A Military and Intelligence Clash Over Spy Satellites

Washington — The nation’s spies and its military commanders are at odds over the future of America’s spy satellites, a divide that could determine whether the United States government will increasingly rely on its own eyes in the sky or on less costly commercial technology.

The fight is shaping up into the intelligence world’s version of the United States Postal Service versus FedEx — a traditional government institution that must provide comprehensive services versus a more nimble private sector that is cherry-picking the most lucrative business opportunities.

In recent years, advances in commercially available technology have allowed private companies to develop satellites carrying high-resolution sensors and perform many of the surveillance tasks that were once the sole preserve of classified satellites owned and operated by the intelligence community. Two private companies already provide some of America’s spy satellite imagery, at far lower costs than government-owned satellites, according to current and former government and industry officials and outside analysts.

But at the urging of senior intelligence officials, the Obama administration has proposed cutting the contracts for commercial satellite imagery in half next year — to about $250 million from $540 million — to help meet deficit reduction requirements, while bringing back more of the work inside the government, according to administration and Congressional officials and industry experts.

Both Republican and Democratic leaders on the Congressional intelligence committees are resisting the budget cuts and siding with the private companies and the military, which argues that it could not get as much imagery as it needs for combat operations without turning to the less expensive commercial technology.

“The debate is really between the military, which needs a lot of imagery but doesn’t need the highly classified imagery, and the intelligence community, which wants to keep the capability to produce its own imagery,” said Bill Wilt, a senior official with GeoEye, one of the private satellite companies.

In the midst of what observers in and out of government describe as an increasingly bitter turf war, the director of the National Reconnaissance Office, the secret agency that manages the nation’s spy satellites, resigned Wednesday. Bruce Carlson, the director, issued a statement saying that he is leaving the reconnaissance office, which is part of the Department of Defense and the intelligence community, a spokeswoman for the office said.

Administration officials said his resignation was not related to the satellite fight. But Mr. Carlson was said to be an advocate for cutting the budget for the commercial satellite companies, and his departure occurred as the satellite industry and its supporters on the Congressional intelligence committees were gearing up to oppose the budget cuts.

Spy satellites are among the most expensive tools used by the intelligence community, dwarfing most other elements of the classified intelligence budget.

When the commercial satellite industry developed in the 1990s, it could not compete with the highly sophisticated sensing equipment flown by the government’s spy satellites. But gradually, the gap between commercial satellites and the intelligence community’s has narrowed.

American commercial satellite companies now produce images of higher resolution than they are permitted to sell publicly, and their only customers are United States government agencies or foreign governments, with American approval. Commercial satellites can show, for example, an image of a specific vehicle type or spare tire on a truck, while the more sensitive government-owned satellites can detect gun mounts or vehicle identification numbers.

The intelligence community uses even higher resolution imagery for tasks like monitoring the North Korean and Iranian nuclear programs, but the commercial satellites are adequate for almost all of the needs of the military. Military commanders, who need access to large volumes of satellite imagery for mapping and other daily uses in combat zones, have become big advocates of the expanded use of commercial satellite imagery.

“The technology of the current satellite architecture is pretty much at its limit, and the commercial satellites are producing just about the same thing at a much lower cost,” said retired Gen. James E. Cartwright of the Marines, former vice chairman of the Joint Chiefs of Staff. “The government’s satellites are better, but the question is, What do you need? Most studies show that about 90 percent of what the military needs can be solved with commercial.”

The military also favors commercial satellites because imagery from the intelligence community cannot be easily shared with allies. “The beauty of commercial imagery is that it is unclassified,” said Walter Scott, chief technical officer of DigitalGlobe, a satellite company based in Longmont, Colo.

GeoEye and DigitalGlobe, the two satellite companies with the largest contracts to provide imagery to the government, now have a combined total of five satellites orbiting Earth, and plans to launch more with financial support from Washington. The number of government-owned spy satellites now in orbit is classified, although the N.R.O. has announced that it is launching four satellites this year.

Industry officials say that General Cartwright, who retired as vice chairman last year after losing out on a bid to become chairman of the joint chiefs, was one of the biggest advocates inside the government of the increased use of commercial satellites. His departure gave more room to maneuver for his chief opponent on the issue, James R. Clapper Jr., the director of national intelligence.

The intelligence community has proposed to increase spending on research and development for new government-owned satellites to meet the growing demands for imagery. But the N.R.O.’s efforts over the past decade to develop a new generation of satellites have been plagued with problems.

In the late 1990s and early 2000s, it focused on a program called the Future Imagery Architecture, which was criticized by the Congressional intelligence oversight committees for bloated budgets, and which eventually collapsed.

That was followed by efforts to build midsize spy satellites that would compete more directly with commercial satellites than the reconnaissance office’s current fleet of large satellites do. But that program withered away after a panel created in 2009 by Dennis C. Blair, then the national intelligence director, recommended a greater focus on the use of commercial satellites.

Now, industry officials claim the decision to reverse course and slash the commercial satellite budget could leave military commanders in the lurch. Intelligence officials said the cuts would not have any impact on their ability to meet the demands for imagery from the military and the rest of the government.

Source: http://www.nytimes.com/2012/04/20/us/politics/spy-satellite-clash-for-military-and-intelligence-officials.html