[co-author: Ambia Harper]
Last month, members of the Advisory Committee on Commercial Remote Sensing gathered virtually to discuss the commercial remote sensing industry in the United States, the global competitive landscape, recent revisions to the U.S. regulatory framework for remote sensing systems, and future opportunities. During the meeting, a few themes emerged. First, global competition is fierce and ever-increasing. U.S industry and regulators must be vigilant and work cooperatively to stay abreast of developments and foster continued U.S. leadership in technology and the global market. Second, U.S. leadership in remote sensing technology requires relentless innovation by U.S. companies and a responsive, flexible regulatory framework that nurtures innovation. Third, the U.S. regulatory apparatus has to be future-minded.
In the United States, satellite imaging is regulated by National Oceanic and Atmospheric Administration (NOAA) of the Department of Commerce. ACCRES is a formal federal advisory committee that supports NOAA on matters related to the commercial remote sensing industry. ACCRES provides policy and programmatic recommendations, and its periodic meetings serve as a forum to discuss the interaction between industry activities and Government policies, programs, and regulations. The October 2020 meeting focused on recent regulatory changes at NOAA and considered those changes in the context of the global market for remote sensing technologies, with a focus on competition, innovation, and continued U.S. leadership.
Leadership in the commercial remote sensing industry is important to the United States economically and also as a matter of national security. U.S. companies face relentless pressure to innovate to avoid being leap-frogged by competitors and left behind, especially as the commercial industry evolves from its historical focus on imaging toward a broader analytics market with new data and models.
Today, more than 40 countries are engaged in the satellite imaging market, and there are approximately 250 known foreign remote sensing systems. Countries including China, India, Japan, South Korea, and the UK are developing cutting-edge technologies. In some of these countries, companies receive direct government support. China, for example, subsidizes its commercial remote sensing industry. In addition, foreign jurisdictions historically have not applied the same rigor and restrictions in licensing as the United States. U.S. companies have repeatedly warned that licensing restrictions handicap them in the marketplace, and these concerns were echoed in the ACCRES meeting, despite recent changes to the licensing regulations.
Regulation and Innovation
In July of this year, NOAA updated its licensing regulations for private and commercial remote sensing systems by establishing a three-tier system for remote sensing licenses. The tiers are based on NOAA’s assessment of whether the data collected by a remote sensing system is available from other companies. Tier 1 systems produce data that is substantially similar to data from sources not regulated by NOAA, i.e., foreign systems. Tier 2 systems produce data that is substantially similar to data from other U.S. sources only. Tier 3 systems produce data that is not substantially the same as data from any other source.
During the ACCRES meeting, industry challenged the completeness of the information NOAA uses to determine tiers. Participants questioned NOAA’s capacity to keep pace with the industry’s rate of change and raised concerns that NOAA’s tiering regime would constrain innovation by limiting U.S. companies to capabilities based on a threshold set by foreign competitors. Participants also called for greater transparency about NOAA’s tiering determinations and procedures. Hogan Lovells Partner and ACCRES member Tony Lin remarked on the lack of NOAA written decisions and encouraged NOAA to publish other written guidance, such as an FAQ or other document, to help industry address common questions, including whether certain changes in ownership require prior NOAA approval and how NOAA determines whether an imaging sensor is used for mission assurance. In addition, industry members emphasized that regulatory uncertainty makes it hard for industry to grow and raise capital. NOAA stated that it is considering how best to provide such written guidance and, with respect to its tiering process, encouraged industry to share information regarding foreign systems with NOAA via its website.
The meeting included discussion by various working groups regarding whether the new rules position U.S. companies to lead the industry in the future. Following were some of the questions raised by these groups at the meeting:
- Is the current NOAA regulatory framework adequate or appropriate for regulating non-earth imaging given that many systems that conduct such activities are not providers of imagery but rather providers of other satellite services, such as mission extension or orbital debris removal?
- What can be done to increase dialogue between NOAA and industry and NOAA and its government partners about emerging technologies and the future direction of satellite technology? How does NOAA ensure that it is focused on the right information and asking the right questions? How can industry facilitate NOAA’s efforts?
- How can NOAA develop a framework to track and evaluate emerging technologies?
- Does the United States have the right governance structure for this industry? Does NOAA have jurisdiction to address emerging technologies in the industry?
ACCRES will meet next in 2021. In addition to the Committee revisiting issues related to the remote sensing licensing regulations, the working groups will be following up on these future-oriented questions.