Buying Time

The satellite industry wants the Defense Department to buy time in bigger chunks and through long-term contracts. That would help Defense better manage the substantial bandwidth it purchases now in one- to two-year deals, executives say. But it would also buoy a flagging satellite industry at a time when revenues from corporate, broadcast and cable television customers are lackluster.

Defense normally uses short-term contracts to buy bandwidth during military operations, said David Helfgott, chief executive officer of satellite manager Americom Government Systems, a subsidiary of Washington-based SES Americom. Industry wants more predictability than that, Helfgott explained, and it could come from contracts that might last up to 10 years. Helfgott estimates the total government market at half a billion dollars annually, with about 50 percent of that revenue coming from Defense.

The department pays for much of its satellite time out of a fund controlled by the Defense Information Systems Agency. However, several satellite executives have said that government buyers aren't aware of some purchasing alternatives-for example, that time can be bought in some cases through the General Services Administration's supply schedules.

Now, executives are spreading the word to their customers that they need not be tied to the DISA piggy bank. In the process, they're promoting the alternative buying methods to potential new customers.