Space & Astronomy/Space and Astronomy (October 1993).iso/mac/TEXT/SPACEDIG/V16_0/V16NO075.TXT

Internet Message Format | 1993-07-13 | 47KB

Date: Sun, 24 Jan 93 05:12:04
From: Space Digest maintainer <[e-mail]>
Reply-To: [e-mail]
Subject: Space Digest V16 #075
To: Space Digest Readers
Precedence: bulk


Space Digest                Sun, 24 Jan 93       Volume 16 : Issue 075

Today's Topics:
                      commercial space news #20

    Welcome to the Space Digest!!  Please send your messages to
    "[e-mail]", and (un)subscription requests of the form
    "Subscribe Space <your name>" to one of these addresses: listserv@uga
    (BITNET), rice::boyle (SPAN/NSInet), utadnx::utspan::rice::boyle
    (THENET), or [e-mail] (Internet).
----------------------------------------------------------------------

Date: 23 Jan 93 07:17:42
From: [e-mail]
Subject: commercial space news #20
Newsgroups: sci.space

   This is number twenty in an irregular series on commercial space
activities.  The commentaries included are my thoughts on these
developments.

   Continuing what seems to be a tradition for this column, the
articles included in this issue are another mixed bag of topics.  If
there's any unifying theme this month, it's the impact of government
policies and interactions with commercial space ventures.  This
column covers a couple of firms with government contract problems, a
significant government market opportunity,  a government funded
competitor for orbital return payloads, and a project currently
caught in a government interagency political fight.

CONTENTS:
1- OSC DEVELOPMENTS (BONDS, ORBCOMM, TURBO PEGASUS, CONTRACT WOES)
2- WESTAR LOOKING FOR NEW 'COMET' CUSTOMERS
3- COMET COMPETITOR 'EXPRESS' GETS FUNDED
4- NEW COMMERCIAL LAUNCH SITES - MOST STILL THINKING ABOUT IT
5- NASA ANNOUNCES BLOCK BUY OF LAUNCHERS FOR EOS
6- IRIDIUM NEGOTIATING WITH INVESTORS AND FOR PROTONS
7- LOCKHEED TEAMING WITH KRUNICHEV ANNOUNCED
8- IMI TEETERS ON BRINK
9- RUSSIANS OFFER EX-ICBM TO SOUTH AFRICA AS LAUNCHER
FINAL NOTES -

ARTICLES
--------------------------------------------------------------------
1- OSC DEVELOPMENTS (BONDS, ORBCOMM, TURBO PEGASUS, CONTRACT  WOES)
   [This article briefly covers several recent developments with
Orbital Sciences Corporation (OSC).]
   In the early days of January, OSC filed with the Securities and
Exchange Commission (SEC) to offer $55 M in convertible subordinated
debentures ("bonds").  About $30 M from this sale are planned to be
used by OSC to fund OSC's 'Orbcomm' satellite communications
network, with the remainder of the proceeds to be used for R&D, to
meet working capital needs, and to make necessary capital
expenditures. The bond issue will be underwritten by Lehman Brothers
and Alex. Brown & Sons Inc.
   In related news regarding Orbcomm, OSC successfully completed a
set of initial tests in Sep and Oct using prototype Orbcomm
communicators.  The tests were performed using a SR-71 flying at
80,000 ft over the California desert carrying a satellite relay
simulator, and two versions of the handheld Orbcomm communicators on
the ground.  The two versions were a full-featured VitalNet unit
capable of sending and receiving E-mail type messages and data with
a 7-line display screen, and a second unit designed to only
demonstrate uplink of data for emergency, data acquisition, or data
monitoring services.  The prototype communicators were designed and
manufactured by Panasonic (Kyushu Matsushita Electric) of Japan, and
are expected to cost from $50 to $350 when produced for an
operational Orbcomm system.
   With a new Pegasus launch attempt planned for late Jan, OSC has
released plans to upgrade the existing Pegasus launcher with a
turbojet-boosted version.  The "Pegasus Turbo" would add 2 turbojets
under the triangular Pegasus wing to propel the rocket to Mach 4+
and more than 90,000 feet in altitude before they would be
jettisoned.  Orbital claims the Pegasus Turbo would increase the
Pegasus' reference performance to 2250 pounds into a 28 deg, 160 nmi
circular orbit, or about a 125% increase.  The cost of the system is
expected to increase by about 25-30% over the baseline Pegasus.  OSC
is looking for industrial partners and a government sponsor before
committing to the upgrade.  Assuming such partners could be found
and initial design analyses prove out the concept, "Pegasus Turbo"
could be available in 1995.
   In mid-December, the US Strategic Defense Initiative Organization
(SDIO) canceled its contract with OSC's Space Data Division for 3
suborbital launch vehicles.  According to USAF Col. Rhip Worrell,
the OSC launch vehicles had failed too many times, and could not
provide on-time, reliable service for SDIO's needs.  When OSC's
contract termination had been discussed between OSC and SDIO, OSC
had asked for three months to perform $150,000 in technology demos
and studies to prove that their launch vehicles can do the job.
Worrell recommended against sticking with OSC for now, but told OSC
the SDIO would look at their accomplishments in February if they
performed the demonstration and study work with OSC funds. The
contract cancellation is for about $ 28 M.
   To replace OSC's launch systems, SDIO is will use a Lockheed
suborbital rocket system for upcoming suborbital tests. Lockheed had
been the primary competitor for the canceled OSC contract when it
was first awarded, and recent Lockheed/Martin tests for SDIO have
had a success rate of 93%, according to SDIO.  Worrell said "We have
not had that [experience] with Space Data." Leftover equipment from
the Exoatmospheric Reentry Interceptor System (ERIS) test program
will be used.
   [Commentary:  OSC is still seriously pursuing the Orbcomm
network.  Issuing corporate bonds is a standard way of raising money
for projects, and while OSC is not yet that large, their balance
sheet has improved to the point they can take on this additional
debt.  I would expect the bond issuance might provide sufficient
funds to launch a prototype "Orbcomm" constellation (assuming they
get FCC approval), but my calculation is $30 M will be sufficient to
fund the Orbcomm project only for another year or so.  I don't think
OSC wants to bring in a strategic partner with deep financial
pockets for the space and launch segments of Orbcomm (since that
would give up control where OSC's core strengths lie), but OSC needs
to generate some significant funds to fund Orbcomm over the next
several years.  Based upon other developments, OSC will have to work
hard to generate these internal cash flows.
   I haven't seen the "tombstone" ad announcing this bond issue yet,
and I am rather curious about what interest rate and terms are being
tendered.  While OSC's debt/equity ratio shouldn't be really out of
line, other developments and a rather speculative market may force
them to offer a slightly higher bond rate and slightly different
terms than standard.
   The successful Orbcomm test results were released just before the
announcement of the bond issue, which is probably not coincidental,
as good news about Orbcomm would help them in selling the bonds.  It
is interesting that a SR-71 was used to simulate the Orbcomm
satellite -- it probably was used to simulate the fairly rapid
movement across the sky of the satellites in the Orbcomm LEO
constellation as seen from the ground.  A high speed, high altitude
aircraft would simulate satellite signal acquisition and
transmission from a LEO satellite fairly well, but this is first
time I know of when a SR-71 has been used for this.
   Teaming with Matsushita for the ground segment brings in a deep
pocketed strategic partner with expertise in large production run
consumer electronics, which is not one of OSC's strengths. As
mentioned previously, OSC still needs to find the funds to develop,
build, and launch the space segment of the Orbcomm system.
   As Pegasus moves back into operational status, OSC is again
stating to look at further upgrades. Turbo jets basically add an
additional first stage to Pegasus, using the high Isp of jet engines
to increase the effective performance of the system.  It should be
noted that OSC is looking for industrial partners (like a jet engine
company) and government sponsor who desires the larger payload
available before committing to the new configuration.   From my
quick "back of the envelope" assessment, there shouldn't be any real
technical problems with their approach, excepting the engine
operation and jettison will add some complexity to the Pegasus
launch cycle.  High supersonic flow dynamics can get a bit weird,
and separation mechanics can be a bit tricky, but such problems have
been solved on such systems as the SR-71.  Given enough funding to
do a good design and test program, OSC should be able to work this
out pretty quickly.  The new capability Turbo Pegasus should allow
them to compete more effectively for the larger of the smallsat LEO
constellations.
   The contract cancellation by SDIO is much more problematic.  OSC
makes about 35% of their revenues from suborbital launches, or about
$60 M this year (estimating from quarterly data and last year's
results).  Losing a $28 M suborbital services contract will hurt.
Furthermore, the suborbital launch market has been one of the few
established, solid market segments in OSC's portfolio of businesses
and was expected to generating steady cash flows for OSC.  If OSC
doesn't satisfy quality expectations by customers within this market
area, and their cash flow decreases as customers move to other
competitor's products, it is possible OSC's balance sheet may get
hurt, just when they need money for Orbcomm and other ventures.
   Industry rumors say quality in OSC's products has not been
consistent, and several key customers are looking to move their
business elsewhere.  Certainly OSC's products have been plagued by
recent failures (Orbcomm-X, Pegasus, other suborbital launch
problems, TOS data failure), but these problems can all be fixed.
   To get back on track, OSC must fix their quality problems and
start demonstrating consistent quality in their products.  OSC's
order book for launches and satellite ventures is deep enough for
them to tolerate some failures and defection of customers, but they
will have to focus on quality and consistency to overcome some
recent events -- particularly if they wish to pursue their ambitious
growth plans.]

2- WESTAR LOOKING FOR NEW 'COMET' CUSTOMERS
   The first flight of the Commercial Experiment Transporter (COMET)
is now set for 31 March.  While some minor problems have surfaced in
the launch processing, the COMET team is on-track towards the
scheduled launch date.  EER Systems is well along in launch pad
construction at Wallops Island, Va., and fabrication of the portable
gantry for COMET is underway.  Thiokol has poured three of the seven
Castor 4B solid rocket motors needed for EER's Conestoga booster,
and delivery of the motors to Wallops is on schedule in January to
build up the booster.  The 10 experiments for the first flight are
also nearly completed.
   If all goes as planned, the first launch will go eastward from
Wallops into a 40.5-degree, circular 300 nautical mile orbit.  After
30 days, the Commercial Payload Operations Control Center at SII
near Houston, Texas will command the separation of the recovery
module from the orbital service module, and it will reenter and land
at the Utah Test and Training Range.
   Westinghouse, which built the service module and provided systems
engineering for the $85 M COMET project, is now marketing a
commercial version of COMET called "Westar", and pushing to line up
customers for a first commercial flight in 1994.  Westar's marketing
effort focuses on U.S. government agencies since they estimate the
US DoD is the best source of near-term user demand.  But as of the
first of the year, no customers have signed up, nor has Westinghouse
sold the 100 pounds of additional payload capability it reserved on
the first COMET return capsule.
   According to Westinghouse, potential customers for Westar include
the SDIO, the USAF Space Test Program, the Naval Research Lab, and
the Army Space and Strategic Defense Command.  Apparently, due to
short time until the first commercial Westar launch planned in 1994,
Westar is focusing on organizations with payloads already funded and
those with payloads ready to fly within the next 18 months.  Besides
the DoD this includes other US government agencies and some
international companies and agencies.  But Westar has found slim
pickings for customers in the marketplace, and has run into
competition from Russian recovery vehicles, and with other regional
systems being development (See related article on EXPRESS).
   The price of a Westar launch is being quoted at about $35 M, to
reserve all 450 pounds available  in the recovery module.  The price
includes some help with experiment design and integration into the
vehicle, as well as launch and control of the orbital system.  For
smaller users, a 10 pound payload can be flown on Westar for about
$1 million, and 50 pounds for less than $5 million.
   [Commentary: COMET/Westar is still on track to prove out their
system in the next few months.  COMET is a reasonable example of how
NASA and industry working together can set up the basics of a
commercial venture, and get it out to the marketplace.  NASA,
through the Centers for the Commercial Development of Space (CCDS),
has provided a start-up market for this venture by committing to buy
the first several COMET launches.  This allowed EER, SII, and
Westinghouse to put together the venture.
   But NASA has not committed to guaranteeing this market in the
future, which I believe is also appropriate.  Westar/COMET must go
out and find other customers to fill their order books in order to
make this venture a success.  They need to find non-NASA customers
to recover all of their development costs, which were only partially
covered by the CCDS orders for a few initial launches, and to return
profits to their investors.
   There are several competitors for Westar's services in the global
market; Russian return systems (which have been heavily marketed in
Europe), Chinese return systems (including a new, larger version
which was tested in August), and the German/Japanese EXPRESS system
now in development.  Several other systems, such as the Italian
CARINA system, have been proposed, but are not in active
development. And the Shuttle is a competitors too, since most of
Westar's potential customers are from the US government.
   It should be noted Westar costs a customer over $78,000 /lb to
launch and return a payload.  As a point of comparison, a shuttle
returning 30,000 pounds of payload costs something less than
$17,000/lb (assuming $500 M/flight), and SpaceHab is selling
accommodations on the Shuttle for small "locker-type" experiments
(typically <100 pounds, each) as a commercial venture.  My records
show an average of 2 SpaceHab launches per year are being planned
(first launch Apr 93).
   The primary difference between Westar and SpaceHab is Westar can
offer 30 days on orbit, whereas SpaceHab is currently only planned
for about a week on orbit.  In response, SpaceHab offers in-flight
access to the experiment.  Westar claims a much shorter time to
launch for an experimenter but SpaceHab counter-claims their larger
total payload volume allows individual users to find room in the
SpaceHab module on very short notice for any scheduled SpaceHab
flight.
   This has focused some attention to some unresolved regulatory
issues, including application of the Presidential Space Policy of
1988, which removed commercial payloads from the shuttle.  There
have been rumors Westar is pursuing a campaign claiming if the COMET
system is shown to work, small Shuttle payloads then HAVE to be
moved to Westar.  However, government researchers are objecting to
imposition of this policy, since they don't want transportation
costs increased by a factor of 4-5X to use Westar.  And based upon
the current payload market for return payloads, most of the market
is government funded or government originated.
   I can understand why Westar would pursue such a policy, but I am
of mixed emotions about its effect.  While supporting commercial
ventures is, in general, a good thing to do --forcing the government
to support a commercial service whose costs are much higher than
other alternatives doesn't appear to be beneficial.  If Westar was
offering a reasonably competitive price, say in the $20,000/lb
range, then this would not an issue.  A factor of 4X increase in
costs raises some concerns.
   This may become a moot point if Westar lines up sufficient number
of customers to feel comfortable about their venture, but if they
cannot get customers, I expect this issue to become much more
contentious.]

3- COMET COMPETITOR 'EXPRESS' GETS FUNDED
   The governments of Germany and Japan have agreed to develop a
recoverable space capsule system for microgravity and other
experiments as a joint program.  A memorandum of agreement was
signed in mid-December by each government committing it to provide
about $60 M (or about 8 B Yen) to develop and launch the first
EXPeriment REentry Space System (EXPRESS).
   [Commentary:  Another competitor for the recoverable payload
market has entered the arena.  While this system has not yet been
proven out, it has been in the works for some time.  There were
several other proposals made by European organizations (Italy's
CARINA, a British proposal, and a French system), but I think this
German/Japanese project will probably preempt them.
   EXPRESS will use a Japanese/ISAS M-3S rocket to launch a small
760 kg capsule which will remain on orbit for 5 days or more.
Experiments planned for the first orbital mission include
microgravity tests on advanced catalysts for oil refining and
materials tests of new substances for reentry structures for future
programs.
   In this joint program, Japan through ISAS provides the launch
vehicle and some of the experiments, while the German Space Agency,
DARA, develops the capsule and space system, reportedly in
cooperation with Russian organizations.  This is claimed to be first
bilateral cooperative space endeavor between Japan and Germany.  The
first EXPRESS flight is tentatively scheduled for Feb 1994 from
Kagoshima Space Center.
   Regardless of the success or failure of COMET/Westar in the US,
EXPRESS will probably go into flight operations.  It is backed by
ISAS and DARA which control some substantial funding for
microgravity research, and which can pursue occasional orbital
duration/reentry flights as a logical extension of their suborbital
microgravity experimentation.
   Of importance to the US commercial space business, the existence
of EXPRESS can siphon off market demand which could have gone to
COMET/Westar, forcing that venture to focus more on the US internal
market.
   The participation of Russian organizations in this venture is
also of interest.  Several Russian groups have been aggressively
marketing microgravity return systems in Europe for some months, yet
by helping DARA develop EXPRESS, Russian participation may reduce
the capture of European or Japanese market share by Russian
recovery/ reentry systems.  Most probably this turn of events is
driven by short term economic concerns (read: cash flow), and the
circumstance there is excess capacity in the ex-Soviet Union with
several firms with reentry technology scrambling for survival.
   Still unanswered is any concern about technology transfer about
reentry systems expertise from Russia to Germany.  I don't know if
this is an international MTCR issue, but I am somewhat surprised it
hasn't been raised from any corner.  It an indication of how far
things have changed to think the Russian government would approve
the sale of reentry technology to the Germans.]

4-  NEW COMMERCIAL LAUNCH SITES -MOST STILL THINKING ABOUT IT
   The jury is still out on a new commercial launch site, despite
several organizations looking at getting into the commercial launch
site business.  Besides the new pad going in at Wallops Island,
Virginia for COMET launches, there are active efforts underway at
several other locations to try to institute commercial launch
operations.  This is a summary of the current status of some of them
-- Virginia, California, Georgia, Hawaii, Florida, Alabama, Alaska,
and New Mexico in the US; Canada; Cape York and Woomera in
Australia.
   Wallops Island, Virginia USA -- A new concrete pad for the
Conestoga rocket to be used for COMET/Westar missions is almost
complete.  First launch of the COMET system is planned for 31 March
1992.
   Vandenberg Air Force Base, California USA -- while some interest
has been expressed in using VAFB to support commercial launches for
LEO communications satellite constellations, there have been no
commitments to use VAFB.
   Kingsland Site, Georgia USA -- A preliminary study assessing the
feasibility of using the disused Kingsland Missile Test Launching
Site in Camden County, Georgia should be complete by mid January.
This study is funded by the Georgia Tech Research Institute and the
Camden-Kings Bay Chamber of Commerce, and focuses on the economic
feasibility and environmental impacts of reopening the site, last
used in the 1960's.  According to local press reports, preliminary
results look favorable, with estimates of about $ 3-3.5 M to
refurbish the site and an adjacent 4000 acres.  GTRI will next
approach the Georgia state government for a grant for additional
development studies and marketing efforts.  It is also rumored other
sites along the Georgia coast are being examined by other
organizations as candidate commercial launch sites.
   Hawaii, USA -- The state-sponsored Hawaii Office of Space
Industry was first set up in 1988 to sponsor a commercial launch
site on the island of Hawaii.  However, the required Environmental
Impact Assessment report for the project is still not complete, over
2 years behind schedule.  The very slow response by the state to an
idea originally proposed in 1986 has now become a local political
issue, and has generated vocal pro- and anti-space launch site
factions in local communities.  OSI has primarily used its funding
from Hawaii's state legislature to support space education and
awareness projects, including the 2nd Pacific ISY Conference held in
November 1991, the `Future Flight Hawaii' space camp for elementary
level students, and a series of public `Space Pavilions'.  The
latest version of Spaceport Hawaii seems to be the "Pacific Aloha
Spaceport", proposed for offshore of the Island of Hawaii, and
dedicated to purely peaceful pursuits.
   Cape Canaveral & Cape San Blas, Florida USA --The state-sponsored
Spaceport Florida Authority is pursuing several activities to
promote commercial launches from Florida.  These include
demonstration of an Advanced Launch Control system to serve as a hub
of a new commercial space launch facility at Cape Canaveral,  the
opening of a commercial sounding rocket launch site at Cape San Blas
on the Florida panhandle, several sounding rocket launches, and
underwriting of the funding of other commercial space infrastructure
elements in the Cape Canaveral area.
   Mobile Bay Platform, Alabama USA --Under a low level effort at
the University of Alabama at Huntsville, the possibility of using a
modified offshore oil platform or barge in Mobile Bay for smallsat
launches is being examined.  Chuck Lunquiest, associate VP for
research at UAH, recently briefed Alabama's state Aerospace Science
and Industry Commission, recommending Alabama approve $2 M in state
funds for a demonstration launch.  This launch, it was suggested,
could use boosters from UAH (where a NASA CCDS is located, which is
funding suborbital microgravity flights), or from NASA's Marshall
Spaceflight Center (also in Huntsville).  Any state funds are
expected to be matched by federal funds.  Former Marshall director
J.R. Thompson, who chairs the state aerospace panel, said he hoped
feasibility studies can be completed in six months, but also warned
there should be a clear idea of the size of the market before any
project go-ahead.
   Poker Flats, Alaska USA -- Suborbital missions from the Poker
Flats launch site in Alaska, operated by the University of Alaska,
are continuing.  Initial planning to develop a commercial orbital
launch site in conjunction with International Microspace Inc.(IMI),
have been held up, as IMI's worsening financial status has virtually
shut down the company. IMI's financial status has been deteriorating
after an expected investment of several millions of dollars from the
State of Alaska's development fund was not approved. (See related
article.)  Little interest has been expressed from other
organizations to launch satellites into polar orbit from Poker
Flats.
   White Sands, New Mexico USA -- A `Southwest Regional Spaceport
Program' has been proposed by the state of New Mexico, and was
briefed at the December meeting of the Aerospace States Association.
This proposal seems to be built around the successful development of
a Single State to Orbit (SSTO) vehicle which could operate from
inland sites.  Current Spaceport efforts are looking into the
technical feasibility and business viability of establishing a
spaceport in southern New Mexico near White Sands Missile Range for
launching and recovering government, commercial, and international
reusable space capsules and vehicles. This program would be
administered by a proposed New Mexico Spaceport Authority.
   Churchill Research Range, Manitoba Canada -- Canada Space
Technologies Inc. is proposing a C$80 million plan to refurbish the
Churchill Research Range in Manitoba, previously used for sounding
rocket launches.  Their estimates are they will be a potential
market of commercial smallsat launches worth C$200 million annually
by 1999, and to exploit this, CSTI is looking for a company as a

partner which has a "long-term interest in space that needs
strategic access to launch services: a partner that could steer
business our way."
   Cape York, Australia -- As of the end of December, funding for
the Cape York project was to cease if the latest organization trying
to develop a commercial launch site on the Cape York peninsula could
not show verifiable financial backing for the project.  Current data
indicates Cape York International Space Launch Ltd. did not raise
the money needed, and Australian government financing has ended for
this project.  This is not necessarily the end of the Cape York
project as it could be continued under private funding, but is
definitely a strong negative.
   Woomera, Australia -- The Australian Space office has funded an
A$1.25 M feasibility study into re-opening the Woomera launch range
in Southern Australia through a consortium of British Aerospace
Australia, Auspace and Hawker de Havilland.  Key issues being
studied include the ability to refurbish Woomera into an operational
site, the potential for finding potential investors for such a
project as a commercial venture, and assessing if sufficient users
could be captured to make such a project a financial success.  As
part of this effort the "Southern Launch Vehicle", a smallsat
launcher, is being examined to put small (<2200 pounds) payloads
into LEO.  [It should be noted this effort is independent effort
from the Ausroc group which attempted a suborbital launch from
Woomera last month.]
   [Commentary:  Just a roundup of the current status of several
proposed commercial launch sites.  After writing this, I noted I did
not include the new commercial facility for Proton just approved for
Pletsesk in Russia (see the related article).  Of the sites listed
above, the most active financially and politically is Spaceport
Florida, having spent several millions in supporting commercial
launch infrastructure at Cape Canaveral, and demonstrating a very
active political presence both within and outside of Florida.
They've had the advantage of being located where most of the US
commercial launches take place, and of having good support from the
Florida state government.
   Of the remaining sites, California and Virginia are probably the
next most well developed.  Both are existing launch sites, with
existing infrastructures and operations, and with some local and
regional political support.  There have been some frictions between
EER and NASA during construction of the Conestoga launch pad and
other launch support facilities at Wallops, but they seem to have
been smoothed over.  The only vehicle planned for Wallops is COMET,
but other vehicles have been proposed for that site as well.
   On the other coast of the US, California is making a strong pitch
for commercial launches from VAFB.  California's state and local
governments appear to be making an honest effort to streamline the
process to get commercial users into VAFB, but until there is a
larger need for commercial polar launches and some of the regulatory
and market questions are resolved for LEO communications satellite
constellations, they probably won't see much commercial action at
VAFB.
   A year ago, I would have put Alaska and Hawaii higher in the
probability and active list.  But Alaska's commercial launch site
was very closely identified with IMI and use of IMI's OrbEx launch
vehicle, but as IMI is now in severe financial problems, a
commercial launch site at Poker Flats is now rather questionable.
Hawaii, after a very strong start in the late 80's, has not seem
much recent activities related to a commercial launch.  During the
interim, several vocal and active anti-launch political
organizations have sprung, and while they are primarily directed
against US military suborbital flights from Hawaii, they have also
directed their ire against the proposed commercial launch site.
This will make a future commercial launch site more difficult, if
not impossible.
   Georgia and Alabama are also looking to get into the market.
Unfortunately, the competition is tough and established in the
market.  While their sites might be useful, they will have to offer
an amazing deal to get enough commercial companies to be a real
success.  I would not be surprised if Alabama's entry does not try
to overtly link itself to on-going microgravity suborbital missions
out of the UAH CCDS in Huntsville, or to test flights for Marshall
Spaceflight Center or Redstone Arsenal (home of the US Army
Strategic Defense Command).
   As a final note on US commercial launch site activities -- a lot
of the activity in the US to establish 'commercial' launch sites
seems to be fed by the availability of "Space Grant" money from the
US government, which is made available for launch site
"infrastructure development", if matched by state or industry funds.
How many of these sites would be in consideration if such funds were
not available is an interesting topic for discussion.  And how many
sites the expected market might sustain is another....
   Canada's entry for a commercial launch site seems to be a "me
too" proposal -- and I think might be linked to the Bristol
Aerospace proposal to develop a small Canadian orbital launch
vehicle or a hope to get one of the LEO constellation firms
interested in a "local" high-latitude site.  CSTI has identified
they will need a strong commitment from a major commercial player
before reactivating the Churchill range.
   Cape York seems to be dying.  Several consortiums have tried to
organize the funding and regulatory go-aheads to start up the
commercial launch site in northern Australia, but none have been
able to locate real financing or chart a path through the regulatory
hurdles.  The "Southern Launch Vehicle" consortium seems more real,
and while they are looking to buy most of their launcher technology
from other nations and launch from an existing site, they still have
to show a competitive advantage from other launch sites.  If
evaluated on a purely financial and market basis, they may also find
themselves without a sustainable competitive advantage without a key
strategic partner guaranteeing a reasonable market.
   The wild card in this deck is New Mexico, home of the very active
White Sands Missile Range.  A commercial launch site at WSMR might
make sense to support some of the on-going suborbital test launches
for NASA and the DoD, and might be capable of expanding into an
orbital spaceport if fully reusable rocket technology is proven out.
There are significant unanswered questions here, but this option is
an interesting one.]

5-  NASA ANNOUNCES BLOCK BUY OF LAUNCHERS FOR EOS
   In one of the most important contracts for the commercial launch
industry this year, NASA is planning to release a single request for
proposals (RFP) for a large block of launch services.  The RFP is
expected to request bids for over 20 intermediate size launches,
each capable of putting 13000 pounds into 705 Km high polar orbits.
This projected launch demand is predominately driven by launch of
   NASA's Earth Observation System (EOS) spacecraft for the AM, PM
and CHEM series.  At three flights each, the EOS series can be for
up to nine launches, plus additional launches for the Tracking and
Data Relay Satellite (TDRSS) system and follow-on Geostationary
Operational Environmental Satellites (GOES) satellites are expected
to also be included in the RFP.
   [Commentary:  This contract is one of the three most important
launch services contracts to be decided this year.  Combined with
the other two major contracts -- the USAF MLV-3, and the Iridium
initial constellation launch contracts -- a very large chunk of
commercial launch demand for the next decade will be determined this
year.  Winning one of these contracts will provide a solid business
base for the next decade for a launch services firm.  If an existing
firm does not win at least one of these contracts, its  ability to
compete may decline,  as winning firms can use these large multiyear
contracts to maintain a higher-rate, more efficient production line.
   Primary candidates to bid on this contract are expected to be
Martin Marietta (proposing a Titan III) and General Dynamics (an
Atlas II series booster) since their off-the shelf systems come
close to provide this expected launch capabilities.  McDonnell
Douglas is rumored to be examining a highly upgraded Delta rocket
(the "Delta III") to meet this contract's  requirements, and those
of the USAF MLV-3 contract, but little information has been released
about this option.
   In the future, there is also a possibility of a second EOS launch
system contract.  The AERO and ALT series of EOS spacecraft are
currently envisioned as much smaller satellites, in the range that
Delta or Pegasus could launch them.  There are 5 AERO satellites
planned (approximately Pegasus class) and 3 ALT satellites
(approximately Delta class).]

6-  IRIDIUM NEGOTIATING WITH INVESTORS AND FOR PROTONS
   Over the past month, there have been two significant news
releases relating to the Iridium communications constellation.
Iridium Inc., a subsidiary of Motorola Inc., has been proceeding
with plans to place a constellation of 66 satellites in low Earth
orbit (LEO) to provide world-wide, seamless voice and data
communications.  They are the largest and most sophisticated of the
LEO communications satellite constellations currently being
proposed.
   To fund the Iridium venture, Iridium Inc. has been seeking
investors to fund a world-wide investment pool to provide funding
for the project, as well as to offer entry into differing global
regional markets.  About $3.4 B is required to take the Iridium
concept into operations, and Iridium's parent, Motorola, has already
sunk about $100 M into the project.  Recent press report state
Iridium has been successful in lining up several major investors,
including the government of Brazil and United Communications Co. of
Thailand, each for $80 M for 5% ownership in the project, in
addition to Hutchison Telecom Ltd. of Hong Kong (which had
previously announced joining).  Iridium reports they expect to
complete negotiations with investors during the first quarter of
1993 to fund the full $3.4 B needed
   Also, Iridium is in negotiation with Krunichev Enterprises for 3
launches of Iridium satellites on the Proton launch vehicle from the
Pletsesk launch site in Russia.  Krunichev Enterprises represents
the factory near Moscow which produces the Proton launch vehicle,
and has been offering Proton launch services on a commercial basis.
An Iridium spokesperson confirms the report they are in negotiation,
but would not release details of the on-going negotiations.  It is
rumored Krunichev will trade launches for an equity share in
Iridium.  The  Iridium spokesperson stated Iridium plans to rely
primarily on US launch providers to launch the planned 66-satellite
constellation.
   [Commentary: Two interesting news items on Iridium.  The first is
important in that the financial status of Iridium has been a topic
of hot debate.  The $3.4 B investment needed to institute the full
Iridium constellation is the largest amount of any competing LEO
communications system.  While Iridium could probably provide more
and more highly sophisticated services than its LEO competitors, it
also requires the largest investment.  Iridium had set a preliminary
target to have the investment consortium set up by the end of
December.  As that milestone rolled by and no news appeared about
new Iridium investors, rumors have appeared that Iridium is in deep
financial trouble, and could not find the necessary investors.
   News releases and rumors are now more favorable.  While I believe
the jury is still out that can get sufficient investors signed on (I
want to know who, how much, and hear it from the other investors as
well as from Iridium), the current news indicates the deal is still
in play, and progress is being made.  It is important to note
Iridium has apparently made inroads into lining up international
partners.
   The importance of key international partners cannot be
overemphasized, since they can provide entry into international
regional markets (obviously needed for a 'global' system), and to
work the regulatory issues within each region if Iridium is to have
access to the frequency allocations within those countries, or to
tie into other national telecommunications systems.  There are been
no rumors, yet, of partners in the key markets for Europe and East
Asia, but strategic partners here are essential.  We'll just have to
wait to see what happens....
   The news on negotiations with Krunichev was, interestingly
enough, broken by the Interfax News Agency in Moscow.  That these
negotiations were underway was revealed when Russia's new Prime
Minister Viktor Chernomyrdin released permission to sign the
contract and gave permission to invest US$40 M of Russian government
funds to prepare Pletsesk.  The Russian government funding is tied
to recoupment from Krunichev in hard currency from future contract
revenues and is earmarked for upgrading the Pletsesk launch site to
support commercial launches.  Chernomyrdin requested a plan be
proposed before 1 Feb from the Russian defense ministry for this
commercial launch facility.
   There is some discrepancies in the reported information -- most
report that a Proton launch vehicle will be used for the 3 Iridium
launches, and at least one report has Pletsesk being upgraded for
commercial launches of converted SS-19 ICBMs.  From other
developments (such as the Krunichev/Lockheed teams reported below),
the Iridium launches on Proton make sense.  However, conversion of
Pletsesk to launch Protons is more questionable, since the demand
for Proton launches into high inclination is very low.  So we can
only conclude some launches on a Proton are in negotiation, and the
commercial use of Pletsesk by some vehicle is being considered.
Conversion of Pletsesk for SS-19 launches has other international
ramifications, which I will try to cover in a later article.
   The investment for a new commercial launch site is important news
in Russia as it provides needed jobs for Russian workers idled by
the collapse of Russian military spending and the Russian defense
industry.  Some reports claim jobless ex-Defense workers could
number up to 1.5 million by this spring in Russia.  Obviously, while
$40 M is small in response to the problem, it is a sign of direct
government support for commercial space activities in Russia and of
great import to the Russian ex-defense space industry.
   However, export of US-built satellites to Russia is still
prohibited under US technology transfer regulations.  Some case-by-
case exceptions have been made, but removing the restrictions is not
planned by the US government until "rules of the road" trade
negotiations are complete with the Russian government for commercial
space activities.  These negotiations are currently underway, now
involving the US, Russia, and the European Economic Community.
   There is also a heated on-going discussion within the US trade
community regarding space deals with Krunichev.  I'll cover this in
the related article on the Lockheed/ Krunichev deal.]

7-  LOCKHEED TEAMING WITH KRUNICHEV ANNOUNCED
   It was announced at the end of December that Lockheed Corporation
and Krunichev Enterprises had teamed to market the Russian-built
Proton launch vehicle.  To be exact, Lockheed Commercial Space
Company, a new wholly owned subsidiary of Lockheed Missiles & Space
Company, Inc., and Krunichev Enterprises have agreed to establish
Lockheed-Krunichev International (LKI) to act as a selling agent for
future Proton launches.
   The joint business venture has been approved by Russian Prime
Minister Viktor Chernomyrdin, and the U.S. Department of State has
provided an initial authorization for the space venture.  At the
press conference announcing the teaming, both Lockheed and Krunichev
stated they are committed to comply with all relevant regulations
and laws in both countries, including the Missile Technology Control
Regime.
   [Commentary:  This project has sparked a lot of interest and
discussion in the commercial space community.  From the outside,
this deal looks pretty good.  The Proton is a reasonably priced
launch vehicle with a good track record and is being considered for
a variety of commercial and international launches.  Lockheed
appears confident that Krunichev's production line can keep
supplying them as needed.  Lockheed's evaluation, according to Mel
Brashear, VP and head of LMSC's Space Div. is 40% of the Proton is
manufactured from scratch at the Krunichev plant and another 40%
(the launcher's six RD-253 storable liquid engines) are built at a
nearby NPO Energia factory. Another 10% are parts that are easily
replaced from other sources, and only about 10% are key parts
produced only by Russian subcontractors.
   This venture fits strategically with Lockheed's future business
plans as they are just entering the commercial satellite
manufacturing business.  By teaming with Krunichev, Lockheed can now
offer a low-priced "one stop shop" satellite and launch deals to
potential customers.  And of obvious interest, Lockheed is teamed
with Motorola to build the satellites for the Iridium constellation,
for which Krunichev is negotiating for the launch 3 Protons
potentially carrying a total of 21 Iridium smallsats.
   The exact financial nature of the new relationship was not yet
released, but significant funds have been rumored to be involved.
   However, the remaining hurdles for this venture may be sticky, as
they involve political wrangling regarding international trade
regulation.
   The first issue to be overcome is the current US government
prohibition on the export of US satellite technology (such as
Lockheed's satellites) to Russia until current "rules of the road"
trade negotiations are completed.  Complicating matters, Krunichev
is under investigation for violation of the Missile Technology
Control Regime (MTCR) regulations restricting the transfer of
technology which could promote the development of long range
missiles capable of carrying weapons of mass destruction.  In a
previous and rather contentious action, export sanctions were
imposed upon Glavkosmos in Russia and the Indian Space Research
Organization as they were found by the US State Department to be in
violation of the MTCR in transferring cryogenic engines and
technology from Russia to India.  Krunichev is under investigation
for having a key role in this transaction, and could have export
sanctions placed upon it.
   Adding to this complication, this deal has become embroiled in a
rather nasty political fight in Washington DC over roles and control
of export licenses.  First, there is the unresolved investigation
into whether or not sanctions should be imposed upon Krunichev.
This has led some parties in the US government to wonder if any
proposed commercial dealings with Krunichev should be approved until
the investigation is complete (expected first part of this year).
   Secondly, during trade negotiations in Moscow during mid-
December, Yuri Koptev, the head of the Russian Space Agency
reportedly told a US negotiating team he would consider encouraging
Russian enterprises to sell rocket technology to other countries
"like Iraq" if they could not compete in the Western commercial
launch market.  The quick action by the State Department to approve
the Lockheed/Krunichev deal is seen by some as a quid pro quo to
discourage Russian rocket technology sales to other countries.
   Lastly, the State Department made a quick approval of the
Lockheed/Krunichev deal without completing consultations with other
involved organizations within the US government.  Legally, the State
Department has the sole right to grant export approval, but other
organizations such as the Defense Department, normally have an
important role in evaluating export approvals involving sensitive
technologies.  If there are disagreements between the US Government
organizations involved, decisions are normally resolved through
interagency coordination, and if that can't resolve the issue, then
bumped up to the president and the US national security advisor for
a decision.
   In the Krunichev/Lockheed case, a meeting was held just before
Christmas where representatives from several agencies expressed
strong opposition to granting the request from Lockheed to team with
Krunichev to sell Protons.  According to published reports, concerns

------------------------------

End of Space Digest Volume 16 : Issue 075
------------------------------