WASHINGTON — The U.S. Space Force estimates it would need more than $4 billion to fund a proliferated low Earth orbit constellation known as MILNET that would provide global communications services, making it the largest item in the service’s fiscal year 2026 “unfunded priorities list” submitted to Congress last week.
The list identifies $3.5 billion for MILNET Block II satellites and $686 million for satellite launch services. According to documents submitted by the Space Force, the funding for MILNET Block II “closes critical capability gaps and provides increased coverage in contested environments.”
The existence of the so-called MILNET PLEO (Proliferated Low Earth Orbit) SATCOM satellite communications program surfaced for the first time in the Trump administration’s 2026 defense budget request with a $277 million budget line to support the development and demonstration of a new, secure, government-operated satellite communications constellation.
However, the program’s emergence has created confusion within industry circles and on Capitol Hill. The allocation coincides with a halt in funding for the Space Development Agency’s (SDA) Tranche 3 Transport Layer communications satellites, which are being built under the Proliferated Warfighter Space Architecture program — the Pentagon’s existing effort to create a mesh network of military satellites in low Earth orbit.
The possibility that DoD was considering ending the Transport Layer program in favor of MILNET triggered complaints from members of Congress concerned that this would shift the Pentagon’s PLEO dollars from SDA to MILNET, which would rely on SpaceX’s Starshield broadband satellites to build a constellation that would be owned by the U.S. Space Force.
Lawmakers raised concerns that replacing the Transport Layer with MILNET would not allow the government to benefit from market competition and would make the Space Force dependent on one company’s proprietary technology.
Pentagon to analyze requirements
Since the release of the president’s budget request, however, the Department of the Air Force has sought to clarify that its PLEO plans are still in flux. “The Department of Defense is conducting an ‘Analysis of Alternatives’ to determine the requirements and architecture for MILNET, to include government-owned and commercial solutions,” a Department of the Air Force spokesperson said in a statement.
MILNET is described by the department as a “future proliferated low Earth orbit satellite communications architecture that will provide global, integrated, and resilient capabilities across the combat power, global mission data transport, and satellite communications mission areas.”
A final decision on this architecture has not been made, said the spokesperson. “We will continue to evaluate a variety of pLEO capabilities, including PWSA Transport Layer, to determine the optimal path forward for enabling diverse data link requirements.”
As part of the Analysis of Alternatives, “we are also investigating communication between different optical crosslinks in order to support a scalable multi-vendor satellite communication architecture that avoids vendor lock.”
Budget lines moved
Further adding to the confusion, the administration’s budget documents state that the $277 million included for the MILNET program were put there by mistake and should instead be included in an existing program known as Long Range Kill Chains.
“Long Range Kill Chains” is a program that encompasses technologies needed to track moving targets from space, also known as space-based Ground Moving Target Indicator. This is a Department of the Air Force program but it’s also a collaboration with the National Reconnaissance Office, which has already started deploying satellites for this effort using Starshield satellites procured under a 2021 contract. If the Space Force opted to buy Starshield satellites for the MILNET program, it would presumably leverage the NRO’s existing contract.
Optical terminals evaluated
Another twist in the program is that the Space Force last year started a separate project to evaluate optical terminals from several vendors that would enable satellite-to-satellite communications to make MILNET interoperable with commercial satcom networks.
The Space Systems Command under a program called “enterprise space terminals” selected CACI, General Atomics and Viasat to develop prototype terminals that would enable on-orbit crosslink compatibility among DoD and commercial satellites.
The Space Force said these enterprise terminals “are a key building block of the broader space data network known as MILNET, which will build a space mesh network for resiliency and information path diversity.”
What unfunded priorities lists mean
The military’s unfunded priorities list is compiled annually by each branch of the U.S. military, as well as certain combatant commands and defense agencies. This list identifies programs, activities or mission requirements that senior military leaders believe are necessary but were not included in the president’s annual budget request to Congress.
Congress has mandated by law that military leaders submit these unfunded priorities lists shortly after the president’s budget is released. The lists are used by Congress as a tool to help decide where to allocate additional funding, should it become available.
Industry implications
With MILNET now a prominent item on the unfunded priorities list, trying to understand the Pentagon’s plans for this program has become “messy,” according to one analyst. The confusion surrounding the program, the analyst said, is also symptomatic of what happens when last minute changes are made to budget submissions late in the process.
The outcome of the MILNET program will have significant implications for the space industry, particularly regarding whether the Pentagon will continue to pursue a multi-vendor approach to satellite communications or potentially consolidate around a single provider’s technology stack. The congressional concerns about vendor lock-in reflect broader policy debates about maintaining competition in the defense industrial base while rapidly fielding capable military space systems.