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Insurance and the rise of the drones

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VALUACION DE DRONES

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  • Insurance and the rise of the drones

  • 1. Introduction 1

    2. Executive summary 1

    3. What exactly is a drone? 2

    4. A brief history of drones 4

    5. Uses for drones 6

    6. The law and regulation of drones 15

    7. Potential legal issues raised by the use of drones 24

    8. Insurance and drones: a myriad of challenges 26

    Table of contents

  • Swiss Re 1

    Introduction and Executive summary

    By Joseph Colby, Gerald Deneen, Carol Kreiling, Anthony Mormino and Nellie Root1

    1. Introduction2

    Unmanned aircraft technologies or so-called drones today come in a variety of sizes and types, from model aircraft for personal use, to large fixed wing aircraft used by the military. The commercialization of drone technology is just getting started and it appears to have enormous future potential. Insurance coverage for drone operation is absolutely essential for that progress to take place. The goal of this white paper is to explore the development and use of drones and identify the attendant legal and practical issues to help insurance companies and their clients in the United States and Canada to accurately assess and underwrite the risks posed by the use of drones.

    2. Executive summaryThe definition of a drone varies by law, regulation and nature of use. The earliest form of drone arrived in Europe in the 1800s, and took the form of balloons used in war to carry bombs to their destinations. Military use has been the primary driver in the development of drones since then. Today, drones are being highly exploited for numerous private and commercial applications. These include use of drones for insurance underwriting and claims, crop management, filmmaking, journalism, disaster management and a large number of other applications. Both the United States and Canada have federal rules regulating the use of drones, with the ultimate goal of normalizing the use of drones in their respective national airspace. Both countries laws distinguish recreational use of model aircraft from commercial use of drones, with model aircraft being largely unregulated. Persons seeking to use a drone commercially must obtain permission from Transport Canada or the US Federal Aviation Administration (the FAA).

    While drone use in Canada has been largely uncontroversial, much attention has been focused on how the FAA regulates drones in the United States. In recent years, the FAA has been active in enforcing its drone regulations, primarily seeking to stop commercial use of drones by operators who havent received its permission. There has been some doubt, however, as to the breadth of the FAAs authority to regulate drones. In an effort to bring some clarity to the regulatory situation, the US Congress passed the FAA Modernization Act of 2012, eliminating the FAAs ability to regulate model aircraft that meet certain criteria, and mandating that the FAA promulgate regulations for the commercial use of drones by the end of September 2015. In the meantime, the FAA has issued guidance confirming its view that it does in fact have the power to regulate model aircraft that dont meet the criteria set forth in the 2012 Act. Rather than clarify the regulatory situation, however, it appears the FAAs recent pronouncements have muddied the waters. As a result, wider commercial use of drones will likely be slow until the FAA finally issues its regulations in 2015.

    1 The authors would like to thank Shawn Rafferty, an aviation and equipment finance lawyer at Troutman Sanders LLP, for his thorough review, comments and suggestions which contributed to improving the quality of this publication. Shawn is based in Atlanta, Georgia. Shawn has over 20 years experience representing aviation clients, including with respect to insurance issues and unique aviation products. Shawns contributions to this publication are subject to the disclaimer set forth in Footnote 2.

    2 Disclaimer: The information contained herein is for informational purposes only, and is not legal advice or a substitute for legal counsel. Swiss Re takes no position on whether there is coverage for the subject matter of this paper under any insurance policy wordings. The information and opinions contained in this paper are provided at the date of the paper and are subject to change without notice. Although the information used to draft this paper was taken from reliable sources, Swiss Re does not accept any responsibility for the accuracy or comprehensiveness of the details given. All liability for the accuracy and completeness thereof or for any damage or loss resulting from the use of the information contained in this paper is expressly disclaimed and excluded. Under no circumstances shall Swiss Re or its Group companies be liable for any financial or consequential loss relating to this paper. 2014 Swiss Re. All rights reserved.

  • 2 Swiss Re

    What exactly is a drone?

    Both recreational and commercial operators face a number of potential legal issues when they fly their drones. Invasion of privacy is probably the biggest concern, followed by physical damage and bodily injury in case of, for example, a drone crash. There are also concerns about drones creating liability arising from trespass, nuisance and potential abuse by law enforcement. In the US, commercial operators face the prospect of a monetary fine by the FAA if they dont have an FAA-issued Certificate of Authority. This type of fine is unlikely to be covered by any type of insurance policy. To date, the FAA has issued very few Certificates of Authority relative to the number of drones purchased.

    These potential legal issues, combined with the uncertain regulatory atmosphere in the US, make insurance underwriting for drone liability a challenging endeavor. A wide range of insurance coverage types may unintentionally be triggered depending on how an operator uses its drone. This includes drone coverage by property insurance, commercial general liability insurance, business owners insurance, farm owners insurance and homeowners insurance among others. Underwriting consideration must also be given to potential aviation liability, workers compensation, directors and officers liability and the feasibility of writing stand-alone drone liability insurance policies. Similarly, insurance agents must be careful when indicating to a policyholder that it has coverage for drone operation. The agent must engage in proper due diligence to ensure coverage in fact exists, and confirm that there are no exclusions that could inadvertently defeat coverage. A mistake could expose the insurance agents own errors and omissions policy.

    Underwriting drones is a very new undertaking for insurance companies. Asking the right questions, gathering key information and looking closely at the use of this new technology will be critical to properly assessing and underwriting the risk. In the near future, as regulation of drone use becomes clearer and insurers become more comfortable with this unfamiliar territory, its expected that the capacity to underwrite drone liability will increase.

    3. What exactly is a drone?There are a variety of definitions of the term drone including those found in laws and regulations, commercial use and recreational use. Sometimes different definitions reflect how a drone is used or intended to be used.

    3.1. Definition The International Civil Aviation Organization (ICAO) has set a new definition referring to drones as RPAS, which will soon become the recommended term internationally as ICAO moves toward developing standards for its members:3

    RPAS (Remote Piloted Aircraft Systems) The ICAOs definition intends to highlight the fact that unmanned flight systems involved arent fully automatic but always have a pilot in command responsible for the flight. RPAS describes a remotely piloted aircraft, its associated remote pilot station(s), the required command and control links and any other components as specified in the design.4

    UAVs (Unmanned Air Vehicle) UAV is a power driven aircraft, other than a model aircraft, that is designed to fly without a human operator on board.5

    UAS (Unmanned Air Systems) A UAS is an unmanned aircraft (UA) and all of the associated support equipment, control station, data links, telemetry, communications and navigation equipment, etc., necessary to operate the unmanned aircraft.6

    3 https://www.priv.gc.ca/information/research-recherche/2013/drones_201303_e.asp.4 Ibid. 5 Ibid. 6 Ibid.

  • Swiss Re 3

    What exactly is a drone?

    Model Aircraft is an aircraft, the total weight of which doesnt exceed a certain weight 35 kilos (77.2 pounds) in Canada and 25 kilos (55 pounds) in the United States thats mechanically driven or launched into flight for recreational (not commercial) purposes and thats not designed to carry persons or other living creatures.7 Under both US and Canadian law, model aircraft are generally unregulated, and for purposes of this paper, wouldnt be considered drones.

    While there are some slight differences in their definitions, the terms UAV, UAS and RPAS can essentially be used interchangeably to refer to unmanned aircraft and the systems that connect them to their pilots on the ground. Model aircraft on the other hand, are distinctly different from UAVs in the fact that theyre used for purely recreational purposes, and thus generally arent covered by the same regulatory framework as UAVs.

    3.2. Drone typesThe following categories provide a helpful description of some of the different forms that a drone can take:

    Large fixed-wing aircraft: Examples of a drone in present use: the Predator, the Global Hawk or the T-Hawk.

    The Predator was the first-ever weaponized UAV, and has been used to gather intelligence and carry out targeted strikes in overseas operations. It can fly up to 25,000 feet for up to 40 hours. More recently, the Predator has been adapted for surveillance missions on the US borders, including the US-Canada border. 8

    The Global Hawk is used primarily for surveillance and isnt armed. Its capable of staying aloft for up to 35 hours, transmitting video to ground stations during its flight. Its also used by NASA as a Hurricane Hunter. The T-Hawk has the capacity to hover and stare, inspect from close range and pursue a target. These types of large fixed-wing drones are the most similar to manned aircraft. Their size and range of flight enables these UAVs to be configured with a range of different payloads capable of persistent and highly sophisticated surveillance.9

    Small fixed-wing aircraft: Aircraft such as the Boeing ScanEagle can stay aloft for more than 24 hours and can fly at 19,500 feet. These types of aircraft are becoming more popular domestically for use by local law enforcement.10

    Micro-UAVs: Sometimes referred to as Backpack craft or mini helicopters, theyre cheap and portable, designed to be carried and operated by a single person. While their price range makes them within reach for hobbyists, theyre also often popular for law enforcement operations. Some examples are the $300 Parrot AR or the DraganFlyer X6 used by the Royal Canadian Mounted Police.11

    Biomimetic UAVs: Drones that imitate naturally occurring animals or plants (commonly birds, snakes and insects), such as AeroVironments Nano Hummingbird.12

    Blimps or balloons: Although not commonly thought of as drones, unmanned blimps or balloons can sit up in the sky in one place, observing for long periods of time. These types of UAVs are currently being tested along the US-Mexico border.13

    7 Ibid. 8 Ibid. 9 Ibid.10 Ibid.11 Ibid.12 Ibid.13 Ibid.

  • 4 Swiss Re

    A brief history of drones

    4. A brief history of dronesMost of us know about drones or more accurately, unmanned aircraft following the prevalent use of these vehicles during various military conflicts over the last 10 years. What many might be surprised to learn is that variations on these devices actually date back to the 1800s. 4.1. 1800s: Early UAVs took the form of balloons. One of the first recorded usages of drones was by Austrians on August 22, 1849. They launched some 200 pilotless balloons mounted with bombs against the city of Venice.14 In 1861, Thaddeus Lowe convinced President Lincoln to permit Lowe to use balloons to conduct aerial reconnaissance of enemy military positions and activities to provide Lincolns troops with a state of the art military advantage at the time. Fast forward over 20 years to 1898, during the Spanish-American War, and we find the US military fitting a camera to a kite, producing the first-ever aerial reconnaissance photos.15

    4.2. World War I: World War I saw the development and testing of various radio-controlled unmanned aircraft, but none emerged from the testing phase in time to be used before the war ended. In the 1930s, the British Royal Navy developed a primitive, radio-controlled UAV: the Queen Bee. The Queen Bee could be landed for future reuse and could reach speeds of 100 mph (160 km/h). Instead of being used offensively though, the Queen Bee primarily served as aerial target practice for British pilots.16 4.3. World War II: At the outset of World War II, Adolf Hitler commissioned a flying bomb with a chilling mandate: It would be used against non-military targets. Fieseler Flugzeuhau designed the Fieseler Fi-103, better known as the Vergeltungswaffe (Revenge weapon)-1, or V-1, to launch via a long catapult-like ramp and fly at 470 mph. The V-1 UAV was powered by a thrust pulsejet, which produced a signature buzzing sound. It could carry a 2,000-pound warhead and was pre-programmed to fly 150 miles before it dropped its bomb. First launched against Britain in 1944, V-1s killed more than 900 civilians and injured more than 35,000 in British cities.17 Similarly, the German Army in 1942 produced a remote controlled tank killer called the Goliath Tracked Mine.18 Standing at only 24 inches tall, looking like a tank without a turret and armed with TNT, the Goliath used a remote human operator tethered by a control cable and joy stick (or using radio control) to guide and detonate the gasoline-powered device underneath a full-size enemy tank or other target.19 Though the Goliath saw little use, it did serve as the precursor of the modern radio-controlled robotic vehicles.20

    4.4. Cold War: Flying bombs officially became known as drones during the early years of the Cold War, and were used as aerial targets to train fighter pilots. The word drone was used because it denoted the aircrafts limited abilities, giving it a connotation of being disposable. 21 It was not until the Vietnam War in Southeast Asia that UAV technology had advanced to allow for a new combat role and a redefinition of the unmanned concept. Drones were given combat roles to replace manned reconnaissance flights due to concerns about American pilots being shot down over enemy territory. As a result, US forces were estimated to have flown more than 5,000 surveillance missions using the plane-launched AQM-34 Ryan Firebee drone. 22 The Firebee was controlled by a ground operator using a remote control camera and was able to launch air to ground missiles as well as conventional bombs. The jet-powered drone could fly at subsonic speeds and accommodate numerous modifications and a

    14 Ian G. R. Shaw, (2013), The Rise of the Predator Empire: Tracing the History of U.S. Drones, Understanding Empire.

    15 Ibid.16 How the MQ-9 Reaper Works, Tom Scheve.17 PBS NOVA The Rise of Drones.18 Goliath Tracked Mine: The Beetle That Started the ROV Craze, by Jon Guttman, accessed on September

    25, 2014 at http://www.historynet.com/goliath-tracked-mine-the-beetle-that-started-the-rov-craze.htm.19 Ibid.20 Ibid; see also Remote Controlled Tank, accessed on September 25, 2014 at https://www.youtube.com/

    watch?v=zhK8L0PgPdA. 21 Jeffrey M. Sullivan, Evolution or Revolution? Rise of UAVs, IEEE Technology and Science Magazine 25:3,

    (2006): 43-49.22 Thomas Mahnken, Technology and the War in Vietnam 1963-1975, (Columbia University Press, 2008): 113.

    10 Fresco v. 157 E. 72nd St. Condominium 2003 NY Slip Op 19821 [2 AD3d 326] December 23, 2003 Appellate Division, First Department (http://law.justia.com/cases/new-york/appellate-division-first-department/2003/2003-19821.html).

  • Swiss Re 5

    A brief history of drones

    variety of payloads. In addition to their reconnaissance and bomb damage assessment roles, the Firebee was used to bait and reveal North Vietnamese anti-aircraft installations, and was later used by the CIA to develop electronic countermeasures for such defenses.23

    4.5. 1960s to 1980s: In the 60s and 70s, the United States flew more than 34,000 surveillance flights using the AQM-34 Ryan Firebee, a UAV launched from a host plane and controlled by operators within that plane.24 The US also employed UAVs called Lightning Bugs that were released from airborne C-130s for missions over China and Vietnam.25 Engineers from the manufacturer operated the aircraft with a joystick control.26 4.6. Late 1970s and 1980s: Israel developed the Scout and the Pioneer, which represented a shift toward the lighter, glider-type model of UAV in use today. 27 The Scout was notable for its ability to transmit live video with a 360-degree view of the terrain.28 The small size of these UAVs made them inexpensive to produce and difficult to shoot down.29 4.7. Gulf War: The US acquired Pioneer UAVs from Israel and used them in the Gulf War.30 On at least one occasion, Iraqi soldiers attempted to surrender to one of the UAVs as it flew overhead.31 4.8. 1990s present day: The US Predator drone was developed in the early 1990s through a program called the Advanced Technology Demonstrator Program for reconnaissance and forward observation roles.32 While the pace of development of UAVs had reflected the pace of technology in general, major improvements in computing and electronic controlling systems in the 1980s and 90s made modern-day drones like the Predator possible.33 The invention of Global Positioning System technology, along with advances in micro-computing, ushered in the possibility of greatly advanced and automated unmanned flight.34 Due to these developments, it was in the late 90s that the US Air Force made great strides in the technical aspects of arming unmanned aircraft with guided missiles.35 Though the tactical usefulness of armed drones was still unknown, the emergence of network terrorism and their unconventional tactics soon predicated the need for a platform that could survey and strike select targets.36 The evolution of UAVs has arisen primarily as a result of military conflicts and they have advanced in sophistication following the 9/11 attacks and the subsequent invasions Iraq and Afghanistan. These conflicts drove a substantial uptick in the frequency of use.The US has deployed more than 11,000 military drones, up from fewer than 200 in 2002.37

    23 Ibid.24 How the MQ-9 Reaper Works, Tom Scheve.25 Ibid.26 Ibid.27 Ibid.28 Ibid.29 Ibid.30 PBS NOVA The Rise of Drones.31 Ibid.32 Christopher A. Jones, Unmanned Aerial Vehicles (UAVs): An Assessment of Historical Operations and

    Future Possibilities, Air Command and Staff College, Research Department, (March, 1997), http://www.fas.org/irp/program/collect/docs/97-0230D.pdf: 3-5.

    33 Strategic Significance of Drone Operations for Warfare, Jack Miller, August 19, 2013.34 Ibid.35 Christopher A. Jones, Unmanned Aerial Vehicles (UAVs): An Assessment of Historical Operations and

    Future Possibilities, Air Command and Staff College, Research Department, (March, 1997), http://www.fas.org/irp/program/collect/docs/97-0230D.pdf: 3-5.

    36 Strategic Significance of Drone Operations for Warfare, Jack Miller, August 19, 2013.37 John Horgan (2013) The Drones Come Home (National Geographic Magazine).

  • 6 Swiss Re

    Uses of drones

    At least 50 other countries have drones, and some, notably China, Israel and Iran, have their own manufacturers.38 Theres also evidence that some terrorist organizations may also operate drones.39 Aviation firms as well as university and government researchers are designing a flock of next-generation aircraft, ranging in size from robotic moths and hummingbirds to Boeings Phantom Eye, a hydrogen-fueled behemoth with a 150-foot wingspan that can cruise at 65,000 feet for up to four days.40

    5. Uses for dronesThe aerial drone market will be dominated by military applications for the foreseeable future. But commercial uses will begin to take off around 2020.41 The Teal Group has forecast that annual spending on aerial drones, including civilian and military applications, will reach $11.6 billion in 2023. Thats up from about $5 billion in annual spending now (with barely any significant spending on commercial UAVs.). In all, Teal believes there will be about $89 billion in cumulative spending on UAVs globally over the next 10 years. Some $8.2 billion of that amount will be spent on commercial and civilian drone uses.42

    As discussed in detail below, the US Congress has asked the Federal Aviation Administration to draft rules to safely integrate drones into US airspace by September 2015.43 But according to a recent report issued by the Office of Inspector General, the FAA may not meet this deadline.44 While making some progress, significant technological, regulatory and management barriers exist to safely integrate UAS into the national airspace (NAS). 45 Safety risks will persist until the FAA can establish rules regarding drones. According to the Washington Post, the FAA may relax restrictions in the coming months for a few industries, like filmmakers, oil-and-gas producers and large-scale farms.46

    Meanwhile, Canada has quietly allowed use of commercial drones since 2007.47 Transport Canada oversees the operation of drones for commercial purposes.48 As discussed more fully below, according to the Canadian Aviation Regulations, no one may operate a drone without first obtaining a Special Flight Operation Certificate.49

    38 Ibid.39 CNN, Now ISIS as drones?, August 25, 2014, accessed on September 16, 2014 at http://www.cnn.

    com/2014/08/24/opinion/bergen-schneider-drones-isis/, (The terrorist group ISIS uploaded a 14-minute video to YouTube that shows aerial views of Syrian Army Military Base 93 near Raqqa province in northern Syria... [and likewise], [a]ccording to Hamas, its military wing, the al-Qassam Brigades, has engineered three different types of drones: ones for surveillance purposes; ones that can be armed; and ones that can operate as self-guided missiles a sort of suicide drone).

    40 Ibid.41 Business Intelligence, Drones: Quickly navigating toward commercial application, starting with e-commerce

    and retail, Ross Rubin, January 23, 2014.42 Ibid at 4.43 The FAA Modernization and Reform Act of 2012 specifies the following UAS target dates for safe UAS

    integration into the NAS: August 14, 2014 publish a final rule on small UAS, as required by Section 332(b)(1) and by September 30, 2015 no later than date for safe integration of civil UAS into the NAS, as required by Section 332(a)(3).

    44 On June 26, 2014, Matthew E. Hampton, Assistant Inspector General for Aviation Audits, shared the results of the audit in a Memorandum.

    45 Governments currently use drones extensively in military, law enforcement, search and rescue as well as many other uses. We are focusing on commercial use of drones in this white paper.

    46 Craig Whitelock, The Washington Post, June 30, 2014. FAA will miss deadline to integrate drones in U.S. skies, report says.

    47 Transport Canada is responsible for the conduct of civil UAVs. UAVs operating in Canada must meet equivalent levels of safety as manned aircraft. Requirements for operation of UAVs fall under the Canadian Aviation Regulations (CARs). http://www.tc.gc.ca/eng/civilaviation/standards/general-recavi-uav-2265.htm.

    48 http://www.tc.gc.ca/eng/civilaviation/standards/general-recavi-uav-2265.htm.49 Section 602.41, Canadian Aviation Regulations. http://www.tc.gc.ca/eng/civilaviation/regserv/cars/part6-

    standards-623d2-2450.htm.

    12 See Brooks v. Judlau Contr., Inc. 2008 NY Slip Op 07947 [11 NY3d 204] http://www.courts.state.ny.us/reporter/3dseries/2008/2008_07947.htm for a discussion on how a New York court interpreted the term fullest extent permitted by law.

    13 See Brooks case mentioned in above footnote. The words To the fullest extent permitted by law may make the phrase except to the extent of any fault attributed to the property owner and property manager unnecessary.

  • Swiss Re 7

    Uses of drones

    The Royal Canadian Mounted Police have blanket permission to use drones not unlike government entities in the US. Although Transport Canada issues permits to commercial drone users, groups in Canada are advocating for more regulations and standards.50

    Once the regulatory and privacy barriers are resolved, the future capabilities of drones are limited only by our imagination.

    5.1. A multitude of usesThe existence of regulations hasnt dampened the appetite of some users and prospective UAV owners. Theres a ground swell of commercial users looking to get the regulations softened to permit more daily use. The FAA approval is seen as a first step in unleashing a potentially multibillion dollar industry that so far has been largely limited to military and law enforcement applications. In the meantime, dozens of companies are chomping at the bit for the FAA to certify their own more affordable drones, saying theres no way farmers and many others can invest in the type of UAVs that received certification in the past months for the monitoring of pipelines. The following are a listing of some present day and potential future uses of drones:

    5.1.1. Insurance underwriting and claimsOne of the industries that could benefit from use of drones is the insurance industry. After a natural catastrophe, a drone could reach a remote scene much faster than a claims adjuster. In addition, drones could be deployed to areas unreachable by claims adjusters, for example, in a flood zone. Besides the speed of deploying resources to insureds, the cost savings to insurers could be significant. No longer must underwriters travel in person to inspect the exterior of a building or property. Details of a risk could be validated without incurring travel costs or costs to make in-person inspections. Claims departments could also save costs using drones. After a claim is filed, an adjuster could dispatch a drone to investigate the claim. Instead of climbing a ladder to inspect an icy patch of a damaged roof, a claims adjuster could dispatch a drone to conduct the inspection. Drones could certainly save insurance carriers the costs associated with claims adjusters workers compensation claims. Drones provide underwriters and claims personnel with a safe, cost-effective alternative to physical inspections.51

    5.1.2. SecurityFor example, aerial reconnaissance, aerial policing and crowd monitoring, aerial traffic and security watch, border surveillance.52 Note too that the US Department of Homeland Security (DHS) is at the leading edge of drone deployment in the United States. Since 2005, DHS has been purchasing Predator UAVs to secure the border. These unarmed Predator drones are also steadily creeping into local law enforcement, international drug-interdiction and national security missions including across the border into the heart of Mexico.

    50 According to Charlotte Santry, Block G Privacy and Security Consulting issued a report in November 2013, entitled, Watching Below: Dimensions of Surveillance-by-UAVs in Canada. Charlotte Santry, canadianlawyermag.com, February 3, 2014, Droning on. http://www.canadianlawyermag.com/4989/Droning-on.html.

    51 See, eg, USAA wants to use drone technology to expedite insurance claim processes, by the San Antonio Business Journal, October 2, 2014, accessed on October 7, 2014 at http://www.bizjournals.com/sanantonio/news/2014/10/02/usaa-wants-to-use-drone-technology-to-assess.html (The San Antonio-based insurance giant wants to begin testing small, unmanned aircraft systems that can record data over areas that have been damaged as the result of a natural disaster. A five-pound, slow-speed Precision Hawk aircraft could be used to capture this data at times when physical access to some areas is restricted. USAA wants to use the technology to settle insurance claims quicker.).

    52 http://www.uavs.org/commercial.

  • 8 Swiss Re

    Uses of drones

    5.1.3. Utilities: oil and gas In addition to granting permission to the oil and gas industry for drone use, the FAA also approved a special airworthiness certificate for San Diego Gas and Electric. 53 The permission allows SDG&E to use drones for research, testing and training flights in sparsely populated airspace in Eastern San Diego County. Dave Geier, SDG&Es vice president of electric transmission and system engineering said that this versatile technology would allow us to improve our response to emergency situations such as fires, as well as complete aerial inspections in remote areas that are otherwise difficult to access, and locate the cause of power outages faster. 54 The approved areas are currently uninhabited by either residences or businesses and are inaccessible by road or helicopters. Drones could also be used for population analysis, including assessment of humans and wildlife, as well as exploration, oil production, mineral exploration and geophysical surveys.

    In June 2014, the FAA approved the first large-scale commercial drone operation in the US, along Alaskas northern shore. The drones will collaborate with researchers, capturing data from British Petroleums remote Prudhoe Bay field and Alaskas North Slope one of North Americas largest oil fields. BPs goal is to target maintenance activities on specific roads and infrastructure, which will save time and support safety and operational reliability goals, while helping to protect the sensitive North Slope environment.55 Some of the drones that BP will use can stay aloft for a full 24 hours, while providing real-time data to scientists.56 Venturing where manned aircraft cannot, 57 these drones will also monitor pipelines in harsh weather conditions, producing 3D maps of the fields pipelines, well pads and surrounding roads.58 A year earlier, the FAA issued permits to another oil and gas company flying unmanned aircraft over the Arctic Ocean.59

    Transport Canada has given permission to Cenovus Energy to fly its $30,000 commercial drone regularly in northern Alberta.60 Cenovus Energy, an oil sands producer based in Calgary, plans to expand its fleet and obtain permits to cover its sites in Southern Alberta as well.

    Drones could also be used to map the path of future oil spills. Scientists from the University of Miami, together with a group of researchers,61 used drones off the Florida coast in 2013 to track the exchange of material between the inner shelf and the surf zone. The scientists gathered as much data of wave and current movements as possible, in order to predict ocean currents. Funded in part by BP, this data will help scientists to predict the path of future oil spills, in order to protect beaches and coastal ecosystems.62

    53 Carleton Universitys Mechanical and Aerospace Engineering department has created applications for drone use in pipeline monitoring (as well as in geophysical surveys and wildlife conservation and protection, among others). http://uav.mae.carleton.ca/.

    54 Gregory S. McNeal, forbes.com, July 12, 2014, FAA Approves Limited Use Of Drones For Utility Company.55 FAA Press Release, Surveys Will Check Pipelines, Infrastructure on Alaska North Slope, accessed on

    August 11, 2014, http://www.faa.gov/news/press_releases/news_story.cfm?newsId=16354. 56 Clay Dillow, cnbc.com, February 20, 2014. Drones are invading the Arctic!57 A Minnesota brewery used drones to deliver beer to remote ice fishers in isolated ice shacks on Mille Lacs

    Lake. In January, 2014, the FAA issued a cease and desist order against the brewery. Heather Kelly, cnn.com, February 3, 2014. Beer-delivery drone grounded by FAA.

    58 Tim Maverick, wallstreetdaily.com, June 21, 2014, Drone Technology Takes Off in Alaskan Oil Fields.59 Ibid.60 Armina Ligaya, business.financialpost.com, June 14, 2014, From toy shelves to the oil sands, drones are

    taking off in Canada.61 Researchers were part of CARTHE, the Consortium for Advanced Research on the Transport of Hydrocarbon

    in the Environment, funded by the Gulf of Mexico Research Initiative. www.carthe.org62 Todd Woody, theatlantic.com, December 2, 2013, How Scientists are Using Drones to Fight the Next Big Oil

    Spill.

  • Swiss Re 9

    Uses of drones

    5.1.4. Crop management and agricultureDrones are being used widely for agriculture in various countries including Japan and Australia. Its reported that Japan has up to 10,000 UAVs in use for agriculture.63 For example, drones can be used for studying crop yields, surveying property, tailoring the use of herbicides, pesticides and fertilizers and other agricultural activities. Drones are quickly moving from the battlefield to the farmers field on the verge of helping growers oversee millions of acres throughout rural America and saving them big money in the process. Brent Johnson, a corn and soybean farmer in Calhoun County in central Iowa, purchased a drone in 2013 for $30,000 thats already paying dividends on his 900-acre farm.64 Hes used the aircraft, which covers about 80 acres an hour, to study how yields on his property are affected by changes in topography. Last growing season he identified some areas where his corn stands werent strong enough, information hes going to consider in future plantings when he decides whether to replant or avoid the acreage all together. This year hes going to scout early for any problems and use the data he collects to help determine when to sell his crops.65

    Similarly, McCain Foods and Resson Aerospace of Fredericton, New Brunswick, Canada are using drone technology for what they hope will be the biggest innovation in farming in decades. The drones are being flown over potato fields to collect information that can help farmers reduce spraying and increase yields. A software package was developed to make the determination of the chemicals required for each particular crop yield.

    Drones are already helping Canadian farmers monitor crops. Agriculture and Agri-Food Canada has been experimenting in Quebec with a drone that monitors crops by taking high-resolution images to assess plant health.66 In addition, drones can help farmers determine the size of their plants, monitor for weed or insect infestations and inspect for drain issues. A larger drone could water crops or deliver herbicides or pesticides to a field. One company in Ontario, Canada produces a drone that has helped monitor salmon populations.67 In the US, until the FAA offers an agricultural exemption, however, commercial farms may not use drones. As Bill Wiebold, a soybean specialist and drone enthusiast at the University of Missouri Extension, said at a Precision Aerial Ag Show in July 2014, Theres so much promise. But its just potential, now.68 Yamaha Motor has asked the FAA for permission to use its drone for precision crop-spraying.69

    5.1.5. Real estate This includes the real estate industry and commercial photography. Real-estate photographers are using drones to shoot aerial shots of residential properties despite a federal ban on the use of unmanned aircraft.70 Using lightweight radio-controlled helicopters to shoot photos and videos that show homes in context to neighbors, golf courses and other nearby landmarks, the photographers are finding ways to work around federal rules.71

    63 http://www.forbes.com/sites/kashmirhill/2011/12/13/the-future-of-drones-in-america/.64 http://www.iowafarmertoday.com/news/crop/backers-say-drones-will-help-farmers/article_3efe94ca-

    ba96-11e3-978c-0019bb2963f4.html.65 Ibid.66 Margaret Munro, o.canada.com, July 29, 2014, Tiny drones catching up with hummingbirds natures

    hovering marvels, http://o.canada.com/news/tiny-drones-catching-up-with-hummingbirds-natures-hovering-marvels.

    67 The Aeryon Scout four-rotor quadcopter, produced by a Waterloo, Ontario company has long been taking images of forests in British Columbia and assessing train derailments, as well as monitoring salmon populations. Margaret Munro, o.canada.com, July 29, 2014, Tiny drones catching up with hummingbirds natures hovering marvels, http://o.canada.com/news/tiny-drones-catching-up-with-hummingbirds-natures-hovering-marvels.

    68 Tim Barker, St. Louis Post-Dispatch, July 27, 2014, Drones hit roadblock on path to become farming tool.69 According to Yamaha Motor, it is already using drones for agricultural purposes in Japan and Australian.

    Martyn Williams, pcworld.com, July 30, 2014, Like Amazon, other firms want permission to fly drones.70 For example, see below the discussion on the Pirker decision.71 Crains Chicago Business, A new way to photograph homes for sale: via drone, May 26, 2014, accessed on

    August 13, 2014, subscription required to read entire article, http://www.chicagobusiness.com/article/20140524/ISSUE01/305249990#.

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    Realtors in Canada use drones for dramatic marketing efforts. Filming the exterior space of a large property, Vancouver realtors then fly the drone through the homes grand entrance.72 One realtor in southwest Florida is using a drone to shoot high-definition video of homes for sale.73 Drones can capture views from the rooftop to the backyard to the surrounding community. While realtors in the US are anxious to use this technology to market their properties, the National Association of Realtors, recommends abstaining from the use of drones. Until the FAA allows commercial use of drones, or unless the FAA has granted permission on a particular case, the NAR recommends keeping drones grounded.74 Home appraisers could also use drones again, a cost-effective use to inspect a home in lieu of an appraiser physically inspecting the homes exterior.

    5.1.6. SportsCurrently, the National Football League uses cable-suspended cameras to get aerial shots during games. Drones could be used for getting select shots over practice fields or by programs that cannot afford a cable-cam system.75 Ken Norris, UCLAs director of video operations, has operated a drone during the teams football practices, as have high school football teams in Texas. Drones could be used in sports in which a cable-cam system isnt available, for example in polo, golf or at a race track. One company even promotes using a drone to help analyze athletes performance in track and field.76

    Similarly, in addition to providing stunning aerial footage to entertain fans and craft promotional videos, the Phantom drone is used by the UCLA football team to provide analytics such as hand placement, foot placement, spacing, according to football coach Jim Mora. When it hovers above the line of scrimmage, you can get a real clear perspective of spacing between your offensive linemen, or differences in depth of the rush lanes of your defensive linemen.77

    Drones have even come to one of the worlds oldest team sports polo. The sport of kings traces its history to 600 BC, but it wasnt until this year that it finally had the means to measure the accuracy of its officiating.78 US Polo Association umpires are overseen by Charles Muldoon, who said polo is a difficult sport to officiate because it involves eight horses and riders competing over a space of about 10 acres. In polo, horses and players have to line up parallel to the lead player, so its important that umpires position themselves in a way to best read the location of that imaginary line.79

    5.1.7. JournalismDrones have also been hailed as the future of journalism, with industry insiders predicting theyll be in common use in tracking traffic, demonstrations, fires and more. BCE has recently purchased an UAV to assist them in gathering news footage for CTV Calgary, Alberta, Canada.

    72 Vancouver realtors obtain a permit before each drone use. CBC news, Drones getting buzz in Vancouvers real estate market. January 9, 2014, http://bc.ctvnews.ca/drones-getting-buzz-in-vancouver-s-real-estate-market-1.1632914.

    73 Andrea Stetson, news-press.com, July 11, 2014, Drone takes real estate sales to new heights.74 Robert Freedman, realtormag.realtor.org, March 2014, Drones in Real Estate: Not so Fast. In a notice

    interpreting the special rule governing model aircraft, the FAA explicitly states that a Realtor using a drone to photography a property he is trying to sell is not engaged in a hobby or recreation.

    75 Paula Lavigne, espn.go.com, May 29, 2014, Eyes in the sports sky.76 Ibid.77 http://espn.go.com/espn/otl/story/_/id/10974559/drones-use-ucla-mlb-starting-show-more-sports-

    fields-coaches-embrace-technology.78 Ibid.79 Ibid.

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    Recently, the Los Angeles Police Department had an uninvited guest hovering over their back lot. The back lot is visually protected by high fences, and no one is allowed behind those walls. An unmanned drone, however, flew over the fences and gates, filming the police lot. The drone operator then posted the film on his website and on YouTube.80 The LAPD has asked the city attorneys office for advice to legally keep out such drones.

    Instead of using helicopters, journalists could use drones in addition to being less expensive, the drones could fly lower and in smaller areas certainly safer and more helpful when filming a high-speed chase. Drones are becoming an established tool of photographers and television crews in Germany, although users do need a permit and must operate within a regulatory framework set forth by Germanys federal aviation authority.81

    5.1.8. Filmmaking and aerial photographyOn June 2, 2014, the FAA announced that it was considering an exemption for seven aerial photo and video production companies [that] have asked for regulatory exemptions that would allow the film and television industry to use unmanned aircraft systems with FAA approval for the first time.82 The FAA approved the exemptions on September 25, 2014.83 The applicants submitted UAS flight manuals with detailed safety procedures that were a key factor in our approval of their requests, said FAA Administrator Michael Huerta. We are thoroughly satisfied these operations will not pose a hazard to other aircraft or to people and property on the ground.84

    For the past three years, one Canadian film company has used drones to capture sweeping panoramic shots.85 Drawn to the versatility, drones are replacing filming with conventional jib arm cranes or helicopters.86 While bringing breathtaking views to film, drones drastically reduce production costs. In the US, the Motion Picture Association of America has petitioned the FAA to loosen rules on commercial drone use before its 2015 deadline.87 One film shot by a drone has already been awarded an Oscar in the Science and Engineering category.88 Documentary filmmakers could use a drone to film wildlife, without disturbing the environment. A drone could be used in climates unsuitable for humans giving us otherwise unavailable access to the Arctic or the desert. Until the FAA removes its ban, however, production companies face $10,000 fines (per offense) for using a drone in the US.89

    80 Joseph Serna, latimes.com, August 1, 2014, LAPD seeks to limit civilian drone flights over police stations.81 Dronelaw.net, January 18, 2014, Drones in Germany: The Legal Framework. Also see, http://www.wbs-

    law.de/internetrecht/die-rechtlichen-probleme-des-einsatzes-von-zivilen-drohnen-49854.82 FAA Press Release, Seven Companies Petition to Fly Unmanned Aircraft before Rulemaking is Complete,

    accessed on August 11, 2014, http://www.faa.gov/news/press_releases/news_story.cfm?newsId=16294. 83 Press Release - U.S. Transportation Secretary Foxx Announces FAA Exemptions for Commercial UAS

    Movie and TV Production, FAA, accessed on September 25, 2014 at http://www.faa.gov/news/press_releases/news_story.cfm?newsId=17194.

    84 Ibid.85 Kaspi Films has used drone technology to film Toyota car commercials as well as aerial videos for real estate

    companies. May 6, 2014, The Canadian Press, Canadian businesses harness drone technology. http://www.cbc.ca/news/canada/canadian-businesses-harness-drone-technology-1.2631329.

    86 May 6, 2014, The Canadian Press, Canadian businesses harness drone technology. http://www.cbc.ca/news/canada/canadian-businesses-harness-drone-technology-1.2631329.

    87 Paul Guzzo, Tampa Bay Tribune, July 27, 2014. Filmmakers wait for FAA to clear drones for takeoff.88 Emmanuel Previnaire, Jan Sperling, Etienne Brandt and Tony Postiau received an Oscar in February 2014 for

    their development of the Flying-Cam SARAH 3.0 system. http://www.oscars.org/press/pressreleases/2014/20140108.html.

    89 Paul Guzzo, Tampa Bay Tribune, July 27, 2014. Filmmakers wait for FAA to clear drones for takeoff.

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    In addition to legitimate photographers, drones could provide paparazzi with an unrestricted method to take photos of areas currently off-limits. No tall wall will be able to keep a paparazzis drone from photographing the backyards of celebrities. Less regulated in Switzerland, in 2013, paparazzi used drones to film Tina Turners wedding ceremony on Lake Zurich.90 This privacy threat has spurred legislatures around the world to enact privacy laws to address the use of drones.91

    5.1.9. Science and research Drones can be employed for civil engineering sites, mapping, waterways and shipping, forestry (including forest fires), fishery and hunting protection, pollution control and air sampling, litter on beaches and in parks and weather or hurricane hunting.92 Trimble Navigation is a company that applied for an exemption. Perhaps best known for GPS navigation systems, Trimble Navigation seeks permission to fly its drones which take high-quality images used to build contour maps.93

    Meteorologists could use drones to give them detailed information about a storms internal structure. In the fall of 2014, two special NASA drones will survey the Atlantic Ocean for hurricanes.94 The drones special sensing equipment will measure wind, precipitation, temperature, humidity and air pressure inside the storms. Researchers plan to expand the project to monitor storms in the Pacific Ocean as well. Drones could provide vital information enabling forecasters to better predict typhoons.

    One gold prospector from the Yukon Territory uses drones to survey huge stretches of land for mineral deposits.95 Drones leave less of an environmental footprint in the process and are also significantly less expensive than previous methods. The Yukon territorial government is working closely with the prospectors crew. Other mining operations have begun to use these methods as well.96

    Other scientific uses for drones include geography and archaeology. Carleton Universitys Mechanical and Aerospace Engineering department at the forefront of drone study in Canada has created a number of drone applications, including a geophysical survey application.97 The University of Wisconsin at Eau Claire has begun a Geospatial Initiative, creating a geospatial major. GIS, or Geospatial Information Systems is an umbrella term for surveying, data collection and analysis tools.98 An anthropology professor at the University of Arkansas used a drone to reveal a buried prehistoric Puebloan community in New Mexico.99 While archaeologists have used aerial thermal imaging since the 1970s, drones can map areas more quickly. In addition, archaeologists can time the flights more exactly without regard for weather conditions. Archaeologists foresee using drones to conduct research around the world.

    90 Swiss police ordered the photojournalist to land the drone and confiscated his memory card. (Paparazzi flying in a conventional small plane did manage to photograph the private wedding.) Martin U. Muller and Andreas Ulrich, Spiegel.de, August 1, 2013. Snapping Tinas Wedding: Paparazzi Turn to Drones.

    91 Australian lawmakers have recently released a report calling for new laws to protect Australians privacy from malicious drone use. Rob Taylor, online.wsj.com, July 14, 2014, Australian Lawmakers Seek Limits on Domestic Drone Use.

    92 http://www.uavs.org/commercial.93 Martyn Williams, pcworld.com, July 30, 2014, Like Amazon, other firms want permission to fly drones.94 Brooke Jarvis, pbs.org, June 25, 2014, Drones Are Helping Meteorologists Decipher Tropical Cyclones.95 Shawn Ryan is a gold prospector who has used drone technology for years. CBC News, September 4, 2013,

    Drones help Yukon prospectors find new gold deposits. http://www.cbc.ca/news/canada/north/drones-help-yukon-prospectors-find-new-gold-deposits-1.1386299.

    96 Alexcos silver mines in Keno City, Yukon, have used drones as well. CBC News, September 4, 2013, Drones help Yukon prospectors find new gold deposits. http://www.cbc.ca/news/canada/north/drones-help-yukon-prospectors-find-new-gold-deposits-1.1386299.

    97 Carleton UAV Research, Carleton University, http://uav.mae.carleton.ca/, August 9, 2014.98 Rob Hanson, Chippewa.com, July 28, 2014, UW-Eau Claire climbs on to growing field of geospatial

    information systems.99 Roger Sollenberger, 3drobotics.com, April 18, 2014. Drones in Archaeology: UAV Reveals Ancient,

    Invisible History.

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    The Peruvian Ministry of Culture plans to buy more drones for archaeological projects to study pre-Inca ruins around the Andes and Amazon. Drones can create 3D models of archaeological sites and locate ruins not easily seen from the ground.100

    The land surveying industry could use drones to take detailed survey information, creating highly accurate maps and provide valuable data to companies. The survey industry could use drones to create highly accurate, high-definition maps in a fraction of the time once required. Drones could access difficult locations safely and then convey information instantly via a server to its customer.101 Drones could also be used in the construction industry. Currently, the Welsh government is using drones in a Construction & Demolition waste reduction project. Drones are used throughout the project to take aerial photos to identify areas to cut construction waste.102 In Canada, one company uses drones to inspect old bridges.103

    5.1.10. Disaster management and search and rescue Including maritime and mountain search and rescue, life raft deployment, rescue point marking, disaster effects management, supervision of clean up.104 Firefighting is yet another use in which drones can help both from a cost savings as well as a safety perspective.105 In a recent industrial fire, a firefighter sent in his personal drone to see how close the fire was to the chemicals. The drones camera showed the fire was far from dynamite and explosives stored in the facility, so the firefighters were able to enter the building safely and fight the fire.106 Firefighters have already used drones to help with forest fires.107 The California National Guard Predator drone gave the firefighters immediate views of the fire in an effort to help contain it. Drones can be used in search and rescue missions as well as in missions related to communication crew, safety and night ops,108 flying in small spaces where helicopters cannot. In 2013, the Royal Canadian Mounted Police used a drone to locate a man who was injured in a rollover crash the first person whose life was saved by a drone.109

    For humanitarian efforts, Matternet110 is one company which is developing drones to access remote and hazardous areas to deliver medical supplies to parts of the undeveloped world inaccessible by road. According to Matternet, 85% of the roads in sub-Saharan Africa are inaccessible during the wet season.111 Using drones that can transport small items, like medical supplies, could provide life-saving medicine to children in need.

    100 W. Alejandro Sanchez, peruthisweek.com, July 21, 2014, Peru uses drones for archaeological projects.101 July 1, 2014, landpoint.net/blog, How Drones will Revolutionize Land Surveying Services.102 Ben Messenger, waste-management-world.com, June 25, 2014, New project uses drones to cut

    construction waste and increase reuse and recycling in Wales.103 Chris Brown, cbc.ca, May 19, 2014, Drones have regulators, hobbyists on collision course. http://www.

    cbc.ca/news/technology/drones-have-regulators-hobbyists-on-collision-course-1.2644232.104 Ibid.105 In light of the 19 firefighters who were killed in 2013 while fighting a fire in Arizona, drones offer hope to

    fight fires more safely. In Australia, the Melbourne Metropolitan Fire Brigade already uses drones.106 Kelsey D. Atherton, popsci.com, February 4, 2014, Connecticut Fire Department Gets Help From A Drone.107 Brian Skoloff and Tracie Cone, huffingtonpost.com, August 28, 2013, Firefighters Use Drones To Battle

    Yosemite Rim Fire.108 Brian Smith, emergencymgmt.com, July 1, 2014, Are Drones the Future of Firefighting?109 The injured man was disoriented, walking three kilometres from his vehicle before collapsing in a field. John

    Weidlich, CBC News, May 9, 2013, Aerial drone locates Sask. man injured in rollover crash. http://www.cbc.ca/news/canada/saskatchewan/aerial-drone-locates-sask-man-injured-in-rollover-crash-1.1398942.

    110 Founded by Andreas Raptopoulos, Matternet is a start-up network for transporting matter. Shane Hickey, theguardian.com, March 30, 2014, Humanitarian drones to deliver medical supplies to roadless areas.

    111 Shane Hickey, theguardian.com, March 30, 2014, Humanitarian drones to deliver medical supplies to roadless areas.

    Uses of drones

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    5.1.11. Retail Amazon.com Inc. made headlines when it petitioned the FAA to use drones to deliver packages. Over just two months in 2014, over 14 other companies petitioned the FAA to fly drones for commercial purposes.112 Dominos pizza did something similar testing its DomiCopter for home drone delivery of a pizza.113

    Drones can serve as tour guides. Currently, at Massachusetts Institute of Technology, drones help students navigate their way through unfamiliar buildings to their classroom.114 Students download an app on their phone and when they need guidance, they call the robot which tracks their location via GPS. MITs drone has built-in sonars to make sure it doesnt crash into obstacles. And if the student cant keep up, the drone waits for them just like a human tour guide might. MITs researchers hope this drone can be developed into a city guide for tourists, a device to monitor road rage or even a robotic bartender.115

    Big data companies see potential in drones for gathering information from the air. Facebooks Mark Zuckerberg recently acquired Titan Aerospace, a maker of solar-powered drones. These drones can reportedly stay airborne for five years and would act as movable wireless access points.116

    5.1.12. Personal use The FAA requires that model aircraft should be flown below 400 feet above the surface to avoid other aircraft in flight, and it expects that hobbyists will operate these recreational model aircraft within visual line-of-sight. With all of the publicity and discussion in the media about military drones, there has been an heightened interest in drone technology for personal use. Drones may be purchased at very reasonable prices making it very attractive to individual hobbyists and enthusiasts. Small quadcopters, about the size of an adult hand, can be purchased for approximately $30, and have a range of up to 50 feet.117 Camera-equipped quadcopters, approximately 18 inches in diameter, can be purchased for as low as $150 while more sophisticated models can be of larger diameter and cost up to $3,000.118 Depending on the type of model and price, quadcopters can have a range of up to two miles and potentially reach altitudes of several hundred feet. Currently, theres no training or licenses required to operate personal quadcopters. These factors, and the ease of take-offs and landings, which is posed by the conventional model aircraft has seen the quadcopters gaining in popularity in the recreational sector. One of the larger manufacturers of small quadcopters, DJI, is believed to sell approximately 10,000 units weekly.119

    5.1.13. Next stepsWhile entrepreneurs wait for the FAA to announce its regulations regarding integrating commercial drones in US airspace, other countries have already enacted regulations. As discussed, Canada already allows commercial drone use by permit. Germany, Australia and France currently have 100 licensed drone pilots.120 Despite the ban in the US, commercial drone startup companies are springing up in record numbers. San Francisco has small shops that build the drones as well as software firms that create electronic systems for the drones.121 As noted, one commentator reports that the drone

    112 Martyn Williams, pcworld.com, July 30, 2014, Like Amazon, other firms want permission to fly drones.113 CNN Money, Dominos tests drone pizza delivery, June 4, 2013, accessed on August 13, 2014, http://

    money.cnn.com/2013/06/04/technology/innovation/dominos-pizza-drone/. 114 Sheena McKenzie, cnn.com, November 27, 2013, SkyCall: The drone thats your personal tour guide.115 Ibid.116 Joseph Dussault, boston.com, March 14, 2014, 7 commercial uses for drones.117 http://evidentiarymatters.com/?p=227.118 Ibid.119 Ibid.120 Patrick May, mercurynews.com, March 1, 2014, Look up: The commercial drone market is about to take

    off.121 Ibid.

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    The law and regulation of drones

    industry could grow to an $11 billion industry in the next 10 years.122 While some argue drones will kill jobs, the Association for Unmanned Vehicle Systems International maintains commercial drones will create 70,000 new jobs in the US.123

    In order to meet the expected demand for drone operators, several universities have begun to offer undergraduate degrees specific to drones from piloting a drone to becoming an aerial drone photographer or drone systems engineer.124 The Canadian Centre for Unmanned Vehicle Systems is opening its first training center in North America for UAV operators later this year.125 Law firms are launching practice groups specializing in drones.126 Currently, in the US, the majority of these law firms clients are government contractors or public entities, such as police departments and universities. Once commercial drones are allowed, these law firms anticipate their client base will rapidly expand.127 Until then, lawyers specializing in drone technology will defend those fined by the FAA.

    Unparalleled accessibility and vast cost savings those are the common themes for drone advocates across the various disciplines. While the sky could be the limit with respect to commercial drone use, 128 regulators must weigh public safety and privacy concerns against commercial use no matter how convenient or revolutionary.

    6. The law and regulation of dronesIn both Canada and the United States, theres generally a single regulator of national airspace and aircraft that fly within them. In the United States this is the Federal Aviation Administration, and in Canada, Transport Canada. In both countries, theres also airspace used for military purposes. The primary focus here is on the civil and commercial use of drones, as well as the use of drones by government for non-military purposes.

    6.1. The FAA is the primary regulator of US airspaceThe US federal government established its control over US airspace early in the history of flight. It started with the Air Commerce Act of 1926.129 That law ordered the US Secretary of Commerce to foster air commerce; designate and establish airways; establish, operate and maintain aids to air navigation (but not airports); arrange for research and development to improve such aids; license pilots; issue airworthiness certificates for aircraft and major aircraft components; and investigate accidents.130

    Subsequently, Congress enacted the Civil Aeronautics Act of 1938 (CAA), making clear its intention that federal law and the federal government were the primary regulators of US airspace. A number of Supreme Court cases followed that supported that extension of the governments power. For example, the Court ruled in US v. Causby that airspace above land was in the public domain, and flights over private land are not a government

    122 Elizabeth Palermo, livescience.com, July 29, 2014, Drones Could Grow to $11 Billion Industry by 2024.123 Dominic Basulto, washingtonpost.com, May 13, 2014, Graduates with drone skills are going to be in demand

    soon. Heres why.124 Carleton University offers undergraduate and graduate studies in UAV theory and applications. The

    Unmanned Vehicle University in Phoenix, Arizona, Embry-Riddle Aeronautical University, the University of North Dakota and Kansas State University are a few of the academic programs offered to study drones in the US.

    125 May 6, 2014, The Canadian Press, Canadian businesses harness drone technology. http://www.cbc.ca/news/canada/canadian-businesses-harness-drone-technology-1.2631329.

    126 Jared Council, insidebiz.com, June 20, 2014, Law firms launch drone practice groups.127 Ibid.128 Or at least 400 feet of sky could be the limit.129 FAA, Unmanned Aircraft System Regulation Review, DOT/FAA/AR-09/7, September 2009, http://www.

    tc.faa.gov/its/worldpac/techrpt/ar097.pdf. 130 FAA Historical Chronology 1926-1996 by the Federal Aviation Administration, accessed on August 1, 2014,

    https://www.faa.gov/about/media/b-chron.pdf.

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    taking of that land.131 Indeed, based on the original CAA and subsequent similar regulations, the Supreme Court established unassailable precedents which gave Congress exclusive jurisdiction over air flight, and over any incident applicable to air flight. Such all-encompassing precedents seemed to have completely resolved any issues of control over the new technology [of aviation].132

    Congress then created the Federal Aviation Administration (FAA) in 1958 as the federal regulator of air travel and aircraft in the United States.133 The FAA was initially concerned primarily with making and enforcing rules involving traditional fixed wing and helicopter aircraft. The FAA requires that such aircraft be operated without risking the safety of persons and property on land, and that in congested areas that they operate at least 1,000 feet above the highest obstacle and within a radius of 2,000 feet.134 Over other than congested areas, the FAA mandates that aircraft fly at an altitude of 500 feet above the surface, except over open water or sparsely populated areas. In those cases, the aircraft may not be operated closer than 500 feet to any person, vessel, vehicle or structure.135 Regardless, according to the FAA, [t]here are no shades of gray in FAA regulations. Anyone who wants to fly an aircraft manned or unmanned in US airspace needs some level of FAA approval.136

    6.2. Transport Canada is the primary regulator of Canadian airspaceInitially, Transport Canada, and its predecessors, built, maintained and operated most of Canadas airports and airways.137 The Department was established in 1936 as a consolidation of the Department of Railways and Canals, the Department of Marine and the Civil Aviation Branch of the Department of National Defense.138 In 1997, as part of a governmental reorganization, Transport Canada divested its ownership of Canadian airports and air systems. Today its stated mission is promotion of a safe and secure, efficient and environmentally responsible transportation system in Canada.139

    6.3. Regulations relevant to drones In both Canada and the United States, aviation rules generally distinguish between model aircraft and unmanned aircraft or drones. Commonly, the FAA and Transport Canada dont regulate the use of model aircraft but they do regulate the use of drones.

    131 United States v. Causby, 328 U.S. 256 (1946); this ruling and its progeny should foreclose any argument that legally sanctioned flying of government drones over private land is a taking in the Constitutional sense.

    132 Ann Thornton Field and Frances K. Davis, Can the Legal Eagles Use the Ageless Preemption Doctrine to Keep American Aviators Soaring Above the Clouds and into the Twenty-First Century?, 62 J. Air L. & Com. 315, 328 (1996).

    133 Federal Aviation Act of 1958, 49 U.S.C.A. ss 1307-1542 (West 1973).134 14 C.F.R. 91.119.135 Ibid.136 FAA, Busting Myths about the FAA and Unmanned Aircraft, March 7, 2014, accessed on August 13, 2014,

    http://www.faa.gov/news/updates/?newsId=76240. The FAA continued: Private sector (civil) users can obtain an experimental airworthiness certificate to conduct research and development, training and flight demonstrations. Commercial UAS operations are limited and require the operator to have certified aircraft and pilots, as well as operating approval. To date, only two UAS models (the Scan Eagle and Aerovironments Puma) have been certified, and they can only fly in the Arctic. Public entities (federal, state and local governments and public universities) may apply for a Certificate of Waiver or Authorization (COA)...Flying model aircraft solely for hobby or recreational reasons does not require FAA approval.

    137 http://www.thecanadianencyclopedia.ca/en/article/transportation/. 138 http://www.thecanadianencyclopedia.ca/en/article/transport-canada/. 139 http://www.tc.gc.ca/eng/aboutus-department-overview.htm.

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    6.3.1. Model aircraftIn 1981, the FAA issued guidelines for the use of model aircraft. Those guidelines are referred to as FAA Advisory Circular 91-57 (also known as a for aircraft AC 91-57).140 While adherence to the Advisory Circular is expressly voluntary, it provides that model aircraft shouldnt be flown more than 400 feet above the ground, away from air traffic, and within line of sight. AC 91-57 was, however, not the last word that the FAA or Congress would have on the operation of model aircraft, as discussed below.

    In Canada, Section 101.01 of the Canadian Aviation Regulations (CARs) states that an Unmanned Air Vehicle means a power driven aircraft, other than a model aircraft, that is operated without a flight crew member on board.141 The CARs also define a model aircraft as an aircraft, the total weight of which does not exceed 35 kilos (77.2 pounds), that is mechanically driven or launched into flight for recreational purposes and that is not designed to carry persons or other living creatures.142 Although some micro unmanned air vehicles may weigh less than 35 kilos, they are operated by research institutions and other organizations for non-recreational purposes.143 With minor exceptions, the CARs otherwise exclude the regulation of model aircraft from their scope.144

    6.3.2. The FAAs regulations relevant to dronesIn 2005, [i]n response to...growing demand for public use unmanned aircraft operations, the FAA developed guidance in a Memorandum titled Unmanned Aircraft Systems Operations in the US National Airspace SystemInterim Operational Approval Guidance (UAS Policy 0501). 145 The latter guidance set out a process for operators of UAS to apply for and receive permission to operate UAS in the national airspace. The policy provides guidance to FAA personnel when evaluating each application for a Certificate of Waiver or Authorization (COA). 146 Under this policy, the only way the public may operate civil UAS is to obtain a Special Airworthiness Certificate in the experimental category, and such UAS may not be used for compensation or hire.147 According to the FAAs website theres a total of 545 active COAs as of December 4, 2013.148 Public entities including law enforcement that wish to fly UAS must also seek the FAAs permission to do so.149 On March 13, 2008, the FAA issued Interim Operational Approval Guidance 08-01 to replace Policy Memorandum 05-01.150

    140 FAA Advisory Circular 91-57, Model Aircraft Operating Standards, http://www.faa.gov/documentLibrary/media/Advisory_Circular/91-57.pdf.

    141 Canadian Aviation Regulations, SOR/96-433, Section 101.01 (emphasis added).142 Ibid (emphasis added).143 Transport Canada, accessed August 5, 2014 http://tc.gc.ca/eng/civilaviation/standards/general-recavi-

    brochures-uav-2270.htm.144 CARs Section 102.01 provide that These Regulations do not apply in respect of...(c) model aircraft, rockets,

    hovercraft or wing-inground-effect machines, unless otherwise indicated in the Regulations. The only other provision in the CARs on model aircraft is Section 602.45: No person shall fly a model aircraft or a kite or launch a model rocket or a rocket of a type used in a fireworks display into cloud or in a manner that is or is likely to be hazardous to aviation safety.

    145 FAA, Unmanned Aircraft Operations in the National Airspace System, 72 Fed. Reg. 6689 (Feb. 13, 2007), FAA Notice 0701, http://www.faa.gov/uas/.

    146 AFS-400 UAS POLICY 05-01, http://www.eoss.org/faa/AFS_400_UAS_POLICY_05_01.pdf. 147 FAA, Unmanned Aircraft Operations in the National Airspace System, 72 Fed. Reg. 6689 (Feb. 13, 2007),

    FAA Notice 0701, http://www.faa.gov/uas/.148 http://www.faa.gov/regulations_policies/.149 http://www.faa.gov/uas/.150 FAA Interim Operational Approval Guidance 08-01, March 13, 2008 (providing policy guidance when

    evaluating each application for a Certificate of Waiver or Authorization (COA) and special airworthiness certificates (normally issued in an experimental category for UAS), available at http://www.faa.gov/about/office_org/headquarters_offices/ato/service_units/systemops/aaim/organizations/uas/coa/faq/media/uas_guidance08-01.pdf.

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    According to a 2007 clarification of its 2005 policy statement on UAS (FAA Notice No. 0701, 72 FR 6689), the FAA stated that:

    The current FAA policy for UAS operations is that no person may operate a UAS in the National Airspace System without specific authority. For UAS operating as public aircraft the authority is the [Certificate(s) of Waiver or Authorization], for UAS operating as civil aircraft the authority is special airworthiness certificates, and for model aircraft the authority is AC 9157. The FAA recognizes that people and companies other than modelers might be flying UAS with the mistaken understanding that they are legally operating under the authority of AC 9157. AC 9157 only applies to modelers, and thus specifically excludes its use by persons or companies for business purposes.151

    Ostensibly based in part on UAS Policy 0501, its replacement UAS Policy 08-01, and FAA Notice No. 0701, the FAA has issued cease and desist orders152, and in one case, attempted to impose civil penalties on a commercial operator of a model aircraft. In the recently decided case of Huerta v. Pirker, an administrative judge for the National Transportation Safety Board (NTSB) ruled that the FAA has no authority to regulate model aircraft even when used for commercial purposes.153 The ruling had the initial effect of invalidating the FAAs guidance and policies in UAS Policy 0501, its replacement UAS Policy 08-01 and FAA Notice 0701 as to operators of model aircraft.

    In 2011 the University of Virginia paid an advertising firm that hired Raphael Pirker to fly a model airplane equipped with a camera to take video and photos of its campus. The FAA subsequently levied on Mr. Pirker a $10,000 fine in an Order of Assessment for irresponsibly operating what it referred to as an aircraft and referred to as a UAS in particular by flying too close to the ground near people and buildings. The FAA asserted that Mr. Pirker had violated an FAA regulation prohibiting the careless or reckless operation of an aircraft.154 It stated that Mr. Pirker also impermissibly operated the airplane for compensation.155 Mr. Pirker appealed the FAAs Order of Assessment to an administrative judge of the NTSB.

    The FAA essentially contended that the Federal Aviation Regulations (FARs) applicable to traditional manned aircraft applied to all forms of aircraft, including model aircraft, and Mr. Pirker violated those FARs. Mr. Pirker argued that at the time, there existed no enforceable FARs concerning the operation of a model aircraft, whether for commercial purposes or otherwise.

    The administrative law judge hearing the matter agreed with Mr. Pirker. Among other things, the judge held that: 1) the FARs definition of an aircraft didnt include model

    151 Unmanned Aircraft Operations in the National Airspace System FAA, Docket No. FAA200625714; Notice No. 0701, February 13, 2007 (providing that This document clarifies the FAAs current policy concerning operations of unmanned aircraft in the National Airspace System.), accessed on August 1, 2014. http://www.gpo.gov/fdsys/pkg/FR-2007-02-13/pdf/E7-2402.pdf.

    152 See eg, Crains Chicago Business, http://www.chicagobusiness.com/article/20140529/NEWS07/140529748/faa-to-drone-photographer-cease-and-perhaps-desist?r=7222E9632801I2B , Larry Malvin, a North Shore real estate photographer who uses a remoted-controlled model-aircraft drone to photograph houses, on May 27 received an email from a Federal Aviation Administration official that, in essence, told him that what hes doing is prohibited.

    153 Huerta v. Pirker, Decisional Order, National Transportation Safety Board, Docket No. CP-217, March 6, 2014, http://www.ntsb.gov/legal/pirker/Pirker-CP-217.pdf.

    154 Attachment 1, Order of Assessment, Huerta v. Pirker, Decisional Order, National Transportation Safety Board, Docket No. CP-217, March 6, 2014, http://www.ntsb.gov/legal/pirker/Pirker-CP-217.pdf. citing 14 C.F.R. (FAR) 91.13(a) (No person may operate an aircraft in a careless or reckless manner so as to endanger the life or property of another).

    155 Ibid, Attachment 1, Order of Assessment, Huerta v. Pirker.

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    aircraft156; 2) model aircraft are subject only to AC 91-57, an FAA safety guideline that by its terms requires only voluntary compliance; 3) the FAAs UAS Policy Notices 05-01 and its replacement UAS Policy 08-01 were intended for internal FAA guidance only and dont provide a basis for application of FARs to model aircraft; 4) Policy Notice 07-01 likewise didnt provide a basis for application of FARs to model aircraft, and in any event, it was an invalid attempt at rulemaking; and 5) in sum, there was no enforceable FAA rule or FAR regulation applicable to model aircraft or for classifying model aircraft as an UAS.157 Ostensibly, the Pirker decision removed the FAAs authority for the public to use model aircraft for any use, including commercial use.

    The FAA appealed the Pirker decision to the full National Transportation Safety Board (NTSB).158 The administrative law judge ruled that the FARs definition of an aircraft didnt include model aircraft. This was one of the reasons Pirker effectively ruled that the FAA had no authority to regulate the operation of any model aircraft. The NTSB ruled on November 18, 2014, that the regulations that gave FAA authority over aircraft did not expressly exclude model aircraft. Therefore, the FAA can enforce the prohibition on careless and reckless operation of an aircraft as outlined in 14 C.F.R. 91.13(a) to operation of a model aircraft. However, the NTSB did not rule whether the FAA has issued valid regulations as respects commercial use of model aircraft. Whether this means the FAA has no authority to regulate the safe operation of model aircraft used for commercial purposes until the FAAs June 2014 guidance document (see section 6.4.1.) completes the administrative rule-making process remains to be seen. Until a court of law states otherwise, were assuming that the FAA will assert that they have such authority effectively grounding commercial use of model aircraft for the time being.159

    6.3.3. Transport Canadas regulations relevant to dronesTransport Canadas ultimate goal is to normalize UAV operations within civil airspace, [but admits that] the industry technology isnt mature enough, and the regulatory structure isnt in place [in Canada], to support routine operations.160 Nonetheless, the Canadian Aviation Regulations (CARs), Section 602.41, provides that No person shall operate an unmanned air vehicle in flight except in accordance with a special flight operations certificate [(SFOC)] or an air operator certificate. As noted above, the CARs exclude model aircraft (as defined therein) from regulation as an unmanned air vehicle (a UAV). Section 623.65 outlines information that should be submitted when making an application for a SFOC.161 According to Transport Canada, an SFOC applicant must be able to demonstrate the predictability and reliability of the unmanned air vehicle essentially that it has the ability to perform in the desired environment. The requirement for a SFOC is intended to ensure the safety of the public and protection of other users of the airspace during the operation of the unmanned air vehicle.162 According to the Canadian transportation and airspace regulator, applications for special flight operation certificates have tripled since last year.163

    156 The judge stated that the FAAs definition of aircraft in this matter was overly broad, in fact, so broad, that it would absurdly include paper aircraft or a toy balsa wood glider. Huerta v. Pirker, Ibid at 3.

    157 Huerta v. Pirker, Decisional Order, National Transportation Safety Board, Docket No. CP-217, March 6, 2014, http://www.ntsb.gov/legal/pirker/Pirker-CP-217.pdf, at 7-8.

    158 FAA Press Release (March 7, 2014) , available at http://www.faa.gov/news/press_releases/news_story.cfm?newsId=15894&cid=TW209.159 NTSB Order No. EA-5730 found at http://www.ntsb.gov/legal/pirker/5730.pdf.160 http://tc.gc.ca/eng/civilaviation/standards/general-recavi-brochures-uav-2270.htm, date modified,

    May 3, 2010. 161 Ibid.162 Ibid.163 In 2013, 945 Special Flight Operations Certificates for drones were issued. In 2012, 345 were issued, and

    in 2011, only 155 were issued. Armina Ligaya, business.financialpost.com, June 14, 2014, From toy shelves to the oil sands, drones are taking off in Canada. http://business.financialpost.com/2014/06/14/from-toy-shelves-to-the-oil-sands-drones-are-catching-on-in-canada/?__lsa=24b5-92c1.

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    6.4. The FAA Modernization and Reform Act of 2012

    In 2012, Congress provided specific guidance to the FAA as regard the regulation of drones. In the FAA Modernization and Reform Act of 2012 (FMRA), Congress defined a drone as an unmanned aircraft system or UAS, stating that a UAS is an unmanned aircraft and associated elements (including communication links and the components that control the unmanned aircraft) that are required for the pilot in command to operate safely and efficiently in the national airspace system.164 Furthermore, Congress instructed the FAA to develop a comprehensive plan to safely accelerate the integration of civil unmanned aircraft systems into the national airspace system...[no] later than September 30, 2015165 This prospective plan will likely have a giant impact on the public and private use of drones in the United States.

    Importantly, in Section 336(a) of the FMRA, Congress instructed the FAA that it may not issue regulations that affect the operation of model aircraft, ie, that the FAA:

    [m]ay not promulgate any rule or regulation regarding a model aircraft, or an aircraft being developed as a model aircraft, if 1) the aircraft is flown strictly for hobby or recreational use; 2) the aircraft is operated in accordance with a community-based set of safety guidelines...; 3) the aircraft is limited to not more than 55 pounds...; 4) the aircraft is operated in a manner that doesnt interfere with and gives way to any manned aircraft; and 5) when flown within five miles of an airport, the operator of the aircraft provides the airport operator and the airport air traffic control tower (when an air traffic facility is located at the airport) with prior notice of the operation[.]166

    Thus Section 336 of the FMRA along with AC 91-57 set forth rules for model aircraft along with the Pirker decision discussed above that put model aircraft generally and ostensibly outside the regulatory reach of the FAA. Congress also provided, however, that [n]othing in this section shall be construed to limit the authority of the Administrator to pursue enforcement action against persons operating model aircraft who endanger the safety of the national airspace system.167 In Section 336(c) of the FMRA, Congress also defined a model aircraft as an unmanned aircraft that is 1) capable of sustained flight in the atmosphere; 2) flown within visual line of sight of the person operating the aircraft; and 3) flown for hobby or recreational purposes.168

    6.4.1. The FAAs authority over drones confirmedDespite a direct admonition from Congress in the FMRA that the FAA may not promulgate any rule or regulation regarding a model aircraft, in June 2014, the FAA issued for comment a guidance document169 that took the view that its enforcement authority over model aircraft [was] affirmed by the wording of Section 336 of the FMRA,170 and specifically that model aircraft [are] aircraft that fall within the statutory

    164 P.L. 112-95 331(9).165 P.L. 112-95 332(a)(1); Note that in 2009 the FAA commissioned a comprehensive review of US federal

    laws and rules relating to the operation of UAS. The FAA report concluded that the enormous number of laws and rules may require the FAA to go through and amend each one to resolve ambiguity as to whether and how they apply to UAS, or essentially start over and create an entirely new subpart of the Code of Federal Regulations dealing with UAS. FAA, Unmanned Aircraft System Regulation Review, DOT/FAA/AR-09/7, September 2009, http://www.tc.faa.gov/its/worldpac/techrpt/ar097.pdf.

    166 P.L. 112-95 336(a).167 P.L. 112-95 336(b).168 P.L. 112-95 336(c).169 Model aircraft interests immediately challenged the FAAs June 2014 guidance document: Boston Globe,

    Lawsuits challenge FAA drone, model aircraft rules, August 23, 2014, accessed on September 16, 2014 at http://www.bostonglobe.com/news/nation/2014/08/22/lawsuits-challenge-faa-drone-model-aircraft-rules/IuUxfH0tSt56ePRCwapMSK/story.html (Model aircraft hobbyists, research universities, and commercial drone interests filed lawsuits Friday [August 22, 2014] challenging a government directive that they say imposes tough new limits on the use of model aircraft and broadens the agencys ban on commercial drone flights. The three lawsuits asked the US Court of Appeals for the District of Columbia to review the validity of the directive, which the Federal Aviation Administration issued in June.)

    170 FAA, Interpretation of the Special Rule for Model Aircraft, Docket No. FAA-2014-0396, June 18, 2014 at p. 3, accessed on September 16, 2014 at http://www.faa.gov/uas/media/model_aircraft_spec_rule.pdf; http://www.faa.gov/news/press_releases/news_story.cfm?newsId=16474.

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    and regulatory definitions of an aircraft. 171 Furthermore, the FAA concluded in its June 2014 guidance that [o]perations that meet the section [336(c)] definition of model aircraft must also meet the five additional criteria for model aircraft established in section 336(a) to be exempt from future rule making regarding model aircraft.172

    Thus according to the FAA the new definition of model aircraft is a combination of the criteria set out in FMRA Sections 336(a) and (c), ie, 1) one that is capable of sustained flight; 2) flown within visual line of sight; 3) flown strictly for hobby or recreational purposes173; 4) operated pursuant to guidelines of a membership association that represents the aeromodeling community in the United States; 5) weighs 55 pounds or less; 6) is operated in a way that doesnt interfere with manned aircraft; 7) and when operated within five miles of an airport that it notifies the airport first and airport officials dont object and provides specific authorization.174 [I]f a model aircraft is operated consistently with the terms of section 336(a) and (c), then it would not be subject to future FAA regulations regarding model aircraft.175 Model aircraft that do not meet these statutory requirements are nonetheless unmanned aircraft, and as such, are subject to all existing FAA regulations, as well as future rulemaking action, and the FAA intends to apply its regulations to such unmanned aircraft.176

    The FAAs June 2014 guidance document spends several pages explaining its strict interpretation of the meaning of hobby or recreational use. Any operation not conducted strictly for hobby or recreation purposes could not be operated under the special rule for model aircraft...likewise, flights that are in furtherance of a business, or incidental to a persons business, would not be a hobby or recreation flight.177 Thus the FAA continues to assert regulatory control over model aircraft that do not meet the criteria of Section 336 of the FMRA, especially when it comes to model aircraft (or UAS or drones) used for non-hobby or non-recreational purposes.

    The upshot is that, according to the FAAs June 2014 guidance document, a realtor using model aircraft to photograph a property that hes trying to sell, delivering packages to people for a fee or determining whether crops need to be watered that are grown as part of a commercial farming operation,178 among other even remotely commercial uses, will likely need to obtain a Certificate of Waiver or Authorization (COA) from the FAA179 and a Special Airworthiness Certificate in the experimental category for their drone or model aircraft.180

    6.4.2. FMRA and test rangesThe FMRA instructed the FAA to establish a program to integrate unmanned aircraft systems into the national airspace system at six test ranges.181 The stated goal of the test range program was to safely designate airspace for drone operation, develop drone certification standards and air traffic requirements, address both civil and public drone systems and other purposes.182

    171 Ibid at 4 (emphasis added) (Historically, the FAA has considered model aircraft to be aircraft that fall within the statutory and regulatory definitions of an aircraft, as they are contrivances or devices that are invented, used, or designed to navigate, or fly in, the air.).

    172 Ibid at 11 (emphasis added); see also FAA, What Can I Do With My Model Aircraft? Hobby/Recreational Flying, accessed August 12, 2014, http://www.faa.gov/uas/publications/model_aircraft_operators/.

    173 The hobby requirement is repeated in both Sections 336(a) and (c).174 FAA, Interpretation of the Special Rule for Model Aircraft, supra at 17.175 Ibid at 14.176 Ibid at 7.177 FAA, Interpretation of the Special Rule for Model Aircraft, supra at 10; see also eg, supra, Crains Chicago

    Business, where a real estate photographer used drone to photograph houses, he received an email from the FAA indicating such use was prohibited by law.

    178 Ibid at 11.179 AFS-400 UAS POLICY 05-01, http://www.eoss.org/faa/AFS_400_UAS_POLICY_05_01.pdf. 180 FAA, Unmanned Aircraft Operations in the National Airspace System, 72 Fed. Reg. 6689 (Feb. 13,

    2007), FAA Notice 0701, http://www.faa.gov/uas/. (Under FAA policy, operators who wish to fly an unmanned aircraft for civil use obtain an FAA airworthiness certificate the same as any other type aircraft.) at page 6689-6690.

    181 P.L. 112-95 332(b)(1).182 Ibid.

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    On December 30, 2013, the FAA announced the names of the operators of the six test ranges: University of Alaska, the State of Nevada, New Yorks Griffiss International Airport, North Dakota Department of Commerce, Texas A&M University Corpus Christi and Virginia Polytechnic Institute and State University.183 The FAA stated that [t]hese congressionally-mandated test s