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U.S. Government Eases Restrictions on DigitalGlobe

If WorldView-3 launches on its current schedule, its best images would be commercially available around mid-May of next year, assuming the satellite undergoes three months of on-orbit testing. Credit: DigitalGlobe artist's concept

WASHINGTON — Satellite imagery provider DigitalGlobe has won U.S. government approval to sell its highest-resolution imagery to all customers, a ruling that is effective immediately for the company’s existing satellites, DigitalGlobe announced June 11.

For DigitalGlobe’s newest and most capable satellite, slated to launch in August, the ruling will take effect six months after the craft is declared operational, the company said.

Previously, Longmont, Colorado-based DigitalGlobe was not permitted to sell its sharpest satellite images to non-U.S. customers. Some of the company’s existing satellites can collect images at resolutions sharper than 50 centimeters, but prior to the ruling, it could only sell that information to the U.S. government.

An image’s resolution, or ground sampling distance, roughly translates to the size of ground features that can be detected in the picture. For example, 50-centimeter imagery can distinguish objects of that size or larger.

DigitalGlobe’s planned WorldView-3 satellite, which will feature a ground sampling distance of 31 centimeters, is slated for launch Aug. 13 or 14 from Vandenberg Air Force Base, California, the company said. For that satellite, “updated approvals” will permit DigitalGlobe to sell black-and-white images with 25-centimeter resolution, along with color images at 1-meter resolution, to all customers six months after it is declared operational.

If WorldView-3 launches on its current schedule, its best images would be commercially available around mid-May of next year, assuming the satellite undergoes three months of on-orbit testing.

“We are very pleased and appreciative that the U.S. Department of Commerce under the leadership of Secretary Penny Pritzker, with support from the U.S. Departments of Defense and State and the Intelligence Community, has made this forward-leaning change to our nation’s policy that will fuel innovation, create new high-tech jobs, and advance the nation’s commanding lead in this strategically important industry,” Jeffrey R. Tarr, DigitalGlobe’s chief executive, said in a prepared statement. "Our customers will immediately realize the benefits of this updated regulation, as for the first time, we will be able to make our very best imagery available to the commercial market. As a result of this policy update and the forthcoming addition of WorldView-3 to our constellation, DigitalGlobe will further differentiate itself from foreign competition and expand our addressable market."

The press office of the Commerce Department, which licenses and regulates U.S. satellite imaging companies, could not immediately confirm the decision.

Citing increased competition, especially from the relatively unrestricted aerial photography industry, DigitalGlobe last year asked the Commerce Department to modify its existing license to permit it to sell its sharpest imagery to all customers. At the time, those data were reserved exclusively for U.S. government use.

Because of the sensitivity of the matter — high-resolution satellite imagery has obvious military and intelligence applications — the decision was elevated to the White House, which solicited input from other stakeholders including the intelligence community and the departments of State and Defense.

In April, the intelligence community came out squarely in favor of lifting the restrictions

DigitalGlobe currently operates a fleet of five satellites, two of which are capable of collecting images at 50-centimeter resolution or better. The company’s anchor customer is the U.S. National Geospatial-Intelligence Agency, which distributes and analyzes satellite imagery for both military and intelligence customers.

But the company, which early last year bought its main competitor, GeoEye, is pushing to increase its business with non-U.S. government customers, including private companies and foreign governments. In these markets the company has faced increasing competition, particularly from aerial photography firms that have not had to cope with resolution restrictions.

DigtalGlobe has another satellite nearing completion, GeoEye-2, which is similar in capability to WorldView 2, that the company had planned to store for in indefinite period before launching. In May, the company said the length of storage period would depend on demand, and suggested that a lifting of the resolution restrictions could cause that demand to surge.

The announcement of DigitalGlobe’s license modification comes one day after a potential future rival, Skybox Imaging of Mountain View, California, confirmed rumors that it would be acquired by Internet search engine giant Google for $500 million in cash. Google is a longtime buyer of DigitalGlobe imagery for its Google Earth mapping application.

DigitalGlobe’s shares, traded on the New York Stock Exchange, dipped slightly June 10 but opened higher on June 11.

In a June 11 note to investors, Chris Quilty, senior vice president of equity research at Raymond James and Associates of St. Petersburg, Florida, said Google’s acquisition of Skybox could impact DigitalGlobe’s sales to Google but also could turn out to be a net positive for DigitalGlobe.

Google recently signed a 10-year imagery supply contract with DigitalGlobe valued at an estimated $10 million to $20 million per year, Quilty noted. While Skybox’s planned constellation of 24 satellites will offer high revisit rates – Skybox currently has one satellite on orbit – DigitalGlobe has advantages in terms better imagery resolution, accuracy and diversity of spectral bands, he said.

Moreover, Quilty said, a Google-owned Skybox is not likely to threaten DigitalGlobe’s core U.S. government business.

Also on June 11, DigitalGlobe said it would be changing the orbit of one of its older satellites, WorldView-1, to ensure afternoon coverage on any given day. “This shift will optimize the DigitalGlobe constellation to monitor changes on the earth at various times during the day,” DigitalGlobe said. 

Follow Warren on Twitter: @Ferster_SN


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