LAND REMOTE-SENSING COMMERCIALIZATION ACT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86B00338R000200290011-9
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 35
• Document Creation Date: December 21, 2016
• Document Release Date: September 11, 2008
• Sequence Number: 11
• Publication Date: May 17, 1984
• Content Type: REGULATION

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Calendar No. 891
98TH CONGRESS REPORT
2d Session } SENATE { 98-458
Mr. PACKWOOD, from the Committee on Commerce, Science, and
Transportation, submitted the following
REPORT
[To accompany H.R. 5155]
The Committee on Commerce, Science, and Transportation, to
which was referred the bill (H.R. 5155) to establish a system to pro-
mote the use of land remote-sensing satellite data, and for other
purposes, having considered the same, reports favorably thereon
with an amendment in the nature of a substitute and recommends
that the bill do pass.
PURPOSE OF THE BILL
The purpose of the bill is to provide a framework for a phased,
orderly commercialization of land remote sensing technologies. The
commercialization framework includes provisions for appropriate
Government regulation of private land remote sensing, continued
Federal research and development in remote sensing, and contin-
ued Government archiving of land remote sensing data.
BACKGROUND AND NEEDS
The Federal Government's civilian land remote sensing satellite
system is called Landsat. The Landsat system, developed by the
National Aeronautics and Space Administration (NASA), has been
in operation since 1972. NASA operated Landsat as an experimen-
tal statellite system until 1979, when responsibility for system op-
eration was transferred to the National Oceanic and Atmospheric
Administration (NOAA). To date, five satellites have been launched
in the Landsat series. The fifth satellite, Landsat 5, was launched
on March 1, 1984, and is expected to function until 1987. Landsat 5,
the last Government-owned land remote sensing satellite scheduled
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for launch, was launched more than a year ahead of schedule be-
cause of the premature failure of Landsat 4.
Landsat orbits the earth at an altitude of 705 kilometers and
generates worldwide data that can be processed to reveal details of
the earth's surface. The Landsat orbit is a 16-day cycle, meaning
that the satellites pass over a particular point on the earth's sur-
face very 16 days.
All five Landsats have been equipped with Multispectral Scanner
(MSS), which has a spatial resolution of 80 meters and covers four
spectral bands. Landsat 4 and Landsat 5 also carry the more ad-
vanced Thematic Mapper (TM), which has 30 meter spatial resolu-
tion and provides data in seven spectral bands.
Landsat data have been processed into forms useful for many ap-
plications. The data is used to observe renewable resources, includ-
ing crop classification, monitoring, and forecasting, as well as for-
estry management. Nonrenewable resource applications of Landsat
data include oil and mineral exploration and hydrological applica-
tions. The data are also used for land-use planning, cartography,
and environmental observation and monitoring.
The Landsat system was developed by NASA as an experimental
program, and although the program was a technical success, no
long-range plans were made to convert it to more user-sensitive,
operational system. The lack of government commitment to long-
range plans suppressed the Landsat data market. In fact, current
data sales do not come close to meeting procurement and operation
costs. Nevertheless, despite the lack of Government marketing, by
the late 1970's it had become clear to some observers that land
remote sensing data could eventually have sufficent commercial
value to attract private investment.
The first clear policy statement of Landsat commercialization
was made by the Carter administration in 1979. President Carter
cited commercialization of Landsat as a goal of his administration
and committed the United States to provide continuity of data flow
from the Landsat system at least through the 1980's.
The Reagan administration decided early in its tenure to acceler-
ate the process of transferring Landsat to the private sector. In
1981, President Reagan asked his Cabinet Council on Commerce
and Trade to evaluate the prospects for private remote sensing.
Concurrently, the administration abandoned plans to construct
Landsats 6 and 7 to follow Landsat. 5.
On September 3, 1982, the Department of Commerce issued a Re-
quest for Information (RFI) for comment by prospective private op-
erators of Landsat and the Government's meteorological satellite
(Metsat) systems. The Department received fourteen responses to
the RFI. The Cabinet Council on Commerce and Trade subsequent-
ly recommended to the President that commercialization of both
Landsat and Metsat be pursued.
The President announced his intent to commercialize Landsat
and Metsat on March 8, 1983. The Congress responded by including
a provision in the fiscal year 1984 NASA authorization (Public Law
98-52) stating that the administration could not transfer Landsat
or Metsat to the private sector without prior approval from the
Congress.
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In May 1983, the administration created a Source Evaluation
Board (SEB) for Civil Space Remote Sensing within the Depart-
ment of Commerce to solicit and evaluate proposals from private
parties interested in acquiring and operating Landsat and Metsat.
The SEB issued a draft Request for Proposals (RFP) for industry
comment. The draft RFP pertained to both the Landsat and Metsat
systems.
At the same time, the Commerce Committee and the Senate
unanimously passed a concurrent resolution expressing opposition
to Metsat commercialization. In reviewing the legislation, Commit-
tee members agreed that the national security concerns and inter-
national obligations relating to weather information could not be
satisfied by private Metsat operation. The Committee felt that
these concerns were not as critical with Landsat and that Landsat
commercialization should be given further consideration. The
House passed an identical resolution.
The fiscal year 1984 Appropriations Act for the Department of
Commerce (Public Law 98-166) contained a provision precluding
the use of any funds to pursue Metsat commercialization. The ad-
ministration withdrew the Metsat commercialization proposal upon
the enactment of Public Law 98-166 in November 1983.
On January 3, 1984, the SEB subsequently issued a RFP for the
Landsat system only. The RFP required respondents to bid for de-
velopment of a follow-on system to Landsat, and permitted bids for
the operation or acquisition of the existing system. Seven bids were
received in response to the RFP. By June 1984, the SEB will recom-
mend to the Secretary of Commerce what bid(s), if any, should be
accepted. The Department of Commerce will then seek to contract
for development of a follow-on system and for the operation of
Landsat and marketing of Landsat data.
Pursuant to Public Law 98-52, the Department can neither enter
into a contract to construct further Landsats nor contract for a pri-
vate land remote sensing capability, such as a follow-on system to
Landsat 5, without enabling legislation. The Committee feels
strongly that a continuous U.S. land remote sensing capability can
be provided only by enactment of legislation during this session of
Congress and strongly endorses H.R. 5155, as reported.
The Committee recognizes that private remote sensing ventures
cannot profit until markets for data expand. Further, the Commit-
tee feels that data markets will not expand until the private sector
aggressively markets data products. The Committee concludes,
therefore, that a phased commercialization process, including the
private marketing of data, is needed to transfer Landsat successful-
ly to the private sector.
Any commercialization of space activities raises issues for which
policy must be determined. Issues relating to Landsat commercial-
ization include data continuity, foreign competition, nondiscrimina-
tory access to data, national security, international policy, appro-
priate regulation of private remote sensing activities, determina-
tion of the long term Federal role in remote sensing research and
development and data archiving.
Having reviewed these issues, the status of the Government's
Landsat system, and the prospects for land remote sensing com-
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mercialization, the Committee supports enactment of land remote
sensing commercialization legislation.
LEGISLATIVE HISTORY
Senator Gorton, the chairman of the Science, Technology, and
Space Subcommittee, introduced S. 2292 on February 9, 1984. The
bill is cosponsored by Senators Goldwater and Kasten.
Two other bills relating to Landsat have been introduced and re-
ferred to the Committee during the 98th Congress. The bills are S.
1855, introduced by Senator Hollings and cosponsored by Senators
Ford and Riegle, and S. 1861, introduced by Senator Pressler.
The Subcommittee on Science, Technology, and Space held a
hearing on Landsat commercialization on March 22, 1984. Wit-
nesses at the hearing included representatives of the Federal Gov-
ernment, the Office of Technology Assessment, and a diverse group
of private firms and associations interested in land remote sensing.
On April 9, 1984, the House of Representatives passed H.R. 5155,
a bill similar to S. 2292. H.R. 5155 was subsequently referred to the
Committee. On May 8, 1984, the Committee, without objection, or-
dered H.R. 5155 reported with an amendment in the nature of a
substitute. The language of the substitute reported by the Commit-
tee is that of S. 2292 with a number of amendments agreed to by
the Committee.
SUMMARY OF MAJOR PROVISIONS
The bill, as reported, provides for a phased commercialization of
land remote sensing and appropriate Federal regulation, research
and development, and archiving of data.
Title I of the bill contains findings, purposes, and definitions.
Title II represents the first phase of the commercialization proc-
ess. The Secretary of Commerce is directed to contract for private
marketing of data from the Landsat system. The Secretary also
may contract for private operation of the system, but may not
transfer ownership of Landsat to the private sector. Title II is in-
tended to expand markets for land remote sensing data through an
aggressive private marketing effort.
Title III of the bill provides for a second phase of commercializa-
tion, a 6-year transition to commercial land remote sensing. The
Secretary of Commerce is directed to contract for private develop-
ment, operation, and ownership of a follow-on system to Landsat.
Title III requires that the contract be awarded by means of a com-
petitive process, and establishes specific criteria, not in order of pri-
ority, for the Secretary to consider in evaluating proposals. The
contract may provide for Federal financial support including loans,
loan guarantees, and other creative financing mechanisms to
assure timely provision of the capability. No Federal data pur-
chases will be guaranteed. The premise of Title III is that the pri-
vate sector can develop a system that is less expensive and more
market-driven than a Government system and that such a system
will result in net cost savings to .the Government.
Title IV provides a complete framework for licensing of commer-
cial land remote sensing systems, including the follow-on system es-
tablished under title III. The Secretary of Commerce is authorized
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to license qualified private entities to operate land remote sensing
satellite systems. The Secretary is further authorized to issue regu-
lations to ensure that private systems are operated in accordance
with international law and national security concerns. To obtain a
license, the licensee must guarantee data from a system will be
made available to all potential users on a nondiscriminatory basis.
Title V directs NASA and the Department of Commerce, Interior
and Agriculture to continue remote sensing research and develop-
ment programs. Other appropriate Federal agencies also are en-
couraged to conduct research and development in remote sensing.
The provisions of title V are intended to provide for continued U.S.
worldwide leadership in remote sensing technology and applica-
tions.
Title VI contains general provisions. The Secretary of Commerce
is directed to maintain and upgrade an archive of land remote
sensing data and the Federal Communications Commission (FCC) is
authorized to allocate radio frequencies to operators of remote sens-
ing systems.
ESTIMATED COSTS
In accordance with paragraph 11(a) of the rule XXVI of the
Standing Rules of the Senate and section 403 of the Congressional
Budget Act of 1974, the Committee provides the following cost esti-
mate, prepared by the Congressional Budget Office:
U.S. CONGRESS,
CONGRESSIONAL BUDGET OFFICE,
Washington, D.C., May 15, 1984.
Hon. BOB PACKWOOD,
Chairman, Committee on Commerce, Science and Transportation,
U.S. Senate, Dirksen Senate Office Building, Washington, D.C.
DEAR MR. CHAIRMAN: The Congressional Budget Office has re-
viewed H.R. 5155, the Land Remote-Sensing Commercialization Act
of 1984, as ordered reported by the Senate Committee on Com-
merce, Science and Transportation, May 8, 1984. This letter super-
sedes CBO's May 10 estimate for this bill.
H.R. 5155 provides for the phased transfer of the federal govern-
ment's civil land remote-sensing activities to the private sector
while continuing to oversee their operation in order to preserve na-
tional security and certain other international interests of the
United States. Transfer to a private party could relieve the federal
government of both capital and operating costs associated with the
Landsat system. On the other hand, the costs to federal agencies of
acquiring remote-sensing data may be expected to increase upon
privatization of land remote-sensing activities, and the transfer of
such activities may involve a subsidy to the private sector party se-
lected to provide remote-sensing capability. The net result could be
either a savings or a cost to the federal government-but the conse-
quences cannot be fully assessed until such time as a contractor
has been selected and contract terms and conditions have been de-
termined.
Titles II and III provide the mechanisms for transfer of the Land-
sat system to the private sector. Title II requires the Secretary of
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Commerce (subject to available appropriations) to enter into a con-
tract with a private party to market the data generated by the ex-
isting Landsat system. The sale of the data is subject to certian re-
strictions and requirements, and the federal government retains
title to all data generated by the system. The contract is subject to
the requirement that it be likely to result in cost savings to the
federal government, as determined by the Secretary. If no propos-
als are found acceptable by the Secretary, he is required to contin-
ue operating the system and to market Landsat data.
Title III requires the Secretary of Commerce (subject to available
appropriations) to contract with a private party to assume the ca-
pability of generating remote-sensing data of a specified minimum
volume and quality and to market such data for six years. The con-
tract may provide for indirect and direct financial support by the
federal government for a portion of the capital costs of providing
remote-sensing capability and for other financial considerations.
The contract may not provide for any guarantee of federal pur-
chases and may include a rebate of some percentage of sales to fed-
eral agencies. If no bid is found to be acceptable, the Secretary of
Commerce is authorized to ensure continued remote-sensing data
availability by procuring and operating the necessary systems, to
the extent provided in advance by appropriation acts. Section 307
authorizes the appropriation of $60 million for fiscal year 1985 for
the purposes of carrying out this title. How much of this amount is
spent, and when the outlays occur, depend on the magnitude and
type of financial support chosen. There is presently no clear basis
for projecting such outlays.
Title IV establishes the authority of the Secretary of Commerce
to license operators of land remote-sensing systems. Title V directs
the Administrator of the National Aeronautics and Space Adminis-
tration and other federal agencies to continue and enhance remote-
sensing research and development programs. Finally, Title VI pro-
vides for nondiscriminatory access to unenhanced land remote-
sensing data and requires the Secretary of Commerce to continue
to archive land remote-sensing data.
Because the terms and conditions of the contract(s) to be entered
into by the government, including the dollar amount of any subsi-
dy to be provided to the contractor, have not yet been determined,
the potential budget impact of H.R. 5155 cannot be estimated with
any precison. The baseline for any such estimate is the continued
operation by the federal government of the civil remote-sensing
system. This could cost the federal government as much as $900
million between 1985 and 1989, assuming the need to purchase,
launch and operate two additional Landsat D-type units over the
period. Sale of data to nonfederal purchasers would partially offset
these outlays. Currently, such sales are very small, accounting for
only 25 percent of all Landsat data distribution in fiscal year 1983.
The cost of commercialization to the federal government is large-
ly dependent upon the subsidy payments under Section 305 of the
bill. The bill relies upon a competitive bidding process to produce
the lowest possible subsidy. Although there is no provision in the
bill that would require the Secretary of Commerce to accept the bid
with the lowest overall price, Section 303 would require any pro-
posed agreement to be reviewed by the Congress. While bids have
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been received and reviewed by the Department of Commerce's
Source Evaluation Board (SEB), these documents are proprietary
and are not available for our inspection.
Conceivably, a private party might be able to take over and de-
velop the land remote-sensing capability required by H.R. 5155 for
less than it would cost the federal government to continue the
Landsat program, if a "no-frills" system were developed. The De-
partment of Commerce has indicated that such savings are possible
and, in fact, that no contract will be awarded unless the projected
cost to the government is substantially less than the estimated cost
of continued federal operation. At least one participant in the
SEB's RFP process has indicated that it would be able to provide
Landsat-type capability meeting all government requirements for
approximately one-tenth of the cost of the current Landsat system.
If such a proposal were accepted, little or no federal subsidy would
be required and the total cost to the federal government would be
reduced to the cost of purchasing remote-sensing data required by
federal agencies, as well as some minimal expense for continued li-
censing and archiving activites. The net costs to the government
under this arrangement would be less than under current law, al-
though the savings cannot be estimated at this time.
On the other hand, it is possible that the subsidy cost will exceed
the cost of continued federal Landsat operation, because there is no
stated requirement that a subsidy greater than the cost of federal
operation be deemed unacceptable. The total cost to the govern-
ment would also include the purchase of any remote-sensing data
required by federal agencies, although this cost might be partially
offset by any rebate on federal purchases. Thus, the federal govern-
ment's subsidy and data costs could exceed the cost of continued
federal operation, even before indirect impacts from possible tax
credits to the contractor are considered.
In addition to the federal budget impact, it is possible that some
additional costs would be incurred by state and local governments
if the price of land remote-sensing data rises after the commercial-
ization of Landsat. These governments are relatively small users of
remote-sensing data, and their demand for Landsat products has
historically been quite sensitive to price increases. Moreover, provi-
sions in Section 603 of the bill that prohibit reproduction by any
purchaser of remote-sensing data could increase costs for these
users, which have traditionally relied upon sharing satellite data
among themselves to reduce costs.
If you wish further details on this estimate, we will be pleased to
provide them.
Sincerely,
RUDOLPH G. PENNER, Director.
REGULATORY IMPACT STATEMENT
In accordance with paragraph 11(b) of rule XXVI of the Standing
Rules of the Senate, the Committee provides the following evalua-
tion of the regulatory impact of the legislation:
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The legislation requires the Secretary of Commerce to create a
new regulatory mechanism for the licensing and regulation of com-
mercial land remote sensing systems. The Department of Com-
merce will assume theese responsibilities in lieu of its existing
management of the Federal land remote sensing system. Therefore,
the overall level of responsibility should not be greatly altered and
actually may be reduced with the commercialization of land remote
sensing.
The legislation also requires the FCC to allocate radio frequen-
cies and the Secretary of Commerce to consult with other Federal
agencies, in particular the Departments of State and Defense, to
become aware of the effect of proposed land remote sensing sys-
tems on U.S. international and national security policies. These are
functions that are already performed by each of these respective
agencies; any additional impact, therefore, should be minimal.
The Committee notes that the proposed legislation will affect a
very small number of firms and individuals in the short term be-
cause the commercial feasibility of land remote sensing systems
has yet to be proven.
The legislation facilitates the phased commercialization of the
existing Federal land remote sensing system (Landsat) into a com-
mercial land remote sensing enterprise. Enactment of this legisla-
tion should result in a net cost savings to the Federal Government
even though, in the early years of the commercialization process a
federally subsidy will be required.
The legislation also lays the foundation for the emergence of a
"new" land remote sensing industry in the United States which
should create new job opportunities and provide additional tax rev-
enues to the U.S. Treasury.
Any applicant for a license pursuant to title IV of the legislation
must agree to give the Secretary of Commerce the authority to in-
spect the facilities and financial records of any land remote sensing
system as a condition of obtaining the license. This provision is in-
cluded in the legislation to ensure compliance with existing U.S.
national security and international policies and the principle of
nondiscriminatory access to data and to ensure operation of these
new land remote sensing industries within the parameters of appli-
cable antitrust laws.
PAPERWORK REQUIREMENTS
The legislation could require additional paperwork because it in-
cludes two different RFP to contract with the Federal Govertn-
ment, a reporting requirement on the commercialization process, li-
censing and regulatory requirements, consultation between Federal
agencies, radio frequency allocations by the FCC, and the archiving
of data. With the exception of the RFPs and the reporting require-
ments, however, all of the activities required by this legislation are
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already carried out by the concerned Federal agencies. Also, the
paperwork burden on the applicant for a commercial land remote
sensing license compared to the current licensing requirements of
other satellite systems. Finally, and most importantly, the RFP
process required by the legislation have alrady been initiated by
the Department of Commerce. Therefore, the most onerous paper-
work requirement resulting from the legislation may not be nece-
sary if the final contractual award made by the Department of
Commerce complies with the legislation.
SECTION-BY-SECTION ANALYSIS
TITLE I: DECLARATION OF FINDINGS AND PURPOSES
Section 101.-Findings
Section 101 contains the findings governing the framework for
commercialization of land remote sensing provided by the bill.
Some of the more important findings in the view of the Committee
are:
1. The Landsat system has established the United States as
the world leader in land remote sensing technology;
2. Continuous collection of land remote sensing data from
satellites is of major benefit in managing resources;
3. Land remote sensing involves national security concerns
and international obligations;
4. The establishment of private land remote sensing ventures
is in the national interest;
5. Private industry is best suited to develop markets for
remote sensing data;
6. Cooperation between the Federal Government and private
industry is necessary to manage Landsat while honoring inter-
national and national security responsibilities and broadening
data markets enough to support private remote sensing ven-
tures; and
7. Cooperation should be structured to assure data continuity
while minimizing Federal expense and regulation.
The Committee believes that the commercialization framework
provided by the bill is consistent with these findings. Title II and
title III provide for cooperation between the Federal Government
and private industry aimed at managing Landsat, developing data
markets, and minimizing Federal expense. Title IV creates a
framework for the establishment of private ventures and includes
provision to protect national security and international interests.
Section 102.-Purpose
Section 102 contains purposes of the bill. The purposes are:
1. To provide a framework for a phased, orderly commercial-
ization of land remote sensing technologies;
2. To assure continuous availability of land remote sensing
data;
3. To reaffirm the U.S. policy of making all land remote
sensing data available to all potential users on a nondiscrim-
inatory basis;
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4. To establish mechanisms for regulation of private land
remote sensing systems, with particular attention to relevant
national security and international concerns;
5. To preserve the United States' worldwide leadership in
remote sensing technology;
6. To minimize Federal expense in providing for a continu-
ous U.S. land remote sensing capability.
Section 103.-Definitions
Section 103 contains definitions of terms used in the bill. The
Committee feels that some of the definitions will be vitally impor-
tant in the implementation of the bill, and the Committee wishes
to clarify the intent of some of the definitions.
Paragraph (1) defines the "Landsat system" as Landsats 4 and 5
and related ground equipment, systems, and facilities. This defini-
tion is relevant in title II, in which the Secretary of Commerce is
directed to contract for private marketing of data from the Landsat
system. The Committee excludes Landsat 1, 2, and 3 from the defi-
nition because most of the commercially valuable data from these
satellites are already in the public domain, and are not likely to
contribute to the development of data markets, which is the objec-
tive of title II.
Paragraph (2) defines "nondiscriminatory basis" as meaning
"without preference, bias, or any arrangement that favors any pur-
chaser or class of purchasers over another." Applications of this
definition are contained in subparagraphs (A) through (C).
Subparagraph (A) states that data products must be made avail-
able to all potential buyers at standard, published prices. The Com-
mittee intends for this to mean that data will be available to each
and every potential buyer, rather than merely to the first or high-
est bidder.
Subparagraph (B) requires that all purchasers are given the
same opportunities for access to data, such as timeliness of avail-
ability and terms of delivery. The Committee wishes to permit op-
erators to offer various terms of access at various prices, provided
that all terms of access are published and uniformly available.
Subparagraph (C) permits "special arrangements, such as volume
discounts, gathering of data with certain characteristics requested
by a purchaser, and maintenance of secrecy regarding any such ar-
rangements." The availability and prices of such services must be
published and uniformly available to all purchasers.
The Committee feels that allowing these arrangements enhances
the commercial prospects for land remote sensing. Further, the
Committee believes that prohibiting exclusive access to data by any
purchaser will preserve the worldwide acceptance of land remote
sensing. The Committee's rationale for this paragraph is also dis-
cussed in relation to section 601 of the bill.
Paragraph (3) defines "Secretary" as the Secretary of Commerce.
Paragraph (4) defines the term "unenhanced data". The Commit-
tee intends for the term "unenhanced data" to mean data that
have not been processed. The Committee avoids usage of the term
"digital data" in its definition in order to include raw data forms
that are not digital.
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The Committee believes that the value-added data product indus-
try is separate and distinct from the data generation industry. The
references to antitrust law included in the bill by the Committee
are intended to clarify further that the generation and sale of un-
enhanced data are to be separate from any enhancement of data
beyond the minimal processing specified in this subsection.
Paragraph (5) defines the term "United States private entity" as
any nongovernmental entity or consortium of entities, the majority
of whose assets is owned by citizens of the United States, the ma-
jority of whose personnel is comprised of citizens of the United
States, and whose principal place of business is in the United
States.
It is the Committee's intent that a Landsat commercialization
contract pursuant to H.R. 5155, as reported by this Committee,
must be with a U.S. firm or "United States private entity". The
Committee's definition of the term "United States private entity"
is meant to convey that position. The Committee realizes that in its
definition of "United States private entity" the term "majority",
which means "more than 50 percent", has created a certain degree
of uncertainty. To remedy this situation, the Committee intends to
offer an amendment during floor consideration of H.R. 5155 to con-
form the Senate's definition of "United States private entity" as
used in the Request for Proposals for Transfer of the United States
Land Remote Sensing Program to the Private Sector, dated Janu-
ary 3, 1984. In any case, the Senate definition of "United States
private entity" is not meant to be a rejection of the Department of
Commerce's definition of the term "United States firm."
Section 201.-Operation
Subsection (a) specifies the continuing responsibilities of the De-
partment of Commerce pertaining to the Landsat system. The De-
partment will remain responsible for the orbit, data collection, and
eventual disposition of the satellites and the ground equipment
used to operate the Landsat system. The Secretary also shall pro-
vide data to foreign ground stations according to the terms of exist-
ing Memoranda of Understanding.
Subsection (b) permits the Department to extend Memoranda of
Understanding relating to foreign ground stations provided that
the memoranda expire upon termination of the useful operation of
the Landsat system.
Subsection (c) permits the Department to continue to contract for
private operation of the Landsat system provided that decision au-
thority and ownership of the system and data remain with the Fed-
eral Government.
Section 201 does not alter existing law. The Committee wishes to
clarify that the Department's responsibilities for the Landsat
system will not be reduced or ended by any contract into pursuant
to title II. The use of the term "responsible" is intended to mean
that the Department itself does not have to perform the functions
specified in subsection (a), but that the Department shall see that
the functions are performed.
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The Committee recognizes that other nations have constructed
Landsat receiving stations at considerable expense. This expense
has been incurred, however, with the knowledge that Memoranda
of Understanding for receiving Landsat data expire upon termina-
tion of the Landsat system.
The Committee also recognizes that extension of any Memoran-
dum may inhibit the marketing opportunities of a contractor under
title II.
Potential title II contractors may request assurance for the De-
partment of Commerce that existing memoranda be extended. The
Committee expects that the Department will make its intentions
regarding the memoranda known to foreign nations and to a pro-
tential contractor before entering into a contract pursuant to title
II. Subsection (b) is intended to provide the Department complete
flexibility in considering the future of the existing memoranda.
Memoranda of Understanding have historically run for 3-year pe-
riods. Landsat 5 is expected to last only until 1987. Therefore, the
Committee expects that the Department will not enter into any
new memoranda that extend beyond 1987.
The operation of the Landsat system is already contracted out to
a private firm. Subsection (c) is intended to clarify that operation
of the system may continue to be contracted. The Committee en-
courages the Department to combine the contract for operation of
the system with the contract for data marketing authorized by sec-
tion 202. If such a combination is not practicable, the Department
may contract separately for system operation and marketing of un-
enhanced data.
The Secretary shall publish the date upon which the useful life
of Landsat 4 and Landsat 5 terminates. The Secretary shall also
keep the Committee advised about whether a Space Shuttle retriev-
al of Landsat 4 is being negotiated and how such an operation re-
lates to the Committee's efforts to commercialize land remote sens-
ing.
Section 202.-Marketing of Unenhanced Data
This section provides for the first phase of the commercialization
process. The Secretary of Commerce is directed to contract, by
means of a competitive process, for private marketing of unen-
hanced data from the Landsat system.
The Committee has received testimony and reviewed evidence
that markets for remote sensing data have not developed enough to
sustain wholly private remote sensing ventures. For this reason,
the Committee feels that the commercialization must proceed in
phases, beginning with private data marketing. The contracts pro-
vided for in section 202 is structured to accelerate the development
of markets for data.
Subsection (a) contains required provisions of the contract for
data marketing. because section 201 (c) requires that the govern-
ment maintain ownership of the data, the contractor will actually
sell copies of the data.
Paragraph (1) permits the contractor to set prices of unenhanced
data products as long as the contractor makes Landsat data avail-
able to all potential purchasers on a nondiscriminatory basis. This
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requirement is discussed in conjunction with the definition of "non-
discriminatory basis" in section 103 (2).
Paragraph (2) states that the contractor shall compensate the
U.S. Government for the right to sell data by payment of an initial
fee, payment of a percentage of data sales receipts, or some combi-
nation thereof.
Paragraphs (3) and (4) of subsection (a) set conditions under
which a contractor may keep and enhance data in order to sell
value-added products. Antitrust laws would require that the con-
tractor establish a wholly separate subsidiary for value-added prod-
ucts, which could be given no advantages over other value-added
entities in terms of prices or availability of unenhanced data.
Paragraph (3) requires the contractor to pay the U.S. Govern-
ment the full price of any unehanced data that the contractor
elects to use for purposes other than sale. The Committeee feels
that payment by a contractor's subsidiary to the contractor itself
does not consititute any net cost to the contractor, and that the
contractor must pay the full price for data to compete fairly in the
value-added data product industry.
Paragraph (5) requires the Secretary of Commerce to demon-
strate that any contract pursuant to title II is likely to result in
cost savings for the Federal Government. The Committee recog-
nizes that if a contractor passes to the Government a percentage of
data sales, cost savings are dependent upon how much data is sold:
Subsection (b) requires the Secretary of Commerce to publish the
requirements of subsection (a) before entering into any contract
pursuant to title II.
Subsection (c) provides for a review of any proposed contract pur-
suant to title II by the authorizing congressional committees. The
proposed contract may not be finalized until the Committees ap-
prove the contract by majority vote or a period of 30 days of contin-
uous session of Congress has passed.
The Committee endorses this subsection as further assurance
that any contract pursuant to title II will conform to the expecta-
tions of the Committee and the provisions of the bill. If a proposed
contract clearly satisfies the requirements of this legislation and
the concerns of the Committee, the Committee intends to approve
the contract as quickly as practicable. The Committee recognizes
that the benefits of a contract pursuant to title II would be maxi-
mized by the rapid execution of such a contract.
Section 203.-Awarding of the Contract
Subsection (a) directs the Secretary of Commerce to consider in
awarding a contract the financial return to the U.S. Government
and the prospective contractor's ability to expand data markets.
The Committee feels that expansion of markets during the life of
the Landsat system will contribute significantly to the success of
land remote sensing commercialization. The Committee expects the
Secretary to scrutinize closely the plans for expansion of data mar-
kets proposed by prospective contractors.
Subsection (b) states that, in the event no proposal for a contract
is acceptable under the terms of title II, the Secretary shall solicit
proposals a second time. The second competitive process shall not
exceed 120 days in length. If the second process does not attract
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any acceptable proposals, the Secretary shall report such finding to
the Congress and the Federal Government shall continue to
market Landsat data.
The Committee wishes to emphasize the importance of private
marketing of Landsat data. Subsection (b) is intended to require
the Department of Commerce to make every reasonable effort to
contract for private data marketing. While section 202(a) requires
the Secretary to contract, section 203(b) was developed in recogni-
tion of the possibility that no proposal would meet the requirments
of title II. The Committee provides for a second competitive process
because of the importance of the contract to the commercialization
process and to ensure that the Department vigorously seeks to exe-
cute such a contract.
Subsection (c) permits the contract authorized by title II to be
combined with a contract under title III. The Committee encour-
ages the Department of Commerce to combine these contracts if
practicable. If the contracts are separate, the Committee expects
the Department to provide for a smooth transition from the title II
contract to the title III contract.
The Committee wishes to reemphasize the importance of the con-
tract authorized by title II. Titles III and IV represent advanced
stages of the commercialization process which would be greatly en-
hanced by expansion of data markets during the life of the Landsat
system.
The Committee also is aware that other nations are developing
remote sensing systems that will compete with U.S. systems. The
French SPOT system, in particular, has been extensively promoted
several years in advance of its operation. The Committee feels that
U.S. private sector marketing of remote sensing data must begin as
quickly as possible to ensure that U.S. systems can compete suc-
cessfully against foreign systems.
Section 301.-Purpose
Section 301 contains the purpose of title III. The primary purpose
of title III is to provide for a transition from Government operation
of Landsat to private operation and ownership of commercial
remote sensing systems. Title III represents the transition from the
government system discussed in title II to the commercial eviron-
ment provided for in title IV.
A critical element and purpose of title III is data continuity.
Much of the testimony the Committee has received on this issue
has cited continuous availability of data as an important compo-
nent of successful commercialization. For the purposes of title III,
data continuity means that a follow-on system to Landsat should
be developed in time to begin operation upon the termination of
the useful life of Landsat 5.
Another purpose of title III is to provide cost savings for the U.S.
Government. The contract authorized by title III is intended to cost
the Federal Government less money than continuation of the
present Landsat system. The Committee feels that a private remote
sensing satellite system can be developed at less expense than a
government system and can generate greater revenues, especially
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if development of the system is market driven rather than technol-
ogy driven.
Section 302.-Data Continuity
Section 302 directs the Secretary of Commerce to evaluate pro-
posals for development and operation of a land remote sensing
system to follow the Landsat system. Any such proposals must con-
tain details of the system's capabilities, a projected date upon
which operation of the system could begin, and plans for expanding
data markets and satisfying international and national security
concerns. As in title II, the proposal must be selected and evaluat-
ed by means of a competitive process.
Section 302 specifies a period of 6 years for the generation and
marketing of data pursuant to the contract authorized by title III.
The Committee wishes to provide the title III contractor sufficient
time to develop data markets to the point where multiple private
systems can compete and profit. On the other hand, the Committee
is reluctant to authorize an overly lengthy contract, because com-
petition could be inhibited by the continuation of a government
contract after markets have matured. The Committee feels that a
contract period of 6 years from the beginning of system operation
balances these concerns.
Section 303.-Notification Regarding Awarding of the Contract
Section 303 authorizes the Secretary of Commerce to enter into a
contract after evaluating the proposals discussed in section 302.
The contract shall provide for generation of remote sensing data
for 6 years. Subsection (a) contains criteria which the Secretary
shall use in evaluating proposals for such a contract. These criteria
are:
1. Availability of data upon the expected termination of the
Landsat system.
The Committee encourages the Secretary of Commerce to consid-
er the projected date upon which operations could begin to contract
with an entity that could eliminate or minimize any gap in the
availability of land remote sensing data from a U.S. system. With
the advent of foreign land remote sensing competition, the Commit-
tee is concerned about the potential consequences of a data gap of
more than several months.
2. Quantities and qualities of data to be generated.
The Committee does not wish to specify a minimum level of tech-
nology as acceptable because the Committee feels that the follow-
on capability should be market driven. The Committee does feel,
however, that ability to generate high qualities and quantities of
data should be looked upon favorably by the Secretary of Com-
merce.
3. Cost of the system to the Federal Government.
The Committee recognizes that Federal financial assistance-a
subsidy-will be required to assure development of a capability
which meets the requirements of the bill and to permit the market
to expand to commercial proportions. Even with the subsidy, how-
ever, the net cost to the Federal Government should be less than
the projected costs of continuing the existing Landsat system. This
assumption is based on the commitment of the Department of Com-
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merce not to "make an award under the RFP unless the projected
cost to the government is substantially less,' than the cost of con-
tinuing the Landsat system and the fact that the legislation re-
quires a competitive process for both the title II and title III con-
tract awards.
To further ensure this "cost savings", the Committee bill re-
quires congressional approval of the Secretary's decision to enter
into any title II or title III contract. Although minimizing the total
cost to the Federal Government is preferable and an important
concern of the Committee, the Committee feels that the total dollar
value of the financial assistance should not be viewed standing
alone but also in comparison to the funding to be provided by the
entity making the proposal.
4. Potential for expansion of data markets.
Section 302 requires that proposals contain plans for market ex-
pansion. The Committee expects the Secretary of Commerce to
study and compare proposed marketing plans to the extent practi-
cable.
5. Percentage of data sales offered to the Federal Government.
This criterion is relevant in conjunction with cost to the Federal
Government and the marketing incentive provided for in section
304.
6. The contractor's ability to advance remote sensing technology.
The Committee hopes that U.S. leadership in remote sensing
technology will be preserved by implementation of the bill. In addi-
tion to the Federal research and development activities required by
title V, the Committee feels that research and development by the
title III contractor is desirable.
7. The commercial viability of the proposal.
Because the objective of title III is to create a commercial land
remote sensing system to follow Landsat 5, the Committee wishes
to emphasize the importance of the commercial viability of the
follow-on system's technology and marketing plan.
8. Technical competence and financial condition of the contrac-
tor.
The Committee feels that these factors should be considered to
ensure that the contractor selected by the Secretary of Commerce
can fully carry out the responsibilities of the contractor.
9. Proposed procedures for satisfying U.S. national security con-
cerns and international obligations.
Obviously, any contractor under title III must cooperate with
several Federal agencies to satisfy national security and interna-
tional concerns. The Committee expects that, at a minimum, the
contractor will adhere to the national security requirements speci-
fied in Appendix A of the Request for Proposals issued by the De-
partment of Commerce on January 3, 1984. The Committee wishes
to emphasize the importance of national security and international
concerns, and the Committee expects the Secretary of Commerce to
scrutinize this section of each proposal closely.
10. Such other factors, including marketing of unenhanced data
from the Landsat system, as the Secretary deems appropriate.
' This quotation is taken from a letter from the Deputy Secretary of Commerce to the Chair-
man and the Ranking Minority Member of the Committee dated Apr. 5, 1984.
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The Committee includes marketing of Landsat data because, if
the title II and title III contracts are combined, the marketing of
Landsat data is a relevant factor in the title III evaluation.
The Committee does not intend to set priorities or assign relative
importance to these criteria.
The Committee also notes that pursuant to the terms of the con-
tract, the Secretary would pay for the "capability" of generating
data for the Federal Government. Therefore, the title III contractor
would own all of the data and hardware.
Subsection (b) provides for review by the authorizing congression-
al committees of any proposed contract pursuant to title III. Like
section 202(c), this provision states that a proposed contract may
not be finalized until the Committee has approved the contract by
majority vote or a period of 30 days of continuous session of Con-
gress passes.
The Committee feels that review of any proposed contract is ap-
propriate because proposals have been solicited and analyzed
before the enactment of this enabling legislation. The Committee
does not intend to obstruct the commercialization process by this
requirement, but merely to ensure that the implementation of the
bill is consistent with the Committee's intent.
Subsection (c) states that, in the event no proposal for a contract
is acceptable under the terms of title III, the Secretary shall solicit
proposals a second time. The second competitive process shall not
exceed 180 days in length. If the second competitive process does
not attract any acceptable proposals, the Secretary may provide for
data continuity be development of a Federal system.
The Committee has attempted to balance the need for data conti-
nuity with the desire to transfer responsibility for land remote
sensing systems to the private sector. The provision requiring a
second competitive process if the first process does not result in the
award of a contract is intended to ensure that a comprehensive, ex-
haustive effort to commercialize land remote sensing is made by
the Department of Commerce. The requirement that such a second
competitive process be carried out quickly is made in the interest
of data continuity. If the second process produces no acceptable
proposal, the Committee expects that the Secretary of Commerce
will immediately seek to provide continuity by development of a
Federal follow-on system.
Section 304-Marketing Incentive
Section 304 states that a contract pursuant to title III may pro-
vide that the percentage of sales paid by the contractor to the Fed-
eral Government may decrease as levels of data sales increase.
Title III is intended to establish the feasibility of commercial op-
eration of land remote sensing systems so that wholly private sys-
tems may profitably operate in accordance with title IV. If this
phase is to be successful, a contractor under title III will have to
market data aggressively. The Committee has sought to ensure
that market development will occur by including marketing plans
and commercial viability as evaluation criteria for proposals for a
title III contract.
The Committee endorses section 304 as further assurance that
aggressive data marketing will occur. By stipulating that a contrac-
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tor pay the Federal Government a percentage of initial sales re-
ceipts and providing for decreases in the percentage corresponding
to certian increments of sales increases, a contract could provide
considerable financial incentive for the contractor to market data
aggressively.
The Committee strongly recommends that the Secretary of Com-
merce seek to include such a provision in any contract pursuant to
title III. Further, the Committee feels that the incentive should be
tied to sales volume rather than revenues, so that the contractor
would seek to sell large volumes of data at reasonable prices,
rather than smaller quantities at higher prices. The Committee be-
lieves that such a provision would promote the broadest utilization
of data.
Also, the Committee recommends that such a marketing incen-
tive not apply to sales of data to any subsidiary that the contractor
might establish to engage in value-added activities. The Committee
cautions that allowing such a provision to apply to sales to a sub-
sidiary would provide incentive for the contractor to sell quantities
of data to a subsidiary for reasons other than legitimate untiliza-
tion of the data.
Section 305.-Terms of the Contract
Subsection (a) designates certain conditions as required, permissi-
ble, and prohibited terms of any contract entered into pursuant to
title III.
Paragraph (1) requires that the contractor sell unenhanced data
to all potential buyers on a nondiscriminatory basis. This require-
ment is discussed in conjunction with definition of "nondiscrimina-
tory basis" in section 103(2).
Paragraph (2) states that the contractor may sell processed data
only in accordance with antitrust laws. As in title II, antitrust laws
would require the contractor to establish a wholly separate subsidi-
ary if the contractor desired to sell value-added data products. Such
a subsidiary could not be given any competitive advantages in ac-
quiring data or in terms of access.
Paragraph (3) prohibits any guarantee of data purchases by the
Federal Government as part of a contract pursuant to title III. The
Committee recognizes that awarding of the contract should be
based partially on a prospective contractor's ability to meet the ex-
pected data requirements of the Federal Government. The Commit-
tee does not, however, wish to create a sole source or a monopoly.
The Committee further feels that the absence of any guarantee of
federal purchases will ensure that the contractor endeavors to op-
erate effectively and to price data products competitively. This is
especially true in light of the expected foreign competition during
the period of the title III contract.
The Committee expects Federal agencies to purchase data ac-
cording to their actual needs for data, which would not occur if cer-
tain levels of purchases were guaranteed. By precluding guaran-
teed purchases, the Committee places agencies in a commercial en-
vironment, where data are available from private entities at pri-
vately set prices. This is an important aspect of the transition to a
commercial environment provided by title III.
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Paragraph (4) provides that a contractor may use civilian govern-
ment satellites as a platform for a remote sensing system under
certain conditions. The conditions are that the contractor compen-
sate the Government for all related costs, including launch costs,
and that the utilization would not comprise the intended mission of
the Government satellites.
The Committee finds it improbable that a remote sensing system
using a civilian government satellite could meet the requirement of
title III. The Committee feels, however, that this use should not be
precluded.
If the Secretary of Commerce proposes to enter into a contract
providing for such use, the Committee expects to be fully informed
of the proposed arrangement for payment by the contractor to the
Government and to be assured by the agency responsible for the
satellite that the use in no way compromises the civilian Govern-
ment mission.
Paragraph (5) provides that the Federal Government may pro-
vide indirect and direct financial support, including loans and loan
guarantees, and other financial considerations to the title III con-
tractor to offset costs. (The term "other financial considerations" is
meant to include innovative financing mechanisms such as interest
rate buydowns, low-interest loans, etc., and not in-kind contribu-
tions.)
The Committee realizes that during the transition period the
title III contractor will probably require subsidization. As specified
in section 303(a)(3), However, the Committee is concerned about the
cost of the title III system to the Federal Government. To balance
these objectives, the Committee has provided authority for a varie-
ty of financing options which can reduce the costs to the Federal
Government and use Federal funds in a most cost-effective manner
while not compromising the commercial potential of the title III
contract.
Subsection (b) requires the Secretary of Commerce to determine
whether a contract entered into under title III effectuates the pur-
poses of title II. If a title III contract does not satisfy the purposes
of title II, the Secretary is directed to carry out the provisions of
title II.
The Committee recognizes that the Department of Commerce has
already received proposals from the private sector. The Depart-
ment's Request For Proposals (RFP) required proposals for develop-
ment of a follow-on system (title III), but merely permitted propos-
als for marketing of Landsat data (title II). The Committee believes
that this RFP will satisfy the purposes of title III, but may not sat-
isfy the purposes of title II.
Subsection (b) is intended to clarify that the awarding of a con-
tract pusuant only to title III is perfectly acceptable, provided that
title II is subsequently satisfied by a second competitive process.
Section 306.-Report
Section 306 states that the Secretary of Commerce shall report to
the Congress within 2 years of the commencement of the follow-on
system's operation according to a contract under title III. This
report will be on the feasibility of wholly private responsibility for
land remote sensing systems. The report shall include any recom-
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mendations for legislation to accomplish further the purposes of
the bill.
The Committee intends to oversee implementation of the bill. In
recognizing that further legislation might be necessary or desirable
to carry out the purposes of the bill, the Committee feels that the
Secretary's assessment of the progress of the transition provided by
title III will be valuable. The Committee wishes to evaluate the
progress of the transition as early as possible so that any further
legislation can be developed in a timely manner, consistent with
the objectives of data continuity and the creation of an appropriate
commercial environment.
Section 307.-Authorization of Appropriations
Section 307 authorizes appropriations of up to $60 million for
fiscal year 1985. The Committee anticipates that these funds will
be used to begin development of a land remote sensing system ac-
cording to a contract under title III. Because the actual need for
funding will be uncertain until a contract is proposed, the Commit-
tee has sought to provide an authorization sufficient to permit, in
the interest of data continuity, substantial progress toward devel-
opment of a remote sensing system during fiscal year 1985. The
Committee will consider the appropriateness of the $60 million
figure when reviewing a proposed contract in accordance with sec-
tion 303(b). The Committee instructs the Secretary to submit a
formal budget request for Landsat commercialization activities as
soon as a reasonable cost estimate is available.
Section 308.-Termination of Authority
Section 308 states that the authority granted by title III expires
10 years after the date of enactment of the bill. This section should
be read in conjunction with the specification that the system devel-
oped under title III generate data for 6 years. The Committee in-
tends the termination of authority after 10 years to mean that the
system must begin operation within 4 years of the enactment of
the bill to comply with title III.
Section 401.-General Authority
Title IV provides a regulatory framework for private remote
sensing satellite systems. The Committee recognizes that commer-
cial remote sensing activities must be regulated to assure fair com-
petition and compliance with international obligations and nation-
al security concerns of the United States. Currently, no agency has
statutory authority to promulgate and enforce such regulations.
The purpose of title IV is to provide sufficient Federal regulation
to satisfy the aforementioned concerns while preserving a commer-
cial environment within which private remote sensing systems can
compete and prosper.
Section 401 directs the Secretary of Commerce to license quali-
fied U.S. private entities to operate civil land remote sensing satel-
lite systems. Licenses may be granted only after the Secretary de-
termines in writing that applicants will comply with the require-
ments of the bill, any regulations issued pursuant to the bill, and
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international obligations and national security concerns of the
United States.
This section establishes the Department of Commerce as the lead
agency in regulation of private land remote sensing systems. The
Committee recognizes that other agencies have relevant interests
relating to private remote sensing ventures, and the Committee
has attempted to address these interests by providing for inter-
agency cooperation in titles IV, V and VI.
Section 402.-Conditions for Operation
Section 402 specifies conditions that a potential system operator
must meet in order to be licensed to operate a land remote sensing
system.
Subsection (a) states that no private entity may operate a land
remote sensing system subject to the jurisdiction or control of the
United States without obtaining a license pursuant to section 401.
Subsection (b) contains requirements to be specified in any li-
cense issued pursuant to title IV. A summary of the requirements
follows:
1. Licensees shall make available data generated by systems to
all potential users on a nondiscriminatory basis. The meaning and
intent of this requirement are described in the discussion of section
103(2) and section 601 of this report. The Committee feels that this
requirement is appropriate for wholly private systems as well as
for government contractors.
2. Licensees shall dispose of satellites in a manner satisfactory to
the President upon termination of their operations. The Committee
wishes to emphasize that licensees' responsibilities do not end
where remote sensing satellites cease operating.
3. Licensees shall promptly make available to the Secretary of
Commerce all data generated by systems. This requirement is
made in conjunction with the requirement that the Secretary
maintain and upgrade a Government archive of land remote sens-
ing data. This provision is discussed in section 602.
4. Licensees shall inform the Secretary of complete orbit and
data collection characteristics of systems, obtain advance approval
of deviation from the specified characteristics, and inform the Sec-
retary immediately of unintended deviation from such characteris-
tics.
5. Licensees shall obtain advance approval from the Secretary of
any agreement with a foreign nation, entity, or consortium involv-
ing either a foreign nation or entity. The Committee does not
intend to impose this requirement upon mere sales of data to for-
eign entities. The requirement is intended to apply to more exten-
sive arrangements. The Committee expects that the Secretary will
consent to such agreements unless a threat to national security, a
violation of an international agreement to which the United States
is subject, or the regulations issued pursuant to this bill is per-
ceived by the Secretary.
The Committee further expects that the Secretary will consult
with cabinet officials where appropriate in making any determina-
tion described above, and provide full opportunity, including public
hearings where appropriate, for licensees to demonstrate that their
purposes are consistent with the bill, any regulations issued pursu-
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ant to the bill, and the national security and international inter-
ests of the United States.
6. Licensees must operate systems in a manner consistent with
international law. The Committee uses the term "international
law" to mean any international agreement, treaty, or convention to
which the U.S. Government is subject.
7. Licensees must permit the inspection of facilities and financial
records.
8. Licensees must agree to surrender their licenses and terminate
operations upon a finding by the Secretary that continued oper-
ations would be detrimental to the national interest. The Commit-
tee expects that the Secretary will exercise this authority only
after allowing licensees full opportunity, including public hearings,
to demonstrate that continued system operation will be consistent
with the national interest.
9. Licensees shall not engage in any sale of processed data except
in a manner consistent with applicable antitrust laws.
Section 403.-Responsibilities of the Secretary
Section 403 makes the Secretary of Commerce responsible for na-
tional security concerns and international obligations that are rele-
vant to land remote sensing. These responsibilities are to be car-
ried out in consultation with appropriate Federal agencies. The re-
sponsibilities include:
1. Responsibility for all land remote sensing activities of U.S.
nonGovernmental entities.
The Committee is aware that the 1967 Outer Space Treaty
(Treaty on Principles Governing the Activities of States in the Ex-
ploration and Use of Outer Space, Including the Moon and Other
Celestial Bodies) states the space activities of nonGovernmental en-
tities "shall require authorization and continuing supervision by
the appropriate state party to the treaty." The Committee feels
that the Department of Commerce, as the lead agency for regula-
tion of U.S. private land remote sensing activities, should bear the
responsibility for space activities pursuant to the bill.
2. Liability for damage caused by space objects registered with or
licensed by the Federal Government.
The Convention on International Liability for Damage Caused by
Space Objects (1972) makes nations "from whose territory or facili-
ty a space object is launched" responsible for damage caused by
any such space object. The Committee feels that this international
agreement is indicative of the need for Federal regulation of non-
governmental land remote sensing systems.
3. Registration with appropriate international authorities of ob-
jects launched into space by U.S. nonGovernmental entities.
The Convention on the Registration of Objects Launched into
Outer Space (1974) requires registration of all space objects, includ-
ing date and territory of launch and the function of the space
object. The Committee intends for this responsibility, in the case of
land remote sensing satellites, to be carried out by the Secretary of
Commerce.
The Committee feels that section 403 ensures that the United
States will adhere to its international responsibilities without jeop-
ardizing the commercial viability of land remote sensing.
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Section 404. Authority of the Secretary
Section 404 provides the Secretary of Commerce proper authority
to ensure that licensees comply with the requirements specified in
section 402.
The Secretary is authorized to inspect the facilities and financial
records of any licensee under title IV. Such inspection may be nec-
essary to determine whether licensees have engaged in sale of data
on a nondiscriminatory basis or made all data available to the Sec-
retary for archiving purposes.
Section 404 further authorizes the Secretary to provide for penal-
ties for noncompliance with the requirements of licenses or regula-
tions issued pursuant to section 405. Such penalties may include
termination, modification, or suspension of licenses, and civil pen-
alties not to exceed $10,000. Each day of operation in violation of
any requirement will constitute a separate violation.
The Committee believes that the Secretary must be empowered
to impose penalties for noncompliance in order to enforce the re-
quirements of title IV.
The Committee wishes to ensure that system operators do not
willfully violate the requirements of title IV and be permitted to do
so upon payment of a small civil penalty. For this reason, the Com-
mittee has specified that each day in violation of such require-
ments constitutes a separate violation, and that the Secretary may
suspend, modify, or revoke licenses. The Committee expects that
penalties will be imposed by the Secretary only after licensees have
had full opportunity, including public hearings where appropriate,
to comment upon the Secretary's determination that the licensees
have not complied with the requirements of the bill or regulations
issued pursuant to the bill.
Section 405.-Regulatory Authority of the Secretary
Section 405 authorizes the Secretary of Commerce to issue regu-
lations to carry out the provisions of title IV. Regulations may be
issued only after public notice and comment in accordance with
section 553 of title 5, United States Code. The Committee expects
that the Secretary will promulgate only regulations that are neces-
sary to enforce the requirements of title IV and that the Secretary
will avoid significant alteration of the commercial environment
provided by the bill.
Section 406. Agency Activities
Section 406 details appropriate Federal agency activities in coop-
eration with private land remote sensing systems. The Committee
feels that agency cooperation with private system operators is de-
sirable, provided that the cooperation does not afford the private
system operators any unfair competitive advantages.
Subsection (a) states that private sector parties may apply for li-
censes under title IV to operate land remote sensing systems using
civilian U.S. Government satellites or vehicles as platforms for
such systems. The Secretary of Commerce may license such sys-
tems provided that:
1. Such systems meet the conditions of title IV;
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2. The system operator immediately reimburses the Govern-
ment for all costs related to such use; and
3. The use in no way compromises intended civilian Govern-
ment missions, as determined by the agency responsible for the
satellite or vehicle.
Subsection (b) gives the Secretary the discretionary authority to
assist a private operator in finding an appropriate opportunity to
use a civilian Government launch vehicle, provided that the pri-
vate operator meets the conditions of subsection (a). The Commit-
tee feels that the Secretary should have this authority even though
this appears to be a most unlikely application of a commercial land
remote sensing system at this time.
Subsection (c) indicates that a Federal agency may enter into an
agreement with a private operator that permits use of a civilian
government satellite or vehicle as a platform for a civil land
remote sensing system on a space available basis if:
1. Such an agreement is consistent with the agency's mission
and statutory authority;
2. Funds for such an agreement are provided in advance in
appropriations acts; and
3. The private operator is licensed pursuant to the terms and
conditions established in title IV.
The Committee strongly supports the commercialization of land
remote sensing and feels that the Federal Government should pro-
vide operators with the maximum degree of flexibility to obtain a
launch vehicle or platform. The Committee, therefore, does support
the involvement of Federal agencies to the extent permitted by
law. However, as noted above, the Committee feels that at this
time most commercial land remote sensing applications will tend
to be free-flying satellites owned by the private operator.
Subsection (d) indicates that NASA is exempt from the provi-
sions of this section and subsection (e) indicates that this section is
not meant to affect the authority of the FCC to assign radio fre-
quencies. The Committee has established new procedures which
will affect the time-frame for the assignment of radio frequencies
by the FCC, but these are discussed in section 606.
Section 407.-Termination
Section 407 contains a sunset provision for the authority granted
the Secretary pursuant to title IV if in 20 years there is no private
sector party or consortium that has been licensed or if in 20 years
there is no private sector party or consortium that is operating a
land remote sensing system pursuant to title IV.
The Committee realizes that 10 years ago not much thought was
given to the commercial value of land remote sensing. As a matter
of fact, in 1972 the concept was purely experimental. The Commit-
tee also realizes that the rapid technological advances that are
being made in the area of remote sensing and space technology
might render the provisions of this title obsolete in 20 years. As a
safeguard against the maintenance of an unnecessary regulatory
process, the Committee has included a sunset provision in this title
that takes into consideration the state of the market in 20 years
and the need for the regulations and licensing provisions included
in this title.
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TITLE V: CONTINUED REMOTE SENSING RESEARCH AND DEVELOPMENT
Title V directs those Federal agencies involved in land remote
sensing to continue and enhance research and development activi-
ties in remote sensing technologies and applications. Title V also
reiterates the Committee's intent that the United States maintain
its worldwide leadership in remote sensing technologies and appli-
cations.
This title also provides for the use or sale of experimental data
generated by Federal research and development activities.
The Committee notes that the research and development activi-
ties in remote sensing perforn.ed by agencies of the U.S. Govern-
ment, NASA, have established the United States as the worldwide
leader in remote sensing technologies and applications. The Com-
mittee also notes that private operators of land remote sensing sys-
tems may be unable, especially in the near future, to undertake an
extensive research and development effort.
Other nations are developing land remote sensing systems which
will compete with private U.S. systems. The rapid advance in
remote sensing capabilities by other nations is viewed by the Com-
mittee as a signal that the United States must continue and en-
hance remote sensing research and development programs to main-
tain worldwide leadership in this area.
The Committee expects that space commercialization will expand
and mature to the point where private sector parties will find it
profitable to engage in extensive research and development pro-
grams. In the near term, however, private efforts are more likely
to be aimed at cost efficiencies and market expansion than at de-
velopment of new technologies and applications.
Because of the impending foreign competition and the probable
inability of the private sector to perform extensive research and de-
velopment in the near future, the Committee emphasizes the im-
portance of Federal research in remote sensing. To maximize the
applications of this research, the Committee has structured title V
to provide for cooperation between agencies, State and local gov-
ernments, the private sector, universities, foreign nations, and
international organizations.
Section 501.-Federal Research and Development
Section 501 specifies appropriate remote sensing research and de-
velopment roles for various Federal agencies.
Subsection (a) contains the research and development role of
NASA. Paragraph (1) directs the Administrator of NASA to contin-
ue and enhance remote sensing research and development activi-
ties.
The Administrator also is authorized and encouraged to conduct
experimental remote sensing programs and to develop remote sens-
ing technologies. Paragraph (2) encourages the Administrator to
conduct programs in cooperation with other public and private re-
search entities, and to enter into arrangements which will foster
cooperation and enhance technologies. These arrangements may in-
clude joint ventures.
The Committee feels that NASA should be the lead agency in de-
velopment of remote sensing technologies. The Committee does not
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wish to discourage NASA's study of applications of remote sensing
data, but merely to emphasize the importance of NASA's role in
development of technologies.
Subsection (b) details the appropriate remote sensing research
and development roles of the Departments of Commerce, Interior,
and Agriculture. The Secretaries of those agencies are directed by
paragraph (1) to continue research in applications of remote sens-
ing data, monitoring of the Earth and its environment, and devel-
opment of technologies for such monitoring.
Paragraph (2) authorizes these agencies to conduct these activi-
ties in cooperation with other public and private research entities,
and to enter into arrangements which will foster cooperation and
enhance applications of data, monitoring activities and technology.
The Committee believes that the Departments of Commerce, In-
terior, and Agriculture are the appropriate lead agencies for re-
search in applications of remote sensing data. The Committee ex-
pects that these and other agencies will cooperate to maximize de-
velopment of data applications and to minimize undesirable dupli-
cation of research activities.
During its Landsat hearing, the Committee learned of the U.S.
Geological Survey EROS Data Center's excellent national and
international reputation as a leader in conducting research in de-
veloping applications of satellite remote sensing. The Committee
expects the EROS Data Center (EDC) to continue and to enhance
the activities for monitoring the Earth and its environment. Devel-
opment of satellite remote sensing data applications by the Depart-
ments of Interior and Agriculture are key to achieving future bene-
fits from our current investment in the U.S. satellite remote sens-
ing program. The satellite remote sensing research being conducted
at EDC focuses on developing techniques that merge and intergrate
the satellite image data with other types of computerized, carto-
graphic, geographic, and resource data. Advanced computerized in-
formation processing techniques are then applied to the multiple
sets of data to produce information for land resource planning and
management.
The EDC is to continue working with Department of the Interior,
Bureaus, Offices, and with other Federal agencies, with State and
local governments, and with foreign governments and international
organizations to develop new applications of satellite remote sens-
ing data and to train potential users world-wide in the use and ap-
plication of these data. Likewise, the Departments of Commerce
and Agriculture and other Federal agencies are encouraged to con-
tinue to examine and develop new opportunities for applications of
satellite remote sensing data.
Subsection (c) encourages other Federal agencies to conduct re-
search and development programs in remote sensing where consist-
ent with the authorized missions of the agencies.
Section 502. Use of Experimental Data
Section 502 permits the use of data gathered in Federal experi-
mental land remote sensing programs in related, government-
funded research and development programs. This data may not,
however, by used for commercial purposes or in competition with
private activities, except as provided by section 503.
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Section 503.-Sale of Experimental Data
Section 503 states that data gathered in Federal experimental
land remote sensing programs may be sold en bloc by a competitive
process to any U.S. entity that will market the data on a nondis-
criminatory basis.
Sections 502 and 503 represents the Committee's attempt to pro-
vide for appropriate utilization of experimental data without un-
dermining the commercial viability of private land remote sensing
systems. The Committee believes, on one hand, that experimental
data will have significant value and that their use should not be
restricted to the sponsoring Federal agency. The Committee recog-
nizes, on the other hand, that commercial use of experimental data
could adversely affect the emerging land remote sensing industry.
The Committee strongly endorses the broadest possible use of ex-
perimental data for research purposes. The Committee expects that
Federal agencies will cooperate with one another, State and local
governments, and universities in maximizing use of experimental
data for research programs, especially for research in applications
of data.
The Committee believes that Federal experimental data having
significant commercial value should become publicly available. The
Committee has placed two restrictions on the availability of this
data to prevent their availability from excessively infringing on
commercial operations of private systems.
First, data may be sold by agencies "en bloc". The Committee
uses this term to mean that agencies should not sell specific, indi-
vidual data products. The sale of bits and pieces of data by agencies
is viewed by the Committee as an inappropriate role for agencies
and a practice that could greatly inhibit private data marketing op-
portunities, especially if data products were made available at
nominal prices.
The second restriction is that data must be sold "by means of a
competitive process". The Committee intends this requirement to
assure that Federal experimental data do not become publicly
available at nominal prices. The Committee feels that this restric-
tion, in combination with the "en bloc" requirement, ensures that
data will be sold only in fair competition with privately generated
data.
The Committee believes that sections 502 and 503 balance the ob-
jective of broad use of Federal experimental data and the concern
that use of such data not undermine the marketability of privately
generated data.
Section 601. -Nondiscriminatory Availability of Data
Section 601 gives a statutory basis to the existing U.S. policy that
land remote sensing data generated by any system operator be
made available to all users on a nondiscriminatory basis. Subsec-
tion (b) clarifies that "system operator" applies to contractors
under titles II and III and licensees under title IV.
The Committee expects that the Secretary of Commerce will ex-
ercise the authority granted by the bill, particularly by title IV, to
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ensure that all system operators comply with the nondiscrimina-
tory availablity of data requirement as defined in section 103(2).
Subsection (c) requires system operators to make publicly avail-
able prices, policies, procedures, and other conditions upon which
the operator will sell data. To fulfill this requirement, the Commit-
tee feels that any offer to sell or to deliver data and all data sales
policies must be published in advance by the operator. System op-
erators are not required to disclose names of buyers and their pur-
chasers, except to the Secretary of Commerce pursuant to section
404(1).
The Committee is aware that Landsat data have been sold to
non-U.S. Government users and data have been made available to
all purchasers on a nondiscriminatory basis. Indeed, the data policy
of the Landsat program can be considered to be a cornerstone of
the U.S. "open skies" policy and of the use of space for peaceful
purposes. By following this policy, the United States has been able
to blunt criticism of other activities, such as operation of classified
surveillance satellites. The policy has also demonstrated to the
entire world U.S. adherence to the principle of the free flow of in-
formation.
The Committee so strongly supports the doctrine of nondiscrim-
inatory access to data that it has given this concept a statutory
basis. The Committee feels that this principle is fundamental to
any remote sensing activity and that it is a key component of U.S.
foreign policy interests.
During the Committee's Landsat hearing, the issue was raised
that adherence to the principle of nondiscriminatory access to data
was not in the best interest of a commercial entity since it would
preclude a private operator from contracting to acquire specific
scenes for the proprietary use of a sole purchaser. The Committee
is sensitive to this issue and realizes that "land remote sensing for
hire" could have a potential marketplace and that site-specific
scenes could have significant value. The Committee feels, however,
that the benefits from such a commercial enterprise pale in com-
parison with the benefits to the United States of maintaining alle-
giance to the principle of nondiscriminatory access to data. The
Committee realizes that in its efforts to promote commercial land
remote sensing activities it has established certain barriers, in par-
ticular concerning U.S. foreign policy and national security con-
cerns. The Committee feels, however, that these are reasonable
costs to be incurred by an operator and, although they might
reduce the profitability of land remote sensing, they should not
impede commercialization of land remote sensing activities.
At the same time, the Committee feels that within the require-
ment for nondiscriminatory access to data certain marketing tech-
niques would still be appropriate. For example, a pricing policy
that allowed a system operator to vary the price of data in inverse
relation to the time of data delivery would be acceptable if the data
were available to all potential customers. Also, volume discounts
would be acceptable provided that such discounts would reflect the
demonstrable reduction in costs associated with such an order,
would not result in subsidization of larger customers by smaller
customers, and would be available to all potential customers. What
the Committee does not find acceptable is the sale of a single copy
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of an original scene to the highest bidder. Such an action would
transfer the proprietary control of the data from the operator to
the purchaser and would be in direct conflict with the principle of
nondiscriminatory access to data, under equal terms and condi-
tions, by all potential purchasers.
In summary, the Committee endorses certain arrangements, such
as volume discounts, secrecy regarding customers, and varying
terms of delivery, as permissible provided that such arrangements
are equally available to all purchasers. The fundamental require-
ment that the Committee wishes to imposed upon system operators
is that all data generated by systems be available to all potential
purchasers. The Committee feels that the definition of "nondis-
criminatory basis" contained in section 103(2) properly balances
"open skies" with commercial viability of land remote sensing.
Section 602. Archiving of Data
Section 602 provides for the maintenance and upgrading of a
Government archive of land remote sensing data.
Subsection (a) states that it is in the public interest for the U.S.
Government to maintain a land remote sensing data archive for
historical, scientific and technical purposes. Further, paragraphs (2)
and (3) state that the Government should control the content of the
archive and assure the quality and continuity of the archive.
The Committee believes that the maintenance of an archive of
land remote sensing data is a public service that the Government
should continue to provide even when land remote sensing is a
wholly private commercial activity. The Committee wishes to stress
two points. First, the public interest is best served by the mainte-
nance and upgrading of an archive. Second, operators of private
land remote sensing systems can not be expected to maintain ex-
tensive archives of their own. In considering these issues, the Com-
mittee has found that representatives of the Federal Government,
the private sector, and users of land remote sensing data share
these views and endorse the continuation of Government data ar-
chiving.
Subsection (b) designates the Secretary of Commerce as the Fed-
eral official responsible for the Government archive. The Secretary
is directed to maintain and upgrade a basic, global set of land
remote sensing data, and to assure proper storage and preservation
of the basic data set. Subsection (b) also states that the Govern-
ment archive will remain distinct from any system operator's in-
ventory of data.
The provision that the Government archive will be separate from
any private sales inventory is intended to clarify that the archive
will not be utilized by private system operators as a sales inventory
from which private operators could continually request copies of
data for sales or other purposes. The Committee expects that pri-
vate operators will maintain their own inventories of data for such
purposes.
Subsection (c) provides instructions for the Secretary of Com-
merce to follow in determining the content of the archive. The
baseline for the archive will be data currently archived at the
EROS Data Center in Sioux Falls, S. Dak.
In upgrading the archive, the Secretary is directed to consider:
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1. Technical and scientific developments and needs;
2. The advise of users and producers of land remote sensing
data; and
3. The public need for geographically duplicative data with
varying seasonal, spatial resolution or spectral differences.
The Secretary may include, as deemed appropriate, Landsat
data, data generated pursuant to titles III and IV of the bill, and
data from foreign systems or foreign ground stations. The Commit-
tee intends to provide the Secretary maximum discretion in deter-
mining the content of the archive, and the Committee expects the
Secretary to fully follow the guidelines of this section and endeavor
to maintain an archive that serves the public interest to the fullest
possible extent.
Subsection (d) states that operators will promptly make all data
available to the Secretary in a form suitable for processing for stor-
age and access. The Secretary may pay operators reasonable costs
for reproduction and transmittal of data.
The Committee expects that, where the Secretary causes opera-
tors to modify their system operation in order to collect data with
specified geographic or spectral characteristics for the Government
archive, the Secretary will pay all costs associated with the collec-
tion of such data in addition to reproduction and transmittal costs.
Subsection (e) specifies the rights of operators to sell data in rela-
tion to policies for distribution of data from the Government ar-
chive. Operators shall have the exclusive right to sell all data pro-
vided to the Government archive for a period to be determined by
the Secretary, but not to exceed ten years from the date data are
sensed. Operators may relinquish the exclusive right by consenting
to distribution from the archive prior to the normal expiration date
of the exclusive right.
In the case of data from the Landsat system generated prior to
the implementation of a contract pursuant to title II, the contrac-
tor shall have the exclusive right to sell the data during the period
of the contract.
The intent of subsection (e) is to ensure that the existence and
maintenance of the Government archive in no way infringes upon
the commercial operations of any contract or system operator pur-
suant to the bill. Data from the Government archive will be distrib-
uted only upon the consent of the relevant contractor or operator or
upon the expiration of a period of time during which the commer-
cial value of the data will have diminished enough to warrant dis-
tribution.
In setting the period of time during which a contractor or opera-
tor shall have the exclusive right provided for in subsection (e), the
Committee expects the Secretary to balance the commercial inter-
ests of such contractor or operator with the public, historical, and
scientific interests relating to availability of the data. The determi-
nation of an appropriate time period will, in the view of the Com-
mittee, require consultation with users and producers of land
remote sensing data. The Committee expects the Secretary to es-
tablish one time period which shall apply to all contractors and op-
erators.
Subsection (0 states that after the expiration or relinquishment
of the exclusive right provided by subsection (e), data provided to
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the Government archive shall be in the public domain and avail-
able at prices reflecting reasonable reproduction and transmittal
costs.
The Committee feels that subsection (f), in conjunction with sub-
section (e), maximizes the public availability of land remote sensing
data without adversely affecting the commercial viability of private
land remote sensing systems.
Subsection (g) relates to the facilities to be used in carrying out
the requirements of section 602. The Secretary is directed to use, to
the extent practicable, existing Government facilities.
The "existing government facilities" referred to in section 602(g)
are those located at EDC in Sioux Falls, S. Dak. Based on the testi-
mony obtained by the Committee, the personnel at the EDC are ex-
perienced in the processing, archiving, and distribution of satellite
land remote sensing data. In particular, the EROS facilities and
equipment are uniquely suited to the job of cataloging and archiv-
ing satellite remote sensing data to assure its preservation in an
orderly manner. The Committee expects and encourages the Secre-
tary of Commerce to fully utilize this unique facility and capability
for maintaining and preserving the archive of data from land
remote sensing satellites.
Consistent with section 602(f), it also is expected that the staff,
facilities, and equipment of the EDC will be used to process and
distribute satellite remote sensing data following the expiration or
relinquishment of a private system operator's archiving right to
sell the data, as provided for in subsection (e).
Section 603.-Non-reproduction
Section 603 permits system operators to sell unenhanced data on
the condition that the data not be reproduced and disseminated by
the purchaser. The Committee recognizes that the commercial via-
bility of land remote sensing will be greatly inhibited if data pur-
chases are free to reproduce and disseminate unenhanced data and
if a "black market" exists. However, the Committee also recognizes
that potential purchasers may be discouraged by a requirement
that data absolutely not be reproduced or disseminated, even for
internal use.
Section 603 is intended to permit system operators flexibility con-
cerning limitations on reproduction and dissemination of data pro-
vided that the system operators' policies regarding reproduction
apply to all purchasers in a nondiscriminatory manner and be pub-
lished in advance.
Section 604.-Reimbursement for Assistance
Section 604 states that Federal agencies may provide assistance
to operators of remote sensing systems as provided in other sec-
tions of the bill. In order to ensure fair competition, substantial as-
sistance shall be reimbursed by the operator, except as otherwise
provided by law.
The Committee is aware that agencies, particularly NASA, are
authorized to exercise discretion in requiring reimbursement for
assistance of private space activities. By including the phrase
"except as otherwise provided by law," the Committee intends to
preserve that discretion. The Committee does expect, however, that
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NASA and other agencies will be cognizant of the desirability of
fair competition among private remote sensing systems and that
agencies will not provide assistance in a manner that favors any
entity over another.
Section 605. Acquisition of Equipment
Section 605 permits the Secretary of Commerce to allow private
parties to buy, lease, or otherwise acquire the use of equipment
from the Landsat system, provided that such equipment is no
longer needed in connection with the Landsat system. This section
does not conflict with section 201(c) and the requirement that the
United States maintain ownership of the operational Landsat
system.
The Committee realizes that contracts pursuant to titles II and III
may contain provisions for use of Landsat equipment by the
contractor(s). The Committee intends for section 605 to be in addi-
tion to, rather than in lieu of, any use of Landsat equipment by
any such contractor. The Committee feels that utilization of such
equipment by a contractor, particularly under title III, would mini-
mize the cost to the Government of such a contract, and the Com-
mittee encourages the Secretary to provide for such utilization. The
section is intended to provide the Secretary flexibility and to
ensure that equipment from the Landsat system is utilized to the
maximum extent possible, and in a manner that promotes commer-
cialization of land remote sensing.
Section 606.-Radio Frequency Allocation
Section 606 establishes procedures and guidelines for the alloca-
tion by the FCC of radio frequencies for use by commerical land
remote sensing satellite systems.
Subsection (a) requires the FCC to determine within 120 days
after the date of enactment of the bill the frequencies to be used by
commerical land remote sensing satellite systems and directs the
FCC to seek comments from the Department of Commerce in
making this determination.
The Committee is aware of the efforts of the FCC and the Na-
tional Telecommunications and Information Administration (NTIA)
to meet this requirement and to allocate sufficient spectrum for
land remote sensing satellites. The Committee applauds the efforts
of the FCC and NTIA and feels that such coordinated activities
shall expedite processing of commercial land remote sensing applica-
tions.
Subsection (b) encourages the FCC to award licenses for frequen-
cies within 120 days of the receipt of an application. The FCC is di-
rected, in the event that frequencies are not allocated within 120
days, to inform the applicant of pending issues and of actions re-
quired to resolve them.
The Committee recognizes that applicants for radio frequencies
will make considerable investments toward development of remote
sensing systems while applications for frequencies are pending, as
provided by subsection (c) of this section. The Committee, therefore,
strongly urges the FCC to allocate frequencies to applicants as rap-
idly as practicable where such applications are clearly consistent
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with subsection (d) of this section and other requirements of the
bill. The Committee also expects that the FCC will expeditiously
inform applicants of any complications, whether they involve scar-
city of spectrum or other concerns, that might delay approval of an
application.
Subsection (c) ensures that development and construction of land
remote sensing system may proceed while the FCC is in the process
of determining frequency allocations for such systems. This shall
not prejudice the FCC decision concerning the allocation of fre-
quencies. The Committee is aware of the FCC decision that apart
from the radio transmitters and frequencies used for associated
communications support, it does not appear that the development
or construction of the land remote sensing launch vehicles and
launch site(s) requires a construction permit issued by the Commis-
sion pursuant to section 319 of the Communications Act of 1934 be-
cause they are not "communications" within the meaning of sec-
tion 1 of that Act. The Committee also is aware of the FCC decision
that sensors are not communications facilities, as defined by that
Act, and, therefore, a construction permit is not necessary for their
procurement. The Committee supports these decisions by the FCC
and feels they will accelerate the development of commercial land
remote sensing applications.
Subsection (d) states that frequency allocations by the FCC shall
be consistent with international obligations and with the national
interest. A common theme in the bill is the need to strictly adhere
to international obligations and to protect vital national interests.
This provision reiterates that policy and instructs the FCC to con-
sult with appropriate Federal agencies in determining whether
granting of frequencies to particular applicants is consistent with
this subsection and other relevant considerations.
Section 607.-Consultation
Section 607 directs the Secretary of Commerce to consult with
appropriate Federal agencies regarding matters relating to the con-
cerns and missions of such agencies.
Subsection (a) directs the Secretary of Commerce to consult with
the Secretary of Defense on all matters arising under the bill that
relate to national security. The Secretary of Defense is directed to
notify the Secretary of Commerce of any national security concerns
related to any activities pursuant to the bill.
Subsection (b) directs the Secretary of Commerce to consult with
the Secretary of State on all international matters arising under
the bill. Similarly, the Secretary of State is directed to notify the
Secretary of Commerce of international commitments and obliga-
tions relevant to the bill.
Subsection (c) authorizes and encourages agencies to provide
remote sensing technology and training to developing nations. The
Committee is aware that agencies such as the Agency for Interna-
tional Development and the U.S. Geological Survey have provided
technical assistance in remote sensing to developing nations. The
Committee supports these activities and expects these and other
Federal agencies to continue and to enhance these programs.
Subsection (d) authorizes the Secretary of Commerce to require
agencies that impose conditions on private system operators based
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on national security or international concerns to reimburse system
operators for costs related to such conditions. Reimbursement
would not include anticipated profits.
The Committee realizes that private remote sensing system oper-
ators may be required to alter their operations due to unanticipat-
ed national security or international concerns. Such national secu-
rity requirements may include limitations on resolution, geograph-
ic restrictions, or additional hardening of data requirements. The
Committee feels that, in order to protect the commercially viability
of private systems, the agencies that impose conditions that require
system alterations should be required to reimburse system opera-
tors for the direct costs related to these unanticipated alterations,
including development costs but excluding anticipated profits. Such
policy should insure judicious application of this discretionary au-
thority by these agencies and should work to encourage private en-
tities to invest in land remote sensing ventures.
The Committee strongly urges the Secretary of Commerce to con-
sult with the Secretary of State, the Secretary of Defense, and
other appropriate Federal agencies to determine the circumstances
under which such a reimbursement would be appropriate and to
determine the best method for implementation of such a policy in a
uniform manner.
Section 608. Amendment to the NASA Authorization Act, 1983
Section 608 amends the NASA Authorizationn Act of 1983
(Public Law 97-324) to authorize the Secretary of Commerce to
plan and provide for the management and operation of civil remote
sensing systems, and to plan for the transfer of the operation of
such systems to the private sector when in the national interest.
The Committee notes that the Secretary's authority to operate
Landsat expires at the end of fiscal year 1984 pursuant to Public
Law 97-324. Section 608 is intended to extend that authority. This
section also gives the Secretary the required authority to transfer
operation of civil remote sensing systems to the private sector. Pur-
suant to Public Law 98-166 and Public Law 98-52, meteorological
satellite systems may not be transferred to the private sector with-
out prior approval of the Congress.
CHANGES IN EXISTING LAW
In compliance with paragraph 12 of rule XXVI of the Standing
Rules of the Senate, changes in existing law made by the bill, as
reported, are shown as follows (existing law proposed to be omitted
is enclosed in black brackets, new material is printed in italic, ex-
isting law in which no change is proposed is shown in roman):
THE NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
AUTHORIZATION ACT, 1983
Section 201 of that Act
SEC. 201. [(a) The Secretary of Commerce is hereby authorized to
plan and provide for the management and operation of civil land
remote sensing satellite system, including the LANDSAT D and D'
satellites and associated ground system equipment transferred
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i
from the National Aeronautics and Space Administration; to pro-
vide for user fees; and to plan for the transfer of the ownership and
operation of civil operational land remote sensing satellite systems
by the private sector when in the national interest. The provisions
of this subsection expire September 30, 1984.]
(a) The Secretary of Commerce is authorized to plan and provide
for the management and operation of civil remote sensing satellite
systems, which may include the Landsat 4 and 5 satellites and asso-
ciated ground system equipment transferred from the National Aer-
onautics and Space Administration; to provide for user fees; and to
plan for the transfer of the operation of civil remote sensing satellite
systems to the private sector when in the national interest.
(b)-(d) * *
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