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As Europe contemplates a military buildup, space companies beg NATO to change

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If NATO’s European members are to fully harness commercial-space offerings, the alliance must lower bureaucratic and financial barriers, industry executives say.

Several execs spoke to Defense One about the findings of a recent survey by NATO’s Industrial Advisory Group, which sought input from industry to inform the alliance’s effort to develop a commercial-space strategy by next June’s summit.

Commercial companies face several hurdles while trying to work with NATO, they said, including cumbersome procurement processes, overclassification of information, financial uncertainty and long timelines for contracts, and a lack of protection or insurance if their systems get attacked by adversaries. 

The alliance, which has no orbital assets of its own, relies on contributions from member nations, particularly the United States, and on commercial industry. But if an Indo-Pacific conflict diverts U.S. capacity, NATO could be left in the lurch—a prospect that’s pushing European nations to figure out how to buy from commercial space companies.

The possibility of increased defense budgets and a new, more protectionist U.S. administration is also driving NATO to bolster its own space capabilities. NATO Secretary-General Mark Rutte recently said that alliance members need to spend more on defense, praising President-elect Donald Trump’s push to get European nations to increase their military budgets. 

Ville Meskus, who leads defense-business development at satellite communications firm ReOrbit, is deputy chair of SPACENET, the NATO entity that performed the industry survey.

“Given what’s going on geopolitically, I think industry understands that the funding for defense is not going to come down anytime soon. So having this commercial space strategy now—soon to be in place—it’s very timely. How can we actually make as much benefit from this situation from that perspective as possible?” Meskus said.

But Meskus said it isn’t just about the money; it’s about NATO putting the mechanisms and processes in place to fund and award contracts quickly, especially to startups. 

Many of the recommendations in SPACENET’s report urge NATO to be more flexible. That includes suggestions to build new contract mechanisms that can be tailored to meet the needs of a diverse group of companies, and create financing models that help smaller companies. 

SPACENET’s chair is Philippe Glaesener, senior vice president of space & defence at SES Satellites. He said start-ups know that NATO’s contracting process is so cumbersome it might take a year or two before they see the money, which is way too long for a smaller company to wait.

To fix this, the report said, NATO needs more highways to give out money faster, and should create a centralized access gate for space opportunities. 

Industry respondents told SPACENET that NATO should have something like the states’ Front Door program to onboard companies and deliver contracts faster, said Andy Lincoln, vice president and chief engineer at ViaSat’s global space networks team, secretary of SPACENET.  

Glaesener said another main concern for companies is the possibility of their systems being damaged by a cyber or kinetic attack. Commercial insurance doesn’t cover wartime damage, so industry needs assurances that an attack won’t knock them out of business. 

NATO’s forthcoming commercial strategy will likely shed some light on how exactly the alliance plans to protect commercial systems. Those discussions are ongoing, Glaesener said, but the lack of safeguards keeps some industry companies away from doing business with NATO. 

The Pentagon also had to deal with the issue of protection in its commercial space strategy, which was released this year. In that document, the U.S. opened the door to using military force to protect commercial satellites, and also said the DOD can provide financial help to companies. 

SPACENET’s report recommends that NATO establish insurance for losses caused by military action, define when NATO would step in and defend commercial systems, and determine the types of defensive capabilities that companies should use to protect themselves. 

Generally, the space industry group says NATO needs to develop a hybrid architecture of military and commercial systems so if one system is taken down, NATO can jump to another constellation. The U.S. Space Force has also emphasized the importance of resilience, and started its own program to launch a large number of small satellites into space to distribute capability. 

If NATO fixes its relationship with the commercial industry, it could achieve this multi-constellation network within one or two years, Glaesener said, because recent conflict has created some urgency in the alliance. 

“The geopolitical situation right now, we see that, or industry sees member nations and NATO being very willing to engage very quickly, to actually increase very quickly, I would say, the effectiveness of NATO and member nations to engage and work with commercial actors,” he said. 

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