When Congress authorized private aircraft owners to carry the U.S. mail in 1925 under the Kelly Air Mail Act, it commercialized aviation and eventually helped give the nation supremacy in aviation that is unrelinquished to this day.
A national policy announced Thursday to encourage private investment in space is apparently aimed at the same kind of lofty goal, but it will be decades before a large and profitable economic sector in space is developed, experts say.
In the meantime, space exploration and utilization will depend heavily on government support to absorb development costs and provide a financial base to pay for the huge overhead costs of running a space program.
"I feel the new policy is a very constructive step, in principle," said Peter E. Glasser, a commercial space expert at the Arthur D. Little consulting firm in Cambridge, Mass. "What will have to be elucidated is, what does this mean in practice? Are there funds to accomplish some of the ambitious goals the President has laid out before us?"
The space policy includes a 15-point plan to encourage private investment in space activities, including such big-ticket items as privately owned launch facilities and the availability of orbiting space shuttle tanks for use as research or storage vessels.
But few experts foresee the emergence of a large new industry in the near future. The multibillion-dollar communications satellite industry is the only major commercial space venture, and it is now nearly 25 years old.
The Reagan Administration policy announced Thursday calls for the funding of a private mini-space station, which would provide leased facilities for industrial activities in space. Seventy percent of the station's volume will be government operated.
The problem analysts foresee is that nobody has demonstrated a profitable and technical need of any significance for production in space.
"Everybody and his brother has been through here trying to borrow money for a space venture," said Joseph E. Campbell, vice president of the Paine Webber investment firm. "There is no venture that I am aware of in which the revenues can pay for the full average cost of the investment."
As a result, Paine Webber has declined to participate in such ventures. Campbell said that, without government subsidies or support for the fixed costs of a space venture, such as the huge costs of funding launch vehicles and pads, commercial ventures do not appear feasible yet.
"Everything in space is enormously expensive," he added. "So whatever is produced there will be very high value and things that are very high value usually have the government behind them. The commercialization of space is not real because the government will always be there."
The products that have been most often cited for space industrialization include perfect ball bearings, microspheres, electronics crystals and unique pharmaceuticals. But analysts have questioned the need for all of these products.
Pharmaceutical Idea Dormant
The most precise ball bearings now go into nuclear missile guidance systems and those systems may be using laser gyroscopes before long. Even with Earth-made bearings, those guidance systems cost an astounding $6 million each.
Moreover, a highly touted "electrophoresis" experiment by McDonnell Douglas to produce pharmaceuticals aboard the space shuttle several years ago resulted in a writeoff against profits of $12.1 million in 1986. The program is more or less dormant as a result of the space shuttle grounding after the 1986 explosion that destroyed the shuttle Challenger.
Despite such near-term disappointments, experts were heartened by the long-term potential of the new policy. Some believe that space will the economic battleground of the next century.
"The Western world is unaware that the Soviet Union is planning to build an economic empire in space," said Glasser, the Arthur D. Little vice president.
Wolfgang Demisch, an analyst at the Union Bank of Switzerland, believes the new policy was launched on a weak political footing.
"It is late in the life of the Administration to set a new course," Demisch said. "The Administration is embracing NASA at a time when it would be better for NASA to be seen as nonpolitical."
In addition, the Administration has been blocking some promising areas of commercial potential. The Pentagon has blocked efforts by news organizations to obtain high-resolution photographs taken by U.S. satellites, for example.
"The Russians are currently selling much higher-resolution photographs to the news media than anything our free democratic government is willing to sell," Demisch said. "I find that incongruous."
Much of the new policy was merely a formal reiteration of steps taken in the aftermath of the Challenger explosion. The space shuttle fleet was to have been the sole means for launching all U.S. spacecraft, but the Challenger accident created a bottleneck that forced the government to throw most commercial launches off future manifests.
Orders for Launches
As a solution to that problem, the Reagan Administration opened the launch business to private carriers. So far, three U.S. rocket manufacturers have booked orders for more than two dozen commercial launches.
McDonnell Douglas has orders for five commercial Delta launches; Martin Marietta has commitments for 19 commercial launches with its Titan III rocket, and General Dynamics has four firm orders and four options for commercial launches by its Atlas Centaur rocket.
"We are off to a successful start," said Jack Winfrey, McDonnell Douglas senior manager for new business development. "The only concern we have is downstream when we compete in the international market against launch vehicles that are government subsidized, such things as (the French rocket) Ariane."