The Commercial Drone Era Emerges (Slowly)

The Commercial Drone Era Emerges (Slowly)

The Federal Aviation Administration (FAA) just released its final administrative rules on “routine” commercial use of small unmanned aircraft systems (UAS). Effective August 29, 2016, this federal regulatory edict opens the door to the process of integrating UAS systems — or “drones” — into the nation’s commercial airspace. Aviation industry sources tout the move as capable of generating over $82 billion and creating more than 100,000 new jobs for the U.S. economy over the next decade.

Though a step in the right direction, this regulatory change falls somewhat short.

The new regulation eliminates many costly requirements currently imposed on commercial drone operators, such as the need to notify aviation operators before each flight and the need to acquire a manned aircraft pilot’s license and certification, among others. Important regulatory safety requirements include a maximum weight of 55 pounds for a drone; a minimum age of 16 to qualify for a remote pilot certificate; and flight restrictions limiting drones to a maximum altitude of 400 feet (higher if your drone remains within 400 feet of a structure), with speed not to exceed 100 miles-per-hour. Under the new rules, the Transportation Safety Administration (TSA) will conduct a security background check of all remote pilot applicants before the FAA issues a certificate of authorization allowing for the piloting of a drone.

The new limitations on usage are designed to minimize risks to other aircraft as well as people and property at ground-level. For example, the pilot must keep the unmanned aircraft within his or her visual line of sight and drone operation is limited to daylight hours, unless the drone is equipped with ant-collision lights. There are also restrictions on where drones can fly and the type of external loads they can carry.

Yet, while this path-breaking administrative rule establishes a basic regulatory foundation for commercial regulation of drone aircraft, it has surprisingly limited commercial application.

Hollywood film companies will be pleased with the new rule. But the requirement that an operator must keep his or her drone within unaided sight, for example, effectively precludes major retailers from utilizing drones for air delivery service of their products.

The FAA rule does provide an option for a waiver of most operational restrictions if a UAS commercial entity can prove its proposed operation will be conducted safely. But this would be a costly process, as specific requests would be evaluated individually by the FAA. And the line-of-sight restriction is unlikely to be waived under any circumstances, especially not if commercial drones would be landing in populated areas.

There is some cause for optimism, though. The waiver option on operational safety is regarded by industry insiders as unprecedented since it does not apply the traditional cost-benefit analysis criteria currently used in regulations of commercial airlines. Instead, the revised safety criteria consider “social benefits” resulting from anticipated growth in the infant unmanned aircraft industry, providing a more flexible regulatory approach. Agency officials must have concluded — rightly — that the fledgling commercial-drone industry recognizes market opportunities that will incentivize future safety-based industry investments. 

A major area not directly addressed by the new rule is privacy. The FAA strongly encourages UAS pilots to review local and state laws before actively engaging in information gathering activities that employ sensing technology or airborne photography. But in lieu of administrative rules about privacy, the FAA is providing all drone users (commercial and non-commercial) with recommended privacy guidelines, developed in consultation with privacy advocates and industry representatives. These voluntary guidelines — part of the FAA’s privacy “education campaign” — can, in some cases, exceed existing legal requirements. But they’re specifically designed not to create legally enforceable standards or serve as a template for future regulations.  

It remains to be seen whether TSA security screenings and voluntary privacy guidelines are sufficient to address public safety and privacy concerns in the circumscribed area of UAS operations allowed by the FAA’s new rule.

Hopefully, a regulatory “learning curve” will emerge, providing valuable operational insights and innovations transferable to a future FAA regime better tailored to the commercial operating environment. Retail businesses, such as Amazon, Wal-Mart and E-Bay, will be awaiting.

Thomas A. Hemphill is a professor of strategy, innovation and public policy at the University of Michigan-Flint and senior fellow at the National Center for Policy Analysis.

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