Satellite industry, military spar over strict export laws

Lockheed Martin exhibit at the National Space Symposium

April 6, 2000
Web posted at: 5:04 PM EDT (2104 GMT)

In this story: U.S. sales slowing Air Force colonel defends tight controls Panelist: International competitors moving faster French official: 'We're not taking sides' RELATED STORIES, SITES

By Richard Stenger
CNN Interactive Staff Writer

COLORADO SPRINGS, Colorado (CNN) -- Top aerospace and military representatives sparred this week over restrictions that impede U.S. technology exports.

Satellite and rocket manufacturers argue that the strict technology transfer laws imposed last year threaten their survival and help international competitors. Military leaders contend strict export controls prevent potential enemy nations from stealing U.S. secrets.

Potentially raising the stakes in the ongoing debate, on the U.S. State Department this week accused Lockheed Martin of passing technology secrets to China. A Lockheed spokesman denied it had violated U.S. export laws by giving a scientific assessment in 1994 designed to improve a flawed Chinese-made satellite motor.

Satellite companies have relied heavily for years on export sales for their livelihood, said Don Vanlandingham, the CEO of Ball Aerospace and Technology Inc. But industry sales to other countries are shrinking because the new national controls have considerably slowed the export licensing process.

"An export delayed is an export denied," Vanlandingham said Tuesday during a panel discussion at the National Space Symposium. "The licensing process is a scandal."

Congress adopted the strict measures last year following an extensive federal investigation into charges that China illegally obtained nuclear weapons secrets from a U.S. facility in New Mexico.

The tightened restrictions have slowed export licensing to a crawl, industry representatives said. The added red tape has frustrated international customers and caused U.S firms to lose some big deals.

"Some of the losses are legendary," said Vanlandingham, citing a deal that fell through between the Hughes company and a large Taiwanese customer.

A U.S. Air Force officer with the Defense Threat Reduction Agency (DTRA) defended tight controls in the name of national security.

"We must protect the military's capabilities," said Col. Dave Garner.

Speaking two days before the State Department announced the allegations against Lockheed Martin, Garner hinted that federal authorities were investigating more companies of export control violations in the wake of the 1999 China scandal.

He acknowledged that the military needs to make some changes to accommodate U.S. businesses competing in the global marketplace. "We need to fix the DOD's (Department of Defense's) role in the process," he said.

Garner, the director of the DTRA's space monitoring division, said the military had taken steps to speed up the licensing process.

The Department of Defense has spent millions to streamline and in some cases automate the procedures, he said.

For panelist Herb Saterlee, those changes are not enough. "We're competing in a market where the license process, by Internet time, is a century long," he said.

"Our foreign competitors are moving much faster and it scares me, quite frankly," said Saterlee, president of Earthwatch, a remote sensing information products company.

The slow process does not play well with investors. "Without a license, we can't raise money. The first thing Wall Street asks is, 'do you have a license?'" he said.

Yet industry reps appreciate the difficulties facing government agencies that handle export licensing. Federal employees are processing 10 times as much data as a few year ago, Saterlee said.

The military shares some of the licensing responsibilities with a civilian agency. It used to be the Commerce Department. The 1999 law shifted the role to the State Department, which is ill-equipped for the added responsibility, according to one panelist.

The department has 45 employees processing 45,000 license applications, Vanlandingham said.

A French panelist downplayed the idea that international competitors in the space industry relish the U.S. export quagmire.

"We're not taking sides. It hurts us as well," said Serge Plattard, director of international relations for CNES, the French space agency.

He noted that the European-built Ariane rockets take many U.S. satellites aloft. The strict export controls "disrupt our relationship with the U.S.," he said.

Plattard recalled a meeting between Boeing executives and some potential partners in Europe. The two sides did not reach an immediate agreement and because of the strict controls, "the Boeing people had to fly back a day later," he said.

Plattard said that the situation is "pushing Europe to consider technology sources outside the United States."

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