It seems like a perfect time to get into the drone business.
With easy access to technology and patchy regulation, small commercial drones already have been used to film box-office hits and market expensive real estate.
Internet retailer Amazon is testing its sixth generation of an unmanned aircraft system that could one day whisk packages to customers within hours. With big corporations like FedEx and Domino’s Pizza flirting with the technology, law firms, trade groups and insurers are lining up to capitalize on an expected economic gold mine.
There’s only one catch: Commercial drones are illegal.
In a 2007 policy statement, the Federal Aviation Administration essentially declared a ban on operating drones for commercial purposes. The agency doubled down on that position in early April, appealing an administrative order that tossed out the legal foundation for its policy. The ruling came after a commercial drone user challenged an FAA fine levied against him.
The ongoing case and mounting pressure to tap into the potentially lucrative industry puts the FAA in a tough spot. The regulatory body, responsible for keeping U.S. airspace safe, plans to propose a formal rule for commercial drones by the end of the year. But regulations aren’t likely to be finalized until 2015 at the earliest, leaving some wondering whether the FAA can catch up to an industry already half past go.
“I don’t think there’s any question that market pressure is intense and the FAA is struggling on the regulatory side to keep up,” said James H. Burnley, a former Transportation secretary and a Washington attorney.
Much of the commercial interest is focused on small drones — those that weigh less than 55 pounds, fly less than 400 feet high and often remain within the operator’s line of sight. Many look no different than toy helicopters.
But from a regulatory standpoint, integrating these drones into the national airspace is a complicated challenge that must reconcile evolving technology with safety concerns, including how to keep the drones from crashing into manned aircraft or causing damage or injury as they land.
“We really want to get it right the first time,” said FAA spokesman Les Dorr.
The FAA has certified more than 600 public-sector entities to fly drones, mostly law enforcement agencies and universities. It announced last month that the first of six national sites for commercial drone testing was ready in North Dakota.
But to date, the agency says it has made only one exception to its commercial ban, allowing oil company ConocoPhillips to survey marine mammals and ice in the Arctic.
Commercial drone advocates say the agency is taking too long. Thirty-three industry groups, including the National Ski Areas Assn. and National Sunflower Assn., are urging FAA Administrator Michael Huerta to expedite the approval process, citing a nearly four-year delay on its small-drone rule.
“The current regulatory void has left American entrepreneurs and others either sitting on the sidelines or operating in the absence of appropriate safety guidelines,” they wrote in an April 8 letter.
Some businesses aren’t waiting for the FAA rules to be completed. A Minnesota-based beer company made an online commercial that featured a drone transporting its “frosty winter lager” to some expectant ice fishermen.
Weeks later, a Detroit flower company announced plans to drone-deliver roses on Valentine’s Day. In March, the Washington Nationals sent up a drone to catch the baseball team’s spring training on tape.
Several large law firms have launched drone practices, and there’s even a fledgling insurance market. Nationwide Insurance’s agricultural subsidiary is offering liability coverage to a handful of customers who currently use small drones in their farm operations, an underwriting director confirmed.
Amazon told shareholders in April that it’s continuing to test the “octocopter” that it unveiled in December, saying it will be ready to roll out drone delivery service as soon as the FAA gives its OK.
Although even unauthorized testing of commercial drones is prohibited under the FAA policy and the agency regularly notifies operators when it discovers a violation, weak enforcement has often left businesses flying in an air of uncertainty. For many, the crime outweighs the punishment
