Ban on satellite exports is lifted

Law reverses ’99 restrictions

U. S.- made communications satellites used to orbit the Earth to relay phone calls, link ships to shore and broadcast television programs will become legal for civilian export under new legislation that President Barack Obama signed into law recently.

Although the United States founded the industry, manufacturers were forced to pull back from international markets after a 1999 law categorized the satellites as weapons and restricted their export. At the time, Congress feared that selling satellites abroad could allow technology secrets to fall into the wrong hands.

However, a defense bill signed by Obama will undo that step and let U.S. companies sell communications satellites as civilian technology rather than being considered deadly arms. Among the beneficiaries will be companies like Boeing, Hughes and Space Systems/Loral.

“This is a tremendous assist for an industry that is inherently international,” said Patricia Cooper, president of the Satellite Industry Association, a business group in Washington. “It will ensure our place at the forefront of space.”

Thirteen years ago, the industry stumbled after Republicans in Congress pressed for a law that restricted communications satellite exports. The lawmakers praised the measure as a security precaution that would prevent China and other perceived foes from stealing technology secrets. Detractors saw it as a cynical ploy meant to discredit former President Bill Clinton’s administration and its policy of Chinese engagement.

The old law put communications satellites on Washington’s list of export-controlled munitions: tools of war like tanks, bombs, missiles and equipment for making nuclear arms. Foreign companies took the opportunity to increase their satellite sales.

While the new law gives Obama the authority to return communications satellites to their previous status as civilian technology, it retains provisions that restrict the export of satellites to nations like China and North Korea, and to sponsors of state terrorism like Iran.

U.S. Sen. Michael Bennet, D-Colo., who introduced a bill to change the policy on satellite exports and whose state is a space-industry hub, said the measure offered satellite manufacturers a crucial lift.

“Companies across the country have been operating at a disadvantage due to these policies,” he said in a statement. “These reforms will give our businesses a chance

to compete globally while still protecting our national security interests.”

The strict export controls arose from a political fight over satellite launchings by China, which in the 1980s began offering cheap rides into orbit on low-cost rockets. Presidents Ronald Reagan and George H.W. Bush, both Republicans, approved transfers of U. S. spacecraft to Chinese rockets, as did Clinton, a Democrat.

Starting in early 1998, a series of upsets brought the expanding trade to a halt. Two U.S. satellite-makers involved in the Chinese launchings, Hughes and Loral, were accused of giving China advice about making not only commercial rockets, but also military missiles.

Republicans, who controlled Congress at the time, argued that satellite exports could lead to a hemorrhage of secret materials and information and said that China might already have stolen encryption secrets.

After the strict export rules took effect in 1999, the legal complications involved in selling communications satellites and components abroad conthese tributed to a sharp decline in the U.S. share of the market, from a dominating position to about 50 percent today.

During the 2008 presidential campaign, Obama said the rules had “unduly hampered the competitiveness of the domestic aerospace industry” and vowed to push for change.

U.S. Rep. Howard Berman, D- Calif., who for a decade helped lead the movement for change, said the new measure would help restore the nation’s competitiveness in the global satellite market.

“Treating commercial satellites and components as if they were lethal weapons, regardless of whether they’re going to friend or foe, has gravely harmed U.S. space manufacturers,” he said.

Berman added that the benefits extended beyond the manufacturers. The national security establishment relies on the companies and their technological skills to fulfill the government’s satellite needs and to develop spacecraft involved in a wide range of military missions.

“If they can’t compete in the international marketplace,” he said of the companies, “they can’t innovate and cannot survive.”