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Interstellar Rights

Interstellar Rights Providing more legal support to companies to explore outer space brings benefits to all mankind

The exploration of space is now shifting the paradigm as recent innovations put in light incredible discoveries. The space economy is undoubtedly the most captivating industry of the future. As it develops, dependence on satellite-based services considerably increases. Everything from weather forecasting, navigation and positioning application, the synchronization of transactions, of databases and financial markets, to telecommunications, television, and disaster management depends on satellite-based capabilities. New products and market segments are rapidly being developed, such as smaller, more affordable satellites. The competition between companies (and states) grows as well, as new opportunities emerge, such as global broadband, space tourism, colonization of planets, and asteroid mining.

The deficiencies of property rights in space are a barrier for firms that want to conduct commercial activities there. This uncertainty or incomplete rights prevent them from “obtaining external financing, hinder the protection of their investments in space, and deprive them of the assurance that they can appropriate income from their investment.”[1] The costs to develop any commercial or exploratory activity in space are extremely high. If companies are not provided the chance to raise capital, they will not be able to conduct their economic activity in space. Therefore, legislation should take into account the increased benefits that space companies bring to all humankind by recognizing their “rights to buy, own, and sell titled property.”[2] 

From some Cold Star-Wars… 

Space was initially explored by the two main spacefaring powers (the United States and the Soviet Union), to which later powers were added, such as China, an association of European states and India. These were supported, in the case of the West, by large companies with substantial government contracts (Boeing, Lockheed, and Ariane Group). As the main goals were discovery, exploration, science, and security, there were no significant problems in terms of regulation. In 1967, the Outer Space Treaty was signed by 107 nations to prohibit the arming of space through satellites or of celestial bodies such as the Moon and to restrict any country that claims ownership of celestial objects. In 1984, the Moon Treaty was drafted to clarify the economic activities that government agencies and private companies can undertake on the Moon. However, this has not yet been ratified by countries interested in exploring space.

Until the early 2000s, there were few other regulations regarding space, planets, asteroids. Economic activity in space was also lightly regulated until then. As new entrants, especially companies, entered the space economy, the competition increased and the risk of “running out of space in space” (Sullivan, 2019)[3] appeared. Because of the high competition, there is a secondary market for satellite placements in space. When they send a satellite, private investors are occupying the space. Then, they rent it like a real estate whose value will increase exponentially over time. Thus, regulation increased as large and small technology companies are competing to launch thousands of satellites. Because the technology has become more affordable, even emerging economies such as those of Africa or India started launching their own satellites.

Space is a natural resource similar to water or Earth. This resource is also limited, at least the useful portions of it, thus we may have a problem of overconsumption and abuse. We might eventually see, for space, a system similar to the way in which aircraft have flight corridors and slots on an airport to load/unload passengers and perform take-offs/landings. Large companies such as SpaceX, Amazon, OneWeb, and Facebook are developing projects that involve the launch of thousands of satellites. SpaceX’s Starlink program is intended to put nearly 12,000 satellites into Earth orbit. Amazon plans to develop the Kuiper project, which will put more than 3,000 satellites into orbit to deliver high-speed Internet to 4 billion new customers. OneWeb has announced that it will start launching thousands of satellites to bring Internet connectivity to every part of the world from 2021 onwards.

The new companies have not replaced the government agencies, the latter still being relevant to the space industry as market makers for products and services consumption, through the stabilizing effects and the continued importance of national budgets. The added value of the private environment is that of reducing costs, increasing access to space for companies and individuals, and fueling innovation. The private environment succeeded in reducing barriers for entry into space, and some have termed the reduction of launch costs and system costs as a “Moore's law of space”[4]. If, for a long time, launching a kilogram into space involved costs of about $ 50,000, now they are only $ 2,500 (in the case of SpaceX). Moreover, SpaceX managed to lower the launch price of the Falcon 9 rocket to nine million dollars, which is ten times lower than in the case of NASA, ESA, Roscosmos, JAXA. The Falcon 9 rocket was designed from the ground up for maximum reliability. Its simple two-step configuration reduces the number of separation events, and due to the nine engines in the first stage, it can safely complete its mission even if some engines have malfunctioned. 

… to a cool celestial-peace 

As data availability increases at low prices, the Earth-oriented space economy is becoming more and more attractive. The space market has grown from $ 175 billion in 2005 to about $ 375 billion in 2017 (7% growth rate p.a., outstripping global economic growth rates[5]) and is expected to expand enormously in the coming years. Goldman Sachs projects that the global space economy will reach $ 1 trillion by 2040. Morgan Stanley estimates that this economy will reach $ 1.1 trillion, while Bank of America Merill Lynch speaks of $ 2.7 trillion, taking into account a relatively modest annual growth rate. The segments of the space economy that will contribute the most to the growth of the space economy in the future are the colonization of planets and the mining of asteroids.

Neil deGrasse Tyson and Peter Diamandis stated that the first trillionaire on Earth would be an asteroid miner. The National Space Society produced detailed roadmaps for asteroid mining in 2012. Asteroids contain valuable resources rare on Earth, such as scandium, neodymium, yttrium, platinum, iridium, and palladium. There are various companies interested in pursuing space exploration and settlement, such as Planetary Resources (formed by Google executives Larry Page and Eric Schmidt), Moon Express (founded by Microsoft billionaire Naveen Jain). However, mining costs are extremely high (from $1 bn to $20 bn), and companies do not have the right to own the portion of the celestial body from which the valuable resources are harvested. If companies are not provided the chance to buy, own, and sell titled property so that they can raise their capital, they will not be able to develop land or extract the resources it holds. 

Exploiting pieces of the skies… 

The asteroid that will travel 19,000 miles away from Earth over ten years is an excellent opportunity to test and discover new technologies that will be used on Mars. If mining companies are supported by space regulation, they will be able to raise their funds and extract resources from the asteroid and to bring them to Earth. Also, this would be an effective and safe way to complete a long-term mission to Mars. Investors want to finance this idea because they want to be part of the discovery of these amazing technologies. However, if the companies have no property rights or they are uncertain, they will be less likely to be supported by the investors. This is something that even science fiction writers are starting to grapple with and Daniel Suarez’s novel “Delta-V”[6] about the first manned mission to mine an asteroid deals with advances in governance as an issue of similar importance to that of technology.

The assumptions based on which national governments do not recognize the property rights are that they could only recognize the claims of their own legal persons (citizens, residents, corporations chartered in that nation); and that they would defend those claims by force. Tennen (2010) argued that the decision of a national government to recognize property rights “would constitute a de facto exclusion of other states and their nationals, and thereby constitute a form of national appropriation.”[7] Therefore, this may lead to international conflict, which might affect the enforcement of the Outer Space Treaty.

Private companies have equity in the fair use of space in space. Therefore, they have to promote effective and fair use of space, and space law has to advantage them. The new regulations, especially the ones created by the US and Luxembourg governments, encourage companies to explore space because of the prospect of gains through taxation. However, they did not receive great support for their actions. Some of the laws/programs currently in force are the United States Commercial Space Program Act of 2010, the United States Commercial Space Launch Competitiveness Act of 2015, the Luxembourg Space Resources Initiative of 2017. The United Kingdom also drafted a space simulation program in 2017.

After the lobbying efforts of the asteroid mining company Planetary Resources, the US has signed the Commercial Space Launch Competitiveness Act of 2015. It explicitly allows US citizens and industries to “engage in the commercial exploration and exploitation of space resources”, including water and minerals, a right which does not extend to extraterrestrial life. However, it states that “the United States does not assert sovereignty, or sovereign or exclusive rights or jurisdiction over, or the ownership of, any celestial body.” Some scholars consider the US asserts sovereignty through this act and therefore violate the Outer Space Treaty. 

…To enjoy on mother Earth 

In conclusion, as the space economy develops, creating close competition and bringing benefits to all humanity, a well-developed regulation on the exploration of outer space is required. Space legislation and policy must find solutions for managing competition and for situations of “depletion” of space in space, and ensuring that the law is applied correctly. Governments should encourage space companies because they would stand to gain enormous benefits, either directly, through taxation, or indirectly, through the impact of space on our economy, which Brice Technology and Aerospace claims, in the case of the US, to be tied to 5 trillion dollars of the US GDP[8]. Also, they would bring valuable resources to Earth. Private companies, in turn, must claim their right to use space efficiently to create value for themselves and their shareholders and, in the process, provide benefits to all humanity, such as global connectivity to the Internet through satellites, valuable minerals by mining asteroids, the possibility of space tourism, or even the colonization of other planets. 

Notes:

[1] Hertzfeld, H.R. & von der Dunk, F. (2005). Bringing Space Law into the Commercial World: Property Rights without Sovereignty. Space, Cyber, and Telecommunications Law Program Faculty Publications. 15. https://digitalcommons.unl.edu/spacelaw/15.

[2] Simberg, R. (2012). Property Rights in Space. The New Atlantis, Fall, 20-31.

[3] “Understanding the Space Economy.” Harvard Business Review, May 28, 2019, https://hbr.org/ideacast/2019/05/understanding-the-space-economy.

[4] Idem.

[5] The Space Economy: An Industry Takes Off | U.S. Chamber of Commerce. (n.d.). Retrieved December 29, 2019, from https://www.uschamber.com/series/above-the-fold/the-space-economy-industry-takes.

[6] Suarez, D. (2019). Delta-V. New York: Dutton.

[7] Tennen, L.I., Esq. (2010). Towards A New Regime for Exploitation of Outer Space Mineral Resources, 88 Neb. L. Rev. 794, 805.

[8] *** (2019). Satellites Key to $5T+ Across U.S. Economy, https://brycetech.com/reports.html.

 
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OEconomica No. 1, 2016