Washington DC – June 9, 1998 – As part of the media’s coverage of the “ChinaGate” controversy, one fundamental issue is not being covered. If America is the world’s economic and technological leader, and if America has the pre-eminent space program on this planet, then why are American satellite manufacturers forced to use launch vehicles made by the Communist Chinese?
Without a doubt, the “ChinaGate” controversy is a direct result of
our country’s failure in commercial space transportation. It is
a direct consequence of our country’s failure to replace a
government-dominated segment of our space program with a
true commercial space transportation industry. Below is column
by Greg Easterbrook that was printed in the NY Times that gets a
number of the issues right.
Easterbrook points out that “By neglecting the need for affordable
rockets, American space policy not only created the conditions that
led to the satellite deals with China, but it also has jeopardized its own
hopes for the future.” ProSpace agrees, but there is more to the story.
ProSpace has already briefed over 250 congressional offices in 1998
on existing problems in national space policy — and proposed some
solutions. These problems should be given a fresh look as part of
the “ChinaGate” story and investigation. They include:
1. Major dis-incentives for the existing space transportation
companies to invest and innovate.
The current industry is dominated by government contractors who have
a poor understanding of commercial markets. Their primary customer is
the federal government. Instead of investing in new technology and a
keen focus on developing new markets, they have learned (from their
primary customer) to invest in lobbyists. As a result, the existing
government contractors have huge cost-plus contracts and cozy
relationships with government agencies — a major disincentive to
innovation and reductions in cost. They view “cheap access to space”
as a threat to their way of life, not as a great business opportunity.
At the same time, there is a significant number of new space
transportation companies who model themselves around a different
paradigm. These companies are investing tens-to-hundreds of millions
of dollars in private capital on innovative concepts that the old-style
companies have ignored. They have names like Kistler Aerospace,
Kelly Space and Technology, Space Access, Rotary Rocket, Pioneer
Rocketplane, Universal Space Lines, and Beal Aerospace. Remember
these names — among them are the Apples, Microsofts and Intels of
the near future. ProSpace has been promoting legislation and a
number of specific policy initiatives that would help these companies
succeed.
2. Competition by the government with private companies —
either directly or indirectly through the use of subsidies for winners
chosen by the government.
This one fact does more than anything else to scare away the billions in
investment dollars now available from private capital markets for rapidly
growing industries like commercial space. Because of the importance
of this issue, ProSpace has been forced to oppose, and help kill,
government subsidies of individual corporate favorites chosen by
government executives on several occasions.
3. Failure by the U.S. Government to procure space services in a
commercial manner as required by law (the Launch Services
Purchase Act of 1990) and the President’s National Space Policy.
There are many additional opportunities for both NASA and the
Department of Defense to procure space services using commercial
methods. But progress has been slow — in many ways the Russian
Space Agency, the pinnacle of Soviet Communist pride, is now using
more commercial practices than NASA. ProSpace has been actively
promoting new efforts within the federal government to expand the
use of commercial procurement pactices.
Conclusion
These three factors have combined for the last three decades to
reduce American innovation in space transportation to a snail’s crawl.
The current American disposable launchers are based on 1950s
technologies developed during the Cold War. The Space Shuttle
is more proof that government can not conduct routine operations
in an efficient, low-cost manner.
The only effective policy response is for our nation to encourage the
rapid development of innovative solutions by America’s growing
commercial space industry. Commercial space revenues now exceed
the total space expenditures of every government on this planet.
Merrill Lynch recently projected that space commerce will grow at a
17% annual compounded growth rate for the next 10 years. By working
in concert with the growing power of this market, the U.S. Government
could formulate an effective policy response centered on free
enterprise, and the competitive advantage provided by the American
entrepreneurial spirit.
The media can play an important role by going beyond the surface issues
of “ChinaGate,” and examining the root causes of the problem. As the
full story gets out, our nation will be able to effectively address the
problems, and once again become the world’s pre-eminent leader in
space transportation.
