Stars align for hosted payloadsas budget crunch drives market
Satellite operators who have faced an uphill battle trying to sell space on their platforms to government customers believe the new wave of congressional budget-cutters may give their hosted-payload business a boost—once the dust settles.
While the idea of piggybacking specialized government and commercial applications hardware on satcom and other commercial spacecraft is not new, governments are only beginning to overcome their inertia and adopt the approach as a way to stretch their space budgets.
In the wake of the 2010 U.S. elections, those budgets will need stretching as the Republican-controlled House and empowered fiscal conservatives in the Senate look for ways to cut the cost of government. And, even before the elections, the Obama administration’s new space policy specifically called out hosted payloads as a “cost-effective” way to meet government needs.
“Policy statements, learned history of what works and how well things can work and then the budget are kind of the three legs of the stool that’s making it happen,” says Andrea Maleter, technical director at Futron Corp. and one of the authors of a hosted-payload handbook the consultancy prepared forlast year. “I suppose the top of the stool is the fact that commercial industry is really encouraging it and trying to make it happen.”
A big new hosted-payload market has opened with the 50-kg (110-lb.) packages reserved on the low-Earth-orbit (LEO) communications satellites in the Iridium Next constellation scheduled to begin launching in 2015. While there are hosted-payload advantages in “Big LEO” constellations like Iridium Next that are not available on geostationary communications satellites, the same budget picture that makes them attractive in the long run may snarl procurement just as they become available.
“I do have concerns from the standpoint that in times of constrained budgets, there’s always a tendency where the appetite for pursuing new things seems to be reduced,” says Michael A. Hamil, senior vice president of corporate strategy and development at. and a retired U.S. Air Force lieutenant general who was the service’s program executive officer for space.
Under a subcontract to, Orbital Sciences will integrate and test the 81 planned Iridium Next satellites—including spares—at its state-of-the-art factory in Gilbert, Ariz. The company also has reserved 20% of the hosted-payload capacity on the Iridium Next constellation and will make non-refundable deposits totaling $10 million this year for rights to retail it across the government (AW&ST Feb. 7, p. 37).
Orbiting at 780 km (485 mi.) in six orbital planes of 11 satellites each, Iridium Next will offer worldwide coverage and real-time intersatellite communications links for its own mobile customers as well as its hosted payloads. “There’s a variety of Earth sciences, space, environmental-monitoring missions,” says Hamil. “Also, looking further out into the deeper space regions for such things as space situational awareness, a variety of different kind of instruments or communications or data payloads could be put on board.”
Iridium andpicked Orbital, which is headquartered in Dulles, Va., as spacecraft integrator to ease security fears in U.S. military and intelligence services. Hamil says the company will use its experience integrating the Air Force’s Commercially Hosted Infrared Payload (Chirp), a wide-field-of-view, passive infrared sensor, into an SES commercial geostationary communications satellite, to secure data links from classified hosted payloads in Iridium Next spacecraft. Like Chirp, those payloads will encrypt data at the sensor and route it to the end user for decryption.
Some payloads will not work on the Iridium Next platform. Optical reconnaissance sensors probably would not fit into the 30 X 40 X 70-cm (12 X 16 X 28-in.) volume, and even if they did, the spacecraft’s jitter and 100-kbps data rate would make them impractical.
“Space situational awareness is one that fits well within the Iridium context,” says Don L. Thoma, executive vice president of marketing at Iridium. “That’s typically an optical sensor. It’s not a high-resolution imager. It’s looking for dots in space, if you will, of sunlight reflecting off of objects.”
Iridium started planning for hosted payloads in 2007, when it began work on a replacement for its original Big LEO constellation. The company wholesales its capability to retailers, who apply them to specific applications like tracking rail cars or monitoring pipelines. With the hosted-payload capability on the Iridium Next spacecraft, that business will expand through wholesalers like Orbital to government customers.
The savings for those customers can be substantial. The Air Force estimates it would have cost about $500 million to fly a dedicated spacecraft for the Chirp mission, an orbital test of a third-generation infrared sensor system. Instead, the service can meet 80% of its test objectives at a cost of about $65 million.
Operators hope that sort of savings will make hosted payloads on their spacecraft even more attractive for government customers. But hosting payloads does make the operator’s job harder.
“By doing it early and posting a standard specification, it gave the community a good understanding of what the possibilities were,” Thoma says. “As you can imagine, we are a commercial company. We are building Next under firm fixed-price contracts, and we’re building 81 satellites, and launching 72 of those, so you can imagine that keeping perturbations to the standard at a minimum is important to us.”
Even so, like Iridium, other operators are finding that it is worth their while to make provisions for hosted payloads, even if they do not have an up-front customer for them. Intelsat has decided to go ahead with an uncommitted UHF payload on Intelsat 27 though its customer—the U.S. Navy—has not yet signed on the bottom line.
“We’re doing that because we know there’s a shortage of UHF capacity and we want to be there to fill the requirements of a great customer in the U.S., and frankly other ones that might make sense,” says Intelsat CEO David McGlade.
Telesat, too, has taken advantage of the growing demand by orbiting a hosted payload without getting a paying customer first. So far, it has paid off.Astrium, the largest government satcom operator, last October acquired the full X-band hosted payload on Telesat’s new Anik G1 spacecraft.
A big satellite buyer like Intelsat can offer its hosted-payload customers stability that comes with regular launches and long-lived spacecraft, while allowing them flexibility to orbit payloads that meet their specific needs. “We buy more spacecraft than anybody else, and operate more geosynchronous spacecraft than anybody else,” says Don Brown, vice president for hosted payloads at Intelsat General Corp. “We do it really, really well, and we leverage our market power very effectively. I can be very helpful to my government customer if I give them the full use of that capability by buying systems that enable me to provide services to the government [for the] long term. It grows our relationship with our government customer because we’re doing something other than leasing them capacity. We’re actually building capabilities that go beyond what exists in the commercial marketplace.”
But in today’s uncertain U.S. federal budget environment, there’s still no guarantee that the government will take advantage of that opportunity.
“In the bizarre world of government budgets, if you’re going to come up with an alternative to a capability that you plan to buy with an existing program of record, the money for that alternative’s got to come from somewhere,” says Robert “Tip” Osterthaler, president and CEO of SES World Skies U.S. Government Solutions and, like Hamil, a retiredgeneral. “And the money for that alternative almost always ends up coming from the base program that that alternative was designed to address. It’s politically hard to do, and you have armies of lobbyists that are trying to defend their interests.”