Acrimonious transatlantic policy disputes have become all too familiar in recent years. This winter's UN Security Council debates over Iraq follow flashpoints on trade, the environment, and the International Criminal Court. Now satellite navigation has been added to the list.

Today, the Global Positioning System (GPS) -- a satellite-based infrastructure developed by the U.S. Department of Defense -- provides the only globally available signal for navigation, a feature that is essential to the operations of U.S. and allied military forces and to a growing number of civilian users. The European Union (EU) has decided to challenge GPS by building "Galileo," an independent European satellite constellation. Unsurprisingly, given the high stakes involved, the European proposal has sparked a serious transatlantic argument on several fronts, including the issue of potential interference between GPS and Galileo. The debate pits the effectiveness of a critical U.S. military asset against the EU's right to rely on a system independent of U.S. control. Any viable agreement must satisfy not only the negotiators on both sides of the Atlantic but also the global user community.

For 25 years, GPS satellites have crisscrossed the sky 12,000 miles above the earth's surface. Today, they emit two sets of signals that allow users to calculate their precise location anywhere in the world: an encrypted code for use by the U.S. military and selected allies and an open free signal for civilian use. Sometimes referred to as the world's "fifth utility" -- on a par with water, gas, electricity, and communication -- GPS enables the precise positioning, navigation, and timing information that is critical to modern society. Historically, innovations in navigation have led to groundbreaking advances in commerce, travel, and military strategy. Navigation and timing technologies are inherently dual-use, and GPS is no exception. The system's unprecedented accuracy, availability, and speed have made it indispensable to bankers, hikers, pilots, infantry, and generals alike.

The U.S. Department of Defense began launching GPS satellites in the late 1970s to improve navigation for military aircraft and ships, and to increase the delivery accuracy of the weapons they carried. After almost three decades of development and some $20 billion in procurement funding, U.S. and NATO aircraft, ships, vehicles, and ground troops rely on GPS. The system enables a host of crucial military applications, including, most notably, the current generation of "smart" bombs employed by the U.S. Air Force and Navy. Adoption of GPS-guided munitions in armed conflicts has been rapid, growing from just 3 percent of the bombs used in Serbia four years ago to an estimated 60 percent most recently in Iraq.

Even so, GPS's civilian and commercial value is quietly eclipsing its military applications. Worldwide, the ratio of civilian to military users stands at about 100 to 1, and by some estimates, commercial revenues from satellite navigation exceeded $12 billion in 2002, growing at more than 20 percent annually. GPS provides positioning and navigation information to recreational boaters and hikers, drivers of GPS-equipped cars, surveyors, and crews of commercial vessels, among others. And cellular telephones, the Internet, digital cryptography, and international financial transactions all depend on GPS-based timing information. Eventually, an upgraded GPS could serve as the basis for a revolution in global air traffic management, making air travel far safer and more efficient.

GPS's extraordinary growth was by no means preordained, however. Initially, the Pentagon restricted GPS to military purposes. In September 1983, following the Soviet downing of Korean Airlines flight 007, President Ronald Reagan approved the use of GPS in commercial aircraft. But beginning in 1990, the accuracy of the civilian signal -- and therefore its practical and commercial utility -- was deliberately degraded to avoid giving adversaries a military asset. In May 2000, President Bill Clinton announced an end to this limitation, at a stroke improving the civilian GPS signal's accuracy tenfold and opening the floodgates to further commercial development.

The decision to open GPS made strategic and economic sense. By 2000, the Pentagon was adept at jamming GPS signals over a localized area, reducing the threat that an adversary might use GPS in battle. Furthermore, after the Pentagon's initial investment in a constellation of satellites, an infinite number of users could tap GPS's open signals at zero marginal cost. Thus, U.S. taxpayers had revolutionized their military, developed a productive tool for U.S. commercial and leisure activities, and presented an unprecedented gift to the world.

There are indications, however, that this convenient symbiosis of civilian and military applications may be ultimately unsustainable. GPS now faces two important technical barriers: vulnerability to hostile jamming and the failure to satisfy stringent requirements for life-safety applications such as air traffic control. The Pentagon is taking steps, through its various GPS-upgrade programs, to address the former problem. But an exclusive focus on the jamming threat will not bring about the improvements civilian users need. Until GPS is certifiable for aviation use worldwide, its usefulness will be unavoidably curtailed.

GPS is therefore at a juncture. On the one hand, it is a strategic, state-controlled military asset; on the other, it is a global civilian infrastructure with commercial potential that has yet to be exploited fully. The Galileo challenge strikes directly at this paradox, for the first time raising the question of whether the United States will continue to enjoy its current dominance in providing the global standard for positioning, timing, and navigation.


The EU has pitched Galileo as a civilian and commercial system, contrasting its proclaimed peaceful orientation with GPS's military roots. This approach has lent credence to the notion of diverging U.S.-European attitudes on the use of force, and it anticipated the voices raised in Europe in opposition to the war in Iraq.

But Galileo was not designed simply to catch up with U.S. technological advances. After the Kosovo war, several European governments agreed that an autonomous satellite navigation capability must serve as the basis for Europe's emerging security and defense policy. Given that GPS is operated and funded by the U.S. Department of Defense, Galileo would hedge against the perceived risk that the United States could deliberately degrade or jam a signal increasingly vital to European interests. When, in December 2001, French President Jacques Chirac warned that without Galileo European countries risked becoming "vassals" of the United States, he touched on two underlying motivations for the Galileo program: defending European regional sovereignty and challenging U.S. strategic and technological leadership.

Galileo's critics are quick to ask why, when the United States makes the GPS signal available to the world free of charge, a second, potentially redundant signal is required. But the EU contends that GPS alone is inadequate because of its technical limitations and U.S. government oversight. Galileo purports to be a private-public venture that will fill in the gaps.

This is not the first time that U.S. technological superiority has prompted innovation in Europe. With substantial subsidies and after years of investments, Europe developed successful aircraft-manufacturing (Airbus) and satellite-launching (Ariane) industries at a time when the U.S. lead in these areas seemed out of reach. From a European perspective, satellite navigation promises similar success. By 2010, commercial revenues from satellite navigation are expected to exceed 110 billion in Europe alone. Galileo will also contribute to industrial development in the EU, representing a 13.6 billion investment and creating more than 100,000 technology-intensive jobs. But the plan's success will ultimately depend on whether Galileo can deliver on its weighty agenda.

Galileo's sponsors promise more robustness, greater continuity, and broader coverage than GPS -- improvements that would help satisfy requirements for life-safety applications such as air traffic management. The system's 30 satellites are supposed to be fully operational by 2008, an ambitious launch schedule meant to preempt GPS upgrades projected for the beginning of the next decade. These upgrades are expected to offer many of Galileo's promised enhancements and would thus close the window of opportunity for Europe to set the global standard in satellite navigation.

When complete, Galileo will provide five primary positioning services: free access for most consumer-related applications; a fee-based service for applications requiring more precision, with attendant charges levied on manufacturers of receiver chip sets; an open service for life-safety applications; a search-and-rescue service for emergency operations; and a public regulated service (PRS) for certain security-oriented applications. Even if the PRS is intended for use by civil security forces, many believe it will grow, in time, into a European version of GPS's upgraded military signal, the M-code.

Although Galileo positions itself as a rival to the U.S. system, its success is actually predicated on its ability to work seamlessly with GPS. Each system will be available to the other as a backup, but the full benefit of a combined constellation -- for which Galileo intends to charge a fee -- can be attained only if the systems are truly interoperable, so that a user could, for example, employ three Galileo and four GPS satellites simultaneously. Managing this interface successfully, however, will present a real challenge.


Arguments on compatibility and interference have been at the center of transatlantic tensions since Galileo's inception. One of the main sticking points has been the EU's intention to position one of its two encrypted PRS signals on the same frequency the United States and NATO plan to use for GPS's upgraded M-code. The overlap could be problematic in a conflict, since jamming one signal would also jam the other. The United States has suggested that Galileo select a different frequency, but the EU affirms its right to position Galileo on a frequency it considers appropriate for its system and was supported in this position by the International Telecommunication Union in mid-2000. The United States strongly voiced its concern over the issue in a letter allegedly sent by Deputy Secretary of Defense Paul Wolfowitz to EU defense ministers, in which Wolfowitz argued that placing Galileo signals in the GPS military band would imperil NATO's security interests. But this initiative apparently backfired, with the U.S. attempt to influence EU policy bolstering the argument of those officials who regard Galileo as a critical matter of European sovereignty.

Since the EU's official approval of Galileo in March 2002, the United States no longer challenges Galileo's legitimacy. It does, however, continue to seek a resolution to the M-code overlay debate, while working to ensure Galileo-GPS interoperability. This diplomatic game of chicken will eventually be resolved, but predictably, neither side wants to be the first to blink.

The EU's promotion of Galileo as the new global standard for satellite navigation also poses serious questions regarding the future of U.S. industrial policy and technology. The situation today is not unlike that surrounding the development of digital cellular telephony in the late 1980s. At that time, penetration of mobile telephony in Europe lagged significantly behind that in the United States. In response, the European Commission supported the launch of the Global System for Mobile Communications (GSM), which ultimately set the new digital standard. Its widespread adoption is an example of a European government-sponsored initiative overtaking the incumbent's head start.

The United States presently enjoys a de facto monopoly in satellite navigation. Yet as a public entity funded by the Department of Defense, GPS has inherent commercial limitations: meeting the needs of civilian users and convincing other countries to adopt the GPS standard are not the Pentagon's highest priorities. A potential implication of Galileo's deployment could be, as in the case of GSM, the global adoption of a European system for satellite navigation that does not favor and may even discriminate against U.S. industrial and commercial interests.

More than 30 years after the "American Challenge" to Europe announced by publisher Jean-Jacques Servan-Schreiber, ironically, Europeans are responding by proposing a capitalist alternative to America's statist approach to satellite navigation. Of course, between now and 2008, delays common in most space projects could weaken Galileo's technical edge, as would the planned upgrade of GPS. But the challenge Galileo poses to a variety of vital U.S. interests deserves serious consideration.

A report commissioned by the U.S. Congress in 1995 emphasized that it is in "the U.S. interest to see GPS become widely accepted and employed around the world." Today, through lack of focus and funding, the United States stands to lose not only its primacy but even its capability in satellite navigation if it does not rise to the occasion. U.S. policymakers must realize that Galileo will go forward, profitable or not. The EU has the legal right and the technological know-how to build and operate its own system. Pressing the EU to abandon Galileo would imperil other transatlantic interactions and deny users worldwide the considerable benefits of two complementary satellite navigation systems. Instead, the United States should be inspired by Galileo to enhance GPS's capabilities and reform its institutional structure.


In the near term, the United States must demonstrate an enhanced political, technical, and financial commitment to GPS. In response to Galileo's promises of improved technical services, the United States must speed up the funding and launch of planned GPS upgrades and publicize the services it intends to offer. But it must also consider overhauling GPS's organizational structure.

Galileo is positioned to appeal along two fronts: as a civilian infrastructure it can better respond to public demand than can a defense-centered system, and as a strategic capability it can eventually serve the security needs of not one but several allied nations. Strengthening the civilian component of GPS and separating it from its military counterpart would enable GPS to address Galileo's challenge more effectively. One possible scenario would include the partial privatization of GPS to yield two separate systems, one delivering M-code services to U.S. and NATO armed forces ("GPS-M") and another dedicated to commercial applications ("GPS-C"). The two systems could function with relative autonomy as part of the same infrastructure. GPS-C would then have the crucial commercial orientation required to define, develop, and market customer-oriented services. Businesses and consumers, in turn, would value such services enough either to support a fee-charging mechanism or to fund them through tax revenue if there is a clear benefit to American society. GPS-M, meanwhile, would incorporate stronger radio signals from larger satellites, balloons, or high-flying unmanned aerial vehicles to increase redundancy and limit the possibility of jamming.

Jeffrey Bialos, former head of the U.S. delegation for negotiations on GPS and Galileo, has also suggested separating the military and the civilian elements of GPS. In the May 6, 2002, issue of Space News, he advocated "a single new, integrated civil navigation system that incorporates both the modernized GPS under development and Galileo." If merging GPS-C and Galileo is unpalatable to those Europeans who are committed to a sovereign, politically symbolic Galileo, however, the United States could simply build GPS-C into a competing, autonomous, commercially oriented system. This competition would encourage both sides to innovate and ultimately provide better services to users worldwide.

Interestingly, a restructured GPS would also be in a much better position to cooperate with Galileo. Interoperability agreements between the two will be difficult to implement as long as Galileo is oriented toward civilian applications and GPS toward defense. A civilian subset of GPS would align the two systems' commercial objectives of serving users and creating value, thus lifting a serious obstacle to interoperability. And the continued presence of the GPS standard would help ensure that U.S. companies could contribute effectively to satellite navigation's civilian applications.

Increasing the input of key allies in GPS-M, finally, would transform the system from a U.S. strategic asset to a more inclusive facility. Nato is already a significant user of GPS, and responsibility for part of GPS-M could well be transferred to the Atlantic alliance. This expansion of GPS military applications would go a long way toward mitigating the image of GPS as the exclusive tool of the U.S. Department of Defense while shoring up the Atlantic alliance and increasing political support for the GPS program. Of course, this proposal would encounter particular challenges in areas of funding and command and control, especially from NATO members who are strong Galileo advocates. But it could also serve as a catalyst for a broader debate on the interaction between NATO and the EU's emerging autonomous defense capability.

With Galileo, the EU plans to imitate and improve on GPS's functional capabilities. In response, the United States should heed the example of Galileo's commercial orientation. A restructured GPS that provides both an enhanced autonomous civilian entity and a multinational defense capability could more effectively face its new rival without losing its ability to serve vital U.S. strategic, technological, and commercial interests.

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  • David Braunschvig is a Managing Director at Lazard LLC and Adjunct Senior Fellow for Business and Foreign Policy at the Council on Foreign Relations. Richard L. Garwin is Philip D. Reed Senior Fellow for Science and Technology at the Council on Foreign Relations and the author, most recently, of Megawatts and Megatons: The Future of Nuclear Power and Nuclear Weapons. Jeremy C. Marwell is a Research Associate for Science and Technology at the Council on Foreign Relations.
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