Commercial SPACE Moving Forward

This month, the United States Department of Commerce ("DOC"), under the leadership of DOC Secretary of Commerce Ross, pushed forward implementation of the Space Policy Directive 2 ("SPD-2") signed by the President in May 2018 and efforts to facilitate growth of the United States Commercial Space Industry. Particularly, Secretary Ross announced the creation of the Space Policy Advancing Commercial Enterprise ("SPACE") Administration to serve as the DOC's "one-stop" shop for players within the commercial space industry.

DOC Strategic Plan

These recent developments follow efforts by the current administration to enhance support for the commercial space industry. On February 13, 2018, the DOC released its strategic plan for 2018-2022 ("Strategic Plan"). The DOC Strategic Plan identified items to support the commercial space industry including (a) support American companies operating in space, (b) actively participate in the National Space Council, and (c) expand the Office of Space Commerce. At the same time, the administration's FY 2019 budget included $1.8 million for the Office of Space Commerce.

National Space Council Recommendations

Soon thereafter, the current administration's National Space Council issued recommendations on February 21, 2018. Among these, the Council recommended that the administration consolidate certain space-related offices under the Office of the Secretary (specifically, Office of Space Commerce and Commercial Remote Sensing Regulatory Affairs Office). The DOC stated that the anticipated "Office of Space Commerce" will "serve as a one-stop shop providing regulatory and policy support to the space industry." Of course, companies will still need to work with the Federal Aviation Administration ("FAA") and the Federal Communications Commission ("FCC") in matters related to their jurisdictions.

National Space Strategy

In March, the administration announced its somewhat amorphous National Space Strategy. Apart from being somewhat repetitive and a strong use of space in conjunction with protecting national security, the National Space Strategy identifies means to support United States' companies in commercial space endeavors. This strategy includes "regulatory reforms" and pursuing international cooperation. DOC Secretary Ross also repeated the intent to elevate space related offices within his Department.

SPD-2

Becoming a bit more focused and specific, the SPD-2 opens with a philosophy by which to evaluate regulations:

It is the policy of the executive branch to be prudent and responsible when spending taxpayer funds, and to recognize how government actions, including Federal regulations, affect private resources. It is therefore important that regulations adopted and enforced by the executive branch promote economic growth; minimize uncertainty for taxpayers, investors, and private industry; protect national security, public-safety, and foreign policy interests; and encourage American leadership in space commerce.

To this end, the SPD-2 directs the Department of Transportation ("DOT") to substantially synthesize existing regulations to be consistent with SPD-2's philosophy and, particularly, make it easier for companies to secure launch and re-entry licenses and engage in such operations. While the directive appears to make it optional, the possibility exists that the DOT could seek comment on its efforts to eliminate or modify existing regulations. With or without comment period, any changes initiated or proposed by DOT, Department of Defense, and NASA to facilitate the directive's objectives should be examined.

SPD-2 essentially directs the same analysis with respect to commercial remote sensing activities and expressly seeks to increase licensing of such endeavors.

Interestingly, SPD-2 also focuses on the radio frequency spectrum and recommends examination of export regulation as it affects commercial space flight activity. It will be interesting to observe whether this will include an examination of ITAR and EAR.

Finally, SPD-2 picks up on the recommendations discussed above with respect to organization within the DOC. By the directive, the DOC should consolidate space responsibilities in the Office of the Secretary and "create within the Department of Commerce an entity with primary responsibility for administering the Department’s regulation of commercial space flight activities." DOC Secretary Ross has moved to effectuate these recommendations and objectives.

DOC SPACE Design and Proposal

Consistent with the DOC's strategic plan, the recommendations of the National Space Council, and the Administration's National Space Strategy and SPD-2, DOC Secretary Ross announced the creation of the Space Policy Advancing Commercial Enterprise (SPACE) Administration. Although DOC Secretary Ross intends to create SPACE, he also has submitted a proposal to Congress to enact it into law.

In essence, SPACE will report directly to Secretary Ross. In this way, it facilitates the direction to have within the Office of the Secretary a strategic center in the DOC for space related matters. Additionally, five (5) offices or bureaus within DOC that have some space related jurisdiction will appoint a liaison to SPACE. Specifically, this includes the Bureau of Industry and Security, National Oceanic and Atmospheric Administration ("NOAA"), International Trade Administration (NOAA), National Institute of Standards and Technology (NOAA), and, where I interned long ago, the National Telecommunications and Information Administration ("NTIA").

Additionally, the Office of Space Commerce and the Office of Commercial Remote Sensing and Regulatory Affairs (currently under NOAA) will be "elevated and relocated" to SPACE.

This consolidation will help, in theory, facilitate the "one-stop" shop within the DOC for commercial space companies.

Of course, depending on the scope of operations, companies within the commercial space sector will still need to obtain appropriate authorization from the FCC and DOT (FAA). Nonetheless, the move to create and enhance a single coordination point for matters within the DOC should be welcomed among industry participants.

From the perspective of advising startups and smaller businesses within the commercial space industry, the consolidation in the DOC could be significant. For, it theoretically will reduce the amount of time spent navigating regulatory channels and offices. Indeed, should SPACE become so efficient that shared information can be used to coordinate licensing implementation based on particular purposes (eg if a company wants to do X, a strategic roadmap can be implemented to ensure efficient collection of necessary authorizations), it will prove substantially beneficial.

Parallel With Congressional Actions

At the same time, the Administration's efforts, particularly those of the DOC, parallel efforts in Congress to facilitate the growth of the commercial space industry within the United States. In April, the House passed the American Space Commerce Free Enterprise Act ("ASCFFA"). The Senate currently works on its version of the ASCFFA.

Additional space related legislation remains pending in Congress.

Conclusion

With commercial space efforts emerging within both the Executive and Legislative branches in 2018, this year could mark a substantial milestone in the foundation for commercial space growth. The effect of the proposals and organizational dynamics remains to be seen. For one, I will want to see analysis on proposed changes to existing regulatory schema. Also, I will want to ensure that the changes - those creating, modifying, and eliminating regulations - facilitate involvement of startups and smaller businesses within the commercial space sector.

Charles Mudd and Mudd Law practice space law with a focus on startups and businesses of small to medium size.