On August 29, 2016, the United States Federal Aviation Administration (FAA) adopted long-awaited regulations governing commercial operations of small unmanned aircraft systems (UASs) as Part 107 of the Federal Aviation Regulations (Part 107). FAA Administrator Michael Huerto estimates that there will be 600,000 registered commercial UASs operating in U.S. airspace within a year after the enactment of Part 107. This will be an impressive leap from the 20,000 or so UASs currently registered for commercial use in the U.S. The Association for Unmanned Vehicle Systems International (AUVSI) believes that the UAS industry will create more than 100,000 jobs and generate more than $82 billion for the U.S. economy over the next decade. It is worth a brief look at these new regulations, which will impact not only the aviation sector, but also the public at large.

Any commercial aircraft operation in the United States National Airspace System (NAS) requires a certificated and registered aircraft, a licensed pilot and operational approvals or an exemption from such requirements. UASs, commonly called drones, along with all other devices that are used for flight in the air, constitute aircraft for this purpose. (The broad reach of the term “aircraft” is illustrated by the FAA’s grant of authorization to operate a smartphone-controlled paper airplane for aerial photography.) The vast majority of lawful commercial operations of small UASs weighing less than 55 pounds (Small UASs) in the United States will be operated pursuant to Part 107.

Prior to the adoption of Part 107, there were three permitted ways to operate UASs for work, business or other commercial purposes: (i) apply for and obtain an exemption from the supervision and registration requirements of the Federal Aviation Act pursuant to Section 333 of the FAA Modernization and Reform Act of 2012 (Section 333 Exemption) and operate the UASs pursuant to the express terms of the Section 333 Exemption, (ii) obtain an airworthiness certificate for the UASs and operate the aircraft by a pilot pursuant to an operating certificate or (iii) obtain a Certificate of Waiver or Authorization from the FAA and operate the UASs pursuant to the terms of such Certificate of Waiver or Authorization. Each of these options required that the UASs be operated by a pilot holding an Airman Certificate. Before Part 107, legal operations of UASs in the United States for commercial purposes were primarily based on Section 333 Exemptions, except for operations by public entities, which were primarily based on Certificates of Waiver or Authorization. Section 333 authorizes the U.S. Secretary of Transportation to determine whether an airworthiness certificate is necessary in order for a UAS to operate safely in the NAS on a case-by-case basis. During the period from September 25, 2014 through September 28, 2016, 5,552 Section 333 Exemptions for commercial operation of UASs were granted by the FAA.

The Section 333 Exemption process was a stopgap measure used by the FAA to approve commercial operations of UASs on a case-by-case basis while it developed more general regulations. Part 107 contains regulations of general applicability authorizing the commercial operation of Small UASs subject to specific operational restrictions and requirements. With some changes, the restrictions and requirements imposed in many of the Section 333 Exemptions that were granted prior to the adoption of Part 107 formed a framework for the restrictions and requirements for the commercial operation of Small UASs contained in Part 107.

Part 107 creates the operational rules for the commercial use of Small UASs. The basic rules and requirements to operate under Part 107 are as follows:

obtain Remote Pilot Certificate, which requires the Small UASs operator to (i) be at least 16 years of age, (ii) pass an FAA aeronautical test and (iii) submit to and pass a Transportation Security Administration background check;

• operate the Small UASs within visual line of sight (VLOS) of the Remote Pilot;
• operate the Small UASs during daylight hours;
• operate the Small UASs at a height of not more
• operate the Small UASs at or below 100 mph;
• not fly the Small UASs over people except for those participating in the operation or those under a covered structure;
• not operate the Small UASs from a moving vehicle unless the operation is over a sparsely populated area;
• yield the Small UASs to manned aircraft; and
• only operate the Small UASs in non-FAA controlled airspace, such as those areas farther than five nautical miles from airports.than 400 feet above the ground.

In addition to these basic rules and requirements, the Small UASs must also be registered with the FAA, and reregistered every three years. Failure to register (or reregister) a Small UAS or failure to have the correct pilot certification (or exemption from the Part 107 Rules) can result in fines of up to $27,500 per violation. Under Part 107, Small UAS operators are expected to comply with general safety and privacy guidelines as implemented by local and state authorities. Operating under Part 107 bypasses the usual stringent FAA airworthiness standards and requirements, so all Small UAS operators are expected to perform their own safety and communication checks to ensure the Small UAS is safe to fly.

Part 107 provides that an application may be submitted for the issuance of a Certificate of Waiver (CoW) waiving some but not all of the operational restrictions imposed by Part 107 if the FAA concludes that the proposed operations can be safely conducted. Following are some of the waivable requirements: restrictions on operation from a moving vehicle or aircraft, daylight operation, VLOS operations, operation of multiple small unmanned aircraft systems, yielding the right of way and operations over people. With respect to each of the waivable requirements in Part 107, the FAA issued specific performance-based standards that must be satisfied in order to obtain a waiver. Some examples of these performance-based standards are requirements that the applicant provide a method for resolving failure of the Small UASs or its systems, a method to ensure that risks presented to non-participating persons and property are controlled or eliminated and a method to ensure that all persons involved in the operation of the Small UASs are free of any distractions that may prevent them from fulfilling their duties. These guidelines, which are grouped into categories relating to the specific provision of Part 107 for which the waiver is sought, are intended to make it more likely that applications are approved on first submission. The FAA has stated that most of the applications for waivers that have been denied have failed to comply with the FAA’s published guidelines for the requested waiver.

Certain requirements in Part 107 are not subject to waiver including the weight limitation of 55 pounds. While the VLOS requirement is waivable, no waivers will be issued to allow the carriage of property for compensation. This restriction means that the use of Small UASs to deliver merchandise for compensation under Part 107 will be limited to VLOS operations. Approval for the use of UASs for the delivery of merchandise without VLOS will need to be pursuant to an authority other than Part 107, such as a Section 333 Exemption.

The procedure for applying for a waiver from the waivable requirements under Part 107 can be accomplished online and is quite streamlined. During the period from August 29, 2016 through November 25, 2016, 1,185 waivers for Part 107 operations were granted, 173 of which were for a single waiver allowing nighttime operations. Only one waiver under Part 107 has been granted for flights over people, only three waivers have been granted for flights beyond VLOS and only six waivers have been granted for operation of multiple unmanned Small UASs. Over 80 authorizations have been granted for flights in FAA controlled airspace.

While many of the operations of UASs that were authorized pursuant to Section 333 Exemptions will be permissible under Part 107, the Section 333 Exemption process still will be available for operations that are outside Part 107 and not eligible for a CoW. Operations under a Section 333 Exemption will still require an Airman Certificate rather than a Remote Pilot Certificate under Part 107.

The FAA continues to address issues relating to the commercial operation of UASs. Among the key issues remaining to be addressed are conditions relating to operations of UASs over people, operations of UASs beyond VLOS for the delivery of merchandise for compensation, and other purposes and autonomous operations of UASs. The FAA anticipates adopting regulations this winter under which operation of Small UASs over people will be authorized. These regulations will likely focus on safety concerns related to participants and bystanders. The FAA and other federal agencies in conjunction with private entities continue to research and test the operation of UASs beyond VLOS operations. The next several years are likely to see major developments in the scope of permissible commercial operations of UASs which will have considerable commercial benefits for a range of industries (construction, agriculture, surveying and mapping to name a few) that already take advantage of UASs technology and will benefit even further from these developments.

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