Enhanced View Budget Cut Opposition Heats Up

by Matt Ball on April 20, 2012

There’s a feature in today’s New York Times that outlines the battle that is brewing in Congress to defend the use of commercial satellite imagery for intelligence gathering. The president’s budget as submitted reduces the Enhanced View program spending by more than half from $540 million to $250 million. The director of the National Reconnaissance Office has resigned on Wednesday of this week amid escalating pressure to defend these cuts, lending hope to what has been a rather grim picture for commercial satellite providers GeoEye and DigitalGlobe.

Several conversations at this week’s National Space Symposium held out little hope for a return of budget dollars in this tough election year environment. Notably absent from the event was Letitia “Tish” Long, director of the National Geospatial-Intelligence Agency, who had been promoted in a press release as a notable speaker. Word was that she was absent in order to attend a cabinet-level meeting with the President to go over the budget, and likely review a report that was due over the weekend that analyzes the commercial satellite spending.

The fact that these companies are publicly traded makes the story all the more compelling as rumors and uncertainly have a direct impact on their valuations. The longer this uncertainty drags out, the greater the stock market scrutiny. Some analysts are pointing to a potential “winner take all” scenario that may favor DigitalGlobe. This speculation is hurtful in terms of the strong value that both companies bring to the world in their consistent data gathering and imagery analysis services, and the fact that the competition spurs each to innovate in order to win new customers.

In related news, the Department of Defense spends $13.7 billion dollars per year on simulation and training, a whopping 2 percent of the entire DOD budget. With this line item, the move is on for augmented reality to take the place of live training, where soldiers are immersed in virtual training environments. When you put the EnhancedView expense in contrast to the simulation budget category, it seems that an up-to-date understanding of current conditions on the ground would be of greater value than a virtual view.

The $7.3 billion Enhanced View contract spreads the expense over ten years, amounting to less than a billion per year for an incredible capacity to monitor the globe in high resolution. With next-generation satellites underway that provide all-new levels of intelligence gathering capacity, cuts now are even more short sighted in light of the continued innovation that these commercial vendors are bringing to the market. With the government’s investment acting as a anchor, the companies have been able to make investments that keep American satellite imagery capacity at the forefront of a very competitive global market. The value that a world-leading commercial capacity brings to the economy as a whole is well worth the government’s investment alone.

The sting to innovation and the vitality of the country’s geospatial market will be considerable if this budget cut goes through. The least that the government could do would be to turn off the restrictions on imagery quality that can be sold commercially as it hampers these companies from providing their full capacity to the marketplace. If there are to be cuts, let the companies deliver their full resolution. After all, in this age of rapid change, we can no longer afford this restriction as it impacts our ability to see, respond, and reduce the impacts before they are felt across the whole economy.

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