Tuesday, January 15, 2019

Where Uber's Going We Don't Need Roads

          By Brian Orlotti

Fort Worth TX based Bell Helicopter has unveiled a mock-up of the Nexus, a vertical take off and landing (VTOL) vehicle the company intends to build for Uber’s proposed air taxi service.

The Nexus offers an appealing vision for the future of air travel---as interpreted by Uber.


A hybrid-electric propulsion aircraft, the Bell Nexus will use six tilting ducted fans to vertically take off and land from a rooftop or helipad. It will seat five passengers and have a gross weight capacity of 272 kilograms.

As outlined in the January 7th, 2019 the Verge post, "Bell’s hybrid-electric flying car will be available via Uber by the ‘mid-2020s,’" the aircraft’s fans are hidden inside ducts rather than exposed to ease passengers’ safety concerns about being close to fast-spinning blades.

Bell chose hybrid-electric propulsion over a purely electric system so that the aircraft could fly further and carry more weight. Bell wants the Nexus to be versatile enough to serve other markets (i.e. military, cargo transport) should the anticipated market for urban air taxis not pan out.

Uber first announced introduced its plan for a ride-sharing service in urban airspace in 2016. The company laid out a vision of a network of small, electric, autonomous aircraft (dubbed the sexier name of ‘flying cars’ by some) shuttling passengers from rooftop to rooftop (or ground-based helipad) to alleviate gridlock.

Since then, at least 19 other firms are developing air taxis/flying cars. These include legacy manufacturers like Chicago IL based Boeing and Leiden, Netherlands based Airbus as well as small startups like Mountain View CA based Kitty Hawk (owned by Google founder Larry Page) and Webling Germany based Lilium Jet.

Anticipating regulatory and technical obstacles to its plans, Uber itself has made a point of partnering with aircraft makers, real estate firms, and government regulators to rally support.


For its part, Bell Helicopter is hoping to capture a futuristic market after decades as one of the top manufacturers of commercial and military VTOL aircraft (such as the V-22 Osprey and the upcoming V-280 Valor). Bell’s aim of having the Nexus flying in major cities by the mid-2020s may serve as a sign to investors that the company has its eye on the future.

Flying cars, long a staple of science fiction, now have the tantalizing potential to become science fact. Should the considerable obstacles to them be overcome, our cities may one day boast Blade Runner-like vistas of sleek vehicles zooming through the skies.

Here’s hoping those skies are still sunny with no murderous replicants on the prowl.
Brian Orlotti.
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Brian Orlotti is a network operator at the Ontario Research and Innovation Optical Network (ORION), a not-for-profit network service provider to the education and research sectors.

Monday, January 14, 2019

Still No Plan for SSL or GEOSats, But Maxar's CEO Howard Lance Has Resigned. Here's What it Means for Canada's MDA

          By Chuck Black

CEO Howard Lance has resigned from his job at Westminster CO based Maxar Technologies effective immediately and been replaced by Daniel Jablonsky, one of his Maxar colleagues who, since October 2017, has also acted as the president of the Westminster CO based Maxar subsidiary DigitalGlobe.

New Maxar CEO Jablonsky. Photo c/o Space Intel Report.

Jablonsky will also now sit on the Maxar board of directors, where he will join other DigitalGlobe alumni, including retired US General Howell M. Estes III, the current chairman of the Maxar board (who has also been the chair of the DigitalGlobe board since 2011) and Nick S. Cyprus, the chairman of the Maxar audit committee, who was also previously a director of DigitalGlobe.

The circling of the Maxar wagons around the DigitalGlobe subsidiary and it's lucrative US government Earth imaging contracts is simply the final, last ditch effort to keep the wheels twirling on the Maxar bus.

The DigitalGlobe assets will be protected. But the other Maxar business units, including Palo Alta CA based SSL and Brampton ON based MDA are far less central to Maxar's future.

As outlined in the January 14th, 2019 Space News post, "Maxar replaces CEO Howard Lance with DigitalGlobe president," Maxar has been trying for some time to figure out what to do with SSL manufacturing line for large communications satellites. According to the post:
Maxar sold off some of SSL’s valuable Silicon Valley real estate in early December and said it intended to decide by year’s end whether it would sell or shutdown its geostationary satellite manufacturing portion of SSL.
But so far nothing has moved forward, which tends to suggest that the real value of SSL, given the complete collapse of the large satellite market, is almost entirely wrapped up in its property holdings.

If this turns out to be true, its certainly bad news for Maxar, which will almost certainly need to try and unload SSL for whatever it can get.


As for Canada's MDA subsidiary, Maxar executives have always insisted that it's only as good as the sales it can generate from the Canadian government.

Since, as outlined in the January 1st, 2019 post, "2018: The Year in Space for Canada," MDA wasn't able to pull another "3rd generation Canadarm" sale out of the Federal government last year, MDA's market value might end up being less than anyone thought.

But a second measure of value could perhaps be MDA's collection of patents relating to the original construction of Canadarm based technology.

As outlined in the December 16th, 2016 post, "MDA says No Sale of Canadarm Technology to the US Government in NASA RESTORE-L, DARPA RSGS or "Any Other" Project," there is real concern on both sides of the border over whether or not MDA can even use components of Canadarm technology for independent NASA projects without the active participation and approval of the Canadian government.

An answer to this question of who owns the Canadarm patents will go a long way towards defining the true value of Canada's Maxar assets.

If Maxar can't move forward with high profile programs like the NASA RESTORE-L satellite servicing mission or the Defense Advanced Research Projects Agency (DARPA) Robotic Servicing of Geosynchronous Satellites (RSGS) project without the active participation of the Canadian government, the Canada's MDA might remain a Maxar asset.

Otherwise, all bets are off on MDA's future in Canada.
Chuck Black.
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Chuck Black is the editor of the Commercial Space blog.

Friday, January 11, 2019

For the Want of a Nail...

          By Henry Stewart

The recent loss of Westminster CO based Maxar Technologies WorldView-4 satellite and the resulting catastrophic drop in Maxar stock prices, is a reminder to some that on-orbit satellite servicing is an idea whose time has come.


As outlined in the January 10th, 2019 The Verge post, "Fixing broken satellites in space could save companies big money," when your satellite breaks in space, "there isn’t an easy way to repair it."

Fortunately, "technology that’s currently on the horizon may change that." Or, it may not.

The post noted several organizations and corporations currently working to commercialize on-orbit satellite servicing technologies including  Broomfield CO based Altius Space Machines and Singapore based Astroscale Space Debris

The post also noted Maxar expertise in this area and its contribution to NASA's long-proposed but little funded RESTORE-L program, a "free-flying mission projected to launch in 2020 to perform in-orbit satellite servicing on an operational government asset in low-Earth orbit," according to Gunter's Space page.

As outlined in the March 19th, 2017 post, "American MDA Subsidiary Promotes "DEXTRE" for US as NASA RESTORE-L Satellite Servicing Budget Slashed," NASA cut funding for RESTORE-L from $133Mln US ($178Mln CDN) to $45Mln US ($60Mln CDN) in fiscal year 2018 and scaled back development work on the program.

The Restore-L program has been languishing in development "purgatory" ever since.


As mentioned many times before in this blog, Maxar and its predecessor organization, Richmond BC based MacDonald Dettwiler have been working for years to repurpose well understood Canadarm technologies for on-orbit satellite servicing but the stars never aligned and nothing ever moved forward.

Kinda reminds you of that old proverb, reminding us that seemingly unimportant acts or omissions can have grave and unforeseen consequences over the long-term.
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Henry Stewart is the pseudonym of a Toronto based aerospace writer.

Thursday, January 10, 2019

That Canadian Space Plan Where We Give Most of the Funding to a Failing, Foreign Owned Maxar is Dumb

          By Chuck Black

The next Federal budget will be announced within the next three months.

Over the last six months the Canadian space industry, publicly represented by the Aerospace Industries Association of Canada (AIAC) and the #DontLetGoCanada coalition, with funding and resources supplied through Westminster CO based Maxar Technologies, has been lobbying to "help secure our place in space" by committing several billion dollars from the upcoming 2019 Federal Budget to a "3rd generation" Canadarm. This new Canadarm would be built at Maxar's Brampton ON based MDA subsidiary, and provided as Canada's contribution to the proposed NASA Lunar Orbital Platform-Gateway (LOP-G).


The plan was pitched as a way to maintain access to the US space program and its opportunities in much the same way as the original Canadarm provided Canadian access to the International Space Station (ISS) and helped to build Canada's astronaut corps.

But now that Maxar stock has dropped off a cliff, as outlined in the January 7th, 2019 post. "Maxar Stock Drops to New Lows After DigitalGlobe Subsidiary Reports Loss of WorldView-4 Satellite," and its true fiscal situation is on the public record, the obvious question needs to be asked.

Is bailing out a virtually bankrupt, US based hodge-podge of independently failing and overly indebted businesses really the best way to "help secure Canada's place in space?"

This blog doesn't think so.

Maxar's current situation is certainly dire. As outlined in the January 9th, 2019 Motley Fool post, "Why Maxar Technologies Stock Bounced 13% This Morning," after "two straight days of relentless selling, Maxar Technologies (NYSE:MAXR) stock finally caught a break Wednesday" as short sellers closed out their positions and booked their profits.

That doesn't mean that the crisis has passed. It just means that there was no further bad news that day. As outlined in the post, Maxar is losing money and has a huge debt load:
The company carries $3.2Bln US ($5Bln CDN) in debt -- 8.5 times its $380Mln US ($503Mln CDN) market cap. 
With its earnings potential crimped by the loss of a satellite, and bankers still demanding their due, bankruptcy can't be ruled out as an end game for Maxar.
Maxar, as outlined in the December 20th, 2018 Maxar press release, "Maxar Technologies (MAXR) continues to explore range of strategic alternatives for its GEO communications satellite line," also originally promised "to make a decision on the future strategic direction of the GEO communications satellite business in due course and will provide an update to shareholders in early 2019," but that hasn't happened yet, either.

Before giving Maxar any more Canadian funds, we might want to at least wait and see what their plans are for the GEO satellite business.

The New York NY based Spruce Point Capital Management "attack" on Maxar Technologies, which began the run on Maxar stock, began with the August 7th, 2018 Spruce Point Capital press release, "Spruce Point Capital Management Releases a Strong Sell Forensic Research Opinion on Maxar Technologies Ltd. (NYSE / TSX: MAXR)." The full report is still online here on the Spruce Point website and it's well worth reading. Maxar's initial rebuttal to the Spruce Point report is included with the August 24th, 2018 Maxar press release, "Maxar Technologies Provides Comprehensive Response to Shareholders Following Misleading Short-Seller Campaign by Hedge Fund." Over time, the market decided to back the Spruce Point assessment and Maxar lost most of its share value. Graphic c/o Spruce Point

For now, it's just not reasonable for the Federal government to fund Maxar's as per its original plan which, as outlined in the September 18th, 2018 post, "Colorado Based Maxar/MDA Asking for $1-2Bln to Build Another Canadarm for the US LOP-G," was mostly only a request to hand over large sums of money and hope for the best.

As for the part where, as outlined in the November 15th, 2018 post, "Innovation Minister Navdeep Bains Politely Pushes NASA Administrator Jim Bridenstine Under the Bus," senior elements of NASA and the Donald Trump Administration actively campaigned for Canadian funding to support a failing Maxar, this situation is also problematic from a political perspective.

But it might be a problem best dealt with another day.

And if we really want to build a new Canadarm for the US LOP-G, we could always find someone other than Maxar to build it.

That's certainly a sensible and reasonable piece of due diligence, at least until we know that Maxar isn't going bankrupt any time soon.
Chuck Black.
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Chuck Black is the editor of the Commercial Space blog.

Monday, January 07, 2019

Swarm Technologies Pokes the FCC in the Eye

          By Brian Orlotti

Silicon Valley CA based space start-up Swarm Technologies has made a formal request to the US Federal Communications Commission (FCC) to launch more of its controversial cubesats just a day after being fined $900,000 US (1.2Mln CDN) for illegally launching its first four nanosats without FCC permission.

The enigmatic Swarm CEO's smile. As originally outlined in the March 12th, 2018 post, "Silicon Valley Company Co-owned and Run by a Canadian has Launched Four "Unauthorized" & "Dangerous" Pico-sats," Swarm CEO and co-founder Sara Spangelo is a Canadian expatriate who still has an astronaut candidate profile on the Canadian Space Agency (CSA) website. Spangelo applied, but was not accepted, for astronaut training during Canada's fourth astronaut recruitment campaign in 2016-2017. Photo c/o Swarm.

As outlined in the January 3rd, 2019 IEEE Spectrum post, "Swarm Wants to Send Hundreds of Tiny CubeSats Into Orbit," Swarm seeks to create a low earth orbit network of 150 cubesats by 2019 that will enable global communication for internet of things (IoT) devices at a fraction of the cost of existing systems.

Other markets include low-cost connectivity to non-profits and humanitarian organizations, as well as border patrol and security applications.

The company also claims to be working with “a top automaker and other transportation companies to address connectivity solutions for connected cars, trucking, and fleet monitoring.”

Swarm is backed by Silicon Valley CA based venture capital firm Social Capital and by American entrepreneur Sky Dayton, the founder of Internet service providers EarthLink and Boingo Wireless.

Each of Swarm’s satellites is a 1/4U (11 x 11 x 2.8cm) size and weighs about a thousandth as much as the satellites for Hawthorne CA based SpaceX’s proposed Starlink orbital broadband network.

Due to their small size, they can be launched far more quickly and cheaply than traditional satellites.


However, Swarm’s satellites have drawn the ire of the FCC in the past.

In 2017, the US agency denied Swarm permission to launch for four satellites, dubbed ‘SpaceBEE's,’ on the grounds that the tiny objects would be difficult to detect.

Defying the FCC’s edict, Swarm went ahead with the launch in January 2018. The event was noted as the first ever illegal satellite launch.

The FCC responded by revoking permission for future Swarm launches and launching an investigation into the company.

The FCC also discovered that the company had carried out unauthorized tests of its technology in a Silicon Valley garage and had used weather balloons to transmit data to moving vehicles.

But those sanctions didn't last. As outlined in the December 21st, 2018 Fortune post, "How Satellite Startup Swarm Returned to Space After an Illicit Launch," Swarm successfully launched a second set of three microsats on a SpaceX Falcon 9 rocket in early December 2018.

This second launch even received FCC approval

On December 20, 2018, the FCC fined the startup $900,000 US (1.2Mln CDN) implemented a compliance plan to prevent further infractions and formally welcomed Swarm back into the club of FCC approved satellite companies.


The very next day, Swarm requested the FCC’s permission to launch and operate a constellation of 150 satellites nearly identical to the four, original SpaceBEEs.

Swarm’s new application goes to great pains to convince the FCC that its satellites are not the danger the agency considers them to be, arguing that:
  • Being so small and light, the satellites will almost certainly burn up in the atmosphere at their end of life, with no risk to people on Earth.
  • The satellites will carry radar retroreflectors which will boost their visibility to ground-based tracking stations. Similar reflectors fitted to the SpaceBEEs have proven to be at least as visible as some larger 1/2U and 1U satellites in similar orbits.
  • A study by space tracking firm LeoLabs (and paid for by Swarm) found that the SpaceBEEs could be detected more than once a day on average; better than some larger satellites. Swarm has also contracted LeoLabs to track its new network, providing a second source of orbital data to supplement the U.S. government’s Space Surveillance Network.
  • The satellites will all carry GPS chips that will regularly transmit their positions to Swarm HQ.
  • The satellites will have onboard magnetorquers, giving them limited maneuvering capability. These devices will enable them to shift from a low-drag to a high-drag state, accelerating their descent through the atmosphere. Swarm says it will instruct the satellites to go into a high-drag configuration when they near the International Space Station (ISS), minimizing the time they spend at its altitude
While there is something to be admired in Swarm’s chutzpah, going forward, cooperation with the relevant authorities may prove a less bumpy road.

While the US government has proven risk averse and even hostile to space ventures in the past, its cooperation and assistance to firms like SpaceX, Blue Origin and others prove that times have changed.

A thumb in the eye of authority is sometimes needed, but a smile and an open hand can take you further. 
Brian Orlotti.
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Brian Orlotti is a network operator at the Ontario Research and Innovation Optical Network (ORION), a not-for-profit network service provider to the education and research sectors.

Maxar Stock Drops to New Lows After DigitalGlobe Subsidiary Reports Loss of WorldView-4 Satellite

          By Chuck Black

Just about the time when reasonable people thought the news on Westminster CO based Maxar Technologies couldn't get any worse, another Maxar catastrophe bubbles to the surface.


Today's crisis, as outlined in the January 7th, 2019 Maxar press release, "Maxar Technologies Reports Failure of its WorldView-4 Imaging Satellite," is the announcement from Maxar subsidiary DigitalGlobe, that its WorldView-4 Earth imaging satellite has malfunctioned and is no longer operational.

As outlined in the press release, the "WorldView-4 satellite experienced a failure in its control moment gyros ("CMGs"), preventing the satellite from collecting imagery due to the loss of an axis of stability."

Efforts to repair the satellite are ongoing, but so far unsuccessful. According to the press release, "at this time, Maxar believes that WorldView-4 will likely not be recoverable and will no longer produce usable imagery."

WorldView-4, originally known as GeoEye-2, is a sophisticated, third generation commercial imaging/surveillance satellite featuring a large telescope capable of resolving features on the ground just a bit larger than a football.

Maxar advertised the satellite as operating in conjunction with a constellation of other DigitalGlobe owned satellites including the DigitalGlobe WorldView-3, the WorldView-2, the GeoEye-1 and several others.

WorldView-4 sales efforts were primarily targeted at international defense and intelligence customers who were considered to be US allies. Maxar said WorldView-4 generated approximately $85Mln US  ($113Mln CDN) of the company’s 2018 revenue, which is expected to total roughly $2Bln US ($2.67Mln CDN) when the company reports full-year earnings in coming weeks.

The WorldView-4 satellite was insured for $183Mln US ($242Mln CDN) and carried a net-book value of approximately $155Mln US ($206Mln CDN), including related assets.

According to its press release, Maxar intends to write off the net-book value of the satellite in the fourth quarter of 2018 and to "seek full recovery for the loss of WorldView-4 under its insurance policies."


For some, the loss was a catastrophe.

As outlined in the January 7th, 2019 Toronto Star post, "Maxar shares fall to Earth after Canadarm maker loses satellite," a large chunk of Maxar's near-term growth "was dependent on WorldView-4, which will result in a loss of sales and potential earnings growth in 2019 and 2020," according to Toronto ON based Stephen Li, an analyst for St. Petersburg FL based investment firm Raymond James.

The January 7th, 2019 Globe and Mail post, "Shares spiral as Maxar Technologies loses major revenue-producing satellite," quoted Vancouver BC based Canaccord Genuity analyst Doug Taylor, who said he believed WorldView-4, which cost $835Mln US ($1.1Bln CDN) and took several years to build, “is Maxar’s most valuable satellite in orbit. … It represents one of the company’s most significant assets and was the flagship of the DigitalGlobe constellation."

For others, it was simply more of the same.

As outlined in the December 21st, 2018 post, "BREAKING NEWS: RADARSAT-2 Offline for Most of the Week. RADARSAT Constellation February 2019 Launch Date in Doubt," Maxar has already had to deal with the recent, if temporary, failure of its Canadian RADARSAT-2 satellite and with multiple postponements of the launch of the RADARSAT Constellation Mission (RCM).

And while the Canadian government has allowed Maxar real-time access to RADARSAT-2 data for resale, the Feds have also pledged to provide RCM data to the public through their Canadian Open Government initiative, which would certainly cut back on Maxar's ability to generate revenue from the sale of RCM generated Earth imaging data. Expect further details on that initiative to shake out over the next few months.


Maxar stock being traded on the New York Stock Exchange (NYSE) reached a new low of $8.03 US ($10.69 CDN) during the September 7th, 2019 trading session on news of the failed satellite.

Maxar stock on the Toronto Stock Exchange (TSE) also reach a new low during the September 7th, 2019 trading session, bottoming out at $10.62 CDN per share as the exchange closed for the day.

As outlined in the January 1st, 2019 post, "2018: The Year in Space for Canada," Maxar stock on the NYSE was trading at $65.25 US ($88.97 CDN) per share at the beginning of last year, before bottoming out with a December 24th, 2018 low of $9.55 US ($13.02) per share.
Chuck Black.
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Chuck Black is the editor of the Commercial Space blog.

Thursday, January 03, 2019

UPDATED: Don't Fire Up The SpaceX "Trampolines!" Roscosmos Head Dmitry Rogozin Isn't Visiting the US After All

          By Henry Stewart

Preparations for an upcoming US visit by Roscosmos State Corporation Director General Dmitry Rogozin are still moving forward despite growing criticism in the US.

DG Rogozin Photo c/o Sergey Savostyanov/TASS.

Last October, NASA administrator Jim Bridenstine extended an invitation for his Russian counterpart to visit NASA headquarters in Houston TX in the new year.

But others objected. As outlined in the January 1st, 2019 Politico post, "'Wow': NASA startles with invitation to sanctioned Russian," some Russian hawks considered Rogozin to be "no typical rocket-science technocrat. He is an ultranationalist politician with a record of stark racism and homophobia who is under American sanctions."

And that's a quote from a news story. Imagine the sort of comments the editorialists are generating.

To be fair to Rogazin, he's a well known public figure, in both Russia and the US. As outlined on his official Russian Government bio page, Rogozin has served terms in a variety of political positions including "Permanent Representative of the Russian Federation to the North Atlantic Treaty Organisation (NATO)" and Russian Deputy Prime Minister.

According to his Wikipedia entry:
Rogozin was involved in several diplomatic conflicts following the 2014 Crimean crisis. He was added to the sanctions list by the US, Canada and the European Union (EU) and had conflicts with Romania, after Romania barred his plane from entering its airspace and Moldova." 
Rogazin is also well known for his colorful language. As outlined in the April 29th, 2014 NBC News post, "Trampoline to Space? Russian Official Tells NASA to Take a Flying Leap," he once said that sanctions against the Russian space agency to protest Russian activities in the Crimea would have no effect, since American astronauts couldn't fly to the International Space Station (ISS) on a "trampoline."

At the time, he was referring to the lack of US capability to launch astronauts into space (they've been flying on Russian rockets since 2011 when the US Space shuttle program wound down). That situation will likely end this year as new, human rated rockets developed under the Commercial Orbital Transportation Services (COTS) program are rolled-out, which could be part of the reason why Rogozin is visiting NASA.

Rogozin has also butted heads with the Canadian government. The April 28th, 2014 post, "M3MSat and the Politics of Dancing in the Crimea," noted a quote from the then deputy Russian Prime Minister stating that the Canadian government will certainly "have to pay – both in terms of money and reputation – for a decision to ditch the launch of its (Maritime Monitoring and Messaging Micro-Satellite or M3MSat) by a Russian rocket." M3MSat was rescheduled and eventually launched on June 22nd, 2016 from the Satish Dhawan Space Centre in India. Graphic c/o CSB.

According to the Politico post, NASA Administrator Bridenstine also:
...told the Russian state news agency TASS in mid-October that he had succeeded in temporarily waiving sanctions on Rogozin so that he could visit Houston and speak at Rice University, Bridenstine’s alma mater, sometime after the new year.  
The US and Russia cooperate extensively on space exploration and, according to the TASS report, Bridenstine stressed the need for a “strong working relationship” with his counterpart...
More recently, and as outlined in the January 2nd, 2019 TASS post, "NASA prepares for Roscosmos chief's visit underway despite criticism in Washington," plans for the visit are still moving forward although specifics are hard to come by.

But the harsh words from critics are continuing, at least for now. This may not matter to Bridenstine, who is looking for specific commitments from Russia and others (including Canada) to commit to the NASA's Lunar Orbital Platform-Gateway (LOP-G), or Rogozin.

As outlined in the July 10th, 2018 post, "The Russian Space Program is Entering a Dark Age," Rogozin has his own domestic concerns to contend with.

Space is one of the few areas where the US and Russia have managed to cooperate. Here's hoping that cooperation continues.
Editors Note: Almost as soon as the above article was posted and, as outlined in the January 7th, 2019 Politico Space post, "More friction in U.S.-Russia space relationship," came word from NASA that the US "has revoked its invitation to Russia’s top space official, Dmitry Rogozin, after fierce pushback from lawmakers over Rogozin’s history of racist and homophobic remarks and because he is under sanctions for involvement in the annexation of Crimea." 
The chorus of lawmakers was led by Democratic senators Jeanne Shaheen of New Hampshire and Robert Menendez of New Jersey. The Russians also seem to have cooled  to the idea of participating in the proposed US led NASA Lunar Orbital Platform-Gateway (LOP-G). 
The article quoted Brian Weeden, a technical adviser at the Washington DC based Secure World Foundation, who said that "the International Space Station isn’t in jeopardy, but the shifting geopolitical landscape and political tensions are going to create challenges for the next relationship (building the LOP-G)."
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Henry Stewart is the pseudonym of a Toronto based aerospace writer.

Tuesday, January 01, 2019

2018: The Year in Space for Canada

          By Chuck Black

Last January, no one would ever have thought that the big Canadian space story of 2018 would be the slow destruction of Westminster CO based Maxar Technologies' market valuation on the New York Stock Exchange (NYSE) and its effect on Canada.

Maxar stock peaked with a January 4th, 2018 high of $65.25 US ($88.97 CDN) per share, then bottomed out with a December 24th, 2018 low of $9.55 US ($13.02) per share.

But while Maxar crashed and burned, a whole new generation of private sector, mostly Canadian owned and operated space focused firms quietly perfected their technology, slowly raised funds for expansion and painstakingly developed functional business plans.

Here's an overview of some of the important stories this blog has covered over the last year.

It's alliance with Dorval PQ based Bombardier Aerospace to turn Bombardier’s single-aisle C Series (now known as the Airbus A220) into a commercial success moved Ottobrunn Germany based Airbus Space and Defence into the front ranks of Canadian aerospace contractors and either saved or destroyed the Canadian aerospace industry, depending on who you're talking with. As outlined in the January 29th, 2018 post, "A Pyrrhic Victory for Bombardier," the year began with the successful dismissal of US trade sanctions. It ended with Bombardier selling off several business units and significant employee layoffs. As outlined in the December 20th, 2018 post, "Airbus Has Been in Canada for Thirty-Five Years and Wants to Increase its Contribution to Our Space Activities," Airbus finished out the year intending to utilize the good feelings flowing from the Canadian government because of the Bombardier partnership to grow its Canadian footprint. Graphic c/o Wendover Productions.

Maxar's strong start to the year was based on the perception (or presumption) that the Justin Trudeau Liberal government would follow through on the Federal Space Advisory Board (SAB) August 2017 preliminary report "Consultations on Canada’s future in space: What we heard," with enough new funding in the 2018 Federal Budget to finish the SAB report and light the way forward.

That final report, once written, was also expected to recommend at least one large new project with enough funding to keep Maxar happy, plus enough extra money to spread around to the rest of the space community to create the perception of a "balanced space program."

Three large projects were considered:
  • Additional RADARSAT's for the RCM (up to three more satellites on top of the currently planned three).
However, and as outlined in the March 8th, 2018 post, "Space Advisory Board Chair Admits Disappointment over Budget but Promises to Continue to Support Space Sector," the new funding didn't materialize, and the SAB slowly slid into irrelevance.

By the October 15th, 2018 post, "The Federal Space Advisory Board (SAB) Insists that It's Working Hard," there wasn't really anything for the SAB members to do, except attend conferences and reminisce about what could be accomplished with additional government funding.

It certainly didn't help much that, as outlined in the the February 27th, 2018 Toronto Star post, "Budget boosts science research, grant funding," the 2018 Federal budget substantially increased direct government funding for fundamental research, an area of interest which mollified many of the CSA's traditional academic partners.

Maxar also had a tough year on the Toronto Stock Exchange (TSE), dropping from its January 3rd, 2018 high of $82.01 CDN to bottom out at $13.04 CDN on December 24th, 2018 before recovering slightly in time for the year end. As outlined in the October 05, 2017 post, "MDA Acquisition of DigitalGlobe Closes; New US Based Combined Company now called Maxar Technologies," Richmond BC based MacDonald Dettwiler (a Canadian based company with a lengthy history of prime contracting for major space focused Canadian Space Agency (CSA), military and government programs) reincorporated in 2017 as US based Maxar in order to obtain access to the lucrative US satellite and military market. But the bottom fell out of the US geosynchronous (GEO) satellite market and, while the new Maxar did begin picking up US military, NASA and Defense Advanced Research Projects Agency (DARPA) contracts, Canada waffled over the political implications of providing new contracts for iconic Canadian technology to a US based firm. As outlined in the December 31st, 2018 CNW press release, "S&P Dow Jones Indices Announces Changes to the S&P/TSX Canadian Indices," the shareholders of Maxar eventually completed a planned US "domestication" and "approved a change of domicile for the company from Canada to the United States." Maxar stock "will be removed from all S&P/TSX indices where the stock is a constituent prior to the open of trading on Monday, January 7th, 2019." Graphic c/o TSE: MAXR.

The 2018 Federal Budget also allocated $100Mln Cdn for low Earth orbit (LEO) broadband initiatives, although most of that was expected to end up with Ottawa ON based Telesat, which made the original project proposal as part of its "2018 Federal Pre-Budget Submission" to the 2018 Pre-Budget Consultations in Advance of the 2018 Budget in the fall of 2017.

By April, and as outlined in the April 20th, 2018 post, "Telesat Moves Forward with New Offices, New Plans, New Challenges and New Funding," Telesat was accessing financing supplied through a $100Mln CDN pot allocated through the Federal Strategic Innovation Fund in the 2018 Federal budget and a $20Mln CDN direct contribution from the government of Ontario. Several billion more will be needed to complete the program but the existing funding was a good start.

The assistance of the US Defense Advanced Research Projects Agency (DARPA) will also help. As outline in the November 27th, 2018 Telesat press release, "DARPA Selects Telesat’s LEO System to Support DARPA’s Blackjack Program," DARPA is exploring the use of Telesat's LEO system for DoD’s future space-based communications requirements.

Maxar CEO Howard Lance in July 2018. Photo c/o @MaxarTech.
Another potential source of government funding, the $950Mln Federal government “superclusters” initiative, didn't break in Maxar's favor either.

As outlined in the February 16th, 2018 post, "Ottawa Announces Winners of $950Mln 'Supercluster' Competition," a proposal to build a smart agri-food supercluster (which included Maxar participation) didn't make the final cut. 

A second proposal from the Ottawa ON based Satellite Canada Innovation Network (SATCAN), originally discussed in the August 3rd, 2017 post, "Satellite Canada Applies for Innovation SuperCluster Funds," wasn't funded either.

But other space focused hi-tech firms and their proposals fared better. Groups which included PQ based ABB Canada, Kitchener ON based Clearpath Robotics, Ottawa ON based C-CORE, Burnaby BC based D-Wave Systems, Cambridge ON based exactEarth and Vancouver BC based Urthecast all received supercluster funding. 

Maxar, which wasn't included in any of the successful applications, didn't immediately panic.

As late as the March 7th, 2018 Space News post, "SpaceX, Trudeau Will Help Lift Satellite Maker Maxar Out of Its Slide, CEO Says," Maxar CEO Howard Lance was still prepared to tell anyone willing to listen that, while the bottom had fallen out of the US geosynchronous (GEO) satellite market (a major source of revenue for Palo Alto CA based Maxar subsidiary SSL, which focused on the manufacture of expensive, high-profit communications satellites) and Canadian deals weren't moving forward, the situation was only temporary.

The markets would improve and, as noted explicitly in the article, Lance expected Canadian Prime Minister Justin Trudeau to come to Maxar's rescue with a new, government funded space project tailored to Maxar strengths before the end of the year.

It was a quiet year. As outlined in the December 28th, 2018 CSA post, "Highlights of 2018," the Canadian Space Agency listed twelve highlights for the year. They included the January 20th, 2018 addition of a new hand for the Canadarm, the tenth anniversary of the Special Purpose Dexterous Manipulator (SPDM) or DEXTRE on the International Space Station (ISS), the May 5th, 2018 announcement of the participants in the Canadian CubeSat Project, the fifteenth anniversary of SCISAT,  the arrival of the OSIRIS-Rex spacecraft (with Canada’s critical laser altimeter) at asteroid Bennu and the December 3rd, 2018 departure of Canadian astronaut David Saint-Jacques for the ISS. Graphic c/o CSA.

But by August, and as outlined in the August 10th, 2018 post, "Maxar Technologies Might be Getting Paranoid," Trudeau still hadn't offered up any space funding. Some, including New York NY based Spruce Point Capital Management, were even beginning to question the fundamental assumptions which had until now supported the Maxar stock price.

Maxar needed to develop a more proactive approach.

With the assistance of the Ottawa ON based Aerospace Industries Association of Canada (AIAC) and, as outlined in the September 13th, 2018 post, "Dead Cat Bounce! New Canadian Space "Coalition" Wants Much the Same as Last Time, But With Money," Maxar created an entirely new, ostensibly independent, Federal government lobby group tasked with helping to secure Canada's "place in space."

Over the next several weeks, the underlying structure of the lobby group, known as the Don't Let Go Canada coalition was uncovered in several articles, most notably the September 18th, 2018 post, "Colorado Based Maxar/MDA Asking for $1-2Bln to Build Another Canadarm for the US LOP-G."

Bains with Bridenstine on November 14th. Photo c/o Alex T├ętreault.
The coalition was organized by Maxar through its Ontario based MDA subsidiary and focused primarily on encouraging the Canadian government to fund a multi-billion dollar "3rd generation Canadarm" for the proposed US LOP-G.
According to several high-level sources within the Canadian space industry, certain NASA employees (including Bill Gerstenmaier, the NASA administrator for human exploration and operations) are working with senior members of the Canadian Space Agency (CSA), the Aerospace Industry Association of Canada (AIAC) space committee and Maxar/MDA to co-ordinate a campaign to encourage the Federal government to announce funding for Canada's contribution to the LOP-G program as early as this fall, if possible.
The article also noted that much of the planning for the campaign (and many of the organizational e-mails) originated from MDA director of public affairs Leslie Swartman. MDA, as the holder of many of the original Canadarm patents, would be first in line for any new Canadarm derived work and could reasonably be expected to make a substantial profit off the program.

The coalition campaign culminated in an unusual November 2018 public request from NASA Administrator Jim Bridenstine for Canada to sign-on to the LOP-G program during a stage presentation at the 2018 Canadian Aerospace Summit, which was held in Ottawa ON on November 13th - 14th, 2018.

As outlined in the November 15th, 2018 post, "Innovation Minister Navdeep Bains Politely Pushes NASA Administrator Jim Bridenstine Under the Bus," Federal Innovation Minister Navdeep Bains provided a very public "no" to the NASA Administrator on the same stage, later the same day.


By now, there wasn't a lot of fight left in Maxar.

As outlined in the November 1st, 2018 post, "Maxar Technologies Share Price Collapses After Q3 Earnings Report Released," its stock price had collapsed two weeks earlier due to revenue shortfalls caused by the very same ongoing GEOsat market collapse noted back in March.

In response to the stock collapse and as outlined in the December 6th, 2018 Space News post, "Maxar sells portion of SSL real estate," Maxar began selling off its real estate holdings in an effort to raise money.

It also raised "the maximum consolidated debt leverage ratio," just in case the property sales couldn't generate enough cash to pay down the Maxar debt left over from its initial acquisition of SSL and Westminster CO based DigitalGlobe, the 2017 acquisition which began the process which turned Burnaby BC based MacDonald Dettwiler into Colorado based Maxar.

Worst of all, and as outlined in the December 12th, 2018 Nasdaq post, "Maxar Technologies Ltd. (MAXR) Ex-Dividend Date Scheduled for December 13, 2018," was the cancellation of Maxar's quarterly dividend.  Reducing or cancelling the amount of dividend paid to shareholders normally makes them unhappy and sends the message that the company is not doing well financially.

As outlined in the December 21st, 2018 Street Insider post, "Maxar Technologies (MAXR) continues to explore range of strategic alternatives for its GEO communications satellite line," the company "also continues to be actively engaged with its customers to procure additional GEO satellite orders."

Even with that, it's expected that Maxar will eventually be forced to divest itself of major portions (if not all) of its SSL large satellite manufacturing business. Maxar has promised to announce a decision regarding the strategic direction of its GEO business in the new year.

At least one Canadian expatriate could claim to have had a good year. Cape Canaveral FL based Moon Express (ME) founder and CEO Robert D. Richards (shown here with CSA president Sylvain Laporte) returned to Canada to open a ME branch office and "explore options for collaboration with the CSA and Canada’s space sector on technologies and payloads for missions to the Moon." As outlined in the November 30th, 2018 post, "Procurement Contracts, Not Science or Engineering, Will Define the Next Generation of Robotics and Planetary Rovers," ME is one of nine "US based companies (which) are now eligible to bid on NASA delivery services to the lunar surface through a new Commercial Lunar Payload Services (CLPS) program, a series of fixed price procurement contracts NASA will begin issuing in 2019 which are intended to facilitate the planned US return to the Moon." The program also has more than a passing resemblance to the very successful Commercial Orbital Transportation Services (COTS) fixed priced NASA program, which helped to turn Hawthorne CA based SpaceX into a titan of the NewSpace industry. Photo c/o ME.

Other Canadian companies have also had an adventurous year. They include:
  • The thirty seven organizations participating in the Canadian Cubesat Project which, as discussed in the May 7th, 2018 post, "Canadian Cubesat Project Finally Moving Forward," received Federal funding through fifteen grants of between $200,000 - $250,000 to post-secondary based teams attempting to build functioning cubesats for launch beginning in 2020.
  • Montreal PQ based Northstar Earth and Space which, as outlined in the November 16th, 2018 post, "A $52Mln CDN Financing Deal for Northstar Earth and Space Inc.," received funding for the development of "a global environment information platform which will transform humanity's ability to manage our impact on Earth and its natural resources," only one day after Innovation Minister Bains rejected the NASA Administrator Bridenstine's offer to announce participation (and funding) for a Canadian contribution to the US LOP-G.

In 2018, other Federal government departments and private sector organizations explored the use of space based assets to solve Earth based problems. The June 8th, 2018 post, "NRCan Explores Space Mining," covered the Natural Resources Canada (NRCan) initiative for input on space mining as part of its process to develop a new Canadian Minerals and Metals Plan (CMMP). The October 25th, 2018 post, "A White Paper on the "Case for a Global Telemedicine Vehicle Network," noted Ottawa ON based C-COM Satellite Systems concern over a global lack of local health care resources and addressed the challenge using modern telemedicine and telecommunications technologies. By the end of the year, and as outlined in the December 6th, 2018 post, "Space Mining and Innovation Should Be Encouraged Through the Tax Code, According to NRCan and CATA Alliance," both NRCan and the Ottawa ON based Canadian Advance Technology Alliance (CATA Alliance) were suggesting that the best way to encourage innovative new space technologies was through the tax code and not via direct government grants. Graphic c/o Planetary Resources.

Some Canadian based firms attempted to overcome challenges related to perception and politics.

As outlined in the April 13th, 2018 post, "Ukrainian Rockets Like the Cyclone 4M Are Too Dangerous an Investment for Western Interests: Kyiv Post," Nova Scotia based Maritime Launch Services (MLS), a joint venture of three US based firms attempting to open a East Coast based launch facility for Ukrainian built Cyclone 4M rocket, spent most of the year scrambling to raise funds and convince the Federal government that they had a plan worth supporting. 

By spring, as outlined in the May 25th, 2018 post, "Maritime Launch Services Will Not Say When It Will Begin Building Proposed Canso NS Commercial Spaceport," the wind had gone out of the sails of the project, even as MLS left the door open for other rockets to launch at the proposed facility. 

To its credit, MLS noted quite correctly in its August 2018 "Submission to the Standing Committee on Finance" for the 2019 Pre-Budget Consultations in Advance of the 2019 Budget that its very difficult to get a launch licence in Canada and the regulations governing this activity should be revised. 

In essence, and without substantially revised legislation, no one will ever be able to launch an orbital rocket from Canadian soil. Here's hoping that changes in 2019.

Inuvik based satellite receivers, built almost three years ago, are unusable today, after the failure of multiple attempts to fulfill Canadian government licencing requirements. Photo c/o Rolf Skatteboe.

Another group with problems over existing Canadian legislation governing space activities was the entire town of Inuvik NWT. 

As outlined in the March 5th, 2018 post, "That Commercial Ground Station Built by New North Networks in Inuvik Still Can't be Used," a local company attempting to fulfill a contract for the European Space Agency (ESA), an international organization which includes the CSA as a "co-operating" member, was unable to do so, even after an almost three year wait, because of Federal government delays in providing the appropriate permits and approvals. 

According to the article:
From a legal standpoint, the existing barriers favor legacy players, such as the Federal government owned Inuvik Satellite Station Facility (ISSF), administered by the Canada Centre for Mapping and Earth Observation and part of Natural Resources Canada (CCMEO/NRCan), which opened in 2010 and is the only other ground station in the region
Eventually, as outlined in the May 31st, 2018 post, "Inuvik Mayor Calls Feds "Not Forthcoming" Regarding Private Sector Commercial Ground Station Application," even Inuvik Mayor Jim McDonald weighed in on the situation.

Over the summer, as outlined in the June 21st, 2018 post, "The Special Senate Committee on the Arctic Holds a Hearing on Northern Infrastructure & That "Unlicensed" Inuvik Groundstation," Senate hearings were held on the issue, but nothing ever came of it.

A year-end announcement by Seattle WA based Amazon may have rendered the whole issue mute.

As outlined in the December 03, 2018 post, "The New Amazon Web Services Ground Station (AWSGS) Will Disrupt Existing Ground Stations," a new "cloud-based product offering scalable computing power for satellite ground stations and data processing," using "Amazon’s current AWS cloud computing infrastructure." is likely only the latest step in rolling out of new, lower cost, satellite services to the public.

So what's going to happen next year in space for Canada? To find out, check out future editions of the Commercial Space blog.
Chuck Black.
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Chuck Black is the editor of the Commercial Space blog.

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