From: nobody@shell.portal.com
Date: Sat, 12 Mar 94 02:26:29 PST
To: cypherpunks@toad.com
Subject: Spy Satellites For Sale
Message-ID: <199403121027.CAA21713@jobe.shell.portal.com>
MIME-Version: 1.0
Content-Type: text/plain


The New York Times
Friday, March 11, 1994, p. A1

U.S. TO ALLOW SALE OF THE TECHNOLOGY FOR SPY SATELLITES
-------------------------
Profit vs. Security Issue
-------------------------
Marketing to Private Customers Assailed by
Some Who Fear Use by Hostile Nations
-------------------------
by Edmund L. Andrews

  Washington, March 10 -- The Clinton Administration announced today
that it would allow companies to market sophisticated spy satellite
technology to commercial customers around the world.

  The decision marks a big change from the comparatively strict limits
now imposed on satellite-imaging systems, and it caps more than a year
of intense debate among the Commerce Department, the Pentagon and
Government intelligence agencies.

  The move, which could attract new business worth hundreds of
millions of dollars to American industry, also marks one of the
clearest examples so far of the Administration's intention to
emphasize commercial and economic priorities over more traditional
cold war-era concerns about national security.

Change Raises Concern

  Some security experts questioned the decision to allow wider access
to a technology that has been described as one of the most powerful
tools in America's espionage arsenal.  But others said the technology
was already becoming available in other countries and that American
companies should be allowed to profit from the trend.

  Under the new policy, American companies will be allowed to build
and operate for-profit satellite systems that are powerful enough to
take photographs from 22,300 miles above the earth and depict objects
on the ground as small as one square yard, smaller than a subcompact
car or a hot-dog stand.

  Several American companies, among them the Lockheed Corporation, are
hoping to set up satellite imaging services for customers around the
world.  As envisioned by Lockheed, customers would be able to transmit
instructions directly to the satellite, which would turn its cameras
to the desired location and then beam the images back to the ground. 
Such customers might include oil and mining companies and
environmental researchers.

'A New Era'

  Administration officials said that companies would also have greater
freedom to export entire satellite systems to foreign countries,
though such sales will still require approval from the State
Department.

  "This is 1994," David J. Barram, Deputy Secretary of Commerce, said
in an interview today.  "This is a new era.  We believe national
security and economic security are intertwined.  In order to have
national security, you have to have vibrant and competitive industries
that are allowed to do what they do best."

  But some experts warned that the decision could severely compromise
national security by letting hostile countries use America's own spy
technology to obtain detailed images of sensitive military
installations in the United States or to plan military activities
elsewhere in the world.

  "The main customers for these systems will be the intelligence
agencies of other countries," predicted John Pike, director of space
policy at the Federation of American Scientists, a nonprofit group
devoted to science and public policy.  "They have fairly strong
safeguards here.  But in practice it is going to be difficult to
prevent North Korea or Iraq from using a front company to gain spy
satellite photos in the same way they acquired nuclear and chemical
missile technology."

  Numerous companies already market commercial satellite images, which
can be used for mapping, geologic surveys and even agricultural
purposes, like remote monitoring of cattle herds.

  But currently, the most sophisticated of these services is offered
by Spot Image, a French company, and it cannot produce photographs
showing land areas smaller than about 10 yards in diameter.  And while
the Spot system is being upgraded, it will still be unable to view
areas smaller than five yards.

  Lockheed and other American companies have been arguing for
permission to operate systems that could depict objects about a square
yard in size, a request that had been resisted by the Central
Intelligence Agency and National Security Agency.

Growing Market

  Despite the agencies' concerns, Administration officials said today
that they fully intended to approve requests like those of Lockheed,
and went on to argue that the higher-resolution images are essential
if any significant commercial market is to be formed.  The Commerce
Department says that remote-sensing services, as they are known,
currently make up a $400 million market worldwide; the market is
expected to grow to about $2 billion by the year 2000.

  Besides Lockheed, two other American companies have sought
permission to operate high-resolution satellite-imaging services.  One
is the Orbital Sciences Corporation, a small rocket and satellite
company based in Dulles, VA.  The other is World View Inc., a start-up
company in Livermore, Calif.

  Administration officials said that while the companies intended to
adopt the precise technology that has long been used on Government spy
satellites, the new policy included a number of safeguards to prevent
the technology from falling into the wrong hands.

  As happens now, the Commerce Department must still approve each
application to operate a commercial satellite surveillance system or
to sell such a system within the United States -- or to market the
services around the world.  Sales of such equipment outside the
country, however, will be subject to the export-control procedures
already in place for products that have military applications, which
means that each sale must be approved by the State Department and that
sales to hostile countries will likely be blocked.  But under the new
policy, the Government would be much more likely to approve spy
satellite exports.

Right to Decode

  To prevent the misuse of satellite data sold by the new commercial
services, the Government said that the companies would have to
maintain a record of every job the satellite had been instructed to
carry out.  Moreover, the satellites cannot scramble their
transmissions with coding technology that the Government cannot
decipher.  An oil company could protect its business secrets -- for
example, by transmitting its exploration photos in scrambled form --
but the Government would have the right to decode them.

  In addition, the new policy leaves room for the Government to shut
down a satellite system during what an Administration statement
described as "periods when national security or international
obligations and/or foreign policies may be compromised."  But industry
officials who supported the new policy said they had been assured by
Commerce Department officials that the country would need to be in a
"Persian Gulf situation" before it began shutting down systems.

  Executives at companies that have pressed for more liberal rules
said the new policy gave them virtually everything they wanted.

  "We are very pleased that the Administration put together such a
forward-thinking policy that allows the application of defense
technology for commercial purposes," said Brian Dailey, vice president
at the Washington office of Lockheed Corporation.

  Gilbert Rye, corporate vice president at Orbital Sciences, echoed
that view.  "It's an outstanding development," he said.

Security Agencies Sign On

  Today's decision was supported, at least in public, by the Defense
Department and other agencies concerned with national security issues
-- despite earlier resistance.  Two Central Intelligence Agency
officials were present at a news briefing for reporters today, though
they did not make any comments.

  Some longtime national security experts said the new policy made
sense, given the proliferation of satellite imaging technology around
the world.