DISQUS

Steve R. · 1 year ago

Berin, the devil is in the details. "These long-term purchase agreements essentially made the U.S. Government the “anchor tenant” in a new class of remote sensing satellites, providing the initial funding for both companies to build and operate their satellites." (Emphasis added)

My question, if the Federal government is providing the initial funding for these satellites, is the Government reimbursed for providing these satellites by the companies through their sales? If not, another case of corporate welfare.

Berin Szoka · 1 year ago

My explanation wasn't sufficiently clear: When I said that the NextView contracts were "providing the initial cost of the satellites," I didn't mean that quite so literally. I meant that, by agreeing up front to purchase a certain amount of imagery, the govenrment was providing most of the capital necessary to fund construction of the satellite--but not all. The operators have to sell imagery to foreign governments and commercial providers (consistent with certain limitations in their NOAA licenses), to fund the remaining cost of building and operating the satellite.

Steve R. · 1 year ago

Thanks for responding. Space commercialization is an important step in moving forward. The process of space commercialization appears to be following the established trend of many other technological advances, those companies that you would expect to be a leader, such a Boeing, in promoting the commercial use of space appear to be reluctant in taking the risk. So it is up to the upstarts to take the plunge, or in this case to launch.

Berin Szoka · 1 year ago

If we were talking about government handing simple subsidies to private companies, I would absolutely agree with you that those private companies should pay back the government if they succeed.

But that's not how NextView works. As far as I understand it, the government isn't just handing out cash to private companies in the hopes of sparking an industry, they're saying, "We will buy X amount of imagery from you over the next four years for Y amount of money. You need to come up with the rest of the cost of your systems on your own. The risk--and reward--is yours. We're just trying to be a good customer by buying what we need upfront." This approach actually saves the taxpayer money because the government gets to use a portion of the capacity of new satellites for a fraction of what it would cost the government to build new satellites on its own--which is what BASIC would have involved.