29 September 2004
- General (Bad)
HR 3752
And the need for legal protection
by Carol Pinchefsky
by Charles Lurio

I (im)modestly hope that what follows may suggest some questions useful for the coverage of the X-Prize, the Branson announcement and the fate of HR 3752. HR 3752 is a Bill submitted to the United States government "to promote the development of the emerging commercial human space flight industry, to extend the liability indemnification regime for the commercial space transportation industry, to authorize appropriations for the Office of the Associate Administrator for Commercial Space Transportation, and for other purposes." This Bill has yet to be passed into law.

I sincerely hope for the respective short- and long-term success of the X-Prize and Branson ventures, despite my grave concern over the likely demise of the legislation. Do not mistake that concern for negativity about those efforts.

A fundamental problem is that without the legal protections of the legislation, prospective risks of entering the new industry will gravely narrow the 'base' of ventures and thus the range of ideas that can and will be funded.

We don't know what scheme, if any, for suborbital tourism can make a profit. But instead of maximizing the number of schemes that can be tried, we're poised to minimize them. Two years of intense and thorough discussions amongst the Hill, AST (Commercial Space office in FAA) and startups to ease unnecessary risks to investors and maximize the foundation for an infant industry are about to be thrown out.

But I question whether even the celebrated Richard Branson can overcome the obstacles to obtaining the necessary safety and regulatory approvals and to making a profit without the _legal_ framework provided by HR 3752. And that's for a guy without the need to persuade anyone else to put up the development money.

Another part of this picture: While Mr. Branson (and Mr. Allen) is to be commended for his daring, all indications are that he and his staff may have no knowledge of - let alone familiarity with - HR 3752. Even someone of his wealth and daring should be carefully examining the implications of NOT having the protections provided by the legal force of that bill for being able to make a profit from all that 'cool' hardware. As a result, someday he might just have to walk away from the hardware and write off the investment as simply useful PR hoopla.

But if he's serious about creating a profitable venture he should look into HR 3752 now, or have his people ready for the difficult task of reviving it in future. Very limited human resources have to date stretched their own limits in developing this legislation; they may not be available at all next year.

I suspect that Mr. Rutan is advising Mr. Branson not to worry about regulations - 'build it and they will have to regulate you with near total freedom'. Kindly put, based on my experience and understanding this seems a shaky theory. Does Branson want to bet on it?

Another concern: I understand that, as reflected in the proposed $200,000 ticket per passenger, Rutan's cost of operations using the hybrid rocket system is fairly high versus that of a fully liquid fueled system. Though Branson and Rutan think they can make his system profitable, others are less optimistic.

Again this raises the question: do we really want to start by minimizing the ideas that are tried in the new industry, the likely result of losing HR 3752? Do we want to go yet again through the rigamarole of pretending to try to expand the commercialization of spaceflight while tying our hands, thus nearly preordaining a negative result?

I've had it with that self-deception, which each time has falsely reinforced the forty-year public perception that, 'spaceflight is not subject to the practical results of real and substantive free markets'.

Bunk. The free market can operate to produce practical technologies wherever it is allowed to exist and a substantive market potential is present. Will we allow it to work this time? Or will the myopic concerns of Washington aides who care not a whit about this 'week of the X-Prize' or proposals for letting a space market really move be allowed to destroy that chance?

Even disregarding the questions of manpower cited above, the cycles of Washington make it very unlikely that HR 3752 could be revived for years. I'd suggest you ask Rich Pournelle (or Jeff Greason) of XCOR Aerospace about that, and also about the concerns that make it so vital that a variety of approaches be effectively encouraged in this new industry rather than in practice prohibited. I've come to respect their views on these things for the simple reason that they make sense.

SpaceShipOne has just made its successful flight out of Mojave. Great dreams are being dreamed of creating an industry that at no public cost could finally create practical human spaceflight.

And at the same time a small crowd in Washington that cares for none of this, is (to paraphrase this week's "Aviation Week") about to create a real legacy: of having strangled an infant industry in the crib - and with it, the best opportunity for real progress for human spaceflight in the 43 years since it began.

Donít let them get away with it.
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Carol Pinchefsky 29 September 2004
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