Sixty years ago, the United States was focused on a “space race” with the Soviet Union — for lunar bragging rights and military capabilities. Today, as the Space Foundation’s annual Global Space Activities report highlights, global space activity totaled $330 billion in 2014, three-quarters of which was commercially related. While U.S. space companies compete well in this market, we could and should be doing much better.
A number of European nations, as well as Japan, Russia and India, view the space market as a strategic commercial opportunity for growing their economies — and so should the United States. Yet in the past, we have consciously limited our own expansion with detrimental laws, a lethargic interagency review process, and political apathy — all of which seem to be continuing today even as new, global commercial space opportunities are growing.
A classic example of this was the 1998 congressionally mandated imposition of munitions-level export controls on satellites and related technologies. Before 1998, U.S. companies had a 63-percent share in the global commercial satellite market. Today, because of the restrictions, U.S. market share has plummeted to 30 percent, resulting in the loss of billions of dollars in export sales and thousands of potential well-paying jobs. This law not only hurt company bottom lines, but had a detrimental impact on our space industrial workforce, drove up costs for U.S. government satellite purchases and encouraged other nations to develop critical technologies where we once had the advantage — and stronger control over who had access to these technologies.
Thanks to the efforts of the Obama administration, a series of reforms was put in place, removing most satellite technologies from the Munitions Control List — modernizing most export controls for friendly nations and giving U.S. companies a fair chance to compete for international commercial satellite contracts. AIA was also encouraged that the satellite export reforms meant that further reforms could be done under a more typical interagency process not requiring congressional intervention.
Unfortunately, while the interagency process does not require congressional action to enact most changes to export regulation, it does not appear to be much more responsive to the commercial need for prompt action. After the 2014 release of the new commercial satellite export rules, it was widely recognized that some modifications were needed to assure companies could be competitive in Earth- observing instrument apertures, human spaceflight regulations and other areas. Comments were provided by industry to the State and Commerce Departments in June 2014 — over two years ago — and still, no final changes have been published.
As the voice of American aerospace and defense, AIA urges the Obama administration to immediately publish the final rules for Category 15 — Space Systems — in order to allow our industry to respond to competitive changes in the global marketplace. Right now, U.S. companies lag behind internationally competitive offerings, and we’re falling further behind. For too long, our nation has acted as if commercial space was something that was “nice to do,” and as if only government space programs were needed to sustain the industry. That is no longer the case, and it is time to recognize that the health of our nation’s space industrial base is intertwined with commercial market success.
David F. Melcher is president and chief executive officer of the Aerospace Industries Association, a Washington-based trade group.