New rules fuel the growth of the commercial drone industry

There are new regulations that will lower the barriers to entry for the commercial operation of drones — and it’s about time. The challenge for the Federal Aviation Administration (FAA) has been to establish a framework of rules to regulate how small unmanned aircraft systems (small UAS, or drones) can be used safely in the U.S. air space without undermining the growth of innovative drone-based technology solutions.

The FAA has finally released its new rules (Operation and Certification of Small Unmanned Aircraft Systems), which will be added as a new section (Part 107) to the Federal Aviation Regulations (FAR) to allow for safe commercial operations of drones. The view from the industry is that the FAA’s final rules will successfully fuel the proliferation of drone technology for non-recreational applications. This brings enormous excitement to those commercial markets that may be disrupted because of the benefits of drone operations.

New drone technology and steadily decreasing price points have precipitated the explosive growth of drones in hobbyist markets. Hobbyists can use small UAS so long as their operations are strictly for hobby or recreational purposes, they stay five miles from an airport, stay lower than 400 feet above ground level and are within the visual line of sight of the operator. (Hobbyists should check the FAA rules themselves here.) As of December 2015, the FAA mandated that all owners of small UAS weighing between 0.55 and 55 pounds must register online.

The explosive growth of recreational drones incited demand from businesses seeking to leverage the benefits of drones in their commercial endeavors. Camera crews (such as the Aerobo team of drone operators shown on a live sports event set below) seek to leverage the view from drone cameras for filming a variety of live broadcasts, movies and TV films.


Realtors seek to use drones to take aerial estate photos for their customers and prospects. Crop management companies want to use them to survey their large fields. Emergency responders want support for their rescue operations. Advances into these commercial uses have been limited by regulations on the use of airspace and privacy concerns.

An interim policy based on approved exemptions

Realizing there would be a delay in establishing a final rule for commercial use of drones, in early 2015 the FAA released an interim policy for commercial UAS operators that was a significant improvement over the previous process that required every commercial UAS operation to be individually evaluated. The interim policy (associated with Section 333 of the FAA Modernization and Reform Act of 2012) permitted businesses to apply for an exemption that allowed them to fly small UAS for specific non-recreational low-risk operations under certain defined parameters without the previous level of government oversight.

The FAA’s final regulations for small UAS commercial drone operations are expected to level the playing field for drone-based businesses and assure solid competition.

By the time the final rule (Part 107) was published, the FAA had granted exemptions to more than 5,000 drone operators to permit commercial UAS flights that were otherwise prohibited. While the interim policy was a significant improvement, several restrictions seriously undermined its utility.

The most significant restriction was the requirement that the drone operator needed to have an FAA-issued pilot’s license (for a manned aircraft). Many businesses stalled as a result, reluctant to engage a licensed pilot in their budget-restricted businesses. It is likely that the pilot requirement was a factor in the blossoming of service organizations such as DataWing (shown in the photo below preparing to conduct an aerial mission to perform air sampling and thermal inspection at a landfill).


Other national drone operator service organizations such as DroneBase and expanded their networks, while Skyward powers its global drone network with software and support for commercial drone operators.

Part 107: The new rule for commercial operation of drones

The FAA’s rules for operation and certification for small UAS (summarized here) will go into effect August 29, 2016, establishing routine civil operations and safety. The view from the industry is that the FAA’s final rules will successfully fuel the growth of drone technology for non-recreational applications. This brings enormous excitement to those commercial markets that may be disrupted because of the benefits of drone operations.

The significant change for businesses is that the new Part 107 rule removes the pilot’s license requirement (a requirement with interim policy exemptions) and replaces it with a certification received by taking an in-person, written, drone-specific aeronautical knowledge test designed to ensure that the drone operator knows how to fly safely. Drone operators must also be vetted by TSA, be at least 16 years old, be able to communicate in English and have no physical or mental conditions that interfere with safe flight practices.

The Part 107 rule also establishes requirements for flying a UAS commercially, including:

  • flying below 400 feet above ground (higher if the drone remains within 400 feet of a structure)
  • flying only during daylight or civil twilight within visual line-of-sight (VLOS)
  • flying less than 100 miles per hour

One of the remaining restrictions is that drone operators can’t fly over anyone that is not directly participating in the operation — which may be problematic for unplanned video news coverage.

Because the FAA does not regulate how UAS gather data on people or property, the new rule does not address privacy issues. Nevertheless, the FAA intends to include privacy education during the UAS registration process. They have strongly encouraged all UAS pilots to check local and state laws before gathering information through remote sensing technology or photography.

Waivers for special applications

In consideration of the fact that small UAS technology is fast changing, with ever-improving performance, innovative technology and new features, a key provision of the Part 107 rule is a waiver mechanism that allows a drone operator to deviate from certain operational restrictions if they set forth sufficient evidence to the FAA that the proposed operation can be performed safely. The waivable portions of Part 107 include:

  • operations from a moving vehicle
  • non-daylight operations
  • beyond visual line-of-sight operation
  • operations over non-participating people
  • operation in certain airspace

The FAA will perform a risk-based evaluation of whether they believe the applicant can maintain an equivalent level of safety.

With the addition of the waivers, there’s a significant amount of flexibility under these rules, which will definitely have a positive impact on the use of drones in growing commercial markets.

Commercial applications

The FAA’s final regulations for small UAS commercial drone operations are expected to level the playing field for drone-based businesses and assure solid competition. The widespread integration of drones over a broad spectrum of commercial uses has already started, as demonstrated by the many businesses that have received exemptions associated with the interim policy.

Manufacturers of drone hardware and software abound as a growing supply chain ecosystem is already catering to early adopters. Many companies now offer vision-system-based aerial business services. Agricultural surveys are seen as one of the most promising commercial applications for drones. For example, the six-pound electric-powered fixed-wing UAS shown below by Unmanned Sensing Systems is part of a turnkey system for crop management companies seeking to perform aerial agricultural inspection, such as crop stress assessment.


Other aerial business service companies perform pipeline and power line surveying for the energy industry, insurance assessment and 3D dimensional imaging for the construction industry.

Reviewing the list of companies with approved exemptions, most of the recipients plan to use drones equipped with cameras and other sensors for a variety of B2B applications, such as in precision agriculture, infrastructure inspection and mapping, film and TV production, news reporting, real estate, insurance and public safety. Drones are expected to revolutionize these industries in part as a result of the unique aerial perspectives they provide. This will let them do more at a lower cost and a lower risk, with increased efficiency, improved safety and shorter response times. Many of the participants are startups, though large industrial corporations and defense suppliers are also investing in drone technology.

One of the best-known commercial applications for drones is package delivery, which has been proposed by several innovators (including Amazon and Google). Amazon has been promoting the use of self-guided drones for systems designed to deliver packages safely within 30 minutes. While the Part 107 rule will permit limited carrier operations involving package delivery, the one major caveat is that the operations would need to comply with the visual line-of-sight restriction, which explicitly are excluded from waivers. It is felt that this policy will significantly limit the growth of the drone services industry. Apparently, the FAA is taking steps to develop standards that would allow for operations beyond the visual line-of-sight, but this has yet to come.