Fight for the Final Frontier by John Jordan Klein

Author:John Jordan Klein
Language: eng
Format: epub
Publisher: Naval Institute Press

“Commercial”: What Does That Mean?

Consensus on what is and is not a commercial space entity is currently elusive. That may surprise some security experts and analysts long familiar with that sector’s pivotal role. But it is exactly this ambiguity that makes it especially valuable for irregular space warfare.

The U.S. and Western Perspective

Some consider a commercial activity one in which a private-sector entity risks its own capital and provides goods or services primarily to other private-sector entities or consumers instead of the government.3 Examples of these entities would be providers of direct-to-home satellite television (e.g., DirecTV and DishTV), satellite radio (SiriusXM), and commercial satellites delivering Internet services (SpaceX’s Starlink and OneWeb).4

From a U.S. policy perspective, determining what is and is not commercial typically has two dimensions. The first dimension is risk-taking—especially financial—by entities other than the government. Generally, at least some private capital must be at risk, or the company must sell to the private sector. The second dimension is the breadth of the customer base and the relationship between governmental and nongovernmental clients.5 The 2020 U.S. National Space Policy defines commercial along these lines: “The term ‘commercial,’ for the purposes of this policy, refers to goods, services, or activities provided by private sector enterprises that bear a reasonable portion of the investment risk and responsibility for the activity, operate in accordance with typical market-based incentives for controlling cost and optimizing return on investment, and have the legal capacity to offer those goods or services to existing or potential nongovernmental customers.”6 This U.S. policy definition does include some ambiguous language, notably “reasonable portion of investment risk” and “typical market-based incentives.” This lack of clarity likely resulted from an absence of any government-wide consensus that would support a more explicit statement. Also, it does not link commercial goods, services, and activities directly to space-based systems. The 2020 policy does establish, however, that commercial is best understood in the context of providing goods and services to nongovernmental customers.

Other, broader definitions of commercial space include entities that sell consumer equipment where the satellite constellation enabling the capability is government owned. An example of this arrangement is the Global Positioning System (GPS), a positioning, navigation, and timing satellite constellation owned and operated by the U.S. Space Force. Among its vast array of applications are automobile navigation, cell phones, and precision farming.7 These devices are sold by commercial companies, but the satellite timing signal that makes them work is provided for free by the U.S. government.8

Another potential definition embraces capabilities and services provided by commercial entities primarily to governmental customers, such as the United Launch Alliance between Boeing and Lockheed Martin.9 It is arguable, however, that these entities are not commercial, because they rely for most of their revenue on the government, which assumes the majority of the risk as the “anchor customer.” Critics would call such entities government contractors.10 The Space Foundation, a nonprofit space-industry advocacy group, makes a similar distinction in its definition of “commercial”: “all space-related endeavors—including goods, services and activities—provided by private-sector enterprises with the legal capacity to offer their products to nongovernmental customers.

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.