APPENDIX C: SPACE INDUSTRIALIZATION CONCEPT AND IMPLICATIONS

FOR TELECOMMUNICATIONS

by

Copper Wilson
Roland Weiss

SPACE INDUSTRIALIZATION

I. THE CONCEPT AND THE LINK

One example of a formal technology transfer program is the Space Industrialization program conducted by NASA. The concept of Space Industrialization was defined by a director of NASA's Advanced Programs Office as follows:

Space Industrialization is the use of space flight for commercial
or utilitarian purposes; that is, the use of space to produce a
salable/profitable product or a service which companies as a business
expense or citizens through their taxes are willing to pay for.
Other basic uses of space, of course, include Scientific Research
and Exploration, typified by the Voyager and Apollo programs and
National Security. But
I believe the prospects [for space
industrialization] are bright enough to say that they may form the

nucleus for a third industrial revolution.

The main attributes of space include:

overview of the earth (essential to communications); and

high space orbits which give extended lifetime to space systems.

Other attributes of the space environment which may also be relevant are:

zero-gravity;

a near-perfect vacuum which makes manufacture of certain
products in space more cost-effective and efficient than manu-
facture on earth (particularly in the electronics and pharma-
ceuticals industries);

the presence of an unlimited reservoir for disposal of waste heat
or storage or disposal of waste products; and

uninterrupted solar energy.

1. Disher, John H., Advanced Programs, Office of Space Flight, NASA, Washington, D.C., "Plans and Projections for Space Industrialization,"

a talk for the Near Earth Space Utilization Special Seminar Series of the MIT Department of Aeronautics and Astronautics, December 8, 1976, (unnumbered).

NASA's five-year plan delineates the steps it believes are important in their Space Industrialization plan. One aspect of the five-year plan calls for bringing new "communications systems into operational use which will make available to the American people a variety of new communications services. It will create opportunities for new service businesses.

In October 1977, Robert Cooper, Director of NASA/Goddard Space Flight
Center, stated:

The research and development for future systems will include
studies by NASA of large space antennas with multiple beam
capabilities, propagation characteristics, spacecraft tran-
sponders, low-cost ground terminals, satellite switching
techniques and multiple access arrangements.

,,1

NASA indicates that, at this stage, the main utilization of space satellites is in the area of communications (other uses are weather satellites, navigation, mapping, and earth resources surveying). Commercial communications firms such as Ford Aerospace & Communications Corporation and Western Union ́s Space Communications, Inc., are using satellites to perform various services. John H. Disher, Director of Advanced Programs, Office of Space Flight, believes

that "Communications by itself constitutes a multibillion dollar Space Industry."3

NASA's long range plan for communications via satellite includes a public service platform which in NASA's belief is an important step to the industrialization of space. This proposed communications platform would have three antenna groupings covering a wide range of possible services such as personal communications, advanced television, electronic mail, teleconferencing, etc.

4

1. NASA. "Report on NASA Five-Year Planning, Fiscal Years 1978 through 1982," Washington, D. C., October 12, 1976, p. 52 (draft).

2.

Cooper, Robert. Director, NASA/Goddard Space Flight Center, "Remarks,

for the PSSC Second Annual Conference on Satellite Communications for Public Service, Washington, D. C., October 5, 1977.

3. Disher, John H., op. cit., p. 2.

4. Kline, Richard L. "The Space Station and Space Industrialization," paper presented at the Bicentennial Space Symposium, Washington, D.C., October 6-8, 1976, p. 4.

Inherent in NASA's concept of Space Industrialization is a relationship

between government and private enterprise:

Space Industrialization, by developing the permanent and productive
use of environments beyond Earth, must be based on the economic
principles of cost effectiveness and commercial competition. This
in itself presupposes the introduction of "stepping stones" to the
overarching concept of Space Industrialization in order to facili-
tate the transfer of the investment capitalization from the public
(Federal Government) sector to private industry. Since capital
costs and interest rates are significantly affected, as is infla-
tion, by the length of time and the extent to which investment
capital is tied down unproductively in development (requiring
discounting), return (pay-back) times on investment and the time
until breakeven must be minimized. In addition, the higher the
confidence level that influential features of the future Space
Industrialization systems/programs can be maintained within ac-
ceptable tolerances, the lower the risk to the investor.
[Emphasis added.]

This "transfer of investment capitalization" could be of interest to investors, those in various industries, and to proponents of space exploration. Figure 1 shows NASA's description of a four-stage process for transfer

of a space industrialization "product" from the public to the private sector. In the first stage the concept is developed with government funding. Government subsidized process evaluation occurs in the second stage with industry participation. In the last two stages, industry--without government subsidization--utilizes the process and carries out production of the product.

Candidate activities for such process may include:

information trans

mission for public services (which would encompass, among other services, data transmission, person-to-person communications, and electronic mail); manufacturing in low-earth orbit; lunar and solar industrialization; space light illumination; and space microwave power (long-distance relay of power from

source to user center).

1.

of Space:

Industrialization

von Puttkamer, Jesco. "The Next 25 Years: Rationale for Planning," British Interplanatory Society, Vol. 30, No. 7, July 1977, p. 259.