December 9, 2018: The Russian space program has suffered another fatal setback when the FSB (successor to the KGB) threatened to cancel a lucrative contract Roscosmos (new state-owned corporation running commercial space operations) had negotiated to use 21 Soyuz satellite launchers to put hundreds of small Internet communications satellites into orbit. A British firm, OneWeb, will use the worldwide satellite network to provide Internet access to anywhere on the planet. The FSB concern is about their ability to monitor and censor or block any Internet traffic coming into or out of Russia. The OneWeb system will have a few ground stations to connect the satellites to the rest of the Internet. The FSB is willing to compromise if one of those ground stations is in Russia and the FSB has access to all the Internet traffic passing through it. OneWeb is inclined to deny that demand even if it means Russia will outlaw the use of OneWeb by Russians. That ban would not be completely effective because some Russians would find a way to pay for their access. OneWeb makes money by acting as an ISP (internet service pr9vider) and for hundreds of millions of people in areas with poor, or no, Internet access the satellite service is all they would have access to. That includes millions of Russians in remote areas. The fact that the FSB would not have access to that Internet traffic would be a bonus for Russian users. OneWeb has not yet decided how to proceed and Roscosmos believes they can get the FSB overruled but that will not happen until early 2019. Implementation of the OneWeb launches was first pushed to late 2018 and now to early 2019.

The irony of this is that one of the potential replacements for the billion dollar Roscosmos contract is the American SpaceX, which has perfected the reusable boosters (which can land intact and be reused) that lowers the cost of using SpaceX launchers. Roscosmos has been having a hard time remaining competitive and the OneWeb contract is something of a lifeline. OneWeb feels it can use this to persuade the Russian government to tell the FSB to back off. But with SpaceX and others waiting to step in the FSB is negotiating from a weak position. China may offer a way out as they are proposing a Russian-Chinese partnership to establish a competitor for OneWeb that would, of course, be accessible to Russian and Chinese Internet censorship efforts. Russia cannot afford to create its own satellite Internet system and Roscosmos is sling towards bankruptcy.

OneWeb is but one of several efforts to provide global satellite-based Internet service. The others are Starlink, Kepler, Telesat, LinkSure and LeoSat. Starlink is backed by SpaceX, which has already launched two test satellites. The full Starlink system would consist of over 11,000 small satellites and SpaceX plans to have nearly 2,000 in orbit by 2021. Starlink offers high-speed Internet service and is not concerned with FSB objections. The one Chinese backed network, LinkSure, would provide “free wi-fi worldwide” and make money with ads and reselling user data. LinkSure would be subject to Chinese censorship.

Meanwhile, Roscosmos continues to have problems with the contracts it already has. On October 11 a Russian Soyuz rocket failed as it was attempting to take two men (a Russian and an American) to the ISS (International Space Station). The two passengers survived because of the emergency recovery system that is part of the manned rocket. The failed Soyuz rocket was another example of the continued management and quality control problems in the Russian space program. Previously there had only been two failures of a Soyuz manned capsule, in 1975 and 1983. The 1983 failure involved a rocket catching fire on the launch pad and the crew rescue system saved the passengers, as was the case during the 2018 failure. As in the past, the Russians recovered and carried out a successful launch to deliver three people to the ISS.

There have been 1,210 launches of a Soyuz rocket since 1966 and the success rate has been 97 percent. The failures include the inability to reach correct orbit. The Soyuz FG rocket, used to carry passengers, has been used 55 times since entering service in 2001 and all were successful until the October failure. The Soyuz FG is a more advanced and, until the recent failure, more reliable version of the Soyuz rocket design. There have been some recent problems with the Soyuz models used to launch satellites. Russia insisted that Soyuz FG was different but the personnel and management problems in the Russian space program could not be completely avoided. The Chinese version would cost about $5 billion and many of the launches would be handled by Chinese rockets. Russia is broke and the Russian-Chinese OneWeb would be at a disadvantage because it would be censored. Many potential customers don’t care but some do. In any event, Roscosmos is the big loser here no matter which way this goes. The Russians were not going to launch all 900 of the OneWeb satellites anyway and now someone else may well launch all or most of them simply because they are currently willing to do it.

Meanwhile, Roscosmos has other problems. SpaceX is poised to take away the Roscosmos monopoly on taking crews to the ISS. A Soyuz passenger capsule that reached the ISS in June 2018 was later found to have a tiny leak, which was apparently created during manufacture and not detected by quality control. The growing number of manufacturing defects in Russian spaceflight equipment is compounded by the growing failure to catch and repair defects. Thus the problems with the two most recent Soyuz passenger vehicles are not just rare events but part of a trend that is getting worse. Russia said they would have another Soyuz FG ready to go by early December and they did. The Soyuz FG problems also reinforce the belief that more than one nations must be able to get people to and from the ISS. SpaceX has a passenger capsule design (Dragon) that will have its first test flight in 2019. Boeing also has a manned capsule design (Starliner) ready for test in 2019. One or both of these could be certified ready for service by 2020. That means Soyuz FG still is the only human transport to ISS for at least the next two years.

Russians have looked on with growing dismay as their space program, once a close competitor with the Americans, slips into bankruptcy and insignificance. But the Russians were already falling way behind when the Soviet Union collapsed in 1991 and since then the government has, with increasing frustration, sought to revive Russian space efforts and restore that program to its former fame and glory. The latest major move towards that goal occurred at the end of 2015 when Russia abolished its government federal space agency and transferred all the assets and responsibilities to the newly created Roscosmos. Over the next two years, it became obvious that the problems remained, seemingly beyond solution. To make that failure obvious by the end of 2017 Russia had fallen to third place, behind the Americans and Chinese in space efforts. This was not a surprise because over the last decade Russian space efforts have struggled to meet military space needs, often at the expense of civilian needed. Currently, there are only 134 Russian satellites in orbit and 60 percent of them are military.

The Russian space efforts have become a money-losing operation sustained mainly for propaganda purposes. But even that backfires. This was demonstrated in February 2018 when Roscosmos officials were asked for their reaction to the recent successful launch of the American SpaceX Falcon Heavy rocket. The official response was that the SpaceX launch was a “nice trick.” This was in reference to the SpaceX Falcon Heavy using 27 rockets operating in unison to launch very heavy loads into orbit. Also notable was two of the three booster rockets returning and landing (nearly simultaneously) for reuse. This and many other innovations made SpaceX Falcon Heavy much (by over 70 percent) cheaper than competing American designs (and foreign ones as well). Finally because the first SpaceX Falcon Heavy launch was a test the SpaceX owner used, for a payload, an electric car (a convertible) with a crash test dummy in a space suit in the driver’s seat and the dashboard having an iconic “Don’t Panic” sign on it as well as two high tech storage devices with massive data about earth and its inhabitants (in the event that extraterrestrials find the car in the future).

Most Russians appreciated the humor in all this and the reality that it meant Roscosmos was in a hopeless position because Roscosmos lacked the cash and talent to operate as effectively as SpaceX. This was an old story for Russians and now even the Chinese had passed them by. SpaceX offers lower prices and more flexibility than most government (usually military) developed launchers. As a privately owned company, SpaceX has less bureaucracy and is quicker to adapt new technology for launch services. Many existing and potential SpaceX customers see this as the future of space transportation.

In April 2018 Russia confirmed the obvious and admitted they had lost their huge market share of commercial satellite launches. As recently as 2013 Russia had half that market. Five years later their market share had fallen to about ten percent and Russian showed no signs of regaining their dominance and expected their share of the commercial market to sink to as low as four percent. After 2013 Russia faced growing competition from cheaper, more reliable Chinese satellite launch services. But what really accelerated the Russian decline was the surprising emergence of new American launch technology, mainly the SpaceX reusable launchers (that can regularly return and land intact). This is particularly annoying because it was another unexpected new American technology (fracking) that drove down and the world price of Russia’s main export; oil and natural gas. Fracking also made the United States the major producer of oil and gas and a new competitor for Russia in export markets. Meanwhile, Russian space industry officials said they would put more emphasis on satellite design and manufacturing, which is much larger (by about three times) market than launch services. But even there Russia is having problems competing, mainly because of a shortage of skilled engineers and reliable manufacturing capabilities. So while Russia has lost about $2 billion a year in launch business they will probably lose ground on the satellite side of the business as well.

A fundamental problem with the Russian space program was that, unlike in the West and now with China, the Russian efforts were a spinoff from the military program that concentrated on weapons (ICBMs and the like). In the West commercial space operations generated a lot more activity (launches, R&D, competition and demands for technical and operational efficiency). With the collapse of the Soviet Union, there was less money for space operations and better career opportunities elsewhere for the Cold War era Russian space program talent. Russia is keeping up in the design and construction of ICBMs, but even there the loss of all that talent forced to work for the Soviet space program and equipment manufacturing has led to a decline, since the 1990s, in quality for all rockets built. Thus all those embarrassing failures in new Russian ICBMs over the last two decades. Many of the details of the military rocket failures are kept secret. Not so on the commercial side.

After 1991 Russia was much smaller and with half the population of the Soviet Union and with a new economic and political system. Skilled technical talent could no longer he kept confined to jobs and neighborhoods determined by the government. After 1991 the “talent” was set free and most, especially the managers, wanted to work anywhere but the state-owned (or controlled) defense industries. This should have been anticipated because half the Soviet population left to form new nations (or revive old ones).

Then there was China. Since the 1980s China has set its people free to “get rich” as long as they did not challenge the communist dictatorship that is still in charge. China has not yet been able to produce something like SpaceX but the Chinese space program has since the 1980s matched and surpassed what the Russians ever did. And China has the kind of economic system and entrepreneurs that could create another SpaceX operation.

The Russian problem was that they did not nurture entrepreneurs as the Chinese did. In 1991 Russians were free to work where they wanted and few of the technically skilled Russians wanted to work for the government anymore. A lot of them left Russia and never returned. At the same time, China was attracting talent to its space program by allowing entrepreneurs to create a lot of the technology they needed. Meanwhile, the Russians were putting fewer satellites into orbit and a growing number of those launches were failures because the talent to make that happen was no longer around. This loss of talent was felt throughout the Russian defense industries and since the mid-1990s there were growing complaints from military commanders about quality control problems with the new (post-1991) weapons. This was especially true with nuclear submarines, ballistic missiles and aircraft. The problems seemed to be worst, and most embarrassing, in the space program. It was just the opposite in China and this annoyed the Russian government even more. Now the Americans are launching electric cars into orbit at half the price anyone else can do it.

The failure of the Russian space program was not a sudden thing. It took time and it was a painful process. In 1999 a new Russian government came into power and has been trying really hard to fix the problem, with only limited success. For example in mid-2013 the government issued a formal reprimand to the director (Vladimir Popovkin) of the Russian Space Agency (RSA), which handles all of Russia’s satellite launches. The government later clarified that the reprimand was not for several recent disasters but for the fact that since 2010 the RSA has only been able to launch 47 percent of Russian satellites. The reprimand, which in Russia is usually the last warning for someone about to be dismissed, was about the continued inefficiency of the RSA and the inability of Popovkin to reform and revitalize the RSA.

This failure was worse than it appeared. Vladimir Popovkin took over RSA in March 2011. Eleven months later he was hospitalized for exhaustion. There were rumors that he had been worn down by his many subordinates working against the new anti-corruption measures. He was out of the hospital in twelve days and denied the many rumors (like the corruption struggle) swirling about him. Vladimir Popovkin should have been an ideal candidate for the RSA job, as he was a career army officer and scientist who rose to command the Russian Space Forces and several other military operations dealing with large rockets and space operations. Popovkin held on his job despite continued problems because he was qualified to do the job and encountered a lot of problems with corruption and decades of bad management. Russian politicians and state-controlled media, both heavily involved in corrupt activities, were not eager to make a big deal of how corruption was crippling the RSA. What Popovkin also had to deal with was a chronic shortage of competent and reliable technical people. No matter how talented and capable Popovkin it was not enough to turn the space program around.

Because of this Soviet legacy, Russian satellite launchers have never been the most flawless, but they got the job done. Including the partial failures, the Proton has about a ten percent failure rate. However, the Russian launchers and Russian launch facilities are cheaper than those in the West and nearly as reliable. But the higher failure rate of the Proton rocket causes some concern among potential customers. Nevertheless, the Proton is so cheap that you can afford to pay more for insurance. And there is some comfort in knowing that the RSA suits put their jobs on the line every time one of those rockets is launched.

The repercussions continued in the wake of all the sloppy decisions and stupid mistakes that have led to the loss of launchers and satellites. Another shake-up of the space effort was expected if the government could find someone more qualified than Vladimir Popovkin to do the deed. Senior government officials knew that Popovkin was not the problem and that the corrupt environment he had to work in was. Cleaning that up means cleaning up the corruption throughout Russian society. That requires more than the firing current management, it takes time and persistence. In 2013 Russian space efforts were reorganized once more and Roscosmos was created. This rearranged management but did not solve any of the underlying problems. That fact has been confirmed several times over the last five years and the current Soyuz FG problems and FSB trying to block the OneWeb contract emphasize the continued decline.