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Washington, DC.

The subcommittee met, pursuant to call, at 1:30 p.m., in Room 2318, Rayburn House Office Building, Hon. Bill Nelson (chairman of the subcommittee), presiding.

Mr. NELSON. The meeting will come to order.

I want to extend a warm welcome to our witnesses as we open this second session of the Congress, at this subcommittee's hearing on a new legislative initiative, H.R. 3765, the Commercial Space Launch Act Amendments.

Five months ago we had a hearing, two days of hearings, and the purpose of those hearings was to gain insight into the progress made toward developing a truly commercial launch industry. We found that over the course of one year after the determination of the Space Shuttle that it would no longer be available to commercial users that there were a number of interesting findings. And so let me relate to you and refresh your memory from what we learned on September the 15th and September the 17th.

We learned that America's launch providers had made significant investments in order to enter the world launch competition. We learned also that several companies had succeeded in signing up satellite customers for launches beginning in 1989, but that none of those were American companies. We learned that satellite customers could obtain neither cost quotes nor launch quotes from American launch providers. Why? Because the Government had not made a clear commitment to recognize commercial providers as a partner and a user of the national ranges.

We also learned that despite the passage of the Commercial Space Launch Act of '84, which consolidated authority over commercial space transportation into a single department, the Department of Transportation, a multi-agency space policy decisionmaking quagmire persisted, with each agency protecting its own turf.

We further learned that the Government's pronouncements of fostering this new industry were not being translated into workable, commercially reasonable agreements. Across-the-board, the Government's Model Range Use Agreement, which was the principal agreement setting forth the terms and conditions, that agree


ment was denounced as unconscionable, by requiring the industry to assume all of the risk and potential liability of launch activities, even that resulting from the Government's own negligence.

And finally, we learned of a lack of confidence so great among those in our American satellite industry that some urged-get this. Some urged that they be granted access to the Soviet Proton for launch.

So, in essence, the Government was doing an abysmal job implementing space transportation policies despite their major consequences for the United States launch and satellite industries. The only detectable policy we have seen is a policy of neglect; that is, kick commercial users off the Shuttle and let everyone fend for themselves is the policy. These matters are, in my view, far too important to leave to chance. And although we have seen some encouraging signs of life in the ELV industry, there are also some very troubling signs that are just not being addressed.

This faulty implementation could threaten the very survival of this new launch industry and drive offshore the one pride and joy this Nation has in commercial space, the American satellite industry. And so clearly there is a need for legislation. A policy of neglect is a bad policy. And that is why I and 21 Members of Congress decided to introduce H.R. 3765 last December the 15th, to confront head on the persistent problems associated with the startup of this new industry.

Now we are not going to dwell on the specific provisions in my opening statement, but let me say that the themes are not new. The bill follows the policy precedents established in public law for commercial use of the Space Shuttle. The result is a risk-sharing relationship between the Government and industry which is consistent with governmental responsibilities under law and international treaty. And the bill also recognizes for the first time the damaging impact of administration policy flip-flops which finally ended commercial access to the Space Shuttle.

The bill contains special incentives for those companies that had planned to launch on the Space Shuttle so long as they choose to launch American. Other provisions address the long-term competitiveness of an American launch industry in an increasingly competitive world marketplace. And, although this legislation provides the most reasonable solution into the problems as we currently see them, nothing-let me tell you, we filed this, we scrubbed it, we circulated it, we filed it December the 15th after we had circulated it, but nothing is set in concrete; this is a starting point.

And so the purpose of these hearings is to discuss these provisions in a fair and open manner, and I hope that our witnesses can take off our respective organizational hats, forget about turf for a moment, and reach some solutions that we can all live with. And so it's-I want everybody to know it's my intention that we're going to proceed with subcommittee mark-up on this legislation in the near future, and I urge all interested parties to submit comment to the subcommittee during the next month.

So we welcome our Administration witnesses today: Jack O'Brien, General Counsel to NASA; Courtney Stadd, the Director of Office of Commercial Space Transportation in DOT; and Charles Cook, Assistant Secretary of the Air Force for Space Programs.





February 16, 1988

Good afternoon, Mr. Chairman.

Today we start the first

of two important hearings to help set the course for our

infant commercial space launch industry.

These hearings will help us establish exactly what modifications are needed to the Commercial Space Launch Act to ensure that we get this important national initiative of the ground.

Let me make the point that a commercially viable U. s. space launch industry is the critical corner-stone of a viable and competitive U. S. space industry.

We in the Congress have come to the conclusion that one of the major impediments to our evolving domestic space launch industry is the difficulty in getting sufficient insurance to cover the risks involved at a reasonable price. Space transportation is an inherently risky business. Much of that risk can be minimized through range safety procedures, but there will always remain some element of risk. If a catastrophic accident should occur there is the clear potential for damage awards far in excess of available


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