Space Capitalism Has a Permission Problem
Overcoming the regulatory "tragedy of the anticommons" in space
The space economy is booming. The Space Foundation reported this month that global space activity reached $686 billion in 2025, a 12% jump in a single year. Commercial revenue, at $544 billion, made up nearly four-fifths of the total. More exciting still, the fastest growth came from the newest lines of business. In-space servicing and manufacturing grew 23% last year. Lunar activities grew 43%. Combined with the recent blockbuster SpaceX IPO, the verdict of markets is clear: space is open for business.
But there’s a danger that regulatory problems could hinder future growth. The sectors growing fastest today are precisely the ones where regulatory ambiguity would be costly tomorrow. Can the boom continue? Yes, but only if Washington completes the work it started last summer. The right place to start is the new Space Commerce Certification program from the Office of Space Commerce (OSC).
Fragmented and opaque regulatory authority is a major problem for today’s space companies. The Federal Aviation Administration (FAA) licenses launch and reentry and runs an interagency review of every payload. The Federal Communications Commission (FCC) licenses radio spectrum and has used that hook to impose orbital-debris rules. OSC licenses remote sensing by private operators. New space activities often cross multiple jurisdictions, leading to red-tape holdups, or even total stoppage. And for the newest activities, such as satellite servicing, orbital data centers, and lunar resource extraction, no agency has clear jurisdiction at all.
Yet under the 1967 Outer Space Treaty, the U.S. government must authorize and supervise its citizens’ activities in space. A mission nobody can approve is a mission that can’t proceed without risk of violating treaty obligations. OSC’s director, Taylor Jordan, told Congress this month that U.S. regulations do not offer a “clear path to ‘yes’” for novel activities and instead “risk trapping our industry in an endless interagency maze.”
Economists will immediately identify this as an anticommons problem. It’s the mirror image of the better-known commons problem. When nobody can exclude anyone from a valuable resource, it gets overused. That’s the tragedy of the commons, and it’s the reason Earth orbit is getting cluttered: every operator enjoys the benefits of a launch while spreading the collision risk across everybody else. But too many excluders can be just as bad as too few. When several parties have an independent veto, a valuable resource goes unused. The result is economic gridlock and foregone wealth. Each agency can say no, or simply say nothing. Meanwhile, valuable assets sit idle, grounded by policy rather than gravity.
President Trump’s Executive Order 14335, signed last August, told the Commerce Department to design an authorization process to avoid orphaned space missions. In March, OSC delivered its proposal, the Space Commerce Certification. A company would file one application and undergo one coordinated interagency review, with a presumption of approval and a decision required within 120 days (180 in hard cases). Any agency that objects must put its concern in writing, link it to an enumerated ground such as national security or treaty compliance, and show that nothing less restrictive would work. The proposal is music to space capitalists’ ears: generalized concerns “shall not, standing alone, prevent certification.” While there’s no such thing as permissionless innovation in space, clarifying and streamlining the permission structure is clearly beneficial.
This is the most promising solution yet to the tragedy of the anticommons in space. The goal isn’t abolishing regulatory oversight but concentrating it enough to give it coherence and predictability. Under the proposal, regulatory vetoes would be costly, specific, and time limited.
The chief drawback is a potential lack of durability. The executive order that launched this process can always be revoked by a subsequent administration. The FAA and FCC are invited, but not required, to accept certification in place of their own reviews. Legislation could overcome both shortcomings. Congress came close to enacting mission-authorization legislation nearly a decade ago and let it drop. It should finish the job now: codify the certification, the deadlines, and the presumption of approval.
But we shouldn’t let the perfect be the enemy of the good. This is an important step towards regulatory certainty, which helps companies raise capital, buy insurance, and sign customers for long-term space missions. Celestial investments are about as irreversible as investments get, and regulatory risk is just as big a tax as technical failure.
Commerce is now moving towards White House approval, with pilot applications expected afterwards. Get the regulation right and the space economy will continue to see double-digit growth rates. Get it wrong and the fastest-growing industries of the coming decade will idle on the pad, waiting for approval that will likely never come. Markets have done their part. It’s time for the regulators to do theirs.