An amendment contained in the US Fiscal Year 2013 Defense Authorization Act, signed into law in the first days of January, could provide a welcome boost for the country's satellite industry by loosening the regulatory shackles which have prevented the sector from competing in the international market.

The key passage allows the US president to modify International Trafficking in Arms (ITAR) rules, moving satellite components from the tightly controlled United States Munitions List (USML) governing military items, to the more lightly policed Commerce Control List (CCL). Presidential discretion is all that is usually required to shift most items off the former schedule, but satellites are an exception.

Patricia Cooper, president of the Satellite Industries Association, a lobbying group, says she has never seen such a broad range of stakeholders take an interest in the amendment: "Republican and Democrat, conservative and liberal, House and Senate".

Details have yet to emerge and transferring components from one index to the other is a lengthy process. However, President Barack Obama's administration has repeatedly called for the change.

The rule dates from last century following the explosion of two Chinese rockets with US-built satellites aboard. The subsequent investigation raised worries about Chinese industrial espionage and, as a result, Congress passed a law requiring satellites and components be maintained on the USML. Any sale would require stringent checks by the Department of Defense, with its default position a refusal.

US industry felt the brunt of the restriction in its inability to sell components to international partners or to share vital information, the approvals for which could take years if they were even granted at all.

Market share, already on the way down for other reasons, went into freefall, coming to rest at about 16% of the global market. Companies outside the USA took advantage of the situation immediately, and manufacturers have been increasingly marketing components and entire satellites as "ITAR-free" - able to accept components or launch from anywhere.

In April 2012, the US military issued a hefty report stating that removing satellites from the USML presented no national security risk, and indeed that a continued listing actually hurt national security by culling the high-technology industrial base of much-needed experience and capability. The industry, of course, threw its full weight in support of change.

"It's always difficult to say 'this is a smoking gun, we lost this contract due to ITAR', but this removes the consideration as companies compete with their counterparts abroad," says Cooper.

"The immediate effect is the removal of the signal that the US satellite and space industries are discouraged from participating in the international marketplace. The tangible effect won't likely be seen until we actually have items moving off the USML to the CCL in the third or fourth quarter this year."

Source: Flight International