Free Enterprise Space Shot

A brash entrepreneur tries to break NASA's monopoly

In Ian Fleming's novel Moonraker, Multimillionaire Hugo Drax built himself a huge rocket to annihilate the city of London. He was foiled in his sinister strategems by James Bond, Agent 007. Now a businessman space buff named Gary Hudson is trying some rather far-out capitalism of his own, with a plan to start putting satellites into orbit from a private launching pad in Texas by 1983. So far, not even the U.S. Government is trying to stop him.

A less likely space entrepreneur than Hudson, 30, is hard to imagine. A college dropout and self-taught engineer, he met David Hannah Jr., a wealthy Houston real estate developer, in 1979 after making a movie on space exploration. Hudson convinced Hannah that he could build a low-cost rocket using off-the-shelf hardware, and send satellites into orbit for bargain-basement prices.

The cost of such an undertaking would presumably reach into the hundreds of millions of dollars. But Hannah and Hudson have trimmed expenses to the bone and are projecting start-up costs no higher than $20 million to $30 million. So far, the firm has spent $1.2 million gearing up, with most of the money coming from Hannah and a group of wealthy Texas backers, who have each contributed at least $100,000 to the venture. Additional financing will obviously depend on whether the space entrepreneurs can convince customers that they can deliver the goods.

There are certainly enough companies in need of such a service. Firms such as RCA, Western Union, Comsat and Satellite Business Systems have already launched 37 private communications satellites aboard rockets provided by the National Aeronautics and Space Administration. Yet the shortage of satellites remains acute.

Until now, NASA has had a virtual monopoly on space shots for private industry. But the space agency charges approximately $28 million to put satellites into the geosynchronous, or stationary, orbit used for telecommunications signals. Moreover, NASA rockets are just about booked solid for the next five years. The first 68 flights of the space shuttle, which is also designed to launch satellites, have been reserved as well.

Hudson plans to undercut NASA and open up the market by charging a maximum of $5 million to launch a low-orbit satellite that could be used to search for oil, gas or mineral deposits. For stationary communications orbits 22,300 miles up, Space Services Inc. will charge an estimated $15 million.

The first of the company's Percheron rockets, named after a French draft horse, is being built in a Sunnyvale, Calif., plant by 17 engineers, some of them former employees of NASA. This week the device will be loaded aboard a flatbed truck and hauled to a launch pad at Matagorda Island, about 50 miles northeast of Corpus Christi, Texas, a site that NASA once considered for launches. After testing the prototype, the company hopes to conduct its first orbital flight next year.

To save money, Hudson's designers have cut out many of the back-up systems that NASA rockets use. Space agency officials worry about the resulting risks. Hannah points out, however, that his company carries $25 million in flight-liability insurance to cover any mishap. If a runaway Percheron came down in, say, the Houston Astrodome, $25 million might not even begin to cover the costs.

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