The Commercial Spaceflight Federation is spreading the word today about a Space Entrepreneurship Forum tomorrow (September 15) that will start at 3:00 pm in 2318 Rayburn House Office Building. A reception will follow at 5:00 pm in 122 Cannon House Office Building. Speakers include George Nield, current head of the FAA’s Office of Commercial Space Transportation; Patti Grace Smith, his predecessor and now a member of the Board of the Space Foundation;, Mike Beavin of the Department of Commerce; John Gedmark of the Federaltion; and George Whitesides of Virgin Galactic (and former chief of staff to NASA Administrator Charlie Bolden). For more information, see the Federation’s website.

President Obama will announce reforms to the U.S. export control system today according to a fact sheet released by the White House. The reforms are “a major step forward in the Administration’s efforts to fundamentally reform the export control system” and “will help strengthen our national security” according to the release.

Included in the reforms are overhauls of the State Department’s Munitions List and the Commerce Department’s Commerce Control List. They will be structured as “positive lists” that describe “controlled items using objective criteria … rather than broad, open-ended, subjective, catch-all, or design intent-based criteria,” which will “end most, if not all, jurisdictional disputes and ambiguities…”

The lists then will be split into three tiers, which the fact sheet explains as follows:

• Items in the highest tier are those that provide a critical military or intelligence advantage to the United States and are available almost exclusively from the United States, or items that are a weapon of mass destruction.
• Items in the middle tier are those that provide a substantial military or intelligence advantage to the United States and are available almost exclusively from our multilateral partners and Allies.
• Items in the lowest tier are those that provide a significant military or intelligence advantage but are available more broadly.

Licensing policies and export enforcement also will change. The White House said that it will continue to work with Congress and the export control community on its longer range goal of combining all of these activities “under a single licensing agency and single export enforcement coordination agency.”

Senator Bill Nelson (D-FL) is introducing legislation “aimed at boosting the commercial rocket industry and attracting thousands of jobs to Florida’s Space Coast” according to a press release from the Senator’s office.

The text of his “Commercial Space Jobs and Investment Act” is provided in the press release. It would give tax breaks to commercial space entrepreneurs and “create up to five regional business enterprise zones around the country as magnets for commercial space ventures….”

NASA wants to buy data from industry on lunar landing technology demonstrations and imagery. The agency is issuing a “Broad Agency Announcement” (BAA) for multiple small firm fixed price contracts with a total value of up to $30.1 million through 2012.

Privately funded entities, like those participating in the Google Lunar X-Prize, could sell NASA data and information “related to landing using a human mission profile; identification of hazards during landing; precision landing; and imagery and long-duration surface operations.”

Twenty-one teams are currently competing in the Google Lunar X-Prize competition, which has its own purse of $30 million for the first privately funded group to land a robot on the Moon, travel 500 meters, and return video, images and data back to Earth. One of those teams, Astrobotic, a Carnegie Mellon University spin-off company, immediately said that it would take NASA up on the challenge.

In case you missed it, here’s a link to the funny and delightful interview of Elon Musk by comedian Stephen Colbert.

The Defense-Industrial Initiatives Group of the Center for Strategic and International Studies (CSIS) released today a report entitled National Security and the Commercial Space Sector: An Analysis and Evaluation of Options for Improving Commercial Access to Space. David Berteau, co-director of the project, said during this morning’s release event that there has been a lot of interest from government in looking at this issue and that the “co-dependency” of these two sectors was not being undervalued.

The report, which builds upon a draft version released last April, includes an analysis of four options – including use of foreign launch providers, and a bigger government role in the domestic launch market – to improve commercial access to space. As related issues continue being debated on Capitol Hill over the use of commercial and foreign space assets, Mr. Berteau explained that the report provides analytical discussion of these options and does not constitute “up front endorsement” of them by CSIS or the authors of the report.

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Brief Introduction

U.S. Commercial Space Policy and NASA’s “Commercial Crew” and COTS Programs|

Commercial Suborbital Launches

U.S. Aerospace Companies

Major Non-U.S. Aerospace Companies

BRIEF INTRODUCTION

The “Space Economy”

As published by the Space Foundation in The Space Report 2011: The Authoritative Guide to Global Space Activity, worldwide space revenues in 2010 were $276.5 billion, an increase of 7.7% over 2009 This annual report from the Space Foundation tracks worldwide spending by governments, the private sector and consumers. According to the report’s free executive summary, this $276.5 billion “space economy” is comprised of the following segments:

• commercial infrastructure and support Industries, 32% ($87.39 billion)
• U.S. government space budgets, 23% ($64.63 billion)
• non-U.S. government space budgets, 8% ($22.49 billion)
• commercial space products and services, 37% ($102.00 billion) and
• commercial space transportation services, less than 1% ($0.01 billion).

Defining “Commercial” Space Activities

What makes a space activity “commercial” can be difficult to define. Some consider a commercial activity to be one in which a private sector entity puts its own capital at risk and provides goods or services primarily to other private sector entities or consumers rather than to the government. Examples of these activities would be direct-to-home satellite television (e.g. DirecTV and DishTV), satellite radio (Sirius XM), and commercial fixed satellites that transmit voice, data and Internet services (such as Intelsat Ltd., SES Global, and Eutelsat).

Other definitions are broader and include sales of consumer equipment by companies even though the satellite system is owned by the government. The chief example of this is the Global Positioning System (GPS) navigation satellite system that is owned by the U.S. Department of Defense, but has a vast array of consumer users ranging from automobile navigation systems to cell phones to precision farming. The devices used by consumers around the world in their cars, on their boats, or carried on their persons are sold by commercial companies, but the satellite signal that makes them work is provided for free by DOD.

Still broader definitions of commercial space activities include those where a company provides services primarily to government customers, such as the Boeing-Lockheed Martin United Launch Alliance (ULA), or remote sensing satellite companies (GeoEye and DigitalGlobe). Others do not consider these commercial because they are reliant on the government for most of their revenue and the government shoulders most of the risk because the government requires the services.

In his National Space Policy issued on June 28, 2010, President Obama defined “commercial space activities” in this manner:

The term “commercial,” for the purposes of this policy, refers to space goods, services, or activities provided by private sector enterprises that bear a reasonable portion of the investment risk and responsibility for the activity, operate in accordance with typical market-based incentives for controlling cost and optimizing return on investment, and have the legal capacity to offer these goods or services to existing or potential nongovernmental customers.

U.S. COMMERCIAL SPACE POLICY AND NASA’S “COMMERCIAL CREW” and COTS PROGRAMS

The government plays a major role in commercial space activities in many ways, from establishing regulatory policy, to creating policies that direct government agencies to purchase services from companies, to contracting for hardware. For example, the government signs contracts for guaranteed data buys from the two commercial remote sensing satellite companies, GeoEye and DigitalGlobe, which enables them to raise the capital needed to build and launch the satellites.

U.S. commercial space policy has been part of national space policy for decades and today is defined by President Barack Obama’s 2010 National Space Policy, which supersedes President George W. Bush’s 2006 National Space Policy. Obama Administration officials reportedly are working on updating two other Bush-era commercial space policies: the 2003 Commerical Remote Sensing Policy and 2005 Space Transportation Policy.

The Federal Aviation Administration’s Office of Commercial Space Transportation regulates and facilitates the commercial space launch business. The Federal Communications Commission assigns radio frequencies and issues licenses for commercial satellite systems.

In his FY2011 budget request, President Obama requested $6 billion over 5 years (FY2011-2015) in NASA’s budget to subsidize companies to develop “commercial crew” launch vehicles and spacecraft instead of the govvernment — NASA — developing such systems. He wanted to cancel the Constellation program, begun under President George W. Bush, to build new launch vehicles (Ares I and V) and a spacecraft (Orion) to take astronauts to the International Space Station in Earth orbit, back to the Moon, and on to Mars. Instead, the President proposed that the United States rely on the commercial sector to build new crew space transportation systems for use in low Earth orbit (LEO). The concept is called “commercial crew.” The President believes it will free NASA to focus on building systems to take astronauts to more challenging destinations beyond LEO, such as to asteroids. NASA would facilitate commercial crew by providing funding to one or more companies.

The proposal was very controversial and was vigorously debated in Congress. The 2010 NASA Authorization Act (P.L. 111-267), signed into law in October 2010, is a compromise wherein NASA is directed to develop a government crew space transportation system as well as fund the commercial crew concept, but at a lower funding level. For more on NASA’s FY2011 budget request, and the request for FY2012, see our Fact Sheets on those topics.

President Obama’s FY2012 budget request for NASA is similarly controversial because the congressional committees that oversee NASA believe that it contravenes the compromise reached in the 2010 NASA Authorization Act. NASA is requesting more money than was authorized for commercial crew and less money than was authorized for NASA-developed systems. The NASA-developed systems, called a Space Launch System and a Multi-Purpose Crew Vehicle in the 2010 NASA Authorization Act, are combined into a category called “Human Exploration Capabilities” in NASA’s FY2012 budget request.

Before the Obama “commercial crew” proposal was announced, NASA already had initiated a program to rely on the commercial sector to take cargo to the International Space Station (ISS). Called COTS (Commercial Orbital Transportation System), it is needed because the Bush Administration decided to terminate the space shuttle program, which was originally envisioned to take both crews and cargo to ISS throughout its lifetime. The last space shuttle missiontook place in July 2011, while the Obama Administration wants to keep the ISS operating at least until 2020. Two companies, SpaceX and Orbital, were awarded contracts to develop cargo spacecraft to service the ISS beginning in 2011. SpaceX conducted the first launch of its Falcon 9 launch vehicle in 2009; a second launch with a test version of its Dragon spacecraft — which is being designed to take first cargo, and, later, crew into orbit — was successful in December 2010. Orbital plans to test its Taurus II launch vehicle and Cygnus spacecraft in 2011. A “gap” of many years will exist between the termination of the space shuttle in 2011 and when commercial services are available. NASA will purchase crew transportation services from Russia during that gap.

In February 2010, NASA awarded contracts to five companies for Crew Transportation Concepts and Technology Demonstration, or CCDEV (commercial crew development). The companies are: Blue Origin, Boeing, Paragon Space Development Corp., Sierra Nevada Corp., and United Launch Alliance. Winners of the CCDEV2 competition were announced in April 2011: Blue Origin, Boeing, Sierra Nevada, and SpaceX.

COMMERCIAL SUBORBITAL LAUNCHES

Suborbital flights that do not go into orbit around Earth, but fly in a high arc and provide several minutes of microgravity on the return to Earth, also are of interest. They are commonly used not only in the United States, but in many other places around the world for experiments that need minutes, but not hours or days, of microgravity. Traditionally, government agencies are the providers of these services, and are also the users along with primarily academic institutions.

Several U.S. companies are interested in providing suborbital launches either for experiments or for sending people into space on a commercial basis. There is no legal definition of where air ends and space begins, but the Federation Aeronautique Internationale (FAI), which certifies air records, uses 100 kilometers as that boundary. In 2004, Burt Rutan’s Scaled Composites won the Ansari X-Prize award for using its SpaceShipOne to send a pilot over that threshold and back to Earth twice within 14 days (different pilots flew the craft each time). Richard Branson’s Virgin Group created a company, Virgin Galactic, to take anyone with the requisite funds (approximately $200,000) on such suborbital flights using SpaceShipTwo, which is still in development. (He also plans on providing orbital flights in the future.)

Other companies also are interested in the commercial suborbital market for experiments, people, or both. On August 9, 2011, NASA announced the selection of seven companies for indefinite-delivery indefinite-quantity (IDIQ) contracts under its Commercial Reusable Suborbital Research (CRuSR) program to provide suborbital launch services for NASA technology experiments. The total value of all the contracts is $10 million. The companies selected are: Armadillo Aerospace, Near Space Corp., Masten Space Systems, Up Aerospace Inc., Virgin Galactic, Whittinghill Aerospace LLC, and XCOR. (Links to the companies are provided below if available.)

U.S. AEROSPACE COMPANIES

Hundreds of companies are involved in the aerospace sector, even when looking only at the “space” part of the business and not aircraft. The following list is not meant to be exhaustive, but to provide links to some of the companies that are most often referenced in discussions about space policy.

The “big three” U.S. aerospace companies are:

• Boeing
• Lockheed Martin, and
• Northrop Grumman

In addition, Boeing and Lockheed Martin co-own

• United Space Alliance, which operates the space shuttle, and
• United Launch Alliance, which conducts launches of the Atlas V and Delta IV launch vehicles

Other major U.S. aerospace companies include:

• Aerojet
• ATK
• Ball Aerospace
• International Launch Services
• Orbital Sciences Corp.
• Raytheon
• Sierra Nevada
• Space Systems/Loral
• SpaceX (Space Exploration Technologies)
• United Technologies (including Pratt & Whitney Rocketdyne)

Major U.S. companies that sell space-related products or services include:

• DigitalGlobe (satellite imagery)
• GeoEye (satellite imagery)
• Dish Network (satellite television)
• DirecTV (satellite television)
• SiriusXM (satellite radio)
• Iridium (mobile satellite telephone)
• Globalstar (mobile satellite telephone)
• Trimble (GPS consumer equipment)
• Garmin (GPS consumer equipment)

Entrepreneurial companies:

• Armadillo Aerospace (reusable launch vehicles)
• Bigelow Aerospace (inflatable space stations)
• Blue Origin (personal spaceflight)
• Masten Space Systems (reusable suborbital launch vehicles)
• Near Space Corp. (suborbital launches)
• Paragon Space Development Corp. (environmental control and life support systems)
• Scaled Composites (personal spaceflight)
• Space Adventures (personal spaceflight)
• Up Aerospace (suborbital launches)
• Whittinghill Aerospace LLC (suborbital launches)
• XCOR Aerospace (reusable launch vehicles)

MAJOR NON-U.S. AEROSPACE COMPANIES

There also are hundreds of non-U.S. companies in the aerospace sector. The following list is not meant to be exhaustive, but to provide links to companies that are most often referenced in discussions about space policy.)

• Arianespace (French, launch services)
• EADS (French-German/European diversified aerospace company of which Astrium is a subsidiary. SpotImage, which provides commercial remote sensing imagery, is part of Astrium)
• Eutelsat (European fixed satellite services)
• Inmarsat (global mobile satellite services, based in the United Kingdom)
• Intelsat (global fixed satellite service, based in Luxembourg)
• Mitsubishi Heavy Industries (Japanese, satellites and in-space platforms)
• SES (European fixed satellite services)
• Thales Alenia Space (European communications satellite manufacturing)

Entrepreneurial

• Orbspace Engineering (personal suborbital spaceflight, Austria)
• Virgin Galactic (personal spaceflight, UK)

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Speaking of what he described as one of the seven pillars of a reformed industrial policy for space at the Department of Defense (DoD), Brett Lambert, Director of Industrial Policy at DoD, said that the former view of a monolithic organism is no longer valid and that “a more nuanced, sophisticated approach to industrial policy” is needed. At a recent event hosted by the George C. Marshall Institute at the National Press Club, Lambert gave the keynote to discuss the future of the space industrial base, with particular emphasis on its implications for national security.

Lambert said that “space is a unique animal” and that many of the assumptions that guide policies in other areas are therefore not valid. Acknowledging on the one hand the budgetary constraints of U.S. engagement in two wars, as well as the fact that “we are where we are” and not facing a clean slate, forces policymakers to look for realistic answers to the problems that continue to threaten an eroding industrial base. Those include the loss of critical skills in an ageing workforce, and the departure of second and third tier suppliers due to a lack of stability and policies that hinder their ability to compete globally.

This competition is not only a result of globalization, but of U.S. policies as well – “a lot of our wounds are self-inflicted,” said Lambert. This realization has spurred recent developments in export control reform, which many agree is one of the areas stunting the growth of the industrial space sector. But one key message of the discussion, underscored by the panel of experts who followed Lambert’s remarks, is that the public-private relationship involved with the industrial base is so profound that reform is needed not only to support the industry, but to benefit the country. Lambert described export control reform as “a very self-interested move” and not a gift to industry.

Far reaching reform will be complex, requiring that balance be struck between priorities in a constrained budget environment. One issue requiring attention is the need to spend more on research and development (R&D) so as to invest in the technologies that will make U.S. companies more competitive in the future. “The national security community is saying that it’s not an ‘either/or’ [situation]” between R&D and supporting ongoing activities, said Vincent Dennis of Deloitte Consulting. Describing this challenge, Hal Hagemeier of DoD’s National Security Space Office said that “the problem is you can’t schedule breakthroughs,” but that at the same time “we do want the ‘Beam me up, Scotty’-kind of technologies.”

Perhaps the biggest challenge is that no one can say for sure how effective reform will be in the short term. There is no data to show that there will be enough markets to sustain U.S. suppliers, or whether, once able to compete, buyers will choose U.S. products as opposed to sometimes cheaper foreign alternatives. The impact of industrial policy reform may only be felt after several years. On this point, Bill Adkins, president of Adkins Strategies, said that while there may not be immediate payoff, “as the technology changes perhaps the U.S. will be ahead” and the investments may bear fruit in the future.

A webcast of the event is available on the Marshall Institute’s website, along with its own summary.

National Security Adviser James Jones yesterday announced plans to create a new single independent agency to handle export controls at a luncheon on Capitol Hill for the Senate Aerospace Caucus. The Aerospace Industries Association (AIA) praised the decision in a press release that summarized the talk, which was also reported by news organizations. This “Single Licensing Agency” will be governed by a board of directors composed of cabinet officials from agencies with export control responsibilities according to reports in the Wall Street Journal and The HIll.

The Government Accountability Office (GAO) issued a report yesterday assessing how export controls in six countries — Australia, Canada, France, Germany, Japan and the United Kingdom — differ from the United States. It also assesses how two proposed Defense Trade Cooperation Treaties, with the United Kingdom and with Australia, will change export controls. The report does not make any recommendations, but notes that the report may help inform U.S. efforts to reform the export control system.