The introduction of SpaceX to the commercial launch marketplace was widely considered a positive development for increasing access to space. However, well before launch is possible, other expensive and complicated processes need to be completed. The process of manufacturing and testing a new satellite can cost hundreds of thousands of dollars – and that’s before the additional costs of launch.

For some smaller companies and entrepreneurial startups simply looking to put a payload into orbit, these costs can be prohibitive – especially if their product or solution requires multiple payloads across multiple satellites. This is where hitching a ride on a CondoSat can become an attractive alternative.

A Faster, Easier Way to Get to Space

According to Dafni Christodoulopoulou, a Satellite Industry Analyst at Analysys Mason, “A CondoSat is a satellite in which the party that owns the satellite and the company that manufactures and owns the payloads are not the same company. In this arrangement, the mission payloads and the bus don’t belong to the same companies. The payload owners effectively lease space on the bus to the payload operator.”

While the idea of one company integrating its payload into another company’s spacecraft – often referred to as a “hosted payload” - is not new, CondoSats take the concept to a new level by integrating numerous payloads from multiple different companies on a single satellite.

The adoption of CondoSats has become more widespread and adopted over the past half-decade due to a burgeoning space economy filled with entrepreneurial companies looking to access orbit. However, advancements in satellite manufacturing are also making it easier for the companies involved to interoperate.

“I think standardization, especially standardized buses, has helped drive CondoSat adoption,” said Christodoulopoulou. “Verticalization in some of these companies is also contributing. The CondoSat operator handles the manufacturing of the standardized buses and the integration of the payloads. They may even have contracts with launch service providers. This is all making the process easier and faster.”

As a result, the CondoSat arrangement has become a viable alternative to space that not only lowers costs for the payload owner but also decreases complexity and accelerates their plans to put payloads in orbit. "[The CondoSat] setup lowers the barriers to entry by sharing costs and infrastructure, making it an effective and economical way for companies to get into space," said Boeing Space Mission Systems Vice President Michelle Parker.

It also enables them to leverage the experience and expertise of more established satellite operators and manufacturers. As Shoaib Iqbal, the Co-founder and CEO of Esper Satellites, an Earth Observation (EO) company building and launching hyperspectral infrastructure, explained, “We had to ask ourselves, do we start hiring space systems engineers and build our own satellites, do we have a third party build us a dedicated satellite or do we go with a CondoSat concept where we still get all of the capability by sharing a much larger spacecraft with multiple different payloads?”

“We decided CondoSats were the best option for us,” he continued. “We still get to operate our payload as if it was on our own satellite, but we get to fly on a satellite bus operated by a provider that has done this before.”

While Esper Satellites and many of the other CondoSat customers are leveraging these shared satellites for EO payloads, there are many different types of payloads with numerous disparate use cases being integrated into CondoSats.

“Many of the CondoSat providers would say that they can host pretty much any payload that fits within the standardized bus,” said Christodoulopoulou. “While EO appears to be the key application for them, I’ve seen some [payloads for] science missions, situational awareness and navigation being integrated into CondoSats.

The variety of payloads and use cases on each CondoSat actually creates another benefit for startup satellite companies leveraging this shared satellite model: Having other, different payloads on the same satellite opens the door to other capabilities and services that could be useful for these companies and their customers.

“You have access to capabilities beyond just your payload that can complement the primary objective of your company’s mission. For example, let’s say we’re flying our hyperspectral payload on a CondoSat with another EO sensor that is not a hyperspectral one. We could potentially use imagery from both at the same time,” said Iqbal. “We’ve had exposure to many computing payloads, which have enabled us to process our data. We’ve been able to access numerous complementary EO payloads. There have even been experimental inter-satellite communication links available to us if we wanted to try them out.

While CondoSats are clearly a more economical way for startup companies, government agencies, and other organizations to get payloads into orbit, they’re also a relatively new trend. As such, there are still questions that arise regarding operating regulations and liability. With multiple parties relying on the capabilities delivered by a single spacecraft, who is liable should something go wrong?

The Small Print

Regulations can be a tricky question when it comes to satellites in orbit, since no one nation owns or is responsible for the entirety of the space domain. However, the same can be said for some areas of the sea and air domains – providing some precedent for determining which regulations apply to satellites.

“Under international law, the jurisdiction of the state of registry - the flagging state, you could say - extends to the flag of the CondoSat. That’s the foundational principle,” explained Dr. Michael Mineiro, a Senior Counsel in the Space Law & Policy Practice at the law firm, Akin Gump Strauss Hauer & Feld LLP. “It’s very similar in aviation or maritime. If you have a boat out in the ocean, it’ll be flagged by a specific nation. That nation will have legal authority and regulation, and that nation’s domestic laws will apply as appropriate within the context of activities conducted on that vessel. In principle, it’s the same in space.”

However, there is the very real possibility that some of the parties involved in a particular CondoSat could be headquartered in different countries. What rules and regulations do a CondoSat follow if an American company owns the satellite itself, but the payloads are owned by companies in other countries?

“Right now, once again, this is really unprecedented, so it’s possible that different states will have different practice regimes heading into the future where they will register individual payloads or objects on a CondoSat as an independent space object for jurisdiction and control purposes,” said Mineiro. “I’ve not seen that yet in private practice, but the general rule is the CondoSat is flagged by a country, that country has jurisdiction and control over the CondoSat and its payloads, and you’ve got to follow their rules.”

While the precedent would appear to dictate that the entire CondoSat is held to the rules and regulations of the flagging nation, there are other questions about liability should anything go wrong with the satellite or should there be financial damages to any of the parties involved with the CondoSat.

The U.S. government has strict rules about liability and insurance during the launch phase that are enforced by the U.S. Department of Transportation (DOT).

“Back in the 80s, when it was decided that the United States wanted to promote and facilitate a private space launch industry, it was also recognized that the hazardous nature of a launch would be potentially challenging to all the parties involved if they were all open to suit without qualification,” Mineiro explained. “So Congress passed a law that is still on the books, and the DOT provides regulations to execute that law, which essentially means everyone involved on the launch or on a licensed re-entry is subject to a mandatory cross-waiver risk liability regime. And that has worked pretty darn well for about 30 to 40 years.”

Unfortunately, those rules are gone as soon as the satellites are in orbit.

“Once the launch is over and the launch provider has dropped the CondoSat off, it’s greenfield,” Mineiro continued. “There is no mandatory requirement under U.S. law that those parties enter into any sort of liability, risk management regime. The parties are essentially free to contract with each other.”

So who is liable if one payload on the satellite damages another, or if one payload damages the satellite itself? If any of those somewhat unlikely things happened, it would ultimately come down to the terms and conditions laid out in the agreement between the companies. And there is little precedent for what those should look like.

“There’s no mandate right now. There’s no legal association or standards association that has ever promulgated standard terms and conditions for CondoSats,” said Mineiro. “So what’s happening, in practice, is each one of these platform owner-operators is figuring this out themselves and presenting their proposed solution to each one of their potential customers, one at a time.”

However, this is an area where time and experience could play a factor – helping the industry to identify areas where contract terms and conditions could improve and work towards an industry standard.

“Where is this going to go? I think there will be enough practice and exposure in the markets that serve these multiple-use platforms in space that a practice standard will develop -- essentially market-wide terms and conditions,” Mineiro said. “There may or may not be a lawsuit that exposes weaknesses in how terms and conditions are drafted, but eventually, the in-house counsels and outside counsels and other legal practitioners will figure out the most rational way to balance risk.”

While the industry continues to work its way towards balancing risk through trial and error, there will continue to be innovation and advancement in the CondoSats themselves. The demand for access to space is too high, and the opportunity too great for the CondoSat concept to not continue to grow and evolve.

“The flexibility of CondoSats opens up numerous growth opportunities. They can support multi-mission capabilities and adapt to various customer needs,” said Parker. “We see potential for expanding into new orbits and satellite sizes, further broadening the use cases.”

And, as Dr. Mineiro laid out, that is ultimately a positive thing.

“It’s really important to recognize that the innovation occurring in the commercial space industry, including with CondoSats, is a good thing. Period. We want innovation. We want people to think about creative ways to make space less expensive and more affordable,” he said. “We need to recognize that space is inherently risky in some ways. It’s a very harsh environment. It has its challenges. As the community evolves its practices and thinks through what’s best, it needs to continue to have the inclination to innovate and have creativity and not stifle that.”

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