Yesterday Senator Ted Cruz (D-Texas) held the second in what he says will be a series of hearings on the future government regulation of the commercial space industry. The specific focus of this hearing was the 1967 Outer Space Treaty and its effect on private enterprise.

The hearing saw two panels of witnesses, the first three legal experts on the Outer Space Treaty, the second four industry experts from a variety of private space businesses.

Like the first hearing on April 27, the witnesses this time were once again unanimous in their call for a simplification of the present regulatory arrangement. They also emphasized repeatedly that private enterprise should not be required by Congress to get permission to do things in space. Instead, Congress should merely provide regulation that will facilitate private enterprise while helping them avoid interfering with each other.

Unlike the first hearing, however, the atmosphere was decidedly less interested in improving the overall international regulatory framework created under the Outer Space Treaty. Instead, the witnesses in unison were supportive of the treaty and did not want the U.S. to either pull out of it or try to change it. All advocated the position that the treaty as written allowed the U.S. to regulate private businesses in a manner that could protect property rights in space.

As I watched the hearing I was struck by this unity of position. To me, it appeared that the Washington elitist community was circling its wagons in order to protect the status quo.

The witnesses from the business community appeared afraid of the consequences of any effort to change the Outer Space Treaty. As Mike Gold, Vice President of Space Systems Loral, noted,

It would still be ill-advised for the U.S. to withdraw from the treaty or open it up to revisions. … If the U.S. pulled out of the treaty it would create confusion and uncertainty, hindering new commercial developments as well as established private commercial space activities. Moreover, opening up the treaty to amendments would likely only result in more language being inserted into the Treaty that would run counter to U.S. interests.

Essentially, any effort to change the treaty would carry with it too many unknowns that might hurt them, and was unnecessary in the short run.

The legal witnesses all advocated keeping the treaty. From their perspective, the treaty’s sixth article, which states that “The activities of non-governmental entities in outer space, including the moon and other celestial bodies, shall require authorization and continuing supervision by the appropriate State Party to the Treaty,” gave the U.S. the proper authority to set policy for its citizens that would sufficiently protect their property rights.

Yet, will it? As James Dunstan of the Mobius Legal Group noted, “I don’t think the Outer Space Treaty as it is written would allow for the United States to even recognize domestically [property rights]. … I think article 2 is pretty clear, we can’t domestically recognize property rights. We would have to go in and renegotiate that treaty.”

Furthermore, no one addressed the problem of conflicting property claims between different nations. What if two nations want the same specific piece of territory? As they say in the real estate business, “Location, location, location!” The Moon has only only two poles, and the places at those poles that would have either eternal light (for solar power) and eternal darkness (with ice available) are going to be limited. Everyone will want that real estate.

What if a U.S. private company sets up operations there and the Chinese moved in to push them off? Nothing in the Outer Space Treaty provides any protection to that company or its rights. In fact, article two of the treaty specifically forbids any nation from claiming sovereignty on any territory. Because no nation can control any territory legally, whatever regulations or protections it creates under article 6 to protect the rights of its citizens are made null and void by article 2, which states that no nation’s laws can supersede another’s on any territory in space.

The bottom line is that any policy the U.S. puts forth that does not include sovereignty to the territory that its citizens possess in outer space will not be worth the paper it is written on.

That there seemed so little enthusiasm by both industry and legal experts for dealing with this issue forthrightly suggests to me that we face a prolonged problem. Sooner or later the lack of national sovereignty, or the lack of a legal framework for establishing national sovereignty, is going cause a conflict in space that could be avoided.

More importantly, private companies and individuals will continue to have no strong legal protection of their property rights in space. The incentive to invest money will be weak. Governments will continue to dominate all activity, and the space-faring citizens that will eventually settle the Moon, Mars, and the asteroids will remain servants of their governments, not free citizens.