Military's leased satellites: Is there a better way?

Current leasing methods inefficient and expensive

The U.S. military spends hundreds of millions annually to support its satellite communications networks, mostly by leasing time on commercial satellites. But paying for those satellite services is needlessly expensive and inefficient, an industry expert says.

One primary problem of trying to keep Defense Department spending down for leased satellite communications and support is that spending isn't a budget line item, said William Donahue, a retired Air Force lieutenant general and consultant with satellite communications provider Xtar. He noted that the Navy is the only service with a budget line for satellite communications.

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Satellite communications money is lumped in DOD’s Overseas Contingency Operations fund, an off-budget fund for day-to-day military operations. “They need to get a budget line to that so industry can predict where the needs are,” he said.

One way to do this is to follow the model for government terrestrial operations that uses a managed services approach, Donahue said in an interview at the Satellite 2012 conference. The Defense Information Systems Agency (DISA) has a working capital fund to manage and buy bandwidth for terrestrial communications and this could be applied to satellite communications, he said. Free-market practices would also bring efficiencies to the satellite communications market by creating a more competitive environment, but the government hasn’t figured out how to free up and handle demand in the satellite sector, he said.

The managed services model brings together terminal providers, space providers, teleports and security managers, Donahue said. Although there are some core military communications services that the commercial sector can't provide, the great majority of DOD communications can run on commercial satellites. “The time has come to treat satcom the way that we treat terrestrial [communications],” he said.

Managed services also provide a body of standards to follow, such as the IT management framework and also provide greater cost savings and a model that provides warfighters operating in remote areas with the bandwidth they need, Donahue said.

However, the biggest challenge to adopting a managed services model is cultural, Donahue said. When the U.S. began military operations in Central and Southwest Asia, there was a rush to provide satellite bandwidth by leasing it from commercial sources. Those first rushed and haphazard processes became ingrained acquisition habits in DOD, he  said. What's needed is a champion in the federal government to push for a managed services model, Donahue explained. “I think its time for the government to do this. There is nothing preventing them from doing this right now,” he said.

The government has tried to develop more efficient models, said Andrew Ruszkowski, Xtar’s vice president for global sales and marketing. One example is DISA’s Assured Satcom Services in Single Theater program, an innovative attempt to dramatically reduce the $500 million DOD spends on annual satellite communications and support services in theater, but fell short because it relied on older purchasing methods. The good news is that the agency recognized what it was missing in satellite communications and tried to do something about it; it just came up short, he said.


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