In June, the Federal Aviation Administration (FAA) announced that it expects to finalize its small unmanned aircraft systems (UAS) rule, as required under the FAA Modernization and Reform Act of 2012 (FMRA), by June 2016. Until then, the primary means of authorization is under FMRA’s Section 333, which permits the FAA to authorize certain UAS flights. Section 333 exemptions have been issued over the last year for applications in various industries, including photography and film, agriculture, utilities, energy, infrastructure, real estate, and construction. FaegreBD has legal and consulting professionals who have successfully petitioned the FAA for a Section 333 exemption and are monitoring policy and regulatory developments related to commercial use of drones.

At the end of last month, the FAA granted its 1,000th exemption. An analysis of the exemptions, as reflected in the chart below, shows that nearly half are for applications involving photography, including videography and film production. The next most frequent industries cited in approved exemption petitions are real estate and utilities/energy/infrastructure, which made up roughly one-third and one-quarter, respectively, of granted exemptions. Rounding out the top five are agriculture and construction, both appearing in around one-fifth of approved exemption petitions.

*Some data in this analysis is derived from a study by the Center for the Study of the Drone at Bard College (http://dronecenter.bard.edu/)

Note: This analysis reflects the 1,000 exemptions issued between 7/23/14 and 7/31/15. The total number of exemptions by industry exceeds the total number of granted exemptions, because some companies are counted under multiple industries.

Further, a review of the exemptions through a geographic lens reveals that almost one-third were granted to applicants in three states — California, Florida and Texas — as reflected in the chart below. Additionally, roughly one-third of the exemptions went to companies in Southern states, while another approximate one-third were secured by companies in Western states. Companies in Midwestern and Northeastern states each claimed nearly one-fifth of the exemptions.

Federal Policy and Regulatory Outlook for Commercial Use of UAS

Currently, there is significant regulatory and policy activity in Washington related to UAS, including the following:

• Congress is currently working on legislation to reauthorize FAA programs, which are set to expire on September 30, 2015. As part of the reauthorization, which is not expected to be completed until the beginning of next year at the earliest, Congress is expected to provide additional guidance to the FAA regarding its integration of civil UAS into the National Airspace System. Congress mandated, as part of the last reauthorization in 2012, that the FAA achieve that integration by September 30, 2015. The FAA has indicated it will not meet that deadline.
• The FAA is working to finalize the small UAS rule by June 2016. They expect to submit the draft final rule to the Office of Management and Budget by the end of this year for review. 
• The Department of Commerce, through the National Telecommunications and Information Administration (NTIA), has initiated a multi-stakeholder engagement process to develop privacy, accountability and transparency best practices for commercial and private UAS use. The first of four meetings was held in Washington, D.C. on August 3, 2015. Additional meetings will be on September 24, October 21 and November 20.

If you would like more information regarding the above analysis or the federal policy and regulatory outlook for commercial use of UAS, please contact Rob Ehrich at +1 202 312 7457 or [email protected].

If your business is considering (or has already begun) using a UAS for any commercial purpose, a Section 333 exemption will be required in order to lawfully operate, at least until the FAA finalizes its small UAS rules. Currently, and despite the abbreviated review process implemented by the FAA to improve review times, exemption application responses are being given approximately 12 weeks after an application's submission. If you would like additional information on the application process and/or assistance an application, please contact Pat Thornberry at +1 317 569 4625 or [email protected]