Ryan Mack

Associate Editor

Loyola University Chicago School of Law, JD 2027

 

In 2024, a Japanese commercial satellite maneuvered to within 15 meters of a derelict piece of debris floating in low Earth orbit, a feat never accomplished by a private company – until now. Astroscale Holdings, operating under a contract with the Japan Aerospace Exploration Agency (JAXA), executed a precise series of approach maneuvers around a completely unresponsive object. This was a genuine technological milestone in the commercial space industry, and just a preview of an entire industry that existing legal frameworks were not built to govern or foresee.

The structural gap in U.S. space regulation

The commercial on-orbit servicing industry — known as In-Space Servicing, Assembly, and Manufacturing, or ISAM — encompasses everything from extending a satellite’s operational life, proximity inspection, debris removal, hardware repair, and in-space manufacturing. The projected global ISAM market will reach the billions by 2031, yet cohesive regulatory infrastructure needed to govern this complex market does not currently exist. The commercial space regulatory framework within the U.S. was designed around three siloed activities, each designated to a different agency. The Federal Aviation Administration (FAA) handles launch and reentry licensing, the Federal Communications Commission (FCC) manages space spectrum allocation for commercial satellites, and the National Oceanic and Atmospheric Administration (NOAA) licenses private remote sensing systems. This framework made reasonable sense when commercial space simply meant launching a communications satellite into a fixed orbit and transmitting data back to Earth. However, it is less sensical for a spacecraft that launches, maneuvers to another object, docks with it, repositions it, and then moves on to the next client. Currently, no statutory authority exists for any U.S. agency to regulate a spacecraft’s activities once in orbit and outside those three agencies’ mandates, which means the most complex and highest-risk phase of many commercial missions operates with the least oversight.

The international legal layer adds obligation without providing clarity. And the domestic gap is compounded by the fact that international law, while not silent on ISAM, does not provide the specificity that commercial operators need. The 1967 Outer Space Treaty provides a basic foundation covering state responsibility, liability, and jurisdiction over space objects, and those principles technically apply to ISAM servicing. But the Treaty was written for governments launching satellites, not private entities physically docking with and maneuvering each other’s spacecraft. It offers general principles where the industry needs specific rules. Without shared international standards, each country interprets that obligation differently, producing a patchwork of national rules that may conflict with one another at its foundation.

The liability picture is equally unsettled. The Liability Convention of 1972 holds launching states liable for any damage caused on Earth’s surface, but for damage caused in low orbit, that standard shifts to fault-based liability, meaning that the harmed party bears the burden of proving the other spacecraft was at fault. In a scenario where a commercial service provider is physically attached to a client’s satellite and something goes wrong, the existing framework has no clear answer for which party or country was at fault. Industry stakeholders consistently flag apportioning liability and the transfer of operational control as the two issues that create the most compliance uncertainty in ISAM transactions, and it is not hard to see why.

The regulatory response: promising steps and persistent gaps

The United States has recently begun to address this underlying regulatory issue, which has accelerated considerably within the last year. In August 2025, President Trump signed Executive Order 14335, directing the Secretary of Commerce to propose a new authorization process for space activities not explicitly covered by existing domestic law. In March 2026, the Office of Space Commerce released its response: a proposed “Space Commerce Certification” that would create a single voluntary authorization pathway for novel space activities, that replaces the current patchwork of parallel agency review with a single streamlined process featuring firm decision timelines and a presumption of approval. Meanwhile, the FCC had been updating its rules to specifically account for ISAM orbital missions. These are real developments, but until a unified federal framework is formally adopted, service providers and operators must still navigate multiple overlapping agency processes.

Internationally, the picture is one of constructive but fragmented progress. The United Kingdom ran a first-of-its-kind regulatory sandbox in 2024 and 2025, bringing together three leading orbital servicing companies to simulate a real licensing scenario that produced more than 60 recommendations. Other countries, including France, Brazil, and Japan, have enacted or updated national laws to expressly cover in-orbit activities.

The European Union (EU) proposed its Space Act in 2025, introducing mandatory obligations for operators of critical space infrastructure, though it falls short of harmonizing ISAM servicing licensing and liability rules across EU member states. Each jurisdiction is writing its own rules, on its own timeline, using its own definitions, all of which creates intense regulatory complexity for any operator working across borders.

What comes next and what the law still owes the industry

The Space Commerce Certification, if adopted, would be the most consequential reform to U.S. commercial space authorization in decades. Its core proposition, a single opt-in process with defined timelines, light-touch national interest commitments, and coordinated interagency review, directly address the fragmented environment that has made novel space activities extremely difficult to authorize. For regulatory compliance professionals advising ISAM service providers and operators, that kind of predictability is considered highly valuable. But voluntary domestic certification solves only the domestic authorization piece. Scaling these missions globally requires something that does not yet exist: mutual recognition between countries of each other’s licensing decisions, and binding international standards on allocating liability when something goes wrong. A Space Commerce Certification cannot tell a French satellite operator who is liable when an American service provider damages their asset.

Future missions like ADRAS-J2, planned for launch in 2027, will be even more operationally complex and will raise several legal questions. The 1967 Outer Space Treaty and 1972 Liability Convention were negotiated between superpowers racing to plant flags in space. They were not designed for private entities autonomously capturing a tumbling piece of debris that belongs to no one. The commercial space industry has built technology faster than both domestic and international law can reasonably follow. Catching up can no longer be seen as optional; it is one of the defining regulatory challenges of the coming decades.