Closing Bell - Manifest Space: Public-Private Investment with Office of Space Commerce Director Richard DalBello 2/22/24

Episode Date: February 22, 2024

As launch costs have dropped and orbital activity rises, the government is taking on more responsibility to keep pace. The NOAA, the Commerce Department’s arm to oversee commercial remote sensing, has expanded dramatically since taking over non-military space tracking from the Department of Defense. NOAA’s Office of Space Commerce Director Richard DalBello joins Morgan Brennan to discuss regulatory action, monitoring the private sector and the office’s growing impact as legislation seeks to reimagine the agency’s role.

As launch costs have dropped and activity in orbit proliferates, regulators are taking on more responsibilities to keep pace. Take the National Oceanic and Atmospheric Administration. NOAA is the Commerce Department's arm that currently regulates commercial remote sensing, overseeing, for example, companies engaged in satellite imagery. In 2018, its role was expanded dramatically, as NOAA's Office of Space Commerce was tasked with taking over non-military space tracking from the Defense Department to monitor orbital activity and help commercial, civil, and foreign space operators avoid crashes. The man overseeing the transition, Richard Dalbella, is director of NOAA's Office of Space Commerce.

He says the process is raising key questions, including how much data the government should buy and at what price. These are all very young markets. So the government is a major buyer is coming into the marketplace. We know that when governments enter marketplaces, they tend to have a warping effect, at least temporarily. I mean, obviously, if the government wants to buy a computer, it knows that it has a very well-developed, very sophisticated marketplace that understands price and understands capability. We're not in that situation. So the market that we are coming to is a new market with new players. And quite frankly, the same thing is happening internationally. So what is an observation worth to us, to anyone?

The transition, which is expected to take years, will result in TRACS, which stands for Traffic Coordination System for Space. On this episode, monitoring the heavens and what the relationship between public and private sectors should look like to do it. I'm Morgan Brennan, and this is Manifest Space. Joining me now, Richard Dalbello, Office of Space Commerce Director. It's so great to have you, Director Dalbello, on the program. Thanks for being with me. It's great to be here. Thank you very much for having me. So I just want to start nuts and bolts, very basic, because we talk about the federal government regulation of space.

Different aspects belong to different agencies and organizations. When we talk about Office of Space Commerce, what specifically is your jurisdiction? And I guess just as importantly, how is that poised to potentially change or expand? Okay, well, great. Today, the Department of Commerce, my office, the Office of Space Commerce, has three principal responsibilities. Number one, for the past 30 years, we've been an advocate and a voice for commercial industry. And when this office was founded, it seemed kind of like a joke that people were talking about commercial activity in space. Because the entire world, the only people that had ever gone to space were governments. And so that's an obligation that we take seriously. We work with our commercial sector on trying to resolve barriers to doing

commerce in other countries. We try to work on export control issues, light touch regulation. So we are very engaged with industry, both domestically and internationally. The second thing we do is we are a regulator already. The Congress gave our office the responsibility for licensing the commercial remote sensing industry, all those satellites in the sky that look down at the Earth and either take pictures in the optical wavelengths or image the Earth in some other way. We're the regulatory entity for that in the U.S. government. And then finally, in 2018, we got a very large expansion of our responsibilities for the Defense Department, which had been providing free services for telling people where objects were in space. And obviously, this is a safety issue.

Space objects are traveling about 18,000 miles an hour. So knowing where everything is in space at any moment in time is a critical issue, particularly now that there's more and more being launched in space. So the Defense Department said, look, we have our hands full working on national security issues. We would like to turn the responsibility for commercial and civil space over to another entity. So in 2018, they said, Department of Commerce, we're going to transfer the responsibility to you. And we're in the middle of that process right now. OK. Yeah, and that's where I want to pick it up, because space situational awareness and as we have seen, we've seen orbit collect not only, you know, thousands, but poised to see over the next couple of years, maybe even tens of thousands of satellites in orbit. What that means in terms of how you map that out and how you take the reins on that from DOD and move forward.

Right. So two things are, as you point out, two things are happening simultaneously. One is there's been a tremendous increase in the amount of commercial activity. And not only the initial activity, but, you know, there are some waste products that get produced when you launch something into space. So there's also this ancillary issue of debris. Of course, that debris, as we saw graphically in the movie Gravity, that debris is traveling, as I said, about 18,000 miles an hour. So any, even a bolt or a small piece of metal traveling at that velocity can do tremendous damage. So keeping track of not only all the active satellites, we've had, again, a large expansion, companies like Starlink, Kuiper, Planet, OneWeb. The whole concept behind the

companies is that they're going to be launching constellations of satellites, not big individual satellites as it used to be. So the fact, and now we've heard recently that not only our U.S. companies, but the Chinese have launched, sorry, have announced several large constellations. We know that other people in Europe are looking also at building constellations. So we could see tens of thousands of new satellites launched over the next decade or so. It's pretty staggering to think about that. I know you've also partnered with or are partnering with commercial space companies, Commercial Pathfinder Project, for example, for that civil space traffic coordination system. How quickly can you build this out? And what is the role of private sector going to play in that process?

OK, let me answer the last question first. If you think of this as just any other big information system, if you think about it, we have a lot of information coming in. That information may be coming from radars or it may come from optical telescopes. In the future, this information about space may be coming from the space objects themselves. In any case, you have this massive amount of information coming in about what's going on globally. Then you have to be able to store, archive, and access that information. And then at the end, you have to do the analysis to predict, are two objects going to come close or potentially collide? And this, of course, matters greatly if one of those objects happens to be perhaps a human space station. We have a space station in the United States and our international partners. We have a space station and the Chinese have a space station. We have a space station in the United States and our international partners.

We have a space station and the Chinese have a space station. Ours is permanently occupied. I think theirs is occupied more or less, I think more and more often these days. So there's also a risk to humans. And so what role will the commercial sector play in this new enterprise? And I think they will play roles across the entire enterprise. We have companies already like Leo Labs and Slingshot, which are already doing the initial observations. We have great analytical companies such as ComSpot and Kahan and ExoAnalytics. I mean, I could go on. We are blessed in the U.S. in that we have a number of really energetic and creative companies.

And we see those companies, we will put together a basic system for holding all this data. And then we look to, if you think of it in terms of the actual infrastructure and then the applications that ride on the infrastructure, kind of like your cell phone, right? So we look to the commercial sector to provide all that incredibly creative, all the incredibly creative applications, which will actually do the conjunction assessment work, the actual work to identify potential collisions. Okay. It sounds like a great application for generative AI, too, in terms of aggregating all of this data and anticipating what collisions or avoidance of collisions is going to look like, just listening to you lay it out. You've also got this. That is a fascinating topic. And I think there are two

interesting topics that are coming together is that one, there's the question of what role will generative AI play in all of this? I mean, you know, we are looking at massive data systems. That's where their strength is. And also we're looking at a twin development now where more and more of the smarts are not on the ground, but are actually in the satellites or satellites are flying semi autonomously. So it will be interesting to see how those two worlds come together. And of course, you're going to be overseeing that entire process. How do you think it comes together? Well, I think we know that what I always say is we have, we have a number of embedded problems. One is that we have to have a machine that, you know, in a process that we rely on and trust. And two, we have to recognize that this isn't just the United States. There are SSA systems in Europe, Japan. We know the Chinese have one. Our colleagues

in India have one. So the question is, how are all these different systems, which are using different sensors and different analytics, how are all these different systems talking to each other? And today, the answer today is not very well. And so you can't really look. One of the things that causes the people who are doing this work now anxiety is that you can't look at a result from Europe and a result from the U.S. and know which one is either true or truer than the other. And so there's a tremendous amount of work that we need to do internationally as well as domestically. So eventually there will be something that looks like a space traffic control system. But that's a ways away today. Okay. I do want to get into the international outreach and the role that you and your office

play in that more broadly as well. But first, I have to ask about this recently announced cooperative research and development agreement with SpaceX as well to evaluate automated collision avoidance and satellite conjunction assessment screenings. What went into this partnership? What do you expect to get from this partnership? And how does it speak to, I guess, kind of these next steps in this ecosystem that is building out? Well, I think when we got the task of when DOD asked us, can we start doing this transition from Defense Department to the Commerce Department? One of the key things, there was a lot of interest in making sure that we use the commercial sector to the maximum extent possible. And, you know, when we're starting out, there are a couple of

fundamental questions. How much we were directed to build a basic safety service, but to not compete with the commercial services that would be offered in the marketplace. Well, that's a complicated thing to that they use to fly their entire fleet. So their fleet, which is a fleet of semi-autonomous satellites, their fleet actually is flying software that deconflicts within the fleet. So they're actually managing their own satellite deconfliction within their large constellation. Now, of course, they need other sources of data, like debris data and the other satellites that are in space, but it's a pretty significant step forward. So we wanted to work with them, and our role will be to validate what they are doing and to try to understand its future application. At the same time, we announced some other pathfinders with commercial entities, and those are designed to do a multiplicity of things.

Number one is there is uncertainty of how much is good enough. Like when the government buys information, how much of that information is actually contributing in a positive way and how much of it do we already have? So there's a certain, there's a very basic question of if we're going to be a buyer of data, how much data are we buying? Another one, really a very fundamental question about the market is what is the price and value of what is being offered in the marketplace? These are all very young markets. So the government as a major buyer is coming into the marketplace. These are all very young markets. So the government as a major buyer is coming into the marketplace. We know that when governments enter marketplaces, they tend to have a warping effect, at least temporarily. I mean, obviously, if the government

wants to buy a computer, it knows that it has a very well-developed, very sophisticated marketplace that understands price and understands capability. We're not in that situation. So the market that we are coming to is a new market with new players. And quite frankly, the same thing is happening internationally. So what is an observation worth to us, to anyone? These are fundamental questions that we have to wrestle with. So the Pathfinder program is designed to answer technical questions. What's the quality of what satellite operators are offering? What do we need to make a safe solution? And how is this market actually going to function? So we're trying to do all those things at the same time. It's interesting. The word warping got my attention just now.

What do you anticipate or what do you try to avoid in terms of warping of these nascent markets? You know, ideally, we would want to see, again, make a very simple comparison. We'd want to see a well-ordered functioning marketplace like the sale of computers or satellite bandwidth. So a lot of people use satellites for communication. That's very well understood. The pricing is very well understood. It responds in the way that all markets respond when there's a lot of competition in the marketplace, when more competition drives costs down. So that's a well-functioning marketplace. In what they call SSA or space situational awareness, these are new actors offering new products into a market that's not very sophisticated yet globally. And you also have government actors, not only us, but China, Europe, UK,

I mean, India. So the question is, what are all those other governments going to do in this marketplace? Is it going, you know, the US goal is to have a basic government service with a functioning commercial marketplace in space situational awareness. That may not be everybody else's goal. So we have a domestic challenge, and then we have an international challenge. We know when governments come in, launch vehicles is a good example where the governments had a warping influence early on on the commercial marketplace because they were the primary buyer of this. So, you know, there wasn't a well-developed functioning marketplace for launch vehicles initially into the 90s even. And so the government's presence in the market

had a disproportionate impact to those people who were trying to either enter the market who were already in the marketplace. So we're talking about, I mean, it's a fascinating, you know, it's a fascinating topic. And certainly to your point, whether it's launch vehicles or some of the other examples of history to try and avoid that and learn from those past mistakes and enable a self-sustaining, it sounds like, thriving commercial space economy, essentially, that does intersect with and work with governments. I wonder what this means for sort of the next iterations of this nascent economy, because we're starting to have these conversations. You're starting to see the startups. There's a big expectation that something like Starship, for example, is going to unlock the potential around this around in space servicing and assembly and in space manufacturing,

which which I realize is poised to based on some of the proposed legislation out there or I guess White House proposal that's out there fall under your jurisdiction. So how do you think about some of these next chapters, which could come pretty quickly? Well, let me connect those two ideas, if I can. What I would predict, which is not a very profound prediction, is that technological advancement is very disruptive to markets. And we're seeing that today, you know, when Elon Musk and SpaceX perfected the reentry of stages and the reusable stages, they were able to dramatically move the needle on cost, which changed the marketplace for everyone in the world in terms of what the value of a launch was. So we're going to see the same thing. We have companies trying to work on exotic new things

like habitats in space for humans. We have people working on technologies for direct connection between satellites and your cell phone. All of these things are going to have profound impacts on the marketplace and on pricing. And it will be a very robust and exciting, I think, process to watch. Where do we hope to play? One of the things the White House and Congress have been struggling with in Washington has been who should be responsible for these new technologies. And if somebody wants to send a rover to the moon, or if somebody wants to do servicing of a satellite, if somebody wants to create new technologies that can image the earth or use radio waves in exotic ways. Who's responsible

for that? You know, a long time ago, almost seems like ancient history, in 1967, we signed, the U.S. government was helped create what is called the Outer Space Treaty, which is sort of a fundamental document outlining how nations will work together in space. And one of those principles established in the Outer Space Treaty was that governments are responsible for the actions of their commercial sectors. At the time, of course on behalf of our commercial companies. So we have, you know, FAA in the Department of Transportation, of course, does launch and recovery. We have the FCC, which does spectrum. We do commercial remote sensing. So the question is, who's going to do the new activities? And the White House made a

proposal, which they released before Christmas, and basically said that most novel activities activities would come to the Department of Commerce. And what we are looking for now is that Congress is also engaged. There's a separate bill in the House. There's a bill in the House. There's a separate bill that's being worked on in the Senate. And as those of us who are following the budget drama today, you know that getting the Senate and the House together is a challenge all of them itself. So we have a proposal, the House has a proposal, the Senate will have a proposal. And what I think will happen is a good old American democracy will eventually find a center line somewhere. The good news is that on this issue, there's broad bipartisan support. Both Republicans and Democrats have come together many times to support the commercial space industry. And I and I believe they will continue to do so.

So we at the Department of Commerce think we'll probably get role that the Office of Space Commerce plays in all of that. How it speaks to as well your outreach internationally and how that continues to evolve as all of this as all of this does? Well, one of the things that we've been trying to do in 2023 and going into 2024 is staying connected with our closest allies and partner and have these dedicated dialogues about space activity. Obviously, for all the reasons we've been discussing, it's a complicated set of issues. Of course, we have laws that regulate activities. Those are all different nation to nation. We have export controls that impact the ability of goods to move from one country to the other. We have broad, big issues like we've been discussing in space for debris and sustainability. And there's the concern about, you know, with the new constellations,

how are we going to control all these assets? So we've really done, we've really tried last year and this year to make a real effort to reach out to our closest partners and allies to start these deep discussions. You know, we've done over the generations, we've managed to solve a lot of complicated problems. You know, your cell phone works today in New York City and Tokyo and Mumbai and South Africa because of the hard work of a lot of dedicated bureaucrats around the world to make sure that happened. That set of people happen to be working through the what's called the International Telecommunication Union or the ITU, which is the sum total of the processes for regulating spectrum in the world. So there's no such thing like that that impacts space.

There's no such thing like that that controls or attempts to regulate space today. So what we have are a lot of really important bilateral and multilateral discussions on these issues. Sometimes these issues are discussed under the general rubric of space sustainability, but it's really just not, it's also about space coordination and making sure that all nations have access to and the ability to exploit these resources, not only now, but into the future. So getting good rules in place, getting sensible rules in place, getting good practices for sharing information, getting good practices for reducing debris, unnecessary debris, these are all really important issues. And they can only be done in dialogue with the rest of the world.

It sounds like you're going to have your hands full and a very busy plate in front of you as all of this unfolds and you take all of these big challenges on. I appreciate the time. Director Richard Dalbello, Office of Space Commerce. It's great to speak with you today. Thank you. Great talking to you. And I look forward to listening to more of your podcast, which I love. That does it for this episode of Manifest Space. Make sure you never miss a launch by following us wherever you get your podcasts and by watching our coverage on Closing Bell Overtime. I'm Morgan Brennan.