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June 2, 2016


Changes in the U.S. Commercial Space Industry


Rockets, satellites, and the services they provide, once the
domain of governments, are increasingly launched and
managed by privately owned companies as well.
Commercial activities accounted for 76% of the $330
billion spent on global space activities in 2014, according to
the Space Foundation. Governments and companies in more
than two dozen countries have built and launched an orbital
payload, but the Federal Aviation Administration (FAA)
estimates that the United States was responsible for about
38% of total global space spending in 2014.

The space economy is made up of both commercial and
government components. Commercial products and
services are generated by companies providing launch
services, manufacturing satellites and ground equipment,
and operating satellites; government investments in space
make up the rest of space economy spending. Typically,
commercial launch providers are also manufacturers,
designing and assembling the rockets they use. Service
providers (such as television broadcasters) may design and
build their own satellites, or may purchase them from third-
party manufacturers.

The U.S. space industry supply chain has changed in recent
years as new forms of competition have arisen. Launch
vehicle manufacturers produced vehicles only under
contract to the National Aeronautics and Space
Administration (NASA) or the Department of Defense
(DOD) until 1982. Until then, the U.S. government
launched all civil and commercial payloads into orbit. Now
commercial payloads are increasingly launched by private
providers, including long-standing aerospace contractors
such as Boeing and Lockheed Martin, and new entrants
such as Space Exploration Technologies (SpaceX), Blue
Origin, and Virgin Galactic. Commercial space technology
services include

* communications systems utilizing satellites to transmit
   television signals (satellite television alone accounts for
   almost a third of all space-related commercial activity),
   in-flight calls from airplane passengers, and some
   smartphone data;

* environmental monitoring of oceans, forests, deserts,
   wildlife habitats, and natural disasters;

* weather applications monitoring hurricanes and El
   Nino on a global scale, as well as measuring soil water
   content to assist in prediction of droughts and floods;

* transportation uses providing geolocation services to
   delivery trucks and ride-sharing services and their
   passengers; and


* enhancements of safety by providing data to first
   responders at oil spills and forest fires and preventing
   train collisions with geolocation services.

Satellites are placed into different types of Earth orbits
depending on their planned use: low Earth orbit (LEO),
medium Earth orbit (MEO), geosynchronous Earth orbit
(GEO), and high Earth orbit (HEO) (Figure 1). The altitude
of the orbit determines the spacecraft's speed around Earth,
with those closer moving more quickly. Some types of
space activities require closer proximity to Earth for supply
and maintenance and to provide higher-resolution images of
Earth. Others operate further in space to more effectively
deploy their services. The International Space Station (ISS),
in LEO, for example, takes just 90 minutes for a full orbit,
while a television or weather satellite in GEO will take a
full day. A satellite in geosynchronous orbit matches
Earth's rotational speed, so unlike other types of satellites,
it will remain in the same place above Earth. GEO enables a
satellite to monitor the same locations for changes in
weather or to facilitate telecommunications.


Figure I. Types of Earth Orbits


Source: CRS.


Three developments are changing the shape of the
commercial space industry: a shift in government space
activities toward the use of commercial services, new
entrants with new launch products, and an increase in the
launch of small satellites.

During the final years of the space shuttle program, NASA
encouraged and funded commercial providers to develop
systems that could transport crew and cargo to the ISS. The
first of these were the SpaceX Dragon capsule and Falcon 9
rocket, which have ferried supplies to the ISS since 2012.
Last year, four ISS cargo launches were conducted by


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