Daily Ticker

Amazon drone plan grounded... for now


When Amazon (AMZN) announced that it would begin using drones to deliver some shipments last December, CEO Jeff Bezos was largely hailed as an innovative hero, the next Steve Jobs. Now it looks like there’s one little thing getting in the way of his dreams, the United States government.

Federal Aviation Administration documents filed Monday make it clear that drones are approved only for “recreational purposes” and delivering packages for a fee does not qualify as recreation.

In the associated video, Yahoo Finance Editor-in-Chief Aaron Task said he thinks Amazon will forge ahead despite the FAA’s opposition. “This doesn’t change their plans, which is what they have said because their plans are that they’re going to be doing this several years in the future.”

The FAA has until the end of 2015 to reconsider the ruling on commercial use of drones. Earlier this year, a federal judge questioned the FAA decision to ban commercial use of drones, which has been in effect since 2007. The judge said the FAA did not follow proper procedure and get public input on the regulations before they were adopted.

Task thinks there’s still a chance regulators and Amazon could find compromise if the FAA revisits its ruling. “I think it still could sync up with Amazon’s long-term plans,” said Task. “They weren’t about to launch this today anyway.”

The FAA regulations lay out a list of other uses for drones that would be considered “commercial use” and therefore banned under the regulations. Included in that list: real estate agents using photos from drones to take pictures of homes for the purposes of sales and promotion, taking photos of crops that are going to be sold and receiving money for demonstrating the abilities of a drone.

In spite of the bans on those commercial uses and others, Task believes tech companies are still working on new products and services under the assumption that drones will eventually be approved for commercial use. “They’re absolutely betting that commercial use of drones is going to be allowed,” he said. “The FAA has already allowed BP and some other oil companies to use drones in certain circumstances, so that opens the door for commercial use of drones.”

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