“Clipped Wings: How Excessive Red Tape Holds Back the Drone Industry”
By Adam Thierer, Michael Kotrous, and Connor Haaland, courtesy of the Mercatus Center
Throughout much of human history, technological innovation has raised living standards and saved lives. But when regulators prioritize red tape over experimentation, these opportunities can quickly be lost. Unmanned aircraft systems (UASs), or drones, illustrate the costs of regulatory delay, with US regulators limiting their life-enriching potential.
Drones already make a big difference throughout the world. For example, Rwanda uses drones to deliver lifesaving blood to rural areas around the country, and Mongolia uses them to prevent wildlife poaching. Since 2017, Switzerland has experimented with allowing hospitals in its cities to deliver medical samples by drone. Meanwhile, search and rescue squads in a variety of countries now routinely use drones to find missing persons.
In the United States, however, the use of drones remains hamstrung by a regulatory process that prioritizes red tape over “permissionless innovation,” or the general freedom for organizations, entrepreneurs, and individuals to experiment with new technologies. Currently, the Federal Aviation Administration (FAA) bans particular drone uses until they are proven safe for testing. This is why the United States’ first healthcare drone delivery experiments did not begin until March 2019. UPS and drone manufacturer Matternet had to receive a waiver from the FAA before they could begin testing the delivery of healthcare supplies at WakeMed hospital in Raleigh, NC, even though such procedures are already routine in other countries. This overly cautious approach imperils an industry that could save American lives and create American jobs if it were allowed to fully take flight.
Precaution, Regulatory Waivers, and Forgone Benefits
“Opportunity cost” is the term economists use to describe the lost benefits associated with any choice or action. In other words, all actions (especially political and regulatory actions) have consequences that, while sometimes difficult to foresee, are nonetheless real and can have profound and costly ramifications for society. The opportunity cost of regulatory delay for drone innovation is clear: the longer it takes for Americans to get permission to operate drones, the less society can benefit from new developments.
As a result of red tape and delays, some American drone manufacturers and service operators have started focusing their operations outside the United States where they are treated more hospitably by regulators, a phenomenon known as “innovation arbitrage.” Sub-Saharan Africa is home to many of the countries pioneering the development of drone medical deliveries—using American-made drones. Australia is leading the field in using drones as “eyes in the sky” to spot swimmers swept out by the tide. Those drones, designed specifically for emergency maritime operations, can then fly to the endangered swimmer to deploy flotation devices, saving the swimmer without endangering lifeguards who otherwise would have to swim into dangerous waters themselves. With thousands of miles of beaches across the United States, adoption of this proven drone capability could significantly advance public safety.
But America misses out on lifesaving applications of drones because US drone operators must either receive permission to fly from the FAA or risk violating federal law. In order for any company, entity, or person to start drone deliveries or use their lifesaving applications, the FAA has to grant a waiver to one or a few of its many restrictions, including its prohibition on flight at night or flight beyond the operator’s visual line of sight (BVLOS). This greatly limits both commercial and noncommercial drone use, since (aside from taking cool panoramic photos) there are few useful things that drones can do while remaining in the operator’s line of sight. Even lifesaving search and rescue operations, like one just last month that found a boy lost in a Minnesota cornfield at 3:00 a.m. on a frigid night, are probably illegal under current FAA policy. Since 2013, 14 people in the United States have been saved by drone operators who may have bucked the law.
Regulatory restrictions like the ban on BVLOS flights have forced many drone companies to shutter their domestic operations until the FAA relaxes its rules. While the FAA has identified the integration of drones into the American airspace as a priority, its overly cautious approach stymies experimentation with the technology and delays the arrival of the lifesaving applications of drones.
This regulatory approach has significant unseen costs: many lives lost in recent years could potentially have been saved had the FAA’s regulatory regime not been so restrictive, a conclusion echoed in a recent report by the National Academies of Sciences. To its credit, Congress recently directed the agency to adopt a risk-based approach to drone policy that weighs benefits against costs, rather than a safety-first mentality based on curbing even unrealistic worst-case scenarios.
Still, without a dramatic change in the FAA’s regulatory culture, the United States will stay one step behind the rest of the world when it comes to the development and use of drones. And jobs in this burgeoning industry will be shipped overseas to countries that are ahead of the game.
The Proper Role for Industry, the FAA, and Congress
Of course, the FAA has an important role in ensuring that drones don’t put other aircraft in danger and that drone users respect the safety and privacy of the people their drones fly over. So what would a proper regulatory environment for drones look like?
For starters, the FAA should establish a remote identification (RID) system—think license plates for drones. Many believe RID is necessary for the commercial drone industry to take off. For one, the ability to identify drones in the airspace will be critical to creating an air traffic management system. It’s unlikely that drones will be able to safely navigate beyond the operators’ line of sight until an effective air traffic management system is established.
In addition, RID would help authorities enforce drone regulations, in the same way auto licenses aid the police in enforcing the rules of the road. And to get around the problem of unlawful actors avoiding identification by simply failing to register their drones, FAA could establish manufacturing standards so that all drones of a certain weight or size have a globally unique identifier.
To that end, DJI, a Chinese drone manufacturer, has already established an RID standard for its drones, which allows anyone with a smartphone to track any nearby drones. The FAA has urged DJI and other manufacturers to deploy RID technology while the agency drafts its forthcoming remote identification rules. Still, the agency says it may need two more years before RID rules take effect in the United States.
Meanwhile, some drone manufacturers have already embedded other safety features in their devices that should ease the FAA’s concerns. For instance, DJI has created its own “geofencing” technology, which uses geospatial data from PrecisionHawk, a North Carolina company, to restrict its drones from flying near critical infrastructure like airports, nuclear power plants, and prisons. This technology can also take note of temporary flight restrictions issued by the FAA owing to occurrences such as forest fires or major sporting events.
A supplement to geofencing is detect-and-avoid (DAA) technology, a system that utilizes a combination of sensors, algorithms, and artificial intelligence to ensure safe flight paths. Indeed, this has already been successfully tested in the United States by a company called Casia. The FAA ought to work more closely with companies like DJI and Casia to speed up the adoption of drones.
The FAA should focus its regulatory oversight on drone identification and, where possible, avoid establishing technical mandates. For example, the FAA has an appropriate role in classifying American airspace and restricting drone activity accordingly (e.g., drones cannot fly within one mile of an airport), but the agency should leave solving the technical problem of drone traffic management to private industry.
Congress also can help. First, a patchwork of US law and regulations complicates or even prohibits several methods that law enforcement could use to intervene against a threatening drone. Some of these prohibitions prevent law enforcement from taking reckless actions that could pose greater threats to bystanders, such as using a gun to shoot a drone out of the sky, but others restrict using “jamming” technologies, seizing control of a drone by hacking, or intervening in other ways that could prove effective. The FAA Reauthorization Act of 2018 took a step in the right direction by authorizing the Department of Homeland Security to study safe antidrone technologies, but it remains unclear how state and local authorities, who are often in the best position to handle a dangerous or malicious drone, will conduct counterdrone operations under the existing regulatory framework.
In addition, Congress can facilitate the enforcement of drone regulations by defining which airspace is under state control and which is under federal control. Sen. Mike Lee (R-Utah) recently introduced legislation that would give states and localities the right to regulate drones and other activity in airspace up to 200 feet above ground level. By allowing states and cities to define trespassing, invasion of privacy, and other torts as they relate to drones, state and local authorities would be in a better position to effectively enforce rules that aim to prevent harm or damage to private property by aerial activity in low-altitude airspace.
Moving forward, the United States must take a more permissionless approach to drone innovation if it wishes to be on the frontier of drone technology, rather than catching up with what is being done elsewhere. The FAA ought to avoid burdensome regulations, focusing on the broad contours of safety standards rather on than the minutiae that tend to hold back innovators. Congress can delegate some authority of drone management to the states, which would allow policy experimentation and innovation to flourish. It’s time to let this burgeoning industry off its tight regulatory leash, because every day that drone technology is suffocated by overly precautionary mandates is a day in which living standards are hampered and lives are potentially lost.
Adam Thierer is a Senior Research Fellow at the Mercatus Center at George Mason University. He specializes in innovation, entrepreneurialism, Internet, and free-speech issues, with a particular focus on the public policy concerns surrounding emerging technologies. Michael Kotrous is a Program Manager for Innovation and Governance at the Mercatus Center at George Mason University. He manages research projects that focus on regulatory processes, technological innovation, and entrepreneurship, and his writings have appeared in USA Today and U.S. News & World Report. Connor Haaland is a research assistant at the Mercatus Center at George Mason University. He works with the Fourth Branch group on issues related to emerging technology, data privacy, telecommunications, and the intersection of law and technology.