Re: Government's History of Trying to Eliminate Competition in LaunchServices

[Damian Georgeff <damian@xxxxxxxxxxxx>]

Greetings Fellow List Members

Thanks for another thought provoking article, Mark.

Sounds like the Shuttle wasn't the best vehicle for all occasions, and Government
stifled any and all competition to ensure that there was no real choice.

Be Well
Damian

Mark Reiff wrote:

> FYI,
>
> "Welcome to the Party, Pal!"
> The Space Review
> http://www.thespacereview.com/article/517/1
>
> : Elon Musk?s SpaceX Corporation has filed a lawsuit against The
> : Boeing Company and Lockheed Martin Corporation, charging them with
> : ?violations of antitrust, unfair competition, and racketeering
> : laws? associated with the two firm?s dominance of the Evolved
> : Expendable Launch Vehicle (EELV) program. In submitting this legal
> : action SpaceX has shown itself to have shown up to the party late,
> : very late.
>
> : In the late 1950?s and 1960?s US space launch systems were
> : developed in the manner they were because a range of capabilities
> : were required?and because everything was being done in big hurry.
> : There wasn?t really much in the way of real competition. The Scout,
> : Thor/Delta, Atlas, Titan, and Saturn series were developed to fit
> : their own market niches, and there was little overlap in
> : capabilities. It was true that most payloads had an inexorable
> : tendency to get larger and larger, proceeding from Scout to Thor to
> : Atlas in at least one example, but this really produced no
> : competition to speak of. In fact, most payloads were designed a
> : specific booster in mind; moving to another one was both a big pain
> : and most of the time, unnecessary.
>
> : This all changed with the advent of the Space Shuttle program. The
> : shuttle was everyone?s competitor, from small low Earth orbit
> : payloads to big interplanetary missions. It was designed that way,
> : and all of the expendables were to be phased out, by governmental
> : edict.
>
> : Of course, there was nothing to prevent someone from building
> : launch systems to compete with the shuttle. Nothing except a
> : well-funded, heavily-subsidized, government-run competitor that
> : would grab 100% of the government missions as well as all of the
> : commercial flights not planned by lunatics. Surprisingly, there
> : were a few US companies that set out to compete with the shuttle,
> : and all but one of them aimed at small payloads, the result of both
> : technical necessity and market realities. It cost about twenty
> : million dollars to launch even a small payload on the shuttle,
> : about four times what a Scout launch cost. So, maybe there was a
> : market niche for little, cheap rockets, even if the government
> : couldn?t care less about that capability. Run on a shoestring and
> : possessing far more enthusiasm than technical acumen, the American
> : Rocket Company, Starstruck Industries, and SSI Space Services did
> : not last long. The government would not subsidize the new little
> : upstart companies to compete with the shuttle; in fact it would
> : hardly even give them the time of day.
>
> : The Commercial Space Launch Act (CSLA), signed in 1984, made things
> : a little better for those wishing to buck the mandatory shuttle
> : trend. The CSLA meant that the Air Force and NASA could not simply
> : tell the upstarts to go bother someone else, or to charge them
> : outrageous fees based on amortizing the sunk costs associated with
> : launch bases and ranges. But the shuttle was still the launch
> : vehicle that government programs were required to use, and it was
> : subsidized in a manner to make sure no commercial competitors arose.
>
> : The Reagan Administration signed the CSLA and eventually agreed to
> : a limited amount of government-sponsored competition for the
> : shuttle, at least where government needs demanded it. By the
> : mid-80s it was clear that the shuttle?s planned 50 flights a year
> : was still a long ways off, at best. Aside from that, the Air Force
> : had never been entirely comfortable with putting all its eggs in
> : the Shuttle basket. The Complementary Expendable Launch Vehicle
> : (CELV) program was begun in 1984; this would yield the Titan 4.
> : CELV was to ?complement? the shuttle and was limited to 10 flights,
> : all of which would require Centaur upper stages. NASA responded to
> : this Air Force initiative by entering the competition, proposing a
> : vehicle consisting of three modified shuttle solids, a Titan second
> : stage, and a Centaur upper stage. An alternative to the shuttle for
> : a few vital military payloads made sense from a military
> : standpoint, but there were still those in the US government
> : determined to run all of the ELVs out of business. When next the
> : Air Force put in a budget request for the use of decommissioned
> : Titan 2 ICBMs as space boosters to launch another 10 missions
> : besides those on Titan 4, NASA lobbied Congress to kill the idea,
> : citing it as a ?threat to the Space Shuttle program.? Competition
> : was one again a problem for at least some people in the US
> : government; for Titan 2 it turned out to be a problem for even more
> : people than anyone would have thought.
>
> : General Dynamics?the one large company that had decided to try to
> : still build ELVs on its own?tried to get in on the Titan 2 program.
> : GD proposed new production Atlas boosters in lieu of the converted
> : Titan 2. The Air Force reacted to the idea of such competition with
> : absolute horror. The Titan 2 booster idea had been sold on the
> : basis that we had all of the old missiles just sitting around and
> : we might as well use them for something; after all, it had to be
> : cheap. The idea that you could build new Atlas boosters for the
> : same amount of money?or maybe even less?would be all NASA needed to
> : get Congress to put an end to Titan 2. GD?s proposal was turned
> : down on a technicality, and the company was cautioned to not go not
> : go pushing the idea on Capitol Hill. Competition might be
> : theoretically desirable, but it was not politically correct.
> : Backups for military launches were one thing, but that did not mean
> : that supporting the launch industry was a national priority. As
> : part of its objective of placing pressure on the Soviet Union from
> : multiple sources, the Reagan Administration even agreed to allow a
> : limited number of US satellites to launch on boosters built by
> : communist China. Besides, we had the space shuttle and that was
> : supposed to be superior to everything else, anyway. One very senior
> : Reagan Administration official summed up the government?s
> : attitude. ?It?s like this.  Videocassette recorders get shipped
> : over here from Japan in the millions. When they get here they get
> : carried to the store on U.S. made trucks, but our balance of
> : payments still takes a big hit. Satellites are like VCRs and
> : boosters are like trucks. There is a lot more money to be made in
> : the satellites than the trucks that carry them.?
>
> : So, if there was going to be a US ELV industry, it was going to
> : have to compete for commercial payloads with not only the US
> : government-subsidized space shuttle but also the Chinese Communist-
> : subsidized Long March series. Unfortunately, this amounted to an
> : invaluable training program for the Long March program. The Chinese
> : launch prices were almost ridiculously low by Western standards,
> : but one China expert later said he thought they probably would have
> : done it for free, just to gain the experience.
>
> : The loss of the Challenger in January 1986 changed everything, or
> : almost everything. It was now possible to buy ELVs again. In fact,
> : it was a necessity. McDonnell Douglas and Martin Marietta emulated
> : General Dynamics and started commercial launch programs to
> : complement their new government business, but that still did not
> : mean that supporting the industry as a whole was an overall
> : national goal. After the initial problem of handling the huge
> : backlog of shuttle payloads was addressed, both the USAF and NASA
> : started thinking about cheaper launch methods. The Advanced Launch
> : System (ALS) and National Launch System (NLS) both were conceived
> : as joint Air Force/NASA efforts. ALS and NLS eventually shared the
> : same fate: cancellation at an early stage while still only
> : exploring technological concepts, victims of congressional
> : disagreements, NASA complexity, and Air Force reprioritizations.
> : The two programs also shared the same general concept. A single
> : series of boosters would replace the venerable Delta, Atlas, and
> : Titan. Modular in nature, the design would reduce launch choices to
> : one, with only one contractor, one set of launch pads, and one
> : launch crew to support.
>
> : Eventually, in 1994, a real booster development program was begun :
> : the EELV program. NASA was no longer part of the team and advanced
> : technical developments were no longer an innate part of the
> : concept, but the objective was the same. A single series of
> : boosters would replace everything but the smallest launch vehicles,
> : which no one cared much about anyway. Once again, the objective was
> : to go from supporting three companies to just one. The original
> : EELV program plan was to down select from four bidders to two and
> : then to one. The winner would take all: secure all of the USAF
> : launches required, plus whatever NASA, NOAA, and commercial
> : launches he could gain as a result of being the only firm receiving
> : Air Force funding. The down select for Phase 2 of the program
> : resulted in McDonnell Douglas and Martin Marietta being the chosen
> : firms to compete for the next downselect. Both companies almost
> : immediately vowed to continue their programs even if they were not
> : the final big winner. When asked how they would handle such an
> : eventuality?with the inevitable result that the loser of the
> : competition would bid on the same launches as did the winner?the
> : EELV program office responded that it would make no difference.
> : ?Winner Take All? would still apply. The loser would be shut out of
> : further bids even if he developed his rocket at his own expense,
> : and even if he offered a lower price.
>
> : The EELV System Program Office (SPO) knew full well that their
> : program plan called for the elimination of all but one major launch
> : company, and as a result they developed a full-fledged case of
> : paranoia. The Air Force at the launch ranges was not even allowed
> : to help the two bidders develop their concepts by pointing out what
> : aspects were infeasible or where local improvements could be made;
> : that was deemed to be ?coaching? and might favor one firm over
> : another.
>
> : As it turned out, a new direction solved the Air Force?s downselect
> : dilemma. By the mid-90s it appeared that the burgeoning commercial
> : launch industry would support at least two major firms, and
> : competition between them once more would be desirable. Both of the
> : remaining EELV bidders would be considered to be winners. This
> : happy change of plans no doubt enabled the EELV program office to
> : stop envisioning lynch mobs assaulting their offices.
>
> : In reality, the commercial space launch market that loomed so large
> : in the mid-1990s was something of an illusion. Failure of the
> : commercial market to continue to grow, combined with stiff foreign
> : competition from Arianespace, China, and Russia, meant that a
> : largely commercial domestic space launch industry simply was not
> : feasible. The USAF could not become merely an airline-style ticket
> : buyer, a large but minority player in a much broader commercial
> : industry; the service had to fall back on its earlier role. On the
> : other hand, by employing the commercial approach the Air Force had
> : managed to pursue the development of two new booster series for the
> : cost originally planned for just one, a noteworthy if not totally
> : unique acquisition achievement.
>
> : To summarize, eliminating competition has been an objective of US
> : government launch plans for over 35 years. It has not worked out
> : that way, but not through lack of trying. The ultimate result of
> : the EELV program is at least a hundred percent better in terms of
> : competition than was planned originally. If the two winners have
> : decided to get together and split up the market between them, that
> : is not significantly different from the program?s original
> : objective.
>
> : So, as Bruce Willis said in film Die Hard, ?Welcome to the party,
> : pal!? The rules SpaceX doesn?t like are the ones we have been
> : playing by for a long time.
>
> Which doesn't mean that they don't need to be changed.  Apparently
> the author is satisfied only with acknowledging the government
> sponsored launcher monopoly, not breaking it up.  That could be
> explained by the fact that his career has benefited greatly from
> perpetuating that monopoly.  What about the countless careers in the
> commercial launcher industry that would benefit from open competition?
> Not to mention the benefit to the tax payer, who has paid through the
> nose for decades for maintaining this monopoly of space mediocracy
> and those that intend to keep it that way.
>
> --
> Mark Reiff <markreiff@xxxxxxxxxxxxx>
>
> --
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