MASTHEAD-2The United States’ overregulation of drones is stifling innovation and costing the economy millions of dollars. It’s time for the world to emulate Canada, where pioneers like Amazon enjoy the freedom to experiment with new technology, writes CapX.co contributor Ryan Hagemann in the latest edition of Inside Policy.

By Ryan Hagemann, Inside Policy, Nov. 13, 2015

Around the world, the number of registered commercial drone operators is rapidly increasing. Unfortunately, few of them are in the United States thanks to an outdated and taxing regulatory scheme that has failed to keep pace with technological innovation.

The biggest impediment for a wider and more robust commercial drone, or unmanned aerial systems/vehicles (UAS/UAV), environment is twofold: public perception and regulatory hurdles. While public perception will have to be left to civil society and social norms to address, the Federal Aviation Administration (FAA), which regulates U.S. airspace, could be doing a great deal more to catalyze the nascent commercial drone market – mainly, by doing less.

The FAA’s recently promulgated rules for private drones distinguish between “commercial” and “recreational” uses – a strange delineation given the similarities between commercial and hobby drone platforms. After all, it is specious to reason that hobbyists are, by nature, more safety-conscious than commercial operators. Why should a drone weighing 5 lbs. used purely for the enjoyment of the spectacle be subject to a separate regulatory classification than a 5 lbs. drone used for paid services? If anything, the commercial operator has a greater incentive for safety and security, and is far more likely to be insured against liability than a recreational user. But concerns over the FAA’s regulatory differentiation between the purposes of use are merely the tip of the iceberg.

Issues such as availability of spectrum, the consistencies of radio links between drones and their operators, privacy concerns, disparate weights and associated safety implications, and more have continually plagued regulators in the U.S. and around the globe. Unfortunately, while regulators struggle to cope with these potential problems, commercial drones are already being integrated into the airspace of less risk-averse nations, such as Germany and Japan, with prime movers set to achieve important short-term gains. And these myriad regulatory anxieties surrounding drones are not unique to the United States.

IPNov2015coverLike in the US, the use of drones in the UK is regulated by the Civilian Aviation Authority (CAA), much in the same way that drones in the United States are regulated by the FAA. Under both regulatory regimes, drones are limited in their commercial use, constrained to visual-line-of-sight (VLOS) operations, and permitted for hobbyist use up to a certain weight class (50 lbs. in the US and 20 kg in the UK). In both countries, commercial UAS operations are constrained by excessive regulatory oversight. Yet in Japan and Australia, drones have been used for decades for everything from inspecting crops to repairing telephone wires. This is not an untested technology, nor should it have to be subject to burdensome ex ante regulations. Rather, the US and UK should embrace permissionless innovation – the notion that innovators and entrepreneurs should be free to experiment with new technologies and ways of doing business without seeking prior approval from technocratic regulators.

Canada could teach both countries a thing or two about embracing permissionless innovation. Transport Canada (TC), the country’s equivalent of the FAA or CAA, permits the commercial use of any drone weighing less than 2 kg without a TC exemption. For those drones weighing 2.1 – 25 kg, TC exemptions are also waived, though the agency mandates that it be notified of the flight plan in advance. That regulatory system is what has permitted an enormous groundswell of commercial UAS investment over the past few years. Although the United States possesses a considerable share of the world’s commercial UAS market, it lags behind both Canada and the UK in commercial application for drones. And, as of March of this past year, Canada boasted almost 110 commercial firms providing drone-based services used in industries such as film, forestry, farming, oil and gas exploration, and many more. Canada has displayed so friendly a disposition towards commercial drones that Amazon, having been frustrated by the regulatory environment in the United States, absconded north of the border to British Columbia to begin testing its experimental drone delivery service.

While onerous regulations, like those already promulgated by the FAA this past spring, are clearly a deterrent for investment and economic growth, a lack of certainty for would-be commercial operators could be just as burdensome. The FAA’s rules have done little to provide that certainty. So long as the FAA continues to drag its heels, subjecting commercial firms to arduous certification exemptions, Amazon, Google, and other firms will continue to farm out their research, development, and testing facilities overseas to Europe and Australia. Every day the FAA fails to implement a fast-track system for commercialization of this industry, the U.S. economy loses out on tens of millions of dollars that, in the absence of regulatory uncertainty, would mean more jobs and innovation here at home.

The trouble that many regulators have encountered is akin to many other emerging technologies on the verge of commercialization (see: Autonomous Vehicles): the technology is simply moving too swiftly to be caught by ex ante regulations.

The easy solution is to permit by default the use of any private drone, whether for commercial or recreational purposes, under a certain weight category. It has worked well for Canada, and there’s no reason to suspect the U.S. would encounter drastically different challenges than its neighbor to the north. The trouble lies in drone use in more populated, high-density urban city centres. Getting the rules right amidst the skyscraper landscapes of New York and Chicago is a far different regulatory beast than permitting commercial drones in rural environments. However, these are problems that may be close to a viable solution.

NASA is currently working with companies like Verizon and Google to test the possibilities of using cell-towers as communications platforms for a larger UAS traffic management system. They currently estimate the research and development of the system could result in an operational system by 2019. While the details of how such a system would be effectively implemented are still in the working stages, forestalling the private operations of drones will not speed implementation towards the finish line. In fact, as more users and firms begin adopting the use of drones, a clearer picture will emerge of where the problems lie. Solutions will follow.

There are certainly issues to overcome with regards to commercial drones. But we can’t begin addressing the problems before they happen. Airspace holds the potential as a new platform for innovation and experimentation, much as the Internet has. Only by freeing the skies can we begin unleashing innovation in this space. If the U.S. does not, other countries surely will.

Ryan Hagemann is the technology and civil liberties policy analyst for the Niskanen Center, a libertarian issue advocacy organization. He also serves as an adjunct fellow with TechFreedom, a libertarian think tank focused on technology issues. This article originally appeared on CapX.co.

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