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Hertzfeld, Henry R. "Globalization, Commercial Space and Spacepower in the USA." Space Policy. Vol. 23 (2007): 210-220. [ 5 quotes ]

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Commercial Space Services Market Necessarily Global
 
There are many good economic reasons that explain why commercial space needs to be global in nature to survive in a competitive world. Primarily, it is the satellite's capability to connect to ground stations anywhere in the world and to transmit data and information globally (or, if not to all nations, to a vast majority of the world's populated areas). To make a profit on an investment that has high technological risk and very high up-front demands, a large market is essential. The additional cost of adding a new ground station is very small in comparison to the cost of the space system. Since satellites can have global coverage, having a global market becomes an attractive profit potential. It can be easily argued that many space services are "natural monopolies." That is, one large provider can have the ability to serve all customers much more inexpensively than multiple providers.
Hertzfeld, Henry R. "Globalization, Commercial Space and Spacepower in the USA." Space Policy. Vol. 23 (2007): 210-220. [ 5 quotes ] [ page 212 ]
U.S. can only Preserve its Spacepower Dominance through the Marketplace
 
In the early years of space, the technological dominance of the USA permitted spacepower to be virtually a given, rivaled only by the competition with the USSR. Today the reality is that the USA, while still the leader in space expenditures, no longer dominates or controls developments in many space applications. Spacepower, as it might be measured by dominance in economic or commercial space activity, is broadly spread around the globe. There are only limited ways the USA can use commercial space for maintaining elements of control over the industry. One is to have the largest market share in any sector which encourages others who may want to compete to adopt compatible standards for interoperability. The other is to be the leader in developing new technology and to establish dominant control over particular markets by protecting that technology. Both methods are risky, expensive, and do not necessarily guarantee success. The only other way the USA can assert spacepower in the commercial sector is by using non-market (political, diplomatic, or military) actions to discourage or deny others access to commercial space. It is highly unlikely in today's world that such measures would be successful. Other nations have independent access to space and space assets. Many companies using space for commercial purposes are multinational enterprises, often with significant US corporate investments and components. And the US government itself depends not only on US commercial space goods and services, but also on foreign systems. Therefore, disrupting the fragile market and price system that is developing for space commercial assets would not be in the best interests of the United States.
Hertzfeld, Henry R. "Globalization, Commercial Space and Spacepower in the USA." Space Policy. Vol. 23 (2007): 210-220. [ 5 quotes ] [ page 217 ]
Many Historical Examples where U.S. Attempts to Preserve Commercial Spacepower have been Counterproductive
 
Below, some examples are very briefly listed. The major issue for consideration in the context of spacepower, however, is that many actions taken by the government for very valid purposes that are unrelated to space may create conditions that negate the ability to carry out space policies as prescribed in Presidential Decisions. Alternatively they may create incentives for other nations or the companies in other nations to more aggressively develop systems in direct competition with US capabilities. Taken collectively, many of these actions may make any attempt at a US policy that emphasizes economic space- power very difficult, if not impossible, to carry out. And, looking historically, many of these non-space policies and actions may have created and sped-up the develop- ment of robust space capabilities in other nations. This, in turn, has weakened the economic leadership of the USA in space and diluted its power in space systems develop- ment as well as in the technology and use of space applications.

  • The long delayed decision to allow higher resolution images from earth observations satellites to be released for civil and commercial purposes: By the early 1990s, until when there was a restriction on releasing imagery with a resolution less than 10 m and on permitting private US companies from collecting or selling such imagery, France had begun selling it on the open market, as had Russia. Again, as in the above examples, nations with aggressive economic and industry space policies were able to capture market share from US companies hindered by policies designed for security, not commercial, purposes.
  • The imposition of very strict export controls on space systems and high technology products. Both the US and foreign industry as well as foreign governments have bitterly complained about the very strict enforcement of export control laws since the late 1990s. It is increasingly difficult to share R&D information, to sell US space goods and services abroad, and to cooperate with foreign nations, even on government projects. The hardest hit space industry has been US satellite manufacturing, where foreign competitors have built and are selling equipment worldwide at the expense of a market that formerly was controlled and dominated by the US firms.
  • Sunset provisions on indemnification of space third-party liability. Although perhaps less economically disadvan- tageous to the USA in providing competition in launch services, most foreign launch companies fully indemnify their domestic industry from the unlikely, but possibly nations were given the incentive to develop independent capabilities. And, with the ensuing maturation of launch and satellite technologies, they were able to build very competitive and capable equipment without US compo- nents or assistance.
  • The decision not to authorize launches of foreign operational telecommunications satellites on US launch vehicles. Again, as with other similar restrictive policies, nations were given the incentive to develop independent capabilities. And, with the ensuing maturation of launch and satellite technologies, they were able to build very competitive and capable equipment without US compo- nents or assistance.
  • The decision to retain the governance of the GPS system in the DoD. Even though the GPS system was funded, designed, built and operated by the DoD, the latter had provided an unencrypted free signal for worldwide use as part of the program. Use of this signal has grown into a multi-billion dollar industry very quickly. Receivers are manufactured in many nations, and today the system has become one of the very important infra- structure services offered from space. It is important now to both the military and to civilian communications and timing systems. From the mid-1990s to today, it is the only fully operational space navigation system. That is about to change as Europe, Russia, and possibly China develop their own system. Nobody questions the integrity or value of the US GPS system but, partially because it is controlled by the DoD without any inputs from other nations, there are incentives to invest billions of dollars abroad to duplicate the capability. Again, from a military point of view, not giving up any control of a very critical technology is understandable, but from a practical and economic perspective, the USA could probably have maintained a monopoly position, or at least greatly stalled foreign developments, if the government had been able to compromise on this policy.
Hertzfeld, Henry R. "Globalization, Commercial Space and Spacepower in the USA." Space Policy. Vol. 23 (2007): 210-220. [ 5 quotes ] [ page 218-220 ]
Globalization of Spacepower Capabilities has made Unilateral Attempts to Preserve it Counterproductive
 
Today, just about everything has turned around. There is no technological race with another superpower. Nuclear technology, although still under strict controls, has spread across the world anyway. Space capabilities ranging from launch vehicles to satellites are likewise available to almost any nation with the money and inclination to purchase them. Space technical and manufacturing capability exists in just about every developed region of the world and nations are not dependent on the USA. The world economy has become far more interconnected and the importance of international trade in goods and services for the USA has grown from some 5% of GDP in the 1960s to about 20%.

The issue that confronts US space policy in regard to economic and commercial spacepower is whether any policy that attempts to put the USA in a dominant economic role in space will be effective. The above discussion has amply illustrated that most such policies have backfired. They have encouraged other nations to invest in competitive systems so as to develop and maintain their own independent capabilities in space. Although worldwide competition in space infrastructure as well as in space-related products and services may have many benefits, it does severely limit the amount of control any one nation might have on very important dual-use technologies in space.
Hertzfeld, Henry R. "Globalization, Commercial Space and Spacepower in the USA." Space Policy. Vol. 23 (2007): 210-220. [ 5 quotes ] [ page 220 ]
Best Policy for Ensuring Commerical Spacepower is Encouraging Investment in R & D -- Isolationist Policies will only be Counterproductive
 
In summary, for a variety of reasons, the USA cannot return to the space era and space policies of the 1960s. The USA can be and is a leader in space technology, but it is not the leader in all aspects of space. Spacepower through commercial prowess is likely to be shared among space- faring nations. Policies aimed at isolation and at protection of commercial industries only encourage others to develop similar (and sometimes better) products. The only policy that can now be effective in developing a larger and more powerful economic competitive engine for space pro- ducts is one that encourages R&D investments by space firms. The introduction of new and more advanced products will create a larger global market for the USA. A policy emphasizing offense rather than defense would be advantageous for stimulating spacepower through space commerce.
Hertzfeld, Henry R. "Globalization, Commercial Space and Spacepower in the USA." Space Policy. Vol. 23 (2007): 210-220. [ 5 quotes ] [ page 220 ]