Date: Fri, 28 May 93 14:34:21 From: Space Digest maintainer Reply-To: Space-request@isu.isunet.edu Subject: Space Digest V16 #643 To: Space Digest Readers Precedence: bulk Space Digest Fri, 28 May 93 Volume 16 : Issue 643 Today's Topics: Commercial Space News #23 [Part 1] Welcome to the Space Digest!! Please send your messages to "space@isu.isunet.edu", and (un)subscription requests of the form "Subscribe Space " to one of these addresses: listserv@uga (BITNET), rice::boyle (SPAN/NSInet), utadnx::utspan::rice::boyle (THENET), or space-REQUEST@isu.isunet.edu (Internet). ---------------------------------------------------------------------- Date: 27 May 93 21:28:38 From: Wales.Larrison@ofa123.fidonet.org Subject: Commercial Space News #23 [Part 1] Newsgroups: sci.space SPACE TECHNOLOGY INVESTOR/COMMERCIAL SPACE NEWS -- No. 23 This is number twenty-three in an irregular series on commercial space activities. The commentaries included are my thoughts on these developments. I've managed to get moderately caught up, and been able to cover most of the major happenings in commercial space developments -- but I've had to skim past lots of interesting data of lesser importance without noting it here. Glancing through what I've compiled, this issue seems to pretty much concentrate on recent happenings with space transportation systems and communications systems. And while I've sifted out many items, the batch for this column is still pretty long. I'll work at keeping this down to a readable length. Have fun! CONTENTS 1- SOUTH AFRICA SHUTS DOWN COMMERCIAL LAUNCH VENTURE 2- BRAZILIAN LAUNCH TESTS STAGES FOR SPACE LAUNCHER 3- INMARSAT LOOKS AT GLOBAL PERSONAL COMMUNICATIONS SYSTEMS 4- INTELSAT LEASES RUSSIAN GEO SATELLITES 5- USAF "SPACE LAUNCH GRANTS" TARGET DUAL USE LAUNCH INFRASTRUCTURE 6- IRIDIUM SIGNS UP INVESTORS FOR LEO CONSTELLATION 7- OSC LINES UP FINANCING FOR ORBCOMM 8- LOCKHEED NOW SELLING SMALL LAUNCH VEHICLE 9- COMMERCIALLY DEVELOPED SPACE WAKE SHIELD READIES FOR FLIGHT 10-OTHER NASA SUPPORTED COMMERCIAL VENTURES ENCOUNTER PROBLEMS 11-AEROSPACE FIRMS PLAN JOINT STUDY OF COMMERCIAL SPACE MARKET 12-INDEX RESULTS THROUGH APRIL 1993 FINAL NOTES ARTICLES ------------------------------------------------------------------- 1- SOUTH AFRICA SHUTS DOWN COMMERCIAL LAUNCH VENTURE In early April it was reported the South African government had terminated its program to develop a space launch vehicle and market it for the commercial launch market. Their system, very similar to the Israeli Jericho and Shavit rockets, was expected to be ready for its first launch within about 18 months. [Commentary: This proposed new launch system has been the focus of some intensive behind-the-scenes discussions between several nations. As late as the end of March, President de Klerk of South Africa stated: "We think there is viability with regard to the satellite program for peaceful purposes and we would like that program to go ahead." But the US and other western nations have been quietly putting pressure upon the South African government to stop this venture, working within the framework of the Missile Technology Control Regime. The concern with the a commercial South African launch system was it could also be used to develop missile technologies and techniques for a system capable of delivering nuclear devices, or that the technology could be sold to other nations as the basis for other missile weapons systems. Recent reports on the South African nuclear program had given emphasis to these negotiations. (In later developments, President de Klerk revealed in related discussions on the status of the South African nuclear program that the South African government had completed 6 nuclear weapons, but had since dismantled them and the production infrastructure for future weapons). Apparently the pressure from the US and other nations had a significant effect and the South African government stopped supporting the launch vehicle program. Denel, a "privatized" arms manufacturer spun off from the South African 'Armscor' weapons conglomerate, had been developing the launch system. As of a several months ago, they had been looking for a major international partner to underwrite the system development or provide a sufficient market base to make the system financially feasible. They have not been able to locate such a partner outside of the South African government. When the South African government pulled out, the project is essentially dead. Without the deep pockets of the South African government, and without key customers to make the venture viable, it becomes too expensive politically and financially to continue in a highly competitive world market. At best Denel found partners and investors from outside South Africa were needed, and under the MTCR restrictions, it was impossible to obtain a commitment from them. This article illustrates some potential pitfalls and problems with other national launch systems. Without significant backing from a national government, purely commercial launch systems will have a hard time breaking into the world launch market, as they will have a hard time attracting investors and users, particularly under the MTCR.] 2- BRAZILIAN LAUNCH TESTS STAGES FOR SPACE LAUNCHER On 2 April, the Brazilian government carried out a successful test of technology being developed for a small space launcher. A VS-40 rocket launched from the Alcantara test site at the Brazilian military air base at Alcantara carried solar monitoring instruments to an altitude of 1248 km . The rocket, flying a high suborbital trajectory, landed in the Atlantic about 1920 km downrange off the Brazilian coast near Natal. This event was also used by Brazilian president Itamar Franco to announce his government will create the Brazilian Space Agency. "The project will be sent to the National Congress, and we will ask that it be considered urgently" he announced after witnessing the launch. [Commentary: Brazil is gradually moving towards development of a small national space launch vehicle, called the VLS (Veiculo Lancador de Satelites). The VS-40 was constructed from the S40TM and S44 motors planned to be used in the third and fourth stages of the VLS, and this flight was designed to test their performance. The first and second stages of the VLS are planned to be five S43 motors which were not tested on this flight, presumably as the S43 has been used very successfully in the flight-proven Sonda 4 sounding rocket. The VLS is projected to be capable of placing a 150 kg payload into a 750 km orbit at 25 deg inclination, with a cost comparative to other small launch vehicles. Current plans have the first launch of the VLS in 1995 or 1996, carrying the Brazilian SSR- 1 remote sensing satellite into orbit from Alcantara. I'm noting this event of interest to commercial space investors, as it is another indication of how widely the technology to launch small payloads is spreading. There is a proliferation of small launch systems coming onto the market, and small commercial launch systems such as IMI, PacAstro, and Pegasus will have to compete with these small national launchers for market share. If the new Brazilian space agency (which I find referenced to with the acronym of "AEB") is instituted, it will replace the current Brazilian Commission for Space Activities. The AEB would operate under the direction of the Secretariat of Strategic Affairs and will coordinate and promote space activities in Brazil. This would presumably be the point of contact for any commercial use or marketing of the VLS. Brazil is also marketing the Alcantara range, just two degrees south of the Equator, for use by other launch systems. Payloads placed into orbit from Alcantara get substantial advantage from the Earth's rotational velocity and can achieve some propulsion savings (or payload increases) over other launch sites at higher latitudes. It is rumored Brazil has approached manufacturers of other small launch systems to use the Alcantara range -- including Orbital Sciences and Lockheed/Khrunichev. But the use of a Brazilian launch site will be a difficult sell on the international market. For example, under the U.S. government regulations intended to help control the spread of missile technology (the MTCR), dealings with the VLS launch system are specifically called out as reason for careful review of any export licenses from US firms. (The Brazilian Sonda III, Sonda IV, SS-300, SS-1000, and MB/EE Series Missiles were also specifically identified in the MTCR regulations). These regulations, within the MTCR framework, identify destinations and projects of concern for missile technology transfer under Supplement Six of Part 778 of Bureau of Export Administration rules. This is not a blanket prohibition of exports, but notes exporters need to take special care in doing business in certain regions and countries to avoid participating in or contributing to missile-related activities, including the identified Brazilian programs. Other countries launching from this site would not be able to launch US satellites or use US components in their systems or satellites. This will greatly increase the difficulty of using Alcantara. While it is possible that Brazil could join the MTCR, and agree to operate under its terms, the government of Brazil has yet to join. Use of Alcantara would require a specific ruling, and adds another obstacle to any such commercial venture.] 3- INMARSAT LOOKS AT GLOBAL PERSONAL COMMUNICATIONS SYSTEMS Inmarsat, the International Maritime Satellite organization, is examining ways to best serve the global hand-held communications market. With 67 member countries, Inmarsat currently provides worldwide maritime, land and aeronautical mobile satellite communications services, and as part of its Project 21 is looking at how best to adapt to expected market changes in the next two decades. Global personal telecommunications have been identified as an area in which Inmarsat's market may grow and substantial changes may occur. To examine how Inmarsat may best adapt to the changing market, contracts have been placed with the communications satellite industry to assess how Inmarsat can best provide services and to quantify what market is to be addressed. Three different global satellite constellations are being considered for "Inmarsat-P", including global personal communications systems in geostationary orbit (GEO), in intermediate circular orbit (ICO), and in low Earth Orbit (LEO). Two contracts have been let for each constellation/ orbit to look at the size of the handsets or personal communicators used, the power requirements needed, and the service capabilities needed in the satellite system. Martin Marietta Astro (was GE Astro)/ Matra Marconi and Hughes/ British Aerospace/ NEC will look at GEO systems. Matra Marconi/Martin Astro and TRW will look at ICO, and the Alliance (Aerospatiale/ Alcatel/ Alenia/ DASA) and Antrix will look at LEO. Work will be completed by May to review at the Inmarsat governing council meeting in July. [Commentary: The Inmarsat studies are to re-assess the optimal approach to provide global personal communications. Over the past decade other studies have looked at all of these options and come up with differing answers. The current paradigm is LEO constellations can offer the best services within the constraints of satellite/constellation manufacture and launch costs, and recurring constellation maintenance costs. However this paradigm is dependent upon several specific assumptions, and most of the LEO constellation solutions currently proposed focus on providing services to very lucrative market areas (like the US), or are driven by system funding constraints. In contrast, Inmarsat has access to potentially a large pool of resources from its member countries and organizations, has already been granted regulatory approval to provide communications between numerous individual mobile users, and is chartered to focus on a global solution rather than for the most lucrative and developed markets. This may change the outcome of their studies and change the preferred approach from a constellation of small LEO satellites. A GEO personal communication system would only need only a few powerful satellites to cover the globe. In comparison, a system in lower, intermediate orbits will require a dozen or so satellites at 10-15,000 km distributed over several orbital planes. And to provide the same services in LEO could require several hundred small satellites for continuous global coverage. The key trade off will be cost of putting up the constellation versus the recurring cost of maintaining such a constellation. The teams looking at GEO systems have the hardest job in defining such a global system -- they have to operate over the longest distance and require high power levels, large antennas and highly sophisticated satellites. But their technology and technical approaches are well known and they have a wealth of operational experience. Hughes is already on record saying they could provide the equivalent of an Iridium LEO constellation with just 3 large GEO satellites. The Hughes/BAe/NEC team and the Martin Astro/ Matra teams are expected to focus heavily on satellite power requirements, the GEOsat antenna configurations to receive and differentiate between many low-powered hand-held sets, and the signal processing methods to accommodate individual users. In the ICO arena, it appears while Martin Astro is leading the Martin Astro/Matra team for GEO sat systems, Matra is leading the inverse team for ICO. They are matched by TRW who has an FCC application pending for their own "Odyssey" ICO communications constellation of 12 satellites operating at 10,300 km. I rather expect TRW's Inmarsat constellation to look a lot like Odyssey. LEO systems are a more interesting arena. On one side there is a large consortium of European satellite technology houses, matched by Antrix Corp. Ltd., the corporate front for India's government- sponsored space industry. I note no US firms really pursued this area, presumably as the majority of their attention is upon the on- going race to get FCC approval for launch and operation of their own systems. Stepping back from these imminent changes in the market, some industry analysts place another agenda behind Inmarsat-P. Inmarsat is an intriguing operation -- they are the second largest purchaser of commercial satellites (after Intelsat, another international telecommunications organization) and have been very proactive in changing Inmarsat's operations and offerings to best fit into a rapidly changing marketplace. Besides the Project 21/ Inmarsat-P activities, there are recurring rumors Inmarsat is also discussing possible moves towards privatization. The rumors describe two potential options for Inmarsat; transforming the organization into the majority shareholder in a new private satellite service provider, or transforming Inmarsat itself into a private commercial entity. These rumors have prompted protests from their competitors claiming Inmarsat is trying to gain the revenues and profits of a privately held operating firm (above Inmarsat's current regulated rates and returns as an quasi- governmental international consortium) while retaining Inmarsat's regulated position in the international market. Such a massive change in Inmarsat's structure is just a rumor, but if they move towards such a change, and also institute the Inmarsat-P system, then fledgling US LEO communications companies might have a much more difficult and limited market to compete in.] 4- INTELSAT LEASES RUSSIAN GEO SATELLITES Intelsat announced on 17 March it had entered into an agreement with InformKosmos of Russia for options to lease up to 3 Express GEO communications satellites beginning in mid-1994. Intelsat (the International Telecommunications Satellite organization) is the largest user and operator of GEO satellites in the world, operating 19 GEO satellites, and acts as an international non-profit cooperative of 125 national entities to provide telecommunications services between 180 countries. InformKosmos was established by the Russian government to develop and market the Express satellite, which is a follow on to the Gorizont satellite. Each geosynchronous Express platform will carry 10 C-band 36 MHz transponders and two Ku-band 36 MHz transponders. [Commentary: InformKosmos is a quasi-governmental venture established by the Russian Federation to design, control, manufacture, own and finance the Express satellites series. In 1993 the Russian Republic budgeted about 17 Billion Rubles (about 1/3 of the total civil space budget) for developing and procuring next generation communications satellites to upgrade the Russian Federation's antiquated telecommunications systems. At least 10 new Express communications satellites are planned to be bought for, this program and additional GEO communications satellites and the usage of the transponders on them are being very actively marketed to international customers by InformKosmos and NPO PM (Applied Mechanics). Intelsat's use of Russian Express satellites can be interpreted as a move to acquire additional inexpensive transponder time and to make a preemptive move to ward off lower-cost competitors for international telecommunications. InformKosmos has a major effort ahead to replace the aging and old-technology ex-Soviet GEO systems -- yet it has been operating pretty much on a barter-in-kind financial basis. Intelsat and other organizations with hard Western currencies (like Rimsat and InterSputnik, now backed with German marks -- See CSN/STI No. 18) have obtained very favorable terms for future GEO satellite option by dealing with InformKosmos. This news note is also significant in it establishes a key precedent -- a Russian enterprise has essentially sold an end-to-end space system, including Russian launch and Russian hardware, for hard currency. As an interesting side note, for the planned upgrade of the Russian telecommunications, InformKosmos is planning to launch 10 of Express GEO satellites plus 4 of an upgraded Express model (Express-M), plus 5 Gals direct broadcasting satellites with Ku-band capacity, plus 5 Arkos (GEO) and 4 Maiak (Glonass orbit) satellites in the Marathon navigation and mobile communications system. Adding in the current launches planned for Gorizont C- and K-band communications satellites and the Ekran direct broadcasting satellites, this is over 35 launches planned to occur in the next 3- 4 years, all on Proton launch vehicles. This provides a significant production run of that launch vehicle, but has prompted other users to ask rhetorically "Are there any Protons left for commercial customers?" ] 5- USAF "SPACE LAUNCH GRANTS" TARGET DUAL USE LAUNCH INFRASTRUCTURE The US Air Force is offering $10 M in grants to develop new dual use (DoD and commercial) launch facilities. According to the 8 April Commerce Business Daily which lists upcoming business opportunities with the US government, the USAF will fund up to 75 percent of the total cost of projects designed to improve the US launch infrastructure, up to a maximum of $2 M per grant. Typical candidate projects for such grants include technical studies of how new or improved DoD space launch facilities can meet commercial needs, the design of such facilities, and the construction of or improvement of facilities within the U.S. [Commentary: Much of the current interest in new US commercial launch sites has been driven by the expected availability of these "space grant" funds. The USAF had $10 M set aside in the FY 1993 DoD budget for such grants, and this CBD announcement announces the availability of these funds for interested parties. I expect it will be quickly oversubscribed. The Space grant program is a follow-on to the "Commercial Space Competitiveness Act" proposed by Rep. Ralph Hall (D-Texas) and Rep. Robert Walker (R- Pennsylvania) during last year's Congressional term. The act was approved by the House Science, Space, and Technology Committee last July, but funding for FY93 was put into the Defense budget due to near-term budget problems restricting the amount of funds available. The responsibility for future grants will shift to the Department of Transportation's Office of Commercial Space Transport when funds are appropriated in the future. Space Grants are expected to be pursued by the usual list of suspects -- Spaceport Florida, the Hawaiian Space Office, the California Spaceport, a group looking at launching from an offshore Platform off Alabama, and a group in New Mexico looking at using White Sands. Of these proposers, Spaceport Florida is probably the most well developed -- having proposals on the shelf for specific launch site improvements to benefit commercial launches. The California Spaceport group is looking at improvements to VAFB to support commercial flights for LEO communications constellations and has a good chance of getting some grant money if they manage to get a proposal together in time. The other groups are looking for study money to further refine their ideas on how to put in a commercial launch site. If the funds are available in the USAF pool, and if they can show some other financial backing (remember the grants must be matched 25% from other sources), they might get some grant funds to continue their efforts. . I also expect several new bidders to show up since there is now real money available. I'm keeping my ears open, as there ought to be more data coming out as the grant proposals are filed.] 6- IRIDIUM SIGNS UP INVESTORS FOR LEO CONSTELLATION Twenty Japanese firms announced in mid April they were forming a new joint venture to invest into the Iridium LEO communications satellite system. The jointly held firm will be capitalized at 15 B Yen (US$ 132 M), and includes participation from Sony, Mitsubishi, Kyocera, and DDI (A long distance Japanese phone carrier) as well as Motorola. The exact kinds of services and products to be provided by the Japanese partners have not been finalized according to Motorola. [Commentary: Another significant step ahead for Iridium, as they continue to line up the investors needed to get their venture off the ground. I've been following Iridium with particular interest since it is the most technically advanced LEO constellation being proposed, the physically largest LEO constellation system proposed (there's another larger system being discussed, but they haven't yet filed with the FCC), and since Iridium has been most active in searching out external financial investors and international partners. Motorola/Iridium has signed up about $800 M in direct investment for their LEO constellation, which puts them within striking distance of their target capitalization. While the overall constellation will cost about $3.4 B, Iridium is following a plan that only requires it to sell about $1.0 B in initial investment shares, with the remainder to be financed through the debt markets. The announcement of $138M in Japanese financial backing on top of the existing commitments should put them in relatively good financial shape, assuming they get their regulatory problems with a suitable frequency allocation resolved. While the International Telecommunications Union (ITU) has agreed to allocate a global range of frequencies for such systems as Iridium, the specific allocation within the US by the FCC has been tied up in conflict with other LEO constellations. Iridium desires to use a Time Division Multiple Access (TDMA) format for their signal, whereas all of the other ventures proposed for LEO constellations have requested a Code Division Multiple Access (CDMA) format. According to most experts, these two techniques for using the frequency band are incompatible, and if Iridium is granted license approval to operate, they will need exclusive access to a large chunk of the available spectrum. The other systems claim their approach would allow each company to use all of the spectrum at the same time. All of the proposed US LEO constellation firms have been meeting in a "Negotiated Rule Making Advisory Committee" trying to hammer out a workable frequency sharing scheme to use. Unfortunately, they apparently have deadlocked on how to divide the spectrum and have not been able to come to an agreement. Now, the issue is being handed back to the FCC for a decision that may or may not take into account each applicants' recommendations. (This in itself is a setback, since this is only the second case I can identify where the FCC gave the applicants a chance to draft their own license language, instead of the FCC ruling on it alone. This may discourage the FCC from trying this approach again in the future.) Most importantly, not resolving this issue adds a bit of financial and technical risk to all of the LEO satellite constellation schemes since they will have to adapt to the new regulations when they are issued. And until the spectrum allocation is completely resolved specific designs and performance of the systems cannot be completed and assessed. Rules are expected to be issued within a month or so by the FCC, which may trigger some additional changes in the market. As a final note, it is interesting to note the rather broad response from the Motorola/Iridium offering from Japanese industry. I had originally seen only reports of about 10 Japanese firms showing interest in this joint venture, and was rather surprised to see 20 firms sign on. Part of the increased interest may be explained as Motorola has significant market presence in Japan for wireless communications systems (phones, pagers, etc.), and is widely recognized as the leader in such services. There was some speculation the Japanese partners in Iridium are looking to tap into the global wireless communications services just appearing, and to maintain market parity with Motorola and other innovative US wireless service providers. If so, a shrewd business move. ] 7- OSC LINES UP FINANCING FOR ORBCOMM In related news, Orbital Sciences Corp. (OSC) announced it had obtained the balance of the financing needed for its Orbcomm global digital satellite data communications systems. A MOU (Memorandum of Understanding) was signed in late April between OSC and Teleglobe Inc. of Montreal, Canada to provide $80 M for this venture. Orbcomm is a proposed system of 26 small LEO satellites to provide 2-way transfer of short digital messages between inexpensive pocket-sized communicators. OSC has carried out the launch of 2 prototype Orbcomm systems, the most recent being orbited as a piggyback payload on the Pegasus launch of a Brazilian Earth Observation satellite. Under the MOU, Teleglobe will provide $80 M towards the $135 M total cost of Orbcomm and will operate a new company, ORBCOMM International Corp., to establish and operate licensee-based Orbcomm system networks outside the U.S. OSC will provide the other $55 M needed and is responsible for operation and control of the satellite constellation. OSC is also responsible for marketing Orbcomm in the U.S. and for obtaining a Federal Communications Commission (FCC) operating license. The deal should be finalized in June, and OSC hopes to receive full FCC approval in the third quarter of 1993. [Commentary: OSC has also been very active in pursuing financial and market partners for their LEO constellation. This MOU indicates OSC has now lined up all their venture's financial needs, except final FCC approval. FCC approval should not be a problem since the companies proposing "Little LEO" constellations have all agreed upon an approach to allocate the frequencies needed for their services - in contrast to the rancor and disharmony between the "Big LEO" constellation firms. These "Little LEO" systems provide limited services compared to the "Big LEO" systems like Iridium, and do not attempt to provide full real-time voice and data communications services. In return, their costs and complexities are much less. For example, Orbcomm is estimated to cost about $135 M versus $3,400 M for Iridium -- which translates into a projection that Orbcomm only needs about 40,000 subscribers to reach break-even versus 1,000,000 for Iridium. Furthermore, with a less complex and expensive satellite to build, Orbcomm expects to rapidly build, launch, and populate their LEO constellation. Orbcomm expects to be able to operate their constellation for several years before the "big LEO" constellations enter the market, giving them a head start in lining up customers. OSC hopes to have the first 2 Orbcomm satellites in orbit by the end of this year, with the remaining 24 to be launched in 1994. Teleglobe, OSC's primary Orbcomm partner bring some significant market strengths to the partnership. Teleglobe is the world's 5th largest telecommunications provider, and had revenues of over US$ 1 B in 1992. OSC has been very active in signing up international partners to sell Orbcomm services and provide Orbcomm data sets, but Teleglobe will bring added market knowledge and specific skills to market these services worldwide.] 8- LOCKHEED NOW SELLING SMALL LAUNCH VEHICLE Lockheed Corporation announced it is entering the small satellite launch market in early May as they unveiled plans for a new family of small launch vehicles designed to launch from 2300 to 8000 lb. payloads into LEO. According to Lockheed's announcement, the system would be available to customers in early 1995. Three configurations of the Lockheed Launch Vehicle (LLV) are planned using different combinations of off-the-shelf solid rocket motors from Thiokol and United Technologies. The smallest vehicles, the LLV1 and LLV2, are combinations of Thiokol's Castor 120 motor and United Technologies' Orbus 21D. The LLV3 adds Thiokol's Castor IV motor as strap-on boosters for additional performance. Design work is underway at Lockheed with a team of about 50 engineers, and testing of the structure and electronics is planned to begin by the end of the year. An initial demonstration launch is planned for Nov 1994 from Vandenberg AFB, with full launch service available several months later from both Vandenberg and Cape Canaveral. [Commentary: For the past several years, Lockheed has been examining entry into the smallsat launch market using its own line of launch vehicles. Having their own launch system would provide Lockheed entry into a new part of the space market they are not currently in (although they build ICBMs and sounding rockets), and extend their existing product lines to allow them to offer a complete end-to-end satellite market service from the construction of a customer's satellite to its delivery on orbit. Up to now, only Orbital Sciences Corp. could offer this service, although other providers such as AeroAstro/PacAstro, and Martin/GE Astro have considered offering this service. Lockheed's initial proposal was for a launch system developed from converted Poseidon and Trident submarine-launched ICBMs (which Lockheed builds for the US Navy). But the uncertain and vague policy of the US DoD for converting ex-ICBMs into launch vehicles, as well as unresolved policy problems with converting ICBMs into commercial launch systems, caused them to shift to design of their own launch vehicle with off-the-shelf components. The LLVs are targeted to fill the niche between the largest currently available small launch vehicle (Pegasus) and the smallest currently available commercial medium launch vehicle (Delta). While this market is currently not served by any system, two other launch vehicles are planned to debut this year, challenging Lockheed's market entry; OSC's Taurus rocket, which can launch up to 3,000 lb. into LEO, and EER Systems' Conestoga rocket, which will lift up to 3,500 lb. Other proposed systems such as those using converted ICBMs (for example, the Russian START and SURF systems) could also compete in this market segment if they find financial and political backing. Lockheed's market plans are to aggressively price the LLV series to capture two or three launch contracts in the first year of operations, with the number of annual launches rising after that. Expected price for the LLV1 will be about $14 M. For market entry, Lockheed official say they have two "government funded" customers targeted for the first LLV flight, but no contracts signed. Lockheed spokespersons said they are also talking with commercial entities, including one of the proposed "Big LEO" (low-Earth orbit) communications satellite constellations as potential customers. (Considering that Lockheed is building the Iridium satellite, one might guess this is Iridium, Inc.) This announcement is another sign that Lockheed is very aggressively moving into the commercial space field -- added to their recent partnerships with Iridium to build the Iridium satellites and with Khrunichev in Russia to market the Proton launch vehicle. According to published reports, Lockheed's Space Systems Division wants to double its revenues to $5 B over the next 8 years. This business area is the most profitable within Lockheed, earning 2/3rds of Lockheed's operating profit last year (about $360 M). But most of these revenues have come from defense and NASA space sales. Lockheed expects the overall defense market to decline by up to 25% over the next 5 years and substantially impacting their revenues from their missiles, aircraft and space businesses. To diversify outside of defense businesses, Lockheed is looking for other space businesses to expand into. This offering of a new launch system has to be seen as part of a very conscious, very astute expansion into the commercial space markets by an experienced and wily competitor. ] 9- COMMERCIALLY DEVELOPED SPACE WAKE SHIELD READIES FOR FLIGHT Houston's Space Industries International is hoping to make money by making the vacuum of space even more rarefied. With support from the Space Vacuum Epitaxy Center at the University of Houston (a NASA sponsored Center for the Commercial Development of Space), SII is preparing to fly the "Wake Shield Facility" on a Space Shuttle flight planned for this November. The concept behind the Wake Shield Facility is very simple -- by placing a large disk in orbit, an extremely high and pure vacuum can be obtained in the "shadow" behind the disk as it sweeps away the few remaining molecules found in Earth orbit. This environment is potentially very valuable as semiconducting and superconducting thin films can be produced with far greater purity than is possible in even the best vacuums that can be created on Earth. The SII Wake Shield Facility spacecraft primarily consists of a stainless steel disk 12 feet in diameter deployed from the Shuttle. Once outside of the Shuttle's payload bay, the Wake Shield Facility uses non-contaminating inert gas thrusters to maneuver about 40 nautical miles away from the orbiter in order to avoid any potential contamination. Once in position, the disk's orbital velocity will create a wake of high vacuum in the wake behind it's steel disk which is expected to be 10,000 times higher than can be obtained in ground facilities. On the first experimental flight, molecular beam epitaxy equipment will grow thin film materials with high commercial potential within the high vacuum and purity volume behind the shield. The first payload is designed to grow gallium arsenide thin films which are of high interest to the electronics industry. These will be grown while the facility operates independently from the shuttle for 2 days before being captured by the Shuttle's remote manipulator arm and returned to the Earth. The current unit is designed for up to 6 flights of up to 3 months duration each, but is planned for only 4 experimental flights, with the fourth flight planned to produce the first commercial products. Co-sponsors of the experiment include Instruments, S.A. Inc., of Edison, N.J.; AT&T Bell Labs, Murray Hill, N.J., and Schmidt Instruments Inc., Quantum Controls, and Ionwerks, all of Houston. [Commentary: NASA has been making a push to get more commercial involvement in space activities. The NASA CCDS system has proven to be a spotty mechanism for "jump starting" commercial activities, but several cooperative ventures are in work which might produce viable commercial products. The Wake Shield is one - exploiting a unique feature of the space environment to examine if a commercial product can be developed. There seems to a real promise to use microgravity and a high purity space environment for production of thin film gallium arsenide chips. Current terrestrial production runs are plagued with low yield and defects which limit the operability of the GaAs- based electronic devices. But before any new product can be sold, the process and the capabilities of the product have to be demonstrated in some way. Here, NASA is providing financial backing through the CCDS system sufficient to manufacture the Wake Shield spacecraft and to fly it on the space shuttle. In my opinion, this is a reasonable use of NASA's commercial space money in providing seed money to test a promising new technique with potential commercial applications. If the GaAs production experiments don't pan out, this technique might be applicable to other products - making the investment in the Wake Shield experiment facility a reasonable one for limited experiments. And quite rightly, NASA has not committed to continuing to back this venture if it is not proven viable through outside commercial contracts. As with many of the previous Materials Processing in Space (MPS) activities, the market for which this venture is targeted keeps moving. There might be enough market for high performance specialty electronics substrates such that commercial viability at a reasonable level might be sustained. The initial Wake Shield experiments should prove out the performance of the system and the basic parameters necessary to estimate if a commercially valuable product can be produced. But until the technology and products are proven out in the marketplace, I will remain rather skeptical about its commercial potential.] 10- OTHER NASA SUPPORTED COMMERCIAL VENTURES ENCOUNTER PROBLEMS Two other NASA-supported commercial ventures, COMET and Spacehab, have run into problems. The Commercial Experiment Transporter (COMET), designed to provide a commercial means of sustaining and recovering commercial orbital payloads, has run into financial and technical problems. It now appears the first COMET mission planned for May has been postponed indefinitely until contractual and financial issues in the program are resolved. The most serious of the COMET program's problems is ballooning costs. COMET's cost was originally set at $85.1M including three launches as it was funded through the NASA Center for the Commercial Development of Space (CCDS) at the University of Tennessee's Calspan Center for Space Transportation and Applied Research (C-STAR). However, expected program costs have increased to about $ 120 M, and the program is currently over its available budget by $5.5 M. Another $13 M is needed just to support its first flight even with the schedule slipped to a June launch. These financial problems arise from a variety of factors including technical problems encountered during testing of the systems. Since the budget available has been exceeded, the COMET team firms have not been able to continue, and Westinghouse Corp. and Space Industries International (SII) have stopped work on the program. At present, there is no future launch date. Another NASA-backed commercial venture, Spacehab, has also encountered problems. While Spacehab has not had cost overruns or schedule slippage, the commercial program to develop a pressurized module with additional experiment volume for the Space Shuttle has had problems attracting commercial customers. Under the terms of the Spacehab contract with NASA, NASA agreed to lease at least 200 of the 300 payload experiment lockers available on the first 6 Spacehab flights. The remaining 100+ lockers were to be marketed by Spacehab to commercial and international customers for orbital experiments at about $ 1.8 M per locker. Unfortunately, only 26 lockers have been reserved to date, with 24 going to a single customer, Intospace, the Germany materials processing consortium. [Commentary: Rumors about problems with these two commercial ventures have been cropping up with more and more frequency over the past several months. Of the two ventures, Spacehab seems to be in the best shape. The problem, of course, is if Spacehab does not come reasonably close to selling out their remaining volume they will not be able to show their program is a financial success. NASA's commitment to lease 2/3 of the available lockers allowed Spacehab to design and produce their module, secured by NASA's core tenancy. But Spacehab must sell out most of the remaining lockers to demonstrate product feasibility and make their cost/return projections. If Spacehab does not sell out the lockers, the venture won't fold immediately -- they should have enough money left to continue to market their product and support it for several more years. But they will have problems meeting some cash flow needs as the 1/3 of the funds on the project were dependent on non-NASA sales. Hopefully a successful first flight will spark more interest in their product. It's currently planned for STS-57 in June of this year. COMET is a somewhat different story. $33 M in overruns on a $85 M dollar project is substantial. Furthermore, while NASA is being approached to cough up these dollars, NASA is feeling uncomfortable since under the commercial contracts used NASA doesn't have the data to know how far the contractors are along on the program, and doesn't have any assurance the dollars they provide will solve the program's problems. Since NASA's CCDS is acting like a venture capitalist on the COMET project it wants to quickly review of the status of the COMET program to determine if the dollars requested and the planned actions by the COMET team will solve the problems encountered. In a similar situation a venture capital organization would do the same, excepting the private VC outfit would hire outside experts (consultants) to wire-brush the venture, but here the NASA CCDS is planning to other NASA centers for the experts. In my opinion, the CCDS should consider also going to outside experts who would have a perspective outside of the standard NASA culture to best review a commercial program being run in a non-NASA culture. My expectation is the problems with COMET will be found to be identified, and in another month or so NASA will recommend continuing with the venture through at least the first flight. NASA will have to scrape around in their OACT budget to find enough funds to get the first COMET launch off sometime this year (perhaps September?), but will find enough to fund the first flight, holding any remaining funds needed until FY 94 and a flight to show the current problems have been resolved. COMET's marketing efforts to attract new customers are being hurt by these financial problems and the delayed launch -- particularly as this program was billed as providing cheap and simple access to space for commercial researchers. WESTAR, the commercial version of COMET, is still looking for outside customers and while Westinghouse has stopped work on COMET, they may be continuing a low level of effort to market WESTAR. I have heard some rumors of some folks being interested in future flights but I have seen no notification that any significant customers have signed up. I also note WESTAR is talking with Arianespace to launch the WESTAR orbital and recovery modules piggyback on Ariane polar launches. Problems with COMET also delay the first launch of the Conestoga launch vehicle. This has been in the news recently as it is the Conestoga vehicle which will carry the advertisements for Arnold Schwarzenegger's new movie "The Last Action Hero". Columbia Pictures is still planning to put the ads on the upcoming launch, even though this occurs after the mid-June premiere of the movie. Columbia will use a later launch to help publicize the release of the picture in markets outside of the US and in preparation for home video release in late 1993. In a related note, Dr. Carole Lieberman, chairperson of the National Coalition On Television Violence, has vowed to push to remove the advertising from the Conestoga launch. In a recent press release she charges the ad represents "an unprecedented glorification of media violence." She is quoted as saying "Is nothing sacred anymore? Has the space program -- which was the pride of our nation -- become nothing more than an example of commercialization run amok, just to further the glamorization of primitive violence?". The impact of this on the Conestoga launch is not known.] 11- AEROSPACE FIRMS PLAN JOINT STUDY OF COMMERCIAL SPACE MARKET In a surprise announcement on 5 May Dan Goldin revealed 5 major aerospace firms were banding together to study the commercial space market. Speaking at the AIAA national convention, the NASA Administrator said the eventual goal of this activity could be the development of a new launch system to best serve the commercial space market in the next decade. Reports in the Wall Street Journal and the trade press identify the firms involved as Boeing, General Dynamics, Lockheed, Martin Marietta and Rockwell. [Commentary: Little data has been released on this new activity. I'm noting it here as it could be the start of a significant new commercial launch system. From the little data publicly released by participants, the initial effort would focus upon a study of where future commercial ------------------------------ End of Space Digest Volume 16 : Issue 643 ------------------------------