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Despite Amazon’s Big Plans, the Feds Are Grounding the Drone Industry

·Senior Columnist
An Amazon PrimeAir drone is shown in this publicity photo released to Reuters on December 2, 2013. REUTERS/Amazon.com/Handout via Reuters (Reuters)

If you saw "Skyfall" — the latest James Bond installment — you likely marveled at the breathtaking opening scene in which 007 chases a bandit across the rooftops of Istanbul on a motorcycle. Filming it all was a remote-controlled helicopter resembling a weed-wacker with an overhead projector attached — the latest in aerial filming technology.

But for now, such unmanned aerial-filming contraptions are effectively banned in the United States — the birthplace of the motion-picture industry — along with virtually all other commercial uses of unmanned aircraft, or drones. That’s because the U.S. government has stalled in its efforts to regulate and manage the use of drones, a breakthrough technology fostered largely by the U.S. military. As a result, nations including Europe and China are gaining an edge over the U.S. in yet another industry.

Online retailing giant Amazon (AMZN) drew fresh attention to the commercial potential of drones recently, when CEO Jeff Bezos unveiled an unmanned “octocopter” that, theoretically, could deliver small packages to customers’ doorsteps — a service he dubbed PrimeAir. Amazon-watchers considered the move something of a publicity stunt meant to burnish Amazon’s reputation for customer service, and Bezos himself said it could be four or five years before such drones are actually flying.

A behind-the-scenes glimpse

But a behind-the-scenes glimpse into the Federal Aviation Administration’s efforts to regulate drones suggests Amazon’s octocopters may never take off. “Nothing they’re contemplating right now fits with that vision,” says a source familiar with the FAA’s policy efforts. “I don’t see it happening.”

The fortunes of Flying-Cam, the aerial filming company that worked on "Skyfall" and worked on movies including the "Harry Potter" and "Mission Impossible" franchises, illustrate the difficulty of fostering a commercial drone industry in the U.S. Flying-Cam, which has offices in Los Angeles, Brussels and Hong Kong, began using small remote-controlled aircraft outfitted with cameras in the 1980s. Such innovations earned company founder Emanuel Previnaire an Academy Award for technical achievement in 1995. But in 2011 Flying-Cam’s U.S. business was effectively grounded when the FAA notified the film industry that flying unmanned aerial systems (UAS) for commercial use was illegal until regulations were finalized.

In 2007 the FAA had quietly clarified its position on what constitutes an aircraft, as non-military UAS were morphing from recreational playthings into genuine aircraft able to fly hundreds of miles, reach elevations above 10,000 feet and carry a sizable payload. This was a de facto ban on the commercial use of drones until the FAA came up with formal rules governing their use. Since many companies were unaware of the change, the FAA began to tell industry officials that the use of drones was not yet legal as it became aware they were using them.

Virtually overnight, Flying-Cam and other companies in the same business were grounded in the U.S. “Everything has been shut down until they regulate it,” says Haik Gazarian, director of operations for Flying-Cam. “The most tragic part is, an industry that was shining in many ways has been reduced. We’re not able to do these sequences in the U.S. We have to take the whole thing outside.”

Flying-Cam laid off more than 30 workers and other companies doing the same type of work have gone bust. Flying-Cam is picking up more overseas business, meanwhile, largely because regulators in countries such as England, France and China have developed new rules that allow and even encourage the commercial use of drones. Flying-Cam recently shot aerial scenes for the forthcoming films "Transformers: Age of Extinction" in Hong Kong and "Smurfs II" in Paris, for instance. And the production for a Sony PlayStation advertisement was recently moved from L.A. to Budapest so the director could include such aerial shots.

Directors are still free to commission manned helicopters for aerial filming, but unmanned systems have several advantages. Since they tend to be much smaller, they can penetrate tight spaces and fly far lower than big choppers that would disrupt a set with rotor wash and noise. Lower flying also allows drones to get more-intimate aerial shots with the background in sharper focus.

A safer drone

Drones are probably safer than manned helicopters, too, which is an unhappy irony of the de facto ban. They can take off, fly and land completely within the boundaries of a movie set, with no need for helipads or use of public airspace to transit to or from a shoot. Most smaller drones run on batteries, so there’s no flammable fuel on board if there’s a crash. And movie sets tend to have strict safety rules, including tight security governing who can enter.

To be fair to the FAA, the proliferation of UAS does represent a bona fide safety issue and even a potential new avenue for terrorists hoping to attack U.S. targets. The rapid transformation of UAS is comparable to other manifestations of the digital revolution. GPS guidance systems have become cheap and ubiquitous, while advanced avionics are common enough to incorporate into affordable off-the-shelf UAS. Without new rules, virtually anybody could fly a drone wherever they wanted, for any reason. The FAA, in fact, believes there are still plenty of businesses using UAS beneath the radar, as it were, despite the ban.

Following the 2007 policy clarification, the FAA said it would publish a draft regulation for small UAS — those weighing less than 55 pounds, such as the Flying-Cam machine — by late 2011. That would spell out the rules and make it legal to use them for those who complied. But FAA insiders say the draft was so restrictive — requiring small drones to have the same sort of airworthiness certification as large passenger-carrying planes, for instance, and UAS operators to have licenses and other credentials similar to those of commercial pilots — that the FAA never finalized the regulation.

In 2012, Congress passed a law requiring the FAA to publish final regulations allowing certain commercial UAS use by Sept. 30, 2015. The agency says it will release draft rules next year, and it recently published its first annual "road map" laying out necessary steps. Congress also ordered the FAA to selectively approve certain UAS for use by energy firms off the Alaska coast, which the agency did this summer. Both types of UAS the FAA certified had already been approved for military use, an advantage Flying-Cam and most other companies hoping to use UAS — including Amazon — doesn't have. Law-enforcement organizations and other public agencies also receive permission from the FAA to fly UAS in the national airspace for surveillance and other purposes.

The FAA has also drawn several important distinctions between different types of UAS. “Model” remote-controlled aircraft can be flown for recreational use pretty much without limits, although “guidance” from the FAA, dating to 1981, recommends they remain below 400 feet, stay clear of populated areas and full-scale aircraft, and aren’t used for business purposes. The FAA, however, is concerned some businesses will try to operate UAS by claiming they’re abiding by  guidance aimed at modelers.

The agency anticipates many commercial uses once the regulatory framework is in place, including cargo delivery (as Amazon contemplates), private security, communication, news coverage, disaster response, and monitoring of power plants and other types of infrastructure, as well as aerial photography.

There are a few other key distinctions the FAA must grapple with. The easiest UAS to regulate will be those flying within the line-of-sight of the operator on the ground, as most model aircraft do. Next are those flying beyond line-of-sight but still controlled in real time by a human. After that, the FAA will have to figure out what to do about fully autonomous UAS that are programmed to fly a specific route on their own, with the capability to identify and avoid problems.

Flying-Cam’s aircraft are line-of-sight UAS that fly limited distances over the perimeter of a movie set or shooting locale. Amazon’s would have to be more advanced, since it would make no sense to launch an aircraft to deliver a package to a doorstep so close to the launch site. That would raise challenges the FAA hasn’t even begun to grapple with: UAS could crash near schools, malls or other populated areas, collide with other aircraft (including other UAS), run into powerlines or even bump into houses.

There’s also the problem of “link loss,” which occurs when an interference disrupts the flow of data needed for a UAS to fly properly, essentially leaving the aircraft uncontrolled. When that happens, some UAS continue on the last heading they were directed to take, while others spin in circles or return to their starting point — usually without any eyes or ears allowing them to detect obstacles on their own. In August 2010, a U.S. Navy drone lost contact with its controllers while flying over southern Maryland, and nearly penetrated restricted airspace near the U.S. Capitol before the link was reestablished and the plane turned around.

Gazarian and many other businesspeople have met with the FAA and pressed their case for the limited use of commercial UAS. So far, nothing. “We can’t even handle the simpler cases,” says a frustrated FAA official. “This is taking ridiculously long. We’re hurting a lot of industries.” Bezos may think he can make the federal bureaucracy move faster, just as he has revolutionized package delivery at Amazon. If he pulls that off, he may edge James Bond aside in the pantheon of heroes.

Rick Newman’s latest book is Rebounders: How Winners Pivot From Setback To Success. Email him at Newmanomics@yahoo.com. Follow him on Twitter: @rickjnewman.