The Drone Industry in 2018: A Forecast for Key Regulatory Developments

The U.S. commercial drone industry has every reason to be optimistic for 2018 – cautiously optimistic, that is – as it remains likely that the year will bring further substantive steps toward developing federal legislation and regulations that can enhance unmanned aircraft system (UAS) operations in the national airspace system (NAS). However, unless specific new legislation and final rules are actually put in place, the industry could still be disappointed.

Though 2017 offered numerous examples in which the value of UAS was clearly evident, such as in natural disaster response, the year failed to produce substantive federal rules or legislative changes to support enhanced drone operations. Essentially, rulemaking for drones stalled in 2017 as the Federal Aviation Administration (FAA) was faced with the reality that remote identification was needed to address risks and security concerns surrounding operations.

This pressure to address security concerns came on the heels of a regulatory freeze and two-for-one regulatory swap under the Trump administration, which was compounded by reports emerging of terrorists using drones in combat zones – creating a perfect storm of concerns that hindered significant regulatory or legislative developments. This year, lawmakers and regulators appear poised to prioritize security and risk concerns over all else as the drone industry awaits regulatory and legislative developments for the integration of commercial drones into the NAS, as well as the broader introduction of advanced automation in the U.S. transportation sector.

Federal rulemaking
For 2018, there are four critical FAA regulatory actions worth watching.

The first is the continued development of the Operations of Small Unmanned Aircraft Over People Notice of Proposed Rulemaking (NPRM). This NPRM would address performance-based standards and means of compliance to allow for expanded drone operations in areas where people are present, generally speaking. This NPRM remains of vital interest to commercial operations in the energy sector or for critical infrastructure inspections, among others.

After its publication was anticipated in December 2016, the flight-over-people rule languished in 2017. The NPRM is now poised to be published in spring 2018; however, industry is cautioned to patiently await the final implementation of this rule, given its lengthy notice and comment period. In turn, it may not be published as a final rule until 2020.

The second regulatory action worth monitoring is the development of the Advanced Notice of Proposed Rulemaking (ANPRM) for the Safe and Secure Operations of Small Unmanned Aircraft Systems, which would seek comments on UAS security-related issues and drone remote identification. This ANPRM would follow the recent release of the Unmanned Aircraft Systems Identification and Tracking Aviation Rulemaking Committee (ARC) report, which includes recommendations on issues related to identifying and tracking drones in flight. The FAA will now evaluate the data and recommendations the ARC presented in order to further the security-related rulemaking.

Two other topics merit attention: The coveted yet still elusive rule allowing drone
operations beyond the visual line of sight (BVLOS) remains underdeveloped, although it could be couched in the long-term FAA priority for the Unmanned Aircraft Systems Expanded Operations rulemaking. To its credit, the FAA has issued waivers for BVLOS operations under Part 107; however, a rule authorizing widespread BVLOS operations remains vital to the commercial industry. Absent a well-formulated approach for remote identification, any formal BVLOS rulemaking is likely to remain in a holding pattern in 2018.

Lastly, the FAA announced the UAS Integration Pilot Program (IPP) in 2017, providing a new opportunity for stakeholders at the state, local and tribal government levels to partner with private-sector entities to further the dialogue on drones. Though it’s still in its infancy, some in the industry believe the IPP may offer insightful means to integrate more permissive rules related to BVLOS operations and flights over people. Look for more discussion on the IPP in 2018.

Proposed and pending legislation
There was no shortage of drone-related legislation in 2017. The proposed legislation was largely bipartisan and covered a host of issues that may – or may not – become law in 2018.

One of the foremost drone-related legislative developments spilling over from 2017 has been the enactment of the National Defense Authorization Act (NDAA). Notably, §1092(d) of the NDAA restores the FAA rules for registration and marking requirements for small UAS that were vacated by the U.S. Court of Appeals for the District of Columbia in Taylor v. Huerta (No. 15-1495; decided on May 19, 2017). This law now affords the FAA the opportunity to rework the provisions related to federal registration for UAS hobbyists – which may feed into larger identification and security discussions.

Here are three noteworthy legislative developments to watch in 2018. These bills were introduced in the first session of the 115th Congress and remain in play in the second session:

Reauthorization of the FAA is required by March 31, 2018. This is a perfect vehicle for new drone legislation. Sen. John Thune, R-S.D., chairman of the Senate Commerce Committee, sponsored the FAA Reauthorization Act of 2017 (S.1405), which reauthorizes the FAA and specified FAA programs through fiscal year 2021. Further to the abovementioned security concerns, Sec. 2163 provides penalties for the unsafe operation of unmanned aircraft in close proximity to airports or those that interfere with an aircraft carrying one or more occupants.

Rep. Bill Shuster, R-Pa., chairman of the House Transportation and Infrastructure Committee, sponsored the 21st Century AIRR Act (H.R.2997). This bill also includes FAA reauthorization, and while recognized for its attempt to transfer operation of air traffic services to a separate, nonprofit corporate entity, the bill directs a study on roles of governments relating to the low-altitude operation of small UAS, as well as a study to be undertaken on financing unmanned aircraft services, both of which must consider recommendations from the Drone Advisory Committee.

Finally, Sen. Mark Warner, D-Va., sponsored a bill that aims to further the development of UAS technology. The Safe DRONE Act of 2017 (S.1410) includes wide-ranging mandates on drone-related matters such as traffic management, training and communications for UAS. Importantly, it also includes provisions on an interagency working group on enhanced safety and security for small UAS with the secretary of defense, the attorney general and the director of the Federal Bureau of Investigation.

Going forward
As the FAA moves to remove impediments to advanced drone operations that allow flights over people and beyond line of sight without a waiver, the agency will need to balance freedom of flight in the NAS with the lingering concerns over security and invasion of privacy. This will all be viewed through the lens of safe operations with an economic assessment on the benefits and risks to government and industry alike.

In some aspects, 2018 may offer glimpses of shared principles and lessons learned between advanced automation in transportation sectors – air, auto and maritime – in support of a broader infrastructure investment plan. In any case, 2018 will likely be another year of opportunity for industry to help shape the regulations, as opposed to industry’s putting newly minted final regulations to use.

Sean T. Pribyl, Esq., is an associate at international law firm Blank Rome LLP. As a member of the firm’s Maritime Emergency Response Team, Pribyl’s focus includes advanced automation in the transportation sector. He can be reached at [email protected].