Report Recommends Letting Moratorium on Commercial Spaceflight Safety Regulations Expire

A Congressionally-mandated review by the Rand Corporation has recommended that the Federal Aviation Administration (FAA) be given the authority to formulate safety regulations to protect passengers and crew members on commercial human spaceflights when a regulatory moratorium expires on October 1, 2023.

“A full extension of the moratorium would do little to help the FAA prepare for its inevitable role in regulation while also continuing the risk that a high-profile accident could lead to pressure to immediately implement a regulatory regime regardless of the readiness of the industry and the FAA,” Rand said in its report.

[Rand report: Human Commercial Spaceflight Safety Regulations: Charting a Trajectory from Revolutionary to Routine Travel]

At stake is who ultimately bears most of the legal liability in the event of an accident: the company conducting the flight, or the customers who currently fly at their own risk.

Congress imposed the moratorium, also known as the “learning period”, in 2004 to allow commercial companies such as Blue Origin and Virgin Galactic to experiment with different approaches before the FAA began to impose regulations. Legislators have extended the learning period twice due to the slow progress being made by the industry.

The FAA could step in with safety regulations if there is a serious accident or close call. Otherwise, the FAA’s main safety responsibility has been to protect people not involved in a flight from being injured or killed and third-party property from being damaged.

Kelvin Coleman, associate administrator of the FAA’s Office of Commercial Space Transportation (AST), said the FAA favors allowing the learning period of expire during a talk at the Next-generation Suborbital Researchers Conference in February. Coleman said rules would be formulated on a gradual basis rather than all at once.

At the same conference, Commercial Spaceflight Federation President Karina Drees said the learning period should be extended because the industry is still not mature enough for FAA AST to begin formulating regulations.

Commercial Human Spaceflights by U.S. Companies
December 2018 – Present

The Rand report said letting the moratorium expire would allow the FAA to begin the process of gathering information and writing safety regulations.

“This expiration, combined with sufficient funding, would provide a much-needed learning period for the FAA by allowing for more-serious consideration and development of well-informed regulations, including the potential implementation of regulations on widely agreed-upon issues, but this learning period should not require the FAA to rush into creating new regulations for their own sake,” the report said.

Rand found that Congress would need to provide more funding for the FAA because the agency currently lacks the personnel and expertise to formulate regulations. The agency also largely lacks insight into voluntary safety practices and systems now in use because companies have treated that information as proprietary, the document added.

The Rand report recommended the FAA “gather information, viewpoints, and expert opinions from both industry and the public as to what a regulatory agenda for spaceflight participant safety should address. In addition to these formal mechanisms, the FAA should meet regularly with industry representatives to understand their needs and challenges as regulations are developed.”

FAA should also create a system that would require companies to report and share initial data about participant safety, mishaps, accidents and related data gathered during suborbital and orbital periods of flight.

“To protect proprietary information from public disclosure, these regulations could limit sharing to the FAA and/or a designated safety assessment and evaluation organization,” the document said.

A lifting of the moratorium would affect Blue Origin and Virgin Galactic, which operate suborbital spacecraft designed to carry tourists and researchers. SpaceX, which flies government astronauts and paying customers to the International Space Station, is covered by NASA safety regulations. SpaceX also conducts private orbital missions for paying customers using the same spacecraft.

Customers currently fly under an informed consent regime that require them to waive most of their rights to sue in the event of an accident. Flight providers must disclose the risks involved as part of the process.

Florida, New Mexico and Texas have passed informed consent laws to cover flights that originate from these states. Although there are differences, customers can generally sue only if a company was grossly negligent or intentionally caused them harm.

“As a legal matter, the informed-consent regime protects only two groups: industry and the U.S. government. Thus, leaving this regime in place without the possibility of additional regulation would continue to assign the burden of absorbing all risks to the participant,” the report said.

Government and industry officials interviewed for the review compared the informed consent regime to adventure sports such as scuba diving, skiing, hang gliding, bungee jumping, sky diving, and rock climbing. Interviewees believed these sports are largely unregulated due to the inherent risks involved.

“We found this assertion and comparison to be without support. Upon examination, it is evident that adventure sports are, in fact, regulated to a substantive degree. The form of this regulation, however, differs from activities or operations regulated by the issuance of federal statutes or codified regulations,” the report said.

“The regulation of adventure sports occurs primarily through the state court systems, but also through state legislatures via sport safety statutes. Decades of lawsuits filed against adventure sport providers have created an existing and enforceable body of case law that functions as a regulatory regime,” the document added.

“As a general matter, courts impose a ‘duty of care’ on adventure sports providers that even a signed informed consent form or waiver does not obviate. Additionally, courts may invalidate informed consent forms or waivers that fail to provide appropriate notice or are otherwise inadequate,” Rand said.

If the FAA doesn’t begin to regulate commercial human spaceflight, then individual complainants or their estates would be left to fight in state courts to impose legally binding and enforceable standards or rules.

“Depending on the ability of individual complainants to bring suit, the ability of individual commercial entities to defend themselves, and the potentially diverse (or random) holdings of various courts, this might not be the most systematic, efficient, or informed method of bringing regulation to the commercial space industry,” the report said.

“If Congress believes that this alternative path would be unpredictable and undesirable, the expiration of the moratorium could be an opportunity for the FAA and industry to coordinate and collaborate via [Space Aerospace Rulemaking Committees] and formal rulemaking processes to ensure the adoption of appropriate safety regulations in a systematic and predictable manner,” the document added.

The Rand report also rejected a common assertion by interviewees that formal safety regulations are unnecessary because the industry has sufficient incentive to operate safely due to the negative impact of a serious or fatal accident.

“However, this assertion typically was presented as a self-proving argument on its face, without any additional quantitative or qualitative data, information, or evidence in support. Additionally, a major accident could involve many lives, which could have significant negative social, economic, and political impacts beyond a chilling business effect on the industry. We were not able to find case studies or analogues, or other empirical evidence, to support or contravene this contention,” the report said.