Proceedings of the Workshop - United Nations Office for Outer ...

EXPANDING GLOBAL LAUNCH SERVICES 39Finally, the above environment prevents (or) at leaststrongly discourages mergers/take-overs or strategicalliances among launch companies of differentnationality, whether ‘old’ or ‘new’, to the extent theyinvolve a possible exchange of technology.The above, and in particular the ‘China affair’brings us to a second element of great importance to thecustomers of the launch industry, namely theavailability of an alternative launch provider in the caseof a launch failure and, more in general, a free choiceof launch service providers of different capabilities andnationalities; in other words: international competition.Availability of competitive internationalcommercial launch servicesA satellite owner faced with the sudden unavailabilityof the launcher it contracted for will not easily findalternative space transportation at short notice.There are a number of predictable practical problems:• Depending on the type of launch (GEO orLEO/MEO) and launch vehicle required(heavy, medium or light) the launch manifestsof the launch companies may be full and thewaiting lines may therefore be long.• Satellite-launcher interface is not standardized.In fact, each launch is rather unique in thesense that launcher and satellite are more orless ‘made for each other’. Hence, satelliteshave to be adapted to fit the new launcher(and/or vice versa): this takes time andengineering effort;• a new contract will have to be concluded withthe new launch company ( including a newarrangement with the insurers).But, there are also problems of a regulatory andpolitical nature which affect a free and easy choice ofalternative launch service providers. For e.g., themedium-to-heavy lift launch vehicles range, thecustomer could in principle choose between three U.S.launchers (Atlas, Titan and Delta) produced byLockheed Martin and Boeing, the European Ariane, theRussian Proton, the Chinese Long March, theUkrainian Zenit and the Japanese H-2. Apart frompractical factors which further limit the choice (not allof the above launchers have the same capacity, theTitan is in principle reserved for military launches, theH-2 production is limited, etc.), neither China, Russia,nor die Ukraine is completely free to offer its servicesto foreign clients.The U.S. government concluded launch tradeagreements with these countries, which not onlyprovide rules of ‘fair trade’ behavior, but also limit thenumber of launches of Western-made satellites thatmay be performed during the period of validity of theagreement and outlines the prices and price conditionsthat may be quoted by these countries’ launchcompanies for the launches to be performed for Westernclients. These launch trade agreements are the result ofa combination of the need of the U.S. satellitemanufacturers for additional launcher choice(originating in the post-Space Shuttle disaster period),a policy of engagement with potentially proliferatorycountries, and concerns that non-market economypractices applied to commercial launch activities wouldcreate havoc among the U.S. launch companies.The latter concern was understandable in 1988,when the U.S. satellite manufacturers promoted China’sentry into the launch market: the U.S. private launchindustry was still in its infancy and consideredvulnerable to low cost competitors. Since a few years,however, the situation is completely different. Similar‘market entry’ agreements have been signed withRussia and Ukraine and, in view of increasing demandon the part of the satellite manufacturers and owners,the U.S. Administration has successively liberalizedthese agreements (in the sense of permitting a largernumber of launches of Western satellites by thecountries concerned).88 Arianespace, in the late 1980s and early 1990s, felt even moreuncomfortable about the market entry of these ‘non-marketeconomy’ launch providers than its U.S. colleagues, as it madeits living to a much larger extent in the internationalcommercial launch market: there, it would have to face thenew-comers whose competitive power and effectiveness wascontrolled by the U.S., and the latter’s policies had otherpriorities than protecting the European launch company. Inview thereof, the European Commission was asked to alsoconclude a separate restrictive agreement with the Russianauthorities. The resulting arrangement, however, was neverformalized because of internal disagreement concerning the