Exploring the Legal Landscape for Drones After the FAA’s Release of Part 107 Regulation

The release of Part 107 has completely changed what it means to operate a drone for commercial purposes in the United States. Set to take effect in August, Part 107 is regulation released by the FAA that eliminates the barriers to entry that professionals on every side of the industry have struggled with.

I’ve connected with a few industry experts about what Part 107 means for them and for the industry as a whole, but I wanted to be able to explore some of the specifics with someone who understands the implications of 107 from a legal perspective. Michael Sievers is a lawyer at Hunton & Williams, and as the co-chair of the group’s Unmanned Systems group, was the perfect person to provide some of those insights.

Hunton & Williams is a global law firm of more than 750 lawyers. Its Unmanned Systems Group is dedicated to assisting clients that are actively looking to integrate this UAV technology into their business operations, and it brings regulatory, intellectual property, insurance, privacy and cyber security experience to the table. We connected to discuss the significance of Part 107 for the industry, how 107 impacts questions around state and federal jurisdiction, the best first steps for anyone looking to explore 107 and plenty more.

Jeremiah Karpowicz: Tell us a little bit about your background and what got you involved with the Unmanned Systems Group at Hunton & Williams.

Michael Sievers: I come from a real property background. My practice had focused in that area for a number of years as well as a lot of renewable and traditional energy transactions. I’m especially interested in seeing how the underlying property issues that are inherent in this space will develop. Right now there’s a real tension between where private property rights end and where the national airspace system (NAS) begins. It’s going to be very interesting to see how that is resolved.

 

What are some of the mistakes you’ve seen people make over and over when it comes to legally operating a drone?

In general, the folks who have decided to engage with legal counsel in connection with setting up their drone operations are less likely to be the ones making repeated mistakes. They’ve obviously been thoughtful in their approach to begin with, so it’s a bit of a self-selection issue. These are the sorts of people who are obviously conscientious about how they want to operate a drone.

In broader context, I’ve seen a lot of people struggle with a lack of an understanding around what constitutes the “commercial” use of a drone. The barrier, or threshold, of what constitutes commercial use in the eyes of the FAA is very low, and I think it isn’t necessarily a threshold that I would describe as intuitive for most people. I think that’s where people trip up the most. They think they’re operating as a hobbyist or engaging in something that can’t truly be considered commercial for one reason or another, and therefore don’t think the commercial restrictions apply to them. Very often that is not the case.

Interpretation of the law can be a tricky area, eh?

Well, I don’t think it’s something that comes naturally.

For a lot of people, when they think of a “commercial” use of a drone they think about someone who’s operating a drone business, or someone who is working as a drone service provider. They think that is inherently different than someone who is running a business and just wants to use a drone to grab some photographs. They think it’s just sort of incidental to their other business, and they don’t realize that sort of action would be deemed by the FAA as a commercial use of a drone.

 

How have you seen drones impact the way organizations can operate from a regulatory perspective? 

Some of my largest clients are themselves operating in heavily regulated industries, so they understand how to navigate these kinds of landscapes. At the same time though, we’re often dealing with issues that are multi-layered. Many existing regulatory requirements will need to be updated in order to accommodate the proper implementation of drone technology.

As an example, in certain industries, there might be a regulatory requirement to conduct a survey or collect a sample in a particular manner or using a specific methodology. If those regulations were drafted at a time when no one imagined drones to achieve that task, existing regulations might not permit the use of a drone to do so. We’re at the early stages, but we’re working hard to see things defined and redefined in ways that make sense.

 

And that’s a perfect segue to talk about Part 107, as it will define and redefine what it means to operate a drone for commercial purposes for the foreseeable future. In what way do you think Part 107 is most significant?

The biggest impact Part 107 will have is lowering the barrier to entry. In just a couple months from now, an entire sector of what would be considered “commercial aviation” will be accessible to essentially anyone who is at least 16 years old and can pass an aeronautical knowledge exam in addition to a background check. With the barrier to entry being so much lower, the ranks of drone service providers is going to swell in a noticeable way, but companies that would like to conduct drone operations themselves will have an easier time doing so under 107 than they did with a 333. In short, it will be easier for everyone.

At the same time, many of the most compelling use cases for drones still won’t be permissible under the rule without a waiver, so in some respects the barn door hasn’t been completely thrown open. There will need to be more work done on the regulatory front.

How does this impact anyone who has or is waiting for a 333?

The vast majority of the people waiting for a 333 exemptions to be granted will in all likelihood be able to conduct the operations they envisioned under 107. Those that already have 333 exemptions will have the option to continue operating under the terms of their exemption or move to Part 107. Of course, the 333’s themselves are all time-limited at a two year period if there’s no extension, so in due time folks will all migrate over to 107.

 

What’s the most significant aspect of Part 107 from where you sit?

That really depends on the industry you’re working in as well as what you want to do with the drone, but 107 will eventually be important for the package delivery industry. While the restrictions on beyond visual line of sight (BVLOS) operation in Part 107 still makes package delivery relatively unfeasible, the rule lays important groundwork in terms of the air carrier certification requirements so that when the BVLOS barriers come down, that path will have already been paved.

The other item I would identify as significant is the 400-foot-above-ground-level limitation. I think the way that’s drafted is of great importance to companies looking to use drones to conduct infrastructure inspections. The fact that it’s not merely a 400-foot AGL limit is very important. If you’re within a 400-foot radius of a structure, it allows flights above 400 feet, as long as you’re not more than 400 feet above the top of the structure. That’s a big deal to folks who want to inspect things like cell phone towers or transmission line towers.

 

So you think the things not covered by Part 107 (BVLOS operation, night time flying, etc.) will continue to create a barrier to entry for enterprise use?   

I think so, particularly that BVLOS restriction. It’s a huge barrier to many of the use cases for drones in order for them to be cost effective. I think there are certainly countless use cases that can now be conducted in visual line of sight under 107, but for anyone with linear infrastructure, large surface areas, or otherwise have long distances to cover, that beyond visual line of sight restriction is one that’s hugely significant.

The bigger question there is to what degree the FAA will grant waivers that allow people to operate BVLOS. They describe a waiver process in 107, but I think we’re unlikely to see wide-scale waiver of that restriction until certain technologies like UAS traffic management (UTM) systems are more developed.

 

I’m looking forward to hearing and seeing more about that waiver process, as it seems to be rather ill defined at the moment.

It’s probably limited in description because the FAA is still sorting out exactly what it looks like. The 333 process was very technical and difficult at the beginning, but it wasn’t all that long before they were accepting far less detailed and sophisticated petitions. The process got standardized very quickly, but that only happened once the process was up and running, so we may see something similar play out with this waiver process.

 

How will 107 impact the state and local laws and ordinances that many of these legislative bodies have passed or are considering?  

Part 107 itself doesn’t have a preemption prevision set forth in it, although in the discussion section you can read why the FAA didn’t think it was appropriate or necessary. I don’t think their position has changed from the guidance document they released in December that detailed what type of things they thought state and localities could regulate versus what is in the sole domain of the FAA to regulate.

Preemption issues will continue to be a hot topic for folks to deal with and consider. States and localities have a legitimate right and interest to regulate businesses conducted in their jurisdiction, even if they don’t have the ability to regulate the use of airspace. It will remain the case that states and localities will be able to impose obligations and restrictions that are not airspace related, yet still touch drone industry players. Having to deal with restrictions and regulations that vary from location to location even though they don’t have anything to do with the airspace or the FAA remains a very real issue and possibility for operators.

 

What will it mean to fly a drone in this kind of patchwork regulatory landscape? What kind of operators should be most concerned about it?  

I don’t want to use the word “threat,” but I think this is a real issue that will exist for any company that has a footprint in multiple jurisdictions or states. They might have to comply with additional requirements that aren’t uniform, and it’s just something they’ll have to keep their eye on and understand and which may impose additional costs and burdens on them.

 

What the best first step for anyone who was waiting for Part 107 to become official, and now wants to explore the technology?

It really depends on what side of the industry you’re on, and then what you’re looking to do with a drone.

I would say for someone offering drone services or forming a company to do that, they need to develop the aeronautical knowledge if they aren’t coming from that background. While the test isn’t available to be taken at this moment, that’s the most important thing for anyone without that knowledge to develop. It’s the only way they can understand how to effectively use the airspace.

From the side of a company that is now looking to hire a drone service provider, especially once 107 is available, there were and will be lots of service providers offering a drone service that is applicable to their business. Organizations need to have or develop a way in which they can vet these service providers to know they will be able to deliver the data they’re promising, but also that they can do it in a safe and secure manner. It will be essential to ensure the people operating a drone are concerned about and have thought through far more than their compliance with Part 107.

 

What are you most looking forward to seeing happen or develop as Part 107 becomes the norm in this space? 

As you could probably guess from my background and from what I mentioned earlier, one of the things I’m most intrigued about is the private property rights issue. There are a lot of questions about when and how that’s going to be addressed.

When a person owns an area of land, it’s obvious that person owns some portion of the air above the land. If you build or buy a house or building that is on that piece of land, you clearly own something other than the surface of the land. The question of where your private property rights end above your surface and where the national airspace begins is unresolved at this point. It’s going to be a big topic of discussion, because low-altitude spaces are where drone operators need to be able to operate in.

The FAA, by virtue of regulating drones as aircraft and specifically requiring that they be flown below 400 feet above ground level, has basically opened up the question of whether or not the national airspace extends all the way down to the surface. I think intuitively that can’t really be true, but the question of exactly how far above your property can you exclude someone from flying a drone is not yet answered.

That’s something I’m interested in and will be a critical question for the industry going forward. There’s still a lot to be done, but Part 107 is a great step in the right direction.