Inside the new satellite economy lives the old economic principle of supply and demand. With large constellations from Teledesic, Celestri, and SkyBridge, there will be no shortage of demand for launch rocket and launch pad space. That raises the question of the supply - and a once-languishing aerospace industry is only too happy to help.
Projects for reusable rockets and other launch vehicles, satellites, and launch pads are breathing new life into defense contractors struck low by the post-Cold War contract drought. They're also giving younger commercial developers the nourishment to grow and thrive in the new economy. These companies are in turn acting as a catalyst for turning mammoth, pie-in-the-sky networks into realities.
And the space-bound bandwidth barons are taking notice.
"Today we are witnessing a dramatic shift in the satellite industry," David Montanaro, vice president of Teledesic Corp., told the House subcommittee on space and aeronautics in June 1996. "Just as networks on the ground have evolved from centralized systems built around a single mainframe computer to distributed networks of interconnected PCs, space-based satellite networks are evolving from centralized networks relying on a single geostationary satellite to distributed networks of many interconnected low-earth-orbit satellites."
The new satellite economy echoes another revolution - the silicon one. Back in the early 1950s, when Fairchild Semiconductor started developing silicon-based chips in an area of California's Santa Clara Valley formerly deeded for agriculture, a new industry sprouted up and its seeds also took root in Seattle, Austin, even Tokyo and Calcutta.
Like those early days of Silicon Valley, the bounty from the satellite economy is having a similar boom-town effect, only this one is spreading its wealth around the globe at an earlier stage. Just as communications developments have made the world seem smaller, time and distance in the satellite economy grow more compact. And as the satellite constellations strive to blanket Earth, the new, commercialized space industry is branching out all over the globe in lockstep.
"Just as Silicon Valley developed, we're trying to create a situation where the small developer can have a state-funded facility so they don't have to assume all of the investment," said Don Smith, retired director of the California Space Port Authority. Bigger companies, he said, want the return without the risk of such nascent technologies.
But returns seem promising since the satellite launches are happening faster than expected. "If you look at market forecasts, all of them underestimated the satellites and launchers that would be needed in the coming five years," said Juan de Dalmau, an engineer at French rocket developer Arianespace. "Which is good news for all the players."
With cutbacks from NASA and the US Defense Department, the aerospace industry needs the new business badly. The new space race has one key difference: heavyweights such as Boeing, Lockheed-Martin, and McDonnell-Douglas no longer have a cozy, government-funded control of the market. Up until now, the Defense Department had been the primary contractor for space launches, leaving little incentive for using cheaper, reusable rockets and launch vehicles.
Instead, a bevy of smaller, more specialized start-ups have sprung up to offer lower-cost and reusable launches. In fact, the US government itself - starting with the Commercial Space Policy, drafted in 1991 and revamped last year - has helped jump-start the new market by transferring government-developed technology to the private sector and offering grants and other incentives to would-be commercial developers.
"When you're looking for hundreds of millions, the government is a nice place to go. But then you're stuck with meeting government regulations," said Paul Gloyer, a senior engineer with commercial launch rocket developer AeroAstro. Said James Arnold, director of the California Space Institute in San Diego. "Practically all the small companies are going the private funding route."
The flurry of commercial activity, both in the US and elsewhere, has primarily concentrated on developing more launch pads and more cost-efficient launch vehicles and rockets. Even so, observers still expect a shortfall in the resources needed to launch and maintain the untold number of new satellites. Consider, for instance, that the Iridium, Celestri, Globalstar, SkyBridge, and Teledesic systems collectively plan to launch about 600 satellites in the next five years. In all, the Federal Aviation Administration says, more than 20 LEO systems plan to launch 800 satellites over the next five years. However, many of these are still in a planning phase and have FCC licenses pending.
Since the US federal government owns the only launch pads - on existing government installations run by NASA (the Kennedy Space Center in Florida) and the Air Force (Vandenberg Air Force Base in California) - some observers speculate that it could become a commercial space player itself.
"Our biggest concern is competing with the US government, even though they have policies in place to say they won't do it," said Earl Severo, CEO of Space Port International, which is building a specialized launch facility for small- and medium-sized rockets at Vandenberg Air Force Base in California. "I think the government is realizing that the commercial market will outpace the military market 3 to 1 when it evolves," he added.
The only active launch sites internationally are in Japan, China, Russia, and Europe's spaceport in Kourou, French Guiana. To meet the increasing demand for launch pad space, all of the these sites are trying to reduce launch costs and the amount of time it takes to launch rockets. "All modern launch facilities want to get the cycles way down. It's about 30 to 45 days now, and we want to get it down to six to 10 days," said Severo.
The reason for this emphasis on winnowing down the time are the logistical hoops companies such as Teledesic have set out before them. Looking at the current class of systems readying for launches around the 2001 timeframe, much rocket and launch pad space will be needed. Teledesic is pledging 288 satellites and spares; Celestri, 63; SkyBridge, 64.
Consider that Motorola's Iridium project pledged to launch 66 satellites over a 21-month period. After the first 10 months, a period where the first launch did not lift off until May due to a 4-month moratorium on Delta II launches, the company has managed to just crest the half-way point, reporting 34 satellites currently in orbit.
Teledesic co-funder Bill Gates, at a press conference in Russia last week, fielded a question on the Teledesic project and the possibility of using Russian rockets and pads, which are currently the most inexpensive on the market. To achieve its goals, Gates said, Teledesic has discussed launch scenarios with at least two Russian groups.
"One is the Boeing Sea Launch group that has a particular approach, and the other is this idea of possibly taking weapons that have to be decommissioned and making use of those as a launch vehicle," Gates said.
It's not unusual to spend upward of $50 million to launch one expendable rocket - driving up the total cost of a launch to about $10,000 per pound. Since the constellation projects plan to load multiple satellites on each rocket, the payload weight will range anywhere from 500 pounds to 50,000 pounds, making cost per pound a crucial cost-reduction point. Several companies are trying to develop rockets and planes that will carry payloads beyond the atmosphere, and then return after depositing the satellites into polar orbit. One such "reusable rocket" design is the Rocketplane, being developed by Pioneer Rocketplane, a small company in Lakewood, Colorado.
"Basically, we're looking for reusability where it's not hard to implement in the first stage, where it's much more important, and then release a small upper stage, which is expended," said Robert Zubrin, the scientist and designer behind Rocketplane.
Although there is little doubt that new rockets and launchers will eventually be developed, a market shift of this magnitude isn't likely to happen overnight.
"The cost of access to space is an issue - it's pretty price-inelastic," said Teledesic president Russell Daggatt. "If launch suppliers cut prices in half, they'd receive only half the revenue. As the cost of access to space comes down, this will change."
