Regulatory restrictions hampering U.S. firms
Strict regulations spurred by security and privacy concerns hinder booming businesses
The wildfires that tore through Fort McMurray, Alta., last spring presented firefighters plenty of problems, not the least of which were the myriad invisible hot spots smouldering under the thick smoke that threatened to flare up at any time.
Satellite imagery company DigitalGlobe Inc. knew where those hot spots were. The Coloradobased company had been taking pictures of the fires from space for the Alberta government, capturing a light wavelength known as shortwave infrared that penetrated the smoke to reveal heat.
DigitalGlobe’s satellites could identify hot spots as small as threeand-a-half metres in length. But the U.S. government would only allow the company to release data with a resolution of seven metres — meaning if the hot spot was the size of a pickup truck or smaller, DigitalGlobe wasn’t allowed to tell firefighters where it was.
Walter Scott, DigitalGlobe’s founder and chief technology officer, said the U.S. government’s refusal was typical of a regulatory regime that was designed 30 years ago, when satellites had few applications beyond the military. Now that satellite imaging is a booming commercial business, the industry says it’s time for an update. Privacy advocates, on the other hand, are urging caution. As facial-recognition technology improves and the speed of distributing images gets closer to real time, the potential for nefarious or invasive uses of satellite images grows.
Scott said DigitalGlobe, which Canadian space company MacDonald, Dettwiler and Associates Ltd. (MDA) is now buying in a $3-billion deal, never got an explanation from the government for why its application to release the higher resolution data was denied.
The company has been seeking approval to sell its shortwave infrared imagery for more than three years to no avail, Scott said. U.S. National Oceanographic and Atmospheric Administration officials did not respond to a request for comment.
But being allowed to sell better images is as important to satellite companies as it is other organizations. In cases such as the Fort McMurray wildfires, lives are at stake.
“It’s not the big areas that are burning that are the cause of concern — you can see those. It’s the hot spots that might flare up that could place a firefighter’s life in danger if you don’t know about them,” Scott said. “Those are the ones that are more concerning. And those are the ones where, unfortunately, we have not been able to release the native resolution data.”
But more broadly, the future of a potential multibillion-dollar market rests on what any new regulations look like.
Today, satellite imagery clients range from insurance companies to shipping firms to hedge funds.
“It would be a stretch to say every business will be using satellite imagery, but you can make an argument that the majority of large businesses could benefit from adding satellite imagery to their technological stack in some way,” said Zack Bogue, co-managing partner of venture-capital firm Data Collective, which has investments in three satellite companies. “We’ll see that over the next five years.”
Over time, the U.S. government has loosened some of its regulations related to image resolution and exporting equipment, but still keeps close control over who companies can sell images to and what new technologies get licences.
That tight grip has benefited Canada, with MDA, DigitalGlobe’s soon-to-be parent company, developing a lead in commercial radar satellite technology that many in the industry have said was made possible because of this country’s more permissive approach.
No one is arguing for complete deregulation, however. There are obvious national security and privacy concerns that must be addressed as satellite imagery becomes cheaper and more readily available.
Current commercial satellite imagery resolution restrictions make it impossible to identify individuals, but there’s not much the owners of factories, ships and homes can do to stop the distribution of images they would prefer stay out of the hands of competitors or the general public.
Tamir Israel, a staff lawyer at the Canadian Internet Policy & Public Interest Clinic, said the privacy concerns raised by satellite imagery are similar to those related to drone photography and closed-circuit television and will only become more heightened as technology improves.
“The solution is not to not let the high-resolution data out. The solution is to deal with the privacy problems better,” Israel said. “Eventually, there’s going to be a need for some international standards-setting around how to make these types of protections global in nature.”
Terrorists and enemy states are among the unsavoury characters who would be eager to make use of high-resolution satellite imagery in the absence of restrictions.
Ram Jakhu, director of the Institute of Air and Space at McGill University’s faculty of law, said the industry understands it will always be important to keep some restrictions for national security reasons.
“There are certain areas and facilities that should not be made public internationally or that information could fall into the wrong hands,” he said. “The private sector understands that very well. I don’t think the private sector is or should be asking for total freedom.”
But Nick Allain, a spokesman for Spire Global Inc., which provides satellite imagery of oceans and remote areas, said a little more freedom would be nice. He said four of the startup’s 125 employees are full-time legal staff to help the company navigate existing laws and regulations.
One recent U.S. regulatory change particularly welcomed by Spire was the decision in 2013 to make it legal to export small satellites for civilian purposes. The government had considered such satellites weapons before then.