Federal law outlaws launches on foreign rockets

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Killing competition: The American launch industry as well as the FAA regulators are in agreement that a 2005 law that limits American small satellite companies from using foreign launch companies should remain in place.

The CSLA, dating from 2005, is the U.S. government’s way of protecting the seemingly forever-nascent U.S. small-satellite launch industry from competing with government-controlled foreign launchers for U.S. business. It seeks to oblige non-U.S. rocket providers to sign a CSLA that, for all intents and purposes, sets U.S. commercial launch prices as the world minimum for government-owned non-U.S. launch providers.

The rationale is that these non-U.S. launchers, not bound by the constraints of profit and loss – but hungry for hard-currency export earnings – will undercut commercial U.S. companies’ launch prices and keep them from gaining market traction.

India’s launch rockets, for example, are designed and built by India’s space agency ISRO, and are backed not by private funds but by government money. The fear is that India could subsidize its rockets so that the price could always be kept below what any American company could charge.

The truth, however, is that competition and innovation, here in the U.S., has so successful undercut foreign prices that no amount of subsidies can hope to compete. Those foreign companies are now scrambling to actually redesign their rockets to lower their costs and thus their prices, rather than asking for more handouts from their governments. This law should be repealed.



  • Dick Eagleson

    I read last month on Parabolic Arc that India is looking to privatize operation of the PSLV rocket, which has been used to launch a number of small satellites for U.S. firms. By the time the various U.S. government bureaucracies with even a small dog apiece in this fight are all heard from, the issue is likely to be moot anyway.

  • Edward

    Several (admittedly incoherent and contradictory) thoughts:

    1) Foreign nations may reciprocate with bans for launching smallsats on US rockets, limiting the payload supply and hampering the chances for success.

    2) The article says that when SpaceX dropped Falcon 1, it left a hole in the launch industry. However, if there had been adequate demand for the Falcon 1, SpaceX would have been foolish to drop a revenue rocket at a time when revenue was desperately needed. My take is that there were not many smallsat customers at the time, and I only see small lines, not large lines, of customers beating paths to the doors of the currently proposed smallsat launchers. Smallsat launchers are still counting on the (few) smallsat constellations to start their businesses.

    3) Subsidies or not, the big rockets would be tremendously inefficient at launching smallsats. I do not see any country spending the tremendous amount of money subsidizing their $100 million large rockets merely to launch smallsats that only require $1 million to $10 million rockets, because the customer cannot afford the high price of the expensive big rockets. It would be much less expensive for those countries to create their own small launchers, even if they were not privately operated.

    4) It may be a chicken and egg (Catch-22) problem. The smallsat boom may happen after the affordable launchers start launching, but there needs to be smallsats to launch.

    5) Foreign rocket companies could be hampered due to lack of customers, leaving only US companies to do the world’s smallsat launches. The majority of proposed smallsats are constellations of US satellites, so few foreign rocket companies may survive the initial years of start-up until the demand increases enough to keep them in business.

    6) Government competition killed private attempts to make launchers in the 1980s and again in the 1990s. Private companies could not find or keep capital funding in order to start launching their rockets, because the government controlled the industry — the control was so complete that the Space Act Agreement had to be passed in order to change the way government ordered rockets. It was not until COTS that government’s actions convinced some investors that private commercial companies might be able to succeed in the launch business. CRS and CCDev have convinced many investors that government is finally getting out of the way of commercial launch companies.

    7) Competition is a good thing. Even if the foreign smallsat launch startups were to win out over the initial US startups, then newer US startups would figure out better, cheaper, more efficient ways to beat the competition.

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