That would finally seem to be the case, 17 months and one day after the joint venture was first announced. The FTC announced today that it would “intervene” in the formation of the ULA, meaning it has created a consent decree that will allow the ULA to come into being under some conditions. Those requirements include:
- The ULA must cooperate “on equivalent terms” with all government satellite manufacturers (so that Boeing- and Lockeed-built satellites don’t get an unfair advantage);
- Boeing and Lockheed must “provide equal consideration and support to all launch services providers” seeking government “delivery-in-orbit” contracts; and
- The ULA must safeguard all “competitively sensitive information” provided by other satellite and launch vehicle manufacturers.
The second condition is interesting: it’s not clear to me what sort of “equal consideration and support” Boeing and Lockheed could give to other launch providers. Can anyone better explain that one?
Although the FTC did draft and approve unanimously the consent order, it’s clear from the press release that regulators aren’t too fond of the ULA. “The consolidation of the nation’s only two suppliers of government MTH [medium-to-heavy] launch services is likely to cause significant anticompetitive harm,” the FTC notes in its press release. However, the FTC was won over by Defense Department arguments that the national security benefits outweigh the anticompetitive issues. Therefore, the FTS notes, “the order is designed to address the ancillary competitive harms that DoD has identified without interfering with the national security benefits of ULA.”
Both Lockheed Martin and Boeing issues press releases congratulating the decision, which removes the last legal roadblock to the ULA’s formation. Neither company, though, set a date for when the ULA would actually come into being.
“The consolidation of the nation’s only two suppliers of government MTH [medium-to-heavy] launch services is likely to cause significant anticompetitive harm,” the FTC notes . . . , [however] the FTC was won over by Defense Department arguments that the national security benefits outweigh the anticompetitive issues.
In other words it’s supposedly a net gain for defense and a net loss for commercial space transportation. Which, in the long term, is more important to the ultimate expansion of humanity into the Solar System?
An ancillary question is, is the gain to defense really significant enough to outweigh the cost to commercial space transportation?
I doubt it, but I would be interested in the thoughts of others.
— Donald
“The second condition is interesting: it’s not clear to me what sort of “equal consideration and support” Boeing and Lockheed could give to other launch providers. Can anyone better explain that one?”
Jeff–The second condition comes into effect when Boeing or Lockheed respond to a government satellite procurement in which the government asks Boeing or Lockheed as the prime contractor to manage the launch and deliver the satellite to the government after the launch(also know as “delivery on orbit”). In this case, the condition states that Boeing or Lockheed give “equal consideration and support” to other providers along with ULA.
While DOD uses EELV, NASA for instance may buy both satellite and launch from Boeing or Lockheed as a prime contractor. NASA would have to decide whether they direct Boeing or Lockheed to purchase through ULA or whether their prime contractor would consider other providers.
“In other words it’s supposedly a net gain for defense and a net loss for commercial space transportation.”
This statement makes absolutely no sense. How is this a loss for commercial space transportation? There is still Ariane, Soyuz, Proton, ILS and Falcon in the wings (at least according to all the alt.space folks). Any commercial entity can approach these companies for launch services. Further, if memory serves, Boeing announced quite some time ago (July 2003) that they would no longer pursue commercial launch services so there has only effectively been a single US commercial launch provider for the past three years. Only US Govt. satellites are precluded from launching on non-US launch vehicles. It is clear that the Govt. is taking a potential risk of higher launch costs by approving the merger. But sole-source providers of critical US Govt. required services/hardware is not new. It requires greater insight and oversight by the Govt. arm that needs that service (in this case, primarily DoD) so it puts additional burden on that agency but it also gives it greater control as there are only limited sources of alternative revenue (if the current launch rates persist) available to ULA. If you only have one customer, you can’t afford to anger them.
Okay, I misspoke. It’s a net loss for the United States’ commercial space transportation industry.
— Donald