Presenter Information

Robert W. Eleazer, ACTA, Inc.Follow

Location

Radisson Resort at the Port, Convention Center, Jamaica Room

Start Date

1-5-2001 2:00 PM

Description

In October of 2000, Andrew Beal, Chairman and Founder of Beal Aerospace Technologies, Inc., announced that his fledgling space launch company was ceasing all operations before it built its first rocket. He gave the reason as “There will never be a private launch industry as long as NASA and the U.S. government choose and subsidize launch systems.” This is a harsh, and perhaps unrealistic indictment of current government policies, but it raises the question “What is a subsidy?”

In terms of the dictionary, a subsidy is defined as “....money granted by the state to a commercial undertaking (such as a transportation service) considered to be of public benefit,..” (Webster’s Dictionary New Edition, Banner Press). Today, subsidization is a highly controversial topic in the space launch industry, both in the U.S. and internationally. It has been alleged by various different space industry representatives that that subsidies are absolutely necessary, and by others they have the effect of destroying innovative new concepts. But what is subsidization? How is it practiced, if at all? And what are its effects?

In terms of the dictionary definition of subsidization, U.S. Government subsidies are not given to commercial space launch firms. In fact, they are forbidden by law. The same situation does not exist in the rest of the world However, subsidies come in many forms, especially in the highly complex business of launching payloads into space.

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May 1st, 2:00 PM

Paper Session I-A - Subsidization: Fact of Life, Necessary Evil or Appropriate Policy?

Radisson Resort at the Port, Convention Center, Jamaica Room

In October of 2000, Andrew Beal, Chairman and Founder of Beal Aerospace Technologies, Inc., announced that his fledgling space launch company was ceasing all operations before it built its first rocket. He gave the reason as “There will never be a private launch industry as long as NASA and the U.S. government choose and subsidize launch systems.” This is a harsh, and perhaps unrealistic indictment of current government policies, but it raises the question “What is a subsidy?”

In terms of the dictionary, a subsidy is defined as “....money granted by the state to a commercial undertaking (such as a transportation service) considered to be of public benefit,..” (Webster’s Dictionary New Edition, Banner Press). Today, subsidization is a highly controversial topic in the space launch industry, both in the U.S. and internationally. It has been alleged by various different space industry representatives that that subsidies are absolutely necessary, and by others they have the effect of destroying innovative new concepts. But what is subsidization? How is it practiced, if at all? And what are its effects?

In terms of the dictionary definition of subsidization, U.S. Government subsidies are not given to commercial space launch firms. In fact, they are forbidden by law. The same situation does not exist in the rest of the world However, subsidies come in many forms, especially in the highly complex business of launching payloads into space.

 

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