The Legal Realm of Commercialising Outer Space

By Ulrike Nostitz

1. Ongoing Commercialisation


Outer space is a remarkable place accommodating features that could not be found or reassembled on our home Planet Earth. For instance, the state of zero-gravity in outer space constitutes a great possibility to conduct scientific experiments for commercialisation purposes[1].

There is also massive potential for financial profit when considering the rich mineral resources that are available in outer space, which will ultimately drive scores of entrepreneurs to seek their fortunes in the vastness of space.[2] Other increasingly commercial space activities include space launching, satellite broadcasting, remote sensing, telecommunications, space tourism, space mining,[3] small satellites and space digitisation.[4]


A notable development in space commercialisation and privatisation is the increasing use of satellites. While their original purpose was to serve the general public as well as the military, they now assist in telecommunication, remote sensing and navigation.[5]

The first commercial global satellite system was launched as early as 1965 by the International Telecommunication Satellite Organisation (‘INTELSAT’).[6] Skipping forward in time, in 2001 INTELSAT was privatized, being one of many other telecommunication enterprises which underwent such a process. Privatization in a likewise manner occurred with respect to the European Telecommunications Satellite Organisation (‘EUTELSAT’) and the International Maritime Satellite Organisation (‘INMARSAT’).[7]


In similar fashion, there are commercial providers around the world, such as Rapid Eye and Quick Bird, that offer products and services in the remote sensing markets to both private and public parties, who are otherwise incapable of accessing said markets themselves.[8]


This commercialisation extends to anything remotely connected to outer space. As far as the navigation market is concerned, newer systems such as GALILEO and BeiDou seek to break the monopoly of GPS and GLONASS. The added value data from navigation satellites can be accessed and has already seen commercial use.[9]


In the field of satellite development, the launch market notably reduced associated costs and risks through the use of small satellites that can be dedicated to one sole task and be connected to a larger network.[10] They are commercially used in areas such as communications, earth observation, remote sensing, meteorological observation, marine exploration, and scientific research.[11]


2. Game of Catch Up


As a consequence of the pace of which commercialisation in outer space is occurring, legal issues have surfaced that have not yet been dealt with properly. Notable issues include, the licensing of small satellites owned by private entities, the regulation of radio frequencies and orbits, international and national registration of satellites, and responsibility- and liability- allocating issues between State and private bodies.[12]


Increasing commercial space activities calls into question space related environmental issues caused by the space debris that is also yet to be dealt with in law.[13] These issues must be addressed on an international level to encourage States and private entities to participate in sustainable commercial outer space development.[14]

3. Decentralisation of Space Law


Whereas the five big United Nations (‘UN’) Space Treaties (namely: the Outer Space Treaty 1967,[15] the Rescue Agreement 1968,[16] the Liability Convention 1972,[17] the Registration Convention 1975,[18] and the Moon Agreement 1979)[19] are mainly concerned with public aspects of space law, there is a striking absence of a a set of rules regulating the private and commercial space activities. This omission could sustain itself because the UN is an international entity, not suited to establishing principles to such ends.[20]


Another area of commercialisation is the telecommunications sector using space technologies to make human life on Earth more comfortable. The UN International Telecommunication Union (‘ITU’), tasked with coordinating the use of radio frequency spectrums and space orbits, deemed it financially favourable to increase the accessibility of the telecommunication market and its different services.[21]


In similar vein, the World Trade Organisation (‘WTO’) attempted to tackle the liberalisation of telecommunications services in their negotiations, however, the sensitivity of some of those services made the process very slow and difficult. Nevertheless, an agreement was eventually concluded in 1997.[22] Said agreement saw the WTO adopting the General Agreement on Trade in Services as well as a Reference Paper relating to national regulatory authorities in mediating basic telecommunications.[23]


By doing so the WTO ensured competitive safeguards, interconnection, universal service, public availability of licensing criteria, independent regulators, and the allocation and use of scarce resources stressing the need for national regulatory regimes creating a fair ground for the competition of satellite services.[24] This was of significance as established guidance for national authorities in the creation of such regimes, usually a power exercised through national sovereignty.[25]


4. Making it fit

Concerning appropriate dispute resolution mechanism, the Permanent Court of Arbitration decided to alter the UN Commission on International Trade Law Arbitration Rules [26] by adopting the Optional Rules for Arbitration of Disputes Relating to Outer Space Activities. [27] These rules aimed to “reflect the particular characteristics of disputes having an outer space component involving the use of outer space by States, international organisations and private entities”.[28]


As of now, the financing process for space projects is supported by the International Institute for the Unification of Private Law (‘UNIDROIT’), which aims to modernise and effectively synchronize and harmonise private and commercial law.[29] UNIDROIT went on to enact the Convention on International Interests in Mobile Equipment (Cape Town Convention) in 2001, which is conjunctively used with protocols for technologically specific equipment.[30] The Convention is concerned with mostly high-value items such as aircraft equipment, railway rolling stock, and space assets.[31] The Protocol on Matters Specific to Space Assets is specifically centred around the possibility of space financing itself.[32]


It becomes clear that there is a movement outside the UN most adamant to enact international space laws to other international bodies regulating the commercialisation and privatisation of different space activities. This amounts to a decentralisation process of space legislation which is beneficial for future developments in the commercial aspect of space.[33]


5. Soft Law-Making Process

As a number of States are working towards becoming involved in commercial space activities, the vast amount of interest groups that need be taken into consideration is ever-increasing. Accordingly, space legislation has seen significantly growing numbers of soft-laws being enacted after 1979.[34]


The UN General Assembly met this development through a proactive and pragmatic approach towards soft-law making by enacted several Resolutions maintaining the lawfulness of space activities by establishing certain guidelines. Those would include: the Principles Governing the Use by States of Artificial Earth Satellites for International Direct Television Broadcasting (1982);[35]Principles Relating to Remote Sensing of the Earth from Outer Space (1986);[36]Principles Relevant to the Use of Nuclear Power Sources in Outer Space (1992);[37]Declaration on International Cooperation in the Exploration and Use of Outer Space for the Benefit and in the Interest of All States, Taking into Particular Account the Needs of Developing Countries (1996);[38]Application of the Concept of the ‘Launching State’ (2004);[39] and Recommendations on Enhancing the Practice of States and International Intergovernmental Organisations in Registering Space Objects (2007).[40]


This favouring of soft-law-making over legally binding treaties was driven by the rather difficult task of arriving international agreements on important matters, for which newly emerging inter-governmental entities alongside the UNCOPUOS started to get involved. For instance, the Inter-Agency Space Debris Coordination Committee (‘IADC’), tasked with coordinating activities concerning space debris research, established the Space Debris Mitigation Guidelines (2007),[41] in turn inspiring the foundation for the UNCOPUOS Space Debris Mitigation Guidelines (2010).[42] Moreover, the European Union (‘EU’) also issued guidelines for the international community to consider, namely the Code of Conduct for Outer Space Activities.[43]


While soft laws are far from ideal, due to their non-binding legal nature, it remains difficult to reach consensus on international treaties within the limited time frame that is restricted by the fast pace of space commercialisation processes. An alternative approach might aim at offering guidance to the international community while simultaneously presenting a starting point for future international legislations.[44]


6. National Space Legislation

Another means of regulating space activities lies in national space legislations. It is one of the UN’s objective to have international space treaties be acceded to and implemented on a national level.[45] However, at the same time, this incentivises States to draft their own national space laws, for which the International Law Association (‘ILA’) adopted a Model Law on National Space Law (2012)[46] just as the General Assembly adopted the resolution on Recommendations on National Legislation relevant to the Peaceful Exploration and Use of Outer Space (2013).[47] In the course of national space legislation, the issues of liability, responsibility, registration of space objects, insurance, environmental protection, and peaceful uses of outer space are to be granted a legal footing.[48]


When considering matters of space commercialisation on national level, the US allows for an intriguing example through the enactment of their US Commercial Space Launch Competitiveness Act (2015), which deals with issues of space resource exploitation, though not explicitly with an exploitation of a commercial kind.[49] The Outer Space Treaty failed to clearly formulate rules pertaining to the non-appropriation of outer space and is rather ambivalent on the question of whether the removal of natural resources from outer space should be considered an appropriation. There, the US filled in the legal gap by means of their own national space legislation and allowed citizen to make profitable commercial exploitation.[50]


Governing space activities from nationals will merely mark the beginning of an ongoing process of creating a comprehensive legal framework relating to space faring.


7. Conclusion

The ongoing commercialisation of Outer Space remains a matter most challenging to international and national legal regimes. With the gradually growing number of States evolving into space-faring nations and negotiation processes simultaneously becoming increasingly difficult, an international consensus will not be easy to achieve. While existing international conventions provide for a basic legal understanding of activities conducted in outer space, newly emerging and more complex issues relating to the wider access of private actors to space markets still lack sufficient legal footings.


Laws concerning space activities prove to be in need for further developments on an international, as well as domestic level. It appears more likely for soft-law making to become a frequently used practice, leaving space law to become decentralised as it needs to be flexible enough to react to the rapid changes and developments in space technology which, in turn, grant feasibility to even more commercial activities outside and within the Earth’s orbit.

[1] Kristine Rainey, ‘15 Ways the International Space Station is Benefiting Earth’ (NASA, 30 October 2015) <https://www.nasa.gov/mission_pages/station/research/news/15_ways_iss_benefits_earth> accessed 12 July 2020. [2] Yu Hui, ‘Joint development of mineral resources: An Asian solution’ (1992) 2 Asian Yearbook of International Law, 92ff. [3] Steven Freeland, ‘Impact of space tourism on the International Law of Outer Space’ (2005) 48 Proceedings of the 48th Colloquium on the Law of Outer Space, 178ff. [4] Tom Brant, ‘Amazon, NASA to Host First 4K Live Stream From Space’ (PCMag, Science & Space News, 12 April 2017)<https://au.pcmag.com/science-space/47430/amazon-nasa-to-host-first-4k-live-stream-from-space> accessed 15 July 2020. [5] Stephan Hobe, ‘The Impact of New Developments on International Space Law (new actors, commercialization, privatisation, increase in number of “space-faring nations”, etc.)’ (2010) <https://www.unoosa.org/pdf/pres/2010/SLW2010/02-12.pdf>, 2. [6] DD Smith, ‘The legal ordering of satellite telecommunication: Problems and alternatives’ (1969) 44 India Law Journal, 338ff. [7] BM Frischmann, ‘Privatisation and commercialisation of the Internet infrastructure: Rethinking market intervention into government and government intervention into the market’ (2001) 2 Columbia Science and Technology Law Review, 25-26. [8] Steven Livingston, ‘Commercial Remote Sensing Satellites and the Regulation of Violence in Areas of Limited Statehood’ (2015) ICTs, Statebuilding, and peacebuilding in Africa, 14ff. [9] Paul B Larsen, ‘International regulation of global navigation satellite systems’ (2015) 80 Journal of Air Law and Commerce, 365-422. [10] Bhavya Lal, Elena de la Rosa Blanco, Jonathan R Behrens, Benjamin A Corbin, EK Green, Alyssa J Picard, Asha Balakrishnan, ‘Global Trends on Small Satellites’ (2007) IDA Science & Technology Policy Institute, 5. [11] Ram S Jakhu, Joseph Pelton, Small satellites and their regulation (1st edn, Springer 2014) 13ff. [12] Paul Stephen Dempsey, ‘National laws governing commercial space activities: Legislation, regulation, and enforcement’ (2016) 36 Northwestern Journal of International Law & Business, 31ff. [13] Stephan Hobe, ‘The Impact of New Developments on International Space Law (new actors, commercialization, privatisation, increase in number of “space-faring nations”, etc.)’ (2010) <https://www.unoosa.org/pdf/pres/2010/SLW2010/02-12.pdf>, 5. [14] Juan Davalos, ‘International standards in regulating space travel: Clarifying ambiguities in the commercial era of outer space’ (2016) 30 Emory International Law Review, 615-616. [15] UNGA Res 2222 (XXI), ‘Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, including the Moon and Other Celestial Bodies’ (19 December 1966). [16] UNGA Res 2345 (XXII), ‘Agreement on the Rescue of Astronauts, the Return of Astronauts and the Return of Objects Launched into Outer Space’ (19 December 1967). [17] UNGA Res 2777 (XXVI), ‘Convention on International Liability for Damage Caused by Space Objects’ (29 November 1971). [18] UNGA Res 3235 (XXIX), ‘Convention on Registration of Objects Launched into Outer Space’ (12 November 1974). [19] UNGA Res 34/68, ‘Agreement Governing the Activities of States on the Moon and Other Celestial Bodies’ (5 December 1979). [20] PJ Blount, ‘Renovating space: The future of international space law’ (2011) 40 Denver Journal of International Law and Policy, 515. [21] Patrick S Ryan, ‘The ITU and the Internet’s Titanic moment’ (2012) 8 Stanford Technology Law Review, 23-24. [22] Mina Mashayekhi, Munay Gibbs, ‘Lessons from the Uruguay Round negotiations on investment’ (1999) 33(6) Journal of World Trade, 11ff. [23] WTO ‘General Agreement on Trade in Services’ (15 April 1994) 1869 UNTS 183; WTO ‘Negotiating group on basic telecommunications’ (24 April 1996) reference paper. [24] Lee Tuthill, ‘The GATS and new rules for regulators’ (1997) Telecommunications Policy Vol 21 No 9/10, 783. [25] Jennifer A Manner, Alejandro Hernandez, ‘An overlooked basis of jurisdiction for Net Neutrality: The World Trade Organisation Agreement on Basic Telecommunications Services’ (2013) 22 Journal of Communications Law and Policy, 68ff. [26] UNGA Res 31/98, ‘Arbitration Rules of the United Nations Commission on International Trade Law’ (15 December 1976). [27] Permanent Court of Arbitration, ‘Optional Rules for Arbitration of Disputes Relating to Outer Space Activities’ (6 December 2011) <https://docs.pca-cpa.org/2016/01/Permanent-Court-of-Arbitration-Optional-Rules-for-Arbitration-of-Disputes-Relating-to-Outer-Space-Activities.pdf> (accessed 18 August 2020) [28] Judge Fausto Pocar, ‘An Introduction to the PCA’s optional rules for arbitration of disputes relating to outer space activities’ (2012) 38 Journal of Space Law, 177. [29] Roy Goode, ‘Security interests in mobile equipment: Law-making lessons from the Cape Town Convention’ 35 Adelaide Law Review, 60-61. [30] Convention on International Interests in Mobile Equipment [2009] OJ L121/25. [31] ‘Convention on International Interests in Mobile Equipment’ (UNIDROIT, 9 June 2017)<https://www.unidroit.org/instruments/security-interests/cape-town-convention> accessed 29 July 2020. [32] ‘Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Space Assets’ (UNIDROIT, 9 March 2012) <https://www.unidroit.org/instruments/security-interests/space-protocol> accessed 29 July 2020. [33] Zhao Yun, ‘Space Commercialisation and the Development of Space Law’ (2018) Oxford Research Encyclopedia of Planetary Science, Planetary Science Policy and Planning, Space Law, 8. [34] Setsuko Aoki, ‘The function of ‘soft law’ in the development of international space law’ in Irmgard Marboe, Soft law in outer space: The function of non-binding norms in international space law (1st edn, Bohlau 2012). [35] UNGA Res 37/92, ‘Principles Governing the Use by States of Artificial Earth Satellites for International Direct Television Broadcasting’ (10 December 1982). [36] UNGA Res 41/65, ‘Principles Relating to Remote Sensing of the Earth from Outer Space’ (3 December 1986). [37] UNGA Res 47/68, ‘Principles Relevant to the Use of Nuclear Power Sources in Outer Space’ (14 December 1992). [38] UNGA Res 51/122, ‘Declaration on International Cooperation in the Exploration and Use of Outer Space for the Benefit and in the Interest of All States, Taking into Particular account the Needs of Developing Countries‘ (13 December 1996). [39] UNGA Res 59/115, ‘Application of the Concept of the “Launching State”’ (10 December 2004). [40] Jose Monserrat-Filho, Alvaro Fabricio dos Santos, ‘Is there a future for space law beyond soft law?’ (2010) 53 Colloquium on the Law of Outer Space, 234-244. [41] UNGA Res 62/101, ‘Recommendations on Enhancing the Practice of States and International Intergovernmental Organisations in Registering Space Objects’ (17 December 2007). [42] MR Plantz, ‘Orbital debris: Out of space’ (2012) 40 Georgia Journal of International and Comparative Law, 586ff. [43] Jameson Rohrer, ‘Deciphering and defending the European Union’s no-binding code of conduct for outer space activities’ (2012) 23(1) Duke Journal of Comparative and International Law, 192. [44] Jennifer Ann Urban, ‘Soft law: The key to security in a globalized outer space’ (2016) 43(1) Transportation Law Journal, 42-43. [45] UNGA, COPUOS, A/AC.105/C.2/2017/CRP.12, ‘Capacity Building in Space Law’ (24 March 2017). [46] Stephan Hobe, ‘ILA model law for national space legislation’ (2013) 62 Journal of Air and Space Law, 82ff. [47] UNGA Res 68/74, ‘Recommendations on national legislation relevant to the peaceful exploration and use of outer space’ (11 December 2013). [48] Paul Stephen Dempsey, ‘National laws governing commercial space activities: Legislation, regulation, and enforcement’ (2016) 36 Northwestern Journal of International Law & Business, 31ff. [49] PJ Blount, Christian J Robinson, ‘One small step: The impact of the US Commercial Space Launch Competitiveness Act of 2015 on the exploitation of resources in outer space’ (2016) 18 North Carolina Journal of Law & Technology, 161-186; US Commercial Space Launch Competitiveness Act (2015), HR 2262 (114th Congress). [50] Craig Foster, ‘Excuse me, you’re mining my asteroid: Space property rights and the US Space Resource Exploitation and Utilisation Act of 2015’ (2016) University of Illinois Journal of Law, Technology & Policy, 420ff.

22 views0 comments