Satellite vendors line up for $4B DOD net buy

Satellite carriers jockeying for position to bid on the Defense Department's $4 billion procurement for wideband network service in the Pacific and Caribbean contend that satellite transmission, not fiber-optic cable, can best satisfy the Pentagon's requirements.

The satellite carriers believe they can offer DOD more capacity to more locations in the vast service area covered by the Defense Information Systems Network (DISN) Transmission Services-Pacific (DTS-P) contract managed by the Defense Information Systems Agency at a lower overall price than fiber.

A spokeswoman for Loral Orion Inc., Rockville, Md., which has scheduled a launch for a satellite to serve the Asia/Pacific region later this year, said, "The more [DOD] does by satellite, the lower their costs because satellite resources are more abundant than fiber."

Andrew Faiola, market development manager for Esatel Communications Inc., Alexandria, Va., a small business that resells capacity on a number of international satellite systems to federal agencies, said only satellites can serve some of the DTS-P locations, such as Kwajelein in the Marshall Islands, which is used extensively by DOD for missile testing. "There's a number of other locations where fiber circuits just don't exist," Faiola said.

The satellite companies say they also can meet DISA's demanding technical requirements to provide Asynchronous Transfer Mode technology, which was developed originally to provide dynamic bandwidth allocation on terrestrial circuits.

Comsat Corp., which offers global service over more than 20 satellites operated by the International Telecommunications Satellite Organization, recently introduced services and products that can meet DOD's ATM needs, said Al Dayton, deputy program manager for new business development at Comsat, Bethesda, Md.

Dayton said the company's new Link One service and Link 2000 product provide bandwidth-on-demand features, which will enable DOD to better manage its satellite transponder traffic. Bandwidth-on-demand technology allocates bandwidth to users dynamically based on actual requirements rather than pre-defining bandwidth for each user.

Warren Suss, a telecommunications analyst who follows the federal market, agreed that in most instances a DTS-P solution tilted toward the use of satellite circuits would be more cost-effective than a network design favoring fiber. Trans-Pacific fiber routes offer limited capacity for growth and expansion, Suss said.

Opting for satellite service also would save DISA money, he said, because the agency already has fully paid for Earth stations serving major troop concentrations in Japan, South Korea and Johnston Atoll. But, Suss added, the quality of service that DISA wants to provide to some locations means that prime contractors bidding on DTS-P must offer fiber service, no matter what the cost. "Satellite just cannot meet the technical requirements of the highest level of service DISA wants, " Suss said.

Prime bidders on DTS-P include AT&T, MCI Worldcom Inc. and Sprint. Loral Orion, Comsat and Hughes Global Services, a subsidiary of Hughes Space and Communications Inc., are pursuing partnering opportunities with the primes.

Due to the value of the contract and the intense competition, officials at Hughes Global declined to comment on the company's plans and strategy. Esatel plans to form partnerships with primes that want to use the company to help meet the small-business requirements of the contract.

Telstra Corp., the Australian telecommunications carrier that has signaled its intention to bid on DTS-P, has access to the same satellite capacity as Comsat because both are Intelsat signatories and preferred carriers.

DISA issued the DTS-P request for proposals in August, bids are due Dec. 10, and award is slated for early 1999.

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