Changes at the Department of Commerce to Reshape Government Leadership: The Case of Commercial Space


By Ed Timperlake

As part of the streamlining of government and reduction of over regulation, the Trump Administration Department of Commerce is taking a lead role in the space policy reform championed by the President.

According to an article by Jeff Foust published by Space News on May 27, 2018, the new approach was discussed:

With the signing of a new presidential directive calling for commercial space regulatory reform, the Commerce Department has released new details about its plans to create a “one-stop shop” for such issues.

In a statement issued after the May 24 signing of Space Policy Directive 2, the department said it plans to combine several existing offices into a new office called the Space Policy Advancing Commercial Enterprise (SPACE) Administration.

The SPACE Administration, the department said, will incorporate the Commercial Remote Sensing Regulatory Affairs office and the Office of Space Commerce, currently part of the National Oceanic and Atmospheric Administration.

The department was already planning such a consolidation of the offices, which would be moved out of NOAA and directly under Commerce Secretary Wilbur Ross.

Ross has also directed Commerce Department agencies that deal with space in one fashion or another to assign a liaison to the new office. Those offices include the Bureau of Industry and Security, International Trade Administration, National Institute of Standards and Technology, NOAA and National Telecommunications and Information Administration.

Recently, Secretary Ross and Congressman Smith gave keynote addresses in front of a meeting at the Hudson Institute and these were then followed by a panel discussion with senior government officials responsible for executing the reform agenda laid out by the Trump Administration.

According to the Hudson Institute in describing the session:

Maintaining U.S. leadership in the face of global competition warrants a reevaluation of the U.S. political and legal landscape governing space. On July 24, 2018, the Hudson Institute hosted a session where Secretary Wilbur Ross and House Science, and the Space, & Technology House Committee Chairman Lamar Smith discussed the Department of Commerce’s evolving role in the space sector.

The web of national, regional and international institutions—organized to guide and serve an industry undergoing dramatic transformation—needs to be updated.

Rising to meet this challenge, Congress and the Executive Branch have been working together to reshape the legal environment for the commercial use of outer space.

The address by Secretary Ross can be seen in the following video:

And the discussion with Secretary Ross is provided below as well:

From the perspective of these two leaders, one leading a major cabinet department and the other chairing a key committee, it is clear that the Trump Administration is working reform of the government to facilitate innovation in the private sector, and in this case it is the space business.

Commerce Secretary Ross’s perspective was highlighted in an by Brandt Pasco Esquire and Attorney Pasco:

Today we have about 1500 functioning satellites on orbit. Within the next few years, there are active plans on the books for ten times that many.

There is a lot of concern that with existing U.S. regulatory processes, there is no path that gets us from A to B.

There is a huge amount of private equity flooding into this sector, and the potential for space to revolutionize many aspects of life here on earth is tremendous, but if the U.S. regulatory pipe cannot handle the flow many of these companies will move offshore and others will fail. Both should be absolutely unacceptable.

Under the UN Space Treaty, the normal rule is whoever launches it, regulates it. The U.S. government should be pushing to ensure these are U.S. networks, subject to U.S. law.

Moreover, the regulatory process has to be friendly enough that business doesn’t forum shop.

If our regulatory process makes companies prefer investing offshore to investing in the United States, something is profoundly wrong.

The Administration gets this, and is pushing to reform the U.S. regulatory system to make it the preferred destination for space related investment.

And for one former Commerce official the changes being undertaken under Secretary Ross and generated by President Trump and key ones.

According to a discussion with John A. Shaw, chief operating officer of the Commerce Department from 1988 to 1992, after the Ross speech, this official underscored how he saw the changes;

The promise of Commerce’s potential to become a Department of International Trade, Industry, and Commerce (DITIC) had remained unfulfilled because of the number of overlapping congressional fiefs involved in the trade arena. It remained a political mirage because no administration had the will to spend its political capital to make it real.

President Trump is the first president whose holistic approach to international trade and willingness to slay sacred cows has created an opportunity to transform Commerce into the trade juggernaut its Chinese counterpart, CITIC, is.

Commerce already has a first rate combination of agencies to serve as the real hub of US international trade. It already provides the essential staffing needed for USTR, oversees all dual use licensing for US technology transfer, generates the best trade statistics in the USG, and develops the key economic intelligence on trade for the US intelligence community.  

In NTIA it has the nexus to address international telecommunications issues, and in NIST to address standards in every sector internationally.

It has always taken the lead in space commerce via its role in the White House Space Council using the resources of NOAA.  

The Patent and Trademark Office is the world leader in IP issues and the Census Bureau provides the most reliable index we have to the changing realities of our domestic market.

Incorporating USTR, the SBA, and a few other outlier agencies into Commerce and streamlining its ties to the Export-Import Bank could finally bring US international trade in the 21st century to the commanding and coordinated position the country deserves.   

With the Second Quarter GDP just announced at a very impressive 4.1%, this recent upsurge in US economic growth is due in part to the efforts to shape a less intrusive government and relief from over regulation.

And clearly Secretary Ross and the reforms at the Department of Commerce are part of shaping a more effective governmental role in working with the private sector.


The remarks by Representative Lamar Smith were released by the House Committee on Science, Space and Technolgy on July 24, 2018:

Thanks to the Hudson Institute and Ken Weinstein for inviting me to be here.

A generation ago, space was largely an unexplored frontier. Few would have imagined a world of reusable private space rockets, global telecommunications and remote sensing, private space stations, celestial resource prospecting, or on-orbit manufacturing.

A highly dynamic international security environment has changed space from a sanctuary to a congested and contested domain. At the same time, the private sector is opening up new frontiers and taking an increasingly important role in outer space.

New technologies and novel strategies are lowering the costs of access to space. The standardization of space technologies and satellite platforms enable a robust human presence in the sky above us.

New entrants, such as SpaceX, Blue Origin, and Virgin Galactic, along with companies with a long heritage like Lockheed and Boeing, are investing significant capital in space exploration. Private equity is funding a new era of innovation that is changing the economics of space activities. With this evolution comes new challenges.

The Outer Space Treaty was developed in 1967 to establish a framework for international space law. Among other provisions, the Outer Space Treaty requires national governments to be responsible for all space activities carried out by their nation, whether the missions are led by government or private companies.

American space operators have long faced uncertainty about which federal agency has responsibility for approving non-traditional space initiatives and ensuring compliance with the Outer Space Treaty.

In some instances, this uncertainty has constrained capital formation, driving American companies overseas. With increased commercial activity in space, this uncertainty is becoming a larger problem.

Outdated and cumbersome regulations continue to hinder innovation by companies that focus on launch, remote sensing, and non-traditional space technologies.

Those are some of the challenges we face. But there are solutions. Continued U.S. leadership in outer space requires us to maximize and integrate the strengths of all three groups of stakeholders: military, government research, and commercial. This will result in a new concept of national power in outer space.

We must use the energy of a vibrant private sector and create laws and policies that bring all three communities together, working towards a common end: American leadership in space.

The House Science, Space, and Technology Committee is contributing to this effort. Two of our bills this year established the United States as the jurisdiction of choice for private space activities.

The first bill, the American Space Commerce Free Enterprise Act, provides a legal and policy framework that simplifies the space-based remote sensing regulatory system, enhances compliance with international obligations, improves national security and removes regulatory barriers facing innovative space operators.

The need for this legislation became clear during the previous Administration when serious uncertainty arose after U.S. space exploration companies sought payload approval from the Department of Transportation for non-traditional space activities.

But the DOT payload approval process is only designed to prevent the launch of payloads that jeopardize American interests and safety. It does not provide for the authorization and supervision of in-space activities, as required by the Outer Space Treaty.

So the Executive Branch has been unable to assure the private sector that new and innovative space missions would be approved for launch.

Another important aspect of the bill is updating space-based remote sensing regulations. Hundreds of private remote sensing satellites orbit the Earth today, and we all rely on these satellites for accurate mapping, enhanced agriculture, and improved weather forecasts.

But existing law governing the licensing of space-based remote sensing was enacted in 1992 at a time when there were no private remote sensing satellites.

The law put the burden on the applicant to justify its operations. This is stifling private innovation and putting U.S. industry at a disadvantage.

Our bill fixes this broken system by providing a streamlined licensing process aimed towards approval, not denial.

This legislation will spur investment and innovation, which will create new high-paying, high-value jobs across the country. It increases American competitiveness and attracts companies, talents, and money that would otherwise go to other countries.

The bill also consolidates regulatory authorities into one federal agency: the Secretary of Commerce’s Office of Space Commerce. The result is a single decision point for the authorization of activities in outer space.

In short, the American Space Commerce Free Enterprise Act ensures the U.S. and its workforce will benefit from the new space-economy.

The second Science Committee bill, the American Space SAFE Management Act, establishes a space traffic management framework built on science and technology, space situational awareness, and space traffic coordination.

Today, there are eleven hundred active satellites in orbit. In a few years, there will be tens of thousands. A variety of new spacecraft soon will go into operation. They could include private space stations, on-orbit repair and refueling satellites, and celestial resource prospectors.

This Act directs the Administration to coordinate its Federal research and development investments in space traffic management.

It directs the Administration to work collaboratively with the private sector and establishes a NASA Center of Excellence that will develop, lead, and promote research in space traffic management.

This bill also creates a civil space situational awareness (SSA) program within the Department of Commerce. Commerce will provide a basic level of SSA information and services, free of charge, to the public.

While the Department of Defense retains the information gathering resources currently used to compile the catalog of space objects, Commerce will augment that with data from other sources, including the private sector and foreign partners.

And the Act establishes a space traffic management framework. This framework consists of voluntary guidelines developed by the government, standards developed by industry, and a pilot space traffic coordination program.

The pilot program allows the government and stakeholders to experiment and develop best practices to manage space traffic.

It is a common-sense first step in what will be a long-term process of creating a comprehensive space traffic management framework.

Both of these bills direct the Department of Commerce to be responsible for carrying out the supervision of space activities.

The reason for that is simple: because of its longstanding mission and agency culture, the Commerce Department is best equipped to help entrepreneurs and innovators build companies and succeed in business.

Many of the bills’ goals have been included in President Trump’s Space Policy Directives. And Commerce Secretary Wilbur Ross announced a major reorganization of his Department that reflects our bills’ provisions.

To ensure success, Secretary Ross is putting people, money, and expertise into a new Space Policy Advancing Commercial Enterprise (SPACE) Administration and a restructured Office of Space Commerce.

We should thank the president, the vice president, and Secretary Ross for carrying out this reorganization.

The momentum is building for these bills and the last step before becoming law is approval by the U.S. Senate. We need champions there to get these bills through committee and on to the Senate floor.

Farsighted and determined policymakers and scientists led the charge for the first wave of space exploration.

Now it is our responsibility to expand our leadership in space, working together with visionaries like Jeff Bezos, Richard Branson, and Elon Musk.

The history of space exploration will feature this bipartisan, bicameral bill as having invigorated the next space age and maintained America’s leadership in space.

America is the prominent actor on the global stage of outer space. We have the responsibility and the expertise to guide the world toward a peaceable, prosperous, and safe space environment. But we need to act, and act now.

The featured photo is of Secretary Ross at the Hudson Institute meeting and is credited to Ed Timperlake.