Satellite Owner Says SpaceX Owes $50 Million Or Free Flight (reuters.com)

An anonymous reader quotes a report from Reuters: Israel's Space Communication Ltd said on Sunday it could seek $50 million or a free flight from Elon Musk's SpaceX after a Spacecom communications satellite was destroyed last week by an explosion at SpaceX's Florida launch site. Officials of the Israeli company said in a conference call with reporters Sunday that Spacecom also could collect $205 million from Israel Aerospace Industries, which built the AMOS-6 satellite. Spacecom has been hit hard in the aftermath of the Thursday explosion that destroyed the SpaceX Falcon 9 rocket and its payload. The Israeli company said the loss of the satellite would have a significant impact, with its equity expected to decline by $30 million to $123 million. Spacecom shares dropped 9 percent on Thursday, with the explosion occurring late in the last trading day of the week. Trading in the shares was suspended on Sunday morning, and the stock plummeted another 34 percent when trading resumed. In a conference call with reporters, Spacecom's general counsel Gil Lotan said it was too early to say if the company's planned merger with Beijing Xinwei Technology Group would proceed. Xinwei last month agreed to buy Spacecom for $285 million, saying the deal was contingent on the successful launch and operation of Spacecom's AMOS-6 satellite. The $200 million AMOS-6 satellite that perished in the explosion belonged to Facebook and was going to be used to beam internet to developing parts of the world.

Comments

Don't put your one egg

[Anonymous Coward]

in an experimental basket...

Re: Don't put your one egg

[Anonymous Coward]

Don't test your experimental basket with a real egg.

Re: Don't put your one egg

[Anonymous Coward]

At least, this time, he didn't use humans.

Re: Don't put your one egg

[Anonymous Coward]

When someone cracks your egg, remember there ain't no such thing as a free launch.

Re: Don't put your one egg

[Z00L00K]

Always have an insurance - if you don't have an insurance for your stuff that's launched then it's your problem.

Re: Don't put your one egg

[ShanghaiBill]

Always have an insurance

Never have insurance ... unless it is something you can't afford to lose. The cost of insurance is (expected-loss + insurance-company-overhead + insurance-company-profit). If you self-insure, it is just the expected loss. So never insure anything you can afford to lose. It is a bad bet.

Anyway, it is silly to conjecture about who is responsible for what cost. Here is the answer: Read the launch contract.

Re: Don't put your one egg

[Opportunist]

They would probably have been cheaper.

Re: Don't put your one egg

[Anonymous Coward]

Always have an insurance

Never have insurance ... unless it is something you can't afford to lose. The cost of insurance is (expected-loss + insurance-company-overhead + insurance-company-profit). If you self-insure, it is just the expected loss. So never insure anything you can afford to lose. It is a bad bet.

I can see your point. However, there are a few counter points to consider:

1. In some cases, insurance is legally mandatory. Certainly in the countries I've lived it, vehicle owners are legally required to have insurance.

2. Insurance also covers you for additional costs. For example your car may be worth very little, but you still need insurance to cover you for a high value in case you crash into a Ferrari. Or another example: if you have a house fire the insurance will cover the costs to repair it, but it will also cover you for accommodation while it's being repaired.

3. If you've bought something on credit and need to replace it, you might find it difficult without insurance. The item being purchased may be the security for the loan, so if the item is stolen, broken or destroyed then the loan will no longer be valid; you'll be required to pay it off immediately, and you'll also be without the item. Double whammy.

4. It's not just about being able to afford to replace something; it's about being able to replace it quickly. If you know that you've *always* got enough money easily accessible to pay for a replacement immediately without loans and without compromising your other expenses then fine. For most people, that isn't the case.

5. Your health can't be replaced, no matter how much money you have. If you live in a country without free health services and you don't have health insurance then you're taking an enormous risk.

6. If you're responsible for other people's well-being -- maybe you're organising a public event, or a youth group, or whatever -- you absolutely must have insurance. Public liability isn't something you can self-insure.

7. If you're doing something risky (whether it's going on a skiing holiday or launching a satellite), you'd be a fool not to have insurance. You know there are risks and you know that if it goes wrong then it will be very expensive. So you buy insurance.

So in summary, I can see your point, and there are a few cases where it is justified to take the risk and not buy insurance. I don't have insurance (nor an "extended warranty") for any of the domestic appliances in my home, because I can afford to go out and buy a new fridge or washing machine at any time. Yes, it'll hurt the wallet but I can afford it. On the flip side though, I do have insurance for my car, my home, and a few other things, because the insurance does a lot more for me than simply buying a new one.

Bottom line: if you think that insurance is just about paying for a replacement, then you are failing to understand what insurance is actually for.

Re: Don't put your one egg

[vakuona]

Always have an insurance

Never have insurance ... unless it is something you can't afford to lose. The cost of insurance is (expected-loss + insurance-company-overhead + insurance-company-profit). If you self-insure, it is just the expected loss. So never insure anything you can afford to lose. It is a bad bet.

Anyway, it is silly to conjecture about who is responsible for what cost. Here is the answer: Read the launch contract.

Wrong.When you self insure, you do not incur the "expected loss". You incur the "actual loss", which may be nothing, or could be more than anything you have.

If I had a $1m car, if I crashed it, I could lose $1m. But If I insured, I would lose the expected loss plus the overhead and profit margin.

The point of insurance is to remove uncertainty. Insurance is not a bad bet. Even very large companies such as Apple will insure because it is sensible to do so.

If you are self-insuring, you might not be using the funds you set aside wisely.

Re: Don't put your one egg

[fraxinus-tree]

All your points converge to "can't afford". Then again, in company terms, a lot of people can't afford to lose a job. Better yet if it is the company paying the insurance.

And probably, both SpaceX and the sat owner have some kind of insurance coverage.

Re: Don't put your one egg

[ilguido]

The point is: SpaceX is cheaper than other space transport systems because it doen't sell you an insurance. When we compare SpaceX launch cost with (e.g.) ESA launch cost, we compare launch cost against launch and insurance cost.

Re: Don't put your one egg

[TheRaven64]

The cost of insurance is (expected-loss + insurance-company-overhead + insurance-company-profit). If you self-insure, it is just the expected loss.

Not true. The cost of insurance is (expected loss * probability of loss + insurance company profit / overhead). The cost of self insuring is either 0 or the expected loss. It only makes sense to self insure if you have a large number of things that you can average the risk over. It's also often a good idea to take a middle path. For example, the university that I work for gets a good deal on travel insurance, because the underwriters only have to cover very rare (and expensive) payouts. For smaller things, the university covers them itself out of overhead - these things are small and (averaged over all of the staff and students that qualify for the insurance) statistically easy to predict. They know roughly how much the payouts are going to be each year and budget for it. It wouldn't make sense to pass this onto an insurer, because we'd be paying them more than we're getting back. For particularly unusual events, we are covered, because then we average the risk not just among our own staff and students, but among the other tens or hundreds of thousands of people covered by the underwriter's policy. We will, on average, pay more than we get back, but in any given year we might get a lot more back than we pay and it's far easier to budget for that.

Re: Don't put your one egg

[Anonymous Coward]

1. In some cases, insurance is legally mandatory. Certainly in the countries I've lived it, vehicle owners are legally required to have insurance.

Insurance is not legally mandatory in at least some states in the US. In those states, you have the option of posting a bond with the state OR having insurance. If you post a bond you get the money back after you give up driving.

Strangely enough it's more expensive to forgo health insurance in the US with the tax penalty. At least with the bond your money is only devaluing due to inflation.

Re: Don't put your one egg

[Anonymous Coward]

The cost of insurance is (expected-loss + insurance-company-overhead + insurance-company-profit). If you self-insure, it is just the expected loss.

Not true. The cost of insurance is (expected loss * probability of loss + insurance company profit / overhead).

I think you mean expected loss * estimated probability of loss + insurance company profit + insurance company overhead.

Re: Don't put your one egg

[bluefoxlucid]

Actually, it's simpler than that. If you have one, insure; rare failures mean insurance is cheap, and frequent failures mean you're taking a bad gamble trying to dodge that hefty premium. If you have one thousand, self-insure; you're approaching risk parity with general population, and insurance would have a lesser stabilizing effect.

Self-insurance doesn't really just save you money. In theory, it's marginally-cheaper than buying insurance; and in practice, many insurance companies charge below-cost premiums to buy an opportunity (you're trying to transfer a threat). Progressive Insurance Co., for example, charges $0.96 in premiums for every $1 paid out; they have an income of $1.02 for every $1 paid out because they buy stable investments and collect interest.

Even without that, you have the risk of coming in a standard deviation lower (opportunity: your failure rate is slightly-lower than average and saves you money) or higher (threat: your failures are frequent, and cost you money). When you have few repeatable risk events (e.g. one car), the difference is 100% of cost, often lopsided (e.g. the cost of insurance is 1% of cost). When you have many repeatable risk events (e.g. a fleet of cars), the difference is in a much narrower range, centered more closely around the cost of insurance (e.g. you can expect to pay 0.98%-1.02% versus insurance). Self-insurance is riskier than insurance, and avoids the cost of logistics to manage insurance, while providing opportunities (e.g. you can skip warranty service for a computer fleet and instead self-insure, and self-build, possibly saving costs if your IT helpdesk is frequently underutilized and has time to replace hard drives or upgrade components).

Re: Don't put your one egg

[bluefoxlucid]

If you're self-insuring, the funds you set aside can sit in a 1% market fund and collect interest, or in a longer-term fund with bigger payouts. In general, you'll have liquid capital and such investments; if you have a risk event and tap your liquid capital, then you stop putting profits into your investment accounts and top your liquid capital back up. You might need to take a short-term loan and wait 6 months so you can pull money out of your investments--lose an extra 0.5%, pay it back with money that's grown by 11% over the past several years.

Re: Don't put your one egg

[fluffernutter]

Does SpaceX have surge pricing?

Re: Don't put your one egg

[bluefoxlucid]

It depends on what you mean by "estimated." Insurers estimate probability by statistical analysis, meaning they have large populations and predictable probability of loss. Probability is given by mean, deviation, and confidence interval; analysts use tools such as Monte Carlo Simulation to produce concrete outcomes which say "X outcome is exactly n% likely", which gives you a graph (a Monte Carlo Histogram). The outcome probability will show you that it's e.g. 90% likely you'll pay less than $1000, and 98% likely you'll pay less than $1,150, and 70% likely you'll pay less than $600, and so forth.

You pick how much risk you can tolerate (2%, 10%, etc.) and assume that a worse event is failure. If you have contingencies for such failures, you can handle that. Ongoing, this is a major concern; for one-time events, it tells you if you can do what you want to do or if you need to find a way to reduce risks.

Re: Don't put your one egg

[Type44Q]

There "am not," huh... Look, just because using "ain't" makes you sound like your parents were siblings, that does not mean you're not allowed to use it correctly (i.e. proper grammar is within the reach of even inbreds). ;)

Re: Don't put your one egg

[jimtheowl]

It also made him sound like a comedian, which I think was the underrated point.

Re: Don't put your one egg

[Teancum]

In some cases, insurance is legally mandatory.

Which is why this whole thread is just silly including all of the counter arguments..... as in this particular case for spaceflight it is required due to regulations made by the FAA-AST (the guys who regulate private commercial spaceflight in the USA). It is also required by treaty so far as it is the government itself that assumes liability for any 3rd party damage... and the government gets that out of the hide of the people who send stuff up.

This payload wouldn't be uninsured because it can't be uninsured. The insurance policies in place are required even before a launch permit is issued.

Re: Don't put your one egg

[bobbied]

Always have an insurance - if you don't have an insurance for your stuff that's launched then it's your problem.

Insurance is a sucker's bet. Think about it.. You are literally betting that you will loose... Insurance like extended warranties are *always* bad ideas for the consumer. If nothing goes wrong, you pay, If you suffer an insured loss, you pay, perhaps a bit less than the loss, but you pay.

Use insurance as a tool, not as an investment. Of course, use it where legally mandated, as a way to reduce risk (such as buying term life insurance to protect your family) and when creditors mandate it (such as terms for getting a mortgage). After that, understand that insurance companies are out to make money by selling you peace of mind at more than the actual risk will likely cost.

Re: Don't put your one egg

[coofercat]

There are two kinds of insurance on cars, and so, I'd imagine there would be on aeroplanes, space rockets and just about anything else that flies about.

Third Party - we'll pay to fix up anyone, or anything that is damaged by you
Fully comprehensive - We'll pay to fix you up as well as anything you hit along the way

The first is mandatory (depending on jurisdiction), the second is not. Seemingly Spacecom decided not to bother with the fully comp. insurance and now think that SpaceX should provide the services of that sort of insurance for free.

This all gets complicated because I suspect SpaceX have insurance against this sort of problem. However, just because they have doesn't mean they should have to pay out. Somewhere there's a very thick contract, and it'll state who pays for what - I'll bet it's not SpaceX in this case though.

Re: Don't put your one egg

[Teancum]

Given the circumstances of how this rocket exploded, it seems entirely reasonable that SpaceX should open up another flight spot to send up a replacement vehicle. The contract was for the flight, not the launch vehicle itself.

As for who is going to foot the bill for that flight... after Spacecom has already paid for this flight that never happened in the first place... that is between SpaceX and any insurance companies they may have against this kind of disaster. In this context, it is likely to be seen as an industrial accident rather than a space transportation issue, so there likely will be other insurance companies getting into the fray. As a matter of fact, the insurance on the satellite itself is covered under a marine transportation insurance contract that was valid until the moment of launch when other contracts kicked in.

Most of what Spacecom is talking about here though is that there was a contract clause that either refunded the launch cost (which was about $50 million) or an assurance that a loss of vehicle would result in a flight getting scheduled at a later time. I would expect the same sort of thing from FedEx or even the USPS if a package was lost and never delivered. Of course package insurance applies even in that situation.

Re: Don't put your one egg

[Kjella]

It only makes sense to self insure if you have a large number of things that you can average the risk over. It's also often a good idea to take a middle path. For example, the university that I work for gets a good deal on travel insurance, because the underwriters only have to cover very rare (and expensive) payouts.

In that particular case it might also be to have a professional organization that can help travelers in need, do fraud detection and so on, not the monetary risk as such. It also depends on how deep pockets you can pull on, like NASA is not really just NASA they're a branch of the US government. If you have an understanding that this business unit will ordinarily deliver a good profit and occasionally a huge loss the parent unit/company/owners might decide they'll be your de facto insurance, eating the loss when it happens.

Anyway, I'm not sure if you can count this one towards failed launches, if you count a failed ground test then you'd also have to count all the successful ones. They did blow up the payload though, maybe next time they'll use a dummy until it's for real. I mean with this super-chilled fuel they use now they have to drain it after the test and do it again when the launch window opens, it's not like the rocket stands there ready to go. Though I suppose you'll need an awfully big crane....

Re: Don't put your one egg

[rch7]

SpaceX didn't have insurance. Satellite was insured but it isn't clear if it applies to real launches or to testing too, and if it covers additional consequential losses.

http://www.bloomberg.com/news/...

Re: Don't put your one egg

[Anonymous Coward]

If you're self-insuring, the funds you set aside can sit in a 1% market fund and collect interest [...]

Or you can buy insurance and by and index fund (like VFINX) and get 11% over the last five years, or 7% over the last ten. If you don't want to go all-equity, buy a bond index (VSBSX) to moderate any downturns.

http://www.fool.com/investing/general/2016/01/06/warren-buffetts-15-minute-retirement-plan.aspx

The opportunity cost of self-insuring can be quite large.

Re: Don't put your one egg

[farble1670]

I would expect the same sort of thing from FedEx or even the USPS

Someone get on the phone with Elon and let him know that some guy on the internet thinks rocket flights are comparable to a UPS package delivery and that the same replacement policy should apply.

Re: Don't put your one egg

[Teancum]

Have you ever heard about satellite insurance? About about an analogy?

It sounds like both have flown way over your head.

Re: Don't put your one egg

[farble1670]

Have you ever heard about satellite insurance?

No, I don't own a satellite.

About about an analogy?

Like comparing rocket flight to package delivery? Thanks for furthering the discussion. Not being an aerospace engineer, I appreciate you putting it in terms us lowbies can understand.

Re: Don't put your one egg

[Anonymous Coward]

His use of ain't is correct TANSTAFL

Re: Don't put your one egg

[Coren22]

You may be trying to be funny, but you do realize that Uber does hold insurance on their drivers, don't you?

https://newsroom.uber.com/5646...

The lack of insurance argument was always bullshit, it was never an issue with Uber.

Re: Don't put your one egg

[fluffernutter]

In October, Aviva Insurance began cancelling the policies of clients found to be driving for UberX. Politicians and police now have concrete proof that UberX drivers are not covered by their personal policies and yet police have no plans to take action; this, while they tow hundreds of cars during the “parking blitz.”
According to Uber’s own numbers, there are now 20,000 uninsured UberX drivers on Toronto’s roads.
This begs the question: Which is the greater societal crime to which enforcement resources should be allocated, illegal parking or uninsured vehicles?
https://www.thestar.com/opinio...

"While the possible legality of the Uber taxi system (or how it may be regulated) remains to be seen, what is clear is the huge risk the current system poses from an insurance and liability perspective."
https://www.chinneck.ca/the-hi...

"A crash involving an Uber driver carrying a passenger is grabbing headlines in Toronto after the driver’s insurance company refused to cover his claim — and dropped him. The reason? The driver, Tawfiqul Alam, had personal auto insurance, but was using his car for commercial purposes." http://www.lfpress.com/2015/08...

Re: Don't put your one egg

[Coren22]

Um, Tawfiqul Alam should have been using Uber's commercial insurance policy that they offer, Aviva is apparently morons as they are dropping people for non commercial policies that are used in non commercial times (otherwise it is Uber covering the incident).

You haven't actually disagreed with me in a single point. Where do you show that Uber does not carry commercial policies as they state that they do? It seems you are just pointing out people doing what people do, which is do stupid shit.

If you drive your car in a commercial situation sometimes, and your car is covered with a commercial policy at those times, why should your personal insurance company drop you when your car is not being driven commercially? This makes no sense, the cars are not commercial vehicles, and are covered by commercial policies when they are being used for commercial purposes, so there is no issue with the personal policies except when someone apparently tries to use the wrong policy in the wrong situation.

I guess I need to reiterate, Uber carries commercial policies on their drivers:

https://newsroom.uber.com/5646...

There are no uninsured Uber cars carrying passengers, that is covered by a policy, and personal insurers dropping people off their policies is more of a sign of a misunderstanding than an issue with Uber.

Re: Don't put your one egg

[fluffernutter]

So I guess you just need to make sure your driver isn't confused about the insurance before you get into the vehicle. It indicates that in every driver profile, right?

Re: Don't put your one egg

[Coren22]

No. That driver needs to resubmit the claim to the correct insurance.

From Your Fing Article:

WHAT UBER SAYS

Though most Uber drivers don’t carry commercial insurance, they’re required to have personal auto insurance to be a driver, said Uber spokesperson Susie Heath in an email.

More importantly, they’re covered by Uber’s commercial insurance policy when they drive for the app.

Uber rides are backed by $5 million to cover bodily injury and property damage, which is over double the requirement for taxis in London, Heath said.

“Riders, drivers and the community at large can rest assured knowing they are also covered by our commercial policy in addition to coverage maintained by the driver.”

Heath wouldn’t comment on Alam’s specific case, but said that “all UberX rides are insured with liability coverage. Our insurer reviews these claims and we’re committed to helping drivers understand the resolution process.”

So, the question is, why isn't he submitting the claim to the Uber commercial insurance company that he is covered by when driving passengers?

Re: Don't put your one egg

[fluffernutter]

All I know is that it seems very convoluted.

Spaceflight is risky

[ihtoit]

Launching doubly so. OK this was a ground test of the engines. We still don't know what caused the explosion.

And hey, wasn't the satellite INSURED??

Re:Spaceflight is risky

[kuzb]

Who in their right mind would insure a satellite of that cost for flight on an experimental vehicle? I can't see any insurance company betting on something that high risk.

Re:Spaceflight is risky

[mwvdlee]

There are insurance companies that do, but the premiums skyrocket.

Re:Spaceflight is risky

[Anonymous Coward]

They only issue policies with $50m excesses.

Re:Spaceflight is risky

[Anonymous Coward]

It's actually stipulated in the contract with the launch facility to have insurance.
Ungodly expensive insurance for sure, but required.

Re:Spaceflight is risky

[Anonymous Coward]

And the insurance counts almost always for the flight after a "deliberate firing" of the rocket.

So, even if it was insured, it could be it wasn't insured for an "accidental explosion during testing".

Re:Spaceflight is risky

[Anonymous Coward]

The returned Falcon 9 first stage that SpaceX wants to refly might be experimental, but this was on a brand new Falcon 9. Which have flown 27/29 missions successfully. Spacecom bought $330 million worth of launch insurance (which wasn't used for the static fire explosion because it was separately covered by pre-launch insurance) for $40 million.

So if you figure a 93% chance that the insurance company gets $40 million scot free, and a 7% chance they end up forking over $330 million, the insurance company still comes out way ahead (handwaving liquidity costs, chances the satellite will fail in orbit over 15 years, etc).

Re:Spaceflight is risky

[jeti]

AFAIK the launch was insured. This does not include the static fire test.

A lot of satellites are not insured. Buying insurance means that you pay money to reduce financial risk. On average, you pay more than you would without insurance. That's how insurances make money. If you can afford the risk, you'll probably not want to pay for insurance.

Re:Spaceflight is risky

[Anonymous Coward]

They're out of this world.

Re:Spaceflight is risky

[Anonymous Coward]

*badamtss*

Re:Spaceflight is risky

[stealth_finger]

Launching doubly so. OK this was a ground test of the engines. We still don't know what caused the explosion.

And hey, wasn't the satellite INSURED??

Why was it even attached during the test of the engines?

Re:Spaceflight is risky

[Opportunist]

Everyone who can assess the risk. Premium is payout * expected risk + profit.

You can insure anything. If you're willing to pay the premium. You can even insure something against an event that will certainly happen, just be prepared to pay a premium higher than the damage.

Re:Spaceflight is risky

[Anonymous Coward]

You can even insure something against an event that will certainly happen, just be prepared to pay a premium higher than the damage.

This is often called "assurance" instead of "insurance", the most obvious being life assurance (as you're sure to die, it's just a matter of when).

Re:Spaceflight is risky

[Richard_at_work]

What makes the Falcon 9 an "experimental vehicle" any more than any other launch system?

The Falcon 9 has had 27 successful launches and 2 failures in 6 years. It has had three major variations in that time (v1.0, v1.1 and FT).

The Ariane 5 has had 83 successful launches and 2 failures in 20 years. It has had five major variations in that time (G, G+, GS, ECA and ES).

The Atlas V has had 60 successful launches and no failures in 14 years. It has had nine major variations which have flown in that time.

I'm not seeing anything which would put the Falcon 9 into a higher risk band than its contemporaries...

Re:Spaceflight is risky

[Richard_at_work]

Because integration of the payload onto the stack takes days to carry out and test - you simply cant do a test and then reintegrate the payload because that means much more time between the test and launch, which means the test is basically invalidated.

I'm not sure if the stack remains vertical after the test, but I would think that raising and lowering the stack to and from a vertical position introduces brand new variables all of its own (moving debris around internally etc).

Re:Spaceflight is risky

[Anonymous Coward]

Because it's much safer - would you really feel safe putting a satellite over a few hundred tons of explosive fuel?

Re:Spaceflight is risky

[mrbester]

You could even say that they are astronomical.

Re:Spaceflight is risky

[Anonymous Coward]

Who in their right mind would launch a satellite worth as much as their entire company on an experimental rocket?

Re:Spaceflight is risky

[stealth_finger]

Surely it can't be that hard to attach and detach. I'm guessing some pretty robust clamps but it does have to release this thing in space on it's own. How long was it between the test and proposed launch time?

Re:Spaceflight is risky

[Anonymous Coward]

Cheap space launches run by glorified hobbiests with mega-money are a disaster waiting to happen. There's a reason why project run by NASA, ESA, et al, cost a hell of a lot more than projects that are little more than PR vehicles to keep their names in the media.

Re:Spaceflight is risky

[CrimsonAvenger]

And yet, Spacecom is going to be getting ~$200M from insurance on that satellite already. Not sure whether the payout covers just the physical satellite, or the whole shebang, mind you. So this "$50M or free flight" may just be them trying to save themselves the money that they paid SpaceX for the launch....

Re:Spaceflight is risky

[naughtynaughty]

Because the actual launch is typically just a couple of days after the static test firing. It is a complete system check prior to launch.

Re:Spaceflight is risky

[naughtynaughty]

Two days

Re:Spaceflight is risky

[Anonymous Coward]

Hobby. Hobbyist. Why the hell would you spell it "hobbiest"? Do you also complain about SpaceX "lobbiests" ??

Re:Spaceflight is risky

[nine-times]

On the other hand, who in their right mind launches a satallite of that cost for flight on an experimental vehicle without some kind of insurance?

Whether it's technically "insurance", I can't see a company putting such expensive equipment at risk, even the risk of a conventional launch, without a plan of what happens when things go wrong. Even in the case that it's a high-stakes gamble, there should be legal agreements spelling out liability, and exactly what SpaceX is responsible for.

Also, I could see an insurance company covering something so expensive and high-risk. I'd just expect that the insurance would be very expensive.

Re:Spaceflight is risky

[naughtynaughty]

A disaster waiting to happen?

How much longer should we wait for that disaster to happen?

NASA no longer launches rockets and given that two space shuttles were lost along with their entire crews I'd say that NASA's more expensive projects have had some disasters of their own already.

Re:Spaceflight is risky

[110010001000]

Risky? We have been launching satellites into LEO with chemical rockets for over 50 years. Why is it still risky? If you ask the Space Nutters, things like going to Mars is doable. According to them, interstellar travel is possible with todays technologies. We just need to mine asteroids and build a lunch platform in orbit and convert space dust to fuel. These SpaceX guys must not be doing it right. Did they not read the Space Nutters blogs???

Re:Spaceflight is risky

[Drethon]

Who in their right mind would insure a satellite of that cost for flight on an experimental vehicle? I can't see any insurance company betting on something that high risk.

Insurance, corporate gambling where the house (almost) always wins. I'd self insure my car if it wasn't for regulations and the possibility of getting successfully sued for hitting someone if they run a red light.

Re:Spaceflight is risky

[edxwelch]

Yes it was, but they still need to recuperate the cost of the launch

Re:Spaceflight is risky

[NotInHere]

Car insurance makes sense, because car accidents are very seldom compared to the big number of car drivers. If you are involved in an expensive car accident, you shouldn't have to sell your house and everything you own and live in poverty just because of that single accident, which may have been bad luck. Rather, those costs are distributed over the number of insurance customers.

For spacex, it makes no sense to be insured: there are maybe two or three companies in the world that offer the services spacex offers, and the accidents aren't as rare for spacex either.

Re:Spaceflight is risky

[RandomSurfer314]

Yes, it was ensured, though as domestic shipping cargo and not under some better policy that would have been in effect after a launch. That's because the tests were on the ground. It will probably take a while until the lawyers have sorted this out.

Re:Spaceflight is risky

[ThosLives]

No, that's not quite how it works. An individual buying an insurance policy does not, on average, pay more than they would without insurance. All the insured in aggregate, however, do pay more than they would without insurance*.

If an individual on average paid more for insurance than for losses, insurance wouldn't exist with rational individuals. Insurance only works, and makes financial sense, when the individual cost is lower than the loss.**

*It's a little more tricky than straight comparison, because you have to look at discount rates and the like, and the availability of liquid funds to cover a loss. But in general the rule still applies; society in general pays more for insurance than it would without it - but then there is the even trickier thing, when thinking about if the people employed in the insurance industry would be more productive doing other things.

**Things get more murky when insurance is mandated or insurance is used to do more things beside just provide insurance. Consider health insurance in the US - it's not really just insurance, but it's also a population health program. If it was just insurance, it wouldn't do proactive things like preventive maintenance. (Consider - auto insurance doesn't cover driver safety training or periodic car maintenance, even though in aggregate those things would reduce insurance costs).

Re:Spaceflight is risky

[Anonymous Coward]

We still don't know...

Range safety.

Re:Spaceflight is risky

[XXongo]

Why was it even attached during the test of the engines?

Because they didn't expect this to be anything other than routine. If they knew it was going to blow up, they wouldn't have had the satellite on the vehicle.

This was the full-up test, verifying everything was ready to go.

Re:Spaceflight is risky

[Applehu Akbar]

I find it incredible that Facebook didn't think of something like that. Calculating the risk of a launch failure is baked into every satellite revenue projection, leading to a decision to either buy insurance or self-insure.

Re:Spaceflight is risky

[Alioth]

Because it's a test of the whole stack from what I understand. There may (for example) be a destructive resonance that could destroy the rocket in flight which could be detected during an engine test, which only occurs when the payload is installed. You obviously want to find this out now when you can abort a test and find out what's causing the resonance, rather than when the rocket blows up ten seconds after launch.

Re:Spaceflight is risky

[Teancum]

Who in their right mind would insure a satellite of that cost for flight on an experimental vehicle?

First of all, how is this an experimental vehicle and how do you jump to the conclusion that it is such? What was done in this particular SpaceX flight was to do the equivalent of somebody sitting down and turning on the engines and checking the fluids of their car and doing other basic diagnostics evaluating the status of a vehicle before going on a long trip. While unusual for most other companies, it speaks volumes about the reliability of the engines that SpaceX is willing to have them fire multiple times even before they go into space in the first place.

This was not an experimental vehicle in the first place.

Re:Spaceflight is risky

[bobbied]

Who in their right mind would launch a satellite worth as much as their entire company on an experimental rocket?

Someone who is taking a risk, hoping for a big payday if they succeed.

For the failures, there are the bankruptcy courts..

It's called getting rich quick.. Rolling the dice... Betting the farm... Ect.. People do it all the time and loose.

Re:Spaceflight is risky

[Teancum]

So this "$50M or free flight" may just be them trying to save themselves the money that they paid SpaceX for the launch....

It has an even easier explanation:

This was something in the launch contract and a previously agreed upon penalty that would happen if the launch didn't happen. Spacecom is just stating publicly that this clause exists.... something that seems prudent if they are trying to assure their investors that they can financially recover from this disaster.

Re:Spaceflight is risky

[bobbied]

You ALWAYS pay more than the average risk is worth when you buy insurance.... Individuals who suffer an insured loss *sometimes* recover more than they have paid in premiums, but this is the exception.

In my 35 years as an insured motorist I have had 3 claims, two accidents and one hail claim. I estimate the TOTAL paid for these claims to be under $25K. In 35 years I've paid more than $1,000/year in premiums and I estimate that I've paid about 4 times the amount of the paid claims.

I'm keeping the auto insurance company in business.... They know that.... They make SURE you pay generally more than you cost them. You may be up on the house from time to time, but like the casino and gambling, the insurance company (the house) ALWAYS wins.

Re: Spaceflight is risky

[Anonymous Coward]

The problem is that every rocket is technically a bomb going off in one direction...

Re:Spaceflight is risky

[FlyHelicopters]

In my 35 years as an insured motorist I have had 3 claims, two accidents and one hail claim. I estimate the TOTAL paid for these claims to be under $25K. In 35 years I've paid more than $1,000/year in premiums and I estimate that I've paid about 4 times the amount of the paid claims.

Most people do, that is how insurance works... The idea is that if you ever have a big claim, you are then glad you have it...

I pay about $1,700 a year to insure two vehicles and provide me with 300k in liability coverage (the state required levels are a joke and should be raised).

I might pay for 20 years, but if I ever crash into someone and cause them medical injuries, that 300k of coverage will come in really handy.

Honestly, now that I think about it, it still isn't enough... :) Time to raise that...

Re:Spaceflight is risky

[mlw4428]

> I'm not seeing anything which would put the Falcon 9 into a higher risk band than its contemporaries...

Really? Are you sure? I can see that, at its best, Falcon has had nearly 4 times fewer flights and matches the number of failures in a shorter lifespan than Ariane 5. And that's with the contemporaries introducing more variations. That's putting Falcon 9 at somewhere between 33% and 45% more failures than its two contemporaries. What metrics do you look at to determine risk? Everything I'm looking at says that Falcon 9 is a poor gamble, at best.

Re:Spaceflight is risky

[Kinwolf]

Even if insured, insurance doesn't cover lost revenue and delays in the service that would have been offered. That's the real hit to spacecom as building a satellite like this takes 2 years minimum.

Re:Spaceflight is risky

[Anonymous Coward]

> If you can afford the risk...

And that's what companies keep to themselves, and when they get hurt they claim it's too much for them to handle. In other words they make decisions like this: "Let's keep all our money, and if things go bad we'll keep someone else's money".

Re:Spaceflight is risky

[Anonymous Coward]

> An individual buying an insurance policy does not, on average, pay more than they would without insurance

They do pay more: if nothing happens. (pay $2 for something, $3 with insurance).
So I'm out $1 if things go well.

If something does happen they pay less. ie: I need not pay the entire $2 again to recoup my loss, am merely out the initial $1 that I paid in insurance and get a replacement.

That's where the decision is. How likely is something bad to happen to you, to company, etc.

Re:Spaceflight is risky

[Anonymous Coward]

But where do you draw the line between experimental and non-experimental? The presumption is that Falcon 9 would fall on the same side of that line as the rest of these unless you're out to make a point against it by picking an arbitrary measure to split these statistics against Falcon 9.

Re:Spaceflight is risky

[ThosLives]

Ah yes, well, that's true - you do always pay more for insurance than you would if you didn't and the insured event doesn't occur. But that's kind of a moot point isn't it?

Now, if you are arguing that you "always" get less payout than your premiums even if you have an insured event, then either you need to pick a different insurance provider, try to change legislation to fix the rules that facilitate such economic inefficiency, or challenge insurance fraud investigators' prowess by trying to extract the maximum payout for any insured event.

Re:Spaceflight is risky

[bobbied]

You insure what you cannot afford to loose.... But remember, having high insurance coverage makes you a target, just as much as having assets to loose.

I figure that if I get into a serious accident that's my fault and I have legal liability, I want enough insurance that it's not worth trying to go after me for more than the insurance company will pay.

So, if you don't have much in assets, don't bother buying additional insurance. Now if you HAVE something, THEN by all means, up your liability coverage, if for no other reason than to reduce your risk exposure.

I'd recommend you consider a personal liability policy instead of adding to your auto insurance limits. It will cover you for more than just auto accidents and will cost you about the same.

Re:Spaceflight is risky

[Anonymous Coward]

Exactly. If you believe something hard enough, it will come true. The Space Nutter mindset is Disneyworld for adults...

Re:Spaceflight is risky

[Anonymous Coward]

Seek therapy.

Re:Spaceflight is risky

[FlyHelicopters]

You insure what you cannot afford to loose.... But remember, having high insurance coverage makes you a target, just as much as having assets to loose.

You do, if you're a selfish bastard who takes no personal responsibility for anything...

I figure that if I get into a serious accident that's my fault and I have legal liability, I want enough insurance that it's not worth trying to go after me for more than the insurance company will pay.

Or, perhaps you have enough to cover what you are responsible for in the event you hurt someone else.

You know, like a decent human being would...

So, if you don't have much in assets, don't bother buying additional insurance.

Only an asshole thinks like that...

Re:Spaceflight is risky

[Anonymous Coward]

Every launch is completely insured. There are many companies that jump at the opportunity to insure a launch. Maybe you should do research first?

Re:Spaceflight is risky

[Richard_at_work]

The number of failures doesn't make a vehicle "experimental", and the point of the figures is to show that the Falcon 9 is launching pretty much on the same cadence as two very-much-not experimental rockets.

The Falcon 9 is no more experimental than either of the two examples I give.

On another note, you say that the Falcon 9 has had nearly 4 times fewer flights and matches the number of failures in a shorter lifespan than the Ariane 5. This is true.

Its also totally misleading, because the Ariane 5 had had both of its complete failures by launch 14 (launches 1 and 14, to be precise), and both of its partial failures also by launch 14 (launches 2 and 10). Since then, its been perfect in its success.

Compare that to the Falcon 9 - its first failure was launch 19, and its second failure on launch 29. There is no guarantee of a third failure - the Ariane 5 has had 71 successive successful missions under its hat, despite having two complete failures under its belt before the Falcon 9 even had one.

Going by your argument, the Ariane 5 is a worse risk than the Falcon 9...

Re:Spaceflight is risky

[Anonymous Coward]

Going by your argument it doesn't matter how often you fail just as long as you keep showing up. Granted, showing up is the first step in success but being there more often than another doesn't mean you're more successful. Aside from that, using your metric, we can't be sure if the Falcon 9 is going to be any more successful in the long run until those flights occur but in the meantime I think it's fair to consider it "experimental" since the tests that separate the trials that are still nothing more than a "what/if/but" scenario until they play out in reality.

Re:Spaceflight is risky

[Anonymous Coward]

It's a bet, it depends on how the loss would affect you as to whether or not you want to cover that possibility. If you do it'll cost you a bit more upfront but you won't be out of pocket if it all goes wrong. Now for a £300 washing machine insurance (or extended warranties) is likely not worth it but for a $200 million satellite it probably is. As $10 million in insurance is much easier to swallow than a $200 million loss, but it depends on individual circumstances as to if this bet is worthwhile.

Also you fail to note that insurance companies both use your premiums to both invest (to make more money) and to take out insurance on themselves (for when shit goes really wrong), a short position is a common mitigating strategy to exceptional events. So it's not necessarily the case that total premiums > total payout (I don't have numbers, so I don't know what the actual case is). But it's definitely not clear cut and insurance companies have gone bust, as working out risk is hard.

Re:Spaceflight is risky

[Baron_Yam]

Risky doesn't mean impossible.

We can go to Mars if we want to throw enough money at it. Living there in a self-sustaining colony of healthy human beings is probably awaiting several engineering and medical breakthroughs, though.

If you're willing to risk a roughly 99% chance of dying in flight due to environmental failure, we could manage an interstellar generation ship - again, by throwing enough money at it.

Re:Spaceflight is risky

[Anonymous Coward]

What in god's name are you smoking?

Re:Spaceflight is risky

[Teancum]

That is like complaining about the difference in spelling between dwarves and dwarfs (something that JRR Tolkein himself spilled far too much ink over if you want to get into the details.... and it was Tolkein who coined "dwarfs" too). Spelling something "hobbiest" really is a valid, if perhaps from a 21st Century rather archaic way of spelling things.

Really, complaining about this as a grammar Nazi is about as low and uninformed as you can get.

Re:Spaceflight is risky

[meerling]

Definitely risky. That's why all the launch agreements have some kind of sh## happens clause in case it blows up or whatever. That's also why people insure their asset launches. Sounds like that company wants to ignore it's contracts and double dip, unless of course it was too stupid to buy the insurance in the first place.
(Obviously I haven't seen the actual contract, but as those clauses are standard for everybody else in the space industry, I see no reason why SpaceX wouldn't have them as well, they aren't idiots.)

Re:Spaceflight is risky

[meerling]

Lloyds of London. They'll insure virtually anything, even someones breasts. (They've done it.)

Re:Spaceflight is risky

[meerling]

Have you forgotten the multiple Ariane Rocket failures?
It happens to everyone in the space industry.

Re:Spaceflight is risky

[Anonymous Coward]

Don't reply anonymously to your own posts, shithead.

Re:Spaceflight is risky

[thegarbz]

Falcon has had nearly 4 times fewer flights and matches the number of failures in a shorter lifespan than Ariane 5.

There's this thing called math that shows across the variants the Ariane 5 on average has had less than double the number of successful launches than a Falcon 9 which incidentally has had a higher number of successful launches per variant than the Atlas V.

You missed that key word "variant", a variation or change in design that makes a ship different to the previous one. Based on the this Atlas V is more experimental than the Falcon 9.

Re:Spaceflight is risky

[Anonymous Coward]

LOSE, not loose, you dimwit.

Re:Spaceflight is risky

[Anonymous Coward]

The concept of a generation ship *guarantees* you will die in flight. That's the point! Your grandkids or later will be the ones who arrive.

Re:Spaceflight is risky

[Anonymous Coward]

Don't imagine there's only one person calling you nutcases out on your bullshit.

How's the Mars condo coming along? All figured out?

Re:Spaceflight is risky

[Anonymous Coward]

Two catastrophic failures in 7 flights should get the attention of even the most ardent Musk fanboi. It is a far worse record than Atlas V, Delta IV, and Ariane 5 at this point in their service careers.

Re:Spaceflight is risky

[Anonymous Coward]

WTF?

Re:Spaceflight is risky

[farble1670]

You missed that key word "variant", a variation or change in design that makes a ship different to the previous one

Is that change in a design, like the logo painted on the side? Or a completely new engine subsystem? My guess is that it's much closer to the former.

Re:Spaceflight is risky

[farble1670]

For the failures, there are the bankruptcy courts..

... and lawsuits.

Re:Spaceflight is risky

[farble1670]

You ALWAYS pay more than the average risk is worth when you buy insurance.... Individuals who suffer an insured loss *sometimes* recover more than they have paid in premiums, but this is the exception.

You can't ALWAYS pay more and SOMETIMES recover more than you paid. Perhaps you don't know the meaning of the word ALWAYS.

Re:Spaceflight is risky

[TangoMargarine]

It's possible to have rocket launch failures where the rocket doesn't explode. And even if it does explode and they have enough warning, e.g. the Apollo craft had the Launch Escape System to get the payload (including astronauts...) out of harm's way.

Re:Spaceflight is risky

[TangoMargarine]

It's probably only designed to detach the way it does during the mission once. You've heard of explosive bolts?

Re:Spaceflight is risky

[TangoMargarine]

"Hobbiest" is the one who is "most hobby", duh.

Re:Spaceflight is risky

[Anonymous Coward]

You need to lose an o.

Re:Spaceflight is risky

[Anonymous Coward]

Spoken like a true insurance lackey. You have insurance to you know, insure you if you have an accident (your fault or not). That is the responsible thing to do.
If someone else is hurt and your insurance company doesn't cover the costs perhaps it's time to talk about why a hospital stay costs on average $15k /day, and 15 minute procedure costs hundreds of times my hourly wage. Mitigating risk is what everyone does. It's not my fault I live in a society filled with greed.

Re:Spaceflight is risky

[Teancum]

No, a legitimate grammar rule is to convert a "y" into an "i" when adding a suffix. A few exceptions happen also... hence why "hobbyist" is a thing.

Otherwise..... learn a little about the language you are using and realize it is convoluted and that stuff like standardized spelling is not nearly as standard as you think. Besides, you understood the context when it was originally given, or are you that clueless about context too?

Re:Spaceflight is risky

[bobbied]

Go ahead and buy more insurance then... Better figure what kind of damage you *can* cause with that car of yours. If you seriously harm someone, you can be liable for decades of medical care, so I suggest you go for a few million of liability coverage, just on the chance you need it. Oh, and them multiply that number by 3 because the lawyer is going to get 2/3rds of any settlement... Even 10 million might not be enough you know...

What you are going to do if the bills run more than your insurance coverage... Go Bankrupt trying to pay? Toss your kids future on the ash heap of history because you had a traffic accident?

I'm all for being responsible for my mistakes, but in today's world there has to be some kind of limit. Your insurance coverage is usually that limit.

Re:Spaceflight is risky

[bobbied]

No, in the long run, you will pay more than you get.... ALWAYS.... It's how Vegas makes money and how insurance company's operate..

Re:Spaceflight is risky

[bobbied]

Same thing... Bankruptcy is a civil suit...

Re:Spaceflight is risky

[FlyHelicopters]

I'm all for being responsible for my mistakes, but in today's world there has to be some kind of limit. Your insurance coverage is usually that limit.

Frankly, that is bullshit...

Why? Most states don't require more than 50K of insurance...

That won't replace many cars, much less pay any medical bills... If you had 50K of insurance and totaled my truck, you wouldn't have enough insurance...

Re:Spaceflight is risky

[thegarbz]

Fundamental changes in design. The variants retained a similar shape but for example the Ariane 5 changed from a payload of 6100kg to 21000kg, was able to reach different orbits, changes in the number of payloads, facilitated by changes in sizes and ratios of components, changes to fuel types in some cases, etc. They were evolutionary changes and not a ground-up redesign, but well and truly enough of a change to consider the new rocket "experimental" by any definition.

Re:Spaceflight is risky

[farble1670]

So the "Ariane" designation only pertains to the "shape" of the rocket? Well, that's a little hard to believe but what do I know.

Re:Spaceflight is risky

[mattack2]

For spacex, it makes no sense to be insured: there are maybe two or three companies in the world that offer the services spacex offers, and the accidents aren't as rare for spacex either.

If they fail 1/5 of the time, but the insurance costs 1/6 of the cost of a launch, wouldn't the insurance be worth it? (..and yes, the insurance rate would thus likely adjust, but also, the failure rate would hopefully lessen too...)

BTW, I usually argue against insurance (and have vaguely thought about posting a bond instead of getting car insurance, which you can do.. but haven't run the #s to see if it was cheaper.. yes, I'm "gambling" that any accident wouldn't be my fault.. and I already only have the minimum insurance)... but it seems like it can make sense in some cases. One other case was treadmill repair. Even if you ignored the (seemingly inflated) funny money #s they put on the receipts, even one repair "paid for itself", by the people using their treadmills as clothes racks subsidizing me.

Re:Spaceflight is risky

[FlyHelicopters]

Spoken like a true insurance lackey. You have insurance to you know, insure you if you have an accident (your fault or not). That is the responsible thing to do.
If someone else is hurt and your insurance company doesn't cover the costs perhaps it's time to talk about why a hospital stay costs on average $15k /day, and 15 minute procedure costs hundreds of times my hourly wage. Mitigating risk is what everyone does. It's not my fault I live in a society filled with greed.

I bolded the key text you wrote.

You're a fucking asshole, plain and simple, thanks for spelling it out for everyone to see...

Re:Spaceflight is risky

[TangoMargarine]

Well somebody's getting rather defensive over a joke. Take a chill pill, man.

Re:Spaceflight is risky

[Whorhay]

4 times??? that's some bad math there.

4 x 27 = 108
3 x 27 = 81

Saying 4 times is just a little hyperbolic, when saying 3 times would be more accurate though not perfect.

Re: Spaceflight is risky

[Anonymous Coward]

Frankly, that is bullshit...
Why? Most states don't require more than 50K of insurance...
That won't replace many cars, much less pay any medical bills... If you had 50K of insurance and totaled my truck, you wouldn't have enough insurance...

I believe it was already mentioned, the amount of assets you have that can be taken is a limiting factor. A lot of people don't have property that you can take, no matter what the judgment.

And they aren't going to insure themselves for you.

This is especially a problem given the fraudsters who will gladly set you up for a ripoff. There are people who make a living off that.

But what are you going to do, take a person's house away to pay for your truck? Seems a bit off. And of course, they might not have a house.

Re:Spaceflight is risky

[Anonymous Coward]

It's whatever conveniently allows internet neckbeards to argue with one another over meaningless semantics

Re:Spaceflight is risky

[thegarbz]

No. "Ariane 5" designates primarily a rocket of the same general shape / type. "Ariane" is a project name for ESA's civilian launch vehicles. The Ariane 1 and the Ariane 5 look nothing alike, and actually the Ariane 5 was a ground-up redesign from the 4.

Re:Spaceflight is risky

[bobbied]

I'm all for being responsible for my mistakes, but in today's world there has to be some kind of limit. Your insurance coverage is usually that limit.

Frankly, that is bullshit...

Why? Most states don't require more than 50K of insurance...

That won't replace many cars, much less pay any medical bills... If you had 50K of insurance and totaled my truck, you wouldn't have enough insurance...

If your state is one of those, then YOU carry insurance to cover the difference, you can afford it if you have 50K in a vehicle... You know there are SOME states that declare automobile accidents "No Fault" (I'm looking at you Michigan) in which case if somebody runs into you, YOUR insurance pays. Where I found it infuriating when the drunk hit my parked truck in Jackson MI that MY insurance had to pay for the damage, I see the perverse sense it makes to have laws like this.

I do exactly this, I carry insurance for ME because I live in an area were you are more often than not going to be hit by an uninsured illegal alien who doesn't legally have two pesos to rub together and is unlikely to be able to EVER pay for a $600 ambulance ride to the emergency room.

Re: Spaceflight is risky

[FlyHelicopters]

And they aren't going to insure themselves for you.

Then they are irresponsible and should not be allowed to drive.

Re:Spaceflight is risky

[Anonymous Coward]

It is possible, but it is also expensive. SpaceX's mantra has been "let's remove all those stupid NASA safeguards and see if we can turn those extra costs into pure profit. Obviously, not readily.

Re:Spaceflight is risky

[Anonymous Coward]

I had 2 hit and runs and 3 tree incidents. Roughly 60k later, State Farm didn't drop me to my surprise. I'm now ahead after having paid premiums from 17-42 years old.

Re:Spaceflight is risky

[Coren22]

Brisket...why do you ask?

Did they figure out what caused the explosion yet?

[Anonymous Coward]

I'd love to know what caused the explosion to begin with. The video didn't reveal anything obvious.

Contracts plus Contracts

[Anonymous Coward]

The $50 Mil is by the current contract. Basically SpaceCom (The owners) get a refund on the payment for the launch. Pretty simple.
Facebook had a stake in the data traffic. Not the physical satellite. SpaceCom had it built and sold rights to the traffic to different companies. Pretty simple.

SpaceCom is now working with other companies to create a terrestrial radio network that can support the bandwidth that was presold.

Better off Dead kid / Southpark Loch Ness Monster

[Anonymous Coward]

"I'm going to need about $50 million dollars!"

IMO, both companies should have had insurance policies for this, *and* there should have been a "what happens if it blows up" clause in the contract.

I don't get that

[Anonymous Coward]

I'd expect risk management to be part of doing business in this area. Sometimes things go bang -- should be more or less business as usual. Insure, or equivalently set aside, according to the probability of failure.

Is this quibbling-after-the-fact also business as usual? As if they didn't expect this outcome were possible?

Please, someone with more knowledge chime in.

Somewhat disgusting, as it is.

Re:I don't get that

[Shimbo]

Is this quibbling-after-the-fact also business as usual?

I'm not seeing a lot of quibbling; Spacecom is doing a bit of damage control with investors. SpaceX is privately owned, so doesn't need to play that game.

Spacecraft did not belong to Facebook

[Strider-]

What's with these summaries? Facebook had nothing to do with the spacecraft, other than the fact that they had an agreement in place to lease a significant portion of the Ka-Band transponders on the satellite.

Re:Spacecraft did not belong to Facebook

[Anonymous Coward]

Didn't you know? Facebook (or more correctly: Mark Zuckerberg) OWNS EVERYTHING these days! And HE'S GOING TO SAVE THE WORLD!

Re:Spacecraft did not belong to Facebook

[Opportunist]

The fact that he's going to save the world is pretty much the problem, 'cause we ain't going to be the ones who get to decide what to restore and when.

Re:Spacecraft did not belong to Facebook

[Anonymous Coward]

I think you're talking about Google, m'kay?

Oh, that's right, Google makes Android so Slashtards have to pucker up and smooch their rear even as their business model and data mining collecting methods are far worse than what Facebook does. And why? Because.... Teh LinuX!!!!!111!!!!!

Re:Spacecraft did not belong to Facebook

[Opportunist]

And just 'cause Google still exists means I can't hate Fecesbook? That's like saying I can't hate Trump 'cause Clinton is still existing.

The idea that both are despicable is impossible, yes?

Re:Spacecraft did not belong to Facebook

[Anonymous Coward]

Like I always say: if you don't have enough hate in your heart for many people you need a bigger heart.

Re:Spacecraft did not belong to Facebook

[penandpaper]

Obviously the turd with the peanut is better than the turd with the corn.

Duh. Why would anyone think that they are both disgusting?

Re:Spacecraft did not belong to Facebook

[DerekLyons]

Because "Facebook" is clickbait for the /. set.

Re:Did they figure out what caused the explosion y

[NotAPK]

What, you couldn't see the UFO flying from frame right to left and was overhead at exactly the time of the explosion? Go check the video...I'll wait.

Depends on the contract

[Anonymous Coward]

I sincerely hope SpaceX didn't sign a bad contract with the satellite owner. OTOH, if Israel wants to subsidize Israel's Space Communication Ltd by accepting the 200M extorsion demand on IAI, then it's a domestic political choice.

Re:Depends on the contract

[Anonymous Coward]

I sincerely hope the satellite owners didn't sign a bad contract with SpaceX. OTOH, doing dangerous experiments with other people's cargo on board that result in explosions has always carried a liabiltiy.

Re:Depends on the contract

[naughtynaughty]

What sort of dangerous experiments are done when a Falcon-9 is launched? Be specific.

This was the 29th launch of the Falcon-9, the only one to blow up on the launch pad. One other launch blew up in-flight and a third one had a motor failure that resulted in a satellite not achieving orbit but the resupply mission was successful.

So two explosions in 29 launches over 6 years, no lives lost, no dangerous experiments.

Re:Depends on the contract

[Anonymous Coward]

'No lives lost'? What do you mean? How many times they tried to launch people?

Re: Depends on the contract

[Anonymous Coward]

Besides the obvious; both losses would have been survivable had there been a crewed dragon on top. In fact dragon from loss 1 was lost because there was no crew to pull chutes (falcon was list for other reasons).

Re:Depends on the contract

[Teancum]

When the N1 rocket was being developed in the Soviet Union, a similar explosion create what could arguably be called one of the largest non-nuclear explosions in history. There were unfortunately people near/on the pad of that N1 rocket that died.

SpaceX also dodged a huge bullet so far as window glass of buildings with people in them did break from the explosion of this Falcon 9 rocket. People could have definitely been injured even if it wouldn't have necessarily been life threatening in terms of the distance they were from the launch pad.

Yes, saying that no lives were lost in this explosion is something of a legitimate statement to make, as lives could have definitely been in danger of being lost even if it wasn't astronauts sitting on top of the stack.

Re:Depends on the contract

[TangoMargarine]

More specifically the Nedelin catastrophe

another link

If I'm reading this correctly, something like 250 people died. There seems to be disagreement whether one, or three, guys who were on the pad and survived had gone for a smoke break shortly before the accident.

Re:Depends on the contract

[TangoMargarine]

According to the document, 74 people (57 military and 17 civilians) were killed on the launch pad, and 49 injured. With 16 more people, who later died from their injuries, the official death toll rose to 90 dead. Bodies of two soldiers were found outside of the perimeter of the Site 41 after the official list of victims had been submitted, bringing number of dead to 92 people (74 military and 18 civilians).

Among other things, the commission found that many more people were present on the launch pad than should have been — most were supposed to be safely offsite in bunkers.[citation needed]

But 250 were on the pad, so most of them actually survived? I don't really trust these two sources.

China-Isreal merger

[Anonymous Coward]

Can't wait for that. Gimmesome.

Re:Better off Dead kid / Southpark Loch Ness Monst

[Anonymous Coward]

what happens if it blows up" clause in the contract.

That's probably the first sentence in every single space launch contract. No-one outside these companies really know what is and what is not in the contract. The sue this-and-that are just theatre for the plebs.

Tesla

[Anonymous Coward]

I think Tesla is an appropriate umbrella name for all of the failing, nonprofitable inventions of Elon Musk.

Re:Tesla

[Calydor]

And what exactly are YOU doing in the various fields of science?

Re:Tesla

[Opportunist]

So you'd say it's an Umbrella Corporation?

Re:Tesla

[Anonymous Coward]

Why do you think that's a rebuttal? It makes no sense. And what "science"?

Re:Tesla

[Anonymous Coward]

C'mon. I actually prefer to see what Musk is doing with his (and other people's, mind you) money than to see what... uh Gates or Zuckerberg are doing with theirs, but...

> the various fields of science?

what the fuck has Tesla, or SpaceX to do with science? It's just applied engineering. Impressive, but all mature tech.

Sheesh. Get your facts straight.

Re:Tesla

[Anonymous Coward]

Same as Musk - nothing. I'm a business person and so is he. Unlike Musk, I am a moderately successful one, meaning I don't receive billions in government subsidies, I don't lose money, and the sales and profit of my companies are mostly increasing and creating real value for the shareholders. Both I and Musk have jack shit to do with science.

Re:Tesla

[Anonymous Coward]

It is bigger, much bigger. A Gigafactory of sorts, where they'll assemble Mr. Roboto. From parts made in Japan.

Re:Tesla

[Anonymous Coward]

He's probably a butthurt Space Nutter and upset that someone is attacking his hero.

Re:Tesla

[Anonymous Coward]

Why? Because you consider Nikola Tesla to have been a failure? Is success measured by how much money someone has when they die, or what they've achieved in their lifetime? Tesla is regarded as one of the most important scientists and inventors in history, in case you didn't know.

Re:Tesla

[Anonymous Coward]

> He's probably a butthurt Space Nutter [...]

I get that, but a Space Nutter who can't distinguish science from technology is... uh, let's say that shouldn't exist.

Re:Tesla

[Anonymous Coward]

Yeah, I hate to see Gates work on problems like Malaria and helping third world nations with clean water and better sanitation practices...

That isn't to say what Musk is doing isn't worth while but there's nothing wrong with the Gates Foundation's works. You tried to create a false dichotomy and now you look like the ass that you are.

Aside from that I agree with you on Tesla... Too many Tesla (both the man and the company) fanboys out there who don't understand the difference between science and engineering and both Musk and Tesla (the man) are given far too much credit for what they're actually doing.

Re: Tesla

[Anonymous Coward]

Are you one of the hero worshipping nut bags who think Musk is someone special simply because he's wealthy? And remind us all what he did to get that money? Been to paypalsucks dot com? Give it a shot.

Hint: money does not make you better than other people. Please try again.

Re:Tesla

[frnic]

I see, and what is that you have done that affects millions of people and possibly the future of space colonization? Oh, thats right, nothing - so just sit there criticizing people that have the guts to try.

Re:Tesla

[lxs]

Because launching rockets is more useful than helping to wipe out disease and paying for education programs? I mean it's more glamourous, but is it a better use of resources?

(Oh man, I just defended Gates and Zuckerberg. I feel physically ill.)

Re:Tesla

[CrimsonAvenger]

Because launching rockets is more useful than helping to wipe out disease and paying for education programs? I mean it's more glamourous, but is it a better use of resources?

Yes. In general, launching rockets is more important than helping to wipe out diseases and paying for education programs.

GPS. Communications satellites. Weather satellites. Among many others. Just the weather satellites pay for the entire thing. The gain to the world as a whole to accurate weather forecasting is worth far more than the cost of all the space programs (including Apollo) combined.

Re:Tesla

[farble1670]

GPS. Communications satellites. Weather satellites.

Except this one was going to primarily beam Facebook-sponsored internet to 3rd world countries.

Oy vey....

[Anonymous Coward]

How very Jewish...

Still a good deal

[Anonymous Coward]

The Falcon 9 is a low cost, somewhat reliable rocket. If 1 in 6 of their rockets blew up, I would still consider the Falcon 9 a worthwhile rocket. There's a reason the US military pays up for ULA. 80 consecutive, successful rocket launches are tough to do. A more affordable rocket would be the H-2A, and Ariane 5, with less than 1 in 20 blowing up. Still, the Falcon 9 has its place in launching cheap satellites, and yes, $200 million is a relatively cheap satellite, and supplies to the ISS.

Re:Still a good deal

[Anonymous Coward]

How is Musk's contraption "low cost"? It is still more expensive than the Soviet Protons, even though Musk receives a hefty subsidy in the form of guaranteed NASA contracts, and the Protons fail a lot less.

Re:Still a good deal

[Overzeetop]

Yeah - luckily the Protons are not, in any way, subsidized by the Russian government so that makes the comparison unfair?

Re:Still a good deal

[Anonymous Coward]

They aren't, that's why they try to get paying customers. The USSR sponsored the development, but that was 40 years ago. And Musk got that for free, on top of the subsidy, from NASA anyways.

Re:Still a good deal

[fraxinus-tree]

You can never be sure with Russian accounting. There is a lot of invisible (to the western mind) and implicit streams of goods and services from everything in Russia to military structures and then (besides everywhere else) to military technology companies. Those companies (including space-related) are then almost free (or meant to, in some cases) to cross-subsidy other products.

So in Soviet (and post-Soviet) Russia no one can really estimate the real cost of something even remotely related to military. So they never try. The space launches are outright politically priced.

Re:Still a good deal

[Anonymous Coward]

Whatever errors there may be, they survived the 90s and the early 20s, when a lot of other Russian space stuff went radically downsized, so they are surely sufficiently self-reliant long term. Also, the Russkies have the decency not to claim they are the second coming of the "private enterprise".

Re:Still a good deal

[silentcoder]

Because they aren't comparable. The proton's lift capacity is a good 20% lower than what the Falcon 9 can do - and they get to launch much closer to the equator so you need a lot less (expensive) orbital manoeuvring (Soviet launches end up in pretty terribly inclined orbits) so you can put less fuel on the satelite wihich means more of that already higher weight allowance can be used for the actual useful payload.

In short - a Falcon 9 is actually less expensive pound-for-pound than a proton.

And it blows the Soyuz entirely out of the water.

Reusable...? ;-)

[segedunum]

Would the like a ride on a reused one? :-)

What about SpaceX then?

[Anonymous Coward]

The recent articles just speak about the "disastrous" effects for _other_ companies, but what about the very company that built an exploding rocket, taking other companies expensive satellites with it in the fire?

Crappy summary

[Anonymous Coward]

#1 - It was not Facebook's satellite, it was Spacecom's. Facebook had merely agreed to lease some of its bandwidth once launched.

#2 - The $50 million or free flight was already written into the contract between Spacecom and SpaceX. There's no news there, just routine business.

The outcome of the planned merger is the only interesting bit from the business side, but not to geeks. Giving us an update on the status of the SpaceX investigation would be far more interesting.

Space com Collects ?

[Anonymous Coward]

Spacecom also could collect $205 million from Israel Aerospace Industries,

Seems weird that Spacecom would collect money from the Satellite owners...

Oy vey!!!!

[Tyrannicsupremacy]

Reminds me of a joke...

Jew walks onto a bus, holding a large dufflebag. He asks for a senior discount, even though he couldn’t be much older than 40. Driver asks for his ID, the Jew complains and refuses to pay full fare. It goes back and forth between the driver and Jew, both too stubborn to give in. In a rage, the driver throws the Jews dufflebag off the bus, and it tumbles down a hill. The Jew exclaims “What the fuck?! Just because I didn’t pay full fare you try to kill my son?”

Re:Oy vey!!!!

[110010001000]

Awwwww, someone forgot to click the "Post Anonymously" checkbox. Nice job asshole!

Re:Oy vey!!!!

[Tyrannicsupremacy]

I don't need to post anonymously because I'm not ashamed of telling topical jokes.

Re:Oy vey!!!!

[110010001000]

You should be ashamed, but I guess your parents never taught you how to act like a human being. Poor little white trash kid.

Re: Oy vey!!!!

[Anonymous Coward]

It was funny. Get over it.

Re:Oy vey!!!!

[Anonymous Coward]

Still upset that your side lost WW2? OK!

Re:Oy vey!!!!

[Tyrannicsupremacy]

Cry?

Re:Oy vey!!!!

[Anonymous Coward]

What's your problem?

Re:Oy vey!!!!

[Anonymous Coward]

"space nutters"

First Time == Unknown Risk

[Anonymous Coward]

This was the first time they attempted to actually re-use the first stage, the highest chance that something will go wrong... why don't they have insurance or a duplicate payload?

Re:First Time == Unknown Risk

[Anonymous Coward]

This was NOT a reused stage. How ill-informed are you people going to keep being? Any moron with a 5th grade reading comprehension level who actaully took the time to read the articles around this event could have told you that.

Re:First Time == Unknown Risk

[Drathos]

A) This was not a reused first stage. The first re-launch is scheduled to happen in October with SES-10.
B) The explosion was initiated in or around the SECOND stage during fueling. Even if it had been a reused first stage, that fact would've had nothing to do with it.

Re:First Time == Unknown Risk

[Teancum]

The first re-launch is scheduled to happen in October with SES-10.

Not anymore. At best you can say it is "to be announced" after some significant return to flight effort that will require the FAA-AST to recertify the Falcon 9 as being eligible to launch at all. A total loss of vehicle tends to do that with air and space based vehicles.

Otherwise, you are correct that was when it was previously anticipated that the first lower stage was going to be reused.

I really hope that SpaceX finds and can replicate the problem which caused this disaster. The replication, like what happened with the struts, is important so far as it is something that can be addressed and eliminated as a source of problems in the future. By replication here I'm also talking about showing how a pipe fitting or some other component failed, not about sitting another whole Falcon 9 up to deliberately blow it up.

deployment is by "one-time" pyro bolts

[Anonymous Coward]

Attach and detach on the ground are complex, time consuming tasks - there's not much incentive to make it faster - you typically do it once, and the labor/schedule cost of it is tiny compared to everything else - making it faster isn't a big win.

In space, the payload is separated by firing pyro devices, or, in the case of tiny stuff like cube-sats - opening a motorized or springloaded door with a hot knife cutting a piece of string.

Insurance?

[AndyKron]

So they didn't have insurance I take it.

Re:Insurance?

[Anonymous Coward]

SHlTlerhead sez What?

Insurance?

[Anonymous Coward]

Israel's Space Communication.... ahhh NOW I get it. Thought you'd save money by not insuring it, Shylock?

"beam internet"

[Anonymous Coward]

And here I was thinking that it was a two way communication.

sure..

[Anonymous Coward]

when the airline i'm flying crashes, the first thing i want is a free flight.

Hobbits?

[alternative_right]

They may simply be small people with hairy feet who eat seven times a day.

That is THE Question

[alternative_right]

In every human endeavor, there is always a point, and then the 98% of everyone else chattering away trying to look clever with what they know about insurance and space flight. "Talking monkeys with car keys," indeed.

THE question of this endeavor is: what went wrong -- and how expensive is it to fix? Until it is known, doubt is going to hang over that program, despite the 27 previous launches that did not explode.

Another Fanciful Dream Ends In Fiery Reality

[alternative_right]

So, Facebook -- the arch-psychopath of crazy corporate social media slavery -- decides to up its image and engage in some Bono-style charity. Of course, just taking care of people hard hit by disaster would not be enough, nor would something as passé as funding libraries or symphonies... so they needed to go to the origin of all first-world pity, the third-world, and not just help them out, but bring them the internet! Because then they're customers as well. Ah.

And then the satellite blows up on the launchpad, as if God or nature decided that this act of self-serving hipster billionaire hubris just could not stand. Life has a sense of humor after all.

Re:Another Fanciful Dream Ends In Fiery Reality

[Alioth]

They weren't bringing the Internet to Africa from what I understand, but rather limited web access to a handful of web sites (one of which was of course Facebook).

Re:Another Fanciful Dream Ends In Fiery Reality

[Anonymous Coward]

What I don't understand is why conspiracy theorists leave this sort of thing alone. Our media is chock full of Russia scapegoating and various technological-based fear-mongering. Why aren't there kooks going on about how this was deliberately done with directed energy weapons? Hell, I just assume by default every time North Korea tries to launch a missile that's what happens.

I have to call BS

[Anonymous Coward]

While they might have a claim against SpaceX, I can't see any possible claim on IAI who were not involved. Seems like the company is *really* desperate.

And don't forget the death ray!

[Anonymous Coward]

It was so quick it happened to fire in between video capture frames.

Re:And don't forget the death ray!

[NotAPK]

Very fast indeed, but we know it must have fired: the rocket exploded!

So...

[argStyopa]

...nobody in the satellite-launch business has ever heard of insurance? Particularly for high-risk activities that are hideously expensive and prone to go *boom* if something goes wrong?

It was the Russians.

[Anonymous Coward]

The Russians did it!

Insurance is separate

[XXongo]

The point is: SpaceX is cheaper than other space transport systems because it doen't sell you an insurance. When we compare SpaceX launch cost with (e.g.) ESA launch cost, we compare launch cost against launch and insurance cost.

Launch insurance is bookkept separately from launch cost. And you buy it from insurance companies. It typically costs five or six percent of the launch cost, depending on launch vehicle. http://www.cnbc.com/2016/09/01...

kinda late in the gate with this one

[Anonymous Coward]

national enquirer already has it on the cover at the checkout counter.

Satellite owner is full of shit.

[Lumpy]

If they did not pay for insurance, then they are morons. I guarantee the launch contract states, "this may blow up, we are not responsible"

Re:Satellite owner is full of shit.

[nadaou]

They had insurance, two forms actually.

Transport insurance is relatively cheap, ~0.6% of the $200M.
Launch insurance is much more, about 6% of the cost.

Since this was pre-launch it is covered by the transport insurance and the transport insurance writer is having a very bad day.

What the Israeli company is really upset about is that their acquisition (aka massive payday for their execs) by a large Chinese company was contingent on a successful launch, and has now fallen through. This has caused their stock price to drop 40% and they are freaking out, blaming everything and everyone for their failure to manage the risk better.

Re:Satellite owner is full of shit.

[RubberDogBone]

Then they were stupid as fuck to allow that contingency clause for a series of actions (the launch contractor phases) that Spacecom itself had NO control over and didn't actually do itself.

Their job was to build the bird and deliver it. They did that. Hopefully Facebook paid their sorry butts for it. So the next set of steps was on SpaceX and it blew up. OK, well it's probably not Spacecom's fault.. Nobody knows. But probably not their fault.

Now they are saying the buyer they had no longer wants to buy them because something that was probably not their fault was a contingency? Are they idiots or just THAT fucking desperate to get the company sold? Maybe they are both.

What the hell is a big dollar client like Facebook doing contracting satellites out to a company apparently effectively insolvent and running on promises of being bought out? Facebook could buy a satellite from anyone. Maybe they need to rethink who they hire. These people look like morons.

Re:Satellite owner is full of shit.

[mvlmvl]

I am sure when you write a contingency agreement for acquisition of a satellite company you built, you will not make such a stupid beginners mistake :)

Free flight?

[Kinwolf]

Latest news : SpaceX accept to give a free flight as compensation and will offer it in the form of enough frequent flyers miles. Small prints mentions that those miles will expire 6 months after being allocated.

They got paid, why do they even care?

[RubberDogBone]

Presumably Facebook contracted with this company to supply the satellite. They did that. They should have gotten paid.

If you or I go buy a new car, we pay for it, and wreck it on the way home, the car dealer is not going to be out. We agreed to pay. Likewise Facebook surely agreed to pay for the damn thing. So what are they whining about?

The failure on the pad probably wasn't their fault so even if there was some kind of contingency, they should still get paid. They delivered the vehicle to the launch contractor. The launch contractor is responsible for the rest of the process. Blabbering about demanding a free launch or something AT THIS POINT is really unprofessional when the cause is not even known. What if it turns out the satellite WAS the cause? Then they are demanding someone else cover their failure.

I hate to say it but they sure sound like Ferengi demanding compensation or something of equal value well before anyone even knows what really happened.

Re:They got paid, why do they even care?

[kriston]

No. Facebook was to lease part of the payload. Facebook has nothing to do with the satellite otherwise.

Re:They got paid, why do they even care?

[Anonymous Coward]

Dude did you see the video? I'd love to know how the payload detonates the bottom of the second stage while remaining intact itself.

Looked like the detonation started at the payload.

[Anonymous Coward]

So the satellite exploded and took the booster with it and now they want a refund? Maybe they should fix their satellite explody issues first?

Because you only factor ariane 5 and NÂ launc

[aepervius]

https://en.wikipedia.org/wiki/...

In reality the people working on the Ariane family have a far longer experience at launching a sat, and THAT count for a lot. SpaceX may have quite a few launches, but nothing on the historical track records various space agencies have. Number of launch is not everything.

Re:Because you only factor ariane 5 and NÂ la

[Richard_at_work]

You miss the point of my post...

See my other reply for why.

let me get this straight

[Anonymous Coward]

You would trust the person you are suing for $50,000,000 to shuttle you to and from the edge of space? And not "malfunction" you?

Sure thing!

[Anonymous Coward]

"We've opted to give you a free ride into space. We sure hope THIS launch doesn't explode! ;-) ;-) LOL!"

-SpaceX

Re:Sure thing!

[Eunuchswear]

They could give them a "free" ride on their "refurbished" rocket.

Re:Because you only factor ariane 5 and NÂ la

[rch7]

Launch Vehicle by Success Rate :
http://www.spacelaunchreport.c...

Re:Did they figure out what caused the explosion y

[petermgreen]

mmm, afaict there is only one somewhat decent public video of the event and it goes from normal on one frame to a substantial explosion on the next and the insiders aren't talking.

Scott Manly took a look at the video frame by frame https://www.youtube.com/watch?... . It's clear that whatever happened started in the second stage, potentially in the vicinity of the fueling connection.

Also interesting is that the payload seemed to remain attatched to the tower and largely intact for some time after the explosion. This suggests that had it been a dragon 2 with a launch abort system on the top of the stack the incident may have been survivable.

The satellite did not "belong to Facebook"

[kriston]

What kind of journalism is this? The satellite did not "belong to Facebook." The company was merely leasing part of the payload.

Re:The satellite did not "belong to Facebook"

[Eunuchswear]

What kind of journalism? Slashdot journalism.

(or, possibly, Facebook journalism. Maybe they claim to own the satellite just because they wanted to lease it, like they claim to own your photos just because you post them).

Re:Because you only factor ariane 5 and NÂ la

[farble1670]

Falcon 9 v1.2 8 8 1.00 .90(D) 8 None 2015-

Last failure = none. Seems like this document is a bit out of date (or it's not listing previous failures since it was a different version (they list no other Falcon 9 variant).

Re:Did they figure out what caused the explosion y

[NotAPK]

Wow, a troll mod for a fun little joke post about a bug flying across the video frame at the time of the explosion. There are some really butt hurt space nutters around here these days...sheesh!

I don't think this will fly (sic)

[Shirley Marquez]

Satellite launch contracts disclaim responsibility. That's why companies that launch satellites buy launch insurance. And because a significant number of launches fail, that insurance doesn't come cheap.

Business as usual.

[interstellarsurfer]

Jews suing everyone involved, because their business took a risk, and incurred a loss? Say it ain't so...