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Rocky Mountain News October 22, 2005

SpaceX seeks bite of launch business

By Roger Fillion

An upstart rocket company founded by Internet tycoon Elon Musk is suing Lockheed Martin and Boeing, alleging the defense giants are trying to monopolize the government launch business.

The suit filed last week by Space Exploration Technologies calls on a U.S. judge in California to block United Launch Alliance, the proposed Lockheed-Boeing team that would launch satellites for Uncle Sam. ULA would be headquartered at Lockheed's facilities in Jefferson County.

SpaceX, as the El Segundo, Calif., company is known, also is demanding monetary damages.

In founding SpaceX, Musk has been betting the personal fortune he amassed by co-founding online payment company PayPal - which eBay bought for $1.5 billion.

Musk's initial plan: use small reusable rockets to deploy pint-size satellites weighing about 1,000 pounds at much less cost than today's rocket technology.

More recently, SpaceX disclosed plans to make a lower cost, heavy-lift rocket - the Falcon 9 - to compete with Lockheed's Atlas V and Boeing's Delta IV boosters.

SpaceX said it lined up an undisclosed "U.S. customer" for the Falcon 9 that's believed to be a spy agency.

Lockheed spokesman Thomas Greer said the company hadn't seen SpaceX's lawsuit and couldn't comment.

Boeing spokesman Dan Beck said, "We believe that the SpaceX lawsuit is utterly without merit."

The lawsuit comes as Lockheed and Boeing await word from federal regulators on whether their proposed joint venture will pass antitrust muster.

The Federal Trade Commission faces a Monday deadline to issue a decision, although it could seek more data.

Beck said Boeing is "confident" the FTC will determine that the venture is "not a threat to competition."

When they announced their plan in May, Lockheed and Boeing said the government would save $100 million to $150 million a year on satellite launches.

Actual rocket manufacturing would occur at Boeing's production facilities in Decatur, Ala.

Some have questioned whether ULA would indeed be a good deal for Uncle Sam.

"We're going to have two companies building two rockets out of one factory, which is the worst of all possible worlds," said John Pike, director of GlobalSecurity.org.

Copyright 2005, Rocky Mountain News