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As companies work to develop commercial successors to the ISS, an open question is what markets they will serve. (credit: NASA)

The mirage at the core of space commerce, space stations, and other options


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Space commerce is repeatedly described as entering an era of tremendous economic expansion, one where the future is bright. Such assertions are now driven by the explosion in launches carrying humans and satellites into orbit. These satellite constellations and other events demanded a dramatic expansion in the launch capacity from the governments and corporations. SpaceX, with its reliable and less costly launches, is critical for fueling these expansive views of space economics. As other launch vehicles come into service, more launches translate into more satellites entering orbit at lower costs. The problem becomes that these spacecraft may enter a marketplace that is becoming saturated. Whether this situation can be sustainable is the unknown haunting the industry.

Essentially, the analysis here suggests the mirage at the core of space commerce is simply that there is no there there. The various proposals for expanding space constellations are in effect doing the same thing over and over. Transmitting data in some form lies at the heart of most such enterprises, be it telephony, Internet, video, navigation signals, or remote sensing. Newer options are on the way but essentially do the same thing only better.

The analysis here suggests the mirage at the core of space commerce is simply that there is no there there. The various proposals for expanding space constellations are in effect doing the same thing over and over.

All of these options produce a signal readily transmitted to and from Earth from different locations or to other space-based locations for transmittal to final users or locations. Since the advent of Space Age, sending signals of various types has been the product delivered globally. The new systems—Starlink and OneWeb, for example—claim to do so with greater bandwidth to all locations, especially for those formerly isolated from the worldwide communications network. In the 1960s, Intelsat was the first effort at such activities, with some success initially but later superseded by other vendors, both government and commercial. Iridium in its initial iteration was a step farther but failed due to being too costly. The market then was too fragmented and poor to support Iridium’s pricing for telephony. The US Defense Department saved Iridium because of its need for global communications without building dedicated defense comsats to support such diverse efforts. An even more elaborate Internet-focused option, Teledesic, never flew for technological and market reasons. The rise of cellular telephony undercut the more expensive space-based systems. Those cost parameters are now changing, making the new constellations economically viable at least prior to launch. Overcoming the cost differential while providing reliable coverage remains the central task.

However, while the economic case is considered more viable, how many distinct systems are economically competitive is unclear. Being first or at least early is supposed to be effective in terms of economic viability. The difficulty comes if the existing systems are not necessarily compatible, creating a series of stovepipes rather than a global system. You saw that the issue arise initially with satellite-based navigation. The US GPS system competed with the Soviet, now-Russian GLONASS system, so companies built receivers that could accept signals from both. That has now been extended to incorporate China’s Beidou and Europe’s Galileo signals for what are now known as Global Navigation Satellite Systems (GNSS).

These satellite navigation systems are sustainable because governments for assorted reasons have chosen to support such systems, which are available to international audiences. There have been some suggestions that states should mandate a more limited approach. GNSS works on the premise that potential users will employ whichever system’s signal provides the greatest benefit. Some voices have suggested that a state’s nationals should be mandated to employ their signal first and only rarely access others. This would provide economic benefit but squeezes out other systems and their affiliates.

The point is not the implicit mercantilism of such an approach. This is possible because GNSS is built around a signal available to all but one where more accurate signals are restricted to selected users. Such restrictions already exist about providing more accurate and robust signals restricted to national militaries and other selected users. So, even in an arrangement that appears open to all, a competitive advantage can be created. More simply, governments can unilaterally limit what specific signal access is built into navigation devices, creating an unequal playing field. India and China with vast populations present the best case for pursuing such a restrictive or nationalistic approach. Such a two-tier approach commercially reverses the direction the GNSS has taken to this point.

Space activities can facilitate economic growth without question, but future growth may prove more limited. This can be labelled the “Star Trek” economic model. The fictional universe of Star Trek operates in a universe where the vast economic resources are required to support the marvelous technology embedded in the Enterprise and other symbols of a Federation power. (Other shows dip slightly into that grubbier side of space activities.) “Deep Space 9” presented a glimpse of the larger economic reality underlying the Star Trek universe while “Babylon 5” in another setting portrays space commerce. albeit in an abbreviated sense.

Space activities can facilitate economic growth without question, but future growth may prove more limited.

Currently, space commerce is still tied to the movement of packets of information from space to other locations either in orbit or on the ground. The question remains still what exactly will space commerce produce that justifies the cost of being out there in space. Some argue that moving to outer space and the planets is crucial for preserving humanity. This dystopian view sees the Earth as essentially doomed due to human arrogance and lack of control over its worse impulses. The result is global pollution, climate warming, and other injuries to the environment such that the world is poisoned. The last humans should turn out the lights as they depart for more unspoiled environments. There is a cartoon by Wiley Miller in Non Sequitur showing two astronauts standing in a lunar garbage dump saying, paraphrased, “This is full, on to Mars.” The theme being human actions will not change, just the locations. Therefore, space commerce becomes part of that human desire to delay the future, inevitable as it appears.

Space commerce’s understood, but often obscured, reality is that ultimate successful economic exploitation of space as a location has a material dimension, one that is not recognizable in most space commerce endeavors that are focused on better and more efficient movement of information. Space commerce focused on material processing, either manufacturing materials lifted to orbit or resources accessed in space, is the ultimate reality. Mining operations on the lunar surface or an asteroid are often touted as possible economic bonanzas awaiting whoever is first.

The realities of space mining, though, are more problematic than often stated. The costs and difficulties associated with accessing the potential mining sites and processing whatever material is mined becomes an impediment to progress. Are the materials initially processed into usable form for further processing or is it returned to Earth for processing, later possibly returning to space for use?

Space commerce represents the future of human exploitation of space, but one must be clear as to what that means in the short and long term. Short-term goals envision exploiting an existing market such as communications or navigation services. However, this is a short-sighted perspective, one that is inherent in space commerce. The focus remains short term, however, rather than concentrating on long-term processes that engage with the physical reality of space. Otherwise, space commerce will grow but remain essentially Earth bound.

You see that pattern plays out in the continuing struggle to establish a permanent human presence in Earth orbit. The Soviet Union, the United States, and now China have placed independent space stations in orbit. Other states send missions and, in the case of the International Space Station, components to the respective space stations. In all three cases, prestige and national security were the original policy drivers, not any commercial aspect as a prime objective.

The Soviets sent a series of increasingly capable space stations to orbit culminating in the Mir Space Station. The US first space station, Skylab in 1973. was a vestige of the already cancelled Apollo Applications Program to create a space station. After three expeditions to Skylab, the station was abandoned, it entered the Earth’s atmosphere, burning up over Australia. The Soviet Union fell in 1991, but the Mir Space Station continued until 2001 when it was deorbited. The Russian Federation had joined the US-led ISS and no longer had sufficient resources to sustain Mir and contribute to the ISS. The United States in the 1990s flew shuttle missions to Mir, bringing US crew to the station for long-duration missions. US concerns included the unknowns of long-duration space access on the human body.

Construction of the ISS was a drawn-out exercise in assembling the various components designed and built by other states. Construction also was delayed due to the shuttle Columbia accident. NASA Return-to-flight efforts took several years. The ISS was completed in 2011 but the station continually evolves to include new missions and experiments. Regardless, the ISS is expected to be retired and deorbited around 2030 or later; the exact date depends on the physical integrity of the station. Whether a successor space station will be complete or at least under construction is unclear given the uneven and slow development process. NASA now lacks the political energy to put a second ISS in orbit as program leader. The new approach tracks recent programs developing crew and payload access to the ISS through commercial partnerships. Currently, NASA provides startup funding with more to follow, leaving funding the balance to the space station developers. NASA will become a tenant on the new station, not the owner, while investing perhaps 40% of the developmental cost. Commercial vendors will be responsible for developing and operating such facilities. That increases the pressure on the developers to find a revenue source that will justify the costs of developing, building, and operating such an enterprise. The problem central to their dilemma is what size structure to build to meet real or perceived demands.

Microgravity materials processing holds the promise of economic growth but first the products produced must prove an economic or social benefit justifying the cost.

China embarked on its space station program, Tiangong, with a predecessor structure orbited first followed by the current permanent structure. Tiangong became fully operational in 2022 with expansion of the station planned to grow the station from three modules to six, effectively doubling the workspace and allowing more crew on board. Its life span is estimated at 14 years, meaning at some point it would be the only space station in orbit if the ISS replacement program falters. China has opened participation to other states with mixed success. Russia has announced a new space station, although whether that will occur depend on Russian economics and its ability to convince other BRICS states to build modules for the it, effectively mirroring the development of the ISS.

Now, forgotten, the original concept for the US space station envisioned a space station operating in a cloud of free flyers. The space station could provide a place for crew, whose activities would focus on completing tasks sent from Earth such as science experiments including manufacturing projects. This is what occurs on the ISS and Tiangong. The new configuration sees those tasks completed on the free flyers, which minimize vibrations and other impediments that adversely impact experiments of the production of economically valuable goods. The crew can monitor the free flyers, checking for problems and bringing raw materials to production sites. This could also be a backup facility if tourist hotels in orbit appear.

Space tourism has often been cited as the way to the future in space activities. Initially, that reflected efforts to operate launch technologies more safely, efficiently and more frequently. The object of the Ansari X Prize in 2004 was to push development of launch vehicles capable of reaching the edge of space, returning safely, and flying again within an abbreviated time. That goal was accomplished but nothing much happened since suborbital flight was self-limiting. The game change came when SpaceX began launching to LEO with the first stage returning to landing sites on seacraft or launch pads. The effect was to accelerate the effective launch rate with a reduction in price. Space activities, whether civil or military work within an environment where once a task has been accomplished, others can figure out their solution to fulfill the same task. SpaceX Falcon 9 dominates the market (meaning prices came down but not as much as could be expected if there were competitors) but competitors are moving closer to successful launch and recovery.

The space station concepts are built on the assumption that the launch rate will further accelerate, lowering costs of access and operation. This projected change brings the central question into the foreground: can space dwellers ever be self-sufficient or does the situation continue of space activities of necessity supported from Earth and bound to Earth? Space tourism may bring more individuals to space, but their numbers will be limited by the cost. Is a highly stratified space society the goal? Wealthy individuals go to space, the same group who go on safari and mountain climbing. Their presence is transitory, the means for their survival transported them while their money only benefits the operators on Earth.

Microgravity materials processing holds the promise of economic growth but first the products produced must prove an economic or social benefit justifying the cost. Until that potential is tapped, space commerce remains refinements of what happened in the 19th century when the telegraph accelerated the spread of information exponentially. Now, humans stand on the cusp of a dramatic expansion of humanity into space, but the economic underpinning remains fragile. Moving to the next level does not demand immediate access to Mars but the creation of a viable, resilient human space economy.


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