Who will compete with SpaceX? The last two and next two years.

[Jim]

1.  You mentioned SWOT mission, which is the most obvious example of US govenrment indirect support to SpaceX by paying an additional 50 M$ vs standard SpaceX commercial price to perform a very standard mission (SSO for a light payload). Providing spacecraft preparation and integration services and telemetry is just basic services provided by all service providers (they won't launch without the satellite onboard). Being Priced as non standard does not change the fact that it certainly does not cost 50 M$. Thus offering SpaceX high margin government contracts and allowing them to bid much lower for commercial missions in open competition.

2.  There are several other less extreme examples: TESS, GPS III-F2 & 3, STP 2 + NRO and  X37B missions where prices were undisclosed and probably very high. Maybe others that I am not aware of.

3.  Arianespace paid a contribution of around 150 M$ to fund the Soyuz pad in French Guiana (the only commercial launch pad built for commercial purposes in recent years for a comparable launch vehicle to Falcon 9) via a loan from the European Investment Bank. They also pay a fee of several M$ per year to ESA for use of CSG facilities (spacecraft processing, telemetry etc) for each Soyuz launch from French Guiana (between 2 and 4 per year).

How much has SpaceX been paying for their 3 existing launch pads at US Government launch sites ?

wrong on every count.
"The total cost for NASA to launch SWOT is approximately $112 million, which includes the launch service; spacecraft processing; payload integration; and tracking, data and telemetry support."

1. The total cost for NASA is not the money that Spacex gets.  spacecraft processing; payload integration; and tracking, data and telemetry support are done by other contractors such as Astrotech, AI solutions, Venicore, etc.   I will agree that the launch service cost is higher than commercial, but that is because NASA's integration timeline is longer, NASA requires more analyses, NASA requires more insight into production and processes, more documentation,

2.  No, TESS and GPS data are available.

3.  Spacex received no money from the government to build its pads.  They only leased the land from the government for $1 per year.  All the construction for the the three pads was paid for by Spacex.  If there was existing infrastructure at the pads that needed demolition, Spacex paid for it (SLC-4 and SLC-40 MSTs and LC-39A RSS)).  If existing infrastructure was useable, Spacex paid to modify it and now maintains it. 

  Spacex built their own payload processing facilities and has taken over some abandoned ones.  But they now run those facilities and the USAF or NASA are not involved.  As far as telemetry, Spacex has its own systems.  They do transmit to Air Force and NASA systems for safety and as a courtesy.


I want people to note that I am defending Spacex. 

[Jim]

Do the private launch companies at the Cape pay for non launch related services (Security, road maintenance, street lighting,...)?

The companies pay for everything within their pads and facilities. Common areas is paid for by the government.  The companies pay for extra services like security road blocks on launch day and such

[Lar]

I want people to note that I am defending Spacex. 

Noted, with thanks! Mike Jones needs to up his game a lot. We mods have very little patience for people who appear to be trolling...

ProTip: When Jim defends SpaceX against criticism, that criticism is highly likely to be COMPLETELY without merit. As here.

[Pipcard]

If SpaceX is going to have to artificially create demand (contrasted with natural demand from third-party customers) for a high-flight-rate fully reusable launch vehicle by launching thousands of satellites* for a low-latency internet constellation, will others have to do the same in order to compete?

How is this artificial? Launching the satellite constellation makes sense only if it earns money. Or if there is a well founded expectation to make money.

The third party customers are the wifi users -- as for all spacecraft, end users are normally not the spacecraft builder or operator.  Supplying the payload plus launcher is no different than supplying either one of those assets separately.

Note that SpaceX is assuming that demand will increase with lower costs/prices and building* launch capacity to meet that new demand.  If others want to support that new demand, they need to lower costs/prices and build capacity, too.

* Purely speculative investment, as was Ford's assembly line for auto-mobiles.

By artificial, I meant a launch service provider creating their own demand for the use of their launch vehicles. If this is how SpaceX will achieve >40 flights/year with a full RLV, will other launch providers have to copy that business model in order to stay alive, if the assumed economic elasticity for this RLV doesn't turn out to be high enough? I mean, this is SpaceX's constellation. Would they allow other providers to get a piece of the pie? Will Blue Origin, ULA, Arianespace, etc. have to design and launch megaconstellations of their own?

[Lar]

By artificial, I meant a launch service provider creating their own demand for the use of their launch vehicles. If this is how SpaceX will achieve >40 flights/year with a full RLV, will other launch providers have to copy that business model in order to stay alive, if the assumed economic elasticity for this RLV doesn't turn out to be high enough? I mean, this is SpaceX's constellation. Would they allow other providers to get a piece of the pie? Will Blue Origin, ULA, Arianespace, etc. have to design and launch megaconstellations of their own?

I think there are other constellation plans afoot and it is likely that Blue will get a big slice of at least one of them. That will suffice for Blue. I don't see them needing to operate a megaconstellation of their own. Bezos' ambitions do not extend as far as Musk so there isn't the need for nearly as much cash.

[Mike Jones]

Regarding indirect subsidy:

[...]
There are several other less extreme examples: TESS, GPS III-F2 & 3, STP 2 + NRO and  X37B missions where prices were undisclosed and probably very high. Maybe others that I am not aware of.

The GPS satellites are an excellent case, since they are going to the same orbit as GALILEO, which ESA launches.  And the prices ARE disclosed.

SpaceX has two GPS launches, for $83 and $97 million.  ESA bought 5 launches for $105 million each on Soyuz.  From this article:

The launch contract was worth 397 million euros -- about $525 million, or $105 million per flight.

So either SpaceX is giving the governement more than competitive prices, or ESA is subsidizing Ariane even more than the USA is subsidizing SpaceX.

Also, even a fat government contract is more risky than a subsidy, since you actually need to deliver.  Ask Airbus about the A400M contract.  They have long said that similar contracts were an indirect subsidy to Boeing.  But when they got such a contract, they actually lost money

I think that Galileo sats are launched by pairs on Soyuz, so the price per sat is around 52M$ in your example.

[guckyfan]

By artificial, I meant a launch service provider creating their own demand for the use of their launch vehicles. If this is how SpaceX will achieve >40 flights/year with a full RLV, will other launch providers have to copy that business model in order to stay alive, if the assumed economic elasticity for this RLV doesn't turn out to be high enough? I mean, this is SpaceX's constellation. Would they allow other providers to get a piece of the pie? Will Blue Origin, ULA, Arianespace, etc. have to design and launch megaconstellations of their own?

Assuming the constellation makes economic sense it is not by any stretch artificial demand.

Regarding letting other providers launch part of the constellation. Assuming there is a provider who can remotely match SpaceX prices, I have in another discussion actually suggested it might make sense to spread the launches of different constellations over different launch providers. So SpaceX could potentially launch satellites of another constellation and lets some of their satellites launch by another provider. It might well make sense to spread risk and business.

[Mike Jones]

1.  You mentioned SWOT mission, which is the most obvious example of US govenrment indirect support to SpaceX by paying an additional 50 M$ vs standard SpaceX commercial price to perform a very standard mission (SSO for a light payload). Providing spacecraft preparation and integration services and telemetry is just basic services provided by all service providers (they won't launch without the satellite onboard). Being Priced as non standard does not change the fact that it certainly does not cost 50 M$. Thus offering SpaceX high margin government contracts and allowing them to bid much lower for commercial missions in open competition.

2.  There are several other less extreme examples: TESS, GPS III-F2 & 3, STP 2 + NRO and  X37B missions where prices were undisclosed and probably very high. Maybe others that I am not aware of.

3.  Arianespace paid a contribution of around 150 M$ to fund the Soyuz pad in French Guiana (the only commercial launch pad built for commercial purposes in recent years for a comparable launch vehicle to Falcon 9) via a loan from the European Investment Bank. They also pay a fee of several M$ per year to ESA for use of CSG facilities (spacecraft processing, telemetry etc) for each Soyuz launch from French Guiana (between 2 and 4 per year).

How much has SpaceX been paying for their 3 existing launch pads at US Government launch sites ?

wrong on every count.
"The total cost for NASA to launch SWOT is approximately $112 million, which includes the launch service; spacecraft processing; payload integration; and tracking, data and telemetry support."

1. The total cost for NASA is not the money that Spacex gets.  spacecraft processing; payload integration; and tracking, data and telemetry support are done by other contractors such as Astrotech, AI solutions, Venicore, etc.   I will agree that the launch service cost is higher than commercial, but that is because NASA's integration timeline is longer, NASA requires more analyses, NASA requires more insight into production and processes, more documentation,

2.  No, TESS and GPS data are available.

3.  Spacex received no money from the government to build its pads.  They only leased the land from the government for $1 per year.  All the construction for the the three pads was paid for by Spacex.  If there was existing infrastructure at the pads that needed demolition, Spacex paid for it (SLC-4 and SLC-40 MSTs and LC-39A RSS)).  If existing infrastructure was useable, Spacex paid to modify it and now maintains it. 

  Spacex built their own payload processing facilities and has taken over some abandoned ones.  But they now run those facilities and the USAF or NASA are not involved.  As far as telemetry, Spacex has its own systems.  They do transmit to Air Force and NASA systems for safety and as a courtesy.


I want people to note that I am defending Spacex.

Good to learn from experts.

[macpacheco]

I think that Galileo sats are launched by pairs on Soyuz, so the price per sat is around 52M$ in your example.

GPS 2F launch mass = 1630kg
Galileo FOC launch mass = 732.8kg

As you can see, Galileo sats are nearly half the mass of GPS ones. In fact Galileo is now in a wave of yearly QUAD launches using Ariane V.
GPS has several military oriented features, including NDS (nuclear detonation system) and several military only signals.
GPS uses 6 orbital planes, while Galileo uses only 3.
Galileo is still undergoing its initial rollout.
GPS is long operational and being only replenished/modernized.
You're comparing Apples to Oranges !

I'll add to the chorus and tell you Mr Mike Jones, please go study up on facts before making such accusations. I got the launch mass numbers with 2 quick google searches.

[oldAtlas_Eguy]

To add to what is different for a US gov launch contract and a commercial one is the massive detailed reports required by the US gov. These include but may have more:

1- Cost report (usually in a specified gov format). Cradle-To-Grave which includes all sub contractors and the subs to the subs on every part that went into making the LV.

2- Testing reports (mainly the acceptance tests: electrical, vibration, load, etc) in the gov specified format. Cradle-To-Grave which includes all sub contractors and the subs to the subs on every part that went into making the LV.

3- Anomaly reports and repair/resolution/analysis to remedy the anomaly during manufacture and testing of parts in the gov specified format. Cradle-To-Grave which includes all sub contractors and the subs to the subs on every part that went into making the LV.

There are other reports.

Someone has to find/convert/perform contract mods to subcontractors plus pay them for the reports/data, and gather the reports from sub-contractors combining them into a single report. This takes manpower usually engineers because many items has to be unit converted even re-calculated to derive different values.

All of this is seemingly a $20M + cost on any government contract regardless of who the provider is or size of the payload. The reports are massive time consuming and labor intensive. Commercial customers do not care or want these reports. This $20M + value is supported by documentation by multiple providers difference between gov contracts and commercial ones.

Now who reads these reports. Sometimes no one unless there is a flight anomaly. Certification efforts use these same type of reports but also read them (usually the Aerospace Corp specialists for a given LV hired by the AF as a technical adviser and analyst). That is why it cost the AF $150M to do a certification of the F9. AF had to pay $60M for the reports plus pay Aerospace Corp to then read them.

[obi-wan]

An acquaintance at NASA Marshall once told me proudly of the time, during a shuttle mission, they discovered that the paperwork for the installation of a payload was incomplete. After the mission, a team suited up and went into the Orbiter Processing Facility, loosened the bolts, tightened them back to the proper specifications, and filled out all the paperwork with work inspector signatures and quality assurance stamps.

Then they unscrewed all the bolts and removed the payload.

[AncientU]

By artificial, I meant a launch service provider creating their own demand for the use of their launch vehicles. If this is how SpaceX will achieve >40 flights/year with a full RLV, will other launch providers have to copy that business model in order to stay alive, if the assumed economic elasticity for this RLV doesn't turn out to be high enough? I mean, this is SpaceX's constellation. Would they allow other providers to get a piece of the pie? Will Blue Origin, ULA, Arianespace, etc. have to design and launch megaconstellations of their own?

Assuming the constellation makes economic sense it is not by any stretch artificial demand.

Regarding letting other providers launch part of the constellation. Assuming there is a provider who can remotely match SpaceX prices, I have in another discussion actually suggested it might make sense to spread the launches of different constellations over different launch providers. So SpaceX could potentially launch satellites of another constellation and lets some of their satellites launch by another provider. It might well make sense to spread risk and business.

The provider would have to match their costs, not prices.  This is highly unlikely even now, but nearly impossible when Block 5 is flying regularly.  Another feature of vertical integration -- you don't have to keep a huge aerospace supply chain in business.

[AncientU]

By artificial, I meant a launch service provider creating their own demand for the use of their launch vehicles. If this is how SpaceX will achieve >40 flights/year with a full RLV, will other launch providers have to copy that business model in order to stay alive, if the assumed economic elasticity for this RLV doesn't turn out to be high enough? I mean, this is SpaceX's constellation. Would they allow other providers to get a piece of the pie? Will Blue Origin, ULA, Arianespace, etc. have to design and launch megaconstellations of their own?

Maybe a better way to see this demand is as an opportunity to enter the massive internet/broadband market... SpaceX is building low cost to orbit infrastructure because they think this is the missing element to routine spaceflight, going to Mars, etc. 

Just so happens that it also opens space some potentially crazy-profitable ventures like the non-GSO constellations, ConnX being just one.  (Recall the Google has been experimenting with methods for spreading broadband comms to the world... balloons, airships, etc.)  SpaceX is likely to be a big launch service provider in this market, even if they don't have a constellation of their own; they still may be, but since the potential profit in this trillion dollar market dwarfs launch services income, and SpaceX Mars plans aren't 'cheap', they've decided to dive into the deep end of this emerging market.  They are now becoming a satellite vendor (DoD interested in a dis-aggregated constellation?) and system operator.  Revenue projections dwarf launch services in just year two of operations.

They definitely aren't doing this to artificially support Falcon launch cadence!

Note: They will soon (3-5yrs?) have an exploration-class launch vehicle (born reusable), and be generating emerging market opportunities in that sector.  Luna, Mars, pick-your-destination...  Other launch vehicle suppliers will have to build their own exploration-class launch vehicles if they want to compete for some of this 'artificially' generated market.

[Coastal Ron]

You said that these contracts were won through competitive bids. This is partially true. Only ULA and sometimes Orbital ATK were allowed to bid as well...

If there are two or more bidders then that is competitive bidding. Period. You can't just wave away facts because you don't like them.

There are occasions where the U.S. Government will award a contract without competitive bidding (i.e. sole source contract), such as the recent X-37 award to SpaceX. But the government still negotiates the pricing by direct negotiation - and the U.S. Government has a lot of information to use in the negotiations since SpaceX is a known government contractor. However no-bid government contracts are rare for SpaceX.

Getting back to your original assertion, that SpaceX is subsidized by the U.S. Government, I hope the information everyone has provided has educated you on this subject. You are not the first person to assert such claims, but they have all been shown to be baseless.

[Pipcard]

Other launch vehicle suppliers will have to build their own exploration-class launch vehicles if they want to compete for some of this 'artificially' generated market.

The problem is that they're still stuck in that "there will never be enough demand" mindset. They are only thinking of markets that already exist.

[Robotbeat]

I just want to say something that's been on my mind relating to the previous discussions about "subsidies."

ULA receives/received a subsidy for launch infrastructure relating to keeping both Atlas AND Delta flying. BUT this is/was justified because they're the only ones with the required capability, profits are in line with expectations (not super high), and because the capability is critical to supporting national security operations. ULA would like to downselect to a single launch vehicle, which is unacceptable for national security reasons unless an alternative launcher exists in the market.

So as SpaceX comes online with Falcon Heavy and related vertical processing capability (and Vulcan comes online replacing Delta IV Heavy), the subsidy and the dual ULA capability (i.e. the Delta line) that it supports will disappear. ULA is not even really opposed to this, as they've been wanting to downselect to a single rocket line for a while.

ULA winning government bids to launch satellites is not a subsidy, and neither is SpaceX's winning bids.

[AncientU]

Other launch vehicle suppliers will have to build their own exploration-class launch vehicles if they want to compete for some of this 'artificially' generated market.

The problem is that they're still stuck in that "there will never be enough demand" mindset. They are only thinking of markets that already exist.

Sounds like a personal problem they have -- get over it or get steamrolled when the market emerges.

Note: They could be right... in which case, SpaceX will lose big. 

[Coastal Ron]

Other launch vehicle suppliers will have to build their own exploration-class launch vehicles if they want to compete for some of this 'artificially' generated market.

The problem is that they're still stuck in that "there will never be enough demand" mindset. They are only thinking of markets that already exist.

Sounds like a personal problem they have -- get over it or get steamrolled when the market emerges.

Note: They could be right... in which case, SpaceX will lose big.

SpaceX (i.e. Elon Musk) is not building the ITS for a market - it's doing it for a mission. A humanitarian mission so to speak, which is to make humanity multi-planetary.

Blue Origin (i.e. Jeff Bezos) is doing what they are doing for a similar type reason, which is move humanity out into space.

I suspect neither has enough resources to meet their goals without outside funding sources, which would be either payment for services rendered or donations. And in reality neither should have to fully fund their goals because if humanity really does want to be multi-planetary or to expand out into space then humanity needs to be some skin in the game.

SpacesX obviously has an advantage right now because no one else is doing reusable rockets, and so far SpaceX seems to have perfected recovery techniques, and is working on perfecting reusability techniques. Both of those should only improve over time, so for the next two years I don't foresee anyone being able to directly compete with SpaceX.

But even if no one can directly compete with SpaceX, that doesn't mean that the marketplace will gravitate towards making SpaceX a monopoly. It would not be in the marketplaces best interests to do that, so I think there will be a cap on how much business SpaceX can gain from the current demand curve. But SpaceX and others are trying to figure out how to take better advantage of reusability, so we'll see areas of demand can be created soon.

[gospacex]

ULA receives/received a subsidy for launch infrastructure relating to keeping both Atlas AND Delta flying. BUT this is/was justified because they're the only ones with the required capability, profits are in line with expectations (not super high), and because the capability is critical to supporting national security operations. ULA would like to downselect to a single launch vehicle, which is unacceptable for national security reasons unless an alternative launcher exists in the market.

Yes, ELC contract. Still in force, will expire in 2019.

So as SpaceX comes online with Falcon Heavy and related vertical processing capability (and Vulcan comes online replacing Delta IV Heavy), the subsidy and the dual ULA capability (i.e. the Delta line) that it supports will disappear. ULA is not even really opposed to this, as they've been wanting to downselect to a single rocket line for a while.

Well, no. ULA publicly opposed termination of ELC. Who would support losing a gift of $800M each year?

[meekGee]

ULA receives/received a subsidy for launch infrastructure relating to keeping both Atlas AND Delta flying. BUT this is/was justified because they're the only ones with the required capability, profits are in line with expectations (not super high), and because the capability is critical to supporting national security operations. ULA would like to downselect to a single launch vehicle, which is unacceptable for national security reasons unless an alternative launcher exists in the market.

Yes, ELC contract. Still in force, will expire in 2019.

So as SpaceX comes online with Falcon Heavy and related vertical processing capability (and Vulcan comes online replacing Delta IV Heavy), the subsidy and the dual ULA capability (i.e. the Delta line) that it supports will disappear. ULA is not even really opposed to this, as they've been wanting to downselect to a single rocket line for a while.

Well, no. ULA publicly opposed termination of ELC. Who would support losing a gift of $800M each year?

The precise details totally miss the point here.  Yes, SpaceX got paid for government work, and you can argue forever whether it was "subsidy" or not.

The point is how that money figures into the overall company story, and here is where ULA/Arianne and SpaceX diverge.

ULA and Arianne basically said "cool!" and got addicted to it.  The entire structure of these companies is absolutely reliant on big daddy paying for the bills, and with that addiction, cost structures go out the window.

SpaceX basically said "cool!" and went out and developed even more stuff that will allow them to not only compete in the commercial market, but also transform it.

That's also why the overall "ROI" on the government's "investment" in SpaceX is so high.  (Looking at it holistically - how much development occurred, and for how many dollars)   There's just no comparing the two.