The President's national space policy encourages private sector investment and involvement in civil space activities. Last November, the President designated the Department of Transportation as lead agency for the commercialization of expendable launch vehicles. This presents a substantial challenge to the United States Government, since the guidelines and requirements that are set now will have great influence on whether American firms can become a viable competitive industry in the world launch market. There is a dual need to protect public safety and free the private sector launch industry from needless regulatory barriers so that it can grow and prosper

Trilling, D. R.

English

NASA Technical Reports Server

COMMENTS ON THE COMMERCIALIZATION OF EXPENDABLE LAUNCH VEHICLES 
Donald R. Trilling 
Office of Commercial Space Transportation 
U.S. Department of Transportation 
Washington, D.C. 20590 
ABSTRACT 
The President's national space policy encourages private sector 
investment and involvement in civil space activities. Last November, 
the President designated the Department of Transportation as lead agency 
for the commercialization of expendable launch vehicles. This presents 
a substantial challenge to the United States Government, since the guide- 
lines and requirements that are set now will have great influence on 
whether American firms can become a viable competitive industry in the 
world launch market. There is a dual need to protect public safety 
and free the private sector launch industry from needless regulatory 
barriers so that it can grow and pro'sper. 
//'BACKGROUND 
In recent months, there has been considerable public attention 
focused on commercialization of expendable launch vehicles (ELVs). Actions 
taken by the President have made it clear that as a nation, we will en- 
courage the emergence and development of a viable private sector launch 
business. There is a long history of public policy that supports the 
move to commercially-owned and operated expendable launch vehicles. 
NASA and DOD have been active in the area of lpace transportation for 
twenty-five years; it has been a national policy for almost half that 
time that private sector space endeavors are to be encouraqed by making 
available government-operated space transportation on a reimbursable basis. 
There now appears to be a number of opportunities for commercial 
space ventures that can be fully managed and operated by the private 
sector. Most of these are derived from work sponsored by NASA, which 
has spawned these developments by encouraging and conducting scientific 
and high technology experiments, and making their findings readily avail- 
able for spin-off into commercial ventures. This reflects long standing 
patterns of government-sponsored research and development and subsequent 
private sector commercialization in many fields. In turn, technological 
innovation and productivity improvements have led to increased economic 
growth and a higher standard of living for our country. 
Many justifications have been suggested for why the nation needs 
a commercial expendable launch vehicle industry. 
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An ongoing, efficient, private sector ELV industry will pro- 
vide a versatile national launch capability at little or no 
cost to the Government. 
An expendable launch vehicle industry is needed to ensure 
the United States leadership position in this high technology, 
rapidly changing market, by maintaining our ability to compete 
directly with Ariane as well as the Russian and Japanese expend- 
able launch vehicle offerings. 
Expendable launch vehicles can be dedicated to a single mission, 
placing the payload desired into the particular orbit desired 
at the precise time desired. 
For many applications expendable vehicles are inherently the 
most economical way to launch. They don't require the safety 
features of manned flight nor is there an opportunity cost 
for the time of payload integration. 
Competition provided by an ongoing, efficient private ELV in- 
dustry could foster new technological developments in space 
transportation. It has been the government's experience that 
competition inevitably spawns innovation, creativity and 
efficiency. 
Some proposed 'enterprises may prefer to go into partnership 
with a private firm rather than the United States government 
to mount their space oriented activities. 
On May 16, 1983, President Reagan issued his policy on Commercial- 
ization of Expendable Launch Vehicles. L/ This statement further enlarged 
his National Space Policy which encourages private sector investment 
and involvement in civil space activities. It states that our govern- 
ment will encourage and facilitate commercialization of an American 
expendable launch vehicle industry. 
The policy indicates that it is in the national interest to commit 
this country to a two-fold approach to space transportation: a government- 
owned and operated Shuttle, and a privately-owned and operated ELV capa- 
bility. 
On November 16, the President designated the Department of Transpor- 
tation as the lead agency for commercializing expendable launch vehicles. 
In his State of the Union address on January 25, 1984 2/ he noted that: 
"The market for space transportation could surpass our 
capacity to develop it. Companies interested in putting 
payloads into space must have ready access to private- 
sector launch services." 
"The Department of Transportation will help an expendable 
launch services industry to get off the ground. We will soon 
implement a number of executive initiatives, develop proposals 
197 
to ease regulatory constraints and, with NASA's help, promote 
private sector investment in space." 
Three days later, in his Saturday radio address of January 28, 3/ 
the President reaffirmed his commitment to encouraging American industry 
to move quickly and decisively into space. He said, 
"Obstacles to private sector space activities will be 
removed, and we'll take appropriate steps to spur private 
enterprise in space. 
"We expect space-related investments to grow quickly in 
future years creating many new jobs and greater prosperity 
for all Americans. Companies interested in putting payloads 
into space, for example, should have ready access to private 
sector launch services. 
He directed Transportation Secretary Dole, to 
"work to stimulate the private sector investment in com- 
mercial, unmanned space boosters. We need a thriving, com- 
mercial launch industry. NASA, along with other departments 
and agencies, will be taking a number of initiatives to pro- 
mote private sector investment to ensure our lead over current 
and potential foreign competitors. So, we're going to bring 
into play America's greatest asset: the vitality of our free 
enterprise system." 
An Executive Order will soon be issued to implement this policy. 
It will draw heavily on the recommendations of the National Security 
Council's interagency working group on commercialization of expendable 
launch vehicles. These include authorization for the Department of 
Transportation: 
l to act as a focal point for expendable launch vehicles con- 
tacts with the federal government; 
l to promote and encourage expendable launch vehicle operations; 
l to lead other agencies in expediting their licensing of launches 
and ranges; 
l to identify federal statutes, treaties, regulations, and policies 
that may adversely affect expendable launch vehicle commercialization 
and should be changed; and 
l to conduct appropriate planning concerning federal activities 
related to expendable launch vehicle commercialization. 
The working group also recommended that all involved agencies 
review and revise their regulations and procedures, to eliminate unnecessary 
regulatory obstacles to the development of commercial expendable launch 
vehicle operations, and to ensure that essential regulatory procedures 
and requirements are administered as efficiently as possible. 
198 
Thus, the Department of Transportation has assumed the role of 
"new kid on the block" in the space business and has been asked to share 
with this symposium some observations on commercialization of expendable 
launch vehicles. 
To any observer, the dynamics and the accomplishments of the space 
business are astounding. The practicalities of developing a viable com- 
mercial expendable launch vehicle business, however, are obviously more 
complicated. Our corporate world has long demonstrated that it is capable 
of making business decisions that involve extraordinary technical complexi- 
ties and high financial stakes. This is pioneering in every sense of the 
word. In order to proceed, they must know what government will do when 
they are ploughing new ground. It will be the Department of Transportation's 
role to make sure that the government gets out of the way of the economic 
development of this industry, that we make the licensing process as 
simple as it can be, and that we encourage and facilitate the industry. 
REGULATORY THICKET 
Perhaps the most immediate problem confronting the industry is 
what Secretary Dole has described as the thicket of regulations and 
clearances. $/ The present federal licensing process is disorganized, 
expensive and time consuming. Many regulations that affect space launches 
came about for purposes unrelated to the development and operation of 
ELVs. 
There has been relatively little experience with licensing privately- 
owned and commercially-operated space launches in the United States. Re- 
cently however, we have had two instances of private sector firms having 
worked their way through the variety of government reviews and requirements 
imposed -- Space Services, Inc. and Starstruck Inc. Prior to their 
entry on the scene, most launches had been government sponsored, and li- 
censing was not an issue. Their experiences have been amply detailed 
in several public documents $/ and will just be summarized here as recon- 
structed by the DOT staff, to be illustrative of how difficult the process 
can be. It should be noted from the start that these two small and inno- 
vative companies chose to challenge the conventional approach to space 
launches by not using established national ranges and by using their 
own rockets. One launched from a private island, the other is launching 
from international waters off the coast of California. 
Both companies initiated contacts with the government on their own 
to get approval to conduct test launches. Although it was new ground for 
all conerned, they found the personnel in the agencies to be extremely 
cooperative and helpful. Nevertheless, their experience draws attention 
to what seems to be a formidable process. 
As newcomers to the Federal process, Space Services, Inc. (SSI) 
and Starstruck failed to identify all the Federal players which had 
responsibility for approving some aspect of their respective launches. 
Already the number of agencies participating in the approval process, 
directly or indirectly, exceeds those originally identified by the two 
companies. The current list of involved Federal agencies includes: 
The Department of State (Office of Munitions Control), NASA, DOD, Air 
199 
Force, NORAD (separate from USAF), Navy, Office of the Secretary of 
Transportation, FAA, the Coast Guard, Materials Transportation Bureau, 
Bureau of Motor Carrier Safety, Bureau of Alcohol, Tobacco and Firearms, 
Federal Communications Commission, as well as state and local officials. 
It should be noted, that while each of these agencies played a role in 
the launch approval process, their level of involvement varied widely 
from simple coordination to actual review and approval. 
The number of specific licenses or exemptions required depends 
on a number of factors, (e.g. whether the launch is in the United States 
territory or in international waters, whether imported rockets are used, 
etc.) Key licenses or exemptions include: 
l Export License. Space launches are currently treated as an export 
of a product from earth to space. A launch firm must submit 
a formal application to the Department of State's Office of 
Munitions Control (OMC) for a "License for Temporary Export 
of Unclassified Defense Articles". The State Department re- 
views the proposed export from the standpoint of national 
interest, foreign policy and national security. DOD provides 
the national security review and may perform a cursory techni- 
cal review as well. NASA reviews the application from the 
standpoiont of assessing risk and technological feasibility. 
If the launch occurs in international waters, the OMC OMC also 
asks for an FAA review. 
Because of the multiple agency reviews, this single license has 
taken between six and seven months to obtain. One applicant 
received its approval a day before the launch. The other 
received its approval one month before its launch. 
l Frequency Application. To operate its communications and telemetry 
equipment, a launch firm must apply to the FCC for a radio operator's 
license and frequency assignments. As many as eight to twelve 
different frequencies could be required, some of which need 
to be dedicated solely to this event. Temporary use of fre- 
quencies appears to involve a simple application to the FCC. 
The approval process, in this case, has been fairly straight 
forward and prompt. 
l Arms Import License. If any explosive devices are imported, 
such as was the case for SSI, which used imported rockets to 
calibrate its radar, a license is required from the Treasury's 
Bureau of Alcohol, Tobacco and Firearms. 
a Transport of Hazardous Materials. Moving the rockets to their 
launch sites entails the transoortation of hazardous materials 
in a manner other than specifically prescribed by Federal regulations. 
Launch firms must seek an exemption from the Materials Transportation 
Bureau (MTB), part of the Department of Transportation, for trans- 
porting fuels or other explosive materials required for launch. 
200 
Once an exemption to a specific procedure is obtained, it con- 
tinues in force until the rocket design and/or procedures change. 
As part of its exemption process, MTB issues a notice of the 
proposed action in the Federal Register for a 30-day public 
comment period. MTB then .coordinates the proposed exemption 
with affected DOT agencies. This is likely to include the Bureau 
of Motor Carrier Safety'if shipment will be by truck, and the 
Coast Guard if marine craft are involved. Any affected organiza- 
tion may add a requirement which is then included in the exemption 
approval. 
l Airspace Restrictions. If the launch is to be from the U.S. 
or its territories, it is subject directly to FAA regulations 6/ 
concerning the operation of rockets in American airspace. FAAis 
primary concern in reviewing space launch applications is the 
protection of public and aviation safety. FAA has direct au- 
thority to provide or deny airspace clearance and requires 
that it be provided with the technical details of the launch 
vehicle, its trajectory, and overall safety/destruct features 
for its review. It must assure that the launch vehicle is 
generally capable of the performance characteristics ascribed 
to it, determine how much airspace must be cleared to protect 
aviation safety; and assure that the launch and operation of 
the vehicle will not endanger members of the general public. 
From these examples, it should be clear that if there is to be 
a commercial ELV industry, we must make it easy for firms to deal with 
the Government. Once assured that national security, foreign policy, 
environmental concerns and public safety are protected (and these must 
always be the concerns of the Federal government), then the next objective 
is to make sure the industry's economic ability to develop is not hindered 
by needless regulation. One aspect of this will be to provide certainty 
and predictability in the licensing process. 
Another problem is a tendency of Federal agencies to display an 
overabundance of caution. The experiences of Starstruck and SSI indicate 
that agencies have become involved in checking many facets of the request 
that go beyond their jurisdiction, resulting in considerable overlapping 
of technical data reviews by the Government. Part of the problem is 
that the industry is new, and the government has not clarified what 
information will be essential, nor does the industry know what to provide. 
One set of information requirements must be established, that will serve 
the needs of all the agencies involved. 
Two other improvements are worthy of note: it would be very useful 
for the industry to have one point of contact when dealing with the 
government, and the processing time for license applications must be 
expedited. Thus the challenge, and one of the primary functions of the 
Department of Transportation, will be to streamline the regulatory process 
and minimize the cost and complexity to acquire a license to launch 
an expendable vehicle. 
201 
OTHER ASPECTS OF COMMERCIALIZATION 
The Department has encountered a broad spectrum of opinion about 
the prospects for a viable commercial ELV industry. Several companies 
have under development new launch vehicles. With varying success, they 
have elicited interest,yd, in some cases, substantial financial backing. 
The Government is phasing out contract purchases of the Delta, the Atlas 
and Titan over the next few years, but NASA is under negotiati0n.s to provide 
a market for the latter two vehicles on a commercial basis. 
Under commercialization, the market will dictate different sets 
of incentives and rewards than have been traditional in the space business. 
Companies will have their own money (or their financier's) at risk. They 
will have to establish new marketing networks. They must not only con- 
cern themselves with competing with the Shuttle and its impressive capa- 
bilities, but also with international competition from the Europeans’ 
Ariane, Soviet Proton and Japanese launch vehicles. With payloads valued 
in the millions, reliability of the launch vehicle will remain as the 
most important criterion. Being commercial ventures, however, business 
will go to firms who can reduce their costs and/or supply a broad range 
of launching services, minimizing the headaches confronting their clients. 
Quick, dependable access to space at low cost is critical to 
the rapid development of commercial space applications and maintaining 
American leadership in this area. As with all modes of transportation, 
the shipper should have a variety of options, and select the carrier 
who can deliver the payload required to the place required, at the time 
required, at minimum cost and at minimum risk. Our goal, at DOT, is 
to promote, encourage and facilitate the successful commercial ELV in- 
dustry that will help bring this about. 
202 
REFERENCES 
I/ National Security Decision Directive: "Commercialization of Expendable 
Launch.Vehicles," May 16, 1983. (Classified For Official Use Only). 
2/ President's State of the Union Address, January 25, 1984. 
3/ Reagan, Ronald. "Radio Address by the President to the Nation," 
January 28, 1984. 
A/ Dole, Elizabeth Hanford. "Remarks to the Sixty-third Annual Meeting 
of the Transportation Research Board," January 18, 1984. Washington, 
DC 
5/ See Hannah, David Jr. Testimony Before the Subcommittee on Space 
Science and Applications, May 4, 1983. Ninety-eighth Congress, 
First Session, or 
Nesgos, Peter D., "National Law and Commercial Activities in 
Outer Space. Specific Aspects of U.S. Law Applicable to Space 
Industrialization with Particular Emphasis on the Commercializa- 
tion of Launch Vehicle Transportation," Chapter 4, September 1983 
Doctoral Thesis submitted to the Institute of Air and Space Law, 
McGill University. 
6/ Aeronautics and Space. Code of Federal Regulations, Title 14, Part 
101. 
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