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Looking Above and Beyond: The Evolving UAS and Drone Regulations

There’s a lot going on in the world of drone or unmanned aerial system (UAS) regulation in the United States. Companies from start-ups to large defense contractors are pursuing commercial opportunities to develop drones and drone technology. At Mintz we are working with companies engaged in UAS manufacturing, aerial survey, and commercial cinematography to help them navigate the complex of regulations.

By law, any aircraft operation in the United States national airspace is subject to regulation by the Federal Aviation Administration (FAA). The FAA has established two regulatory schemes, the application of which depends upon whether a drone operation is commercial (i.e., for financial compensation) or for uncompensated, hobbyist use. Drones used for commercial purposes must either be certificated and registered aircraft or obtain a waiver from these regulations from the FAA and must be flown by a licensed pilot. Small drones used by hobbyists may be flown by unlicensed pilots, but the aircraft still must be registered.

If you own a small, non-commercial drone, it must be registered with the FAA’s UAS registry, as of December 21, 2015. Under the rule, drone operators need to provide their name, home address, and email address. Upon completion of the registration process, the web application generates a Certificate of Aircraft Registration/Proof of Ownership that includes a unique identification number for the owner, which must be marked on the aircraft. Drone operators are subject to civil and criminal penalties if they do not register, including fines up to $250,000 and up to three years in prison. Providing false information on registration records is a serious federal offense. The new registration rule does not apply to super light drones — those weighing less than 0.55 pounds (250 grams) including payloads. Non-commercial drone operators are required to have a copy (paper or electronic) of the FAA registration certificate while operating the unmanned aircraft.

Commercial operators have different requirements. To carry out commercial operations “in low-risk, controlled environments” in the United States, a drone operator must apply to the FAA for a waiver under Section 333 of the FAA Modernization and Reform Act of 2012 (FMRA). Waivers under Section 333 are granted on a case-by-case basis. Obtaining a Section 333 waiver requires the commercial operator to develop a flight operations and maintenance manual for the aircraft and a flight procedures manual for the proposed commercial operations to demonstrate that the operation can by conducted safely in national airspace. Our team has obtained Section 333 waivers for our clients and can help with your application. Commercial operations rules currently require that flights be conducted by a licensed pilot during daylight conditions and that the aircraft be operated within the line of sight of the pilot.

The FAA is expected to issue a new rule regarding commercial drone registration and operations later in 2016.

Certain authorizations for experimental operations are also available. However, although these can allow privately owned drones to perform research and development, crew training, and market surveys, they do not permit carrying anything in exchange for compensation.

We have seen some commercial operators attempting to persuade potential customers that they have all required FAA authorizations when in fact they fail to possess the required authority. Customers in the market for commercial drone operators need to be aware of the requirements imposed upon these operators because while the customer may not be liable to the FAA for an unauthorized operation, the hiring of an operator to conduct an unauthorized operation may void the customer’s liability insurance if the unauthorized operation resulted in damage to a third persons or their property.

There will be a huge opportunity for commercial drone operators in the coming years. There is a lot going on out there in the world of drone regulation, so if you need some guidance, let us know.

 

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Authors

Sahir Surmeli

Member / Co-chair, Energy & Sustainability Practice

Sahir Surmeli is a Mintz business counselor who advises companies, boards, entrepreneurs, investment banks, and venture and private equity investors as they grow. He handles public offerings, 144A and private financings, acquisitions, joint ventures, and strategic partnerships.

Jonathan T. Cain