1. GPS-Galileo Negotiations: Commercial Issues at Stake Briefing to the U.S. GPS Industry Council Sunnyvale, California March 21, 2002 RALPH BRAIBANTI Office of Space & Advanced Technology U.S. Department of State JASON Y. KIM Office of Space Commercialization U.S. Department of Commerce

2. Overview International Outreach & CooperationInternational Outreach & Cooperation U.S. Principles for CooperationU.S. Principles for Cooperation Early Consultations with EuropeEarly Consultations with Europe U.S. Position, Approach, Goals w.r.t. GalileoU.S. Position, Approach, Goals w.r.t. Galileo Status of NegotiationsStatus of Negotiations Key Provisions of U.S. Proposed AgreementKey Provisions of U.S. Proposed Agreement Issues Under ConsiderationIssues Under Consideration

3. International Outreach Efforts Open communication lines with usersOpen communication lines with users Ensure accurate understanding of U.S. policy and plans for the futureEnsure accurate understanding of U.S. policy and plans for the future Correct misinformation (examples)Correct misinformation (examples) –MYTH: GPS is a military system, can be shut off at any time FACT: GPS is a dual-use system jointly controlled by IGEB –MYTH: DoD shut off GPS during Kosovo and on Sept. 11 FACT: GPS operated as normal during Kosovo and at all other times; SA has not been used since May 2000 U.S. GPS outreach display booth deployed to many international meetings to promote GPS interestsU.S. GPS outreach display booth deployed to many international meetings to promote GPS interests –CITEL, CPM, ICAO, Paris Air Show, U.N. workshops, etc. –Continued USGIC involvement encouraged

4. International Cooperation U.S. GPS Policy of 1996 directed State Department to pursue cooperation with other nations to promote peaceful uses of GPS, establish it as world standardU.S. GPS Policy of 1996 directed State Department to pursue cooperation with other nations to promote peaceful uses of GPS, establish it as world standard Talks occurred with Russia (GLONASS), Japan (MSAS), Europe (EGNOS)Talks occurred with Russia (GLONASS), Japan (MSAS), Europe (EGNOS) September 1998: Joint statement on GPS cooperation signed with JapanSeptember 1998: Joint statement on GPS cooperation signed with Japan

5. U.S. Principles for Cooperation Seamless interoperability with GPSSeamless interoperability with GPS No direct user fees for safety critical servicesNo direct user fees for safety critical services Open market access (non-discrimination)Open market access (non-discrimination) –Equal access to signal specifications –Equal access to user markets (free trade) –Market driven competition –Free choice for end users Spectrum protectionSpectrum protection Protection of national security interestsProtection of national security interests

6. Early Consultations with Europe U.S. initially pursued cooperation based on EGNOS interoperability and European use of GPSU.S. initially pursued cooperation based on EGNOS interoperability and European use of GPS May 1998: U.S. offered draft agreementMay 1998: U.S. offered draft agreement As European interest in an independent system grew, U.S. suggested that they field a subconstellation that would be fully interoperable with GPSAs European interest in an independent system grew, U.S. suggested that they field a subconstellation that would be fully interoperable with GPS November 1998: U.S. outlined basic principles for cooperationNovember 1998: U.S. outlined basic principles for cooperation January 1999: Europe announced Galileo projectJanuary 1999: Europe announced Galileo project

7. Official U.S. Position on Galileo Modernized GPS service will be sufficient to meet user needs worldwideModernized GPS service will be sufficient to meet user needs worldwide If Galileo does proceed, the U.S. could see benefits if it is designed to be truly interoperable with GPSIf Galileo does proceed, the U.S. could see benefits if it is designed to be truly interoperable with GPS U.S. is waiting to see what path Galileo takes -- many open questions remain unansweredU.S. is waiting to see what path Galileo takes -- many open questions remain unanswered Basic U.S. position has not changed since first articulated in 1999Basic U.S. position has not changed since first articulated in 1999

8. Unanswered Questions about Galileo How viable is the business case?How viable is the business case? Will European governments help generate revenue streams through regulations and standards that effectively mandate use of Galileo?Will European governments help generate revenue streams through regulations and standards that effectively mandate use of Galileo? Will Galileo signals interfere with GPS?Will Galileo signals interfere with GPS? Will the information needed for receiver production be made equally available to all manufacturers?Will the information needed for receiver production be made equally available to all manufacturers? Will Galileo take on a strategic military role?Will Galileo take on a strategic military role? How will Europe prevent hostile misuse of Galileo?How will Europe prevent hostile misuse of Galileo?

9. Additional Questions Will the encrypted levels of service be truly interoperable with the free, safety-of-life services?Will the encrypted levels of service be truly interoperable with the free, safety-of-life services? As EGNOS becomes integrated into Galileo, will it continue to provide GPS data vital to aviation?As EGNOS becomes integrated into Galileo, will it continue to provide GPS data vital to aviation? How will Europe protect the sensitive encryption technology used?How will Europe protect the sensitive encryption technology used?

10. U.S. Approach Toward Cooperation Phased approach to reflect growing complexity of GPS-Galileo interaction over timePhased approach to reflect growing complexity of GPS-Galileo interaction over time –Phase 1: Framework agreement outlining overarching principles for cooperation during Galileo development –Phase 2: Establishment of working groups –Phase 3: Follow-on agreement addressing longer-term issues and operational interactions once Galileo goes online Current U.S. stance: must have framework agreement in place before technical discussionsCurrent U.S. stance: must have framework agreement in place before technical discussions

11. U.S. Goals for Cooperation Protect interests and investments of GPS user baseProtect interests and investments of GPS user base –No degradation of GPS service –No user fees –Freedom of choice for end users –Lower costs through free market competition –Interoperability and backwards compatibility –No constraint on future GPS evolution Protect national security interestsProtect national security interests –DoD/NATO denial capabilities –No overlay of M-Code –Control technology transfer and proliferation –Move any discussion of military Galileo to NATO Ensure level playing field for commerceEnsure level playing field for commerce Maximize benefits of combined GPS-Galileo serviceMaximize benefits of combined GPS-Galileo service

12. Status of Negotiations U.S.-E.C. talks have proceeded in fits and startsU.S.-E.C. talks have proceeded in fits and starts Meanwhile, U.S. has engaged in extensive outreach with E.C. member states (bilateral, multilateral)Meanwhile, U.S. has engaged in extensive outreach with E.C. member states (bilateral, multilateral) October 2000: U.S. submitted new agreement textOctober 2000: U.S. submitted new agreement text –September 2000: Briefing to industry May 2001: E.C. submitted counterproposalMay 2001: E.C. submitted counterproposal October 2001: Latest round of talksOctober 2001: Latest round of talks –First substantive presentation of Galileo spectrum plan –U.S. responded with high-level letters and demarche Galileo funding decision delayed to March 2002Galileo funding decision delayed to March 2002 Next U.S.-E.C. meeting: April/May 2002Next U.S.-E.C. meeting: April/May 2002

13. Key Provisions of U.S. Proposed Agreement Embodies GPS policy and principles for cooperationEmbodies GPS policy and principles for cooperation –Interoperability, spectrum protection, open signal structures, free signals, market competition, security issues Recognizes efforts of other fora: ICAO, IMO, ITURecognizes efforts of other fora: ICAO, IMO, ITU Encourages cooperation on a single, unencrypted safety-of-life serviceEncourages cooperation on a single, unencrypted safety-of-life service Ensures free trade in satnav goods and servicesEnsures free trade in satnav goods and services Ensures open access to specificationsEnsures open access to specifications Requires consultations before introducing any new standard/regulation concerning satellite navigationRequires consultations before introducing any new standard/regulation concerning satellite navigation Prohibits overlay of military GPS bandsProhibits overlay of military GPS bands Lays foundation for future cooperationLays foundation for future cooperation

14. Issues Under Consideration: Interoperability Galileo spectrum plan proposes overlay of L1, L5Galileo spectrum plan proposes overlay of L1, L5 Potential benefits to pursuing similar frequencies for GPS and Galileo:Potential benefits to pursuing similar frequencies for GPS and Galileo: –Simplified receiver design (use same antenna, circuitry), leading to lower costs for producers and consumers –Possible backwards compatibility for some GPS hardware? –Simplified denial scenario for DoD/NATO Potential drawbacks:Potential drawbacks: –Some degradation of service for GPS-only users –May be problematic for spaceborne users that see many satellites at once (e.g., International Space Station) –Any proposed overlay of M-Code is totally unacceptable U.S. has been studying options for many monthsU.S. has been studying options for many months

15. Issues Under Consideration: Access to Galileo Specifications Galileo intends to offer two types of services -- open access and controlled access (via encryption)Galileo intends to offer two types of services -- open access and controlled access (via encryption) U.S. is asking Europe to openly publish all documentation for access to Galileo open service, just as is done for GPS Standard Positioning ServiceU.S. is asking Europe to openly publish all documentation for access to Galileo open service, just as is done for GPS Standard Positioning Service U.S. also wants Europe to provide equal access to the specifications for controlled access servicesU.S. also wants Europe to provide equal access to the specifications for controlled access services –Encryption algorithms should be openly published –Crypto key regime should not exclude non-Europeans –Any licensing arrangements and fees should not discriminate against non-European firms

16. Issues Under Consideration: Access to Markets U.S. is essentially seeking national treatment and MFN-like obligations from Europe in the satellite navigation areaU.S. is essentially seeking national treatment and MFN-like obligations from Europe in the satellite navigation area –No tariffs, no other discriminatory barriers to trade –Agreement explicitly seeks to go beyond current WTO provisions and obligations, which in many respects do not seem to apply in this area U.S. is especially concerned that Europe may impose standards or regulations that effectively mandate use of Galileo within EuropeU.S. is especially concerned that Europe may impose standards or regulations that effectively mandate use of Galileo within Europe –Any new standards should be technology neutral, allowing freedom of choice among users –Agreement must be binding not only to the E.C. but all member states and instrumentalities (e.g., Eurocontrol) –Text specifies that GPS shall automatically meet any European standard for satellite navigation services

17. Point of Contact for U.S. Industry Jason Y. Kim Senior Policy Analyst Office of Space Commercialization U.S. Department of Commerce jkim@ta.doc.gov (202) 482-5827 Jason Y. Kim Senior Policy Analyst Office of Space Commercialization U.S. Department of Commerce jkim@ta.doc.gov (202) 482-5827