Testimony of Gary Hudson: The Commercial Space Act of 2003 (part 1)

Mr. Chairman, members of the subcommittee;

I have spent thirty-four years of my life promoting commercial space transportation, and intend – even in my current semi-retirement — to continue to speak my mind. Thank you for listening.

Today there is an argument raging in the emerging launch industry. How should piloted human space flight vehicles be regulated?

The origin of the debate goes back two decades. At that time, private rocketeers faced a number of Federal Agencies each who claimed they were in charge. These ranged from the FAA, which had the legitimate authority under the existing law, to the Department of State, which wanted to regulate rocket launches under the absurd notion that they were “exports.” The professed goal of the sponsors of the first Commercial Space Act was to put an end to this problem and provide a “one-stop-shop” for launch approvals. I supported that unreservedly.

But I lost the battle to limit the scope of the Act. Instead, a completely new entity was created: the Office of Commercial Space Transportation, as well as a completely new concept: “Federal launch licenses.” At the time, some of us complained that the new entity wasn’t needed, that the existing law was adequate with minor revisions, and that the new OCST would not be able to figure out what to do about piloted reusable rockets. Our concerns were brushed aside. They have now emerged as crucial to the future survival of an industry in crisis.

Some in this industry may be concerned that I stand in opposition to HR 3245. This is decidedly not so. I do support it and, with additions, wish to see it pass. I applaud those who have worked hard to bring it before this body. I will be happy to work with you to improve the wording of the Act to address certain issues. One of those issues is the perception of risk.

It is my duty to remind this committee that there has been no third party injury since the beginning of the Space Age in the Western world. During the past 20 years, we have spent tens of millions of taxpayer’s dollars funding AST and before it, OCST. In the next decade we will spend over $100 million more. Just for regulation! My question to our industry and this Congress is: have these funds made us safer than if we had retained our previous regulatory structure under previous Federal Aviation Regulations? I think the answer is unambiguously no.

AST has grown increasingly bureaucratic. Launch Licenses are now Major Federal Actions. In spite of my warnings and counsel of the past five years, we have now reached a crisis. Experimental flight-testing of suborbital passenger vehicles has begun. AST is not up to the challenge of this development. Therefore, I recommend the disestablishment of AST, and the elimination of the need for US persons to seek “launch licenses.” In its place, I propose that we return to the pre-1984 law governed by Federal Aviation Regulations. This will be sufficient to protect the safety of third parties and to fulfill international obligations. Piloted rocket aircraft of a variety of types will then be regulated by the FAA under “experimental” type certificates. Several rocket aircraft already have been issued such certificates.

The strongest objection to such an approach comes from colleagues who wish to begin offering immediate passenger rides who fear the cost of FAA certification. I understand their position, and sympathize. And I believe that a barnstorming era for space transportation is desperately needed. But we can reach that result by other forthright action.

Current FAA rules generally prohibit revenue flying of experimental aircraft. I propose we simply change the rule. Congress can permit certain experimental aircraft defined as space vehicles to operate under a limited exemption for a period of time – 20 years. Coincidentally this is the same period from the Wright Brothers first flight to the establishment of the first Civil Aeronautics Authority in 1926. Some have asked how we protect the passengers on these flights? HR 3245 correctly supplies the solution by defining “spaceflight participants” as someone who would give their informed consent to fly.

Another issue is liability. In 1972 the US government unwisely assumed responsibility for worldwide third party liability from space launches by any US person. Fortunately, the letter of the treaty can be satisfied by requiring that individual launch operators obtain liability insurance. Indeed, this is a current AST requirement.

Interestingly, a similar system is in place for commercial launches in Russia. There are no launch licenses, no environmental impact statements, and no two-year process costing hundreds of thousands or millions of dollars. Provide your insurance certificate, submit proper notifications, and you are good to go. How is it that the bureaucrats of the former Soviet Empire can be more sensible than we?

Signing the first Commercial Space Act twenty years ago, President Ronald Reagan said we would “cut red tape to see blue sky.” Let us finally do as he wished.

Thank you.

Gary C Hudson

(gchudson@aol.com)

Commercial Space Act of 2003

Testimony of Gary C Hudson

Written Response to Question and Answers

Subcommittee Questions:

Should the government regulate commercial human space flight? If so, what should the public policy objectives (e.g., encouraging development of the industry, protecting third parties, protecting passengers, etc.) of that regulation be and should they be balanced?

This is an excellent question. The air travel industry experienced it’s “barn storming” era and operated for over 20 years before the creation of the Civil Aeronautics Administration in 1926. Commercial human space flight needs a similar period of minimal regulation to reach its full potential. Promotion of the industry should be encouraged, and the best means to accomplish this will be a light regulatory hand. Regulation should be confined, for at least the next twenty years, to protecting third parties. Passengers need no protection in the near term, since no one can be imagined to be engaging in this experience who is not appraised of the risks. I favor having an “informed consent” requirement for these second parties.

Should the government offer indemnification for commercial human spaceflight, and if so, against what sorts of liability? How should any indemnification relate to existing policies and international treaties?

I do not believe that the government should provide any indemnification whatsoever to first or second parties (vehicle operators or passengers). I believe the government should require operators of commercial human space flight vehicles to obtain third party liability insurance with the US government as a named insured as is currently required. This is consistent with the requirements of international law, including the 1972 Liability Convention. I do not see why the commercial space industry requires indemnification to succeed when third party risks are virtually non-existent. In the past fifty years there have been no third party injuries or fatalities from space launches in the Western world. Ideally, I would like to see the US withdraw from the 1972 Liability Convention or renegotiate it to a regime more in keeping with the liability limits that were placed on international air travel operations by the Warsaw Convention. There is no rational reason why the actions of a US person should implead the US government in tort claims.

What changes would you recommend to H.R. 3245? In particular, do you support commercial human space flight being regulated by the AST? If not, where and in what manner would you propose to regulate commercial human space flight?

I recommend the following changes to H.R. 3245:

1. Clarification that vehicle operators, and not the government, are to set the medical and other standards by which they accept “spaceflight participants” into their programs;
2. Disestablishment of AST.
3. Direction to FAA to permit experimental spaceflight vehicles to be operated for profit, with the added requirement that third party liability insurance be provided by vehicle operators identifying the US government as a “named insured.”
4. Elimination of “launch licenses” in favor of reapplication of FAR 101, with appropriate minor changes, to conduct unmanned rocket launches.

I do not support commercial human spaceflight being regulated by AST. I recommend disestablishment of AST for the reasons sited in my testimony. I recommend that commercial human space flight be regulated within the FAA by AVR (Regulation and Certification Group) under the “type certification” environment used for all other aerospace vehicles.

Additional Frequently Asked Questions:

You favor elimination of AST. Isn’t that a radical solution?

I prefer to think that saving $100 million+ over the next decade, by disestablishing AST now, is the far more rational solution. If third parties were really at seriously high risk from space launch activity, there would be a legitimate argument for AST’s continued existence. But the record shows that modern space launch of any type (orbital or suborbital, manned or unmanned) is essentially free from measurable risk to third parties.

It should also be noted that AST has 70 or 80 staff at any one time, who do nothing all day but study what new regulations they think might be desirable, process license applications or think up new requirements for industry. At the same time, the entire suborbital human space flight industry does not have as many engineers and technicians actually building the vehicles! Regulators actually outnumber the people doing the work; this would be considered a parody of regulatory behavior in almost any other area of human endeavor. For example, what if the FDA had as many regulators as there were physicians?

Who would be in charge of regulation if AST is disestablished?

The same organization that had regulatory responsibity for private rocket activities prior to the formation of OCST in 1984, the FAA via FAR 101.

Regarding Unmanned Rockets. Given that unmanned rockets have to be launched from specialized facilities established by Federal or State authorities, that are regulated at the local, county, state and national level by environmental rules, air traffic rules and many other health/safety laws and regulations, there is simply no need for an additional overarching level of bureaucracy to control launch facilities or rockets. These facilities establish detailed safety regulations to which all launch operators must adhere. AST is not needed to assure that launch operators of unmanned rockets abide by these rules and regulations, since the operator will not be allowed to fly if they fail to comply with range rules. AST adds no safety to unmanned operations but costs launch operators hundreds of thousands to millions of dollars in added regulatory compliance each year.

Regarding Human Space Flight Vehicles. Piloted vehicles can be regulated as aircraft per the Federal Aviation Regulations. They should be allowed to operated from the same categories of airfield that more conventional experimental aircraft do; when fully certificated, they should be allowed to operate wherever certificated aircraft may, subject to noise and emission regulations.

AST says they will “tailor’ launch licenses to permit experimental flights. Isn’t this a reasonable solution to the problem of experimental flight-testing?

No. When a research aircraft developer gets experimental type certification, the developer may fly as frequently as he wishes, when he wishes, and may make modifications to his aircraft during the test program without obtaining further certification approval from the FAA. By contrast, AST has not yet developed their “tailored” rules, but appears to want far more restrictions that those which are imposed on any experimental aircraft to date, even though the suborbital vehicles being proposed (or flying) have virtually no potential for third party harm. Even if they adopted the exact same rules as FAA/AVR, they would be an unnecessary and expensive redundancy. AVR can do the job, with no additional staff or funds, if the job is re-scoped away from being a “license” invoking the specter of a Major Federal Action.

You refer to “aircraft” but many piloted space launch concepts are not winged airplanes. How would these be regulated?

According to the legal definitions in the FARs, “aircraft” is any device that flies in or though the air. Since physically all space vehicles must fly through the air on their way to space, they are already by definition aircraft. The FARs regulate many types of aircraft that are not “fixed wing” such as rotorcraft, gliders and powered-lift vehicles as well as rockets. In fact, if the current AST approach followed the only type of aircraft not covered by the FARs would be piloted suborbital space launch vehicles. This makes no sense. One class of vehicle should not be taken completely outside of the FARs simply to justify the existence of an entity (AST) that is not needed in the first instance; an exemption should be made to allow that specific class to of aircraft to be operated for profit within the FARs.

Isn’t certification very expensive?

That depends. Certification costs vary widely, and much nonsense is spoken about them. There are many levels of type certification. So called “standard type certification” is only one of them. It is true that the certification costs for a new Boeing commercial aircraft may be hundreds of millions of dollars. Smaller, four-place, general aviation aircraft are routinely certificated for much less. If this was not so, no new general aviation aircraft would be built. Yet new models are being introduced every year, ranging from trainers to light jets. The perceived impediment of “standard type certification” would be obviated in the near term (for the next 2 decades) if we adopt my suggestion to permit experimentally type certificated space vehicles to be flown, with limitations, for profit. This is a “no cost” solution. Full standard type certification would not be mandated for 20 years.

When one considers the multiplicity of “plans,” documents, reviews, meetings, tests and acceptances now being required by AST to obtain a reusable launch vehicle license, the cost of “certification” vs. the cost of RLV “licensing” seems to have become comparable in both time and dollars. The ultimate difference is that RLV licensing is being done by an entity with no experience providing true certification expertise to the operator, while the FAA/AVR has certified thousands of different aircraft types. Furthermore, once an operator has a type certificate, the vehicle may be flown without any further notification or permissions (excepting a flight plan) while AST requires 60 day advance notification of every flight, and intrusive and burdensome inspections, reviews and further approvals to operate once a license has been granted.

Is there any example of experimental type certificated aircraft being operated for hire today?

Yes. The FAA now allows experimental type certificated aircraft to be rented to certified flight instructors, who may then use them to train student pilots. This is operation for hire and is a recent exemption to the rule. The rationale for letting student pilots pay to fly in an experimental aircraft is the same as I propose for “informed consent spaceflight participants;” that is, the student pilot, by virtue of his or her training, knows the risks and is able to make a judgment to accept or reject the risks. The suborbital or orbital spaceflight participant would be assumed to be capable of the same judgment. The spaceflight participant will not be walking up to a ticket window and buying a seat; it is widely expected that they will undergo instruction and orientation training by the firms offering the flights prior to being accepted to fly.

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