A new tool to help startups navigate through the many, many, many space regulations

There are a lot of regulatory boxes you need to check to get your space project underway. This can be hard for companies with smaller budgets and legal resources. To help, the firm Aegis Space Law has created a regulatory calculator tool to help commercial space companies understand which regulations apply to them. To learn more, The Space Hour host Eric White got the chance to talk to Bailey Reicheldt who is a partner at Aegis.

Interview Transcript: 

Bailey Reicheldt   We’ve developed with what we’re calling the space regulatory calculator. It’s a free tool posted on our website, a bunch of regulatory attorneys at Aegis Space law. We built it because we wanted to come up with a tool that could just give our clients an idea of what the regulatory timelines and costs even look like before they even engage with an attorney or start going down the route of talking to regulators. So, Aegis Space law, we’re in a niche, boutique law firm. We work with a lot of space startup clients. And over our last four years of working with those startups, we realized more and more that there’s kind of a regulatory valley of death that they run into, because they’re very focused on the technology and getting investment. And they leave regulations as the last leg of that, when they get to the regulations, they suddenly realize, oh, some of these timelines are two years long, you know, and they’re already signing commercial contracts. And they’re trying to get launch agreements in place commercially. And the spectral allocation they might need from the FCC could take them a really long time. So, they don’t quite realize how long those timelines are, or that they can be very expensive. So, export licensing under the State Department costs money, licenses with the SEC cost money. And that’s just the regulatory fees and application fees, getting people to help you build this stuff can also be equally expensive. So, we created this tool. And it’s really simple logic it’s a decision tree. And it answers three primary questions for a US based Space company, starting their regulatory journey. It tells you which of the primary agencies you’re going to need to talk to, the federal agencies, how long the timeline is, from application to submission to possibly getting your license. Now, it doesn’t take into account how long it takes you to even build the application, but from submission to getting it back. And about how much it’s going to cost you it gives you the regulatory fees. So, we think that just putting that out there on the internet, and it at least gives people some idea of the journey they’re about to go on, hopefully allows them to prepare a little better. So that we see fewer space startups hitting that regulatory valley of death.

Eric White   Yeah, is it you know, you use the word startup. So that generally means that it’s folks who may have some experience in the business, but are just getting their feet wet at this moment? Have you noticed in working with a lot of your clients that they’re just not aware of the regulatory burden that is required for this kind of work? Or how shocked I guess, is my real question of, you know, when something when you give someone a timeline, and they go what?

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Bailey Reicheldt  Well, it’s pretty common that they’re absolutely shocked, especially if they’ve worked for a bigger company, and they’ve had a department that’s been handling this for them. And then they went out and started their own business, they just they have no concept, they were siloed from this information, or say they came from a foreign country and started a company here, which is quite a bit of our commercial space sectors, we have foreign persons coming here to bring their innovations to the US. And it’s not like when you go through immigration, they inform you of US export control law, that just doesn’t happen. So, unless you’re encountering it somewhere in industry in the US, no one’s telling you about it. So, it’s a pretty unreasonable expectation that most people even know how many regulations they’re going to deal with. And even if you go and talk to the agencies, they don’t necessarily understand how onerous the other agencies in this process’s regulations are like, State Department and Department of Commerce worked together quite a bit like on the export front. But the FAA often has no idea about the export licensing piece or SEC has no reason to know about the other regulators. They don’t understand how all their licensing requirements stack up and the timelines and how they run in parallel. So hopefully, it even allows regulators to kind of see how hard it can be for a commercial space company to navigate this process.

Eric White  Yeah, a little bit of look what you made me do, right? Do you have to deal with all of this? So, you know, with all those variables that you just described, I mean, just multiple regulated regulatory agencies having a hand in just launching a new piece of technology. I know that this you’re probably going to tell me that it’s not meant to be super accurate, but how can you guarantee the accuracy of this new tool With all those variables that you have to consider, just, you know, even some paperwork getting lost in the shuffle or anything like that?

Bailey Reicheldt   Oh, absolutely, we can’t guarantee anything, especially when it comes to the regulatory timelines, because some of them are more fixed than others. Regulators can often stop the timelines. For instance, when they go back to an applicant, and they ask for additional information, those timelines will toll until you respond, or the application might get returned to you. And you have to start all over. There’s lots and lots of variables. This is just to get people started asking the right questions and getting an idea, we anticipate there might be a second version of the calculator that comes out with a lot more sophisticated knowledge, or a sophisticated assessment. But that’s going to take us a lot more time to build because that’s actually going to require more than just yes, no questions and branching logic. So that’s, that’s in the works. But yeah, we can’t guarantee those timelines, there’s too many variables. But you should have an idea of whether it’s going to be one month or two years. And that’s still going to be helpful.

Eric White   Yeah, so just doing its part to set expectations, right, you know, with all the talk these days about AI taking over jobs. Or is this a new tool that may actually lighten your workload a little bit.

Bailey Reicheldt   You know, if I can figure out a way for AI to better inform industry, I think we’ll pursue that. I’m not terribly concerned right now. Because there are so many variables, and there’s so much of a human element on this, when you start talking to regulators, there’s a lot of discretion on the regulatory side. Again, for instance, AI is not deciding, oh, I need to go ask them more questions, or let’s apply a different definition of this word like AI is not necessarily making decisions like that. That would cause this timeline extension. So, I’m about terribly concerned.

Eric White   So when we last spoke, you know, this was you had mentioned how niche your law firm actually is, and helping folks in this realm of, you know, the commercial space sector and all the regulations, can you give me a bit of a sense of how have the regulatory agencies behaved, you know, even over the past few years, this is all new for everybody. And they’re also trying to make the adjustments so that there is a successful commercial space entity that they’re not hindering too much of progress. Is that the case? Are they starting to hold hands a little bit better for these folks that are just starting out?

Bailey Reicheldt   That’s an interesting question. I don’t think that regulators are necessarily thinking how can we cater to the burgeoning commercial space industry? So much as they’re thinking about streamlining regulations overall? And how can we keep the American economy competitive in leading technological innovation worldwide? And how can we also protect national security and make it easier for industry to work with us and for us all to be on the same team? And that’s one of the issues I think, with this space industry, when it gets super niche sometimes is we tend to think so at such a granular level, but really, regulators are thinking about many, many things beyond just the tiny space industry. So that’s part of I think, how we have to shift our mindset, for instance, export controls, we are seeing reform, where many things are coming off the ITAR, hopefully many more things off the ITAR going over the EAR, because they’re technology that’s no longer controlled for military application, or it’s become kind of ubiquitous and use around the world. So, it doesn’t have the same need for the national security protections to keep it under the State Department on the United States Munitions List. You know, we’re seeing we’re seeing the government asking industry more for input on what they should control less or put less restrictions around. But I don’t know that the motivators specifically driven on making things easier for commercial space so much as the economy overall.

Eric White   Gotcha. And, you know, you had mentioned how you were kind of hoping that regulators may even use this tool just to show what the regulatory burden looks like for a startup company, could this be something that, you know, they may contact you for, you know, and utilize this tool for themselves, and maybe even work with you to make it a little more accurate?

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Bailey Reicheldt   So, we actually just released it on Tuesday, this past Tuesday, June 5, I don’t know what day it is anymore, but we just released it. And we’ve actually already had some regulators contact us and ask about the second iteration. So, I think you might see that happen. And I do want to clarify, so Department of Commerce Office of Space commerce, they actually are pretty interested in streamlining the regs, they have a mission to streamline the regs for commercial space. So that stands out among the regulators in my mind and how they might do that. We don’t quite know yet. This tool might be part of it. I do want to make sure people know about the tool. We’re putting a whole suite of tools out there Aegis is, over the course of the rest of this year. We’re going to be putting more medicals out, just trying to lower that regulatory barrier, making sure people have resources aggregated in one place that, you know, if you want to go start a space company that the barriers shouldn’t be the regulations and the law, the barriers should be the technological innovation. So, we’re trying our best to put out tools that lower that barrier, making things accessible to companies that you know, they don’t have positive cash flow, yet. We’re very aware that the markets can contract it. And investment into commercial space is contracted right now. So, we’re doing what we can, we’re going to have a lot of tools come out if people want to go use the regulatory calculator, and they have ways they think it could be improved, or they have feedback. I welcome that feedback. And our contact information is, of course, on our website.

Eric White   And I am curious about, have you ever worked with clients who have said, you know, they’ve gotten that timeline that they had no idea about? And said, okay, you know what, this is just too much, we’re going to have to move on to something else. Has that been the case with maybe not even a client? But you’ve heard stories?

Bailey Reicheldt   Yeah, so a really obvious one for me is on the export control side. That’s where I spend a lot of my time. If someone tells me, hey, we want to hire this foreign person to come work with us on this program, and I tell them, Okay, we can get permission for them to have access to that controlled information, but it’s going to take about six months, a lot of times that that changes the equation of who they might hire, when they figure out that oh, this person would sit in pending regulatory approval to receive certain technology for six months before they could even start work. But, you know, we’ve actually we’ve pursued some more aggressive licenses, especially on the telecommunication side, and we’ve been able to turn things around much more quickly than we ever thought we would honestly so if we can find a way to turn licensing and talk to regulators fast if we can. If we think we have a shot. We’ll take the shot, but we’ve tried to be realistic with people too.

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