COMMERCIALIZATION OF CIVIL LAND AND WEATHER SATELLITES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85M00158R000200100024-5
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 12
• Document Creation Date: December 22, 2016
• Document Release Date: August 13, 2009
• Sequence Number: 24
• Publication Date: March 16, 1983
• Content Type: MEMO

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UNCLASSIFIED
16 MAR 1983
DCI/ICS 83-4281 LOGGEj
15 March 1983
T.+arapnartmental Affairs
NOTE FOR: i - I C I terdepartmental Affairs
C
P
or
Special Assistant to the D
Deputy Director Tor ro i i..y s -i
SUBJECT: Commercialization of Civil Land and Weather Satellites
REFERENCE: Memo to DCI from DD/ICS dated 4 March 1983; Subject: Status:
Transfer of Civil Space Remote Sensing Systems to the Private
Sector (DCI/ICS 83-4256)
1. An update on the subject is forwarded in response to your telephone
request of this morning. You said that the DDCI was planning to discuss this
item with Judge Clark tomorrow. We would appreciate any feedback that you may
be aware of.
2. Due to your short-fuse requirements, this information will be sent to
ting Director/ICS.
A
h
c
e
you in parallel with the normal review by t
Attachments: a/s
STAT
STAT
STAT
UNCLASSIFIED
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UNCLASSIFIED
SUBJECT: DCI/ICS 83-4281
Orig-Addressee (SA-DCI/IA)
1-Executive Registry
1-D/1-CS
1-DD/ICS
1-DDI/
1-OD&E
1-C/COMIREX
1-PPS Subject
1-PPS Chrono
1-ICS Registry
DCI/ICS/PP -03/15/83)
STAT
STAT
STAT
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Status of Commercialization of Civil Land and Weather Satellites
(15 March 1983)
The Administration announced President Reagan's decision to transfer land
and weather satellites on 9 March 1983 (see 9 March articles from The
Washington_Post and The New York Times).
Press reports on this subject also appeared in The Washington Post on
8 March and 10 March 1983. On 13 March, Hobart Rowen featured this
subject in his economic impact column in the Business section of The
Washington Post. Rowen's column is particularly negative.
We checked with the White House Staff on this subject. They verified
that the President had concurred in Baldridge's recommendation in the
decision memo. However, they said that they had no plans to distribute
the final version of the decision memo. It is presumably very close to
the version we concurred in.
Commerce is now proceeding to implement the decision.
-- A memo to agency participants is expected shortly.
-- They will request a high-level representative for the interagency
review board and full-time worker(s) to help in preparation of the
RFP.
-- The Administration-is pushing for implementation prior to CY 1984.
Commerce has advised them that they don't feel they can make that
schedule.
We are continuing our planning for DoD/DCI studies on remote sensing
issues that must be resolved prior to implementation.
UNCLASSIFIED
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THE WASHINGTON POST -- 9 March 1983,
Reagan het to dell
eater Satellites
Wants to Cut Cost, Boost Business
By Philip J. Hilts
Washington Post Staff Writer
President Reagan has decided to
sell the nation's five weather and
land satellites and its planned ocean
satellites to private companies, John
V. Byrne, administrator of the Na-
tional Oceanic and Atmospheric Ad-
ministration, confirmed yesterday.
Byrne said at a news conference
that the sale is part of an overall
program to "commercialize" some
government functions, including
parts of the weather services.
He said the satellites are being
sold to cut costs and to give a boost
toa new American business enter-
prise. France and Japan are already
planning to launch commercial land-
sensing satellites.
The jobs of more than 3,500
.NOAA employes, or 30 percent of
the agency's work force, will be re-
viewed to see if they should be ter-
minated and their holders given pri-
ority when the jobs go. to private
companies.
Under the proposal, the weather
and land satellites, which cost more
than $1.5 billion to launch into
Earth orbit, would be sold to the
highest bidder as a package or sep-
arately.
The government would then pur-
chase weather data from the new
owner and distribute some of it. Part
of it now distributed free of charge
would still be free, and some would
be, sold. General and emergency fore-
casts would still be distributed at no
cost, Byrne said.
Whether or not the satellites are
purchased, some "specialized" fore-
casts-for example, frost warnings
and other weather warnings for spe?
cialized crops, traditionally available
to farmers-will now be sold.
Byrne said there are no reliable
figures to show that such a sale
would save. the government money.
He said the government might lose
money. at the rate'of hundreds of
millions of dollars annually, for per-
haps 10 years. "But that's only a
guess .... We don't know," he said.
He said he hoped that, in the long
run, the purchaser would make
money and no longer require 'subsi-
dies, but said there are no reliable
figures showing that this will be the
case.
Byrne was asked whether, since
there apparently are no figures to
support the government's proposal,
"the reason this is going on now is
you've been told to do it" by the
White House.
"Of course, the reason you're here
is that a decision has been made,"
Byrne told reporters, adding that the
decision was made only after a stu-
dy. He said there is faith in the pri-
vate sector and its ability to make
the proposal work.
Robert Denman of the National
Farmers Union described the plan
and other such "commercialization"
proposals 'as "shortsighted and mis-
guided." He added: "They are .. .
restricting data by charging fees for
it, and doing it at a time when many
people, like the small farmer, can't
afford those fees."
"This is symptomatic of this ad-
ministration. This becomes a wind-
fall for private weather organiza-
tions, the only other people you will
be able to turn to when you need
information," he said.
Consumer activist Ralph Nader
said he wondered what would he
charged for hurricane forecasts.
"This is a grotesque giveaway.
What's next? Obviously they will he
selling the. FBI" to some private se-
curity force, Nader said.
The dollar giveaway, he said, is
"not the most serious part of this. It
is taking information that everyone
has free access to and turning it over
to a private monopoly to traffic and
profit with it."
Sen. Larry Pressler (R-S.D.) said
a study completed at the end of last
year by NASA and the Defense I)e-
partment showed that the proposal
to sell the satellites will cost the gov-
ernment $800 million.
The study also concluded that,
creating a single, government-sub-
sidized. ? monopoly company for
weather and land-sensing informa-
tion might actually inhibit the "free-
market process," he said.
NOAA also is reviewing all its
other parts, including weather-nmon-
itoring stations and computer weath-
er analysis, to decide what else can
he turned over to private companie?
ky sale or contract.
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THE NEW YORK TIMES -- 9 March 1983
Administration Proposes Selling
U.S. WeatherSatellites to Industry
By PHILIP M. BOFFEY
Special tone Now Ycatram
WASHINGTON, March 8 - The Rea-
gan Administration announced today
that it planned to sell to private Indus-
try the nation's four weather satellites
and the Government's lone satellite for
surveying land resources.
The plan calls tor industry to operate
the satellites an three ground control
stations but sell the data back to the
Government for further distribution
and perhaps to commercial users as
well. The sale would require Congres-
sional approval. Several lawmakers ex-
pressed concern today but withheld
judgment pending more details..
The move was justified by Adminis-
tration officials as a potential way to M'
duce future budget deficits and to in-
volve the private sector in activities
that it might perform as well or better
than the Federal Government.
Larry M. Speakes, a White House
spokesman, said President Reagan ap-
proved the transfer because the satel-
lites "would be better operated by the
private sector."
But officials of the National Oceanic
and Atmoppheric Administration,
which operates the five satellites, ac-
knowledged at a news conference that
they could not be sure the transfer to
private hands would actually save any
money. The move was promptly criti-
cized or questioned by commercial and
consumer groups who say they suspect
that the changeover will ultimately re-
strict or raise the cost of weather infor-
Continued on Page All, Column 1
Continued From Page Al
mallon that had previously been widely
available without charge.
The impetus for the sale, according to
officials at the atmospheric agency,
was a desire by the White House Office
of Management and Budget to end the
money-losing program known as Land-
sat, which has been developing remote
sensing satellites to survey the earth for
crop information, minerals, urban
sprawl, pollution bands and ' to collect
other ground data. So far only one such
satellite is in operation and a second is
under construction.
Sought Weather Satellites
But it quickly became clear, the offi-
cials said, that private companies had
no interest in picking up Landsat alone
because the market for its data was far
too small to justify developing and oper
ating the satellites.
So the sale of the weather satellites
was initially conceived by industry
sources as an incentive. In fact, the
Communications Satellite Corporation,
or Comsat, a private company, pro-
posed that it take over Landsat and
build new satellites and develop a pri-
vate market for the data if the Govern.
ment would also sell to Comsat the
weather satellites and would subsidize
the whole operation for 15 years by
guaranteeing to buy both weather and
earth resources data. The total guaran.
tee, according to atmospheric agency
officials, would have been about $5 bil-
lion over 15 years.
According to some Administration of-
ficials, the concept also fit the Adminis-
tation's philosophical disposition of
tration's'
transferring activities to the private
sector. So it is conceivable, they said,
that the weather satellties might be sold
separately, even if the Landsat pm
gram died in the process.
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John V. Byrne. administrator of the
National Oceanic and Atmospheric Ad-
wo d be ministration, that ivate concerns
en er separate bids
on the land survey or weather satellites
or a single bid for both systems. He said
it was possible that some satellite
manufacturers or. small specialized
companies might want to bid -an all or
parts of the package. But officials at the
atmospheric c agency to acknowledged
C
company
co
Comsat appeared e
most interested.
pa Comsat _ _ which nevertheless has some re,
sponsibilities delegated to it by the Gov-
ernment in accordance with the Coln-
munications
y is the Satellite States partici-
compan
pant in Intelsat, the multinational or-
ganization that provides international
satellite communications. It is also the
United States representative to the In-
ternational maritime Satellite Organi-
zation, which is establishing a global
system for maritime satellite services.
Owns Constar Satellites
Within the United States, Comsat
owns the Constar satellites that are
leased to the American Telephone Company for telephone coma
Telegraph
munications, and is the majority owner
of the Marisat satellites that provide cations*
ahMr. Byrne co said the bidding would be
Mr. Bylimited to American companies to.in-. sure that the Defense Department,
which receives some of its. weather in-
formation from civilian satellites, bad
guaranteed access.
The likely effect of the transfer on
users of weather data was not clear.
Mr. Byrne said that the transfer.
..shouldn't make any difference" to the
man in the street who depends on daily
weather forecasts to tell him '"whether
or not he should wear a raincoat."
Not Dismantling It, He Says
He stressed that the,Adma Administration
was not, at this point,
selling any part of, the National
Weather Service," the agency which
prepares daily and long-term weather
forecasts that are generally supplied
without charge to printed and elec-
tronic elec-
tronic press and many othHowever, apart from the effort to
changes M sell
the satellites. other possible
lated to weather service functions were
being studied. said that at-
mospheric instanbe, Mr. Byrne
mospheric agency had contracted for a
study of the weather service to deter-
mine which functions should be Per-
formed by the Federal Government and
which by the private sector. The gen-
eral philosophy guiding this study, he
said, is that the Government should
probably continue to provide the na-
tional and regional forecasts that serve
the entire public, but should perhaps
spin off or at least charge users for spe-
cialized data of interest to only a nar-
row industrial le, he cited forecasts of
As an examp examp
or
frost that might forecasts.
other such agricultural
The proposed transfer was criticized
by a spokesman for the National Farm-
ers Union and by Ralph Nader, the con-
sumer advocate, who called it "a ripoff
of the American taxpayer."
officials that cerrioverthe satel-
satel-
knowledgedg
lite We has been weather and re-
tists, who feared given
mote sensing research might be
short shrift by the private sector; by of-
ficials at the National Academy of Sci-
ences and the National Academy of
public Administration; and by foreign
inter-
countries, which fear data might be
change of meteorological
disrupted.
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THE WASHINGTON POST
8 March 1983
U.S. Considers
Selling Parts of
Weather Service
To Private Side
By Philip J. Hilts
Washington P...1tStatt Writer
The Reagan administration is considering
selling parts of the nation's weather service
to private companies.
A Cabinet recommendation to take the
first step by selling the nation's land, ocean,
and weather satellites is already on Presi-
dent Reagan's desk, John V. Byrne, admin-
istrator of the National Oceanic and Atmo-
spheric Administration, said yesterday.
The Cabinet Council on Commerce and
Trade, chaired by Secretary of Commerce
Malcolm Baldrige, in December recom-
Though land-viewing satellites were long
expected to become commercial enterprises,
the move to "privatize" weather satellites
and parts of the national weather service
could fundamentally change century-old in-
ternational agreements for free sharing of
weather data among 100 nations. of the
world.
Proposals to "commercialize" parts of the
nation's weather service have caused con-
cern among other nations as well as weather
scientists in this country. They and the
news media now receive weather data and
satellite photographs without cost and de-
mended asking "the Department of Com-
merce to oversee the transfer of the civil op-
erational weather, land, and future ocean
satellites to the U.S. domestic private sector
as soon as possible," according to minutes of
the Dec. 15 council meeting.
At the same time, NOAA is reviewing the
operation of the National Weather Service
and other parts of the agency-including
weather monitoring stations all over the
United States, and weather analysis and
forecasting operations-to decide what part
of the services also can be turned over t(.
private companies by sale or contract.
pend on them for storm warnings and other.
information.
Rep. James H. Scheuer (D-N.Y.) has
asked the General Accounting Office to
study whether such a sale can take place
without the consent of Congress. In any.
case, Byrne has said in writing that no at.?
tion would he taken without congressional
approval.
The chief rationale for selling the weath-
er and land-viewing satellites, one former
NOAA official said, is -that the United
See WEATHER, A6. Col.1
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WEATHER, From Al
States Is quickly ?aHing behind other na-
Cons in the commercial exploitation of sat-
ellites for agriculture and mineral and oil
exploration.. France and japan both are
planning to launch commercial satellites to
take and sell land pictures. Neither has an-
nounced, any interest in operating comm-
mercial weather satellites.
.
One university scientist said selling the
weather satellite system to a private com-
pany could harm the work of professional
iv eathci.researcherg and reduce'the quality
of data gathered if profit becomes the pri-
mary motive. "The whole system could be
permanently disabled," he said.
Another scientist, Robert Fleagle, a pro-
fessor of atmospheric sciences at the Uni= non-weather satellite data, he said, "We
versity of Washington, said selling of the have a satellite looking down at our coun-
satellites appears to be only one part of the try and 'we -don't call it ,a spy satellite be
commercialization of many parts of NOAA.. cause we have non-discriminatory access to
that "could come down, to dismantling a it.... But if we were charged 100 times
good portion of the country's weather ser-
vices."
Since weather monitoring, data analysis
and forecasting require a large, well-coor-
dinated organization, he said, "A lack of a
government infrastructure would really be
a serious thing. A commercial outfit, itself
would just not have the - raw _ material. to
work with."
A Canadian official said his government
also was "very concerned" about the satel-
lites being sold to private companies. Not-
ing that the U.S. government already sells
to take "a long and careful look" at any
Reagan administration proposal.
"The only serious proposal so far [from
the commercial satellite firm Comsat] could
cost the government well over $300 million
per year [in subsidies], and that may be
significantly more than the government
now pays for these. services, or to provide
these data," Scheuer said.
Of the approximately 12,000 employes at.
NOAA, the jobs of 3,500 will be reviewed
for "commercializing," according to NOAA
official William J. Coleman. That figure
does not count the possible satellite We.
By one Congressional estimate, 40 percent,
of the entire agency may be considered for.
"commercializing."
Byrne said that the White I-ouse has not
as much by some company, then we might
begin to wonder about this.
"Meteorological data has traditionally
been free," he added. "Everything that a
country gathers is thrown into the pot to
make the, work[ weather system work."
Because of its large land masses, Canada
spends five times as. much as the United
States per -capita on *eather monitoring,
with much of the Canadian data becoming
part of the daily weather forecast for ,parts
of the United States.
Scheuer said that Congress would have
made a decision on selling the satellites or
parts of the weather service. But he said
the proposed changes are all "geared to a
leaner, harder, more efficient operation" of
the government.
"I don't think there is any question that
in the future we are not going to continue
doing business as we have in the past," he
said. "The changes are more significant
than they have been in the past. When you
look at the federal deficit, you can see
we've got to do something."
He said service agencies have to be con-
sidered candidates to be turned over to
commercial hands.
"In some cases someone ought to be able
to make a profit on some of these things,"
Byrne said.
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THE WASHINGTON POST -- 10 March 1983
Comsat Is Leading
In Bea to Buy U.S.
Weather Satellites
By Michael Schrage
and Philip J. Hilts
Washington Post Staff Writers
Communications Satellite Corp.
appears to be the leading candidate
to take control of the government's
weather and remote-sensing satellite
system if the Reagan administration
succeeds in its proposal to sell the
service to private industry.
Comsat's plan, called EarthStar,
would have the company ' purchase
the government satellite system for
roughly $300 million. The govern-
ment, which is the major user of the
satellite data, would guarantee to
purchase it from Comsat for at least
10 years for an undetermined price.
The plan, which Comsat initially
proposed in late 1981, contends that
they could run the satellite.business
more efficiently, saving the govern-
ment as much as $600 million in the
first five years of operation and $80
million each year thereafter.
The Washington-based company,
which also hopes to broadcast tele-
vision programming directly to cus-
tomers via satellite, argues that
EarthStar would be the first step in
creating a competitive marketplace
for weather and remote-sensing sat-
ellite services. The company points
to European and Japanese efforts to
establish satellite data systems con-
sortia to market such data interna-
tionally.
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COMSAT, From El
Comsat is awaiting a response
from the Commerce Department.
The plan, however, has sparked
charges that Comsat wants the gov-
ernment to subsidize its entry into a
new business. "On the left hand,"
says Jonathan Miller, editor of Sat-
ellite Week, "Comsat says, `we'll take
it from you' and on the right hand,
'we want you to guarantee a profit.'
Comsat wants privatization-but it
also wants subsidies."
Warren Washington, a govern-
ment scientist who serves on the Na-
tional. Advisory Committee on
Oceans and Atmosphere, called the
plan a "guaranteed subsidy" for
Comsat. Experts have estimated that
the satellite system Comsat would
acquire is worth $1 billion more than
Comsat would be paying for it.
Comsat cost estimates are directly
See COMSAT, E5, Col. 4
Currently, says John McElroy,
head of satellite services for NES-
DIS, 95 percent of the information
from the weather satellites is sold to
government agencies. In the remote-
sensing area, where satellites are
used for monitoring agriculture, ex-
tractive , industries and resource
management, the government con-
sumes roughly half the data. '
McElroy argues that there would
be significant growth in private sat-
ellite services if the government got
out of the business because "the gov-
ernment is simply not a good mar-
keter" of data. He dismisses the idea
that turning weather satellites over
to private business could lead to the
public being charged for forecasts.
"The National Weather Service,"
says McElroy, "would continue to re-
ceive the data."
But Leo R. Harrison, president of
the National Weather Services Em-
ployees Organization, says that plan
"makes as much sense as selling the
Washington Monument then renting
it back so the public can go in free."
Several potential competitors,
such as American Science and Tech-
nology of Bethesda and Space Ser-
vices of Texas, had no direct com-
ment on the Comsat proposal but
both believe that a growing market-
place for satellite data services would
be possible if the government phased
out its involvement. NESDIS
sources indicate that it costs $150
million annually ' to support a re-
mote-sensing satellite and about half
that to maintain a weather satellite.
But Satellite Week's Miller says it
is still far from certain that a signif-
icant marketplace for satellite data
actually exists outside of the govern-
ment. "So far, the nuinbers don't
add up-there are few known num-
bers at all. And the American tax-
payer, having capitalized the devel-
opment of these systems through
their taxes, should know what
they're going to get," Miller said.
at odds with a.study by the Com-
merce Department's National Envi-
ronmental Satellite, Data and Infor-
mation Service, which asserted that
private ownership would result in a
cost increase of over $190 million an-
nually to the government. The re-
port, presented late last year, was re-
jected by the Commerce Depart-
ment.
Another issue, raised by some con-
gressional staff members, is that the
proposal could give Comsat a de
facto monopoly if it receives a
guaranteed long-term contract from
the government-the largest con-
sumer. of satellite data. One aide
questioned whether 'other satellite
companies would have an incentive
to enter the market under these cir-
cumstances.
It is not clear, however, whether
there could be a private commercial
market for satellite information,
some experts said.
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THE WASHINGTON POST -- March 13, 1983
Reagan's Satellite dell-Off
Would Rip Off Taxpayers
would have the nerve to suggest sell-
ing the government's five weather
and land-resource satellites to a pri-
The Reagan administration is
hereby awarded the Nobel Prize for
chutzpah. What other president.
h OBART ROWEN
ECON0311C IMPACT
while it buys the information back
from the private company?
What other administration would
strip its budget for funds for two
Landsat satellites, crippling the pro-
gram, and then claim it must trans-
fer operations to the private sector
to stay competitive with France and
Japan?
What is involved here, as consum-
er advocate Ralph Nader said, "is a
rip-off of the American taxpayer."
Congress ought to let President Rea-
gan know promptly that it makes no
sense. "This is a grotesque giveaway;
What's next?" asked Nader. "Maybe-
they'll sell the FBI` investigative ser-
vices to the Wackenhut detective
agency."
The real outrage-is not so much
that the government and taxpayers
are certain to suffer an economic
loss. It's the crass willingness of the
Reaganauts to let weather informa-
tion, which should be available to all
vate company at a big loss,, and
guarantee its profits for 15 years
citizens as a community service, de-
generate into an ordinary commodity.
to be trafficked in for profit.
Information on land resources and
weather is critical for the health and
safety of everybody. Yet, we are now
verging into a system where only
those who have the money to pay for
certain specialized informat' n will
get it. Snapped National Farmers
Union representative - Robert Den-
man: "This is symptomatic of this
administration. It becomes a wind-
fall for private weather organiza-
tions."
Reagan's plan is ' justified by
White House press aide Larry
Speakes on the dubious proposition
that the satellites "would be better
See IMPACT, F4 -
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Planned Sale of Weather Satellites:
Sham, Charade .and Sweetheart Deals
IMPACT, From PI The whole stupid proposal orig- less gov rnment the better, and the
?- ' inated. because, the budget-pruners best government is none at all.
operated. byjhp private, sector. It
at the OMB, after having messed up The notion that a private compa-
calls getting rid of the nation's' the Landsat program' by ill-con- ny could manage the satellites more
four weather satellites and ating Undsat', ceived cuts in funding, decided that efficiently is totally unproved. As a
the one satellite now operating to it would dump these remote-sensing matter of fact, officials at the Na-
survey the Earth for crop and other satellites altogether. When no pri- tional Oceanic and Atmospheric Ad-
resource information. Three ground- vats company came forward to. pick ministration, which operates the five
control stations would also be part of up Landsat, Comsat, which is not satellites, told reporters after the
the deal. operated by fools, offered to take White House announcement they
Even the notion that the govern- Landsat in a package deal if the gov- couldn't confirm that selling the sat-
ment would take bids is something ernment..tossed in the weather sat- ellites would save any money.
of a sham and charade, because one ellites. The government would then To launch these satellites into
compano,r the. Communications Sat- guarantee that Comsat would not, orbit cost the American taxpayers at
have- Corp. (Corack for the eaw t- lose money by buying both weather least $1.6 billion. No one in the Rea-
and land' information from it for the gan administration will say what the
heart deal being arranged. If it goes
through, Comsat will have a monop-
oly on selling weathei information;
and the Reagan administration will
have perpetrated a mockery of the
free-enterprise system.
next 15 years., government might get back, but you
What wesee can be certain that it won't be much.
here is the ultimate
idiocy of the hard-core antigovern- (Comsat' would like to pay about
ment-philosophy of the Reagan' ad- $300 million.) By guaranteeing the
ministration-the theory, that the buyer a profit, NOAA officials con-
cede that the government stands to
lose hundreds of millions of dollars a
year..~,..
Consumer groups; like Nader's,
are quite sure that,the real effect
will be either to raise the cost of get-
ting weather information to those
who.had been getting it without cost
before, ' or ; to reduce they general
availability of vitat data. Scientists
express concern that im the hands of
a private company, which must pay
attention .;to bottom-line profits,
some 'eiitieal research will get short
shrift.
And dhow about the Coast Guard?
Since its own satellite isn't working,
it's been getting weather information
from NOAA. Must the Coast Guard
now rely. on a private company?
Maybe we.can sell the Coast Guard
itself. And then, there's the Penta-
gon. Please look into that, David
Stockman.
Approved For Release 2009/08/13: CIA-RDP85M00158R000200100024-5