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FULL TRANSCRIPT: Commerce Secretary Wilbur Ross and Congressman Lamar Smith on the New Era in Space

FULL TRANSCRIPT: Commerce Secretary Wilbur Ross and Congressman Lamar Smith on the New Era in Space

Hudson Institute

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Following is the full transcript of the July 24 Hudson event Commerce Secretary Wilbur Ross and Congressman Lamar Smith on the New Era in Space.

Remarks by Wilbur Ross, U.S. Secretary of Commerce

KENNETH WEINSTEIN: Happy to have the 39th secretary of commerce, Wilbur Ross – Wilbur L. Ross Jr. – with us today. Of course, Secretary Ross is the principal voice of commerce – of business – in the Trump administration, ensuring that U.S. entrepreneurs and businesses have the tools they need to create jobs and economic opportunity. And Secretary Ross is, of course, well-known as a man with over a half-century of experience in investment banking and private equity, restructuring over $400 billion in assets in industries too diverse to list today, and serving as chairman or lead director of more than 100 companies in over 20 countries. As chairman and chief strategy officer of WL Ross and Co. LLC, he’s a longtime friend of Hudson Institute. He’s also the only person, more importantly, elected both to the Private Equity Hall of Fame and the Turnabout Management Hall of Fame. He’s been decorated by the governments of South Korea and Japan, among others. When you look at his bio and when you chat with him, you realize this is a man who has led an absolutely extraordinary life in every dimension. And he is now dedicating himself with the same insight, the same energy, and the same force of personality to public service. And fortunately for those of us interested in the area of space and the future of space travel and the future of space satellites – satellite communication –, he is taking the lead on the potential on this important area. And he fully grasps the potential for private sector space travel and exploration. His goal is nothing short, and I quote him, “to make the United States the flag of choice for space launches and space activities.”

Of course, he serves on the National Space Council, which was chaired by Vice President Pence, whom, as I mentioned earlier, is another longtime friend of Hudson Institute. The vice president has delegated to the Commerce Department responsibility for overseeing increased government cooperation with commercial space industry and easing related regulations. This requires a different kind of restructuring than the kind that you’ve done over 55 years in industry, but – this being government – it requires someone of your talents, as it were, to reform the structures governing space situational awareness, space traffic management and broader space policy.

Delighted to have you in conversation today, and especially delighted to have you in conversation with Hudson Institute Fellow Brandt Pasco, who leads our Space 2.0 Initiative. Brandt is an attorney by training. He is the former associate general counsel of In-Q-Tel. He has had long and distinguished government service of his own at the Department of Homeland Security and at the Department of Transportation. He served on numerous federal advisory boards at the Department of State and at the Commerce Department, particularly at the Defense Trade Advisory Group at the Department of State and the Regulation, Procedures and Technical Advisory Committee at the Department of Commerce. I know all of us are looking forward to what will be an absolutely fascinating conversation. So let’s give Secretary Ross a warm Hudson Institute welcome.

(APPLAUSE)

WILBUR ROSS: Thank you. Thank you. Thank you.

BRANDT PASCO: If I can address a small housekeeping matter before we start our conversation, Mr. Secretary. The secretary has agreed to take some questions at the end. We ask that they be kept topical to the subject of space policy. And one of my colleagues has cards. And we’d like questions to be written and passed down to the end, and someone will collect them and bring them up. And we’ll try to get people’s questions addressed. Thank you for your cooperation in that.

So, Mr. Secretary, thank you again for joining us today. We’re really pleased to have you here. It’s a great honor, and it’s nice to be able to chat with you again.

Goodness, the topic of space, right? There’s such a dynamic area and so many things going on. You know, if you look back over the changes just in the last 15 years, when things were overwhelmingly focused purely on telecommunications. And now we see capital going into all sorts of areas – every conceivable facet –, from space transportation – yes, of course, telecoms – but also imagery, looking towards manufacturing, prospect. I mean, the list of areas is just explosive. And I guess it would be interesting to have your perspective on why all of this is important, what it means for the United States, and where you see this going.

ROSS: Sure. Well, first of all, as to the explosion of activities, I think that’s a natural consequence of two things. One, in the beginning, the whole objective was to get there and to learn something about what was there. Now, as it becomes a little more mature, the exercise becomes, “Now we’re there, what do you do with it? How do you make something out of it, something useful, something constructive?” So I think it’s the logical next phase, as are the support functions. Having all these satellites out there means that there’s a resupply needed, that there’s maintenance needed, that all kinds of things are needed. So it will, in turn, spawn quite a lot of support industries, let alone all the new applications of it. To me, the most novel new application – or relatively new one – is Richard Branson has signed up 600 people who have prepaid $250,000 each. That’s $150 million for a 20-minute ride into space. It’s the beginning of space tourism. And it’s extraordinary to me that there’s so much interest that he’s able to accomplish that. That, to me, is the tip of the iceberg of another whole new set of activities that eventually leads to colonization, eventually leads to space manufacturing, eventually leads to space mining, means all kinds of potential activities.

PASCO: That’s fascinating. So then that leads naturally to a second question: where there is this extraordinary level of entrepreneurship that we’re seeing unfold, what is your vision for how the Commerce Department and the U.S. government as a whole can foster and facilitate all of this?

ROSS: Sure. Well, it’s really essential that we do, because in the present budget-constrained environment, if we don’t have huge participation from the private sector, we’re not going to get anywhere. So this is not just something that’d be nice to do with private sector: it is absolutely essential that we do it with private sector. To encourage private sector, we need to make some different policies from what we’ve had. Space regulation is basically obsolete. Much of the enabling rules are 20 or more years old. Well, the space world of today bears very little resemblance to what it did 20 years ago. And 20 years from now, it’ll bear probably very little resemblance to what we have today. So we need a space regulatory environment where the pace of regulatory change matches the pace of technological innovation. So far, there’s been a terrible gap between the two.

Second, we need to think through the importance of quick decisions. One of the things I’ve learned in private sector is that a quick “no” is often much more valuable than a really slow “yes,” because the really slow “yes” interferes with decision-making and planning and things like that. So we’ve adopted some new things. We’ve cut for the remote sensing, which is one of our main regulatory activities, cut the time to get a license from over 200 days to an average of about 90 days. Now that’s probably still too long, but at least it’s a big improvement from where it had been. We’ve also initiated some other ideas. For example, it had been that every time you did a launch with a camera, even though it was the same launch vehicle and the same camera as last time, you had to go through the whole regulatory process. Why? So what we’ve now put in is a concept: if it’s the same everything, there’s a time period during which your authorization prevails, regardless whether you just do one launcher or five or 10 or whatever number. So simple-minded, if you will, terrestrial observations – how to make the regulatory process smoother. Trying to create a whole-of-government approach is another thing. It’s kind of fragmented now. We’re doing a fair amount of consolidation, but there are still pieces that are not all in one place. And as we absorb other pieces, there will obviously have to be transition periods so that the change is seamless.

For example, we’re taking over a big role in space situational awareness and space traffic management. Air Force will be the one who primarily does it, but their mission is a very precisely defined one. All the interaction with private community and all the developments that are necessary for private community are not really their focus and not really their province, so there’s room for us there, including in technological change. At present, there’s only measurement of objects. There’s 600,000 objects floating around out there. Only 10,000 or 12,000 of those are 10 centimeters or more in diameter. And yet, the smaller ones can do an awful lot of damage to a solar panel. So taking the universe of objects down in size and up in number is one of the objectives that we will have. The second thing is working with private sector developing algorithms to refine our capability to determine probability of collision. So there are lots of things like that that are needed to make it more user-friendly, more adaptable to commercial sector. And so those are some of the areas we’ll be trying to pursue in the STM and SSA.

PASCO: That’s very helpful. Thank you. So as we’re looking at this really dynamic commercial marketplace, and as it’s evolving and growing with a tremendous amount of venture capital and private equity flowing into things. Do you see that there are particular areas where the United States has a natural competitive advantage with respect to other countries?

ROSS: Well, I think in anything to do with semiconductors and software, we clearly are very important leaders globally. We also are gradually developing extreme amounts of experience in launches. So you’re starting to see the concept of reusable launch material. It’s a very simple concept but very hard to hard execute. Nonetheless, it’s been accomplished. And the reason I focus on that is, to me, the key to making space really big, really useful and really successful is making it less expensive. It costs too much to do a launch, costs too much to get things up there. So the idea of reusability is a very central one. The idea eventually of having some sort of activity, say, on the moon, so that it could be a waystation en route to Mars, or to some other more distant destination, in order to take advantage from the payload point of view of only needing the fuel supply initially to get to the moon. And therefore, if you can then refuel on the moon or in some other way that took advantage of lesser gravity, and you can make things more economical.

So I think thinking a little bit outside the box is going to continue to characterize the developments here. And frankly, private sector is just better at thinking outside the box than public sector is. There are too many inherently conservative elements to public sector activity that sometimes can inhibit innovation. But if you’re a Jeff Bezos and you’re writing the check and you’re bold and willing to take some risks, you’re much more likely to have a big innovation than a government is, even if we have exactly the same quality of scientists and everybody else. So it’s not only essential from an economic point of view. It’s also far more preferable from an accomplishment point of view to have the private sector interaction.

PASCO: That’s an interesting perspective, and it raises, indirectly, a question of governance, right? As we see some beginnings of this, there’s talk of a space force, but to directly link it to your comment where we’re looking at using the moon as a waystation, – we’ve mentioned prospecting, manufacturing – some of this, of course, will be automated, but there are also going to be people out there at various times. And so talk to us a little bit about your perspectives and philosophy on what the legal infrastructure that we’re supposed to be putting into place to govern all of this activity is. Because there’s not a lot of there there yet.

ROSS: No, there isn’t. The main thing is the old U.N. work from about 50 some odd years ago, and not even all countries are signatories to the U.N. document. But there are now some 70 countries that are actually doing something in space. Now, in some cases, it’s just a vanity thing: put a man up there so they can say they did so. But quite a few of them are really serious and want kind of robust programs. So there is going to be more and more competition, if you will. And there are some interesting questions.

We believe, for example, that there are lots of minerals – especially valuable metals and rare earths – on asteroids. Well, how do you establish title to them? How do you establish mining rights? Is it first come, first serve? Is it the guy with the biggest spacecraft, the guy who puts the first weapons there? How do you establish who is really going to be doing it? Space traffic management: think how complicated highway traffic management would be in the absence of any police force. Well, there is no police force in outer space. So at present, all one can do is say, “Beware; that looks to us like there’s this object that may be heading toward your satellite, and then perhaps help with an algorithm to determine the probability of that being correct.” But if the guy doesn’t want to take the advice, there’s no mechanism. So, you know, one thing is: what would be the legal structure? But to me, the more fundamental question is: legal structure doesn’t mean a lot if there isn’t some sort of enforceability to it. And that’s a huge open question.

So those are the kinds of things that we will be exploring. Manufacturing: there’s already a fellow who took advantage of the fact that a low-gravity environment changes the characteristics of materials, and this fellow has created optical fiber cable that supposedly is one-third more effective than the existing stuff, and it all came from a little experiment in outer space. Nanotechnology – there’s a lot of work being done about nanotechnology in space, a lot a work in pharmaceuticals. All kinds of materials take on different properties when they’re in outer space, so we can’t even guess just yet how far that will go. But for sure, there will be lots of commercial fallout from it. An interesting question is: how do you then commercialize that? And so there will be a lot of work done in all of those areas. A very complicated question now: as you know, 2024 is supposed to be the privatization in some form of the SSL. Well, what does that really mean? How do you do it? How do you protect the national interest? How do you deal with the commercial interests? And how do you make it an economical thing for people to do? Those are all big, big challenges and – for the moment – unsolved questions.

PASCO: So that then perhaps leads to another natural question. Today, we’ve talked a lot about the commercial aspects of space and the fact that this is already a multi-billion dollar industry that’s only going to become more significant. Going back 20 years ago, much of the discussion on space would have focused on just the national security aspects. And those are, of course, still extraordinarily important.

ROSS: Oh, they certainly are, if anything, more important.

PASCO: So how do you see U.S. leadership in commercial space interacting with or affecting those national security concerns?

ROSS: Well, think about it historically. The jet airplane was invented for military use, and it then became a commercial transformation of the whole transportation industry. So there’s plenty of precedent for things that emanated from the military gradually having a very important impact on private sector. But whether Space Force comes into being very quickly or not is outside of our province, but the importance of space from the military point of view I think cannot be underestimated. Think about if you’re trying to fight a war, and somebody figured out how to knock out your GPS: you’ve got a real problem – a real problem –, let alone using the satellites or other things in space as weapons themselves. I think it was no accident that the Chinese a little while ago deliberately destroyed one of their own satellites. I feel that, more or less, they just wanted to show us they could do it. So protection of both the commercial and the government satellites – military or NOAA or NASA or whatever – those are not going to go away as issues. Those are going to be very big issues, and there probably will be some whole set of industry figuring out, how do you protect these very valuable assets? Think about it: I f we get to where we have 15,000 satellites up there, and you multiply that by whatever number you want for cost – that’s a heck of a big set of assets up there. And yet, for the moment, what is their protection? What is their protection against civilian attack? What is their protection against robust military attack? So the whole national defense question interacts in a very complicated way with the commercialization of space.

PASCO: So then you have a really exciting job right now when you’re setting up what’s been called the one-stop shop. And we’re still learning what that means. I’d be interested to know a little more about your vision for the Commerce Department. It’s a complex regulatory environment. You have the FCC, of course. You have a limited bit of DoD. You have FAA and now Commerce being put up as sort of the one-stop shop. What’s your vision for that? How do you see Commerce’s role?

ROSS: Well, as a minimum, we would have the direct functions that are being allocated to us, and we would also try to be the interface – kind of, the storefront – through which outside commercial parties could participate – so try to coordinate with some of these other agencies. We work with all the other agencies anyway, so that’s nothing new. It’s just the intensity of our interaction with them is going to grow for two reasons. One, the activity itself was expanding: a lot more units. And second, we’re being given more roles. So how it eventually rebounds three, four, five years down the road – that’s obviously still a work in progress. But the concept of simplification, the concept of trying to get as close as we can to a one-stop shop – I think those are enduring concepts, and I think they’re valid concepts.

PASCO: So as part of that then, obviously, there’s a lot that the executive branch can do with its own authority. But for some things you need Congress to step up to the plate. So where do you see the areas where you really need help from the Congress in order to put this vision into full effect?

ROSS: Well, right now, as you’re aware, there is some pending legislation. Chairman Smith was just here, and I assume he probably talked some about what’s going on in the Congress right now. But there’s a lot of interest in the Congress. There are a lot of congressional people who have a big history with NASA. There are people who have a big history with NOAA, which is part of Commerce. And there are people who touch on other aspects, because, just as there are the various regulatory entities, so too are there various congressional oversight activities. So that’s its own complicated situation, and they’re threading their way, just as we are.

PASCO: Well, I want to be mindful of your time. I really appreciate you being so generous with us, and I want to be sure that I get to some questions from the audience, so I’ll limit myself to just one more. If there were just one thing that needed to be changed, if you could do one thing and do it now, what do you think would be the thing that should be top priority?

ROSS: Have unlimited resources.

(LAUGHTER)

PASCO: That’s a Congress thing, right?

(LAUGHTER)

PASCO: I’m not sure who’s the holder of all of the questions from the audience, but if we could get those, we’ll…

ROSS: You bring them up?

PASCO: Have you racked and stacked these at all?

UNIDENTIFIED PERSON: Yes.

ROSS: Some more to be collected over here. Sir, over here.

PASCO: Let’s see. I’m trying to see if I can actually read…

ROSS: I hope they’ll be edited so there are only easy ones.

(LAUGHTER)

Audience Question and Answer Session with Wilbur Ross

BRANDT PASCO: Well, I can’t read everything on this card, but the general topic is: how is the U.S. and its allies going to deal with the growing problem of space garbage?

WILBUR ROSS: Well, space debris is a huge problem. Think about it: 600,000 objects going around with nobody driving them, 600,000 objects going at something like 14,000 miles an hour. That’s a real problem, debris. It’s one of the few times in the world that we confront aggressive debris, debris really coming at you, as opposed to being more or less inert. So that’s a whole new set of relatively terrifying experiences. The space situational awareness and space traffic management are meant to try to deal with those issues.

PASCO: Do you see that there’s ever going to be a need to take active measures to clean up the space environment?

ROSS: Oh, sure. There probably will be. And that could be another whole industry because we have 600,000 objects now. And we’re going to have 10 times as many satellites in a few years. Hopefully there won’t be 10 times as many objects, but say that there are five times: that would be 3 million objects now to deal with. Even for space, that’s starting to get a little crowded, to have 3 million things careening around up there.

PASCO: Well, this question grows directly from that. What functions within SSA and space traffic management do you consider inherently governmental, given the emergence of commercial markets and products in data collection, processing and advisory services? So: what does the government need to do, and what should be left to industry?

ROSS: Well, the Air Force is – at least at this stage – the primary collector of the data. So I make the analogy to the National Weather Service. We provide National Weather Service data free. And yet AccuWeather and others have made multibillion-dollar businesses out of taking what started out life as a free product and commercializing it. I don’t see anything logically inconsistent with that happening in space.

PASCO: Also, to the extent that activity in space, of course, is regulated, this question goes to the speed of license processing, and an apparent lack of staff to handle the volume of work that they have today – much less when we are trying to get 15,000 new satellites launched in the next few years. And I’m sure there’d be a lot of interest from industry in knowing what Commerce’s plans are to make sure that they have adequate staffing and resources to manage the licensing process.

ROSS: Well, we have to keep going to Congress with our little tin cup begging for money. That’s our strategy.

(LAUGHTER)

PASCO: There may also perhaps be some room for performance-based regulatory processes or general licenses and moving away from…

ROSS: Well, general licenses I tried to address before. Once something is a proven safe, reliable product, there should be a moderation in the amount of paperwork – if any – that’s needed for the next application of that individual thing. On the other hand, safety has to be a No. 1 thing. These are very expensive toys. You don’t want them to have something bad happen. And particularly, as you get to human participation in a larger scale, individual safety becomes even more critical. And I think right now, the rule of thumb that the government is using is to have a 1 in 279 chance of something untoward happening. We can argue: should that be a higher ratio? Should it be a lower ratio? And somebody at some point has got to make a decision: what is the tolerance for risk?

PASCO: So this is perhaps topical to that subject. The question is: will Commerce have an in-house R&D function to support commercial space?

ROSS: In-house?

PASCO: An in-house research and development function to support commercial space activity. And I’ll combine that with another question that’s related, which is basically asking the extent to which the U.S. commercial space activity requires some form of governmental subsidy or support.

ROSS: OK. Well, there clearly is a role for government in supporting space, particularly the more far-out research and development side of things. Projects like the current activities exploring what [Jupiter]1 really is may be a good case in point in that. There’s no immediate obvious commercial use for that information. But I attended a great lecture on it over the weekend and learned some amazing things, and I’ll just share a few to illustrate how out of the box it is. I had no idea that Jupiter is 1,000 times the size of Earth – 1,000 times! And I had no idea that on the North Pole of Jupiter, there are eight recurring octagonal cyclones, each of which is approximately the same in diameter as Earth. And just think about it. These are kind of startling data points. I don’t know yet what they mean; no one does. Also, it’s largely a gaseous environment under tremendous pressure because of the great pull of gravity – 20 times the pressure at sea level here, tremendous gravitational pull –, which makes it quite hard to orbit around it. And the last little data tidbit that I’ll give you, you’ve heard lately they discovered some more planets or more moons around Jupiter. Well, it turns out, some of them are going clockwise and some are going counter-clockwise. How does that come about? That’s a counter-intuitive kind of notion. So I don’t know what to make of all those things. But I bet you five or 10 years from now just having more info about Jupiter will result in us knowing a lot more about something else that’s commercializable. That’s sort of the point that I’m trying to make. That kind of far-out thing clearly is not going to be economical for private sector to do. The next phase of it hopefully would be.

PASCO: OK. Well, I want to ask another commercial question. This is combining a couple of them. Someone from our audience wanted to ask you about the international trade implications for U.S. efforts to dominate space commerce. And that perhaps ties in with another person’s question on opportunities to collaborate with the European Union on the privatization of space. And also, someone’s question on dealing with rivals in space, like Russia and China.

ROSS: Well, those are three days’ worth of questions.

(LAUGHTER)

ROSS: But anyhow, as to interaction with the other entities elsewhere, there already is a well-established collaboration with the European Space Agency and with some others. There is an opportunity being created right now because the European Commission has informed the U.K. that they won’t be able to participate in Galileo or any of the ESA projects once Brexit comes. So that creates a whole big hole for the U.K., and we’re probably the most logical partner for them. But we’ve always had collaboration, and some of it, I think, is not well done. The prior administrations basically vacated space launch. So along about 2010-‘11, we had a 0 percent market share in space launches. And instead, our government has entered into a series of contracts with the Russians. We’re paying the Russians up to $75 million a pop to give a ride for our guys going up to the space station. To me, that’s not the right kind of cooperation. We probably funded something like 15 or 20 percent of the Russian space program. So international collaboration is fine, but it too needs to have some limitations to it.

PASCO: Obviously, looking at the situation we see today, a big part of the solution to not having space launch capability goes to this question. It says, ”Record amount of investment capital is flowing to the space sector. And as a former investor, what could put American risk capital at risk of additional investment?” Slightly awkwardly worded, but perhaps you get the gist.

ROSS: Well, I’ll try to interpret it. The actual amount of risk capital other than from the couple of very well-known very wealthy people is fairly limited. It’s a few billion dollars a year at recent rates. We have to find a way to multiply that and multiply that very quickly because a few billion dollars a year is not going to be adequate to have very rapid achievement of some of these ancillary activities that I described. So we do need more and I think more is starting to come. The European Space Agency has literally spawned a private venture capital fund. It’s small: it’s $100 million and is just getting itself organized. So we’re undertaking to introduce them to Silicon Valley and other providers of capital to start getting some collaboration at that level. But there need to be more, and I think there will be more special-purpose firms, more people knowledgeable about things. But more importantly than that, the time horizon between now and when something commercial is feasible has to get shortened, because venture capital funds generally have a 10-year life. And maybe they can be extended a little bit under some circumstances, but they really try to realize things within three, four, five years.

So you need to have some way to get where commercialization is a little closer than it is in some sectors right now. That, I think, is the other challenge. The other big challenge I mentioned before was making it cheaper to do all these things – so these little CubeSats, constellations, as opposed to a few gigantic ones. That’s certainly thinking in the right direction. Frequency of launch is another problem we have to deal with. When you have relatively few launches from a very expensive facility, you have to amortize that base cost over a very small number of launches. Doubling or tripling the amount of launches will have a very big impact on that. And also, there should be a learning curve. People in aerospace learned a long time ago: when you develop a new plane, that first airplane is ridiculously expensive to build, but by the time you get to number 200, it’s much more economical to build. So repetition of production of the key elements is another big factor in bringing cost down. But we’ve got to bring the cost down to make a lot of these activities feasible.

PASCO: I know we’re getting towards the end of our time with you. I have two more questions I’d like to run through, if we can. First is dealing with spectrum. And I realize that you’re not the FCC. We hope to have a forum focused on the FCC in September, so we’re going to deal with that also. But whenever we have any kind of discussion on space, it seems like all anyone wants to talk about is spectrum issues. And so the question goes to what do you see the Commerce Department’s role as being in ensuring that State has adequate spectrum to accomplish? You know, if we get to 15,000 satellites, everyone’s going to be drinking through a very thin straw.

ROSS: Well, there are really two big dimensions to the spectrum question. The first one is, how much of it does government need on its own? And within government, the main consumer of spectrum is DoD. So trying to pry loose from DoD and other agencies more bandwidth is one component. The other one then is: how do you allocate it? How close together do you permit things to get to be? And those are areas that we had better tread pretty carefully, because you really don’t want to make mistakes there. There are, as you know, some very active pending cases before FCC right now about proximity of frequency. And the other thing to remember is FCC is an independent agency. And that’s not just on paper. It truly is an independent agency, even though it’s governmentally appointed. Our role is to provide advice to them, but we cannot in Commerce – mostly through NTIA. So we can advise them. We can make arguments. We can try to work with them. But they will, at the end of the day, make the determination. And so it’s good that you’re having him come. But my limited dealings with him, as you know, he’s pretty new on the job. He seems like a very reasonable, very grounded, very serious person, so while we may or may not agree with all of his decisions, my belief is that they’ll be well-considered.

PASCO: Thank you. So the last question here – maybe this is a good one to wrap up on. It says, “What, in terms of the whole of government, concerns you most in the space sector?” And maybe that’s just an opportunity to say we’ve been focusing mostly on the Commerce Department. And you’ve mentioned some other agencies. But what do you see as the overarching administration? What are they trying to accomplish here?

ROSS: Well, simplification is the thing. DOT, which is responsible for launch and re-entry regulation, has been tasked with coming up with a whole new regulatory environment by July of 2019. So that’s a whole separate thing that’s really quite important that’s afoot. And that’s part of the same concept that we have with the other aspects.

PASCO: Good. Well, thank you. Mr. Secretary, I can’t thank you enough for gracing us here at Hudson today. It’s been wonderful having your time. There have been a lot of good conversations. And we’re really appreciative of you taking the effort to come down.

ROSS: Well, thank you. I appreciate you folks being here.

Written Remarks Delivered by Representative Lamar Smith

REP. LAMAR SMITH: Thanks to the Hudson Institute and Ken Weinstein for inviting me to be here.

A generation ago, space was largely an unexplored frontier. Few would have imagined a world of reusable private space rockets, global telecommunications and remote sensing, private space stations, celestial resource prospecting, or on-orbit manufacturing. A highly dynamic international security environment has changed space from a sanctuary to a congested and contested domain. At the same time, the private sector is opening up new frontiers and taking an increasingly important role in outer space. New technologies and novel strategies are lowering the costs of access to space. The standardization of space technologies and satellite platforms enable a robust human presence in the sky above us. New entrants, such as SpaceX, Blue Origin, and Virgin Galactic, along with companies with a long heritage like Lockheed and Boeing, are investing significant capital in space exploration. Private equity is funding a new era of innovation that is changing the economics of space activities. With this evolution comes new challenges.

The Outer Space Treaty was developed in 1967 to establish a framework for international space law. Among other provisions, the Outer Space Treaty requires national governments to be responsible for all space activities carried out by their nation, whether the missions are led by government or private companies. American space operators have long faced uncertainty about which federal agency has responsibility for approving non-traditional space initiatives and ensuring compliance with the Outer Space Treaty. In some instances, this uncertainty has constrained capital formation, driving American companies overseas. With increased commercial activity in space, this uncertainty is becoming a larger problem.

Outdated and cumbersome regulations continue to hinder innovation by companies that focus on launch, remote sensing, and non-traditional space technologies. Those are some of the challenges we face. But there are solutions. Continued U.S. leadership in outer space requires us to maximize and integrate the strengths of all three groups of stakeholders: military, government research, and commercial. This will result in a new concept of national power in outer space. We must use the energy of a vibrant private sector and create laws and policies that bring all three communities together, working towards a common end: American leadership in space.

The House Science, Space, and Technology Committee is contributing to this effort. Two of our bills this year established the United States as the jurisdiction of choice for private space activities. The first bill, the American Space Commerce Free Enterprise Act, provides a legal and policy framework that simplifies the space-based remote sensing regulatory system, enhances compliance with international obligations, improves national security and removes regulatory barriers facing innovative space operators. The need for this legislation became clear during the previous Administration, when serious uncertainty arose after U.S. space exploration companies sought payload approval from the Department of Transportation for non-traditional space activities. But the DOT payload approval process is only designed to prevent the launch of payloads that jeopardize American interests and safety. It does not provide for the authorization and supervision of in-space activities, as required by the Outer Space Treaty. So the Executive Branch has been unable to assure the private sector that new and innovative space missions would be approved for launch.

Another important aspect of the bill is updating space-based remote sensing regulations. Hundreds of private remote sensing satellites orbit the Earth today, and we all rely on these satellites for accurate mapping, enhanced agriculture, and improved weather forecasts. But existing law governing the licensing of space-based remote sensing was enacted in 1992 at a time when there were no private remote sensing satellites. The law put the burden on the applicant to justify its operations. This is stifling private innovation and putting U.S. industry at a disadvantage. Our bill fixes this broken system by providing a streamlined licensing process aimed towards approval, not denial. This legislation will spur investment and innovation, which will create new high-paying, high-value jobs across the country. It increases American competitiveness and attracts companies, talent, and money that would otherwise go to other countries. The bill also consolidates regulatory authorities into one federal agency: the Secretary of Commerce’s Office of Space Commerce. The result is a single decision point for the authorization of activities in outer space.

In short, the American Space Commerce Free Enterprise Act ensures the U.S. and its workforce will benefit from the new space economy.

The second Science Committee bill, the American Space SAFE Management Act, establishes a space traffic management framework built on science and technology, space situational awareness, and space traffic coordination. Today, there are eleven hundred active satellites in orbit. In a few years, there will be tens of thousands. A variety of new spacecraft soon will go into operation. They could include private space stations, on-orbit repair and refueling satellites, and celestial resource prospectors.

This Act directs the Administration to coordinate its federal research and development investments in space traffic management. It directs the Administration to work collaboratively with the private sector and establishes a NASA Center of Excellence that will develop, lead, and promote research in space traffic management. This bill also creates a civil space situational awareness (SSA) program within the Department of Commerce. Commerce will provide a basic level of SSA information and services, free of charge, to the public. While the Department of Defense retains the information gathering resources currently used to compile the catalog of space objects, Commerce will augment that with data from other sources, including the private sector and foreign partners. And the Act establishes a space traffic management framework. This framework consists of voluntary guidelines developed by the government, standards developed by industry, and a pilot space traffic coordination program. The pilot program allows the government and stakeholders to experiment and develop best practices to manage space traffic. It is a common sense first step in what will be a long-term process of creating a comprehensive space traffic management framework.

Both of these bills direct the Department of Commerce to be responsible for carrying out the supervision of space activities. The reason for that is simple: because of its longstanding mission and agency culture, the Commerce Department is best equipped to help entrepreneurs and innovators build companies and succeed in business.

Many of the bills’ goals have been included in President Trump’s Space Policy Directives. And Commerce Secretary Wilbur Ross announced a major reorganization of his Department that reflects our bills’ provisions. To ensure success, Secretary Ross is putting people, money, and expertise into a new Space Policy Advancing Commercial Enterprise (SPACE) Administration and a restructured Office of Space Commerce. We should thank the president, the vice president, and Secretary Ross for carrying out this reorganization.

The momentum is building for these bills and the last step before becoming law is approval by the U.S. Senate. We need champions there to get these bills through committee and on to the Senate floor. Farsighted and determined policymakers and scientists led the charge for the first wave of space exploration. Now it is our responsibility to expand our leadership in space, working together with visionaries like Jeff Bezos, Richard Branson, and Elon Musk. The history of space exploration will feature this bipartisan, bicameral bill as having invigorated the next space age and maintained America’s leadership in space. America is the prominent actor on the global stage of outer space. We have the responsibility and the expertise to guide the world toward a peaceable, prosperous, and safe space environment. But we need to act, and act now.

Panel Discussion: Regulatory Efficacy & Efficiency in Space Commerce

JOSEPH PELTON: Good afternoon. Welcome to the afternoon session. We have a real brain trust here with us from the Department of Commerce. We’re going to go through a number of questions and then be prepared to ask your questions from the audience.

First of all, my name is Joe Pelton. I’ve been in the space industry starting at Intelsat, where I was head of strategic policy. And then I’ve had a number of academic positions. I’ve been dean and chairman of the board of trustees at something called the International Space University. I’ve had a Space Institute at George Washington University. And largely, I write books today. I was explaining that I’ve written my 50th book. And someone said, “Why so many books?” And I said, “I’ve heard once that one book in 50 is a bestseller.” I keep trying, so. And I will just say, on behalf of my publisher, I have a number out there. The latest one is called The New Gold Rush In Space. And that’s sort of what we’re talking about today.

So next to me is Kevin O’Connell. He is the director of the Office of Space Commerce at the U.S. Department of Commerce. And he leads an office that is an advocate for space business. And we’ve had a session this morning where we’ve given him a lot of good ideas of how he could help space business going forward.

We have next to him Jim Uthmeier. He is the regulatory specialist. He’s the special senior adviser to the Office of the Secretary and he works on regulatory reform. And he is going to talk about the latest with regard to the regulatory initiatives that have come out of the space policy directives.

Next to him, we have Stephen Volz, who had a distinguished career at NASA and with NOAA. And he’s worked on a number of really exciting projects: iSAT, Calypso, and many other projects.

We have next to him Ian Steff, who is the deputy assistant secretary for marketing. But that is not enough. He has two other jobs: he is performing the duties of assistant secretary for global markets and director general of the United States in Foreign Commerce Service. So I hope you’re getting triple pay for all of those things.

(LAUGHTER)

STEPHEN VOLZ: Yes.

PELTON: And then finally, we have Earl Comstock, who’s director of the Office of Policy and Strategic Planning at the U.S. Department of Commerce. And he serves as the chief policy adviser to Secretary Ross. And I understand he’s adviser on planetary matters – particularly Pluto. So that’s sort of inside joke for any of you who follow the space things.

Anyway, I’d like to start out by asking you: what path forward does the Commerce Department see with regard to space debris and space traffic management? And, particularly, looking internationally to what’s happening at the U.N. Committee on the working group on long-term sustainability of space and the IEDC, can we exercise more leadership at the international level? And what really can we do and should we be doing?

KEVIN O’CONNELL: So I think what we’ve seen…

PELTON: Simple question.

O’CONNELL: Thanks, Joe. I begin week three in my role as director of the Space Commerce. But what we’ve seen so far is a strong encouragement by the allies for American leadership on SSA and SDM issues. I know there were discussions about this at COPUOS a few weeks back. And so that’s the starting point for the conversation. There’s clearly a role in leading a community that has similar values to ours as we pursue this very complex technical mission.

PELTON: OK. Well, Jim, I’m going to go to you next. Our good friend Scott Pace has been a dynamo at work. And we’ve had at least three space directories. But particularly, directory two and three have basically set a whole series of objectives with deadlines of 120 days. This is not the usual Washington way of doing things. Anyway, can you give us an update on how things are going in? And can we really expect those 120-day objectives to be met?

JAMES UTHMEIER: Sure. So in Space Policy Directive-2, the department was ordered by the president to create a one-stop shop: a consolidated and coordinated space office within the Office of the Secretary. And that very same day, we sent reprogramming notice to Congress to try to make that happen. So that’s pending, but meanwhile we’re working very hard to go ahead and get coordinated. People often wonder why Commerce is getting new space responsibilities. They don’t see Commerce as a real space agency. But at the end of the day, as we heard all day, most of what’s going up there now is commercial. It’s not government objects like it used to be. So we deal with these companies on a daily basis – whether it’s spectrum management or remote sensing or international trade, export controls is one we hear a lot about –, we’re touching all these companies on those issues.

So we’ve got a space team now that meets once a week: 20 to 30 people in a room that are looking at all the various issues, and making sure that we are on the same page and we are coordinated. Because if we can’t get coordinated, we’re not going to meet industry needs. And when companies come in to meet with us, rather than the companies walking down the halls of our building, which is about half a mile long, we got a one-stop shop in the room. They can talk about all their various needs in one place. So we are also working on remote sensing. We have an ANPR RAM that’s public now and are collecting industry comments. That 60-day period closes mid-to-late August. But you can submit comments now. You don’t have to wait. So we want everybody to take as much time as needed. But as soon as you submit the comments, we can start to review and incorporate them. And we want to get a proposed rule out as soon as possible after that comment period window closes in late August. You know, we’re going to move fast. So the sooner we can get your work product, the sooner we can address it.

PELTON: Well, just going over to Steve. As Jim just said, people don’t really think of Commerce as space. But to do all the things that are required requires a lot of technical expertise and so on. So is Commerce going to get enough expertise? And what kind of detailing of people or other assembling of expertise is anticipated in the next – well, wherever it can be done without additional congressional authorizations. Or in other words, it takes money. I guess a large tin cup is really needed to make all of these things happen. So could you just talk a little bit about staffing and technical expertise?

VOLZ: Probably not.

(LAUGHTER)

VOLZ: But I think the point – as James was just saying – is how this is a new initiative that the Department Commerce has identified themselves as the focus on. And as Kevin was saying, there’s a lot of international interest. As the space program within the Department of Commerce – which is NOAA and our satellite and information service – we are all part of a large organization, a community that’s been doing this for decades, and operating in space effectively, working through the issues of space situational awareness, making sure we don’t bump into each other in space, traffic management. So I think there’s a capability in the community and capability within NOAA to operate our systems. And what we’re looking at, as we look at STM and SSA on the Department of Commerce side, is to take that expertise and understanding and use that as a model to help inform how the office needs to be staffed up.

I don’t think there’s any intention of replicating or reproducing or replacing the existing intellectual capacity that’s at the Air Force, at NASA, or at some of the other international organizations. But – I heard one-stop shop or window shop – it’s providing the front-end in doing that communication in the commercial sector. That’s the objective. So there is a significant management – it’s space traffic management, not space traffic highway building. So it’s managing what’s there, and not telling everybody how to do what they do. It’s not so much technical, so that we have to add a bunch of full-time equivalent people to do the technical part, but we have to understand the environment, the groups, the players, and find the best management structure to handle that.

So as you said, without funding, without authorization, we’re not going to hire a bunch of people. But we are collecting the input and the community conversation about what would be effective and what would be useful. And when I travel and see with our multilateral multinational organizations, there’s a lot of interest in what the Department of Commerce has done. There is a fair amount of skepticism about what they’re going to do and whether we’re going to be able to do it. But there is an awareness that it is a necessary function to have a framework for how we integrate these dozens or hundreds or even sometimes thousands of new satellites into the orbit construct, where it used to be just a government playground. So there’s a lot of interest and skepticism, but involved players around the world, are I think looking for us to provide management ideas – not so much technical expertise.

PELTON: OK. Ian, you’re sort of dealing with markets and so on. And the last few weeks, I was at the International Space University talking to one of my colleagues, who used to be at AIMS, who’s now an employee of the government of Luxembourg, who set up a $200 million fund to get new space industry off the ground. And they’ve also passed a bill similar to what the U.S. has, in order to encourage new space business. Other colleagues I met are from New Zealand, who also are trying to create new space initiatives, and so on. And as we heard in discussions this morning, the U.S. has a lot of regulations, and a lot of people are thinking they have to go overseas to file their filings, rather than through the FCC and the U.S. processes, with overseas activities. So the real issue here is: is the U.S. falling behind in terms of space markets and the ability to serve space industry? And are they going to be attracted by these new funds and new initiatives by other countries?

IAN STEFF: Well, thanks for the question. I would say that not only are we not falling behind, but we have demonstrated to the world and our partners that this is an area that we must maintain and grow our leadership in. We saw that firsthand. I just returned from Farnborough, with Kim Wells and the rest of the International Trade Administration team. And clearly, what was on display there was the best of the best of American technology – American technology and partnership that the rest of the world needs and demands.

I would say the other thing that is very promising is the services that the International Trade Administration, within the Department of Commerce, provides to our growing space industry: our advocacy efforts within ITA. Right now, we have $4.2 billion worth of active ongoing advocacy projects – 29 different projects. These are projects that foreign governments are inviting U.S. companies to participate in and represents a great cross section of the activity happening there. The other area that I would reference within ITA is the SelectUSA program. We realize, as the secretary mentioned just earlier, that no one country and no one company can single-handedly reap the benefits of space, and therefore, we are inviting the best of the best in the world to come here and invest in our space community.

The last area that I’d mention is the thorough analysis that we’re providing in terms of what those top markets look like around the world. Clearly, the market here is huge, but we’re not the only market, and we need to make sure that companies are competing on a fair and level playing field in these markets.

PELTON: Earl, you’re sort of the chief policy adviser to Secretary Ross. It seems like there really are a number of challenges. We’ve heard a whole lot today about space debris and space debris policies. When people file for new systems, they have to file a lot of information with the FCC about what they’ve done to minimize space debris and what have you. But there seems to be kind of this trade-off of that. On one hand, we don’t want new space debris. But we also don’t want over-cumbersome regulation that stops new initiatives. Another issue – that at least has occurred to me, in terms of this one-stop shopping – is that we know what the FAA office of Space Commercialization and so on requires in licensing and what have you, and other things that the FCC requires in terms of their frequencies and so on. But what seems to be missing, when I read through the policy directives, is the fact that there’s also a need for an environmental statement, and the fact that there’s an EPA in this process. And it seems, to me, that they may be the slowest part of getting things done. So just some comments about how this all works: in other words, you’ve got the FCC – that’s an independent agency –, there’s EPA that doesn’t seem to be mentioned in the directive, and so on. Can we really put this all together and have one-stop shopping and do what we need to do to minimize the space debris? It seems like a really hard task.

EARL COMSTOCK: Thanks for the question. And that’s obviously something that this administration is very focused on, which you’ve really seen grow up over the last 40 years. It is a not well-coordinated process. And to take your example of the FCC licensing: if you really look at the FCC statutes, there’s really nothing in there about the space side as much, but they were a natural spot. You have a treaty that says that governments – you know, flag states – are supposed to exercise authorization and control. So you start looking around. And at the time, when these things were going up, the only real connection – the nexus – was these communications satellites. And so if you really want to go back into the history of it, the FCC’s office evolved this larger thing, because lawyers basically came in and said, “You know what? Somebody has to be supervising this. It’s not just about your frequency assignments. Under the treaty, we have to say that you’re being supervised.” So they devised, basically, organically, a process to do this. And this is what this administration is really focused on: saying, “How do we cut through this process, where different things have been built up over time for different reasons?”

It made a lot of sense to run this out of the FCC, when essentially all you had for satellites was communications. There was a real logical nexus there. But as we look more toward a lot of manned activities and a lot of other activities in space – particularly in space commerce – the question is: where do you now start to focus this? Your point on the EPA – one of the basic questions is: does the EPA have authority in space? You know, we have laws that are written for terrestrial environmental protection, we’ve got ocean protection, but there’s not so much out there that I’m aware of that that covers space. So from a policy perspective, that’s a lot of what the role of the administration is looking at. What we are clear about – and I think what you heard from Secretary Ross earlier – is this administration is very focused on incentivizing companies to come here: “choose us as the flag of choice.” We want to make sure that we accomplish a number of objectives, of not only leading in space, but making sure that we set up a process and provide the best guidelines and frameworks for getting out there to make sure that we minimize the debris issue, we minimize the issues of conflicting trajectories, etc. So it’s a big challenge. But I think what you have in this administration is a lot of intent to get to the bottom of it and hopefully leave the situation well-formulated at the end of the day.

PELTON: Well, you do raise an interesting point about the regulation of outer space. But what people don’t really realize is the fact that not only do we have this issue of space debris, but the various launches we have have major differences in environmental impact: a lot of the solid-fuel rockets leave particulates, and so on. And the people really don’t recognize that pollution at ground level and pollution in the stratosphere is a quite different thing. I did a book where I asked someone to do a paper on this issue. And I was told, “Yes, I’ll do it.” And then an hour later, the person came back and said, “No, I can’t do that.” So it’s a sensitive issue; let’s put it that way. But I really do think that it’s not only orbital debris. If you are going to be launching thousands of satellites, and a lot of them with solid-fuel missiles and so on, it really could become an environmental issue as well.

So anyway, back to you, Steve. You’ve written a number of things about how we can commercialize a number of things that have been government functions and so on. And with Directive-2, there was issue of trying to commercialize some of the current mineralogical services, and so on and so on. Could you comment about Directive-2, and where we are in that aspect?

VOLZ: Sure, sure. So this is a very active conversation right now: the role of the public versus the private, commercial versus government-sponsored systems in space, and how they meet our mission needs. We’re just at a point within NOAA where we just started launching the first of the next generation of satellites that will provide the baseline weather observations for the next 15-20 years. But these were developed and designed 15-20 or 10-15 years ago. So it’s a long timeline for developing satellites. So as we got to the end of the development cycle of the design and started launching these, we knew we had to look at a different approach. When we designed these systems in 2005, there was no smallsat industry. There was no commercial space industry that was providing microsats or (inaudible) – there were the (inaudible), but nothing in low Earth orbit of consequence. It’s an entirely different environment now. We realize that if we’re going to fly something in 2030, it’s not going to be what we flew in 2020 or 2010. So we went through a long exercise. We did an architecture study basically, looking at the services we provide and seeing how we address those. And we opened it up entirely to government owned and built, commercially provided services, commercial data sources that might be applicable, and even outsourcing just ground systems or communications sites. We looked at the whole observing system and found that there are potentially strong places – avenues – where we can outsource pieces of the observing system – not the whole system.

There’s a reliability and dependability function that is really the essential nature of a government service. You have to get the weather every day, and it’s not something you’re just going to outsource, and assume and hope that somebody does a nice job. But things like: we build the Ghost Satellite. It is a great Earth-observing satellite, but it also is a communications satellite. Half of the bus is about power to drive comms up and down. There’s no inherent reason why we can’t outsource the communication side. Can we do the observing, and then find a different way to have a comm satellite handle, in the longer term, the bandwidth to broadcast the signals in a different way? Now that would be a change in our system, and we’ve got to step into that carefully, but that’s one place. Another place is hosted payloads, where we don’t have to build a satellite, we build the platform; we build the instrument and we buy spots on a commercial satellite – Rideau comm satellite and geostationary, or maybe even something like Iridium, if the instrument is small enough. We use somebody else’s investment and platforms, and we build it into our system. Those are two definite examples.

And we’ve also been doing, in the last couple of years, actually piloting the buying of commercial data – radio occultation data is one particular measurement – to see if a commercial sector – not just built to sell data to the U.S. government, but to sell data more broadly – can sell it to us as well, so we get the benefits of their putting the cost of it spread out on the whole sector. And that’s still in the pilot stage. We’ve got a couple of companies that we’ve contracted with, and they’ve provided some data, and we’re going through a second phase to do that. And I think that will be a piece of the architecture going forward. So we’ve looked in this overall, through multiple approaches, to opening up our long-term measurement needs to potential commercial providers and our service needs. And I think there’s viability there. It will probably be a hybrid system in the future. It will not be government owned. But there will be government only pieces, because the reliability, the performance accuracy, etc., are such that you can’t definitely go out to the public for it – into the commercial sector. But there will be large pieces that are commercialized through a long period of transition from the existing to the future state.

PELTON: Do you have a schedule for this…

VOLZ: Sure.

PELTON: …In next year’s budget or what?

VOLZ: So yes, the commercial weather data pilot, which we started in 2017, is actually in the pipeline, and we have been funding that for a couple of years and that will continue. But we actually hope to put it into the upcoming budget a request to actually go out with a hosted payload demonstration, for example. Another thing, which we also were looking at, is going out with an RFI – that’s a request for information – within the next month or so, to offer a free ride to space for commercial sector that wants to fly an Earth-observing instrument. We provide the ride, we give them a platform – it’s called an Esper Ring – on a launch vehicle, and they get to space at no cost. We get the data. So if an Earth-observing instrument that we want to see data like that, we’re not going to invest in the R&D of a new type. But the measurement is very valuable to us. They get to get to space at our cost, but they get then the visibility of flying in constellation with a NOAA satellite. So we can do comparative data and observations. We get the data for free for evaluation and for exploitation, and so both benefit. So that’s an example. As I said, we’ll have an RFI out within the next couple of weeks asking for interest from the commercial sector. And initially, we’ve heard feedback that that’s a good idea.

We have satellites we’d love to fly, but doing all the other parts – getting the launch, getting everything else and not knowing if anybody wants it – has been a hindrance. By putting these price indicators or these interest indicators out, we expect a positive response. And that will launch in roughly 2022. So there’s a bunch of individual things that we’ve looked at with, as I said, our architecture study, which we’re calling SOSA, that indicates where we should start investing in some of these exploratory questions, in order to inform the next generation satellites.

PELTON: Kevin, let’s come back to you, again, in the context of things that could be commercialized and what have you. I’ve looked at a list of the companies that are basically providing space situational awareness services and what have you. And I came up with AGI, which is sort of the main contractor for the Space Data Association: RenCon, LEOLABS, Lockheed Martin, Boeing, Schafer Corporation, Applied Defense Solutions and, my favorite, ExoAnalytics, because they were a spinoff of students of the International Space University – they have kind of a different model. So can you explain how this is all going to come together, because you basically have JSpOC, that supposedly is the source of all knowledge, but you have all of these people now providing private data. And you have the Space Data Association. And then you have a directive that says basically, “Hey, Commerce, you’re really supposed to be doing this for the commercial world.” How is this all going to come together? And is there going to be this continuing opportunity for business to provide space situational awareness services?

O’CONNELL: Sure. I think this is actually one of the reasons why the Commerce Department should be in charge of this. The secretary said earlier that the Department of Defense currently collects most of the data, and that will be the starting point. We will carefully pursue how we would be the provider of that data in an acceptable model to the private sector. That leaves lots of room for the companies that you’ve mentioned, and others, to command for pilots, experiments – pick whatever word you like – to try to raise the capability in all areas, for both defense and also for purely commercial reasons.

PELTON: Because actually it seems to me – again, we sort of pretend at times that the U.S. is the world, but I know that Australia has put in some new capabilities, Germany has a new optical system, and what have you. Can we actually rely more on the world? And does the U.S. have to do this all itself? Or can we create a global system that is reliable and gives sufficient information to the commercial community? I mean, basically the Space Data Association was the industry saying, “Hey, we can do some of this stuff ourselves.” And they had to fight with JSpOC to get a lot of the information they needed. But is the Space Data Association a model of what can be done to develop more commercial activities?

O’CONNELL: So I don’t know that that’s the only model. I think there are a number of models. And I don’t see any reason why we would preclude allied participation in an architecture, if you will, that will do this over time.

PELTON: And again, just as background: we do have the new SBAM system that’s in the Pacific. There are rumors of maybe a new SBAM system in Australia and so on. What technology is the way forward? Is it SBAM technology radar? Or is it more optical systems, or a combination and also more reliance on, well, things like ExoAnalytics? It just goes around and puts telescopes all over the world.

O’CONNELL: I think the answer to that is yes.

PELTON: All of the above.

O’CONNELL: Absolutely. We want to create as many opportunities for innovation as we possibly can.

COMSTOCK: Right. And I think that’s part of the goal of the administration, is in setting up Commerce and having us be the interface for the commercial side of space situational awareness. You’re going to continue to have the Department of Defense, which is going to maintain the sort of catalog that they need to maintain. But the real question is how do you create an interface where commercial companies can come in and provide this information? I mean, one of the things that’s out there right now is the fact that you have essentially a two-dimensional picture up in space. And so we can say that two things are headed toward each other, but I can’t tell you whether they’re headed on an exact collision course or whether they’re going to pass each other, you know, five miles or ten miles one way or the other. And so that’s one of the things that Commerce is going to be out there trying to set up, is: how do we ingest data, and feed that back into the system, and create opportunities for commercial companies? What we’d love to see is a private-sector company get up there and put an asset in space that then gives you that three-dimensional picture.

If there is some private company that wants to do that, then we would be in a situation where we can hopefully feed that data back in. And all the companies that are going up there, we’d love to have them have a point of access where they can feed us their data – their trajectory data, and other stuff –, so that we improve basically the overall picture for everybody. And we’ll always provide a basic level, but there should be a commercial market to provide enhanced stuff. You look at the insurance industry, and hopefully, they’re going to get involved and say, “You know what? If you take these certain steps and have access to this advanced database, we’ll give you a lower insurance rate.” So there’s a number of ways we can look at how to do this, but that’s one of the reasons that the administration has chosen to create a civilian-side agency that’s going to handle this.

VOLZ: If I may, there’s another benefit to that, and maybe an analogy of Earth observation data over the years. We’ve spent a big effort in the last 30 years to make Earth observation data from all the nations free and open. And by encouraging others to contribute their data to a common database, you have a larger collection of data, of which the value is not in the observations but in the exploitation of it. So by having a civilian agency, as Earl was just saying, as the place where you can come to get this information, you do not have to negotiate with the Department of Defense, which is not good negotiating about opening up their data, for obvious reasons. And you create an opportunity where you have a bigger data set – more information –, which, in addition to getting more observations, there’s a lot more exploitation in that data set. Secretary Ross mentioned earlier about different ways to project collisions. So you have a different collision avoidance approach, as opposed to what we might do, which is two-body, two-line analytics, where they just look at collisions. But there may be much more interesting and creative ways to use a complex mixed data set to do trajectory analysis, and to do fleet analysis for someone who wants to fly a thousand satellites. The DoD is never going to do that, we’re never going to do that, but by making a common working space, we can provide the information set, and you can create a whole new industry of analytics – of analyzers and data managers – who can work with those data in different ways.

COMSTOCK: And it just illustrates another reason why the Department of Commerce was selected for this: because of the fact that we have all of these entities across space, not only do we get out there and market and work with foreign governments, but we’ve also already got tremendous experience in NOAA setting these things up. And we’re hoping to use those models, with the experience from the weather systems, to say, “Look, we’ve done this before in other civilian environments. This is how we can build on that experience and expand on it.”

PELTON: Let me change the subject. We’ve been talking about ways of promoting business and so on. But it seems to me there’s several vital activities that, as a government function, I’m not quite sure who’s going to be doing what. And one of them is cybersecurity, and what can be done to protect our vital satellites. And, you know, many of our business activities are now vital assets. You know, if EchoStar and Intelsat and what have you went down, that would be a big problem. What can or should Commerce’s role be in terms of cybersecurity? And also, we really have looked at remote sensing and communications. But GNS services – navigation and timing services – are now absolutely vital. One of the things that people seldom realize is that if the GNS systems – if GPS – went down, that’s used for the synchronization of the Internet, so we’d be losing the Internet, at least in a lot of countries, and so on. So what could or should your role be in terms of cybersecurity and protecting of vital resources? Is that something DoD does? Or will you have a role?

COMSTOCK: Well, we already today have a role. Obviously, cybersecurity is a whole-of-government effort. Department of Homeland Security plays a key role. But Commerce plays a major role as well, through the National Institute of Standards and Technology. We have a cybersecurity framework. NTIA plays a big role as well in working with industry. So this is across the government. Many people don’t realize this, but the Department of Commerce plays a big role in the Privacy Shield, which is the data transfer agreement between the U.S. and Europe, so we have a lot of experience on that. Our role typically is to try to incent the industry to improve their standards. There’s others who have strong regulatory authorities that could take a look at this, but the general approach has been to try to look at best practices and bring those along. Clearly, cybersecurity has got to be front-and-center for any company that’s thinking of doing business in space. You know, we can provide a lot of resources toward that and we have experts in this to do this on a regular basis. But any company that doesn’t take advantage of those resources that are out there is really asking for trouble. So this is something the Trump administration is very focused on. And I think you’ll see, over the coming months, more activity on the cybersecurity front, to get out there and try to not only bring the public along, but to take steps to safeguard our critical industries.

STEFF: I would just add: in terms of on the international front, we’re very much working alongside our NIST counterparts to ensure that, as those foreign governments and foreign industries are moving forward and adopting new standards, they mirror the NIST framework and other good best practices that we’ve developed. So people are not operating on 30 or 40 different sets of standards. And Privacy Shield goes right to that as well.

VOLZ: And I would add too, from the perspective of somebody who’s working in space regularly now, and working on a real-time operational basis with international and commercial partners, we are keenly aware of the need to maintain the integrity of the data, all the way from observation to ingestion into the data systems in operation. So NOAA, having its own space agency within the Department of Commerce, can provide a strong proof by example: a demonstration space for an example. It’s not the only path, because the government solution is not going to be mimicked by the industrial or commercial sector. But it shows where we have issues, and we resolve them and overcome them. It shows the demonstration of an approach to deal with a hybridized system with multiple different contributions to it, and maintain high-security process at the same time.

PELTON: We were discussing this morning the idea that people go out and get a license for a new project and then don’t realize, “Hey, there are obligations that come with this.” I’m wondering to what extent there should be more effort to bring along new companies to realize things that they need to be doing – not only in terms of filing and so on, but things like cybersecurity. I was on a panel that went to Japan, and none of the Japanese governmental satellites at that time – and this was a long time ago – had any real security against fraudulent commands to their satellites, and so on. And I’m sure that a lot of people here say, “Gee, all we have to do is get these satellites up and get them operational, and then it’s gravy form then on.” But there are some responsibilities, and I am wondering to what extent this industry fully realize the things like, “Hey, we need some cybersecurity on our satellites, and make sure that there’s no fraudulent commands,” and so on. Is that something that you’ve thought about, or something that we should be worried about?

VOLZ: I’ll speak first from the satellite side. We’ve been operating in space for 50 years, and it’s not easy, and there are things you do to make sure your systems are secure. But I would not insist that that approach be used by a commercial sector that wants to do it as well. They should go in with eyes wide open. So what we can communicate is the risks, the tolerance that we have, and the reasons we made decisions we made, and not indicate that you should do it the same way. I might put rad-hard computer parts on my computer – my system – so that they’re radiation insensitive to solar storms, but that makes a big, fat, heavy, power-hungry satellite. If you want one that’s small and agile, that you can launch in a year instead of 10, go ahead. But for a solar storm, this is the risk that you’re taking on. So the decision on accepting a risk is the decision a commercial sector has make on their own, but they should make it with eyes wide open – with information. And that’s what we can provide, is a risk-tolerance approach, or risk assessment, that can then help inform the commercial sector. But I wouldn’t tell them what to do. I’d tell them what might happen if they do it a different way. But it’s up to them to decide how to apply their risk.

PELTON: Well, Steve, I’ll throw sort of a thing, since you raised the solar storm issue. You know, there are data now from the MMS satellite and the Swarm satellite of the ESA, that magnetic fields are changing, and our natural protective system against major solar storms may be going down over the next 50 years and so on. And this could wipe out our power…

VOLZ: That’s Department of the Interior’s problem. That’s not my problem.

PELTON: Right.

(LAUGHTER)

PELTON: But…

VOLZ: I don’t do the Earth magnetic field.

PELTON: This is your U.S. government at work (laughter). But seriously, this is an issue that’s starting to be seriously looked at between NASA and DoD and Homeland Security and so on. I do think that this might be one of the things that Commerce really needs to be aware of, if we really are looking at a situation where solar storms might become a bigger part of what we’re doing to protect vital U.S. resources. But also to alert industry, that this might be something that they need to be more aware of. So it’s, if you will, kind of an information thing…

VOLZ: Right.

PELTON: …Just as you were talking about, giving them, “Here’s our experience, here are the issues you should be worried about, and here are some of the things you should worry about going forward.”

VOLZ: You mention that – you mention MMS – a NASA satellite – and Swarm, which is an ESA satellite. So research satellites have been in the forefront of space weather observations for the past decades. NOAA just recently, within the last 10 years, started forecasting weather – well, in 2005, I believe –, and just in the past five years, started actually launching, other than in deep space, some of our own space weather observations. So we do see – and this is an all-of-government approach – that there is a need for a sustained government observation of space weather. But there’s also a need to improve modeling and understanding, which is more complex, which is NSF and NASA and others. And then, what to do with those forecasts and warnings, the impact assessment, which is, “What it does to the energy system,” and others. So it is well-understood that the magnetic field of the Earth changing over time is something we can observe, but not what we can do about it. But there is a clear consensus, I think, across the government and across the community, that we need to be aware of and better at forecasting space weather events for their impact on the Earth.

PELTON: And I don’t know whether everyone knows you can go to NOAA website, and there is a dashboard that shows, in real time…

VOLZ: Space Weather Prediction Center is a NOAA weather forecasting office for space weather. Yeah. Right.

COMSTOCK: I mean, this highlights, I think, part of the reason why this administration is so focused on setting up a better system for space. Because before, it’s always been kind of a haphazard, piecemeal approach. And as you get a lot of commercial companies, in particular, getting up there, a lot more countries that are getting involved, there is a need for a greater system. So you start with best practices, and you see how that works. If that’s not working, my advice to the industry is, again, part of what will happen is a function of your level of responsibility. If you get your responsible actors up there, then that provides a greater incentive for governments to step in and regulate more to control that kind of behavior. We would certainly encourage folks to continue to work together, to do the best practices, so we can keep regulation at a minimum. But it’s precisely for those reasons. If we discover that we’re creating greater risk in space, because market forces really aren’t aligned properly to give people the right incentive, then you do have a conversation within government about what do we need to do to protect that. But what we’re trying to do is get the systems in place where we can look and build on what’s already been done, try to provide that cohesiveness, and then you can have a rational conversation about what, if anything, is needed above and beyond that.

PELTON: OK.

VOLZ: And just want to follow up on that.

PELTON: Go ahead.

VOLZ: I don’t want to give the impression that anybody could fly whatever they want, whatever risk posture they want to take. There’s a common field up there. And if you fly a battery that’s going to explode, it affects everybody else if it explodes. So there are certain standards of behavior that we would expect of the commercial. Everybody that we’ve agreed to as a part of the community of nations that we should, you know, apply. Put the standard at the right level about damage to others, not risking your own mission, if you want to take that.

PELTON: A new thing that’s going to be happening, I think, soon is spaceplanes are going to be flying suborbital. Richard Bigelow seems to think that he’s going to have private space stations and so on. How is the world going to change in the next few years, and what role could or should Commerce be playing, with regard to the safety and the operation of private spaceplane flights, and even private space stations? I’ll give that to you, Captain (laughter).

O’CONNELL: So in my prior life, we did some work with the high-altitude platforms. And that’s, as the lawyers in the room know, a nebulous space between the space and air communities. Obviously, as those capabilities are growing, more capabilities come into market. Those issues are going to have to be worked out by both Commerce obviously and at some level FAA transportation.

PELTON: Right, but I’m talking about, well, this area I call proto-space: sort of above 20 kilometers and up to 160 kilometers, where you have all of these things. High-Altitude platforms are stable. The possibility of not only these suborbital flights for space tourism, but actually flights to and from places up to 80 kilometers, and so on. When you’re mixing together something flying at, let’s say, Mach 6, Mach 7 with something that’s stable with no one in charge – no FAA in charge. Go ahead.

UTHMEIER: Yeah, there’s many areas where, you know, it’s the Wild West and there are no rules. And as the secretary keeps saying, regulation doesn’t always have to be bad. I mean, as kind of the reg-reform, deregulation guy, I mean, that’s kind of the posture I take: how do we cut red tape, but also how do we regulate in a way that enables? I mean, we have companies coming to us saying, “I’m going to put a camera on my device, even though I don’t need to use it to look at the Earth. And I’m not regulated by the FCC, and I’m not owned by the launch vehicle that took me up here. So Commerce is the only place that I can go to be regulated, to get that government stamp of approval, to take out and raise money and have a sense of certainty that the United States has my back if something goes wrong.” You’re completely right. The types of activities in space are going to change drastically in the next decade. And we’ve got to find a way to implement best practices and standards and hope that an insurance market will come around that will help protect companies. But also, you know, regulate it in a way that’s not adding another barrier to new activity.

PELTON: Well, I think the key point here is that we have never had a definition of where does outerspace start. But for years and years, we had commercial air traffic, and then military traffic, and we had outerspace – and nobody had any particular use for what I call proto-space or subspace, or what have you. And now we have all of these things: high-altitude platforms, hypersonic flight. There’s the idea of even robotic freighters that would fly above commercial space and even deep, dark sky stations and so on. And it’s the whole Wild West, and it seems to me that industry and governments may have a lot to lose unless we can get something going.

COMSTOCK: To that point, I think that’s exactly why this administration is focused on this: it’s because you need to put the structures in place. And the reality is: yes, if commercial flights between continents start occurring in that space, there’s going to be a logical discussion to expand the FAA’s jurisdiction and the European air traffic control system. I mean, that is a process that can be handled. I think the question is that nobody knows exactly what that’s going to look like. Are we going to tolerate sonic booms or if they manage to hush them down. So you can sort of speculate about these things. The reality is that there are government structures there, and things will step up and fill the void. What this administration is focused on is doing that in a controlled fashion, as opposed to just sort of letting it happen willy-nilly. So I think there is a lot of focus on this. There’s a lot of excitement about it, and people believe that – to James’ point – you may need some basic regulations to align the market incentives in the proper way, and make sure that people don’t get out there and decide, “Hey, I’m just going to pass off my risk onto all of the other players up there.” So we’re going to put things in place.

But I do think while things are going to develop quickly, one thing we always tend to do is assume that things are going to happen much faster than they actually do. So when you say, “What’s going to change in the next five years?” I would respond, “Nothing that we don’t see right now.” If you look 10 years out, yes, there will be things that we haven’t been discussing as regularly, but probably somebody here in this room has thought of them. So, you know, it’s getting that process in place, and that’s really what the government is focused on right now.

PELTON: OK. Well, a new business opportunity, of course: the space industry. How much do they get involved? Are you involved with them in discussing some of these new risks that are coming along, and whether they can help do that? In the satellite industry, the space industry played a very good role in terms of telling people, “These are things you better do if you want to get a good rate from us.” So, any comments about working with the space insurance, launch insurance or other space insurance people? Go ahead, Ian.

STEFF: On the space industry, I will just say that there are hundreds of new entrants coming into the space industry each and every month. Part of that may be because there’s so much excitement in the industry right now regarding the bold visions that have been outlined by the secretary and others. But I will say that these hundreds of new entrants, that’s not going to be a phenomenon that disappears. And I’m talking not just launch services or satellite manufacturers, but the materials providers, the microelectronics guys that are currently supplying, perhaps, the automotive industry, but see a new market here in the space industry. People like some of my former colleagues in Indianapolis, who used to supply to the motorsports industry and are now supplying to SpaceX. That is a fundamental change that will ensure that we maintain and grow U.S. market share in the space industry to come. In terms of the International Trade Administration’s part in this, it’s helping to grow those potential markets and ensure that those new entrants are having conversations with potential customers, wherever they may be, whether they’re in the U.S. or elsewhere. Those conversations are happening in real time. The engagement has never been at the level that I have seen it within the last two years.

O’CONNELL: Yeah, I think that’s one of the things that the secretary has asked me to focus on intently in the Office of Space Commerce. The extent to which we can robustly engage industry in an organized and disciplined way will be helpful to us in and a couple of ways. One is that it will help the government have early notice that people are coming forward with some of the ideas, like the ones you just spoke about. Second, they can notify us about either advocacy or regulatory concerns they have that we can actually be helpful with proactively.

PELTON: OK. Let’s go back to space traffic management. I have been involved over the last two years with some of the meetings that have been organized between the International Civil Aviation Organization and the Office of Outer Space Affairs, and copious people discussing about what can be done, and how can we move from a Wild West to some sort of structure. And those discussions have been interesting, but they have not really gelled in any way. What do you think can be done in terms of international space traffic management issues, or in the U.S. environment as well? Can we give people a feeling that something better is going to happen in terms of space traffic management going forward?

UTHMEIER: I could start.

PELTON: Go ahead.

UTHMEIER: The first thing we have to do is come up with a plan here in the U.S.: get our heads together and figure out working with industry. And industry wants this. I mean, as people are launching billion dollar satellites, they don’t want to run the risk of somebody else inadvertently or carelessly allowing their object to collide. So industry wants this. We’ve got to set some norms and best practices, and then expect the rest of the world to come up to our standard. And there has to be some sort of legal remedy or enforcement, if that doesn’t happen. And Earl can probably elaborate a little more. He’s been our visionary on some of this, and it is new territory. But if we don’t do it here first, we can’t then coordinate with the rest of the world. And we want to set the standard first, before somebody else does.

PELTON: Earl.

COMSTOCK: I think James basically outlined that perfectly. If you start at the international level, we’ll get nowhere. So the United States really needs to take advantage of the fact that we have a large commercial space industry already developing and we have experience working through other international agreements. But it really is a practice of practice what you preach. So we’ll get out there. We’ll try to work with our industry, come up with best practices, and then extend that to our allies and other folks that want to work on this.

PELTON: Right. However, there is a copious working group on the long-term sustainability of space. And one of the issues that they are addressing is indeed debris and space traffic management. And my understanding is that there have been a lot of very useful discussions and a lot of areas of agreement, but there’s one key space player who, every time there’s close to agreement, says, “No, no, that can’t work,” and, “no, it has to be something different.” I think people on the panel here know the name of that country – a controversial country at times.

But any way, do you think that process can be helpful, or do you think the U.S. has to kind of work out rules of the road, and then work with the allies to implement this, and then sort of create soft law: so-called transparency and confidence building measures. That approach, or somewhere in-between?

COMSTOCK: Well, I think a lot of people like to think of this as something that’s new and novel, but there’s relatively little on Earth that’s new and novel. Probably your best bet is to look at what happened in the maritime world. You know, we’ve been down this road before in this novel, new environment. And I think what you’ll see in space is many of the same things that you see developed in the maritime world on Earth. And, you know, just to observe there, we have a Law of the Sea, which the U.S. was the primary driver behind. Interestingly enough, we’re not signatory to that. But the point is we set the norms, and I think that’s a process that I would say was very successful. It’s one that the U.S. has done in numerous other fora – aviation, not the least of which. So yet to be decided whether it’s a global agreement, or it’s a group of leading countries that set that up, but I think the process is much the same. You have to get out there, build the experience, and look to the foundations that have worked in the past. And these issues of liability and insurance really drive a lot of these things. And so I think we’ve got models we can work with. They’ll have to be tweaked to work with space, but it’s all there. So it’s get out there and leads, and then hopefully brings the rest of our allies along.

UTHMEIER: Earl is a big fish policy guy. He likes to take everything back to the sea.

(LAUGHTER)

COMSTOCK: It all comes back to the oceans. Even our satellites end up there usually.

(LAUGHTER)

PELTON: I have just one more question, so I’m just going to suggest to the audience you might be thinking about what your questions to the panel might be.

So one of the things that’s come up is the fact that people in space spend lots of money on research. NASA spends a lot of money on research, and so on. And so the question is: will you have a research program? I think that the secretary mentioned that there would be something like a Center of Excellence that might be set up that would be with Commerce’s support. So what is the research agenda, and what can we expect out of Commerce going forward?

STEFF: I will just say that, on the research front – on R&D –, Earl mentioned NIST beforehand, and the tremendous role that NIST plays in funding some of that basic research that was so prevalent in my former industry, the semiconductor industry. And we mentioned rad-hard. I mean, a lot of these standards that were developed by NIST enabled future progressions of microelectronics that are now in space. So certainly there are key sectors that we’re already funding in conjunction with the university community. In terms of where the R&D needs for this industry are determined and what production we see, that has to be an industry-led discussion. You know, if this is to be successful, we need to know exactly: where is that industry roadmap? Where is it heading on the international front? Domestically? And then you start thinking, where do those R&D assets, at a whole-of-government level, where do they reside? And who can best interact with the industry and the university community to get that done? That’s just my personal view on where the R&D budgets are heading. And I think there’s huge opportunity, but the best R&D programs that I’ve seen are those that are industry-led, with industry participants and then the government and academia falling behind.

COMSTOCK: And the Space Policy Directives also that speak to that. So, I mean, while we’re all up here on the Commerce panel, the reality is Commerce on R&D. NIST will continue to play a role in foundational research as will other elements of Commerce, but the real work on that is going to be in places like NASA and other departments. So, again, this is a whole-of-government effort, and we’re a part of that, and we’re focused on the space commerce part. But people shouldn’t lose sight of the fact that there is a tremendous amount of other government entities that do a lot of leading work in this space field, and will continue to do so.

PELTON: And, again, going back to the secretary’s remarks: the whole idea of drawing resources from the Department of Transportation, NASA, and what have you to accomplish your goals. And while you still have your tin cup out there, I think that may be the only way to get all the expertise you need to move ahead quickly. So go ahead. Yes, please. You.

Audience Question and Answer Session with Panel Participants

UNIDENTIFIED PERSON: Two questions. Many of the comments in both panels raised the question of space insurance as it relates to all the risk. So I was wondering if someone on the panel could talk about Commerce’s thoughts on the facilitation and development of space insurance, or whether that’s even part of the conversation in terms of planning and risk, and this one-out-of-279 chance of accident. You know, what you’re thinking in terms of space insurance? Second question is: I know from my time at […] that that the U.S. wins in science and technology R&D when it’s leading and cooperating, rather than leading and flying solo. And this relates back to what Earl said a minute ago. So I just wonder what your thoughts were in terms of all the international partners that would like to work with the U.S., you know, how this will evolve into working with a lot of friendly country’s policy, rather than just a U.S.-driven policy.

UTHMEIER: I’m just going to say, starting with insurance, I mean, that’s something we’re just starting to look at, so we certainly have not figured it out. But what makes Commerce such a great place to come up with a long-term policy in space is that we’re a very data-driven agency. I mean, our core function is to collect as much data as we can to provide information to the private sector and stakeholders so that they can adjust and reconfigure raw data in various applications that industry is best designed to come up with. So we’ve got the Bureau of Industry and Analysis and we’ve got a lot of economists that are looking at various different economic indicators. And I think all of that will play a part in this research. If you have any other ideas for us, please come and tell us.

O’CONNELL: Can I say one other thing on that? You know, historically, I’ve seen people propose things for commercialization of the government. And government people – well-intended – have said, “Oh, that could never be commercialized. Come on.” And so space finance and space insurance represent very important surrogate sources of risk that are neither the government, nor the company per se. So they’re important indicators for us. Absolutely.

COMSTOCK: And we just add to that, in our particular case, you’ve got Secretary Ross who, with his business background, is very familiar with the insurance industries and the financing industry. So now is an opportune time for people who want to come forward and talk about both financing space projects and looking at insurance models for this. We’re very open to that and very interested in hearing further about that.

VOLZ: Yeah. And on the second question, I think it sort of tees off the first one, that we’re an information-based agency or department. We have NIST. We have NOAA. We have other elements within the department, who are very focused on collecting data and sharing information. And we do that on a technical basis in many multilateral, multinational organizations, where we define standards for interoperation, we define standards for observations, and for data standards, etc., which allows us then to leverage the investments around the world by getting them to follow our lead. Back to your point: demonstrate competence before insisting on compliance. So that way, if we can do that, then we can lead by example. And that’s really the way that we can leverage those multilateral, multinational organizations.

UTHMEIER: The administration, you know, has an “America First” mandate, but…

VOLZ: Not only.

UTHMEIER: …It’s not alone. It’s America First but not alone. And, you know, if there’s going to be a market to have long-term economic growth, it’s got to be people branching out and not just riding the piggyback of the big government contract. I mean, we’ve got to find ways to make money and have new business ideas, new voices in the conversation – not just the same insulated space community. And that’s going to take all the different markets around the world talking together on this. And the secretary, every time he travels, he says, “What space meetings can we get in there?” So it’s definitely something we’re working on.

COMSTOCK: Yeah. I think, just to be clear, I mean, we’re very open to trying to work with other people. I think that the key is that you need to get out there and get the job done. And if people just sit around and talk, that’s not going to get us very far. So it’s a mix, but we’re open to the cooperation. We’d love to have people follow. We’d love to have companies around the world who want to come here and make the United States their flag of choice. So we’re looking at that international cooperation side. But, you know, back to the point: we need to demonstrate our competence. If we do that, then hopefully others will follow.

PELTON: Just to add one point: I just got back from a session of International Space University. I’m on the executive board of the International Association for the Advancement of Space Safety. And there is at least some talk of a joint venture between the International Space University and the IAASS to create a space safety institute in the United States. And it would be in cooperation with the space insurance industry. So it’s just an idea, but we’ve at least thought about a number of aspects of what it would entail, and raising some money to actually make it happen. Anyway, next question, please.

UNIDENTIFIED PERSON: Hi, I’m […]. I intern for […]. So I kind of come at this from more of a security and deterrence perspective. I’m particularly worried, as we develop this space industry for the United States, that our adversaries will see this and perhaps try to leverage U.S. reliance on space and, perhaps, target satellites. So what ways is the Commerce Department trying to deter those kind of attacks? By cooperating, maybe, with DoD? Are we, like, cooperating with other countries – not just our allies but maybe adversaries? And in particular, I’m wondering if there’s been any development in lifting the moratorium on cooperation with China on that front.

PELTON: Who wants to start with that one?

(LAUGHTER)

COMSTOCK: Well, a couple things. One is the moratorium on cooperation with China is a congressional matter, so you’d have to look at that. Obviously the administration is looking writ large at what is happening in space, and I think all of us enjoyed a period where it was essentially set aside for peaceful purposes. Clearly some of the other countries in the world have chosen that that’s no longer a route, so the United States has no choice but to respond. And that’s why you’ve seen a real focus in the administration on Space Policy Directives. We’ve got a national space strategy now. And, you know, the clear and unequivocal message across the world is we are going to defend our assets in space, and anybody who thinks that they can take advantage of that will probably be sadly mistaken. That being said, this is why there’s a focus on commercial space, as well because we are interested in seeing it continue to be an area for enterprise and cooperation across the globe. So while we’ll maintain our space dominance, and we intend to continue to do that, we’re also going to look at how do we facilitate getting peaceful uses of space expanded and become another global marketplace.

PELTON: Earl, you know, we think of an attack as a physical attack. But to me, the biggest threat is cyber assaults. And it seems to me one of the problems we have is: is a cyberattack an actual attack? And how do we respond to cyberattacks? So could you just comment a little bit about that problem that we have: is a cyberattack really an attack and a declaration of war, or what have you?

COMSTOCK: You know, again, I think folks who are interested in that can look at the national policies that are coming out and the president’s directives on those. But, you know, quite clearly, the United States is increasingly treating a threat in cyberspace as no different from a threat in physical space. And, you know, we would just warn all parties that they tangle with us at their risk. I mean, it’s definitely something that is being very focused on by this administration.

UTHMEIER: One point on this that I think’s important is protecting national security. The answer to that is not, “Oh, let’s try to stifle the supreme innovation of industry.” If we don’t help businesses succeed here, they’re going to go somewhere else, and then they’re not subject to our legal regimes. We’d lose control, and then we’re subject to greater risk of attack. So we’ve got to find ways to help companies succeed and get the license approvals here, while also protecting national security in the process.

VOLZ: And, one other point, Jim, from the point of view of somebody from the satellite side: resiliency is clearly a design feature that is highly prized in our new systems as we look to the future. DoD’s looking for disaggregation – they call it –, where they break up big satellites into multiple little ones. They design them that way. They don’t break them up.

(LAUGHTER)

VOLZ: And as we look at our next architectures as well, having a – we call it “graceful degradation of loss of an asset.” So if you lose a satellite, you don’t lose your system. And the commercial sector’s got the same problem. They have to provide a service. They don’t want to come down just because they have a single-point failure that takes down their whole service: they’d lose their customer base. We lose a lot more. But resiliency into the design is enhanced by more collaboration and participation, because even those bad actors who want to take on our system take down their own at the same time. And so that’s a feature in all of this system designs we’re doing, and not just satellites – ground systems, IT, etc. – being resilient to attacks or to failures of any kind.

PELTON: Identify yourself, please. Yes.

UNIDENTIFIED PERSON: Thank you. […]. So I have a less visionary question – a little more practical, if I might. So this is a great representation and visual of what the secretary means when he says one-stop shopping – I mean, seeing you all up here. Can you talk a little bit about how a new applicant comes in the front door? And then, Kevin, what you do? I mean, you help us decide and how to reach out to Ian? Or whether we need to talk to Biz? Can you kind of talk through that process a little bit?

O’CONNELL: So I’ll talk you through our initial thoughts on that. And we spoke to the secretary last week about this, and I described four components. You’ve heard some of them already this afternoon. The first part is advocacy, or encouraging a fruitful, productive business environment. And that’s already been spoken about by Ian and Steve in terms of advocacy: things done both around the world, but also done within the U.S. government. And those are very, very different things.

The second is removing burdensome regulations, or modernizing regulations. Again, it was said earlier: not all regulation is bad. Commerce thrives not in chaos, but it thrives where there’s at least a modicum of regulation. I think the real challenge there is we have to find a way – the secretary said this – to keep regulations as close as possible to rapidly changing business models and technology. It’s very hard. One of the things I’m doing already is I’m looking for even other parallels in other industries where they’ve been able to keep the regulatory environment up to pace.

Third – I’ve mentioned this already for the office – is that we need a very robust industry engagement, but one that’s disciplined, you know, the extent to which we could meet eight hours a day for the next six years, and we wouldn’t meet half the companies that were involved. How will we process information coming in? What are the issues that companies really want us to look at to deal with effectively? But secondly, what kinds of high-quality information are we going to put back out? When Steve talked about the space weather information before, that’s the kind of unique government data that is potentially of value to commercial companies that are going to make decisions about how they protect their satellites. And so what other kinds of information – some of it may relate to competitiveness, you know – a whole range of things that are out there.

The last part that I’m thinking of for the office is that we need to improve the narratives on how space affects life on Earth. I see a lot of data: I’ve got a whole set of charts so far. How can we describe – for Congress, for other regulators, for regular people – the impact that space has on Earth? And that’s as much a color commentary – I’ll use a baseball term – person in the booth, as much as the person that has all the statistics. How do we improve that knowledge?

How does a licensee come in? Obviously, we have to develop the process. Earl talked about trying to create a structure. I wish somebody would come in and say, “We want to do this.” Again, I said earlier that we need to anticipate better the kinds of folks that are going to come forward, so that the process is in place when they arrive, not the day they show up and say, “Gee, I need to get a license. How can you help?” That we’ve already thought about that.

PELTON: OK, next. Yes, please.

UNIDENTIFIED PERSON: I’m […]. I’m […]. What is being done for private entities who want to come in and do a joint project, and have meetings online and put up their own funding and get an economic consensus and get an agreement?

PELTON: On what kind of project?

UNIDENTIFIED PERSON: Any kind involving space, that they might want to put up a satellite, or buy rights in some satellite’s data, or anything.

UTHMEIER: Well, I think the first thing we’re doing – and the Space Council has been a great resource, just for coordinating all the various offices around the government. I mean, it truly is a whole-of-government approach, if we’re going to do something special here. So as Kevin said, we’re welcoming people to come in and talk about their idea, their partnership, what’s it going to look like: I mean, is this a research focus, or is it servicing-focused? And then, you know, connecting them with the right office to be able to bid somewhere, or connect with the appropriate lenders, apply for grants. You know, just within the last couple of months, the department’s economic development agency and minority business development administration have both issued announcements for grant applicants to come in and seek some matching grant opportunities that are very innovative and kind of adhere to our space vision. So those are just a few examples. But it’s hard for us to be able to read the minds of industry. So as Kevin says, we’re being very forward-looking. We’ve just got to be able to talk to you.

COMSTOCK: And just to add to that, I think, really, in the space industry, you’re in a unique position. You have everybody from the president on down who is focused on this issue. You know, Vice President Pence has been a tremendous leader on this, and he’s got the full backing of the president. I mean, that’s just not something you’ve seen in prior administrations. So you really have an opportunity here to help us build out something quite unique. And, you know, it’s the right point in time. You’ve got the right people in place. And, as James mentioned, the Space Council has just performed this tremendous coordinating effort across the government. So you know, while we’re fortunate to all be in Commerce, and the goal here is to try to give you a focal point for space commerce, space writ large is just playing a much bigger role. And we’re going to get out there, and we’re going to get people back to the Moon and to Mars. I mean, this is going to trickle down across the entire economy. So space is back, and it’s playing a bigger and bigger role. And the great thing is you have an administration that’s fully behind it.

STEFF: I just want to echo that as well. Going back to your question as well, there’s no wrong door into this administration. I mean, not only are we working together, but we generally like one another as well. And regardless of where you enter this administration on space, you’re going to get an answer, and you’re going to get to someone that can help you achieve the initiative that you’re looking to achieve.

Also, going back to the question from GW on the international collaboration, so I had mentioned that I just returned from Farnborough with Kim Wells, who leads our aerospace team in ITA. Many of you know her. While there, we had the distinct honor of accompanying Colonel Al Worden to present a flag that flew on one of the Apollo missions to the Royal Air Force in celebration of the 100th anniversary. If that didn’t tell you everything that you need to know – giving one of those treasures to a great ally like the U.K. – in terms of where are we heading over the next 100 years, or the next 50 years, as we celebrate the 50th anniversary of the Apollo missions, that tells you everything you need to know about where we’re heading. But again, we’ll lead that, alongside those that want to come with us. And I also wanted to thank GW for everything that you’ve done. I had the distinct pleasure of working with Professor Pace, at that time. And I’ll tell you, I’ll never forget the time I’m in first week in the class. You had to determine how much energy you needed to get into orbit. I said, “Oh, gosh, I thought I signed up for a policy class.” In essence, you can’t do policy if you can’t figure out (laughter) some of those tough questions. And so I just wanted to do a shout-out there, and Mogsdon and everyone else that has contributed.

PELTON: Next question. Please.

UNIDENTIFIED PERSON: Good afternoon. My name is […]. My website’s called […]. My quick question is, as far as long-term cooperation is concerned, as you said, international collaboration, right now it’s hard for me to really see that working out, if we can’t work out a deal with China in the South China Sea, as far as the expansion of the militarization aspect and drawing that analogy into space. So it seems like something’s going to have to change – as far as human nature is concerned – between now and then, because we have a tendency to be competitive and then adversarial towards each other. So is that going to fix itself in 50 years or so?

(LAUGHTER)

PELTON: Well, they’re thinking about it.

(LAUGHTER)

PELTON: My own feeling is Russia may be more of an issue than China, so (laughter)…

VOLZ: Yeah. So there are always going to be adversaries, but there’s competitive collaboration as well. Everybody wants to do well and do better – you know, we compete with Europe all the time, but it’s in a healthy spirit of competition. Particularly in the South China Sea, we work with – NOAA works with China, the Chinese Met agency on a regular basis. I’m a member of the CGMS, which is a coordinating group of meteorological satellites. It’s been around for 45 years. It has about 40 nations in it. And you’re sitting around the table with Russia, China, India, U.S., Europe, and we’re calmly, easily talking about how we coordinate our meteorological satellites around the globe. So even though the nations may be competing – or arguing or fighting, figuratively or actively in different places –, there are areas of common interest. Not cluttering the lower Earth orbit is a common interest, notwithstanding the Chinese demonstration.

You know, collaborating on science on observation techniques and interoperability of data, those are common interests that benefit everybody. So we can have competition or conflict at the same time we have collaboration. And what happens, I believe, over time, is the benefits of collaboration exceed the benefits of competition, and you end up with getting more people engaged. We’re now partnering with ISRO, Indian Space Agency, when they’ve been very insular for the past 30 years. And now they’re going to be operating one of their satellites at one of our ground stations, because they see the benefit of being a part of a coordinated group, which is sharing data for mutual benefit. So it’s going to happen. We’re going to be conflicting with each other, fighting, for the rest of our, you know, species. That doesn’t mean we can’t still benefit from collaboration as well. And I see that happening in our multinational organizations.

COMSTOCK: It really does come down to having a common interest. I mean, if you think about one of the first joint efforts we had with the Soviets, it was actually on search and rescue. So…

VOLZ: SARSAT. It’s alive and up…

COMSTOCK: …the SARSAT system is still up. They had a common interest. We had a common interest. So we were able to cross that divide. But yeah, you’re going to continue to see a difference of opinion with China on a number of issues. But that doesn’t mean we can’t continue to collaborate where it’s in our mutual interest to do so.

PELTON: I’d just like to add the fact that when this all got started and we negotiated the Outer Space Treaty, it really was the U.S. and Soviets: if they agreed, almost everybody else could agree. But today, we have over 80 countries in the Committee on the Peaceful Use of Outer Space, and that includes Cuba, and China, and Russia, and the whole idea of getting unanimous agreement becomes very, very difficult. So part of the problem that I think we have is that we do have a structure that is creaking, because we have too many countries trying to reach unanimous agreement on things. And that’s why I think we are pushed back to what we’ve talked here today of so-called transparency, and confidence-building measures, and soft law, and best practices, and so on. And then things can grow from there. But it is very hard to get things through the U.N. processes with over 80 countries on the committee. Next? Please.

UNIDENTIFIED PERSON: If I may. First of all, thank you very much. I’m wondering: it seems like there’s a lot of exploitation of some of the lower orbits today, right? I wonder, as we move higher and higher out of Earth’s gravity well – say, geosync, or some of the higher orbits – does the military worry at all about some of our very high-value systems – early-warning satellites for nuclear missile launches and such –, once commercial satellites are reaching those altitudes?

VOLZ: I don’t see too many uniforms on this panel.

(LAUGHTER)

PELTON: Right. Right.

VOLZ: …We’re going to be able to answer that.

UTHMEIER: I think I’ll go back to what I said a little bit earlier, which is, I mean, I think there’s always going to be a worry when you have more and more things going up there. But we’re reaching an era where it’s tough to hide things in space. I mean, we have the technology to see pretty much where everything’s at. So I think you’re going to see the military adjust a little bit. I can’t speak for them, but I think their posture is going to be more enabling of commercial industry in the U.S., because, like I said, if we don’t help people do it here, they’re going to do it somewhere else, and it’s going to be an even bigger problem at that point. But you’ve got great cooperation among all the principals. You know, about a month ago or so, the secretary, along with administrator Brian Stein and General Hyten, were on a panel together. They had breakfast that morning. They talked about all of these issues in a really exciting way – I mean, in a very intimate, friendly way. And it’s a full, whole-of-government, team approach. And, you know, they’re all attentive and excited to see those big things happen deeper into space. Everybody wants that to happen. I mean, you’ve got the secretary: he spent the weekend studying up on Jupiter and all the new moons and planets being discovered. So I mean, that’s the type of person we’re dealing with. And we’ve got to ride the wave of interest and excitement as long and fast as we can.

VOLZ: The features of a good space-traffic management system with the commercial and government LEO – lower Earth orbit – are just as important in geo, and they’re of intense interest to our DoD partners as well, just like AIS systems on ships. You want to know where they are, and you want to make sure they’re all broadcasting the same way so you can track them. So it’s definitely an interest. If it works well for all of us, it’ll work well for our security side as well.

PELTON: OK. I see no further questions. I know that the weather is probably going to get worse. So I think, unless there’s someone wanting to make a last-ditch question, thanks to all of our wonderful panelists…

(APPLAUSE)

1 Editor’s note: Secretary Ross’ initial references to Pluto have been corrected to reflect Jupiter in this transcript.
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