Military commanders in the 1991 Persian Gulf conflict called it the first "Space War," because the U.S. had introduced a new arsenal of satellite-guided weapons and gadgets. Yet during that conflict, fewer than 1 in 10 U.S. munitions made use of satellite or laser systems. That number would be far surpassed in a second war against Iraq. After more than a decade of breakneck advances in information technology, 90% of U.S. bombs and missiles are now high-precision instruments of war.
If the U.S. goes to war, it will be clear that satellite technology has come of age. Space-based systems that are used to guide weapons or track troop movements are much more accurate than they were in the 1990s. New imaging satellites can take legible pictures of a newspaper on the ground from 200 to 400 miles up. The latest communications satellites enable Internet access at 50 megabits a second, allowing tanks to take video of the battlefield and relay it to headquarters in a fraction of a second. "The satellite technology available in Iraq and Afghanistan is like nothing the world has seen before," says retired Air Force General David E. Baker, a military analyst with Schwab Washington Research.
Surprisingly, much of this innovation is flowing from the commercial satellite sector, which was nearly decimated in the tech crash. Remember Iridium Satellite LLC? This satellite phone venture backed by Motorola Inc. (MOT ), ended up in bankruptcy. And 13 years after it was conceived by Bill Gates and Craig McCaw, the Teledesic LLC "Internet in the sky" has yet to launch a single bird.
Now, however, Iridium and other enterprises have a big paying customer for satellite phones, navigation systems, and the like: the U.S. military. And while the symbiosis between the armed forces and the satellite companies is not new, the two sectors appear more tightly enmeshed than ever.
Take optical communications. Commercial networks are running, on average, at just 35% of capacity, according to a new study by consultants RHK Inc. in South San Francisco. The military, meanwhile, is one of few telecom markets with a constant shortage of bandwidth. And its needs for communications, surveillance, and precision guidance systems for weapons have spiked since September 11, 2001. "Government traditionally owned all of its satellites," notes Joseph R. Wright Jr., CEO of the global satellite operator PanAmSat Corp. With no hope of meeting its own huge requirements, he says, "it's turning to the commercial sector."
The partnership is already boosting the revenues of satellite companies. First, the military rescued the Iridium system from bankruptcy in 2000. The venture, which cost founder Motorola Inc. $2.6 billion in losses, won a contract worth a potential $252 million between 2000 and 2007. Intelsat Ltd., which operates more than 20 satellites, gets 10% of its $1 billion in revenues from government services. PanAmSat has been struggling with declining commercial revenues for years. But its military division is growing at a double-digit rate. It accounts for only 3% of revenues of $812 million, but that will change -- especially now that it has its acquisition of Hughes Electronics' Hughes Global Services Inc., a $50 million-a-year military supplier.
To put today's new technology in perspective, consider how the world's first reconnaissance satellite sent its data back to the CIA. The Corona, as it was called, was launched by the U.S. in 1960, a few months after Francis Gary Powers' U-2 spy plane was shot down over the Soviet Union. Its images were captured on film, automatically sealed in a canister, and retrieved in midair by intelligence agents.
The U.S. has dominated satellite communications ever since. In 1978, the military launched the world's first Global Positioning System, a navigation tool, originally for ships, that can help guide bombs and missiles. The U.S. shares its constellation of 24 satellites -- for free -- with commercial operators all over the world. But it reserves the military band for itself and its allies. Russia operates a satellite navigation system, but its coverage is less extensive. The European Union plans to build a system called Galileo, but it's bogged down in red tape. China has weighed construction of a four-bird national GPS system.
GPS is also commercial: It was used for navigation guides in 0.3% of 2002 model cars in the U.S. But that pales beside the military. If there's a war, GPS antennas will be attached to all U.S. tanks -- and may even help deliver giant, 21,000-pound "MOAB" bombs. "This technology is just being deployed, and it will have a dramatic effect," says PanAmSat Chief Operating Officer James B. Frownfelter.
Like GPS, broadband Internet has yet to deliver revolutionary consumer applications. But the military will have access to the latest high-powered communications satellites from Lockheed Martin Corp. (LMT ) and Boeing Co. (BA ) They enable Internet access up to 100 times faster than a household digital subscriber line and are three times as fast as the connections that were available to the military in Kosovo. Top-speed broadband satellite connections in that war required much bigger antennas, up to four meters in diameter. But a new generation of antenna, like the ones made by Stockholm-based SWE-DISH Satellite Systems, may be just one meter long and can be carried around in a case the size of a carry-on suitcase. Perhaps more important, broadband links have now been extended from command centers and camps right into the heart of the battlefield, allowing soldiers to access data and communicate with each other more effectively.
GPS shows a similar evolution. Handheld GPS-targeting systems can pinpoint the exact coordinates of an object, accurate to within 10 feet. That's five times more precise than the laser-guided systems used in the first Gulf War. Barring intelligence snafus on the battlefield, that should reduce the risk of killing civilians or allied forces. "The increased accuracy and precision of our weapons means we don't need to transport as many into battle, improving overall efficiency," says Baker.
Satellite technology isn't foolproof. While it's mostly impervious to interference from weather and smoke, it can be blinded by storms under certain unusual conditions. And many satellites, costing upward of $100 million, have been lost when rockets explode at launch. Even if they make it into space, it's difficult to fix or replace them. And while it's not easy for enemy forces on the ground to jam the signals, such incidents aren't unknown. For all those reasons, some military commanders still prefer terrestrial navigation.
Satellite companies, however, insist that they can deal with most of these problems. PanAmSat's Wright says the military doesn't use a satellite until more than a year after a successful launch, when the riskiest period of operation is well past. Satellite constellations include backup birds, so the system won't be crippled if one unit fails. And the newest high-powered satellite systems have greater channel capacity, making them much more resistant to jamming. What's more, the technology satellite jammers use also emits radio signals, making it vulnerable to identification.
The war in Iraq, in other words, could become far more than a shared battlefield for the military and the commercial space industry. The armed forces are depending on satellite companies for constant improvement and innovation in surveillance and precision technologies. And the commercial space business is depending on a customer that won't turn its back during tough economic times.
By Steve Rosenbush in New York