European governments are grappling with what model and what markets should be at the core of the Galileo satellite navigation system. (credit: ESA)

Galileo and Her Majesty’s taxpayers

by Taylor Dinerman
Monday, July 9, 2007

The attempt to finance the bulk of the Galileo satellite navigation system with private funds has failed. Most major European governments now want to carry on with the project using entirely public money. Since the previous commercial rationales for the system have all melted in the sunlight, like a delicious scoop of European ice cream on a hot day, a new set of reasons to support the program must be found. Some of these new justifications were on display recently in London.

On July 2, the British Parliament had a serious debate on the future of the European Galileo satellite navigation system. Like most American political debates about technological or scientific subjects, the hard issues were mostly ignored by all but a handful of the legislators involved. Unlike our debates in Washington, though, the cabinet officer responsible for the program, in this case the Gordon Brown’s new transport minister Rosie Winterton, was present to defend the government’s position.

She bravely, but incompetently, defended the British government’s now incoherent policy on the system’s development and financing. As she said, “The government’s priority objectives are private sector involvement through a robust public-private partnership, a civil program under civil control, and a transparent process of development and financial control to deliver value for money.” It is amazing that she actually said this more than a month after it became crystal clear to anyone who cared to look at the issue that none of these goals could be achieved.

At the same time, she had to admit that the whole effort “shows significant cost and timetable overruns.” Keith Vaz, a member of the Labour party, asked her straight out, “How much money have the Government put into the Galileo project?” A Conservative MP, Tobias Ellwood, chimed in: “I cannot believe that she can come to a debate of such importance without knowing how much has been spent on the project.” A good debating point, but Ms. Winterton’s problem is quite understandable since Galileo has been financed from several sources, including the European Space Agency (ESA), the EU transport minister’s budget, and other places, both inside the EU and from national funds.

As the old saying goes, “Why buy a cow when you can get the milk for free?” This certainly applies to the question of whether the Galileo signals intended to be the sources of revenue will indeed find a profitable market. Even if the signals are more accurate than GPS, as the opposition spokesman Owen Patterson said, quoting the CEO of a British satellite navigation firm, “the free to air GPS service is sufficient for vehicle navigation and therefore we are unlikely to be interested in paying (either voluntarily or through a compulsory tax) to use a European service even if technically it would be better.”

Earlier, a Labour supporter of the project Michael Connarty, said that he believed that Galileo would “allow such a system to participate in a market of Euros 450 billion, which it has been estimated will be available for satellite navigation systems up to 2025. For a 10 billion Euro investment, a 450 billion Euro market is worth investing in.” His efforts to explain exactly how the profits on this investment would be made are as confusing as the unconvincing ones made to the investors, whose failure to buy into the proposition is what triggered this debate in the first place.

Connarty’s main reason for supporting Galileo has nothing to do with the system’s possible profitability. Instead, he believes that the US might someday begin charging for the GPS signal. “Are we suddenly saying that the US is a free-market provider of services to the world? That is not a model of the American economy that I recognize.” This leaves aside the record the US has established over many decades of providing navigation services for civil aviation, beginning with Loran, which the US developed and then shared with the rest of the world, or for that matter the Internet, which has become a global common service.

The worry about the US system’s reliability is often raised as a justification for Galileo. Yet, when the supporters of the European system are asked to explain why it will cost so much less than the US system to develop, build, and operate, they claim that as a civilian system it will not have the robustness of a military system. If the US satellites and their ground control stations are vulnerable to accident or attack, then why should the European system, which supposedly will be lightweight and unshielded, not be even less reliable than the US one? The claims that the so-called Safety of Life signals will be guaranteed is one of the reasons why private firms are extremely reluctant to get involved. The price of liability insurance that a private entity would have to pay in order to offer such a service would be astronomical. If the EU or EU national governments were to offer the service, the principle of sovereign immunity would make such a guarantee worthless.

Ms. Winterton’s goal of “a civil system under civil control” is, sadly, a delusion. Galileo is seen by the French military and by others in Europe as the cornerstone of Europe’s future military space force. One French researcher, writing in the May 7th issue of Space News, claimed that “11 European countries so far have officially expressed interest in PRS (Public Regulated Signal) use for their military forces.” The political goal of the system’s strongest supporters is to drive yet another nail into the coffin of the transatlantic alliance.

Conservative MP Bernard Jenkin made the case that “Some countries, however, share the anti-American paranoia—to which the, I think he [Connarty] subscribes—whereby if the signal is not transmitted by a European-owned satellite, it is somehow not decent, proper or reliable.” This is the best and most succinct statement of the real motivation for what some British Conservatives call the “vanity” Galileo project.

The British government is stuck. They can demand a full and transparent accounting from the project’s managers, and in all likelihood run up against a wall of utter indifference. They can pull out, in which case the project will go ahead without them. Or, they can meekly accept yet another ukase from Brussels and find themselves once again publicly humiliated by the EU’s elites.

What is more interesting is the fact that the Conservative party was able to put up a fight on this issue. Their new leader, David Cameron, sometimes called the “Boy King”, has been utterly terrified of having any debates that might cast his party as being “anti-Europe”. The robust way that men like Patterson and Jenkin stood up for the interests of Her Majesty’s taxpayers is a sign that the party may have some life in it yet. But that’s just the opinion of an often deluded, optimistic Yank.

Taylor Dinerman is an author and journalist based in New York City.

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