US Seen Possibly Falling Behind in Space Regulatory Race
Satellite insiders warn the U.S. could be losing a space regulatory race, as other nations increasingly try to lure emerging space industries with favorable regulatory regimes. At least partially in response, the 2017 American Space Commerce Free Enterprise Act (ASCFEA), passed by the House Science, Space and Technology Committee earlier this month, would charge the Commerce Department's Office of Space Commerce (OSC) with oversight of such activity, and hugely revamp the regulatory approval process for remote sensing operations, moving that oversight from the National Oceanic and Atmospheric Administration to OSC. "It's pretty radical," said space lawyer Jim Dunstan of Mobius Legal Group.
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Experts pointed to Luxembourg's efforts to become a hub of outer space mining operations. Richard Rocket, CEO of commercial space consulting firm NewSpace Global, said nations including Singapore, Malaysia, Australia, the United Arab Emirates and U.K. are interested in developing space ports that would compete with launch industries in the U.S. and Kazakhstan. The ambitions have been around for years, but they could become reality, with commercial space companies expected to go from 1,000 now to 10,000 by 2026, Rocket said. "When the U.S. first started .... it wasn't a leader in too many things. You can imagine a Luxembourg or a country that size becoming more relevant and a lot more of a world leader due to its strategic positioning around the commercialization of space in 2017."
Most of those 1,000 companies are in the U.S., Rocket said, but space startups are increasingly emerging in places like China. "If U.S. decision-makers do not maintain a friendly environment for these companies, I can imagine … we'll certainly see some of the companies look overseas.”
Luxembourg aimed to be a European hub for space mining by introducing legislation dealing with the authorization process that Parliament is expected to pass this summer, said Bob Calmes, head of Luxembourg law firm Arendt & Medernach's New York office. The country put 200 million euros into the space industry either directly or through an investment fund, he said. Space mining companies like Planetary Resources and Deep Space Industries set up operations in Luxembourg, and investment funds being set up there saw growth, he said.
"This isn't anything totally new," Dunstan said, pointing to former U.S. companies now based out of the Isle of Man due to tax and regulatory structures. He said one satellite client opted to get licensed in Norway due a far faster turnaround time and cheaper filing expenses. "It's not the FCC’s fault," he said, saying additional staff likely wouldn't speed up the process: "The current regulatory structure just takes time."
An FCC official said companies consider numerous factors in satellite licensing decisions, including location of operations and details of business plans, plus licensing and regulatory fees. But the official said it heard from companies that they opted for U.S. licensing because of more regulatory certainty and the international support. The official said the agency works to improve processes, like 2016 changes to procedures to facilitate ITU filing before filing a formal application for a license.
One chief regulatory hang-up the U.S. faces is in launch authorizations. An Air Force-commissioned study released early this year about options for cheaper access to space said the nation's launch regulatory system "is still largely aligned with launch being a high-cost, infrequent, risky, and very specialized activity." It said problems with the nation's regulatory structure include how the FCC allocates frequencies and licenses, how the Federal Aviation Administration licenses launches and re-entries, and how the government overall enforces orbital debris mitigation and tracks orbital conjunctions. It said "a significant change in organization, mission, strategy, structure and funding" is needed in agencies including the FCC to lead to the flight rates that would result in significant price reductions. The report recommended the agency "better allocate frequencies and license spacecraft constellations." The FCC didn't comment.
ASCFEA wouldn't affect traditional FCC satcom licensing operations, though future nontraditional space operations might require both FCC and OSC authorizations if spectrum issues are involved, experts said. The House "is gung-ho" to get ASCFEA done, though Senate staff "want to think a little bit harder on this," Dunstan said. Others are less optimistic about a major regulatory overhaul anytime soon. “There's so much chaos right now on Capitol Hill, [space] is certainly not a high priority," Rocket said.