Main Engine Cut Off - T+57: Caleb Henry

Episode Date: August 16, 2017

Caleb Henry of SpaceNews joins me to discuss the slowdown in GEO satellite orders, the latest on the big LEO constellations, and what’s up with the sky falling. This episode of Main Engine Cut Off is brought to you by 17 executive producers—Kris, Mike, Pat, Matt, Jorge, Brad, Ryan, Jamison, Guinevere, Nadim, Peter, Donald, Lee, and four anonymous—and 65 other supporters on Patreon. Caleb Henry (@CHenry_SN) | Twitter Caleb Henry, Author at SpaceNews.com Lack of satellite orders triggers layoffs at Space Systems Loral - SpaceNews.com MDA slashes GEO order expectations - SpaceNews.com NGA director supports commercial remote sensing regulatory reform - SpaceNews.com Smallsat developers propose self-regulation to address orbital debris concerns - SpaceNews.com Three Orbcomm OG2 satellites malfunctioning, fate to be determined - SpaceNews.com SES loses 12 transponders on NSS-806 satellite, says impact is temporary - SpaceNews.com Email your thoughts and comments to [e-mail] Follow @WeHaveMECO Subscribe on Apple Podcasts, Overcast, Google Play, Stitcher, TuneIn or elsewhere Subscribe to the Main Engine Cut Off Newsletter Buy shirts and Rocket Socks from the Main Engine Cut Off Shop Support Main Engine Cut Off on Patreon

All right, Caleb, thank you so much for joining me on the show. Welcome. Thanks. Pleasure to be here. I haven't talked too much about satellite operators in the past year, so I feel like I've been focused on launch vehicles and policy and all those things that have been up in the air in the past couple of months. But I've had you on my list of people to bring on and talk because I haven't talked about satellite operators too much. And that's kind of what you're tracking day to day over at Space News. So I thought you would be a fun person to talk to. And when we were getting ready for the show, we kind of talked about this trend in

the industry. And I've seen a lot of writing from you and others in the community about this big slowdown in the big geo satellites. There's only been four orders this year. There's usually 20. So this is not even just an off year. This seems to be a big shift in trends. I would be interested to hear from you what you think is going on in that department and what the industry is doing right now. Yeah, certainly. I guess for starters, so satellites, when I first started to learn about them, I didn't really connect the dots between that and the space industry as much because, you know, the vast majority of them are for telecommunications. You also have them for GPS navigation and then like Earth observation, weather, all

these different applications. It's kind of neat to see SpaceX, I guess, they're the media darling, but to see them launching satellites and then bringing their rockets back and for people to be able to very easily connect their business. One of their most frequent reasons for launching, you know, is telecommunication satellites and commercial satellites. And that has enabled them to demonstrate reusability and help do all the things that, you know, enable their vision of going to Mars. So a little tie into like the overall space industry for the people that are

pure, you know, like space, space geeks. But yeah, so for geostationary satellites, like the big 100, two, three, $400 million satellites that have driven most of the industry for a long time, like you said, it's down to, it's August, and there's just four that have been ordered. At first, people seem to think that that was going to be like a temporary thing so mind you the past two years they were in like the mid teens i think they averaged 17 depends on how you count them which people count them based on like how competitively they were offered but i think the average number i've heard is 17 last year and 17 the year before. And now it's way lower.

And the reasons for that, there's two big ones. The first is the creation of high-throughput satellites, or perhaps the adoption, would be a better phrase, of high-throughput satellites, which are basically more powerful satellites that are capable of doing lots of internet connectivity services. And satellites are finally getting to a place where they can do those and not be considered sucky. I don't know if you ever had satellite internet growing up. I had a friend who used to have it. And as a kid, we'd try to play Xbox Live or something.

It was the absolute worst. Yeah, your ping's not super great when it's going 40,000 miles round trip or something like that. Not quite, not quite. So, peddlers are finally being able to do real powerful internet connections, and that's become like a major new driver for business for them. But that technology is growing so fast. And you know, it's changing so fast that people haven't quite figured out where to jump into the technology curve. Because when you launch something, a typical geostationary satellite will have a lifetime of an expected lifetime of 15 years, and it could be more. And so whatever you build, then largely the way it'll stay.

There's some things that you can do with the equipment on the ground to make it work better. But it's kind of like if you imagine the cell phone that you have today, if your cell phone was a satellite and you had to commit to that phone for the next 15 years, you would think really, really hard about it. years, you would think really, really hard about it. Because who knows if you chose the iPhone or the Amazon Fire or whatever it was. Yeah. And various phones that have died out over the years. Yeah, exactly. Exactly. So you want to make the right choice. And that's what's caused some concern. The other is this explosion of low-Earth orbit satellite systems, which there's been a lot of activity around CubeSats and kind of cool ways to take pictures and do things. But the telecommunications guys are also looking at smaller spacecraft

and how to do business with those. When you combine that with the changes in high-throughput satellites, suddenly everybody is just like, whoa, what is the future actually going to be? And how do we make sure we don't miss it? So do you take it as a year that people are stepping back to try and figure out what that future is? And that's why there's this drop that there's a little bit of uncertainty about where they should put, you know, when you're talking about hundreds of millions of dollars going into a satellite, there's uncertainty about where they should put it, or is it that they have the capacity they need and they're stepping off the gas because they don't want to put up too much and overinvest in that area? Right, right. It's both.

So it's definitely, from a technology standpoint, making sure that they have the best assets so they can go and get customers and have competitive services. The other half of it, which you brought up, is definitely whether or not there is a balance of supply and demand. So the supply side you have, especially in regional markets, Asia, Latin America, and Africa, I think the three that have been described as having an abundance of capacity. So there's more satellite operators beaming down capacity for internet or television services than the market probably wants. And that's not, it varies. There's more nuance than that. But the gist of. And that's not, you know, it varies. There's more nuance than that. But the gist of it is that for a lot of applications,

you have so much capacity. And Asia is a good example because you've got a lot of national operators that have popped up. And each one of those, so if a government says, you know, we need a satellite, and then they go and build one, buy one, and then they launch it, and then their neighbor's like, whoa, they got a satellite.

I want a satellite. And they go and do the same thing. And all of a sudden, you've got this space where you can have several satellites that may not necessarily have been driven by a business plan or market dynamics. And that complicates things. So yeah, for some operators, they're definitely going to be sitting out and saying, how do we apply new capacity in smart ways and make sure that our spacecraft isn't sitting there empty because there's just so many other options. isn't sitting there empty because there's just so many other options. One thing you mentioned about the lifetime, the typical 15-year lifetime of these satellites, a lot of people just think of that in terms of fuel capacity and maneuvering capacity

and all that station-keeping propellant that they need and all that sort of stuff. But like you're saying, the technology changes a lot over time. When I think about that, it, I wonder how someone like Orbital ATK, who's looking at, you know, the satellite servicing side of the industry and is looking to not just repair satellites or refuel them, but actually ride along with them and take over maneuvering capability to keep them up there longer. They have an interesting balancing match to play where they have to find customers who want to keep those satellites up longer than 15 years rather than upgrading to new technology,

like you're saying. So that seems like another side of the industry that is just about to enter the scene that I'm unsure how that's going to play. Have you heard anything in that regard about, I know Orbital ATK has a few customers signed up for their mission extension vehicle. Do you have any thoughts on how that side of that industry will play out?

Yeah. So their first customer is Intelsat, which I think depends on how you count who's the largest, but they've historically been the largest satellite operator in the world. Their customer, and it's interesting you mention that because they have talked about using Orbital ATK's service, their mission extension vehicles or MEVs, to give them extra time to decide on how to spend for future satellites. So they do want to use that to keep some in orbit. It depends on what your satellite's being used for.

If I remember correctly, and I could be wrong, but I think that they want to use those services for life extension on TV broadcasting satellites over the United States and over North America. And those are simpler satellites. So high throughput satellites can do all sorts of streaming internet to airplanes, connecting boats, connecting trains, even possibly one day the connected car. Televisions, you know, that's like their bread and butter. That's what they've been doing for like since their inception, probably. That's a lot more straightforward.

And so they find application there. Another big one for in-orbit servicing, or particularly refueling, has been government satellites, especially like government military satellites, because the way the government buys spacecraft, sometimes a lot slower. Yeah, the extra time can help a lot when your cycle is so much longer. Yeah, yeah. So if you can't plan out things that fast, sometimes it's nice to be like, let's just hold on to this one for a little bit longer and not worry about it.

It just gives them another card to play. I think the metaphor that might not be Orbital ATK, their competitor certainly likes to use this Space Systems Loral, which is owned by MDA. So they're making a competing satellite servicing program that has the assistance of DARPA. And they talk about it like, you know, if you were to like drive your car from one state to another, you wouldn't leave it because you ran out of gas and then go get another car. Then maybe think about a better car. You would put more gas in it and you'd keep going. And so that same transportation logic, it's literally for a lot of satellites it ran out of gas i mean there's other parts that can break just like a car but they they time the

life of a satellite around how much gas is in the tank and how efficient they were at using it so yeah that's going to be really interesting to see um you know in the next couple years when they actually get up and flying what they do with, who takes use of it and all that kind of stuff. But one area that probably won't be using that too much are these mega constellations in Leo and I guess some drift towards the medium Earth orbit area. The two that we hear about most often are OneWeb and SpaceX. There have been a lot of other people filing paperwork that says Me Too, Me Too, but I think there's a lot of confusion around filing paperwork that says, me too, me too. But I think there's a

lot of confusion around how seriously to take some of that and whether it's just lawyers being lawyers and getting their hand up in the air before all the airspace and capacity is spoken for. So aside from OneWeb and SpaceX, is there anyone else that you think we should consider a major player in that Constellation game? Yeah, so the FCC has a dozen non-geosynchronous applications right now, including OneWeb and SpaceX. And that's only the FCC going beyond the U.S. So that's access to the U.S. market is what that would grant you. I don't know how many there are beyond that, but off the top of my head, I can think of at least two. So you've got a large number of these constellations that could change the face of how this business is done. Another that I'm keeping a close eye on

is Telesat, and they're in Canada. So they are typically kind of in the same circles, Intelsat, SCS, Utilsat, Telesat, those four kind of named all together a lot of the time. And so of those, this is actually interesting with the whole business dynamics of it all. So Intelsat tried to merge with OneWeb. That didn't work. Yeah, nobody liked that. Intelsat tried to merge with OneWeb. That didn't work.

Yeah, nobody liked that. Intelsat really wanted it to happen. It did not work out. There were a long list of reasons. SES bought O3B, which has their satellites in medium Earth orbit. Utilsat has teamed up with Viasat. So instead of going LEO, they have worked with Viasat in California to build a terabit throughput satellite over Europe. So they're just going

opposite end of the spectrum. Biggest, big geostationary satellite we can and make it super high throughput or very high throughput or whatever you want to call it. And then Telesat took the plunge and said, you know, we're going to build our own Leo constellation. And we think that we can do a pretty good job at this.

And it was surprising because those four players, there are more that have influence on the industry, but those four players, people watch to see what kind of decisions they make. And Telesat, I think think is a pretty conservative player most of the time They don't even issue a whole lot of press releases really tell people much about what they're doing But you know, whatever they do they do with a lot of intent So to see that kind of hat thrown in the ring that one's very interesting to me So to see that kind of hat thrown into the ring,

that one's very interesting to me. So OneWeb is, I guess, close to finishing their plant in Florida right now, where they're going to do the mass production. They're going to do an original, a first run of their satellites over in Europe, I understand, at Airbus's facilities there. So they seem to be getting close. They've said, I think, 2018 for their first launch

of any satellites. Do you have any sense of when these other players are looking to get up there? I know we haven't heard too much about SpaceX's, but we always hear like 2020 they would be operating. I don't know what these others are talking about. Yeah, so I can't remember the date specifically off the top of my head for these guys. Telesat has two prototype satellites, one with

Space Systems Laurel, one with Surrey Satellite Technology Limited in the UK. And I think that those are both supposed to go up in the next year and a half or so. So those would be pilots ahead of the rest. The other as far as the applications that the FCC got. Some of those are for medium-Earth orbit constellations as well. So included in that, more satellites for O3B, which already has, gosh, I believe it's 12. I can't remember if it's 8 or 12 in orbit. They're going to add another 8.

Yeah, it's 12 because they're going to have 20. So they're going to add another eight. Yeah, it's 12 because they're going to have 20. So they're going to have that many satellites. And then Viasat has also applied for medium Earth orbit satellites. And I think it's in their FCC filing, but they sometimes when these companies disclose these things through the FCC, they're not really keen to talk about it. Like they had to tell the FCC and then other people get to see it. And then when you ask them about it, they go, oh, just wait. It's just paperwork. Don't look too hard at it. But even then, there's a discussion going on right now at the FCC

about just the ground stations, the terminals, that will connect with these non-geostationary systems. You've got SpaceX and Telesat and a lot of different companies that are all voicing their opinions on how these things should be regulated and controlled. It's not like they just filed one paper and are like, calm down everybody. They're actually paying very close attention to everything that's going on here. And when they put a lot of effort in it, it probably means they're serious about what they're doing.

So are there any big concerns from the established players in the geospace about what these large constellations will do to their operations? Is there anything that they need to be concerned about for that? Or like you're saying, that's part of this process is working out all of these details. They're all watching it from a business case perspective.

I think when OneWeb was first announced, you saw a lot of skeptics initially. And then in the time since then, you saw a lot of people adopt them, partner with them or different things. There's more than even what we've gone through so far as far as partnerships between geo-estab constellations and the threat of space debris. Because you're putting up tons and tons of systems. And the reason that there's a space debris concern now is because there was not a historical precedent for good behavior.

With how you care for it after it's done. People would fly these things and then just leave them. And it wasn't until that started to collect and I guess there are actually some things coming together. Like right when people were starting to begin to share information about orbits and monitoring and taking care of the space environment that's when an iridium satellite crashed into a russian one timing right there

uh but yeah that was like everybody's whoa whoa whoa you know like russia's you know people are calling each other i'm told that russia thought it might have been an attack at the time, and it wasn't a satellite that they were using. I believe it was defunct. So nobody knew, and it created a lot of debris, and that debris is still in orbit. If you put these massive constellations up and you're not careful, you do pose the risk of increasing that debris. And we haven't even figured out

who has the rights to remove it yet entirely. That debate is still ongoing. So those are the two big concerns I'd say right now. Something I find interesting with the constellations, OneWeb has been talking about that their satellites are going to cost just, I say just, but it's still a ton of money five hundred thousand dollars each um but like you're saying when you're used to these big 500 million dollar geo satellites like that is a you know that is crazy amount less

and they seem to be doing some like mass production kind of uh optimization rather than these handcrafted giant things that need to stay up there for so long. Are there parts of that that's going to affect the other satellites in the industry? I always refer to it as the Google approach because the way that Google rose to popularity in the 90s was to buy a bunch of cheap servers and know that some of them are going to die, but that's okay. They've bought enough cheap servers to hold them over. Do you think there's going to be any kickback towards those big geo-satellites in terms of production because there's so much focus on mass-producing cheaper satellites? I think, so speculating here, I think one advantage for the traditional geo-world is that these LEO constellations are probably going to

teach other companies how to do new manufacturing techniques. I think that it's going to push the envelope to a scale that they have not yet seen before, and they'll be able to learn what they can use and what they can't. The big geostationary satellites, they're typically very heavily customized. And as a result, it's kind of like you build it every single time anew. Like, yeah, you know, it needs solar panels. And yeah, you know, it needs these circuits and these wires and whatnot. But everybody has their own way of doing it. So it's like, instead of Ford building Taurus's and having a couple of different Taurus's, it's like everybody comes along. It's like instead of Ford building Tauruses and having a couple of different Tauruses, it's like everybody comes along and it's like,

well, I want the doors to be a little bit shorter. I want the front to be a little longer. If everybody came along and said, I want a custom Taurus, they would never be able to crank out as many cars as they do in a day. So what can you do when you suddenly apply a mass production mentality to spacecraft? I think it'll be very interesting. In that realm is a small satellite revolution, if you will.

I don't know if that's the right word for it. I guess technically, I don't know if technically OneWeb classifies as small satellite. They are going to be launched by Virgin Orbit. So I think we can colloquially classify them as small satellites because of that aspect. SmallSat conference was last week. Was there anything that caught your eye coming out of that? I didn't personally feel moved by any particular news other than all the status updates we got from everyone. But was there any big story that I missed out on? So I actually wasn't at SmallSat this year, unfortunately. I went last year. This year, my colleague Jeff Faust went and attended. I don't remember anything that

really caught my eye. I know NGA, the National Geospatial Intelligence Agency, was there talking about ways that they can use small sets, which is pretty exciting. The biggest feedback that I've heard from that conference is actually just how enormous it is right now. It used to be this small thing. People who are big into CubeSats still like to talk about how they used to be not taken seriously. And sometimes they still aren't. I wish I could remember if it was Planet Labs

or Skybox when they first went to the US government. And I forget which agency also, because the story is like faded in my mind now. But they went to an agency for a regulatory license. It's probably NOAA, because you got to go to them to get approval to take pictures of the Earth. And they're like, we're going to doing this with, you know, CubeSats. And he's like, what? Why are you here again? kind of thing. They've gone from being toys, which is something that I hate being described as but they were gone from being something that was just not really taken seriously to, you know,

you've got the head of a very secretive agency or a big figure in a very secretive agency coming and saying, yeah, we want to use these big changes there. And you've got a whole ecosystem growing as well. So it's not just a couple of guys building these things in their basement. You've got companies that are raising venture capital and building out all parts of it, the launch vehicle, the spacecraft, the ground segment, and then the operators using them. So yeah, it's pretty cool. Propulsion systems is something that I'm excited to talk about. I can't really talk about it yet, because there's a bunch of people working on it in secretive ways. They haven't really

talked openly. They say like, here's our concept, here's our general thing that we're working on, but no one's particularly open yet because they're not in operation. They're still kind of in secretive mode. So I feel like that's one that maybe next year at SmallSat or something like that, we'll start to see some of these test flights being flown. And maybe that comes along with Rocket Lab and Virgin Orbit getting flying that there's more opportunities for these things to do test flights rather than fighting for room as a ride share right now. Yeah, the propulsion side is interesting too because that's part of smallsats becoming like real mission capable satellites. When you're experimenting, you know, you're keeping it as low cost and you're just giving it the essentials and if it dies after a little bit, okay. i think actually that is something that did come out

of the small set was nasa talking about how like we want to use these but they had to be built sturdy enough for us to actually use you have to have the pros of low cost without the cons of being so cheap that it it breaks before like it gets to Mars or something. Yeah, exactly. So systems like propulsion, finding ways to create radiation-hardened commercial off-the-shelf technology, and find a sweet spot in between that where it's not so heavily engineered that it becomes your traditional space stuff that's really expensive and in low quantity,

we can still leverage the advantages that CubeSats originally started with. I get the sense that that was a big theme at the show, that maturation, if you will. So last topic I want to cover with you before I let you go. I know you've got some deadlines to get to. Always.

I think the sky is falling was the way that I saw you put this at one point. Like there's all these satellites going dead. I'm scared. Should I be scared? What's going on there? You shouldn't be scared, but it is an interesting time to be covering this space right now. For whatever reason, you had, I think it's six satellites that broke in the space of like a month or two,

which is a big deal. Three of them were geostationary satellites. Two of them were for the same operator, SES. And I think all three had different manufacturers. So right now, yeah, you've got a lot of satellites that have malfunctions. The one that probably catches more attention, at least amongst investors and that kind of that crew, would be those in Orbcom's constellation. So Orbcom, they purchased 18 satellites from Sierra Nevada Corporation. They're not quite small satellites, but they are smaller, and they're in low Earth orbit.

The first one, they lost because of a SpaceX launch malfunction. The other five have all had anomalies in orbit that at this point, speculation is that it might be a manufacturer issue. And that's kind of like the last thing that you want to happen. The one thing that everybody worries about is when you launch it. Obviously, if there's a launch failure, you can lose everything in that one fell swoop. But if you've launched everything and you have all your success and your champagne and everything, and then month by month they just kind of start turning off,

not coming back on, well, you start losing a lot of money fast. You can. Orbcom hasn't yet. They said that they have more than enough capacity with their existing fleet. But it's a genuine concern. On the geo side, it's interesting

because the three satellites that broke were all older. One was 14 years, one was 20, and the other, I think, was in between there. So they're all towards the end of life. But then again, even though satellite operators say that they're going to use or shoot for a 15 year lifespan, they usually know it's going to last a little bit longer than that. So they just like bake in some extra margin, like, all right, well, we can keep using this and keep making money. So then when it does, you know, shut down, sometimes it does pull the rug out from underneath them.

when it does shut down, sometimes it does pull the rug out from underneath them. And I think that you, so I talked to an insurer today just to kind of get a sense of like, our satellite insurer is getting nervous about this. And their answer was, not really. It's all old satellites. And the OrbCom case is interesting. You know, people are watching it. So the sky is not falling yet.

But be vigilant, I guess. Yes. Is there anything else on your radar in the next little stretch of time here that you're excited for, any events coming up that you've got your eye on? Well, I'll be at World Satellite Business Week in Paris next month. That's a big trade show that's focused mainly on satellite telecommunications. So I'm excited to see what kind of news comes out of that. As far as big events for the year, I guess this was probably on everyone's list, but seeing the Falcon Heavy launch launch that would be exciting and also um you know just

continued progress with all of the new launch vehicles that are being built so ariane's bus has the ariane 6 and vegas c which i'm told has progressed substantially uh they have a launch date for the first one already for their first mission for Ariane 6. Japan with the H3, whenever Russia actually gets the Angara rockets flying again. But you've got so many new things kind of on every front. You've got new satellites, small satellites, high throughput satellites, reusable rockets, even some cool stuff on the ground system side. So it's exciting to watch and I'll keep on writing. And 2020 is going to be a hell of a year because that's the year that everything's going to happen. Barring delays, yes. If everyone sticks to their schedule, 2020, buy a lot of popcorn. It'll be a very entertaining year. Thank you very much, Caleb, for coming on the show.

I had a great time talking with you. Is there anything you want to plug? I know you're always writing over at Space News. Everyone should check that out. And I'll put a link to your Twitter account in the show notes for this. But is there anything else that you want to send people to? Not really, I suppose. If you're not reading Space News, you're giving me the time for a shameless plug.

I'm going to try not to ramble. This isn't shameless. Space News, we're covering the business and politics of space. I cover commercial telecom mainly, as well as some other commercial stuff and international space. Jeff Faust covers civil space, and Mike Fabie covers military space. So those are the three areas we cover. I'm relatively new to Twitter. I just got on there this year.

What an exciting year to join Twitter. Yeah, right? Nothing's been going on at all. You haven't missed anything. It's pretty quiet. It's like MySpace, right? No, it's been good. So I'm having fun there.

And if you want to see what I'm writing about, go to the site and see that and what's on my mind. Follow me on Twitter. Yeah, I have a hard time believing anyone who's listening right now hasn't read Space News, but I'm sure there's at least one. So definitely, I know I'm heading there every day to check out what's going on. So that's always a good read. And listen to Main Engine Cutoff.

Yeah, obviously. Thank you. You want to do that too. All right, Caleb, thank you so you. You want to do that too. All right, Caleb. Thank you so much. All righty. Take care. Thanks again, Caleb, for coming on the show.

And thank you so much to all of you out there supporting Main Engine Cutoff over on Patreon. There are 82 of you supporting the show week in and week out. I thank you so much for all of your support. This episode of Main Engine Cutoff was brought to you by 17 executive producers. I'm blown away by that number every single time I say it. Chris, Mike, Pat, Matt, George, Brad, Ryan, Jameson, Guinevere, Nadim, Peter, Donald, Lee, and four anonymous executive producers. Thank you so much for your support of this show. You made this episode possible. I could not do it without your support and everyone else over at patreon.com slash Miko. I will talk to you next week after

the eclipse here in the US, so if you are heading somewhere for the eclipse, or if you're just going to check out a partial eclipse from somewhere nearby, hope you've got clear skies. I'll be heading down to Nashville for the eclipse. I'm hoping for some clear skies there. It's going to be quite a drive, so it would be a bit of a bummer if a storm swept through to ruin the view.

I hope wherever you are, you've got a nice sight of the eclipse. And if you will be in the Nashville area, let me know on Twitter or something. And we'll see where everyone's aiming to be for the eclipse. So until then, thank you very much for listening. And I'll talk to you next week. Thank you.