Dave Melcher Remarks at the 32nd Space Symposium

Thank you and good morning.  It is my pleasure to speak to you on behalf of America’s aerospace industry – an industry that includes established companies and new entrants – both of which are essential to our 21st century space ambitions.

It’s an honor to follow Congressman Jim Bridenstine who has brought new energy and commitment to the space policy discussion on Capitol Hill. I’m also very pleased to be the warm up act for NASA’s leader, Administrator Charlie Bolden.  His passionate advocacy of NASA’s exploration and research missions deserves our praise.  He also deserves our continued support. I was personally happy to do this when AIA recently participated with the Administrator in an event promoting NASA’s bold New Aviation Horizons initiative.

Currently, AIA is working with scientific and academic community stakeholders to convince federal decision makers that NASA deserves an overall funding increase.  It bears repeating that if NASA had the same purchasing power it had 20 years ago, its budget would $2 billion higher today.  And that would buy us a lot of capabilities for aeronautics, human space exploration, and space science.

For those unfamiliar with AIA, let me tell you what we’re all about.  As the voice of America’s aerospace and defense industry, we’re fighting for strategic priorities that are critical to our nation’s space leadership and for global space activities.

Our first priority is to advocate for policies and budgets that strengthen our industry and help grow the economy. That’s why we vigorously fought to lift the budget caps that were harming NASA’s ability to conduct new missions, NOAA’s weather satellite programs, and DoD’s space programs.

We also joined with our Space Foundation colleagues in developing a white paper to educate presidential and congressional candidates about the space industry’s importance and diversity.  While space has not been discussed in the presidential debates, it doesn’t mean we shouldn’t make the effort to inform all federal candidates about the important role space plays in all of our lives.

Our second priority is to improve the U.S. aerospace and defense infrastructure and retain U.S. industrial base capability – including the STEM workforce. We think these issues are critical to sustaining and advancing American innovation.  Indeed, NASA is making great progress in creating hubs of innovation around the nation at its Centers and at universities, furthering the fact that space is a critical component of the U.S. innovation ecosystem.

A third priority is to work responsibly to enhance our nation’s safety and security and protect the environment.  We define the environment broadly to include space systems that monitor our home planet, as well as having a safe space environment to operate human and satellite space assets.  That’s why Space Situational Awareness is increasingly important.  We simply can’t afford to have a collapse of our space infrastructure – instead, we need to be building and protecting it.

A final priority and my primary focus for today is to ensure that the U.S. is a robust competitor in the global marketplace for space-related commercial infrastructure, products, and services.

At one time our nation was focused on the space competition with the Soviet Union—for military capabilities and civil space prestige. Now, as the Space Foundation’s Global Space Activities annual report highlights, the international commercial market is largely propelling space enterprises.  Of the $330 billion in global space activity in 2014, three quarters was commercially related.

While U.S. space companies compete well in this market, there’s no question we could and should be doing much better.

I believe the European nations as well as Japan, Russia and India view the space market as a strategic commercial opportunity for growing their economies.  And so should we. Yet in the past, we have literally shot ourselves in the foot with detrimental policies and political apathy that has denied billions in global market opportunities to U.S. companies.

The first decision was the 1998 congressionally mandated imposition of munitions-level export controls on satellites.  American companies’ share in the global commercial satellite market subsequently plummeted from 63 percent to 30 percent.  Fortunately, due to the intervention of the Bush and Obama administrations a series of reforms has modernized export controls, giving our companies a fair chance to compete for commercial satellite contracts.  I can tell you from my previous role as the CEO of Exelis that key contracts with Japan and South Korea for weather payloads helped to preserve a piece of the industrial base that is critical to our nation.

The second, more recent self-inflicted wound to U.S. commercial space success was last year’s effort by an extreme minority in Congress to block reauthorization of the Export-Import Bank of the U.S.  This was no small matter.  During the several months that Congress failed to act on the Bank’s future, U.S. satellite manufacturing companies and the small companies that support them lost at least three major satellites sales to foreign competitors and possibly launch service contracts as well.

While some Washington experts felt that fighting for Ex-Im was a lost cause our industry did not give up.  AIA was part of a coalition that worked hard to convince legislators that the Bank’s lending authority is essential to helping our satellite manufacturers.  We argued that our foreign competitors, backed by very aggressive national credit banks, viewed with glee a U.S. economic policy of unilateral disarmament.

We’re gratified that Congress heeded our call and voted in December to keep Ex-Im going strong.  But we still need the Senate to confirm the President’s nomination of Mark McWatters, a Republican, to the Bank’s Board of Directors so that Ex-Im can fully function in supporting major U.S. export sales, including hopefully more space exports.

On this subject please let me make one thing very clear. We welcome international competition in the commercial space arena. Competition helps drive innovation. Our goal is to assure that U.S. companies can compete fairly in this important market segment.  And our hope is that the U.S. government will realize – as other nations already have – that space provides an increasingly promising commercial business opportunity that can fuel our long-term economic growth.

Indeed, the larger lesson of the export control and Ex-Im fiascos is that rather than fighting defensive battles against self-defeating policies, we need to get on the offensive in this important commercial arena. To do this our nation needs a 21st Century Commercial Space Competitiveness Strategy.

To create the conditions necessary to compete in the global commercial space marketplace, we must invest in technology development, workforce, exports and innovation.  And in our thinking, a strong, comprehensive 21st Century Commercial Space Competitiveness Strategy should include policy, regulatory and advocacy elements that achieve these objectives.

Let’s start with policy.  As just one example, hosted payloads have great economic potential –  that is if there is a clear, well-coordinated policy that provides industry the opportunity to bring innovative solutions to the market.  Hosted payloads cross both national security and civil applications and we must find a way to work collaboratively to address the challenge of their dual use, just as we have with Unmanned Aircraft Systems.

We also need policies that help spur and keep pace with technology development.  Both the government and industry can join forces in supporting the development and fielding of bold new space applications for the commercial market such as Wi-Fi from space and even power generation.

Those federal agencies with trade portfolios should in our judgment adopt a positive focus on sector-specific elements of the space industrial base and establish measurable space trade and export objectives in each of those sectors.  We should also consider giving NASA a space trade promotion role, to complement the work of our trade promotion agencies as they seek to enhance U.S. space competitiveness as well as to promote enhanced space cooperation.

Turning to regulation, we strongly believe in building on the momentum of export reform.  We encourage the U.S. government to immediately publish the final rules for Category 15—Space Systems— emphasizing raising the limits of allowable aperture size which reflects changes in the global marketplace.  Right now we are behind and we’re falling further behind.

In addition, the government should work expeditiously to complete the regulatory rulemaking related to dual-use communication satellites so companies no longer face unnecessary barriers when pursuing export sales.

We also should take forward-leaning stances on orbital debris mitigation and compliance with accepted best practices backed by transparency and confidence building measures that ensure all commercial players freedom of access to space.

A final regulatory issue involves spectrum.  We believe the U.S. should avoid disrupting globally harmonized spectrum bands, including the Ka-bands, for future global satellite systems.  This is a common sense recommendation that will help ensure the prosperity of future space commerce.

The last element I’d like to discuss is advocacy—built hopefully on a bipartisan national consensus about the need for U.S. international commercial space leadership.  While government agencies can’t close the deal for our companies selling satellites and space systems to foreign customers, they play a critical role in promoting and advocating for our commercial space companies.  The Commerce Department’s International Trade Administration can play a particularly important role in this regard.

The Commerce Department along with the State Department can also have a role in educating and training U.S. space industrial base suppliers and their customers on space export control reform changes.  We want our companies to know with confidence that when they are ready to sell a product abroad, there will be no yellow or red lights around the bend.

This is a good place to wrap up with one final thought. I recognize that taken individually, all of these recommendations seem undramatic.  To an extent they are.  But commercial space success is not defined by dramatic major events like planting a flag on the moon.  Commercial success is more like baseball – a game where home runs get attention, but teams that win consistently do it with singles, doubles and good fielding.  For too long, our nation has acted as if commercial space was a “nice to do” activity in addition to bold civil and military space programs.  In this century, the biggest space opportunity for our nation may be commercial – and, as demonstrated by the International Space Station program – these commercial systems may also enable the government to do more with fewer expenditures.

Clearly, expanded commercial space activities are good for the bottom lines of the many great companies that attend this important symposium.  But to the extent we have higher aspirations, including seeing astronauts conducting exploratory missions on Mars as soon as two decades from now, we need to propel our industry forward to that goal.

As much as government space programs fueled our early space achievements—with strong industry support—we’re going to be counting on the commercial space sector to help pave our way to the red planet and beyond.  The strategy I’ve outlined today will strengthen the entire space industrial base, and hasten the day when we watch this long-held ambition of the space community come to pass.

I thank you for your attention and for your support of the dedicated men and women who work for America’s aerospace industry.  It is a privilege to be with you today.