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

[JamesOberg@aol.com]

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.