COMMERCIAL SPACE REGULATION - Harvard Model Congress Europe 2023 - HMC Europe
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Harvard Model Congress
Europe 2023
COMMERCIAL SPACE
REGULATION
By Carson Ezell
INTRODUCTION
In May 2020, astronauts were launched to the International
Space Station (ISS) from the United States for the first time since
2011 (Wattles, 2020). This time, the rocket was not designed by the
government-run National Aeronautics and Space Administration
(NASA), but by Elon Musk’s SpaceX. The launch was monumental
and symbolic of the shift in outer space exploration in the United
States toward the commercial sector.
The past few years have seen an explosion of activities and
significant accomplishments in the commercial space sector. From
SpaceX launches a
2020 to 2021 alone, funding for startup space ventures increased
Falcon Heavy rocket in
from $7.7 billion to $15 billion (“Start-Up Space Update”, 2022). As
2018, which frequently
the frequency and variety of space activities have expanded, United
carries payloads for the
States regulation has struggled to keep up. The lack of existing rules
US government.
Baur, 2018, creates an unclear regulatory environment for the commercial
sector, creating a risk of stifling innovation or causing space startups
to locate themselves in another country. Furthermore, the United
States has international obligations to provide “authorization and
continuing supervision” of space activities within its jurisdiction, and
it risks not meeting these obligations (“The Outer Space Treaty”,
1966).
The House Committee on Science, Space, and Technology is
responsible for regulating space exploration and shaping the
national space policy (“The Space Briefing Book”, 2019). This
committee must ensure that proper frameworks exist for the
governance of all space activities. Questions that once seemed
futuristic, such as who has the right to mine space resources, are now
pressing matters. Above all, it must ensure that these frameworks are
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aligned with America’s values by balancing support for freedom and
innovation with obligations to ensure safety, national security, and a
rules-based international order.
EXPLANATION OF THE ISSUE
Historical Development
The origins of the space race date back to the Cold War when
the United States and Soviet Union’s national space programs paved
the way for the rest of the world. In 1966, NASA’s budget made up
approximately 4.5 percent of the US federal budget—it now hovers
Cost-plus around 0.5 percent (“Your Guide to NASA’s Budget”, 2022). The US
contracting – the also invested heavily in the building of the ISS, completed in 2000.
strategy where Private businesses have always assisted NASA and other agencies in
detailed plans for a their space programs through cost-plus contracting (Kordina,
project are developed 2020). This strategy has led to higher-than-expected spending on
by the government, many projects since private contractors are less accountable for
and then private meeting budgets and timelines due to their separation from the
companies are government.
contracted to Cost-plus contracting is still used today for most U.S.
complete the project government space programs (Kordina, 2020). However, private
with a given budget space companies are increasingly pursuing their own concepts and
and timeline. space activities for commercial profit without government guidance
However, the or contracts, granting themselves more independence. For example,
government also many launch vehicles have been developed entirely commercially,
provides extra including SpaceX’s Falcon 9 or Rocket Lab’s Electron. Today, the
funding when the U.S. government relies on the private sector for its launch capability.
project goes over Other new commercial space activities are starting as well.
budget. Companies such as Axiom Space, Blue Origin, and Nanoracks are
working to develop commercial space stations (“Start-Up Space
Update”, 2022). Virgin Galactic, Space Adventures, and Blue Origin
among others are developing space tourism business models (“Start-
Up Space Update”, 2022). Some companies have attempted to
develop technologies for asteroid and lunar mining, including the
recently founded AstroForge (Wall, 2022).
NASA still plays an important role in spacefaring, especially
scientific programs which may not generate commercial profit. In
February 2021, it landed its Perseverance rover on Mars to search for
life. NASA currently leads the Artemis program which plans to return
humans to the Moon by 2025 and land astronauts on Mars later
(“Start-Up Space Update”, 2022). However, the commercial sector is
becoming increasingly competitive with NASA in terms of
technological capabilities.
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Scope of the Problem
The rapid rise of commercial space poses numerous urgent
questions to Congress about government priorities and regulations.
This committee will explore the government’s flagship space
exploration program, the Artemis program, as well as the current
framework for space regulation.
Artemis Program
Currently, the Artemis program is the flagship NASA-led
initiative to return to the Moon and land humans on Mars. There are
Funding for space several components that make the Artemis missions possible: a
startups grew from super heavy-lift launch vehicle (SHLLV), a crew capsule, and a
$7.7 billion to $15 human landing system (HLS) (Kordina, 2020).
The Artemis program’s SHLLV, which is defined as a launch
billion from 2020
vehicle that can bring at least 50 metric tons of payload into low earth
to 2021. orbit (LEO), is the Space Launch System (SLS) (Kordina, 2020).
Development of the SLS began with the NASA Authorization Act of
2010. It used a lot of legacy designs from the Space Shuttle—the now
retired SHLLV for the Apollo program which brought Americans to
the Moon over 50 years ago (Kordina, 2020).
Over the past decade, SpaceX has developed an entirely new
concept for its own SHLLV, known as Starship. Unlike the SLS,
Starship is a reusable launch vehicle–the first in the SHLLV class.
This can drive launch costs down significantly. The launch price of
an SLS is around $875 million, but launching a Starship may cost
around $100 million, or as low as $2 million when launch volume
increases (Kordina, 2020).
Artemis’s crew capsule, Orion, has been in development for
over a decade. The private sector has also developed crew capsules
that may be compatible with the mission. These include SpaceX’s
Dragon and Blue Origin’s New Shepard.
Unlike SLS and Orion, which were conceptualized by NASA,
private firms were able to bid to design the HLS. NASA is moving
forward with designs from SpaceX, Blue Origin, and Dynetics
(Chatzky, 2021). It will ultimately choose one of these designs as the
HLS for the Artemis III mission, which will return humans to the
Moon. This represents a hybrid approach between entirely
government-designed space equipment and a complete free-market
approach, where space companies design products without any
government contracts.
The Artemis Program reflects the dilemma between cost-plus
contracting and relying on the private sector to develop space
systems independently. Using Starship and private sector systems
would cut costs significantly, but there are several reasons why this
is not the current plan for Artemis. First, there are technical
uncertainties. The Starship is yet to successfully launch, and it will
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not be tested until approved by the FAA after an environmental
impact assessment (Sheetz, 2022). Even if successful, Starship was
operationally managed by SpaceX during development, not NASA,
leaving a lot of technical uncertainty remaining. A failure would be
politically unacceptable, and the lack of oversight would be a
divergence from the norm for national space programs. Second,
abandoning cost-plus contracting for programs such as the SLS
would result in disappointed government contractors and lost jobs—
a politically unacceptable solution for Congresspeople whose
districts include these jobs.
Commercial Space Regulation
The United States has a confusing regulatory landscape for space
activities which involves numerous agencies and regulatory gaps
(Schaefer, 2018). The Federal Aviation Authority (FAA) within the
Department of Transportation (DoT) is responsible for issuing
licenses for launch and re-entry, the Federal Communications
Commission (FCC) regulates the usage of radio frequency bands for
communications satellites, and the Office of Space Commerce (OSC)
issues licenses for remote sensing satellites. The OSC falls under the
National Oceanic and Atmospheric Administration (NOAA) within
Responsibilities for the Department of Commerce (DoC) (“The Space Briefing Book”,
commercial space 2019).
regulation are There are no regulatory agencies responsible for licensing other
shared by the FAA, commercial space activities. In addition, a framework for assessing
NOAA, and FCC. the legality of new space activities has not been established. Although
the United States has made clear that space resource use is allowed,
some space activities, such as on-orbit servicing, may pose national
security risks. For example, satellites used to repair other satellites
on-orbit can also be used to manipulate or disable satellites.
The United States has already established some controversial
policies that many nations argue are illegal under international
treaties (detailed below). The U.S. allows for space resource use, but
some argue that international treaties preserve space as a ‘global
commons to be shared by all mankind, requiring an international
regime to regulate space mining. A similar legal controversy arises
over the establishment of ‘safety zones’ under the NASA-led Artemis
Accords, which may be a form of national appropriation of celestial
bodies outlawed by international treaties (Gilbert, 2021).
The regulation of such emerging space activities presents
numerous challenges to be addressed. First, Congress must clarify
the limits of what commercial space actors are allowed to do in space.
It must consider environmental, economic, national security, and
foreign policy interests. Second, Congress must clarify which
agencies are responsible for regulating emerging and future space
activities. Third, Congress must ensure that these regulatory
agencies are properly funded to carry out their responsibilities.
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Congressional Action
The most important United States legislation related to outer
space is included in Title 51 of the United States Code. The
Communications Act of 1934 (amended) regulates communications
satellites, including FCC authority to issue rules for licensing and
spectrum use (“The Space Briefing Book”, 2019). The Commercial
Space Launch Act (1984) authorizes the FAA’s Office of Commercial
Satellites in low Space Transportation (AST) to conduct payload reviews to authorize
earth orbit have launches and re-entries (“The Space Briefing Book”, 2019). The AST
existing also determines the insurance requirements for launch providers,
commercial equal to the maximum probable loss in an incident. Beyond a certain
amount, the United States indemnifies space operators from large
applications for third-party damages, up to about $3 billion (“Law Provides New
communications Regulatory”, 2017). The Land Remote Sensing Policy Act (1992) gave
and remote the OSC the authority to regulate private remote sensing. Regulating
sensing, but new communications, launch, and remote sensing was sufficient to cover
uses are emerging. all space activities until the recent rise of the commercial sector.
- SpaceX In 2015, President Barack Obama signed the U.S. Commercial
Space Launch Competitiveness Act which had several implications
(United States Congress, 2015). First, it placed the OSC in charge of
promoting the economic growth of the U.S. commercial space
industry. More controversially, the Act directed the President to
promote commercial utilization of space resources. Overall, the act
strongly supported industry over-regulation.
Other Policy Action
In 2020, President Donald Trump signed Executive Order
13914 titled ‘Encouraging International Support for the Recovery
and Use of Space Resources.’ The order proclaimed that “The United
States does not view [space] as a global commons” (Executive Order
No. 13914, 2020).
In 2020, NASA also launched the Artemis Accords, which are
bilateral agreements signed with other space agencies participating
in the Artemis Program. The Accords establish new principles and
clarifications for space governance to create legal frameworks for
operating on the Moon and Mars (“The Artemis Accords”, 2020).
There are a couple of controversial clauses included in the Artemis
Accords:
● “Reinforce that the Outer Space Treaty permits extraction
and use of space resources”
● “Prevent harmful interference with lunar operations by
de-conflicting activities through transparency and safety
zones”
The primary source of international law regarding outer space
is the 1967 Outer Space Treaty (OST). The claim that the OST permits
the use of space resources is often disputed. Article I establishes that
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“the exploration and use of outer space […] shall be carried out for
the benefit and in the interests of all countries”, adding that “[space]
shall be the province of all mankind” (“The Outer Space Treaty”,
1966). The legality of safety zones is also disputed. Article II of the
OST states that “outer space […] is not subject to national
appropriation by claim of sovereignty, by means of use or
occupation, or by any other means.” (“The Outer Space Treaty”,
1966).
IDEOLOGICAL VIEWPOINTS
Conservative View
Conservatives tend to prefer more of a free market approach with less
regulation to let the commercial sector thrive. For example, the
Republican Party Platform calls to stimulate investment and
innovation in technology through incentives, less regulation, and
lower taxes (Republican National Committee, 2016).
Conservatives also strongly support American military
superiority and national defense. They may favor less regulation on
American space businesses which develop dual-use technologies if
there are proper export controls to ensure America’s adversaries
cannot access the technology. Conservatives would support missions
that lead to more national pride. President Trump’s second-term
agenda also included establishing a manned presence on the Moon
Dual use – and sending humans to land on Mars, which are also aligned with the
Equipment which can goals of the Artemis Accords (Trump, 2020).
serve a military
purpose in addition to Liberal View
a peaceful purpose for
commercial or civil Liberals strongly support promoting international
ends. collaboration and diplomacy, and they may be more hesitant to
accept limited regulatory frameworks that compromise America’s
international obligations under the OST. The Biden administration
has also promoted collaboration on space programs, particularly
within the Asia-Pacific region (Si-soo, 2022). Liberals view complete
free market approaches less favorably, and they are more likely to
support a greater number of regulations on space activities. Whereas
all Republicans voted in favor of the U.S. Commercial Space Launch
Competitiveness Act, 130 Democrats in the House voted against it—
only 48 voted in favor (United States Congress, 2015).
Liberals also tend to support more spending on scientific
research. The Biden administration has supported increased funding
for NASA, including a $2 billion increase in fiscal year 2023 to a total
of $26 billion (“Your Guide to NASA’s Budget”, 2022). Liberals may
support cost-plus contracting more than Conservatives because they
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support more government regulation of the market, but whether
government contractors are in a Congressperson’s district probably
plays a larger role in determining their support for cost-plus
contracting.
AREAS OF DEBATE
Expand the Scope of an Existing Office
The OSC is in a natural position to regulate new space activities
because of its responsibility for promoting the commercial space
sector. The American Space Commerce Free Enterprise Act, which
passed in the House in 2018 but never made it to a vote in the Senate,
would have given the OSC the authority to regulate all space activities
beyond the scope of the FAA or FCC (United States Congress, 2018).
A downside to this proposal may be that the OSC is located within
the NOAA, so it is poorly positioned to lead a space regulation
mission with interests across the government, including national
security and foreign policy concerns. A separate bill called the
President Biden commits American Space Renaissance Act, which was introduced in 2016 but
to further space never voted upon, would have instead expanded the FAA’s pre-
cooperation with South launch payload review process to ensure that the intended space
Korean President Yoon activities were in line with United States international obligations
Suk-yeol. under the OST (Schaefer, 2018). The FAA may be better positioned
than the OSC to regulate space activities because of its existing
The Presidential Office of payload review process, but it may also be poorly positioned to lead
South Korea via SpaceNews a regulatory effort with interagency interests
Political Perspectives on this Solution
The above solutions are more aligned with conservative
viewpoints than liberal viewpoints because they involve regulating
all space activities in a minimally comprehensive way by not creating
any new bureaucracy. Rep. Jim Bridenstine (R-OK), who proposed
the American Space Renaissance Act, was later appointed by
President Trump to lead NASA. Existing agencies can also be tasked
with applying more stringent regulations which may be aligned with
a liberal viewpoint, but legislation such as this is yet to be proposed.
Some liberals may also support limited frameworks, especially those
who believe that the space sector should be considered a critical
industry for national security. Liberals generally agree with
conservatives that China is a threatening power, and space is a
critical domain to ensure technological superiority. The commercial
space sector would also support minimally invasive regulatory
frameworks such as these which clarify the rules without inhibiting
space activities and commerce.
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Create a National Space Office
Many elements of the U.S. government have different
interests and programs in space. In 2017, President Trump issued an
executive order to create a National Space Council to guide national
space policy and strategy, but the Council does not have regulatory
authority (Grush, 2018).
Bringing the regulation of all space activities under the same
agency may help to clarify rules and ensure their consistent
application. This new agency may only regulate space activities that
currently fall within regulatory gaps, or it could also regulate
activities currently covered by the FCC, NOAA, and FAA.
A national space office could also bring in actors from the
Department of Defense (DoD) and Intelligence Community (IC) to
ensure that national security concerns are represented in
commercial space regulation. Bringing actors from various agencies
together would help reduce information siloes and ensure that every
element of the government is aware of important space
developments. Requirements could be established for government
agencies that conduct space activities to submit occasional reports
with their plans and ongoing programs to the new office, which could
perform an oversight function.
Perseverance rover, a Such an Office would ensure better coordination across the entire
NASA project, government for space policy. However, it could also lead to an
conducting scientific increase in administrative spending, bureaucracy, and regulation
research on Mars.
NASA/JPL– Political Perspectives on this Solution
Caltech/MSSS Both liberals and conservatives may be able to support a new space
office at a high level of the government. However, liberals would
support an accompanying regulatory framework that applies a
higher level of scrutiny to proposed space activities. Liberals may
support establishing more factors that can lead to a license
application being rejected, longer review periods to ensure enough
time for scrutiny, and an expectation for commercial actors to prove
they are aligned with international obligations.
Meanwhile, conservatives and free market supporters may
prefer an agency with a smaller bureaucracy, shorter review periods,
fewer factors that can lead to a rejected application, and a
presumption of approval unless there is clear evidence to favor a
rejection (Schaefer, 2018).
Reduce Cost-Plus Contracting
Government agencies could cut spending on space programs
altogether, or they could replace cost-plus contracting with more
purchases of privately developed space technologies. For example,
NASA could rely on launch systems conceptualized by SpaceX, such
as Falcon Heavy and Starship, rather than develop its own SLS via
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cost-plus contracting. Such a solution could be implemented by
extending “buy commercial first” policies to using commercial
solutions whenever they are available rather than developing new
systems (Eftimiades, 2022). There could also be more stringent
standards for when a government agency can use cost-plus
contracting to develop its own concept rather than a commercial
concept.
This solution would increase innovation in the private sector.
Space technologies would also develop more quickly since startups
can afford to take more risks than the government. However,
abandoning cost-plus contracting would result in disappointed
Request for government contractors and lost jobs. Government agencies would
proposal (RFP) – A also have less control over the concepts developed and the direction
document outlining of technological development. This could be partially ameliorated by
the intention to being through increased use of request for proposals (RFPs)
purchase a particular (Cahan and Sadat, 2021). Government agencies must also be
product. Suppliers can cautious of excessive risk taking because of the political
submit a proposal to consequences of failures and misdirected public funds.
fulfill the request. Political Perspectives on this Solution
Cost-plus contracting is more aligned with liberal viewpoints
than conservative viewpoints because it leads to greater government
involvement in planning and implementing outer space activities.
Conservatives would generally prefer a free market, less regulated
approach in which industry drives space development. The
government’s role would be restricted to providing a friendly
regulatory environment and being an end user of products.
Defense contractors would oppose a reduction in cost-plus
contracting since this would lead to less certainty that the
government would purchase their products. However, small
businesses and disruptors to the commercial space industry may
prefer a free market-driven approach because it would increase the
chance that more innovative designs and space products would be
purchased by the government. Traditional government procurement
mechanisms tend to harm innovative space startups (Cahan and
Sadat, 2021).
Restructure the Artemis Program
Artemis requires a substantial amount of funding even though
similar products are being developed by the private sector. In
addition, robotic missions may be able to accomplish the most
critical scientific and defense objectives of the United States, so
human spaceflight investments might be best left to the commercial
space tourism industry.
Congress can launch a review of the Artemis Program to
analyze its necessity or change NASA’s priorities to robotic missions
or more scientific research. More funding for exploration of the outer
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solar system, or research and development for interstellar
exploration, could be effectively used. The funds could also be used
to purchase commercial solutions for similar ends to Artemis, such
as Starship.
The advantage to more commercial reliance for Artemis
would be accomplishing the same tasks more affordably and quickly.
Using Starship instead of SLS would save millions on each launch
and allow for several launches per year (Kordina, 2020). However,
winding down the SLS would be a political embarrassment, create
many disappointed government contractors, and result in lost jobs.
It would also increase technological uncertainties of successfully
completing the Artemis missions—the Starship has not yet been
launched because of ongoing environmental assessments (Sheetz,
2022).
An advantage of eliminating Artemis and redirecting the
funds towards other space programs might be an investment in
programs that have greater returns for science or national security.
However, the Artemis Program also serves as a diplomatic tool for
space governance. Artemis includes the Lunar Gateway, which is an
international collaborative effort. The Artemis program also justifies
the Artemis Accords, which clarify rules for space activities on
celestial bodies in alignment with American foreign policy.
Political Perspectives on this Solution
The Artemis Program generally receives bipartisan support.
Liberals might be more likely to support it because they support
government spending on science and close diplomatic collaboration
in outer space. Conservatives might be more likely to support it for
national security reasons because it advances American space
superiority and achievement. Furthermore, Artemis is responsible
for many jobs in districts, so it may receive greater support from
politicians in states with a strong space sector such as California,
Alabama, and Texas (“Your Guide to NASA’s Budget”, 2022). Free
market conservatives may be opposed to the Artemis program if they
support less cost-plus contracting and a market-driven strategy to
space policy.
BUDGETARY CONSIDERATIONS
Most government funding for commercial space programs is
distributed through contracts with NASA, or other agencies with
space programs such as NOAA. For the fiscal year 2023, the Biden
administrated requested $26 billion for NASA, which is a $2 billion
increase from the prior year. The following are some key items from
the budget (“NASA's FY 2023 Budget”, 2022):
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● About $7.5 billion of the proposal would be directed toward
the Artemis Program. This includes about:
o $1.34 billion for Orion
Lunar Gateway – A
o $2.58 billion for the Space Launch System
proposed space
o $779 million for the Lunar Gateway
station in lunar orbit
o $1.48 billion for the Human Landing System
to support scientific
o $161 million for Mars campaign development.
missions and
● $1.759 billion for space transportation
international
● $224.3 million for commercial LEO development, including
collaboration in the
contracts for a commercial space station
lunar region and deep
space ● $1.437 billion for space technology, including early-stage
partnerships and advanced technology demonstrations
● $7.988 billion for various scientific research efforts
In FY 2022, the OSC had a budget of about $10 million. For FY
2023, President Joe Biden proposed a significantly larger budget of
$87.7 million so that the Office could expand its scope, including
investments in space domain awareness (“FY23 Budget Proposes
$87.7M”, 2022).
The FAA AST presently has a budget of around $25 million.
The National Space Council also has a budget of around $2 million
(Messier, 2019).
CONCLUSION
The commercial space sector is transforming space
development, and whether the United States pursues the proper
frameworks and priorities for space governance may determine
whether it maintains space superiority and sustainability. With the
Artemis program being the flagship NASA program underway,
addressing the future of commercial space must also take the future
of Artemis into account. New space activities are opening up, so
determining the proper authorities and level of regulation is urgently
needed. International treaties, national security, and economic
interests all need to be considered in answering questions of
commercial space regulation. Promoting commercial space brings
the promise of economic growth and innovation, and it may be the
only way to stay ahead. However, it also results in national security
dilemmas, disappointed contractors, lost jobs in districts, and
technical uncertainties.
Regulating commercial space will require balancing interests
and comprehensive solutions. The solutions outlined above are some
options to consider, individually or in combination with one another.
However, these are not the only solutions you should consider.
Creativity and new ideas are essential as United States-based entities
venture into a new domain.
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GUIDE TO FURTHER RESEARCH
Reports issued by the US government or think tanks can
generally be considered high quality and be indicative of policy
experts’ current thinking. Think tanks with a strong focus on space
include the RAND Corporation, the Atlantic Council, and the Center
for Strategic and International Studies (CSIS). Non-governmental
organizations such as the Open Lunar Foundation and Secure World
Foundation provide insightful studies on principles for space
governance. Space.com and SpaceNews.com provide trustworthy
and informed journalism on recent updates related to space policy,
space exploration, and astronomy. BryceTech has several reports on
the current state of the commercial space sector. When conducting
further research, ensure you are reading about both space policy and
developments within the private commercial space sector.
GLOSSARY
Cost-plus contracting – the strategy where detailed plans
for a project are developed by the government, and then private
companies are contracted to complete the project with a given budget
and timeline. However, the government also provides extra funding
when the project goes over budget.
Dual use – equipment that can serve a military purpose in
addition to a peaceful purpose for commercial or civil ends.
Lunar gateway – a proposed space station in lunar orbit to
support scientific missions and international collaboration in the
lunar region and deep space.
Request for proposal (RFP) – a document outlining the
intention to purchase a particular product. Suppliers can submit a
proposal to fulfill the request.
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