Alexandra Iacovetti

Major: BBA MIS
Graduation: May 2017

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FOX SCHOOL OF BUSINESS
LEGAL STUDIES DEPARTMENT
LEGAL ENVIRONMENT OF BUSINESS – FALL 2015

 

SECTION 004
Professor Wapner
 
                                                                                               

IN THE MATTER OF:

DRONES & Federal Aviation Administration: Regulation Inhibiting Innovation

 
 
Submitted By: Alexandra Iacovetti
Date:  December 15, 2015

 


 

STATEMENT OF THE ISSUES

 

WHETHER PROPOSED FEDERAL AVIATION ADMINISTRATION RULES FOR COMMERCIAL DRONES INHIBIT INNOVATION FOR U.S. COMPANIES SEEKING TO IMPLEMENT DRONE PACKAGE DELIVERY SERVICES, AND WHETHER THOSE RESTRICTIONS COMPETITIVELY DISADVANTAGE THE UNITED STATES.

 


 

 THESIS STATEMENT

 

Because the commercial drone flight rules drafted by the Federal Aviation Administration stipulate all drones must operate within a human’s line-of-sight, American companies—like Amazon—interested in using drones for package home-delivery services cannot implement their plans; therefore, by restricting the distance a drone can fly from an operator, the FAA is simultaneously inhibiting U.S. business innovation in the global marketplace and competitively disadvantaging the United States.

 


 

RESEARCH MEMORANDUM

 

Section I – Background

Amazon, one of the world’s most innovative technology companies, is one of a handful of Fortune 500 companies that wants to launch a drone-operated package delivery service. The company’s new Prime Air service would utilize drones that deliver purchases within 30 minutes or less. These unmanned aerial systems (UASes) “can carry about five pounds,” Amazon founder and CEO Jeff Bezos said. “[That] figure covers around 85 percent of Amazon’s products” (Chappell).

Amazon’s regulatory difficulties involving its Prime Air service is the main focus of this memorandum. Out of the other companies—Google, Walmart, and (surprisingly) Domino’s—developing UAS product delivery services, Amazon has most outspokenly criticized the Federal Aviation Association’s restrictions against commercial drone innovation, such as with the company’s Prime Air service.

 

Section II – Complaint

In February 2015, the Federal Aviation Administration released a draft of restrictions against commercial drones, with a stipulation that would require all UASes to fly in the line-of-sight of their operators or of a “visual observer” who “must remain close enough … to be capable of seeing the aircraft with vision unaided by any device other than corrective lenses” (“Overview of Small UAS Notice of Proposed Rulemaking”). Shortly after the FAA’s proposed regulations were published, Amazon’s Vice President of Global Public Policy Paul Misener released a frustrated statement: “The FAA’s proposed rules … wouldn’t allow Prime Air to operate in the United States” (Bishop). Requiring commercial drone operators to maintain line-of-sight with their UASes would cause a logistical nightmare. For instance, if an operator controlled a drone remotely from an Amazon facility, but then had to deliver a package to a home 15 miles away, the operator could only legally fulfill that order using a drone if another Amazon associate followed the UAS directly to the package’s destination. It would have been more cost effective and more efficient if the package had been delivered via ground shipping. In the same statement, Misener also complained that it could take up to two years for the FAA to adopt formal UAS rules (Bishop). The following March, Sen. Cory Booker (D-New Jersey) testified in front of the FAA, sympathetic of Misener’s concerns. “When it comes to government moving at the speed of innovation,” Booker said, “we are slowing this country, while innovation is going on at an extraordinary pace overseas. We are being left behind.”

 

Section III – History of Legislation

Considering talks about drone regulations began in February, 2011 with the FAA Modernization and Reform Act of 2012 (FMRA), it is easy to understand Misener and Booker’s frustration over slow legislative proceedings. The FMRA tasked the Secretary of Transportation and the FAA Administrator to “develop a plan to accelerate safely the integration … of civil unmanned aircraft systems (UASes, or drones) into the national airspace system” (Mica). Though the legislation specifies the Secretary must define and implement UAS operational and certification requirements for public operators (non-military and non-commercial) by December 31, 2015, it does not state when the FAA needs to implement rules for commercial UASes. Sen. Cory Booker (D-New Jersey), who testified in front of the FAA in March, 2015, and Sen. Jon Hoeven (R-North Dakota), introduced the Commercial UAS Modernization Act (CUMA) in May, 2015 to address the commercial drone regulatory issues the FMRA did not address. Though, like the FAA’s original draft, the CUMA requires commercial drones to remain within the line-of-sight of their operators. However, under Booker and Hoeven’s proposal, a deputy administrator would have the authority to exempt certain commercial drones so they could operate outside of line-of-sight range (Soper). Such an exemption would benefit Amazon tremendously. Overall, the CUMA attempts to connect the FAA with interested commercial drone parties, such as businesses and researchers. The proposal states that the primary avenue of cooperation would be through “a joint aircraft system research and development data collection and analysis program at the William J. Hughes Technical Center” (Booker, Hoeven). Unfortunately, new developments have not yet emerged from Booker and Hoeven’s bill. It offers a perfect outline for the successful integration of innovative commercial drone technologies into the global marketplace, and it enforces the United States’ status as a significant technological contributor to the world. To, as Booker said, keep American companies and the United States from “being left behind,” it is necessary that the CUMA is passed.

 


B I B L I O G R A P H Y

 

Primary Sources:

Legislative Provision:

Rep. Booker, Cory, and Rep. Jon Hoeven. “Commercial UAS Modernization Act.” GovTrack.us. United States Congress, 13 May 2015. Web. 15 Dec. 2015. <https://www.govtrack.us/congress/bills/114/s1314/text>.

Rep. Mica, John. L. “H.R.658 – 112th Congress (2011-2012): FAA Modernization and Reform Act of 2012.” United States Congress, 11 Feb. 2011. Web. 15 Dec. 2015. <https://www.congress.gov/bill/112th-congress/house-bill/658>.

“Overview of Small UAS Notice of Proposed Rulemaking.” Federal Aviation Administration, 13 Feb. 2015. Web. 15 Dec. 2015. <http://www.faa.gov/regulations_policies/rulemaking/media/021515_sUAS_Summary.pdf>.

 

Secondary Sources:

Bishop, Todd. “Amazon’s Aerial Delivery Ambitions Dealt a Blow by FAA’s Newly Proposed Rules for Commercial Drones – GeekWire.” GeekWire. 15 Feb. 2015. Web. 15 Dec. 2015. <http://www.geekwire.com/2015/amazons-aerial-delivery-ambitions-dealt-blow-faas-newly-proposed-rules-commercial-drones/>.

Chappell, Bill. “Delivery By Drone? Amazon Says A New Era Looms.” NPR. NPR, 2 Dec. 2013. Web. 15 Dec. 2015.

Soper, Taylor. “Senators Propose Temporary Commercial Drone Rules That May Enable Amazon’s ‘Prime Air’ Plans – GeekWire.” GeekWire. 12 May 2015. Web. 15 Dec. 2015. <http://www.geekwire.com/2015/senators-propose-temporary-commercial-drone-rules-that-may-enable-amazons-prime-air-plans/>.


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