ABSTRACT
The commercial satellite industry has changed dramatically over the past 20 years from mainly involving telecommunications satellites (fixed point voice, data, and services), and direct broadcast television and radio satellites to an industry that now also includes: mobile services, machine-to-machine communication networks, asset tracking systems, private networks, hosted payloads and “condosats”, and private remote sensing systems that have real-time capabilities. In the near-term horizon there are also likely to be other new emerging technologies and services, such as private weather satellites and satellites that can perform on-orbit activities such as refueling, repairing and servicing other satellites. In addition, there has been a rapid development of privately financed small satellite systems with a large numbers of satellites that can operate independently and/or synchronize their systems and services. A number of these and other technologies will likely enter the commercial realm fairly
quickly since many evolve from the R&D and operational programs already incorporated into existing government space systems. There are other past examples of this evolution, but it still should be noted that commercial operations are different from government R&D or mission spacecraft and do require significant innovations, cost-saving technologies, and market development. Commercial operations ultimately need to be predicated on market demand and a demonstrated business case. Hosted payloads, joint procurements and multi-satellite constellations also introduce new sets of complexities. Each of these new technological capabilities will require attentiveness to specialized risks and interdependencies in the contractual arrangements between manufacturers and satellite operators, satellite operators and customers, satellite operators and lenders, as well as in governmental licensing procedures. Understanding the commercial and legal risks associated with commercial satellite programs
has become increasingly important in this developing area of the law. Financing of such programs and understanding the interdependencies of and related risks among the underlying arrangements between satellite operators and their key counterparties in a satellite program is critical, and the mitigation of such risks must ultimately impact the arrangements between satellite operators and their lenders or investors.
