It would seem that my post yesterday (and my Fox column) were quite timely.

I’ve often discussed the chilling effect that regulatory uncertainty can have on investing in private space transportation efforts. Usually, I mean that in the sense that it makes investors hesitant, or reduces the potential pool of them. But you can’t get a more clear cut case than what happened yesterday, when Dennis Tito testified to a Congressional panel, with no ambiguity, that he’s ready to invest, and the only thing preventing him from doing so is fear of the FAA.

I hope that they’re listening.

[Update at 8:57 AM PDT]

The testimony is now on line.

Here’s Tito’s. Key graf:

Please understand me: I am not looking for government funding or technology. I don’t need an investment tax credit or a loan guarantee. I’m not even looking to escape the regulations under which other space transportation companies operate. But I would like to know which government agency, and which set of regulations, will oversee this new industry.

You see, I am willing to risk my money on a technical concept and a team of engineers. I am willing to risk my money on the customers actually showing up. And I am willing to risk my money competing against other companies in the marketplace. But I am not willing to risk my money on a regulatory question mark, on waiting for the government to decide who can give me permission to get into business, and what the regulatory standards for my business will be.

For an excellent tutorial on the history of aviation and launch regulation, and the differences between the two, I also encourage you to read the testimony of Jeff Greason, head of XCOR.

The key point is that the mature aviation industry’s goal is to protect passengers and cargo. At the state of development of launchers, we must be prepared to accept much higher risk to (informed) first and second parties, and focus regulations on protecting third (that is, otherwise uninvolved) parties on the ground, as required by the Outer Space Treaty and common sense.

Elon Musk (founder of Paypal, and now President and owner of SpaceX) also has some useful thoughts, with some specific recommendations for making government ranges more user friendly, and with an optimistic outlook for the industry based on his internet experience:

It is worth noting that the perspective I bring to the launch vehicle industry is drawn from a particularly Darwinian experience in the business world, having founded and helped build two successful Internet companies in Silicon Valley. Seldom have we seen a faster moving, more voraciously competitive business environment or one with more tombstones. However, for all the problems associated with that era, the rise and fall and perhaps rise again of the NASDAQ, it is easy to forget that the vast majority of the monumental work required to build what we know as the world wide web was done in less than a decade.

If you doubt that we can possibly see such progress in space access, please reflect for a moment that the Internet, originally a DARPA funded project, showed negligible growth for over two decades until private enterprise entered the picture. At that point, growth accelerated by more than a factor of ten. We saw Internet traffic grow by more in a few years than the sum of all growth in the prior two decades.

John Kutler’s testimony is worth reading as well, providing the perspective of the institutional investment community. Summary: they’re not ready to jump into this yet, so the startups will have to continue to rely on angels for a while.

Finally, read the testimony from Futron on their space tourism market research study.

As I said, I hope that Congress was listening carefully.