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Research Questions

  1. What opportunities exist for the DAF to partner with commercial space companies?
  2. What are the key risks and challenges of partnering with commercial space companies?
  3. How can the DAF mitigate these risks and challenges?

The expanding global commercial space industry offers new opportunities — such as technological advances in small satellites, lower launch costs, and innovative satellite applications — that could help the U.S. Department of Defense (DoD) meet its mission requirements more efficiently and give it access to a broader innovation pool. The Department of the Air Force (DAF), particularly the U.S. Space Force (USSF), is increasing its partnership activities with the commercial space industry to take advantage of these opportunities. As the DAF makes investment decisions to leverage commercial space capabilities, it needs a better understanding of opportunities, risks, and challenges it might encounter.

To help the DAF evaluate these potential benefits and risks, RAND researchers examined two space-related markets that together represent the widest variation in market and firm maturity: the commercial space-based positioning, navigation, and timing (PNT) market (an emerging market) and the commercial satellite communications (SATCOM) market (an established market). This variation between the two markets is useful for identifying distinct and cross-cutting themes that could be generalized to other commercial space markets not analyzed in this research. In this report, the researchers describe their analysis and provide findings and recommendations for the DAF.

Key Findings

Commercial space services can provide additional capacity and resilience to existing space capabilities or provide new ones

  • The commercial space-based PNT market could provide greater accuracy and signal strength than is currently available.
  • The commercial SATCOM (COMSATCOM) market offers technologies that provide high throughput, jamming resistance, low latency, and global coverage.
  • Leveraging services from multiple commercial service providers that use dissimilar technologies (and have dissimilar vulnerabilities) adds resiliency.

These services present new integration challenges

  • Gaining operationally useful capabilities from commercial space services will require the DAF to remove barriers that limit commercial services from being integrated into military operations.
  • DoD’s current ground and user segments for PNT and SATCOM need to be modernized to enable broader access to commercial services.

Market maturity will influence the ability of the DAF to meet its strategic goals

  • COMSATCOM exemplifies a mature market; commercial demand and resulting revenue streams are robust, and financial stability allows providers and investors to explore new technologies.
  • A foundation of a mature market is a customer base that includes not only DoD but also other government and commercial customers to spur innovation and vitality.

Investing in capabilities from an immature market puts the DAF's long-term goals at risk

  • For example, although the market viability of the space-based commercial PNT market is limited, the DAF may judge that its capability to augment GPS is sufficiently valuable to pursue. But in making this investment, the DAF should consider potential impacts on industrial base stability.

Recommendations

  • The DAF should be more willing to leverage commercial space services when market risks are low or can be spread among multiple stakeholders, the operational utility of the commercial service is high, and the integration risk can be managed.
  • The DAF should adopt a wait-and-see approach using more-limited investment strategies, such as prototypes and pilot programs, when market conditions and the operational utility of the commercial service are uncertain.
  • Regardless of its risk tolerance, the DAF should make the following refinements to the way it acquires commercial space services: (1) Invest in greater market intelligence capabilities to be able to stay abreast of developments in technical capabilities, as well as financial viability and market dynamics; (2) increase the sophistication of contracting capabilities to be more adept at negotiating contracted services; and (3) build flexible resourcing options so that service contract negotiations can be conducted in a more timely fashion.

Research conducted by

The research reported here was commissioned by the Office of the Assistant Secretary of the Air Force for Space Acquisition and Integration (SAF/SQ) and by the Force Modernization and Employment Program within RAND Project AIR FORCE.

This report is part of the RAND research report series. RAND reports present research findings and objective analysis that address the challenges facing the public and private sectors. All RAND reports undergo rigorous peer review to ensure high standards for research quality and objectivity.

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