Experimental Permits for Reusable Suborbital Rockets, 17001-17024 [E7-6194]

Agencies

• Federal Aviation Administration
• DEPARTMENT OF TRANSPORTATION

[Federal Register Volume 72, Number 66 (Friday, April 6, 2007)]
[Rules and Regulations]
[Pages 17001-17024]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-6194]


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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Parts 401, 404, 405, 406, 413, 415, 420, 431, and 437

[Docket No.: FAA-2006-24197; Amendment Nos. 401-5, 404-4, 405-3, 406-4, 
413-9, 420-3, 431-2, 437-0]
RIN 2120-AI56


Experimental Permits for Reusable Suborbital Rockets

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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SUMMARY: The Federal Aviation Administration (FAA) is amending its 
commercial space transportation regulations under the Commercial Space 
Launch Amendments Act of 2004. The FAA is establishing application 
requirements for an operator of a manned or unmanned reusable 
suborbital rocket to obtain an experimental permit. The FAA is also 
establishing operating requirements and restrictions on launch and 
reentry of reusable suborbital rockets operated under a permit.

DATES: These amendments become effective June 5, 2007.

FOR FURTHER INFORMATION CONTACT: Randy Repcheck, Office of Commercial 
Space Transportation, Systems Engineering and Training Division, AST-
300, Federal Aviation Administration, 800 Independence Avenue, SW., 
Washington, DC 20591; telephone (202) 267-8760; facsimile (202) 267-
5463, e-mail randy.repcheck@faa.gov. For legal information, contact 
Laura Montgomery, Senior Attorney, Office of the Chief Counsel, Federal 
Aviation Administration, 800 Independence Avenue, SW., Washington, DC 
20591; telephone (202) 267-3150; facsimile (202) 267-7971, e-mail 
laura.montgomery@faa.gov.

SUPPLEMENTARY INFORMATION:

Availability of Rulemaking Documents

    You can get an electronic copy using the Internet by:
    (1) Searching the Department of Transportation's electronic Docket 
Management System (DMS) web page (https://dms.dot.gov/search);
    (2) Visiting the FAA's Regulations and Policies web page at https://
www.faa.gov/regulations_policies/; or
    (3) Accessing the Government Printing Office's web page at https://
www.gpoaccess.gov/fr/.
    You can also get a copy by sending a request to the Federal 
Aviation Administration, Office of Rulemaking, ARM-1, 800 Independence 
Avenue SW., Washington, DC 20591, or by calling (202) 267-9680. Make 
sure to identify the amendment number or docket number of this 
rulemaking.
    Anyone is able to search the electronic form of all comments 
received into any of our dockets by the name of the individual 
submitting the comment (or signing the comment, if submitted on behalf 
of an association, business, labor union, etc.). You may review DOT's 
complete Privacy Act statement in the Federal Register published on 
April 11, 2000 (Volume 65, Number 70; Pages 19477-78) or you may visit 
https://dms.dot.gov.

Small Business Regulatory Enforcement Fairness Act

    The Small Business Regulatory Enforcement Fairness Act (SBREFA) of 
1996 requires the FAA to comply with small entity requests for 
information or advice about compliance with statutes and regulations 
within its jurisdiction. If you are a small entity and you have a 
question regarding this document, you may contact the person listed 
under FOR FURTHER INFORMATION CONTACT. You can find out more about 
SBREFA on the Internet at https://www.faa.gov/regulations_policies/
rulemaking/sbre_act/.

Authority for This Rulemaking

    The FAA's authority to issue rules regarding space transportation 
safety is found under the general rulemaking authority, 49 U.S.C. 
322(a), of the Secretary of Transportation to carry out 49 U.S.C. 
Subtitle IX, chapter 701, 49 U.S.C. 70101-70121 (Chapter 701). Also, 
the recently enacted Commercial Space Launch Amendments Act of 2004 
(the CSLAA) mandates this rulemaking through section 70105a, which 
creates the FAA's new permit authority, and section 70120, which 
requires that this rulemaking be complete by June 23, 2006. If the FAA 
does not issue a final rule by December 23, 2007, Congress prohibits 
the FAA from issuing any permits for launch or reentry until the final 
regulations are issued.

I. Background

    Chapter 701 authorizes the Secretary of Transportation and, through 
delegations, the FAA's Associate Administrator for Commercial Space 
Transportation, to oversee, authorize, and regulate both launches and 
reentries of launch and reentry vehicles, and the operation of launch 
and reentry sites when carried out by U.S. citizens or within the 
United States. 49 U.S.C. 70104, 70105, 70105a; U.S. Federal Aviation 
Administration, Commercial Space Transportation Delegations of 
Authority, N1100.240 (Nov. 21, 1995). Chapter 701 directs the FAA to 
exercise this responsibility consistent with public health and safety, 
safety of property, and the national security and foreign policy 
interests of the United States, and to encourage, facilitate, and 
promote commercial space launch and reentry by the private sector. 49 
U.S.C. 70103, 70105, 70105a.
    On December 23, 2004, President Bush signed into law the Commercial

[[Page 17002]]

Space Launch Amendments Act of 2004 (CSLAA). The CSLAA changes current 
law in several significant ways. One such change, which establishes an 
experimental permit regime for manned and unmanned developmental 
reusable suborbital rockets, is the subject of this rulemaking. The FAA 
is implementing other terms of the CSLAA in a companion rule, ``Human 
Space Flight Requirements for Crew and Space Flight Participants'' 71 
FR 75616 (Dec. 15, 2006).
    A permit provides an alternative to licensing for operators of 
reusable suborbital rockets. The CSLAA defines a suborbital rocket as a 
vehicle, rocket-propelled in whole or in part, intended for flight on a 
suborbital trajectory, and the thrust of which is greater than its lift 
for the majority of the rocket-powered portion of ascent. 49 U.S.C. 
70102. To be eligible for an experimental permit, a reusable suborbital 
rocket may only be flown for the following purposes:
     Research and development to test new design concepts, new 
equipment, or new operating techniques,
     Showing compliance with requirements to obtain a license 
under Chapter 701, or
     Crew training before obtaining a license for the same 
design. 49 U.S.C. 70105a(d).
    The reusable suborbital rocket must also be flown on a suborbital 
trajectory, which the CSLAA defines as the intentional flight path of a 
launch vehicle, reentry vehicle, or any portion thereof, whose vacuum 
instantaneous impact point (the location on Earth where a vehicle would 
impact if it were to fail, calculated in the absence of atmospheric 
drag effects) does not leave the surface of the Earth. 49 U.S.C. 70102.
    On March 31, 2006, the FAA published a notice of proposed 
rulemaking (NPRM) containing proposed requirements for operators of 
experimental reusable suborbital rockets. Experimental Permits for 
Reusable Suborbital Rockets, 71 FR 16251 (Mar. 31, 2006). In the 
notice, the FAA proposed part 437, which contains requirements for 
obtaining and operating under an experimental permit. The FAA also 
proposed changes to existing regulations to reflect the agency's new 
authority to issue permits.

II. Description of Final Rule and Discussion of Comments

    The FAA received comments from 12 entities, including aerospace 
companies, associations, individuals, service providers, and other 
agencies of the U.S. Government. Aerospace companies who provided 
comments include Blue Origin, LLC (Blue Origin), Masten Space Systems 
(Masten), the Personal Spaceflight Federation \1\ (Federation), 
Rocketplane Limited, Inc. (Rocketplane), and XCOR Aerospace (XCOR). The 
following associations, individuals, and service providers also 
commented: Beyond Earth Enterprises (Beyond Earth), Paul T. Breed, Air 
Line Pilots Association International (ALPA), the National Association 
of Rocketry, Spaceport Associates, SpaceShot, Inc. (SpaceShot). The FAA 
also received consolidated comments from Tripoli Rocketry Association, 
Experimental Rocketry of the Pacific, Stratofox Aerospace Tracking 
Team, and a number of individuals from those organizations (Tripoli).
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    \1\ The Federation is a non-profit trade association consisting 
of companies whose business involves or will involve commercial 
human space flight. The Federation provided consensus comments on 
the NPRM and consists of the following entities: Air Launch, 
Armadillo Aerospace, Bigelow Aerospace, Mojave Spaceport, 
RocketPlane Limited, Inc., Scaled Composites, Space Adventures, 
SpaceDev, Space Explorations Technologies Corporation (SpaceX), The 
SpaceShip Company, XCOR Aerospace, the X PRIZE Foundation, and 
Virgin Galactic.
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    In general, the commenters supported the proposed requirements, but 
with several suggested changes to what the FAA proposed in its NPRM. 
Permit requirements and the comments addressing them are discussed in 
section A below.\2\ Changes to other regulations as proposed in the 
NPRM are discussed in section B.
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    \2\ The FAA is adopting the following sections without 
modification from what it proposed in the NPRM: Sec. Sec.  437.1, 
437.9, 437.13, 437.15, 437.17, 437.27, 437.29, 437.31, 437.35, 
437.37, 437.39, 437.41, 437.59, 437.75, 437.81, 437.83, 437.87, and 
437.93. Sections 437.27, 437.29, 437.31, 437.33, 437.35, 437.37, 
437.39, and 437.41 require that an applicant demonstrate 
satisfaction of subpart C safety requirements by providing the FAA 
with operational safety documentation. These requirements remain the 
same as proposed in the NPRM, except for Sec.  437.33, which was 
modified to be consistent with Sec.  437.61.
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A. Part 437--Experimental Permits

1. Eligibility for an Experimental Permit
    Section 437.5 contains the eligibility requirements for an 
experimental permit. As proposed in the NPRM, the FAA will issue a 
permit for the launch or reentry of a reusable suborbital rocket only 
for research and development, demonstrating compliance with FAA license 
requirements or crew training.
a. Reentry
    A suborbital rocket may engage in reentry.\3\ For most suborbital 
launches, whether the flight entails a reentry will not matter from a 
regulatory perspective. The FAA will authorize the flight under a 
single license or permit, implementing safety requirements suitable to 
the safety issues involved. Recognizing suborbital reentry matters for 
two reasons. First, if a suborbital rocket is flown from a foreign 
country by a foreign entity into the United States, that entity may 
require a reentry license or permit from the FAA, depending on whether 
the planned trajectory of the rocket includes flight in outer space. 
Second, a permanent site that supports the landing of suborbital 
rockets may now be considered a reentry site depending, once again, on 
whether the planned trajectory reaches outer space.
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    \3\ Historically, the FAA has treated the whole of a suborbital 
operation as a launch because it did not obtain reentry authority 
until 1998.
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    Blue Origin notes that use of ``reentry'' to describe descent of a 
suborbital vehicle entails a change in FAA's regulatory terminology. 
The FAA previously took the position that suborbital rockets do not 
``reenter'' and are not ``reentry vehicles.'' This change is made 
necessary by the CSLAA. As acknowledged by Blue Origin, the CSLAA 
describes suborbital rockets as reentering. See 49 U.S.C. 70105(b)(4). 
Congress made clear that a suborbital rocket can ``reenter'' for 
purposes of licensing or permitting.
    Blue Origin stated that treating a suborbital mission in part as a 
``reentry'' creates definitional inconsistency under Chapter 701. In 
particular, it points to the definition of ``reenter'' and ``launch.'' 
Reenter means ``to return or attempt to return, purposefully, a reentry 
vehicle and its payload, crew, or space flight participants, if any, 
from Earth orbit or from outer space to Earth.'' 49 U.S.C. 70102(13). 
Blue Origin stated that a suborbital reusable launch vehicle (RLV) is 
neither in ``orbit'' nor in ``outer space.''
    It is not necessary to reach orbit to be in outer space. Outer 
space has yet to be defined, but is commonly understood to mean 
something more than orbit. Although a suborbital rocket does not reach 
the velocity necessary to orbit the Earth, the vehicle can reach 
altitudes sufficient to be considered outer space. With respect to the 
term ``launch,'' the FAA proposed in the NPRM that for a suborbital 
RLV, ``flight ends after vehicle landing or impact on Earth, and after 
activities necessary to return the reusable suborbital rocket to a safe 
condition on the ground end.'' Blue Origin pointed out that this 
definition fails to account for ``reentry.'' The FAA agrees, and now 
defines launch to end ``after reaching apogee if the flight includes a 
reentry, or otherwise after vehicle landing or impact on Earth and 
after activities necessary to return the reusable suborbital rocket to 
a safe

[[Page 17003]]

condition on the ground.'' This definition thus accounts for the two 
types of suborbital rockets: those that reenter and those that do not. 
Because Congress defines reentry as, in relevant part, the return of a 
reentry vehicle ``from Earth orbit or from outer space to Earth,'' a 
suborbital rocket that reaches outer space reenters as part of its 
mission. Suborbital rockets that do not reach outer space are treated 
as just launching and landing.
    Lastly, Blue Origin stated that this change has other regulatory 
implications, particularly for financial responsibility. These 
implications have been covered in a companion rulemaking on human space 
flight and financial responsibility 71 FR 75616 (Dec. 15, 2006).
b. Amateur Rocketry
    Tripoli Rocketry Association requested that any amateur rocketry 
project of its members that exceeded the thresholds for amateur rocket 
activity be covered under the experimental permit regime. To that end, 
Tripoli suggested that the FAA include ``non-profit rocketry research, 
education, recreation, and sporting competition projects'' as eligible 
for a permit under Sec.  437.5. Paul T. Breed would like the 
experimental permit rules to apply to non-reusable expendable flights, 
including launches of sounding rockets. The FAA is bound by the 
restrictions of Congress, which plainly defined the eligibility 
requirements by statute. Whether any particular rocketry project can be 
covered under an experimental permit regime depends on whether the 
rocket in question is a reusable suborbital rocket, and whether the 
purpose of the flight program meets the requirements of Sec.  437.5. 
The FAA thus cannot accommodate Tripoli's request to make recreation 
and sporting competition projects eligible for permits. Similarly, 
Congress determined that expendable launch vehicles, including sounding 
rockets, are not eligible for a permit.
c. Foreign Entities
    Spaceport Associates recommended that the FAA re-examine the 
applicability of FAA space transportation regulations to U.S. citizens 
or U.S. entities outside the United States. It believes that the 
requirement for FAA authorization might prevent foreign operators from 
using American spacecraft or personnel in creating their own domestic 
space tourism operations. This, in turn, would reduce the market 
opportunity for U.S. manufacturers of suborbital spacecraft. This 
requirement is governed by statute. Under 49 U.S.C. 70104(a), a U.S. 
citizen must obtain a license or permit to launch, regardless of 
whether he does so outside the United States or not.
d. Single License or Permit
    For operators of vehicles that have characteristics common to both 
rockets and aircraft, the CSLAA's definitions of suborbital rocket and 
suborbital trajectory establish the circumstances under which the 
operator will be required to conduct vehicle flights under an 
experimental permit or launch license, rather than through a special 
airworthiness certificate in the experimental category (referred to as 
experimental airworthiness certificates for the remainder of this 
discussion). The FAA noted in the NPRM that for some vehicles an 
operator could conduct early test flights, including glide tests or 
flights under jet power only, under a special airworthiness 
certificate, before transitioning to an experimental permit. 71 FR 
16252. The Federation requested that the FAA further emphasize that 
reusable suborbital rocket operators and developers will not be 
required to obtain an experimental airworthiness certificate to obtain 
a permit or license.
    The Federation is correct that reusable suborbital rocket operators 
and developers will not be required to obtain an experimental 
airworthiness certificate to obtain a permit or license. However, an 
operator cannot fly under a permit or license unless its vehicle is a 
reusable suborbital rocket or otherwise subject to Chapter 701. A 
suborbital rocket is a vehicle, rocket-propelled in whole or in part, 
intended for flight on a suborbital trajectory, and the thrust of which 
is greater than its lift for the majority of the rocket-powered portion 
of ascent. 49 U.S.C. 70102(19). If an operator plans to fly its vehicle 
as a suborbital rocket, the operator must fly it in accordance with the 
requirements of an experimental permit or license.
    The Federation also asked that the FAA clarify that it will not 
require someone to obtain a permit to obtain a license. A permit is not 
a prerequisite for a license. Nonetheless, data obtained while 
operating under a permit may be useful in applying for a license.
2. Scope of an Experimental Permit
    Section 437.7 states that an experimental permit authorizes launch 
and reentry of a reusable suborbital rocket, as proposed in the NPRM. 
The authorization includes pre- and post-flight ground operations. A 
permit could be issued for a launch, a reentry, or both a launch and a 
reentry.
    Paul T. Breed asked that the FAA distinguish between manned 
vehicles and unmanned vehicles. The requirements do make these 
distinctions. Part 437 of 14 CFR applies whether a vehicle is manned or 
unmanned. If a person is on board a permitted vehicle, 14 CFR part 461 
contains added requirements.
3. Duration of an Experimental Permit
    As proposed in the NPRM, Sec.  437.11 provides that an experimental 
permit will last one year from the date of issuance. Spaceport 
Associates and Blue Origin questioned whether one year was long enough 
to complete a flight test program, and proposed a duration of 18 months 
or longer.
    As the FAA has learned in its licensing program, combining a 
specific end date for an authorization with the ability to renew allows 
the FAA and a vehicle operator to re-examine the assumptions that went 
into and the requirements arising out of the earlier determination. The 
FAA chose a one-year permit because of the dynamic nature of a flight 
test program. A flight test program will likely result in design and 
operational changes. The FAA also based the term on experimental 
airworthiness certificates used for aircraft, consistent with 
Congress's desire for the FAA to model experimental permits after 
experimental airworthiness certificates. An experimental airworthiness 
certificate for research and development and showing compliance with 
regulations is effective for one year or less after the date of 
issuance. 14 CFR 21.181(a)(4).
    The duration of an experimental permit does not need to be longer, 
because a permittee may obtain a renewal. If the permittee has been 
operating in compliance with the regulations and terms and conditions 
of its permit, it should not be difficult to obtain a renewal. To avoid 
any disruption to the schedule, a permittee should apply for renewal at 
least 60 days before its permit expires, in accordance with 14 CFR 
413.23.
4. General Application Requirements for Obtaining an Experimental 
Permit
    Section 437.21 requires an applicant to make demonstrations and 
provide information in order to obtain a permit. These requirements 
include demonstrating compliance with part 437; providing enough 
information for the FAA to analyze the environmental impacts associated 
with a proposed launch or reentry; providing information for the FAA to 
conduct a maximum probable loss analysis under part 440; complying with 
human space flight requirements under part 460; and making each 
reusable suborbital rocket

[[Page 17004]]

to be flown available to the FAA for inspection. Section 437.21 also 
states that if an applicant proposes to use any launch vehicle, reentry 
vehicle, safety system, process, service, or personnel for which the 
FAA has issued a safety approval under part 414 of this subchapter, the 
FAA will not reevaluate that safety element to the extent its use is 
within its approved envelope.\4\
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    \4\ The FAA can issue a safety approval for (1) a launch 
vehicle, reentry vehicle, safety system, process, service, or any 
identified component thereof; or (2) qualified and trained 
personnel, performing a process or function related to licensed 
launch activities or vehicles. A safety approval is an FAA 
determination that the defined safety element, when used or employed 
within a defined envelope, parameter, or situation, will not 
jeopardize public health and safety of property. 14 CFR 414.3.
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a. Private Use Launch Site
    In 2000, the FAA announced that a launch licensee who operated a 
private site for its own launches did not need a license to operate a 
launch site. The FAA announced in the NPRM that it had to revisit this 
issue for both licenses and permits. The FAA proposed that a reusable 
suborbital rocket operator operating a private launch site that 
contains permanent facilities or supports continuous operations would 
have to obtain a launch site operator license in accordance with part 
420.
    Several commenters objected to the FAA's proposed change in policy. 
According to Blue Origin, the Federation, and XCOR, the FAA should 
impose requirements related to the operation of a launch site through a 
launch license or permit. They objected not to the safety issues 
themselves but to having to satisfy part 420 in its entirety.
    The FAA has decided against adopting the proposed change in this 
rulemaking. Today's rule addresses launches conducted under a permit 
rather than a license, and the agency believes the rulemaking should be 
limited to those differences. Because the proposed change in policy 
would apply to all private launch sites, the FAA has determined that 
any change in policy is more appropriately addressed by a separate 
rulemaking. The FAA will consider the comments submitted to the NPRM in 
evaluating whether a change to part 420 is merited.
b. Use of Safety Approval
    Section 437.21(c) states that the FAA will not evaluate those 
portions of an application from an applicant who proposes to use any 
reusable suborbital rocket, safety system, process, service, or 
personnel for which the FAA has issued a safety approval under part 
414. Although the FAA did not obtain any comment regarding safety 
approvals, the FAA is adopting this provision as part of 437.21 to 
clarify that an applicant for a permit may rely on a safety approval 
obtained under part 414.
c. Inspection
    As proposed in the NPRM, under Sec.  437.21(c), an applicant must 
make its reusable suborbital rocket available to the FAA for inspection 
before the FAA issues an experimental permit. XCOR agreed with the 
requirement because it believes someone should ``come out and kick the 
tires and make sure the vehicle isn't a piece of junk.'' Blue Origin 
recommended that the FAA conduct this inspection before flight rather 
than before issuing a permit to promote regulatory certainty and 
predictability, and because the focus of a permit is on the safety of 
launch and reentry as opposed to certification of the vehicle design. 
Such an approach, according to Blue Origin, would allow vehicle 
operators to obtain regulatory approval for a vehicle prior to paying 
the expense of building the vehicle. The FAA has decided against Blue 
Origin's approach, because a determination on the safety of the vehicle 
is difficult to make before the safety systems have been built and 
verified. Also, the FAA will inspect the vehicle to ensure compliance 
with application representations.
5. Program Description
    Section 437.23 requires an applicant to provide a program 
description. Under Sec.  437.23(b)(1), a permit applicant must describe 
all reusable suborbital rocket systems, including any structural, 
flight control, thermal, pneumatic, hydraulic, propulsion, electrical, 
environmental control, software and computing systems, avionics, and 
guidance systems used in the reusable suborbital rocket. In response to 
a comment from the Federation, this requirement marks a slight change 
from what the FAA proposed in the NPRM. The requirement recognizes, by 
the inclusion of ``any'' before the different kinds of systems, that 
not all vehicles will have all systems.
    The Federation recommended that FAA describe the intent of the 
program description, and clarify the expected level of detail required. 
As suggested by the Federation, the FAA agrees that the description 
required for any system is a general overview or basic description of 
the system. However, when showing compliance with the containment 
requirements of Sec.  437.31, an applicant will need to provide a more 
detailed description of any system that has been identified in its 
hazard analysis as safety critical.
    Requiring a description of ``software and computing systems,'' 
rather than just software systems as proposed in the NPRM, clarifies 
that computer system hardware, which includes physical devices that 
assist in the transfer of data and perform logic operations, are 
included in the description of vehicle systems. Computing systems may 
include such hardware as central processing units (CPU), busses, 
display screens, memory cards, or peripherals, and may include stand-
alone systems, such as off-the-shelf digital controllers.
6. Flight Test Plan
    Section 437.25 requires an applicant to provide a flight test plan. 
Under Sec.  437.25(a), an applicant must describe any flight test 
program, including the estimated number of flights and key flight-
safety events. For each operating area, an applicant must also provide 
the maximum altitude it expects the reusable suborbital rocket to 
reach. This represents a clarification of what the FAA originally 
proposed. In the NPRM, the FAA proposed to require an applicant to 
describe the maximum altitude without reference to the operating area.
7. Rest Requirements
    As proposed in the NPRM, Sec.  437.51 requires that a permittee 
comply with crew rest rules. The rules require that vehicle safety 
operations personnel not work more than 12 consecutive hours, more than 
a total of 60 hours in the 7 days preceding a permitted activity, or 
more than 14 consecutive work days.\5\ ALPA agreed that prescriptive 
duty limits are suitable and necessary to mitigate the likelihood of 
human error related to fatigue. ALPA did not agree, however, that the 
rules adequately or accurately incorporate principles established by 
current scientific research and literature.
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    \5\ In the NPRM, the FAA, as XCOR pointed out, mistakenly said 
``and'' rather than ``or.''
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    ALPA cited a June 1987 Report of the Presidential Commission on the 
Space Shuttle Challenger Accident (The Rogers Report). The Rogers 
Report noted that a number of authoritative scientific studies have 
shown: (1) That multiple strings of 11 to 12-hour workdays produce 
worker fatigue, negatively impact worker effectiveness, and present a 
threat to public safety; 2) that night work and shift changes produce 
sleep loss and fatigue by disrupting workers' circadian rhythms; and 
(3) that shift workers often require a week or

[[Page 17005]]

more to adapt to new shifts, especially if one of the shifts is a night 
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shift.

    ALPA stated that the rules fail to mitigate against these known 
risks.
    First, the proposed rule would allow a string of workdays for 
vehicle safety operations personnel, with shifts each up to 11 hours 
and 59 minutes, without any required rest period at all. Second, 
requiring a ``rest'' period of 8 hours after a 12-hour shift simply 
fails to provide an adequate period for sleep, increasing the 
likelihood of both acute and accumulated or chronic, fatigue. 
Further, the combination of 12 hours on and 8 hours off would tend 
to generate schedules for safety sensitive personnel based on a 20-
hour clock, rather than the 24-hour clock, potentially disrupting 
the workers' circadian rhythms and introducing a significant 
potential for fatigue related error. Third, the proposed rule fails 
to provide any mechanism to compensate for the time period required 
for workers to readjust to changes in the time of day for 
commencement of shift work. This lack of time to adapt to a new 
sleep/wake cycle is a factor that could lead to safety critical 
tasks being performed during a worker's physiological window of 
circadian low, a factor that has been scientifically shown to be a 
major and recurring factor in industrial accidents.

    Although the FAA is adopting the requirements as proposed, it does, 
however, intend to give ALPA's comments and this issue the study and 
attention they deserve. The FAA would need to assess the cost and 
operational effects of these changes. The crew rest rules in part 437 
are similar to those in part 431 that apply to the licensing of 
reusable launch vehicle missions. The rest rules were originally based 
on crew rest requirements imposed by the Air Force at Federal launch 
ranges. Moreover, the FAA cannot impose more rigorous requirements 
without providing additional notice and seeking additional comment.
8. Pre-Flight and Post-Flight Operations
    Section 437.53 requires a permittee to establish a safety clear 
zone and verify that the public is outside that zone before and during 
any hazardous operation. Masten Space Systems recommended that the FAA 
clarify how this requirement applies to post-flight ``safing'' where 
the vehicle lands, shuts off its engines, and then waits some period of 
time before it restarts its engines and takes off again. A permit is 
not required for operations between flights. Under Sec.  437.53, ``pre-
flight'' operation begins when a permittee prepares a reusable 
suborbital rocket for flight and ``post-flight'' operation ends when a 
permittee returns the reusable suborbital rocket to a safe condition 
after flight. In the X Prize Cup's Lunar Lander Challenge and Rocket 
Racing League examples provided by Masten, post-flight activities would 
begin once the vehicle is no longer in flight. Pre-flight activities 
would begin when preparations for the next flight meet the four-part 
test addressed in the scope of launch. However, operations between 
landing and take-off may all be covered under a permit if the vehicle 
is never safed.
9. Hazard Analysis
    Section 437.55 requires a permittee to identify and characterize 
each of the hazards resulting from each permitted flight. An applicant 
would then assess the risks of each hazard. A pemittee must also carry 
out the risk elimination and mitigation measures derived from its 
hazard analysis, and ensure the continued accuracy and validity of its 
hazard analysis throughout the term of its permit.
    The hazard analysis required by Sec.  437.55 must determine the 
likelihood of occurrence and the potential consequence of each hazard 
before risk elimination or mitigation. In the NPRM, the FAA proposed 
that the applicant determine the likelihood of occurrence and 
consequence for each hazard. It was not clear in the NPRM that the 
applicant must analyze the risk of each hazard before identifying 
measures to mitigate or eliminate that risk. This step helps 
distinguish between those hazards requiring mitigation and those that 
pose little apparent risk to the public, and allows the operator to 
focus its system safety effort on the most significant risks to the 
public.
    As part of the hazard analysis required by Sec.  437.55, an 
applicant must identify and describe the risk elimination and 
mitigation measures necessary to ensure that the likelihood of adverse 
consequence of each hazard meets the following criteria:
    (A) The likelihood of any hazardous condition that may cause death 
or serious injury to the public must be extremely remote.
    (B) The likelihood of any hazardous condition that may cause major 
property damage to the public, major safety-critical system damage or 
reduced capability, a significant reduction in safety margins, or a 
significant increase in crew workload must be remote.
    These qualitative criteria are statements of risk, including both 
the severity of the consequences and the likelihood. They are necessary 
to define an acceptable inverse relationship between likelihood and the 
severity of each hazard. The qualitative criteria are derived from FAA 
aircraft regulations and standards that the military has historically 
applied to launch safety. These standards have not quantified the 
likelihood of a hazard occurring. The probability of some hazards 
occurring cannot be quantified with certainty. For example, the 
likelihood of a procedure failing is difficult to quantify prior to 
obtaining experience with that procedure. The failure rate may not be 
available for the new systems being created. Even if the aircraft 
regulations and launch safety requirements assigned quantitative 
criteria to the likelihood of all hazards, the commercial launch 
industry is still too new to provide the data necessary for 
quantitative criteria.
    The Federation pointed out that Advisory Circular (AC) 25.1309-1A 
does not identify all decreased safety margins or all increased 
workload as areas of concern. Instead, the AC refers only to reductions 
or increases that are significant. The Federation and XCOR were 
concerned that they could not meet the proposed requirement that any 
hazardous condition that could lead to either a decreased safety margin 
or an increased workload be remote. The FAA did not intend so broad a 
requirement and is, therefore, requiring that the likelihood of 
significant changes be remote.
    Section 437.55(a)(1)(ii) requires an applicant to identify and 
describe hazards, including but not limited to software errors, if an 
operator uses software. XCOR was concerned that this requirement could 
be used to deny a permit to an applicant whose vehicle used no 
software, and thus had no software error hazards to describe. The FAA 
agrees that if the operator does not use software there is no potential 
for software errors.
    Although the FAA requires that a permittee conduct a hazard 
analysis, the FAA does not require a permittee to have a System Safety 
Program Plan (SSPP). An SSPP defines the methodology and products of a 
system safety program. The SSPP helps ensure that safety, consistent 
with overall system objectives and requirements, is designed into the 
system. An SSPP can also ensure that methods employed to remove hazards 
and reduce risks are properly applied and documented, and that changes 
in system design, configuration, or application are evaluated and 
analyzed for impacts to overall system safety. Spaceport Associates 
agreed with the FAA that no SSPP should be required for a permit. While 
the FAA does not require a SSPP for experimental permits, the FAA 
strongly encourages an operator to develop its own plan as part of a 
strong safety culture.

[[Page 17006]]

10. Operating Area Containment
    As proposed in the NPRM, Sec.  437.57(a) requires that during each 
permitted flight, a permittee contain its reusable suborbital rocket's 
instantaneous impact point (IIP) within an operating area and outside 
any exclusion area. During the application process, an applicant must 
demonstrate, at a minimum, either that there are physical limits on the 
ability of the reusable suborbital rocket to leave the operating area, 
or that an operator will use abort procedures and other safety measures 
derived from a system safety engineering process to contain the IIP. 
Section 437.57(b) defines an acceptable operating area, and Sec.  
437.57(c) states that the FAA may prohibit a reusable suborbital 
rocket's IIP from traversing certain areas within an operating area, by 
designating one or more areas as exclusion areas. These sections are 
the same as proposed in the NPRM, except for Sec.  437.57(b).
    The FAA has clarified Sec.  437.57(b)(3) and (4). Section 
437.57(b)(3) requires that an operating area not contain or be adjacent 
to a densely populated area or large concentrations of members of the 
public. The reference to large concentrations of members of the public 
was moved from proposed Sec.  437.57(b)(4) to Sec.  437.57(b)(3) for 
consistency. Section 437.57(b)(4) now requires that an operating area 
not contain or be adjacent to significant automobile traffic, railway 
traffic, or waterborne vessel traffic. This new requirement is 
important to ensure that hazards associated with a failure do not harm 
the public, as pointed out by a NASA commenter.
a. Reliability
    A representative from NASA recommended during interagency 
coordination that the FAA require information on the reliability of any 
system used to ensure containment. Information on reliability can 
include reliability prediction, reliability test data, and corrective 
actions taken as a result of operational anomalies. Reliability 
predictions may not be necessary or valid in all cases. Reliability 
test data, on the other hand, will likely be developed because of the 
requirement for verification evidence, which is measurable evidence 
that safety measures are effective and have been properly implemented. 
The requirement for verification evidence may be satisfied by the 
submission of reliability analysis and test data necessary to support 
an applicant's demonstration of vehicle containment. As stated in the 
FAA Guide to Reusable Launch and Reentry Vehicle Reliability Analysis, 
reliability analysis techniques such as Fault Tree Analysis and 
Reliability Block Diagrams, supplemented by reliability test data, are 
acceptable approaches for design verification. Therefore, reliability 
analysis and test methods could be used in verifying containment 
systems. In addition, Sec.  437.73(b) requires that a permittee report 
any anomaly (and corrective actions for each anomaly) of any system 
necessary to keep the vehicle within its operating area. Anomaly 
reporting is part of a strong reliability engineering effort, and 
provides the operator and the FAA with added information to evaluate 
the reliability of those systems.
    The NASA representative also noted that the hazards associated with 
a failure are what should be contained, not the vehicle's instantaneous 
impact point. NASA defines containment as a ``technique that precludes 
hazards (such as vehicle, debris, explosive, or toxic) from reaching 
the public, the workforce, or property in the event of a vehicle 
failure or other mishap.'' NASA Procedural Requirement 8715.5, Range 
Safety Program, 29 (Jul. 8 2005). The commenter made a similar comment 
about Sec.  437.57(b)(1), which requires that an operating area be 
large enough to contain each planned trajectory and all expected 
vehicle dispersions. The commenter noted that this requirement seems to 
imply that it would be acceptable to run a planned instantaneous impact 
point trajectory right along the boundary of the operating area. The 
commenter suggested also requiring a margin that accounts for the 
potential dispersions of debris and any other hazard caused by a 
vehicle failure. The FAA agrees that what is important for public 
safety is that hazards are contained, not a rocket's IIP. For this 
reason, Sec.  437.57(b)(3) mandates that a densely populated area may 
not be adjacent to an operating area. The separation of the edge of the 
operating area from densely populated area effectively creates a buffer 
around an applicant's operating area. That buffer will serve to keep 
hazards away from the public in the event of a mishap.
b. Operating Area Publication
    In the NPRM, the FAA stated that it would publish approved 
experimental permit operating areas on its Web site. Although XCOR 
Aerospace agreed with informing the public of potential hazards, it was 
concerned that doing so might encourage members of the public to 
converge on that area to watch the flights, potentially creating an 
unsafe condition. Although the FAA agrees that publication may invite 
undesirable attention, the FAA believes it is important to inform the 
public of potential hazardous operations so that they can be aware of 
potential hazards. In addition, the FAA intends to use its Web site as 
a repository for locations and characteristics of acceptable operating 
areas to provide guidance to future applicants proposing operating 
areas. In this fashion, the operating area list will provide examples 
of acceptable operating area characteristics, such as amounts of 
unpopulated and sparsely populated areas and automobile, railway, and 
waterborne vessel traffic.
c. Definitions of Unpopulated, Sparsely Populated, and Densely 
Populated Areas
    In the NPRM, the FAA requested comments as to whether it should 
adopt specific definitions for ``unpopulated,'' ``sparsely populated,'' 
and ``densely populated'' areas for purposes of determining an 
acceptable operating area. The Federation and XCOR agree that the FAA 
should not define these terms. The Federation commented that operating 
areas are site dependent. The Federation's statement is true because 
similarly sized operating areas with identical total populations may 
have a different distribution of the population, leading to different 
risks. Likewise, how the calculations are performed may change the 
apparent population density. For example, there may be an area of 100 
square miles, with all the population clustered in the southeast corner 
in a town. The density would appear to be low if the population were 
distributed over the whole 100 square miles. On the other hand, if the 
operating area were assessed in blocks of one square mile at a time, 
certain areas would show high density.
    Because the FAA wants to gain experience in assessing these 
questions, the FAA will define these terms on a case-by-case basis for 
now. However, the FAA may in the future define these terms if 
experience shows the merits of doing so. Those definitions could be 
provided as guidance material rather than as a change to the 
regulation.
d. Risk Criteria: Qualitative or Quantitative
    As the FAA discussed in the NPRM, the FAA will not require an 
applicant to perform a quantitative risk analysis to obtain a permit. 
This means that a permittee will not have to calculate expected 
casualty and individual risk, which are the measures of acceptable risk 
for licensed activities. In their stead, the FAA is mandating 
qualitative risk criteria under section 437.55(a)(3), containment 
within an operating area,

[[Page 17007]]

risk mitigation measures derived from hazard analyses, and corrective 
actions that respond to anomalies.
    Most commenters agreed with not requiring a permittee to meet 
quantitative risk criteria. SpaceShot stated that the FAA's current 30 
in a million expected casualty criterion is too stringent, even under a 
launch license. Spaceport Associates agreed that no quantitative risk 
should be required under a permit because there is not enough real 
data. Blue Origin agreed with the FAA that the reliability data 
necessary for a quantitative analysis typically can be obtained by the 
very research and development testing that Congress intended permits to 
enable. Blue Origin also considered the approach consistent with the 
legislative history of the CSLAA, where the FAA was urged to assess the 
appropriateness of requiring risk calculations for permits, and to 
explore alternatives. XCOR also agreed that expected casualty was not a 
proper tool for assessing risk.
    The Federation stated that calculating a probability of failure for 
newly developed reusable suborbital rockets would be extremely 
difficult, if not impossible. Any vehicle operating under an 
experimental permit will be testing new technologies and, by 
definition, will lack the flight history and operational experience 
needed to determine the probability of failure. Also, the capability of 
most reusable suborbital rockets to use incremental testing and 
envelope expansion may provide for a higher probability of success for 
a vehicle's ultimate design as compared to the initial launches of 
expendable launch vehicles. For these reasons, the Federation believes 
it would be inapposite to apply commonly accepted probabilities of 
failure for expendable launch vehicles to early launches of reusable 
suborbital rockets.
    XCOR suggested that the FAA should encourage applicants to perform 
quantitative risk analyses and that, if an applicant were to submit 
such an analysis, the FAA would have to accept it. The FAA agrees that 
performing valid quantitative risk analyses should be encouraged, even 
if these analyses are not required to obtain a permit. In addition to 
the added perspective on safety that these analyses provide, the 
experience gained in performing such an analysis could prove valuable 
if the permit applicant wishes to apply for a launch license. However, 
a quantitative risk analysis is not a substitute for any of the other 
analyses required to obtain a permit, and the performance and 
submission of such an analysis does not excuse an applicant from any of 
the requirements of part 437.
    Quantitative risk analysis by itself does not minimize the risk to 
the uninvolved public. Rather, the decisions made based on the results 
of the assessment reduce the risk. At this stage, the hazard analysis 
and the qualitative risk assessment provide the best route to making 
those informed decisions.
    Rocketplane stated that requiring an estimate of the probability of 
a third-party catastrophic event, which it described as ``expected 
casualty,'' would ensure adequate safety analyses to minimize the risk 
to the uninvolved public, especially in the case of flight over a 
populated area. Rocketplane stated that without an expected casualty 
calculation, the industry would be subjected to a major setback if an 
experimental vehicle were to crash and harm members of the public.
    Although the FAA shares some of Rocketplane's concerns, it is not 
practicable to mandate quantitative risk assessments for experimental 
permits at this time. As discussed in the NPRM, the FAA considered 
requiring quantitative risk analyses. However, uncertainties in launch 
vehicle reliability, operating environments, and the consequences of a 
failure prevent a straightforward application of this analysis 
technique. The data concerning reliability, operating environment, and 
consequences typically can be obtained by the very research and 
development testing that Congress intends permits to enable.
11. Key Flight-Safety Events
    ``Key flight-safety event'' means a permitted flight activity that 
has an increased likelihood of causing a launch accident compared with 
other portions of flight. In the NPRM, the FAA proposed a similar 
definition, but referred to ``failure'' instead of ``launch accident,'' 
which is already defined by Sec.  401.5.\6\ Under Sec.  437.59, a 
permittee must conduct any key flight-safety event so that the reusable 
suborbital rocket's instantaneous impact point, including its expected 
dispersion, is over an unpopulated or sparsely populated area.
---------------------------------------------------------------------------

    \6\ A launch accident means:
    (1) A fatality or serious injury (as defined in 49 CFR 830.2) to 
any person who is not associated with the flight;
    (2) Any damage estimated to exceed $25,000 to property not 
associated with the flight that is not located at the launch site or 
designated recovery area; or
    (3) An unplanned event occurring during the flight of a launch 
vehicle resulting in the known impact of a launch vehicle, its 
payload or any component thereof:
    (i) For an expendable launch vehicle (ELV), outside designated 
impact limit lines; and
    (ii) For an RLV, outside a designated landing site. 14 CFR 
401.5.
---------------------------------------------------------------------------

12. Landing and Impact Locations
    Section 437.61 requires a permittee to use a landing or impact 
location that is big enough to contain an impact, including debris 
dispersion; and that does not contain any members of the public at the 
time of landing or impact. This requirement applies for nominal landing 
or any contingency abort landing of a reusable suborbital rocket, or 
for any nominal or contingency impact or landing of a component of that 
rocket.
    This section is a clarified version of that proposed in the NPRM. 
It requires an operator to account for nominal or contingency impacts 
or landings of a rocket component rather than all possible impacts. 
This clarification should assuage XCOR's concern that the requirement 
could be interpreted to mean that wherever a component could possibly 
impact must not contain any members of the public, thus precluding any 
flight over any members of the public.
    XCOR and the Federation were also concerned that this section could 
be interpreted to mean that a spaceport operator would have to close 
its spaceport to all other traffic during every flight of a reusable 
suborbital rocket. They believe that at Mojave Airport, where the FAA 
has defined the launch site as all active runways, taxiways and 
hangars, this interpretation would effectively close the airport for 
the duration of every suborbital rocket flight.\7\ This was never the 
FAA's intent. The requirement says that a landing location has to be 
big enough to contain impact hazards. The landing or impact location, 
not the whole launch site, has to be clear of members of the public. A 
landing area could be a runway. A landing area may or may not include 
the whole launch site and could simply be a runway. The size of the 
landing area must be large enough to contain impact hazards in the case 
of a hard landing or impact at the planned location. An entire 
spaceport, including hangar areas, would only have to be closed if 
necessary to contain impact hazards.
---------------------------------------------------------------------------

    \7\ XCOR raised the closing of runways at Mojave Airport for the 
landing of SpaceShipOne as an example of the FAA not permitting 
overflight because of concerns of any impact. The runways were 
closed not because of potential crashes during overflight as XCOR 
suggests, but because of the need to account for the debris of a 
potential impact on landing. Runways that intersected the landing 
runway also had to be closed so that no planes would enter the 
landing location.

---------------------------------------------------------------------------

[[Page 17008]]

13. Agreements With Other Entities Involved in a Launch or Reentry
    Section 437.63 requires an applicant to have a written agreement 
with a Federal launch range operator, a licensed launch site operator, 
or any other party that provides access to or use of property and 
services required to support the safe launch or reentry under a permit. 
Although the FAA did not receive a comment about this, the agency is 
adopting a narrower version of the requirement than originally 
proposed. In the NPRM, the FAA proposed that the applicant enter into a 
written agreement with ``* * * any other party that provides access to 
or use of property and services required to support a permitted 
flight'' regardless of whether the property or services were required 
for safety.
    Blue Origin commented that the FAA should not require that a 
permittee enter into such agreements if the permittee intends to use 
its own launch site exclusively. Such agreements may not be necessary 
if the private use operator has no need for the property or services of 
another. However, even operators of private sites may need the safety 
services of outside parties. For example, a local fire department may 
be used for emergency response.
    When a launch occurs over navigable waters, Sec.  437.63 requires 
that a permittee enter into and comply with a written agreement between 
the applicant and the local United States Coast Guard (USCG) district 
to establish procedures for issuing a Notice to Mariners before flight. 
In the NPRM, the FAA proposed that this requirement apply to overflight 
of any water. The Federation and XCOR recommended limiting this 
requirement to overflight of ``navigable'' water. Because the U.S. 
Coast Guard only has jurisdiction over navigable water, the FAA is 
adopting this narrower version. Section 437.63 also requires a written 
agreement between the applicant and the Air Traffic Control authority 
with jurisdiction over the airspace through which a flight is to take 
place, for measures necessary to ensure the safety of aircraft, such as 
launch notification procedures and limitations on days or times of 
launches. This is the same as proposed in the NPRM, but now 
specifically identifies that the agreement must demonstrate 
satisfaction of Sec. Sec.  437.69(a) and 437.71(d). This clarification 
will ensure that the agreement covers the communications and airspace 
issues addressed in those sections.
14. Collision Avoidance Analysis
    Section 437.65 requires a collision avoidance analysis for a 
suborbital launch with a planned maximum altitude greater than 150 
kilometers. A permitted launch may not pass within 200 kilometers of a 
manned or mannable orbital object throughout flight. Although Spaceport 
Associates supported a minimum altitude for requiring a collision 
avoidance analysis, it suggested that the FAA continue to work with the 
U.S. Strategic Command (USSTRATCOM) to determine an alternate distance, 
because as flight rates increase it could be more difficult to schedule 
suborbital flights in general. The FAA consulted with USSTRATCOM during 
the development of the NPRM and intends to continue the partnership to 
explore methods of improving the process as activity increases. Efforts 
are underway to modernize the collision avoidance analysis. Meanwhile, 
the FAA will continue to allow an applicant to propose an alternate 
distance, provided the distance demonstrates an equivalent level of 
safety and accounts for all uncertainties.
15. Tracking a Reusable Suborbital Rocket
    Under Sec.  437.67, a permittee must, during permitted flight, 
measure in real time the position and velocity of its reusable 
suborbital rocket. This is a change from the NPRM, which proposed that 
a permittee provide Air Traffic Control with the ability to know the 
real time position and velocity of the reusable suborbital rocket while 
operating in the National Airspace System. The purpose of this proposal 
was to allow Air Traffic Control to track a permitted vehicle if it 
were to fly outside its operating area. The proposal prompted 
opposition from Blue Origin, the Federation, and XCOR. Blue Origin 
commented that the proposed tracking and data requirements may not be 
possible to fulfill for short duration, low-altitude testing, and asked 
that the FAA not mandate such tracking.
    The Federation and XCOR had no objection, in principle, to being 
required to make real time position and velocity information available 
to Air Traffic Control, but felt they could not accept responsibility 
for what Air Traffic Control did, or failed to do, with the 
information. Nor, the Federation pointed out, could permittees be 
responsible for overcoming the limitations of the air traffic control 
system, or for fulfilling a technical requirement if no technology was 
available at a reasonable price.
    The Federation noted that the most likely method of complying with 
the proposed requirement was to use a standard, commercially available 
transponder. However, commercially available Mode C transponders cannot 
currently report an altitude greater than 62,000 feet. In addition, by 
FAA regulations, such transponders must report pressure altitude, and 
for a vehicle going faster than the speed of sound while increasing in 
altitude, the pressure altitude can lag actual altitude by thousands of 
feet. The Federation described ADS-B as much more appropriate, and 
affordable, but noted that its use is constrained by the fact that the 
FAA's air traffic control system does not offer ADS-B throughout the 
United States.
    The FAA agrees with the comments for the reasons provided. The 
requirement for a permittee to measure in real time the position and 
velocity of its reusable suborbital rocket, coupled with the 
requirement, discussed below, that a permittee communicate with Air 
Traffic Control during all phases of flight, should provide Air Traffic 
enough information to protect the public if a permitted vehicle flies 
outside its assigned operating area. However, the FAA may require the 
permittee to carry a transponder or similar device to allow Air Traffic 
Control to know directly the real time position and velocity of the 
reusable suborbital rocket if a vehicle is flying below 62,000 feet and 
slowly enough to communicate with Air Traffic Control's system. 
Satisfaction of these conditions is extremely unlikely given the 
velocities of suborbital rockets. The FAA will implement this 
requirement on a case-by-case basis through the terms and conditions of 
a permit, because the agency does not believe that the need for such a 
requirement is sufficiently widespread to implement a requirement of 
general applicability. Nor may it always be necessary. The 
characteristics of both the vehicle and the surrounding area will have 
to necessitate imposing the requirement.
    As proposed in the NPRM, Sec.  437.67 also requires a permittee to 
provide position and velocity data for post-flight use.
16. Communications
    Section 437.69 requires that a permittee communicate with Air 
Traffic Control during all phases of flight, as proposed in the NPRM. 
XCOR agreed that continuous communication is necessary, even when 
flying above 60,000 feet. This requirement has greater import now that 
the FAA does not require Air Traffic tracking of a

[[Page 17009]]

launch vehicle. If a vehicle leaves an operating area, this 
communication link will allow a permittee to relay position and 
velocity information to Air Traffic.
17. Flight Rules
    Section 437.71 requires that a permittee follow certain flight 
rules. They are the same as proposed in the NPRM, with one exception. 
In the NPRM, the FAA proposed that a permittee could not operate a 
reusable suborbital rocket within Class A, Class B, Class C, or Class D 
airspace or within the boundaries of the surface of Class E airspace 
designated for an airport, unless the permitee had prior authorization 
from the air traffic control facility having jurisdiction over that 
airspace. The FAA is not adopting this provision because it is 
unnecessary. The agreement with the responsible Air Traffic Control 
authority required by Sec.  437.63 should include any need for prior 
authorization.
18. Anomaly Recording and Reporting and Implementation of Corrective 
Actions
    Section 437.3 defines ``anomaly'' as a problem that occurs during 
verification or operation of a system, subsystem, process, facility or 
support equipment. Section 437.73 requires a permittee to record and 
report anomalies and implement corrective actions for those anomalies. 
A permittee must also report to the FAA any anomaly to, and corrective 
action for, any system that is necessary for compliance with the 
requirements to perform a hazard analysis, to contain a rocket within 
an operating area, and to conduct key flight-safety events properly. A 
permittee must take each corrective action before the next flight.
    The FAA had proposed to define ``anomaly'' as an apparent problem 
or failure that occurs during verification or operation and affects a 
system, a subsystem, a process, support equipment, or facilities. The 
Federation questioned whether, by defining ``anomaly'' to include 
failures while simultaneously defining failures to include any 
anomalous condition, the definitions created a circular loop whose real 
meaning would be open to broad interpretation.\8\
---------------------------------------------------------------------------

    \8\ The Federation also recommended against using or defining 
the term ``anomaly'' and replacing it with the term ``failure.'' The 
FAA agrees that some confusion could have resulted from defining 
``anomaly'' in terms of failure. Anomalies are meant to encompass 
not only failures in flight but also problems that could result in 
flight failures in the future, including human errors, software 
faults, and incorrect procedures. Because ``problem'' encompasses 
failures, reference to ``failure'' is not necessary.
---------------------------------------------------------------------------

    Spaceport Associates suggested that the FAA limit anomalies to 
those that were potentially safety-critical. The FAA recognizes that 
the term anomaly is a broad term, and chose it to include issues during 
verification and operation of systems and subsystems that are not 
necessarily flight failures but could put the public at risk. The FAA 
is adopting the term anomaly with the modifications discussed above, 
but is clarifying the anomaly reporting requirements of Sec.  437.73 to 
reduce concerns about the standard being too broad and burdensome. The 
FAA is only concerned about anomalies of systems, subsystems, 
processes, facilities, and support equipment that are essential for 
safe performance or operation. Therefore, the FAA is only requiring, 
under Sec.  437.73, a permittee to report anomalies that are safety-
critical.
    Spaceport Associates commented that hazard analysis and anomaly 
reporting are good ideas, and will normally be done internally in any 
case by an operator conducting the test flights. Blue Origin suggested 
limiting the recording requirement to anomalies that occur during 
permitted flight. Blue Origin also recommended that the FAA only 
require an operator to report anomalies for specific systems, such as 
guidance and propulsion systems.
    Anomalies that occur during system and subsystem verification 
testing are potential precursors to launch accidents. Recording and 
reporting these anomalies allow the operator and the FAA to analyze and 
evaluate problems that could lead to launch accidents. The goal of a 
strong system safety program is to prevent mishaps. Analyses of 
accidents often show that clues existed before the mishap in the form 
of anomalies during the project life cycle, including before flight. 
Anomalies that occur throughout the life cycle can provide important 
information about what conditions an operator needs to control. 
Therefore, it is prudent for the launch vehicle operator to identify, 
analyze, and mitigate not just anomalies that occur during flight, but 
also anomalies in vehicles and safety-related subsystems and components 
that occur on the ground. Although the FAA will not limit the reporting 
requirement to anomalies that occur during flight, the FAA does not 
wish to impose