Select Committee on Science and Technology Seventh Report


9  SATELLITE NAVIGATION AND TELECOMMUNICATIONS

Satellite navigation

260. Satellite navigation systems allow people to locate their position anywhere on the planet. These systems have opened up a whole range of possibilities for business and consumers. Ships, cars and pedestrians can use satellite navigation to check their position and get directions. Companies can use satellite navigation to track the location of goods and plan their operations much more efficiently. Satellite navigation devices, which can be smaller than a mobile telephone, receive radio signals from a network of satellites in orbit around the Earth. By measuring how long it takes to receive these signals from the satellites, the device calculates how far it is from different satellites and therefore where it is. Depending on the system used, satellite navigation can tell someone their position to within a few metres. The most commonly used satellite navigation systems are the Global Positioning System (GPS), which was developed by the US Department of Defence, and a Russian system called GLONASS. Both are available for civilian use. In the short term, the reliability of GPS is being improved by the European Geo-Stationary Navigation Overlay System (EGNOS). EGNOS is expected to be certified for safety-critical applications in March 2008. In 2004, the DfT agreed to £5.4 million to support the certification. Additional funding is now required and the ESA has proposed that the UK contributes €6 million. The Commission and the ESA are also developing a new system, Galileo, which is intended to be more accurate and reliable than GPS or GLONASS.

GALILEO

261. According to the Department for Transport (DfT), "Galileo will provide a highly accurate, guaranteed, global positioning service, under civil control."[476] 30 Galileo satellites will be in circular orbits 23,222km above the Earth, and ground stations spread about the globe will monitor the satellites' positions and accuracies. Galileo will provide five services: an open, free service like GPS; a commercial service; a safety of life service for transport applications; a search and rescue service, and an encrypted public regulated service.[477] Until the exact details of the signals are finalised, the range of specific applications is unknown.[478] There are, however, numerous potential applications for Galileo, ranging from the management of traffic and transport systems to the navigation of emergency services to the co-ordination of works on the public highway to reduce congestion. The Commission has estimated that the potential market for GNSS products and services (Galileo and GPS combined) could reach €400 billion in the next decade, of which UK industry can expect to capture perhaps as much as €24 billion.[479] Following a recommendation by the House of Commons Transport Select Committee, the DTI and DfT became more proactive in identifying public sector uses for Galileo.[480] The DfT, for example, is sponsoring research into possible applications, including a road user charging project. The department has allocated £10 million to time, distance, and place charging demonstration projects.[481] The DTI has set up and is funding a Location and Knowledge Transfer Network in order to foster efforts to develop new applications for services offered by Galileo. We welcome the work that DTI and DfT have undertaken to identify new applications and services that will be enabled by Galileo. We recommend that the Government report on progress in this area in the annual BNSC report.

262. Galileo has the potential to be a dual-use system serving civil and military purposes. The possibility that Galileo could be used as a military programme was raised by the Transport Select Committee in November 2004.[482] The Committee was concerned that Galileo might be used for military applications, such as missile guidance systems, as well as for military uses, such as tracking groups of men.[483] Whilst there would be no bar to using Galileo for military use, it is not intended for military applications. The Government responded that Galileo "will be a civil service, under civilian control […] Any proposals to alter the civilian status of the PRS must be unanimously agreed by Member States."[484] We are concerned, however, that there may be increasing pressure in Europe to exploit the military potential of Galileo for military applications. In July 2005, the European Scrutiny Committee noted that the draft European space policy did not make a clear distinction between the use of space for defence and security.[485] The European Space Policy published on 26 April 2007 states that "Many civilian programmes have a multiple-use capacity and planned systems such as GALILEO and GMES may have military users."[486] This comment does not clarify whether those military users could use Galileo for military applications or not. A recent communication from the Commission regarding Galileo noted that "Whilst maintaining the system as a civil system significant revenues could also come from military users."[487]Dr David Williams told us that "other countries have been saying, 'We want to use this programme for military requirements', but […] the UK has a very strong, loud voice in Europe, saying, 'We must maintain this and we cannot allow it to drift across to the military side'."[488] In response to recent Parliamentary questions, the then Minister for Transport, Dr Stephen Ladyman MP, reiterated that Galileo remained a civil programme under civil control. He noted however that Galileo's open service could be accessed by all and could be used by military forces.[489] We seek assurance from the Government that it will continue working at a European level to ensure that Galileo remains a civil system under civil control. The Government must clarify the ways in which military forces would be allowed to use Galileo and whether Galileo could be used for military applications.

263. Within the UK, the Department for Transport is the lead department on the Galileo programme and it works closely with BNSC.[490] Dr Williams told us that "it is quite correct that if you are going to have a system that is designed for traffic management the department responsible, Transport, should be involved a at policy level, saying what they are doing in the future."[491] The DfT co-ordinates the UK position through the Galileo Co-ordination Group, which brings together representatives from interested departments across Government. Given that the focus of Galileo has been primarily upon its use in transportation, the programme does not seem to have suffered the same difficulties as GMES with regard to its lead department. We note, however, that has been a significant imbalance in funding between DTI and DfT. We recognise the role taken by DfT to co-ordinate work on the Galileo programme. We recommend that DfT be known as primary user for this programme, DIUS as primary funder and BNSC Headquarters be identified as the lead with the appropriate transfer of staff accordingly.

264. There was agreement between witnesses that there are currently problems in the Galileo programme. Dr Williams told us that "There is going to be a lot of hard management going into Galileo with some very significant challenges coming up".[492] Malcolm Wicks MP said that "I think Galileo has certainly run into some difficulties."[493] Elizabeth Duthie, Divisional Manager of the Galileo Programme Division in DfT, told us that "There are a great many challenges in the Galileo programme."[494]

265. The intention was that Galileo would be implemented through a Public Private Partnership (PPP). The programme was organised so that ESA would be responsible for putting four satellites in orbit to demonstrate to private investors that the system can work. A private concessionaire was then going to be responsible for launching the next 26 satellites and for delivering the services. A concessionaire, a consortium of eight companies, was appointed but it was unable to agree on a common negotiating position.

266. On 16 May 2007, a communication from the Commission to the European Parliament and the Council stated that "the concession negotiation which should have led to the deployment and exploitation of Galileo has stalled." In this communication, the Commission invited the Council and European Parliament to take note of the failure of the current concession negotiation and to conclude that the current PPP negotiations should be ended.[495] The Council adopted a resolution concluding that current concession negotiations have failed and should be ended, supporting the deployment of Galileo and recognising that the implementation of a deployment of Galileo would need additional public funding.[496] The Council requested that the Commission submit detailed alternative proposals for funding Galileo by September 2007.

267. The Commission has recommended that the European Union and its Members States run a public procurement of the first constellation of eighteen satellites and then establish a PPP to procure the remaining satellites. This scenario would require the European Union and its Member States to find an additional €3.4 billion for the period 2007 to 2013.[497] On 13 June 2007, the Minister of State for Transport, Dr Stephen Ladyman MP, explained that the UK was committed to the PPP principle and was concerned about the potential increased costs of public procurement.[498] The Government welcomed the Presidency's acceptance that the project could be ended if acceptable answers could not be found.

268. The proposed additional costs for a public procurement are set against a history of rising costs within the programme. The programme has four phases: definition, development and validation, deployment, and commercial operating. The costs of the first two phases have exceeded original estimates. The total cost of the initial definition phase increased from €80 to €130 million. The total cost of the second phase, the development programme, is estimated to be €1.5 billion, an increase of €400 million on the original estimate. The UK has invested £96.6 million in the programme so far, with £24.1 million contributed by DfT and £72.5 million contributed by DTI.[499] If the Commission proposal for funding the deployment is accepted, the UK will be expected to pay its share of the further costs. There have been cost/benefit studies undertaken on Galileo at UK and European levels. We are however concerned that, given the changes to this programme, these studies are now out of date.[500]

269. We are concerned that the failure of the concessionaire and subsequent alternative funding proposals for the Galileo programme are likely to result in rising costs to the UK. We recommend that, before the next Transport Council meeting, the Government publish a new analysis of the costs and benefits of the Galileo programme to the UK. We recommend that the Government report to Parliament on a regular basis on its intentions in relation to Galileo.

Telecommunications

270. Telecommunications satellites are used frequently in our everyday lives. Satellites are used for distributing radio signals, for transmitting television signals, for distributing text, audio, and video by news agencies, for providing access to the internet, for providing mobile communications, and increasingly for enabling tele-education and tele-medicine. There is now a belt of over 100 satellites surrounding the Earth, providing radio, television and telephone communications.

271. Telecommunications and broadcasting is the dominant sector within the UK space industry. Satellite broadcast services and satellite communications services accounted for 85% of downstream industry turnover in 2004-06 (approximately £3496 million).[501] Colin Paynter from EADS Astrium told us that "The facts in the UK are that 80% of the industry and perhaps more of the wealth-creation is locked into telecoms research and development leading to wealth-creation".[502] ESA indicated that the market for satellite communications has been expanding at a sustained rate of more than 15% a year.[503] The DTI forecast that "With the increase in Internet traffic and development of broadband, multimedia, mobile and digital broadcasting technologies, the satellite communications industry is set to experience significant growth in the coming years."[504]

272. The UK has maintained a strong position in the development of the telecommunications sector. Intellect claimed that "Over the past 40 years, the UK has been quite good at keeping up with, in some cases even leading, world trends in telecommunications and broadcasting".[505] The DTI told us that "UK companies have played a key role in the next generation of advanced civilian communications satellites for Inmarsat and are currently working to deliver advanced broadband and high definition TV services in Europe."[506] The Inmarsat-4 F2 satellite for example was launched on 8 November 2005 and now supplies users with broadband internet and 3G phone services. The UK is also involved in ESA's AlphaBus project, which will create a platform able to accommodate up to 200 radio-frequency transponders. AlphasBus will facilitate a wide range of commercial missions ranging from TV broadcasting to multimedia applications, and including Internet access, mobile or fixed services in the widest sense.

273. It is important that the UK Government continues to support the space industry in this sector. We have mentioned earlier the importance of programmes such as ARTES and Alphasat in supporting work in this area (paragraphs 144 and 149). The BNSC acknowledged that "Much of the economic activity is currently in broadcasting and telecommunications and reflects past investments, with a significant downstream service industry based on the use of satellite systems. Future developments in this area will look at broadband links, digital communications and broadcasting."[507] The telecommunications sector is still growing. It is important that the Government continues to fund initiatives in this area such as ARTES and Alphasat, which provide vital seedcorn funding for high-risk, early stage R&D.

274. There are various regulations governing the orbit and frequency at which telecommunications satellites can operate. Satellites orbit the Earth at various levels and to maintain a particular orbit a satellite must travel at a specific orbital velocity. When a satellite is in geo-synchronous orbit, it orbits the earth once in 24 hours and is at approximately 36,000km above the Earth. The equatorial GEO orbit is popular for communications and weather satellites because the satellites remain stationary over the same point on the Earth's surface. There is room for only about 180 active satellites in this orbit so demand for orbital slots and the frequencies at which they can communicate is high.[508]

275. Before a satellite is launched, it is necessary for the national regulatory body or administration to register and seek agreement for the proposed orbit and operating frequency spectrum of the communications satellite with the International Telecommunications Union Radiocommunications Bureau. UK registration takes place through Ofcom, which is responsible for co-ordinating applications for access to radio spectrums for communications and access to specific orbits. It notifies the International Telecommunications Union and then applicants join the queue for a frequency. Applicants also require a licence from the Government under the Outer Space Act (paragraph 169).

276. We have heard that UK satellite operators are facing challenges created by the inconsistent application of regulations internationally and the UK-centric focus of Ofcom.[509] David Williams from Avanti told us that

    some regulators will interpret ITU guidelines and rules in a way which is very flexible and gives a distinct competitive advantage to other satellite operators. So there are satellite operators in Europe, for example, for whom the same standard of rigour in interpretation of rules and guidelines that apply to me does not apply, and that gives me a competitive disadvantage.[510]

Intellect wrote that "Ofcom's management of UK spectrum use is becoming very UK-centric in that the wider policy implications and international dimensions of existing and new satellite services do not appear to be taken into adequate account when planning future spectrum usage."[511] It provided several different examples such as Ofcom's plans to allow new terrestrial services to use the receive "C-band transmission band", which could jeopardise links to other countries such as Africa.[512]

277. There is potential for change in this area at national and European levels. Ofcom is currently reviewing its practices and has consulted interested parties regarding plans for new terrestrial services.[513] The European Space Policy states that "Pan-European licensing of services, spectrum and content is needed, as well as a more flexible, market-based regime for allocating radio spectrum."[514] We recommend that the Government work at a European level to ensure that there is a consistent standard of regulation across Europe. When reviewing its practices, Ofcom should take the views of satellite operators regarding the international impact of its activities into account.


476   Ev 287 Back

477   As above. Back

478   Q 387 Back

479   Ev 288 Back

480   Transport Committee, Eighteenth Report of Session 2003-04, Galileo, HC 1210, para 56; Ev 116 Back

481   Ev 372 Back

482   HC [2003-04]1210, para 51  Back

483   As above, para 47 Back

484   Transport Committee, Second Special Report of Session 2004-05, Government Response to the Eighteenth Report of the Committee: Galileo, HC 410, p 4 Back

485   European Scrutiny Committee, First Report of Session 2005-06, HC 34-i, para 22.11  Back

486   EC, European Space Policy, SEC(2007)504, p 7 Back

487   Communication from the Commission to the European Parliament and the Council, Galileo at a Cross-Road: The Implementation of the European GNSS Programmes, Com (2007)261 final, p 14. Back

488   Q 112 Back

489   HC Deb, 24 May 2007, col 1460 WS; HC Deb, 11 June 2007, col 725 WS Back

490   Q 163 Back

491   Q 164 Back

492   Q 163  Back

493   Q 584  Back

494   Q 423  Back

495   Communication from the Commission to the European Parliament and the Council, Galileo at a Cross-Road: The Implementation of the European GNSS Programmes, Com (2007)261 final, p 2, p 6  Back

496   Council of the European Union, Council resolution on Galileo, 6-8 June 2007 Back

497   Communication from the Commission to the European Parliament and the Council, Galileo at a Cross-Road: The Implementation of the European GNSS Programmes, Com (2007)261 final, p 14. Back

498   HC Deb, 13 June 2007, col 55 WS Back

499   Ev 287  Back

500   Q 587. Price Waterhouse Cooper, Inception study to support the development of a business plan for the Galileo programme ( 20 November 2001). Back

501   BNSC, The Size and Health of the UK Space Industry 2006: Executive Summary, January 2006, p 7.  Back

502   Q 8 Back

503   "Telecommunication satellites: what for?", www.esa.int Back

504   Ev 116 Back

505   Ev 211 Back

506   Ev 116 Back

507   Ev 119 Back

508   Military Uses of Space, POSTnote 273, Parliamentary Office of Science and Technology, December 2006, p 3 Back

509   Ev 212 Back

510   Q 47 Back

511   Ev 212 Back

512   As above. Back

513   Ev 408 Back

514   EC. European Space Policy, SEC(2007)504, p 10  Back


 
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