Murky frontier of rules for the space industry

It’s not clear what the rules are, even as the $460 billion space industry is growing quickly.

Virgin Galactic, the space tourism company founded by Branson, announced Thursday that it would launch its first commercial spaceflight this month, joining Bezos’ Blue Origin and Musk’s SpaceX in sending ticketed passengers to space. But travel is just one emerging corner of the industry, which is mostly fueled by U.S. and international government contracts.

The sector includes companies in the fields of satellites and communications, solar power, manufacturing, and even mining. One, Orbital Assembly, hopes to open a luxury extraterrestrial hotel by 2025.

Citigroup analysts project that space businesses will reach $1 trillion in revenue by 2040.

All this activity raises legal questions.

Discover the stories of your interest

In theory, space belongs to everyone. In 1967, as the U.S. and the Soviet Union were building up their nuclear arsenals, the U.N. signed a treaty that says no country can claim territory in space. “We didn’t want to bring the Cold War into space,” Michelle Hanlon, a director of the air and space law program at the University of Mississippi, told DealBook.

Since then, a U.N. space committee has made four more treaties and five sets of principles covering areas like arms control and liability for damage caused by space objects. All are premised on the notion that space “should be devoted to enhancing the well-being of all countries and humankind, with an emphasis on promoting international cooperation.”

That perspective is about to collide with reality, said Curt Blake, a space lawyer at Wilson Sonsini Goodrich & Rosati and the former chief executive of a space startup.

“Humans have done such a bad job regulating anything of common good, like the oceans and air,” he said. “Are we going to be better at caring for the moon?”

One upcoming test is a race between China and the U.S. to get to the poles of the moon to mine water, which could make it possible to produce fuel in space. There is little understanding of what will happen when they both get there.

“Will they live on separate sides or dot their bases?” Hanlon asked. “We don’t know because we have these regulatory gaps.”

Another potential conflict is brewing over 170 million pieces of debris like satellites abandoned in the Earth’s orbit, known as “space trash,” because their accumulation makes exploration more difficult and dangerous.

Because nobody owns space, it isn’t always clear whose responsibility it is to clean it up. In September, the Federal Communications Commission adopted rules ordering companies to take down nonfunctioning satellites within five years, down from 25 years.

Lawyers are wrestling with these sorts of issues at gatherings like The Hague Space Diplomacy Symposium last week at the University of Leiden in the Netherlands, which focused on cooperation amid rising geopolitical tensions and competition.

The U.S. government has deliberately left some holes. In 2004, Congress imposed a moratorium on safety regulations for commercial space launches, essentially a free pass, or “learning period,” that is set to expire in October. It has lasted so long because there hasn’t been enough development to base new rules on.

In April, a report from the RAND Corp. recommended against extending again, and the Federal Aviation Administration is planning more oversight.

While recognizing that we need rules, business leaders caution against creating so much regulation that it pushes innovation offshore.

And futurists naturally have a long, expansive view. Many are concerned that we’ll exploit resources in space before we’re able to “access the infinity of the universe,” as Hanlon put it.

“We just need to hold it together for 200 years,” she said.

Companies may not know when employees use AI

Companies including Accenture, PwC and Morgan Stanley announced big initiatives to get their employees to use generative artificial intelligence tools like chatbots and image generators. But even at employers that haven’t introduced these tools, many workers are using them – and they may not be mentioning it.

In a survey of 4,491 white-collar workers by the consulting firm Oliver Wyman, 39% of those who use generative AI tools said they had done so without their employer’s knowledge in the last three months.

There are risks if workers use these tools without training, including that they will share private company data or not understand that AI tools can produce inaccurate work.

But there may also be potential. In a report last week, McKinsey estimated that generative AI could add $2.6 trillion to $4.4 trillion to the global economy. The research looked at 63 use cases for generative AI across 850 occupations, finding that 60% to 70% of all work tasks could be automated by currently available technology.

“Employee interest, especially amongst the younger generations, is likely ahead of many of their managers,” Ana Kreacic, chief operating officer of Oliver Wyman’s think tank, said in an email. “Some organizations are leading and some are catching up, but it takes time for best practices to evolve across different industries.”