Talks about all that non-engineering stuff that just won't go away no matter how patiently you ignore it, and is in fact critically important.

The Commercial Space Launch Amendments Act

Tim Hughes, Majority Counsel, House Science/Space Subcomittee

In which the rationale, and some of the content, of HR 5382 are explained.

[I don't know exactly what "Majority Counsel" means, but it probably means someone who doesn't have to fly down to Phoenix on a work day unless he or his boss thinks it's important.]

Tim began with the old quip about sausages and laws. He then explained that the CSLAA was passed on the very last legislative day before a general election, when the Congressfolk were probably tired of arguing with each other and wanted to pass something without too much partisan ballast. The CSLAA was, in fact, supported not only by the relevant committee chairs (who were Republican) and by Sen. McCain, but also by Rep. Gordon (D-TN) and Sen. Hollings. It passed by more than a two thirds majority in the House and by "unanimous consent" in the Senate.

Its main goals were four.

  1. Protect the uninvolved public while allowing others to knowingly take risks.
  2. Refrain from regulating the design of spaceships because it would be premature: "You can't regulate what you don't know." In eight years, or sooner in the case of a ship that suffers a demonstrated safety problem, the FAA will have the authority to regulate design.
  3. Provide a one-stop shop for licences (rather than bifurcating the licencing process between the air and space branches of the FAA).
  4. Provide a streamlined process for permits for experimental vehicles.

[Digression: the distinctions between a waiver, a permit, a licence, and a certificate.]

The original Commercial Space Launch Act was passed in 1984, and made no mention of passenger flights nor of R&D.

The CSLAA has a complicated definition of a "sub-orbital vehicle" and flexibly defines the crew to include anyone "directly involved with the launch", i.e. it can include people who stay on the ground. Crews will be required to be trained and to have medical checks; passengers will get medical checks and will have to be given an Informed Consent to the risks of space flight and to sign a waiver of liability, which must waive their claims against the U.S. government and may (heh heh) waive their claims against the spacecraft operator etc. It's hard to know in advance how well these waivers will hold up in state courts, until at least one has been litigated, but there are some grounds for optimism.

The FAA will try to calculate the Maximum Probable Loss that might occur if a vehicle crashes (loss to random people on the ground, that is) and will decree how much insurance the operator has to buy. Claims above a certain amount will partly be indemnified by the Federal government, as is currently done for expendable launch vehicles.

In response to questions, Tim said that:

. there will be no paying passengers on experimental vehicles (and attempts to sneak around this rule will be forwned upon) . trying to extend this law to allow export of vehicles would have involved more Congressional committees and greatly reduced the chance of getting any law passed.

George Nield

Deputy Associate Administrator, Federal Aviation Administration

A view of the future of the space launch industry

George began by explaining the FAA's twin duties: to protect the public and to promote the industry (in his case, the commercial space flight industry). He pointed out that there have been 171 licenced launches to date in the USA with no fatalities, or even damage, to uninvolved parties.

Then he listed some recent changes in national space policy. President Bush, in January, spoke of the need to puruse commercial opportunities in space transport and services. The Aldridge Commission urged that commercialisation of space should become a primary focus of policy, and that NASA should procure all launnches to low earth orbit commercially. [I may have the details wrong here -- check the report, if you can find it.] The US Space Transport Policy of January 2005 used language like "shall purchase commercially available space transport."

Of course, bright futures for commercial space travel have been predicted before. What's different this time? Apart from the policy changes, there are different objectives, different sources of funding, and a different regulatory framework.

The objectives now include "public space flight" [that's bureaucratese for tourism], smaller vehicles and less adventurous technology than before. The funding has gone from the occasional eccentric millionaire and a lot of hoped-for government money to, well, Paul Allen, Jeff Bezos, Sir Richard Branson, Elon Musk, and maybe more. Virgin Galactic has had 29,000 people interested in paying deposits on tickets; Sir Richard may fly more people to space by 2010 than NASA and the Soviet Union have done since 1960.

The FAA has already posted guidelines for medical checks for space passengers. The process of issuing regulations will involve several offices, and the CSLAA's 18-month deadline for doing this may be optimistic, but it will get done.

He introduced Craig Day of the AIAA, who spoke briefly about a document that AIAA has issued ... guideline 593 ... to assist companies in identifying safety issues in their designs.

In response (I think) to a question, George said that he was opposed to certification of space vehicles at our present state of knowledge and experience. [I was to learn later why this is even an issue.]

[Digression: the distinctions between a waiver, a permit, a licence, and a certificate.]

Immediately after this talk, Michelle Murray of the FAA explained the detailed process by which the FAA draws up and issues regulations. [I am sure this is available on the public Web, and if I tried to type it in here I would get it wrong.] Important points were that anyone can comment on a proposed regulation, and that written comments are more likely to get attention than unwritten ones.

[I was not altogether surprised to find out, in later conversation, that Michelle grew up watching _Star Wars_ and dreamed of designing spaceships.]

Panel on regulatory issues

Chuck Lauer, Jeff Greason, John Carmack, John Powell

Chuck Lauer said that his company planned to fly something next year, and was working closely with people from the FAA's AST, even inviting them to a design review.

Jeff Greason said that, if you're not paying attention to regulations and wooorking with the FAA, you're not in the industry. He added that the process is, from our side, like gardening: last year we harvested a good crop, but the work never stops. And the AST "can only listen to us if we talk to them."

John Carmack would be glad of some waivers to make it possible for him to do some fast-turnaround development work in his own backyard rather than having to haul his ship to New Mexico every time he wants to fly it; at the moment there is no spaceport licenced for VTVL launchers. He mentioned possibly launching over water, which simplifies the regulatory regime somewhat.

John Powell seemed astonished that he had read the proposed rules and actually liked them. They were all couched in terms of "should" rather than "shall", giving people like him some room to try things out. He noted that the medical rules impose some arbitrary boundaries outside which the rgime becomes strciter, and asked rehtorically if an acceleration of 3.1 g is really so different in its effects on the human body from 3.0 g.

Is there a bias in the rules against VTVL? No, but the existing air traffic control system doesn't know how to handle it.

Burt Rutan apparently wants space vehicles to need certification, but there simply isn't a certification regime.

Mitchell Burnside-Clapp pointed out that 1930s civil aviation, and present-day fighter planes, had a loss rate of about 30 flights per million; I think he was suggesting that this might be a reasonable standard to assess space vehicles against.

It was suggested that the AST consider both the consequences of a vehicle's failure and its probability. Crashing a small spaceplane is not like crashing a Titan IV.

It was pointed out that environmental regulation (which can be really onerous) is not under the FAA's control. There is the possibility of a Categorical Exemption for experimental RLVs, but you can't even have a category unless you have some things to put in it!

Rand Simberg

Rand gave an unscheduled talk (replacing a speaker who had tocancel) based on some consulting work he has been doing.

We are now in the third "market scare" for reusable launchers. The first was the huge satellite clusters (Iridium, Teledesic) that were going to need lots of launches. The second was orbital tourism. And the third is propellant delivery for space exploration (NASA's CEV).

Boeing is looking at "dry launch" whereby they would launch a lunar exploration vehicle with empty tanks. This means both that the launcher can be lighter, and the lunar vehicle can be lighter because it doesn't have to take high acceleration with the weight of all that propellant. SO an orbiting propellant depot would be need, and the market for launching propellant up to it could be quite large, perhaps 200 tonnes if NASA agrees to have this done commercially. Kistler Aerospace and Space Exploration Technolgies have offered quotes, of a sort, for doing this work. However, Mike Griffin [the new NASA Administrator] seems to like heavy lift launchers built out of Shuttle parts. Ideally, the deopt would have a much simpler "Visiting Vehicle Interface Definition Document" than NASA's space station.

In response to a question, Rand suggested 5 tonnes as a good size for individual payloads.

Questions To Ask Before You Wire The Money

Panel discussion

How space entrepreneurs can raise money, with emphasis on private investors and venture capital.

In their openeing statements, the panelists said that most investment to date has been from "angel" investors; since the winning of the Ansari X-Prize, there is some interest from VCs (venture capitalists).

Here's what VCs (and even angels) look for, in order of importance:

. The team, which will keep the company together and moving as it encounters obstacles. "Don't sell me your product; sell me your company." (If you have difficulty with the idea of letting someone else own part of "your" company, even a majority of it, then think of another way to raise money.)

. The financial plan: if I give you money, what will you expend it on and how long will it be before you need to raise more?

. The technology: what are the key risks (or unsolved issues) and how do you plan to retire them -- and when.

. Other: the market, appplicable regulations, competitors, the uniqueness of your product/service and how you will defend it against competitors (e.g. with patents).

Private investments require far, far less disclosure about the company than public offerings. But to a large extent (see SEC regulation D, rules 504, 505, and maybe 506) they are restricted to Accredited Investors, who have to meet high standards of net worth and/or income. The investor and the company agree on a Term Sheet, whcih sets out what fraction of the company the investor gets in exchange for how much capital (that's the easy part), and then goes into detail about who gets what if various things go wrong.

It was asked how many of the companies at SA '05 are fully capitalised. [I saw only one or two hands go up.]

VCs look for a return on their investment within 3-5 years in the Internet sector, but can be patient for 12-15 years in biotech ... because nobody is in much doubt that a cure for cancer will find a ready market. There was until recently plenty of doubt about markets for launch services, and there continues to be some. However, it is quite possible that a VC will find a space enterprise to invest in some time in the next two years. But the "giggle factor" is still alive and well, as is the "brother-in-law problem" (my brother-in-law works at NASA / Lockheed / Boeing and he says your concept won't work).


What about intermediaries who offer to help you find investors? Some of them are very good; make sure you pay them a percentage of the money they bring in, rather than a flat fee or retainer.

How do you take care of angels? Don't raise money from people just because they can write checks. Try to judge their temperament and decide whether you want them as part-owners of your company; provide them with regular reports on your progress. The same applies to VCs.

What discount rate do VCs want? Well, they will probably want to get five or ten times their original investment in five years. They will make their own assessment of what your company is worth.

How about customers who are willing to pay up front? If you can get that kind of money, that's great, since it does not give the customer an equity interest in the company.

What exit strategies? Like most technology companies: most likely, a bigger company will acquire it.

What if we decide to do an IPO -- how should we find a suitable bank? If the company is in good enough shape for an IPO, banks will come and find you.

How can we get VCs to pay attention to us? Ideally, find a relatively senior VC with a record containing some successes *and* a pilot's licence. S/he can persuade the others.

Keeping It Cool

Brooke Owens, X-Prize Foundation

Brooke showed a video about the Ansari X-Prize and the winning thereof, and then explained how the Foundation proposed to keep the public interested in space flight. She mentioned the Eggs Prize, in whochi children launch eggs to, umm, two hundred feet and try to make sure they land intact. She then went on to talk about the show being planned for the weekend of the 7th-9th of October, 2005, in or near Las Cruces, NM. [My notes are a bit confused here.] She talked about teams exhibiting their vehicles this year, perhaps flying them next year, but probably no racing until 2008. The idea is to reward teams with revenue, recognition, and sponsorship opportunities. Other plans include a Space Education Day and a Personal Spaceflight Symposium at New Mexico State University [nearby].

It was asked whether purses for competitions have been funded. Not yet.

Waivers? For now, each team must make its own arrangements with the AST.

Finally, Brooke showed a video promoting

When Physics, Economics, and Reality Collide

John Jurist, Sam Dinkin, David Livingston

In which three hard-headed people explain why it is going to be difficult to get the cost of access to orbit down where we want it.

[The starting point for this session is the article which the presenters wrote some months ago. It's available in Microsoft Word format on the web if you look for it (and if you don't care to splurge on a copy of MSWord, hop over to Open Office). They also gave a summary. I have a hardcopy, and if you know me personally and are interested, I'll lend it to you.]

Flying around in jet aeroplanes would be almost as absurdly expensive as orbital launches if airlines had to follow "Taylor's Laws":

  1. There shall be no more than one flight per month.
  2. The aeroplane shall be thrown away after each flight.
  3. The entire cost of the international airports at both ends of the flights shall be covered by the freight charges.

  4. The authors add two more laws to reflect the current state of orbital launch:

  5. Engines will have narrow safety margins and will not run more than a few hours without major overhaul.
  6. Management will consistently avoid high quality business planning and will ignore the technical and financial realities related to their industry.

The government charges a million a day for use of the "national" launch ranges, e.g. the Cape and Vandenberg. (Somehow SpaceX has negotiated a reduction to 600,000 for their Falcon 1.) This is the largest single element of the cost for launchers that have reached an assumed advanced state of the art and are fairly cheap to operate. The second largest is insurance, including insuring the vehicle itself (expendable vehicles don't have this cost), the payload, and third-party liability (anyone else who gets hurt if there's a crash).

Building larger vehicles makes range costs less important because they can be spread over more kilos of payload, but raises the initial cost of developing and building the vehicle, and so the interest on that cost makes launches more expensive. To spread interest costs out to the point where they don't hurt (much) needs a frequency of launch well over once a month. For RLVs, self-insurance [instead of insuring the vehicle, have another one ready (or be ready to build another) to replace it] is a clear win; some customers already do the same, building spare satellites rather than building just one and insuring it. It may be possible, by political lobbying, to change the calculation of range costs from a flat fee to a fee based on vehicle size (or payload size), or a mixture. Likewise the insurance standards may be changeable. At present they are calculated in a way appropriate either for airliners that fly millions of times a year, or for ELVs that have no way of proving their reliability, and near-future RLVs have much lower flight rates than ariliners (which argues that insurance requirements need not be based on the likelihood of a one-in-ten-million accident) but will have longer track records than ELVs, so a new standard is appropriate.

New launch services should also expect cometition from the existing large companies, if the latter once decide that small RLVs are a profitable market, and from billionaires who don't mind losing money (or making far less on their investment than they could make in another industry) if they can be involved in something as cool as space travel. [This may well already be happening.]

It is widely assumed that the technology will enable launches costing less than two thousand dollars a kilo (the magic number below which the market becomes elastic) [that's econ-speak for "customers buy more because it starts to look like a bargain"] but these numbers are based on many assumptions which have yet to be justified by building and operating actual hardware.

[I won't recount the ... discussion ... which followed. Obviously I don't want launches to go on costing ten grand a kilo. But neither do the authors of this paper, so far as I can see; they are just pointing out that a simple combination of engineering and faith will not get us to where we want to be.]

Rick Tumlinson

Space Frontier Foundation

Rick spoke about some consulting work he has been doing.

"Why do you deal with NASA?" [This is a major betrayal of The Faith.] "Because I can."

Rick sees a sea change in the national [he means governmental] space agenda. It started with the announcement of the Moon To Mars plan in early 2004, went on with the Aldridge Report, the winning of the Ansari X-Prize, and the passage of the CSLAA.

Concerning NASA: Sean O'Keefe was a bean counter. NASA was a leaky boat when he took it over ... thirteen road maps ... he got it bailed out, and now there is an engineer in charge, with some political assistants. Rick spoke of Dan Goldin [the administrator before last] and how his orders sometimes only carried weight as far as the door of his office. Griffin has "got some of the religion." But Rick's motto is, "Don't trust, and verify" when it comes to NASA.

Rick spoke of three different mindsets among space enthusiasts.

And of two different mindsets among aerospace engineers: those who are glad to be "doing space" versus those who are not content unless they are "opening space".

Rick diagnoses that Griffin wants to go back to the model that succeeded in the 1960's, when development was under tight central control. Sadly, it's vehicle development: George Bush spoke of a "Crew Exploration Vehicle" rather than of a "Crew Exploration System", creating an impression that one vehicle will do everything, and giving rise to viewgraphs of aerodynamic shapes lifting off from the Lunar surface. But things are changing rapidly. Rick read out the SFF's definition of a Frontier-Enabling Technology.

He recounted an exchange he had had with Griffin about pay-for-performance contracts versus the traditional contracts. Griffin pointed out that he does want to be waiting for a private company to deliver goods that astronauts need ... you can see why he wants control. If this sounds as if he doesn't trust the sector, well, he doesn't much trust the majors either.

He listed some things everyone can do to help.

  1. Pay your taxes.
  2. Spread the word, do outreach (but don't stretch the truth).
  3. Refrain from trashing other outfits. Find three things we can agree on and unite around them.
  4. Put an end to ITAR.
  5. Keep the legislative momentum going with another initiative, e.g. a Teachers in Space programme that pays for teachers to take sub-orbital flights [and guess who is selling the tickets].
  6. Build and fly spaceships!

There was a question about Griffin's attitude to prizes. Rick agreeed that prizes should be kept outside of NASA if possible Jerry Pournelle volunteered that Dana Rohrabacher is planning to introduce a bill creating a National Space Foundation, similar to the National Science Foundation, which would take both government and private money and could award prizes. Somebody suggested that there should also be second and third prizes, rather than the winner-takes-all model of the Ansari X-Prize, and that instead of a hard deadline, the prize should diminish over a period of time. [I had the chance to talk with on the way to the airport, and he is sympathetic to these ideas.] Prizes could also be followed by contracts to supply NASA.