This panel consists of Jim Muncy of Polispace, Jim Dunstan (lawyer for t/Space), Randall Clague of XCOR and George Nield of the FAA. These are some of the people largely responsible for developing the current regulatory regime as it has evolved in the past couple years. Dunstan is the chair.

Format is short presentations, with a follow-on roundtable discussion.

Dunstan describing the underlying precepts of launch regulation. Question is how do we get from SpaceShipOne, with a well-informed test pilot, to a cruise ship on which one can take one's family to space. Issues: amount of risk that society will allow individuals to accept, and the overall legal regime. We currently treat space differently from other activities in terms of allowable casualty rates. We've lost a million people on highways in the past quarter century, and a thousand a year in aviation. We've killed 0.56 passengers per year in space over that period. Autos and aviation have been trending downward, while space has long periods of no accidents with a couple blips of seven deaths at a time.

We could build cars that are ten times as safe, but they would get four miles to the gallon and cost a quarter of a million dollars a piece, so we make the tradeoff. In 1918, airplane reliability was 90%, yet we allowed people to fly them and delivered airmail on them. In 1929 we adopted the Warsaw convention, limiting airlilne liability, when we had a passenger fatality rate of 45 people per million miles flown. We apparently decided to allow a lot of risk in this field, because we decided that air travel was important. Currently, we don't seem to think that space flight is important enough to accept a similar level of risk.

Several different models for spreading risk: no-fault model, to encourage activity; "negligence" regime, another auto model, and used in domestic aviation; strict liability, with damage cap via international conventions (international aviation); strict liability with insurance (current domestic launch business); strict liability, period (international space flight regime, due to 1967 Outer Space Treaty and 1972 Liability Convention). The latter treaties make governments responsible for anything launched from their jurisdiction. That's the end of the brief overview.

George Nield follows up to point out that the Commercial Space Launch Act of 1984 (and amendments since, including last year's) was passed specifically to address the treaty obligations, and the FAA license is the instrumentality that implements the act. Reiterates from morning talk that they have to maintain a balancing act between safety and a viable industry.

Jim Muncy notes that a year ago, this conference was on the Queen Mary, and at that time they were in the middle of negotiations with Congress on last year's launch amendments act. Says that there have to be two different kinds of risk regimes: one for uninvolved parties, for whose safety the federal government is accountable. The other one is involved persons (passengers, and crew) assuming a known level of risk for a benefit from the activity, in which a negligence regime applies rather than a strict liability one. A year ago some in Congress wanted to make it clear that while there would be some differential between these two regimes, they also wanted to protect the people in the vehicles, and couldn't accept that you had to let people learn how to build the vehicles before they could be regulated as aircraft are today. Shuttle has only flown a little over a hundred times, and each event was very expensive, and it still isn't safe after many billions of dollars and many years. We can't know what's safe until we go through a "barnstorming" era, though one more safety conscious than the earlier aviation one.

We have to fly to learn, and we can't regulate people out of being able to fly and make money, which is a necessary activity to learning how to fly safely (just as we did over decades with aviation). Our position last year was that we would rather have no legislation than legislation that required in principle that we had to ensure safety of passengers. The legislation passed last year allows, but does not require, the FAA to start to pass passenger-related regulations after a period of time, to allow lessons learned to be incorporated, while still allowing companies and people to fly. He thinks that the FAA is doing a good job so far.

Jim Dunstan asks George Nield to walk us through what the process has been and will be on the new rules to come out.

He says that from his perpsective, there were four outcomes: put administration and Congress on record of supporting private human spaceflight as a good thing; established an informed-consent regime as the one in which we will initially fly passengers, distinct from the uninvolved public; introduced experimental launch permit, to make it easier to allow launches without the issuance of a full launch license, which is much more onerous, allowing easier research and development activities in a manner analogous to an airworthiness certificate; and finally, AST had to go off and implement regulations for the experimental certificates and passenger flight for revenue. Initially, they're guidelines, which will be followed by a Notice of Proposed Rulemaking in December and regulations in June of 2006. The current guidelines are available at the the AST web site. They'll be taking public input on these guidelines now and on the proposed rules after December when the NPRM comes out. Comments are encouraged, and can be provided electronically. They've had little feedback so far, and they think and hope that this is because the current guidelines are pretty good.

Question for XCOR--do they expect life insurance companies to have exclusions for flight as passengers? Answer is that they probably already do, since the activity would be in the same class as general aviation that already is excluded in general.

Muncy points out with regard to lawsuits by passengers or families that cross waivers should be required as part of indemnification (the current legal regime for satellite launches), but the current legislation didn't retain that feature for passenger flight. But the government is not guaranteeing the safety of passengers, and it's hoped that this will be a strong enough message to discourage notions that passengers weren't flying at their own risk.

Break now.