Isn't there a ton of space debris, ranging in size from mm to meters? A 1U cubesat is 10x10x11cm, and these satellites are listed as 10x10x2.8cm. What are the size bounds of the "danger zone" of items that are too small to spot reliably but still large enough to damage satellites? Would a 1cm³ / ~10 gram steel bolt be a problem? What about all of the chunks of debris created by previous space collisions and anti-satellite weapons?

Also, it seems like either (A) the satellites are big enough to track using the space surveillance network, negating the FCC's complaint, or (B) the satellites are too small to see reliably, meaning that it would be hard to pin any collision on these satellites. Perhaps there is a gray area where we can observe it, but not reliably.

I wonder how the FCC makes these decisions. The article mentioned that Swarm included passive radar reflectors, but that those will only help boost the radar cross-section for a small band of frequencies that are only used by a small fraction of the SSN. Ideally, our detection capability will improve over time and this will cease to be an issue. It would be a shame if no US company could ever launch a sub-1U satellite.