Issue: Commercial Drones

Commercial Drones

By: Craig Guillot

Pub. Date: January 18, 2016Access Date: October 18, 2021

DOI: Source URL: http://businessresearcher.sagepub.com/sbr-1775-98070-2712846/20160118/commercial-drones

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A drone flies as an airliner passes above. Unmanned aircraftare becoming increasingly popular for recreational andcommercial uses. (Bruce Bennett/Getty Images)

A camera-equipped drone flies above a vineyard inHealdsburg, Calif. Such rigs allow farmers to monitor the healthof their crops, one of the most popular uses of commercialdrones. (George Rose/Getty Images)

Can pilotless planes soar over safety, privacy and regulatory barriers?

Executive SummaryDrone aircraft, until recently the domain of the military and a handful of hobbyists, play an increasing role in businesses, including agriculture, engineering and real estate. Still more untested uses are under consideration,such as using drones to deliver packages to customers. Millions of consumers also are buying the machines and taking to the skies. This rapid growth in drone use has increased concerns about safety and privacy. Changehas come so quickly, regulators have been unable to keep pace. In the United States, the Federal Aviation Administration has yet to release commercial use regulations, instead allowing operations through what those in theindustry say is a cumbersome case-by-case exemption process. Among the issues under debate: Can regulators and the industry resolve questions of safety and privacy? Is the United States falling behind in droneinnovation? Can drones be used on a large scale for deliveries?

OverviewAerial photography firm Miami Aerial once flew piloted planes to shoot panoramic images of South Florida real estate. But for the past 18 months, it also has sentup unmanned drones—more often, in fact, than aircraft.

Company President Paul Morris says the technology of drones—also known as UAVs (unmanned aerial vehicles) or UAS (unmanned aerial systems/unmannedaircraft systems)—allows unprecedented access to the skies to capture images from almost anywhere at any elevation. That has enticed some of Miami’s biggestdevelopers to hire him to help market their properties.

Miami Aerial is regularly landing new clients, upgrading equipment and adding to its fleet of nearly a half-dozen drones and cameras. Morris has hired another full-time drone operator and relies on other freelance drone and camera operators when jobs require it. The firm shoots aerial imagery with drones for constructioncompanies, advertising firms, the marine industry and movie production companies.

Like the nation’s 2,000 other civilian drone businesses, however, Morris says Miami Aerial is operating in a “quasi-legal” status under a temporary FederalAviation Administration (FAA) exemption that has limited its operations. That still-unsettled legal and regulatory situation—along with unresolved concerns oversafety and whether the craft intrude on privacy—is among the obstacles confronting an industry that has blossomed dramatically in recent years but that Morris andother drone executives agree is primed for even more substantial growth.

Dozens of industries are filling the skies with drones. Construction companies and architecture firms use them to create 3-D renderings and shoot aerial progressphotography. Farmers use them to better observe and manage fields and crops. And in the public sector, entities such as law enforcement agencies andinfrastructure engineers are taking advantage of the technology to obtain detailed surveys of terrain and buildings.

Sales of private drones are expected to reach $4.5 billion in 2020, up from $720 million in 2014, according to Mike Blades, a Texas-based senior analyst for theconsulting firm Frost & Sullivan. “The market is exploding because drones are now affordable,” he said.

In the past, the FAA significantly underestimated the popularity of drones. In 2010, it said there would be 15,000 drones in U.S. skies by 2020; more than thatalready are sold every month, with drone sales likely topping 1 million units in 2015 alone. Drones have gone from obscure products found at niche onlineretailers to the shelves of big-box stores. The Consumer Electronics Association considers 2015 as a “defining” year for consumer drones.

Doug Campbell, operations manager of unmanned aircraft systems at Middle Tennessee State University’s Department of Aerospace, says drones are tools to“increase efficiency and capabilities” while also making things “easier and safer.” They can be used to inspect buildings, bridges, cellphone towers, windmills andpower lines, reducing the need to put humans in hazardous situations.

Drones also can save lives. They’ve been used for search-and-rescue missions. A Dutch engineer is working on a prototype ambulance drone, and lifeguarddrones have been tested in Chile to deliver flotation devices to drowning victims more quickly than humans can. Firefighters are testing drones with infrared

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Jonathan Rupprecht: Someoperators are flying withoutFAA permission.

cameras to better analyze and extinguish large fires. Drones can also benefit the environment. They’re being used to fight poachers in Africa, monitor whaling ships in Japan and survey coastal erosion in Australia.

Police in Nanjing, China, deploy a force of drones. (Xinhua/Li Xiang via Getty Images)

Drone technology is rooted in military aviation and in radio-controlled hobbies. Hobbyists have been strapping cameras to remote-controlled planes and helicopters since the 1980s, but advances in processors andoperating systems have made the flying machines less expensive and easier to operate. A DJI Phantom, one of the most popular drones on the market, now retails for about $700.

Varied industries are trying to deploy drones for commercial purposes, but the FAA has yet to release rules and regulations for commercial operations. Commercial drone operators can only operate with what’s known as aSection 333 exemption, which includes a long paperwork process and requires the drone operator to hold a commercial pilot’s license. That means the legality is cumbersome and temporary. Commercial operations are“still a gray legal area, when you look at it closely,” says Miami Aerial’s Morris. “The whole industry is being held back by a lack of clear regulations for us to use these devices. It’s a big problem, and we need stability.”

In September, the FAA failed to meet a congressionally mandated deadline to integrate drones into the National Airspace System, the term for the regulated space that includes airports, flight paths and flight control. Twoindustry groups, the Academy of Model Aeronautics and the Association for Unmanned Vehicle Systems International (AUVSI), led 31 organizations that had warned the FAA more than a year earlier that it was “creatinginconsistencies” with laws that have “the potential to stifle innovation.” The groups called for the FAA to “finalize the small UAS rules immediately.”

An AUVSI report in 2013 concluded that delays in integrating drones could cost the United States more than $10 billion a year in lost economic activity. Brian Wynne, president and CEO of AUVSI, says allowingcommercial use through exemptions is “no way to regulate” and that the industry is in an “undesirable position right now.” The FAA declined requests for comments for this report.

Meanwhile, drones have a mixed public image. Many Americans don’t differentiate between civilian drones and their bomb-dropping military counterparts. Others perceive the machines as a public threat. News stories ofdrones crashing in public places—including the White House grounds in 2015—or being used to spy on people have led some to call for greater government regulation.

Most in the industry say consumers eventually will adapt to drones as they have other technologies, such as cellphones or the Internet. Frank Wang, the Chinese founder of DJI, the world’s largest consumer drone company,confidently predicted that the public’s fear and uncertainty will disappear as people learn how useful drones can be. “First people have some suspicion or worry, but later they see it as a useful tool, and finally they will accept,”he said.

But the FAA long has worried whether drones can safely fly in the same skies as planes. In September, Rich Swayze, the agency’s assistant administrator for policy, international affairs and environment, expressed concernover the estimated 1 million drones to be given as Christmas presents. “A lot of people who don’t have a pilot background are operating these things in the airspace,” he said. On Dec. 14, in an attempt to improve safetyand promote responsibility, the agency announced it is starting a national database that will require owners of recreational drones to submit their names, email addresses and home addresses.

Unskilled and careless drone operators certainly pose risks. In addition to the White House lawn, drones have crashed at national parks, at sports stadiums and on Manhattan streets. Federal officials also worry thatterrorists could use drones to launch attacks. Since 2011, authorities in the United States, Germany, Egypt and Spain have foiled at least six potential attacks by terrorists using drones. Todd Humphreys, a drone expertand engineer at the University of Texas, Austin, said, “The distressing truth is that even consumer-grade drones can be rigged to carry out potent attacks.” In 2015, someone—authorities think it was an 18-year-oldConnecticut student—mounted a handgun on a drone and demonstrated its firing capabilities on a video on YouTube, causing concern among law enforcement officials and at the FAA.

Businesses and entrepreneurs seeking to use drones commercially are trapped between what they regard as onerous regulations and potentially breaking the law. While the FAA permits anyone to operate a drone under“hobbyist” guidelines, doing so commercially restricts use to licensed pilots authorized under the Section 333 exemption. So while a 12-year-old can legally operate a drone to take personal photos of his home, a real estateagent could be breaking the law by doing the same thing for a client.

As a result, a large black market of commercial drone operators has flourished, says Jonathan Rupprecht, a West Palm Beach, Fla.-based lawyer specializing in drone law. He says someoperators have obtained Section 333 exemptions but even more are operating under the radar, or are “rogue and just don’t care.” Rupprecht says the industry is in “a super state of flux” due tothe lack of regulations.

New restrictions are appearing regularly. The FAA has implemented “no-drone zones” during special events or festivals, threatening violators with fines of up to $10,000. The National ParkService banned the use of drones without a permit in national parks in 2014. Ski resorts, parks, hotels and entertainment venues also are banning drones. California Gov. Jerry Brownsigned legislation in October to define a “physical invasion of privacy” to include sending a drone above someone’s property with the intent of photographing it. More than half of the stateshave enacted some type of drone law.

Yet Rupprecht says many local laws are unenforceable. Like many lawyers who specialize in drones, he points out that the federal government, and not states, regulates airspace. “Some statesare trying to meddle in areas that they are not even constitutionally allowed to get into. It’s just no one has smacked them down in court yet,” he says.

To combat rogue drones, companies are developing “anti-drone” technologies for governments and law enforcement. Three British firms released a “death ray” product in October that canshoot high-powered radio waves to block signals to drones and switch them off or force them to land. Boeing is working on a system, small enough to fit in a suitcase, that uses directedenergy—a laser beam that heats up and damages a target—to melt drones in the sky.

Nonmilitary drone companies are trying to advance the technology while tip-toeing through the complex legal environment. Paul Doersch, president of commercial drone manufacturer Kespry inMenlo Park, Calif., says the technology is “here to stay.” Drones eventually will become “essential tools,” he says, and he foresees a world of “completely autonomous” drones flying aroundconstruction sites, inspecting facilities, and mapping land on their own, then delivering information to humans. (See Short Article, “Drones Scaling New Heights.”)

At drone manufacturer Aeryon Labs in Canada, CEO Dave Kroetsch agrees that drones ultimately will be regarded as just another high-tech tool. The public, he says, will focus less on thedrones and more on their capabilities and the information they can provide. Kroetsch says simplification and ease of operation will ensure that “anybody in the business who needs that tool can

access it.”

While the growing industry awaits commercial regulations, which the FAA says should be in place by late 2016 or 2017, companies are operating in a state of uncertainty. They know they will likely be allowed to function, butthey have yet to learn the exact rules and requirements they will have to follow. They also have yet to learn what federal and local laws they will have to navigate. The result, executives say, will be a bumpy flight path of evolvingregulations and laws for the industry over the next few years.

As company executives, analysts and government officials continue to discuss the future of commercial drones, these are some of the questions under debate:

Weighing the IssuesCan regulators and the industry resolve issues of safety and privacy?

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Paul Doersch: Drones willbecome “essential tools.”

Jay Stanley: Police dronesthreaten civil liberties.

Margot Kaminski: Privacydebates will last years.

Daniel Castro: Rules could“stifle innovation.”

Drones must safely share the airspace with an estimated 7,000 aircraft flying over the United States at any given time. Aviation experts say there is a way for drones to operate safely in the world’s busiest and mostcomplex airspace, but it’s a challenging one. With the ability to put a camera almost anywhere, drones also pose privacy concerns. Regulators ultimately will need to balance between ensuringsafety and privacy and giving the technology the space to succeed.

Congress is optimistic that drones can be integrated into the National Airspace System. In 2012, it passed the FAA Modernization and Reform Act, mandating that the agency open the skiesto drones for commercial and government applications by Sept. 30, 2015. The FAA established six centers in 2014 to test the integration of UAVs into the national airspace, but it missedthe deadline after repeatedly falling behind milestones. In February 2015, the agency said it would officially release rules for a commercial licensing system sometime in 2016.

While the FAA may need more time, those actions show agency officials think they can address safety issues. One obstacle is to minimize the risk of collisions and near-misses with mannedaircraft as well as other drones. Al Palmer, director of the University of North Dakota’s Center for Unmanned Aircraft Systems Research, Education and Training, says new transponder-enabled systems such as Automatic Dependent Surveillance Broadcast may soon allow manned aircraft pilots and drones to more easily spot one another. “We’ve done research,” he says.“You can have two aircraft, manned or unmanned, and the system will sense and tell you where the aircraft is at and maneuver the unmanned aircraft away from the traffic conflict.”

Questions also remain about the types of drones to be used and how they would be operated for commercial purposes. The FAA has been hinting through actions and press releases that it willintegrate drones into the airspace with a “risk-based” approach dependent on the size and level of risk that the machines pose. The agency is starting with smaller aircraft. In 2014, the FAAreleased a proposal that said unmanned aircraft must weigh less than 55 pounds, must be operated in line-of-sight, and travel no higher than 500 feet, no faster than 100 miles per hour andonly during daylight hours.

Those conditions would allow some businesses to operate, but would not address all safety issues. The inability to operate after dark would curtail drones’ use for building inspections, and theline-of-sight requirement would limit agricultural operations, Wynne at AUVSI says. The FAA announced in May 2015 it had partnered with drone manufacturer PrecisionHawk, freight-railwaygiant BNSF and cable TV’s CNN to test how drones can safely operate beyond the line of sight, but no announcement has been made on when rules may come.

Regulators are grappling with privacy issues as well. Jay Stanley, senior policy analyst with the American Civil Liberties Union’s Speech, Privacy and Technology Project, says law enforcementposes the “greatest threats.” Drones would give police a low-cost technology to expand camera use and surveillance into legally unclear areas, Stanley says. “We know that when thetechnology gets there, at least some police forces will seek to put drones over neighborhoods 24/7,” he says. While drones can be used lawfully if warrants are obtained before they are flown,their use by authorities will have “enormous implications” for civil liberties.

It could be a while before those privacy issues are resolved, according to experts. Margot Kaminski, assistant professor of law at the Moritz College of Law at Ohio State University, saysexisting laws already address many issues. But she adds that drone privacy laws will be debated for many years and that the pace of legal evolution will vary depending on who writes the laws.“Congress has its own pace, the FAA has its own pace, the states have their own pace, and the courts are the slowest,” she says.

Kaminski says litigation is expected with new technologies and that test cases could present hurdles for the industry over the coming years. Commercial drone operators, she says, may findthemselves caught in a complex web of federal, state and local laws. “As with other new technologies, it could be a long process,” Kaminski says.

Although the FAA has been slow to produce rules, lawmakers are stirring. In September, Sen. Charles Schumer, D-N.Y., announced he would seek to add an amendment to the upcoming FAAreauthorization bill requiring drone manufacturers to implement “geo-fencing” technology that would physically ground drones when they enter “no fly drone zones.” Schumer said thelegislation is not intended to limit the effectiveness of drones, but to allow them to operate “in a safer, more effective way.”

Some observers say a fatal accident could hurt the industry by creating a public backlash that leads to stricter laws or rules. Vince Pujalte, an assistant professor and the program chair ofUnmanned Aerial Systems at Embry-Riddle Aeronautical University in Prescott, Ariz., says while accidents will occur, the drone industry hopes the public will keep the accident rate inperspective.

Pujalte points to automobiles and says their development might have been stifled had people known that tens of thousands of people eventually would die in accidents on roadways. “Nobody isgoing to feel good about a potential UAS accident rate, but for a technology to advance and give us [benefits], there’s a price to pay,” he says.

Is the United States falling behind in drone innovation?

The United States is a global leader in military drone technology, but industry officials warn it could fall behind in the civilian sector. American companies say a blanket ban on commercialoperations is stifling innovation and holding back the market for drone products and services. Amazon has been trying to test its drone-delivery concepts and blasted the FAA in March forbeing too slow in approving commercial drone testing.

Nearly a dozen other countries, including France, Germany, Canada, Sweden, Japan and Australia, already have regulations that allow for commercial drone operations. As of early 2016, itwas illegal to operate a drone commercially in the United States without a Section 333 exemption.

Daniel Castro, vice president of the Information Technology and Innovation Foundation, a Washington, D.C., think tank, said in April 2015 that the FAA’s proposed rules “could stifle innovationby heaping prescriptive regulations on a rapidly evolving technology.” He said many of the commercial restrictions now under consideration “make no sense,” noting that “the safety of goodstransported by drones [should] not depend on whether the person flying them is getting paid.”

Amazon’s vice president for global public policy said one of its prototypes already became obsolete while the company waited more than six months for the agency’s permission to test.“Nowhere outside of the United States have we been required to wait more than one or two months to begin testing,” said the executive, Paul Misener, in written testimony to the SenateSubcommittee on Aviation Operations, Safety and Security.

In what was widely seen as a concession to industry pressure, the FAA started approving Section 333 exemptions at a much faster rate by mid-2015. While it used to take months to issue asingle exemption, the agency adopted what it called a “flexible regulatory approach” and was approving an average of 30 exemptions per week by the summer of 2015. The industrywelcomed more Section 333 approvals, but still took issue with the requirement under the exemption that drones be operated from the ground by licensed pilots.

Doersch, of commercial drone manufacturer Kespry, says, “If the FAA takes too long, the United States will absolutely have a disadvantage.” Doersch says Chinese companies already aredominating the market for making drone components such as motors. He says U.S. companies haven’t had strong incentives to invest in the technology when commercial operation is stilllimited by a lack of clear regulations. That means not only is the commercial market limited in size, but also that companies face challenges in research and development because it can bedifficult to obtain approval to test the technology. Many industries in the United States, including the utility industry, have been slower to adopt drone technology than their European counterpartsbecause of regulatory restrictions. Meanwhile, manufacturers in Europe and Asia have had more free rein to test products. Shenzhen-based DJI has a strong lead in the commercial marketand by April 2015, nearly half of the companies filing for regulatory approval were using DJI drones.

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Chinese drone manufacturer DJI in November 2015 introduced the dustproof, water-resistant DJI Agras MG-1, which it said isthe first drone designed for crop-spraying. (DJI)

At Northwestern Michigan College in Traverse City, Mich., Director of Aviation Alexander Bloye says DJI’s dominance comes because “there simply hasn’t been a large U.S. market [for drone users] to choose from.” U.S.-based start-up drone manufacturers “will struggle to meet that volume and keep costs down because they’re new to the market and don’t have a name yet,” he says.

Yet Jeff Cozart, an affiliate professor of aviation and aerospace science at Metropolitan State University of Denver and the CEO of drone services company Juniper Unmanned, predicts the United States can become aleader in drone innovation. He says the FAA needs time to deal with “the most complicated airspace in the world” and that the United States can catch up because its companies already are creating and innovating.

At Canada’s Aeryon Labs, Kroetsch considers North America a unified market that can “absolutely be a leader in drone innovation.” North American manufacturers can compete on quality and service from a self-assemblyand engineering perspective, he says. “When you put something a few hundred feet in the air for a critical task, the performance tolerance and reliability is extraordinarily high,” Kroetsch says. “Commercial users won’t justwant [things] off the shelf.”

Bloye says that while the United States could be at a manufacturing disadvantage, it can become a leader in applications, accessories and software. “Many things don’t exist out of the box, and we’re hoping we can managethe piece of the pie on the payload and applications side,” he says.

Middle Tennessee State’s Campbell is optimistic that American companies can lead in the creation of solutions that interpret and use data. “We’re fully developing those capabilities and finding ways to integrate thisadvanced technology into new roles,” he says.

In the meantime, though, American drone services and manufacturing companies are watching as other countries expand their efforts. Chris Anderson, a former editor of Wired magazine who is now CEO of the roboticscompany 3D Robotics, said in 2015 that Germany already had 2,000 certified commercial drone pilots. He pointed to Australia as a “hot spot” and said Canada and certain European countries appear to be ahead of theUnited States. “I think what we’re looking at is probably a relatively slow, cautious integration in the U.S., with a few sectors, maybe farming, being free to do this sooner, and outside the U.S., it’ll be much faster,” he said.

Much of the investment in the U.S. industry remains “speculative,” says Embry-Riddle’s Pujalte. He says rules would “really need to break open” for the U.S. drone industry to expand and fully realize its potential. The lack ofcommercial regulations is holding back the end-user market for drones and accessories. “People need reasons to make the investment in furthering the technology, and there just aren’t enough 333 operators willing to paythe money to have the latest and greatest,” he says.

Can drones be used on a large scale for deliveries?

Amazon CEO Jeff Bezos brought commercial drone use front and center in December 2013 when he announced on CBS’ “60 Minutes” that the online retail giant wanted to make deliveries via drones in 30 minutes or less.Bezos said the “octocopters” would have a 10-mile range and carry items up to five pounds, eventually handling about 86 percent of all deliveries. Google, DHL and Walmart also have announced drone programs.

It sounds to many like science fiction. But pioneers in the drone industry knew it was a technological possibility. As Amazon has kept its drone experiments under tight wraps, regulators and those in the industry questionwhether mass-scale drone deliveries could be done safely, and whether they’re even practical or economically viable.

Amazon has continued to work on the technology and to suggest a regulatory framework for FAA approval. In July at a NASA convention in California, the retailer proposed a special air zone for its delivery drones, a 200-footspace of air between 200 and 400 feet from the ground that would be reserved for drones flying at speeds of 60 knots (about 69 mph) or more. Gur Kimchi, vice president and co-founder of Amazon’s delivery-by-droneproject, said the concept would “guarantee the greatest safety.” This level of airspace, he said, would allow hundreds of thousands of drones to fly under their own “technological stream without the involvement of humansthrough air traffic control.”

Amazon Urges Segregated Drone Airspace

Slower drones would fly closer to the ground

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Source: “Revising the Airspace Model for the Safe Integration of Small Unmanned Aircraft Systems,” Amazon, July 2015, p. 2, http://tinyurl.com/oht4x5m

Web retailer Amazon, which wants to use drones to deliver packages, proposes that federal regulators designate airspace with three areas for drones. Under the proposal, the lowest area, below 200 feet, would be reserved for low-speed drones, such as those used for

Amazon outlined five capabilities that drones would need to fly inside the new corridor. They included GPS that allows for real-time tracking; a reliable, onboard Internet connection; and online flight planning. The drones alsowould need communications equipment to allow them to “talk” with other drones and sensor-based sense-and-avoid equipment.

Google has been working on a drone delivery program called Project Wing and hopes to begin air deliveries in two years.” DHL started making drone deliveries to the German island of Juist in 2014, a concept it couldsomeday use in the United States. Walmart wants to test drone deliveries to customers in residential neighborhoods and also whether drones could deliver merchandise from a retail facility to Walmart parking lots forpickup.

Bloye at Northwestern Michigan College says mass-scale drone deliveries “are possible in theory” but not in application. The complex political environment, restrictions on flying near airports and obstructions standingbetween the flight path and consumers’ doors could all be problems, he says. Bloye also questions whether a retailer could afford to have thousands of operators on staff 24 hours per day. He says it’s a “cool idea” but that itdoesn’t seem practical. “It is possible that it could come to fruition at some point in the future, but not anytime soon,” he says.

Amazon says it is testing more than a dozen prototypes, including this one, that could be used for its proposed packagedelivery service, called Prime Air. (Amazon)

Even if the FAA approves drone deliveries, technological barriers remain. Battery life and weather could significantly affect the service. For mass deliveries, cities would need distribution centers equipped to handle dozensor hundreds of drones arriving and departing daily.

Practicality and profitability could be issues as well. Neither UPS nor FedEx has taken a strong interest in drones, and the president of U.S. operations at UPS, Myron Gray, said that bringing packages to homes one at atime would not be practical from a logistics or cost standpoint. “You need density and scale to make money in transportation,” he said.

And while drone deliveries may be useful in remote areas, they are unlikely to replace human delivery people anytime soon for many reasons. They can’t yet safely fly into buildings, through hallways and within apartmentcomplexes to leave packages at doorsteps. Unlike humans, who can make judgment calls, drones can’t scan an area for suspicious persons and determine whether it’s safe to leave a package. Nor can they open amailbox, slip an envelope under a doormat or tuck a package behind a bush. 3D Robotics’ Anderson expressed skepticism in 2014 about Amazon’s plans, saying that regulations and common sense would make dronedeliveries difficult. Flying drones in residential areas poses significant safety risks, he said.

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Providing liability insurance for such operations also may be a challenge. Insurance companies are writing policies for aerial photography, construction and agricultural uses, but insurers remain cautious. A 2015 report bythe insurance market Lloyd’s of London found that while the potential of drones is great, “concerns around safety, security and surveillance could pose significant risks to users of this nascent technology.” It says that whilemany new technologies are scrutinized, drones will face particular challenges because of their military heritage and surveillance capabilities. It reported five fundamental risks facing the sector: negligent or reckless pilots;patchy regulatory regimes; poor enforcement; vulnerability to cyberattacks; and privacy infringement.

BackgroundMilitary Leads the Way

Drones are the latest technological innovation in a history of aviation stretching back to 1903, when the Wright Brothers first flew a manned airplane at Kitty Hawk, N.C. Modern-day civilian drones are rooted in both militarydrones and hobbyists’ inventive flying creations. Miniaturization and the low costs of components, combined with the ease of operation, have brought especially rapid growth in the past decade.

Richard Whittle, author of “Predator: The Secret Origins of the Drone Revolution” and a global fellow at the Woodrow Wilson International Center for Scholars in Washington, says the military has tried to build remote-controlled aircraft for various missions “since the dawn of powered flight.” In 1917, Elmer Sperry received the first contract to develop an aerial torpedo—an unmanned flight system—for the Navy. Sperry, along with GlennHammond Curtiss, eventually developed a gyroscope capable of keeping a plane level during flight without human control and demonstrated it at a competition in 1914. Sperry delivered six test aircraft to the Navy, whichcontinued research into a “flying bomb,” but canceled the program in 1922

The British constructed UAVs for use as flying bombs and practice targets for anti-aircraft artillery. By 1933, the British Fairey Queen UAV inspired the U.S. Navy to resume experimentation, and Whittle says the militarymade a couple of attempts to use them in World War II. The Army also used radio-controlled aircraft in Vietnam to photograph battlefields.

Despite the U.S. military’s sporadic use of unmanned aerial vehicles, Whittle says it remained a niche technology until the mid-1990s, when engineer Abraham Karem designed what eventually would be known as the Gnat750. It was able to stay in the air for up to 12 hours and provide users with a 60-mile panorama. The Gnat 750 became the basis for what would become the Predator drone. Manufactured by General Atomics, themodern-day RQ-1 Predator first flew in 1994 and entered large-scale production in 1997. It has been continuously improved ever since. “The Predator changed everything,” Whittle says. “It could eventually stay aloft for 40hours without refueling, could carry [multiple] cameras, had [an advanced radar system] and fly up to 500 miles away from its ground station.”

Whittle says the Air Force started using and developing the Predator between 1998 and 2001 and “turned it into a weapon” as opposed to a strictly surveillance tool. By 2000, the Navy designed a system to mount a Hellfireair-to-surface missile on a Predator in an attempt to track and kill Qaeda leader Osama bin Laden. “It’s the first weapon in history whose operators can stalk and kill somebody on the other side of the planet,” he says—acapability that alarms critics of military drones.

A U.S. Air Force Predator drone, armed with an air-to-surface missile, lands at an airbase in a secret undisclosed location inthe Persian Gulf region in January 2016. The military uses the craft for airstrikes against the Islamic State. (John Moore/GettyImages)

Over the next decade, Predators mainly were used for surveillance and “the number of times they fired their weapons was minuscule, compared to the hours they fly for reconnaissance,” Whittle says. In November 2011, aPredator helped kill the third-ranking leader of al Qaeda and from there, “the number and use of drones, armed and unarmed, just skyrocketed.” By that time, military experts were calling drones the “counter-terrorism weaponof choice,” noting that America’s drones were flying more hours than manned strike aircraft. By 2014, the military drone market was a $3 billion industry, and it could reach $11 billion by 2021, according to a report bymarket research company ResearchMoz.

Civilians Create Hobbyist Machines

As the military was developing unmanned aircraft for surveillance in wars, civilian hobbyists were building their own for fun in backyards and open fields. Michael Smith, museum director at the Academy of Model Aeronauticsin Muncie, Ind., says the organization hosted its first radio-controlled aircraft competition in 1937. “There were maybe only six contestants with simple, rudimentary remote-controlled airplanes,” he says.

As the technology improved over the years, hobbyists tinkered with different designs, batteries, motors and servos to make their aircraft perform better and fly longer. Users began experimenting with still cameras in theirplanes in the early 1970s and, a decade later, a number of radio-controlled helicopters came on the market, Smith says. The use of cameras continued but wasn’t widespread. Pilots could only guess what images they werecapturing and had to land their drones, retrieve the film and develop it.

Over the next couple of decades, Smith says, “advances in batteries and self-stabilization systems improved dramatically” and “cameras got much lighter and smaller.” The first commercial “multi-rotor” (a helicopter withmultiple rotors) available to consumers was the small electric Japanese-made Keyence Gyrosaucer E-170, which came out in 1989. A variety of experimental and toy-type multi-rotors were created over the years, includingthe British Snelflight Hoverfly in 1997 and the Vectron Flying Saucer in 2001.

Meanwhile, hobbyists were building their own machines and manufacturers were experimenting with drones for commercial applications. One of the first civilian drones designed for the commercial market was theAerosonde, a 6-foot-long fixed-wing aircraft that came on the market in 1998. It was designed for high-altitude weather research and had an autopilot system. At the time it retailed for $15,000. In an attempt to make aname for the product, Aerosonde’s engineers used it to make the first unmanned flight across the Atlantic Ocean, from Canada to Scotland.

FAA Regulates Flight

The FAA was established to regulate manned air travel, but has grown to be the gatekeeper of the commercial drone industry, too. In the early days of manned aviation, pilots operated by line of sight, had little more thanmagnetic compasses and flew low to navigate along roadways. Fatal crashes were common.

In 1926, the Air Commerce Act gave the secretary of Commerce the authority to issue and enforce air traffic rules, and the first air traffic control centers were established eight years later in Newark, N.J., Cleveland andChicago. The 1938 Civil Aeronautics Act created the Civil Aeronautics Authority, and by the 1950s, commercial jets came into operation.

As regulations expanded, fatal accidents remained common. In 1956, a Trans World Airlines Super Constellation and a United Airlines DC-7 collided over the Grand Canyon, killing all 128 people aboard both planes. Itbrought to the nation’s attention that even as air traffic had doubled since the end of World War II, little had been done to reduce the risk of midair collisions.

The FAA was founded two years later under the Federal Aviation Act and, in 1967, the agency was integrated under the new Department of Transportation. As the airspace grew, so did the agency and its responsibilities.The Airline Deregulation Act of 1978 brought deregulation to the airline industry, luring more companies into the business, and the FAA had to verify every new airline and impose flight standards.

By the 1980s, the growing popularity of model aircraft caught the agency’s attention. In 1981, the FAA issued an advisory statement encouraging voluntary standards, saying that “model aircraft can at times pose a hazard tofull-scale aircraft in flight and to persons and property on the surface.” It laid out a set of operating standards, recommending the crafts avoid populated areas, fly no higher than 400 feet and notify the airport operator whenwithin three miles of the airport.

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Those standards remained in place for decades because as aircraft technology advanced, hobbyists largely operated their models within the guidelines. In 2007, the agency issued an addendum, identifying UAVs andbanning the commercial use of remotely controlled aircraft.

Domestic Drone Use Climbs

Hobbyists already were building and flying their own multi-rotor craft by 2000. Smith says the technology quickly developed around that time because the Internet allowed hobbyists to share designs and easily get parts andmaterial from around the globe. The technology improved, but drones remained a time-consuming, expensive hobby limited to those who had the leisure, enthusiasm and money to pursue it.

The falling prices and increasing ease of operation since around 2010 have changed the landscape, Smith says. The miniaturization of components such as gyros and GPS units made the machines smaller and cheaper.Advances in programming and autopilot systems also made them easier to fly. The GoPro Hero 1, which was released in 2006, offered hobbyists a small, lightweight camera to attach to aircraft. GoPro remains one of themost popular cameras for civilian drone use today. The DJI Phantom, which hit the market in 2013, was designed to carry a GoPro. The machine is simple to operate, allowing users to fly their camera hundreds of feet in theair after just an hour of practice.

Previously, “you had to build aircraft, go to a field and learn to fly them with an instructor and spend months building skills,” Smith says. “Now you can just open a box and fly [a drone] in a limited amount of time. It changedeverything.”

As more drones began to fly, FAA scrutiny increased. Under the FAA Modernization and Reform Act of 2012, Congress mandated that the agency issue regulations to integrate drones into the national airspace. The FAAhad been cracking down on dangerous operators, but it also started going after those violating the commercial ban. Filmmakers, photographers, real estate agents, construction companies and events managers had startedusing drones. Some knew they were running afoul of the FAA and tried to keep a low profile, while others didn’t care. In 2012, the FAA fined a hobbyist and photographer $10,000 for reckless operation of a drone whilefilming a video at the University of Virginia. (The fine was later dismissed.)

By 2013, the FAA regularly was sending “cease-and-desist” letters to drone operators that it said were violating the commercial ban. Companies either ignored the letters, ceased operations or used clever pricingstrategies to sidestep the regulations, such as performing the drone work for free while charging for other services. By the spring of 2014, businesses and media companies began challenging the FAA in court, questioningthe agency’s authority to regulate commerce.

By late 2014, the FAA—which keeps mum about its enforcement strategy—appeared to be relying less on fines and more on education. The agency started focusing on “voluntary compliance” and using a risk-basedapproach in its enforcement. The FAA approved the first commercial drone flight over land in June 2014 when it allowed BP to use a Puma AE drone to inspect oil infrastructure in Prudhoe Bay, Alaska. Later in theyear it started issuing Section 333 exemptions on a case-by-case basis, with the first six exemptions issued to film production companies. By August 2015, the agency had issued more than 1,000 Section 333exemptions; it continued to approve them at a rapid pace.

On Sept. 30, the agency missed its deadline to produce regulations for integrating UAVs into the national airspace. The industry group AUVSI told the agency: “The increasing number of businesses applying for Section 333exemptions demonstrates the pent-up demand for commercial UAS operations and the immediate need for a regulatory framework.”

Current SituationMore and More Exemptions

The commercial drone industry now is squeezed between an outright ban and limited authorization. Even though commercial operation remains officially banned, the FAA is starting to open the skies through Section 333exemptions. As of early January, the agency had granted more than 2,800 exemptions.

An AUVSI report found that the first 1,000 exemptions spanned 25 major industries; the top five were general aerial photography (512), real estate (350), general aerial surveying (301), agriculture (164) and construction(134). (Some exemptions involved firms in multiple industries.) At least 84 percent of the exemptions went to small businesses, and of the 1,480 approved platforms, 1,018 were manufactured by DJI. AUVSI credited theagency for moving forward, but also said it is “being held back by the continuous rulemaking delays that make it difficult to innovate without standards and other parameters.”

Photography Tops List of Commercial Drone Uses

First 1,000 federal exemptions for unmanned aerial systems, by type of industry/operation

Notes: Period covers Sept. 25, 2014, to about July 1, 2015. Figures do not add to 1,000 because some exemptions reference multiple industries oroperations. “Other” category includes the following industries or operations: environmental; training; search and rescue; research and development;emergency management; demos; insurance; mining, oil and gas; advertising; newsgathering; landscaping; flare stack inspection; sports; andeducation.

Source: “The First 1,000 Commercial UAS Exemptions,” Association for Unmanned Vehicle Systems International, September 2015, p. 4,http://tinyurl.com/jtbyo89

Commercial drone users need an exemption from the Federal Aviation Administration in order to operate. Theagency granted more than half of its first 1,000 exemptions to operators who planned to use unmannedsystems for aerial photography. Real estate and aerial surveying were the second- and third-most commonindustries, followed by aerial inspection and agriculture.

Middle Tennessee State’s Campbell says, “It’s a little bit easier to get exemptions, but we’re at an area where there’s a significant paperwork process.” The industry, he says, is eager to know what level of training operatorswill need.

The biggest hurdle in the Section 333 exemption process is that the drone must be operated by a licensed commercial pilot, something businesses say is cumbersome, expensive and unnecessary. According to the AircraftOwners and Pilots Association, an aviation industry group in Frederick, Md., it can cost between $5,000 and $9,000 to obtain a private pilot’s license. The FAA has acknowledged the forthcoming regulations won’t require aprivate pilot’s license. However, until the rules change, those wanting to operate a three-pound piece of plastic must learn how to fly a Cessna.

“We’re still relying on manned training, but a lot of the skills and abilities do not carry over” to unmanned aircraft, Campbell says. “You’re operating it from a completely different perspective than a pilot sitting in the cockpit.”

Michael Drobac, executive director of the Small UAV Coalition, which represents Amazon, Google and a dozen other companies, calls the current FAA process “arcane” and says that while companies are coming up withideas, “the inability to operate legally makes it difficult to sustain a business.”

Flying Under the Radar

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Stephen Hartzell: Licensingcould wait until 2017.

Although the FAA has yet to fully open the door to commercial operations, the industry is growing. According to data compiler CrunchBase, venture capitalists invested $210 million into drone manufacturing or applicationbusinesses in the first half of 2015, double the amount for all of 2014. High-profile investments included DJI’s cash infusion of $75 million from Accel Partners and drone software company Airware’s $40 million from GEVentures, Google Ventures and Kleiner Perkins.

Many industries are ready to use drones. Real estate companies are eager to take aerial photos and videos of homes. National Association of Realtors President Chris Polychron told a U.S. House Judiciary Committeepanel in September, “Realtors want clear regulation that permits the commercial application of UASs in a way that is affordable to users and safe for their communities.”

Stephen Hartzell, a lawyer and drone-law specialist with the Brooks Pierce law firm in Raleigh, N.C., says some businesses aren’t waiting for regulations. Many construction companies, realestate agents, small news agencies and even local governments are using drones without Section 333 exemptions, he says. As of late 2015, the FAA had not fined a single operator solely foroperating commercially; because of that and the agency’s lax enforcement, many businesses are just trying to “fly under the radar,” he adds.

“I’m not saying that makes it OK, but ultimately, as long as it’s safe and there’s no [dangerous consequences, commercial drones] appear to be of lesser concern” to the FAA, Hartzell says.There have been sporadic reports of the FAA sending businesses cease-and-desist letters but to date, none has resulted in fines.

The FAA doesn’t comment on its enforcement strategy, but Hartzell suspects the agency doesn’t want high-profile litigation at this point. “Throwing resources and legal arguments around over acouple of years while rulemaking is coming may not be the best use of resources. It could just be prudent purposes,” he says.

The FAA did recently display a willingness to become more aggressive. In October, it threatened SkyPan International, a Chicago drone firm, with a record $1.9 million fine for 65 illegal flightsover New York and Chicago from 2012 through 2014. The agency said it had already asked the company to stop multiple times but SkyPan continued. The FAA proposed levying the fine notfor commercial operation but for operating in a “careless or reckless manner so as to endanger lives or property.”

Drobac says the FAA is “trying to make a statement,” but that the “barn doors are already open and animals are running all over the place.”

Safety and Privacy Remain Issues

The prospect of increased drone use has led lawmakers to mull privacy rights and the protection of civil liberties. Some civil libertarians say law enforcement agencies could use drones to bypass fundamental FourthAmendment rights against unreasonable searches and seizures. Although states are reviewing warrant requirements, no uniform approach has yet to emerge.

Many Americans remain skeptical of the technology. A 2015 Reuters/Ipsos online poll of 2,405 respondents found that 73 percent wanted regulations. Respondents also said they were concerned about invasions of privacy,and 42 percent opposed private ownership of drones, saying they preferred restricting them to experts and public officials. In regard to other uses, 41 percent said news organizations should be able to use drones to gathernews, while 46 percent said they shouldn’t.

Majority Support Regulating Consumer Drones

Notes: Poll based on online survey of 2,405 American adults from Jan. 21–27, 2015. Percentages may not add to 100 percent due to rounding.

Source: “Ipsos Poll Conducted for Reuters,” Ipsos, Jan. 29, 2015, http://tinyurl.com/pmk37uq

Four in 10 American adults surveyed disapproved of privately owned drones, according to a January 2015 pollby market research firm Ipsos. Nearly three-fourths agreed consumer drones should be regulated. About sevenin 10 Americans agreed police should be allowed to use drones for investigations, compared with 41 percentwho agreed news agencies should be permitted to use drones for newsgathering.

Even the strictest laws may not deter all rogue operators. The FAA reported in October that it was partnering with the information-technology company CACI International to test anti-drone technology to counter roguevehicles flying within a five-mile radius of airports. The technology can track down the drone operator and force the craft to land.

The drone industry is trying to police itself and to preserve its image by educating new drone operators as well as the public. “We’re hearing about a lot of incidents because people don’t understand [drones], and it can take[some practice and knowledge] before you can use them safely,” says Abby Speicher, CEO and co-founder of DARTdrones Flight Academy in Boston.

Speicher says she’s disappointed that the FAA has focused so heavily on commercial operations while failing to recognize “some hobbyists who have nothing to lose, no understanding of airspace and just go out there anddo whatever they want.” She says she would like to see a strong push from “the big players” and from the FAA on education and awareness. The growing number of consumers using drones could be a greater risk than thesmaller number of unregulated commercial operators, she says.

As the FAA moves past Section 333 exemptions to its full-scale drone licensing system in 2016, Speicher says drone flight time should be mandatory along with classroom time. “I think there should be some level of proofthat you know how to fly. You read the manual, you took the class but you need to prove you can fly. Just knowing [paperwork and airspace] isn’t going to reduce the number of incidents,” she says.

In its Dec. 14 announcement creating the national database, the FAA said owners of drones heavier than a half-pound—almost all consumer craft other than small toys—must register on a government website to receive aunique user number that they must attach or write on their drones. The Academy of Model Aeronautics, a model-aircraft group, called the rules, which took effect Dec. 21, “an unnecessary burden” for drone owners, but

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Abby Speicher: Flight time should be mandatory.(DARTdrones Flight Academy)

Transportation Secretary Anthony Foxx said “registration will enforce the need for … users to operate unmanned aircraft safely.”

Looking AheadAfter the Skies Open

Once commercial-drone-licensing regulations are in place—which the FAA says it hopes will happen by June 2016—lawyer Hartzell predicts a “challenge period”that could last six months to a year. “Realistically, it could still be well into 2017 before the rules are actually in place to where you can get” a commercial operator’slicense, Hartzell says.

AUVSI projected that the integration of drones into the national airspace will have a $13.6 billion impact in the first three years, eventually reaching $82.1 billion ofeconomic activity by 2025. The employment projections include 34,000 manufacturing jobs and 70,000 new jobs in the first three years. With the technologyavailable to offer marketable services, AUVSI said it’s just a matter of making it easier for businesses to operate.

Drone-Related Jobs Projected to Rise

Direct employment resulting from integration of unmanned aerial systems in the United States, in thousands, 2015–25

Source: “The Economic Impact of Unmanned Aircraft Systems Integration in the United States,” Association for Unmanned Vehicle SystemsInternational, March 2013, p. 19, http://tinyurl.com/madyynw

Direct employment in unmanned aerial systems is projected to double in 2016 and grow by another 50 percentin 2017 as drones are integrated into the National Airspace System, according to a 2013 report by aninternational trade group representing drone manufacturers. The number of direct jobs could rise to more than50,000 by 2025.

Once the skies open to commercial operations, the market will face new challenges. Hartzell predicts that more accessible licensing will create “an explosion of commercial drone operations, like a dam is breaking.”

Hank Perritt, the CEO of drone company Modovolate Aviation and a professor of law at Chicago-Kent College of Law, says the bigger question is whether demand for drone services will keep up with supply. While a lot ofpeople are waiting to fly them commercially, he says, “you don’t see many people wanting to hire [drones].” He adds, “The $64 million question is whether the demand in the commercial marketplace is going to be strongenough to support the supply.”

Hartzell also says a bubble could form on the supply side when lawful drone operators flood the market. “Not everyone is going to survive,” he says. “Some people are just going to want to start businesses because it’s cool.I’m not sure they’ll survive. The ones who will are people that incorporate it as a tool in an existing industry.”

Yet both the process of using drones and the technology are evolving, says Jerry Hendrix, executive director of the Lone Star UAS Center of Excellence & Innovation at Texas A&M University, Corpus Christi. Even though thehardware is here, industries and businesses are “still figuring out what to do with it,” Hendrix says. He predicts immediate demand in agriculture and military applications, but that other markets may take a while to develop.

“It took the Wright Brothers four years to receive the first contract after they demonstrated flight,” he says. “The technology will continue to evolve, but the processes and the industry will have to keep up.”

About the AuthorCraig Guillot is a New Orleans-based business reporter whose work has appeared in The Wall Street Journal, Entrepreneur, CNBC.com and NationalGeographic.com. He has written about drones for Planning Magazine(American Planning Association), STORES Magazine (National Retail Federation), Next City and Area Development. Guillot’s last report for SAGE Business Researcher was on Omnichannel Retail.

Chronology 1917–1980s Military and hobbyists experiment with unmanned flight.

1917 The U.S. military explores using unmanned aerial vehicles (UAVs) in battle.

1926 The Air Commerce Act puts the secretary of Commerce in charge of developing air traffic controls.

1937 The Academy of Model Aeronautics in Muncie, Ind., hosts its first radio-controlled aircraft competition.

1938 The Civil Aeronautics Act gives the federal government control of airspace regulation.

1958 The Federal Aviation Act creates the Federal Aviation Agency and empowers it with authority to regulate and enforce civil aviation safety.

1966 The Federal Aviation Agency becomes the Federal Aviation Administration (FAA) under the Department of Transportation.

1981 As radio-controlled aircraft become increasingly popular with hobbyists, the FAA issues remote-control aircraft guidelines that say aircraft must stay within “line of sight,” at least five miles away fromairports and under an altitude of 400 feet.

1990s–2000s Military, hobbyists increasingly embrace unmanned flight.

1990 The FAA allows the first commercial use of an unmanned craft in U.S. airspace to monitor wildfires in California.

1997 The RQ-1 Predator drone enters production for military use.

1998 The Aerosonde, one of the first UAVs developed for weather research and remote sensing, crosses the Atlantic Ocean in the longest unmanned flight at the time.

2004 The first officially reported drone strike by the U.S. military occurs in Pakistan.

2007 Chris Anderson, future CEO of 3D Robotics, builds his first drone at home and founds DIYDrones.com, an online community and forum where enthusiasts could discuss building drones.

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2010s–Present Drone technology becomes inexpensive and accessible.

2012 The FAA Modernization and Reform Act calls for the agency to develop regulations by Sept. 30, 2015, to integrate commercial drones into the national airspace.… Anderson founds 3D Robotics, whichbecomes North America’s largest commercial drone manufacturer.

2013 The DJI Phantom, a small drone that sparks the consumer drone revolution, goes on sale at a retail price of $679.… Amazon CEO Jeff Bezos announces on “60 Minutes” that the company is working on adrone delivery service.

2014 The FAA authorizes the first commercial drone flight over land for BP to survey pipelines in Prudhoe Bay, Alaska.

2015 A private drone operator crashes his craft on the lawn of the White House. (January) … The FAA announces the Small UAS Notice of Proposed Rulemaking for commercial operations. (June) … The firstFAA-approved drone delivery in the United States takes place when a drone delivers medical supplies to a rural clinic in Wise County, Va. (July) … The FAA reports that manned aircraft pilots spotted atleast 650 drones since the beginning of the year, far surpassing the 238 sightings in all of 2014. (August) … The FAA reaches the 1,000 mark of Section 333 exemptions that permit commercial drone useand is approving them at a rate of nearly 30 per day, compared with as few as one per month in 2014. (September) … The FAA misses its deadline to create a plan to integrate drones into the nationalairspace. (September) … The agency proposes a $1.9 million fine against SkyPan International for unauthorized operations between 2012 and 2014. (October) … The FAA reaches the 2,000 mark forSection 333 exemptions. (October) … FAA announces it will require owners of recreational drones to register their machines in a national database. (December)

ResourcesBibliography

Books

Hogan, Steven, “The Drone Revolution: How Robotic Aviation Will Change the World,” CreateSpace, 2015. A lawyer who specializes in drones discusses how the technology will change multiple industries.

Rupprecht, Jonathan, “Drones: Their Many Civilian Uses and the U.S. Laws Surrounding Them,” CreateSpace, 2015. A lawyer who is also a commercial pilot examines the complex regulations surrounding drones in theUnited States.

Whittle, Richard, “Predator: The Secret Origins of the Drone Revolution,” Picador, 2015. A global fellow at the Woodrow Wilson Center who has studied the military for three decades looks at the history of the world’s mostadvanced military drone.

Articles

Goglia, John, “FAA speeds up small drone exemptions. But why not just issue blanket exemption?” Forbes.com blog, April 12, 2015, http://tinyurl.com/kh9ozpt. An aviation safety consultant and professor of aeronauticsquestions the Federal Aviation Administration (FAA) regulations on small drones.

Gross, Doug, “Amazon’s drone delivery: How would it work?” CNN, Dec. 2, 2013, http://tinyurl.com/onntmxc. Amazon floats a plan to use a fleet of drones to deliver small packages to customers in under than 30 minutes.

Hill, Kashmir, “Congress Welcomes The Drones,” Forbes, Feb. 7, 2012, http://tinyurl.com/6vedoc8. Congress passes the FAA Reauthorization Act, paving the way for drones to be integrated into U.S. airspace by 2015.

Hoye, Matthew, and Rene Marsh, “Who’s in charge of regulating commercial drones?” CNN, March 19, 2015, http://tinyurl.com/phatjzf. Regulators are concerned that no single federal agency is in command of developing astrategy to regulate and enforce laws on drones.

Marsh, Rene, “FAA tests technology to counter rogue drones,” CNN, Oct. 7, 2015, http://tinyurl.com/qc8787y. The FAA is testing technology that would target drones flying within five miles of airports and force them to land.

Nicas, Jack, “Criminals, Terrorists Find Uses for Drones, Raising Concerns,” The Wall Street Journal, Jan. 28, 2015, http://tinyurl.com/ot37js3. Authorities worry that criminals and terrorists will increasingly be using drones.

Palermo, Elizabeth, “Laser Weapon Melts Test Drone in Midair,” Livescience, Sept. 9, 2015, http://tinyurl.com/onfw4kr. A portable laser weapon that can fit in a suitcase could give authorities the ability to take down roguedrones in midair.

Scott, Alwyn, “Americans OK with police drones—private ownership, not so much: Poll,” Reuters, Feb. 5, 2015, http://tinyurl.com/z22lv8j. Results of online survey indicate Americans have mixed feelings about drones andhow they should be used and regulated.

Surowiecki, James, “Why drone delivery won’t replace the UPS guy,” The New Yorker, Dec. 5, 2013, http://tinyurl.com/zwwzwxy. A business writer doesn’t believe drone deliveries will be the norm any time soon.

Swearingen, Jake, “1 Million Drones Will Be Sold This Christmas, and the FAA Is Terrified,” Popular Mechanics, Sept. 29, 2015, http://tinyurl.com/o4erjc5. The FAA is alarmed that drones may be one of the most popularholiday presents in 2015.

“Welcome to the Drone Age: Miniature, pilot-less aircraft are on the verge of becoming commonplace,” The Economist, Sept. 26, 2015, http://tinyurl.com/qjoz3pm. The rapid rise of drones has caught the world off-guard.

Whitlock, Craig, “FAA will miss deadline to integrate drones in U.S. skies, report says,” The Washington Post, June 30, 3014, http://tinyurl.com/ppauugt. A government audit finds that the FAA is far behind schedule increating regulations to integrate commercial drones into the national airspace.

Reports and Studies

“Drones Take Flight: Key issues for insurance,” Lloyd’s of London, 2015, http://tinyurl.com/okm6e2h. International insurance marketplace analyzes the issues insurance companies have with the drone industry.

“The Economic Impact of Unmanned Aircraft Systems Integration in the United States,” Association for Unmanned Vehicle Systems International, March 2013, http://tinyurl.com/h3dfk5s. Trade association for the droneindustry predicts that if drones are integrated into the national airspace, the industry will contribute $13.6 billion to the economy over three years.

“The First 1,000 Commercial Exemptions,” Association for Unmanned Vehicle Systems International, 2015, http://www.auvsi.org/1000report. The drone industry’s trade association analyzes 1,000 FAA exemptionspermitting commercial use, breaking them down by industry, state, application and equipment.

“Overview of Small UAS Notice of Proposed Rulemaking,” Federal Aviation Administration, Feb. 15, 2015, http://tinyurl.com/mnkp7ot. The FAA outlines provisions being proposed for small unmanned aircraft.

“Section 333,” Federal Aviation Administration, undated, http://tinyurl.com/pfr5tot. The FAA maintains and updates a Web page that provides details on Section 333 exemptions that permit commercial drone use, includinghow many it has granted.

Hazel, Bob, and Georges Aoude, “In Commercial Drones, the Race Is On: Aviation’s Fastest-Growing Sector Outpaces US Regulators,” Oliver Wyman, 2015, http://tinyurl.com/olq3els. A consulting firm’s comprehensivereport highlights how drone technology is advancing faster than regulators can keep pace.

The Next Step

International Regulations

Ames, Paul, “Why Europe Loves Drones,” The Week, May 17, 2015, http://tinyurl.com/hfdhyw6. European Union lawmakers in 2016 plan to develop rules for operating commercial drones across Europe that industry expertssay will be superior to any comparable regulations in the United States.

Huifeng, He, “China cracks down on drone usage with new regulations but most consumers needn’t worry,” South China Morning Post, Dec. 1, 2015, http://tinyurl.com/h5kfycv. The Chinese government banned the use ofsmall drones for commercial deliveries in cities and will require operators to register their devices with the country’s civil aviation authority.

Johnson, Tim, “As drone usage soars in Latin America, so do concerns,” McClatchy Newspapers, Aug. 31, 2015, http://tinyurl.com/p9cu7r3. Lawmakers in Mexico, Colombia and other Latin American countries hope tostrengthen regulations regarding the operation of commercial drones to prevent accidents near crowds and to curb criminal activity across borders.

Licensing

Lee, Deron, “Why a drone journalism educator is getting his pilot’s license,” Columbia Journalism Review, Aug. 28, 2015, http://tinyurl.com/z8gruu4. A University of Nebraska-Lincoln professor is earning a light-aircraft pilot’slicense to reopen his “Drone Journalism Lab,” in which he taught students how to use drones for reporting; the Federal Aviation Administration (FAA) shuttered the program in 2013.

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Michel, Arthur Holland, “The cheapest way to get a drone license is to take hot air balloon lessons,” The Verge, Aug. 27, 2015, http://tinyurl.com/ohfwd39. Some who have received exemptions to operate commercial dronesfrom the FAA have discovered the least costly way to meet the agency’s requirement that they obtain a pilot’s license is by getting a license to operate a hot-air balloon.

Thielman, Sam, “Drone owners get Christmas surprise from FAA: you will have to register to fly,” The Guardian, Dec. 14, 2015, http://tinyurl.com/h2slxo9. New rules from the FAA and U.S. Department of Transportation willrequire operators to register many recreational drones to fly them in the national airspace system.

Privacy

Burns, Amy Clarke, “Drones raise privacy concerns, questions,” The Greenville [S.C.] News, Aug. 19, 2015, http://tinyurl.com/h6hjnyz. Lawmakers in South Carolina, Tennessee and other states have proposed legislationbanning private drone operators from flying their devices over private property or using them to take photos or conduct surveillance over such sites.

Finley, Klint, “Even Super-Small Drones Would Have to Register Under Federal Proposal,” Wired, Nov. 23, 2015, http://tinyurl.com/oue669x. An FAA rulemaking task force recommended that the agency keep all registeredcommercial drone owners’ information private in its proposed registry and exempt the data from disclosure under the Freedom of Information Act.

Pramuk, Jacob, “Drone battle’s next front: Your local government,” CNBC, Dec. 24, 2015, http://tinyurl.com/halmd8a. Lawmakers in 45 states have passed local ordinances or state laws restricting the use of drones, largelyto protect residents’ safety and personal privacy, though the FAA says it will evaluate whether such measures conflict with its pending rules for commercial drone use.

Safety

Ranaivo, Yann, “Virginia Tech research: What dangers do drones pose for airlines?” The Roanoke Times, Dec. 3, 2015, http://tinyurl.com/zpfjshb. Researchers from Virginia Tech in Blacksburg, Va., one of six federallyapproved U.S. drone test sites, are studying the dangers of operating drones near manned aircraft in national airspace.

Rocheleau, Matt, “Close calls between drones, planes on the rise,” The Boston Globe, Dec. 21, 2015, http://tinyurl.com/nslb486. Pilots, air traffic officials and others reported 26 near-collisions between drones and airplanesor helicopters in Massachusetts to the FAA over nine months in 2014 and 2015, encounters that aviation officials said pose significant flight safety risks.

Shead, Sam, “A Belgian startup is trying to make ‘the world’s safest drone,’” Business Insider, Dec. 3, 2015, http://tinyurl.com/z2wg8z7. A Belgian technology firm created a one-pound drone it says would be the world’ssafest; the device is a sphere with an enclosed propeller.

Organizations

American Civil Liberties Union 125 Broad St., 18th Floor, New York, NY 10004 212-549-2500 www.aclu.org Advocacy organization for personal liberties and privacy rights.

Association for Unmanned Vehicle Systems International 2700 S. Quincy St., Suite 400, Arlington, VA 22206 703-845-9671 www.auvsi.org Association representing drone industry and manufacturers.

Center for the Study of the Drone Bard College, Campus Road, PO Box 5000, Annandale-on-Hudson, NY 12504-5000 845-758-7472 http://dronecenter.bard.edu/about Research, education and art community working to understand unmanned aerial vehicles.

Center for Unmanned Aircraft Systems John D. Odegard School of Aerospace Sciences, University of North Dakota, Clifford Hall Room 260, 3980 Campus Road, Stop 9007, Grand Forks, ND 58202-9007 701-777-2615 www.aero.und.edu One of the country’s premiere aviation schools and research centers on unmanned aircraft systems.

Federal Aviation Administration 800 Independence Ave., S.W., Washington, DC 20591 866-835-5322 www.faa.gov Federal agency responsible for regulating airspace and manned and unmanned aircraft.

Information Technology & Innovation Foundation 1101 K St., N.W., Suite 610, Washington, DC 20005 202-449-1351 www.itif.org Research and educational institute focusing on critical issues at the intersection of technological innovation and public policy.

Small UAV Coalition http://www.smalluavcoalition.org Drone industry group that advocates for law and policy changes to permit the operation of small unmanned aerial vehicles (UAVs) beyond line-of-sight, and with autonomy, for commercial, consumer, recreational andphilanthropic purposes.

Notes[1] Barbara Booth, “Is it time to buy your kid a drone for Christmas?” CNBC, Dec. 22, 2014, http://tinyurl.com/zuanekz.

[2] “Welcome to the Drone Age: Miniature, pilotless aircraft are on the verge of becoming commonplace,” The Economist, Sept. 26, 2015, http://tinyurl.com/qjoz3pm.

[3] “New Tech to Drive CE Industry Growth in 2015, Projects CEA’s Midyear Sales and Forecast Reports,” news release, Consumer Technology Association, July 15, 2015, http://tinyurl.com/jrdd36k.

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[15] Michael Martinez, John Newsome and Rene Marsh, “Handgun-firing drone appears legal in video, but FAA, police probe further,” CNN, July 21, 2015, http://tinyurl.com/nbjoqvr.

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[68] Keith Morelli, “FAA warning letter chilling to Lutz drone owner,” The Tampa Tribune, March 23, 2015, http://tinyurl.com/zo7qcpl.

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[71] Alwyn Scott, “Americans OK with police drones - private ownership, not so much: Poll,” Reuters, Feb. 5, 2015, http://tinyurl.com/gqvq4bj.

[72] Rene Marsh, “FAA tests technology to counter rogue drones,” CNN, Oct. 7, 2015, http://tinyurl.com/qc8787y.

[73] Jack Nicas, “FAA to Require Most Drones to Be Registered and Marked,” The Wall Street Journal, Dec. 14, 2015, http://tinyurl.com/h9x4q58.

[74] “The Economic Impact of Unmanned Aircraft Systems … Integration in the United States,” op. cit.

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