On August 14, 2025, SpaceNews published the executive summary of this occasional paper: “Proxy wars in a space-serviced world: gaming satellite-assisted terror in the Middle East.”

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Before America’s dramatic bombing of Iran’s nuclear facilities, the Middle Eastern conflict the Pentagon was most pre-occupied with protecting shipping in the Red Sea against Houthi missile and drone attacks. In that campaign, both China and Russia supplied satellite imagery that helped guide Houthi missiles.

This is a real-world point of departure for the attached war game report, “Proxy Wars in a Space-Serviced World.”

The game simulated a renewed escalation of Houthi assaults against commercial shipping and a Saudi-flagged vessel in the Red Sea. The game culminates in the Houthis targeting the Saudi Crown Prince’s and Defense Minister’s private jets and Saudi Arabia attacking an Iranian port. A major game complication was the players’ inability to identify which country’s or private company’s satellite services may have helped guide the Houthi missiles.

In the attached after-action report, three key findings are spotlighted:

1. 1. Washington needs mechanisms to respond rapidly when allies allege satellite-based services enabled hostile attacks; the absence of meaningful response could prompt allies to pursue alternative space partnerships.
   2. Because too many commercial firms are in denial that bad actors could hijack or target their services to attack American assets and friends, the U.S. should clarify guidance on liability, indemnification, and wartime compliance expectations.
   3. While the U.S. government has useful, well-established licensing requirements and shutter control for commercial space imagery services, similar authorities for satellite communications are inadequate.

NPEC’s war game concluded before Iran could react to Saudi Arabia’s missile attack on the Iranian port of Bandar Abbas. Escalation, though, seemed likely. Missing throughout the game were effective mechanisms to coordinate intelligence sharing and direction between the U.S. government and commercial space providers.

As always, I’m curious to get your take.

 

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August 13, 2025

Edited By: Henry Sokolski and Caitlyn Collett

Proxy Wars in a Space-Serviced World:

A War Game After-Action Report

 

It is now U.S. policy to maintain military space superiority and to be the world’s leading commercial space power. This will require more than just augmenting America’s commercial, civil, and military space programs and protecting them against military attacks. In addition, the United States must be prepared to help friends and allies when they think they’ve been targeted with the help of satellite-based services and intelligence. The United States does not yet have policies, laws, or mechanisms to lend such assistance. If the United States fails to correct this, aggrieved and threatened states will likely take their business elsewhere, jeopardizing America’s military and commercial command of space.  

NPEC’s most recent war game puts a spotlight on each of these points. In the game, the Houthis attack Saudi Arabia with missiles. Riyadh believes that communications and imagery intelligence – possibly provided by private space firms, Russia, or China – supported these attacks. Riyadh immediately asks the United States for intelligence on who provided this support and for the United States to retaliate militarily against Iran. Finally, Riyadh considers suing Western commercial satellite service providers and asks these firms to turn off their services in the region. The United States is unwilling to honor most of these demands, resulting in Saudi Arabia turning to China and Israel. Riyadh also asks North Korea to provide it with missile technology. Washington is unable to control the war’s escalation.  

This prospect is worth avoiding.

Private satellite service firms have generally resisted regulations and requirements that would increase the cost of their products. They certainly don’t want to be held legally liable for malign use of their systems, but they also don’t want to spend money or share customer data to protect against such misuse. 

The future of their customer base, however, increasingly will depend on assuring the customer that the product will not be hijacked against their interests. This would require commercial firms to harden and protect their systems and agree to new shutter control mechanisms. It also would require them to work with countries on intelligence-sharing matters and sort out indemnification and liability coverage for wartime damages to company assets and their products’ malappropriation. If commercial firms attended to these matters, it should draw more customers to American and allied space services who would be wary of using less protected alternatives. 

The game’s specific findings are as follows: 

1) Washington needs mechanisms to respond rapidly when allies allege satellite-based services enabled hostile attacks; the absence of meaningful response could prompt allies to pursue alternative space partnerships.

If Washington intends to command space commercially and militarily, attributing attacks against U.S. space assets is essential. These same mechanisms could also help to investigate strikes against allies that may have been enabled by satellite-based services. 

Countries subjected to attack will focus not just on who launched the weapon, but on what space-based capabilities may have enabled the strike. This much was demonstrated by this game. After the Houthis’ initial attack on Mohammed bin Salman’s personal jet, Saudi Arabia considered suing “suspect” U.S. and European commercial space firms and demanded they immediately cease services in the region. It is likely that other nations that could suffer similar attacks would make similar demands. Saudi Arabia also demanded that the United States attack Iranian ground targets or Iranian satellites (Khayyam). In the game, the United States refused to take direct military action, but did offer Saudi Arabia American jamming systems to prevent future attacks. Saudi Arabia was dissatisfied with this answer and reached out to both China and Israel for assistance.  

The United States needs to be ready for such contingencies. Nations friendly to the United States, if attacked, may ask for immediate support. Their requests could include having the United States hit enemy targets on the ground or in space, pass on intelligence on who might have supported the attack with space services, temporarily disable suspect satellite services, and stand down U.S. and allied-based potentially compromised satellite services temporarily. Whether allies make these demands or not, being in a position to accommodate them will increase U.S. space influence and power. 

Recommendations:

1. 1. Although China and Russia export satellite jamming systems, the United States exports much less. As demand for these systems and ground-based laser dazzlers increase, the United States will want to revisit its current restrictive export policies. Not only to be in the market to control it, but to expand America’s market. 
   2. It would be worth analyzing and gaming with allies how passive and active defense investments may afford more protection against increased uncertainties than the deterrence afforded by offensive threats to retaliate militarily. The United States already does this as an arrangement with the Five Eyes; it will want to have an entry-level version of such an arrangement with developing nations.
   3. The United States Trade Representative and State Department should engage with European Union, Japanese, South Korean, Australian, and Indian counterparts on the implementation of their draft space laws to avoid divergence in liability, cybersecurity, and transparency requirements.
   4. Consider using the Space Information Sharing Analysis Center to promote cyber and space integrity, disclosure hardening, indemnification standards to reduce misuse and misappropriation. Currently, the entry fee for membership to this center is quite high and prevents smaller firms from participating. The U.S. government should consider subsidizing these fees to assure broader industry engagement. 
   5. The U.S. government should publish a list of private space service providers that it has certified can quickly determine if their data has been compromised and are comfortable sharing relevant customer data with U.S. government counterparts. This would not only be good for America’s security, but for business and limiting lengthy service disruptions. 

 

2) Because too many commercial firms are in denial that bad actors could hijack or target their services to attack American assets and friends, the U.S. should clarify guidance on liability, indemnification, and wartime compliance expectations.

In the game, the Commercial Satellite team deflected culpability for the possible use of their satellite services in the Houthi attacks. Currently, U.S. policy provides commercial space service providers with little guidance, protection, or indemnification when private capabilities are implicated in a conflict. Some firms provide space services for the Pentagon and Intelligence Community. Others may not have contracts with the government, but provide services that could be useful to military operations. None of these firms wants to be viewed as lawful military targets and are all equally reluctant to accept service restrictions, client limitations, or obligations to report misuse. Such denial is dangerous. If their systems are implicated in military operations, they may face reputational, legal, or physical consequences they will be ill-prepared to navigate.

If the United States wants to preserve both the strategic utility and safety of its commercial space sector, it must establish clear expectations for how companies should operate in or near conflict zones, and what forms of state support or indemnification, if any, will apply when they comply.

Recommendations:

1. 1. The U.S. government should work with commercial satellite firms to propose clear contract language for national-security-relevant services that includes indemnification terms, obligations to report suspected misuse, and compliance with possible service restrictions in wartime and possible hardening requirements. If legislation is needed, it should be passed. In addition, the Department of Commerce and the Pentagon should develop a public policy to set expectations on how the U.S. military is likely to respond to attacks against  commercial satellite services that could jeopardize U.S. security.
   2. The U.S. government should impose appropriate encryption and hardening requirements on space service firms seeking a U.S. operating license. The government should add mandatory misuse reporting requirements and an agreement to halt services upon U.S. government request. These should be standard license conditions. 
   3. The White House should consider creating an insurance pool akin to the Department of Transportation’s aviation and maritime insurance funds. Currently, no such insurance mechanism is in place. The specifics of how much firms should pay in and what should be covered would need to be clarified.  

 

3) While the U.S. government has useful, well-established licensing requirements and shutter control for commercial space imagery services, similar authorities for satellite communications are inadequate. 

In the game, Maxar and Airbus Defence shut down their services in the region at the United States’ request. There was a legal precedent for doing so under the 1992 Commercial Sensing Act and the terms of their license with NOAA. There was no such shutter control mechanism, however, over Starlink—a communications system useful for military operations. Satellite communications networks, such as Starlink or OneWeb, are just as essential to military targeting, command and control, and offensive operations as space-based imagery. 

These communications systems are increasingly deployed in or near active conflict zones but lack corresponding regulatory oversight, usage disclosure, or geographic restriction protocols. Without such protocols, firms are exposed to legal and physical risk while the government is deprived of controls that would allow it to manage or contain escalation.

Recommendations:

1. 1. Policymakers should assess how existing licensing can be adapted to better manage U.S.-licensed SATCOM in conflict settings. Starlink and OneWeb already need U.S. approval for a satellite signal to be received on U.S. territory, a.k.a. “landing rights,” to operate. The Federal Communications Commission should require all space-based communications services seeking U.S. landing rights to agree to shutter control mechanisms and minimum security requirements (hardening, cyber protection, etc.).
   2. Congress should ask one or more federally funded research and development centers to analyze what “shutter control” might be best for communications systems. Congress and the Executive Branch should act on these recommendations. This study should include an analysis of how private firms might be indemnified for lost revenue where appropriate due to military damages they might sustain.
   3. The Department of Commerce should require quarterly reporting from major satellite communications providers (e.g., Starlink, OneWeb) on who is using their systems and from where. In addition, these firms should be required to provide real-time reports during designated crises.

 

To read the full after-action report, click here.