace is currently encountering significant financial
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difficulties both because of the constrained market, and because of the failure of a new, more
capable variant of the Ariane 5 in 2002. In May 2003, the ESA Council of Ministers adopted
a European Guaranteed Access to Space (EGAS) program that would provide 960 million
euros for Arianespace to return the more capable version of the Ariane 5 to flight, and
acquire Ariane 5 launch vehicles through 2009, while the commercial launch market is down.
China. The People’s Republic of China offers several versions of its Long March
launch vehicles commercially. China poses special issues not only because of its non-market
economy, but because of technology transfer and political concerns. Launch services are
offered through China Great Wall Industry Corp. (CGWIC). Because the United States
currently will not issue export licenses for satellites or satellite components destined for
China (see below), the Chinese commercial space launch program is dormant.
U.S.-China Bilateral Trade Agreements for Launch Services. In 1989, China
and the United States signed a six-year bilateral trade agreement restricting the number of
Chinese commercial space launches to ensure China, with its nonmarket economy, did not
unfairly compete with U.S. companies. A new seven-year agreement was reached in 1995,
and amended in 1997. The agreement expired on December 31, 2001. While the
agreements were in force, they established quotas on how many commercial satellites China
could launch each year, and included pricing provisions to try to ensure that China did not
unfairly compete with U.S. commercial launch service providers because of its non-market
economy.
U.S. Satellite Exports to China: 1988-1997. In September 1988, the U.S.
government agreed to grant three export licenses for satellites manufactured by Hughes to
be launched by CGWIC. The Reagan Administration granted the licenses on the conditions
that China sign three international treaties related to liability for satellite launches and other
subjects; agree to price its launch services “on a par” with Western companies; and establish
a government-to-government level regime for protecting technology from possible misuse
or diversion. China met the conditions and the two countries signed a six-year agreement
in January 1989. The now-defunct Coordinating Committee on Multilateral Export Controls
(COCOM) approved the licenses that March.
On June 5, 1989, after the Tiananmen Square uprising, President George H. W. Bush
suspended all military exports to China. At the time, exports of communications satellites
were governed by the State Department’s Munitions List. The satellites counted as military
exports and the licenses were suspended. Then Congress passed language in the FY1990
Commerce, Justice, State and Judiciary appropriations (P.L. 101-162) and the 1990-91
Foreign Relations Authorization Act (P.L. 101-246, Section 902) prohibiting the export of
U.S.-built satellites to China unless the President reported to Congress that (1) China had
achieved certain political and human rights reforms, or (2) it was in the national interest of
the United States. In December 1989, President Bush notified Congress that export of the
satellites was in the national interest and the licenses were reinstated. The satellites were
launched by China in 1990-1992.
A different issue arose in 1990. China signed a contract to launch an Arabsat
Consortium satellite for $25 million, much less than what many considered “on a par” with
Western companies. The main competitor, Arianespace, turned to both the French and U.S.
governments to prohibit export of the satellite. No formal action was taken by the United
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States. In 1991, the Arabsat Consortium terminated the contract with the Chinese and signed
an agreement with Arianespace, so the case became moot, but the issue of what constituted
“on a par” remained. China argued that because its costs are so low, it could offer lower
prices and still adhere to international norms as to what costs are included in setting the
price. Yet another issue arose in 1991 — linkage of satellite export licenses with U.S.
concern over China’s ballistic missile proliferation policies. On April 30, 1991, the Bush
Administration approved final export licenses for two satellites and for U.S. components of
another, but to emphasize its concern about Chinese missile proliferation, disapproved export
of U.S. components for a communications satellite China itself was building. On June 16,
1991, the White House announced that it would not approve any further export licenses for
commercial satellite launches. On July 17, the State Department identified CGWIC as one
of two Chinese entities engaged in missile technology proliferation activities that require the
imposition of trade sanctions under the Arms Export Control Act, including denial of license
applications for export items covered by the Missile Technology Control Regime (MTCR).
Although the MTCR does not cover satellites (only satellite launch vehicles, which are close
cousins of ballistic missiles), the identification of CGWIC as a cause of concern complicated
China’s marketing plans. China agreed to adhere to the MTCR, and the sanctions were lifted
on February 21, 1992. In May 1992, INTELSAT agreed to launch at least one satellite on a
Chinese launch vehicle. On September 11, 1992, the State Department notified Congress
that it was waiving legislative restrictions on U.S. exports for six satellite projects with
China. Many observers saw the move as a conciliatory gesture in the wake of the U.S.
decision to sell F-16s to Taiwan.
On August 25, 1993, however, the U.S. government again imposed sanctions against
China for ballistic missile proliferation activities, and the State Department said that satellite
exports would not be permitted. The State Department announced October 4, 1994 it would
lift the sanctions after China pledged to abide by the MTCR. During this period, tensions
were acute between those viewing the sanctions as harmful to U.S. business interests and
those seeking to prevent sensitive technology from reaching China and/or to punish China
for MTCR infractions. The debate centered on whether the satellites should be governed by
the State Department (Munitions List) or the Commerce Department (Commerce Control
List). Some responsibility for export of commercial communications satellites was
transferred from the State Department to the Commerce Department in 1992; in October
1996 primary responsibility was transferred to Commerce.
In January 1995, the launch of the Hughes-built APStar-2 satellite failed in-flight.
Falling debris killed 6 and injured 23 on the ground. On February 6, 1996, President Clinton
approved the export of four satellites to China for launch, despite concerns about China
exporting nuclear weapons-related equipment to Pakistan. On February 14, 1996, a Long
March 3B rocket carrying the INTELSAT 708 communications satellite built by Loral
malfunctioned seconds after liftoff, impacting the ground and spreading debris and toxic
fumes over the launch site and a nearby village. The Chinese reported 6 dead and 57 injured,
but other reports suggested a higher figure. After this second Chinese launch failure
involving fatalities, some customers, including INTELSAT, canceled contracts.
In May 1997, USTR stated that it believed China violated the pricing provisions of the
bilateral agreement for the launching of Agila 2 for the Philippines. Chinese officials
disagreed. On September 10, 1997, the Washington Times published a story that Chinese and
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Russian entities (including CGWIC) were selling missile technology to Iran. China denied
the allegations.
Satellite Exports to China: 1998-2000 (Including the “Loral/Hughes”
Issue, the Cox Committee Report, and Lockheed Martin). On February 18, 1998,
the President notified Congress that it was in the national interest to export Loral’s Chinasat
8 satellite to China. On April 4, 1998, the New York Times reported that a 1997 classified
DOD report alleged that Space Systems/Loral (part of Loral Space & Communications) and
Hughes Electronics’ satellite manufacturing division (then a subsidiary of General Motors;
now Boeing Satellite Systems) provided technical information to China that improved the
reliability of Chinese nuclear missiles. The assistance was provided in the wake of the
February 1996 INTELSAT 708 launch failure (see above). The INTELSAT satellite was
built by Loral, which participated in an inquiry into the accident at the request of insurance
companies seeking assurances that the Chinese had correctly diagnosed and solved the cause
of the failure. Loral formed a review committee that included representatives of other
satellite companies, including Hughes. According to Loral, the review committee did not
itself investigate the accident, but listened to Chinese officials explain their investigation and
then wrote a report. Loral conceded that a copy of the report was given to the Chinese before
it was provided to the State Department, in violation of Loral’s internal policies. Loral says
it notified the State Department when it learned that the Chinese had been given a copy.
According to media sources, DOD’s 1997 report says that the companies provided technical
information in violation of Loral’s export license. The companies insist they did not violate
the licenses. The Justice Department investigated, and expanded the probe to include
Hughes’ response to the 1995 APStar-2 failure. A grand jury reportedly was empaneled in
1999. The government reached a civil settlement with Loral on January 9, 2002 where Loral
agreed to pay a $14 million civil fine, and spend $6 million on strengthening its export
compliance program. On December 26, 2002, the State Department charged Hughes
Electronics and Boeing Satellite Systems with 123 export violations. The companies settled
with the government on March 5, 2003, accepting a civil penalty of $20 million in cash, and
$12 million in credits for money already spent ($4 million), or that will be spent ($8
million), on export program enhancements.
Many hearings on the “Loral/Hughes” issue were held by various House and Senate
committees. In addition, the House established the Select Committee on U.S. National
Security and Military/Commercial Concerns with the People’s Republic of China, chaired
by Representative Cox. The Cox committee concluded that Hughes and Loral deliberately
transferred technical information and know-how to China during the course of accident
investigations. The committee investigated other cases of China acquiring other U.S.
technical information and made 38 recommendations (see CRS Report RL30231).
The FY2000 DOD authorization act (P.L. 106-65) included language implementing
many of the Cox committee recommendations. In brief, the Department of Justice must
notify appropriate congressional committees when it is investigating alleged export
violations in connection with commercial satellites or items on the munitions list if the
violation is likely to cause significant harm or damage to national security with exceptions
to protect national security or ongoing criminal investigations; companies must be provided
with timely notice of the status of their export applications; enhanced participation by the
intelligence community in export decisions is required; adequate resources must be provided
for the offices at DOD and the State Department that approve export licenses; individuals
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providing security at overseas launch sites do not have to be DOD employees, but must
report to a DOD launch monitor; and DOD must promulgate regulations concerning the
qualifications and training for DOD space launch monitors and take other actions regarding
those monitors and the records they maintain.
In February 1999, the Clinton Administration denied Hughes permission to export two
satellites to China for launch. Export permission for those satellites (called APMTs) had
been granted in 1997, but Hughes changed the spacecraft design, necessitating new export
approval. That application was denied. On May 10, 2000, the White House made its first
certification to Congress under the new process detailed in the FY1999 DOD authorization
bill, approving the export to China of satellite fuels and separation systems for the Iridium
program. On August 18, 2000, the State Department stated it would continue the suspension
of a technical assistance agreement for Loral regarding launch of the Chinasat 8 satellite
because the concerns that initiated the suspension in December 1998 had not been rectified.
In January 2001, Space News reported that the Chinasat 8 export application was returned
to Loral without action.
In April 2000, it became known that Lockheed Martin also was under investigation, in
this case for performing a technical assessment, without an export license, of a Chinese “kick
motor” used to place a satellite into its final orbit. On June 14, 2000, the State Department
announced it had reached agreement with Lockheed Martin involving $13 million in
penalties — $8 million that the company will pay over a four-year period and $5 million that
was suspended and that the company can draw upon to fund a series of remedial compliance
measures specified in the consent agreement.
Satellite Exports to China: 2001-Present. In July 2001, Senators Helms,
Thompson, Shelby, and Kyl wrote to President Bush reportedly asking the President not to
grant waivers for the export of satellites to China. As noted earlier, such waivers are
required under the FY1990-91 Foreign Relations Authorization Act (P.L. 101-246). At the
time, attention was focused on two European companies (Astrium and Alenia Spazio) that
had built satellites for two multinational satellite organizations (INTELSAT and
EUTELSAT, respectively) that were scheduled for launch by China. The satellites contain
U.S. components. In August 2001, INTELSAT canceled its contract with Astrium for the
APR-3 satellite, citing several factors, including the delay in obtaining U.S. export approval.
EUTELSAT switched the launch of its satellite to Europe’s Ariane. Other satellites being
manufactured by U.S. companies, however, such as Chinasat 8 and another being built by
Loral (Apstar-5, for APT Satellite Co.), or containing U.S. components may require waivers
in the future (see CRS Report 98-485 for a list of pending satellite exports). The FY2002
Commerce, Justice, State Appropriations Act (P.L. 107-77), and the FY2003 Consolidated
Appropriations Resolution (P.L. 108-7) require 15 days notice to Congress before processing
licenses for exporting satellites to China.
Russia. U.S. policy prohibited U.S.-built satellites from being exported to the Soviet
Union. Following the collapse of the Soviet Union, President George H. W. Bush said he
would not oppose Russia launching an International Maritime Satellite Organization
(Inmarsat) satellite and the United States would negotiate with Russia over “rules of the
road” for future commercial launches. Discussions in the fall of 1992 led to agreement in
principle in May 1993; the agreement was signed on September 2, 1993, after Russia agreed
to abide by the terms of the MTCR (see below). On January 30, 1996, the countries amended
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the agreement. Prior to Russia’s first launch of a U.S.-built satellite, a Technology Safeguard
Agreement among the United States, Russia, and Kazakstan (where the launch site is located)
was signed in January 1999. A similar agreement for launches from Russia’s Plesetsk,
Svobodny, and Kapustin Yar launch sites was signed in January 2000.
The 1993 agreement was signed only after Russia agreed to comply with the MTCR in
a case involving a Russian company, Glavkosmos, that planned to sell rocket engine
technology to the Indian Space Research Organization (ISRO). The United States declared
it violated the MTCR and imposed two-year sanctions against Glavkosmos and ISRO. In
June 1993, the United States threatened to impose sanctions against Russian companies that
did business with Glavkosmos. The two countries finally agreed that Russia would cease
transferring rocket engine technology (the engines themselves were not at issue) to India.
As noted, on September 10, 1997, the Washington Times published a story that Russian
and Chinese entities, including the Russian Space Agency, were selling missile technology
to Iran. In July 1998, Russia announced that it had identified nine entities that might be
engaged in illegal export activities. The United States imposed sanctions against seven of
them on July 28 and three more entities on January 12, 1999. The State Department said the
United States would not increase the quota on geostationary launches that Russia could
conduct under the 1996 agreement unless Russian entities ceased cooperating with Iran’s
ballistic missile program (see CRS Report 98-299). The launches are conducted primarily
by a U.S.-Russian joint venture composed of Lockheed Martin and Russia’s Khrunichev and
Energia, companies that were not among those sanctioned. Lockheed Martin was anxious
to have the quota raised to 20 and eventually eliminated. On July 13, 1999, the White House
agreed to raise the quota to 20. The agreement that set the quotas was due to expire on
December 31, 2000, but the White House eliminated the quota on December 1 (Wall Street
Journal, December 1, 2000, p. A4).
Ukraine. Ukraine offers commercial launch services, chiefly as part of the Sea Launch
joint venture among Boeing, Ukraine’s Yuzhnoye, Russia’s Energomash, and Norway’s
Kvaerner. The Sea Launch vehicle consists of a Ukranian two-stage Zenit rocket with a
Russian third stage. The vehicle is launched from a mobile ocean oil rig built by Kvaerner.
The rig is stationed in Long Beach, CA, where the launch vehicle and spacecraft are mated,
and then towed into the ocean where the launch takes place. The United States and Ukraine
signed a bilateral trade agreement in February 1996, that would have expired in 2001, but
President Clinton terminated it on June 6, 2000, in recognition of “Ukraine’s steadfast
commitment to international nonproliferation norms.” The first successful commercial
launch was in October 1999. In 1998, Boeing agreed to pay $10 million for not abiding by
export regulations in its dealings with Russia and Ukraine. Separately, Ukraine signed an
agreement with the U.S. company Globalstar to launch its satellites on Zenit from Baikonur.
The one attempt failed in September 1998, destroying 12 Globalstar satellites. Sea Launch
announced plans in October 2003 to offer launches from Baikonur using Zenit beginning in
2005; the effort is called Land Launch.
India. India conducted its first successful orbital space launch in 1980. Its ASLV and
PSLV launch vehicles can place relatively small satellites in low Earth orbit. India
conducted its first commercial launch (of German and South Korean satellites) using the
ASLV to low Earth orbit in May 1999. India is developing a larger vehicle (GSLV) capable
of reaching geostationary orbit. Two test launches have been completed. The GSLV uses
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Russian cryogenic engines that were the subject of a dispute between the United States and
Russia (discussed earlier).
Japan. Japan successfully conducted the first launch of its H-2 launch vehicle in
1994, the first all-Japanese rocket capable of putting satellites in geostationary orbit.
Previous rockets used for this purpose were based on U.S. technology and a 1969 U.S.-Japan
agreement prohibited Japan from launching for third parties without U.S. consent. With the
H-2, Japan was freed from that constraint. H-2 was not cost effective, and encountered
technical problems that led the Japanese government to abandon it in 1999. A new version,
H2A, successfully completed its first launch in August 2001. In 2002, the Japanese
government announced that it will privatize production of the H2A by 2005. Mitsubishi
Heavy Industries has taken over development and marketing. H-2A launches are conducted
from Tanegashima, on an island south of Tokyo. In June 1997, the Japanese government
reached agreement with the fishing industry to allow more launches from Tanegashima.
Fishermen must evacuate the area near the launch site during launches. The agreement
extends from 90 to 190 the number of days per year that launches may be conducted, and
permits up to eight launches a year instead of two.
Satellite Exports: Agency Jurisdiction and Other Issues
Between 1992 and 1996, the George H. W. Bush and Clinton Administrations
transferred responsibility for decisions regarding export of commercial satellites from the
State Department to the Commerce Department. A January 1997 GAO report
(GAO/NSIAD-97-24) examines that decision. In response to concerns about the launch of
satellites by China (discussed above), Congress directed in the FY1999 DOD authorization
bill (P.L. 105-261) that export control responsibility be returned to the State Department
effective March 15, 1999. Which agency should control these exports remains controversial.
In the 108th Congress, H.R. 1950 (the FY2004 State Department Authorization Act) as
reported from the House International Relations Committee (HIRC, H.Rept. 108-105, Pt. 1)
would have left the decision on agency jurisdiction to the President if the export is to a
NATO country or major non-NATO ally, while exports to China would remain under State
Department jurisdiction. The House Armed Services Committee rejected that language in its
markup of H.R. 1950 (H.Rept. 108-105, Pt. 3). As passed by the House, H.R. 1950 does not
include that language.
Some of the controversy reflects concerns of the aerospace and space insurance
industries that the new regulations are being implemented too broadly and vigorously. DOD
officials and others have cited potential harm to the U.S. defense industrial base if U.S.
exports are stifled, too. One concern is the length of time needed to obtain State Department
approval. Section 309 of the FY2000 State Department authorization act (incorporated into
the FY2000 Consolidated Appropriations Act, P.L. 106-113) directed the Secretary of State
to establish an export regime with expedited approval for exports to NATO allies and major
non-NATO allies. The new rules took effect July 1, 2000. In May 2000, the State
Department reportedly notified France that it would not apply strict technology export
control on satellites to be launched by Ariane (Space News, May 29, 2000, p. 1). The
Security Assistance Act (P.L. 106-280) reduced from 30 days to15 days the time Congress
has to review decisions on exporting commercial communications satellites to Russia,
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Ukraine, and Kazakhstan, making the time period the same as for NATO allies, but H.R.
1950, as passed by the House, would change that time period back to 30 days.
The Satellite Industry Association (SIA) released figures in May 2001 showing U.S.
satellite manufacturers losing market share to foreign companies. SIA and others attributed
that loss in part to the shift in jurisdiction to State, which they assert creates uncertainty for
satellite customers over when and whether export licenses will be approved. For 2001,
however, U.S. companies won 19 of the 22 commercial satellite manufacturing contracts
world-wide (Space News, January 21, 2002). U.S. companies won three of the four new
satellites ordered world-wide in 2002 (Space News, January 13, 2003). For 2003, the U.S.
share was 9 of the 16 new satellite orders (Space News, March 22, 2004). A floor
amendment to H.R. 1950 to exempt transfers of marketing information for commercial
communication satellites from export license requirements for potential sales to NATO
countries, Japan, Australia, and New Zealand was defeated. Similar language is included in
S. 2144.
LEGISLATION
H.R. 1950 (Hyde)/S. 2144 (Lugar)
State Department/Foreign Affairs Authorization Act. H.R. 1950 reported from House
International Relations Committee (H.Rept. 108-105, Parts 1 and 2); from House Armed
Services Committee (Part 3); and Energy and Commerce Committee (Part 4); passed House
July 16, 2003. S. 1161 reported from Senate Foreign Relations Committee May 29, 2003
(S.Rept. 108-56); incorporated into S. 925, Division B during Senate debate July 9, 2003;
new bill, S. 2144, reported from Senate Foreign Relations Committee March 18, 2004
(S.Rept. 108-248).
H.R. 3752 (Rohrabacher)
Commercial Space Launch Amendments Act of 2004. Reported from Committee on
Science March 1 (H.Rept. 108-429); passed House March 4.
H.R. 4200 (Hunter) S. 2400 (Warner)
FY2005 DOD authorization bill. H.R. 4200 reported from House Armed Services
Committee May 14, 2004 (H.Rept. 108-491). Passed House May 20. S. 2400 reported from
Senate Armed Services Committee May 11, 2004 (S.Rept. 108-260); passed Senate June 23.
H.R. 4613 (Lewis)/S. 2559 (Stevens)
FY2005 DOD appropriations bill. Reported from House Appropriations Committee
June 18, 2004 (H.Rept. 108-553); passed House June 22. Reported from Senate
Appropriations Committee June 24 (S.Rept. 108-284); passed Senate June 24.
S. 1260 (McCain)
Commercial Space Transportation Act of 2003. Reported from Senate Commerce
Committee July 24, 2003 (S.Rept. 108-111).
S. 2541 (McCain)
FY2005-2009 NASA authorization bill. Introduced June 17, 2004; referred to
Commerce, Science, and Transportation Committee.
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