Witnesses at a House subcommittee hearing last week debated how – and whether – the U.S. government should regulate commercial space activities to ensure compliance with the 1967 Outer Space Treaty while not stifling innovation. No consensus emerged other than if there is governmental regulation, it should have a light touch.

Today, the only commercial space activities that are regulated are launch and reentry (FAA), use of the electromagnetic spectrum (FCC), and remote sensing satellites (NOAA). With the emergence of ideas for private sector activities ranging from satellite servicing to mining asteroids, the issue of the government’s role in overseeing what companies do in space has taken on new urgency.

Section 108 of the 2015 Commercial Space Launch Competitiveness Act (CSLCA) required a report from the White House Office of Science and Technology Policy (OSTP) on possible approaches to dealing with the issue while ensuring U.S. compliance with Article VI of the Outer Space Treaty. Article VI requires governments to authorize and continually supervise activities of their non-government entities, like companies.

In an April 2016 report, OSTP recommended that the Department of Transportation be assigned responsibility for granting “mission authorizations” for commercial space activities not already under the jurisdiction of another agency. DOT is the parent of FAA and its Office of Commercial Space Transportation (FAA/AST), which currently regulates commercial launch and reentry.

Through much of last year, a consensus appeared to be developing among the commercial space sector – through FAA/AST’s Commercial Space Transportation Advisory Committee (COMSTAC) – and the government (FAA, the State Department, and the Obama White House) that issuing such mission authorizations would be the solution. FAA/AST would review a proposed activity, authorize it (or not) after consulting with other agencies as appropriate, and conduct periodic evaluations to demonstrate continuing supervision.

In October, however, Rep. Brian Babin (R-TX), chair of the Space Subcommittee of the House Science, Space, and Technology Committee laid out an alternative viewpoint that essentially said the private sector should be able to do whatever it wants unless the government can demonstrate the need to restrict it. The burden would be on the government, not the private sector.

Babin said he would hold a hearing on these issues and did so on March 8.

The five witnesses were Laura Montgomery, a former FAA attorney (and head of its Space Law Branch) now in private practice; Eli Dourado, Director of the Technology Policy Program at George Mason University’s Mercatus Center; Doug Loverro, former Deputy Assistant Secretary of Defense for Space Policy; Dennis Burnett, University of Nebraska-Lincoln adjunct professor of law; and Henry Hogue, Specialist in American National Government, Congressional Research Service.

The discussion focused less on long-term potential commercial space activities like asteroid mining and more on near-term issues in Earth orbit, especially concern about collisions creating space debris. The fundamental debate, however, was over what the U.S. government must do to comply with Article VI of the OST.

Montgomery’s position is that because the OST is not self-executing, Article VI only comes into play if Congress passes legislation to implement it. Otherwise, non-governmental entities may do whatever they wish without regulation. Although Article VI states that governments must authorize and continually supervise non-government entities, it does not say how to do that or what activities are covered, she said. It is up to each Treaty signatory to make those decisions.

She believes there is a widespread “misunderstanding” that the Treaty forbids private sector activities that are not authorized by a government. Instead, she says, the Treaty does not prohibit private sector operators from conducting activities in space, does not say either that all activities or any particular activity must be authorized, and because the Treaty is not self-executing, does not create any obligation on the private sector unless and until Congress says it does. She did not argue against all regulations, only that they should not be established for the wrong reason – a misunderstanding of the Treaty. Her solution is for Congress to prohibit any regulatory agency from denying a U.S. entity the ability to operate in outer space “solely on the basis of Article VI.”

Dourado’s expertise is in technology policy and telecommunications. He likened new space activities to the development of the Internet, which benefited from “permissionless” innovation as described in a book by his colleague Adam Thierer. The Internet evolved in a regime where there was “little prior restraint” on what business activities could be conducted and if “harms or failures occurred” they were addressed “in an ex post manner.” While acknowledging that the “freedom to experiment will result in some mistakes and failures,” in the long run “faster progress and more robust solutions” will result. He advocated the same approach for space activities, with a “blanket authorization for all non-governmental operations in space that do not cause tangible harm to other parties.”

Tangible harm from space debris was Loverro’s focus. He argued that some regulation is necessary if not because of the Treaty, but “for the good of America and for the good of American business and for the good of American national security.” Citing the potential damage that could be caused by a cubesat colliding with a U.S. national security satellite or a foreign satellite, he insisted that a “laissez-faire approach to spaceflight safety has serious and non-quantifiable impacts that extend” beyond the investor, scientist or high school student that owns the cubesat.

The United States should take the lead internationally in setting the rules for conducting new commercial space activities as it did with orbital debris guidelines that were adopted by the United Nations Committee on Peaceful Uses of Outer Space (COPUOS), Loverro said. “NASA developed a set of standards, guidelines on orbital debris, that we then took to COPUOS and convinced the rest of the world [to] follow. That’s good for the U.S. and we should do it again here.” He expanded on that later in the hearing: “[T]he last thing I would like to see happen is for other nations to develop rules that we then become forced to follow. That is not good for our industry. We need to lead. We need to develop rules that are right for the U.S., and then we need to convince the rest of the world that those rules are the ones they should follow.”

Burnett disagreed with Montgomery’s interpretation of Article IV. He concluded that the Treaty “requires a minimum of some type of authorization and supervision.” He stressed that “minimum” is the key and cited the commercial remote sensing satellite regulatory process as a “cautionary lesson” to be avoided.

One of the criticisms of OSTP’s proposed mission authorization approach is that it requires use of an interagency process before approval can be granted, just as NOAA must do when considering applications for commercial remote sensing satellites. NOAA’s process is strongly criticized because of its lack of transparency and time limits. Although by law NOAA must make a decision on an application within 120 days, there are no time limits for the interagency process, tying NOAA’s hands. Restrictions on commercial remote sensing satellites are largely related to national security and the national security sector can simply decline indefinitely to act without explanation.

As Burnett said, “some of the decision criteria … are black boxes… The applicant must prove a negative, which is a logical impossibility.” He recommended that Congress pass legislation establishing a clear list of objective decision criteria and a process through which the private sector can get “authorization at the speed of business.”

Other regulatory models exist. Hogue described four alternatives to traditional government regulation: government corporations, nongovernmental standard setting, federally chartered organizations, and self-regulatory organizations.

One driver in the debate is that some of the private companies insist that potential investors want regulatory certainty before committing funds. Babin noted that “wanting certainty and wanting regulation are two different things” and asked Montgomery how those concerns could be ameliorated. She said the uncertainty stems from the misunderstanding that Article VI prohibits private sector space activities and cited space tourism as an example of a commercial space activity currently taking place without regulation.

Several companies are planning to launch tourists – or spaceflight participants – on suborbital or orbital missions, but none have done so yet. Rep. Jim Bridenstine (R-OK) pointed out that the only paying customers who have flown into space have done so on Russian government Soyuz rockets and spacecraft, “which puts it at a different level.” Montgomery agreed with his characterization of different levels of commercial space activities and there could be cases where “something is important or scary enough to be regulated.” She also agreed that regulation could be needed if there are safety concerns, but not because of Article VI.

Bridenstine, who has been a leader in Congress on these issues for the past two years, made a case in favor of an interagency review process for some activities such as satellite servicing, which has national security implications since some countries might view it as potentially interfering with their assets. He also argued in favor of Congress passing a law to create a permanent regulatory regime, whatever the specifics, so that it is not subject to change when new presidents take office.

Rep. Ami Bera (D-CA), the top Democrat on the subcommittee, said that the goal should be to provide guidance. Regulations “are not inherently good or inherently bad,” but provide guidance and clarity so companies understand the rules of the road.

Bera also said “we don’t want to stifle … creativity and innovation” and that is one of the few points on which everyone seemed to agree.