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Commercial Space Activities

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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


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.

NASA'S COMMERCIAL CREW AND COMMERCIAL CARGO (COTS) PROGRAMS

President Obama proposed a dramatic change to the U.S. human spaceflight program in his FY2011 budget request to Congress, released February 1, 2010, to rely on the commercial sector instead of NASA to built and operate systems to take people to and from low Earth orbit (LEO).  That includes taking NASA astronauts to and from the International Space Station (ISS).   He 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 government -- NASA -- developing such systems. He wanted to cancel the Constellation program, begun under President George W. Bush, for NASA 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 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.

President Obama's FY2012 budget request for NASA was similarly controversial because the congressional committees that oversee NASA believed that it contravened the compromise reached in the 2010 NASA Authorization Act. NASA requested 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 currently combined into a category called "Human Exploration Capabilities" in NASA's budget.

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 mission took place in July 2011, while the Obama Administration wants to keep the ISS operating at least until 2020. Two companies, SpaceX and Orbital Sciences Corp., were awarded contracts to develop cargo spacecraft to service the ISS beginning in 2011.  That date has now slipped to 2012.

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.  Two more SpaceX test flights were planned, but they have been combined into a single launch currently scheduled for May 19, 2012 where the Dragon spacecraft will test rendenzvous and berthing with the ISS.   Orbital planned to test its Antares (formerly called Taurus II) launch vehicle and Cygnus spacecraft in 2011, but that slipped to 2012.  Neither the launch vehicle nor the spacecraft have flown yet.

A "gap" of many years will exist between the termination of the space shuttle in 2011 and when commercial crew services are available. NASA is purchasing crew transportation services from Russia during that gap at a cost of approximately $450 million per year.

Congress and the White House continue to have tense relationships over the commercial crew initiative.   For FY2011 and FY2012, it provided sharply less funding that the Administration requested and is poised to do the same for FY2013.   The request for FY2013 is $830 million, but the House approved only $500 million and the Senate Appropriations Committee recommended $525 million.  They believe that is sufficient if NASA chooses only one or two companies to support instead of the four it does now.

NASA initially awarded contracts to five companies for Crew Transportation Concepts and Technology Demonstration, or CCDEV (commercial crew development) in February 2010: Blue Origin, Boeing, Paragon Space Development Corp., Sierra Nevada Corp., and United Launch Alliance.  Another round of winners of the CCDEV2 competition were announced in April 2011: Blue Origin, Boeing, Sierra Nevada, and SpaceX.   Those contracts were awarded as Space Act Agreements (SAAs) where NASA can pay companies for meeting agreed-upon milestones, but has little oversight or insight into what the companies are doing.  NASA planned to adopt traditional procurement methods under the Federal Acquisition Regulations (FAR) for the next phase of commercial crew development -- specficially, fixed price contracts -- but changed course in December 2011 because of budget uncertainties in future years that it concluded made fixed price contracts unrealistic.

The budget outlook for NASA and other federal agencies that are part of the "discretionary" portion of the federal budget is for sharply constrained funding indefinitely as efforts to reduce the deficit dominate the political landscape.  Congress also has made clear that funding for the NASA-developed SLS and MPCV should have higher priority than commercial crew.

The CCDEV program is transitioning into what NASA calls the Commercial Crew Integrated Capability (CCiCAP) program for the commercial companies to develop an integrate crew transportation system.

OTHER COMMERCIAL SUBORBITAL AND ORBITAL VEHICLES

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.

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.)

Some companies also have announced plans to build systems to take people into orbit on a commercial basis separate from NASA's commercial crew program.   Virgin Galactic is one.   Another is Stratolaunch, an air-launched concept announced in December 2011 by Microsoft co-founder Paul Allen, SpaceX founder Elon Musk, and Burt Rutan, who is now retired from Scaled Composites (now part of Northrop Grumman), but was a major contributor the SpaceShipOne effort.

Separately, Robert Bigelow, owner of Budget Suites of America hotels, has been working for several years on a commercial space station using inflatable modules.  Two subscale prototypes --Genesis I and Genesis II -- were launched in 2006 and 2007 respectively.   Bigelow Aerospace has been working with Boeing for several years to create a transportation system to take people back and forth to full scale space stations when they are launched.  The Boeing spacecraft is the CST-100, which is also now being considered as part of NASA's commercial crew initiative.  It would be launched aboard an Atlas V launch vehicle.  In May 2012, Bigelow Aerospace announced an agreement with SpaceX to market their combined capabilities to take launch people to space where they could stay aboard Bigelow space stations.  The services will only be marketed outside the United States.

OTHER COMMERCIAL SPACE CONCEPTS

Several well known U.S. billionaires working with experienced space entrepreneurs announced plans in April 2012 to mine asteroids.  The company, Planetary Resources Inc., reportedly is three years old, but its founders decided only now to publicize it.  The announcement was widely covered in the media, but the company's website provides little information beyond a webcast of the press conference. Backers of the company include movie producer and explorer James Cameron, Google executives Larry Page and Eric Schmidt, former Microsoft executive Charles Simonyi who flew into space twice as a space tourist on Russian Soyuz spacecraft, and space entrepreneurs Peter Diamandis and Eric Anderson.

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:

 In addition, Boeing and Lockheed Martin co-own 

  • United Space Alliance, which operated the space shuttle and now is trying to move into other space operations areas, and
  • United Launch Alliance, which conducts launches of the Atlas V and Delta IV launch vehicles  

Other major U.S. aerospace companies include:

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

Entrepreneurial companies:

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

 

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