Export Control Rules Hindering Space Entrepreneurs

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The U.S. government export control rules that have made it difficult for U.S. satellite manufacturers to share technical information with foreign partners and insurers now are causing headaches for the entrepreneurial companies trying to develop of reusable launch vehicles (RLVs), members of the Commercial Space Transportation Advisory Committee (Comstac) said last week.

The U.S. International Traffic in Arms Regulations (ITAR) rules that govern the export of weapon systems, a category that includes many space systems, restrict how the developers of reusable launchers can collaborate with non-U.S. individuals and organizations.

“ITAR, once the nemesis of the U.S. satellite industry, is back to undercut progress in RLV development,” according to a presentation given during the Comstac meeting by Michael Kelly, chairman of the Comstac committee’s RLV Development Working Group.

“ITAR is not a killer for us yet, but there are opportunity costs that we can’t quantify.” said Jeff Greason, president of XCOR Aerospace and another member of the working group. ” It also prevents hiring foreign national experts [who] would help us to develop our technology.”

Similar to the problem that plagued satellite manufacturers, RLV companies have been handicapped from communicating freely with their primarily European insurers, Kelly said. Another factor working against the RLVs is that their chief customer, space tourism entrepreneur Sir Richard Branson, is British, he added.

It is time to acknowledge that ITAR has hurt national security by causing U.S. satellite companies to lose their “technological edge” on foreign competitors, Kelly said. The same risk exists with RLVs, he added.

The RLV working group urged Comstac to weigh in on the issue in an “appropriate manner,” Kelly said. In addition, the RLV working group will provide comments on the experimental permit guidelines issues by the Federal Aviation Administration last week.

Further, the RLV working group requested that the administration identify appropriate channels, if any, for Comstac to express its concerns about the ITAR rules, Kelly said.

Comstac, an advisory body of the Federal Aviation Administration, provides information and recommendations to the agency’s administrator, Norman Mineta, who dropped by the meeting Thursday and said that the commercial space industry is at a “critical juncture.”

A new class of space entrepreneurs, investors and inventors have emerged and set their sights on carrying passengers by 2008, Mineta said. The recent competition to spur the development of reusable launch vehicles is helping to spur the space industry to reach the “next level,” he added.

John Vinter, Comstac’s chairman and president of International Space Brokers, said the “fundamental problem” of ITAR must go back to Congress for a solution. Satellites are on the munitions list and lawmakers need to take action to remove them, he added. “ITAR is still the really big issue,” Vinter said.

“Rocket technology must be controlled under ITAR,” said Ann K. Ganzer, director of the U.S. State Department’s Office of Defense Trade Controls within the Bureau of Political/Military Affairs, during an interview after her Comstac presentation. Anytime a company wants to work with “foreign persons,” it would be subject to ITAR rules, Ganzer said.

The State Department is looking closely at the plans of the space industry and is willing to work with the affected companies to address their concerns, Ganzer said. She encouraged space company representatives to talk to State Department officials to ensure their actions stay within “laws and regulations.”

Patricia Grace Smith, associate administrator for Commercial Space Transportation at the Federal Aviation Administration, said it is important for Comstac to frame the ITAR issue appropriately by using examples and specific instances.

Larry Williams, another Comstac member who also is vice president of international and government affairs at Space Exploration Technologies Corp., said the RLV/suborbital space tourism industry has “slightly different” issues that are better addressed separately from the other ITAR concerns.

Suborbital space tourism has been a hot topic since 2004 when SpaceShipOne became the first privately financed vehicle to travel into space.