Last week I took a trip to Washington, D.C., where I had a series of meetings kindly organised by Jean-Luc Bald, the Commission’s space man in the EU Delegation in the capital. It was a very productive visit as each of the meetings provided interesting insight on commercial space development briefly reflected in this post.
Tom Strump, President of the Satellite Industries Association, pointed out that the association sees two areas of major potential growth: earth observation and, more importantly, broadband services. He is confident that the current trend of private investment in the sector, which peaked in 2015, will remain stable; however, it is reasonable to assume that some investors may want to see whether the return from those investments materialises. Despite the potential for commercial space development, federal government and agencies remain fundamental customers for the satellite industry. Tom Strump quite overtly recognises that manufacturing industry prefers to sell to government because profit margins are larger than those obtained through commercial sales.
Frank Slazer, VP for Space Systems at the Aerospace Industries Association, expressed the view that in commercial space one has to distinguish between established players and new entrants. The first category is clearly dependent on government funding, though there have been a number of developments, notably government procurement mechanisms allowing greater flexibility and encouraging competition, that are changing the way in which their businesses are being conducted. The second category is still struggling; they seem to have the money but technology-wise, they are not there yet. In this category there are some space transportation companies as wells as companies exploring novel avenues like asteroid mining.
On space regulation, Mr Slazer, expresses the view that low earth orbit requires a revision of the existing, outdated legal framework. There is a need for space traffic management; responsible behaviour will not solve the problem. Operators need to have the certainty that they can operate safely. A regulatory change should ideally happen with the next Administration.
Joan Sloan, Programme Lead and Space policy Analyst with the Federal Aviation Authority (FAA), explains that the growth of commercial space poses new regulatory issues, some of which FAA is being asked to look into. The increase recourse to small satellites (either for science or for commercial purposes) is bringing with it an increased demand for smaller launchers, which the established launcher industry is not designed to accommodate. Small satellite producers are desperately looking for small launches. The likely increase in launcher and other space activities requires a new regulatory framework. FAA does not have as yet, the formal authority, the money and (quite importantly) the immunity to take this regulatory work forward, although there are proposals to move in this direction.
Sam Scimemi, Director for International Space Station at NASA Headquarters, pointed out that there is quite a lot of confusion regarding the expression commercial space, for which, he admits, NASA is largely responsible. Commercial space for NASA is primarily about human space flight and cargo. 95% of NASA efforts focus on human and cargo commercial transportation and 5% on science and technology developments with potential commercial applications. As the Shuttle retirement neared, NASA’s approach was to seek that ISS be serviced by private companies on fixed fee basis. Sam Scimemi points out that the expression “commercial” is not in the contracts for these services.
Sam Scimemi explains that commercial market development in LEO means bringing the economy in to ground to LEO. There are two dimensions: the supply side (which includes transportation capacity), and demand side (which is about transforming ISS in a National Research Laboratory, the objective being opening-up ISS to non-NASA users). He underlines that the move towards private industry as a supplier of ISS is not going to stop. However, NASA is aware that in this process there are important considerations to factor in: the need to maintain the existing international partnerships and the maturity of the industry to provide services.
Eric Stallmer, President for the Commercial Spaceflight Federation, pointed out that spaceflight industries are a strong vector for the development of commercial space. Investment in this sub-sector is on the rise; however, investors are shopping around, as demonstrated with Firefly (which did not manage to secure critical investment for the next development phase of its Firefly Alpha light satellite launcher). The development of small satellites will generate greater demand for space transportation capacity, in particular small launcher capacity. The proliferation of spacecraft will make space traffic management a necessity.
(Picture from https://washington.org/)