Delivering Drones

Waiting for That Delivery Drone? Regulators Are in No Rush


Waiting for That Delivery Drone? Regulators Are in No Rush

Illustration by 731

Amazon.com’s (AMZN) goal of airborne retail gratification—using drones to air-drop purchases to your home or office—is hardly the only business application proposed for unmanned aircraft. Scores of companies are hoping to exploit drones’ capabilities, from surveying power lines to aiding firefighters and offshore oil explorers—or patrolling borders and far-off facilities.

“There are hundreds of companies already out there with very well thought-out and good ideas on how to use these things to do business,” says Timothy Adelman, an attorney in Annapolis, Md., who works on regulatory issues surrounding unmanned aircraft systems. Proponents envision an industry that can create 70,000 new jobs and generate $13.5 billion in economic activity in the three years—but only after regulators integrate commercial drones into the U.S. airspace.

The first steps of that regulatory process are expected some time in 2015. Before then, the U.S. Federal Aviation Administration will select six test sites at which data will be collected next year on the operation of the unmanned aircraft. The agency forecasts that some 7,500 small drones will be flying in U.S. airspace by 2019, FAA Administrator Michael Huerta said in a speech last month.

Yet the nascent industry faces numerous hurdles before Americans will see an array of commercial drones delivering pizzas, inspecting roads and pipelines, and monitoring crops. “In moving forward, we recognize that the expanded use of unmanned aircraft presents great opportunities, but it’s also true that integrating these aircraft presents significant challenges,” Huerta said. For one thing, drones come in all shapes and sizes and will need to detect and avoid air traffic such as police helicopters and airlines. Will there be altitude restrictions? Can these unmanned aircraft fly near airports? If so, how close? Do they all need a remote pilot? How do you certify that they’re airworthy? Should they carry equipment to transmit their identification and location data? If one crashes, who will be responsible for addressing damage?

“Just like when cars came out, there’s going to be a similar evolution,” says Joe Hall, chief technologist at the Center for Technology and Democracy in Washington. “What we start out with in 2015 is going to look very different than in 10 years.”

Because of these many considerations, the FAA has adopted a cautious approach to any rules for unmanned aircraft over concerns about the many bad outcomes that could arise. “This will set the precedent, so it’s hard to back off a rule you’ve created and shape it and redefine it after it’s out there,” Adelman says. “They’re human. They understand that if they make a mistake they’re going to get blamed for it.”

A detailed FAA “roadmap for commercial drones” (PDF) released last month plumbs the extensive list of trouble spots. One small example: The agency has rules governing security for cockpit doors in an aircraft, but what does a terms like “cockpit door” even mean for a drone operator sitting hundreds or thousands of miles away? It’s just one of the issues regulators have identified for integrating drones into U.S. airspace. Even the FAA’s limited drone experience to date has been enough to demonstrate that “rule-making efforts may be more complex, receive greater scrutiny, and require longer development timeframes than the average regulatory effort,” the agency says.

Those time frames are frustrating many companies—now including Amazon—that wish to ramp up manufacture or operation of commercial drones. The wait threatens to ruin many smaller companies that have been unable to monetize their products or services in the meantime, says Adelman, who predicts a wave of bankruptcies before the rules are set.

An inevitable sector of new business linked to commercial drones remains on hold, at least for now: insurance coverage for drone operators. Still, several insurers have begun working with Adelman’s firm, LeClairRyan, to price products for the industry . “The dam just needs to open,” he says.

For Amazon, which has made clear that its fleet of octocopters will be carrying consumer products weighing less than five pounds, there may be an additional consideration to its futuristic delivery scheme: Will people try to steal merchandise by shooting down drones? Would it even be illegal to knock down an unnamed craft buzzing over your home? “If an Amazon drone crosses into your property, can you shoot it down?” Hall asks. “Who the hell knows?”

Bachman is an associate editor for Businessweek.com.

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Companies Mentioned

  • AMZN
    (Amazon.com Inc)
    • $339.04 USD
    • -0.98
    • -0.29%
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