What is NewSpace?

SpaceX founder Elon Musk on the cover of the October 24, 2013 issue of The Atlantic.

What is NewSpace?

Over the weekend, the Washington Post published a lengthy article by Joel Achenbach titled, “Which Way to Space?” The article was primarily a review of the various NewSpace companies such as SpaceX, but also attempted to define the differences between NewSpace and OldSpace:

Old Space (and this is still the dreamers talking) is slow, bureaucratic, government-directed, completely top-down. Old Space is NASA, cautious and halting, supervising every project down to the last thousand-dollar widget. Old Space is Boeing, Lockheed, Northrop Grumman. Old Space coasts on the glory of the Apollo era and isn’t entirely sure what to do next.

New Space is the opposite of all that. It’s wild. It’s commercial, bootstrapping, imaginative, right up to the point of being (and this is no longer the dreamers talking) delusional.

Many of the New Space enterprises are still in the PowerPoint stage, with business models built around spaceships that haven’t yet gone to space. A bold attitude and good marketing aren’t enough to put a vehicle into orbit. The skeptics among the Old Space people will say to the upstarts: Where’s your rocket? How many times have you launched? Can you deliver reliably? Repeatedly? Safely? We put a man on the moon — what have you done?

Not everyone believes in the OldSpace/NewSpace paradigm.

Keith Cowing of NASA Watch says “it's just name calling”:

This “New Space” Vs “Old Space” designation is just a semantic ploy used by people who want NASA money for their company or pet idea that is currently being given to another company/project. You have to convince NASA that you are worthy of funding so you make the status quo look like dinosaurs. Market analysis, engineering excellence, and sound investment never seem to be important to the New Spacers. Being “new” and not “old” is, so it would seem. People who try and pigeon hole companies as being either “Old Space“ or “New Space” into one category or another are missing what is really going on.

If you've read my blog, you know I'm a firm believer that the paradigm exists, and here's why.

Mr. Cowing is mistaken if he thinks NewSpace is about NASA. It's not.

It's about a way of going about your business.

Boeing, Lockheed Martin, and ATK are infamous for throwing around their weight in the halls of Congress.

OpenSecrets.org ranks Boeing as one of their “heavy hitters,” having contributed $3.4 million in campaign contributions and spent $15.6 million on lobbying in 2012. During the same year, Lockheed Martin (another heavy hitter) spent $4.0 million in campaign contributions and $15.3 million on lobbying. ATK during that period spent $401,000 in campaign contributions and $1.6 million on lobbying.

These companies routinely engage in monopolistic business practices. Having developed cozy relationships with Congress, the military and NASA over the decades, they were able to convince Congress to grant them monopoly consortia.

The orbiter Endeavour in Orbiter Processing Facility 2 in May 2010. The orbiters were managed by United Space Alliance. Image source: NASA.

United Space Alliance was created in 1995 by Boeing and Lockheed Martin to become the primary contractor for running NASA's Space Shuttle program. At its height in 2008 (a presidential election year), USA spent $153,900 in campaign contributiions and $679,000 on lobbying — above and beyond what Boeing and Lockheed Martin spent as individual companies. In 2007, they spent $979,000 on lobbying.

In 2006, the Bush administration granted a legal monopoly to United Launch Alliance, another Boeing/LockMart partnership. According to an October 4, 2006 Washington Post article, the Federal Trade Commission acknowledged the deal would “probably lead to higher prices and lower quality.”

The Defense Department has expressed concerns that with only a few rocket launches each year, one of the two companies could have been pushed out of business. Loath to be dependent on one type of rocket, the Defense Department argued for the joint venture, to be known as the United Launch Alliance.

Under the agreement, both Boeing's Delta and Lockheed's Atlas rockets will still be produced. The companies will consolidate production at Boeing's Decatur, Ala., facility, while Lockheed's Denver office will serve as the headquarters and house the engineering and administrative functions. Some jobs will be eliminated.

Quality may not have diminished, but the monopoly did cause commercial satellite launch services to flee overseas. The last time a commercial satellite launched from Cape Canaveral Air Force Station was November 23, 2009. Intelsat 14 launched on an Atlas V from LC-41.

This is one fundamental difference between OldSpace and NewSpace.

I can't think of a single NewSpace company that loves to play Monopoly.

OldSpace companies have tried to keep the launch business for themselves. Most recently, ULA has tried to block Orbital Sciences from acquiring RD-180 engines for its Antares. ULA has an exclusivity agreement in the United States with supplier RD Amross.

In 2005, fledgling SpaceX sued to block the formation of ULA. The lawsuit was dismissed in May 2006. The judge noted that at the time SpaceX had failed to successfully launch a Falcon 1, the predecessor of today's Falcon 9.

September 14, 2011 ... Members of Congress announce the Space Launch System design. NASA administrator Charlie Bolden was relegated to a minor role in the event.

In 2010, as NASA's Constellation program was about to be cancelled, Congress scrambled to protect the OldSpace contractors by devising the Space Launch System. Critics have dubbed it the Senate Launch System. Congress ordered NASA to “utilize existing contracts, investments, workforce, industrial base, and capabilities from the Space Shuttle and Orion and Ares 1 projects.” That meant protecting Boeing, Lockheed Martin, and ATK.

OldSpace hates competition. NewSpace welcomes it.

NASA's commercial cargo and crew programs were designed from inception to be competitive.

As I wrote last March, the idea for these programs came from the Bush-appointed Aldridge Commission. They cited an existing NASA program called the Centennial Challenge, which gave cash prizes for “advancement of space or aeronautical technologies,” and suggested that “NASA should expand its Centennial prize program to encourage entrepreneurs and risk-takers to undertake major space missions.”

The commission's report called for “the breaking down of barriers to commercial and entrepreneurial activities in space, as well as a cultural shift towards encouraging and incentivizing more private sector business in space. Such a change in both perspective and posture is essential if we are to develop a broad-based, societal change in space business.”

That statement implied the commission acknowledged the sclerotic nature of OldSpace, and felt injecting competition was the way to do it.

NewSpace companies, for the most part, are motivated by the competition, although recently one NewSpace company showed it was willing to partner with OldSpace to defeat a NewSpace competitor.

In May 2013, NASA solicited proposals for commercial companies to use Kennedy Space Center's venerable Pad 39A. I wrote at the time that I was aware of SpaceX interest in the pad, but only at the last minute did Blue Origin step forward with its own proposal.

Even though NASA had not yet announced a decision, in September 2013 Blue Origin filed a complaint with the Government Accountability Office, alleging that NASA had given an unfair advantage to SpaceX. The complaint was backed by United Launch Alliance and various senators who have enjoyed campaign contributions from OldSpace companies.

This tactic delayed the Pad 39A lease decision to at least January 1.

It's a typical OldSpace stalling tactic. According to Development of the Space Shuttle 1972-1981, after NASA awarded the solid rocket booster contract in late 1973 to Morton Thiokol (the ancestor of today's ATK), Lockheed Martin filed an appeal with the GAO. That delayed the final contract award six months; LockMart lost.

But that wasn't the end of the appeal. Senators John Stennis (D-MS) and Russell Long (D-LA) asked for another review and a further delay, because they wanted Lockheed plants in their states. Their appeal was ineffective, because the chair of their space committee, Frank Moss (D-UT), represented the state that had the Thiokol plant.

In 1971, after Rocketdyne won the Space Shuttle Main Engine contract, Pratt and Whitney filed an appeal with the GAO. It took eight months to resolve. Pratt and Whitney lost.

The two companies, ironically, merged in 2005.

Many NewSpace companies have no interest in NASA subsidies, although the government one day might be a customer.

Two companies are preparing for suborbital adventure tourism flights. Virgin Galactic plans tourist flights out of New Mexico's Spaceport America. XCOR has a different business model, hoping to eventually sell their Lynx spaceplanes to operators around the world.

Stratolaunch plans to fly from a runway such as KSC's former Shuttle Landing Facility by the end of the decade. Video source: Stratolaunch.

Stratolaunch is building the world's biggest airplane, planning horizontal launches of payloads into orbit. They're partnered with Orbital Sciences, which would provide the booster.

The Golden Spike Company is run by former NASA executives, but doesn't receive NASA subsidies. They plan human lunar missions using private sector technology that should be available by the end of the decade.

Bigelow Aerospace began when its founder, Bob Bigelow, licensed NASA's defunct TransHab technology for expandable habitats. NASA has acquired a test version called the Bigelow Expandable Activity Module (BEAM) for deployment at the ISS in 2015. NASA and Bigelow also have an agreement to study the commercial space model for cislunar transportation — but no money is changing hands.

SpaceX itself is developing a heavy-lift rocket called the Falcon Heavy, which would be the most powerful rocket on the planet and second most-powerful in history, behind the Saturn V. The Falcon Heavy is being developed with 100% private funds, not one penny from the government.

OldSpace and NewSpace represent two very different cultures. One likes to bully and bribe and stifle competition. The other, for the most part, embraces competition and punches above the belt.

Perhaps one day some of the NewSpace companies will become bloated and sclerotic, throwing around their ample girth in the halls of Congress. But that day is far in the future, a future where human access to space will be far more common thanks to the refreshing whiff of competition breezing through the aerospace industry.

---

I didn't want to overlook what NewSpace companies have spent on campaign contributions and lobbying, just so you know how they compare to the OldSpace players.

According to OpenSecrets.org, SpaceX spent $194,000 on campaign contributions in 2012. No money was spent on lobbying in 2011 or 2012, although a December 2011 reporting SpaceX hired two former Republicans senators as lobbyists claimed SpaceX spent $500,000 on lobbying earlier in the year.

Orbital Sciences, the other commercial cargo company, spent $219,000 on campaign contributions in 2012 and $355,000 on lobbying.

Sierra Nevada Corp., competing with SpaceX and Boeing for the commercial crew contract, spent $271,000 on campaign contributions in 2012 and $750,000 on lobbying.

Bigelow Aerospace has made no corporate campaign contributions since 2008, according to OpenSecrets.org.