Your first, your last, your everything...

First of all, Dear Mr. Aschbacher, thank you to you for wanting to support a more commercial future of space. This is a great aspiration, keep it on.

However, I would like to use the opportunity to point out that the European Space Agency (ESA) is not only in the unique position to support new space, some of its well intended actions are also among the the things that are holding us back. Let's have a look!

Introduction

ESA has been founded to enable cutting edge space in Europe in 1975. Since then many things have changed. For example, while 4 decades prior it took the combined know-how and money of key European governments to build space missions, today universities and even small and medium sized enterprises can do cutting edge systems.

ESA started out when space without them was unthinkable. This has changed.

Consequently many of the tools and approaches from back then no longer seem useful. Rightfully people have begun to classify things of the past as "old space". As a vision towards a better future, the term new space was coined. As central element less dependency of government action and government funds.

If our industry wants to benefit from all the opportunities of #NewSpace, we need to learn to live on less government support.

NewSpace unfortunately finds itself in a heavily distorted "market" it often counts more where you come from and who you know than what you have to offer. While this is acknowledged by almost everyone it seems that it is far less clear how we get out of this labyrinth. I personally think that the current strategy to carve out a little protected corner for new space while otherwise not changing anything will not lead to desirable results. In the contrary, we are at risk to create more (young) old space companies.

Your first...

The space industry is known to have very high entry barriers. If you have not flown you will likely not fly. Insofar it seems attractive when the European Space Agency commits to act as a anchor customer.

Your Last...

The problem starts when the agency buys stuff that it does not use for itself. A prominent example is the Copernicus program. As described in Episode 2 of this blog - it is killing commercial opportunities in the upstream. Or simply said, you can't compete with free. For as long as ESA dumps image data into the market using the free and open data policy there will be very little opportunity to sell the same type of data to customers.

Your everything...

Consequently, up and midstream get de-coupled from the application in the down stream, and stay for ever dependent of tax payer money while ESA acts as an intermediary. Your anchor customer is your first but may also your last, if you are not careful.

What should be done

It is good to have an anchor for when you want to wait out a storm but in order to not be weighted down by it when you want to set sail we need better rules. Here is what I propose:

• Government anchor customers should have a direct use for the products and services that they purchase. For example if ESA has no internal use for the image data of Copernicus cooperating missions, they should not be the ones to purchase it.
• If digital services or data is procured then the utilization for commercial use may only be "free" in accordance with European subsidy laws. This is to enable new business but not to make them dependent on government action.
• If a product is generated by a PPP or is made possible by a grant this advantage needs to be taken into consideration when A) applying for future government contracts and B) when doing normal commercial business. In the first case the full cost should be taken into consideration during the bidding process a in the second case the government PPP partner or grant giver should ask for a fair return on commercial revenues.
• Space agencies should have indicators for when the research and development is done and consequently should not take action when things that have matured. We need a commercial space act that prevents government space agencies to provide grants or subsidies in areas of the market that already have or could have a flourishing commercial space industry.

Dear Mr. Aschbacher, as you can see from above recommendations a successful #NewSpace needs a level playing field and rules against market distortion. While anchor customers can indeed be a good tool to foster a thriving space economy it should also taken into consideration that there is a risk of destroying potential markets and keeping the industry ever dependent on government funds.

How can you help:

This text is part of a series of articles in which the author sets the framework to start a discussion about the wrongs of the space industry. If you have experienced similar things, leave a comment. Other views and opinions are very welcome, too, as they may present a way forward. Please be kind to each other.

Disclaimer

The author’s views are his own do not represent the views of Berlin Space Technologies.