Defining “Commercialization” of Space with NASA (Part 1)

Last week NASA held an online Symposium open to the public to discuss the meanings and contexts of Commercial Space. The first three days of the conference included a Keynote speaker and four panel sessions which we’ll recap over the next week. The first session focused on what, exactly, the commercialization of space is.

One of the interesting points outlined by Dr. Ken Davidan, the Director of FAA’s Office of Commercial Space Transportation (AST), was that the term “commercial” is contextually ambiguous as it has changed throughout history.

This is a valid observation because even when governments were seemingly the only entities involved in space exploration during the era starting in the late 1950s, many private contractors and companies were supporting the effort. We tend to think of “commercial” as pertaining only to market forces, entrepreneurial activity, low-cost solutions, and including private firms and finance. Another definition Dr. Davidan offered was “private appropriation of the surplus and private investment decisions''. He went on to propose that commercialization could be defined based on a Variation-Selection-Retention model that answers three main questions about any space-related company:

  1. “Do they appear to demonstrate independence for their parent SOE or government agency?”

  2. “Does the company have some private parties taking a risk (through ownership, investment, or other means); even if the majority shareholder is an SOE?”

  3. “Do they sell their products (or services) to customers other than the government?”

The conversation continued with the Contextualizing Commercial Space Panel moderated by S. Pete Worden, Chairman of the Breakthrough Prize Foundation. The group came up with four primary motivations that private space companies have when it comes to entering the industry:

  • Political - such as nationalism

  • Scientific - studying and making discoveries

  • Betterment of the human condition on Earth and in Space

  • Cultural - exploring the unknown

The panelists then used history to show how the commercialization of space and many emerging technologies, in general, flourished under the guidance of both private and public organizations.

For example, the transcontinental railroad in the U.S. was promoted by Congress by doing “enough, and only enough” to regulate the railroad. It provided loans, granted property and patent rights, guaranteed sales, and allowed revenue from transportation fees to entice private firms to take on the project. This proved more successful than the original attempts of the Federal, State, and local governments alone.

The next panelist, Wendy Whitman-Cobb from the US Air Force School of Advanced Air and Space Studies (SAASS), used the aviation industry as an example of why the US government had to step in and make sure that private companies demonstrated safety and how the same is true for the spaceflight industry today. These requirements need to be streamlined and standardized so new private companies can have an easier way to enter the market. This is one of the challenges Lunargisitcs is tackling through distributed ledger technology which can store and present that data simply and concisely for all participants.

Space innovation is first and foremost rooted in National Security so these considerations are important for lawmakers to decide what part of the industry should remain under government control and what can be built out by the private sector. In 1991, the U.S. Commercial Space Guidelines NSPD 3 promoted the transfer of government-developed technology to private companies and encouraged agencies to participate in cooperative research, according to Deganit Paikowsky from the Hebrew University of Jerusalem.

This collaboration between public and private is what will continue to drive the commercialization of space for decades to come.

The last day of the NASA Symposium will be on March 25th which will include a Keynote speaker and another panel.

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