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Holding pattern Colorado drone makers wait anxiously for FAA approval, eye other markets

The drone industry in Colorado is temporarily banned from American skies as it awaits clearance from the Federal Aviation Administration to take to the skies.

The economic impact to the state could reach $232 million within a couple of years once the FAA submits regulations and they are approved, according to a report released by the Association for Unmanned Vehicle Systems International in late 2013.

Drone manufacturing companies are sprinkled throughout Colorado, including Iron Ridge USA in Longmont, Front Line Aerospace in Broomfield, Bye Aerospace in Englewood, Falcon Unmanned in Aurora and Scion Aviation in Fort Collins. Some of these companies are selling their products in countries where unmanned aircraft are not so heavily regulated.

In February, the Federal Aviation Administration released a summary of its proposed rules for small unmanned aircraft that it will submit to the Transportation Department. The rules are not expected to be approved until 2017 following a public comment period and revising by the FAA.

The FAA believes the regulations, assuming they pass as written, will allow drones to be used in fields such as aerial photography, agriculture and inspection of bridges and towers.
Under the proposed regulations, operators would be permitted to fly their drones at a maximum altitude of 500 feet above ground level within visual line of sight. The drafted rules apply only to nonrecreational flight operations and also address operator certification, as well as aircraft registration and marking.

Now that the proposal has been released, the FAA will allow for 60 days of public comments from the date of publication in the Federal Register. Once that period is over, it could be up to 18 months until the FAA works the comments into the proposal and the finalized rules are published.

Anne Swanson, a partner with Cooley LLP’s regulatory communications practice in Washington, D.C., told Avionics Magazine that she believes it will be 18 to 24 months — some time in 2017 — before the new rules go from the proposed stage to being effective.

“I’m guessing the FAA will get thousands of comments, it will read the comments, it will work the comments into its proposed rules and come up with a final set of rules that the FAA will review internally, the Transportation Department will review, the Office of Management and Budget will have to review and then we’ll get a final decision with the final rules,” she told the magazine.

In the meantime, the FAA is granting some exemptions to commercial drone operators – but that process is long, complicated and can be costly.

As of Jan. 23, the FAA had received 246 exemption applications for commercial drone use but had approved only 16.

Most of the companies receiving exemptions are news organizations and moviemakers, but an exemption also has been granted for agricultural purposes.

Paul Hoff, chief executive of Boulder-based Agribotix LLC, is evaluating whether to apply for an exemption so it can operate and sell its product in the United States or focus on selling outside the country where drones can fly without so much government oversight.

The one-year-old startup designs and manufactures drones that carry a camera and the company’s software system, which collects data for the agriculture industry.

“This is frustrating. It’s hard to build a business like ours under these circumstances,” Hoff said.

FAA officials acknowledge the slow-pace of regulation is hampering some companies, but it insists it is working as efficiently as possible.

Michael Huerta, head of the Federal Aviation Administration, recently told CNN that for proponents of unmanned aircraft, “We can’t move fast enough.”

The hang-up for companies such as Agribotix is the complexity of the exemption application, the cost of preparing it and the time it will take to be reviewed.

The application requires detailed explanations of how the drone is made, how components operate, how it will be flown, what it will be flown for and cite every current FAA regulation from which it wants to be exempt, which can be in the hundreds. Once the application is filed, it takes from 60 to 120 days to grant or deny the exemption, Hoff said. He said the fee to apply is minimal, but he is estimating the cost of preparing an application can range from $20,000 to $50,000 in outside consulting fees.

“Small companies like us are going to need that outside help on the application because of its complexity to have a chance of it being approved,” he said.

Tom McKinnon, founder of Agribotix, said he fears that even when the FAA presents its regulations for drones in September, there could be a yearlong comment period before they are put in place.

Setting an example

Advanced Aviation Solutions in Spokane, Wash., received an exemption to fly its eBee Ag system, a drone mounted with a geo-referenced still camera used to capture photos of crops so farmers can perform precision agriculture.

Hoff said his team is studying Advanced Aviation’s application and trying to determine if it’s worth the time and money.

“What applicants are doing is taking existing exemptions that have been granted and modifying them to cover how they want to use the drone,” Hoff said. The FAA is looking at these on a case-by-case basis, because of the variety of ways drones can be used in airspace, which is taking time and manpower the FAA doesn’t have, Hoff said.

McKinnon said the alternative for his company is to look outside the country for customers where drones can be operated without all the government oversight.

“We’ve sold our drone systems in 11 countries, including Canada,” he said. “The sad part of all this is that American farmers don’t get access to this great technology. Some of the FAA’s safety concerns really don’t apply to open and uninhabited farm land, say in Nebraska.”

Safety a government concern

Huerta, in the CNN interview, said the FAA is working with the Model Aeronautics Association, the model community and clubs to educate first-time operators about the rules.

Still, proponents of drone use argue the unmanned aerial vehicles have great potential for both surveillance and commercialism, a balance which Huerta said the FAA is working to achieve.
Huerta said the FAA is focused on education and enforcement.

“We’ve enforced hundreds of these cases where we have seen someone operating one of these things carelessly and recklessly and posing the danger to aircraft,” he said, “and that can’t happen.”
Since drones have entered the commercial market, the FAA reports, airplane pilots have seen up to 25 cases per month of drones flying above the regulated limit of 400 feet, with some flying as high as 2,000 feet in the air. Huerta said the FAA is working to educate people about the dangers of flying drones that high, since enforcement of the small, unmanned aerial vehicles can be difficult.

Huerta said the FAA will be publishing a “rule-making” that takes into consideration the qualifications of the drone operator, and the certification of the aircraft to combat the potential terrorism threat drones pose.

In Advanced Aviation’s exemption, the FAA is requiring the company to have a two-person team – an operator with a current pilot’s license and a certified observer. Hoff added that the FAA, through the exemption, can require drone operators to file flight planes with nearby airports.

Doug Storum can be reached at 303-630-1959, 970-416-7369 or
dstorum@bizwestmedia.com.