Blast from the past: “comm space,” again



As part of my ongoing effort to explain why I’m skeptical of recent grandiose claims of riches to be made in so-called “commercial” space development, I offer here some highlights of stories I reported in the August 15, 1983, issue of Space Business News.*

On August 3, 1983, President Reagan had lunch with a group of NASA, Commerce Department, and industry officials convened at the White House to discuss what was then called “space commercialization.” Attendees included the President’s science adviser, the Secretary of Commerce, the President’s assistant for Cabinet Affairs (who later would lose power struggle with a National Security Council official to head Reagan’s Senior Interagency Group on Space), the NASA administrator, the President’s chief counsel, White House Chief of Staff and Deputy Chief of staff, the chairmen of Fedex and Grumman Aerospace, and the presidents of Deere and Co., Rockwell Space Operations, and Orbital Sciences.

On the agenda for this meeting: the need for stable space policy (surprise!), the need for “appropriate economic incentives” for commercial space businesses (you know: subsidies, tax breaks, bond financing…), the need to eliminate “institutional barriers to space commercialization” (those pesky laws, regulations, and taxes) the need for help in dealing with international competition (protection?), and the need for NASA and other federal agencies to play a role in “fostering commercialization.”

Just in case you’re wondering, “the White House declined to comment on the meeting.”

Around the same time, then-congressman George Brown Jr. (D-CA) told a meeting of the American Bar Association that private space launch services would become “a space business worth $10 billion or more by the end of the 1980s.”

Pacific American Launch Systems president Gary Hudson reported that his company was eight months behind schedule in developing its Phoenix reusable space launch vehicle. Hudson also said human-rated Phoenix vehicles would be a cheaper alternative to NASA’s proposed space station project (approved by President Reagan in 1984).

The Commerce Department announced it would issue a second request for expressions of interest in commercializing its Landsat and metsat systems.

The Heritage Foundation said it would be studying prospects for space commercialization as part of “a comprehensive study of possible privatization/commercialization initiatives the government could take on (as I recall, the right-leaning Heritage served as an on-tap think tank for the Reagan White House).

And a study conducted by Boeing for NASA concluded that the market for gallium arsenide semiconductor crystals manufactured in space “could be worth $624 million by 1995, $3.1 billion by 2000 and almost $5 billion by 2005.” (I assume that these projections assumed the availability and affordability of commercial space platforms and an operating U.S. space station….)

In the August 29, 1983, issue of SBN, I reported that the White House hosted another meeting with NASA and industry officials on space commercialization, on August 19.  Alcoa and Grumman officials reported that they were working on a multi-year “exploratory” materials-processing-in-space program. NASA and the American Institute of Aeronautics and Astronautics announced that they had invited 130 top officers of investment banks, commercial banks, venture capital firms, insurance companies and aerospace corporations to an October meeting at NASA Kennedy Space Center on space commercialization.

In the September 12, 1983, issue of SBN, I reported that NASA Administrator James Beggs had told me in an interview that he would like to find a commercial operator for the space-shuttle system as soon as it starts to break even. He also told me that the best thing NASA could do to support space commercialization would be to make venture capitalists aware of opportunities in the space business.

I can still recall that interview: postponed multiple times, and then like pulling teeth when it finally took place. I can also recall who some of my most reliable sources were during my time at SBN: investment bankers, who knew how to tell a good business plan from – dare I say it? – a flighty one.

That’s all for today, dear readers.


* I offered a similar trip in The Wayback Machine in a blog post last July.



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