The U.S. space industry is about more than just space exploration. It is a source of innovation that helps drive the global economy, with revenues of about $330 billion in 2014. From satellite communications, GPS receivers, and geospatial imaging to weather forecasting and national security, space goods and services are integral to U.S. economic competitiveness and security. And U.S. entrepreneurs are creating exciting new capabilities, from lower cost launch vehicles for sending cargo into orbit to fleets of small satellites that continuously observe the Earth. In-orbit satellite servicing can repair costly government satellites and the ability to mine asteroids and lunar surface for resources can reduce the cost of sending supplies from Earth.

The 1967 Outer Space Treaty requires all signatories, including the United States, to provide “authorization and continuing supervision” for all of their space activities. For private U.S. companies, this typically means that they must get a federal license to operate in space. For example, the Federal Communications Commission (FCC) issues licenses for the operation of communications satellites. Launching into space or reentering the earth requires permission from the Federal Aviation Administration (FAA), and the National Oceanic Atmospheric Administration (NOAA) oversees licenses for remote sensing satellites that take high precision images of the Earth.

However, the emergence of new private space capabilities has revealed gaps in current U.S. law and regulations. For example, there are today no clear governmental authorities for licensing most in-orbit operations, such as satellite servicing, or private research or tourist facilities in space. Similarly, there is no clear international process for recognizing private claims of space resources or mechanisms to coordinate the removal of space junk, as even a small scrap of metal is the property of some nation. The United States has clear rules controlling the export of sensitive space technologies on Earth, but lacks clear rules for private sector operations in space. This has caused some countries, such as Russia, to question whether private U.S. space companies are being supervised properly as required by international law.

A rocket carrying an X-ray astronomy satellite, February 17, 2016.
Kyodo / Reuters

The United States can and should create a supportive regulatory regime for commercial space activities, but at present there is no clear, central authority for doing so. The State Department does not have the right technical capabilities, while NASA and the Department of Defense already have demanding space responsibilities and are not regulatory agencies. It would be difficult to add new missions to the FCC and the FAA that fall outside of their core responsibilities—communications and aviation, respectively. Furthermore, most government departments and agencies are customers of commercial space goods and services and not well suited to dealing with the increasing diversity of private space activities. The most logical place for the oversight and promotion of space commerce is the Department of Commerce.

During the administrations of Ronald Reagan and George H.W. Bush, the Commerce Department created an Office of Space Commerce to coordinate the promotion of commercial space activities across the department, from industry analysis and trade promotion to regulatory reform and international trade agreements. The office also represented the space interests of the Commerce Department, such as weather satellite programs and the White House-level National Space Council. The office helped streamline post-Cold War export controls for space technologies, created a new license process for commercial remote sensing satellites, helped negotiate international trade agreements for launch services, and led the first space trade mission to post-Soviet Russia.

Later administrations were less interested in commercial space and the office was downsized and moved lower in the bureaucracy where it became less effective. One might suspect that today, senior levels of Commerce would say that commercial space is not a priority for them because they have not heard from the space industry that it should be. But in turn, industry is naturally wary of regulation and is focused on its business problems rather than issues relating to the national economy or international competitiveness. As a result, the United States lacks a cabinet-level department with a clear mission and resources to promote the interests of the rapidly changing U.S. commercial space sector.

As for the international space community, it has made progress in the creation of voluntary technical guidelines for mitigating the creation of so-called space junk. Now space launchers create less debris when sending satellites into space and there are effective rules in place for disposing retired satellites. Unfortunately, there has not been similar progress on removing or reducing debris already in space. But for several years now, the UN has been working to create voluntary guidelines to address the “long-term sustainability of space activities” in a more complex and crowded space environment. The UN’s technical discussions routinely include U.S. private sector experts as well as NASA and the Defense Department, but not the Commerce Department.  Commendably, the State Department has reached out to U.S. space industry by inviting representatives from professional and trade associations to serve as private sector advisors on U.S. delegations. But again, there is no central body within the U.S. government that is responsible for overseeing the interests of space commerce.

The Space Shuttle Challenger, November 30, 1982.
NASA / Reuters

Some legal scholars who study the application of international law in space argue for updating the space treaties to deal more directly with commercial activities. The last attempts to do so in the 1970s ended in the failed Moon Agreement of 1979. That treaty sought to create a legal regime of international permits for space commerce, which would have discouraged commercial initiatives. For example, it would have led to the creation of a burdensome international bureaucracy and the profits from private ventures would have been redistributed among the various signatory states, regardless of which country had invested in those ventures. Developing countries also sought space technologies from more advanced countries, which would raise costs and risks while lowering potential gain. Thus, the United States and other spacefaring states refused to ratify the agreement. As a result, the role of private property and private commerce in space continues to operate in a grey area under international law.

A practical approach to addressing international space commerce is the creation of voluntary guidelines, such as those dealing with orbital debris, that are then codified into national regulation. Individual states can thus decide how best to apply international norms domestically. Today, for example, one of the FCC’s conditions for granting a U.S. satellite communication license is proof that the satellite can be properly disposed of at the end of its life. These disposal requirements come from the voluntary guidelines developed through the UN.

Internationally, the United States is doing better than many of its competitors in some areas of space commerce and is lagging in others. The United States lost international market share for commercial space launches for many years, but U.S. firms like SpaceX are changing that dynamic. The United States took the lead in developing the commercial remote sensing and satellite navigation industries and its European and Asian competitors have not kept pace. U.S. entrepreneurs are also creating new services like in-space satellite repair and private space facilities for research and tourism, but it’s too soon to say if they will be successful. What is certain is that the interests of the U.S. commercial space industry will be served by stable and supportive international rules that promote (rather than hinder) innovation and economic growth.

As has always been the case, the pioneers, not the late adopters, get to create and shape the rules. U.S. leadership in building international norms and practices is a crucial element to retaining its strategic advantages in space. The United States needs to strengthen and focus agency roles and responsibilities in space commerce domestically and take the lead in setting international norms for the use of space. Doing so is vital to U.S. economic and security interests. The Department of Commerce has been relatively silent on space policy discussions and the current ad hoc approach to responding to new private space initiatives is untenable if we are to remain a global leader. It is time to treat space commerce as a key part of U.S. competitiveness and to align federal responsibility and resources with new commercial opportunities in space.

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  • SCOTT PACE is Director of the Space Policy Institute at the Elliott School of International Affairs, George Washington University. He was the Deputy Director of the Office of Space Commerce in the U.S. Department of Commerce during the George H.W. Bush administration.
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