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The Nature of Private Enterprise in Space

What I learned from space lawyer Jim Dunstan, CMC '80

Robert Bauman

Last Updated: 5/10/09 Section: Alumni Spotlight
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Expectations are high for the burgeoning space tourism industry. By the year 2020 the Federal Aviation Administration (FAA) expects that 10,000 people will have flown in space. Some of the companies that will be taking these tourists on their suborbital ride are expected to begin launching as early as next year. These facts give rise to the question: what will be the nature of business in space?

To answer this question, I spoke over the phone with Jim Dunstan, self-described "space lawyer." Mr. Dunstan graduated from CMC in 1980 with a degree in Political Science. Fascinated with law since an early age, Dunstan attended Georgetown University Law Center where his other interests, math and science, led him towards a career in computer game and space law.

But what exactly does the term space law mean? In fact, the name is perfectly descriptive. Confusion results because many look at space and see it as a fundamentally different playing field. They believe it is a realm so different from our current earthly one, that it must require a new mode of thinking. Yet to quote Star Trek, space is nothing but "The Final Frontier." It is no different from the frontiers of the past - whether the American West or the outskirts of the Roman Empire. Space requires the rule of law so that the new frontiersmen can prosper. And those braving the frontier are increasingly private enterprises.

Activities in space are governed by a series of treaties, the most important of which is the Outer Space Treaty (OST). Many treaties have attempted to replace the OST, most famously the Moon Treaty, but they have not been ratified and as such bear no legal weight. Since 1967, under the OST, national governments are responsible for the space-related actions of their citizens. That is, if a wayward rocket launched from Arizona strikes your home, it is the U.S. Government you turn to for damages. As a result, nations have a clear interest in monitoring and regulating private enterprise. Understandably, private businesses would prefer to avoid the resultant morass of bureaucratic red tape. However, government inference is an inevitable result of the OST's delegation of liability.

Of additional interest to would-be space entrepreneurs, the OST famously states: "outer space, including the Moon and other celestial bodies, is not subject to national appropriation." Hence, it would appear the linchpin of commercial activity, private property, is not allowed in space. But as Dunstan makes clear, quasi-private property does in fact exist. Satellite operators freely buy and sell satellite orbits, the clearly identifiable pieces of space in which their satellites operate. Clearly, these orbital spots are freely transferable and their possession confers a right to use the spots as its owner sees fit.

In addition, the Untied States and Russia have stockpiles of moon rocks that they have declared property of their respective governments. This has established an important precedent. It is commonly understood that while no country or individual can lay claim to an entire celestial body, they can claim ownership of resources mined from its surface. Interestingly, Dunstan has recently been involved in a related legal question. If it were possible to corral a small asteroid into Earth Orbit to mine its surface, could a company lay claim to the entire asteroid?

Seeing that the current state of space law does not inherently preclude private enterprise's involvement in space, I asked Dunstan to help me understand the current model of space exploration - government run operations. At this Dunstan adamantly explained, "NASA does not equal space!" NASA is not even the largest program in space - that distinction belongs to the U.S. Department of Defense. In his opinion, NASA is in shambles and in its current form it cannot get the U.S. back to the moon. He argues that it is not relevant as currently organized. The lesson, in Dunstan's strong words - it is important to remember that first there was space, then NASA, not the other way around. Nothing about space makes private business nonviable.

The current economic model employed by the US government also ensures space operations remain limited. The government pursues few projects because they are too expensive. Yet they are so expensive because NASA launches so few payloads. With so few launches, each payload becomes extremely important.

As a result, projects tend to grow and expand. Instead of launching one payload to perform one task, NASA attempts to lump multiple missions into one. This causes expenses to balloon out of control and poses significant engineering hurdles as payload requirements grow ever longer. Dunstan described this phenomenon as the self-licking ice cream cone. The current economic arrangement's primary function is to perpetuate its own existence.

But private enterprise is doing things differently. They have broken free from the traditional cost-plus contracting favored by government. Small corporations, often funded by multi-millionaires who made their fortunes in other industries, are now pursuing their own dreams in space.

This is more important than it first appears. Today, children have a greater chance of becoming an NBA star than they do of becoming a NASA astronaut. How can we expect them to maintain an interest in math and science and a passion for space exploration when so few opportunities are available to them? Private business provides the opportunity to open up space to thousands more people. When a trip in space is just a plane ticket away interest in space cannot help but grow.

Today, Dunstan says, the space revolution is already underway. Space tourism operations, space mining operations and an assortment of other business ventures will require massive infrastructure for support. This means jobs and the explosion of a whole new sector of the economy. Again, the frontier metaphor is useful. First, a frontier fort appears to tame the wilderness and provide stability. But within a few years, the fort is surrounded by a sprawling town powered by commerce. The value of a foray into the frontier is not that first fort, but the town and the infrastructure that grow around it.

Companies such as Armadillo Aerospace, Bigalow Aerospace, and XCOR Aerospace are opening up that new frontier. According to Dunstan, these are only the vanguard of a space industry that will soon be larger, more productive and more promising than we can currently envision. As this Space Revolution takes hold, it will be people like Jim Dunstan who will shape our common understanding of the Final Frontier -- and develop the rules by which we will explore it.


Robert Bauman CMC '10 is a contributing writer for the Claremont Independent.

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Viewing Comments 1 - 2 of 2

rikerjoe

posted 5/15/09 @ 1:09 PM PST

This article is long conjecture and light on substantiation.

In looking at the viability of the exploration and exploitation of space to the benefit of humanity, the article fails to touch upon several of the fundametal tenets that any business would use in determining the viability of a market: is the risk:reward trade favorable given the technical difficulties and uncertainties?

In looking at space, the technical risks currently are high. (Continued…)

kedes

posted 4/11/10 @ 12:20 AM PST

You are mistaken. I suggest it to discuss. Write to me in PM.

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