5 Tips for Space Startups Navigating the Regulatory Landscape

Via Satellite archive photo.

To quote the U.S. Space Force, “Space is hard.” For space startups especially, navigating the complexities of space law and the regulatory environment can be hard too. Here are the top 5 regulatory issues from Wiley Rein‘s Telecom, Media & Technology Practice that startups should keep in mind when trying to launch themselves into the space industry.

Buckle Up: Space is Highly Regulated.

“Space law” may sound like a concept you only find in Isaac Asimov novels, but there is a robust corpus of laws and regulations governing activities in space. Startups should be aware that even before getting their products off the ground (pun intended), they will need to coordinate with numerous federal agencies to ensure that any activities in or relating to space are fully authorized. At a minimum, startups can expect to engage with the following agencies:

The Federal Communications Commission (FCC), for example, regulates any technologies, including space stations and earth stations (among others) that can emit or receive radiofrequency (RF) transmissions. The FCC reports space and satellite license information to the United Nation’s International Telecommunication Union (ITU) to ensure that space activities are also coordinated internationally.

For operations that might affect federal users within a spectrum band, companies must also coordinate with the National Technology and Information Administration (NTIA) to ensure that activities will not cause harmful interfere to federal government operations.

For remote sensing technologies and certain other products with optical sensors (including radar), companies must also obtain remote sensing licenses from the National Oceanic and Atmospheric Administration (NOAA).

Meanwhile, the Federal Aviation Administration (FAA) is responsible for coordinating launches. Once in space, companies must coordinate with the United States Space Force’s 18th Space Defense Squadron and NOAA for Space Situational Awareness (SSA) and Safety.

Sprechen Sie Deutsch? Already Operating in Another Country?

Do you already have a license from another country to operate? You will still need to seek authority from U.S. regulators to access the U.S. market. That will involve both filing an application and making any applicable showings. For example, the FCC has stringent orbital debris mitigation requirements for space stations and other artificial satellites. When companies seek market access for space stations that are licensed abroad, the FCC requires applicants to demonstrate that their orbital debris mitigation plans are “subject to direct and effective regulatory oversight” by country in which the space station is licensed.

Planning to Cash Out or Go on Shark Tank? U.S. Regulators May Need to Approve.

Are you planning to sell or seek investments in your startup? You may need approval from certain U.S. regulators to transfer control of licenses, technologies, or other assets to another company or owner or for substantial changes in existing ownership. For example, companies looking to sell a U.S.-licensed satellite will need to receive approval from the FCC to transfer the license to another entity. If a transaction involves the sale of controlled technologies to foreign nationals or entities, you may need to coordinate with or seek prior approval from the Department of Commerce and the State Department.

Practice Patience and Bring Your Wallet. The Approval Process Can Be Slow and Expensive.

Given the complexities involved with licensing space operations, startups should build in ample time to obtain the proper licenses to operate. Many licensing processes do not have a set amount of time for processing applications (though the FCC is considering a time frame to start the process following receipt of an application) and not all licensing activities can run concurrently. For example, coordinating spectrum operations with a federal agency officially begins only after the FCC has reviewed an application and sent it through an inter-agency process to NTIA.

Seeking approvals to operate can also be costly. Although the FCC has recently reduced application fees for conventional space station licenses across the board, they can still be significant when startup capital is limited. For example, in 2023, the cost to obtain FCC authorization to launch a space station is $2,425 for a single “small sat” (a designation for which the FCC has defined certain qualifying characteristics) and nearly $17,000 for a non-geostationary satellite orbit (NGSO) system. Accordingly, even early-stage startups should incorporate the cost of application and regulatory fees into business plans and operating budgets.

The Wild, Wild West: Sometimes There Are No Rules.

Many of the rules and regulations that govern the space industry are outdated or may not make sense in the context of emerging technologies or for new applications of existing technologies. In some instances, rules may not even exist to regulate specific technologies — such as optical links. Startups may need to advocate before regulators for rule changes where needed or explain why their tech should be authorized under or exempt from existing rules.

Jennifer Hindin is co-chair of Wiley‘s Telecom, Media & Technology Practice and chair of the firm’s Space and Satellite Group. Henry Gola and Kathryne Dickerson are partners in the Space and Satellite Group along with associate Jillian Quigley. Wiley’s team offers strategic counsel to clients in a variety of complex regulatory, transactional, litigation, and compliance matters in the areas of satellite, media, and telecommunications.