The free market is famously unable to solve problems of diffuse risk and responsibility: air pollution, sea piracy, and in this case -- satellite collision avoidance.
This is a good argument for passing a one-page bill which clarifies "if your sat leaves its assigned orbit, you're responsible for the resulting damages". It's a poor argument for spending $50 million dollars per year.
Right, there's no way such simplicity could ever be gamed in the legal system! We could also eliminate crime with a simple law that forbids committing it!
Bankrupt companies leave no assets. Same problem as wildcat oil wells.
So now what? Do you try to make every company in the world with a sat to post a damages bond? Held by who? The UN? Adjudicated by which courts? This is naive.
Collective action problems are real, and this is one of them.
The sleazy (edited - shouldn't call this standard) playbook for old oil wells is for the operators to sell them to a shadier operator company and transfer the risk. The shady firm then siphons the money out and declares bankruptcy.
The standard cycle is that they pump while the money is good. Then when commodity prices crash, those shell companies are insolvent. Industry lobbies for easements on their cash reserves as a favour during the "temporary downturn". The shady guys just walk away with their pockets stuffed full of money, and the regulator is left holding the bag.
Most operators are responsible, and decommission the wells. But the industry has to maintain a whole insurance policy for "orphan wells", and it is always under-funded. Alberta alone is going eat a couple of billion in orphan cleanup.
This process only gets harder when the satellite is "owned" by a shell-company domiciled in Mauritius.
The actual solution is a series of international treaties. The USA government has signed a global promise that they are directly liable for any object launched by any actor in the USA . All treaty signatories are on the same hook. The government in turn then has to track them all, else how do they manage their liability?
How could a private company possibly play this role in a global treaty process? Over decades?
