• An outage or loss of GPS satellites is estimated to cost the U.S. military and economy upward of $1 billion a day.
• Pentagon leaders believe that estimate is conservative, leading the U.S. Space Force to kick off a new roughly $2 billion satellite program to build a backup GPS.
• For startup Astranis, one of the four companies selected for R-GPS, the program marks an expansion beyond satellite internet, as it announced its new line of Nexus satellites.

The U.S. Air Force began deploying the Global Positioning System — more commonly known as GPS — nearly 50 years ago, satellites which have become critical infrastructure for both the military and the economy.

Since then, GPS is estimated to have generated more than $1.4 trillion in economic benefits, according to a Commerce Department study. But the agency warned that an "outage could potentially have an economic impact of $1 billion a day." 

Pentagon leaders believe those losses are a conservative estimate, leading the U.S. Space Force to kick off a roughly $2 billion satellite program known as the Resilient Global Positioning System. Called R-GPS for short, the program is intended to provide an alternative, backup network for the current satellite system.

"[GPS is] vitally important to everything we do day-to-day, from the stock market, for timing of every transaction, to the crops we field," Lt. Col. Justin Deifel, leader of R-GPS at the Space Force's Space Systems Command, told CNBC.

"It's like water and electricity. … It's a utility of the economy and a utility of a warfighter that we need to make sure is available," Deifel added.

The importance of the existing 31 GPS satellites in orbit, as well as the potential threat in space from U.S. adversaries like Russia and China, has led the Pentagon to prioritize building the alternative R-GPS network — and the Space Force has turned to the commercial space industry to do so.

Last month, the branch awarded four companies with contracts for R-GPS design concepts: Astranis, Axient, L3 Harris and Sierra Space.

Astranis branches out

For startup Astranis, which launched its first "MicroGEO" spacecraft last year, the R-GPS program marks an expansion beyond satellite internet into the market for positioning, navigation and timing, or PNT, services.

"We've started to see a huge push towards proliferation in higher orbits by the U.S. national security community," Astranis CEO John Gedmark told CNBC. "Now the Department of Defense has recognized all of the fantastic things that we can do in high orbits with a next-generation small satellite approach."

As it expands as a company, Astranis is announcing its new Nexus product line of PNT satellites, its answer for the R-GPS program. Gedmark noted they use the same type of spacecraft as the company's broadband satellites.

Additionally, as R-GPS satellites will operate in medium Earth orbit, like the current GPS constellation, the Nexus product line marks a widening of where Astranis plans to deploy and operate its spacecraft.

The company, having raised $750 million since its founding in 2015, has announced deals for 12 of its internet satellites, 10 of which are expected to launch to geosynchronous orbit by the end of next year.

"We knew pretty early on that this platform that we developed could be used for other missions than broadband telecommunications and the Resilient GPS program has just come along as a perfect example of that," Gedmark said.

Gedmark sees R-GPS as "a multi-billion dollar opportunity," given that Space Force wants to build a full constellation of at least two dozen satellites.

The R-GPS plan

Space Force used a novel Pentagon funding authority, called "Quick Start," to get the R-GPS program going.

In less than six months, the program got approval from the deputy secretary of defense, conducted market research, hosted companies for an industry day, solicited bids and awarded initial contracts — a process the military notes often takes as long as three years for space programs.

"The speed with which they've moved on this program is unprecedented. … We've never seen the Department of Defense move that fast before," Gedmark said.

R-GPS handed out $40 million total to fund the design studies. The companies will have an eight-month "phase zero" period to start their work that ends in spring, SSC's Deifel explained.

"The total current budget, when you think of just recurring engineering costs: We're looking at $50 [million] to $80 million per satellite and procuring upwards of 24 satellites. So the quick math is $1.2 [billion] to $1.9 billion for 24 satellites, over the course of the next five to six years," Deifel said.

While the budget doesn't currently include "non-recurring engineering costs," Deifel said he expects those expenses will be significantly less than the design costs.

Space Systems Command wants to buy and deploy the R-GPS satellites in batches of eight, with the first set launching as soon as 2028.

As the design reviews wrap up, SSC plans to select one or more of the companies to move forward with the program into the construction stages.

While Astranis' first satellite malfunctioned last year due to a third-party issue with its solar arrays, the company's experience operating in the distant geosynchronous orbit has Gedmark confident about its chances in the R-GPS program.

"We are the only company that has proven on orbit a spacecraft of this class — a low cost, [radiation]-hardened satellite for high orbits," Gedmark said.