“An article in the Economist today has some chilling conclusions about the difficulties faced by the new commercial space companies.

Although the cost of developing new space vehicles, products and services is high, just as much of a burden can be imposed by such intangible expenses as regulatory compliance, legal fees and insurance premiums.

The article points out the heavy cost to these new space companies caused by insurance requirements and government regulation, including the ITAR regulations that restrict technology transfers to foreign countries. However, this paragraph stood out to me as most significant:

Then there is the question of vehicle certification. The first private astronauts and space tourists may soon take to the skies in new launch vehicles, and the FAA has initially agreed to license commercial spacecraft without certifying, as it does for aircraft, that the vehicles are safe to carry humans. The idea is that specific safety criteria will become apparent only once the rockets are flying and (though it is rarely admitted) an accident eventually happens. This learning period will keep costs down for makers of the new spacecraft, even if significant compliance expenses are likely when it is over. The exemption was meant to have expired last year and was extended to the end of 2015. Commercial space companies are understandably keen for it to be extended again. “In the dawn of aviation, planes had 20 to 30 years before significant legislation applied,” says George Whitesides, the boss of Virgin Galactic.

Back in 2004 I noted in a UPI column the problems caused by these regulations, even as they were being written. (I had also done something at the time that few reporters ever do: I actually read the law that Congress was passing.) Then I said,
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