A panel at Space Access ’05 discussed policy policy and related issues. From left: George Whitesides of the National Space Society, Jim Muncy of PoliSpace, Henry Vanderbilt of the Space Access Society, and blogger Rand Simberg. (credit: J. Foust)

Entrepreneurial space and policy

by Jeff Foust
Monday, May 16, 2005

Editor’s note: second of a two-part report. Part one was published last week.

For nearly as long as there has been an entrepreneurial space industry, there has been griping and grousing about regulatory issues, as well as lobbying for legislation to resolve those flaws. Complaints about the lack of a streamlined approach for commercial ventures to obtain government permission for a launch led to the Commercial Space Launch Act in 1984 and the Commercial Space Launch Act Amendments four years later, establishing the licensing system under the Department of Transportation still in use today. Complaints by developers of RLVs in the late 1990s that the government could license launches but not reentries provided some of the impetus for the Commercial Space Act in 1998—just in time for the business plans of the planned customers of those RLVs to fail, taking the vehicle developers down with them.

What emerged from that collapse was a new market for commercial suborbital spaceflight, centered on space tourism, and new concerns about regulatory issues, including the question of whether a manned suborbital vehicle would be considered a launch vehicle or aircraft for the purposes of licensing versus certification. This concern, shared broadly but not universally by suborbital vehicle developers, spurred the passage late last year of the Commercial Space Launch Amendments Act (CSLAA), which removed any regulatory uncertainty about such vehicles.

With the CSLAA now enacted, you would think most space entrepreneurs would breathe a sigh of relief and move on to the issues of raising money and building flight hardware. Indeed, while many companies are doing exactly that, there are still plenty of legislative and regulatory concerns that these companies have, concerns that they shared with attendees of last month’s Space Access ’05 conference in Phoenix.

Life after CSLAA

Getting the CSLAA passed by Congress last fall turned out to be a pleasant surprise for entrepreneurial space advocates. While the bill initially breezed through the House in the spring of 2004, it became bogged down in the Senate over debates regarding definitions and, later, the level of safety to passengers. On several occasions the legislation was written off as dead, only to be resuscitated by the efforts of advocates and Congressional staffers alike. After a final cliffhanger in the Senate, the bill was approved hours before the Senate, and Congress as a whole, adjourned for the year.

That last-minute approval caught even insiders by surprise. “I had gone home. I thought it had failed,” said Tim Hughes, counsel for the House Science Committee and one of those staffers who helped draft and promote the bill. Hughes credited the passage of the bill on the successful flights of SpaceShipOne, which raised awareness of the commercial suborbital spaceflight industry among members—an ironic development, considering Rutan’s opposition to provisions of the legislation—as well as the bipartisan support the bill enjoyed. Hughes in particular noted the efforts of Rep. Tom DeLay (R-TX), the House Majority Leader, and Sen. Harry Reid (D-NV), now the Senate Minority Leader, for providing the final push to get the bill through their respective chambers during the lame duck session after the November 2004 election.

Those in the suborbital industry are generally pleased with the CSLAA’s passage. “Dealing with the regulatory process is like gardening, and last year we harvested a big crop,” said Jeff Greason, president of XCOR Aerospace and one of the strongest advocates for the CSLAA. “I personally can’t tell you how relieved I am that I do not have to spend a lot of my time dealing with Congress over the next few years. That’s going to be a huge load off my back.”

However, just because the CSLAA is now law doesn’t mean that companies will not spend any time dealing with regulatory issues. “The regulatory process never stops,” said Greason. “Every couple of months there’s a new guideline, a new rulemaking, or the revision of an old one, and you have to watch these things every minute.” While he said the FAA is open to listening to the needs of the industry, “they can only listen to us if we talk to them.”

Among those regulatory issues are regulations dealing with the crew and passengers of suborbital vehicles, as well as the new experimental permit authority granted to the FAA’s Office of Commercial Space Transportation (AST) in the CSLAA. The bill requires AST to issue a notice of proposed rulemaking on those issues one year and final regulations 18 months after the bill’s enactment. As an additional incentive, the CSLAA would prevent AST from issuing any launch licenses if such regulations are not in place in three years.

One person keenly watching the development of those regulations is Chuck Lauer, director of business development of Rocketplane Ltd. His company’s current plans call for beginning a series of test flights in the latter half of 2006, presumably under an experimental permit—around the same time AST is supposed to publish final regulations regarding such permits. “Our schedule is tracking pretty much exactly with their rulemaking schedule, and it’s always a little dicey when that’s the case,” he noted. “We’re the first, please be gentle with us.”

The regulatory work also continues for those, like XCOR, that have received launch licenses. Greason noted that the license the company received a year ago included five unspecified terms and conditions that were “not conducive to commercial operations.” Greason said that four of those issues had been resolved with AST and they were working on the fifth.

Armadillo Aerospace, on the other hand, does not have a license but has regulatory concerns of its own. Armadillo’s test flights have to date operated under the “amateur exemption” to licensing regulations, which permit unlicensed launches that meet certain criteria, including a burn time of 15 seconds or less. Armadillo founder John Carmack said he has heard rumors that this exemption may be under review, with criteria like the 15-second burn time limit to be reviewed and perhaps revised. “If that’s changed for an arbitrary reason without any evidence of safety problems, I’d be really upset, because that’s a number we’re actually pretty happy with,” he said. “We’re hoping the 15-second thing goes away, but we’d be kind of unhappy if it was traded for a significant reduction in total impulse.”

Other initiatives

While refining launch regulations got a good deal of attention at Space Access, it is not the only policy issue that the entrepreneurial space community is focused on. Several other issues have attracted attention, foremost of which is arguably export control regulations, or International Traffic in Arms Regulations (ITAR), under which launch vehicles and other space hardware lie. This issue has tripped up a number of space companies, including Burt Rutan’s Scaled Composites, which is limited under ITAR at the present from discussing the technical details of its SpaceShipTwo vehicle with its customer, UK-based Virgin Galactic. (See “Two scenarios and two concerns for personal spaceflight”, The Space Review, April 25, 2005.)

“ITAR is a royal pain in the ass for entrepreneurs,” quipped Lauer as he started a presentation during the conference. As he did so, he noted that ITAR prevents his company from sharing technical details with foreign nationals unless such information is already in the public domain. Then, half jokingly, he zipped through a 277-slide PowerPoint presentation from the company’s recent preliminary design review for its XP vehicle; ostensibly putting in the public domain, but shown at a speed far too fast for anyone to digest. In a later presentation, Space Frontier Fourndation co-founder Rick Tumlinson was blunt: “We have to kill ITAR.”

Fortunately for entrepreneurs and advocates, there is evidence that ITAR, while unlikely to be killed, could be modified to benefit the industry. The House Science Committee’s Hughes noted that the chairman of the space subcommittee, Rep. Ken Calvert (R-CA), also serves on the House Armed Services Committee, which has oversight on ITAR-related issues. “We are really just coming up to a basic understanding of ITAR on our committee,” Hughes said. “It is now on our radar screens; it wasn’t before. It is the next hurdle over which we have to jump.”

Another hot topic for this community is what is known as “operationally responsive space” (ORS), an Air Force effort to develop space systems, including launch vehicles, that can launch payloads into orbit much more rapidly than existing systems—on the order of a week or even a day after being called up. The best-known ORS-related effort to date has been Falcon, an Air Force/DARPA initiative to develop a small launch vehicle capable of launching satellites of up to 450 kilograms into orbit. Three of the four companies that received Phase Two Falcon contracts are small, entrepreneurial ventures: AirLaunch LLC, Microcosm, and SpaceX. (The fourth is Lockheed Martin’s Michoud facility, a business unit better known for manufacturing space shuttle external tanks than launch vehicles.)

In a conference presentation, as well as in a two-page memo distributed to conference attendees, Jim Muncy made the case for supporting Falcon and other ORS programs that could benefit new space ventures. One proposal is to increase funding for Falcon in the 2006 budget proposal from $24 to $34 million, an increase that would allow the Air Force to pick two or even three of the current Falcon teams to proceed to the next phase of the program.

A second proposal deals with a separate ORS program, called Affordable and Responsive Spacelift (ARES). This program’s long-term goal is the development of a two-stage launch vehicle that features a reusable suborbital first stage and an expendable second stage that can carry into orbit payloads much heavier than a Falcon-class vehicle could support. Initially ARES will fund the development of a subscale demonstrator by the end of the decade capable of flying up to Mach 7 and perhaps supporting an expendable upper stage that could launch small payloads. Muncy noted that ARES “is not terribly well funded” right now, and that the Air Force could benefit by reaching out to existing suborbital vehicle developers. “Some of us are asking Congress to remind the Air Force that this new industry offers unique creativity and leverage for ARES,” Muncy wrote in the memo.

A third role for ORS among entrepreneurs is the development of new technologies that could benefit both ORS and commercial ventures. The Air Force Research Laboratory is considering a program called the ORS Technology Enterprise Partnership (ORSTEP) that would fund technology development programs between the Air Force and industry. Muncy said that several members of Congress, including Rep. Dana Rohrabacher (R-CA), are proposing including $5 million for ORSTEP in the 2006 budget.

Not surprisingly, some commercial space advocates have come up with innovative policy concepts that could benefit the industry. At the conference both Tumlinson and Ed Wright, president of X-Rocket LLC and a director of the Suborbital Institute, discussed a proposal for the government to fund vouchers that could be redeemed by teachers for flights on suborbital spacecraft. A teacher-in-space voucher program funded at $20 million a year, as suggested by Tumlinson, would allow at least 100 teachers a year to experience spaceflight while providing a new revenue stream for suborbital vehicle operators. “It’s a win-win situation,” Tumlinson declared. While no specific proposal has been introduced in Congress yet, Wright said that he has received good feedback on the concept from some members. As he noted, “I haven’t yet met a Congressional office not interested in education.”

Come together, right now

One hurdle to the success of these and other initiatives is that there is no single organization that speaks for the entrepreneurial space industry in general. Larger aerospace lobbying groups devote little attention to the needs of small companies like these. The Suborbital Institute was established a few years ago to act as a trade organization for the suborbital industry but has gotten little traction: five companies, including Armadillo, TGV Rockets, and XCOR, are members, but many other major players are not. A more inclusive Personal Spaceflight Federation, whose members include Scaled Composites and SpaceX as well as Rocketplane and XCOR, was announced earlier this year, but the organization has remained quiet since its unveiling over three months ago.

The need for, and the purpose of, some kind of industry association was a topic of debate during the conference. Henry Vanderbilt of the Space Access Society that the industry came together in support of the CSLAA in a “remarkable way, in a way not seen since the L-5 Society way back when defeated the Moon Treaty.” He warned, though, that “as far as official Washington is concerned, we’ve done it once, and it’s a fluke.” The industry now has some “modest clout” but has to find an effective way to use it.

One problem is that the industry is not united, and its members have been known to engage in verbal sparring with one another at conferences like Space Access. “We need to create a community,” said Tumlinson. “No more trash talk. We’re all doing something important, so let’s build each other up instead.”

“In order to have a trade association, somebody has to step up and lead it, and that somebody cannot be a player, they can’t be one of the participants,” said Greason. “A trade association has to be willing to kick out those who don’t play with the rest of the girls and boys. And there has to be a formal structure that includes the fact that decisions are made by consensus” so that the association is not used by some members against other members, even if that means the group doesn’t take a stand on some issues. “No one has ever stood up an organization like that.”

Greason himself said he would not want to run such an industry because he’s a player in it, and wants to spend less time in the future on policy issues and more on his business. “It’s time for me to focus on my personal greed again and work solely for the interests of XCOR,” he said, “so you have sort of my last pro bono ‘I’m out there doing the pinch-hitting for large segments of the industry’ for a while.”

For all the discussion, though, there was no evidence at the end of the conference that the commercial spaceflight industry was any closer to having such an organization. “Sometimes an association, or the lack thereof, is simply a reflection of the state of the industry,” said Muncy. “Maybe we can’t have an association yet because we really don’t have an industry.”

Jeff Foust (jeff@thespacereview.com) is the editor and publisher of The Space Review. He also operates the Spacetoday.net web site and the Space Politics weblog. Views and opinions expressed in this article are those of the author alone, and do not represent the official positions of any organization or company, including the Futron Corporation, the author’s employer.

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