Tuesday, June 18, 2013

Proposed US ITAR Regulations Impact Space Tourism & Satellite Servicing

          by Brian Orlotti
Virgin Group founder and chairman Richard Branson with aerospace engineer and SpaceShipTwo designer Burt Rutan. Will these gentlemen end up as "traffickers in controlled goods?"

For the past decade, the US commercial space industry has been fighting to remove export restrictions placed on it during the late 1990s. Change is now on the horizon…but in a "one step forward, two steps back" sort of way which would remove some restrictions on commercial satellite technologies while maintaining and adding others related to “man-rated sub-orbital, orbital, lunar, [and] interplanetary” spacecraft, such as the Virgin Galactic (VG) SpaceShipTwo and the XCOR Aerospace (XCOR) Lynx suborbital spacecraft.

Also affected would be technologies related to “space-based logistics, assembly or servicing of any spacecraft” such as the Canadarm derived technologies currently being developed by BC based MacDonald Dettwiler (MDA) for the Defence Advanced Research Project Agency (DARPA).

In the late 1990’s, commercial satellites and their components were moved by law onto the United States Munitions List (USML), a list of products, services, and technologies designated as defense-related by the US State Department. Items on this list include weaponry (firearms, artillery, explosives), military vehicles, and spacecraft and associated equipment.
The US Munitions list. From a presentation on US Export Control Laws and Regulations by Bob Tucker.

Any item on the USML requires an export license from the US State Department to be exported (i.e. given to a non-US citizen), though exemptions are possible under certain conditions. Putting spacecraft onto the USML also placed them under the restrictive umbrella of the International Traffic in Arms Regulations (ITAR).

These moves were officially meant to block the flow of space technologies to nations such as China and (unofficially) to maintain US space competitiveness by erecting trade barriers to the free flow of information.

Ironically, these moves harmed rather than strengthened the US commercial satellite industry. At a stroke, US satellite makers were essentially denied access to both foreign markets and lower-cost launchers for their products. Over the next decade, a significant US share of the global commercial satellite market was lost to lower-cost players like China and India.

In December 2012, however, years of lobbying by the US satellite industry and other space advocates paid off. A provision in the fiscal year 2013 defense authorization bill passed by the US congress struck out the late-90s language that placed satellites and related items onto the USML. The bill did maintain prohibitions on the export of such items to certain nations, including China.

While the bill did remove language from the earlier law that put satellites and related components onto the USML, it did not itself move those items off the list and back onto the less-restrictive Commerce Control List (CCL), administered by the US Department of Commerce. Instead, the law simply restored to the US President the authority to determine which technologies should be on which lists.
The XCOR Lynx suborbital spacecraft. 

The Obama Administration first gave clear signs it would enact reforms when it published a report last year on the national security implications of space export control reform. This report included, in an appendix, a draft of a revised description of Category XV (the section of the USML dealing with spacecraft and related items) that removed commercial communications and many remote sensing satellites. On May 24th 2013, the Obama administration published its proposed new USML Category XV, as well as a list of those items that would be moved to the CCL. With the release of the draft Category XV, the US State Department has invited comments from the public until July 8th. A final form of the new Category XV is expected in November or December.

Though the draft USML Category XV finally alleviates one of space advocates’ long-running concerns, moving commercial satellites off the list and thus out of the remit of ITAR—it may have introduced an even bigger issue. The new draft has added “man-rated sub-orbital, orbital, lunar, [and] interplanetary” spacecraft to Category XV of the USML. This would include vehicles like SpaceShipTwo and the XCOR Aerospace Lynx. This addition would make it more difficult for NewSpace firms to carry out plans to sell and operate their vehicles outside the US.

Another emerging market threatened by the proposed Category XV changes is the nascent satellite servicing field and the draft Category XV list of technologies that would remain under ITAR includes those that provide “space-based logistics, assembly or servicing of any spacecraft” (i.e. refueling).
An overview of the DARPA Phoenix satellite servicing program. Although considered to have the best technologies for the project, MDA was unable to win major contracts from DARPA until the June 2012 acquisition of Space Systems Loral provided the US based facilities required to achieve ITAR compliance.

As outlined in the October 21st, 2012 blog post "MacDonald Dettwiler Key Supplier for DARPA Satellite Servicing Demonstration," at least one Canadian company has already been selling space based logistics, assembly and satellite serving/ refueling technology  into the US and it is unclear how any change in regulations will effect operations.

However, other newspace firms, traditional aerospace industry groups and advocates have viewed this as a backwards step, with the US losing a competitive advantage. The new draft USML Category XV could potentially harm the nascent US suborbital space industry the way the US commercial satellite industry was in the 2000’s. As such, these groups intend to intensify their lobbying efforts during the run up to the final draft expected in November/December.

Commercial suborbital vehicles and satellite servicing have the potential to rejuvenate the space sector and bring new jobs and industries to a world in continuing economic difficulty. These new systems are not being designed as weapons, and the perceived risks are far outweighed by the potential benefits.

Where would today’s aerospace industry be if the Wright Flyer had been so constrained?

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