WASHINGTON — The Defense Department should step up support of commercial space companies to take advantage of capabilities that might otherwise be lost, a new report concludes.
That recommendation is among several in a study called Space Agenda 2025 released Oct. 24 by The Aerospace Corporation and its Center for Space Policy and Strategy (CSPS). The report is intended to provide advice to the next administration on key topics in civil, commercial and national security space.
In a briefing held in advance of the report’s release, Sam Wilson, systems director at CSPS, said the Defense Department is benefitting from growing commercial capabilities in areas like commercial remote sensing, much of which was fueled by a boom in private investment in space companies several years ago. Private investment has dropped significantly since a peak in 2021, though, and investors say access to capital remains difficult for space companies today, especially those trying to raise larger, later rounds.
“For the Department of Defense, this unique investment environment over the last several years presents an opportunity and a dilemma,” Wilson said. The opportunity comes from the emerging commercial capabilities it can use, such as in imaging.
“The dilemma is that these companies need revenue,” he said. “The commercial markets for many space capability areas cannot sustain these companies.” He said Aerospace looked at about 150 commercial space-based remote sensing companies and estimated that “very few, if any” could be profitable without government revenue.
The report recommended the Defense Department consider “anchor tenancy” for such companies, becoming the largest customer. “Without consistent government demand, many U.S. commercial space firms that offer valuable defense applications may not survive,” Wilson said. “With the right funding and approach, DOD can ensure it can use these assets for defense purposes in the longer term.” Such support could be less expensive for the government than trying to develop similar capabilities on its own while supporting the U.S. commercial space industrial base.
Jamie Morin, vice president of defense strategic space at Aerospace, noted at the briefing that the Defense Department has supported approaches in the past, like assured access to space, to ensure there were multiple providers of a service needed by the DOD. “If the government is willing to put the economics behind the policy, you can sustain multiple vendors in places where the pure market economics might not take you.”
That conclusion was from just one of 16 chapters covering a wide range of policy issues. “The Center for Space Policy and Strategy tries to stay away from direct advocacy of specific solutions,” Morin said. “We’re here to clarify the issues and provide context.”
Another paper in the study addresses the “wicked problem” of space regulatory reform. “It’s complex to define, it has many stakeholders with different priorities and different incentives, and there is no easy or clear solution or ending point,” said Brian Weeden, a systems director at CSPS, explaining the issue at the briefing.
The study identified several issues for space regulatory reform, from the issue of “mission authorization” for commercial space activities not currently regulated to export control reform and the challenges of large satellite constellations. The report does not make specific recommendations on those issues but instead calls on the next administration to “urgently” deal with them and put more political capital on implementing policy decisions. It also recommends greater cooperation with Congress on those issues as well as determining what can be done at the agency versus interagency level.
“We recognize this is difficult,” Weeden said, “but we are running out of road to kick this can down.”