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Economy

What keeps space pioneers up at night

Orbiting junk, cutthroat competition could shatter business dreams

TOKYO -- The 1999 Japanese manga "Planetes" depicts cleaning up space debris -- defunct satellites, spent rocket stages and other man-made objects floating in low Earth orbit -- as a commonplace job. This cannot be dismissed as a mere work of fiction: All that junk presents a very real problem for space development in the 21st century.

Only 1,400 of the 19,000 artificial objects being tracked in orbit around Earth are functional satellites, according to the United Nations. The rest are regarded as debris. What the international space community fears is the Kessler syndrome, a theory proposed by NASA scientist Donald Kessler in 1978, whereby two colliding objects generate more debris that again collides with other objects, creating ever more space scraps. This would imperil satellites, spaceships and space stations.

With more satellites and spacecraft bound for the heavens, debris is becoming a pressing issue. "Legally, under the U.N.'s Outer Space Treaty, countries are responsible for the debris that they leave behind," explained Kathryn Thomson, partner at the law firm Morrison & Foerster and a former general counsel at the U.S. Department of Transportation. "But as a practical matter, there are no consequences. It is hard to trace debris to any particular country."

Thomson said the question of responsibility needs to be "fleshed out at the international level."

Aside from the physical challenge posed by debris, anyone jumping into the space business faces more abstract hurdles as well. For Masayasu Ishida, principal at consultancy A.T. Kearney, creating a sustainable value chain is one.

Early days

"The emerging value chain for the new space business -- involving mini-rockets, a constellation of microsatellites and big data from satellites -- is still under construction," Ishida said. "If a value chain can be constructed, connecting all of those elements to the end user, then I think the space business will get up and running."

Ishida likened the space industry to the internet of things. At its core, the IoT sector is about trying to increase productivity or efficiency through data. Ishida said space enterprises need to think along similar lines, asking questions like: "How will [satellite data] change our lives here on Earth? How will society change?"

"Space," Ishida said, "cannot exist in its own vacuum."

Space businesses that beat the odds and start full commercial operations are sure to run into some serious competition -- not only from other private ventures but also governments and state-owned enterprises.

"For example, the commercial launch market has historically been led by the Europeans, but private U.S. companies like SpaceX are eroding their market share," Ishida explained. "In the business of launching microsatellites, which is slated to grow even further, U.S. startups as well as India's PSLV [launch system] will get involved. The competition will get even more complicated as more players from different regions and backgrounds enter the market."

Thomson agrees. "While there is currently no 'trade' structure in place with respect to outer space competition," she said, "it would make sense for countries to explore negotiating a framework agreement that would govern those issues and establish the rules of engagement."

Given the potential of the business, countries are bound to compete to attract space companies to their jurisdictions. One strategy would be to deregulate the market more than other countries -- something Thomson fears.

"I think that is one of the most significant legal concerns -- whether countries will relax their standards, or have no standards and say, 'Hey, anybody who wants to launch from our country, please come,'" she said.

"It is kind of a similar approach to what you see in the maritime industry, which we in the U.S. call 'flags of convenience,' where shipping companies flag their vessels in countries that have lower tax rates and safety standards and lower labor requirements. Yes, I think that would become a major issue."

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