A failed Chinese satellite launch in February 1996 (Reuters photo) Also in Today's Post • Lott Says Satellite Helped China

By Walter Pincus
Washington Post Staff Writer
Wednesday, July 15, 1998; Page A04

U.S. companies began taking satellites to China and Russia for launching into space in the late 1980s under agreements negotiated by the Bush administration and renegotiated by the Clinton administration to make up for inadequate launching facilities here, according to administration, congressional and commercial space experts.

The practice, under accords that set a floor on prices and a ceiling on the number of U.S. launches abroad, has attracted attention because of charges in Congress that the Clinton administration allowed China to acquire sensitive U.S. missile technology from American companies contracting to have satellites launched on Chinese rockets. In discussions surrounding the controversy, however, it has not previously been clear that the main reason U.S. companies go abroad for launches is that, for the most part, they have nowhere else to go.

This is so because the United States, until the Challenger shuttle disaster in 1986, had planned to launch most military and commercial satellites from shuttles, not from ground-launched rockets. In the years immediately after the accident, those plans had to be sharply changed because the shuttle program was cut back drastically – denying carrier vehicles to satellite producers. In addition, facilities for ground-launched rockets at Cape Canaveral and Vandenberg Air Force Base had never been designed to handle all the needs of U.S. satellite manufacturers.

While Congress contemplates amendments to U.S. law that would limit or cut off U.S. satellite sales and missile launches in China and Russia, the Air Force is looking for ways to finance modernization of the nation's two aging space launch facilities to make them ready to handle slowly increasing numbers of commercial customers.

But there is resistance. Rep. F. James Sensenbrenner Jr. (R-Wis.), chairman of the House Committee on Science, said in April there are "real problems" in the U.S. launch infrastructure. With commercial launches at Cape Canaveral exceeding government ones for the first time this year, he said, the Air Force "is asking why it should pay for what is becoming a commercial function."

After the Challenger shuttle went down, one immediate solution for American satellite companies was to use France's Ariane family of rockets, which were first launched from French Guiana on the northern coast of South America in 1988. Ariane carried a few U.S. satellites aloft. Another possibility was to turn to the Russians and the Chinese, who as the Cold War ground down began offering commercial launch services at government-subsidized, cut-rate prices.

Weighing alternatives, the Bush administration decided to work with those countries because of economic as well as national security interests. The White House determined that space launching would inevitably become a global business but that U.S. companies should work to maintain their dominance in constructing satellites, leaving much of the launch market to others.

"The launcher is just a truck," said Brent Scowcroft, Bush's national security adviser, during a recent interview. "We thought we could control adequately any intelligence benefits they got from launching. At worst, no matter what was transferred, it would be way out on the margins of changing their [nuclear missile] capabilities."

On the other hand, he said, "We wanted to keep our lead in satellites, which provide a lot of benefits, including intelligence."

The resulting plan was to allow U.S. satellite manufacturers to launch abroad, but to negotiate a quota system with the Russians and Chinese on how many launches would be allowed and to limit their price to no more than 15 percent below the costs of launching in the United States. The idea was to protect U.S. companies from getting completely cut out of the market by cheap launch rates in Russia and China.

"In those early days, quotas were good," said Julie Andrews of Lockheed Martin Corp., which builds both space launchers and satellites. "U.S. companies were entering an area where there were nonmarket economies, where their launch systems could pose an unfair risk to domestic launches."

The Bush agreement with China in 1988 set a ceiling of nine Chinese launches of American-built satellites between 1989 and 1994, according to congressional sources. Bush, before he left office, gave national security waivers to U.S. manufacturers who had obtained licenses for those nine launches.

When the Clinton administration renegotiated the agreement in 1995 with the Chinese, four Bush-approved launches had not yet taken place. The new agreement, which runs until 2001, added 11 more launches. It included a provision that the United States could increase that number if demand grew, congressional sources said.

In September 1993, the quota agreement with Russia was extended by the Clinton administration to provide for eight payloads over the next five years with not more than two taking place within a 12-month period. The price could not be more than 7.5 percent below U.S. prices under the agreement.

Launching from China and Russia provided some additional benefits, according to Clayton Mowry of the Satellite Industry Association.

It reduced the risk that the failure of one rocket would hold up a multi-satellite launching program. Mowry noted that when one rocket fails, it is normally six months or more before the same type of rocket can be used again. When Boeing Co.'s most reliable rocket, the Delta 2, had a failure in 1996, it forced the Air Force to stop its launches for four months and set back plans by Motorola Inc. to get its planned Iridium communications satellites into orbit on the next planned Delta 2 launch.

Launching abroad also helps open foreign markets to American satellite manufacturers, Mowry said. The Chinese want the satellites they buy launched on their Long March rockets and the purchaser has the right to make that determination, Mowry said.

The Clinton administration reviewed the Bush decisions and in 1995 an interagency task force pushed for continuing the quota system and adding Ukraine, which had available for commercial use the Zenit, its own giant space-launching rocket.

As one former Pentagon participant put it recently, "As long as U.S. national security is protected by our ability to build launchers for our own military programs, the answer was 'no' to the question of whether we should care about launches abroad."

On the other hand, he said, "We build 80 percent to 90 percent of the satellites sold internationally, and it is to our advantage to keep that ratio." He said control of satellites in space was considered by the interagency group to be a major national security factor for the future.

As for the U.S. space launch capability, the Pentagon reported that over the past five years, government shots far outnumbered commercial ones. Military and intelligence satellites launched from Cape Canaveral in Florida and Vandenberg Air Force Base in California totaled 107. Another 54 launches from the two government facilities were for the National Aeronautics and Space Administration, mostly shuttle flights, while just 41 others were for commercial customers.

This fiscal year, the 13 commercial shots scheduled from Cape Canaveral to go into equatorial orbits will top the 12 Pentagon or NASA launches there for the first time. At Vandenberg, where satellites are sent into less-popular polar orbits, government launches still top commercial shots by an 11 to 7 ratio.

In the next five years, however, the Pentagon hopes to change totally its emphasis on military and NASA missions in favor of commercial ones. It projects commercial launches will nearly double, to 81, while Defense shots drop to 50, less than half the number during the previous five years, while NASA remains almost constant at 59 launches.

On Capitol Hill, the effort has received mixed support. Rep. David Joseph Weldon (R-Fla.), whose district encompasses Cape Canaveral, has written into the fiscal 1999 Defense Authorization Bill language that fences $400 million in different accounts for spending solely on upgrading the two space launch ranges. "We are relying on antiquated technology to keep our launch ranges operational," Weldon said recently on the House floor.