U.S. Unveils Plan for Domestic Drones, Privacy

U.S. aviation regulators will continue to restrict domestic drone flights for several years, according to plans for how they will eventually unleash an industry that may reach $89 billion in the next decade.

The Federal Aviation Administration today also set rules restricting the gathering of data by drones at six test sites the agency is set to approve, in some of the first privacy restrictions on unmanned aircraft systems.

The agency, in a statement and guidance published on its website, said it will for at least several years continue to restrict drone approvals to a “case-by-case basis.”

Domesticating Drone Flights: The Rules

“It requires significant work to build consensus on how we safely integrate game-changing technologies such as these,” FAA Administrator Michael Huerta said today at an industry conference in Washington.

Major drone makers include Northrop Grumman Corp. (NOC), General Atomics Aeronautical Systems Inc. and Aerovironment Inc. (AVAV)

The FAA report was required by Congress last year as part of a package of drone-related provisions in legislation authorizing operations of the agency. The agency is in the process of approving test sites.

Lawmakers gave the FAA until 2015 to draft rules for flying unmanned aircraft safely in the same skies as planes and helicopters. Even if rules are in place by then, the FAA signaled in today’s report that drones still may not be ready to share the skies with airliners, private planes and other craft without special protections.

Avoiding Planes

Huerta said he interpreted the 2015 mandate as requiring the agency to develop a framework for integration, not as a deadline to allow drones unrestricted access to the airways.

With airplanes, a pilot avoids other aircraft by tracking them visually or is guided by an air-traffic controller. Standards for how to create similar systems for remote-controlled craft haven’t been drafted.

Drones lack the safety systems to enable them to operate in proximity to traditional planes and helicopters, the Government Accountability Office said in a September 2012 report.

While researchers are working on technology that would allow unmanned vehicles to automatically avoid other aircraft and each other, it is not proven yet, according to the report.

‘Tentative’ Approach

FAA’s approach to protecting privacy is “tentative,” said Jennifer Lynch, a senior staff attorney at the Electronic Frontier Foundation, a privacy group based in San Francisco.

The agency should “take a stronger stand” as it tests drones, Lynch said in an interview. Applicants for drone permits should be required to state what information they plan to collect, whom they plan to share it with and how long they plan to retain it, she said.

Forty-three U.S. states have introduced legislation regulating the use of drones, “which means the public is concerned about the privacy implications of drones,” she said.

“It would be nice for a federal agency to step up to regulate drone privacy,” she said. “If it’s not the FAA, then it should be another agency.”

Test site operators will have to have a written plan for how data gathered by drones will be used and retained, according to today’s guidelines. They must also conduct an annual review of privacy practices and allow public comment.

While the privacy policies at the test sites won’t apply to broader drone use, their development will help inform future decisions on civil liberties from the new technology, the agency said in its report.

‘Rightfully Concerned’

U.S. Representatives Ted Poe, a Texas Republican, and Zoe Lofgren, a California Democrat, in February introduced legislation that would require a warrant or court order for law enforcement use of drones. Exceptions include immediate danger of death and other emergency situations. The bill also bans law enforcement equipping drones with firearms.

“Individuals are rightfully concerned that these new eyes in the sky may threaten their privacy,” Poe said in an e-mail statement at the time. “Just because Big Brother can look into someone’s backyard doesn’t mean it should. Technology may change, but the Constitution does not.”

Growth Expected

With the exception of two approvals for use in the Arctic, there are no U.S. rules allowing commercial drone flights. As of Feb. 15, the agency had approved 1,014 ad hoc permits allowing government agencies and academic institutions to fly drones since 2009, according to the agency.

The FAA is scheduled to propose new rules as soon as this year that would allow commercial or government flights of small unmanned aircraft without having to obtain special permits.

Drone use is expected to slowly increase as the FAA crafts regulations governing their use, privacy concerns are addressed and the technology matures, a report by the Massachusetts-based Volpe National Transportation Systems Center found.

The number of unmanned vehicles will grow more rapidly in coming decades and may reach 250,000 by 2035, including 175,000 in commercial service, the report projected.

Expenditures on civilian and military drones around the world are expected to total $89 billion during the next 10 years, according to a forecast by the Teal Group Corp., a Fairfax, Virginia-based aerospace research company.

Spending on unmanned aircraft and related systems is estimated at $5.2 billion a year and will more than double to $11.6 billion in 10 years, according to the Teal report.

To contact the reporters on this story: Alan Levin in Washington at alevin24@bloomberg.net; Allan Holmes in Washington at aholmes25@bloomberg.net

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net

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