[FPSPACE] U.S. To End Quotas On Satellite Launches By Russia

[Dwayne Allen Day]

This is important news.


DDAY

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Wall Street Journal December 1, 2000 Pg. 4

U.S. To End Quotas On Satellite Launches By Russia, Helping Lockheed's 
Business

By Carla Anne Robbins and Anne Marie Squeo, Staff Reporters of The 
Wall Street Journal

The U.S. will allow the quota on Russian commercial space launches to 
expire at the end of this year, clearing the way for Lockheed Martin 
Corp. to expand its satellite-launch offerings in an intensely 
competitive market.

U.S. officials prepared the ground Thursday, briefing congressional 
aides on what they described as measurable Russian progress to halt 
the sales of ballistic-missile technology to Iran.

A senior U.S. official declined to offer specifics but said the 
Russian space agency had made "real progress establishing strong 
controls over major Russian aerospace companies." At the same time, 
the official acknowledged that there continue to be serious cases of 
individual Russian experts selling their know-how to Iran.

Any U.S. company seeking to launch satellites on Russian rockets will 
still need to apply for an individual license.

The move will be a particular boon to International Launch Services, 
a joint venture formed in 1995 between Maryland's Lockheed Martin, 
the nation's largest military contractor, and two Russian companies, 
Khrunichev Enterprise and RSC Energia.

Being able to offer customers launch services both in Russia and the 
U.S., where Lockheed has a family of Atlas rockets, is an important 
selling point, "given the inherent risks involved in space launches," 
said Lockheed spokesman Jim Fetig.

Due to the recent weakened sales of commercial satellites, only 17 of 
the 20 launches permitted under the quota have taken place. But 
Lockheed officials say ending the quota could have a big symbolic 
impact on their business and improve their chances of winning the 
declining number of launch contracts.

Any restrictions, they contend, can frighten off potential customers 
who might fear that the U.S. government could pull the plug on a 
launch for political reasons. Lockheed has two main competitors: 
Seattle-based Boeing Co. in the U.S. and Arianespace, a European 
consortium.

The Clinton administration first offered Russia access to the U.S. 
space-launch market in 1993, hoping to woo Russia's space agency away 
from less savory clients. Over the years, the administration has used 
the promise of quota increases to try to persuade Russia to improve 
its nonproliferation efforts.

The administration has been under intense pressure from both Lockheed 
Martin and the Russians not to renew the quota once it expires this 
year. U.S. officials said Russian progress on nonproliferation made 
that easier. But they conceded that they were also concerned about 
the long-term viability of the joint U.S.-Russian venture if the 
quota continued.

The issue of Russian proliferation is a sensitive one on Capitol 
Hill. Congressional Republicans have harshly criticized the White 
House in recent days after Moscow decided to void an agreement with 
Vice President Al Gore limiting its conventional arms sales to Iran.

But intense lobbying by the U.S. aerospace industry, and especially 
their warnings about European launch competition, is expected to 
override most objections on Capitol Hill.