Without a doubt, the "ChinaGate" controversy is a direct result of our country's failure in commercial space transportation. It is a direct consequence of our country's failure to replace a government-dominated segment of our space program with a true commercial space transportation industry. Below is column by Greg Easterbrook that was printed in the NY Times that gets a number of the issues right.

Easterbrook points out that "By neglecting the need for affordable rockets, American space policy not only created the conditions that led to the satellite deals with China, but it also has jeopardized its own hopes for the future." ProSpace agrees, but there is more to the story. ProSpace has already briefed over 250 congressional offices in 1998 on existing problems in national space policy -- and proposed some solutions. These problems should be given a fresh look as part of the "ChinaGate" story and investigation. They include:

1. Major dis-incentives for the existing space transportation companies to invest and innovate.

The current industry is dominated by government contractors who have a poor understanding of commercial markets. Their primary customer is the federal government. Instead of investing in new technology and a keen focus on developing new markets, they have learned (from their primary customer) to invest in lobbyists. As a result, the existing government contractors have huge cost-plus contracts and cozy relationships with government agencies -- a major disincentive to innovation and reductions in cost. They view "cheap access to space" as a threat to their way of life, not as a great business opportunity.

At the same time, there is a significant number of new space transportation companies who model themselves around a different paradigm. These companies are investing tens-to-hundreds of millions of dollars in private capital on innovative concepts that the old-style companies have ignored. They have names like Kistler Aerospace, Kelly Space and Technology, Space Access, Rotary Rocket, Pioneer Rocketplane, Universal Space Lines, and Beal Aerospace. Remember these names -- among them are the Apples, Microsofts and Intels of the near future. ProSpace has been promoting legislation and a number of specific policy initiatives that would help these companies succeed.

2. Competition by the government with private companies -- either directly or indirectly through the use of subsidies for winners chosen by the government.

This one fact does more than anything else to scare away the billions in investment dollars now available from private capital markets for rapidly growing industries like commercial space. Because of the importance of this issue, ProSpace has been forced to oppose, and help kill, government subsidies of individual corporate favorites chosen by government executives on several occasions.

3. Failure by the U.S. Government to procure space services in a commercial manner as required by law (the Launch Services Purchase Act of 1990) and the President's National Space Policy.

There are many additional opportunities for both NASA and the Department of Defense to procure space services using commercial methods. But progress has been slow -- in many ways the Russian Space Agency, the pinnacle of Soviet Communist pride, is now using more commercial practices than NASA. ProSpace has been actively promoting new efforts within the federal government to expand the use of commercial procurement pactices.

Conclusion

These three factors have combined for the last three decades to reduce American innovation in space transportation to a snail's crawl. The current American disposable launchers are based on 1950s technologies developed during the Cold War. The Space Shuttle is more proof that government can not conduct routine operations in an efficient, low-cost manner.

The only effective policy response is for our nation to encourage the rapid development of innovative solutions by America's growing commercial space industry. Commercial space revenues now exceed the total space expenditures of every government on this planet. Merrill Lynch recently projected that space commerce will grow at a 17% annual compounded growth rate for the next 10 years. By working in concert with the growing power of this market, the U.S. Government could formulate an effective policy response centered on free enterprise, and the competitive advantage provided by the American entrepreneurial spirit.

The media can play an important role by going beyond the surface issues of "ChinaGate," and examining the root causes of the problem. As the full story gets out, our nation will be able to effectively address the problems, and once again become the world's pre-eminent leader in space transportation.