Second National Space Council Meeting Focuses on Regulatory Reform, China

The White House National Space Council held its second public meeting today at NASA’s Kennedy Space Center, FL.   Spurring new, innovative commercial space businesses and reforming the associated regulatory environment were the main themes, but two of the witnesses honed in on China.  Dean Cheng of the Heritage Foundation and Jeff Manber of Nanoracks expressed opposite points of view on whether U.S. companies should engage with China in commercial space endeavors.

Vice President Mike Pence, who chairs the Space Council, stressed the need to reform regulations that stifle U.S. companies that want to engage in commercial space activities.  Many of the existing regulations are under the purview of the Department of Transportation (DOT) and Department of Commerce (DOC).  At the first Space Council meeting last fall, Pence assigned both of them the task to determine how to streamline those regulations.

Today, the Council approved four recommendations that will be presented to President Trump to do just that.  The bottom line is that DOC would take the lead in government regulation of commercial space activities and work with other agencies to make it easier for U.S. space companies to compete on the global market.

Secretary of Commerce Wilbur Ross said today that DOC wants to create a “one-stop shop” for commercial companies so they do not have to navigate the intricacies of the federal government to determine what agency regulates which activities.  The desirability of a one-stop shop is widely acknowledged, but the debate has been whether DOT or DOC should get the job.  DOC won.

The current roles of DOT and DOC in commercial space activities date back to the Reagan Administration.  At that time, an Office of Space Commerce was created as part of the Secretary of Commerce’s office, and the Office of Commercial Space Transportation was created as part of the Secretary of Transportation’s office.  Over the years, both departments’ interest in space faded and the offices were subordinated.  DOC’s Office of Space Commerce was assigned to the National Oceanic and Atmospheric Administration (NOAA), which manages the nation’s weather satellites, and OCST was made part of the Federal Aviation Administration (FAA).

Ross announced today that he plans to restore the Office of Space Commerce to its place as part of his office under his direct supervision.  NOAA’s Office of Commercial Remote Sensing Regulatory Affairs, which licenses commercial remote sensing satellites, will be merged into it.  That action aligns with legislation approved by the House Science, Space, and Technology Committee last year, but a recommendation approved by the Space Council today would go a step further, directing Ross to develop a legislative proposal to create a new Under Secretary of Space Commerce with responsibility for “all commercial space regulatory functions.”

A top concern is reforming regulation of commercial remote sensing satellites, a topic that has been extensively debated over many years.  The law that governs those regulations was enacted in 1992 (repealing and replacing an earlier law enacted in 1984), a lifetime ago in technological terms as well as in the number of countries and companies that now offer high resolution satellite imagery.  The current process is widely considered to be broken, giving DOD too much authority to stop a license application indefinitely and without explanation.  Today the Space Council adopted a recommendation that DOC propose legislative changes to “further enable the rapid, efficient, and predictable permitting of commercial remote sensing satellites” by July 1, 2018.

Ross also said he will direct DOC’s offices overseas to actively recruit space businesses to locate in the United States and wants to increase DOC’s role in spectrum policy and export controls related to commercial space.

The National Telecommunications and Information Agency (NTIA) is part of DOC and assigns radio spectrum to government users. The Federal Communications Commission (FCC), an independent agency, does the same for non-government users.  Spectrum is a limited natural resource and the burgeoning demand for spectrum to enable terrestrial mobile services has created a battle not only between terrestrial and space-based companies, but between government and commercial users.  Ross wants to augment NTIA’s role in developing spectrum policy that supports commercial users while responding to the needs of DOD and other government agencies.  That would include his own NOAA, which is trying to protect frequencies needed for the GOES weather satellites.

DOC shares responsibility for export controls with the Department of State, which works closely with DOD.  After years of effort, major changes were made to International Traffic in Arms Regulations (ITAR) regime during the Obama Administration, shifting many satellite technologies from the State Department’s U.S. Munitions list (USML) to the more permissive Commerce Control List (CCL) under DOC’s control.  The commercial sector continues to seek more relaxation of export controls and Ross wants to relook at what is needed.  The Council adopted a recommendation directing Space Council Executive Secretary Scott Pace to conduct an export control policy review by January 1, 2019.

DOT would retain its responsibility in licensing commercial space launches and reentries.  Secretary of Transportation Elaine Chao did not attend the meeting today.  Her deputy, Jeff Rosen, explained actions DOT has taken since the last Space Council meeting.  He reported that DOT’s goal is to create a “file and fly” regulatory framework to reduce the burden on commercial space launch companies.   The Council adopted a recommendation to revise the licensing regime by March 1, 2019.

National Security Adviser H.R. McMaster and Acting NASA Administrator Robert Lightfoot also updated the Council on their actions since the last Council meeting and Neomi Rao, Director of the Office of Information and Regulatory Affairs (OIRA, part of the Office of Management and Budget) explained how her office can assist in streamlining regulations that involve multiple agencies.  The focus today, though, was DOC.

Other Council members or alternates who attended the meeting were Kirstjen Nielsen, Secretary of Homeland Security; Tom Fossert, Assistant to the President for Homeland Security; Patrick Shanahan, Deputy Secretary of Defense; Sue Gordon, Principal Deputy Director of National Intelligence; Gen. Joseph Dunford, Jr., Chairman of the Joint Chiefs of Staff; and Deputy U.S. Chief Technology Officer Mike Kratsios.

The Council also heard from two panels of witnesses.

Securing the Next Frontier

• Dean Cheng, Senior Research Fellow, Heritage Foundation (although he said his remarks were his own)
• Jeff Manber, CEO, Nanoracks
• Bhavya Lal, Research Staff Member, Science and Technology Policy Institute, Institute for Defense Analyses

Entrepreneurship on the Next Frontier

• Eric Stallmer, President, Commercial Spaceflight Federation
• Kevin O’Connell, President and CEO, Innovative Analytics & Training
• Tom Stroup, President, Satellite Industry Association
• Mary Lynne Dittmar, President, Coalition for Deep Space Exploration

 

 

 

 

 

 

 

 

Cheng is an expert on China and writes and speaks extensively on China’s space program specifically.  Manber is an entrepreneur probably best known in the space policy community for his efforts to commercialize Russia’s Mir space station in the final years of its life.  Much earlier in his career (during the Reagan Administration) he worked in the original Office of Space Commerce at DOC.  Currently he is the CEO of Nanoracks, which arranges to transport small satellites (cubesats) to the International Space Station for deployment, and more recently has teamed with the United Launch Alliance and Maxar Technologies in the Ixion Initiative to convert ULA Centaur upper stages into space stations.

The two disagreed on the potential for working with China.

Cheng views China as a military threat and the Chinese space program as being entirely military regardless of whether the Chinese portray some activities as civil or commercial.  He sees few distinctions between military and civil Chinese space activities and insists that will apply to commercial activities as well.  While China is “actively promoting the development of new commercial space companies” that range from those supported by state enterprises to others that are independent, “it is vital to recognize” that ultimately those companies will “respond with alacrity to central government directives.”

Conversely, Manber argued that American companies should be able to take advantage of the Chinese marketplace.  Acknowledging that it is difficult to strike the right balance between competitiveness and safeguarding technology, he nonetheless believes “avoiding this emerging marketplace … is not the American global leadership that we all strive to achieve.”  Nanoracks works with more than 30 countries, including Vietnam and Peru, he said, and working in “lockstep” with NASA and DOD ensures there is no technology transfer.  “I urge us to negotiate a stern, but fair, agreement with China and allow U.S. businesses to do what we do best, and that is to innovate and compete better than anyone else…”

We live-tweeted the entire meeting.  Those tweets (@SpcPlcyOnline) provide much more information about what those and the other speakers conveyed.

The texts of Pence’s opening remarks and the four recommendations adopted by the Council are available.

On the eve of the meeting, the White House announced the members of the Council’s Users’ Advisory Group.  Three of the witnesses today are members (Cheng, Dittmar, and Stallmer).

Update:  The video of the complete meeting is now posted on YouTube.