Congress, Other

Commercial space industry celebrates launch indemnification extension in omnibus spending bill

While most of the space-related discussion about the omnibus spending bill for fiscal year 2014 passed by Congress this week focused on the relatively favorable spending levels for NASA in the bill, the legislation also included another benefit for the commercial launch industry. The legislative vehicle used for the omnibus spending package was HR 3547, a bill originally introduced in the House in November to extend the third-party liability indemnification regime for commercial launches by one year. The Senate amended that bill last month to instead provide a three-year extension, which was left in the final bill (with the appropriations package added) passed by both houses this week.

During the House debate on the omnibus bill earlier this week, Rep. Lamar Smith (R-TX), chairman of the House Science Committee and sponsor of the original version of HR 3547, mentioned that provision of the bill rather than its appropriations sections. “The three-year extension of the risk-sharing system in the bill today will help the commercial space industry and our economy,” he said. “For the next three years, space launch providers will have the stability and assurance they need to compete in the international market.” While his original bill only provided a one-year extension, he had made clear in earlier debate about the bill that he preferred a longer extension, accepting a one-year version to win support of House Democrats who wanted a short-term extension to more broadly study issues associated with indemnification.

Industry organizations embraced the three-year extension in the bill. The Commercial Spaceflight Federation, in a statement about the overall bill, praised the extension as a measure that helps the US commercial launch industry remain competitive against foreign providers. CSF chairman Stu Witt noted the commercial launch earlier this month of a communication satellite for a Thai company, Thaicom, by SpaceX. “The foreign satellite launch was won in a competitive market that includes overseas launch companies, many of which enjoy more robust third-party liability.”

“A consistent and effective third-party launch indemnification regime allows U.S. commercial satellite launch service providers to compete more effectively in the international marketplace,” said Patricia Cooper, president of the Satellite Industry Association (SIA), in a separate statement about the indemnification extension. “It is an important step in maintaining U.S. innovation and leadership in satellite launch and aids overall access to space.”

It’s unclear if the three-year extension will take pressure off Congress to perform a more detailed review of commercial launch regulations, including a reauthorization and update of the Commercial Space Launch Act, that had been proposed by some in Congress to take up in 2014. The industry, though is spared having to once again scramble for an extension at the end of 2014, as it had to in 2012 and 2013. In a presentation about issues associated with commercial spaceflight liability at the International Academy of Astronautics Space Exploration Conference in Washington on January 9, Matt Schaefer, director of the University of Nebraska’s Space, Cyber and Telecommunications Law Program, said the industry needed some near-term stability. “Having this indemnification regime expire every 12 months is just a really silly way for the US, which is the single largest user of space, to act.”

1 comment to Commercial space industry celebrates launch indemnification extension in omnibus spending bill

  • Neil Shipley

    Good to see although still really a short term measure. I fail to understand why Congress has not extended this indemnification for a significant period of say 10 years given that the industry is pretty well defined as are the risks? Perhaps someone can enlighten me?

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