May 13, 2020 | International, Aerospace
A bankrupt OneWeb and other troubled space startups could get some help from the Defense Department
By: Valerie Insinna WASHINGTON — As the U.S. Space Force looks to expand the military's communications capabilities in the far north, it is facing a problem. The global pandemic has hit space startups exponentially hard, and OneWeb, one of the companies aiming to provide internet to Arctic locations, filed for bankruptcy in March. The Defense Department is considering taking action to help fortify OneWeb and other vulnerable space startups, said Lt. Gen. David Thompson, vice commander of Headquarters Space Force. “I will say with respect to OneWeb specifically and others, we continue to work,” he said during a May 12 event held by the Mitchell Institute for Aerospace Studies. “We work with the White House and we'll be working with Congress, not just focused on OneWeb but all of the commercial space companies that face bankruptcy and face those concerns.” Thompson did not lay out options under consideration by the Pentagon to aid OneWeb, but he did say the department's Space Acquisition Council devised a list of proposed investments for space companies that need rapid, aggressive action. That capital is needed to ensure emerging space technologies remain available to the U.S. military but also so “that potential adversaries don't have the opportunity to acquire those capabilities,” he said. OneWeb is pursuing a sale of the business as part of bankruptcy proceedings, saying that “while the company was close to obtaining financing” through its own negotiations with investors, “the process did not progress because of the financial impact and market turbulence related to the spread of COVID-19.” So far, the company has launched 74 satellites, secured global spectrum and has half of its 44 ground terminals in development or complete — making it attractive to potential bidders such as Amazon or European satellite company Eutelsat. However, two unnamed Chinese firms have also submitted proposals, according to The Telegraph. That could raise major concerns among Defense Department officials, who have warned that adversary nations — particularly China — could use the financial instability caused by the coronavirus pandemic as an opportunity to increase investments in technology companies with national security applications. “The [defense-industrial base] is vulnerable to adversarial capital, so we need to ensure that companies can stay in business without losing their technology,” Ellen Lord, the Pentagon's top acquisition official, said in March. If OneWeb is sold to a Chinese owner, the Defense Department could lose access to one of the few suppliers of commercial broadband internet servicing the Arctic. While the Space Force operates two Enhanced Polar System satellites to provide secure, jam-resistant military communications, few commercial satellite providers extend their coverage to the far north. As a result, troops have limited communication options in the Arctic, and the Pentagon has long been concerned about a lack of resiliency. Companies like OneWeb and SpaceX, which intend to create a network of hundreds of small satellites in low-Earth orbit, could change that paradigm by providing low-cost commercial internet services that span the globe. In September, OneWeb announced it would begin to provide low-latency broadband service to the Arctic by the end of 2020, with full, 24-hour coverage expected in 2021. For its part, SpaceX stated that its Starlink constellation would begin providing broadband service this year. The military has expressed interest in working with both companies. U.S. Northern Command sought $130 million to explore OneWeb's and SpaceX's capabilities in order to provide reliable and potentially cost-effective internet in the Arctic, listing the effort on top of the unfunded priority list sent to Congress this spring. Nathan Strout in Washington contributed to this story. https://www.defensenews.com/smr/2020/05/12/a-bankrupt-oneweb-could-get-some-help-from-the-defense-department/