I ask this out of genuine curiosity and pure ignorance:

What is the current state of the law regarding private space ventures?

I believe that these programs are a very good thing. But sooner or later there is going to be a big, headline-grabbing disaster of some sort. This is more than likely to provoke Congress into ramping up regulation of private space flight, if not shutting it down altogether. What actions are being taken to try and head this off?

From what I've heard, the private companies are having to jump through hoops to get government approval to launch. Safety for non-participants is paramount, which is why these groups are all launching from the deserts in Nevada or along the coastlines out over the sea (or into the Gulf of Mexico in one case).

I think everyone expects that at some point someone might die in some sort of accident or malfunction. That's the nature of doing something new. The idea is to limit fatalities to those taking the risk such as crew and associated scientists.

At the same time, it's exceedlingly bad business to have people die in your equipment, and the people controlling the money are all businessmen. Nobody wants to be the first (or ever) to have someone die, so testing will be and has been extensive.

In addition, these people all seem to be earnest and sincere in their plans to commercialize space (with one exception I'll note in a bit). The prize money is great and welcomed, but almost nobody is thinking that the final goal is winning the prize. The money is merely incentive, the real prize is creating an actual private business out of going to space.

That exception I noted above is Starchaser from the UK. Their "technical lead" is a self-promoting loon named Bennet who's main achievment so far seems to have been to set half of a British military base on fire with one of his craptacular signature "spacecraft". The result was the refusal of the UK government to allow any more experimental private rocket launches, which forced several serious groups to have to travel to Nevada in the US in order to test launch their rockets. You can do a Rocket Jones search on "Middlesex" or "MARS" for more about one of these groups.

That all happened a few years ago, and I haven't followed up lately, so it may be outdated information.

Robert, you should browse Rand Simberg's site and archives for a good sampling of policy and status of the law.

There have been no major changes in Space Law per se since the Cold War treaties of the late 60s, early 70s. There is specifically a 1971 international convention based on the original 1967 Outer Space Treaty. The liability convention imposes liability on the state parties for damages caused by nationals of that state. As with most international law, the treaties deal with state action only, and don't really address the interests of private individuals.

I might turn this into a post later...

John, please do! I only have a vague understanding of legal policy as it pertains to space (it doesn't much interest me). A simplified explanation geared towards us simpletons would be greatly appreciated.

Heh, I used variations of "simple" twice. I think my words get bigger the less I know about a subject. :)

Rutan has plans already for a follow on to the very successful and inaptly named spaceshipone. I'd say based on track record alone he's an odds on favorite for winning this one, too.

The money will be there for many entrepreneurs. And private industry has already proven that they can do the design/build/test/design cycle about a million times faster than NASA. I think five years is certainly possible. We will be getting not just a private orbital craft, but one that is deeply innovative as well - look at Rutan's design for evidence of the creativity that is being invested in these projects.

If NASA had spent it's money on half of the ideas floating around out there instead of its own bureaucracy and endless redesigns for teh ISS and other projects, we'd be so much further along... Think about using shuttle ETs for habitat space, shuttle-Cs, inflatable habs like you mentioned, and a thousand other things that have never been given the attention that they deserve by the powers that be.

It's looking like a brave new world out there.