ASTRA: An American Space Transformation Regulatory Act
From helping farmers maximize crop yields to creating new and exotic pathways for manufacturing, the space economy has the potential to triple over the next decade. Unlocking abundance in the space economy will require lowering the barriers for new space actors, aligning with international partners, and supporting traditional measures of risk assessment (like insurance) to facilitate space investment.
Unlike countries with newer space programs that can benefit from older programs’ experience, exploration, and accidents, the United States has organically developed a patchwork regime to manage human and non-human space flight. While this approach serves and supports the interests of government agencies and their mission-specific requirements, it hinders the deployment of new and novel technologies and gives other countries motive to deploy extraterritorial regulatory regimes, further complicating the outlook for new space actors. There is an urgent need for rationalization, as well as for a clear and logical pathway for the deployment of new technologies, and to facilitate responsible activities in orbit so that space resources need not be governed by scarcity.
As the impacts of human space activities become more clear, there is also a growing need to address the sustainability of human space operations and their capacity to restrain a more abundant human future. While the recent space commercialization executive order attempts to rationalize some of this work, it also preserves some of the regulatory disharmony that exists in the current system while taking actions that are likely to create additional conflicts with impacted communities. The United States should re-take the lead; among the examples set by New Zealand, the European Union, and other emerging space actors; in providing a comprehensive space regulatory framework that ensures the safe, sustainable, and responsible growth of the space industry.
Challenge and Opportunity
The Outer Space Treaty creates a set of core responsibilities that must be followed by any country wishing to operate a space program, including (but not limited to) international responsibility for national activities, authorization and supervision of space activities carried out by non-governmental entities, and liability for damage caused to other countries. In the United States, individual government agencies have adopted responsibilities over individual elements of human activity in space, including (but again, not limited to) the Federal Aviation Administration (FAA) over launch and reentry, the Department of Commerce (DOC) over remote sensing, the Federal Communications Commission (FCC) and DOC over spectrum management, and the State Department and DOC over space-related export controls. The FCC has also asserted its regulatory authority over space into other domains, in particular the risk of in-space collision and space debris. If a company wishes to launch a satellite with remote sensing capabilities, they need to participate in every single one of these regulatory permitting processes.
Staffing and statutory authority create significant challenges for American space regulators at a time when other countries are getting their respective regulatory houses in order. The offices that manage these programs are relatively small– the Commercial Remote Sensing Regulatory Affairs (CRSRA) division of the OSC currently staffed by two full time government employees while the FAA has only five handling space flight authorizations. CRSRA was briefly hamstrung earlier this year when its director was released (and then immediately rehired) as part of the Trump Administration’s firing of probationary employees at the National Oceanic and Atmospheric Administration–likely collateral damage in the Administration’s attempts to target programs that interact with climate change.
The lack of personnel capacity creates particular challenges for the FAA, which has struggled to keep pace with launch approvals under its Part 450 launch authorization process, among a record-breaking number of mishap investigations, novel space applications, and application revisions in 2023. Last year, FAA officials testified that the increase in SpaceX launches, alone, has led to hundreds of hours of monthly overtime logged, constituting over 80% of staff overtime paid for by the American taxpayer. Other companies have described that accidents from SpaceX-related launches create shifting goalposts for their companies, pushing FAA officials to avoid confirming receipt of necessary launch documents to avoid starting Part 450’s 180 day review deadline. The shifting goalposts and prior approvals also means that certain launch vehicles are subject to different requirements, creating incentives for companies to focus their efforts on non-commercial and defense-related missions.
Without updates to the law, the statutory justification for increasingly important regulatory responsibilities is also unsound, particularly those that pertain to orbital debris. After the Supreme Court’s Loper Bright ruling, it is unlikely that the theory of law underpinning FCC’s regulation of space debris could withstand court challenges. This creates a particularly dangerous situation given the long-term impact that the breakup of even small objects can have on the orbital environment, and is likely the reason that space companies have yet to openly challenge the FCC’s assertion of regulatory authority in this space. This also challenges the insurance industry, which has suffered significant financial losses over the past few years and caused certain companies to pull out of the market entirely.
As human space activities increase, the demands created by the Outer Space Treaty’s requirement for supervision and liability are likely to also see corresponding increases. Some countries hosting astronomical observatories that are significantly impaired by light, radio, and other electromagnetic pollution from commercial spacecraft have enacted laws relating to satellite brightness and interference. The number of high-profile debris strikes on property – like when a metal component from the international space station crashed into a Florida family’s occupied home – will also increase as second stages of rockets and larger satellites return to earth. The Mexican government is exploring options to sue SpaceX over environmental contamination and debris near its Starbase Texas launch site.
The unique properties of interstellar space and other planetary surfaces demand other considerations we take for granted on Earth. On Earth, we consider the flexibility of nature to “heal itself” and revert to “natural” states of being, regrowth, and regeneration of destructive resource extraction. Instead, planetary surfaces with little to no atmosphere or wind, such as the moon, will preserve footprints and individual tire tracks for decades to thousands of years, altering the geological features. Flecks of paint and bacteria from rovers can create artificial signatures in spectroscopy and biology, contaminating science in undocumented ways that are likely to interrupt astrobiology and geology for generations to come. We risk rendering an advanced human civilization unable to unlock discoveries resulting from pristine science or explore the existence of extraterrestrial life.
Significant safety concerns resulting from increased human space activities could create additional regulatory molasses if unaddressed. An increasing and under-characterized population of debris increases risk to multi-million dollar instruments and continued operations in the event of a collision cascade. Current studies – both conservative and optimistic – point to the fact we are already in the regime of “unstable” debris growth in orbit, complicating the mass-deployment of large constellations.
Unfortunately, current international law creates challenges for the mass-removal of orbital debris. Article 8 of the Outer Space Treaty establishes that ownership of objects in space does not change by virtue of being in space. This is done to make the seizure of other countries’ objects illegal, and it isn’t difficult to imagine weaponizing satellite removal capabilities (seen in the James Bond film “You Only Live Twice”). If it is not financially advantageous to mitigate space debris, or export control concerns prevent countries from allowing debris removal, then the most-likely long term results are either unchecked debris growth, likely leading to increasingly draconian regulatory requirements. None of this is good for industry.
Absent a streamlined data-sharing platform of satellite location and telemetry, which could be decimated by federal cuts to the Traffic Coordination System for Space (TraCSS), the cost and responsibility of satellite collision and debris avoidance will encourage many commercial space operators to fly blind. The underutilized space industry, already reeling from massive losses in recent years, would face another source of pressure. If the barriers to satellite servicing and recovery satellites remain high, it is probable that the only market for such capabilities will be military missions, inherently inhibiting the ability of these systems to attend to the orbital environment.
While abundance speaks to increasing available resources, chemistry and the law of conservation of matter remind us that our atmosphere and the oxygen we breathe is finite, fragile, and potentially highly reactive to elements commonly found in spacecraft. We are only starting to understand the impact of spacecraft reentry on the upper atmosphere, though there is already significant cause for concern. Nitrous oxide (NOx), a common compound used in spacecraft propulsion, is known to deplete ozone. Aluminum, one of the most common elements in spacecraft, bonds easily with ozone. Black carbon from launches increases stratospheric temperature, changing circulation patterns. When large rockets explode, the aftermath can create enormous impacts for aviation and rain debris on beaches and critical areas. To top it all off, the reliance of space companies on the defense sector for financing means that many of these assets and constellations are often inherently tied to defense activities, increasing the probability that they will be actively targeted or compromised as a result of foreign policy actions or fast-tracked due to regulatory streamlining that circumvents public comment periods from raising valid safety concerns.
We are quickly approaching a day when the United States government may no longer be the primary regulator of our own industry. The European Union in May 2025 introduced its own Space Act with extraterritorial requirements for companies wishing to participate in the European market. Many of these provisions are well-considered and justified, though the uncertainty and extra layer of compliance that they create for American companies is likely to increase the cost of business further. The EU has created a process for recognizing equivalent regimes in other countries. Under current rules, and especially under the Administration’s new commercial space executive order, the United States regulatory regime is unlikely to be judged as “equivalent.” Given the concerns from EU member states and companies alike about the actions of U.S. space companies, it is more likely than not that the EU will seek to rein in the U.S. space industry in ways that could limit our ability to remain internationally competitive.
Plan of Action
Recommendation 1. Congress should devote resources to study that which threatens the abundance of space, such as the impacts of human space exploration, damage to the ozone layer; inadvertent geoengineering as a result of orbital reentry and fuel deposition.
This should include the impact of satellite interference on space situational awareness capabilities and space weather forecasting, which are critical to stabilizing the space economy.
While the regulatory environment for space should be rationalized to unleash the potential of the space economy, research is also needed to better understand the impacts of space activities and exploration given that we are already beginning to feel the impacts of space activities terrestrially. Having an abundant space economy is meaningless if the continual reentry of satellites destroys the ozone layer and renders the planet uninhabitable. Congress should continue to fund research on the upper atmosphere and protect research done by the NOAA Chemical Sciences Laboratory to understand the upper atmospheric impacts from human space activities.
The astronomy community has also voiced significant concerns about the impact of satellites on their observations. Satellites show up as bright streaks in the sky when taking pictures and can cause significant disruption to radio telescopes and weather forecasting sensors, alike. This impact is not only felt by ground-based telescopes and sensors, but also those in orbit like the Hubble. This could have consequences for tracking other interstellar phenomena, including (but not limited to) space debris, space weather, cislunar space domain awareness, and planetary defense. Further, light pollution inhibits our ability to discover new physics through astronomical observations–the Hubble Tension, neutrino mass problem, quantum gravity, and matter-antimatter imbalance all suggest that there are major discoveries waiting for us on the horizon. Failure to preserve the sky could inadvertently restrain our ability to unleash a technological revolution akin to the one that produced Einstein’s theory of relativity and the nuclear age.
There is still much more work to be done to understand these topics and to develop workable solutions that can be adopted by new space actors. The bipartisan Dark and Quiet Skies Act, introduced in 2024, narrowly addresses but one of these needs; sustained support for NASA, NOAA, and NSF science are all necessary given the technology required for taking measurements in the stratosphere and advanced metrology.
Recommendation 2. Congress should create an independent Space Promotion and Regulatory Agency.
Ideally, Congress should create a new and independent space promotion and regulatory agency whose activities would include both the promotion of civil and commercial space activities and provide for authorization and supervision of all U.S.-based commercial space organizations. This body, whose activities should be oriented to fulfilling U.S. obligations under the Outer Space Treaty, should be explicitly empowered to also engage in space traffic coordination or management, to manage liability for U.S. space organizations, and to rationalize all existing permitting processes under one organization. Staff from existing agencies (which is typically 2–25 people) should be relocated from existing departments and agencies to this new body to provide for continuity of operations and institutional knowledge.
Congress should seek to maintain a credible firewall between the promotion and regulatory elements of the organization. The promotion element could be responsible for providing assistance to companies (including through loans and grants for technology and product development like the DOE Loan Programs Office, and also general advocacy). The regulatory element should be responsible for domestic licensing space activities, operating the Traffic Coordination System for Space (TraCSS), and any other supervision activities that may become necessary. This would be distinct from the existing Office of Space Commerce function in that the organization would be independent, have the ability to regulate space commerce, and ideally have resources to fulfill the advocacy and promotion elements of the mission.
In an ideal world, the Office of Space Commerce (OSC) would be able to fulfill this mission with an expanded mission mandate, regulatory authority, and actual resources to promote commercial space development. In practice, recent events under both administrations have pointed toward the office being isolated within the National Oceanic and Atmospheric Administration under the Biden Administration while running into similar bottlenecks with the Secretary of Commerce in the second Trump Administration. Independent authority and resourcing would not only give the director greater plenary authority, but also allow them to better balance the views of interagency partners (and hopefully shedding some of the baggage that comes from broader relationships between government departments with broad mandates).
This recommendation explicitly does not suggest eliminating the FAA or OSC’s functions, but rather merging the two, preserving current staff and institutional knowledge, and allowing them to work in the same (and independent) organization to make it easier to share knowledge and information. Creating a new regulatory agency on top of the FAA or OSC is not recommended; the purpose is to streamline. Preference would be given toward assigning all of the functions to one actor or another rather than creating a new and duplicative function on top of the existing structures in Commerce and FAA.
Given the significant terrestrial impact of spectrum issues related to space, delegating those functions to the FCC and NTIA probably still makes sense, so long as orbital debris and other space regulatory functions are consolidated into a new body that is clearly given such regulatory authority by Congress.
Recommendation 3. Congress should consider requiring that insurance be purchased for all space activities to address the Outer Space Treaty’s liability requirements.
Insurance ensures that nascent areas of growth are minimally disruptive to other interests, i.e. damaging critical infrastructures such as spraying GPS satellites with debris shrapnel, or harming the general public when skyscraper-sized pressurized fuel tanks explode on the ground. Insurance is broadly recognized for its ability to help create the type of market stability that is necessary for large capital investments and promote long-term infrastructure improvements.
The participation of insurance markets is also more likely to encourage venture capital and financial industry participation in commercial space activities, moving the market from dependency on government funding toward self-sustaining commercial enterprise. Despite this, out of 13,000 active satellites, only about 300 are insured. The satellite insurance industry’s losses have been staggering over the last two years, making the pricing of risk difficult for new space actors and investors alike. Correct pricing of risk is essential for investors to be able to make informed decisions about which companies or enterprises to invest in.
Current insurance covers $500 million in damages to third parties – any costs beyond this are drawn from the reservoir of the American taxpayer (unless damages exceed a ceiling cap for the government of about $3.1 billion). The current incentive structure favors the deployment of cheap, mass produced satellites over more sophisticated vehicles that drive technological leadership and progress. The failure or loss of control over such assets can create a permanent hazard to the orbital environment and increase the risk of a collision cascade over the lifetime of the object. Increasing the number of covered satellites should help more correctly price overall market risk, making space investments more accessible and attractive for companies looking to deploy commercial space stations; in space servicing, assembly, and manufacturing satellites; and other similarly sophisticated investments. These types of technologies are more likely to contribute to abundance in the broader market, as opposed to a temporary, mass-produced investment that does only one thing and ends in a loss of everyone’s long-term access to specific orbits.
The Outer Space Treaty’s liability provisions make a healthy and risk-based insurance market particularly important. If a country or company invests in a small satellite swarm, and some percentage of that swarm goes defunct and produces a collision cascade and/or damages on-the ground assets, then U.S. entities (including the government) could be on the hook for potentially unlimited liabilities in a global multi-trillion dollar space economy. It is almost certain that the United States government has not adequately accounted for such an event and that risk is not currently priced into the market.
A thriving insurance market can also help facilitate other forms of investment, which may become more confident in their investments and tolerant of other risks associated with investment. It would also serve as an important signal to international partners that the United States is willing to act responsibly in the orbital environment and has the capacity to create the financial incentive schemes to honor its commitments. By requiring insurance, Congress can use the prescriptive power of law to ensure transparency for both investors and the general public.
Recommendation 4. The United States should create an inventory of abandoned objects and establish rules governing the abandonment of objects to enable commercial orbital salvage operations.
Given that Article 8 of the Outer Space Treaty could serve as an impediment to orbital debris removal, countries could establish rules or lists of objects that have reached end of life and are now effectively abandoned. The Treaty does not necessarily prevent State Parties from creating rules governing the authorization and supervision of objects, including transfer of ownership at the end of a mission. An inventory of abandoned objects that are “OK for recovery” could help manage concerns related to export controls, intellectual property, or other issues associated with one country recovering another country’s objects. Likewise, countries could also explore the creation of salvage rights or rules to incentivize orbital debris removal missions.
Recommendation 5. The State Department should seek equivalency for the United States under the EU Space Act as soon as possible, and seek to engage the EU in productive discussions to limit the probability of regulatory divergence, probably more than doubling the regulatory burden placed on U.S. companies.
With the introduction of the EU Space Act, the primary regulator for U.S. space companies with an international presence is likely to be the European Union. The U.S. Department of State should continue to pursue constructive engagement with the European Commission, Parliament, and Council to limit the risk of regulatory divergence and to ensure that the United States provides adequate safeguards to quickly achieve equivalency, obviating the need for U.S. space companies to worry about compliance with more than one country’s framework. This would ultimately result in lower regulatory burden for the United States, particularly if measures are taken to consolidate the existing U.S. space regulatory environment as described in Recommendation 2.
The failure of the U.S. to get its own house in order is likely to motivate other countries to take similar measures, increasing compliance costs for American companies while foreign operators may only need to rely on their domestic frameworks. Without equivalency, U.S. operators are likely to have to deal with multiple competing regulatory regimes, especially given the past history of other countries outside the EU adopting EU regulatory frameworks in order to secure market access (the Brussels Effect).
There is a foreign policy need for the U.S. and EU to get on the same page (and fast). Given that companies from the United States are more likely to seek access to European markets than those in the PRC, an asymmetric space policy environment opens a new sphere for contentious policy negotiations between the U.S. and EU. Transatlantic alignment is likely to produce greater leverage in negotiations with the PRC while creating a more stable market where U.S. and European industry can both thrive. Similarly, an antagonistic relationship is more likely to push the European Union toward greater strategic autonomy. Fear of dependence on U.S. companies is already creating new barriers for the United States in other areas, and space has been specifically called out as a key area of concern.
Further, space actors are less familiar with the extent to which trade negotiations can result in asymmetric concessions that could disadvantage one industry to gain benefits in another. To put it bluntly, it is unlikely that President Trump will go to bat for SpaceX (especially given his current relationship with its owner) if it means giving up opportunities to sell American farm exports. One need only look at the recent semiconductor export controls decision, allegedly done to facilitate a bilateral meeting between the two presidents in Beijing.
Conclusion
Unlocking the abundance of the space economy, and doing so responsibly, will require the development of a stable and trustworthy regulatory environment, repairing frameworks that enable monopolistic behavior, and correct pricing of risk in order to facilitate sustainable investment in the outer space environment. Abundance in one realm at the expense of all others (like when a new spacecraft pauses all air traffic in the Caribbean after exploding) is no longer “abundance.” If the United States does not act soon, the deployment of more modern regulatory frameworks by other countries offering a more agile environment for new technology deployment is likely to accelerate the growth of their advantages in orbit.
If space is there, and if we are going to climb it, then regulatory reform must be a challenge that we are willing to accept, something that we are unwilling to postpone, for a competition that we intend to win.
If space is there, and if we are going to climb it, then regulatory reform must be a challenge that we are willing to accept, something that we are unwilling to postpone, for a competition that we intend to win.
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