While I've generally discounted a lot of the Galileo hype, The Space Review today has a very insightful article discussing a different angle on the "arms race" between Galileo and NAVSTAR GPS- the chronograph battle. Essentially their take on it is about the efforts of the Galileo team to build their technology on clocks based on hydrogen masers (Microwave Amplification by Stimulated Emission of Radiation), which yield sub-nanosecond time accuracy, as opposed to the older cesium and rubidium atomic clocks used by the US NAVSTAR GPS effort.
The article mentions that the cost of maser-based technology would add $250,000 to the cost, however USAF and the Interagency GPS Executive Board had apparently rejected masers as too costly. I expect that mass of the units and infrastructure to support the varying technologies may also have some more impact on things as well.
Currently Symmetricom has the contract for the next-generation NAVSTAR birds, to use proprietary "optically pumped cesium beam technology", as opposed to the passive hydrogen maser to be used by Galileo.
Will there be an "chronometric arms war"? I'm still not sure there will. Currently NAVSTAR GPS is adequate for most navigation tasks, and the surveying community has developed solutions like CORS to allow millimeter-level processing of points. Ultimately there may be single-receiver solutions that allow realtime millimeter-level accuracy, but I'm not sure that Galileo alone is the solution or enough of a push.
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