Regulation Reform May Help Commercial Spaceflight

Companies wanting to provide commercial spaceflight have had to jump through regulatory hoops.

Crewmembers prepare SpaceShipOne and White knight for the launch of SpaceShipOne on a trip to suborbital space at Mojave, Calif.,June 21, 2004. SpaceShipOne is a privately developed rocket plane that became the world's first commercial manned space vehicle and the first non-governmental flight to leave the Earth's atmosphere.
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For the better part of a year, two security guards and two American federal government monitors stood watch over a piece of equipment sitting in Russia that, according to federal definitions, was highly dangerous if it fell into the wrong hands.

That piece of equipment: A glorified metal table designed to keep Bigelow Aerospace's Genesis I space habitat from getting dirty on the floor. But under a set of 1999 rules called the International Traffic in Arms Regulations (ITAR), the stand, and all components related to spaceflight, are placed on the "United States Munitions List," meaning they have more of a military use than a commercial one and have to be guarded at all times.

Critics in the commercial space industry say ITAR has made going to space significantly more difficult and costly and has prevented American companies from working with some of the United States' closest allies, including Canada, France, and the United Kingdom. They also argue it hasn't served its initial goal, which was to keep potentially dangerous weapons or trade secrets out of potentially malevolent hands.

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"We spent well over a million in ITAR compliance on the Genesis missions," says Mike Gold, director of Bigelow Aerospace's Washington, D.C., operations. "We're not against export control, but it's the overbreadth of ITAR that's of greatest concern. There were four guards watching something that was indistinguishable from a metal table. The most dangerous thing you could do was serve coffee on it, or in a worst-case scenario, even tea."

In the mid-1990s, American companies were allowed to load satellites onto Chinese rockets. But after one satellite somehow transferred sensitive data to the Chinese, Congress decided that any and all components related to satellite making or spaceflight should be protected by ITAR. While companies in other sectors were able to petition to remove certain commonplace components from the United States Munitions List, a specific provision in ITAR banned the practice with space-related components.

Recently passed reform could potentially loosen ITAR restrictions. The 2013 National Defense Authorization Act allows the president to remove specific satellite components from the United States Munitions List if he is petitioned.

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"It's a significant victory, but we don't know what'll happen," Gold says. "This is the opportunity for change, not change itself. ITAR isn't over—everything that was ITAR two months ago is still ITAR today."

Federal agencies have long realized that ITAR wasn't having its intended effect. In 2010, a joint report by the Departments of Defense and State found that removing certain commercial satellite components from the munitions list to be "manageable from a national security perspective … most components to commercial [satellites] could also be transferred [off the munitions list] without posing an unacceptable security risk."

Bigelow isn't the only company that has been affected by ITAR. Earlier this week, Steve David, director of advanced projects at SpaceX, which in 2012 became the first private company to fly to the International Space Station, told Congressional staffers at a lunch that his company had run into ITAR problems.

"Your market is limited, and that affects the cost of spacecraft," he said. "I think we all know what that means."

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A 2008 survey and report by the Space Foundation says that "smaller respondent companies are more likely to feel adverse effects from ITAR than large companies," and a study by The Space Review estimated that the United States' worldwide market share of the satellite industry declined from 83 percent before ITAR to 50 percent in 2008.

"When commonly available technologies are ITAR-controlled, it hurts American business without improving our national security," says Alex Saltman, executive director with the Commercial Spaceflight Federation. "The sluggish pace at which ITAR has been adapting to rapidly changing technologies has prevented commercial space companies from undertaking some projects and dramatically raised the cost of doing business with foreign customers, even our close allies."