Viasat, Inc. (VSAT) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, or I guess it's afternoon, all of a sudden. We have a real treat for you. Mark Dankberg has spoken at several SmallSat Symposiums. I love the guy. He's -- he doesn't try and push Viasat, and it's a fabulous company, and he talks about all sorts of things to do with space. And today, he drags along Jim Bridenstine, who -- an old NASA administrator who has done a lot of other things. And I think they're going to talk about some really interesting things. Not necessarily what you want to hear, but some really interesting things. So thank you, gentlemen, for doing this, and it's over to you.

Well, thank -- test 1, 2. Yes, thank you so much for that intro. And just to be clear, I was not [ dragged ] here. I really wanted to be here. And Mark called and said, "Hey, what do you think about doing this?" I thought it would be fun. So thank you for having me and...

Oh, it's going to be -- I think it's going to be a conversation. And pay your attention to what he says.

Yes. Not quite. Not quite. So Mark, we wanted to talk today about space safety, which I know you've been a big leader on for a long time. As the head of NASA, of course, we had a lot of issues that we had to deal with regarding space safety, collision avoidance, astronauts on orbit, maneuvering the international space station. A lot of challenges regarding how many objects are in space, the growth of the number of objects that are in space, and of course, now being able to track more than we've ever been able to track before, a lot of challenges. One of the things that I saw that was kind of eye-opening. And of course, I've testified in the Senate since I've left NASA about this. When the FCC puts out a license for a constellation that's going to say it would be, say, 15,000 satellites. And when I say 15,000, I'm talking about a constellation of 5,000 satellites that those 5,000 satellites have a design life of 5 years. So you have to replenish them 3 times over the course of 15 years. So a total of 15,000 satellites, and the FCC says we're going to apply a percentage of those satellites that we know will be derelict, in other words, they can't reenter and they can't maneuver. And they say we're going to apply 1.5% to that number, which means out of 15,000 satellites, there's going to be 225 satellites that are, in fact, derelict. In other words, knowing that we're going to be putting objects in space that are, in essence, debris. So that -- I thought that was interesting. And then they said there's an aggregate collision risk for those 225 satellites, and that aggregate collision risk is 1 in 44.5. And I -- the more I think about that, that's a very high percentage of a collision risk when you consider the fact -- or the impact of what happens when a collision actually happens in space. 1 in 44.5 is a high percentage, considering the impact. Then what was interesting is the more you look into it, there was no consideration for the other 14,775 satellites that are maneuverable. There's a risk of collision among those, especially when you consider there's lots of lethal nontrackable debris out there, things that we can't see, but we know are there. It just seems like we are missing -- when it comes to space safety, we are missing a big chunk of the risk that is actually there, and satellites are launching into space. Now I know, obviously, Viasat is a company that has a keen interest in making sure space is safe. Tell me, how did you get involved in this? Obviously, I know you've been working on this for a long time, long before -- even back when I was in the House of Representatives. How did you get involved in this and why is it of interest to you?

Yes -- so yes, we are -- we're a space company, and we do multiple things in space. We do ground systems. We do payloads. So we're a technology provider and then we're an operator. But besides being an operator, we're a distributor, right? So we will -- we use our own satellites, but we also cooperate with many other satellite operators. And we do that at all orbits. So for instance, the first generation of Iridium, we did some of it. We did have the ground stations. Second generation, we did crosslinks, feeder links and the payload electronics. We've done ground stations for MEOs like O3b. We aggregate capacity in serving our customers from LEOs, MEOs GEOs. And we always -- we want to do that. So one of the things that has been kind of the key to our success is understanding what the constraints are in space and then designing systems that have optimum economic performance given those. So one of the things we're really interested in is what should the regulations be on space. And then -- and the thing -- the issue that you're getting at here is very, very important. It's that the FCC for like almost 4 years ago, came up with this notion of aggregate risk, which is exactly sort of the calculations you went through, which is when they look at it from an orbital debris mitigation's perspective or space safety perspective, when constellations were small, they had a notion of 8, it's okay for there to be a 10^-3 probability of a collision for a satellite that goes up. And when there are dozens or hundreds of satellites that's probably acceptable. But it should be obvious that if you're putting up tens of thousands at a time and each 1 has a 1 in 1,000 chance of collision, you're -- I mean, it's like the speed limit. If you put a speed limit of 35, you probably should expect people to go at least 35. So especially if the reliability of the satellite is a factor. Other -- maneuverability is a factor, people will probably design economically for that 10^-3. So they came up with this notion of aggregate. They published a notice of proposed rulemaking that said constellations need to have it, 1 in 1,000 aggregate collision probability, but then they haven't acted on it. And what is interesting in the license grant that you just described, they effectively set over 2% aggregate probability of collision, which is -- that's a little bit disappointing. And then also, the other big thing is, as you mentioned, there are many, many failure modes that can lead to -- not many, I mean, there's like 10 or 12 different failure modes. And all they really addressed was one, which is the probability that a nonmaneuverable satellite will be involved in a collision given the flux debris as it passively deorbits, which is a function of a number of things, but came -- they came up with this particular estimate for that particular constellation.

Real quick on the aggregate. When you talk about aggregate collisions, I think it's important to note, if you're launching 10,000 satellites and each satellite has 1 in 10,000 chance of collision, you're basically saying we're going to have a collision. And you -- so you have to get away from this idea of a satellite having a probability. You have to say the whole constellation has a probability. So on an FCC ruling that says there's going to be 225 derelict satellites and the probability of collision aggregate for those 225 is 1 in 44.5, again, that dismisses the other 14,775. It also doesn't take into account that there are lots of other constellations that want to be deployed in those same orbital regimes. And how do you think about -- obviously, there's a market here where we need competition in a free market. We need -- there's an international component here where we've got countries around the world that all want access to the most valuable orbital resources. How do we need to think about what is the limit to how much we can put in any orbital shell?

Yes, so -- I mean -- so I think -- I would think everybody that has an interest in space would be focused on this problem. Number 1 is you're competing with other systems, so what you'd like to know is what are the rules. And the other thing you'd like to know is not only what are the rules now, but what are they likely to be given the consequences of some of the things that you're putting up, right? It's like if you're going to try to finance a constellation that -- where you expect to have 10,000 or 20,000 satellites, are you really going to achieve the economic results with that if regulations ultimately reflect some of the realities that you're saying? So that's why we're so interested. And it should be -- the thing that you're bringing up is this notion of carrying capacity, right? And so I spoke about that before. Here in, I mean, NASA, the whole notion of what's called the Kessler Syndrome originated at NASA with Donald Kessler. And basically, the point of it is that, ultimately, debris interacts with itself to form more debris and that's what we're measuring in space. So what we're seeing now is that there's a rate of debris growth. Even if we didn't launch anything else, there would be a lot more debris in 50 years, in 75 years than there is now. What -- I think at around the 700 kilometer altitude, which is where there have been 2 collisions, that's the worst altitude and I think that sort of the consensus is that hundred-ish years from now, maybe 75 years from now, it's going to be a real problem with that altitude range. But that 75 or 100 years from now, there's a reasonable chance that we'll figure out some way to remediate it. But the problem is that it's exponential. And as you add more and more objects in there, the probability of collisions grow. And so what you really want to do is you want to look at not -- is you want to look at the derivative of that rate of debris growth.

So I -- and what I hear a lot from different people, not so much at NASA, but other places, I hear, number one, that low Earth orbit is self-cleaning. And therefore, it's not a problem at all. I hear that argument from time to time. I also hear that the Kessler Syndrome is so far off in the distance, it's not something we need to be worried about today. How do you respond to those?

Yes. So one -- on the self-cleaning orbits and that is exactly -- that it -- what that speaks to is this notion of passive decay. And that if you have a derelict satellite at, say, 500 kilometers, it will, depending on the solar cycles, decay in 2 to 5 or 6 years or something like that. But the problem is if there's a collision, the debris fragments that are created from that collision have very different decay properties of -- the fragments. And NASA is a great source of models for this. Some of the -- maybe 20% of the fragments will decay very, very quickly. But 80% will then be put into some distribution of orbit, some on the current orbit, some higher, some lower. And the area to mass ratio of those fragments is such that they won't decay for decades. So the notion of self-cleaning only applies if the satellite remains intact, okay, and has a given drag ratio. The -- and then the second thing you asked about was?

I hear that it's so far off in the distance...

Yes. So it is, I mean, right now. But the issue is, again, it's what affects the rate of that growth of debris. And if you know that, for instance, there's going to be these many satellites, and you can forecast stochastically the number of collisions, you know that the rate of debris is going to grow. So what's interesting about this license grant that you're describing is that one of the things that has happened, especially with the FCC in the past, is that an orbital debris mitigation plan was evaluated at application time. You apply, you describe these characteristics, they say, "Okay." What they realized here is while we're dealing with these numbers, that there was a failure rate, as you mentioned, that was assumed. Well, one of the questions is if the failure rate's worse, then the orbital debris problem is going to be worse. So the FCC said that they will monitor certain things like failure rate. And that the licensee needs to provide reports. It's not clear that they're actually going to achieve those. But what they're kind of starting to wrestle with is that not only -- should -- this not only needs to be done at application time, but over the life of the constellation because you want to know whether or not it's going to adhere to the assumptions that went into the calculations that you described.

So when I think about kind of the orbital debris environment that exists in any orbital shell, it is true that there will be decay and certainly, objects will come out of orbit. It is also true that if in the meantime, we're creating more debris, the question is what is happening faster. Are things coming -- is the self-cleaning happening faster or slower than the amount of stuff we're putting into space, whether it's debris -- tell me about -- and you mentioned the word "stochastically modeling" as opposed to -- explain for the folks here maybe that are not familiar -- okay, how do you think about that?

Yes. So basically, what's happening is, especially, for instance, at the 720 -- 700 kilometer altitude is the rate of new debris creation is higher than the rate at which debris is exiting the system. So that is -- that's what leads to this Kessler Syndrome. But it's relatively slow and it's about a 100-year process, okay? But as the amount of the debris particles increase, the chances that they collide with each other increases and then you get this effect where over time, it grows faster. Now as an example, if you look at what happened recently with the Russian ASAT test, that introduced 1,500-ish fragments. That's the estimate. Some of those are large enough to track. Most of them are not. So whatever the rate of new debris growth was prior to that, it's now different, right? So what you can do is if you have good estimates of the different causes of collisions, you can then pretty confidently factor those in and know that -- I'm just going to give you an example. If you said at 720 kilometers, you might have said, "Okay, hey, last year, the Kessler Syndrome -- I mean, we can define what that means exactly but it's 100 years off. This year, it's only 1 year later, it might only be 97 years off, right? And then if there's new debris particles introduced, fragments introduced, it starts coming closer." And so that -- what we think is quantitatively, you can use statistical analysis of all the forms of collisions to form pretty good estimates of this over time. And what you don't want to see is that, hey -- for instance, the National Science Foundation commissioned a study from MITRE at the 500-ish kilometer altitude. And what they found is 40,000 satellites, 256, 250 kilograms a satellite, 50-ish square meters of surface area that, that is unstable in 10 years. Within about 10 years, the rate of collisions grow so fast that it's irreversible.

So the -- so what -- when you're describing this, I'm thinking in my head, this sounds a lot like my experience with Fantasy Football where I've got a 95% chance of winning, and there's 20 minutes left in the game. And like 5 minutes later, I've got a 65% chance of winning and then I end up losing. So had I gone with the 95%, I'd have been in good shape. But things are changing, constantly changing. And so you have to be obviously aware of that when you're talking about something serious like orbit debris.

And some of those things are fairly deterministic. Like, for instance, the rate of introduction of new satellites or space objects in some of these orbits. Some of them are probabilistic. Stochastic's a fancy word for probabilistic. So you would just say, "Okay, hey" -- and going back to sort of the calculation that you started with is, hey, if you have hundreds of satellites that are decaying and you have a pretty good understanding of the debris flux density, which would come from NASA as an example, you can quite confidently predict with relatively acceptable variance what the collision rate will be. So you would think that you would factor those in and that is -- it's kind of this holistic life cycle analysis of collision and debris risk, not just application time. And what it does is it takes into account the performance of the constellation and the introduction of new constellations. And the thing that we're trying to get people to pay attention to is that if there's a limit, which this MITRE study did, we've done our own studies that show fairly similar results, that what everybody ought to be interested in is how are those constraints allocated and are they allocated equitably. That is does 1 operator take 90% of them? Or should an operator be granted 1%? Or in the -- there's some argument that in the -- this FCC license grant that, that particular constellation in itself is granted 2% of the allocation. And then by the way, there's 10x that many coming from the same operator, right? So that becomes a lot more of a concern, I would say, for other spacefaring nations.

So when we consider -- obviously, there is a limitation to how much we can put into any orbital shell. Once we make that determination as to what that limitation is -- and by the way, I would assume that, that limitation changes over time as technology and space situation awareness, space traffic management, as those things improve, the amount of things that you can put into any orbital shell will naturally change, which is a good thing. I mean that's how we move forward and progress. In the meantime, we're not there yet. We have a limitation as to how much we can put into any orbital shell. And the question has to come, how do we allocate access to these very valuable limited resources, which are orbital shells. And I think from the NASA perspective, I can tell you, everything we do at NASA is international. We can't simply, as an agency, make a determination that we're going to put a whole lot of satellites into one orbital shell without talking to our international partners on specific things. So there has to be an international piece to it. Once those allocations are made internationally, correct me if you think this is -- then there's a local piece to it where the United States of America has to have an allocation and then it has to be distributed. And it needs to be distributed not based on what wants to launch today, but we have to think about what does the future look like 5 years, 10 years, 15 years, 20 years from now and be smart, strategic about how we're allocating access to this very scarce resource. And I know everybody says, "Well, space is big." It is big until you have too many collisions. So tell me, how do you think -- as I'm talking about this, I'm thinking it sounds a lot like the ITU, for example, for geostation, which has been an extremely successful model for -- I mean, countries that are often at war with each other are actually working out how to work together at the ITU on orbital slots. How do you think about an -- how should all of that be allocated?

Yes. So right now, sort of one of the fundamental issues is a geosynchronous orbit, the ITU is -- think of it as a registry and a set of rules of the road. It deals with both the physical limits and constraints of geosynchronous orbit, that is the notion of slots is an example on boxes that you stay in as well as the spectrum ones. But for NGSO, for all NGSO orbits, the ITU only deals with the spectrum interference issues. So essentially, there is no registry around that. So that -- so as an example, what that would mean is you could have 2 constellations that file for exactly the same orbital trajectories, exactly the same [ shells, to use ] different frequency bands, and the ITU would say, "That's completely fine. There's no conflict there." So I think that one is, in reality, there is a conflict there. And so one of the things that we're advocating is that space agencies around the world come up with a common framework in which to evaluate these constraints. And then I think there -- I think it will take time for the UN to deal with it. But what's really interesting about NGSO, and this is a contrast to GSO, is that most NGSO constellations are inherently global. So you have -- so individual countries do have a lever to deal with this, and that is market access. So if they have -- and you think about it, [ a percentage is ] that if Europe or Japan or Brazil or any spacefaring nation said, "Hey, going above this amount of occupation of given orbital shells or" -- and remembering that the dispersion of debris covers many of these shells, right, so if they have a notion of here's the capacity, then they can form their own views about what's equitable.

So real quick, you're talking about using market access as leverage to compel responsible behavior in space?

Yes. It's an -- basically, we're really into open competition and competitive landscape. We like to compete. And so the idea would be that at the end, any system is landing or has access to a market at the pleasure of that country, but think of -- any spacefaring country is going to want the same treatment, multilateral agreements. So now we're in the domain of game theory and diplomacy. But I think that the notion of multilateral agreements, which is what works at GEO can be economically motivated in the near term. If -- and what we think is -- for countries to make rational decisions, what they should have is a sense of what is the capacity. What you'd want to be able to do is evaluate that in a heterogeneous environment. So this particular NSF study was, "Okay, let's evaluate this type of satellites at this altitude. This type of satellite at that altitude." What we were working on is, "Hey, how can I come up with a heterogeneous model that deals with different sizes of satellites and different altitudes, but comes up with a composite aggregate footprint?" And then a country can say, "Hey, I will grant market access to a system that in -- our collective opinions is equitable, and we might put" -- they don't have to deny access, but they may put constraints.

So real quick, I just want to make sure we're clear on this. So when we think about there's a limit to how much you can put into any orbital shell, and then you're saying it's not just based on the number of satellites, it's based on the size of those satellites?

Mass, cross-sectional area, reliability because that was an example of one the things that you put in.

So let's pretend for a second that you have a limitation of 1.5% of your satellites are going to be derelict in the FCC or maybe in the future, maybe there would be an ITU-type organization that grants that kind of license. What happens if you go above that? Like what -- how does the market respond to that? What should be the process?

Okay. Well, so there's 2 things. One is we want to know how the market responds, but the other thing we want to know is how physics responds, right? Because the failure mode of the physics is far worse than the failure mode of a regulatory environment, right? So what you'd want to do is understand the physics and stay away from them. But for -- as an example, what we're seeing is really interesting advances in orbital debris remediation, like debris removal. So one of the things you could -- one of the things we're wrestling with, and I know you've done a lot of thinking about this as well, is what are the business models around that. So one of the things, as an example, would be to say, "Okay, actually, in the absence of other information, I do care about reliability." And so inherently, I'd say they gave a budget like you described of 225. What they could say is, "Hey, as long as you stay under 225 derelict satellites, you're okay." So if you want to pay an orbital debris removal company, and what you've determined is that I can -- it's more economical for me to have poor reliability and then remove those failed satellites promptly. And that's more economical than making them more reliable, hey, why not? That seems fair, right? That's an example of a way to deal with that.

So you're talking about imposing a cost on going above your limit on how many satellites could be there?

Yes. And the -- and yes, that's this notion of like the tragedy of the commons where the thing the FCC said we should all be concerned about is large operators externalizing those costs. It'd be a market mechanism where the costs would be absorbed by the source.

So when you said operators externalizing those costs, we saw just -- the other day, we saw the Space Force announce through SpaceWERX that they wanted to have a new program called Orbital Prime, where they're going to stand up a tool to have companies tell them how to do orbital debris remediation, how to remove objects from space. And then -- and they're -- they will help fund those companies, and then they'll use those companies as a -- basically, as -- they will be a customer for orbital debris removal. The Space Force would be the customer. To me, that seems like that is what -- you described it as basically putting that -- externalizing that cost rather than internalizing that cost. So that's a cost now being borne by the American taxpayer, not necessarily by the entity that created the orbital debris to begin with. And the challenge there is a lot of the orbital debris is not created by American companies at all. Created by -- so there has to be a way, at the end of the day, to hold companies accountable for the orbital debris that they're creating. And across the board, so that they are incentivized to not create the debris. And when they do create the debit, then they're actually paying a cost to remove it. Is that...

Yes, yes. And so -- I mean there are some really important questions like, for instance, is it more valuable to remove small amounts of large debris or large amounts of small debris, right? So what we're suggesting is we can just aggregate all these models that exist, come up with what -- how each of those forms of debris at different altitudes contributes to the rate of net debris growth. And then you can basically put those constraints as an operating constraint on an operator, it says, "Hey, look, you had a collision. You created this much debris. But if you can remove it, it's kind of like carbon offsets. If you can remove an equivalent amount of debris from those orbits, okay, then we'll -- we won't put you in the penalty box, right?" So what you're doing is you can create economic incentives, you understand what the limits are. I don't think -- these things don't inhibit people from leveraging space. It just makes it actually way more likely that more people will be able to participate in space and that the economic incentives will be there to deal with every possible mechanism to keep it safe. That's kind of what we're thinking.

So -- and there are so many different challenges here. As a former member of Congress, I remember talking about space situation awareness and space traffic management and what agency is going to have responsibility for that activity. Obviously, the FCC doing it by default, but that's now been put into policy by Space Policy Directive-3 from the previous administration that it's going to be done at the Commerce Department. It's now into law. They've actually appropriated money for that, which is all good. But when we think about space situational awareness and space traffic management and the capabilities thereof and how to go about doing that, it seems like as fast as constellations are being launched today, we're -- we have an alligator that's about to eat the canoe, and we're focused on an alligator that's maybe 100 yards away. With the amount of debris that's being created, do you see SSA/STM as the solution? Or -- and maybe it's a future solution? Or do you see the whole remediation, creating the right business model, the right incentives for preventing a mitigation? How do you see that?

Yes. I think -- so here's the problem with space situational awareness is if you look at companies like Analytical Graphics or others that are forecasting the number of conjunctions that will result from the -- there have been -- the ITU -- application at the ITU for 1 million satellites in about the last year, okay? AGI has done an analysis for about 100,000 satellites in the 500, 600 kilometer range. And the number of conjunctions that they're forecasting is in the 10^8, 10^9 range as a -- and it depends on the distance that you define the conjunctions. Okay. So if you could make space situational awareness and traffic management so good that there's a 1 in a million chance -- 999,999x you do a maneuver, it's successful, you're still left with hundreds to thousands of collisions. So...

Just because of the volume of satellites?

Right. It's the -- so you just look at what are the probabilities and what are -- and how many chances do I have, right? And the other point I want to point is that people might say, "Well, what's the difference between a 10^-6 and 10^-5 probability?" Well, if you're an insurance company, right, or you're -- or you run a casino, those are huge swings, right? Those are real costs that [ people do ]. And like just yesterday, I think NASA responded to a pending application from the FCC for 30,000 satellites and they say, "Look, hey, there's consequences to this in terms of, hey, what if we -- on interplanetary missions, we have limited launch windows, what's the probability conjunction of being able to launch?" Now there are all these costs that are being externalized.

NASA put out a letter -- well, they sent a letter to the FCC regarding that constellation that you just brought up. And of course, NASA's -- the challenge that I had at NASA is becoming a lot bigger. And I just read this morning the letter. I don't -- it indicated -- I mean, if you just go down the list of the challenges, one of the things they said is, in that letter, increasing by fivefold the number of objects below 600 kilometers, which has a huge impact to all of NASA's missions, not just the International Space Station but Earth science and astrophysics and everything else. Increasing by fivefold the number of objects below 600 kilometers is a really big challenge. They also said -- I'm trying to think of the different points that they made. They talked about Earth science itself that when you're looking at the Earth and different parts of the spectrum, and there are objects that are going below that. There's sunglint. There's other forms of interference. It's already a problem, and they're going to increase drastically that problem. Then they mentioned the Hubble Space Telescope when you look up, 8% -- I didn't even know this. I used to run NASA. 8% of the images that we get from Hubble are obscured with human-made objects that prevent the image from being valuable, 8%. And they're talking about that this license is ultimately going to increase that by more than twofold, which makes that -- there's a cost on the Hubble Space Telescope. There's a big segment in there about, oh, goodness, planetary defense, for example. Like every planet -- like planetary defense is how we look for objects that might impact the Earth and what we might do to mitigate against those impacts. And every image from our planetary defense capabilities that are on Earth will have -- will be obscured. So there's real costs. And this isn't true of just this particular constellation that the FCC is considering. This is true for every constellation that we're going to see coming up in the future and how it impacts NASA, which, of course, impacts the American taxpayer. How are we going to deal with all of this? And by the way, this is just one constellation in one country. Then we start thinking about how many constellations in this country are on the drawing board, which you just mentioned. And then you think about the European Space Agency and China and Russia and Japan and all of the different activities that are going to be happening in low Earth orbit and how it impacts NASA. This letter from NASA doesn't include any of that. It only includes this one constellation for 30,000 satellites. This is a real challenge that I don't think is getting the attention that it needs as we move forward. And I think creating the right business model is going to be an important capability.

Yes. So that's what -- I mean, so I think that this notion of aggregate impacts that is assessing what can we support in space is important. It's very important to be quantitative because I think that we're kind of going through an awareness issue, but what we need to do is measure. And I think that the tools are in place to do that. The other thing that we really need is that those measurements be done by trusted objective parties. So one of the things we always get is, say, "Well, it certainly is" -- some of the LEO systems are sort of implying that anybody that objects anything they're doing is just afraid of them, right? And so we're an operator, maybe we're afraid of them? I don't think so. But certainly, it's a -- hey, if there's this interest -- this issue about conflict of interest. So I think one of the things that we want are trusted parties, it could be academic, it could be space agencies to go do the math themselves and to quantify it. And what I feel like is that if people are aware of the quantitative impacts of these and then say, "Well, what are the -- what are sort of -- what we could tolerate on a multilateral basis?" Because others besides the U.S. depend on space. And I think that it is pretty well accepted that the barriers to GEO were pretty high. The barriers to LEO are much, much lower. So you've got many, many more countries that are capable of launching cubesats and getting -- and driving value from them. So the -- I think that the number of countries that will be interested, and likewise, all the operators, you would think that kind of the people that are in this audience would be concerned about that as well. That's really what our focus is. And then trying to come up with kind of market-based mechanisms that will allow innovation. And hopefully, what you do is we get better at remediation. And maybe we can improve a 1 million chance of a collision to 1 in 10 million. You can start increasing the -- your ability to populate space.

When I -- when I was in the House Representatives, I advocated a lot for a market-based process by which to encourage space situation awareness and space traffic management. And part of that process was when you go through a payload review process to launch something into space, that process goes through the FAA office of commercial -- FAA AST. And that process, there should be a box where -- in my view, there should be a box where you check, where you say, "Hey, I have company that I have hired through a subscription to provide SSA/STM. And that company would have gotten a license to provide SSA/STM from the Department of Commerce, which would be in keeping with Space Policy Directive-3 and it would be in keeping with the -- what Congress has passed into law as far as Commerce Department regulating all of the debris issues that we're dealing with." But the idea would be that the company that's launching the Constellation would be the company that's paying the subscription for that space situation awareness and space traffic management. And creating that business model, I think, is an important concept. What you've described today is taking it a step further and saying, "If there is an object in space -- if you're creating a constellation and you're going to have derelict satellites that go beyond what the FCC has allocated, then you're going to have to pay a consequence for that. And the consequence will be paying the cost for the remediation of that or something -- the remediation of an equivalent amount of debris." These are all kind of market-based incentives that take it away from the tragedy of the commons and that gives it to the folks that are responsible for creating the constellations and the debris at the same time.

Yes. And so you can make trade-offs. You can say, "Hey, reliability cost me this much, remediation cost me that much, what makes more sense?" But what's happening now is, "Hey, if my reliability is bad and I'm not responsible, then of course, I'm going to externalize those costs. And hopefully, the government will fix it, right?" That...

Well, we are now standing between this audience and lunch. And I just want to say thank you for having me participate in this. And thank you for your leadership on these issues. I know there's a lot of people in this audience and watching online that are focused on this challenge that we have to rise to it or -- the consequence of not dealing with this correctly is something that I don't think any of us want to imagine. We have to get it right because once these wheels get set into motion, it's really hard to take it back.

Yes. And the other thing, and this is one of the most important parts of doing the quantitative analysis, and this is not a surprise if you understand the failure mechanism is if you can't forecast in the future, what you'll find is you get to it -- this is the definition of the Kessler Syndrome, you get to a point where, hey, everything -- it's like, hey, the guy that falls out of an airplane, his parachute doesn't work. And it's like, oh, I thought this was going to be really bad. But so far, it's okay, right? I mean -- but the problem is that the failure mode, you get to a tipping point where even if you don't launch anything and you use -- deorbit stuff as fast as you can, you still end up with that Kessler Syndrome. So we need to understand this quantitatively.

Yes. The goal is to make sure we never hit that tipping point. And so we've got to understand how much debris are we creating and how much is being removed, whether it's naturally or through the processes that we put in place. So anyway, it's great to be with you, and thank you all for having us here.

Yes. Thank you.