Transportation Systems Casebook/Commercial Space Flight


Commercial spaceflight is the movement of cargo, satellites, scientific payloads, and passengers beginning in Low-Earth Orbit (LEO) 62 miles above the earth’s sea level by way of privately owned spacecraft and rockets.  Commercial is defined as operations run by the private sector with vehicles, spacecraft, or services they own.[1]  The industry functions as a public-private partnership whereby commercially operated companies design and produce the transport vehicles NASA charters for their space missions.  These companies are also able to pursue their own non-governmental commercial interests such as space tourism. Commercial spaceflight is opening up new opportunities for space exploration, scientific discovery, and commercial enterprise. With these opportunities comes a host of policy developments and issues that have national and international impacts.

Annotated List of ActorsEdit

National Aeronautics and Space Administration (NASA)Edit

NASA’s Commercial Crew Program (CCP) facilitates strong public-private partnerships with the private space industry to encourage innovation for development of the commercial space transportation program, which is carried out by using spacecraft that is owned and operated by private companies or organizations for profit. [2]

Federal Aviation Administration (FAA)Edit

FAA’s Office of Commercial Space Transportation (AST) was formed in 1995 and is responsible to oversee, authorize and regulate both commercial launches and reentry activities to ensure protection of the public, property, national security and foreign policy interests of the U.S., and encourages, facilitates and promotes commercial space transportation. [3]

American Commercial Space IndustryEdit

Private American companies that are designing and developing transportation capabilities to and from low-earth orbit and the International Space Station (ISS) to be selected by NASA’s CCP Program.  NASA has selected Boeing and SpaceX to build and operate systems to transport astronauts to and from the International Space Station, and Sierra Nevada Corporation’s spacecraft to ferry equipment and cargo to the Space Station. Additionally, SpaceX and Orbital ATK received contracts with NASA to transport cargo to the ISS. Other private companies are developing spacecraft to compete for the emerging market of commercial passenger flight to low-earth orbit for tourism to include Virgin Galactic and Blue Origin.[4]

U.S. Space SubcommitteeEdit

U.S. House of Representatives Subcommittee on Space has legislative jurisdiction, general oversight and investigative authority on all matters relating to space research and development, including commercial space activity.[5]

Department of CommerceEdit

Office of Space Commerce is responsible for space transportation commerce policy activities and its mission to foster the conditions for the economic growth and technological advancement of the U.S. commercial space industry.[6]

Commercial Space Transportation Advisory Committee (COMSTAC)Edit

Advisory committee composed of industry, government, academia, and advocacy that provides information, advice and recommendations to the FAA on matters concerning the U.S. commercial space transportation industry.[7]

Commercial Spaceflight Federation (CSF)Edit

American aerospace industry committee, whose mission is to promote the development of commercial human spaceflight, pursue higher levels of safety and share best practices and expertise throughout the industry.[8]

Timeline of EventsEdit

1962 - Communications Satellite Act

Provided expanded telecommunications service and established a commercial communications satellite system responsive to public needs and national objectives.  United States participation would take the form of a private corporations subject to government regulation.[9]

1967 - United Nations “Five Space Treaties” developed under the United Nations Office for Outer Space (UNOOSA)

  1. Outer Space Treaty (1967)
  2. The Rescue Agreement (1968)
  3. The Liability Convention (1972)
  4. The Registration Convention (1976)
  5. The Moon Agreement (1984) [10]

Outer Space Treaty (1967), most important of the five and the second of the so-called "non-armament" treaties; it sought to prevent “a new form of colonial competition” and the possible damage that self-seeking exploitation might cause. This article restricts activities in two ways:

First, it contains an undertaking not to place in orbit around the Earth, install on the moon or any other celestial body, or otherwise station in outer space, nuclear or any other weapons of mass destruction.

Second, it limits the use of the moon and other celestial bodies exclusively to peaceful purposes and expressly prohibits their use for establishing military bases, installation, or fortifications; testing weapons of any kind; or conducting military maneuvers.[11]

The five space treaties, enabled space programs to follow an internationally agreed upon set of standards, and fostered cooperative engagement that ultimately led to nations allowing private commercial organizations to take over some of the functions of space programs.  Without early engagement by governmental organizations like UNOOSA, organizations like the Commercial Spaceflight Federation (CSF) would not be possible today.[12]

1984 - Commercial Space Flight Act

Law that regulates and promotes the private spaceflight  industry in the US. The law is responsible for issuing launch licenses to private companies and U.S. citizens.[13]

1990 - National Aeronautics and Space Administration Multiyear Authorization Act

Title I:  National Aeronautics and Space Administration Authorizations:

  • Established within Department of Commerce an Office of Space Commerce to coordinate space-related issues, programs, and initiatives and authorized appropriations.
  • Amended the Commercial Space Launch Act to authorize appropriations to carry out the Act.
  • Commerce Secretary responsible for facilitating private sector involvement in commercial space transportation activity, and promoting public-private partnerships.[14]

Title II: Launch Services Purchase Act of 1990:

  • Requires NASA to purchase launch services for its primary payloads from commercial providers.
  • Allows launch vehicles to be acquired or owned by NASA, except for historical displays, only as required by such exceptions or for conducting research, development, and testing of launch technology.
  • Requires contracts to provide launch services to NASA to be awarded on the basis of full, fair, and open competition.
  • Requires NASA to limit its requirements for submission of cost or pricing data in support of a bid or proposal.
  • Requires performance specifications, not detailed Government design or construction specifications, to be used.[15]

1998 - Commercial Space Act

Requires the federal government to procure commercial space transportation services from US companies to promote commercial space opportunities for the private sector.  The Act implemented many of the provisions of the Launch Services Purchases Act of 1990 eight years earlier. [16]

2004 - Commercial Space Launch Amendments Act

Allowed for more private investment to develop commercial launch vehicles capable of carrying humans into space.[17] The Act gave the Federal Aviation Administration (FAA) authority to regulate human space flight. It also established the regulatory framework, and passenger protocol rules for carrying passengers into space.[18]

2004 - SpaceShipOne

First non-governmental manned spacecraft that reached low-Earth orbit. The spacecraft successfully completed two more flights the same year leading to the first privately developed reusable spacecraft.[19]

2010 - National Space Policy of the United States

“In support of its critical domestic aerospace industry, the U.S. government will use commercial space products and services in fulfilling governmental needs, invest in new and advanced technologies and concepts, and use a broad array of partnerships with industry to promote innovation.  The U.S. government will actively promote the purchase and use of U.S. commercial space goods and services within international cooperative agreements.” [20]

2013 - National Space Transportation Policy

The goal of this policy is for the United States to encourage and facilitate the US commercial space transportation industry by promoting innovation-driven entrepreneurship, and international competitiveness that benefits the US economy.  The policy supports human space transportation initiatives to low-Earth orbit to and from the International Space Station, and deep-space exploration. The policy also strengthened the development of US commercial spaceflight for the private human spaceflight market.[21]

2015 - Commercial Space Launch Competitiveness Act of 2015

Extends the “learning period” regulation to 2023 so the FAA cannot enact any safety regulation for commercial human spaceflight, and extends indemnification (Space Launch Liability) to 2025 for US launch providers for failed launches resulting in third-party loss.[22]

Narrative of the CaseEdit

What compelled lawmakers to support commercial space transport?

Commercial space flight was predicated on the belief that NASA should not have a monopoly on space flight when private industry had so much to offer in terms of talent, resources, and innovative ways to meet a growing demand for information and services in the digital age.  Government had retained a monopoly on space flight in the U.S. until President Reagan signed the Commercial Space Launch Act in 1984.  Commercial satellite launches had been prohibited prior to this, but even with the Act’s passage commercial launches proved difficult due to regulation and burdensome processes.  The space shuttle Challenger disaster just two years later forced NASA and the federal government to suspend shuttle flights, and reevaluate the viability of allowing commercial spaceflight to provide these types of services.  The passage of the Launch Services Purchase Act as part of the National Aeronautics and Space Administration Multiyear Authorization Act of 1990 effectively ended NASA’s monopoly.  For the first time it required NASA to purchase launch services for its primary payloads from commercial providers with minimal exceptions.  It also required NASA to give required specifications for what it needed accomplished, and not direct specific construction requirements or designs, thus enabling commercial invention and innovation to find the best solution to the problem.

NASA’s Dependence on Russia

After the US retired the Space Shuttle Program in 2004, Russia has been shuttling American astronauts to the ISS in the interim as Boeing and SpaceX develop a shuttle through their Commercial Crew Program (CCP) to transport astronauts to the ISS.  The target date was set for 2015 for NASA to begin an independent shuttle service but between 2011-2015, Congress cut $1 billion from the CCP.  The launch date was subsequently pushed back to 2017. [23] As a result, NASA was forced to renew their contract with Russia.  In 2015, NASA Administrator Charles Bolden wrote a letter to Congress informing members of the renewal.

“I am writing to inform you that NASA, once again, has modified its current contract with the Russian government to meet America’s requirements for crew transportation services.  Under this contract modification, the cost of these services to the U.S. taxpayers will be approximately $490 million.  I am asking that we put past disagreements behind us and focus our collective efforts on support for American industry - the Boeing Corporation and SpaceX - to complete construction and certification of their crew vehicles so that we can begin launching our crews from the Space Coast of Florida in 2017.” [24]  

The United States’ reliance on a foreign nation and former rival to execute its space mission has given urgency to commercial space transportation development efforts. A handful of companies have emerged as early leaders in this arena and are leading the way in research and development. Their activity has centered around resupply services and space tourism, two areas that carry significant potential both for government and private interests.

Commercial Space Industry Advancement

Since 2005, $10 billion in private capital has been invested in space related industries.[25] In 2015 alone, $1.8 billion was invested in commercial spaceflight companies by venture capitalists. This sum represented more investment in spaceflight companies than the previous 15 years combined.[26] It demonstrates a willingness on the part of investors to commit to commercial spaceflight in ways they had never considered previously, and it also shows that investors believe the rewards far outweigh the risks for commercial spaceflight. With so many different companies in the market, and the competition so vigorous, the level of progress moves forward at leaps and bounds. Each success or failure paves the way to build upon shared experience within the industry. SpaceX and Orbital ATK are two such companies that have developed and launched the first commercial spacecraft carrying resupply cargo to the ISS. SpaceX also provides services to launch satellites for commercial communications companies worldwide. Blue Origin is currently developing spacecraft for orbital human space flight that will carry astronauts to the ISS. These companies are currently developing and testing spacecraft that will provide commercial travel vehicles for passengers. These trips would begin in low-earth orbit and progress to Mid-Earth Orbit (MEO) and orbital flights, again building on lessons learned. The long term goal for both companies is outer space flights with trips to the moon and Mars, with the potential to establish long-term colonies on both.

Commercial Resupply Services (CRS)

In 2004, NASA announced it would end its Space Shuttle Program in 2011 and retire its three active space shuttles (Discovery, Atlantis, and Endeavor) that routinely resupplied the International Space Station (ISS). NASA ended the program to allocate additional resources to technology development, scientific research, and exploration missions beyond low-earth orbit to places like Mars. Following the announcement, NASA launched The Commercial Orbital Transportation Services (COTS) program that would allow private companies to take over operations in LEO, and conduct resupply missions to the ISS. The public to private transition began 2008 when SpaceX and Orbital ATK won commercial resupply contracts that provide cargo launch services to the ISS.[27]

In 2012, the free-flying spacecraft Dragon designed and built by SpaceX became the first commercial spacecraft to deliver cargo to the ISS.[28] In September 2013, Orbital ATK spacecraft Cygnus completed a COTS demonstration mission to the ISS. Directly following this successful demo mission, Cygnus completed its first CRS mission in January 2014.[29]

Space Tourism

The Commercial Space Launch Amendments Act of 2004 allowed the space tourism industry to grow and companies such as Virgin Galactic and Blue Origin are spearheading the space tourism industry. Virgin Galactic's human spaceflight vehicles are the WhiteKnightTwo and SpaceShipTwo, both of which offer civilians a chance to experience the weightlessness of space in low-earth orbit.[30] SpaceX’s Dragon craft was originally designed to carry humans but is only licensed to carry cargo to the ISS. [31] Currently, there are no U.S. commercial companies using their spacecraft for tourism. SpaceX is conducting manned test flights to ensure all spacecraft are safe and licensed by the FAA before they can carry humans into space.

Where are we now?

With NASA's inability to facilitate all the launches needed by both government and private industry, the door has been opened for the rapid expansion of commercial ventures and innovative entrepreneurship. The shift in government policy from one where NASA was the only producer of spacecraft to one where commercial companies provide a multitude of options to NASA as the customer has brought about great change. Now the commercial space transportation industry can bring to bear their considerable innovative solutions and resources to solve complex problems for the government. There are still many policy debates and technical problems to be solved but if government remains flexible when enacting future policy and regulation, the industry will continue to build upon its successes and move the entire space industry forward.

Clear Identification of Policy IssuesEdit

Policy Issues

The policy issues surrounding commercial spaceflight are a product of it being such a new industry as well the public-private partnership which is molding it. The government and private companies hold distinct interests in exploiting the opportunities a robust commercial space transport sector offers. Questions remain as to extent of the government’s authority over and responsibility to these private companies. Some of the most pressing of these issues are considered below.

When and How to Regulate Space Crew Safety

The CLSA, in order to promote the growth and development of the commercial space industry, prohibited the FAA from regulating crew and spaceflight participant safety until 2012. [32] This prohibition has since been extended to 2023. [33] The prohibition has created ongoing uncertainty as to what role the government should play regarding space crew safety and how to do so. There is disagreement among government and private industry participants as to how long the prohibition should be in place.

A 2015 report by the Government Accountability Office (GAO) found that “six of nine commercial space launch companies...three experts, the Chairman of the Commercial Space Transportation Advisory Committee, and the President of the Commercial Spaceflight Federation all recommended that the regulatory moratorium” on crew and spaceflight participant safety be extended.[34] Chief among their reasons for doing so were to allow space tourism the opportunity it needs to continue developing effectively and to allow the industry to figure out the appropriate standards to insure safety. The FAA, in the same report, said it supported allowing the prohibition to expire but had no plans of issuing any regulations regarding space crew safety upon its expiration.

The agency stated that it would prefer to see the commercial space transport companies develop their own industry standards for safety. However, the FAA argues that with a seemingly indefinite rule barring the government from regulating commercial space crew safety, there is little practical incentive for the companies to do so. Removing the prohibition would allow the agency to develop regulations were a systemic issued identified. Under the current rules, they can create regulations only following an accident and the regulation would be limited to whichever design feature, if any, were identified as the cause of the accident.

In 2013, the FAA released a draft guidelines document titled, “Established Practices for Human Space Flight Occupant Safety.”[35]The document borrowed from NASA’s Commercial Crew Program requirements. Under the NASA program, NASA specifies a set of requirements and standards for occupant safety that the private developers of space launch vehicles must meet in order to be used in NASA missions. One of the challenges of this arrangement is striking the right balance between making the vehicles safe enough for NASA users yet affordable enough that they can be used for other commercial purposes.[36]

FAA Licensing

The FAA is responsible for the licensing of commercial space launches as well as NASA’s Commercial Crew Program launches (NASA certifies the launch vehicles). Given that the commercial space transportation sector is a relatively new industry in its early stages, the agency has had to grapple with obtaining adequate resources and developing the expertise needed to issue licenses effectively. The amount of launches has steadily risen from year to year. According to the GAO, “in fiscal year 2015, the FAA licensed and permitted 14 launches and reentries” compared to only seven nearly ten years earlier.[37]That number could increase substantially once NASA’s Commercial Crew Program becomes operational and companies begin launching small satellites into orbit.

The increase in launches has naturally increased the FAA’s workload by requiring the agency conduct more inspections. The inspections include safety checks for pre-launch and reentry activities as well as launch site operations. They conducted 216 commercial launch inspections in fiscal year 2015 compared to only 27 in fiscal year 2006 and an average of 90 inspections between 2006 and 2015.[38] In addition, the FAA is dealing with licensing new types of space launch vehicles. Systems like the SpaceShipTwo blend features of both aircraft and rocket-powered technology and have flight termination systems that do not require human operation.[39] These new systems require more time, resources, and personnel dedicated to not only inspecting the vehicles but gaining the knowledge necessary to understand how the systems will work in real-life situations and anticipating potential hazards they may present.

As with the space launch vehicles, the FAA is also responsible for licensing an increasing number of launch sites.[40] The complexity of these launch sites have increased from the traditional coastal area federal launch facilities. Commercial companies are submitting applications to launch from their own nonfederal sites. Launches from inland raise the risk of interfering with other air traffic and obstructions. The increase in commercial space launches, reentries, and launch sites will increase the government’s exposure to third-party liability claims and federal indemnification.[41] This increased exposure highlights the need for FAA licensing requirements to be thorough enough to insure the safe operation of commercial space launch operations in all its phases.

Currently, the FAA licenses the launch and reentry of commercial space launch vehicles. It does not license their activity when they are operating “in space.” Article IV of the Outer Space Treaty and Section 108 of the Commercial Space Launch Competitiveness Act (CSLCA) each require the US government to monitor and insure the safety of commercial space activities occurring in space. [42]The agency has yet to release detailed plans as to how it will fulfill this responsibility.

Congestion of airspace and orbital debris

The United States’ National Space Transportation Policy states that the Department of Transportation has “exclusive authority... to address orbital debris mitigation practices for U.S.-licensed commercial launches, to include launch vehicle components such as upper stages, through its licensing procedures.”[43] Orbital debris presents an obvious danger not only to the operation of space launch vehicles and their passengers, but also for inhabitants on Earth following a vehicle’s reentry below low Earth orbit (LEO). Currently, there are few regulations regarding how to mitigate orbital debris. Commercial space launch participants must avoid intentional creation of debris, collision of components of the launch system, and “to passivate the launch vehicle by depleting propellants, pressurant gases, and stored energy in batteries.” [44] There are multiple methods launch companies may consider to passivate the launch vehicle, including passive or augmented passive disposal, controlled deorbit, or using a separate deployer bus.[45]

Besides mitigation, government and commercial space launch companies will need to consider orbital debris remediation. Debris remediation is the prevention of collisions between massive derelict objects. [46] Active debris removal (ADR), the primary means of debris remediation, calls for the removal of orbital debris.[47] According to NASA’s Orbital Debris Program Office, reducing the risk to the current fleet of spacecraft will require the removal of small debris. Long term, however, ADR must focus on large debris such as, “ intact rocket bodies and non-functional satellites.”[48] Collisions of these larger objects present the greatest hazards in the long-term growth of orbital debris and studies show that removing as little as five of the largest objects can stabilize the growth of orbital debris. Government and private companies throughout the world are still in the early stages of developing technology that will reliably detect and prevent the collision of such debris.

As with orbital debris, significant attention has been placed on developing technology to detect the proximity space launch vehicles have to one another and with aircraft below orbit within the United States’ commercial airspace. The Space Data Integrator (SDI) system is the FAA’s primary technology in that effort. It has designed to monitor the movement of commercial space launch vehicles to insure they do not interfere with air traffic, anyone or anything on the ground, or any objects and activities between the ground and space.[49]Specifically, the SDI will “support current and upcoming operational scenarios, including those associated with NASA’s Commercial Crew Program, fly back boosters, inland reentries from orbit, and other complex mission designs.” [50]The specific objectives of this system are to automate situational awareness, monitor launches transiting through the National Airspace System (NAS), and detect and respond to abnormal events. The FAA plans to use the SDI in tandem with some of its other air traffic control systems but there are limitations that the agency is still determining whether to resolve or find ways to work around.

National Security Policy

The U.S. today is more reliant than ever on space programs for U.S. National Security, combined with the international community is playing a larger role in space. Space assets provide capabilities that are critical to U.S. National Security and commercial space assets account for many of these capabilities. Defense-industrial initiatives report states, “U.S. Policy needs to be strengthened to address assured access to space for key commercial payloads.”  Commercial satellite launch customers report challenges with obtaining and scheduling launches.[51]

Space capabilities that are key elements of U.S. National Security include satellite capabilities that provide command and control, communications, intelligence gathering and weapons targeting. Space systems are increasingly important for monitoring potential threats, managing military forces and carrying out combat operations. Space is also an essential dimension of the U.S. economy such as stock market data, telecommunications, automated teller machines, and is now an integral part of the daily lives of millions of U.S. residents.[52]

National Security Presidential Directive (NSPD) 40, U.S. Space Transportation Policy recognizes the importance of a healthy commercial space launch industry in supporting U.S. National Security interests. Sustaining U.S. technological superiority in space is a U.S. National Security interest and building and maintaining a strong U.S. industrial base is an important element of developing superiority, which it is stated would be unrealistic while relying primarily on foreign capabilities.[53]

Export Control Policy

The U.S. export control policy ensures control over certain technologies and commodities that are being sold to foreign countries and industry to ensure national security.  Export control policy is a licensing program that controls items regulated under the International Traffic in Arms (ITAR) and Export Administration Regulations (EAR).  The U.S. Departments of State, Defense, and Trade administer the ITAR program, which controls munitions items listed on the United States Munitions List (USML). EAR regulations control items listed on the Commerce Control List (CCL) which have both commercial and military applications. [54]

Many U.S. organizations report that the control of space related commodities under the ITAR puts U.S. companies at a competitive disadvantage in the international space market. [55] Opposition to the policy are in favor of export control falling under the Export Administration Regulations (EAR) and the President’s 2009 Export Control Policy Reform Initiative. [56] Survey respondents to the 2014 U.S. Department of Commerce’s export control policy survey, estimate lost sales opportunities between approximately $988 million and $2 billion from 2009 to 2012 due to the export control policy.[57]

Commercial space transportation advisory committee finds the licensing process under EARS would be quicker, offer more flexibility to the industry and that ITAR carries a stigma within the international space community. [58] Department of Defense raises a national security concern that the export control program under the EAR regulations could provide technologies and systems that have anti-satellite (ASAT) capability to foreign entities. [59]  Critics of the current policy say that more exports would allow U.S. companies to expand markets and increase sales, and with the uncertainty of the U.S. government budget environment organizations may seek additional opportunities to sell the products and services outside of the U.S. to remain profitable and competitive.[60]

Lessons LearnedEdit

  1. The US government is known for enacting reactive legislation when disaster strikes. However, this is not the case for the commercial space industry. With the FAA extending the “learning period” to 2023, commercial companies can operate at their own risk and develop innovative systems that will help future human space flights. The decision to integrate private companies with government oversight led to the development of a new and more trusting culture that fully supported public-private collaboration.
  2. A balanced government policy approach is critical to creating the right environment for venture capitalist entrepreneurship and commercial success.  Too much regulation restricts innovation and restrains competition.  Too little oversight can lead to lax standards and issues with interoperability of systems.
  3. Some traits common to spacecraft disasters are management failures and pressures to keep up with unrealistic launch schedules coupled with budget constraints. The commercial space industry is new and complex, and in a perfect world disasters could be avoided. When accidents do occur, the industry must vigorously investigate all possible causes in order to prevent them in the future. Building on previous successes and failures enables each subsequent commercial space flight to get cheaper, more reliable, and improves efficiency at an exponential rate.

Discussion QuestionsEdit

  1. What determines the location of a launch site?
  2. Should Congress set an official date to regulate commercial human spaceflight? Or it be based on other criteria?
  3. Would you and your family pay to fly into space?  How much??
  4. Who should be responsible for the safety and success of commercial space transportation?
  5. Do you think the new administration of President-elect Trump will continue to support the growth of the commercial space industry?
  6. What role should the United Nations or other nations have in determining U.S. commercial space policy?

Maps of LocationsEdit

U.S. Map of Launch Sites and Space Ports - FAA

U.S. Space Transportation Industry Sites and Locations - FAA

3D Map of Space and Satellites -

Satellite Tracker Map -

Additional ReadingEdit

  1. The World's Top 10 Most Innovative Companies in Space - FastCompany
  2. 2015 An Epic Year for the Space Industry - Space Angel Network
  3. Five things to know about the new FAA drone rules - USA Today
  4. What SpaceX's rocket landing means for commercial space travel - The Washington Post
  5. Commercial space industry seeks regulatory reforms in the Trump administration - SpaceNews
  6. National Space Society Blog