O’Connell Remarks at June 2020 ACCRES Meeting

On June 24, Office of Space Commerce Director Kevin O’Connell spoke about the new commercial remote sensing rule at the 27th meeting of NOAA’s Federal Advisory Committee on Commercial Remote Sensing (ACCRES). Below are his remarks as prepared for delivery.

Learn more about the rule

Good morning. Thanks to Congresswoman Horn for those inspiring remarks. I am delighted to be spending some time with you today.

As I begin, I’m not without my own bias about the importance of this Committee’s work so let me start by thanking Gil and the Committee for your key inputs to this rule and all of your ongoing efforts.

Let me also give credit to my colleagues Glenn Tallia, and the NOAA General Counsel team, as well as Tahara Dawkins and the CRSRA team. They worked tirelessly to get this rule to where it is today.

Let me also thank our other federal government colleagues for working, at times very intensely, through so many important details of the rule. Fortunately, we had some pretty high-level help, including General Hyten, Defense Deputy Secretary Norquist, and our boss, Secretary Ross, weighing in strongly on issues. The Secretary will share some of his thoughts with you tomorrow.

We have a new-found appreciation of what it takes to operate in a widely-sensed world, and what it will take to advance long-standing American leadership in the area of commercial remote sensing.

Let me also thank Senator Cruz and Congressman Babin for their very strong comments yesterday about the Office of Space Commerce, and why it is important that we continue to strengthen it. I’ll return to that topic at the end of my remarks.

Rule

Let me start with the rule. Glenn and Derek and Kate walked you through the details of the rule yesterday, so let me offer some perspective on specific aspects and what I think are some of its broader implications.

Many of you commented yesterday on the clarity of thought and organization in the rule, both substantively and legally. Glenn wasn’t kidding yesterday when, after last year’s discussion with ACCRES and other industry inputs, we felt the need to signal a strong shift of intent, or what he also called a “shock to the system.”

The innovations in the rule involve transparency and especially flexibility. CRSRA has always gotten high marks for the pre-consultation process, but there’s a drive in the rule for increased efficiency, both in the licensing process and in the paperwork that companies need to do. We had already succeeded in driving down the licensing timelines significantly but want to reduce them even more. Time is a source of competitive advantage in this fast-paced global market, and we’re very aware of that.

While the availability test is only one part of the new rule, it is a key part. The data availability test underpins the most logical regulatory framework that we’ve ever had. Veterans in this conversation will remember forced constructs like the two-tier system and the 24-hour rule, which often implied government commitments that actually weren’t there. Many of the things we tried, in hindsight, were great tactics but had strategic implications for the industry. The data availability test acknowledges that some things are not in our control, and focuses our attention on truly novel systems, efficiently, mindful that we want to encourage those innovations.

The rule is designed to allow us to adapt to fast-changing market conditions.
Flexibility will be key either in moving through the tiers, based on changes in availability, or, should shutter control be used, to be used for the most limited amount of time and geography, and therefore business impact on the operator. (I’m sure you can find references to that idea in about a dozen ACCRES notes over the past eighteen years!).

For the record, I’m not aware of a single case where a U.S. company, confronted with real U.S. national security concerns, did not comply. And I don’t expect to see it, either.

We also sought flexibility on the non-Earth imaging issue, but in a different way. It was arguably one of the more challenging discussions as we finalized the rule. Keeping it in there was a sign that we understand how important that capability will be to satellite servicing and other emerging space functions. So we kept it in, with conditions, and the Department is committed to looking at the market again in about two years, under the assumption that more licensees will come to market with direct or indirect NEI needs.

Let’s stay on the availability issue. We want to make sure that we are incorporating as many sources as possible on availability, including those of industry. You often bring us unique perspectives on competition in the market, including new technologies and business models, but also the speed of those activities: depth and breadth of investment, the quality of competitors. Anticipation is key to effective regulation.

To say it another way, the availability test shouldn’t be seen as a brake on American innovation, it should serve as an important signal of where the market is heading. Tony asked yesterday if we’d be publishing some data on that and the idea is very intriguing.

It might be obvious, but this point needs to be iterated. This final rule is a very successful example of government-industry collaboration in honing new regulations. That’s a uniquely American approach to regulation. As you all know first-hand, the discussions were intense, sometimes contentious, but they were absolutely key to making sure that this rule reflects and can adjust to real-world conditions.

Broader Implications

That’s the kind of vision that we’re trying to employ more broadly in the spirit of SPD-2, to knock down barriers that impede the commercial use of space. It’s why this Committee and many other industry engagements are so important. It’s also why we include industry engagement as a key focus area in the Office of Space Commerce. (As an aside, our understanding of commercial capabilities is also why we are optimistic about our ability to move very quickly on the space debris problem, once funding is available; the space industry and other industries have leading-edge capabilities and great ideas about how to keep space safe and sustainable).

Yesterday, Scott mentioned how we have stayed close to the space industry as it navigates, like all other industries, the effects of the COVID pandemic. We’ve spoken with companies large and small, and the industry has stayed very well connected. We have been able to work through the industry associations to understand some of the unique impacts of the pandemic on the space industry and some of their specific proposals for recovery.

What has impressed me so much during this challenging time and the source of my continued optimism is how many entrepreneurs have come across our doorstep, virtually, to bring new ideas to market for space commerce.

Future

Yesterday, someone posed a question about whether the new remote sensing regulation helps position us for the trillion-dollar space economy. It does, but as Robbie rightly said, regulatory reform it is only one piece of it. Ideally, this rule and how we implement it will serve as a model for encouraging space innovation, not stifling it. But the devil will be in the details, and I hope that we use Gil’s “reasonableness” standard as we navigate them.

Within the Office of Space Commerce, we work on a number of other elements that we know are key to that future: continuing innovation, a supportive finance and insurance ecosystem, dealing with space debris, and talent. The trillion-dollar space economy needs all the technical talent it can get, but it also needs a wide range of other skills to reach its full potential. Everyone and every place in this country that wants to be part of the space economy should be able to participate. American companies will have to succeed in increasingly competitive space markets, including dealing with anti-competitive practices.

Think about how far the commercial remote sensing industry has come. We’ve moved from a world of pixels to one of deep analysis; from a world of electro-optical imagery to a whole new set of phenomena; collected, analyzed and disseminated at speed; from a world of “isn’t everyone going to buy this?” to unique applications in market verticals like agriculture and insurance. It’s a real success story. We often have to remind people how past space investments, including commercial remote sensing, have been essential to navigating the COVID crisis. This industry has been instrumental in identifying economic impacts of the crisis as well as allowing the remote monitoring of facilities in ways that kept people safe.

Remote sensing has a rich and deep relationship with our national security, so it will inevitably affect how we think about it. The new rule demonstrates how much we have adjusted that mindset to incorporate how important this industry and other parts of the space industry are to our economic and national security future. That thinking must continue to evolve to consider a future of space that, from our vantage point, is overwhelmingly commercial.

I’m sure that industry will do its part to help get us to that trillion-dollar space economy. We’ll also continue to do our part, armed with industry insights and the generous support of folks like you who participate in ACCRES.

Let me stop on that note for a question or two. Thanks again.

Tagged with: , ,
Posted in Commercial Remote Sensing, Regulatory Reform