When Congress created the National Aeronautics and Space Administration (NASA) in 1958, it did not consider the need to commercialize space. At the time, the United States was fighting the Cold War against the Soviet Union. The purpose of the new space agency was to bring together America's many space programs to compete with the Soviet Union, which had launched the first satellite into orbit.
NASA's missions, as defined by Congress, were to expand human knowledge of Earth and space, to preserve America's role as a leader in "aeronautical and space science and technology," and to cooperate with other nations in the pursuit of these goals. Not until 1984 did Congress add the requirement for NASA to "seek and encourage to the maximum extent possible the fullest commercial use of space."
The Legal Framework to Support Commercial Space Activities
The legal framework to support commercial space enterprises gradually evolved in response to the development of space technologies and the maturing of space industries. The U.S. Defense Department set the first major space business into motion by launching the Satellite Communications Repeater (SCORE) in 1958. The orbiting vehicle could receive and record audio signals from ground stations, then rebroadcast them to other locations around Earth, creating a rudimentary global communications delivery system.
Arthur C. Clarke was the first to suggest using space to facilitate communications. In 1945, in a paper titled "Extraterrestrial Relays," Clarke proposed a three-satellite constellation, placed in geosynchronous orbit 35,786 kilometers (22,300 miles) above Earth, in which the satellites could send and receive audio signals. Although SCORE operated only two weeks before its batteries died, it validated the concept of space communications and opened the way for private industry to build a network in space.
Private industry subsequently developed two communication satellites, Telstar and Relay, which NASA launched in 1962. The satellites were powered by solar cells and relayed telephone, television, and data signals between ground stations on Earth. The success of the new technology led Congress to pass the Communications Satellite Act—the first commercial space legislation. The act established the Communications Satellite Corporation (Comsat), a partnership between government and private industry that in turn brought 12 other countries into a consortium to fund and operate a nonprofit global communication satellite network dubbed Intersat.
The creation of additional satellite communication networks followed, including Eurosat, Arabsat, and Inmarsat. Government was involved in all these systems. Not until 1974 did private industry place into orbit a purely commercial satellite—Westar—which was financed by Western Union. The satellite offered video, audio, and data services. Soon after, RCA launched Satcom, designed with solid-state transmitters.
At the beginning of the twenty-first century there were some 500 satellites orbiting Earth. In addition to communications, satellites are used for remote sensing, navigation, and military purposes. The Federal Communications Commission licenses communication satellites.
Facilitating Commercial Payloads
Space launch vehicles, like satellites, were originally developed in partnership with the federal government. Until 1984 U.S. private industry relied on NASA to boost commercial payloads to space. With the passage of the Commercial Space Act, NASA was removed from the launch business—except for the space shuttle—and the industry was allowed to operate as a commercial enterprise. Thereafter, satellite producers could contract directly with launcher providers to deliver payloads to space. To ensure public safety, the government requires all launches to be licensed. Originally, this was the responsibility of the Department of Transportation, but it was later transferred to the Office of Commercial Space Transportation at the Federal Aviation Administration.
Commercial space enterprises have grown to include remote sensing. From space, satellites can collect spectral data that has commercial applications in such fields as natural resource management, urban planning, and precision agriculture. The licensing of remote sensing satellites is the responsibility of the National Oceanic & Atmospheric Administration.
The Commercial Space Act of 1998
In 1998 Congress passed a series of amendments to the Commercial Space Act to further promote the commercial development of space. One provision authorized the licensing of space vehicles that re-enter the atmosphere—a response to the development of reusable launch vehicles . The legislation encouraged the commercial purchase of remote sensing data for science applications, instead of reliance on government employees to build and gather such data. It also required NASA to establish a market-based price structure for commercial enterprises aboard the International Space Station (ISS).
NASA and the Department of Defense
Congress annually enacts legislation to fund NASA and space programs in the Department of Defense (DoD). These bills often contain policy directives. For instance, legislation in 1999 to fund NASA included a provision to allow the space agency to retain funds generated from commercial activities on the ISS.
Jurisdiction over NASA and DoD space programs is spread among several congressional committees. The Armed Services Committees in the House and the Senate consider policy issues involving defense space programs. Oversight of NASA is the responsibility of the Science Committee in the House and the Commerce Committee in the Senate. The Appropriations Committees in both the House and Senate provide funding for space programs.
Finally, the president issues legal directives that affect the development of space commerce. Presidential order has increasingly opened to the public the Global Positioning System (GPS), a constellation of navigational satellites built for military purposes. For instance, on May 1, 2000, President Bill Clinton directed the military to stop scrambling GPS signals, thereby improving the accuracy and marketability of commercial GPS devices.
The president and Congress annually determine how much the federal government will spend on space research and development. The presidential administration submits to Congress comprehensive budget plans for NASA and the DoD space programs that contain proposed funding for individual research and development projects. Congress reviews and often changes the amounts requested. In seven of its eight years, the Clinton administration cut NASA's budget. Congress, during the Clinton years, generally supported additions to the budget, but not enough to reverse the general downward trend.
In 1998 revenue generated from space commerce eclipsed, for the first time, the investment in space from government. This trend is expected to continue, with government increasingly moving to the sidelines and private industry leading the way in the development of space. New regulations and legislation will be needed to provide a clear legal framework for the expansion of space commerce.
see also Clarke, Arthur C. (volume 1); Law (volume 4); Law of Space (volume 1); Regulation (volume 1); Spaceports (volume 1).
McLucas, John L. Space Commerce. Cambridge, MA: Harvard University Press, 1991.