Drones to Take Flight at Six Test Sites Chosen by FAA

Dec. 30 (Bloomberg) -- The U.S. approved drone test centers in six states, including New York, as the start of research efforts to eventually allow civilian unmanned aircraft widespread access to the nation’s airways. Alan Levin reports on Bloomberg Television's "Bloomberg West." (Source: Bloomberg)

The U.S. approved drone test centers in six states, including New York, as the start of research efforts to eventually allow civilian unmanned aircraft widespread access to the nation’s airways.

The Federal Aviation Administration, after sifting through 25 applicants, also approved bids from Alaska, Nevada, North Dakota, Texas and Virginia, it said in an e-mailed statement.

“What we were really looking for was, how do we select six that give us the broadest base of different airspace configurations, different traffic configurations and different climates?” FAA Administrator Michael Huerta said in a conference call with reporters.

The selection is one of the first U.S. regulatory moves to begin integrating unmanned aircraft with piloted planes and helicopters as companies including Amazon.com Inc. (AMZN) push to develop commercial drones.

Domesticating Drones

Sales of civilian and military drones around the world may reach $89 billion during the next decade, according to a forecast by the Teal Group Corp., a Fairfax, Virginia-based aerospace research company. Drone makers include Northrop Grumman Corp. (NOC), General Atomics and AeroVironment Inc. (AVAV)

Amazon Chief Executive Officer Jeff Bezos told CBS’s “60 Minutes” for a Dec. 1 segment that small copters may be able to drop off packages weighing as much as 5 pounds (2.3 kilograms), speeding delivery of books and other items. Bezos said it may take the FAA four or five years to create rules permitting the devices.

Source: Amazon.com Inc. via Bloomberg

The Amazon.com Inc. Prime Air octocopter is seen at an undisclosed location. Close

The Amazon.com Inc. Prime Air octocopter is seen at an undisclosed location.

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Source: Amazon.com Inc. via Bloomberg

The Amazon.com Inc. Prime Air octocopter is seen at an undisclosed location.

Cluster Effect

The test sites’ backers expected that winning bids would draw companies and jobs, Andrea Bianchi, program manager for New York’s successful proposal, said in an interview before the announcement.

The test sites will be used to help the FAA develop certification standards for unmanned aircraft and how they can be operated within the air-traffic system, according to the law requiring the sites.

“The important thing about today’s announcement is it provides the platform for this research to really be carried out on a very large scale across the entire country,” the FAA’s Huerta said.

New York’s testing will focus on how drones will operate in the dense air traffic in the Northeast, he said.

Multiple States

The winners were the University of Alaska, which also has test sites located in Hawaii and Oregon; the state of Nevada; Griffiss International Airport in Rome, New York, which also plans to use a facility in Massachusetts; the North Dakota Department of Commerce; Texas A&M University at Corpus Christi; and Virginia Polytechnic Institute, in Blacksburg, which will also conduct testing in New Jersey.

The first site will become operational within 180 days and will operate at least through 2017, Huerta said.

Organizers of the Texas bid expect economic development in the Corpus Christi area, according to a statement. They plan to operate 11 test ranges in the state, led by researchers at campuses in Corpus Christi and College Station.

“Texas has a long and distinguished history in the aerospace industry, and this test site is an important opportunity to create jobs and grow the industry in our state,” Texas Governor Rick Perry said in a statement.

Drone testing may produce $260 million in economic impact in Texas over the next decade, including 1,200 jobs, according to a March study by the Association of Unmanned Vehicle Systems International, an Arlington, Virginia-based trade group promoting the industry.

Growth Forecast

There will be almost 250,000 civilian and military drones in the U.S. by 2035, according to a study this year by the Department of Transportation. Usage will be sparse at first, growing as technology hurdles are cleared, the study concluded.

Some users aren’t waiting for the FAA. The agency fined Swiss citizen Raphael Pirker $10,000 for flying a model airplane at the University of Virginia in Charlottesville to make a promotional video in 2011. Pirker is challenging the fine, arguing that FAA has no authority to regulate drones.

In response to concerns that drones put people’s privacy at risk, the FAA will require test-site operators to maintain records of devices flying at the facility, create a written plan for how data collected by airborne vehicles will be used and retained, and conduct a yearly privacy review.

Facilities must also adhere to all privacy laws that may apply to drone use, such as restrictions on law enforcement to obtain search warrants, according to the FAA’s privacy policy.

No Guarantee

The FAA received applicants from 24 states, from Alaska to Florida, according to the agency.

Earning the FAA endorsement for a test site isn’t a guarantee that local economic development will follow, William Miller, a professor emeritus at the Stanford University Graduate School of Business, said in an interview.

Many factors -- including local labor laws, proximity to investors and the social and political climate -- have to be present before a test facility will spawn a small-scale version of California’s Silicon Valley, said Miller, who has studied entrepreneurs and the regions in which they’ve blossomed.

“If there isn’t a good set of conditions, the companies don’t thrive. They often move elsewhere,” he said.

Within minutes of the FAA’s announcement, Ohio Republican Senator Rob Portman issued a statement saying he was disappointed that his state’s application wasn’t chosen.

“Ohio is a national leader in aerospace, and would have been an ideal location for one of the sites,” Portman said in the release.

Huerta declined to say why proposals such as Ohio’s weren’t chosen.

“We received many, many great proposals,” Huerta said. “But in picking six, what we have here is a slate that provides a great platform to conduct research all across the country.”

To contact the reporters on this story: Alan Levin in Washington at alevin24@bloomberg.net; David Mildenberg in Austin at dmildenberg@bloomberg.net

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

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