Europe and the US are nearing agreement on ensuring that the Galileo satellite navigation system will operate with - and not interfere with - the US Global Positioning System (GPS).
But negotiations between the US and Europeans in Washington broke down in late January without an agreement on the type of modulation to be used by Galileo.
Uppermost in US thinking are military concerns: it wants to prevent enemies from using public satellite signals to find out where its troops are at a time of conflict.
The EU wants to use a modulation known as Binary Offset Carrier (BOC) 1.5 for the publicly available signal. But jamming this form of signal would also interfere with the operation of US military frequencies, due to be introduced around 2012, the New Scientist reports.
So the US wanted Galileo to use an alternative modulation scheme, called BOC 1.1, instead. But this form of technology provides less accurate positioning information, a possible commercial disadvantage for the Europeans.
Other outstanding questions in dispute include confirmation that the US will not seek to veto future development of Galileo's signals; a "sufficiently strong commitment to non-discrimination in trade" and mutual development of national security criteria for satellite navigation.
That seems like a fair bit of ground to cover, but outstanding differences were downplayed in an official statement on the talks which said that "a number of issues were clarified and for the first time the shape of a possible agreement became visible".
So what progress has been made? Reading between the lines it seems the US has dropped its earlier insistence the GPS alone was enough to meet the needs of users for the foreseeable future. Europe, meanwhile, has agreed to establish a blueprint for the Galileo system that allows for it to be jammed (by the Americans) for military reasons.
Talks to iron-out differences will probably be held in the second half of February, the EU says.
The $3.7 billion Galileo project is designed to deliver highly-accurate (down to the metre range) global positioning services under civilian control. Galileo will involve the launch of 30 satellites and is scheduled to start operating in 2007.
In a separate development, three consortia of companies were today publically selected to participate in the second phase of the project. These groups are the Eutelsat consortium, consisting of Eutelsat, Hispasat, LogicaCMG and AENA; the Inavsat consortium, made up of Inmarsat Ventures, EADS Space and Thales; and a consortium combining Vinci Concessions, Alcatel Participations and Finmeccanica. ®