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Do FAA Rules Hurt Your Small Drone Business?

Confused by the FAA’s small drone regulations? Feeling choked as a business?

As you know, the FAA declares they govern *all* airspace, even the 400 feet above ground in which you fly everything from a paper airplane to a kite to a remote-controlled kit-built airplane and, yes, your multirotor drone. But FAA regulations are being challenged, as I discussed here.

Given that, I’d like to take the pulse of drone business owners like yourself to assess and quantify the impact of FAA regulations on commercial use of low-altitude small unmanned aerial systems (sUAS). So I’ve posted a survey. If you’d like to speak your mind about this topic and have others listen without fear of recrimination, you’ve come to the right place.

You can access the survey (which is just 15 questions) online via this link: https://www.surveymonkey.com/s/VHKR5FJ

What’s this survey about?

This survey explores the impact that current and future FAA regulations have on commercial use of low-altitude small unmanned aerial systems. The study is designed to expose both business sentiment about- and the economic impact of- FAA regulations.

I’ll keep results of the survey confidential and have designed it for those businesses that sell, operate, or intend to operate, their sUAS in the U.S. for commercial purposes. At the end of survey, responses will be aggregated, analyzed, and summarized in research reports to be issued within the next several months.

What’s in it for you?

If you provide your contact information at the end of the survey, I’ll send you a free report. A complete downloadable version will come later.

For best results we need as many respondents as possible, so I encourage every business involved in the sUAS market – whether established company or start-up – to take the survey.

For all surveys – including this one -there are no right or wrong answers. News agencies, companies, and research firms around the world rely on businesses and consumers like you to give them feedback on the latest trends, consumer sentiment, regulations, and products and services. If agencies created regulations and companies created products and services without consumer feedback, there would be a lot of failed products, wasted money, and failed businesses.

That is why they engage with companies like Drone Analyst to seek input from real consumers like you. We take your one opinion and combine it with hundreds of other opinions to create aggregate data. That data goes into research reports that help them create better regulations and products. Aggregate data is valuable in providing feedback to all parties – including you and your business. Your individual answers are confidential and are not shared in reports. Respondents who want to assure their anonymity further need not provide their contact information.

How to take surveys

Take the time to read each question carefully and provide sincere and truthful answers– your input is key to decision-making. Remember: Your answers are private. Any attempt to speed though the surveys, take a survey more than once or provide false or misleading information will result in bad data and unreliable conclusions.

And, if you have questions and would like to discuss one-on-one, email me at colin@droneanalyst.com

Image credit: Shutterstock

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The Business of Drones: A Tale of Two Cities

The year was 1775.

“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way.. “

Ah, the famous opening lines of A Tale of Two Cities. The Charles Dickens passage seems to create a sense of sweeping possibility: the age is everything and nothing at all.

Examined closely, the passage also suggests that this is an age of radical opposites with almost no in-betweens. And that is how I would characterize the current state of the small drones business – radical opposites. 

On the one hand you have the large public defense-related drone contractors like AeroVironment , maker of the Raven, Puma, and Shrike, looking now to capture commercial opportunities in the civilian market.  For our purposes they represent the London royal establishment. On the other hand, you have the small private startups like MarcusUAV and Vorobetz looking for a chance for liberty from restrictive air space regulations. They represent the Paris freedom fighters.

Just as in the novel, each city had its own drama and naiveté, so, too, do our players. While everything’s coming up roses in London, everything’s coming up dead in Paris. In fact, in Paris they are so unhappy that they’re beginning to band together as ‘citizens’ of a new republic. They are at their core a revolutionary group.  But we can’t tell that they’re revolutionaries, because they’re super-secret. For the most part, they operate their businesses in an underground – as you will see.

The Loyal Royals – As Patrick Egan points out in the article Skyjacked – The DoD Mega Billion Dollar Drone Payout, being a Department of Defense (DoD) contractor has its perks. Perks like private demonstrations of new drones, research and development at taxpayer expense – not to mention the benefits that come from large campaign contributions to key members of Senate and House oversight committees. Those benefits keep them feeding at the public trough.

But there’s trouble in that city. As the U.S. wars in Iraq and Afghanistan wind down, the demand for small drones from the DoD is declining. The declining demand shows up in the backlog of companies like AeroVironment. Three months ago they had a backlog of about $134 million, and in the latest earnings report, it dropped to about $96 million. The operating cash flow in the latest report has declined more than 30% year over year. 

So, what do you think companies like AeroVironment are going to do to offset their losses? And how do you think they will go about it?

Well, for one, they’ve already started to look toward other government agencies for revenue. Take for example what’s happening at the U.S. Geological Survey’s (USGS) National Unmanned Aircraft Systems (UAS) Project Office.  Under this program, the Department of the Interior has acquired Raven and T-Hawk small UAS systems valued at nearly $15M from the DoD to conduct proof-of-concept (POC) projects. But even if a POC works, someone would need to pony up about a half a million dollars of their scarce budget to secure a contract for just one Raven or Shrike VTOL and all the systems, training, travel and staff required. Why do that when there are proven civilian service providers that will come to your door and do the same work covering flight, post-processing, and analysis for only $3-$4 per acre?

As you can see, there is trouble ahead for this city.

The Freedom Fighters –  The way they see it, for decades the FAA has functioned as essentially a lawless agency making up arbitrary rules for small drones and enforcing them all without following fair rule-making procedures. Despite their six-year ban on civilian drone use, start-ups like Bosh Precision Agriculture and CineDrones perform commercial services every day in an underground economy.  Companies like these have been doing so – not with military-spec aircraft – but with sophisticated model aircraft. As I wrote in Drones Revolution Means Big Data Cloud Services, hardware is commoditized, and the barriers for entry are low. Their numbers are growing every day. At last count, the Remote Control Aerial Photography Association (RCAPA) has over 2,000 U.S. members. Keep in mind aerial photography is a very small segment of the civilian market. The big money appears to be in precision agriculture.

While it’s true the path of FAA regulations was supposed to have all players both large and small in a holding pattern until all the rules are settled, the scales recently tipped in favor of the small ones. The Pirker Decision finds that the FAA’s 2007 policy statement banning the commercial use of model aircraft is not enforceable. Just by looking at it through the eyes of Twitter #UAS and #drones it appears this will have a very significant impact. Even though the FAA has decided to appeal to the full National Transportation Safety Board (NTSB), those closest to the case doubt it will be overturned.

Over the next few months, you can expect small drone service providers to be more public about their ventures. Still, the Pirker Decision reinforces the gravity of the FAA Modernization and Reform Act of 2012, which requires the FAA, through the Secretary of Transportation, to develop a plan for integrating civil UAS into the national airspace. It also specifies that the plan recommend rules for acceptable operating standards and certification of civil UAS.

So enforceable rules for drones of all sizes will come. The FAA is mandated to do so. But it’s pretty clear the rule making process will not account for community based standards written by and for small business. As Egan points out, “The DoD lobby and the jockeying for a spot at the [public feeding] trough has added years to the National Airspace System (NAS) integration for small unmanned aircraft. The byproduct of the chicanery has been the suppression and undermining of the small businessperson and academic end-users.”

The Naiveté of the Two Cities  - For the most part, start-ups are clueless about the advantage the Loyal Royals have from feeding off the public gravy train. These issues never come up in on-line forums. But the Loyal Royals’ influence is far reaching. Look no further than the list of corporate sponsors on the AUVSI website , a civilian drone advocacy group, to see what I mean. See any of the ‘Big 6′ defense contractor names there?

But take heart. Because equally clueless are the DoD contractors and their paid analysts about the power of what a model aircraft drone can do commercially or how overpriced military-spec drones are for the civilian market.  

Case in point: Here’s a simple price comparison of fixed wing drones capable of carrying multiple sensors. On the one hand, you have the AeroVironment Raven RQ-11 with a total systems cost in excess of $250,000. On the other hand, you have a MarcusUAV Zephyr2 system that goes for $17,995. Both are capable of doing mission planning and photogrammetry. Which one would you buy? Which city do you think holds the future of the civilian commercial market?

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