[For some reason this got published with the wrong title this morning. I’d like to blame some technical error, but it was most likely human error induced by caffeine deprivation.]
A federal judge last week dismissed an amended antitrust lawsuit against the United Launch Alliance filed by SpaceX, the Space Law Probe blog reports. (See also the subscription-required Space News article.) The judge concluded, in her dismissal order, that “The facts in the matter before this Court do not support SpaceX’s claim that it is a ‘full-fledged’ competitor in EELV-Class Markets.” and that it has not demonstrated that it has been harmed by Boeing and Lockheed. The ruling also took note, in a footnote, of the Falcon 1 launch failure in March (although referring to it as an “EELV-class vehicle”, which it’s not), saying that the failure “does not preclude it from being considered a competitor but it is a relevant factor in the evaluation.”
Where SpaceX goes from here is uncertain. Space Law Probe states that since SpaceX’s complaint was dismissed with prejudice, that means “no more bites of the antitrust apple for SpaceX” at the district court level. SpaceX vice president Larry Williams told Space News that the company was considering its options, including appealing the decision; SpaceX has until June 14 to file an appeal. Incidentally, Williams has an op-ed in this week’s print issue of Space News discussing the concerns surrounding the ULA, saying that the Federal Trade Commission, still evaluating the proposed merger, needs to ensure that there are appropriate safeguards if the merger is approved, such as allowing on-ramps to new entrants, like SpaceX.
While I am on SpaceX’s side, here, it is hard to blame the judge for this decision. I’m a little concerned at how ready SpaceX is to go to court. May I respectively suggest that, here and now, SpaceX (and space advocates in general) would be best served if the company put all its resources into producing a working rocket, and then worry about legal strategies.
— Donald
I think that this ruling provides indirect verification of something I think Elon et al have done that has actually harmed ‘the Cause': and that is the previous ‘case’ (not yet was in court when NASA caved with GAO’s help) when Elon and Company took action to prevent Kistler from carrying out a contract they had previously been selected for, using their Kistler K-1 reusable vehicle. Keep in mind, Kistler preceeded Elon as a space entrepreneur by years (or decades, if include other projects). Over $500m of non-government funds had been raised and the vehicle was under construction. And Elon,through legal maneuvering, got the GAO to make NASA back down on the whole process so that Elon could ‘compete’. Only one issue, of course: Elon ain’t in the same class, of work, credibility, vehicle, or funding. In short, he intentionally brought the downfall of the single most advanced private launch vehicle effort in history–even though he was–and remains–incapable of stepping in and doing the same thing, now or anytime soon.
In fact, now after having only spent $100m on an expendable vehicle–with hopes, maybe, of partial reusability later– and failed at that (I’m being harsh here for a reason) so far, he’s now going after government money via COTS. As far as I’m concerned, right now, in May 2006, Elon has caused more net harm to the space future, than he has helped it. In short, he’s in a hole, and drug others with him, and is happy about it.
I’m routing for his future success, for the sake of everyone.
And, hopefully, there won’t be another Elon-clone at that time to come along and deep-six Elon just before he has a real chance to prove himself with a real vehicle that will really change paradigms. That would pile one sadness for humankind on top of another.
But let’s be frank: at the moment, due to his actions, the score stands at: Elon’s ego-1, sustainable space future- zero. I hope history is later able to record that he turned that ratio around and made a true net positive contribution to a sustainable human space expansion into the solar system.
Dave Huntsman
Look, Kistler was going nowhere with that $500M. For example, they were going to test a single engine and then assume that a cluster of them would behave just fine without further testing. They were in cloud cuckoo land.
Elon did NASA and the taxpayer a favor.
Another slam against a serious space entrepeneur. How sad.
Dave, as you say, I think you are overly harsh, but I agree with you re. Kistler. Elon was (and is) accepting government subsidies left and right while attacking Kistler’s chance of a similar subsidy.
That said, I have rooted for SpaceX’s vehicles from day one and will continue to do so.
— Donald
I have to say I agree wholeheartedly with the judge here. Personally I am not surprised at the ULA. Lets face it, commercially BoMart is falling behind. Just look at all the commercial launching of commsats, the number one market. Almost all of them go to Arianne, Sea Launch and ILS’s proton rocket. Heck, in the 6 years I have been working in the commsat world, we have only launched once from U.S. soil. The reason, to expensive.
BoMart just cannot compete internationally and lets face it, space transportation is an international market.
Even the DoD argument of needing multiple heavy launch payloads does not make senese for hte companies involved. Just look at hte launch manifests since these rockets went into service in 2002: 8 launches for Atlas (2 for US gov) and 4 for Boeing (3 for US gov). And the last Boeing launch in 2004 was a failure! So since they came out, they have only launch 12 times (7 commercial) between the two rockets!
During that same time, Arianne-5 alone has launched 16 (14 of which were commercial) times and add in another 9 launches in 2002 and 3 for the Arianne 4! Zenit has launched 13 times in that same period and the Proton K is around 27 times!
These are the real competitors that BoMart is looking at. Not to knock Elon, if he makes due on his promise to lower launch costs, I think he can finally make the US one of the premier launch providers in the world. But the real competition is not the ULA in the commercial arena, its ILS, SeaLaunch and Arianne. SO unless SpaceX just wants to be yet another government contractor dependent on the whims of the DoD market, he needs to be looking at winning in those markets. And in that market, it all comes down to most reliabile for the cheapest cost.
And yes, Lockheed does have a share in ILS and Boeing has a stake in SeaLaunch, but neither of these stakes are included in the ULA and for the most part, they are using Russian/Ukranian hardware.
p.s. All counts of rocket contracts courtesy of Gunter’s Space Page: http://www.skyrocket.de/space/
Mark, if you do a very careful search of the web, I think you’ll find the only other time I said something that you might want to construe as a ‘slam’ against a serious space entrepreneur is in the Arocket archives on the subject of SpaceX a month before the SpaceX launch failure:
“The last attempt revealed three important things that I had not fully appreciated before:
1) Testing: Inspiring though the capacitor story was, their testing was deficient at basic component level through to execution of the startup sequence and operation of the vehicle as a whole
2) Unreality: They appeared to really believe that they would launch, indicating that they don’t recognize problem (1)
3) Cycle time: Having the place where they find mistakes several thousand miles away from the place where they fix them significantly reduces the odds that they will achieve a working launcher at all
I don’t expect them to launch successfully until the summer.”
I’m not a cheerleader, I give my honest opinion. I want SpaceX to succeed otherwise I wouldn’t bother to criticise on such specific points. I also very much want SpaceX to have a level playing field, and wanting a level playing field is not tantamount to wanting to attack the chances of others at the same subsidies.
Now, I’m pleased to see that on this particular day of the week nobody doubts that subsidies can be helpful to alt.space companies. What I object to is companies getting hundreds of millions of dollars of taxpayer money to enact a development program with such a serious flaw, and no other company with a better plan being allowed to bid.
In this respect, SpaceX is following in the footsteps of the Wright Brothers. They spent more time filing lawsuits against their competitors than making truly useful airplanes themselves. They lost sight of the truth that the airplane was an evolved invention, and that they provided only a few links in the chain.
Mark thinks that any time someone criticizes a space entrepreneur (or even has the temerity to simply say that they aren’t God), they are being “slammed.” Unless, of course, he’s criticizing them for criticizing his precious NASA. Then it’s fine.
I agree with Rand’s core point about criticizing space entrepreneurs. NewSpace cheerleaders should not commit the same cardinal sins as the NASA cheerleaders, by ignoring or covering up the failings of those they are cheering. It is critical for us NewSpace cheerleaders (and I am one) to be productive critics of our own, and to self-police our own.
That being said, I think what Elon did in the Kistler case is just fine. Elon is just introducing a little hardball tactics into a cozy industry that is not used to the combat tactics of the free market industry he comes from. Yes, it is possible to go overboard and cross the line (and I would not be surprised to see Elon do so as the hypercompetitive approach of his former industry has done on occasion), but I don’t think Elon did so in the Kistler case.
Why?
Kistler was handed a non-competitive sole source contract with a value exceeding $200M by NASA. There was no public debate of this use of taxpayer funds — one day Kistler had a $200+M contract, while the previous day nobody knew anything about it. This was reminiscent of the non-competitive contract that NASA handed Orbital in the early 1990s for what was then the first version of the X-34 program.
There were aspects of NASA’s justification of this contract that were pretty slimy — a core part of the justification was for ISS resupply. If you recall, the contract was announced on February 3, 2004. What almost nobody commented on was that on January 31, 2004 the four (4) existing Alternate Access to Station contracts came to a conclusion. NASA needed those contracts to be gone before they could do the Kistler thing.
All NASA had to do in either case was to have an open competition for the program. Assuming NASA would have specified the requirements of the competition up front in a manner that was similar to the NASA official justifications for the sole source (e.g. Justifications for Other than Full and Open Competition or JOFOC), in each case both Orbital and Kistler would have almost certainly won. (In fact, in the X-34 case, it was recompeted in an open fashion … and Orbital did win.)
IMO, we should not blame Elon for NASA’s mistakes.
In case it is not clear, IMO we should not blame Kistler for this either. I can’t blame a space entrepreneur who, when offered a sole source contract by NASA, for not saying “I think we should compete this.”
– Al
“Look, Kistler was going nowhere with that $500M.”
Elon strongly disagrees with you, Kevin; hence, the lawsuit he filed.
“Another slam against a serious space entrepeneur. How sad.”
Mark, we agree that something ‘sad’ was involved.
I don’t think I’ve ever ‘slammed’ a ‘serious space entrepreneur’, though. I do believe Elon……who, while very serious, was also years and hundreds of millions behind Kistler and Crowd in seriousness, as I’m sure you’d agree. I feel they…and, IF they might have been successful, the rest of us….were ‘slammed’ by Elon’s action.
But you indirectly bring up a point, I think: Was his un-called for (and even technically inaccurate) ‘slam’ against Kistler, done, maybe, out of jealously? I hadn’t thought of that before. But the fact is that if Kistler had been able to truly take advantage of the opportunity, it would have helped EVERYONE who supports ‘the cause’ — Elon and SpaceEx included, in my view. That’s why the whole episode could be perceived as so sad: It wasn’t necessary; may have even been counterproductive even from a purely selfish SpaceEx point of view. After all, we’re trying to establish a new paradigm, new industries, etc. etc., with damn few real successes yet. ANY real success ends up helping everyone in legitimizing things; leaving room for Really Experirenced Entrepreneurs (e.g, like the Jim Benson’s and Elon’s) to really flower.
So, it still seems– to me– that Elon’s improper and ultimately maybe even self-defeating action was not based on logic, or business, or being pro-space development. It appears to have been based on emotion.
“Dave, as you say, I think you are overly harsh,…”
Yeah, that’s what my wife says. But let’s get back to the space stuff…….
“That said, I have rooted for SpaceX’s vehicles from day one and will continue to do so.”
Me, too: AND Kistler, AND Pioneer, AND SpaceDev, AND Bigelow, AND SPAB…hell, even whatever the hell Bezos thinks he’s doing; I’m for whatever that is, too!!
I must say, though, that in the Ratio of Lawsuit Energy/ Engineering and Business Energy, I would prefer it if Elon would start following the others in their ratio numbers. Just an opinion.
“In this respect, SpaceX is following in the footsteps of the Wright Brothers. They spent more time filing lawsuits against their competitors than making truly useful airplanes themselves. They lost sight of the truth that the airplane was an evolved invention, and that they provided only a few links in the chain.”
Excellent historical point, Greg; thanks for reminding us. I wish that all ‘visionary entrepreneurs’ would read some of the historical lessons learned that the Wrights, and Curtiss, and Alexander Graham Bells gave the world. All too soon forgotten; or, if remembered at all, the current crop sometimes seems to have the ‘but with me it’s different’ atttitude.
Not a problem, in my own case; “Visionary Entrepreneur” is not exactly something that someone will later insist should go on my Tombstone. Double cheese, maybe; but ‘visionary entrepreneur’, never.
dave
: own some SPAB, SPDV.OB
Dave,
I agree there may have been some emotion in his decision.
I agree that it is good for the industry as a whole if we have success stories. One of the primary benefits to everybody else in the industry is (as a general rule) that there will be much more investment capital available in the industry if there are some successes.
That being said, let’s not kid ourselves. Our collective interests are not Elon’s interests. From a “BUSINESS point of view”, Elon’s interests are clear — and there is a LOGICAL case to be made for him to stop the Kistler sole source contract.
Let me be specific on the logic from a business view.
1) Kistler is a DIRECT competitor to SpaceX in low-cost launch. As one obvious example, if Kistler succeeded, Kistler would be sucking up some or all of the launch contracts that Elon now (seemingly) has for himself. As Elon just admitted that he is “cash flow” positive because of advance payments on these contracts, the lack of those payments would be harmful.
2) There probably would not be a COTS program now if the Kistler contract had not been cancelled. Remember, NASA justified the Kistler sole source contract based on a requirement for ISS resupply. As Elon now appears to be in the lead for acquiring 1 of 2 expected COTS contracts, the evidence is (again) on his side that he made a good business decision to protest the Kistler decision.
3) Elon gets little or no benefit from the increased availability of capital in this industry that would arrive with a Kistler’s success.
A) “Lack of capital” is not an Elon problem, as he is self-funded. This benefit is much greater for everybody else.
B) Even if Elon wanted some outside investment, a better investment environment from a Kistler success precludes or reduces the benefit to Elon. As standard issue for alll business plans and high-risk serious investors is “Who is your competition?” They always look to who the competition is, and if Kistler had succeeded, the investors would appropriately want to avoid going “head to head” against Kistler. The investment community might put a lot more money into this industry, but that does not mean that Elon would get more investment for SpaceX.
– Al