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DigitalGlobe Wins Approval of Relaxed Operating Restrictions, with Proviso
WASHINGTON — Although the U.S. government has approved imaging satellite operator DigitalGlobe’s request to sell its highest-resolution imagery to all customers effective immediately, regulators are reserving the right to impose some restrictions on commercial sales of data from the company’s newest and most capable satellite, which is slated for launch in August.
In a decision that took effect June 10, regulators eliminated restrictions that barred DigitalGlobe from selling imagery with better than 50-centimeter resolution to non-U.S. government customers. Two of the company’s five operational satellites are capable of resolving ground objects or features that are less than half a meter across.
But for DigitalGlobe’s upcoming WorldView-3 satellite, whose camera will be capable of resolving objects 31 centimeters across in black-and-white mode, the ruling will not take effect until six months after the start of operations. WorldView-3 is slated to launch Aug. 13 or 14 from Vandenberg Air Force Base, California.
Assuming WorldView-3 holds to that schedule and undergoes three months of on-orbit testing, that means DigitalGlobe would not be permitted to sell the satellite’s sharpest images to non-U.S. government customers until May 2015.
In a written response to SpaceNews questions, Tahara Dawkins, director of commercial remote sensing regulatory affairs at the U.S. National Oceanic and Atmospheric Administration, said the six-month waiting period “permits the review and implementation of any measures that may be necessary to address national security concerns, foreign policy interests, and international obligations.”
Dawkins said the current restrictions will be lifted regardless of whether any new measures are implemented. “No other decisions are necessary following the 6-month period,” she said.
NOAA, a part of the U.S. Department of Commerce, is the licensing and regulatory authority for the U.S. commercial remote sensing industry. But the decision to loosen the restrictions in DigitalGlobe’s operating license was made by the White House, which solicited input from other government stakeholders including the intelligence community, which publicly endorsed the change in April, and the departments of State and Defense.
Dawkins declined to say whether any of the agencies asked for input were opposed to the change.
Dawkins said that, effective immediately, DigitalGlobe can sell black-and-white images as sharp as 40 centimeters in resolution, and color images with 1.6-meter resolution, to all customers. Previously the bar for color, or multispectral images, was set at 2 meters.
Six months after WorldView-3 is declared operational, that resolution threshold will be changed to 25 centimeters for black-and-white imagery and 1 meter for color imagery.
The new rules will apply to all U.S. imaging satellite operators, Dawkins said.
Longmont, Colorado-based DigitalGlobe, currently the biggest and most capable of the U.S. commercial satellite imagery providers, announced the rule change June 11. The company requested the license modification last year.
“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.
DigitalGlobe’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-3, that the company had planned to store for an indefinite period before launching it. 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.
DigitalGlobe’s announcement came 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 of 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.
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