Fleet operators anxiously await a DoD study with high stakes for routine comms

The Pentagon kicks off an internal study this fall expected to shape how the Defense Department meets its day-today satellite communications needs for decades to come.

The in-depth study, known as an Analysis of Alternatives (AoA), will weigh whether DoD should continue to rely on government satellites for carrying the bulk of its routine imagery, video and voice traffic or invite commercial satellite operators to shoulder more of the military’s wideband burden.

The AoA could push future U.S. Air Force contracts potentially worth billions of dollars to satellite builders like Boeing, the incumbent on the Wideband Global Satcom program, or set the stage for big bandwidth deals with commercial satellite fleet operators such as Intelsat, Inmarsat, Eutelsat and SES.

At the same time, the wideband AoA is seen by some space ventures as a bellwether case, one that will show whether the Pentagon is serious about embracing new ways of doing business.

“The DoD has got to start looking at communications as something they need to buy differently,” said Rick Lober, vice president and general manager of Hughes’ defense and intelligence systems division. “For the DoD to stay current, they’re going to have to procure much more quickly.”

The AoA is slated to begin in September and take more than a year — and $8 million — to complete. A host of DoD entities, including the Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics; the Principal DoD Space Advisor Staff; and the Pentagon’s Office of Cost Assessment and Program Evaluation, are expected to play major roles.

Some space industry executives, including Inmarsat Government Services senior vice president Rebecca Cowen-Hirsch, view the Pentagon’s bandwidth needs as low-hanging fruit for a commercial satellite communications industry that has spent the past 20 years supporting U.S. military operations around the globe.

It’s also seen as an easy reach for a Pentagon that says it’s serious about finding new ways of doing business and tapping into some of the private-sector agility and innovation typified by Silicon Valley. As a result, the study is being watched by other space ventures, including NewSpace startups, hoping to sell DoD everything from Earth imagery and weather data to space protection and rapid-response launch services.

In short, they see the AoA as a litmus test that will show whether the Pentagon’s space honchos are ready to embrace new contracting techniques, vendors, and capabilities.

“We’re trying to figure out if the government is doing a good job of finding new ways of doing business,” an executive at one Silicon Valley startup, who is watching the process unfold, said in an interview. “We’re paying attention [to the wideband AoA]for that reason.”

Other space executives, including Dan Hart, Boeing’s vice president of government satellite systems, which is under contract for 10 Wideband Global Satcom satellites, view the AoA’s purpose more narrowly.

“Often times we confuse the ‘what is needed’ with ‘how do we buy it,’” he said.

Ideally, he said, the study will provide Pentagon leaders greater clarity on wideband satellite requirements — including how much protection the Defense Department needs for specific missions, especially as jamming becomes a bigger threat — and possible architectures to meet those needs.

Once that’s established, Hart said, “you can buy or lease almost anything,” he said.

“Practically, if you plan on leasing something that’s already akin to what’s being used by the commercial sector, you will more likely get a good deal on those. If you’re going to lease something that is a very, very unique, purpose-built government capability, that’s a little bit more fuzzy.”

The debate is a long time coming. In the immediate aftermath of 9/11 and the wars in Iraq and Afghanistan that followed, the Defense Department bolstered its satellite communications networks by buying bandwidth from commercial satellite operators on the spot market. The U.S. military’s reliance on commercial satellite operators jumped 800 percent from 2001 to 2011, according to a 2015 U.S. Government Accountability Office report. But operators said the acquisition process was often inefficient, causing the Pentagon to overpay or buy more bandwidth than it needed.

Those same operators have been seeking assurances they will be a part of the Pentagon’s long-term plans as they pour private capital into next generation systems.

They see the upcoming analysis as an inflection point.

Current Wideband Needs

The Air Force’s current wideband needs are met through a mix of WGS satellites and commercial satellite operators.

The Air Force selected Boeing in 2001 to build up to six WGS satellites to replace the military’s legacy Defense Satellite Communications System and Global Broadcast Service satellites with modernized spacecraft offering 10 times more bandwidth. Boeing’s deal has since morphed into 10 satellites, including the sale of two WGS satellites to Australia and a five-nation European-led coalition in an arrangement that gives these allies access to the full constellation. According to Avascent Analytics, the Defense Department has invested roughly $8 billion in WGS, with about half that total going into WGS terminals and other ground equipment.

Seven WGS satellites (including one for Australia) have been launched since 2007 with the final three WGS spacecraft slated to launch between September and the end of 2018. The constellation achieved full operational capability in March 2014 after the first five satellites were on orbit. As requirements have evolved, the Pentagon has added improved anti-jamming capabilities on the latest satellites.

DoD’s remaining wideband needs are met through commercial satellite operators such as Intelsat, Eutelsat, Inmarsat, SES, and Telesat. Exactly how much bandwidth comes from government satellites versus commercial satellites is unknown, according to a 2015 Government Accountability Office report.

The AoA is expected to evaluate the Defense Department’s options for meeting its wideband needs a decade from now when a majority of the WGS satellites will be beyond their design life at the same time commercial operator’s newest high-throughput satellites are entering service.

Before the Pentagon kicks off a billion-dollar satellite program — or any big military acquisition, for that matter — Defense Department officials uses AoAs to examine at least three feasible approaches to meeting its needs.

Satellite builders and commercial fleet operators alike have been angling to shape the framework of this analysis. Rep. Jim Bridenstine (R-Okla.), a member of the House Armed Services Committee, sent a letter to Air Force Secretary Deborah Lee James in February outlining his expectations for the wideband AoA.

Bridenstine asked the Air Force for a “robust examination” of commercial capabilities, apples-to-apples cost comparison between government and commercial satellites, and a transparent process, according to a copy of the letter, obtained by SpaceNews.

In several closed-door meetings last year, lawmakers, industry representatives and Pentagon officials met to discuss ways for the DoD to buy bandwidth instead of satellites. According to attendees, Winston Beauchamp, the director of the Air Force secretary’s space staff, told the group he has no preconceived notions about what should come after the current crop of WGS satellites. Commercial satellite fleet operators, who had been alarmed by briefing slides suggesting the Air Force Space and Missile Systems Center in Los Angeles was considering refreshing the WGS constellation with the purchase of at least three more satellites, have viewed Beauchamp’s assurances that they’re getting a fair shake.

Since then, Beauchamp has reiterated in interviews, speeches, and panel discussions that the Pentagon’s future wideband needs mix of government and commercial satellites.

Myland Pride, director of government affairs for Intelsat General Corp., the subsidiary of satellite fleet operator Intelsat serving government and commercial customers, said the Pentagon is “being as open as they can” about the AoA process and asking for unprecedented levels of input from industry.

Craig Cooning, president of Boeing’s Network and Space Systems, said during the Satellite 2016 trade show in March that the company is largely agnostic about the path the Pentagon. While Boeing builds WGS satellites — and certainly wouldn’t object to building more — it’s also building the high-throughput satellites Intelsat, Inmarsat and ViaSat are positioning as commercial alternatives to WGS.

“Since we play in both markets, we’re happy to work it either way,” he said.

But Cooning, a former Air Force general who worked in space acquisition, said WGS’s unique capabilities allow combatant commanders to deploy fewer terminals, often cited as the most expensive element of satellite communications. WGS also provides anti-jamming technology that “makes it a good value for the Department of Defense,” he said.

By moving to a greater mix of commercial satellites, “you’re going to give up some of that flexibility WGS has, you’ll build it just like WGS and guess what? It’ll cost the same, since we build both.”

Boeing‘s Hart said in a recent interview he worries that as a result of the attention the wideband AoA is getting from industry, the issue of a next-generation wideband system “is getting too politicized.”

AoA_Slide7_7.4.16Finding Broadband Solutions

The study is not the Air Force’s only effort to find new ways to buy bandwidth.

In 2014, the Pentagon began the CommercialSatel lite Communications Pathfinder program to experiment with new ways of buying satellite capacity. The Air Force awarded an $8 million contract for the first Pathfinder to SES Government Solutions in July 2014 and the Air Force is set to award a contract later this year for the second Pathfinder, which calls for the up-front purchase of transponder capacity on commercial satellites to support intelligence and surveillance missions. Both Pathfinders will be ongoing as the Pentagon completes the wideband AoA.

In addition, the Pentagon’s 2017 budget request includes planned funding for a third, fourth and fifth Pathfinder, the last of which won’t begin until 2019 — well after the wideband AoA is expected to be completed.

A third pathfinder would essentially help the Air Force design multi-modem hardware that would, for example, allow for an airplane to seamlessly switch from one satellite broadband provider to the next as it crosses the globe.

“One of the areas that needs further exploration is terminal flexibility,” the Air Force said in May 20 request for information. “DoD terminals must be able to ‘flex’ from one satellite network to another for a variety of reasons; however, this is currently hindered by the proliferation of managed service networks using proprietary modems and waveform technologies.”

The fourth and fifth experiments in the series call for considering a “pooled” bandwidth approach and evaluate high-capacity satellites using a test vehicle.

“The Pathfinders are a great example of things that can be done,” Hughes’ Lober said, calling the Air Force Space and Missile Systems Center’s leadership team the “most forward looking” in years. “I just wish they could move a little quicker.”

The fourth and fifth experiments are not expected to kickoff until 2018, when the wideband AoA should be largely complete. This timeline has led many, including the Government Accountability Office, to question whether these experiments are out of sync with the Air Force’s need for answers.

“It will be several years before DoD gains enough information and experience from its pathfinder efforts to determine what, if any, changes to make to its acquisition approach,” the GAO said in a July 2015 report on military satellite communications.

Pentagon officials said information from the Pathfinders would continue to help Air Force leaders shape its approach to buying commercial satellite bandwidth even after the AoA is complete.

At the same time, some operators argue the Pathfinder experiments are only a slight variation on what the Air Force has already been buying for a decade or more. They point out the experiments do not call for buying new technology or new systems until much later in the process.

The Pathfinders “focus on acquiring legacy, incumbent satcom — buying the same Ku-band differently,” said Ken Peterman, executive vice president of satellite broadband provider ViaSat’s government satellite division. “The first Pathfinder that demonstrates new satcom systems isn’t planned until 2019 — well past the [completion date for the] wideband AoA. This is unfortunate for all concerned.”

Industry officials argue that the DoD might also not have much of a choice but to work with new satellite technologies as more commercial operators move to high-throughput satellites.

“It’s not a killer to the analysis,” that the later Pathfinders are not included in the AoA, Lober said. But, “it would just be nice if they were included.”

Without change, the DoD could soon face trying to buy bandwidth in ways that would no longer exist, like trying to buy a few megabytes of data on a cellphone plan that only deals with gigabytes.

This means some in industry, like the executive from a space startup who is watching the study, believe the issue is not whether the Pentagon can become an eventual customer, but the pace at which the Pentagon will embrace newer, commercial approaches.

Defense Department officials say this won’t be a problem.

“There really is a commitment on the part of all of DoD to use commercial wherever it is the best approach,” Beauchamp’s deputy, David Hardy, said at a budget forum in February. “I’ve seen no reluctance on the part of DoD leadership to consider the full range of options, including commercial.”

The proof could come in the wideband AoA, although these studies are rarely released to the public. Officials also point out that the results of the AoA are not binding and that the purpose is to present a range of options to shape the requirements and acquisition process.

Since the AoA probably won’t be finished by the time the Air Force sends its budget request to Congress early next year, it will likely be 2018 before the service signals which way its headed after WGS.

WATCH NOW: Winston Beauchamp discusses next-gen satelliteswith SpaceNews’ Mike Gruss during a video interview.