Despite massive growth in drone, will never replace piloted military aircraft entirely.

Massive potential for commercial sector growth US domestic regulatory environment lags behind other countries Clarity slowly emerging amid furious lobbying Multiple privacy, safety, confidence and other issues US lagging behind some other countries

On Thursday, June 11, 2015, the Project for Study of the 21st Century (PS21) held a discussion on The Future of Drones. A full transcript can be found here and video here. The panelists were as follows: Ryan Hagemann (Moderator): Civil Liberties Policy Analyst at the Niskanen Center and adjunct fellow at TechFreedom, specializing in robotics and automation. Erik Lin-Greenberg: Former US Air Force Officer and PhD candidate at Columbia University. Lisa Ellman: Counsel for McKenna Long & Aldridge LLP. Member of the firms Unmanned Aircraft Systems (UAS) Practice Group and Public Policy and Regulatory Affairs practice. Former senior roles at the White House and Department of Justice. Participants were speaking as individuals rather than as representatives of institutions. Please feel free to quote from this report, referencing PS21. If you wish to get in touch with any of the panelists, please email: PS21Central@gmail.com. Drones are not a new phenomenon but have become more useful with advances in technology. Lisa: Drones can represent anything from a toy, a model aircraft that you fly at the park, to a tool of industry... Now, as were seeing, to even a tool of war. Over

the last several years, these consumer toys have gotten a lot more sophisticated, a lot smaller, more mobile, and able to do sophisticated things... Theyre also cheaper. The technology has moved forward at a very rapid pace. Military use has grown exponentially. Ryan: ... 25% of the total aircraft fleet wielded by the U.S. Air Force is now drones as of 2012 as opposed to 2001 where it was something like... 2-3%. Erik: I think youre going to see an increase in the number of states operating Remotely Piloted Aircraft (RPA). Currently, I think the number right now is something like 72 states operate some type of RPA... Still, for now roads remained one of the least glamorous corners of the US Air Force. For a variety of reasons, they are unlikely to replace manned military aircraft entirely. They are insufficiently survivable in complex war zones against sophisticated adversaries -- and even growing suspicion within conventional military aviation poses its own problems. Erik: Policy makers need to pick the right tool for [a] particular policy objective... Drones are great for certain things, but they really dont have the payload of a manned bomber... Right now, its not cool to be a drone pilot. There are these attempts to make slight changes in the cultural perception in the military about RPA versus manned aircraft, but... there is political resistance to having a majority unmanned fleet. The greatest immediate opportunity for growth remains within the commercial sector. Lisa: Real estate agents want to be able to take pictures of the homes that theyre selling. Oil and gas companies want to be able to use drones to inspect infrastructure... their power plants, power line inspections - tasks that are dirty or dangerous or dreary... Farmers want to use drones to inspect their crops and crop dust [and to] spray pesticides and water on their crops. Facebook and Google want to be able to provide wireless Internet all around the world... Amazon wants to use drones to deliver packages... News gatherers and film producers are... excited about the use of drones... because helicopters are so dangerous. But the technology in the U.S. has moved more quickly than the policy-making. Lisa: You have this very strong demand to be able to use drones commercially, but its actually illegal right now in our country to use drones commercially, unless you have special permission from the Federal Aviation Administration (FAA).

Drone flights are still regulated as if they were manned aircraft Lisa: There are a few different categories... Hobbyist use, commercial use, and public use... The idea is that law enforcement and public agencies will use them in very particular circumstances. Right now the law is structured so that hobbyists can, for the most part, do whatever they want... I can fly my drones and take photos of myself and put those photos on Facebook. That is a totally legal flight. If... [I] sell these photos for $10 a piece... that is an illegal flight and not allowed by the FAA. Its not a safety or risk-based question. Its the exact same flight. Its the intent-based question... That comes from the aviation world... There are a lot of questions in the public policy community about whether that makes sense in this area. Erik: There really hasnt been any kind of specific drone law... As weapons systems evolve, we try to figure out how we interpret existing [international] law in the best way possible for military operations. This has led to confusion and is inevitably limiting the growth of the industry. Lisa: ... Because people dont understand why they can do something in one set of circumstances, but if they intend to sell things or make money in any way or do something to promote a business, then they actually have to get a permit from the FAA, which is quite a process. Theyre kind of straddling that line and thats been difficult for a lot of folks. With the legislation still being drawn up, frantic lobbying is underway from multiple interested stakeholders. Lisa: There have been a lot of public policy efforts on behalf of certain groups of folks. Everyone wants a carve-out for their own industry. Everyone wants to be able to do whatever they want. With technology still charging forward, there has been inevitable growth in illegal activity. Lisa: ... There will be aerial photographers who will come take pictures of your wedding with a drone and I guarantee that they dont have a 333 exemption to do that. The FAA does not have the resources to police all the illegal activity that is out there, but if for some reason something was to go wrong, if the flight recklessly endangered the public... then there could be real big problems for that person. The U.S. has not kept up with countries like Canada, Australia, New Zealand, the U.K. and Japan.

Ryan: [The Open Technology Institute] have this great map online where you can click on various countries and it gives you a breakdown of the regulations in different countries surrounding commercial drones... Based on what I see in terms of the market breakdown, it seems like the U.S. is falling very far behind... This is for a number of reasons. Lisa: Usually if youre regulating in healthcare... in energy or [the] environment or food and drugs, you have studies. You have data. You have numbers. Youre able to analyse those numbers and come to a public policy decision. One thing thats been very different here is that we dont have the data and some other countries have been ahead of us in terms of collecting data and doing studies... The other thing is that we have the most complex airspace in the world. However, the U.S. is catching up. Lisa: The federal government... really started to pay attention in 2012 when Congress mandated that the federal government integrate drones into our national airspace... The FAA was given very limited resources to implement what it was asked to do and that is now improving... There have been many tangible steps in the last few months... that will lead to a more open airspace for people who are interested in flying drones... By the end of next year, Id be surprised if there is not a final rule broadly authorizing commercial drone operations across the U.S. Certain restrictions will continue to apply. Lisa: You cant fly at night. You have to remain within visual line of sight... You cant fly in urban locations... The FAA just announced this pathfinder program where its working with specific areas and industries. There is a lot of study and research and development that is going on there... I think we will see beyond line of sight operations. We will see night-time operations. Its just not going to be right away. There are still a number of issues to tackle, including privacy. Lisa: ... A presidential memorandum on privacy, transparency, accountability and civil liberties... was released the same day as the [proposed FAA rule to authorize the commercial use of drones]. It outlined limits on the federal governments own use of drones and put together a multi-stakeholder process... Its an ongoing conversation...Most states in our union have proposed some kind of rule that would limit drone use because of privacy concerns...

Technology may be able to provide a solution to some public policy issues. Erik: There is actually a new website called noflyzone.org. Its not relevant in D.C. since this is restricted airspace, but if I live out in Maryland and have a property and I put my address in, the idea is that participating manufacturers would use geo-fencing technology that boxes out that address in particular. There are questions that need to be considered in a military context too. Erik: ... Is targeting someone elses drones an act of war? Whats the threshold for actual conflict? There are, of course, Department of Defence properties here in the U.S. What if someone tries to fly over their facilities? Its a balance though... You dont want to consider everything sensitive because news gatherers, for example, would say they dont want to be censored out of gathering news from perfectly legitimate locations. Where do you draw the line? And calls for the U.S., as the primary user of RPA, to set a precedent for how RPA are used in military environments. Erik: One of the things the State Department did a few months ago was relax regulations on armed drones and a lot of analysts said this was a good move because it allowed the U.S. to start exporting RPA to some of its allies and friends and partners. If we export, that limits the audience that will potentially buy Chinas drones or Russias drones... Youre able to shape the mindset, and, hopefully, its a mindset in accordance with international law. Drones may put a cap on military escalation. Erik: The use of drones and the presence of drones might make a state more likely to initiate a conflict, but if a drone gets shot down, and weve seen this before... our response was fairly minimal. If that had been a manned aircraft, the response would have been very different. Were on a learning curve. Lisa: We dont know what all the capabilities of drones are. We dont know all the different harms that they can inflict on us and all of the different benefits that they can provide. We are still at that learning stage where they are just now getting integrated into society in a way that benefits the public in certain ways and also provides certain risks. A lot of that fact-finding will have to be happening over the next several years. But every industry has a need for drones and, if they havent identified that need, they soon will do. Lisa: Were going to see... drones increasingly take the place of helicopters... increasingly take the place... of people.

I do think there will be safety incidents. There are going to be privacy incidents... But I think that will all inform the policy making... And ultimately, the dilemmas posed by drones are no different to those posed by any new technology. Lisa: Taking a step back, I think that any technology can be used for good and be used for bad. This isnt the first time that weve had new technology where, all of a sudden, were worried about what some of the ramifications are if theyre used or overused... The key is getting that right.