Broadcast 3704 Dr. Akhil Rao

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Guest:  Dr. Akhil Rao;  Topics:  The economics of space debris, risk management, solution ideas, regulatory enhancement for industry growth and more.

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We welcomed space economist Dr. Akhil Rao to the program to discuss orbital use policy, debris risk management and ways to enhance the value of the space industry through controlled regulations.  Dr. Rao started the discussion with economic definitions which differ from legal definitions.  One key definition was the term commons.  Listen to how he explained it for law and how he was using it in this economic discussion.  He also talked about space goods and services being excludable or considered a rival/congestible in nature.  This introductory discussion was an important part of the entire discussion so be sure to listen to it carefully.

Most of our discussion talked about over crowding orbits and the potential consequences for doing so in the coming years.  He explained the ideas behind controlling orbits, regulations designed to enhance the value of orbits, company and government participation in orbit control plus he explained the statement suggesting orbit fees would lead to quadrupling the value of the space industry in a short period of time.  We talked about economic choices for industry as well as government, including the choice of doing nothing about debris and orbit crowding, mostly of course in LEO.  Our guest brought up the Kessler Syndrome and at one point suggested a timeline for it in the future if nothing is done to avoid the problem. 

Much was said about the meaning of open access for orbits, controlled open access plus methods of controlling the orbits through frequency allocation, local regulations, other spectrum controls, even satellite servicing. Our guest got lots of email questions and two call which were both from Marshall.  Several of the emails focused on making sure there were free and competitive markets in space.  While Akhil agreed with this, listen to his commentary and analysis regarding sustaining competitive markers.  Many listeners were of the opinion that regulations would end up being the opposite of having free, competitive space markets. 

Orbital use fees were introduced to the discussion by our guest but the subject was a main focus of the three .pdf papers uploaded to our blog.  There was some listener blowback to the idea of use fees along with regulations with the concern being how one controls the regulators.  Our guest had interesting things to say about this plus the fact that businesses can be abusive to the commercial environment bringing on regulations, even excessive regulations.  Our discussion moved on to risk mitigation and how fees might be assessed.  Listen to the formula he used for assessing a use fee or even a zero cost use fee.  Let us know what you think about this by posting on our blog.  Akhil was asked about the challenging in computing the costs given intangibles that probably needed to be added in such as inflation, taxes and incentives, nationalism, plus a few others were mentioned.  Listeners suggested that there were so many factors that there was the real risk of having a garbage analysis.

During our discussion, Akhil used several examples to drive home his points.  A frequent industry example was the oil and gas industry.  After listening to what our guest said using oil and gas as an example, what do think?  Was that a good industry to use an example to the points he was making about satellites and orbit usage?  Listener Frank brought up the expansion of orbits to include cislunar space, transfer orbits to the Moon or elsewhere, plus orbital depots, Earth-Moon LaGrange points, even the ISS.  All of these matters were discussed in detail so be sure not to miss the points made by our guest who repeatedly talked about a goal of making sure commerce and obits were sustainable well into the future.  Later in the discussion, Akhil got questions on how one can assure control of the regulators pointing to the concern that regulators usually start out with great intentions but end up pretty far from that starting point, often damaging or even ruining competitive markets.  In addition, our guest was asked for timelines in terms of the risk assessment for orbital debris problems.  For the Kessler Syndrome, our guest suggested perhaps a 10-30 year timeline -"maybe."  He repeatedly called for action before we reached the tipping point.  At this point our guest provided us with a succinct summary pointing out that orbital debris was a real problem which he thought best resolved with a series of economic incentives for the industry.  He reminded us that it was better to lead and get ahead of the problem rather than playing catch up to the problem.

Please post your comments/questions for Dr. Rao on the blog for this show.  You can reach our guest through me or his Middlebury College faculty website.

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space economics, LEO debris, orbital use fee possibilities

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11 Jun 2021 Dr. Akhil Rao
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