-13 satellite system and to make the benefits of this technology available to satisfy the needs of a substantial user community. However, in light of the potential advantages to be derived from a more extensive role for the private sector, we are concerned that those aspects of S. 657 setting forth the respective roles of the governmental and private sectors may not be ideally suited to achieve the purposes of the legislation. In particular, it would appear that S. 657 does not contemplate a role for the private sector in the provision of services to end users, but rather merely the provision of equipment and services to the Government under contract for the Government's use in the establishment and operation of the space and data handling segments. A discussion of several of the key provisions of S. 657 will serve to illustrate these concerns. Section 101(a)(8) defines the "System" to be established pursuant to the legislation as including: "a combination of one or more earth satellites processing and dissemination by the Secretary This definition would appear to preclude any role for the private sector in establishment of the space segment of an operational equipment and earth resources system, other than -14 as a supplier of equipment to NASA for its use in the establishment and operation of the system. Likewise, since processing and dissemination of data is to be done by the Secretary of the Interior, it would appear that the only role contemplated for the private sector in the establishment and operation of the data handling segment would be in support of the Secretary's specified functions. It is recognized that a certain role for the private sector is contemplated in paragraph (g) of Section 103, Policy and Purposes, as follows: "The System shall be developed so as to However, Section 103 does not appear to envision private Section 303 (b) provides that the Secretary shall "establish and operate the data handling segment." In so doing, the Secretary shall, pursuant to Section 303 (e), -15 "to the extent practical, engage the services necessary to establish and operate Section 303 admittedly provides some opportunity for the private sector to furnish equipment and services to the Department of Interior, pursuant to contract, to enable the Department to establish and operate the data handling segment, but only to "the extent practical," as determined by the Secretary. Moreover, since the "data handling segment" is defined to include "receiving data from the space segment, archiving, retrieval, processing and duplication and dissemination of the products of the system on demand to users or subscribers," S. 657 would, in effect, preclude the private sector from a role in the direct provision of data products and services to end users, including the Government. Instead, the Department of Interior would be established as the sole provider of such services. Given the existing capabilities in the private sector to provide data processing and distribution services, a more desirable policy would appear to be to provide greater encouragement to private entities to market the products of the system, and to develop and offer new and innovative services rather than precluding the offering by private entities of earth resources services to end users. -16 Section 302, setting forth NASA's functions, requires NASA to "provide for the establishment of the System," and makes no mention of the private sector role. Thus, it is also clear that with respect to the space segment, S. 657 contemplates that the private sector's role will be limited to supplying the Government with hardware for its use in the establishment of the space segment. It is recognized that S. 657 does provide in Section 301 (b) (6) for a potential transfer of responsibility for all or part of the system to the private sector upon the determination of the Director of the Office of Science and Technology Policy that "such transfer will allow the objectives of this Act to be met with improved products, services and operating efficiency." This provision provides some hope of an increased role for the private sector. However, we question whether, given the stated test and the realities of bureaucratic inertia, this Section provides any real expectation that a transfer to the private sector would occur in the reasonably foreseeable future, if ever. In the face of an existing governmental earth resources system, which would include both the space and data handling segments, it is questionable whether it could be demonstrated that the standards for transfer to the -17 private sector set forth in Section 301 will be met. In the comparison of a proposed privately owned system with an existing system, owned and operated by the Government, it would be difficult indeed to demonstrate in advance that the standards of Section 301 would be met. In particular, price comparisons may be misleading because the private sector will have to fully allocate costs, including taxes, to services while the price for services offered through a Government-owned system, using the present Landsat system as an example, would not reflect fully allocated costs. The practical result would be that a transfer to the private sector probably would not occur. In summary, we believe S. 657, in effect, establishes a governmentally owned and operated system to be funded entirely by the taxpayer leaving, as a practical matter, the provision of equipment and services to the Government for its use in the establishment and operation of the system as the only role for the private sector. Such an institutional framework foregoes a unique opportunity to structure an operational earth resources satellite system in a manner which would fully enlist the experience and capabilities of the private sector and better ensure that the purposes of the legislation are achieved. |